AGREEMENT OF PURCHASE AND SALE OF ASSETS
AGREEMENT (this "Agreement"), dated January 20, 1998, by and between
PROJECTAVISION, INC., a Delaware corporation having its principal office at Two
Penn Plaza, Suite 640, New York, New York 10121 ("Purchaser"), VIDIKRON
INDUSTRIES, S.p.A., an Italian corporation having its principal office at Via
Dei Guasti, 29, 20020 Misinto (Milano), Italy (the "Company").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business, among others, of
designing, manufacturing, sourcing and distributing high-end video projection
systems for the consumer (the "Company's Video Business");
WHEREAS, the Company owns eighty five percent (85%) of all of the issued
and outstanding equity securities of Vidikron of America, Inc., a Delaware
corporation, having its principal executive offices at 150 Bay Street, Jersey
City, New Jersey (the "Subsidiary"); and
WHEREAS, the Company desires to sell to Purchaser, and Purchaser desires
to acquire from the Company, substantially all of the assets constituting the
Company's Video Business, and certain of the Company's liabilities, on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and in order to set forth the terms and conditions of the
purchase and sale of assets and the manner of carrying the same into effect, the
parties hereto hereby agree as follows:
1. (a) Purchase and Sale of Assets. Except as set forth on Schedule 1(c)
annexed hereto, subject to and upon the terms and conditions set forth in this
Agreement, the Company agrees to sell, transfer, convey, assign and deliver to
Purchaser, and Purchaser agrees to purchase at the "Closing" (as defined in
Section 3 hereof), those certain assets and properties, and that certain
business, goodwill and rights of the business as a going concern, of every
nature, kind and description whatsoever, whether tangible and intangible,
wheresoever located and whether or not carried or reflected on the books and
records of the Company with respect to the Company's Video Business, all of
which shall be referred to in the form of Bill of Sale as set forth in Schedule
1(a) annexed hereto (hereinafter sometimes collectively called the "Assets"),
including, without limitation:
(i) subject to the provisions of Sections 6(p) and 6(o) below, all
right, title and interest in and to
any and all United States, Italian and other: (A) industrial
designs, and improvements thereto; (B) trademarks, service marks,
trade names (including, without limitation, any trade names acquired
by the Company in connection with its acquisition of the business),
trade dress, logos, business and product names, slogans, and
registrations and applications for registration thereof; (C)
copyrights (including software) and registrations, if any, thereof;
(D) inventions, processes, designs, formulae, trade secrets,
know-how, industrial models, confidential and technical information,
manufacturing, engineering and technical drawings, product
specifications and confidential business information; (E) mask work
and other semiconductor chip rights and registrations, if any,
thereof; (F) intellectual property rights similar to any of the
foregoing; (G) copies and tangible embodiments thereof (in whatever
form or medium, including electronic media) (collectively,
"Intellectual Property");
(ii) the assets reflected on the Pro Forma Financial Statements
referred to in Section 6(g) hereof, with only such disposition of
such assets as shall have occurred in the ordinary course of the
Company's business between the date of the Pro Forma Financial
Statements and the Closing;
(iii) all machinery, equipment, fixtures, leasehold improvements,
trucks, vehicles, parts and other tangible personal property
(including, but not limited to, any of the foregoing purchased
subject to any conditional sales or title retention agreement in
favor of any other party);
(iv) all inventory of equipment held for sale or lease, spare parts,
replacement and component parts, and office and other supplies
("Inventories"), including Inventories held at any location for the
Company and Inventories previously purchased and in transit to or
from the Company;
(v) all rights in and to Inventories (including, but not limited to,
products hereafter returned or repossessed and unpaid, Company's
rights of rescission, replevin, reclamation and rights to stoppage
in transit);
(vi) all rights (including, but not limited to, any and all
Intellectual Property rights) in and to the products and services
sold, rented or leased and in and to any products and services sold,
rented or leased and
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in and to any products or other Intellectual Property rights under
research or development prior to or on the Closing Date;
(vii) all of the rights of the Company under all Contracts (as
defined in Section 6(z) hereof) and, including, without limitation,
any right to receive payment for products sold or services rendered
(exclusive, however, of the "Accounts Receivables" that the Company
shall retain upon the Closing of this Agreement in accordance with
the provisions of, and as such term is defined in, Section 1(c)
below), and to receive goods and services, pursuant to such
Contracts and to assert claims and take other rightful actions in
respect of breaches, defaults and other violations of such
Contracts;
(viii) all credits (exclusive of the Accounts Receivables that the
Company shall retain in accordance with the provisions of Section
1(c) below), and, if any, prepaid expenses, deferred charges, return
allowances, advance payments, security deposits and prepaid items;
(ix) only to the extent that they relate solely to the Company's
Video Business, and are discrete with respect thereto, all books,
records, manuals and other materials (in any form or medium whether
now known or hereafter devised), including, without limitation, all
records and materials maintained by the Company, advertising matter,
catalogues, consumer manuals, price lists, correspondence, mailing
lists, lists of customers, distribution lists, photographs,
production data, sales and promotional materials and records,
purchasing materials and records, manufacturing and quality control
records and procedures, blueprints, research and development files,
records, data and laboratory books, Intellectual Property
disclosures, media materials and plates, accounting records, and
sales order files; provided, however, that it is expressly
understood that in the event that any of the foregoing also sets
forth information relative to the Company in connection with matters
unrelated, in whole and in part, to the Company's Video Business,
then notwithstanding the foregoing, all such books and records shall
remain the property of the Company, and will not be deemed to be an
asset transferred hereunder but rather, will be deemed to be an
"Excluded Asset" (as that term is defined in Section 1(c) below),
and consequently, shall be retained by the Company in accordance
with the provisions of Section 12(c) below;
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(x) to the extent their transfer is permitted by law, all consents,
approvals, authorizations, waivers, permits, grants, franchises,
concessions, agreements, licenses, exemptions or orders of
regulation, certificate, declaration or filing with, or report or
notice to any entity issued, executed, delivered or otherwise made
to or for the benefit of the Assets or any assets of the Subsidiary,
including all applications thereof (collectively, the "Consents"),
all of which Consents are set forth on Schedule 1(a)(x) hereof,
including, but not limited to, the Consent (the "Governmental
Approval") of any nation, or government, any state or other
political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, any
government authority, agency, department, board, commission or
instrumentality of the United States or Italy, any state of the
United States or any municipality thereof, any region or province of
Italy or any municipality thereof, and any tribunal or arbitrator(s)
of competent jurisdiction, and any self-regulatory organization of
the United States or Italy (collectively, the "Governmental
Authority" or "Governmental Authorities);
(xi) except with respect to the Accounts Receivables to be retained
by the Company in accordance with the provisions of Section 1(c)
below, all rights to choses in action, causes of action, claims and
rights of recovery or setoff, lawsuits, judgments, claims and
demands of any nature available to or being pursued by the Company
with respect to the Company's business or the ownership, use,
function or value of any of the Assets whether arising by way of
counterclaim or otherwise;
(xii) all guarantees, warranties, indemnities and similar rights in
favor of the Company with respect to any of the Assets or the
Company's Video Business;
(xiii) accrued sales (in respect of outstanding proposals or
work-in-process), commitments, proposals, Contracts, understandings
or commitments, whether oral or written, to perform services,
advanced billings and unbilled costs (as set forth on Schedule 6(y)
annexed hereto);
(xiv) the tangible assets (the "Tangible Assets") that are part of
Schedule 1(a) annexed hereto and as provided on the Balance Sheet;
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(xv) cash and cash equivalents of Seller relating to (A) prepayments
for goods or services relative to the Company's Video Business to be
delivered or performed, in whole or in part, subsequent to the
Closing, and (B), to the extent applicable, that certain seven (7)
year, low interest loan in the principal amount of 1,745,000,000Li.
(or any portion thereof) extended to the Company by the Italian
Government in accordance with that letter to the Company dated
October 30, 1997 (the "Government Loan"), the true and complete
documentation of which is annexed hereto as Schedule 1(a)(xv); and
(xvi) all shares of stock of the Subsidiary owned by Company and any
other equity ownership interests and rights to acquire equity
ownership interests in the Subsidiary (it being expressly understood
and agreed that Purchaser shall have no obligation whatsoever to
enter into any agreements of any kind with those shareholders of the
Subsidiary other than the Company, including, without limitation
agreements regarding such shareholders' shareholdings with respect
to the Subsidiary or such shareholders' employment arrangements
therewith).
(b) Assumed Liabilities.
(i) The Assets shall be conveyed free and clear of all liabilities,
obligations, liens, claims and encumbrances, excepting only those
liabilities, obligations, liens, claims and encumbrances which are
expressly to be assumed by Purchaser hereunder, if any. Purchaser
shall assume at the Closing, and thereafter timely pay, perform or
discharge, when due, the "Assumed Liabilities," except to the extent
that any of such Assumed Liabilities have been paid or satisfied as
of the Closing Date. As used herein, the term "Assumed Liabilities,"
all of which shall be set forth on Schedule 1(b) annexed hereto,
shall be expressly limited to:
(A) the sum of (w) the Company's accounts payable incurred in
the ordinary course of the Company's Video Business (the
"Trade Payables") in the aggregate amount as set forth in the
Company's written advice to Purchaser no later than five (5)
business days prior to the Closing Date, which written advice
shall also individually set forth such Trade Payables on an
account by account basis, including the amount of time each of
such Trade Payables has been outstanding and when same is due
and owing (x) certain of the principal
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amount of the Company's existing bank indebtedness (the
precise amount of which shall be determined by the parties at
Closing) with [names(s) of bank] as annexed hereto as Schedule
1(b).2 (the "Company's Bank Debt"), plus (y) the accrued
employee severance benefits set forth on the Company's Closing
Balance Sheet, plus (z) the Government Loan, if any, to the
extent that prior to Closing the Company has actually received
funds with respect to the Government Loan and such funds have
either been retained by or used in connection with the
Company's Video Business; provided, however, sum of (x), (y)
and (z) shall in no event exceed Three Million Five Hundred
Thousand ($3,500,000) U.S. Dollars (such sum being hereinafter
referred to as the "Agreed Upon Accounts Payables");
(ii) In addition, upon the Closing, Purchaser shall be responsible
for the full and timely payment of the Bill of Sale Registration Tax
and Stamp Duties under Italian law.
(iii) Purchaser shall not and does not assume any liabilities,
obligations or commitments of the Company, other than the Assumed
Liabilities, and the Company shall be solely responsible, without
limitation, for the following:
(A) Legal, accounting, brokerage and finder's fees and income,
excise, if any, or other Transfer Taxes (as defined in Section
4(c) hereof and which shall not include the Bill of Sale
Registration Tax and Stamp Duties) or other expenses incurred
by the Company in connection with this Agreement or the
consummation of the transactions contemplated hereby; provided
that Purchaser agrees that it shall be solely responsible for
any and all payments of any nature whatsoever due and owing to
Hambro America Securities, Inc. and Purchaser hereby agrees to
indemnify the Company with respect thereto;
(B) Debts, liabilities or obligations of any nature of the
Company except for the Assumed Liabilities;
(C) Except for the Bill of Sale Registration Tax and Stamp
Duties, any domestic, value added, if any, federal,
international, regional, provincial, state or local or foreign
income, franchise, excise, use, property, payroll or similar
or other
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Taxes (as defined in Section 6(i) hereof)(or penalties and
interest thereon) imposed on the Company including, without
limitation, those due as a result of the operation of the
Company's Video Business through the Closing Date;
(D) Any claim, legal action, suit, arbitration or other legal
or administrative proceeding (or governmental investigation)
pending or in effect, or threatened against or relating to
either the Company's Video Business, the officers and
directors of the Company (as such litigation, if any, may
relate to the Company's Video Business), or the Assets or the
properties or business relative to the Company's Video
Business, all of which shall be expressly retained by the
Company; provided, however, that Purchaser shall provide the
Company (at no cost to the Purchaser) with whatever
cooperation and assistance that the Company may reasonably
require subsequent to the Closing hereof in connection with
the foregoing; and
(E) Except as Purchaser shall have otherwise expressly agreed
to assume herein, liabilities and obligations of the Company,
if any, accruing prior to, on or after the Closing Date
relating to the Company's employment of any of the Company's
employees, including, without limitation, compensation,
severance payments, if any, contributions to employee benefit
plans, workers' compensation or other insurance claims.
(c) Excluded Assets. Except as set forth on Schedule 1(c) annexed
hereto, the Company is selling to Purchaser hereunder all, and is not excluding
any, of the assets of any nature whatsoever that are used by the Company to
conduct the Company's Video Business as presently operated and as currently
contemplated to be operated subsequent to the consummation of the transaction
contemplated by this Agreement (hereinafter referred to as the "Excluded
Assets"). Schedule 1(c) shall include, among other things, a detailed listing on
an account by account basis of the Company's accounts receivables as of the
Balance Sheet Date with respect to those goods and services that the Company has
fully delivered or performed, as the case may be, all of which shall be retained
by the Company (the "Accounts Receivables").
(d) Consent of Third Parties. Notwithstanding anything to the
contrary in this Agreement, but subject, nevertheless, to Section 14 hereof,
this Agreement shall not
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constitute an agreement to assign or transfer any Governmental Approval,
instrument, Contract, lease, permit or other agreement or arrangement or any
claim, right or benefit arising thereunder or resulting therefrom if an
assignment or transfer or an attempt to make such an assignment or transfer
without the consent of a third party would constitute a breach or violation
thereof or affect adversely the rights of Purchaser or the Company thereunder;
any transfer or assignment to Purchaser by the Company or the Subsidiary of any
interest under any such instrument, Contract, lease, permit or other agreement
or arrangement that requires the consent or approval of a third party shall be
made subject to such consent or approval being obtained. In the event any such
consent or approval is not obtained on or prior to the Closing Date, the Company
shall continue to use its best efforts to obtain such approval or consent after
the Closing Date until such time as such consent or approval has been obtained,
and the Company will cooperate with Purchaser in any lawful and economically
feasible arrangement to provide that Purchaser shall receive the interest of the
Company, and/or the Subsidiary, as the case may be, in the benefits under any
such instrument, Contract, lease or permit or other agreement or arrangement,
including performance by the Company or the Subsidiary as agent, if economically
feasible, provided, that Purchaser shall undertake to pay or satisfy the
corresponding liabilities for the enjoyment of such benefit to the extent
Purchaser would have been responsible therefor hereunder if such consent or
approval had been obtained. The Company shall pay and discharge, and shall
indemnify and hold Purchaser harmless from and against any and all out-of-pocket
costs of seeking to obtain or obtaining any such consent or approval whether
before or after the Closing Date. Nothing in this Section 1(d) shall be deemed a
waiver by Purchaser of its right to have received on or before the Closing an
effective assignment of all of the Assets nor shall this Section 1(d) be deemed
to constitute an agreement to exclude from the Assets any assets described in
Section 1(a) hereof.
2. (a) Purchase Price. As full and total consideration for the sale,
transfer, conveyance, assignment and delivery of the Assets by the Company to
Purchaser, and in reliance upon the representations and warranties made herein
by the Company, Purchaser agrees, subject to any adjustments or holdbacks herein
provided for, to deliver to the Company the aggregate sum of $2,000,000, by wire
transfer or certified or official bank check drawn on a bank which is a member
of the New York Clearing House Association payable to the order of the Company
(the "Purchase Price").
(b) Purchase Price Adjustment. The Purchase Price set forth in
Section 2(a) above (which is subject to the provisions of Section 15 below)
shall be subject to adjustment as hereinbelow set forth in this Section 2(b).
Specifically, in the |
