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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of September 1, 1998, by and among UNIVERSAL ELECTRONICS INC., a Delaware
corporation ("Buyer"), H & S MANAGEMENT CORP., an Colorado corporation
("Seller"), and J. C. SPARKMAN ("Sparkman") and Steven Helbig ("Helbig").
WITNESSETH:
WHEREAS, Buyer is engaged in the business of developing and
manufacturing and/or maintaining (a) certain electronic products that emit, via
infra-red and other methods, pulse codes which can be used to operate original
equipment manufacturer ("OEM") device(s) (such as televisions, video cassette
recorders, cable and satellite set-top boxes, home theater systems, and the
like), including, without limitation, a battery-operated, hand-held remote
control (the "Remote Control"), (b) software to operate the Remote Control which
can be used to operate OEM device(s), electronic device(s) for the "home bus"
market (as defined by the Electronics Industry Association) and integrated
system digital networks ("ISDN"), electronic device(s) for use in the receipt
and/or transmission of data and/or software over multiple media, and other
derivations of such device(s) (the "Software"), and (c) a library of the
devices' pulse codes and such updates, enhancements and new releases of such
library as Buyer may from time to time develop (the "Database"); and
WHEREAS, Seller is engaged in the business of designing, developing,
manufacturing, selling and distributing a battery-operated, hand-held remote
control similar to the Remote Control (the "H&S Remote Control") (the business
shall hereinafter be referred to as the "H&S Remote Control Business"); and
WHEREAS, Seller is willing to sell to Buyer and Buyer is willing to
acquire from Seller, all of the assets which are used and useful in Seller's H&S
Remote Control Business, including without limitation the H&S Remote Control,
all upon the terms and conditions as more fully set forth in this Agreement; and
WHEREAS, Buyer's acquisition of such assets is further conditioned upon
Sparkman's and Helbig's agreements to not compete with Buyer, all as more fully
set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the undersigned parties agree as
follows;
1. SALE OF ASSETS. Subject to the terms and conditions of this
Agreement, Seller shall, on the Closing Date referred to below, sell, transfer,
assign, convey and deliver to Buyer, and Buyer agrees to purchase from Seller
and take possession of the following assets of the H&S Remote
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Control Business, wherever located, each of which are owned by Seller as of the
Closing Date and are used and/or useful in the H&S Remote Control Business (all
of the assets referred to below are referred to herein as the "H&S Remote
Control Assets"):
(a) INVENTORY. All inventory, including, without limitation,
that inventory listed or referred to on Schedule 1(a) attached hereto
and incorporated herein by reference (the "Inventory").
(b) ORDERS/WORK IN PROCESS. All unfilled or partly filled orders
on hand and all work in process, transferable insurance policies, and
customer contracts each of which is listed or referred to in Schedule
1(b) attached hereto and incorporated herein by reference, provided that
Buyer has prior to Closing Date, approved and accepted each of the
foregoing. In the event Buyer, in its discretion, elects not to accept
any of the foregoing, Seller shall retain them for disposition outside
the terms this Agreement.
(c) TOOLING. All of the tooling, without limitation, those
tooling listed or referred to on Schedule 1(c) attached hereto and
incorporated herein by reference (the "Tooling").
(d) EQUIPMENT. All of the equipment listed or referred to on
Schedule 1(d) attached hereto and incorporated herein by reference (the
"Equipment").
(e) ARTWORK. All original artwork used or useful in the
creation, development, or printing of pamphlets, brochures, catalogues,
or similar items, including without limitation, all paste-ups,
separations, and similar such items, (the "Artwork").
(f) SUPPLIES. All supplies including, without limitation, paper,
envelopes, boxes, invoices, purchase orders, pamphlets, brochures,
catalogues, and other supplies and sales materials (the "Supplies").
(g) CONTRACT RIGHTS. All the right, title and interest of Seller
in and to all contracts of Seller, including, without limitation, the
contract rights listed or referred to in Schedule 1(g) attached hereto
and incorporated herein by reference (the "Contract Rights").
(h) LICENSES AND PERMITS. All licenses, franchises, rights and
governmental or other permits, authorizations, consents and approvals
necessary to own and to operate the H&S Remote Control Assets and the
H&S Remote Control Business to the extent that the same are assignable
(the "Permits").
(i) RECORDS. All records and files attributable to the H&S
Remote Control Assets and the H&S Remote Control Business, including,
without limitation, records relating to customers and suppliers, payment
records and correspondence, except, however, records and files
attributable to the Excluded Assets (as defined below) and such records
and files
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as are required by applicable laws to be kept by Seller. Copies of all
such documents retained by Seller shall be made available to Buyer upon
request.
(j) INTANGIBLE/GOODWILL. All of the intangible assets and
intellectual property, including, without limitation, (i) all trade
secrets, proprietary or other trade rights of Seller pertaining to
ownership of the H&S Remote Control Assets and the operation of the H&S
Remote Control Business, (ii) all customer lists, (iii) all telephone
numbers to the extent assignment is permissible and yellow page
listings, and (iv) all of the goodwill of Seller in the H&S Remote
Control Business (the "Intangibles/Goodwill").
1.1 EXCLUDED ASSETS. Notwithstanding the foregoing, the right, title and
interest of Seller in and to the following properties and assets (collectively,
the "Excluded Assets") shall not be sold, transferred, conveyed or assigned
hereunder and shall not be deemed a part of the H&S Remote Control Assets:
(a) NON H&S REMOTE CONTROL ASSETS. The assets, including
inventory, equipment and supplies, wherever located which are not used
or useful in the H&S Remote Control Business and which are listed or
referred to in Schedule 1.1(a) attached hereto and incorporated herein
by reference; and
(b) CORPORATE RECORDS. The minute books, corporate seal and
stock and organizational records of Seller; and
(c) PURCHASE PRICE. The Purchase Price (as hereinafter defined)
and Seller's other rights under this Agreement.
1.2 NON-COMPETE AGREEMENT. Subject to the terms and conditions of this
Agreement, each of Seller, Sparkman and Helbig agree to deliver to Buyer and
Buyer agrees to purchase from each of them the Non-Compete Agreement in the form
attached hereto as Exhibit 1.2 and incorporated herein by reference (the
"Non-Compete Agreement").
2. PURCHASE PRICE. Subject to the adjustments described in Section 5
below, as consideration for sale by Seller of the H&S Remote Control Assets, the
Consulting/Non-Compete Agreement and the other terms and conditions set forth
herein, Buyer agrees to and shall pay to Seller and Sparkman the aggregate
amount of Two Million Three Hundred Seventy-Three Thousand Six Hundred
Eighty-Nine and 13/100 Dollars ($2,373,689.13), to be paid in accordance with
Section 3 below, (the "Purchase Price"). The Purchase Price shall be allocated
as provided in Section 8 below.
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3. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable as
follows:
(a) CASH PORTION AT CLOSING. One Million Five Hundred Thousand
Dollars ($1,500,000) cash paid by Seller on the Closing Date; and
(b) STOCK PORTION POST CLOSING. Eighty Four Thousand Two Hundred
and Eleven (84,211) shares of Buyer's common stock, par value $.01 per
share which had a value of Eight Hundred Seventy-Three Thousand Six
Hundred Eighty-Nine and 13/100 Dollars ($873,689.13) at the close of the
markets on August 31, 1998, a certificate of which shall be delivered to
Buyer within ten (10) business days of the Closing (the "UEI Common
Stock").
4. LIABILITIES.
4.1 ASSUMPTION OF CERTAIN LIABILITIES. In further consideration of the
sale, transfer and assignment of the H&S Remote Control Assets, and except to
the extent excluded under Section 4.2 below or otherwise provided herein, Buyer
shall assume on the Closing Date, and agree to pay and discharge when due, and
to hold Seller harmless from, the obligations and liabilities of Seller arising
from the assignment by Seller and acceptance by Buyer of unfilled or partly
filled orders on hand and all work in process in accordance with Section 1(b)
and of the Contract Rights.
4.2 EXCLUDED LIABILITIES. Buyer does not agree to assume or be liable
for, and each of Seller, Sparkman, and Helbig agrees to remain liable for and to
fully and timely discharge, and to hold Buyer harmless from, the following
debts, expenses, liabilities, obligations, contracts, commitments, and claims
(collectively, "Liabilities") of or against Seller or the H&S Remote Control
Assets, including but not limited to the following:
(a) Liabilities the existence of which, or the failure to
disclose which, constitute a breach of any representation, warranty,
covenant or agreement of Seller, Sparkman, or Helbig set forth in this
Agreement;
(b) Legal, accounting, brokerage, finder's fees, taxes or other
expenses incurred by Seller, Sparkman, Helbig, or any of Seller's
shareholders in connection with this Agreement or the consummation of
the transactions contemplated hereby;
(c) Liabilities of any nature to any past or present shareholder
of Seller;
(d) Federal, state, local and foreign tax Liabilities of any
type (including interest and penalties) imposed on Seller, Sparkman, or
Helbig;
(e) Liabilities with which any of the H&S Remote Control Assets
may be charged and which are attributable to any act or omission of
Seller, Sparkman, or Helbig prior to, on or after the Closing Date,
including without limitation any Liabilities arising
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under the bulk sales provisions of the Uniform Commercial Code or
similar law in any other jurisdiction;
(f) Liabilities relating to claims for injury to or disease,
sickness or death of any person or damage to property based upon or
arising out of the manufacture, sale or distribution of products or the
provision of services by Seller or for any action taken or omitted by
Seller, Sparkman, or Helbig prior to, on or after the Closing Date;
(g) Liabilities of Seller, Sparkman, or Helbig arising by reason
of any violation or alleged violation of any federal, state, local or
foreign law, including without limitation any Environmental Law (as
hereinafter defined), or any requirement of any governmental authority
or by reason of any breach or alleged breach of any agreement, contract,
lease, commitment, instrument, judgment, order or decree (regardless of
when any such violation or breach is asserted); and
(h) Liabilities under any contract, agreement or commitment
which are not specifically assumed by Buyer hereunder.
4.3 EFFECTUATION. To the extent that any of the contracts, rights,
franchises, licenses, instruments or commitments for which assignment to Buyer
is provided herein are not assignable or may not be transferred without the
consent of the other party, this Agreement shall not constitute an assignment or
an attempted assignment if such assignment or attempted assignment would
constitute a breach thereof. Each of Seller, Sparkman, and Helbig will, both
before and after the Closing Date, upon the request of Buyer, use its and his
best efforts to obtain the consent of the other party to the assignment to Buyer
of any contract, right, franchise, license, instrument or commitment in cases in
which such consent is required. Whether a consent is requested or not, each of
Seller, Sparkman, and Helbig will cooperate with Buyer in any reasonable
arrangements designed to provide for Buyer the benefits under any such contract,
right, instrument or commitment, including enforcement at the cost and for the
account of Seller, Sparkman, or Helbig of any and all rights of Seller,
Sparkman, or Helbig against the other party thereto arising out of the
cancellation by such other party or otherwise. If and to the extent that such
consent is required but is not obtained, the parties agree that as between Buyer
and each of Seller, Sparkman, and Helbig, Buyer shall nevertheless assume all of
Seller's, Sparkman's, and Helbig's responsibilities and be entitled to all of
Seller's, Sparkman's, and Helbig's benefits under any such contract, right,
instrument or commitment as if such contract, right, instrument or commitment
had in fact been assigned to Buyer. The parties hereby agree to cooperate in any
reasonable arrangement to effectuate the foregoing provision.
5. THIS SECTION INTENTIONALLY OMITTED.
6. CLOSING. Subject to the terms and conditions contained herein, the
closing ("Closing") shall take place at the office of the Buyer, 6101 Gateway
Drive, Cypress, California on September 1, 1998, or such other date and place as
Seller and Buyer shall agree in writing. The date on which closing shall take
place is referred to herein as the "Closing Date."
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7. DELIVERIES
7.1 DELIVERIES BY SELLER, SPARKMAN, AND HELBIG. Seller, Sparkman, and/or
Helbig as the case may be, shall deliver to Buyer at the Closing the following:
(a) Bills of sale, assignments of copyrights, trade names and
trademarks, patents and other instruments of transfer sufficient to
convey, sell, assign and transfer to and vest in Buyer good and
marketable title to all of the H&S Remote Control Assets and all rights
and interest thereto and therein, in each case free and clear of all
liens, encumbrances, charges and other exceptions (or claims thereof) to
title except the Permitted Exceptions (as hereinafter defined), such
instruments to be in form and substance satisfactory to counsel for
Buyer.
(b) A certificate of accuracy of representations and warranties
and compliance with covenants, executed by the President of Seller and
each of Sparkman and Helbig, in form and substance reasonably
satisfactory to Buyer.
(c) Opinion of counsel of Seller, Sparkman, and Helbig in the
form of Exhibit 7.1(c).
(d) Non-Compete Agreement duly executed by each of Seller,
Sparkman, and Helbig.
(e) All clearance certificates or similar types of documents
which may be required by any state taxing authority in order to relieve
Buyer of any obligation to withhold any portion of the Purchase Price.
(f) Completed and signed declarations and other forms required
to comply with any applicable stamp, transfer or transaction tax law or
ordinance.
(g) Copy, certified by the Secretary of Seller as of the Closing
Date, of the resolutions adopted by the Board of Directors and the
shareholders of Seller authorizing the transactions with Buyer set forth
herein and approving this Agreement.
(h) Any required consents to the assignment of any of the H&S
Remote Control Assets.
(i) All contracts, files, purchase orders, sales orders and
other data and documents pertaining to the H&S Remote Control Assets and
the H&S Remote Control Business.
(j) Such other documents as Buyer may reasonably request.
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7.2 DELIVERIES BY BUYER. At the Closing, Buyer will deliver to Seller,
Sparkman, and/or Helbig as the case may be, the following:
(a) The Purchase Price pursuant to Section 3(a) of this
Agreement.
(b) A certificate of accuracy of representations and warranties
and compliance with covenants, executed by the President or Chief
Financial Officer of Buyer, in form and substance reasonably
satisfactory to Seller.
(c) Copies of resolutions adopted by the Board of Directors of
Buyer approving the transactions contemplated hereby, certified by the
secretary or assistant secretary of Buyer.
(d) Such other documents as Seller may reasonably request.
7.3 BEST EFFORTS. Buyer and each of Seller, Sparkman, and Helbig will
use their respective best efforts to cause their respective representations and
warranties hereunder to be true and correct on and as of the Closing Date, to
obtain promptly all consents, approvals and agreements of other parties or
governmental authorities which are required in connection with the consummation
of the transactions provided for herein, and to close such transactions no later
than October 31, 1998.
7.4 POSSESSION. At the Closing, Seller shall deliver to Buyer possession
all of the H&S Remote Control Assets, which, in the case of all tangible assets,
shall be in the same condition in which they were on July 19, 1998, ordinary
wear and tear excepted.
8. ALLOCATIONS. The parties acknowledge and agree that the allocation of
Buyer's Purchase Price among the H&S Remote Control Assets, and the Non-Compete
Agreements shall be as set forth on Schedule 8 attached hereto, which allocation
shall be made in accordance with Section 1060 of Internal Revenue Code of 1986,
as amended and the regulations promulgated thereunder (collectively, the
"Code"). Except as required by law, neither party shall make any claims or treat
any items on their respective federal, state, or other tax returns in a manner
which is inconsistent with the agreed-upon allocations. The parties further
agree to cooperate in connection with any reporting requirements under the Code,
including, but not limited to the attachment of an asset allocation statement on
IRS Form 8594 to the respective federal income tax returns for the tax year in
which the Closing occurs and compliance with any and all other requirements
relating to filings or information to be furnished to the Internal Revenue
Service under the Code. Each party shall furnish to the other party, on request,
a copy of IRS Form 8594 being filed and with copies of any other tax forms
necessary to evidence compliance with this Section 8.
9. COVENANTS OF SELLER, SPARKMAN, AND HELBIG.
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9.1 INFORMATION AND ACCESS. From and after the date of this Agreement
and to the Closing, Seller, Sparkman, and Helbig will, within three (3) days of
receiving a request (whether oral or written), furnish to Buyer and its duly
authorized representatives and agents any requested information about Seller and
will give Buyer and its duly authorized representatives and agents, complete
access to Seller's officers, employees, accountants, attorneys, auditors, books,
records, tax returns, physical facilities, assets and agreements for purposes of
a complete investigation. The exercise of any rights of access or inspection by
or on behalf of Buyer under this Section 9.1 shall not affect or mitigate the
covenants, representations and warranties of Seller, Sparkman, and Helbig or
Buyer's rights to indemnity under this Agreement.
9.2 CONDUCT OF H&S REMOTE CONTROL BUSINESS. From the date hereof through
the Closing, each of Seller, Sparkman, and Helbig will conduct the H&S Remote
Control Business diligently and in the usual and ordinary course as heretofore
conducted. Each of Seller, Sparkman, and Helbig will use their respective best
efforts to preserve the H&S Remote Control Assets and the H&S Remote Control
Business intact and to preserve for Buyer the goodwill and relationship of
Seller with its suppliers, customers and others having business relations with
Seller. From the date hereof through the Closing, Seller, Sparkman, and Helbig
will not in connection with the use of the H&S Remote Control Assets and the
operation of the H&S Remote Control Business, except with the consent of Buyer
incur any obligation or liability, engage in any activity or transaction, or
enter into any contract or commitment with respect to the H&S Remote Control
Assets or the operation of the H&S Remote Control Business extending beyond the
Closing, other than sales or purchases made in the ordinary course of the H&S
Remote Control Business as heretofore conducted. Without limiting the generality
of the foregoing, neither Seller, Sparkman, nor Helbig will, without obtaining
the prior written consent of Buyer:
(a) make any change in Seller's Articles of Incorporation or
By-laws;
(b) make any changes in Seller's capital stock or grant any
option, warrant or call with respect thereto;
(c) declare or pay any dividend on Seller's capital stock nor
make any other distribution to Seller's shareholders;
(d) incur any indebtedness in excess of $1,000 in the aggregate
except for trade payables and other indebtedness in the ordinary course
of business as heretofore conducted;
(e) authorize, or engage in, any merger, consolidation, or sale
of assets outside the ordinary course of business as heretofore
conducted;
(f) make any significant organizational or personnel changes;
(g) pay any bonus, make any loan or grant any salary or wage
increase;
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(h) make any capital expenditures in excess of $1,000 per
expenditure or $5,000 in the aggregate;
(i) create any security interest in or any lien or encumbrance
on any property or interest of Seller or cancel or compromise any debt
or claim; or
(j) fail to record promptly, accurately and fully on the books
and records of Seller all transactions of Seller.
9.3 RISK OF LOSS/INSURANCE COVERAGE. Seller shall bear the risk of loss
on the H&S Remote Control Assets through the Closing Date. Seller, Sparkman, and
Helbig each covenant and agree that the H&S Remote Control Business and the H&S
Remote Control Assets to be purchased by Buyer hereunder will each be adequately
insured by Seller against fire and casualty and any other claims or losses
whatsoever, to the Closing Date, and will use their best efforts to maintain in
full force and effect until Closing at the same level of coverage the insurance
policies which were in effect immediately prior to Closing and that such
policies will continue after the Closing to cover and respond to all claims made
in respect of insured occurrences prior to the Closing.
9.4 ACCOUNTS RECEIVABLE. Buyer shall be entitled to all accounts
receivable arising out of business transacted in the H&S Remote Control Business
subsequent to the Closing Date. Seller shall apply collections it receives from
customers to the receivables owed it by such customer unless otherwise directed
by the customer. In the event that Seller is instructed by the customer to remit
a portion of the collection to Buyer or the amount collected is in excess of the
amount owed to Seller, Seller shall immediately comply with the instructions of
the customer or ascertain from Buyer that the customer owes amounts to Buyer and
remit the amount so instructed by the customer or the excess of the amount so
collected to Buyer.
9.5 LITIGATION, CLAIMS AND CONTINGENT LIABILITIES. Each of Seller,
Sparkman, and Helbig agree to indemnify Buyer and hold it harmless from all
Damages (as defined in Section 21 below) resulting from, relating to or arising
out of, all existing litigation and all claims and contingent, undisclosed or
unknown liabilities of Seller, including those required to be listed on Schedule
10(e), which relate to any condition existing, product produced or sold, or
action taken or omitted by Seller, Sparkman, or Helbig, whether prior to, on or
after the Closing Date, including but not limited to all such litigation, claims
and liabilities resulting from, related to or arising out of (a) injury to or
sickness, disease or death of any person who was at any time an employee or
former employee of Seller which is caused by any condition existing, product
produced or sold, or action taken or omitted by Seller, and (b) any injury to or
sickness, disease or death of any person or persons or any damage to any
property or the environment which arises from the manufacture, handling, sale or
use of any product manufactured, sold or shipped by Seller. At Buyer's election,
Buyer may choose to compromise or defend by its own counsel, at the expense of
Seller, such matters referred to in the preceding sentence or may tender such
matters to Seller, in which event Seller shall have the obligation to compromise
and defend, at its expense and by its own counsel, any such matters.
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9.6 EXCLUSIVITY. Each of Seller, Sparkman, and Helbig agree not to
conduct negotiations or discussions with anyone other than Buyer with respect to
the sale of any of the business, assets or capital stock of Seller.
10. REPRESENTATIONS AND WARRANTIES OF SELLER, SPARKMAN, AND HELBIG. Each
of Seller, Sparkman, and Helbig represents and warrants that as of the date
hereof, and as of the Closing Date:
(a) CORPORATE STATUS AND VALIDITY. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Colorado, and is duly qualified to do business, and is in good
standing in those states listed on Schedule 10(a), which comprise all of
the states in which Seller is legally required to be so qualified, with
full corporate power and authority to own, lease and operate its
business and properties as now owned and conducted. Seller has the
corporate power and authority to enter into and perform the transactions
contemplated by this Agreement, and all other instruments, agreements,
and other documents contemplated hereby. All necessary corporate and
shareholder action and other proceedings required to be taken by or on
behalf of Seller to authorize Seller to execute and deliver this
Agreement and to consummate the transactions contemplated herein, have
been duly authorized and properly taken. This Agreement constitutes, and
all instruments, agreements, and other documents to be delivered in
connection herewith, when executed and delivered by Seller, will
constitute the legal, valid and binding obligation of Seller,
enforceable in accordance with their respective terms.
(b) NO CONFLICT WITH OTHER INSTRUMENTS OR AGREEMENTS. Neither
the execution, delivery or performance of this Agreement and all other
instruments, agreements, and other documents in connection herewith, nor
the consummation of the transactions contemplated hereby or thereby will
violate, conflict with, or result in a breach of or constitute a default
under any contract, instrument, article of incorporation, bylaw,
agreement, indenture, or license to which either Seller, Sparkman,
Helbig, the H&S Remote Control Assets, or the H&S Remote Control
Business is or are a party or is bound or affected, or under any law,
judgment, order, decree, rule or regulation to which either Seller,
Sparkman, Helbig, the H&S Remote Control Assets, or the H&S Remote
Control Business is or are subject. No governmental, public authority,
or other agency authorization, approval, order, license, permit, or
consent, and no registration, declaration or filing with any
governmental, public authority or agency is required for the execution,
delivery or performance of this Agreement or the other instruments,
agreements, or other documents by Seller or the consummation of the
transactions hereby or thereby.
(c) TITLE TO ASSETS, ABSENCE OF LIENS. Seller has and at the
Closing will have, and the same pursuant hereto will vest in Buyer, good
and marketable title and merchantable ownership, right, title and
interest in and to all of the H&S Remote Control Assets, in each case
free and clear of all liens, encumbrances, charges, and other exceptions
(or claims
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thereof) except for the Permitted Exceptions. Seller owns, and has the
right to sell and convey to Buyer without interference from Seller or
others, all rights in and to the H&S Remote Control Assets, and has not
previously entered into any agreement concerning the use, sale, or
license of, or the granting of any right to or interest in, any of the
H&S Remote Control Assets.
(d) FINANCIAL RECORDS AND STATEMENTS OF SELLER. The books of
account and financial records of Seller fairly and consistently reflect
the income, expenses, assets and liabilities (i) of Seller taken as a
whole and (ii) of the H&S Remote Control Business. Attached hereto as
Schedule 10(d) is a copy of the balance sheets and related income
statements (i) of Seller taken as a whole and (ii) of the H&S Remote
Control Business as of and for the year ended , 1997 and for each
quarter ended thereafter through the Closing Date (the "Seller Financial
Statements"). Except as described in the notes to the Seller Financial
Statements, the Seller Financial Statements (a) were prepared in
accordance with GAAP applied on a basis consistent with prior periods,
(b) present fairly the financial condition (i) of Seller taken as a
whole and (ii) of the H&S Remote Control Business and the related
results of operations as of and for the periods then ended for each of
Seller and the H&S Remote Control Business, and (c) reflect all material
liabilities and commitments of each of Seller and the H&S Remote Control
Business, direct or contingent, as of said dates which under GAAP are
required to be reflected in such Financial Statements or any related
notes.
(e) LITIGATION, CLAIMS AND CONTINGENT LIABILITIES. Except as
described on Schedule 10(e), (i) there is no action, suit, arbitration
or administrative or judicial proceeding, government investigation,
judgment, order, writ, injunction or decree outstanding, pending or
threatened against Seller, Sparkman, Helbig, any person in his capacity
as an employee or agent of Seller or the assets, business or goodwill of
Seller, or any such matter to which Seller, Sparkman, Helbig, or any
such person is a party, (ii) there is no contingent liability of, and no
claim made by any party against, Seller, Sparkman, Helbig, any person in
his capacity as an employee or agent of Seller, or the assets, business
or goodwill of Seller, (iii) there is no pending or threatened labor
dispute or attempt by any union to organize or be certified as the
representative of any of Seller's employees, and (iv) to the best
knowledge of each of Seller, Sparkman, and Helbig, there is or has been
no event or occurrence which is likely to give rise to any of the
foregoing.
(f) EMPLOYEE AND RELATED CONTRACTS AND AGREEMENTS. With regard
to the H&S Remote Control Assets and the H&S Remote Control Business
sold to Buyer hereunder, Seller is not a party to any written or oral,
express or implied, (i) contract or commitment for the employment or
continued employment of any employee or agent of Seller; (ii) contract
with any labor union or other collective bargaining agreement; (iii) any
other material contract or commitment involving employees or independent
contractors, where the existence of or the absence of (i), (ii), or
(iii) above would materially and adversely
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affect Buyer's purchase of the H&S Remote Control Assets and the
operation of the H&S Remote Control Business.
(g) AUTHORITY FOR AND CONDUCT OF BUSINESS. Seller presently has
all licenses, permits, approvals, orders, and other authorizations from
governmental and regulatory offices and authorities necessary for the
conduct of its H&S Remote Control Business as now being conducted, to
own or hold under lease the properties and assets it owns or holds under
lease, and to perform the obligations under the agreements to which it
is a party, and no proceeding is pending or threatened which seeks to
revoke, limit or suspend any such authorization, approval, license,
permit or order. Seller is in compliance with all applicable laws,
contractual or legal restrictions, regulations and administrative and
executive orders of any country, state, or municipality or of any
subdivisions thereof to which its business and employment of labor or
use or occupancy of properties or any part thereof are subject, and
Seller has not received notice of any violation thereof. The laws,
regulations and administrative and executive orders referred to above
include, but are not limited to, those relating to labor relations,
employment practices, worker's compensation, communications, zoning,
building codes, copyright and patent protection, protection of the
environment, waste disposal, toxic substances, product liability,
health, occupational and other safety, transportation, employment
benefits, exports, antitrust, consumer protection, the processing,
production, advertising, sale or labeling of products, and other similar
matters.
(h) NO MATERIAL ADVERSE CONDITIONS. There are no conditions,
matters or events, which materially adversely affect, or might
reasonably be expected to materially adversely affect Seller's business
taken as a whole, the H&S Remote Control Assets, or the financial
condition, business or results of operations from that referenced on the
Financial Statements or the H&S Remote Control Business or its prospects
which are to be carried on by Buyer.
(i) TAXES AND TAX RETURNS OF SELLER. All taxes imposed by the
United States or by any other country or by any state, province,
municipality or subdivision thereof which are due or payable or which
become due or payable by Seller with respect to any period or portion
thereof up to and including the date of the Closing have been (or will
have been) paid in full. Seller has filed or will file in a timely
manner all required returns and reports with respect to income taxes and
all other taxes of any kind, such returns and reports have been prepared
accurately and in accordance with the law, and all taxes, interest and
penalties due thereon have been paid. There are no actions, suits,
proceedings, claims, or investigations or assessments now pending or
threatened against Seller in respect of taxes or governmental charges,
or any matters under discussion with any governmental authority relating
to taxes or governmental charges and there are no waivers or extensions
of any statutes of limitations in effect with respect thereto. The
Federal tax returns for Seller have been audited through
_____________________.
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(k) EMPLOYEE BENEFIT PLANS OF SELLER. Seller does not have any
employee benefit plans of any kind, including but not limited to, group
life insurance, medical, long-term disability, pension and profit
sharing plans.
(l) REAL ESTATE LEASES. All leases related to the operation of
the H&S Remote Control Business are in full force and effect and Seller
holds valid leasehold interests under such leases. Each of Seller,
Sparkman, Helbig have made available to Buyer complete and accurate
copies of said leases and all such leases have not been modified, except
to the extent that such modifications are disclosed by the copies
delivered to Buyer. Seller is not in default under, nor is there any
default by Landlord under, nor does either party have the right to
terminate, accelerate performance under or otherwise modify (including
upon the giving of notice or the passage of time) any such leases.
Seller does not lease any other real estate other than the leased
properties to which Seller, Sparkman, and Helbig have delivered or to
Buyer. No notice has been received by Seller of any building code, fire
code or zoning violation or problem with respect to the leased
properties.
(m) THIS SECTION INTENTIONALLY OMITTED.
(n) EXTRAORDINARY TRANSACTIONS; CAPITAL EXPENDITURES. Except as
stated in this Agreement, since May 1, 1998 (i) Seller has not entered
into any transactions or incurred any obligations or liabilities outside
of the usual and ordinary course of business, and (ii) there has been no
capital expenditure over $1,000.
(o) OWNERSHIP AND CONDITION OF PROPERTY. Seller has good and
marketable title to all of the H&S Remote Control Assets and all of the
assets reflected as owned by Seller in the Seller Financial Statements,
free and clear of any and all liens, charges and encumbrances, except
Permitted Exceptions.
(p) OTHER CONTRACTS AND COMMITMENTS. Except as described in this
Agreement or on Schedule 10(p), Seller is not currently a party to or
bound by any:
(i) written or oral contracts not made in the ordinary
course of its business;
(ii) contracts with licensors, licensees, distributors,
dealers, or sales agents or representatives;
(iii) contracts with officers, directors, managers,
legal counsel, accountants, tax advisors, advertising or public
relations agencies, or associated or affiliated companies,
except such as are terminable at will and without liability,
cost or expense;
(iv) leases for personal property;
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(v) commitments for capital expenditures or other
written or oral contracts wherein the total liability exceeds
One Thousand Dollars ($1,000.00);
(vi) contracts continuing for a period of three (3)
months or more from their date, other than ordinary course of
business commitments with suppliers or customers;
(vii) contracts with any labor union or organization;
(viii) contracts of guaranty or indemnity;
(ix) contracts for chemical waste disposal;
(x) government contracts subject to price renegotiation;
(xi) contracts or commitments for employee benefits;
(xii) contracts restricting the right to engage in any
business or to compete with any person;
(xiii) loans, mortgages, pledges, financing or similar
contracts or agreements under which Seller may have any
liability (contingent or otherwise); or
(xiv) any other material contract, whether or not made
in the ordinary course of business.
Copies of all written contracts, leases, commitments and
agreements listed on Schedule 10(p) have been made available to Buyer,
and such copies are true and correct copies of such documents. All such
contracts, leases, commitments and agreements are valid and binding
obligations of the parties thereto, enforceable in accordance with their
respective terms, are in full force and effect and are assignable except
as described on Schedule 10(p). Summaries of oral contracts listed on
Schedule 10(p) are correct and do not omit to state any fact necessary
to make the statements therein not incomplete or misleading. Except as
otherwise provided herein, to the knowledge of Seller and Sparkman, no
party with whom Seller has a contractual relationship is in default in
the payment of any obligation under, or in the performance of any
covenant or obligation to be performed by it pursuant to, any such
contract.
(q) INSURANCE. The assets of Seller are adequately insured
against loss or damage and Seller is adequately insured against those
forms of legal liability and losses described on Schedule 9.3. The
insurance of Seller currently in force is listed on Schedule 9.3 and
Seller shall use its best efforts to continue such insurance coverage in
full force and effect to and including the Closing Date.
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(r) NO DEFAULT. Neither Seller, Sparkman, nor Helbig is in
default or breach of any contract or agreement, written or oral,
indenture or other instrument or obligation, including, without
limitation the agreements assumed by Buyer hereunder, to which it is or
they are a party or to which it or they are its property is subject, and
to the best knowledge of Seller or Sparkman or Helbig, there exists no
state of facts which after notice or lapse of time or both would
constitute such a default or breach, and all such contracts, agreements,
indentures or other instruments are in good standing and in full force
and effect, enforceable in accordance with their respective terms.
(s) INVENTORY. The inventory reflected on the Seller Financial
Statements consists, and the Inventory to be sold to Buyer on the
Closing Date will consist, of a quality and quantity usable and salable
in the ordinary course of the H&S Remote Control Business and all such
inventory is valued at the lower of cost (on a first-in, first-out
basis) or net realizable value (which is the estimated selling price
less selling and distribution expenses).
(t) TOOLING, SUPPLIES AND EQUIPMENT. All Tooling, supplies, and
equipment are in good operating condition and repair and are fit for
their intended purpose. All Tooling, supplies and equipment carried at
any net value on the books of Seller or reflected at any net value on
its Financial Statements are currently used in its H&S Remote Control
Business. Such Tooling, supplies, and equipment constitute all the
tangible personal property necessary for the conduct of Seller's H&S
Remote Control Business as it is now being conducted.
(u) CURTAILMENT NOTICES. Seller has not received any notice from
any supplier (including utilities) of curtailment or intended
curtailment of services or supplies to Seller.
(v) CUSTOMER RELATIONS. Neither Seller nor Sparkman are aware of
any facts or information indicating that any customer intends to cease
doing any material amount of business with Seller or to materially alter
the amount of any such business.
(w) ENVIRONMENTAL MATTERS.
(i) Seller has obtained all permits, licenses and other
authorizations which are required with respect to the operation
of its business under any Environmental Laws (as hereinafter
defined) (such permits, licenses and authorizations being
hereinafter referred to as "Environmental Permits"), including
all federal, state and local laws relating to pollution or
protection of the environment such as laws relating to
emissions, discharges, releases or threatened releases of
hazardous, toxic or other pollutants, contaminants, chemicals or
industrial materials, substances or wastes into the environment,
including but not limited to ambient air, surface water, ground
water, land surface or subsurface strata, or otherwise relating
to the manufacture, processing, distribution, use, treatment,
storage, disposal,
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transport or handling of hazardous, toxic or other pollutants,
contaminants, chemicals or industrial materials, substances or
wastes (which laws, together with all regulations, rules, codes,
plans, decrees, judgments, injunctions, notices and demand
letters issued, entered, promulgated or approved thereunder
being herein referred to as "Environmental Laws"). Schedule
10(w) contains a list of all Environmental Permits which have
been obtained by Seller and complete copies of all such
Environmental Permits have been supplied to Buyer. Seller is in
full compliance with all terms and conditions of all
Environmental Permits required under the Environmental Laws, and
is also in full compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the
Environmental Laws. Schedule 10(w) contains a complete list of
all notices of whatever form received by any previous owner or
operator of the H&S Remote Control Business within the five
years preceding the date of this Agreement or by Seller alleging
noncompliance with any Environmental Law, and Seller has
provided Buyer with complete copies of all such notices.
(ii) There is no civil, criminal or administrative
action, demand, claim, investigation or proceeding pending or
threatened against Seller, under or relating in any way to the
Environmental Laws, except as identified on Schedule 10(w).
(iii) There are no past, present or known or anticipated
future events, conditions, circumstances, or plans which may
interfere with or prevent compliance or continued compliance
with the Environmental Laws, or which may give rise to any
common law or other legal liability, including, but not limited
to, liability under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") or which otherwise may
form the basis of any claim, action, demand, proceeding, notice
of violation or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling or the emission, discharge,
release or threatened release into the environment, of any
pollutant, contaminant, chemical, industrial toxic or hazardous
material, substance or waste. Without in any way limiting the
foregoing, no release, emission or discharge into the
environment of any hazardous substance (as that term is
currently defined under CERCLA or any applicable similar state
law) has occurred, is currently occurring or, to the extent
known or reasonably anticipated, is probable of occurring in the
future in connection with the conduct of Seller's H&S Remote
Control Business and there is no spill, deposit, or discharge of
any hazardous substance (as that term is currently defined under
CERCLA or any applicable similar state law) at, on, into, under
or having originated from any facility or real property of
Seller. The assets of Seller do not include any equipment,
machinery, device, or other apparatus that contains
polychlorinated biphenyls (the "PCB Equipment") that is now or
ever has been leaking; any asbestos that is or reasonably may be
anticipated to become in friable condition within the next five
years; or any underground tank that contains petroleum products
or any toxic or hazardous material, substance or
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waste, as those terms are defined in the Environmental Laws,
which tank has not been determined by Petro Tite test or
equivalent method to be free of leaks within the last twelve
months. Schedule 10(w) contains a list of all (i) PCB Equipment,
whether leaking or not, and indicating which, if any, is now or
ever has been leaking, (ii) asbestos, whether in friable
condition or not, and (iii) underground tanks, whether tested as
described above or not, that are included within the assets of
Seller.
(x) SUBSIDIARIES. Seller does not have any equity
interest in any other corporation or in any partnership, joint
venture, association or other entity.
(y) TRUE AND COMPLETE DISCLOSURES. All information
furnished by Seller or Sparkman or its or their representatives
to Buyer or its representatives in connection with the
negotiation of this Agreement is true and complete in all
material respects. All of the statements, representations,
warranties and agreements made by Seller or Sparkman or Helbig
in this Agreement shall be true and correct in all material
respects on and as of the Closing and thereafter with the same
force and effect as if made by Seller or Sparkman or Helbig at
the Closing.
11. REPRESENTATION AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants that, as of the date hereof and as of the Closing Date:
(a) NO CONFLICT WITH OTHER INSTRUMENTS OR AGREEMENTS. Neither
the execution, delivery or performance of this Agreement and all other
instruments, agreements and other documents in connection herewith, nor
the consummation of the transactions contemplated hereby or thereby will
violate, conflict with or result in a breach of or constitute a default
under any contract, instrument, article of incorporation, by-law,
agreement, indenture or license to which Buyer is a party or by which
Buyer is bound or affected, or under any law, judgment, order, decree,
rule or regulation to which Buyer is subject. No governmental, public
authority or other agency, authorization, approval, order, license,
permit, or consent, and no registration, declaration or filing with any
governmental public authority or agency is required in connection with
the execution, delivery or performance of this Agreement or the other
instruments, agreements, or other documents by Buyer or the consummation
of the transactions hereby or thereby.
(b) CORPORATE ORGANIZATION AND AUTHORIZATION. Buyer is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the corporate power to own and
lease its properties and carry on its business in the State of
California and otherwise as necessary for the purposes of this
Agreement. All necessary corporate action and other proceedings required
to be taken by or on behalf of Buyer to authorize Buyer to enter into
and consummate this Agreement in accordance with the terms hereof have
been duly authorized and properly taken. This Agreement constitutes, and
all instruments, agreements and other documents to be delivered in
connection herewith, when
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executed and delivered, will constitute legal, valid and binding
obligations of Buyer, enforceable in accordance with their terms.
(c) TRUE AND COMPLETE DISCLOSURES. All information furnished by
Buyer of its representatives to Seller or its representative in
connection with the negotiation of this Agreement is true and complete
in all material respects. All of the statements, representations,
warranties and agreements made by Buyer in this Agreement shall be true
and correct in all material respects on and as of the Closing and
thereafter with the same force and effect as if made by Buyer at the
Closing.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The covenants,
representations and warranties of the parties contained herein and in any
exhibit, schedule or document attached hereto shall be deemed to have been
relied upon by the parties hereto, notwithstanding any investigation made by the
parties. All covenants, representations and warranties made herein shall not be
affected by any examinations or investigations conducted by Buyer or Seller
prior to Closing and shall survive the Closing and shall continue in effect
after the execution of this Agreement and the consummation of the sale
contemplated hereby unless waived in writing.
13. CONDITIONS OF OBLIGATIONS OF BUYER. The obligations of Buyer,
including but not limited to the obligation to close the transaction
contemplated hereunder, are, at the option of Buyer, subject to satisfaction of
the following conditions on or prior to the Closing, all of which may be waived
by Buyer in whole or in part:
(a) The representations and warranties of Seller, Sparkman, and
Helbig contained herein shall be true, correct and complete in all
material respects on and as of the Closing Date and Buyer shall have
received at the Closing a certificate to that effect, dated the Closing
Date and executed by the President of Seller and Sparkman and Helbig;
provided that the receipt of such certificate and the closing of the
sale herein provided shall not be deemed to be a waiver of any
representation or warranty contained in this Agreement, which
representations and warranties shall continue in full force and effect
for the benefit of the parties as provided in Section 13 hereof.
(b) Each of Seller, and Sparkman, and Helbig shall have
performed and observed, in all material respects, all covenants,
agreements, acts, undertakings and conditions of Seller, Sparkman, and
Helbig herein to be performed or observed by it on or before the Closing
Date.
(c) Seller, Sparkman, and Helbig shall have delivered to Buyer
the documents to be delivered at Closing under Section 7.1 in form
satisfactory to counsel for Buyer.
(d) Seller shall not have suffered any loss from fire, flood,
explosion or other casualty which materially and adversely affects the
conduct of the H&S Remote Control
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Business, financial condition or, irrespective of insurance, the value
of its assets, including, without limitation, the H&S Remote Control
Assets.
(e) No action, suit or proceeding by or before any court,
administrative agency or other governmental authority shall have been
instituted or threatened which may restrain, prohibit or invalidate any
transactions contemplated by this Agreement or which may materially and
adversely affect Seller, or Seller's or Sparkman's or Helbig's ability
to perform its or their obligations hereunder or the right of Buyer to
own, operate or control after the Closing the H&S Remote Control Assets
or to engage in the H&S Remote Control Business.
(f) There shall not have been, in the reasonable judgment of
Buyer, any material adverse change in the assets, liabilities, financial
condition, business or results of operations of Seller from that
reflected in the Financial Statements. Neither Sparkman nor Helbig shall
have died or become disabled.
(g) Buyer shall have obtained, at its expense, inspection
reports satisfactory to Buyer concerning all aspects of the H&S Remote
Control Business, legal, financial, accounting and corporate condition
and property as Buyer deems appropriate.
(h) The execution, delivery and performance of this Agreement
and the other instruments, documents, and agreements contemplated hereby
shall have been approved by the Board of Directors of Buyer.
(i) Buyer shall have obtained such financing as it deems
necessary and in such form satisfactory to it for purposes of payment of
the Purchase Price.
(j) Buyer shall have entered into an enforceable agreement to be
the exclusive supplier of remote controls to General Instrument
Corporation.
In the event any of the foregoing conditions shall not have been
fulfilled on or before Closing, this Agreement may, at the option of Buyer, be
declared null and void.
14. CONDITIONS OF OBLIGATIONS OF SELLER, SPARKMAN and Helbig. The
obligations of Seller, Sparkman and Helbig, including but not limited to the
obligation to close the transactions contemplated hereunder, are, at the
respective options of the Seller, Sparkman, and Helbig subject to the
satisfaction of the following conditions on or prior to the Closing all of which
may be waived by either Seller, Sparkman, or Helbig in whole or in part:
(a) The representations and warranties of Buyer contained herein
shall be true, correct and complete in all material respects on and as
of the Closing Date and Seller, Sparkman and Helbig shall have received
at the Closing a certificate to that effect, dated the Closing Date, and
executed on behalf of Buyer by its president or chief financial officer.
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(b) Buyer shall have performed and observed, in all material
respects, all covenants, agreements and conditions herein to be
performed or complied with by Buyer on or before the Closing Date.
(c) Buyer shall have delivered the documents and funds to be
delivered at Closing under Section 7.2 in form reasonably satisfactory
to counsel for Seller.
In the event any of the foregoing conditions shall not have been
fulfilled on or before Closing, this Agreement may, at the option of Seller be
declared null and void.
15. THIS SECTION INTENTIONALLY OMITTED.
16. FURTHER ASSURANCES. Each party hereto shall from time to time at the
reasonable request of the other party hereto, whether on or after the Closing,
do, make, execute, acknowledge, and deliver all such further acts and
instruments of conveyance, assignment, transfer and consent, in form and
substance reasonably satisfactory to the requesting party, concerning compliance
with the terms and conditions of this Agreement as such requesting party may
reasonably require for the more effective performance of their respective
obligations hereunder and the completion of the transactions contemplated
hereby.
17. TAXES. The cost of all sales and use and any other transfer taxes,
if any, arising out of the transfer and sale of the assets described herein,
shall be determined prior to Closing by Seller and Buyer, and shall be paid by
Seller. Seller shall at Closing deliver to Buyer a sales tax resale certificate
for all applicable states for the properties purchased hereunder which will be
resold to customers in the ordinary course of business after Closing.
18. THIS SECTION INTENTIONALLY OMITTED.
19. POST CLOSING MATTERS. On the fifth (5th) business day prior to the
Closing Date, Seller shall provide to Buyer a complete and accurate list of all
creditors of Seller (including those creditors whose claims are disputed)
together with the current balance of amounts owed such creditor (including
disputed amounts). The amount due creditors, as reflected on the list, shall be
held back by Buyer from the Purchase Price until such time as such creditors
shall have been paid in full.
20. CONTINUING OBLIGATIONS. Seller and Buyer agree that any and all
confidential financial data, customer lists and data, and any confidential books
and records or other materials provided or made available to the other party
prior to or after Closing (collectively, "Confidential Information"), which is
not otherwise available to the public, shall be held strictly confidential and
shall not be provided or made available to any other party than the parties to
this Agreement. Confidential Information shall not include (a) information,
whether or not a true "trade secret", which at the time concerned is generally
known to other persons engaged in business similar to Buyer's or Seller's
business, (b) information which was previously known to the party receiving it,
(c) information which was in the public domain at the time such party received
it or thereafter
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entered the public domain through no fault of such party, or (d) information
which is required to be disclosed in legal proceedings.
21. INDEMNIFICATIONS.
21.1 BY SELLER, SPARKMAN AND HELBIG. Each of Seller, Sparkman and
Helbig, jointly and severally, hereby agrees to indemnify Buyer and its
successors, assigns and affiliates, and present and future directors, officers,
employees, and agents against, and hold them harmless from and against all
damages, losses, liens, claims, deficiencies, liabilities, fines, penalties,
costs and expenses, including but not limited to reasonable legal fees and costs
of litigation (collectively referred to as "Damages") resulting from, caused by
or arising out of any of the following:
(i) The inaccuracy of any statement or representation or the
breach of any warranty, covenant, or Agreement of Seller or Sparkman or
Helbig made herein, or the failure of Seller or Sparkman or Helbig to
perform any covenant or agreement made herein;
(ii) Any claim against any of the H&S Remote Control Assets or
against Buyer by a creditor of Seller arising out of a breach of this
Agreement by Seller or Sparkman or Helbig;
(iii) Any transaction, occurrence or action by Seller or
Sparkman or Helbig in connection with the operation of the H&S Remote
Control Business by Seller or Sparkman or Helbig prior to the Closing
Date;
(iv) Any claim contained in any pending litigation against
Seller or Sparkman or Helbig; and
(v) Any claim asserted against Buyer by reason of any
noncompliance of any applicable bulk sales laws under the provisions of
the Uniform Commercial Code or similar law in any jurisdiction.
21.2 BY BUYER. Buyer hereby agrees to indemnify and hold Seller and its
successors, assigns and affiliates, and present and future directors, officers,
employees, and agents against, and hold them harmless from and against all
Damages resulting from, caused by or arising out of the following:
(i) The inaccuracy of any statement or representation or the
breach of any warranty, covenant, or agreement of Buyer made herein, or
the failure of Buyer to perform any covenant or agreement made by it
herein;
(ii) Any transaction, occurrence, action or omission in
connection with the operation of the H&S Remote Control Business by
Buyer after the Closing Date; and
(iii) Any claim contained in any pending litigation against
Buyer.
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21.3 NOTICE AND PROCEDURES.
(a) Promptly after any party hereto (hereinafter the
"Indemnified Party") has received notice of or has knowledge of any
claim by a person not a party to this Agreement ("third person") or the
commencement of any action or proceeding by a third person, the
Indemnified Party shall, if a claim with respect thereto is to be made
against any party obligated to provide indemnification pursuant hereto
(hereinafter the "Indemnifying Party"), give the Indemnifying Party
written notice of such claim or the commencement of such action or
proceeding. Such notice shall state the nature and basis of such claim
and, if ascertainable, the amount thereof. In each such case the
Indemnified Party agrees to give such notice to the Indemnifying Party
promptly; provided, however, that the failure of the Indemnified Party
to give such notice shall not excuse the Indemnifying Party's obligation
to indemnify except to the extent the Indemnifying Party has suffered
damage or prejudice by reason of the Indemnified Party's failure to give
or delay in giving such notice. The Indemnified Party shall have the
right to compromise or defend such third person claim, at the expense of
the Indemnifying Party. After receipt of such notice from the
Indemnified Party, the Indemnifying Party shall acknowledge in writing
its obligation to indemnify in respect of such third person claim.
Provided that the Indemnifying Party shall have so acknowledged its
obligation to indemnify in respect of such claim, the Indemnifying Party
may, at its expense, have the right to participate in the defense of
such third person claim and no such third person claim shall be settled
by the Indemnified Party without the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. At any time after
notice of any third person claim, the Indemnifying Party may request the
Indemnified Party to agree in writing to the payment or compromise of
the third person claim, whereupon such action shall be taken unless the
Indemnified Party determines that the contest should be continued, and
so notifies the Indemnifying Party in writing within fifteen (15) days
of such request from the Indemnifying Party. In the event that the
Indemnified Party determines that the contest should be continued, the
Indemnifying Party shall be liable pursuant to this Section 21 with
respect to such claim only to the extent of the lesser of (i) the amount
which the other party to the contested third person claim had agreed to
accept in complete payment or compromise as of the time the Indemnifying
Party made its request therefor to the Indemnified Party plus other
Damages incurred to such date with respect to such claim, or (ii) such
amount for which the Indemnifying Party may be liable with respect to
such third person claim by reason of the provisions of this Section 21.
(b) If an Indemnified Party shall have any claim pursuant to
this Section 21, including but not limited to a claim for Damages as the
result of the Indemnifying Party's failure to acknowledge its obligation
to indemnify, the Indemnified Party shall deliver to the Indemnifying
Party written notice explaining the nature and amount of such claim
promptly after the Indemnified Party shall know the amount of such
claim. The Indemnified Party and Indemnifying Party shall thereafter
attempt in good faith for a period of not less than thirty (30) days to
agree upon whether the Indemnified Party is entitled to be indemnified
and held
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harmless under this Section 21 and the extent to which it is entitled to
be indemnified and held harmless hereunder. If the parties cannot so
agree within said period, the Indemnified Party may thereafter commence
litigation in a court of competent jurisdiction for a determination of
its claim. Upon resolution of any claim pursuant to this Section 21,
whether by agreement between the parties or the rendering of a final
judgment in any litigation, the Indemnifying Party shall within ten (10)
of such resolution pay over and deliver to the Indemnified Party funds
in the amount of any claim as resolved, and any fees, including
reasonable attorneys' fees, incurred by the Indemnified Party with
respect to any such litigation.
21.4 SET OFF. Notwithstanding anything to the contrary herein, in the
event Buyer has a claim for indemnification pursuant to this Section 21, Buyer
may set off Damages against any portion of the Purchase Price, if any.
22. THIS SECTION INTENTIONALLY OMITTED.
23. EXPENSES. Except to the extent otherwise provided by this Agreement
or as specifically authorized in writing by the parties hereto, each party shall
pay for its own legal, accounting and other similar expenses incurred in
connection with the transactions contemplated by this Agreement, whether or not
such transactions are consummated.
24. NO BROKERAGE COMMISSIONS. Each party represents and warrants that
this Agreement is the result of direct negotiations between them and that there
are no claims for brokerage commissions or finders fees in connection with the
transactions contemplated by this Agreement. Each of the parties agrees to
indemnify and hold harmless the other as a result of liability to any broker or
finder on the basis of any arrangement or agreement made by or on behalf of such
party.
25. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement and the exhibits
and schedules attached hereto contain the entire agreement between the parties
hereto with respect to the transactions contemplated herein, and supersede all
prior agreements or understandings between the parties relating to the subject
matter hereof. This Agreement, and all questions concerning its construction,
validity, and interpretation, and the performance of the obligations imposed by
this Agreement, shall be governed, interpreted and enforced according to the
internal law, not the law of conflicts, of the State of California. All
exhibits, schedules and attachments attached hereto are incorporated herein by
this reference.
26. ASSIGNABILITY. This Agreement shall not be assignable by any of the
parties hereto, except that it may be assigned by Buyer to any corporation
controlled by, or under direct or indirect common control with, Buyer. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, representatives, successors and permitted assigns.
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27. SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions of this Agreement and any other application thereof
shall not in any way be affected or impaired thereby (except if such partial
invalidity may frustrate the basic intents and purposes hereof).
28. TERMINATION. This Agreement may be terminated or abandoned any time
prior to the consummation hereof by (a) the mutual consent of the parties
hereto; (b) either Buyer or Seller, respectively, if there has been a material
misrepresentation or breach on the part of Seller or Buyer, respectively, of any
representation, warranty or covenant set forth in or made pursuant to this
Agreement; or (c) Buyer or Seller if the Closing has not occurred by October 31,
1998; provided, however, that any termination pursuant to clause (b) above shall
not be deemed to be a waiver of any rights and remedies otherwise available
under this Agreement, by operation of law or otherwise to the party who so
terminates.
29. WAIVERS AND NOTICES. Any term or condition of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a written
instrument. No delay or failure on the part of any party in exercising any
rights hereunder, and no partial or single exercise thereof, will constitute a
waiver of such rights or of any other rights hereunder nor shall operate as a
waiver of, or estoppel with respect to, any subsequent or other exercise of any
rights hereunder. All notices, waivers, consents, requests, instructions,
approvals, and other communications provided for herein shall be in writing and
shall be validly given, made or served (a) upon delivery to the address of such
party specified below if delivered personally or by courier, or sent by
certified or registered mail, return receipt requested, postage prepaid, or (b)
upon dispatch if transmitted by telecopy or other means of facsimile, in any
case to the parties at the following addresses or facsimile number, as the case
may be:
(a) If to Seller or Sparkman or Helbig:
Mr. J. C. Sparkman
2530 South Dudley Street
Lakewood, Colorado 80227
Facsimile No. (303) 984-1427
Telephone No.: (303) 980-5497
(b) If to Buyer:
Universal Electronics Inc.
6101 Gateway Drive
Cypress, California 90630
Attention: President
Facsimile No.: (714) 820-1010
Telephone No.: (714) 820-1000
With a Required Copy to: Universal Electronics Inc.
24
25
6101 Gateway Drive
Cypress, California 90630
Attention: General Counsel
Facsimile No.: (714) 820-1010
Telephone No.: (714) 820-1000
or to such other address or facsimile number as either party may have furnished
to the other in writing in accordance herewith, except that notices of change of
address shall only be effective upon receipt.
30. AMENDMENT. This Agreement may be amended, modified, or supplemented
only by written agreement of the parties hereto.
31. REMEDIES CUMULATIVE. All remedies of the parties provided herein
shall, to the extent permitted by law, be deemed cumulative and not exclusive of
any thereof or of any other remedies available to the parties, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained herein, and every remedy given herein or by
law to any party hereto may be exercised from time to time, and as often as
shall be deemed expedient, by such party.
32. SPECIFIC PERFORMANCE. Each of Seller and Sparkman and Helbig
acknowledges and agrees that the H&S Remote Control Assets are unique, that
damages for any failure of Seller to transfer the H&S Remote Control Assets
pursuant to this Agreement would be an inadequate remedy, and that Buyer shall
be entitled to enforcement by judgment for specific performance.
33. HEADINGS. The section and other headings contained in this Agreement
are for reference purposes only and shall not affect the interpretation or
meaning of this Agreement.
34. COUNTERPARTS. This Agreement shall be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
35. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent and no rule of strict construction will be applied against any party.
36. AGREEMENT CONFIDENTIAL. Prior to Closing, no public announcement
will be made by any party hereto relating to any of the transactions
contemplated by this Agreement without the consent of any other party hereto and
all parties will use their best efforts to keep such transactions confidential
until Closing, except to the extent disclosure is required by law.
[SIGNATURES CONTAINED ON THE FOLLOWING PAGE]
25
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
UNIVERSAL ELECTRONICS INC.,
a Delaware corporation
By:
--------------------------------------
Camille Jayne, President
ATTEST:
- ----------------------------------
Its Secretary
H & S Management Corp.,
a Colorado corporation
By:
--------------------------------------
J.C. Sparkman,
------------------------
ATTEST:
- ----------------------------------
Its Secretary
-----------------------------------------
J.C. Sparkman, Individually
-----------------------------------------
Steven Helbig, Individually
26
27
EXHIBIT 1.2
PURSUANT TO SECTION 1.2
OF THE
ASSET PURCHASE AGREEMENT
NON-COMPETE AGREEMENT
This NON-COMPETE AGREEMENT made this ____ day of August, 1998 by and
among H & S [Management Corp.], a Colorado corporation ("H&S"), J. C. Sparkman,
a Colorado resident ("Sparkman"), and Steven Helbig, a Colorado resident
("Helbig") (individually, each of H&S, Sparkman and Helbig is referred to herein
as a "Covenantee", and collectively, the "Covenantees"), and Universal
Electronics Inc., a Delaware corporation ("UEI").
W I T N E S S E T H:
WHEREAS, Covenantees and UEI have entered into a certain Asset Purchase
Agreement dated August ___ 1998 ("Purchase Agreement") (unless otherwise defined
herein, capitalized terms shall be used herein as defined in the Purchase
Agreement) pursuant to which UEI will purchase from H&S the H&S Remote Control
Business and the H&S Remote Control Assets; and
WHEREAS, pursuant to the terms of the Purchase Agreement, UEI has agreed
to pay Covenantees a total of $__________ for this Non-Compete Agreement, with
such payment allocated among the Covenantees as set forth on the allocation
schedule attached to the Purchase Agreement; and
WHEREAS, it is a condition to the Closing under the Purchase Agreement
that this Non-Compete Agreement be entered into by each of the Covenantees and
by UEI;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. NON-COMPETE; NON-SOLICITATION. In consideration of the consideration
paid to each of the Covenantees for this Agreement as described above and in the
Purchase Agreement, each Covenantee covenants and agrees that, for a period of
seven (7) years from the date hereof (the "Non-Compete Period") Covenantee shall
not, directly or indirectly, either alone or in partnership or jointly or in
conjunction with any person or persons, firm, association, syndicate, company or
corporation as principal, agent, employee, director, shareholder or in any other
manner whatsoever (i) carry on or be engaged in the H&S Remote Control Business
or any other business which is in competition with the H&S Remote Control
Business as existing on the date hereof, (ii) solicit business from or transact
business with any person, firm or corporation to whom UEI or any
28
Covenantee has sold products where such solicitation would involve the sale of
products competitive with those of the H&S Remote Control Business, or (iii)
directly or indirectly solicit for employment, offer employment to, or hire any
person (as an employee or consultant), or other engage in business any person or
persons who is or or are employed by UEI immediately after the consummation of
the transactions contemplated by the Purchase Agreement or during the
Non-Compete Period, except with the prior written consent of UEI.
1.1 EXCEPTIONS TO NON-COMPETE; NON-SOLICITATION. Nothing within Section
1, above shall prohibit any Covenantee from (i) carrying on or being engaged in
any type of business, which is not competitive with the H&S Remote Control
Business in any area whatsoever, or (ii) being an owner of not more than 5% of
the outstanding stock of any class of a corporation which is publicly traded
whose principal business is competitive with the H&S Remote Control Business, so
long as Covenantee has no active participation in the business of such
corporation.
2. REMEDIES. Each Covenantee acknowledges that the covenants and
agreements which it has made in this Agreement are reasonable and are required
for the reasonable protection of UEI's investment in the H&S Remote Control
Assets and the H&S Remote Control Business. Each Covenantee agrees that the
breach of any covenant or agreement contained herein will result in irreparable
injury to UEI, and that in addition to all other remedies provided by law or in
equity with respect to the breach by Covenantee of any provision of this
Agreement, UEI and its successors and assigns will be entitled to enforce the
specific performance by Covenantee of Covenantee's obligations hereunder and to
enjoin Covenantee from engaging in any activity in violation hereof, all without
the need of posting bond or any other security, and that no claim by Covenantee
against UEI or its successors or assigns will constitute a defense or bar to the
specific enforcement of such obligations. Each Covenantee agrees that UEI and
any successor or assign shall be entitled to recover all costs of successfully
enforcing any provision of this Agreement, including reasonable attorneys' fees
and costs of litigation (including incurred in connection with any
administrative, alternative dispute resolution or appellate proceeding) and any
interest. In the event of a breach or a violation by any Covenantee of any of
the provisions of this Agreement, the running of the Non-Compete Period, shall
be tolled during the period of the continuance of any actual breach or
violation.
3. PARTIAL INVALIDITY. The various covenants and provisions of this
Agreement are intended to be severable and to constitute independent and
distinct binding obligations and of each of the Covenantees. Should any covenant
or provision of this Agreement be determined to be void and unenforceable, in
whole or in part, it shall not be deemed to affect or impair the validity of any
other covenant or provision or part thereof, and such covenant or provision or
part thereof shall be deemed modified to the extent required to permit
enforcement. Without limiting the generality of the foregoing, if the scope of
any covenant contained in this Agreement is too broad to permit enforcement to
its full extent, such covenant shall be enforced to the maximum extent permitted
by law, and the Covenantees hereby agree that such scope may be judicially
modified accordingly.
4. ASSIGNMENT. Each Covenantee agrees that this Agreement may be
assigned by UEI
29
to any entity controlled by, or under direct or indirect common control with,
UEI and to any person to whom UEI sells its business or assets, and that upon
any such assignment, such assignee shall acquire all of UEI's rights under this
Agreement, including without limitation the right of assignment set out in this
Section 4.
5. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party
hereto.
6. NOTICE. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
to any party (i) upon delivery to the address of such party specified below if
delivered in person or by courier, or if sent by certified or registered mail
(return receipt requested), postage prepaid, (ii) upon dispatch if transmitted
by telecopy or other means of facsimile, in any case to the parties at the
following address(es) or telecopy number(s), as the case may be:
If to any Covenantees:
Mr. J. C. Sparkman
2530 South Dudley Street
Lakewood, Colorado 80227
Facsimile No.: (303) 984-1427
Telephone No.: (303) 980-5497
If to UEI:
Universal Electronics Inc.
6101 Gateway Drive
Cypress, California 90630
Attn.: President
Facsimile No.: (714) 820-1010
Telephone No.: (714) 820-1000
With required copies to:
Universal Electronics Inc.
6101 Gateway Drive
Cypress, California 90630
Attn.: General Counsel
Facsimile No.: (714) 820-1010
Telephone No.: (714) 820-1000
or to such address(es) or telecopy number(s) as any party may designate by
written notice in the
30
aforesaid manner.
7. WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement by any other party shall not operate or be construed
as a waiver of any subsequent breach.
8. ENTIRE UNDERSTANDING. This Agreement and the agreements referred to
herein constitute the entire understanding and shall not be changed, altered,
modified or discharged, except in writing consented to by all parties.
9. BINDING EFFECT. This Agreement shall be binding upon the
administrators, legal representatives, heirs and legatees and the successors and
assigns of each Covenantee and UEI.
10. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of California, without regard to its
conflicts of laws provisions.
11. COUNTERPARTS. This Agreement shall be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
COVENANTEES: UEI:
H & S [MANAGEMENT CORP.] UNIVERSAL ELECTRONICS INC.
By: By:
------------------------------- --------------------------------------
Its: Camille Jayne, President & CEO
-----------------------------
- ---------------------------------
J. C. SPARKMAN
- ---------------------------------
STEVEN HELBIG
31
EXHIBIT 7.1(c)
PURSUANT TO SECTION 7.1(c)
OF THE
ASSET PURCHASE AGREEMENT
[FORM OF OPINION OF COUNSEL TO SELLER, SPARKMAN AND HELBIG]
August ___, 1998
Universal Electronics Inc.
6101 Gateway Drive
Cypress, California 90630
Re: Asset Purchase dated August __, 1998 (the "Agreement"),
by Universal Electronics Inc. ("Purchaser"), H & S
[Management Corp.] ("Seller"), J. C. Sparkman
("Sparkman"), and Steven Helbig ("Helbig")
Gentlemen:
We are counsel to each of Seller, Sparkman and Helbig in connection with
the sale by Seller to Purchaser of H&S Remote Control Assets used or useful in
the H&S Remote Control Business. All capitalized terms used herein and not
otherwise defined herein, shall have the meanings ascribed to them in the
Agreement. We are rendering this opinion pursuant to Section 7.1(c) of the
Agreement.
It is our opinion that:
1. (a) Seller is a corporation duly organized, validly
existing, and in good standing under the laws of
the State of Colorado; is duly qualified to do
business, and is in good standing in those
states in which Seller is legally required to be
so qualified; has full corporate power and
authority to own, lease and operate its business
and properties as now owned and conducted; and
has full corporate power and authority to
execute and deliver the Agreement and all other
agreements, documents and instruments to be
executed and delivered pursuant thereto and to
perform its obligations thereunder.
(b) Each of Sparkman and Helbig is a citizen of the
State of Colorado; locates his place of
residence in the State of Colorado; has the
legal capacity to execute and deliver the
Agreement and all other agreements, documents
and instruments to be executed and delivered
pursuant thereto and to perform his obligations
thereunder.
32
2. The execution and delivery of the Agreement and the other agreements,
documents and instruments to be executed and delivered pursuant thereto, and the
performance of the transactions provided for therein have been duly authorized
and approved by all requisite corporate action on the part of Seller and no
other corporate action on the part of Seller is required in connection with the
execution and delivery of the Agreement and the other agreements, documents and
instruments executed and delivered pursuant thereto and the performance by
Seller of its obligations thereunder.
3. Each of the Agreement and other agreements, documents and instruments
which have been executed by Seller, Sparkman, and/or Helbig pursuant thereto,
have been duly executed and delivered by Seller, Sparkman, and/or Helbig and
constitute legal, valid and binding obligations of and are enforceable against
each of Seller, Sparkman, and Helbig in accordance with their terms, except to
the extent that the enforcement thereof may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally or by equitable principals (whether
considered to be an action at law or in equity).
4. Neither the execution and delivery of the Agreement and other
agreements, documents and instruments executed and delivered pursuant thereto by
Seller, Sparkman, and/or Helbig, nor the consummation of the transactions
contemplated thereby will (a) violate the [Articles/Certificate] of
Incorporation or By-Laws of Seller, (b) violate, conflict with, or constitute a
default under, or cause the acceleration of the maturity of any debt or
obligation pursuant to, or result in the creation or imposition of any security
interest, lien or other encumbrance upon any of the H&S Remote Control Assets
under, any agreement or commitment to which Seller, Sparkman, and/or Helbig are
parties or by which either of them or any of the H&S Remote Control Assets may
be bound or affected, (c) violate any statute or law or any regulation or rule
of governmental authority, or (d) violate any judgment, decree, injunction, writ
or order known to us to be applicable to Seller, Sparkman, Helbig, or any of the
H&S Remote Control Assets.
5. Neither Seller, Sparkman nor Helbig is in default on any
indebtedness, contract, lease, or commitment to which any of them or any of
their assets is a party or bound.
6. Seller has exclusive, good and marketable title free of licenses,
liens, claims, encumbrances, charges, and other exceptions (or claims thereof)
of any kind to all of the H&S Remote Control Assets.
7. Neither Seller, Sparkman nor Helbig are engaged in or a party to any
legal action or other proceeding, and there are no legal actions or other
proceedings threatened against Seller, Sparkman or Helbig, and none of Sparkman,
Helbig, Seller or any current management employee of Seller has incurred or been
charged with, and is not under investigation with respect to, any violation of
any foreign, federal, state or local law or administrative regulation, any of
which if adversely determined could, in the opinion of the undersigned adversely
affect or impair the condition (financial or otherwise) of the H&S Remote
Control Assets or the H&S Remote Control Business.
33
8. No consent of any governmental authority is required for the
execution and delivery of the Agreement and the other agreements, documents and
instruments executed and delivered pursuant thereto by Seller, Sparkman, and/or
Helbig, and the consummation by Seller, Sparkman, and/or Helbig of the
transactions contemplated thereby.
9. All bills of sale, assignments, deeds and other agreements, documents
and instruments to be delivered by Seller at the Closing are effective to sell,
convey and assign to Purchaser all of Seller's right, title and interest in and
to the &S Remote Control Assets free and clear of all licenses, liens,
encumbrances, charges, and other exceptions (or claims thereof).
10. Seller has all necessary authorizations, approvals, licenses,
permits, and orders of and from all governmental and regulatory offices and
bodies to carry on its business as now being conducted, to own or hold under
lease the property and assets it owns and holds under lease, and to perform the
obligations under the agreements to which it is a party, and no proceeding is
pending or threatened which seeks to revoke, limit or suspend any such
authorization, approval, license, permit or order. To the best of our knowledge,
Seller is in compliance with all applicable laws, contractual or legal
restrictions, regulations and administrative and executive orders of any
country, state or municipality or of any subdivisions thereof to which Seller's
business and employment of labor or use or occupancy of properties or any part
thereof are subject, and Seller has not received notice of any violation thereto
and the laws of those states in which Seller is legally required to be qualified
to transact business.
Sincerely,
[INSERT NAME OF LAW FIRM]
By:
--------------------------------------
34
SCHEDULE 1.1(a)
PURSUANT TO SECTION 1.1(a)
OF THE
ASSET PURCHASE AGREEMENT
NON H&S REMOTE CONTROL ASSETS
All assets not specifically identified within the Asset Purchase Agreement
35
SCHEDULE 10(a)
PURSUANT TO SECTION 10(a)
OF THE
ASSET PURCHASE AGREEMENT
STATES WHERE SELLER IS QUALIFIED
- --------------------------------
Colorado
36
SCHEDULE 10(d)
PURSUANT TO SECTION 10(d)
OF THE
ASSET PURCHASE AGREEMENT
SELLER FINANCIAL STATEMENTS
- ---------------------------
None Provided
37
SCHEDULE 10(e)
PURSUANT TO SECTION 10(e)
OF THE
ASSET PURCHASE AGREEMENT
LIST OF LITIGATION, CLAIMS AND CONTINGENT LIABILITIES
- -----------------------------------------------------
None
38
SCHEDULE 10(w)
PURSUANT TO SECTION 10(w)
OF THE
ASSET PURCHASE AGREEMENT
LIST OF ENVIRONMENTAL PERMITS/NOTICES/CLAIMS
- --------------------------------------------
None
39
SCHEDULE 1(a)
PURSUANT TO SECTION 1(a)
OF THE
ASSET PURCHASE AGREEMENT
INVENTORY
- ---------
NONE
40
SCHEDULE 1(b)
PURSUANT TO SECTION 1(b)
OF THE
ASSET PURCHASE AGREEMENT
ORDERS/WORK IN PROCESS
- ----------------------
NONE
41
SCHEDULE 1(c)
PURSUANT TO SECTION 1(c)
OF THE
ASSET PURCHASE AGREEMENT
TOOLING
- -------
NONE
42
SCHEDULE 1(d)
PURSUANT TO SECTION 1(d)
OF THE
ASSET PURCHASE AGREEMENT
EQUIPMENT
- ---------
NONE
43
SCHEDULE 1(g)
PURSUANT TO SECTION 1(g)
OF THE
ASSET PURCHASE AGREEMENT
CONTRACT RIGHTS
- ---------------
1. Agreement between from GI Communications Division of General Instrument
Corporation of Delaware dated July 1, 1996 and amended on February 23,
1998 whenerby such amendment assigned the agreement to H & S Management
Corp.
44
SCHEDULE 9.3
PURSUANT TO SECTION 9.3
OF THE
ASSET PURCHASE AGREEMENT
INSURANCE COVERAGE AND POLICIES
- -------------------------------
[List to be provided by Seller]
45
SCHEDULE 8
PURSUANT TO SECTION 8
OF THE
ASSET PURCHASE AGREEMENT
PURCHASE PRICE ALLOCATION
- -------------------------
1. To H & S Management Corp.
Inventory; Orders/Work in Process;
Tooling; Equipment; Artwork;
Supplies; Contract; Rights;
Licenses and Permits; Records; and
Intangible/Goodwill $2,273,689.13
Non-Compete 50,000.00
-------------
Total $2,323,689.13
=============
2. To J. C. Sparkman
Non-Compete $ 25,000.00
=============
3. To Steven Helbig
Non-Compete $ 25,000.00
=============
Aggregate Total $2,373,689.13
=============
46
SCHEDULE 9.3
PURSUANT TO SECTION 9.3
OF THE
ASSET PURCHASE AGREEMENT
INSURANCE COVERAGE AND POLICIES
- -------------------------------
[List to be provided by Seller]