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EXHIBIT 2.6
ASSET TRANSFER AGREEMENT
between
ERICSSON BUSINESS NETWORKS AB
and
FLEXTRONICS INTERNATIONAL SWEDEN AB
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TABLE OF CONTENTS
1. PURCHASE AND SALE....................................................................................... 9
1.1 AGREEMENT TO SELL AND PURCHASE...................................................................... 9
1.1.1 Included Assets................................................................................ 9
1.1.2 Excluded Assets............................................................................... 10
1.2 THE PURCHASE PRICE ETC............................................................................. 11
1.2.1 Purchase Price................................................................................ 11
1.2.2 Payment of Purchase Price..................................................................... 11
1.3 ASSUMPTION OF LIABILITIES.......................................................................... 12
1.4 INTERIM AND CLOSING ASSET LISTS; ADJUSTMENT DATE................................................... 12
1.4.1 Interim Asset List............................................................................ 12
1.4.2 Closing Asset List............................................................................ 12
1.4.3 Final Closing Asset List...................................................................... 13
1.4.4 The Adjustment Date........................................................................... 13
1.5 EMPLOYEES.......................................................................................... 13
2. CLOSING; ITEMS TO BE DELIVERED AT CLOSING.............................................................. 13
2.1 CLOSING............................................................................................ 13
2.2 TRANSFER OF TITLE AND POSSESSION; ITEMS TO BE DELIVERED AT CLOSING................................. 14
2.2.1 Transfer of title and possession.............................................................. 14
2.2.2 Items to be delivered at Closing.............................................................. 14
2.2.3 Actions for Completion........................................................................ 15
2.3 THIRD PARTY CONSENT................................................................................ 15
3. REPRESENTATIONS AND WARRANTIES......................................................................... 15
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER....................................................... 15
3.1.1 Due Diligence................................................................................. 15
3.1.2 Due Organization.............................................................................. 15
3.1.3 Authority..................................................................................... 16
3.1.4 Assets........................................................................................ 16
3.1.5 Inventory and work orders..................................................................... 16
3.1.6 Employees..................................................................................... 16
3.1.7 Effect of Agreement........................................................................... 17
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3.1.8 Absence of Change............................................................................. 17
3.1.9 Title to Assets............................................................................... 17
3.1.10 Leased and Licensed Property and Assets...................................................... 18
3.1.11 Proprietary Rights........................................................................... 18
3.1.12 Agreements, Etc.............................................................................. 18
3.1.13 Employees and Employee Plans................................................................. 18
3.1.14 Environmental and Safety Matters............................................................. 19
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................................................... 19
3.2.1 Due Organization.............................................................................. 19
3.2.2 Authority..................................................................................... 19
3.2.3 Plans for implementation and secure sourcing.................................................. 19
4. AGREEMENTS PENDING CLOSING/COVENANTS................................................................... 20
4.1 AGREEMENTS/COVENANTS OF SELLER PENDING THE CLOSING................................................. 20
4.1.1 Actions of Seller............................................................................ 20
4.1.2 Operations in the Ordinary Courses............................................................ 20
4.1.3 Maintenance of Physical Assets................................................................ 20
4.1.4 Employees and Business Relations.............................................................. 20
4.1.5 Maintenance of Insurances..................................................................... 20
4.1.6 Compliance with Laws etc...................................................................... 20
4.1.7 Sale of Assets; Negotiations.................................................................. 21
4.1.8 Access........................................................................................ 21
4.1.9 Press releases................................................................................ 21
4.1.10 Competition Authorities...................................................................... 21
4.1.11 Information Systems.......................................................................... 21
4.2 AGREEMENTS OF PURCHASER PENDING THE CLOSING........................................................ 21
4.2.1 Actions of Purchaser.......................................................................... 21
4.2.2 Confidentiality............................................................................... 22
4.2.3 Press Releases................................................................................ 22
4.2.4 Competition Authorities....................................................................... 22
4.2.5 Information Systems .......................................................................... 22
5. CONDITIONS PRECEDENT TO THE CLOSING.................................................................... 22
5.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER............................................... 22
5.1.1 Compliance with this Agreement................................................................ 22
5.1.2 Material Adverse Changes...................................................................... 23
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5.1.3 Information Systems........................................................................... 23
5.1.4 Competition Authorities....................................................................... 23
5.1.5 Representations and Warranties................................................................ 23
5.1.6 Legal opinion ................................................................................ 23
5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER................................................... 23
5.2.1 Compliance with this Agreement................................................................ 24
5.2.2 Implementation Plan........................................................................... 24
5.2.3 Lease Agreement, Service Agreement............................................................ 24
5.2.4 Information System............................................................................ 24
5.2.5 Competition Authorities....................................................................... 24
5.2.6 Representations and Warranties................................................................ 25
5.2.7 Legal Opinion ................................................................................ 25
6. INDEMNIFICATION........................................................................................ 25
6.1 GENERAL INDEMNIFICATION OBLIGATION OF THE SELLER................................................... 25
6.2 GENERAL INDEMNIFICATION OBLIGATION OF PURCHASER.................................................... 25
6.3 METHOD OF ASSERTING CLAIMS, ETC.................................................................... 26
6.4 OTHER RIGHTS AND REMEDIES.......................................................................... 26
6.5 LIMITATION OF LIABILITY............................................................................ 26
6.6 TAX CONSEQUENCES................................................................................... 26
6.7 MITIGATION OF LOSSES............................................................................... 26
6.8 REDUCTION OF INDEMNITY............................................................................. 26
7. POST CLOSING MATTERS................................................................................... 27
7.1 DISCHARGE OF OBLIGATIONS........................................................................... 27
7.2 PAYMENTS AND OTHER PROPERTY RECEIVED............................................................... 27
7.3 IS/IT.............................................................................................. 27
7.4 VEDEBY PLANT....................................................................................... 28
7.5 INVENTORY.......................................................................................... 28
7.6 THIRD PARTY CONSENTS............................................................................... 28
7.7 ACTIONS FOR THE COMPLETION OF THE TRANSFER......................................................... 29
7.8 NEW EMPLOYMENT AND EMPLOYMENT CONDITIONS........................................................... 29
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7.8.1 Transfer of Employees......................................................................... 29
7.8.2 Reimbursement for Compensation to Certain Employees........................................... 29
7.8.3 Loans to employees............................................................................ 30
7.9 COMPENSATION FOR DEFECTS IN REAL PROPERTY.......................................................... 30
7.10 CONFIDENTIALITY OF SELLER......................................................................... 30
7.11 CONFIDENTIALITY OF PURCHASER...................................................................... 30
8. MISCELLANEOUS.......................................................................................... 31
8.1 EXPENSES........................................................................................... 31
8.2 ENTIRE AGREEMENT................................................................................... 31
8.3 ASSIGNMENT......................................................................................... 31
8.4 NOTICES............................................................................................ 31
8.5 EXHIBITS........................................................................................... 32
8.6 SEVERABILITY....................................................................................... 32
9. GOVERNING LAW AND ARBITRATION.......................................................................... 32
9.1 GOVERNING LAW...................................................................................... 32
9.2 ARBITRATION........................................................................................ 32
10. ENTERING INTO FORCE................................................................................... 32
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ASSET TRANSFER AGREEMENT
Dated as of February 12, 1997, by and between
Ericsson Business Networks AB, a company duly incorporated and existing under
the laws of Sweden ("Seller"), and
Flextronics International Sweden AB, a company duly incorporated and existing
under the laws of Sweden ("Purchaser"), with reference to the following
recitals:
A. Seller is engaged, in part, in the manufacturing of complete integrated
information networks for voice, data and multimedia in wired and mobile
applications. Seller has carried on such manufacturing, referred to
herein as the "Manufacturing Operations" using certain assets in
Seller's premises in Vedeby and Verko in Karlskrona.
B. Purchaser, owned via Flextronics Holding AB by Flextronics
International Ltd., a company which is engaged in the business of
electronics manufacturing, materials procurement, printed circuit board
design, logistics and other manufacturing services, desires to purchase
all of the above described assets used in the Manufacturing Operations
of Seller except for order administration, core unit supply and
distribution.
C. Subject only to the limitation and exclusions contained in this
Agreement and on the terms and conditions hereinafter set forth, Seller
desires to sell and Purchaser desires to purchase the manufacturing
assets of Seller.. Purchaser intends to use the assets for production
for Seller and a wide range of third party customers.
NOW THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained,
and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
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D. DEFINITIONS
ADJUSTMENT DATE means the date set out in Section 1.4.4.
AGREEMENT means this agreement.
ASSETS means the assets set out in Section 1.1.1.
ASSUMED LIABILITIES means the liabilities to be assumed by Purchaser
as set out in Section 1.3.
CLOSING ASSET LIST means the asset list prepared in accordance with
Section 1.4.2.
CLOSING DATE means the date set out in Section 2.1.
CLOSING PAYMENT means the payment on account of the Purchase Price
which is to be paid on the Closing Date as set out
in Section 1.2.2.
EMPLOYEES means the employees listed in Exhibit 1.5.
EXCLUDED ASSETS means the assets set out in Section 1.1.2 which
assets shall not be transferred to Purchaser.
FINAL CLOSING ASSET LIST means the asset list set out in Section 1.4.3.
INFORMATION SYSTEMS
SERVICES AGREEMENT means the agreement which is to be entered into in
accordance with the principles set out in Exhibit
5.1.5(b).
IMPLEMENTATION PLAN means the plan attached hereto as Exhibit 5.2.3.
INTERIM ASSET LIST means the statement of the Assets and the Assumed
Liabilities as set out in Exhibit 1.4.1.
MANUFACTURING
OPERATIONS means the operations set out in Recital
PURCHASE PRICE means the consideration for the Assets as set out
in Section 1.2.1.
POST CLOSING
INFORMATION
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SYSTEM PLAN means the plan attached hereto as Exhibit 7.3.
PURCHASER means Flextronics International Sweden AB.
SELLER means Ericsson Business Networks AB.
1. PURCHASE AND SALE
1.1 AGREEMENT TO SELL AND PURCHASE
At the Closing Date hereunder (as defined in Section 2.1 hereof) and
except as otherwise specifically provided in this Section 1.1, Seller
shall sell, transfer, assign and deliver to Purchaser (or as regards
real property listed below and the construction contract dated November
20, 1992 listed in Exhibit 1.1. (e), cause such actions) and Purchaser
shall purchase, assume and receive from Seller, upon and subject to the
terms and conditions of this Agreement all of the Assets used in the
Manufacturing Operations, as set out in Section 1.1.1, free and clear
of all mortgages, liens, pledges and other security interests (save as
explicitly set out herein).
1.1.1 Included Assets
The assets to be transferred shall include the following except as set
forth in Section 1.1.2 hereof (hereinafter referred to as the
"Assets"):
(a) the real property listed in EXHIBIT 1.1.1(a);
(b) all inventories, machinery and equipment and other tangible
assets as set out in EXHIBIT 1.1.1(b);
(c) the prepaid items, unbilled costs and fees, listed in EXHIBIT
1.1.1(c);
(d) expensed equipment and fully depreciated machinery and
equipment as set out in EXHIBIT 1.1.1(d);
(e) all rights and obligations under any agreement, permit,
approval or authorization, etc., pertaining solely to the
Manufacturing Operations and listed in EXHIBIT 1.1.1(e);
(f) all orders as set out in EXHIBIT1.1.1 (f);
(g) the computer software (including documentation and related
object and source codes) listed in EXHIBIT 1.1.1(g) and ;
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(h) all information, files, records and recorded knowledge,
pertaining to the Manufacturing Operations and listed in
EXHIBIT 1.1.1(h).
Taking into consideration changes occurring in the ordinary course of
business, the exhibits referred to above may be amended as of Closing
Date but such amendments will be accounted for on the Closing Asset
List or in a particular statement submitted to Purchaser on Closing
Date.
1.1.2 Excluded Assets
Notwithstanding the foregoing, the Assets shall not include any of the
following (the "Excluded Assets"):
(a) any assets, properties or rights of Seller used in order
administration, core unit supply and distribution as further
described in EXHIBIT 1.1.2 (a);
(b) the specific tools listed in EXHIBIT 1.1.2(b);
(c) all computer software including documentation and related
object and source codes other than listed in EXHIBIT 1.1.1(g)
such as, without limiting the aforesaid, the software set out
in EXHIBIT 1.1.2 (c);
(d) all rights under any patent, trademark, service mark, trade
name or copyright, whether registered or unregistered, and any
applications therefore, including, but not limited to, the
rights listed in EXHIBIT 1.1.2 (d);
(e) all technologies, technical designs or solutions, methods,
formulations, data bases, trade secrets, know-how, inventions,
production techniques, operating rights and other intellectual
property used in the Manufacturing Operations or under
development, including, but not limited to, the rights listed
in EXHIBIT 1.1.2 (e);
(f) the inventory listed in EXHIBIT 1.1.2(f);
(g) market distribution systems, sales force and customer base, or
(h) other assets, properties or rights set forth in EXHIBIT
1.1.2(g).
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1.2 THE PURCHASE PRICE ETC.
1.2.1 Purchase Price
The purchase price ("Purchase Price") shall be the aggregate of:
(a) book values in Seller's records as at Closing Date for
inventories, machinery, equipment, other tangible assets set
out in Exhibit 1.1.1 (b) and prepaid items as referred to in
Section 1.1.1 (c);
(b) SEK twenty six million five hundred thousand (26,500,000) for
expensed equipment and fully depreciated machinery and
equipment;
(c) book values for the Vedeby and Verko plant as at Closing Date;
(d) SEK five million (5,000,000) (contribution to Seller's
restructuring costs); and
(e) less any book values of Assumed Liabilities.
The book values shall be as reflected on the Final Closing Asset List.
All sums referred to above are excluding any Value Added Tax, stamp or
transfer taxes and similar taxes, fees or charges.
1.2.2 Payment of Purchase Price
On the Closing Date Purchaser shall pay to Seller on account of the
Purchase Price (the "Closing Payment"), either a sum to be agreed upon
in writing by the parties prior to the Closing Date, or if such sum
cannot be agreed upon, the amount of SEK seven hundred eighty five
million one hundred thousand five hundred nine (785,100,509) , which
sum has been calculated as follows:
(a) Seller's book values (including reserves) for inventories,
machinery, equipment, other tangible assets set out in Exhibit
1.1.1 (b) and prepaid items as referred to in Section 1.1.1
(c), all as reflected on the Interim Asset List;
(b) SEK twenty six million five hundred thousand (26,500,000);
(c) Seller's book values for the Vedeby and Verko plant as
reflected on the Interim Asset List ;
(d) SEK five million (5,000,000); and
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(e) less the book values of Assumed Liabilities as reflected on
the Interim Asset List.
The Closing Payment shall be payable by wire transfer of immediately
available funds to such account as Seller shall designate.
If the Purchase Price exceeds the Closing Payment, Purchaser shall pay
such excess within seven days after the Adjustment Date as defined in
Section 1.4 hereof by wire transfer of immediately available funds to
such account as Seller shall designate. If the Closing Payment exceeds
the Purchase Price, Seller shall pay such excess within seven days
after the Adjustment Date, by wire transfer of immediately available
funds to such account as Purchaser shall designate.
1.3 ASSUMPTION OF LIABILITIES
At the Closing Date hereunder Purchaser shall assume and agree to pay,
discharge or perform, as appropriate, the following liabilities and
obligations of Seller (the "Assumed Liabilities") arising in respect of
the Manufacturing Operations and which are set out in EXHIBIT 1.3(A),
to the extent that the same remain unpaid and undischarged on the
Closing Date and are reflected on the Final Closing Asset List.
1.4 INTERIM AND CLOSING ASSET LISTS; ADJUSTMENT DATE
1.4.1 Interim Asset List
As a basis for the Closing Payment, Seller has prepared a statement of
the Assets and the Assumed Liabilities as of the dates referred to in
said statement, EXHIBIT 1.4.1 (the "Interim Asset List").
1.4.2 Closing Asset List
No later than 45 days after the Closing Date, Seller shall prepare the
Closing Asset List as at the Closing Date in accordance with:
(i) the particular principles set out in EXHIBIT 1.4.2;
(ii) the particular principles and techniques used by Seller prior
to Closing Date; and
(iii) Swedish Generally Accepted Accounting principles and the
principles in the Swedish Accounting Act.
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If the principles referred to above are not consistent with each other,
the principles shall prevail in the order listed.
Any dispute which may arise between Seller and Purchaser as to such
Closing Asset List and the proper amount of the Purchase Price shall be
resolved in the following manner:
(a) Purchaser shall notify Seller in writing within 30 days after
the receipt of the Closing Asset List, such notice shall
specify in reasonable detail Purchaser's objections and the,
in Purchaser's view, correct amount of the Purchase Price;
(b) during the 30 day period following the date of such notice,
Seller and Purchaser shall attempt to resolve such dispute and
to determine the appropriateness of the Closing Asset List and
the Purchase Price; and
(c) if at the end of the 30 day period specified in subsection (b)
above, Seller and Purchaser have not solved the dispute, the
matter shall be referred to arbitration in accordance with
Section 9.
Any objection to Closing Asset List made by Purchaser shall only be
allowed to the extent the aggregate amount of such objections is in
excess of SEK one million five hundred thousand (1,500,000).
1.4.3 Final Closing Asset List
If not disputed, the Closing Asset List shall become final ("the Final
Closing Asset List") on the expiry of the above period during which
Purchaser may raise objections. Otherwise, the Final Closing Asset List
shall be as agreed between the parties or, if no agreement is reached,
as resolved by arbitration.
1.4.4 The Adjustment Date
The Adjustment Date shall be the later of the 46th day after delivery
to Purchaser of the Closing Asset List, or the fifth day after the day
upon which any dispute concerning the amount of the Purchase Price
finally is resolved either by agreement or by arbitration.
1.5 EMPLOYEES
The employees listed in EXHIBIT 1.5 (the "Employees") are currently
employed in the Manufacturing Operations. Under Section 6 b of the
Employment Security Act (lagen om anstallningsskydd), these employees
are (by operation of law) automatically transferred to Purchaser on
Closing Date.
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2. CLOSING; ITEMS TO BE DELIVERED AT CLOSING
2.1 CLOSING
The Closing of the sale and purchase of the Assets shall take place in
the offices of Seller in Nacka Strand on March 27, 1997 or, if later,
on the first working day of the month immediately following the month
during which all the conditions precedent have been fulfilled or
waived, or such other date or place as may be mutually agreed upon in
writing by Purchaser and Seller (the "Closing Date").
In the event the Closing has not occurred on May 2, 1997, either party
shall have the right to terminate this Agreement by giving the other
party written notice of such effect and in such case the provisions in
the event of a termination of negotiations included in the letter of
intent dated November 15, 1996 between the parties shall apply.
2.2 TRANSFER OF TITLE AND POSSESSION; ITEMS TO BE DELIVERED AT CLOSING
2.2.1 Transfer of title and possession
Title, possession and risk of loss or damage to the Assets shall pass
and transfer from the Seller to the Purchaser at 24.00 hours on the
Closing Date.
2.2.2 Items to be delivered at Closing
At the Closing and subject to the terms and conditions herein
contained:
(a) Seller shall deliver to Purchaser or otherwise let Purchaser
take possession of the following:
(i) bills of sale (Sw: Kopebrev) as regards the Vedeby
and Verko plants executed by the owners of the
respective real properties, and such other transfer
notices or documents, in form reasonably satisfactory
to Purchaser, as shall be necessary to transfer and
assign to Purchaser all of the Assets and as regards
the Vedeby plant, mortgage certificates (Sw.
pantbrev);
(ii) all of the agreements included in the Assets;
(iii) certificate signed by Seller confirming the
completion or waiver of all Seller's conditions
precedent as of Closing Date;
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(iv) a written account for any changes in the assets
between signing hereof and Closing Date which will
not be reflected on the Closing Asset List;
(v) a legal opinion substantially as set forth in EXHIBIT
2.2.2 (a) and reasonably acceptable to Purchaser; and
(vi) the original of a letter from the municipality of
Karlskrona regarding an offer to purchase land.
(b) Purchaser shall deliver to Seller the following:
(i) the Closing Payment;
(ii) certificate signed by Purchaser confirming the
completion of all Purchaser's conditions precedent as
of Closing Date;
(iii) legal opinion substantially as set forth in EXHIBIT
2.2.2 (b) and reasonably acceptable to Seller
(iv) bills of sale (Sw: "Kopebrev") as regards the Vedeby
and Verko plants provided by Seller in accordance
with 2.2.2 (a) (i) above but executed by Purchaser;
and
2.2.3 Actions for Completion
In connection with the Closing, all such reasonable steps will be taken
by Seller upon Purchaser's request to put Purchaser in actual
possession and operating control of the Assets.
2.3 THIRD PARTY CONSENT
To the extent that Seller's rights or obligations under any agreement
or commitment or other Asset to be assigned to Purchaser hereunder may
not be assigned without the consent of another person which has not
been obtained, this Agreement shall not constitute an agreement to
assign the same if an attempted assignment would constitute a breach
thereof or be unlawful, but the parties shall proceed as set out in
Section 7.6 to obtain such consent.
3. REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER
3.1.1 Due Diligence
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Purchaser has been given the opportunity to perform due diligence as
Purchaser finds appropriate and acknowledges that it must rely on its
due diligence as regards the Assets and the Employees.
3.1.2 Due Organization
The Seller is a company duly organized, validly existing, and in good
standing under the laws of Sweden.
3.1.3 Authority
The Seller has full right, power and authority, without the consent of
any other person, to execute and deliver this Agreement and to carry
out the transaction contemplated hereby. All corporate acts or
proceedings required to be taken by the Seller to authorize the
execution, delivery and performance of this Agreement and all
transactions contemplated hereby, have been duly and properly taken.
3.1.4 Assets
The Seller hereby represents and warrants to Purchaser that the Assets
and the Assumed Liabilities shall be transferred "as is". Buyer hereby
acknowledges that Seller has made no express or implied representations
to Buyer regarding the Assets or Assumed Liabilities, including, but
not limited to, the condition of the Assets and the validity or
enforceability of the contracts transferred save as expressly set out
below. Without limiting the aforesaid, Purchaser is in particular aware
of the fact that there are some defects in the real property, described
in EXHIBIT 3.1.4 for which Purchaser shall have no right whatsoever to
claim compensation for from Seller.
3.1.5 Inventory and work orders
The inventory included in the Assets does not contain products and
materials which in Seller's best judgment are not projected to be used
in the manufacturing of products for Seller during the two-year period
following Closing Date.
At Closing Date the stock of work orders will not contain any work
orders submitted more than eight weeks prior to such Closing Date.
3.1.6 Employees
The names, ages, date of commencement of employment and annual salaries
of the Employees are stated in EXHIBIT 3.1.6. In said exhibit, a
description is also
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enclosed on the employees' pension rights and other employment
benefits. In addition to these benefits, there are no other employment
benefits save for customary benefits.
Seller has fulfilled its obligations to negotiate under the Swedish Act
on Co-determination (Sw: lagen om medbestammande i arbetslivet).
3.1.7 Effect of Agreement
The execution, delivery and performance of this Agreement by Seller and
the consummation of the transactions contemplated hereby do not and
will not: (a) violate or result in the breach of any of the terms or
conditions of, or give rise to acceleration of any monies due under,
any agreements or other instrument or obligation to which Seller is a
party and which is being assigned hereunder or by which any of the
Assets may be bound or affected; (b) except as provided for in this
Agreement and associated agreements, result in the creation or
imposition of any lien, security interest, charge, encumbrance,
restriction or right, including rights of termination or cancellation
in or with respect to, or otherwise adversely affect, any of the
Assets; or (c) violate any law or any rule or regulation of any
administrative agency or governmental body or any judicial or
administrative order, award, judgment or decree.
3.1.8 Absence of Change
Since the execution of this Agreement, there has been no significant
change in the condition of the Assets or the Assumed Liabilities,
financially or otherwise other than changes occurring in the ordinary
course of business, which changes have not materially adversely
affected the Manufacturing Operations, the Assets or the Assumed
Liabilities as a whole. To Seller's knowledge, there is no fact
relating to the Assets or the Assumed Liabilities that materially
adversely affects the same or which may in the future adversely affect
the same.
3.1.9 Title to Assets
Seller (or in case Seller shall cause the transfer, the transferor) has
good marketable title to all the Assets, subject to no mortgage,
pledge, lien, security interest, lease, charge, encumbrance or
conditional sale or other retention agreement. By virtue of the
deliveries made on the Closing Date, Purchaser will obtain good and
marketable title to the Assets, and, except as provided for in this
Agreement and associated agreements the Assets will be free and clear
of all liens, mortgages, pledges, encumbrances, security interest,
charges, equities, and restrictions of any nature whatsoever, save as
set out in EXHIBIT 3.1.9.
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3.1.10 Leased and Licensed Property and Assets
All leases and licenses to the Assets are valid and effective in
accordance with their respective terms, and there are no existing
defaults or events that with notice or lapse of time or both would
constitute defaults, the consequences of which would permit the
acceleration of payments due under or the termination of any of such
leases and licenses, or which would have a material adverse effect on
the Assets or the Manufacturing Operations. Seller has not received any
notice of default nor has any knowledge of any claimed default, with
respect to any lease or license. The continuation, validity and
effectiveness of all such leases and licenses assigned to Purchaser
hereunder will in no way be adversely affected by the purchase and sale
of the Assets.
3.1.11 Proprietary Rights
Seller has complete and undisputed title and ownership of or rights to
utilize all the items listed in Exhibits 1.1.2(d) and (e) necessary for
or used in the Manufacturing Operations as now conducted and as
proposed to be conducted without any conflict with or infringement of
the rights of other. Seller has not received any communications nor is
it aware of any entity alleging that it has violated or, by conducting
the Manufacturing Operations as proposed, would violate any proprietary
rights of any other person or entity. It is not aware that any of its
employees or consultants is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgement, decree or order of any court or
administrative agency, that would interfere with the use of his or her
best efforts to promote the interests of Purchaser or that would
conflict with the Manufacturing Operations as proposed to be conducted.
Neither the execution nor delivery of this Agreement, nor, to the best
knowledge of the Seller, the conduct of the Manufacturing Operations as
proposed, will, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any of such employees or
consultants or the Seller is now obligated.
To the best of its knowledge Seller is not making use of any
confidential information of third parties nor any confidential
information in which any of its present or, to its actual knowledge,
past employees or other service providers, has claimed a proprietary
interest; and Seller is not actually aware of any facts that would give
rise to such a claim.
3.1.12 Agreements, Etc.
None of the rights of Seller under any agreement, permit, approval or
authorization, etc., listed in Exhibit 1.1.1(e) hereto and assigned or
transferred to Purchaser hereunder will be adversely affected by the
purchase and sale of the
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Assets hereunder. Seller has performed all material obligations
required to be performed by it on or prior to the date hereof under
each said item and there is no default or claimed or purported or
alleged default or state of facts that with notice or lapse of time or
both would constitute a default on the part of any party in the
performance of any obligation to be performed or paid by any party
under any of said items. No party to any of said items intends to
cancel, withdraw, modify or amend such items.
3.1.13 Employees and Employee Plans
There are no pending claims by or on behalf of any of the Seller
pension plans, by any employee or beneficiary covered under any such
Seller pension plan, or otherwise involving any such Seller pension
plan (other than routine claims for pension benefits). There are no
strikes or labor disputes pending or threatened by any of Seller's
employees save as set out in EXHIBIT 3.1.13.
3.1.14 Environmental and Safety Matters
There has been no disposal, release, or threatened release of hazardous
substance or hazardous waste on or beneath and remain located on or
beneath any of the real property upon which the Manufacturing
Operations is conducted or upon which any of the Assets are held or
maintained, other than those authorized by permit under Swedish laws.
Seller has no knowledge of the presence, disposal, release, or
threatened release of hazardous substance or hazardous waste on or
beneath and remain located on or beneath any of the real property upon
which the Manufacturing Operations are conducted or upon which any of
the Assets are held or maintained which may have occurred prior to
Seller taking title to the real property, other than those authorized
by permit under Swedish laws. Seller has properly conducted all
activities for the removal, disposal, release, and/or processing of
Seller's waste and by-products, including any hazardous substances or
hazardous waste, and has made and maintained all reports, studies, and
evaluations required by Swedish law.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.2.1 Due Organization
The Purchaser and Flextronics Holding AB are companies duly organized,
validly existing and in good standing under the laws of Sweden.
Correspondingly, Flextronics International Ltd. is a company duly
organized, validly existing and in good standing under the laws of
Singapore.
3.2.2 Authority
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The Purchaser, Flextronics Holding AB and Flextronics International
Ltd. have individually the full right, power and authority, without the
consent of any other person, to execute and deliver this Agreement,
respectively, the Guarantee, and to carry out the transactions
contemplated hereby. All corporate acts or proceedings required to be
taken by the Purchaser, Flextronics Holding AB and Flextronics
International Ltd. to authorize the execution, delivery and performance
of this Agreement and the Guarantee and all transactions contemplated
hereby have been duly and properly taken.
3.2.3 Plans for implementation and secure sourcing
The Purchaser has in good faith prepared the implementation plan and
the plan for securing sourcing attached hereto as EXHIBIT 3.2.3 (A) AND
(b).
4. AGREEMENTS PENDING CLOSING/COVENANTS
4.1 AGREEMENTS/COVENANTS OF SELLER PENDING THE CLOSING
Seller covenants and agrees that, pending the Closing and except as
otherwise agreed to in writing by Purchaser:
4.1.1 Actions of Seller
Seller will not knowingly take any action which would result in a
breach of any of its representations and warranties hereunder.
Furthermore, Seller shall co-operate with Purchaser and use its best
efforts to cause all of the conditions to the obligations of Seller and
Purchaser under this Agreement to be satisfied on or prior to the
Closing Date.
4.1.2 Operations in the Ordinary Courses
The Manufacturing Operations shall be conducted solely in the ordinary
course consistent with past practice except as required for the
separation of the Assets and the Manufacturing Operations from Seller's
business.
4.1.3 Maintenance of Physical Assets
Seller shall continue to maintain and service the physical assets used
in the conduct of the Manufacturing Operations in the same manner as
has been its consistent past practice.
4.1.4 Employees and Business Relations
Seller shall use its best efforts to keep available the services of the
present employees and agents of the Manufacturing Operations and to
maintain the
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relations and goodwill with the suppliers, and any others having
business relations with the Manufacturing Operations.
4.1.5 Maintenance of Insurances
Seller shall notify Purchaser of any changes in the terms of the
insurance policies currently in effect.
4.1.6 Compliance with Laws etc.
Seller shall comply with all laws, ordinances, rules, regulations
and orders applicable to the Assets or the Manufacturing
Operations, the non-compliance with which might materially affect
the Assets.
4.1.7 Sale of Assets; Negotiations
Seller shall not, directly or indirectly, sell or encumber all or
any part of the Assets, other than in the ordinary course of the
business consistent with past practice, or initiate or participate
in any discussions or negotiations or enter into any agreement to
do any of the foregoing. Seller shall not provide any confidential
information concerning the Assets or the Manufacturing Operations
to any third party other than in the ordinary course of business.
4.1.8 Access
Seller shall give to Purchaser the right to reasonably inspect,
during normal business hours, all of the Assets. Such inspection
shall be carried out as agreed between the parties and in such
manner that the business of Seller is not disturbed.
4.1.9 Press releases
Except as required by applicable law, Seller shall not give notice
to third parties or otherwise make any public statement or
releases concerning this Agreement or the transactions
contemplated hereby except for such written information as shall
have been approved in writing by the Purchaser.
4.1.10 Competition Authorities
Seller shall prepare with Purchaser's concurrence all necessary
filings with competent Swedish and, if deemed necessary by the
parties, EEC competition authorities.
4.1.11 Information Systems
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Seller shall take such action for the separation of the
information system as described in EXHIBIT 4.1.11.
4.2 AGREEMENTS OF PURCHASER PENDING THE CLOSING
Purchaser covenants and agrees that, pending the Closing and
except as otherwise agreed to in writing by Seller:
4.2.1 Actions of Purchaser
Purchaser will not knowingly take any action which would result in
a breach of any of its representations and warranties hereunder.
Furthermore, Purchaser shall co-operate with Seller and use its
best efforts to cause all of the conditions to the obligations of
Purchaser and Seller under this Agreement to be satisfied on or
prior to the Closing Date.
4.2.2 Confidentiality
The Confidentiality Letter signed by Flextronics International
Ltd. on October 9, 1996, and enclosed as EXHIBIT 4.2.2 shall apply
to Purchaser, and, without limiting the aforesaid, shall also
apply to this Agreement and also apply to Purchaser regarding all
"confidential information" (as defined in the letter) obtained by
Purchaser until Closing Date.
4.2.3 Press Releases
Except as required by applicable law, Purchaser will not give
notice to third parties or otherwise make any public statement or
releases concerning this Agreement or the transactions
contemplated hereby except for such written information as shall
have been approved in writing by Seller.
4.2.4 Competition Authorities
Purchaser shall use its reasonable best efforts to assist Seller
in preparing the necessary filings with competent Competition
Authorities. Each party shall carry its costs (legal fees, etc.,
included) attributable to such filings.
4.2.5 Information Systems
Purchaser shall assist Seller in taking such actions as described
in EXHIBIT 4.1.11.
5. CONDITIONS PRECEDENT TO THE CLOSING
5.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
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All obligations of Purchaser under this Agreement are subject to
the fulfillment, satisfaction or waiver prior to or at the
Closing, of each of the following conditions precedent:
5.1.1 Compliance with this Agreement
Seller shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied
with by it prior to or at the Closing.
5.1.2 Material Adverse Changes
The Assets or Assumed Liabilities shall not have been and shall
not be threatened to be materially adversely affected in any way
as a result of any event or occurrence.
5.1.3 Information Systems
The information systems in the Manufacturing Operations shall have
been separated from Seller's information system in such manner
that the information systems will function as set out in EXHIBIT
5.1.3 (a). The Seller and the Purchaser shall also have entered
into the Information Systems Services Agreement in accordance with
the principles set out in EXHIBIT 5.1.3.(b).
5.1.4 Competition Authorities
Any of the following events shall have occurred:
(i) the expiry of a thirty day period from the day a complete
notification of the transactions contemplated by this
Agreement was made in accordance with the Swedish
Competition Act, without a decision by the Competition
Authority to carry out a special investigation;
(ii) the decision by the Competition Authority not to carry out
a special investigation and the approval or acceptance of
all filings made relating to the transactions between
Ericsson and Flextronics; or
(iii) the expiry of a three month period from the day the
Competition Authority decided to carry out a special
investigation, without an action having been brought before
the Stockholm District Court in accordance with Section 34
of the Swedish Competition Act.
5.1.5 Representations and Warranties
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The representations and warranties of Seller set forth in Section
3.1 of this Agreement shall have been true and correct when made
and shall be true and correct at and as of the Closing Date as if
such representations and warranties were made as of such date and
time.
5.1.6 Legal opinion
Seller shall have delivered a legal opinion set substantially as
set out in EXHIBIT 2.2. (a).
5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER
All obligations of Seller under this Agreement are subject to the
fulfillment, satisfaction or waiver prior to or at the Closing, of
each of the following conditions precedent.
5.2.1 Compliance with this Agreement
Purchaser shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or
complied with by them prior to or at the Closing.
5.2.2 Implementation Plan
The Purchaser shall have substantially complied with the
implementation plan attached as EXHIBIT 3.2.3 (a) hereto.
5.2.3 Lease Agreement, Service Agreement
The parties shall have entered into the lease agreement and the
service agreement described in EXHIBIT 5.2.3 (a) AND (b) hereto.
The Lease and Service Agreement shall provide for an amount of SEK
two million (2,000,000) to be paid by Seller for lease of premises
and services during the twelve month period following Closing
Date.
5.2.4 Information System
The information systems in the Manufacturing Operations shall have
been separated from the Seller's information system in such manner
that the information system will function as set out in EXHIBIT
5.1.3 (a). The Seller and the Purchaser shall also have entered
into the Information Systems Services Agreement as attached hereto
as EXHIBIT 5.1.3 (b).
5.2.5 Competition Authorities
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Any of the following events shall have occurred:
(i) the expiry of a thirty day period from the day a complete
notification of the transactions contemplated by this
Agreement was made in accordance with the Swedish
Competition Act, without a decision by the Competition
Authority to carry out a special investigation;
(ii) the decision by the Competition Authority not to carry out
a special investigation and the approval or acceptance of
all filings made relating to the transactions between
Ericsson and Flextronics; or
(iii) the expiry of a three month period from the day the
Competition Authority decided to carry out a special
investigation, without an action having been brought before
the Stockholm District Court in accordance with Section 34
of the Swedish Competition Act.
5.2.6 Representations and Warranties
The representations and warranties of Purchaser set forth in
Section 3.2 of this Agreement shall have been true and correct
when made and shall be true and correct at and as of the Closing
Date as if such representations and warranties were made as of
such date and time.
5.2.7 Legal Opinion
Purchaser shall have delivered a legal opinion substantially as
set out in EXHIBIT 2.2.2 (b).
6. INDEMNIFICATION
6.1 GENERAL INDEMNIFICATION OBLIGATION OF THE SELLER
From and after the Closing Date, Seller will indemnify and hold
harmless Purchaser against and in respect of any and all damages,
losses, liabilities, costs and expenses incurred or suffered by
the Purchaser that relate to:
(i) any and all liabilities and obligations of Seller except
for those liabilities and obligations of Seller which
Purchaser assumes pursuant to this Agreement;
(ii) any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant of Seller
under this Agreement.
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6.2 GENERAL INDEMNIFICATION OBLIGATION OF PURCHASER
From and after the Closing Date, Purchaser will indemnify and hold
harmless Seller against and in respect of any and all damages,
losses, liabilities, costs and expenses incurred or suffered by
Seller that relate to:
(i) any and all liabilities and obligations of Seller which
have been assumed by Purchaser to this Agreement;
(ii) any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of
Purchaser under this Agreement.
6.3 METHOD OF ASSERTING CLAIMS, ETC.
Any claim in respect of breach of representations and warranties
given hereunder shall be made promptly after the claiming party
becomes aware of the breach but under all circumstances not later
than six months after Closing Date.
6.4 OTHER RIGHTS AND REMEDIES
The indemnification rights of the parties under this Section 6 are
exclusive and sever the rights and remedies the parties may have
at law or otherwise for any misrepresentation, breach of warranty
or failure to fulfill any agreement or covenant hereunder.
6.5 LIMITATION OF LIABILITY
Any claim for a misrepresentation or a breach of warranty shall
only be allowed to the extent the aggregate amount of all losses,
deficit, damages, costs, injuries and expenses of the indemnity
hereunder is an amount in excess of MSEK three (3).
The Seller shall furthermore not have any liability for any single
claim in respect of a breach of a warranty or misrepresentation
which does not amount to SEK one hundred thousand (100,000).
A party's total liability hereunder for misrepresentations or
breach of warranties shall in no circumstances exceed MSEK one
hundred (100).
6.6 TAX CONSEQUENCES
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When calculating the amount of indemnity, said amount shall be
reduced by a sum corresponding to any reduced tax liability caused
by the losses, damages, costs, etc., for which the indemnity shall
compensate.
6.7 MITIGATION OF LOSSES
In the event of a misrepresentation or breach of warranty or other
breach of this Agreement, the aggrieved party shall use its
reasonably best efforts to mitigate the losses, damages, costs,
expenses, etc.
6.8 REDUCTION OF INDEMNITY
In the event of a misrepresentation or a breach of warranty for
which the aggrieved party claims indemnity, all deviations in the
positive relative to the representations or warranties given here
under shall be taken into account and shall reduce the indemnity
claimed by the aggrieved also party by a corresponding amount (net
after tax consequences, if any).
7. POST CLOSING MATTERS
7.1 DISCHARGE OF OBLIGATIONS
From and after the Closing Date Seller shall pay and discharge, in
accordance with past practice but not less than on a timely basis,
(i) all obligations and liabilities incurred and due prior to
the Closing Date in respect of the Manufacturing
Operations and the Assets (except for those expressly
assumed by Purchaser hereunder),
(ii) all components and material ordered and delivered prior
to Closing date but invoiced within six months after
Closing Date,
(iii) services and maintenance on any of the Assets performed
prior to Closing Date but invoiced within six months after
Closing Date,
(iv) reimbursable travel expenses incurred by Employees prior
to Closing Date but invoiced after Closing Date,
(v) retroactive salary to Employees which has been agreed upon
prior to Closing Date and which is attributable to time
prior to Closing Date but which has not been paid out
prior to such date, and
(vi) in the event the Closing Date occurs on March 27, 1997,
salary to Employees and rent for the Verko property for
the period from March 27, 1997 up to and including March
31, 1997.
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7.2 PAYMENTS AND OTHER PROPERTY RECEIVED
Seller and Purchaser each agree that after the Closing Date they
will hold and will promptly transfer and deliver to the other,
from time to time as and when received by them, any cash, checks
with appropriate endorsements (using their best efforts not to
convert such checks into cash), or other property that they may
receive on or after the Closing Date which properly belongs to the
other party, including without limitation any insurance proceeds,
and will account to the other for all such receipts.
7.3 IS/IT
The parties shall continue the work for the separation of computer
system in accordance with the Information Systems Service
Agreement and as set out in the Post Closing Information System
Plan attached hereto as EXHIBIT 7.3. As set out in the Information
Systems Service Agreements, Seller shall provide services to the
same extent and charge as assumed in the budget prepared by Seller
for the Manufacturing Operations in 1997.
7.4 VEDEBY PLANT
In the event Purchaser would dispose of the real property
Karlskrona Telefonen 1 within five (5) years after Closing Date,
and the market value at the time for such disposal would be
different from the book value as reflected on the Final Closing
Asset List, fifty per cent of the difference shall be allocated to
Seller. If such difference is in the positive, the sum allocated
to Seller shall be paid in immediately available funds by
Purchaser into an account designated by Seller within 10 days of
disposal together with an account for the computation. If the
difference is in the negative, the sum allocated to Seller shall
be paid in immediately available funds by Seller into an account
designated by Purchaser within 10 days from the later of the day
of closing date of the disposal or Purchaser's request.
In the event the real property has been sold to a third party not
affiliated with Purchaser and without any interest of whatever
nature in Purchaser or Purchaser's affiliate, or vice versa, the
purchase price shall be deemed to be the market value.
Also a partial disposal or a disposal caused by creditors shall
give effect to Seller's right and obligation hereunder (in the
event of a partial disposal only, the book value reflected on the
Final Closing Asset List attributable to such part shall be taken
into account).
7.5 INVENTORY
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In the event the inventory included in the Assets as listed in
EXHIBIT 1.1.1 (B) contains products and materials which the
parties agree have become obsolete or which have not been used in
the manufacturing of products for Seller as of the second
anniversary of the Closing Date, Seller shall repurchase such
inventory for the price paid by Purchaser. No later than 30 days
after such agreement or the second anniversary, Purchaser shall
submit to Seller a list of said products and materials and the
related Purchase Price. Within 30 days of receipt of this
information, Seller shall remit said related Purchase Price to
Purchaser against delivery of the products and material concerned.
7.6 THIRD PARTY CONSENTS
If the transfer of any of the Assets require any third party
consents, Seller shall use its best efforts to obtain such consent
and Purchaser shall give Seller all reasonable assistance in such
efforts. Until such consent is obtained, or, if such consent
cannot be obtained, the parties shall jointly procure that another
solution is found which is acceptable to both parties. Upon
Seller's request, Purchaser shall, in the event of an agreement,
perform such agreements in the name of Seller to the extent
permitted but on Purchaser's account (i.e. all revenues and costs
attributable to the agreement shall be allocated to Purchaser).
7.7 ACTIONS FOR THE COMPLETION OF THE TRANSFER
After the Closing Date, the parties shall execute or take all such
other documents or actions to the extent they have not been
accomplished on the Closing Date, as shall be required in order to
transfer the Assets to Purchaser.
7.8 NEW EMPLOYMENT AND EMPLOYMENT CONDITIONS
7.8.1 Transfer of Employees
To the extent the Employees would not be transferred automatically
by law to Purchaser, Purchaser shall offer to such employees new
employment on terms and conditions not less favorable to the
employees than those enjoyed as at the day of transfer.
Purchaser shall provide to the employees transferred continued
enjoyment of perquisites substantially to the same extent as
currently in practice.
Seller and Purchaser shall use best efforts to cause the Employees
to accept the transfer. Any costs for such efforts shall be
carried jointly by the parties.
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7.8.2 Reimbursement for Compensation to Certain Employees
7.8.2.1 Ericsson shall reimburse Flextronics for the costs for (i) salary
during period of notice and (ii) agreed severance pay to employees
who have been given notice of termination prior to Closing Date
but whose employment will expire after Closing Date. The employees
concerned are listed in EXHIBIT 7.8.2.1 together with the amounts
involved and the agreements made. Ericsson's liability under this
undertaking shall not exceed Flextronics' actual costs and in no
event shall such liability exceed SEK two million five hundred
forty five thousand five hundred and seventy six (2,545,576).
7.8.2.2 Ericsson shall carry the costs for early retirement compensation
to such employees who have exercised their rights to early
retirement or have declared such intention prior to the Closing
Date if and to the extent not covered under any other early
retirement pensions. Flextronics shall not be liable for such
costs.
For employees who declare their intention to exercise such rights
after Closing Date, Flextronics shall carry the corresponding
costs without any right to receive compensation from Ericsson.
7.8.3 Loans to employees
As set out in EXHIBIT 3.1.6, some of the Employees have been
granted subsidized loans. The creditor of these loans is Ericsson
Finans but Seller has guaranteed these loans. Purchaser shall
replace such guarantees by guarantees given by Purchaser and
Purchaser shall participate in the administration of these loans
to the same extent as Seller has done prior to Closing Date.
7.9 COMPENSATION FOR DEFECTS IN REAL PROPERTY
Seller shall procure that a compensation of SEK one million four
hundred thousand (1,400,000) is paid out to Flextronics as
compensation for defects in the real property, inter alia, as
described in Exhibit 3.1.4. Such compensation shall be paid after
Closing Date upon Flextronics' invoice. The invoice is to be
addressed to the entity designated by Ericsson.
7.10 CONFIDENTIALITY OF SELLER
After the Closing Date, except as may be required for tax purposes
or otherwise by law, Seller shall not disclose or divulge,
directly or indirectly, to third parties any information relating
to the Assets or the Manufacturing Operations unless the
information:
(i) concerns Excluded Assets;
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(ii) is not of a confidential nature; or
(iii) becomes generally known otherwise than by a breach of this
confidentiality undertaking.
7.11 CONFIDENTIALITY OF PURCHASER
After the Closing Date, except as may be required for tax purposes
or otherwise by law, Purchaser shall not disclose or divulge,
directly or indirectly, to third parties any information relating
to the Excluded Assets, any liabilities of Seller which are not
included in the Assumed Liabilities or Seller's business unless
such information:
(i) is not of a confidential nature;
(ii) becomes generally known otherwise than by a breach of this
confidentiality undertaking; or
(iii) was known to Purchaser prior to its receipt from Seller.
8. MISCELLANEOUS
8.1 EXPENSES
Except as otherwise provided in this Agreement, each party hereto
shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions of this Agreement,
and the consummation of the transactions contemplated hereby.
8.2 ENTIRE AGREEMENT
This Agreement sets forth the entire understanding of the parties
hereto with respect to the transaction contemplated hereby. It
shall not be amended or modified except by written instrument duly
executed by each of the parties hereto. Any and all previous
agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, are
superseded by this Agreement.
8.3 ASSIGNMENT
This Agreement may not be assigned by any party hereto without the
prior written consent of the other parties. Notwithstanding the
aforesaid, Seller shall be entitled to assign all its rights
and obligations hereunder to other entities
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which are wholly owned by Telefonaktiebolaget LM Ericsson or its
wholly owned subsidiaries.
8.4 NOTICES
Any notice, request, demand, consent or other communication which
is required or permitted hereunder shall be in writing and shall
be deemed given only if delivered personally or sent by telefax or
by registered mail as follows:
If to Seller, to:
Ericsson Business Networks AB
131 89 STOCKHOLM
Fax 08-422 10 10
If to Purchaser, to:
Flextronics International Sweden AB
Box 532
371 23 Karlskrona
Tel: 0455-544 00
Fax: 0455-544 01 Purchaser's official switchboard number -
with a copy to Flextronics International Ltd.,
514 Chai Chee Lane
No. 04-13 Singapore 469029
Fax +65-448 6040
8.5 EXHIBITS
All Exhibits referred to herein are intended to be and hereby are
specifically made a part of this Agreement.
8.6 SEVERABILITY
If any provision of this Agreement at any time would be held
invalid or unenforceable under applicable law, the parties shall
endeavor to amend such provision so that the intention thereof can
be carried out to the extent legally possible.
9. GOVERNING LAW AND ARBITRATION
9.1 GOVERNING LAW
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This Agreement shall be governed by Swedish substantive law.
9.2 ARBITRATION
Any dispute, controversy or claim arising out of or in connection
with this Agreement, or the breach, termination or invalidity
thereof, shall be settled by arbitration in accordance with the
Rules of the Arbitration Institute of Stockholm Chamber of
Commerce. The place of arbitration shall be Stockholm. The
language to be used in the arbitral proceedings shall be English.
10. ENTERING INTO FORCE
This Agreement shall enter into force upon the approvals of the
boards of directors in Seller and Purchaser. Immediately after
such approval, each party shall notify each other. In the event no
approval has been given within eight (8) weeks this Agreement
shall be null and void and the provisions in the event of the
termination of negotiations included in the letter of intent dated
November 15, 1996, between the parties shall apply.
* * *
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement in duplicate on the date first written.
ERICSSON BUSINESS FLEXTRONICS INTERNATIONAL
NETWORKS AB SWEDEN AB
------------------------ -----------------------
By: Rolf Erikssson By: Michael E. Marks
------------------------ ------------------------
By: Gosta Burlin By: Ronny Nilsson
GUARANTEE
We, the parties to this guarantee, hereby jointly and severally guarantee as for
a debt of our own (Sw: proprieborgen) the due and punctual fulfillment of all
the Purchaser's obligations under the Agreement as set out above. Sections 9.1
and 9.2 of the Agreement shall apply to this Guarantee provided, however, that
Flextronics and its Affiliates may only appoint one arbitrator jointly.
Date: February 12, 1997
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Place: Nacka
FLEXTRONICS FLEXTRONICS INTERNATIONAL LTD.
HOLDING AB
- ---------------------- ------------------------------
By: Michael E. Marks
By: Michael E. Marks
- ----------------------
By: Ronny Nilsson
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EXHIBITS
Exhibit 1.1.1(a) Real Property
Exhibit 1.1.1(b) Tangible Assets
Exhibit 1.1.1(c) Receivables
Exhibit 1.1.1(d) Expensed Equipment
Exhibit 1.1.1(e) Agreements, permits, approvals authorization
Exhibit 1.1.1(f) All Orders
Exhibit 1.1.1(g) Computer Software
Exhibit 1.1.1(h) Information, Files, Records etc.
Exhibit 1.1.2(a) Excluded Assets, Properties or Rights etc.
Exhibit 1.1.2(b) Excluded Specific Tools
Exhibit 1.1.2(d) Excluded Information Systems
Exhibit 1.1.2(d) Excluded Patents, Trademark, Service Mark
Exhibit 1.1.2(e) Excluded Technologies, Technical Designs or
Exhibit 1.1.2(g) Excluded Inventory
Exhibit 1.1.2(h) Excluded Other Assets, Properties or Rights
Exhibit 1.3(a) Assumed Liabilities and Obligations
Exhibit 1.4.1 Interim Asset List
Exhibit 1.4.2 Particular Accounting Principles
Exhibit 1.5 Employees
Exhibit 2.2.2(a) Legal Opinion of Purchaser
Exhibit 2.2. (b) Legal Opinion of Seller
Exhibit 3.1.4 Defects in Real Property
Exhibit 3.1.6 Names, Positions etc. of Employees
Exhibit 3.1.9 Mortgages, liens etc.
Exhibit 3.1.13 Labour disputes or claims
Exhibit 3.2.3(a) Implementation Plan
Exhibit 3.2.3(b) Plan for Secure Sourcing
Exhibit 4.1.5 Insurance Policies
Exhibit 4.1.11 Separation of the Information System
Exhibit 4.2.2 Confidentiality Letter
Exhibit 5.1.5(a) Separated Information system
Exhibit 5.1.5(b) Principles for Information Systems Services Agreement
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Exhibit 5.2.4(a) Lease Agreement for Excluded Assets
Exhibit 5.2.4(b) Service Agreement
Exhibit 7.3 Post Closing Information System Plan
Exhibit 7.8.2 Employees Given Notice of Termination