ASSET PURCHASE AGREEMENT

EXHIBIT 10.1

     

ASSET PURCHASE AGREEMENT

between

SKYGUARD, LLC

and

BELL INDUSTRIES, INC.

Dated as of February 14, 2008

     

TABLE OF CONTENTS

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

TABLE OF CONTENTS
(continued)

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

TABLE OF CONTENTS
(continued)

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

TABLE OF CONTENTS
(continued)

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

ASSET PURCHASE AGREEMENT

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

W I T N E S S E T H:

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

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

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

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

ARTICLE I

DEFINITIONS

     1.1 Certain Definitions .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     1.3 Other Definitional and Interpretive Matters .

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (a) Liabilities of Seller under the Purchased Contracts;

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

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

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

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

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

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

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

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

     2.5 Consent of Third Parties .

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

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

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

     2.7 Purchase Price Allocation .

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

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

     2.8 Allocation of Taxes and Expenses .

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

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

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

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

ARTICLE III

CONSIDERATION

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

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

ARTICLE IV

CLOSING

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

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

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller hereby represents and warrants to Purchaser that:

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

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

     5.3 Conflicts; Consents of Third Parties; Subsidiaries .

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

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

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

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

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

     5.5 Title to Purchased Assets .

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

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

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

     5.6 Compliance with Laws; Permits .

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

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

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

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

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

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

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

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

     5.9 Intellectual Property .

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

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

        &n