Exhibit 10.3

EXECUTION COPY

ASSET PURCHASE AGREEMENT

BY AND AMONG

ORBCOMM Inc., a Delaware corporation

and

MobileNet, Inc., a Georgia corporation

William J. Purdie III

and

Ruby W. Purdie

Dated March 13, 2013

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TABLE OF CONTENTS

 

ARTICLE 1 DEFINITIONS

     1   

1.1. Specified Definitions

     1   

1.2. Other Terms

     11   

1.3. Other Definitional Provisions

     11   

ARTICLE 2 PURCHASE AND SALE OF ASSETS

     12   

2.1. Description of Purchased Assets

     12   

2.2. Retained Assets

     14   

2.3. Reliance

     14   

ARTICLE 3 ASSUMPTION AND NON-ASSUMPTION OF LIABILITIES

     14   

3.1. Description of Assumed Liabilities

     14   

3.2. Non-Assumption of Liabilities

     15   

3.3. Liabilities With Respect to Personnel Matters

     16   

ARTICLE 4 PURCHASE PRICE AND PAYMENT

     17   

4.1. Purchase Price

     17   

4.2. Payment of Purchase Price and Assumption of Assumed Liabilities

     18   

4.3. Purchase Price Adjustments

     18   

4.4. Earnout

     20   

4.5. Receivables

     22   

4.6. Allocation of Purchase Price

     22   

4.7. ORBCOMM Stock

     22   

4.8. Withholding Tax

     23   

ARTICLE 5 THE CLOSING

     24   

5.1. The Closing

     24   

5.2. Closing Date

     24   

5.3. Deliveries by Sellers

     24   

5.4. Deliveries by Purchaser

     25   

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SELLERS

     25   

6.1. Due Organization and Authority; Subsidiaries

     25   

6.2. Qualification

     26   

6.3. Organizational Documents and Company Records

     26   

6.4. Financial Statements

     26   

6.5. Authority to Execute and Perform Agreement

     26   

6.6. Absence of Certain Liabilities

     27   

6.7. Absence of Certain Changes or Events

     27   

6.8. Title to Assets and Properties; Condition

     29   

6.9. Permits and Licenses

     29   

6.10. Intellectual Property

     30   

6.11. No Conflict of Interest

     33   

6.12. Labor Relations; Officers and Employees

     34   

6.13. Employee Benefits

     34   

6.14. Environmental Matters

     35   

6.15. Taxes

     36   

6.16. Legal Proceedings

     37   

6.17. Contracts

     37   

6.18. Compliance with Laws, Certifications

     39   

 

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6.19. Insurance

     40   

6.20. Fees or Commissions

     40   

6.21. Illegal Payments

     40   

6.22. Suppliers and Customers

     40   

6.23. Inventories

     41   

6.24. Real Property

     41   

6.25. Assigned Receivables

     42   

6.26. Disclosure

     42   

6.27. Accredited Investor

     42   

6.28. Investment Intent

     42   

6.29. Investment Decision

     42   

6.30. Transfer Restrictions

     42   

ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PURCHASER

     43   

7.1. Organization

     43   

7.2. Authority to Execute and Perform Agreement

     43   

7.3. Fees or Commissions

     43   

7.4. Orders

     43   

7.5. Sufficiency of Funds

     43   

7.6. Valid Issuance

     44   

7.7. SEC Reports; Financial Statements

     44   

7.8. Absence of Changes

     44   

7.9. Governmental Authorizations

     44   

ARTICLE 8 COVENANTS

     45   

8.1. Conduct of the Business

     45   

8.2. Examinations and Investigations, Confidentiality Agreement

     46   

8.3. Certain Filings, Consents and Action

     46   

8.4. Public Announcement

     47   

8.5. Acquisition Proposals

     47   

8.6. Further Assurances

     47   

8.7. Financial Information

     48   

8.8. Third Party Consents

     48   

8.9. Bulk Sales Law

     48   

8.10. Cessation of Use of Names; Telephone; Domain Names

     48   

8.11. Tax Cooperation

     48   

8.12. Access to Records

     49   

ARTICLE 9 CONDITIONS TO OBLIGATIONS OF PURCHASER

     49   

9.1. Representations and Warranties True as of the Closing Date

     49   

9.2. Performance by Sellers

     49   

9.3. Authority

     49   

9.4. Consents

     49   

9.5. Assumed Contracts and Assigned Rights

     49   

9.6. Absence of Litigation

     49   

9.7. No Material Adverse Change

     50   

9.8. Title

     50   

9.9. Agreement with the Key Employee and Acceptance by a Transferred Employee

     50   

9.10. Due Diligence

     50   

 

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9.11. Certificate of Indebtedness

     50   

9.12. Discharge of Liens

     50   

9.13. Tax Clearance Certificate

     50   

9.14. Other Agreements

     51   

9.15. FIRPTA Certificate

     51   

9.16. Escrow Agreement

     51   

9.17. Proceedings and Documents Satisfactory

     51   

ARTICLE 10 CONDITIONS TO OBLIGATIONS OF SELLERS

     51   

10.1. Representations and Warranties True as of the Closing Date

     51   

10.2. Performance by Purchaser

     51   

10.3. Authority

     51   

10.4. Absence of Litigation

     52   

10.5. Other Agreements

     52   

10.6. Escrow Agreement

     52   

10.7. Proceedings and Documents Satisfactory

     52   

10.8. Due Diligence

     52   

10.9. No Material Adverse Change

     52   

ARTICLE 11 INDEMNIFICATION

     52   

11.1. Survival of Representations and Warranties; Remedies

     52   

11.2. Indemnification by Sellers

     52   

11.3. Indemnification by Purchaser

     53   

11.4. Indemnification Procedures

     53   

11.5. Method and Manner of Paying Indemnity Claims

     54   

11.6. Limitations on Indemnification

     55   

11.7. Exclusive Remedy

     57   

ARTICLE 12 TERMINATION

     57   

12.1. Termination of Agreement

     57   

12.2. Rights upon Termination

     58   

ARTICLE 13 CONFIDENTIALITY AND NON-SOLICITATION

     59   

13.1. Confidential Information

     59   

13.2. Agreement Not To Disclose Confidential Information

     59   

13.3. Agreement Not To Interfere With Relationships

     59   

13.4. Agreement Not To Solicit Employees

     59   

13.5. Enforceability

     60   

ARTICLE 14 MISCELLANEOUS

     60   

14.1. Benefit and Assignment

     60   

14.2. Governing Law

     60   

14.3. Specific Performance

     60   

14.4. Expenses and Taxes

     60   

14.5. Counterparts

     60   

14.6. Headings

     61   

14.7. Amendment, Modification and Waiver

     61   

14.8. Schedules

     61   

14.9. Entire Agreement

     61   

14.10. Sellers’ and Purchaser’s Acknowledgment

     61   

14.11. Notices

     61   

14.12. Disclaimer of Warranties

     62   

 

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SCHEDULES & EXHIBITS

Schedule 3.3

Schedule 4.6

Schedule 6.2

Schedule 6.5

Schedule 6.7

Schedule 6.8.1

Schedule 6.9

Schedule 6.10.1

Schedule 6.10.2

Schedule 6.10.3

Schedule 6.10.4

Schedule 6.10.5

Schedule 6.10.6

Schedule 6.11

Schedule 6.12

Schedule 6.12.2

Schedule 6.13.1

Schedule 6.14

Schedule 6.15

Schedule 6.16

Schedule 6.17

Schedule 6.17.4

Schedule 6.19

Schedule 6.22

Exhibit 2.1.3

Exhibit 2.1.6(a)

Exhibit 2.1.6(b)

Exhibit 2.2.9

Exhibit 9.4

Exhibit 9.5

Exhibit 9.16

 

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ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the “Agreement”) is made as of the 13th day of
March, 2013, by and among ORBCOMM Inc., a Delaware corporation with its
principal place of business at 395 W. Passaic Street, Suite 325, Rochelle Park,
New Jersey 07662 (“Purchaser”), MobileNet, Inc., a Georgia corporation with its
principal place of business at 13000 Deerfield Parkway, Suite 325, Milton,
Georgia 30004 (the “Company”) and William J. Purdie III and Ruby W. Purdie,
individual residents of Georgia with an address at 1985 Birmingham Road, Milton,
Georgia 30004 (collectively referred to as the “Stockholder”). The Company and
the Stockholder are referred to herein collectively as the “Sellers” and each is
singly, a “Seller”.

Background Information

A. Sellers wish to sell certain of the Company’s assets related to and used in
the business conducted by the Company, including its business of design,
development, manufacture and marketing of mobile asset tracking and management
tools and services (the “Business”) and Purchaser (or a wholly-owned subsidiary
of Purchaser, formed to receive the Purchased Assets and operate the Business
after the Closing) wishes to purchase such assets.

B. As of January 18, 2013, Sellers and Purchaser entered into a letter of
intent, which letter of intent contemplates the execution of a definitive
purchase agreement among the parties.

C. This Agreement is the definitive purchase agreement contemplated by the
letter of intent.

Statement of Agreement

In consideration of the foregoing premises and the mutual covenants of the
parties contained herein and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1. Specified Definitions.

As used in this Agreement, the following capitalized terms have the meanings
specified below:

“Affiliate” of a Person means a Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, control of a Person means
the possession of the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by Contract or
otherwise.

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“Agreement” shall have the meaning set forth in the Preamble.

“Asset Sale” means the sale of the Purchased Assets to Purchaser at the Closing
in accordance with the terms and conditions of this Agreement.

“Assigned Rights” shall have the meaning set forth in Section 2.1.10.

“Assigned Receivables” shall have the meaning set forth in Section 2.1.8.

“Assumed Contracts” shall have the meaning set forth in Section 2.1.6.

“Assumed Liabilities” shall have the meaning set forth in Section 3.1.

“Balance Sheet” shall have the meaning set forth in Section 6.4.

“Balance Sheet Date” shall have the meaning set forth in Section 6.4.

“Benefit Arrangement” means a plan, program, agreement, arrangement or practice
providing for bonuses, incentive compensation, deferred compensation, vacation
pay, severance pay, restricted stock, stock options, tuition reimbursement or
any other material perquisite or employee benefit (other than a Plan) maintained
or sponsored by the Company for the benefit of employees employed in the
Business.

“Business” shall have the meaning specified in the Background Information.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. §§9601 et. seq., as amended, and the rules and
regulations promulgated thereunder.

“Certificate of Indebtedness” shall have the meaning set forth in Section 9.11

“Claims” shall have the meaning specified in Section 6.16.

“Closing” shall have the meaning specified in Section 5.1.

“Closing Cash Amount” shall have the meaning specified in Section 4.2.1.

“Closing Date” shall have the meaning specified in Section 5.2.

“Closing ORBCOMM Stock” means the number of shares of Purchaser common stock,
rounded up to the next whole number, equal to the quotient of (i) $1,500,000,
divided by (ii) $4.5545; provided, however, that the number of shares of
Purchaser common stock shall be proportionately adjusted in the event of a stock
split, stock dividend or similar stock transaction affecting the shares of
Purchaser common stock between the date of this Agreement and the Closing Date.

 

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“COBRA” shall have the meaning specified in Section 6.13.9.

“Code” means the Internal Revenue Code of 1986, as amended or recodified, and
regulations promulgated thereunder.

“Company’s Proposed Calculations” shall have the meaning specified in
Section 4.3.4.

“Confidential Information” shall have the meaning specified in Section 13.1.

“Confidentiality Agreement” means that certain Confidentiality Agreement between
the Company and Purchaser effective as of August 28, 2012.

“Contracts” means and includes (i) all contracts, licenses, leases, indentures,
deeds, instruments, joint venture, environmental indemnity and other agreements,
commitments and all other legally binding arrangements of the Company, and
(ii) without limitation of clause (i), all legally binding bids, quotations,
proposals or other offers of the Company, whether oral or written, but in any
event excluding Permits, Plans, Benefit Arrangements and any contract relating
to any Indebtedness.

“Current Employees” shall have the meaning specified in Section 3.3.1.

“Deductible Amount” shall have the meaning specified in Section 11.6.1.

“Developed Software” shall have the meaning specified in Section 6.10.6.11.

“Documentation” means user guides, manuals, and written instructions for the
Software, and any other written materials in any media that explain how the
Software runs.

“Due Diligence” shall have the meaning specified in Section 8.2.

“Earnout Amounts” shall have the meaning specified in Section 4.4.5.

“Earnout Period” shall mean each of the two one-year periods ending,
respectively, on (i) March 31, 2014, and March 31, 2015 if the Closing occurs on
or before March 31, 2013; or (ii) April 30, 2014 and April 30, 2015 if the
Closing occurs after March 31, 2013.

“Earnout Statement” shall have the meaning specified in Section 4.4.1.

 

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“Environmental Claim” means any notice, claim, demand or other communication
(collectively, a “claim”) alleging or asserting Liability for Remedial Action
costs, damages to natural resources or other property, personal injuries, fines
or penalties, arising out of, based on or resulting from (i) the presence, or
Release into the environment, of any Hazardous Substance, in, on or under any
property, whether or not owned, or (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law including, without
limitation, violation of a Permit or failure to obtain a Permit. The term
“Environmental Claim” shall include, without limitation, any claim by any
Governmental Authority for enforcement, Remedial Action or damages pursuant to
any applicable Environmental Law, and any claim by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Substances in, on or
under any property, whether or not owned, or arising from actual or alleged
injury or threat of injury to property, health, safety or the environment in
relation to Hazardous Substances in, on or under any property, whether or not
owned.

“Environmental Law” means any past or present Law, Order or common law relating
to the protection of the environment, natural resources, human health or safety,
such as the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. §§ 9601, et seq., as amended; the Resource Conservation and
Recovery Act 42 U.S.C. §§ 6901 et seq., as amended; the Clean Water Act, 33
U.S.C. §§ 1251 et seq., as amended; the Clean Air Act, 42 U.S.C. §§ 7401 et
seq., as amended; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.,
as amended, the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq., as amended,;
and the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq., as
amended.

“Environmental Liability” means and includes, with respect to any Person,
(i) any Liability of such Person, whether now existing or hereafter arising at
any time, (x) under any Environmental Law or under any Permit issued pursuant to
any Environmental Law (including without limitation for any violation or alleged
violation of any such Environmental Law or Permit), or (y) without limitation of
the generality of subclause (x), in connection with any Remedial Action, and
(ii) without limiting the generality of clause (i), any Environmental Claim made
against such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
and the rules and regulations promulgated thereunder.

“Erroneous Party” shall have the meaning specified in Section 4.3.4.

“Escrow Agreement” shall have the meaning specified in Section 9.16.

“Escrow Amount” shall mean one-half of the Closing ORBCOMM Stock, rounded up to
the next whole number.

“Final Adjustment” shall have the meaning specified in Section 4.3.5.

“Financial Statements” shall have the meaning specified in Section 6.4.

“GAAP” means United States generally accepted accounting principles.

 

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“Governmental Authority” means any agency, board, bureau, court, commission,
department, instrumentality or administration of any foreign government, the
United States government, the government of any state, province, district,
territory or possession of the United States or any other country and any local
or other governmental body or any political subdivision of any of the foregoing.

“Hazardous Substance” means (i) any petroleum or petroleum products, flammable
explosives, radioactive materials, asbestos in any form, urea formaldehyde foam
insulation, and polychlorinated biphenyls (PCBs); (ii) any chemicals or other
materials or substances which are defined as or included in the definition of
“hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely
hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic
pollutants,” “pollutants,” “contaminants,” “solid wastes,” “wastes” or words of
similar import under any Environmental Law; and (iii) any other chemical or
other material or substance, for which handling, disposal, treatment, storage,
transportation, release, exposure to, or presence or migration is now or
hereafter prohibited, limited or regulated by, or would result in liability
pursuant to, any Environmental Law.

“Indebtedness” of any Person, means, without duplication: (i) the principal of
and interest upon and premium (if any) in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such Person is
responsible or liable; (ii) all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement (but excluding accounts payable, other current liabilities and
deferred revenue of such Person arising in the ordinary course of business of
such Person); (iii) all obligations of such Person under leases required to be
capitalized in accordance with GAAP; and (iv) all obligations of the type
referred to in clauses (i) through (iii) of any third party for the payment of
which such Person is responsible or liable, directly or indirectly, whether as
an obligor, guarantor or in some other similar capacity.

“Indemnified Amount” shall have the meaning specified in Section 11.5.1.

“Indemnified Party” shall have the meaning specified in Section 11.4.1.

“Indemnifying Party” shall have the meaning specified in Section 11.4.1.

“Indemnity Claim” shall have the meaning set forth in Section 11.4.1.

“Independent Accounting Firm” shall have the meaning specified in Section 4.3.4.

“Intellectual Property” means (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all domestic and foreign patents, patent applications, and patent
disclosures and licenses to patents owned by others, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (ii) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith and licenses
to copyrights owned by others, (iii) 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, bills of material, customer and

 

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supplier lists, pricing and cost information, and business and marketing plans
and proposals), (iv) all trademarks, service marks, trade dress, logos, trade
names, internet domain names, and corporate names, together with all
translations, adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications, registrations, and
renewals in connection therewith, (v) all Software and licenses to Software
owned by others; (vi) all intellectual property rights arising from or in
respect of Technology, and (vii) all copies and tangible embodiments thereof (in
whatever form or medium); together with the goodwill associated therewith,
licenses and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under applicable Laws including the right to sue for, collect
damages, settle and release claims for past, present, and future infringement,
including without limitation, the right to sue to enjoin infringement, and
(viii) all other applications and registrations related to any of the
intellectual property rights set forth in the foregoing clauses (i) –
(vii) above.

“Interim Balance Sheet” shall have the meaning specified in Section 6.4.

“Interim Balance Sheet Date” shall have the meaning specified in Section 6.4.

“Interim Financials” shall have the meaning specified in Section 6.4.

“Initial Closing Statement” shall have the meaning specified in Section 4.3.1.

“Inventories” shall have the meaning specified in Section 2.1.2.

“Key Employee” means William J. Purdie III.

“Law” means any law, statute, rule, regulation, ordinance, policy, guidance,
common law or other pronouncement having the effect of law of any Governmental
Authority, in effect from time to time.

“Leased Real Property” means the office space leased by the Company from CAT-ATL
Owner LLC and located at 13000 Deerfield Parkway, Suite 325, Milton, Georgia
(together with any associated leasehold improvements).

“Liabilities” means, as to any Person, all debts, adverse claims, liabilities
and obligations, direct, indirect, absolute or contingent, known or unknown, of
such Person, whether accrued, vested or otherwise, whether in contract, tort
(including without limitation toxic tort), strict liability or otherwise and
whether or not actually reflected, or required by GAAP to be reflected, in such
Person’s balance sheets or other books and records.

“Licenses In” shall have the meaning specified in Section 6.10.2.

“Licenses Out” shall have the meaning specified in Section 6.10.3.

 

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“Lien” means any pledge, mortgage, security interest, charge against,
encumbrance, or lien upon any of the Purchased Assets or upon the income or
profits therefrom, in each case to secure payment of any Indebtedness or debt or
performance of any obligation.

“Losses” means any and all claims, losses, damages, liabilities, obligations
(including those arising out of any action, such as any settlement or compromise
thereof or judgment or award therein) and any reasonable costs and expenses,
including, without limitation, attorney’s and other advisors’ fees and
disbursements; provided, however that, in no event shall Losses include amounts
that are consequential, in the nature of lost profits, diminution in the value
of the Business (based on multiples of revenues or earnings), special or
punitive or otherwise not actual damages, other than such amounts that are
components of claims against an Indemnified Party in actions by third parties to
the extent that any such claim is subject to indemnification pursuant to Article
11.

“Machinery and Equipment” shall have the meaning specified in Section 2.1.1.

“Material Adverse Change” with respect to the Company means any material adverse
change in the financial condition, assets, liabilities, results of operations or
prospects of the Business. A “Material Adverse Change” with respect to the
Purchaser means a material adverse change in the financial condition, results of
operation or prospects of the Purchaser’s business.

“Material Adverse Effect” means a material adverse effect on the financial
condition, assets, liabilities, results of operations, or prospects of the
Business.

“MobileNet Service Revenues” means net service revenues recognized by Purchaser
and its Affiliates in accordance with GAAP (which, for the avoidance of doubt,
includes amortization of deferred service revenues (including deferred revenues
from Assigned Receivables) into the measurement period, but does not include
service revenues invoiced during the measurement period for which service will
be rendered in a subsequent period as required by GAAP) during the relevant
Earnout Period which result from the provision of communication, monitoring and
activation services (which expressly exclude any revenue from the sale of
equipment or other items of tangible personal property) which utilize technology
included within the Purchased Assets which has not been utilized by Purchaser
prior to the acquisition of the Purchased Assets and is not in the public domain
or commercially available from other sources. Further, for avoidance of doubt,
MobileNet Service Revenues expressly include service revenues, calculated in
accordance with the previous sentence, resulting from the provision of
communication, monitoring and activation services (A) provided to Persons who
were customers of the Company at or prior to the Closing Date for use in
monitoring heavy equipment (examples of which would be backhoes, cranes,
railroad maintenance-of-way equipment, rail cars used in the transport of
railroad construction equipment and railroad parts trailers); (B) provided to
heavy equipment customers of Purchaser to the extent attributable to utilization
of the Company’s portal which is included in the Purchased Assets, or (C) which
relate to consulting, system design, licensing or support fees for services
included in clauses (A) or (B) immediately preceding. Notwithstanding anything
to the contrary, MobileNet Service Revenues expressly exclude revenues resulting
from providing services with respect to rail cars (except rail cars used as the
transport of railroad construction equipment), locomotives, trucks, trailers
(except railroad parts trailers) and intermodal containers. In cases where
services included in MobileNet Service Revenues are invoiced together with
charges for other services or equipment, the portion of the amount invoiced to
MobileNet Service Revenues shall be allocated in accordance with GAAP.

 

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“Multiemployer Plan” means a “multiemployer plan,” as such term is defined in
Section 3(37) of ERISA which is maintained, sponsored or contributed to by the
Company for the benefit of any employee employed in the Business.

“Net Working Capital” means, (i) the Inventories and Assigned Receivables in
each case included in the Purchased Assets, minus (ii) the deferred revenue
obligations (valued at the portion of the full invoiced amounts attributable to
services to be rendered by the Business after the Closing Date) and a warranty
reserve in the amount of $5,000 in each case as included in the Assumed
Liabilities, all calculated in accordance with GAAP (other than the $5,000
warranty reserve).

“Notice of Disagreement” shall have the meaning specified in Section 4.4.4.

“Object Code” means the machine language readable format of the Software
together with any modifications, enhancements, upgrades, updates, additions and
derivatives thereof.

“OFAC Regulations” shall have the meaning specified in Section 6.18.4.

“ORBCOMM Stock” means both the Closing ORBCOMM Stock and any shares of Purchaser
common stock issuable pursuant to Section 4.4 hereof.

“Order” means any writ, judgment, decree, injunction or similar order or binding
settlement of or with any Governmental Authority, in each case whether
preliminary or final.

“Ordinary Course of Business” means in the ordinary course of the Business
consistent with past practice (including with respect to quantity and
frequency); however, for the avoidance of any doubt, any costs of accounting,
legal and other third party consultants incurred in connection with the
transactions contemplated by this Agreement shall not be considered costs
incurred in the Ordinary Course of Business.

“Owned Intellectual Property” means Intellectual Property and rights therein
owned by the Company.

“Permit” means any permit, license, franchise, approval and authorization issued
or granted by a Governmental Authority.

“Permitted Liens” means (i) statutory liens for current taxes, assessments or
other governmental charges not yet delinquent or being contested in good faith
by appropriate proceedings, and (ii) mechanics’, carriers’, workers’,
repairers’, landlords’ and similar liens arising or incurred in the Ordinary
Course of Business which secure the payment of Assumed Liabilities which are not
past due or are being contested in good faith by appropriate proceedings.

 

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“Person” means any individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization, other form of
business or legal entity or Governmental Authority.

“Plan” means any “employee benefit plan” as such term is defined in Section 3(3)
of ERISA, other than a Multiemployer Plan, (a) which is maintained by the
Company; (b) to which the Company contributes or is obligated to contribute on
behalf of employees employed in the Business; or (c) for the benefit of any
employee employed in the Business.

“Pre-Closing Tax Periods” means taxable periods ending on or before the Closing
Date and the portion ending on the Closing Date of any taxable period that
includes but does not end on the Closing Date.

“Prepaid Items” shall have the meaning specified in Section 2.1.5.

“Products” means all items or services currently sold or offered for sale by the
Company as of the date of this Agreement.

“Proposed Contracts” shall have the meaning set forth in Section 6.17.2.

“Purchase Price” shall have the meaning specified in Section 4.1.

“Purchase-Price Limited Losses” shall have the meaning specified in
Section 11.6.1.

“Purchased Assets” shall have the meaning specified in Section 2.1.

“Purchaser” shall have the meaning specified in the Preamble.

“Purchaser’s Proposed Calculations” shall have the meaning specified in
Section 4.3.4.

“Real Property Leases” shall have the meaning specified in Section 6.24.2.

“Release” means any releasing, spilling, leaking, discharging, disposing of,
pumping, pouring, emitting, emptying, injecting, leaching, dumping or allowing
to escape, and includes any “release” as defined in CERCLA.

“Remaining Disputed Items” shall have the meaning specified in Section 4.3.4.

“Remedial Action” means any action to clean up, investigate, monitor, abate,
transport, remove, treat or in any other way address or respond to any Hazardous
Substances.

“Representation and Warranty Cap” shall have the meaning specified in
Section 11.6.2.

“Representation and Warranty Losses” shall have the meaning specified in
Section 11.6.1.

 

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“Retained Assets” shall have the meaning specified in Section 2.2.

“Retained Contracts” shall have the meaning specified in Section 2.1.6.

“Retained Liabilities” shall have the meaning specified in Section 3.2.

“Retained Records” shall have the meaning specified in Section 2.2.4.

“Retained Receivables” shall have the meaning specified in Section 2.2.2.

“Schedules” means the disclosure schedules delivered to Purchaser in connection
herewith.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
including the rules and regulations promulgated thereunder.

“SEC” shall mean the Securities and Exchange Commission.

“SEC Reports” shall have the meaning specified in Section 7.7.

“Seller” shall have the meaning specified in the Preamble.

“Sellers’ Knowledge” or the “Knowledge of Sellers” means matters actually known,
after reasonable inquiry, by William J. Purdie III or Matthew Mueller, or as
reflected in the business records of any of the Sellers; provided that such
reasonable inquiry shall not impose an obligation on Sellers to conduct a search
of issued patents, registered trademarks or other registered Intellectual
Property unless such individuals have been put on notice with respect to such
matters.

“Software” means the object and source code versions of computer programs and
associated documentation, training materials and configurations to use and
modify such programs, including programmer, administrator, end user and other
documentation including the Documentation, Object Code, and Source Code.

“Source Code” for Software means the source code programming statements and
instructions written by the programmer(s), including comments, remarks, and any
other documentation embedded within the source code, that are in human readable
form and not yet compiled into machine language, in electronic media or hard
copy form and related programmer-level documentation for the computer programs
that are sufficient to enable a competent programmer to understand all details
pertaining to the algorithms embodied in the operation of the computer programs
and other proprietary technology, together with any modifications, enhancements,
additions, upgrades, updates and derivatives thereof.

“Subsidiary” means, as to any specified Person, another Person, where an amount
of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such specified
Person.

 

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“Target Net Working Capital” means $150,000.00.

“Tax” means all federal, state, local, foreign and other income, gross receipts,
commercial activity, sales, use, production, ad valorem, transfer, documentary,
franchise, registration, profits, license, lease, service, service use,
withholding, payroll, employment, unemployment, estimated, excise, severance,
environmental, stamp, occupation, premium, property (real or personal), real
property gains, windfall profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatsoever imposed by a Governmental
Authority, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties.

“Tax Clearance Certificate” shall have the meaning specified in Section 9.13.

“Tax Return” means any return, declaration, report, claim for refund,
information return or statement or other document relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

“Technology” means all designs, formulas, algorithms, procedures, techniques,
ideas, know-how, Software, programs, models, routines, databases, tools,
inventions, creations, improvements, works of authorship, and all recordings,
graphs, drawings, reports, analyses, other writings, and any other embodiment of
the above, in any form, whether or not specifically listed herein.

“Third Party Claim” shall have the meaning specified in Section 11.4.2.

“Transferred Employees” shall have the meaning specified in Section 3.3.1.

1.2. Other Terms. Other terms may be defined elsewhere in the text of this
Agreement and, unless otherwise indicated, shall have such meaning throughout
this Agreement.

1.3. Other Definitional Provisions. The words “hereof”, “herein”, and
“hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

1.3.1. Terms defined in the singular shall have a comparable meaning when used
in the plural, and vice versa.

1.3.2. The terms “dollars” and “$” shall mean United States dollars.

1.3.3. As used herein: (i) the phrases “date of this Agreement” and “date
hereof” and any other phrases of similar import shall mean the date that first
appears in the Preamble at the top of page 1 of this Agreement; and (ii) unless
the context otherwise requires, the word “or” is not exclusive.

 

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ARTICLE 2

PURCHASE AND SALE OF ASSETS

2.1. Description of Purchased Assets. On the terms and subject to the conditions
herein expressed, the Company shall sell, convey, transfer, assign, set over and
deliver to Purchaser on the Closing Date, and Purchaser shall purchase and
accept, all of the assets, rights and interests (except the Retained Assets
hereinafter described and defined in Section 2.2 below) then owned, possessed or
operated by the Company and used, usable or intended for use in the operation of
the Business, tangible and intangible, of every kind, nature and description,
and wheresoever situated, whether or not any of the foregoing assets are carried
or reflected on the books of the Company as of the time of assignment, transfer
and conveyance to Purchaser, including without limitation the following:

2.1.1. Machinery and Equipment. All machinery, equipment, vehicles, computers
and computer hardware, product testing equipment, office furniture, trade
fixtures, leasehold or other improvements to real property and other fixed or
tangible assets, which are used, usable or intended for use in the operation of
the Business (the “Machinery and Equipment”);

2.1.2. Inventories. All inventories of the Company, including without limitation
merchandise, raw materials, work in process, finished goods, supplies, component
parts, including such items in the possession of contract manufacturers or other
third parties which are identified to contracts of the Company, production and
office supplies, stationery and other imprinted material, marketing and
promotional materials (whether stored electronically or electromagnetically, in
written form or otherwise) existing on the Closing Date which are used, usable
or intended for use in the operation of the Business (the “Inventories”);

2.1.3. Intangible Property. All Owned Intellectual Property, all rights in
internet web sites and internet domain names, all computer files of information
stored electronically or electromagnetically including those stored in memory or
on discs or other repositories, the right to receive mail and other
communications and shipments of merchandise addressed to the Company, all of the
Company’s right, title and interest in the name “MobileNet” and the goodwill
associated therewith, and the right to those telephone numbers listed on Exhibit
2.1.3;

2.1.4. Business Records. All data and records related to the Business, wherever
located and whether in tangible or electronic form, including but not limited to
lists of past, present and prospective customers and records, data and
information pertaining thereto which were or are used, usable or intended for
use in the operation of the Business, referral sources, research and development
reports and records, production reports and records, service and warranty
records, equipment logs, operating guides and manuals, financial and accounting
records, creative materials, advertising materials, promotional materials,
studies, reports, correspondence and other similar documents and records and
databases, files and records relating to the Transferred Employees, but
excluding the Retained Records;

 

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2.1.5. Prepaid Items. All deposits delivered to third parties by the Company
with respect to the Business (including without limitation those in respect of
any lease of real or personal property of the Business) or advances paid by the
Company with respect to the Business, including without limitation deferred
charges and other prepaid items (the “Prepaid Items”);

2.1.6. Contracts. All rights and benefits of or in favor of the Company
resulting or arising from any Contracts or Permits of the Company, regardless of
when accruing or accrued, including but not limited to those listed on Exhibit
2.1.6(a) (“Assumed Contracts”), except that any Contract which cannot be
transferred or assigned without the consent of a Governmental Authority or other
third party which consent the Company has not obtained prior to Closing as
provided in Section 5.3.9 shall be treated as provided in Section 8.9; and
except for rights under Contracts listed on Exhibit 2.1.6(b) (“Retained
Contracts”);

2.1.7. Insurance. Any insurance proceeds, and any rights thereto, paid before
the Closing or payable to the Company after the Closing Date pursuant to any
contract of insurance as a result of damage to or loss of any of the assets
owned or operated by the Company that are to be, or in the absence of loss would
otherwise have been, sold to Purchaser hereunder, but only if such damage or
loss results from an occurrence prior to the Closing and only to the extent such
assets are not replaced at the Company’s expense prior to the Closing;

2.1.8. Receivables. All amounts billed by the Company prior to the Closing Date
for services to be rendered by the Business after the Closing Date to the extent
not collected on or before the Closing Date (the “Assigned Receivables”);

2.1.9. Causes of Action. All rights to causes of action, lawsuits, judgments,
claims and demands of any nature in favor of the Company to the extent relating
to the Purchased Assets and Assumed Liabilities, or the Business, including
rights under guarantees, warranties, indemnities and similar rights in favor of
the Company;

2.1.10. Benefits of Non-Competes. All of the benefits of and the rights to
enforce the confidentiality, non-competition and non-solicitation covenants
under contracts with current or former employees of or consultants to the
Company, including but not limited to the Current Employees who do not become
Transferred Employees (the “Assigned Rights”); and

2.1.11. Other. Except for the Retained Assets (defined in Section 2.2 below),
all other interests to which the Company has any right by ownership, use or
otherwise, or in which the Company has a conveyable or assignable interest on
the Closing Date and the proceeds of any thereof, to the extent any such
interests are used, usable or intended for use in the operation of the Business.

The assets, properties and interests of the Company to be sold, conveyed,
transferred, assigned, set over and delivered to Purchaser at the Closing are
hereinafter sometimes called the “Purchased Assets.”

 

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2.2. Retained Assets Notwithstanding anything to the contrary contained in
Section 2.1 above, the Purchased Assets exclude the following assets, which
shall be retained by Sellers (the “Retained Assets”):

2.2.1. all cash, cash equivalents and short-term investments, except for any
insurance proceeds payable to Purchaser under Section 2.1.7 and Prepaid Items;

2.2.2. All rights to collect accounts receivable of the Company for which, and
to the extent, the Products or services were provided prior to the Closing Date
(the “Retained Receivables”);

2.2.3. Sellers’ rights and proceeds under this Agreement and any agreements,
certificates, or instruments to be executed hereunder;

2.2.4. The Company’s organizational documents, stockholder records, agreements
or instruments governing the internal affairs between the Company and its
stockholders, Plan records and files, databases and files and records relating
to employees or personnel matters (except those relating to Transferred
Employees) and all Tax Returns of the Company together with the records relating
thereto (the “Retained Records”);

2.2.5. The Company’s rights to and claims for any income and franchise tax
refunds and refunds of other Taxes paid prior to the Closing regardless of the
timing of filing of any related Tax Return;

2.2.6. All assets of, and rights in connection with, the Plans;

2.2.7. Except to the extent otherwise provided in Section 2.1.7, all insurance
policies and rights thereunder, including all insurance proceeds which the
Company has a right to receive based upon events, circumstances or occurrences
prior to the Closing;

2.2.8. All rights, claims and causes of action relating to any Retained Asset or
any Retained Liability; and

2.2.9. Those assets listed on Exhibit 2.2.9.

2.3. Reliance. Purchaser’s purchase of the Purchased Assets is made in full
reliance upon Sellers’ representations, warranties and covenants contained
herein, and in particular, Sellers’ warranties and representations as set forth
in Article 6 hereof.

ARTICLE 3

ASSUMPTION AND NON-ASSUMPTION OF LIABILITIES

3.1. Description of Assumed Liabilities. On the terms and subject to the
conditions of this Agreement, Purchaser shall assume as of the Closing Date, and
agree to pay and discharge in due course thereafter, and otherwise to perform in
accordance with their requirements, the following, and only the following,
debts, liabilities and obligations of the Company (the “Assumed Liabilities”)
but only to the extent they are not Retained Liabilities:

 

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3.1.1. deferred revenue obligations arising out of, accruing or resulting from
the operation of the Business, the sale of Products (including services), or the
use, ownership or operation of the Purchased Assets, in each case prior to the
Closing Date, but only to the extent that such current liabilities were incurred
in the Ordinary Course of Business and are included in the calculation of the
Closing Date Net Working Capital;

3.1.2. obligations accruing after the Closing Date in respect of the Assumed
Contracts which are assigned and transferred to, and assumed by, Purchaser at
Closing (other than liability arising out of or relating to a breach or default
occurring prior to the Closing Date); and

3.1.3. obligations to the Company’s customers under the written warranty policy
attached to Schedule 6.17.4 given by the Company to its customers in the
Ordinary Course of Business prior to the Closing Date in connection with
Products sold or manufactured by the Company prior to the Closing Date, but only
to the extent included in the calculation of the Closing Date Net Working
Capital; provided however, that the cost of satisfying any warranty claims
attributable to sales or Products manufactured prior to the Closing in excess of
$5,000 (the amount included in the calculation of the Closing Date Net Working
Capital) shall be borne by Sellers so long as the resolution of each such
warranty claim is subject to Sellers’ consent (not to be unreasonably withheld)
with the amount thereof to be paid by Sellers to the Purchaser first from the
Escrow Amount, if any, second by deduction from any amounts payable to Sellers
as provided in Section 4.4 if and to the extent finally determined but not yet
paid, or third by wire transfer or delivery of other immediately available U.S.
funds.

3.2. Non-Assumption of Liabilities. Notwithstanding the provisions of
Section 3.1, Assumed Liabilities expressly do not include the following
Liabilities of the Company (the “Retained Liabilities”); trade payables, account
payables, accrued expenses and other current liabilities arising out of,
accruing or resulting from the operation of the Business, the sale of Products
or the use, ownership or operation of the Purchased Assets, in each case, prior
to the Closing Date; all Taxes arising from or with respect to the Purchased
Assets or the operation of the Business that are incurred in or attributable to
any Pre-Closing Tax Period; any liability pursuant to any Environmental Law to
the extent arising from or relating to any action, event, circumstance or
condition occurring or existing on or prior to the Closing Date; any
Indebtedness or guarantees thereof outstanding as of the Closing Date (except
for obligations in respect of the Assumed Contracts to the extent assumed under
Section 3.1.2 above); any liability arising under the Assumed Contracts with
respect to any breach or default of the Company existing on or prior to the
Closing Date; any liability arising out of or related to Products of the Company
manufactured or sold prior to Closing, including product liability claims but
excluding warranty claims assumed by Purchaser pursuant to Section 3.1.4; any
Liability arising out of claims of infringement of any Intellectual Property to
the extent attributable to infringements for periods prior to Closing; any
Liability arising out of any Claim pending as of the Closing Date or arising out
of any act or omission of the Company prior to the Closing Date; any Liability
arising out of or resulting from the Company’s non-compliance with any Law or
any Order of any Governmental Authority; any liability relating to any
indemnification obligation of the Company with respect to its officers or
directors; any liability of the Company relating to the Contracts under which
Purchaser receives Assigned Rights under Section 2.1.10; all accrued but unpaid
performance bonuses owed to the Company’s employees, any liability or obligation
arising under any Retained Contract or Retained Asset; all obligations of the
Company under Section 3.3.3 and liabilities in connection therewith; and any
other debts, liabilities or obligations of the Company not expressly included in
the Assumed Liabilities.

 

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3.2.1. The Retained Liabilities shall remain the sole responsibility of and
shall be retained, paid, performed and discharged solely by Sellers and nothing
contained in this Agreement shall be construed as imposing, directly or
indirectly, on Purchaser any liability or obligation for such debts,
liabilities, or obligations of the Company.

3.3. Liabilities With Respect to Personnel Matters.

3.3.1. Employees. All employees currently employed by the Company in the
operation of the Business are listed on Schedule 3.3 (the “Current Employees”).
Purchaser shall offer employment to each of the Current Employees (other than
the Key Employee), contingent in each case upon the Current Employee passing
Purchaser’s customary background checks, with comparable salaries and comparable
benefits in the aggregate to other employees of Purchaser with comparable duties
and responsibilities (those Current Employees who pass the background check and
accept Purchaser’s offer shall be referred to herein as “Transferred
Employees”). Purchaser shall have the right to solicit the employment of the
Current Employees and any former employee of the Company prior to the Closing
and the Company shall use reasonable efforts to facilitate and to encourage the
Current Employees to accept any substantially similar offer of employment made
by Purchaser. Purchaser shall provide the Company with a list of all Current
Employees who rejected an offer of employment from Purchaser.

3.3.2. Unused Vacation. The Company shall be responsible for all payments
required under state law to the Company’s employees with respect to accrued but
unused paid time off days as a result of the transactions contemplated in this
Agreement. Accordingly, Transferred Employees shall have no unused paid time off
or sick days with the Purchaser as of the Closing Date.

3.3.3. Non-Assumption. The Company shall be solely responsible for satisfying
all legal obligations (whether arising under federal, state or local law or
pursuant to contract) in connection with the employment by the Company of its
employees prior or subsequent to the Closing Date, including without limitation
any claims alleging age, sex or other discrimination, sexual harassment,
violations of the Americans with Disabilities Act or similar type claims, and
its termination of any employees, whether in connection with the consummation of
the transactions contemplated by this Agreement or otherwise, and Purchaser
shall have no obligation to satisfy any such obligations. Purchaser shall not
assume, nor have any liability for or obligation to satisfy, any claims of the
Company’s employees for any wages, salaries, fringe benefits or other
compensation or benefits arising out of the employment by the Company of any
such employees, including, without limitation, current or accrued liabilities,
obligations or claims under or with respect to any pension, retirement, health
benefit or other employee benefit plan, severance pay or payments, change in
control or other similar bonus amounts, vacation and holiday pay or under any
worker’s compensation, unemployment compensation or disability benefit law or
any Liabilities of the Company arising by virtue of termination by the Company
of employment of any employees of Sellers prior to, in connection with, or
following the Closing. Sellers agree that the indemnification set forth in
Section 11.2 hereof extends to and includes any and all Losses arising or
incurred by reason of, or directly or indirectly resulting from, such
termination of employment or the nonassumption of any liability as provided in
this Section 3.3.

 

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3.3.4. Employee Benefit Plans. Purchaser will not adopt, continue in effect, or
assume any liability under, any Plan or Benefit Arrangement sponsored, created,
administered or participated in by the Company with respect to, or for the
benefit of, any of the Company’s employees and regardless of whether or not any
such liability, obligation or claim arises as the result of any termination of,
or withdrawal from, such Plan or Benefit Arrangement or by virtue of the
transactions described in, and which are the subject of, this Agreement. The
Company shall be responsible for all costs and expenses of sponsoring,
maintaining, or terminating the Plans and Benefit Arrangements of the Company.

3.3.5. Unemployment Insurance. Except to the extent necessary or advisable to
fulfill its obligations to any employee terminated by the Company and not
rehired by Purchaser, the Company shall use reasonable efforts to cooperate with
Purchaser to facilitate the transfer to Purchaser of any favorable account
balances that the Company may have with respect to any state unemployment
insurance.

3.3.6. Plan Participation. As of the Closing Date, all Transferred Employees
shall be eligible to participate in the employee benefit plans and arrangements
maintained by Purchaser, which are identified to each such Transferred Employee
in his or her offer letter from Purchaser, according to the terms of each such
plan. Purchaser shall give Transferred Employees full credit for purposes of
eligibility, vesting and benefit accrual (other than benefit accrual under any
defined benefit plan) under the employee benefit plans and arrangements
maintained by Purchaser in which such Transferred Employees participate for such
Transferred Employees’ service with the Company or its respective predecessors,
except to the extent such credit would result in a duplication of benefits. With
respect to any “welfare benefit plan” (as defined in Section 3(1) of ERISA)
maintained by Purchaser in which Transferred Employees are eligible to
participate, Purchaser shall waive any eligibility requirements or pre-existing
condition limitations and give effect, in determining any deductible and maximum
out-of-pocket limitations, to claims incurred and amounts paid by, and amounts
reimbursed to, such Transferred Employees with respect to similar plans
maintained by the Company.

ARTICLE 4

PURCHASE PRICE AND PAYMENT

4.1. Purchase Price. The purchase price (“Purchase Price”) for the Purchased
Assets shall equal the sum of the following, as adjusted as provided herein:

4.1.1. the Assumed Liabilities; plus

4.1.2. $3,500,000, subject to adjustment as provided in Section 4.3; plus

 

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4.1.3. the Closing ORBCOMM Stock; plus

4.1.4. if and when earned, the Earnout Amounts.

4.2. Payment of Purchase Price and Assumption of Assumed Liabilities. On the
Closing Date, the Purchaser shall assume the Assumed Liabilities and shall pay
or cause to be paid or deliver or cause to be delivered:

4.2.1. to the Company by bank wire transfer of immediately available funds to an
account designated in writing by the Company, an amount in cash equal to the sum
of the following:

4.2.1.1. $3,500,000 adjusted as provided in Section 4.3 (the “Closing Cash
Amount”); minus

4.2.1.2. the amount of any and all outstanding Indebtedness of the Company as of
the Closing Date as determined by the Purchaser and to the extent set forth on
the Certificate of Indebtedness;

4.2.2. to the Persons entitled thereto, all of the Indebtedness of the Company
as determined by the Purchaser and to the extent set forth on the Certificate of
Indebtedness;

4.2.3. the Escrow Amount into an escrow account pursuant to the terms of the
Escrow Agreement; and

4.2.4. to the Company, the Closing ORBCOMM Stock less the Escrow Amount.

4.3. Purchase Price Adjustments.

4.3.1. Not less than five (5) days prior to the Closing, the Company shall have
prepared and delivered to the Purchaser (i) a good faith estimate of the Net
Working Capital as of the close of business on the Closing Date, prepared in
accordance with GAAP for the Balance Sheet, except for the absence of footnotes
(such statement, the “Initial Closing Statement”), and (ii) a certificate of the
Company, (A) certifying that the Initial Closing Statement was prepared on the
basis described in clause (i) above and (B) containing the Company’s estimate of
the Net Working Capital as of the Closing Date (the “Estimated Net Working
Capital”). Commencing with Seller’s delivery of the Estimated Net Working
Capital to Purchaser, Purchaser shall have reasonable access to the books and
records and personnel of Seller and the opportunity to consult with Seller for
purposes of confirming or disputing the Estimated Net Working Capital. If
Purchaser shall disagree, in good faith, with any item set forth in the
Estimated Net Working Capital or used to determine the Estimated Net Working
Capital, then Purchaser and Seller shall work, in good faith, to reach agreement
on such disputed items and the amounts as agreed to by Purchaser and Seller
shall constitute the Estimated Net Working Capital. Notwithstanding the
foregoing, Purchaser’s agreement with the Estimated Net Working Capital (or any
item set forth therein or used to determine the Estimated Net Working Capital)
shall not foreclose, prevent, limit or preclude any rights or remedy of
Purchaser or Seller set forth in this Agreement.

 

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4.3.2. If (i) the Estimated Net Working Capital is less than the Target Net
Working Capital, the Closing Cash Amount shall be reduced by an amount equal to
such deficiency or (ii) the Estimated Net Working Capital is greater than the
Target Net Working Capital, the Closing Cash Amount shall be increased by an
amount equal to such excess. Such adjustment shall be calculated based on the
Initial Closing Statement and the certificate delivered pursuant to
Section 4.3.1 above. The adjustment made at Closing pursuant to this
Section 4.3.2 shall be subject to subsequent adjustment as provided in Sections
4.3.3., 4.3.4 and 4.3.5.

4.3.3. Within one hundred twenty (120) days after the Closing Date, the
Purchaser shall cause its accountants to prepare, at Purchaser’s expense, and
deliver to the Company a statement of the Net Working Capital as of the close of
business on the Closing Date prepared in the manner described in Section 4.3.1
(the “Final Closing Statement”). The Purchaser’s accountants shall permit the
Company’s accountants, subject to the execution by the Company and/or the
Company’s accountants of any customary release or indemnification agreement
required by the Purchaser’s accountants, at the earliest practicable date to
review and make copies of all work papers, schedules and calculations used in
the preparation thereof.

4.3.4. When the Purchaser delivers the Final Closing Statement, the Purchaser
shall also deliver to the Company a certificate (i) certifying that the Final
Closing Statement was prepared in accordance with the procedures set forth in
Section 4.3.3 above, and (ii) containing the Purchaser’s calculations, based on
the Final Closing Statement (the “Purchaser’s Proposed Calculations”), of the
Net Working Capital as of the Closing Date (the “Closing Date Net Working
Capital”). Within sixty (60) days after receipt of the Final Closing Statement
and the accompanying certificate, the Company shall notify the Purchaser of its
agreement or disagreement, as the case may be, with the Final Closing Statement
and the accuracy of any of the Purchaser’s Proposed Calculations. If the Company
disputes any aspect of the Final Closing Statement or the amount of any of the
Purchaser’s Proposed Calculations, then the Company shall have the right to
direct its independent accountants, at the Company’s expense, to review and test
the Final Closing Statement. The Company’s accountants shall complete their
review and test of the Final Closing Statement within thirty (30) days after the
date the Company disputes any of the Purchaser’s Proposed Calculations. If the
Company and its independent accountants, after such review and test, still
disagree with the Purchaser’s Proposed Calculations, the Company shall submit
its proposed alternative calculations (the “Company’s Proposed Calculations”) of
Closing Date Net Working Capital to the Purchaser in writing within forty-five
(45) days after the date upon which the Company shall have first notified the
Purchaser that it disputes any of the Purchaser’s Proposed Calculations. If the
Purchaser does not accept the Company’s Proposed Calculations within fifteen
(15) days after its receipt thereof, then within fifteen (15) days after the
Purchaser’s rejection of (or failure to timely accept) the Company’s Proposed
Calculations, the Company and the Purchaser shall select a mutually acceptable
and nationally recognized independent accounting firm, other than the Company’s
independent accountants and the Purchaser’s independent accountants (such firm,
the “Independent Accounting Firm”), to resolve the remaining disputed items (the
“Remaining Disputed Items”), within thirty (30) days after the date of the
Purchaser’s rejection of (or failure to timely accept) the Company’s Proposed
Calculations of the Remaining Disputed Items, by conducting its own review and
test of the Final Closing Statement and thereafter selecting either the
Purchaser’s Proposed Calculations of the Remaining Disputed Items or the
Company’s Proposed Calculations of the Remaining Disputed Items or an amount in
between the two. Prior to the

 

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selection of the Independent Accounting Firm, each of the parties shall disclose
to the other party any and all affiliations or significant relationship it may
have with any accounting firm that is proposed as the Independent Accounting
Firm hereunder. The Purchaser and the Company agree that they shall be bound by
the determination of the Remaining Disputed Items by the Independent Accounting
Firm. The fees and expenses of the Independent Accounting Firm shall be paid
jointly, one-half by the Purchaser and one-half by the Company; provided that,
if the difference between the Final Adjustment and the Final Adjustment that
would have resulted from the use of the proposed calculations of one of the
parties hereto (the “Erroneous Party”) is more than twice as great as the
difference between the Final Adjustment and the Final Adjustment that would have
resulted from the use of the other party’s proposed calculations, the Erroneous
Party shall pay all of the fees and expenses of the Independent Accounting Firm.

4.3.5. Upon the determination pursuant to Section 4.3.4 of the Final Closing
Statement and the Closing Date Net Working Capital, the Closing Cash Amount
shall be recalculated (the “Final Adjustment”) in accordance with Section 4.3.4
using the amount of the Closing Date Net Working Capital. If the Closing Cash
Amount as so calculated is less than the Closing Cash Amount initially
determined pursuant to Section 4.3.1, the Sellers shall promptly pay to the
Purchaser an aggregate amount equal to such difference by wire transfer or
delivery of other immediately available US funds within five (5) business days
after the date on which the Final Closing Statement is finally determined
pursuant to Section 4.3.4. If the Closing Cash Amount as so calculated is more
than the Closing Cash Amount initially determined pursuant to Section 4.3.1, the
Purchaser shall pay to the Company an amount equal to such excess by wire
transfer or delivery of other immediately available US funds within five
(5) business days after the date on which the Final Closing Statement is finally
determined pursuant to Section 4.3.4.

4.3.6. The Purchaser and the Company shall make good faith efforts to comply
with the timing and response requirement set forth in this Section 4.3, but, in
the absence of bad faith, neither party shall be deemed to be in breach of this
Agreement, or to have waived its rights under this Section 4.3, on the basis of
technical violations of timing or response requirements.

4.4. Earnout.

4.4.1. Earnout Statements. As promptly as practicable after the end of each
Earnout Period, but in no event later than ninety (90) days after the end of
each Earnout Period, the Purchaser shall prepare and deliver to the Sellers a
statement (the “Earnout Statement”) setting forth the MobileNet Service Revenues
for such Earnout Period. After the delivery of an Earnout Statement, the
Purchaser shall cooperate with Sellers in connection with the review of such
Earnout Statement, including, without limitation, providing Sellers and their
accountants with prompt and reasonable access to financial information of the
Business used in the preparation of such Earnout Statement.

4.4.2. Interim Statements. During each Earnout Period, the Purchaser shall
provide Sellers with quarterly calculations of MobileNet Service Revenues within
thirty (30) days after the end of each calendar quarter.

 

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4.4.3. Reasonable Efforts to Generate MobileNet Service Revenues. During the
Earnout Period, the Purchaser shall use commercially reasonable efforts to
market and sell the services of the Business in an attempt to continue to
increase MobileNet Service Revenues. For purposes of this Section 4.4.3,
“commercially reasonable efforts” shall mean those efforts and resources
normally used by the Purchaser for products or services offered by it, which are
of similar market potential at a similar stage in their life, taking into
account, without limitation, issues of safety and efficacy, services profile,
competitiveness of the market place, the proprietary position of the services,
development cycles, the regulatory environment and status of the services, the
profitability of the services and other relevant commercial factors. Sellers
acknowledge that Purchaser may not be successful in increasing MobileNet Service
Revenues and Purchaser will operate the Business after the Closing in its
discretion. Nothing in this Agreement creates a fiduciary duty on the part of
the Purchaser to Sellers in respect of any Earnout Amounts, if and when earned.
The right of Sellers to the Earnout Amounts, if any, shall not be represented by
a certificate or other instrument, shall not represent an ownership interest in
Purchaser or the Business and shall not entitle Sellers to any rights common to
any holder of any equity security of Purchaser or its Affiliates.

4.4.4. Dispute Resolution. Within forty-five (45) days following receipt by the
Company of an Earnout Statement, Sellers shall deliver written notice (a “Notice
of Disagreement”) to the Purchaser of any dispute they have with respect to the
preparation or content of such statement; provided, however, that Purchaser
shall promptly respond to reasonable requests for additional information made by
Sellers within the first thirty (30) days of such 45-day period. A Notice of
Disagreement must describe in reasonable detail any and all items contained in
such Earnout Statement that Sellers dispute and the basis for any such dispute
and may indicate that Sellers do not have sufficient information to make their
own calculations. Any items not disputed in the Notice of Disagreement will be
deemed to have been accepted by Sellers. If Sellers do not deliver a Notice of
Disagreement with respect to such Earnout Statement within such forty-five-day
period, such statement will be final, conclusive and binding on the parties. In
the event that Sellers deliver a timely Notice of Disagreement, the Purchaser
and Sellers shall negotiate in good faith to resolve such dispute. If the
Purchaser and Sellers, notwithstanding such good faith effort, fail to resolve
such dispute within thirty (30) days after Sellers deliver a Notice of
Disagreement, then the Purchaser and Sellers, jointly, shall engage the
Independent Accounting Firm to resolve such dispute. In resolving such dispute,
the Independent Accounting Firm shall (i) consider only those items that are in
dispute, (ii) choose one of the parties’ positions or an amount between the two
parties’ positions (unless Sellers are unable to make a calculation based on the
information provided to them, in which case, the Independent Accounting Firm
shall make its own calculation), and (iii) not modify any element of such
Earnout Statement that is not disputed by the parties. All determination made by
the Independent Accounting Firm will be final, conclusive and binding on the
parties. The fees and expenses of the Independent Accounting Firm shall be
divided equally between the Purchaser and Sellers.

 

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4.4.5. If MobileNet Service Revenues for any Earnout Period are in excess of
$1,058,000.00, then the Purchaser shall pay to the Company an amount equal to
(i) fifty percent (50%) of the first $2,000,000 of such excess amount for such
Earnout Period and (ii) thirty-five percent (35%) of any amount of such excess
amount for such Earnout Period which is greater than $2,000,000 (as finally
determined pursuant to Section 4.4.4, the “Earnout Amounts”). Up to fifty
percent (50%) of such payments of the Earnout Amounts, if and when earned, may
be paid in shares of Purchaser common stock (at the Purchaser’s option) valued
at the 20-day trailing average closing price for the 20 trading days ending on
the last trading day of the Earnout Period in question on the NASDAQ exchange,
with the balance payable in cash by wire transfer or delivery of other
immediately available U.S. funds. The amount payable in accordance with the
Earnout Statement delivered by Purchaser pursuant to Section 4.4.1 shall be
payable within five (5) business days after the date the Earnout Statement is
delivered to Sellers pursuant to Section 4.4.1. Any additional amount determined
to be payable upon agreement of the parties or resolution of a dispute as
provided above shall be payable within five (5) business days after the date on
which MobileNet Service Revenues for such Earnout Period are finally determined
pursuant to Section 4.4.4. Any stock delivered pursuant to this Section 4.4
shall be deemed to have been issued as of the last day of the Earnout Period for
purposes of SEC Rule 144. Any cash portion of the Earnout Amounts not paid
within five (5) business days after the date the Earnout Statement is delivered
to Sellers pursuant to Section 4.4.1 shall bear interest at a rate per annum
equal to the prime rate as published in the Wall Street Journal plus two percent
(2%) from the date due until the date paid.

4.5. Receivables. If, after the Closing Date, the Company shall receive any
remittance from any account debtors with respect to the Assigned Receivables,
the Company shall forward such remittance to the Purchaser; and if the Purchaser
shall receive any remittance from any account debtors with respect to the
Retained Receivables, the Purchaser shall send the remittance to the Company.

4.6. Allocation of Purchase Price. Purchaser and Sellers agree that the Purchase
Price shall be allocated among the Purchased Assets for Tax purposes in
accordance with the principles set forth on Schedule 4.6. A draft of the final
allocation of Purchase Price proposed by Purchaser for Tax purposes (the
“Allocation Schedule”) shall be prepared by Purchaser and delivered to Sellers
prior to the end of the year in which the Closing Date falls. If Sellers notify
Purchaser in writing that Sellers object to one or more items reflected in the
Allocation Schedule, Sellers and Purchaser shall negotiate in good faith to
resolve such dispute; provided, however, that if Sellers and Purchaser are
unable to resolve any dispute with respect to the Allocation Schedule within
thirty (30) days following receipt of the draft Allocation Schedule, such
dispute shall be resolved by the Independent Accounting Firm consistent with the
principles set forth in Schedule 4.6. The fees and expenses of the Independent
Accounting Firm shall be borne equally by Sellers and Purchaser. Purchaser and
Sellers shall file all Tax Returns (including amended returns and claims for
refund), information reports, and IRS Form 8594 and any similar forms required
by any other Governmental Authority in a manner consistent with the Allocation
Schedule. Any adjustments to the Purchase Price herein shall be allocated
pursuant to Treasury Regulation Section 1.1060-1(e)(1)(ii)(B) in a manner
consistent with the Allocation Schedule.

4.7. ORBCOMM Stock.

4.7.1. Each stock certificate, book-entry statement, confirmation, transaction
statement or other instrument evidencing ORBCOMM Stock issued pursuant to this
Agreement shall bear a legend in substantially the following form unless
Purchaser determines otherwise in compliance with applicable Laws:

 

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“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE ISSUER OF THESE SHARES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER, ASSIGNMENT OR OTHER DISPOSITION IS IN COMPLIANCE WITH THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”

4.7.2. Sales under Rule 144. The Purchaser agrees to reasonably cooperate with
Sellers upon their sale of any shares of ORBCOMM Stock under SEC Rule 144. In
that regard, the Purchaser shall cause its in-house counsel to promptly issue
opinion letters to Purchaser’s transfer agent to clear the stock for transfer
upon presentation of customary Rule 144 paperwork and Sellers’ compliance with
the requirements of Rule 144. Such cooperation shall be without charge by
Purchaser or Purchaser’s counsel to Sellers.

4.7.3. Cooperation for Block Trades. Upon request of Sellers, the Purchaser
shall use good faith reasonable efforts to facilitate a block sale of portions
of Sellers’ ORBCOMM Stock on terms mutually agreeable to Sellers and the
purchasers of such stock. Sellers shall be responsible for all third party fees
and legal compliance associated with any such block sale.

4.7.4. Removal of Restrictive Legend. Upon request of Sellers, the Purchaser
shall cause all restrictive legends to be removed from the stock certificates
representing the ORBCOMM Stock consistent with the SEC rules (that is, if the
Sellers are not affiliates of Purchaser and have held the stock for at least one
year) upon presentation of customary Rule 144 paperwork and Sellers’ compliance
with the requirements of Rule 144 and without charge by Purchaser or Purchaser’s
counsel to Sellers.

4.7.5. Cooperation with respect to Transfer of Shares. Upon request of Sellers,
subject to the terms of the Escrow Agreement and applicable securities laws, the
Purchaser shall reasonably cooperate with Sellers to cause all or any portion of
the ORBCOMM Stock to be transferred to the Stockholder, without charge by
Purchaser or Purchaser’s counsel to Sellers.

4.8. Withholding Tax. Purchaser shall be entitled to deduct and withhold from
the Purchase Price all Taxes that Purchaser may be required to deduct and
withhold under any provision of Tax Law. All such withheld amounts shall be
treated as delivered to Company hereunder.

 

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ARTICLE 5

THE CLOSING

5.1. The Closing. The closing of the transactions contemplated in this Agreement
(“Closing”) shall take place via telecommunications equipment at 10:00 a.m.,
EST, on the 2nd business day after the conditions to Closing have been satisfied
and fulfilled, unless the parties otherwise mutually agree in writing upon some
other date or time, or designate a physical location. On the Closing Date, each
of the parties shall execute and deliver by facsimile or other electronic means
each of the documents to be delivered hereunder. This Agreement and each of the
documents to be delivered hereunder, to the extent signed and delivered by means
of a facsimile machine or other electronic delivery of an image file reflecting
the execution hereof, shall be considered to have the same binding legal effect
as if it were the original signed version thereof delivered in person. As soon
as practicable following the Closing, each party shall deliver original forms of
the executed agreements to the other party. Purchaser and Sellers agree to use
diligent efforts to close the transactions contemplated in this Agreement as
soon as possible.

5.2. Closing Date. For purposes of this Agreement, the term “Closing Date” shall
mean 11:59 p.m. on the day of Closing.

5.3. Deliveries by Sellers. At Closing, Sellers shall deliver the following to
Purchaser:

5.3.1. such instruments or bills of sale, conveyance, transfer, assignment, or
endorsement as will be required or as may be desirable to vest in Purchaser, its
successors and assigns, all right, title and interest in and to the Purchased
Assets, free and clear of Liens other than Permitted Liens, and patent,
trademark and copyright assignments in such form as Purchaser may reasonably
request;

5.3.2. possession and control of all of the files, documents, papers,
agreements, books of account and records pertaining to the Purchased Assets and
the Business, provided that when such items also pertain to Retained Assets
furnishing true and correct copies of such items shall be sufficient;

5.3.3. a certificate executed by the Stockholder to the effect that conditions
set forth in Sections 9.1 and 9.2 have been satisfied, and affirming that the
representations and warranties of Sellers are true and correct, as provided in
Section 9.1;

5.3.4. actual possession and operating control of the Purchased Assets;

5.3.5. all agreements, documents, consents, approvals, orders and the other
instruments referenced in Article 9.

5.3.6. copies, certified by the Stockholder, of stockholder and Board of
Director resolutions of the Company authorizing the execution, delivery and
performance of this Agreement and all actions necessary or desirable to
consummate the transactions contemplated herein;

 

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5.3.7. pay-off letters and lien discharges (or agreements therefor) satisfactory
to Purchaser from each creditor listed on the Certificate of Indebtedness;

5.3.8. an Assignment and Assumption Agreement in form reasonably satisfactory to
Sellers with respect to each lease together with an estoppel certificate
executed by each lessor of the Leased Real Property in form reasonably
acceptable to Purchaser; and

5.3.9. the notices to, permits, authorizations, approvals, consents and waivers
from any Governmental Authority and all third party consents, including the
consents and assignments relating to Assumed Contracts and Assigned Rights,
listed on Exhibit 9.5, subject to Section 8.9.

5.4. Deliveries by Purchaser. At Closing, Purchaser shall deliver the following
to Sellers:

5.4.1. the items required to be paid or delivered as set forth in Section 4.2;

5.4.2. such instruments of assumption and other documents, to effect Purchaser’s
assumption of the Assumed Liabilities as Sellers may reasonably request;

5.4.3. a certificate executed by an officer of Purchaser to the effect that the
conditions set forth in Sections 10.1 and 10.2 have been satisfied and affirming
that the representations and warranties of Purchaser are true and correct as
provided in Section 10.1;

5.4.4. copies, certified by an officer of Purchaser, of resolutions of
Purchaser’s Board of Directors authorizing the execution, delivery and
performance of this Agreement and all actions necessary or desirable to
consummate the transactions contemplated herein; and

5.4.5. all agreements, documents, consents, approvals, orders and other
instruments referenced in Article 10.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF SELLERS

Except as set forth in the correspondingly numbered Schedule delivered by
Sellers to the Purchaser in connection herewith (provided that any information
disclosed in the Schedules under any numbered Schedule will be deemed to be
disclosed and incorporated into any other numbered Schedule where such
disclosure would be appropriate and reasonably apparent on its face without
further investigation), Sellers, jointly and severally, hereby represent and
warrant to Purchaser, as follows:

6.1. Due Organization and Authority; Subsidiaries. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Georgia and has all requisite corporate power and authority to own,
lease and operate its assets and properties and to carry on its business as now
being and heretofore conducted. No shares of capital stock or other securities
of any other Person are included in the Purchased Assets.

 

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6.2. Qualification. The Company is duly qualified or otherwise authorized as a
foreign corporation to transact business and is in good standing in each state
or other jurisdiction set forth in Schedule 6.2, which are the only
jurisdictions in which the nature of the business of the Company or the
ownership or leasing of properties by the Company makes such authorization
necessary; except where the failure to be so duly qualified or in good standing
would not, and would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect.

6.3. Organizational Documents and Company Records. Sellers have heretofore
delivered to Purchaser true and complete copies of the Certificate of
Incorporation certified by the Secretary of State of Georgia and the current
Bylaws of the Company. The minute book(s) of the Company which have been made
available to Purchaser for its inspection. The stock records of the Company
which have been made available to Purchaser for its inspection are true and
complete in all material respects.

6.4. Financial Statements. The balance sheets of the Company as of December 31,
2012 and December 31, 2011 and the related statements of operations for the
years then ended, which have been prepared by the Company and delivered to
Purchaser, present fairly in all material respects the financial condition of
the Company as of such dates and the results of operations of the Company for
the years then ended, in each case in accordance with the tax method of
accounting used by the Company in filing its income tax returns and are
consistent with the Company’s books and records. The foregoing financial
statements of the Company as of December 31, 2012 and December 31, 2011 and for
the years then ended are sometimes herein called the “Financial Statements,” the
balance sheet as of December 31, 2012 included in the Financial Statements is
sometimes herein called the “Balance Sheet” and December 31, 2012 is sometimes
herein called the “Balance Sheet Date.” The unaudited balance sheet of the
Company as of February 28, 2013 (and the related income statement for the two
(2) months then ended), which have been delivered to Purchaser present fairly in
all material respects the financial condition of the Company as at such date and
the results of operations of the Company for the two (2) months then ended, in
each case in conformity with the tax method of accounting used by the Company in
filing its income tax returns applied on a basis consistent with that of the
Financial Statements subject to the normal year-end adjustments consistent with
past practice. The foregoing unaudited financial statements of the Company as of
February 28, 2013, and for the two (2) months then ended are sometimes herein
called the “Interim Financials,” the balance sheet included in the Interim
Financials is sometimes herein called the “Interim Balance Sheet” and
February 28, 2013 is sometimes herein called the “Interim Balance Sheet Date”.

6.5. Authority to Execute and Perform Agreement. The Company has the legal
right, corporate power and all corporate authority and approvals required to
execute and deliver this Agreement and to perform fully its obligations
hereunder. Each of this Agreement and each of the other agreements being
delivered by Sellers at the Closing have been duly authorized by all necessary
corporate action and have been or will have been duly executed and delivered by
Sellers and (assuming the due authorization, execution and delivery hereof by
Purchaser) are or will be when executed and delivered valid and binding
obligations of Sellers enforceable in accordance with its terms.

 

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6.5.1. Except as set forth on Schedule 6.5, the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby will not (i) violate any provision of the
Certificate of Incorporation or Bylaws of the Company or any agreement between
the Company and all or any of its stockholders; (ii) require the Company to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any Governmental Authority or any other Person, (iii) violate,
conflict with or result in the breach of any of the terms of, result in a
material modification of, otherwise cause the termination of or give any other
contracting party the right to terminate, cancel or accelerate any obligation or
to receive any material benefit under or constitute (or with notice or lapse of
time or both would constitute) a default under any material Contract, or result
in the creation of any Lien upon the Purchased Assets; (iv) violate any Order
against, or binding upon, the Company or its properties or Business; or
(v) violate any Law.

6.6. Absence of Certain Liabilities. The Company has no Liabilities required to
be disclosed on its Financial Statements in accordance with the tax method of
accounting and to Sellers’ Knowledge has no other Liabilities except for
Liabilities disclosed herein, in the Financial Statements, the Interim
Financials or for those Liabilities that were incurred in the Ordinary Course of
Business since the Interim Balance Sheet Date.

6.7. Absence of Certain Changes or Events. Except as set forth on Schedule 6.7
since December 31, 2011, there has not been:

6.7.1. an amendment to the Company’s Certificate of Incorporation or Bylaws, or
merger with or into or consolidation with any person, or change or agreement to
change in any material manner the character of the Business;

6.7.2. a waiver of any material right under any Contract except in the Ordinary
Course of Business;

6.7.3. any loan or advance made to any of the Company’s stockholders, officers,
directors, employees, consultants, agents or other representatives (other than
travel and expense advances made in the Ordinary Course of Business), or any
other loan or advance made otherwise than in the Ordinary Course of Business;

6.7.4. any documents or written representations filed by the Company with the
United States Patent and Trademark Office or the patent or trademark office of
any foreign country;

6.7.5. any material changes to the Company’s Business policies, including, but
not limited to advertising, marketing, pricing, purchasing, personnel, sales,
budget or product acquisition policies;

 

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6.7.6. any payment, direct or indirect, of any of the Company’s Liabilities more
than thirty (30) days before the same became due in accordance with its terms or
otherwise than in the Ordinary Course of Business;

6.7.7. any material loss (whether by damage or destruction, in the nature of a
casualty loss or otherwise, and whether covered by insurance or not) affecting
any Purchased Asset;

6.7.8. any actual or threatened strike or other material labor trouble or
dispute;

6.7.9. any loss or threatened loss (in writing) of any material Permit enjoyed
or formerly held or enjoyed by the Company or the Business;

6.7.10. to Sellers’ Knowledge, any Law or Order adopted or rescinded which would
reasonably be expected to have a Material Adverse Effect;

6.7.11. the creation or imposition of any Lien upon any of the Purchased Assets,
except for Permitted Liens;

6.7.12. any sale, transfer or other disposition of any material asset of the
Business, excluding sales of Inventory or Products in the Ordinary Course of
Business, or any cancellation of any material debt or claim of the Business,
except in the Ordinary Course of Business;

6.7.13. any material increase in, or any commitment to materially increase (oral
or written), (i) the compensation or other direct or indirect remuneration
payable to any officer or employee of the Business, (ii) any bonus, incentive or
deferred compensation, profit sharing, retirement, pension, group insurance,
death benefit or other fringe benefit plan, trust agreement or arrangement, or
(iii) the benefits payable under any employment or consulting agreement other
than (A) any such contributions to a Plan or Benefit Arrangement that are
regularly scheduled or are required pursuant to the terms of such Plan or
Benefit Arrangement or by applicable law, or (B) any such increases in the
Ordinary Course of Business;

6.7.14. any termination (whether by discharge, retirement or otherwise) of any
officer or employee of the Business or any notice to so terminate given to or
received by any of the foregoing;

6.7.15. any termination or failure to renew, or receipt of a written threat to
terminate or refusal to renew any material contract between the Company and any
customer or material supplier of goods or services to the Business;

6.7.16. any engagement by the Business in any other material transaction other
than in the Ordinary Course of Business;

6.7.17. any material change in or material noncompliance with any accounting
principle or practice of the Company;

6.7.18. except for Retained Liabilities, any indebtedness, liability or
obligation (whether absolute, accrued, contingent or otherwise) incurred by the
Company or the Business or any transaction entered into by the Company or the
Business, other than in the Ordinary Course of Business, or any material
guarantee by the Company or the Business of any indebtedness, liability or
obligation of any other person;

 

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6.7.19. any material capital expenditure, addition or improvement made or
committed to be made by or on behalf of the Business with respect to any single
expenditure, addition or improvement of the Business;

6.7.20. any write-off as uncollectible of any Receivables other than in the
Ordinary Course of Business; or

6.7.21. any agreement or commitment by the Company or the Business to do any of
the foregoing;

6.7.22. any Material Adverse Change.

6.8. Title to Assets and Properties; Condition.

6.8.1. Except as set forth in Schedule 6.8.1, the Company has good title to all
interests in the Purchased Assets which it purports to own, free and clear of
all Liens except Permitted Liens. Except as set forth in Schedule 6.8.1, the
Purchased Assets are all of the assets, properties and agreements which are used
in or are reasonably necessary to carry on the Business and operations as
presently conducted. None of the Sellers other than the Company owns any assets
which are used in or are reasonably necessary to carry on the Business and
operations as presently conducted. This Section 6.8.1 does not relate to
Intellectual Property, such items being the subject of Section 6.10.

6.8.2. The furniture, fixtures, leasehold improvements, equipment and personal
property of the Business are in good operating condition and repair, ordinary
wear and tear excepted.

6.9. Permits and Licenses. The Company has all Permits and has made all required
registrations with any Governmental Authority that are necessary for the conduct
of the Business as presently conducted, including, without limitation, all
Permits that are necessary to manufacture and sell the Products in all markets
where they are currently sold by the Company or to comply with Environmental
Laws. All Permits currently issued to the Company are listed on Schedule 6.9 and
are in full force and effect. Schedule 6.9 indicates which, if any, Permits are
transferable. The Company is in material compliance with the terms of the
Permits and no proceeding is pending or, to Sellers’ Knowledge, threatened to
revoke, suspend, modify or limit any Permit. To Sellers’ Knowledge, no Permit
listed on Schedule 6.9 will be subject to revocation, suspension, modification
or limitation as a result of this Agreement or consummation of the Asset Sale.
By making the representations in this Section 6.9, Sellers are not assuming any
responsibility for what Permits may be required for Purchaser’s operation of the
Business after the Closing Date. By making the representations in this
Section 6.9, Sellers are not assuming any responsibility for what Permits may be
required for Purchaser’s operation of the Business after the Closing Date.

 

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6.10. Intellectual Property.

6.10.1. Set forth in Schedule 6.10.1 is an accurate and complete list of (i) all
Owned Intellectual Property that is registered or is the subject of a pending
application for registration, indicating for each the registration or
application number, filing jurisdiction, and date of issue or filing, (ii) all
agreements with respect to which the Company received any royalties or similar
payments with respect to Owned Intellectual Property, (iii) all material
unregistered trademarks or service marks and material unregistered copyrights,
and (iv) all invention disclosures.

6.10.2. Set forth in Schedule 6.10.2 is an accurate and complete list of all
Intellectual Property, Technology and Software licenses that are currently in
effect and licensed from a third party and currently used in connection with
conduct of the Business by the Company (the “Licenses In”), excluding Software
licenses that can be purchased from wholesale or retail distributors for less
than $5,000 per year and so called “shrink wrap” licenses and other licenses
accepted by the Company online without saving a separate written copy; and the
Company has delivered to Purchaser copies of all agreements granting or relating
to any License In other than those for Software licenses that can be purchased
from wholesale or retail distributors for less than $5,000 per year and so
called “shrink wrap” licenses and other licenses accepted by Sellers online
without saving a separate written copy.

6.10.3. Set forth in Schedule 6.10.3 is an accurate and complete list of all
currently effective licenses permitting a third party to use any portion of the
Owned Intellectual Property (the “Licenses Out”); and the Company has delivered
to Purchaser copies of all agreements granting or related to any License Out. No
governmental or private entity has a license or other rights in any Owned
Intellectual Property by virtue of having provided funding for its development.

6.10.4. Set forth in Schedule 6.10.4 is a list of all contracts or agreements to
which the Company is a party, not otherwise listed in Schedules 6.10.1, 6.10.2,
or 6.10.3, that govern, define or limit the Company’s rights to sell, license or
transfer, or govern or limit the Company’s use, exploitation, development, or
commercialization of, any Owned Intellectual Property.

6.10.5. Set forth in Schedule 6.10.5 is an accurate and complete list of all
Products.

6.10.6. Except as disclosed in Schedule 6.10.6:

6.10.6.1. The Company owns the Owned Intellectual Property free and clear of any
Liens (other than Permitted Liens), and to Sellers’ Knowledge, free of claims or
rights of third parties (including without limitation the right of any other
party to grant a license with respect to any Owned Intellectual Property) and
the Company owns or has and can and will upon Closing transfer to Purchaser
sufficient rights in the Owned Intellectual Property to operate the Business as
currently conducted;

 

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6.10.6.2. To the Sellers’ Knowledge, no third party is infringing, violating,
misusing or misappropriating any Owned Intellectual Property and no such claims
have been made by any third party in writing to the Company.

6.10.6.3. No claim of invalidity, misappropriation or ownership with respect to
the Owned Intellectual Property has been received in writing by the Company from
any third party and no Owned Intellectual Property is the subject of any pending
or, to the Sellers’ Knowledge, threatened action to such effect. There exists no
prior act of the Company or, to Sellers’ Knowledge, any third party that would
void, invalidate, or render unenforceable any of the Owned Intellectual Property
and there exists no conduct or use by the Company or, to Sellers’ Knowledge, any
third party that would void, invalidate, or render unenforceable any of the
Owned Intellectual Property. There is no “Joint Intellectual Property” (as
defined in the agreements between the Sellers and Terex Corporation and its
affiliates) which is used in or is reasonably necessary to carry on the Business
and operations as presently conducted.

6.10.6.4. No person or entity has asserted in a writing received by the Company
that, with respect to any Owned Intellectual Property or the Products, the
Company or any licensor or licensee of the Company is infringing or has
infringed any domestic or foreign patent, trademark, service mark, trade name,
trade dress or copyright or design right, or has misappropriated or improperly
used or disclosed any trade secret, confidential information or know-how. To
Sellers’ Knowledge, the making, using, selling, manufacturing, marketing,
licensing, reproduction, distribution, disposal, modification, display,
transmission or publishing of any process, composition of matter, or material
related to any part of the Owned Intellectual Property or the Products, does not
infringe any domestic or foreign patent, trademark, service mark, trade name, or
copyright registered under applicable Law by a third party, or, to Sellers’
Knowledge, any moral right or other intellectual property right of any third
party, and to Sellers’ Knowledge, does not involve the misappropriation or
improper use or disclosure of any trade secrets, confidential information or
know-how of any third party. Any claim under Section 11.2(i) resulting from a
Third Party Claim that the Owned Intellectual Property or Products infringe the
intellectual property rights of any third party may only be based on a breach of
any representation or warranty made under Section 6.10.6.1, 6.10.6.3 or
6.10.6.4.

6.10.6.5. All fees, annuities, royalties, honoraria and other payments which are
due from the Company on or before the date of this Agreement for any of the
Owned Intellectual Property, any License In or under any agreement related to
the Intellectual Property have been paid.

6.10.6.6. All fees, annuities, royalties, honoraria, or other payments which are
due to the Company on or before the date of this Agreement under any License Out
have been paid and, to Sellers’ Knowledge, no licensee is currently in default
under any License Out.

6.10.6.7. The Purchased Assets will provide Purchaser, as of the Closing Date,
with rights in Intellectual Property sufficient to permit Purchaser to operate
the Business in substantially the same manner as it is presently conducted by
the Company, including without limitation the design, manufacture, testing, sale
or distribution of the Products as presently conducted. None of the Sellers
other than the Company owns any Intellectual Property which is used in or is
reasonably necessary to carry on the Business and operations as presently
conducted.

 

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6.10.6.8. All of the Owned Intellectual Property was developed (i) by employees
of the Company or its predecessors within the scope of their employment or as a
work for hire at the time of such development or pursuant to executed
instruments of assignment or other applicable documents that have the effect
under applicable law of assigning to the Company or vesting ownership in the
Company of the subject Owned Intellectual Property or (ii) by officers,
directors, agents, consultants, independent contractors, subcontractors or
others who have executed appropriate instruments of assignment in favor of the
Company or its predecessors that as assignee have transferred to the Company or
its predecessors ownership of the subject Owned Intellectual Property. In the
case of Owned Intellectual Property developed for or assigned to a predecessor
of the Company, such predecessor has validly executed instruments of assignment
or other applicable documents that have the effect under applicable law of
assigning to the Company or vesting ownership in the Company of the subject
Owned Intellectual Property. No present or former employee has any right, title
or interest, directly or indirectly, in whole or in part in any Owned
Intellectual Property.

6.10.6.9. The execution, delivery and performance of this Agreement by Sellers,
and the consummation of the transactions contemplated hereby, will not breach,
violate or conflict with any instrument or agreement relating to the Owned
Intellectual Property to which any Seller is a party, will not cause the
forfeiture or termination or give rise to a right of forfeiture or termination
of any of the Owned Intellectual Property or in any way impair the right of the
Company to make, use, sell, license or dispose of, distribute, modify, display
or transmit or to bring any action for the infringement of, any Owned
Intellectual Property.

6.10.6.10. The Company has taken commercially reasonable and appropriate steps
to comply with marking and notice requirements imposed under applicable Law and,
to Sellers’ Knowledge, no such rights, including any rights to prevent third
parties from using Owned Intellectual Property, has been lost, or is reasonably
expected to be lost, through failure to so act by the Company. The Company has
taken commercially reasonable and appropriate steps to safeguard and maintain
the secrecy and confidentiality of all material trade secrets, and to the extent
required by applicable Law, patent applications and their related inventions
prior to the issuance of a patent registration contained in the Owned
Intellectual Property (including entering into appropriate confidentiality and
nondisclosure agreements with all appropriate officers, stockholders, directors,
employees of the Company and any third-parties to which the same have been
disclosed). The Company has taken reasonable and appropriate steps to safeguard
and maintain ownership of all trade secrets, copyrights and patents contained in
the Owned Intellectual Property (including entering into appropriate agreements
with all officers, stockholders, directors, employees and third-party
consultants of the Company as necessary to safeguard, maintain and vest
ownership of such rights in the Company).

 

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6.10.6.11. The Software included in Owned Intellectual Property: (i) is not
dependent on any Software (other than Software included in Owned Intellectual
Property) in order to operate in the manner for which it is intended; and
(ii) except as stated in Schedule 6.10.6, is not licensed, in whole or in part,
pursuant to an open source Software license. Except as stated in Schedule
6.10.6, none of the Software developed by or on behalf of the Company for use in
the Business and included in the Owned Intellectual Property (the “Developed
Software”) incorporates any open source Software or freeware, nor is any
Developed Software based upon any Software that is licensed pursuant to an open
source license, nor is any open source Software used by the Company in a manner
that requires contribution of any portion of any Software or Product to any
third party, including to the open source Software community. There are no
defects in the Developed Software, and, to Sellers’ Knowledge, no defects in the
Software licensed by the Company from third parties that, in either such case,
would prevent or materially impair the ability of Purchaser to conduct the
Business as of the Closing Date as such Business is currently conducted by the
Company. To Sellers’ Knowledge, there are no viruses, worms, Trojan horses or
similar harmful code in the Developed Software, and, to Sellers’ Knowledge, no
viruses, worms, Trojan horses or similar harmful code in the Software licensed
by the Company from third parties. Except as stated in Schedule 6.10.6, the
Company owns all of the Source Code and Object Code comprising the Developed
Software.

6.10.7. The Company is not subject to any agreement prohibiting or restricting
its right to use the data generated or transmitted over the Company’s network,
including without limitation the right to aggregate, analyze and commercialize
the data and products derived therefrom, without any payment to or consent of
any other Person.

6.11. No Conflict of Interest. Except as set forth in Schedule 6.11, no
stockholder or director of the Company and, to Sellers’ Knowledge, no member,
general partner, manager, director, stockholder, or Affiliate of any stockholder
of the Company:

6.11.1. owns, directly or indirectly, any interest in (excepting less than 5%
stock holdings for investment purposes in securities of publicly held and traded
companies), or is an officer, employee or consultant of, any person which is, or
is engaged in business as, a lessor, lessee, supplier, distributor, sales agent
or customer of the Business;

6.11.2. owns, directly or indirectly, in whole or in part, any property with a
fair market value greater than $10,000 that the Company uses in the conduct of
the Business, including, without limitation, any Intellectual Property;

6.11.3. has any cause of action for greater than $10,000 or other claim for
greater than $10,000 against, or owes an amount greater than $10,000 to, the
Business, except for claims in the Ordinary Course of Business such as for
accrued vacation pay, accrued benefits under employee benefit plans, travel
allowances and similar matters and Contracts existing on the date hereof;

6.11.4. has any Contract with, or any outstanding loan to or from, the Business
each in an amount greater than $10,000; or

6.11.5. has any interest in the Purchased Assets with a fair market value
greater than $10,000, including without limitation, any Intellectual Property or
Technology.

 

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6.12. Labor Relations; Officers and Employees. The Company is not a party to, or
engaged in negotiating, any collective bargaining agreement. The Company is not
the subject of any claim which is pending or, to Sellers’ Knowledge, threatened
asserting that the Company has discriminated or committed an unfair labor
practice (within the meaning of the National Labor Relations Act or applicable
state or foreign statutes) or seeking to compel the Company to bargain with any
labor organization as to wages and conditions of employment. No strike or other
labor dispute involving the Company is pending or, to Sellers’ Knowledge,
threatened, and there is no activity involving any employees of the Company
seeking to certify a collective bargaining unit or engaging in any other
organization activity.

6.12.1. Copies of any employment agreements and total compensation for the Key
Employee have previously been provided to Purchaser. Except with respect to Key
Employee, Schedule 6.12 sets forth (i) a list of all written employment
agreements with any employee or agent of the Company involved in the Business
and the total compensation (separately stating salary and bonus or other
compensation) payable to each of them, including the fringe benefits (other than
those made available to employees generally) provided to each of them, and
(ii) any payments or commitments to pay any severance or termination pay to any
officer, director, employee, consultant or other representative of the Company
involved in the Business. Except as set forth in Schedule 6.12.2, none of such
persons has notified the Company that he or she will terminate such person’s
relationship with the Company. There are no unwritten agreements binding on the
Company with respect to any of the foregoing matters. A separate list including
the name and total compensation of each officer of the Company involved in the
Business, and the name and total compensation of each other employee or
independent contractor of the Company involved in the Business has been provided
by the Company to Purchaser.

6.13. Employee Benefits.

6.13.1. Schedule 6.13.1 contains a list of each Plan, each Multiemployer Plan,
and each material Benefit Arrangement.

6.13.2. To Sellers’ Knowledge, there is no investigation by any Governmental
Authority and there is no other action, suit or claim pending (except actions,
suits or claims for benefits payable in the normal operation of the Plans, other
than actions, suits or claims which if adversely determined, would reasonably be
expected to have a Material Adverse Effect) or threatened against any Plan or
against the assets of any Plan.

6.13.3. No Plan is subject to Part 3 of Title I of ERISA or Section 412 of the
Code or Title IV of ERISA.

6.13.4. All Plans comply and have complied with applicable provisions of their
terms, the Code, ERISA and other applicable Laws, except where such non
compliance would not reasonably be expected to have a Material Adverse Effect.

6.13.5. Neither the Company nor any other disqualified person (as defined in
Section 4975 of the Code) or party in interest (as defined in Section 3(14) of
ERISA) has engaged in any non-exempt prohibited transaction with respect to any
Plan and there is no pending assertion of the occurrence of any such
transaction.

6.13.6. Each Plan that is intended to be tax-qualified under Section 401(a) of
the Code has received a favorable opinion or determination letter from the
Internal Revenue Service as to its tax-qualified status under the Code and
nothing has occurred since the date of such favorable opinion or determination
letter which is reasonably expected to adversely affect the qualified status of
such Plan.

 

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6.13.7. All contributions required to be made to each Plan under the terms of
such Plan, ERISA, the Code or other applicable Law for all periods prior to the
Closing Date have been timely made except where such failure to make timely
contributions is not reasonably expected to result in material liability to the
Company.

6.13.8. The Company complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code with respect to each Plan that is a
“group health plan” (as such term is defined in Section 5000(b)(1) of the Code).

6.13.9. No Plan provides health, life insurance or other welfare benefits to
retirees or other terminated employees of the Company, other than continuation
coverage required by Section 4980B of the Code or Sections 601 to 608 of ERISA
or other similar state laws (“COBRA”).

6.14. Environmental Matters. Except as disclosed in Schedule 6.14:

6.14.1. The Company, including with respect of the operations of the Business,
the Purchased Assets and, without limitation, the Leased Real Property, is in
compliance with all Environmental Laws, except such non-compliance which would
not have a Material Adverse Effect;

6.14.2. The Company holds, and is in compliance with, all Permits required under
Environmental Laws for Sellers to conduct the Business, except such
non-compliance which would not have a Material Adverse Effect;

6.14.3. The Company is not subject to any Order, and has not agreed to any
Order, relating to compliance with any Environmental Law or to investigation or
cleanup of Hazardous Substances under any Environmental Law;

6.14.4. The Company has not (A) released or disposed of any Hazardous Substance
on, to, under or at the Leased Real Property or any other location, whether or
not formerly owned, used or leased, in violation of applicable Environmental
Law, or (B) received any request for information or written notice requiring the
removal of Hazardous Substances from the Leased Real Property or other real
property;

6.14.5. There are no Environmental Claims pending or, to Sellers’ Knowledge,
threatened against or involving the Company, the Business, the Leased Real
Property or any real property formerly used, owned or leased by the Company or
the Business, or otherwise related to any Environmental Liability of the Company
or the Business;

6.14.6. The Company or the Business has not used asbestos-containing material in
its operations or products; and

 

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6.14.7. The Company has not entered into or agreed with any Governmental
Authority pursuant to any Environmental Law regarding the imposition of any Lien
or limitation on the future use of the Leased Real Property.

6.15. Taxes.

6.15.1. Except as otherwise provided in Schedule 6.15, all Tax Returns in
respect of any Pre-Closing Tax Period required to be filed prior to the Closing
Date have been or will be filed in a timely manner and are or will be true,
complete and correct, and all Taxes in respect of any Pre-Closing Tax Period
(whether or not such Taxes were shown or required to be shown on a Tax Return),
including all Taxes for which a notice of assessment or demand for payment has
been received, have been or will be timely and fully paid.

6.15.2. The charges, accruals and reserves for Taxes due, or accrued but not yet
due, relating to the income, properties or operations of the Company for any
Pre-Closing Tax Period as reflected on the books of the Company are and will be
adequate to cover such Taxes.

6.15.3. Except as provided in Schedule 6.15, no penalties or other charges are
or will become due with respect to the late filing of any Tax Return required to
be filed on or before the Closing Date.

6.15.4. Except as otherwise provided in Schedule 6.15, there are no Tax Liens
imposed on any property or assets of the Company. No deficiencies for any Tax
liability of the Company have been proposed, asserted or assessed which remain
unpaid.

6.15.5. With respect to all Tax Returns, except as set forth on Schedule 6.15:
(A) there is no action, suit, proceeding, investigation, audit or claim pending
or in progress or, to Sellers’ Knowledge, threatened regarding any Taxes
relating to the Company or any group of affiliated corporations of which the
Company is now or was formerly a member, for any Pre-Closing Tax Period; and
(B) no extension of time is in force with respect to any date on which any Tax
Return was or is to be filed and no waiver or agreement is in force for the
extension of time for the assessment or payment of any Tax.

6.15.6. Schedule 6.15 sets forth the status of the audits of the United States
Federal income tax returns of the Company for each taxable year for which the
statute of limitations has not expired, including the amounts of any
deficiencies and additions to tax, interest and penalties indicated on any
notices of proposed deficiency or statutory notices of deficiency, and the
amounts of any payments made by the Company with respect thereto. Each such
return for which the audit has not been completed accurately reflects the amount
of liability for Taxes thereunder in all material respects and makes all
material disclosures required by the Code and regulations thereunder and other
applicable provisions of Law. Except as set forth on Schedule 6.15, Sellers have
not agreed to, or is not required to, make any adjustments under section 481(a)
of the Code by reason of a change in accounting method or otherwise.

6.15.7. Schedule 6.15 sets forth the status of the audits of state, local and
foreign Tax Returns of the Company for each taxable year for which the statute
of limitations has not expired, including the amounts of any deficiencies or
additions to tax, interest and penalties that have been made or proposed, and
the amounts of any payments made by the Company with respect thereto. Each such
Tax Return for which the audit has not been completed accurately reflects the
amount of liability for Taxes thereunder and makes all disclosures required by
applicable provisions of Law.

 

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6.15.8. Except as set forth on Schedule 6.15, all Taxes that the Company is
required by Law to withhold or collect have been duly withheld or collected, and
have been timely paid over to the appropriate Governmental Authorities to the
extent due and payable.

6.15.9. The Company has not been or is not included in any consolidated,
affiliated, combined, unitary, aggregate or other similar Tax Returns.

6.15.10. Except as set forth in Schedule 6.15, no power of attorney is currently
in effect, and no Tax ruling has been requested of any Governmental Authority,
with respect to any Tax matter relating to the Company.

6.16. Legal Proceedings. There are no outstanding Orders against or involving
the Company or its Business or properties. Except as set forth on Schedule 6.16,
there are no actions, suits, claims or legal, administrative or arbitral
proceedings or, to Sellers’ Knowledge, investigations (collectively, “Claims”)
(whether or not the defense thereof or liabilities in respect thereof are
covered by insurance) pending or, to Sellers’ Knowledge, threatened, against or
involving the Company or any of the Purchased Assets. To Sellers’ Knowledge,
there is no fact, event or circumstance that would reasonably be expected to
give rise to any Claim that would be required to be set forth on Schedule 6.16
if currently pending or threatened. All notices required to have been given to
any insurance company listed as insuring against any Claim set forth on Schedule
6.16 have been timely and duly given and, to Sellers’ Knowledge, no insurance
company has asserted that such Claim is not covered by the applicable policy
relating to such Claim. Except as set forth on Schedule 6.16, there have not
been any product liability Claims (other than routine warranty claims) against
or involving the Company or any product manufactured, marketed or distributed at
any time by the Company.

6.17. Contracts.

6.17.1. Schedule 6.17 contains a complete and accurate list of each of the
following Contracts now in effect to the extent not set forth on Schedules 6.10
or 6.12.2:

6.17.1.1. all Contracts that provide for payment or receipt by the Company in
connection with the Business of more than $25,000 per year, including any such
Contracts with vendors, suppliers, customers or clients;

6.17.1.2. all Contracts relating to Indebtedness or granting a Lien on any of
the Purchased Assets;

6.17.1.3. all Contracts that limit or purport to limit the ability of the
Business to compete in any line of business or with any Person or in any
geographic area or during any period of time;

6.17.1.4. all Real Property Leases;

 

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6.17.1.5. all Contracts with employees, officers, directors, and independent
contractors providing services to the Business;

6.17.1.6. all license agreements, franchise agreements or agreements in respect
of similar rights granted to or held by the Company, except for Software
licenses excluded from Schedule 6.10.2 in accordance with Section 6.10.2;

6.17.1.7. all joint venture, partnership, co-development or similar Contracts;

6.17.1.8. all Contracts pursuant to which the Company undertakes any
indemnification obligation;

6.17.1.9. all Contracts pursuant to which the Company has a beneficial interest
in any confidentiality, non-competition, or non-solicitation covenant of any
Person, any assignment to the Company or vesting of ownership in the Company of
any Intellectual Property;

6.17.1.10. all requirements Contracts or Contracts providing for an exclusive
supplier, dealer, agency or similar relationship; and

6.17.1.11. any other Contract that is material to the Business taken as a whole.

6.17.2. Schedule 6.17 also lists and describes the status of all Contracts
currently in negotiation or proposed by the Company of a type which if entered
into by the Company would be required to be listed on Schedule 6.17 (“Proposed
Contracts”).

6.17.3. The Company has delivered to Purchaser true and complete copies of
(i) all of the Contracts set forth on Schedules 6.10, 6.12 and 6.17 and (ii) the
most recent draft, letter of intent or term sheet (or if none exist, a
reasonably detailed written summary) embodying the terms of all of the Proposed
Contracts set forth on Schedule 6.17. All of the Contracts referred to in the
preceding sentence were entered into in bona fide transactions in the Ordinary
Course of Business and are valid and binding upon the Company and, to Sellers’
Knowledge, the parties thereto, in accordance with their terms and are in full
force and effect. The Company is not in default under any of such Contracts, nor
does any condition exist that with notice or lapse of time or both would
constitute a default thereunder by the Company. To Sellers’ Knowledge, no other
party to any such Contract is in default thereunder in any material respect nor
does any condition exist that with notice or lapse of time or both would
constitute a material default thereunder. All approvals or consents of any
person needed in order that the Contracts set forth on Schedules 6.10, 6.12 and
6.17 continue in full force and effect immediately following the consummation of
the transactions contemplated by this Agreement are set forth on Exhibit 9.5.

6.17.4. Schedule 6.17.4 contains a description of the warranties provided to
customers in all existing or pending customer Contracts. Schedule 6.17.4 also
sets out all material warranty claims currently pending against the Company. No
warranties to customers exist other than as stated in the Company’s warranty
policy attached to Schedule 6.17.4 or in the Contracts as provided by Company to
Purchaser. The Company has not incurred warranty obligations in excess of
$25,000 during any of its fiscal years ending December 31, 2010, 2011 or 2012.

 

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6.18. Compliance with Laws, Certifications.

6.18.1. The Company is not in material violation of any applicable Law or Order,
and the Company has not received written notice that any such violation is being
or may be alleged. To Sellers’ Knowledge, no investigation by any Governmental
Authority with respect to the Company or the Products is pending or, threatened
and the Company has not received any written notice of any intention by any
Governmental Authority to conduct the same.

6.18.2. The Products currently marketed by the Company and those Products
previously sold by the Company as to which Purchaser is assuming warranty
obligations hereunder are or were, on the date of sale by the Company, (i) in
compliance with all Permits, and (ii) in compliance with all Governmental and
non-governmental certifications required for their sale in any market in which
they were or currently are sold or distributed or with respect to which they
were or are marketed or advertised for sale by the Company.

6.18.3. Since the Company’s formation, to the Sellers’ Knowledge, all exports of
the Company’s products have been made in compliance in all material respects
with all United States export control regulations and no product manufactured by
the Company is subject to any export licensing requirement under such laws and
regulations, including without limitation Export Administration Regulations
(EAR), 15 C.F.R. Parts 730-774, as amended, and regulations governing the
manufacture and export of defense articles, defense services and associated
technical data, as set forth in the International Traffic in Arms Regulations
(ITAR), 22 C.F.R. Parts 120-130, as amended.

6.18.4. The Company is not a party to any contract with, and, since the
Company’s formation, has not, to Sellers’ Knowledge, sold or purchased goods and
services to or from: (i) any Person who is a “designated national,” “specially
designated national,” “specially designated terrorist,” “specially designated
global terrorist,” “foreign terrorist organization,” “specially designated
narcotics trafficker,” or “blocked person,” within the definitions set forth in
the Foreign Assets Control Regulations, contained in 31 C.F.R., Subtitle B,
Chapter V, as amended (the “OFAC Regulations”), or who otherwise appears on the
list of Specially Designated Nationals and Blocked Persons, Appendix A to the
OFAC Regulations, (ii) the government, including any political subdivision,
agency, or instrumentality, of any country against which the United States
maintains economic sanctions or embargos, (iii) a Person who has informed the
Company that such person is acting or purporting to act, directly or indirectly,
on behalf of, or an entity owned or controlled by, any of the Persons listed in
subparagraphs (i)-(ii) above, or (iv) a Person on any other export control,
terrorism or drug trafficking related list administered by any Governmental
Agency as that list may be amended, adjusted or modified from time to time.

6.18.5. The practices and activities of the Company are in compliance with, and,
for the past five (5) years, the Company has maintained compliance with, the
regulations administered by the Office of Foreign Assets Control of the US
Department of the Treasury, 31 C.F.R., Subtitle B, Chapter V, as amended.

 

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6.18.6. By making the representations in this Section 6.18, Sellers are not
assuming any responsibility for what compliance with law may be required for
Purchaser’s operation of the Business after the Closing Date.

6.19. Insurance. Schedule 6.19 sets forth a summary of all policies or binders
of fire, liability, product liability, worker’s compensation, vehicular and
other insurance held by or on behalf of the Company and the Business (specifying
the policyholder, the amount of the coverage, the insurer, the type of coverage,
the risks insured and any pending claims thereunder). Such policies and binders
are valid and binding in accordance with their terms, and are in full force and
effect. All general liability policies maintained by or for the benefit of the
Company are “occurrence” policies and not “claims made” policies. The Company
has no outstanding bonds and other surety arrangements in connection with the
operations of the Company or the Business. Schedule 6.19 sets forth a summary of
loss experience under each insurance policy.

6.20. Fees or Commissions. Neither Seller (including their officers, directors,
stockholders and employees) has employed any broker, agent or finder or incurred
any liability for any brokerage fees, agent’s commissions or finder’s fees or
other similar obligations in connection with the transactions contemplated
hereby.

6.21. Illegal Payments. Neither the Company nor, to Sellers’ Knowledge, any
officer, employee or agent of the Company, or any other person or entity on
behalf of the Company, has made or authorized any payment of funds of the
Company which is prohibited by law.

6.22. Suppliers and Customers. Schedule 6.22 hereto sets forth the ten
(10) largest suppliers and ten (10) largest customers of the Business as of the
date hereof, based on the dollar amount of purchase and sales for the twelve
(12) month period ended on December 31, 2012. To Sellers’ Knowledge, the
relationships of the Company with such suppliers and customers are good
commercial working relationships and, except as set forth on Schedule 6.22
hereto which also lists all customers and suppliers that are of material
importance to the Business, no supplier or customer listed on Schedule 6.22 has
cancelled or otherwise terminated, or threatened to cancel or otherwise to
terminate, its relationship with the Company or has during the last twelve
(12) months decreased materially, or threatened to decrease or limit materially,
its services, supplies or materials for use in the Business or its usage or
purchase of the services or products of the Company, except for normal cyclical
changes related to customers’ businesses. To Sellers’ Knowledge, no supplier or
customer intends, whether as a result of the transactions contemplated hereby or
otherwise, to cancel or otherwise substantially modify its relationship with the
Company or to decrease materially or limit its services, supplies or materials
to the Company, or its usage or purchase of any of the Company’s services or
products, and to Sellers’ Knowledge, the consummation of the transactions
contemplated hereby will not adversely affect the relationship of the Purchaser
with any such supplier or customer. Except as disclosed on Schedule 6.22, the
Company has not conducted any product recall, or taken any other similar action
(whether voluntary or required by law), with respect to any of the Products.

 

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6.23. Inventories. The inventories of the Company are accounted for on a
first-in/first-out basis. The inventories of the Company are current,
merchantable, readily usable or saleable in the Ordinary Course of Business and
are written down to net realizable market value. No material amount of obsolete,
unsaleable, excess or slow-moving inventory is included.

6.24. Real Property.

6.24.1. The Company does not own any land, buildings, structures, plants,
facilities and other improvements, and has not prior to the Closing Date.

6.24.2. Other than the respective agreements (the “Real Property Leases”) under
which the Company leases the Leased Real Property, the Company is not a party to
any leases, subleases, licenses and other agreements under which the Company has
the right to use or occupy, now or in the future, any real property. The Company
has heretofore delivered to Purchaser true, correct and complete copies of the
Real Property Leases (including all modifications, amendments and supplements).
To Sellers’ Knowledge, the Real Property Leases are valid, binding and in full
force and effect, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general applicability relating to
or affecting creditors’ rights and to general equity principles. The Company has
valid leasehold interests in the Leased Real Property, in each case free and
clear of all Liens other than Permitted Liens. All rent and other sums and
charges payable by the Company as tenant thereunder are current. The Company has
complied in all material respects with the terms of the Real Property Leases.
The Company has not taken any action or omitted to take any action that could
permit any lessor (with the giving of notice, the lapse of time, or both) to
terminate a Real Property Lease and, to Sellers’ Knowledge, no other termination
event or condition or uncured default exists that could permit any lessor (with
the giving of notice, the lapse of time, or both) to terminate a Real Property
Lease. The Company has not received written notice from any lessor that it is in
default in respect of any of its obligations or liabilities pertaining to the
Leased Real Property.

6.24.3. Since January 1, 2010 the Company’s sole office has been the Leased Real
Property.

6.24.4. To Sellers’ Knowledge, there is no pending, threatened or contemplated
condemnation proceeding affecting the Leased Real Property or any part thereof
or any sale or other disposition of the Leased Real Property or any part thereof
in lieu of condemnation.

6.24.5. The uses to which the Leased Real Property have been put by the Company
are permitted uses under applicable zoning ordinances. To Sellers’ Knowledge,
the Leased Real Property complies with all applicable building and zoning codes,
federal, state and local laws and ordinances (including but not limited to the
Americans with Disabilities Act), easements, restrictions and covenants of
record.

6.24.6. The Company has direct access to and from the Leased Real Property to
dedicated and accepted public streets.

 

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6.24.7. The Company is in peaceful and undisturbed possession of the Leased Real
Property.

6.25. Assigned Receivables. All Assigned Receivables of the Company as of the
Interim Balance Sheet Date are shown on the Interim Balance Sheet, and all such
Assigned Receivables and all Assigned Receivables acquired or generated by the
Company subsequent to the Interim Balance Sheet Date have arisen in the Ordinary
Course of Business from the sale of the Company’s services and subject to
Purchaser performing those services inherent in the customer obligations
representing deferred revenue at Closing, constitute valid, undisputed claims of
the Company not subject to claims of set off or other defenses or counterclaims
and have been collected or are collectable in the aggregate recorded amounts
thereof in accordance with their terms, net of the reserve for uncollected
accounts set forth in the calculation of Closing Date Net Working Capital.

6.26. Disclosure. This Agreement, the Schedules to this Agreement, and the
Exhibits to this Agreement delivered by or on behalf of Sellers in connection
with this Agreement and the transactions contemplated hereby are true and
complete.

6.27. Accredited Investor. Each Seller is an accredited investor as such term is
defined in Regulation D under the Securities Act.

6.28. Investment Intent. Sellers are acquiring the shares of ORBCOMM Stock
pursuant to this Agreement for their own account for investment purposes only
and not with a view to, or for sale or resale in connection with, any public
distribution thereof or with any present intention of selling, distributing or
otherwise disposing of any of such shares in violation of the Securities Act.

6.29. Investment Decision. Sellers have been afforded the opportunity, directly
or through their Representatives, to ask questions of and receive answers from
the management of Purchaser concerning the investment in ORBCOMM Stock and have
sufficient knowledge and experience in investing in companies similar to
Purchaser so as to be able to evaluate the risks and merits of their investment
in the ORBCOMM Stock. Sellers acknowledge and affirm that they have completed an
investigation, analysis and evaluation of Purchaser that they deemed necessary
or appropriate, and that in making their decision to enter into this Agreement,
and consummate the Asset Sale they have relied on such investigation, analysis,
and evaluation.

6.30. Transfer Restrictions. Company is aware that the shares of ORBCOMM Stock
to be issued to Company pursuant to this Agreement have not been registered
under the Securities Act or any applicable U.S. state securities laws, and
agrees that the ORBCOMM Stock will not be offered or transferred, sold,
assigned, pledged, hypothecated, gifted, encumbered or otherwise disposed of
except (a) to the Stockholder, (b) pursuant to a registration statement which
has been declared effective under the Securities Act, (c) pursuant to Rule 144
under the Securities Act or (d) pursuant to any other available exemption from
the registration requirements of the Securities Act, if in the opinion of
counsel reasonably acceptable to Purchaser such exemption is applicable. After
issuance hereunder, Sellers will not transfer any shares of ORBCOMM Stock in
violation of the provisions of any applicable U.S. federal or state or other
jurisdiction’s securities laws.

 

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ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Sellers as follows:

7.1. Organization. Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the
corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as now being and as heretofore
conducted.

7.2. Authority to Execute and Perform Agreement. Purchaser has the legal right
and power and all corporate authority and approvals required to execute and
deliver this Agreement and to perform fully its obligations hereunder. Each of
this Agreement and the other agreements and other instruments being delivered at
the Closing by Purchaser have been duly authorized by all necessary corporate
action and have been or will have been duly executed and delivered by Purchaser
and (assuming the due authorization, execution and delivery hereof by Sellers)
are, or will be when executed and delivered, valid and binding obligations of
Purchaser enforceable in accordance with their terms. The execution, delivery
and performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby will not (i) violate any provision of the
Certificate of Incorporation or By-Laws of Purchaser; (ii) require Purchaser to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any Governmental Authority or any other person other than as set
forth in Section 7.9; (iii) violate, conflict with or result in the breach of
any of the terms of, result in a material modification of, otherwise cause the
termination of or give any other contracting party the right to terminate,
cancel or accelerate any obligation or to receive any material benefit under or
constitute (or with notice or lapse of time or both would constitute) a default
under any contract, or result in the creation of any Lien upon the assets or
properties of Purchaser; (iv) violate any Order against, or binding upon,
Purchaser or its properties or business; or (v) violate any Law.

7.3. Fees or Commissions. Purchaser (including its officers, directors and
employees) has not incurred any liability for any brokerage fees, agent’s
commissions or finder’s fees or other similar obligations in connection with the
transactions contemplated hereby except as will be paid by Purchaser outside of
Closing and without any liability on the part of Sellers.

7.4. Orders. Purchaser is not subject to any Order that would prevent or
materially impair or delay the ability of Purchaser to consummate the Asset Sale
or to perform its other obligations hereunder.

7.5. Sufficiency of Funds. Purchaser has, and at the Closing will have,
sufficient cash on hand or other sources of financing in order to consummate the
transactions contemplated by this Agreement and to fulfill its obligations
hereunder, including without limitation payment to the Company of the Closing
Cash Amount at the Closing.

 

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7.6. Valid Issuance. The shares of ORBCOMM Stock to be issued to the Company
pursuant to Section 4.2 have been duly and validly authorized and, when issued
and paid for pursuant to this Agreement, will be validly issued, fully paid and
nonassessable, and shall be free and clear of all encumbrances and restrictions
(other than those created by the Company), except for restrictions on transfer
imposed by applicable securities laws.

7.7. SEC Reports; Financial Statements. Purchaser has filed with the SEC all
reports, including amendments thereto, required to be filed by it under the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (the foregoing materials being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective dates, the SEC
Reports complied as to form in all material respects with the requirements of
the Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
financial statements of Purchaser included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with GAAP and fairly
present in all material respects the financial position of Purchaser and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended. In the case of unaudited
interim financial statements, such statements include all adjustments (including
normal recurring accruals) necessary for a fair presentation of the consolidated
financial position, results of operations and cash flows for the periods
presented.

7.8. Absence of Changes. Since the last quarterly report on Form 10-Q filed by
Purchaser, there has not been a material adverse effect on Purchaser other than
as disclosed by Purchaser in any filing with the SEC. To Purchaser’s knowledge,
there has not been any Law or Order adopted or rescinded which would be
reasonably expected to have a material adverse effect on Purchaser.

7.9. Governmental Authorizations. Except for (a) the requirements of state
securities laws, (b) the filing of appropriate documents with the NASDAQ Stock
Market, or (c) the filing of a Form 8-K or a registration statement with respect
to common stock with the SEC, if applicable, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Entity is required to be made or obtained by Purchaser in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.

 

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ARTICLE 8

COVENANTS

8.1. Conduct of the Business. Sellers agree that, from the date hereof to the
Closing, except (a) to the extent otherwise permitted by this Agreement, (b) as
expressly required by any Governmental Authority or Law, or (c) as consented to
in writing by Purchaser, the Company:

8.1.1. will operate the Business in the Ordinary Course of Business in all
material respects, including maintaining Inventories;

8.1.2. will use commercially reasonable efforts to preserve the Business
organization intact, to retain the services of its employees and to preserve the
Business goodwill and relationships with customers, suppliers, creditors and
others having business relationships with it;

8.1.3. will take such action as may be commercially reasonably necessary to
preserve the Business properties and assets and to maintain its Permits;

8.1.4. will maintain in full force and effect its insurance policies presently
in effect;

8.1.5. will comply with any applicable Law or Order the violation of which would
have a Material Adverse Effect;

8.1.6. will promptly advise Purchaser in writing of any Material Adverse Change
or any event or circumstance which will, or with reasonable certainty may,
result in a Material Adverse Change;

8.1.7. will review with Purchaser all decisions regarding major vendor
Contracts, major customer Contracts, major equipment purchases and sales and
other major operational decisions;

8.1.8. will not make or commit to make any salary or wage increase with respect
to any officer, employee or agent, except as set forth in Schedule 6.12, or
enter into, amend or alter any Plan or Benefit Arrangement or any employment or
consulting agreement;

8.1.9. will obtain Purchaser’s written approval prior to filing any documents or
papers with or making any written representations to the United States Patent
and Trademark Office or the patent or trademark offices of any foreign
countries;

8.1.10. will not sell, transfer, assign or otherwise dispose of or encumber any
of the assets that would be Purchased Assets other than dispositions to
unaffiliated purchasers for full value in the Ordinary Course of Business of
(1) Inventories, (2) Products, (3) other assets that will not affect the
operations of the Business in any material respect, or (4) other assets that are
replaced in full by comparable assets prior to the Closing;

 

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8.1.11. will not grant any additional Licenses Out, modify or compromise any
existing License Out, settle or compromise any claim of infringement by any
third party of any Owned Intellectual Property, or otherwise sell, transfer or
encumber any Owned Intellectual Property;

8.1.12. will obtain Purchaser’s written approval prior to leasing, renewing,
subleasing, using, selling, or buying any real property interest; and

8.1.13. will not make any agreement or commitment to take any action referred to
in subparagraphs 8.1.1 through 8.1.12 above.

8.2. Examinations and Investigations, Confidentiality Agreement. Prior to the
Closing Date, Purchaser may, through its respective employees, agents and
representatives, make or cause to be made such investigation of the Company and
the Business and Purchased Assets as it deems necessary or advisable. Such
investigation shall not affect the representations and warranties hereunder. The
Company will permit Purchaser and its employees, agents and representatives, on
reasonable notice, to have access to the Company’s premises, and books, records
and documents during normal business hours, including, but not limited to, the
work papers of its accountants, and to furnish such data and other information
with respect to the Company, the Purchased Assets and Business as Purchaser
shall from time to time reasonably request (“Due Diligence”). Upon the written
consent of the Company, such consent not to be unreasonably withheld, Purchaser
may also contact the Company’s customers, suppliers and employees in the course
of its investigation of the Business and Purchased Assets. All expenses incurred
in the course of conducting Due Diligence pursuant to this Section 8.2 shall be
borne by Purchaser. Purchaser shall exercise reasonable efforts not to disrupt
the business of the Company or the Company’s relationships with its customers,
suppliers and employees during the course of Purchaser’s investigations
hereunder. Between the date of this Agreement and the Closing Date, all
information regarding the Company or the Business received by Purchaser or its
representatives in the course of conducting Due Diligence shall be governed by
and held in confidence under the terms and conditions of the Confidentiality
Agreement, which Purchaser acknowledges shall remain in effect until the earlier
of the Closing Date or the termination of this Agreement notwithstanding any
provision to the contrary in the Confidentiality Agreement or, if this Agreement
is terminated, until such later date as provided in the Confidentiality
Agreement.

8.3. Certain Filings, Consents and Action. Sellers and Purchaser shall cooperate
with each other in determining whether any other filings are required to be made
or consents, approvals, permits or authorizations are required to be obtained
under any other Law, or whether any consents, approvals or waivers are required
to be obtained from other parties under Contracts material to the Business in
connection with the consummation of the transactions contemplated hereunder, and
will cooperate with each other in completing those filings. Upon Closing, and to
the extent not otherwise obtained prior to the Closing Date, Sellers will use
all commercially reasonable efforts and will immediately seek to obtain all such
additional consents, approvals, permits, authorizations or waivers.

 

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8.4. Public Announcement. Sellers and Purchaser shall mutually agree as to the
form, timing and substance of any public announcement related to this Agreement
or the transactions contemplated hereby, such agreement not to be unreasonably
withheld or delayed, and consult with each other as to the form, timing and
substance of other public disclosures related hereto; provided, however, that
nothing contained herein shall prohibit either party without the agreement of
the other party from making any disclosure required by Law or as such party
deems necessary under federal or state securities laws.

8.5. Acquisition Proposals. No Seller will, prior to the termination or
expiration of this Agreement, directly or indirectly, through any officer,
employee, director, stockholder, representative, broker, advisor or agent
(i) seek, solicit, initiate or encourage the submission of inquiries, proposals
or offers from any Person relating to any acquisition or purchase of the equity
or of the Purchased Assets of, or of any profit sharing interest in, Company, or
any tender or exchange offer, merger, reverse merger, consolidation, business
combination, recapitalization, spin-off, liquidation or dissolution that is part
of a plan to transfer assets that would be Purchased Assets to a third party or
third parties, or similar transaction involving, directly or indirectly, Company
(each an “Acquisition Proposal”), (ii) participate or cooperate in or consider
or pursue, any discussions or negotiations regarding an Acquisition Proposal or
furnish to any Person information concerning Company for any Acquisition
Proposal, or (iii) otherwise solicit or cooperate in any way with, or assist or
participate in, facilitate or encourage any effort or attempt by any Person to
make or enter into an Acquisition Proposal. Sellers shall notify Purchaser in
writing within twenty-four hours of any breach of this Section 8.5 or of the
receipt of any unsolicited Acquisition Proposal. Sellers shall cause all of
their agents, officers, employees, directors, stockholders, and representatives
to abide by the terms of this Section 8.5

8.6. Further Assurances. After the Closing, Sellers will, at Purchaser’s
reasonable request from time to time and without further consideration, execute
and deliver or cause to be executed and delivered to Purchaser such other
instruments of sale, transfer, conveyance, assignment and confirmation
(including, without limitation, additional assignments suitable for recording
with respect to Intellectual Property) and take such other action as Purchaser
may reasonably request so as to fully, effectively and completely sell, assign,
transfer to and vest in Purchaser title to and possession of the Purchased
Assets. In the event that the Company receives any funds that are the property
of Purchaser, it shall promptly forward such funds to Purchaser, and in the
event that Purchaser receives any funds that are the property of the Company, it
will promptly forward such funds to the Company. Subject to completion of the
Closing, from and after the Closing, Purchaser covenants not to sue Sellers for
infringement of any Intellectual Property of Purchaser related to the Business
occurring on or prior to the Closing Date.

Sellers and Purchaser agree that all utility (including telephone, gas,
electric, heat and other utility charges) charges, real and personal property
taxes and assessments, rent and proportionate share of charges for incurred
operating costs owed to the lessor under any lease which is assumed by Purchaser
and other prepaid and deferred expense items which are attributable to periods
before and after the Closing Date, shall be prorated between the Company and
Purchaser as of the Closing Date.

 

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8.7. Financial Information. Within twenty (20) days after the Closing, Sellers
shall deliver to Purchaser the balance sheet of the Company, as of the Closing
Date, prepared in accordance with GAAP.

8.8. Third Party Consents. To the extent that the Company’s rights under any
item described in this Agreement or any other Purchased Asset to be assigned to
Purchaser hereunder may not be assigned without the consent of another person
which has not been obtained, this Agreement shall not constitute an agreement to
assign the same if an attempted assignment would constitute a breach thereof or
would be unlawful, and the Company shall use reasonable efforts in good faith to
obtain any such required consents as promptly as possible. If any such consent
shall not be obtained or if any attempted assignment would be ineffective or
would impair Purchaser’s rights under the item or Purchased Asset in question so
that Purchaser would not in effect acquire the benefit of all such rights, the
Company shall act after the Closing as Purchaser’s agent in order to obtain for
it the benefits thereunder, including, but not limited to, the Company’s
delivery to Purchaser of all revenues generated therefrom, net of the Company’s
reasonable and necessary expenses incurred in relation to each such item or
Purchased Asset, from Closing Date through and including the date on which
consent is obtained, and shall cooperate with Purchaser in any other reasonable
arrangement designed to provide such benefits to Purchaser. Purchaser shall
defend, indemnify and hold harmless the Company from, against and in respect of
any and all liabilities, losses, damages, deficiencies or expenses resulting
from the Company’s agency described in the previous sentence. If such consent is
obtained following Closing then such Purchased Asset shall be automatically
assigned to Purchaser without any further action on the part of any party
hereto.

8.9. Bulk Sales Law. Purchaser hereby waives compliance by the Company with the
requirements and provisions of any “bulk transfer” laws of any jurisdiction that
may otherwise be applicable with respect to the sale of any or all of the
Purchased Assets; provided, however, that the Company shall defend, indemnify
and hold harmless Purchaser, in accordance with Article 11, against any claims
asserted against Purchaser as a result of the failure of the Company to comply
with any such laws.

8.10. Cessation of Use of Names; Telephone; Domain Names. Immediately following
the Closing, the Company shall cease and desist from using the words or
formatives “MobileNet” or any derivations thereof, in connection with any
commercial activities or in any trade name, or as part of any trademark or any
product or service identification and shall undertake and promptly pursue all
necessary action to change its corporate name to a new name not confusingly
similar to its current name. The Company shall also use reasonable efforts to
transfer to Purchaser the telephone numbers listed on Exhibit 2.1.3. In
addition, the Company shall comply with the domain name transfer protocol of the
registrar of any domain name used or owned by the Company so as to ensure that
transfer of such domain name is timely made to Purchaser.

8.11. Tax Cooperation. The Company, on the one hand, and Purchaser, on the other
hand, will provide the other with such cooperation and information as each of
them reasonably may request of the other in filing any Tax Return, amended Tax
Return or claim for a refund of Taxes, determining a liability for Taxes or a
right to refund of Taxes or in conducting any audit or proceeding in respect of
Taxes, but only with respect to Taxes imposed upon or related to the operation
of the Business or the Purchased Assets. Such cooperation and information shall
include providing copies of relevant Tax Returns, or portions thereof, imposed
upon or related to the Purchased Assets, together with associated schedules and
related work papers and documents relating to rulings or other determinations by
taxing authorities.

 

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8.12. Access to Records. Following the Closing, Purchaser shall provide Sellers
reasonable access to, or copies of, Business records necessary for the Company
to wind up and dissolve under applicable Law. Prior to the destruction by the
Company of the Retained Records, the Company shall give Purchaser the right to
take possession of such Retained Records, at the expense of Purchaser, provided
that Purchaser shall take possession of such records except as limited by Law.

ARTICLE 9

CONDITIONS TO OBLIGATIONS OF PURCHASER

The obligations of Purchaser to consummate the transactions contemplated hereby
shall be subject to the fulfillment, on or before the Closing Date, of the
following conditions, any of which may be waived in whole or in part by
Purchaser in writing delivered to Sellers prior to or at the Closing:

9.1. Representations and Warranties True as of the Closing Date. The
representations and warranties of Sellers contained in this Agreement shall be
true and correct as of the Closing Date.

9.2. Performance by Sellers. Each of the covenants, agreements and obligations
to be performed by Sellers on or before the Closing Date pursuant to the terms
hereof shall have been duly performed by Sellers on or before the Closing Date.

9.3. Authority. All actions required to be taken by Sellers to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall have been duly and validly taken.

9.4. Consents. All notices to, permits, authorizations, approvals, consents and
waivers from any Governmental Authority and all third party consents listed on
Exhibit 9.4 shall have been made or obtained.

9.5. Assumed Contracts and Assigned Rights. All consents and assignments of the
Assumed Contracts and Assigned Rights listed on Exhibit 9.5 shall have been
obtained, including an assignment of the Real Property Leases on no less
favorable terms than the terms of the existing leases and including estoppel
certificates as provided in Section 5.3.8.

9.6. Absence of Litigation. No action, suit or proceeding petitioning a
Governmental Authority to forbid or enjoin the consummation of the transactions
contemplated under this Agreement shall be pending or threatened in writing. No
preliminary or permanent injunction or other Order shall have been issued by any
Governmental Authority of competent jurisdiction which remains in effect and
restricts the consummation of the transactions contemplated hereby and no Law
shall have been enacted by any Governmental Authority that makes consummation of
the transactions contemplated hereby illegal.

 

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9.7. No Material Adverse Change. Since the date hereof, there shall not have
been any Material Adverse Change to the Company.

9.8. Title. Seller shall deliver good title to all of the Purchased Assets free
and clear of Liens except for Permitted Liens.

9.9. Agreement with the Key Employee and Acceptance by a Transferred Employee.
On or prior to the Closing Date, the Key Employee shall have entered into a
written agreement with Purchaser (containing, among other things, non-disclosure
and non-competition covenants) for such Key Employee’s services to Purchaser
after the Closing, in form satisfactory to Purchaser. Matthew Mueller shall have
accepted in writing Purchaser’s offer of employment as a Transferred Employee.

9.10. Due Diligence. Purchaser shall be satisfied, in its reasonable discretion,
with the results of its Due Diligence investigation and the evaluation of the
Business.

9.11. Certificate of Indebtedness. Sellers shall have caused Company to prepare
and deliver to Purchaser a certificate (the “Certificate of Indebtedness”)
certifying as to (a) the amount of Indebtedness of Company outstanding on the
Closing Date, and specifying the amount owed to each creditor listed thereon,
and (b) the aggregate amount of customer deposits (if any) held by Company as of
the Closing Date. Sellers shall have caused the holders of the Company’s
Indebtedness to deliver pay-off letters and lien discharges (or agreements to
discharge liens conditioned solely on payment in full), each in form
satisfactory to Purchaser, with respect to such Indebtedness.

9.12. Discharge of Liens. The Company shall have complied with the requirements
of Section 5.3.7 of this Agreement and each Uniform Commercial Code financing
statement filed against any of the Purchased Assets (other than any such
financing statement in favor of any lender to Purchaser) shall either have been
terminated or termination statements with respect thereto in form and substance
satisfactory to Purchaser and the Purchaser’s counsel shall have been delivered
(or agreed to be delivered upon payment in full) to the Purchaser.

9.13. Tax Clearance Certificate. If requested by Purchaser, Company shall notify
all of the taxing authorities in the jurisdictions that impose Taxes on Company
or where Company has a duty to file Tax Returns of the transactions contemplated
by this Agreement in the form and manner required by such taxing authorities, if
the failure to make such notifications or receive any available tax clearance
certificate (a “Tax Clearance Certificate”) could subject Purchaser to any Taxes
of Company. If any taxing authority asserts that Company is liable for any Tax,
Company shall promptly pay any and all such amounts and shall provide evidence
to Purchaser that such liabilities have been paid in full or otherwise
satisfied.

 

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9.14. Other Agreements. Any of the agreements, documents or instruments to be
delivered as contemplated under this Agreement by Sellers, not otherwise listed
in this Article 9 shall have been executed and delivered by Sellers as
applicable.

9.15. FIRPTA Certificate. Purchaser shall have received from the Company a
certificate in form and substance reasonably satisfactory to Purchaser, duly
executed and acknowledged, certifying that the transactions contemplated by this
Agreement are exempt from withholding under Section 1445 of the Code.

9.16. Escrow Agreement. Each Seller and the Escrow Agent shall have executed and
delivered to Purchaser the Escrow Agreement substantially in the form of Exhibit
9.16 (“Escrow Agreement”) under which the Escrow Amount shall be held by the
Escrow Agent for a period of fifteen (15) months to secure the obligations the
Sellers may have to indemnify the Purchaser for Losses under this Agreement. The
Escrow Agreement shall be in full force and effect.

9.17. Proceedings and Documents Satisfactory. All proceedings in connection with
the transactions contemplated by this Agreement and all certificates and
documents delivered to Purchaser in connection with the transactions
contemplated by this Agreement shall be satisfactory in all reasonable respects
to Purchaser and Purchaser’s counsel, and Purchaser shall have received the
originals or certified or other copies of all such records and documents as the
Purchaser may reasonably request.

ARTICLE 10

CONDITIONS TO OBLIGATIONS OF SELLERS

The obligations of Sellers to consummate the transactions contemplated hereby
shall be subject to the fulfillment, on or before the Closing Date, of the
following conditions, any of which may be waived in whole or in part by Seller
in writing delivered to Purchaser prior to or at the Closing:

10.1. Representations and Warranties True as of the Closing Date. The
representations and warranties of Purchaser contained in this Agreement shall be
deemed to have been made again on and as of the Closing Date and shall be true
and correct as of the Closing Date.

10.2. Performance by Purchaser. Each of the covenants, agreements and
obligations to be performed by Purchaser on or before the Closing Date pursuant
to the terms hereof shall have been duly performed by Purchaser on or before the
Closing Date, including all payments of cash and deliveries of stock provided
for in Section 4.2.

10.3. Authority. All actions required to be taken by Purchaser to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall have been duly and validly taken,
including approval of Purchaser’s Board of Directors.

 

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10.4. Absence of Litigation. No action, suit or proceeding petitioning a
Governmental Authority to forbid or enjoin the consummation of the transactions
contemplated under this Agreement shall be pending or threatened in writing. No
preliminary or permanent injunction or other Order shall have been issued by any
Governmental Authority of competent jurisdiction which remains in effect and
restricts the consummation of the transactions contemplated hereby and no Law
shall have been enacted by any Governmental Authority that makes consummation of
the transactions contemplated hereby illegal.

10.5. Other Agreements. Any of the agreements, documents or instruments to be
delivered as contemplated under this Agreement by Purchaser, not otherwise
listed in this Article 10, shall have been executed and delivered by Purchaser.

10.6. Escrow Agreement. Purchaser and the Escrow Agent shall have executed and
delivered to Company the Escrow Agreement and the Escrow Agreement shall be in
full force and effect.

10.7. Proceedings and Documents Satisfactory. All proceedings in connection with
the transactions contemplated by this Agreement and all certificates and
documents delivered to Sellers in connection with the transactions contemplated
by this Agreement shall be satisfactory in all reasonable respects to Sellers
and their counsel, and Sellers shall have received the originals or certified or
other copies of all such records and documents as Sellers may reasonably
request.

10.8. Due Diligence. Sellers shall be satisfied, in their reasonable discretion,
with the results of their due diligence investigation and the evaluation of the
Purchaser.

10.9. No Material Adverse Change. Since the date hereof, there shall not have
been any Material Adverse Change to Purchaser.

ARTICLE 11

INDEMNIFICATION

11.1. Survival of Representations and Warranties; Remedies. All representations
and warranties, covenants and obligations in this Agreement, the Schedules and
any other certificate or document delivered pursuant to this Agreement shall
survive the Closing and the consummation of the Asset Sale, subject to the
provisions of Section 11.6.

11.2. Indemnification by Sellers. From and after the Closing, Sellers, jointly
and severally, agree to indemnify and hold Purchaser and its Affiliates harmless
from and against any and all Losses incurred by or asserted against Purchaser
and its Affiliates or its assigns due to or resulting from: (i) the breach of
any representation or warranty of Sellers, or either of them, set forth in this
Agreement or the Schedules delivered pursuant to this Agreement (determined
without regard to any qualifications therein referencing “material” or any
derivative thereof); (ii) a violation or default by either Seller of either
Seller’s covenants, obligations or agreements set forth in this Agreement other
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clause (i) or (v) of this Section 11.2; (iii) the Retained Liabilities
(including any Liability which is not an Assumed Liability or that Purchaser
reasonably determines that it should pay (after having requested payment by
Sellers) in order to protect the Business and its reputation from damage as a
result of the failure of any Seller or Affiliate thereof to pay, perform or
otherwise discharge any such Retained Liability in accordance with its terms);
(iv) the Company’s failure to comply with any bulk sales law; and (v) any claims
by a third party to an ownership interest in the Developed Software or rights to
use trade secrets incorporated in the Developed Software except in connection
with such third party’s authorized use of the Products.

11.3. Indemnification by Purchaser. From and after the Closing, Purchaser agrees
to indemnify and hold Sellers harmless from and against any and all Losses
incurred by or asserted against either Seller due to or resulting from: (i) the
breach of any representation or warranty of Purchaser set forth in this
Agreement or any certificate or other document delivered pursuant to this
Agreement; (ii) a violation or default by Purchaser of Purchaser’s covenants,
obligations or agreements set forth in this Agreement; and (iii) the Assumed
Liabilities.

11.4. Indemnification Procedures.

11.4.1. Any party seeking indemnification hereunder (the “Indemnified Party”,
which term shall include all Indemnified Parties if there be more than one)
shall promptly notify the indemnifying party or parties hereto (the
“Indemnifying Party”, which term shall include all Indemnifying Parties if there
be more than one) of any action, suit, proceeding, demand or breach (an
“Indemnity Claim”) with respect to which the Indemnified Party claims
indemnification hereunder, provided that failure of the Indemnified Party to
give such notice shall not relieve the Indemnifying Party of its obligations
under this Article 11 except to the extent of any actual damage or liability
caused by or arising out of such failure.

11.4.2. In the event that any Indemnified Party desires to make a claim against
an Indemnifying Party under Section 11.2 or 11.3 above in connection with any
suit, action, proceeding or demand at any time instituted against or made upon
an Indemnified Party by any third party for which the Indemnified Party may seek
indemnification hereunder (a “Third Party Claim”), the Indemnified Party shall
promptly notify the Indemnifying Party (which shall be the Stockholder if any
Seller is an Indemnifying Party) of such Third Party Claim and the Indemnified
Party’s claim of indemnification with respect thereto which notice shall include
a copy of any documents received in respect to the Third Party Claim. The
Indemnifying Party shall have forty-five (45) days after receipt of such notice
to notify the Indemnified Party if the Indemnifying Party has elected to assume
the defense of such Third Party Claim. If the Indemnifying Party elects to
assume the defense of such Third Party Claim, the Indemnifying Party shall be
entitled at its own expense to conduct and control the defense and settlement of
such Third Party Claim through counsel of its own choosing; provided, however,
that (i) the Indemnified Party may participate in the defense of such Third
Party Claim with its own counsel at its own expense, (ii) it will be
conclusively established for purposes of this Agreement that the claims made in
that proceeding are within the scope of and subject to indemnification, (iii) no
compromise or settlement of such claims may be effected by the Indemnifying
Party without the Indemnified Party’s consent (not to be unreasonably withheld,
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(A) there is no finding or admission of any violation of law or any violation of
the rights of any Person and no effect on any other claims that may be made
against the Indemnified Party, (B) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Party, and (C) the Indemnified Party
could not reasonably be expected to have any liability with respect to any
compromise or settlement of such claims effected without its consent.
Notwithstanding the foregoing, in no event shall the Indemnifying Party be
entitled to assume the defense of any such Third Party Claim if (a) such Third
Party Claim seeks an injunction or other equitable relief; (b) such Third Party
Claim, if adversely determined, could reasonably be expected to result in Losses
which, along with any other reasonably foreseeable Losses and any amounts
previously paid pursuant to this Article 11, would be in excess of the
Representation and Warranty Cap; or (c) such Third Party Claim is made by a
governmental or regulatory authority other than for Taxes that could not
reasonably be expected to have an adverse impact on Purchaser or its Affiliates
(it being understood and agreed that in any such case the Indemnifying Party may
participate in the defense of such Third Party Claim with its own counsel at its
own expense). If the Indemnifying Party fails to notify the Indemnified Party of
its assumption of the defense of such Third Party Claim within forty-five
(45) days after receipt of the Indemnified Party’s notice of a Third Party
Claim, the Indemnified Party shall be entitled to assume the defense of such
Third Party Claim at the expense of the Indemnifying Party. If the Indemnified
Party controls the defense of any such claim, the Indemnified Party shall:
(i) provide to the Indemnifying Party periodic reports on the status of the
claim and such other information as the Indemnifying Party may reasonably
request, (ii) allow the Indemnifying Party to participate in the defense of the
claim at its own expense, (iii) promptly communicate to the Indemnifying Party
all settlement offers given or received in the proceeding and (iv) obtain the
prior written consent of the Indemnifying Party (which shall not be unreasonably
withheld, conditioned or delayed) before entering into any settlement of the
claim; provided, however, that if the Indemnifying Party directs the Indemnified
Party to accept any monetary settlement offer that does not impose any
non-monetary obligations on the Indemnified Party and the Indemnifying Party
agrees to be liable for such settlement, and the Indemnified Party refuses to
accept such settlement offer, then the Indemnifying Party’s liability for such
claim shall be limited to the amount of such settlement offer. The fees and
expenses of counsel to the Indemnified Party with respect to a Third Party Claim
shall be considered Losses for purposes of this Agreement if (i) the Indemnified
Party controls the defense of such Third Party Claim pursuant to the terms of
this Section 11.4 or (ii) the Indemnifying Party assumes control of such defense
and the Indemnified Party reasonably concludes that the Indemnifying Party and
the Indemnified Party have conflicting interests or different defenses available
with respect to such Third Party Claim.

11.5. Method and Manner of Paying Indemnity Claims.

11.5.1. In the event of any Indemnity Claim under this Article 11, the
Indemnified Party shall advise the Indemnifying Party in writing of the amount
and circumstances surrounding such Indemnity Claim. If within thirty (30) days
the Indemnifying Party has not contested such Indemnity Claim in writing, then
subject to the limitations in Section 11.6, such amount shall be deemed the
amount of indemnification to which the Indemnified Party is entitled (the
“Indemnified Amount”). Subject to the limitations set forth in Section 11.6,
(i) any Indemnified Amount will be payable initially from the Escrow Amount in
accordance with the terms of the Escrow Agreement; and (ii) in the event the
Escrow Amount is insufficient to cover such claims and recovery thereof is not
prohibited pursuant to the provisions of Section 11.6, the

 

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Indemnified Party shall have recourse directly from the Indemnifying Parties
pursuant to the procedures set forth in this Section 11.5. Subject to the terms
of the Escrow Agreement and applicable securities’ laws, Sellers shall have the
right to sell any of the ORBCOMM Stock constituting part of Escrow Amount held
by the Escrow Agent pursuant to the Escrow Agreement; provided, that the Sellers
instruct the broker handling such sale to deposit all proceeds of any such sale
directly with the Escrow Agent to be held as part of the Escrow Amount pursuant
to the terms of the Escrow Agreement. With respect to any additional amount
indemnifiable by the Indemnifying Party hereunder (over and above the Escrow
Amount and if recoverable after consideration of the limitations in
Section 11.6), the Indemnifying Party shall pay the full amount thereof within
ten (10) days after the expiration of the period in which the Indemnified Party
may contest the claim for indemnification. Any Indemnified Amount (or portion
thereof) owed by an Indemnifying Party hereunder with respect to any Indemnity
Claim which is recoverable notwithstanding the limitations of Section 11.6 and
for which sufficient assets are not available to fully satisfy such claim under
the Escrow Agreement may be set-off by the Indemnified Party (at the sole option
of the Indemnified Party) against any amounts owed by the Indemnified Party to
the Indemnifying Party under this Agreement. The unpaid balance of any
Indemnified Amount shall bear interest at a rate per annum equal to the prime
rate as published in the Wall Street Journal plus two percent (2%) from the due
date thereof hereunder.

11.5.2. Any indemnification to which Purchaser is entitled under this Agreement
as a result of any Indemnity Claim shall first be satisfied by Purchaser’s
recouping all of such Indemnified Amount from the Escrow Amount in accordance
with the terms of the Escrow Agreement.

11.6. Limitations on Indemnification.

11.6.1. No Indemnifying Party shall be required to indemnify an Indemnified
Party hereunder for any Losses related to or arising directly or indirectly out
of any breach of or any inaccuracy in any representation or warranty (other than
any breach of or inaccuracy in any representation or warranty made by any Seller
in Sections 6.1 (Due Organization and Authority, 6.5 (Authority to Execute and
Perform Agreement), 6.14 (Environmental Matters), 6.13 (Employee Benefits), 6.15
(Taxes); 6.18 (Compliance with Laws) and 6.21 (Illegal Payments),
indemnification for which shall be as provided below) made by such Indemnifying
Party in or pursuant to this Agreement (including the Schedules and Exhibits
hereto) (such Losses being collectively referred to herein as the
“Representation and Warranty Losses”) except to the extent that the aggregate
amount of such Representation and Warranty Losses for which the Indemnified
Party is otherwise entitled to indemnification pursuant to this Article 11
exceeds $50,000 (the “Deductible Amount”) (it being understood and agreed that
the Deductible Amount is intended as a deductible, and no Indemnifying Party
shall be liable for any Representation and Warranty Losses less than the
Deductible Amount for which the Indemnified Party is otherwise entitled to
indemnification), whereupon the Indemnified Party shall be entitled to be paid
the excess of (x) the aggregate amount of all such Representation and Warranty
Losses over (y) the Deductible Amount, subject to the limitations on maximum
amount of recovery set forth in Section 11.6.2. All Losses (including, but not
limited to, any Losses related to or arising directly or indirectly out of any
breach of or any inaccuracy in any representation or warranty made by any Seller
in Sections 6.1 (Due Organization and Authority), 6.5 (Authority to Execute and
Perform Agreement), 6.14 (Environmental Matters), Sections 6.13 (Employee
Benefits), 6.15 (Taxes), 6.18 (Compliance with Laws), and 6.21 (Illegal
Payments)) other than Representation and Warranty Losses (all such Losses being
collectively referred to herein as “Purchase-Price Limited-Losses”) shall be
indemnified in their entirety by the Indemnifying Parties and shall not be
subject to the limitations set forth in this Section 11.6.1.

 

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11.6.2. The aggregate amount payable by all Indemnifying Parties in respect of
Representation and Warranty Losses (other than any breach of or inaccuracy in
any representation or warranty made by any Seller in Section 6.10 (Intellectual
Property) shall not exceed an amount equal to $750,000 (the “Representation and
Warranty Cap”). The aggregate amount payable by Sellers in respect of Losses
related to or arising directly or indirectly out of any breach of or inaccuracy
in any representation or warranty made by any Seller in Section 6.10
(Intellectual Property) and all claims for indemnification under Section 11.2(v)
shall not exceed an amount equal to $1,500,000.

11.6.3. Any indemnification payment made pursuant to Article 11 of this
Agreement shall be treated as an adjustment to the Purchase Price for tax
purposes.

11.6.4. The aggregate amount payable by all Indemnifying Parties in respect of
any Purchase-Price Limited-Loss shall not exceed an amount equal to the Purchase
Price, less amounts previously paid or to be paid by such Indemnifying Party
pursuant to this Article 11.

11.6.5. No Indemnifying Party shall be liable for: (i) a claim for breach of the
portions of Section 6.10 (Intellectual Property) which address title or for
indemnification under Section 11.2(v) unless a written claim for indemnification
in accordance with this Article 11 is given by Indemnified Party with respect
thereto prior to the date which is two (2) years following the Closing Date: or
(ii) a claim for any other Representation and Warranty Losses pursuant to this
Article 11 unless a written claim for indemnification in accordance with this
Article 11 is given by the Indemnified Party to the Indemnifying Party with
respect thereto prior to the date which is fifteen (15) months following the
Closing Date; except that these time limitations shall not apply to any Losses
related to or arising directly or indirectly out of any Purchase-Price
Limited-Losses, as to which in each case the applicable statute of limitations
shall apply. For purposes of this Section 11.6.5, the portions of Section 6.10
(Intellectual Property) which address title are limited to the representations
in Section 6.10.6.1, 6.10.6.3, 6.10.6.7 and 6.10.6.8 hereof.

11.6.6. The amount of Losses for which indemnification is provided under this
Agreement will be (i) increased to take account of any Tax cost incurred
(grossed up for such increase) by the Indemnified Party arising from the receipt
of indemnity payments hereunder (unless such indemnity payment is treated as an
adjustment to the purchase price for tax purposes) and (ii) reduced to take
account of any Tax benefit realized by the Indemnified Party arising from the
incurrence or payment of any such Losses. In computing the amount of any such
Tax cost or Tax benefit, the Indemnified Party will be deemed to be subject to
the applicable Federal, state, local and/or local country income taxes at the
maximum statutory rate then in effect. Any indemnity payment made pursuant to
this Agreement will be treated as an adjustment to the purchase price for Tax
purposes unless a determination (as defined in Section 1313 of the Code) or a
similar event under foreign Tax Law with respect to the Indemnified Party causes
any such payment not to constitute an adjustment to the purchase price for
United States Federal income tax purposes or foreign Tax purposes, as the case
may be.

 

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11.6.7. The amount of Losses recoverable by an Indemnified Party under this
Article 11 with respect to an indemnity claim shall be reduced by the amount of
any payment received by such Indemnified Party (or an Affiliate thereof), with
respect to the Losses to which such indemnity claim relates, from an insurance
carrier (after deducting reasonable costs and expenses incurred in connection
with recovery of such proceeds and premium increases directly related to such
insurance claims). An Indemnified Party shall use reasonable commercial efforts
to pursue, and to cause its Affiliates to pursue, all insurance claims to which
it may be entitled in connection with any Losses it incurs, and the parties
shall cooperate with each other in pursuing insurance claims with respect to any
Losses or any indemnification obligations with respect to Losses but in no event
will an Indemnified Party be required to commence litigation to recover proceeds
under its insurance policies. If an Indemnified Party (or an Affiliate) receives
any insurance payment in connection with any claim for Losses for which it has
already received an indemnification payment from the Indemnifying Party, it
shall pay to the Indemnifying Party, within 30 days of receiving such insurance
payment, an amount (not to exceed the amount previously paid by the Indemnifying
Party under this Article 11 with respect to such claim) equal to the excess of
(A) the amount previously received by the Indemnified Party under this Article
11 with respect to such claim plus the amount of the insurance payments received
with respect to such claim, over (B) the amount of Losses with respect to such
claim which the Indemnified Party has become entitled to receive under this
Article 11.

11.7. Exclusive Remedy. Except for claims arising under Section 4.3,
Section 14.3 or Article 13 and claims based on fraud, from and after Closing
Date the sole recourse and remedy for any and all claims which are or could be
the subject of indemnification under this Article 11 shall be indemnification
pursuant to this Article 11. Purchaser is not entitled to indemnification
pursuant to Article 11 to the extent that the Purchaser has been compensated
therefor pursuant to Section 4.3.

ARTICLE 12

TERMINATION

12.1. Termination of Agreement. This Agreement may be terminated under any of
the following circumstances by notice given on or before the Closing Date:

12.1.1. By mutual consent of Sellers and Purchaser;

12.1.2. By Purchaser based on the failure of any of the conditions set forth in
Article 9 hereof on or before April 30, 2013 other than as a result of a breach
by Purchaser of this Agreement;

12.1.3. By Sellers based on the failure of any of the conditions set forth in
Article 10 hereof on or before April 30, 2013 other than as a result of a breach
by Sellers of this Agreement;

12.1.4. Purchaser shall have the right to terminate if, during the period from
the date hereof to the Closing Date, Purchaser shall learn of any fact or
condition which is materially at variance with one or more of the warranties or
representations of Sellers set forth in this Agreement, or Sellers shall fail in
any material respect to perform the covenants of Sellers set forth in Article 8
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12.1.5. Sellers shall have the right to terminate if, during the period from the
date hereof to the Closing Date, Sellers shall learn of any fact or condition
which is materially at variance with one or more of the warranties or
representations of Purchaser set forth in this Agreement;

12.1.6. Purchaser and Sellers shall each have the right to terminate if a
proceeding or formal investigation shall have been commenced by any Governmental
Authority or by any other person or entity with respect to any of the
transactions contemplated in this Agreement;

12.1.7. Purchaser shall have the right to terminate if a Material Adverse Change
to the Company has occurred, or Sellers shall have suffered a material loss or
damage to any of the assets to be purchased pursuant to this Agreement, which
loss or damage would materially impair the ability of Purchaser to conduct the
Business upon consummation of this Agreement;

12.1.8. Sellers shall have the right to terminate if a Material Adverse Change
to the Purchaser has occurred.

12.1.9. Either Purchaser or Sellers may, at its or their election, waive any of
its or their rights to terminate this Agreement under the provisions of this
Article 12, and shall be deemed to have waived such rights upon completion of
the Closing under this Agreement;

12.2. Rights upon Termination.

12.2.1. Except as provided in Section 12.2.2, in the event of a termination of
this Agreement, each party shall pay the costs and expenses incurred by it in
connection with this Agreement, and no party (or any of its members, managers,
stockholders, directors, employees, agents, or representatives) shall be liable
to any other party for any costs, expenses, damage or loss of anticipated
profits hereunder.

12.2.2. In the event either party shall be in breach of Section 8.2 or any
Seller is in breach of Section 8.5 hereof, in addition to any rights or remedies
provided for in this Agreement the non-breaching party shall have the rights and
remedies available at law or equity. Nothing in this Agreement shall impair the
right of any party to obtain such equitable remedies, including specific
performance, as may be available to it under applicable law and the prevailing
party in connection with such equitable action shall be entitled to its
reasonable costs and expenses, including legal fees, incurred in connection with
such equitable action.

 

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ARTICLE 13

CONFIDENTIALITY AND NON-SOLICITATION

13.1. Confidential Information. As used herein, “Confidential Information” means
any information regarding the Business, including a formula, pattern,
compilation, list, program, device, method, technique, or process, that:
(i) derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy. The types and categories of information which Purchaser
considers to be, and Sellers acknowledge as, Confidential Information include,
but are not limited to, the following: the names, addresses, requirements,
buying habits and other proprietary information regarding past, present and
potential customers, employees and suppliers of the Company; customer and
supplier contracts and transactions or price lists of the Company; products,
services, programs and processes sold, licensed or developed by the Company;
past, present and/or future development projects and ideas, strategic plans and
forecasts of the Company; financial reports and information and/or marketing
data respecting the conduct of the past, present or future phases of Business of
the Company; sales forecasts; experimental and research work; methods of
business operations, Technology and trade secrets of the Company; and other
information that is proprietary and confidential.

13.2. Agreement Not To Disclose Confidential Information. Beginning on the
Closing Date, each Seller agrees to retain the Confidential Information it is or
becomes aware of in absolute confidence; not to use or exploit the Confidential
Information in any way except in the performance of duties of Stockholder while
employed by Purchaser; and not to disclose the Confidential Information directly
or indirectly to any person or organization at any time unless Purchaser gives
its express written consent to disclosure; provided, however, that Sellers shall
be under no such obligation as to information which (a) prior to the time of
disclosure by Sellers has become within the public domain through no fault of
Sellers, (b) is independently made available to a Seller in good faith by a
third party who is not bound by a confidentiality agreement with Purchaser
and/or any Affiliate of Purchaser, (c) is required to be disclosed by legal
process or proceeding or in connection with completion of financial statements
and filing of tax returns by Sellers, or (d) is disclosed by Sellers in
connection with the defense or assertion of any claim hereunder or under the
documents executed in connection herewith.

13.3. Agreement Not To Interfere With Relationships. Each Seller agrees, for a
period of five (5) years following the Closing Date (or if this period is
unenforceable, then for such period as shall be enforceable), not to interfere
with or adversely affect Purchaser’s relationships in respect of the Business,
or such relationships of any Affiliate of Purchaser, with any person, firm,
association, corporation or other entity with whom the Company actually did
business or had a personal contact prior to the Closing Date. Each Seller will
not divert or change, or attempt to divert or change, any such relationship to
the detriment of Purchaser and/or any Affiliate of Purchaser or to the benefit
of any other person, firm, association, corporation or other entity.

13.4. Agreement Not To Solicit Employees. Each Seller will not, for a period of
two (2) years following the Closing Date (or if this period is unenforceable,
for such period as shall be enforceable), induce or seek to induce any employee
of Purchaser and/or any Affiliate of Purchaser (other than either Stockholder or
a family member of a Stockholder) to terminate his or her employment
relationship with Purchaser and/or any Affiliate of Purchaser.

 

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13.5. Enforceability. The provisions of this Article 13 shall survive the
Closing of the transactions contemplated in this Agreement. Each Seller agrees
that because information possessed or obtained by Sellers is proprietary and
confidential, Purchaser will suffer irreparable injury for which there is no
adequate remedy at law if either Seller violates in any manner any covenant
provided in this Article 13. Therefore, Purchaser shall be entitled to obtain a
temporary restraining order without prior notice, an injunction and/or other
equitable relief without posting security, in addition to all other remedies
available to it to prevent breach of the provisions of this Article 13, or any
part of it, and to secure the enforcement of such provisions.

ARTICLE 14

MISCELLANEOUS

14.1. Benefit and Assignment. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto, their legal representatives, successors, and
assignees. This Agreement may not be assigned by either party, except that
Purchaser shall have the right to assign this Agreement to any entity controlled
by Purchaser. No such assignment by Purchaser shall relieve Purchaser of its
obligations hereunder.

14.2. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without application of
conflicts of laws principles.

14.3. Specific Performance. Each party acknowledges and agrees that the other
party or parties would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each party agrees that the other party or
parties may be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the parties and the
matter.

14.4. Expenses and Taxes. Except as otherwise provided herein, all expenses
incurred in connection with this Agreement, or the transactions herein provided
for, shall be paid by either Purchaser or Sellers, whichever incurs such
expenses. Sellers shall pay all taxes imposed on Sellers under the laws
applicable to the transfer of the Purchased Assets.

14.5. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, constitute one and the same document. The signature of any party
to any counterpart shall be deemed a signature to, and may be appended to, any
other counterpart. Any party executing this Agreement by facsimile transmission
shall promptly deliver a manually executed counterpart, provided that any
failure to do so shall not affect the validity of the counterpart executed by
facsimile transmission.

 

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14.6. Headings. All section headings herein are inserted for convenience only
and shall not modify or affect the construction or interpretation of any
provision of this Agreement.

14.7. Amendment, Modification and Waiver. This Agreement may not be modified,
amended or supplemented except by the written agreement of Purchaser and
Sellers. Any party hereto may waive in writing any term or condition contained
in this Agreement and intended to be for its benefit; provided, however, that no
waiver by any party, whether by conduct or otherwise, in any one or more
instances, shall be deemed or construed as a further or continuing waiver of any
such term or condition. Each amendment, modification, supplement or waiver shall
be in writing and signed by the party or parties to be charged.

14.8. Schedules. The Sellers shall be entitled to submit to the Purchaser at the
Closing supplements to the Schedules hereto containing any matters or actions
solely to the extent occurring after the date hereof (and not prohibited
pursuant to the terms hereof) which, if occurring prior to the date hereof,
would have been required to be set forth or described on such schedules, which
shall update the representations and warranties as of the date hereof, and this
Agreement shall be construed for all purposes of this Agreement (other than
Section 12.1.4) as so updated; provided, however, that Purchaser shall have the
right to terminate this Agreement as a result of any such update to the
Schedules hereto to the extent provided in Section 12.1.4.

14.9. Entire Agreement. This Agreement and its exhibits, schedules and other
documents expressly required to be delivered at Closing hereunder or delivered
herewith represent the entire understanding of the parties as to the subject
matter hereof and no provision or document of any kind shall be included in or
form a part of this Agreement unless hereafter signed and delivered to the other
party or parties by the party to be charged. The Agreement expressly supersedes
the letter of intent dated as of January 18, 2013, each executed by Sellers and
Purchaser. The Confidentiality Agreement shall bind the parties solely to the
limited extent expressly set forth in this Agreement.

14.10. Sellers’ and Purchaser’s Acknowledgment. Sellers and Purchaser expressly
agree and acknowledge that they have had sufficient time and opportunity to
consider the terms of this Agreement and to consult an attorney of their choice
and execute it with full knowledge and understanding of its contents and without
having relied on any statement or representation by Purchaser or Sellers, their
representatives or anyone retained by them, except as expressly stated herein.

14.11. Notices. All notices, demands and other communications hereunder shall be
in writing or by written telecommunication, and shall be deemed to have been
duly given if delivered personally or if mailed by certified mail, return
receipt requested, postage prepaid, or if sent by overnight courier, or sent by
written telecommunication, as follows:

 

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To Sellers:

  

MobileNet, Inc.

13000 Deerfield Parkway, Suite 325

Milton, Georgia 30004

 

and

 

William J. Purdie III

1985 Birmingham Road

Milton, Georgia 30004

With copy to:

  

Robert B. Goldberg, Esq.

Ellis Funk, P.C.

3490 Piedmont Road, Suite 400

Atlanta, Georgia 30305

Fax: 404-233-2188

To Purchaser:

  

ORBCOMM Inc.

395 W. Passaic Street, Suite 325

Rochelle Park, NJ 07662

Attn: General Counsel

Fax: (703) 433-6400

Any such notice shall be effective (a) if delivered personally, when received,
(b) if sent by overnight courier, when receipted for, (c) if mailed, five
(5) days after being mailed as described above, and (d) if sent by written
telecommunication with confirmed receipt, when dispatched.

14.12. Disclaimer of Warranties. It is the explicit intent of each party hereto
that the Parties are not making any representation or warranty whatsoever,
express or implied, beyond those expressly given in this Agreement, including,
but not limited to, any implied warranty or representation as to the value,
condition, merchantability or suitability as to any of the Purchased Assets.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement
to be executed as of the date first above written.

 

ORBCOMM Inc.

By:

   

Its:

   

MobileNet, Inc.

By:

   

Its:

     

William J. Purdie III

 

Ruby W. Purdie

 

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