EXHIBIT 10.2
EXHIBIT C TO
EXCHANGE AGREEMENT
ASSIGNMENT
This assignment is made by ARI Network Services Partners, LP, Dolphin
Offshore Partners, LP, and SDS Merchant Fund, LP (collectively, "Assignors") in
favor of ARI Network Services, Inc. ("Assignee" or "ARI") in fulfillment of the
Exchange Agreement between Assignors and ARI dated as of April 24, 2003 (the
"Exchange Agreement").
RECITALS
WHEREAS, Assignors have certain claims, rights, defenses, and interests
arising from the Transfer Agreement dated September 27, 2002 and executed
between Assignors and RGC International Investors, LDC, a Cayman Islands
corporation, relating to a Securities Purchase Agreement, Debenture, Warrants,
Investment Options, and Registrations Rights Agreement with and/or issued by ARI
Network Services, Inc. and arising from the negotiations, communications, acts
and omissions in connection with that Transfer Agreement (the "Transfer
Agreement Claims");
WHEREAS, Assignors have certain claims, rights, defenses, and interests
against RGC International Investors, LDC, Xxxx Xxxx Capital Management, L.P.,
RGC General Partner Corp. and their affiliates (collectively, "RGC"), which may
have significant monetary value relating to the subject matter of the lawsuit
entitled ARI Network Services, Inc. v. RGC International Investors, LDC, et. al,
Milwaukee County Circuit Court, Case No. 02-CV-10839 (the "Wisconsin Action
Claims");
WHEREAS, Assignors have certain claims, rights, defenses, and interests
against RGC which may have significant monetary value relating to the subject
matter of the lawsuit entitled RGC International Investors, LDC v. ARI Network
Services, Inc., U.S. District Court for the District of Delaware, Civil Action
No. 03-0003 (JF) (the "Delaware Action Claims");
WHEREAS, Assignors desire to assign, transfer, and set over to ARI, all
of Assignors' claims, rights, causes of action, title, interest, and defenses
in, relating to, arising from, and that may be asserted with respect to the
Transfer Agreement Claims, the Wisconsin Action Claims, and the Delaware Action
Claims, and to allow ARI to prosecute those claims in place of Assignors to the
full extent allowed by law;
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties agree as
follows:
1. The recitals set forth above are true and correct and are
hereby incorporated by this reference.
2. Assignors hereby assign, transfer and set over to ARI and its
successors or assigns any and all of Assignors' claims, rights, causes of
action, title, interest, and defenses in, relating
to, arising from, or that may be asserted against RGC with respect to the
Transfer Agreement Claims, the Wisconsin Action Claims and the Delaware Action
Claims, together with Assignors' claims, rights, title, and interest in and to
all proceeds, settlements, awards, judgments, or compensation arising out of any
or all of the Transfer Agreement Claims, the Wisconsin Action Claims and the
Delaware Action Claims, all free and clear of pledges, liens, and encumbrances
of any kind or nature including, without limitation, lien rights of Assignors'
legal counsel (all of the foregoing collectively the "Assigned Claims").
3. Assignors covenant and agree that they will provide ARI with
all information and all other cooperation, to the extent ARI reasonably deems it
necessary, in order to effectuate the purposes of this Assignment and to promote
ARI's ability to prosecute the Assigned Claims. Without limiting the generality
of the foregoing, Assignors will at all times: (i) to the extent they have any
right to do so, make all of their present and former officers, partners, and
employees available to cooperate in prosecuting the Assigned Claims and cause
them to do so; (ii) share and make available, and allow the review and copying
of all documents and other information that may be relevant to the Assigned
Claims; (iii) execute and deliver any and all agreements, documents, and
instruments, in their own name or otherwise, to the full extent of their legal
power and authority, which ARI may reasonably request in order to prosecute and
pursue the Assigned Claims pursuant to and in accordance with the terms of this
Assignment; and (iv) take any additional action that may be necessary to give
full force and effect to the terms and intent of this Assignment. To the extent
that such cooperation is requested by ARI, ARI will reimburse Assignors for any
reasonable out-of-pocket travel, lodging, copying and communication costs
Assignors pay to third parties in connection with Assignors' performance under
this paragraph and attorneys' fees to the extent pre-approved and reasonably
necessary in connection with the requested cooperation only; provided, however,
ARI will have no duty to defend Assignors for their own liabilities, if any. Any
out-of-pocket cost in excess of five hundred dollars ($500.00) must be
pre-approved by ARI.
4. Assignors warrant and represent that they have full power and
authority to enter into this Assignment, and that they are the legal, record,
and beneficial owner of the Assigned Claims free of all claims, encumbrances and
interests, and that they have the right to assign the same to ARI. Assignors
warrant and represent that no portion of the Assigned Claims has been assigned
to anyone else and that no other person or entity has any legal right to pursue
the Assigned Claims or share in the proceeds from such Assigned Claims.
5. Assignors hereby give permission to ARI and to ARI's lawyers
to appear for Assignors in any proceeding or court with respect to the Delaware
Action Claims and the Wisconsin Action Claims as well as any future lawsuits
necessary to prosecute the Assigned Claims to the full extent allowed by law.
6. This Assignment and the rights and obligations of the parties
hereunder shall be governed by, and shall be construed in accordance with, the
internal laws of the state of Wisconsin, without regard to conflicts of laws
principles.
7. Despite the fact that Assignors are currently defendants in
the Wisconsin litigation referenced in the recitals above, and ARI is receiving
all rights in such litigation from Assignors, ARI will not take any action to
obtain a judgment or other award against Assignors
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on the claims alleged in the Wisconsin litigation. Furthermore, ARI will request
the Court in the Wisconsin litigation to allow ARI to pursue such litigation in
its own name as the Assignee pursuant to this assignment and dismiss Assignors
as named parties, provided that such action does not prejudice or otherwise
damage ARI's right(s) to pursue other parties, including, but not limited to,
RGC. If the Court denies such request, ARI is still bound by the first sentence
of this paragraph. Thus, ARI and Assignors agree that eventually the Wisconsin
litigation will be dismissed as to the Assignors.
8. Notwithstanding anything contained in this Assignment or
otherwise, ARI has the right to choose, in its sole discretion, to prosecute,
pursue, settle, compromise, sell, transfer, dismiss or abandon any or all of the
Assigned Claims. The pursuit and/or settlement of the Assigned Claims shall be
only for the benefit of ARI and its successors and assigns. The Assignors
acknowledge and confirm that ARI will have no duty or obligation, under the
terms of this Assignment or otherwise, to prosecute or pursue any of the
Assigned Claims and shall have no duty or obligation to defend or protect the
Assignors in any way from any claim, allegation, cause of action, or liability
asserted by RGC or anyone making a claim (i) by or through RGC or (ii) arising
from or related to the Transfer Agreement Claims, the Wisconsin Action Claims
and/or the Delaware Action Claims.
9. Assignors and ARI have shared and may share legal advice, work
product, attorney-client privileged communications and other confidential
information received from their respective counsel that pertains to the Assigned
Claims (collectively, together with the terms and conditions of this Agreement,
the "Confidential Information"), and they agree that when any Confidential
Information has been or is shared, their respective counsel have been and will
be acting as consultants to one another in conjunction with the Assigned Claims.
Notwithstanding the foregoing, Assignors and ARI agree that their respective
counsel's duty is to represent the rights and interests of their own client and
that nothing in this Assignment or in the conduct of the parties or their
respective counsel will be construed to create any implied representation of the
other party to this Assignment. Assignors and ARI further agree that the duty of
the respective counsel for each of the parties is to represent the interest of
its own client only, and Assignors and ARI waive any rights, if any, to assert
this Assignment as a basis for disqualification of counsel for either party in
any subsequent action between Assignors and ARI.
10. Nothing in this Assignment shall constitute or is intended to
be a waiver of any attorney-client, work product or any other privilege or
immunity, including protections or requirements imposed by or available under
any applicable law. All documents and other information contemplated hereby
shall remain jointly subject to the attorney-client privilege and the work
product privilege, and will be kept confidential by Assignors and ARI, except as
reasonably needed to review, pursue and litigate the Assigned Claims. The
respective counsel for Assignors and ARI retain the right to maintain their own
privileged and confidential communications with their own respective clients.
Each of the parties to this Assignment agrees that it will not disclose any
Confidential Information, except to the extent reasonably necessary to implement
the terms and conditions of this Assignment, to prosecute the Assigned Claims,
and as otherwise required by applicable law or a court or government agency of
competent jurisdiction, in each case to the extent that the same: (i) is not
publicly available; or (ii) was not or could not be obtained from another source
not bound by any obligation of confidentiality to either party hereto. Without
limiting the foregoing, if either party receives any subpoena or other
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request for disclosure of Confidential Information, the party receiving the same
shall so notify the other party as promptly as practicable and both parties
shall cooperate with each other in any efforts which either of them reasonably
elects to pursue at their own expense in order to preserve the confidentiality
of the information in question.
11. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
COMPANY: BUYERS:
ARI NETWORK SERVICES, INC. ARI NETWORK SERVICES PARTNERS
By: TAGLICH BROTHERS, INC.
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx, By: /s/ Xxxxxxx Xxxxxxx
Chairman and Chief Executive Officer -----------------------------
Xxxxxxx Xxxxxxx
Managing Partner
DOLPHIN OFFSHORE PARTNERS, LP
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Name: Xxxxx X. Xxxxx
Title: General Partner
SDS MERCHANT FUND, LP
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Managing Member
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