Exhibit 10.8


    Exhibit
      10.8

     

    ASSET
      PURCHASE
      AGREEMENT

    


    THIS
      ASSET PURCHASE AGREEMENT (the “Agreement”) dated as of May 6, 2004 (the
“Effective Date”) by and between ClearOne Communications, Inc., a Utah
      corporation (“Seller”), and M:SPACE, Inc., a Minnesota corporation
      (“Buyer”).

    


    WHEREAS,
      Seller operates a division (“Division”) which is engaged in the marketing and
      sale of audiovisual integration products and services throughout the United
      States and internationally which is partially based in Golden Valley, Minnesota;
      and

    


    WHEREAS,
      the business of the Division, as conducted only in the United States and not
      internationally, is herein referenced as the “Business”; and

    


    WHEREAS,
      Seller desires to sell and Buyer desires to purchase certain assets of Seller
      (and not the liabilities of Seller, except as herein provided) which are
      utilized exclusively or predominantly by the Division in connection with the
      Business, and not internationally, all on the terms set forth
      herein;

    


    NOW,
      THEREFORE, in consideration of the promises and of the mutual covenants and
      conditions contained herein, the parties hereby agree as follows:

    


    1. PURCHASE
      AND SALE OF ASSETS.

    


    1.1 Generally.
      Subject
      to the terms of this Agreement, including the qualifications set forth below,
      Seller shall sell, transfer, convey and deliver to Buyer, and Buyer shall
      purchase from Seller, on and as of the Closing Date, all property and assets
      of
      Seller, tangible or intangible, owned (not leased) by Seller and used
      exclusively or predominantly by the Division in connection with the Business,
      but excluding the Excluded Assets, as such term is defined below (the “Assets”),
      including but not limited to the following:

    


    (a) All
      equipment, demonstration equipment, machinery, computers and other tangible
      personal property exclusively or predominantly used in or related to the
      Business, owned (not leased) by Seller, including but not limited to those
      items
      identified in Schedule 1.1(a), but, notwithstanding anything herein to the
      contrary, excluding (i) all furniture and fixtures other than the furniture
      listed in Schedule 1.1(a), and (b) those items listed as excluded in the
“Notes” column of Schedule 1.1(a).

    


    (b) All
      finished goods and work, inventory, materials in final form, work-in-process,
      raw materials and supplies owned by Seller and exclusively or predominantly
      used
      in or related to the Business including but not limited to the items listed
      in
      Schedule 1.1(b) (the “Inventory”);

    


    (c) The
      intellectual property listed in Schedule 1.1(c) (the “Transferred Intellectual
      Property”).

    


    (d) All
      books, records and datafiles associated with a particular software program,
      owned by Seller and, notwithstanding anything to the contrary herein, used
      exclusively in the conduct of the Business, including but not limited to the
      items listed in Schedule 1.1(d) (the

    


    
      
        
        

      

      
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    “Business
      Books, Records and Datafiles”) although Seller shall be entitled to retain
      copies of the same for record keeping purposes;

    


    (e) Seller’s
      transferable and assignable non-compete, non-disclosure, confidentiality and
      non-solicitation agreements with former employees of Seller, but only with
      respect to such employees who worked exclusively for the Division (the
“Non-Compete Contracts”) but only to the extent locatable by Seller using
      reasonable diligence; 

    


    (f) All
      rights of Seller under any warranty or guarantee (collectively, the
“Warranties”) by any manufacturer, supplier or other transferor of the Assets,
      and all Licenses and Permits, as such term is defined in Section 7.9, but only
      to the extent they are assignable but, with respect to the Warranties, only
      to
      the extent locatable by Seller using reasonable diligence;

    


    (g) All
      rights (but no obligations except the Assumed Liabilities, as such term is
      defined in Section 2 below) of Seller under any purchase orders, contracts,
      guarantees, license agreements, commitments, and SBC maintenance agreement,
      other maintenance agreements commonly known as the “legacy” agreements, or other
      agreements, all as specifically listed on Schedule 1.1(g), but notwithstanding
      anything herein to the contrary, no other contracts (the “Assigned Contracts”);


    


    (h) All
      sales
      records, purchase records, customer lists, salespersons’ lists, sales reports,
      costs sheets, bills of material, technical information, supplier lists,
      advertising and promotional materials, blueprints and specifications, vendor
      records and information, and production records relating exclusively to the
      Business or the Assets, although Seller shall be entitled to retain and use
      copies of these records;

    


    (i) Notwithstanding
      anything to the contrary herein, Seller’s rights in and to only those Internet
      Web site locations (together with all content, information and data located
      on
      such websites and all copyrights thereto) and/or Internet domains and telephone
      and facsimile numbers identified on Schedule 1.1(h), subject to the
      qualifications therein.

    


    The
      Assets shall be transferred by Seller to Buyer in accordance with this Agreement
      with all required consents of any and all third parties and free and clear
      of
      all liabilities, obligations, claims, liens, security interests or encumbrances,
      except (a) as otherwise provided herein with respect to the Assigned
      Contracts and related Assumed Liabilities and (b) that Seller need not
      furnish copies of the Non-Compete Contracts, the Business Books, Records and
      Data files or Warranties at Closing. Rather, Buyer shall be entitled to request
      copies following Closing on an as needed basis, and Seller shall then use
      reasonable diligence to locate the same and furnish copies to Buyer. All Assets
      are sold in an “as is and with all faults” condition.

    


    1.2 Excluded
      Assets.
      Notwithstanding anything in this Agreement to the contrary, Seller is not
      selling, assigning, transferring or conveying to Buyer any of the following
      assets or intangible property interests described in this Section 1.2, which
      were first referred to hereinabove as the “Excluded Assets”: 

    


    (a) Cash
      and
      cash equivalents; 

    


    (b) All
      of
      Seller’s minute books, stock transfer journals, tax returns and the corporate
      seal of Seller;

    


    
      
        
        

      

      
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    (c) All
      books
      and records of Seller except (i) the Business Books, Records and Datafiles,
      (ii)
      as provided in Sections 1.1(d) with respect to copies being retained by
      Seller, and (iii) the items listed in Section 1.1(h), although Seller shall
      be
      permitted to retain copies of such items;

    


    (d) The
      rights of Seller under this Agreement;

    


    (e) The
      name
“ClearOne Communications” and all combinations thereof;

    


    (f) All
      intellectual property other than the Transferred Intellectual
      Property.

    


    (g) All
      accounts receivable of Seller, whether or not related to the
      Business.

    


    (h) All
      prepaid deposits of Seller, whether or not related to the Business.

    


    (i) All
      claims of Seller against third parties, known or unknown, asserted or
      unasserted, which arise before or after the Closing Date, including claims
      for
      payment, except claims for payment arising out of Assigned Contracts and for
      which Buyer is entitled to payment hereunder by the counterparties thereto,
      in
      connection with services to be performed by Buyer thereunder following the
      Closing Date.

    


    (j) All
      of
      Seller’s rights to tax refunds, known or unknown, choate or inchoate, whether or
      not related to the Business.

    


    (k) All
      assets and finished goods relating to the operation of the Division’s
      woodshop.

    


    (l) The
      Spectrologic Tape Library.

    


    (m) All
      furniture and fixtures other than the furniture listed in Schedule
      1.1(a).

    


    (n) All
      real
      and personal property leases.

    


    (o) All
      assets of Seller, tangible or intangible, other than the Assets.

    


    2. ASSUMPTION
      OF LIABILITIES.
      Except
      as hereinafter specifically provided, Buyer shall not and does not assume any
      liabilities or obligations of Seller. Seller shall be solely liable for its
      liabilities and obligations arising from ownership of the Assets, operation
      of
      the Division and Business and incidents and occurrences prior to the Closing
      Date, whether or not reflected in Seller’s books and records and whether or not
      such incidents or occurrences first became known following the Effective Date,
      except as follows: Subject to the terms and conditions of this Agreement, as
      of
      the Closing Date, Buyer assumes only the following:

    


    (a) the
      liabilities and obligations of Seller arising before or after the Closing Date
      and related to the period of time after the Closing Date, but such liabilities
      and 

    


    
      
        
        

      

      
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    obligations
      must relate to services or obligations to be performed by Buyer as assignee
      of
      the Assigned Contracts following the Closing Date, which by their terms are
      to
      be performed following the Closing Date; and 

    


    (b) any
      liability first asserted after the Closing Date under or in respect of the
      Assigned Contracts relating to the period prior to the Closing Date, to the
      extent such liability is asserted after a period of two years following the
      Closing Date. 

    


    (c) any
      liability arising out of the use by Buyer of the telephony listed in Schedule
      1.1(h) following the Closing.

    


    The
      liabilities referred to in subsection (a), (b) and (c) are herein referenced
      as
      the “Assumed Liabilities.”

    


    3. INSTRUMENTS
      OF CONVEYANCE.
      At the
      Closing, pursuant to the terms and subject to the conditions of this Agreement,
      Seller shall:

    


    (a) Execute
      and deliver an Assignment and Assumption Agreement in substantially the form
      attached hereto as Schedule 3 (“Assignment”), which document shall be without
      warranty, except as to title and except as otherwise specifically set forth
      herein; 

    


    Execute
      and deliver such additional instruments of conveyance as may be reasonably
      required to transfer the Assets. At the Closing, pursuant to the terms and
      subject to the conditions of this Agreement, Buyer shall also execute and
      deliver to Seller, the Assignment. 

    


    4. CLOSING.
      The
      Closing with respect to the transactions provided for herein shall take place
      at
      such place and time as the parties may mutually agree, on (a) the earlier
      to occur of (i) a day which is 5 business days after the fulfillment of the
      conditions precedent referenced in Sections 13 and 14, or (ii) May 6,
      2004, or (b) at such other date as the parties may mutually agree (the
“Closing Date”). Notwithstanding the foregoing, neither party shall be obligated
      to close the transactions contemplated by this Agreement unless all conditions
      precedent referenced in this Agreement have been satisfied or waived.


    


    5. PURCHASE
      PRICE.
      The
      total purchase price for the Assets and the performance of Seller’s obligations
      under this Agreement is Buyer’s assumption of the Assumed
      Liabilities.

    


    6. LABOR
      AND EMPLOYMENT MATTERS.
      Buyer
      shall not assume any employment obligations, wage or salary payment obligations,
      including without limitation those arising under any pension, profit sharing,
      deferred compensation, severance, welfare, sick leave, accrued or earned
      vacation, wage or other employee benefit plan, procedure, policy or practice
      of
      Seller regardless of whether such plan, procedure, policy or practice is
      disclosed in this Agreement. Notwithstanding the foregoing, Buyer may make
      offers of employment to certain of Seller’s employees, pursuant to terms
      determined by Buyer. Seller will furnish to Buyer such information in their
      personnel files as Buyer may reasonably request and with respect to which it
      is
      lawful for Seller to disclose. 

    


    7. REPRESENTATIONS
      AND WARRANTIES OF SELLER.
      Seller
      hereby represents and warrants to Buyer that:

    


    
      
        
        

      

      
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    7.1 Incorporation.
      Seller
      is a corporation duly incorporated, validly existing and in good standing under
      the laws of the State of its incorporation, and has the corporate power to
      own
      or lease its properties and to carry on the Business as it is now being
      conducted. 

    


    7.2 Authority
      Relative to this Agreement.
      The
      execution, delivery and performance of this Agreement by Seller, including
      without limitation the sale, conveyance, transfer and delivery and other
      transactions contemplated herein or hereby: (a) have been or will be, prior
      to
      Closing, duly and effectively authorized by the Board of Directors of Seller,
      with respect to the Assets sold by Seller hereunder; and (b) have been or will
      be, prior to Closing, authorized and approved by all of Seller’s shareholders,
      if necessary. 

    


    7.3 Conflicting
      Agreements, Governmental Consents.
      Except
      as disclosed on Schedule 7.3, the execution, delivery and performance by Seller
      of this Agreement and all of the other agreements and instruments to be executed
      and delivered pursuant hereto (collectively, the “Transaction Documents”), the
      consummation of the transactions contemplated hereby, and the performance or
      observance by Seller of any of the terms or conditions hereof or thereof, will
      not (with or without notice or lapse of time) (a) conflict with, or result
      in a
      breach or violation of the terms or conditions of, or constitute a default
      under, or result in the creation of any lien on any of the Assets pursuant
      to
      any award of any arbitrator, or any indenture, contract or agreement,
      instrument, order, judgment, decree, statute, law, rule or regulation to which
      Seller or any of the Assets is subject, or (b) require any filing or
      registration with, or any consent or approval of, any federal, state or local
      governmental agency or authority, or (c) contravene, conflict with, or result
      in
      a violation or breach of any provision of, or give any person or entity the
      right to declare a default or exercise any remedy under, or to accelerate the
      maturity or performance of, or to cancel, terminate, or modify, any contract
      or
      other arrangement to which Seller is a party or by which Seller is bound or
      to
      which any of the Assets is subject (or result in the imposition of any security
      interest upon any of such Assets).

    


    7.4 Restrictive
      Covenants.
      Seller
      is not a party to nor are the Assets bound or affected by any agreement or
      document containing any covenant limiting the freedom of Seller to compete
      in
      the Business or which materially or adversely affects the business practices,
      operations or conditions of the Business or the continued operation of the
      Business after the Closing Date on substantially the same basis and on
      substantially the same terms and conditions as the Business is presently carried
      on. 

    


    7.5 Binding
      Obligation.
      This
      Agreement and the Transaction Documents are, or when delivered will be, legally
      valid and binding obligations of Seller, enforceable in accordance with their
      respective terms, subject to the qualification that such enforceability may
      be
      limited by bankruptcy, insolvency, reorganization, moratorium and other similar
      laws relating to or affecting creditors’ rights generally and by general
      equitable principles (regardless of whether such enforceability is considered
      in
      a proceeding in equity or at law). 

    


    7.6 Actions,
      Suits, Proceedings.
      Except
      as disclosed in Schedule 7.6, there are no actions, suits or proceedings pending
      or, to the knowledge of Seller, threatened against Seller or any of the Assets
      in any court or before any federal, state, municipal or other governmental
      agency or before any other private or public tribunal or quasi-tribunal which,
      (a) if decided adversely to Seller, would have a material adverse effect upon
      the Business or Assets, (b) seek to restrain or prohibit the transactions
      contemplated by this Agreement or obtain any damages in connection therewith,
      or
      (c) in any way call into question the validity of this Agreement or the other
      agreements and instruments 

    


    
      
        
        

      

      
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    to
      be
      executed and delivered by Seller; nor is Seller in default with respect to
      any
      order of any court or governmental agency entered against it in respect of
      the
      Business or Assets. Seller has not has received notice, formally or otherwise,
      of any judgments, orders, decrees, stipulations, settlement agreements, liens
      or
      injunctions, relating in any way to the Assets, which have not been wholly
      and
      completely settled, complied with and discharged. 

    


    7.7 No
      Material Violations.
      Except
      as disclosed in Schedule 7.7, Seller is not in violation of any applicable
      law,
      rule or regulation relating to the Business that would reasonably be expected
      to
      have a material adverse effect on the Business, and, to the knowledge of Seller,
      there are no requests, claims, notices, investigations, demands, administrative
      proceedings, hearings or other governmental claims against Seller alleging
      the
      existence of any such violation that would have a material adverse effect on
      the
      Business. For purposes of this Agreement, “material adverse effect” means any
      change in or effect (i) that is or will be materially adverse to the Business
      taken as a whole, or (ii) that will prevent or materially impair Seller’s
      ability to consummate the transaction contemplated by this Agreement, provided
      that a material adverse effect shall not include changes or effects (a) relating
      to economic conditions or financial markets in general, (b) resulting from
      the
      voluntary termination of employment by employees of Seller between the date
      of
      this Agreement and the Closing Date or (c) resulting from actions required
      to be
      taken by the terms of this Agreement. 

    


    7.8 Title
      to Assets and Absence of Encumbrances.
      Except
      as noted otherwise in this Agreement or any schedule thereto with respect to
      qualifications as to assignability or transferability, (i) Seller owns and
      has
      good and marketable title to all of the Assets; (ii) the delivery to Buyer
      of
      the instruments of transfer of ownership contemplated by this Agreement will
      vest good and marketable title to the Assets in Buyer, free and clear of any
      and
      all liabilities (except as otherwise provided in this Agreement with respect
      to
      Assigned Contracts and the Assumed Liabilities), liens, claims, and encumbrances
      of every kind and character whatsoever; and (iii) the Assets include all assets
      necessary for the operation of the Business as it has been operated by Seller,
      except with respect to contracts which are not being assigned hereunder.


    


    7.9 Licenses
      and Permits.
      All
      material licenses, permits, franchises, approvals and governmental
      authorizations (collectively the “Licenses and Permits”) required for Seller in
      connection with the operation of the Business, except with respect to
      qualifications of Seller to do business as a foreign corporation in states
      other
      than Utah, as to which Seller makes no warranty, are listed in Schedule 7.9.
      Except for the Licenses and Permits, no other such licenses, permits,
      franchises, approvals and governmental authorizations (other than qualifications
      of Buyer to do business as a foreign corporation in states outside of Minnesota)
      are required for the operation of the Business. 

    


    8. Labor
      and Employment Agreements.
      The
      Division is not subject to any collective bargaining agreement. 

    


    8.1 Environmental
      Matters.
      Except
      as set forth in Schedule 8.1:

    


    (a) Seller
      is
      conducting and has conducted its Business in compliance with all applicable
      Environmental Laws and pursuant to all necessary government
      permits;

    


    (b) There
      is
      no pending litigation and no pending or threatened Environmental Claim by any
      person (including, but not limited to, any governmental authority) with respect
      to the Business; 

    


    
      
        
        

      

      
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    (c) Seller
      has not received any written notification from the United States Environmental
      Protection Agency advising Seller of any potential liability under the
      Comprehensive Environmental Response, Compensation, and Liability Act
      (“CERCLA”), as amended, with respect to the Business;

    


    (d) Throughout
      this Agreement, the following terms shall have the meanings set forth
      below:

    


    (i) “Environmental
      Claim” shall mean any claim or demand, or notice thereof, alleging potential
      liability (including, without limitation, liability for investigative costs,
      clean-up costs, monitoring costs, governmental response costs, natural resources
      damages, property damages, liability for nuisance or damage to property values,
      personal injuries or penalties) arising out of, based on or resulting from:
      (A)
      noncompliance with Environmental Laws by Seller in connection with the
      Business.

    


    (ii) “Environmental
      Laws” shall mean any federal, state or local statute, regulation, rule,
      ordinance or common law pertaining to the protection of human health or the
      environment and any applicable orders, judgments, decrees, permits, licenses
      or
      other authorizations or mandates under such laws.

    


    8.2 Employee
      Plans.
      

    


    (a) After
      the
      Closing, Seller warrants that Buyer shall not have any responsibility or
      liability under any:

    


    (i) employee
      benefit plan, as defined in Section 3(3) of the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”), maintained or contributed to by
      Seller or any subsidiary for any of its employees, former employees or directors
      (or their respective beneficiaries), including without limitation any group
      insurance or self-insured health plan, severance pay plan, non-qualified
      deferred compensation plan or retirement plan intended to be qualified under
      Internal Revenue Code (the “Code”) Section 401(a) (collectively, the "ERISA
      Plans");

    


    (ii) trust
      fund maintained by Seller or any subsidiary in connection with any such ERISA
      Plan;

    


    (iii) "cafeteria
      plan" ("125 Plan") maintained by Seller and governed by Code Section 125;
      or

    


    (iv) other
      plan maintained by Seller providing compensation, benefits or perquisites to
      any
      employees, former employees or directors (or their respective beneficiaries)
      of
      Seller or any subsidiary, including without limitation any incentive, bonus,
      stock option, restricted stock, vacation pay or sick pay plan.

    


    (b) Seller
      represents that Seller and its subsidiaries have timely complied with all of
      its
      "COBRA" obligations under ERISA Section 602, Code Section 4980B and applicable
      state insurance laws, with respect to any group life insurance and health
      benefit continuation coverage required to be provided by those of its ERISA
      Plans and any 125 Plan that provide such benefits for employees (and their
      respective beneficiaries) that are or have been employed in 

    


    
      
        
        

      

      
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    connection
      with the Assets being acquired by Buyer hereunder; and Seller warrants that
      Seller and its subsidiaries will continue, after the Closing, to comply with
      such obligations with respect to any of their employees, former employees or
      their respective beneficiaries who are or become entitled to such continuation
      coverage, to the extent required by applicable laws. 

    


    8.3 Assigned
      Contracts.
      Seller
      and, to the knowledge of Seller, each other party thereto, has substantially
      performed all obligations required to be performed under the Assigned Contracts
      to date, and are not in default under any Assigned Contract. The Assigned
      Contracts are each in full force and effect and, except as set forth in Schedule
      8.3(a), are assignable to Buyer without the consent of third parties, and Seller
      has not waived or assigned to any other person any of its rights thereunder.
      The
      Assigned Contracts are complete and accurate or prior to Closing will be
      complete and accurate, and complete copies of such contracts including all
      amendments or supplements thereto have been or will be delivered to Buyer prior
      to Closing. No such contract shall prohibit or limit the ability of Seller
      to
      engage in any business activity or compete with any person in connection with
      the Business and/or other activities of the Buyer. Seller has delivered to
      Buyer
      three basic forms of maintenance contracts (copies of which are attached as
      Schedule 8.3(b), and each of the Assigned Contracts is substantially
      identical in form to at least one of such forms of maintenance contracts,
      recognizing that each such maintenance contract may vary from one another as
      to
      details. 

    


    8.4 Intellectual
      Property Rights.
      All
      Intellectual Property included in the Assets are solely registered (if at all)
      in the name of Seller, of which Seller has all right, title and interest, and
      have not been licensed or otherwise been made available by Seller for use by
      others except in the ordinary course of Seller’s Business. To Seller’s
      knowledge, all such registered intellectual property rights are in full force
      and effect. Except as listed elsewhere in this Agreement, Seller does not
      license from others the right to use any industrial or intellectual property
      rights in the Business. To Seller’s knowledge there has been no unauthorized use
      or disclosure or misappropriation of any of its intellectual properties utilized
      in connection with the Business, and Seller has taken reasonable steps in its
      view, to protect against the unauthorized use or disclosure of its intellectual
      property. 

    


    8.5 Inventory.
      The
      Inventory is being sold and transferred hereunder in an “as is, with all faults”
condition, inspected and accepted by Buyer.

    


    8.6 Taxes.
      Seller
      has paid all taxes, including federal, state and local income, profits,
      franchise, sales, use, property, excise, payroll, and other taxes and
      assessments (including interest and penalties) relating to or for Seller, the
      Assets or the Business, in each case to the extent that such have become due
      and
      are not being contested in good faith. No claims for additional taxes have
      been
      asserted against Seller and no audits are pending with respect to any tax
      liabilities of Seller. 

    


    8.7 Product
      Liability.
      Except
      as set forth in Schedule 8.7, it has no liability (and Seller has no knowledge
      of any basis for any present or future action, suit, proceeding, hearing,
      investigation, charge, complaint, claim, or demand against Seller giving rise
      to
      any liability) arising out of any injury to individuals or property as a result
      of the ownership, possession, or use of any product manufactured, sold, or
      delivered by Seller. 

    


    8.8 Disclosure.
      The
      representations and warranties contained in this Section 8 do not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements and information contained in this
      Section 8 not misleading.

    


    
      
        
        

      

      
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    9. REPRESENTATIONS
      AND WARRANTIES OF BUYER.
      Buyer
      hereby represents and warrants to Seller as follows:

    


    9.1 Organization.
      Buyer
      is a corporation duly incorporated and existing and in good standing under
      the
      laws of the State of Minnesota and has the corporate power to execute and
      deliver this Agreement and to consummate the transactions contemplated
      hereby.

    


    9.2 Corporate
      Authority.
      The
      execution and delivery of this Agreement, and the Transaction Documents, and
      the
      consummation of transactions contemplated hereby or thereby have been duly
      authorized by all necessary corporate action and will not violate or conflict
      with any agreement or order by which Buyer is bound. This Agreement and the
      Transaction Documents are, or when delivered will be, legally, valid and binding
      obligations of Buyer, enforceable in accordance with their respective
      terms.

    


    9.3 No
      Conflict.
      Neither
      the execution, delivery and performance by Buyer of this Agreement nor the
      consummation by it of the transactions contemplated hereby, will:

    


    (a) Result
      in
      a violation of or default under or give rise to a right of termination,
      cancellation or acceleration, with or without the giving of notice or the lapse
      of time or both, of any agreement of Buyer;

    


    (b) Adversely
      affect Buyer’s ability to perform its obligations hereunder or otherwise
      consummate the transactions contemplated hereby; 

    


    (c) Result
      in
      a violation of any statute, rule, regulation, ordinance, code, order, judgment,
      writ, injunction, decree or award, which would have a material adverse effect
      on
      Buyer’s ability to perform its obligations hereunder or to otherwise consummate
      the transactions contemplated hereby. 

    


    9.4 Absence
      of Litigation.
      There
      are no claims, actions, suits or proceedings (public or private) pending or,
      to
      Buyer’s knowledge, threatened against or effecting Buyer at law or in equity,
      before or by any federal, state, municipal or other governmental or
      non-governmental department, commission, board, bureau, agency, court or other
      instrumentality, or by any private person or entity that if adversely
      determined, would individually or in the aggregate, have an adverse effect
      upon
      Buyer’s ability to enter into and consummate the transactions contemplated by
      this Agreement.

    


    10. NONCOMPETE
      AND CONFIDENTIAL INFORMATION.

    


    (a) Noncompetition.
      Seller
      will not, without the prior written consent of Buyer (which Buyer may withhold
      with or without reason) for the period commencing on the Effective Date and
      ending three (3) years from such date (the “Noncompete Period”), engage or be
      interested, directly or indirectly, whether alone or together with or on behalf
      of or through any other person, firm, association, trust, venture or corporation
      whether as partner, stockholder, agent, officer, director, employee, technical
      adviser, lender, trustee, beneficiary, or otherwise, in any phase of the
“Restricted Business” (as hereinafter defined) in the “Restricted Area” (as
      hereinafter defined). Notwithstanding anything to the contrary in this Section
      10, Seller shall not be restricted from and shall be entitled to:

    


    
      
        
        

      

      
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    (i) Purchase
      or otherwise acquire up to (but not more than 5% of any class of securities
      of
      any person engaged in the Restricted Business, so long as such securities are
      publicly traded; and

    


    (ii) Be
      acquired by, merged, or otherwise consolidated or combined with a business
      or
      person, a component of which is engaged in the Restricted Business.

    


    (b) Nonsolicitation.
      During
      the Noncompete Period Seller will not, for itself or any other person or entity,
      employ or otherwise engage, or offer to employ or otherwise engage, or solicit
      (except as may occur in solicitations of a general nature which are not targeted
      towards specific individuals) any person who has been an employee, or sales
      representative of the Division or Buyer at any time within the one year period
      prior to the date hereof or during the term of the Noncompete Period (the
“Nonsolicitation Time Period”), nor during the Noncompete Period will Seller or
      any other person or entity on its behalf, contact or solicit any Restricted
      Business in the Restricted Area (as defined herein) from any person or entity
      that has been or is a customer or client of Seller or Buyer at any time during
      the Nonsolicitation Time Period.

    


    (c) Restricted
      Business.
      The
      term “Restricted Business” means only the design, installation and maintenance
      (but not manufacture) of integrated (as such term is described below)
      audio/visual systems and integrated telephone conferencing systems for end
      users, including the resale of third-party manufactured audio/visual and phone
      conferencing systems in connection (and only in connection) with such design,
      installation and maintenance services. The term “integrated” refers to the
      integration by Buyer of individual products manufactured by two or more
      manufacturers unaffiliated with Buyer into audio/visual or telephone
      conferencing systems, which are then installed by Buyer for end users.
      Notwithstanding the foregoing, the term “Restricted Business” does not include
      the design and manufacture by Seller or its contracted manufacturers of
      audio/visual and phone conferencing systems (including manufactured products
      comprising all or a portion of such systems but which products may themselves
      contain components manufactured by third parties), or the design, sale,
      installation and maintenance by Seller, its affiliates, dealers, distributors,
      manufacturers’ representatives and agents, of such manufactured systems
      (including manufactured products comprising all or a portion of such systems
      but
      which products may themselves contain components manufactured by third parties).
      Nor does the term “Restricted Business” include the maintenance by Seller of one
      or more “Helpdesks.”

    


    (d) Restricted
      Area.
      The
      term “Restricted Area” means the geographic areas of the United States of
      America, not including its territories and possessions.

    


    (e) Engage
      or Be Interested, Directly or Indirectly.
      The
      term “engage or be interested, directly or indirectly,” as used herein, shall
      include giving advice or technical or financial assistance, by loan, guarantees,
      stock transactions or in any other manner to any person, firm, association,
      trust, venture or corporation doing or proposing to undertake such “Restricted
      Business” in the area covered by this Agreement.

    


    (f) Injunctive
      Relief.
      In the
      event that said covenant not to compete is considered by a court of competent
      jurisdiction to be excessive in its duration or in the area to which it applies,
      it shall be considered modified and valid for such duration and for such area
      as
      said court may determine reasonable under the circumstances. In recognition
      of
      the irreparable harm that a violation of said covenant would cause to Buyer,
      Seller agrees that Buyer shall have the right to 

    


    
      
        
        

      

      
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    enforce
      this agreement by specific remedies, which shall include, among other things,
      temporary restraining orders and temporary and permanent injunctions. In the
      event of any such violation, Seller agrees to pay the reasonable attorneys’ fees
      incurred by Buyer in pursuing any of its rights with respect to such violation
      or violations in addition to the actual damages sustained by Buyer as a result
      thereof. In turn, Buyer agrees to pay the reasonable attorneys’ fees incurred by
      Seller if Buyer is not the prevailing party in connection with Buyer’s efforts
      to enforce this Agreement. 

    


    (g) Confidential
      Information.
      Each
      party acknowledges that it has, will or may have access to and become informed
      of Confidential Information of the other which is a competitive asset of such
      other party. As used herein, “Confidential Information” shall mean information
      that is proprietary to a party or proprietary to others and entrusted to a
      party, whether or not trade secrets. Confidential Information includes, but
      is
      not limited to, information relating to business plans and to business as
      conducted or anticipated to be conducted by a party and to its past, current
      or
      anticipated business (including without limitation information relating to
      the
      Restricted Business). Confidential Information also includes, without
      limitation, customer lists and information concerning purchasing, accounting,
      marketing, selling, products and services of a party. The Confidential
      Information with respect to the Business and the Assets purchased by Buyer
      pursuant to the Agreement shall be owned exclusively by Buyer, except to the
      extent that such Confidential Information may have other uses in the remainder
      of Seller’s business or businesses, whether currently or in the future,
      including but not limited to Seller’s international audiovisual integration
      business. Each party agrees that it will keep all Confidential Information
      owned
      exclusively by the other party hereto in strict confidence and to never directly
      or indirectly make known, divulge, reveal, furnish, make available, or use
      any
      such Confidential Information. Notwithstanding the foregoing, a party shall
      not
      have a duty of confidentiality with respect to any information disclosed by
      the
      other party which:

    


    (i) The
      receiving party can demonstrate was known to it at the time of its disclosure,
      and was not acquired either directly or indirectly in breach of any violation
      of
      secrecy or confidentiality obligations owed to the disclosing party by any
      other
      party; 

    


    (ii) Is
      or
      becomes publicly known through no wrongful act of the receiving party or any
      other third parties; 

    


    (iii) Is
      received from a third party subsequent to the date of this agreement without
      breach of the restriction contained in this Agreement or any agreement between
      a
      third party and the disclosing party; or 

    


    (iv) Is
      approved for release by the written authorization of the disclosing party,
      or


    


    (v) That
      has
      been or is independently developed by the receiving party or any other person
      as
      a matter of record, without reliance on the information provided by the
      disclosing party.

    


    11. INDEMNIFICATION
      BY THE SELLER

    


    11.1 Generally.
      Subject
      to the terms of this Section 11, Seller shall indemnify, defend and hold
      harmless Buyer and its directors, officers, employees, agents, consultants,
      representatives, affiliates, successors, permitted transferees and assigns
      (individually a “Buyer 

    


    
      
        
        

      

      
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    Indemnified
      Party”; and collectively the “Buyer’s Indemnified Parties”), promptly upon
      demand, at any time and from time to time, from, against, and in respect of
      any
      and all demands, claims, losses, damages, judgments, liabilities, assessments,
      suits, actions, proceedings, interest, penalties, and expenses (including,
      without limitation, settlement costs and any legal, accounting and other
      expenses for investigating or defending any actions or threatened actions or
      for
      enforcing such rights of indemnity and defense) incurred or suffered by the
      Buyer’s Indemnified Parties, in connection with, arising out of or as a result
      of each and all of the following:

    


    (a) any
      breach of any covenant, obligation, agreement, representation or warranty (but
      with respect to any representation or warranty, subject to the limitations
      of
      Section 17.3) made by Seller in this Agreement or any other document or
      instrument delivered by Seller to Buyer or entered into as part of the
      transactions contemplated by this Agreement;

    


    (b) any
      and
      all liabilities and obligations of Seller except for the Assumed Liabilities,
      and any and all liabilities and obligations arising from ownership of the
      Assets, operation of the Business and incidents and occurrences on or prior
      to
      the Effective Date, whether or not reflected in its book and records and whether
      or not manifest on, after or prior to the Effective Date;

    


    (c) any
      environmental liabilities, including but not limited to, clean-up, remediation
      and closure liabilities, arising out of, based on or resulting from (i) Seller’s
      operation of the Business; or (ii) Seller’s ownership of the Assets prior to the
      Closing Date; and

    


    (d) any
      and
      all liabilities arising out of the lawsuit referenced in Schedule
      8.7.

    


    11.2 Non-Waiver,
      Non-Exclusive Remedy.
      Failure
      of the Buyer Indemnified Parties to give reasonably prompt notice of any claim
      or claims shall not release, waive or otherwise affect Sellers’ obligations with
      respect thereto except to the extent that Seller can demonstrate actual loss
      and
      prejudice as a result of such failure. 

    


    12. INDEMNIFICATION
      BY BUYER

    


    12.1 Generally.
      Subject
      to the terms of this Section 12, Buyer shall indemnify, defend and hold harmless
      Seller and its directors, officers, employees, agents, consultants,
      representatives, affiliates, successors, permitted transferees and assigns
      (individually a “Seller Indemnified Party”; and collectively the “Seller’s
      Indemnified Parties”), promptly upon demand, at any time and from time to time,
      from, against, and in respect of any and all demands, claims, losses, damages,
      judgments, liabilities, assessments, suits, actions, proceedings, interest,
      penalties, and expenses (including, without limitation, settlement costs and
      any
      legal, accounting and other expenses for investigating or defending any actions
      or threatened actions or for enforcing such rights of indemnity and defense)
      incurred or suffered by the Seller’s Indemnified Parties, in connection with,
      arising out of or as a result of each and all of the following:

    


    (a) any
      breach of any covenant (including specifically the covenants of Buyer in
      Section 16.1), obligation, agreement, representation or warranty (but with
      respect to any representation or warranty, subject to the limitations of Section
      17.3) made by Buyer in this Agreement or any other document or instrument
      delivered by Buyer to Seller or entered into as part of the transactions
      contemplated by this Agreement; and

    


    
      
        
        

      

      
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    (b) any
      misrepresentation or omission contained in any document, statement or
      certificate furnished by Buyer pursuant to this Agreement or in connection
      with
      the transactions contemplated by this Agreement.

    


    (c) All
      Assumed Liabilities.

    


    12.2 Non-Waiver,
      Non-Exclusive Remedy.
      Failure
      of the Buyer Indemnified Parties to give reasonably prompt notice of any claim
      or claims shall not release, waive or otherwise affect Buyer’s obligations with
      respect thereto except to the extent that Seller can demonstrate actual loss
      and
      prejudice as a result of such failure. 

    


    12.3 Whenever
      any claim arises for indemnification hereunder, the indemnified party (hereafter
      the “Indemnified Party”) shall notify the indemnifying party (hereafter the
“Indemnifying Party”) in writing by registered or certified mail promptly after
      the Indemnified Party has actual knowledge of the facts constituting the basis
      for such claim (the “Notice of Claim”), provided that the failure of the
      Indemnified Party to notify the Indemnifying Party shall not invalidate any
      claim for indemnification hereunder unless the failure to so notify prejudices
      the Indemnifying Party. Such notice must be given in good faith, shall specify
      with particularity all facts known to the Indemnified Party giving rise to
      such
      indemnification right and, if possible, the amount or an estimate of the amount
      of the liability arising therefrom.

    


    12.4 Right
      to Defend.
      If the
      facts giving rise to any such claim for indemnification involve any actual
      or
      threatened claim or demand by any third party against the Indemnified Party
      or
      any possible claim or demand by the Indemnified Party against any third party,
      the Indemnifying Party shall be entitled (without prejudice to the right of
      the
      Indemnified Party to participate in the determination of such claim or demand
      at
      its expense through counsel of its own choosing) to defend or prosecute such
      claim or demand in the name of the Indemnified Party at the Indemnifying Party’s
      expense and through counsel of its own choosing if it gives written notice
      of
      its intention to do so to the Indemnified Party at any time. Whether or not
      the
      Indemnifying Party chooses to so defend or prosecute such claim, the parties
      shall cooperate in the defense of prosecution thereof and shall furnish such
      records, information and testimony and attend such conferences, discovery
      proceedings, hearings, trial and appeals as may be reasonably requested in
      connection therewith. 

    


    12.5 Settlement.
      Except
      as provided in Section 12.4, (a) neither the Indemnified Party nor the
      Indemnifying Party shall make any settlement of any claim that would give rise
      to an indemnification claim hereunder without the consent of the Indemnifying
      Party, which consent shall not be unreasonably withheld, and (b) if a firm
      offer is made to settle a claim and the Indemnifying Party desires to accept
      such offer, but the Indemnified Party elects not to agree to such settlement
      offer, the Indemnified Party may contest or defend such claim and, in such
      event, the total maximum liability of the Indemnifying Party to indemnify or
      otherwise reimburse the Indemnified Party in accordance with this Agreement
      with
      respect to such claim shall be limited to and shall not exceed the amount of
      such settlement offer.

    


    12.6 Claim
      Reduction.
      Any
      claim for indemnification under this Article 12 shall be reduced to the
      extent of any third party insurance actually received by the Indemnified
      Party.

    


    13. CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF SELLER.
      The
      obligations of Seller to consummate the transactions contemplated hereby are
      subject to the satisfaction (or waiver by Seller) on or prior to the Closing
      Date of the following conditions precedent:

    


    
      
        
        

      

      
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    13.1 Representations
      and Warranties.
      All the
      representations and warranties of Buyer set forth herein shall have been true
      and correct in all material respects when made and shall be true and correct
      in
      all material respects on and as of the Closing Date with the same force and
      effect as though made on and as of the Closing Date.

    


    13.2 Performance
      of Agreements.
      Buyer
      shall have performed in all material respects all obligations and agreements
      and
      complied in all material respects with all covenants and conditions set forth
      herein which are to be performed by or complied with by or prior to the Closing
      Date.

    


    13.3 Prohibition.
      There
      shall have been no written or oral claims by a third party challenging
      consummation of the transactions contemplated by this Agreement and no order
      or
      preliminary or permanent injunction shall have been entered in any action or
      proceeding before any United States federal or state court of competent
      jurisdiction or governmental authority (which has jurisdiction over the
      enforcement of any applicable laws) making illegal the consummation of any
      of
      the transactions hereunder.

    


    13.4 Closing
      Documents.
      The
      form and substance of all certificates, instruments and other documents required
      to be delivered to Buyer under this Agreement or necessary to affect the
      transfer of the Assets and assumption of the Assumed Liabilities, shall have
      been executed by Buyer and delivered to Seller on or before the Closing in
      the
      form attached hereto or in a form otherwise reasonably acceptable to Seller,
      including all the documents required by Section 3 hereof.

    


    13.5 Officer
      Certificate.
      Buyer
      shall have furnished to Seller a certificate, dated as of the Closing Date,
      signed by an officer of Buyer to the effect that Buyer has fulfilled the
      conditions set forth in Sections 13.1 and 13.2 hereof.

    


    13.6 Consents.
      All
      required Consents shall have been obtained.

    


    14. CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF BUYER.
      The
      obligations of Buyer to consummate the transactions contemplated hereby are
      subject to the satisfaction (or waiver by Buyer ) on or prior to the Closing
      Date of the following conditions precedent:

    


    14.1 Representations
      and Warranties.
      All the
      representations and warranties of Seller set forth herein shall have been true
      and correct in all material respects when made and shall be true and correct
      in
      all material respects on and as of the Closing Date with the same force and
      effect as though made on and as of the Closing Date.

    


    14.2 Performance
      of Agreements.
      Seller
      shall have performed in all material respects all obligations and agreement
      and
      complied in all material respects with all covenants and conditions set forth
      herein which are to be performed by or complied with by or prior to the Closing
      Date.

    


    14.3 Prohibition.
      There
      shall have been no written or oral claims by a third party challenging
      consummation of the transactions contemplated by this Agreement and no order
      or
      preliminary or permanent injunction shall have been entered in any action or
      proceeding before any United States federal or state court of competent
      jurisdiction or governmental authority (which has 

    


    
      
        
        

      

      
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    jurisdiction
      over the enforcement of any applicable laws) making illegal the consummation
      of
      any of the transactions hereunder.

    


    14.4 Closing
      Documents.
      The
      form and substance of all certificates, instruments and other documents required
      to be delivered to Seller under this Agreement or necessary to affect the
      transfer of the Assets and assumption of the Assumed Liabilities, shall have
      been executed by Seller and delivered to Buyer on or before the Closing in
      the
      form attached hereto (including the Assignment of Domain Names and the
      Assignment of Marks attached as Exhibits 14.4(a) and 14.4(b) or in a form
      otherwise reasonably acceptable to Buyer, including all the documents required
      by Section 3 hereof.

    


    14.5 Officer
      Certificate.
      Seller
      shall have furnished to Buyer a certificate, dated as of the Closing Date,
      signed by an officer of Seller to the effect that Seller has fulfilled the
      conditions set forth in Sections 14.1 and 14.2 hereof.

    


    14.6 Consents.
      All
      required Consents shall have been obtained.

    


    15. TERMINATION
      PRIOR TO THE CLOSING.

    


    15.1 Termination.
      This
      Agreement may be terminated at any time prior to the Closing as
      follows:

    


    (a) By
      the
      mutual consent of Seller and Buyer.

    


    (b) By
      Seller
      or Buyer if there shall have been any statute, rule or regulation enacted or
      promulgated by any government body or agency which makes the purchase of the
      Assets illegal or renders Buyer unable to purchase or Seller unable to transfer
      the Assets or any part thereof.

    


    (c) If
      any of
      the conditions set out in Section 12 and 13 are not satisfied or waived at
      or before the Closing Date, this Agreement may be terminated by the Party
      entitled to the benefit of such condition upon notice in writing to the other
      Party.

    


    (d) If
      the
      Closing has not occurred on or prior to June 1, 2004, this Agreement may be
      terminated by either Party upon giving written notice to the other
      Party.

    


    15.2 Rights
      Upon Termination.
      In the
      event of a termination of this Agreement pursuant to this Section 15, the
      obligations of the Parties under this Agreement shall be at an end, provided
      that any party may also bring an action against the other for damages suffered
      where the non-performance or non-fulfillment of the relevant condition is as
      a
      result of (a) a breach of a covenant, representation or warranty contained
      in this Agreement by the other and such party has not used commercially
      reasonable efforts to cure such breach prior to the Closing; or (b) a
      breach of Section 17.4.

    


    15.3 Effect
      of Termination.
      In the
      event of termination by reason of Section 15.1 and subject to the terms of
      Section 15.2, this Agreement shall forthwith become void and of no force
      and effect and there shall be no further obligations hereunder on the part
      of
      the parties except for the obligations set forth in Sections 10(g) and
      17.7.

    


    
      
        
        

      

      
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    16. OTHER
      AGREEMENTS.

    


    16.1 Consequences
      of Non-Assignability and Service Agreement. 

    


    (a) Notwithstanding
      anything to the contrary stated in this Agreement, but subject to Subsection
      (b)
      below, if (i) the sale, assignment, transfer or conveyance of any of the
      Assigned Contracts without approval, consent or waiver of another party thereto
      would violate, conflict with, result in a breach or termination of, or
      constitute a default or event of default under (or an event which with due
      notice or lapse of time, or both, would continue a default or event of default
      under) the terms of such Assigned Contract or result in the creation of any
      security interest on any of the Assets under any such Assigned Contract or
      enable another party to such Assigned Contract to terminate the same or impose
      a
      penalty or additional payment obligations or accelerate any obligation of Seller
      or Buyer under any such Assigned Contract, and (ii) all necessary approvals,
      consents and waivers of all parties to such Assigned Contract have not been
      obtained at or prior to the Closing, then (A) this Agreement shall not
      constitute an agreement to assign or assume such Assigned Contract and such
      Assigned Contract shall not be assigned to or assumed by Buyer or be included
      in
      the Assets or the Assumed Liabilities, (B) Seller shall, following the Closing,
      use all reasonable efforts to assist Buyer in attempting to obtain such
      necessary approvals, consents and waivers, (C) Seller and Buyer shall, following
      the Closing, promptly execute all documents necessary to complete the assignment
      and assumption of such Assigned Contract if such approvals, consents and waivers
      are obtained, and (D) unless and until such approvals, consents and waivers
      are
      obtained and such assignment and assumption occurs, Seller and Buyer shall
      cooperate in entering into any reasonable arrangement designed to obtain for
      Buyer all benefits and privileges of such Assigned Contract including the
      holding by Seller of such benefits and privileges in trust for Buyer, while
      protecting Seller from the obligations of Seller first accruing under such
      Assigned Contract after the Closing Date and related to the period of time
      after
      the Closing Date under such Assigned Contract.

    


    (b) Attached
      hereto as Exhibit 16.1 is a service agreement between US Bancorp Piper
      Jaffray and Seller. The parties acknowledge that Section 9 thereof
      prohibits any assignment of such agreement or the subcontracting of services
      to
      be rendered by Seller to any other party, without the prior written consent
      of
      US Bancorp Piper Jaffray, which has not been obtained. Consequently, while
      such
      agreement is listed in Schedule 1.1(g) as an “Assigned Contract,” its assignment
      is subject to the terms of subsection (a) above. Further, Seller shall indemnify
      Buyer pursuant to Section 11 hereof against any claim alleged by US Bancorp
      Piper Jaffray to have been suffered by it as a consequence of such
      subcontracting in violation of the service agreement provided, however, such
      indemnity shall not extend to any failure by Buyer to perform in compliance
      with
      such agreement, with respect to liabilities and obligations arising thereunder
      and relating to services or obligations required to be performed under such
      agreement following the Closing Date, to the extent Buyer has been allowed
      to
      perform by US Bancorp Piper Jaffray. Buyer acknowledges that it has been
      informed by Seller that Seller has given notice to US Bancorp Piper Jaffray
      of
      Seller’s intent to terminate the services agreement, as provided
      therein.

    


    16.2 Non-compete
      Agreements.
      With
      respect to any non-compete, non-disclosure, confidentiality and non-solicitation
      agreements which Seller has executed with former or current employees, both
      parties covenant to reasonably cooperate with one another, regardless of which
      party retains ownership of any such contract, so as to allow the enforcement
      of
      the rights therein granted to Seller for the benefit of both Seller and Buyer,
      to the extent the same is commercially appropriate.

    


    
      
        
        

      

      
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    16.3 Telephony.
      Promptly following Closing, Buyer shall, with Seller’s cooperation, request that
      the providers of the telephony services listed in Schedule 1.1(h) change the
      account information relating thereto, such that Buyer is solely liable to such
      providers for services rendered following the Closing. If such 

    request
      is denied, then notwithstanding anything to the contrary herein, the telephony
      services shall not be transferred to Buyer hereunder.

    


    16.4 Removal.
      Buyer
      shall have 30 days from the Closing Date to remove at its expense any of the
      Assets located at Seller’s leased premises in the Golden Hills Business Park in
      Golden Valley Minnesota. Buyer shall be responsible for repairing any damage
      caused in connection with its removal of any of the Assets. If they are not
      timely removed, Seller shall be entitled to remove such Assets at Buyer’s
      expense.

    


    17. MISCELLANEOUS

    


    17.1 Assignment.
      Neither
      party shall be permitted to assign its rights in this Agreement without the
      prior written consent of the other party. The terms and provisions of this
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto, their successors and permitted assigns, and no person, firm or
      corporation other than the parties, their successors and assigns, shall acquire
      or have any rights under or by virtue of this Agreement. Notwithstanding the
      foregoing, either party shall be permitted to assign this Agreement in
      connection with the sale of substantially all of its assets to a single party,
      or by operation of law, including by merger. 

    


    17.2 Covenant
      of Further Assistance.
      Notwithstanding any provision herein to the contrary, without further
      consideration, the parties shall execute and deliver or make available to one
      another such further instruments, documents and/or files as are necessary to
      effectuate the terms of this Agreement.

    


    17.3 Survival
      of Representations and Warranties.
      All
      representations and warranties contained herein, and all other written
      representations and warranties of Buyer and Seller contained in the instruments
      executed in connection with the consummation of the transactions provided for
      herein, shall survive the execution and delivery of this Agreement and the
      consummation of the transactions contemplated hereby for a period of three
      years.

    


    17.4 Best
      Efforts Prior to Closing.
      Each of
      the parties shall take, or cause to be taken, all other commercially reasonable
      actions and do, or cause to be done, all other commercially reasonable things
      necessary, proper or advisable to permit the completion of the transactions
      contemplated by this Agreement in accordance with the terms hereof and to
      satisfy all the condition precedent to Closing, and shall cooperate with each
      other in connection therewith, including using all commercially reasonable
      efforts to obtain, prior to the Closing Date, any necessary consent to assign
      the Assigned Contracts, although Seller shall not be required to pay any amounts
      or incur any additional obligations in connection with any request it may make
      of any counterparty to the Assigned Contracts, to consent to the assignment
      of
      such contracts.

    


    17.5 Confidentiality;
      Public Announcements.
      The
      parties shall consult in advance on the timing and content of public
      announcements regarding the transactions contemplated under this Agreement,
      and
      subject to applicable law, rule or regulation, all such public announcements
      shall require the consent of the parties, which consent shall not be
      unreasonably withheld. Subject to 

    


    
      
        
        

      

      
        17

        
        

      

      
        
        

      

    

    


    any
      applicable law, rule or regulation, no public announcement shall be made
      concerning the negotiation or execution of this Agreement without the written
      consent of each party, which consent shall not unreasonably
      withheld.

    


    17.6 Notices.
      All
      notices, requests, demand and other communications hereunder shall be in writing
      (except as otherwise agreed upon between the parties as set forth in this
      Agreement), and shall be given by (i) a nationally recognized express
      delivery service which maintains delivery records, (ii) hand delivery, or
      (iii) certified or registered mail, postage prepaid, return receipt
      requested, to the parties at the following addresses, or at such other addresses
      as the parties may designate from time to time by written notice in the above
      manner:

    


    
      	
              If
                to Seller:

            	
              ClearOne
                Communications, Inc.

              1825
                Research Way

              Salt
                Lake City, Utah 84119

              Attention:
                Chief Executive Officer

              Telephone:801-975-7200

              Facsimile:801-977-0087

               

            
	
              With
                a copy to: (such copy not to constitute notice)

            	
              Parsons
                Behle & Latimer

              Attention:
                Geoffrey Mangum

              One
                Utah Center

              201
                South Main Street, Suite 1800

              P.O.
                Box 45898

              Salt
                Lake City, Utah 84145-0898

              Telephone:
                801-532-1234

              Fax:
                801-536-6111

               

            
	
              If
                to Buyer:

            	
              M:Space,
                Inc.

              901
                Marquette Ave. Suite 250

              Minneapolis,
                MN 55402

              Attention:
                Ryan Heining

               

            
	
              With
                a copy to: (such copy not to constitute notice)

            	
              Maslon
                Edelman Borman & Brand, LLP

              Attention:
                Shawn R. McIntee

              90
                South 7th
                Street

              3300
                Wells Fargo Center

              Minneapolis,
                MN 55402

              Telephone:
                612-672-8200

              Fax:
                612-672-8397

               

            


    

    


    17.7 Expenses.
      Except
      as provided in this section, each party to this Agreement shall pay its own
      costs and expenses (including attorneys’ fee and accountants’ fees) incurred in
      connection with the negotiation, execution and performance of this Agreement.
      Any sales, transfer, stamp or other like taxes applicable to the conveyance
      and
      transfer to Buyer of the Assets shall be borne and paid by Seller (in all events
      whether the foregoing are imposed on Buyer or Seller) to Buyer at Closing.
      If
      either party makes any payment of any fees or expenses that are to be borne
      by
      any other party, such other party shall reimburse the party making such payment
      on demand.

    


    
      
        
        

      

      
        18

        
        

      

      
        
        

      

    

    


    17.8 Risk
      of Loss.
      The
      risk of loss or damage by fire or other casualty to the Assets shall be upon
      Seller until the Closing and upon Buyer after the Closing.

    


    17.9 Entire
      Agreement.
      This
      Agreement, including the exhibits and schedules attached to this Agreement,
      constitutes the entire agreement and understanding between Seller and Buyer
      with
      respect to the sale and purchase of the Assets and the other transactions
      contemplated by this Agreement. All prior representations, understandings and
      agreements between the parties with respect to the purchase and sale of the
      Assets and the other transactions contemplated by this Agreement are superseded
      by the terms of this Agreement.

    


    17.10 Choice
      of Law and Venue.
      This
      Agreement shall be construed and interpreted in accordance with the laws of
      the
      State of Minnesota, without regard to its choice of law provisions, as though
      all acts and omissions related to this Agreement occurred in the State of
      Minnesota. All disputes related to or arising under this Agreement must be
      brought in either the United States District Court for the District of Minnesota
      or the State of Minnesota’s Fourth Judicial District Court with each party
      consenting to the exclusive jurisdiction of such courts and waiving any personal
      jurisdiction defenses. Each party hereby (i) waives any objection which it
      might
      have now or hereafter to the foregoing venue of any such litigation, action
      or
      proceeding, (ii) irrevocably submits to the exclusive jurisdiction of any such
      court set forth above in any such litigation, action or proceeding, and (iii)
      waives any claim or defense of inconvenient forum. Each party hereby consents
      to
      service of process by registered mail, return receipt requested, at such party’s
      address set forth in this Agreement (as modified by written notice of a party
      from time to time) and expressly waives the benefit of any contrary provision
      of
      law.

    


    17.11 Injunctive
      Relief.
      The
      parties hereto acknowledge and agree that the other parties would be damaged
      irreparably in the event any of the provisions of this Agreement are not
      performed substantially in accordance with their specific terms. Accordingly,
      each of the parties agrees that the other parties shall be entitled to an
      injunction or injunctions to prevent breaches of the provisions of this
      Agreement and to enforce specifically the substantial performance of this
      Agreement and the terms and provisions hereof.

    


    17.12 Severability.
      The
      provisions of this Agreement shall, where possible, be interpreted so as to
      sustain their legality and enforceability, and for that purpose the provisions
      of this Agreement shall be read as if they cover only the specific situation
      to
      which they are being applied. The invalidity or unenforceability of any
      provision of this Agreement in a specific situation shall not affect the
      validity or enforceability of that provision in other situations or of other
      provisions of this Agreement.

    


    17.13 Counterparts.
      This
      Agreement may be executed in counterparts and by facsimile, each of which shall
      be considered an original.

    


    17.14 Knowledge
      Convention.
      Whenever any statement herein or in any schedule, exhibit, certificate or other
      document delivered to any party pursuant to this Agreement is made “to Seller’s
      or Buyer’s knowledge” or “to the best of Seller’s or Buyer’s knowledge” or words
      of similar intent or effect of any party or its representative, such statement
      shall be deemed to be made to the actual knowledge of a party’s officers at the
      vice president level and above as of the Effective Date. 

    


    
      
        
        

      

      
        19

        
        

      

      
        
        

      

    

    


    


    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed and
      delivered by their duly authorized officers as of the date and year first above
      written.

    


    ClearOne
      Communications, Inc.

    


    /s/
      Mike Keough


    By Mike
      Keough

    


    Its CEO/President

    


    


    M:SPACE,
      Inc.

    


    /s/
      Ryan Heining

     

    By
       Ryan
      Heining

    


    Its President