PERSONALLY HELD INTANGIBLES PURCHASE AGREEMENT
This Personally Held Intangibles Purchase Agreement (this "Agreement") is
made and entered into as of June 10, 2004, by and between Audiovox
Communications Corp. (the Company), a Delaware corporation with an office at 555
Wireless Boulevard, Hauppauge, New York 11788, and Philip Christopher, an
individual residing at 108 Fairway View Drive, Commack, New York 11725 (the
"Seller").
WITNESSETH:
A. Seller owns the Personally Held Intangibles, as defined below.
B. Prior to the execution of this document, Seller had never sold,
transferred, assigned or conveyed to the Company any of the Personally Held
Intangibles, but has allowed some of the Personally Held Intangibles to be used
in the business of the Company.
C. Seller desires to sell, transfer, assign and convey to Company and
Company desires to purchase all rights in and to the Personally Held Intangibles
so that Company will be entitled to the full use of the Personally Held
Intangibles. In connection with the Asset Purchase Agreement between the
Company, Audiovox Corporation and UTStarcom Inc. dated as of June 11, 2004 (the
"Asset Purchase Agreement"), the Company and the Seller have also agreed to the
sale and purchase of the Personally Held Intangibles pursuant to the terms of
this Agreement with the understanding that the Company will transfer the
Personally Held Intangibles to UTStarcom in the Asset Purchase Agreement.
D. Seller, as a seller of Personally Held Intangibles to Company, is
subject under applicable law to an implied covenant not to compete with Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
Article I.
PURCHASE AND SALE
Section 1.1 Agreement to Sell. The Seller hereby grants, sells, conveys,
assigns, transfers and delivers to the Company, upon and subject to the terms
and conditions of this Agreement, all right, title and interest of the Seller in
and to all of his personal contacts and personal and professional relationships
with suppliers, customers, contractors, financers, employees and ex-employees of
the Company, and his personal know-how, trademarks, trade names and patentable
assets relating to or useable by the Company (the "Personally Held
Intangibles"), free and clear of all mortgages, liens, pledges, security
Exhibit 99.3
interests, charges, claims, restrictions and encumbrances of any nature
whatsoever.
Section 1.2 Agreement to Purchase. The Company, in recognition of the fact that
upon the sale of substantially all of its assets (as detailed in the Asset
Purchase agreement), the employment agreement between Seller and Company is null
and void and therefore the Company no longer has the use of Seller's personally
held intangibles, hereby agrees to purchase the Personally Held Intangibles from
the Seller, upon and subject to the terms and conditions of this Agreement and
in reliance on the representations, warranties and covenants of the Seller
contained herein, in exchange for the Purchase Price (hereinafter defined in
Section 1.3 hereof).
Section 1.3 The Purchase Price. The Purchase Price shall be determined by a
qualified independent professional appraiser and shall be paid on the Closing
Date. Based on its preliminary due diligence, the Company believes that the
valuation by the appraiser will exceed $16,000,000.00. However, the purchase
price to be paid to Seller will not exceed $16,000,000.00.
Article II.
CLOSING, ITEMS TO BE DELIVERED,
THIRD PARTY CONSENTS AND FURTHER ASSURANCES
Section 2.1 Closing. The closing (the "Closing") of the Personally Held
Intangibles Purchase Agreement is taking place simultaneously with the closing
of the Asset Purchase Agreement. The date of the Closing is sometimes herein
referred to as the "Closing Date."
Section 2.2 Further Assurances. This Agreement is intended to operate as an
assignment and assumption agreement with respect to the Personally Held
Intangibles. Notwithstanding the foregoing, the Seller from time to time after
the Closing, at the Company's expense and request, will execute, acknowledge and
deliver to the Company such other instruments of conveyance and transfer and
will take, at Company's expense, such other actions and execute and deliver such
other documents, certifications and further assurances as the Company may
reasonably require in order to vest more effectively in the Company, or to put
the Company more fully in possession of any of the Personally Held Intangibles.
Each of the parties hereto will cooperate with the other and execute and deliver
to the other parties hereto such other instruments and documents and take such
other actions as may be reasonably requested from time to time by any other
party hereto as necessary to carry out, evidence and confirm the intended
purposes of this Agreement.
Article III.
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Company that:
(a) Authority; Enforceable Obligations. The Seller has the authority and
legal right to
Exhibit 99.3
2
execute, deliver and perform this Agreement. This Agreement, and any
and all other agreements, documents and instruments delivered by the
Seller in accordance with the provisions hereof (the "Seller's
Documents") have been duly executed and delivered by the Seller, and
this Agreement, and the Seller's Documents constitute the legal, valid
and binding obligations of the Seller, enforceable against him in
accordance with their respective terms.
(b) Validity of Contemplated Transactions, etc. The execution, delivery
and performance of this Agreement and Seller' Documents by the Seller
does not and will not violate, conflict with or result in the breach
of any term, condition or provision of, or require the consent of any
other person under, (a) any existing law, ordinance, or governmental
rule or regulation to which the Seller are subject, (b) any judgment,
order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which is
applicable to the Seller, or (c) any agreement, contract, commitment,
Authorization (defined below), or other instrument, document or
understanding, oral or written, to which the Seller are a party, by
which the Seller may have rights or by which any of the Personally
Held Intangibles may be bound or affected, or give any party with
rights thereunder the right to terminate, modify, accelerate or
otherwise change the existing rights or obligations of the Seller
thereunder. Except as aforesaid, no authorization, approval or consent
of, and no registration or filing with, any governmental or regulatory
official, body or authority is required in connection with the
execution, delivery or performance of this Agreement by the Seller.
(c) No Third Party Options. There are no existing agreements, options,
commitments or rights with, of or to any person to acquire any of the
Personally Held Intangibles or any interest therein.
(d) Title to Personally Held Intangibles. The Seller has good, valid and
marketable title to the Personally Held Intangibles free and clear of
all mortgages, liens, pledges, security interests, charges, claims,
restrictions and other encumbrances and defects of title, to Seller's
knowledge. Seller shall cooperate with the Company to effectuate the
transfer of the Personally Held Intangibles to the Company.
(e) Policies and Practices. During the twelve months prior to the Closing
Date, Seller has not changed any policies or practices with respect to
the ownership or value of the Personally Held Intangibles, caused the
Company to terminate any material business relationship without cause,
or agreed or threatened to do any of the foregoing.
(f) Relationships. The Seller has maintained and shall maintain good
relations with substantially all of the employees, suppliers,
customers and contractors of the Company.
(g) Maintenance of Key Arrangements. Seller has maintained and shall
maintain in good standing all personal relationships, distributorship
arrangements, representation
Exhibit 99.3
3
agreements, lease agreements, actor/creative talent relationships and
arrangements, and other material agreements and arrangements of the
Seller that have been used in connection with the business of the
Company so that the Company may hereafter maintain such relationships,
agreements and arrangements.
(h) Compliance with Law; Authorizations. To Seller's knowledge, Seller has
complied with each, and is not in violation of, any law, ordinance, or
governmental or regulatory rule or regulation, whether federal, state,
local or foreign, to which the Personally Held Intangibles is subject
("Regulations"), if any. The Seller owns, holds, possesses or lawfully
uses all licenses, permits, rights, applications, filings,
registrations and other authorizations ("Authorizations") which are in
any manner necessary for the ownership and use of the Personally Held
Intangibles free and clear of all liens, charges, restrictions and
encumbrances. The Seller is not in default, nor has he received any
notice of any claim of default, with respect to any such
Authorization. None of such Authorizations will be adversely affected
by consummation of the transactions contemplated hereby.
(i) Litigation. No litigation, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or governmental or
regulatory official, body or authority is pending or, to the knowledge
of the Seller, threatened against the Seller and which relates to the
Personally Held Intangibles or the transactions contemplated by this
Agreement, nor does the Seller know of any reasonably likely basis for
any such litigation, arbitration, investigation or proceeding, the
result of which could adversely affect the Personally Held Intangibles
or the transactions contemplated hereby.
Section 3.2 Representations and Warranties of the Company. The Company
represents and warrants to the Seller as follows:
(a) Corporate Existence. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
(b) Corporate Power and Authorization. The Company has the corporate
power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement
by the Company have been duly authorized by all necessary corporate
action. This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
Section 3.3 Survival of Representations and Warranties. All representations and
warranties made by the parties in this Agreement shall survive until four years
following the Closing Date with respect to any and all claims in connection
therewith. Notwithstanding any investigation or audit conducted before or after
the Closing Date or the decision of any party to complete the Closing, each
party shall be entitled to rely upon the representations and warranties set
forth herein and therein.
Exhibit 99.3
4
Article IV.
MISCELLANEOUS
Section 4.1 Amendment and Modification. This Agreement may be amended, modified
and supplemented at any time with respect to any of the terms contained herein,
by a written agreement signed by both of the parties hereto.
Section 4.2 Waiver. The failure of any party hereto to comply with any
obligation, covenant, agreement or condition herein may be waived in writing by
the other party hereto affected thereby, but such waiver shall not operate as a
waiver of, or estoppel with respect to, any subsequent waiver or other failure.
Whenever this Agreement requires or permits consent by or on behalf of any party
hereto, such consent shall be given in writing.
Section 4.3 Notices. All notices, claims, requests, demands or other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, by first class certified
mail, return receipt requested, with postage paid, or by receipted overnight
courier service to the intended recipient at the address specified below or at
such other address as shall be designated by such party in any notice delivered
as above provided to the other parties hereto.
If to the Company:
Audiovox Communications Corp.
150 Marcus Blvd.
Hauppauge, NY 11788
Attn: Charles M. Stoehr
Fax: (631) 231-1370
If to the Seller:
Mr. Philip Christopher 108 Fairway View Drive Commack, NY
11725 Fax: (631) 951-0784
Section 4.4 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by either of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party hereto; provided, however, that the Company
may, without the prior written consent of the Seller, assign any or all of its
rights hereunder and under any other agreements, contracts or documents executed
or delivered in connection herewith to UTStarcom or an affiliate of UTStarcom.
Exhibit 99.3
5
Section 4.5 Governing Law. This Agreement shall be governed by the laws of the
State of New York, without regard to its principles of conflict of laws.
Section 4.6 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Delivery of an executed counterpart of this
Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.
Section 4.7 Headings. The Article and Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 4.8 Entire Agreement. This Agreement constitutes the entire agreement
between Seller and Company relative to the subject matter hereof. Any previous
agreements between the parties are superseded by this Agreement. Subject to any
exceptions specifically set forth in this Agreement, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and permitted assigns of the
parties.
Section 4.9 No Benefit. This Agreement shall not be construed so as to confer
any right or benefit upon any person other than the signatories to this
Agreement and each of their respective heirs, successors and permitted assigns.
Section 4.10 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any party hereto upon any breach or default of
another party hereto under this Agreement shall impair any such right, power or
remedy of such party nor shall it be construed to be a waiver of any such breach
or default or an acquiescence therein or of or in any similar breach or default
thereafter occurring. All remedies, whether under this Agreement, by law or
otherwise, afforded to any party shall be cumulative and not alternative.
Section 5.11 Arbitration. Any dispute or claim arising under or with respect to
this Agreement which is incapable of resolution will be resolved in the City of
New York by arbitration in accordance with the Rules for Commercial Arbitration
of the American Arbitration Association ["AAA"]. The decision or award of the
arbitrator shall be final and binding upon the parties. Any arbitral award may
be entered as a judgment or order in any court of competent jurisdiction.
Exhibit 99.3
6
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
COMPANY:
Audiovox Communication Corp.
By: /s/ Charles M. Stoehr
Name: Charles M. Stoehr
Title: Vice President
SELLER:
By: /s/ Philip Christopher
Philip Christopher
Exhibit 99.3