Document:

Exhibit 4.6

 

STOCK PURCHASE AGREEMENT

 

STOCK PURCHASE AGREEMENT, dated February 9,
2006 (the “Closing Date”), by and among Spirent Communications, Inc., a
Delaware corporation (the “Purchaser”) and those individuals listed as “Stockholders”
on Schedule A hereto (individually a “Stockholder” and collectively the “Stockholders”).

 

W I T N E S S E T H:

 

WHEREAS, QuadTex Systems Inc.,
a Texas corporation with a mailing address at 1701
Gateway Blvd, Suite 333, Richardson, Texas 75080 (the “Company”) is in the business, directly and through the PRC
Affiliate (as defined below) of developing and licensing software
products which provide testing solutions to equipment vendors and service
providers, including without limitation for protocol and interoperability testing
of VoIP protocols and for feature testing of VoIP systems such as IP PBX, IP
Centrex and Softswitches (the “Business”); and

 

WHEREAS, the Stockholders are the owners of all of the issued and
outstanding shares (the “Shares”) of the capital stock of the Company; and

 

WHEREAS, the Stockholders desire to sell to the Purchaser, and the
Purchaser desires to purchase from the Stockholders, all of the Shares for the
consideration and on the terms set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the
mutual covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

 

ARTICLE I

Purchase and Sale of Shares.

 

Section 1.1                                      Sale
of Shares. Subject to the terms and conditions of this Agreement, the
Stockholders do hereby sell, transfer, convey, assign and set over (“Transfer”)
to the Purchaser, and the Purchaser does hereby, purchase and acquire from the
Stockholders, all of the Stockholders’ right, title and interest in and to the
Shares.

 

ARTICLE II

Purchase Price.

 

Section 2.1.                                   Payment
at Closing. In consideration of the Transfer to the Purchaser of the Shares
and of the other representations, warranties and covenants herein, the
Purchaser:  (a) is paying to the
Stockholders $7,500,000 by wire transfer of immediately available funds,
receipt of which is hereby acknowledged by the Stockholders; and (b) shall pay
to the Stockholders those certain amounts, upon attainment of certain
post-Closing milestones and up to a maximum aggregate amount of $1,500,000, as
is set forth in Schedule 2.1(b).

 

 

Section 2.2                                      Post Closing Adjustment. The purchase price payable to the Stockholders
is subject to the post-closing adjustment procedures set forth in Article IV.

 

ARTICLE III

Closing.

 

Section 3.1                                      Closing Date. The closing of the transactions contemplated hereby (the “Closing”) is
being held in Dallas, Texas, on the Closing Date, and shall be effective as of
12:01 a.m. local time on the Closing Date. All matters at the Closing shall be
considered to take place simultaneously.

 

Section 3.2                                      Documents of Conveyance, Etc. The Stockholders and the Purchaser are
delivering to each other, simultaneously herewith, such certificates, consents,
approvals, agreements, and documents relating to the transactions contemplated
by this Agreement as are set forth on Schedule B hereto (collectively with this
Agreement, the “Closing Documents”). Each party further agrees that at or
subsequent to the Closing, upon the written request of the other party, it will
promptly execute and deliver or cause to be promptly executed and delivered any
further assignment, instruments of transfer and bills of sale or conveyances
reasonably necessary or desirable to vest fully in the Purchaser all of the
Stockholders’ right, title and interest in and to the Shares.

 

ARTICLE IV
Purchase Price Adjustment

 

Section 4.1                                      General.

 

A.                                   As used herein, the term “Closing Working Capital
Value” shall mean Working Capital Value at Closing, and the term “Working
Capital Value” shall mean the result, in dollars, of subtracting the Working
Capital Liabilities from the Working Capital Assets, calculated in accordance
with Section 4.6 below.

 

B.                                     To the extent that the Closing Working Capital
Value exceeds $65,000 then the Purchaser shall pay to the Stockholders in cash
the amount of such excess, up to a maximum payment of $100,000 in the aggregate.
To the extent that the Closing Working Capital Value is less than $65,000 then
the Stockholders shall pay to the Purchaser in cash the amount of such
deficiency.

 

C.                                     The Stockholders represent and warrant to the
Purchaser that the $65,000 figure calculated as set out on Schedule 4.1(C)
represents a good faith estimate of the Working Capital Value as at 8 February
2006 calculated in accordance with the Working Capital Accounting Standards
(and including all of the Working Capital Liabilities and Working Capital
Assets).

 

Section 4.2.                                   Preparation of Final Closing Working Capital
Value Statement. The
Stockholders shall prepare and deliver to the Purchaser within 30 calendar days
after the Closing

 

 

Date a
statement (the “Final Closing Working Capital Value Statement”), calculated
pursuant to Section 4.6, at the Closing Date, and which sets forth: (i) a
determination of the Closing Working Capital Value, and (ii) a computation of
any payment required to be made to the Stockholders or the Purchaser,
respectively, under Section 4.1(B).

 

Section 4.2.                                   Disagreement With Closing Working Capital Value
Statement. If the Purchaser
disputes the identity of assets, valuation, and/or computations within the
Final Closing Working Capital Value Statement the Purchaser may give written
notice to the Stockholders of the dispute (a “Dispute Notice”) as quickly as
reasonably practicable but in any event within 60 calendar days after its
receipt of the Stockholders’ Final Closing Working Capital Value Statement. If
the Purchaser does not so give a Dispute Notice within such time period, the
Closing Working Capital Value within the Final Closing Working Capital Value
Statement shall be deemed to have been accepted and agreed by the Purchaser.

 

Section 4.3.                                   Dispute Resolution. If the Purchaser submits a Dispute Notice to
the Stockholders as aforesaid, the Purchaser and the Stockholders shall work
together in good faith to seek to resolve any matters set forth in such Dispute
Notice. If the Purchaser and the Stockholders are unable to resolve any
disagreement between them within 30 calendar days after the Stockholders’
receipt of a Dispute Notice from the Purchaser, the items in dispute (and only
the items in dispute) shall be referred for determination to the Arbitrator (as
defined below) as promptly as practicable. Each of the Purchaser and the
Stockholders will use reasonable efforts to cause the Arbitrator to render
their decision as soon as practicable. Neither party will disclose to the
Arbitrator, and the Arbitrator will not consider for any purpose, any
settlement negotiations, offers, and/or counteroffers, whether written, verbal,
or in any other form, made by either party. As part of the resolution of all
outstanding disputes, the parties will cause the Arbitrator to prepare a
statement of the Closing Working Capital Value, determined in accordance with
Section 4.6 (the “Arbitration Closing Working Capital Value Statement”).

 

As used above, the term “Arbitrator” shall
mean a nationally known independent accounting firm (which shall not be the
primary auditors for the Company or the Purchaser) (an “Accounting Firm”)
chosen by mutual agreement of the Stockholders and the Purchaser, provided,
however that if both parties do not agree on the Arbitrator, then the
Stockholders shall chose an Accounting Firm and the Purchaser shall choose an
Accounting Firm, and those two arbitrators shall jointly appoint a third
Accounting Firm, and such third Accounting Firm shall be the Arbitrator
hereunder. Each of the Stockholders and the Purchaser agree to appoint an
Accounting Firm pursuant to the foregoing proviso clause, if the Stockholders
and the Purchaser do not otherwise agree upon the Arbitrator as aforesaid. The
Arbitrator shall resolve each item in dispute as described in the foregoing
paragraph in accordance with this Agreement, and any and all hearings and
meetings of the Arbitrator shall be held in Dallas, Texas. The parties agree
that the Arbitrator shall have substantial experience in financial accounting
for software companies.

 

Section 4.4.                                   Post-Closing Payments. Any payment required by Section 4.1(B) to be
paid by the Purchaser to the Stockholder, or by the Stockholders to the
Purchaser, as the case may be, shall be so paid by wire transfer of immediately
available funds, as promptly as

 

 

reasonably
practicable after the final agreement or determination of Closing Working
Capital Value in accordance with the foregoing provisions.

 

Section 4.5.                                   Cooperation. The Purchaser and the Stockholders shall cooperate with each other and
with each other’s authorized representatives in connection with the preparation
and review of the Final Closing Working Capital Value Statement, the
Arbitration Closing Working Capital Value Statement or any Dispute Notice.

 

Section 4.6.                                   Accounting
Procedures; Expenses. The Closing Working Capital Value, whether within the
Final Closing Working Capital Value Statement, a Dispute Notice, or any
Arbitration Closing Working Capital Value Statement, along with any respective
constituent parts thereof, shall be determined in accordance with accounting
principles generally accepted in the United States (the “Working Capital
Accounting Standards”). The Stockholders and the Purchaser will each pay 1⁄2 of
any fees and expenses of the Arbitrator in connection with their preparation of
any Arbitration Closing Working Capital Value Statement and their determination
of Closing Working Capital Value.

 

ARTICLE V

Representations and Warranties by the Stockholders.

 

Section 5.1                                      Representations and Warranties. Each and all of the Stockholders hereby jointly
and severally represent and warrant to the Purchaser that:

 

A.                                   Corporate Existence and Qualification of Company;
Due Execution, Etc.

 

(i)                                     The Company is a corporation duly incorporated,
validly existing and subsisting under the Laws of the State of Texas and has
the requisite corporate power and authority to own, lease or otherwise hold the
Assets and to carry on the Business as conducted through the Closing Date. The
Company has no subsidiaries, direct or indirect.

 

(ii)                                  Each of the Stockholders has all requisite power
and authority to execute, deliver and perform this Agreement and the Closing Documents
to which he or it is a party, and to consummate the transactions contemplated
hereby and thereby. Assuming the due execution of this Agreement and the
Closing Documents by the Purchaser, this Agreement and the Closing Documents to
which each of the Stockholders is a party constitute valid and binding
obligations of the respective Stockholder and enforceable in accordance with
their respective terms, subject only to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws relating to creditors’ rights
generally and to general principles of equity (regardless of whether such
enforcement is considered in a proceeding at law or in equity).

 

(iii)                               The
authorized capital stock of the Company consists solely of 1,000,000 shares of no par common stock. The
Shares are comprised of 1,000,000 shares
of such common stock and constitute all of the issued and outstanding capital
stock of the Company. The Shares were duly authorized and validly issued and
are fully paid and non-assessable, and the Transfer of the Shares to the
Purchaser hereunder is not subject to any preemptive rights. There are no

 

 

outstanding securities of the
Company other than the Shares and there are no outstanding rights or options to
acquire securities of the Company. The Company is not subject to any obligation
to issue, deliver, redeem, or otherwise acquire or retire any shares of capital
stock. The Stockholders are not entitled to the payment of any dividends or
other distributions from the Company after the date hereof on account of the
Stockholders’ ownership of Shares on or before the date hereof.

 

(iv)                              The
Stockholders are the sole holders of record and sole beneficial owners of the
Shares, in each case free and clear of any Lien and with all rights to vote and
transfer such Shares without any restrictions, in the respective amounts set
forth on Schedule A.

 

B.                                     No Violation.

 

(i)                                     Neither the execution and delivery by any
Stockholder of this Agreement or the Closing Documents to be executed by such
Stockholder, nor the consummation by the Stockholders of the transactions
contemplated hereby or thereby: (1) violates or will violate any Law applicable
to the Stockholders; (2) violates or will violate any order, ruling, writ,
judgment, injunction or decree of any Governmental Entity (an “Order”)
applicable to the Stockholders; (3) conflicts or will conflict with, or results
or will result in a breach of or default under, the Articles of Incorporation
or bylaws of the Company; or (iv)
results or will result in the imposition of any Lien (as defined below) on any
of the Assets (as defined below) or the Shares. No consent, authorization, or
approval from, or registration or filing with, any Governmental Entity or other
third party (not obtained or made as of the date hereof) is required to be
obtained or made by or with respect to the Stockholders or the Business in
connection with the execution and delivery of this Agreement or the Closing
Documents or the consummation by the Stockholders of the transactions contemplated
hereby or thereby, including without limitation the Transfer of the Shares.

 

As used herein, the term “Lien” means any lien, mortgage, security
interest, charge, pledge or encumbrance of any kind.

 

(ii)                                  The execution, delivery and performance by the Stockholders
of this Agreement and the other Closing Documents, and the consummation of the
transactions hereunder and thereunder, including without limitation the
Transfer of the Shares to the Purchaser, will not create a default by the
Company or any Stockholder under, or give any Governmental Entity or other
third party the right to terminate or accelerate:

 

(A)                              any Contract, except:

 

(1)                                  with respect to any Contract (excluding any
license or other Contract with customers) where such default or the exercise of
such right will not materially impact the ability of the Company to operate the
Business from and after Closing and either (x) such Contract is immaterial to
the operation of the Business; or (y) such Contract covers services or goods
readily replaceable by the

 

 

Company on economic terms substantially as
favorable as those applicable to the Company under such Contract; or

 

(2)                                  those Contracts with Cisco which are listed on
Schedule 5.1B(2)(A),.

 

(B)                                any permits, licenses, approvals, consents and authorizations
issued by any Governmental Entity (collectively, “Licenses”).

 

C.                                     Financial Information.

 

(i)                                     Attached hereto as Schedule 5.1(C)(i) are the
following financial statements and other financial information of the
Company:

 

(A)                              an
unaudited balance sheet as of December 31, 2004, together with an unaudited
income statement for the twelve months ended December 31, 2004(collectively,
the “2004 Financial Statements”); and

 

(B)                                an
unaudited balance sheet as of December 31, 2005, together with an unaudited
income statement for the twelve months ended December 31, 2005 (collectively,
the “2005 Financial Statements”).

 

(ii)                                  The
2004 Financial Statements and the 2005 Financial Statements (a) have been prepared in accordance with the
Company Accounting Standards (as defined below), (except as otherwise noted
therein) and (b) present fairly, in all material respects, the financial
position of the Company and the
Business at the dates indicated in such financial statements and the results of
the operations of the Company for
the periods stated therein. The balance sheet as of December 31, 2005 and
included within said Schedule 5.1(C)(i) is referred to herein as the “December
31, 2005 Balance Sheet.”

 

(iii)                               Each of the Receivables reflected in the Closing
Net Asset Value will have arisen out of transactions in the ordinary course of
the Business and, subject to any reserves therefor reflected in the Closing Net
Asset Value, which Receivables and reserves will be determined under the Working
Capital Accounting Standards, all such Receivables will constitute as of the
respective dates thereof identifiable and, to the knowledge of the
Stockholders, collectible indebtedness of the applicable account debtor, not
subject to any material offset, defense, counterclaim or Lien.

 

(iv)                              The Company does not have any Liabilities other
than: (a) Liabilities reserved or reflected on the December 31, 2005 Balance
Sheet; (b) Liabilities arising since December 31, 2005 in the ordinary course
of the Business, consistent with past historical practice (taking into account
seasonal changes consistent with historical seasonal changes) and which are
reserved or reflected on the accounting books and records of the Business
(copies of which have

 

 

been
provided to the Purchaser); and (c) Liabilities for post-Closing performance by
the Company under Contracts or Licenses disclosed on Schedule 5.1(E)(iv).

 

(v)                                 As used herein, the term “Company Accounting
Standards” means those accounting standards and procedures of the Company as are
set forth on Schedule 5.1(C)(v), consistently applied throughout the periods
involved.

 

D.                                    Absence of Certain Transactions. Since December 31, 2004: (i) the Business has
been operated by the Company only in
the ordinary course, consistent with past historical practice (taking into
account seasonal changes consistent with historical seasonal changes); and (ii)
there has been no Material Adverse Effect.

 

E.                                      Material Contracts and Obligations.

 

(i)                                     The Stockholders have made available to the
Purchaser true and correct copies of all Contracts of the Company or otherwise
affecting the Business and to which the Company is a party which are in written
form and any amendments thereto; other than the following Contracts: (1) the Open
SSL Project License; (2) the Distributed Object Computing (DOC) Group License;
and (3) the QT and Cisco Technology License Agreement dated December 14, 2005;
provided that the Company does not have, and will not have, any material
Liability under any of such three Contracts. Each Contract of the Company which is material to the operation of the
Business (and in any case, each license to or other Contract with any customer
of the Business) is listed on Schedule 5.1(E)(iv), represents the valid and
binding obligation of the Company and will be in full force and effect
immediately following the Transfer of the Shares at the Closing.

 

(ii)                                  With
respect to each Contract, including without limitation each license to or other Contract with any customer of the Business,
to which the Company is a party, the Company and, to the knowledge of the
Stockholders, the other party or parties thereto, has performed in all material
respects all obligations required to be performed by it thereunder through the
Closing Date, and the Company is not (with or without the lapse of time or the
giving of notice, or both) in default under any such Contract (other than a
default under any Contract which is not material to the Business and which
default will not result in material Liability to the Company), and the Company
has not received notice of any default (whether monetary or nonmonetary) or
termination of any such Contract from any other party thereto.

 

(iii)                               Schedule 5.1(E)(iv) sets forth, under the heading
“Licenses,” all Licenses currently held by the Company and such Licenses
constitute all of the Licenses required for the conduct of the Business as
conducted prior to the Closing Date. The Company has not received notice of any
claim, action, suit, proceeding or investigation in or before any Governmental
Entity, whether brought, initiated, asserted or maintained by a Governmental
Entity or any other person or entity (a “Legal Proceeding”) nor, to the
knowledge of the Stockholders, has any such claim, action, suit, proceeding or
investigation been threatened, to revoke, suspend or limit the rights of the
Company under any of its Licenses, and the Company is in compliance in all
material respects with each of its Licenses.

 

 

(iv)                              Without limiting the generality of the foregoing,
Schedule 5.1(E)(iv) accurately lists, as of the Closing Date, each Contract,
whether written or oral and including all amendments thereto, to which the
Company is a party of the following types:

 

(a) any employment, severance or consulting
Contract with any employee or former employee; (b) any Contract relating to
acquisition or construction of fixed assets requiring aggregate future payments
or expenditures in excess of $10,000 in total; (c) any Contract under which the
Company is a lessee or lessor of real or personal property (excluding any such Contract
under which the Company is a lessee of personal property and which requires
less than $5,000 in annual payments and $10,000 in total payments by the
Company); or (d) any Contract with respect to or relating to Intellectual
Property (including licenses thereof or maintenance contracts with respect
thereto); (e) any other Contract which (i) involves aggregate future payments
by or to the Company in excess of $10,000, (ii) would reasonably be expected to
result in a Material Adverse Effect, (iii) has been entered into with an
Affiliate of the Company, or (iv) is otherwise material to the Company or the
conduct of the Business.

 

Notwithstanding anything herein to the
contrary the Company does not have any Contracts: (a) relating to cleanup,
abatement or other actions in connection with any Environmental Condition; (b)
granting to any person a first-refusal, first-offer or other right to purchase
or acquire any Assets; (c) under which commissions are payable and which are
not terminable without penalty on 30 days’ or less prior notice; (d) under
which the Company is or has agreed to become a joint venturer or partner; (e)
granting a power of attorney binding upon the Company; (f) with respect to
letters of credit, surety or other bonds or pursuant to which the Company is,
or is to be, subjected to a Lien; (g) limiting or restricting the ability of
the Company to enter into or engage in any market or line of business; or (h)
relating to any borrowing, or any full or partial guarantee or similar
Liability in respect of any Liability of any person or entity other than the
Company.

 

F.                                      Title to Real Properties; Liens; Condition of
Properties. The real estate
leased to the Company and described on Schedule 5.1(F) (the “Leased Properties”)
comprise all of the real estate owned or leased by the Company. With respect to
each Business Lease, neither the Company nor (to the knowledge of the
Stockholders) any other party thereto is in default thereunder. To the
Stockholders’ knowledge, the Leased Properties, and the Company’s use of the
same, comply with all applicable zoning or similar Laws. The Company has not
received notice of any condemnation proceedings and, to the knowledge of the
Stockholders, no condemnation proceedings have been threatened with respect to
any of the Leased Properties, nor has any such property been condemned. The
Company has not received notice of any Legal Proceedings and, to the knowledge
of the Stockholders, no Legal Proceedings have been threatened that will, with
the passage of time or otherwise, give rise to a mechanic’s, serviceman’s,
materialman’s or other Lien against the Leased Properties. The Company has
access to public roads or valid easements over private streets or private
property for such ingress to and egress from each of the Leased Properties as
is necessary for the conduct of the Business as conducted as of the Closing
Date, and to the knowledge of the Stockholders, no change therein has been
proposed by any Governmental Entity.

 

 

G.                                     Title to Assets. Schedule 5.1(G) sets forth substantially all of the Fixed Assets owned,
leased or held by the Company. Except as set forth on Schedule 5.1(G), the
Company has good and marketable title to all Fixed Assets described in such
Schedule as being owned by the Company and all other Assets, free and clear of
all Liens other than Liens for Taxes which are not due and payable. Each
material Fixed Asset, and all Fixed Assets in the aggregate, are in reasonable
operating condition, normal wear and tear excepted.

 

H.                                    Intellectual Property.

 

(a)                                  Schedule 5.1(H) lists all Business Intellectual
Property, which includes all Intellectual Property used in or necessary
to the operation of the Business as historically operated by the Company. The
Company either possesses all right, title and interest in and to all Business
Intellectual Property, free and clear of Liens, or otherwise has sufficient
rights to use such Business Intellectual Property pursuant to a license or
permission as may be necessary in connection with the operation of the Business.
No Business Intellectual Property is subject to any Legal Proceeding or Order
and no Legal Proceeding or Order relating to any Business Intellectual Property
is pending (provided that the foregoing provisions of this sentence shall be
deemed to be qualified to the knowledge of the Stockholders insofar as relating
to any third party Software within the Business Software which is licensed to
the Company on a non-exclusive basis) or, to the knowledge of the Stockholders,
threatened. Except for the indemnity relating to its Agreements with Cisco as
described on Schedule 5.1(H), the Company has not agreed to indemnify any
person for or against any interference, infringement, misappropriation or other
conflict with respect to any Business Intellectual Property; and the Company
has not granted any exclusive license of any kind in and to any Business
Intellectual Property to any third party. Each trademark application and
registration and each patent application and issued patent of the Company is
being diligently prosecuted or exists in good standing.

 

(b)                                 The
Company has not, in the conduct of the Business or its use of the Business
Intellectual Property, interfered with, infringed upon or misappropriated any
Intellectual Property of any Person, and the Company has not ever received any
claim, demand or notice alleging any such interference, infringement,
misappropriation or violation (including any claim that it must license or
refrain from using any such rights of any Person). To the knowledge of the
Stockholders, no third party has interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Business Intellectual
Property.

 

(c)                                  With
respect to the Business Intellectual Property that is the subject of any
license, sublicense, agreement or permission (either to or from the Company):
(i) each such license, sublicense, agreement or permission is listed as a
Contract on Schedule 5.1(E)(iv) and
is legal, valid, binding, enforceable and in full force and effect; (ii) no
breach, default, termination or loss or change of rights or benefits shall
occur with respect to such license, sublicense, agreement or permission as a
result of the consummation of the transactions contemplated by this Agreement;
(iii) neither the Company nor, to the knowledge of the Stockholders, any other
party to the license, sublicense, agreement or permission is in breach or
default and no event has occurred which with notice or lapse of time would
constitute a breach or default by the Company or permit termination,
modification or acceleration thereunder by the other party; (iv) the Company
has not

 

 

received any notice that a
party to the license, sublicense, agreement or permission has repudiated any
provision thereof; (v) the Company has not received any notice that the underlying
Business Intellectual Property is subject to any outstanding Order; and (vi)
the Company has not received any notice that any Legal Proceeding is pending or
is threatened which challenges the legality, validity or enforceability of the
underlying Business Intellectual Property.

 

(d)                                 None
of the processes, methodologies, trade secrets, research and development
results, and other know-how included in any Business Intellectual Property, the
value of which is contingent upon maintenance of the confidentiality thereof,
has been disclosed by the Company to any person other than employees,
contractors, customers, representatives and agents of the Company, and each
such employee and contractor is a party to a customary confidentiality and
non-disclosure agreement with the Company, each of which agreements is listed
as a Contract on Schedule 5.1(E)(iv).
All current and former employees of the Company have executed confidentiality
and non-disclosure agreements in favor of the Company and such agreements are
listed as Contracts on Schedule 5.1(E)(iv).

 

(e)                                  No party other than the Company has any rights to
use any Business Software except pursuant to licenses which are listed as Contracts
on Schedule 5.1(E)(iv)(and excluding
any third party Software within the Business Software which is licensed to the
Company on a non-exclusive basis), and no
party other than the Company has any rights with respect to the source code for
such Business Software (excluding source code for any third party Software
within the Business Software which is licensed to the Company on a
non-exclusive basis)(and without limiting the foregoing the Company is not a
party to any source code escrow or similar arrangements). No Business
Software, or the use thereof, violates any Laws, including Laws governing
export control, and no Business Software contains any bugs, worms, viruses,
time-bombs, cancelbots, usage authorization codes, or other codes or
programming devices that might damage or delete such Business Software or any
other software, computer hardware or data or other property of any third party,
other than usage authorization codes or similar devices intended to ensure
compliance by third party licensees with the terms of the relevant licenses
listed as Contracts on Schedule 5.1(E)(v). Except as disclosed on Schedule
5.1(H)(e), no Business Software contains, includes, or relies on any Publicly
Available Software.

 

(f)                                    Without limiting the foregoing: (1) none
of the Business Intellectual Property has been developed by Kai Da Xun
Telecommunication (the “PRC Affiliate”) except for any such Business
Intellectual Property which has been duly and validly transferred in its
entirety (and free an clear of any Liens or other claims) to the Company prior
to Closing; (2) none of the Business Intellectual Property is subject to any
claims (whether relating to ownership, usage or otherwise) or licenses to or
from, any Affiliate of the Company including without limitation the PRC
Affiliate and/or any former or current employees or contractors of the PRC Affiliate
(nor has any person or entity other than the Company filed any registrations or
other claims within China relating to any Business Intellectual Property); (3)
the employees of the Company have no agreements, oral or written, with the PRC
Affiliate other than those specific agreements provided in written form to the
Purchaser in response to the Purchaser’s legal due diligence request checklist
under the heading “Management and Employment Agreements;” and (4) as of Closing

 

 

(A) the
Company owns (I) all Intellectual Property developed by the PRC Affiliate or
its employees or at the offices of the PRC Affiliate; and (II) all other assets
located at such offices or otherwise used by the PRC Affiliate; and (B) the PRC
Affiliate owns no assets.

 

(g)                                 As used herein: (1) the term “Business
Intellectual Property” means all Intellectual Property which is owned,
licensed or used by the Company, or which otherwise relates to the Business,
and specifically includes the Business Software; (2) the term “Intellectual
Property” means all licenses, patents, copyrights, designs and drawings,
engineering and manufacturing documents, technical manuals, patterns,
processes, formulae, know-how, trade secrets, trademarks, service marks, trade
names, inventions and discoveries (whether patentable or not), computer
software (whether in source code or object code form)(“Software”), and other
similar rights, and all applications therefor and registrations thereof and all
rights relating thereto, including rights to sue for past, present and future
infringement or other violations of Intellectual Property; (3) the term “Business
Software” means any Software which has been licensed, sublicensed, or
distributed by the Company in connection with the Business, including without
limitation the Software products known as “QuadTex”and any and all components
thereof; and (4) the term “Publicly Available Software” means (a) any Software
that contains, or is derived in any manner (in whole or in part) from, Software
that is distributed as free Software, open source Software or similar licensing
or distribution models and (b) any Software that requires as a condition of
use, modification and/or distribution of such Software that other Software
distributed with, combined with or derived from such Software (i) be disclosed
or distributed in source code form without charge; (ii) be licensed for the
purpose of making derivative works without charge; or (iii) be redistributable
at no charge.

 

I.                                         Litigation. Except as set forth on Schedule 5.1(I), there are no Legal Proceedings
pending or, to the knowledge of the Stockholders, threatened against the
Company or any of the Stockholders or any predecessors or Affiliates of the
Company including, without limitation, any legal proceeding that seeks to enjoin
or obtain damages in respect of the consummation of the transactions
contemplated by this Agreement or any other Closing Document.

 

J.                                        Compliance With Laws.

 

(i)                                     The Company is not in default with respect to any
Order and the Business is operated and has been operated in all material
respects in compliance with all applicable Laws.

 

(ii)                                  Without limiting the generality of the foregoing,
(a) the Company does not have any Liability under any, and the Company has
complied with, and is presently in compliance with, all Environmental Laws and
other Laws applicable to (1) the Leased Properties, and any facilities and
operations thereon (including the Business), or (2) any other location
which the Company or any Affiliate have at any time leased or owned, or at which
the Company or any Affiliate have at any time conducted any activities or
operations, including without limitation the Business (all such other locations
along with the Leased Properties,
the “Business Locations”); (b) to the Stockholders’ knowledge there exists no Environmental Condition with
respect to any of any Business Locations or any facilities or operations
thereon; (c) there has been no Release or Threat of Release (as such terms are
hereinafter defined) of any Hazardous Material, at any

 

 

Business
Locations by the Company or its Affiliates, or, to the Stockholders’ knowledge,
any other party; (d) the Company has not received any notice under the citizen
suit provisions of any Environmental Law or any request for information,
notice, demand letter, or notice of a Legal Proceeding with respect to any
Environmental Condition; and (e) the Company does not use any private water or
sewer system at any of the Leased Properties.

 

(iii)                               There are no: (a) on-site or off-site locations
where the Company or any Affiliate of the Company or, to the knowledge of the
Stockholders, any predecessor of the Company or of any such Affiliate, has
stored, disposed or arranged for the storage or disposal of any Hazardous
Materials (excluding the use during the ordinary course of the Business of
small amounts of cleaning solvents used in servicing or repairing consumer
electronic equipment), and (b)  to the
knowledge of the Stockholders, underground storage tanks located at or on any
of the Leased Properties.

 

K.                                    Employee
Benefits.   Schedule 5.1(K) accurately lists all of the
Company’s employees as of the Closing Date
(the “Company Employees”) and all Benefit Plans and material Benefit
Arrangements currently applicable to Company Employees or former employees. Each
Benefit Plan and Benefit Arrangement complies in all respects and has been
operated, funded and administered in all respects in accordance with its
provisions and in compliance with the requirements prescribed by any and all
statutes, orders or governmental rules or regulations currently in effect,
including, but not limited to the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), to the extent ERISA is applicable, and all other
applicable laws. There has been no “reportable event” (for which the notice
requirement is not waived by the applicable regulations under ERISA) or “prohibited
transaction” (as such terms are defined in ERISA and the Internal Revenue Code
of 1986, as amended (the “Code”), as applicable) and no termination has occurred
with respect to any Benefit Plan. Each Benefit Plan that is an “employee
pension benefit plan” as defined in Section 3(2) of ERISA has been determined
by the Internal Revenue Service (the “IRS”) to be qualified under Section
401(a) of the Code, and no event or omission has occurred which would cause any
such Benefit Plan to lose such qualification. The Company has not incurred any
liability to the Pension Benefit Guaranty Corporation (“PBGC”) other than PBGC
premium payments or otherwise under Title IV of ERISA (including withdrawal
liability) with respect to any such Benefit Plan. The Company has never
contributed to or been required to contribute to any Multiemployer Plan(as
defined by ERISA Section 3(37)) nor does the Company have any liability (including
withdrawal liability as defined in ERISA Section 4201) under any Multiemployer
Plan. Each Benefit Plan which covers or has covered employees or former
employees which is a “group health plan,” as defined in Section 607(l) of
ERISA, has been operated in compliance with the provisions of Part 6 of Title
1, Subtitle B of ERISA and Section 4980B of the Code, and with the provisions
of the Health Insurance Portability and Accountability Act at all times. No
Benefit Plan provides any health or life insurance benefits for retired or
former employees, except as required by Part 6 of Title 1, Subtitle B of ERISA
and Section 4980B of the Code, or applicable state law. The Stockholders have
made available to the Purchaser all plan documents, plan summaries and other
documents relating to the Benefit Plans and Benefit Arrangements. Neither any
Company employee or former employee, nor any beneficiary or dependent of any
Company employee or former employee, is or may become entitled to
post-employment or severance benefits or payments of

 

 

any kind, or any other
non-pension benefits by reason of their employment by the Company or
termination of such employment, or the consummation of the transactions
contemplated hereby. The Company has terminated its Simplified Employee Pension
plan (“SEP”) without any current or future liability to the Company, and the
Company has complied with all laws with respect to, as well as the terms and
conditions of, the SEP and has made all employee-related contributions or
payments in connection with the same.

 

L.                                      Labor Relations. The Company is not a party to or subject to any collective bargaining
agreements. The Company does not have any contracts of employment with any
employee except as are listed on Schedule 5.1(E)(iv). There are, and since
January 1, 2005 have been, no strikes or work slowdowns pending or, to the
knowledge of the Stockholders, threatened, against or affecting the Business. The
Company is not currently a party to, and, to the knowledge of the Stockholders,
the Company is not now threatened with, any Legal Proceeding by any employee or
former employee of the Company or the Business, including without limitation
any such Legal Proceeding or other proceeding for unlawful employment practices
or discrimination in employment. To the knowledge of the Stockholders, no union
organizational campaign is or has been pending or instituted with respect to
the employees of the Business.

 

M.                                 Insurance Policies. The Company has no insurance policies.

 

N.                                    Taxes.

 

(i)                                     All Tax Returns (as hereinafter defined) required
to be filed on or before the Closing Date by the Company have been filed on a
timely basis under the Laws of each applicable jurisdiction. All such Tax
Returns were complete and accurate as filed in all respects, and all Taxes
shown as owing on each such Tax Return, and all other Taxes owed by the Company
have been paid when due. The Company has not executed or filed with the IRS or
any other taxing authority any agreement extending the period for filing any
Tax Return relating to or otherwise affecting the Business or the Assets. No
claim for assessment or collection of Taxes relating to or otherwise affecting
the Company, the Business or the Assets is currently pending or, to the
Stockholders’ knowledge, has been asserted against the Company. The Company is
not a party to any pending Legal Proceeding by any Governmental Entity for the
assessment or collection of Taxes relating to or otherwise affecting the
Company, the Business or the Assets nor do the Stockholders have any knowledge
of any basis for any such Legal Proceeding.

 

(ii)                                  No
waivers of statutes of limitation in respect of any Tax Returns relating to or
otherwise affecting the Company, the Business or the Assets have been given or
requested by the Company nor has the Company agreed to any extension of time
with respect to a Tax assessment or deficiency relating to or otherwise
affecting the Company, the Business or the Assets. No claim has been made at
any time by a Governmental Entity in a jurisdiction where the Company does not
currently file Tax Returns that it is or may be subject to taxation by that
jurisdiction relating to or otherwise affecting the Company, the Business or
the Assets, nor do the Stockholders have knowledge that any such assertion of
jurisdiction is threatened. No security interests have been imposed upon or
asserted against any of the Assets as a result of or in

 

 

connection
with any failure, or alleged failure, to pay any Tax. No ruling with respect to
Taxes has been requested by or on behalf of the Company with respect to the
Company, the Business or any Assets.

 

(iii)                               Neither the Company nor any Affiliate thereof is obligated to make any payments that may
constitute “excess parachute payments,” as defined in Section 280G of the Code.
Neither the Company nor any Affiliate thereof has been a United States
real property holding corporation within the meaning of Section 897(c)(2) of
the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.

 

(iv)                              There is no claim or dispute concerning any Tax
liability of the Company either (A)
claimed or raised by any Governmental Entity in writing or (B) as to which the
Stockholders have any knowledge. The Stockholders have made available to the
Purchaser true and correct copies of the United States federal income Tax
Returns filed with respect to the Company for tax year 2004, and no such Tax
Returns have been audited. The Stockholders have made available to the
Purchaser correct and complete copies of all examination reports and statements
of deficiencies accrued against or agreed to by the Company since January 1, 2005.

 

(v)                                 Neither the Company nor any Affiliate thereof has entered into any agreement, whether or not
written, providing for the payment of Taxes or entitlement to refunds and
related matters with any other party. The Company and all such Affiliates have withheld and paid all Taxes required to be
withheld or paid in connection with any amounts paid or owing to any employee,
creditor, independent contractor, stockholder or other third party. None of the
Assets have in the past been held, and none of the Assets were immediately
prior to Closing held, in an arrangement for which Tax Returns as a partnership
have been or may be filed.

 

O.                                    Assets Necessary to Conduct Business. The Assets comprise all of the assets necessary
for the Purchaser to operate the Business, from and after Closing, as conducted
by the Company prior to the Closing
Date. The Business is the only business that the Company has engaged in since
formation.

 

P.                                      Solvency. As of the date of this Agreement (i) the aggregate fair market value of
the Company’s assets is greater than the Company’s Liabilities; (ii) the
Company is able to pay its existing debts as they become due in the ordinary
course, and (iii) the fair salable value of the Company’s assets is greater
than the amount that will be required to pay the Company’s probable liability
on its existing debts as they become due.

 

Q.                                    Affiliate
Transactions. Except as set forth on Schedule 5.1(Q), the Company has not
purchased, licensed or leased or otherwise acquired any property or assets or
obtained any services from, or sold, licensed, leased or otherwise disposed of
any property or assets or provided any services to, or made any payments to,
any Stockholder or any employee (except with respect to remuneration for
services as an officer, director or employee or distributions as a
shareholder), shareholder, officer or director, or any Affiliate, spouse, child
or other relative of any of the foregoing. The Company does not owe any
contractual obligation or commitment to any of the foregoing (other than
compensation for current services not yet due and payable and

 

 

reimbursement of expenses
arising in the ordinary course of business), and none of the foregoing owes any
amount or has any contractual obligation to the company.

 

R.                                     Foreign Operations. Except as disclosed on Schedule 5.1(R), all of
the Assets (which are in tangible form) are located at, and the Business is now
and has at all times in the past been conducted solely from, the Company’s
offices in Richardson, Texas. The Company has complied with all United States
Laws regarding foreign operations and doing business in foreign countries
(specifically including without limitation the United States Foreign Corrupt
Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq, and all
rules, regulations and guidelines of the Department of Treasury, Office of
Foreign Assets Control (OFAC), the Department. of Commerce, Bureau of Industry
& Security (BIS), and the Department of State, Directorate of Defense Trade
Controls (DDTC)).

 

S.                                      Brokers. Except as disclosed on Schedule 5.1(S), neither the Company nor
any Stockholder has entered into any Contract which will cause the Purchaser to
become obligated for any broker’s, finder’s or other similar fee or commission
in connection with this Agreement or the consummation of any of the
transactions contemplated hereby.

 

ARTICLE VI

Representations and Warranties of the Purchaser.

 

Section 6.1                                      Representations and Warranties. The Purchaser represents and warrants to the
Stockholders that:

 

A.                                   Existence
and Qualification of The Purchaser; Due Execution, Etc. The Purchaser is a
corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware and has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the Closing
Documents to be executed by it and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and the
Closing Documents to be executed by the Purchaser and the consummation by the
Purchaser of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action and, assuming the due execution of
this Agreement by the Stockholders, this Agreement and the Closing Documents to
be executed by the Purchaser constitute valid and binding obligations of the
Purchaser enforceable against it in accordance with their respective terms,
subject only to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar Laws relating to creditors’ rights generally and to general
principles of equity (regardless of whether such enforcement is considered in a
proceeding at law or in equity).

 

B.                                     No Violation. Neither the execution or delivery by the Purchaser of this Agreement or
the Closing Documents to be executed by the Purchaser nor the consummation of
the transactions contemplated hereby or thereby: (i) violates or will violate
any Order applicable to the Purchaser; or (ii) results or will result in a
breach of or default under the Certificate of Incorporation or bylaws of the
Purchaser. No consent, authorization, or approval from, or registration or
filing with, any Governmental Entity or other third party (not obtained or made
as of the date hereof) is required to be obtained or made by or with respect to
the Purchaser in

 

 

connection
with the execution and delivery of this Agreement or the Closing Documents to
which it is a party, except where the failure to obtain or make any of the
foregoing would not have a material adverse effect on the
Purchaser’s ability to consummate its obligations pursuant to this Agreement or
such Closing Documents.

 

ARTICLE VII

Post-Closing Covenants of the Stockholders.

 

Each of the Stockholders hereby covenants and
agrees with the Purchaser as follows:

 

Section 7.1                                      Books and Records; Personnel. The Stockholders will not dispose of or destroy
those business records of the Business or primarily relating to the Business
which are not delivered to the Purchaser at Closing for seven years (or, if
longer, the period required by applicable Laws), and will provide the Purchaser
with access to review and copy, at Purchaser’s expense, any such records during
such period, provided, however, that the Stockholders may dispose of such
records if allowed by applicable Laws if they give the Purchaser 60 days’
notice of such intended disposal and an opportunity to procure such records
from the Stockholders prior to such intended disposal.

 

Section 7.2.                                   Taxes Post Closing. The parties will reasonably cooperate with each
other in the conduct of any Tax audit, claim for refund of Taxes or similar
proceedings involving or otherwise relating to any of the Assets or the
Business (or the income therefrom or assets thereof).

 

Section 7.3                                      Intellectual
Property. After the Closing, the Stockholders shall not use, or have any
rights in or to, any of the Business Intellectual Property.

 

Section 7.4                                      NonCompetition, NonSolicitation and NonDisclosure. Each of the Stockholders is entering into a
NonCompetition, NonSolicitation and NonDisclosure Agreement with the Purchaser
as of the Closing. Each of the Stockholders acknowledges and agrees that the
Purchaser would not enter into this Agreement or consummate the transactions
contemplated hereby but for the execution and delivery of each such
NonCompetition, NonSolicitation and NonDisclosure Agreements.

 

Section 7.5                                      Employees. The Stockholders shall reasonably cooperate with the Purchaser in its
efforts to effect the orderly transition of the Business employees, including
those of the the PRC Affiliate, to employment by the Purchaser or its
Affiliates (including the Company on a post-Closing basis), in the event that
the Purchaser elects to continue any such employment.

 

ARTICLE VIII

Certain Tax and Other Matters.

 

Section 8.1                                      Closing and Post-Closing Obligation for Certain
Taxes. All sales, use, transfer,
stamp, conveyance, value added or other similar taxes, duties, excises or
governmental

 

 

charges
imposed by any taxing jurisdiction, domestic or foreign, and all recording or
filing fees, notarial fees and other similar costs of Closing applicable to the
Transfer of the Shares (excluding, in any event, income taxes of the Purchaser)
will be borne by the Stockholders.

 

Section 8.2                                      Company Tax Returns. The Stockholders will prepare and file or cause
to be prepared and filed all Tax Returns for the Company that are required to
be filed with respect to the Company through the Closing Date. The Stockholders
will pay all Taxes (or, if applicable, reimburse the Purchaser for the payment
of such Taxes) attributable to taxable periods ending on or before the Closing
Date or with respect to the allocable portion of any taxable period that
includes but does not end on the Closing Date.

 

Section 8.3                                      Certain Definitions. For purposes of this Agreement, (i) “Tax” or “Taxes”
includes all national, federal, state, local, foreign and other taxes,
assessments, or governmental charges of any kind whatsoever including, without
limitation, income, franchise, capital stock, excise, property, sales, use,
service, service use, leasing, leasing use, gross receipts, value added, single
business, alternative or add-on minimum, occupation, real and personal
property, stamp, workers’ compensation, social welfare, severance, windfall
profits, customs, duties, disability, registration, estimated, environmental
(including Taxes under Code Section 59A), transfer, payroll, withholding,
employment, unemployment and social security taxes, or other taxes or charges
of the same or similar nature, together with any interest, penalties or
additions thereon and estimated payments thereof, whether disputed or not; (ii)
“Tax Return” or “Tax Returns” includes all returns, reports, information
returns, forms, declarations, claims for refund, statements and other documents
(including any amendments thereto and including any schedule or attachment
thereto) in connection with Taxes that are required to be filed with a
Governmental Entity or other tax authority, or sent or provided to another
party under applicable Law, (iii) “Income Tax” or “Income Taxes” means all
Taxes imposed on, measured by, or that require reference to, net or taxable
income (including any income, capital gains, franchise, estimated, alternative,
minimum, add-on minimum or other tax imposed on, measured by, or which requires
reference to, net or taxable income), together with interest and penalties
thereon and estimated payments thereof, and (iv) all citations of the Code or
to the Treasury Regulations promulgated thereunder in this Agreement shall
include any amendments or successor provisions thereto.

 

Section 8.4                                      Stockholder Access to Certain Records. The Purchaser shall not dispose of or destroy
those business records of the Business or primarily relating to the Business
which are delivered to the Purchaser at Closing for seven years (or, if longer,
the period required by applicable Laws), and will provide the Stockholders with
access to review and copy, at its expense, any such records during such period,
provided, however, that the Purchaser may dispose of such records if allowed by
applicable Laws if it gives the Stockholders 60 days’ notice of such intended
disposal and an opportunity to procure such records from the Purchaser prior to
such intended disposal.

 

 

ARTICLE IX

Miscellaneous.

 

Section 9.1                                      Entire Agreement. This Agreement (including the attached
schedules) supersedes any other agreement, whether written or oral, that may
have been made or entered into by any party or any of their respective Affiliates
(or by any director, officer or representative thereof) with respect to the
subject matter hereof. This Agreement (including the attached schedules)
constitutes the entire agreement of the parties hereto with respect to the
matters provided for herein and there are no agreements or commitments by or
among such parties or their Affiliates with respect to the subject matter
hereof. No investigation or receipt of information by or on behalf of the
Purchaser will diminish or obviate any of the representations, warranties,
covenants or agreements of the Stockholders under this Agreement.

 

Section 9.2                                      Amendments. No amendment, modification or alteration of the terms or provisions of
this Agreement shall be binding unless the same shall be in writing and duly
executed by the Purchaser and the Stockholders.

 

Section 9.3                                      Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, and their respective successors and
permitted assigns. This Agreement is freely assignable by the Purchaser after
the Closing Date but may not be assigned by the Stockholders without the prior
written consent of the Purchaser.

 

Section 9.4                                      Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original for all purposes and all of which
together shall constitute one and the same instrument.

 

Section 9.5                                      Headings and Section References. The headings of the sections and paragraphs of
this Agreement are included for convenience only and are not intended to be a
part of, or to affect the meaning or interpretation of, this Agreement. All
section references herein, unless otherwise clearly indicated, are to sections
within this Agreement.

 

Section 9.6                                      Waiver.
No failure or delay by either the Purchaser or the Stockholders in exercising
any right, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies otherwise provided by law.

 

Section 9.7                                      Expenses. Except as otherwise specifically provided for in this Agreement, the
Stockholders and the Purchaser shall each pay all costs and expenses incurred
by it or on its behalf in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, fees and expenses of its
own financial consultants, accountants and counsel. Without limiting the
foregoing, the Stockholders and not the Company shall be responsible for and
shall pay any payments or obligations relating to the matters described on
Schedule 5.1(S).

 

 

Section 9.8                                      Notices. Any notice, request, instruction or other document to be given under
this Agreement by any party hereto to any other party shall be in writing and
delivered personally, dispatched by facsimile transmission, or sent by a
nationally recognized overnight courier service or by registered or certified
mail, postage prepaid, as follows: if to any Stockholder, to such Stockholder
at the address for such Stockholder set forth on Schedule A; with a copy to
Mark G. Johnson, Esq., Winstead Sechrest & Minick P.C., 1201 Elm Street,
Suite 5400, Dallas, Texas 75270-2199, and if to the Purchaser, to Spirent
International, Inc., 1300 Veterans Memorial Highway, Hauppauge, New York 11788
USA, Attn: President; with copies to each of (a) Spirent plc, Spirent House,
Crawley Business Quarter, Fleming Way, Crawley, West Sussex, RH10 9QL, United
Kingdom, Attn: Company Secretary; and (b) Goulston
& Storrs, P.C., 400 Atlantic Avenue, Boston, MA 02110-3333 USA, Attn.:
Daniel R. Avery, Esq.; or at such other address for a party or as shall be
specified by like notice. Any notice that is delivered personally in the manner
provided herein shall be deemed to have been duly given to the Person to which
it is directed upon actual receipt by such party (or its agent for notices
hereunder). Any notice that is dispatched by facsimile transmission shall be
deemed to have been duly given to the Person to which it is addressed upon
transmission and confirmation of receipt. Any notice that is addressed as
provided herein and mailed by registered or certified mail shall be conclusively
presumed to have been duly given to the Person to which it is addressed at the
close of business, local time of such party, on the fifth calendar day after
the day it is so placed in the mail. Any notice that is addressed as provided
herein and sent by a nationally recognized overnight courier service shall be
conclusively presumed to have been duly given to the Person to which it is
addressed at the close of business, local time of such Person, on the next
business day following its deposit with such courier service for next day
delivery.

 

Section 9.9                                      Governing
Law. This Agreement and the legal relations among the parties hereto shall
be governed and construed in accordance with the substantive Laws of the State
of Texas, without giving effect to the principles of conflict of laws thereof.

 

Section 9.10                                Severability.
If any provisions hereof shall be held by any court of competent jurisdiction
to be illegal, void, or unenforceable, such provisions shall be of no force and
effect, but the illegality or unenforceability shall have no effect upon, and
shall not impair the enforceability of, any other provision of this Agreement.

 

Section 9.11                                “Knowledge”.
Whenever “to its knowledge,” “known” or a similar phrase is used to qualify a
representation of the Stockholders, the “knowledge” so referred to shall be
deemed to be each and both of (a) the actual knowledge of each Stockholder, Bo
Wang, Liu Xiao, and Wubo Zhang, and (b) the knowledge that any such person
would reasonably be expected to acquire in the prudent discharge of his or her
duties with respect to the Business or the Company.

 

Section 9.12                                Rights
of Third Parties. Nothing expressed or implied in this Agreement is
intended or will be construed to confer upon or give any person or entity other
than the parties hereto and their respective successors and permitted assigns
any rights or remedies under or by reason of this Agreement or any transaction
contemplated hereby.

 

 

Section 9.13                                Consent
to Jurisdiction. Each of the Purchaser and the Stockholders hereby
irrevocably consents that any legal action or proceeding against it or him
under, arising out of, or in any manner relating to this Agreement or any other
agreement, document or instrument arising out of or executed in connection with
this Agreement shall be brought solely in any state or federal court within the
Northern Federal District of the State of Texas of competent jurisdiction. Each
party hereby expressly and irrevocably waives any claim or defense in any
action or proceeding based on any alleged lack of personal jurisdiction,
improper venue, forum non conveniens, or any similar basis.

 

Section 9.14                                Indemnification:
Survival of Representations and Warranties.

 

A.                                   Indemnification
by Stockholders. Each Stockholder hereby jointly and severally agrees to
defend, hold harmless and indemnify the Purchaser and its Affiliates and their
respective employees, officers, directors, stockholders, partners and
representatives from and against any losses, assessments, Liabilities, claims,
damages, costs and expenses (including without limitation reasonable attorneys’
fees and disbursements) which arise out of or relate to:

 

(1)                                  any
misrepresentation in, breach of or failure to comply with, any of the
representations, warranties, covenants or agreements of any Stockholder or his
Affiliates contained in this Agreement, including without limitation in the
Disclosure Schedule, or in any other Closing Document or in any certificate or
other instrument or document furnished or to be furnished by any Stockholder pursuant
to this Agreement or any other Closing Document or in connection with the
transactions contemplated hereby or thereby; or

 

(2)                                  any
Liabilities of the PRC Affiliate or relating to any acts or omissions of the
PRC Affiliate (including without limitation any such Liabilities asserted by
employees or former employees of the PRC Affiliate), or arising from any claim
by the PRC Affiliate (or by anyone claiming through or on behalf of, or as a
third party beneficiary of, the PRC Affiliate) against or relating to the
Business, the Assets, the Company or the Shares; or

 

(3)                                  any
Taxes attributable to the Business for all periods prior to Closing, and all
other Taxes of any Stockholder or his Affiliates; or

 

(4)                                  any
claims alleging or asserting any interest or rights in the capital stock of, or
any other equity or ownership interests in, the Company (whether through prior
issuances of capital stock, options or otherwise); or

 

(5)                                  the
Company’s SEP, including without limitation any failure of the Company, with
respect to the SEP, to comply with applicable laws or to make any required
employee contributions or payments, or the termination thereof; or

 

(6)                                  the
failure by the Company or the Stockholders to obtain the consent or waiver from
Cisco, in connection with this Agreement and the transactions contemplated
hereby, pursuant to the Contracts with Cisco as described in Section
5.1(B)(ii)(A)(2);

 

 

and all such losses, assessments, Liabilities, claims, damages, costs
and expenses so arising out of or relating to any of the foregoing clauses (1),
(2), (3), (4), (5) or (6), inclusive, of this Section 9.14(A), or the matters
described therein, are referred to hereinafter as the “Purchaser’s Losses;”
provided, however, that the Stockholders shall not have any obligation so to
indemnify the Purchaser on account of any breach of any representation or
warranty pursuant to Section 9.14(A)(1) unless and until the Purchaser’s Losses
paid, incurred, suffered or accrued by the Purchaser on account of all such
breaches of representations and warranties exceed $150,000 in the aggregate, in
which event the Purchaser will be entitled to such indemnification including
such original $150,000; provided further, however, that the foregoing proviso
shall not apply to the Stockholder’s representations and warranties under
Sections 5.1(A), 5.1(C), 5.1(H), 5.1(J)(ii), 5.1(J)(iii), 5.1(K) or 5.1(N),
respectively.

 

B.                                     Indemnification
by the Purchaser. The Purchaser hereby agrees to defend, hold harmless and
indemnify the Stockholders and their Affiliates and their respective employees,
officers, directors, stockholders, partners and representatives from and
against any losses, assessments, Liabilities, claims, damages, costs and
expenses (including without limitation reasonable attorneys’ fees and
disbursements) which arise out of or relate to any misrepresentation in, breach
of or failure to comply with, any of the representations, warranties, covenants
or agreements of the Purchaser or its Affiliates contained in this Agreement or
in any other Closing Document or in any certificate or other instrument or
document furnished or to be furnished by the Purchaser or its Affiliate
pursuant to this Agreement, or any other Closing Document or in connection with
the transactions contemplated hereby or thereby (collectively, the “Stockholders’
Losses”).

 

C.                                     Survival
of Representations and Warranties. The representations and warranties of
the parties under this Agreement, and their indemnification obligations arising
solely from such representations and warranties under Section 9.14(A)(1), shall
survive the Closing and shall expire and terminate on the date which is 18
months following the Closing Date, unless written notice by an Indemnitee (as
defined below) of a breach or alleged breach thereof has been provided to the
Indemnitor(s) (as defined below) on or prior to such date, in which case such
representations and warranties, and such indemnification obligations, shall not
so expire and terminate; provided however, that notwithstanding the foregoing
or anything else to the contrary herein, the representations and warranties set
forth in Sections 5.1(A), 5.1(C), 5.1(H), 5.1(J)(ii), 5.1(J)(iii), 5.1(K) and
5.1(N), inclusive, of this Agreement and any and all indemnification
obligations relating thereto, shall not so expire or otherwise terminate on
such date, but shall instead expire on the date which is ninety (90) calendar
days following the expiration of the applicable statutes of limitations
relating to any claim giving rise to the Purchaser’s Losses.

 

D.                                    Limitation
on Indemnification Liability in Certain Cases. The maximum aggregate
liability of the Stockholders under Section 9.14(A)(1) or of the Purchaser
under Section 9.14(B) for any one or more breaches of the representations or
warranties under Article V or Article VI, as the case may be, of this Agreement
shall be $6,000,000; provided, however, that such limitation on the liability
of the Stockholders shall not apply to, and there shall be no limit to the
liability of the Stockholders to the Purchaser or its Affiliates either (1)
under Section 9.14(A)(1) on account of any breach of the representations or
warranties set forth in Sections 

 

 

5.1(A), 5.1(C), 5.1(H),
5.1(J)(ii), 5.1(J)(iii), 5.1(K) or 5.1(N), respectively, of this Agreement or
(2) on account of the Stockholders’ other agreements or covenants under this
Agreement or any other Closing Document.

 

E.                                      Procedures.

 

(i)                                     In
the event that any Legal Proceeding shall be threatened or instituted in
respect to which indemnification may be sought by one party hereto from another
party under the provisions of this Section 9.14, the party seeking
indemnification (“Indemnitee”) shall, reasonably promptly after acquiring
actual knowledge of such threatened or instituted Legal Proceeding, cause
written notice in reasonable detail of such threatened or instituted Legal
Proceeding and which is covered by this indemnification, to be forwarded to the
other party from which indemnification is being sought (“Indemnitor”),
provided, however, that the failure to provide such notice as of any particular
date as aforesaid will not affect any rights to indemnification hereunder,
except to the extent, and only to such extent, that such failure to provide
such notice actually and materially prejudices the Indemnitor’s ability to
adequately defend such Legal Proceeding.

 

(ii)                                  In
the event of the initiation of any Legal Proceeding against an Indemnitee by a
third party, the Indemnitor shall have the absolute right after the receipt of
the notice described in Section 9.14(E)(i), at its option and at its own
expense, to be represented by counsel of its choice, and (subject to Section
9.14(E)(iii)) to defend against, negotiate, settle or otherwise deal with any
Legal Proceeding or demand that relates to any Purchaser’s Losses or Stockholders’
Losses, as the case may be, indemnified against hereunder, and, in such event,
the Indemnitee will reasonably cooperate with the Indemnitor and its
representatives in connection with such defense, negotiation, settlement or
dealings (and the Indemnitee’s costs and expenses arising therefrom or relating
thereto shall constitute Purchaser’s Losses, if the Indemnitee is the
Purchaser, or Stockholders’ Losses, if the Indemnitee is a Stockholder);
provided, however, that the Indemnitee may directly participate in any such
Legal Proceeding so defended with counsel of its choice at its own expense,
except that, if the Indemnitor fails to take reasonable steps necessary to
defend diligently such third party claim within 15 business days after receiving
written notice from the Indemnitee that the Indemnitee reasonably believes the
Indemnitor has failed to take such steps or if the Indemnitor has not
undertaken fully to indemnify the Indemnitee in respect of all such Purchaser’s
or Stockholders’ Losses, as the case may be, relating to the matter and as
required hereunder, the Indemnitee may assume its own defense, and, in such
event (a) the Indemnitor will be liable for all Purchaser’s or Stockholders’
Losses, as the case may be, reasonably paid or incurred in connection
therewith, and (b) the Indemnitor shall, in any case, reasonably cooperate, at
its own expense, with the Indemnitee and its representatives in connection with
such defense.

 

(iii)                               Without
the prior written consent of the Indemnitee, which shall not be unreasonably
withheld, the Indemnitor will not enter into any settlement of any third party
claim which would lead to Liability or create any financial or other obligation
on the part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder or which would otherwise adversely affect the Assets
or the Business. If a firm offer is made to settle a third

 

 

party claim without leading to
Liability or the creation of a financial or other obligation on the part of the
Indemnitee for which the Indemnitee is not entitled to indemnification
hereunder and the Indemnitor desires to accept and agree to such offer, the
Indemnitor will give written notice to the Indemnitee to that effect. If the
Indemnitee notifies the Indemnitor that it does not consent to such firm offer
within 10 calendar days after its receipt of such notice from the Indemnitor,
the Indemnitee may continue to contest or defend such third party claim and, in
such event, the maximum Liability of the Indemnitor as to such third party
claim will not exceed the amount of such settlement offer, plus the Purchaser’s
Losses or Stockholders’ Losses, as the case may be, reasonably paid or incurred
by the Indemnitee through the end of such 10-calendar day period.

 

(iv)                              After
any final judgment or award shall have been rendered by a Governmental Entity
of competent jurisdiction and the time in which to appeal therefrom has
expired, or a settlement shall have been consummated, or the Indemnitee and the
Indemnitor shall have arrived at a mutually binding agreement with respect to
each separate matter alleged to be indemnified by the Indemnitor hereunder, the
Indemnitee shall forward to the Indemnitor notice of any sums due and owing by
it with respect to such matter, and the Indemnitor shall pay all of the sums so
owing to the Indemnitee by wire transfer or certified or bank cashier’s check
within 30 days after the date of such notice. Any and all Purchaser’s Losses or
Stockholders’ Losses, other than those described in the preceding sentence
(including Purchaser’s Losses or Stockholders’ Losses incurred in the absence
of any threatened or pending Legal Proceeding, or Purchaser’s Losses or
Stockholders’ Losses incurred after any such Legal Proceeding has been
threatened or instituted but prior to the rendering of any final judgment or
award in connection therewith), shall be paid by the Indemnitor on a current
basis, and, without limiting the generality of the foregoing, the Indemnitee
shall have the right to invoice the Indemnitor for such Purchaser’s Losses or
Stockholders’ Losses, as the case may be, as frequently as it deems
appropriate, and the amount of any such Purchaser’s Losses or Stockholders’
Losses, as the case may be, which are described or listed in any such invoice
shall be paid to the Indemnitee, by wire transfer or certified or bank cashier’s
check, within 30 days after the date of such invoice.

 

F.                                      Exclusive
Remedies. The remedies provided in this Section 9.14 shall be exclusive as
between the Stockholders and the Purchaser with respect to any breaches by
either the Purchaser or any Stockholder of any of the representations,
warranties, covenants or agreements of either party contained in this Agreement
or in any of the Closing Documents (excluding claims for specific performance
or fraud).

 

Section 9.15                                Stockholder
Agent. Each Stockholder does hereby irrevocably appoint Bo Chen (in such
capacity, the “Stockholder Agent”) as his agent and attorney-in-fact to act on
behalf of each Stockholder for purposes of any and all communications with the
Purchaser relating to matters arising under the Closing Documents, and the
Stockholder Agent hereby accepts such appointment. The Purchaser shall be
entitled to rely without inquiry on any actions taken and any notices and communications
given by the Stockholder Agent on behalf of any Stockholder as being from such
Stockholder directly. The foregoing shall not derogate from the notice
requirements set forth within Section 9.8.

 

 

Section 9.16                                Certain
Definitions and Interpretive Matters.

 

A.                                   Certain
Definitions. The following terms shall have the following meanings:

 

(i)                                     “Affiliate”
has the meaning given to that term in Rule 12b-2 of Regulation 12B under the
Securities Exchange Act of 1934, as amended.

 

(ii)                                  “Assets” means all of the Company’s right, title
and interest in and to any and all of its properties, rights, claims, contracts
and assets, tangible or intangible, choate or inchoate, and wherever located.

 

(iii)                               “Benefit
Arrangement” means all employment policies, practices or other arrangements to
provide employee or executive compensation or benefits with respect to
employees and/or their spouses or beneficiaries, including without limitation
any such policies or practices relating to life and health insurance, hospitalization,
savings, bonus, deferred compensation, incentive compensation, holiday,
vacation, severance pay, sick pay, sick leave, disability, tuition refunds,
service awards, company cars, scholarships, relocation, patent awards, fringe
benefits, contracts, collective bargaining agreements, individual employment,
consultancy or severance contracts; but excluding in all events Benefit Plans.

 

(iv)                              “Benefit
Plan” shall mean each and every “employee benefit plan” as defined in Section
3(3) of ERISA and which is required to be maintained or contributed to by the
Company or in which the Company participates or under which the Company has any
obligation to make any contributions or other payments or provides any benefits
with respect to Company Employees and/or their spouses or beneficiaries,
including (1) any such plan that is an “employee welfare benefit plan” as
defined in Section 3(l) of ERISA, including retiree medical and life insurance
plans and (2) any such plan that is an “employee pension benefit plan” as defined
in Section 3(2) of ERISA.

 

(v)                                 “Business Leases” means the respective leases of
the Leased Properties, with the Company as tenant thereunder.

 

(vi)                              “Contracts” means all contracts, agreements,
other rights of a contractual nature and franchises.

 

(vii)                           “Environment” shall mean soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air
and any other environmental medium.

 

(viii)                        “Environmental Laws” shall mean any and all
applicable federal, state, county, provincial or local laws, ordinances or
regulations relating to the

 

 

generation, discharge, Release, containment,
storage, transportation, disposal, assessment or cleanup of Hazardous Materials
or other contaminants or similar materials, including without limitation the
following: (1) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. §9601 et seq.; (2) the Toxic Substances
Control Act, 15 U.S.C. §2101 et seq.; (3) the Federal Insecticide, Fungicide
and Rodenticide Act, 7 U.S.C. §136; (4) the Hazardous Materials Transportation
Act, 49 U.S.C. §§1801 to 1812; (5) the Federal Water Pollution Control Act, 32
U.S.C. §1251 et seq.; (6) the Federal Solid Waste Disposal Act; (7) the Federal
Clean Air Act, 42 U.S.C. §1857 et seq.; and (8) any other federal, state,
county, or local statutes or implementing regulations (or any other statutes or
implementing regulations of any other Governmental Entity) relating to,
regulating, or having jurisdiction over, any environmental contamination,
Hazardous Material (as hereinafter defined), Environmental Condition (as
hereinafter defined), Release (as hereinafter defined), or Threat of Release
(as hereinafter defined).

 

(ix)                                “Environmental Condition” shall mean any
condition with respect to the Environment, whether or not yet discovered, which
could reasonably be expected to result, or has resulted, in any material
damage, loss, cost, expense, claim, demand, Order or Liability under any
Environmental Law.

 

(x)                                   “Hazardous Material” shall mean any pollutant,
toxic substance, hazardous waste, hazardous material, hazardous substance or
oil or other petroleum product, as any of the foregoing may be defined in any
Environmental Law.

 

(xi)                                “Release” shall mean any releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping into the Environment.

 

(xii)                             “Threat of Release” shall mean a substantial
likelihood of a Release which requires action to prevent or mitigate damage to
the Environment which may result from such Release.

 

(xiii)                          “Governmental Entity” shall mean any domestic or
foreign court, government, governmental agency, authority, entity or
instrumentality.

 

(xiv)                         “Fixed Assets” means all machinery, equipment,
leasehold improvements, business machines, tooling, vehicles, parts, furniture,
furnishings, plant and office equipment and other fixed assets or personal
property of the Company, including without limitation the assets listed on the
fixed asset listing included as Schedule 5.1(G) hereto.

 

 

(xv)                            “Laws”
shall mean any national, federal, state, county, provincial or local statute,
law, ordinance, rule, regulation, order, judgment or ruling.

 

(xvi)                         “Material
Adverse Effect” means any fact, circumstance, event, change or effect that is
materially adverse to (a) the Company, the Assets or the financial condition or
prospects of the Business or (b) the ability to operate the Business as
operated by the Company as of the Closing Date.

 

(xvii)                      “Multiemployer
Plan” has the meaning set forth in ERISA Section 3(37).

 

(xviii)                   “Receivables”
shall mean any and all amounts due to the Company as the result of the sale of
goods or the rendering of services by the
Company, less provision for bad or doubtful debts, if any.

 

(xix)                           “Schedule” or “Disclosure Schedule” shall
mean the Schedules, inclusive, attached hereto, which Schedules are
incorporated herein and made a part hereof, fully as if the same were herein
set forth in their entirety.

 

(xx)                              “Liabilities” means any and all liabilities,
claims, obligations, expenses or damages, whether known or unknown, contingent
or absolute, named or unnamed, disputed or undisputed, legal or equitable,
determined or indeterminable, or liquidated or unliquidated.

 

(xxi)                           “Working Capital Assets” means the cash and
Receivables of the Company.

 

(xxii)                        “Working Capital Liabilities” means the current
liabilities of the Company (which shall include accounts payable, commissions
payable, transaction expenses, amounts owing to parties in connection with any
releases or terminations of contracts or other rights, amounts owing but not
yet paid to employees in respect of services rendered to Closing, amounts owing
for payroll or other taxes, and other similar short-term obligations of the
Company).

 

(xxiii)                     “Working Capital Assets” means the cash and
Receivables of the Company.

 

Unless the context otherwise requires, (i) each accounting term not
otherwise defined in this Agreement has the meaning assigned to it in
accordance with United States generally accepted accounting principles,
consistently applied, (ii) “or” is disjunctive but not necessarily exclusive,
and (iii) all references to “$” or dollar amounts mean lawful currency of the
United States of America.

 

 

B.                                     Interpretive
Matters. No provision of this Agreement will be interpreted in favor of, or
against, any of the parties hereto by reason of the extent to which any such
party or its counsel participated in the drafting thereof or by reason of the
extent to which any such provision is inconsistent with any prior draft hereof
or thereof.

 

[Signatures Begin on Next Page]

 

 

IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  SPIRENT COMMUNICATIONS INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Roberts

  
	
   

  	
   

  	
  Name:

  	
  Tim Roberts

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Bo Chen

  
	
   

  	
  BO CHEN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Binjin Shen

  
	
   

  	
  BINJIN SHEN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Joe Mader

  
	
   

  	
  JOE MADERExhibit
4.7

 

Execution
Copy

 

STOCK
PURCHASE AGREEMENT

 

 

regarding

 

 

SwissQual
Holding AG

 

 

Table of
Content

 

	
  1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Sale and
  Purchase of Shares, Consideration

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Conduct from
  Signing to Closing and Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and
  Warranties of Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Indemnities

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Further
  Undertakings after Closing Date

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Management and
  Structure of the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Obligations of
  the Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Governing Law
  and Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  List of
  Schedules

  

 

 

STOCK
PURCHASE AGREEMENT

 

 

between

 

 

	
  1.

  	
   

  	
  Andreas Danuser, Sandstrasse 57A, CH-5412 Gebenstorf

  
	
  2.

  	
   

  	
  Thomas
  von Arx, Vrenihus Hasli 4, CH-6262
  Langnau

  
	
  3.

  	
   

  	
  Tomas
  Ahnebrink, Rte des Pins 22, CH-2035 Corcelles

  
	
  4.

  	
   

  	
  Hanspeter
  Bobst, Allmendstrasse 32,
  CH-4702 Oensingen

  
	
  5.

  	
   

  	
  Pero
  Juric, Heimlisbergstrasse 9,
  CH-4513 Langendorf

  
	
  6.

  	
   

  	
  Carl-Fredrik
  Lehland, Odderhei Platå 5, N-4639
  Kristiansand S

  
	
  7.

  	
   

  	
  Gerhard
  Heinzel, Effingerstrasse 103,
  CH-3008 Bern

  
	
  8.

  	
   

  	
  Ana
  Esteves, 9, Rue de Château, CH-2022
  Bevaix

  
	
  9.

  	
   

  	
  Kurt
  Rohner, Industriestrasse 3,
  CH-6345 Neuheim

  
	
  10.

  	
   

  	
  Dieter
  Blattner, Forststrasse 5, CH-4500
  Solothurn

  
	
  11.

  	
   

  	
  Arpad
  Hellenbart, Bühlstrasse 42,
  CH-3012 Bern

  
	
  12.

  	
   

  	
  Roman
  Kaderli, Hinterholzring 25,
  CH-4443 Wittinsburg

  
	
  13.

  	
   

  	
  Eugen
  Rodel, Ritterquai 23, CH-4500
  Solothurn

  
	
  14.

  	
   

  	
  Hansueli
  Schaffer, Bahnhofstrasse, CH-6207
  Nottwil

  
	
  15.

  	
   

  	
  Tino
  Scholz, Zilackerstrasse 5,
  CH-4513 Langendorf

  
	
  16.

  	
   

  	
  Christer
  Stalder, 9, Rue de Château, CH-2022
  Bevaix

  
	
  17.

  	
   

  	
  Bendicht
  Thomet, Riedbachstrasse 350,
  CH-3020 Bern

  
	
  18.

  	
   

  	
  Comarco Wireless Technologies,
  Inc., 2 Cromwell, Irvine, CA 92618-1816/USA

  

 

1 and 6. to 17. represented with collective signature by two of 2. to 5.
based on the powers of attorney attached hereto as Schedule 0.1 

 

“Sellers”

 

and

 

Spirent
Holdings Limited, Spirent House, Crawley Business
Quarter, Fleming Way, Crawley, West Sussex, RH10 9QL, Great Britain

 

“Purchaser”

 

and

 

Spirent
plc, Spirent House, Crawley Business Quarter, Fleming
Way, Crawley, West Sussex, RH10 9QL, Great Britain

 

“Spirent
plc”

 

3

 

WHEREAS, SwissQual Holding AG,
Metallstrasse 9b, CH-6300 Zug (hereinafter referred to as the “Company”) has issued a share capital of CHF
1’183’263 divided into 1’183’263 shares with a nominal value of CHF 1 each;

 

WHEREAS, Sellers
together own the Shares of the Company with each Seller owning such number of
Shares as set forth in Schedule A;

 

WHEREAS, Purchaser intends to
purchase all the Shares of the Company.

 

NOW,
THEREFORE, the Parties have come to the following agreement:

 

4

 

ARTICLE 1

Definitions

 

As used in this
Agreement, the following terms have the following meaning unless the context requires
otherwise:

 

“2006
Budget” shall have the meaning set forth in art. 8.1 of this Agreement.

 

“Accounting
Expert” shall mean the firm of accountants appointed pursuant
to art. 2.2.2 of this Agreement.

 

“Accounting
and Consolidation Principles” shall mean the accounting and
consolidation principles the application and limits of which are further
described in art. 4.5 second subparagraph as attached hereto in Schedule 1.1.

 

“Agreement”
shall mean this agreement as amended from time to time pursuant
to art. 11.5 of this Agreement together with its Schedules.

 

“Amount
Approved” shall have the meaning set forth in art. 2.2.2b of
this Agreement.

 

“Amount
Claimed” shall have the meaning set forth in art. 2.2.2b of
this Agreement.

 

“Available Escrow Amount” shall have the
meaning set forth in art. 2.2.2b of this Agreements.

 

“Business”
shall mean the business the Companies are carrying out prior
to the Closing Date except for anything out of the ordinary course of business.

 

“Business Day” shall mean a day (other than
a Saturday or a Sunday) on which banks are open for general business in Zurich,
Switzerland.

 

“CHF” shall
mean Swiss Francs, being the lawful currency of Switzerland.

 

5

 

“Claim Notice” shall have
the meaning defined in the Escrow Agreement.

 

“Closing”
shall mean the consummation of the transactions in accordance
with art. 3 of this Agreement.

 

“Closing
Date” shall mean the date defined in art. 3.1 of this
Agreement.

 

“CO”
shall mean the Swiss Code of Obligations.

 

“Companies”
shall mean the Company and the Subsidiaries.

 

“Company”
shall mean SwissQual Holding AG, Metallstrasse 9b, CH-6300
Zug.

 

“Company
Discount Policy” shall have the meaning defined in art. 8.3
of this Agreement.

 

“Computation”
shall have the
meaning defined in art. 2.2.2 of this Agreement.

 

“Consolidated
2004 Financial Statements” shall have the meaning set forth
in art. 4.5 of this Agreement.

 

“Consolidated
2005 Financial Statements” shall have the meaning set forth
in art. 4.5 of this Agreement.

 

“Corrective
Actions” shall have
the meaning as defined in art. 8.4 of this Agreement.

 

“Custodian”
shall have the
meaning defined in the Escrow Agreement.

 

“Dividend”
shall mean the dividend declared by the Company’s shareholders meeting on January 22, 2006 in the amount of
CHF 3’000’000 and agreed to
be paid on January 23, 2006.

 

6

 

“Disputed
Matter” shall have the meaning defined in art. 2.2.2 a of
this Agreement.

 

“Environmental
Laws” shall have the meaning set forth in art. 4.18 of
the Agreement.

 

“Escrow
Account Closing” shall have the meaning set forth in the
Escrow Agreement.

 

“Escrow
Account Retention” shall have the meaning set forth in the
Escrow Agreement.

 

“Escrow
Agent” shall mean Credit Suisse Solution Partners AG.

 

“Escrow
Agreement” shall mean the escrow agreement signed at the date
of this Agreement and attached as Schedule 1.2.

 

“Financial
Statements” shall have the meaning set forth in art. 4.5 of this Agreement.

 

“Fixed
Purchase Price” shall be the amount defined in art. 2.2.1 of
this Agreement.

 

“Founders”
shall mean Thomas von Arx, Andreas Danuser, Tomas Ahnebrink,
Hanspeter Bobst and Pero Juric.

 

“Intellectual
Property Rights” shall
mean know-how, patents, trademarks, trade names, copyrights (including, but not
limited to the rights on software) and any other intellectual property rights.

 

“IFRS” means the International
Financial Reporting Standards as applicable at the relevant date.

 

“Notice
of Disagreement” shall have the meaning defined in art. 2.2.2
of this Agreement.

 

“Option
Holders” shall mean any individual or legal entity which has
or claims to have any option on Shares, other shares issued or to be issued in
any of the Companies.

 

7

 

“Party”
or “Parties” shall mean one or all parties to this Agreement.

 

“PPAWP”
shall have the meaning defined in art. 8.4 of this Agreement.

 

“Purchase
Price” shall mean the purchase price defined in art. 2.2 of
this Agreement.

 

“Quarterly Financial Results” shall have the meaning defined in art.
8.4 of this Agreement.

 

“Quarterly
Hurdles” shall have the meaning defined in art. 8.1 of this
Agreement.

 

“Resolution
Period” shall have the meaning defined in art. 2.2.2 of this
Agreement.

 

“Sellers’
Agent” shall mean and
the Sellers herewith appoint Thomas von Arx unless the Sellers have in writing
notified the Purchaser of his replacement by one of the other Founders
indicating the name of the new seller’s agent.

 

“Sellers’
Best Knowledge” shall
mean the actual knowledge of the Founders (or any one of the Founders) and Kurt
Rohner.

 

“Shares” shall
mean all and any of the 1’183’263 shares of the Company with a nominal value of
CHF 1 each.

 

“Signing”
shall mean the Date
on which this Agreement has been fully signed.

 

“Spirent
Group” shall mean the
Purchaser and any affiliate of the Purchaser, including but not limited to
Spirent plc.

 

“Subsidiaries”
shall mean the companies set forth in Schedule 1.3.

 

“Taxes” shall
mean all tax liabilities in any jurisdiction whether actual or deferred in
respect of income taxes, sales taxes, VAT, any turnover or cost related taxes,
withholding taxes, stamp duties

 

8

 

and any other
transfer duties, payroll taxes, social security contributions (Sozialabgaben) and taxes as well as property taxes and all
other levies, customs, taxes and public duties of any kind including any
interest and penalties in relation to such taxes.

 

In
this Agreement, unless the context otherwise requires:

 

(i)                           references to persons shall include
individuals, bodies corporate (wherever incorporated), unincorporated
associations and partnerships;

 

(ii)                        the headings are inserted
for convenience only and shall not affect the construction of this Agreement;

 

(iii)                     references to one gender  include all
genders;

 

(iv)                    words importing
the singular shall include the plural and vice versa.

 

9

 

ARTICLE 2

Sale and Purchase of Shares,

Consideration

 

2.1                    Sale
and Purchase of Shares. Subject to the terms and conditions set out herein,
Sellers hereby agree to sell to Purchaser and Purchaser agrees to buy from
Sellers the Shares, representing all of the outstanding shares of the Company.

 

2.2                    Purchase
Price. The purchase price consists of the Fixed Purchase Price and any
earnout payable to the Escrow Agent on behalf of the Sellers in accordance with
art. 2.2.2 of this Agreement (the “Purchase Price”). The total Purchase Price
is split among the Sellers according to the percentages of Shares owned as set
forth in Schedule A and will be administered by the Escrow Agent.

 

2.2.1          Fixed
Purchase Price

 

The Fixed Purchase Price for all the Shares purchased in accordance
with art. 2.1 of this Agreement amounts to CHF 62’487’863  (in words: Swiss Francs sixty-two million four hundred
eighty-seven thousand eight hundred sixty-three).

 

2.2.2          Earnout

 

a.                            Earnout
amounts

 

In addition to the Fixed Purchase Price set forth above, the Purchaser
shall pay the following earnout amounts:

 

(i)                                     Up
to CHF 5’000’000 (Swiss Francs five
million) shall be paid in accordance with Schedule 2.2.2 (i)
regarding project CAMPING.

 

(ii)                                  Up
to CHF 5’000’000 (Swiss Francs five
million) shall be paid in accordance with

 

10

 

Schedule 2.2.2 (ii) regarding project DARAS.

 

(iii)                               A
payment of CHF 7’500’000 (Swiss Francs seven
million five hundred thousand shall be made if total revenues of the
Seven.Five and Qualipoc product lines as further defined in Schedule 2.2.2
(iii) realized in the year 2006 amount to at least CHF 32’400’000. If such
revenues are below CHF 32’400’000 but not
less than CHF 27’540’000, the earnout to be paid under this specific
subparagraph shall be computed as follows:

 

	
  Earnout = CHF
  7’500’000 x (actual revenues – CHF 27’540’000)

  
	
  CHF 4’860’000

  

 

If the total revenues of the Seven.Five and Qualipoc product lines
realized in the year 2006 amount to less than CHF 27’540’000 no earnout shall
be paid under this specific subparagraph iii.

 

(iv)                              A
payment of up to CHF 6’000’000 (Swiss Francs six million) shall paid in
accordance with Schedule 2.2.2 (iv) regarding project ELEKTRA.

 

(v)                                 A payment of CHF 4’500’000 (Swiss
Francs four million five hundred
thousand) shall be made if total
revenues of the Company realized in the year 2006 amount to at least
CHF 45’000’000. If revenues are below CHF 45’000’000 but not less than CHF
38’900’000, the earnout to be paid under this specific subparagraph shall be computed
as follows.

 

	
  Earnout = CHF 4’500’000 x (actual revenues – CHF 38’900’000)

  
	
  CHF 6’100’000

  

 

If total revenues of the Company realized in
the year 2006 do not reach CHF 38’900’000 no earnout shall be paid under this
specific subparagraph v.

 

The earnout amounts described in subparagraph (iii) and (v) and the
revenue related part of

 

11

 

subparagraph (iv) above will be calculated on the basis of the audited
consolidated profit and loss statement of the Company for the year 2006. The
calculation of the revenues relevant for these earnout amounts shall be
prepared by the Company pursuant to IFRS and, in particular, the revenue
recognition rules applicable under IFRS as consistently applied in accordance
with the past practice of the Company and shall be certified by the Company’s auditors for the financial year 2006, the cost
of such work to be borne by the Company. On or before March 15, 2007, the
Purchaser shall furnish the computation of the relevant revenues (the “Computation”)
together with the consolidated profit and loss statement and the auditors’
report to the Sellers. In order to analyze such computation, the Founders and a
firm of accountants appointed by them shall have access to the Companies’
books, records and personnel to the extent required to analyze the basis for
the computation of the earnout.

 

The Computation shall become final and binding upon the Parties unless
the Sellers’ Agent gives written notice (“Notice of Disagreement”) to the
Purchaser within 30 calendar days following receipt of the Computation. The
Notice of Disagreement shall relate solely to the Computation and shall specify
in reasonable detail the nature of any disagreement so asserted.

 

During the period of 30 calendar days (the “Resolution Period”)
following the receipt by the Purchaser of the Notice of Disagreement, a
representative of Spirent Group and Sellers’ Agent will attempt to resolve any
differences which they may have with respect to any matters specified in the
Notice of Disagreement. If at the end of the Resolution Period the Parties have
failed to reach written agreement with respect to any of such matters, then
such matters as specified in the Notice of Disagreement as to which such
written agreement has not been reached (the “Disputed Matters”) shall be
submitted to and reviewed by the Accounting Expert which shall be an accounting
firm with an international reputation having an office in Switzerland and
having no other material relationship with either Party.

 

If within 30 calendar days following the expiration of the Resolution
Period, the Parties have failed to agree in writing on the selection of the
Accounting Expert or any Accounting Expert selected by them has not agreed to
perform the services called for hereunder, the Accounting Expert shall
thereupon be selected by the president of the Commercial Court of Zurich

 

12

 

(Handelsgericht) with it being a
requirement that the president of the Commercial Court shall select an
Accounting Expert which shall be an accounting firm with an international
reputation having no other material relationship with either Party.

 

The Accounting Expert shall review the Computation and its decision
with respect to Disputed Matters shall be final and binding upon the Parties (Schiedsgutachten). For such purpose, the
Purchaser shall cause the Company to fully cooperate with the Accounting Expert
and, in particular, to grant the Accounting Expert access to employees,
documents and books of the Company. With the exception of the Disputed Matters,
the Accounting Expert’s computation shall, however, be based on the Company’s
computation (for all elements of the Company’s Computation not mentioned in the
Notice of Disagreement) or on written settlements reached by the Parties (for
all Disputed Matters on which the Parties before the examination by the Account
Expert have agreed upon). The fees and expenses of the Accounting Expert in
connection with the determination of any Disputed Matter shall be borne one
half by the Sellers and one half by the Purchaser.

 

b.   Payment of earnout amounts

 

The payments defined in subparagraphs (i)
through (v) above are independent of each other, i.e. each one of these
payments, or part thereof, shall be made if the conditions defined for such
payment are met pursuant to art. 2.2.2 and the respective Schedules,
independent of whether the conditions for the other payments are met or not.
The earnout payments shall be made as follows:

 

(i)                          to the Company for payment to the Option
Holders: 5.35% (details of such calculation are attached as Schedule 2.2.2.b)
of the respective earnout payment, plus the social security contributions as
listed in Schedule 6.1.

 

(ii)                       to the Escrow Agent on behalf of the Sellers:
the amount remaining of the respective earn-out payment (i.e. the respective
earnout payment less the amount set out in art.2.2.2b(i) above).

 

13

 

The earnout amounts described in subparagraphs (iii) and (v) and the revenue related
part of subparagraph (iv) above shall be paid by the Purchaser within 5
Business Days after the Computation has become final and binding for the
Parties, and the earnout amounts described in subparagraphs (i), (ii) and the
non-revenue related part of subparagraph (iv) shall be paid by the Purchaser
within 7 Business Days after the earlier of (i) Acceptance, or Final Acceptance
as applicable, as defined in the respective Schedule, or, in the absence of
such Acceptance or Final Acceptance respectively, after having been (ii)
finally agreed upon or (iii) finally decided based on a binding court decision,
as defined in the respective Schedule, all as follows:

 

In case prior to or at the date an earnout payment becomes due,
Purchaser has

 

(a)                                  obtained
a final and binding court decision or decisions against one or more of the
Sellers approving a claim or claims of the Purchaser in certain amounts
(together the “Amount Approved”), or

 

(b)                                 filed
a claim or claims against one or more of the Sellers with the Commercial Court
in certain amounts (together “Amount Claimed”),

 

if and to the extent the funds in the Escrow Account Retention -
general less the amount of any other claim based on a Claim Notice as defined
in the Escrow Agreement (the “Available Escrow Amount”) amounts to less than
the Amount Approved and/or the Amount Claimed, the difference between the
Amount Approved and/or the Amount Claimed and the Available Escrow Amount,
shall (i) in case of an Amount Approved be set-off against the earnout payment
due and retained by the Purchaser, and (ii) in case of an Amount Claimed, the
earnout amount due be paid into the Escrow Account Retention. If and to the
extent the Amount Approved and/or the Amount Claimed is not fully covered by
the set-off and/or Available Escrow Amount, and further earnout payments become
due, the same shall apply until the Amount Approved and/or the Amount Claimed
are fully off-settable or covered by the Available Escrow Amount; any remaining
amount shall immediately be paid to the Escrow Account Closing.

 

14

 

The set-off as per the above rule or the payment to the Escrow Agent as
described in the preceding paragraph shall fully discharge the Purchaser of its
obligations to the Sellers with respect to the respective earnout amount. The
Purchaser shall not be entitled to set-off any claim Purchaser has under this
Agreement (in particular under art. 5 and/or 6) against Sellers’ claims under
this art. 2.2.2 other than described above for Amount Approved and Amount
Claimed.

 

ARTICLE 3

Conduct from Signing to Closing and Closing 

 

3.1                    Closing
Date of Transaction. The transaction described in this Agreement shall be
consummated at the offices of Baker & McKenzie, Zollikerstrasse 225, 8008
Zurich, 3 Business Days (or earlier, if the Parties agree) after the signing of
this Agreement (“Closing Date”).

 

3.2                    Conduct
from Signing to Closing. Sellers undertake to and will cause the Companies
to conduct the Business from Signing until Closing Date in the ordinary course
and consistent with past practice and not to conduct any extraordinary business
transactions without the prior written approval of the Purchaser. In
particular, the Sellers shall and shall cause the Companies to

 

(a)          Not do anything that would interfere with
the consummation of the transaction contemplated by this Agreement as a whole
or agree to undertake any such action;

 

(b)         Not do or undertake to do anything if it
is not on at arm’s length terms and in the ordinary course of the Business;

 

(c)          Continue to carry on and maintain its
Business in the same manner as heretofore carried out and maintained;

 

(d)         Not make or agree to make any declaration
or setting aside or payment of any

 

15

 

dividend or any other distribution of profit or any
direct or indirect redemption, purchase or other acquisition of any quotas or
shares of the Companies, or agree to do so, other than the payment of properly
resolved dividends by the Subsidiaries to the Company and the Dividend and
payment or agreement to pay the determined part of the purchase price for the
repurchase of the options from the Option Holders in the amount of CHF 2’440’375;

 

(e)          Refrain from
issuing, selling or delivering any share capital warrants, warrants, options or
similar rights or other corporate securities of the Companies or agree to do
so;

 

(f)            Not form, enter into, vary, terminate or
withdraw from or agree to form, enter into, vary, terminate or withdraw from
any partnership, consortium, joint venture or other incorporated association;

 

(g)         Not amend or terminate or enter or agree
to amend, terminate or enter into any agreement to amend or terminate any
material agreement (including, but not limited to consulting agreements,
employment agreements and pension plans or commitments);

 

(h)         Not sell, transfer, lease or otherwise
dispose of any assets or agree to such action other than transactions with
customers in the ordinary course of Business;

 

(i)             Not make any investments in or payments
for fixed assets in excess of the amounts in the 2006 Budget or agree to such
action;

 

(j)             Refrain from (i) granting any kind of
management fee or ex gratia payments to any of its employees, officers,
directors or shareholders, and (ii) granting any increase in the compensation
of directors or employees which has not been provided for in the 2006 Budget;

 

(k)          Refrain from granting any loans,
guarantees, performance bonds or anything similar thereto or incur debts other
than trade payables incurred in the ordinary course of Business;

 

(l)             Not to purchase or agree to purchase an interest
in any entity or making any similar type of investment or agree to do so;

 

(m)       Not change or agree to change the articles
of incorporation or any other

 

16

 

organizational documents
of the Companies.

 

3.3                     Closing.
On the Closing Date, Sellers shall deliver to Purchaser or, with respect to
subpara. (d), present to the Purchaser:

 

(a)          1’183’263 shares of the Company with a
nominal value of CHF 1 each, duly endorsed in blank;

 

(b)         a resolution of the Company’s board of
directors consenting to the transfer of the Shares to the Purchaser;

 

(c)          the Company’s share ledger evidencing the
Purchaser’s ownership of the Shares;

 

(d)         original share certificates representing
100% of the shares of all Subsidiaries duly endorsed in the name of the Company
or the Subsidiary holding such shares or, where no share certificates have been
issued, other proof (such as assignments) satisfactory to Purchaser, and share
ledgers of all Subsidiaries evidencing the Company’s or any other Subsidiary’s
ownership in all the shares of the Subsidiaries (this presentation does not
change the ownership of the Company or, as the case may be, of the Subsidiaries
in such shares);

 

(e)          resignation letters of the directors
nominated in Schedule 3.3e of the Company effective as of the Closing
Date;

 

(f)            resignation letters of the directors of
the Subsidiaries nominated in Schedule 3.3f effective as of the next
extraordinary shareholders’ meetings;

 

(g)         duly signed non-solicit undertakings as
amendment to the employment agreements of Pero Juric and Hanspeter Bobst as per
Schedule 3.3g;

 

(h)         duly signed non-solicit undertaking as
amendment to the consulting agreement of Kurt Rohner together with a
representation that there exists no other agreement with any of the Companies
as per Schedule 3.3h;

 

(i)             duly signed consulting agreements
including non-compete and non-solicit obligations of TvA Consulting AG and
Thomas von Arx, ATECO GmbH and Tomas Ahnebrink and termination agreements of
any consulting and/or indemnification agreements in the form attached hereto as
Schedule 3.3i;

 

17

 

(j)             duly signed tax declarations in the form
attached hereto as Schedule 3.3j between the persons and entities listed
in art. 3.3(i) and Kurt Rohner and
the respective Companies with
regard to any Taxes that may become due by the Companies;

 

(k)          duly signed undertakings in the form
attached hereto in Schedule 3.3k of Kurt Rohner and the Founders and any
of their consulting firms as well as any employees of such consulting firms;

 

(l)             minutes of the ordinary shareholders’
meeting for the business year 2005 of the Company in which the Dividend has
been resolved and confirmation by the Company that the Dividend has been paid
out before or at Closing Date;

 

(m)       true copies of the duly signed amendments
of agreements with all Option Holders (substantially in the form attached
hereto as Schedule 3.3m);

 

(n)         resignation letters of the auditors of
each of the Companies effective as of the next extraordinary shareholders’
meeting of the Companies;

 

(o)         delivery of document listed as item 22 in the step by
step plan attached hereto as Schedule 3.3o.

 

against wire transfer by Purchaser to the Escrow Agent of (i) the amount of CHF 50’987’863 (Swiss Francs fifty million nine hundred eighty-seven
thousand eight hundred sixty-three) on behalf of the Escrow Account
Closing (account no. CHF current account no 0685-416335-91, BC 4685, IBAN CH29 0468 5041 6335
9100 0 with the Custodian) and (ii) of CHF 10 mio (Swiss Francs ten
million), CHF 0.9 mio (Swiss Francs nine hundred thousand) and
CHF 0.6 mio (Swiss Francs six hundred thousand) on behalf of the Escrow
Account Retentions (account nos. CHF current account no 0685-416335-91-1, BC 4685, IBAN CH02 0468 5041
6335 9100 1, CHF current account no
0685-416335-91-2, BC 4685, IBAN CH72 0468 5041 6335 9100 2 and CHF current account no 0685-416335-91-3, BC
4685, IBAN CH45 0468 5041 6335 9100 3 with the Custodian) and delivery
of a separate deed of Spirent plc in accordance with art. 11.9 of this
Agreement and attached hereto as Schedule 3.3p. Payment of these amounts
shall fully discharge the Purchaser from its obligation to pay the Fixed
Purchase Price under this Agreement.

 

18

 

The above actions shall
be reflected in closing minutes which shall be executed by the Parties at the
Closing.

 

3.4                    Right to rescind the Agreement until Closing.
The Purchaser has a right not to close the transaction contemplated
herein and to rescind this Agreement

 

(i)                 if
between Signing and Closing the Purchaser discovers any matter, fact or circumstance
of any character that has occurred between January 1, 2006 and the Closing Date
and that was not known to the Purchaser at the Signing Date and that has or
might reasonably be expected to have a material adverse effect on the assets
and liabilities or the financial situation or the Business of the Companies, or

 

(ii)              in case
of a material breach by the Sellers or the Companies of any of the following undertakings,
representations or warranties from January 1, 2006 until Closing Date unless
Purchaser has specifically approved such a breach when signing this Agreement:

 

(a)          Not to do anything that would interfere
with the consummation of the transaction contemplated by this Agreement as a
whole or to have agreed to undertake any such action;

 

(b)         Not to make or agree to make any
declaration or setting aside or payment of any dividend or any other
distribution of profit or any direct or indirect redemption, purchase or other
acquisition of any quotas or shares of the Companies, other than the payment of
properly resolved dividends by the Subsidiaries to the Company and the Dividend
and the determined part of the purchase price for the repurchase of the options
from the Option Holders;

 

(c)          Not to issue,
sell or deliver any share capital warrants, warrants, options or similar rights
or other corporate securities of the Companies or agree to do any of these;

 

(d)         Not to form, enter into, vary, terminate
or withdraw from or to agree to form, enter into, vary, terminate or withdraw
from any partnership, consortium, joint venture or other incorporated
association;

 

(e)          Not to amend or terminate or enter into
or agree to amend, terminate or enter into any material agreement (including,
but not limited to consulting

 

19

 

agreements, employment agreements and pension plans or
commitments) other than in the ordinary course of the Business;

 

(f)            Not to purchase or agree to purchase an
interest in any entity or making any similar type of investment;

 

(g)         Not to change or agree to change the
articles of incorporation or any other organizational documents of the
Companies.

 

Should the Purchaser choose not to close the transaction contemplated
in this Agreement and rescind it, Purchaser will be fully indemnified for
negative damages (Negatives Interesse, without lost
profits) by
the Sellers except if the matter, fact or circumstance causing such material
adverse change has been completely out of Sellers’ control. For the avoidance
of doubt, none of the undertakings listed in subparagraph (ii) above is
considered to be out of Sellers’ control.

 

It is agreed between the Parties that Purchaser’s decision to close or
not to rescind this Agreement despite of the existence of a material adverse
effect in accordance with 3.4(i) or a material breach of the undertakings as
listed in art. 3.4(ii) above does not constitute a waiver of the right to claim
for damages or other contractual relief because of such breach.

 

3.5                    Right
to Rescind the Agreement because of Failure to meet Closing Obligations. If
the Fixed Purchase Price is not paid on the Closing Date to the Escrow Agent as
provided for in art. 3.3 of this Agreement, the rules set forth in art. 103 to
106 CO shall apply without any further notice being necessary pursuant to art.
102 CO. As an alternative to the enforcement of the contract, Sellers may – if
the Fixed Purchase Price has not been paid within 5 Business Days after the
Closing Date – at any time after the expiry of such grace period rescind this
Agreement and seek any damages. Such right may be exercised only by three of
the following persons acting jointly together with effect for all Sellers:
Andreas Danuser, Thomas von Arx, Tomas Ahnebrink, Hanspeter Bobst and Pero
Juric.

 

If not all Shares and the further documents listed in art. 3.3 of this
Agreement are delivered to Purchaser on the Closing Date as provided for in
art. 3.3 of this Agreement, the rules set

 

20

 

forth in art. 103 to 106 CO shall apply without any further notice
being necessary pursuant to art. 102 CO. As an alternative to the enforcement
of the contract, Purchaser may, if the Shares and the other
documents listed in art. 3.3 of this Agreement have not been delivered to
Purchaser within 5 Business Days after the
Closing Date as provided for in art. 3.3
of this Agreement, at any time after the expiry of such
grace period rescind this Agreement and seek damages.

 

Purchaser’s decision to close or not to rescind this Agreement based on
the above despite of any missing documents does not constitute a waiver of such
delivery obligation and shall, to the extent Purchaser suffers any damage or
loss by continuing to close, be fully indemnified by Sellers for any such
damage or loss.

 

ARTICLE 4

Representations and Warranties of Sellers

 

Sellers represent
and warrant for the Companies as of the Closing Date as follows:

 

4.1                    Organization
and Qualification. The Companies are duly incorporated and organized and validly
existing under the laws under which they have been incorporated and have full
power and corporate authority to own and to operate their properties and to
engage in the Business in which they are now engaged. Schedule 4.1a
contains the articles of incorporation of the Companies as in force. The
Companies are not in violation of any of their organizational documents or
articles of incorporation and their corporate actions have all been properly undertaken
in accordance with their organizational documents.

 

The statutory books and registers of the Companies are up to date and
contain records which are complete and accurate of all matters required to be
dealt with in such books. In particular, there are no pending applications for
registration into the shareholders’ register of any of the Companies. The
directors and officers of the Companies are listed in Schedule 4.1b.

 

21

 

4.2                     Capital
Structure. The Companies have the share capital set forth in Schedule
4.2. The shares of each Subsidiary have been validly issued and fully paid
up in compliance with applicable laws. No further capital, non-voting stock,
convertible securities such as options or similar rights in the Companies have
been or will be created or issued or agreed to be issued. Purchaser is aware
that 76’500 options will be repurchased by the Company from the Option Holders
as set forth in art. 3.3 prior to the Closing Date. There will be no
option or convertible securities after such repurchase.

 

4.3                     Shares.
The 1’183’263 shares of the Company represent 100 per cent. of the issued and
outstanding share capital of the Company. All the Shares sold pursuant to art.
2.1 of this Agreement have been validly issued and fully paid in. No dividend
or constructive dividend or other distribution has been agreed or resolved
and/or paid out to the Sellers other than the Dividend.

 

4.4                     Ownership
and Capacity. Sellers have all necessary
authority and power and full right and capacity to enter into this
Agreement, carry out their respective obligations hereunder and to complete the
transaction contemplated herein. This Agreement constitutes legal, valid and
binding obligations of the Sellers, enforceable against each of them in
accordance with its terms.

 

Each Seller is the legal and beneficial owner of the Shares listed in Schedule
A opposite its name and has sole physical possession of such Shares. The
Shares are free and clear of all liens, encumbrances and other rights of third
parties. Upon the delivery of the Shares provided for in art. 3.3 of this
Agreement, Purchaser will receive legal and beneficial ownership of the Shares,
free and clear of all liens, encumbrances and other rights of third parties and
Sellers.

 

Sellers warrant, furthermore, that the Company legally and beneficially
owns the shares of the Subsidiaries as set forth in Schedule 4.4, free
and clear of all liens, encumbrances, options, charges, equities and claims
arising from any privilege, pledge or security

 

22

 

arrangement. Except for the Subsidiaries, none of the Companies holds
shares or any other interest in any third party.

 

The execution and delivery of, and the performance by the Sellers of
their obligations under this Agreement or the consummation of the transactions
contemplated herein will not result in a breach of any provision of the
constitutional documents, such as the articles of association or organizational
by-laws, if any, of the Companies.

 

The Sellers do not require any governmental consent or consent of or
notice to any third party to enter into this Agreement and to consummate the
transactions contemplated herein. There are no proceedings or investigations
whatsoever pending against any of the Sellers which could compromise the
consummation of the transactions contemplated herein.

 

4.5                     Financial
Statements. Schedule 4.5a contains a true and complete copy of the
audited consolidated financial statements of the Company as of December 31,
2004 (the “Consolidated 2004 Financial Statements”) and Schedule 4.5b
contains a true and complete copy of the audited consolidated financial
statements of the Company as of December 31, 2005 (the “Consolidated 2005
Financial Statements”). The Consolidated 2004 Financial Statements and the
Consolidated 2005 Financial Statements together shall be defined as the “Financial
Statements”. The Financial Statements have been prepared in accordance with
IFRS and the Accounting and Consolidation Principles and in accordance with
such principles show a true and fair view of the consolidated financial
position of the Company. Schedule 4.5c contains a true and valid copy of
the audited statutory financial statement of the Company as of December 31,
2005 (the “Statutory Financial Statement”). The Statutory Financial Statement
is fully in line with the applicable law.

 

The
Accounting and Consolidation Principles (i) have been consistently applied and
(ii) are and have in the past been in full compliance with IFRS.

 

In accordance with IFRS and the Accounting and Consolidation
Principles:

 

23

 

•                                The Financial Statements do not
understate any liability. There are no liabilities of the Companies other than
those specifically reserved in the balance sheet.

 

•                                There are no contingent liabilities of
the Companies that have to be disclosed in the Financial Statements other than
those specifically stated in the notes and exhibits to the Financial
Statements. The contingent liabilities are correctly disclosed.

 

•                                The Financial Statements do not overstate
any asset; in particular, taking into account provisions for bad debts, the
Financial Statements do only show accounts receivable which are collectable and
bona fide obligations to pay for goods.

 

•                                The Financial Statements do not set-off
any asset with any liability or any income with any revenue. There has been no
dissolution of reserves that is not apparent from the Financial Statements.

 

•                                The relevant auditors have issued
unqualified audit reports in respect of the Financial Statements and the
Companies have not withheld any information from the auditors or given wrong or
misleading information to the auditors.

 

•                                The books of account and all supporting
books and records of the Companies have been properly kept and are up to date.

 

•                                The Consolidated 2005 Financial
Statements contain an accrual of CHF 150’000 for the contract entered into
between SwissQual AG and
Elektrobit AG dated December 19, 2005 as attached as Schedule 4.5d and such accrual represents the
full amount of any commitments prior to the Closing Date to make payments under
such contract.

 

4.6                     Absence
of Adverse Changes. In the period between December 31, 2005 and the Closing
Date except as disclosed in Schedule 4.6:

 

24

 

•                                no
event or circumstance has occurred of any character that has or might
reasonably be expected to have a material adverse effect on the assets
and liabilities or the financial situation or the Business of the Companies;

 

•                                the
Companies have conducted their Business in the ordinary course and consistent
with past practice and not conducted any extraordinary business transactions
and have in particular (i) not taken any actions that violate art. 3.2 of this
Agreement nor (ii) taken any actions that, had they taken place between Signing
and Closing Date, would have violated art. 3.2 of this Agreement;

 

•                                the
Companies have not suffered any material damage, destruction or loss by fire or
other casualty which is not covered by insurance.

 

4.7                     Permits
and Authorizations. The Companies have all the permits and authorizations
which are necessary to own their assets and to carry on their Business. Such
permits and authorizations are in full force and effect and have been and are
being complied with in all material respects.

 

4.8                    Litigation.
Except as set forth in Schedule 4.8 as of the Closing Date, there
are no actions, suits or proceedings with a litigious value in excess of CHF 10’000
pending or threatened against any of the Companies either in court, arbitration
or before any administrative board, agency or commission and to the best of
Sellers’ Best Knowledge there is no fact or circumstance which is reasonably
likely to give rise to a claim.

 

4.9                     Taxes.
All tax returns required to be filed prior to Closing with respect to Taxes
payable or reimbursable by or in connection with the Business or otherwise due
have been timely and duly filed and accurately reflect the basis of taxation
(under applicable laws) and the liability of the Companies to pay Taxes. All
such tax returns (i) have been prepared in the manner required by applicable
law; and (ii) are true, correct and complete. All Taxes for which the Companies
are responsible have been timely paid or adequately reserved against in the Consolidated
2005 Financial Statements, to the extent required by IFRS and the Accounting
and Consolidation Principles. The Companies are not liable for Taxes of any
other person.

 

25

 

No tax authority has asserted any deficiency or claim
for additional Taxes with respect to the Companies.

 

4.10             Agreements
with Third Parties. The Companies are not in default under or in breach of
any material agreements to which they are a party and no notice of termination
has been given with respect to such agreements only. No agreements material for
the Companies’ Business other than those listed in Schedule 4.10a are
subject to change of control clauses which would allow the pertinent
counterparties to terminate these agreements because of the transaction
contemplated herein. Other than listed in Schedule 4.10b, none of the
Companies is party to an onerous contract as defined under IFRS. All material
contracts of the Companies are listed in Schedule 4.10c.

 

4.11              Arrangements with
Related Persons.
The Companies are not or have not been a party to any contract, arrangement or
understanding with any current or former shareholder, employee or director of
any of the Companies or any person related to any of such persons or in which
any such persons is interested that (i) is outside the ordinary and usual
course of business or (ii) is not on arm’s length basis. Purchaser is aware of
the contracts attached in Schedule 4.11 which SwissQual AG has concluded
with Comarco Wireless Technologies, Inc’s subsidiary WTS Inc.; such agreements
are exempt from this art. 4.11. There are no agreements, directly or
indirectly, between (i) the Sellers or anyone of them and (ii) Comarco Wireless
Technologies, Inc. (and / or its subsidiaries) other than the shareholders
agreement terminated with the Closing of this Agreement, this Agreement and the
Escrow Agreement.

 

4.12           Intellectual
Property/Know-how. The Companies
exclusively own or have adequate license to use and, where necessary for
the continued conduct of Business, to sublicense all the Intellectual Property
Rights which are necessary for the continued conduct of their Business. In
particular, all the Intellectual Property Rights as set forth in Schedule
4.12a are valid and exclusively owned by the Companies without any
encumbrances. All annuities, royalties, registration, renewal fees, license and
maintenance fees for Intellectual Property Rights which are due have been paid
and all other steps which are required for their maintenance and

 

26

 

protection have been taken. All remunerations
or other agreed payments for individual inventors (including employees) have
been paid as far as due or properly reserved for, to the extent required by
IFRS and the Accounting and Consolidation Principles.

 

Furthermore, to Sellers’ Best Knowledge
(which shall include, for the purposes of this article 4.12 only, any knowledge
the Founders and Kurt Rohner should have had had they made reasonable inquiry),
the Intellectual Property Rights of the Companies are not infringed or violated
and do not violate or infringe the rights of any third party. No third parties
do have any rights to such Intellectual Property Rights of the Companies other
than listed in Schedule 4.12b and other than rights of customers which have purchased products and
software in the ordinary course of the business and by
virtue of the purchase of such products and software may use such rights, but
in object code form only.

 

The license agreements set forth in Schedule
4.12c list all third party Intellectual Property Rights licensed to the
Companies. To Sellers’ Best Knowledge, all customers and Licensees and distributors
and resellers are using their products within the scope of the licenses granted
by the Companies to such customer.

 

The license agreements are not subject to
change of control clauses which would allow the pertinent counterparties to
terminate these agreements because of the transaction contemplated herein,
unless listed in Schedule 4.10a.

 

4.13             Real Property. The Companies do not own any real property.
The lease agreements set forth in Schedule 4.13 are in full force and
effect and any rent due up to the Closing Date has been paid or properly
reserved for, to the extent
required by IFRS and the Accounting and Consolidation Principles; the Companies
are not in breach with such lease agreements, have not received notice of a
breach nor notice of termination.

 

4.14             Assets. The assets owned, leased or licensed by the
Companies comprise all the assets necessary for the continued conduct of the
Business as conducted by the Companies prior
to the Closing Date. The fixed assets of the Companies are fully
operational and usable. They are,

 

27

 

subject to normal
wear and tear, fit for the purposes intended if and to the extent they are used
and necessary for the conduct of the Business. The Companies’ assets are not
subject to any security interest or preemptive rights or other encumbrance of
third parties other than security interests originated by operation of law in
favour of landlords and contractors. Schedule 4.14 lists all assets
leased, rented or licensed by the Companies, with an annual payment of more
than CHF 10’000.

 

4.15             Employment Matters. Schedule 4.15a contains a correct
and complete list of all the Companies’ employees and consultants stating their
salaries and notice periods and any severance payments contractually agreed
with them.

 

With the exceptions listed in Schedule
4.15b, on the Closing Date, no employee or consultant of the Companies has
any claims for overtime work exceeding CHF 5’000 or any claim for holidays
exceeding 4 weeks.

 

The execution of this Agreement or the
completion of the transactions contemplated herein does not give any employee
or consultant the right to terminate his employment agreement without notice.
Up to signing, none of the employees or consultants has given, or has been
given, notice of termination of his employment or to Sellers’ Best Knowledge
has indicated an intention to terminate his employment, with the exception of
Mr. J. Rudolf who has given notice of termination.

 

The Companies are in compliance with all
contractual, statutory and Tax obligations relating to their employees and
consultants, including wages, fees and hours, insurance coverage, benefit
plans, data protection, discrimination due to age, religion, sex, race,
national origin or disability, legal occupational safety and health
requirements and collective bargaining.

 

Schedule 4.15c contains a complete list of all benefit or
bonus plans. There exist no other benefit plans and the Companies have not made
any promises regarding any additional benefit plans nor have they agreed to any
bonuses for any period after the Closing Date except as those set forth in Schedule
4.15d. Any salary or fee increases communicated for any period after the 

 

28

 

Closing Date are in line with past practice
and reflected in the 2006 Budget.

 

The Companies have no obligations to
make any severance payment or pay any compensation for loss of office or
employment or mandate (Abfindungsleistungen)
to any employee or consultant or former employee or consultant of the Companies
(for the avoidance of doubt, excluding salary continuation for employees during
notice periods). All Taxes to be paid by the Companies for any employees or
consultants and the former employees or consultants of the Companies have been
paid in accordance with applicable laws and all sums not already due have been
adequately reserved in the accounts of the Companies.

 

The employees of SwissQual AG and SwissQual
License AG have signed employment contracts, substantially in the form of Schedule 4.15e.
The persons listed in Schedule
4.15f have fully valid employment or consulting agreements respectively
with a termination period of 6 months or more from the second year of service
and a valid non-compete undertaking of one year minimum subject to the
restrictions of Swiss law. Employment agreements with other Subsidiaries
substantially reflect local market standards and practice.

 

4.16             Insurance Policies. With the exception of insurance policies
covering single cars, all insurance policies of the Companies are listed in Schedule 4.16.
Sellers warrant that such policies are in full force at the Closing Date and
that the Companies have done nothing either by way of action or inaction which
might lead to the cancellation of such policies. No claims have been notified
under any insurance by one of the Companies in the 3 years prior to the Closing
Date.

 

4.17             Compliance with Legal
Requirements. The Companies
have not violated applicable laws, ordinances, regulations, decrees or orders
of any governmental entity to an extent that would have a materially negative
influence on the Companies’ Business.

 

Sellers, in particular, warrant that the
Companies and their plants, real estate and equipment comply in all material
respects with all applicable labor and occupational health and safety laws,
regulations, decrees and orders and that the competent authorities have not
informed the

 

29

 

Companies that they will issue any orders
with which the Companies do not yet comply as of the Closing Date.

 

4.18             Environmental Matters. No hazardous substance, waste, pollutant or
other substance regulated under any applicable environmental or waste disposal
law, statute, regulation, ordinance or other legal requirement (“Environmental
Law”) is present on, in, under or about any real property owned or previously
owned or leased by the Companies. No current or pending Environmental Law
imposes standards or requirements which may require the Companies to make
capital expenditure in excess of CHF 10’000 to comply with such standards
or requirements. “Pending” as used in the immediately preceding sentence means
an Environmental Law which has been enacted and published, but has not yet
taken effect. The Companies have no liability with respect to cleanup,
remediation, removal or abatement of any facility to which any waste or
by-product of the Companies has been sent, directly or indirectly, for
treatment, storage, disposal or recycling. The Companies are in compliance with
all Environmental Laws.

 

4.19             Product Liability. Third parties have and will have no claims
including, but not limited to recall requirements, against the Companies in
connection with any products delivered or services rendered by the Companies up
to the Closing Date except as set forth in Schedule 4.19. To Sellers’
Best Knowledge there exist at the Closing Date no circumstances giving rise to
any product liability claims.

 

4.20             Pensions / Social Security
Payments. Sellers warrant
that all accrued pension claims of the Companies’ employees or consultants or
former employees or consultants as measured in accordance with Swiss regulations
on pension funds (BVG and ordinance based on such act) or the applicable local
pension fund rules (as far as pension funds outside Switzerland are concerned),
are covered by funds of special foundations, by insurance contracts or provisions
the Companies have specifically established for such purpose. The actuarial
report set forth in Schedule 4.20a correctly states the provision for
pensions in line with IAS 19 as per December 31, 2005 which was fully reserved
for in the Consolidated 2005 Financial Statements.

 

30

 

The list of pension related agreements and
other constituting documents attached hereto as Schedule 4.20b is
correct and complete. The Companies have no other pension related agreements or
other constituting documents. There exists no pension related insurance contract
or similar agreement which may not be terminated upon giving 12 months notice.

 

The actuary has been provided with true and
complete information, the assumptions taken are reasonable and the plan
provisions have been applied properly. The pension funds outside Switzerland
are fully funded and do not require the Company to make a provision based on
IFRS other than provision actually made in the Consolidated 2005 Financial Statement.

 

Sellers, furthermore, warrant that the
Companies have complied with all applicable social security regulations and
have made all the deductions and payments required to be made under such
regulations, by law or by pension fund regulations or which are contractually required
to be made above and beyond applicable regulations pursuant to the agreements
and documents listed in Schedule 4.20b or any other agreement or
document.

 

4.21             Insolvency. No order has been made, petition presented, resolution passed or
meeting convened for the winding up (or other process whereby the Business is
terminated and the assets of the Companies are distributed amongst the
creditors and/or shareholders or other contributors) of the Companies and there
are no cases or proceedings under applicable insolvency, reorganization, or
similar laws and no events have occurred which would justify any such case or
proceedings.

 

No receiver (including administrative
receiver), liquidator, administrator, or similar official has been appointed in
respect of any of the Companies and no step has been taken for or with a view
to the appointment of such a person. The Companies are not insolvent or unable
to pay their debts as they fall due.

 

4.22             Competition. The Companies are not a party to any agreement (whether enforceable
or

 

31

 

unenforceable) or other arrangement that
would violate applicable antitrust laws.

 

4.23             Illegal Payments. The Companies are not engaged in any activities that directly or indirectly
involve any payments illegal under any applicable law, be it to customers or
any other third party.

 

4.24            Guarantees. Other than listed in Schedule 4.24 there is
no outstanding guarantee, indemnity (Schadloshaltungsverpflichtung),
suretyship or letters of comfort in excess of CHF 10’000, given by the Company
or any of its Subsidiaries. Warranties given to customers are exempt from this
provision.

 

4.25              No Other Discounts. The Companies’ discount policy attached
hereto as Schedule 4.25 is complete and is broadly in line with the
discount policy used by the Companies in the past practice.

 

4.26             No Further Warranties. Except as expressly provided in this
Agreement, Sellers make no further representation or warranty with respect to
the Shares or the Companies.

 

ARTICLE 5

Remedies

 

5.1                     Waivers
of Law Provisions. Except as otherwise expressly provided in this Agreement, any other
contractual or extra-contractual action or relief, in particular rescission of
this Agreement (Wandelung) pursuant to art.
205 of the Swiss Code of Obligations (“CO”) and material error (Wesentlicher Irrtum) pursuant to art. 23
to 27 of the CO is hereby expressly excluded. Further, the provisions of art.
200, 201 and 210 CO are hereby waived and replaced by the following articles.

 

5.2                    Term
of Representations and Warranties. Save as provided below, the
representations and warranties set forth in art. 4 of this Agreement shall continue
in effect until 18 months

 

32

 

after the Closing Date. The representations and warranties set forth in
art. 4.1, 4.2, 4.3 and 4.4 shall continue in effect for an unlimited duration
and the representation and warranties set forth in art. 4.12 shall continue in
effect until 3 years after the Closing Date. The representations and warranties
set forth in art. 4.9 (Taxes) and 4.18 (Environment) of this Agreement shall,
however, continue in effect until three months after the statute of limitation
on the claims concerned has expired.

 

5.3                    Notification
and Litigation. Purchaser has to notify Sellers’ Agent within 30 Business
Days after Purchaser has detected a breach of warranties and learned sufficient
detail about such breach, describing in reasonable details such breach to the
extent possible, and any damage suffered by it or the Companies as a
consequence of such breach in so far as it is possible to quantify (a breach
has not been detected if one or several Sellers as managers of the Companies
know of such breach but have not specifically and in writing notified the
Purchaser). If Purchaser has notified Sellers’ Agent of a breach of
representations and warranties, Purchaser has to commence litigation in
accordance with art. 12.2 of this Agreement within 6 months after such
notification has been made, unless (i) the claim raised by Purchaser is either
settled before the expiry of such deadline or the Parties agree on an extension
of such deadline or, (ii) in case of a third party claim, negotiations or
proceedings conducted by the Sellers’ Agent based on art. 5.7 are ongoing. If
Purchaser fails to meet such deadline, the claim concerned shall be forgone and
unenforceable (the burden of proof for the expiry of any deadlines and
specifically for having a breach being detected under this provision rests with
the Sellers).

 

5.4                    Damages. In case of a breach of a
warranty or representation by Sellers, Sellers shall within the limitations set
forth in art. 5.6 of this Agreement either remedy such breach within 60 days
after having been notified of the breach or pay to Purchaser the amount which
is necessary to establish the state of the Companies described in such warranty
or representation. Any rescission of the Agreement for breach of warranty is
excluded except for a breach of the warranties or representations set forth in
art. 4.1, 4.2, 4.3 and 4.4 of this Agreement and in case of fraud (absichtliche Täuschung).

 

33

 

5.5                     Escrow
Account. Purchaser shall transfer on the Closing Date in accordance with
art. 3.3 of this Agreement and based on the Escrow Agreement the amounts of
CHF 10’000’000, CHF 900’000 and CHF 600’000 to the Escrow Agent
as part of the Fixed Purchase Price in order to allow the Purchaser to get full
or, if not fully covered by the Escrow Amount, partial remedy for

 

(i)                           as
far as the amount of CHF 10’000’000 is concerned, any breach of a term of
this Agreement, including but not limited to art. 4, 6 and 7 of this Agreement,

 

(ii)                        as
far as the amount of CHF 900’000 is concerned, any breach of art. 4.9
and/or art. 6 to the extent it relates to Taxes, but only as far as the issue
described in Schedule 5.5a is concerned and not of any other term of
this Agreement, it being understood that such net amount shall be released from
escrow (and Purchaser shall instruct the Escrow Agent accordingly) as soon as
and to the extent Sellers have provided Purchaser with a confirmation of the
respective tax authorities that the issue described in Schedule 5.5a has
been finally resolved (for avoidance of doubt, should the issue as finally
resolved lead to any payments to be made by the Companies, such amounts are
being deducted from such release and the respective amounts are transferred either
to the Companies or to the Purchaser);

 

(iii)                     as
far as the amount of CHF 600’000 is concerned, any breach of art. 4.9
and/or art. 6 to the extent it relates to Taxes, but only as far as the issue
described in Schedule 5.5b is concerned, and not of any other term of
this Agreement it being understood that such net amount shall be released from
escrow (and Purchaser shall instruct the Escrow Agent accordingly) as soon as
and to the extent Sellers have provided Purchaser with a confirmation of the
respective tax authorities that the issue described in Schedule 5.5b has
been finally resolved (for avoidance of doubt, should the issue as finally
resolved lead to any payments to be made by the Companies, such amounts are
being deducted from such release and the respective amounts are transferred either
to the Companies or to the Purchaser);

 

in line with the terms and conditions of the Escrow Agreement. The fact
that an Escrow Account exists does not exclude or limit the personal liability
of the Sellers under this Agreement up to the maximum amount defined in art.
5.6.2 of this Agreement.

 

34

 

For the avoidance of doubt, should one of the specific escrow amounts
mentioned in subparagraphs (ii) and (iii) above not be sufficient to cover
claims arising in connection with the respective issue, the Purchaser may
satisfy his exceeding claim out of the general escrow mentioned in subparagraph
(i) above.

 

5.6                    Limitations

 

5.6.1          De
Minimis. Sellers shall have no obligation to pay any amounts under art. 5
of this Agreement unless Purchasers’ aggregate claims under art. 5 of this
Agreement exceed CHF 100’000 (such amount to be deducted from Purchaser’s total
warranty claim under this art. 5). This limitation shall, however, not apply to the representations and warranties set forth in
art. 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 and 4.9 of this Agreement and in case of
fraud (absichtliche Täuschung) or
deliberate withholding of information.

 

5.6.2          Maximum
Amount. Any payments of the Sellers for breaches of representations and warranties
and for the indemnities set forth in art. 6 of this Agreement shall be limited
to 100% of the Purchase Price in total, i.e. the Fixed Purchase Price plus any
earnout related amount payable by the Purchaser or the Companies in accordance
with this Agreement.

 

5.6.3          Exclusion
of Liability. Sellers shall not be liable in respect of a claim by
Purchaser for breach of representations and warranties:

 

(i)                                     If
and to the extent that any provision, reserve or expense for the matter giving
rise to the claim was specifically provided for in the Consolidated 2005
Financial Statement.

 

(ii)                                  If
and to the extent that the matter giving rise to a claim was specifically
disclosed against one or more specific representations or warranties in one of
the Schedules attached to this Agreement.

 

(ii)                                  If
and to the extent that Purchaser or the Companies are entitled to claim compensation

 

35

 

of any loss or damages suffered by them under the terms of any
insurance policy or from any other third party; such defense may, however, be
raised only if the Purchaser or the Companies are actually compensated by the
insurance company or the third party concerned within 60 days after the claim
has been notified to such insurance company or third party. After the expiry of
such 60 days deadline Sellers may not raise such defense if the claim against
the insurance company or the third party is assigned to Sellers.

 

(iii)                               If
and to the extent that any damage or loss was caused by any act or omission of
Purchaser after the Closing Date or by the fact that Purchaser has failed to
take the reasonable steps to mitigate the damage caused by a breach of a
representation or warranty after the Closing Date. For the avoidance of doubt,
neither the Purchaser nor the Companies shall be required to make any payment
or incur any cost to mitigate such a breach but shall give Sellers, the
opportunity to make such payment or incur such costs where possible.

 

5.7                    Procedure
with Third Parties and Authorities. If a breach of warranty exists because
any authorities or third parties raise claims against the Companies or if the
Companies in connection with such a breach have to enforce any rights or claims
against authorities or third parties, such negotiations and proceedings shall
be carried on taking into account the instructions of Sellers’ Agent who may
also take over such negotiations and proceedings and conduct them himself for
the account of the Companies provided, however, that Sellers’ Agent may not
settle any such claims in any way that will lead to any adverse consequences or
restrictions on the Purchaser or on the Companies and Sellers’ Agent shall give
Purchaser at least 30 days notice of any settlement in order that Purchaser may
notify Sellers’ Agent of any such consequences or restrictions. Further, any
settlement that exceeds the current funds in the Escrow Account Retention
requires prior written consent of the Purchaser. The Purchaser can take back
the conduct of any claim if it is not defended in an expeditious and reasonable
manner. The Companies in any event may not settle any such claims without
Sellers’ Agent’s consent, such consent not to be unreasonably withheld or delayed.

 

36

 

If settled or resolved following conduct by the Sellers, the Sellers
are automatically deemed to fully agree to such amount having to be paid from
the Sellers to the Purchaser under the obligations set forth in this Agreement
and will not object to any such claim; Sellers undertake to sign instructions
jointly with the Purchaser to the Escrow Agent to pay out to the Purchaser the
respective amount plus interest accrued thereon immediately following such
settlement or court decision becoming final from the Escrow Account.

 

ARTICLE 6

Indemnities

 

Sellers shall indemnify
and hold harmless the Purchaser and the Company for:

 

i                                   any
claims by Ascom for patent and/or copyright infringement, unfair competition
and/or breach of employees’ contractual obligation as far as such claims are
based on any actions undertaken before the Closing Date or the continuance of
any such action after the Closing Date or any damage to the Purchaser or the
Companies should the information disclosed by the Sellers prior to signing of
this Agreement with regard to the Ascom situation be found incorrect or
materially incomplete or information was deliberately withheld;

 

ii                                any
claims, brought by the Sellers or any one of them against the Companies or
Spirent Group based on actions of the Founders or the Companies before the
Closing Date or actions in the time period between Closing Date and December
31, 2006, or any continuance by the Companies of such actions thereafter; for
the avoidance of doubt, such indemnity will not include (i) claims arising from
the Sellers’ employment or consultancy agreements with the Companies or (ii)
payment for the delivery of goods and services to the Companies by Sellers and,
in the case of Comarco Wireless Technologies, Inc, payment for delivery of
goods and services and revenue sharing for products sold under the contractual
arrangements with the Companies as set forth in Schedule 4.11
(including, but not limited to revenue sharing agreements), in each case in the
ordinary course of Business. The Sellers herewith waive any right or claim
against the Companies relating to the period prior to

 

37

 

Closing Date, with the exception for claims for (i) salaries under
employment agreements and (ii) fees under consultancy agreements and (iii)
payments for the delivery of goods and services to the Companies and, in the
case of Comarco Wireless Technologies, Inc, payments under all contractual
relationships (including but not limited to revenue sharing agreements) with
the Companies, in each case in the ordinary course of Business;

 

iii                             any
Taxes to be paid by the Companies due to any assessments for tax periods which
have ended before the Closing Date unless provided for in the 2005 Consolidated
Financial Statements;

 

iv                            any
Taxes to be paid on constructive dividends paid by the Companies to Sellers or
to third parties before the Closing Date;

 

v                               any Taxes to be paid because the
Companies before the Closing Date have violated agreements they have concluded
with tax authorities;

 

vi                            any claim by any existing or previous
Option Holder under any stock option plans of the Company against the Company
or the Purchaser to the exclusion of claims for earnout related payments and
social security contributions on such payments (as set forth in art. 2.2.2b)
under the repurchase agreements concluded between the Option Holders and the
Company set forth in art. 3.3;

 

vii                         any Taxes paid or to be paid, whether pre
or post Closing Date, by the Companies or the Purchaser or any additional
pension contributions required to be paid because of the repurchase of options
by the Companies in excess of CHF 258’238;

 

viii                      any Taxes to be paid by the Companies
because of the distribution of the Dividend (with the exception of withholding
taxes that have been deducted from the dividend payment) or any other claims
arising out of or in connection with the Dividend or any other kind of dividend
on or before the Closing Date;

 

38

 

ix                              any claims by a third party against the
Companies for payments of the type described in art. 11.2.

 

Purchaser’s claims
for these indemnities are not covered by the rules set forth in art. 5.2, 5.3,
5.4 and 5.6 of this Agreement. It is agreed between the Parties that art. 5.1
(Waiver of Law Provisions), art. 5.5 (Escrow Account) and art. 5.7 (Third
Parties) do apply to these indemnities. Further, the maximum amount defined in
art. 5.6.2 of this Agreement applies to the total of (i) any claims for
breaches of representations and warranties set forth in art. 4 of this
Agreement and of (ii) claims under the indemnities defined in this art. 6. For
the avoidance of doubt, no disclosure made against the representations and
warranties or otherwise shall be construed to be a possibility to disclose or
as a disclosure against the indemnities in this art. 6.

 

Claims under
subparagraphs (i), (ii), (vi) and (ix) may be raised only within 3 years after
the Closing Date; claims under all other subparagraphs may be raised until 3
months after the statute of limitation of the claims concerned (taking into account
the effect of any interrupting actions) has expired. If by such date the
Purchaser has not commenced litigation in accordance with art. 12.2 of this
Agreement, the claims concerned shall be forgone and become unenforceable.

 

ARTICLE 7

Obligations of the Sellers

 

7.1                     Non-solicitation. Thomas von Arx, Tomas
Ahnebrink, Hanspeter Bobst and Pero Juric undertake that they shall not
themselves directly or indirectly solicit or induce the employees or customers
of the Companies, the Purchaser or Spirent Group, or assist or encourage any
third party to solicit or induce them, to leave employment with the Companies,
the Purchaser or Spirent Group (with respect to employees) or to reduce the
volume of business with the Companies, the Purchaser or Spirent Group (for
customers) during a period of three years after the Closing Date. Andreas
Danuser and Comarco Wireless Technologies, Inc. undertake that they shall not
themselves directly or indirectly solicit or induce the employees of the
Companies or assist or encourage any third party to solicit or induce them, to
leave

 

39

 

employment with the Companies during a period of three years after the
Closing Date. The Purchaser and Spirent Group (the term “Spirent Group” shall,
for this sentence only, include the Companies) undertake that they shall not
themselves directly or indirectly solicit or induce the employees of Comarco
Wireless Technologies, Inc. or assist or encourage any third party to solicit
or induce them, to leave employment with Comarco Wireless Technologies, Inc.
during a period of three years after the Closing Date.

 

7.2                     Non-compete.
Thomas von Arx, Tomas Ahnebrink, Hanspeter Bobst and Pero Juric will not
compete with the Spirent Group and the Companies in the Business during a
period of three years after the
Closing Date, i.e. undertake not to directly or indirectly engage in activities
as carried on or undertaken by the Companies as at Closing unless lawfully
allowed to in writing by the Purchaser. During that period, no Seller shall
directly or indirectly invest in, co-operate with, advise or accept any
interest of more than 5% in any company, business or business association
competing directly or indirectly with the Companies; this non-compete
undertaking shall, however, not apply to Comarco Wireless Technologies, Inc.

 

7.3                     Liquidated Damages (Konventionalstrafe). In case of a
breach of the non-solicit or non-compete obligations above, the breaching Party
is obliged to pay liquidated damages of CHF 250’000 for each case of violation.
Additionally, the Purchaser and/or the Companies have the right to claim any
additional damage which has been caused by violation of the non-solicit or
non-compete obligations. A payment of liquidated damages does not release the
breaching Party from its obligations. Additionally, if the obligated Party
violates the obligation not to compete, the Purchaser and/or the respective
Company have the right to forbid the breaching Party to start or continue
activities which are in violation of the non-compete obligation and may require
the breaching Party to abandon such activity (specific performance, Realexekution).

 

40

 

ARTICLE 8

Management and Structure of the Company

 

8.1                     Budget and Quarterly Hurdles. The
Parties have agreed on a 2006 budget as set forth in Schedule 8.1a (“2006
Budget”). Further, certain quarterly hurdles have been defined as set forth in Schedule
8.1b (“Quarterly Hurdles”). The
Quarterly Hurdles shall be calculated in accordance with IFRS and the
Accounting and Consolidation Principles.

 

8.2                     Purchaser’s obligations. The
Purchaser shall not take any steps in relation to the Companies which could
reasonably be expected to have a material adverse impact on the ability of the Companies to achieve
the goals defined for the earnout payments agreed in art. 2.2.2.

 

In particular, the Purchaser until December 31, 2006

 

(a)          Shall not and shall not cause the
Companies to transfer any business activities conducted on the Closing Date out
of the Companies or otherwise discontinue such business activities;

 

(b)         Shall not and shall not cause the
Companies to change the legal holding structure of the Companies set forth in Schedule
8.2b or the Company’s range of consolidation under IFRS;

 

(c)          Shall not require the dismissal or change
of the roles other than for important reasons of the employees listed in Schedule
8.2c;

 

(d)         Shall not and shall not require the
Companies to discontinue to use the name “SwissQual” as part of their legal company
name the trademarks “SwissQual”, “Seven.Five” and “Qualipoc” for their
products and services except due to valid reason such as where there is reason
to believe that the use of such trademark may give rise to a legal liability or
further increases any existing liability. Notwithstanding the foregoing, during
such period the branding plan set forth in Schedule 8.2d will be
followed.

 

(e)          Undertakes that any general reduction in
headcount and/or costs by the Spirent Group will not apply to the Companies;

 

(f)            Undertakes that the Company will have
access to sufficient financial resources in order to meet working capital and
capex requirements as reasonably required

 

41

 

under the 2006 Budget and in the ordinary course of
the Business;

 

and, until June 30, 2007

 

(g)         Will not require a change to the supply
chain and the research and development functions of the Companies insofar as it
may have a negative impact on the opportunity to achieve an earnout under part
3 of Schedule 2.2.2.(iv) of this Agreement.

 

For the avoidance of doubt:
(i) any action with prior written consent of Seller’s Agent, (ii) any action pursuant to the agreed
integration plan attached hereto as Schedule 8.2e or the branding plan
attached hereto as Schedule 8.2d, (iii) any actions required by law, as
well as (iv) any Corrective Actions taken pursuant to art. 8.4 will not
constitute a breach of Purchaser’s undertakings as set out in this art. 8.2.
The breach of only one Quarterly Hurdle as defined in Schedule 8.1b
shall, however, not allow Purchaser (i) to terminate the employment/consultancy
agreements of the Founders and Mr. Rohner or change their roles (other than
termination for important reason), and (ii) to reduce the sales force of the Companies
as defined in the 2006 Budget (other than termination for important reason).

 

8.3                     Obligations
of Sellers. The Sellers undertake that the business will be run: (i) in a
commercially prudent manner taking into account the 2006 Budget, and (ii) in a manner
that does not materially impact the long term prospects of the business, and
(iii) in a manner that is consistent with past practice. Further, the Sellers
undertake that in Quarter 4 (as defined in Schedule 8.1b) there will be
no discounts provided by the Companies to customers other than in accordance
with the Company Discount Policy (attached as Schedule 4.25) without the
prior written agreement of the Purchaser. Further, the Sellers undertake that
in Quarter 3 (as defined in Schedule 8.1b) there will be no amendment to
Companies’ price lists. The undertakings in this art. 8.3  shall not apply to Comarco Wireless
Technologies, Inc.; Comarco Wireless Technologies, Inc. shall, however, not
actively hinder the undertakings given by the other Sellers in this art. 8.3.
Any negative effect on the earnout because of a breach of this art. 8.3 has to
be borne by all Sellers proportionally.

 

42

 

8.4                     Quarterly Review. Within 10 Business Days after the end of
each financial quarter of the year 2006, the financial results for the
financial quarter and the year to date (the “Quarterly Financial Results”) will
be delivered to the Spirent Group, it being understood that such Quarterly
Financial Results shall be prepared in accordance with IFRS, past practice and
the Accounting and Consolidation Principles. Spirent Group can rely on these
numbers in determining whether the financial hurdles have been achieved. If any
of the Quarterly Hurdles is not achieved, Charles W. Simmons, or, if he is no
longer the President of Performance Analysis Wireless Positioning, (“PPAWP”),
the individual who has assumed this role and Thomas von Arx, will within 5
Business Days after receipt of the respective Quarterly Financial Results by
the Spirent Group seek to agree any actions to be taken with respect to the
management or funding of the Companies (“Corrective Actions”). For the
avoidance of doubt, such Corrective Action could include a decision to review
actions to be taken at a future point of time, any such delay not constituting
a waiver of Spirent Group’s right to take Corrective Actions or to later
require such Corrective Actions. If the PPAWP and Thomas von Arx fail to reach
agreement within that time period then, within a further 5 Business Days, PPAWP
and the chief executive officer of Spirent plc on the one hand and Thomas von
Arx and a Founder nominated by Thomas von Arx on the other hand shall seek to
agree on the Corrective Actions. If they fail to agree within that second time period
of 5 Business Days, Spirent Group may decide on the Corrective Action to be
taken and the Sellers undertake to implement such Corrective Actions to the
extent they have the power to do so. Any Corrective Actions determined by the
Spirent Group must be (i) reasonable taking into account the nature and extent
of the miss against the Quarterly Hurdles, and (ii) to the extent commercially
reasonable limit any adverse impact on the ability of the Companies to achieve
the goals defined for the earnout payments agreed in art. 2.2.2. If Thomas von Arx is no longer
with the Company, Tomas Ahnebrink, Hanspeter Bobst and Pero Juric acting
together shall, for the purposes of this paragraph, nominate a person to
replace Thomas von Arx.

 

Notwithstanding any Corrective Actions agreed or
implemented, Purchaser or Spirent Group may at any time after a Quarterly
Hurdle has been missed, request that further Corrective

 

43

 

Actions be taken by the Companies in which case the
process outlined above will be repeated.

 

8.5                     Violations
of Obligations. Sellers will
provide written notification pursuant to art. 11.3 made in good faith of their
reasonable belief that the Purchaser has breached its obligations set
forth in art. 8.2 within 10 Business Days after the date on which the Sellers
believe such a breach has occurred, and to specify the details of the breach.
For the avoidance of doubt, should the Sellers fail to provide notice within
such period, such breach is deemed to be accepted and may no longer serve as a
basis to claim for earnout as set forth below.

 

In case of a Purchaser breach, then Purchaser may within 30 Business
Days of receipt of aforementioned notification remedy the same if it is capable
of remedy and if the Purchaser breach is so remedied, Purchaser will have no
liability for such Purchaser breach. If and to the extent (i) a Purchaser
breach is not capable of remedy or is not remedied and (ii) Sellers can prove
the existence of such breach, then Purchaser shall pay to Sellers 50% of any
earnout payments described in art. 2.2.2 regardless of whether the conditions
for such earnout payments are met or not, provided that the earnout payments
used to calculate the amount due will exclude any payments in respect of (i)
earnouts that have already been paid, and (ii) earnouts where the relevant
deadline has passed before the date the breach occurred. Furthermore, the
payment actually made will (i) be reduced to be between zero and 50% if and to
the extent Purchaser can prove that the amount that would have been achieved by
the Sellers in the absence of such breach would have been less than 50% of the
applicable earnout amount, or (ii) be increased to be more than 50% if and to
the extent Sellers can prove that the amount that would have been achieved in
the absence of such breach would have been more than 50% of the applicable
earnout amount. To the extent that any amount is paid by the Purchaser to the
Sellers in respect of a particular earnout under this art 8.5, no further or
additional amounts will be payable by the Purchaser to the Sellers in respect
of such earnouts whether under art. 2.2.2 of this Agreement or otherwise.

 

8.6                     Change of Control. If the Spirent Group sells the Company before June 30, 2007 to a competitor and such sale can reasonably be expected to
have a material adverse impact on

 

44

 

the Sellers
opportunity to achieve an earnout, then to the extent at the
time of the sale there still existed a reasonable opportunity for the Sellers
to achieve an earnout payment under art. 2.2.2, such achievable earnout payment
shall be made by the Purchaser upon completion of such change of control
regardless of whether the conditions for such payments are met or not.

 

ARTICLE 9

Further undertakings after Closing Date

 

9.1                       Replacement of Directors. The
Purchaser will immediately after the Closing elect directors and auditors for
the Company and undertakes to use best efforts that extraordinary shareholders’
meetings will be held in order to, apart from any other resolution that may be
taken at this occasion, replace the current directors and auditors of the
Subsidiaries within 30 Business Days from the Closing Date.

 

9.2                     Tax
Rulings and Audits. Purchaser undertakes to cause the Companies to use best
commercially reasonable efforts to (i) continue with the process of obtaining a
transfer price tax ruling from the respective Italian tax authorities, and (ii)
seek a VAT tax audit for any period until the Closing Date, both to the
satisfaction of the Purchaser, and Sellers undertake to fully cooperate and
support these efforts, it being understood that art. 5.7 shall apply.

 

ARTICLE
10

Taxes

 

Any Taxes or other charges which become due
in connection with the transfer of the Shares by Sellers to Purchaser under
this Agreement shall be at the charge of Sellers. If Swiss stamp taxes are
levied on the Purchase Price because Purchaser uses the services of a Swiss securities
dealer such stamp taxes, however, shall be borne by Purchaser.

 

45

 

Sellers, furthermore, shall be liable for any income taxes assessed on
the capital gain they realize in the sale of the Shares. However, until the
fifth anniversary of the Closing Date, Purchaser shall not engage in any of the
following transactions, unless written consent is given by Sellers:

 

•                                payment of any
dividends on the basis of earnings accrued before December 31, 2005;

 

•                               a formal liquidation of the Company in the
sense of Art. 739 ff. CO;

 

•                                merger of the Company into another company;

 

•                                any other action by which the Company
transfers retained earnings
that exist at the Closing Date to the Purchaser.

 

Sellers shall not withhold their consent to any of the above
transactions if Purchaser can prove with a private ruling of the cantonal tax
authorities of the cantons in which Sellers are domiciled (for income taxes)
and of the federal tax authorities (for income and withholding taxes) that the
planned transaction will not result in a qualification of the gain realized by
Sellers in the sale of the Shares as being taxable income. Sellers shall fully
cooperate with Purchaser in order to obtain such ruling.

 

For the avoidance of doubt, Purchaser shall be entitled to make
payments or to grant loans from profits of the Companies made after the Closing
Date irrespective of the above restrictions. Furthermore, neither the payment
of the Dividend nor the payment of the purchase price for the repurchase of the
options from the Option Holders is considered to be a breach of this art. 10.

 

ARTICLE
11

Miscellaneous

 

11.1             No
Joint Liability. Sellers have no joint liability among each other for their
obligations and liabilities under this Agreement and, for the avoidance of
doubt, do not form a partnership (einfache
Gesellschaft); with respect to such liabilities and obligation each
Seller is only liable for the amount set forth in Schedule A opposite to
his name and the Purchaser agrees

 

46

 

that with respect to all liabilities and obligations of Sellers under
this Agreement, it will not attempt to collect or recover from any individual
Seller any amount in excess of the percentage amount set forth for such Seller
on Schedule A opposite his name. As far as the Parties mentioned in art. 7 of this Agreement violate
their obligations under such provision, these Parties are liable for their
individual violations and the damage caused by such violations while the other
Parties have no liabilities for such violation. As far as a Seller other than
Comarco Wireless Technologies, Inc. breaches a warranty or representation under
art. 4.4 paragraphs 1, 2, 4 and 5 of this Agreement, Comarco Wireless
Technologies, Inc. shall not be liable for such breach of such warranty or
representation under art. 4.4 paragraphs 1, 2, 4 and 5 of this Agreement. For
the avoidance of doubt, with respect to the funds at any time in the
Escrow Account Retention, Purchaser shall have the right to claim payment out
of this Escrow Account Retention of the total amount awarded by one or more
court decisions (respectively a partial amount equal to the funds in the Escrow
Account Retention) irrespective of whether such court decisions are binding all
the Sellers or only one or several Sellers, meaning that there will be no
proportionality within this Escrow Account Retention, but several (limited to
the percentage amount specified for each Seller on Schedule A opposite his
name) and not joint liability for any awarded amounts exceeding the funds in
the Escrow Account Retention.

 

As a rule governing the internal relationship amongst the Sellers only,
the following shall apply: If a judgment is rendered against one or several
Sellers and if as a consequence thereof the Purchaser has collected part of the
amount in the Escrow Account “Retention-general”, the Escrow Account “Retention-Transfer
Price/Tax Italy” and/or the Escrow Account “Retention-VAT”, Sellers who - if
Purchaser had sued them on the same basis - would also have been liable for
such damage, cannot claim that the Sellers against whom judgment has been
rendered shall compensate them for the reduction of the escrow concerned, but
must bear such reduction in proportion to their participation in Purchase
Price. The Founders shall fully under joint and several liability among the
Founders indemnify and hold harmless Comarco Wireless Technologies, Inc.
(including reasonable legal fees) for any claims by the Purchaser or the
Companies against Comarco Wireless Technologies, Inc. under (a) art. 6 (i), and
(b) for a breach of the representations and

 

47

 

warranties set forth in art. 4.12 as far as the claims under (a) and
(b) arise because Ascom has raised claims against the Companies or the
Purchaser, it being understood that art. 12.1. (Governing Law) and art. 12.2
(Jurisdiction) of this Agreement shall apply to this indemnity of the Founders.

 

Each Seller may raise such Seller’s claims (i.e., the percentage of
Sellers’ total claims as set forth in Schedule A opposite to such Seller’s
name) under this Agreement against Purchaser independently from the other
Sellers.

 

11.2             Costs. Each
Party bears the fees of its counsel and advisors. No costs related to the
transactions contemplated hereunder and the preparation of any such transaction
have been or will be paid by the Companies.

 

11.3             Notice.
Any notice, request, instruction or other document deemed by either Party
to be necessary or desirable to be given to the other Party, shall be in
writing and shall be telefaxed or mailed by registered mail addressed as
follows:

 

	
  If to Purchaser:

  	
   

  	
   

  	
   

  
	
  Paul Eardley, General Counsel

  	
   

  	
  Copy:

  	
  Charles Simmons (President)

  
	
  Spirent House,
  Fleming Way,

  	
   

  	
   

  	
  Spirent
  Communications Inc.

  
	
  Crawley, West
  Sussex, RH10 9QL

  	
   

  	
   

  	
  541 Industrial
  Way West

  
	
  England

  	
   

  	
   

  	
  Eatontown, New
  Jersey 07724

  
	
   

  	
   

  	
   

  	
  United States

  
	
   

  	
   

  	
  And:

  	
  Prof. Dr. Rolf Watter

  
	
   

  	
   

  	
   

  	
  Bär & Karrer

  
	
   

  	
   

  	
   

  	
  Brandschenkestrasse 90

  
	
   

  	
   

  	
   

  	
  CH-8027 Zurich

  
	
   

  	
   

  	
   

  	
   

  
	
  If to Sellers:

  	
   

  	
  Copy:

  	
  Dr. Urs Schenker

  
	
  Thomas von Arx

  	
   

  	
   

  	
  Baker & McKenzie Zurich

  
	
  Vrenihus
  Hasli 4

  	
   

  	
   

  	
  Zollikerstrasse 225

  

 

48

 

	
  CH-6262
  Langnau

  	
   

  	
   

  	
  P.O. Box

  
	
   

  	
   

  	
   

  	
  CH-8034 Zurich

  

 

Each Party may at any time change its address by giving notice to the
other Party in the manner described above.

 

11.4             No
Waiver. The failure of any of the Parties to enforce a provision of this
Agreement or any rights with respect thereto shall in no way be considered as a
waiver of such provision or right or in any way to affect the validity of this
Agreement. The waiver of any claim for breach of this Agreement by a Party
hereto shall not operate as a waiver of any claim pertaining to another, prior
or subsequent breach.

 

11.5            Entire
Agreement. This Agreement including any agreements referred to herein and
the Schedules hereto and thereto embodies the entire agreement between the
Parties with respect to the transactions contemplated herein and there have
been and are no agreements or warranties between the Parties other than those
set forth or provided for herein. This Agreement may be amended only in writing
through a document signed by all the Parties hereto.

 

The Sellers herewith terminate, with effect as of Closing Date, any
shareholders’ agreement with respect to the Shares.

 

11.6              Assignment. Sellers shall
not be entitled to assign in
whole or in part or delegate all or any part of their rights, interests or
obligations under or in connection with this Agreement except with the prior
written consent of the Purchaser.
Sellers herewith agree to any assignment in whole or in part or delegation of
all or any of part of its rights, interest or obligations under or in
connection with this Agreement by the Purchaser to any member of the Spirent
Group as will exist at the
relevant point of time.

 

11.7            Binding
on Successors. All of the terms, provisions and conditions of this
Agreement shall be binding upon and inure to the benefit of the Parties and their
respective heirs, successors

 

49

 

and assigns.

 

11.8            Announcements.
Sellers’ Agent, Comarco Wireless Technologies, Inc. and Purchaser shall consult
before issuing press releases or otherwise making any public statements or any
statements to the Companies’ employees with respect to this Agreement and shall
not issue any such press release or statement without the prior approval of the
other Party which shall not be unreasonably withheld or delayed. The Spirent
Group and Comarco Wireless Technologies, Inc. and Comarco, Inc. may make any
such announcements as required by law or regulations.

 

11.9            Guarantee
of Spirent plc. Spirent plc will on a separate deed guarantee the payment
of the Purchase Price but has no other duty or liability under this Agreement.

 

ARTICLE
12

Governing Law and Jurisdiction

 

12.1            Governing
Law. This Agreement shall be subject to and governed by Swiss Law to the exclusion
of conflict of law rules.

 

12.2            Jurisdiction.
The Commercial Court of the Canton of Zurich shall have exclusive jurisdiction
on any disputes arising out of or in connection with this Agreement.

 

 

IN WITNESS WHEREOF,
the Parties thereto have executed this agreement as of the date and year first
above written.

 

50

 

	
  Sellers1 and
  6-17:

  	
   

  	
  Comarco Wireless
  Technologies, Inc

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ T. von Arx

  	
   

  	
  /s/ T. Franza

  	
   

  
	
  represented by
  T. von Arx

  	
   

  	
  represented by
  T. Franza

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ P. Juric

  	
   

  	
   

  	
   

  
	
  represented by
  P. Juric

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Seller 2:

  	
   

  	
  Seller 3:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ /Signed/

  	
   

  	
  /s/ /Signed/

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Seller 4:

  	
   

  	
  Seller 5:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ /Signed/

  	
   

  	
  /s/ /Signed/

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Spirent Holdings
  Ltd.

  	
   

  	
  Spirent plc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Charles
  Simmons

  	
   

  	
  /s/ Charles
  Simmons

  	
   

  
	
  Charles Simmons

  	
   

  	
  Charles Simmons

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Angus Iveson

  	
   

  	
  /s/ Angus Iveson

  	
   

  
	
  Angus Iveson

  	
   

  	
  Angus Iveson

  	
   

  

 

51

 

List of Schedules 

 

	
  Schedules 0.1

  	
  Powers of
  Attorney and board resolutions

  
	
  Schedules A

  	
  List of Sellers
  and their respective Share ownership, their portion in the Purchase Price and
  their amount of liability

  
	
  Schedule 1.1

  	
  Accounting and
  Consolidation Principles

  
	
  Schedule 1.2

  	
  Escrow Agreement

  
	
  Schedule 1.3

  	
  List of
  Subsidiaries

  
	
  Schedule 2.2.2
  (i)

  	
  Earn-out
  regarding project CAMPING

  
	
  Schedule 2.2.2
  (ii)

  	
  Earn-out
  regarding project DARAS

  
	
  Schedule 2.2.2
  (iii)

  	
  Earn-out
  regarding revenues of the Seven.Five and Qualipoc product lines

  
	
  Schedule 2.2.2
  (iv)

  	
  Earn-out
  regarding project ELEKTRA

  
	
  Schedule 2.2.2 b

  	
  Calculation of
  Percentage of Earn-Out Payment to Option Holders

  
	
  Schedule 3.3e

  	
  Names of
  directors of the Company who will resign

  
	
  Schedule 3.3f

  	
  Names of the
  directors of the Subsidiaries who will resign

  
	
  Schedule 3.3g

  	
  Form of
  non-solicit undertakings Pero Juric and Hanspeter Bobst

  
	
  Schedule 3.3h

  	
  Form of
  non-solicit undertaking and declaration Kurt Rohner

  
	
  Schedule 3.3i

  	
  Form of
  consulting agreements of TvA Consulting AG and Thomas von Arx, ATECO GmbH and
  Tomas Ahnebrink and form of termination agreements of any consulting and/or
  indemnification agreements 

  
	
  Schedule 3.3j

  	
  Form of Tax
  declarations 

  
	
  Schedule 3.3k

  	
  Form of IP
  declaration

  
	
  Schedule 3.3m

  	
  Form of
  amendments to agreements with Option Holders

  
	
  Schedule 3.3o

  	
  Step by step
  plan

  
	
  Schedule 3.3p

  	
  Form of guarantee of Spirent plc

  
	
  Schedule 4.1a

  	
  Copy of the
  articles of incorporation of the Companies 

  
	
  Schedule 4.1b

  	
  List of the
  directors and officers of the Companies 

  

 

52

 

	
  Schedule 4.2

  	
  Share capitals
  of the Companies 

  
	
  Schedule 4.4

  	
  List of shares
  of the Subsidiaries

  
	
  Schedule 4.5a

  	
  Audited
  consolidated financial statements of the Company as of December 31, 2004

  
	
  Schedule 4.5b

  	
  Audited
  consolidated financial statements of the Company as of December 31, 2005

  
	
  Schedule 4.5c

  	
  Audited
  statutory financial statement of the Company as of December 31, 2005

  
	
  Schedule 4.5d

  	
  Contract between
  SwissQual AG and Elektrobit AG
  dated December 19, 2005 

  
	
  Schedule 4.6

  	
  Absence of
  Adverse Changes, Disclosure against 4.6

  
	
  Schedule 4.8

  	
  Litigations as
  of the Closing Date

  
	
  Schedule 4.10a

  	
  Material agreements containing a change of control clause

  
	
  Schedule 4.10b

  	
  List of onerous
  contracts under IFRS

  
	
  Schedule 4.10c

  	
  Material
  contracts

  
	
  Schedule 4.11

  	
  List of
  agreements with related parties

  
	
  Schedule 4.12a

  	
  List of all
  Intellectual Property Rights

  
	
  Schedule 4.12b

  	
  List of third
  parties having any rights to Intellectual Property Rights of the Companies
  with a description of the kind of Intellectual Property Rights they have

  
	
  Schedule 4.12c

  	
  All third party Intellectual Property Rights licensed to the Companies

  
	
  Schedule 4.13

  	
  List of all lease agreements

  
	
  Schedule 4.14

  	
  List of all assets leased, rented or licensed by the Companies

  
	
  Schedule 4.15a

  	
  List of all the Companies’ employees and consultants stating their
  salaries and notice period and any severance payments contractually agreed
  with them

  
	
  Schedule 4.15b

  	
  List of employees or consultants of the Companies having any claims
  for overtime work exceeding CHF 5’000 or any claim for holidays exceeding
  4 weeks

  
	
  Schedule 4.15c

  	
  List of all benefit or bonus plans 

  
	
  Schedule 4.15d

  	
  Benefit plans and promises regarding any additional benefit plans and
  

  

 

53

 

	
   

  	
  bonuses for the period after Closing Date

  
	
  Schedule 4.15e

  	
  Form(s) of employment contracts

  
	
  Schedule 4.15f

  	
  List of employees having a termination period of 6 months or more
  from the second year of service and a valid non-compete undertaking of 1 year
  minimum

  
	
  Schedule 4.16

  	
  List of all insurance policies 

  
	
  Schedule 4.19

  	
  Product liability claims

  
	
  Schedule 4.20a

  	
  The actuarial report on provisions for pensions and social security
  payments, in line with IAS 19 as per December 31, 2005

  
	
  Schedule 4.20b

  	
  List of pension related agreements and other constituting documents

  
	
  Schedule 4.24

  	
  List of outstanding guarantee, indemnity (Schadloshaltungsverpflichtung), suretyship or letters of
  comfort in excess of CHF 10’000

  
	
  Schedule 4.25

  	
  Discount policy

  
	
  Schedule 5.5a

  	
  Description of transfer pricing issue Italy

  
	
  Schedule 5.5b

  	
  Description of VAT issue

  
	
  Schedule 6.1

  	
  List of Taxes (including social contributions) to be paid because of
  the repurchase of options

  
	
  Schedule 8.1a

  	
  2006 Budget

  
	
  Schedule 8.1b

  	
  Quarterly Hurdles

  
	
  Schedule 8.2b

  	
  Legal holding structure

  
	
  Schedule 8.2c

  	
  List of employees

  
	
  Schedule 8.2d

  	
  Branding plan

  
	
  Schedule 8.2e

  	
  Integration plan

  

 

54

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