TERMINATION AND RELEASE AGREEMENT
EXHIBIT
10.6
This
Termination and Release Agreement dated effective as of September 26th, 2007 (the "Termination Agreement") is
made by and among (i) Trace Technologies, LLC, a Nevada limited liability
corporation ("Trace"),
(ii) Xxxxxxx Technologies Corporation, a Delaware Corporation ("Xxxxxxx"), and (iii)
CSI Wireless LLC, a Delaware LLC ("CSI") (collectively, the
"Parties" and any one of them, a "Party", as the context may
require).
WHEREAS
the Parties wish to terminate the Asset Purchase Agreement among Trace, CSI and
Xxxxxxx dated July 25, 2006, together with any amendments (collectively, the
"Asset Purchase Agreement") and CSI wishes to grant certain
purchase options to Trace relating to the Asset Purchase Agreement;
AND
WHEREAS the Parties wish to terminate the technology development and
manufacturing agreement dated February 4, 2004, between Locate Networks, Inc.
("Locate") and CST,
which agreement was subsequently assigned to Trace pursuant to an assignment
agreement dated August 11, 2004 between Trace and Locate
(collectively, the "Manufacturing Agreement");
AND
WHEREAS the Parties wish to release each other from their respective
representations, warranties, covenants and any other obligations as set out in
the Asset Purchase Agreement and the Manufacturing Agreement;
NOW
THEREFORE, the Parties hereto agree as follows:
1. Defined
Terms
Terms and
expressions. when used herein and unless otherwise defined herein, will have the
same meanings as are ascribed to them in the Asset Purchase
Agreement.
2. Termination of Manufacturing
Agreement and Asset Purchase Agreement
Each of
the Parties hereto, on its own behalf, and on behalf of its affiliates and
subsidiaries, and their respective directors, officers, employees, agents,
insurers, partners, affiliates, successors and assigns hereby agrees that the
Manufacturing Agreement and the Asset Purchase Agreement are terminated and of
no further force or effect.
3. Releases
|
(a)
|
Trace
and Xxxxxxx on their own behalf, and on behalf of their respective
affiliates and subsidiaries,
and their respective directors, officers, employees, agents, insurers,
partners, affiliates, successors and assigns (collectively referred to as
the "Releasors") do hereby remise, release and forever discharge CSI and
its respective affiliates and subsidiaries, and their respective
directors, officers, employees, agents, insurers, partners, affiliates,
successors and assigns ("Releasees") of and from all actions, manner of
actions, causes of action, suits, debts, dues, accounts, bonds, covenants,
agreements, claims, demands, expenses (including legal costs on a lawyer
and his own client basis) and liabilities of every nature and description
whatsoever which the Releasors now may have or ever may have had,
including, but not limited to, anything related to or arising out of or in
any way related to the Manufacturing Agreement or the Asset Purchase
Agreement.
|
|
(b)
|
CST
on its own behalf, and on behalf of its respective affiliates and
subsidiaries, and their respective
directors, officers, employees, agents, insurers, partners, affiliates,
successors and assigns (collectively referred to as the ''Releasors") do
hereby remise, release and forever discharge Trace and Xxxxxxx and their
respective affiliates and subsidiaries, and their respective directors,
officers, employees, agents, insurers, partners, affiliates, successors
and assigns ("Releasees") of and from all actions, manner of actions,
causes of action, suits, debts, dues, accounts, bonds, covenants,
agreements, claims, demands, expenses (including legal costs on a lawyer
and his own client basis) and liabilities of every nature and description
whatsoever which the Releasors now may have or ever may have had,
including, but not limited to, anything related to or arising out of or in
any way related to the Manufacturing Agreement or the Asset Purchase
Agreement.
|
4. Options to
Purchase
|
(a)
|
Manufacturing
Option:
|
|
(i)
|
Subject
to the terms of this Termination Agreement, CSI grants to Trace a
non-exclusive option
to purchase (hereinafter referred to as the "Manufacturing Option") the following manufacturing
package (the "Manufacturing Package"), consisting
of:
|
|
(A)
|
The
Purchased Assets; and
|
|
(B)
|
the
right to engage CSI for manufacturing support at the rate of
$150/person/hour plus
materials and expenses for a period ending 60 days following the exercise
of the Manufacturing Option ("Manufacturing Support"), to the extent that Trace
requests, and CSI is reasonably able to provide, Manufacturing Support;
provided that Trace shall be responsible for all of CSI's out-of-pocket
expenses incurred by CSI's personnel in connection with the provision of
the requested Manufacturing Support, including without limitation, all
travel and living expenses.
|
|
(ii)
|
Manufacturing
Option Term:
|
|
(A)
|
Unless
terminated earlier in accordance with Section 4(a)(ii)(B), the
Manufacturing
Option shall be exercisable by Trace for a period of one (1) year from the
date of this Termination Agreement.
|
|
(B)
|
Notwithstanding
CSI's grant of the Manufacturing Option, CSI retains the right
to
sell all or part of the Purchased Assets to any other party, without
notice to Trace, at any such time and upon any such terms as CSI may
decide; provided that within 10 days after any such sale CSI shall notify
Trace of the items sold and the purchase price therefor. In the event of
such sale of part or all of the Purchased Assets, the
Manufacturing Option shall expire as to such assets sold and be of no
force or effect.
|
|
(iii)
|
Manufacturing
Package Purchase Price:
|
|
(A)
|
The
Manufacturing Package purchase price shall be $845,000 (the"Manufacturing Package Purchase
Price"), less any price
received by CSl for the sale of any part thereof prior to exercise of the
Manufacturing Option by Trace.
|
2
|
(iv)
|
Exercise
of the Manufacturing Option:
|
|
(A)
|
Trace
shall
exercise the Manufacturing Option by providing CSI with
writtennotice
of its intent to exercise the Manufacturing Option, at any time prior to
the expiry or termination of the Manufacturing Option, outlining, among
other things:
|
|
(I)
|
a
date for the closing for the purchase and sale of the Manufacturing
Package
which will be at least 30 days and not more than 60 days after the receipt
of the notice by CSI; and
|
|
(II)
|
a
letter from Trace's counsel indicating that funds equivalent to
theManufacturing
Package Purchase Price are being held in such counsel's trust account for
payment to CSI upon closing of the purchase and sale of the Manufacturing
Package.
|
|
(v)
|
Sale
of the Manufacturing Package:
|
|
(A)
|
The
Manufacturing Package will be sold "as is — where is", with norepresentations
or warranties, whether express, implied, statutory or otherwise, except as
to CSI's right to sell the Manufacturing Package free and clear of all
security interests, liens, claims or
encumbrances.
|
(b) Inventory
Option:
|
(i)
|
Subject
to the terms of this Termination Agreement, CSI agrees to grant to Trace a
non-exclusive
option to purchase (hereinafter referred to as the "Inventory Option") the following inventory (the
"Inventory Package"), which shall include 1419
units of the Device.
|
|
(ii)
|
Inventory
Option Term:
|
|
(A)
|
Unless
terminated earlier in accordance with Section 4(a)(ii)(B), the Inventory
Option
shall be exercisable by Trace for a period of one (1) year from the date
of this Termination Agreement.
|
|
(B)
|
Notwithstanding
CS1's grant of the Inventory Option, CSI retains the right to sell
all or part of the Inventory
Package to any other party, without notice to Trace, at any such time and
upon any such terms as CSI may decide; provided that within 10 days after
any such sale CSI shall notify Trace of the items sold and the purchase
price therefor. In the event of such sale part or all of the Inventory
Package, the Inventory Option shall expire as to such Inventory sold and
be of no force or effect.
|
|
(iii)
|
Inventory
Package Purchase Price:
|
|
(A)
|
The
Inventory Package purchase price shall be $296,571 (the"Inventory Package Purchase Price"), less any price received by
CSI for the sale of any part thereof prior to exercise of the Inventory
Option by Trace.
|
3
|
(iv)
|
Exercise
of the Inventory Option:
|
|
(A)
|
Trace
shall exercise the Inventory Option by providing CSI with written notice
ofits
intent to exercise the Inventory Option, at any time prior to the expiry
or termination of the Inventory Option, outlining, among other
things:
|
|
(I)
|
a
date for the closing for the purchase and sale of the Inventory Package
which
will be at least 30 days and not more than 60 days after the receipt of
the notice by CSI; and
|
|
(II)
|
a
letter from Trace's counsel indicating that funds equivalent to the
Inventory
Package Purchase Price are being held in such counsel's trust
account
for payment to CSI upon closing of the
purchase and sale of the Inventory
Package.
|
|
(v)
|
Sale
of Inventory Package:
|
|
(A)
|
The
Inventory Package will be sold "as is — where is", with no representations
orwarranties,
whether express, implied, statutory or otherwise, except as to CST's right
to sell the Inventory Package free and clear of all security interests,
liens, claims or encumbrances.
|
5. Consideration
|
(a)
|
In
consideration for the termination of the Manufacturing Agreement and the
Asset Purchase Agreement,
including the related obligations of Trace under those agreements, Trace
agrees to release the Deposit which is currently being held in escrow by
Burnet, Xxxxxxxxx & Xxxxxx LLP
("BDP")
in connection with the Asset Purchase Agreement, being $125,000
plus accrued interest (the "Consideration").
|
|
(b)
|
The
Consideration will be releasable immediately upon execution and delivery
of this Termination
Agreement and the execution and delivery of this Termination Agreement
constitutes Trace's and Gabriel's irrevocable direction to I3DP to pay the
Consideration to CSI or to its
order.
|
6. Entire
Agreement
This
Termination Agreement shall supersede and replace any and all prior,
agreements between the Parties, which shall remain in full force and
effect (except to the extent augmented or amended hereby) between the Parties
hereto respecting the matter set forth herein, and shall constitute the entire
agreement between the Parties hereto in respect of the matters set forth
herein.
7. Enurement
This
Termination Agreement shall enure to the
benefit of and be binding upon each of the Parties and their
respective successors and assigns.
8. Counterpart
Execution
This
Termination Agreement may be executed by the Parties in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts shall together constitute
one and the same agreement. This Termination Agreement may be executed and
delivered by facsimile, which when so executed and delivered shall constitute a
binding agreement.
[SIGNATURE
PAGE IS ON THE FOLLOWING PAGE]
4
IN
WITNESS WHEREOF the Parties hereto have executed this Termination Agreement as
of the date and year first above written.
| CSI WIRELESS LLC | |
|
Per: /s/ Xxxxxxx
Xxxxx
|
|
| Name: Xxxxxxx Xxxxx | |
| Title: CFO | |
| TRACE TECHNOLOGIES, LLC | |
| Per: ______________________________ | |
| Name: | |
| Title: | |
| XXXXXXX TECHNOLOGIES CORPORATION | |
| Per: ______________________________ | |
| Name: | |
| Title: |
5
IN
WITNESS WHEREOF the Parties hereto have executed this Termination Agreement as
of the date and year first above written.
| CSI WIRELESS LLC | |
|
Per:
|
|
| Name: | |
| Title: | |
| TRACE TECHNOLOGIES, LLC | |
| Per: /s/ Xxx Xxxxxx | |
| Name: Xxx Xxxxxx | |
| Title: President/Xxxxxxx Technologies Corp., Member | |
| XXXXXXX TECHNOLOGIES CORPORATION | |
| Per: /s/ Xxx Xxxxxx | |
| Name: Xxx Xxxxxx | |
| Title: President |
6
