ASSET PURCHASE AGREEMENT
EXHIBIT 10.1
This Agreement is entered into on June 27, 2003 by and between TASER International, Inc., a Delaware corporation (the “Buyer”), a Electronic Medical Research Laboratory, Inc., dba Tasertron, a California corporation a wholly-owned subsidiary of Taser Technologies, Inc., a California corporation, Taser Technologies, Inc., a California corporation and Barnet Xxxxxxx, an individual (jointly and severally, the “Sellers”). The Buyer and the Sellers are referred to collectively herein as the “Parties” and individually as a “Party.”
This Agreement contemplates a transaction in which the Buyer will purchase all of the assets (and assume no liabilities) of Sellers used in the business of designing, manufacturing, marketing, selling and supporting their brand stun guns and related products, in return for cash payments secured by an irrevocable letter of credit from Buyer.
Now, therefore, in consideration of the mutual promises herein made, the Parties agree as follows.
1.1 | “Acquired Assets” means all right, title, and interest in and to all of the assets relating to the Business, except for Excluded Assets (as defined below), including all of its (a) removable tenant improvements, fixtures, and fittings thereon, (b) tangible personal property (such as computers, and software loaded thereon, machinery, equipment, inventories of raw materials and supplies, manufactured and purchased parts, goods in process and finished goods, furniture, trade show displays, all production equipment, tools, jigs, and dies, whether finished or not and whether on or off site), (c) intangible personal property including Intellectual Property, goodwill associated therewith, licenses and sublicenses to or from a Seller, granted and obtained with respect thereto, and rights thereunder, remedies against infringements thereof, and rights to protection of interests therein under the laws of all jurisdictions, (d) certain agreements, contracts, indentures, mortgages, instruments, Security Interests (as defined below), guaranties, other similar arrangements, and rights thereunder, which have been designated by Buyer, (e) deposits, prepayments, refunds, and rights of recovery, (f) approvals, permits, licenses, orders, registrations, certificates, variances, and similar rights obtained from governments and governmental agencies, (g) books, records, ledgers, files, documents, correspondence, lists, plats, product plans, drawings, and specifications, creative materials, advertising and promotional materials, studies, reports, and other printed, electronic or written materials, as it relates to customers, patents, trademarks, and tooling, (h) rights with respect to the intellectual property assignments in employee and consultant agreements, (i) customer and supplier lists, (j) all lawsuits, claims, complaints, demands, judgments, injunctions, orders and the like against Buyer or any other person, (k) any warranty claims in favor of Sellers related to the items above, and (l) the good will of the Business. |
1.2 | “Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses. | ||
1.3 | “Affiliate” means, with respect to a specified person other than an individual: any person that directly or indirectly controls, is directly or indirectly controlled by or is directly or indirectly under common control with such specified persons. For purposes of this definition, (a) “control” (including “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise, and shall be construed as such term is used in the rules promulgated under the Securities Act of 1933, as amended (the “Securities Act”). | ||
1.4 | “Business” means the design, manufacture, marketing, selling, and supporting Seller’s brand stun guns and products. | ||
1.5 | “Closing” has the meaning set forth in § 2.6 below. | ||
1.6 | “Closing Date” has the meaning set forth in §2.6 below. | ||
1.7 | “Confidential Information” means any information concerning the businesses and affairs of the Business that is not generally available to the public. | ||
1.8 | “Corporate Seller” means Electronic Medical Research Laboratories, Inc., dba Tasertron, a wholly owned subsidiary of laser Technologies, Inc. | ||
1.9 | “Employee Benefit Plan” means any “employee benefit plan” (as such term is defined in ERISA §3(3)) and any other employee benefit plan, program or arrangement of any kind. | ||
1.10 | “Employee Pension Benefit Plan” has the meaning set forth in ERISA §3(2). | ||
1.11 | “Employee Welfare Benefit Plan” has the meaning set forth in ERISA §3(1). | ||
1.12 | “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. | ||
1.13 | “Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all U.S. and foreign patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all common law, U.S. registered and foreign trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, |
2
registrations, and renewals in connection therewith, including the name “TASER,” “Tasertron” “95 HP” and “121 HP” “TE 86”, “TE 93”, “TE 95”, “Modular Taser”, “Patrol laser,” and all derivations thereof, (c) all common law, U.S. registered and foreign copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (e) all domain names, websites, telephone numbers, (f) all other proprietary rights, (g) all hard copies, electronic copies and tangible embodiments thereof (in whatever form or medium), and (h) all claims and rights to assert claims against third parties with respect to any of the preceding. | |||
1.14 | “Knowledge” means actual knowledge after reasonable investigation. | ||
1.15 | “Liability” means any liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes. | ||
1.16 | “Multiemployer Plan” has the meaning set forth in ERISA §3(37). | ||
1.17 | “Purchase Price” has the meaning set forth in §2.4 below. | ||
1.18 | “Security Interests” has the meaning set forth in Section 3.6 below. | ||
1.19 | “Tax” or “Taxes” means any income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, franchise, employees’ income withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, value added, alternative, add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any interest, penalty, addition or additional amount thereon imposed, assessed or collected by or under the authority of any governmental body or payable under any tax-sharing agreement or any other contract. | ||
1.20 | “Tax Return” means any return (including any information return), report, statement, schedule, notice, form, declaration, claim for refund or other document or information filed with or submitted to, or required to be filed with or submitted to, any governmental body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any legal requirement relating to any Tax. |
3
(i) all cash, cash equivalents and short-term investments, and accounts receivables; | |
(ii) all minute books, stock records and corporate seals; | |
(iii) the shares of capital stock of each Corporate Seller; | |
(iv) all insurance policies and rights thereunder (except to the extent specified in the definition of Acquired Assets above); | |
(v) all personnel records and other records that each Seller is required by law to retain in its possession; | |
(vi) all claims for refund of Taxes and other governmental charges of whatever nature; | |
(vii) the security deposit on deposit with the landlord for the property occupied by Sellers at 0000 Xxxxxx Xxxx, Xxxxx X, Xxxxxx, Xxxxxxxxxx 00000; | |
(viii) attorney/client privileged communications and personal correspondence; and, | |
(ix) all rights of Sellers under this Agreement and the Xxxx of Sale. |
4
5
or state authorities, which is inconsistent with such allocation. The allocation is intended to comply with Section 1060 of the Internal Revenue Code of 1986, as amended, and related regulations (the “Code”). |
6
(i) | except in the ordinary course of business, none of the Sellers have sold, leased, assigned or otherwise transferred any assets related in any way to the Business, tangible or intangible, or any interest in any such asset, in the previous 180 days; | ||
(ii) | except as referred to in the Disclosure Schedule, no Seller has accelerated, terminated, made material modifications to, or cancelled any agreement, contract, lease, or license to which Sellers are a party or by which any of them is bound; and | ||
(iii) | none of the Sellers have granted any lease, license or sublicense of any rights under or with respect to any Intellectual Property or other Acquired Assets. |
7
investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any of them alleging any failure so to comply. | |||
3.10 | Intellectual Property. For purposes of this Section 3.10, the term “Acquired IP” means all Intellectual Property that is included in the Acquired Assets. |
a. | Except as disclosed in the Disclosure Schedule, Seller owns or have the rights to use, without payments to any other person, all Intellectual Property. Each item of Intellectual Property owned or used by any Seller will be transferred to Buyer on the Closing Date. | |||
b. | Except as disclosed in the Disclosure Schedule and to Seller’s actual knowledge, Seller, and no product manufactured, designed, marketed, sold, leased or licensed by any Seller, has interfered with, infringed upon or misappropriated any Intellectual Property right of any third party, and no Seller (or any agent, advisor or management level employee of any Seller with direct responsibility for Intellectual Property matters) has ever received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that any Seller must license or refrain from using any Intellectual Property rights of any third party) except for charges, complaints, claims, demands and notices that have been fully and finally resolved. To Sellers’ actual knowledge, no third party has interfered in any material way with, infringed upon or misappropriated any Intellectual Property related to the Business. | |||
c. | Schedule 3.10(c)-A identifies each item of Intellectual Property that any Seller owns or controls that he or it has filed, recorded or registered, or applied to file, record or register, with any governmental entity or domain name registrar, and Schedule 3.10(c)-B identifies each license or agreement that any Seller has granted to any third party with respect to any Intellectual Property owned or controlled by that Seller. With respect to each item of Intellectual Property required to be identified in Schedule 3.10(c)-A and the Intellectual Property subject to the licenses and agreements required to be identified in Schedule 3.10(c)-B: (A) Sellers are the sole owners and possess all right, title, and interest in and to the item, free and clear of any Security Interest, license, or other restriction; (B) Except for as set forth in the Disclosure Schedule, the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge that names any Seller nor Affiliate; (C) Except as set forth in the Disclosure Schedule hereby, no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand naming Seller nor Affiliate is pending or has been threatened in writing that challenges the legality, validity, enforceability, registrations, use or ownership of the item; (D) no Seller nor Affiliate is currently bound by any agreement to indemnify any person for or against any interference, infringement, misappropriation or other conflict with respect to the item; Each item of |
8
Intellectual Property described in Schedule 3.10(c)-A and in Schedule 3.10(c)-B is included in the term “Acquired IP.” | ||||
d. | Schedule 3.10(d) identifies each item of Intellectual Property that any third party owns or licenses and that Sellers use in connection with the Business pursuant to license, sublicense, agreement, or permission. With respect to each item of Intellectual Property required by this subsection (d) to be identified in Schedule 3.10(d): no party to the license, sublicense, agreement or permission is in breach or default, and no event has occurred that with notice or lapse of time would constitute a breach or default, that would in either case permit termination, modification or acceleration thereunder; no party to the license, sublicense, agreement or permission, has repudiated in writing any material provision thereof. The license, sublicense, agreement or permission for each item of Intellectual Property described in Schedule 3.10(d) is included in the term “Acquired IP.” | |||
e. | No former or current employees of any Seller or any Seller Affiliate have filed, asserted in writing or, to Sellers’ Knowledge (including agents, advisors or management employees of any Seller with direct responsibility for Intellectual Property matters), threatened in writing any claim against any Seller or any Seller Affiliate in connection with such employee’s involvement in the conception and development of any of the Acquired IP. All former or current employee, agents and consultants who have contributed in any material to or participated in the conception and development of the Acquired IP, have delivered, and executed an assignment to Sellers, copies of which have been delivered to Buyer. | |||
f. | Except as set forth in the Disclosure Schedule and except as to the Acquired IP As of the Closing Date, no former or current shareholder, employee, director or officer of any Seller will have any rights to future royalty payments, or license fees from any Seller from licenses, technology agreements or other agreements, whether written or oral, between any such person and any Seller. | |||
x. | Xxxxxxx have in their possession or control: (i) correct and complete, fully-executed copies of all of the licenses and agreements (as amended to date) that are identified on Schedule 3.10(c)-B and (iv); and (ii) correct and complete copies of all patents, registration certificates, renewal certificates, applications, prosecution histories, and all documents submitted to or received from the relevant patent, copyright, trademark, domain name or other authorities in the United States and foreign jurisdictions, as the case may be) relating to each item of the Intellectual Property identified on Schedule 3.10(c)-X. | |||
x. | Xxxxxxx have delivered to Buyer: (i) correct and complete, fully-executed copies of all of the documents described in the preceding subsection. |
9
a. | The Corporate Seller does not and has never maintained any (Employee Benefit Plans as defined in ERISA.) | |||
b. | No Seller contributes to, has any obligation to contribute for Employees of Sellers, nor has any liability (including withdrawal liability as defined in ERISA §4201) under or with respect to (i) any Employee Pension Benefit Plan that is a “defined benefit plan” (as defined in ERISA §(35)). | |||
c. | No asset of any Seller is subject to any Lien under ERISA or the Code, or (ii) any Multiemployer Plan. |
3.14 | Tax Matters. |
a. | Each Seller has timely filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete in all respects. All Taxes owed by each Seller (whether or not shown or required to be shown on any Tax Return) have been paid. Except for the 2002 Income Tax Returns, no Seller currently is the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where any Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no liens on any of the assets of any Seller that arose in connection with any failure (or alleged failure) to pay any Tax. | |||
b. | Each Seller has withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed. |
10
c. | No Seller stockholder and no director or officer (or employee responsible for Tax matters) of any Seller expects any authority to assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax Liability of any Seller either (A) claimed or raised by any authority in writing or (B) as to which any of Seller’s stockholders and the directors and officers (and employees responsible for Tax matters) of any Seller has knowledge based upon personal contact with any agent of such authority which may materially effect the title constitute an encumbrance of or prohibit the use of the Acquired Assets. |
a. | Organization of the Buyer. The Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. |
11
5. Conditions to Obligation to Close.
12
a. | the representations and warranties set forth in §3 above shall be true and correct in all material respects at and as of the Closing Date; | |||
b. | the Sellers shall have performed and complied with all of its covenants hereunder in all material respects through the Closing; | |||
c. | Buyer shall have received evidence of the releases of all Security Interests on the Acquired Assets satisfactory to Buyer and its counsel; | |||
d. | Delivery of a Xxxx of Sale in the form attached as Exhibit E and such other instruments of assignment, transfer and conveyance as Buyer shall request to convey to Buyer good title to the Acquired Assets; | |||
e. | Delivery of all instruments of assignment relating to the Intellectual Property; | |||
f. | the Sellers shall have arranged for Buyer to acquire possession of and effect the transfer and/or assignments to Buyer of all of the Acquired Assets, excepting: the assignments of Intellectual Property which will be delivered at closing pursuant to section (e); the correspondence files identified in 1.1(g) which will be delivered post-closing and the china tool which will be delivered post-closing; | |||
g. | no notice has been received by Seller of any action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) affect adversely the right of the Buyer to own the Acquired Assets; | |||
h. | each Seller shall have delivered to the Buyer a certificate to the effect that each of the conditions specified above is satisfied in all respects in form and substance as set forth in Exhibit F; | |||
i. | the Buyer shall have received from counsel to the Sellers an opinion in form and substance as set forth in Exhibit G attached hereto, addressed to the Buyer, and dated as of the Closing Date; | |||
j. | Seller, Barnet Xxxxxxx, shall have signed a covenant not to compete in the Business for a period of seven (7) years in form and substance as set forth in Exhibit H; | |||
k. | Seller, Barnet Xxxxxxx, shall have executed and delivered sub-license agreement in a form and substance as set forth in Exhibit I. |
13
l. | all actions to be taken by the Sellers in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby shall be satisfactory in form and substance to Buyer. | |||
m. | all board and shareholder resolutions approving the transaction. | |||
n. | executed Amendment to the Articles of Incorporation of Corporate Sellers changing the corporate names. | |||
o. | abandonment of the fictitious business name “Tasertron.” |
The Buyer may waive any condition specified in this §5.1 if it executes a writing so stating at or prior to the Closing.
a. | the representations and warranties set forth in §4 above shall be true and correct in all material respects at and as of the Closing Date; | |||
b. | the Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing; | |||
c. | no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement or (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect); | |||
d. | the Buyer shall have delivered to the Sellers a certificate to the effect that each of the conditions specified above is satisfied in all respects in form and substance as set forth in Exhibit J; | |||
e. | the Sellers shall have received from counsel to the Buyer an opinion in form and substance as set forth in Exhibit K attached hereto, addressed to the Sellers, and dated as of the Closing Date, | |||
f. | post the Letter of Credit referenced in Section 2.5 herein above. | |||
g. | board of directors resolution approving this Agreement and its related transaction. |
14
The Sellers may waive any condition specified in this §5.2 if they execute a writing so stating at or prior to the Closing.
(i) From the Closing Date through January 2, 2004, no Sellers shall make a general assignment for the benefit of creditors, file a voluntary petition in bankruptcy or for reorganization or arrangement under the bankruptcy laws. | |
(ii) In the event that an involuntary petition in bankruptcy is filed against any Seller. Sellers shall take whatever action is necessary to effect a dismissal of such petition prior to January 2, 2004. | |
(iii) Sellers shall accomplish the following: |
a. shall file the Amended Articles of Incorporation with the California Secretary of State. | ||
b. shall file and record any required abandonment of the Tasertron fictitious business name. | ||
c. shall deliver the correspondence files to Buyer on or before July 3, 2003. | ||
d. shall deliver the china mold to Buyer by no later than September 30, 2003. |
(iv) the obligations of Buyers regarding the dissemination of Seller’s financial statements shall survive the Closing Date and continue through and until January 3, 2004. |
7. Remedies for Breaches of this Agreement.
7.1 | Survival of Representations and Warranties. All of the representations, warranties and covenants of the Sellers shall survive the Closing (even if the Buyer knew or had reason to know of any misrepresentation or breach of warranty which effect the ability to provide clear title to the Acquired Assets or which would encumber or restrict the ability to use the Acquired Assets at the time of Closing) and continue in full force and effect up and until January 2, 2004. Provided, however, should any claims be made prior to January 3, 2004, the representation and warranties shall continue in full force and effect as to that claim until resolved. | ||
7.2 | Indemnification Provisions for Benefit of the Buyer. Each Seller, jointly and severally, agrees to indemnify the Buyer from and against the entirety of any Adverse Consequences the Buyer may pay resulting from, arising out of, relating to, in the nature of, or caused by the following only as it relates to affording the |
15
Buyer clear title, release of any encumbrances on restriction on use of the Acquired Assets: |
a. | any Breach of any representation or warranty made by that Seller in (i) this Agreement (without giving effect to any supplement to the Disclosure Schedule), (ii) the Disclosure Schedule, (iii) the supplements to the Disclosure Schedule, (iv) the certificates delivered pursuant to Section 5.1, (v) any transfer instrument or (vi) any other certificate, document, writing or instrument delivered by any Seller pursuant to this Agreement; | |||
b. | any Breach of any covenant or obligation of any Seller in this Agreement or in any other certificate, document, writing or instrument delivered by any Seller pursuant to this Agreement; | |||
c. | any Liability arising out of the ownership or operation of the Acquired Assets prior to the Closing Date; | |||
d. | any brokerage of finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any Person with any Seller (or any Person acting on their behalf) in connection with any of the transactions contemplated by this Agreement; | |||
e. | any product or component thereof manufactured by or shipped, or any services provided by, any Seller, in whole or in part, prior to the Closing Date; | |||
f. | any noncompliance with any bulk sales laws or fraudulent transfer law in respect of the transactions contemplated by this Agreement; | |||
g. | any liability under the WARN Act or any similar state or local legal requirement that may result from an “Employment Loss”, as defined by 29 U.S.C. sect. 2101(a)(6), caused by any action of any Seller prior to the Closing or by Buyer’s decision not to hire previous employees of any Seller; or | |||
h. | any liability, claim or expense of the Sellers (including any liability of the Sellers that becomes a liability of the Buyer under any bulk transfer law of any jurisdiction under any common law doctrine of de facto merger or successor liability, or otherwise by operation of law). | |||
g. | any of the Excluded Assets or Retained Liabilities; | |||
h. | the ownership or use of the Acquired Assets or the operation of the Business on or before the Closing Date. |
7.3 | Indemnification Provisions for Benefit of the Sellers. The Buyer agrees to indemnify the Sellers from and against the entirety of any Adverse Consequences the Sellers may suffer resulting from, arising out of, relating to, in the nature of, |
16
or caused by any breach of Buyer’s representations, warranties, and covenants contained in this Agreement. | |||
7.4 | Set off. Buyer shall provide notice of receipt of any claim for which Sellers are required to indemnification pursuant to Section 7. After receipt of written notice, Sellers shall have sixty (60) days from the date of such notice (the “cure period”) to pay, cure, investigate and compromise such claim. Should Sellers believe such claim to be an invalid claim, not entitling Buyer to indemnification, hereunder, Sellers may initiate proceedings seeking an adjudication of the validity of such claims within the cure period. Should Sellers initiate such proceedings within the cure period, Buyer shall not pay such claim but shall set off the amount of the claim against any payment due under the letter of credit and shall hold this amount in abeyance in a mutually agreeable escrow account until either Seller and Buyer jointly agree to such payment or invalidity or joint direction from such time as the claim is adjudicated and Buyer shall then pay such amount to the prevailing party. Buyer may set off any amounts to which it may be entitled under this Section 7 against amounts otherwise payable under this Agreement and the letter of credit to any Seller. The exercise of such right of setoff by Buyer in good faith, whether or not ultimately determined to be justified, will not constitute an event of default under this Agreement or the Letter of Credit. Neither the exercise of nor the failure to exercise such right of setoff will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that any be available to it. | ||
7.5 | Matters Involving Third Parties. |
a. | If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter which may give rise to a claim for indemnification (a “Third Party Claim”) against the other Party (the “Indemnifying Party”) under this Agreement, then the Indemnified Party shall promptly but in no event any later than 5 business days thereafter, notify the Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced. | |||
b. | The Indemnifying Party will have the right to assume the defense of the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party at any time within 15 days after the Indemnified Party has given notice of the Third Party Claim; and provided, further, that the Indemnifying Party must conduct the defense of the Third Party Claim actively and diligently thereafter in order to preserve all rights in this regard; and provided further that the Indemnified Party may retain separate co-counsel to participate in the defense of the Third Party Claim. | |||
c. | So long as the Indemnifying Party has assumed and is conducting the defense of the Third Party Claim in accordance the above provisions, |
17
(A) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably) unless the judgment or proposed settlement involves only the payment of money damages by the Indemnifying Party does not impose an injunction or other equitable relief upon the Indemnified Party, and contains a complete release of the Indemnified Party and (B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably). | ||||
d. | In the event the Indemnifying Party does not assume and conduct the defense of the Third Party Claim in accordance with the above provisions, however, (A) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith) and (B) the Indemnifying Party will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent and (C) if the Indemnified Party is the Buyer, it may set off the amount of such Third Party Claim against payments owed under this Agreement. |
8.1 | Termination of Agreement. Certain of the Parties may terminate this Agreement as provided below: |
a. | by Buyer if any condition in Section 5.1 has not been satisfied as of the date specified for Closing in the first sentence of Section 2.6 or if satisfaction of such a condition by such date is or becomes impossible (other than through the failure of Buyer to comply with its obligations under this Agreement), and Buyer has not waived such condition on or before such date; | |||
b. | by all, but not less than all, of the Sellers if any condition in Section 5.2 has not been satisfied as of the date specified for Closing in the first sentence of Section 2.6 or if satisfaction of such a condition by such date is or becomes impossible (other than through the failure of any Seller to comply with its obligations under this Agreement), and the Sellers have not waived such condition on or before such date; | |||
c. | the Buyer and the Sellers may terminate this Agreement by mutual written consent at any time prior to the Closing; |
18
d. | the Buyer may terminate this Agreement by giving written notice to the Sellers at any time prior to the Closing (A) in the event any Seller has breached any material representation, warranty, or covenant contained in this Agreement or (B) if the Closing shall not have occurred on or before June 27, 2003, and, | |||
e. | all, but not less than all, of the Sellers may terminate this Agreement by giving written notice to the Buyer at any time prior to the Closing (A) in the event the Buyer has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, or (B) if the Closing shall not have occurred on or before June 27, 2003. |
19
If to the Sellers: |
Barnet Xxxxxxx Xxxx & Xxxxxxx Law Corporations 0000 XxxXxxxxx Xxxx., Xxxxx Xxxxx Xxxxxxx Xxxxx, XX 00000 |
|
If to the Buyers: |
Xxxx Xxxxx Chief Executive Officer TASER International, Inc. 0000 Xxxx XxXxxxx Xxxxx, Xxxxx 0 Xxxxxxxxxx, XX 00000-0000 |
|
Copy to: |
Xxxxxxx Xxxxx Vice President and General Counsel TASER International, Inc. 0000 Xxxx XxXxxxx Xxxxx, Xxxxx 0 Xxxxxxxxxx, XX 00000-0000 |
Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.
20
21
22
9.21 | Submission to Jurisdiction. Each of the Parties submits to the jurisdiction of any state or federal court sitting in Orange County, California, in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each Party also agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto. Any Party may make service on any other Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in §8.8 above. Nothing in this §8.21, however, shall affect the right of any Party to serve legal process in any other manner permitted by law or in equity. Each Party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or in equity. | ||
9.22 | Attorney’s Fees and Costs. In the event of a dispute arising out of or an action related to this Agreement, the prevailing party shall be entitled to recover an award of attorney’s fees and costs. Prevailing Party shall mean with respect to monetary relief a party that recovers fifty percent (50%) or more of what it seeks in arbitration or in court. With respect to equitable relief it shall mean a judgment or award that provides the party with the majority of the equitable relief it seeks to be determined by the arbitrator or judge as the case may be. |
TASER International, Inc.
By: | /s/ Xxxxxxx X. Xxxxx | |
Name: | Xxxxxxx X. Xxxxx | |
Title: | CEO |
By: | /s/ Barnet Xxxxxxx | |
Name: | Barnet Xxxxxxx |
Taser Technologies, Inc.
By: | /s/ Barnet Xxxxxxx | |
Name: | Barnet Xxxxxxx | |
Title: | President |
23
Electronic Medical Research Laboratory, Inc., dba Tasertron
By: | /s/ Barnet Xxxxxxx | |
|
||
Name: | Barnet Xxxxxxx | |
Title: | President |
24