Summary

0. Properties - Meeting Date: 2026-03-XX - Meeting Type: 1x1 - Note Type: Summary - Attendees: Scott Warner; David McHugh

1. Meeting Summary We focused on three areas: governance/legal housekeeping, product liability and warranty strategy, and bankruptcy-related supply chain risk.

On governance, I finally pushed through the long-delayed entity spreadsheet updates by calling stakeholders directly. With Jennifer gone, Mary will shepherd filings; I will keep pressure on data gaps and upcoming written consents. We need to reflect the parent company change from AG to SE on all written consents going forward.

On warranty and product liability, I will package the warranty change recommendations from Matt Mills and Robert and send a concise summary to Tamara so she can confirm scope and HQ boundaries. In parallel, David will consult Jonathan Judge and produce a draft intercompany agreement to help shield the German parent and our North America entities (TTS Tooltechnic Systems North America LP and Festool USA LLC) from US product liability exposure. We want something in hand before our next meeting with Tamara so the topic does not slip.

We also spent time on two bankruptcy tracks. First, lessons learned from the US customer default to tighten credit risk controls and explore using a purchase money security interest (PMSI) in targeted cases. David will send a short memo to help me and Amity evaluate PMSI practicality and mechanics. Second, Shaper's sole-source tape supplier appears to be Multi-Color Corporation (MCC), now in a prepackaged Chapter 11 in the District of New Jersey. Beth will advise us on the plan's opt-out mechanics and implications. Our working view: do not opt out; prepetition claims will be wiped, postpetition remain, and the debtor may assume or reject executory contracts. We need to see the current supply agreement and plan near-term dual-sourcing because the Shaper tool is nonfunctional without tape.

We closed with compliance training planning for 2026 and a quick check on the annual legal audit letter. Training priorities include IP, deeper dives on influencers/sweepstakes, antitrust, and privacy, ideally framed with US vs Germany contrasts, and timed to onboard a wave of new sales team members. I will also get David an updated org chart.

2. Attendee List - Scott Warner - David McHugh

3. Action Items - Scott - Send Tamara a concise summary of proposed warranty changes and the operational approach aligned with Matt and Robert's input. - Scott - Coordinate with Mary to complete entity spreadsheet follow-ups and filings; continue to drive data closure. - Scott - Prepare upcoming written consents and ensure the parent company name is updated from AG to SE on all documents. - Scott - Provide David with the latest Festool USA org chart. - Scott - Align with Amity on leveraging AFS more formally on selected insurance defense matters; keep her looped on the bankruptcy items as needed. - Scott - Draft training proposal outline for 2026 and circulate to David for input. - David - Consult Jonathan Judge and draft a proposed intercompany agreement framework to protect the German parent and NA entities from US product liability exposure; share a draft before the next meeting with Tamara. - David - Prepare and send a 1-hour capped PMSI overview memo with practical steps and discipline requirements for use in higher-risk accounts. - David - Lead Monday call with Beth and Leah on MCC's Chapter 11; advise on opt-out question and practical supply continuity risk. - David - Request and review the current Shaper tape supplier agreement with MCC; confirm risk of assumption vs rejection; coordinate with Leah/Philip in Germany. - David - Reply to Leah's note with initial guidance and specific asks; keep Scott copied. - David - Continue handling the accelerated legal audit letter process and coordinate with his internal team on any open Festool matters.

4. Relevant Timelines - Near-term - Monday: Bankruptcy call with Beth and Leah re MCC's prepackaged Chapter 11, opt-out, and contract posture. [David] - Next 2 weeks - Have intercompany agreement concept and warranty summary ready for the upcoming meeting with Tamara to avoid delay. [Scott, David] - ASAP - Written consents to reflect parent change from AG to SE; confirm with Mary before circulation. [Scott] - ASAP - Provide updated org chart to David. [Scott] - 1 hour this week - PMSI memo from David to Scott and Amity. [David] - 2026 planning window - Define and schedule compliance training modules for new hires and broader teams. [Scott, David]

5. Additional Notes - Entity structure and invoicing flow: Festool GmbH invoices TTS Tooltechnic Systems North America LP; TTS NA LP invoices Festool USA LLC and Festool Canada Inc; dealers are invoiced by Festool USA/Canada. Useful context for any intercompany agreement and warranty language that could be upstreamed by HQ. - Bankruptcy - customer credit policy: PMSI can help but only if we are disciplined each shipment with prior notices to all secured parties, and timing before goods receipt. Often impractical for high-turn inventory; may fit where stock sits longer. Regardless, we must tighten credit monitoring to avoid large exposures building unnoticed. - MCC Chapter 11 takeaways: Prepackaged plan suggests a white-knight sponsor converting debt to equity with a large net-debt reduction, so operations are expected to continue. Even so, sole-source risk for Shaper tape is unacceptable; initiate dual-source planning. Confirm whether GmbH's supply contract exists and its terms; debtor may assume or reject it postpetition. - Legal audit letter: Compressed timing this cycle; David's firm has triggered internal ABA Accord-compliant processes. We should expect targeted follow-up questions; timing may spill just beyond the auditors' preferred date. - Warranty boundaries: Expect HQ to want centralized control if warranty terms become the global template. Have Tamara clarify what latitude the US team has vs what must be issued from HQ. - Insurance counsel: McDermott is strong but expensive; consider a more formal engagement with AFS where cost/benefit favors them. - Training 2026 - working list: - IP basics for business users - trademarks and copyright. - Marketing deep dive - influencers, sweepstakes, contests, and disclosures. - Antitrust fundamentals for field and channel teams. - Privacy updates - practical implications and Germany vs US contrasts. - Consider delivery in Germany to drive alignment with HQ teams.