Asset Purchase Agreement


     

      
        

      

    

    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.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      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;

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (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:

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      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: 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      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.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      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

      



      
        
           

          
          

        

        
          18

          
            

          

        

        
          
          

        

      


      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.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      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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