Document:

Exhibit 10.1

Exhibit 10.1

MINING LEASE WITH OPTION TO PURCHASE

THIS MINING LEASE AGREEMENT MADE AND ENTERED INTO on this 30th day of September, 2009, by and between:

Frank J. Montonati and Don Laeding natural persons and their respective corporate entities more specifically
described in Exhibit A, (hereinafter referred to as “Lessor”)

And

Colorado Goldfields Inc., a Nevada corporation (hereinafter referred to as “Lessee,” or “Company”).

IN CONSIDERATION of SEVENTY FIVE MILLION (75,000,000) RESTRICTED SHARES OF COLORADO GOLDFIELDS INC. CLASS A COMMON
STOCK and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor
does hereby grant, demise and let exclusively unto Lessee for the duration and for the purposes herein specified, all
of Lessor’s right, title and interest in and to the mining claims described in Exhibit A referred to as the “Leased
Premises.”

I. EXCLUSIVE RIGHTS GRANTED

1. The Leased Premises are hereby leased exclusively to Lessee and its successor-in-interest for the following
purposes, all or any of which may be performed by Lessee in such manner and at such time or times as Lessee may
determine in its absolute discretion, subject to the terms hereof:

	 	a.	 	Exploring and prospecting for, developing, mining, excavating, leaching, milling, processing
and smelting, whether by open pit, underground, strip mining, solution mining, heap leaching, or any
other methods deemed desirable by Lessee in its sole discretion, all minerals, ores, valuable rocks, rare
earths and materials of all kinds, including mine dumps and tailings (hereinafter collectively referred
to as “Leased Substances”);

	 	b.	 	Processing, concentrating, beneficiating, treating, milling, smelting, shipping, selling and
otherwise disposing of the Leased Substances and receiving the proceeds of any such sale;

	 	c.	 	Erecting, constructing, maintaining, using and operating in and on the Leased Premises such
buildings, structures, machinery, facilities and equipment as Lessee deems necessary, except that
modifications to existing structures require the prior approval of the Lessor; and

	 	d.	 	Lessee acknowledges that the log bunkhouse may be re-located by Lessor during the initial term
of this Lease; and

 

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	 	e.	 	Engaging in any other activity that Lessee deems reasonable and necessary to achieve the
foregoing purposes, and which may be described more specifically in Exhibit A.

II. TERM OF LEASE

2. The term of this Mining Lease shall be for three (3) years from the effective date set forth above, and may be
renewed by Lessee for successive three (3) year periods upon substantially the same terms and provisions as set forth
herein based upon the then-capital structure of the Lessee, until declared forfeited and canceled by Lessor or
relinquished by Lessee as provided herein. Lessee shall give Lessor written notice of each renewal at least thirty
(30) days prior to expiration of the respective three-year term. This Mining Lease shall automatically renew and
continue so long as ores, minerals, or metals are produced or sold from the Leased Properties on a continuous basis.

III. ADVANCE ROYALTY AND WORK COMMITMENT

3.1 A portion of the “restricted” stock received by Lessor shall constitute an Advance Royalty paid the Lessor as
initial consideration upon execution of this Mining Lease. A portion of such stock shall further constitute the
minimum advance royalty on or before the anniversary date of each succeeding lease year.

3.2 Lessee shall be entitled to a credit not to exceed $25,000 over the 3-year term of this Mining Lease, of all such
Royalties paid against Production Royalties otherwise owing to Lessor pursuant to Article IV of this Lease. The
advance royalty credit shall not be applied until after the first full year of production, or total Production
Royalties paid to Lessor pursuant to Article IV exceed $275,000, which ever occurs first.

3.3 Lessee shall perform exploration, mining, development, production, processing or any other activity (“work” herein)
which benefits the Leased Premises at a minimum cost of $150,000 for the first year, $200,000 for the second year, and
$250,000 for the third year of this Mining Lease and commencing on the date of this Lease. All work on other lands
within 500 feet of the boundary of any portion of the Leased Premises shall be deemed to benefit the Leased Premises
for the work commitment if such work is part of an overall plan or project that includes the Leased Premises. All
costs expended for work in excess of $600,000 for any three (3) year term shall accrue and be applied to the work
commitment for the next successive 3-year term only; however, the maximum amount that can so accrue for the next
succeeding lease term shall be no more than $600,000.

3.4 In the event that Lessee does not perform work in the amount of the entire minimum expenditure required for the
applicable year (which amount will include any excess amount accrued from the prior three year term), Lessee shall pay
Lessor the amount of any such shortage in cash or cash equivalents, including additional shares of Company stock.
Within 30 days after the end of each three (3) year term, Lessee shall submit an accounting report of the expenditures
toward the work commitment and a report containing factual, non-interpretive data concerning the work of Lessee during
the preceding 3-year term. On or before November 30 of each year, a separate one-year report shall be prepared and
furnished to Lessor containing factual, non-interpretive data concerning work of Lessee, if any, during the preceding
calendar year.

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3.5 The breach, by Lessee, of paragraphs 3.3 and/or 3.4 above shall entitle Lessor to immediately terminate the Lease
and in such event, Lessor waives the right to sue for monetary damages.

3.6 Lessee shall provide work progress reports to the Lessor on a quarterly basis.

IV. PRODUCTION ROYALTY

4.1 In addition to the consideration set forth herein, Lessee shall pay Lessor a Five Percent (5%) Net Smelter Royalty
on all mineral bearing ores.

4.2 The payment of Production Royalty shall be made not more than 45 days after the close of the month during which the
payment is received from the smelter or buyer on which such Royalty is calculated.

4.3 “Net Smelter Returns” shall mean the net amount of money received by Lessee from the sale of Leased Substances to a
smelter, refinery or other buyer, after deduction of costs of transportation to point of sale and costs of any
concentration of Leased Substances prior to delivery to the smelter, refinery or other buyer, and less the deduction of
all cost, penalties or charges required by said smelter, refinery or other buyer to be paid by Lessee as a condition of
sale. In the event a Leased Substance is sold to any buyer other than a smelter, all costs incurred by Lessee after
mining for processing or treating such substances, including refining, shall be deductible costs. It is expressly
intended that any money received by Lessee from existing tailings and/or dump material be included in the royalty
calculation.

4.4 The payment of Production Royalty shall be made not more than 45 days after the close of the month during which the
payment is received from the smelter or buyer on which such Royalty is calculated.

4.6 Lessee shall be entitled to credit all Advance Royalty payments paid to Lessor pursuant to Article III Paragraph
3.2 of this Mining Lease against all Production Royalties payable to Lessor under this Article IV.

4.5 All Leased Substances which the Lessee chooses to market shall be marketed at the best terms reasonably obtainable,
with due regard to freight differentials, and if such ores or concentrates or other products shall be treated at a
smelter or refinery of Lessee, the smelter or refinery schedules used for determining the Net Smelter Returns thereon
shall not be less favorable than the terms and conditions either being offered to others or being contracted with
others at the time for products of like character and in similar quantities for delivery to Lessee’s smelters or
refineries.

4.7 If ores or concentrates produced from the Mining Properties are refined or smelted at a facility owned by the
Lessee, then the royalty interest of the Lessor provided for herein may be computed on the basis of the value of such
concentrate or shipment at the input side of such facility. The value shall be mutually agreed. If such value cannot
be agreed upon, it shall be the highest price which can be obtained by shipping such ores or concentrate to a smelter
willing to buy the same, taking into consideration the cost of transportation to the smelter and smelter costs and
penalties.

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4.8 By thirty (30) days’ written notice to the Lessee, the Lessor from time to time may elect to take its royalty
interest in gold and silver in kind. In such event, the amount of the production shall be computed on the basis of the
value thereof at the input of the smelter (either owned by the Lessee or otherwise), divided by the price thereof as
above determined for gold or the Johnson Matthey quoted price for silver.

4.9 The Lessor may request the smelter or other ore-purchasing agency to deliver said royalty interest in production
directly to the Lessor or retain possession of such interest at the smelter for future sale.

4.10 In the event of discovery of ore bodies containing over 5 ounces per ton containing free gold which can be
feasibility mined separately, or specimen quality minerals which require individual extraction, then the Net Smelter
Royalty paid to Lessor shall be Twenty Percent (50%).

V. INSPECTION, REPORTS, BOOKS AND RECORDS

5.1 Lessor, or its duly authorized agent or representative, shall be permitted to enter into or upon the Leased
Premises for the purpose of inspection, at all reasonable times during business hours, after 48 hours advance notice in
writing to Lessee. Lessor shall enter upon said Leased Premises at Lessor’s own risk and so as not to hinder the
operations of Lessee. Lessor shall indemnify and hold harmless Lessee from any damage, claim or demand arising from
the entry or inspection by Lessor or its agent or representatives, or any of them, on the Leased Premises or the
approaches thereto.

5.2 The books and records of Lessee insofar as they relate to operations on the Leased Premises pursuant to this Mining
Lease shall be open to inspection and copying by Lessor or its duly authorized representatives, at the expenses of
Lessor, during regular business hours, after 48 hours advance request in writing to Lessee. Within twenty-four (24)
months after the end of each calendar year, Lessor may at its sole cost and expense make or have made an audit of the
accounts and records of Lessee concerning operations on the Leased Premises for that calendar year; provided that
Lessor may audit the accounts for a calendar year only once and provided further that Lessor must notify Lessee in
writing of its intention to cause such an audit to be made sixty (60) days in advance of such date.

VI. DATA ON THE PROPERTY

6. Upon execution of this Mining Lease, Lessor will provide Lessee with access to all data concerning the Leased
Premises then in possession of Lessor or its agents. Lessee shall have the right to make and remove copies of all such
data at the expense of Lessee, but Lessee shall not remove original documents without written consent of Lessor.
Lessee hereby acknowledges that Lessor has provided all data in its possession.

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VII. PROTECTION FROM LIENS, DAMAGES AND LIABILITY

7.1 Lessee shall keep the Leased Premises free and clear of liens for labor done or performed or materials furnished on
or for the development or operation of the Leased Premises under this Mining Lease. Lessee will not be considered in
breach of this provision so long as Lessee, in good faith, contests the validity of any liens or claims against the
Leased Premises.

7.2 Lessee shall indemnify and shall hold harmless Lessor and all of Lessor’s partners, agents, and employees, and each
of them, from and against any and all obligations, debts, loss, damage, claims, demands, suits, controversies, costs,
fees, liens, encumbrances, and liabilities whatsoever, including attorneys’ fees, in any way resulting from or arising
out of any failure by Lessee to abide by any material term of the Mining Lease or any negligent or intentional act or
omission by Lessee’s contractors arising out of or in connection with the operations and activities of Lessee
hereunder, or out of its possession and occupancy of the Leased Premises, including environmental costs resulting from
Lessee’s operations, or from any similar actions by the public during the term of this Mining Lease. Lessor shall not
be responsible or liable for any loss or damage to Lessee or to Lessee’s property or business that may be occasioned by
or through acts or omissions of persons or entities (other than for negligent or reckless acts or willful misconduct or
omissions by Lessor or any of its partners, agents or employees) occupying, using, or passing over any part of the
Leased Premises. Lessee shall use and occupy the Leased Premises at its own risk, and hereby releases Lessor, to the
full extent permitted by law, from all claims of every kind or nature, including claims for loss of life, personal or
bodily injury, or property damage except as otherwise excluded herein.

7.3 Lessor hereby indemnifies and holds Lessee harmless from and against any claim by the EPA or some similar federal
or state agency based solely on past mining contamination or violations. In the event the EPA or a similar federal or
state agency brings suit against Lessee as a person in the chain of title, Lessor further agrees to defend any such
suit on Lessee’s behalf at its sole cost and expense.

7.4 Lessee shall establish a contingency reclamation reserve fund for the purpose of assuring payment of reclamation
costs caused by Lessee. There shall be deducted from net smelter returns on all materials produced and sold from the
Mining Properties, after the Lessor’s royalties are computed, five percent (5%) of the value thereof, for the purpose
of a contingency reclamation reserve fund for paying potential reclamation costs, up to FIVE HUNRED THOUSAND DOLLARS
($500,000). Said five-percent deduction shall be placed in an escrow account. If upon the termination of this lease
and the payment of all reclamation costs, there remain sums in said contingency reclamation reserve fund, the same
shall be returned to the Lessee. If at any time after two years from the time the Mining Properties subject hereto or
any of them are placed in production, it is determined that 5% of the value of such production exceeds the probable
amount of reclamation to be paid from such fund or is insufficient to pay such taxes, then said 5% deduction shall be
reduced or increased in such amount as may reasonably be expected to pay the reclamation costs which are to be paid
therefrom. The monies placed in such reserve fund shall be deposited in such manner, if possible, to derive interest
therefrom, and the interest shall become a part of the contingency reclamation reserve fund.

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VIII. COMPLIANCE WITH LAW

8.1 In conducting its operations hereunder, Lessee will cause all work, development and mining to be done in a careful
and miner-like manner, and Lessee shall fully comply with the terms and provisions of worker’s compensation laws and
all other laws governing its operations under this Mining Lease, including but not limited to any mining or
environmental obligation, under existing or hereafter enacted legislation.

IX. TERMINATION BY LESSEE

9.1 Lessee shall have the continuing right to terminate this Mining Lease at any time and to surrender the Leased
Premises to Lessor by giving Lessor written notice thereof at least 30 days prior to the stated date of termination.

9.2 In the event of termination, all sums theretofore paid Lessor by Lessee shall, except in the case of manifest
error, be retained by Lessor, and all obligations of Lessee to make payments (expect those accruing prior to the date
to termination) and perform any other obligation set forth in this Mining Lease shall terminate, except any reclamation
required by any federal or state regulatory agency. All reclamation responsibilities of lessee shall survive the
termination of this agreement.

9.3 In the event of termination, Lessee, upon request by Lessor, shall make, execute, acknowledge and deliver to Lessor
a written relinquishment of this Mining Lease in recordable form.

9.4 Termination of this Mining Lease shall not relieve Lessee of its obligation to pay all royalties due to Lessor
hereunder as well as its pro-rata share of taxes and fees.

X. DEFAULT

10.1 Lessee shall be in default hereunder if either of the following shall occur:

a. Lessee fails to fulfill an obligation to Lessor, or does not in good faith contest in writing the
particular obligation, within thirty (30) days after receipt by Lessee of written notice from Lessor that a
required obligation has become due and has not been satisfied; or

b. Lessee fails to perform any of the other covenants or agreements herein contained, and such failure
continues for a period of 60 days after receipt by Lessee of written notice from Lessor of such failure,
stating how it may be cured, and Lessee is not diligently proceeding to cure such failure or is not in good
faith contesting the claimed failure.

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c. In the event of default by Lessee as provided above, Lessor may at once enter into and upon the Leased
Premises or any part thereof and declare a forfeiture and cancellation of this Mining Lease.

XI. REMOVAL OF EQUIPMENT

11.1 During the term hereof, Lessee is granted exclusive use of all structures, improvements and personal property
located on the Leased Premises and owned by Lessor as of the date of this Mining Lease.

11.2 In the case of a valid forfeiture, surrender or other termination of this Mining Lease, Lessee shall have the
right for a period of one hundred eighty (180) days to remove from the Leased Premises all warehouse stocks,
merchandise, materials, tools, hoists, compressors, engines, motors, pumps, transformers, electrical accessories, metal
or wooden tanks and mine cars and any and all other machinery, trade-fixtures and equipment erected or placed in or
upon said Leased Premises by it, except only rails, mine timbers, installed pipes and connections. All property not
removed within said period shall be deemed abandoned to Lessor, unless such period is extended by agreement of Lessee
and Lessor or by reason of force majeure as defined herein.

11.3 Lessee will not discard any structures, improvements and personal property located on the Leased Premises and
owned by Lessor as of the date of this Mining Lease, or discovered by Lessee during the term of this Mining Lease,
without prior written consent of Lessor.

XII. TITLE

12.1 Lessor warrants and covenants that it holds title and is in actual and exclusive possession of the Leased Premises
free and clear from all grants, sales, liens, defects, adverse claims and encumbrances of any kind. Lessor shall
deliver said actual, peaceful and exclusive possession of the Leased Premises to Lessee for the Term of this Mining
Lease and, during the Term of this Mining Lease Lessor shall not encumber or burden title to the Leased Premises in any
way without the prior written consent of Lessee.

12.2 Lessor agrees to furnish Lessee such abstract, deeds or other evidence of title as may be in Lessor’s possession
and control, and to allow and cooperate with Lessee, at Lessee’s option and expense, to have abstracts brought to date
and to take such steps and proceedings to establish title as Lessee shall deem advisable. Lessee hereby acknowledges
that Lessor has provided all title information in its possession.

12.3 The Lessor has the right and authority to execute this Mining Lease and lease the Mining Properties to the Lessee.

12.4 The Lessor is not aware of any litigation, claims, or demands made by others with respect to the title of its
Mining Properties.

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XIII. FORCE MAJEURE

13.1 The obligations of Lessee hereunder shall be suspended to the extent and for the period that performance of any of
Lessee’s obligations hereunder is prevented by any cause, whether foreseeable or unforeseeable, which are determined to
be beyond Lessee’s reasonable control (hereinafter “an event of force majeure”) including, without limitation any of
the following, acts of nature; labor disputes; strikes or threats of strike; fire; explosion; earthquake; storm; flood;
landslide; avalanche; drought or other adverse weather condition; interruption or delay in transportation; war ;
insurrection; riot; laws, regulations, orders, proclamations, instructions or requests of any government or
governmental entity; judgments or orders of any court; inability to obtain, on reasonably acceptable terms, any public
or private license, permit or other authorization; curtailment or suspension of activities to remedy or avoid an actual
or alleged, present or prospective, enforcement of federal, state or local environmental standards; unavoidable
casualties; shortage of labor, equipment, fuel, material, parts, supplies, services or equipment; plant breakdown; or
any disabling cause, whether similar or dissimilar to the foregoing enumeration.

13.2 If an event of force majeure occurs, the suspension of Lessee’s performance hereunder during such occurrence shall
not be deemed a breach of the Mining Lease, and the Term of this Mining Lease shall be extended for a time period equal
to the duration of such suspension. Lessee shall promptly give notice to Lessor of the suspension of performance,
stating therein the cause and duration thereof. Lessee agrees to use reasonable diligence to remove such causes of
suspension as may occur from time to time, but shall not be required to settle strikes or other labor difficulties
contrary to its own judgment.

XIV. NOTICES

14.1 All notices, payments and elections required, permitted or requested hereunder shall be made in writing and
delivered personally or made in writing and sent by regular mail, facsimile transmission or e-mail (except notice of
termination or default, which shall be sent by certified mail, return receipt requested), addressed as follows:

To Lessor:

	 	 	 	 	 
	 

	 	Frank J. Montonati
	 	Don Laeding
	
 
	 	308 S Chestnut Street
	 	P.O. Box 4006
	
 
	 	Trinidad, CO 81082
	 	Bisbee, AZ 85603

To Lessee:

C. Stephen Guyer

Colorado Goldfields Inc.

10920 West Alameda Ave, Suite 207

Lakewood, Colorado 80226

unless otherwise changed or modified by written request of the recipient party.

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XV. COMMINGLING OF ORE

15.1 The Lessee may mill ore produced from the Mining Properties and from other mining properties operated by him in
the same general area in a mill located on the mining property operated by him or under his control and may commingle
for milling purposes ore produced from any of the mining properties as well as ore produced from the Mining Properties
subject hereto with ore from other properties not subject to this Mining Lease. In such event the Lessee shall
establish procedures for determining the content of metal in the ores produced from such properties by calculating on a
metallurgical basis in accordance with sampling and mill efficiency experience, so that the production royalties
applicable to ores produced from each of the properties from which ores are commingled may reasonably be determined.
Records relating to comingled ores shall be available for inspection by Lessor at all reasonable times. Such
procedures and the records thereof may be questioned by the Lessor at any time and submitted to arbitration in
accordance with the rules of the American Arbitration Association if Lessor believes that such procedures are resulting
in a disadvantage to its property.

XVI. TAXES

16.1 Lessee agrees to pay all taxes assessed against the Leased Premises during the term hereof (except federal, state
or local taxes assessed on income) including, but not limited to, ad valorem property taxes, net proceeds or mine
taxes, and all taxes for ores mined and ores treated under this Mining Lease. Lessee will deliver the appropriate tax
and BLM maintenance fee to the Lessor and the Lessor will satisfy these responsibilities. Lessor will provide receipts
of these transactions to the lessee.  These transactions will be on a timely basis as to not encumber or jeopardize the
properties. Payment of such taxes shall be made prior to the delinquency date of the tax.

XVII. INCIDENTAL USE OF PROPERTY

17.1 Lessee may possess, occupy and use, in the course of and as pertinent to its operations in the vicinity of, or
upon the Leased Premises, all or any of the structures owned by Lessor located upon or within the Leased Premises.
Lessee shall maintain in reasonably good state of repair all such structures which it elects to use to which it is
granted exclusive use within the scope of such grant in Article XI, except for the ordinary wear and tear and
reasonable depreciation resulting from Lessee’s said use and possession. During the period of use by Lessee, Lessee
shall pay the insurance, power, light and miscellaneous costs that accrue on such structures as Lessee elects to use.
Lessor makes no warranty as to the condition or safety of any structures upon the Leased Premises and Lessee agrees to
accept the risk of loss resulting from its use of structures. Lessee shall maintain adequate fire and casualty
insurance on all structures used by lessee.

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XVIII. ASSIGNMENT

18. With prior consent of Lessor, not to be unreasonably withheld, the Lessee shall have the right to assign all or any
portion of the Mining Properties to any financially able party or parties, provided that all conditions of this Mining
Lease shall be binding upon the assignee and that he accepts Liability there for in writing and the Lessor is notified
of such assignment and receives written acceptance of liability. No conveyance, assignment, or transfer affecting the
mineral rights on the Mining Properties or the mineral production therefrom shall be made except subject to the terms
and conditions of this Mining Lease.

XIX. INUREMENT

19. The terms, provisions, covenants, warranties and agreements herein contained shall extend to, be binding upon and
inure to the benefit of the heirs, personal representatives, successors and assigns of the parties.

XX. MEMORANDUM OF LEASE

20. Lessor and Lessee agree to execute a Memorandum setting forth the basic terms and conditions of this Mining Lease.
Said Memorandum may be recorded in all public records where such documents are customarily recorded. Lessor and Lessee
agree that this Mining Lease shall not be recorded.

XXI. OPTION TO PURCHASE

21. Lessor grants to Lessee the sole and exclusive option to purchase all of Lessor’s right, title and interest in the
property (the Leased Premises) for a total purchase price of FOUR MILLION dollars ($4,000,000), plus a perpetual two
percent (2%) Net Smelter Royalty (hereinafter referred to as the “Purchase Price”). The Purchase Price may be paid in
cash or other cash equivalent as mutually agreed by the Lessor and Lessee. Exercise of the option shall be effective
upon delivery of written notice thereof to Lessor at Lessor’s business address or the address of Lessor’s registered
agent. Lessee shall deliver to Lessor a negotiable instrument in the full amount of the Purchase Price in exchange for
properly executed and acknowledged Deeds and/or other indicia of ownership in recordable form. Closing shall occur
within sixty (60) days after exercise of the option.

XXII. STOCK LOCK-UP

22.1 The undersigned Lessor(s) hereby agrees that for a period commencing on September 30, 2009 and expiring on
September 30, 2012, he, she or it will not, directly or indirectly, issue, offer, agree or offer to sell, sell, grant
an option for the purchase or sale of, transfer, pledge, assign, hypothecate, distribute or otherwise encumber or
dispose of any securities of the Company issued pursuant to this Mining Lease, including common stock or
options, rights, warrants or other securities underlying, convertible into, exchangeable or exercisable for or
evidencing any right to purchase or subscribe for any common stock (whether or not beneficially owned by the
undersigned), or any beneficial interest therein (collectively, the “Securities”).

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22.2 In order to enable the this Article XXII to be enforced, the undersigned Lessor(s) hereby consents to the placing
of legends and/or stop-transfer orders with the transfer agent of the Company’s securities with respect to any of the
Securities registered in the name of the undersigned Lessor(s) or beneficially owned by the undersigned Lessor(s), that
are issued pursuant to this Mining Lease.

22.3 The undersigned Lessor(s) understands and acknowledges that this Article XXII is revocable by the undersigned
Lessor(s) under the following circumstances.

	 	a.	 	Upon economic hardship, health care emergencies, or other reason, to be approved by the board of
directors of the Company, which shall not be unreasonably withheld;

	 	b.	 	Any change in the ownership or control of common stock of the Company which results in more than 50% of
the issued and outstanding common stock of the Company being owned or controlled by a person or entity, or a
group of persons or entities, who did not own or control more than 50% of the issued and outstanding common
stock of the Company as of the date of this Agreement; provided, however, that it shall not be deemed a
“Change of Control” under this subsection (a) if the change in ownership of more than 50% of the issued and
outstanding common stock of the Company is pursuant to a public or private offering of common stock by the
Company for capital raising purposes, and such offering was approved by the Board of Directors of the Company;

	 	c.	 	A merger or consolidation of the Company with another entity such that more than 50% of the issued and
outstanding voting stock of the surviving entity is owned or controlled by a person or entity, or a group of
persons or entities, who did not own or control more than 50% of the issued and outstanding common stock of
the Company as of the date of this Agreement.

	 	d.	 	Other circumstances as described in Exhibit A.

IN WITNESS WHEREOF, the parties undersigned warrant that they are properly authorized to bind their respective
organizations and enter into this Mining Lease according to all terms and provisions hereof, effective as of the day
and year first above written.

[SIGNATURE PAGE FOLLOWS]

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	Lessor:

	 	/s/ Frank J. Montonati
	 

	 	Frank J. Montonati
	 
	 	 
	Date signed:

	 	30 September 2009
	 
	 	 
	Lessor:

	 	/s/ Don Laeding
	 

	 	Don Laeding
	 
	 	 
	Date signed:

	 	30 September 2009
	 
	 	 
	 

	 	/s/ C. Stephen Guyer
	Lessee:

	 	Colorado Goldfields, Inc.
	 

	 	C. Stephen Guyer, Chief Financial Officer
	 
	 	 
	Date signed:

	 	30 September 2009

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EXHIBIT A

DESCRIPTION OF MINING PROPERTIES

The properties consist of approximately 600 acres of patented and unpatented claims located along the historic Brooklyn
Mine and associated structures. The properties consist of approximately 600 acres of patented and unpatented claims
located along the historic Brooklyn Mine and associated structures. The Brooklyn Mine has consistently produced
exceptionally high-grade gold ore since its discovery around 1900.

A more detailed description of the Mining Properties may be supplied at a later date.

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17Exhibit 10.1

Exhibit 10.1

ASSET PURCHASE AGREEMENT

BY AND

AMONG

SOCKET MOBILE, INC.,

DEVELOPMENT CAPITAL VENTURES, LP

AND

QUATECH INC.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. AGREEMENT TO SELL AND PURCHASE CERTAIN ASSETS
	 	 	1	 
	 
	 	 	 	 
	1.1 Agreement to Sell and Purchase
	 	 	1	 
	1.2 Treatment of Liabilities
	 	 	2	 
	1.3 Delivery of Assets
	 	 	2	 
	1.4 Supply and Licensing Agreement
	 	 	3	 
	1.5 Transition Services
	 	 	3	 
	 
	 	 	 	 
	2. PURCHASE PRICE
	 	 	3	 
	 
	 	 	 	 
	2.1 Purchase Price
	 	 	3	 
	2.2 Allocation of Purchase Price
	 	 	4	 
	2.3 Transfer Taxes
	 	 	4	 
	 
	 	 	 	 
	3. CLOSING
	 	 	4	 
	 
	 	 	 	 
	3.1 Date and Time
	 	 	4	 
	3.2 Seller’s Deliveries
	 	 	4	 
	3.3 Purchaser Deliveries
	 	 	5	 
	3.4 Inventory
	 	 	5	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES OF SELLER
	 	 	5	 
	 
	 	 	 	 
	4.1 Organization of Seller; Authorizations
	 	 	5	 
	4.2 Requisite Power and Authority
	 	 	6	 
	4.3 Seller’s Requisite Consents; Nonviolation
	 	 	6	 
	4.4 No Undisclosed Liabilities
	 	 	6	 
	4.5 Title to Assets
	 	 	6	 
	4.6 Assigned Contracts
	 	 	7	 
	4.7 Litigation
	 	 	7	 
	4.8 Intellectual Property
	 	 	7	 
	4.9 Compliance with Laws
	 	 	11	 
	4.10 Tangible Assets
	 	 	11	 
	4.11 Inventory
	 	 	11	 
	 
	 	 	 	 
	5. OTHER COVENANTS
	 	 	11	 
	 
	 	 	 	 
	5.1 Expenses
	 	 	11	 
	5.2 Books and Records
	 	 	11	 
	5.3 Bulk Transfer Laws
	 	 	12	 
	5.4 Confidentiality
	 	 	12	 
	5.5 Publicity
	 	 	12	 
	5.6 Discontinuation of Operations
	 	 	12	 
	5.7 Non-competition
	 	 	13	 
	5.8 Remedies
	 	 	13	 

 

i

 

	 	 	 	 	 
	5.9 Insurance and Access
	 	 	13	 
	5.10 Litigation Support
	 	 	14	 
	5.11 Post Closing Accounts Receivable
	 	 	14	 
	5.12 Product Returns
	 	 	14	 
	 
	 	 	 	 
	6. INDEMNIFICATION
	 	 	15	 
	 
	 	 	 	 
	6.1 Indemnification by the Seller
	 	 	15	 
	6.2 Indemnification by the Purchaser
	 	 	15	 
	 
	 	 	 	 
	7. MISCELLANEOUS
	 	 	16	 
	 
	 	 	 	 
	7.1 No Waiver
	 	 	16	 
	7.2 Successors and Assigns
	 	 	16	 
	7.3 Notices
	 	 	16	 
	7.4 Survival of Obligations
	 	 	16	 
	7.5 Complete Agreement
	 	 	17	 
	7.6 Applicable Law; Jurisdiction
	 	 	17	 
	7.7 Counterparts
	 	 	17	 
	7.8 Further Assurances
	 	 	17	 

 

ii

 

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of the close of business
on September 30, 2009, by and among Socket Mobile, Inc., a Delaware corporation,
(“Seller”), Development Capital Ventures, LP (“Funder”) located at 5820 Fitzhugh
Street, Burke, VA 22015, and Quatech Inc., an Ohio corporation (“Purchaser”).

1. AGREEMENT TO SELL AND PURCHASE CERTAIN ASSETS

1.1 Agreement to Sell and Purchase. 

At the Closing, Seller will sell, convey, transfer, assign and deliver to Funder, for the
purpose of enabling the purchase by Purchaser, and Purchaser will, upon completion of arrangements
with Funder, complete the purchase and assume from Funder, all assets of Seller which pertain to
Seller’s serial card business (the “Business”), free and clear of all liens, charges,
claims, mortgages, pledges, easements, encumbrances, security interests, adverse claims or any
other title defects or restrictions of any kind (collectively, “Encumbrances”). For the
purpose of this transaction, Funder is deemed an intermediary who will fund the purchase by
Purchaser and enable its immediate transfer to Purchaser. Accordingly, all references to Purchaser
are made with the expectation that all rights, title and interest in the Asset Purchase Agreement
and related documents have been transferred by Funder to Purchaser. Until notification by Funder to
Seller of the completion of the transfer to Purchaser, Seller shall follow the instructions from
Funder as to the matters that Purchaser has agreed to undertake. The assets of Seller which pertain
to Seller’s serial card business include, without limitation:

(a) The tangible personal property and assets of Seller, including without limitation
the property listed on Schedule 1.1 (a) to this Agreement, related to or used in
the Business (the “Assets”) as currently conducted and as currently proposed to be
conducted;

(b) All of Seller’s right, title and interest in, to and under any contract, purchase
order, license or other agreement to the ownership, manufacture and distribution of the
Assets as listed on Schedule 1.1 (b) to this Agreement (the “Seller
Contracts”) ;

(c) All of Seller’s right, title and interest in and to (i) all intangible assets of
Seller, including all Intellectual Property (as defined in Section 4.8(n) below) of the
Seller related to or used in connection with the Business as currently conducted or as
currently proposed to be conducted (collectively, the “Seller Owned Proprietary
Rights”), including all engineering drawings and specifications, data sheets and the
Intellectual Property described on Schedule 1.1(c) to this Agreement and
including without limitation all rights in and to use the name “Socket Serial” and the date
of first use of each such mark in each respective country where such mark is used (the
“Marks, (ii) the licenses, leases, assignments, rights to use and other agreements
for the license, lease and assignment of, or provision of the right to use Intellectual
Property of another person that is related to or used or useful in connection with the
Business as currently conducted or as currently proposed to be conducted, together with all
rights, privileges, prepaid fees, deposits, credits and claims of the Seller thereunder (collectively, the
“Seller Licensed Proprietary Rights Agreements”), including without limitation
those listed on Schedule 1.1(c)(ii) hereto, and (iii) all Intellectual Property
that the Seller has a right to use that is related to or used in connection with the
Business as currently conducted or as currently proposed to be conducted under the Seller
Licensed Proprietary Rights Agreements (collectively, the “Seller Licensed Proprietary
Rights” and together with the Seller Owned Proprietary Rights, the “Seller
Proprietary Rights”), including the Intellectual Property listed on Schedule
1.1(c)(iii) hereto.

 

1

 

(d) all of the Seller’s customer lists and other records, files, data, reports, lists,
ledgers, market studies, books and records used in or relating to the Business as currently
conducted or as currently proposed to be conducted (including such records as are contained
in any computer media).

1.2 Treatment of Liabilities.

(a) In connection with the sale of the Assets to Purchaser, Purchaser will assume only the
following liabilities of Seller (collectively, the “Assumed Liabilities”): those
obligations of Seller relating to the Assigned Contracts or breaches of any product warranties
offered in connection with the Assets arising out of sales of the Assets made by Purchaser from and
after the Closing in accordance with the terms thereof, but excluding any obligations arising as a
result of any breach, default or failure to perform by Seller under any Assigned Contract or
product warranties offered in connection with the Assets prior to the Closing except as described
in Schedule 1.2 relating to the assumption of warranty customer support by Purchaser .

(b) Except for the Assumed Liabilities, Purchaser will not assume, and will not be liable for,
any of Seller’s debts, liabilities, taxes, obligations, contracts or commitments of any nature or
kind whatsoever, whether existing as of the Closing or arising thereafter, known or unknown,
contingent or otherwise, including any payroll liabilities and obligations of Seller (the “Excluded
Liabilities”). All Excluded Liabilities will be solely those of Seller and will be satisfied by
Seller, and Purchaser shall have no liability under any circumstances.

1.3 Delivery of Assets.

(a) Within five (5) days from the Closing Date, Seller shall arrange for delivery, at
the sole expense of Seller, of the Assets listed in Article 1.1(c) to Purchaser at
Purchaser’s address specified in Section 7.3 of this Agreement. Electronic transfer may be
used as mutually agreed between the parties. Seller shall retain all risk of loss and
damage regarding the Assets until such time as the Assets are delivered to Purchaser
pursuant to this Section 1.3, at which time the risk of loss and damage to the Assets shall
pass to Purchaser.

(b) Seller shall retain and use the assets listed in Article 1.1 (a), consisting
primarily of on hand and consigned inventory components and tooling, during the month of
September to supply inventory to the Purchaser and to Distributors as described under
Article 1.5, Transition Services. Purchaser shall compile by October 15, 2009 a list of
inventory components as of the end of September for purchase by Purchaser at Seller’s cost. These dates may be modified by mutual agreement of the
parties. Inventory components to be purchased shall consist only of inventory deemed
useable by Purchaser in Purchaser’s sole discretion. Seller’s cost shall consist of
material, labor and overhead.

 

2

 

1.4 Supply and Licensing Agreement

Seller is also in the business or designing, manufacturing and selling HIS3 computer
chips (the “Chips”) which are a component used in the manufacturing of certain of
the Assets. The Chips are not included in the definition of “Assets” and are not included
in this sale. Seller and Purchaser will enter into a supply, support and limited licensing
agreement (the “Supply and Licensing Agreement”), in substantially the form
attached hereto as Schedule 1.4, pursuant to which Seller will, among other things,
continue to manufacture the Chips and sell them to Purchaser. Seller and Purchaser are also
entering into a Cordless Serial Adapter License to enable Purchaser to use Seller’s
Bluetooth software with the Cordless Serial Adapter Product. Such license is included in
the “Supply and Licensing Agreement, in substantially the form attached hereto as Exhibit
1.4.

1.5 Transition Services.

Seller and Purchaser agree that they shall enter into a transitional services arrangement
pursuant to the mutually agreed upon schedule and timeframe provided for on Schedule 1.5
hereto. Seller will provide Purchaser with those certain services listed on Schedule 1.5,
which shall include, among other things, providing Purchaser with warranty support training and
information, secondary customer support services and facilitating communications between Purchaser
and Seller’s distributors and manufacturers. Schedule 1.5 also provides for continued supply of
product by Seller to distributors and to Purchaser during September, for the accounting for
post-closing shipments by Seller on behalf of Purchaser to facilitate revenue recognition and
earnings by Purchaser for all post-closing shipments, and for the transfer of customer warranty
support in its entirety to Purchaser as of September 30, 2009.

2. PURCHASE PRICE

2.1 Purchase Price. 

The purchase price (the “Purchase Price”) for the Rights and Intangible and Tangible
Assets, excluding Finished Product and Component Inventory items, described in Articles 1.1 (a),
1.1 (b) and 1.1 (c) will be $500,000. $450,000 is payable in full, via wire transfer of immediately
available United States funds, at the Closing. The balance of $50,000 shall be payable upon the
attainment by Purchaser of $250,000 in quarterly sales revenue from the sale of SocketSerial
products in any quarter through and including the quarter ending December 31, 2010. The purchase
price for the Finished Product and Component inventory items described in Article 1.1 (a) will be
an amount equal to Seller’s cost of these assets, such cost to consist of material, labor and
overhead.

 

3

 

2.2 Allocation of Purchase Price. 

On the Closing Date, the Purchase Price for the Assets will be allocated in accordance with a
schedule to be prepared by Purchaser which will be reasonably acceptable to Seller (the
“Allocation”), which such Allocation shall be conclusive and binding on both the Purchaser
and Seller. The parties agree to file tax returns reflecting the sale and purchase consistent with
such schedule.

2.3 Transfer Taxes. 

Seller will be responsible for the payment of all transfer and sales taxes, if any, incurred
in connection with the sale of the Assets to Purchaser.

3. CLOSING

3.1 Date and Time. 

The closing of the transactions contemplated hereby (the “Closing”) shall take place
simultaneously with the execution and delivery of this Agreement. The date of the Closing is
hereinafter referred to as the “Closing Date.” The Closing shall be effective as of 4:00 p.m.
Pacific time (which shall be considered the Close of Business time) on the Closing Date.

3.2 Seller’s Deliveries. 

At the Closing, Seller will execute and deliver, or cause to be executed and delivered, to
Purchaser the following documents (collectively, the “Related Agreements”) or take, or
cause to be taken, the following actions:

(a) A Bill of Sale for the Assets (conveying title thereto free and clear of all
Encumbrances);

(b) An assignment of trademarks and proprietary rights agreement in the form attached
hereto as Exhibit 3.2(d);

(c) The Supply and Licensing Agreement;

(d) Copies of resolutions of the board of directors of Seller authorizing the
execution, delivery and performance of this Agreement and the other agreements contemplated
by this Agreement and consummation of the transactions contemplated by thereby, which
resolutions have been certified by the Secretary of Seller as being valid and in full force
and effect;

(e) Those consents set forth on Schedule 4.3 hereto;

 

4

 

(f) All Encumbrances on the Assets shall be satisfied in full on or prior to Closing
(or simultaneously therewith) and Seller shall have provided Purchaser with evidence of
such satisfaction which is satisfactory to Purchaser; and

(g) Such other documents and certificates as are required by the terms of this
Agreement or as may be reasonably requested by Purchaser.

3.3 Purchaser Deliveries. 

At the Closing, Funder and Purchaser will:

	 	(a)	 	pay to Seller the Purchase Price;

	 
	 	(b)	 	execute and deliver to Seller the Asset Purchase Agreement;

	 
	 	(c)	 	deliver the Allocation pursuant to Section 2.2; and

	 
	 	(d)	 	execute and deliver to Seller the Supply and Licensing Agreement.

3.4 Inventory.

(a) On or before the Closing, Purchaser may elect, at its sole discretion, to issue
one or more purchase orders (the “Purchase Orders,” and each a “Purchase
Order”) for delivery to Purchaser in September selected finished goods inventory
(“Inventory”) of Seller, at a purchase price equal to Seller’s cost of producing such
finished goods inventory. Upon receipt of a Purchase Order, Seller shall be obligated to
sell and deliver such Inventory to Purchaser on the terms set forth in this Article and in
Article 1.5.

(b) Any Inventory purchased under a Purchase Order shall be subject to all of the
terms and conditions of this Agreement including, but not limited to, the representations
and warranties set forth in Article 4 hereof and the Seller’s indemnification obligations
set forth in Article 6 hereof.

4. REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller hereby represents and warrants to, and covenants and agrees with, Purchaser that as
of the date hereof:

4.1 Organization of Seller; Authorizations. 

Seller is a corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Seller has all requisite corporate power and authority to own or lease
and operate its properties and to carry on its business as currently conducted and as proposed to
be conducted and is qualified or licensed to do business and is in good standing in every
jurisdiction where the nature of its business or the properties owned, leased or operated by
it requires qualification or licensure, except where the failure to be so qualified or
licensed would not have a material adverse effect on Seller or the operations of Seller.

 

5

 

4.2 Requisite Power and Authority. 

Seller has all requisite corporate authority and power to execute and deliver this Agreement
and to perform all transactions contemplated by this Agreement (the “Transactions”). The
execution, delivery and performance by Seller of this Agreement have been duly authorized and
approved by all necessary corporate action. Assuming the due authorization, execution and delivery
by Purchaser, this Agreement constitutes a valid and binding agreement of Seller, enforceable
against Seller in accordance with its terms, except as the enforceability of its terms may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforceability of creditors’ rights generally or by the principles governing the availability
of equitable remedies.

4.3 Seller’s Requisite Consents; Nonviolation. 

The execution and delivery of this Agreement and the consummation of the Transactions by
Seller do not and will not, except as set forth on Schedule 4.3 to this Agreement, (a)
require the consent, license, permit, waiver, approval, authorization or other action of, by or
with respect to, any person or entity (whether governmental or non-governmental), (b) violate or
conflict with the provisions of the Articles of Incorporation or Bylaws, or other charter
documents, of Seller, (c) constitute a default under, violate, conflict with, or result in the
termination of, any Assigned Contract, agreement, judgment, order, injunction or decree to which
Seller is a party, or by which Seller is bound or to which Seller, or any of its properties is
subject, (d) conflict with or violate any law, rule or regulation of any Governmental Entity (as
defined below in Section 4.16(a)) having jurisdiction over Seller or any of its assets or
properties, or (e) result in the creation or imposition of any Encumbrance on the Assets or in any
person (other than Purchaser) obtaining the right to acquire any of the properties, rights or
assets of Seller.

4.4 No Undisclosed Liabilities. 

Seller does not have any liability, commitment, obligation, loan or indebtedness of any nature
whatsoever, whether as primary obligor, guarantor, surety or otherwise, whether known or unknown,
whether accrued, absolute, contingent or otherwise, and whether due or to become due relating to
the Business as currently conducted or as currently proposed to be conducted, the Assets or the
Assumed Liabilities except as set forth on Schedule 4.4.

4.5 Title to Assets. 

Seller has good, valid, exclusive and marketable title to the Assets, free and clear of all
Encumbrances, and will transfer to Purchaser at the Closing good, valid, exclusive and marketable
title to the Assets, free and clear of any Encumbrances.

 

6

 

4.6 Assigned Contract Rights. 

The Assigned Contract Rights constitute all of the material contract or agreement rights to
which Seller is a party that relate to, or are used in, the Business. Each of the Assigned Contract rights is valid, in full force and effect and enforceable in accordance with its
terms. There has not occurred any default or any event which, with notice or lapse of time or
both, would become a default under any of the Assigned Contracts resulting from any act or omission
by Seller or any act or omission of any other party thereto prior to the Closing Date, nor (ii) has
there been a claim of any breach or default under any of the Assigned Contracts by Seller or by any
other party thereto. Within the last twelve months, the Seller has not received any written notice
that any person is canceling, modifying or terminating, and to the knowledge of the Seller, no
person intends to cancel, modify, or terminate, any of the Assigned Contracts, or to exercise or
not to exercise any option thereunder. True and complete copies of all Assigned Contract rights,
including all related amendments, supplements and modifications, have been provided to Purchaser.

4.7 Litigation. 

There is no pending or, to the knowledge of the Seller, threatened, litigation or judicial,
administrative or arbitration claim, action or proceeding nor are there any judgments, orders,
writs, injunctions or decrees currently in effect and involving or affecting any Asset or the
Business.

4.8 Intellectual Property.

(a) Schedule 4.8(a) sets forth a complete and accurate list of (i) all Seller
Proprietary Rights, including all such Intellectual Property owned, licensed or used by the
Seller, all applications therefor, and all licenses, assignments and other agreements
relating thereto to which the Seller is a party, and with respect to any mark, the date of
first use of such mark in each respective country where such mark is used, and (ii) all
Seller Licensed Proprietary Rights, including agreements relating to technology, know-how
and processes with respect to such Intellectual Property that the Seller has licensed for
its use or authorized for use by others.

(b) The Seller Proprietary Rights constitute all of the Intellectual Property related
to, used in connection with, or useful or necessary for (x) the manufacture, use, sale,
marketing, distribution, import and export of the Assets and Products of the Business, and
(y) the conduct of the Business as currently conducted or as currently contemplated by the
Seller to be conducted.

(c) The conduct of the Business as currently conducted or as currently contemplated by
the Seller to be conducted does not and will not interfere with, conflict with, infringe
upon, misappropriate or otherwise violate the Intellectual Property rights of any other
person, and no action or claim has been asserted or is pending or is threatened alleging
that the operation of such Business interferes with, conflicts with, infringes upon,
misappropriates or otherwise violates the Intellectual Property rights of any other person
and there is no basis therefor. After the Closing, Purchaser shall be able to manufacture,
use, market, distribute, sell, import and export the Assets and conduct the Business as
currently conducted or as currently contemplated by the Seller to be conducted without
interfering with, conflicting with, infringing upon, misappropriating or otherwise violating the Intellectual Property rights of any other
person.

 

7

 

(d) The Seller is the sole owner of the entire right, title and interest in and to, or
has a valid exclusive license or other sufficient exclusive legal right under, the Seller
Proprietary Rights.

(e) There are no outstanding options, licenses, Encumbrances or agreements of any kind
relating to the Seller Proprietary Rights, nor is the Seller bound by or a party to any
options, licenses, Encumbrances or agreements of any kind with respect to the Intellectual
Property of any other person relating to or used in connection with the Business.

(f) The Seller Proprietary Rights are valid and enforceable, and the same have not
been adjudged invalid or unenforceable in whole or in part. The Seller has complied with
all of its obligations of confidentiality in respect of the claimed trade secrets or
proprietary information of others with respect to the Business and there are no violations
of such obligations of confidentiality as are owed to them with respect to the Business.

(g) No claims or actions have been asserted, are pending or threatened against the
Seller (i) based upon or challenging or seeking to deny or restrict the exclusive ownership
by, inventorship of, or exclusive use or license rights of the Seller of any of the Seller
Proprietary Rights, (ii) alleging that (x) the Seller Proprietary Rights, (y) the
development, manufacture, distribution, marketing, use or sale of the products of the
Business, or (z) any services provided, processed or used by the Seller relating to or used
in connection with the Business, infringe or misappropriate any Intellectual Property right
of any third party, or (iii) alleging that the Seller Licensed Proprietary Rights are being
licensed or sublicensed in conflict with the terms of any license or other agreement, and
there is no basis for such a claim with respect to any of the foregoing.

(h) No person is engaging in any activity that infringes or misappropriates the Seller
Proprietary Rights. The Seller has not granted any license or other right to any third
party with respect to the Seller Proprietary Rights. The execution and delivery by the
Seller of this Agreement and the Related Agreements, the performance by the Seller of its
obligations hereunder or thereunder, and the consummation of the transactions contemplated
hereby and thereby will not breach, violate or conflict with any instrument or agreement
concerning the Seller Proprietary Rights, will not cause the forfeiture or termination or
give rise to a right of forfeiture or termination of any of the Seller Proprietary Rights
or impair the right of Purchaser or any of its affiliates to license or dispose of, or to
bring any action for the infringement of, any Seller Proprietary Rights.

 

8

 

(i) The Seller has delivered to Purchaser correct and complete copies of all licenses
of the Seller Licensed Proprietary Rights, other than licenses of commercial off-the-shelf
computer software. With respect to each such license:

(i) such license is valid and binding and in full force and effect and
represents the entire agreement between the respective licensor and licensee with
respect to the subject matter of such license;

(ii) such license will not cease to be valid and binding and in full force and
effect on terms identical in all material respects to those currently in effect as a
result of the consummation of the transactions contemplated by this Agreement, nor
will the consummation of the transactions contemplated by this Agreement constitute
a breach or default under such license or otherwise so as to give the licensor or
any other person a right to terminate such license;

(iii) the Seller has not (A) received any notice of termination or cancellation
under such license, (B) received any notice of breach or default under such license,
which breach has not been cured, or (C) granted to any other person any rights,
adverse or otherwise, under such license that would constitute a breach of such
license;

(iv) neither the Seller nor any other party to such license is in breach or
default thereof, and no event has occurred that, with notice or lapse of time, would
constitute such a breach or default or permit termination, modification or
acceleration under such license; and

(v) no consent, approval, permit, order or authorization of, or registration,
qualification, designation, declaration or filing with, any Governmental Entity or
other person is necessary in order for such license to remain in full force and
effect following the consummation of the transactions contemplated by this Agreement
and the Related Agreements.

(j) None of the Seller’s employees, officers, directors, agents or consultants is (i)
subject to confidentiality restrictions in favor of any third person the breach of which
with respect to the Business could subject the Seller to any liability, or (ii) obligated
under any contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with their duties to the Seller or that would conflict with
the Business as currently conducted or currently proposed to be conducted. Each employee
and officer of and consultant to the Seller that has performed services with respect to the
Business has executed a proprietary information and inventions agreement of the Seller
substantially similar to the form delivered by Seller to Purchaser as of the date hereof.
No current or former employee or officer of or consultant to the Seller has excluded works
or inventions made prior to his or her employment or relationship with the Seller from his
or her assignment of inventions pursuant to such employee’s, officer’s or consultant’s
proprietary information and inventions agreement in any way relating to the Business or
that could reasonably be expected to affect the Seller Proprietary Rights.

 

9

 

(k) The Seller has taken reasonable steps in accordance with normal industry practice
to maintain the confidentiality of its trade secrets and other confidential Intellectual Property. There has been no misappropriation of any trade secrets or
other confidential Seller Proprietary Rights by any person. No employee, independent
contractor or agent of the Seller has misappropriated any trade secrets of any other person
in the course of such performance as an employee, independent contractor or agent with
respect to the Business. No employee, independent contractor or agent of the Seller is in
default or breach of any term of any employment agreement, non-disclosure agreement,
assignment of inventions agreement or similar agreement or contract relating in any way to
the protection, ownership, development, use or transfer of Seller Proprietary Rights.

(l) Neither the execution nor delivery of this Agreement or the Related Agreements,
nor the manufacturing, use, sale, marketing, distribution, import or export of the Assets
or products of the Business, nor the carrying on of the Business by the employees of and
consultants to the Seller, nor the conduct of the Business as presently conducted or as
proposed to be conducted by the Seller, will conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract, covenant
or instrument under which any of such employees is now obligated. Except to the extent
already assigned to the Seller, the Seller does not believe that it is or will be necessary
to utilize any inventions or proprietary information of any of its employees or consultants
(or people it currently intends to hire) made prior to their employment by the Seller in
order to manufacture, use or sell the Assets or Seller Proprietary Rights.

(m) The Seller has not (i) abandoned, sold, or granted any security interest in or to
any Seller Proprietary Rights, including failing to perform or cause to be performed all
applicable filings, recordings and other acts, and pay or cause to be paid all required
fees, royalties and taxes, to maintain and protect its interest in such Seller Proprietary
Rights, (ii) developed, created or invented any Seller Proprietary Rights jointly with any
third party with respect to which the Seller would not retain full ownership in such Seller
Proprietary Rights, or (iii) disclosed, or allowed to be disclosed, any confidential Seller
Proprietary Rights, unless such Seller Proprietary Rights are subject to a confidentiality
and non-disclosure covenant protecting against disclosure thereof.

(n) For the purposes of this Agreement “Intellectual Property” means
intellectual property or proprietary rights of any description related to or used or useful
in connection with the Assets or the Business, including (a) rights in any patent, patent
registration, patent application (including any provisionals, continuations, divisions,
continuations-in-part, extensions, renewals, reissues, revivals and reexaminations, any
national phase PCT applications, any PCT international applications, and all foreign
counterparts, including utility models and utility model applications), copyright, work for
hire, industrial design, URL, domain name, trademark, service mark, logo, trade dress or
trade name, (b) related registrations and applications for registration, (c) trade secrets,
moral rights, shop rights or publicity rights, (d) inventions, discoveries, or
improvements, modification, know-how, technique, methodology, writing, work of authorship,
design or data, whether or not patented, patentable, copyrightable or reduced to practice,
including any inventions, discoveries, improvements, modification, know- how, technique, methodology, writing, work of authorship, design or data embodied or
disclosed in any: (i) computer source codes (human readable format) and object codes
(machine readable format); (ii) specifications; (iii) manufacturing, assembly, test,
installation, service and inspection instructions and procedures; (iv) engineering,
programming, service and maintenance notes and logs; (v) technical, operating and service
and maintenance manuals and data; (vi) hardware reference manuals; and (vii) user
documentation, help files or training materials, and (e) good will related to any of the
foregoing.

 

10

 

4.9 Compliance with Laws.

Seller is in compliance with all material federal, state, local, municipal and foreign laws,
rules, regulations, statutes and ordinances applicable to Seller relating to the Business or any of
the Assets.

4.10 Tangible Assets. 

All tangible Assets of Seller are in good repair and good operating condition, ordinary wear
and tear excepted, and are adequate and sufficient to carry on the Business as presently conducted.

4.11 Inventory. 

Any Inventory which will be sold to Purchaser pursuant to the Purchase Orders is merchantable,
actively being purchased by Seller’s customers as of the Closing Date and fit for the purpose for
which it was procured or manufactured. As of the Closing Date, none of the Seller’s finished goods
Inventory is slow moving, and none of Seller’s Inventory is obsolete, in packaging that is not
being used by Seller and its customers, in packaging that is scheduled to be replaced or
discontinued, a product that has been, or is scheduled to be or is contemplated to be discontinued,
phased out or replaced. None of the Inventory is damaged or defective. Exceptions to this Article
are listed in Schedule 4.11.

5. OTHER COVENANTS

5.1 Expenses. 

Each party will bear its own fees and expenses related to this transaction (including legal,
accounting or other professional fees and expenses), whether or not the transaction is consummated.

5.2 Books and Records.

Following the Closing Date and for a period of five (5) years thereafter, Seller will maintain
all books and records and tax statements and returns relating solely to the Business and will
provide copies thereof to Purchaser promptly upon request.

 

11

 

5.3 Bulk Transfer Laws.

The parties do not believe that any laws relating to bulk sales or bulk transfers (including
any such laws under the Uniform Commercial Code) are applicable to any of the Transactions.
Notwithstanding the foregoing, and in order to induce Purchaser to execute this Agreement and
consummate the Transactions, Seller will indemnify and defend Purchaser and its affiliates and hold
them harmless (in accordance with Section 6.1 below) from and against any claim or other expense
arising out of, resulting from or relating to, any determination of the applicability to any of the
Transactions of, or failure to comply with in connection with any of the Transactions, any of such
laws.

5.4 Confidentiality.

From and after the Closing Date, the Seller will keep confidential and will not directly or
indirectly disseminate, disclose, use, communicate, divulge or otherwise appropriate any of the
Confidential Information (as defined below). From and after the Closing Date, the Seller will take
all steps necessary or requested by Purchaser to ensure that all of the Confidential Information is
kept secret and confidential for the sole use and benefit of Purchaser. All Confidential
Information will be the exclusive property of Purchaser, and Seller will promptly deliver to
Purchaser all Confidential Information, including all copies thereof, which is in Seller’s
possession or under Seller’s control, without making or retaining any copies or extracts thereof.
As used in this Agreement, “Confidential Information” means and includes all information,
whether now possessed or subsequently obtained or developed, relating to the business of Purchaser
or the business of the Seller as conducted prior to Closing, except for information that otherwise
is publicly known.

5.5 Publicity.

None of the parties hereto will issue any press release or other information to the press or
any third party with respect to the terms of this Agreement or the consummation of the Transaction
without the express written consent of the other parties, provided, however, that
the parties may release information contained in, or relating to, this Agreement or the
consummation of the Transaction pursuant to a requirement of law, court proceeding or governmental
decree.

5.6 Discontinuation of Operations.

Other than Seller’s fulfillment of its obligations pursuant to the Transitional Services
Agreement, Seller agrees that it will discontinue all operations of any kind whatsoever related to
the Business, including the design, manufacture, distribution and sales of the Assets, pursuant to
the mutually agreed upon schedule with Purchaser specified in the Transitional Services Agreement.

 

12

 

5.7 Non-competition.

The Seller agrees that for a period of three (3) years after the date hereof, it will not:

(a) invest in, own, manage, operate, finance, control, advise, render services to or
guarantee the obligations of any person or entity engaged in the Business or the design, manufacture, distribution or sales of products similar to the Assets or the
Products, anywhere in the United States.;

(b) Directly or indirectly contact any customer of the Business or any customer of
Purchaser for the purpose of soliciting such customer to purchase, lease or license a
product or service that would be in competition with those products or services made,
rendered, offered or under development by the Purchaser; or

(c) Directly or indirectly interfere with or attempt to disrupt the relationship,
contractual or otherwise, between the Purchaser and any of its employees or solicit an
employee of the Purchaser to terminate employment with the Purchaser and become
self-employed or employed with others in the same or similar business.

The existence of any claim, dispute, or cause of action of the Seller against the Purchaser,
whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement
by the Purchaser of this covenant.

5.8 Remedies

Seller acknowledges and agrees that its respective obligations under Sections 5.4, 5.5, 5.6
and 5.7 above are of a special, unique and extraordinary character, that they are reasonably
related to the legitimate business interests of Purchaser, and that a failure to perform any such
obligation or a violation of such obligations will cause irreparable injury to Purchaser, the
amount of which would be impossible to estimate or determine and for which adequate compensation
could not be fashioned. Therefore, Seller agrees that Purchaser will be entitled, as a matter of
right, and without the need to prove irreparable injury or to post bond, to an injunction,
restraining order, writ of mandamus or other equitable relief (including specific performance) from
any court of competent jurisdiction, restraining any violation or threatened violation of any term
of such Sections 5.4, 5.5, 5.6 or 5.7 or requiring compliance with or performance of any obligation
thereunder, by Seller and such other persons as the court will order. The rights and remedies
provided Purchaser hereunder are cumulative and will be in addition to the rights and remedies
otherwise available to Purchaser under any other agreement or applicable law.

5.9 Insurance and Access.

(a) Seller agrees to cooperate with Purchaser, as may be reasonably necessary, in order to
make available to Purchaser any existing insurance coverage held by Seller on which Seller is a
named insured relating to occurrences prior to Closing (the “Seller Policies”). In the
event of an occurrence which Purchaser believes may be covered by one or more Seller Policies,
Purchaser shall, after consultation with Seller, submit a claim for such occurrence to the
appropriate insurer under the applicable Seller Policy. Seller agrees to provide such reasonable
assistance as Purchaser may require in order to pursue such claim with the insurer, including, if
necessary, acting as the direct contact for all purposes with such insurer and pursuing such claim
on behalf of Purchaser.

 

13

 

(b) Seller shall for a period of five years after the Closing Date, during normal business
hours and upon not less than three business days written notice, provide Purchaser and its representatives with such access to the books and records of Seller as may be reasonably
requested by Purchaser, who shall be entitled, at its expense, to copy such books and records.
Seller shall not, during such five-year period, destroy or cause or permit to be destroyed any
books or records without first obtaining the consent of Purchaser (or providing to Purchaser notice
of such intent and a reasonable opportunity to copy such books or records at least 30 days prior to
such destruction).

5.10 Litigation Support. 

If and for so long as Purchaser or Seller are actively contesting or defending against any
action in connection with any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction which occurred prior to
the Closing Date involving the Seller, Seller shall cooperate with Purchaser or Purchaser’s counsel
in the defense or contest, make available their personnel on a mutually convenient basis and
provide such testimony and reasonable access to Seller’s books and records as shall be reasonably
necessary in connection with the defense or contest.

5.11 Post Closing Accounts Receivable.

Purchaser and Seller acknowledge and agree that in the event that one party receives (the
“Receiving Party”) payment with respect to an outstanding account receivable (the “AR
Amount”) that was intended as payment for the other party (the “Proper Party”), the
Receiving Party shall promptly, but in no event later than five (5) business days after receipt of
the AR Amount, issue payment for the full AR Amount to the Proper Party.

5.12  Product Returns.

Seller acknowledges and agrees that it will be solely responsible for any and all returns,
offsets, discounts, credits, contractual allowances, setoffs or any other reduction in price
(collectively, the “Returns”) from a third party related to the sale of any of the Assets
prior to the Closing Date. Upon receipt of any Returns, Purchaser shall provide Seller with a
reasonably detailed list outlining all Returns by customer and setting forth an aggregate dollar
amount of the Returns (the “Returns Notice”). Seller acknowledges that in the event that
Purchaser is subject to any Returns and once Purchaser has delivered a Returns Notice, Purchaser
shall be entitled to make a claim for Losses pursuant to Article 6 below.

 

14

 

6. INDEMNIFICATION

6.1 Indemnification by the Seller. 

Without limiting any other rights or remedies available to Purchaser, the Seller will
indemnify, defend and hold harmless Purchaser and its affiliates and their respective officers,
directors, members, managers, employees and shareholders from (collectively, “Affiliates”),
against and with respect to any claim, liability, obligation, loss, damage, assessment, judgment,
settlement, cost and expense (including costs attributable to the loss of the use of funds to the
date on which the indemnification payment is made hereunder, reasonable attorneys’ and accountants’
fees, and costs and expenses reasonably incurred in investigating, preparing, defending against or
prosecuting any litigation or claim, action, suit, proceeding or demand), of
any kind or character (collectively, the “Losses”) arising out of or in any manner
incident, relating or attributable to:

(a) any inaccuracy or breach in any representation or breach of any warranty of Seller
contained in this Agreement, in any of the Related Agreements or in any certificate,
instrument of transfer or other document or agreement executed by Seller in connection with
this Agreement;

(b) any failure by Seller to perform or observe any covenant or agreement to be
performed or observed by it or on its behalf under this Agreement, in any of the Related
Agreements or under any certificates or other documents or agreements executed by Seller in
connection with this Agreement;

(c) all Excluded Liabilities;

(d) any claim, allegation or assertion that the development, manufacture, marketing,
distribution or sale of any Asset or product in the Business product line by Seller on or
prior to the Closing Date that allegedly or actually infringes, violates or misappropriates
any Intellectual Property or other proprietary rights of such third party; and

(e) all Returns.

6.2 Indemnification by the Purchaser. 

Without limiting any other rights or remedies available to Seller, the Purchaser will
indemnify, defend and hold harmless Seller and its Affiliates from, against and with respect to any
Losses arising out of or in any manner incident, relating or attributable to:

(a) any inaccuracy or breach in any representation or breach of any warranty of
Purchaser contained in this Agreement, in any of the Related Agreements or in any
certificate, instrument of transfer or other document or agreement executed by Purchaser in
connection with this Agreement;

(b) any failure by Purchaser to perform or observe any covenant or agreement to be
performed or observed by it or on its behalf under this Agreement, in any of the Related
Agreements or under any certificates or other documents or agreements executed by Seller in
connection with this Agreement;

(c) all Assumed Liabilities; and

(d) any claim, allegation or assertion that the development, manufacture, marketing,
distribution or sale of any Asset or product in the Business product line by Seller prior
to the Closing Date that allegedly or actually infringes, violates or misappropriates any
Intellectual Property or other proprietary rights of such third party.

 

15

 

7. MISCELLANEOUS

7.1 No Waiver. 

No waiver of any breach of any agreement or provision herein contained will be deemed a waiver
of any preceding or succeeding breach thereof or of any other agreement or provision herein
contained. No extension of time for performance of any obligations or acts will be deemed an
extension of the time for performance of any other obligations or acts.

7.2 Successors and Assigns. 

This Agreement will bind and inure to the benefit of the parties hereto and their successors
and assigns. Purchaser may, without the consent of Seller, assign its rights and obligations under
this Agreement to a third party.

7.3 Notices. 

Any notice required or permitted to be given hereunder pursuant to this Agreement will be sent
by certified or registered mail, postage prepaid, as follows:

	 	 	 	 	 
	 

	 	To Purchaser:
	 	Quatech Inc.
	 

	 	 	 	5675 Hudson Industrial Park
	 

	 	 	 	Hudson, Ohio 44236
	 

	 	 	 	Attn: Steven D. Runkel
	 

	 	 	 	Telephone: (330) 655-9000
	 
	 	 	 	 
	 

	 	With a copy (not constituting notice)
to:
	 	Buchanan Ingersoll & Rooney PC

One Oxford Centre
	 

	 	 	 	301 Grant St., 20th Floor
	 

	 	 	 	Pittsburgh, PA 15219
	 

	 	 	 	Attn: Perry S. Patterson, Esq.
	 

	 	 	 	Telephone: 412-562-8445
	 

	 	 	 	Facsimile: 412-562-1041
	 
	 

	 	To Seller:
	 	Socket Mobile, Inc.
	 

	 	 	 	39700 Eureka Drive
	 

	 	 	 	Newark, CA 94560
	 

	 	 	 	Attn: Kevin Mills
	 

	 	 	 	Telephone: (510) 933-3111
	 

	 	 	 	Facsimile: (510) 933-3104

7.4 Survival of Obligations. 

Except as otherwise provided herein or therein, the provisions of this Agreement and of any
other document delivered hereunder will continue and will survive for eighteen (18) months
following the execution and delivery of this Agreement and consummation of the Transactions.
Notwithstanding the foregoing, (i) the covenants, representations, warranties set forth in
Article 4 above which are breached as a result of fraud and/or willful or intentional breaches
shall survive indefinitely and shall not expire and (ii) Purchaser’s rights and Seller’s
obligations under Sections 5.10, 5.11, 5.12 and 5.13 shall survive indefinitely and shall not
expire.

 

16

 

7.5 Complete Agreement. 

This Agreement, the Related Agreements, and the exhibits and schedules hereto and thereto
contain the complete agreement of the parties with respect to the purchase and sale of the Assets
and the Inventory, and no representations made by any party may be relied on unless set forth
herein, therein or in such exhibits or schedules hereto or thereto. This Agreement may be altered
or amended only by an instrument in writing, duly executed by all of the parties hereto.

7.6 Applicable Law; Jurisdiction. 

All questions concerning the construction, validity and interpretation of this Agreement will
be governed by and construed in accordance with the domestic laws of the State of Ohio, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of
Ohio or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Ohio. Any lawsuit arising out of or in any way related to this Agreement
to the parties’ relationship hereunder shall be brought only in those state or federal courts
having jurisdiction over actions arising in the State of Ohio.

7.7 Counterparts. 

This Agreement may be signed in any number of counterparts, with the same effect as if all
signatures were upon the same instrument.

7.8 Further Assurances. 

Each party covenants that at any time, and from time to time, before or after the Closing
Date, it will execute such additional instruments and take such actions as may be reasonably
requested by the other party to carry out the intent and purposes of this Agreement.

[The remainder of this page has been intentionally left blank]

 

17

 

IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement as of the
day and year first above written.

	 	 	 	 	 
	 	Quatech Inc.

 	 
	 	By:  	/s/ Steven D. Runkel
 	 
	 	 	Steven D. Runkel, President 	 

	 	 	 	 	 
	 	Socket Mobile, Inc.

 	 
	 	By:  	/s/ Kevin J. Mills
 	 
	 	 	Kevin J. Mills, President and CEO 	 

	 	 	 	 	 
	 	Development Capital Ventures, LP

 	 
	 	By:  	/s/ Donald L. Murfin
 	 
	 	 	Donald L. Murfin, Executive Vice President, 	 
	 	 	DCC Operating, Inc. General Partner 	 

 

18

 

Schedule 1.1(a)

Assets

The Assets included in this sale are Seller’s entire stock and inventory of (including new Products
returned from Seller’s distributors whose distributor rights have been cancelled), and all of its
rights, title and interest in and to, the following:

	 	 	 
	“Products”
	 	 
	CF Serial Card

	 	Removable cable and ruggedized (fixed cable)
	PC Serial Card

	 	Removable cable and ruggedized (fixed cable)
	PC Dual Serial Card

	 	Removable cable and ruggedized (fixed cable)
	PC Quad Serial Card

	 	Removable cable and ruggedized (fixed cable)
	USB to Serial Adapter
	 	 

USB to Ethernet Adapter

“Other assets”

Tooling owned by Seller used in the manufacture of the Products;

Product accessories and components (with the exception of the Chips and Chip Specifications);

All serial driver software and the source code and related documentation therefor; and

All engineering drawings, specifications and data sheets for the Products.

“Socket Serial” website

All planning materials for a BC04 Bluetooth Cordless Serial Adapter “as is”.

Excel files containing:

	 	•	 	Registered serial product user information from Purchaser’s registration data base

	 	•	 	Customer service history information from Purchaser’s customer service data base

	 	•	 	Information identifying members of Purchaser’s Customer Advisory Board

 

19

 

Schedule 1.1(b)

Changes relating to Seller’s Contracts

Distributor Agreements: Seller agrees that commencing with the date of closing of this Agreement,
Seller will advise each of its distributors of the sale of the serial business and the continuation
of the serial business by Purchaser. In addition, Seller shall provide each distributor with a
notice of discontinuation of the serial product assets by Seller and the availability of the serial
product assets from Purchaser, all in accordance with the transition steps described in Schedule
1.5.

Supplier Agreements: Seller agrees that commencing with the date of closing of this Agreement,
Seller will advise each supplier of its serial product components of the sale of the serial
business and the continuation of the serial business by Purchaser. Seller shall also advise each
supplier of the transfer of ownership of any serial product tooling and intellectual property used
or held by supplier.

 

20

 

Schedule 1.1(c)

Intangible Assets

Exclusive use of the name “Socket Serial” and related TM trademarks

 

21

 

Schedule 1.2

Assumed Liabilities

Seller warrants its serial products to perform in accordance with product specifications for a
period of one year. Such warranty includes a number of exclusions including abuse or intentional
damage, use in an unintended manner or environment and incompatibility. Seller’s remedies are to
repair or replace the product.

Seller and Purchaser intend to transfer customer support responsibilities from Seller to Purchaser
and Purchaser will honor Seller’s warranty commitments. Purchaser shall charge Seller and Seller
shall reimburse purchaser for the cost of warranty support for serial products sold by Seller prior
to the closing date of the Purchase.

 

22

 

Exhibit 1.4

Supply and Licensing Agreement

[To be inserted]

 

23

 

Schedule 1.5

Transition Services

Seller and Purchaser wish to insure a smooth transition from seller to buyer without disruption of
product flow or support to customers. Following is a general outline of the intent of the parties
in achieving such transition.

Timely notification of suppliers and customers. Seller and Purchaser shall notify suppliers and
customers of the sale/purchase of the serial product line and cooperate in enabling suppliers and
distributors to establish relationships with Purchaser.

Transfer of finished goods. Purchaser may order finished goods from Seller for delivery during
September while supplier arrangements are being activated. Such goods shall be transferred at
Socket cost.

Post-closing support of distributors. Seller’s distributors generally have 30 days from the date
of notification (first item above) to continue to obtain product from Seller and to return product
to Seller. Seller will continue to supply distributors post closing as an agent for Purchaser and
shall supply Purchaser with detailed information of products shipped by customer. All shipments
post closing shall be to the benefit of Purchaser including recognition of the revenue. The margin
(revenue less product cost) shall be paid by Seller to Purchaser as agreed between the parties.

Inventories on hand consist of finished goods, useable components. Inventories are also consigned
to various suppliers. Seller shall continue to use these inventories to build product for or on
behalf of Purchaser. On completion of this transition (expected around the end of September), a
detail listing of inventories on hand and consigned inventories shall be prepared by seller for
transfer to Purchaser at seller’s cost. The determination of useable inventories shall be at the
sole discretion of Purchaser.

Customer warranty support shall be continued by Seller until transitioned to Purchaser as described
in Schedule 1.2. Such transition is expected to occur approximately one month after closing.

 

24

 

Schedule 4.3

Consents

Approval to close the transaction from Seller’s Board of Directors

Approval to sell the assets from Seller’s bank, Silicon Valley Bank. Seller’s bank line of credit
is secured by all assets of Seller and sale of assets other than in the ordinary course of business
requires the approval of the Bank.

 

25

 

Schedule 4.11

Inventory

Cordless Serial Adapter (CSA)

The Cordless Serial Adapter (CSA) includes a BC02 Bluetooth module that has been given end of life
status due to the discontinuation of the manufacture of the BC02 chip by its manufacturer. Seller
has approximately 1,700 CSA products manufactured and has approximately 2,100 BC02 modules that can
be used to manufacture an additional 2,100 CSA products. Purchaser is acquiring the 1,700 CSA
products by March 31, 2009 and will advise Seller by October 31, 2009 as to what number of BC02
modules will be acquired to enable additional CSA units to be manufactured.

CompactFlash Rugged IO (CF+RIO)

The 15 pin internal connector used on the CF+RIO is EOL. Socket is currently working with a final
2K quantity from our supplier and do not have an alternative connector available. Socket’s going
forward plan would be to re-layout the PCB to physically fit into another one of Socket’s CF cases
and adjust the over-mold design on the end of the cable to work with the adjusted configuration.
This is not considered a major effort, but should get started this quarter to prevent any
interruption in the overall channel supply based on current inventory. The overall effort will take
a few weeks. Adjusted design with case would still be ordered from our current supplier. The change
will warrant updates to the physical properties listed on data sheets and documentation images, as
well as web site images.

Removable Serial Cables

The 15 pin connector used on the Removable Serial Cables (PN 8100-00016) has just gone EoL. This
has just been confirmed by our supplier. Socket has been anticipating this and already as some new
sample prototypes being built using a standard Honda 15 pin connector which can be procured from
market sources. Socket is having these samples delivered for review and approval. Socket will
provide an update after review and approval of the connector samples being received from our Taiwan
supplier.

 

26

 

Schedule 4.4

Undisclosed liabilities

All of Seller’s assets are pledged as collateral against the bank line of credit with Silicon
Valley Bank. Bank approval of the sale of the serial business is required to consummate the sale.

 

27

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