STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of June 10, 2004 by and among TOSHIBA CORPORATION, a Japanese corporation,
acting through its Mobile Communications Company ("Toshiba"), AUDIOVOX
COMMUNICATIONS CORP., a Delaware corporation ("ACC"), and AUDIOVOX CORPORATION,
a Delaware corporation ("Audiovox"). Toshiba, ACC and Audiovox are referred to
herein collectively as the "Parties" and each individually as a "Party".
RECITALS
A. The Parties are currently parties to the agreements set forth on
Schedule A (the "Existing Agreements").
B. Concurrently herewith, Audiovox and ACC are entering into an Asset
Purchase Agreement dated as of the date hereof with UTStarcom, Inc. ("UTSI") and
certain other parties identified therein (the "Asset Purchase Agreement"). The
Asset Purchase Agreement provides for, among other things, ACC's transfer of
certain assets and liabilities to UTSI on the terms and conditions set forth in
such agreement.
C. In connection with the transactions contemplated by the Asset Purchase
Agreement, the Parties wish to enter into this Agreement to provide for
Toshiba's sale of ACC shares to Audiovox, the termination of the Existing
Agreements and the other matters set forth herein, in each case on the terms and
conditions set forth herein.
D. Certain terms used herein have the meanings set forth for such terms in
the text of this Agreement or in Annex I hereto.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties hereby agree as follows:
AGREEMENT
1. Purchase and Sale of the Shares; Payment of the Note.
Subject to the terms and conditions of this Agreement, at the Closing:
1.1 Toshiba shall sell and transfer to Audiovox, and Audiovox shall
purchase from Toshiba, 29.166666 shares (the "Shares") of ACC's Class B Common
Stock, no par value per share.
1.2 ACC shall pay to Toshiba U.S.$8,106,667 as payment in full of the
entire outstanding principal amount of the Non-Negotiable Subordinated
Convertible Promissory Note of ACC dated May 31, 2002 issued to Toshiba (the
"Note"), and all accrued and unpaid interest thereon through and including the
Closing Date (such principal amount and interest are described collectively
herein as the "Note Payment Amount").
Exhibit 99.5
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1.3 The aggregate purchase price for the Shares shall be U.S.$5,483,333
(the "Share Purchase Price"). The Share Purchase Price and the Note Payment
Amount shall be payable in cash at the Closing as provided in Section 2.2.
2. The Closing.
2.1 Closing; Time and Place. The closing of the purchase and sale of the
Shares contemplated by this Agreement shall take place immediately prior to the
UTSI Closing, and the closing of the repayment of the Note contemplated by this
Agreement shall take place concurrently with the UTSI Closing. Such closings
(collectively, the "Closing") shall take place at ACC's offices or at another
place agreed by the Parties. The date and time of the closing of the purchase
and sale of the Shares hereunder are referred to herein as the "Closing Date".
2.2 Closing Deliveries.
(a) By Audiovox. At the Closing, Audiovox shall deliver to Toshiba:
(i)The certificate or certificates described in Section 7.1(c).
(iiThe Share Purchase Price by wire transfer of immediately
available funds to an account specified by Toshiba (for the avoidance
of doubt, such payment shall be made on the UTSI Closing Date).
(b) By ACC. At the Closing, ACC shall deliver to Toshiba the Note
Payment Amount by wire transfer of immediately available funds to an
account specified by Toshiba (for the avoidance of doubt, such payment
shall be made on the UTSI Closing Date), together with a schedule showing
the calculation of interest paid on the Note at the Closing.
(c) By Toshiba. At the Closing, Toshiba shall deliver:
(i)To Audiovox, a certificate representing the Shares (duly
endorsed in blank for transfer or accompanied by a stock power duly
endorsed in blank).
(iiTo ACC, the Note for cancellation upon payment as provided
herein.
(iiTo Audiovox, the certificate described in Section 7.2(c).
2.3 Audiovox and ACC (collectively, the "Interested Parties") and Toshiba
shall each use its respective commercially reasonable efforts to cause all
conditions to the obligations of the Parties at the Closing as contained in
Section 7 to be satisfied.
2.4 In case ACC deducts any U.S. withholding tax amounts from interest
payments to Toshiba on the Note, ACC shall timely pay such taxes and shall
provide Toshiba with official receipt of such payment.
Exhibit 99.5
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3. Representations and Warranties of the Interested Parties.
The Interested Parties hereby jointly and severally represent and warrant
to Toshiba as follows:
3.1 Organization and Related Matters. Each Interested Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware.
3.2 Authority; Enforceability; Effect of Agreement. Each Interested Party
has all necessary corporate power and authority to execute, deliver and perform
this Agreement. This Agreement has been duly authorized by all necessary
corporate action of each Interested Party, and has been duly executed and
delivered by each Interested Party. Assuming the due authorization, execution
and delivery by Toshiba, this Agreement constitutes a valid and legally binding
obligation of each Interested Party, enforceable against each Interested Party
in accordance with its terms.
3.3 No Conflicts.
(a) The execution and delivery by each Interested Party of this
Agreement does not, and the performance by each Interested Party of its
obligations hereunder will not, conflict with or result in any violation of
or default (with or without notice or lapse of time or both) under (i) the
organizational documents of either Interested Party, (ii) any Contract or
Approval to which either Interested Party is a party or is otherwise bound,
or (iii) any Legal Requirement applicable to either Interested Party.
(b) The execution and delivery of this Agreement by each Interested
Party, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby will not require any Approvals of or
with any Person (for the avoidance of the doubt, certain Approvals shall be
required to consummate the UTSI Transactions, as disclosed under the UTSI
Agreements).
3.4 UTSI Agreements. The UTSI Agreements constitute all of the material
Contracts between UTSI and the Interested Parties with respect to the
transactions contemplated by the Asset Purchase Agreement.
3.5 Reduction Items. Neither Interested Party or any of its respective
Affiliates, officers or employees will, directly or indirectly, receive any
payments, benefits or other value in connection with the Reduction Items, except
as contemplated in the definition of Reduction Items. The Reduction Items
payments will be paid in full to the applicable parties at or following the
Closing.
4. Representations and Warranties of Toshiba.
Toshiba hereby represents and warrants to Audiovox and ACC as follows:
4.1 Organization and Related Matters. Toshiba is a corporation duly
incorporated and validly existing under the laws of Japan.
4.2 Authority; Enforceability; Effect of Agreement. Toshiba has all
necessary organizational power and authority to execute, deliver and perform
Exhibit 99.5
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this Agreement. This Agreement has been duly authorized by all necessary
corporate action of Toshiba, and has been duly executed and delivered by
Toshiba. Assuming the due authorization, execution and delivery by each
Interested Party, this Agreement constitutes a valid and legally binding
obligation of Toshiba, enforceable against Toshiba in accordance with its terms.
4.3 No Conflicts.
(a) The execution and delivery by Toshiba of this Agreement does not,
and the performance by Toshiba of its obligations hereunder will not,
conflict with or result in any violation of or default (with or without
notice or lapse of time or both) under (i) the organizational documents of
Toshiba, (ii) any Contract or Approval to which Toshiba is a party or is
otherwise bound, or (iii) any Legal Requirement applicable to Toshiba.
(b) The execution and delivery of this Agreement by Toshiba, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby will not require any Approvals of or with
any Person.
4.4 Ownership of Shares. Toshiba is the record and beneficial holder of the
Shares and will transfer and deliver to Audiovox at the Closing valid title to
the Shares, free and clear of any lien, encumbrance, pledge, interests of third
parties or other claims.
5. Termination of Existing Agreements; Surviving Provisions.
5.1 Except as provided in Section 5.2, effective upon the consummation of
the Closing, each Existing Agreement shall hereby terminate and cease to have
further force or effect, and none of the parties to the Existing Agreements nor
any other Persons shall have any further rights or obligations under any
Existing Agreement.
5.2 Notwithstanding Section 5.1, the following Sections of the Existing
Agreements shall survive the termination of the applicable Existing Agreements
pursuant to Section 5.1 and shall continue in full force and effect from and
after the date of such termination in accordance with their respective terms
(the surviving provisions of the Existing Agreements as set forth in this
Section 5.2 are described herein as the "Surviving Provisions"):
(a) The following Sections of the Securities Purchase Agreement shall
constitute Surviving Provisions: 5.4, 5.5, 5.6, 5.7, 6.1 (subject to the
Parties' acknowledgment that there has been no extension of a statute of
limitation and there has been no notice given by any Party that any
inaccuracy in or breach of any representation or warranty by another Party
has to date occurred with respect to such Section), 6.2, 6.3, 6.4, 6.5, 6.6
(subject to the Parties' acknowledgment that to date no notification under
such Section has been made by any Party), 6.8, 6.9, 6.10, 7.1, 7.2, 7.3,
7.4, 7.5 and 8.
(b) The following Sections of the Stockholders Agreement shall
constitute Surviving Provisions: 4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.1(e) and
8 (except for 8.1).
Exhibit 99.5
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(c) The following Sections of the Distribution Agreement shall
constitute Surviving Provisions: 1.1 and 1.2 (solely to the extent that the
definitions of "Products" and "Toshiba Products" contained in those
Sections are applicable to other Surviving Provisions of the Distribution
Agreement), 9.3, 10 (first sentence only), 13, 15.5, 16.1, 16.2, 16.3,
16.4, 16.5, 17.3(b) and 18.
(d) The following Sections of the Secondment Agreement shall
constitute Surviving Provisions: 4, 6 and 7 (solely to the extent that any
payment obligations of Toshiba and ACC under such Sections have accrued as
of the Closing Date), 8, 11, 12, 13, 14, 15, 16, 17, 18, 19 and 20.
(e) The following Sections of the Service Agreement shall constitute
Surviving Provisions: 3 (solely to the extent that any payment obligations
of Toshiba under such Section have accrued as of the Closing Date), 4, 5,
6, 9 and 10.
6. Releases and Covenants Not to Xxx.
This Section 6 shall become effective only upon the consummation of the
Closing, and not otherwise.
6.1 By the Interested Parties.
(a) Subject to Section 6.1(c), each Interested Party hereby forever
waives and releases each Person in the Toshiba Group of and from any and
all Claims that such Interested Party has, had or may in the future have
against such Person, arising from or related to any act, fact, transaction,
cause, matter, condition, occurrence or event whatsoever occurring or in
existence at or prior to the Closing Date (collectively, the "Interested
Party Released Claims"). For the avoidance of doubt, the Interested Party
Released Claims shall include any Claim (other than as set forth in Section
6.1(c)) arising from or related to any failure or alleged failure by
Toshiba to develop or supply products, any delay or alleged delay by
Toshiba in the development or supply of products, or any failure or alleged
failure by Toshiba to use commercially reasonable efforts, good faith
efforts, best efforts or any other efforts to develop or supply products
(including in each case products described in clause (b) of the definition
of Toshiba Products contained herein).
(b) Each Interested Party shall not, and shall cause each Person of
the Interested Party Group not to, initiate, file, institute, maintain or
proceed upon, or encourage, advise, or voluntarily assist any other Person
to initiate, institute, maintain, or proceed upon, any Interested Party
Released Claim.
(c) The waivers and releases set forth in Section 6.1(a) shall not
apply to or affect, and the Interested Party Released Claims shall not
include:
(i)any Claim arising from or related to Toshiba's obligations
under any Surviving Provision;
(iiany Claim arising from or related to Reserved Third Party
Claims;
(iiany rights of reimbursement for payments made by ACC to
carriers relating to test phone numbers for Toshiba Product models
Exhibit 99.5
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9900 and 9950;
(xxxxx rights of reimbursement to the extent that air freight
charges incurred by ACC and caused by late delivery on Toshiba's part
of units of Toshiba Product model 9900 exceed boat delivery charges
for such units;
(v)any rights of reimbursement for costs incurred by ACC to
purchase items from third parties (such as other manufacturers'
products) at Toshiba's request;
(xxxxx rights of reimbursement for expenses incurred by ACC at
Toshiba's request and relating to printing, artwork, welcome CDs and
manuals for units of Toshiba Product model 9900 provided to Verizon;
or
(xxxxx rights of reimbursement for expenses incurred by ACC at
Toshiba's request and relating to obtaining approval of model 9900 by
Verizon.
For the avoidance of doubt, this Section 6.1(c) shall not be deemed to
expand, reduce or otherwise affect the rights or obligations of any Party or to
create any new rights or obligations with respect to the matters set forth in
paragraphs (i) through (vii) of this Section 6.1(c), other than to preserve
those rights and obligations as they may exist at the Closing Date or in the
future, as applicable. All such preserved rights and obligations shall be
subject to all applicable claims, counterclaims, defenses and other rights of
the Toshiba Group, which shall not be deemed to be waived or otherwise affected
by this Section 6.1(c).
6.2 By Toshiba.
(a) Subject to Section 6.2(c), Toshiba hereby forever waives and releases
each Person in the Interested Party Group of and from any and all Claims that
Toshiba has, had or may in the future have against such Person, arising from or
related to any act, fact, transaction, cause, matter, condition, occurrence or
event whatsoever occurring or in existence at or prior to the Closing Date
(collectively, the "Toshiba Released Claims").
(b) Toshiba shall not, and shall cause each Person of the Toshiba Group not
to, initiate, file, institute, maintain or proceed upon, or encourage, advise,
or voluntarily assist any other Person to initiate, institute, maintain, or
proceed upon, any Toshiba Released Claim.
(c) The waivers and releases set forth in Section 6.2(a) shall not apply to
or affect, and the Toshiba Released Claims shall not include:
(i)any Claim arising from or related to the obligations of either
Interested Party under any Surviving Provision; or
(iiany Claim arising from or related to Reserved Third Party Claims.
For the avoidance of doubt, this Section 6.2(c) shall not be deemed to
expand, reduce or otherwise affect the rights or obligations of any Party or to
create any new rights or obligations with respect to the matters set forth in
paragraphs (i) and (ii) of this Section 6.2(c), other than to preserve those
Exhibit 99.5
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rights and obligations as they may exist at the Closing Date or in the future,
as applicable. All such preserved rights and obligations shall be subject to all
applicable claims, counterclaims, defenses and other rights of the Interested
Party Group, which shall not be deemed to be waived or otherwise affected by
this Section 6.2(c).
6.3 Representations and Warranties. The Interested Parties jointly and
severally represent and warrant that they are the sole owners of, and have not
assigned, sold, transferred, encumbered, hypothecated, or otherwise disposed of,
any of the Interested Party Released Claims or any interest therein. Toshiba
represents and warrants that it is the sole owner of, and has not assigned,
sold, transferred, encumbered, hypothecated, or otherwise disposed of, any of
the Toshiba Released Claims or any interest therein.
6.4 Each Party acknowledges that it may have sustained Losses that are
presently unknown or unsuspected, and that such Losses that may have been
sustained may give rise to additional Losses in the future. Nevertheless, each
Party acknowledges that the terms and conditions set forth in this Section 6
have been negotiated and agreed upon in light of any and all such risks, and
each Party intends hereby to release and discharge any unknown Claims that are
included in the scope of the Interested Party Released Claims (in the case of
the Interested Parties) and the Toshiba Released Claims (in the case of
Toshiba).
6.5 The Parties agree that this Agreement constitutes a compromise
settlement of disputed Claims, and that neither the execution and delivery of
this Agreement nor the waivers and releases set forth in this Section 6 shall be
deemed or construed as an admission by any Party of any liability or
responsibility at any time for any purpose; provided that the obligations of the
Parties set forth in this Section 6 may be pleaded as a full and complete
defense to, and may be used as the basis for an injunction against, any
Proceeding which may be instituted, prosecuted or attempted in breach of this
Section 6.
7. Conditions Precedent to Closing.
7.1 Conditions to the Obligations of Toshiba. The obligation of Toshiba to
take the actions required to be taken by Toshiba at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Toshiba in writing, in whole or in
part):
(a) Representations and Warranties. The representations and warranties
of each Interested Party set forth in this Agreement shall be true and
correct as of the Closing Date with the same effect as though such
representations and warranties had been made at and as of the Closing Date.
(b) Performance. Each Interested Party shall have performed all
obligations and complied in all material respects with all covenants
required under this Agreement to be performed or complied with by it on or
prior to the Closing Date.
(c) Officers Certificate. Audiovox shall have delivered to Toshiba a
certificate or certificates of the Interested Parties executed by an
authorized officer of each Interested Party certifying to the matters set
Exhibit 99.5
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forth in Sections 7.1(a) and 7.1(b).
(d) Consummation of the UTSI Transactions.
(i)There shall have been no modifications or amendments to any
UTSI Agreement as in effect on the date hereof that would materially
change the structure of the UTSI Transactions;
(iiIn case of any modifications or amendments to any UTSI
Agreement as in effect on the date hereof that would result in any
increase in the consideration payable to ACC in the UTSI Transactions,
Audiovox shall have agreed to equitably share such increase with
Toshiba on terms mutually acceptable to Audiovox and Toshiba; and
(iiThe UTSI Transactions shall have been consummated (subject to
modifications and amendments to the USTI Agreements made in compliance
with subsections (i) and (ii)).
(e) Reduction Items. The aggregate Reduction Items payments shall not
be less than U.S.$25,000,000.
(f) No Proceedings. No Proceeding (i) pertaining to the transactions
contemplated by this Agreement or their consummation or (ii) that would
reasonably be expected to have a material adverse impact on the UTSI
Transactions or their consummation shall have been instituted or threatened
on or prior to the Closing Date.
(g) Illegality. No Law shall be in effect which prohibits or restricts
the consummation of the Transactions.
7.2 Conditions to the Obligations of the Interested Parties. The obligation
of each Interested Party to take the actions required to be taken by such
Interested Party at the Closing is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived by
Audiovox in writing, in whole or in part):
(a) Representations and Warranties. The representations and warranties
of Toshiba set forth in this Agreement shall be true and correct as of the
Closing Date with the same effect as though such representations and
warranties had been made at and as of the Closing Date.
(b) Performance. Toshiba shall have performed all obligations and
complied in all material respects with all covenants required under this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
(c) Officers Certificate. Toshiba shall have delivered to Audiovox a
certificate of Toshiba executed by an authorized officer of Toshiba
certifying to the matters set forth in Sections 7.2(a) and 7.2(b).
(d) Consummation of the UTSI Transactions. The UTSI Transactions shall
have been consummated.
(e) No Proceedings. No Proceeding (i) pertaining to the transactions
contemplated by this Agreement or their consummation or (ii) that would
Exhibit 99.5
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reasonably be expected to have a material adverse impact on the UTSI
Transactions or their consummation shall have been instituted or threatened on
or prior to the Closing Date.
(f) Illegality. No Law shall be in effect which prohibits or restricts
the consummation of the Transactions.
8. Survival; Indemnification.
8.1 Survival of Representations and Warranties. The representations and
warranties of the Parties contained in or made pursuant to this Agreement shall
expire one year after the Closing, except that if a claim or notice is given
under Section 8 with respect to any representation or warranty prior to the
applicable expiration date, such representation or warranty shall continue
indefinitely until such claim is finally resolved.
8.2 Indemnification.
(a) Indemnification by the Interested Parties. The Interested Parties
shall jointly and severally indemnify and hold harmless Toshiba and its
employees, Affiliates, representatives, advisors, agents and assigns from
and against any and all Losses as a result of, based upon or arising from:
(i)Any inaccuracy in or breach of any representation or warranty by a
Interested Party contained herein.
(iiAny breach by a Interested Party of, or any failure by a Interested
Party to perform or comply with, any of its obligations contained in this
Agreement.
8.3 Indemnification by Toshiba. Toshiba shall indemnify and hold harmless
the Interested Parties and their respective employees, Affiliates,
representatives, advisors, agents and assigns from and against any and all
Losses as a result of, based upon or arising from:
(a) Any inaccuracy in or breach of any representation or warranty by
Toshiba contained herein.
(b) Any breach by Toshiba of, or any failure by Toshiba to perform or
comply with, any of its obligations contained in this Agreement.
8.4 Indemnification Procedure.
(a) Claims for Indemnification. Whenever any claim shall arise for
indemnification under this Section 8, the indemnified person making such claim
shall promptly notify the indemnifying person in writing of the claim and, when
known, the facts constituting the basis for such claim; provided that failure to
give such notice shall not affect any rights or remedies of the indemnified
person hereunder except to the extent that the indemnifying person is materially
prejudiced thereby.
Exhibit 99.5
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(b) Defense of Third Party Claims. In connection with any Third Party Claim
giving rise to indemnity hereunder and upon request of the indemnified person
seeking indemnification, the indemnifying person at its sole cost and expense
shall assume the defense of any such Third Party Claim and thereafter diligently
conduct the defense thereof with counsel reasonably acceptable to the
indemnified person. The indemnified person shall be entitled to participate in
the defense of any Third Party Claim assumed by an indemnifying person with the
indemnified person's counsel and at its own expense. If the indemnifying person
does not assume the defense of such Third Party Claim within thirty (30) days
after written notice thereof from the indemnified person, and if the indemnified
person elects at its option to assume the defense of the Third Party Claim
itself, the indemnified person may defend against such Third Party Claim in such
manner and on such terms as it may deem appropriate, including but not limited
to settling such claim, such defense to be at the sole cost and expense of the
indemnifying person. Notwithstanding the foregoing, without the prior written
consent of the indemnified person, which shall not be unreasonably withheld, the
indemnifying person shall not consent to the entry of any judgment or enter into
any settlement (or have any liability for Losses with respect thereto) which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to the indemnified persons a release from all liability with respect
to such Third Party Claim.
(c) Reasonable Cooperation. The indemnified persons shall reasonably
cooperate at the indemnifying person's expense in any Proceedings with respect
to any Third Party Claim in respect of which indemnity is provided pursuant to
this Section 8, including, but not limited to, by providing the indemnifying
person with reasonable access to employees and officers (including as witnesses)
and other information.
8.5 Not Exclusive Remedy. This Section 8 shall not be deemed to preclude or
otherwise limit in any way the exercise of any other rights or the pursuit of
any other remedies for the breach of this Agreement or with respect to any
inaccuracy of representations or warranties contained herein.
8.6 No Duplication. No indemnified person shall be entitled to any
duplication of reimbursement or indemnification with respect to any claims which
constitute a breach of more than one representation, warranty, covenant or
agreement contained in this Agreement, provided that such claims are reimbursed
or indemnified to the full extent provided for hereunder.
9. Termination; Effect.
9.1 Termination. This Agreement may be terminated at any time before the
Closing as follows:
(a) Consent of Toshiba and Audiovox. By consent in writing of Toshiba
and Audiovox.
(b) Failure of Closing to Occur. By either Toshiba or Audiovox by
written notice to the other party if the Closing has not occurred by the
first anniversary of the date hereof, other than through the failure of the
terminating Party to comply with its obligations under this Agreement.
(c) Termination of the Asset Purchase Agreement. Automatically without
action by any Party upon termination of the Asset Purchase Agreement.
Exhibit 99.5
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(d) Failure of a Interested Party. By Toshiba, if there has been a
material violation or breach by either Interested Party of any
representation, warranty, covenant or agreement contained in this
Agreement, which violation or breach shall not have been cured or corrected
by the violating or breaching Interested Party within 10 days after receipt
of notice thereof.
(e) Failure of Toshiba. By Audiovox, if there has been a material
violation or breach by Toshiba of any representation, warranty, covenant or
agreement contained in this Agreement, which violation or breach shall not
have been cured or corrected by Toshiba within 10 days after receipt of
notice thereof.
9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.1, (a) no Party shall have any liability to any
other Party in respect of this Agreement, except for any liabilities relating to
(i) any breach of any covenant contained herein occurring prior to such
termination, or (ii) any breach of or inaccuracy in any representation or
warranty occurring prior to such termination, and (b) for the avoidance of doubt
but subject to clause (a) of this Section 9.2, the Parties' execution and
delivery of this Agreement shall be deemed to have no effect on the Parties'
rights and obligations under the Existing Agreements or otherwise.
10. General Provisions.
10.1Governing Law. This Agreement shall be construed and interpreted in
accordance with and governed by the Laws of the State of New York, U.S.A.,
including, without limitation, Section 5-1401 of the General Obligations Law of
the State of New York (without regard to the choice of law provisions thereof).
Judgement upon an award rendered by the arbitrators pursuant to Section 10.2
shall be entered in the courts of the State of New York, and the Parties hereby
submit to the exclusive jurisdiction of such courts for the purpose of any such
entry. The Parties agree and consent that services of process may be made upon
the Parties in any legal proceedings relating hereto by any means allowed under
applicable Law.
10.2Dispute Resolution.
(a) The Parties intend that all disputes between the Parties arising
out of this Agreement that do not involve Claims by or against Third
Parties shall be settled by the Parties amicably through good faith
discussions upon the written request of either Toshiba or Audiovox. In the
event that any such dispute cannot be resolved thereby within a period of
sixty (60) calendar days after such notice has been given, such dispute
shall be finally settled by binding arbitration at the request of Toshiba
or Audiovox.
(b) Each arbitration hereunder shall be conducted in the English
language in New York, New York, and shall be administered by the American
Arbitration Association under its Commercial Arbitration Rules then in
effect, before three (3) independent arbitrators to be appointed as
follows. Toshiba and Audiovox shall each appoint one (1) arbitrator, and
the two (2) arbitrators so appointed shall appoint a third arbitrator in
accordance with paragraph (c) of AAA Rule R-15 (Appointment of Neutral
Arbitrator by Party-Appointed Arbitrators or Parties) currently in effect.
However, in all events, these arbitration provisions shall govern over any
conflicting rules which may now or hereafter be contained in the applicable
rules.
Exhibit 99.5
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(c) Toshiba and Audiovox each may demand arbitration by filing a
written demand with the other Party within one hundred eighty (180)
calendar days after the expiration of the sixty (60) day period described
above. The arbitrators shall have the authority to grant any equitable and
legal remedies that would be available in any judicial proceeding intended
to resolve a dispute, including the termination of this Agreement.
Notwithstanding the foregoing, Toshiba and Audiovox each shall be entitled
to seek preliminary injunctive relief from any court of competent
jurisdiction, pending the final decision or award of the arbitrators. The
award rendered in an arbitration hereunder shall be final and
non-appealable.
10.3Notices and Other Communications. Any and all notices, requests,
demands and other communications required or otherwise contemplated to be made
under this Agreement shall be in writing and in English and shall be provided by
one or more of the following means and shall be deemed to have been duly given
(a) if delivered personally, when received, (b) if transmitted by facsimile, on
the first (1st) Business Day following receipt of a transmittal confirmation, or
(c) if by international courier service, on the third (3rd) Business Day
following the date of deposit with such courier service, or such earlier
delivery date as may be confirmed in writing to the sender by such courier
service. All such notices, requests, demands and other communications shall be
addressed as follows:
If to Toshiba:
Toshiba Corporation
Mobile Communications Company
0-0, Xxxxxxxx 0-xxxxx, Xxxxxx-xx
Xxxxx 000-0000
Xxxxx
Attention: General Manager, Business Planning Division, Mobile
Communications Company
Telephone: (00-0) 0000-0000
Facsimile: (00-0) 0000-0000
If to Audiovox:
Audiovox Corporation
000 Xxxxxx Xxxx.
P.O. Box 18000
Hauppauge, NY 11788-1800
U.S.A.
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Exhibit 99.5
12
If to ACC:
Audiovox Communications Corp.
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
X.X.X.
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxx & Xxxxxx, XXX
Xxxx Xxxxx, 00xx Xxxxx
000 XXX Xxxxx
Xxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address or facsimile number as a Party may have specified to
the other Parties in writing delivered in accordance with this Section 10.3.
10.4Severability. If any provisions of this Agreement shall be held to be
illegal, invalid or unenforceable, the Parties agree that such provisions will
be enforced to the maximum extent permissible so as to effect the intent of the
Parties, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby. If necessary to effect the intent of the Parties, the Parties will
negotiate in good faith to amend this Agreement to replace the unenforceable
language with enforceable language which as closely as possible reflects such
intent.
10.5Amendments. This Agreement may be amended or modified only by a written
instrument signed by each Party.
10.6Waiver. Any waiver by a Party of an instance of another Party's
noncompliance with any obligation or responsibility herein contained shall be in
writing and signed by the waiving Party and shall not be deemed a waiver of
other instances of another Party's noncompliance hereunder.
10.7No Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and permitted assigns
of the Parties. Nothing in this Agreement shall confer any rights upon any
Person other than the Parties and their respective successors and permitted
assigns. No Party may assign this Agreement or its rights hereunder to any
Person without the written consent of the other Parties. No assignment by any
Person of this Agreement or of any of such Person's rights hereunder shall
release such Person from any of its obligations hereunder. Any attempted
assignment of this Agreement in violation of this Section 10.7 shall be void and
of no effect.
Exhibit 99.5
13
10.8Expenses. Each Party shall bear all out-of-pocket costs and expenses
(including, without limitation, attorney's, accountant's and financial advisor's
fees) incurred by it in connection with the negotiation and execution of this
Agreement.
10.9Construction. This Agreement has been negotiated by the Parties and
their respective counsel and shall be fairly interpreted in accordance with its
terms and without any strict construction in favor of or against any Party.
10.10 Interpretation and Construction of this Agreement. Unless the context
shall otherwise require, any pronoun shall include the corresponding masculine,
feminine and neuter forms, and words using the singular or plural number shall
also include the plural or singular number, respectively. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Annexes, Exhibits and
Schedules shall be deemed to be references to Articles and Sections of, and
Annexes, Exhibits and Schedules to, this Agreement unless the context shall
otherwise require. The headings of the Articles and Sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretations of this Agreement. Unless the context shall
otherwise require, any reference to any agreement or other instrument or statute
or regulation is to such agreement, instrument, statute or regulation as amended
and supplemented from time to time (and, in the case of a statute or regulation,
to any successor provision). Any reference in this Agreement to a "day" or a
number of "days" (without the explicit qualification of "Business") shall be
interpreted as a reference to a calendar day or number of calendar days. If any
action or notice is to be taken or given on or by a particular calendar day, and
such calendar day is not a Business Day, then such action or notice shall be
deferred until, or may be taken or given, on the next Business Day.
10.11 Disclaimer of Agency. This Agreement shall not constitute any Party
as a legal representative or agent of any other Party, nor shall a Party have
the right or authority to assume, create or incur any Liability of any kind,
expressed or implied, against or in the name or on behalf of another Party or
any of its Affiliates.
10.12 Language. The Parties have negotiated this Agreement in the English
language, which shall be the governing language of this Agreement.
10.13 Relationship of the Parties. Nothing contained in this Agreement is
intended to, or shall be deemed to, create a partnership or joint venture
relationship among the Parties or any of their Affiliates for any purpose,
including tax purposes. None of the Parties nor any of their respective
Affiliates will take a position contrary to the foregoing.
10.14 Specific Performance. The Parties agree that each other Party shall
be entitled to obtain an injunction or injunctions in accordance with the
dispute resolution procedures contained in Section 10.1 to prevent breaches of
the provisions of this Agreement, or any agreement contemplated hereunder and to
enforce specifically the terms and provisions hereof, in each instance without
being required to post bond or other security, without being required to prove
irreparable harm, and in addition to, and without having to prove the adequacy
of, other remedies at Law.
Exhibit 99.5
14
10.15 Consequential and Other Damages. No Party shall be liable to the
other Party under any contract, negligence, strict liability or other theory for
any indirect, incidental, consequential, punitive or other special damages
(including without limitation lost profits) asserted by the other Party;
provided that this Section shall not be deemed to expand, reduce or otherwise
affect any claims or rights reserved by the Parties under Sections 6.1 and 6.2.
10.16 Entire Agreement. The provisions of this Agreement and the Schedules
and Exhibits hereto set forth the entire agreement and understanding among the
Parties as to the subject matter hereof and supersede all prior agreements, oral
or written, and all other prior communications among the Parties relating to the
subject matter hereof.
10.17 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be binding as of the date first written above,
and all of which shall constitute one and the same instrument. Each such
counterpart shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
[remainder of page intentionally blank]
Exhibit 99.5
15
IN WITNESS WHEREOF, the Parties have caused their respective duly
authorized representatives to execute this Stock Purchase Agreement as of the
date first above written.
TOSHIBA CORPORATION,
a Japanese corporation, acting through its
Mobile Communications Company
By: /s/ Chikahiro Yokota
Name: Chikahiro Yokota
Title: President and CEO, Mobile
Communications Company
AUDIOVOX COMMUNICATIONS
CORP.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
AUDIOVOX CORPORATION,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
1
Annex I
Certain Definitions
"Affiliate" of a specified Person means any Person that controls, is
controlled by or is under common control with such specified Person. For
purposes of this definition, "control" shall mean the possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or other ownership interests, by
contract or otherwise).
"Approval" means, as to any Person, any consent, approval, authorization,
waiver, grant, concession, license, exemption or order of, registration,
certificate, declaration or filing with, or report or notice to, such Person.
"Business Day" means a day on which commercial banks in New York City are
generally open to conduct their regular banking business.
"Claim" or "Claims" means any and all claims, demands, agreements,
Contracts, covenants, representations, warranties, promises, undertakings,
actions, suits, causes of action, obligations, controversies, debts, costs,
expenses, charges, payments, accounts, damages, judgments, losses, injuries and
liabilities, of whatever kind or nature, in law, equity or otherwise, past,
present and future, whether known or unknown, anticipated or unanticipated,
contingent or matured.
"Contract" means any contract, agreement, lease, plan, instrument or other
document, commitment, arrangement, undertaking, practice, understanding or
authorization, in each case whether or not in writing.
"Government Approval" means any Approval of, to or with any Governmental
Authority.
"Governmental Authority" shall mean any federation, nation, state,
sovereign or government, any federal, supranational, regional, state, local or
municipal political subdivision, any governmental or administrative body,
instrumentality, department or agency, or any court, administrative hearing
body, arbitrator, commission or other similar dispute resolving panel or body,
and any other entity exercising executive, legislative, judicial, regulatory or
administrative functions of a government.
"Interested Party Group" means each Interested Party and its past, present
and future parents, subsidiaries, and Affiliates, and each of their past,
present and future constituent members, partners, officers, shareholders,
directors, agents, employees and attorneys, and each of their respective
successors and assigns.
"Laws" means all applicable provisions of all (i) constitutions, treaties,
statutes, laws (including common law), rules, regulations, ordinances or codes
of any Governmental Authority, and
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(ii) orders, decisions, injunctions, judgments, awards and decrees of any
Governmental Authority.
"Legal Requirement" shall mean any federal, state, regional, local,
municipal, foreign or other Law, statute, legislation, constitution, principle
of common law or equity, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, permit, ruling, directive,
pronouncement, requirement (licensing or otherwise), specification,
determination, decision, opinion or interpretation that is, has been or may in
the future be issued, enacted, adopted, passed, approved, promulgated, made,
implemented or otherwise put into effect by or under the authority of any
Governmental Authority.
"Loss" means any Claim, Proceeding, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including, without limitation, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified Person.
"Person" means a natural individual, Governmental Authority, partnership,
firm, corporation or other entity.
"Proceeding" shall mean any action, litigation, arbitration, suit, claim,
proceeding or investigation or review of any nature, civil, criminal, regulatory
or otherwise, before any Governmental Authority.
"Reduction Items" means certain payments by ACC to Xxxxxx Xxxxxxxxxxx and
other employees of ACC pursuant to separate arrangements.
"Reserved Third Party Claims" means any Third Party Claims to the extent
arising from or related to the Toshiba Products.
"Third Party Claims" means any Claim brought by a Person other than a
Person in the Toshiba Group or the Interested Party Group.
"Toshiba Group" means Toshiba and its past, present and future parents,
subsidiaries, and Affiliates, and each of their past, present and future
constituent members, partners, officers, shareholders, directors, agents,
employees and attorneys, and each of their respective successors and assigns.
"Toshiba Products" means those products (a) sold by Toshiba to ACC or
Audiovox prior to the Closing Date or (b) covered by binding purchase orders
accepted by Toshiba under Section 11.1 of the Distribution Agreement after the
date hereof and prior to the Closing Date.
"UTSI Agreements" means the Asset Purchase Agreement and the other
Transaction
3
Agreements (as defined in the Asset Purchase Agreement).
"UTSI Closing" means the closing under the Asset Purchase Agreement.
"UTSI Closing Date" means the date on which the UTSI Closing occurs.
"UTSI Transactions" means the transactions contemplated by the UTSI
Agreements.
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Schedule A
Existing Agreements
1. Securities Purchase Agreement dated as of May 29, 2002 (the "Securities
Purchase Agreement") among Toshiba, Audiovox and ACC
2. Stockholders Agreement dated as of May 29, 2002 (the "Stockholders
Agreement") among Toshiba, Audiovox and ACC
3. Distribution Agreement dated as of May 29, 2002 (the "Distribution
Agreement") between Toshiba and ACC
4. Secondment Agreement dated September 1, 2002 (the "Secondment Agreement")
between Toshiba and ACC
5. Service Agreement dated September 1, 2002 (the "Service Agreement") between
Toshiba and ACC
5
