ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
by and among CALAMP DATACOM, INC., a Delaware corporation ("Purchaser"),
CALAMP CORP., a Delaware corporation ("Parent"), AIRIQ U.S., INC., a Delaware
corporation ("Seller"), and AIRIQ INC., a Canadian corporation
("Shareholder"), with reference to the following facts:
A. Purchaser and its affiliated companies design, manufacture and
market wireless equipment used in the reception of television programming
transmitted from satellites and wireless terrestrial transmission sites, two-
way transceivers used for wireless high-speed Internet (broadband) service,
cellular and GPS modules for embedding into Machine-to-Machine applications,
and equipment used for mobile resource management, telemetry and asset
tracking applications, private wireless networks, public safety
communications and critical infrastructure and process control applications.
B. Seller is engaged in the business of designing, manufacturing,
distributing and selling asset tracking products and services for a variety
of applications and markets (the "Seller Activities").
C. One component of the Seller Activities is the provision of an
aftermarket vehicular product and related location services to the industry
offering sub-prime vehicle credit (often referred to as Buy-here-pay-here
business) in the United States and Canada (the "Business").
D. Seller is an indirect, wholly-owned subsidiary of Shareholder.
E. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, substantially all of the assets of Seller used in the
Business, and in connection with such purchase, assume certain liabilities,
in each case upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
agree as follows:
ARTICLE I
TERMS OF SALE
1.1 Sale of Assets. Upon the terms and conditions hereinafter set
forth, Seller shall sell, assign, convey, transfer and deliver to Purchaser
at the Closing (as defined herein), substantially all of the assets of Seller
used in the Business, as set forth in Section 1.1 of the disclosure letter
and schedules thereto delivered by Seller and Shareholder to Purchaser (the
"Seller and Shareholder Disclosure Letter") (the "Purchased Assets"), free
and clear of any and all Liens and Encumbrances except for the Permitted
Liens. As used in this Agreement, "Liens and Encumbrances" shall mean any
lien, claim, charge, security interest, mortgage, pledge, hypothecation,
easement, conditional sale, or other title retention agreement, defect in
title, covenant, or other encumbrance or restriction of any kind. As used in
this Agreement, "Permitted Liens" shall mean (a) Liens and Encumbrances for
taxes if such taxes are not yet due and payable, and (b) mechanics',
construction, carriers', workers', repairers', storers' or other similar
liens (inchoate or otherwise) which individually or in the aggregate are not
material, arising or incurred in the ordinary course of business consistent
with past practice which have not been filed, recorded or registered in
accordance with applicable law or of which notice has not been given to the
Seller. With the exception of the Excluded Assets (defined below), the
Purchased Assets shall include all of the assets of Seller of every kind,
character and description, whether tangible, intangible, personal or mixed,
and wherever located, that are owned by Seller and used in the Business,
including, but not limited to, the Lake Forest, California facility lease,
the listed accounts receivable, the listed inventory, customer pre-payments
and deposits, customer contracts, AirIQ Vehicle Recovery Patents (US Patent
#6,025,774 and US Patent #6,249,217), production and test equipment (tools,
fixtures, test software and equipment), Seller's goodwill, equipment,
machinery, tooling, fixtures, office furniture, supplies, materials, backlog,
Contracts (as defined herein), purchase and sales orders, prepaid expenses,
security deposits, customer lists, books and business records, hardware,
software, product catalogues, photographs (digital and otherwise), artwork,
permits, licenses, consents and other forms of governmental approval, to the
extent transferable, domain names, website software, telephone numbers, and
Intellectual Property (as defined herein).
1.2 Excluded Assets. Section 1.2 of the Seller and Shareholder
Disclosure Letter contains an accurate and complete list of all assets and
property that are used in the Business by Seller which are excluded from the
definition of Purchased Assets (collectively, the "Excluded Assets").
1.3 Purchase of Assets. Purchaser agrees to purchase the Purchased
Assets from Seller upon the terms, conditions and provisions hereinafter set
forth and in reliance upon the covenants, agreements, representations,
warranties and indemnities of Seller hereinafter set forth.
1.4 No Liabilities or Obligations to be Assumed. Except for those
liabilities and obligations set forth in Section 1.4 of the Seller and
Shareholder Disclosure Letter, including the obligations for future
performance under any contract or agreement comprising part of the Purchased
Assets as set forth thereon (the "Contracts")(collectively, the "Assumed
Liabilities"), the parties hereto acknowledge and agree that Purchaser is not
assuming, paying or discharging and shall not be liable for any debts,
obligations, responsibilities or liabilities of Seller or any claim, action
or suit relating thereto (whether now existing or hereafter arising), known
or unknown, contingent or absolute, relating to or arising from any period
prior to the Closing and Seller shall remain fully and completely liable for
all such liabilities. By way of example only and not in limitation of the
foregoing, Purchaser is not assuming, paying or discharging and Purchaser
shall not be liable for: (a) any of Seller's short or long-term debt; (b) any
of Seller's non-accrued employee benefits, employment or successor
liabilities related to Seller's employees or other personnel; (c) any of
Seller's pension, profit-sharing or other qualified or unqualified plan
liabilities, whether such plans presently exist or were previously funded;
(d) any of Seller's tax liabilities of any kind or nature whatsoever (except
for pro-rated personal property taxes as provided in Section 4.9); (e) any
liability or responsibility for defaults accruing prior to the Closing under
any contracts or agreements; (f) any liability or responsibility for
regulatory, tax or other reports, filings, approvals or actions related to
the operations of the Business prior to the Closing (including interest and
penalties thereon); (g) any liability or responsibility to make tax, benefit,
funding or other payments (including interest and penalties thereon) that
accrued prior to the Closing; (h) with the exception of the Lake Forest
facilities lease and the co-location facility lease, any liabilities of
Seller relating to or arising from any real property leases; (i) any
liability or responsibility for salaries, bonuses or commissions relating to
sales shipped and invoiced prior to the Closing; and (j) any liabilities of
Seller of any other kind or description whether accrued, absolute, contingent
or otherwise, relating to or arising from any period prior to the Closing, in
each case, except for the Assumed Liabilities.
1.5 Conveyance of Purchased Assets. At the Closing, subject to
obtaining any required third party consents identified in Section 2.10 of the
Seller and Shareholder Disclosure Letter and completing the customer data
migration pursuant to Section 4.17, Seller shall convey the Purchased Assets
to Purchaser by that certain Xxxx of Sale, the form of which is attached
hereto as Exhibit A.
1.6 Purchase Price. As full payment for the transfer and delivery of
the Purchased Assets to Purchaser, Purchaser shall deliver the following
consideration (the "Purchase Price") to Seller:
(a) At the Closing, Purchaser shall deliver, by electronic
transfer in immediately available funds to an account designated by Seller,
the sum of SEVENTEEN MILLION ONE HUNDRED THOUSAND DOLLARS ($17,100,000) (the
"Initial Payment").
(b) At the Closing, Purchaser shall deposit the amount of ONE
MILLION NINE HUNDRED THOUSAND DOLLARS ($1,900,000) (the "Escrow Funds"), by
electronic transfer in immediately available funds, to an escrow account
("Escrow Account") maintained in the custody of a mutually acceptable escrow
agent (the "Escrow Agent"). The costs and expenses associated with the
establishment and maintenance of the Escrow Account shall be borne by
Purchaser. The Escrow Funds will be released from the Escrow Account as
follows:
(1) The Escrow Funds will be held in the Escrow Account to
satisfy any indemnifiable claims by Purchaser against Seller pursuant to
Section 8.1, for a period of twelve (12) months after the Closing Date (the
"Escrow Period"), in accordance with the terms of the Escrow Agreement in the
form attached as Exhibit B (the "Escrow Agreement").
1.7 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets according to the methodology to be
mutually agreed among the parties and set forth in Section 1.7 of the Seller
and Shareholder Disclosure Letter (the "Allocation Method"). Each of the
Seller and the Purchaser shall allocate the Purchase Price among the
Purchased Assets pursuant to Section 1060 of the Internal Revenue Code of
1986, as amended, in accordance with the fair market values of the Purchased
Assets as determined in accordance with the Allocation Method. Each of the
Seller and the Purchaser shall file I.R.S. Form 8594 in a timely manner. The
Purchaser and the Seller shall follow the Allocation Method set out in
Section 1.7 of the Seller and Shareholder Disclosure Letter in determining
and reporting their liabilities for any taxes and, without limitation, shall
file their respective returns prepared in accordance with such allocations.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
AND SHAREHOLDER
Seller and Shareholder hereby, jointly and severally, represent and
warrant to Purchaser, and its successors and assigns, subject to the specific
exceptions in the Seller and Shareholder Disclosure Letter as follows:
2.1 Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly authorized to carry on the business presently conducted by it. Seller
is duly authorized, qualified and licensed under all applicable law,
regulations, rules and orders of public authorities to carry on its business
in the State of California. With the exception of the State of California,
Seller is not required to be authorized, qualified or licensed to do business
in any other jurisdiction where the failure to be so qualified would have a
Material Adverse Effect on Seller's present business or operations. As used
in this Agreement, "Material Adverse Effect" shall mean any change, event or
effect that is or is reasonably likely, individually or in the aggregate, to
become materially adverse to the business, operations, financial condition or
results of operation of the Business; provided that none of the following
shall constitute a "Material Adverse Effect" and none of the following shall
be taken into account in determining whether a "Material Adverse Effect" has
occurred or is reasonably likely to occur: (a) an adverse change, event,
effect, occurrence, state of facts or developments affecting the industry in
which the Business is conducted or the U.S. economy as a whole, and not
specifically relating to Seller; (b) any adverse change, event, effect,
occurrence, state of facts or developments arising from or relating to acts
of terrorism or war; (c) any effect relating to compliance with the terms of,
or the taking of any action permitted or required by, this Agreement, or from
the announcement or pendency thereof; or (d) any adverse change, event, or
effect related to or arising from the analog wireless network and/or the
Aeris services.
2.2 Title to Common Shares. AirIQ U.S. Holdings, Inc., a wholly-owned
subsidiary of Shareholder, owns all of the issued and outstanding capital
stock of Seller. As of the Closing, there exists no options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights or
other contracts or commitments which could require Seller to sell, issue or
otherwise cause to become outstanding any stock or other interest in Seller.
2.3 Authority and Enforceability.
(a) Seller has the requisite corporate power, legal capacity and
authority to sell and transfer the Purchased Assets as contemplated herein,
free and clear of any statutory, contractual or other limitation, and to
enter into and perform its obligations under this Agreement. This Agreement
constitutes a valid and legally binding obligation of Seller, enforceable
against it in accordance with the terms hereof, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights or by general equitable principles. Seller has taken all necessary
corporate action on its part as may be required under applicable law and
under its Certificate of Incorporation and Bylaws to authorize the execution,
delivery and performance of this Agreement.
(b) Shareholder has the legal capacity to enter into and perform
its obligations under this Agreement. This Agreement constitutes a valid and
legally binding obligation of Shareholder, enforceable against it in
accordance with the terms hereof, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights or by general equitable principles.
2.4 Financial Statements. The unaudited balance sheets and income
statements of Seller for the year ended December 31, 2006 (collectively, the
"Financial Statements"), copies of which have been previously provided to
Purchaser, and the statements of revenue for January and February 2007 set
forth in Section 2.4 of the Seller and Shareholder Disclosure Letter, are
true and correct in all material respects and have been prepared in
accordance with the books and records of Seller. The Financial Statements
have been prepared in accordance with Canadian Generally Accepted Accounting
Principles consistently applied by Seller throughout the periods indicated,
except that the Financial Statements do not contain customary notes. The
statements of revenue for January and February 2007 shall report revenue on a
Canadian GAAP basis. The balance sheets contained in the Financial
Statements fairly present the financial position of Seller in all material
respects as of their respective dates and set forth in full and reflect all
liabilities of Seller as of such dates. The income statements included in
the Financial Statements fairly present the results of the operations of
Seller in all material respects for the periods indicated and covered
thereby. The inventory valuations in the Financial Statements are based upon
pricing the inventories at the lower of cost or market in accordance with the
established practices of Seller. The shareholders' equity of Seller as of
such dates was as set forth in the Financial Statements. Seller and
Shareholder do not have any knowledge of any material liability that is not
reflected or reserved against in the Financial Statements.
2.5 Absence of Change. Except as disclosed in Section 2.5 of the
Seller and Shareholder Disclosure Letter, since December 31, 2006, there has
not been: (a) any Material Adverse Effect; (b) any material damage, natural
or otherwise, to any of the Purchased Assets being purchased hereunder; (c)
any confiscation of any of the Purchased Assets by any government or any
agency thereof; (d) any lockout, strike, labor trouble, state of emergency,
war, act of God or other event which affected or will affect the Business or
Purchased Assets; (e) any material sales of goods or services or other
transactions of Seller, other than those occurring in the ordinary course of
business; (f) any material change in the manner of conducting the Business
and operations of Seller; (g) any material change in the manner in which
Seller pays its accounts payable and no payment of any accounts payable, nor
any failure to pay any accounts payable, other than in the ordinary course of
Business; (h) any financial or other commitments or obligations incurred by
Seller, except such as may be incidental to carrying on the ordinary course
of Business; (i) any borrowing by Seller of any funds and no endorsing or
guaranteeing payment by Seller of any loan or obligation, contractual or
otherwise, of any other individual, firm, corporation or other entity, and
except as set forth in the Financial Statements, there are no such
borrowings, endorsements or guarantees by Seller presently outstanding; (j)
any material loans or advances by Seller to any individual, firm, corporation
or other entity at any time; (k) any capital additions or improvements in
excess of FIFTY THOUSAND DOLLARS ($50,000) in the aggregate to the properties
of Seller, and no contracts or purchase orders therefore; (l) any sale,
retirement, abandonment or other disposition of any of the Purchased Assets
or other property of Seller, except the disposition or replacement of minor
equipment in the ordinary course of business with an individual fair market
value of less than TEN THOUSAND DOLLARS ($10,000); (m) any outstanding
obligation by Seller either for money borrowed or otherwise, other than as
set forth in the Financial Statements, except trade accounts payable and
other current expenses and taxes incurred and accrued on Seller's books and
arising in the ordinary course of business, none of which obligations are in
default or arrears of payment; (n) any dividend or mandatory redemptions on
Seller's capital stock and no money or other property set apart for payment
or for making any other distributions to or for the account of any
shareholder of Seller; (o) any acquisition or contract to acquire in any
manner, directly or indirectly, any of the outstanding capital stock of
Seller or any other corporation; (p) any payment of or any obligation to pay
any amounts either in cash or other property to any person for cancellation
of any outstanding options, warrants or agreements to acquire shares of
Seller's capital stock; (q) change in the capital structure or Certificate of
Incorporation or Bylaws of Seller; (r) any material change in the accounting
methods or practices followed by Seller in connection with the Business and
operations of Seller; and (s) any written notice of any violation or any
written notice of a threatened violation of applicable law as to the Business
or operations of Seller; provided, however, that Seller shall not be deemed
to have breached this representation unless the failure to disclose the
information requested hereunder gives rise to a Material Adverse Effect.
2.6 Employee Matters. Section 2.6 of the Seller and Shareholder
Disclosure Letter sets forth an accurate and complete list of the names of
all persons employed by Seller in connection with the Business as of the
Closing (the "Designated Employees"), along with such persons' titles, job
description if not immediately apparent from such title, salary or hourly
rate, and length of employment. Seller has complied in all material respects
with all applicable laws, rules and regulations of governmental agencies or
authorities relating to the employment of labor in connection with the
operation of its Business, including, but without limitation, ERISA and the
regulations and published interpretations thereunder, the requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
applicable local, state and federal civil rights laws, and those relating to
hours, collective bargaining, labor unions and labor relations, unemployment
insurance, worker's compensation, equal employment opportunity, and the
payment and withholding of taxes, including income and social security taxes.
Further, Seller has complied in all material respects with any applicable
state or federal laws relating to the termination of its Business and
reduction of its staff, including, without limitation, the WARN Act and any
state or local equivalents thereof. There has been no violation of the
reporting and disclosure requirements imposed under ERISA, COBRA or the
Internal Revenue Code for which any penalty has been or may be imposed.
Seller has not agreed to recognize any union or other collective bargaining
unit, nor has any union or other collective bargaining unit been certified as
representing any of its employees and Seller has not experienced any strikes,
work stoppages, significant grievance procedures or claims of unfair labor
practices nor, to Seller's or Shareholder's Knowledge, have there been any
overt threats to file any such significant grievance proceedings under unfair
labor practices. As of the Closing Date, Seller has terminated all of the
Designated Employees in full compliance with all applicable federal and state
laws. Purchaser shall offer employment to all of such employees in
accordance with Section 4.15. On or before the Closing Date, Seller shall
satisfy in full or make adequate provisions for full satisfaction of all
obligations to or on account of the Designated Employees arising out of or in
connection with their employment (and termination of their employment)
including, without limitation, the payment of withholding taxes, salaries,
bonuses, health and welfare contributions or benefits, pension or profit
sharing plans or benefits, workers' compensation insurance, and accrued
vacation, and, if applicable, sick leave, and any options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights or other
contracts or commitments which could require Seller to sell, issue or
otherwise cause to become outstanding any stock or other interest in Seller.
2.7 Sales Representatives, Dealers and Distributors. Section 2.7 of
the Seller and Shareholder Disclosure Letter sets forth a complete list of
those Contracts with any person under which such other person is a sales
agent, representative, dealer or distributor of any of the services or
products of Seller. True and correct copies of all agreements listed in
Section 2.7 of the Seller and Shareholder Disclosure Letter have been made
available to Purchaser.
2.8 Pending Claims. Except as set forth in Section 2.8 of the Seller
and Shareholder Disclosure Letter, there are no pending or, to the Knowledge
(as defined herein) of Seller and Shareholder, threatened claims of any kind,
or actions, lawsuits, proceedings or disputes ("Actions") against or
affecting the Purchased Assets, the Business or operations of Seller, or
Seller's ability to enter into this Agreement and consummate the transactions
contemplated hereby. There are no unpaid judgments of any kind against
Seller; there are no contracts of Seller subject to renegotiation or
unilateral adjustment; Seller has not been charged with or, to the Knowledge
of Seller and Shareholder, threatened with a charge or violation nor, to the
Knowledge of Seller and Shareholder, is Seller under investigation with
respect to any alleged violation of any agreement or any provision of any
federal, state or local law or administrative ruling or regulation relating
to any aspect of the Business or Seller's operations. There are no Actions
by Seller or Shareholder currently pending or which Seller or Shareholder
intends to initiate regarding the Purchased Assets, the Business or
operations of Seller, or Seller's ability to enter into this Agreement and
consummate the transactions contemplated hereby.
2.9 Title to the Purchased Assets; Condition and Sufficiency of the
Purchased Assets. Seller is the sole and exclusive owner of and has good and
marketable title to or has sufficient right to use, consistent with the
operation of the Business as currently conducted, all of the Purchased
Assets, free and clear of all Liens and Encumbrances other than the Permitted
Liens. The Purchased Assets constitute all of the machines, equipment,
tooling, fixtures, furniture, computer software, intellectual property
assets, office furnishings and other tangible and intangible personal
property which are owned by Seller and utilized in connection with the
Business. The Purchased Assets are in good operating condition and repair,
and are adequate for the uses to which they are being put. The Purchased
Assets are regularly maintained, subject to normal wear and tear. Except as
disclosed in Section 2.9 of the Seller and Shareholder Disclosure Letter, all
tangible Purchased Assets will be located at the Lake Forest facility at
Closing and Purchaser will have complete and unrestricted ownership of,
access to, and use of those Purchased Assets at Closing.
2.10 Contracts. Set forth in Section 2.10 of the Seller and
Shareholder Disclosure Letter is a complete list of the Material Contracts.
As used in this Agreement, "Material Contract" shall mean a Contract (i)
providing for payment or receipt of TWENTY-FIVE THOUSAND DOLLARS ($25,000) or
more over the life of the contract, by which Seller is bound with respect to
the Business or the Purchased Assets or (ii) to which Seller is a party that
is reasonably necessary for Purchaser to continue the Business and operations
of Seller in substantially the same manner as was carried on immediately
prior to the Closing, but in each case, excluding any contract with a
customer listed in Section 2.12 of the Seller and Shareholder Disclosure
Letter. Each Material Contract is in full force and effect and Seller is not
in breach or default thereunder in any material respect and, to the Knowledge
of Seller and Shareholder, each non-material Contract is in full force and
effect and Seller is not in breach or default thereunder. To the Knowledge
of Seller and Shareholder, no other party to any such Contract is in breach
or default thereunder in any material respect. Those Material Contracts that
by their terms either are not assignable, or require the consent of a third
party to be assigned to Purchaser are identified as such in Section 2.10 of
the Seller and Shareholder Disclosure Letter. Seller and Shareholder hereby
agree to use all commercially reasonable efforts to obtain required consents
with respect to the Material Contracts.
2.11 Leases. Except as may be set forth in Section 2.11 of the Seller
and Shareholder Disclosure Letter, Seller does not lease any real or personal
property used or useful in the Business. All leases listed in Section 2.11
of the Seller and Shareholder Disclosure Letter and constituting assigned
Contracts are valid and in full force, and there does not exist any default
or event that with notice or lapse of time, or both, would constitute a
default or event of acceleration under any of these leases.
2.12 Customers. Section 2.12 of the Seller and Shareholder Disclosure
Letter contains a correct and current list, in all material respects, of all
customers of Seller as of the Closing Date.
2.13 No Breach or Violation. Subject to obtaining any required third
party consents identified on Section 2.10 of the Seller and Shareholder
Disclosure Letter, the consummation of the transactions contemplated by this
Agreement will not result in or constitute any of the following: (a) an event
that, with notice or lapse of time or both, would be a material default,
breach or violation of any of the Certificate of Incorporation, Bylaws or
organizational documents of Seller, or of any lease, license, promissory
note, conditional sales contract, commitment, indenture, mortgage, deed of
trust or other agreement, instrument or arrangement to which Seller is a
party or by which it or its property is bound, except where such default,
breach or violation would not have a Material Adverse Effect on Purchaser's
ability to continue and support the Business following the Closing in the
manner contemplated hereby; (b) except as would not have a Material Adverse
Effect: (i) an event that would permit any party to terminate, cancel,
accelerate, modify or require any notice under any Material Contract with
Seller or to accelerate or modify the maturity of any Assumed Liabilities;
(ii) violate any applicable federal, state, municipal, administrative or
other law, statute, rule, regulation, ordinance or other applicable
restriction promulgated by a governmental authority; or (iii) the creation or
imposition of any Liens and Encumbrances on any of the Purchased Assets.
2.14 Interest in Customers, Suppliers and Competitors. Neither
Shareholder nor Seller has any direct or indirect interest (other than a
passive investment in less than five percent (5%) of the outstanding voting
securities of a company that is required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended, or similar
regulations under Canadian securities laws) in any competitor, supplier or
customer of Seller or in any person from whom or to whom any of them leases
any real or personal property, or in any other person with whom Seller is
doing Business.
2.15 Corporate Documents. Seller has made available to Purchaser for
its examination: (a) copies of the Certificate of Incorporation, Bylaws and
other organizational documents of Seller; and (b) copies of the stock
certificate ledger and the stock certificate(s) representing all the issued
and outstanding shares of capital stock of Seller.
2.16 Compliance. All Business and operations of Seller are being
conducted in conformity with all applicable rules, ordinances and other laws
pertaining thereto where such failure to operate in conformity with all
applicable rules, ordinances and other laws pertaining thereto would have a
material adverse effect on the Business. Seller has not received any notice
and has no knowledge or reasonable grounds to believe that Seller is not in
compliance in all material respects with all federal, state and local laws
relating to the Business or operations of Seller or its properties. Seller
and its operations and properties are presently in compliance with all
applicable Occupational Safety and Health Administration ("OSHA") rules,
regulations and laws. Seller has not received any notice of, and does not
know, or have reason to know of any potential occupational safety and health
problem in connection with the operations or properties of Seller where such
problem would have an adverse effect on the Business.
2.17 Intellectual Property. Section 2.17 of the Seller and Shareholder
Disclosure Letter contains a list of all identified patents, trademarks,
copyrights, trade names, service marks, licenses, source code, and computer
software to be transferred to Purchaser hereunder, whether registered or
unregistered (the "Intellectual Property"). In addition, Purchaser shall
obtain certain rights to Seller's intellectual property pursuant to the
perpetual, royalty-free, non-exclusive license to use and modify the host
system software in connection with the Business, fixed location industrial
monitoring and control applications, and fixed or mobile public safety
applications (the "Host System Software License"), substantially in the form
attached hereto as Exhibit D; the perpetual, royalty-free, non-exclusive
license to use certain of Seller's trademarks and royalty-free, non-exclusive
right to use the GPR-1 device and firmware, including full documentation of
the protocol for communicating with the device (but excluding any
intellectual property related to the design of the device or its operating
software), in each case, solely in connection with the Business and in
accordance with the terms of the Product Supply and Data Services Agreement
substantially in the form attached hereto as Exhibit E (the intellectual
property covered by such licenses, the "Shared Intellectual Property"). The
Intellectual Property and the Shared Intellectual Property together
constitute all of the rights owned or for which Seller has the right to
convey to patent, copyright, trademark, trade secret or other intellectual
property protection for any of the same and for any other proprietary
information and materials included with the Purchased Assets that are related
to the Business. All of the Intellectual Property is owned by Seller or
Seller has the right to use such Intellectual Property and, to the extent set
forth in Section 2.17 of the Seller and Shareholder Disclosure Letter, has
been duly registered or filed with the appropriate governmental office.
Except as set forth in Section 2.17 of the Seller and Shareholder Disclosure
Letter: (a) Seller does not use any of the Intellectual Property without the
consent of any rightful owner; (b) there are no attachments or other Liens
and Encumbrances, other than Permitted Liens on any of the Intellectual
Property; (c) except as set forth in the Contracts, Seller does not pay any
licensing fee, royalty or other payment to any other person or entity with
respect to any Intellectual Property or use thereof; (d) Seller's right to
use and transfer any and all of the Intellectual Property is perpetual and
unrestricted; (e) to the Knowledge of Seller and Shareholder, there are no
claims or demands of any other person, firm or corporation pertaining to any
of the Intellectual Property; (f) there are no proceedings which have been
instituted or are pending, or to the Knowledge of Seller and Shareholder,
threatened which challenge any right of Seller with respect to the
Intellectual Property; and (g) to the Knowledge of Seller and Shareholder, no
intellectual property used in the Business infringes on the intellectual
property rights of others or is being infringed on by others or is subject to
any outstanding order, decree, judgment or stipulation. Seller has not at
any time been charged with any infringement of any adversely held patent,
trademark, trade name or copyright. Seller agrees to promptly execute any
and all assignments and other documents necessary for the transfer of the
Intellectual Property to Purchaser.
2.18 Tax Returns and Audits. Except as would not have a Material
Adverse Effect, Seller has duly and timely filed with the appropriate
governmental agencies all tax returns and tax reports due and required to be
filed by Seller, including, but not limited to, all tax returns, filings and
reports due or required to be filed by Seller, including all federal, state
and local profits, income, sales, use, occupation, property, excise, social
security, withholding, unemployment insurance, health licenses and other
taxes, and Seller has paid or provided for the payment of all such taxes and
payments, including all such taxes and payments due or required to be paid by
Seller, through the Closing. Seller has no written notice of any pending
audit pertaining to, or claims for, taxes, or assessments asserted against
Seller by any taxing authority in respect of any period to date. No
agreement for the extension of the time for the assessment of any amount of
tax has been entered into by or on behalf of Seller. Except as would not
have a Material Adverse Effect, with respect to Seller's own employees,
Seller has withheld from amounts paid to such employees and, to the extent
due, has paid, or will pay as due, to the appropriate governmental agencies,
all taxes or other amounts required to be withheld, including, but not
limited to, social security, federal withholding, state withholding and local
withholding taxes.
2.19 Liabilities to Customers. To the Knowledge of Seller and
Shareholder, Seller does not have any liability or potential liability
to any current or past customer arising from a breach of a customer contract.
2.20 Environmental Matters. To the Knowledge of Seller and
Shareholder, after due inquiry: (a) the property and assets of Seller and the
operations conducted thereon by Seller and the use, maintenance or operation
of such property and assets, do not violate any applicable federal, state or
local environmental law, regulation or ordinance (each hereinafter an
"Environmental Law"), including by way of illustration and not by way of
limitation, the Clean Air Act, the Federal Water Pollution Control Act of
1972, the Resource Conservation and Recovery Act of 1976, the Comprehensive
Environmental Response Compensation and Liability Act of 1980, and the Toxic
Substances Control Act (including any amendments or extension thereof, and
rules, regulations, standards or guidelines pursuant to any Environmental
Law), and are not subject to any existing, pending or threatened
investigation, inquiry or proceeding by any governmental authority or to any
remedial obligations under any Environmental Law; (b) except for materials
used in the ordinary course of the Business in full compliance with all
Environmental Laws, no toxic or hazardous or noxious substance, material or
waste which is regulated by any local, state or United States government or
agency thereof ("Hazardous Substance") has been generated, disposed of or
otherwise released by Seller or by others in connection with the properties
used by or operations of Seller; (c) no notice of any violation of any
Environmental Law has been received by Seller concerning the properties used
by or operations of Seller and there are no existing or pending requirements
of any governmental authority relating to environmental matters requiring any
remedial action or other work, repairs, construction or capital expenditures
with respect to such properties or operations of Seller; (d) Seller does not
have any contingent liability in connection with the release of any Hazardous
Substance into the environment or in connection with any violation or non-
compliance with any Environmental Law; and (e) Seller's products offered for
sale, as of the Closing Date, are compliant with the Restriction of Hazardous
Substances Directive (RoHS) 2002/95/EC.
2.21 Employee Benefit Matters.
(a) Except as set forth in Section 2.21 of the Seller and
Shareholder Disclosure Letter, Seller does not have any pension, profit
sharing, retirement, fringe benefit, deferred compensation, stock purchase,
stock option, incentive, bonus, vacation, severance, disability,
hospitalization, medical insurance, life insurance or any other type of
employee benefit plan, program or arrangement within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including without limitation any defined benefit plan ("Defined
Benefit Plan") within the meaning of Section 3(35) of ERISA or Section 414(1)
of the Internal Revenue Code (the "Code") or any defined contribution plan
("Defined Contribution Plan") within the meaning of Section 3(34) of ERISA or
Section 414(1) of the Code or any multiemployer plan ("Multiemployer Plan")
within the meaning of Section 3(37) and 4001(a)(3) of ERISA (hereinafter each
individually referred to as a "Plan" and collectively referred to as the
"Plans") on behalf of any current or former officers or employees of Seller
(whether on an active or frozen basis).
(b) Except as set forth in Section 2.21 of the Seller and
Shareholder Disclosure Letter Seller does not sponsor, maintain, contribute
to or otherwise have any obligation with respect to any Plan. Seller has
made available to Purchaser true and correct copies of (1) all documents
embodying each of the Plans referred to in Section 2.21 of the Seller and
Shareholder Disclosure Letter (or true and correct written summaries of such
Plans to the extent not evidenced by documents), (2) all documents embodying
trusts relating to any such Plans as they may have been amended to the date
hereof, and (3) copies of the last filed Annual Report (Form 5500 or 5500-C)
with respect to each Plan and all Schedules and exhibits to all such
documents.
(c) Each Plan listed in Section 2.21 of the Seller and
Shareholder Disclosure Letter intended to qualify under Section 401(a) of the
Code or under Section 501(c)(9) of the Code has received a favorable
determination letter from the Internal Revenue Service, and the related
trusts have been determined to be exempt from taxation. A copy of the most
recent determination letter with respect to each such Plan has been made
available to Purchaser and, to the Knowledge of Seller and Shareholder,
nothing has occurred since the date of such letter that would cause the loss
of such qualification or exemption. Each such Plan has been operated in all
material respects in accordance with its terms. To the Knowledge of Seller
and Shareholder, no investigation or review by the Internal Revenue Service
is currently pending or is contemplated in which the Internal Revenue Service
has asserted or may assert that any such Plan is not qualified under Section
401(a) of the Code or that any related trust is not exempt under Section 501
of the Code. No assessment of any federal income taxes has been made or, to
the Knowledge of Seller and Shareholder, is contemplated against Seller, or
any related trust of any such Plan on the basis of a failure of such
qualification or exemption. Annual Reports (Form 5500 or 5500-C) have been
timely filed with respect to all such Plans. Except as set forth in Schedule
2.21, no Plan described therein is funded through a trust intended to be
exempt from taxation under Section 501(c) of the Code.
(d) To the Knowledge of Seller and Shareholder, there has been
no violation of the reporting and disclosure requirements imposed either
under ERISA, COBRA or the Code for which a penalty has been or may be imposed
with respect to any Plan listed in Section 2.21 of the Seller and Shareholder
Disclosure Letter. To the Knowledge of Seller and Shareholder, no Plan or
related trust has any liability of any nature, accrued or contingent,
including, without limitation, liabilities for federal, state, local or
foreign taxes, other than for routine payments to be made in due course to
participants and beneficiaries.
(e) Except as set forth in Section 2.21 of the Seller and
Shareholder Disclosure Letter: (1) Seller has made all payments due to date
under or with respect to each Plan set forth in Section 2.21 of the Seller
and Shareholder Disclosure Letter and all amounts properly accrued to date
due as liabilities of Seller, under or with respect to each such Plan, for
the current plan years, have been recorded on the books of Seller; (2) Seller
has performed all material obligations required to be performed under or with
respect to each such Plan, and is not in material default under, or in
material violation of, any such Plan; (3) Seller is in compliance in all
material respects with the requirements prescribed by all statutes, orders or
governmental rules or regulations applicable to each such Plan and each trust
related to each such Plan, including, without limitation, ERISA, COBRA and
the Code, and neither Seller nor any such Plan or any related trust is
required to take any material action to avoid violation of any such
requirements; (4) neither Seller nor any director, officer or, to the
Knowledge of Seller and Shareholder, any employee of Seller has engaged in
any "prohibited transaction", as such term is defined in Section 4975 of the
Code or Section 406 of ERISA, which could subject Seller, Purchaser or any
officer, director or employee of Seller or Purchaser to any tax or penalty
imposed under Section 4975 of the Code or Section 502(i) of ERISA; (5) there
are no actions, suits, arbitrations, claims, governmental or other
proceedings (formal or informal) or, to the Knowledge of Seller and
Shareholder, investigations, pending or threatened against any such Plan, the
assets of any such Plan, any trust related to any such Plan or any fiduciary,
administrator or sponsor (in its capacity as such) of any such Plan or
related trust; (6) no such Plan which is subject to Part III of Subtitle B of
Title I of ERISA or Section 412 of the Code has incurred any "accumulated
funding deficiency" (as defined in Section 302(a)(2) of ERISA and 412(a)(2)
of the Code) whether or not waived; (7) Seller has not incurred, and does not
reasonably expect to incur, any material liability to the Pension Benefit
Guaranty Corporation, and no Defined Benefit Plan described in Section 2.21
of the Seller and Shareholder Disclosure Letter has been terminated or has
been the subject of any termination proceeding or "reportable event" (within
the meaning of Section 4043(b) of ERISA), under circumstances which could
reasonably result in the imposition of any such liability on Seller; (8) no
notice of termination has been filed by the plan administrator pursuant to
Section 4041 of ERISA or issued by the Pension Benefit Guaranty Corporation
pursuant to Section 4042 of ERISA with respect to any such Defined Benefit
Plan; and (9) Seller has not contributed, nor does it now contribute to any
Multiemployer Plan.
2.22 Full Disclosure. No representation or warranty of Seller or
Shareholder made in this Agreement or any Exhibit or Schedule hereto contains
or will contain any untrue statements of material fact, or omit any material
fact, the omission of which would be materially misleading. Neither Seller
nor Shareholder is aware of any facts that at the present time would cause
any of their representations and warranties to contain any untrue statement
of material fact, the admission of which would be misleading. The copies of
all leases, instruments, agreements, licenses, permits, certificates, books,
statements, records and other documents and information which have been or
may be delivered by Seller or Shareholder in connection with the transactions
contemplated by this Agreement, are, to the Knowledge of Seller and
Shareholder, complete and correct, in all material respects.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND PARENT
Purchaser, and where indicated, Parent hereby represent and warrant to
Seller and Shareholder that:
3.1 Organization. Purchaser is a corporation duly organized, existing
and in good standing under the laws of the State of Delaware. Purchaser is
duly qualified to do business as a foreign corporation in good standing in
the State of California.
3.2 Authority. Purchaser and Parent have each taken all necessary
corporate action on its part as may be required under the laws of the State
of Delaware and under each of their respective Certificates of Incorporation
and Bylaws to authorize the execution, delivery and carrying out of this
Agreement.
3.3 Enforceability. This Agreement constitutes a valid and legally
binding obligation of Purchaser, enforceable against it in accordance with
the terms hereof, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights or by general
equitable principles. To the Knowledge of Purchaser, the execution and
delivery of this Agreement and consummation of the transactions described
herein will not (immediately, upon notice, or with the passage of time)
result in the termination or acceleration of any indebtedness, agreement or
other obligation of Purchaser, and are not prohibited by, do not and will not
materially violate or conflict with any provision of, and do not and will not
constitute a material default under or breach of: (a) the Certificate of
Incorporation and Bylaws of Purchaser; (b) any contract, agreement, or other
instrument to which Purchaser is a party or by which Purchaser is bound,
except where such default, breach or violation would not adversely affect
Purchaser's ability to continue and support the Business and operations of
Seller following the Closing in the manner contemplated hereby; (c) any
order, decree or judgment of any court or governmental agency; or (d) any
law, rule or regulation applicable to Purchaser where such violation would
have a material adverse effect on Purchaser.
3.4 Consents and Approvals. No consent, approval, or authorization of,
or declaration, filing, or registration with any governmental or regulatory
authority is required in connection with the execution and delivery of this
Agreement or the consummation of the transactions described herein.
3.5 Purchaser Investigation and Due Diligence. Purchaser has
investigated the condition, value and suitability of the Purchased Assets, as
well as all matters affecting the desirability of its Purchase of the
Purchased Assets hereunder. Purchaser acknowledges that Purchaser has been
given the opportunity to conduct its own due diligence with regard to the
Business and Purchased Assets.
3.6 Funds. Purchaser and Parent, jointly and severally, hereby
represent and warrant to Seller and Shareholder that the Purchaser will have,
as and when required, sufficient funds to perform its obligations in
accordance with the terms of this Agreement.
ARTICLE IV
COVENANTS
4.1 Cooperation. Each of the parties hereto shall cooperate with the
other parties in all reasonable respects, and shall use commercially
reasonable efforts to carry out and consummate the transactions contemplated
by this Agreement at the earliest practicable time.
4.2 Consents. Seller shall use commercially reasonably efforts to
obtain the consents, waivers and approvals under any of the Material
Contracts or under any contractual restrictions relating to the Purchased
Assets that are necessary to permit the transfer of such Purchased Assets to
Purchaser as may be required in connection with this Agreement. Purchaser
shall reasonably cooperate in Seller's efforts to obtain such consents,
waivers and approvals.
4.3 Post-Closing Access. Seller and Purchaser agree (A) to retain all
books and records with respect to tax matters pertinent to the Business
relating to any taxable period beginning before the Closing Date for a period
of two years and (B) if requested by the other party within two years of the
Closing Date, to give the other party access to such books and records for
the purpose of making copies of such books and records.
4.4 Non-Competition and Non-Solicitation.
(a) Seller and Shareholder, jointly and severally, agree that,
without the prior written consent of Purchaser, for a period of five (5)
years following the Closing Date, they will not, (1) directly distribute and
sell asset tracking products and services that would directly compete with
the Business; or (2) solicit the business of any person or entity that is a
customer of the Business as of the Closing Date or any person or entity that
was a customer of the Business in the one-year period prior to the Closing
Date; provided, however, that at any xxxx Xxxxxx and Shareholder may solicit
the business of any person or entity that was a customer of the Business for
the purpose of providing products other than those provided by or competitive
with the Business. The foregoing restriction shall bind Seller and
Shareholder, whether they act for themselves or for any other person or
entity and whether they act as proprietor, principal, shareholder (other than
a less-than-5% shareholder of a publicly-traded corporation), partner,
member, agent, representative, director, officer, employee, consultant,
independent contractor, lender or in any other capacity. Seller and
Shareholder hereby acknowledge that the customer list of Seller is not
generally known to the public and that Seller's customer list is the result
of a reputation for providing a quality product developed over many years of
business. Seller and Shareholder agree that, for a period of five (5) years
following the Closing Date, any dealer or distributor agreements that Seller
or Shareholder enter into will include a comparable market restriction
preventing resale or redistribution of asset tracking products in violation
of the market restriction described in this Section 4.4(a)(1). Further,
within sixty (60) days of the Closing Date, Seller and Shareholder agree to
use commercially reasonable efforts to amend any dealer or distributor
agreements in effect as of the Closing Date to include such market
restriction.
(b) Seller and Shareholder acknowledge that since the Business
of Seller involves technology that is used in products sold in the U.S. and
Canada, Purchaser shall receive non-competition protection for the activities
as defined in Section 4.4(a) in the U.S. and Canada.
(c) If, at the time of enforcement of any of the provisions of
this Section 4.4 a court holds that the restrictions stated herein are
unreasonable under the circumstances then existing or are otherwise illegal,
invalid or unenforceable in any respect by reason of its duration, definition
of geographic area or scope of activity, or any other reason, the parties
hereto agree that the maximum period, scope or geographical area reasonable
or otherwise enforceable under such circumstances shall be substituted for
the stated period, scope or area.
(d) Seller and Shareholder acknowledge that: (1) the covenants
and the restrictions contained in this Section are necessary, fundamental,
and required for the protection of the goodwill of the Business purchased by
Purchaser; (2) such covenants relate to matters which are of a special,
unique, and extraordinary character that gives each of such covenants a
special, unique, and extraordinary value; and (3) a breach of any of such
covenants will result in irreparable harm and damages to Purchaser which
cannot be adequately compensated by a monetary award. Accordingly, it is
expressly agreed that in addition to all other remedies available at law or
in equity, Purchaser shall be entitled to the immediate remedy of a temporary
restraining order, preliminary injunction, or such other form of injunctive
or equitable relief as may be used by any court of competent jurisdiction to
restrain or enjoin any of the parties hereto from breaching any such covenant
or provision or to specifically enforce the provisions hereof, without
posting bond.
4.5 Confidentiality. In connection with the execution of this
Agreement and in the course of performance of the transactions contemplated
herein, a party (the "Receiving Party") has received or may receive data and
other Confidential Information (as defined below) with respect to the other
party or any of its affiliates (collectively, the "Disclosing Party"). The
Receiving Party shall, and shall cause their officers, directors, employees,
agents, affiliates and representatives (collectively, "Related Persons") to,
treat any in connection with this Agreement, strictly confidential, and will
not disclose any such Confidential Information to third parties or use such
Confidential Information; provided, however, that this prohibition shall not
apply to any information that: (a) is, at the time of disclosure, generally
known by or available to the public; (b) becomes publicly available other
than as a result of prohibited disclosure by the Receiving Party; (c) is
disclosed to the Receiving Party by any person or entity that is not subject
to any confidentiality restriction imposed by the Disclosing Party; (d) the
Receiving Party develops independently, provided that the Receiving Party can
document such independent development; (e) is disclosed with the prior
written approval of the Disclosing Party; (f) the Receiving Party is
required to disclose under applicable public company reporting obligations,
or (g) by other applicable law or by order of any court of competent
jurisdiction, but, in the case of (g), the Receiving Party shall first give
the Disclosing Party notice of such law or court order and an opportunity to
object, if permitted by such law or court order. Because the breach or
attempted or threatened breach of this restrictive covenant will result in
immediate and irreparable injury to the Disclosing Party for which the
Disclosing Party will not have an adequate remedy at law, the Disclosing
Party shall be entitled, in addition to all other remedies, to a decree of
specific performance of this covenant and to a temporary and permanent
injunction enjoining such breach, without posting bond or furnishing similar
security. The provisions of this Section are in addition to and independent
of any agreements or covenants contained in any other agreement between
Purchaser, Seller or Shareholder. The term "Confidential Information" shall
include all information which falls within any of the following categories:
(i) information specified, either orally or in writing, as confidential by
the Disclosing Party at the time of disclosure; (ii) information relating to
the trade secrets of the Disclosing Party, or any specifically identified
customer or supplier of the Disclosing Party; (iii) information relating to
existing or contemplated products, pricing, services, technologies, designs,
processes, formulae, algorithms, research or product developments of the
Disclosing Party, or any specifically identified customer or supplier of the
Disclosing Party; (iv) information related to either party's financial
condition and future business strategy; or (v) the terms and conditions of
this Agreement. The parties agree to be responsible for the breach and
threatened breach of any obligation of confidentiality under this Agreement
by any of their respective Related Persons. Notwithstanding the Closing of
the transactions contemplated herein, the obligations described in this
Section shall survive until the second anniversary of the Closing Date.
4.6 Corporate Name.
(a) In accordance with the Trademark License, Purchaser shall have the
right, without the payment of additional consideration, to use "by AirIQ" on
branding and marketing materials until December 31, 2007.
(b) Seller, Shareholder and Purchaser shall cease using the "Aircept"
name on or before December 31, 2007. Purchaser hereby acknowledges that
Seller and Shareholder no longer own and may not convey rights to the
"Aircept" name; provided, however, that prior to December 31, 2007, Seller
and Shareholder shall, to the extent lawfully permitted, use commercially
reasonable efforts to maintain access to Purchaser's services through the
website presently hosted at XXXXXXX.XXX for those customers listed in Section
2.12 of the Seller and Shareholder Disclosure Letter.
4.7 Product Warranty Claims. The Escrow Funds will be reduced to the
extent product warranty claims, including, but not limited to, the cost of
warranty claims for defective products but excluding warranty claims for
product performance issues related to the analog network, during the Escrow
Period arising from pre-Closing Date sales of product by Seller exceed FIFTY
THOUSAND DOLLARS ($50,000) (the "Excess Warranty Claims"). The cost of
warranty claims, in this context, shall include all direct product warranty
costs for materials and labor for servicing product warranty claims incurred
by Purchaser.
4.8 Product Liability Claims. Seller shall be solely responsible and
assume all liability for all product liability claims, personal injury
claims, and any claims whatsoever under tort or otherwise related to the
Purchased Assets arising from the pre-Closing Date sale of product and
merchandise by Seller.
4.9 Personal Property Taxes. The parties shall prorate personal
property taxes, if any, based on the regular tax xxxx for the tax assessment
period that includes the Closing Date. Proration shall be based upon a
thirty (30) day month. Purchaser shall be responsible for the payment of the
pro rata amount of such taxes based on the number of days elapsed after the
Closing Date in the period for which such taxes relate as compared to the
total number of days for which such taxes relate. Seller shall be
responsible for the payment of the pro rata amount of such taxes based on the
number of days elapsed prior to and through Closing in the period for which
such taxes relate as compared to the total number of days for which such
taxes relate. In the event either Purchaser or Seller pays the entire amount
of such expenses, the other party shall promptly reimburse such party for the
amounts which the other party is responsible for under this Section 4.9.
4.10 Sales and Use Taxes. It is understood and agreed that any state
or local sales or use taxes that may become payable as the result of the
transfer of the Purchased Assets to Purchaser shall be fully paid and
discharged by Purchaser and Purchaser will reimburse and hold Seller free and
harmless from such sales or use taxes.
4.11 Payment of Liabilities.
(a) Seller hereby covenants that Seller will cause all
liabilities of Seller related to the Business, for which Seller has received
invoices as of the Closing Date and which are not disputed by Seller, and not
assumed by Purchaser, to be settled by Seller in full within sixty (60) days
of Closing Date, and will cause invoices related to the Business received
after the Closing Date which are not disputed by Seller, and not assumed by
Purchaser, to also be settled in full on a timely basis. Furthermore, Seller
shall settle in a timely manner the liabilities related the to Business not
assumed by the Purchaser so that the future business conducted by the
Purchaser will not be impaired by vendors or customers to whom Seller has
outstanding liabilities.
(b) Purchaser hereby covenants that Purchaser will cause all
Assumed Liabilities of Purchaser, to be settled by Purchaser in full within
sixty (60) days of Closing Date, and will cause invoices related to the
Business received after the Closing Date which are not disputed by Purchaser,
and not retained by Seller, to also be settled in full on a timely basis so
that the future business conducted by the Seller or Shareholder will not be
impaired by vendors or customers to whom Purchaser has outstanding
liabilities.
4.12 Data Services. At Purchaser's option, Shareholder will provide
wireless data service to Purchaser in accordance with the Product Supply and
Data Service Agreement.
4.13 Transition Service Agreement. Purchaser and Shareholder shall
enter into a service agreement pursuant to which Seller will provide (a)
tier one and tier two client service and technical maintenance, (b)
development of backend support functions for the Business to Purchaser and
(c) services necessary for the uninterrupted integration of the technology
and operations of the Business to the Purchaser (the "Technology and Client
Service Support Agreement"), substantially in the form attached hereto as
Exhibit F, to be available to Purchaser until December 31, 2007; provided,
however, that Seller shall provide such transition services free of charge
until March 31, 2007. Purchaser will also pay for reasonable out-of-pocket
and travel expenses for travel by Seller's personnel that is requested by
Purchaser.
4.14 Offer of Employment. The Purchaser shall offer employment to each
of the employees listed in Section 2.6 of the Seller and Shareholder
Disclosure Letter (the "Designated Employees") with the same salaries paid by
Seller as of the Closing Date and the standard employee benefits of
Purchaser, to be effective immediately following of the Closing Date, upon
evidencing a legal right to work in his or her country of current employment.
The Purchaser shall not be obligated to any Designated Employee who refuses
the Purchaser's offer of employment. The Seller shall render commercially
reasonable assistance to the Purchaser in connection with the Purchaser's
offers of employment to the Designated Employees. After the Closing, the
Purchaser may give such notice to the Designated Employees concerning the
change of their employer with respect to the Business as the Purchaser, in
light of applicable law, considers reasonable.
4.15 Delivery of Proceeds. In the event that following the Closing
Date, Seller collects or receives any proceeds on any of the accounts
receivable set forth on Section 1.1 of the Seller and Shareholder Disclosure
Letter, Seller shall deliver such proceeds to Purchaser within seven (7)
days of Seller's receipt thereof.
4.16 Customer Data Transfer. Seller and Shareholder shall use
commercially reasonable efforts to transfer data and account information for
those customers listed in Section 2.12 of the Seller and Shareholder
Disclosure Letter to Purchaser within seven (7) days of the Closing Date.
ARTICLE V
CONDITIONS PRECEDENT TO SELLER'S AND
SHAREHOLDER'S PERFORMANCE
5.1 Conditions. The obligations of Seller to sell and transfer the
Purchased Assets under this Agreement are subject to the satisfaction, at or
before Closing, of all the conditions set forth in this Article. Seller and
Shareholder may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Seller or Shareholder of any of their other
rights or remedies, at law or in equity, if Purchaser shall be in default of
any of its representations, warranties or covenants under this Agreement.
5.2 Accuracy of Representations and Warranties. All representations
and warranties by Purchaser contained in this Agreement shall be true and
correct in all material respects on and as of Closing, except (i) those
representations and warranties which address matters only as of a particular
date (which shall remain true and correct as of such date (subject to the
qualification in clause (ii) below)); and (ii) where the failure of such
representations and warranties to be so true and correct (without giving
effect to any limitation as to materiality or Material Adverse Effect of
Purchaser as set forth herein) would not result in a Material Adverse Effect.
5.3 Purchaser's Performance. Purchaser shall have performed and
complied with all covenants and agreements, and satisfied all conditions that
each is required by this Agreement to perform, comply with or satisfy, before
or at Closing.
5.4 Purchase Price. Seller shall have received the Initial Payment and
the Escrow Funds shall have been deposited into the Escrow Account.
5.5 Employment of Designated Employees. Each Designated Employee shall
have received from Purchaser an offer of employment in accordance with
Section 4.14.
5.6 Patent License. Purchaser and Seller shall have entered into a
license providing Seller and Shareholder a perpetual, irrevocable, non-
exclusive, royalty-free license to use the AirIQ Vehicle Recovery Patents (US
Patent #6,025,774 and US Patent #6,249,217) (the "Patent License"), in
substantially the form attached hereto as Exhibit G. Seller and Shareholder
will not have the right to enforce the patent.
ARTICLE VI
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE
6.1 Conditions. The obligation of Purchaser to purchase the Purchased
Assets under this Agreement is subject to the satisfaction, at or before
Closing, of all the conditions set forth in this Article. Purchaser may
waive any or all of these conditions in whole or in part without prior
notice; provided, however, that no such waiver of a condition shall
constitute a waiver by Purchaser of any of its other rights or remedies, at
law or in equity, if Seller or Shareholder shall be in default of any of
their representations, warranties, or covenants under this Agreement.
6.2 Accuracy of Representations and Warranties. All representations
and warranties by Seller or Shareholder contained in this Agreement shall be
true and correct in all material respects on and as of Closing, except (i)
those representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such date (subject
to the qualification in clause (ii) below)); and (ii) where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to materiality or Material Adverse Effect of
Seller or Shareholder as set forth herein) would not result in a Material
Adverse Effect.
6.3 Performance by Seller and Shareholder. Seller and Shareholder
shall have performed, satisfied and complied with all covenants, agreements,
obligations and conditions required by this Agreement to be performed or
complied with by them on or before Closing.
6.4 Exhibits and Schedules. All Exhibits and Schedules to this
Agreement shall have been prepared or approved by Seller and Shareholder and
shall be dated and shall be accurate as of Closing.
6.5 Books and Records. Purchaser shall have reviewed copies of all
books and records of Seller and such other documents as may be deemed
reasonably necessary by counsel for Purchaser to carry out the terms of this
Agreement.
6.6 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing.
6.7 Opinion of Counsel.
(a) An opinion dated as of the Closing and addressed to
Purchaser, by Seller's United States counsel, satisfactory to Purchaser's
counsel, and substantially to the effect as follows:
(1) Seller is a duly incorporated and validly existing
corporation and is in good standing under the laws of the State of Delaware
and has the corporate power to execute and deliver the Agreement and to
consummate the transactions contemplated thereby.
(2) The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein in accordance with the
terms hereof will not breach the provisions of the Certificate of
Incorporation and Bylaws of Seller.
(3) The Seller has duly authorized, executed and delivered the
Agreement, and the Agreement constitutes the valid and binding obligation of
Seller, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization or other laws of general applicability affecting
creditors' rights and general equity principles.
(b) An opinion dated as of the Closing and addressed to
Purchaser, by Seller's Canada counsel, satisfactory to Purchaser's counsel,
and substantially to the effect as follows:
(1) Shareholder is a duly and validly organized and existing
corporation and is in good standing under the laws of Canada with full
corporate power to carry on the business in which it is engaged.
(2) The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein in accordance with the
terms hereof will not breach the provisions of the articles and bylaws of
Shareholder.
(3) The Shareholder has duly authorized, executed and
delivered the Agreement, and the Agreement constitutes the valid and binding
obligation of Shareholder, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization or other laws of general
applicability affecting creditors' rights and general equity principles.
6.8 Xxxx of Sale. Purchaser shall have received from Seller an
executed Xxxx of Sale.
6.9 Working Capital. The Purchased Assets shall include a minimum of
ONE MILLION DOLLARS ($1,000,000) of Working Capital. As used in this
Agreement, "Working Capital" shall mean (i) the sum of: net accounts
receivable, pre-paid expenses and inventory (each as set forth in Section 1.1
of the Seller and Shareholder Disclosure Letter), less (ii) the sum of:
accounts payable and accrued expenses (each as set forth in Section 1.4 of
the Seller and Shareholder Disclosure Letter).
6.10 Approval and Execution of Documents. The form and substance of
all certificates, instruments, opinions and other documents delivered to
Purchaser under this Agreement shall be satisfactory in all reasonable
respects to Purchaser and its counsel, and shall be properly executed by
Seller and Shareholder, as applicable.
6.11 Certificate of Seller; Other Documents. Purchaser shall have
received from Seller: (a) a certificate, dated as of the Closing, signed by
officers of Seller certifying, in such detail as Purchaser may reasonably
request, that the conditions specified in this Article VI have been
fulfilled; (b) a certificate of good standing for Seller dated not more than
two (2) weeks prior to Closing, in jurisdictions in which Seller is qualified
to do business at the time of Closing; (c) on or before the Closing, a
corporate resolution of Seller's Board of Directors and Seller's shareholders
duly authorizing and approving the transactions provided for under this
Agreement and the Closing hereof; and (d) any other instruments, certificates
or documents as may be reasonably requested by Purchaser or its counsel.
ARTICLE VII
THE CLOSING
7.1 Time of Closing. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall be held at 0000 X. Xxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx, at 5:00 P.M., on March 16, 2007, following the
satisfaction or waiver by the applicable party of the conditions to Closing,
or at such other time, date and place as may be mutually agreed to in writing
by the parties. The date on which the Closing actually occurs is referred to
herein as the "Closing Date."
7.2 Seller's and Shareholder's Obligations. At the Closing, Seller and
Shareholder shall deliver or cause to be delivered to Purchaser: (a) the
Purchased Assets; (b) the executed Xxxx of Sale; and (c) all documents,
certificates, letters, agreements and other items required by Article VI
hereof which have not already been delivered prior to Closing.
7.3 Purchaser's Obligations. At the Closing, Purchaser shall deliver
or cause to be delivered to Seller: (a) that part of the Purchase Price due
and payable at the Closing as set forth above in Section 1.6; and (b) all
documents, certificates and other items required by Article V hereof which
have not already been delivered prior to Closing.
7.4 Cooperation. Each of the parties hereto shall cooperate with the
other parties in all reasonable respects, and shall take all steps necessary
to carry out and consummate the transactions contemplated by this Agreement
at the earliest practicable time.
7.5 Further Documents or Actions. Seller and Shareholder, at any time
before or after the Closing, will execute, acknowledge and deliver any
further assignments or conveyances, and any other assurances, documents and
instruments of transfer, reasonably requested by Purchaser and will take any
other action consistent with the terms of this Agreement that may be
reasonably requested by Purchaser.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification.
(a) By Seller and Shareholder. Upon the terms and subject to
the conditions of this Agreement, Seller and Shareholder shall, jointly and
severally, indemnify and hold harmless Purchaser and its shareholders,
officers, directors, employees, agents, representatives, successors and
assigns (collectively, the "Purchaser Indemnitees"), from and against, and
will pay them the amount of, any and all losses, costs, suits, actions,
claims, demands, liabilities, damages (including incidental and consequential
damages), penalties and expenses (including reasonable attorneys' and
auditors' fees and the costs of investigation and defense) (collectively, the
"Losses"), incurred or suffered by the Purchaser Indemnitees arising during
the twelve (12) month period following the Closing and relating to or arising
out of or in connection with any of the following: (1) any material breach as
of the Closing Date in any representation or warranty made by Seller in this
Agreement; (2) any breach or nonfulfillment by Seller of any of its
covenants, or agreements or other obligations in this Agreement; (3) the
ownership of the Purchased Assets prior to the Closing Date (except for
Assumed Liabilities), irrespective of Seller's Knowledge; (4) the operation
of the Business prior to the Closing Date, including, but not limited to, any
employee, third party, tort, or product liability claims (except for Assumed
Liabilities) irrespective of Seller's Knowledge; and (5) any claims related
to products shipped by Seller prior to the Closing Date for which required or
necessary regulatory, carrier or customer certifications had not been
obtained prior to shipment (except for claims related to or arising from the
analog wireless network and/or the Aeris services); but in each case
excluding any Losses incurred or suffered by the Purchaser Indemnitees
relating to or arising out of the Product Supply and Data Services Agreement,
Technology and Client Service Support Agreement or the Fulfillment Support
Agreement (Exhibit H); provided, however, (A) the indemnification obligations
of Seller and Shareholder pursuant to this Section shall not exceed FOUR
MILLION DOLLARS ($4,000,000) in the aggregate (the "Seller and Shareholder
Cap Amount"); (B) Seller and Shareholder shall not be obligated to indemnify
the Purchaser Indemnitees for any loss, injury, damage or deficiency
resulting from any breach of representation or warranty, the breach of which
either Purchaser or Parent had Knowledge prior to the Closing Date; (C)
Seller and Shareholder shall not be obligated to indemnify the Purchaser
Indemnitees for any Losses related to or arising from the accounts receivable
listed in the Purchased Assets; and (D) Seller and Shareholder shall not be
obligated to indemnify the Purchaser Indemnitees with respect to any claims
until the total of all such claims with respect to such matters exceeds TWO
HUNDRED THOUSAND DOLLARS ($200,000) (the "Seller's Threshold") in the
aggregate; provided, however, that if the total amount of such claims exceeds
the Threshold in the aggregate, the Purchaser Indemnitees shall be entitled
to be indemnified against the entire amount of such claims, not merely the
portion of such claims exceeding the Seller's Threshold.
(b) By Purchaser. Upon the terms and subject to the conditions
of this Agreement, Purchaser and Parent shall, jointly and severally,
indemnify and hold harmless Seller and its shareholders, officers, directors,
employees, agents, representatives, successors and assigns (collectively, the
"Seller Indemnitees"), from and against, and will pay them the amount of, any
and all Losses incurred or suffered by Seller Indemnitees arising during the
twelve (12) month period following the Closing and relating to or arising out
of or in connection with any of the following: (1) any material breach as of
the Closing Date in any representation or warranty made by Purchaser in this
Agreement; (2) any breach or nonfulfillment by Purchaser of any of its
covenants, or agreements or other obligations in this Agreement; (3) any
Assumed Liability; (4) the ownership of the Purchased Assets following the
Closing Date; and (5) the operation of the Business following the Closing
Date, including, but not limited to, any third party, tort, or product
liability claims; provided, however, (A) the indemnification obligations of
Purchaser pursuant to this Section shall not exceed FOUR MILLION DOLLARS
($4,000,000) in the aggregate; (B) Purchaser and Parent shall not be
obligated to indemnify the Seller Indemnitees for any loss, injury, damage or
deficiency resulting from any breach of representation or warranty, the
breach of which either Seller or Shareholder had Knowledge prior to the
Closing Date; and (C) Purchaser shall not be obligated to indemnify the
Seller Indemnitees with respect to any claims until the total of all such
claims with respect to such matters exceeds TWO HUNDRED THOUSAND DOLLARS
($200,000) (the "Purchaser's Threshold") in the aggregate; provided, however,
that if the total amount of such claims exceeds the Threshold in the
aggregate, the Purchaser Indemnitees shall be entitled to be indemnified
against the entire amount of such claims, not merely the portion of such
claims exceeding the Purchaser's Threshold.
.
8.2 Claims. If a claim for indemnification is to be made by one or
more of the Purchaser Indemnitees or Seller Indemnitees (the "Indemnified
Party"), the Indemnified Party shall promptly give notice to the other party
(the "Indemnifying Party") of such claim, including the amount the
Indemnified Party will be entitled to receive hereunder from the Indemnifying
Party; provided, however, that the failure of the Indemnified Party to
promptly give notice shall not relieve the Indemnifying Party of its
obligations under this Section, except to the extent it materially prejudices
the ability to defend or settle a third-party claim. If the Indemnifying
Party does not object in writing to such claim within twenty (20) days after
receiving notice thereof, the Indemnified Party shall be entitled to recover,
on the 21st day after such notice was given, from the Indemnifying Party the
amount of such claim, and no later objection by the Indemnifying Party shall
be permitted or effective. If the Indemnifying Party agrees that it has an
indemnification obligation under this Section with respect to such claim, but
timely objects as to the amount of such claim, the Indemnified Party shall
nevertheless be entitled to recover, on the 21st day after such notice was
given, from the Indemnifying Party the undisputed lesser or liquidated amount
of such claim, without prejudice to the Indemnified Party's claim for the
difference.
8.3 Failure of Indemnifying Person to Act. In the event that the
Indemnifying Party does not assume the defense of any claim, suit, action or
proceeding covered by indemnification under this Article, then any failure of
the Indemnified Party to defend or to participate in the defense of any such
claim, suit, action or proceeding or to cause the same to be done, shall not
relieve the Indemnifying Party of its obligations under this Article.
8.4 Right of Reimbursement or Offset. In the event a claim of
indemnification is made by Purchaser pursuant to Section 8.1(a) and payment
is not made by Seller or Shareholder within the required time period,
Purchaser shall have the right to seek reimbursement for the indemnified
amount of any such valid claim from the Escrow Account, to the extent of
available funds therein, by submitting a Disbursement Request in accordance
with the terms of Escrow Agreement provided, however, that no Disbursement
Request may be made with respect to Losses arising under the Product Supply
and Data Services Agreement, Technology and Client Service Support Agreement
or the Fulfillment Support Agreement.
8.5 Defense of Third Party Claim. The Indemnifying Party may elect to
compromise or defend, and control the defense of, any action or proceeding by
a third party (a "Third-Party Claim") at its own expense and by counsel who
shall be reasonably satisfactory to the Indemnified Party. If the
Indemnifying Party elects to compromise or defend such Third-Party Claim, it
shall within twenty (20) days after receipt of the respective Third-Party
notice (or sooner, if the nature or procedural posture of the Third-Party
Claim so requires) notify the Indemnified Party making such claim of its
intent to do so, and such Indemnified Party shall reasonably cooperate upon
the request and at the expense of the Indemnifying Party in the compromise
of, or defense against, such Third-Party Claim. The foregoing
notwithstanding, the Indemnifying Party may not agree to any compromise or
settlement to which the Indemnified Party has not consented in writing, which
consent shall not be unreasonably withheld or delayed. The Indemnifying
Party shall use reasonable efforts to keep the Indemnified Party advised of
the status of any Third Party Claim that it has elected to control and the
Indemnified Party shall have the right to consult with the Indemnifying Party
regarding any such Third Party Claim. If the Indemnifying Party elects not
to compromise or defend the Third-Party Claim, or fails to notify the
Indemnified Party of its election as herein provided, or fails to diligently
defend or seek to compromise such Third-Party Claim after electing to assume
such defense or compromise, the Indemnified Party may, in the exercise of its
reasonable discretion, pay, compromise or defend such Third-Party Claim. In
any event, the Indemnified Party may participate in (but shall not have the
right to control), at its own expense, the defense of any Third-Party Claim
by the Indemnifying Party, provided, however, if the named parties to the
action or proceeding include both an Indemnified Party and an Indemnifying
Party and representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the expense
of separate counsel for such an Indemnified Party shall be paid by the
Indemnifying Party.
ARTICLE IX
NATURE AND SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS
9.1 Representations and Warranties Generally. Notwithstanding the
ability and right of a party to investigate fully the affairs of the other
party or the accuracy of any representations and warranties of the other
party, and notwithstanding any knowledge of facts determined by a party
pursuant to such investigation or right of investigation, each party has the
right to rely upon the representations and warranties of the other party
contained in this Agreement.
9.2 Effect of Certain Actions. No action taken pursuant to or related
to this Agreement, including, without limitation, any investigation by or on
behalf of any party shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, condition
or agreement contained herein.
9.3 Effect of Closing. All representations, warranties, covenants and
agreements of the parties contained in this Agreement, or in any instrument,
certificate, opinion or other writing provided for in it, shall terminate on
the twelve (12) month anniversary of the Closing Date; provided, however,
that the representations and warranties contained in Sections 2.18 (Tax
Returns and Audits), 2.20 (Environmental Matters) or 2.21 (Employee Benefit
Matters) shall each survive for the period of the applicable statutes of
limitation.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment. This Agreement may be amended by the parties hereto
at any time by execution of an instrument in writing signed on behalf of each
of the parties hereto.
10.2 Waiver. At any time prior to the Closing, any party may (a)
extend the time for the performance of any of the obligations or other acts
of any other party, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or
(c) waive compliance with any of the covenants, agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party to be bound thereby.
The failure of any party at any time or times to require performance of any
provision of this Agreement shall in no manner affect the right at any later
time to enforce the same. No waiver by any party of any breach of any term,
covenant, representation, or condition contained in this Agreement, whether
by contract or otherwise, in any one or more instances, shall be deemed to be
or be construed a waiver of any other breach of any other term, covenant,
representation, or condition contained in this Agreement.
10.3 Notices. Any and all notices, demands, requests or other
communications required or permitted by this Agreement or by law to be served
on, given to or delivered to any party hereto by any other party to this
Agreement shall be in writing and shall be deemed duly served, given or
delivered upon delivery: (a) by facsimile transmission (confirmed by any of
the methods that follow); (b) by a nationally recognized overnight courier
service such as Federal Express, UPS or DHL (with proof of service); (c) by
hand delivery; or (d) by certified or registered mail (return receipt
requested and first-class postage prepaid) and addressed as follows:
If to Seller or Shareholder: AirIQ Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX Xxxxxx X0X 0X0
Attn: Xxxx Xxxxxx, CFO
Telephone No.: (000) 000-0000
Facsimile No.: ( 000) 000-0000
With a copy to: Xxxxxxxxx & Xxxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
and: Blake, Xxxxxxx & Xxxxxxx LLP
000 Xxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx Xxxxx Xxxx
XX Xxx 00
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Purchaser or Parent: CalAmp DataCom, Inc.
0000 X. Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx, Treasurer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Any notice that is addressed and mailed in the manner herein provided shall
be conclusively presumed to have been duly given to the party to which it is
addressed at the close of business, local time of the recipient, on the third
day after the day it is so placed in the mail, the next business day
following delivery by facsimile, courier service or nationally recognized
overnight delivery service, or upon the intended recipient's refusal to
accept delivery. Any notices, demands, requests or other communications
required or permitted by this Agreement or by law shall refer to the specific
Section of this Agreement under which notice, demands, requests or other
communications is being given and describe with specificity the reason for
such notice, demand, request or other communication. Any party may change
its address for the purposes of this Agreement, by giving notice of the
change, in the manner required by this Agreement, to the other parties.
10.4 Dispute Resolution. In the event of any dispute arising out of or
relating to this Agreement, such dispute shall be resolved solely and
exclusively by confidential binding arbitration with the San Xxxxxxxxx xxxxxx
of JAMS ("JAMS") to be governed by JAMS' Streamlined Arbitration Rules and
Procedures applicable at the time of the commencement of the arbitration (the
"JAMS Rules") and heard before one arbitrator. The parties shall attempt to
mutually select the arbitrator. In the event they are unable to mutually
agree, the arbitrator shall be selected by the procedures prescribed by the
JAMS Rules. The prevailing party shall be entitled to an award of its
attorneys' fees, expert witness fees, and costs incurred in connection with
any arbitration.
10.5 Broker. Except as provided in Section 10.5 of the Seller and
Shareholder Disclosure Letter, each party hereto represents and warrants that
there are no brokers or finders known to such party involved with this
transaction and which may be owed compensation in connection with the
transactions contemplated hereby.
10.6 Binding on Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Seller and Shareholder may not assign
their respective rights and obligations hereunder without the prior written
consent of Purchaser, which consent may be given or withheld in Purchaser's
sole and absolute discretion.
10.7 Sole and Only Agreement. This Agreement (including all Exhibits
and Schedules attached hereto) constitutes the entire agreement among
Purchaser, Parent, Seller and Shareholder with respect to the subject matter
hereof and supersedes all prior communications, agreements and
understandings, whether oral or written, between them regarding the subject
matter hereof.
10.8 Expenses. Purchaser, Parent, Seller and Shareholder shall each
pay their own expenses, including, without limitation, counsel and accounting
fees and expenses, incident to the preparation and carrying out of this
Agreement and the consummation of the transactions contemplated hereby.
10.9 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future law, and if
the rights or obligations of any party under this Agreement will not be
materially and adversely affected thereby: (a) such provision will be fully
severable; (b) this Agreement will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part
hereof; (c) the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance herefrom; and (d) in lieu of such
illegal, invalid, or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible.
10.10 Governing Law. This Agreement shall be construed and governed by
the laws of the State of California, without regard to the laws as to choice
or conflict of laws. This Agreement and the rights and obligations of the
parties under this Agreement shall not be governed by the provisions of the
United Nations Convention on Contracts for the International Sale of Goods or
the United Nations Convention on the Limitation Period, as amended.
10.11 Captions; Exhibits and Schedules. The titles and captions
contained in this Agreement are inserted herein only as a matter of
convenience and for reference and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision hereof. Unless
otherwise specified to the contrary, all references to Sections are
references to Sections of this Agreement and all references to Exhibits and
Schedules are references to Exhibits and Schedules to this Agreement. All
Exhibits and Schedules attached hereto and the Seller and Shareholder
Disclosure Letter are hereby incorporated into this Agreement and are hereby
made a part hereof as if set out in full in this Agreement.
10.12 Confidentiality. Purchaser, Parent, Seller and Shareholder, as
the case may be, will consult with one another before issuing any press
release or otherwise making any public statements with respect to the
transactions contemplated hereby and shall not issue any such press release
or make any such public statement prior to such consultation. This Section
shall not apply where disclosure of information related to the transactions
contemplated hereby is required by any applicable federal, state, municipal,
administrative or other law, statute, rule, regulation, ordinance or other
applicable restriction promulgated by a governmental authority. Where a
party (or such party's representative) is required to so disclose, such party
shall, as soon as possible in the circumstances, notify the other party of
the requirement. Upon receiving such notification, the other party may take
any reasonable action to challenge the requirement, and the affected party
shall (or shall cause the applicable representative to), at the expense of
the other party, assist the other party in taking such reasonable action.
Notwithstanding the foregoing, the Purchaser hereby acknowledges and agrees
that the Shareholder will have to file this Agreement, together with the
exhibits and schedules thereto on the public record.
10.13 Knowledge. As used in this Agreement, "Knowledge" of Seller and
Shareholder shall mean the actual knowledge, obtained in the normal course of
the due performance of their respective duties and responsibilities, of the
following individuals: Xxxxxx X. Xxxxxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx. As
used in this Agreement, "Knowledge" of Purchaser or Parent shall mean the
actual knowledge, obtained in the normal course of the due performance of
their respective duties and responsibilities, of Xxxx Xxxxx and Xxxx
Xxxxxxxxxx.
10.14 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, and all of which
shall constitute a fully-executed Agreement. Transmittal and receipt of a
facsimile copy of this Agreement with the facsimile signature(s) shall be
binding on the parties hereto, with the original signature copy to be
subsequently delivered by regular mail. The failure to deliver the original
signature copy and the non-receipt of the original signature copy shall have
no effect upon the binding and enforceable nature of this Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have executed this Agreement as of the Closing Date.
AIRIQ U.S., INC.
Delaware corporation
By:/s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx, CEO
"Seller"
CALAMP DATACOM, INC.,
a Delaware corporation
By:/s/ Xxxxxxx Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx, Treasurer
"Purchaser"
CALAMP CORP.,
a Delaware corporation
By:/s/ Xxxxxxx Xxxxxxx
------------------------------
Xxxxxxx Xxxxxxx, CFO
"Parent"
AIRIQ INC.
a Canada corporation
By:/s/ Xxxx Xxxxxx
-----------------------------
Xxxx Xxxxxx, CFO
"Shareholder"
[SIGNATURE PAGE FOR ASSET PURCHASE AGREEMENT]
INDEX OF EXHIBITS AND SCHEDULES
Exhibits
Exhibit A Xxxx of Sale
Exhibit B Escrow Agreement
Exhibit C Intellectual Property Assignments
Exhibit D System Software License
Exhibit E Product Supply and Data Service Agreement
Exhibit F Technology and Client Service Support Agreement
Exhibit G Patent License
Exhibit H Fulfillment Support Agreement
