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EXHIBIT 3.8
DATED 31ST AUGUST 1999
▇▇▇▇▇ NETWORKS N.V.
and
OLICOM A/S
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Agreement for the Sale and Purchase
of assets relating to Olicom's token ring business
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Bird & Bird
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: ▇▇▇▇-▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇-▇▇▇ ▇▇▇▇
Ref: DXK/NXB/▇▇▇▇▇.5
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CONTENTS
1. DEFINITIONS AND INTERPRETATION..........................................................................1
2. SALE OF THE ASSETS.....................................................................................10
3. CONSIDERATION..........................................................................................12
4. .........................................................................................................
5. COMPLETION.............................................................................................13
6. TRANSFERRING EMPLOYEES.................................................................................14
7. APPORTIONMENT..........................................................................................15
8. WARRANTIES.............................................................................................16
9. COVENANTS BY THE SELLER................................................................................17
10. POST-COMPLETION OBLIGATIONS............................................................................19
11. TRANSITION.............................................................................................19
12. INTELLECTUAL PROPERTY RIGHTS...........................................................................20
13. ANNOUNCEMENTS AND CONFIDENTIALITY......................................................................23
14. COSTS..................................................................................................24
15. ASSIGNMENT.............................................................................................24
16. GENERAL................................................................................................25
17. APPLICABLE LAW AND JURISDICTION........................................................................26
18. NOTICES................................................................................................26
SCHEDULE 1
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SCHEDULE 2
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SCHEDULE 3
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SCHEDULE 4
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SCHEDULE 5
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SCHEDULE 6
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SCHEDULE 7
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SCHEDULE 8
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SCHEDULE 9
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SCHEDULE 10
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SCHEDULE 11
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SCHEDULE 12
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SCHEDULE 13
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ANNEX 1
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ANNEX 2
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THIS AGREEMENT is made on 31st August 1999
BETWEEN
(1) ▇▇▇▇▇ NETWORKS NV a company organized under the laws of the Netherlands
whose registered office is at Transpolis Schipol Airport, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the "BUYER"); and
(2) OLICOM A/S, a company incorporated in Denmark, whose principal office
is at Nybrovej ▇▇▇, ▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "SELLER").
BACKGROUND
A. The Seller and its subsidiaries carry on the Business which involves
the use of the Assets.
B. The Seller wishes to sell and (as appropriate) will procure that its
subsidiaries will sell and the Buyer wishes to buy the Assets.
OPERATIVE PROVISIONS
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement and the Schedules, the following terms shall have the
following meanings unless otherwise stated:
"ACCOUNTS" means the audited consolidated balance sheet of the Seller
and the audited profit and loss account of the Seller and its
subsidiaries for the year ended on the Accounts Date, together in each
case with the related notes, directors' report and auditor's report;
"ACCOUNTS DATE" means 31 December 1998;
"AGREED FORM" means in the form agreed between the Seller and the Buyer
and initialed by each of them or their representatives before execution
of this Agreement, with any amendments which they subsequently agree in
writing;
"ASSETS" means all the assets and rights owned by the Seller or other
members of the Seller's Group relating to the Business as described in
clause 2 and includes, where the context permits, each or any of them;
"ASSIGNED CONTRACTS" means the contracts listed in the Third Schedule
to the IPR Agreement and any Contracts which become Assigned Contracts
after the Completion Date pursuant to paragraph 2.1 of Schedule 6;
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"ASSUMED LIABILITIES" means:
(a) all liabilities of the Seller in respect of obligations
falling due for performance or satisfaction after the
Completion Date (or in respect of contracts assigned pursuant
to paragraph 2.1 of Schedule 6, after the date of assignment
of such contracts) in respect of contractual or other
obligations of the Seller relating to the Assets to the extent
disclosed or identifiable from the written terms of any of the
Disclosure Documents, but not including (i) any liabilities in
respect of express or implied warranties given by any member
of the Seller's Group if not included in the Assumed Warranty
Obligations and (ii) any liabilities specifically excluded
pursuant to the terms of this Agreement or the Intellectual
Property Rights Agreements and (iii) any liabilities relating
to the Distribution Contracts which are included solely for
the purpose of the Inventory Agreement;
(b) all liabilities of the Seller in respect of Assumed Warranty
Obligations; provided that the Seller shall indemnify the
Buyer's Group against all costs and liabilities incurred by
the Buyer's Group in connection with warranty claims
associated with any latent and material defects discovered
within a period of one year from the Completion Date in
products sold by the Seller before the Completion Date; and
(c) all liabilities of the Seller in relation to the Transferring
Employees to the extent that such liabilities relate to the
period after the Completion Date;
(d) all liabilities of the Seller in relation to the Call Off and
Scheduled Orders to the extent that performance falls due from
the sixth day after the Completion Date;
"ASSUMED WARRANTY OBLIGATIONS" means
(a) Warranty Obligations relating to Transferred Products other
than those liabilities retained by the Seller pursuant to
Schedule 10 (Technical Support) and other than Warranty
Obligations associated with latent and material product
defects in products sold by the Seller before the Completion
Date; and
(b) Warranty Obligations the Buyer has elected in writing to
perform in relation to Discontinued Products pursuant to
Paragraph 1.15 of Schedule 6 to the extent stated in that
clause and in relation to Discontinued RMA Stock pursuant to
paragraph 8 of Schedule 7 to the extent stated in that clause.
"BUSINESS" means the business of the Seller and other members of the
Seller's Group involving the design, manufacture, distribution and sale
of Token Ring Products as carried out by the Seller at Completion;
"BUSINESS DAY" means a day (excluding Saturday, Sunday, Christmas Day
or New Year's Day) which is also a day on which clearing banks in New
York and Copenhagen are open for the conduct of banking business;
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"BUSINESS INFORMATION" means:
(a) all information, know-how and techniques (whether or not
confidential and in whatever form held) owned by the Seller
and members of the Seller's Group (including correspondence
relating to the Contracts) and which relates to all or any
part of the Business or the Assets;
(b) all information held by the Seller relating to the supply of
CCU products to customers of the Seller including without
limitation, the names and addresses of customers, the
type/model of CCU product supplied and the date of supply);
(c) all information held by the Seller relating to the warranty
cards completed by Customers (including without limitation,
the names and addresses of' customers who have completed
warranty cards, the Token Ring Product supplied and the date
of supply.
"BUYER'S GROUP" means the Buyer and each of its subsidiaries, its
holding company and any subsidiaries of its holding company, including
any entity, which had it been formed and registered as a company in
England and Wales would have fallen within this definition;
"BUYER'S SOLICITORS" means Bird & Bird, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇;
"BUYER'S YEAR 2000 STATEMENT" means the statements made on the Buyer's
website under the heading "▇▇▇▇▇ Networks Token Ring and ATM Year 2000
Compliance Test Room Report (Issues)" dated July 1999, a complete and
accurate copy of which is contained in Schedule 11;
"CALL OFF AND SCHEDULED ORDERS" means any order in the order book of
the Seller that has not been shipped by the end of the fifth day after
Completion
"CLAIM" means any claim for breach of Warranties;
"CLEARSIGHT" means OC8000 Clearsight for Open View v 10.3 (w/HP OV
D.03) and Clearsight for Open View NNM/NT v 10.3;
"COMPLETION" means completion of the sale and purchase of the Assets
pursuant to this Agreement and in accordance with Clause 5;
"COMPLETION DATE" means the date on which Completion occurs;
"CONTRACTS" means the End User Contracts, the Maintenance Contracts,
the Supplier Contracts and the OEM Contracts;
"CUSTOMER" means any person who has directly or indirectly purchased
Token Ring Products from any member of the Seller's Group at any time
on or before Completion;
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"DATABASE" means the database containing details of all Customers;
"DISCONTINUED PRODUCTS" means Token Ring Products manufactured or
supplied by the Seller prior to Completion which at the sole discretion
of the Seller have been discontinued prior to Completion as listed in
Part B of Schedule 8;
"DISCONTINUED RMA STOCK" means RMA Stock manufactured or supplied by
the Seller which at the sole discretion of the Seller has been
discontinued prior to Completion;
"DISTRIBUTION CONTRACTS" means those contracts between members of the
Seller's Group and distributors relating to the Business relating to
the supply of goods or equipment or the provision of maintenance or
other services which are listed in Part C of Schedule 1;
"DISCLOSURE DOCUMENTS" means the documents attached as annexure 1
initialed by or on behalf of the parties and listed in the index of
disclosure documents set out in Schedule l4;
"EMPLOYMENT REGULATIONS" means the Acquired Rights Directive
(77/187/EEC as it is applied in each member state of the European Union
in which employees employed in the Business are based including,
without limitation, the United Kingdom, Austria, Denmark, France,
Germany, Spain, Norway, Sweden or such analogous legislation in any
other country in which employees employed in the Business are based
including, without limitation the United States of America, Japan,
Poland;
"END USER CONTRACTS" means the contract dated 22 June 1999 between
Olicom Inc. and the State of Ohio and the contract dated 20 November
1995 between the Seller and State Farm Mutual Automobile Insurance
Company;
"EQUIPMENT" means all moveable equipment and tooling used for research
and development, manufacture and repair and maintenance services in
connection with the Business as described in Part A of Schedule 1;
"FINANCIAL INFORMATION" means the financial information contained in
the documents referred to in 9.1 and 9.2 of the Disclosure Documents;
"GOODWILL" means the goodwill associated with the Business with the
exclusive right to carry on the Business in succession to the Seller
and other members of the Seller's Group
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under the name "Olicom" (subject to license from Olivetti with regard
to the use of the wordmark and trademark "Olicom") and the right for
the Buyer to represent itself as carrying on business in succession to
the Seller provided that:
(a) the Seller and the Seller's Group shall retain the right to
use the wordmark and trademark "Olicom" in connection with any
part of any business other than the Business;
(b) the Buyer shall not be entitled to use the word "Olicom" as
any part of its corporate name;
"INTELLECTUAL PROPERTY RIGHTS AGREEMENTS" means the following
agreements in the Agreed Forms to be made between the Seller and the
Buyer at Completion relating to the transfer to the Buyer of certain
intellectual property rights and other know-how connected with the
Business owned by or licensed to the Seller or member of the Seller's
Group:
(a) IPR Agreement,
(b) Assignment of Trade Marks;
(c) Assignment of Patent Applications;
(d) Trade ▇▇▇▇ License;
(e) Patent License;
"INTELLECTUAL PROPERTY RIGHTS" or "IPR" means patents, trademarks,
service marks. trade names, design rights, copyright (including rights
in computer software), rights in know-how and all other intellectual
property rights, in each case whether registered or unregistered and
including applications for the grant of such rights and all rights or
forms of protection having equivalent or similar effect anywhere in the
world provided such are in connection with the Business;
"INVENTORY" has the meaning given in the Inventory Agreement;
"INVENTORY AGREEMENT" means the agreement in the Agreed Form to be made
between the Seller and the Buyer at Completion relating to the
valuation of and the parties' rights and obligations with regard to the
product inventory of the Seller's Group relating to the Business;
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"▇▇▇▇▇ CLARIFY SYSTEM" means Madge's Oracle system database in which
▇▇▇▇▇ logs certain details relating to problems reported by ▇▇▇▇▇
customers relating to products it has supplied;
"▇▇▇▇▇ DATABASE" means the database to be agreed between the parties
pursuant to clause 4 of Schedule 6 containing details of whom the
Seller exclusively supplied Token Ring Products on or before the
Completion Date;
"MAINTENANCE CONTRACTS" means those contracts between members of' the
Seller's Group and customers in connection with the Business for the
maintenance of the Seller's Token Ring Products which are listed in
Part C of Schedule 1;
"NON-TRANSFERRING EMPLOYEES" means those employees of the Seller and
other members of the Seller's Group employed (and any person who may
claim to be so employed) in connection with the Business but who are
not Transferring Employees;
"OEM CONTRACTS" means the contracts made between Olicom and certain
manufacturers listed in Part C of Schedule 1;
"OLICOM DATABASE" means the database to be agreed between the parties
pursuant to clause 4 of Schedule 6, containing details of any person to
whom the Seller supplied products other than Token Ring Products on or
before the Completion Date;
"OLICOM LOTUS NOTES SYSTEM" means the Seller's Lotus Notes system
database in which the Seller logs certain details relating to problems
reported by the Seller's customers relating to Token Ring Products it
has supplied;
"PARTIES" means the parties to this Agreement;
"PERIOD 1" shall bear the meaning given to it in paragraph 1 of the
Technical Support Schedule;
"PERIOD 2" shall bear the meaning given to it in paragraph 1 of the
Technical Support Schedule;
"PERMITS" means all licenses, consents, permits and authorizations
issued by any competent governmental or regulatory body and which are
held by any member of the Seller's Group in connection with the
Business and which are listed in Part A of Schedule 1;
"QUARTER" means each complete period of three months ending on 30
September, 31 December, 31 March and 30 June;
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"RECORDS" means all lists of Customers, current reports, price lists,
cost records, catalogues, records relating to the Transferring
Employees and all other records. documents and files relating to the
Business or any of the Assets;
"RMA STOCK" means new or refurbished inventory suitable for shipment to
customers in replacement of Token Ring Products under warranty,
returned by customers as listed in Part C of Schedule 8;
"SELLER'S GROUP" means the Seller and each of its subsidiaries, its
holding company and any subsidiaries of its holding company, including
any entity which had it been formed and registered as a company in
England and Wales would have fallen within this definition;
"SELLER'S SOLICITORS" means ▇▇▇▇-▇▇▇▇▇ & Trolle of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇, ▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇;
"SUPPLIER CONTRACTS" means those contracts entered into on or prior to
the Completion Date by or on behalf of the Seller or other members of
the Seller's Group for the supply or sale of components and other goods
to the Seller in connection with the Business which are listed in Part
C of Schedule 1;
"TAX" means all forms of taxation, duties, imposts, levies,
withholdings or liability imposed whether in the United Kingdom or
elsewhere and shall further include any penalty, fine or surcharge or
interest payable in addition to or in connection with it;
"TECHNICAL SUPPORT PERIOD" shall bear the meaning given to it in the
Technical Support Schedule;
"TECHNICAL SUPPORT SCHEDULE" means Schedule 10 to this Agreement;
"TECHNICAL SUPPORT SERVICES" means the technical support services which
the Seller will provide to the Buyer in respect of the Transferred
Products in accordance with the Technical Support Schedule;
"TOKEN RING INTERFACE" means a local area network interface
implementing and operating substantially in accordance with the IEEE
802.5 family of standards (including 100Mbit/s, and DTR functions)
including, without limitation, an interface implementing either token
ring end station or hub or switch functions;
"TOKEN RING PRODUCTS" means subject to clause 1.8;
(i) networking products (including, but not limited to, network
interface cards, local area network hubs, local area network
switches and routers) having one or more Token Ring
Interfaces; and
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(ii) network management software required to configure or control such
products,
provided that where a product is modular consisting of a number of
customer or field replaceable units then only the customer or field
replaceable unit within that product having a Token Ring Interface (and
associated network management software) shall be treated as a Token
Ring Product. (As an example, only the token ring interface module with
a combined Ethernet/token ring local area network switch shall be
treated as a Token Ring Product). However, an add-in module solely used
to extend the functions of a Token Ring Product shall also be
considered a Token Ring Product even if it does not implement a Token
Ring Interface (as an example, an ATM uplink module for a token ring
switch shall be treated as a Token Ring Product) and Token Ring Product
shall have a corresponding meaning;
"TOKEN RING SERVICES" means maintenance and support services relating
to Token Ring Products;
"TRANSFERRING EMPLOYEES" means those individuals employed by the Seller
and members of the Seller's Group and named in Part B of Schedule 1 or
any person transferred after the Completion Date pursuant to clause
6.4;
"TRANSFERRED PRODUCTS" means Token Ring Products manufactured or
supplied by the Seller prior to Completion and listed in Part A of
Schedule 8;
"TRANSITION SCHEDULE" means Schedule 9 to this Agreement;
"UNRELEASED PRODUCTS" means Token Ring Products developed or in the
process of, development by the Seller prior to Completion (whether or
not such development has resulted in a usable Token Ring Product) which
have not been manufactured or supplied on a commercial basis prior to
Completion;
"VAT" means value added tax;
"WARRANTIES" means the warranties on the part of the Seller contained
in Clause 8 and Schedule 3 of this Agreement and clause 8 of the IPR
Agreement;
"WARRANTY OBLIGATIONS" means those obligations of any member of the
Seller's Group in relation to:
(a) written warranties given to Customers, re-sellers or
distributors concerning products supplied to such persons in
connection with the Business to the extent that an accurate
copy of the document containing the relevant warranty is
contained in the Disclosure Documents; or
(b) warranties implied by any applicable law or by industry
practice to the extent that Token Ring Products designed,
manufactured, or supplied by the Buyer on or before the date
of' this Agreement are subject to substantially the same
implied warranties,
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but does not include any liabilities in respect of claims for warranty
work to be performed which have been notified in writing by a Customer
or a reseller or distributor to any member of the Seller's Group on or
before the Completion Date or any liability arising from or in
connection with any express or implied warranty that a product is Year
2000 Compliant;
"YEAR 2000 COMPLIANT" shall have the meaning given in the statements
made on the Seller's website under the heading "The Year 2000
Challenge" as at 12 August 1999, a complete and accurate copy of which
is set out in the Disclosure Documents;
"YEAR 2000 CONFORMITY" shall have the meaning as set out in the Buyer's
Year 2000 Statement;
"YEAR 2000 REPORT" means the report by Century Technology Services Inc.
on evaluating the Year 2000 effects on the business of the Seller, a
complete and accurate copy of which is available in the Disclosure
Documents.
1.2 In this Agreement, unless expressly stated otherwise:
(a) a reference to a person or people includes a reference to any
entity which has legal personality by the law of any
applicable country or territory;
(b) a reference to a statute or ordinance or a provision of a
statute or ordinance includes a reference to any amendment, or
re-enactment of it, any subordinate legislation (as defined in
s.21(1) Interpretation ▇▇▇ ▇▇▇▇ or other applicable law) made
under it and any previous statute or provision re-enacted by
it, including, without limitation, orders in council, orders
and any subordinate legislation to such orders, in any case
before or after the date of this Agreement except to the
extent that any amendment, re-enactment or subordinate
legislation coming into force after the date of this Agreement
would increase or extend the liability of any party to this
Agreement to any other party under this Agreement;
(c) a reference to a clause, schedule or to the parties is to a
clause or schedule or the parties of or to this Agreement, and
a reference in any schedule to a paragraph is to a paragraph
of that schedule;
(d) a reference to any action, legal document, remedy,
proceedings, status or other legal concept shall, in respect
of any foreign jurisdiction, relate to whatever in that
jurisdiction most closely corresponds to the relevant English
term.
1.3 Headings shall be disregarded in construing this Agreement.
1.4 Any undertaking by a party not to do any act or thing includes an
undertaking not to allow, cause or assist the doing of that act or
thing.
1.5 The ejusdem generis rule shall not apply in the construction of this
Agreement, and accordingly general words shall not be given a
restrictive meaning by reason of their
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being followed or preceded by words indicating a particular class or
examples of acts or matters.
1.6 References to "$" or "dollars" are to the lawful currency of the United
States of America.
1.7 "Subsidiary" and "holding company" shall have the meanings given in
Section 736 of the Companies ▇▇▇ ▇▇▇▇.
1.8 For the avoidance of doubt:
(a) routers included under Token Ring Products are not Transferred
Products;
(b) IPR associated with routers are not assigned or licensed under
this Agreement by the Seller to the Buyer;
(c) the Seller shall keep all rights to manufacture, support and
enhance routers that support all other technologies than Token
Ring;
(d) the Seller commits to refrain from developing, manufacturing
and selling routers with Token Ring ports except for the 7052
TR-variant and the 8012 TR-variant;
(e) the 7052 TR-variant and the 8012 TR-variant are subject to
specific end-of-life provisions specified in the IPR
Agreement.
2. SALE OF THE ASSETS
2.1 On and subject to the terms of this Agreement and with effect from the
close of business on the Completion Date the Seller shall sell, and
shall procure the sale by each relevant member of the Seller's Group,
and the Buyer shall or shall procure that a member of the Buyer's Group
shall purchase the following Assets with full title guarantee free from
all Encumbrances and together with all rights and benefits attaching or
accruing to them:
(a) the Goodwill;
(b) the Equipment;
(c) the Business Information;
(d) the Records;
(e) all Intellectual Property Rights relating to the Business in
accordance with the terms of the Intellectual Property Rights
Agreements; and
(f) the Permits.
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2.2 On the Completion Date, the Seller shall and shall procure that each
member of the Seller's Group shall assign the Database to the Buyer.
2.3 The Buyer shall not be obliged to complete the purchase of' any of the
Assets unless the purchase of all of the Assets is completed
simultaneously.
2.4 The Buyer undertakes with effect from the Completion Date to assume and
perform the obligations of the Seller under the Assigned Contracts in
accordance with their terms to the extent that they are Assumed
Liabilities and shall become entitled to the benefits of the Seller
under the Assigned Contracts, provided that nothing in this Agreement
shall require the Buyer to perform any obligation or satisfy any
liability arising under the Assigned Contracts save to the extent that
such obligations or liabilities are as stated in the Assigned
Contracts, complete and accurate copies of which are contained in the
Disclosure Documents, provided that in respect of any Assigned
Contracts which are assigned pursuant to paragraph 2.1 of Schedule 6,
references in this clause to the Completion Date shall be deemed to be
a reference to the date of assignment of such Assigned Contract.
2.5 Following Completion the Buyer shall be responsible for discharging the
Assumed Liabilities and shall indemnify the Seller against all actions,
proceedings, costs, damages, claims or demands brought or made against
the Seller in connection with the Assumed Liabilities.
2.6 Nothing in this Agreement:
(a) shall require the Buyer to perform any obligation or satisfy
any liability save to the extent that such obligation or
liability is an Assumed Liability or is expressly stated in
this Agreement;
(b) without prejudice to the generality of 2.6(a), shall require
the Buyer to perform any obligation or satisfy any liability
of the Seller's Group:
(i) in respect of support for Discontinued Products;
(ii) in respect of liabilities relating to promotional or
marketing offers in effect on or before the
Completion Date whether or not applying to the supply
of products and services after the Completion Date;
(iii) in respect of liabilities relating to special
pricing, rebates, special cash incentives to
distributors or resellers and other similar incentive
payments in effect on or before the Completion Date
whether or not applying to the supply of products and
services after the Completion Date;
(c) shall make the Buyer liable for or impose any obligation oil
the Buyer in respect of any act, neglect, default or omission
of the Seller unless specifically stated in this Agreement.
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2.7 The Seller shall indemnify the Buyer against all costs, claims, demands
and liabilities in respect of all debts, liabilities and obligations
(including, without limitation, as described in clause 2.6) asserted
against the Buyer or any member of the Buyer's Group not included in
Assumed Liabilities. In relation to any Third Party Claim (as defined
in clause 3.5 of Schedule 4) for which the Buyer is entitled to seek an
indemnity from the Seller under this clause, the Seller shall be
entitled to take such action at its expense (including without
limitation, settle or compromise with the Third Party) in relation to
the Third Party, Claim as it shall in its absolute discretion decide.
2.8 The Seller shall indemnify the Buyer's Group against all costs, claims,
demands and liabilities in respect of all debts, liabilities and
obligations asserted against the Buyer or any member of Buyer's Group
arising in relation to:
(a) any products supplied by the Seller to any third party prior
to the Completion Date not being Year 2000 Compliant;
(b) Transferred Products manufactured by the Buyer after the
Completion Date to the specifications used by the Seller prior
to the Completion Date not having Year 2000 Conformity
provided that:
(i) the Seller shall not be liable under this clause
where such Transferred Products fail to have Year
2000 Conformity as a result of any modifications made
to such specifications by the Buyer; and
(ii) the Seller shall not be liable under this clause
unless written notice of any claim is given to the
Seller on or before 1 April 2000.
3. CONSIDERATION
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5. COMPLETION
5.1 Completion shall take place at the offices of the Buyer's Solicitors.
At Completion the Seller and the Buyer shall each perform their
respective obligations in relation to the sale and purchase of the
Assets in accordance with Parts A and B of Schedule 2.
5.2 The Seller shall continue to carry on the Business for its own benefit
and at its own risk up to the close of business on the Completion Date
at which time the Assets shall be transferred to the Buyer.
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5.3 If on the Completion Date the Seller fails to comply with any of the
provisions of' Schedule 2 but shall be able to comply with all of the
provisions of Schedule 2 within no more than twenty Business Days, the
Seller may by notice to the Buyer postpone Completion by up to twenty
Business Days provided that the Seller shall not be able to postpone
Completion more than once.
5.4 If on the postponed Completion Date either party fails to comply with
any of the provisions of Schedule 2, the other party may by notice to
the party in default:
(a) terminate this Agreement; or
(b) proceed to Completion, in which case the party in default
shall be obliged to fulfill those of its obligations under
Schedule 2 as it is then able and to fulfill any unfulfilled
obligations under Schedule 2 on any later date specified in
the notice.
5.5 Beneficial ownership and risk in respect of the Assets shall pass to
the Buyer from the close of business on the Completion Date at which
time the Assets shall be transferred to the Buyer.
5.6 Neither the Buyer nor the Seller shall be entitled to rescind or
repudiate this Agreement or any other agreement in the Agreed Form
referred to in Schedule 13 for any reason unless expressly stated or
for fraudulent misrepresentation whether before or after Completion.
6. TRANSFERRING EMPLOYEES
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7. APPORTIONMENT
7.2 All periodical sums receivable in respect of the Assets (including, but
not limited to, license fees and other similar sums) shall be
apportioned between the Seller and the Buyer on a time basis so that
such part of the relevant periodical sums as is attributable to the
period ending on and including the Completion Date shall be for the
benefit of the Seller and such part of the relevant periodical sums as
is attributable to the period commencing on the day following the
Completion Date shall be for the benefit of the Buyer. However, any
part of such license fees or other sums received by the Seller or
Buyer, which represent VAT chargeable on the amount received by the
Seller or Buyer shall (as relevant) be paid in full to or retained in
full by the party which is required to account to the relevant
authority for VAT on such.
7.3 The Seller and the Buyer shall indemnify each other from and against
any actions, proceedings, damages, costs, claims and demands arising
from or in connection with the
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charges or outgoings apportioned pursuant to clause 7.1 and any failure
to discharge them.
7.4 All payments due from one party to the other pursuant to this clause 7
shall be paid within five Business Days after the end of each month
after the Completion Date in respect of amounts accruing during that
month. Each party shall provide the other with appropriate evidence of
the calculation of such amounts.
8. WARRANTIES
8.1 SELLER'S WARRANTIES
(a) The Seller warrants to the Buyer in the terms of the
Warranties.
(b) The Warranties are given subject only to matters disclosed in
the Disclosure Documents meaning that the Seller shall not
have any liability for any Claim based on any fact, matter, or
circumstance having been disclosed in this Agreement or by the
Disclosure Documents.
(d) Each of the Warranties shall be separate and independent and,
save as expressly provided, shall not be limited by reference
to any other Warranty or any other provision in this
Agreement.
(e) The Seller agrees with the Buyer (for itself and as trustee
for each of the Transferring Employees):
(i) that the giving by any Transferring Employee to the
Seller or its respective agents or advisers of any
information or opinion in connection with the
Warranties or any of the other agreements to be
entered into pursuant to this agreement or other-wise
in relation to the Business shall not be deemed to be
a representation, warranty or guarantee to the Seller
of the accuracy of such information or opinion;
(ii) to waive any right or claim which it may have against
any Transferring Employee or for any error, omission
or misrepresentation in any such information or
opinion save for any such right or claim based on
gross negligence or willful conduct; and
(iii) that any such right or claim shall not constitute a
defense to any claim by the Seller under or in
relation to this agreement (including the Warranties)
or any of the other agreements to be entered into
pursuant to this
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agreement save for any such right or claim based on
gross negligence or willful conduct.
(f) Part A of Schedule 4 shall apply to limit or exclude in
accordance with its terms, any liability which the Seller
might otherwise have in respect of a breach of the Warranties,
provided that (a) the provisions of Part A of Schedule 4 shall
not apply to any such liability in circumstances of fraud by
or on behalf of the Seller; or (b) the provisions of paragraph
2 of Schedule 4 shall not apply in circumstances of willful
non-disclosure by or on behalf of the Seller. References in
Schedule 4 to the Buyer and the Seller shall (apart from
paragraph 3.15 of Part A and paragraph 10 of Part B) be deemed
to be references to the Buyer's Group and the Seller's Group
respectively.
(g) The Warranties shall continue in full force and effect
notwithstanding Completion.
8.2 BUYER'S WARRANTIES
(a) The Buyer warrants that:
(i) it has the requisite power and authority to enter
into and perform this Agreement and the agreements to
be entered into pursuant to it.
(ii) it does not require the consent, approval or
authority of any other person to enter into or
perform its obligations under this Agreement.
(iii) the execution and delivery of and the performance by
the Buyer of its obligations under this Agreement and
the agreements to be entered into pursuant to it will
not:
(A) be or result in a breach of, or constitute a
default under, any agreement, instrument or
arrangement to which the Buyer is a party or
by which the Buyer is bound; or
(B) be or result in a breach of any order,
judgement or decree of any court or
governmental agency to which the Buyer is a
party or by which the Buyer or the Business
is bound; or
(C) be or result in a breach of any of the
provisions of the memorandum or articles of
association of the Buyer.
9. COVENANTS BY THE SELLER
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9.2
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POST-COMPLETION OBLIGATIONS
10.1 The Seller shall, and shall procure that members of the Seller's Group
shall after Completion comply with Schedule 6 and the Technical Support
Schedule.
10.2 The Buyer shall, and shall procure that member's of the Buyer's Group
shall after Completion comply with Schedule 7 and the Technical Support
Schedule.
11. TRANSITION
11.1 GENERAL
(a) The Seller shall, and shall procure that members of the
Seller's Group shall after Completion use all reasonable
endeavours to comply with the Transition Schedule and to carry
into effect the matters referred to in it.
(b) The Buyer shall, and shall procure that members of the Buyer's
Group shall after Completion use all reasonable endeavors to
assist, make timely management and operational decisions, give
advice, answer queries, conduct any audits (as defined in the
Transition Schedule) as may be reasonably required by the
Seller and allocate relevant resources in order to carry into
effect the matters referred to in the Transition Schedule.
(c) The Seller agrees to provide at no cost to the Buyer a
translation of any Technical Documents (as defined in the IPR
Agreement) transferred in connection with this Agreement after
the Completion Date which are not in the English language
provided that where the Seller has any documents that are not
in the English language which are translations of documents
originally in the English language it shall not be obliged to
provide a translation.
(d) The Seller agrees to use its reasonable endeavours to transfer
or to make arrangements to transfer to the Buyer all rights
related to the electronic identity and address ranges (IEEE)
embedded in the Transferred Products.
(f) The Seller undertakes with the Buyer that it will not grant a
sub-lease relating to any sales offices occupied by it on or
before the Completion Date without (a) first giving the Buyer
written notice and allowing it 21 Business Days from the date
of service of such notice to state in writing whether it
wishes to take the sub-lease; and (b) if the Buyer wishes to
negotiate the terms of such sublease in good faith with the
Buyer provided that, if such terms have not been agreed within
a period of 30 Business Days after they commence, the Seller
shall be free to enter into a
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sub-lease relating to that office with any other person on no
more favorable terms to the sub-tenant.
12. INTELLECTUAL PROPERTY RIGHTS
12.1 GENERAL
(a) All intellectual property rights (including patents,
registered designs, unregistered designs, copyrights,
technical information or know how and similar rights
worldwide) arising in the course of or as a consequence of the
Seller undertaking development work under the Transition
Schedule shall belong to the Buyer. Without prejudice to the
above, the Seller shall have a non-exclusive license to use
any know-how developed in the course of or as a consequence of
the Seller undertaking such development work for purposes not
related to Token Ring Products or Token Ring Services.
(b) Such intellectual property shall be free of all third party
claims of ownership and all work undertaken by the Seller in
which Intellectual Property Rights might arise shall be its
own original work.
(c) The Seller shall (a) forthwith communicate to the Buyer any
designs, discoveries, inventions or other matters potentially
the subject to such Intellectual Property Rights, (b) shall
not disclose them (or any proposals communicated to it by the
Buyer, which proposals it shall retain in confidence) to any
third party without the prior written consent of the Buyer, to
which they shall belong and (c) deliver all documents,
drawings, models, samples. prototypes and the like prepared by
or for the Seller in each case to the extent that such matters
relate to the development work under the Transition Schedule;
(d) Further, to the extent that full legal title to any copyright
so arising shall fall automatically to belong to the Buyer by
virtue of the above provisions the Seller shall hold such
right on trust for the Buyer absolutely, and shall forthwith
at the request of the Buyer execute or procure the execution
of any document required by the Buyer to vest in it (or as it
shall direct) the full legal title to such copyright and to
enable it (or its nominee) to enjoy the benefit of such right.
(e) The Seller agrees that it shall (and shall procure that any
member of the Seller's Group shall) where it has agreed under
the Transition Schedule to provide Business Information and
any other information or documentation to the Buyer, provide
true and accurate copies of such information on or before any
date stipulated or where not stipulated as soon as reasonably
practicable.
(f) If there is any conflict between the provisions of this clause
12.1 and the provisions of the IPR Agreement, the provisions
of this Agreement shall prevail.
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12.2 DISPUTES
(a) In the case of any disputes between the parties as to any
matter arising out of or in connection with the Transition
Schedule or any disputes relating to the failure of any party
to perform an obligation under the Transition Schedule the
parties shall procure that the operational directors of the
Buyer and Seller with responsibility for the relevant area in
dispute shall meet to attempt in good faith to resolve the
dispute. The meeting shall be held within 7 days of a written
request from one party to the other. This request must set out
full details of the dispute.
(b) If the dispute is not resolved as a result of the meeting
referred to in paragraph 11.3(a), the parties will procure
that a meeting between the relevant senior executive of the
Seller and a director of the Buyer shall be held within 7 days
of a written request from one party to the other.
(c) If the dispute is not resolved as a result of the director's
meeting referred to in clause 12.2(b), either party may
propose to the other at such meeting or subsequently in
writing that negotiations be entered into with the assistance
of a neutral adviser ("the NEUTRAL ADVISER").
(d) Unless the parties, within 5 Business Days of a proposal under
clause 11.3(c), agree on the appointment of the Neutral
Adviser, either party may apply to the Centre for Dispute
Resolution at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("CEDR") to
recommend a non-binding procedure for the resolution of the
dispute and to nominate the Neutral Adviser provided always
that any Neutral Adviser appointed shall be an expert or have
at least 5 years experience in the area of the dispute
referred.
(e) The parties shall within 14 days of the appointment of the
Neutral Adviser meet him in order to agree a programme for the
exchange of' any relevant information and the structure to be
adopted for the negotiating session(s). If considered
appropriate, the parties may seek assistance from CEDR to
provide guidance on a suitable procedure.
(f) All negotiations shall be conducted in confidence and without
prejudice to the rights of the parties in any future
proceedings.
(g) If the parties reach agreement on the resolution of the
dispute, such agreement, including agreement as to the costs
of the parties involved in the negotiations and the reference
to the Neutral Adviser, shall be reduced to writing and, once
it is signed by each party, it shall be binding on the
parties. Failing agreement. either of the parties may invite
the Neutral Adviser to provide a non-binding but informative
opinion in writing. Such opinion shall not be used in evidence
in any proceedings commenced pursuant to the terms of this
Agreement without the consent of both parties. In the event of
failure of agreement resulting from a reference to a Neutral
Adviser the fees of the Neutral Adviser and of CEDR will be
borne equally by the parties to the dispute and each party
will also bear its own costs of the reference.
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(h) If:
(a) the parties do not agree to refer to dispute to a
Neutral Adviser pursuant to clause 12.3(c); or
(b) the parties fail to reach agreement in the
negotiations with the Neutral Adviser.
then any dispute or difference between them shall be subject to
resolution pursuant clause 17.
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13. ANNOUNCEMENTS AND CONFIDENTIALITY
13.1 No announcement relating to the provisions of this Agreement or any
matter ancillary to this Agreement shall be made by or on behalf of the
Seller or the Buyer without the prior written approval (which shall not
be unreasonably withheld or delayed) of the other party save as may be
required by any legal or regulatory authority or securities exchange
(including, without limitation, Copenhagen Stock Exchange, NASDAQ, and
the Securities & Exchange Commission) to which the disclosing party or
any member of its group is subject.
13.2 Nothing in clause 13.1 shall prevent the Buyer from writing to the
customers, suppliers or employees of the Business after Completion, or
if earlier, the date of any public announcement made with the agreement
of the parties, notifying them of the acquisition by the Buyer of the
Business.
13.3 The Seller shall, and shall procure that each member of the Seller's
Group shall, keep confidential and not at any time after the date of
this Agreement disclose or make known in any way to anyone (other than
the Buyer) or use for its own or any other person's benefit any
Business Information or any other information which may have been
disclosed or otherwise known to the Seller or any member of the
Seller's Group or which may otherwise have come to the attention of the
Seller or any member of the Seller's Group (as relevant) and which
relates to the Business or Assets.
13.4 The Buyer shall, and shall procure that each member of the Buyer's
Group shall, keep confidential and not at any time after the date of
this Agreement disclose or make known in any way to anyone or use for
its own or any other person's benefit any confidential information
relating to the Seller or the Seller's Group which may during the
negotiations relating to this Agreement have been disclosed to the
Buyer or any member of the Buyer's Group or which during the
negotiations relating to this Agreement may otherwise have come to the
attention of the Buyer or any member of the Buyer's Group and which
does not relate to the Business or Assets.
13.5 The obligations imposed by the provisions of clauses 13.3 and 13.4
inclusive shall not apply:
(a) to the extent that the information in question is or comes
into the public domain without fault on the part of the
disclosing party or any member of its Group;
(b) to the extent that the information in question save, in the
case of Business Information, was already known to the
disclosing party or any member of its Group at the time the
same was disclosed to it or came to its attention;
(c) to the extent that the information in question (in the case of
Business Information, after Completion) has been lawfully
disclosed to the disclosing party or any member of its Group
by a third party; or
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(d) to the extent that the information in question may be required
by any legal or regulatory authority or securities exchange
(including, without limitation, the Copenhagen Stock Exchange,
NASDAQ and the Securities & Exchange Commission) to which the
disclosing party or any member of its Group is subject.
13.6 The parties acknowledge that remedies at law may be inadequate to
protect against a breach of clauses 13.3 or 13.4 and the parties
therefore agree, in the event of any such breach, not to oppose the
granting of injunctive relief, specific performance or other equitable
relief in favor of the other part), or any member of its Group without
proof of actual damages.
14. COSTS
14.1 The parties shall pay their own costs and expenses in relation to the
preparation, execution and implementation of this Agreement and the
agreements referred to in it.
14.2 All stamp duty payable on the transactions effected by this Agreement
and fees for registration of transfers of the Intellectual Property
Rights are to be borne by the Buyer.
14.3 The obligation to adjust the value added tax accrued
("momsreguleringsforpligtelse") shall be taken over by the Buyer
without any separate consideration being payable herefore provided that
it shall not be greater than $25,000.
15. ASSIGNMENT
15.1 This Agreement shall be binding upon and inure for the benefit of the
successors of the parties but, save as provided in clause 15.2 or with
the written consent of the parties, shall not be assignable.
15.2 Each party's rights under this Agreement or any of the other documents
referred to in this Agreement may be assigned by that party to any
wholly-owned subsidiary of that party or any holding company of that
party or any wholly-owned subsidiary of such holding company provided
that:
(a) if such assignee company ceases to be a wholly-owned
subsidiary or holding company of that party or a wholly-owned
subsidiary of such holding company such rights shall be
promptly assigned to another wholly-owned subsidiary of the
assigning party or holding company of that party or a
wholly-owned subsidiary of such holding company;
(b) the assigning party shall continue to be liable to the other
party pursuant to this Agreement notwithstanding such
assignment.
15.3 Where, subsequent to Completion, the Buyer transfers the Business to
any member of the Buyer's Group (or any such member of the Buyer's
Group transfers the Business to any other member of the Buyer's Group
and so on and so forth) such transferee company shall be entitled (for
so long as it remains a wholly-owned subsidiary or holding company of
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the Buyer or a wholly-owned subsidiary of such holding company) to
claim under the Warranties as if it were the Buyer under this
Agreement.
16. GENERAL
16.1 This Agreement, together with the agreements to be entered into by the
parties pursuant to it, constitutes the entire agreement between the
parties relating to the sale and purchase of the Assets and supersedes
all previous agreements, arrangements and understanding between the
parties in relation to it. Each of the parties acknowledges that in
entering into this Agreement it has not relied on any representation,
warranty or other assurance except those expressly contained in this
Agreement and the documents which the parties will enter into as
referred to in this Agreement. Each party waives all rights and
remedies which, but for this clause, might be available to it in
respect of such representation, warranty or assurance provided that
nothing in this clause shall limit or exclude any liability for
fraudulent misrepresentation.
16.2 No failure or delay by either party to exercise and no delay,
forbearance or indulgence given by it in or before exercising any
remedy or right under or in relation to this Agreement shall operate as
a waiver of that right, power or remedy or preclude its exercise at any
subsequent time or on any subsequent occasion. No single or partial
exercise of any remedy or right shall preclude any further exercise of
the same or the exercise of any other remedy or right. The remedies and
rights provided in this Agreement are cumulative and are not exclusive
of any remedies or rights provided by law or otherwise.
16.3 This Agreement may be executed in two or more counterparts and
execution by each of the parties of any one of such counterparts will
constitute due execution of this Agreement.
16.4 The Seller shall and shall procure that any third party shall (so far
as is within its power so to do) do, execute and perform all such
further deeds, documents, assurances, acts and things as the Buyer may
reasonably require to effectively vest in the Buyer the benefit of this
Agreement.
16.5 The provisions of this Agreement shall remain in full force and effect
after Completion so far as they then remain to be observed and
performed.
16.6 No variation of this Agreement shall be effective unless made in
writing and signed by or on behalf of each of the parties.
16.7 If any provision of this Agreement shall be held to be illegal, void,
invalid or unenforceable under the laws of any jurisdiction, the
legality, validity and enforceability of the remainder of this
Agreement in that jurisdiction shall not be affected, and the legality,
validity and enforceability of the whole of this Agreement in any other
jurisdiction shall not be affected.
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17. APPLICABLE LAW AND JURISDICTION
17.1 This Agreement shall be governed by and construed in accordance with
English law. Each of the parties irrevocably submit to the
non-exclusive jurisdiction of the courts of England and Wales in
respect of any claim, dispute or difference arising out of or in
connection with this Agreement.
17.2 The Seller and Buyer each agree to appoint and maintain the appointment
of an authorized agent to receive on their behalf service of process in
England.
17.3 The Seller hereby appoints Bird & Bird of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇ (▇▇▇: DXK/NXB) as its authorized agent to receive service of
process in England on its behalf and the Buyer hereby appoints Law
Debenture Corporate Services Limited of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ 7LY)(telephone number: ▇▇▇▇ ▇▇▇ ▇▇▇▇, fax ▇▇▇▇ ▇▇▇
5262) as its authorized agent to receive service of process in England
on its behalf.
18. NOTICES
Any notice or other communication required or permitted under this
Agreement shall be in writing and shall be delivered personally, sent
by facsimile transmission (with confirmation or receipt) or sent by
nationally recognized courier service, postage prepaid. Any such notice
shall be deemed given when so delivered personally or, if sent by
facsimile, at the time of receipt of a legible copy thereof or, if sent
by internationally recognized courier service, three days after the
date of deposit with the courier service, postage prepaid, and shall be
sent to the registered office of the party addressed for the attention
of "the Secretary".
THIS AGREEMENT has been signed by or on behalf of the parties on the date
appearing on page 1.
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SIGNED by )
▇▇▇▇▇ NETWORKS NV ) /s/
Acting by: )
SIGNED by )
OLICOM A/S ) /s/
Acting by: )
