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EXHIBIT 10.29
[RONNE & XXXXXXXX LETTERHEAD]
ASSIGNMENT AGREEMENT
Whereas ReSound Corporation, 000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx Xxxx, XX 00000 XXX ("ASSIGNOR") has recently acquired, as agent for and
on behalf of the ASSIGNEE (as defined below), certain patents and patent
applications (hereafter "the acquired 3M and CID patents and applications") from
Minnesota Mining and Manufacturing Company ("3M") pursuant to an agreement
executed June 28, 1996, and from Central Institute for the Deaf ("CID") pursuant
to an agreement executed June 28, 1996 (the "CID Agreement");
Whereas K/S HIMPP, 25 Ny Vestergaardsvej, XX-0000 Xxxxxxxx, Xxxxxxx ("ASSIGNEE")
desires to acquire the entire right, title and interest in the aquired 3M and
CID patents and applications and the inventions disclosed therein, effective as
of the date of the agreements referenced above;
Now therefore, in consideration for payment in the amount of USD 14,500,000,
receipt whereof is hereby acknowledged, ASSIGNOR hereby sells, assigns and
transfers to ASSIGNEE, its successors, assigns and legal representatives, the
entire right, title and interest in the aquired 3M and CID patents and
applications and the inventions disclosed therein, world-wide, including rights
of priority under the International Convention of Paris (1883) as amended, which
it previously acquired as agent for and on behalf of the ASSIGNEE;
ASSIGNOR further conveys to ASSIGNEE all its rights and obligations under the
CID Agreement, and ASSIGNEE agrees to be bound by the terms of the CID
Agreement;
The patents and patent applications conveyed herein ("the conveyed patents and
applications") are all of the acquired 3M and CID patents and applications,
including patents and applications which may be transferred to ReSound
subsequent to the date of this Assignment, said conveyed patents and
applications including without limitation the patents and patent applications
listed in Exhibit A to this Assignment with
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the sole exception of U.S. Patent 4,425,481 and any non-U.S. patents claiming
priority from said U.S. Patent 4,425,481;
ASSIGNOR hereby agrees that it will execute without further consideration all
papers deemed necessary by the ASSIGNEE in connection with recording the
ASSIGNEE's ownership interest in the conveyed patents and applications,
including specifically documents of the form attached hereto as Exhibit B;
ASSIGNOR further agrees that ASSIGNEE may apply for Letters Patent on said
inventions, and ASSIGNOR will execute without further consideration all papers
deemed necessary by the ASSIGNEE in connection with such applications when
called upon to do so by the ASSIGNEE;
ASSIGNOR covenants that it will promptly provide ASSIGNEE, upon ASSIGNEE's
request, with all pertinent facts and documents relating to the inventions
described in said patents as may be known and accessible to ASSIGNOR and will
testify as to the same in any interference, litigation or proceeding related
thereto, and will promptly execute and deliver to ASSIGNEE or its legal
representatives any and all papers, instruments or affidavits required to
maintain and enforce said patents.
ASSIGNOR agrees that, in the event that either ASSIGNOR or ASSIGNEE becomes
aware of any royalty payment obligations or other agreements which would
conflict with the assignment of title herein or with the right of ASSIGNEE to
practice the claimed subject matter of the conveyed patents and applications
without further payment, ASSIGNOR will cooperate fully with ASSIGNEE in pursuing
any remedy available to ASSIGNOR pursuant to said agreements of June 28, 1996.
This Assignment shall be governed by and construed in accordance with Danish
law. ASSIGNOR and ASSIGNEE hereby submit to the exclusive jurisdiction of the
Maritime and Commercial Court in Copenhagen (So- og Handelsretten i Kobenhavn)
for the settlement of any dispute arising out of its interpretation.
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[RONNE & XXXXXXXX LETTERHEAD]
ReSound Corporation
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By:
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Title
K/S HIMPP
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By:
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Title
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EXHIBIT A
PROVISIONS APPLICABLE TO U.S. TAXPAYERS
The provisions of this Exhibit A shall apply solely for purposes of
determining the amount and allocation of items of income, gain, loss, deduction
and other items of the Partnership for U.S. income tax purposes and shall to
that extent override any contrary provision in the Articles of Association. This
Exhibit A is incorporated in and treated as part of such Articles of Association
by this reference.
1. Capital Accounts. In order to comply with the requirements of
Section 704(b) of the U.S. Internal Revenue Code of 1986 (the "Code") and
Treasury Regulations Section 1.704-2(b)(2)(iv), the Partnership shall maintain
for each Partner a capital account strictly in accordance with the rules set
forth therein. Subject to the preceding sentence, each Partner's capital account
shall be (a) increased by the amount of money contributed by it to the
Partnership, the fair market value of any property contributed by it to the
Partnership (net of any liabilities secured by such contributed property that
the Partnership is considered to assume or take subject to under Code Section
752), and allocations to it of income and gain (including tax-exempt income and
gain) of the Partnership, and shall be (b) decreased by the amount of money
distributed to it by the Partnership, the fair market value of property
distributed to it by the Partnership (net of any liabilities secured by such
distributed property that such Partner is considered to assume or take subject
to under Code Section 752), and allocations to it of Partnership losses and
deductions (including Section 705(a)(2)(B) expenditures). The capital accounts
of the Partners shall be adjusted to reflect the manner in which any unrealised
income, gain, loss or deduction with respect to the Partnership's assets would
have been allocated among the Partners if there had been a taxable disposition
of such assets for their fair market values upon (x) a distribution in kind of
any such assets, and (y) an adjustment of the book values of the Partnership's
assets pursuant to Treasury Regulations Section 1.704-1(b) in connection with
the acquisition of an additional interest in the Partnership by any new or
existing Partner, the distribution of Partnership money or property to a Partner
in consideration for an interest in the Partnership, the liquidation of the
Partnership or any Partner's interest therein, or the other events specified in
such Treasury Regulations, unless Partners holding a majority of the percentage
interests of the Partnership elect not to make such adjustment.
2. Allocation of Profits. For U.S. income tax purposes, Profits (as
defined below) of the Partnership shall be allocated for each fiscal year as
follows:
(a) First, to any Partners with deficit capital accounts in
proportion to such deficits until no Partner has a deficit capital account;
(b) Second, to resound until its capital account equals the
amount of the redemption price for the B shares (to the extent such B shares
have not previously been sold or redeemed) as determined in accordance with
Article 5.5 of the attached Articles of Association; and
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(c) Thereafter, to the Partners in the ratio of the number
of authorised and outstanding shares of the Partnership held by them to the
total number of authorised and outstanding shares of the Partnership
("percentage interests").
3. Allocation of Losses. For U.S. income tax purposes, Losses (as
defined below) of the Partnership shall be allocated for each fiscal year as
follows:
(a) First, to the Partners in proportion to their percentage
interests until ReSound's capital account has been reduced to the amount of the
redemption price of the B shares (to the extent such B shares have not
previously been sold or redeemed) as determined in accordance with Article 5.5
of the attached Articles of Association and the other Partners' capital accounts
have been reduced to zero;
(b) Second, to ReSound until its capital account has been
reduced to zero; and
(c) Thereafter, to the Partners in proportion to their
percentage interests.
4. Definition of Profits and Losses. For purposes of this Exhibit A,
"Profits" and "Losses" mean, for each fiscal year of the Partnership, the
Partnership's taxable income or loss for such year as determined under Section
703(a) of the Code, with the following adjustments: (a) any tax-exempt income or
Section 705(a)(2)(B) expenditures of the Partnership shall be taken into account
as if they were taxable or deductible items, respectively, (b) any items of
income or loss required to be allocated specially under the remaining provisions
of this Exhibit A shall not be taken into account, and (c) depreciation,
amortisation, gain and loss with respect to Partnership assets shall be computed
based on the book value of such assets in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(g)(3) rather than their tax basis.
5. Minimum Gain. In the event that the Partnership ever has any
minimum gain or minimum gain attributable to Partner nonrecourse debt (as those
terms are defined by Treasury Regulations Section 1.704-2), then the provisions
of such regulations regarding allocation and chargeback of such items shall
apply as though set forth herein. In addition, the attached Articles of
Association shall be deemed to include the "qualified income offset" provisions
of Treasury Regulations Section 1.704-1(b)(2)(ii)(d).
6. Allocations for U.S. Income Tax Purposes. If any Partnership
assets are reflected in the capital accounts of the Partners and on the books of
the Partnership at a book value that differs from the tax basis of such assets,
then items attributable to such property for U.S. federal income tax purposes
shall be shared among the Partners in a manner that take account of the
variation between such tax basis and book value in the same way as variations
between the tax basis and fair market value of property contributed to the
Partnership would be taken into account under Code Section 704(c).
7. Minimum General Partner Allocation. For each Partnership fiscal
year, no less than 1% of all allocations of Profits, Losses and other items of
income, gain or loss shall be allocated to the General Partner of the
Partnership.
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[RONNE & XXXXXXXX LETTERHEAD]
8. U.S. Tax Election. The Partnership shall make the election
provided for under Section 754 of the Code upon the request of ReSound, without
any requirement that approval be obtained from any other Partner for such
election. In addition, all other U.S. tax elections and decisions, including
decisions of the "tax matters partner" under Section 6221 et. seq. of the Code
and decisions regarding the proper method of reporting Partnership items for
U.S. income tax purposes, shall be subject to the approval of Partners holding a
majority of the percentage interests held by those Partners who are U.S.
taxpayers.
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[RONNE & XXXXXXXX LETTERHEAD]
ASSIGNMENT AGREEMENT
Whereas ReSound Corporation, 000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx Xxxx, XX 00000 XXX ("ASSIGNOR") has recently acquired, as agent for and
on behalf of the ASSIGNEE (as defined below), certain patents and patent
applications (hereafter "the acquired 3M and CID patents and applications") from
Minnesota Mining and Manufacturing Company ("3M") pursuant to an agreement
executed June 28, 1996, and from Central Institute for the Deaf ("CID") pursuant
to an agreement executed June 28, 1996 (the "CID Agreement");
Whereas K/S HIMPP, 25 Ny Vestergaardsvej, XX-0000 Xxxxxxxx, Xxxxxxx
("ASSIGNEE") desires to acquire the entire right, title and interest in the
aquired 3M and CID patents and applications and the inventions disclosed
therein, effective as of the date of the agreements referenced above;
Now therefore, in consideration for payment in the amount of USD
14,500,000, receipt whereof is hereby acknowledged, ASSIGNOR hereby sells,
assigns and transfers to ASSIGNEE, its successors, assigns and legal
representatives, the entire right, title and interest in the aquired 3M and CID
patents and applications and the inventions disclosed therein, world-wide,
including rights of priority under the International Convention of Paris (1883)
as amended, which it previously acquired as agent for and on behalf of the
ASSIGNEE;
ASSIGNOR further conveys to ASSIGNEE all its rights and obligations
under the CID Agreement, and ASSIGNEE agrees to be bound by the terms of the CID
Agreement;
The patents and patent applications conveyed herein ("the conveyed
patents and applications") are all of the acquired 3M and CID patents and
applications, including patents and applications which may be transferred to
ReSound subsequent to the date of this Assignment, said conveyed patents and
applications including without limitation the patents and patent applications
listed in Exhibit A to this Assignment with the sole exception of U.S. Patent
4,425,481 and any non-U.S. patents claiming priority from said U.S. Patent
4,425,481;
ASSIGNOR hereby agrees that it will execute without further
consideration all papers deemed necessary by the ASSIGNEE in connection with
recording the ASSIGNEE's ownership interest in the conveyed patents and
applications, including specifically documents of the form attached hereto as
Exhibit B;
ASSIGNOR further agrees that ASSIGNEE may apply for Letters Patent on
said inventions, and ASSIGNOR will execute without further consideration all
papers deemed necessary by the ASSIGNEE in connection with such applications
when called upon to do so by the ASSIGNEE;
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[RONNE & XXXXXXXX LETTERHEAD]
ASSIGNOR covenants that it will promptly provide ASSIGNEE, upon
ASSIGNEE's request, with all pertinent facts and documents relating to the
inventions described in said patents as may be known and accessible to ASSIGNOR
and will testify as to the same in any interference, litigation or proceeding
related thereto, and will promptly execute and deliver to ASSIGNEE or its legal
representatives any and all papers, instruments or affidavits required to
maintain and enforce said patents.
ASSIGNOR agrees that, in the event that either ASSIGNOR or ASSIGNEE
becomes aware of any royalty payment obligations or other agreements which would
conflict with the assignment of title herein or with the right of ASSIGNEE to
practice the claimed subject matter of the conveyed patents and applications
without further payment, ASSIGNOR will cooperate fully with ASSIGNEE in pursuing
any remedy available to ASSIGNOR pursuant to said agreements of June 28, 1996.
This Assignment shall be governed by and construed in accordance with
Danish law. ASSIGNOR and ASSIGNEE hereby submit to the exclusive jurisdiction of
the Maritime and Commercial Court in Copenhagen (So- og Handelsretten i
Kobenhavn) for the settlement of any dispute arising out of its interpretation.
ReSound Corporation
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By:
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Title
K/S HIMPP
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By:
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Title
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[RONNE & XXXXXXXX LETTERHEAD]
ASSIGNMENT
Whereas ReSound Corporation, 000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx Xxxx, XX 00000 XXX (hereinafter called ASSIGNOR) holds the entire right,
title and interest in the patents and patent applications set forth in Appendix
A to this Assignment and the inventions disclosed therein as agent for and on
behalf of the ASSIGNEE (as defined below);
Whereas K/S HIMPP, 25 Ny Vestergaardsvej, XX-0000 Xxxxxxxx, Xxxxxxx
(hereinafter called ASSIGNEE) desires to acquire the entire right, title and
interest in said patents and patent applications and the inventions disclosed
therein;
Now therefore, for valuable consideration, receipt whereof is hereby
acknowledged, ASSIGNOR hereby sells, assigns and transfers to ASSIGNEE, its
successors, assigns and legal representatives, the entire right, title and
interest in said patents, patent applications and the inventions disclosed
therein, world-wide, including rights of priority under the International
Convention of Paris (1883) as amended which it previously acquired as agent for
and on behalf of the ASSIGNEE;
ASSIGNOR hereby agrees that ASSIGNEE may apply for Letters Patent on
said inventions, and ASSIGNOR will execute without further consideration all
papers deemed necessary by the ASSIGNEE in connection with such applications
when called upon to do so by the ASSIGNEE.
ReSound Corporation
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By:
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Title
EXHIBIT B
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[RONNE & XXXXXXXX LETTERHEAD]
SHAREHOLDERS AGREEMENT
between
GN Danavox A/S,
Phonak AG,
Oticon Holding A/S,
Widex Holding ApS,
Xxxxxxx Laboratories, Inc.
and
ReSound Corporation
August 22, 1996
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[RONNE & XXXXXXXX LETTERHEAD]
SHAREHOLDERS AGREEMENT
This Agreement is made by and between
GN Xxxxxxx X/X
00 Xxxxxxxxxx
XX-0000 Xxxxxxx
Xxxxxxx
and
Phonak AG
00 Xxxxxxxxxxxxxxxxxx
XX-0000 Xxxxx
Xxxxxxxxxxx
and
Oticon Xxxxxxx X/X
00 Xxxxxxxxxxx
XX-0000 Xxxxxxxx
Xxxxxxx
and
Widex Holding ApS
25 Ny Vestergaardsvej
XX-0000 Xxxxxxxx
Xxxxxxx
and
Xxxxxxx Laboratories, Inc.
Technical Center
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
XXX
and
ReSound Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
XXX
(hereinafter collectively referred to as
"the Shareholders")
concerning their rights and obligations as shareholders in the joint venture
company, HIMPP A/S, (Reg no A/S 228.511), a corporation organised and existing
under the laws of Denmark, having its registered
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office at 25 Ny Vestergaardsvej, XX-0000 Xxxxxxxx, Xxxxxxx (hereinafter referred
to as "the Company").
1.0 Definitions
The following terms shall have the meaning set forth below
Partnership shall mean the HIMPP limited partnership
established under Danish law simultaneously
herewith having a partnership capital of
USD 14,550,000 divided into 80 partnership
shares of USD 180,000 and one share of USD
150,000.
Partners means the general partner (HIMPP A/S) and
the limited partners of the Partnership.
Limited Partners means the limited partners of the
Partnership.
B-shares means the 20 B-shares of partnership
capital subscribed to by ReSound
Corporation in the Partnership in the
amount of USD 3,600,000 together with
subsequent increases hereof in excess of
the capital subscribed to by other Limited
Partners.
2.0 Purpose
2.1 The Company's purpose is to act as the general partner of a limited
partnership established under Danish law by the Shareholders
simultaneously herewith, as reflected in the Articles of Association
of the Company attached as Exhibit 1.
2.2 The Shareholders agree to let the Company act as a joint legal entity
for conducting the activity of the Partnership, which is to own
certain patents and patent applications acquired from ReSound
Corporation, Inc. and from others, and to license such rights free of
charge to the Limited Partners and to third parties on normal
commercial terms.
2.3 The Shareholders agree that the Shareholders can be joined by any
other hearing aids manufacturer that would like to join the
Partnership as a limited partner and that such new shareholders
should be admitted on terms equal to those offered to the Partners.
3.0 Scope
3.1 The Shareholders agree as sole shareholders of the Company and
represented on the Board of Directors that they are under the
obligation to exercise their rights in the Company only through their
representatives on the Board of Directors, or at shareholders'
meetings, in conformity with this Agreement.
3.2 In consequence hereof, this Agreement shall have priority between the
parties over the Articles of Association of the Company, so that no
party can evoke the Articles of Association in support of a result
that the party concerned could not have obtained through this
Agreement.
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3.3 All certificates of shares owned by each of the Shareholders shall
bear a legend to the effect that the Shareholders have entered into a
shareholders agreement, which affects their rights as shareholders.
4.0 The share capital
4.1 The share capital of the Company is DKK 1,200,000 - fully paid up and
owned by the Shareholders as follows:
GN Danavox A/S DKK 200,000
Phonak AG DKK 200,000
Oticon Holding A/S DKK 200,000
Widex Holding ApS DKK 200,000
Xxxxxxx Laboratories, Inc. DKK 200,000
ReSound Corporation DKK 200,000
4.2 The Shareholders agree that the share capital should be increased by
DKK 200,000 for any new shareholder that would like to join the
Company.
5.0 Dividend policy
The Shareholders agree that the Company, as far as justified by the
results and the future cash flow position of the Company, shall
distribute any free reserves as dividends to the Shareholders.
6.0 Board of Directors
6.1 The Board of Directors of the Company (and possibly substitutes for
same) shall be elected at a general meeting of the Shareholders in
accordance with the Articles of Association of the Company. The Board
of Directors shall consist of a minimum of six (6) members elected by
the Shareholders. One (1) prospective member shall be nominated by
any shareholder holding at least DKK 200,000 shares of the Company.
No shareholder can object to the nomination or appointment of
directors or substitutes by the other Shareholders as long as the
number of directors has not been exceeded.
6.2 The chairman of the Board shall be appointed by the directors in a
directors meeting convened immediately after the shareholders
meeting.
6.3 Upon election each director nominated by the Shareholders shall
undertake to act in the best interest of the Company and to comply
with the provisions set forth in this Agreement.
6.4 In case of death, resignation or other removal of a member of the
Board of Directors, an extraordinary general meeting of the Company
shall be convened, at which the Shareholders shall cast their votes
so as to elect the replacement nominee of the shareholder whose
representative on the Board had died, resigned or been otherwise
removed.
6.5 The functions of the Board of directors shall include the powers
provided in the Articles of Association. In all matters concerning
the Company the Board of Directors and each member hereof shall refer
to and act only through the general manager.
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6.6 Provided this Agreement does not prescribe any other special majority
of votes, the business transacted by the Board of Directors shall be
decided with simple majority of votes.
6.7 Any remuneration to directors shall be paid by the shareholder
nominating such director. The Company shall, however, reimburse the
directors for reasonable out of pocket and travelling expenses in
dealing with the Company's business.
7.0 Quorum
At Board meetings a quorum shall consist of a minimum of three
directors.
8.0 Board decisions
8.1 Important decisions to be made by the Company shall always be
referred to directors' meeting. Important decisions are any decisions
whatsoever, other than strictly ministerial or administrative
decisions, including without limitation the following:
a. Capital expenditure in excess of DKK 250,000, hereunder
acquisition of new patents.
b. Consideration and approval of operating and capital
expenditure, approval of budgets (which shall be produced by
the Company annually), financial accounts, resolutions
regarding dividends.
c. Unusual or major decisions, including creation of credit lines
outside the daily business.
Any managing director, general manager or other administrative
official that may be appointed shall not be authorized to act on
behalf of and bind the Company with respect to any important
decisions (as defined herein) unless the board of directors approves.
All day-to-day management decisions which are not important decisions
(as defined herein) shall be made by a management group consisting of
six members of which each Shareholder shall appoint one. The
management group shall make its decisions in accordance with the
rules provided in Article 6.
8.2 In connection with the formation of the Company and the Partnership
it is anticipated that the Company on behalf of the Partnership shall
enter into a purchase agreement relative to the acquisition by the
Partnership of certain patents against a consideration of
approximately USD 14,500,000, and the Shareholders agree that the
terms hereof are subject to the unanimous approval by all directors.
8.3 Until the B-shares have been sold by ReSound Corporation to a third
party or have been redeemed by the Partnership in connection with a
decrease of the partnership capital, any decision to discontinue the
maintenance of any patent or patent application requires the
unanimous approval of all directors.
8.4 Until all B-shares have been sold by ReSound Corporation to a third
party or such B-shares have been redeemed by the Partnership in
connection with a decrease of the partnership capital, the Board
member nominated by ReSound Corporation shall, without the approval
of other directors, be authorized to instruct the Company, and the
Company shall act in accordance with such instruction, in matters
related to whether or not any partnership patents or applications
should be enforced or sought to be enforced before any court of
competent
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jurisdiction or other forum or tribunal, legal or
equitable, on condition, however, that any net expenses connected
herewith shall be borne by ReSound Corporation and transferred to new
B-shares of the Partnership.
9.0 Auditing and financial reporting
9.1 The Company and its subsidiaries shall be audited by one chartered
accountant of international standing approved by all Shareholders.
9.2 The Company's accounts will be maintained in accordance with the tax
statutes and general accounting principles of Denmark, applied
consistently from year to year, and the Company shall supply to the
Board of Directors on a quarterly basis all information necessary to
enable the Board of Directors to follow the business of the Company.
The auditor shall also provide the annual accounts according to US
generally accepted auditing standards (US GAAP), and upon request
submit to the shareholders such financial information regarding the
Company and the Partnership which is necessary for any local tax
filing purpose.
10.0 Transfer of shares
10.1 Any Shareholder (hereinafter called the "Assigning Shareholder") may
sell, assign, or otherwise dispose of all or any part of its shares
only in accordance with the provisions of this clause. In respect of
this Clause, a shareholder and a company controlled by or controlling
such shareholder shall be considered one shareholder.
10.2 If the Assigning Shareholder wants to assign or transfer his shares
this may only take place if approved by the Board of Directors and no
such approval for the sale, transfer or disposition of any shares
shall be given unless and until the rights of pre-emption contained
herein shall have been exhausted.
10.3 Prior to making any sale, assignment, or other disposition of its
shares, the Assigning Shareholder shall give written notice of such
proposed transfer to the other Shareholders. Such notice shall
specify the terms the Assigning Shareholder will accept for such
shares. For a period of three (3) weeks after receipt of such notice
the other Shareholders or any of them in proportion to their present
holding of shares of the Company shall have the irrevocable right to
acquire all of the Assigning Shareholder's shares being transferred
on the terms specified by the Assigning Shareholder as aforesaid. If
the other Shareholders do not want to acquire all of the shares on
the terms offered to it/them, the Assigning Shareholder shall be free
to complete the transfer during the subsequent sixty (60) day period
of all of its shares to a third party, and the approval of the Board
of Directors pursuant to Clause 10.2 shall not be withheld, but the
transfer shall be for no less consideration or at no more favourable
terms than those offered by the Assigning Shareholder and rejected by
the other Shareholders.
10.4 In the event that a Shareholder (hereinafter called the "Transferor")
receives a "bona fide" third party offer to purchase all or part of
its shares which it is willing to accept, it shall promptly give
written notice of such offer to the other Shareholders. The notice
shall specify the terms of such offer and shall include copies of all
proposed agreements with respect thereto. For a period of three (3)
weeks after receiving such notices the other Shareholders shall have
the irrevocable right to elect to acquire all of the Transferor's
shares subject to such offer in proportion to their present holding
of shares of the Company. If none of the other Shareholders want to
acquire all of the shares on the terms offered to it/them, the
Transferor shall be free to complete the transfer during the
subsequent sixty (60) days period of all or
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part of its shares to the third party, and the approval of the Board
of Directors pursuant to Clause 10.2 shall not be withheld, but the
transfer shall be for the same proportion of shares as covered by the
offer from the third party and be for no less consideration or at no
more favourable terms than those offered by the Transferor and
rejected by the other Shareholders.
10.5 The rights of pre-emption contained in this Clause 10 do not apply to
transfers from a shareholder to a company/entity controlled by or
controlling such shareholder or a fellow subsidiary of the
shareholder (An Affiliated Company). If the control should cease
after such transfer of shares to An Affiliated Company has been
effected, then the pre-emption procedure referred to above shall
apply.
10.6 Any transfer, assignment or other agreement with respect to the
shares of a Shareholder shall be conditioned on the recognition and
assumption in writing of all rights and obligations under this
Agreement by the transferee, assignee, or other successor in interest
with respect to such shares. In any transfer described or permitted
under Clause 10 the transferee shall give its written undertaking to
be bound by all the terms, conditions, and covenants of this
Agreement.
10.7 The Board of Directors may refuse approval under Clause 10.2 above of
any transferee or assignee who is not the holder of at least ten (10)
partnership shares of the Partnership.
10.8 A shareholder which under Article 16.3 of the Articles of Association
of the Partnership has withdrawn from the future business of the
Partnership shall be obliged to offer his shares in the Company to
the other Shareholders in accordance with the procedure set forth in
this Article 10.
The purchase price for the shares so offered shall be calculated by
the auditor of the Company and be equal to the proportional share of
the net equity based on book value as of the date of transfer.
11.0 Share certificates
The share certificates of the Company shall bear the following
legend:
"The assignment of this share certificate is restricted under the
terms of a shareholders agreement."
12.0 The terms of the Agreement
This Agreement is entered into for an unlimited period of time, and
the contracting parties shall be bound by the Agreement as long as
they are shareholders of the Company.
13.0 Law and jurisdiction
13.1 This Agreement shall be construed under and governed by substantive
Danish law.
13.2 All disputes arising in connection with the present Agreement shall
be finally settled by arbitration with three arbitrators.
14.3 Each party shall appoint one arbitrator.
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14.4 The President of the Arbitration Tribunal shall, in case the two
arbitrators cannot agree upon his appointment, be appointed by the
President of the Maritime and Commercial Court, Copenhagen.
14.5 The venue for the arbitration shall be Copenhagen, Denmark.
14.6 The rules and procedure of the arbitration shall be governed by the
Law of Arbitration of Denmark. The language of the arbitration
tribunal shall be English.
In witness whereof the Shareholders have duly executed this Agreement in
Copenhagen, Denmark as of the date and year stated below.
Copenhagen, 22 August 1996
---------------------------------- ----------------------------------
For and on behalf of For and on behalf of
GN DANAVOX A/S WIDEX HOLDING A/S
---------------------------------- ----------------------------------
For and on behalf of For and on behalf of
PHONAK XX XXXXXXX LABORATORIES, INC.
---------------------------------- ----------------------------------
For and on behalf of For and on behalf of
OTICON HOLDING A/S RESOUND CORPORATION
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SUBSCRIPTION AGREEMENT
dated the 22nd day of August 1996
between
K/S HIMPP
and
RESOUND CORPORATION
August 21, 1996
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THIS SUBSCRIPTION AGREEMENT (the "Agreement") is made on the 22nd day of August
1996 between
1. K/S HIMPP, a limited partnership under Danish law resident at Ny
Xxxxxxxxxxxxxxx 00, 0000 Xxxxxxxx, Xxxxxxx (the "Partnership"); and
2. RESOUND CORPORATION, resident at 000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx Xxxx, XX 00000, XXX (the "Limited Partner")
for the subscription for shares in the Partnership.
1. DEFINITIONS
1.1. In this Agreement the following words and expressions shall have the
following meanings unless where the context explicitly requires
otherwise:
"Shares" means 10 A shares in the Partnership of a
face value of US$180,000.00 each or in the
aggregate of US$1,800,000.00 of the
Partnership's total authorised and issued
capital of US$14,550,000.00 of which
US$10,950,000.00 represents A shares and
US$3,600,000.00 represents B shares;
"General Partner" means the general partner of the
Partnership; and
"Articles" means the Articles of Association of the
Partnership as adopted by the Partnership in
its constitutive general meeting on 22 August
1996.
2. SUBSCRIPTION FOR SHARES
2.1. The Limited Partner hereby subcribes for the Shares and the Partnership
hereby accepts to be bound by the Limited Partner's subscription for
the Shares.
3. THE LIMITED PARTNER'S RIGHTS AND OBLIGATIONS
3.1. The Limited Partner hereby accepts and assumes all rights and
obligations connected with the subscription for and holding of the
Shares pursuant to the Articles or Danish law in general.
3.2. By his execution of this Agreement the Limited Partner covenants to
have full knowledge of and to accept the terms and conditions of the
Articles.
3.3. The Limited Partner hereby in particular covenants to have full
knowledge of and to accept the following provisions of the Articles:
(i) The Partnership's authorised and issued capital shall be fully
paid up at the establishment of the Partnership.
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(ii) The Partnership's general partner is HIMPP A/S whose liability
is joint, direct and unlimited for all the Partnership's
indebtedness and liabilities. The General Partner's issued and
outstanding share capital is Danish Kroner 1,200,000.00. Each
Limited Partner's liability for the Partnership's indebtedness
and liabilities is personal, direct and pro rata and limited
to the unpaid part (if any) of that Limited Partner's share in
the Partnership's authorised and issued capital together with
such further contributions in cash as the Partnership acting
in general meeting may resolve under Article 4.1., or as may
be required to be contributed under Article 4.1.;
(iii) No Limited Partner shall have any rights of recourse as
against the General Partner for that Limited Partner's
proportion of the Partnership's aggregate liabilities and
indebtedness (Article 6.2.);
(iv) Upon the complete performance of each limited partner's
obligations under his subscription agreement with the
Partnership that limited partner is entitled to receive a
certificate evidencing his shares (Article 7.1.);
(v) The Shares and the certificates are non-negotiable instruments
and shall be issued in the name of the owner (Article 7.2.);
(vi) Each Share may be held by only one natural or legal person. No
Share can be divided into sub-shares (Article 8.1.);
1) The B shares may be redeemed by distributions. The A
shares are irredeemable (Article 5.5.).
2) The A shares may only be transferred to a transferee
who is itself in control of or controlled by the
transferor limited partner (Article 8.2.).
The B shares may be transferred. On transfer the B
share certificates shall be annulled and new A share
certificates of the same face value issued to the
transferee.
(vii) If any Limited Partner shall become insolvent or be in breach
of his duties and obligations towards the Partnership under
the subscription agreement, these Articles of Association or
otherwise, the Partnership shall be entitled to request any
loss realised thereby reimbursed by the relevant limited
partner, and further to terminate without notice any patent
license agreement entered into between the Partnership and the
Limited Partner (Article 10); and
(viii) The General Partner shall be charged with the administration
of the Partnership and is entitled to remuneration for such
work to the extent that such remuneration is reasonable when
compared to the work and costs involved in the General
Partner's performance of his duties. The General Partner may
delegate administrative functions and tasks to third parties
(Article 11.1.).
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4. LAW AND JURISDICTION
4.1. This Agreement shall be governed by and construed in accordance with
Danish law.
4.2. Any dispute arising out of this Agreement or its interpretation shall
be subject to the exclusive jurisdiction of So- og Handelsretten i
Kobenhavn. This Clause shall not affect the construction of Article 17
of the Articles pursuant to which disputes concerning the
interpretation of the Articles shall be settled finally by arbitration.
AS WITNESS the signatures of the parties hereto on the date first written above.
For the Partnership:
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
For and on behalf of
K/S HIMPP
for the Limited Partner:
------------------------------
------------------------------
for and on behalf of
RESOUND CORPORATION
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HIMPP A/S
VEDTAEGTER ARTICLES OF ASSOCIATION
1.0 NAVN 1.0 NAME
Selskabets navn er HIMPP A/S. The name of the Company is HIMPP A/S.
Selskabets binavn er Hearing The Company shall also trade under the
Instruments Manufacturers Patent name Hearing Instruments Manufacturers
Partnership A/S (HIMPP A/S). Patent Partnership A/S (HIMPP A/S).
2.0 HJEMSTED 2.0 REGISTERED OFFICE
Selskabets hjemsted er i Vaerlose The registered office of the Company
kommune. shall be in the municipality of
Vaerlose.
3.0 FORMAL 3.0 OBJECTS
Selskabets formal er at virke som The Company's objectives shall be to act
komplementar i K/S HIMPP, hvis as a general partner of K/S HIMPP, whose
formal er at erhverve og licensiere objective is to acquire and license
patenter til horeapparatindustrien patents for the hearing aid industry and
samt dermed beslaegtet virksomhed. business related hereto.
4.0 SELSKABETS KAPITAL 4.0 THE COMPANY'S SHARE CAPITAL
Selskabets aktiekapital udgor kr. The share capital of the Company equals
1.200.000 fordelt pa aktier a kr. DKK 1,200,000 divided into shares of DKK
1.000 xxxxx multipla heraf. 1,000 each or any multiple hereof.
5.0 SELSKABETS AKTIER 5.0 THE COMPANY'S SHARES
5.1 5.1.
Selskabets aktier skal xxxx pa navn The shares shall be issued to registered
og noteres i selskabets aktiebog. holders and shall be recorded in the
Company's register of shareholders.
5.2 5.2
Selskabets aktier er ikke The shares are non-negotiable
omsaetningspapirer. instruments.
5.3 5.3
Enhver aktieovergang kraever Any transfer of shares requires the
bestyrelsens forudgaende samtykke. previous consent of the Board of
Directors.
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5.4 5.4
Aktier, som er bortkommet, skal Share certificates which have been lost
kunne mortificeres af bestyrelsen can without judgement be declared null
uden dom i henhold til de regler, and void by the Board of Directors
der gaelder vedrorende according to the statutory rules which
mortifikation af aktier, som ikke are applicable to non-negotiable
er omsaetningspapirer. instruments.
6.0 GENERALFORSAMLINGEN, 6.0 GENERAL MEETING OF SHAREHOLDERS,
KOMPETENCE, STED OG AUTHORITY, PLACE AND NOTICE
INDKALDELSE
6.1 6.1
Generalforsamlingen har den hojeste Within the limits set by law and by
myndighed i alle selskabets these Articles of Association the
anliggender indenfor de i General Meeting of Shareholders has the
lovgivningen og naervaerende supreme authority in all matters
vedtaegter fastsatte graenser. relating to the Company.
6.2 6.2
Selskabets generalforsamlinger skal The General Meetings shall be held at
afholdes pa selskabets hjemsted the registered office of the Company or
xxxxx i Kobenhavn. Den ordinaere in Copenhagen. The ordinary General
generalforsamling skal afholdes Meeting shall be held each year not
hvert ar inden 5 maneder efter later than 5 months after the end of the
regnskabsarets udlob. accounting year.
6.3 6.3
Generalforsamlinger indkaldes af General Meetings shall be convened by
bestyrelsen med mindst 14 xxxxx xx the Board of Directors with not less
hojst 4 ugers xxxxxx xxx than 14 days' notice and not more than 4
almindeligt brev xxxxx telefax til weeks' notice by letter or telefax to
hver enkelt aktionaer. each individual shareholder.
7.0 7.0 GENERAL MEETING OF SHAREHOLDERS,
GENERALFORSAMLINGEN, DAGSORDEN AGENDA
Dagsordenen for den ordinaere At the ordinary General Meeting the
generalforsamling skal indeholde: following business shall be
transacted:
1. 1.
Bestyrelsens beretning om Report of the Board of Directors on the
selskabets virksomhed i det Company's activities during the past
forlobne ar. year.
2. 2.
Fremlaeggelse af arsregnskab med Presentation of the annual accounts
revisionspategning til godkendelse endorsed by auditor for adoption and
samt arsberetning. annual report.
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3. 3.
Beslutning om anvendelse af Decision as to the appropriation of
overskud xxxxx daekning af tab i profit or settlement of loss according
henhold til det godkendte to the adopted annual accounts.
arsregnskab.
4. 4.
Valg af bestyrelsesmedlemmer og Election of members to the Board of
evt. suppleanter. Directors and substitutes for same.
5. 5.
Valg af revisor. Election of auditor.
6. 6.
Eventuelle forslag fra bestyrelsen Proposals, if any, from the Board of
og/xxxxx aktionaererne. Directors and/or the shareholders.
8.0 GENERALFORSAMLINGEN, STEMMERET 8.0 GENERAL MEETING OF SHAREHOLDERS,
OG BESLUTNINGER VOTING RIGHT AND RESOLUTIONS
8.1 8.1
Hvert aktiebelob pa kr. 1.000 giver Each share of DKK 1,000 entitles the
en stemme. shareholder to one vote.
8.2 8.2
Pa generalforsamlingen traeffes All resolutions at the General Meeting
alle beslutninger ved simpelt shall be adopted by simple majority of
flertal, bortset fra de tilfaelde, votes unless special majority of votes
hvor Aktieselskabsloven kraever is required by the Companies Act.
kvalificeret flertal.
9.0 BESTYRELSE OG DIREKTION 9.0 BOARD OF DIRECTORS AND MANAGEMENT
9.1 9.1
Selskabet ledes af en bestyrelse pa The Company shall be managed by a Board
6 medlemmer valgt af of Directors of six (6) members elected
generalforsamlingen for tiden at the General Meeting, the term being
indtil naeste ordinaere the period until the next ordinary
generalforsamling. General Meeting.
9.2 Bestyrelsen 9.2
skal ved en forretningsorden The Board must draw up its own rules of
traeffe naermere bestemmelser om procedure.
udforelsen af sit hverv.
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9.3 9.3
Bestyrelsen ansaetter en direktor The Board of Directors shall appoint one
til at varetage den daglige ledelse registered manager in charge of the
af selskabets virksomhed. day-to-day operations of the Company.
10.0 TEGNINGSREGEL 10.0 AUTHORITY TO BIND THE COMPANY
Selskabet tegnes af direktoren The Company shall be bound by the
xxxxx xxx medlemmer af bestyrelsen registered manager or by the joint
i forening. signatures of three members of the Board
of Directors.
11.0 REVISION 11.0 AUDITING
Selskabets regnskaber revideres af The auditing of the Company's accounts
en statsautoriseret revisor, der shall be carried out by one chartered
vaelges af den ordinaere accountant elected by the General
generalforsamling for et ar ad Meeting for one year at a time.
gangen. Genvalg kan finde sted. Re-election may be made.
12.0 REGNSKABSaR 12.0 ACCOUNTING YEAR
Selskabets regnskabsar xxxxx xxx The accounting year of the Company runs
den 1. januar til den 31. december. from January 1 to December 31. However,
Forste regnskabsperiode dog fra the first accounting period runs from
stiftelsen til 31. december 1996. the formation of the company to December
31, 1996.
********** **********
Ovenstaende vedtaegter er blevet The above Articles of Association have
vedtaget pa den ekstraordinaere been adopted at the Extraordinary
generalforsamling den 22. august General Meeting held on August 22, 1996.
1996.
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ARTICLES OF ASSOCIATION
of
K/S HIMPP
August 21, 1996
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1. THE LIMITED PARTNERSHIP'S NAME AND PRINCIPAL PLACE OF BUSINESS
1.1. The name of the limited partnership is K/S HIMPP (the "Partnership").
The Partnership shall also trade under the name of K/S Hearing
Instruments Manufacturers Patent Partnership (K/S HIMPP).
1.2. The Partnership's place of residence is in Vaerlose Kommune.
2. OBJECTS
2.1. The Partnership's objects are to carry on a business undertaking by
acquiring patent rights with an application within the hearing aid
industry and licencing such patent rights to third parties.
3. THE COMPANY'S CAPITAL
3.1. The Partnership's authorised and issued capital is US$14,550,000 which
is divided into 60 A-shares and 20 B-shares of US$180,000 each and 1
(one) A-share of USD 150,000 (each a "Share") which are subscribed for
by the following companies (each a "Limited or General Partner") in the
following proportions:
GN Danavox A/S 10 A-Shares of USD 180,000
Phonak AG 10 A-Shares of USD 180,000
Oticon A/S 10 A-Shares of USD 180,000
Widex Holding ApS 10 A-Shares of USD 180,000
Xxxxxxx Laboratories, Inc. 10 A-Shares of USD 180,000
ReSound Corporation 10 A-Shares of USD 180,000
ReSound Corporation 20 B-Shares of USD 180,000
HIMPP A/S 1 A-Share of USD 150,000
3.2. The Partnership shall be deemed to be fully established on the
subscription by the Partners of all Shares in the Partnership's
authorised and issued capital.
4. FINANCING
4.1. The Partnership's activities shall be financed by the subscription
proceeds derived from the Limited Partners. The Partnership acting in
general meeting may by simple majority resolve to request the Limited
Partners to make further contributions in cash to the Partnership in
excess of the authorised and issued capital to cover running costs of
the business. However, annually each Limited Partner shall be obliged
to contribute his proportionate share of a yearly deficit not exceeding
USD 150,000 - or a maximum of USD 25,000.
5. OWNERSHIP AND APPLICATION OF ANNUAL PROFITS
5.1. The Partnership shall be owned by the Limited Partners in the same
proportion as each Limited Partner's share in the Partnership's
authorised and issued capital shall bear to the Partnership's aggregate
authorised and issued capital.
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5.2. The Partnership's authorised and issued capital shall be fully paid up
at the establishment of the Partnership.
5.3. The Partnership's net annual profits and losses as evidenced by the
Partnership's annual accounts shall be apportioned between the Limited
Partners in the same proportion as each Limited Partner's share in the
Partnership's authorised and issued capital shall bear to the
Partnership's aggregate authorised and issued capital. The Partnership
acting in general meeting may with the approval of all Limited Partners
resolve to apportion a net annual loss differently.
5.4. The Partnership's authorised and issued capital may be increased by the
subscription of new A or B-Shares on the same terms and conditions
applying to the initial subscription of the Shares. Costs disbursed by
a holder of B-Shares on behalf of the Partnership shall be reimbursed
by the issue of new B-Shares, such new B-shares, however, having no
voting rights. New A-Shares cannot be issued until such time when all
B-Shares have been annulled pursuant to Article 8.3.
5.5. All or some of the B-Shares shall be redeemed by distributions in cash
of a proportional share of the Partnership's net equity at such time
and to the extent that the Partnership's liquidity allows such
redemption. The redemption amount cannot exceed the aggregate of the
face value of the B-Shares and a margin of .5 percent per month
calculated as from 1 July 1997 plus an amount equal to the excess of
(i) aggregate amounts previously contributed by ReSound under Article 4
to satisfy any Partnership deficits, over (ii) one-sixth of the
aggregate amounts contributed by all of the Partners to satisfy any
such deficits. To the extent that such distributions in cash derive
from Partnership profits already taxed in the hands of the Limited
Partners, only 66 percent of such profits may be applied in
distribution.
To the extent that the preceding sentence prevents payment of the full
redemption amount, or the Partnership's liquidity otherwise precludes
payment of such amount, then a pro rata portion of the B shares shall
be redeemed and the remainder shall be redeemed as soon thereafter as
the Partnership's liquidity permits.
The A-Shares are irredeemable.
6. THE PARTNERS' LIABILITY
6.1. The Partnership's general partner is A/S HIMPP (the "General Partner")
whose liability is joint, direct and unlimited for all the
Partnership's indebtedness and liabilities. The General Partner's
issued and outstanding share capital is Danish Kroner 1,200,000. Each
Limited Partner's liability for the Partnership's indebtedness and
liabilities is personal, direct and pro rata and limited to the unpaid
part (if any) of that Limited Partner's share in the Partnership's
authorised and issued capital together with such further contributions
in cash as the Partnership acting in general meeting may resolve under
Article 4.1, or as may be required to be contributed under Article 4.1.
6.2. No Limited Partner shall have any rights of recourse as against the
General Partner for that Limited Partner's proportion of the
Partnership's aggregate liabilities and indebtedness.
7. SHARE CERTIFICATES
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7.1. Each Limited Partner is on the complete performance of the Limited
Partner's obligations under his subscription agreement with the
Partnership entitled to receive a certificate evidencing his Share.
7.2. The Shares and the certificates are non-negotiable instruments and
shall be issued in the name of the owner.
7.3. The General Partner shall create and maintain a list of the names and
addresses of the Limited Partners. Each certificate evidencing Shares
shall be endorsed with a notification of the certificate's entry in the
list of Limited Partners.
7.4. If it can be established that a Share certificate has been lost, the
General Partner may on the request of the Limited Partner registered in
the list of Limited Partners as the owner of the relevant Share
certificate notify such person who holds the certificate by no less
than three months' notice in the Official Gazette to appear at the
Partnership's address and there present to the Partnership such
evidence of his right and title to the relevant Share certificate as he
is relying on. In the event that no one shall come forward as a result
of the notice the General Partner shall be entitled to deem the lost
Share certificate null and void whereupon the same shall so become null
and void and issue a new Share certificate to such person who reported
the Share certificate lost and missing.
7.5. All costs involved in connection with the annulment and subsequent
re-issue of a Share certificate shall be borne by the Limited Partner
requesting the annulment.
8. ASSIGNMENT AND TRANSFER
8.1. Each Share may be held by only one natural or legal person. No Share
can be divided into sub-shares.
8.2. A-Shares are non-transferable except where the transfer occurs from a
Limited Partner to a a transferee which is itself controlled by or in
control of such Limited Partner.
8.3. B-Shares are transferable. If the transfer occurs before 1 July 1997
the transfer shall be at face value. If the transfer occurs on or after
1 July 1997 the transfer shall be at the aggregate of the face value
together with a margin of .5 percent. per month as from 1 July 1997
plus an amount equal to the excess of (i) aggregate amounts previously
contributed by ReSound under Article 4 to satisfy any Partnership
deficits, over (ii) one-sixth of the aggregate amounts contributed by
all of the Partners to satisfy any such deficits.
On transfer the B Share certificates shall be annulled and new A Share
certificates issued in the name of the transferee.
8.4. No transfer and assignment of ownership to Shares shall be deemed valid
and binding as against the Partnership unless and until such time that
it has been entered on the list of the Partnership's Limited Partners.
The condition for the entry shall be the transferee's execution of a
certificate that the transferee acquires and assumes all the transferor
Limited Partner's rights and obligations as against the Partnership in
a form satisfactory to the General Partner.
9. EXECUTION
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9.1. The Partnership's assets cannot be made the subject of attachment or
distress orders or any other form of execution for claims unrelated to
the Partnership.
10. DEFAULT
10.1. If any Limited Partner shall become insolvent or be in breach of his
duties and obligations towards the Partnership under the subscription
agreement, these Articles of Association or otherwise, the Partnership
shall be entitled to request any loss realised thereby reimbursed by
the relevant Limited Partner and further to terminate without notice
any patent license agreement entered into between the Partnership and
the Limited Partner.
11. ADMINISTRATION
11.1. The General Partner shall be charged with the administration of the
Partnership and is entitled to remuneration for such work to the extent
that such remuneration is reasonable when compared to the work and
costs involved in the General Partner's performance of his duties. The
General Partner may delegate administrative functions and tasks to
third parties.
11.2. The General Partner shall maintain the Partnership's books and shall
prepare the Partnership's budgets.
12. GENERAL MEETINGS
12.1. The Partnership's highest authority is the general meeting.
12.2. The annual general meeting shall be held each year no later than four
months after the expiry of the financial year.
12.3. The general meeting shall be held in Vaerlose Kommune unless the
General Partner shall direct otherwise.
12.4. The General Partner shall call the general meeting with at least two
and no more than four weeks notice by ordinary post to the Limited
Partners at the addresses indicated in the list of Limited Partners.
12.5. The General Partner may call extra-ordinary general meetings and shall
so call an extra-ordinary general meeting if at least two Limited
Partners shall reasonably request it. In the latter event the meeting
shall be called no later than 14 days after the receipt of the Limited
Partners' request.
12.6. Any general meeting shall be chaired by a person appointed by the
General Partner who shall have the final right to resolve all matters
regarding the proper calling of the general meeting and the procedures
applicable at the general meeting including the casting of votes.
12.7. The agenda for the annual general meeting shall as a minimum contain
the following items:
1. The General Partner's account of the Partnership's business in
the most recent financial year.
2. The presentation of the audited annual accounts for approval.
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3. The application of the profits and losses pursuant to the
annual accounts, including contributions from Limited
Partners.
4. The approval of the following year's budget.
5. The appointment of the Partnership's auditor.
6. Proposals from Limited Partners if any.
7. Miscellaneous.
12.8. Proposals from Limited Partners which shall be on the agenda for the
annual general meeting shall be presented to the General Partner no
later than four weeks before the date of the relevant annual general
meeting.
12.9. No later than two weeks before the annual general meeting the audited
annual accounts shall be circulated to all Limited Partners together
with the proposed application of the profits and losses.
12.10. Proposals from Limited Partners or the General Partner to amend these
Articles of Association shall be circulated to all the Partnership's
participants no later than two weeks before the date of the general
meeting.
12.11. At the general meeting each Limited Partner has one vote for each Share
held by him or voted by him under proxy. The right to vote is
conditional upon title to the relevant Shares having been registered in
the list of Limited Partners no later than 14 days before the date of
the general meeting. At the general meeting Limited Partners may be
represented and vote by third parties acting under written proxy.
12.12. All resolutions made at the general meeting shall be made by simple
majority unless otherwise provided for in these Articles of
Association. The general meeting shall not pass resolutions on matters
which can be decided by the General Partner.
13. SIGNATORY RULE
13.1. The Partnership is bound in all respects by the General Partner who is
authorised to sign formally on behalf of the Partnership.
14. FINANCIAL YEAR
14.1. The Partnership's financial year is the calendar year. The
Partnership's first financial year commences on the date of
incorporation of the Partnership and expires on 31 December 1996.
14.2. The Partnership's annual accounts shall be audited by a chartered
accountant appointed at the general meeting as the Partnership's
auditor for a period of one year.
14.3. The Partnership's profit and loss statement and balance sheet shall be
available in audited form no later than two months after the expiry of
the financial year to which they relate.
14.4. The annual accounts shall be prepared in accordance with generally
accepted accounting practices and the Annual Accounts Act with such
modifications as may be result from the limited partnership form. The
Partnership shall advise the Limited Partners not resident in the
Kingdom of Denmark of such accounting details as may be necessary for
the proper preparation by them of their annual accounts.
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15. AMENDMENTS TO ARTICLES OF ASSOCIATION
15.1. These Articles of Association can only be amended following a proposal
to amend made by the General Partner or the Limited Partners and only
if the amendment is passed by a general meeting by a majority of 4/5 of
the authorized capital. If the proposal is not passed at a general
meeting a new general meeting to be held no earlier than four weeks
after the first general meeting may pass the resolution with a majority
of 4/5 of the Shares represented at the general meeting.
Notwithstanding the foregoing, any amendment which could materially and
adversely affect any Limited Partner shall require the approval of such
Limited Partner.
15.2. Amendments to these Articles of Association which shall be necessary in
order to bring them to conform with statutory rules and regulations
applying to limited partnerships, the General Partner shall be
authorised to complete such amendments without calling a general
meeting.
15.3. To the extent that changes in the law applying to limited partnerships
shall affect the position of the General Partner or the Limited Partner
as against public authorities, the General Partner or the Limited
Partners shall be entitled to call an extra-ordinary general meeting to
debate the necessary amendments.
15.4. The General Partner or each Limited Partner may then propose a change
in the Partnership's corporate identity and the general meeting can
pass such resolution by a majority of 4/5 of the Shares represented at
such general meeting. The articles of association applying to the
different entity shall to the greatest extent possible be similar to
these Articles of Association including the rights and obligations of
the General Partner and the Limited Partners.
15.5. In the event of the restructuring of the Partnership to another
corporate form the Partnership's auditor shall immediately prepare an
opening statement evidencing each Limited Partner's capital account. No
Limited Partner shall be subject to personal liability as a result of
the restructuring of the Partnership without in each case having
consented to such change in liability.
15.6. The Partnership shall cease on the alienation of its assets. The
General Partner shall in that event be authorised to resolve to
liquidate the Partnership.
16. TERM AND TERMINATION
16.1. On resolving to liquidate the Partnership the General Partner shall
appoint a liquidator who shall be charged with the liquidation of the
Partnership accounting at all times to the Partnership acting in
general meeting, and who, on the discharge of the Partnership's
liabilities shall distribute the net assets of the Partnership to the
Limited Partners, first to the holders of B-Shares until the B-Shares
have been fully redeemed and thereafter to the A-Shares in equal
proportion to their share in the Partnership's authorised and issued
share capital. The A-Shares shall not be redeemed until such time when
the B-Shares have been fully redeemed.
16.2 The Partnership shall be liquidated at the latest 20 years after its
incorporation or upon the dissolution, liquidation or other event of
withdrawal of the General Partner.
16.3 At the earliest as from January 31, 1998 a Limited Partner may choose
in the future not to participate in the losses or profits of the
Partnership. Such decision shall be notified in writing
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to the General Partner and shall be effective as from a July 1 or
January 1 (the Termination Date) if notified no later than three (3)
months prior to the Termination Date.
After the Termination Date, any royalty-free license to use Partnership
patents shall still continue in full force and effect, but the Limited
Partner not participating in losses or profits of the Partnership shall
not be granted any right to use partnership patents acquired by the
Partnership after the Termination Date.
17. ARBITRATION
17.1. Any dispute arising between the Limited Partners and the General
Partner concerning the Partnership or the interpretation of these
Articles of Association cannot be brought before the ordinary courts
but shall be resolved in accordance with Danish substantive law by
arbitration in Copenhagen.
17.2. The party intending to convene the arbitration tribunal shall notify
the other party by registered letter of such intent providing a short
description of the issues which shall be before the arbitration
tribunal. Each party shall then within four weeks appoint an
arbitrator. These arbitrators shall within two weeks appoint a third
arbitrator who shall be educated as a lawyer. If the arbitrators have
not agreed the third arbitrators within two weeks or if a party fails
within the time given to appoint an arbitrator, the relevant arbitrator
shall be appointed if a party shall so direct by the President of the
Maritime and Commercial Court in Copenhagen.
17.3. The arbitration tribunal shall itself decide its rules of procedure and
shall when handing down its ruling order the taxing of costs involved
in the matter including costs to legal counsel and, if necessary,
accountants.
17.4. To the extent that they have not been varied by the contents of this
Article 18 the provision of the Arbitration Act shall apply. The
arbitration tribunal shall conduct its proceedings in the English
language.
18. COSTS
18.1. All costs involved in the incorporation of the Partnership shall be
borne by the Partnership.
AS PASSED at the Partnership's constitutive general meeting on 22 August 1996.
In the Chair:
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