1
EX-2.3
ASSET PURCHASE AGREEMENT
BETWEEN
SRS LABS, INC.
AND
R.G.A. & ASSOCIATES, LTD.
D/B/A TOTEVISION AND VIP LABS(R)
2
TABLE OF CONTENTS
PAGE
I. Purpose of Agreement.............................................................1
II. Purchase and Sale of the Assets.................................................1
A. Manufacturing, Test and Demonstration Equipment, Furnishings and
Documentation...............................................................1
C. Business Records and Data................................................1
D. Intellectual Property....................................................2
E. Contract Rights..........................................................2
III. Assumption of Certain Liabilities..............................................2
IV. Consideration...................................................................2
A. Initial Payments.........................................................2
B. Royalty Payments.........................................................3
IV. Representations and Warranties..................................................4
A. Representations and Warranties of Each Party.............................4
B. Representations and Warranties of Seller.................................4
C. Representations and Warranties of Purchaser..............................7
V. Covenants........................................................................8
A. Liability of The Parties.................................................8
B. Cooperation..............................................................9
C. Public Communications....................................................9
D. Bulk Sales..............................................................10
VI. Taxes on This Purchase.........................................................10
A. Sales and Other Transfer Taxes..........................................10
B. Other Taxes.............................................................10
VII. Additional Agreements; Opinions...............................................10
VIII. Miscellaneous................................................................11
B. Notices.................................................................11
C. Amendments; Waivers.....................................................12
D. Section Headings........................................................12
E. Counterparts............................................................12
F. Assignment..............................................................12
G. Governing Law...........................................................12
H. Disputes................................................................13
I. Entire Agreement; Supersedure...........................................13
J. Subsequent Invalidity, Illegality or Unenforceability...................13
Note: The following Attachments and Exhibits to this Asset Purchase Agreement
----- have not been filed herewith. The Registrant will furnish supplementally
to the Commission, upon request, a copy of any such omitted Attachment or
Exhibit.
Attachment 1: A. Description of Manufacturing, Test and Demonstration
------------- Equipment
B. Description of Inventory
Attachment 2: Form of Assignment Agreement - Intellectual Property
------------- Other Than Patents and Trademarks
Attachment 3: Form of Assignment Agreement - Trademarks
-------------
Attachment 4: Form of Assignment Agreement - Patents
-------------
Attachment 5: Form of Assignment Agreement - Contracts
-------------
Attachment 6: Assumed Liabilities
-------------
Attachment 7: Royalty Payments
-------------
Exhibit A: Form of Warrant
----------
Exhibit B: Form of Corporate Counsel Opinion
----------
-i-
3
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement"), dated as of January 28,
1998 ("Effective Date"), is entered into by and among R.G.A. & Associates, Ltd.,
d/b/a ToteVision and VIP Labs(R) (the "Seller") and SRS Labs, Inc.
("Purchaser").
I. Purpose of Agreement
On December 6, 1993, the Seller and Xxxxxx Aircraft Company ("Xxxxxx")
entered into an Asset Purchase Agreement (the "Xxxxxx Agreement"),
pursuant to which the Seller purchased certain assets related to Xxxxxx'
Audio Intelligibility Systems for use in connection with the Seller's
voice intelligibility processor technology business (the "Business").
Seller wants to sell to Purchaser, and Purchaser wants to buy from
Seller, the current assets of Seller related to the Business, whether or
not such assets were purchased by Seller from Xxxxxx or thereafter
developed by, or on behalf of, Seller.
II. Purchase and Sale of the Assets.
The Seller hereby agrees to sell to the Purchaser and the Purchaser
hereby agrees to purchase from the Seller, subject to and upon the terms
and conditions contained herein, all of the Assets (as defined below),
free and clear of any option, lien, pledge, mortgage, security interest
or other encumbrance of any kind, except for the security interest
granted to Xxxxxx pursuant to the Xxxxxx Agreement.
The "Assets" means the following property related to the Business:
A. Manufacturing, Test and Demonstration Equipment, Furnishings
and Documentation
Machinery, equipment, tools and tooling, molds, fixtures,
laboratory and test equipment and furnishings, office
furniture, documentation, instructions, blueprints, drawings,
schematics, trade show equipment and displays, bins, racks and
shelving (including set up plans and instructions associated
therewith), demonstration discs (CD's), audio and video tapes,
and other similar items of property, whether owned or leased,
utilized in the design, manufacture, testing and demonstration
of the products of the Business, listed in ATTACHMENT 1.
B. Inventory
Work in process, materials and supplies inventories,
components and sub assemblies, products (including prototypes,
mockups, products returned as defective, salesperson's samples
and/or demonstration units), listed in ATTACHMENT 1.
C. Business Records and Data
Except for corporate organizational documents, all operating
files of the Business, including notebooks, records, reports,
customer and vendor lists and contact logs, sales order and
vendor history files, confidentially and other business
agreements, advertising materials and signs (including copy,
artwork, photographic negatives or
4
plates and agreements with advertising agencies), and all
documentation relating to the filing for and
award/registration of the patents and trademarks described in
Paragraph D below.
D. Intellectual Property
1. The intellectual property other than patents and
trademarks described in the Assignment Agreement --
Intellectual Property Other Than Patents
and Trademarks (ATTACHMENT 2).
2. The trademarks and trademark applications, including, all
goodwill associated therewith, described in the Assignment
Agreement -- Trademarks
(ATTACHMENT 3).
3. The patents and patent applications described in the
Assignment Agreement - Patents (ATTACHMENT 4).
E. Software
All software, whether DSP-based or higher level language, which
is used in demonstrating and implementing aspects of the
Business. All forms of such software, including all media storage
and printed versions, together with all associated documentation
shall be provided to Purchaser by Seller.
F. Contract Rights
All rights of the Seller, under the agreements described in the
Assignment Agreement - Contracts (ATTACHMENT 5) (the
"Contracts").
III. Assumption of Certain Liabilities
The Purchaser hereby agrees that, subject to and upon the terms and
conditions contained herein, it hereby assumes and agrees to satisfy and
perform when due only the obligations and liabilities of the Seller
described on ATTACHMENT 6 (the "Assumed Liabilities"). Notwithstanding
anything in this Agreement to the contrary, the Purchaser is not
assuming and will not perform any liabilities or obligations not
specifically described in attachment 6.
IV. Consideration
In consideration for the Assets, Purchaser shall pay to Seller the
following amounts:
A. Initial Payments.
1. $500,000.00 shall be paid on the date hereof to
Seller by delivery of cashier's check or wire
transfer to an account designated by Seller.
2. Irrevocable instructions shall be delivered on the
date hereof by the Company to the Company's transfer
agent to deliver to the Seller a certificate in the
name
-2-
5
of the Seller (or such other individual or entity as
shall be nominated by Seller) representing 25,000
shares of the Purchaser's Common Stock (the
"Shares").
3. A 4-year warrant to purchase 100,000 shares of the
Purchaser's Common Stock at an exercise price equal
to $9.467 per share, in the form of EXHIBIT A
attached hereto, shall be delivered in the name of
the Seller (or such other individual or entity as
shall be nominated by Seller) to the Seller on the
date hereof (the "Warrant").
B. Royalty Payments
1. For the periods aggregating four (4) years after the
date hereof, the Purchaser shall pay to the Seller
the royalties described on ATTACHMENT 7. Royalties
shall be computed based on the currency of the United
States and shall be paid in the currency of the
United States. Royalties shall be calculated at the
end of every calendar quarter ("Payment Period") and
paid within forty-five (45) days after the end of
such Payment Period. A written statement ("Royalty
Statement") shall accompany each royalty payment, or
shall be sent alone within such forty-five (45) day
period if no royalties are due for the respective
Payment Period, providing a complete itemized
description of the calculation of the royalties paid
for the respective Payment Period.
2. The Purchaser shall maintain books of account and
records concerning costs, sales and other items
necessary for the calculation of royalties for a
period of three (3) years after the respective
royalty is paid. A certified public accountant
appointed by the Seller may, at the Seller's expense,
examine such books and records solely for the purpose
of verifying the accuracy of any Royalty Statement or
other accounting rendered by the Purchaser hereunder.
The Seller agrees that such certified public
accountant shall be required to sign an agreement
with the Purchaser protecting confidential
information of the Purchaser and shall be authorized
by the Purchaser to report to the Seller only the
amount of royalties due and payable in respect of the
Royalty Statement examined. Such examination shall
take place at a mutually agreed upon time and place,
but in any event only during the Purchaser's normal
business hours and upon reasonable advance written
request. The Purchaser agrees to pay for the
reasonable fees, costs and expenses charged by any
certified public accountant engaged by the Seller for
such review if the royalties paid pursuant to the
Royalty Statement examined are understated by more
than fifteen percent (15%) of the royalties actually
due. The Seller shall have no other rights to examine
the Purchaser's books and records.
3. The Purchaser shall, at its option, be entitled to
reduce the amounts that the Purchaser would otherwise
be obligated to pay to the Seller pursuant to this
Section IV.B, in satisfaction of any of the Seller's
obligations to the Purchaser hereunder, including,
without limitation the obligation to pay the
Purchaser for warranty services provided by the
Purchaser as described in ATTACHMENT 6.
-3-
6
V. Representations and Warranties
A. Representations and Warranties of Each Party
Each Party (where applicable) represents and warrants to the
other Party as follows:
1. It is a corporation duly organized, validly existing and
in good standing, and has all necessary corporate power
to enter into this Agreement and the other documents and
agreements referenced or contemplated herein and to
perform all of its obligations hereunder and thereunder.
2. The execution, delivery and performance of this
Agreement and the other documents and agreements
referenced or contemplated herein has been duly
authorized by its management.
3. Each of this Agreement and the other documents and
agreements referenced or contemplated herein constitutes
a valid and legally binding obligation of such Party,
enforceable in accordance with its respective terms.
B. Representations and Warranties of Seller
Except as set forth on the disclosure schedule attached hereto
and incorporated herein by this reference (the "Disclosure
Schedule"), the Seller represents and warrants to Purchaser as
follows:
1. The execution and the delivery of this Agreement and the
other documents and agreements referenced or
contemplated herein and the consummation of the
transactions contemplated hereby and thereby will not:
a. violate any term or provision of the Seller's
Articles of Incorporation or Bylaws;
b. result in the creation of any lien or
encumbrance upon any of the Assets; or
c. violate or result in a breach of or constitute a
default under any judgment, order, decree, law,
rule, regulation or other restriction of any
court, government or governmental agency
relating to the Assets.
2. Seller has and, upon Closing, the Purchaser shall have,
sole, good and marketable title to the Assets
(notwithstanding any actions taken by the Purchaser with
respect to the Assets), free and clear of all liens,
encumbrances or claims of any kind or nature whatsoever,
including those portions of the Assets which may have
been developed by Seller's consultants or independent
contractors. Notwithstanding the foregoing, Seller makes
no representation or warranty with respect to the
physical condition of the Assets described in Section
II.A.
-4-
7
3. Seller was issued and continues to hold a patent or
patents issued from the U.S. Patent Office and/or from
other agencies, if any, pursuant to any and all patent
applications acquired by the Seller under the Xxxxxx
Agreement, and such patents are included in the
intellectual property portion of the Assets listed or
included in Attachment 4 of this Agreement.
4. The Seller has not sold, transferred, licensed,
abandoned, released, pledged or subjected to lien,
charge or encumbrance of any kind any of the
intellectual property acquired by the Seller from Xxxxxx
pursuant to the Xxxxxx Agreement, and the intellectual
property listed or included in Attachments 2, 3 and 4 to
this Agreement accurately and completely list or
encompass and include all of such intellectual property,
together with any and all additional intellectual
property owned by Seller in connection with the Business
as of the date hereof, which intellectual property
collectively constitutes the intellectual property
portion of the Assets. The Seller has paid all
maintenance fees or other governmental fees, and made
all necessary filings, required to keep the intellectual
property listed in Attachments 2, 3 and 4 in full force
and effect. There are no immediate necessary formal
actions which must be taken to maintain the intellectual
property listed in Attachments 2, 3 and 4 except as
specifically noted in the respective attachment.
5. The operations of the Business, the use of the products
of the Business by Seller's customers for the purpose
for which sold, and the use or publication by Seller or
Purchaser of the technology disclosed in the patents and
the trademarks included in the Assets do not, to the
best of Seller's knowledge, involve infringement or
claimed infringement of any patent or trademark. Seller
warrants that the patents and trademarks included in the
Assets are, to the best of Seller's knowledge, valid,
enforceable and free from defects.
6. There are no actions, suits, or proceedings pending or,
to the actual knowledge of Seller, threatened which,
individually or in the aggregate, would have a material
adverse effect on the Assets or which would seek to
question, delay or prevent the consummation of, or
materially impair the ability of Seller to consummate
the transactions contemplated hereby.
7. Except as specifically provided in this Agreement, there
are no authorizations, approvals, consents or waivers
required to be obtained from, or notices or filings
required to be given to or made with, any government,
governmental agency or third party for the consummation
by Seller of the transactions contemplated hereby or the
continued operation of the Business.
8. True and complete copies of all Contracts included in
the Assets have been made available to Purchaser prior
to the execution hereof. As of the date hereof, except
as otherwise provided in this Agreement:
a. there exist no circumstances which would affect
the validity or enforceability of any of the
Contracts in accordance with their respective
terms;
-5-
8
b. Seller has performed and complied in all
material respects with all obligations required
to be performed by it to date under, and is not
in default (without giving effect to any
required notice or grace period) under, or in
breach of the terms, conditions or provisions of
any of the Contracts; and
c. the validity and enforceability of any of the
Contracts has not been and shall not in any
manner be affected by the consummation of the
transactions contemplated hereby.
9. Seller holds all licenses, franchises, permits and
authorizations necessary for the lawful conduct of the
Business as presently conducted, and has to the best of
its actual knowledge, complied with all applicable
statutes, laws, ordinances, rules and regulations of all
governmental bodies, agencies and subdivisions having,
asserting or claiming jurisdiction over it, with respect
to the conduct of the Business, where the failure to so
comply could have a material adverse affect upon any of
the Assets. Any such permits and licenses will be
assigned or transferred to Purchaser to the extent
permitted by law, on or prior to the date hereof.
10. The Seller represents and warrants that the Warrant and
the Shares are being acquired by the Seller (or such
other individual or entity as shall be nominated by
Seller) for its personal account, for investment
purposes only, and not with a view to the distribution,
resale or other disposition thereof.
11. Seller acknowledges that Purchaser may issue shares upon
the exercise of the Warrant without registering such
shares under the Securities Act of l933, as amended (the
"Securities Act"), on the basis of certain exemptions
from such registration requirement. Accordingly, Seller
agrees that the exercise of the Warrant may be expressly
conditioned upon delivery to the Purchaser of an
investment certificate including such representations
and undertakings as the Purchaser may reasonably require
in order to assure the availability of such exemptions,
including a representation that the entity exercising
the Warrant is acquiring the shares for investment and
not with a present intention of selling or otherwise
disposing thereof and an agreement by such entity that
the certificates evidencing the shares may bear a legend
indicating such non-registration under the Securities
Act and the resulting restrictions on transfer. Seller
acknowledges that, because shares received upon exercise
of the Warrant may be unregistered, the shares may be
required to be held indefinitely unless they are
subsequently registered for resale under the Securities
Act or an exemption from such registration is available.
12. Seller hereby acknowledges that U.S. federal and state
securities laws may require the placement of certain
restrictive legends upon the Shares and the shares
issued upon exercise of the Warrant, and Seller hereby
consent to the placing of any such legends upon
certificates evidencing the Shares or such shares as the
Purchaser, or its counsel, may deem necessary or
advisable.
-6-
9
13. Neither this Agreement, nor any certificate, exhibit or
other written document provided to Purchaser by Seller
with respect to the transactions contemplated hereby
contains any untrue statement of a material fact nor
omits nor misstates any material fact which may
reasonably be expected to materially and adversely
affect any of the Assets.
14. Since the inception of the Business, the Seller has duly
filed all federal, state, county and local tax returns
required to have been filed, and have paid or caused to
be paid all taxes required to be paid, with respect to
the Business in those jurisdictions where the nature or
conduct of the Business requires such filing and where
the failure to do so would have a material adverse
affect on the Assets.
C. Representations and Warranties of Purchaser
Purchaser represents and warrants to Seller as follows:
1. The execution and the delivery of this Agreement and the
other documents and agreements referenced or
contemplated herein and the consummation of the
transactions contemplated hereby and thereby will not:
a. violate any term or provision of its Articles of
Incorporation or Bylaws; or
b. violate or result in a breach of or constitute a
default under any judgment, order, decree, law,
rule, regulation or other restriction of any
court, government or governmental agency
relating to the Assets.
2. There are no actions, suits, or proceedings pending or,
to the knowledge of Purchaser, threatened which,
individually or in the aggregate, would have a material
adverse effect on or which would seek to question, delay
or prevent the consummation of, or materially impair the
ability of Purchaser to consummate, the transactions
contemplated hereby.
3. There are no authorizations, approvals, consents or
waivers required to be obtained from, or notices or
filings required to be given to or made with, any
government, governmental agency or third party for the
consummation by Purchaser of the transactions
contemplated hereby.
4. Upon consummation of the transactions contemplated
hereby, the Shares will be, and upon the exercise of the
Warrant (assuming the Seller has paid the exercise price
therefor), the shares of Common Stock issuable
thereunder will be, fully paid and non-assessable, and
issued to the Seller free and clear of all liens,
encumbrances, or claims of any kind or nature
whatsoever.
5. To the best of Purchaser's actual knowledge, neither
this Agreement, nor any certificate, exhibit or other
written document provided to Seller by Purchaser with
respect to the transactions contemplated hereby contains
any untrue
-7-
10
statement of a material fact nor omits nor misstates any
material fact which may reasonably be expected to
materially and adversely affect its ability to
consummate the transactions contemplated hereby.
6. No reports, schedules, forms, statements, exhibits and
other documents filed by the Purchaser with the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (copies of
which have been made available by the Purchaser to the
Seller prior to the date hereof) contains any untrue
statement of a material fact nor omits nor misstates any
material fact, except as qualified or modified by
subsequent reports filed by the Purchaser with the
Securities and Exchange Commission or by other public
disclosure.
VI. Covenants
A. Liability of The Parties
1. Liability of Seller
Seller shall be liable for and shall indemnify, defend
and hold Purchaser harmless from and against any and all
actual or threatened:
a. actions, suits, liabilities, expenses (including
reasonable attorneys' fees), charges,
obligations, claims, taxes, assessments, amounts
in judgment or settlement, installment and lease
payments and any sums due or owing or which may
become due or owing, together with any penalties
or interest, applicable to or arising out of
Seller's possession, ownership, use or transfer
of the Assets and operation of the Business
prior to the date hereof, other than the Assumed
Liabilities; provided, however, any liability of
Seller pursuant to Section V.B.5 hereof as a
result of anticipating art not made of record to
the U.S. Patent and Trademark Office during
prosecution thereof and known to Purchaser or
its employees or agents as of the date of this
Agreement shall arise only if a patent included
in the Assets is found to be invalid or
unenforceable by a court of competent
jurisdiction and any such Seller's liability
with respect thereto shall be limited to
$500,000 less any net profits (defined as Net
Royalty Revenue (as defined in Attachment 7 to
this Agreement) less royalties paid to Seller)
realized by the Purchaser from: (i) licensing of
the Assets or (ii) sales of products
incorporating the technology of the Assets; and
b. actions, suits, liabilities, expenses (including
reasonable attorneys' fees), charges,
obligations, claims and amounts in judgment or
settlement arising out of the products of the
Business made and sold by Seller.
-8-
11
2. Liability of Purchaser
Purchaser shall be liable for and shall indemnify,
defend and hold Seller harmless from and against any and
all actual or threatened
a. actions, suits, liabilities, expenses (including
reasonable attorneys' fees), charges,
obligations, claims, taxes, assessments, amounts
in judgment or settlement, installment and lease
payments, and any sums due or owing or which may
become due or owing, together with any penalties
or interest applicable to or arising out of
Purchaser's possession, ownership and/or use of
the Assets and/or out of the Assumed Liabilities
on or after the date hereof, except to the
extent that the same relate to a breach by
Seller of a representation or warranty under
this Agreement or otherwise relate to a breach
of this Agreement; and
b. actions, suits, liabilities, expenses (including
reasonable attorneys' fees), charges,
obligations, claims and amounts in judgment or
settlement arising out of the products made or
sold by Purchaser.
3. Negligence or Misconduct of Purchaser or Seller
Each party shall indemnify, and hold the other harmless
from and against any loss, expense, damage, liability or
claim to the extent caused by such indemnifying party's
negligence or misconduct during the performance of its
obligations under this Agreement.
4. Limitation of Liability
In no event shall either party seek or be entitled to an
award of exemplary or punitive damages against the
other.
B. Cooperation
Each party agrees to provide to the other party, at such other
party's request, reasonably required assistance in the defense
or settlement of the matters referenced in Article VI.A.
C. Public Communications
The Seller will cooperate with Purchaser, if necessary, with
respect to the making of a public communications release
relating to this Agreement. Except as may be required by
applicable law, Seller and its affiliates, parents or
subsidiaries shall not issue any press releases or other public
communications relating to this Agreement or the transactions
contemplated hereunder without the prior written consent of the
Purchaser. In the event that any such press release or other
public communication shall be required by applicable law, Seller
shall first consult in good faith with the Purchaser with
respect to the form and substance of such release or
communication.
-9-
12
D. Bulk Sales
Seller and Purchaser agree to waive compliance with Article 6 of
the Uniform Commercial Code to the extent, if any, that it is
applicable to the transactions contemplated hereby.
E. Delivery of Assets.
Seller will make all of the Assets transferred hereby available
to Purchaser at Seller's location. Purchaser shall bear all
costs and expenses of transporting the Assets to the location of
Purchaser's choice.
VII. Taxes on This Purchase
A. Sales and Other Transfer Taxes
Seller shall be responsible for the payment of and shall pay all
sales and other transfer taxes incurred in connection with the
sale of the Assets. In the event that the transactions
contemplated hereby are subject to such taxes, and Purchaser is
required to pay such taxes, Purchaser shall pay such taxes and
Seller shall reimburse Purchaser therefor. Each party shall
cooperate with the other in its filing of any forms required to
be filed with respect to the determination and payment of such
sales taxes.
B. Other Taxes
Seller shall be responsible for the payment of any other taxes,
such as use taxes, in connection with the consummation of the
transactions contemplated hereby and shall indemnify, defend and
hold Purchaser harmless from and against all liability for such
taxes and for any interest and penalties which may be assessed
on account of their nonpayment or otherwise. Each party shall
cooperate with the other in its filing of any forms required to
be filed with respect to the determination and payment of such
taxes.
VIII. Additional Agreements; Opinions
A. Concurrently with the execution of this Agreement, each party
shall execute and deliver to the other the following (to the
extent a party thereto):
1. Assignment Agreement - Intellectual Property Other than
Patents and Trademarks, in the form attached hereto as
ATTACHMENT 2.
2. Assignment Agreement - Trademarks, in the form attached
hereto as ATTACHMENT 3.
3. Assignment Agreement - Patents and Trademarks, in the
form attached hereto as ATTACHMENT 4.
-10-
13
4. Assignment Agreement - Contracts, in the form attached
hereto as ATTACHMENT 5.
B. On, or prior to the date hereof, Van Valkenberg Xxxxxx Law Group
P.L.L.C., counsel to the Seller shall deliver, or shall have
delivered, a legal opinion to the Purchaser in the form attached
hereto as EXHIBIT B.
IX. Miscellaneous
A. Expenses Generally
Except as otherwise specifically provided herein and elsewhere
in this Agreement, each party shall bear its own expenses
incurred in connection with the preparation and execution of
this Agreement and the consummation of the transactions
contemplated hereby.
B. Notices
All notices, requests, demands and other communications required
or permitted under this Agreement shall be in writing and shall
be deemed duly given if delivered sent by registered or
certified mail, postage prepaid, as follows, or to such other
address or person as any Party may designate by notice to the
other Party or Parties hereunder:
If to Seller:
VIP Labs(R)
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Van Valkenberg Xxxxxx Law Group P.L.L.C.
0000 0xx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxx Xxxxxxxxxx, Esq.
If to Purchaser:
SRS Labs, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
Attention: Xxxxx X. Xxxxx,
Vice President and Chief Financial Officer
-11-
14
with a copy to:
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
C. Amendments; Waivers
This Agreement may not be changed orally and, except as
otherwise provided specifically herein, no waiver of compliance
with any provision or condition and no consent provided for in
this Agreement shall be effective unless evidenced by an
instrument in writing duly executed by the proper party. Either
party may at any time waive compliance by the other party with
any covenants or conditions contained in this Agreement only by
written instrument executed by the party waiving such
compliance. No such waiver, however, shall be deemed to
constitute the waiver of any such covenant or condition in any
other circumstance or the waiver of any other covenant or
condition.
D. Section Headings
The section and paragraph headings contained in this Agreement
are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
E. Counterparts
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
F. Assignment
This Agreement shall be binding upon and inure to the benefit of
successors and assigns of Seller and Purchaser and Purchaser may
freely assign its rights and obligations under this Agreement;
provided that the obligations of Seller under this Agreement may
not be assigned without the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld.
G. Governing Law
This Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of California
without regard to California's conflict of law rules.
-12-
15
H. Disputes
In lieu of litigation, all disputes under this Agreement shall
be resolved as follows:
1. Cooperation
The parties agree to cooperate with each other to
attempt to settle all disputes arising under this
Agreement without resort to arbitration.
2. Arbitration
Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled
by binding arbitration in a forum as selected by the
party asserting the claim.
a. Procedure. Any party to this Agreement can
initiate arbitration pursuant to this Agreement
by serving notice on the other parties of an
intent to arbitrate. The notice shall specify
with particularity the claims or issues that are
to be arbitrated. Within ten days of receipt of
the notice by all parties, the parties shall use
all reasonable efforts to obtain a list of
available arbitrators from the local office of
the Judicial Arbitration and Mediation Service
("JAMS") and select a mutually acceptable
arbitrator. If the parties are unable to agree
on an arbitrator within ten days, any party may
petition the Presiding Judge of the forum's
Superior Court to select a single arbitrator
from the JAMS list. The parties shall have the
discovery rights available under the forum's
Civil Rules, subject to the limitation that each
side shall be limited to no more than five
depositions unless, upon a showing of good
cause, the party can convince the arbitrator
that more depositions should be permitted. It
shall be the intention of the parties to select
an arbitrator and set a schedule according to
the following: (1) all discovery must be
concluded within 120 days of the selection of an
arbitrator, (2) the arbitration hearing must be
concluded within 30 days of the close of
discovery and it will be conducted in accordance
with the forum's Rules of Evidence, and (3) the
arbitrator's final decision shall be rendered
within ten days of the final hearing day.
Judgment upon the arbitrator's final award may
be entered in any court having jurisdiction
thereof.
b. Costs and Fees. The parties shall bear in equal
shares the arbitrator's fees and costs. In those
cases where the arbitrator's judgment consists
solely of monetary damages, the prevailing party
in the arbitration shall be awarded its
reasonable attorneys' fees and all costs, other
than the arbitrator's fees and costs. For the
purpose of determining who is the prevailing
party, each side will submit to the other a
single written offer of settlement ten days
prior to the start of the arbitration hearing
and the party whose offer most closely resembles
the arbitrator's award shall
-13-
16
be deemed the prevailing party for the purpose
of awarding attorneys' fees.
I. Entire Agreement; Supersedure
This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
J. Subsequent Invalidity, Illegality or Unenforceability
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired.
-14-
17
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be duly executed as of the date first above written.
SRS Labs, Inc. R.G.A. & Associates, Ltd. d/b/a ToteVision
and VIP Labs(R)
/s/ XXXXXXX X. XXXXXX /s/ XXXXXXX X. XXXXXXX
-------------------------------- -----------------------------------------
Xxxxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxxxx, President
