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EXHIBIT 10.35
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION (TOGETHER, THE "SECURITIES LAWS") AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED OR ENCUMBERED IN THE ABSENCE OF COMPLIANCE WITH
SUCH SECURITIES LAWS AND UNTIL THE ISSUER THEREOF SHALL HAVE RECEIVED FROM
COUNSEL ACCEPTABLE TO SUCH ISSUER A WRITTEN OPINION ACCEPTABLE TO SUCH ISSUER
THAT THE PROPOSED SALE, TRANSFER OR ENCUMBRANCE WILL NOT VIOLATE ANY APPLICABLE
LAWS, INCLUDING WITHOUT LIMITATION, THE SECURITIES LAWS.
VOID AFTER 2:00 P.M., CYPRESS, CALIFORNIA TIME, ON THE EXERCISE EXPIRATION DATE,
AS DEFINED HEREINBELOW.
WARRANT FOR THE PURCHASE OF UP TO
300,000 SHARES
OF
COMMON STOCK, PAR VALUE $.01 PER SHARE,
OF
UNIVERSAL ELECTRONICS INC., A DELAWARE CORPORATION
THIS IS TO CERTIFY THAT, FOR VALUE RECEIVED, THE RECEIPT AND SUFFICIENCY OF
WHICH IS HEREBY ACKNOWLEDGED AND ACCEPTED,
GENERAL INSTRUMENT CORPORATION, a Delaware corporation, or its permitted
successors and permitted assigns ("Holder"), is entitled to purchase, subject to
the provisions of this Warrant, from UNIVERSAL ELECTRONICS INC., a Delaware
corporation (the "Corporation"), up to Three Hundred Thousand (300,000) shares
of the Corporation's common stock, par value $.01 per share ("Common Stock"), at
an exercise price of 12 and 5/8 dollars per share (the "Exercise Price"), at any
time or from time to time on or after December 31, 2002, (the "Exercise Start
Date"), and not later than 2:00 P.M. Cypress, California time on December 31,
2004 (the "Exercise Expiration Date"). The number of shares of Common Stock
which the Holder is entitled to purchase and receive upon the exercise of this
Warrant shall be adjusted from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon any exercise of this Warrant by the Holder are
hereinafter sometimes referred to as "Warrant Stock". The time period commencing
on the Exercise Start Date and ending on the Exercise Expiration Date is
hereinafter sometime referred to as the "Exercise Period".
1. EXERCISE OF WARRANT. Subject to Sections 2 and 3 and the other
provisions of this Warrant, the Holder may exercise this Warrant, in whole or in
part (but in no event in fractional
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shares), at any time or from time to time during the Exercise Period by
presentation and surrender of this Warrant to the Corporation at its principal
office, together with: (a) the Purchase Form annexed hereto properly prepared
and duly executed by the Holder, (b) payment, in United States Dollars, of the
aggregate Exercise Price for the number of Warrant Shares specified in such
Purchase Form, together with all federal, state and local taxes applicable upon
such exercise, (c) such representations from the Holder as are deemed necessary
by the Corporation, and (d) a written opinion acceptable to the Corporation from
legal counsel further acceptable to the Corporation that such exercise (i) is in
accordance with the provisions of this Warrant and (ii) does not violate any
applicable law, including without limitation, the Securities Laws. As soon as
practicable after each such exercise, but not later than thirty (30) days from
the date of such exercise, the Corporation shall issue or shall cause to be
issued and delivered to the Holder a certificate or certificates for the shares
of Warrant Stock issuable upon such exercise. Upon the proper exercise of this
Warrant as set forth herein, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise notwithstanding
that the stock transfer books of the Corporation shall then be closed or that
certificates representing such shares of Common Stock shall not then be actually
delivered to the Holder.
2. DETERMINATION OF NUMBER OF WARRANT STOCK. (a) The number of shares of
Warrant Stock to which the Holder shall be entitled to purchase upon the proper
exercise hereunder shall be as follows:
(i) One Hundred Thousand (100,000) shares of Warrant Stock so
long as the Holder (or General Instrument Corporation, in the event of a
permitted assignment or transfer of this Warrant in accordance with the
provisions of this Warrant) purchases and pays for at least Three
Million (3,000,000) units of products from the Corporation during the
1999 calendar year; plus
(ii) One Hundred Thousand (100,000) shares of Warrant Stock so
long as the Holder (or General Instrument Corporation, in the event of a
permitted assignment or transfer of this Warrant in accordance with the
provisions of this Warrant) purchases and pays for at least Three
Million Five Hundred Thousand (3,500,000) units of products from the
Corporation during the 2000 calendar year; plus
(iii) One Hundred Thousand (100,000) shares of Warrant Stock so
long as the Holder (or General Instrument Corporation, in the event of a
permitted assignment or transfer of this Warrant in accordance with the
provisions of this Warrant) purchases and pays for at least Four Million
(4,000,000) units of products from the Corporation during the 2001
calendar year.
(b) As described in this subsection 2(b), the number and kind of
securities purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of the events described within
this subsection as follows:
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(i) If the Corporation (1) declares a dividend or makes a
distribution on its outstanding shares of Common Stock; or (2)
subdivides or reclassifies its outstanding shares of Common Stock into a
greater or smaller number of shares, then the number of Warrant Stock
subject to purchase upon the exercise of this Warrant shall be adjusted
(and the exercise price shall be correspondingly adjusted), effective at
the record date for such dividend or distribution or the effective date
of such subdivision, combination or reclassification, to a number of
Warrant Shares determined by multiplying the number of Warrant Shares
subject to purchase upon the exercise of this Warrant determined without
regard to any adjustment in connection with such dividend, distribution,
subdivision, combination or reclassification by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding immediately after giving effect to such dividend,
distribution, subdivision, combination or reclassification, and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately before giving effect to such dividend,
distribution, subdivision, combination or reclassification.
(ii) If the Corporation elects to issue shares of any class of
its capital stock ("Shares to be Issued"), or securities convertible
into or exchangeable for Shares to be Issued or any other options,
rights, or warrants to purchase Shares to be Issued or securities
convertible into or exchangeable for Shares to be Issued ("Securities"),
to any individual, corporation, partnership, association, trust or other
entity or organization (a "Person), the Corporation shall notify the
Holder in writing of the proposed issuance the number of Shares to be
Issued or the amount of Securities to be issued, the date on or about
which such issuance is to be consummated and the price and other terms
and conditions thereof, at least twenty (20) days prior to the proposed
date for consummation of such issuance. For a period of ten (10) days
after Holder's receipt of such notice, the Holder shall have the option
to purchase, upon the same price, terms and conditions as such Shares to
be Issued or Securities are proposed to be issued to such Person(s),
that number of Shares to be Issued or Securities as may be necessary to
adjust the number of shares of capital stock of the Corporation owned by
the Holder on a fully-diluted basis (including, without limitation, the
Warrant Stock) to provide that the percentage of all of the
fully-diluted shares of capital stock of the Corporation owned by the
Holder immediately after the date of issuance to such Person(s) is equal
to the percentage of all of the fully-diluted shares of Common Stock of
the Corporation owned by the Holder immediately prior to the date of
issuance. If the Holder exercises its purchase option under this
subsection 2(b)(ii), it shall purchase such Shares to be Issued or
Securities contemporaneously with the consummation of the issuance of
Shares to be Issued or Securities to such Person(s).
(iii) Notwithstanding anything to the contrary herein, the
provisions of this Section 2(b) shall not apply to the issue, sale,
distribution or grant of Common Stock to any employee, officer or
director of the Corporation of (1) any currently issued and outstanding
grant of options to subscribe for or purchase shares of Common Stock or
(2) any future grant of options pursuant to any Stock Incentive or other
stock option plan of the Corporation or (3) any shares of Common Stock
held by the Corporation in its treasury.
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(iv) No fractional shares shall be issued and therefore, all
calculations under this subsection 2(b) shall be made lowered to the
nearest full share of Common Stock.
(v) Whenever the number of Warrant Stock subject purchase upon
exercise of this Warrant is adjusted as herein provided, the Corporation
shall promptly cause a notice setting forth the adjusted number of
shares of Warrant Stock subject to purchase upon exercise of this
Warrant to be mailed to the Holder, with a copy thereof to be mailed to
the Corporation's Transfer Agent, if any. The Corporation's regularly
retained firm of independent certified public accountants may be used to
make any computation required by this subsection 2(b), and a certificate
signed by such firm shall be conclusive evidence of the correctness of
such adjustment.
(vi) In the event that at any time, as a result of an adjustment
made pursuant to subparagraph (i) above, the Holder of this Warrant
thereafter shall become entitled to receive any shares of the
Corporation other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained herein..
(vii) Irrespective of any adjustments to the number or kind of
Warrant Stock subject to purchase upon exercise of this Warrant, any
Warrants issued in substitution or replacement of this Warrant may
continue to express that same number and kind of Warrant Stock as are
stated in the Warrants initially issued by the Corporation.
(viii) As a condition precedent to the taking of any action which
would require an adjustment pursuant to this subsection 2(b), the
Corporation shall take any action which may be necessary in order that
the Corporation may thereafter validly and legally issue as fully paid
and nonassessable all Warrant Stock which the Holder of this Warrant is
entitled to receive upon the exercise thereof.
(ix) The Corporation shall not consummate a merger,
consolidation, or other form of business combination in which it is not
the surviving entity without making adequate provision for the exercise
of this Warrant with respect to the shares of the capital stock of such
surviving entity.
(c) In the event the Holder (or General Instrument Corporation, in the
event of a permitted assignment or transfer of this Warrant in accordance with
the provisions of this Warrant) fails to purchase and pay for the requisite
number of units of product as set forth in this Section 2 in any year, the
Holder shall have forfeited the right to acquire the applicable number of shares
of Warrant Stock for such year which shares may not be recouped by purchasing
additional quantities of product in any subsequent year.
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3. VESTING OF WARRANT STOCK. The Holder may not exercise this Warrant or
any part thereof until Holder is vested in shares of Warrant Stock to which the
Holder may purchase upon exercise as determined pursuant to Section 2 above. The
Holder shall become vested in
a. Fifty percent (50%) of such shares of Warrant Stock on
January 1, 2003; and
b. The balance of such shares of Warrant Stock on January 1,
2004.
4. RESERVATION OF SHARES OF WARRANT STOCK. The Corporation shall at all
times prior to the Exercise Expiration Date reserve and keep available, free
from preemptive rights, for issuance and/or delivery upon the proper exercise of
this Warrant by the Holder in accordance with the provisions of this Warrant,
such number of its duly authorized and unissued shares of Common Stock or shares
of Common Stock held by the Corporation in its treasury, or any combination
thereof, as shall be required for issuance and delivery of shares of Warrant
Stock upon the proper exercise of this Warrant in accordance with the provisions
of this Warrant. Upon such issuance, the shares of Warrant Stock shall be duly
authorized, validity issued, fully paid and nonassessable.
5. TRANSFER, EXCHANGE OR LOSS OF WARRANT.
a. No Holder shall give, sell, transfer (by operation of law or
otherwise, including without limitation any transfers due to the merger,
consolidation or other combination of the Holder with any other entity
or person or due to the bankruptcy or insolvency of Holder), pledge,
mortgage, hypothecate or otherwise dispose of ("Transfer") this Warrant
or any part hereof without the prior written consent of the Corporation,
which consent will not be unreasonably withheld or delayed.
Notwithstanding any consent given by the Corporation in connection with
any proposed Transfer of this Warrant or any part hereof, no such
proposed Transfer shall be effective unless and until the proposed
transferor properly provides to the Corporation: (i) such investment
representations and other information of the proposed transferee as the
Corporation may reasonably request; (ii) a duly and validly executed
Assignment Form, in the form of that attached hereto, together with
funds sufficient to pay any transfer tax; (iii) a legal opinion or other
evidence satisfactory to the Corporation from legal counsel to the
proposed transferor also acceptable to the Corporation that such
proposed transfer may be effected without registration under the
Securities Laws; and (iv) a binding written acknowledgment, in form and
substance satisfactory to the Corporation, executed by the proposed
transferee, pursuant to which such transferee agrees to be bound by the
terms and provisions set forth herein and that the proposed transferee
acknowledges that it is dependent upon General Instrument Corporation to
acquire significant quantities of product from the Corporation and the
passage of time before which it will entitled to acquired shares of the
Warrant Stock in accordance the provisions of this Warrant. The
Corporation shall, without charge to the transferor or the transferee,
execute and delivery a new Warrant or Warrants in the name or names of
the transferee or transferees and in the denomination or denominations
specified in such properly prepared, delivered and accepted instrument
of transfer, and this Warrant shall promptly be cancelled.
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b. Upon receipt by the Corporation of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant and (in
the case of loss, theft or destruction) of satisfactory indemnification
to the Corporation, and (in the case of mutilation) upon the surrender
and cancellation of this Warrant, the Corporation will prepare, execute
and deliver a new Warrant of like tenor and date exercisable for an
equivalent number of shares of Warrant Stock as replacement for the
lost, stolen, destroyed or mutilated Warrant.
6. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights as a stockholder of the Corporation, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant only and are not enforceable against the Corporation except to the
extent set forth herein.
7. WARRANT REGISTER. The Corporation shall maintain a register for the
registration of the Warrant and of its Transfer as permitted herein (the
"Warrant Register") at its principal executive office.
8. EXPIRATION OF WARRANT. This Warrant shall automatically expire and be
null, void and have no further effect after the Exercise Expiration Date without
further action of any kind or nature from either the Corporation or the Holder.
9. TRANSFERS TO COMPLY WITH SECURITIES LAWS.
a. This Warrant, the Warrant Stock and any other security issued
or issuable upon the proper exercise or Transfer of this Warrant may not
be offered for sale or Transfer nor sold or Transferred except in strict
conformity with the Securities Laws.
b. The Corporation may place or cause to be placed on this
Warrant and any certificate or certificates representing the Warrant
Stock or any other security issued or issuable upon the proper exercise
of this Warrant the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION (TOGETHER, THE
"SECURITIES LAWS") AND MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED OR ENCUMBERED IN THE ABSENCE OF COMPLIANCE
WITH SUCH SECURITIES LAWS AND UNTIL THE ISSUER THEREOF SHALL
HAVE RECEIVED FROM COUNSEL ACCEPTABLE TO SUCH ISSUER A WRITTEN
OPINION ACCEPTABLE TO SUCH ISSUER THAT THE PROPOSED SALE,
TRANSFER OR ENCUMBRANCE WILL NOT
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VIOLATE ANY APPLICABLE LAWS, INCLUDING WITHOUT LIMITATION, THE
SECURITIES LAWS.
10. PURCHASE FOR INVESTMENT. The Holder agrees, acknowledges and affirms
that this Warrant is being purchased and the Warrant Stock and any other
security issued or issuable upon the proper exercise or Transfer of this Warrant
will be purchased for investment purposes only and not for resale or other
distribution.
11. APPLICABLE LAW. This Warrant and all provisions contained herein
shall be governed by and construed in accordance with the laws of the State of
Delaware, without giving effect to such state's conflicts of laws provisions.
12. NOTICES. All notices and other communications provided for hereunder
shall be in writing (including telegraphic, telex or cable communication) and
shall become effective (a) when personally delivered on a business day during
normal business hours, (b) on the third business day following the day when
deposited, if mailed by certified or registered mail with return receipt
requested and postage thereon fully prepaid, (c) on the business day following
the business day when deposited if sent by overnight courier, fully prepaid, or
(d) on the business day such notice shall have been sent by telex, telegram,
telecopier, cable or similar electronics device, including facsimile, fully
prepaid. The addresses and facsimile numbers for such notices are as follows:
If to the Corporation:
Universal Electronics Inc.
6101 Gateway Drive
Cypress, California 90630
Facsimile No.: 714-820-1010
Attention: Secretary of the Corporation
If to the Holder, the address and facsimile number thereof as show on
the Warrant Register
or to such other addresses and facsimile numbers as any of the foregoing parties
shall from time to time designate in writing to the other party in accordance
herewith.
13. WAIVERS; AMENDMENTS. No failure or delay of either party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof, or any abandonment or
discontinuance of steps to enforce such a right, power or privilege, preclude
any other further exercise thereof or the exercise of any other rights, power or
privilege. The rights and remedies of either party hereto are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified, or waived so long as notice
of any such amendment, modification, or waiver is in writing and signed by the
party against whom such amendment, modification or waiver is sought to be
enforced.
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14. SEVERABILITY. In the event that any one or more of the provisions
contained in this Warrant shall be held to be invalid, illegal, or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired in such
jurisdiction and such a determination shall not invalidate or render illegal or
unenforceable such provision in any other jurisdiction.
15. SUCCESSORS AND ASSIGNS OF THE CORPORATION. All covenants, agreements
and provisions of this Warrant by or for the benefit of the Corporation shall
bind and inure to the benefit of its successors and assigns.
16. AUTHORITY. The Corporation hereby represents and warrants to the
Holder that all requisite corporate action necessary for the Corporation to
execute, deliver and perform this Warrant has been taken by the Corporation and
that this Warrant constitutes the legal, valid and binding obligation of the
Corporation, enforceable against it in accordance with its terms, except as the
enforceability thereof may be affected by applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting the enforcement of creditors'
rights generally and the possible unavailability of certain equitable remedies,
including the remedy of specific performance.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed this 9th day of November, 1998.
UNIVERSAL ELECTRONICS INC.
By:__________________________________
Its:__________________________________
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PURCHASE FORM
Date:_______________________
The undersigned hereby irrevocably elects to exercise the Warrant which
is attached hereto to the extent of purchasing __________ shares of Warrant
Stock and hereby tenders payment in cash of the aggregate Exercise Price.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name of Holder:________________________________________________________
(Type or Print Name in Block Letters)
Address:
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Signature
- - ---------------------------
Witness
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ___________________________________________ hereby
sells, assigns, and transfers unto
- - --------------------------------------------------------------------------------
(Please type or print name of Transferee in block letter)
- - --------------------------------------------------------------------------------
(Address)
the right to purchase shares of Common Stock of Universal Electronics Inc. (the
"Corporation") represented by this Warrant to the extent of Warrant Stock as to
which such right is exercisable, and does hereby irrevocably constitute and
appoint _______________________________________ as its attorney-in fact to
transfer the same on the Warrant Register of the Corporation with full power of
substitution in the premises.
Date:
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- - ---------------------------------
Signature
Universal Electronics Inc. hereby consents to the above referenced assignment.
UNIVERSAL ELECTRONICS INC.
By:____________________________
Its:___________________________
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(c) INTANGIBLE/GOODWILL. All of the intangible assets and
intellectual property used or useful in the Business including, without
limitation, (i) all trade secrets, proprietary or other trade rights of
Seller pertaining to the operation of the Business; (ii) all customer
lists, and (iii) all of the goodwill of Seller in the Business (the
"Intangibles/Goodwill").
(d) NO OTHER ASSETS. Seller is not selling and Purchaser is not
acquiring the right to any asset not described in Section 1.
2. PURCHASE PRICE; ALLOCATION. The aggregate purchase price (the
"Purchase Price") for the Assets is Seven Hundred Thousand Dollars (United
States) (US$700,000). The Purchase Price shall be allocated among the Assets as
follows:
(a) US$233,333 is allocated to the Records and the
Intangibles/Goodwill; and
(b) US$466,667 is allocated to the Covenants Not to
Compete/Confidentiality.
2.1 PAYMENT. The Purchase Price shall be paid on the Closing
Date
2.2 NO OTHER ASSUMED OBLIGATIONS. Notwithstanding anything contained
herein to the contrary, PURCHASER DOES NOT ASSUME ANY LIABILITY OR OBLIGATION OF
SELLER OR MAEIZUMI OF ANY KIND, whether fixed or contingent, known or unknown,
and whether to general or secured creditors, or for national, international,
state or local taxes of whatever kind, or otherwise.
3. CLOSING. The Closing shall be held at the offices of Strand Europe,
Ltd., Strand House, Galway Road, Blackbushe Business Park, Yateley, Hampshire at
11:00 a.m. local time on January 31, 1998, or such other date, place, or time as
the parties hereto shall agree in writing (the "Closing"). The date on which
Closing shall take place is referred to herein as the "Closing Date".
4. INTENTIONALLY OMMITTED
5. INTENTIONALLY OMMITTED
6. BEST EFFORTS. The parties hereto 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 February 15, 1998.
7. POSSESSION. At the Closing, Seller shall deliver to Purchaser
possession of all the Assets, which, in the case of all tangible assets, shall
be in the same condition in which they were on December 31, 1997, ordinary wear
and tear excepted.
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8. COVENANTS OF SELLER AND MAEIZUMI.
(a) INFORMATION AND ACCESS. From and after the date of this
Agreement and to the Closing, each of Seller and Maeizumi will, within
three (3) days of receiving a request (whether oral or written), furnish
or cause to be furnished to Purchaser and its duly authorized
representatives and agents any reasonably requested information about
Seller relating to the Assets and the Business and will give Purchaser
and its duly authorized representatives and agents, complete access with
reasonable notice and during normal business hours 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 Purchaser under this subsection 8(a) shall
not affect or mitigate the covenants, representations and warranties of
Seller and Maeizumi or Purchaser's rights to indemnity under this
Agreement.
(b) CONDUCT OF BUSINESS. From the date hereof through the
Closing, each of Seller and Maeizumi will conduct the Business
diligently and in the usual and ordinary course as heretofore conducted.
Seller and Maeizumi will use their respective best efforts to preserve
the Business intact and to preserve for Purchaser the goodwill and
relationship of Seller with its employees, suppliers, customers and
others having business relations with Seller. From the date hereof
through the Closing, each of Seller and Maeizumi will not, in connection
with the operation of the Business except with the consent of Purchaser,
incur any obligation or liability, engage in any activity or
transaction, or enter into any contract or commitment with respect to
the Business extending beyond the Closing, other than sales, purchases
or returns made in the ordinary course of the Business as heretofore
conducted.
(c) RISK OF LOSS/INSURANCE COVERAGE. Seller shall bear the risk
of loss on the Assets through the Closing. Each of Seller and Maeizumi
covenants and agrees that the Business and the Assets to be purchased by
Purchaser hereunder will each be adequately insured by Seller against
fire and casualty and any other claims or losses whatsoever, to the
Closing, and will use their respective best efforts to maintain in full
force and effect until Closing at the same level of coverage as Seller
had in place immediately prior to the 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.
(d) LITIGATION, CLAIMS AND CONTINGENT LIABILITIES. Each of
Seller and Maeizumi agrees to indemnify Purchaser and hold it harmless
from all Damages (as defined in Section 17 below) resulting from,
relating to or arising out of, all existing litigation and all claims
and contingent, undisclosed, or unknown liabilities of Seller which
relate to any condition existing, product produced or sold, or action
taken or omitted by Seller, whether prior to, on or after the Closing,
including but not limited to all such litigation, claims and liabilities
resulting from, related to or arising out of (i) 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,
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or action taken or omitted by Seller, and (ii) 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.
(e) EXCLUSIVITY. Prior to the Closing, each of Seller and
Maeizumi agrees not to conduct negotiations or discussions with anyone
other than Purchaser with respect to the sale of any of the Business,
Assets or capital stock of Seller.
9. REPRESENTATIONS AND WARRANTIES OF SELLER AND MAEIZUMI. Each of Seller
and Maeizumi represents and warrants that as of the date hereof, and as of the
Closing:
(a) CORPORATE STATUS AND VALIDITY. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of Hong
Kong, and is duly qualified to do business, and is in good standing in
all of the countries 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) INDIVIDUAL STATUS AND VALIDITY. Maeizumi has full power,
capacity, and authority to enter into and perform the transactions
contemplated by this Agreement and all other instruments, agreements,
and other documents contemplated hereby. This Agreement constitutes, and
all instruments, agreements, and other documents to be delivered in
connection herewith, when executed and delivered by Maeizumi, will
constitute the legal, valid, and binding obligation of Maeizumi,
enforceable in accordance with their respective terms.
(c) 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 either Seller, Maeizumi, the
Assets, or the 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, Maeizumi, the Assets, or the 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
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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 Maeizumi or the
consummation of the transactions contemplated hereby or thereby.
(d) TITLE TO ASSETS, ABSENCE OF LIENS. Seller has and at the
Closing will have, and the same pursuant hereto will vest in Purchaser,
good and marketable title and merchantable ownership, right, title and
interest in and to all of the Assets, in each case free and clear of all
liens, encumbrances, charges, and other exceptions (or claims thereof)
of whatever kind or nature. Seller owns, and has the right to sell and
convey to Purchaser without interference from others, all rights in and
to the Intangible Assets/Goodwill, 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 Intangible Assets/Goodwill.
(e) LITIGATION, CLAIMS AND CONTINGENT LIABILITIES. There is (i)
no action, suit, arbitration or administrative or judicial proceeding,
government investigation, judgment, order, writ, injunction or decree
outstanding, pending or threatened against Seller, Maeizumi, any person
in his capacity as an employee or agent of Seller, the Assets, the
Business, the goodwill of Seller, or any such matter to which Seller,
Maeizumi, or any such person is a party which adversely effects the
Assets or the Business being acquired hereunder, or the consummation of
the transactions contemplated hereunder, (ii) there is no contingent
liability of, and no claim made by any party against, Seller, Maeizumi,
any person in his capacity as an employee or agent of Seller, the
Assets, the Business, or goodwill of Seller which adversely effects the
Assets or the Business being acquired hereunder, or the consummation of
the transactions contemplated hereunder, (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 which
adversely effects the Assets or the Business being acquired hereunder,
or the consummation of the transactions contemplated hereunder, (iv)
there is no rezoning petition or reclassification proceeding with
respect to or that affects the Business now pending or threatened, and
(v) 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 Assets and the Business sold to Purchaser 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 the items specified in clauses (i), (ii), or (iii)
above would materially and adversely affect Purchaser's purchase of the
Assets and the operation of the 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 the Business as now being conducted, to own or hold under
lease the properties and assets it owns or holds under lease, and to
15
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 material to the
Business, contractual or legal restrictions, regulations and
administrative and executive orders of any country, 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
where the existence of any non-compliance with such laws, contractual or
legal restrictions, regulations and administrative and executive orders
would adversely affect the Assets or the Business, and neither Seller
nor Maeizumi has 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, known or unknown, contingent or otherwise which
adversely affect, or might reasonably be expected to adversely affect
the Assets or the Business or its prospects which are to be carried on
by Purchaser.
(i) TAXES AND TAX RETURNS OF SELLER. All taxes imposed by Hong
Kong 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 or will be paid in full on the due date of the required return
or report with respect to any such tax. 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.
(j) EMPLOYEE BENEFIT PLANS OF SELLER. All employee benefit plans
of any kind, including but not limited to group life insurance, medical,
long-term disability, pension and profit sharing plans, established,
maintained or participated in by Seller (the "Plans") are in compliance
with all applicable reporting, disclosure and other requirements of such
Plans in accordance with all applicable laws.
(k) NO DEFAULT. Seller is not in default or breach of any
contract or agreement, written or oral, indenture or other instrument or
obligation, to which it is a party or to which it or its property is
subject and which affects the Business or the Assets, and there
16
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.
(l) CURTAILMENT NOTICES. Neither Seller nor Maeizumi has
received any notice from any supplier (including utilities) of
curtailment or intended curtailment of services or supplies to Seller.
(m) CUSTOMER RELATIONS. Neither Seller nor Maeizumi is are aware
of any facts or information indicating that any customer intends to or
may cease doing any material amount of business with Seller or to
materially alter the amount of any such business or to increase the
quantity of returned product beyond that which such customer
historically returned to Seller or to delay the return of products until
after the Closing Date.
(n) TRUE AND COMPLETE DISCLOSURES. All information furnished by
Seller, Maeizumi or their representatives to Purchaser 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 Maeizumi 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 and Maeizumi at the Closing.
10. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser 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 or charter of incorporation,
by-law, agreement, indenture, or license to which Purchaser is a party
or by which Purchaser is bound or affected, or under any law, judgment,
order, decree, rule or regulation to which Purchase 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 Purchaser or
the consummation of the transactions hereby or thereby.
(b) CORPORATE ORGANIZATION AND AUTHORIZATION. Purchaser is a
corporation duly organized, validly existing and in good standing under
the laws of The Netherlands. Purchaser has the corporate power to own
and lease its properties and carry on its business as it is now
conducted 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 Purchaser to authorize Purchaser to enter into
and consummate this
17
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 executed and delivered, will constitute legal, valid and binding
obligations of Purchaser, enforceable in accordance with their terms.
(c) TRUE AND COMPLETE DISCLOSURES. All information furnished by
Purchaser 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 Purchaser 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 Purchaser at the
Closing.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The covenants,
representations and warranties of the parties contained herein and in any
Schedule, Exhibit, 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 Purchaser 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.
12. NON-COMPETITION/NON-SOLICITATION/CONFIDENTIALITY. Each of Seller and
Maeizumi hereby covenants and agrees:
(a) that for a period of six (6) years from the Closing, neither
Seller, Maeizumi, nor any company controlling, controlled by, or under
common control with Seller or Maeizumi, will, directly or indirectly,
either alone, or in partnership, or in conjunction with person, company
or entity as principal, agent, shareholder, or joint venturer: (i)
conduct business which is similar to the Business; (ii) engage in the
sale at products and/or services which similar to the products or
services sold and/or provided by Seller in the conduct of the Business
to any person, company or entity which in the two (2) year period
immediately preceding the Closing was a customer of Seller in the
Business or was a competitor of any such customer; (iii) except for
appropriate notification of the sale of the Assets, affirmatively
interfere with, disrupt, or attempt to disrupt, in any manner, the
relationship, contractual or otherwise, between Purchaser and any person
who is or was a customer or supplier of Seller for the Business at any
time during the two (2) year period immediately prior to the Closing for
products and/or services of any type or quality provided to such
customer or for supplies acquired from such supplier by Seller for the
Business; or (iv) solicit for employment or other working relationship
any of the employees hired by Purchaser; and
(b) to hold in confidence all Confidential and Proprietary
Information, and that each of them will not disclose or use or permit
the disclosure or use of the Confidential and Proprietary Information at
any time, except as may be required as a matter of law, or at any
judicial or governmental proceeding; and
18
(c) that (i) the time duration and geographic and other scope
limitations contained in this Section 12 are reasonable and are required
for the reasonable protection of Purchaser's investment in the Assets
and the Business and constitute an integral part of the consideration
given by Seller and Maeizumi in exchange for the Purchase Price;
provided, however, the parties hereto agree that a court of competent
jurisdiction or other trier of fact may modify and enforce the covenants
contained in this Section 12 to the extent it deems reasonable under the
circumstances at that time and such modification shall be binding on the
parties hereto and (ii) any breach by any of them of any of the terms of
this Section 12 may cause substantial and irreparable injury to
Purchaser in amounts which may be difficult or impossible to ascertain,
and covenants and agrees that in the event of such breach any of the
terms of this Section 12, Purchaser shall have, in addition to all other
remedies available in the event of a breach of this Agreement, the right
to injunctive or other equitable relief, without the need of posting
bond or other security, as well as an award of attorneys' fees and costs
incurred as a result of such action, and in the event of any breach or
other violation of the provisions of this Section 12 by either Seller
or Maeizumi, the running of the time period of Non-Competition/
Non-Solicitation shall be tolled during the period of the continuance
of any actual breach or violation.
For purposes of this Section 12, "Confidential and Proprietary
Information" means any information constituting a part of the Assets, including,
but not limited to, the following to the extent they constitute a part of the
Assets: (i) trade secrets; (ii) proprietary products and trade names; (iii) all
other intellectual property rights; and (iv) any compilations of otherwise
public information, such as vendor or customer listings; provided, however, that
Confidential and Proprietary Information does not include any (w) information
which is used by Seller in its retained business which is not the subject of
this Agreement and none of which is used or useful in the Business or is a part
of the Assets, (x) information already generally known to the public; (y)
information which, either prior to or subsequent to the Closing, is lawfully
disclosed to Seller and Maeizumi by anyone else rightfully in possession of such
information and who is not in a confidential relationship with Purchaser; and
(z) information which, without violating any legal rights of Purchaser, becomes
generally known and used by others who are not in a confidential relationship
with Purchaser.
13. CONDITIONS OF OBLIGATIONS OF PURCHASER. The obligations of
Purchaser, including but not limited to the obligation to close the transaction
contemplated hereunder, are, at the option of Purchaser, subject to satisfaction
of the following conditions on or prior to the Closing, all of which may be
waived by Purchaser in whole or in part:
(a) The representations and warranties of Seller contained
herein shall be true, correct and complete in all material respects on
and as of the Closing and Purchaser shall have received at the Closing a
certificate to that effect, dated the Closing Date and executed by the
President of Seller and Maeizumi; 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 herein.
19
(b) Each of Seller and Maeizumi shall have performed and
observed, in all material respects, all covenants, agreements, acts,
undertakings and conditions of each of them herein to be performed or
observed by each of them on or before the Closing.
(c) Delivery to Purchaser of such other documents, instruments,
or certificates as Purchaser shall reasonably request.
14. CONDITIONS OF OBLIGATIONS OF SELLER. The obligations of Seller and
Maeizumi, including but not limited to the obligation to close the transactions
contemplated hereunder, are, subject to the satisfaction of the following
conditions on or prior to the Closing all of which may be waived by Seller or
Maeizumi in whole or in part:
(a) The representations and warranties of Purchaser contained
herein shall be true, correct and complete in all material respects on
and as of the Closing and Seller and Maeizumi shall have received at the
Closing a certificate to that effect, dated the Closing Date, and
executed on behalf of Purchaser by its chief executive officer or chief
financial officer.
(b) Purchaser shall have performed and observed, in all material
respects, all covenants, agreements and conditions herein to be
performed or complied with by Purchaser on or before the Closing.
(c) Delivery to Seller of such other documents, instruments, or
certificates as Seller shall reasonably request.
15. 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.
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16. ADDITIONAL COVENANTS OF SELLER AND MAEIZUMI.
(a) USE OF SELLER'S TRADE NAME, TRADEMARKS AND SERVICE MARKS.
After Closing, neither Seller, Maeizumi, nor any person or entity
affiliated with any of them shall use the trade name and/or trademark
"Universal Electronics", "One For All", or any other trade name,
trademark or service mark of Purchaser or any of its affiliates, or any
name similar to or a derivative of any of the aforementioned trade
names, trademarks or services marks.
(b) PAYMENT OF CREDITORS. On or before the tenth day after the
Closing, Seller and Maeizumi shall deliver to Purchaser a certificate,
signed by a duly authorized officer of the Seller and Maeizumi, that all
creditors of Seller with regard to the Assets or the Business have been
paid in full or that provisions have been made for the satisfaction of
the same.
17. INDEMNIFICATION.
(a) Each of Seller and Maeizumi hereby agrees to indemnify
Purchaser 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 (including without limitation any appellate proceedings)
(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 either of Seller or Maeizumi, made herein, or the failure of any of
them, to perform any covenant or agreement made or referred to herein;
(ii) any claim against any of the Assets, against Purchaser by a
creditor of Seller, or arising out of a breach of this Agreement by
either of Seller or Maeizumi; (iii) any transaction, occurrence, action,
or omission in connection with the operation of the Business by Seller
or Maeizumi prior to the Closing; (iv) any claim asserted against
Purchaser in connection with or arising out of any delinquent
contributions to any pension plan of Seller, any withdrawal liability to
any multi-employer pension plan, or any employee benefits, including
without limitation any severance benefits, accruing prior to the Closing
or as a result of the consummation of the transactions contemplated
hereunder; (v) any claim contained in any pending litigation against
Seller or Maeizumi; and (vi) any claim asserted against Purchaser by
reason of any noncompliance of any applicable bulk transfers or similar
laws under the provisions of any applicable jurisdiction.
(b) Purchaser hereby agrees to indemnify and hold Seller and
Maeizumi and their respective 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
21
Purchaser made herein, or the failure of Purchaser to perform any
covenant or agreement made by it herein; and (ii) any transaction,
occurrence, action or omission in connection with the operation of the
Business by Purchaser after the Closing.
(c) 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, upon notice to
and at the expense of the Indemnifying Party; provided that the
Indemnifying Party shall not have objected to such compromise or defense
by written notice to the Indemnified Party within five (5) days after
receipt by the Indemnifying Party of the Indemnified Party's notice of
such intention to compromise or defend the third party claim. 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.
(d) If an Indemnified Party shall have any claim pursuant to
this Section 17, 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 harmless under this Section 17 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
22
pursuant to this Section 17, whether by agreement between the parties or
the rendering of a final judgment in any litigation, the Indemnifying
Party shall within ten (10) days of such resolution pay over and deliver
to the Indemnified Party funds in the amount of any claim as resolved,
and any fees and interest, including reasonable attorneys' fees and
costs (including without limitation any appellate proceedings), incurred
by the Indemnified Party with respect to any such litigation.
(e) Notwithstanding anything to the contrary herein, in the
event Purchaser has a claim for indemnification pursuant to this Section
17, Purchaser may set-off Damages against any amount of the Purchase
Price which has not yet been paid by Purchaser to Seller pursuant to the
terms of this Agreement; provided however, Purchaser's election to
set-off pursuant to this Section 17(e) shall in no way limit Purchaser
from pursuing any other remedy available to it hereunder, at law, or in
equity and in no way shall such election to set-off be construed as a
liquidation of such Damages.
18. 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.
19. 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 finder's fees in connection with the
transactions contemplated by this Agreement. Each of the parties agrees to
indemnify and hold harmless the other for any Damages resulting from or arising
out of any liability to any broker or finder on the basis of any arrangement or
agreement made by or on behalf of such party.
20. ENTIRE AGREEMENT AND BINDING EFFECT. This Agreement and the
Exhibits, Schedules and documents 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
Netherlands. All Exhibits, Schedules and documents attached hereto are
incorporated herein by this reference.
21. ASSIGNABILITY. This Agreement shall not be assignable by any of the
parties hereto without the prior written consent of the other parties hereto,
except that it may be assigned by Purchaser to any corporation controlled by, or
under direct or indirect common control with, Purchaser. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, representatives, successors and permitted assigns.
22. PARTIAL INVALIDITY/SEVERABILITY. The various covenants and
provisions of this Agreement, including specifically, without limitation those
covenants and provisions contained in Section 12 hereof, are intended to be
severable and to constitute independent and distinct binding
23
obligations of the parties hereto. In the event any one or more of the covenants
or provisions contained in this Agreement or any application thereof shall be
invalid, illegal or unenforceable in whole or in part, the validity, legality
and enforceability of the remaining covenants or provisions of this Agreement
and any other part or 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).
23. 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 Purchaser or Seller, respectively, if there has been a
material misrepresentation or breach on the part of Seller or Purchaser,
respectively, of any representation, warranty or covenant set forth in or made
pursuant to this Agreement; or (c) Purchaser or Seller if the Closing has not
occurred by February 15, 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.
24. 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 telecopy number, as the case
may be:
(a) If to Seller and/or Maeizumi: Mr. T. Maeizumi
c/o Strand Europe Ltd.
Strand House, Galway Road
Blackbushe Business Park
Yateley, Hampshire
GU46 6GE
Telecopy No. 011 441 252 861006
Confirm No. 011 441 252 861000
(b) If to Purchaser: Mr. Paul Bennett
Universal Electronics B.V.
Javastraat 92
7512 ZK Enschede
Netherlands
Telecopy No. 011 31 53 432 7080
Confirm No. 011 31 53 488 8000
24
or to such other address or telecopy 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. If notice is transmitted by
telecopy or other means of facsimile, the sending party must, on the same day,
send a copy of such notice by regular mail, postage pre-paid.
25. AMENDMENT. This Agreement may be amended, modified, or supplemented
only by written agreement of the parties hereto.
26. 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.
27. SPECIFIC PERFORMANCE. Each of Seller and Maeizumi acknowledges and
agrees that the Assets are unique, that damages for any failure of Seller or
Maeizumi to transfer the Assets pursuant to this Agreement would be an
inadequate remedy, and that Purchaser shall be entitled to enforcement by
judgment for specific performance.
28. ATTORNEYS' FEES. Should suit be brought to enforce or interpret any
part of this Agreement, the prevailing party shall be entitled to recover, as an
element of costs of suit and not as damages, interest and reasonable attorneys'
fees and costs, including all costs and expenses of any appellate court
proceedings.
29. 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.
30. COUNTERPARTS. This Agreement may 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.
31. 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.
32. NONDISCLOSURE OF TERMS AND IDENTITY OF RELATED PARTIES. Purchaser,
Seller and Maeizumi each agrees to not disclose any of the terms, conditions or
provisions of this Agreement to any person, firm, corporation, association,
agency or entity other than its own attorneys and shareholders, except where
such disclosure is lawfully required and in such instances such disclosure shall
be limited to the information specifically required to be produced.
25
If the foregoing is an accurate statement of our agreement, please
indicate your approval by countersigning the enclosed copy of this letter and
returning it to me as soon as possible.
Sincerely,
UNIVERSAL ELECTRONICS B.V.,
a Netherlands corporation
By:
--------------------------------------
Paul Bennett, Managing Director
APPROVED THIS __30TH___ DAY
OF DECEMBER, 1998.
EURO QUALITY ASSURANCE, LTD.
a Hong Kong corporation
By:
--------------------------------
T. Maeizumi, Managing Director
AND
- - -----------------------------------
T. Maeizumi, Individually