Exhibit 10.38

 

WARNING: It is recommended that the within should not be completed without prior
legal advice

 

LAW SOCIETY OF IRELAND

 

GENERAL CONDITIONS OF SALE

2001 EDITION

 

PARTICULARS

and

CONDITIONS OF SALE

of

 

Factory Premises, Shannon Free Zone, Drumgeely, Bunratty Lower, Co Clare

 

 

*SALE BY PRIVATE TREATY

 

 

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*Delete, if inappropriate

 

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Vendor:

 

Tellabs Limited

Vendor’s Solicitor:

 

McCann FitzGerald

Address:

 

2 Harbourmaster Place, International Financial Services Centre,

 

 

Dublin 1

Ref.

 

DOR\568554.8

 

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MEMORANDUM OF AGREEMENT made this                     day of April 2003

 

BETWEEN

 

TELLABS LIMITED having its registered office at Shannon Industrial Estate,
Shannon, Co Clare

 

PPS Number(s)

(“VENDOR”)

 

AND

 

AVOCENT INTERNATIONAL LIMITED

of Avocent House, Shannon Free Zone, Shannon, Co Clare

 

PPS Number(s)

(“PURCHASER”)

 

whereby it is agreed that the Vendor shall sell and the Purchaser shall purchase
in accordance with the annexed Special and General Conditions of Sale the
property described in the within Particulars at the purchase price mentioned
below

 

Purchase Price

 

€5,350,000.00

 

 

Closing Date:  6 June 2003

 

 

 

 

 

 

Less Deposit

 

€   535,000.00

 

 

Interest Rate: 11%

 

 

 

 

 

 

Balance

 

€4,815,000.00

 

 

 

 

 

 

 

 

 

SIGNED

 

 

 

 

SIGNED

 

 

 

 

(Vendor)

 

 

 

(Purchaser)

 

 

 

 

 

 

 

 

 

Witness

 

 

 

 

Witness

 

 

 

 

 

 

 

 

 

 

Occupation

 

 

 

 

Occupation

 

 

 

 

 

 

 

 

 

 

Address

 

 

 

 

Address

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Stakeholder, We acknowledge receipt of Bank Draft/Cheque for
€                     in respect of deposit.

 

 

 

 

 

 

 

 

 

 

SIGNED

 

 

 

 

 

 

 

 

McCann FitzGerald

 

 

2

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PARTICULARS AND TENURE

 

ALL THAT AND THOSE that part of the Lands of Drumgeely situated in the Barony of
Bunratty Lower in the County of Clare more particularly described in a Lease
dated 20 October 1997 between Shannon Free Airport Development Company Limited
(1) and Tellabs Limited (2) (the “Lease”).

 

Held under the Lease for a term of 112 years from 1 January 1997.

 

3

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DOCUMENTS SCHEDULE

 

Lease

 

1.                                       The Lease

 

Superior Landlords Title.

 

2.                                       Plain copy only Lease dated 28 March
1960 between the Minister for Transport and Power (1) and Shannon Free Airport
Development Company Limited (2).

 

3.                                       Plain copy on Lease dated 28th April
1964 between the Minister for Transport and Power (1) and Shannon Free Airport
Development Company Limited (2).

 

4.                                       Plain copy Lease dated 14 May 1964
between the Minister for Transport and Power (1) and Shannon Free Airport
Development Company Limited (2).

 

5.                                       Plain copy only Lease dated 13 July
1967 between the Minister for Transport and Power (1) and Shannon Free Airport
Development Company Limited (2).

 

6.                                       Plain copy only Lease made 12 November
1979 between the Minster for Tourism and Transport (1) and Shannon Free Airport
Development Company Limited (2).

 

7.                                       Plain copy only Lease dated 20 December
1985 between Shannon Free Airport Development Company Limited (1) and Molex
Illinois S.A. Geneve (“Molex”) (2) (“Molex Lease”).

 

Planning Documentation

 

8.                                       Architect’s Opinion on Compliance with
Planning Permission dated 29 January 1999.

 

9.                                       Architect’s Opinion on Compliance with
Building Regulations dated 29 January 1999.

 

10.                                 Structural/Civil Chartered Engineers Opinion
on Compliance with Building Regulations dated 1 October 2001.

 

11.                                 Commencement Notice dated 4 September 1997.

 

12.                                 Copy Grant of Planning Permission register
reference Clare County Council P97/723 dated 5 August 1997.

 

13.                                 Fire Safety Certificate pursuant to Building
Control Act 1990 reference number in register BC98/99 dated 21 January 1999.

 

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SEARCHES SCHEDULE

 

None

 

5

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SPECIAL CONDITIONS

 

1                                          Save where the context otherwise
requires or implies or the text hereof expresses to the contrary, the
definitions and provisions as to interpretation set forth in the within General
Conditions shall be applied for the purposes of these Special Conditions

 

2                                          The said General Conditions shall:–

 

(a)                                  apply to the sale in so far as the same are
not hereby altered or varied, and these Special Conditions shall prevail in case
of any conflict between them and the General Conditions

 

(b)                                 be read and construed without regard to any
amendment therein, unless such amendment shall be referred to specifically in
these Special Conditions.

 

3                                          VAT

 

3.1                                 The Purchaser warrants that it is a taxable
person within the meaning of Section 4(8) of the Value Added Tax Act, 1972, (as
amended) and where it is required to do so by law, shall self account for any
VAT arising on the within sale if it should it be obliged to do so.  The
Purchaser further warrants that it holds a valid VAT 13B authorisation.

 

3.2                                 The Purchaser shall indemnify and shall keep
the Vendor indemnified against any loss, cost, expenses or other liabilities
arising from the default of the Purchaser to account for Value Added Tax
pursuant to the within sale where the Purchaser is required under the Value
Added Tax Act, 1972, (as amended) to account for VAT with respect to the sale.

 

4                                          Title

 

4.1                                 The Title shall consist of the Lease.

 

4.2.1                        The Purchaser is furnished with copy letter dated
20 June 1997 from Shannon Development to Mr Pat Shanahan, Managing Director of
Tellabs Limited, together with copy reply from Tellabs Limited of 20 June 1997
with respect to the car parking arrangements for Molex Limited and premises
demised to Tellabs.  Originally staff, licensees and invitees of Molex parked on
that portion of the property outlined in purple on Plan No. 1 attached hereto
(the “Car Park”).  Upon the construction of the Vendor’s facility on the
property, Shannon Development in accordance with the provisions of the Molex
Lease constructed an alternative car park on nearby lands for Molex.  Molex  no
longer parks on any portion of the property outlined in blue and marked “A”  on
Plan No. 1 attached hereto (the “Vacated Car Park”).  Currently staff, 
Licensees and invitees of Molex park on that portion of the Car Park outlined in
green and marked “B” on Plan No. 1 attached hereto (the “Strip”).  The following
provisions shall apply with respect to any permissions to Molex to park on the
Strip and/or the Facility Car Park.

 

4.2.2                        Molex is continuing to park on the Strip.  The
Vendor, via Shannon Development Company Limited, is seeking to procure a letter
from Molex to confirm that it has relinquished any right it has under the Molex
Lease to park on the Strip or the Vacated Car Park.  The Purchaser shall accept
a written acknowledgement in letter form from Molex that it no longer has a
right to park on the Strip or the Vacated Car

 

6

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Park under the provisions of the Molex Lease which shall be deemed to be
conclusive evidence that Molex no longer has any right to park on the Strip or
the Vacated Car Park.

 

4.2.3                        In the event that the written acknowledgement from
Molex with respect to the car parking on the Strip is not available on
completion, the sale shall not be delayed.  The Vendor shall use all reasonable
endeavours to procure acknowledgement from Molex to relinquish any right it has
to park on the Strip under the provisions of the Molex Lease.  In the event that
a written confirmation as envisaged by Special Condition 4.2.2 in a form
reasonably satisfactory to the Purchaser, is not received from Molex
relinquishing its right per the Molex Lease to park on the Strip on or before 6
June 2004, the Vendor shall refund to the Purchaser the sum of €100,000.00 on
demand from the Escrow Sum (as hereinafter defined) per the provisions of
Special Condition 4.2.5.

 

4.2.4                        In the event that the acknowledgement from Molex
with respect to the car parking on the Vacated Car Park is not available on
completion, the sale shall not be delayed.  The Vendor shall use all reasonable
endeavours to procure an acknowledgement from Molex to relinquish any right to
park on the Vacated Car Park under the provisions of the Molex Lease.  In the
event that a written confirmation as envisaged by Special Condition 4.2.2, in a
form reasonably satisfactory to the Purchaser, is not received from Molex
relinquishing its right per the Molex Lease to park on the Vacated Car Park on
or before 6 June 2004, the Vendor shall refund to the Purchaser the sum of
€300,000.00 from the Escrow Sum (as hereinafter defined) per the provisions of
Clause 4.25.

 

4.2.5                        The Vendor shall from the purchase monies on
completion transfer the sum of €400,000.00 (the “Escrow Sum”) to the Vendor’s
solicitors, McCann FitzGerald Solicitors, to be held by McCann FitzGerald
Solicitors upon the following conditions:-

 

a.                                       Where a written acknowledgement from
Molex is procured in compliance with the provisions of Special Condition 4.2.3
the sum of €100,000.00 shall immediately be released to the Vendor.

 

b.                                      Where a written acknowledgement from
Molex is procured in compliance with the provisions of Special Condition 4.2.4
McCann FitzGerald shall release the sum of €300,000.00 to the Vendor.

 

c.                                       In the event that a written
acknowledgement from Molex is not procured on or before 6 June 2004, with
respect to the Strip in accordance with Special Condition 4.2.3, McCann
FitzGerald Solicitors shall subject to paragraph (h) below and the other
provisions of this special condition, within 14 days of written demand release
the sum of €100,000.00 to the Purchaser.

 

d.                                      In the event that a written
acknowledgement from Molex in accordance with Special Condition 4.2.4 is not
procured on or before 6 June 2004 with respect to the Vacated Car Park, McCann
FitzGerald Solicitors shall subject to paragraph (h) below and the other
provision of this special condition within fourteen days of written demand
release the sum of €300,000.00 to the Purchaser.

 

7

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e.                                       In the event of dispute with respect to
whether a “written acknowledgement” is in a form reasonably satisfactory to the
Purchaser, the matter will be referred to a senior commercial conveyancing
practising solicitor, (the “Solicitor”) who is currently in practise in the
field of commercial property in Ireland for at least 10 years or upwards to be
nominated, in the default of an agreement between the Vendor and the Purchaser
by the President for the time being of the Law Society of Ireland.  The
Solicitor shall act as an arbitrator in accordance with the provisions of the
Arbitration Acts 1954 to 1998.  The Solicitor, for the purpose of this clause
shall have the authority to determine whether a written acknowledgement in
letter form from Molex with respect to the Strip or the Vacated Car Park would
be reasonably satisfactory to a purchaser of the Property who has entered into a
contract on the within terms and conditions.  Where the Solicitor so determines
that a written acknowledgement would  be reasonably satisfactory, the Purchaser
shall be deemed to be satisfied with the acknowledgement for the purpose of
special conditions 4.2.3 and/or 4.2.4 as the case may be.  The Solicitor shall
have the authority where in the absence of written acknowledgements from Molex
with respect to the entire Strip or the entire Vacated Car Park to determine
that part of the Escrow Sum (i.e. the €100,000 or the €300,000 as the case may
be) should be apportioned on a fair and equitable basis. In such circumstances
that portion of the Escrow Sum shall be paid to the Purchaser and the remainder
shall be released to the Vendor.

 

f.                                         For the avoidance of doubt it is
hereby agreed that a written acknowledgement with respect to the Strip and the
Vacated Car Park may be combined in the one letter.

 

g.                                      In the event that the Purchaser or any
agent or licensee of the Purchaser enters into any arrangement with Molex with
respect to car parking in the Car Park, no monies shall be payable by the Vendor
to the Purchaser with respect to the Strip or the Vacated Car Park irrespective
of whether written acknowledgements have been procured or not from Molex as an
anticipated in this contract.

 

h.                                      For the avoidance of doubt McCann
FitzGerald Solicitors will be authorised to release the monies from the Escrow
Sum upon acknowledgement by the Purchaser acting reasonably that it is satisfied
with written acknowledgements procured from Molex or otherwise upon a
confirmation from the Solicitor in accordance with Special Condition 4.2.5 (e)
that any written acknowledgement from Molex is satisfactory for the purpose of
this special condition or pursuant to any other determination by the Solicitor.

 

i.                                          In the event that arbitration
proceedings or litigation is threatened or pending with respect to the Escrow
Sum, McCann FitzGerald Solicitors shall be entitled to continue to hold the
Escrow Sum until the resolution of such proceedings, irrespective of any demand
by either party for such monies.

 

j.                                          Any interest accruing on the Escrow
Sum shall belong to the Vendor and may be paid by McCann FitzGerald to the
Vendor at anytime.

 

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k.                                       For the purpose of this clause 4.2
“reasonably satisfactory” to the Purchaser shall mean satisfactory to the
Purchaser acting reasonably.

 

4.3                                 Plain copies only of the documents numbered
2 to 7 in the Documents Schedule will be furnished.

 

4.4                                 The Purchasers attention is drawn to the
copy extract lease described at No. 7 of the Document Schedule and in particular
to Clause 3 of the Third Schedule annexed to the said certified copy Lease.  The
Vendor is only in possession of the certified copy extract of the said Lease.

 

5.                                       Representations

 

The Purchaser agrees and accepts that no statement, measurement quantity or
description contained in any newspaper advertisement published by the Vendor
(which expression shall in this condition include the Vendor’s Agents and
Solicitors), or given orally or contained in any brochure letter or handout
issued by the Vendor in respect of the subject property (whether or not in the
course of any representation or negotiations leading to the sale) shall
constitute a representation inducing the Purchaser to enter into the sale or any
warranty forming part of this Agreement.   No error (which shall have the same
meaning as in General Condition 33), unless contained in this Agreement, shall
give rise to any cause of action, claim for compensation against the Vendor, or
any right of rescission under this Agreement.  General Condition 33 shall be
read subject to this paragraph.

 

6.                                       Planning

 

6.1                                 The warranty on part of the Vendor in
General Condition 36(a)(1) is given to the best of the Vendor’s knowledge,
information and belief and relating to General Condition 36(a)(12) is limited to
the extent shown in the Architect’s Certificates described at number 8 and 9 of
the Documents Schedule, and the Engineer’s Certificate described at number 10 of
the Schedule furnished with this Contract.

 

6.2                                 The Purchaser is furnished with the
documentation re planning and building regulations set out at nos. 8 to 13 of
the Document Schedule.  The Purchaser shall not call for any further
documentation, certificates or otherwise, nor raise any objection or requisition
with respect to same.  General Condition 36 is hereby amended.

 

7.                                       Condition of Premises

 

7.1                                 The Purchaser is purchasing the premises in
an “as is” condition and shall not be obliged to make good any damage to the
premises resulting from the removal of plant and machinery by the Vendor from
the premises pending the completion of the sale.

 

7.2                                 The Vendor shall make good such damage
caused directly as a result of removal of plant and machinery where such damage
exceeds a reinstatement cost of €3,000.00.  The Vendor may however elect to
credit such sum to the Purchaser.  The remedying of any works or defects shall
not delay completion.

 

7.3                                 The Vendor shall not be obliged to
reconstruct or carry out works to the boundaries of the Property.

 

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8.                                       Environmental Matters

 

The Purchaser is deemed to be purchasing the property with full knowledge of
all  environmental conditions pertaining to the property in sale.

 

9.                                      Contents

 

9.1                                 The sale includes the furniture and items
set out in the attached Schedule entitled “Inventory Schedule”.  For the
avoidance of doubt the sale includes no other items on the premises save such
items as the Vendor notifies the Purchaser which it intends to leave on the
premises.

 

10.                               Auction

 

It is the Vendor’s intention to carry out an auction on the premises with
respect to plant and machinery which will remain in the Vendors ownership prior
to the completion of the sale.

 

11.                               Use of Premises

 

The Purchasers specific attention is brought to covenant 26.1 and 26.2 of the
Lease.  It shall be a matter solely for the purchaser to satisfy itself that it
has, or may procure a Licence under the provisions of Section 2(1) of the
Customs Free Airport (Amendment) Act, 1958 or any acts amending the same.

 

12.                                 Landlord

 

For the avoidance of doubt “Landlord” shall mean the person entitled to the
reversionary interest immediately expectant on the expiry of the Lease.

 

13.                               Purchaser on Notice

 

The Purchaser shall be deemed to purchase with full notice of the actual state
and condition of the subject property in all respects whether it is to quantity,
state or repair, means of approach, access of light and rights of adjoining
owners and occupiers as to boundary walls and fences or otherwise howsoever and
shall take the subject property as it is in all respects.

 

14.                               Boundaries

 

General Condition 14 shall not apply to this sale.  The Purchaser shall accept
such evidence of identity as may be gathered from the description of the copy
documents specified in the Document Schedule hereto.

 

15.                               Collateral Warranties

 

The Vendor shall use its reasonable endeavours to procure such collateral
warranties as the Vendor is entitled to from its professional team upon the
construction of the facility in the name of the Purchaser.  The sale shall not
be delayed by the absence of the said collateral warranties.  The Purchaser
shall accept any such collateral warranties as the Vendor can procure as an
absolute discharge of the Vendor of its obligations under this condition.

 

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16.                               Deed of Rectification

 

In the event that a Deed of Rectification is required by the Purchaser, to
rectify any mapping query with respect to the Lease, the Vendor agrees to join
in such a Deed and will co-operate with the Purchaser in seeking the agreement
by Shannon Free Airport Development Company Limited to join in such a Deed.

 

17.                               Chemical Containers

 

The Vendor shall, prior to completion of the sale, remove the containers of
process chemicals currently in the building.

 

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INVENTORY SCHEDULE

 

1st Floor

 

Four person cube x 38

 

Three person cube x 1

 

One person cube x 3

 

Managers office x 10

 

Meeting Room

 

(Meeting Room - large table and seating for relevant numbers of persons)

 

Four/six persons x 5 rooms

 

Six/eight persons x 5 rooms

 

Fifteen/twenty persons x 2 rooms

 

Twenty/twenty five persons x 3 rooms

 

Ground Floor

 

Four person cube x 26

 

Three person cube x 1

 

Tow person cube x 15

 

One person cube x 1

 

Six individual offices

 

Meeting Room

 

Four/six persons x 7 rooms

 

Six/eight persons x 3 rooms

 

Ten/fifteen persons x 3 rooms

 

Fifteen/twenty persons x 1 room

 

Twenty five/thirty persons x 2 rooms

 

Kitchen

 

Fully fitted modern kitchen with granite work tops including cold room

 

12

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Dining Room

 

Quality furniture for 128 persons

 

Warehouse

 

Set of high bay pallet racking, with perimeter fencing, approximately 7 metres
in height

 

Capacity:-

60 pallets per row

 

 

 

8 rows in total

 

such other items as the Vendor elects to leave on the premises as notified to
the Purchaser.

 

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NON-TITLE INFORMATION

 

Query

 

Reply (Please tick and/or insert comments as appropriate)

 

 

 

 

 

Yes

 

No

 

Comment

 

 

 

 

 

 

 

 

 

 

 

1.

 

SERVICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

i.

 

How is the Subject Property serviced as to:

 

 

 

 

 

 

 

 

 

(a)

drainage;

 

X

 

 

 

Shannon

 

 

 

(b)

water supply;

 

X

 

 

 

Shannon

 

 

 

(c)

electricity;

 

X

 

 

 

ESB 16000KVN

 

 

 

(d)

gas; and

 

 

 

X

 

 

 

 

 

(e)

otherwise.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ii.

 

Have the Services (including roads, lanes, footpaths, sewers and drains)
abutting or servicing the Subject Property been taken over by the Local
Authority.

 

 

 

 

 

Enquiries being made, see title.

 

 

 

 

 

 

 

 

 

 

 

 

 

Will a letter from the Local Authority or a solicitor’s certificate to vouch the
position be furnished on or before closing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If services are not in charge, are there appropriate easements and indemnities
in existence.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

iii.

 

Is the Subject Property serviced by:

 

 

 

 

 

 

 

 

 

(a)

septic tank; or,

 

 

 

X

 

 

 

 

 

(b)

private drainage scheme.

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

iv.

 

Is the Subject Property serviced for television and if so is it by:

 

 

 

 

 

 

 

 

 

(a)

Cable T.V.,

 

X

 

 

 

 

 

 

 

(b)

Satellite Dish;

 

 

 

 

 

 

 

 

 

(c)

MMDF;

 

 

 

 

 

 

 

 

 

(d)

TV aerial owned by Vendor; or

 

 

 

 

 

 

 

 

 

(e)

TV aerial owned by another.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If (b) or (d) applies, will it be included in the Purchase Price.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v.

 

Is there a telephone line to be supplied with the Subject Property

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

vi.

 

Is there an ISDN line to be supplied with the Subject Property.

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.

 

CONTENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

i.

 

Are there any contents included in the Purchase Price.

 

X

 

 

 

Furniture Systems (office)
High Bay Storage in Manufacturing Canteen Furniture and Equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If so, give Vendor’s estimate of value.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ii.

 

Are there any fixtures, fittings or chattels included in this Sale which are the
subject of any Lease, Rent, Hire Purchase Agreement or Chattel Mortgage.

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If so, furnish now the Agreement and on closing proof of payment to date or
discharge thereof.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.

 

OUTGOINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

i.

 

What is the Rateable Valuation of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Lands;

 

 

 

 

 

Enquiries being made

 

 

 

 

(b)

Buildings.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ii.

 

Give particulars of any other periodic or annual charge which affects the
Subject Property or any part of it.

 

 

 

 

 

Shannon Industrial Estate Maintenance charge of €16k per annum

 

 

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