Document:

exv10w1

 

EXHIBIT
10.1

      

ASSET PURCHASE AGREEMENT

between

SKYGUARD, LLC

and

BELL INDUSTRIES, INC.

Dated as of February 14, 2008

      

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	1	 
	1.1 Certain Definitions
	 	 	1	 
	1.2 Terms Defined Elsewhere in this Agreement
	 	 	6	 
	1.3 Other Definitional and Interpretive Matters
	 	 	7	 
	ARTICLE II PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
	 	 	8	 
	2.1 Purchase and Sale of Assets
	 	 	8	 
	2.2 Excluded Assets
	 	 	9	 
	2.3 Assumption of Liabilities
	 	 	11	 
	2.4 Excluded Liabilities
	 	 	11	 
	2.5 Consent of Third Parties
	 	 	12	 
	2.6 Bulk Sales Laws
	 	 	12	 
	2.7 Purchase Price Allocation
	 	 	13	 
	2.8 Allocation of Taxes and Expenses
	 	 	13	 
	2.9 Power of Attorney; Right of Endorsement
	 	 	14	 
	ARTICLE III CONSIDERATION
	 	 	14	 
	3.1 Consideration
	 	 	14	 
	3.2 Payment of Purchase Price
	 	 	14	 
	ARTICLE IV CLOSING
	 	 	14	 
	4.1 Closing Date
	 	 	14	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER
	 	 	15	 
	5.1 Organization and Good Standing
	 	 	15	 
	5.2 Authorization of Agreement
	 	 	15	 
	5.3 Conflicts; Consents of Third Parties; Subsidiaries
	 	 	15	 
	5.4 Schedule of Assets and Liabilities
	 	 	16	 
	5.5 Title to Purchased Assets
	 	 	16	 
	5.6 Compliance with Laws; Permits
	 	 	16	 
	5.7 Purchased Contracts
	 	 	17	 
	5.8 Legal Proceedings
	 	 	17	 
	5.9 Intellectual Property
	 	 	17	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	5.10 Labor
	 	 	18	 
	5.11 Environmental Matters
	 	 	18	 
	5.12 Actions
	 	 	19	 
	5.13 Customers and Suppliers
	 	 	19	 
	5.14 Foreign Corrupt Practices Act and Export Restrictions
	 	 	19	 
	5.15 Taxes
	 	 	20	 
	5.16 Personal Property
	 	 	20	 
	5.17 Product Warranty; Product Liability
	 	 	20	 
	5.18 Financial Advisors
	 	 	20	 
	5.19 Material Disclosure
	 	 	20	 
	5.20 No Other Representations or Warranties; Schedules
	 	 	21	 
	5.21 Certain Payments; Certain Interests
	 	 	21	 
	5.22 Employee Benefits
	 	 	22	 
	5.23 Miscellaneous
	 	 	23	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER
	 	 	23	 
	6.1 Organization and Good Standing
	 	 	23	 
	6.2 Authorization of Agreement
	 	 	23	 
	6.3 Conflicts; Consents of Third Parties
	 	 	24	 
	6.4 Litigation
	 	 	24	 
	6.5 Financial Advisors
	 	 	24	 
	6.6 Condition of the SkyGuard Business
	 	 	24	 
	6.7 Condition of the FleetHawk Business
	 	 	25	 
	6.8 Capitalization
	 	 	25	 
	ARTICLE VII COVENANTS
	 	 	25	 
	7.1 Agreements
	 	 	25	 
	7.2 Consents
	 	 	25	 
	7.3 Further Assurances
	 	 	26	 
	7.4 Raj Cherukuri and Ratan Guduru
	 	 	26	 
	7.5 Confidentiality
	 	 	26	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	7.6 Preservation of Records
	 	 	27	 
	7.7 Publicity
	 	 	27	 
	7.8 Non-Competition; Non-Solicitation
	 	 	27	 
	7.9 Use of Trademarks
	 	 	29	 
	7.10 Tax Matters
	 	 	29	 
	7.11
Disclosure Schedules; Supplementation and Amendment of Schedules
	 	 	29	 
	7.12 Access to Information
	 	 	30	 
	7.13 GSA Contract
	 	 	30	 
	7.14 Financing Letter
	 	 	30	 
	ARTICLE VIII EMPLOYEES AND EMPLOYEE BENEFITS
	 	 	30	 
	8.1 Employment
	 	 	30	 
	8.2 Employee Benefits
	 	 	31	 
	8.3 Employee Rights
	 	 	32	 
	8.4 Successors and Assigns
	 	 	32	 
	8.5 Cooperation
	 	 	33	 
	8.6 Employee Obligations of Confidentiality
	 	 	33	 
	ARTICLE IX CONDITIONS TO SIGNING AND CLOSING
	 	 	33	 
	9.1 Fulfillment of Conditions Precedent to Obligations of Purchaser
	 	 	33	 
	9.2 Fulfillment of Conditions Precedent to Obligations of Seller
	 	 	34	 
	ARTICLE X INDEMNIFICATION
	 	 	35	 
	10.1 Survival of Representations and Warranties
	 	 	35	 
	10.2 Indemnification by Seller
	 	 	36	 
	10.3 Indemnification by Purchaser
	 	 	37	 
	10.4 Indemnification Procedures
	 	 	37	 
	10.5 Certain Limitations on Indemnification
	 	 	39	 
	10.6 Calculation of Losses
	 	 	39	 
	10.7 Tax Treatment of Indemnity Payments
	 	 	39	 
	10.8 Exclusive Remedy
	 	 	40	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	ARTICLE XI MISCELLANEOUS
	 	 	40	 
	11.1 Expenses
	 	 	40	 
	11.2 Submission to Jurisdiction; Consent to Service of Process
	 	 	40	 
	11.3 Entire Agreement; Amendments and Waivers
	 	 	41	 
	11.4 Governing Law
	 	 	42	 
	11.5 Notices
	 	 	42	 
	11.6 Severability
	 	 	43	 
	11.7 Binding Effect; Assignment
	 	 	43	 
	11.8 Non-Recourse
	 	 	43	 
	11.9 Counterparts
	 	 	43	 

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ASSET PURCHASE AGREEMENT

     This ASSET PURCHASE AGREEMENT (the “Agreement”), dated as of February 14, 2008, is
between SKYGUARD, LLC, a Delaware limited liability company (“Purchaser”), and BELL
INDUSTRIES, INC., a California corporation (“Seller”).

W I T N E S S E T H:

     WHEREAS, Seller presently conducts the AVL Business (as hereinafter defined);

     WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to
acquire substantially all of Seller’s assets, properties, rights, and interests used in or relating
to the AVL Business for the Purchase Price (as hereinafter defined) and the assumption by Purchaser
of certain specified liabilities relating to the AVL Business, all as more specifically provided
herein; and

     WHEREAS, certain terms used in this Agreement are defined in Section 1.1;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Certain Definitions.

     For purposes of this Agreement, the following terms shall have the meanings specified in this
Section 1.1:

     “Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person, and the term “control” (including the terms “controlled
by” and “under common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of such Person, whether
through ownership of voting securities, by contract or otherwise.

     “AVL Business” means the business of Seller consisting of the production, sale, and
operation of the wireless automatic vehicle location devices and services provided by Seller, other
than those utilized in the SkyTel Business (excluding the Software, for which Purchaser will
receive a non-exclusive license), and that, among other things, are currently marketed by Seller
under the brands of “SkyGuard” and “FleetHawk”. For purposes of this Agreement, the portion of the
AVL Business marketed under the brand of “SkyGuard” shall be known as the “SkyGuard Business,” and
the portion of the AVL

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Business marketed under the brand of “FleetHawk” shall be known as the “FleetHawk Business”.

     “Business Day” means any day of the year on which national banking institutions in New
York are open to the public for conducting business and are not required or authorized to close.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Contract” means any written contract, agreement, indenture, note, bond, mortgage,
loan, instrument, lease, license, or other arrangement, including but not limited to distribution
and sales representative agreements, and other agreements (including any amendments and other
modifications thereto) relating solely to the AVL Business, unless otherwise specified herein
(including the schedules hereto), to which Seller is a party or by which the Purchased Assets are
bound.

     “Documents” means all files, documents, instruments, papers, books, reports, records,
tapes, microfilms, photographs, letters, customer and supplier lists, regulatory filings, operating
data and plans, technical documentation (design specifications, functional requirements, operating
instructions, logic manuals, flow charts, etc.), user documentation (installation guides, user
manuals, training materials, release notes, working papers, etc.), marketing documentation (sales
brochures, flyers, pamphlets, web pages, etc.), and other similar materials related primarily to
the AVL Business and the Purchased Assets in each case whether or not in electronic form;
provided that “Documents” shall not include duplicate copies of such
Documents retained by Seller or its Affiliates subject to the obligations relating to the use and
disclosure thereof set forth in this Agreement.

     “Employee” means, as of any applicable date, all individuals who are employed by
Seller as common law employees in connection with the AVL Business, including all active full-time
and part-time employees, employees on vacation or approved personal leave, workers’ compensation,
military leave with reemployment rights under federal Law, maternity leave, leave under the Family
and Medical Leave Act of 1993, short-term disability, long-term disability, and employees on other
approved leaves of absence with a legal or contractual right to reinstatement.

     “Employee Benefit Plan” means any employee benefit plan (as defined in Section 3(3) of
ERISA) or any other material stock award, stock option, stock purchase, bonus or other incentive
compensation, vacation, change of control, educational assistance, deferred compensation, salary
continuation, disability, retirement, welfare benefit, severance, or life insurance plan or
agreement in which current or former Employees participate.

     “Environmental Law” means any applicable Law currently in effect relating to the
protection of the environment or natural resources, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. App. § 1801 et

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seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act
(42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601
et seq.), and the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §
136 et seq.), as each has been amended and the regulations promulgated pursuant
thereto.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “ERISA Affiliate” means, with respect to any Person, all other Persons that are
treated as a single employer with that Person pursuant to sections 414(b), 414(c), 414(m), and/or
414(o) of the Code.

     “GAAP” means generally accepted accounting principles in the United States as of the
date hereof.

     “Governmental Body” means any government or governmental or regulatory body thereof,
or political subdivision thereof, whether foreign, federal, state, or local, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or private).

     “Intellectual Property” means, whether licensed or unlicensed, statutory or
non-statutory, (a) inventions, improvements thereto and patents, patent applications, and patent
disclosures, together with reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) registered and unregistered trademarks, service marks,
trade dress, logos, trade names, and corporate names, including all goodwill associated therewith,
and all applications, registrations, and renewals in connection therewith, (c) copyrightable works,
all copyrights and all applications, registrations and renewals in connection therewith, (d) trade
secrets, know-how, customer lists, supplier lists, pricing and cost information, business and
marketing plans and other confidential business information, (e) computer programs and related
software, (f) other proprietary rights including without limitation, proprietary business
information and software and (g) copies and tangible embodiments thereof.

     “IRS” means the United States Internal Revenue Service and, to the extent relevant,
the United States Department of Treasury.

     “Knowledge of Seller” means the actual knowledge of those Persons identified on
Schedule 1.1(b) and all knowledge which was or should have been obtained upon inquiry by
such Persons.

     “Law” means any foreign, federal, state, local law, statute, code, ordinance, rule or
regulation.

     “Legal Proceeding” means any judicial, administrative or arbitral actions, suits or
proceedings (public or private) by or before a Governmental Body.

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     “Liability” means any debt, liability or obligation (whether direct or indirect,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due),
and including all costs and expenses relating thereto.

     “Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement, servitude or transfer
restriction.

     “Material Adverse Effect” means, except to the extent provided on Schedule
1.1(c) hereto, an effect, event, development, change, occurrence or state of facts after
January 30, 2007 as to the FleetHawk Business or after November 30, 2007 as to the SkyGuard
Business which is materially adverse to the AVL Business, Purchased Assets, properties, financial
condition, or results of operations of Seller (as they specifically pertain to the AVL Business),
in each case, other than any effect, event, development, change, occurrence or state of facts
arising out of or resulting from (A) general changes or conditions in the U.S. economy or
securities or financial markets, (B) changes or conditions affecting the industries in which Seller
operates (but only to the extent that the impact of such changes or conditions on Seller is not
materially disproportionate to the impact on other Persons conducting business in such industries),
(C) changes in Law or GAAP (but only to the extent that the impact of such changes on Seller is not
materially disproportionate to the impact on other Persons conducting business in the industries in
which Seller conducts business), (D) the occurrence of any war, sabotage, armed hostilities or acts
of terrorism or any escalation or material worsening of any such war, sabotage, armed hostilities
or acts of terrorism existing or underway as of the date hereof (but only to the extent that the
impact of such changes on Seller is not materially disproportionate to the impact on other Persons
conducting business in the industries in which Seller conducts business), (E) any action taken by
Purchaser or any of its Affiliates in bad faith or in contravention of the terms of this Agreement,
or (F) the announcement of this Agreement, compliance with the terms of this Agreement, or the
consummation of the transactions contemplated by this Agreement (except with respect to the loss of
employees or customers arising therefrom).

     “Order” means any order, injunction, judgment, decree, ruling, writ, assessment or
arbitration award of a Governmental Body.

     “Ordinary Course of Business” means the ordinary and usual course of normal day-to-day
operations of the AVL Business, as conducted by Seller.

     “PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

     “Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Body.

     “Permitted Exceptions” means (i) statutory liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or validity of which is
being contested in good faith by appropriate proceedings; (ii) mechanics’, carriers’,

4

 

workers’, repairers’ and similar Liens arising or incurred in the Ordinary Course of Business;
and (iii) valid and enforceable title of a lessor under a capital or operating lease.

     “Person” means any individual, corporation, partnership, limited liability company,
firm, joint venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.

     “Products” means any and all products developed, or being developed manufactured, or
being manufactured, marketed or sold by, for the AVL Business.

     “Purchased Contracts” means Contracts of Seller related to the AVL Business, including
all purchase orders and inventory purchase commitments relating to the SkyGuard and FleetHawk
products, which Contracts are set forth on Schedule 2.1(b) hereto.

     “Qualified Plan” means any Employee Benefit Plan that is intended to be tax qualified
under Section 401(a) of the Code.

     “SkyTel Business” means the business of Seller consisting of the production, sale, and
operation of the wireless devices and services provided by Seller, including, but not limited to,
one-way and two-way paging services, air-to-ground wireless services, cellular wireless services
and wireless telemetry services (other than such wireless telemetry services sold under the
FleetHawk and SkyGuard tradenames).

     “Sublease” the sublease in the form attached hereto as Exhibit C between
Seller and Purchaser.

     “Subsidiary” means any Person of which a majority of the outstanding share capital,
voting securities or other voting equity interests are owned, directly or indirectly, by Seller.

     “Tax” or “Taxes” means (i) any and all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment, excise, severance,
stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever; and (ii) all interest, penalties, fines, additions to tax or additional
amounts imposed by any Taxing Authority in connection with any item described in clause (i).

     “Taxing Authority” means the IRS and any other Governmental Body responsible for the
administration of any Tax.

     “Tax Return” means any return, report or statement required to be filed with respect
to any Tax (including any attachments thereto, and any amendment thereof), including any
information return, claim for refund, amended return or declaration of estimated Tax, and
including, where permitted or required, combined, consolidated or

5

 

unitary returns for any group of entities that includes Seller, any of the Subsidiaries, or any of
their Affiliates.

     “Transfer Documents” means the Bill of Sale and the Assignment and Assumption
Agreement.

     “Transition Services Agreement” means the transition services agreement in the form
attached hereto as Exhibit D between Seller and Purchaser.

     “Wholesale Agreement” means the wholesale agreement in the form attached hereto as
Exhibit E between Seller and Purchaser.

     1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the
following terms have meanings set forth in the sections indicated:

	 	 	 
	Term	 	Section
	Accounts Receivable
	 	2.1(d)
	Agreement
	 	Preamble
	Assumed Liabilities
	 	2.3
	Assignment and Assumption Agreement
	 	9.1(f)
	AVL Intellectual Property
	 	2.1(e)
	Basket
	 	10.5(a)
	Bill of Sale
	 	9.1(e)
	Closing
	 	4.1
	Closing Date
	 	4.1
	Confidentiality Agreement
	 	7.5(a)
	Customers
	 	5.13(a)
	Dispute
	 	11.2(a)
	Dispute Notice
	 	11.2(a)
	Excluded Assets
	 	2.2
	Excluded Contracts
	 	2.2(a)
	Excluded Liabilities
	 	2.4
	Indemnification Claim
	 	10.4(b)
	Licensed Intellectual Property
	 	5.8(a)
	Losses
	 	10.2(a)
	Nonassignable Assets
	 	2.5(b)
	Pre-Closing Covenants
	 	10.1(b)
	Post-Closing Covenants
	 	10.1(b)
	PP&E
	 	2.1(g)
	Prepaids
	 	2.1(f)
	Price Allocation
	 	2.7(a)
	Property Taxes
	 	2.8(a)
	Purchased Assets
	 	2.1
	Purchase Price
	 	3.1
	Purchaser
	 	Preamble
	Purchaser Documents
	 	6.2

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	Term	 	Section
	Purchaser Indemnified Parties
	 	10.2(a)
	Purchaser Plans
	 	8.2(b)
	Purchaser Savings Plan
	 	8.2(d)
	Seller
	 	Preamble
	Seller Documents
	 	5.2
	Seller Indemnified Parties
	 	10.3(a)
	Solicit
	 	7.8(b)
	Standard Procedure
	 	8.1(c)
	Subject Marks
	 	7.9(a)
	Suppliers
	 	5.13(b)
	Survival Period
	 	10.1(b)
	Transferred Employees
	 	8.1(a)
	Transfer Taxes
	 	7.10

     1.3 Other Definitional and Interpretive Matters.

          (a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules
of interpretation shall apply:

     Calculation of Time Period. When calculating the period of time before which, within
which or following which, any act is to be done or step taken pursuant to this Agreement, the date
that is the reference date in calculating such period shall be excluded. If the last day of such
period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

     Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.

     Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement. Any matter or item
disclosed on one Schedule shall be deemed to have been disclosed on each other Schedule.
Disclosure of any item on any Schedule shall not constitute an admission or indication that such
item or matter is material or would have a Material Adverse Effect. No disclosure on a Schedule
relating to a possible breach or violation of any Contract, Law or Order shall be construed as an
admission or indication that breach or violation exists or has actually occurred. Any capitalized
terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set
forth in this Agreement.

     Gender and Number. Any reference in this Agreement to gender shall include all
genders, and words imparting the singular number only shall include the plural and vice versa.

     Headings. The provision of a Table of Contents, the division of this Agreement into
Articles, Sections and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or

7

 

interpreting this Agreement. All references in this Agreement to any “Section” are to the
corresponding Section of this Agreement unless otherwise specified.

     Herein. The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to
this Agreement as a whole and not merely to a subdivision in which such words appear unless the
context otherwise requires.

     Including. The word “including” or any variation thereof means (unless the context of
its usage otherwise requires) “including, without limitation” and shall not be construed to limit
any general statement that it follows to the specific or similar items or matters immediately
following it.

     Reflected On or Set Forth In. An item arising with respect to a specific
representation or warranty shall be deemed to be “reflected on” or “set forth in” a balance sheet
or financial statements, to the extent any such phrase appears in such representation or warranty,
if (a) there is a reserve, accrual or other similar item underlying a number on such balance sheet
or financial statements that related to the subject matter of such representation, (b) such item is
otherwise specifically set forth on the balance sheet or financial statements or (c) such item is
reflected on the balance sheet or financial statements and is specifically set forth in the notes
thereto.

          (b) The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

     2.1 Purchase and Sale of Assets. On the terms and subject to the conditions set forth
in this Agreement, at the Closing Purchaser shall purchase, acquire and accept from Seller, and
Seller shall sell, transfer, assign, convey and deliver to Purchaser all of the “Purchased
Assets,” consisting of all of the assets, properties, rights, and interests wherever situated
and of any kind or nature whatsoever owned by Seller as of the Closing Date and used directly or
indirectly in the operation of the AVL Business other than the Excluded Assets. The Purchased
Assets shall be transferred to Purchaser by Seller free and clear of all Liens other than Permitted
Exceptions. The “Purchased Assets” include, but are not limited to, each of the following
assets: 

          (a) All property, rights, interests and assets of and relating to the AVL Business as set
forth or reflected on the Schedule of Assets and Liabilities attached hereto as Schedule
2.1(a) or otherwise scheduled in this Agreement.

          (b) Contracts. All rights of Seller under the Purchased Contracts set forth on
Schedule 2.1(b) hereto including all claims or causes of action with respect to the
Purchased Contracts;

8

 

          (c) Inventory. All inventory used or intended to be used primarily in connection with
the AVL Business, including but not limited to all new materials, work in process and finished
goods and set forth on Schedule 2.1(c) hereto that is not also utilized in the Seller’s
SkyTel Business;

          (d) Accounts Receivable. All accounts receivable and any evidence thereof relating
to or arising out of the AVL Business and operation thereof and set forth on Schedule
2.1(d) hereto, and any payments received with respect thereto after the Closing Date (including
cash or check payments in transit on the Closing Date) (collectively, “Accounts
Receivable”); Schedule 2.1(d) sets forth an itemized list of the Accounts Receivable as
of the day immediately preceding the date hereof, identifying such Accounts Receivable by obligor’s
name, aging and amount; Seller covenants and agrees to promptly remit to Purchaser collections of
any Accounts Receivable by Seller on or after the Closing Date;

          (e) Intellectual Property. The Intellectual Property set forth on Schedule
2.1(e) hereto (the “AVL Intellectual Property”);

          (f) Prepaid Expenses and Deposits. All deposits (including customer deposits and
security deposits for rent, electricity, telephone or otherwise) and prepaid charges and expenses,
including any prepaid rent, of Seller related to any Purchased Assets set forth on Schedule
2.1(f) hereto (“Prepaids”);

          (g) Property, Plant, and Equipment. All computer equipment, office equipment,
supplies, and other tangible personal property located at the Seller’s office facility in Clinton,
MS and utilized in the AVL Business and set forth on Schedule 2.1(g) hereto (collectively,
“PP&E”), other than such PP&E which is an Excluded Asset;

          (h) Business Records. All Documents used in the AVL Business, including Documents in
Seller’s possession relating to Products, services, marketing, advertising, promotional materials,
Intellectual Property, and all files, customer files and documents (including credit information),
supplier lists, records, literature and correspondence but excluding such files as may be required
under applicable Law regarding privacy.

          (i) Goodwill. All goodwill and other intangible assets associated with the AVL
Business.

          (j) Permits. All Permits used by Seller in the AVL Business to the extent
transferable to Purchaser, as listed on Schedule 2.1(j) attached hereto;

     2.2 Excluded Assets. Nothing herein contained shall be deemed to sell, transfer,
assign or convey the Excluded Assets to Purchaser, and Seller shall retain all right, title and
interest to, in and under the Excluded Assets. “Excluded Assets” shall mean each of the
following assets:

          (a) Excluded Contracts. All rights of Seller under all Contracts other than the
Purchased Contracts (the “Excluded Contracts”);

9

 

          (b) Cash and Cash Equivalents. All cash, cash equivalents, bank deposits or similar
cash items of Seller;

          (c) Stock Certificates; Subsidiaries. All shares of capital stock of, or other
ownership interests in the Subsidiaries, and all assets owned, leased or held by the Subsidiaries,
whether or not used or useful in the AVL Business;

          (d) Real Property. All Owned Real Property and Leased Real Property of Seller;

          (e) Corporate Books. All minute books, organizational documents, stock registers and
such other books and records of Seller or any Subsidiary as pertain to ownership, organization or
existence of Seller and each Subsidiary and duplicate copies of such records as are necessary to
enable Seller and the Subsidiaries to file Tax returns and reports;

          (f) Intellectual Property. All Intellectual Property owned or used by Seller other
than the AVL Intellectual Property, including, but not limited to, all Intellectual Property
related to Seller’s SkyTel Business;

          (g) Additional Books and Records. Any (i) other books and records that Seller and the
Subsidiaries are required by Law to retain or that Seller determines are necessary or advisable to
retain; provided, however, that Purchaser shall have the right to make copies of
any portions of such retained books and records that relate to the AVL Business or any of the
Purchased Assets; and (ii) documents relating to proposals to acquire the AVL Business by Persons
other than Purchaser;

          (h) Tax Refunds. Seller hereby represents and warrants there are no Tax refunds
relating to the operation of the AVL Business, the Purchased Assets or the Assumed Liabilities
applicable to any period ending on or before the Closing;

          (i) Tax Records. All Tax returns and financial statements of Seller and the
Subsidiaries and the AVL Business and all records (including working papers) related thereto;

          (j) Claims Related to Excluded Assets. All of Seller’s causes of action, claims,
counterclaims, credits, demands or rights of set-off against third parties to the extent related to
any Excluded Asset;

          (k) Seller’s Rights Under This Agreement. All rights that accrue to Seller and the
Subsidiaries under this Agreement and the Seller Documents;

          (l) Third Party Insurance Proceeds. Seller hereby represents and warrants there are
no third party property and casualty insurance proceeds;

          (m) Employee Benefit Plans. All Employee Benefit Plans and any assets relating to
such plans; and

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          (n) Other Assets. Such other assets as are set forth on Schedule 2.2(n),
including, without limitation, all inventory, customer agreements, Intellectual Property, designs,
systems, rights, licenses and other assets related to Seller’s SkyTel Business.

     2.3 Assumption of Liabilities. On the terms and subject to the conditions set forth
in this Agreement, at the Closing Purchaser shall assume, effective as of the Closing, and shall
timely perform, pay and discharge in accordance with their respective terms, all of the
Liabilities of Seller set forth below in this Section 2.3 only as set forth on Schedule
2.3 hereto, other than the Excluded Liabilities (collectively, the “Assumed
Liabilities”):

          (a) Liabilities of Seller under the Purchased Contracts;

          (b) Subject to and based upon Seller’s representations in Article V, Liabilities arising out
of, relating to or with respect to any Employee Benefit Plan to the extent provided for in
Article VIII;

          (c) Liabilities constituting or relating to accrued payroll for the Transferred Employees only
to the extent set forth on Schedule 2.1(a) hereto;

          (d) Liabilities constituting, or arising in connection with, accounts payable existing on the
Closing Date (including, for the avoidance of doubt, (i) invoiced accounts payable and (ii) accrued
but uninvoiced accounts payable and (iii) other amounts that become payable following the Closing
Date for which work has been performed for the AVL Business upon the formalization of the
contractual relationship with the party performing the work) related to the AVL Business,
including, but not limited to, production, sale, and operation of Seller’s SkyGuard and FleetHawk
products;

          (e) all Taxes to be paid by Purchaser, as well as all sale and use taxes payable related to
the production, sale and operation of the SkyGuard and FleetHawk products on sales after the
Closing Date;

          (f) other Liabilities with respect to the AVL Business, the Purchased Assets or the
Transferred Employees arising after the Closing; and

          (g) Liabilities relating to amounts required to be paid by Purchaser hereunder.

     2.4 Excluded Liabilities. Purchaser will not assume, or be liable for, any
liabilities which are not Assumed Liabilities. All such liabilities which are not Assumed
Liabilities shall be referred to as “Excluded Liabilities,” all of which Seller shall retain and
remain liable for (whether such Excluded Liabilities are known or unknown, absolute, contingent,
liquidated or unliquidated, due or to become due, and whether claims with respect thereto are
asserted before or after the Closing). Notwithstanding any provisions in this Agreement to the
contrary, Purchaser is assuming only the Assumed Liabilities and is not assuming any other
Liability of Seller or its Subsidiaries or Affiliates (or any predecessor owner of all of the part
of the AVL Business) of whatever

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nature. All such other Liabilities shall be retained by and remain Liabilities and
obligations of Seller.

     2.5 Consent of Third Parties.

          (a) From time to time following the Closing, Seller and Purchaser shall execute, acknowledge
and deliver all such further conveyances, notices, assumptions, releases and acquittances and such
other instruments, and shall take such further actions, as may be reasonably necessary or
appropriate to assure fully to Purchaser and its successors or assigns, all of the rights, titles
and interests intended to be conveyed to Purchaser under this Agreement and the Transfer Documents
and to assure fully to Seller and its Affiliates and their successors and assigns, the assumption
of the liabilities and obligations intended to be assumed by Purchaser under this Agreement and the
Transfer Documents, and to otherwise make effective the transactions contemplated hereby and
thereby.

          (b) Nothing in this Agreement nor the consummation of the transactions contemplated hereby
shall be construed as an attempt or agreement to assign any Purchased Asset, including any
Contract, Permit, Intellectual Property, certificate, approval, authorization or other right, which
by its terms or by Law is nonassignable without the consent of a third party or a Governmental Body
or is cancelable by a third party in the event of an assignment (“Nonassignable Assets”)
unless and until such consent shall have been obtained; provided, however, that
Seller shall use its best efforts to cooperate with Purchaser at its request for up to 180 days
following the Closing Date in endeavoring to obtain such consents promptly; and
provided further, that such efforts shall not require Seller or any of its Affiliates to
incur any expenses (other than de minimis expense) or Liabilities or provide any financial
accommodation or to remain secondarily or contingently liable for any Assumed Liability to obtain
any such consent. Purchaser and Seller shall use their respective commercially reasonable efforts
to obtain, or cause to be obtained, any consent, substitution, approval or amendment required to
novate all Liabilities under any and all Purchased Contracts or other Liabilities that constitute
Assumed Liabilities or to obtain in writing the unconditional release of Seller and its Affiliates
so that, in any such case, Purchaser shall be solely responsible for such Liabilities.

     2.6 Bulk Sales Laws. Purchaser hereby waives compliance by Seller 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 to Purchaser; it being
understood that any Liabilities arising out of the failure of Seller to comply with the
requirements and provisions of any “bulk-transfer” Laws of any jurisdiction which would not
otherwise constitute Assumed Liabilities shall be treated as Excluded Liabilities and shall be
promptly paid by and be the sole obligation and responsibility of Seller.

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     2.7 Purchase Price Allocation.

          (a) For all Tax purposes, the Purchase Price (plus any Assumed Liabilities that are treated as
consideration for the Purchased Assets) shall be allocated in the manner set forth in this
Section 2.7 (the “Price Allocation”). Purchaser shall prepare a proposed
allocation in a manner consistent with Section 1060 of the Code and the regulations promulgated
thereunder and shall deliver such proposal to Seller for its review and approval not later than
forty five (45) Business Days after the Closing Date. Seller shall notify Purchaser of its
agreement to such proposal or of any modifications it wishes to make to such proposed allocation.
If Seller proposes any modifications, then Seller and Purchaser will attempt to reach agreement on
the Price Allocation prior to the due date for the filing of IRS Form 8594. In the event that
Purchaser and Seller are unable to agree on the Price Allocation prior to such due date, then each
party will separately file an IRS Form 8594. In the event that Purchaser and Seller agree on the
Price Allocation (i) each party agrees to timely file an IRS Form 8594 reflecting the Price
Allocation for the taxable year that includes the Closing Date and to make any timely filing
required by applicable state or local Law, (ii) such Price Allocation shall be binding on Purchaser
and Seller for all Tax reporting purposes, (iii) none of Purchaser or Seller or any of their
respective Affiliates shall take any position inconsistent with such Price Allocation in connection
with any Tax proceeding, except to the extent required by applicable Law, and (iv) if any Taxing
Authority disputes such Price Allocation, the party receiving notice of the dispute shall promptly
notify the other party hereto of such dispute, and the parties hereto shall cooperate in good faith
in responding to such dispute in order to preserve the effectiveness of such Price Allocation.

          (b) Any indemnification payment treated as an adjustment to the Total Consideration paid for
the Purchased Assets under Article III hereof shall be reflected as an adjustment to the
consideration allocated to a specific asset, if any, giving rise to the adjustment and if any such
adjustment does not relate to a specific asset, such adjustment shall be allocated among the
Purchased Assets in accordance with the Price Allocation method provided in this Section
2.7.

     2.8 Allocation of Taxes and Expenses.

          (a) All state, county and local ad valorem Taxes on Purchased Assets (“Property
Taxes”) shall be prorated between Purchaser and Seller as of the Closing Date as set forth in
Schedule 2.8 hereto, computed by multiplying the amount of Property Taxes for the fiscal
year for which the same are levied by a fraction, the numerator of which is the number of days in
such fiscal year up to and including the Closing Date and the denominator of which is the number of
days in such fiscal year. In connection with such proration of Property Taxes, in the event that
actual Property Tax figures are not available at the Closing Date, proration of Property Taxes
shall be based upon the actual Property Taxes for the preceding fiscal year for which actual
Property Tax figures are available, and re-prorated when actual Property Tax figures become
available.

          (b) All prorations and applicable payments to either party in connection with this Section
2.8 shall be made, insofar as feasible, on the Closing Date,

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and the Purchase Price shall be adjusted accordingly. During the three-month period
subsequent to the Closing Date, Seller shall advise Purchaser, and Purchaser shall advise Seller,
of any actual changes to such prorations, and the Purchase Price shall be increased or decreased,
as applicable, at the end of such three-month period. In the event Purchaser or Seller shall
receive bills after the Closing Date for expenses incurred before the Closing Date that were not
prorated in accordance with this Section 2.8 or that were re-prorated in accordance with
this Section 2.8, then Purchaser or Seller, as the case may be, shall promptly notify the
other party as to the amount of the expense subject to proration and the responsible party shall
pay its portion of such expense (or, in the event such expense has been paid on behalf of the
responsible party, reimburse the other party for its portion of such expenses).

     2.9 Power of Attorney; Right of Endorsement. Effective as of the Closing, Seller
hereby constitutes and appoints Purchaser the true and lawful attorney of Seller solely with
respect to the AVL Business with full power of substitution, in the name and on behalf of Seller
solely with respect to the AVL Business, but for the benefit of and at the sole cost and expense of
Purchaser, to do all such reasonable acts and things with respect to the Purchased Assets as
Purchaser may deem advisable, subject to the consent of the Seller, which consent shall not be
unreasonably withheld; provided that the foregoing shall not apply with respect to any Excluded
Assets or Excluded Liabilities or to any Legal Proceedings in respect thereof. Seller agrees that
the foregoing powers are coupled with an interest and shall not be revocable by Seller directly or
indirectly in any manner. Except as otherwise provided herein, Purchaser shall retain for its own
account any amounts collected pursuant to the foregoing powers.

ARTICLE III

CONSIDERATION

     3.1 Consideration. The aggregate consideration for the Purchased Assets shall be an
amount in cash equal to $7,000,000 (the “Purchase Price”).

     3.2 Payment of Purchase Price. On the date of the funding as indicated in the
Financing Letters (as defined in Article 9 below), Purchaser shall pay the Purchase Price to Seller
and by wire transfer of immediately available United States funds into an account or accounts
designated by Seller.

ARTICLE IV

CLOSING

     4.1 Closing Date. The consummation of the purchase and sale of the Purchased Assets
and the assumption of the Assumed Liabilities provided for in Article II hereof (the
“Closing”) shall take place at the offices of Manatt, Phelps & Phillips, LLP located at 7
Times Square, New York, New York 10036 (or at such other place as the parties may designate in
writing) at 10:00 a.m. (New York time) on or before February

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14, 2008 (the “Closing Date”), unless another time, date or place is agreed to in
writing by the parties hereto.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller hereby represents and warrants to Purchaser that:

     5.1 Organization and Good Standing. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has all requisite
corporate power and authority to own, lease and operate its properties and to carry on its business
as now conducted. Seller is duly qualified or authorized to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction in which it owns or leases real
property and each other jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where the failure to be so
qualified, authorized or in good standing would not have a Material Adverse Effect . Schedule
5.1 sets forth a list of the states in which Seller is qualified to do business regarding the
AVL Business as of the date hereof.

     5.2 Authorization of Agreement. Seller has all requisite corporate power and
authority to execute and deliver this Agreement and Seller has all requisite power, authority and
legal capacity to execute and deliver each other agreement, document, or instrument or certificate
contemplated by this Agreement or to be executed by Seller in connection with the consummation of
the transactions contemplated by this Agreement (the “Seller Documents”), to perform its
obligations hereunder and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and each of the Seller
Documents and the consummation of the transactions contemplated hereby and thereby have been duly
authorized and approved by all requisite corporate action on the part of Seller and no other
corporate proceedings on the part of Seller are necessary to authorize this Agreement and such
other agreements and documents or to consummate the transactions contemplated hereby and thereby.
This Agreement has been, and each of the Seller Documents will be at or prior to the Closing, duly
and validly executed and delivered by Seller and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement constitutes, and each of the
Seller Documents when so executed and delivered will constitute, legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity).

     5.3 Conflicts; Consents of Third Parties; Subsidiaries.

          (a) None of the execution and delivery by Seller of this Agreement, the consummation of the
transactions contemplated hereby, or compliance by Seller with

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any of the provisions hereof or thereof will conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise to a right of
termination or cancellation under, any provision of (i) the certificate of incorporation and
by-laws of Seller; (ii) any Contract or Permit to which Seller is a party or by which any of the
properties or assets of Seller are bound; (iii) any Order of any Governmental Body applicable to
Seller or by which any of the properties or assets of Seller are bound; or (iv) any applicable Law,
other than, in the case of clauses (ii), (iii) and (iv), such conflicts, violations, defaults,
terminations or cancellations that would not (A) materially impair the ability of Seller to enter
into this Agreement and to consummate the transactions contemplated hereby, (B) materially
adversely affect the business, operations, or condition (financial or otherwise) of the AVL
Business, or (C) subject any material portion of the Purchased Assets to any Lien except as subject
to Permitted Exceptions.

          (b) No material consent, waiver, approval, Order, Permit or authorization of, or filing with,
or notification to, any Person or Governmental Body is required on the part of Seller in connection
with the execution and delivery of this Agreement, the compliance by Seller with any of the
provisions hereof, or the consummation of the transactions contemplated hereby.

          (c) All of Seller’s Subsidiaries are listed on Schedule 5.3(c). No such Subsidiary owns,
uses, has a right to use, leases, licenses, or otherwise has any interest of any type whatsoever in
any of the Property used in the AVL Business.

     5.4 Schedule of Assets and Liabilities. Attached hereto as Schedule 2.1(a)
is a Schedule of Assets and Liabilities of Seller relating to the AVL Business which presents
fairly in all material respects the assets and liabilities of Seller relating to the AVL Business
as of the date thereof.

     5.5 Title to Purchased Assets.

          (a) Except as set forth on Schedule 5.5 hereto, Seller owns and has good title to each
of the Purchased Assets and AVL Intellectual Property, free and clear of all Liens other than
Permitted Exceptions.

          (b) The Purchased Assets and AVL Intellectual Property constitute all of the assets necessary
together with Seller’s agreements hereunder and under the Seller Documents for Purchaser to conduct
the AVL Business as of the Closing Date without interruption and in the Ordinary Course of
Business.

          (c) Upon the consummation of the transactions contemplated hereby, Purchaser will have
acquired, on and as of the Closing Date, good and valid title in and to the Purchased Assets and
AVL Intellectual Property, free and clear of all Liens other than Permitted Exceptions.

     5.6 Compliance with Laws; Permits.

          (a) Seller is in compliance with all Laws applicable to its operations and assets and to the
AVL Business, except where the failure to be in compliance would

16

 

not have a Material Adverse Effect. Seller has not received any written notice of or been
charged with the violation of any Laws, except where such violation would not have a Material
Adverse Effect.

          (b) Seller currently has all Permits which are required for the operation of the AVL Business
as presently conducted, other than those the failure of which to possess would not have a Material
Adverse Effect. Seller is not in default or violation (and no event has occurred which, with
notice or the lapse of time or both, would constitute a default or violation) of any term,
condition or provision of any Permit to which it is a party, except where such default or violation
would not have a Material Adverse Effect.

     5.7 Purchased Contracts. Except in each case as would not have a Material Adverse
Effect:

          (a) All Purchased Contracts are valid, binding and in full force and effect and are
enforceable by Seller in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity).

          (b) Neither Seller nor, to the Knowledge of Seller, any other party to any of the Purchased
Contracts is in breach or default thereunder in all material respects.

          (c) To the Knowledge of Seller, no condition exists or event has occurred which with or
without the lapse of time or the giving of notice, or both, would constitute a default by Seller in
all material respects.

     5.8 Legal Proceedings. As of the date of this Agreement, there are no Legal
Proceedings pending, nor, to the Knowledge of Seller, threatened against Seller, or to which Seller
is otherwise a party, before any Governmental Body and relating to the AVL Business or AVL
Intellectual Property or which questions or challenges the validity of this Agreement or any action
taken or to be taken by Seller pursuant to this Agreement. As of the date of this Agreement,
Seller is not subject to any Order relating to the AVL Business.

     5.9 Intellectual Property.

          (a) Schedule 2.1(e) identifies (i) all AVL Intellectual Property and software used in
connection with the AVL Business; (ii) each item of AVL Intellectual Property and software that any
third party owns and that the Seller uses in connection with the AVL Business pursuant to license,
sublicense, agreement or permission (clause (ii) is referred to as “Licensed Intellectual
Property”); and (iii) as set forth in Schedule 7.10(a)(i), all rights which Purchaser will have
to the use of the Subject Marks, as hereinafter defined, software, patents, and other tangible and
intangible property in the SkyTel Business.

17

 

          (b) To the Knowledge of Seller, the AVL Business has not infringed upon or misappropriated in
any material respect any Intellectual Property rights of third parties, and Seller has not received
any notice alleging any such infringement or misappropriation nor any claim of infringement or
misappropriation of any Intellectual Property right of any third party due to Seller’s conduct of
the AVL Business.

          (c) Seller owns, has the right to use, sell, license and dispose of, and has the right to
bring actions for the infringement of, and, where necessary, has made timely and proper application
for all material AVL Intellectual Property rights (other than with respect to the Licensed
Intellectual Property) necessary or required for the conduct of the AVL Business as currently
conducted.

     5.10 Labor. Solely with respect to the AVL Business:

          (a) Seller is not a party to any labor or collective bargaining agreements or any Contract for
the employment of any individual on a full-time, part-time or other basis.

          (b) There are no (i) strikes, work stoppages, work slowdowns or lockouts pending or, to the
Knowledge of Seller, threatened against or involving Seller, or (ii) unfair labor practice charges,
grievances or complaints pending or, to the Knowledge of Seller, threatened by or on behalf of any
employee or group of employees of Seller.

          (c) Seller has not received written notice of the intent of any federal, state, local or
foreign agency responsible for the enforcement of labor or employment laws to conduct an
investigation with respect to or relating to the AVL Business, and to the Knowledge of Seller no
such investigation is in progress.

          (d) With respect to or relating to the AVL Business, there are no complaints, lawsuits or
other proceedings pending or, to the Knowledge of Seller, threatened in any forum by or on behalf
of any present or former employee of Seller, any applicant for employment or the termination
thereof alleging breach of any express or implied contract of employment, any Laws governing
employment or the termination thereof or other discriminatory, wrongful or tortious conduct in
connection with the employment relationship.

          (e) The WARN Act is inapplicable to the AVL Business.

          (f) Schedule 5.10(f) hereto sets forth (i) with respect to all present employees of
the AVL Business, their dates of hire, positions and total annual compensation (split between base
and incentive compensation), (ii) the wage rates for non-salaried and non-executive salaried
employees of the AVL Business by classification, and (iii) all group insurance programs in effect
for employees in the AVL Business.

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      5.11 Environmental Matters.

          (a) The operations of Seller are in compliance with all applicable Environmental Laws, which
compliance includes obtaining, maintaining and complying with any Permits required under all
applicable Environmental Laws necessary to operate the AVL Business.

          (b) Seller is not subject to any pending, or to the Knowledge of Seller, threatened claim
alleging that Seller may be in violation of any Environmental Law or any Environmental Permit or
may have any liability under any Environmental Law.

          (c) to the Knowledge of Seller, there are no pending or threatened investigations of the AVL
Business which would reasonably be expected to result in Seller incurring any material liability
pursuant to any Environmental Law.

          (d) Seller has not handled, used, discharged, released, disposed of, transported or arranged
for the transportation or disposal of, any hazardous materials (as defined or referred to in any
Environmental Laws as corrosive, ignitable, explosive, infectious, radioactive, carcinogenic,
petroleum-derived or toxic), as it relates to the AVL Business.

     5.12 Actions. Since January 31, 2007, Seller has conducted the FleetHawk Business in
the ordinary course of business, and there has not been, in each case as it relates to the
FleetHawk Business:

          (a) any Material Adverse Effect, any material damage, destruction or loss (whether or not
covered by insurance) with respect to any material asset of the FleetHawk Business;

          (b) any termination or failure to renew, or any threat made in writing (that was not
subsequently withdrawn) to terminate or fail to renew, any Purchased Contract; and

          (c) except as may have occurred in the Ordinary Course of Business, any sale, abandonment,
transfer, lease, license or any other disposition of any material properties or assets of Seller or
acquisition of any capital stock or business of any other person (or any reaching of an agreement,
arrangement or understanding to do the same).

     5.13 Customers and Suppliers. In each case with respect to the AVL Business:

          (a) Schedule 5.13(a) sets forth each of Seller’s customers as of December 31, 2007
(“Customers”). None of the Customers have informed Seller in writing that such Customer
intends to reduce its purchases from Seller during the six-month period after the Closing Date; and

          (b) Schedule 5.13(b) sets forth each of Seller’s suppliers as of December 31, 2007
(“Suppliers”). None of the Suppliers have informed Seller in writing that such Supplier
intends to no longer supply the AVL Business after the Closing Date.

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     5.14 Foreign Corrupt Practices Act and Export Restrictions. Seller is in material
compliance with the Foreign Corrupt Practices Act of 1977, as amended, in respect of its operation
of the AVL Business. Seller does not provide any of its services in Cuba, Iran, Iraq, Libya, North
Korea, Rwanda, Sudan, Syria or any other country subject to U.S. trade restrictions, embargo or
executive order.

     5.15 Taxes.

          (a) Except for matters that would not have a Material Adverse Effect, Seller has filed, or
there have been timely filed on Seller’s behalf, all Tax Returns in respect of the Purchased Assets
that are required to be filed by it and has paid all Taxes shown thereon.

          (b) There are no Liens for Taxes (other than Permitted Exceptions) upon the Purchased Assets.

          (c) The Purchased Assets are not subject to any joint venture, partnership or other
arrangement or contract that is treated as a partnership for Tax purposes.

          (d) As of the date of this Agreement, there are no Legal Proceedings pending or, to the
Knowledge of Seller, threatened with respect to the AVL Business in respect of any Tax.

     5.16 Personal Property. Schedule 2.1(g) accurately sets forth the PP&E as of
the date hereof.

     5.17 Product Warranty; Product Liability.

          (a) (i) Seller has no liability for replacement or repair of any such Products or other
damages in connection therewith or any other product obligations outside of the Ordinary Course of
Business, and (ii) Seller has not sold any Products or delivered any services that included a
warranty for a period of longer than one (1) year. Schedule 5.17 hereto sets forth all
warranties of Seller relating to the AVL Business.

          (b) To the Knowledge of Seller, (i) Seller has no material liability arising out of any injury
to individuals or property as a result of the ownership, possession, or use of any Product
designed, manufactured, assembled, repaired, sold or installed by or on behalf of Seller and (ii)
Seller has not committed any act or failed to commit any act which would result in, and there has
been no occurrence which would give rise to or form the basis of, any product liability or
liability for breach of warranty (whether covered by insurance or not) on the part of Seller with
respect to Products designed, manufactured, assembled, repaired, sold or installed by or on behalf
of Seller.

     5.18 Financial Advisors. No Person has acted, directly or indirectly, as a broker,
finder or financial advisor for Seller in connection with the transactions contemplated by this
Agreement and no such Person is entitled to any fee or commission or like payment in respect
thereof.

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     5.19 Material Disclosure. No representation or warranty by Seller contained in this
Agreement and no statement contained in any certificate, list, Disclosure Schedule, Exhibit or
other instrument specified in this Agreement, whether heretofore furnished to Purchaser or
hereafter furnished to Purchaser pursuant to this Agreement, taken together under the circumstances
pertaining thereto, contains or will contain any untrue statement of a material fact necessary to
make the statements contained therein not misleading or omits any material fact required to be
stated or necessary to make the statements therein not misleading. All information required to be
disclosed by this Agreement concerning the AVL Business has been disclosed.

     5.20 No Other Representations or Warranties; Schedules. Except for the representations
and warranties contained in this Article V or elsewhere in this Agreement or in the Transfer
Documents (as modified by the Schedules hereto), neither Seller nor any other Person makes any
other express or implied representation or warranty with respect to Seller, the SkyGuard Business,
the Purchased Assets (in each instance except for the FleetHawk Business portion thereof), the
Assumed Liabilities (except for the FleetHawk Business portion thereof) or the transactions
contemplated by this Agreement (except for the FleetHawk Business portion thereof), and Seller
disclaims any other representations or warranties, whether made by Seller, any Affiliate of Seller
or any of their respective officers, directors, employees, agents or representatives. Except for
the representations and warranties contained in Article V hereof or elsewhere in this Agreement or
the Transfer Documents (as modified by the Schedules hereto as supplemented or amended), Seller (i)
expressly disclaims any representation or warranty, express or implied, at common law, by statute,
or otherwise, relating to the condition of the Purchased Assets (including any implied or expressed
warranty of merchantability or fitness for a particular purpose, or of conformity to models or
samples of materials) and (ii) hereby disclaims all liability and responsibility for any
representation, warranty, projection, forecast, statement, or information made, communicated, or
furnished (orally or in writing) to Purchaser or its Affiliates or representatives (including any
opinion, information, projection, or advice that may have been or may be provided to Purchaser by
any director, officer, employee, agent, consultant, or representative of Seller or any of its
Affiliates). Seller makes no representations or warranties to Purchaser regarding the probable
success or profitability of the AVL Business. The disclosure of any matter or item in any schedule
hereto shall not be deemed to constitute an acknowledgment that any such matter is required to be
disclosed.

     5.21 Certain Payments; Certain Interests. Neither Seller nor, to the Knowledge of
Seller, any director, officer, employee, or other Person associated with or acting on behalf of any
of Seller, has directly or indirectly, with respect to the AVL Business (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private
or public, regardless of form, whether in money, property, or services (i) to wrongfully obtain
favorable treatment in securing business for Seller, (ii) to wrongfully pay for favorable treatment
for business secured by Seller, (iii) to wrongfully obtain special concessions or for special
concessions already obtained, for or in respect of Seller, (iv) that would be reasonably likely to
subject Seller to any material damage or penalty in any Legal Proceeding, (v) in violation of any
Law, or (vi)to Knowledge of Seller if not continued in the future, would be reasonably likely to
have a

21

 

Material Adverse Effect on the Seller, or (b) established or maintained any fund or asset with
respect to Seller that has not been recorded in the books and records of Seller.

     5.22 Employee Benefits.

          (a) With respect to the AVL Business, Schedule 5.22(a) lists each “employee benefit
plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended(“ERISA”) and any other material stock award, stock option, stock purchase, bonus or other
incentive compensation, vacation, change of control, educational assistance, deferred compensation,
salary continuation, disability, retirement, welfare benefit, severance, or life insurance plan or
agreement in which current or former Employees participate (each, an “Employee Benefit Plan”).
Seller has made available to Purchaser correct and complete copies of (i) each Employee Benefit
Plan, (ii) the most recent annual reports on Form 5500 required to be filed with respect to each
Employee Benefit Plan (if any such report was required), (iii) the most recent summary plan
description for each Employee Benefit Plan for which such summary plan description is required and
(iv) each trust agreement and insurance or group annuity contract relating to any Employee Benefit
Plan.

          (b) Each employee Benefit Plan with respect to which Purchaser will assume assets and/or
liabilities pursuant to Article VIII hereof has been administered in all material respects in
accordance with its terms and in compliance with the applicable provisions of ERISA, the Code and
all other applicable Laws, except for any noncompliance that would not have a Material Adverse
Effect.

          (c) To the Knowledge of Seller, each Employee Benefit Plan that is intended to be tax
qualified under Section 401(a) of the Code (a “Qualified Plan”) is so qualified except for any
noncompliance that would not result in a Material Adverse Effect. Seller has made available to
Purchaser a correct and complete copy of the most recent determination letter received with respect
to each Qualified Plan.

          (d) Except as set forth on Schedule 5.22(d) with respect to each Employee Benefit Plan, with
respect to the AVL Business:

               (i) since the effective date of ERISA, no material liability under Title IV of ERISA has been
incurred or is reasonably expected to be incurred by Seller (other than liability for premiums due
to the PBGC), unless such liability has been, or prior to the Closing Date will be, satisfied in
full;

               (ii) no Employee Benefit Plan subject to Title IV of ERISA or Section 412 of the Code (each a
“Pension Plan”) has an “accumulated funding deficiency” (as such term is defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived;

               (iii) the PBGC has not instituted proceedings and no filing has been made by Seller or any of
its ERISA Affiliates to terminate any Pension Plan; and

22

 

               (iv) none of the Pension Plans is a “multiemployer plan,” as that term is defined in Section
3(37) of ERISA, and neither Seller nor any of its ERISA Affiliates has made or incurred a “complete
withdrawal” or a “partial withdrawal,” as such terms are respectively defined in Sections 4203 and
4205 of ERISA that would result in the incurrence of a material liability by Seller or any of its
ERSA Affiliates.

          (e) Except as set forth on Schedule 5.22(e), neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any current or former Employee under the Deferred Compensation Plan, (ii)
increase any benefits under the Deferred Compensation Plan or any other Employee Benefit Plan with
respect to which Purchaser will assume assets and/or liabilities pursuant to Article VIII or (iii)
result in the acceleration of the time of payment of, vesting of or other rights with respect to
any such benefits.

     5.23 Miscellaneous. Seller further represents and warrants that there are none of the
following relating to the operation of the AVL Business, the Purchased Assets or the Assumed
Liabilities:

          (a) Tax refunds;

          (b) Third party property and casualty insurance proceeds; and

          (c) Causes of action, claims, credits, demands or rights of setoff against third parties.

ARTICLE
VI

REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser represents and warrants to Seller that:

     6.1 Organization and Good Standing. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of Delaware and has
all requisite limited liability company power and authority to own, lease and operate its
properties and to carry on its business.

     6.2 Authorization of Agreement. Purchaser has full power and authority to execute and
deliver this Agreement and each other agreement, document, instrument or certificate contemplated
by this Agreement or to be executed by Purchaser in connection with the consummation of the
transactions contemplated hereby and thereby (the “Purchaser Documents”), and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and performance by
Purchaser of this Agreement and each Purchaser Document have been duly authorized by all necessary
corporate action on behalf of Purchaser. This Agreement has been, and each Purchaser Document will
be at or prior to the Closing, duly executed and delivered by Purchaser and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each Purchaser Document when so executed and delivered

23

 

will constitute, the legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

     6.3 Conflicts; Consents of Third Parties.

          (a) Except as set forth on Schedule 6.3(a), none of the execution and delivery by
Purchaser of this Agreement, the consummation of the transactions contemplated hereby, or the
compliance by Purchaser with any of the provisions hereof will conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both) under, or give rise to a
right of termination or cancellation under, any provision of (i) the certificate of incorporation
and by-laws (or other organizational and governing documents) of Purchaser, (ii) any Contract or
Permit to which Purchaser is a party or by which Purchaser or its properties or assets are bound,
(iii) any Order of any Governmental Body applicable to Purchaser or by which any of the properties
or assets of Purchaser are bound or (iv) any applicable Law.

          (b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the part of Purchaser in
connection with the execution and delivery of this Agreement, the compliance by Purchaser with any
of the provisions hereof, the consummation of the transactions contemplated hereby, or for
Purchaser to conduct the AVL Business, other than such other consents, waivers, approvals, Orders,
Permits or authorizations the failure of which to obtain would not materially adversely affect
Purchaser’s ability to consummate the transactions contemplated by this Agreement.

     6.4 Litigation. There are no Legal Proceedings pending or, to the actual knowledge of
Purchaser, threatened that are reasonably likely to prohibit or restrain the ability of Purchaser
to enter into this Agreement or consummate the transactions contemplated hereby.

     6.5 Financial Advisors. No Person has acted, directly or indirectly, as a broker,
finder or financial advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in .

     6.6 Condition of the SkyGuard Business. Solely as it relates to the SkyGuard
Business, notwithstanding anything contained in this Agreement to the contrary, Purchaser
acknowledges and agrees that Seller is not making any representations or warranties whatsoever,
express or implied, beyond those expressly given by Seller in Article V hereof (as modified by the
Schedules hereto as supplemented or amended), and Purchaser acknowledges and agrees that, except
for the representations and warranties contained therein, the SkyGuard Business is being
transferred on a “where is” and, as to condition, “as is” basis. Any claims Purchaser may have for
breach of representation or

24

 

warranty (except as to any breaches by Seller of any provisions of Section 7.8 hereof) shall
be based solely on the representations and warranties of Seller set forth in Article V hereof (as
modified by the Schedules hereto as supplemented and amended). Purchaser acknowledges that it has
conducted to its satisfaction, its own independent investigation of the SkyGuard Business and, in
making the determination to proceed with the transactions contemplated by this Agreement, Purchaser
has relied on the results of its own independent investigation. As of the date hereof, Purchaser
is not aware of any facts, events or circumstances that would cause any of the representations or
warranties of Seller set forth in Article V hereof to be untrue or incorrect in any respect.

     6.7 Condition of the FleetHawk Business. Solely as it relates to the FleetHawk
Business prior to January 31, 2007, notwithstanding anything contained in this Agreement to the
contrary, Purchaser acknowledges and agrees that Seller is not making any representations or
warranties whatsoever, express or implied, beyond those expressly given by Seller in Article V
hereof (as modified by the Schedules hereto as supplemented or amended), and Purchaser acknowledges
and agrees that, except for the representations and warranties contained therein, the Purchased
Assets and the AVL Business, solely as they relate to the FleetHawk Business prior to January 31,
2007, are being transferred on a “where is” and, as to condition, “as is” basis. Any claims
Purchaser may have for breach of representation or warranty (except as to any breaches by Seller of
any provisions of Section 7.8 hereof) shall be based solely on the representations and warranties
of Seller set forth in Article V hereof (as modified by the Schedules hereto as supplemented and
amended). Purchaser acknowledges that it has conducted to its satisfaction, its own independent
investigation of the FleetHawk Business and, in making the determination to proceed with the
transactions contemplated by this Agreement, Purchaser has relied on the results of its own
independent investigation. As of the date hereof, Purchaser is not aware of any facts, events or
circumstances that would cause any of the representations or warranties of Seller set forth in
Article V hereof to be untrue or incorrect in any respect.

     6.8 Capitalization. By the date of the funding as indicated in the Financing Letters
(as defined in Article 9 below), Purchaser shall have a capitalization of at least $8,000,000.

ARTICLE
VII

COVENANTS

     7.1 Agreements. At the Closing, Seller and Purchaser shall enter into the following
Agreements:

          (a) the Sublease;

          (b) the Transition Services Agreement; and

          (c) the Wholesale Agreement.

25

 

     7.2 Consents. Each of Seller and Purchaser shall (and shall cause its Affiliates to)
use their commercially reasonable efforts to obtain at the earliest practicable date all consents
and approvals required to consummate the transactions contemplated by this Agreement, including the
consents and approvals referred to in Sections 5.3(b) and 6.3(b) hereof;
provided however, that Seller shall not be obligated to pay any consideration
therefor to any third party from whom consent or approval is requested.

     7.3 Further Assurances. Subject to, and not in limitation of, Section 7.2
hereof, each of Seller and Purchaser shall use its commercially reasonable efforts to (i) take all
actions necessary or appropriate to consummate the transactions contemplated by this Agreement and
(ii) cause the fulfillment at the earliest practicable date of all of the conditions to their
respective obligations to consummate the transactions contemplated by this Agreement.

     7.4 Raj Cherukuri and Ratan Guduru. Purchaser shall make available Raj Cherukuri and
Ratan Guduru to Seller or its assigns on a consulting basis to assist in Seller’s ongoing
operations as set forth in Exhibit F (“Cherukuri Consulting Agreement”) and Exhibit
G (“Guduru Consulting Agreement”).

     7.5 Confidentiality.

          (a) Purchaser and Seller acknowledge that the information provided to each in connection with
this Agreement and the transactions contemplated hereby is subject to the terms of the
confidentiality agreement between Purchaser and Seller, dated February 14, 2008 (the
“Confidentiality Agreement”), the terms of which are incorporated herein by reference. Effective
upon, and only upon, the Closing Date, the Confidentiality Agreement shall terminate with respect
to information relating solely to the Business or otherwise included in the Purchased Assets;
provided, however, that Purchaser and Seller acknowledge that any and all other
Confidential Information provided to the other shall remain subject to the terms and conditions of
the Confidentiality Agreement after the Closing Date.

          (b) From and after the Closing Date for six (6) years, Seller shall not and shall cause its
officers and directors not to, directly or indirectly, disclose, reveal, divulge or communicate to
any Person other than authorized officers, directors and employees of Purchasers or use or
otherwise exploit for its own benefit of anyone other than Purchaser, any Confidential Information
(as defined below). Seller and its officers and directors shall not have any obligation to keep
confidential any Confidential Information if and to the extent disclosure thereof is required by
Law or other regulatory process, including preparation of financial statements, tax audits and
Legal Proceedings by or against Seller or its Affiliates. For purposes of this Section 7.6(b),
“Confidential Information” shall mean any confidential information with respect to the AVL
Business, including methods of operation, customers, customer lists, Products, prices, fees, costs,
inventions, know-how, marketing methods, plans, suppliers, competitors, markets or other
specialized information, or proprietary matters. “Confidential Information” does not include, and
there shall be no obligation hereunder with respect to, information that (i) is generally available
to the public on the date of this Agreement or (ii) becomes

26

 

generally available to the public other than as a result of a disclosure not otherwise
permissible hereunder.

     7.6 Preservation of Records. Seller and Purchaser agree that each of them shall
preserve and keep the records held by it or their Affiliates relating to the AVL Business for a
period of seven years from the Closing Date and shall make such records and personnel available to
the other as may be reasonably required by such party in connection with, among other things, any
insurance claims by, Legal Proceedings or tax audits against or governmental investigations of
Seller or Purchaser or any of their Affiliates or in order to enable Seller or Purchaser to comply
with their respective obligations under this Agreement and each other agreement, document or
instrument contemplated hereby or thereby. In the event Seller or Purchaser wishes to destroy such
records after that time, such party shall first give 90 days prior written notice to the
other and such other party shall have the right at its option and expense, upon prior written
notice given to such party within such 90 day period, to take possession of the records within 180
days after the date of such notice.

     7.7 Publicity.

          (a) Neither Seller nor Purchaser shall issue any press release or public announcement
concerning this Agreement or the transactions contemplated hereby without obtaining the prior
written approval of the other party hereto, which approval will not be unreasonably withheld or
delayed, unless, in the sole judgment of Purchaser or Seller, as applicable, disclosure is
otherwise required by applicable Law or by the applicable rules of any stock exchange on which
Purchaser or Seller or any of their respective Affiliates lists securities, provided that, to the
extent required by applicable Law, the party intending to make such release shall use its
reasonable efforts consistent with such applicable Law to consult with the other party with respect
to the timing and content thereof.

          (b) Each of Purchaser and Seller agrees that the terms of this Agreement shall not be
disclosed or otherwise made available to the public and that copies of this Agreement shall not be
publicly filed or otherwise made available to the public, except where such disclosure,
availability or filing is required by applicable Law and only to the extent required by such Law.
Notwithstanding the foregoing, Seller may disclose the terms of this Agreement if it determines
that such disclosure is required under the Securities Act of 1934, as amended, and the rules and
regulations promulgated hereunder.

     7.8 Non-Competition; Non-Solicitation.

          (a) Seller agrees that for a period of seventy-two- (72) months following the Closing, neither
it, nor any of its Affiliates, its successors, transferees or assigns shall compete with Purchaser,
directly or indirectly in the continental United States, with the AVL Business.

27

 

          (b) Purchaser agrees that, from and after the Closing Date and continuing through the date
that is (12) months following the Closing Date, except with respect to the Transferred Employees,
without the prior written consent of Seller, it shall not and shall cause its or its Affiliates not
to, directly or indirectly: (i) engage, hire, lease or utilize any Employee of Seller or any
person who has been an Employee of Seller for the twelve month period prior to the Closing, or (ii)
recruit, Solicit, attempt to Solicit, or assist anyone else to Solicit any Employee of Seller, or
any person who has been an Employee of Seller during the twelve month period prior to the Closing
Date, to terminate, restrict or hinder his, her or its association with Seller, or (iii) interfere
in any way with the relationship between Seller and any such Employee. For the purposes of this
Agreement, “Solicit” shall mean to encourage or induce, or to take any action that is intended or
calculated to encourage or induce, or which has the effect of encouraging or inducing or which is
reasonably likely to result in encouragement or inducement; provided, however, that the provisions
of this Section 7.9(b) shall not apply to those Employees listed on Schedule 7.9(b) hereto.

          (c) Seller agrees that for a period of sixty (60)months following the Closing, it shall not
utilize for itself or disseminate to any of its affiliates, and shall cause its Affiliates not to
utilize, any customer lists of Seller of the AVL Business or any other proprietary information of
Seller of the AVL Business concerning the identity of customers of Seller, in each case, as of the
Closing Date, for the purpose of providing such customers with any products or services or
interfering with or damaging any relationship and/or agreement between Purchaser or any of
Purchaser’s Affiliates and any such customer.

          (d) Seller agrees that for a period of eighteen (18) months following the Closing, Seller
shall not and shall cause its Affiliates not to cause, solicit, induce or encourage any Transferred
Employee if such Transferred Employee is then employed by Purchaser or its Affiliates, or has been
employed by Purchaser or its Affiliates during the preceding three (3) month period, to leave such
employment or hire, employ or otherwise engage any such individual; provided that neither
generalized searches through media advertisement, employment firms or otherwise that are not
directed to such personnel nor any employment or hiring pursuant to or as a result thereof shall
constitute a violation of the foregoing.

          (e) Neither Seller nor its Affiliates shall employ any Transferred Employee for a period of
one year after the date that such Transferred Employee ceases to be an employee of Purchaser or its
Affiliates.

          (f) Seller hereby agrees that a violation or attempted or threatened violation of this Section
7.9 will cause irreparable injury to Purchaser for which money damages would be inadequate, and
that Purchaser shall be entitled, in addition to any other rights or remedies it may have, whether
in law or in equity, to obtain an injunction enjoining and restraining Seller from a violation of
the covenants contained herein. If, at the time of enforcement of this Section 7.9 a court shall
hold that the duration, scope, geographic area or other restrictions stated herein are unreasonable
under circumstances then existing, the parties agree that the maximum duration, scope, geographic
area or

28

 

other restrictions deemed reasonable under such circumstances by such court shall be
substituted for the stated duration, scope, geographic area or other restrictions.

     7.9 Use of Trademarks.

          (a) Purchaser shall have the right to use the trademarks set forth on Schedule 7.9(a),
and shall have no right to use any other Seller marks, including without limitation, the name
“SkyTel” or any trademarks related thereto or containing or comprising the foregoing, including any
name or trademark confusingly similar thereto (the “Subject Marks”), and Purchaser will not
at any time hold itself out as having any affiliation with Seller or any of its Affiliates. In
furtherance thereof, as promptly as practicable but in no event later than 180 days following the
Closing Date, Purchaser shall remove, strike over or otherwise obliterate all Subject Marks from
all materials including, without limitation, any vehicles, business cards, schedules, stationery,
packaging materials, displays, signs, promotional materials, manuals, forms, computer software and
other materials.

          (b) Purchaser (i) acknowledges that Seller (or its Affiliates, as applicable) has the sole and
exclusive ownership rights in the Subject Marks, (ii) undertakes not to challenge the validity of
the Subject Marks or Seller’s (or its Affiliate’s, as applicable) registration or application for
registration or ownership of the Subject Marks, and (iii) agrees not to do anything inconsistent
with the provisions of clauses (i) and (ii) of this Section 7.9(b).

          (c) Purchaser further acknowledges and agrees that all use of the Subject Marks and all
goodwill developed therefrom shall inure to the benefit of and be on behalf of Seller. Except as
set forth on Schedule 7.9(a)(i) hereto, Purchaser agrees that nothing in this Agreement
shall give Purchaser any right, title or interest in or to the Subject Marks.

          (d) Purchaser agrees that it will not hereafter seek registration of the Subject Marks or any
confusingly similar trademarks in its own name or in the name of any of its Affiliates.

     7.10 Tax Matters. Purchaser and Seller shall cooperate in preparing, executing and
filing use, sales, transfer and similar Tax Returns relating to the purchase and sale of the
Purchased Assets. Such Tax Returns shall be prepared in a manner that is consistent with the
determination of the fair market values allocated to the Purchased Assets as contemplated by
Section 2.7(a) hereof. All sales, transfer, documentary, stamp, recording and similar
Taxes incurred in connection with the purchase and sale of the Purchased Assets (“Transfer
Taxes”) shall be borne equally Purchaser and Seller.

     7.11 Disclosure Schedules; Supplementation and Amendment of Schedules. Seller may, at
its option, include in the Schedules items that are not material in order to avoid any
misunderstanding, and such inclusion, or any references to dollar amounts, shall not be deemed to
be an acknowledgement or representation that such items are

29

 

material, to establish any standard of materiality or to define further the meaning of such
terms for purposes of this Agreement.

     7.12 Access to Information. For a period of five years after the Closing, Purchaser
will give Seller reasonable access during Purchaser’s regular business hours upon reasonable
advance notice and under reasonable circumstances and shall be subject to restrictions under
applicable Law to books and records transferred to Purchaser to the extent necessary for the
preparation of financial statements, regulatory filings or Tax returns of Seller or its Affiliates
in respect of periods ending on or prior to Closing, or in connection with any Legal Proceedings.
Seller shall be entitled, at its sole cost and expense, to make copies of the books and records to
which it is entitled to access pursuant to this Section 7.12.

     7.13 GSA Contract.

          (a) Seller shall provide Purchaser with prompt payment of all “net revenue” accrued and
received by Seller after the Closing Date relating to or otherwise associated with the existing
“FleetHawk” units under any “GSA Contract” in place as of the date hereof until Purchaser has
received the GSA Subcontract (as defined below); provided, however, that such revenues shall not
include credits and write-offs in the ordinary course of business. For the purpose of this
Agreement, “net revenue” as used in this Section 7.13(a) shall mean collections of billings related
to FleetHawk units under the GSA Contract, net of any credits issued related to such units. Seller
represents to Purchaser that the GSA Contract is in full force and effect and Seller is not in
default thereunder.

          (b) Seller and Purchaser shall, promptly following the Closing Date, use their respective best
efforts to work with the GSA to subcontract the GSA Contract to Purchaser (the “GSA
Subcontract”).

     7.14 Financing Letters. Purchaser agrees to obtain a capitalization of at least
$8,000,000 by the date set forth in the Financing Letters (as defined in Article 9 below).

ARTICLE VIII

EMPLOYEES AND EMPLOYEE BENEFITS

     8.1 Employment.

          (a) Transferred Employees. Prior to the Closing, Purchaser shall deliver, in writing,
an offer of employment to the Employees listed in Schedule 8.1(a) to commence immediately
following the Closing. Each such offer of employment shall be for at least the same total
compensation (including salary and bonus) and position in effect immediately prior to the Closing.
Such individuals who accept such offers prior to the Closing are hereinafter referred to as the
“Transferred Employees.”

          (b) Purchaser shall provide each Transferred Employee whose employment is involuntarily
terminated (other than for cause) by Purchaser or its

30

 

Affiliates prior
to the three (3) months anniversary of the Closing Date with severance payments and severance
benefits that are no less favorable than the severance payments and severance benefits to which
such employee would have been entitled as in effect as of the Closing Date as set forth on
Schedule 8.1(b) hereto. Such severance payments and benefits may be provided in the manner
and under the plan or policy designated by Purchaser in its discretion.

          (c) Standard Procedure. Pursuant to the “Standard Procedure” provided in
section 5 of Revenue Procedure 96-60, 1996-2 C.B. 399, (i) Purchaser and Seller shall report on a
predecessor/successor basis as set forth therein, (ii) Seller will not be relieved from filing a
Form W-2 with respect to any Transferred Employees, and (iii) Purchaser will undertake to file (or
cause to be filed) a Form W-2 for each such Transferred Employee with respect to the portion of the
year during which such Employees are employed by Purchaser that includes the Closing Date,
excluding the portion of such year that such Employee was employed by Seller.

     8.2 Employee Benefits.

          (a) Purchaser shall provide, or cause to be provided, for a period of one year following the
Closing or such longer period of time required by applicable Law (the “Benefit Maintenance
Period”), to each of the Transferred Employees, compensation (including salary, wages and
opportunities for commissions, bonuses, incentive pay, overtime and premium pay), employee
benefits, location of employment and a position of employment that are, in each case, substantially
equivalent to those provided to such Transferred Employee immediately prior to the Closing. After
the Closing, Purchaser shall not discriminate against Transferred Employees in relation to
similarly situated employees of Purchaser by reason of their status as Transferred Employees.

          (b) For purposes of eligibility and vesting (but not benefit accrual) under the employee
benefit plans of Purchaser and its Affiliates providing benefits to Transferred Employees (the
“Purchaser Plans”), Purchaser shall credit each Transferred Employee with his or her years
of service with Seller and any predecessor entities, to the same extent as such Transferred
Employee was entitled immediately prior to the Closing to credit for such service under any similar
Employee Benefit Plan. The Purchaser Plans shall not deny Transferred Employees coverage on the
basis of pre-existing conditions or evidence of insurability and shall credit such Transferred
Employees for any deductibles and out-of-pocket expenses paid under the comparable Employee Benefit
Plans in the year of initial participation in the Purchaser Plans.

          (c) Transferred Employees shall not accrue benefits under any employee benefit policies,
plans, arrangements, programs, practices or agreements of Seller or any of its Affiliates after the
Closing Date. Nothing in this Agreement shall cause duplicate benefits to be paid or provided to
or with respect to any Transferred Employee under any employee benefit policies, plans,
arrangements, programs, practices or agreements. References herein to a benefit with respect to a
Transferred Employee shall include, where applicable, benefits with respect to any eligible
dependents and

31

 

beneficiaries of such Transferred Employee under the same employee benefit policy, plan,
arrangement, program, practice or agreement.

          (d) Purchaser shall take all action necessary and appropriate to ensure that, as of the
Closing Date, Purchaser maintains a qualified retirement plan under Code section 401(k)
(hereinafter referred to as the “Purchaser Savings Plan”) that will accept rollover
contributions, including any notes representing plan loans to participants, from each Transferred
Employee who receives a distribution from a Qualified Plan, who elects such a rollover form of
distribution, and who is employed by Purchaser (or any of its Affiliates) at the time of such
distribution.

          (e) Nothing in this Agreement shall require Seller or its Affiliates to transfer assets or
reserves with respect to any Employee Benefit Plan to Purchaser or its Affiliates or the Purchaser
Plans.

          (f) Except as required by applicable Law, Purchaser shall be responsible for all Liabilities
with respect to Transferred Employees attributable to their accrued and unused vacation, sick days
and personal days through the date hereof as set forth on Schedules 2.1(a) and 5.10(f) hereto.

     8.3 Employee Rights. Nothing herein express or implied shall confer upon any employee
of Seller or its Affiliates, or Purchaser or its Affiliates, or upon any legal representative of
such employee, or upon any collective bargaining agent, any rights or remedies, including any right
to employment or continued employment for any specified period, of any nature or kind whatsoever
under or by reason of this Agreement. Nothing in this Agreement shall be deemed to confer upon any
person (nor any beneficiary thereof) any rights under or with respect to any plan, program or
arrangement described in or contemplated by this Agreement, and each person (and any beneficiary
thereof) shall be entitled to look only to the express terms of any such plan, program or
arrangement for his or her rights thereunder. Nothing in this Agreement shall cause Purchaser or
its Affiliates, or Seller or its Affiliates to have any obligation to provide employment or any
employee benefits to any individual who is not a Transferred Employee or to continue to employ any
Transferred Employee for any period of time following the Closing subject to limitations contained
in any union contract or collective bargaining agreement. This Agreement does not create any right
of an employee or union to object or to refuse to assent to Seller’s assignment of or Purchaser’s
assumption of or succession to any employment agreement, union contract, collective bargaining
agreement, or other agreement relating to conditions of employment, employment separation,
severance or employee benefits, nor shall this Agreement be construed as recognizing that any such
rights exist.

     8.4 Successors and Assigns. In the event Purchaser or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then, and in each case, proper
provision shall be made so that such successors and assigns of Purchaser honor the obligations of
Purchaser and its Affiliates set forth in this Article 

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VIII. In the event Purchaser or any of its Affiliates outsources any of the
Transferred Employees during the Benefit Maintenance Period and such employees are not paid a
severance benefit in accordance with Section 8.2(a), then, and in each case, proper
provision shall be made so that the outsourcing vendor maintains a severance pay plan or policy
that provides a severance benefit for each Transferred Employee who is involuntarily terminated by
the outsourcing vendor during such period, which benefit is the same as the severance benefits that
would otherwise have been provided to such employees in accordance with Section 8.2(a).
For purposes of this Section 8.4, a Transferred Employee shall be considered to have been
outsourced if the employee is hired by the outsourcing vendor pursuant to or in connection with an
agreement entered into between Purchaser or any of its Affiliates and the outsourcing vendor
whereby the outsourcing vendor will provide services to or for Purchaser or any of its Affiliates.

     8.5 Cooperation. Seller and Purchaser agree to cooperate fully with respect to the
actions necessary to effect the transactions contemplated in this Article VIII, including
the provision of records (including payroll records) and information as each may reasonably request
from the other.

     8.6 Employee Obligations of Confidentiality. Notwithstanding anything to the contrary
contained in this Agreement, Seller shall retain the right, after the Closing Date, to enforce
agreements with its current or former Employees, consultants, and contractors related to
Intellectual Property owned by Seller or any of its Affiliates.

ARTICLE IX

CONDITIONS TO SIGNING AND CLOSING

     9.1 Fulfillment of Conditions Precedent to Obligations of Purchaser. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement are subject to the
fulfillment, prior to or on the Closing Date of each of the following conditions (with the
understanding that the signing and closing will occur concurrently):

          (a) the representations and warranties of Seller set forth in this Agreement are true and
correct at and as of the Closing, except to the extent such representations and warranties relate
to an earlier date (in which case such representations and warranties shall be true and correct on
and as of such earlier date);

          (b) Seller has performed and complied in all material respects with all obligations and
agreements required in this Agreement to be performed or complied with by it prior to the Closing
Date;

          (c) there is not in effect any Order by a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby;

          (d) all of the consents of third parties set forth on Schedule 9.1(d) have been
obtained;

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          (e) Seller shall have delivered to Purchaser a duly executed bill of sale in the form of
Exhibit A hereto (the “Bill of Sale”);

          (f) Seller has delivered to Purchaser a duly executed assignment and assumption agreement in
the form of Exhibit B hereto (the “Assignment and Assumption Agreement”);

          (g) Seller has delivered to Purchaser the Sublease, duly executed by Seller;

          (h) Seller has delivered to Purchaser the Transition Services Agreement, duly executed by
Seller;

          (i) Seller has delivered to Purchaser the Wholesale Agreement, duly executed by Seller;

          (j) Purchaser shall have received from counsel to Seller an opinion with respect to the
matters set forth in Sections 5.1 and 5.2 of this Agreement addressed to Purchaser and dated as of
the Closing Date;

          (k) [Purposely Omitted]

          (l) Seller has delivered to Purchaser the Agreement between Seller and PC Management, Inc.
duly executed by both parties in form and substance satisfactory to Purchaser and its counsel and
duly assigned by Seller to Purchaser.

          (m) Seller has delivered to Purchaser the Agreements between Seller and MapInfo Corporation
dated December 28, 2007;

          (n) All issues relating to the dispute with Golf Car Systems, Inc. and Seller have been
resolved to the sole satisfaction of Purchaser and its counsel;

          (o) Seller has delivered to Purchaser (i) a Certificate of Seller certifying that no Liens
have been filed or recorded with respect to the Purchased Assets and AVL Intellectual Property and
(ii) a search of public records which evidences all UCC interests attached to the Purchased Assets
and AVL Intellectual Property, if any, have been terminated;

          (p) Seller has delivered, or caused to be delivered such other documents as are reasonably
necessary or requested by Purchaser to evidence the assignment hereunder of the AVL Intellectual
Property.

     9.2 Fulfillment of Conditions Precedent to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement are subject to the
fulfillment, prior to or on the Closing Date, of each of the following conditions (with the
understanding that the signing and closing will occur concurrently):

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          (a) the representations and warranties of Purchaser set forth in this Agreement are true and
correct at and as of the Closing Date, except to the extent such representations and warranties
relate to an earlier date (in which case such representations and warranties shall be true and
correct on and as of such date);

          (b) Purchaser has performed and complied in all material respects with all obligations and
agreements required by this Agreement to be performed or complied with by Purchaser on or prior to
the Closing Date;

          (c) there is not in effect any Order by a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby;

          (d) Purchaser has delivered to Seller either (a) the financing letter by George Wafer dated as
of the date hereof, the form of which is attached hereto as Exhibit H (the “Wafer
Financing Letter”) and the financing letter by Survivor’s Trust under The Power Family Trust
and George Wafer dated as of the date hereof, the form of which is attached hereto as Exhibit
I (the “Power Financing Letter”; the Wafer Financing Letter and Power Financing Letter,
collectively, the “Financing Letters”), duly executed by Purchaser or (b) cash in the
amount of the Purchaser Price pursuant to the wire transfer referred to in Section 3.2;

          (e) Purchaser has delivered to Seller the Assignment and Assumption Agreement, duly executed
by Purchaser;

          (f) Purchaser has delivered to Seller the Sublease, duly executed by Purchaser;

          (g) Purchaser has delivered to Seller the Transition Services Agreement, duly executed by
Purchaser;

          (h) Purchaser has delivered to Seller the Wholesale Agreement, duly executed by Purchaser; and

          (i) Purchaser has delivered to Seller such other documents as are reasonably necessary or
requested by Seller to evidence the assignment hereunder of the AVL Intellectual Property, duly
executed by Purchaser.

ARTICLE X

INDEMNIFICATION

     10.1 Survival of Representations and Warranties.

          (a) The representations and warranties of Purchaser and Seller contained in this Agreement
shall survive the Closing solely for purposes of this Article X and such representations
and warranties shall terminate at the close of business on the date that is fifteen (15) months
after the Closing Date; provided, however, that (i) the

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representations and warranties contained in Sections 5.1, 5.2, 5.4,
5.16, 6.1, 6.2 and 6.5 shall survive the Closing and remain in
effect indefinitely and (ii) the representations and warranties contained in Sections 5.10
and 5.14 shall survive the Closing until 60 days following the expiration of the applicable
statute of limitations with respect to the particular matter that is the subject matter thereof.
Any claim for indemnification with respect to any of such matters which is not asserted by notice
containing reasonably sufficient detail as to allow the claim to be evaluated (and including the
amount of such claim) given as herein provided relating thereto within such specified period of
survival may not be pursued and is hereby irrevocably waived after such time.

          (b) All of the covenants or other agreements of the parties contained in this Agreement shall
survive until fully performed or fulfilled, unless and to the extent only that non-compliance with
such covenants or agreements is waived in writing by the party entitled to such performance. No
claim for a breach of a covenant or other agreement set forth in this Agreement that (i) by its
nature is required to be performed by or prior to Closing (the “Pre-Closing Covenants”) may
be made or brought by any party hereto more than four (4) months after the Closing Date and (ii)
other than with respect to the covenants set forth in Sections 7.9 and 7.10, by their
nature are required to be performed after Closing (the “Post-Closing Covenants”) may be
made or brought by any party hereto after the one (1) year anniversary of the last date on which
each such Post-Closing Covenant was required to be performed (in each case, a “Survival
Period”); provided, however, that any obligation to indemnify and hold harmless
shall not terminate with respect to any Losses to which the Person to be indemnified shall have
given notice in writing setting forth the specific claim and the basis therefor in reasonable
detail to the indemnifying party in accordance with Section 10.4(a) before the termination
of the applicable Survival Period.

     10.2 Indemnification by Seller.

          (a) Subject to Section 10.5 hereof, Seller hereby agrees to indemnify and hold
Purchaser and its directors, officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and permitted assigns (collectively, the “Purchaser Indemnified
Parties”) harmless from and against any and all losses, liabilities, claims, demands,
judgments, damages (excluding incidental and consequential damages), fines, suits, actions, costs
and expenses (individually, a “Loss” and, collectively, “Losses”) arising out of,
based upon, attributable to or resulting from:

               (i) any misrepresentation in, or any failure of, any of the representations or warranties made
by Seller in this Agreement to be true and correct in all respects at and as of the Closing Date;

               (ii) based upon or resulting from the breach of any Pre-Closing Covenant on the part of
Seller;

               (iii) based upon or resulting from the breach of any Post-Closing Covenant on the part of
Seller;

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               (iv) based upon or arising directly from any Excluded Asset or any Excluded Liability; and

               (v) all actions, suits, proceedings, demands, assessments, judgments, costs, penalties and
expenses, including reasonable attorneys’ fees, incident to the foregoing.

          (b) Purchaser acknowledges and agrees that Seller shall not have any liability under any
provision of this Agreement for any Loss to the extent that such Loss relates to action taken by
Purchaser or any other Person (other than Seller in breach of this Agreement) after the Closing
Date.

     10.3 Indemnification by Purchaser.

          (a) Subject to Section 10.5, Purchaser hereby agrees to indemnify and hold Seller and
its directors, officers, employees, Affiliates, agents, attorneys, representatives, successors and
permitted assigns (collectively, the “Seller Indemnified Parties”) harmless from and
against any and all Losses:

               (i) based upon or resulting from the failure of any of the representations or warranties made
by Purchaser in this Agreement to be true and correct in all respects at and as of the Closing
Date;

               (ii) based upon or resulting from the breach of any Pre-Closing Covenant on the part of
Purchaser;

               (iii) based upon or resulting from the breach of any Post-Closing Covenant on the part of
Purchaser;

               (iv) based upon or arising directly from any Assumed Liability; and

               (v) based upon or arising directly from any Purchased Asset or Purchaser’s operation of the
AVL Business after the Closing Date.

          (b) Seller shall take and cause its Affiliates to take all reasonable steps to mitigate any
Loss upon becoming aware of any event which would reasonably be expected to, or does, give rise
thereto.

     10.4 Indemnification Procedures.

          (a) A claim for indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.

          (b) In the event that any Legal Proceedings shall be instituted or that any claim or demand
shall be asserted by any third party in respect of which payment may be sought under Sections
10.2 and 10.3 hereof (regardless of the limitations set forth in Section 10.5)
(an “Indemnification Claim”), the indemnified party shall promptly

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cause written notice of the assertion of any Indemnification Claim of which it has knowledge
which is covered by this indemnity to be forwarded to the indemnifying party. The failure of the
indemnified party to give reasonably prompt notice of any Indemnification Claim shall not release,
waive or otherwise affect the indemnifying party’s obligations with respect thereto except to the
extent that the indemnifying party is prejudiced as a result of such failure and then only to
extent of such prejudice. The indemnifying party shall have the right, at its sole option and
expense, to be represented by counsel of its choice, which must be reasonably satisfactory to the
indemnified party, and to defend against, negotiate, settle or otherwise deal with any
Indemnification Claim which relates to any Losses indemnified against by it hereunder. If the
indemnifying party elects to defend against, negotiate, settle or otherwise deal with any
Indemnification Claim which relates to any Losses indemnified against by it hereunder, it shall
within 30 days (or sooner, if the nature of the Indemnification Claim so requires) notify the
indemnified party of its intent to do so; provided that if Seller is the indemnifying party that
defends against, negotiates, settles or otherwise deals with such Indemnification Claim, the
reasonable attorneys’ fees and other Losses incurred by Seller in connection with such defense,
negotiation, settlement or other dealings shall reduce (by the amount thereof) the amount
recoverable under the Cap by Purchaser Indemnified Parties from Seller. If the indemnifying party
elects not to defend against, negotiate, settle or otherwise deal with any Indemnification Claim
which relates to any Losses indemnified against hereunder, the indemnified party may defend
against, negotiate, settle or otherwise deal with such Indemnification Claim. If the indemnifying
party shall assume the defense of any Indemnification Claim, the indemnified party may participate,
at his or its own expense, in the defense of such Indemnification Claim; provided,
however, that such indemnified party shall be entitled to participate in any such defense
with separate counsel at the expense of the indemnifying party if (i) so requested by the
indemnifying party to participate or (ii) in the reasonable opinion of counsel to the indemnified
party a conflict or potential conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable; and provided,
further, that the indemnifying party shall not be required to pay for more than one such
counsel (plus any appropriate local counsel) for all indemnified parties in connection with any
Indemnification Claim. The parties hereto agree to cooperate fully with each other in connection
with the defense, negotiation or settlement of any such Indemnification Claim. Notwithstanding
anything in this Section 10.4 to the contrary, neither the indemnifying party nor the
indemnified party shall, without the written consent of the other party,(which consent shall not be
unreasonably withheld) settle or compromise any Indemnification Claim or permit a default or
consent to entry of any judgment unless the claimant and such party provide to such other party an
unqualified release from all liability in respect of the Indemnification Claim. Notwithstanding
the foregoing, if a settlement offer solely for money damages is made by the applicable third party
claimant, and the indemnifying party notifies the indemnified party in writing of the indemnifying
party’s willingness to accept the settlement offer and, subject to the applicable limitations of
Sections 10.5 and 10.6, pay the amount called for by such offer, and the
indemnified party declines to accept such offer, the indemnified party may continue to contest such
Indemnification Claim, free of any participation by the indemnifying party, and the amount of any
ultimate liability with respect to such Indemnification Claim that the

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 indemnifying party has an obligation to pay hereunder shall be limited to the lesser of (A)
the amount of the settlement offer that the indemnified party declined to accept plus the Losses of
the indemnified party relating to such Indemnification Claim through the date of its rejection of
the settlement offer or (B) the aggregate Losses of the indemnified party with respect to such
Indemnification Claim. If the indemnifying party makes any payment on any Indemnification Claim,
the indemnifying party shall be subrogated, to the extent of such payment, to all rights and
remedies of the indemnified party to any insurance benefits or other claims of the indemnified
party with respect to such Indemnification Claim.

          (c) After any final decision, judgment or award shall have been rendered by a Governmental
Body of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated, or the indemnified party and the indemnifying party shall
have arrived at a mutually binding agreement with respect to an Indemnification Claim hereunder,
the indemnified party shall forward to the indemnifying party notice of any sums due and owing by
the indemnifying party pursuant to this Agreement with respect to such matter.

     10.5 Certain Limitations on Indemnification.

          (a) Except as set forth in Section 10.5(b), notwithstanding the provisions of this
Article X, neither Seller nor Purchaser shall have any indemnification obligations for
Losses under Sections 10.2(a)(i)-(iii) or Sections 10.3(a)(i)-(iii) unless the
aggregate amount of all such Losses exceeds $ 50,000 (the “Basket”), and then only to the
extent of such excess. Subject to Section 10.5(b), in no event shall the aggregate indemnification
to be paid by Seller or Purchaser under this Article X exceed $1,000,000(the “Cap”).

          (b) Notwithstanding anything in this Article X, the limitation requiring notice of any
indemnification claim within a specific time period set forth in Section 10.1(a) and the
Cap and Basket limitations set forth in Section 10.5(a) shall not apply to claims for
indemnification in respect of Losses arising under the representations and warranties set forth in
Sections 5.1, 5.2, 5.4, 5.16, 6.1, 6.2 and 6.5
or related to or arising out of the matters set forth in Sections
7.8,10.2(a)(iv), 10.3(a)(iv) and 10.3(a)(v).

          (c) Seller shall not be required to indemnify any Purchaser Indemnified Party and Purchaser
shall not be required to indemnify any Seller Indemnified Party to the extent of any Losses that a
court of competent jurisdiction shall have determined by final judgment to have resulted from the
bad faith, gross negligence or willful misconduct of the party seeking indemnification.

     10.6 Calculation of Losses.

          (a) The amount of any Losses for which indemnification is provided under this Article
X shall be net of any amounts actually recovered or recoverable by the indemnified party under
insurance policies with respect to such Losses (net of any Tax or expenses incurred in connection
with such recovery). Purchaser shall use its

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commercially reasonable efforts to recover under insurance policies for any Losses prior to
seeking indemnification under this Agreement; provided, that Purchaser shall have no obligation
whatsoever to maintain insurance.

          (b) Notwithstanding anything to the contrary elsewhere in this Agreement, no party shall, in
any event, be liable to any other Person for any consequential, incidental, indirect, special or
punitive damages of such other Person, including loss of revenue, income or profits, diminution of
value or loss of business reputation or opportunity relating to the breach or alleged breach
hereof.

     10.7 Tax Treatment of Indemnity Payments. Seller and Purchaser agree to treat any
indemnity payment made pursuant to this Article X as an adjustment to the Purchase Price on
their Tax Returns to the extent permitted by applicable Law.

     10.8 Exclusive Remedy. Except with regard to agreements covenants and representations
contained in Section 7.8 hereof, from and after the Closing, the sole and exclusive remedy for any
breach or failure to be true and correct, or alleged breach or failure to be true and correct, of
any representation or warranty or any covenant or agreement in this Agreement, shall be
indemnification in accordance with this Article X. In furtherance of the foregoing, each
of the parties hereby waives, to the fullest extent permitted by applicable Law, any and all other
rights, claims and causes of action (including rights of contributions, if any) known or unknown,
foreseen or unforeseen, which exist or may arise in the future, that it may have against Seller or
Purchaser, as the case may be, arising under or based upon any federal, state or local Law
(including any such Law relating to environmental matters or arising under or based upon any
securities Law, common Law or otherwise). Notwithstanding the foregoing, this Section 10.8
shall not operate to limit the rights of the parties to seek equitable remedies (including specific
performance or injunctive relief).

ARTICLE XI

MISCELLANEOUS

     11.1 Expenses. Except as otherwise provided in this Agreement, each of the parties
hereto shall bear its own expenses incurred in connection with the negotiation and execution of
this Agreement and each other agreement, document and instrument contemplated by this Agreement and
the consummation of the transactions contemplated hereby and thereby.

     11.2 Submission to Jurisdiction; Consent to Service of Process.

          (a) Except with regard to agreements covenants and representations contained in Section 7.8
hereof, the parties agree that any controversy, claim or dispute arising out of or relating to or
in connection with this Agreement, including, without limitation, any dispute regarding the breach,
termination, enforceability or validity hereof (each, a “Dispute”) should be regarded as a
business problem to be resolved promptly through business-oriented negotiations before resorting to
legal action in accordance with

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the provisions of Section 11.2(b) hereof. The parties therefore agree to attempt in
good faith to resolve any Dispute promptly by negotiation between the executives of the parties who
have authority to settle the Dispute. Such negotiations shall commence upon the mailing of a
notice (the “Dispute Notice”) from the appropriate executive of the requesting party to an
appropriate executive of the responding party. If the Dispute has not been resolved by these
Persons within thirty (30) days of the date of the Dispute Notice, unless the parties mutually
agree in writing to a longer period, the Dispute shall be referred to the chief executive officer
of each of Seller and Purchaser, for discussion and negotiation among them. In the event the
Dispute has still not been resolved by negotiation within forty-five (45) days of the date of the
Dispute Notice, then either party thereto may commence legal action in accordance with Section
11.2(b) hereof. All negotiations pursuant to this Section 11.2(a) shall be
confidential and shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence and shall not be used for, or admitted in, any arbitration or court
proceedings under this Agreement. Nothing contained in this Section 11.2(a) shall preclude
a party from seeking injunctive relief or other provisional remedy if the prerequisites to
obtaining injunctive relief or other provisional remedy, including irreparable harm, are otherwise
satisfied.

          (b) (i) With respect to any Dispute that has not been resolved pursuant to Section
11.2(a) hereof, the parties hereto hereby irrevocably submit to the exclusive jurisdiction of
any federal or state court located within the City of New York and State of New York over any
dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby
and each party hereby irrevocably agrees that all claims in respect of such dispute or any suit,
action proceeding related thereto may be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

               (ii) Each of the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by the delivery of a copy thereof in accordance with
the provisions of Section 11.5 (except not by facsimile).

               (iii) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (i) ARISING UNDER
THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,

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ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES
TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

     11.3 Entire Agreement; Amendments and Waivers. This Agreement (including the
schedules and exhibits hereto) and the Confidentiality Agreement represent the entire understanding
and agreement between the parties hereto with respect to the subject matter hereof and thereof.
This Agreement can be amended, supplemented or changed, and any provision hereof can be waived,
only by written instrument making specific reference to this Agreement signed by the party against
whom enforcement of any such amendment, supplement, modification or waiver is sought. No action
taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall
be deemed to constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on
the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.

     11.4 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and performed in such State
without giving effect to the choice of law principles of such State that would require or permit
the application of the laws of another jurisdiction.

     11.5 Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (i) when delivered personally by hand (with written confirmation
of receipt), (ii) when sent by facsimile (with written confirmation of transmission) or (iii) one
Business Day following the day sent by overnight courier (with written confirmation of receipt), in
each case at the following addresses and facsimile numbers (or to such other address or facsimile
number as a party may have specified by notice given to the other party pursuant to this
provision):

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If to Seller, to:

Bell Industries, Inc.

8888 Keystone Crossing, Suite 1700

Indianapolis, IN 46240

Attention: Kevin J. Thimjon

Fax: (317) 715-6816

with a copy to:

Manatt Phelps & Phillips, LLP

11355 W. Olympic Boulevard

Los Angeles, CA 90064

Attention: Mark J. Kelson, Esq.

Phone: (310) 312-4156

Fax: (310) 312-4224

If to Purchaser or to:

SkyGuard, LLC

c/o Vehicle Manufacturers’ Services Inc.

801 Motor Parkway

Hauppauge, New York 11788

Attention: G. Scott Wafer

Fax: (631) 851-1515

with a copy to:

Zaroff & Zaroff LLP

300 Garden City Plaza

Suite 450

Garden City, New York 11530

Attention: Ira S. Zaroff, Esq.

Fax: (516) 280-5591

     11.6 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any law or public policy, all other terms or provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions

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contemplated hereby are consummated as originally contemplated to the greatest extent
possible.

     11.7 Binding Effect; Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights in any person or
entity not a party to this Agreement except as provided below. No assignment of this Agreement or
of any rights or obligations hereunder may be made by either Seller or Purchaser, directly or
indirectly (by operation of law or otherwise), without the prior written consent of the other
parties hereto and any attempted assignment without the required consents shall be void; provided,
however, that Purchaser may assign its rights, but not its obligations, to a wholly owned
Subsidiary of Purchaser. No assignment of any obligations hereunder shall relieve the parties
hereto of any such obligations.

     11.8 Non-Recourse. No past, present or future director, officer, employee,
incorporator, member, partner, stockholder, Affiliate, agent, attorney or representative of Seller,
Purchaser or its Affiliates shall have any liability for any obligations or liabilities of Seller
or Purchaser, as the case may be, under this Agreement or the Seller or Purchaser Documents of or
for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and
thereby.

     11.9 Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.

44

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective authorized officers as of the date first written above.

	 	 	 	 	 
	 	BELL INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SKYGUARD, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:exv10w2

 

EXHIBIT
10.2

FIRST AMENDMENT TO EMPLOYMENT LETTER

     THIS FIRST AMENDMENT TO EMPLOYMENT LETTER (the “Amendment”) is made effective as of the
15th day of February, 2008, by and between Bell Industries, Inc., a California
Corporation (“Bell”), and Kevin J. Thimjon (the “Executive”).

W I T N E S S E T H :

     WHEREAS, the Executive and Bell entered into an employment letter effective as January 5, 2007
(the “Employment Letter”);

     WHEREAS, Bell and the Executive desire to modify the terms of the Executive’s employment under
the Employment Letter.

     NOW THEREFORE, the parties hereby covenant and agree as follows:

	 	1.	 	Effective Date. This Amendment shall become effective on the date
hereof.
	 
	 	2.	 	Position. The section of the Employment Letter titled “Position” is
hereby amended and restated as follows:

     “Position: President and Chief Financial Officer”

	 	3.	 	Base Annual Salary. The section of the Employment Letter titled “Base
Annual Salary” is hereby amended and restated as follows:

     “Base Annual Salary: $275,000, subject to applicable withholdings. Bell issues
paychecks bi-weekly.”

     IN WITNESS WHEREOF, this Amendment to Employment Letter is executed as of the day and year
first written above.

Executive

	 	 	 	 	 
	/s/ Kevin J. Thimjon	 	 
	 	 	 
	Kevin J. Thimjon	 	 
	 
	 	 	 	 
	Bell Industries, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Clinton J. Coleman	 	 
	 

	 	 	 	 
	 

	 	Name: Clinton J. Coleman

Title: Chief Executive Officer

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