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Sometimes it’s easy to forget the differences between Canadians and Americans. Just ask Bruce Deming, a Farella Braun & Martel partner who represented a U.S. subsidiary of Toronto-based AirIQ Inc. in its $24 million acquisition of Irvine-based Aircept.com LLC. “It’s easy to let your guard down. You all speak the same language and things seem the same, but they’re not,” said Deming of the deal. “The systems are fairly similar but just different enough to create some confusion.” For example, the two countries have different Generally Accepted Accounting Principles. “There were fairly significant earn-outs based on financial performance. The buyers were thinking in terms of Canadian GAAP and the seller was thinking of U.S. GAAP,” he noted. Cross-border complications also cropped up in compensation plans for the companies. “Dealing with U.S. equity-based compensation plans and making that work � was a bit of a challenge,” Deming said. “When you get down a couple layers of detail, there are things that limit your flexibility.” Deming’s team worked with lawyers from Toronto-based Blake, Cassels & Graydon on behalf of AirIQ, a public company traded on the Toronto Stock Exchange. Aircept was represented by Paul, Hastings, Janofsky & Walker. Both companies create GPS-based and other wireless tracking and communication systems for vehicles. The purchase of Aircept gives AirIQ a stronger presence in the U.S. and consumer markets, Deming said. While working on the deal in Toronto earlier this summer, Deming witnessed his client’s technology firsthand. AirIQ’s CEO took him out for a drive in his car, which is equipped with a chip that tracks the speed and direction of the vehicle. Deming said the chief executive “was recounting the activities of his son from the night before and saw that he had been speeding.” Deming’s team included San Francisco associates Samuel Dibble and Alison Nameth. From Toronto, Blake, Cassels partner Frank Arnone and associate Eric Moncik also represented AirIQ. Corporate partner Peter Tennyson led the Paul, Hastings team, which included associates Brandon Howald and Alexander Lee. — Adrienne Sanders DEVICE DRAWS HIP CROWD It’s easy to raise money for a hip client. That’s what O’Melveny & Myers found when it sought a fourth round of financing for Danger Inc., which sells a so-called “hiptop” combination cell phone and Web browsing device. So many investors wanted in on the deal that the Palo Alto-based company expanded the round to $37 million. “This is a company that has a lot of traction, and a lot of people wanted to get into the dance,” said David Makarechian, a partner in O’Melveny’s Menlo Park office who led the transaction. Makarechian has enjoyed being part of the Danger scene. “It’s a real fun client because they make something you can touch and feel that has a lot of buzz,” he said. Makarechian owns a hiptop device and says he’s on a list to receive the company’s next generation product. Danger’s pocketsize wireless device allows consumers to surf the Internet, send instant messages and e-mails, talk on the phone and play games. The device also has an accessory that can connect to a camera. In 2003, PC World named the device one of its products of the year. Nearly all of Danger’s existing institutional investors opened their wallets for the latest financing, including Mobius Venture Capital, Redpoint Ventures, Meritech Capital Partners, Softbank Capital Partners, Venture Strategy Partners and Diamondhead Ventures. Two new investors also pumped money into the company: Institutional Venture Partners and Adams Street Partners. Cooley Godward partners James Fulton Jr. and John Geschke and associate David Oh represented the investors. O’Melveny associates Gerald Tsai and Jonathan Belli assisted Makarechian on the transaction. Danger announced the financing Friday, the same day it announced a partnership with Sharp Corp. for the development and distribution of Danger devices in North America and Europe. O’Melveny’s Tokyo office provided assistance on that deal, which was primarily handled by Danger in-house counsel Scott Darling. — Brenda Sandburg

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