1
Exhibit 4.(a)(ii)
DATED 31ST AUGUST 1999
XXXXX NETWORKS N.V.
AND
OLICOM A/S
--------------------------------------------------
AGREEMENT FOR THE SALE AND PURCHASE
OF ASSETS RELATING TO OLICOM'S TOKEN RING BUSINESS
--------------------------------------------------
BIRD & BIRD
00 XXXXXX XXXX
Xxxxxx XX0X 0XX
TEL: 0000-000 0000
FAX: 0000-000 0000
REF: DXK/NXB/XXXXX.5
110
2
CONTENTS
1. DEFINITIONS AND INTERPRETATION.................................. 112
2. SALE OF THE ASSETS.............................................. 121
3. CONSIDERATION................................................... 124
4. THE XXXXX AND OLICOM TOKEN RING REVENUE DISPUTES................ 125
5. COMPLETION...................................................... 126
6. TRANSFERRING EMPLOYEES.......................................... 127
7. APPORTIONMENT................................................... 129
8. WARRANTIES...................................................... 130
9. COVENANTS BY THE SELLER......................................... 132
10. POST-COMPLETION OBLIGATIONS..................................... 133
11. TRANSITION...................................................... 134
12. INTELLECTUAL PROPERTY RIGHTS.................................... 135
13. ANNOUNCEMENTS AND CONFIDENTIALITY............................... 137
14. COSTS........................................................... 138
15. ASSIGNMENT...................................................... 138
16. GENERAL......................................................... 139
17. APPLICABLE LAW AND JURISDICTION................................. 140
18. NOTICES......................................................... 140
111
3
THIS AGREEMENT is made on 31st August 1999
BETWEEN
(1) XXXXX NETWORKS NV a company organised under the laws of the Netherlands
whose registered office is at Transpolis Schipol Airport, Xxxxxxx
Xxxxxx 00, 0000 XX Xxxxxxxx, xxx Xxxxxxxxxxx (the "BUYER"); and
(2) OLICOM A/S, a company incorporated in Denmark, whose principal office
is at Nybrovej 000, XX-0000 Xxxxxx, Xxxxxxx (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 initialled 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;
112
4
"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;
"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.
113
5
"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;
"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, 00 Xxxxxx Xxxx, XX0X 0XX;
"BUYER'S YEAR 2000 STATEMENT" means the statements made on the Buyer's
website under the heading "Xxxxx 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 v10.3;
"COMPLETION" means completion of the sale and purchase of the Assets
pursuant to this Agreement and in accordance with Clause 5;
114
6
"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;
"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
initialled by or on behalf of the parties and listed in the index of
disclosure documents set out in Schedule 14;
"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;
"ENCUMBRANCE" means any right or interest of any third party against
any member of the Seller's Group, including, but not limited to, any
claim, equity, mortgage, charge, pledge, lien, assignment, option,
encumbrance, right of preemption or first refusal or agreement to
create any such right or interest or other security agreement or
arrangement;
"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;
115
7
"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;
"ESCROW AGREEMENT" means the agreement in the Agreed Form to be made
between the Seller, the Buyer and Fortis Bank S.A.-N.V. relating to the
amount referred to in paragraph 2(b) and (c) of Part B of Schedule 2;
"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 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 Xxxx Licence;
(e) Patent Licence;
"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;
116
8
"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;
"XXXXX AND OLICOM TOKEN RING REVENUE" means all revenues recognised by
the Buyer and each member of the Buyer's Group (excluding VAT and any
other sales taxes that might be payable thereon) from the sale after
the Completion Date of its Token Ring Products and Services, including
those Token Ring Products and Services acquired under this Agreement,
calculated in accordance with the accounting principles set out in
Schedule 5;
"XXXXX CLARIFY SYSTEM" means Madge's Oracle system database in which
Xxxxx logs certain details relating to problems reported by Xxxxx
customers relating to products it has supplied;
"XXXXX 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;
"MILESTONE ESCROW ACCOUNT" has the meaning given in the Escrow
Agreement;
"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;
117
9
"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 licences, consents, permits and authorisations
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;
"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;
"ROYALTY ESCROW ACCOUNT" has the meaning given in the Escrow Agreement;
"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 Xxxx-Xxxxx & Trolle of X0xxx Xxxxxxxxxxxx
0, XX-0000 Xxxxxxxxxx X, Xxxxxxx;
"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;
118
10
"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
(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;
119
11
"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,
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 Xxx 0000 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
120
12
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 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 Xxx 0000.
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
121
13
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.
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:
122
14
(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 on
the Buyer in respect of any act, neglect, default or omission
of the Seller unless specifically stated in this Agreement.
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:
123
15
(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
3.1 The consideration payable by the Buyer to the Seller for the purchase
of the Assets shall, subject to the terms of this Agreement, be as
follows:
(a) a payment of $15,000,000 of which
(i) $13,000,000 shall, subject to clause 3.4, be paid to
the Seller in cash on Completion; and
(ii) $2,000,000 shall be paid into the Milestone Escrow
Account in accordance with clause 3.5; and
(b) further payments following Completion which shall be paid at
the end of each Quarter for the first 12 Quarters subsequent
to Completion equal to 2.78% of the Xxxxx and Olicom Token
Ring Revenues for that Quarter provided that (i) the payment
for the first Quarter shall be calculated pro rata according
to the number of days from the Completion Date to the end of
the first Quarter and (ii) the payment for the last Quarter
shall be calculated pro rata according to the number of days
from the beginning of the last Quarter until the third
anniversary of Completion. The Buyer shall deliver to the
Seller within 30 days of the end of each Quarter during this
period (x) a statement showing the calculation of such amount,
(y) a self-billing invoice and (z) payment of the due amount
in cash to such bank account as may be specified by the
Seller. Each payment under this Clause 3.1(b) shall be subject
to a quarterly minimum amount of US $708,333 ("QUARTERLY
MINIMUM AMOUNT"), taking account of any amounts carried
forward pursuant to this Clause 3.1(b), and an aggregate
minimum amount over the 12 Quarters of US $8,500,000. Any
excess over the Quarterly Minimum Amount paid under this
Clause 3.1(b) in respect of any Quarter shall be carried
forward and credited against the Quarterly Minimum Amount for
the subsequent Quarter or Quarters (as appropriate). The Buyer
shall on Completion pay the amount of $8,500,000 is to the
Royalty Escrow Account in respect of its obligations under
this sub-clause (b).
3.2 If the Buyer sells its business relating to Token Ring Products and
Token Ring Services to any person other than a member of the Buyer's
Group ("THE ACQUIRER"), the Buyer will calculate its revenue of Token
Ring Products and Services and as a percentage of the annual revenue of
Token Ring Products and Services of the Acquirer ("BUYER'S PERCENTAGE
REVENUE") as at the date of completion of that sale
124
16
("RELEVANT DATE"). The Xxxxx and Olicom Token Ring Revenues will
thereafter be calculated in each Quarter by multiplying the Buyer's
Percentage Revenue by the annual revenue of the Acquirer derived from
the Acquirer's business as at the completion of the Relevant Date
provided that for the avoidance of doubt, the Quarterly Minimum Amount
and clause 4.1 shall continue to apply to such payments.
3.3 The consideration payable by the Seller to the Buyer for the assumption
of the Assumed Warranty Obligations by the Buyer shall be:
(a) a cash payment of $700,000 to be paid at Completion; and
(b) the delivery to the Seller of the RMA Stock pursuant to
paragraph 1.10 of Schedule 6.
3.4 At Completion the Buyer may deduct from the payment due to the Seller
pursuant to clause 3.1(a) the payment due from the Seller pursuant to
clause 3.3(a).
3.5 On Completion the Buyer shall;
(a) pay the sum of $2,000,000 into the Milestone Escrow Account;
and
(b) pay the sum of $8,500,000, into the Royalty Escrow Account,
in each case to be held in accordance with the terms of the Escrow
Agreement.
3.6 Payments due from the Buyer to the Seller pursuant to clause 3.1(b)
shall be made without any set off except as set out in the Escrow
Agreement.
4. THE XXXXX AND OLICOM TOKEN RING REVENUE DISPUTES
4.1 If there is a dispute as to the calculation or ascertainment of the
Xxxxx and Olicom Token Ring Revenue the objecting party shall notify
the other party of the nature of the objection and the parties shall
negotiate in good faith to come to an agreement as to the calculation
or ascertainment of the Xxxxx and Olicom Token Ring Revenue. If the
parties are unable to resolve the dispute within 28 days of such
notification the dispute shall be referred to determination by an
independent chartered accountant (who shall for the avoidance of doubt,
not be the auditor of the Buyer or Seller or the auditor of any
business competing with the Business) ("the Expert") nominated by
agreement between the Buyer and Seller or, in the absence of such
agreement within 7 days nominated by the President for the time being
of the Institute of Chartered Accountants in England and Wales. The
decision of the Expert (who shall act as experts not as arbitrators)
shall be final and binding in the absence of manifest error. The costs
of the Expert shall be borne by the Buyer if the Xxxxx and Olicom Token
Ring Revenue as determined by the Expert is more than 5% higher or
lower than the Xxxxx and Olicom Token Ring Revenue as calculated by the
Buyer's auditors in
125
17
accordance with the accounting principles set out in Schedule 5 and in
all other cases the costs of the Expert shall be paid by the Seller.
4.2 If the amount of the Xxxxx and Olicom Token Ring Revenue paid to the
Seller pursuant to clauses 3.1(b) or 3.2 is less than amount of the
Xxxxx and Olicom Token Ring Revenue determined pursuant to clauses
3.1(b) or 3.2 by the Expert to be payable to the Seller under this
Agreement, the Buyer shall make the relevant additional payment within
14 Business Days of the Expert determination together with interest on
it calculated on a daily basis at the rate of 2% above Lloyds Bank
PLC's base rate for the time being in force for the period from (and
including) the date on which the Xxxxx and Olicom Token Ring Revenue in
dispute was due up to (but excluding) the date of payment.
4.3 If the amount of the Xxxxx and Olicom Token Ring Revenue paid to the
Seller pursuant to clause 4.1 is more than the amount of the Xxxxx and
Olicom Token Ring Revenue determined pursuant to clause 4.1 by the
Expert to be payable to the Seller under this Agreement, the Seller
shall repay the relevant overpayment of the Xxxxx and Olicom Token Ring
Revenue to the Buyer within 14 Business Days of the Expert's
determination together with interest on it calculated on a daily basis
at the rate of 2% above Lloyds Bank Plc's base rate for the time being
in force for the period from (and including) the date on which the
Xxxxx and Olicom Token Ring Revenue was paid to the Seller pursuant to
clause 4.1 up to (but excluding) the date of repayment.
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.
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
126
18
(b) proceed to Completion, in which case the party in default
shall be obliged to fulfil those of its obligations under
Schedule 2 as it is then able and to fulfil 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
6.1 The parties acknowledge that it is possible that the Employment
Regulations will in certain countries apply to the sale of the Business
by the Seller to the Buyer.
6.2 The Buyer acknowledges that the Seller shall have to consider
terminating the employment of its Non-Transferring Employees.
6.3 The Buyer will offer employment to the Transferring Employees with
effect from Completion. The Seller will use its best endeavours to
ensure that such Transferring Employees are able to, accept and do
accept such offers of employment.
6.4 The Seller undertakes that it shall not (and shall procure that no
member of the Seller's Group shall) on or before 10 September 1999
terminate the employment of any person employed in a sales capacity by
any member of the Seller's Group in the United States in connection
with the Business. The Buyer shall reimburse the Seller for all
payments in respect of such persons (including, without limitation,
salaries, bonuses and pension contributions) attributable to the period
from the Completion Date (but excluding the Completion Date itself) up
to (and including) 10 September 1999.
6.5 The Seller shall indemnify the Buyer against any costs, claims,
liabilities and expenses (including, without limitation, legal and
other professional fees and expenses) incurred by the Buyer which are
attributable to any act or omission by the Seller prior to the
Completion Date in respect of any of the Seller's obligations or duties
(in either case, arising under applicable law relevant to the
jurisdiction governing the employment), to or in relation to any of its
employees or former employees (including but not limited to any
liability arising out of the termination or dismissal of any employee
or former employee).
6.6 The Buyer shall have no liability to the Seller for any employees of
the Seller employed in the Business who are not Transferring Employees
and the Seller shall
127
19
indemnify the Buyer against all losses, costs, awards, liabilities and
expenses incurred by the Buyer in connection with or as a result of any
claim or demand by such employee or former employee against the Buyer
including, for the avoidance of doubt, any claim that any such employee
or former employee's employment has transferred to the Buyer pursuant
to the Employment Regulations or otherwise.
6.7 The Buyer shall indemnify the Seller against any costs, claims,
liabilities and expenses (including, without limitation, legal and
other professional fees and expenses) incurred by the Seller which are
attributable to any act or omission by the Buyer on or after the
Completion Date in respect of any of the Buyer's obligations or duties
(in either case, whether arising under common law, statute, custom or
otherwise) to or in relation to the Transferring Employees including,
without limitation, liability arising out of the termination or
dismissal of any Transferring Employee.
6.8 The Seller shall indemnify the Buyer against any costs, claims,
liabilities and expenses (including, without limitation, legal and
other professional fees and expenses) incurred by the Buyer in
connection with or as a result of any claim (including any entitlement
of any Transferring Employee under or consequent on such claim) by any
trade union or staff association (whether or not recognised by the
Seller in respect of all or any of the Transferring Employees) or other
appropriate representative arising from or connected with any failure
by the Seller to comply with any legal obligation to such trade union,
staff association or other appropriate representative in connection
with the sale of the Business (whether under the Employment Regulations
or otherwise) whether any such claim arises or has its origin before or
after the Completion Date except to the extent that the Seller's
failure is the result of the Buyer's failure to comply with its
obligations under clause 6.9.
6.9 Except as provided in 6.2 and 6.6 the Buyer undertakes to provide the
Seller with such information as the Seller may reasonably request in
writing in order that it may comply with its obligations under the
Employment Regulations to give information to and consult with
employees and/or their representatives (as appropriate) in relation to
the sale of the Business.
6.10 The Buyer shall indemnify and keep indemnified the Seller against all
losses, costs, liabilities, expenses, actions, proceedings, claims, and
demands arising out of or in connection with:
(a) any change in the working conditions of the Transferring
Employees occurring on or after Completion;
(b) the change of employer occurring by virtue of the Employment
Regulations and/or this Agreement being significant and
detrimental to any of the Transferring Employees;
128
20
(c) the employment by the Buyer on or after Completion of the
Transferring Employees other than on terms at least as
favourable as those enjoyed immediately before Completion.
(d) any claim by any Transferring Employee (whether in contract or
in tort, or under statute (including the Treaty establishing
the European Community and any directives made under the
authority of that Treaty) for any remedy including, without
limitation, for breach of contract, unfair dismissal,
redundancy, statutory redundancy, equal pay, sex, race, or
disability discrimination, unlawful deductions from wages or
for breach of statutory duty or of any other nature) as a
result of anything done or omitted to be done by the Buyer
after Completion.
6.11 For the avoidance of doubt, the Buyer accepts that it shall be solely
responsible for any amounts becoming payable to the Transferring
Employees under the relevant legislation as a result of their being
dismissed by the Buyer, at any time after Completion, notwithstanding
that such amount is calculated under that legislation by reference to
periods of employment with the Seller or any member of the Seller's
Group as well as the period of employment with the Buyer.
7. APPORTIONMENT
7.1 All payments in respect of the Transferring Employees (including,
without limitation, salaries, bonuses and pension contributions) shall
be apportioned on a time basis so that such part of the relevant
payments as is attributable to the period ending on and including the
Completion Date shall be borne and discharged by the Seller and such
part of the relevant payments as is attributable to the period
commencing on the day following Completion shall be borne and
discharged by the Buyer.
7.2 All periodical sums receivable in respect of the Assets (including, but
not limited to, licence 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 licence 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 charges or outgoings apportioned
pursuant to clause 7.1 and any failure to discharge them.
129
21
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.
(c) Any statement in the Warranties which is qualified by the
expression "to the best of the knowledge, information, and
belief of the Seller" or "so far as the Seller is aware" or
any similar expression shall mean the knowledge, information,
and belief of the following executives of the Sellers and any
other person of whom they ought reasonably to have made
enquiries: Xxxxx Xxxxxxxxx Furu, Chief Executive Officer; Xxx
Xxxxxx, Executive Vice President Global Sales and Marketing
and Chief Executive Officer, Olicom Inc.; Xxxxx Xxxxxxxxx,
Chief Technical Officer; Xxxx Xxxxxx, Chief Financial Officer;
Per Friis, Vice President of Operations; Jorgen Hog, Vice
President Product Marketing, Xxxxx Xxxxxxxxx Gjellerup, Vice
President Business Operations; Xxxxx Xxxx, Director of Legal
Affairs; and Boje Rinhart, Vice President, Chairman's Office.
(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 otherwise
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
130
22
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
defence 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 agreement save for any such right or
claim based on gross negligence or wilful 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.
131
23
9. COVENANTS BY THE SELLER
9.1 Subject to Clause 9.2, in consideration of the Buyer agreeing to enter
into this Agreement with the Seller, the Seller covenants with the
Buyer that it will not, and will procure that no member of the Seller's
Group will, either on its own account or in conjunction with or on
behalf of any other person or persons, whether directly or indirectly
for the period of three years from the Completion Date:
(a) carry on or be engaged, concerned or interested anywhere in
the World in any business competing with the Business by
designing, manufacturing, or supplying Token Ring Products or
Token Ring Services (other than as a holder of securities
listed or dealt in on a recognised investment exchange
provided that such holding shall not exceed three per cent. of
the class of securities of which that holding forms part) and
provided that, for these purposes, technologies not falling
within the definition of Token Ring Products shall not be
regarded as competing with the Business; or
(b) solicit or endeavour to entice away from the Business any
Transferring Employee save that this clause shall not apply to
any Transferring Employee who takes up employment with the
Seller after responding to a genuine advertisement for a post
with the Seller or apply to any Transferring Employee who is
employed or otherwise engaged in the Business in a
non-managerial or purely administrative role;
(c) conduct any general or targeted marketing campaigns or sales
promotion activities relating to Token Ring Products or the
migration from Token Ring Products to alternative technologies
(including without limitation, ethernet technologies) provided
that marketing campaigns or sales promotions of alternative
technologies shall not in themselves be deemed to relate to
the migration from Token Ring Products to such alternative
technologies so long as the migration from Token Ring Products
is not explicitly or implicitly referred to;
(d) make any public or private communication (whether written or
oral) to or with any person which either generally or by
specific reference to end users of Token Ring Products (to
whom the Seller supplied Token Ring Products on or before the
Completion Date) expressly or by implication denegrates Token
Ring Products, the Buyer or any member of the Buyer's Group or
their Token Ring businesses or encourages the migration from
Token Ring Products to alternative technologies (including
without limitation, ethernet technologies) provided that any
communication relating to alternative technologies would not
in itself constitute encouragement for these purposes;
(e) conduct any active initiative directed at end users of Token
Ring Products for the purposes of discussing Token Ring
Products or the migration from Token Ring Products to
alternative technologies (including without limitation,
132
24
ethernet technologies) or pro-actively encourage or
incentivise the distributors, resellers or other
intermediaries of the Seller or any member of the Seller's
Group to do so provided that initiatives relating to
alternative technologies shall not in themselves be deemed to
relate to the migration from Token Ring Products to such
alternative technologies.
9.2 Without prejudice to clause 9.1, the Seller undertakes that it will
(and will procure that no member of the Seller's Group will):
(a) For a period of three years from the Completion Date not
develop, manufacture, market or supply any Unreleased Products
or allow any other person to do so;
(b) procure that none of the IPR, Business Information, Records or
other information relating to the Unreleased Products is
disposed of or otherwise made available to any other person;
and
(c) (at its own expense) if requested the Buyer, destroy any
Unreleased Products, any components or parts held by the
Seller for the purpose of manufacturing any Unreleased
Products and any Business Information, Records or other
information relating to any Unreleased Products.
The Seller shall be responsible for all the costs associated with
complying with its obligations under this clause.
9.3 Nothing in this clause 9 shall restrict the Seller's rights under
clause 6.5 of the IPR Agreement.
9.4 Nothing in this clause 9 shall prevent the Seller from fulfilling its
contractual obligations pursuant to the Service Contracts listed in
paragraph 4.2 of the Transition Schedule provided that the Seller shall
terminate such Service Contracts as soon as it is possible to do so
without incurring any penalty for early termination.
9.5 If the undertakings in Clause 9.1 shall be found to be void but would
be valid if some part were deleted or the period or area of application
were reduced, then such undertaking shall apply with such modification
as may be necessary to make it valid and effective.
9.6 The Seller agrees that the restrictions and undertakings contained in
Clause 9.1 are reasonable and necessary for the protection of the
Buyer's legitimate interests in the goodwill of the Business.
10. 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.
133
25
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 endeavours 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.
(e) The Seller agrees that Transferring Employees who were on or
before Completion based in any of the offices of the Seller
anywhere in the world may remain and continue to work from
such offices at no cost to the Buyer for a period of six weeks
from the Completion Date.
(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 sub-lease 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 sub-lease relating to that
office with any other person [on no more favourable terms to
the sub-tenant].
134
26
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 licence 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.
12.2 DISPUTES
135
27
(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 000 Xxxxxx Xxxx, Xxxxxx XX0X 0XX ("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
136
28
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.
(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.
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.
137
29
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
(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 favour of the other party 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.
138
30
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
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.
139
31
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.
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 authorised agent to receive on their behalf service of process in
England.
17.3 The Seller hereby appoints Bird & Bird of 00 Xxxxxx Xxxx, Xxxxxx, XX0X
0XX (Xxx: DXK/NXB) as its authorised agent to receive service of
process in England on its behalf and the Buyer hereby appoints Law
Debenture Corporate Services Limited of Xxxxxxx Xxxxx, 00 Xxxxxxx
Xxxxxx, Xxxxxx, XX0X 7LY)(telephone number: 0000 000 0000, fax 0000 000
5262) as its authorised 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 recognised 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 recognised 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".
140
32
THIS AGREEMENT has been signed by or on behalf of the parties on the date
appearing on page 1.
141
33
Signed by )
)
XXXXX NETWORKS N.V. ) /s/ Xxxxxxx X. Xxxxxx
)
Acting by: ) Xxxxxxx X. Xxxxxx
Signed by )
)
OLICOM A/S ) /s/ Xxxxx-Xxxxxxxxx Xxxx
)
Acting by: ) Xxxxx-Xxxxxxxxx Xxxx
142
34
SCHEDULE 1
PART A - ASSETS
PART B - TRANSFERRING EMPLOYEES
PART C - CONTRACTS
SCHEDULE 2
COMPLETION OBLIGATIONS
PART A - OBLIGATIONS OF THE SELLER
PART B - OBLIGATIONS OF THE BUYER
SCHEDULE 3
WARRANTIES
SCHEDULE 4
PART A - LIMITATION OF SELLER'S LIABILITY IN RESPECT OF CLAIMS
PART B - LIMITATION OF SELLER'S LIABILITY IN RESPECT OF INDEMNITIES
SCHEDULE 5
143
35
XXXXX AND OLICOM TOKEN RING REVENUE ACCOUNTING PRINCIPLES
SCHEDULE 6
POST COMPLETION OBLIGATIONS OF THE SELLER
SCHEDULE 7
POST COMPLETION OBLIGATIONS OF THE BUYER
SCHEDULE 8
PART A - TRANSFERRED PRODUCTS
PART B - DISCONTINUED PRODUCTS
PART C - RMA STOCK
SCHEDULE 9
TRANSITIONAL SERVICES
SCHEDULE 10
TECHNICAL SUPPORT
SCHEDULE 11
144
36
BUYER'S YEAR 2000 STATEMENT
SCHEDULE 12
AGREED FORM DOCUMENTS
SCHEDULE 13
INDEX OF DISCLOSURE DOCUMENTS
SCHEDULES AVAILABLE ON REQUEST
145
