Exhibit 10.45
Agreement for Purchase and Sale of Assets dated June 14, 1999
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
Among
Network Peripherals Asia, Inc.,
Network Peripherals Inc.
and
Adhoc Technologies, Inc.
Altima Communications Asia, Inc.
Date of Agreement: [June 14, 1999]
TABLE OF CONTENTS
Page
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1. Definitions......................................................... 1
1.1 "Adhoc Indemnitees"........................................ 1
1.2 "Affiliate"................................................ 1
1.3 "ASIC"..................................................... 1
1.4 "Assets"................................................... 2
1.5 "Closing".................................................. 2
1.6 "Closing Date"............................................. 2
1.7 "Copyrights"............................................... 2
1.8 "Damages".................................................. 2
1.9 "FDDI Products"............................................ 2
1.10 "Fixed Assets"............................................. 2
1.11 "Indemnification Period"................................... 2
1.12 "Industrial Designs"....................................... 2
1.13 "Legal Proceeding"......................................... 2
1.14 "NPI Indemnitees".......................................... 2
1.15 "NuWave Products".......................................... 3
1.16 "Patent Rights"............................................ 3
1.17 "Person"................................................... 3
1.18 "Proprietary Rights"....................................... 3
1.19 "Representatives........................................... 3
1.20 "System Development"....................................... 3
1.21 "System Products".......................................... 3
1.22 "Trademarks"............................................... 3
1.23 "Trade Secrets"............................................ 3
2. Purchase of Assets; Consideration................................... 3
2.1 Consideration from NPI Asia to Adhoc....................... 3
2.2 Consideration from Adhoc to NPI............................ 4
2.3 Allocation................................................. 4
2.4 Sales and Other Taxes...................................... 4
2.5 Third-Party Consents....................................... 4
3. Representations and Warranties of NPI................................ 5
3.1 Authority; Consents and Approvals.......................... 5
3.2 Organization and Good Standing............................. 5
3.3 No Breach or Violation..................................... 5
3.4 Proprietary Rights......................................... 6
3.5 Title to Fixed Assets...................................... 6
3.6 Litigation................................................. 6
3.7 Compliance with Laws....................................... 6
3.8 Taxes...................................................... 7
TABLE OF CONTENTS
Page
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3.9 No Brokers................................................. 7
4. Representations and Warranties of Adhoc............................. 7
4.1 Authority; Consents and Approvals.......................... 7
4.2 Organization and Good Standing............................. 7
4.3 No Breach or Violation..................................... 7
4.4 Litigation................................................. 8
4.5 Broker's and Finders' Fees................................. 8
5. Covenants........................................................... 8
5.1 Publicity.................................................. 8
5.2 Confidentiality............................................ 8
5.3 Bulk Sales Laws............................................ 8
5.4 Further Assurances......................................... 8
5.5 Rights Reserved to NPI..................................... 9
5.6 Limitation on Adhoc's Use of Assets........................ 9
5.7 Licenses to NPI US......................................... 9
5.8 Third Party Licenses....................................... 10
5.9 NRE Payments............................................... 10
5.10 Employment Matters......................................... 10
6. The Closing......................................................... 11
6.1 Time and Place............................................. 11
6.2 NPI Actions at the Closing................................. 11
6.3 Adhoc Actions at the Closing............................... 11
6.4 Passage of Title........................................... 11
7. Indemnification
7.1 Survival of Representations................................ 11
7.2 Indemnification by NPI..................................... 11
7.3 Indemnification by Adhoc................................... 12
7.4 Defense of Third Party Claims.............................. 12
8. General Provisions.................................................. 13
8.1 Assignment................................................. 13
8.2 Expenses................................................... 13
8.3 Notices and Representatives................................ 13
8.4 Entire Agreement and Modification.......................... 14
8.5 Construction of Agreement.................................. 15
8.6 Relationship of the Parties................................ 15
8.7 Waiver..................................................... 15
8.8 Venue for Dispute Resolution............................... 15
TABLE OF CONTENTS
Page
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8.9 Governing Law.............................................. 15
8.10 Severability............................................... 15
8.11 Parties in Interest........................................ 15
8.12 Further Instruments........................................ 16
8.13 Absence of Third Party Beneficiary Rights.................. 16
8.14 Counterparts............................................... 16
LIST OF EXHIBITS
Exhibit A Assets
Exhibit B NPI's Disclosure Schedule
Exhibit C Adhoc's Disclosure Schedule
Exhibit D Xxxx of Sale
Exhibit E Purchase Price Allocation
Exhibit F NPI Asia Employees
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
THIS AGREEMENT FOR PURCHASE AND SALE OF ASSETS (the "Agreement"), dated
as of June 14 , 1999] (the "Effective Date"), is entered into by and among
Network Peripherals Inc. ("NPI US"), a Delaware corporation with a principal
place of business at 0000 XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx 00000, Network
Peripherals Asia, Inc. (NPI Asia"), a corporation organized under the laws of
Taiwan with a principal place of business at 00, XxXxxxx 0xx Xxxx, Xx-Xx
Xxxxxxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx 241ROC (NPI Asia and NPI US are sellers
of the assets described herein and are collectively referred to as "NPI"), and
Altima Communications Asia, Inc., a corporation to be organized under the laws
of Taiwan with a principal place of business located in HsinChu, Taiwan, and is
the purchaser of the assets described herein, and Adhoc Technologies, Inc., a
California corporation with a principal place of business at 0000 Xxxxxxx Xxxxx,
Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000, as the guarantor with respect to all
payments for and on behalf of Altima Conununications Asia, Inc. (Altima
Communications Asia, Inc. and Adhoc Technologies, Inc. are collectively referred
to as "Adhoc").
RECITALS
A. NPI Asia is a wholly-owned subsidiary of NPI US, a company in the
business of developing and supplying network technologies and products.
B. The Board of Directors of each of the parties hereto believes it is
in the best interests of such party and its respective stockholders that Adhoc
purchase certain of the assets of NPI Asia, and assume certain of the
liabilities, of NPI.
C. Adhoc wishes to purchase from NPI Asia, and NPI Asia wishes to sell
to Adhoc, ownership and commercial exploitation rights in certain tangible and
intangible assets as set forth in Exhibit A ("Assets").
AGREEMENT
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
have the meanings set forth in this Section 1 ("Definitions").
1.1 "Adhoc Indemnitees" means the following Persons: (a)
Adhoc; (b) Adhoc's current and future wholly-owned subsidiaries and Affiliates;
(c) Adhoc's Representatives; and (d) the successors and assigns of such Persons.
1.2 "Affiliate" of a party means any Person, domestic or
foreign, including but not limited to, parents and subsidiaries, which directly
or indirectly possess the power to direct or
cause the direction of the management and operating policies of any of the
foregoing entities through ownership of a majority (more than fifty percent
(50%)) of the voting and/or equity securities of such entity.
1.3 "ASIC" means an integrated circuit in the form of a single
chip or chipset.
1.4 "Assets" mean the tangible and intangible assets listed
and described on Exhibit A ("Assets").
1.5 "Change in Control" means the acquisition, directly or
indirectly, by any person or entity of the voting securities representing more
than fifty percent (50%) of the voting power of such corporation.
1.6 "Closing" means the closing of the sale and transfer of
the Assets from NPI to Adhoc.
1.7 "Closing Date" means July 1, 1999, or such other date as
Adhoc and NPI may agree in writing.
1.8 "Copyrights" mean all worldwide rights and interests in
and to all copyrights, including rights to reproduce, and all registrations,
applications for registrations therefor, together with all ancillary rights
thereto, including the right to xxx for damages by reason of past infringement
of any such rights.
1.9 "Damages" shall include any loss, diminution in value,
damage, injury, liability, claim, demand, settlement, judgment, award, fine,
penalty, tax, fee (including reasonable attorneys' fees), charge, costs
(including reasonable costs of investigation) or reasonable expenses of any
nature.
1.10 "FDDI Products" means NPI's adapter cards, concentrators,
hubs and switches based on Fiber Distributed Data Interphase technology, a set
of ANSI protocols used to send digital data over fiber optic cables.
1.11 "Fixed Assets" refers to the tangible assets identified
on Exhibit A ("Assets").
1.12 "Indemnification Period" means the period commencing on
the Closing Date and ending at midnight, Pacific Standard Time, on the end of
the eighteenth month from the Closing Date.
1.13 "Industrial Designs" mean worldwide rights and interests
in and to all industrial designs, and all registrations, applications for
registration thereof and licenses therefor, together with all ancillary rights
thereto, including the right to xxx for damages by reason of past infringement
of any such rights.
1.14 "Legal Proceeding" means any action, suit, litigation,
arbitration proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before, or otherwise
involving any court or other governmental body or any arbitrator or arbitration
panel.
1.15 "NPI Indemnitees" means the following Persons: (a) NPI,
each of them; (b) NPI's current wholly-owned subsidiaries and Affiliates; (c)
NPI's Representatives; and (d) the successors and assigns of such Persons.
1.16 "NuWave Products" means NPI's Layer 3 switching products
utilizing the following eight ASICs and derivative works thereof: SFAA, SFCA,
MSIA, XXXXX, EFEA, GFEA, XXXX and MSFA.
1.17 "Patent Rights" mean worldwide rights and interests in
and to all issued or pending United States and foreign patents, and all
registrations, applications for registration (including all reissues, divisions,
continuations, continuations-in-part, renewals and extensions thereof) and
licenses therefor, together with all ancillary rights thereto, including the
right to xxx for damages by reason of past infringement of any such right.
1.18 "Person" shall mean any individual, partnership, entity
or governmental body.
1.19 "Proprietary Rights" mean those Copyrights, Trade
Secrets, Patent Rights, Industrial Designs, Trademarks and other intellectual
property rights (if any) owned by NPI and existing on the date hereof or arising
or acquired on or prior to the Closing Date and to be transferred to Adhoc
pursuant to this Agreement, as specifically set forth on Exhibit A ("Assets")
hereto.
1.20 "Representatives" means officers, directors, employees
and agents.
1.21 "System Development" refers to research, development or
engineering efforts related to System Products.
1.22 "System Products" refers to networking, computer and
technology products, including but not limited to individual and multiple
boards, whether or not provided within a chassis, but excluding standalone
ASICS.
1.23 "Trademarks" means all worldwide right and interest in
and to trademarks, common law trademarks, trade names, service marks, common law
service marks and service names, together with all registrations, applications
for registration and licenses therefor, and together with all ancillary rights
thereto, including the right to xxx for damages by reason of past infringement
of any such rights, and together with the goodwill of the business related to
the Assets.
1.24 "Trade Secrets" means all non-public information, trade
secret rights and know-how, together with all ancillary rights thereto,
including the right to xxx for damages by reason of misappropriation of any such
rights.
2. Purchase of Assets; Consideration.
2.1 Consideration from NPI Asia to Adhoc. Subject to the terms
and conditions set forth in this Agreement, on the Closing Date, NPI Asia shall
sell, convey, assign, transfer and deliver to Adhoc, and Adhoc shall acquire and
accept, all right, title and interest in and to the Assets.
2.2 Consideration from Adhoc to NPI.
(a) Subject to the terms and conditions set forth in
this Agreement, and in consideration for NPI Asia's transfer of the Assets to
Adhoc, Adhoc will pay One Million Six Hundred Twenty Thousand Dollars
(US$1,620,000) (the "Purchase Price"). Adhoc shall pay the Purchase Price to NPI
Asia by wire transfer to the following account:
California Bank and Trust
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX
ABA No. 000000000
Account number 000-000000-00
Adhoc shall pay the cash consideration described in this Section to NPI US, for
itself and as agent for NPI Asia. NPI shall be entitled to enforce the foregoing
obligation directly against Adhoc Technologies, Inc. and/or Altima
Communications Asia, Inc. through any available means, legal or equitable.
(b) The Purchase Price shall be paid in accordance
with the following schedule:
(i) Four Hundred Thousand Dollars ($400,000)
- Adhoc pays NPI this non-refundable amount on the signing of this Agreement
scheduled for June 14, 1999.
(ii) Five Hundred Thousand Dollars
($500,000) - Adhoc pays NPI three hundred thousand dollars ($300,000) and Xxxxxx
Xxx pays on behalf of Adhoc to NPI two hundred thousand dollars ($200,000) for a
combined total of five hundred thousand dollars ($500,000) on the Closing Date
(July 1, 1999).
(iii) Seven Hundred and Twenty Thousand
Dollars ($720,000) - Adhoc pays this amount the earlier of (1) July 1, 2000 or
(2) five (5) days after Adhoc undergoes a Change in Control. On the closing
date, Adhoc is to provide NPI a letter of credit from a reputable financial
institution acceptable to NPI for securing this amount.
2.3 Allocation. Each of the parties agrees to report this
transaction for foreign and domestic state and federal tax purposes. Adhoc and
NPI agree to use such allocation in filing any applicable report, form or filing
made with applicable taxing authorities. If any taxing authority makes or
proposes an allocation different from that set forth in Exhibit E ("Purchase
Price Allocation"), Adhoc and NPI shall cooperate with each other in good faith
to contest such taxing authority's allocation (or proposed allocation);
provided, however, that, after consultation with all parties adversely affected
by such allocation (or proposed allocation), any other party hereto may file
such protective claims or returns as may reasonably be required to protect its
interests.
Each party requesting cooperation shall reimburse the cooperating party for its
reasonable out-of-pocket expenses (including reasonable legal fees and expenses)
incurred in rendering such cooperation.
2.4 Sales and Other Taxes. Adhoc agrees to pay and discharge
when due, any and all sales, use, transfer, excise, value-added and other like
taxes imposed or levied by any government or governmental agency in the United
States or other foreign Jurisdiction by reason of the sale and transfer of the
Assets under this Agreement, other than any capital gains taxes arising out of
the sale of Assets (collectively, the "Transfer Taxes"). The parties shall
cooperate with each other to the extent reasonably requested and legally
permitted to minimize the Transfer Taxes.
2.5 Third-Party Consents. To the extent that any Proprietary
Right is not assignable without the consent of another party, this Agreement
shall not constitute an assignment or an attempted assignment thereof if such
assignment or attempted assignment would constitute a breach thereof. NPI and
Adhoc shall use its commercially reasonable efforts to obtain the consent of
such other party to the assignment of any such Proprietary Right to Adhoc in all
cases in which such consent is or may be required for such assignment. If any
such consent shall not be obtained, NPI shall cooperate with Adhoc in any
reasonable arrangement designed to provide for Adhoc the benefits intended to be
assigned to Adhoc under the relevant Proprietary Right, including enforcement at
the cost and for the account of Adhoc of any rights of NPI against the other
party thereto arising out of the breach or cancellation thereof by such other
party or otherwise. If and to the extent that such arrangement cannot be made,
Adhoc shall have no obligation with respect to any such Proprietary Right.
3. Representations and Warranties of NPI. Except as disclosed in NPI's
Disclosure Schedule attached as Exhibit B ("NPI's Disclosure Schedule"), NPI US
and NPI Asia, jointly and severally, hereby represent and warrant to Adhoc that
as of the Effective Date:
3.1 Authority; Consents and Approvals. NPI has all necessary
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by NPI and
constitutes the legal, valid and binding obligation of NPI enforceable against
NPI in accordance with its and their terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting
the rights of creditors generally and available equitable remedies, and except
as the enforcement of the indemnification provisions may in any way be limited
by applicable securities laws or held to be against public policy. No consent,
approval or authorization of or designation, declaration or filing with any
third party or governmental authority on the part of NPI is required in
connection with the valid execution, delivery and performance of this Agreement
by NPI, and the consummation by NPI of the transactions contemplated hereby,
except for the consents referenced in Sections 3.7 of NPI's Disclosure Schedule.
3.2 Organization and Good Standing. NPI US and NPI Asia are
each corporations duly organized, validly existing and in good standing under
the laws of Delaware and Taiwan, respectively, and each has the requisite
corporate power to own and operate its properties and assets, and to carry on
its business as presently conducted. NPI is qualified to do business in every
jurisdiction for which qualification is required unless the absence of
qualification would not have an adverse effect on NPI's business as it relates
to the Assets. Nothing contained in any of the foregoing prevents the
consummation of the transactions contemplated by this Agreement.
3.3 No Breach or Violation. The execution, delivery and
performance of this Agreement by NPI, and the consummation by NPI of the
transactions contemplated hereby or thereby, will not result in or constitute
any of the following: (i) a material default, breach or violation or an event
that, with notice or lapse of time or both, would be a material default, breach
or violation of the charter documents of NPI or any material agreement,
instrument or arrangement which would prevent the consummation of the
transactions contemplated hereby or thereby or by which the Assets are bound;
(ii) the creation of any mortgage, pledge, lien, encumbrance or charge upon any
of the Assets; (iii) the acceleration of NPI's performance pursuant to any
indenture, contract, agreement or instrument related to the Assets; and (iv) the
violation of any applicable law, ordinance, rule, regulation, judgment, order or
decree of any court or other governmental body, department, instrumentality,
agency or subdivision having, asserting or claiming jurisdiction (which
violation would have a material adverse effect on the business of NPI relating
to the Assets).
3.4 Proprietary Rights.
(a) No Infringement. NPI Asia owns all right, title
and interest in and to, or has valid and sufficient licenses in, all Proprietary
Rights as used in NPI Asia's business activities conducted prior to the Closing,
free and clear of all liens, claims and encumbrances. The consummation of the
transactions contemplated hereby will not alter or impair any of the Proprietary
Rights. To NPI's best knowledge, following the Closing, the use, reproduction,
distribution and commercial exploitation of the Proprietary Rights by Adhoc as
such activities have been conducted by NPI Asia prior to the Closing will not
violate or constitute a misappropriation of the proprietary rights of any third
party enforceable in the United States or Taiwan.
(b) No Third Party Claims. NPI has not received any
notice of claims which have been, or will be, asserted against NPI or to NPI's
knowledge, any licensee of NPI,
and to NPI's knowledge, no claims are pending against NPI or any licensee of
NPI, by any person regarding NPI's or such licensee's right to use of any of the
Proprietary Rights.
(c) Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, ALL ASSETS ARE BEING TRANSFERRED TO ADHOC ON AN AS-IS, WHEREAS BASIS,
WITHOUT ANY WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE.
3.5 Title to Fixed Assets. NPI has good and marketable title
to all of the Fixed Assets included in the Assets, all of such Assets are free
and clear of restrictions on or conditions to transfer or assignment and, at the
Closing, NPI will sell, convey, assign, transfer and deliver to Adhoc good and
marketable title and all of NPI's worldwide right, title and interest in and to
all of such tangible assets, free and clear of any mortgages, liens, pledges,
encumbrances, claims, conditions and restrictions, of any nature whatsoever,
direct or indirect, whether accrued, absolute, contingent or otherwise, except
for (a) such of the foregoing as arise out of taxes or general or special
assessments not in default and payable without penalty or interest or the
validity of which is being contested in good faith by appropriate proceedings
and (b) such imperfections of title and encumbrances, if any, which are not
substantial in character, amount or extent, and which do not materially detract
from the value, or interfere with the present use, of the tangible assets
subject thereto or affected thereby.
3.6 Litigation. NPI has not received any notice of a claim,
action, proceeding or investigation pending or threatened (a) against or by NPI
involving the Assets or (b) which questions or challenges the validity of this
Agreement or any action taken by NPI pursuant to this Agreement or in connection
with the transactions contemplated hereby or thereby. NPI does not know of any
valid basis for any such claim, action, proceeding or investigation. NPI is not
subject to any judgment, order or decree entered in any lawsuit or proceeding
which has had or may have a material adverse effect on NPI's business relating
to the Assets.
3.7 Compliance with Laws. NPI Asia is not in violation of any
applicable foreign, US federal, state or local statute, law, rule or regulations
with respect to the Assets, except for such violations as would not have a
material adverse effect on the value, economic, commercial or otherwise, of the
Assets. NPI Asia has obtained all governmental licenses, orders, approvals, and
authorizations required in connection with the conduct of its business as it
relates to the Assets, except for such of the foregoing which, if not obtained,
would not have a material adverse effect on the value, economic, commercial or
otherwise, of the Assets.
3.8 Taxes. There are no liens or similar encumbrances relating
to or attributable to federal, state, provincial, local and other returns and
reports relating to any and all taxes or any other governmental charges,
obligations or fees for taxes and any related interest or penalties ("Tax" or
"Taxes") on the Assets, other than liens for Taxes not yet due. After giving
effect to the consummation of the transactions contemplated hereby, the Assets
will not be subject to, nor will Adhoc have, any liability in respect of any
Taxes arising from or relating to,
the ownership, possession, operation or use of the Assets by NPI Asia, or the
operation of the business of NPI related to the Assets, prior to the Closing.
3.9 No Brokers. Except for payments to Xxxxxx Xxxxx-Xxxxx Szu,
NPI is not obligated for the payment of fees or expenses of any broker or finder
in connection with the origin, negotiation or execution of this Agreement or in
connection with the transfer of the Assets.
4. Representations and Warranties of Adhoc. Except as disclosed in
Adhoc's Disclosure Schedule attached as Exhibit C ("Adhoc's Disclosure
Schedule"), Adhoc hereby represents and warrants to NPI that as of the Effective
Date and as of the Closing Date:
4.1 Authority; Consents and Approvals. Adhoc has all necessary
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by Adhoc and
constitutes the legal, valid and binding obligation of Adhoc enforceable against
Adhoc in accordance with its and their terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and available equitable
remedies, and except as the enforcement of the indemnification provisions may in
any way be limited by applicable securities laws or held to be against public
policy. No consent, approval or authorization of or designation, declaration or
filing with any third party or governmental authority on the part of Adhoc is
required in connection with the valid execution, delivery and performance of
this Agreement by Adhoc, and the consummation by Adhoc of the transactions
contemplated hereby.
4.2 Organization and Good Standing. Adhoc is a corporation
duly organized, validly existing and in good standing under the laws of
California, and has the requisite corporate power to own and operate its
properties and assets, and to carry on its business as presently conducted.
4.3 No Breach or Violation. The execution, delivery and
performance of this Agreement by Adhoc, and the consummation by Adhoc of the
transactions contemplated hereby, will not result in or constitute any of the
following: (i) a default, breach or violation or an event that, with notice or
lapse of time or both, would be a default, breach or violation of the charter
documents of Adhoc or any material agreement, instrument or arrangement to which
Adhoc is a party or by which Adhoc is bound or (ii) the violation of any
applicable law, ordinance, rule, regulation, judgment, order or decree of any
court or other governmental body, department, instrumentality, agency or
subdivision having, asserting or claiming jurisdiction.
4.4 Litigation. Adhoc has not received any notice of a claim,
action, proceeding or investigation pending or threatened (a) against or by
Adhoc which, if not resolved in favor of Adhoc, would have a material adverse
effect on the business, assets, financial condition or operating results of
Adhoc or (b) which questions or challenges the validity of this Agreement or any
action taken by Adhoc pursuant to this Agreement or in connection with the
transactions contemplated hereby. Adhoc does not know of any valid basis for any
such claim,
action, proceeding or investigation. Adhoc is not subject to any judgment, order
or decree entered into any lawsuit or proceeding which has had or may have a
material adverse effect on Adhoc's business.
4.5 Broker's and Finders' Fees. Adhoc has not incurred, and
will not incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
5. Covenants. Adhoc and NPI each agree (except as expressly
contemplated by this Agreement or to the extent that both parties shall
otherwise consent in writing) that:
5.1 Publicity. The initial public announcement concerning the
transactions contemplated by this Agreement shall be made jointly with the prior
approval of both Adhoc and NPI, which approval shall not be unreasonably
withheld or delayed.
5.2 Confidentiality. Adhoc and NPI previously entered into a
Non-Disclosure Agreement dated March 29, 1999 (the "NDA"). The NDA is hereby
incorporated by reference into and made a part of this Agreement, and will
remain in full force and effect following execution of this Agreement. Except as
otherwise expressly provided in this Agreement, from and after the Closing all
Trade Secrets that are included in the Assets will be deemed to be Confidential
Information (as defined in the NDA) of Adhoc, and NPI will be deemed to be the
receiving party with respect to such Confidential Information.
5.3 Bulk Sales Laws. NPI Asia and Adhoc hereby mutually agree
to waive compliance with any applicable bulk transfer laws of any applicable
jurisdiction in connection with the sale of Assets to Adhoc. NPI agrees to
indemnify, defend and hold Adhoc Indemnitees harmless from any claims arising
out of an actual or alleged failure to comply with any applicable bulk transfer
laws.
5.4 Further Assurances. From time to time after the Closing
Date, at Adhoc's request and expense but without further consideration, NPI Asia
will execute and deliver such further instruments of conveyance and transfer and
will take such other action as Adhoc may reasonably require in order more
effectively to vest in Adhoc and to put Adhoc in possession and control of the
Assets and its respective rights in the Assets.
5.5 Rights Reserved to NPI. Adhoc acknowledges and agrees that
no rights in or to the NuWave Products or the FDDI Products, including but not
limited to the Copyrights, Trade Secrets which are used in the development of or
are embodied in the NuWave Products or the FDDI Products, Patent Rights,
Industrial Designs, Trademarks and other intellectual property rights thereto
(if any), are transferred or assigned to Adhoc under this Agreement
(collectively, the "Reserved Rights") and NPI is the sole and exclusive owner
thereof. Adhoc agrees that if at any time after the Closing it discovers or
otherwise becomes aware of any Reserved Rights coming into the possession of
Adhoc through the sale of Assets pursuant to this Agreement or otherwise being
or becoming embodied in the Assets, Adhoc shall immediately notify NPI of all
pertinent details thereof NPI may then, in its sole and absolute discretion,
direct Adhoc to either
return to NPI or destroy such embodiments. At NPI's request, an executive
officer of Adhoc shall certify in writing that such return or destruction has
taken place on a timely basis. Notwithstanding the foregoing, Adhoc agrees that
it shall not at any time make any use of any Reserved Rights without NPI's prior
written consent, which consent may be withheld or granted in NPI's sole
discretion.
5.6 Limitation on Adhoc's Use of Assets. Adhoc agrees that for
the first eighteen (18) months after the Closing, it may not use any of the
Assets for System Development to compete directly with NPI without NPI's prior
written consent, which consent may be withheld or granted in NPI's sole
discretion.
5.7 Licenses to NPI US.
(a) Effective Upon the Closing Date, Adhoc grants to
NPI a worldwide, nonexclusive, non-transferable, royalty-free, fully paid-up,
perpetual, irrevocable, nonsublicenseable (except to foundries for manufacturing
on behalf and for the benefit of NPI) license to reproduce, prepare derivative
works based upon, distribute, make and have made, use, offer to sell, sell,
import and otherwise commercially exploit the Proprietary Rights for any
purposes related to System Development of NPI System Products; provided,
however, that the foregoing license shall not pen-nit the development,
distribution, manufacture, sale, importation, or other commercial exploitation
of any stand-alone ASICS. The foregoing notwithstanding, NPI shall have the
right to sublicense any software in which the Proprietary Rights are embodied
solely as necessary to operate NPI System Products for the benefit of NPI's end
user customers, directly or indirectly.
(b) NPI shall own all right, title and interest in
and to all versions, releases, improvements, extensions, translations,
derivative works and embodiments of Proprietary Rights as embodied in the Assets
transferred to Adhoc (collectively, the "Derivative Works") created by or on
behalf of NPI pursuant to the foregoing licenses and are subject to Adhoc's
ownership rights in the Proprietary Rights.
(c) NPI will immediately notify Adhoc of any actual
or alleged infringement or misappropriation of a Proprietary Right by any third
party. In the event Adhoc fails to promptly take action to prosecute such
infringement or misappropriation, NPI may elect to do so. If NPI prevails in
such action against an infringing or misappropriating third-party, NPI shall be
reimbursed its legal cost and expenses related to prosecuting such action out of
any damages which are awarded in such action and any remaining damages recovered
shall be shared equally between NPI and Adhoc. In the event NPI prevails but the
damages are insufficient to reimburse NPI its legal cost and expenses, NPI and
Adhoc shall share the cost and expense of such action equally provided that
Adhoc has agreed to such the prosecution of such action by NPI prior to its
commencement. If NPI does not prevail in such action, NPI shall have sole
responsibility for its legal costs and expenses.
(d) NEITHER PARTY SHALL HAVE ANY LIABILITY FOR
INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR DIRECT DAMAGES
ARISING OUT OF OR RELATED TO THE LICENSES UNDER THIS SECTION 5.7, WHETHER BASED
IN CONTRACT, TORT, STRICT LIABILITY OR ANY OTHER LEGAL THEORY, EVEN EF THE OTHER
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
5.8 Employment Matters.
(a) NPI agrees to pay all severance, accrued bonus
payments and accrued vacation to each individual employed by NPI Asia
immediately prior to the Closing ("NPI Asia Employee") to the extent that such
payments are in relation to an individual's employment with NPI Asia (as listed
in Exhibit F ("NPI Asia Employees")) prior to the Closing Date.
(b) For two years from the Closing Date neither NPI
nor any of its present or future Affiliates, nor any successor of NPI or
purchaser of all or substantially all of NPI's assets (other than Adhoc) shall
solicit the employment of any NPI Asia Employee, whether as employees,
consultants or otherwise, without Adhoc's consent.
5.9 Most Favorite Nation Status.
For a period of eighteen month from the date of the first purchase order from
NPI for Adhoc products, NPI shall enjoy Most Favorite Nation status (as defined
below) from Adhoc Technologies, Inc. Most Favorite Nation status shall mean NPI
shall enjoy the best price Adhoc is providing to any other customers in the
purchase of each respective Adhoc product. NPI agrees that NPI shall only
purchase Adhoc products in quantities sufficient for use in the production of
NPI products and that NPI shall not resell any Adhoc products purchased from
Adhoc as stand-alone products. NPI understands and agrees that NPI shall keep
the content of this Section in strict confidence and that this Most Favorite
Nation status will be revoked if this confidence is breached by NPI.
6. The Closing.
6.1 Time and Place. The Closing shall take place at the
offices of Xxxx Xxxx Xxxx & Freidenrich LLP 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000, at 10:00 a.m., Pacific Standard Time, on the Closing Date, or
at such other place or time as Adhoc and NPI may agree.
6.2 NPI Actions at the Closing. At the Closing, NPI will
deliver or cause to be delivered to Adhoc the following:
(a) an original Xxxx of Sale in substantially the
form of Exhibit D ("Xxxx of Sale") executed by an authorized officer of NPI;
(b) such additional duly executed documents and
instruments of conveyance, assignment or transfer of title as may be necessary
to transfer and assign to Adhoc
all right, title and interest in the Assets, including assignments of any and
all Proprietary Rights, to Adhoc;
(c) a certificate of the Secretary of NPI US stating
that this transaction as stated herein has been validly approved by NPI US'
board of directors; and
(d) an original certificate of the Secretary of NPI
Asia stating that this transaction as stated herein has been validly approved by
NPI Asia's board of directors.
6.3 Adhoc Actions at the Closing. At the Closing, Adhoc will
deliver to NPI the Purchase Price by wire transfer against delivery of the items
specified in Section 6.2 ("NPI Actions at the Closing").
6.4 Passage of Title. Legal and equitable title and risk of
loss with respect to all of the Assets shall pass to Adhoc on transfer of the
Assets at the Closing.
7. Indemnification.
7.1 Survival of Representations. The representations and
warranties made by NPI set forth in Section 3 ("Representations and Warranties
of NPI") hereof shall survive the Closing and shall remain in full force and
effect and shall survive until the end of the Indemnification Period and shall
survive thereafter only with respect to any claims made prior to the end of the
Indemnification Period.
7.2 Indemnification by NPI. During the Indemnification Period,
NPI shall hold harmless, indemnify and pay for the defense of each of the Adhoc
Indemnitees from and against, and shall compensate and reimburse each of the
Adhoc Indemnitees for, any Damages which are directly suffered or incurred by
any of the Adhoc Indemnitees or to which any of the Adhoc Indemnitees may
otherwise become subject and which arise from or as a result of, or are directly
or indirectly connected with: (i) any inaccuracy in or breach of any
representation or warranty set forth in Section 3 ("Representations and
Warranties of NPI") hereunder or in any certificate delivered by NPI in
connection with this Agreement; (ii) any breach of any covenant or obligation of
NPI hereunder; (iii) any liability arising out of or relating to the use,
ownership or operation by NPI of the Assets prior to the Closing; or (iv) any
Legal Proceeding relating to any inaccuracy, breach or expense of the type
referred to in clauses (i), (ii) or (iii) above (including any Legal Proceeding
commenced by any Adhoc Indemnitee for the purpose of enforcing any of its rights
under this Section 7.2 ("Indemnification by NPI") if such Adhoc Indemnitee is
the prevailing party in any such Legal Proceeding). The foregoing indemnity
obligation shall not extend to any third party claims alleging infringement of
proprietary rights where such claims arise or relate solely to Adhoc's use of
the Assets from and after the Closing.
7.3 Indemnification by Adhoc. During the Indemnification
Period, Adhoc shall hold harmless, indemnify and pay for the defense of each of
the NPI Indemnitees from and against, and shall compensate and reimburse each of
the NPI Indemnitees for, any Damages which are directly or indirectly suffered
or incurred by any of the NPI Indemnitees or to which
any of the NPI Indemnitees may otherwise become subject and which arise from or
as a result of, or are directly or indirectly connected with: (i) any inaccuracy
in or breach of any representation or warranty set forth in Section 4
("Representations and Warranties of Adhoc") hereunder or in any certificate
delivered by Adhoc in connection with this Agreement; (ii) any breach of any
covenant or obligation of Adhoc hereunder; (iii) any third party claims alleging
infringement of proprietary rights where such claims arise or relate solely to
Adhoc's use (including but not limited to modification and distribution) to the
Assets from and after the Closing; (iv) the conduct or continuation of the
business related to the Assets from and after the Closing; or (v) any Legal
Proceeding relating to any inaccuracy, breach or expense of the type referred to
in clauses (i), (ii), (iii) or (iv) above (including any Legal Proceeding
commenced by any NPI Indemnitee for the purpose of enforcing any of its rights
under this Section 7.3 ("Indemnification by Adhoc") if such NPI Indemnitee is
the prevailing party in any such Legal Proceeding).
7.4 Defense of Third Party Claims. In the event of the
assertion or commencement by any person (other than a Adhoc Indemnitee or NPI
Indemnitee, as the case may be) of any Legal Proceeding (whether against Adhoc,
NPI or against any other Person) with respect to which NPI (or Adhoc, as the
case may be) may become obligated to hold harmless, indemnify, compensate or
reimburse any Adhoc Indemnitee (or NPI Indemnitee, as the case may be) pursuant
to this Section 7 ("Indemnification"), the procedure set forth below shall be
followed:
(a) Notice. The party entitled to receive indemnity
under this Section 7 (the "Indemnified Party") shall give prompt written notice
to the party obligated to indemnify (the "Indemnifying Parties") of the
commencement of any such Legal Proceeding against the Indemnified Parties for
which indemnity may be sought under this Section 7 ("Indemnification");
provided, however, that any failure on the part of an Indemnified Party to so
notify the Indemnifying Party shall not limit any of the obligations of the
Indemnifying Party under this Section 7 ("Indemnification") unless such failure
to give prompt written notice shall cause any actual harm to the Indemnifying
Party. The Indemnification Period shall be tolled solely with respect to a
particular claim for the period beginning on the date the Indemnifying Party
receives written notice of that claim until the final resolution of such claim
so long as such claim is made within the Indemnification Period.
(b) Defense. The Indemnifying Party shall have the
right to control the defense and settlement of any Legal Proceeding; except that
if the Indemnified Parties are NPI Indemnitees, any attorney selected by Adhoc
as the Indemnifying Party shall be agreed to by both Adhoc and NPI. When NPI or
any NPI Indemnitee is an Indemnified Party, Adhoc shall promptly upon NPI's
request provide to NPI reports regarding the status of defending or settling any
Legal Proceeding and advise NPI of any proposed settlement or compromise
immediately. The Indemnified Parties shall have the night to participate in such
defense with its own counsel provided that such Indemnified Parties pay the
expense of such counsel; provided, however, that in the event of any conflict of
interest arising from arising from Indemnifying Party's defense of any such
claim, Indemnified Parties shall have the night to employ counsel of its (their)
own choosing at Indemnifying Party's expense.
(c) Cooperation. Indemnified Parties will provide
Indemnifying Parties with all reasonably requested assistance in the defense and
settlement of any Legal Proceeding, all at Indemnifying Party's sole cost and
expense.
8. General Provisions.
8.1 Assignment. Neither party shall directly or indirectly
sell, assign, subcontract or otherwise transfer this Agreement or any of its
rights or obligations under this Agreement, without the prior written consent of
the other parties, except as permitted in this section. Any party may assign
this Agreement to any of its Affiliates, provided that the assigning party
remains responsible for and guarantees the full performance of this Agreement
after such assignment. In addition, any party may, without the prior notice to
or written consent of the other parties, assign or transfer this Agreement as
part of a corporate reorganization, consolidation, merger or sale of
substantially all of its assets, provided that the successor entity assumes all
of the assigning party's obligations under this Agreement. This Agreement shall
be binding upon and inure to the benefit of the permitted successors and assigns
of the parties.
8.2 Expenses. Except as otherwise provided in this Agreement,
each of the parties shall each pay its own costs and expenses, including legal
and accounting fees, commissions and expenses, related to the transactions
provided for in this Agreement, irrespective of when incurred. Each party agrees
to pay (and to indemnify and to hold harmless the other parties from) any
liability for any commission or compensation in the nature of an advisor's or
finder's fee to any person or firm for which such party, or any of its employees
or representatives, is responsible.
8.3 Notices and Representatives. Any notice or reports
required or permitted to be given under this Agreement shall be given in writing
and shall be delivered by personal delivery, telegram, facsimile transmission or
by certified or registered mail, postage prepaid, return receipt requested.
Notice shall be deemed given upon actual receipt. Any party and any
representative designated below may, by notice to the others, change its address
for receiving such notices:
To NPI US at: Network Peripherals Inc.
0000 XxXxxxxx Xxxx.
Xxxxxxxx, XX 00000
X.X.X.
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
To NPI Asia: Network Peripherals Asia, Inc.
c/o Network Peripherals Inc.
0000 XxXxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with copy to: Xxxx Xxxx Xxxx & Freidenrich LLP
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
U.S.A.
Attention: Xxx X. Xxxxxxx
Facsimile: (000) 000-0000
To Adhoc at: Adhoc Technologies, Inc.
0000 Xxxxxxx Xxxxx, #000
Xxx Xxxx, XX 00000
U.S.A.
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
8.4 Entire Agreement and Modification. This Agreement
(including its Exhibits and the NDA) constitutes the entire agreement of Adhoc
and NPI relating to the purchase and sale of the Assets and supersedes any and
all prior and contemporaneous negotiations, correspondence, understandings,
letters of intent and agreements in principle between them, whether written or
oral, relating to that subject matter. This Agreement (including its Exhibits)
may only be amended by a written instrument signed by Adhoc and NPI.
8.5 Construction of Agreement. This Agreement has been
negotiated by the respective parties and their attorneys, and its language shall
not be construed for or against any party. The titles and headings in this
Agreement are for reference purposes only and shall not in any manner limit the
construction of this Agreement which shall be considered as a whole.
8.6 Relationship of the Parties. Nothing contained in this
Agreement shall be construed as creating any agency, partnership, or other form
of joint enterprise between the parties. The relationship between the parties
shall at all times be that of independent contractors. Neither party shall have
authority to contract for or bind the other in any manner whatsoever. This
Agreement confers no rights upon either party except those expressly granted
herein.
8.7 Waiver. Delay or failure to exercise any right or remedy
under this Agreement shall not impair such right or remedy or be construed as a
waiver thereof or as acquiescence in a default. Waiver of any breach or failure
of any term or condition of this Agreement shall not be construed as a waiver of
any subsequent breach or failure of the same term or condition or a waiver of
any other term or condition of this Agreement. All waivers must be in writing
signed by the party to be charged.
8.8 Venue for Dispute Resolution. Any suit or action at law or
in equity initiated by either party to enforce or interpret this Agreement will
be brought in a court of competent jurisdiction in Santa Xxxxx County,
California.
8.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California, without regard to its choice of law principles and excluding the
United Nations Convention on Contracts for the International Sale of Goods and
any legislation implementing such Convention, if otherwise applicable.
8.10 Severability. The provisions of this Agreement are
severable, and if any one or more such provisions shall be determined to be
invalid, illegal or unenforceable, in whole or in part, the validity, legality
and enforceability of any of the remaining provisions or portions thereof shall
not in any way be affected or impaired thereby and shall nevertheless be binding
between the parties. Any such invalid, illegal or unenforceable provision or
portion thereof shall be changed and interpreted so as to best accomplish the
objectives of such provision or portion thereof within the limits of applicable
law.
8.11 Parties in Interest. Nothing contained in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any person other than the parties to it and
their respective successors and permitted assigns, nor is anything contained in
this Agreement intended to relieve or discharge the obligation or liability of
any third person to any party to this Agreement, nor shall any provision of this
Agreement give any third person any right of subrogation or action over against
any party to this Agreement.
8.12 Further Instruments. Each party agrees to execute and
deliver such further instruments and documents, and to take such further
actions, as may be reasonably requested by the other after the Closing to carry
out the purposes of this Agreement.
8.13 Absence of Third Party Beneficiary Rights. No provisions
of this Agreement are intended, nor shall be interpreted, to provide or create
any third party beneficiary rights or any other rights of any kind in any
client, customer, affiliate, shareholder, partner of any party hereto or any
other person or entity unless specifically provided otherwise herein, and,
except as so provided, all provisions hereof shall be personal solely between
the parties to this Agreement.
8.14 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.15 Arbitration. The parties will attempt in good faith to
resolve through negotiation any dispute, claim or controversy arising out of or
relating to this agreement. Either party may initiate negotiations by providing
written notice in letter form to the other party, setting forth the subject of
the dispute and the relief requested. The recipient of such notice will
respond in writing within five days with a statement of its position on and
recommended solution to the dispute. If the dispute is not resolved by this
exchange of correspondence, then representatives of each party with full
settlement authority shall meet at a mutually agreeable time and place within
ten days of the date of the initial notice in order to exchange relevant
information and perspectives, and to attempt to resolve the dispute. If the
dispute is not resolved by these negotiations, the matter will be submitted to
JAMS/ENDISPUTE, or its successor, for arbitration. The parties agree that any
and all disputes, claims or controversies arising out of or relating to this
agreement that are not resolved by their mutual agreement shall be submitted to
final and binding arbitration before JAMS/ENDISPUTE, or its successor, pursuant
to the United States Arbitration Act, 9 U.S.C. Sec. 1 et seq. Either party may
commence the arbitration process called for in this agreement by filing a
written demand for arbitration with JAMS/ENDISPUTE, with a copy to the other
party. The arbitration will be conducted in accordance with the provisions of
JAMS/ENDISPUTE's Streamlined Arbitration Rules and Procedures in effect at the
time of filing of the demand for arbitration. The parties will cooperate with
JAMS/ENDISPUTE and with one another in selecting an arbitrator from
JAMS/ENDISPUTE's panel of neutrals, and in scheduling the arbitration
proceedings. The parties covenant that they shall participate in the arbitration
in good faith, and that they shall share equally in its costs. The provisions of
this Paragraph may be enforced by any Court of competent jurisdiction, and the
party seeking enforcement shall be entitled to an award of all costs, fees and
expenses, including attorneys fees, to be paid by the party against whom
enforcement is ordered.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
"NPI US": "Adhoc":
Network Peripherals Inc. Adhoc Technologies, Inc.
By: \s\ Xxxxxxx Xxxxxxxxxxx By: \s\ Xxxxxxx Xx
----------------------------- -----------------------------
Title: President & CEO Title: President & CEO
-------------------------- --------------------------
"NPI Asia."
Network Peripherals Asia, Inc. Altima Communications Asia, Inc
By: \s\ Xxxxxxx Xxxxxxxxxxx By: \s\ Xxxxxxx Xx
----------------------------- -----------------------------
Title: Chairman Title: Principal
-------------------------- --------------------------
