SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
October 15, 1997
Date of Report (Date of earliest event reported) ...............................
NDC AUTOMATION, INC.
................................................................................
(Exact name of registrant as specified in its charter)
DELAWARE 0-18253 56-1460497
................................................................................
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No)
of incorporation)
3101 LATROBE DRIVE CHARLOTTE NC 28211
................................................................................
(Address of principal executive offices) (Zip Code)
(704) 362-1115
Registrant's telephone number, including area code .............................
................................................................................
(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
None.
Item 2. Acquisition or Disposition of Assets.
None.
Item 3. Bankruptcy or Receivership.
None.
Item 4. Changes in the Registrant's Certifying Accountant.
None.
Item 5. Other Events.
Exhibit 10: Strategic Alliance Agreement dated October 6, 1997
between Company and Munck Automation Technology, Inc. (certain material has been
omitted pursuant to a request for confidential treatment)
Item 6. Resignations of Registrant's Directors.
None
Item 7. Financial Statements and Exhibits.
None
Item 8. Change in Fiscal Year.
None
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NDC AUTOMATION, INC.
Date: October 15, 1997 By:____/s/ Claude Imbleau_____________
Claude Imbleau
Vice President of Finance and CFO
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EXHIBIT 10.
*** : CERTAIN MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES EXCHANGE
COMMISSION.
STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT (the "Agreement") is made as of this
6th day of October, 1997 (the "Effective Date"), by and between NDC AUTOMATION,
INC., a corporation incorporated under the laws of the State of Delaware, U.S.A.
("NDC"), and MUNCK AUTOMATION TECHNOLOGY, INC., a corporation incorporated under
the laws of the State of Virginia, U.S.A ("Munck"). (NDC and Munck are
collectively referred to herein as "Parties" and individually as a "Party").
RECITALS:
A. NDC is in the business of supplying certain automated guided vehicle
systems ("AGVS") controls hardware, software and engineering services primarily
to OEMs (defined hereinafter.
B. Munck is in the business of manufacturing and supplying certain AGVS
vehicles and systems and automatic storage and retrieval systems ("AS/RS")
primarily to End-Users (defined hereinafter ).
C. NDC and Munck have determined that it is in their best interests to
form a strategic alliance as set forth herein in order to create additional
business opportunities for both Parties' products and services in the North
American AGVS industry.
D. NDC and Munck desire to record their mutual understandings
regarding the establishment of their strategic alliance and cooperation as set
forth herein.
NOW, THEREFORE, in consideration of the recitals, Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby covenant and agree as follows:
1. DEFINITIONS. In addition to the terms defined in the recitals
hereof, as used in this Agreement, the following terms shall have the following
meanings unless the context otherwise requires:
"AFFILIATE" means with respect to any Person, any other Person which,
whether directly or indirectly, is Controlled by that first Person, Controls
that first Person, or is under common Control with that first Person.
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"CONTROL" means the ownership, directly or indirectly, of a majority of the
voting power of the securities of an entity.
"CONFIDENTIAL INFORMATION" shall mean any and all proprietary business
information of the disclosing Party or its Affiliates treated as confidential or
secret by the disclosing Party or its Affiliates (that is, it is the subject of
efforts by the disclosing Party or its Affiliates that are reasonable under the
circumstances to maintain its secrecy) that does not constitute a Trade Secret,
including, without limitation, any and all proprietary information of the
disclosing Party or its Affiliates of which the receiving Party becomes aware as
a result of the receiving party's access to and presence at the disclosing
party's facilities.
"END-USER" shall mean any third party that purchases AGVS products or
services for its own business use rather than for distribution or resale.
"MUNCK COMPETITORS" shall mean ***
"NDC GENERAL TERMS AND CONDITIONS" shall mean the General Terms and
Conditions of NDC attached hereto as Exhibit B, as existing at the time of this
Agreement.
"NDC PARTNERS" shall mean ***
"NDC PRICE LIST" shall mean the 1997 Price List and Service Schedule
of NDC attached hereto as Exhibit A and incorporated herein by reference, as
such price list may be changed by NDC, from time to time, twelve (12) months
after the Effective Date upon at least sixty (60) days' prior written notice to
Munck; provided, however, that after such twelve-month period, such price list
shall at all times be NDC's then current price list communicated to NDC's
customers and potential customers.
"NDC PRODUCTS" shall mean the AGVS controls hardware, software and
engineering services set forth in the then current NDC Price List from time to
time.
"OEM" shall mean any third party that purchases AGVS products or
services for distribution or resale rather than its own business use.
"PERSON" shall mean any person, firm, corporation, partnership,
limited liability company, limited liability partnership, trust or other legal
entity.
"PROPRIETARY INFORMATION" shall mean collectively the Confidential
Information and the Trade Secrets. "Proprietary Information" also includes
information that has been disclosed to a Party (or any of its Affiliates) by a
third party that such Party (or any of its Affiliates) is obligated to treat as
confidential or secret.
"TERRITORY" shall mean North America.
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"TRADE SECRETS" SHALL mean information related to the products,
services or business of the disclosing Party or its Affiliates that (a) derives
economic value, actual or potential, from not being generally known to or
readily ascertainable by other Persons who can obtain economic value from its
disclosure or use; and (b) is the subject of efforts by the disclosing Party or
its Affiliates that are reasonable under the circumstances to maintain its
secrecy, including, without limitation, (l) marking any information reduced to
tangible form clearly and conspicuously with a legend identifying its
confidential or proprietary nature; (2) identifying any oral presentation or
communication as confidential immediately before, during or after such oral
presentation or communication; or (3) otherwise treating such information as
confidential or secret. Assuming the criteria in clauses (a) and (b) above are
met, "Trade Secrets" include, but are not limited to, technical and nontechnical
data, formulas, patterns, designs, compilations, computer programs and software,
devices, inventions, methods, techniques, drawings, processes, financial plans,
product plans, lists of actual or potential customers and suppliers, research,
development, existing and future products, the existence, nature and details of
the relationship between the Parties, and employees of the disclosing Party and
its Affiliates.
2. MUNCK'S OBLIGATION TO PURCHASE NDC PRODUCTS.
2.1 Munck's Obligation to Use Solely NDC Products. During the
Term hereof, Munck agrees to use solely NDC AGVS controls hardware and
associated software, rather than any of its own or any other Person's AGVS
controls hardware and associated software, in all AGVS vehicles, systems,
products and services offered or sold by Munck or its Affiliates to any Person
within the Territory, unless otherwise agreed in writing by the Parties. Such
agreement shall not be unreasonably withheld.
2.2 Exception for AGVS Wire Technology. Notwithstanding anything
in Section 2. l to the contrary, Munck shall be permitted to use its own AGVS
wire technology in sales by Munck or its Affiliates to End-Users that are
existing users of Munck's AGVS wire technology on the Effective Date.
3. ***
4. OTHER TERMS AND CONDITIONS APPLICABLE TO MUNCK'S PURCHASES OF NDC
PRODUCTS. During the Term hereof, the Parties agree that all of Munck's
purchases of NDC Products hereunder shall be governed by the NDC General Terms
and Conditions, existing as of the date of this Agreement ( Exhibit B. ),
including without limitation, licensing of software, risk of loss, payment
terms, warranties, limitation of liabilities, and delivery terms, except (i)
with respect to prices and rates provided for in Section 3 hereof, and (ii) as
otherwise mutually agreed to by the Parties in writing.
5. NDC'S DEALINGS WITH MUNCK COMPETITORS.
5.1 ***
5.2 ***
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5.3 Existing Arrangements Between NDC and Munck Competitors. The
Parties acknowledge that the provisions in this Section shall have no effect (i)
on any agreements between NDC and any Munck Competitor existing on the Effective
Date, which agreements are listed in Exhibit C attached hereto, or (ii) with
respect to any products or services other than the NDC Products.
6. NDC'S DEALINGS WITH END-USERS. Munck acknowledges that nothing in
this Agreement affects NDC's rights to (i) engage in marketing and sales
activities targeting EndUsers in order to develop new business opportunities and
to increase awareness of NDC's name, trademarks, AGVS controls technology,
products and services; or (ii) supply complete AGV systems to End-Users. In the
case of the foregoing item (ii), however, NDC agrees to (a) promptly inform
Munck of such projects in order to avoid quoting in competition with Munck, and
(b) quote Munck vehicles and/or other services, unless the lead is generated by
a vehicle manufacturer other than Munck or unless otherwise agreed in writing
between the Parties, such agreement not to be unreasonably withheld, and (c)
apply a credit against Munck's performance targets, as set forth in section 10,
for each vehicle sold by NDC and offered to NDC by Munck, whether purchased or
not, equivalent to the amount Munck would have paid to NDC for the vehicle
hardware and software. Munck agrees to offer its products and services in
accordance with Section 9 hereof.
7. NDC'S OBLIGATION AS TO NEW OR UPGRADED NDC PRODUCTS. During the Term
hereof, NDC agrees to make available to Munck all new and upgraded AGVS controls
hardware, software and engineering services offered by NDC or its Affiliates to
any of their customers within the Territory upon terms and conditions contained
herein, which AGVS products and services shall be included in the NDC Price
List.
8. PROMOTION.
8.1 Promotion by Munck. During the Term hereof, Munck agrees to
use its commercially best efforts to promote, at its own cost and expense, the
NDC Products to its customers and potential customers within the Territory. NDC
will provide Munck with access to technical and sales information and sales
personnel as NDC deems appropriate to assist Munck in the promotion and sale of
such NDC Products.
8.2 Promotion bv NDC. During the Term hereof, NDC agrees to use
its commercially best efforts to promote, at its own cost and expense, Munck's
AGVS products and services to its customers and potential customers within the
Territory, except for such products and services that are similar to the NDC
Products. Munck will provide NDC with access to technical and sales information
and sales personnel as Munck deems appropriate to assist NDC in the promotion
and sale of such Munck AGVS products and services.
8.3 Sales Leads Generation. Both Parties agree to promptly
exchange information on sales leads generated as a result of the promotional
efforts described above and to
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implement procedures for the handling and follow-up of such leads with the
objective of creating maximum business for both Parties.
9. NDC'S RIGHT TO PURCHASE MUNCK PRODUCTS. During the Term hereof,
Munck agrees to make available to NDC all of its AGVS products and services
offered by Munck or its Affiliates to any of their customers within the
Territory upon terms and conditions more favorable than terms and conditions
offered by them to any of their major customers.
10. MUNCK'S PERFORMANCE TARGETS. During the Term hereof, Munck agrees
to use its best efforts to secure business resulting in firm purchase orders
with NDC for NDC Products, and take delivery of corresponding shipments, in the
following minimum aggregate amounts during the twelve-month period commencing on
the Effective Date and each twelve-month period commencing on the anniversary of
the Effective Date (a "Target Period"):
Target Period POs Shipments
- -------------------------------------------------------------
1997/1998 *** ***
1998/1999 *** ***
1999/2000 *** ***
As soon as available, but no later than thirty (30) days after the last day of
each Target Period, Munck shall provide information concerning Munck's efforts
with respect to achieving the performance targets for such Target Period,
including comparisons of actual results to performance targets. NDC hereby
agrees to exercise its commercially reasonable efforts to perform its
obligations hereunder, the applicable NDC General Terms and Conditions, and any
other terms mutually agreed upon by the Parties with respect Munck's purchases
of NDC Products hereunder to enable Munck to achieve the performance targets
specified above. Any payments by Munck to NDC for providing training
contemplated in Section 12 hereof shall be included as purchases for purposes of
calculating Munck's compliance with the target amounts set forth above. Amounts
in excess of the target amount will acrue and will be carried from one Target
Period to the next. If the Parties agree to extend the Term of this Agreement,
NDC and Munck will in good faith negotiate additional performance targets under
this Section 10.
11. BUSINESS PLANS.
1 1.1 Munck's Business Plan.
(a) Within thirty (30) days of the Effective Date, Munck shall
submit to NDC a proposed business plan relating to business activities covered
by this Agreement for the three (3) years commencing on the Effective Date with
the objective of growing its AGVS business in order to ship at least *** AGVS
vehicles during the first 12-month period after the Effective Date, at least ***
AGVS vehicles during the next 1 2-month period, and at least *** AGVS vehicles
during the next 12-month period (the "Proposed Munck Business Plan"), which plan
will include reasonably detailed sales and revenue forecasts (including the
performance targets
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contemplated in Section 10 hereof) and forecasted purchases of NDC Products for
each 3-month period of the first 12-month period and for each of the two
subsequent 12-month periods. Upon NDC's receipt of the Proposed Munck Business
Plan, NDC will have ten (10) days to review the plan and submit written comments
thereon to Munck for its consideration. After such ten-day period, Munck shall
consider NDC's comments, if any, in good faith and, at its sole discretion, make
appropriate adjustments to the Proposed Munck Business Plan, resulting in the
final version (the "Munck Business Plan"). Promptly after adoption by Munck's
Board of Directors, Munck shall furnish a copy of the Munck Business Plan to
NDC. The Munck Business Plan shall be reviewed by the Parties in a meeting with
their senior managements within thirty (30) days after each anniversary of the
Effective Date and shall be revised in accordance with the procedures set forth
above in this subparagraph.
(b) Munck shall, no later than thirty (30) days after the last
day of each 3-month period commencing on the Effective Date, provide information
concerning Munck's efforts with respect to achieving the sales and revenue
forecasts and forecasted purchases of NDC Products set forth in the Munck
Business Plan, including comparisons of actual results to forecasted results.
(c) Munck agrees to use its commercially best efforts to fulfill
the sales and revenue forecasts and forecasted purchases of NDC Products set
forth in the Munck Business Plan. NDC may request opportunities to visit Munck's
customers together with Munck. Such requests shall not be unreasonably denied by
Munck. Either Party agrees not to make direct contacts with the other Party's
customer(s) for the purpose of soliciting business, without the other Party's
approval.
11.2 NDC's Business Plan.
(a) Within thirty (30) days of the Effective Date, NDC shall
submit to Munck a proposed business plan relating to business activities covered
by this Agreement for the (3) years commencing on the Effective Date with the
objective of growing its AGVS business (the "Proposed NDC Business Plan"), which
Plan will include reasonably detailed sales and revenue forecasts for each
3-month period of the first 12month period and for each of the two subsequent
12-month periods. Upon Munck's receipt of the Proposed NDC Business Plan, Munck
will have ten (10) days to review the plan and submit written comments thereon
to NDC for its consideration. After such tenday period, NDC shall consider
Munck's comments, if any, in good faith and, at its sole discretion, make
appropriate adjustments to the Proposed NDC Business Plan, resulting in the
final version (the "NDC Business Plan"). Promptly after adoption by NDC's Board
of Directors, NDC shall furnish a copy of the NDC Business Plan to Munck. The
NDC Business Plan shall be reviewed by the Parties in a meeting with their
senior management's within thirty (30) days after each anniversary of the
Effective Date and shall be revised in accordance with the procedures set forth
above in this subparagraph.
(b) NDC agrees to use its commercially best efforts to fulfill
the sales and revenue forecasts set forth in the NDC Business Plan.
12. MUNCK'S TRAINING OBLIGATIONS. Munck shall, at its own cost and
expense, cause its employees and representatives to undertake such training as
mutually agreed to by the Parties
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from time to time to enable such employees and representatives to maintain
technical working knowledge of the NDC Products sufficient to permit them to
promote, sell, install, maintain and service such NDC Products.
13 REPORTING COVENANTS.
13.1 Annual Financial Statements. As soon as available, but in no
event later than one hundred and twenty (120) days after the end of each fiscal
year of each Party, each Party shall deliver to the other Party one copy each of
the consolidated balance sheet of such Party and its Affiliates as of the end of
such fiscal year and the related consolidated income statement, statement of
changes in shareholders' equity, and statement of cash flows for such fiscal
year, presented in accordance with generally accepted U.S. accounting principles
("GAAP"), together with a report thereon issued by independent U.S. certified
public accountants. Munck's financial statements and related information shall
only be made available to the CEO and Board of Directors of NDC and returned to
Munck immediately after required review.
13.2 Quarterly Financial Statements. As soon as available, but in
no event later than sixty (60) days after the end of the first three fiscal
quarters of each fiscal year of each Party, each Party shall deliver to the
other Party one copy each of the consolidated balance sheet of such Party and
its Affiliates as of the end of each such fiscal quarter and the related
consolidated income statement, statement of changes in shareholders' equity, and
statement of cash flows for such fiscal quarter, presented in accordance with
GAAP, together with a certificate of such Party's chief financial officer as to
fairness of presentation and compliance with GAAP (except for normal year-end
adjustments and footnotes). Munck's financial statements and related information
shall only be made available to the CEO and Board of Directors of NDC and shall
be destroyed after required review.
13.3 Monthly Leads and Quotes Reports. As soon as available, but
in no event later than ten (10) days after the end of each month, Munck shall
deliver to NDC a reasonably detailed report that sets forth all sales leads and
outstanding quotes with respect to Munck's sales of AGVS products and services
that would incorporate NDC Products. Such report shall follow the format as
outlined in Exhibit D.
13.4 Other AGVS Information. Promptly upon request, each Party
shall deliver to the other Party such information regarding the AGVS business of
such Party or otherwise relating to the subject matter of this Agreement as the
other Party may from time to time reasonably request.
14. PROPRIETARY RIGHTS.
14.1 Use of NDC Trademarks. Munck will promote and sell the NDC
Products under such product names, trademarks and logos as may be directed by
NDC and will identify all NDC Products as those of NDC. NDC hereby grants to
Munck a revocable, nonassignable, non-exclusive license to use the tradename and
service mark: "NDC Automation, Inc." and the associated logos and trademarks in
connection with advertising, promotion and
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sales calls on prospective customers within the Territory but only in the form
specified by NDC and with NDC's prior approval of each type of use. Upon
termination of this Agreement or upon notice from NDC to Munck, the license
granted in this subsection by NDC shall automatically be revoked and terminated,
and Munck shall promptly destroy all materials and electronic files in Munck's
custody, control or possession containing the marks or logos licensed under this
subsection, except for material developed for and needed to support existing
Munck customers. NDC will not use Munck's trade or service marks without Munck's
prior written consent.
14.2 Improvements to NDC Products: Infringements. Munck shall
keep NDC informed as to any problems encountered with the NDC Products sold by
Munck and any resolutions arrived at for those problems, and to communicate
promptly to NDC any and all modifications, design changes or improvements of the
NDC Products suggested by any customer, employee or agent of Munck or its
Affiliates.. Munck further agrees that NDC shall have any and all right, title
and interest in and to any such suggested modifications, design changes or
improvements of the NDC Products without the payment of any additional
consideration therefor either to Munck, or its employees, agents or customers.
Munck shall also promptly notify NDC of any infringement of any trademarks or
other proprietary rights relating to the NDC Products.
15. CUSTOMER SUPPORT FOR NDC PRODUCTS. Munck agrees to cooperate with
NDC in dealing with any customer complaints concerning the NDC Products and to
assist NDC in arranging for any customer warranty service on such NDC Products.
16. LIMITATION OF AUTHORITY COMMIT THE PARTIES. This Agreement shall
not create any authority on the part of a Party, or its officers, employees or
other agents to make any commitment, whether contractual, financial or
otherwise, on behalf of the other Party in any manner.
17. CONFIDENTIALLY.
17.1 Confidentiality Covenant. Each Party (a) must use the same
care and discretion (but in no event less than reasonable care and discretion)
to protect and prevent disclosures of the Proprietary Information as it employs
with similar information of its own; and (b) must not use, reproduce, distribute
or disclose the Proprietary Information except as authorized by the disclosing
Party to perform under this Agreement.
17.2 Permitted Disclosure. Disclosures of the Proprietary
Information of the disclosing Party may be made only to employees, agents or
independent contractors of the receiving Party who are directly involved in
performing under this Agreement, have a specific need to know such information,
and have obligated themselves to hold the Proprietary Information in confidence
and otherwise to comply with the terms of this Section, subject to the
additional restrictions on disclosure regarding Munck's financial statements set
forth in Sections 13.1 and 13.2. Each Party agrees to diligently monitor each
such employee, agent or independent contractor and, upon request by the other
Party, promptly to furnish to the other Party a list of the receiving Party's
employees, agents and independent contractors having had access to such
Proprietary Information.
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17.3 Return of Proprietary Information. Within ten (10) days
following the receipt of a written request from the disclosing Party, the
receiving Party must deliver to the disclosing Party, or destroy at the
direction of the disclosing Party, all tangible materials and electronic files
containing or embodying the Proprietary Information.
17.4 Duration. The covenants of confidentiality set forth in this
Section (i) will apply after the Effective Date to any Proprietary Information
disclosed to the receiving Party before and after the Effective Date and (ii)
will continue and must be maintained from the Effective Date through the
termination of this Agreement and (a) with respect to Trade Secrets, at any and
all times after the termination of this Agreement during which such Trade
Secrets retain their status as such under applicable law; and (b) with respect
to Confidential Information, for a period equal to the shorter of two (2) years
after termination of this Agreement or until such Confidential Information no
longer qualifies as confidential under applicable law.
17.5 Acknowledgment of Competitive Products and Services. Each
Party understands and acknowledges that the other Party may now market or have
under development products or services that are competitive with products or
services now offered or that may be offered by such Party, and the Parties'
communications hereunder will not serve to impair the right of either Party to
independently develop, make, use, procure or market products or services now or
in the future that may be competitive with those offered by the other Party, nor
require either Party to disclose any planning or other information to the other
Party.
18. EMPLOYEE NON-SOLICITATION COVENANT. No Party shall, without the
prior written consent by the other Party, during the Term hereof and for a
period of two (2) years thereafter, either directly or indirectly, on its own
behalf or in the service of or on behalf of others, divert, solicit or hire
away, or attempt to divert, solicit or hire away, any person employed by the
other Party working at any location where such Party has performed services
contemplated herein or with whom it has had significant contacts, whether or not
such employee is a full-time or temporary employee of the other Party and
whether or not such employment is pursuant to a written agreement, for a
determined period or at will.
19. REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants
to the other Party as follows:
19.1 Corporate Power and Authority: Enforceability. Such Party is
a corporation duly organized, validly existing and in good standing under the
laws of the State of its incorporation, has the full corporate power and
authority to carry on its business in the places and as it is now being
conducted and to own and lease its properties and assets.
19.2 Organization and Standing. Such Party has the full corporate
power and authority to execute and deliver this Agreement, to perform hereunder,
and to consummate the transactions contemplated hereby without the necessity of
any act, approval or consent of any other Person whomsoever. The execution,
delivery and performance by such Party of this Agreement have been approved by
all requisite corporate action on the part of such Party and
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constitute the legal, valid and binding obligation of such Party, enforceable
against it in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws
from time to time in effect affecting the enforcement of creditors' rights
generally, and except as enforcement of remedies may be limited by general
equitable principles.
19.3 Agreement Does Not Violate Other Instruments. The execution
and delivery of this Agreement by such Party do not, and the consummation of the
transactions contemplated hereby will not, violate any provisions of the
articles of incorporation or bylaws of such Party or constitute an occurrence of
default under any provision of: any mortgage, deed of trust, conveyance to
secure debt, note, loan, lien, lease, agreement, instrument, or any consent,
order, judgment or decree to which it is a party or by which it is bound or its
assets are affected.
20. REMEDIES. By virtue of the duties, responsibilities and special
knowledge of the affairs and operations of each Party that the other Party will
have as a result of the Parties' relationship under this Agreement, great loss
and irreparable damage would be suffered by such Party if the other Party should
breach or violate any of the covenants and agreements set forth in Sections 2,
5, 14, 17, and 18 hereof. The Parties agree that each such covenant and
agreement is reasonably necessary to protect and preserve the interests of the
Parties, and that each Party will be entitled to a temporary restraining order
and a permanent injunction to prevent a breach of the other Party of any of such
covenants or agreements.
21. INDEMNIFICATION. Each Party must indemnify the other Party from and
hold it harmless against any loss, liability, damage, action, cause of action,
cost or expense (including, without limitation, reasonable attorneys' fees)
arising out of (a) any unauthorized act or omission of such Party that may be
determined to be binding on the other Party; (b) the breach by such Party of the
representations or warranties made by it herein; (c) the breach by such Party of
the covenants owed by it hereunder; or (d) the negligent, reckless or willful
misconduct or omission of such Party or its employees, agents or independent
contractors; provided, however, that the foregoing indemnification will not
apply to any loss, liability, damage, action, cause of action, cost or expense
resulting solely from the negligence, recklessness or willful misconduct of the
other Party.
22. LIMITATION OF LIABILITY. NOT WITHSTANDING ANY OTHER PROVISION IN
THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, PUNITIVE, CONTINGENT OR CONSEQUENTIAL DAMAGES ARISING OUT
OF THIS AGREEMENT, EVEN IF THE OTHER PARTY HAS BEEN ADVISED ON THE POSSIBILITY
OF SUCH DAMAGES.
23. TERM AND TERMINATION.
23.1 Term. The term of this Agreement extends from the Effective Date
until the third (3rd) anniversary thereof, and is only extended upon mutual
written agreement of the Parties, unless sooner terminated as provided in
Section 23.2 hereof (the "Term").
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23.2 Termination. This Agreement may be terminated only as follows:
(a) By NDC upon Munck's failure to achieve the performance targets
specified in Section 10 hereof;
(b) By either Party upon a change in Control of the other Party;
(c) By either Party upon a legally binding determination in a judicial or
arbitration proceeding that either of Section 2, 3, 5, 14, 17 or 18 hereof is
invalid, illegal or unenforceable in any respect for any reason;
(d) By either Party if the other Party becomes insolvent or seeks
protection under any bankruptcy, receivership, trust deed, creditors
arrangement, composition or comparable proceeding, or if any such proceeding is
instituted against the other Party;
(e) By mutual written agreement of the Parties; and
(f) By either Party upon a breach of any material covenant, warranty or
representation in this Agreement by the other Party and failure by the other
Party to remedy such breach within thirty (30) days after receipt of
notification thereof delivered in accordance with the provisions of Section 24.1
hereof.
23.3 Survival. Upon termination of this Agreement, all rights and
obligations of the Parties under this Agreement will immediately cease and
terminate (except for the NDC General Terms and Conditions with respect to any
NDC Products purchased by Munck hereunder and the rights and obligations
pursuant to Sections 14.2, 17, 18, 20, 21, and 22, which, together with the
defined terms related thereto, will survive such termination), and no Party will
have any further obligation to the other Party or its employees, agents or
independent contractors with respect to this Agreement. A termination of this
Agreement will have no effect on any contractual or other relationships between
the Parties created as a result of this Agreement (e.g., Munck's purchases of
NDC Products hereunder); any such contractual or other relationships shall be
governed by the terms and conditions of any definitive documents and agreements
pertaining specifically thereto.
24. MISCELLANEOUS.
24.1 Notices. Each notice and communication to the Parties
required herein shall be in writing and shall be deemed to be duly given and
received (a) on the date delivered, if sent by hand delivery (to the person or
department if one is specified below), (b) three (3) days following the date
deposited in U.S. mail, certified or registered, with return receipt requested,
(c)
<PAGE>
on the date received, if sent by Federal Express or another national overnight
carrier, or (d) on the date received, if sent by facsimile provided a
confirmation of transmission is produced by the sending machine and a copy of
each facsimile is promptly sent by first class mail, and in each case to the
Persons at the following addresses:
If to NDC:
NDC Automation, Inc.
3101 Latrobe Drive
Charlotte, North Carolina 28211-4849
Attn: Mr. Ralph G. Dollander, President and
Chief Executive Officer
Facsimile: 704-364-4039
with a copy to:
Hunton & Williams
One NationsBank Plaza, Suite 2650
101 South Tryon Street
Charlotte, North Carolina 28280
Attn: Anders K. Torning, Esq.
Facsimile: 704-378-4890
If to Munck:
Munck Automation Technology, Inc.
161 Enterprise Drive
Newport News,Virginia 23603
Attn: Mr. Magne Nygren, President
Facsimile: 757-887-5588
with a copy to:
Stein & Smith
740-F Thimble Shoals Blvd
Newport News, VA 23612
Attn: Mr. Bennett Stein, Esq.
Facsimile: 757-873-0754
<PAGE>
Any Party may change its address from time to time to another single address by
notice given as herein provided, except any change of address notice must be
actually received in order to be effective.
24.2 Force Maieure. No Party will have the right to claim damages
or to terminate this Agreement as a result of another Party's failure or delay
in performance due to circumstances beyond its reasonable control, including
labor disputes, strikes, lockouts, shortages of or inability to obtain labor,
energy, components, raw materials or supplies, war, riot, insurrection,
epidemic, severe weather, act of God, or governmental action.
24.3 Assignment. No Party shall assign its rights and obligations
under this Agreement, in whole or in part, whether by operation of law or
otherwise (including, without limitation, a change in the equity ownership of a
Party resulting in a change of 50% or more of the voting power that exists on
the Effective Date), without the prior written consent of the other Party
hereto. Any purported assignment contrary to the terms hereof shall be null,
void and of no force and effect.
24.4 Waiver. No consent or waiver, express or implied, by any
Party to this Agreement to or of any breach or default by the other Party to
this Agreement in the performance by such other Party of the obligations thereof
under this Agreement shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such other Party of the
same or any other obligations of such other Party under this Agreement.
Failure on the part of any Party to this Agreement to complain of any act or
failure to act of any other Party to this Agreement or to declare such other
Party in default, irrespective of how long such failure continues, shall not
constitute a waiver by such Party of the rights thereof under this Agreement.
24.5 Severabilitv. In case one or more of the provisions
contained in this Agreement (including, without limitation, Sections 2, 3, 5,
14, 17, 18 and 20 hereof) should be held invalid, illegal or unenforceable in
any respect for any reason, the same will not affect any other provision in this
Agreement, which will be construed as if such invalid or illegal or
unenforceable provision had never been contained therein.
24.6 Complete Agreement. This Agreement constitutes the full and
complete agreement of the Parties and supersedes all prior negotiations,
correspondence, and memoranda relating to the subject matter hereof.
24.7 Amendment. Neither this Agreement nor any provision hereof
may be changed, modified, waived, discharged or terminated orally, but only by
an instrument in writing signed by the Party against whom enforcement of the
change, modification, waiver, discharge or termination is sought.
24.8 Headings. The headings of the sections, paragraphs and
subdivisions of this Agreement are for convenience of reference only, and are
not to be considered a part hereof and shall not limit or otherwise affect any
of the terms hereof.
<PAGE>
24.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall comprise but a single instrument.
24.10 Binding Agreement. The provisions of this Agreement shall
apply to, inure to the benefit of, and bind NDC and Munck and their respective
successors and assigns thereof.
24.11 Interpretations. No provisions of this Agreement shall be
construed against or interpreted to the disadvantage of any Party to this
Agreement by any court or other governmental or judicial authority by reason of
such Party's having or being deemed to have drafted, structured or dictated such
provision. Singular terms shall include the plural terms and vice versa, as
applicable.
24.12 Relationship of Parties. This Agreement does not constitute
a joint venture, association or partnership between the Parties. No express or
implied term, provision or condition of this Agreement shall or shall be deemed
to constitute the Parties as partners or joint ventures. Neither Party shall
incur a financial obligation on behalf of the other Party without the first
Party's prior written approval.
24.13 Controlling Law. The validity, interpretation, enforcement
and effect of this Agreement shall be governed by, and construed in accordance
with, the laws of the State of North Carolina, U.S.A, without regard to the
principles of conflicts of laws thereof
24.14 Expenses. All expenses incurred by the Parties in
connection with or related to the authorization, preparation, negotiation and
execution of this Agreement, including, without limitation of the generality of
the foregoing, all fees and expenses of agents, representatives, counsel and
accountants employed by any such party, shall be borne solely and entirely by
the Party which has incurred the same.
24.15 Public Announcement. No Party shall make ANY PUBLIC
announcement concerning this Agreement or the transactions contemplated herein
without first obtaining the prior written consent of the other Party; provided.
however. that nothing contained herein shall prohibit any Party hereto from
making any public announcement that such Party determines in good faith, on the
advice of legal counsel, that such public disclosure is required by applicable
law or regulations; provided, that in such event, such Party shall consult with
the other Party prior to making such disclosure. Munck acknowledges the fact
that NDC is a public company and that this may require NDC to disclose certain
information of a sensitive nature in accordance with federal or state securities
laws.
24.16 Arbitration. All disputes, controversies or differences
which may arise between the Parties out of or in relation to or in connection
with this Agreement shall be finally and exclusively settled by arbitration. The
arbitration shall be conducted in Charlotte, North Carolina, USA if a statement
of claim is filed by Munck, in Newport News, Virginia, USA if a statement of
claim is filed by NDC, or as otherwise agreed between the Parties, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
before an arbitrator or arbitrators appointed pursuant to such rules, and that
determination of such arbitrator or arbitrators shall be final, binding and
conclusive on the Parties. Compliance with these provisions shall be a
<PAGE>
condition to any suit or action hereunder by any Party. The provisions hereof
shall be enforceable and judgment upon any award rendered by the arbitrators may
be entered in any court having jurisdiction thereof or application may be made
to such court for a judicial acceptance of the award in an order of
enforcement, as the case may be.
[SIGNATURES ON FOLLOWING PAGE]
<PAGE>
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
executed on its behalf as of the day and year first above written.
NDC:
NDC AUTOMATION, INC.
By: /s/ Ralph Dollander
Name: Ralph Dollander
Title: President
MUNCK:
MUNCK AUTOMATION TECHNOLOGY, INC.
By: /s/ Magne Nygren
Name: Magne Nygren
Title: President
<PAGE>
20
<PAGE>
LIST OF EXHIBITS *** (Exhibit material has been omitted pursuant to a request
for confidential treatment)
Exhibit A -- NDC Price List
Exhibit B -- NDC General Terms and Conditions
Exhibit C -- List of Existing Agreements between NDC and Munck
Competitors
Exhibit D -- Monthly Lead and Quote Report
21
