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[MikeDDKing]

This looks like a long term cost savings with a short term impact.

Form 8-K for UNIVERSAL POWER GROUP INC.


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17-Mar-2009

Entry into a Material Definitive Agreement, Financial Statements and E



Item 1.01: Entry into a Material Definitive Agreement.
On March 11, 2009 (the "Effective Date"), Universal Power Group, Inc. ("UPG" or the "Company") and Stan Battat d/b/a Import Consultants ("Battat") entered into an agreement terminating their relationship regarding Battat's sourcing of batteries and other portable power supply products on UPG's behalf from factories in China. Under the agreement, UPG will pay Battat an aggregate of $2.565 million over a three year period. In exchange therefor, Battat agreed to
(i) terminate his right to receive commissions on purchases UPG made from certain factories in China, (ii) release UPG from its obligations guarantying payments due to Battat from certain factories, (iii) assign to UPG all of his rights as the exclusive North American distributor of products manufactured in China by certain of those factories and (iv) refrain from competing with UPG for a period of three years. The non-compete covers the sale, distribution and marketing of batteries and other portable power supply products and accessories thereto, components of security systems and electric vehicles as well as third party logistical services. It also precludes Battat from doing business with any of UPG's suppliers and customers or hiring UPG employees. In the event Battat breaches the covenant not to compete with UPG, UPG would have the right to terminate the payments due to Battat under the agreement.

UPG expects that the entire $2.565 million due Battat under the agreement over three years will be expensed in the first quarter of 2009. However, the impact of the agreement on the Company's operations and for 2009 may not be material. In 2006, 2007 and 2008, UPG paid Battat $1.4 million, $1.8 million and $2.0 million, respectively, in fees and commissions.

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K .





Item 9.01: Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description
10.1 Agreement, dated March 9, 2009, between Universal Power Group, Inc. and Stan Battat d/b/a Import Consultants