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Exhibit 3.10
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of October 26, 1999, by and among Olicom A/S (Reg. No. A/S 101.733), a
corporation organized and existing under the laws of the Kingdom of Denmark
("Olicom"), Olicom Ventures A/S (Reg. No. A/S 205.748), a corporation organized
and existing under the laws of the Kingdom of Denmark and a subsidiary of Olicom
("Seller") and Motorola, Inc., a Delaware corporation ("Buyer").
R E C I T A L S
A. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer shares (the "Shares") of common stock of Digianswer A/S (Reg. No. A/S
151.570), a corporation organized and existing under the laws of the Kingdom of
Denmark ("Digianswer") with a nominal value of 2,017,000 DKK (the "Shares")
representing sixty-six and 85/100 percent (66.85%) of the issued and outstanding
shares of Digianswer and owned by Seller (the "Common Stock"), in consideration
of __________________ (the "Purchase Price"), upon the terms and subject to the
conditions set forth herein (the "Purchase").
B. Unless the context otherwise so requires the term the "Company"
shall include a reference to each of Digianswer and Digianswer Ireland, Ltd.
(the "Subsidiary").
C. In connection with the Purchase, Buyer, Olicom, the Company, Xxx
Xxxxxx ("OJ") and Seller desire to enter into certain other agreements, upon the
terms and subject to the conditions set forth herein.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the respective representations,
warranties, agreements and conditions hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF THE SHARES
1.1 Purchase and Sale of the Shares. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing (as hereinafter defined)
Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Shares,
free and clear of all liens, security interests, claims, charges, rights of
another, defects in title and encumbrances of any kind or character ("Liens")
and restrictions on transfers imposed by the Shareholders' Agreement (as
hereinafter defined) and all applicable Danish law. Seller shall deliver the
Shares to Buyer at the Closing by delivering to Buyer one or more share
certificates representing the Shares to be purchased by Buyer hereunder,
executed by a duly authorized officer of Seller duly endorsed in blank or
accompanied by assignment(s) separate from certificate(s).
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ARTICLE 2
MANNER OF PAYMENT
ARTICLE 3
CLOSING
3.1 Purchase Closing. The closing of the Purchase (the "Closing") will
take place at the offices of Xxxxxx & Coff, 00 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxx as soon as practicable, but in no event later than ten (10) days from
the date of this Agreement or such other date as may be agreed to by the parties
hereto (the "Closing Date"). For purposes of this Agreement, each and every
event referred to in this Section 3.1 that is to occur at the Closing shall be
deemed to have occurred contemporaneously.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OLICOM AND SELLER
Olicom and Seller hereby jointly and severally represent and warrant to
Buyer as follows (with the understanding that Buyer is relying on such
representations and warranties in entering into and performing this Agreement):
4.1 Organization, Good Standing, Etc. Each of the Company, Olicom and
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the Kingdom of Denmark and Ireland, as applicable, has all
requisite corporate power and authority to own, lease and operate its respective
properties and to carry on its respective business as now being conducted and is
duly qualified and in good standing to do business, except where the failure to
so qualify or be in good standing has not had, or could not be reasonably
expected to have, a material adverse effect on the business, operations,
properties, condition (financial or otherwise), results of operations, assets or
liabilities of the Company (a "Material Adverse Effect"). Attached as Exhibit E1
to this Agreement are (i) true and complete copies of the resume of Danish
Commerce and Companies Agency ("DCAA") which reflects Digianswer's current
Articles of Association; and (ii) true and complete copies of the Subsidiary's
Memorandum and Articles of Association, attached hereto as Xxxxxxx X0, which
copies set out in full the rights and restrictions attaching to each class of
share capital in the Subsidiary. The Company is not in violation of any
provisions of its Articles of Association or, to the Seller's knowledge, the
Rules of Procedure for the Board of Directors. Except for the Subsidiary, the
Company does not own, directly or indirectly, any subsidiaries (as defined in
Section 14.13) or own, or have the right, pursuant to a contract or otherwise,
to acquire any capital stock, equity interest or other similar investment in any
corporation, partnership, joint venture, association, limited liability company,
trust or other entity.
4.2 Capital Structure.
(a) The authorized share capital of the Company consists of DKK
3,017,000 represented by share certificate numbers 1 through 9 and 11 through
26, which represent all of the Common Stock issued and outstanding. Attached
hereto as Schedule 4.2(a) is a true, complete and accurate list of each record
holder of capital stock of Digianswer and the number of shares of Common Stock
held by each such holder. Seller owns twelve (12) shares of Digianswer which
represent a total of sixty-six and 85/100ths (66.85%) of the economic interest
in Digianswer.
(b) The authorized share capital of the Subsidiary is EUR100,000
divided into 100,000 shares having a nominal value of EUR1 each. There are 2
shares of EUR1 in issue. The issued share capital is beneficially owned by
Digianswer free of any Liens. No shares of Common Stock are held by the Company
in its treasury. No shares of capital stock of the Company are reserved for
issuance for any purpose. There are no bonds, debentures, notes or other
indebtedness issued or outstanding having the right to vote ("Voting Debt") on
any matters on which holders of Common Stock may vote. All of the issued and
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable and have not been issued in violation of
any preemptive or similar rights. Except as set forth on Schedule 4.2(b), there
are no options, warrants, calls, rights, commitments or agreements of any
character to which the Company is a party or by which it is bound obligating the
Company to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or any Voting Debt of the Company, or
obligating the Company to grant, extend or enter into any
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such option, warrant, call, right, commitment or agreement. Except as set forth
on Schedule 4.2(c), there are no outstanding contractual obligations of the
Company to sell, dispose of, repurchase, redeem or otherwise acquire any shares
of Common Stock or other capital stock of the Company.
4.3 Authority. Olicom and Seller each has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby and Olicom, Seller and the Company have all requisite
corporate power and authority to enter into each other agreement, document and
instrument required to be executed in accordance herewith, including, without
limitation, each of the documents the forms of which are attached as Exhibits
hereto (collectively, and including this Agreement, the "Transaction Documents")
and to consummate the transactions contemplated thereby. The execution and
delivery of the Transaction Documents by the Company, Olicom and Seller, as
applicable, and the consummation by the Company, Olicom and Seller of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company, Olicom and Seller. This Agreement
and each of the other Transaction Documents have been duly executed and
delivered by the Company, Olicom and Seller, as applicable, and constitute the
valid and binding obligations of the Company, Olicom and Seller, enforceable
against each of them, as applicable, in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and as provided for under The Securities Trading Act (Act N. 1072 of
20 December 1995 with amendments).
4.4 No Conflict; Required Filings and Consents. The execution and
delivery of the Transaction Documents by the Company, Olicom and Seller, as
applicable, do not, and the performance by the Company, Olicom and Seller, as
applicable, of the transactions contemplated hereby or thereby will not, subject
to making the filings and obtaining the consents, approvals and authorizations
described in Schedule 4.4, violate, conflict with, or result in any breach of
any provision of the Articles of Association or Rules of Procedure for the Board
of Directors, as amended or restated, of the Company, Olicom or Seller, violate,
conflict with, or result in a violation or breach of, or constitute a default
(with or without due notice or lapse of time or both) under, or permit the
termination of, or result in the acceleration of, or entitle any party to
accelerate (whether as a result of a change in control of the Company or
otherwise) any obligation, or result in the loss of any benefit, or give any
person the right to require any security to be repurchased, or give rise to the
creation of any lien, charge, security interest or encumbrance upon any of the
properties or assets of the Company under any of the terms, conditions, or
provisions of, any loan or credit agreement, note, bond, mortgage, indenture or
deed of trust, or any license, lease, agreement or other instrument or
obligation to which the Company, Olicom or Seller is a party or by which the
Company, Olicom or Seller or any of their respective properties or assets may be
bound or subject, except for such violations, conflicts, breaches, defaults,
terminations, accelerations, losses or other such events as have not had, or
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, or violate any order, writ, judgment, injunction,
decree, statute, rule or regulation of any court or any federal, state or local
administrative agency or commission or other United States or foreign
governmental authority or instrumentality (a "Governmental Entity") applicable
to the
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Company, Olicom or Seller or by which or to which any of their properties or
assets are bound or subject ("Applicable Laws"), except for such violations as
have not had, or could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. No consent, approval, order, or
authorization of, or registration, declaration, or filing with, any Governmental
Entity is required by or with respect to the Company, Olicom or Seller in
connection with the execution and delivery of the Transaction Documents by the
Company, Olicom or Seller or the consummation of the transactions contemplated
hereby or thereby, except for applicable requirements, if any, of the Danish
securities law or the Danish Corporation law.
4.5 Financial Statements. Attached hereto as Schedule 4.5 is a copy of
the Company's audited balance sheets as of April 30, 1999, April 30, 1998 and
April 30, 1997, and the income statements for each of such 12-month periods then
ended and the Company's unaudited balance sheet as of September 30, 1999 and the
related income statement for that period then ended (collectively, the
"Financial Statements"). The Financial Statements are complete and correct, have
been prepared in accordance with Danish GAAP consistently applied and present
fairly the financial position of the Company as at their respective dates and
the profits and losses of the Company for the periods then ended. The financial
books and records of the Company have been maintained in accordance with
reasonable business practices. The information provided in the Financial
Statements as of September 30, 1999 (the "Most Recent Balance Sheet Date") was
not misleading, and since the Most Recent Balance Sheet Date no event has
occurred which has had, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. The Company has no liabilities,
contingent or otherwise, other than: (i) liabilities disclosed in the Financial
Statements; (ii) liabilities incurred since the Most Recent Balance Sheet Date
in the ordinary course of business, none of which individually or in the
aggregate are material; (iii) obligations under contracts and commitments
incurred in the ordinary course of business, which, individually or in the
aggregate, are not material to the financial condition or operating results of
the Company; and (iv) liabilities and obligations set forth on Schedule 4.5.
Since the Most Recent Balance Sheet Date, the Company has conducted its business
only in the ordinary course consistent with xxx practice.
4.6 Net Worth. Olicom and the Seller represent and warrant that as of
the date of execution of this Agreement and as of the Closing Date the Net Worth
of the Company shall be at least Three Million (3,000,000) DKK more than the Net
Worth of the Company as of April 30, 1999. At the Closing, Olicom and Seller
shall deliver to Buyer a certificate representing the foregoing.
4.7 Compliance with Applicable Laws; Licenses and Permits.
(a) The business of the Company has been conducted in compliance
with each law, ordinance, regulation, judgment, decree, injunction, rule or
order of any Governmental Entity binding on the Company or any of its properties
or assets ("Applicable Laws"), except for such failures to comply which have not
had, or could not reasonably be expected to have, a Material Adverse Effect. No
investigation or review by any Governmental Entity with respect to the Company
is pending or, to the Knowledge of Olicom or Seller, threatened. To the
Knowledge of Olicom and Seller, none of the Company, its directors and officers,
or any person acting with their knowledge, has made any payment to, or conferred
any benefit, directly or indirectly, on suppliers, customers, employees, or
agents of suppliers or customers, or officials or
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employees of any government or agency or instrumentality of any government
(domestic or foreign) or any political parties or candidates for office, which
is or was unlawful under any applicable law. The Company filed all forms,
reports, statements, and other documents required to be filed with any
Governmental Entities, except where the failure to file such forms, reports,
statements or other documents under this Section 4.7(a) would not have a
Material Adverse Effect.
(b) The Company has all licenses, permits, approvals,
authorizations and consents of all Governmental Entities and all certification
organizations required for the conduct of its businesses (as presently
conducted) and operation of its facilities. All such licenses, permits,
approvals, authorizations and consents, if any, are described in Schedule
4.7(b), and copies of such documents have been delivered to Buyer, are in full
force and effect and will not be affected or made subject to loss, limitation
or, except as set forth on Schedule 4.7(b)(i), any obligation to reapply as a
result of the transactions contemplated hereby. Except as set forth in Schedule
4.7(b) and for such incidental infractions as mentioned above, the Company
(including its operations, properties and assets) are and have been in
compliance with all such permits and licenses, approvals, authorizations and
consents.
4.8 Absence of Litigation. The Company is not a party to and there is
no claim, action, suit, inquiry, judicial or administrative proceeding,
grievance or arbitration pending, or to the Knowledge of Seller and Olicom,
threatened against the Company, any of its officers or directors or any of its
respective properties or assets by or before any arbitrator or Governmental
Entity and, to the Knowledge of Olicom and Seller, there are no facts likely to
give rise thereto. Nor to the Knowledge of Seller and Olicom are there any
investigations relating to the Company, any of its officers or directors or any
of its properties or assets pending or threatened by or before any arbitrator or
Governmental Entity. There is no judgment, decree, injunction, order,
determination, award, finding or letter of deficiency of any Governmental Entity
or arbitrator outstanding against the Company or any of its properties or assets
or to the Knowledge of Seller and Olicom, any of its officers or directors.
There is no action, suit, inquiry, judicial or administrative proceeding pending
or, to the Knowledge of Seller and Olicom, threatened against the Company,
Olicom or Seller relating to the transactions contemplated by this Agreement or
the other Transaction Documents. There are no unfunded settlements or other
settlements or letters of commitment or conciliation agreements that the Company
or any of its officers or directors has entered into with any party, including
any Governmental Entity.
4.9 Insurance Matters. Schedule 4.9(a) lists the current insurance
policies (including policies providing property, casualty, liability, and
workers' compensation coverage and bond and surety arrangements) to which the
Company is a party, a named insured, or otherwise the beneficiary of coverage.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect; (ii) the policy will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby; (iii) the Company is not in breach or default (including with respect to
the payment of premiums or the giving of notices), and no event has occurred
which, with notice or the lapse of time, would constitute such a breach or
default, or permit termination, modification or acceleration, under the policy;
and (iv) no third party to the policy has repudiated any provision thereof to
the Knowledge of Seller and Olicom. The Company is covered by insurance in scope
and amount customary and reasonable for the businesses in which
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it is or has been engaged and the business environment in which it is operating.
To Seller's and Olicom's Knowledge, they have caused the Company to deliver to
Buyer all insurance policies within the Company's or OJ's possession. Schedule
4.9(b) describes any self-insurance arrangements affecting the Company.
4.10 Title and Related Matters.
(a) The Company has, under all applicable laws, good and
marketable title to all the properties, interests in properties and assets, real
and personal, reflected in the Financial Statements or acquired after the date
of the Financial Statements (except properties, interests in properties and
assets sold or otherwise disposed of since the date of the Financial Statements
in the ordinary course of business), free and clear of all mortgages, liens,
pledges, charges or encumbrances of any kind or character, except the lien of
current taxes not yet due and payable. The equipment of the Company used in the
operation of its business is in good operating condition and repair, normal wear
and tear excepted. Schedule 4.10(a) contains a description of all real property
and personal property with a value in excess of $50,000 leased, subleased or
owned by the Company.
(b) All of the buildings, structures and appurtenances situated on
the real property, reflected in the Financial Statements or acquired after the
date of the Financial Statements, except those disposed of since the date of the
Financial Statements and the other real property leased by the Company are in
good operating condition and in a state of maintenance and repair deemed
adequate and suitable by the Company for the purposes for which such buildings,
structures and appurtenances are presently being used. With respect to each such
building, structure and appurtenance, the Company has adequate rights of ingress
and egress for operating its business in the ordinary course. To the Knowledge
of the Seller and Olicom, the Company has not received any notice that any such
building, structure or appurtenance: (i) violates any restrictive covenant or
any provision of any applicable law; or (ii) encroaches on any property owned by
others.
(c) The Company has delivered to Buyer correct and complete copies
of the leases and subleases listed in Schedule 4.10(c) (as amended to date).
With respect to each lease and sublease listed in Schedule 4.10(c):
(i) The lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) The lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms following
the Closing;
(iii) No party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification or
acceleration thereunder;
(iv) No party to the lease or sublease has repudiated any
provision thereof;
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(v) There are no disputes, oral agreements or forbearance
programs in effect as to the lease or sublease;
(vi) With respect to each sublease, the representations and
warranties set forth in subsections (i) through (v) above are true and correct
with respect to the underlying leases;
(vii) The Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust or encumbered any interest in the leasehold or
subleasehold;
(viii) All facilities leased or subleased thereunder have
received all approvals of governmental authorities (including licenses and
permits) required in connection with the operation thereof and have been
operated and maintained in accordance with applicable laws, rules and
regulations;
(ix) All facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation of said
facilities;
(x) There are no parties (other than the Company) in
possession of such leased property, other than tenants under any leases
disclosed in Schedule 4.10(c) who are in possession of space to which they are
entitled; and
(xi) There are no pending or, to the Knowledge of Seller and
Olicom threatened condemnation proceedings, lawsuits or administrative actions
relating to the properties or other matters affecting materially and adversely
the current use, occupancy, or value thereof.
4.11 Accounts Receivable. Except for the Company's accounts receivable
from Buyer and its affiliate, all accounts receivable of the Company reflected
on the Financial Statements, and as incurred in the normal course of business
since the date thereof (the "Accounts Receivable"), represent arm's length sales
actually made in the ordinary course of business; are collectible (net of the
reserve for doubtful accounts reflected on the Most Recent Balance Sheet which
shall be consistent with prior practices and in accordance with Danish GAAP) in
the ordinary course of business without the necessity of commencing legal
proceedings; are not subject to counterclaim or setoff; and are not in dispute.
The Company has previously delivered to Buyer an aged schedule of Accounts
Receivable included in the Financial Statements.
4.12 Inventory. All inventory of the Company reflected on the Financial
Statements consists of a quality and quantity useable and saleable in the
ordinary course of business and at normal profit levels; had a commercial value
at least equal to the value shown on the Financial Statements; and is valued in
accordance with Danish GAAP at the lower of average cost (on a LIFO basis); was
not slow-moving as determined in accordance with past practices; obsolete or
damaged. All inventory purchased since the date of the Financial Statements
consists of a quality and quantity useable and saleable in the ordinary course
of business.
4.13 Absence of Certain Change. Since April 30, 1999, there has not
been any adverse change in the business, financial condition, operations,
results of operations or future prospects
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of the Company. Without limiting the generality of the foregoing, except as set
forth in Schedule 4.13, since April 30, 1999:
(a) The Company has not sold, leased, transferred, assigned or
otherwise disposed of any of its assets, tangible or intangible, other than for
a fair consideration in the ordinary course of business;
(b) The Company has not entered into any agreement, contract,
lease or license (or series of related agreements, contracts, leases and
licenses) either involving more than Twenty-Five Thousand U.S. Dollars ($25,000)
or outside the ordinary course of business or other than as listed on Schedule
4.l5(c) or Schedule 4.24;
(c) No person (including the Company) has accelerated, terminated,
modified or canceled any agreement, contract, lease, or license (or series of
related agreements, contracts, teases and licenses) involving more than
Twenty-Five Thousand U.S. Dollars ($25,000) to which the Company is a party or
by which it is bound except in the ordinary course of business;
(d) The Company has not imposed any security interest upon any of
its assets, tangible or intangible;
(e) The Company has not made any capital expenditure (or series of
related capital expenditures) outside the ordinary course of business;
(f) The Company has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any other person (or
series of related capital investments, loans and acquisitions) outside the
ordinary course of business;
(g) The Company has not issued any note, bond or other debt
security or created, incurred, assumed or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either involving more than
Twenty-Five Thousand U.S. Dollars ($25,000) singly or Fifty Thousand U.S.
Dollars ($50,000) in the aggregate;
(h) The Company has not delayed or postponed the payment of
accounts payable or other liabilities outside the ordinary course of business;
(i) The Company has not canceled, compromised, waived or released
any right or claim (or series of related rights and claims) outside the ordinary
course of business;
(j) The Company has not granted any license or sublicense of any
rights under or with respect to any intellectual property except as set forth on
Schedule 4.15(c) or Schedule 4.24;
(k) The Company has not made or authorized any change in its
Articles of Association or Rules of Procedure for the Board of Directors;
(l) The Company has not issued, sold or otherwise disposed of any
of its capital stock, or granted any options, warrants or other rights to
purchase or obtain (including upon conversion, exchange or exercise) any of its
capital stock;
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(m) The Company has not declared, set aside or paid any dividend
or made any distribution with respect to its capital stock (whether in cash or
in kind) or redeemed, purchased or otherwise acquired any of its capital stock;
(n) The Company has not experienced any damage, destruction or
loss (whether or not covered by insurance) to its property in excess of Ten
Thousand U.S. Dollars ($10,000);
(o) The Company has not made any loan to, or entered into any
other transaction with, any of its affiliates, directors, officers, employees or
Olicom or any affiliate thereof outside the ordinary course of business;
(p) The Company has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement outside the ordinary course of business;
(q) The Company has not granted or agreed to make any increase in
the base compensation of any of its directors, officers and employees outside
the ordinary course of business except as specifically described in Section
8.1(j) and Section 8.1(k) below;
(r) The Company has not adopted, amended, modified or terminated
any bonus, profit-sharing, incentive, severance, or other plan, contract or
commitment for the benefit of any of its directors, officers and employees (or
taken any such action with respect to any other employee benefit plan), except
as specifically described in Section 8.1(j) and Section 8.1(k) below;
(s) The Company has not made any other change in employment terms
for any of its directors, officers or employees, or otherwise terminated any
such person and no such person has resigned from the Company, in each case,
outside the ordinary course of business;
(t) The Company has not incurred any liability to taxation (other
than in respect of trading profits arising or transactions entered into in the
ordinary course of business or except as provided for in the Financial
Statements);
(u) The Company has not made or pledged to make any charitable or
other capital contribution outside the ordinary course of business;
(v) There has not been any other occurrence, event, incident,
action, failure to act or transaction outside the ordinary course of business
involving the Company; and
(w) The Company has not committed to any of the foregoing.
4.14 Undisclosed Liabilities. The Company does not have any liability
(and there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand against any of them
giving rise to any liability), except for: (a) liabilities included in the most
recent Financial Statements including the notes thereto; and (b) liabilities
which have arisen after the Financial Statements in the ordinary course of
business (none of which results from, arises out of, relates to, is in the
nature of or was caused by any breach of
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contract, breach of warranty, tort, infringement or violation of law, all of
which are usual and normal in amount both individually and in the aggregate).
4.15 Intellectual Property.
(a) Schedule 4.15(a) lists all of the Company's foreign and United
States: (i) patents and patent applications (including provisional
applications); (ii) registered or unregistered trademarks, applications to
register trademarks, intent to use applications or other registrations related
to trademarks; (iii) registered copyrights and applications for copyright
registration; (iv) mask work registrations and applications to register mask
works; and (v) any other Intellectual Property of the Company that is the
subject of an application, certificate or registration filed with, issued by or
recorded by, any state, government or other public legal authority (and all
trade secrets and unregistered copyrights, whether or not listed on Schedule
4.15(a)) (the "Intellectual Property").
(b) Each patent, registered trademark, registered copyright and
mask work registration which is an item of Intellectual Property is valid and
subsisting, and all necessary registration, maintenance and renewal fees in
connection with such Intellectual Property have been made and all necessary
documents and certificates in connection with such Intellectual Property have
been filed with the relevant patent, copyright, trademark or other authorities
in the United States or foreign jurisdictions, as the case may be, for the
purposes of maintaining such Intellectual Property.
(c) The contracts, licenses and agreements listed on Schedule
4.15(c) include all contracts, licenses and agreements currently in effect
relating to any Intellectual Property arising from or relating to Bluetooth or
Mobile Hands Free Solutions to which the Company is a party other than: (i)
"shrink wrap" software; (ii) rights to use Intellectual Property granted by the
Company in the ordinary course of the Company's business in connection with
sales of products or services; (iii) third party software (including software
development tools) generally available to the public at a cost to the Company of
less than Twenty-Five Thousand U.S. Dollars ($25,000); and (iv) contracts,
licenses or agreements which the Company has no continuing obligations (other
than customary provisions for infringement) or for which liability is
contractually limited to less than Twenty-Five Thousand U.S. Dollars ($25,000)
(collectively, such exceptions being referred to as "Excluded Licenses").
(d) With respect to Bluetooth and Mobile Hands Free Solutions,
except as disclosed on Schedule 4.15(d), the contracts, licenses and agreements
listed on Schedule 4.15(c) are in full force and effect. Except as disclosed on
Schedule 4.15(d), the consummation of the transactions contemplated by this
Agreement will neither violate nor result in the breach, modification,
cancellation, termination or suspension of any term of any contracts, licenses
and agreements listed on Schedule 4.15(c). Except as disclosed in Schedule
4.15(d), the Company is in compliance in all material respects with and has not
breached any material term of the contracts, licenses and agreements listed on
Schedule 4.15(c) and, to the Knowledge of Seller and Olicom, all other parties
to the contracts, licenses and agreements listed on Schedule 4.15(c) are in
compliance with and have not breached any term of the contracts, licenses and
agreements. Except as disclosed in Schedule 4.15(d), following the Closing Date,
the Company will be permitted to exercise all of its rights under the contracts,
licenses and agreements listed in
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Schedule 4.15(c) without the payment of any additional amounts or consideration
other than ongoing fees, royalties or payments which the Company would otherwise
be required to pay.
(e) Except as set forth in Schedule 4.15(e) and other than
Excluded Licenses or other agreements which are not currently in effect: (i) no
Person other than the Company has any rights to use the Intellectual Property
other than immaterial rights granted from time to time in the ordinary course of
business which do not individually or in aggregate materially affect the value
of the Intellectual Property in question; and (ii) the Company has not granted
to any Person, nor authorized any Person to retain any rights or interests of
any nature in or with respect to the Intellectual Property.
(f) Except as set forth in Schedule 4.15(f): (i) the Company owns
and has good and exclusive title to each item of the Intellectual Property of
the Company listed on Schedule 4.15(a), free and clear of any encumbrance; and
(ii) the Company owns, or has the right pursuant to a valid contract, to use,
transfer, license, sublicense or operate under, all other Intellectual Property
of the Company.
(g) Except as set forth on Schedule 4.15(g), the operation of the
Company's business, to the Knowledge of Seller and Olicom, including the design,
development, manufacture and sale of its products (including with respect to
products currently under development) and provision of services, does not
infringe or misappropriate the Intellectual Property of any other person,
violate the rights of any Person (including rights to privacy or publicity) or
constitute unfair competition.
(h) In the last three (3) years, except as set forth on Schedule
4.15(h), the Company has not received notice from any Person that the operation
of the business of the Company, including its design, development, manufacture
and sale of its products (including with respect to products currently under
development) and provision of its services, infringes or misappropriates the
Intellectual Property of any person, violates the rights of any person
(including rights to privacy or publicity) or constitutes unfair competition.
(i) With respect to Bluetooth and Mobile Hands Free Solutions,
except as disclosed in Schedule 4.15(i), the Company owns or has the right to
all material Intellectual Property necessary to the conduct of the business of
the Company as it currently is conducted, including its design, development,
manufacture and sale of its products, including with respect to products
currently under development and provision of services.
(j) To the Knowledge of Olicom and Seller, the Company has
provided true and accurate copies of all contracts, licenses and agreements
between the Company and any other person, which involve the annual payment or
receipt of funds in excess of Twenty-Five Thousand U.S. Dollars $25,000) per
year, and wherein or whereby the Company has agreed to, or assumed, any
obligation or duty to indemnify, hold harmless or otherwise assume or incur any
obligation or liability with respect to the infringement by the Company or such
other person of the Intellectual Property rights of any other person; provided
that the foregoing only applies to agreements for which the Company's
obligations are continuing as of the date of this Agreement and does not apply
to contracts, licenses or agreements for which liability of the Company is
contractually limited to less than Twenty-Five Thousand U.S. Dollars ($25,000).
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(k) Except as listed on Schedule 4.15(k), there are no contracts,
licenses and agreements between the Company and any other person with respect to
the Company's Intellectual Property with respect to which the Company has
received notice of any dispute which could be reasonably considered to be a
material dispute regarding the scope of such agreement, or performance under
such agreement including with respect to any payments to be made or received by
the Company thereunder.
(l) Except as listed on Schedule 4.15(l), to the Knowledge of,
Seller and Olicom, no person is infringing or misappropriating any the
Intellectual Property.
(m) Except as listed on Schedule 4.15(m), there are no claims
asserted against the Company, or to the Knowledge of Seller and Olicom, against
any customer of the Company, related to any product or service of the Company.
(n) No Intellectual Property or product or service of the Company,
is subject to any outstanding decree, order, judgment, or stipulation
restricting in any manner the use or licensing thereof by the Company.
(o) With respect to Bluetooth and Mobile Hands Free Solutions,
except for software to the extent that it is considered proprietary information
of the Company and which is protected as such under applicable Danish law, or
except as disclosed in Schedule 4.15(o), the Company has, and enforces, a policy
requiring each contractor and third party to execute proprietary information and
confidentiality agreements previously delivered to Buyer, and all current and
former contractors and third parties of the Company have executed such an
agreement.
(p) To the Knowledge of Seller and Olicom, no: (i) product,
service or publication of the Company; (ii) material published or distributed by
the Company; or (iii) conduct or statement of the Company, violates the Danish
Markedsfocringslov or any other Danish law concerning proper business conduct.
(q) Schedule 4.15(g) lists all the Software Authors (as
hereinafter defined) with respect to Bluetooth and Mobile Hands Free Solutions
who were not employees of the Company. Each Software Author made his or her
contribution to the Bluetooth and Mobile Hands Free Solutions within the scope
of employment with the Company as an employee or independent contractor, as a
"work made for hire," and was directed by the Company to work on the Bluetooth
and Mobile Hands Free Solutions. In addition, any other Intellectual Property
created by such Software Authors with respect to Bluetooth and Mobile Hands Free
Solutions is owned by the Company.
(r) To the Knowledge of Seller and Olicom, the Company has not, by
any of its acts or omissions, or by acts or omissions of its directors,
officers, employees, agents or representatives caused any of its proprietary
rights in the Bluetooth and Mobile Hands Free Solutions, including copyrights,
trademarks, patents and trade secrets to be diminished or adversely affected to
any material extent.
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(s) Except as set forth in Schedule 4.15(s) and with respect to
(i), (ii) and (iii) as the same shall be limited to Bluetooth and Mobile Hands
Free Solutions and third party warranty claims:
(i) to the Knowledge of Seller and Olicom, there are no
defects in the Bluetooth and Mobile Hands Free Solutions, and there are no
errors in any accompanying design documentation, which defects or errors would
in any material respect affect Buyer's or its licensees' use of the Bluetooth
and Mobile Hands Free Solutions or the functioning of the Bluetooth and Mobile
Hands Free Solutions in accordance with the specification for the Bluetooth and
Mobile Hands Free Solutions published by the Company; to the Knowledge of Seller
and Olicom, the Bluetooth and Mobile Hands Free Solutions have all the material
features described in the user manuals made available to the Company's
customers;
(ii) each of the Bluetooth and Mobile Hands Free Solutions
does not contain any "back door," "time bomb," "Trojan horse," "worm," "drop
dead device," "virus" (as these terms are commonly used in the computer software
industry) or other software routines or hardware components designed to permit
unauthorized access, to disable or erase software, hardware, or data or to
perform any other similar type of functions;
(iii) each of the Bluetooth and Mobile Hands Free Solutions:
(A) shall not fail to perform any function specified in the product
specifications therefor or otherwise be adversely affected in any material
respect as a result of the date change from December 31, 1999 to January 1,
2000; and (B) to ensure Year 2000 compatibility includes, without limitation,
date data century recognition, calculations which accommodate same century and
multi-century formulas and date values, and date data interface values which
reflect the correct century,
(iv) no government funding or university or college facilities
were used in the development of the Bluetooth and Mobile Hands Free Solutions;
and the Bluetooth and Mobile Hands Free Solutions were not developed pursuant to
a contract with any Person or entity, and no situation, matter, or agreement
exists that would preclude Buyer from making any change to the Bluetooth and
Mobile Hands Free Solutions or combining either of them with other software in
any lawful manner; and
(v) except for technology supplied by third party vendors
disclosed in Schedule 4.15(r), no third party has any interest in, or right to
compensation from the Company by reason of, the use, exploitation or sale of the
Bluetooth and Mobile Hands Free Solutions, there are no restrictions on the
ability of the Company (or any successor or assignee of the Company) to use or
otherwise exploit the Bluetooth and Mobile Hands Free Solutions, and such use or
exploitation does not and will not obligate the Company (or any successor or
assign of the Company) to pay any royalty, fee or other compensation to any
person or entity; and the Company has not received any notice and does not have
any knowledge of any complaint, assertion, threat or allegation inconsistent
with the preceding statements in this paragraph.
(t) (i) No Person employed with or previously employed with the
Company has notified the Company since the day of the Company's formation
orally, in writing or in any other way, that any Person alone or together with
others has made an invention, which
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is patentable or registerable, cf. Section 6 and 7 of Executive Act no. 131 of
18 March 1986 of the Kingdom of Denmark;
(ii) Excluding the Company's Intellectual Property, no Person
employed with or previously employed with the Company has filed an application
for a patent or a utility model related to Bluetooth or Mobile Hands Free
Solutions, alone or together with others indicating to be an inventor and/or
applicant/proprietor of the rights in said application and no Person has
indicated that they intend to do so and,
(iii) No Person has registered as his or its own any other
intellectual property rights of the Company,
4.16 Taxes.
(a) The Company has properly completed and timely filed all Tax
Returns (as herein after defined) required to be filed by it and has paid all
Taxes (as herein after defined) shown thereon to be due. The Company's Financial
Statements reflect any accrued Taxes that have not been paid through the dates
thereof. The Company has no material liability for unpaid Taxes accruing after
the date of the latest Company Financial Statements, other than Taxes arising in
the ordinary course of its business. There is no material claim for Taxes that
is a lien against the property of the Company or is being asserted against the
Company. The Company has not been notified and the Seller or Olicom have no
other Knowledge that any audit of any Tax Return of the Company is being
conducted by a Tax Authority (as hereinafter defined). The Company has not been
and will, to the Knowledge of Seller and Olicom, not be required to include any
material adjustment in Taxable income for any Tax period (or portion thereof)
under any applicable Tax laws as a result of transactions, events or accounting
methods employed prior to this Agreement. The Company has not filed any
correspondence to prevent the imposition of penalties with respect to any Tax
reporting position taken on any Tax Return. The Company has in its possession
receipts for any Taxes paid to Tax authorities. There are no pending or, to the
Knowledge of Seller and Olicom, threatened actions or proceedings for the
assessment or collection of Taxes against the Company or, to the Knowledge of
Seller and Olicom, any corporation that was included in the filing of a Return
with the Company on a consolidated, combined or unitary basis with respect to
any period for which such corporation was so included. For purposes of this
Agreement, the following terms have the following meanings: "Tax" (and, with
correlative meaning, "Taxes" and "Taxable") means: (i) any net income,
alternative or add-on tax, gross income, gross receipts, sales, use, transfer,
franchise, profits, license, withholding (including social security
contributions to labour market fund), payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or any penalty, in addition
to tax or additional amount imposed by any governmental entity (a "Tax
Authority") responsible for the imposition of any such Tax (domestic or
foreign); (ii) any liability for the payment of any amounts of the type
described in (i) as a result of being a member of an affiliated, consolidated,
combined or unitary group for any Taxable period; and (iii) any liability for
the payment of any amounts of the type described in (i) or (ii) as a result of
being a transferee of or successor to any person or as a result of any express
or implied obligation to indemnify any other person. As used herein, "Tax
Return" shall mean any return, statement, report or form (including without
limitation, estimated tax returns and
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reports, withholding tax returns and reports and information reports and
returns) required to be filed with respect to Taxes.
(b) (i) Schedule 4.16(b) indicates the most recent Danish income
Tax Return for which a review has been conducted and indicates all such Danish
income Tax Returns that currently to the Knowledge of Seller and Olicom are the
subject of review; and (ii) the Company has provided Buyer with an accurate
description of any tax allocation arrangement to which the Company is a party.
4.17 Customers. Seller and Olicom do not have Knowledge that any of the
ten (10) largest customers and suppliers of the Company (based on annual sales
volume) for the last two (2) full fiscal years and the Most Recent Balance Sheet
Date will cease to do business with the Company after the consummation of the
transactions contemplated hereby in the same manner as previously conducted with
the Company. The Seller and Olicom do not have Knowledge that the Company has
received any notice of any disruption (including delayed deliveries or
allocations by suppliers) in the availability of the materials or products used
by the Company nor is any Company aware of any facts which could lead it to
believe that the business of any Company will be subject to any such disruption
which would cause a Material Adverse Effect.
4.18 Certain Business Practices and Regulations. Neither the Company
nor any of its officers, directors, stockholders, employees or agents has, on
behalf of or for the benefit of the Company: (i) established or maintained any
unrecorded fund or asset for any purpose or made any false entries on its books
and records for any reason; or (ii) made or agreed to make any contribution, or
reimbursed any political gift or contribution made by violation of any Law, In
addition, the Company has: (a) complied with all applicable Laws relation to
employee and civil rights and relating the employment opportunities; and (b)
filed in a timely manner all reports and documents required to be filed with
Governmental Entities (and the information contained therein was correct and
complete in all material respects) under such laws, except (in either case)
where the failure to so comply or file would not have a Material Adverse Effect.
4.19 Product Warranty. Each product manufactured, sold, leased,
supplied or delivered by the Company has been in conformity with all applicable
contractual commitments and all express and implied warranties and all
applicable regulations in respect thereof, and the Company does not have any
liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
the Company giving rise to any Liability) for replacement or repair thereof or
other damages in connection therewith, subject only to the reserve for product
warranty claims included in the Financial Statements and the notes thereto as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of the Company and an additional expense of up to Fifty
Thousand U.S. Dollars ($50,000) for all such contracts, commitments and
warranties relating to products and services sold or performed prior to the
Closing Date. Except as set forth on Schedule 4.19, no product manufactured,
sold, leased, supplied or delivered by the Company is subject to any guaranty,
warranty or other indemnity beyond the general terms and conditions of sale or
lease described on Schedule 4.19. Without prejudice to the above, the Company
has incurred no liability in excess of Fifty Thousand U.S. Dollars ($50,000)
(when aggregated with all other warranty claims described above) under the
Liability for Defective Products Xxx 0000 of Ireland.
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4.20 Environmental, Health and Safety Matters.
(a) The Company has at all times complied and is in compliance
with all environmental, health and safety requirements of all Governmental
Entities.
(b) Without limiting the generality of the foregoing, the Company
and its respective affiliates have obtained and complied with, and are in
compliance with, all permits, licenses and other authorizations that are
required pursuant to environmental, health and safety requirements for the
occupation of their facilities and the operation of their business. A list of
all such permits, licenses and other authorizations is set forth on Schedule
4.20.
(c) The Company has not received any written or oral notice,
report or other information regarding any actual or alleged violation of
environmental, health and safety requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations, relating to any
of them or their facilities arising under environmental, health and safety
requirements.
(d) None of the following exists at any property or facility owned
or operated by the Company: (i) underground storage tanks; (ii)
asbestos-containing material in any form or condition that might require
remediation or other corrective action under applicable law; (iii) materials or
equipment containing polychlorinated biphenyls that might require remediation or
other corrective action under applicable law; or (iv) landfills, surface
impoundments or disposal areas.
(e) The Company, its affiliates and its corporate predecessors
have not treated, stored, disposed of, arranged for or permitted the disposal
of, transported, handled or released any substance, including without limitation
an), hazardous substance, or owned or operated any property or facility (and no
such property or facility is contaminated by any such substance) in a manner
that has given or would give rise to liabilities, including any liability for
response costs, corrective action costs, personal injury, property damage,
natural resources damages or attorney fees.
(f) Neither this Agreement nor the consummation of the
transactions that are the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or consent of
Governmental Entities or third parties, pursuant to any Applicable Laws.
(g) The Company has not, either expressly or by operation of law,
assumed or undertaken any liability, including without limitation any obligation
for corrective or remedial action, of any other person relating to
environmental, health and safety requirements.
(h) No facts, events or conditions relating to the past or present
facilities, properties or operations of the Company will prevent, hinder or
limit continued compliance with environmental, health and safety requirements,
give rise to any investigatory, remedial or corrective obligations pursuant to
environmental, health and safety requirements, or give rise to any other
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise)
pursuant to environmental, health and safety requirements, including without
limitation any relating to
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onsite or offsite releases or threatened releases of hazardous materials,
substances or wastes, personal injury, property damage or natural resources
damage.
4.21 Loan Agreements. The Company is not obligated under any loan
agreement, promissory note, letter of credit or other evidence of indebtedness
as a signatory, guarantor or otherwise and there is no prohibition on repayment
or any penalty, premium or fee that would become payable upon prepayment of any
such indebtedness. The Company has not guaranteed the payment or performance of
any person, firm or corporation, or agreed to indemnify any person or act as a
surety or otherwise agreed to be continently or secondarily liable for the
obligations of any person. To the Knowledge of Seller and Olicom, no third party
is in default under any lease, contract or commitment to which the Company is a
party, nor has any event or omission occurred which, through the passage of time
or the giving of notice, or both, would constitute a default thereunder or give
rise to an automatic termination, or the right of discretionary termination,
thereof.
4.22 Burdensome or Restrictive Agreements. With respect to Bluetooth
and Mobile Hands Free Solutions, except as disclosed in Schedule 4.22, the
Company is not a party to or is not bound by any agreement requiring the Company
to assign any interest in any trade secret or proprietary information, or
prohibiting or to the Knowledge of Seller or Olicom, restricting the Company
from competing in any business or geographical area or soliciting customers or
otherwise restricting the Company from carrying on its businesses anywhere in
the world.
4.23 Bank Accounts. Seller and Olicom have provided Buyer with a
complete and accurate listing of the names and locations of all banks, trust
companies, savings and loan associations and other financial institutions at
which the Company maintains a safe deposit box. lock box or checking, savings,
custodial or other account of any nature, the type and number of each such
account and a description of any compensating balance arrangements.
4.24 Contracts. To the Knowledge of Seller, Schedule 4.24 lists all
material contracts, licenses and other Agreements to which the Company is a
party (collectively, "agreements").
(a) The Company has delivered to Buyer a correct and complete copy
of each written agreement listed in Schedule 4.24 (as amended to date) and a
written summary setting forth the terms and conditions of each oral agreement
referred to in Schedule 4.24.
(b) With respect to each such agreement other than the
____________ Agreement (as described below):
(i) the agreement is legal, valid, binding, enforceable and in
full force and effect,
(ii) the agreement will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following the
consummation of the Agreement;
(iii) no party is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach or
default,
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(iv) except at the option of either party or upon expiration,
as provided in any agreement, no party may terminate, modify or accelerate any
agreement; and
(v) no party has repudiated any provision of the agreement.
(c)
(i)
(ii)
(iii)
(iv)
(v)
4.25 Employee Benefit Matters.
(a) Copies of all material and general employee benefit plans and
arrangements have been delivered to Buyer.
(b) Each loan to non-officer employee, consultant, executive
officer or director, and any stock option, stock purchase, phantom stock, stock
appreciation right, supplemental retirement, severance, surplus sabbatical,
employees relocation, dental, vision care, disability, employee relocation or
dependent care, life insurance or accident insurance plans, programs or other
arrangements have been delivered to Buyer.
(c) All bonus, Company paid pension, profit sharing, savings,
deferred compensation or incentive plans (including stock incentive plans),
programs or arrangements have been delivered to Buyer.
(d) All other fringe or employee benefit plans, programs or
arrangements that apply to executive officers of the Company and that do not
generally apply to all employees have been delivered to Buyer in the form of the
executive officers' employment contract.
(e) Any current employment or executive compensation or severance
agreements, written or otherwise, relating to any present employee, consultant
or executive
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officer of the Company and a list of all employees and executive officers are
set forth in Schedule 4.25(c), and there are no claims or unfulfilled severance
or compensation agreement towards former employees or consultants of the
Company.
(f) None of the Employment Contracts promises or provides retiree
medical or other retiree welfare benefits to any person, except as required by
applicable law.
(g) With respect to the laws of Ireland:
(i) There are no subsisting contracts of service to which the
Subsidiary is a party which are not terminable without giving rise to any claim
for damages or compensation or other redress (other than a statutory redundancy
payment or compensation for unfair dismissal under the Unfair Dismissals Xxx
0000 to 1993) by twelve weeks notice or less. And there are no claims whatsoever
against the Subsidiary arising out of any contract of service to which the
Subsidiary was a party.
(ii) The Subsidiary is not and has never been liable to make
any payment to any person under the Redundancy Payments Acts 1967 to 1991 or
pursuant to the Protection of Employees (Employers Insolvency) Acts 1984 to
1991.
(iii) No employment regulation order affecting the terms of
employment of any employees or former employees of the Subsidiary has been made
by the Labour Court under the Industrial Relations Acts 1946 to 1990.
(iv) The Subsidiary has not entered into any recognition
agreement with a trade union nor has it done any act which might be construed as
recognition.
4.26 Affiliate Relationships and Conflicts of Interest. There are no
contracts or other arrangements involving the Company (or any firm or entity
with which the Company has a business relationship) in which any of the
Company's officers, directors, stockholders or affiliates, or any member of
their respective immediate families, have a financial interest, including
indebtedness owed to the Company or by the Company. To the Knowledge of Seller
and Olicom, none of the officers or directors of the Company, or any members of
their immediate families, have any direct or indirect ownership interest in any
firm or corporation which competes with the Company, except that officers and
directors of the Company may own less than one percent (1%) of the outstanding
capital stock of publicly traded companies which may compete with the Company.
The Company is not a guarantor or Indemnitor of any indebtedness of any other
person, firm or corporation.
4.27 Status of Shares. The sale of the Shares has been duly authorized
by all necessary corporate action on the part of the Seller. The Shares, when
delivered to Buyer at the Closing in exchange for the Purchase Price (less any
portion of the Escrow Amount), all as described herein, will be validly issued,
fully paid and non-assessable. The sale of the Shares is not, and will not be,
subject to any preemptive rights or any rights of first refusal of any other
holder of capital stock of the Company except as set forth in Schedule 4.27, and
will be free from any restrictions on transfer, except for restrictions on
transfer imposed by the Shareholders' Agreement. Upon the sale and delivery of
the Shares to Buyer at Closing, the Shares will
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represent at least 66.85% of the outstanding capital stock of the Company, on a
fully-diluted basis.
4.28 Year 2000 Compliance. All of the property, equipment or assets
owned or utilized by the Company, including but not limited to computer
software, databases, hardware, controls and peripherals, will, on or prior to
December 31, 1999: (i) perform in all material respects in accordance with their
specification and documentation regardless of which century or century dates are
encountered in the use of such equipment or software; (ii) accurately and
correctly manage and manipulate data in accordance with their intended use
involving all dates, whether single century or multi-century, regardless of the
format in which such dates are expressed; and (iii) not require any repair,
rewrite, conversion or other adaptation with an expense paid or incurred by
Buyer because of or due in any way to the use of century dates. The Company has
taken adequate steps to verify that all computer hardware and software of the
Company's suppliers, customers and other persons or entities whose internal
computer failures may reasonably be expected to have a Material Adverse Effect
on the Company, will comply with the representations and warranties stated in
this Section on or prior to December 31, 1999.
4.29 Books and Records. All the books and records of the Company are
true, correct and complete in all material respects, have been maintained in
accordance with good business practice and in accordance with all laws,
regulations and other requirements applicable to the Company and its operations
and accurately reflect the basis for the financial condition and results of
operations set forth in the Financial Statements.
4.30 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company.
4.31 Private Offering. Assuming the accuracy of the representations and
warranties of Buyer contained in Article 5 hereof, the offer and sale of the
Shares in accordance with the terms of this Agreement, have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable securities
laws.
4.32 Brokers or Finders. Neither the Company nor the Buyer have
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 the other Transaction Documents or any
transaction contemplated hereby or thereby with respect to fees, commissions or
charges to any broker or finder engaged by or on behalf of Seller or Olicom.
4.33 Disclosure. No representation or warranty by Olicom or the Seller
contained in this Agreement or in any certificate furnished pursuant to this
Agreement contains any untrue statement of a material fact, or omits to state
any material fact necessary, in light of the circumstances under which it is
made, in order to make the statements herein or therein not misleading.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Seller and Olicom as follows (with
the understanding that the Seller and Olicom are relying on such representations
and warranties in entering into and performing this Agreement):
5.1 Organization, Standing and Power. Buyer is a corporation duty
organized, validly existing and in good standing under the laws of Delaware and
has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
5.2 Authority. Buyer has all requisite corporate power and authority to
enter into this Agreement and the other Transaction Documents to which Buyer is
to be a party and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by Buyer of this Agreement and the other
Transaction Documents to which Buyer is to be a party and the consummation by
Buyer of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly executed and delivered and constitutes, and when duly
executed and delivered by Buyer the other Transaction Documents to which Buyer
is to be a party will constitute, the valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5.3 No Conflicts. The execution and delivery of this Agreement and the
other Transaction Documents to which Buyer is to be a party does not, and the
consummation of the transactions contemplated hereby and thereby and compliance
with the provisions hereof and thereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any material obligation or to a loss of a material benefit under, any provision
of any loan or credit agreement, note, bond, mortgage, indenture, lease, or
other agreement, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Buyer
or its properties or assets, except for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which individually or in
the aggregate do not have a material adverse effect on Buyer's ability to
perform its obligations hereunder.
5.4 Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Buyer in connection with the execution and delivery by Buyer
of this Agreement and the other Transaction Documents to which Buyer is to be a
party or the consummation by it of the transactions contemplated hereby, except
for applicable requirements, if any, of the Securities Act and the rules and
regulations thereunder and state securities or blue sky laws.
5.5 Litigation. As of the date hereof, there is no action, suit,
inquiry, judicial or administrative proceeding pending or, to the knowledge of
Buyer, threatened against the Buyer relating to the transactions contemplated by
this Agreement or by the other Transaction Documents.
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5.6 Brokers or Finders. Neither Seller nor Olicom will incur, directly
or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or the
other Transaction Documents or any transaction contemplated hereby or thereby
with respect to fees, commissions or charges to any broker or finder engaged by
or on behalf of Buyer.
ARTICLE 6
PRE-CLOSING COVENANTS
The parties to this Agreement agree as follows with respect to the
period between the execution of this Agreement and the Closing.
6.1 General. Each of the parties will use its reasonable best efforts
to take all action and to do all things necessary, proper or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Article 8 below).
6.2 Notices and Consents. The Seller shall cause the Company to give
ally notices to third parties, and will use commercially reasonable efforts to
obtain any third party consents that are necessary to vest all rights, title and
interest of the Company or that Buyer may reasonably request in connection with
the matters referred to herein. The Seller shall cause the Company to give any
notices to, make any filings with and use commercially reasonable efforts to
obtain any authorizations, consents and approvals of Government Entities
necessary or desirable in connection with the matters referred to herein.
6.3 Operation of Business. The Seller shall not permit the Company to
engage in any practice, take any action or enter into any transaction outside
the ordinary course of business. Without limiting the generality of the
foregoing, the Seller shall use reasonable efforts not to permit the Company to:
(a) enter into any material contract or transaction outside the ordinary course
of business; (b) lease, mortgage or encumber or otherwise grant any interest in
any of its assets or properties or any contract with an affiliate; (c) sell,
license or otherwise dispose of any assets of the Company having a value greater
than Twenty-Five Thousand U.S. Dollars ($25,000) or an aggregate book value
greater than Twenty-Five Thousand U.S. Dollars ($25,000) (other than any such
disposition which is in the ordinary course of business); (d) issue any capital
stock or grant any additional options, warrants or rights to acquire any capital
stock of the Company; (e) take any action to declare or pay a dividend or other
distribution upon or redeem or purchase any shares of capital stock of the
Company, or change or affect the voting powers, designations, preferences,
rights, qualifications, limitations or restrictions of any class or series of
capital stock of the Company; (f) propose or adopt any amendments to the
Company's Articles of Association and Rules of Procedure or any other governing
document; (g) enter into any employment, termination or severance pay agreement
with any director, officer, consultant or employee; (h) waive any rights or
forgive or cancel any debts or claims of value; or (i) maintain the Company's
books or records other than in the ordinary course,
6.4 Preservation of Business. Seller will use reasonable efforts to
cause the Company to keep its business and properties substantially intact,
including its present operations, physical
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facilities, working conditions and relationships with lessors, licensors,
suppliers, customers and employees.
6.5 Full Access. Seller will permit representatives of Buyer to have
full access to the Company upon reasonable notice and during normal working
hours to all premises, properties, personnel, books, records (including tax
records), contracts and documents of or pertaining to the Company. The Company
will cause its accountants to cooperate with Buyer and its agents in making
available all financial information requested.
6.6 Notice of Developments. Seller will give prompt written notice to
Buyer of: (a) any material adverse development which would render any
representation or warranty of Seller or Olicom in this Agreement, if made on or
as of the date of such event, untrue or inaccurate in any material respect; and
(b) any material adverse effect with respect to the Company. No disclosure by
any party pursuant to this Section 6.6, however, shall be deemed to amend or
supplement the schedules of disclosure or to prevent or cure any
misrepresentation. breach of warranty or breach of covenant.
6.7 Publicity. No party hereto shall make any news release or any other
public disclosure (including disclosure to public officials) pertaining to this
Agreement or the transactions contemplated hereunder without the prior approval
of the other parties hereto, which approval shall not be unreasonably withheld;
provided that Buyer and Olicom may, if considered necessary by its counsel to
fulfill their obligations as publicly traded corporations, respond to inquiries
and make such releases as they consider appropriate upon giving the other
parties hereto such notice as is reasonable in the circumstances.
6.8 Exclusivity. Between the date hereof and the date this Agreement is
terminated pursuant to Article 11 hereof, Seller and Olicom shall not, directly
or indirectly, through any officer, director, employee, representative or
otherwise, solicit, or entertain offers from, negotiate with, or in any manner
encourage, discuss, accept or consider any acquisition proposal of any person or
entity, other than Buyer. Seller and Olicom will promptly notify Buyer regarding
any contact between Seller and one of its respective officers, directors,
employees or representatives and any other person regarding any acquisition
proposal.
ARTICLE 7
POST-CLOSING COVENANTS
The parties hereto agree as follows with respect to the period
following the Closing:
7.1 General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the parties hereto will take such further action (including the execution and
delivery of such further instruments and documents) as any other party
reasonably may request, all at the sole cost and expense of the requesting party
(unless the requesting party is entitled to indemnification therefor under
Article 9 below).
7.2 Litigation Support. In the event and for so long as any party is
actively contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with: (a) any
transaction contemplated under this Agreement; or (b) any
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fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date involving the Company, each of the other parties hereto will
cooperate with it and its counsel in the contest or defense, make available
their personnel, and provide such testimony and access to their books and
records as shall be necessary in connection with the contest or defense, all at
the sole cost and expense of the contesting or defending party (unless the
contesting or defending party is entitled to indemnification therefor under
Article 9 below).
7.3 Transition. The Seller will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier or other business associate of the Company from maintaining the same
business relationships with the Company after the Closing as it maintained with
the Company prior to the Closing.
7.4 Confidentiality. Olicom, Seller and Buyer will comply with the
terms of the Confidentiality Undertaking described in Section 14.7. In addition,
Olicom, Seller and the Company will treat and hold as such all of the
confidential information, refrain from using any of the confidential information
except in connection with this Agreement, and deliver promptly to Buyer or
destroy, at the request and option of Buyer, all tangible embodiments (and all
copies) of the confidential information which are in its possession. In the
event that Seller is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand or similar process) to disclose any confidential
information, it will notify Buyer promptly of the request or requirement so that
Buyer may seek an appropriate protective order or waive compliance with the
provisions of this Section 7.4. If, in the absence of a protective order or the
receipt of a waiver hereunder, the Seller or Olicom is, on the advice of
counsel, compelled to disclose any confidential information to any tribunal or
else stand liable for contempt, it may disclose the confidential information to
the tribunal; provided, however, that the disclosing part), shall use its best
efforts to obtain, at the reasonable request the other party, an order or other
assurance that confidential treatment will be accorded to such portion of the
confidential information required to be disclosed as Buyer shall designate. The
foregoing provisions shall not apply to any confidential information that is
generally available to the public immediately prior to the time of disclosure.
7.5
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ARTICLE 8
CLOSING CONDITIONS
8.1 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
are subject to satisfaction of the following conditions:
(a) Representations True at Closing. The representations and
warranties set forth in Article 4 above shall be true and correct in all
material respects at and as of the Closing Date;
(b) Covenants Performed. Each of Olicom and Seller shall have
performed or caused the Company to perform and complied with all of their
covenants hereunder in all material respects through the Closing;
(c) Third Party Consents. Seller shall have caused the Company to
have procured all of the third party consents specified in Section 4.4 (except
the _________ Agreement) above;
(d) No Litigation. No action, suit, or proceeding shall be pending
or threatened before any court or quasi judicial or administrative agency of any
federal, state, local, provincial or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would: (i) prevent consummation of any of the transactions
contemplated by this Agreement; (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation; (iii) affect adversely
the right of Buyer to own the Shares and to control the Company; or (iv) affect
adversely the right of the Company to own its assets and to operate its
businesses (and no such injunction, judgment, order, decree, ruling or charge
shall be in effect);
(e) Material Adverse Effect. Since the execution of this Agreement,
no Material Adverse Effect on the Company shall have occurred;
(f) Closing Certificate. Each of Seller and Olicom shall have
delivered to Buyer a certificate to the effect that each of the conditions
specified above in Section 8.1 (a)-(e) is satisfied in all respects;
(g) Put and Call Option Agreement. The Buyer and OJ shall have
entered into a Put and Call Option Agreement on terms and conditions
satisfactory to Buyer;
(h) Resignations of Directors. Buyer shall have received the
resignations, effective as of the Closing, of each director of Digianswer other
than Xxx Xxxxxx;
(i) Delivery of Certificates. Seller will surrender to Buyer at the
Closing any and all original certificates representing the Shares duly endorsed
in blank or with appropriate assignments separate from certificate;
(j) Agreements of Employment. Each of the employees set forth on
Schedule 8.1(j) shall have entered into an agreement of employment with the
Company in form and substance acceptable to Buyer;
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(k) Contract of Employment with OJ. Buyer and OJ shall have entered
into a Contract of Employment on terms and conditions satisfactory to Buyer;
(l) Transfer of Title. Seller and Olicom shall procure that the
Company has, good and marketable title, free from Liens to the properties it
occupies;
(m) Shareholders' Agreement. Buyer and OJ shall have entered into a
Shareholders' Agreement, all on terms and conditions satisfactory to Buyer;
(n) Termination of Right. OJ and Olicom, shall have each terminated
all rights under each of the Shareholders' Agreement, dated June 17, 1999,
between OJ and Seller and the Put and Call Option Agreement, dated June 15,
1999, between OJ, Seller and Olicom;
(o) Intellectual Property and Technology License Agreement. Buyer
and the Company shall have entered into an Intellectual Property and Technology
License Agreement and other documents related thereto on terms and conditions
satisfactory to Buyer related to the "Bluetooth" technology;
(p) Director Approval. Seller's and Olicom's board of directors
shall have approved this Agreement and the transactions contemplated thereby and
in the Transaction Documents; and
(q) General Satisfaction of Closing Conditions. All actions to be
taken by the Seller and the Company in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments and
other documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Buyer.
8.2 Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(a) Representations True at Closing. The representations and
warranties set forth in Article 5 above shall be true and correct in all
material respects at and as of the Closing Date;
(b) Performance of Covenants. Buyer shall have performed and
complied with all of its covenants hereunder in all material respects through
the Closing;
(c) No Litigation. No action, suit, or proceeding shall be pending
or threatened before any court or quasi judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling or charge would: (i)
prevent consummation of any of the transactions contemplated by this Agreement;
or (ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
decree, ruling or charge shall be in effect);
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(d) Closing Certificate. Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above in Section
8.2(a)-(c) has been satisfied; and
(e) General Satisfaction of Closing Conditions. All actions to be
taken by Buyer in connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to the Seller.
ARTICLE 9
REMEDIES FOR BREACHES OF THIS AGREEMENT
9.1 Survival of Representations and Warranties. All of the
representations and warranties and agreements of the parties contained in this
Agreement (including, without limitation, the representations and warranties of
the Seller and Olicom contained in Article 4 above and the indemnification
obligations of the parties set forth in Sections 9.2 and 9.3 below) shall
survive the Closing and continue in full force and effect for a period of two
(2) years thereafter (even if the damaged party knew or had reason to know of
any misrepresentation or breach of warranty at the time of the Closing) (except
to the extent that any such agreement is limited by its terms to a different
period and except to the extent a claim for indemnity is then pending). The
foregoing sentence notwithstanding, any liability which results: (a) from any
liability of Buyer or its subsidiaries, Buyer's successors or assigns to any
taxing authorities which will survive the Closing as provided in (b) below; (b)
under Section 4.1 (organization), Section 4.2 (capitalization), Section 4.10
(title to assets), Section 4.16 (taxes), Section 4.20 (environmental) and
Section 4.27 (status of shares) of Article 4, will survive the Closing for the
applicable statute of limitations (including any extensions or waivers thereof);
(c) from a breach of any covenant or agreement, will survive the Closing for the
term of such covenant or agreement; or (d) from fraud on the part of the other
party, for which indemnity would otherwise be available under Section 9.2 may be
asserted at any time subject to the other provisions of Article 9. The
representations, warranties, covenants and obligations of the Seller and the
rights and remedies of Buyer shall not be limited or otherwise affected by or as
a result of any information furnished to, or any investigation made by or
knowledge of Buyer or any of its representatives.
9.2 Indemnification Provisions for Benefit of Buyer and the Company.
(a) In the event Seller or Olicom breach (or in the event any third
party alleges facts that, if true, would mean either Seller or Olicom has
breached) any of its representations, warranties and covenants contained herein
(including without limitation the representations and warranties set forth in
Article 4 and the covenants set forth in Articles 6 and 7) and, provided that
Buyer makes a written claim for indemnification against Seller or Olicom
pursuant to Section 9.5 below within the survival period set forth in Section
9.1, then each of Seller or Olicom shall jointly and severally indemnify Buyer
from and against 66.85% of the entirety of any Adverse Consequences that Buyer
may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences Buyer may suffer after the end
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of the survival period) resulting from, arising out of, relating to, in the
nature of or caused by the breach (or the alleged breach).
(b) In addition, Seller and Olicom shall jointly and severally
indemnify Buyer from and against 66.85% of the entirety of any Adverse
Consequences Buyer may suffer resulting from, arising out of, relating to, in
the nature of or caused by any liability of the Company for any current or past
indebtedness, penalties or other obligations in connection with any of the
Company's borrowings from the Business Development Finance (Vaekstfonden),
9.3 Indemnification Provisions for Benefit of Setter and Olicom. In the
event Buyer breaches (or in the event any third party alleges facts that, if
true, would mean Buyer has breached) any of its representations, warranties and
covenants contained herein, and provided that Seller or Olicom makes a written
claim for indemnification against Buyer pursuant to Section 9.5 below within the
survival period set forth in Section 9.1, then Buyer agrees to indemnify the
Seller and Olicom from and against the entirety of any Adverse Consequences
Seller or Olicom may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences Seller or Olicom may suffer
after the end of ally applicable survival period) resulting from, arising out
of, relating to, in the nature of or caused by the breach (or the alleged
breach).
9.4 Matters Involving Third Parties.
(a) If any third party shall notify any party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against any other party (the "Indemnifying
Party") under this Article 9, then the Indemnified Party shall promptly notify
each Indemnifying Party thereof in writing; provided, however, that no delay an
the part of the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as: (i) the
Indemnifying Party notifies the Indemnified Party in writing within thirty (30)
days after the Indemnified Party has given notice of the Third Party Claim that
the Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of or caused by the Third Party
Claim; (ii) the Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim and fulfill
its indemnification obligations hereunder; (iii) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable relief;
(iv) settlement of, or all adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice adverse to the continuing business
interests of the Indemnified Party; and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
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(c) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 9.4(b) above: (i) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim; (ii) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be unreasonably withheld); and (iii) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be unreasonably withheld).
(d) In the event any of the conditions in Section 9.4(b) above is
or becomes unsatisfied, however: (i) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith); (ii) the
Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
reasonable attorneys' fees and expenses); and (iii) the Indemnifying Parties
will remain responsible for any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of or caused
by the Third Party Claim to the fullest extent provided in this Article 9.
9.5 Determination of Adverse Consequences and Claims Process.
(a) All Adverse Consequences hereunder shall be payable in U.S.
Dollars.
(b) In the event that Buyer shall have incurred any Adverse
Consequences for which it wishes to seek adjustment to the Escrow Amount
pursuant to this Section 9.5, Buyer shall deliver to the Seller an officer's
certificate: (i) stating that Buyer has paid or properly accrued or reasonably
anticipates that it will have to pay or accrue Adverse Consequences, (ii)
specifying in reasonable detail the individual items of Adverse Consequences
included in the amount so stated, the date each such item was paid or properly
accrued or the basis for such anticipated liability, and the nature of the
misrepresentation, breach of warranty or covenant or other adjustment to the
Escrow Amount to which such item is related; and (iii) indicating that Buyer is
seeking adjustment to the Escrow Amount under this Article 9.
(c) In the event that Buyer has elected to pursue an adjustment to
the Escrow Amount under this Article 9, the Escrow Amount shall be reduced by
the amount stated in the officer's certificate unless Seller contests such
claim.
9.6 Damage Claim Amounts.
(a)
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(i)
(ii)
(b)
(c)
(d)
(e)
9.7
9.8
ARTICLE 10
CLOSING DELIVERIES
10.1 Olicom and Seller Deliveries. At the Closing, Olicom and Seller
shall cause the Company to deliver to Buyer the following:
(a) [Intentionally Reserved];
(b) Agreements of Employment. At the Closing, the Company and the
individuals listed on Schedule 8.1(j) shall execute, deliver and enter into the
Agreements of Employment referenced in Section 8.1(j);
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(c) Contract of Employment. At the Closing, the Company and OJ
shall execute, deliver and enter into the Contract of Employment referenced in
Section 8.1(j).
(d) September 30, 1999 Balance Sheet. Seller shall have delivered
the Most Recent Financial Statements three (3) days prior to the Closing Date;
(e) Third Party Consents. All third party consents referenced in
Section 8.1(c).
(f) Certificate. The certificate referenced in Section 8.1(f);
(g) Resignation. Resignations referenced in Section 8.1(h);
(h) Shares. The Certificates for the Shares; and
(i) Other. Such other documents, certificates and instruments as
listed on the closing agenda delivered to Seller and Olicom as of date of
execution of this Agreement (the "Closing Agenda").
10.2 Buyer Deliveries. At the Closing, Buyer shall deliver the
following to Seller:
(a) Purchase Price. The Purchase Price (less the Escrow Amount);
(b) Certificate. The Certificate referenced in Section 8.2(d); and
(c) Other. Such other documents, certificates and instruments as
listed on the Closing Agenda.
ARTICLE 11
TERMINATION
11.1 Termination of Agreement. This Agreement may not be terminated by
the parties except as provided below:
(a) Buyer and Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(b) Buyer may terminate this Agreement by giving written notice to
Seller at any time prior to the Closing: (i) in the event Seller has breached
any representation, warranty or covenant contained in this Agreement in any
material respect, Buyer has notified Seller of the breach, and the breach has
continued without cure for a period of thirty (30) days after the notice of
breach; or (ii) if the Closing shall not have occurred ten (10) days after the
date of this Agreement, by reason of the failure of any condition precedent
under Section 8.1 hereof (unless the failure results primarily from Buyer itself
breaching any representation, warranty or covenant contained in this Agreement),
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(c) Seller may terminate this Agreement by giving written notice
to Buyer at any time prior to the Closing: (i) in the event Buyer has breached
any representation, warranty or covenant contained in this Agreement in any
material respect, Seller has notified Buyer of the breach, and the breach has
continued without cure for a period of thirty (30) days after the notice of
breach; or (ii) if the Closing shall not have occurred ten (10) days after the
date of this Agreement, by reason of the failure of any condition precedent
under Section 8.2 hereof (unless the failure results primarily from any of
Seller itself breaching any representation, warranty or covenant contained in
this Agreement); and
(d) By either Buyer or Seller if any governmental entity shall
have issued an order, injunction, decree or ruling or taken any other action
permanently or temporarily restraining or otherwise prohibiting the transactions
contemplated hereby, which shall have become final and non-appealable.
11.2 Effect of Termination. If any party terminates this Agreement
pursuant to Section 11.1 above, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to any other party
(except for any liability of any party then in breach); provided, however, that
notwithstanding anything to the contrary in this Agreement or otherwise, the
provisions of Section 7.4 of the Agreement shall survive any termination of this
Agreement.
11.3 Certain Effects of Termination. In the event of the termination of
this Agreement by either Buyer or Seller as provided in Section 11.1 hereof,
each party, if so requested by the other party, will: (i) return promptly every
document (other than documents publicly available and other than one copy
thereof to be retained by counsel for such party) furnished to it by the other
party (or any subsidiary, division, associate or affiliate of such other party)
in connection with the transactions contemplated hereby, whether so obtained
before or after the execution of this Agreement, and any copies thereof which
may have been made, and will cause its representatives and any representatives
of financial institutions and investors and others to whom such documents were
furnished promptly to return such documents and any copies thereof any of them
may have made; or (ii) destroy such documents and cause its representatives and
such other representatives to destroy such documents, and such party shall
deliver a certificate executed by its president or vice president stating to
such effect.
ARTICLE 12
TAX COVENANTS
12.1 Cooperation on Tax Matters.
(a) The Company, Buyer and Seller shall cooperate fully, as and to
the extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.
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(b) Buyer and Seller further agree, upon request, to use their
reasonable efforts to obtain any certificate or other document from any
governmental authority or any other person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).
(c) Buyer and Seller further agree, upon request, to provide the
other party with all information that either party may be required to report
pursuant to Section 6043 of the Code and all Treasury Department Regulations
promulgated thereunder and relevant Danish tax statutory law.
ARTICLE 13
DISPUTES
13.1 Amicable Resolution. The parties mutually desire that friendly
collaboration will develop between themselves. Accordingly, they shall try to
resolve in a friendly manner all disagreements and misunderstandings connected
with their respective rights and obligations under this Agreement, including any
amendments hereof.
13.2 Mediation and Alternative Dispute Resolution.
(a) Excluding Intellectual Property disputes which must be brought
before a court of competent jurisdiction, to the extent that any
misunderstanding or dispute cannot be resolved agreeably in a friendly manner,
the dispute will be mediated by a mutually acceptable mediator to be chosen by
Buyer and Seller within forty-five (45) days after written notice by one of the
parties demanding mediation. Neither party may unreasonably withhold consent to
the selection of a mediator, however, by mutual agreement Buyer and Seller may
postpone mediation until each has completed specified but limited discovery with
respect to a dispute. The parties may also agree to attempt some other form of
alternative dispute resolution ("ADR") in lieu of mediation, including by way of
example and without limitation neutral fact-finding or a mini-trial.
(b) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six (6) months of the date of
the initial demand for it by one of the parties may then be submitted to the
courts for resolution. The use of any ADR procedures will not be construed under
the doctrines of laches, waiver or estoppel to affect adversely the rights of
either party. Nothing in this Article 13 will prevent either party from
resorting to judicial proceedings if: (i) good faith efforts to resolve the
dispute under these procedures have been unsuccessful; or (ii) interim relief
from a court is necessary to prevent serious and irreparable injury to one party
or to others.
13.3 Costs. Each of the parties shall bear its costs of mediation, but
Buyer and Seller agree to share the costs of the mediator equally.
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ARTICLE 14
MISCELLANEOUS
14.1 Expenses and Obligations. Except as otherwise expressly provided
in this Agreement or as provided by law, all costs and expenses incurred by the
parties hereto in connection with the transactions contemplated in this
Agreement or in the other Transaction Documents shall be borne solely and
entirely by the party which has incurred such expenses.
14.2 Expenses to be Paid by Seller. The Seller and Olicom shall pay,
and shall indemnify, defend and hold the Buyer and the Company harmless from and
against, each of the following:
(a) Transfer Taxes. Any sales, use, excise, transfer or other
similar tax imposed by Irish and Danish authorities with respect to the
transactions provided for in this Agreement, and any interest or penalties
related thereto.
(b) Professional Fees. All fees and expenses of the Seller's and
Olicom's legal, accounting, investment banking and other professional counsel in
connection with the transactions contemplated hereby.
14.3 Parties in Interest. This Agreement shall be binding upon and,
except as provided below, inure solely to the benefit of each party hereto and
their successors and assigns, and nothing in this Agreement, except as set forth
below, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
14.4 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given: (i) when delivered,
if delivered in person or by commercial messenger service; or (ii) two days
following deposit with a recognized overnight courier service, provided that
such deposit occurs prior to such deadline as has been imposed by such service
for overnight delivery; or (iii) when transmitted, if sent by telefacsimile
copy, provided confirmation of receipt is received by the sender, in each case
provided that such communication is addressed to the intended recipient thereof
as set forth below:
If to Buyer, to: Motorola, Inc.
0000 X. Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. XxXxxxxx, Esq.
Facsimile: (000) 000-0000
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If to Seller, to: Olicom Ventures A/S
Nybrovej 110
XX-0000 Xxxxxx
Xxxxxxx
with a copy to:
Olicom A/S
Nybrovej 110
XX-0000 Xxxxxx
Xxxxxxx
Attn: CEO
Facsimile: 45 45 27 01 80
Any party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other parties notice in the manner herein set forth.
14.5 Interpretation. All references in this Agreement to Exhibits,
Schedules, Articles, Sections, subsections and other subdivisions refer to the
corresponding Exhibits, Schedules, Articles, Sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any Articles, Sections, subsections or other
subdivision of this Agreement are for convenience only, do not constitute any
part of such Articles, Sections, subsections or other subdivisions, and shall be
disregarded in construing the language contained therein. The words "this
Agreement," "herein," "hereby," "hereunder," and "hereof" and words of similar
import, refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The words "this Section" and "this subsection" and
words of similar import, refer only to the Sections or subsections hereof in
which such words occur. The word "or" is not exclusive, and the word "including"
(in its various forms) means "including without limitation." Pronouns in
masculine, feminine or neuter genders shall be construed to state and include
any other gender and words, terms and titles (including terms defined herein) in
the singular form shall be construed to include the plural and vice versa,
unless the context otherwise expressly requires. Unless the context otherwise
requires, all defined terms contained herein shall include the singular and
plural and the conjunctive and disjunctive forms of such defined terms. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Unless indicated otherwise in this Agreement, all dollar amounts
shall be in United States Dollars.
14.6 Counterparts and Facsimile Signatures. This Agreement may be
executed and delivered (including by facsimile transmission) in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being
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understood that all parties need not sign the same counterpart. Notwithstanding
the laws of any jurisdiction in which this Agreement is executed or delivered, a
facsimile signature shall for all purposes be deemed an original and shall bind
the xxxxxx as if such facsimile were an original. Each party hereto undertakes
to deliver to each of the other parties hereto original copies of any facsimile
signature by overnight courier to the addresses set forth in Section 14.4 above.
14.7 Entire Agreement. This Agreement (which term shall be deemed to
include the Exhibits and Schedules hereto and the other certificates, documents
and instruments delivered hereunder) constitutes the entire agreement of the
parties hereto and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
other than the Confidentiality Undertaking between Buyer, Olicom and OJ dated
July 9, 1999, including but not limited to the Letter of Intent and Exclusivity
Agreement by Seller, Enskilda Securities and OJ dated September 3, 1999. There
are no representations or warranties, agreements or covenants relating to the
matters contemplated in this Agreement and in the other Transaction Documents
other than those expressly set forth in this Agreement and the other Transaction
Documents.
14.8 WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON-CONENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 14.8. EACH OF THE PARTIES
HERETO WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. EACH OF THE PARTIES HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICT OF LAW PRINCIPLES. ANY SUIT OR PROCEEDING BROUGHT HEREUNDER SHALL BE
SUBJECT TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN NEW YORK.
14.10 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by Seller or Buyer, whether
by operation of law or otherwise, without the prior written consent of Buyer.
Buyer may assign this Agreement to an "affiliate," as defined in the Securities
Act of 1933, as amended.
14.11 Further Assurances. From time to time following the Closing, the
parties hereto shall execute and deliver such other instruments of assignment,
transfer and delivery and shall take such other actions as the other reasonably
may request in order to consummate, complete and carry out the transactions
contemplated by this Agreement.
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14.12 Certain Definitions. For purposes of this Agreement, the term:
(a) "Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, Taxes, liens, losses,
expenses and fees, including court costs and reasonable attorneys' fees and
expenses,
(b) "Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction that forms or could form the
basis for any specified consequence.
(c) "Bluetooth" means all hardware, Software, other technology or
any combination thereof in or relating to the "Bluetooth" industry standard as
the same may be enhanced, supplemented or modified from time to time and such
other hardware Software or technology used or useful in connection therewith.
(d) "Company Intellectual Property" shall mean any Intellectual
Property that is owned by or exclusively licensed the Company.
(e) "Mobile Hands Free Solutions" means all technology, hardware,
Software and other technology generally referenced by the company as Mobile
Hands Free Solutions.
(f) "Knowledge of Seller and Olicom" or "Knowledge" means: (a)
actual knowledge of Seller and Olicom after due inquiry of those persons set
forth on Schedule l4.12(d) as specified by Buyer; and (b) that which a
reasonably prudent person could be expected to discover or otherwise become
aware of in the course of conducting a reasonably comprehensive investigation
concerning the existence of such fact or other matter.
(g) "Intellectual Property" shall mean any or all of the
following and all rights in, arising out of, or associated therewith: (i) all
United States and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisional, continuations and continuations in
part thereof; (ii) all inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary information, know how,
technology, technical data and customer lists and all documentation relating to
any of the foregoing; (iii) all copyrights, copyrights registrations and
applications therefor, and all other rights corresponding thereto throughout the
world; (iv) all mask works, mask work registrations and applications therefor,
and all other rights corresponding thereto throughout the world; (v) all
industrial designs and any registrations and applications therefor throughout
the world; (vi) all trade names, logos, common law trademarks and service marks
trademark and service xxxx registrations and applications therefor throughout
the world; (vii) all databases and data collections and all rights therein
throughout the world; and (viii) all computer software including all source
code, object code, firmware, development tools, files, records and data, all
media on which any of the foregoing is recorded and all documentation related to
any of the foregoing throughout the world;
(h) "Person" means an individual, corporation, limited liability
company, partnership, limited partnership, syndicate, person (including, without
limitation, a "person" as
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defined in Section 13(d)(3) of the Securities Exchange Act of 1934), trust,
association or other legal entity or government, political subdivision, agency
or instrumentality of a government;
(i) "Software" shall mean all computer code and data in source
code, object code or other form incorporated in the products created or used by
the Company in the preparation or support of its products;
(j) "Software Authors" shall mean all authors of the Software, or
any other Person or entity who participated in the development of the Software
or any portion thereof or performed any work related to the Software; provided,
however, that Software Authors shall not include any Persons who are not
involved in the development or modification of Software source code; and
(k) "Subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary), owns or
has rights to acquire, directly or indirectly, fifty percent (50%) or more of
the capital stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity.
[REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, Buyer, Seller and Olicom have each caused this
Agreement to be executed on their behalf by their respective duly authorized
officers as of the date first written above.
BUYER:
MOTOROLA, INC.
By: /s/ Xxxx Xxxxxxxx
---------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President and Director, Licensing and
Strategic Alliances, Personal Network
Group, PCS, CE
SELLER:
OLICOM VENTURES A/S
By: /s/ Boje Rinhart
---------------------------------------------
Name: Boje Rinhart by Power of Attorney
Title:
------------------------------------------
OLICOM:
OLICOM A/S
By: /s/ Boje Rinhart
---------------------------------------------
Name: Boje Rinhart by Power of Attorney
Title:
------------------------------------------
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Exhibit 2.2
FORM OF ESCROW AGREEMENT
42
ESCROW AGREEMENT
This Escrow Agreement ( this "Escrow Agreement") dated as of October
___, 1999 is made and entered into by and among Motorola, Inc., a Delaware
corporation (the "Buyer"), Olicom Ventures A/S, a corporation organized and
existing under the laws of the Kingdom of Denmark (the "Seller"); Olicom A/S, a
corporation organized and existing under the laws of the Kingdom of Denmark
("Olicom"); and Unibank A/S, as Escrow Agent (the "Escrow Agent"). All
capitalized terms used and not defined herein shall have the meanings contained
in that certain Stock Purchase Agreement dated October 26, 1999 by and among the
Buyer, Seller and Olicom (the "Purchase Agreement").
RECITALS:
WHEREAS, pursuant to the Purchase Agreement, the Buyer, the Seller and
Olicom have agreed to the terms of the Purchase Agreement providing for the sale
by the Seller to the Buyer of the Shares;
WHEREAS, Section 2.2 of the Purchase Agreement provides for the
execution and delivery of an escrow agreement, and the Buyer and the Seller have
agreed that the execution and delivery of this Escrow Agreement shall satisfy
the obligations of the parties hereto to execute and deliver such an escrow
agreement; and
WHEREAS, Section 2.2 of the Purchase Agreement further provides that
the Buyer shall pay 10% of the Purchase Price to the Escrow Agent for release as
set forth herein and in the Purchase Agreement.
NOW, THEREFORE, in consideration of the consummation of the
transactions contemplated by the Purchase Agreement, the covenants and
agreements herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Appointment and Agreement of the Escrow Agent. The Buyer, the Seller
and Olicom hereby appoint and designate the Escrow Agent as the escrow agent for
the purposes set forth herein, and the Escrow Agent hereby accepts such
appointment under the terms and subject to the conditions set forth herein.
2. Deposit of the Escrow Funds. Pursuant to Section 2.2 of the Purchase
Agreement, at the Closing, the Buyer shall withhold and deliver to the Escrow
Agent cash in the original principal amount of ten percent (10%) of the Purchase
Price by wire transfer of immediately available funds (the "Escrow Funds") to be
held in an interest bearing trust account number 5005905135 (the "Escrow
Account"). The cost of establishing the Escrow Account (which shall be
approximately 20,000 DKK) shall be borne by the Buyer. The ongoing expenses
related to such Escrow Account, if any, shall be split equally between the Buyer
and the Seller. Except as otherwise specifically set forth herein, each party
hereto shall bear its own legal fees and other expenses in connection with the
Escrow Account and this Escrow Agreement. The funds deposited in the Escrow
Account shall be held and invested as set forth in Section 5 hereof.
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3. Establishment of Escrow.
3.1 Escrow Funds. The Escrow Agent shall establish and hold in
escrow the Escrow Funds.
3.2 Use of Escrow Funds. The Escrow Funds shall be held and
disbursed for the purposes of satisfying the Buyer's remedies for breaches of
the Purchase Agreement under Article 9 of the Purchase Agreement, as set forth
in Section 4 hereof.
4. Disbursements from the Escrow Funds.
4.1 If the Buyer believes in good faith that it has a claim for
indemnification under Article 9 of the Purchase Agreement, the Buyer shall
deliver to the Escrow Agent and the Seller an officer's certificate setting
forth the facts and basis for such claim as provided in Section 9.5 of the
Purchase Agreement (a "Claim"). Within thirty-five (35) calendar days of receipt
of such certificate by the Escrow Agent and without any further inquiry by the
Escrow Agent or further instruction to the Escrow Agent, the Escrow Agent shall
pay to the Buyer the amount of each such Claim as indicated in such officer's
certificate and the accrued interest thereon from the Escrow Funds unless the
Seller shall have delivered to the Escrow Agent a notice of the Seller's
objection to such Claim within thirty (30) calendar days of the Seller's receipt
of such Claim. If the Seller does not deliver such notice of objection to the
Buyer's Claim within sixty (60) calendar days of receiving the Claim, the Seller
shall have approved such Claim and shall waive any objection at a later date. If
it is subsequently determined that the Buyer is not entitled to any portion of
the Escrow Account which has been paid out pursuant to a Claim, then within five
(5) calendar days of such determination, the Buyer shall promptly return to the
Escrow Agent the excess amount withdrawn from the Escrow Account plus accrued
interest thereon. In the event that the parties hereto dispute such Claim, the
parties shall endeavor to resolve any dispute regarding disbursement of the
Escrow Funds in the manner provided by Article 13 of the Purchase Agreement.
4.2 If the Escrow Funds are insufficient to fully satisfy claims for
indemnification, the Buyer shall have a right to pursue such claims against the
Seller and Olicom pursuant to Article 9 of the Purchase Agreement, subject to
the limitation of indemnification of the Seller and Olicom contained in Section
9.6 of the Purchase Agreement.
4.3 Unless there has been a Claim made for such funds in the Escrow
Account by the Buyer, the balance of all remaining funds, if any, in the Escrow
Account plus all accrued interest thereon (the "Balance") will be released from
the Escrow Account to the Seller without further inquiry or instruction eighteen
(18) months from Closing.
5. Investment of Funds. Subject to the terms and conditions set forth
herein, the Escrow Agent shall invest the Escrow Funds as shall be directed, in
a writing signed by the Buyer and the Seller to be delivered to the Escrow Agent
from time to time, in any of the following investments (the "Permitted
Investments"):
(i) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency
thereof and backed by the full
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faith and credit of the United States of America, in each case maturing
within three (3) months from the date of acquisition thereof; and
(ii) certificates of deposit, other time deposits, and
bankers' acceptances maturing within three (3) months from the date of
acquisition thereof issued by the Escrow Agent or any bank operating
under the laws of the United States of America or any state thereof or
the District of Columbia which has combined capital and surplus of not
less than $500,000,000.
If the Escrow Agent has not received written direction from time to
time that an investment decision has been made. The Escrow Agent shall invest
the Escrow Funds, or such portion thereof, as to which no written direction has
been received, in investments described in clause (ii) above. Each of the
foregoing investments shall be made in the name of Olicom Ventures A/S for the
benefit of the parties hereto. No investment shall be made in any instrument or
security that has a maturity of greater than six (6) months from the date of
investment. Notwithstanding anything to the contrary contained herein, the
Escrow Agent may, without notice to the Buyer or the Seller, sell or liquidate
any of the foregoing investments at any time if the proceeds thereof are
required for any release of funds permitted or required hereunder, and the
Escrow Agent shall not be liable or responsible for any loss, cost or penalty
resulting from any such sale or liquidation, except to the extent of the Escrow
Agent's gross negligence or willful misconduct. With respect to any funds
received by the Escrow Agent for deposit into the Escrow Account or a written
direction received by the Escrow Agent with respect to investment of any funds
in the Escrow Account, the Escrow Agent shall not be required to invest such
funds or to effect such investment instruction until the next day upon which
financial institutions in the Kingdom of Denmark are open for business.
This Escrow Agreement shall treat the Escrow Funds as a trust fund in
accordance with the terms hereof. In no event shall any part of the Escrow
Account be commingled with any other funds held by the Escrow Agent or any of
its affiliates. It is expressly agreed that any Permitted Investments may be
purchased by the Escrow Agent notwithstanding that an affiliate of the Escrow
Agent has underwritten, privately placed or made a market for, any such
Permitted Investments, or may in the future underwrite, privately place or make
a market in any such Permitted Investments. Any income that accrues to the
Escrow Funds and is received by the Escrow Agent as a result of the Permitted
Investments shall be deposited into the Escrow Account and shall be available
for the uses and purposes for which the Escrow Account has been established. The
party entitled to the receipt of any portion of the funds in the Escrow Account
shall receive the accrued interest allocable to that portion of the funds. The
Escrow Agent shall have no authority or duty to invest the funds in the Escrow
Account in any other obligations except as provided in this Section. The Escrow
Agent shall, promptly following the end of each calendar month, send the Buyer
and the Seller a statement of holdings and transactions with respect to the
Escrow Account in form and substance customarily provided to clients, which
statement shall include, without limitation, interest or other income received
during such calendar month in respect of the Escrow Account and shall identify
the type(s) and source(s) of such income.
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6. Termination of Escrow.
6.1 Subject to disbursements from time to time in accordance with
the terms and subject to the conditions hereof, unless the Buyer shall have
notified the Escrow Agent of a dispute in accordance with Section 1.3 of the
Purchase Agreement, the Escrow Agent shall deliver the Balance (as defined in
Section 4 hereof) to the Seller, without further inquiry by the Escrow Agent or
further instruction to the Escrow Agent eighteen (18) months from Closing.
6.2 This Escrow Agreement shall automatically terminate if and when
the entire Escrow Funds shall have been released by the Escrow Agent in
accordance with the terms and subject to the conditions of this Escrow
Agreement. Thereafter. The Escrow Agent shall be deemed to have discharged all
of its obligations hereunder.
7. Matters Affecting the Escrow Agent.
7.1 Indemnification of the Escrow Agent. From and at all times after
the date of this Escrow Agreement, the Buyer and the Seller shall, to the
fullest extent permitted by law and to the extent provided herein, indemnify and
hold harmless the Escrow Agent and each director, officer, employee, attorney,
agent and affiliate of the Escrow Agent (collectively, the "Indemnified Panics")
against any and all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever (including,
without limitation, reasonable attorneys' fees, costs and expenses actually
incurred) incurred by or asserted against any of the Indemnified Parties from
and after the date hereof, whether direct, indirect or consequential, as a
result of or arising from or in any way relating to any claim, demand, suit,
action or proceeding (including any inquiry or investigation) by any person,
including, without limitation, the Buyer or the Seller, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against any
person under any statute or regulation, including, but not limited to, any
applicable securities laws, or under any common law or equitable cause or
otherwise, arising from or in connection with the negotiation, preparation,
execution, performance or failure of performance of this Escrow Agreement or any
transactions contemplated herein, whether or not any such Indemnified Party is a
party to any such action, proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have the right
to be indemnified hereunder for any liability finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Indemnified Party. If any such action or claim shall
be brought or asserted against any Indemnified Party, such Indemnified Party
shall promptly notify the Buyer and the Seller in writing, and the Buyer and the
Seller shall assume the defense thereof, including the employment of counsel and
the payment of all expenses. Such Indemnified Party shall, in its sole
discretion, have the right to employ separate counsel (who may be selected by
such Indemnified Party in its sole discretion) in any such action and to
participate in the defense thereof, and the fees and expenses of such counsel
shall be paid by such Indemnified Party, except that the Buyer and the Seller
shall be required to pay such fees and expenses if: (a) the Buyer and the Seller
agree to pay such fees and expenses; (b) the Buyer and the Seller shall fail to
assume the defense of such action or proceeding or shall fail to employ counsel
reasonably satisfactory to the Indemnified Party in any such action or
proceeding; or (c) the Indemnified Party, the Buyer and the Seller are the
plaintiffs in any such action or proceeding (including any potentially impleaded
parties), and the Indemnified Party shall have been advised by counsel that
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there may be one or more legal defenses available to it which are different from
or additional to those available to the Buyer or the Seller. Each of the Buyer,
on the one hand, and the Seller. on the other hand, shall be responsible for
one-half (1/2) of each such indemnification responsibility. All such reasonable
fees and expenses payable by the Buyer and/or the Seller pursuant to the
foregoing sentence shall be paid from time to time as incurred, both in advance
of and after the final disposition of such action or claim. The obligations of
the Buyer and the Seller under this Section 7.1 shall survive any termination of
this Escrow Agreement and the resignation or removal of the Escrow Agent shall
be independent of any obligation of the Escrow Agent. The parties agree that
neither the payment by the Buyer or the Seller of any claim by the Escrow Agent
for indemnification hereunder nor the disbursement of any amounts to the Escrow
Agent from the Escrow Account in respect of a claim by the Escrow Agent for
identification shall impair, limit, modify or affect, as between the Buyer and
the Seller, the respective rights and obligations of the Buyer, on the one hand,
and the Seller, on the other hand, under the Purchase Agreement.
7.2 Duties and Liability of the Escrow Agent. The Escrow Agent's sole
responsibility shall be for the safekeeping, investment, and disbursement of the
Escrow Funds in accordance with the terms of this Escrow Agreement. The Escrow
Agent shall have no implied duties or obligations and shall not be charged with
knowledge or notice of any fact not specifically set forth herein. The Escrow
Agent may rely upon any instrument, not only as to its due execution, validity
and effectiveness. but also as to the truth and accuracy of any information
contained therein, which the Escrow Agent shall in good faith believe to be
genuine, to have been signed or presented by the person or parties purporting to
sign the same and to conform to the provisions of this Escrow Agreement. Except
to the extent of gross negligence or willful misconduct, in no event shall the
Escrow Agent be liable for incidental, indirect, special, consequential or
punitive damages. The Escrow Agent shall not be obligated to take any legal
action or commence any proceeding in connection with the Escrow Account, any
account in which the Escrow Funds are deposited, this Escrow Agreement or the
Purchase Agreement, or to appear in, prosecute or defend any such legal action
or proceeding. The Escrow Agent may consult legal counsel selected by it in the
event of any dispute or question as to the construction of any of the provisions
hereof or of any other agreement or of its duties hereunder, or relating to any
dispute involving any party hereto. The Buyer and the Seller, jointly and
severally, shall promptly pay, upon demand, the reasonable fees and expenses
actually incurred of any such counsel.
7.3 Fees. The Buyer, on the one hand, and the Seller, on the other hand
shall equally reimburse the Escrow Agent For all of its reasonable out-of-pocket
expenses actually incurred, including reasonable attorneys' fees, travel
expenses, telephone and facsimile transmission costs, postage (including express
mail and overnight delivery charges), copying charges and the like.
Notwithstanding the above, any expenses in an amount greater than 3,500 DKK must
be preapproved by the Buyer and the Seller upon submission of a detailed invoice
by the Escrow Agent to the Buyer and the Seller or such expenses will not be the
responsibility of either the Buyer or the Seller. All of the compensation and
reimbursement obligations set forth in this Section 7.3 shall be payable by the
Buyer and the Seller, in equal amounts, upon demand by the Escrow Agent. The
obligations of the Buyer and the Seller under this Section 7.3 shall survive any
termination of this Escrow Agreement and the resignation or removal of the
Escrow
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Agent. The Buyer and the Seller shall promptly pay such amounts to the Escrow
Agent or any Indemnified Party upon receipt of an itemized invoice.
7.4 Escrow Agent to Follow Instructions of the Buyer and the Seller.
Except for matters covered by Section 4 hereof, the Escrow Agent shall at any
time and from time to time take such action hereunder with respect to the Escrow
Funds as shall be agreed to in writing by the Buyer and the Seller.
7.5 Removal and Resignation Of the Escrow Agent. The Buyer and the
Seller, acting jointly, may remove the Escrow Agent at any time upon thirty (30)
calendar days' prior written notice, signed by both the Buyer and the Seller, to
the Escrow Agent. The Escrow Agent may resign at any time upon thirty (30)
calendar days prior written notice (unless waived) to the Buyer and the Seller.
Within thirty (30) calendar days after giving the foregoing notice of
resignation from the Escrow Agent, the Buyer and the Seller shall jointly agree
on and appoint a successor escrow agent. The successor escrow agent shall be a
bank having combined capital and surplus of at least 3,500.000,000 DKK as shall
be mutually selected by the Buyer and the Seller. Any such successor escrow
agent shall be appointed by a written instrument mutually satisfactory to and
executed by the Buyer and the Seller, the Escrow Agent and the successor escrow
agent.
If a successor escrow agent has not accepted such appointment by the
end of such thirty (30) calendar day period, the Escrow Agent may apply to a
court of competent jurisdiction for the appointment of a successor escrow agent
or for other appropriate relief. The reasonable costs and expenses (including
reasonable attorneys' fees and expenses actually incurred) incurred by the
Escrow Agent in connection with such proceeding shall be paid by, and be deemed
a joint and several obligation of, the Buyer, on the one hand, and the Seller,
on the other hand.
Any successor escrow agent appointed under the provisions of this
Escrow Agreement shall have all of the same rights, powers, privileges,
immunities and authority with respect to the matters contemplated herein as are
granted herein to the original Escrow Agent. It is understood and agreed that no
resignation of the Escrow Agent shall be effective until a successor escrow
agent agrees to act hereunder. If the Escrow Agent submits a notice of
resignation, its only duty, until a successor escrow agent shall have been
appointed and shall have accepted such appointment, shall be to hold, invest and
dispose of the Escrow Funds in accordance with this Escrow Agreement, but
without regard to any notices, requests, instructions, demands or the like
received by it from the other parties hereto after such notice of resignation
shall have been given, unless the same is a direction that the Escrow Funds be
paid or delivered in its entirety to one of the other parties hereto.
8. Other Provisions.
8.1 Security Interest.
(a) The Seller hereby grants to the Buyer a first priority perfected
security interest in the Escrow Funds and all other amounts from time
to time in the Escrow Account (including all interest accrued thereon
and all proceeds thereof) to secure the
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Buyer's fights to indemnification under Article 9 of the Purchase
Agreement. This Escrow Agreement shall constitute a security agreement
under applicable law.
(b) The parties agree that this security interest shall attach as of
the execution of this Escrow Agreement. The parties further agree that,
for the purpose of perfecting the Buyer's security interest in the
Escrow Funds held by the Escrow Agent pursuant to this Escrow
Agreement, the Buyer designates the Escrow Agent to acquire and
maintain possession of the Escrow Funds. The Seller and Olicom shall
take ail other actions requested by the Buyer to maintain the
perfection and priority of the security interest in the Escrow Funds.
(c) The Buyer's security interest herein granted shall be
automatically terminated to the extent of any adjustment. offset or
disbursement of the Escrow Funds hereunder by the Escrow Agent in
accordance with the terms of this Escrow Agreement. Upon final
disbursement of the Escrow Funds to the Seller or to the Buyer, the
Buyer shall do all acts and things reasonably necessary to release and
extinguish such security interest.
8.2 Amendment and Waiver. This Escrow Agreement may not be amended
or waived except in a writing executed by the party against which such amendment
or waiver is sought to be enforced. No course of dealing between or among any
persons having any interest in this Escrow Agreement will be deemed effective to
modify or amend any part of this Escrow Agreement or any rights or obligations
of any person under or by reason of this Escrow Agreement.
8.3 Notices. All notices. requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given: (i) when delivered,
if delivered in person or by commercial messenger service; or (ii) two days
following deposit with a recognized overnight courier service, provided that
such deposit occurs prior to such deadline as has been imposed by such service
for overnight delivery; or (iii) when transmitted. If sent by telefacsimile
copy, provided confirmation of receipt is received by the sender, in each case
provided that such communication is addressed to the intended recipient thereof
as set forth below:
If to Buyer, to: Motorola, Inc.
0000 X. Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxx 00000-0000
Attn: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. XxXxxxxx. Esq.
Facsimile: (000) 000-0000
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If to Seller, to: Olicom Ventures AJS
Xxxxxxxx 000
XX-0000 Xxxxxx
Xxxxxxx
Attn: Xxxx Xxxxxx & Xxxxx Xxxx
Facsimile: 011-45-45-27-0180
If to Olicom, to: Olicom A/S
Nybrovej 110
XX-0000 Xxxxxx
Xxxxxxx
Attn: CFO
Facsimile: 011-45-45-27-0180
If to Escrow Agent, To: Unibank A/S
Niels Xxxxxxxxxxx Xxxx 00
XX-0000 Xxxxxxxxxx K
Denmark
Attn: Lars Hilstroem
Facsimile: 011-45-33-13-1959
Any party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery or electronic mail), but no such
notice, request, demand, claim or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other parties notice in the manner herein set forth.
8.4 Binding Effect and Assignment. This Escrow Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither
this Escrow Agreement nor any of the rights, interests or obligations hereunder
may be assigned by the Seller, Olicom or the Escrow Agent without the prior
written consent of the Buyer.
8.5 Severability. Whenever possible, each provision of this Escrow
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Escrow Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
8.6 Complete Agreement; No Third Party Beneficiaries. Subject to the
terms of the Purchase Agreement, this Escrow Agreement contains the complete
agreement between the parties and supersedes any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way. Nothing in this Escrow
Agreement, expressed or implied, is intended to confer upon any person
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or entity, other than the parties hereto and their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Escrow Agreement.
8.7 Governing Law. This Escrow Agreement shall be construed,
governed and enforced according to the internal laws of the Kingdom of Denmark,
without regard to conflicts of law principles. Any suit or proceeding brought
hereunder shall be subject to the exclusive jurisdiction of the courts located
in the Kingdom of Denmark.
9. Mediation and Alternative Dispute Resolution.
(a) To the extent that any misunderstanding or dispute cannot be
resolved agreeably in a friendly mariner, the dispute will be mediated by a
mutually acceptable mediator to be chosen by Buyer, Seller, and if applicable,
the Escrow Agent within forty-five (45) days after written notice by one of the
parties demanding mediation. Neither party may unreasonably withhold consent to
the selection of a mediator, however, by mutual agreement Buyer, Seller, and if
applicable. The Escrow Agent may postpone mediation until each has completed
specified but limited discovery with respect to a dispute. The parties may also
agree to attempt some other form of alternative dispute resolution ("ADR") in
lieu of mediation, including by way of example and without limitation neutral
fact-finding or a mini-trial.
(b) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six (6) months of the date of
the initial demand for it by one of the parties may then be submitted to the
courts for resolution. The use of any ADR procedures will not be construed under
the doctrines of laches, waiver or estoppel to affect adversely the rights of
either party. Nothing in this Section 9 will prevent either party from resorting
to judicial proceedings if: (i) good faith efforts to resolve the dispute under
these procedures have been unsuccessful; or (ii) interim relief from a court is
necessary to prevent serious and irreparable injury to one party or to others.
10. Attorneys' Fees. Should any litigation be commenced between the
Buyer, on one hand, and either the Seller or Olicom, on the other hand,
concerning this Escrow Agreement or the rights and duties of any party in
relation thereto, the party prevailing in such litigation shall be entitled, in
addition to such other relief as may be granted, to receive reimbursement from
the opposing party or parties, as applicable, for such first party's attorneys'
fees in such litigation, which shall be determined by the court in that
litigation.
11. Waiver of Trial by Jury. EACH OF THE PARTIES HERETO WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON-CONENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11. EACH OF THE PARTIES
HERETO WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. EACH OF THE PARTIES HERETO REPRESENTS THAT IT RAS REVIEWED THIS WAIVER
AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
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LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
12. Confirmation of Transfer Instructions. If fund transfer
instructions are given (other than in writing at the time of execution of the
Purchase Agreement), whether in writing, by telecopier or otherwise, the Escrow
Agent is authorized to seek confirmation of such instructions by telephone
call-back to the person or persons designated on Schedule A attached hereto, and
the Escrow Agent may rely upon the confirmations of anyone purporting to be the
person or persons so designated. The persons and telephone numbers for
call-backs may be changed only in a writing actually received and acknowledged
by the Escrow Agent. The parties to this Escrow Agreement acknowledge that such
security procedure is commercially reasonable.
13. Counterparts and Facsimile Signature. This Escrow Agreement may be
executed in one or more counterparts, each of which shall be deemed an original.
but all of which together shall constitute one and the same instrument.
Notwithstanding the laws of any jurisdiction in which this Agreement is executed
or delivered. A facsimile signature shall for all purposes be deemed an original
and shall bind the signer as if such facsimile were an original. Each party
hereto undertakes to deliver to each other party hereto original copies of any
facsimile signature by overnight courier to the addresses set forth in Section
8.3 above.
[Signature Page Follows]
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IN WITNESS WHEREOF. The parties hereto have caused this Escrow
Agreement to be executed effective as of the date first written above.
BUYER:
MOTOROLA, INC.
By:
----------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President and Director. Licensing and
Strategic Alliances. Personal Network
Group, PCS. CE
SELLER:
OLICOM VENTURES A/S
By:
----------------------------------------------
Name:
--------------------------------------------
Its:
---------------------------------------------
OLICOM:
OLICOM A/S
By:
----------------------------------------------
Name:
--------------------------------------------
Its:
---------------------------------------------
ESCROW AGENT:
UNIBANK A/S
By:
----------------------------------------------
Name:
--------------------------------------------
Its:
---------------------------------------------
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