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EXHIBIT 10.1

ASSET PURCHASE AGREEMENT
 
THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made as of the Effective Date
provided for below between CLEARONE COMMUNICATIONS, INC., a Utah corporation
(the “Company”), and KEN-A-VISION MFG. CO., INC., a Missouri corporation (the
“Buyer”), who agree as follows:
 
1.  Sale of Assets.
 
a.  Subject to the representations, warranties and agreements of the parties
hereto and the terms and conditions herein set forth, the Company agrees that,
at the Closing (as herein defined), the Company shall sell, transfer and deliver
to the Buyer, for the consideration hereinafter provided, the following assets
and property owned by Company and used by it in the conduct, as presently
operated, of its Camera Business (as defined in Section 15 below) (excluding,
however, the “Excluded Assets” described below) (collectively, the “Assets”):
 
1. All of the Company’s machinery, equipment, tools and other tangible personal
property described on Schedule 1.a.1 attached hereto (“Equipment”);
 
2. All of the Company’s rights, benefit, interest and obligations (collectively,
the “Warranty Obligations”) with respect to the warranties (“Warranties”) issued
by the Company with respect to the Products (as such term is defined immediately
below). The obligations of the Buyer with respect to the Warranties are subject
to the terms of Section 2.b. below.
 
3. All of the Company’s (i) customer lists, records and files, (ii) production
records, (iii) technical drawings, specifications and manuals and other
information related to the production of the products (“Product” or “Products”)
produced and sold as a part of the Camera Business, (iv) marketing plans and
reports, (v) supplier and vendor lists, contacts and information (vi) sales
records, (vii) pricing sheets, (viii) customer proposals and bids, (ix) records
pertaining to product warranty inquiries concerning Warrantied Products (as
defined in Section 2.b.i. below) and (x) other pertinent and material sales
information and records, insofar as the items referenced in clauses (i) - (x)
relate solely to the Camera Business (such items referenced in clauses (i) - (x)
being hereinafter collectively referred to as the “Camera Business Records”);
 
4. Subject to Section 1.d below, all of the Company’s inventories (raw and
finished), work in process and sub-assemblies held for sale, consumption or
otherwise used in the operation of the Camera Business, as selected by the Buyer
in its sole discretion, provided that there shall be no adjustment to the
Purchase Price hereunder in respect of any available inventories not so selected
by the Buyer; and
 

 

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5. All of the Company’s computer software utilized solely in the Camera Business
(“Software”), including but not limited to, drivers for the Products, and the
Intellectual Property, all as listed on Schedule 1.a.5, but subject to the
provisions of Section 1.e. below (as so qualified and together with the
Software, the “Conveyed Intellectual Property”).
 
b.  To avoid doubt, the following assets of the Company (collectively, the
“Excluded Assets”), among others, shall be retained by the Company, and are not
being sold or assigned to the Buyer hereunder:
 
1. All corporate names and trade names, trademarks or service marks that are
used in connection with any of the Company’s businesses other than the Camera
Business;
 
2. All taxpayer and other identification numbers and minute books, stock
transfer books, tax returns, corporate seals and all other documents relating to
the organization, maintenance and existence of the Company as a corporation;
 
3. The Company’s rights under this Agreement, the agreements to be executed by
the Company in connection herewith and any agreements relating to the Camera
Business, including any rights with respect to rebates and market development
funds under certain agreements between the Company and its customers;
 
4. All cash and cash equivalents of the Company;
 
5. The name and mark “ClearOne” and all combinations or derivations thereof;
 
6. The Company’s accounts receivable as of the Closing Date, but including in
all events any amount owing on account of Products shipped by the Company prior
to Closing or in connection with Open Purchase Orders (as defined in Section
1.d.);
 
7. Copies of such Camera Business related records as it deems appropriate;
 
8. Any telephone numbers; and
 
9. Any websites.
 
c.  The sale of the Assets shall be made free and clear of all liabilities,
obligations, security interests, and other encumbrances or liens of any and
every kind and nature whatsoever except (i) the Security Interest referenced in
Section 2.a.2. below, (ii) the Assumed Liability referenced in Section 2.b.
below, (iii) the Permitted Encumbrances, and (iv) Buyer’s Assumed Tax Liability
(as referenced below).
 
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d.  The Buyer acknowledges that the Company, to the extent possible, is
depleting raw inventory and finished goods relating to the Camera Business.
Accordingly, the Company has been and will be seeking to obtain purchase orders
from its customers for the Products up to the date of Closing. In regard to all
such purchase orders that are obtained prior to the Closing and not filled as of
the Closing (“Open Purchase Orders”), the Buyer agrees that (i) inventory
required to fill such purchase orders (but only so much inventory as is so
required) will comprise part of the Excluded Assets and will be retained by the
Company and not sold to the Buyer, and (ii) inventory on order and in process
required to fill such purchase orders will be completed and delivered to the
Company. The Company agrees to fill such purchase orders and deliver the
Products required thereunder within a commercially reasonable time. If the
Company receives a cancellation of an Open Purchase Order subsequent to Closing,
the Company shall promptly deliver the Products subject to such Open Purchase
Orders to the Buyer F.O.B. Buyer’s facility in Raytown, Missouri.
 
e.  The Company shall continue to use its best efforts to obtain the consent of
ArcSoft, Inc. (“ArcSoft”) to the assignment to the Buyer of the License
Agreement (the “ArcSoft Agreement”) between the Company and ArcSoft pertaining
to the ArcSoft Software (as defined in Schedule 1.a.5. hereto). The Company
maintains the position that the ArcSoft Agreement is valid and in force, but has
been notified by ArcSoft that ArcSoft considers the agreement to be expired.
Buyer acknowledges that the Company may be unable to obtain ArcSoft’s consent to
the assignment of the ArcSoft Agreement and that ArcSoft may insist that the
Buyer enter into a new license agreement with respect to the ArcSoft Software
and that, in either case, any rights of the Company to the ArcSoft Software will
not comprise part of the Assets being sold and conveyed hereunder.
 
2.  Purchase Price.
 
a.  Payment of Purchase Price. The purchase price which the Buyer shall pay to
the Company for the assets to be sold and transferred to the Buyer hereunder
(“Purchase Price”) shall be Seven Hundred and Fifty Thousand Dollars
($750,000.00), subject to being adjusted as provided in Schedule 2.a attached
hereto (the “Price Adjustment”), to be paid as follows, plus the assumption of
the Assumed Liability and Buyer’s Assumed Tax Liability:
 
1. Delivery at the Closing of the sum of Three Hundred Seventy-Five Thousand
Dollars ($375,000.00), subject to the Price Adjustment, by immediately available
funds payable to the Company (the “Down Payment”); and
 
2. Delivery at the Closing of the Buyer’s promissory note (the “Note”) in the
form attached as Exhibit “A”, in the principal amount of Thousand Dollars
($375,000.00), subject to the Price Adjustment, bearing interest at the rate of
eight percent (8%) per annum and, subject to the Price Adjustment, payable in
twenty-four (24) monthly installments of $16,960.23 to be secured by a first
lien security interest in all of the Assets (the “Security Interest”), as
provided in that certain Security Agreement in the form attached as Exhibit “B,”
to also be delivered to the Company at Closing.
 
 
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b.  Assumed Liability.
 
i.  At the Closing, the Buyer will assume and perform the Company’s Warranty
Obligations under the Warranties issued by the Company with respect to Products
sold within two (2) years prior to the Closing Date, along with any Products
sold pursuant to Open Purchase Orders (all of which Products are collectively
referred to hereinafter as “Warrantied Products”), provided that the cost of
such performance (as the term “cost” is referenced below) shall not exceed
$100,000 in the 730-day period following the Closing Date, the Company hereby
agreeing to be responsible, to pay or reimburse the Buyer and to indemnify and
hold the Buyer harmless to the extent that all costs of performing the Company’s
obligations under the Warranties with respect to the Warrantied Products exceed
$100,000 in the 730-day period following the Closing Date (the obligation of the
Buyer under this Section 2.b being referred to herein as the “Assumed
Liability”). For the absence of doubt, the Company will only reimburse for costs
that exceed One Hundred Thousand Dollars ($100,000.00) during the 730-day
period, which costs shall be strictly limited to the sum of a) repair costs at
the Buyer’s normal and customary labor charges and b) reasonable cost of
material that need to be purchased subsequent to the Closing Date in order to
permit the Buyer to perform the referenced Warranty obligations hereunder. A
description of the Company’s standard warranty terms is set forth in Schedule
2.b. From the date hereof until Closing, the Company will continue to process
warranty claims and inquiries in accordance with its historical practice and in
the normal course of its business. At the Closing, the Company will deliver, as
part of the Camera Business Records, records pertaining to inquiries received by
the Company pertaining to Warrantied Products. Within ten (10) days of the
Closing Date, the Company will deliver to the Buyer a list of Warrantied
Products sold within the two years prior to and including the Closing Date to
which the Warranty provisions of this paragraph shall apply; and so long as any
Open Purchase Orders remain to be filled, the Company will update the Buyer on a
weekly basis with information pertaining to Products shipped pursuant to such
Open Purchase Orders.
 
ii.  The foregoing notwithstanding, to the extent that the cost of the Buyer’s
performance pursuant to this Section 2.b. in the 365-day period following the
Closing Date (see "First Year") exceeds $50,000, the Buyer shall be entitled to
set-off such excess against the monthly payments next due to the Company under
the Note until the full amount of such excess has been set-off or the First Year
shall have elapsed, whichever is the first to occur, and interest shall cease to
accrue under the Note with respect to all such amounts so offset onto the end of
the First Year. In the event of any such set-off, the unpaid balance of the Note
shall be reamortized effective with the thirteenth (13th) monthly payment due
thereunder so as to be repaid in full in twelve (12) monthly installments with
interest thereon at the rate of eight percent (8%) per annum from and after the
first to day the following the end of the First Year.
 
iii.  The Company agrees to use its reasonable best efforts, without spending
money or making any binding agreements or commitments, to forward all customer
contacts concerning Warranty Obligations to the Buyer. Without limiting the
generality of the foregoing, the Company shall use its reasonable best efforts
to cause all telephone contacts received by it concerning the Warrantied
Products to be forwarded and referred to the Buyer at (800) 627-1953 and shall,
within ten (10) business days of Closing, alter its website to include hot links
from the sale and warranty sections of the website to the Buyer’s website with
respect to such Warrantied Products.
 
 
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c.  Assumed Tax Liability. The Company will pay all personal property taxes due
and payable with respect to the Assets as of the Closing. At the Closing, the
Buyer shall assume and be liable to timely pay the pro-rated portion of personal
property taxes not yet due and payable with respect to Assets acquired by it
hereunder. All personal property taxes with respect to Assets acquired hereunder
shall be pro-rated as of the Closing Date between the Company and the Buyer
(“Buyer’s Assumed Tax Liability”).
 
d.  Allocation of Purchase Price. One Hundred Fifty Thousand Dollars
($150,000.00) of the purchase price for the Assets shall be allocated to the
non-compete agreement set forth below and the balance of the purchase price
shall be allocated among the Assets in accordance with the Form 8594 attached
hereto as Exhibit “C”, and the parties will report the same accordingly for tax
purposes.
 
e.  Escrow Agreement. Following Closing, if the Buyer reasonably believes in
good faith that there has been a misrepresentation or breach of a warranty,
agreement or covenant under this Agreement, other than with respect to the
warranties (“Product Warranties”) set forth in the first sentence of Section
3.e. (a “Breach”), having a Material Adverse Effect (as defined in Section
15.e.), then in addition to all other rights and remedies of the Buyer
hereunder, but subject to the terms of Section 12, (i) if the amount of all
losses, damages, costs and expenses reasonably anticipated to be incurred by the
Buyer as a result of the Breach (“Loss Estimate Amount”) is $5000.00 or less,
the Buyer shall be entitled, upon written notice to the Company of such Breach
(a “Set-Off Notice”) to retain and set-off such Loss Estimate Amount (the
“Set-Off Remedy”) against any of the amounts owed by the Buyer under the Note,
provided, however, that if the Breach resulting in a Set-Off Remedy is
subsequently cured by the Company, then the Buyer shall promptly pay to the
Company any amount by which a Set-Off Remedy amount exceeds any loss, damages,
costs or expenses actually incurred by the Buyer with respect to the Breach; and
provided further that, upon receipt of a Set-Off Notice, the Company may give
written notice that it disputes such Set-Off Remedy (“Dispute Notice”), in which
case the Buyer shall pay the relevant Loss Estimate Amount in respect of such
Set-Off Remedy into the Escrow Account under the Escrow Agreement; and (ii) if
the Loss Estimate Amount is more than $5000.00 (alone or in the aggregate with
all prior Loss Estimate Amounts not previously claimed in a Set-Off Remedy under
this section), the Buyer may elect to (a) give written notice (an “Escrow
Notice”) to Company of such Breach and of the amount of the Loss Estimate Amount
reasonably anticipated to be incurred by the Buyer as a result of such Breach
and (b) thereafter pay into the Escrow Account referenced in the Escrow
Agreement attached as Exhibit “D” and to be executed simultaneously herewith,
amounts otherwise falling due under the Note, but in no event to exceed the Loss
Estimate Amount. Thereafter, any dispute between the parties with respect to any
Loss Estimate Amount paid into the Escrow Account shall be resolved as provided
in the Escrow Agreement and Section 13 below (collectively, the “Escrow
Agreement Remedy”). As to Product Warranties, the Buyer shall be liable,
notwithstanding any breach by Company of the first sentence of Section 3.e., or
anything herein to the contrary, to honor the Warranties as set forth in Section
2.b., and the Company shall have no further liability in connection therewith
except as provided in Section 2.b.
 
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f.   The Company shall indemnify and save and hold the Buyer harmless from and
against, and shall pay upon demand, any damage, liability, loss, deficiency,
settlement, fees, penalties, or expenses (including without limitation,
reasonable attorneys’ fees and other reasonable costs and expenses incident to
any suit, action, proceeding, demand, assessment, judgment, penalty or
investigation or defense of any claim) arising out of or resulting from any
sales, use, withholding or other taxes other than the Assumed Tax Liability for
which the Buyer may have successor liability based on the transaction.
 
3.  Representations and Warranties. The Company represents and warrants as
follows:
 
a.  The Company is a corporation duly organized, validly existing and legally
operating in the State of Utah and has all requisite power and authority to (1)
own its properties, including the Assets; (2) make, execute and perform this
Agreement and all documents to be executed in connection herewith; and (3)
conduct the Camera Business as and where now being conducted; however, without
limiting any other representation or warranty made by the Company in this
Agreement, the Company does not hereby make any representation or warranty that
it is not in violation of any third-party patents, trade secret or know-how in
the production or manufacture of the Products.
 
b.  The execution and delivery of this Agreement and the sale contemplated
hereby have been duly authorized by the Company.
 
c.  Except as otherwise described in Section 1.e. and Schedule 3.f, the Company
has, and as of the Closing Date will have, good and marketable title to all of
its properties and assets which are being sold, transferred, and conveyed
hereunder, subject to no mortgage, pledge, lien, encumbrance, security interest,
agreement, claim, covenant, easement, restriction, reservation, exceptions or
charge, other than with respect to the Assumed Liability, the Security Interest,
the Permitted Encumbrances and the Buyer’s Assumed Tax Liability.
 
d.  There has been no person employed or retained by the Company, or who is
entitled to be paid under any agreement, express or implied, with it, as a
finder or broker in connection with the transactions contemplated hereunder, and
the Company will indemnify and hold harmless the Buyer from and against any
liability for any claim, demand, or payment of any broker’s or finder’s
commission, fee, or expenses in connection with this Agreement claimed under
alleged agreement with the Company.
 
e.  Other than with respect to repair or other work the Company is performing
arising out of its obligations with respect to Product Warranties, each of the
Products has been manufactured, sold or delivered by the Company in conformity
with all applicable contractual commitments, all express and implied
representations and warranties, all Product literature, all applicable laws,
regulations and other governmental requirements, excluding any of the same
governing patents, copyrights or trade secrets, and to the Company’s Knowledge,
all applicable laws, regulations and other governmental requirements governing
patents, copyrights or trade secrets. With respect to contractual restrictions,
the Products are subject only to the Warranties and the Company’s standard terms
and conditions of sale.  The Company’s standard terms and conditions of sale for
each of the Products are as set forth in the attached Schedule 3.e.
 
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f.  Schedule 1.a.5. sets forth a complete and correct list of the Intellectual
Property used or held for use in the Camera Business. Except as set forth in
Section 1.e. and in Schedule 3.f. attached hereto, the Company owns and
possesses all right, title and interest in and to, or has a valid, enforceable
and transferable license to use the Intellectual Property. Except as set forth
in Schedule 3.f. attached hereto, no claim by any third party contesting the
validity, enforceability, use or ownership of any of the Intellectual Property
has been made or is currently outstanding or, to Company’s Knowledge, is
threatened. Except as set forth in Schedule 3.f. attached hereto, the Company
has not received any notices of and is not aware of any facts that indicate a
likelihood of any infringement or misappropriation by, or conflict with, any
Person with respect to the Intellectual Property, including any demand or
request that Company license rights from, or make royalty payments to, any
Person. Except as set forth in Schedule 3.f. attached hereto, to the Company’s
Knowledge, the Company has not infringed, misappropriated or otherwise
conflicted with any proprietary rights of any third parties and the Company is
not aware of any infringement, misappropriation or conflict that will occur as a
result of the continued operation of the Camera Business or the Assets.
 
g.  The Company is in compliance where it engages in the Camera Business, to the
extent a failure to comply would have a Material Adverse Effect, with all
applicable federal, state, local and international laws, ordinances and
regulations relating to the Camera Business and the Assets, including, without
limitation all environmental, labor, employment, health and safety and other
laws, statutes and regulations, but excluding (i) Intellectual Property laws,
rules and regulations which matters are the subject of a separate warranty
hereunder, (ii) tax laws, rules and regulations, which matters are the subject
of a separate warranty hereunder, (iii) the matters which are the subject of
subsection 3.a., and (iv) current or planned ROHS environmental requirements
imposed by the European Union. The Company will complete the process of updating
existing compliance reports for FlexCam iCam and the DocCam Pro to the following
reports: FCC Part 15, Subpart B; ICES-003; EN55022:1998; EN55024:1998;
EN61000-3-2; EN61000-3-3; and IEC/EN 60950-1:2001 1st Edition.
 
h.  To the Company’s Knowledge and based on its understanding and
interpretations of relevant law (the “Tax Qualification”), the Company has filed
all tax returns, including, without limitation, estimated tax returns,
withholding and quarterly sales/use tax returns required to be filed by it under
the laws of the United States, the State of Utah and each other state or
jurisdiction in which the Company is required to file tax returns. Subject to
the Tax Qualification, the Company has paid and/or deposited all taxes for the
periods covered by such returns and all taxes for which the laws of any state or
other taxing jurisdiction impose successor liability. The Company's federal and
state tax returns have not been audited by the Internal Revenue or any state
department of revenue, no agreements are currently in effect by or on behalf of
the Company for the extension of time for the assessment of any tax. There are
no tax liens, whether imposed by any federal, state or local taxing authority,
outstanding against any of the Assets.
 
4.  Representations and Warranties of the Buyer. The Buyer represents and
warrants as follows:
 
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a.  The Buyer is a corporation duly organized, validly existing and legally
operating in the State of Missouri and has all requisite power and authority to
make, execute and perform this Agreement and all documents to be executed in
connection herewith; furthermore, neither the Buyer nor the Buyer’s principals
are party to or subject to any non-competition agreement that would preclude or
prohibit the Buyer’s operation of the Camera Business following Closing.
 
b.  The execution and delivery of this Agreement and the sale contemplated
hereby have been duly authorized by the Buyer.
 
c.  There has been no person employed or retained by the Buyer or who is
entitled to be paid under any agreement, express or implied, with it, as a
finder or broker in connection with the transactions contemplated hereunder, and
the Buyer will indemnify and hold harmless the Company from and against any
liability for any claim, demand or payment of any broker’s or finder’s
commission, fee or expenses in connection with this Agreement claimed under
alleged agreement with the Buyer.
 
5.  Responsibility for Other Party’s Liabilities.
 
a.  Except for the Assumed Liability, the Security Interest, the Permitted
Encumbrances, the Buyer’s Assumed Tax Liability and the Buyer’s indemnification
obligations hereunder, the Buyer does not have, and will not have after the
Closing Date, any liability or responsibility whatsoever for any liability or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
including, without limitation, tax deficiencies or other tax liabilities of the
Company existing or accrued as of the Closing Date or thereafter arising from
any transactions or events which shall have occurred prior to Closing, whether
or not disclosed to Buyer, including but not limited to any liability or
responsibility for any liability or obligation of any nature arising out of the
delivery of any of the Assets being sold hereunder.
 
b.  Except as specifically set forth herein, the Company does not have, and will
not have after the Closing Date, any liability or responsibility whatsoever for
any liability or obligation of any nature, whether accrued, absolute,
contingent, or otherwise, including, without limitation, tax deficiencies or
other tax liabilities of the Buyer accruing after Closing, with respect to the
Assets being conveyed hereunder. The Buyer furthermore specifically acknowledges
that the Company is not assigning any contractual rights hereunder with respect
to the Company’s Camera Business suppliers, customers, dealers and distributors,
and that, except as specifically set forth herein, the Buyer must negotiate its
own contracts with any such suppliers, customers, dealers and distributors with
respect to the Buyer’s operation of the Camera Business following Closing. The
Company covenants to use its best efforts to work with the Buyer in
transitioning the Camera Business to the Buyer and introducing the Buyer to
Company’s suppliers, customers, dealers and distributors with respect to the
Camera Business. In no event, however, shall the Company be required to expend
money or otherwise incur financial obligations in connection with such
transition.
 
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c.  Without limiting the generality of the foregoing, the Company and the Buyer
acknowledge that certain items of inventory comprising part of the Assets being
conveyed hereunder have the Company’s logo affixed thereto (collectively, the
“Logo Products”). With respect to the Logo Products, the Company and the Buyer
agree as follows: (i) by conveying the Logo Products, the Company is not
conveying a license to the Buyer to use the Company’s name or logo, but merely
granting the Buyer the right to use and sell the Logo Products in the normal
course of the Buyer’s operation of the Camera Business following Closing; and
(ii) the Buyer agrees to indemnify the Company with respect to any product
liability claim that may be brought against the Company as a result of use or
sale by the Buyer of the Logo Products following Closing (“Logo Products
Indemnity”), except as otherwise provided in Section 2.e. herein.
 
6.  Access, Information and Inspection. The Company shall give to the Buyer and
to the Buyer’s counsel, accountants and other representatives full access, for
review, inspection, and other purposes, during normal business hours throughout
the period prior to the Closing Date, to all of the assets, properties, books,
contracts, commitments and records, pertaining to the Camera Business, and shall
furnish the Buyer during such period with all such information concerning the
affairs pertaining to the Camera Business as the Buyer reasonably may request.
 
7.  Transactions Prior to Closing. The Company agrees that, from the date hereof
to the Closing Date, it will:
 
a.  Maintain the Assets to be sold, transferred and conveyed which are listed in
subsections 1, 4 and 5 of Section 1.a., in the same physical condition as exists
as of the Effective Date, reasonable wear and use excepted; provided that the
Company shall have no obligation to repair or replace any of such Assets damaged
or destroyed by fire or other casualty prior to the Closing. Notwithstanding the
foregoing, the Buyer acknowledges that pending Closing, the Company’s
inventories, work in process and sub-assemblies shall be dealt with by the
Company in the ordinary course of business.
 
b.  Use its best efforts without expending money or making any binding
agreements or commitments except in the ordinary course of business, to preserve
the Company’s Camera Business intact, and to preserve its present relationships
and goodwill with its suppliers, vendors, customers, and others having business
relations with it related to the Camera Business;
 
c.  Perform any and all covenants, terms and conditions of any and all contracts
and agreements to which the Company is a party related to the Camera Business,
not commit a breach of any such contract or agreement, or amend, modify or
terminate any such contract or agreement except in the ordinary course of
business;
 
d.  Not engage in any sale, enter into any transaction, contract or commitment,
or incur any liability or obligation related to the Camera Business not in the
ordinary course of business; and
 
e.  Maintain insurance coverage up to the Closing Date in such amounts and upon
such terms as existed as of April 15, 2006.
 
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8.  Buyer’s Conditions Precedent. The Buyer’s obligation to consummate the
transactions in this Agreement is subject to the fulfillment prior to or at the
Closing of each of the following conditions:
 
a.  The Company shall have delivered to the Buyer possession of the Assets
through delivery of the bill of sale and assignment (“Bill of Sale and
Assignment”) in the form attached as Exhibit “E”.
 
b.  The representations and warranties of the Company contained in this
Agreement shall be true at and as of the time of Closing as though such
representations and warranties were made at and as of such time.
 
c.  The Company shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing.
 
d. The Buyer shall have executed a contract with each of NeoSCI, Starin
Marketing, Review Video Services, Inc., Newcomm Distributing, VSO Marketing, and
T2 Supply, LLC, each of which shall be substantially in the form of distributor
agreement attached hereto as Exhibit “F,” with the Buyer having the rights and
obligations of the Company under such form of distributor agreement.
 
e. There having been no material adverse change in the physical condition of the
Assets to be acquired by the Buyer since the Effective Date.
 
f. The Company shall have provided the Buyer with results of UCC lien searches
from all applicable filing offices in the State of Utah showing that no liens or
other encumbrances affect the Assets, other than Permitted Encumbrances.
 
g. No action, suit or proceeding before any court or any governmental or
regulatory authority shall have been commenced or threatened, and no
investigation by any governmental or regulatory authority shall have been
commenced or threatened against the Company seeking to restrain, prevent or
change the transactions contemplated hereby or questioning the validity or
legality of any of such transactions or seeking damages in connection with any
of such transactions.
 
h. None of the Assets shall have been materially damaged by any casualty.
 
9.  Company’s Conditions Precedent. The Company’s obligation to consummate the
transactions in this Agreement is subject to the fulfillment prior to or at the
Closing of each of the following conditions:
 
a.  The Buyer shall have performed and satisfied in all material respects each
of its obligations hereunder required to be performed and satisfied by it at or
prior to the Closing, each of the representations and warranties of the Buyer
contained in this Agreement shall be true at and as of the Closing as though
such representations and warranties were made at and as of such time, and the
Company shall have received a certificate signed by a duly authorized officer or
representative of the Buyer to the foregoing effect.
 
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b.  The Buyer shall have delivered to the Company the fully executed original of
the Note, the Security Agreement, the Escrow Agreement and any ancillary
documents (“Ancillary Documents”) required to be delivered therewith or
reasonably requested by the Company, and the Buyer shall have tendered payment
of the amounts described in Section 2.a. to the Company.
 
c.  No action suit or proceeding before any court or any governmental or
regulatory authority shall have been commenced or threatened, and no
investigation by any governmental or regulatory authority shall have been
commenced or threatened against the Company or the Buyer seeking to restrain,
prevent or change the transactions contemplated hereby or questioning the
validity or legality of any of such transactions or seeking damages in
connection with any of such transactions.
 
d.  The Company shall have obtained the consent of its various dealers and
distributors to the modification, upon terms acceptable to the Company, in its
sole discretion, of existing agreements between the Company and such dealers and
distributors in order to remove products related to the Camera Business from the
scope of such agreements.
 
10.  Closing.
 
a.  The closing hereunder (the “Closing”) shall take place at the offices of the
Parsons Behle & Latimer at 10:00 a.m. on Wednesday, August 30, 2006 (the
“Closing Date”) and the provisions of Exhibit “G” shall be applicable thereto.
 
b.  At the Closing, the Company shall deliver to the Buyer the following:
 
i.  the Bill of Sale and Assignment;
 
ii.  a certificate stating that all representations and warranties of the
Company are true as of the Closing Date and that all conditions precedent or
concurrent to Closing this transaction have been completed;
 
iii.  the Camera Business Records;
 
iv.  all other instruments, certificates and documents, with the exception of
the Bills of Materials, required to be delivered by the Company prior to or at
Closing under this Agreement; and
 
v.  “bills of materials” with respect to the following Assets being conveyed
hereunder (in respect of which the Company gives no warranty) (“Bills of
Materials”):
 
(a)  a list of finished goods inventory comprising part of the Assets that is on
order or in process as at the Closing Date (“Finished Goods WIP”), together with
a scheduled delivery date for such items, which list shall be acknowledged by
Buyer; following the Closing, the Company shall cause such inventory to be
completed and delivered to Buyer, F.O.B. Buyer’s facility in Raytown, Missouri;
 
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(b)  a list of finished goods inventory comprising part of the Assets that is to
be delivered at Closing, which list shall be acknowledged by Buyer; and
 
(c)  a description of the following inventory comprising part of the Assets,
which inventory shall be delivered by the Company to the Buyer in connection
with Closing: (i) all raw materials inventory comprising part of the Assets, net
of the Retained Raw Materials, as provided below; (ii) all work in process
inventory comprising part of the Assets, net of the Retained WIP as provided
below; and (iii) all sub-assemblies inventory comprising part of the Assets, net
of the Retained Sub-assemblies, as provided below.
 
“Retained Raw Materials” means so much, and only so much, of the raw materials
inventory as is required to complete the Finished Goods WIP, provided however,
that the parties acknowledge that certain of the Retained Raw Materials is on
spools or reels or other means of storage such that it is not reasonably
possible to retain only so much thereof as required for the purpose as aforesaid
and agree that the same (i) shall be listed at Closing and acknowledged by the
Buyer and the Company and (ii) delivered by the Company to the Buyer, F.O.B.
Buyer’s facility in Raytown, Missouri, within 30 days after the Closing.
“Retained WIP” means so much and only so much of the work in process inventory
as is required to complete the Finished Goods WIP. “Retained Sub-Assemblies”
means so much, and only so much of the sub-assemblies inventory as is required
to complete the Finished Goods WIP.
 
For greater certainty, in connection with the Closing, the Company shall
physically deliver to the Buyer the Equipment, the Software and the inventory
comprising part of the Assets in accordance with the provisions of this Section
10 and Exhibit G hereto.
 
c.  At the Closing, the Buyer shall deliver to the Company (1) the Down Payment,
(2) the Note, Security Agreement and any Ancillary Documents, (3) a certificate
of the Buyer stating that all representations and warranties of the Buyer are
true as of the Closing Date and that all conditions precedent or concurrent to
Closing this transaction have been completed, and (4) all other instruments,
certificates and documents required to be delivered by the Buyer prior to or at
Closing under this Agreement.
 
11.  Restrictive Covenants.
 
a.  The Company. In consideration of the sum of $150,000.00 as hereinabove set
forth, the Company agrees that for the period of five (5) years from the Closing
Date (the “Restricted Period”) it will not:
 
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i.  Directly or indirectly, either individually or as a principal, partner,
agent, employee, employer, consultant, stockholder, joint venturer, or investor,
or as a director or officer of any corporation or association, or in any other
manner or capacity whatsoever, own or engage in a business located anywhere in
the world that is directly competitive with any Product or service offered by
the Camera Business as of the Closing Date, or advise any such business with
respect to the Camera Business.  Notwithstanding anything to the contrary in
this Section 11, (a) the Company shall not be restricted from being, and shall
be entitled to be a passive owner of not more than ten percent (10%) of the
outstanding securities of any class of an entity, a component of which is
engaged in a business which is competitive with the Camera Business, which
entity is publicly traded, provided that the Company does not have any active
participation in the business of such entity, (b) the Company shall be entitled
to be acquired by, merged or otherwise consolidated or combined with a business
or person, a component of which is engaged in a business which is competitive
with the Camera Business, so long as the other business or person is not an
affiliate of the Company, and (c) the Company shall be entitled to sell other
products, not comprising part of the Camera Business, to customers that may be
competitive with the Buyer. The term “affiliate” means any person controlling,
controlled by, or under common control with any other person. For purposes of
this definition, “control” (including “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such person, whether
through the ownership of voting securities or otherwise. In addition to the
representations and warranties set forth in Section 3 herein, the Company
represents and warrants to the Buyer that as of the Effective Date it is not
engaged in any negotiations with any third party to be acquired by, merged or
otherwise consolidated or combined with such third party. The completion by the
Company of Open Purchase Orders pursuant to Section 1.d shall not constitute a
violation of this Section 11.a.
 
ii.  Disclose or divulge any information, techniques, combinations of
techniques, methods, systems or production matters (collectively, “Confidential
Information”) that the Camera Business uses in the conduct of its business
constituting a trade secret under Utah law or which could otherwise be
reasonably expected to result in economic harm to the Buyer if disclosed and
utilized by competitors of the Camera Business, provided that the foregoing
shall not apply to Confidential Information which (a) is or becomes generally
available to the public other than as a result of disclosure by the Company, or
(b) with respect to which disclosure is compelled by law or court order.
 
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b.  Buyer. In consideration for the Company’s agreement to sell the Assets to
the Buyer, the Buyer agrees for itself and for any of its affiliates that it
will treat the Company’s customer lists constituting part of the Assets
(“Customer Lists”) as confidential information; further, that it will not,
during the Restricted Period, directly or indirectly, either individually or as
a principal, partner, member, agent, employee, employer, consultant,
stockholder, joint venturer, or investor, or as a director or officer of any
corporation, entity or association, or in any other manner or capacity
whatsoever, whether through use of the Customer Lists or otherwise, engage in a
business that is directly or indirectly competitive with any product or service
offered by the Company (excluding the Camera Business) as of the Closing Date
that is listed or described in Schedule 11.b. attached hereto (the “Company’s
Business”). Notwithstanding anything to the contrary in this Section 11.b., (a)
the Buyer shall not be restricted from being, and shall be entitled to be a
passive owner of not more than ten percent (10%) of the outstanding securities
of any class of an entity, a component of which is engaged in a business which
is competitive with the Company’s Business, which entity is publicly traded,
provided that the Buyer does not have any active participation in the business
of such entity and provided the Buyer does not provide such entity with the
Customer Lists, and (b) the Buyer shall be entitled to be acquired by, merged or
otherwise consolidated or combined with a business or person, a component of
which is engaged in a business which is competitive with the Company’s Business,
so long as the other business or person is not an affiliate of the Buyer. The
term “affiliate” means any person controlling, controlled by, or under common
control with any other person. For purposes of this definition, “control”
(including “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or otherwise.
 
c.  Remedies. Each party recognizes that irreparable damage will result to the
other party in the event of the breach of this Section 11 and agrees that, in
the event of such a breach, the other party shall be entitled, in addition to
any other legal or equitable damages and remedies to which it may be entitled or
which may be available, to specific performance with respect to the covenants
and agreements of this paragraph and/or an injunction to restrain the violation
of the provisions of this paragraph by the other party and/or all other persons
acting for or with it. The parties further agrees that in the event that an
action is brought for the enforcement of this section, and if the Court shall
find on the basis of the evidence introduced in said action that any part of
this section is unreasonable either as to time, area or activity covered
therein, or violates any statute, judicial decision or other rule of law, then
the Court shall make a finding as to what is reasonable or would not violate any
such statute, judicial decision or other rule of law and shall enforce this
Agreement by judgment or decree to the extent of such finding.
 
12.  Indemnification.
 
a.  Except with respect to the Assumed Liability (subject to the provisions of
Section 2.b.) and Buyer’s Assumed Tax Liability, the Company shall indemnify and
save and hold the Buyer harmless from and against, and shall pay upon demand,
any damage, liability, loss, deficiency, settlement, fees, penalties, or
expenses (including without limitation, reasonable attorneys’ fees and other
reasonable costs and expenses incident to any suit, action, proceeding, demand,
assessment, judgment, penalty or investigation or defense of any claim)
(collectively “Losses”) arising out of or resulting from, during the periods
indicated below, the following:
 
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i.  during the Survival Period (as defined in Section 14.a.), any inaccuracy of
any representation or warranty of any of the Company which is contained in or
made pursuant to this Agreement, or in any certificate delivered pursuant to
this Agreement;
 
ii.  during the Survival Period, the breach by the Company of the performance of
any of the covenants or obligations to be performed or observed by the Company
pursuant to this Agreement, other than the covenants contained in Section 11 and
other than with respect to the Company’s obligations under Section 2.b;
 
iii.  during the Restricted Period, the breach by the Company of the covenants
contained in Section 11;
 
iv.  during the 730 days following Closing, the breach by the Company of its
obligations under Section 2.b;
 
v.  during the Survival Period, noncompliance by the Company with any applicable
Bulk Sales Act or any similar federal, state or local statute, rule, or
regulation in connection with the transactions contemplated by this Agreement;
or
 
vi.  during the Survival Period, the operation of the Camera Business prior to
the Closing.
 
Notwithstanding the foregoing, the Company shall have no indemnity obligation
hereunder with respect to any claim of the Buyer for which the Buyer elects the
Set-Off Remedy or the Escrow Agreement Remedy permitted under Section 2.e.,
except to the extent that (a) the Buyer is the prevailing party in any
arbitration pursuant to the Escrow Agreement Remedy and (b) the Buyer is unable
to fully recompense itself for losses it has suffered, as determined by the
arbitrator, through the procedures permitted in the Escrow Agreement. Further,
the ability to recover such losses shall in all events be subject to the terms
of the penultimate sentence of Section 12.c.
 
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b.  The Buyer shall indemnify and save and hold the Company harmless from and
against, and shall pay upon demand the Assumed Liability (subject to the
provisions of Section 2.b., Buyer’s Assumed Tax Liability, any Logo Products
Indemnity (as defined in Section 5.c.) and any and all Losses (as defined in
Section 12.a.) arising out of or resulting from (i) during the Survival Period,
any inaccuracy of any representation or warranty of the Buyer which is contained
in or made pursuant to this Agreement, or in any certificate delivered pursuant
to this Agreement, (ii) during the term of the Note, the Buyer’s breach of any
covenants or obligations to be performed or observed by the Buyer pursuant to
this Agreement, other than the covenants contained in Section 11, or the
Security Agreement, (iii) the breach during the Restricted Period of the
covenants contained in Section 11, and (iv) the operation of the Buyer’s
business after the Closing. A party entitled to indemnification hereunder shall
only be entitled to indemnification after the aggregate amount of Losses with
respect thereto exceeds fifteen thousand dollars ($15,000), at which point the
indemnified party shall be entitled to recover the entire amount of such Losses
from the first dollar (including the first fifteen thousand dollars ($15,000)).
Further, subject to the last sentence of subsection 12.b., other than in respect
of claims arising out of fraud, criminal conduct or a breach of the covenants
contained in Section 11 (collectively, the “Exceptions”), in which case the
Company and the Buyer shall have all remedies available at law or in equity, the
Company’s and the Buyer’s sole remedy hereunder or at law for any Loss shall be
to seek indemnification pursuant to this Section 12. Other than in respect of
claims arising out of the Exceptions or which are attributable to the Company’s
negligent misrepresentations herein, no party hereunder shall be liable to pay
any other party in connection with any claim for indemnification pursuant to
this Section 12 for an amount in excess of (a) $750,000, plus (b) in the event
of arbitration or litigation, the prevailing party’s reasonable costs and
attorney’s fees, plus (c) with respect to any claim of the Company under the
Note, any interest accruing on the principal due thereunder. Notwithstanding the
foregoing, the Buyer may seek the Escrow Agreement Remedy, as provided in
Section 2.e. and 12.a. above. In the event of a claim attributable to the
Company’s negligent misrepresentations, its liability shall not exceed
$1,000,000 plus, in the event of arbitration or litigation, the Buyer’s
reasonable attorney’s fees and costs.
 
c.  Upon the receipt by a party of any notice of the commencement of any action,
suit or proceeding, the assertion of any claim, or the notice of any event or
the suffering or incurring of any Losses with respect to which such party may be
entitled to claim indemnification here under (an “Indemnifiable Loss”) (whether
or not any Loss has then been incurred), the party seeking indemnification (the
“Indemnified Party”) shall promptly give written notice to any party from whom
indemnification is sought (the “Indemnifying Party”) describing to the extent
reasonably possible the basis of such claim for indemnification, the amount
thereof, and the method of computing such Indemnifiable Losses. The failure of
the Indemnified Party to give prompt written notice shall not discharge the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is prejudiced by reason of the failure of the Indemnified
Party to give prompt notice.
 
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d.  The Indemnifying Party shall have the right to conduct and control, through
counsel of its choosing, any third party claim, action, suit, or proceeding,
except that (1) the Indemnifying Party shall permit the Indemnified Party to
participate in the defense of any such claim, action, suit, or proceeding
through counsel chosen by the Indemnified Party, provided that the fees and
expenses of such counsel shall be borne by the Indemnified Party; and (2) if the
Indemnified Party refuses to consent to a compromise or settlement approved by
the Indemnifying Party, the Indemnifying Party’s liability for Indemnifiable
Losses shall not exceed the amount for which the claim, action, suit, or
proceeding could have been so settled plus indemnifiable expenses incurred by
the Indemnified Party up to the date of such refusal.
 
e.  The Indemnified Party shall cooperate with the Indemnifying Party in the
preparation for and prosecution of the defense of any claim, action, suit, or
proceeding, including, without limitation, making available evidence within the
control of the Indemnified Party and persons needed as witnesses who are
employed by the Indemnified Party, in each case as reasonably needed for such
defense, at cost, which costs, to the extent reasonably incurred, shall be paid
by the Indemnifying Party.
 
f.  In the event that the Indemnifying Party shall be obligated to indemnify the
Indemnified Party hereunder, the Indemnifying Party shall, upon payment of such
indemnity, be subrogated to all rights of the Indemnified Party with respect to
claims to which such indemnification relates. The rights of the parties to
injunctive and equitable relief and to relief under this paragraph hereof shall
be cumulative and not exclusive of each other.
 
13.  Dispute Resolution.
 
a.  Agreement to Arbitrate. Except as may be specifically provided elsewhere in
this Agreement, in the event of any dispute, claim, question, or disagreement
arising out of or relating to the Agreement or the breach thereof, including the
Security Agreement and the Note, the parties hereby agree that upon notice by
either party to the other (the “Arbitration Notice”), such dispute, claim,
question, or disagreement shall be finally settled by binding arbitration before
a single arbitrator in accordance with the provisions of the Commercial
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration
Association (“AAA”). The Arbitration Notice delivered pursuant to this
subsection (a) shall contain a detailed statement of the claim(s), including a
description of the factual contentions which support said claim(s).
 
b.  Selection of Arbitrator. The parties shall, by joint agreement, select a
single arbitrator, but if they do not agree on the selection of an arbitrator
within twenty (20) days after the date that the Arbitration Notice was received
by the non-sending party, then selection shall be made in accordance with the
Arbitration Rules.
 
c.  Place of Arbitration. The arbitration shall be held in Salt Lake City, Utah,
or such other place as the parties shall mutually agree.
 
d.  Expedited Procedures. The parties agree that any claims that are submitted
to arbitration pursuant to the provisions of this Section 13, and which seek, in
the aggregate, damages or payment of Seventy-Five Thousand Dollars ($75,000) or
less, shall be resolved through the application of the AAA’s Expedited
Procedures for commercial cases.
 
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e.  Interim Relief. Either party may, without inconsistency with this Agreement,
seek from a court any interim or provisional relief that may be necessary to
protect the rights or property of that party pending the selection of the
arbitrator or pending the arbitrator’s determination of the merits of the
controversy.
 
f.  Award. The arbitrator shall issue a written decision setting forth findings
of fact and conclusions of law, and, if agreed upon by the parties, the
arbitrator shall issue such written decision within thirty (30) days of the
close of the hearing.
 
g.  Enforcement of Arbitrator’s Decision. Judgment on the award of the
arbitrator may be entered in any court having jurisdiction over the party
against which enforcement of the award is being sought.
 
14.  General.
 
a.  All of the representations and warranties of the respective parties hereto,
as contained herein, shall survive Closing for the following periods
(respectively, the “Survival Period”), notwithstanding any investigations
heretofore or hereafter made by or on behalf of either of the parties hereto:
(i) with respect to all representations and warranties other than that set forth
in Section 3.h, eighteen (18) months; and (ii) with respect to the
representation and warranty set forth in Section 3.h, until the thirtieth (30th)
day after expiration of the applicable statute of limitations.
 
b.  This Agreement, the Note, the Security Agreement, the Bill of Sale, the
Assignment and the Escrow Agreement, when executed, constitute the entire
agreement among the parties hereto and supersedes all prior and contemporaneous
agreements and understandings between them pertaining to the subject matter
hereof.
 
c.  Any of the provisions of this Agreement may be waived in writing at any time
by the party which is entitled to the benefit hereof. The provisions of this
Agreement may only be amended by written agreement of the parties hereof.
 
d.  Whether or not the transactions contemplated by this Agreement are
consummated, the Company and the Buyer each shall pay its own fees and expenses
incident to the negotiation, preparation, execution and performance of this
Agreement, including the fees and expenses of their attorneys and accountants.
 
e.  Any notice which either party hereto may desire or may be required hereunder
to give to the other party shall be in writing and shall be deemed to be duly
given when mailed by registered or certified mail, postage prepaid, or delivered
by reputable overnight messenger service addressed in case of a matter to the
Company as follows:
 
1825 Research Way
Salt Lake City, Utah 84119
Attn: Zee Hakimoglu

 

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With a mandatory copy to:
 
Geoffrey W. Mangum
Parsons Behle & Latimer
201 South Main Street
Salt Lake City, Utah 84111

and in the case of a notice to the Buyer to:
 
5615 Raytown Road
Raytown, Missouri 64133
Attn: Steven M. Dunn

or to such other address as either party or their counsel hereinafter may
designate to the other party by written notice given in accordance with this
subparagraph (e).
 
f.  The headings of the paragraphs and Schedules of this Agreement are inserted
for convenience only and do not constitute a part thereof.
 
g.  This Agreement and all the provisions hereof shall be binding upon and shall
inure to the benefit of, and be enforceable by, the parties hereto and their
respective heirs, successors and assigns. No assignment by the Buyer shall
relieve the Buyer of its obligations hereunder.
 
h.  This Agreement is being delivered in the State of Missouri, and shall be
construed and enforced in accordance with the laws of such state.
 
i.  The parties agree to continue to be bound by and to abide by the terms of
that certain Non-Disclosure Agreement dated January 11, 2006 executed by the
Buyer and the Company. In addition, the parties agree to hold the existence and
terms and conditions of this Agreement in strict confidence and not to disclose
the same to any other party other than the Buyer’s lender (s), legal counsel and
other advisors), except as may otherwise be required by law, including with
respect to filings with the U.S. Securities and Exchange Commission or as may be
required by the rules and regulations of any applicable stock exchange. As to
any such disclosure required by law, the Company agrees to provide the Buyer
with prior notice that such a disclosure is being made (without being required
to advise the Buyer of the content thereof) and the opportunity to review and
correct any information therein concerning the Buyer.
 
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j.  On behalf of itself and its successors and assigns, the Buyer hereby
promises and covenants not to sue the Company or its successors and assigns for
any use of any of the Intellectual Property (except for any trademarks, service
marks, trade dress, logos, trade names, URL domain names and corporate names) in
any field outside of Camera Business unless such activity by Company is a
violation of the Restrictive Covenants of Section 11 above. This is referred to
as the “Covenant Not to Sue”. The Covenant Not to Sue shall include an
obligation on behalf of the Buyer not to sue for or pursue any claims, demands,
obligations, liabilities, indebtedness, breaches of duty or any relationship,
acts, omissions, misfeasance, causes of action, sums of money, accounts,
controversies, promises, damages, costs, losses and expenses of every type,
kind, nature, description or character.
 
15.  Certain Definitions. The following terms, as used in this Agreement, have
the following meanings:
 
a.  “Buyer’s Knowledge” shall mean the actual knowledge of Steven M. Dunn .
 
b.  “Camera Business” shall mean the Company’s document and educational camera
manufacturing and sales business as presently carried on by it.
 
c.  “The Company’s Knowledge” shall mean the actual knowledge of Zee Hakimoglu,
Craig Peeples and Tracy Bathurst.
 
d.  “Intellectual Property” shall mean all of the following owned by or issued
or licensed to or by Company and used or held for use primarily in connection
with the Camera Business:
 
i.  All inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto and all patents, patent
applications and patent disclosures, together with all reissuances,
continuations, continuations—in—part, revisions, extensions and reexaminations
thereof;
 
ii.  All trademarks, service marks, trade dress, logos, trade names, URL domain
names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith;
 
iii.  All copyrights and all applications, registrations and renewals in
connection therewith; and
 
iv.  All trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, technical data,
specifications, pricing and cost information, and business and marketing plans
and proposals).
 
e.  “Material Adverse Effect” shall mean a material adverse effect on, or a
material adverse change in, the operations, affairs, prospects, conditions
(financial or otherwise), results of operations, assets, liabilities, reserves
or any other aspect of the Camera Business or the Assets.
 
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f.  “Permitted Encumbrances” shall mean liens for personal property taxes,
assessments and governmental charges with respect to the Assets not yet due and
payable.
 
g.  “Person” shall mean any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization.
 
[THE REST OF THIS PAGE IS BLANK]
 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase Agreement
to be duly executed on the dates set forth below, the latter of such dates being
the “Effective Date” of this Agreement.
 
“Buyer”
 
“Company”
KEN-A-VISION MFG. CO., INC.
 
 
By: /s/Steven M. Dunn
Steven M. Dunn, President
 
 
Date:August 7, 2006
CLEARONE COMMUNICATIONS, INC.
 
 
By:/s/Zee Hakimoglu
Name: Zeynep Hakimoglu
Title: President & CEO
 
Date: August 23, 2006
 
   

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