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ASSET PURCHASE AGREEMENT
by and between
FUJITSU TRANSACTION SOLUTIONS INC.
and
XXXXXX MARKETING, INC.
Dated August 27, 2004
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of August 27, 2004 (this "Agreement")
by and among Fujitsu Transaction Solutions Inc., a Delaware corporation (the
"Buyer"), and Xxxxxx Marketing, Inc., a Delaware corporation (the "Seller") (the
Buyer and the Seller each hereinafter individually referred to as a "Party" and
collectively as the "Parties").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, the Buyer desires to purchase from the Seller, and the Seller desires
to sell to the Buyer, certain assets and properties of the Seller, as more
particularly described herein; and
WHEREAS, the Buyer does not intend to assume any liabilities of the
Seller of any nature whatsoever, whether related to the Transferred Assets (as
hereafter defined) or otherwise; and
WHEREAS, the Parties entered into that certain Strategic Alliance and
Joint Development Agreement effective as of January 30, 2004 ("Existing
Agreement"); and
WHEREAS, the Parties wish to supersede and replace the Existing
Agreement with this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, and for other good and valuable consideration (the
receipt and adequacy of which is hereby acknowledged), and intending to be
legally bound hereby, the Parties agree as follows:
ARTICLE I.
PURCHASE AND SALE OF TRANSFERRED ASSETS
AND EXCLUSION OF LIABILITIES
Section 1.1. Purchase and Sale of Transferred Assets. Upon the terms and
subject to the conditions of this Agreement, at the Closing the Seller
shall sell, transfer, convey, assign and deliver free and clear of any
Encumbrance, to the Buyer, and the Buyer shall purchase, acquire and
accept from the Seller on the Closing Date, all of the Seller's right,
title and interest in and to:
(a) The following rights to Seller's Intellectual Property:
(i) all right, title, and interest in and to the software as described on
Schedule 1.1(a)(i) (the "Software") and all right, title, and interest
in and to all intellectual property embodied therein subject, however
to the reservation of the exclusive license and right to use and
sublicense the Software in the United States as provided for in Section
2.3, below;
(ii) all non-United States rights related directly or indirectly to the
patents of the Seller that are listed on Schedule 1.1(a)(ii), and all
non-United States rights related directly or indirectly to patents
and/or applications for patents that Seller owns or has a right to own,
together with all renewals, continuations, divisions, reissues,
reexaminations or extensions of any of the above, and to technical
disclosures and draft patent applications related to any of the above
(hereinafter " non-US Patent" or "non-US Patents"), and to all claims
against third parties for infringement of the non-US Patents, including
the right to xxx for and collect past damages (except for the immunity
of suit described in Section 2.5 below, neither "non-U.S. Patent" nor
"non-U.S. Patents" includes any rights with respect to United States
patents, patent applications or any renewals, continuations, divisions,
reissues, reexaminations or extensions thereof); and
(iii) the right to use, sublicense and practice all trade secret,
confidential information, and know-how related to the Software and the
patents of the Seller that are listed on Schedule 1.1(a)(ii), and all
rights related directly or indirectly to patents and/or applications
for patents that Seller owns or has a right to own, together with all
renewals, continuations, divisions, reissues, reexaminations or
extensions of any of the above, only to the extent necessary for Buyer
to fully enjoy and exploit the ownership interest granted in Section
1.1(a) (i) and (ii) above. Said right to use, sublicense and practice
shall be exclusive to Buyer outside of the United States and Seller
shall have no such right to use, sublicense or practice outside of the
United States.
(b) All royalties which would otherwise accrue to Seller on and after the
Closing Date deriving from the non-U.S. Patents. For the avoidance of
doubt, such royalties shall include those royalties which would accrue
as a result of use, practice and sales outside of the United States
under that certain License Agreement between Seller and Media Cart,
Inc. with an effective date of April 20, 2004 ("Media Cart License").
The assets set forth in this Section 1.1 shall be collectively referred
to herein as the "Transferred Assets", provided, however, that Seller
retains all United States rights, title and interest in and to the
United States patents of the Seller, including but not limited to those
that are listed on Schedule 1.1(a)(ii), to all United States
applications for patents, all renewals, continuations, divisions,
reissues, reexaminations or extensions thereof, all rights to draft
United States patent applications related to the above and/or the
non-U.S. Patents,, to all claims against third parties for infringement
of these patents, including the right to xxx for and collect past
damages, all of Seller's right to the use, sublicense, and practice in
the United States of Seller's trade secret, confidential information,
and know-how and the right to use and sublicense the Software in the
United States, as provided for below. Anything herein to the contrary
not withstanding, the Transferred Assets are subject to the rights
granted by Seller to Media Cart with respect to the "nose" of the
shopping cart as provided in the Media Cart License.
Section 1.2. Excluded Liabilities.
(a) It is expressly agreed and understood that the Buyer shall not
assume or be bound by any liabilities of the Seller or of its
business, of any kind or nature, known, unknown, accrued,
absolute, contingent, recorded or unrecorded or otherwise,
whether now existing or hereafter arising. This Agreement does
not enlarge any rights of third parties under any arrangements
or understandings with the Buyer or the Seller or any of their
respective affiliates or subsidiaries, as applicable.
Section 1.3. Purchase Price.
(a) Subject to the other provisions of this Agreement, the
purchase price for the Transferred Assets is $350,000.00 and
shall be payable by wire transfer in accordance with Seller's
instructions in U.S. Dollars as set forth below:
(i) $100,000.00 shall be paid to Seller upon the
execution of this Agreement;
(ii) $225,000.00 shall be paid to Seller on the Closing
Date;
(iii) $25,000.00 shall be paid to Seller upon Buyer's
receipt of written evidence reasonably satisfactory
to Buyer that all of the executed Assignments
described in Section 1.4(a) have been filed,
recorded, or otherwise given effect in the
appropriate patent office in the applicable
countries.
(b) Buyer shall pay to Seller a royalty in the amount of two
percent (2%) on all net revenue (i.e., exclusive of tariffs,
duties, and all Taxes other than income tax) directly related
to the sale of the iKart System hardware and/or software
licenses in those countries where a non-U.S. Patent (as
covered by this Agreement) is issued and in effect at the time
of the sale corresponding to the applicable revenue or could
have been issued and in effect if Buyer had timely, fully and
diligently prosecuted such non-U.S. Patent (it being expressly
acknowledged that the term "prosecuted" shall not mean
"submitted a new application for"). For purposes of this
Agreement, a "sale" shall be deemed to occur when Buyer
recognizes the revenue from a given sale, lease or license of
iKart System hardware and/or software license(s), in
accordance with Buyer's standard accounting practices and
policies. Said royalties shall be calculated on a quarterly
calendar basis (the "Royalty Period"), shall be payable no
later than fifteen (15) days after the termination of the
preceding Royalty Period, and shall be accompanied by a
royalty report showing relevant revenue by country. Buyer
shall each quarter report to Seller the calculation of the
royalty. Seller shall have a right to audit Buyer's books and
records, but only to extent required to verify the Buyer's
calculation of such royalty and shall have a right to have
Buyer pay for such audit if the audit result in the royalty
for any Royalty Period being incorrect by more than 5%,
provided, however, that Seller shall give Buyer reasonable
notice of its intent to perform any such audit, and any such
audit shall take place during normal business hours.
Section 1.4. Items to be Delivered at the Closing by the Seller. At the
closing of the purchase and sale provided for in this Agreement
(the "Closing"), the Seller shall deliver or cause to be delivered
to the Buyer:
(a) An executed Assignment for each of the non-U.S. Patents
and patent applications listed in Schedule 1.1(a). The
Seller shall be responsible for ensuring that each such
Assignment conforms to the requirements of each applicable
country and for the recording of the executed assignment
in each applicable country;
(b) All copies of the source code, including current and
previous versions, and all documentation for the Software;
(c) All documentation describing any and all trade secrets,
confidential information, and know-how related to the
Software and non-U.S. Patents;
(d) An Assignment of the right to receive royalties under the
non U.S. Patents and any associated right to audit under
each license or other written agreement providing for
same, including, but not limited to, Sections 4 and 5 of
that certain License Agreement between Seller and Media
Cart, Inc. with an effective date of April 20, 2004 (and
for the avoidance of doubt, any such Assignment shall not
include a delegation of any of Seller's duties or
obligations);
(e) A signed letter from Seller to Media Cart, Inc., notifying
Media Cart, Inc. of the Assignment described in Section
1.4(d) and directing Media Cart, Inc. to pay to Buyer any
and all royalties arising out of the Media Cart License on
and after the Closing Date deriving from the non-U.S.
Patents.
(f) Written documentation from any and all third parties who
have or may have a security interest in some or all of the
Transferred Assets, that evidences to Buyer's reasonable
satisfaction that said third parties have released any
such security interest in the Transferred Assets effective
as of or before the Closing Date.
Section 1.5. Items to be Delivered at the Closing by the Buyer. At the Closing,
the Buyer shall deliver:
(a) $225,000.00 in good and immediately available funds to be paid
to Seller.
Section 1.6. Closing and Closing Date. The parties shall make every reasonable
effort to complete the transactions herein contemplated (the "Closing")
on or before September 30 (the "Closing Date").
ARTICLE II.
OTHER TERMS AND CONDITIONS
Section 2.1. Joint Development Project.
(a) The Parties acknowledge that, under the Existing
Agreement, they have commenced development of a new
version of Seller's Xxxxxx Kart in-store marketing system,
comprising Buyer's hardware platform (formerly, "Smart
Cart Hardware", now known as "iKart Hardware") and the
Software, ported to a Windows environment, all as more
particularly described in Schedule 2.1(a) hereto (said
Smart Cart Hardware and Software formerly being
collectively known as, "Smart Cart", hereinafter referred
to as the "iKart System"). The Parties' respective
development responsibilities under the Existing Agreement
were as indicated in Schedule 2.1(a).
Section 2.2. Software Development.
(a) The Parties acknowledge that Seller has performed some
Software development activities under the Existing
Agreement, but that the Software development effort (i.e.,
the porting of the Software to a Windows environment) has
not been completed as contemplated by the Existing
Agreement. As of the Closing Date, Buyer shall undertake
the completion of porting the Software to a Windows
environment as contemplated by the Existing Agreement,
specifically, Items 1, 2, and 3 of "Seller's
Responsibility" as described in Schedule 2.1(a). Any
further modifications, enhancements, upgrades, or
development of the Software shall be at Buyer's sole
discretion.
(b) In support of such undertaking, Buyer shall make a
reasonable offer of employment to Seller's Senior Vice
President of Technology, Xxxx Xxxxxx, and Seller shall
cooperate to facilitate the transition of his employment
from Seller to Buyer, which the parties intend shall take
effect on or promptly after the Closing Date. In addition,
Seller shall provide reasonable assistance and cooperation
as reasonably requested by Buyer to facilitate the
transition of development activities from Seller to Buyer,
including, but not limited to, the cooperation related to
the engagement by Buyer of any independent contractors who
were assigned by Seller to the Software development
project.
(c) As of the Closing Date, Seller shall be released from any
further obligation to perform the development,
procurement, and integration tasks listed under "Seller
Responsibility" on Schedule 2.1(a).
Section 2.3. License Grant.
(a) Effective as of the Closing Date, Buyer hereby grants to
Seller an exclusive, royalty free, license within the United
States to use, sublicense and distribute in executable form to
customers, the Software as completed by Buyer as contemplated
in this Agreement, but only in conjunction with the sale of
Buyer's hardware platform. Said license shall be
non-transferable, except that, with Buyer's prior written
consent, which consent may be withheld in Buyer's sole
discretion, Seller may transfer or assign said license in
conjunction with Seller's sale of the totality of its business
or sale of substantially all the assets of its business. In
light of Seller's involvement in the development of the
Software, said license is without warranty of any kind, and
does not include any obligation on Buyer's part to indemnify
Seller against third party claims of infringement regarding
the Software. Maintenance and support of such Software is not
included under this Agreement, but the Parties agree to use
their best efforts to negotiate and execute in good faith a
separate written maintenance and support agreement whereby
Buyer would perform such services.
(b) Within thirty (30) days after the completion of development of
the Software as described in Section 2.2(a) or Buyer
determines not to complete the Software, Buyer shall deliver
to Seller a copy of the source code for such Software. Subject
to the confidentiality obligations set forth in Section 6.2,
and subject to Buyer's review and approval, which shall not be
unreasonably withheld, Seller shall have the right to fix,
debug, modify, update, enhance and create derivative works of
the source code of the Software to the extent required to
enable Seller to perform its responsibilities in connection
with store level advertising and promotion programs for the
iKart System. The source code shall be without warranty of any
kind and should Seller make any changes or modifications to
the source code, Buyer shall be under no obligation to provide
support for the Software. Buyer shall be entitled to a copy of
and own any derivative works of the Software created by
Seller, but said derivative works shall be subject to the
exclusive license granted to Seller herein. The parties intend
for this Section 2.3(b) to be an interim arrangement and that,
once executed, the maintenance and support agreement described
in Section 2.3(a) above shall supersede and replace this
Section 2.3(b). Buyer shall also deliver to Seller a copy of
the source code for such Software, as it is then completed, in
the event Buyer determines not to complete the Software, but
such delivery of the source code to Seller shall be in full
and final settlement of any claim that Seller may have against
Buyer arising out of Buyer's determination not to complete the
Software. Seller will then have the right to complete the
Software for use in the iKart System. In such case, Buyer
shall have no rights to or in any of the code that is written
by Seller to complete the Software.
Section 2.4. Marketing and Sales.
(a) In the United States, the Parties agree to participate in
joint marketing and sales efforts of the iKart Hardware and
Software with respect to mutually agreed initiatives
including, but not limited to, attendance at and support of
trade shows, industry seminars, development of brochures and
literature, proposal development, and presentations to
prospects. Each Party agrees to make no changes to the other
Party's existing marketing insignia such as company logo style
or color. In particular:
(i) The Parties agree to jointly develop a marketing and launch
strategy; market the iKart System to large tier retailers and
grocery chains; and provide public briefing forums. (ii) Buyer
shall have the sole and exclusive right and responsibility of
marketing and selling the iKart Hardware to customers, with
the assistance of Seller as necessary. Proceeds from such
sales will belong exclusively to Buyer.
(iii) Seller shall have the sole and exclusive right and
responsibility of marketing and licensing the iKart Software
portion of the iKart System, as well as the store level
advertising and promotion programs for the iKart System to
customers, with the assistance of Buyer as necessary. Proceeds
from such sales will belong exclusively to Seller.
(b) Publicity and Press Releases in the U.S.: The Parties may by
mutual consent agree to issue a joint press release describing
the collaboration of the Parties. In addition, each of Seller
and Buyer may, with the prior written approval of the other
party, which approval shall not be unreasonably withheld or
delayed: (1) identify the other as a strategic partner; (2)
hyperlink from an appropriate area within its web site to the
other's home page; (3) display the other Party's logo on the
its web site (in accordance with such Party's guidelines for
the use of such xxxx); (4)use the other Party's name (but not
commit for the other Party) in connection with proposals to
prospective customers; and (5) to refer to the other Party in
print or electronic form for marketing or reference purposes.
The Parties shall also consult regularly during the term of
the Agreement and issue, as and when appropriate, such further
press releases and/or other publicity materials as may be
appropriate. The contents of the any press releases issued by
the Parties shall be subject to the prior written approval of
each Party, which approval shall not be unreasonably withheld
or delayed.
(c) Outside the U.S.: The Parties agree that the scope and extent
of marketing and sales activities outside of the U.S. will be
dependent on the commercial viability of the iKart System in
non-U.S. markets, taking into account general market
conditions, product support availability, as well as the
feasibility of modifications and developments that may be
necessitated by customer and foreign requirements. The scope
and extent of marketing and sales activities outside of the
U.S. shall therefore be at Buyer's sole discretion.
Section 2.5. Immunity from Suit.
(a) As of the Closing Date, Seller hereby grants Buyer a
worldwide, present, perpetual and fully prepaid immunity
from suit for infringement of Seller's Intellectual
Property provided such claim of infringement relates to
Buyer's exercise of its rights and interests as herein
described.
Section 2.6. Right of First Refusal.
(a) Seller agrees that it will not sell or otherwise transfer
its rights in Seller's U.S. Patents to a third party
without first offering to sell or transfer such rights to
Buyer in accordance with the following provisions:
(i) Seller shall deliver a written notice to Buyer stating the
name and address of the proposed bona-fide transferee, a
description of the U.S. Patents proposed to be
transferred, and the price and terms of payment.
(ii) Within sixty (60) days after receipt of the written
notice, Buyer shall have the first right to purchase the
applicable rights in the applicable U.S. Patents upon the
same price and terms of payment designated in said written
notice.
(iii) If Buyer elects not to purchase said rights in the U.S.
Patents designated in the written notice, then Seller may
transfer the rights in said U.S. Patents to the proposed
transferee, provided the transfer is completed within
ninety (90) days after the expiration of Buyer's right to
purchase, and further provided the transfer is made at a
price and terms no less favorable to the buyer than those
designated in the written notice.
(b) Any sale or transfer of rights in Seller's U.S. Patents to
a third party shall be subject to, and have no affect on,
Buyer's ownership interest in the Software, and to the
immunity from suit, granted to Buyer in this Agreement.
Section 2.7. Non-Competition.
(a) For a period of time commencing on the Closing Date and
ending two (2) years after the last date that royalties
(as described in Section 1.3(a) above) may be payable by
Buyer to Seller under this Agreement, Seller agrees that
it shall not itself, nor assist any third party to, offer,
promote, market, develop, supply, sell, or re-sell any
product that is competitive with the iKart System unless
Buyer has elected not to pursue sales or further
development of the iKart System.
(b) Buyer agrees that, for as long as Seller remains a viable
business, Buyer will not promote any company other than
Seller that provides store level advertising and promotion
programs for the iKart System to customers.
Section 2.8. Superseding Agreement
(a) Effective as of the Closing Date, this Agreement shall supersede and replace
the Existing Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to and for the benefit of the
Buyer:
Section 3.1. Authority; Binding Obligation.
(a) The Seller has the requisite authority and power to enter
into, execute and deliver this Agreement and each agreement,
certificate document and instrument to be executed and
delivered by the Seller pursuant to this Agreement (the
"Seller Documents") and to perform its obligations hereunder
and thereunder. The execution, delivery and performance by the
Seller of this Agreement and each Seller Document have been
duly authorized by all necessary corporate or other action of
the Seller. This Agreement and each Seller Document has been,
or will be, as applicable, duly executed and delivered by the
Seller and constitutes, or will constitute upon delivery and
execution, as applicable, a valid and binding obligation of
the Seller enforceable against it in accordance with its
terms.
Section 3.2. No Conflict; Required Consents.
(a) Except as set forth in Schedule 3.2, neither the execution,
delivery or performance of this Agreement or the Seller
Documents nor the consummation by the Seller of the
transactions contemplated hereby or thereby will (a) conflict
with or result in any breach of any provision of the
Certificate of Incorporation or Bylaws of the Seller, (b)
result in or require the creation or imposition of, or result
in the acceleration of, any indebtedness or Encumbrance of any
nature upon, or with respect to, the Seller or any of the
Transferred Assets, or (c) conflict with or result in any
breach of any provision of any other agreement to which Seller
is a party
Section 3.3. No Subsidiaries. The Seller does not own, of record or
beneficially, or controls, directly or indirectly, any capital
stock, securities convertible into capital stock or any other
equity interest in any corporation, association or business entity
that owns any of the Transferred Assets or any interest therein,
nor is the Seller, directly or indirectly, a participant in any
joint venture, partnership or other non-corporate entity that owns
any of the Transferred Assets or any interest therein.
Section 3.4. Title to Transferred Assets. The Seller has good, valid and
marketable title to all of the Transferred Assets, free and clear
of Encumbrance.
Section 3.5. Absence of Undisclosed Liability. To the best of Seller's
knowledge after due inquiry, there are no liabilities or
obligations of any nature (absolute, accrued, contingent or
otherwise) relating to the Seller, or any subsidiary or affiliate
of the Seller which could reasonably be expected to have a material
adverse effect on the performance and fulfillment of this
Agreement.
Section 3.6. Litigation. To the best of Seller knowledge after due inquiry,
there is no claim, counterclaim, action, suit, order, proceeding or
investigation pending or, to Seller's knowledge after due inquiry,
threatened against, probable of assertion against or affecting the
Seller with respect to the Transferred Assets or relating to the
transactions contemplated hereby or by the Seller Documents, to the
best of Seller's knowledge after due inquiry, is there any
reasonable basis for any such claim, action, suit, proceeding or
governmental, administrative or regulatory investigation. The
Seller is not directly subject to or materially affected by any
order, judgment, decree or ruling of any Governmental Entity with
respect to the Transferred Assets. The Seller (or any subsidiary or
affiliate of the Seller) has not received any written opinion or
memorandum of legal advice from legal counsel to the effect that it
is exposed to any liability which may be materially adverse to the
Transferred Assets. The Seller (or any subsidiary or affiliate of
the Seller) is not engaged in any legal action to recover monies
due it or for damages sustained by it with respect to the
Transferred Assets. Any claim, counterclaim, action, suit, order,
proceeding or, to the Seller's knowledge after due inquiry,
investigation against the Seller (or any subsidiary or affiliate of
the Seller) with respect to the Transferred Assets that is pending
or was commenced within the past two (2) years has been disclosed
in writing to Buyer.
Section 3.7. Patents.
(a) The Seller has not received any written notice that any of the
rights of the Seller in the non-U.S. Patents have been
declared unenforceable or otherwise invalid by any
Governmental Entity except as provided on Schedule 3.7. The
Seller has taken all action reasonably necessary to maintain
and protect its rights in and to each non-U.S. Patent.
(b) No non-U.S. Patent is subject to any outstanding injunction,
judgment, order, decree, ruling or charge. No action, suit,
proceeding, hearing, investigation, charge, complaint, claim
or demand is pending or, to the Seller's knowledge after due
inquiry, threatened which challenges the legality, validity,
enforceability or ownership of, or any of the Seller's right
to use, any of the non-U.S. Patents.
Section 3.8. Copies of Documents. The Seller has made available for
inspection and copying by the Buyer and its counsel complete and
correct copies of all documents referred to in the Schedules to
this Article III.
Section 3.9. Disclosure. None of the representations or warranties of the
Seller contained in this Agreement, the Seller Documents, or in any
other certificate, exhibit or schedule delivered by the Seller
pursuant to this Agreement contain any untrue statement of a
material fact, or omit to state a material fact necessary in order
to prevent such representations and warranties from being
misleading in light of the circumstances under which they were
made.
Section 3.10 Broker Fees. No broker or finder is entitled
to any brokerage fees, commission or finders' fee in connection
with the consummation by the Seller of the transactions
contemplated by this Agreement or any Seller Document.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby makes the following representations and warranties to
and for the benefit of the Seller:
Section 4.1. Authority; Binding Obligation. The Buyer has the requisite
authority and power to enter into, execute and deliver this
Agreement and each agreement, document and instrument to be
executed and delivered by the Buyer pursuant to this Agreement (the
"Buyer Documents") and to perform its obligations hereunder and
thereunder. The execution, delivery and performance by the Buyer of
this Agreement and the Buyer Documents have been duly authorized by
all necessary corporate or other action of the Buyer. This
Agreement and the Buyer Documents have been, or will be, as
applicable, duly executed and delivered by the Buyer and
constitutes, or will constitute upon execution, as applicable,
valid and binding obligations of the Buyer, enforceable against it
in accordance with their terms.
Section 4.2. No Conflict; Required Consents. Except as set forth in
Schedule 4.2, neither the execution, delivery or performance of
this Agreement or the Buyer Documents nor the consummation by the
Buyer of the transactions contemplated hereby or thereby will
conflict with or result in any breach of any provision of the
Charter or Bylaws of the Buyer.
Section 4.3. Broker Fees. No broker or finder is entitled to any brokerage
fees, commission or finders' fee in connection with the
consummation by the Buyer of the transactions contemplated by this
Agreement or any other agreement contemplated hereby.
ARTICLE V.
COVENANTS
Section 5.1. Consummation of Agreement. Each Party shall use its best
efforts to perform and fulfill all conditions and obligations on
its part to be performed and fulfilled under this Agreement, to the
end that the transactions contemplated by this Agreement shall be
fully carried out. Until the Closing or the termination of this
Agreement, except as mutually agreed in writing by the Parties, the
Seller or any of its respective subsidiaries or affiliates or any
of its officers, directors, employees, agents or representatives
shall, directly or indirectly, solicit, encourage, initiate or
induce the making of any inquiries or proposals for the acquisition
of any of the Transferred Assets, or furnish information to, or
engage in negotiations relating to the foregoing or otherwise
cooperate in any way with, or accept any proposal relating to the
foregoing from, any Person or group other than the Buyer, and the
Seller shall restrict any such subsidiary, affiliate, officer,
director, agent and representative from doing any of the foregoing.
Section 5.2. Ordinary Course of Business. Until the Closing or, if sooner,
the termination of this Agreement, the Seller shall conduct its
business in the usual, regular and ordinary course in substantially
the same manner as heretofore conducted.
Section 5.3. Supplements to Schedules. Prior to the Closing, the Parties
will supplement or amend the Schedules hereto with respect to any
matter hereafter arising which, if existing or occurring at the
date of this Agreement, would have been required to be set forth or
described in such Schedules. No supplement or amendment of the
Schedules made pursuant to this Section 5.3 shall be deemed to cure
any breach of any representation or warranty made in this Agreement
unless the other Party specifically agrees thereto in writing.
ARTICLE VI.
RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
Section 6.1. Survival of Representations and Warranties. Each
representation and warranty contained herein or in any Seller
Document or Buyer Document shall survive the execution and delivery
of this Agreement. If written notice of a claim has been given
prior to the expiration of the applicable representation or
warranty, then such claim shall survive the expiration of the
relevant representation or warranty until the final resolution of
such claim.
Section 6.2. Confidentiality Obligations. The Parties agree that, after the
Closing has been consummated, the Parties and its subsidiaries and
affiliates, and its officers, directors, employees, agents and
representatives (collectively, the "Representatives") will hold in
strict confidence, and will not distribute or make available, any
confidential or proprietary data or information that is used in
connection with or related to the Transferred Assets or any
confidential or proprietary data or information provided by or
otherwise obtained from the other Party concerning the business
and/or operations of the other Party , except:
(a) information which, as of the date hereof, is published or
otherwise generally available to the public;
(b) information which after the date hereof becomes available
to the public other than through an act or omission of the
receiving Party, the Parent or any Seller Representative
which is in violation of the provisions hereof;
(c) information rightfully acquired from a third party which
did not obtain such information under a pledge of
confidentiality;
(d) information which is developed by the receiving Party
independently of the relationship established by this
Agreement; or
(e) information which is compelled to be disclosed by legal
process, in which case the receiving Party shall notify
the disclosing Party as soon as practicable after it
becomes aware of such requirement, and shall cooperate
with the disclosing Party in obtaining a protective order.
Section 6.3. Compliance. Each Party shall use its best efforts to take or
cause to be taken, all action and do or cause to be done all things
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, the Seller Documents and the Buyer
Documents, including, without limitation, to obtain all consents,
approvals and authorization of third parties, and to make all
filings with and give all notices to third parties which may be
necessary or required to be obtained by it in order to effectuate
the transactions contemplated hereby and thereby and to otherwise
comply and fulfill such Party's obligations hereunder and
thereunder.
Section 6.4. Further Assurances.
(a) Each Party shall, from time to time on being reasonably
required to do so by the other Party, now or at any time
in the future, do or procure the doing of all such acts
and/or execute or procure the execution of all such
documents in a form reasonably satisfactory to the other
Party as the other Party may reasonably consider necessary
for giving full effect to this Agreement, the Seller
Documents and the Buyer Documents and securing to the
other Party the full benefit of the rights, powers and
remedies conferred upon the other Party hereunder and
thereunder.
(b) The Seller shall promptly transfer or deliver to the Buyer
any of the Transferred Assets or proceeds thereof
delivered to, or retained or received by, the Seller after
the Closing Date.
ARTICLE VII.
TERMINATION
Section 7.1. Right to Terminate. This Agreement may be terminated:
(a) by either Party upon sixty (60) days written notice to the
other party in the event of a breach of any material
provision hereof by the other Party, but only if the
breaching party fails to cure such breach of any material
provision hereof within the sixty (60) notice period;
the non-breaching Party retains and may assert against the breaching Party all
legal and equitable rights and remedies that it may have with respect to a
breach or default by the breaching Party;
(b) by either the Buyer or the Seller if the Closing shall not
have occurred by September 30, 2004; provided, however,
that the right to terminate this Agreement under this
Section 7.1(b) shall not be available to any Party whose
failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the
Closing Date to occur on or before such date;
(c) by the Seller if the Buyer (i) breaches its material
representations and warranties, (ii) fails to comply with
any of its covenants or agreements contained herein; or
(d) by the Buyer if the Seller (i) breaches its material
representations and warranties, (ii) fails to comply with
any of its covenants or agreements contained herein.
Any such termination after the Closing, shall not affect
any rights that have already accrued, or affect or
eliminate Buyer's obligation to pay the royalty provided
for in Section 1.3(b) or Seller's license to continue to
use the Software provided for Section 2.3(a).
Section 7.2. In the event of termination by Buyer prior to the Closing, the
$100,000.00 payment described in Section 1.3(a)(i) shall be
promptly refunded by Seller. In the event of termination by Seller,
$50,000.00 of the $100,000.00 payment shall be retained by Seller
as liquidated damages, which are hereby deemed reasonable and final
settlement of any claim for monetary damages by Seller arising out
of this Agreement, and the remaining $50,000.00 shall be promptly
refunded by Seller.
ARTICLE VIII.
INDEMNIFICATION
Section 8.1. Indemnification of the Seller. The Buyer shall, from and after
the Closing, defend and promptly indemnify and hold harmless the
Seller, and their respective subsidiaries and affiliates, and their
respective officers, directors, employees, agents and
representatives (collectively, the "Seller Indemnified Parties")
from, against, for, and in respect of and pay any and all Losses,
suffered or incurred by any such party by reason of (a) any breach
of any representation, warranty, covenant or agreement of the Buyer
contained in this Agreement or any Buyer Documents.
Section 8.2. Indemnification of the Buyer. The Seller shall, from and after
the Closing, defend, indemnify, and hold harmless the Buyer and its
subsidiaries and affiliates and their respective officers,
directors, employees, agents and representatives (collectively, the
"Buyer Indemnified Parties") from, against, for and in respect of
and pay any and all Losses suffered, sustained, incurred or
required to be paid by any such party by reason of (a) any breach
of any representation, warranty, covenant or agreement of the
Seller contained in this Agreement or in any Seller Document or
Parent Document, and (b) (b) any and all obligations and
liabilities of the Seller, except as expressly assumed by the Buyer
under this Agreement.
Section 8.3. Indemnification Procedure.
(a) An indemnified party shall provide written notice to each
indemnifying party of any claim of such indemnified party for
indemnification under this Agreement promptly and within
thirty (30) days after the date on which such indemnified
party has actual knowledge of the existence of such claim.
Such notice shall specify the nature of such claim in
reasonable detail and the indemnifying parties shall be given
reasonable access to any documents or properties within the
control of the indemnified party as may be useful in the
investigation of the basis for such claim. The failure to so
promptly notify the indemnifying parties shall constitute a
waiver of such claim.
(b) In the event any indemnified party seeks indemnification
hereunder based upon a claim asserted by a third party (a
"Third Party Claim"), the indemnifying parties shall have the
right (without prejudice to the right of any indemnified party
to participate at its expense through counsel of its own
choosing) to defend or prosecute the Third Party Claim at its
expense and through counsel of its own choosing if it gives
written notice of its intention to do so and acknowledges its
liability pursuant to the indemnity obligations stated herein
no later than thirty (30) days following notice thereof by an
indemnified party; provided, however, that, if the indemnified
party shall have reasonably concluded that separate counsel is
required because, upon the advice of counsel to the
indemnified party, a conflict of interest would exist under
applicable federal, state, or local ethical laws governing the
conduct of attorneys (other than solely by reason of the fact
that the indemnified party is a party seeking indemnification
pursuant to this Agreement), the indemnified party shall have
the right to select separate counsel (but not more than one
law firm together with local counsel, if necessary) to
participate in the defense of such action on its behalf, at
the sole expense of the indemnifying party. If the
indemnifying party does not so choose to defend or prosecute
any Third Party Claim for which any indemnified party would be
entitled to indemnification hereunder, then the indemnified
party shall be entitled to recover from the indemnifying party
all of the reasonable attorney's fees and other costs and
expenses of litigation of any nature whatsoever incurred in
the defense of such claim
(c) The indemnifying party and the indemnified party shall fully
cooperate in furnishing all evidence and testimony and in any
other manner, which the other may reasonably request, and
shall in all other respects have an obligation of good faith
dealing, one to the other, so as not to unreasonably expose
the other to undue risk of loss.
ARTICLE IX.
MISCELLANEOUS
Section 9.1. Fees and Expenses. Except as otherwise provided in this
Agreement, each Party will bear its own direct expenses incurred in
connection with the negotiation and preparation of this Agreement
and the Seller Documents and Buyer Documents, as the case may be,
and the consummation and performance of the transactions
contemplated hereunder and thereunder. Except as otherwise provided
in this Agreement, in the event that a dispute should arise between
the parties to this Agreement, the prevailing party shall be
entitled to reimbursement of its reasonable attorneys' fees and
expenses (including court costs).
Section 9.2. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given if delivered
personally or sent by facsimile transmission, overnight courier, or
certified, registered or express mail, postage prepaid. Any such
notice shall be deemed given when so delivered personally or sent
by facsimile transmission (provided that a confirmation copy is
sent by overnight courier), one (1) day after deposit with an
overnight courier, or if mailed, five (5) days after the date of
deposit in the United States mails, as follows:
To the Buyer: Fujitsu Transaction Solutions Inc.
0000 Xxxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
Attn: Legal Department
FAX: 000-000-0000
With a copy to: Fujitsu Transaction Solutions Inc.
000 Xxxxxxxxxx Xxx.
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
FAX: 000-000-0000
To the Seller: Xxxxxx Marketing, Inc
X.X. Xxx 0000
Xxxx Xxxx Xxxx, XX 00000
Attn: Legal Department
Fax: 000.000.0000
With a copy to: Fabian & Xxxxxxxxx
000 Xxxxx Xxxxx Xxxxx, 00xx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Attn: Xxx Xxxx
Fax: 000.000.0000
Any notice given hereunder may be given on behalf of any Party by its
counsel or other authorized representatives. The address of any Party may be
changed on notice to the other Party duly served in accordance with the
foregoing provisions.
Section 9.3. Governing Law; Forum; Process. This Agreement shall be
construed in accordance with, and governed by, the laws of the
State of New York as applied to contracts made and to be performed
entirely in the State of New York without regard to principles of
conflicts of law.
Section 9.4. Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto and the Seller Documents and Buyer Documents
herewith, are intended to embody the complete, final and exclusive
agreement among the Parties with respect to the purchase of the
Transferred Assets and the related transactions and are intended to
supersede all previous negotiations, commitments and writings
agreements and representations, written or oral, with respect
thereto and may not be contracted by evidence of any such prior or
contemporaneous agreement, understanding or representations,
whether written of oral.
Section 9.5. Assignability; Binding Effect. This Agreement may not be
assigned by the Seller. The Buyer may, in its discretion, transfer
and assign this Agreement to a parent, subsidiary, joint venture,
affiliate, or other related entity or to a successor of the Buyer
by merger or sale of assets. This Agreement and the rights,
covenants, conditions and obligations of the respective parties
hereto and any instrument or agreement executed pursuant hereto
shall be binding upon and enforceable by, and shall inure to the
benefit of, the Parties and their respective successors and
permitted assigns.
Section 9.6. Execution in Counterparts. For the convenience of the Parties
and to facilitate execution, this Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one (1) and the same
document. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one (1) counterpart
evidencing execution by each Party. Delivery of a facsimile version
of one (1) or more signatures to this Agreement shall be deemed
adequate delivery for purposes of this Agreement.
Section 9.7. Amendments. This Agreement may not be amended or modified, nor
may compliance with any condition or covenant set forth herein be
waived, except by a writing duly and validly executed by each
Party, or in the case of a waiver, the Party waiving compliance;
provided, however, that no such waiver shall operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
Whenever this Agreement requires or permits a waiver or consent by
or on behalf of any Party, such waiver or consent shall be given in
writing.
Section 9.8. Severability. In the event that any one or more of the
provisions contained in this Agreement, or the application thereof
in any circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of
the remaining provisions contained in this Agreement shall not be
in any way impaired thereby, it being intended that all of the
rights and privileges of the Parties shall be enforceable to the
fullest extent permitted by law.
Section 9.9. Section Headings. The Section headings of this Agreement are
for convenience of reference only and shall not be deemed to alter
or affect any provision hereof.
Section 9.10. Gender and Tenure. Where the context or construction
requires, all words applied in the plural shall be deemed to have
been used in the singular, and vice versa; the masculine shall
include the feminine and neuter, and vice versa; and the present
tense shall include the past and future tense and vice versa.
Section 9.11. Third-Party Rights. Nothing in this Agreement, whether
express or implied, is intended to confer rights or remedies under
or by reason of this Agreement on any Persons other than the
Parties, each Seller Indemnified Party and each Buyer Indemnified
Party and their respective successors and permitted assigns, nor is
anything in this Agreement intended to relieve or discharge the
obligation or liability of any third Persons to any party to this
Agreement, nor shall any provisions give any third Persons any
right of subrogations over or action against any Party.
Section 9.12. Construction. The language in all parts of this Agreement
shall in all cases be construed simply, accurately to its fair
meaning, and not strictly for our against any of the Parties,
without limitation, there shall be no presumption against any Party
on the ground that such Party was responsible for drafting this
Agreement or any part thereof, and any rule of law, or any legal
decision that would require interpretation of any claimed
ambiguities in this Agreement against the Party that drafted it has
no application and is expressly waived.
Section 9.13. Disclosure.
(a) The Parties agree not to issue any announcement, press
release, public statement or other information (either written
or oral) to the press or any third Person with respect to this
Agreement, the Seller Documents or the Buyer Documents, or the
transactions contemplated hereby or thereby, without obtaining
the prior written approval of the other Parties (which
approval shall not be unreasonably withheld); provided,
however, that nothing contained herein shall prevent any
Party, at any time, from furnishing any required information
to any Governmental Entity or from issuing any announcement,
press release, public statement or other information to the
press or any third Person with respect to this Agreement, the
Seller Documents or the Buyer Documents, or the transactions
contemplated hereby or thereby, if required by law, rule or
regulation, including applicable stock exchange regulation
(provided that the other Parties shall be furnished with an
advance copy of any such announcement, press release, public
statement or other information).
(b) The Seller, the Parent and the Buyer each undertake to provide
all such information known to it or which on reasonable
inquiry ought to be known to it as may reasonably be required
by the Buyer, the Parent or the Seller for the purpose of
complying with the requirements of law, rule or regulation.
Section 9.14. Definitions.
(a) As used herein, the "Closing" shall have the meaning set
forth in Section 1.6.
(b) As used herein, the "Closing Date" shall have the meaning
set forth in Section 1.6.
(c) As used herein, "Encumbrance" shall mean any lien,
encumbrance, option, pledge, security interest, charge,
restriction or other adverse claim or right whatsoever.
(d) As used herein, "Governmental Entity" shall mean the
government of the United States of America, any other
nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or
pertaining to government.
(e) As used herein, "Intellectual Property" shall mean all works
protectable by copyright, trademark, patent and trade secret
laws or by any other statutory protection obtained or
obtainable, and any confidential information (as defined in
Section 6.2) of a party that meets the foregoing criteria,
including without limitation, any literary works, pictorial,
graphic and sculptural works, architectural works, works of
visual art, and any other work that may be the subject matter
of copyright protection; advertising and marketing concepts;
information; data; formulae; designs; models; drawings;
computer programs, including all documentation, related
listings, design specifications, and flowcharts, trade
secrets, and any inventions including all methods, processes,
business or otherwise; machines, manufactures and compositions
of matter and any other invention that may be the subject
matter of patent protection; and all statutory protection
obtained or obtainable thereon.
(f) As used herein, "Person" shall mean any natural person, sole
proprietorship, entity, corporation, company, association
joint venture, joint stock company, partnership, trust,
organization, individual (including personal representatives,
executors and heirs of a deceased individual), nation, state
government (including agencies, branches, departments,
bureaus, boards, divisions and instrumentalities thereof),
trustee, receiver or liquidator.
(g) As used herein, "Tax" and "Taxes" shall mean any and all
taxes, charges, fees, levies or other assessments, including,
without limitation, all net income, gross income, gross
receipts, premium, sales, use, ad Valero, transfer, franchise,
profits, license, withholding, payroll, employment, excise,
estimated, severance, stamp, occupation, property or other
taxes, fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties (including
penalties for failure to file in accordance with applicable
information reporting requirements), and additions to tax by
any authority, whether federal, state, or local or domestic or
foreign.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their respective names by their respective officers duly authorized,
as of the date first written above.
XXXXXX MARKETING, INC.
By:_______________________________
Name:
Title:
FUJITSU TRANSACTION SOLUTIONS INC.
By:_______________________________
Name:
Title:
SCHEDULE 1.1(a)(i)
SOFTWARE
SOFTWARE MODULES:
1. STORE MANAGEMENT INTEGRATION PROGRAM
Store Management--Centralize all data respective to a store Ad Manager
-- Distributes advertisements Store Content Controller--View store
content and configurations Reports--Reporting tool to generate store
status reports
Accounting--Track CPG marketing activity and generate billing
information based on store reports Electronic Coupons--Support
electronic coupon distribution Cart Tracking--Track carts in the store
by the unique identification code on each trigger and each display unit
2. STORE CONTROLLER INTERFACE PROGRAM (SCIP)
Connect to Internet--Manage In Store Processor information required to
connect to Internet Receive Updates--Connects to the HQ Server and
compares internal file versions to HQ file versions and creates update
list Apply Updates--Schedules file updates on smart displays via
wireless access Store Directory Changes--Allows store associates to
change directory information in the event of errors
3. HEADQUARTERS SERVER (KSERV)
Interfaceapplication between the Store Controller I/F Program and the
Marketing Database. Handles requests from SCIP for data.
Internet Socket Server--Handles requests from SCIP for information from
HQ server Generate Database Queries--Queries HQ Server for answers to
SCIP requests FTP--File Transfer Server for SCIP
4. IKART CART COMMUNICATIONS (KARTKOM)
Interface Program between SCIP and Smart Displays Reads files versions
on Smart Display and updates as necessary Updates and Processes
requests from Smart Displays
Transmits RF header "Heart Beat" so that displays that just become
active can receive latest updates from controller Collects system
status from iKart (Battery Status, Inactive Status, Last Operational
Status)
5. CART APPLICATION PROGRAM
Controls all user interface functions (button presses) Controls
advertisement display (animation and sounds) Monitors motion and resets
the awake timer Captures trigger and system data for SCIP
6. PERSONAL SHOPPER MODULE SOFTWARE INTERFACE TO CART APPLICATION PROGRAM
SCHEDULE 1.1(a)(ii)
PATENTS
XXXXXX MARKETING, INC.
Patent Report by Invention Printed: 8/20/2004 Page 1
COUNTRY REFERENCE# FILED SERIAL# ISSUED PATENT# STATUS ACCEPTABLE
ASSIGNMENT
AUTOMATED SHOPPING CART HANDLE
UNITED STATES 12257.28 6/12/1993 08/090,285 1/23/2001 6,177,880 ISSUED N/A
SHOPPING CART DISPLAY SYSTEM
ARGENTINA 12257.13 9/20/1988 311,976 4/30/1993 242,676 ISSUED Yes
BRAZIL 12257.14 5/22/1989 8807216-9 PENDING Yes
CANADA 12257.9 9/21/1988 578,071 5/5/1992 1,300,235 ISSUED Yes
CANADA 12257.10 12/2/1991 616,243 9/28/1993 1,322,577 ISSUED Yes
CANADA 12257.11 10/16/1992 616,514 6/21/1994 1,330,367 ISSUED Yes
DENMARK 12257.19 5/19/1989 2460/89 PENDING Yes
EUROPEAN PATENT 12257.8 88908639.3 0335931 ISSUED
JAPAN 12257.12 507947/1988 2/6/1998 2743340 ISSUED Yes
XXXXXX XXXXXX 00000.0 9/21/1987 07/099,288 11/27/1990 4,973,952 ISSUED X/X
XXXXXX XXXXXX 00000.00 7/13/1989 07/435,500 3/15/1994 5,295,064 ISSUED X/X
XXXXXX XXXXXX 00000.00 4/12/1993 08/045,826 2/15/1994 5,287,266 ISSUED N/A
WIPO 12257.7 9/21/1998 XXX/XX00/00000 XXX XXXXX
XXXXXXXX XXXX XXXXXX
XXXXXX XXXXXX 12257.44 1/16/1992 07/821,600 11/23/1993 D3,416,91 ISSUED N/A
DEVICE FOR PROVIDING ADVERTISING TO XXXXXXXX
XXXXXX XXXXXX 00000.00 11/1/1990 07/608,167 PENDING N/A
INSTANT ELECTRONIC COUPON VERIFICATION SYSTEM
CANADA 12257.37 /20/1994 2,117,716 9/14/1999 2,117,716 ISSUED Yes
GERMANY 12257.38 /20/1994 44 33 569.5-33 PENDING Yes
UNITED KINGDOM 12257.39 9/20/1994 9419156.6 9/20/1994 2282253 ISSUED Yes
JAPAN 12257.40 9/20/1994 250179/1994 10/31/1997 2712139 ISSUED Yes
TAIWAN 12257.42 9/22/1994 83108755 XXXXXXX
XXXXXX XXXXXX 00000.00 9/20/1993 08/123,192 5/30/1995 5,420,606 ISSUED N/A
SHOPPERS COMMUNICATION SYSTEM AND PROCESSES RELATING THERETO
UNITED STATES 12257.34 11/6/1989 07/432,599 PENDING N/A
MOBILE ADVERTISING DEVICE WITH ELECTRONIC TRANSMISSION CAPABILITIES
UNITED STATES 12257.45 11/21/1995 08/561,432 12/30/1997 5,703,564 ISSUED N/A
TRIGGER UNIT FOR SHOPPING CART XXXXXXX
XXXXXX XXXXXX 00000.00 5/5/1998 09/073,001 1/11/2000 6,012,244 ISSUED N/A
SHOPPERS COMMUNICATION SYSTEM AND PROCESSES RELATING THERETO
CANADA 12257.33 12/15/1992 616,550 11/1/1994 1,332,848 ISSUED Yes
CANADA 12257.32 10/7/1988 579,653 5/4/1993 1,317,347 ISSUED Yes
XXXXXX XXXXXX 00000.00 10/14/1987 07/108,437 11/21/1989 4,882,724 ISSUED X/X
XXXX XXXXXXX
XXXXXX XXXXXX 00000.0 PROPOSED
TAIWAN PATENT (TITLE UNKNOWN)
Taiwan 12257.50 n/a NI-109525 ISSUED
SHOPPERS COMMUNICATION SYSTEM AND PROCESSES RELATING THERETO
UNITED STATES 12257.47 n/a 5/13/1997 5,630,068 ISSUED N/A
AUTOMATED SHOPPING CART HANDLE
UNITED STATES 12257.48 n/a 11/27/2001 6,323,753 ISSUED N/A
METHOD AND APPARATUS FOR CONTROLLING THE CHARGING OF A SECONDARY BATTERY USING THE PRIMARY DIFFERENTIAL OF THE BATTERY VOLTAGE
UNITED STATES 12257.49 n/a 12/30/1997 5,703,465 ISSUED N/A
SCHEDULE 2.1(a)
IKART DESCRIPTION AND RESPONSIBILITIES UNDER EXISTING AGREEMENT
IKART SOLUTION DESCRIPTION
The description contained in this Schedule 2.1(a) was the Parties'
estimate, as of the date of execution of the Existing Agreement, of the
configuration of the iKart and remains subject to change to accommodate
market conditions or customer requirements.
BUYER RESPONSIBILITY
HARDWARE MODULES: Buyer will bear the cost and responsibility of
designing, developing, and manufacturing the following hardware
modules, mechanical design, enclosures, plastics, molds, tooling,
models, etc.
1. SMART DISPLAY
The Smart Display is a cart-mounted device that is fixed to the center
of the handle of a shopping cart. It is based on the following
components:
ITEMS DESCRIPTION
------------------------------ ------------------------------------------------------------------------------
PROCESSOR Intel PXA255 or better (400MHz Clock speed or Better)
------------------------------ ------------------------------------------------------------------------------
OPERATING SYSTEM Windows XX.XXX 4.2 minimum
------------------------------ ------------------------------------------------------------------------------
MEMORY 64MB SDRAM upgradeable to 128MB, 32MB ROM; 32 MB Fixed Storage
------------------------------ ------------------------------------------------------------------------------
DISPLAY 6.4" Color TFT LCD Panel, with low-power backlight
------------------------------ ------------------------------------------------------------------------------
AUDIO SYSTEM AC-97 Codec
------------------------------ ------------------------------------------------------------------------------
IR RECEIVER 38KHz/940nm
------------------------------ ------------------------------------------------------------------------------
KEYBOARD 4 Navigation buttons (up, down, select, back)
------------------------------ ------------------------------------------------------------------------------
BATTERY Internal Lithium-ion button battery for back up
------------------------------ ------------------------------------------------------------------------------
POWER External sealed lead acid
------------------------------ ------------------------------------------------------------------------------
I/O 1 RS232 serial port
------------------------------ ------------------------------------------------------------------------------
PHYSICAL SPEC TBD
------------------------------ ------------------------------------------------------------------------------
ENVIRONMENTAL Operating Temperature 0 o to
110o F Storage Temperature -4
o to 130 o F Operating
Humidity 20%~95%
------------------------------ ------------------------------------------------------------------------------
APPROBATION FCC; cUL, UL, CSA
------------------------------ ------------------------------------------------------------------------------
RF 802.11b with WEP, 802.1x; WPA (TKIP)
------------------------------ ------------------------------------------------------------------------------
SCANNER 2d Scanner Module - CCD
------------------------------ ------------------------------------------------------------------------------
The Smart Display is the key interface to the customer and is
permanently mounted to the shopping cart.
2. MOUNTING HARDWARE AND BATTERY CASE
The mounting hardware includes a lockable battery box with mounting
hardware, power cable connecting the battery to the smart display,
cradle and bracket system to mount the iKart to the handle of the
shopping cart. This module includes all hardware to physically connect
the Smart display and battery to the shopping cart. The battery case is
mounted to the bottom of the main basket and is connected to the smart
display via a stainless steel flexible cable (much like a pay phone
cable). The battery box has a locked door and houses the battery
cartridge containing a sealed lead acid battery(s) (capacity to be
determined) with a carry handle allowing batteries to be swapped
easily.
3. BATTERY CHARGING STATION
The battery charging station is a smart charging solution for charging
sealed lead acid batteries. Each store will be capable of
simultaneously charging batteries to power at least 100 iKarts. The
charging station is lockable and has indicator LEDs for each charging
position including: Green - Fully Charged and Red--Charging. The
cabinet housing of the charging station also includes a large capacity
charger adapter with a standard 110 V power cord and is mounted on
wheels so that the retailer can position and re-position the unit where
necessary in the store.
4. INFRA-RED TRANSMITTERS
The Infrared transmitters are 38KHz/940nm devices that are housed in an
enclosure that includes a clamping device that can be easily connected
to all major brands of in store shelves. These are powered by a PIC
chip and include two (2) D Cell Alkaline Batteries to provide power to
them. There is also an I/F for store associates to use a TV remote
device to change the address of the transmitter. These devices trigger
location based marketing, and informational messages to shoppers, and
facilitate cart tracking. The transmitter housing also incorporates a
blinking LED and shelf sign.
5. RESPONSIBLE WITH SELLER FOR DEVELOPING POS INTERFACE.
6. RESPONSIBLE FOR OTHER HARDWARE FEATURES, INCLUDING BUT NOT LIMITED
TO FIRMWARE/DRIVERS FOR HARDWARE OPERATION, DEEMED NECESSARY BY
CUSTOMER REQUIREMENTS OR MARKET CONDITIONS TO SUCCESSFULLY IMPLEMENT
THE IKART PRODUCT.
7. RESPONSIBLE FOR ALL UPDATES TO HARDWARE, FIRMWARE, AND DRIVERS FOR
ALL IKART HARDWARE.
SELLER RESPONSIBILITY
SOFTWARE MODULES: Seller will bear the cost and responsibility of
developing, or procuring and integrating, the following software
modules as part of the Software.
1. STORE MANAGEMENT INTEGRATION PROGRAM
Store Management--Centralize all data respective to a store Ad Manager
-- Distributes advertisements Store Content Controller--View store
content and configurations Reports--Reporting tool to generate store
status reports
Accounting--Track CPG marketing activity and generate billing
information based on store reports Electronic Coupons--Support
electronic coupon distribution Cart Tracking--Track carts in the store
by the unique identification code on each trigger and each display unit
2. STORE CONTROLLER INTERFACE PROGRAM (SCIP)
Connect to Internet--Manage In Store Processor information required to
connect to Internet Receive Updates--Connects to the HQ Server and
compares internal file versions to HQ file versions and creates update
list Apply Updates--Schedules file updates on smart displays via
wireless access Store Directory Changes--Allows store associates to
change directory information in the event of errors
3. HEADQUARTERS SERVER (KSERV)
Interfaceapplication between the Store Controller I/F Program and the
Marketing Database. Handles requests from SCIP for data.
Internet Socket Server--Handles requests from SCIP for information from
HQ server Generate Database Queries--Queries HQ Server for answers to
SCIP requests FTP--File Transfer Server for SCIP
4. IKART CART COMMUNICATIONS (KARTKOM)
Interface Program between SCIP and Smart Displays Reads files versions
on Smart Display and updates as necessary Updates and Processes
requests from Smart Displays
Transmits RF header "Heart Beat" so that displays that just become
active can receive latest updates from controller Collects system
status from iKart (Battery Status, Inactive Status, Last Operational
Status)
5. CART APPLICATION PROGRAM
Controls all user interface functions (button presses) Controls
advertisement display (animation and sounds) Monitors motion and resets
the awake timer Captures trigger and system data for SCIP
6. PERSONAL SHOPPER MODULE SOFTWARE INTERFACE TO CART APPLICATION
PROGRAM
7. RESPONSIBLE FOR UPGRADING SOFTWARE IDENTIFIED IN 1 THRU 6 OF
SELLER'S RESPONSIBILITIES
8. RESPONSIBLE WITH BUYER FOR DEVELOPING POS INTERFACE
9. OTHER SOFTWARE FEATURES DEEMED NECESSARY BY CUSTOMER
REQUIREMENTS OR MARKET CONDITIONS TO SUCCESSFULLY IMPLEMENT
THE IKART .
