ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into on
April 5, 1999, by and between Telenetics Corporation, a California corporation
(the "Buyer"), and Greenland Corporation, a Nevada corporation (the "Seller").
This Agreement contemplates a transaction in which the Buyer will purchase
certain assets and assume certain contracts from the Seller in return for the
consideration described herein.
NOW, THEREFORE, in consideration of the premises and the mutual
promises made in this Agreement, and in consideration of the representations,
warranties and covenants contained in this Agreement, the parties agree as
follows.
1. DEFINITIONS.
"Acquired Assets" means the following assets of the Seller:
(a) All right, title and interest in and to the Wireless Technology.
(b) All Intellectual Property associated with the Wireless
Technology.
(c) All rights under all Assumed Contracts.
(d) All RF meter modules, software, firmware, codes, documents and
other personal property or information held or used by the Seller in connection
with the Wireless Technology.
(e) All marketing plans and sales leads.
(f) All right, title and interest in and to the "Airlink" name and
trademark.
"Assumed Contracts" means the contracts identified in the Disclosure
Schedule to be assigned to the Buyer.
"Closing" and "Closing Date" have the meanings set forth in Section
2(d) below.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Intellectual Property" means (a) patents, patent applications,
patent disclosures, and improvements thereto, (b) trademarks, service marks,
trade dress, logos, trade names and corporate names and registrations and
applications for registration thereof, (c) copyrights and registrations and
applications for registration thereof, (d) mask works and registration and
applications for registration thereof, (e) trade secrets and confidential
business information (including ideas, formulas, compositions, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
know-how, manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data,
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copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans, and customer and supplier lists and
information), (f) other proprietary rights, and (g) copies and tangible
embodiments thereof (in whatever form or medium).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Wireless Technology" has the meaning set forth in EXHIBIT A.
2. BASIC TRANSACTION.
(a) PURCHASE AND SALE OF THE ACQUIRED ASSETS. On and subject to the
terms and conditions of this Agreement, the Buyer agrees to purchase from the
Seller, and the Seller agrees to sell, transfer, convey, and deliver to the
Buyer, all of the Acquired Assets at the Closing for the consideration specified
below in this Section 2.
(b) ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for all of the Assumed Contracts at the Closing as described in the Assignment
and Assumption of Assumed Contracts in the form attached as an exhibit to this
Agreement. The Buyer will not assume or have any responsibility, however, with
respect to any other obligations or liabilities of the Seller which are not
Assumed Contracts.
(c) PURCHASE PRICE. At the Closing, the Buyer shall deliver to the
Seller a certificate representing 128,571 shares (the "Shares") of the Buyer's
Series B Convertible Preferred Stock (the "Purchase Price"). The Shares shall
have the rights, preferences, privileges and restrictions set forth in the form
of Certificate of Determination of Rights, Preferences, Privileges and
Restrictions of Series B Convertible Preferred Stock attached hereto as EXHIBIT
B (the "Certificate of Determination").
(d) THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇ &
▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
concurrently with the execution of this Agreement by all parties or at such
other place and time as may be agreed by the parties (the "Closing Date").
(e) DELIVERIES AT THE CLOSING. At the Closing, each party shall
deliver to the other all such agreements, documents and instruments contemplated
by this Agreement or necessary for the conveyance of the Acquired Assets to the
Buyer and the assumption of the Assumed Contracts by the Buyer. In addition, the
Seller shall provide to the Buyer a list of persons who have prior experience
with the installation of the Wireless Technology and who may be able to provide
assistance to the Buyer in connection with the Buyer's installation of the
Wireless Technology.
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(f) ALLOCATION. The parties agree to allocate the Purchase Price
(and all other capitalizable costs) among the Acquired Assets for all purposes
(including financial accounting and tax purposes) in the manner determined by
the Buyer.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Buyer that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and shall be true and
correct as of the Closing Date, except as set forth in the Disclosure Schedule
and initialed by the parties.
(a) ORGANIZATION OF THE SELLER. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. The Seller is duly qualified to conduct business as a foreign
corporation in the State of California and is in good standing under the laws of
the State of California.
(b) AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. Without limiting the generality of the foregoing, the Seller has
taken all actions required for the execution, delivery and performance of this
Agreement by the Seller and the sale of the Acquired Assets as provided herein.
This Agreement constitutes the valid and legally binding obligation of the
Seller, enforceable in accordance with its terms. The person or persons who have
executed this Agreement on behalf of the Seller are duly authorized to do so by
the Board of Directors of the Seller.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, judgment, order, decree, stipulation,
injunction, charge or other restriction of any government, governmental agency
or court to which the Seller is subject or any provision of the articles or
bylaws, as amended, of the Seller or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify or cancel, or require a notice under
any contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of indebtedness,
security interest or other arrangement to which the Seller is a party or by
which the Seller is bound or to which any of the Seller's assets is subject. The
Seller need not give any notice to, make any filing with, or obtain any
authorization, consent or approval of any government or governmental agency in
order for the parties to consummate the transactions contemplated by this
Agreement.
(d) TITLE TO THE ACQUIRED ASSETS. The Seller has good and marketable
title, free and clear of all mortgages, liens, pledges, claims, easements,
rights of way, conditions, security interests, encumbrances, restrictions,
charges, imperfections of title or equities of any nature whatsoever, to all of
the Acquired Assets, respectively, real and personal, tangible and intangible,
to be sold, conveyed, transferred and delivered hereunder. At the Closing, the
Buyer will obtain good and marketable title to the Acquired Assets, free and
clear of all mortgages, liens, pledges, claims, easements, rights of way,
conditions, security interests, encumbrances, restrictions, charges,
imperfections of title or equities of any nature whatsoever. All of the
equipment and tangible personal property constituting a portion of the Acquired
Assets is in good operating condition and repair, normal wear and tear excepted.
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(e) ASSUMED CONTRACTS. Set forth in the Disclosure Schedule is a
list of all written agreements, leases, contracts and commitments relating to
the Acquired Assets to which the Seller is a party or is otherwise bound as of
the date of this Agreement. The Seller has supplied the Buyer with true, correct
and complete copies of each such Assumed Contract. The Seller makes no
representations or warranties regarding the enforceability or validity of the
Assumed Contracts. Notwithstanding the foregoing, the Seller acknowledges
receipt of the following sums (the "Deposits") from certain utilities (the
"Utilities") in connection with pilot projects (the "Pilot Projects") relating
to the Acquired Assets: (i) $15,000 from Emerald People Utility District in
Eugene, Oregon; (ii) $10,000 from Third Taxing District in Norwalk, Connecticut;
and (iii) $10,000 from Springville Electric in Springville, Utah. The Seller
agrees that it is now and shall remain at all times after the Closing liable for
return of the Deposits to the Utilities and that the Buyer assumes no liability
therefor. The Seller further agrees that it will provide reasonable cooperation
to the Buyer in connection with the Buyer's pursuit, if any, of the Pilot
Projects.
(f) INTELLECTUAL PROPERTY. None of the Acquired Assets or any
Intellectual Property held or used by the Seller in connection with the Acquired
Assets infringes the Intellectual Property or other proprietary rights of any
other party. All Intellectual Property developed for the Seller was so developed
under agreements with employees, consultants or others that provide that the
Intellectual Property so developed is a "work made for hire" or otherwise
providing for the assignment of all rights thereto to the Seller. To the
knowledge of the Seller, the manufacture, use, sale, marketing or distribution
of the Acquired Assets does not violate or infringe on any patent or any
proprietary or personal right of any person or firm.
(g) COMPLIANCE WITH LAWS. The business of the Seller has been
operated in compliance with all federal, state, local and foreign laws,
regulations and orders, the violation of which would have a material adverse
effect upon any of the Acquired Assets. All reports and filings required to be
made by the Seller with respect to the Acquired Assets under foreign, federal,
state and local statutes, laws, regulations, rules and ordinances relating to
health, safety and protection of the environment have been filed in a timely
manner, and no such reports or filings are currently required that have not been
made.
(h) CONSENTS. No approvals or consents of or assignments by any
person (including, without limitation, any federal, state or local governmental
or administrative authorities) are necessary in connection with the execution,
delivery or performance of this Agreement.
(i) TAX MATTERS. All taxes, including, without limitation, income,
excise, property, sales, transfer, use, franchise, payroll, employees' income
withholding and social security taxes imposed or assessed by the United States
or by any foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country, or by any other
taxing authority, which are due or payable by the Seller with respect to the
Acquired Assets, and all interest, penalties and additions thereon, whether
disputed or not, have been paid in full; all tax returns or other documents
required to be filed in connection therewith have been accurately prepared and
duly and timely filed. No issues have been raised (or are currently pending) by
the Internal Revenue Service or any other taxing authority in connection with
any of the returns and reports referred to above, and no waivers of statutes of
limitations have been given or requested with respect to the Seller in
connection therewith.
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(j) LITIGATION. There is no claim, dispute, action, proceeding
(including arbitration), suit, appeal or investigation, at law or in equity,
pending (other than those, if any, with respect to which service of process or
similar notice has not yet been made and which are not within the knowledge of
the Seller) or, to the knowledge of the Seller, threatened against the Seller
involving the Wireless Technology or any of the Acquired Assets before any
court, agency, authority, arbitration panel or other tribunal. The Seller is not
subject to or in default with respect to any notice, order, writ, injunction or
decree of any court, agency, authority, arbitration panel or other tribunal
involving the Wireless Technology or any of the Acquired Assets.
(k) RELATED PARTIES. No officer, director or other affiliate of the
Seller, directly or indirectly, is party to any material arrangement affecting
the design, development, marketing, distribution or use of the Wireless
Technology or the Acquired Assets.
(l) UNDERLYING DOCUMENTS. Copies of all documents listed or
described in the Disclosure Schedule have been furnished or made available to
the Buyer. All such documents are true and complete copies, and there are no
amendments or modifications thereto, except as expressly noted in the Disclosure
Schedule.
(m) BROKERS' FEES. The Seller has no liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(n) DISCLOSURE. Neither this Agreement nor any of the schedules or
exhibits hereto contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances in which they were made, not misleading, and there is
no fact which has not been disclosed to the Buyer that materially affects
adversely or could reasonably be anticipated to materially affect adversely the
Wireless Technology or the Acquired Assets.
(o) INVESTMENT REPRESENTATIONS. The Seller hereby represents and
warrants to the Buyer with respect to the acquisition of the Shares as follows:
(i) INVESTMENT EXPERIENCE. The Seller has substantial experience
in evaluating and investing in private placement transactions of securities in
companies similar to the Buyer so that the Seller is capable of evaluating the
merits and risks of its investment in the Buyer and has the capacity to protect
its own interests.
(ii) ACCREDITED INVESTOR. The Seller is either (i) an
"accredited investor" as that term is defined in Securities and Exchange
Commission Rule 501 of Regulation D, as presently in effect, or (ii) has a
preexisting personal or business relationship with the Buyer or any of its
officers, directors or controlling persons, or by reason of the Seller's
business or financial experience or the business or financial experience of the
Seller's professional advisors who are unaffiliated with and who are not
compensated by the Buyer or any affiliate or selling agent of the Buyer,
directly or indirectly, has the capacity to protect the Seller's own interests
in connection with the acquisition of the Shares.
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(iii) INVESTMENT. The Seller is acquiring the Shares for
investment by the Seller and its affiliates, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution thereof.
The Seller understands that the Shares have not been, and will not be,
registered under the Securities Act of 1933 ("Securities Act") by reason of a
specific exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Seller's representations as
expressed herein.
(iv) RULE 144. The Seller acknowledges that the Shares must be
held indefinitely unless subsequently registered under the Securities Act or
unless an exemption from such registration is available. The Seller is aware of
the provisions of Rule 144 promulgated under the Securities Act which permit
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the existence
of a public market for the shares, the availability of certain current public
information about the Buyer, the resale occurring not less than a specified
number of years after a party has purchased and paid for the security to be
sold, the sale being effected through a "broker's transaction" or in
transactions directly with a "market maker" and the number of shares being sold
during any three-month period not exceeding specified limitations.
(v) ACCESS TO DATA. The Seller has had an opportunity to discuss
the Buyer's business, management and financial affairs with its management. The
Seller also has had an opportunity to ask questions of officers of the Buyer,
which questions were answered to its satisfaction. The Seller understands that
such discussions, as well as any written information issued by the Buyer, were
intended to describe certain aspects of the Buyer's business and prospects but
were not a thorough or exhaustive description. The Seller's decision to enter
into the transactions contemplated hereby is based on its own evaluation of the
risks and merits of the purchase and the Buyer's proposed business activities.
Without limiting the generality of the foregoing, the Seller has had the
opportunity to obtain and to review the following documents of the Buyer: (1)
Form 10-KSB for the fiscal year ended March 31, 1998; (2) Form 10-QSB for the
quarter ended June 30, 1998; and (3) Form 10-QSB for the quarter ended September
30, 1998, in each case as filed with the SEC. The Buyer understands that its
investment in the Shares involves a high degree of risk.
(vi) TAX LIABILITY. The Seller has reviewed with its own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. With respect to
such tax consequences, the Seller relies solely on such advisors and not on any
statements or representations of the Buyer or any of its agents. The Seller
understands and agrees that it (and not the Buyer) shall be responsible for any
of its own tax liability that may arise as a result of this investment or the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to the Seller that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement.
(a) ORGANIZATION AND CAPITALIZATION OF THE BUYER. The Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of California. As
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of March 31, 1999, the authorized capital stock of the Buyer consisted of (a)
25,000,000 shares of Common Stock, without par value, (b) 2,500,000 shares of
Series A 7.5% Convertible Redeemable Preferred Stock ("Series A Preferred
Stock") and (b) 2,500,000 shares of undesignated Preferred Stock. Upon the
filing of the Certificate of Determination with the California Secretary of
State, the authorized capital stock of the Buyer shall consist of (a) 25,000,000
shares of Common Stock, (b) 2,500,000 shares of Series A Preferred Stock, (c)
128,571 shares of Series B Convertible Preferred Stock and (c) 2,371,429 shares
of undesignated Preferred Stock.
(b) AUTHORIZATION OF TRANSACTION. The Buyer has all necessary
corporate power and corporate authority to execute and deliver this Agreement
and to perform its obligations hereunder. Without limiting the generality of the
foregoing, the Buyer has taken all actions required for the execution, delivery
and performance of this Agreement by the Buyer, the purchase of the Acquired
Assets and the issuance of the Shares to the Seller as provided herein. This
Agreement constitutes the valid and legally binding obligation of the Buyer,
enforceable in accordance with its terms except as enforceability may be limited
by the effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws generally affecting creditors' rights and the application of
general principles of equity including, but not limited to, the inability to
exercise the right to specific performance in certain circumstances. The person
or persons who have executed this Agreement on behalf of the Buyer have been
duly authorized to do so by the Buyer.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the actions contemplated hereby, will (i)
violate any statute, regulation, rule, judgment, order, decree, stipulation,
injunction, charge or other restriction of any government, governmental agency
or court to which the Buyer is subject or any provision of its charter or bylaws
or (ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, security interest, or other arrangement to which the Buyer is a
party or by which it is bound or to which any of its assets is subject in a
manner or to an extent that would materially and adversely affect the
validity or enforceability of, or the authority or ability of the Buyer to
perform its obligations under, this Agreement or any of the other documents
contemplated by this Agreement. Other than federal and state securities law
notices in connection with the issuance of the Shares, the Buyer does not need
to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
parties to consummate the transactions contemplated by this Agreement.
(d) CONCERNING THE SHARES. The Shares have been duly authorized and,
when issued in accordance with this Agreement, and the shares of Common Stock
underlying the Shares, when issued upon conversion of the Shares, will be duly
and validly issued, fully paid and non-assessable and will not subject the
holder thereof to personal liability by reason of being such holder. There are
no preemptive rights of any stockholder of the Buyer, as such, to acquire any of
the Shares.
(e) APPROVALS. No authorization, approval or consent of or filing
with any court, governmental body, regulatory agency, self-regulatory
organization, or stock exchange or market or the shareholders of the Buyer is
required to be obtained by the Buyer for the issuance and sale of the
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Shares and the Common Stock issuable upon conversion thereof other than the
requirements of any applicable blue sky laws. The Buyer has taken or will take
all actions necessary to satisfy the requirements of applicable blue sky laws.
(f) INFORMATION PROVIDED. The information provided by or on behalf
of the Buyer to the Seller and referred to in Section 3(o)(v) of this Agreement
does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
(g) LITIGATION. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Buyer or any of its subsidiaries, threatened against or
affecting the Buyer or any of its subsidiaries, wherein an unfavorable decision,
ruling or finding would materially and adversely affect the validity or
enforceability of, or the authority or ability of the Buyer to perform its
obligations under, this Agreement or any of the other documents contemplated by
this Agreement.
(h) BROKERS' FEES. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
5. POST-CLOSING COVENANTS AND AGREEMENTS. The parties agree as follows
with respect to the period following the Closing.
(a) GENERAL. If at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
parties will take such further action (including, without limitation, the
execution and delivery of such further instruments and documents) as the other
party may reasonably request. The Seller expressly agrees that it will, without
demanding any further consideration therefor, at the request of the Buyer,
provide all assistance and execute any papers deemed necessary or desirable by
the Buyer, its successors, assigns and legal representatives, for perfecting the
Buyer's right, title and interest in and to the Intellectual Property and the
Acquired Assets, including without limitation, the acquisition, sustenance,
reexamination or reissuance of patents relating to the Intellectual Property and
the maintenance and perfection of the rights of the Buyer and its successors and
assigns to such patents. The Seller further expressly agrees that it will
promptly, at the request of the Buyer, cause the inventors and other prior
owners, if any, of the Intellectual Property and the Acquired Assets, to provide
all assistance and execute all such papers for the purposes described in this
paragraph, without cost to the Buyer.
(b) CONDITION TO TRANSFER OF CERTAIN CONTRACTS. At the Closing, the
Buyer may elect to close the transactions contemplated hereby notwithstanding
the fact that the Seller may have failed to obtain consents to the transfer of
one or more Assumed Contracts which by their terms require the consent of any
other contracting party thereto to the assignment thereof to the Buyer. The
terms of this paragraph (b) shall govern the transfer of the benefits of each
such Assumed Contract. Notwithstanding anything herein to the contrary, the
parties acknowledge and agree that at the Closing the Seller will not assign to
the Buyer any Assumed Contract which by its terms requires the consent of any
other contracting party thereto unless each consent has been obtained prior to
the Closing Date. With respect to each such unassigned Assumed Contract, after
the Closing Date the
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Seller shall continue to deal with the other contracting party(ies) to that
Assumed Contract as the prime contracting party and shall use its best efforts
to obtain the consent of all required parties to the assignment of such Assumed
Contract, but the Buyer shall be entitled to the benefits of such Assumed
Contract accruing after the Closing Date to the extent that the Seller may
provide the Buyer with such benefits without violating the terms of such Assumed
Contract; and the Buyer agrees to perform at its sole expense all of the
obligations of the Seller to be performed under such Assumed Contract the
benefits of which the Buyer is receiving after the Closing Date.
(c) DELIVERY OF HARDWARE DESIGN AND RELATED MATERIALS. The Seller
expressly agrees that it will promptly, but in any event no later than two weeks
following the Closing Date, deliver to the Buyer all hardware design and related
materials relating to the Wireless Technology, including without limitation, the
RF Module designed under contract by Mr. ▇▇▇▇ ▇▇▇▇▇▇ and the notes, design
specifications and related materials produced by ▇▇. ▇▇▇▇▇▇ and/or the Seller,
as more particularly described in the memo dated April 5, 1999 delivered to the
Buyer by ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇.
(d) INTRODUCTIONS. The Seller agrees to introduce the Buyer to the
Utilities and to Centro de Pesquisas de Energia Eletrica and the other party or
parties, if any, who had expressed an interest in the Wireless Technology, as
soon as practicable, but in no event later than two weeks, following the
Closing.
(e) SURVIVAL. Notwithstanding anything to the contrary contained in
this Agreement, the covenants and agreements described in this Section 5 shall
survive the Closing and continue forever.
6. INDEMNIFICATION.
(a) INDEMNIFICATION OF LOSSES. The Seller hereby indemnifies the
Buyer against Losses (as defined below), and the Buyer hereby indemnifies the
Seller against Losses, as set forth in this Section 6. If the Buyer shall have
suffered a Loss by reason of (i) the breach of any of the representations or
warranties or covenants made by the Seller herein, or (ii) any liability or
claim arising prior to the Closing with respect to the Acquired Assets, the
Buyer shall be indemnified for such Loss by the Seller as set forth in this
Section 6; if the Seller shall have suffered a Loss by reason of (iii) the
breach of any of the representations or warranties or covenants made by the
Buyer herein, (iv) the manufacture or sale of any of the Acquired Assets by the
Buyer after the Closing, or (v) the Assumed Contracts, the Seller shall be
indemnified for such Loss by the Buyer as set forth in Section 6. The party who
is requested to provide indemnity is herein referred to as "Indemnitor" and the
party requesting indemnity is herein referred to as "Indemnitee." "Loss" shall
mean any losses, liabilities, claims, damages and expenses incurred including,
without limitation, penalties, fines, interest, amounts paid in settlement and
reasonable fees and disbursements of counsel, and reasonable expenses incurred
in connection with any investigation, action, suit or proceeding instituted
against Indemnitee.
(b) PAYMENT. At such time as the indemnifiable amount of a Loss as
been determined in accordance with this Section 6 (a "Liquidated Claim"), (A) if
resulting from a claim made by the Buyer, the Seller shall immediately pay the
Buyer the amount of the Liquidated Claim, or (B) if resulting from a claim made
by the Seller, the Buyer shall immediately pay the Seller the
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amount of the Liquidated Claim, as the case may be. No forbearance of Indemnitee
in demanding payment from an Indemnitor shall act as a waiver of any right of
Indemnitee to receive payment from Indemnitor, nor shall it relieve Indemnitor
of any obligation to Indemnitee under this Agreement.
(c) NOTICE OF CLAIMS. If Indemnitee has any claim for a Loss (a
"Claim"), it will give prompt written notice thereof to Indemnitor, including in
such notice a brief description of the facts upon which Claim is based and the
amount thereof.
(d) THIRD PARTY CLAIMS. If Indemnitee becomes aware of a Third Party
Claim that it believes may result in a Claim (a "Third Party Claim"), Indemnitee
shall notify Indemnitor of such Third Party Claim, and Indemnitor shall be
entitled, at the expense of Indemnitor, to defend such Third Party Claim.
(e) DISPUTED CLAIMS. If Indemnitor objects to any Claim or Third
Party Claim, it shall give written notice of such objection and brief statement
of the grounds of such objection to Indemnitee within 20 business days after
notice is received. If no such notice is given, such claim shall be a Liquidated
Claim. If such objection is made, Indemnitor and Indemnitee shall meet and use
their best efforts to settle the dispute in writing which, when resolved, shall
be a Liquidated Claim.
(f) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the parties set forth in this Agreement will continue for a
period of three years from the Closing Date.
7. MISCELLANEOUS.
(a) PRESS RELEASES AND ANNOUNCEMENTS. No party shall issue any press
release or announcement relating to the subject matter of this Agreement without
the prior written approval of the other party; provided, however, that any party
may make any public disclosure it believes in good faith is required by law or
regulation (in which case the disclosing party will advise the other party prior
to making the disclosure).
(b) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the parties and
supersedes any prior understandings, agreements, or representations by or
between the parties, written or oral, that may have related in any way to the
subject matter hereof, including, without limitation, the Memorandum of
Understanding entered into by and between the parties effective as of January
18, 1999.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the prior written
approval of the other party.
-10-
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given three business days
after mailing if sent by registered or certified mail, return receipt requested,
postage prepaid and addressed to the intended recipient as set forth below:
If to the Seller:
Greenland Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
If to the Buyer:
Telenetics Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
With a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Any party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it any is
received by the person for whom it is intended. Any party may change the address
to which notices, requests, demands, claims and other communications hereunder
are to be delivered by giving the other party notice in the manner herein set
forth.
(h) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws (and not the law of conflicts) of the State
of California.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller.
-11-
(j) EXPENSES. Each of the Buyer and the Seller will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby.
(k) CONSTRUCTION. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction shall be applied against any party. Any reference to
any federal, state, local or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.
(l) INCORPORATION OF EXHIBITS AND SCHEDULES. The exhibits and
schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(m) BULK TRANSFER LAWS. The Buyer acknowledges that the Seller will
not comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement. The Seller
shall indemnify the Buyer for any liability with respect to any such
non-compliance.
[Remainder of page intentionally left blank.]
-12-
(n) TRANSFER TAXES. Any and all sales, use or other transfer taxes
arising from the transactions contemplated by this Agreement will be paid by the
Seller.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
TELENETICS CORPORATION,
a California corporation
By: /s/ ▇▇▇▇▇▇▇ Armani
-------------------------------------
▇▇▇▇▇▇▇ ▇. Armani, President
GREENLAND CORPORATION,
a Nevada corporation
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
-13-
Disclosure Schedule
The Assumed Contracts are:
1. The three Pilot Projects referred to in Section 3(e) of the
Agreement; and
2. The Seller's contact with Centro de Pesquisas de Energia
Eletrica and the other party or parties, if any, who had
expressed an interest in the Wireless Technology.
Exhibit A -- Wireless Technology
WIRELESS, FIXED NETWORK AUTOMATED METER READING NETWORK
Utilities are going through a period of rapid change triggered by government's
deregulation mandate. While the real race may be to develop unique products and
services to capture (and hold) the customer, the bottom line is the urgency for
utilities to capitalize on the interactive services that technology is making
possible.
Utilities, like telecommunications service providers, face massive regulatory
change that is reshaping the business landscape. The principal challenge is to
manage the transformation from monopolies to competitive service-oriented
businesses.
With competition comes a two-headed monster: Utility companies must learn to
drive cost out of their operations while improving service quality and adding
new features.
Meters, which measure the flow of commodity resources (electricity, natural gas,
water) are a utility's lifeline. Information retrieval, however, is an expensive
and inefficient process that is both labor-intensive and error- prone.
Furthermore, the meter reading process is generally limited to daylight hours;
and it results in only a single data point of the total resource consumed. This
method provides practically no statistical energy management information.
Automated meter reading ("AMR") of electric, gas, and water meters has the most
obvious benefit of reducing utility company costs. However, the most significant
benefit to such automation is enhanced information retrieval and management.
Additional benefits include utility load control management, theft and tamper
detection, service interruption detection, and automation of some parts of the
distribution system ("SCADA"). A "smart" network will enable utilities to manage
costs and service quality efficiently and effectively.
Greenland has developed such a network - Airlink, a completely wireless, fixed
network AMR system designed as a communications link between a utility and every
individual user of resources in its service area!
WHY AUTOMATE?
The major issues facing the utility metering process are: (1) access to the
meter (which may be in the basement of the home., or in a remote location); (2)
having enough qualified personnel to handle the work load; (3) assurance of the
accuracy of the information (hand writing the information in the field and then
transferring it to billing computers breeds inaccuracy); (4) costs (including
salaries, employee benefits, insurance, fleet maintenance, etc.); (5) cash flow
(some utilities can send bills to its customers only once every 2 months;
automation can decrease the length of the billing cycle because meters can be
read more frequently); and (6) energy management (utilities need information at
the point of use in order to get better information as to resource usage,
including time, amount of use and, in some cases, power interruption status).
WHY IS AIRLINK A SUPERIOR SOLUTION?
Most AMR solutions rely on either a hard-wired solution or a wireless solution
that requires the collection device to be in relatively close proximity to the
meter. Other wireless systems require meter reading personnel to be deployed in
the field to accomplish data collection. Advanced wireless technology is a major
differentiating characteristic of the AirLink system. The system enables a
utility to read meters, regardless of location, without the need to use
hard-wired connections or to send reading personnel near the location. The
system is an entirely remote-controlled network, with collector stations
strategically placed in the general area of the meters. A single collection
station can accommodate thousands of meters. Meters can be polled many times
daily. (AirLink defaults to reading meters in 15-minute increments.) Data is
collected in real-time, without the need for field personnel. Additionally, the
system automatically informs the main office of power interruption at the meter
site. Power failure or tampering with the system is detected within seconds of
such an event.
STATE OF THE MARKET
As one would expect, the United States represents the most sizeable market for
delivery of essential utility services such as water, electricity, and natural
gas. Accordingly, the U.S. represents the largest single market for meter
systems and services, approximately 102 million homes comprising 300 million
meters.
Radio telemetry devices, until recently, have been limited to collection of data
by a mobile platform to collect the data from meter sensing devices via radio
telemetry. The basic requirements of these systems to be successful are that (1)
the system must provide more than a single data point; (2) the system must be
non- intrusive and capable of retrofitting to the installed base of meters; (3)
the operator interface must be designed so that it can be easily used by
existing meter reading personnel; (4) the system must be reliable, inexpensive,
and capable of operating in harsh environments; and (5) the meter reading unit
must be capable of being mounted to the meter in such a way as to allow for the
manual reading of the meter in case of system failure. Unfortunately, such
systems have not met such requirements in total. A major disadvantage is that
meter reading personnel must still be used for the data collection process.
Notwithstanding the reduction in personnel requirements, staff must be retrained
and re-deployed to serve the system from vehicles designed to interact with the
communication of data from each meter to the collection point(s). A second major
disadvantage is that these systems have not been designed to adequately function
in all conditions (i.e. in sunlight, or harsh weather conditions). Additional
technical challenges have yet to be solved to a reasonable degree to insure
total system reliability. These include transmission inconsistencies, route
coordination, etc. Also, traditional meter reading methodology does not provide
utilities the ability to implement incremental billing to enable differential
charges for usage based upon usage patterns that impact resource management.
In an increasingly automated age, utility companies must adapt to technologies
that have the potential to increase their productivity and level of customer
service. Automating meter reading is one of the principle methods by which
utilities can positively transform their operations.
AIRLINK TECHNOLOGY
The key to the AirLink network is Greenland's patent-pending radio frequency
(RF) technology; and associated technology devoted to the unique requirements of
utility meter reading and information management.
The AirLink wireless meter reading network is made up of essentially two parts:
(1) the meter reading device that is installed on the utility meter itself, and
collection devices, which are located at intervals throughout the service area.
The system electronically takes an electronic "picture" of the meter's output,
creates a digital "packet" of the actual meter reading, and transmits the data
to the collection station. The data is then available to the utility company to
incorporate into its existing computer systems for billing and statistical
analysis. (A database software interface is provided for virtually any system.)
The meter reading device ("MRU") is easy to install and to maintain. Most
installations are estimated at 10 minutes in duration. Greenland recommends a
project management change-out approach, which calls for a meter shop "bench"
retrofit installation. MRU devices can also be installed in the field.
METER READING DEVICE
AirLink MRU's are available for any kind of utility meter. Circuitry is provided
to capture data from the meter and to translate it for digital transmission. The
major components include a transmitter with a specialized, horizontally
polarized antenna, receiver, power supply with supercapacitor (battery), an
internal computer to translate data, and memory for storage of data.
-2-
The AirLink MRU is designed to last for many years without the need for repair
or replacement. The AirLink electric meter MRU is powered by line voltage and a
supercapacitor. Water and natural gas MRU's use long- life lithium batteries
that may be either replaced or re-charged every three to ten years (depending
upon how frequently meter must transmit data).
The meter reading device has its own computer circuitry, including memory, in
order to save data to provide redundancy of data, and to insure against data
loss due to vandalism, power outage, etc.
COMMUNICATIONS
The AirLink system addresses two main technological issues related to automating
the process of meter reading: (1) meter reading accuracy and (2) communications
integrity. Greenland's patent-pending communications protocol and associated
technology will enable utilities to receive data from millions of meters in
short periods of time. The system effectively deals with the challenges related
to data compression and signal integrity; particularly when applied to the needs
of utilities to transmit from thousands of data points in short periods of time.
AIRLINK IS A 2-WAY SYSTEM
The AirLink system provides for communications both to each meter and from each
meter back to its local collection station. The system polls each meter and each
meter scans for a clear, open channel prior to transmission of data to
collection units. AirLink's proprietary communications protocol enables the
system to function efficiently and effectively, even in high density RF traffic.
There are a number of additional benefits to this 2-way solution. Value-added
enhancements can be added to the AirLink system as it communicates
bi-directionally. These might include the ability to remotely activate or
deactivate nodes on the system, reading multiple meters at each location, etc.
CELL SITE DATA CORRECTION/TRANSMISSION
Collection computers are arrayed strategically as "cell sites" in order to
receive data from each meter and to transmit the data to the central computer at
the utility's billing office.
Each stop in the data network has its own requirements in order to provide
accurate, redundant information on resource usage. Utilities will find the
system useful in saving reading costs, providing a variety of value added
services, and in the increased management reporting capabilities provided by an
AirLink network.
A data accumulator is built-in to the system to enable the collection of load
management information. The system can provide separate daily usage levels and
stores data related to highest and peak demand data. The system allows utilities
to incorporate time-differential billing by segregating data into hourly (or
sub-hourly) periods.
The AirLink device at the meter also includes circuitry that detects power
interruption. In the event of a power failure or tampering at the meter site,
the system will transmit such status when polled by the network (at
user-programmable intervals).
A number of safeguards and security features are incorporated to enhance
performance, reliability, and maintenance. Internal diagnostic circuitry will
detect low power (including battery power levels in water and gas meters) and
communications errors.
Each receiver cell site may be linked to transfer the collected data to the main
billing office, or collected data may be transferred by other methods such as
telephone link, memory card swap, or mobile RF links.
-3-
WHAT ABOUT WATER?
Greenland's AirLink system can be deployed for use in water meter applications.
The technology is designed to meet the special technological and environmental
challenges that are faced by water utilities. Since most water meters are
located below ground, in dark, inhospitable conditions without readily available
power or communications links, water system AMR presents unique difficulties.
The AirLink system uses the same MRU/CRU deployment as for electric and gas
meters, with the additional elements of protective housings for electronics. The
AirLink MRU is equipped with sensors that can function with all kinds of output
devices used in AMR-ready water meters.
Power is provided by long-life batteries to run the AirLink device. In
installations in which water and electricity are monitored, data from the water
meter can be transmitted to the electric meter, which will reduce the need for
electricity. The antenna is horizontally polarized and is of the same design as
those used for electricity and gas.
AIRLINK PERFORMANCE FEATURES
PRICE PER DATA POINT - AirLink pricing, at this time, is approx. $65 per meter
in order to retrofit an electric meter with AirLink electronic circuitry. No new
meters are required for the system.
TERMS OF SALE - AirLink is made available for sale to utilities. Greenland
charges additional fees for ongoing technical and operations support. Under
certain circumstances, utilities can elect to pay per read and have Greenland
operate the system under a service agreement.
INTEGRATION OF ELECTRIC, GAS, AND WATER METERS - The AirLink system will enable
the integration of all utility meters, as well as other sensing devices, in an
integrated 2-way system. Generally, gas and water meters, which require battery
power, can be configured to report over short distances to the electric meter.
SIGNAL DISTANCE - METER TO COLLECTION STATION - AirLink is installed using
either the FCC Part 15 or Part 90 communications specifications. AirLink is
unique in that the network can be "tuned" to most available frequencies. AirLink
systems are estimated to provide coverage of a 1/2-mile to 15-mile radius from
data point to collection point, depending upon whether Part 15 or Part 90 is
used.
DATA THROUGHPUT - The AirLink system sends data packets at a maximum effective
throughput of 100,000 bits per second. The speed of transmission enables AirLink
to accommodate a far greater number of meters in the system. Traditional, slow
transmission data rates complicate the AMR challenge because only small amounts
of data can be transferred in order to avoid interference. In a 2-way system
such as AirLink, it allows for the system to poll each data point and to confirm
the reception of information (including reads, status, etc.)
RETROFIT OF EXISTING INSTALLED METERS - The AirLink system is designed to
retrofit most existing meters. The benefit to this is that the utility's
existing investment in meters is protected. Moreover, all of the standard single
phase electric meters in the system are transformed into time-of-use meters. In
competitive systems, special meters are required in order to provide network
connectivity, which can add substantially to the cost of deploying an AMR
network.
READING ACCURACY - Naturally, reading accuracy is a critical component of an AMR
system. AirLink's delivery specification is to read meters with a minimum of 99%
accuracy.
-4-
WIDE AREA NETWORK (WAN) COMPATIBILITY - AirLink is compatible with other systems
via RS-232 serial interface (input and output). In situations where the network
must be interconnected with others, this interface is generally suitable and
reliable. Other, competitive systems, which have proprietary interfaces may not
be compatible with other networks, such as telephone, fiber-optic cable,
cellular, etc.)
DATABASE SOFTWARE REQUIREMENTS - AirLink is an "open" system. All data is fed to
a flat-file database that is accessible to other system software (such as
billing systems) in use by the utility. No special software interfaces are
required to access the AirLink database. Alternative systems generally require a
custom-designed database structure.
NETWORK MANAGEMENT SOFTWARE REQUIREMENTS - AirLink provides, as part of its
overall system, software to enable system management in conjunction with the
database. This software is primarily used to create and transmit commands (read,
status, etc.) to each data point (meter) in the system. It will also manage the
protocol that polls meters and reports anomalies in meter status (power
interruption, etc.) The basis of this protocol is that there are 10,000 data
"slots" per second. Slots are available for status changes, etc.
DISTRIBUTION AUTOMATION (SCADA) - The AirLink system enables utilities to use
its components for distribution automation (SCADA) applications, including
monitoring switching stations, load management, etc. Each AirLink module that is
deployed for this purpose becomes an individual data point in the system and is
managed by the network with a specific protocol and command structure.
OTHER FEATURES - AirLink provides a number of other features and functions; some
of which are unique and others which are competitive. These include remote
connect/disconnect of meters, remote configuration of data points, demand
metering, tamper and outage detection and advanced metering features for
large-scale industrial users.
AIRLINK'S COMPETITIVE ADVANTAGE
The AirLink wireless, fixed-network meter reading network will significantly
increase a utility's ability to manage its resource consumption by providing
information that is not readily available through existing metering technology.
AirLink technology provides improved resource management, time-of-use (TOU)
information, outage management data, better peak-demand monitoring, potential
SCADA applications, and security. Its ability to provide differential billing
real-time usage information for PUC reporting has the potential of further
reducing overall costs for the utility.
-5-
Exhibit B -- Form of Certificate of Determination of
Rights, Preferences, Privileges and Restrictions of
Series B Convertible Preferred Stock
[Attachment is contained at Exhibit 3.3 to the Form 10-KSB
of which this page is a part.]
Exhibit C -- Form of ▇▇▇▇ of Sale
▇▇▇▇ OF SALE
THIS ▇▇▇▇ OF SALE made this ____ day of April, 1999, by Greenland
Corporation, a Nevada corporation ("Seller"), for the benefit of Telenetics
Corporation, a California corporation ("Buyer").
WHEREAS, Seller and Buyer have entered into an Asset Purchase Agreement
of even date herewith (the "Agreement"), pursuant to which Seller has agreed to
transfer certain of its assets to Buyer.
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, Seller grants, sells, conveys, transfers, assigns, releases and
delivers to Buyer the Acquired Assets (as defined in the Agreement), to have and
to hold all and such singular such assets to Buyer, and its successors and
assigns, to their own use and benefit forever.
Seller, at any time at or after the date hereof, will execute,
acknowledge and deliver any further deeds, assignments, conveyances and other
assurances, documents, and instruments of transfer requested by Buyer and will
take any other action consistent with the terms of this ▇▇▇▇ of Sale that may be
requested by Buyer for the purpose of assigning, transferring, granting,
conveying and confirming to Buyer, or reducing to possession, any or all of the
Acquired Assets.
This ▇▇▇▇ of Sale has been executed by a duly authorized officer of
Seller as of the day and year first above written.
GREENLAND CORPORATION,
a Nevada corporation
By: ____________________________________
▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
Exhibit D -- Form of Assignment and Assumption of
the Assumed Contracts
ASSIGNMENT AND ASSUMPTION OF ASSUMED CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF ASSUMED CONTRACTS (this
"Assignment") is made and effective on ________________, 1999, by and between
Greenland Corporation, a Nevada corporation ("Assignor"), and Telenetics
Corporation, a California corporation ("Assignee"), pursuant to an Asset
Purchase Agreement (the "Purchase Agreement") dated the date hereof, under which
Assignor agreed to transfer certain contracts to Assignee.
Assignor, by this instrument, does hereby sell, transfer, assign and
delegate to Assignee, its successors and assigns, all of Assignor's rights under
the Assumed Contracts and all of Assignor's obligations under the Assumed
Contracts arising on or after the date hereof.
True, correct and complete copies of the Assumed Contracts have been
provided to Assignee and are described in the Disclosure Schedule to the
Purchase Agreement.
Assignee, by acceptance of this Assignment, agrees to become liable for
the performance of all of the provisions, covenants and obligations of Assignor
set forth in the Assumed Contracts arising on or after the date of this
Assignment. It is expressly understood and agreed that Assignee shall not be
liable for any liabilities, claims or obligations of Assignor of any kind or
nature other than those expressly set forth herein.
This Assignment has been executed by the duly authorized officers of
Assignor and Assignee as of the date first above written.
GREENLAND CORPORATION,
a Nevada corporation
By: ____________________________________
▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
TELENETICS CORPORATION,
a California corporation
By: ____________________________________
▇▇▇▇▇▇▇ ▇. Armani, President
Exhibit E -- Form of Trademark Assignment
TRADEMARK ASSIGNMENT
Whereas, GREENLAND CORPORATION, a Nevada corporation, having a place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Assignor"), has
adopted, used, is using and is the owner of the trademark "AIRLINK" (the
"Trademark"), which Trademark was registered on June 16, 1998 on the principal
register of the United States Patent and Trademark Office, registration no.
2,165,596 for class number 9; and
Whereas, TELENETICS CORPORATION, a California corporation
("Telenetics"), has succeeded to a portion of the business, assets and
appurtenant goodwill of said Assignor.
Now, therefore, in consideration of the sum of one dollar and other
good and valuable consideration, the receipt of which is hereby acknowledged,
Assignor hereby assigns, as more particularly set forth in that certain Asset
Purchase Agreement by and between Assignor and Telenetics dated April ___, 1999,
to Telenetics all right, title and interest, in the United States and any other
countries in which Assignor has acquired similar rights, in and to the Trademark
and all corresponding registrations and/or applications, together with the
goodwill of the business symbolized by the Trademark and the registrations or
applications to register said Trademark.
Signed at __________________________ as of April ___, 1999.
GREENLAND CORPORATION,
a Nevada corporation
By:_________________________________
Printed Name: _______________________
Its: ________________________________
State of California )
)
County of San Diego ) ss.
On April ___, 1999, before me, _____________________, a Notary Public,
personally appeared ________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the entity upon behalf of which the person acted, executed the
instrument on behalf of its successor and assignee Telenetics and pursuant to
authority duly received.
WITNESS my hand and official seal.
______________________________________ (Seal)
Signature
Exhibit F -- Form of Patent Assignment
ASSIGNMENT OF UNITED STATES PATENT APPLICATION
Whereas, GREENLAND CORPORATION, a Nevada corporation, having a place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Assignor"), is the sole owner of the entire right, title and interest in and
to the following application for United States Letters Patent: Serial Number
08/835,496, filed April 8, 1997, entitled "Optical Emitter and Detector
Circuit," inventor: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Patent"); and
Whereas, TELENETICS CORPORATION, a California corporation having a
place of business in Lake Forest, California ("Assignee"), is desirous of
acquiring the entire right, title and interest in and to the Patent.
Now, therefore, for good and valuable consideration, the receipt and
sufficient of which are hereby acknowledged, effective April ___, 1999, Assignor
has sold, assigned and transferred, and by these presents does hereby sell,
assign and transfer, Assignor's entire right, title and interest in and to the
Patent, the inventions disclosed therein, all divisions, continuations and
continuations-in-part thereof, and all patents issuing on any of the foregoing,
and all reissues, reexaminations and extensions thereof, and the right to apply
for Letters Patent in foreign countries with full benefit of such priorities as
may now or hereafter be granted to Assignor by local laws or by treaty,
including any international convention for the protection of intellectual
property, all said rights to be held and enjoyed by Assignee for its own use and
for the use of its successors, assigns or other legal representatives, to the
full end of the term for which the Patent and other patents on such other
applications will be granted, reexamined, extended or reissued, as fully and
entirely as the same would have been held and enjoyed by Assignor if this
assignment and sale had not been made.
Assignor does hereby request and authorize the Commissioner of Patents
and Trademarks, U.S.A., to issue the Patent, when granted, in accordance with
this Assignment. Assignor further agrees that Assignor will, without demanding
any further consideration therefor, at the request of Assignee, provide all
assistance and execute any papers deemed necessary by Assignee, its successors,
assigns and legal representatives, for obtaining, sustaining, reexamining or
reissuing the Patent, and for maintaining and perfecting Assignee's right to the
Patent.
In witness whereof, GREENLAND CORPORATION has caused these presents to
be signed by its duly authorized officer below named at San Diego, California.
GREENLAND CORPORATION,
a Nevada corporation
By:___________________________________
Printed Name: __________________________
Its: ___________________________________
State of California )
)
County of San Diego ) ss.
On April ____, 1999, before me, _____________________, a Notary Public,
personally appeared ________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the entity upon behalf of which the person acted, executed the
instrument on behalf of its successor and assignee Telenetics and pursuant to
authority duly received.
WITNESS my hand and official seal.
______________________________________ (Seal)
Signature
ASSIGNMENT OF UNITED STATES PATENT APPLICATION
Whereas, GREENLAND CORPORATION, a Nevada corporation, having a place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Assignor"), is the sole owner of the entire right, title and interest in and
to the following application for United States Letters Patent: Serial Number
08/589,454, entitled "Digital to Analog Modulator and Analog to Digital
Demodulator," inventors: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and A. ▇▇▇▇ ▇▇▇▇ ("Patent"); and
Whereas, TELENETICS CORPORATION, a California corporation having a
place of business in Lake Forest, California ("Assignee"), is desirous of
acquiring the entire right, title and interest in and to the Patent.
Now, therefore, for good and valuable consideration, the receipt and
sufficient of which are hereby acknowledged, effective April ___, 1999, Assignor
has sold, assigned and transferred, and by these presents does hereby sell,
assign and transfer, Assignor's entire right, title and interest in and to the
Patent, the inventions disclosed therein, all divisions, continuations and
continuations-in-part thereof, and all patents issuing on any of the foregoing,
and all reissues, reexaminations and extensions thereof, and the right to apply
for Letters Patent in foreign countries with full benefit of such priorities as
may now or hereafter be granted to Assignor by local laws or by treaty,
including any international convention for the protection of intellectual
property, all said rights to be held and enjoyed by Assignee for its own use and
for the use of its successors, assigns or other legal representatives, to the
full end of the term for which the Patent and other patents on such other
applications will be granted, reexamined, extended or reissued, as fully and
entirely as the same would have been held and enjoyed by Assignor if this
assignment and sale had not been made.
Assignor does hereby request and authorize the Commissioner of Patents
and Trademarks, U.S.A., to issue the Patent, when granted, in accordance with
this Assignment. Assignor further agrees that Assignor will, without demanding
any further consideration therefor, at the request of Assignee, provide all
assistance and execute any papers deemed necessary by Assignee, its successors,
assigns and legal representatives, for obtaining, sustaining, reexamining or
reissuing the Patent, and for maintaining and perfecting Assignee's right to the
Patent.
In witness whereof, GREENLAND CORPORATION has caused these presents to
be signed by its duly authorized officer below named at San Diego, California.
GREENLAND CORPORATION,
a Nevada corporation
By:_____________________________________
Printed Name: ____________________________
Its: _____________________________________
State of California )
)
County of San Diego ) ss.
On April ___, 1999, before me, _____________________, a Notary Public,
personally appeared ________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the entity upon behalf of which the person acted, executed the
instrument on behalf of its successor and assignee Telenetics and pursuant to
authority duly received.
WITNESS my hand and official seal.
______________________________________ (Seal)
Signature
Exhibit G -- AMR Inventory List
Box of 16
1 AirLink powers supply's at various stages
2 AirLink PCB's Photo receptor, Serial interface and Maxim transceivers
3 Plessey Transceivers
4. Plessey Transceivers
5 Plessey Transceivers
6 Final AirLink AMR test radios - 700 mw - 3/4 mile radius
7 Various components
8 DVP part 15 radios
9 Various IC's, PCB's and components
10 Various IC's, PCB's and components
11 Various IC's, PCB's and components + RF connectors
12 Plastic Meter Covers
13 Plastic Meter Covers
14 Meters - Electric, Gas, and water
15 Plastic meter Covers
16 Badger AMR water meter interface and specifications
1 Water Closet Demo
2 Power Conditioning Supplies - for screen rooms.
Exhibit H -- "AirLink AMR"
AirLink(TM) AMR
HISTORY
o March 1996 Greenland Corporation began developing a one way AMR
solution.
o October 1996 Greenland installed its first AMR system in
Emerald Peoples Utility District (EPUD).
- Read the mechanical meter using Infra Red Detection.
- Store Reads in Serial EEPROM.
- Send Reads every hour from installation.
- Benefits
- Very inexpensive - $15 per meter.
- Read transmitted every hour so monthly reads
were guaranteed.
- Problems
- Transmit times varied after 24 hours and
reporting conflicts made actual read through
put at 60%.
- Customer wanted accurate reads every hour
and really every 15 minutes.
- Solution
- AMR system has to be a two way system -
Meter interrogation is a must.
o November 1996 Greenland Starts to Develop the AirLink Two Way AMR
Solution.
o Design 1 - Part 15 radio based on the Plessey Transceiver chip
set.
- November 1997
- Greenland determined that a part 15 solution
was not viable.
-1-
- Hiring a new RF Engineer. Greenland
proceeded to build a Part 90 solution using
the Maxim Transceiver chip.
- March 1998
- It was determined and confirmed that the
Maxim Transceiver chip had an error.
- March 1998 Greenland acquired Check Central
- All budgetary demands for the AirLink AMR
was placed secondary. RF engineer was
discharged.
- June 1998
- ▇▇▇▇ ▇▇▇▇▇▇ was retained by Greenland's CEO
to build a radio solution.
- ▇▇▇▇▇▇ ▇▇▇▇ continued to try and find a
solution using the Plessey Radios.
- July 1998
- After a conversation with the FCC ▇▇▇▇▇▇
▇▇▇▇ took the Plessey radios and attempted
to amplify them to 1 watt.
- September 1998
- Greenland successfully amplified the Plessey
radios to 700mw. field test produced 3/4
mile range.
- It was determined that for $35,000 the
Plessy radios could be brought into Part 90
compliance and preliminary installations at
the three participating utilities could be
accomplished. For an additional $66,000 all
pilots would have been completed.
AMR SOLUTION CONSISTS OF:
1 MRU (Meter Responder Unit)
2 CRU (Collector Repeater Unit)
3 Base (CRU)
4 User Software
-2-
o MRU Consist of:
o Quiet power supply - 240V - 5V
o Read Meter
o Detect Power
o Watchdog Timer
o Respond to Commands
o Store reads in non volatile memory
o MRU
[Graphical representation of side view of MRU, with arrows indicating
IR Mechanical Pickup, Off Line Power Supply, CPU & Nonvolatile Memory, and
AirLink Digital Radio.]
CRU CONSIST OF:
o CRU
o AirLink Radio links to MRU
o Spread Spectrum Radio links to CRU
o CPU and non volatile memory
o Battery backup power supply
[Graphical representation of CRU, with arrows indicating AirLink Radio,
Spread Spectrum Radio, CRU CPU Board, and Power Supply and battery Backup.]
BASE STATION CONSISTS OF:
o CRU
o CRU with a serial link to a command computer at the utility's
main office
-3-
USER SOFTWARE CONSISTS OF:
o User Software
o Automates data collection from central computer
o Stores reads
o Notes MRU Status for utility use
PROTOCOL
o Protocol
o Star network protocol - only the base computer requests
information
o Localized CRU's collect data from MRU's after being commanded
by the Base Station
o Timing
o Packet sent to time all CRU's and MRU's
o Read
o Read command for last 15 minute read period
o Direct Read
o Read at time of request
o Status
o Status request for Power outage
o Packet Structure (CRU/MRU to BASE)
- SYNC 11 Bits
- Address 24
- Status 08
- Data 24
- CRC 24
--
91 Bits
-4-
BENEFITS OF:
o Differential Billing
o Power Outage
o Failure Point Determination
o Tampering Detection
BENEFITS OF 15-MINUTE READS
o Load Profiling - Okay
o Every evening computers can compare each day's usage (Red)
versus the average usage (Green)
[Graphical chart indicating average usage vs. last day's usage
omitted.]
o Load Profiling - Problem
o Notice that the usage never dropped below 4800 ▇▇▇▇▇. This
may indicate a pump or electric water heater on continuously.
Time for customer service to visit!
[Graphical chart indicating average usage vs. last day's usage
omitted.]
OPTIMIZING TRANSFORMERS
o Transformer Supplying Too Much Power
25 kV Transformer Supplying 35 kV
[Graphical representation of Exploding Transformer omitted.]
AirLink System calculates the load on transformers every day helping to
alleviate this problem.
o Transformer Supplying Too Little Power
35 kV Transformer Supplying 15 kV
WASTED POWER
------------
[Graphical representation of transformer transmitting power away from
power lines omitted.]
-5-
DIFFERENTIAL BILLING
o Virtual Load Shedding
o 15 Minute Reads, Differential Billing Becomes a Reality
POWER OUTAGE REPORTING
o Power outage reported within 5 minutes of occurrence.
o Ability to search system to determine failure point.
POWER OUTAGE TAMPERING
o A Single Outage
o Anytime an outage occurs, AirLink AMR notes the time, date of
the event and the exact reading. If the readings by AirLink
AMR and the meter are incorrect, by using the collected data
the utility can prove mathematically that the meter was
turned upside down and has been tampered with.
INSTALLATION
o Installation Is Very Simple and Straight Forward
[Photo of workers installing CRU or MRU omitted.]
INSTALLING CRU
[Photo of installed CRU omitted.]
o Install CRU to 20' Mast
o Connect Data/Power Cable to CRU
o Install Mast
o Connect Power Cable to AirLink AMR Power Supply
o Connect Data Cable to Serial Port on Collection Computer
o Install User Software
-6-
o Start at Collection Point
o Place CRU's on 2-mile Grids
o Place on Light Poles or Utility Poles 20' - 30' Above the
Ground
o Supply 120V AC @ 5 Amps
o Test Spread spectrum Links
INSTALLING MRU
o Attach MRU Power Clips to Each Power Leg on Meter
o Attach MRU IR Mechanical Sensor to Inside Bottom Plate 50 Mils From
Rotating Disk
o Twist on AirLink Housing to Meter Base
o Press Into Meter Socket, Ring and Tag
o Place IR Programmer Near MRU IR Programming Port
o Program Kh Value
o Program Current Meter Reading
o Validate Working MRU
o Log Installation As Required
SUMMARY
o Current Status
o Hardware
- Plessey Radio design needs to be amplified to 1 - 2
▇▇▇▇▇
- Side band suppression to comply to FCC part 90
o Firmware
- Up and Running
-7-
o User Software
- Up and running
- Software is "Bare Bones"
(fastfwd) Mapping for visual system
(fastfwd) Power outage search
(fastfwd) Control room
-8-