ASSET PURCHASE AGREEMENT
EXHIBIT
10.1
THIS
ASSET PURCHASE AGREEMENT (“Agreement”) is made as of
the Effective Date provided for below between CLEARONE COMMUNICATIONS,
INC., a Utah corporation (the “Company”), and
XXX-A-VISION MFG. CO., INC., a Missouri corporation (the
“Buyer”), who agree as follows:
1. Sale
of Assets.
a. Subject
to the representations, warranties and agreements of the parties hereto and
the
terms and conditions herein set forth, the Company agrees that, at the Closing
(as herein defined), the Company shall sell, transfer and deliver to the
Buyer,
for the consideration hereinafter provided, the following assets and property
owned by Company and used by it in the conduct, as presently operated, of
its
Camera Business (as defined in Section 15 below) (excluding, however, the
“Excluded Assets” described below) (collectively, the “Assets”):
1. All
of the Company’s machinery, equipment, tools and other
tangible personal property described on Schedule 1.a.1 attached hereto
(“Equipment”);
2. All
of the Company’s rights, benefit, interest and
obligations (collectively, the “Warranty Obligations”) with respect to
the warranties (“Warranties”) issued by the Company with respect to the
Products (as such term is defined immediately below). The obligations of
the
Buyer with respect to the Warranties are subject to the terms of Section
2.b.
below.
3. All
of the Company’s (i) customer lists, records and
files, (ii) production records, (iii) technical drawings, specifications
and
manuals and other information related to the production of the products
(“Product” or “Products”) produced and sold as a part of the
Camera Business, (iv) marketing plans and reports, (v) supplier and vendor
lists, contacts and information (vi) sales records, (vii) pricing sheets,
(viii)
customer proposals and bids, (ix) records pertaining to product warranty
inquiries concerning Warrantied Products (as defined in Section 2.b.i. below)
and (x) other pertinent and material sales information and records, insofar
as
the items referenced in clauses (i) - (x) relate solely to the Camera
Business (such items referenced in clauses (i) - (x) being hereinafter
collectively referred to as the “Camera Business Records”);
4. Subject
to Section 1.d below, all of the Company’s
inventories (raw and finished), work in process and sub-assemblies held for
sale, consumption or otherwise used in the operation of the Camera Business,
as
selected by the Buyer in its sole discretion, provided that there shall be
no
adjustment to the Purchase Price hereunder in respect of any available
inventories not so selected by the Buyer; and
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5. All
of the Company’s computer software utilized solely in
the Camera Business (“Software”), including but not limited to, drivers
for the Products, and the Intellectual Property, all as listed on Schedule
1.a.5, but subject to the provisions of Section 1.e. below (as so qualified
and together with the Software, the “Conveyed Intellectual
Property”).
b. To
avoid doubt, the following assets of the Company (collectively, the “Excluded
Assets”), among others, shall be retained by the Company, and are not being
sold or assigned to the Buyer hereunder:
1. All
corporate names and trade names, trademarks or service
marks that are used in connection with any of the Company’s businesses other
than the Camera Business;
2. All
taxpayer and other identification numbers and minute
books, stock transfer books, tax returns, corporate seals and all other
documents relating to the organization, maintenance and existence of the
Company
as a corporation;
3. The
Company’s rights under this Agreement, the agreements
to be executed by the Company in connection herewith and any agreements relating
to the Camera Business, including any rights with respect to rebates and
market
development funds under certain agreements between the Company and its
customers;
4. All
cash and cash equivalents of the Company;
5. The
name and xxxx “ClearOne” and all combinations or
derivations thereof;
6. The
Company’s accounts receivable as of the Closing Date,
but including in all events any amount owing on account of Products shipped
by
the Company prior to Closing or in connection with Open Purchase Orders (as
defined in Section 1.d.);
7. Copies
of such Camera Business related records as it deems
appropriate;
8. Any
telephone numbers; and
9. Any
websites.
c. The
sale of the Assets shall be made free and clear of all liabilities, obligations,
security interests, and other encumbrances or liens of any and every kind
and
nature whatsoever except (i) the Security Interest referenced in Section
2.a.2.
below, (ii) the Assumed Liability referenced in Section 2.b. below, (iii)
the
Permitted Encumbrances, and (iv) Buyer’s Assumed Tax Liability (as referenced
below).
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d. The
Buyer acknowledges that the Company, to the extent possible, is depleting
raw
inventory and finished goods relating to the Camera Business. Accordingly,
the
Company has been and will be seeking to obtain purchase orders from its
customers for the Products up to the date of Closing. In regard to all such
purchase orders that are obtained prior to the Closing and not filled as
of the
Closing (“Open Purchase Orders”), the Buyer agrees that (i) inventory
required to fill such purchase orders (but only so much inventory as is so
required) will comprise part of the Excluded Assets and will be retained
by the
Company and not sold to the Buyer, and (ii) inventory on order and in process
required to fill such purchase orders will be completed and delivered to
the
Company. The Company agrees to fill such purchase orders and deliver the
Products required thereunder within a commercially reasonable time. If the
Company receives a cancellation of an Open Purchase Order subsequent to Closing,
the Company shall promptly deliver the Products subject to such Open Purchase
Orders to the Buyer F.O.B. Buyer’s facility in Raytown, Missouri.
e. The
Company shall continue to use its best efforts to obtain the consent of ArcSoft,
Inc. (“ArcSoft”) to the assignment to the Buyer of the License Agreement
(the “ArcSoft Agreement”) between the Company and ArcSoft pertaining to
the ArcSoft Software (as defined in Schedule 1.a.5. hereto). The Company
maintains the position that the ArcSoft Agreement is valid and in force,
but has
been notified by ArcSoft that ArcSoft considers the agreement to be expired.
Buyer acknowledges that the Company may be unable to obtain ArcSoft’s consent to
the assignment of the ArcSoft Agreement and that ArcSoft may insist that
the
Buyer enter into a new license agreement with respect to the ArcSoft Software
and that, in either case, any rights of the Company to the ArcSoft Software
will
not comprise part of the Assets being sold and conveyed hereunder.
2. Purchase
Price.
a. Payment
of Purchase Price. The purchase price which the Buyer shall pay to the
Company for the assets to be sold and transferred to the Buyer hereunder
(“Purchase Price”) shall be Seven Hundred and Fifty Thousand Dollars
($750,000.00), subject to being adjusted as provided in Schedule 2.a attached
hereto (the “Price Adjustment”), to be paid as follows, plus the
assumption of the Assumed Liability and Buyer’s Assumed Tax Liability:
1. Delivery
at the Closing of the sum of Three Hundred
Seventy-Five Thousand Dollars ($375,000.00), subject to the Price Adjustment,
by
immediately available funds payable to the Company (the “Down Payment”); and
2. Delivery
at the Closing of the Buyer’s promissory note
(the “Note”) in the form attached as Exhibit “A”, in the principal
amount of Thousand Dollars ($375,000.00), subject to the Price Adjustment,
bearing interest at the rate of eight percent (8%) per annum and, subject
to the
Price Adjustment, payable in twenty-four (24) monthly installments of $16,960.23
to be secured by a first lien security interest in all of the Assets (the
“Security Interest”), as provided in that certain Security Agreement in
the form attached as Exhibit “B,” to also be delivered to the Company at
Closing.
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b. Assumed
Liability.
i. At
the Closing, the Buyer will assume and perform the Company’s Warranty
Obligations under the Warranties issued by the Company with respect to Products
sold within two (2) years prior to the Closing Date, along with any Products
sold pursuant to Open Purchase Orders (all of which Products are collectively
referred to hereinafter as “Warrantied Products”), provided that the cost
of such performance (as the term “cost” is referenced below) shall not exceed
$100,000 in the 730-day period following the Closing Date, the Company hereby
agreeing to be responsible, to pay or reimburse the Buyer and to indemnify
and
hold the Buyer harmless to the extent that all costs of performing the Company’s
obligations under the Warranties with respect to the Warrantied Products
exceed
$100,000 in the 730-day period following the Closing Date (the obligation
of the
Buyer under this Section 2.b being referred to herein as the “Assumed
Liability”). For the absence of doubt, the Company will only reimburse for
costs that exceed One Hundred Thousand Dollars ($100,000.00) during the 730-day
period, which costs shall be strictly limited to the sum of a) repair costs
at
the Buyer’s normal and customary labor charges and b) reasonable cost of
material that need to be purchased subsequent to the Closing Date in order
to
permit the Buyer to perform the referenced Warranty obligations hereunder.
A
description of the Company’s standard warranty terms is set forth in Schedule
2.b. From the date hereof until Closing, the Company will continue to
process warranty claims and inquiries in accordance with its historical practice
and in the normal course of its business. At the Closing, the Company will
deliver, as part of the Camera Business Records, records pertaining to inquiries
received by the Company pertaining to Warrantied Products. Within ten (10)
days
of the Closing Date, the Company will deliver to the Buyer a list of Warrantied
Products sold within the two years prior to and including the Closing Date
to
which the Warranty provisions of this paragraph shall apply; and so long
as any
Open Purchase Orders remain to be filled, the Company will update the Buyer
on a
weekly basis with information pertaining to Products shipped pursuant to
such
Open Purchase Orders.
ii. The
foregoing notwithstanding, to the extent that the cost of the Buyer’s
performance pursuant to this Section 2.b. in the 365-day period following
the
Closing Date (see "First Year") exceeds $50,000, the Buyer shall be entitled
to
set-off such excess against the monthly payments next due to the Company
under
the Note until the full amount of such excess has been set-off or the First
Year
shall have elapsed, whichever is the first to occur, and interest shall cease
to
accrue under the Note with respect to all such amounts so offset onto the
end of
the First Year. In the event of any such set-off, the unpaid balance of the
Note
shall be reamortized effective with the thirteenth (13th) monthly
payment due thereunder so as to be repaid in full in twelve (12) monthly
installments with interest thereon at the rate of eight percent (8%) per
annum
from and after the first to day the following the end of the First Year.
iii. The
Company agrees to use its reasonable best efforts, without spending money
or
making any binding agreements or commitments, to forward all customer contacts
concerning Warranty Obligations to the Buyer. Without limiting the generality
of
the foregoing, the Company shall use its reasonable best efforts to cause
all
telephone contacts received by it concerning the Warrantied Products to be
forwarded and referred to the Buyer at (000) 000-0000 and shall, within ten
(10)
business days of Closing, alter its website to include hot links from the
sale
and warranty sections of the website to the Buyer’s website with respect to such
Warrantied Products.
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c. Assumed
Tax Liability. The Company will pay all personal property taxes due and
payable with respect to the Assets as of the Closing. At the Closing, the
Buyer
shall assume and be liable to timely pay the pro-rated portion of personal
property taxes not yet due and payable with respect to Assets acquired by
it
hereunder. All personal property taxes with respect to Assets acquired hereunder
shall be pro-rated as of the Closing Date between the Company and the Buyer
(“Buyer’s Assumed Tax Liability”).
d. Allocation
of Purchase Price. One Hundred Fifty Thousand Dollars ($150,000.00) of the
purchase price for the Assets shall be allocated to the non-compete agreement
set forth below and the balance of the purchase price shall be allocated
among
the Assets in accordance with the Form 8594 attached hereto as Exhibit
“C”, and the parties will report the same accordingly for tax
purposes.
e. Escrow
Agreement. Following Closing, if the Buyer reasonably believes in good faith
that there has been a misrepresentation or breach of a warranty, agreement
or
covenant under this Agreement, other than with respect to the warranties
(“Product Warranties”) set forth in the first sentence of Section 3.e. (a
“Breach”), having a Material Adverse Effect (as defined in Section
15.e.), then in addition to all other rights and remedies of the Buyer
hereunder, but subject to the terms of Section 12, (i) if the amount of all
losses, damages, costs and expenses reasonably anticipated to be incurred
by the
Buyer as a result of the Breach (“Loss Estimate Amount”) is $5000.00 or
less, the Buyer shall be entitled, upon written notice to the Company of
such
Breach (a “Set-Off Notice”) to retain and set-off such Loss Estimate Amount (the
“Set-Off Remedy”) against any of the amounts owed by the Buyer under the
Note, provided, however, that if the Breach resulting in a Set-Off Remedy
is
subsequently cured by the Company, then the Buyer shall promptly pay to the
Company any amount by which a Set-Off Remedy amount exceeds any loss, damages,
costs or expenses actually incurred by the Buyer with respect to the Breach;
and
provided further that, upon receipt of a Set-Off Notice, the Company may
give
written notice that it disputes such Set-Off Remedy (“Dispute Notice”), in which
case the Buyer shall pay the relevant Loss Estimate Amount in respect of
such
Set-Off Remedy into the Escrow Account under the Escrow Agreement; and (ii)
if
the Loss Estimate Amount is more than $5000.00 (alone or in the aggregate
with
all prior Loss Estimate Amounts not previously claimed in a Set-Off Remedy
under
this section), the Buyer may elect to (a) give written notice (an “Escrow
Notice”) to Company of such Breach and of the amount of the Loss Estimate
Amount reasonably anticipated to be incurred by the Buyer as a result of
such
Breach and (b) thereafter pay into the Escrow Account referenced in the Escrow
Agreement attached as Exhibit “D” and to be executed simultaneously
herewith, amounts otherwise falling due under the Note, but in no event to
exceed the Loss Estimate Amount. Thereafter, any dispute between the parties
with respect to any Loss Estimate Amount paid into the Escrow Account shall
be
resolved as provided in the Escrow Agreement and Section 13 below (collectively,
the “Escrow Agreement Remedy”). As to Product Warranties, the Buyer shall
be liable, notwithstanding any breach by Company of the first sentence of
Section 3.e., or anything herein to the contrary, to honor the Warranties
as set
forth in Section 2.b., and the Company shall have no further liability in
connection therewith except as provided in Section 2.b.
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f. The
Company shall indemnify and save and hold
the Buyer harmless from and against, and shall pay upon demand, any damage,
liability, loss, deficiency, settlement, fees, penalties, or expenses (including
without limitation, reasonable attorneys’ fees and other reasonable costs and
expenses incident to any suit, action, proceeding, demand, assessment,
judgment,
penalty or investigation or defense of any claim) arising out of or resulting
from any sales, use, withholding or other taxes other than the Assumed
Tax
Liability for which the Buyer may have successor liability based on the
transaction.
3. Representations
and Warranties. The Company represents and warrants as follows:
a. The
Company is a corporation duly organized, validly existing and legally operating
in the State of Utah and has all requisite power and authority to (1) own
its
properties, including the Assets; (2) make, execute and perform this Agreement
and all documents to be executed in connection herewith; and (3) conduct
the
Camera Business as and where now being conducted; however, without limiting
any
other representation or warranty made by the Company in this Agreement, the
Company does not hereby make any representation or warranty that it is not
in
violation of any third-party patents, trade secret or know-how in the production
or manufacture of the Products.
b. The
execution and delivery of this Agreement and the sale contemplated hereby
have
been duly authorized by the Company.
c. Except
as otherwise described in Section 1.e. and Schedule 3.f, the Company has,
and as
of the Closing Date will have, good and marketable title to all of its
properties and assets which are being sold, transferred, and conveyed hereunder,
subject to no mortgage, pledge, lien, encumbrance, security interest, agreement,
claim, covenant, easement, restriction, reservation, exceptions or charge,
other
than with respect to the Assumed Liability, the Security Interest, the Permitted
Encumbrances and the Buyer’s Assumed Tax Liability.
d. There
has been no person employed or retained by the Company, or who is entitled
to be
paid under any agreement, express or implied, with it, as a finder or broker
in
connection with the transactions contemplated hereunder, and the Company
will
indemnify and hold harmless the Buyer from and against any liability for
any
claim, demand, or payment of any broker’s or finder’s commission, fee, or
expenses in connection with this Agreement claimed under alleged agreement
with
the Company.
e. Other
than with respect to repair or other work the Company is performing arising
out
of its obligations with respect to Product Warranties, each of the Products
has
been manufactured, sold or delivered by the Company in conformity with all
applicable contractual commitments, all express and implied representations
and
warranties, all Product literature, all applicable laws, regulations and
other
governmental requirements, excluding any of the same governing patents,
copyrights or trade secrets, and to the Company’s Knowledge, all applicable
laws, regulations and other governmental requirements governing patents,
copyrights or trade secrets. With respect to contractual restrictions, the
Products are subject only to the Warranties and the Company’s standard terms and
conditions of sale. The Company’s standard terms and
conditions of sale for each of the Products are as set forth in the attached
Schedule 3.e.
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f. Schedule
1.a.5. sets forth a complete and correct list of the Intellectual Property
used or held for use in the Camera Business. Except as set forth in Section
1.e.
and in Schedule 3.f. attached hereto, the Company owns and possesses all
right, title and interest in and to, or has a valid, enforceable and
transferable license to use the Intellectual Property. Except as set forth
in
Schedule 3.f. attached hereto, no claim by any third party contesting the
validity, enforceability, use or ownership of any of the Intellectual Property
has been made or is currently outstanding or, to Company’s Knowledge, is
threatened. Except as set forth in Schedule 3.f. attached hereto, the
Company has not received any notices of and is not aware of any facts that
indicate a likelihood of any infringement or misappropriation by, or conflict
with, any Person with respect to the Intellectual Property, including any
demand
or request that Company license rights from, or make royalty payments to,
any
Person. Except as set forth in Schedule 3.f. attached hereto, to the
Company’s Knowledge, the Company has not infringed, misappropriated or otherwise
conflicted with any proprietary rights of any third parties and the Company
is
not aware of any infringement, misappropriation or conflict that will occur
as a
result of the continued operation of the Camera Business or the Assets.
g. The
Company is in compliance where it engages in the Camera Business, to the
extent
a failure to comply would have a Material Adverse Effect, with all applicable
federal, state, local and international laws, ordinances and regulations
relating to the Camera Business and the Assets, including, without limitation
all environmental, labor, employment, health and safety and other laws, statutes
and regulations, but excluding (i) Intellectual Property laws, rules and
regulations which matters are the subject of a separate warranty hereunder,
(ii)
tax laws, rules and regulations, which matters are the subject of a separate
warranty hereunder, (iii) the matters which are the subject of subsection
3.a.,
and (iv) current or planned ROHS environmental requirements imposed by the
European Union. The Company will complete the process of updating existing
compliance reports for FlexCam iCam and the DocCam Pro to the following reports:
FCC Part 15, Subpart B; ICES-003; EN55022:1998; EN55024:1998; EN61000-3-2;
EN61000-3-3; and IEC/EN 60950-1:2001 1st Edition.
h. To
the Company’s Knowledge and based on its understanding and interpretations of
relevant law (the “Tax Qualification”), the Company has filed all tax
returns, including, without limitation, estimated tax returns, withholding
and
quarterly sales/use tax returns required to be filed by it under the laws
of the
United States, the State of Utah and each other state or jurisdiction in
which
the Company is required to file tax returns. Subject to the Tax Qualification,
the Company has paid and/or deposited all taxes for the periods covered by
such
returns and all taxes for which the laws of any state or other taxing
jurisdiction impose successor liability. The Company's federal and state
tax
returns have not been audited by the Internal Revenue or any state department
of
revenue, no agreements are currently in effect by or on behalf of the Company
for the extension of time for the assessment of any tax. There are no tax
liens,
whether imposed by any federal, state or local taxing authority, outstanding
against any of the Assets.
4. Representations
and Warranties of the Buyer. The Buyer represents and warrants as
follows:
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a. The
Buyer is a corporation duly organized, validly existing and legally operating
in
the State of Missouri and has all requisite power and authority to make,
execute
and perform this Agreement and all documents to be executed in connection
herewith; furthermore, neither the Buyer nor the Buyer’s principals are party to
or subject to any non-competition agreement that would preclude or prohibit
the
Buyer’s operation of the Camera Business following Closing.
b. The
execution and delivery of this Agreement and the sale contemplated hereby
have
been duly authorized by the Buyer.
c. There
has been no person employed or retained by the Buyer or who is entitled to
be
paid under any agreement, express or implied, with it, as a finder or broker
in
connection with the transactions contemplated hereunder, and the Buyer will
indemnify and hold harmless the Company from and against any liability for
any
claim, demand or payment of any broker’s or finder’s commission, fee or expenses
in connection with this Agreement claimed under alleged agreement with the
Buyer.
5. Responsibility
for Other Party’s Liabilities.
a. Except
for the Assumed Liability, the Security Interest, the Permitted Encumbrances,
the Buyer’s Assumed Tax Liability and the Buyer’s indemnification obligations
hereunder, the Buyer does not have, and will not have after the Closing Date,
any liability or responsibility whatsoever for any liability or obligation
of
any nature, whether accrued, absolute, contingent, or otherwise, including,
without limitation, tax deficiencies or other tax liabilities of the Company
existing or accrued as of the Closing Date or thereafter arising from any
transactions or events which shall have occurred prior to Closing, whether
or
not disclosed to Buyer, including but not limited to any liability or
responsibility for any liability or obligation of any nature arising out
of the
delivery of any of the Assets being sold hereunder.
b. Except
as specifically set forth herein, the Company does not have, and will not
have
after the Closing Date, any liability or responsibility whatsoever for any
liability or obligation of any nature, whether accrued, absolute, contingent,
or
otherwise, including, without limitation, tax deficiencies or other tax
liabilities of the Buyer accruing after Closing, with respect to the Assets
being conveyed hereunder. The Buyer furthermore specifically acknowledges
that
the Company is not assigning any contractual rights hereunder with respect
to
the Company’s Camera Business suppliers, customers, dealers and distributors,
and that, except as specifically set forth herein, the Buyer must negotiate
its
own contracts with any such suppliers, customers, dealers and distributors
with
respect to the Buyer’s operation of the Camera Business following Closing. The
Company covenants to use its best efforts to work with the Buyer in
transitioning the Camera Business to the Buyer and introducing the Buyer
to
Company’s suppliers, customers, dealers and distributors with respect to the
Camera Business. In no event, however, shall the Company be required to expend
money or otherwise incur financial obligations in connection with such
transition.
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c. Without
limiting the generality of the foregoing, the Company and the Buyer acknowledge
that certain items of inventory comprising part of the Assets being conveyed
hereunder have the Company’s logo affixed thereto (collectively, the “Logo
Products”). With respect to the Logo Products, the Company and the Buyer
agree as follows: (i) by conveying the Logo Products, the Company is not
conveying a license to the Buyer to use the Company’s name or logo, but merely
granting the Buyer the right to use and sell the Logo Products in the normal
course of the Buyer’s operation of the Camera Business following Closing; and
(ii) the Buyer agrees to indemnify the Company with respect to any product
liability claim that may be brought against the Company as a result of use
or
sale by the Buyer of the Logo Products following Closing (“Logo Products
Indemnity”), except as otherwise provided in Section 2.e. herein.
6. Access,
Information and Inspection. The Company shall give to the Buyer and to the
Buyer’s counsel, accountants and other representatives full access, for review,
inspection, and other purposes, during normal business hours throughout the
period prior to the Closing Date, to all of the assets, properties, books,
contracts, commitments and records, pertaining to the Camera Business, and
shall
furnish the Buyer during such period with all such information concerning
the
affairs pertaining to the Camera Business as the Buyer reasonably may request.
7. Transactions
Prior to Closing. The Company agrees that, from the date hereof to the
Closing Date, it will:
a. Maintain
the Assets to be sold, transferred and conveyed which are listed in subsections
1, 4 and 5 of Section 1.a., in the same physical condition as exists as of
the
Effective Date, reasonable wear and use excepted; provided that the Company
shall have no obligation to repair or replace any of such Assets damaged
or
destroyed by fire or other casualty prior to the Closing. Notwithstanding
the
foregoing, the Buyer acknowledges that pending Closing, the Company’s
inventories, work in process and sub-assemblies shall be dealt with by the
Company in the ordinary course of business.
b. Use
its best efforts without expending money or making any binding agreements
or
commitments except in the ordinary course of business, to preserve the Company’s
Camera Business intact, and to preserve its present relationships and goodwill
with its suppliers, vendors, customers, and others having business relations
with it related to the Camera Business;
c. Perform
any and all covenants, terms and conditions of any and all contracts and
agreements to which the Company is a party related to the Camera Business,
not
commit a breach of any such contract or agreement, or amend, modify or terminate
any such contract or agreement except in the ordinary course of business;
d. Not
engage in any sale, enter into any transaction, contract or commitment, or
incur
any liability or obligation related to the Camera Business not in the ordinary
course of business; and
e. Maintain
insurance coverage up to the Closing Date in such amounts and upon such terms
as
existed as of April 15, 2006.
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8. Buyer’s
Conditions Precedent. The Buyer’s obligation to consummate the transactions
in this Agreement is subject to the fulfillment prior to or at the Closing
of
each of the following conditions:
a. The
Company shall have delivered to the Buyer possession of the Assets through
delivery of the xxxx of sale and assignment (“Xxxx of Sale and
Assignment”) in the form attached as Exhibit “E”.
b. The
representations and warranties of the Company contained in this Agreement
shall
be true at and as of the time of Closing as though such representations and
warranties were made at and as of such time.
c. The
Company shall have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by it prior to
or at
the Closing.
d. The
Buyer shall have executed a contract with each of
NeoSCI, Starin Marketing, Review Video Services, Inc., Newcomm Distributing,
VSO
Marketing, and T2 Supply, LLC, each of which shall be substantially in the
form
of distributor agreement attached hereto as Exhibit “F,” with the Buyer having
the rights and obligations of the Company under such form of distributor
agreement.
e. There
having been no material adverse change in the
physical condition of the Assets to be acquired by the Buyer since the Effective
Date.
f. The
Company shall have provided the Buyer with results of
UCC lien searches from all applicable filing offices in the State of Utah
showing that no liens or other encumbrances affect the Assets, other than
Permitted Encumbrances.
g. No
action, suit or proceeding before any court or any
governmental or regulatory authority shall have been commenced or threatened,
and no investigation by any governmental or regulatory authority shall have
been
commenced or threatened against the Company seeking to restrain, prevent
or
change the transactions contemplated hereby or questioning the validity or
legality of any of such transactions or seeking damages in connection with
any
of such transactions.
h. None
of the Assets shall have been materially damaged by
any casualty.
9. Company’s
Conditions Precedent. The Company’s obligation to consummate the
transactions in this Agreement is subject to the fulfillment prior to or
at the
Closing of each of the following conditions:
a. The
Buyer shall have performed and satisfied in all material respects each of
its
obligations hereunder required to be performed and satisfied by it at or
prior
to the Closing, each of the representations and warranties of the Buyer
contained in this Agreement shall be true at and as of the Closing as though
such representations and warranties were made at and as of such time, and
the
Company shall have received a certificate signed by a duly authorized officer
or
representative of the Buyer to the foregoing effect.
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b. The
Buyer shall have delivered to the Company the fully executed original of
the
Note, the Security Agreement, the Escrow Agreement and any ancillary documents
(“Ancillary Documents”) required to be delivered therewith or reasonably
requested by the Company, and the Buyer shall have tendered payment of the
amounts described in Section 2.a. to the Company.
c. No
action suit or proceeding before any court or any governmental or regulatory
authority shall have been commenced or threatened, and no investigation by
any
governmental or regulatory authority shall have been commenced or threatened
against the Company or the Buyer seeking to restrain, prevent or change the
transactions contemplated hereby or questioning the validity or legality
of any
of such transactions or seeking damages in connection with any of such
transactions.
d. The
Company shall have obtained the consent of its various dealers and distributors
to the modification, upon terms acceptable to the Company, in its sole
discretion, of existing agreements between the Company and such dealers and
distributors in order to remove products related to the Camera Business from
the
scope of such agreements.
10. Closing.
a. The
closing hereunder (the “Closing”) shall take place at the offices of the
Xxxxxxx Xxxxx & Xxxxxxx at 10:00 a.m. on Wednesday, August 30, 2006 (the
“Closing Date”) and the provisions of Exhibit “G” shall be
applicable thereto.
b. At
the Closing, the Company shall deliver to the Buyer the following:
i. the
Xxxx of Sale and Assignment;
ii. a
certificate stating that all representations and warranties of the Company
are
true as of the Closing Date and that all conditions precedent or concurrent
to
Closing this transaction have been completed;
iii. the
Camera Business Records;
iv. all
other instruments, certificates and documents, with the exception of the
Bills
of Materials, required to be delivered by the Company prior to or at Closing
under this Agreement; and
v. “bills
of materials” with respect to the following Assets being conveyed hereunder (in
respect of which the Company gives no warranty) (“Bills of
Materials”):
(a) a
list of finished goods inventory comprising part of the Assets that is on
order
or in process as at the Closing Date (“Finished Goods WIP”), together
with a scheduled delivery date for such items, which list shall be acknowledged
by Buyer; following the Closing, the Company shall cause such inventory to
be
completed and delivered to Buyer, F.O.B. Buyer’s facility in Raytown,
Missouri;
11
(b) a
list of finished goods inventory comprising part of the Assets that is to
be
delivered at Closing, which list shall be acknowledged by Buyer; and
(c) a
description of the following inventory comprising part of the Assets, which
inventory shall be delivered by the Company to the Buyer in connection with
Closing: (i) all raw materials inventory comprising part of the Assets, net
of
the Retained Raw Materials, as provided below; (ii) all work in process
inventory comprising part of the Assets, net of the Retained WIP as provided
below; and (iii) all sub-assemblies inventory comprising part of the Assets,
net
of the Retained Sub-assemblies, as provided below.
“Retained
Raw Materials” means so much, and only so much,
of the raw materials inventory as is required to complete the Finished Goods
WIP, provided however, that the parties acknowledge that certain of the Retained
Raw Materials is on spools or reels or other means of storage such that it
is
not reasonably possible to retain only so much thereof as required for the
purpose as aforesaid and agree that the same (i) shall be listed at Closing
and
acknowledged by the Buyer and the Company and (ii) delivered by the Company
to
the Buyer, F.O.B. Buyer’s facility in Raytown, Missouri, within 30 days after
the Closing. “Retained WIP” means so much and only so much of the work in
process inventory as is required to complete the Finished Goods WIP.
“Retained Sub-Assemblies” means so much, and only so much of the
sub-assemblies inventory as is required to complete the Finished Goods
WIP.
For
greater certainty, in connection with the Closing, the Company
shall physically deliver to the Buyer the Equipment, the Software and the
inventory comprising part of the Assets in accordance with the provisions
of
this Section 10 and Exhibit G hereto.
c. At
the Closing, the Buyer shall deliver to the Company (1) the Down Payment,
(2)
the Note, Security Agreement and any Ancillary Documents, (3) a certificate
of
the Buyer stating that all representations and warranties of the Buyer are
true
as of the Closing Date and that all conditions precedent or concurrent to
Closing this transaction have been completed, and (4) all other instruments,
certificates and documents required to be delivered by the Buyer prior to
or at
Closing under this Agreement.
11. Restrictive
Covenants.
a. The
Company. In consideration of the sum of $150,000.00 as hereinabove set
forth, the Company agrees that for the period of five (5) years from the
Closing
Date (the “Restricted Period”) it will not:
12
i. Directly
or indirectly, either individually or as a principal, partner, agent, employee,
employer, consultant, stockholder, joint venturer, or investor, or as a director
or officer of any corporation or association, or in any other manner or capacity
whatsoever, own or engage in a business located anywhere in the world that
is
directly competitive with any Product or service offered by the Camera Business
as of the Closing Date, or advise any such business with respect to the Camera
Business. Notwithstanding anything to the contrary in
this Section 11, (a) the Company shall not be restricted from being, and
shall
be entitled to be a passive owner of not more than ten percent (10%) of the
outstanding securities of any class of an entity, a component of which is
engaged in a business which is competitive with the Camera Business, which
entity is publicly traded, provided that the Company does not have any active
participation in the business of such entity, (b) the Company shall be entitled
to be acquired by, merged or otherwise consolidated or combined with a business
or person, a component of which is engaged in a business which is competitive
with the Camera Business, so long as the other business or person is not
an
affiliate of the Company, and (c) the Company shall be entitled to sell other
products, not comprising part of the Camera Business, to customers that may
be
competitive with the Buyer. The term “affiliate” means any person controlling,
controlled by, or under common control with any other person. For purposes
of
this definition, “control” (including “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 the ownership of voting securities or otherwise. In addition to the
representations and warranties set forth in Section 3 herein, the Company
represents and warrants to the Buyer that as of the Effective Date it is
not
engaged in any negotiations with any third party to be acquired by, merged
or
otherwise consolidated or combined with such third party. The completion
by the
Company of Open Purchase Orders pursuant to Section 1.d shall not constitute
a
violation of this Section 11.a.
ii. Disclose
or divulge any information, techniques, combinations of techniques, methods,
systems or production matters (collectively, “Confidential Information”)
that the Camera Business uses in the conduct of its business constituting
a
trade secret under Utah law or which could otherwise be reasonably expected
to
result in economic harm to the Buyer if disclosed and utilized by competitors
of
the Camera Business, provided that the foregoing shall not apply to Confidential
Information which (a) is or becomes generally available to the public other
than
as a result of disclosure by the Company, or (b) with respect to which
disclosure is compelled by law or court order.
13
b. Buyer.
In consideration for the Company’s agreement to sell the Assets to the Buyer,
the Buyer agrees for itself and for any of its affiliates that it will treat
the
Company’s customer lists constituting part of the Assets (“Customer
Lists”) as confidential information; further, that it will not, during the
Restricted Period, directly or indirectly, either individually or as a
principal, partner, member, agent, employee, employer, consultant, stockholder,
joint venturer, or investor, or as a director or officer of any corporation,
entity or association, or in any other manner or capacity whatsoever, whether
through use of the Customer Lists or otherwise, engage in a business that
is
directly or indirectly competitive with any product or service offered by
the
Company (excluding the Camera Business) as of the Closing Date that is listed
or
described in Schedule 11.b. attached hereto (the “Company’s
Business”). Notwithstanding anything to the contrary in this Section 11.b.,
(a) the Buyer shall not be restricted from being, and shall be entitled to
be a
passive owner of not more than ten percent (10%) of the outstanding securities
of any class of an entity, a component of which is engaged in a business
which
is competitive with the Company’s Business, which entity is publicly traded,
provided that the Buyer does not have any active participation in the business
of such entity and provided the Buyer does not provide such entity with the
Customer Lists, and (b) the Buyer shall be entitled to be acquired by, merged
or
otherwise consolidated or combined with a business or person, a component
of
which is engaged in a business which is competitive with the Company’s Business,
so long as the other business or person is not an affiliate of the Buyer.
The
term “affiliate” means any person controlling, controlled by, or under common
control with any other person. For purposes of this definition, “control”
(including “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
the
ownership of voting securities or otherwise.
c. Remedies.
Each party recognizes that irreparable damage will result to the other party
in
the event of the breach of this Section 11 and agrees that, in the event
of such
a breach, the other party shall be entitled, in addition to any other legal
or
equitable damages and remedies to which it may be entitled or which may be
available, to specific performance with respect to the covenants and agreements
of this paragraph and/or an injunction to restrain the violation of the
provisions of this paragraph by the other party and/or all other persons
acting
for or with it. The parties further agrees that in the event that an action
is
brought for the enforcement of this section, and if the Court shall find
on the
basis of the evidence introduced in said action that any part of this section
is
unreasonable either as to time, area or activity covered therein, or violates
any statute, judicial decision or other rule of law, then the Court shall
make a
finding as to what is reasonable or would not violate any such statute, judicial
decision or other rule of law and shall enforce this Agreement by judgment
or
decree to the extent of such finding.
12. Indemnification.
a. Except
with respect to the Assumed Liability (subject to the provisions of Section
2.b.) and Buyer’s Assumed Tax Liability, the Company shall indemnify and save
and hold the Buyer harmless from and against, and shall pay upon demand,
any
damage, liability, loss, deficiency, settlement, fees, penalties, or expenses
(including without limitation, reasonable attorneys’ fees and other reasonable
costs and expenses incident to any suit, action, proceeding, demand, assessment,
judgment, penalty or investigation or defense of any claim) (collectively
“Losses”) arising out of or resulting from, during the periods indicated
below, the following:
14
i. during
the Survival Period (as defined in Section 14.a.), any inaccuracy of any
representation or warranty of any of the Company which is contained in or
made
pursuant to this Agreement, or in any certificate delivered pursuant to this
Agreement;
ii. during
the Survival Period, the breach by the Company of the performance of any
of the
covenants or obligations to be performed or observed by the Company pursuant
to
this Agreement, other than the covenants contained in Section 11 and other
than
with respect to the Company’s obligations under Section 2.b;
iii. during
the Restricted Period, the breach by the Company of the covenants contained
in
Section 11;
iv. during
the 730 days following Closing, the breach by the Company of its obligations
under Section 2.b;
v. during
the Survival Period, noncompliance by the Company with any applicable Bulk
Sales
Act or any similar federal, state or local statute, rule, or regulation in
connection with the transactions contemplated by this Agreement; or
vi. during
the Survival Period, the operation of the Camera Business prior to the Closing.
Notwithstanding
the foregoing, the Company shall have no indemnity
obligation hereunder with respect to any claim of the Buyer for which the
Buyer
elects the Set-Off Remedy or the Escrow Agreement Remedy permitted under
Section
2.e., except to the extent that (a) the Buyer is the prevailing party in
any
arbitration pursuant to the Escrow Agreement Remedy and (b) the Buyer is
unable
to fully recompense itself for losses it has suffered, as determined by the
arbitrator, through the procedures permitted in the Escrow Agreement. Further,
the ability to recover such losses shall in all events be subject to the
terms
of the penultimate sentence of Section 12.c.
15
b. The
Buyer shall indemnify and save and hold the Company harmless from and against,
and shall pay upon demand the Assumed Liability (subject to the provisions
of
Section 2.b., Buyer’s Assumed Tax Liability, any Logo Products Indemnity (as
defined in Section 5.c.) and any and all Losses (as defined in Section 12.a.)
arising out of or resulting from (i) during the Survival Period, any inaccuracy
of any representation or warranty of the Buyer which is contained in or made
pursuant to this Agreement, or in any certificate delivered pursuant to this
Agreement, (ii) during the term of the Note, the Buyer’s breach of any covenants
or obligations to be performed or observed by the Buyer pursuant to this
Agreement, other than the covenants contained in Section 11, or the Security
Agreement, (iii) the breach during the Restricted Period of the covenants
contained in Section 11, and (iv) the operation of the Buyer’s business after
the Closing. A party entitled to indemnification hereunder shall only be
entitled to indemnification after the aggregate amount of Losses with respect
thereto exceeds fifteen thousand dollars ($15,000), at which point the
indemnified party shall be entitled to recover the entire amount of such
Losses
from the first dollar (including the first fifteen thousand dollars ($15,000)).
Further, subject to the last sentence of subsection 12.b., other than in
respect
of claims arising out of fraud, criminal conduct or a breach of the covenants
contained in Section 11 (collectively, the “Exceptions”), in which case
the Company and the Buyer shall have all remedies available at law or in
equity,
the Company’s and the Buyer’s sole remedy hereunder or at law for any Loss shall
be to seek indemnification pursuant to this Section 12. Other than in respect
of
claims arising out of the Exceptions or which are attributable to the Company’s
negligent misrepresentations herein, no party hereunder shall be liable to
pay
any other party in connection with any claim for indemnification pursuant
to
this Section 12 for an amount in excess of (a) $750,000, plus (b) in the
event
of arbitration or litigation, the prevailing party’s reasonable costs and
attorney’s fees, plus (c) with respect to any claim of the Company under the
Note, any interest accruing on the principal due thereunder. Notwithstanding
the
foregoing, the Buyer may seek the Escrow Agreement Remedy, as provided in
Section 2.e. and 12.a. above. In the event of a claim attributable to the
Company’s negligent misrepresentations, its liability shall not exceed
$1,000,000 plus, in the event of arbitration or litigation, the Buyer’s
reasonable attorney’s fees and costs.
c. Upon
the receipt by a party of any notice of the commencement of any action, suit
or
proceeding, the assertion of any claim, or the notice of any event or the
suffering or incurring of any Losses with respect to which such party may
be
entitled to claim indemnification here under (an “Indemnifiable Loss”)
(whether or not any Loss has then been incurred), the party seeking
indemnification (the “Indemnified Party”) shall promptly give written
notice to any party from whom indemnification is sought (the “Indemnifying
Party”) describing to the extent reasonably possible the basis of such claim
for indemnification, the amount thereof, and the method of computing such
Indemnifiable Losses. The failure of the Indemnified Party to give prompt
written notice shall not discharge the Indemnifying Party of its obligations
hereunder except to the extent that the Indemnifying Party is prejudiced
by
reason of the failure of the Indemnified Party to give prompt notice.
16
d. The
Indemnifying Party shall have the right to conduct and control, through counsel
of its choosing, any third party claim, action, suit, or proceeding, except
that
(1) the Indemnifying Party shall permit the Indemnified Party to participate
in
the defense of any such claim, action, suit, or proceeding through counsel
chosen by the Indemnified Party, provided that the fees and expenses of such
counsel shall be borne by the Indemnified Party; and (2) if the Indemnified
Party refuses to consent to a compromise or settlement approved by the
Indemnifying Party, the Indemnifying Party’s liability for Indemnifiable Losses
shall not exceed the amount for which the claim, action, suit, or proceeding
could have been so settled plus indemnifiable expenses incurred by the
Indemnified Party up to the date of such refusal.
e. The
Indemnified Party shall cooperate with the Indemnifying Party in the preparation
for and prosecution of the defense of any claim, action, suit, or proceeding,
including, without limitation, making available evidence within the control
of
the Indemnified Party and persons needed as witnesses who are employed by
the
Indemnified Party, in each case as reasonably needed for such defense, at
cost,
which costs, to the extent reasonably incurred, shall be paid by the
Indemnifying Party.
f. In
the event that the Indemnifying Party shall be obligated to indemnify the
Indemnified Party hereunder, the Indemnifying Party shall, upon payment of
such
indemnity, be subrogated to all rights of the Indemnified Party with respect
to
claims to which such indemnification relates. The rights of the parties to
injunctive and equitable relief and to relief under this paragraph hereof
shall
be cumulative and not exclusive of each other.
13. Dispute
Resolution.
a. Agreement
to Arbitrate. Except as may be specifically provided elsewhere in this
Agreement, in the event of any dispute, claim, question, or disagreement
arising
out of or relating to the Agreement or the breach thereof, including the
Security Agreement and the Note, the parties hereby agree that upon notice
by
either party to the other (the “Arbitration Notice”), such dispute,
claim, question, or disagreement shall be finally settled by binding arbitration
before a single arbitrator in accordance with the provisions of the Commercial
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration
Association (“AAA”). The Arbitration Notice delivered pursuant to this
subsection (a) shall contain a detailed statement of the claim(s), including
a
description of the factual contentions which support said claim(s).
b. Selection
of Arbitrator. The parties shall, by joint agreement, select a single
arbitrator, but if they do not agree on the selection of an arbitrator within
twenty (20) days after the date that the Arbitration Notice was received
by the
non-sending party, then selection shall be made in accordance with the
Arbitration Rules.
c. Place
of Arbitration. The arbitration shall be held in Salt Lake City, Utah, or
such other place as the parties shall mutually agree.
d. Expedited
Procedures. The parties agree that any claims that are submitted to
arbitration pursuant to the provisions of this Section 13, and which seek,
in
the aggregate, damages or payment of Seventy-Five Thousand Dollars ($75,000)
or
less, shall be resolved through the application of the AAA’s Expedited
Procedures for commercial cases.
17
e. Interim
Relief. Either party may, without inconsistency with this Agreement, seek
from a court any interim or provisional relief that may be necessary to protect
the rights or property of that party pending the selection of the arbitrator
or
pending the arbitrator’s determination of the merits of the controversy.
f. Award.
The arbitrator shall issue a written decision setting forth findings of fact
and
conclusions of law, and, if agreed upon by the parties, the arbitrator shall
issue such written decision within thirty (30) days of the close of the
hearing.
g. Enforcement
of Arbitrator’s Decision. Judgment on the award of the arbitrator may be
entered in any court having jurisdiction over the party against which
enforcement of the award is being sought.
14. General.
a. All
of the representations and warranties of the respective parties hereto, as
contained herein, shall survive Closing for the following periods (respectively,
the “Survival Period”), notwithstanding any investigations heretofore or
hereafter made by or on behalf of either of the parties hereto: (i) with
respect
to all representations and warranties other than that set forth in Section
3.h,
eighteen (18) months; and (ii) with respect to the representation and warranty
set forth in Section 3.h, until the thirtieth (30th) day after
expiration of the applicable statute of limitations.
b. This
Agreement, the Note, the Security Agreement, the Xxxx of Sale, the Assignment
and the Escrow Agreement, when executed, constitute the entire agreement
among
the parties hereto and supersedes all prior and contemporaneous agreements
and
understandings between them pertaining to the subject matter hereof.
c. Any
of the provisions of this Agreement may be waived in writing at any time
by the
party which is entitled to the benefit hereof. The provisions of this Agreement
may only be amended by written agreement of the parties hereof.
d. Whether
or not the transactions contemplated by this Agreement are consummated, the
Company and the Buyer each shall pay its own fees and expenses incident to
the
negotiation, preparation, execution and performance of this Agreement, including
the fees and expenses of their attorneys and accountants.
e. Any
notice which either party hereto may desire or may be required hereunder
to give
to the other party shall be in writing and shall be deemed to be duly given
when
mailed by registered or certified mail, postage prepaid, or delivered by
reputable overnight messenger service addressed in case of a matter to the
Company as follows:
0000
Xxxxxxxx Xxx
Xxxx
Xxxx Xxxx, Xxxx 00000
Attn:
Zee Hakimoglu
18
With
a mandatory copy to:
Xxxxxxxx
X. Xxxxxx
Xxxxxxx
Xxxxx & Xxxxxxx
000
Xxxxx Xxxx Xxxxxx
Xxxx
Xxxx Xxxx, Xxxx 00000
and
in the case of a notice to the Buyer to:
0000
Xxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxx 00000
Attn:
Xxxxxx X. Xxxx
or
to such other address as either party or their counsel
hereinafter may designate to the other party by written notice given in
accordance with this subparagraph (e).
f. The
headings of the paragraphs and Schedules of this Agreement are inserted for
convenience only and do not constitute a part thereof.
g. This
Agreement and all the provisions hereof shall be binding upon and shall inure
to
the benefit of, and be enforceable by, the parties hereto and their respective
heirs, successors and assigns. No assignment by the Buyer shall relieve the
Buyer of its obligations hereunder.
h. This
Agreement is being delivered in the State of Missouri, and shall be construed
and enforced in accordance with the laws of such state.
i. The
parties agree to continue to be bound by and to abide by the terms of that
certain Non-Disclosure Agreement dated January 11, 2006 executed by the Buyer
and the Company. In addition, the parties agree to hold the existence and
terms
and conditions of this Agreement in strict confidence and not to disclose
the
same to any other party other than the Buyer’s lender (s), legal counsel and
other advisors), except as may otherwise be required by law, including with
respect to filings with the U.S. Securities and Exchange Commission or as
may be
required by the rules and regulations of any applicable stock exchange. As
to
any such disclosure required by law, the Company agrees to provide the Buyer
with prior notice that such a disclosure is being made (without being required
to advise the Buyer of the content thereof) and the opportunity to review
and
correct any information therein concerning the Buyer.
19
j. On
behalf of itself and its successors and assigns, the Buyer hereby promises
and
covenants not to xxx the Company or its successors and assigns for any use
of
any of the Intellectual Property (except for any trademarks, service marks,
trade dress, logos, trade names, URL domain names and corporate names) in
any
field outside of Camera Business unless such activity by Company is a violation
of the Restrictive Covenants of Section 11 above. This is referred to as
the
“Covenant Not to Xxx”. The Covenant Not to Xxx shall include an
obligation on behalf of the Buyer not to xxx for or pursue any claims, demands,
obligations, liabilities, indebtedness, breaches of duty or any relationship,
acts, omissions, misfeasance, causes of action, sums of money, accounts,
controversies, promises, damages, costs, losses and expenses of every type,
kind, nature, description or character.
15. Certain
Definitions. The following terms, as used in this Agreement, have the
following meanings:
a. “Buyer’s
Knowledge” shall mean the actual knowledge of Xxxxxx X. Xxxx .
b. “Camera
Business” shall mean the Company’s document and educational camera
manufacturing and sales business as presently carried on by it.
c. “The
Company’s Knowledge” shall mean the actual knowledge of Zee Hakimoglu, Xxxxx
Xxxxxxx and Xxxxx Xxxxxxxx.
d. “Intellectual
Property” shall mean all of the following owned by or issued or licensed to
or by Company and used or held for use primarily in connection with the Camera
Business:
i. All
inventions (whether patentable or unpatentable and whether or not reduced
to
practice), all improvements thereto and all patents, patent applications
and
patent disclosures, together with all reissuances, continuations,
continuations—in—part, revisions, extensions and reexaminations thereof;
ii. All
trademarks, service marks, trade dress, logos, trade names, URL domain names
and
corporate names, together with all translations, adaptations, derivations
and
combinations thereof and including all goodwill associated therewith, and
all
applications, registrations and renewals in connection therewith;
iii. All
copyrights and all applications, registrations and renewals in connection
therewith; and
iv. All
trade secrets and confidential business information (including ideas, research
and development, know-how, formulas, compositions, technical data,
specifications, pricing and cost information, and business and marketing
plans
and proposals).
e. “Material
Adverse Effect” shall mean a material adverse effect on, or a material
adverse change in, the operations, affairs, prospects, conditions (financial
or
otherwise), results of operations, assets, liabilities, reserves or any other
aspect of the Camera Business or the Assets.
20
f. “Permitted
Encumbrances” shall mean liens for personal property taxes, assessments and
governmental charges with respect to the Assets not yet due and payable.
g. “Person”
shall mean any individual, corporation, partnership, limited liability company,
association, trust or other entity or organization.
[THE
REST OF THIS PAGE IS BLANK]
21
IN
WITNESS WHEREOF, the parties hereto have caused this Asset
Purchase Agreement to be duly executed on the dates set forth below, the
latter
of such dates being the “Effective Date” of this Agreement.
|
“Buyer”
|
“Company”
|
|
XXX-A-VISION
MFG. CO., INC.
By:
/s/Xxxxxx X. Xxxx
Xxxxxx
X. Xxxx, President
Date:August
7, 2006
|
CLEARONE
COMMUNICATIONS, INC.
By:/s/Zee
Hakimoglu
Name:
Xxxxxx Xxxxxxxxx
Title:
President & CEO
Date:
August 23, 2006
|
22
