SHARE PURCHASE AGREEMENT
By and Among
ONKYO EUROPE ELECTRONICS GMBH
ONKYO MALAYSIA SDN. BHD.
ONKYO CORPORATION
and
GLOBAL TECHNOVATIONS, INC.
and
ONKYO AMERICA, INC.
Dated as of June 29, 2000
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT has been entered into as of June 29, 2000 by
and among ONKYO EUROPE ELECTRONICS GMBH, a German corporation, ONKYO MALAYSIA
SDN. BHD., a Malaysian corporation, ONKYO CORPORATION, a Japanese corporation
(individually referred to as the "Seller" and collectively referred to as the
"Sellers"); and GLOBAL TECHNOVATIONS, INC., a Delaware corporation (the "Buyer")
and ONKYO AMERICA, INC., an Indiana corporation ("Onkyo America").
ARTICLE I
RECITALS
(1) Onkyo America is a manufacturer and supplier of high quality
audio speakers (hereinafter referred to as the "Business").
(2) The authorized capital stock of Onkyo America consists of
9,000 common shares and 1,000 preferred shares. 5,900 shares of common
stock and 100 preferred shares are issued and outstanding.
(3) Of the 5,900 authorized, issued and outstanding Onkyo America
common shares, ONKYO CORPORATION owns of record and beneficially 1,770
common shares; ONKYO MALAYSIA SDN. BHD. owns of record and
beneficially 2,065 common shares; and ONKYO EUROPE ELECTRONICS GMBH
owns of record and beneficially 2,065 common shares. The Buyer,
formerly named Top Source Technologies, Inc., owns all of the 100
issued and outstanding preferred shares, which are contingently
convertible (subject to adjustment) into 151.27 new issue common
shares of Onkyo America.
(4) ONKYO CORPORATION owns a controlling interest in the capital
stock of ONKYO EUROPE ELECTRONICS GMBH and ONKYO MALAYSIA SDN. BHD.
(5) The Buyer, in reliance upon the representations, warranties
and covenants of the Sellers set forth herein, desires to purchase all
(but not less than all) of the 5,900 Onkyo America shares owned by the
Sellers (the "Purchased Shares") and the Sellers desire to sell,
transfer and convey their Purchased Shares to the Buyer at Closing on
the terms and conditions set forth in this Agreement.
(6) The Sellers, in order to induce the Buyer to execute and
deliver this Agreement and to purchase the Purchased Shares from
the Sellers and consummate the other transactions contemplated hereby
and as an essential element hereof, desire to enter into certain
covenants with the Buyer in order to protect the goodwill of Onkyo
America from certain competitive and other activities.
(7) Capitalized terms used herein shall have the meanings set
forth in Article II. ----------
In consideration of the covenants, representations, warranties, and
mutual agreements herein contained, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Buyer, Onkyo
America and the Sellers hereby agree as follows:
ARTICLE II
DEFINITIONS
As used in this Agreement, the following capitalized words and terms
have the meanings indicated below:
"Adverse Claim" has the meaning contained in Section 8.1-102 of the
Indiana Uniform Commercial Code.
"Agreement" shall mean this Share Purchase Agreement, by and among the
Buyer and the Sellers, dated June 29, 2000 as amended or modified from time to
time in accordance with the applicable provisions hereof.
"Balance Sheet Date" has the meaning specified in Section 5.05.
"Business" has the meaning specified in the Recitals hereto.
"Buyer" has the meaning specified in the first paragraph of this
Agreement.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liabilities Act of 1980, as amended.
"Claim" or "Claims" has the meaning specified in Section 12.01.
"Closing" has the meaning specified in Article IV.
"Closing Date" has the meaning specified in Article IV.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Computer Software" means all computer source codes, object codes,
programs, data files, and other software (including both applications software
and operating software), including all machine readable code, printed listings
of code documentation, and related property and information relating to the
Business, including licenses and other rights to use Computer Software of third
parties.
"Counsel for the Buyer" or the "Buyer's Counsel" shall mean Xxxxxxx
Xxxxxx, P.A.
"Counsel for the Sellers" or the "Sellers' Counsel" shall mean Akai Law
Offices.
"Earn-Out Payment" or "Earn-Out Payments" shall mean the payments to be
made pursuant to Schedule 3.02(b).
"Earn-Out Formula" shall mean the formula used to calculate the
Earn-Out Payments set forth in Schedule 3.02 (b).
"EBITDA" shall mean Onkyo America's income after crediting all
management or other fees paid to the Buyer and before all interest, federal,
state and other income taxes, interest, depreciation and amortization computed
in accordance with GAAP.
"Employee Plans" has the meaning specified in Section 5.17(a).
"Employee Pension Benefit Plan" has the meaning specified in Section
5.17(a).
"Employee Welfare Benefit Plan" has the meaning specified in Section
5.17(a).
"Environmental Claims" means all accusations, allegations,
investigations, warnings, notice letters, notices of violations, Liens, orders,
Claims, demands, suits or administrative or judicial actions for any injunctive
relief, fines, penalties, or any damage, including without limitation personal
injury, property damage (including any depreciation of property values), lost
use of property, natural resource damages, or environmental response costs
arising out of Environmental Conditions or under Environmental Requirements.
"Environmental Conditions" means the state of the environment,
including natural resources (e.g., flora and fauna), soil, surface water, ground
water, any present or potential drinking water supply, subsurface strata or
ambient air, relating to or arising out of the use, handling, storage,
treatment, recycling, generation, transportation, spilling, leaking, pumping,
pouring, injecting, emptying, discharging, emitting, escaping, leaching,
dumping, disposal, release, or threatened release of Hazardous Materials,
whether or not yet discovered which could or does result in Environmental
Claims. With respect to Environmental Claims by third parties, Environmental
Conditions also include the exposure of persons to Hazardous Materials at the
work place or the exposure of persons or property to Hazardous Materials
migrating or otherwise emanating from, to, or located at, under, or on the Owned
Premises and/or Leased Real Property.
"Environmental Expenses" means any liability (including strict liability),
loss, cost, penalty, fine, punitive damages, encumbrance, or expense relating to
any Environmental Claim or Environmental Conditions, or incurred in compliance
with any Environmental Requirements, including without limitation the costs of
investigation, cleanup, remedial, monitoring, corrective, or other responsive
action, compliance costs, settlement costs, lost property value, and related
legal and consulting fees and expenses.
"Environmental Requirements" means all present and future laws, rules,
regulations, ordinances, codes, policies, guidance documents, approvals, plans,
authorizations, licenses, permits issued by all government agencies,
departments, commissions, boards, bureaus, or instrumentalities of the United
States, all states and political subdivisions thereof, and any foreign
government body, and all judicial, administrative, and regulatory decrees,
judgments, and orders relating to human health, pollution, or protection of the
environment (including ambient air, surface water, ground water, land surface,
or surface strata), including (i) laws relating to emissions, discharges,
releases, or threatened releases of Hazardous Materials, and (ii) laws relating
to the identification, generation, manufacture, processing, distribution, use,
treatment, storage, disposal, recovery, transport, or other handling of
Hazardous Materials, (iii) CERCLA, the Toxic Substances Control Act, as amended,
the Hazardous Materials Transportation Act, as amended, RCRA, the Clean Water
Act, as amended, the Safe Drinking Water Act, as amended, the Clean Air Act, as
amended, the Atomic Energy Act of 1954, as amended and the Occupational Safety
and Health Act, as amended; and (iv) all analogous laws promulgated or issued by
any federal, state, or other governmental authority or foreign governmental
body.
"Equipment and Machinery" means (i) all personal property owned by
Onkyo America, including without limitation the equipment, machinery, furniture,
fixtures and improvements, computer hardware, tooling, spare parts, supplies,
and vehicles owned or leased by Onkyo America (including all leases of such
property), (ii) any rights of Onkyo America to warranties applicable to the
foregoing (to the extent assignable), and licenses received from manufacturers
and the Sellers of any such item, and (iii) any related Claims, credits, and
rights of recovery with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"Europe" shall mean Ireland, United Kingdom, Portugal, France, Spain,
Netherlands, Germany, Belgium, Luxemburg, Switzerland, Italy, Norway, Sweden,
Finland, Austria, Poland and the Czech Republic, Russia, Hungary, Romania,
Bulgaria, Monaco and all other countries or principalities located in whole or
in part within the continent of Europe.
"Finished Products" means products into which speakers are incorporated
and that are ultimately sold or re-sold in substantially such form to consumers
or and users (including corporations or other entities for their own use).
"GAAP" means generally accepted accounting principles in the United
States, in effect from time to time, consistently applied.
"Government Entity" or "Government Entities" means any court,
government agency, department, commission, board, bureau or instrumentality of
the United States, any local, county, state or federal or political subdivision
thereof, or any foreign governmental body of any kind.
"Hazardous Materials" means (i) any substance that is or becomes
defined as a "hazardous substance," "hazardous waste," "hazardous materials,"
pollutant, or contaminant under any Environmental Requirements, including
CERCLA, XXXX, RCRA, and any analogous federal, state, local or foreign law; (ii)
petroleum (including crude oil and any fraction thereof); and (iii) any natural
or synthetic gas (whether in liquid or gaseous state).
"Home Audio Products" means electronic home audio products, home
theater speakers and home stereo speakers.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning specified in Section 12.03(a).
"Indemnifying Party" has the meaning specified in Section 12.03(a).
"Intellectual Property" means all United States and foreign patents and
patent applications (whether utility, design, or plant product), registered and
unregistered trademarks, service marks, trade names including the names "Onkyo
America", logos, brands, business identifiers, private labels, trade dress
(including all goodwill and reputation symbolized by any of the foregoing),
rights of publicity, processes, industrial designs, inventions, registered and
unregistered copyrights and copyright applications, product formulas, know-how,
trade secrets, confidential information that is not a trade secret, and Computer
Software, and all rights with respect to the foregoing, and all other
proprietary rights that Onkyo America or any of the Sellers owns, licenses, or
possesses the right to use in the conduct of the Business.
"Interim Financial Statements" has the meaning specified in Section
5.05.
"Law" means any local, county, state, federal, foreign or other law,
statute, regulation, ordinance, rule, order, decree, judgment, consent degree,
settlement agreement or governmental requirement enacted, promulgated, entered
into, or imposed by a Governmental Entity.
"Leased Real Property" has the meaning specified in Section 5.12.
"Lien" or "Liens" means any mortgage, pledge, security interest,
encumbrance, lien (statutory or other), option, easement, right-of-way, charge,
or conditional sale agreement.
"Material Contracts" means all contracts, agreements, and other
arrangements, whether oral or written, to which Onkyo America is a party as to
which the breach, non-performance, failure to renew, or cancellation could have
a Material Adverse Effect on the Business, financial condition, assets,
operations, or future prospects of Onkyo America.
"Material Adverse Change" or "Material Adverse Effect," when used with
respect to the Sellers or the Buyer, means a material adverse change or material
adverse effect on the assets, operations, business, future prospects, or
financial condition of Onkyo America, as the case may be. In determining whether
a fact or failure to disclose a fact is material, the principles of Securities
and Exchange Commission Staff Accounting Bulletin 99 shall be applicable.
"Onkyo Group" shall mean Onkyo Japan and those other companies that
ONKYO CORPORATION owns, in whole or in part, but excludes Onkyo America.
"Onkyo Group Speakers" shall mean automotive speakers, office equipment
speakers, television speakers and telephone speakers manufactured or assembled
by or for a member of the Onkyo Group; provided, however, that Onkyo Group
Speakers shall not include (A) Home Audio Products and (B) any speakers
contained in Finished Products which are manufactured or assembled, outside the
Territory and delivered into the Territory.
"Ordinary Course of Business" or "Business in the Ordinary Course"
means the ordinary course of business for the business consistent with past
practices.
"Owned Premises" has the meaning specified in Section 5.11.
"Party" or "Parties" means the Sellers, Onkyo America and/or the
Buyer.
"Person" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust, or
unincorporated organization, or any governmental agency, officer, department,
commission, board, bureau, or instrumentality thereof.
"Personnel" of a Party means the officers, employees and/or agents of
that Party.
"Policy" and "Policies" have the meanings specified in Section 5.21.
"Proceedings" shall have the meaning specified in Section 5.15(b).
"Purchase Price" has the meaning specified in Section 3.02.
"Purchased Shares" has the meaning specified in the Recitals hereto.
"RCRA" means the Resource Conservation and Recovery Act, as amended.
"Real Property Leases" has the meaning specified in Section 5.12.
"XXXX" means the Superfund Amendments and Reauthorization Act, as
amended.
"Seller" and "Sellers" has the meaning specified in the first paragraph of
this Agreement.
"Tax" or "Taxes" means all federal, state, local, or foreign taxes
(including excise taxes, occupancy taxes, environmental taxes, employment taxes,
unemployment taxes, ad valorem taxes, customs duties, transfer taxes, and fees),
levies, imposts, fees, impositions, assessments, registration, or other
governmental charges of any nature imposed upon a Person including all taxes or
governmental charges imposed upon any of the personal properties, real
properties, tangible or intangible assets, income, profits, receipts, payrolls,
transactions, stock transfers, capital stock, net worth or franchises of a
Person (including all sales, use, transfer, registration, value added,
alternative or add on minimum, estimated withholding or other taxes of any kind
whatsoever which a Person is required to collect and/or pay over to any
government), and all related additions to tax, penalties or interest thereon
whether or not disputed.
"Tax Returns" means any return, declaration, report, Claim for refund,
information return, or other document or amendment to any of the foregoing
(including any schedules, attachment related or supporting information) filed or
required to be filed with any governmental agency, department, commission,
board, bureau, or instrumentality in connection with the determination,
assessment, collection, or administration of any Taxes.
"Promissory Note" has the meaning set forth in Section 3.02(a)(ii).
ARTICLE III
PURCHASE AND SALE
Section 3.01. Purchase and Sale. Subject to the terms and conditions
herein set forth in this Agreement, on the Closing Date, ONKYO CORPORATION shall
sell its 1,770 Purchased Shares and ONKYO MALAYSIA SDN. BHD. shall sell its
2,065 Purchased Shares and ONKYO EUROPE ELECTRONICS GMBH shall sell its 2,065
Purchased Shares, and the Buyer shall purchase from the Sellers all (but not
less than all) of such Purchased Shares. The Purchased Shares are being sold,
assigned and transferred by the Sellers to the Buyer pursuant to the terms and
conditions of this Agreement, free and clear of all Liens, Adverse Claims or
other rights of any other Person.
Section 3.02. Purchase Price. The purchase price ("Purchase Price") to
be paid by the Buyer to the Sellers for their Purchased Shares shall be as
follows:
(a) $25,000,000 in United States dollars payable as follows:
(i) $17,000,000 by federal funds wire transfer on the Closing
Date as follows:
(A) $8,750,000 shall be paid to ONKYO MALAYSIA SDN. BHD. and;
(B) $8,250,000 shall be paid to ONKYO EUROPE ELECTRONICS GMBH;
and
(ii) a $7,500,000 promissory note payable to ONKYO CORPORATION and
a $500,000 promissory note payable to ONKYO EUROPE ELECTRONICS
GMBH (collectively the "Promissory Notes"), the form of which
is attached hereto as Exhibit 3.02 (a)(ii), which Promissory
Notes shall be payable in United States dollars. The
Promissory Notes shall accrue interest commencing on the
Closing Date at the United States Federal Funds rate as of the
Closing Date and shall provide for payment in two installments
on a pro-rata basis based upon the respective percentages of
the principal of each Promissory Note held by each Seller as
applicable. The first payment shall consist of principal in
the amount of $3,000,000 plus accrued interest from the
Closing Date and be paid on March 31, 2002. The second payment
shall consist of principal of $5,000,000 plus accrued interest
from the Closing Date and be paid on March 31, 2003.
(b) A contingent purchase price of up to $15,000,000 in United States
dollars representing additional Earn-Out Payments, based on the Earn-Out Formula
set forth in Schedule 3.02(b) derived from the EBITDA of Onkyo America for the
period from October 1, 2000 to September 30, 2005, which Earn-Out Payments shall
be paid to and allocated among the Sellers in proportion in their ownership of
the Purchased Shares as of the date of this Agreement. The Earn-Out Payment for
the period from October 1, 2000 to September 30, 2004 shall be paid to the
Sellers in a single payment on or before November 30, 2005, without interest,
and the Earn-Out Payment for the period from October 1, 2004 to September 30,
2005 shall be paid on December 30, 2005, without interest.
Section 3.03. Manner of Payment of Purchase Price. (a) The Buyer shall
transmit the amounts set forth in Section 3.02 by wire transfer or by such other
means as may be mutually agreed to by the Sellers and the Buyer at Closing.
Unless otherwise agreed, the Sellers shall provide the Buyer with wire transfer
instructions prior to Closing. In addition, at the Closing the Buyer shall issue
and deliver to ONKYO CORPORATION and ONKYO EUROPE ELECTRONICS GMBH the
Promissory Notes in the original principal amount of $7,500,000 and $500,000,
respectively.
ARTICLE IV
CLOSING
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Ice Xxxxxx, Indianapolis, Indiana,
on July 31, 2000, or as soon as practicable thereafter, provided all the
conditions specified in Article VIII, IX and X have been satisfied or waived, or
at such other place and time, or on such other date, as may be mutually agreed
to by the Parties (the "Closing Date"). In conjunction with the Closing, Onkyo
America shall redeem the preferred shares owned by the Buyer for its original
purchase price and accrued dividends. At the Closing, the Buyer, Onkyo America,
and the Sellers shall deliver to each other updated Schedules dated as of a date
not more than two days prior to the Closing Date which Schedules shall be
contained in certificates signed by the Buyer, Onkyo America, or the Sellers, as
the case may be; provided, however that any representations and warranties made
by the Sellers with respect to such Schedules or any information contained
therein shall be made "to the knowledge of the Sellers" as that term is defined
in Section 5.27.
ARTICLE V
REPRESENTATIONS AND WARRANTIES ONKYO AMERICA AND OF THE SELLERS
As a material inducement to the Buyer to enter into this Agreement and
all other agreements and documents executed by the Buyer in connection with this
Agreement and to consummate the transactions contemplated hereby and such
related agreements, Onkyo America and the Sellers hereby jointly and severally
represent and warrant to the Buyer as follows, which representations and
warranties are true, correct and complete as of the date of this Agreement and
will be true, correct and complete as of the Closing Date (all representations
and warranties by the Sellers are "to the knowledge of the Sellers" as that term
is defined in Section 5.27):
Section 5.01. Title to Shares. Each Seller is the sole and exclusive
record and beneficial owner of that number of the Purchased Shares as is set
forth in Article I of this Agreement. The Sellers possess good and merchantable
title to the Purchased Shares, and own the Purchased Shares free and clear of
any and all Taxes, security interests, options, warrants, purchase right or
other contract or commitment that could require any of the Sellers to sell,
transfer, or otherwise dispose of any capital stock of any of the Sellers (other
than this Agreement), agreements, restrictions, Claims, Liens, pledges and
encumbrances of any nature or kind. The Sellers are not a party to any voting
trust, proxy or other agreement or understanding with respect to the voting of
any of the Purchased Shares. The Sellers have the absolute and unconditional
right to sell, assign, transfer and deliver the Purchased Shares to the Buyer in
accordance with the terms of this Agreement. No transfer or other Taxes shall be
included by the Buyer in connection with the acquisition of the Purchased
Shares.
Section 5.02. Authority of the Sellers; Validity of Agreement. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby by each Seller does not, and will not,
violate any provisions of the articles of incorporation or bylaws (or similar
documents) of the Sellers or Onkyo America, or violate any provision of, or
cause a default under, or result in the acceleration of any obligation under,
any agreement, instrument, lease, Lien, judgment, statute, Law, rule, or
regulation to which any of the Sellers or Onkyo America are a party, or by which
the Sellers or Onkyo America or the property of any Seller or Onkyo America may
be bound or affected, or conflict with or result in any breach of any of the
terms, conditions, or provisions of, or constitute a default (or give rise to
any right of termination), cancellation, or acceleration under, or result in the
creation of any Lien, security interest, charge, or encumbrance upon any of the
assets of Onkyo America under any note, indenture, mortgage, lease, agreement,
contract, purchase order, or other instrument or document to which Onkyo America
is a party or by which it or any of its assets is bound or affected, except as
set forth in Schedule 5.02 which shall be waived at or before Closing. Each of
the Sellers have the legal right and power to enter into this Agreement and to
carry out the transactions herein contemplated except for the agreements set
forth in Schedule 5.02 which shall be waived at or before Closing. This
Agreement, when executed, will constitute a legal, valid, and binding agreement
of the Sellers enforceable against the Sellers in accordance with its terms
subject only to any applicable bankruptcy, insolvency, or other Laws affecting
creditors' rights generally. The execution and delivery of this Agreement and
the performance of the Sellers' obligations hereunder have been duly authorized
by all necessary actions on the part of the Sellers and no other corporate or
other proceedings on the part of the Sellers are necessary to authorize their
execution, delivery, and performance. This Agreement has been duly executed and
delivered by the Sellers and constitutes their valid and binding obligation,
enforceable against each of them in accordance with its terms.
Section 5.03. Corporate Organization and Qualification. Onkyo America
is a corporation duly organized and validly standing under the Laws of the State
of Indiana. Each of Onkyo America and its subsidiary referred to in Section
5.08, are duly authorized to conduct business and in good standing under the
Laws of each jurisdiction where such qualification is required. Each of the
Sellers is duly organized and validly standing under the jurisdictions of its
organization. Except as specified on Schedule 5.03 attached hereto, Onkyo
America has all requisite corporate power and corporate authority and all
governmental licenses, authorizations, permits, consents and approvals to own,
lease and operate its properties and to carry on the Business conducted by and
in which it proposes to engage. Copies of Onkyo America's articles of
incorporation and bylaws, including all amendments thereto, have been provided
to the Buyer.
Section 5.04. Governmental Consents. Except as set forth on Schedule
5.04 attached hereto, no authorization, consent, approval exemption or other
action by or notice to or filing with any Person, or with any court or
administrative or governmental body is required to permit the Sellers to execute
and deliver this Agreement, to consummate the transactions contemplated by this
Agreement, to comply with and fulfill the terms and conditions of this
Agreement, or to sell the Purchased Shares to the Buyer.
Section 5.05. Financial Statements. Attached hereto as Schedule 5.05
are true and complete copies of (a) the audited balance sheets of Onkyo America
as of December 31, 1999, and the related statements of income, stockholders'
equity and cash flow for each of the three years in the period ended December
31, 1999, together with the notes thereto and the audit report thereon of
Deloitte & Touche, LLP, certified public accountants, and (b) the unaudited
balance sheet of Onkyo America as of April 30, 2000 ("Balance Sheet Date") and
statements of income, stockholders' equity and cash flow for the periods ended
April 30, 1999 and 2000 (the unaudited balance sheet, and statements of income,
stockholders' equity and cash flow are collectively referred to as the "Interim
Financial Statements"). All financial statements described by this Section 5.05
have been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby (except that Interim Financial Statements may not
include footnote disclosures required by GAAP), are true and correct and present
fairly the financial position of Onkyo America as of the respective dates
thereof and the results of Onkyo America's operations, stockholders' equity and
cash flows for the periods then ended.
Section 5.06. Absence of Certain Changes or Events. Except as set forth
on Schedule 5.06, since the Balance Sheet Date, Onkyo America has operated its
Business in the Ordinary Course consistent with past practice and there has not
been any:
(a) Material Adverse Change in the assets, operations, business, prospects
or financial condition of Onkyo America;
(b) (i) increase in the compensation payable or to become payable to any
Personnel engaged in the Business of more than $25,000, (ii) bonus, incentive
compensation, service award or other like benefit granted, made, or accrued,
contingently or otherwise, for or to the credit of any Personnel engaged in the
Business of an amount which is more than $50,000, (iii) employee welfare,
pension, retirement, profit-sharing, or similar payment or arrangement made or
agreed to by Seller for any Personnel engaged in the Business other than in the
Ordinary Course of Business, or (iv) new employment agreement with any Personnel
engaged in the Business to which Seller is a Party;
(c) addition to or modification of the Employee Plans, arrangements, or
practices described in Schedule 5.17 or Section 5.20 other than (i) the
extension of coverage to other employees of Seller who became eligible after the
Balance Sheet Date, or (ii) changes required by law;
(d) sale, lease, assignment, or transfer outside of the Ordinary Course of
Business of any of the assets of Onkyo America material to the Business, singly
or in the aggregate;
(e) capital expenditure or the execution of any lease or any incurring of
liability therefor in connection with the Business involving payments in excess
of $50,000;
(f) failure to operate Onkyo America or the Business in the Ordinary Course
of Business or to preserve the Business intact, to keep available to the Buyer
the services of the Personnel and to preserve for the Buyer the goodwill of the
Sellers' suppliers, customers, and others having business relations with it,
except where such failure would not have a Material Adverse Effect;
(g) change in accounting methods or practices;
(h) damage, destruction, or loss (whether or not covered by insurance)
adversely affecting the Business or any the assets or properties of Onkyo
America;
(i) declaration, setting aside, or payment of dividends or distributions in
respect of any outstanding securities of Onkyo America, any redemption,
purchase, or other acquisition of any of Onkyo America's outstanding securities,
or any other payments, including the payment of any amounts due on obligations
of Onkyo America to its shareholders except as disclosed on Schedule 5.06(i);
(j) issuance or commitment to issue any shares or other equity securities
of the Seller or obligations or securities convertible into or exchangeable for
shares or other equity securities of the Seller;
(k) indebtedness incurred for borrowed money or any commitment to borrow
money by Onkyo America, or any loans made or agreed to be made by Onkyo America,
or any guarantee, assumption, endorsement of, or other assumption of an
obligation by Onkyo America with respect to any liabilities or obligations of
any other Person;
(l) incurrence of any liability involving $50,000 or more (excluding
liability under purchase orders), or any increase or change in any assumptions
underlying or methods of calculating any bad debt, contingency, or other
reserves of Onkyo America except as disclosed on Schedule 5.05;
(m) issuance of any purchase order, or group of related purchase orders
except purchases of inventory, for an amount in excess of $100,000;
(n) any cancellation of any indebtedness, or waiver of any rights having a
value of $50,000 or greater to the Seller on the Business whether or not in
payment, discharge, satisfaction, or compromise of any liabilities or contingent
liabilities other than the payment, discharge, or satisfaction (i) in the
Ordinary Course of Business and consistent with past practice of liabilities
reflected or reserved against in the Interim Financial Statements or incurred in
the Ordinary Course of Business and consistent with past practice since the
Balance Sheet Date, and (ii) other liabilities or contingent liabilities
involving $50,000 or less;
(o) failure to repay any material obligations, except where such failure
would not have a Material Adverse Effect on the Seller;
(p) contracts, agreements, commitments, leases or licenses (or series of
related agreements with respect to any of the foregoing) that have been or may
be accelerated, terminated, modified or cancelled by Onkyo America or any Person
as a direct result or resulting from execution of this Agreement or the
consummation of the transactions contemplated herein, or
(q) any agreement by Onkyo America or the Sellers to do any of the
foregoing.
Section 5.07. Capital Structure of Onkyo America and Related Matters.
The total authorized capital stock of Onkyo America consists of 9,000 shares of
common stock and 1,000 shares of preferred stock, all without par value. As of
the date of this Agreement, 2,065 common shares are issued and outstanding and
owned beneficially and of record by ONKYO MALAYSIA SDN. BHD., 2,065 common
shares are issued and outstanding and owned beneficially and of record by ONKYO
EUROPE GMBH, and 1,770 common shares are issued and outstanding and owned
beneficially and of record by ONKYO CORPORATION. 100 preferred shares are owned
by the Buyer (formerly named Top Source Technologies, Inc.). All of such shares
have been duly authorized and issued by Onkyo America and are fully paid and
non-assessable. Other than the contingent right of the Buyer to convert its 100
preferred shares into an aggregate of 151.27 new issue common shares of Onkyo
America (subject to adjustment), there are no outstanding options, warrants or
other rights of any kind to acquire any shares of capital stock of Onkyo
America, or securities convertible into, or exchangeable for, or which otherwise
confer on the holder thereof any right to acquire any shares of capital stock of
Onkyo America, nor is Onkyo America legally committed to issue any such option,
warrant right or security.
Section 5.08. Subsidiaries. Onkyo America has a wholly-owned Michigan
subsidiary, Onkyo America Specialty Products, Inc. Onkyo America has no other
subsidiaries and holds no equity interest in any other Person.
Section 5.09. Tax Matters. Onkyo America has timely filed all Tax
Returns required to have been filed with any federal, state, local, or foreign
taxing authority and has paid all Taxes shown to be due and payable on the Tax
Returns. Onkyo America has set up reserves or accruals on the Financial
Statements and Interim Financial Statements which are adequate for the payment
of all Taxes for all periods through the Closing Date. No taxing authority has
asserted any Claim against Onkyo America for the assessment of any additional
tax liability or initiated any action or proceeding which could result in such
an assertion. Onkyo America has made all withholding of Taxes required to be
made under all applicable federal, state and local laws and regulations with
respect to compensation paid to employees, and the amounts withheld have been
properly paid over to the appropriate authorities. The federal Tax Returns of
Onkyo America have been audited for or through December 31, 1997, and there have
been no waivers or extensions by Onkyo America of statutes of limitations with
respect to Taxes except Onkyo America has obtained extensions of state and
federal tax returns for 1999.
Section 5.10. Absence of Undisclosed Liabilities. Except as set forth
on Schedule 5.10, Onkyo America has no material indebtedness or liability which
is not shown on the Interim Financial Statements or provided for thereon, other
than liabilities incurred or accrued in the Ordinary Course of Business since
the Balance Sheet Date.
Section 5.11. Real Property. Schedule 5.11 contains a list and brief
description of all real property owned by Onkyo America and used in connection
with the Business, and all improvements located thereon, fixtures contained
therein and appurtenances attached thereto (collectively, the "Owned Premises").
Onkyo America has never owned any other real property. Onkyo America has good
and marketable title to the Owned Premises, free and clear of all Liens (other
than the lien, if any, of the current property taxes not in default) and owns
all improvements (including buildings and other structures) except as set forth
in Schedule 5.11. There are no pending or threatened condemnation proceedings
relating to any of the Owned Premises. Except as set forth on Schedule 5.11,
none of the Owned Premises is subject to sublease or grant to any Person of any
right to the use, occupancy, or enjoyment of the property or portion thereof.
The Owned Premises is not subject to any use restrictions, exceptions,
reservations, limitations, which in any material respect interfere with or
impair the present and continued use thereof in the Ordinary Course of Business.
Section 5.12. Leased Real Property. Schedule 5.12 sets forth a list of
all real property in which Onkyo America has a leasehold interest (each a "Real
Property Lease" and collectively the "Real Property Leases" and the property
covered by those Real Property Leases being referred to herein as the "Leased
Real Property"). Onkyo America and the Sellers have made true and complete
copies of all Real Property Leases available to the Buyer. Except as set forth
on Schedule 5.12, Onkyo America is not in material breach of or material default
under any Real Property Lease, neither Onkyo America nor any of the Sellers is
aware of any material breach of or material default under any Real Property
Lease, and no party to any Real Property Lease has given Onkyo America written
notice of or made a Claim with respect to any breach or default thereunder.
Except as set forth on Schedule 5.12, none of the Leased Real Property is
subject to any sublease or grant to any Person of any right to the use,
occupancy, or enjoyment of the property or any portion thereof. Except as set
forth on Schedule 5.12, the Leased Real Property is not subject to any Liens
(other than the lien, if any, of current property taxes and assessments not in
default). The Leased Real Property is not subject to any use restrictions,
exceptions, reservations, or limitations which in any material respect interfere
with or impair the present and continued use thereof in the Ordinary Course of
Business. There are no pending or threatened condemnation proceedings relating
to any of the Leased Real Property.
Section 5.13. Equipment and Machinery.
(a) Schedule 5.13 sets forth a list of, or otherwise describes, all
material equipment and machinery held for or used in the Business. Except as set
forth in Schedule 5.13, Onkyo America has good title, free and clear of all
material Liens (other than the lien, if any, of current property taxes and
assessments not in default) to the listed Equipment and Machinery, owned by it.
Onkyo America holds good and transferable leasehold interests in all Equipment
and Machinery leased by it, in each case under valid and enforceable leases
which are listed on Schedule 5.13.
(b) All Equipment and Machinery is free from defects, has been
maintained in accordance with customary industry practice, is in good operating
condition and repair (except for ordinary wear and tear), is sufficient for the
operation of the Business as presently conducted, and is in conformity in all
material respects with all applicable Laws, (including applicable zoning, motor
vehicle safety, occupational safety and health Laws and Environmental
Requirements) relating thereto currently in effect, except where the failure to
conform would not have a Material Adverse Effect on Onkyo America.
Section 5.14. Accounts Receivable. The accounts receivable reflected on
the balance sheet in the Interim Financial Statements, and all accounts
receivable arising since the Balance Sheet Date, represent or shall represent
bona fide Claims against debtors for sales, services performed, or other charges
arising in the Ordinary Course of Business, and are not subject to dispute or
counterclaim. All accounts receivable, net of reserves for doubtful accounts,
are collectible in the Ordinary Course of Business (without the necessity of
legal proceedings).
Section 5.15. Compliance with Laws; No Default or Litigation.
(a) Except as set forth on Schedule 5.15(a), Onkyo America and its
Business are in compliance with all applicable Laws, including those applicable
to discrimination in employment, occupational safety and health, trade
practices, competition and pricing, product warranties, zoning, building,
sanitation, employment, retirement, labor relations, product advertising, and
Environmental Requirements, other than, in any such case, any failure to be in
compliance that does not or shall not have a Material Adverse Effect on Onkyo
America. Onkyo America is not in default with respect to any order, writ,
judgment, award, injunction, or decree of any court or governmental or
regulatory authority or arbitrator applicable to it or the Business, its
Personnel, or any of its assets, or is aware that any factual circumstances are
likely to result in such default.
(b) Except as disclosed on Schedule 5.15(b) to the knowledge of Onkyo
America and the Sellers, there are no actions, suits, Claims, informal
governmental inquiries or investigations, arbitrations or administrative
proceedings (or similar proceedings), (each "Proceeding") in progress, pending
or threatened by or against Onkyo America (or its assets or properties) or the
Business whether at Law or in equity, whether civil or criminal in nature, or
whether before or by a federal, state, county, local, or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any alternative dispute resolution entity, nor has Onkyo
America been charged with or received any notice of any violation of any Law
relating to Onkyo America, its Business, properties, assets, or the transactions
contemplated by this Agreement.
Section 5.16. Litigation. Except as set forth on Schedule 5.16, (a)
there are no Proceedings pending or threatened against Onkyo America, which, if
adversely determined, could have a Material Adverse Effect on Onkyo America or
could adversely affect the ability of the Sellers to consummate the transactions
contemplated by this Agreement; (b) there is no reason to believe any Proceeding
may be brought against Onkyo America in the future; and (c) there are no
unsatisfied judgments against Onkyo America, the Business, or Onkyo America's
activities.
Section 5.17. Employee Benefits Plans.
(a) Employee Welfare Benefit Plan. Schedule 5.17(a) attached hereto and
made a part hereof, contains a list of each employee welfare benefit plan (as
defined in Section 3(1) of ERISA (hereinafter referred to as "Employee Welfare
Benefit Plan"), and employee pension benefit plan (as defined in Section 3(2) of
ERISA) (hereinafter referred to as "Employee Pension Benefit Plan"), (i) which
was maintained or administered by Onkyo America within the three-year period
immediately prior to Closing, (ii) to which Onkyo America contributed to, or was
legally obligated to contribute to for the three-year period immediately prior
to Closing, or under which Onkyo America had any liability for the three-year
period immediately prior to Closing, with respect to its current or former
employees or independent contractors.
(b) Employee Pension Benefit Plan. Schedule 5.17(a) attached hereto and
made a part hereof, contains a list of each employee pension benefit plan (as
defined in Section 3(2) of ERISA) (hereinafter referred to as "Employee Pension
Benefit Plan"), (i) which was maintained or administered by Onkyo America within
the three-year period immediately prior to Closing, (ii) to which Onkyo America
contributed to, or was legally obligated to contribute to for the three-year
period immediately prior to Closing, or under which Onkyo America had any
liability for the three-year period immediately prior to Closing, with respect
to its current or former employees or independent contractors.
(c) Employee Plans. Schedule 5.17(a) contains a list of each employee
benefit plan, program, arrangement, agreement, policy, or commitment whether
insured or uninsured, funded or unfunded, that is not a Welfare Benefit Plan or
a Pension Benefit Plan, relating to deferred compensation, bonuses, or
compensation in addition to regular pay or wages, stock options, employee stock
purchases, severance, unemployment, flexible benefits, disability, vacation,
sickness, leave of absence, fringe benefits, employee awards, educational
assistance or reimbursement, equity participation (including but not limited to
stock appreciation and phantom stock plans), restricted stock, employee
discounts, excess benefits, rabbi, secular or vesting trust, child or dependent
care, long-term and nursing home care, and profit sharing: (i) which is
sponsored, maintained, or administered by Onkyo America or any affiliate; (ii)
to which Onkyo America contributes, or is legally obligated to contribute, or
(iii) under which Onkyo America has any liability with respect to Onkyo
America's current or former employees or any individuals providing services to
Onkyo America or any affiliate (individually, an "Employee Plan" and
collectively, the "Employee Plans").
(d) Liabilities. Except as set forth in Schedule 5.17(d) there are no
liabilities of Onkyo America or any affiliate, contingent or otherwise, accrued
or unaccrued, asserted or unasserted, with respect to any Employee Plan.
(e) Litigation. Except as set forth in Schedule 5.17(e) there are no
Proceedings, pending or threatened as of the Closing Date, involving any
(f) Funding Instruments. All trust agreements, custodial agreements,
investment management agreements, insurance or annuity contracts (or any other
funding instruments) and any other contract or agreement relating to any
Employee Plan are legally valid and binding and in full force and effect.
(g) Affiliated Service Group. Onkyo America is not a member of an
affiliated service group within the meaning of Code Section 414(m).
(h) Leased Employees. Onkyo America does not have any leased employees
within the meaning of Code Section 414(n).
(i) Code Section 414(o) Employees. Onkyo America has no employees or
individuals providing services to any of the Sellers or any Affiliate within the
meaning of the regulations under Code Section 414(o).
Section 5.18. Environmental Compliance. Except for the Troy Michigan Leased
Real Property at which the Buyer through Top Source Automotive, Inc. conducted
business operations through September 30, 1999 (as it existed on that date):
(a) The Owned Premises and Leased Real Property and all operations and
activities conducted thereon (including the Business) are, and at all times
during possession thereof by Onkyo America, have been, and at all times prior to
Seller's possession thereof were, in material compliance with all applicable
Environmental Requirements.
(b) No Hazardous Material has ever been generated, manufactured,
refined, used, transported, treated, stored, handled, disposed, transferred,
produced, or processed at or on the Owned Premises or Leased Real Property.
(c) There are no existing or potential Environmental Claims relating to
the Owned Premises or Leased Real Property; and Onkyo America and none of the
Sellers have received any notification or any knowledge of alleged, actual, or
potential responsibility for any disposal, release, or threatened release at any
location of any Hazardous Material generated at or transported from the Owned
Premises Leased Real Property by or on behalf of Onkyo America.
(d) No underground storage tank or other underground storage receptacle
(or associated equipment or piping) for Hazardous Materials has in the past or
is currently located on the Owned Premises or Leased Real Property, and there
have been no releases of any Hazardous Materials from any such underground
storage tank or related piping at any time prior to the Closing; and there have
been no releases (i.e., any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing, or dumping) of Hazardous Materials at, on, to, or from the
Owned Premises or Leased Real Property.
(e) To the knowledge of Onkyo America and each of the Sellers, there
are no PCBs or friable asbestos located at or on the Owned Premises or any
Leased Real Property. No Lien or other encumbrance has been imposed on the Owned
Premises or Leased Real Property by any federal, state, local or foreign
governmental agency or authority due to either the presence of any Hazardous
Material on or off the Owned Premises or Leased Real Property or a violation of
any Environmental Requirement.
(f) Onkyo America and each of the Sellers have not received any notices
issued pursuant to the citizen's suit provision of any Environmental Requirement
relating to the Owned Premises or Leased Real Property or any facility or
operations thereon.
(g) Onkyo America and each of the Sellers have not received any request
for information, notice, demand, letter, administrative inquiry, or formal or
informal complaint, or claim with respect to any Environmental Conditions or
violation of any Environmental Requirement relating to the Owned Premises or
Leased Real Property or any facility or operations thereon.
Section 5.19. Licenses and Permits. Onkyo America has obtained all
licenses and permits necessary for the conduct of the Business and all licenses
and permits are in full force and effect, except where failure to obtain such
licenses and permits would not have a Material Adverse Effect on the Business.
The licenses and permits are described on Schedule 5.19. The consummation of the
transactions contemplated hereby shall not interrupt or give any governmental
authority or body the right to terminate or interrupt the continuation of any of
the licenses and permits or the conduct of the Business. Onkyo America is in
compliance with all material terms, conditions, and requirements of all licenses
and permits, except where noncompliance would not have a Material Adverse
Effect, and no proceeding is pending or threatened relating to the revocation or
limitation of any of the licenses or permits.
Section 5.20. Personnel; Labor.
(a) Schedule 5.20(a) sets forth the (i) names, titles (if any), and
current annual rate of compensation (including bonuses) as May 19, 2000 and as
of the Closing Date of all Personnel not subject to a collective bargaining
agreement earning in excess of $50,000 per annum, (ii) the approximate number of
Onkyo America's employees, and (iii) all collective bargaining agreements and
relationships to which Onkyo America is a party, identifying the parties
thereto, the expiration dates and the status thereof.
(b) Except as and to the extent set forth in Schedule 5.20(b), (i)
Onkyo America is in compliance with all federal, state, and local laws
respecting employment and employment practices, harassment, discrimination,
terms and conditions of employment and wages and hours, and is not engaged in
any unfair labor practice, except where noncompliance would not have a Material
Adverse Effect on the Business; (ii) there is no charge or complaint of unlawful
employment practice or unfair dismissal of which Onkyo America or any of the
Sellers has received notice pending or threatened against Onkyo America in any
court or before any federal, state, or local agency (and Onkyo America and any
of the Sellers do not believe that there exists any reasonable basis therefor);
(iii) there is no unfair labor practice charge or complaint of which Onkyo
America or any of the Sellers have received notice pending or threatened against
Onkyo America before the National Labor Relations Board (and neither Onkyo
America nor any of the Sellers believes that there exists any reasonable basis
therefor); (iv) there is no labor strike, dispute, slowdown, or stoppage
actually pending or threatened against or involving Onkyo America; (v) Onkyo
America is not a party to any collective bargaining agreement and no attempt to
organize any group or all of the employees of Onkyo America has been made or
proposed; (vi) no grievance or arbitration which might have a Material Adverse
Effect on Onkyo America or the Business is pending and no claim therefor exists;
(vii) no private agreement restricts Onkyo America from relocating, closing, or
terminating any of its operations or facilities; and (viii) Onkyo America has
not experienced any work stoppage or other labor difficulty or committed any
unfair labor practice.
Section 5.21. Insurance. Onkyo America's properties, operations and
assets are insured under policies of title, liability, fire, casualty, business
interruption, workers' compensation, and other forms of insurance (individually,
a "Policy" and collectively, the "Policies") insuring its properties, assets, or
operations of Onkyo America. Schedule 5.21 lists all policies setting forth the
carrier number, policy number, expiration dates, premiums, description of type
of coverage, and coverage amounts. Each of the Policies is in the amount and
insures against the risks usually and customarily carried by a Person engaged in
the Business, is in full force and effect, and Onkyo America is not in default
under any provisions of any Policy nor has Onkyo America received notice of
cancellation of any Policy. There is no Claim by Onkyo America pending under any
Policy as to which coverage has been questioned, denied, or disputed by the
underwriters of any Policy, and neither Onkyo America nor any of the Sellers
knows of any basis for denial of any claim under any such policy. Onkyo America
has not received any written notice from or on behalf of any insurance carrier
issuing any Policy that insurance rates therefor shall hereafter be
substantially increased (except to the extent that insurance rates may be
increased for all similarly situated risks) or that there shall hereafter be a
cancellation or an increase in a deductible (or an increase in premiums in order
to maintain an existing deductible) or non-renewal of any Policy, whether on
account of transactions contemplated by this Agreement or otherwise. The
Policies are sufficient in all material respects for compliance by Onkyo America
with all requirements of Law and with the requirements of all assigned contracts
(if any).
Section 5.22. Contracts and Commitments. Schedule 5.22 lists as of the
date of this Agreement all:
(a) employment, consulting, bonus, profit-sharing, percentage
compensation, deferred compensation, pension, welfare, retirement, stock
purchase or stock option plans and agreements and commitments with the directors
or Personnel of Onkyo America, excluding agreements and commitments terminable
by Onkyo America on not more than 30 days' notice without liability or penalty,
and plans disclosed in Schedule 5.17(a);
(b) notes, mortgages, contracts, agreements, and commitments for the
repayment or borrowing of money by Onkyo America in excess of $50,000 in any one
case, or for a line of credit including borrowings by Onkyo America in the form
of guarantees of, indemnification for, or agreements to acquire any obligations
of others, and all security or pledge agreements related thereto;
(c) contracts, agreements, and commitments relating to any acquisition,
joint venture, partnership, strategic alliance, or sharing of profits or losses
with any Person;
(d) contracts, agreements, and commitments containing covenants
purporting to limit the freedom of Onkyo America or any Personnel to compete in
any business or in any geographic area;
(e) contracts, agreements, and commitments requiring payments or
distributions to any shareholder, director, or Personnel of Onkyo America, or
any relative or affiliate of any such Person;
(f) Material Contracts, agreements, licenses and commitments relating
to Computer Software;
(g) contracts, agreements, and commitments not disclosed on any other
schedule to this Agreement or otherwise disclosed in writing by Onkyo America to
the Buyer and which involve or may involve the payment or receipt by Onkyo
America (whether in payment of a debt, as a result of a guarantee or
indemnification, for goods or services, or otherwise) of more than $50,000 per
year, or are otherwise material to the Business; and
(h) contracts, agreements and commitments not made in the Ordinary
Course of Business.
Onkyo America has made true and complete copies of all the foregoing
plans, notes, mortgages, contracts, agreements, and commitments available to the
Buyer.
Except as set forth in Schedule 5.22 or as otherwise disclosed in
writing to the Buyer, there are no material transactions relating to the
Business presently pending or planned or initiated or completed since the
Balance Sheet Date between or among any of the following: any of the Sellers or
Onkyo America and any shareholder, director, or Personnel of Onkyo America, or
any relative or affiliate of any such Person, including any contract, agreement,
or other arrangement, including, but not limited to (i) providing for the
furnishing of material services by any of the Sellers or Onkyo America; (ii)
providing for the rental of material real or personal property by any of the
Sellers or Onkyo America; or (iii) otherwise requiring material payments from
any of the Sellers or Onkyo America (other than for services as officers or
directors of Onkyo America) to any such Person or corporation, partnership,
trust, or other entity in which any such Person has a substantial interest as a
shareholder, officer, director, trustee, or partner.
All of the plans, notes, mortgages, contracts, agreements, and
commitments identified in Schedule 5.22 are in full force and effect. Except as
set forth in Schedule 5.22, neither Onkyo America, nor any other party thereto,
has breached any material provision of, or is in material default under, the
terms of, nor does any condition exist which, with notice or lapse of time, or
both, would cause Onkyo America or any other Party to be in default under, any
contract, agreement, or commitment.
Section 5.23. Customers and Suppliers. Except as otherwise disclosed in
writing by Onkyo America to the Buyer, Schedule 5.23 sets forth a list of (a)
all Onkyo America's customers whose purchases exceeded five percent of Onkyo
America's total revenue during its last full fiscal year, showing the dollar
volume of sales to each such customer for such fiscal year, and (b) Onkyo
America's 10 largest suppliers by dollar volume and the dollar volume of
purchases or leases by Onkyo America from each such supplier for such fiscal
year. Except as set forth on Schedule 5.23 or as otherwise disclosed in writing
by Onkyo America to the Buyer, to the knowledge of Onkyo America or any of the
Sellers no customer or supplier listed has, or intends to, terminate or change
significantly its relationship with Onkyo America.
Section 5.24. Severance Arrangements. Except as set forth in Schedule
5.24 Onkyo America has not entered into any severance or similar arrangement in
respect of any present or former Personnel that shall result in any obligation
(absolute or contingent) of Onkyo America or the Buyer to make any payment to
any present or former Personnel following termination of employment. The
consummation of the transactions contemplated by this Agreement will not trigger
any severance or similar arrangement of Onkyo America payable by Onkyo America
or the Buyer after the Closing.
Section 5.25. Shareholders. The issued and outstanding shares of Onkyo
America are owned of record and beneficially by the Persons set forth on
Schedule 5.25 and no other Person has any equity interest in, or right,
contingent or other, to acquire any equity interest in Onkyo America.
Section 5.26. Broker's and Finder's Fees. Except as set forth in
Schedule 5.26, no broker, finder, or other Person is entitled to any commission
or finder's fee in connection with this Agreement or the transactions
contemplated by this Agreement.
Section 5.27. Knowledge of the Sellers. With respect to all
representations and warranties which are qualified "to the knowledge of the
Sellers," "to the best knowledge of the Sellers," "known to the Sellers," or
words of similar import, these phrases shall mean that any representation and
warranties by the Sellers shall be limited to each Seller's actual knowledge,
without inquiry or due diligence, of a fact or event which came to its
attention, whether as a shareholder of Onkyo America or otherwise.
Section 5.28. No Other Agreements to Sell Onkyo America. Other than
this Agreement, none of the Sellers nor Onkyo America has any obligation,
absolute or contingent, to any other Person to sell any of the outstanding
shares of capital stock of Onkyo America, to sell any of Onkyo America's assets
except in the Ordinary Course of Business, or to effect any merger,
consolidation, or other reorganization of Onkyo America, or enter into any
Agreement with respect thereto.
Section 5.29. Intellectual Property. All Intellectual Property material to the
Business is listed on Schedule 5.29. Onkyo America owns or possesses the lawful
right to use all Intellectual Property necessary to conduct the Business as
presently operated, free and clear of all Liens. To the knowledge of Onkyo
America or any of the Sellers, the Intellectual Property is not the subject of
any challenge. Onkyo America is not infringing upon or otherwise acting
adversely to, or engaging in the unauthorized use or misappropriation of, any
Intellectual Property, rights of publicity, or rights of privacy which are owned
by any other person or entity, and there is no claim or action by any such
person or entity pending or threatened with respect thereto. To the extent that
any of the Intellectual Property that Onkyo America is currently using or has
used in the past in connection with the Business is owned or licensed by the
Sellers, the Sellers will let, except as set forth in Xxxxxxx 00.00, Xxxxx
Xxxxxxx to continue utilizing that Intellectual Property without further
compensation, and doing so does not violate the terms of any agreements with any
third parties relating to such Intellectual Property.
Section 5.30. All Material Information. Neither Onkyo America nor any
of the Sellers have withheld from the Buyer any material facts relating to the
Purchased Shares, the Business, the operations of Onkyo America, the financial
or other conditions or future prospects of Onkyo America. No representation or
warranty made herein by Onkyo America or any of the Sellers and no statement
contained in any certificate or other instrument furnished or to be furnished to
the Buyer by Onkyo America or the Sellers in connection with the transactions
contemplated by this Agreement contains or will contain an untrue statement of a
material fact or omits to state any material fact necessary in order to make any
representation, warranty, or other statement of Onkyo America or the Sellers not
misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Sellers as follows:
Section 6.01. Organization and Qualification. The Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware. The Buyer is duly authorized to conduct business and is in
good standing under the laws of Florida and of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a Material Adverse Effect on the financial condition of the Buyer.
Section 6.02. Authorization and Validity of Agreement. The Buyer has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the performance of the obligations of the Buyer hereunder have been duly
authorized by all necessary corporate action by the board of directors of the
Buyer, and no other corporate proceedings on the part of the Buyer are necessary
to authorize the execution, delivery or performance. This Agreement has been
duly executed by the Buyer and constitutes a valid and binding obligation,
enforceable against the Buyer in accordance with its terms subject only to any
applicable bankruptcy, insolvency, or other laws affecting creditors' rights
generally.
Section 6.03. No Conflict or Violation. The execution, delivery, and
performance of this Agreement by the Buyer does not and shall not: (a) violate
or conflict with any provision of the articles or certificate of incorporation,
bylaws, or other governing document of the Buyer; (b) violate any provision of
law or any order, judgment, or decree of any court or other governmental or
regulatory authority applicable to the Buyer, or (c) violate or result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any contract or which would have a Material Adverse Effect on the Buyer.
Section 6.04. Consents and Approvals. Except as set forth in Schedule
6.04 hereto the execution and delivery of this Agreement and any related
agreements by the Buyer and the consummation by the Buyer of the transactions
contemplated hereby or thereby will not require any notice to, or consent,
authorization, or approval from any court or governmental authority or any other
third party. Except as set forth in Schedule 6.04, any and all notices,
consents, authorization and approvals set forth in Schedule 6.04 have been made
and obtained. No filing with the United States Department of Justice is required
under the HSR Act based on the financial statements contained in Form 10-K for
the year ended September 30, 1999 and Form 10-Q for the quarter ended March 31,
2000, both filed with the United States Securities and Exchange Commission by
the Buyer.
Section 6.05. Compliance with Law. The Buyer is in compliance with all
applicable federal, state, local, and foreign laws, ordinances, orders, rules,
and regulations including those applicable to discrimination in employment,
occupational safety and health, trade practices, competition and pricing,
product warranties, zoning, building, sanitation, employment, retirement, labor
relations, product advertising, and Environmental Requirements, other than, in
any such case, any failure to be in compliance that does not or shall not have a
Material Adverse Effect on the business, financial condition or future prospects
of the Buyer. The Buyer is not in default with respect to any order, writ,
judgment, award, injunction, or decree of any court or governmental or
regulatory authority or arbitrator applicable to it or its Business, its
personnel, or is aware that any factual circumstances are likely to result in
such default.
Section 6.06. Litigation. There are no Proceedings, pending or
threatened against the Buyer, its Business, before or by any court or
governmental body which, if adversely determined, could have a Material Adverse
Effect on the Buyer or could adversely affect the ability of the Buyer to
consummate the transactions contemplated by this Agreement; and there are no
unsatisfied judgments against the Buyer, or its Business.
Section 6.07. All Material Information. No representation or warranty
made herein by the Buyer and no statement contained in any certificate or other
instrument furnished or to be furnished to the Sellers by the Buyer in
connection with the transactions contemplated by this Agreement contains or will
contain an untrue statement of a material fact or omits to state any material
fact necessary in order to make any representation, warranty, or other statement
of the Buyer not misleading.
Section 6.08. Broker's and Finder's Fees. Except as set forth in
Schedule 6.08, no broker, finder, or other Person is entitled to any commission
or finder's fee in connection with this Agreement or the transactions
contemplated by this Agreement. Any such commissions and fees shall be paid by
the Buyer.
Section 6.09. Investment Representation. The Purchased Shares being
acquired by the Buyer pursuant to this Agreement are being acquired for its own
account for investment and not with a view toward the distribution thereof in
violation of the Securities Act of 1933, as amended and applicable state
securities laws, and any future dispositions of such Purchased Shares by the
Buyer will be made in accordance with said Securities Act of 1933 and the
applicable rules and regulations promulgated thereunder and applicable state
securities laws.
ARTICLE VII
COVENANTS OF SELLERS AND ONKYO AMERICA
Each of Sellers and Onkyo America covenant as follows:
Section 7.01. Investigation. From and after the date of this Agreement
until the Closing Date, the Buyer and its authorized representatives shall have
the right at any reasonable time to investigate the financial, technical, and
operating aspects of Onkyo America, as the Buyer may reasonably deem
appropriate; Onkyo America will give and each of the Sellers will give and will
cause Onkyo America to give to the Buyer and its authorized representatives full
access at all reasonable times to all records and all other properties of Onkyo
America; Onkyo America will permit and each of the Sellers will permit and cause
Onkyo America to permit the Buyer to make copies thereof or extracts therefrom;
Onkyo America will secure and each of the Sellers will secure and will cause
Onkyo America to secure for the Buyer full cooperation of all officers,
directors, and employees of Onkyo America in connection with such investigation.
Nothing contained in this Section shall relieve Onkyo America or any of the
Sellers from any liability which may arise from any breach of warranty,
covenant, representation, or agreement contained in this Agreement.
Section 7.02. Operation in Usual Manner. Unless expressly approved in
writing by the Buyer, from and after the date of this Agreement until the
Closing Date, Onkyo America will and each of the Sellers will cause Onkyo
America to carry on its Business in substantially the same manner as it has
through the date of this Agreement.
Section 7.03. Representations and Warranties. Onkyo America and the
Sellers will not knowingly take any action which would result in the breach of
any representation or warranty or the violation of any covenant contained in
this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
All obligations of the Buyer under this Agreement are subject to the
fulfillment, prior to or at the Closing Date, of each of the following
conditions anyone or more of which may be waived in writing by the Buyer in its
sole discretion:
Section 8.01. Accuracy of Representations and Warranties. All of the
representations and warranties of the Sellers and Onkyo America contained in
Article V shall be true and correct in all material respects at and as of the
Closing Date.
Section 8.02. Compliance with Obligations. Onkyo America and each of
the Sellers shall have performed and complied with all the covenants,
agreements, obligations and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing, and the Sellers
shall deliver to the Buyer a certificate as to the fulfillment of the conditions
specified in this Section 8.02 in such form and substance as Buyer shall
reasonably request.
Section 8.03. Third-Party Consents. All approvals, consents, and
releases by third parties which are necessary and advisable for the valid
transfer by the Sellers of the Purchased Shares to be transferred shall have
been obtained and shall be satisfactory to the Buyer in form and substance, and
originals or certified copies thereof shall have been delivered to the Buyer.
Section 8.04. Absence of Material Adverse Change. There has been no
event or occurrence which has had a Material Adverse Effect on Onkyo America,
its Business or the result of operations, financial conditions or future
prospects of Onkyo America since the execution of this Agreement. The Buyer
shall receive the updated Schedules of the Sellers as required by Article IV.
Section 8.05. Licenses and Permits. All licenses and permits and all
consents of other third parties that may reasonably be required in connection
with the execution of this Agreement or the effectuation of the transaction
contemplated herein shall have been duly obtained and shall be in full force and
effect on the Closing.
Section 8.06. Certificates of Existence or Good Standing. The Sellers
shall have delivered to the Buyer Certificates of Existence or Good Standing of
Onkyo America and Onkyo America Specialty Products, Inc. issued by the Secretary
of State of the State of Indiana and State of Michigan, dated as of the most
recent practicable date prior to the Closing.
Section 8.07. Other Agreements. The Sellers shall have delivered to the
Buyer copies of an executed Distribution and Technical Services Agreement and a
Distribution Agreement between ONKYO CORPORATION and Onkyo America in
substantially the form attached as Schedule 8.07A and Schedule 8.07B.
Section 8.08. Litigation Affecting Closing. No Proceeding shall be
pending or threatened before any court or any administrative or governmental
authority to restrain or prohibit or to obtain damages or other relief in
connection with the consummation of the transactions contemplated by this
Agreement, and no investigation that might eventuate in any such Proceeding
shall be pending or threatened.
Section 8.09. Government and Regulatory Approvals. All governmental or
regulatory approvals required in the United States and any other jurisdiction
necessary for the consummation of this Agreement and the Closing shall have been
obtained.
Section 8.10. Legal Opinions. The law firms of Akai Law Offices, counsel
to ONKYO CORPORATION, Ice Xxxxxx, counsel to Onkyo America, and counsel to Onkyo
Europe and Onkyo Malaysia reasonably satisfactory to the Buyer shall have each
delivered to the Buyer a legal opinion reasonably satisfactory in form and
substance to the Buyer.
Section 8.11. Financing. The Buyer shall have obtained financing for the
purchase of the Purchased Shares on terms and conditions satisfactory to the
Buyer.
Section 8.12. Delivery of Purchased Shares. At the Closing, the Sellers
shall deliver to the Buyer certificates representing all of the Purchased
Shares, all of which certificates shall be duly registered in the name of the
Buyer.
Section 8.13. Corporate Documents. The Buyer shall have received the stock
ledger, minute book, and any other corporate records of Onkyo America and Onkyo
America Specialty Products, Inc., the check registers and any checkbooks
relating to bank accounts or other accounts upon which the funds of Onkyo
America or Onkyo America Specialty Products, Inc. may be drawn. In addition, all
of the books and records including Computer Software or maintained by Onkyo
America in the Ordinary Course of the Business shall be available at its
principal offices in Columbus, Indiana.
ARTICLE IX
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
The obligations of the Sellers under this Agreement are subject to the
fulfillment prior to or at the Closing Date, of the following conditions, any
one or more of which may be waived in writing by the Sellers in their sole
discretion:
Section 9.01. Payment of the Purchase Price. The Buyer shall have
delivered the Purchase Price including the cash, and the Promissory Notes.
Section 9.02. Compliance with Obligations. The Buyer shall have
performed and complied with all the covenants, agreements, obligations and
conditions required by this Agreement to be performed or complied with by it at
or prior to the Closing, and the Buyer shall deliver to the Sellers a
certificate as to the fulfillment of the conditions specified in this Section
9.02 in such form and substance as Sellers shall reasonably request.
Section 9.03. Certificates of Existence or Good Standing. The Buyer
shall have delivered to the Sellers a Certificate of Existence or Good Standing
of the Buyer issued by the Secretary of State of the States of Delaware and
Florida, dated as of the most recent practicable date prior to the Closing.
Section 9.04. Legal Opinion. The Buyer shall have delivered to the
Sellers the legal opinion of Xxxxxxx Xxxxxx, P.A., counsel for Buyer, dated
the Closing Date, reasonably satisfactory in form and substance to each of the
Sellers and Onkyo America.
ARTICLE X
MUTUAL CONDITIONS AND COVENANTS
Section 10.01. Mutual Conditions. The obligations of each of the Buyer
and the Sellers to effect the Closing shall be subject to the following
conditions, any one or more of which may be waived in writing, as to the Buyer,
by any of the Sellers, and as to the Sellers, by the Buyer:
(a) No order, injunction or decree issued by any governmental authority
of competent jurisdiction shall have been purporting to restrain or prohibit or
prevent the consummation of the transactions contemplated by this Agreement. No
Proceeding initiated by any governmental authority seeking an injunction against
the transactions contemplated by this Agreement shall be pending. No statute,
rule, regulation, order, injunction or decree shall have been enacted, entered,
promulgated or enforced by any governmental authority which prohibits, restricts
or makes illegal consummation of the transactions contemplated hereby or
thereby.
(b) All approvals of governmental authorities required to consummate
the transactions contemplated hereby shall have been obtained and shall remain
in full force and effect and all statutory waiting periods in respect thereof
shall have expired.
(c) All consents or waivers of third parties regarding the assignment
of contracts shall have been obtained, provided, however, that the Parties shall
be obligated to close if (i) the only consents or waivers that have not been
obtained would not preclude the Buyer, following the Closing, from acquiring
control of Onkyo America and thereafter operating the Business in substantially
the same manner as the Business is being conducted as of the date of this
Agreement.
Section 10.02. Miscellaneous. At any time, and from time to time, the
Sellers shall execute such consents and other instruments and make such filings
as may be necessary or appropriate in order to allow the Buyer or any affiliate
of the Buyer to utilize the name "Onkyo America, Inc." or "Onkyo America" in the
conduct of the Business as set forth in Section 15.01.
ARTICLE XI
SURVIVAL
Solely for the purposes of the indemnification provided by Article XII
hereof, all representations and warranties contained in this Agreement shall
survive the execution, delivery, and performance hereof, notwithstanding any
investigation conducted at any time with respect thereto for 18 months from the
Closing Date, except that the representations and warranties made in each of
Section 5.01 and 5.02 shall survive indefinitely. Any covenants or acts required
to be taken following the Closing shall survive the Closing.
ARTICLE XII
INDEMNIFICATION
Section 12.01. Indemnification by the Sellers. The Sellers shall
jointly and severally indemnify and hold harmless the Buyer and its successors
and their respective shareholders, officers, directors, and agents from and
against any and all damages, losses, obligations, liabilities, claims,
encumbrances, penalties, costs, and expenses, including reasonable attorneys'
fees (and costs and reasonable attorneys' fees in respect of any suit to enforce
this provision) (each a "Claim"), arising from or relating to (i) any
misrepresentation, breach of representation or warranty by the Sellers, or
nonfulfillment of any of the covenants or agreements by the Sellers in this
Agreement, or in any document, certificate, or affidavit delivered by the
Sellers pursuant to the provisions of this Agreement, or (ii) the lawsuit filed
by Xxxxx Xxxxxxx, a former employee of Onkyo America. Provided, however, that
the Sellers' obligation with regard to Xxxxx Xxxxxxx shall be limited to 20% of
the amounts paid including the reasonable attorney's fees and costs of the
Buyer's counsel. The prior consent of the Sellers to any payment or settlement
shall not be required.
Section 12.02. Indemnification by the Buyer. Subject to the provisions
of Section 12.04, the Buyer shall indemnify and hold harmless each of the
Sellers and its successors and their respective shareholders, officers,
directors, and agents from and against any and all Claims resulting from or
relating to any misrepresentation, breach of representation or warranty, or
nonfulfillment of any of the covenants or agreements of the Buyer in this
Agreement.
Section 12.03. Procedures.
(a) Promptly (and in any event within 10 days after the service of any
citation or summons) after acquiring knowledge of any Claim for which one of the
Parties hereto (the "Indemnified Party") may seek indemnification against
another Party (the "Indemnifying Party") pursuant to this Article XII, the
Indemnified Party shall give written notice thereof to the Indemnifying Party.
Failure to provide notice shall not relieve the Indemnifying Party of its
obligations under this Article XII except to the extent that the Indemnifying
Party demonstrates actual damage caused by that failure. The Indemnifying Party
shall have the right to assume the defense of any Claim with counsel reasonably
acceptable to the Indemnified Party upon delivery of notice to that effect to
the Indemnified Party. If the Indemnifying Party, after written notice from the
Indemnified Party, fails to take timely action to defend the action resulting
from the Claim, the Indemnified Party shall have the right to defend the action
resulting from the Claim by counsel of its own choosing, but at the cost and
expense of the Indemnifying Party. Except as provided in Section 12.01 with
regard to Xxxxx Xxxxxxx, the indemnified Party shall have the right to settle or
compromise any Claim against it, and, as the case may be, recover from the
Indemnifying Party any amount paid in settlement or compromise thereof, if it
has given written notice thereof to the Indemnifying Party and the Indemnifying
Party has failed to take timely action to defend the same. The Indemnifying
Party shall have the right to settle or compromise any claim against the
Indemnified Party without the consent of the Indemnified Party provided that the
terms of the settlement or compromise provide for the unconditional release of
the Indemnified Party and require the payment of monetary damages only.
(b) Upon its receipt of any amount paid by the Indemnifying Party
pursuant to this Article XII, the Indemnified Party shall deliver to the
Indemnifying Party such documents as it may reasonably request assigning to the
Indemnifying Party any and all rights, to the extent indemnified, that the
Indemnified Party may have against third parties with respect to the Claim for
which indemnification is being received.
Section 12.04. Contribution. In order to provide for just and equitable
contribution in any case in which an Indemnified Party makes a Claim pursuant to
Article XII but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case, notwithstanding the fact that the express provisions of
Article XII provide for indemnification, the Indemnified Party and Indemnifying
Party shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees) in either such case (after
contribution from others) in the following proportions:
ONKYO MALAYSIA SDN. BHD. 35%
ONKYO EUROPE ELECTRONICS GMBH 35%
ONKYO CORPORATION 30%
provided, however, that if such allocation is not permitted by applicable Law or
the Indemnifying Party is the Buyer, then the relative fault of each Indemnified
Party and each Indemnifying Party in connection with the statements or omissions
which resulted in such Claims and other relevant equitable considerations shall
also be considered.
Section 12.05. Limitations on Indemnification and Contribution. No
Indemnified Party shall be entitled to receive an indemnification or
contribution payment with respect to any Claim or Claims specified in this
Article XII unless the Claim, or the aggregate amount of all Claims made by the
Indemnified Party hereunder, equals or exceeds $50,000.
ARTICLE XIII
DISTRIBUTION AND TECHNICAL SUPPORT
Distribution and Technical Support Agreement. As a material
inducement to the Buyer to enter into this Agreement and to consummate the
transaction contemplated hereby, the Sellers agree to enter into and to cause
Onkyo America to enter into a Distribution and Technical Services Agreement and
Distribution Agreement in substantially the same form as set forth in Schedule
8.07A and Schedule 8.07B.
ARTICLE XIV
NON-COMPETITION AND EXCLUSIVITY
As a material inducement to the Buyer to enter into this Agreement and
to consummate the transaction contemplated hereby, the Sellers hereby agree as
follows:
Section 14.01. Non-Competition and Exclusivity
(a) Onkyo Corporation shall comply with the provisions in Article I
that certain Distribution and Technical Services Agreement described in Schedule
8.07A.
(b) Use of Tradename in Europe. Onkyo America may sell any of its
products in Europe (as defined in Article II), provided that these products bear
a trade name other than "Onkyo" and that Onkyo America does not use a corporate
name that includes "Onkyo" in connection with any such sale.
Section 14.02. Remedies for Violation. If the Sellers and/or any member
of the Onkyo Group violates the provision of Section 14.01, the Buyer may, at
its sole discretion, exercise any remedy contained in Schedule 8.07A or any
other legal or equitable remedies available to it under applicable Law.
ARTICLE XV
USE OF INTELLECTUAL PROPERTY
As a material inducement to the Buyer to enter into this Agreement and
to consummate the transaction contemplated hereby, the Sellers agree as follows:
Section 15.01. Company Name. ONKYO CORPORATION grants the Buyer and
Onkyo America a royalty-free license and right to possess, use, display and
reproduce the name "Onkyo America" or "Onkyo America, Inc." as Onkyo America's
name in connection with the Business for a period of five (5) years from the
Closing Date.
Section 15.02. Use of Tradename on Products. ONKYO CORPORATION grants
the Buyer the right to use display and reproduce the "Onkyo" name on Onkyo Group
Speakers that are sold to the Buyer in its capacity as exclusive distributor for
ONKYO CORPORATION under the Distribution and Technical Service Agreement.
Section 15.03. Use of Patents and Know-How. All issued United States
and foreign patents owned by Onkyo America or used in the Business are listed on
Schedule 5.29. As of the Closing Date, Onkyo America shall cease making royalty
payments to ONKYO CORPORATION, and ONKYO CORPORATION shall grant to Onkyo
America a perpetual royalty-free license to use and the right to sub-license all
issued United States and foreign patents (including any and all improvements,
which are disclosed in any of the foregoing, and all divisions, continuations,
continuations in-part, renewals, substitutes, reissues and re-examination) and
information technology, including but not limited to, manufacturing know-how,
quality control standards and unpublished patent information and trade secrets
used by Onkyo America in connection with the Business except as specified in
Section 15.04 and Section 15.05.
Section 15.04. Use of Future Patents. All United States and foreign
patents and information technology, including but not limited to manufacturing
know-how, quality control standards and unpublished patent information and trade
secrets developed by ONKYO CORPORATION after the Closing Date shall be subject
to separate negotiations or licensing agreements as mutually agreed to by the
Sellers and Onkyo America. All United States and foreign patents and information
technology, including but not limited to manufacturing know-how, quality control
standards and unpublished patent information and trade secrets developed by
Onkyo America after the Closing Date shall be subject to separate negotiations
or licensing agreements as mutually agreed to by the Sellers and Onkyo America.
Section1 5.05. Design Database. Through January 31, 0000, Xxxxx Xxxxxxx
is entitled to use, and shall pay $10,000 (in United States dollars) per month
to ONKYO CORPORATION for use of, the design database of ONKYO CORPORATION's IC
Division while Onkyo America develops its own database, but in no event may
Onkyo America use such design database after January 31, 2001. Upon completion
of Onkyo America's database, Onkyo America shall give notice to ONKYO
CORPORATION of the date it shall cease to use the design database of ONKYO
CORPORATION's IC Division. Onkyo America shall cease using, and paying for use
of, such design database as of the date provided in Onkyo America's notice. For
this final payment, if the date of notice falls prior to the last day of the
month, Onkyo America shall pay a proportion, based on the number of days within
the month, for its final payment.
ARTICLE XVI
MISCELLANEOUS
Section 16.01. Public Announcements. After the Closing, the Sellers
shall not directly or indirectly use, for their own benefit or otherwise, or
disclose or make any press release or public announcement to any other Person,
any information relating to the Business, except to the extent that such
information (i) is or becomes generally available to the trade or the public
other than as a result of a disclosure by the Sellers or their representatives,
(ii) is required to be disclosed by law or order of a court or governmental body
or stock exchange requirements, (iii) as necessary in connection with tax
matters or (iv) as may be necessary or appropriate to communicate to the Sellers
or agents, employees, officers, directors, or counsel to effectuate the terms of
this Agreement.
Section 16.02. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served personally on the
Party to whom notice is to be given, (b) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, provided that
telephonic confirmation of receipt is obtained from the designated person for
the recipient promptly after completion of transmission, (c) three days after
delivery to an express courier service or the Express Mail service.
If to Seller, to:
ONKYO EUROPE ELECTRONICS GMBH Xxxxxxxxxxxxxxxx 00/00, 00000
Xxxxxxxxx, Xxxxxxx Telephone No.: 00-00-000000
------------
Facsimile No.: 00-00-0000000
-------------
Attention: Xxxxxxx Xxxxxxxx, Managing Director
ONKYO MALAYSIA SDN. BHD.
Xx. 0, Xxxxx X/0.
Xxxxxxx Xxxxxxxxxx
Xxxxxxxx
00000 Bandar Baru
Bangi, Selangor
Darul Ehsan, Malaysia
Telephone No.: 00-0-000-0000
-------------
Facsimile No.: 00-0-000-0000
-------------
Attention: Xxxxx Xxxxxxxx, Managing Director
ONKYO CORPORATION
0-0, Xxxxxxx-Xxx, Xxxxxxxx-Xxx
Xxxxx 000-0000, Xxxxx
Telephone No.: 0000-00-0000
Facsimile No.: 0000-00-0000
Attention: Xxxxx Xxxxxx, Chairman and Chief Executive Officer
With a copy to:
Akai Law Offices
Otemachi First Square East 16F
5-1, Otemachi 1-chome
Xxxxxxx-xx, Xxxxx 000-0000, Xxxxx
Telephone No.: 00-0000-0000
Facsimile No.: 03-3213-6470
Attention: Izumi Akai
which copy shall not constitute notice for the purposes of this
Agreement.
If to Buyer, to:
GLOBAL TECHNOVATIONS, INC.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000-0000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx.,
Chairman and Chief Executive Officer
With a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxx, P.A.
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
which copy shall not constitute notice for the purposes of this Agreement.
Any Party providing notice to another Party shall also provide notice to:
ONKYO AMERICA, INC.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Telephone: 812-342-0332 ext. 106
Facsimile: 000-000-0000
Attention: Xxxxxxx Xxxxxxxxx, President
With a copy to:
Xxxx X. Xxxxxxxxxx
Ice, Xxxxxx, Xxxxxxx & Xxxx
Xxx Xxxxxxxx Xxxxxx
Xxx 00000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
which copy shall not constitute notice for the purposes of this Agreement.
Any Party may change its address for the purpose of this Section 16.02
by giving the other Parties written notice of its new address in the manner set
forth above.
Section 16.03. Headings. The article, section, and paragraph headings in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
Section 16.04. Construction.
(a) The Parties have participated jointly in the negotiation and
drafting of this Agreement, and, in the event of an ambiguity or a question of
intent or a need for interpretation arises, this Agreement shall be construed as
if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.
(b) Except as otherwise specifically provided in this Agreement (such
as by "sole," "absolute discretion," "complete discretion," or words of similar
import), if any provision of this Agreement requires or provides for the
consent, waiver, or approval of a Party, such consent, waiver, and/or approval
shall not be unreasonably withheld.
(c) The Parties intend that each representation, warranty, and
covenant herein shall have independent significance. If any Party has breached
any representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty, or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which
the Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant, as the
case may be.
(d) Words of any gender used in this Agreement shall be held and
construed to include any other gender; words in the singular shall be held to
include the plural; and words in the plural shall be held to include the
singular; unless and only to the extent the context indicates otherwise.
(e) Any reference to any federal, state, local, or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
(f) The word "including" means "including, without limitation."
Section 16.05. Severability. If any provision of this Agreement is
declared by any court or other governmental body to be null, void, or
unenforceable, this Agreement shall be construed so that the provision at issue
shall survive to the extent it is not so declared and that all of the other
provisions of this Agreement shall remain in full force and effect.
Section 16.06. Entire Agreement. This Agreement contains the entire
understanding among the Parties hereto with respect to the transactions
contemplated hereby and supersedes and replaces all prior and contemporaneous
agreements and understandings, oral or written, with regard to those
transactions. All exhibits and schedules hereto are expressly made a part of
this Agreement as fully as though completely set forth herein. Once the Buyer
acquires the Purchased Shares, the Sellers shall have no obligations with
respect to the outstanding Onkyo America preferred shares owned by the Buyer.
Section 16.07. Amendments; Waivers. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties, or
conditions hereof may be waived, only by a written instrument executed by the
Parties hereto, or in the case of a waiver, by the Party waiving compliance. Any
waiver by any Party of any condition, or of the breach of any provision, term,
covenant, representation, or warranty contained in this Agreement, in any one or
more instances, shall not be deemed to be or construed as a further or
continuing waiver of any condition or of the breach of any other provision,
term, covenant, representation, or warranty of this Agreement.
Section 16.08. Parties in Interest. Nothing in this Agreement is
intended to confer any rights or remedies under or by reason of this Agreement
on any Person other than the Sellers and the Buyer and their respective
successors and permitted assigns.
Section 16.09. Successors and Assigns. This Agreement shall be binding
on, and shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the Parties hereto.
Section 16.10. Governing Law. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of Indiana
(without giving effect to the principles of conflicts of laws thereof).
Section 16.11. Arbitration. Any dispute arising under or in connection
with this Agreement shall be resolved by three arbitrators by the American
Arbitration Association in arbitration proceedings conducted in Indianapolis,
Indiana, in accordance with the American Arbitration Association's commercial
arbitration rules. The decision of the arbitrators shall be final and binding
and shall be enforceable in any court of competent jurisdiction; provided,
however, that any Party may, as appropriate, seek temporary injunctive relief in
any court of competent jurisdiction. In any such arbitration proceeding, the
Parties agree to provide all discovery deemed necessary by the arbitrators. The
decision any award made by the arbitrators shall be final, binding and
conclusive on all Parties for all purposes, and judgment may be entered thereon
in any court having jurisdiction.
Section 16.12. Counterparts. This Agreement is executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute the same instrument.
Section 16.13. Expenses. The Sellers shall pay all expenses of the
Sellers and Onkyo America (including attorneys' fees and expenses) and the Buyer
shall pay all expenses of the Buyer (including attorneys' fees and expenses), in
each case incurred in connection with this Agreement and the transactions
contemplated hereby. The Sellers shall pay all sales, use, stamp, transfer,
service, recording, real estate and like taxes of fees, if any, imposed by any
Governmental Authority in connection with the transfer and assignment of the
Purchased Shares.
ARTICLE XVII
CERTAIN MATTERS FOLLOWING CLOSING
Section 17.01. Inter-Company Obligations.
(a) On August 31, 0000, Xxxxx Xxxxxxx shall pay $1,000,000 (plus
interest at the U. S. Federal Funds rate as of the Closing Date less 0.5%) in
United States dollars to ONKYO CORPORATION representing repayment of a loan from
ONKYO CORPORATION.
(b) In addition, Onkyo America shall pay to ONKYO CORPORATION on
account of outstanding inter-company accounts payable without interest,
including but not limited to royalties until the Closing Date, which amount
shall be paid as follows: (i) $1,000,000 in United States dollars shall be paid
on August 31, 2000 and (ii) the balance shall be paid on December 29, 2000.
Section 17.02. Inspection Rights of the Sellers. Within 75 days after the
end of each 12- month period specified in Schedule 3.02(b), Onkyo America shall,
and the Buyer shall cause Onkyo America to, compute the amount of EBITDA for
such 12-month period based upon the audited financial statements of Onkyo
America and provide the Sellers with (i) the audited financial statements of
Onkyo America for such 12-month period, with the auditors' report thereon
attached, (ii) the amount of EBITDA for such 12-month period so computed, and
(iii) a work sheet showing in reasonable detail the computation of the amount of
EBITDA. At the reasonable request of any of the Sellers, Onkyo America shall,
and the Buyer shall cause Onkyo America to, provide the Sellers with any
additional information that may be reasonably necessary or useful for the
Sellers to verify and confirm that the computation of EBITDA is proper and
accurate. Upon reasonable advance notice, any of the Sellers shall have the
right, through its employees and/or accountants, to review the books and records
of Onkyo America during normal business hours in order to verify and confirm
that the computation of EBITDA is proper and accurate. If there arises any
dispute between the Buyer and any of the Sellers over the amount of EBITDA, any
such party may refer the dispute to the arbitration which will be conducted
pursuant to Section 16.11 of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed, or caused to be
executed by their duly authorized representatives, this Agreement as of the date
first above written.
"SELLERS"
ONKYO EUROPE ELECTRONICS GMBH
By:
Xxxxxxx Xxxxxxxx, Managing Director
ONKYO MALAYSIA SDN. BHD.
By:
Xxxxxxx Xxxxx, Managing Director
ONKYO CORPORATION
By:
Xxxxx Xxxxxx, Chairman and Chief
Executive Officer
"BUYER"
GLOBAL TECHNOVATIONS, INC.
By:
Xxxxxxx X. Xxxxxx, Xx., President and
Chief Executive Officer
"ONKYO AMERICA"
ONKYO AMERICA, INC.
By:
Xxxxxxx Xxxxxxxxx, President
June 29, 2000
Schedule 3.02(b)
Earn Out Payment or Payments
[ * ]
* Confidential portions omitted and filed separately with the Commission.
June 29, 2000
Schedule 5.02
Authority of Sellers; Validity of Agreement
1) The Agreements, by and between Onkyo America and LaSalle Bank, as set forth
in Schedule 5.22. Preferred Shares issued to Top Source.
Schedule 5.03
Corporate Organization and Qualification
No exceptions.
Schedule 5.04
Governmental Consents
No exceptions.
Schedule 5.05
Financial Statements
[ * ]
* Confidential portions omitted and filed separately with the Commission.
Schedule 5.05
Financial Statements
Changes to Schedule 5.05 Since June 29, 2000
The following documents are attached:
1) Unaudited Income Statement and Balance Sheet for the period from January -
July 31, 2000.
[ * ]
* Confidential portions omitted and filed separately with the Commission.
Schedule 5.06
Absence of Certain Changes or Events
See Schedules a) - q) to follow.
Schedule 5.06(a)
Material Adverse Change in the Assets, Operations,
Business, Prospects or Financial Condition of Onkyo America
None.
Schedule 5.06(b)
Increases in Compensation
5.06 (i) [ * ] [ * ]
5.06 (ii) None. 5.06 (iii) None. 5.06 (iv) None.
* Confidential portions omitted and filed separately with the Commission.
Schedule 5.06(c)
Addition to or Modification of the Employee Plans, Arrangements, or Practices
None.
Schedule 5.06(d)
Sale, Lease, Assignment, or Transfer of Assets
None.
Changes to Schedule 5.05
Since June 29, 2000
Schedule 5.06(d)
Sale, Lease, Assignment, or Transfer of Assets
Onkyo America, Inc. purchased two vehicles (a 1998 Town & Country van for
$20,450 and a 1992 Buick LeSabre for $4,000) from an employee moving back to
Japan. Onkyo America, Inc. has sold the 1998 Town & Country Van for $15,000 and
intends to sell the 1992 Buick LeSabre.
Schedule 5.06(e)
Capital Expenditure
Vendor Invoice No. Date Amount Description
1. [ * ] [ * ] [ * ] [ * ] [ * ]
2. [ * ] [ * ] [ * ] [ * ] [ * ]
3. [ * ] [ * ] [ * ] [ * ] [ * ]
* Confidential portions omitted and filed separately with the Commission.
Changes to Schedule 5.06(e)
Since June 29, 2000
Schedule 5.06(e)
Capital Expenditure
Vendor P.O. No. Date Amount Description
1. [ * ] [ * ] [ * ] [ * ] [ * ]
2. [ * ] [ * ] [ * ] [ * ] [ * ]
3. [ * ] [ * ] [ * ] [ * ] [ * ]
4. [ * ] [ * ] [ * ] [ * ] [ * ]
* Confidential portions omitted and filed separately with the Commission.
Schedule 5.06(f)
Failure to Operate or Preserve the Business
None.
Schedule 5.06(g)
Change in Accounting Methods or Practice
None.
Schedule 5.06(h)
Damage, Destruction, or Loss
None.
Schedule 5.06(i)
Declaration, Setting Aside, or Payment of Dividends or Distributions
None other than with respect to Buyer's preferred shares.
Schedule 5.06(j)
Issuance or Commitment to Issue Any Shares
None.
Schedule 5.06(k)
Indebtedness
None.
Schedule 5.06(l)
Incurrence of Any Liability Involving $50,000 or More
Income Tax liability may be greater than $50,000.
Royalty payments by Onkyo America to Onkyo Corporation for the following
amounts:
December 1999 $ 117,621.53
January 2000 $ 134,014.89
February 2000 $ 137,039.53
March 2000 $ 144,852.98
April 2000 $ 124,848.52
May 2000 $ 137,894.26
Changes to Schedule 5.06(l)
Since June 29, 2000
Schedule 5.06(l)
Incurrence of Any Liability Involving $50,000 or More
Royalties to Onkyo Corporation for the following amounts:
June 2000 $ 115,950.96
July 2000 $ 97,380.47
August 2000 [$150,000 - estimate]
Schedule 5.06(m)
Non-Inventory Purchase Orders in excess of $100,000
Purchase Order No. 1793T dated May 22, 2000, in the amount of $118,000.00, for
tooling and molds.
Schedule 5.06(n)
Cancellation of Indebtedness, or Waiver of Rights
None.
Schedule 5.06(o)
Failure to Repay Material Obligations
None.
Schedule 5.06(p)
Contracts, Agreements, Commitments, Leases or Licenses that May Be Terminated
None.
Schedule 5.06(q)
Other Agreements
None except as set forth in Schedules 5.06(a)-(p).
Schedule 5.10
Undisclosed Liabilities
None.
Schedule 5.11
Real Property
Onkyo America owns the following:
The property located at 0000 Xxxxxx Xx. Xxxxxxxx, XX 00000, as described in the
attached legal description.
The Company House located at 000 Xxxxxx Xxxx, Xxxxxxxx, XX 00000, as described
in the attached legal description.
Note: This form approved by Indiaan State Bar Association for use in Indiana.
Use of this form necessitates the practice of law and is limited to practicing
lawyers.
CORPORATE WARRANTY DEED
THIS INDENTURE WITNESSETH, That XXXXXX CONSTRUCTION CO., INC. of
________________ -----------------------------
_____________________ ("Grantor"), a corporation organized and existing under
the laws of the State of Indiana CONVEYS AND WARRANTS to ONKYO MANUFACTURING,
INC. of Xxxxxxxxxxx County, in the State of Indiana for the sum of ----------Ten
--------Dollars ($10.00) and other valuable consideration, the receipt of which
is hereby acknowledged, the following described real estate in Xxxxxxxxxxx
County, in the State of Indiana.
Lot Numbered Fifty-nine (59) in Harrison Ridge, is recorded June 7,
1979, in Plat Book "J", page 79, in the Office of the Recorder of
Xxxxxxxxxxx County, Indiana.
Real estate herein is subject to restrictions, covenants, and easements
as set out in Plat Book "J", page 79, in the Recorder's Office of
Xxxxxxxxxxx County, Indiana, and the Declaration of Convenants of
Xxxxxx Lakes Community Association, Inc., with all amendments thereto
placed of record in the Recorder's Office of Xxxxxxxxxxx County,
Indiana, all of which are made a part of this deed by reference
thereto.
Grantor herein agrees to pay all taxes due and payble up to and
including the first installment of taxes due and payable in May, 1988,
and Grantee herein agrees to assume and pay all taxes thereon
thereafter.
Grantor hereby certifies that there is no Indiana Gross Income Tax due
at this time as a result of this conveyance.
Received Duly entered
Recorder For Taxation
'88 APR 1 AM 11 50 Apr 1 1998
The undersigned persons executing this deed on behalf of
Grantor represent and certify that they are duly elected officers of
Grantor and have been fully empowered, by proper resolution of the
Board of Directors of Grantor, to execute and deliver this deed; that
Grantor has full corporate capacity to convey the real estate described
herein; and that all necessary corporate action for the making of such
conveyance has been taken and done.
IN WITNESS WHEREOF, Grantor has caused this deed to be executed
this 31st day of March __ 1988. XXXXXX CONSTRUCTION CO., INC. (Name of
Corporation) (SEAL) ATTEST:
By /s/ Xxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxx
------------------------- -------------------------
Xxxxx X. Xxxxxx, Secretary Xxxxxx X. Xxxxxx, President
------------------------- -------------------------
Printed Name and Office Printed Name and Office
STATE OF INDIANA )
) SS:
COUNTY OF XXXXXXXXXXX )
Before a Notary Public is and for said County and State, personally appeared
Xxxxx X. -------- Xxxxxx and Xxxxxx X. Xxxxxx, the Secretary and President ,
respectfully of ---------- --------------------- ------------- -------------
Xxxxxx Construction Co., Inc. who acknowledged ______________ of the foregoing
Deed for and on behalf of ------------------------------ said Grantor, and who,
having duly sworn that the representations herein contained are true.
Witness my hand and Notarial Seal this 31st day of March, 1988 ---- ----- --
My Commission Expires Signature /s/ Xxxxx Xxxxx
February 11, 1991 Printed Xxxxx Xxxxx Notary Public
---------------------------- ----------------------------------
Residing in Xxxxxxxxxxx County,
Indiana
This instrument was prepared by Xxxxx X. Xxxxxxx attorney at law.
000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000
Book 392 Pg 916
SCHEDULE A
OFFICE FILE NUMBER POLICY NUMBER DATE OF POLICY AMOUNT OF INSURANCE
---------------------------- -------------------------- -------------------------- --------------------------
1 2 3 4
LT980107 000-00-000000 FEBRUARY 27, 1998 $4,500,000.00
(LB) at 8:00 a.m.
---------------------------- -------------------------- -------------------------- --------------------------
1. Name of Insured:
Onkyo America, Inc., successor by merger to Onkyo Manufacturing, Inc.
2. The estate or interest in the land which is covered by this policy is:
Fee Simple
3. Tide to the estate or interest in the land is vested in the Insured.
4. The land referred to in this Policy is described as follows:
PARCEL 1
Lot Numbered One (1) in Woodside Business Center, Section Two, as
recorded in Plat Book "0", page 71, in the Office of the Recorder of
Xxxxxxxxxxx County, Indiana.
PARCEL II
Property described from Deed Record 200, page 653.
Commencing at the northeast corner of the Southwest Quarter of the
Southeast Quarter of Section Ten (10), Township Eight (8) North of
Range Five (5) East; thence West nineteen (19) rods and four and
one-half (4 1/2) feet; thence South forty-six (46) rods; thence East
nineteen (19) rods and four and one-half (4 1/2) feet; thence North
forty-six (46) rods to the place of beginning, containing five (5)
acres and forty-three eightieths (43/80) acres, more or less, EXCEPT
fifteen (15) rods by parallel lines off the North end thereof.
ALSO, 15 rods by parallel lines off of the North end of commencing at
the Northeast corner of the Southwest Quarter of the Southeast Quarter
of Xxxxxxx 00, Xxxxxxxx 0 Xxxxx, Xxxxx 0 Xxxx; thence West 19 rods and
4 1/2 feet; thence South 46 rods; thence East 19 rods and 4 1/2 feet;
thence North 46 rods to the place of beginning, containing 5 43/80
acres, more or less. Containing in the parcel of land hereby conveyed 1
319/400 acres.
(CONTINUED ON NEXT PAGE)
Countersigned by:
-----------------------------
Authorized Agent
Xxxxxxxx Xxxx, President
Schedule A Continued:
Policy No.: 000-00-000000
Property description by Survey
A part of the Southwest Quarter of the Southeast Quarter of Section 10, Township
8 North, Range 5 East, and more particularly described as follows:
Beginning at a pipe near a stone found marking the northeast corner of the
aforesaid quarter quarter; thence North 88 degrees 50 minutes 36 seconds West
assumed bearing based on plat of Woodside Business Center - Section Two as
recorded in Plat Book "0", page 71, along the north line of said quarter quarter
330.80 feet to a stone found; thence South 00 degrees 01 minute 44 seconds East
along the East line of Lot 1 in Woodside Business Center - Section Two a
distance of 760.43 feet to a wooden fence corner post found; thence South 88
degrees 27 minutes 57 seconds East along a north line of Tract 8A in the
aforesaid plat a distance of 325.59 feet to a pinch pipe found; thence North 00
degrees 22 minutes 00 second East along the East line of said Quarter Quarter
762.49 feet to the point of beginning, containing 5.74 acres.
TOGETHER with a 12 foot access easement running from the North line of said real
estate through the Northwest Quarter of the Southeast Quarter of Section 10,
Township 8 North, Range 5 East, to Xxxxxx Road.
-End of Schedule A -
Schedule 5.12
Leased Real Property
Net Lease, dated February 10, 1995, by and between Xxxxxxx Real Estate
Partnership, and Top Source Technologies, Inc., for a lease term of 5 years for
the premises at 1757 Larchwood, Xxxx, Xxxxxxxx 00000. Lease was extended via
letter dated July 20, 1999, by Xxxxx Xxxxx for a period of 3 years commencing on
March 1, 2000. Consent for Assignment of lease is dated September 29, 1999, by
Xxxxxx Xxxxxxx, partner of Xxxxxxx Real Estate Partnership.
Standard Office Lease, dated March 9, 2000, by and between Onkyo America and
North Island Federal Credit Union, for a lease term of 4 years commencing on
April 15, 2000, for Suite Number 204 at 0000 Xxxxxxx Xxxx, Xxxxx Xxxxx,
Xxxxxxxxxx.
Schedule 5.13
Equipment and Machinery
The following attached document sets forth a list of all material Equipment
and Machinery held for or used in the Business:
Onkyo America, Inc. Depreciation Expense Report as of April 30, 2000.
Schedule of Leases dated June 15, 2000.
Lease # Name & Address of Location Date of Expiration Model Number and Quantity Cost Per Note
Owner of Property Lease Date Description Regulation
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
87864 Mellon Leasing 3030 10/31/95 Canon NP6050 1 Unknown Original
XX Xxx 000 Xxxxxx Copier & Sorter Lease
Deerfield, IL Drive was
60015-0828 Columbus IN under
47201 First
United
Leasing
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
0011297-01 Pitney Xxxxx Same as 4/10/96 9/10/2000 Postage Meter & 1 Unknown New
201 Xxxxxxx Seven above Mailer Lease
Norwalk, CT signed
08856 2/01/00
36 months
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
001-0060853- Canon Financial Same as 10/30/97 10/30/02 Canon NP6085 1 29,255
001 Service above Copier
XX Xxx 00000
Xxxxxxxxxxxx, XX
00000
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
97164 CFC Investment Co Same as 4/17/97 4/17/00 Crown RR3520-45 3 92,736 Lease
XX Xxx 000000 above Ford Truck expired
Cincinnati, OH 4/17/00
45250-5496 Equipment
may be
purchased
for
$1.00
each
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
97635 CFC Investment Co. Same as 12/20/97 11/20/00 Crown RR3520-45 1 34,884 Equipment
XX Xxx 000000 above Ford Truck may be
Cincinnati, OH purchased
45250-5496 for $1.00
------------ -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
030612-69384 Toyota Motor Credit Same as 8/3/98 8/3/01 1998 Toyota Xxxxxx 0 28,722
XX Xxx 0000 xxxxx
Xxxxx Xxxxxx, XX
00000
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
209000 Industrial Services Same as 6/3/99 6/3/04 CC02 Compactor 1 17,100 Equipment
0000 Xxxxx Xxxx above may be
Louisville, KY purchased
40232 for
$1.00
Payment
made to
Computerized
Waste
Systems
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
Xxxxxxx Real Estate 1757 3/1/00 3/1/03 44,854 SF Building 1 659,295 Original
32900 Dequindre Larchwood lease
Xxxxxx, XX 00000 Troy, MI was
48083 signed
2/10/95
for 60
months
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
0038945-000 Caterpillar 1757 5/3/96 5/3/00 EC25E 1 26,387 Equipment
Financial Larchwood Lift Truck may be
XX Xxx 000000 Xxxx, XX purchased
Xxxxxx, XX 00000 for $1.00
75373-0669
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
North Island 2300 4/15/00 4/30/03 1149 SF 1 77,873
Federal CU Xxxxxxx Building
0000 Xx Xxxxx Xxxx
Xxxxxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000 Xxxxx XX
00000
------------- -------------------- ------------ ----------- ------------- ------------------- ----------- ------------- ----------
Changes to Schedule 5.13
Since June 29, 2000
Schedule 5.13
Equipment and Machinery
The following attached document sets forth a list of all material Equipment and
Machinery held for or used in the Business:
Onkyo America, Inc. Depreciation Expense Report as of April 30, 2000.
The liens on the Equipment and Machinery is set forth in the attached documents.
[ * ]
* Confidential portions omitted and filed separately with the Commission.
This Financing Statement is presented to Filing Officer for filing pursuant to
the Uniform Commercial Code Number of additional
Sheets presented
Debtor(s) (Last Name First) and Address(es) Secured Party(ies) and Address(es) For Filing Officer
Date Time Number and Filing Office)
ONKYO AMERICA, INC. FIRST UNITED LEASING
0000 XXXXXX XXXXX 100 CORPORATE NORTH
COLUMBUS, IN 47201 XXXXXXXXXXX, XX 00000
This Financing Statement covers the following Name and Address of
Assignee of Types (or items) of property (include description Secured
Party of real estate when collateral is crops)
1/CANON COPIER WITH 20 BIN
STAPLER/SORTER
THIS UCC-1 IS FILED TO GIVE NOTICE OF A TRUE LEASE BETWEEN THE PARTIES ABOVE
COVERING THE EQUIPMENT DESCRIBED ABOVE.
PO #32910
Debtor is a transmitting
Products of Collateral are also covered. (See IC 26-1-9-315)
------------------------------------------------------------------------
Filed with: Secretary of State Recorder of
_______________________ County
--------------- Collateral was brought into this state
subject to a security interest in another
jurisdiction or the Debtor's location has
been changed to this state.
By: _________________________ Filed in accordance with a security
Signature of Debtor (or agreement in signed by the Debtor
Secured Party authorizing the Secured Party to file this
IC 26-1-9 402(2))
(1) FILING OFFICER COPY - ALPHBETICAL
State Form 36751
FORM UCC-1-INDIANA UNIFORM COMMERCIAL CODE 9-1-88
Approved by: Xxxxxx X. Xxxxxxx Secretary of
State
This Financing Statement is presented to Filing Officer for filing pursuant to
the Uniform Commercial Code Number of additional Sheets presented
Sheets presented
Debtor(s) (Last Name First) and Address(es) Secured Party(ies) and Address(es) For Filing Officer
Date Time Number and
Filing Office)
Onkyo America, Inc. CFC Investment Company
0000 XXXXXX XXXXX 0000 X. Xxxxxxx Xxxx
XXXXXXXX, XX 00000 Xxxxxxxxx, XX 00000
This Financing Statement covers the following Name and Address of
Assignee of Types (or items) of property (include description Secured
Party of real estate when collateral is crops)
CROWN RR3520-45 ELECTRIC LIFT
#1A188988 TRUCK X/00-000X-00
XXXXXXX; TGW18-775 CHARGER
X Products of Collateral are also covered. (See IC 26-1-9-315)
------------------------------------------------------------------------
Filed with: X Secretary of State Recorder of County
Onkyo America, Inc. Collateral was brought into this state
subject to a security interest in another
jurisdiction or the Debtor's location has
been changed to this state.
By: _________________________ Filed in accordance with a security
Signature of Debtor (or agreement in signed by the Debtor
Secured Party authorizing the Secured Party to file this
IC 26-1-9 402(2))
Party to file this statement.
State Form 36751
FORM UCC-1-INDIANA UNIFORM COMMERCIAL CODE
INDEPENDENT PRINTING SERVICE EVANSVILLE, IN
(1) FILING OFFICER COPY- ALPHABETICAL
Approved by: Secretary of State
This Financing Statement is presented to Filing Officer for filing pursuant to
the Uniform Commercial Code Number of additional
Sheets presented
Debtor(s) (Last Name First) and Address(es) Secured Party(ies) and Address(es) For Filing Officer
Date Time Number and
Filing Office)
Onkyo America, Inc. LaSalle Bank National Association
0000 XXXXXX XXXXX 000 X. XxXxxxx Xxxxxx
XXXXXXXX, XX 00000 Xxxxxxx, XX 00000
This Financing Statement covers the following Name and Address of
Assignee of Types (or items) of property (include description Secured
Party of real estate when collateral is crops)
See Exhibit A attached hereto and made a part hereof.
Oversize
X Products of Collateral are also covered. (See IC 26-1-9-315)
------------------------------------------------------------------------
Filed with: X Secretary of State
Recorder of ____________________________ County
ONKYO AMERICA, INC.
Filed with: X Secretary of State Recorder of County
Onkyo America, Inc. Collateral was brought into this state
subject to a security interest in another
jurisdiction or the Debtor's location has
been changed to this state.
By: _________________________ Filed in accordance with a security
Signature of Debtor (or agreement signed by the Debtor
Secured Party authorizing the Secured Party to file this
IC 26-1-9 402(2)) statement.
State Form 36751 FORM UCC-1-INDIANA UNIFORM COMMERCIAL CODE
INDEPENDENT PRINTING SERVICE EVANSVILLE, IN
(1) FILING OFFICER COPY- ALPHABETICAL
cases covered by IC 26-1-9 402(2))
State Form 36751 Revised 1-1-88
FORM UCC-1-INDIANA UNIFORM COMMERCIAL CODE
Prescribed by: Xxx Xxxx Xxxxxx Secretary of State
CSC The United States CSC Springfield
Corporation 000 X. Xxxxxx Xxxxxx
---------------------------
X X X X X X X Xxxxxxxxxxx, XX 00000-0000
000-000-0000
000-000-0000 (Fax)
Matter# NA Order# 704735-5 Order Date 5/19/2000
Subject Name: ONKYO AMERICA, INC.
Jurisdiction: Indiana-STATE OF INDIANA
Request for: UCC Debtor Search
Result: Records found
File Type: Original
File Number: 2019913
File Date: 11/17/1995
Secured Party: First United Leasing
File Type: Original
File Number: 2116167
File Date: 04/04/1997
Secured Party: CFC Investment Company
File Type: Original
File Number: 2159755
File Date: 12/02/1997
Secured Party: CFC Investment Company
File Type: Original
File Number: 2281598
File Date: 09/24/1999
Secured Party: LaSalle Bank National
Association
Ordered by XX. XXXXXXX XXXX at ICE XXXXXX XXXXXXX & XXXX
Thank you for using CSC. For real-time 24 hour access to the status of any order
placed with CSC, access our website at xxx.xxxxxxx.xxx
If you have any questions concerning this order or IncSpot, please feel free to
contact us.
Xxxxxxx Xxxxxx
xxxxxxx@xxxxxxx.xxx
The responsibility for verification of the files and determination of the
information therein lies with the filing officer; we accept no liability for
errors or omissions.
Exhibit A
All property of the Debtor consisting of:
Accounts, Deposit Accounts, General Intangibles, Documents,
Instruments, Chattel Paper and any other similar rights however created
or evidenced, whether now existing or hereafter acquired or arising,
specifically, including, without limitation, invoices, contracts,
claims, leases, agreements, policies, binders or certificates of
insurance, deposits, documents of title, securities, security
interests, inventions, processes, formulae, licenses, patents, patent
rights, copyrights, copyright rights, trademarks, trademark rights, tax
refunds (federal, state or local), service marks, service xxxx rights,
trade names, trade name rights, customer lists, franchises, franchise
rights, drawings, designs, marketing rights and other like business
property rights and all applications to acquire such rights, for which
application may at any time be made by Borrower, together with any and
all books and records pertaining thereto and any right, title or
interest in any Inventory which gave rise to an Account:
Inventory, whether now existing or hereafter acquired and
wherever located, specifically including, without limitation, all
merchandise, personal property, raw materials, work in process,
finished Goods, materials and supplies of every nature usable or useful
in connection with the manufacturing, packing, shipping, advertising,
selling, leasing or furnishing of any of such Inventory and all
materials used or consumed or to be used or consumed in Borrower's
business, together with any and all books and records pertaining
thereto:
Equipment, Fixtures, Goods and all other tangible personal
property of every kind or nature, whether now owned or hereafter
acquired, wherever located, specifically including, without limitation,
machinery, trucks, boats, barges, on and off the road vehicles,
forklifts, tools, dies, jigs, presses, appliances, implements,
improvements, accessories, attachments, parts, partitions, systems,
carpeting, draperies and apparatus:
Products and Proceeds of each of the foregoing, specifically
including, without limitation, (i) any and all Proceeds of any
insurance, indemnity, warranty or guaranty payable to Borrower from
time to time, (ii) any and all payments of any form whatsoever made or
due and payable to Borrower from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the foregoing by any Governmental Authority, or any
Person acting under color of Governmental Authority, and (iii) any and
all other amounts from time to time paid or payable under or in
connection with any of the foregoing, whether or not in lieu thereof:
Renewals, extensions, replacements, modifications, additions,
improvements, accretions, accessions, betterments, substitutions,
replacements, annexations, tools, accessories, parts and the like now
in, attached to or which may hereafter at any time be placed in or
added to any Collateral whether or not of like kind; and
Rights, remedies, claims and demands under or in connection
with each of the foregoing.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Indiana Uniform Commercial Code.
Schedule 5.15(a)
Compliance with Laws
No exceptions, except for items disclosed in Schedules 5.15(b) and 5.16 which
could result in a determination that Onkyo America is not in compliance with
Section 5.15(a).
Changes to Schedule 5.15(a)
Since June 29, 2000
Schedule 5.15(a)
Compliance with Laws
1. Onkyo America, Inc. was issued a notice of non-compliance related to its
storm water permit from the Indiana Department of Environmental Management.
2. Onkyo America, Inc. has not prepared a storm water pollution plan for a
potential hydraulic fluid leak into the sump pump area in the elevator shaft.
Schedule 5.15(b)
Proceedings in Progress, Pending or Threatened Litigation
Xxxxxx and Xxxxx Xxxxxx v. Onkyo America, Inc., Cause No:
03D02-9812-CT-268, State of Indiana, Xxxxxxxxxxx County Superior Court No.2.
Claim of injury resulting from exposure to toxic fumes while servicing vending
machines.
Following the announcement of Onkyo America's proposed acquisition of Top Source
Automotive, Inc.'s ("TSA") assets from Top Source Technologies, Inc. ("TST"),
NCT group, in August 1999, raised an issue regarding provisions of a
Confidentiality and/or Proprietary Information agreement between it and TST/TSA.
Since Onkyo America's acquisition of TSA's assets in October 1999, neither NCT
nor its counsel has communicated further with Onkyo America.
Xxx Xxxxxxx v. Onkyo America, Inc., Equal Employment Opportunity Commission
("EEOC") Charge No. 240A01514, filed April 19, 2000.
Xxxxxx Xxxx v. Onkyo America, Inc., Cause No. 0240990868, EEOC Charge,
filed February 3, 1999. EEOC issued a dismissal of the charge on October 27,
1999. Xxxxxx had 90 days from his receipt of the determination to file suit.
Xxxxxx Xxxxxxxx v. Onkyo America Inc., Indiana Civil Rights Commission
Docket No. EMha98040325; EEOC Charge No. 24F980374, filed April 17, 1998.
Onkyo America terminated Xxxxxxx XxXxxxxxx for removing company/customer
property from the workplace. Counsel for XxXxxxxxx wrote requesting severance
pay on January 10, 2000. Onkyo America responded denying severance pay on
January 20, 2000. There has been no further communication between XxXxxxxxx and
Onkyo America.
Workers Compensation Claim No. 000-00000-00 regarding employee, Starranne
X. Xxxxxxx, for CTS right wrist injury.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Xxxxxx, for bilateral carpal tunnel syndrome.
Workers Compensation Claim No. 085-23389-AE regarding employee, Xxxx X.
Xxxxxx, for wrist left arm tendonitis.
Workers Compensation Claim No. 985-01941-AI regarding employee, Xxxxxxx X.
Xxxxxxx, for pain in right shoulder.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxxx X.
Xxxxx, for a bruised hand.
Workers Compensation Claim No. 085-17560-35 regarding employee, Xxxxx X.
XxXxx, for left wrist pain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxxx X.
Xxxxxxx, for right shoulder pain.
Workers Compensation Claim No. 016-15237AI regarding employee, Helde X.
Xxxxx, for a fractured right arm.
Workers Compensation Claim, Case No. 11744, regarding employee, Xxxxx X.
Xxxxx, for pain in both hands and wrists.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Quick, for a paraspinal muscle strain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxx X.
Xxxxxxx, for right shoulder pain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Xxxxxx, for right rotator cuff strain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx Xxxxx
Xxxx, for numbness in right pinky finger.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Xxxxx, for numbness in both hands and right shoulder pain.
Workers Compensation Claim, Case No. 472000, regarding employee, Xxxxxx X.
Xxxxx, for a bruise/right third digit contusion.
Workers Compensation Claim, Case No. 482000, regarding employee, Xxxxx X.
Xxxx, for bruise/right thumb contusion.
Workers Compensation Claim, Case No. 492000 regarding employee, Xxx X.
Xxxxxx, for pain in both hands and wrists.
Workers Compensation Claim, Case No. 502000 regarding employee, Xxxxxxx X.
Xxxxxxx, for bruise/right hand contusion.
Workers Compensation Claim, Case No. 512000 regarding employee, Xxxxxxxx X.
Xxxxx, for pain in both arms/wrists.
Changes to Schedule 5.15(b)
Since June 29, 2000
Schedule 5.15(b)
Proceedings in Progress, Pending or Threatened Litigation
Xxxxx Xxxxxxx v. Onkyo America, Inc., Cause No: XX00-0000X X/X, Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of Indiana, Indianapolis Division. Complaint
involves charges of age discrimination and breach of contract by an employee
that was fired.
Schedule 5.16
Litigation Which Could Have a Material Adverse Effect
Xxxxxx and Xxxxx Xxxxxx v. Onkyo America, Inc., Cause No:
03D02-9812-CT-268, State of Indiana, Xxxxxxxxxxx County Superior Court No.2.
Claim of injury resulting from exposure to toxic fumes while servicing vending
machines.
Following the announcement of Onkyo America's proposed acquisition of Top
Source Automotive, Inc.'s ("TSA") assets from Top Source Technologies, Inc.
("TST"), NCT group, in August 1999, raised an issue regarding provisions of a
Confidentiality and/or Proprietary Information agreement between it and TST/TSA.
Since Onkyo America's acquisition of TSA's assets in October 1999, neither NCT
nor its counsel has communicated further with Onkyo America.
Xxx Xxxxxxx v. Onkyo America, Inc., Equal Employment Opportunity Commission
("EEOC") Charge No. 240A01514, filed April 19, 2000.
Xxxxxx Xxxx v. Onkyo America, Inc., Cause No. 0240990868, EEOC Charge,
filed February 3, 1999. EEOC issued a dismissal of the charge on October 27,
1999. Xxxxxx had 90 days from his receipt of the determination to file suit.
Xxxxxx Xxxxxxxx v. Onkyo America Inc., Indiana Civil Rights Commission
Docket No. EMha98040325; EEOC Charge No. 24F980374, filed April 17, 1998.
Onkyo America terminated Xxxxxxx XxXxxxxxx for removing company/customer
property from the workplace. Counsel for XxXxxxxxx wrote requesting severance
pay on January 10, 2000. Onkyo America responded denying severance pay on
January 20, 2000. There has been no further communication between XxXxxxxxx and
Onkyo America.
Workers Compensation Claim No. 000-00000-00 regarding employee, Starranne
X. Xxxxxxx, for CTS right wrist injury.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Xxxxxx, for bilateral carpal tunnel syndrome.
Workers Compensation Claim No. 085-23389-AE regarding employee, Xxxx X.
Xxxxxx, for wrist left arm tendonitis.
Workers Compensation Claim No. 985-01941-AI regarding employee, Xxxxxxx X.
Xxxxxxx, for pain in right shoulder.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxxx X.
Xxxxx, for a bruised hand.
Workers Compensation Claim No. 085-17560-35 regarding employee, Xxxxx X. XxXxx,
for left wrist pain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxxx X.
Xxxxxxx, for right shoulder pain.
Workers Compensation Claim No. 016-15237AI regarding employee, Helde X. Xxxxx,
for a fractured right arm.
Workers Compensation Claim, Case No. 11744, regarding employee, Xxxxx X. Xxxxx,
for pain in both hands and wrists.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X. Quick,
for a paraspinal muscle strain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxx X.
Xxxxxxx, for right shoulder pain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Xxxxxx, for right rotator cuff strain.
Workers Compensation Claim No. 000-00000-00 regarding employee,
Xxxxx Xxxxx Xxxx, for numbness in right pinky
finger.
Workers Compensation Claim No. 000-00000-00 regarding employee,
Xxxxx X. Xxxxx, for numbness in both hands and
right shoulder pain.
Workers Compensation Claim, Case No. 472000, regarding employee,
Xxxxxx X. Xxxxx, for a bruise/right third digit
contusion.
Workers Compensation Claim, Case No. 482000, regarding employee, Xxxxx X. Xxxx,
for bruise/right thumb contusion.
Workers Compensation Claim, Case No. 492000 regarding employee, Xxx X. Xxxxxx,
for pain in both hands and wrists.
Workers Compensation Claim, Case No. 502000 regarding employee,
Xxxxxxx X. Xxxxxxx, for bruise/right hand
contusion.
Workers Compensation Claim, Case No. 512000 regarding employee, Xxxxxxxx X.
Xxxxx, for pain in both arms/wrists.
Changes to Schedule 5.16
Since June 29, 2000
Schedule 5.16
Litigation Which Could Have a Material Adverse Effect
Xxxxx Xxxxxxx v. Onkyo America, Inc., Cause No: XX00-0000X X/X, Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of Indiana, Indianapolis Division. Complaint
involves charges of age discrimination and breach of contract by an employee
that was fired.
Schedule 5.17(a)
Employee Benefit Plans
Onkyo America Employee Benefit Plan, effective as of March 1, 1989, amended
March 1, 2000.
Onkyo America Flexible Benefit Program, effective as of April 1, 1994.
Prism Prototype Retirement Plan & Trust, originally effective April 1, 1987,
and restated in its entirety effective April 1, 1999, and amended March
1, 2000.
Group Health Plan Summary Plan Document for the Employees of Onkyo America,
effective as of April 1, 1996.
Various other benefits are described in the Onkyo America Employee Handbook.
Schedule 5.17(d)
Liabilities Resulting from any Employee Plan
No exceptions.
Schedule 5.17(e)
Litigation Resulting from any Employee Plan
No exceptions.
Schedule 5.19
Licenses and Permits
None.
Schedule 5.20(a)
Personnel; Labor
[ * ]
* Confidential portions omitted and filed separately with the Commission.
Schedule 5.20(b)
Personnel and Labor Compliance
Xxxxxx Xxxx v. Onkyo America, Inc., Cause No. 0240990868, Equal Employment
Opportunity Commission ("EEOC") Charge, filed February 3, 1999. EEOC issued a
dismissal of the charge on October 27, 1999. Xxxxxx had 90 days from his receipt
of the determination to file suit.
Xxxxxx Clywell v. Onkyo America Inc., Indiana Civil Rights Commission Docket No.
EMha98040325; EEOC Charge No. 24F980374, filed April 17, 1998.
Xxx Xxxxxxx v. Xxxxx Xxxxxxx, Xxx., XXXX Xxxxxx Xx. 000X00000, filed April 19,
2000.
Workers Compensation Claim No. 000-00000-00 regarding employee, Starranne X.
Xxxxxxx, for CTS right wrist injury.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X. Xxxxxx,
for bilateral carpal tunnel syndrome.
Workers Compensation Claim No. 085-23389-AE regarding employee, Xxxx X. Xxxxxx,
for wrist left arm tendonitis.
Workers Compensation Claim No. 985-01941-AI regarding employee, Xxxxxxx X.
Xxxxxxx, for pain in right shoulder.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxxx X.
Xxxxx, for a bruised hand.
Workers Compensation Claim No. 085-17560-35 regarding employee, Xxxxx X. XxXxx,
for left wrist pain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxxx X.
Xxxxxxx, for right shoulder pain.
Workers Compensation Claim No. 016-15237AI regarding employee, Helde X. Xxxxx,
for a fractured right arm.
Workers Compensation Claim, Case No. 11744, regarding employee, Xxxxx X. Xxxxx,
for pain in both hands and wrists.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X. Quick,
for a paraspinal muscle strain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxxx X.
Xxxxxxx, for right shoulder pain.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Xxxxxx, for right rotator cuff strain.
Workers Compensation Claim No. 000-00000-00 regarding employee,
Xxxxx Xxxxx Xxxx, for numbness in right pinky finger.
Workers Compensation Claim No. 000-00000-00 regarding employee, Xxxxx X.
Xxxxx, for numbness in both hands and right shoulder pain.
Workers Compensation Claim, Case No. 472000, regarding employee, Xxxxxx X.
Xxxxx, for a bruise/right third digit contusion.
Workers Compensation Claim, Case No. 482000, regarding employee, Xxxxx X. Xxxx,
for bruise/right thumb contusion.
Workers Compensation Claim, Case No. 492000 regarding employee, Xxx X. Xxxxxx,
for pain in both hands and wrists.
Workers Compensation Claim, Case No. 502000 regarding employee,
Xxxxxxx X. Xxxxxxx, for bruise/right hand contusion.
Workers Compensation Claim, Case No. 512000 regarding employee, Xxxxxxxx X.
Xxxxx, for pain in both arms/wrists.
Changes to Schedule 5.20(b)
Since June 29, 2000
Schedule 5.20(b)
Personnel and Labor Compliance
1) Xxxxx Xxxxxxx v. Onkyo America, Inc., Cause No: XX00-0000X X/X, Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of Indiana, Indianapolis Division. Complaint
involves charges of age discrimination and breach of contract by an employee
that was fired.
Schedule 5.21
Insurance
Exp Date Policy Number Type of Coverage Carrier Coverage Amounts Estimated Annual
Premium
----------------- ----------------------- -------------------------------- -------------- ----------------------------------------
9/15/2000 AIR630202 Commercial Package CGU PROPERTY: $49,995
Blanket Limit = $26,045,500
Pers Prop at Unspecified location = $100,000
Pers Prop in Transit = $100,000
Business Income & Extra Expense = $24,559,800
(Limits per location previously provided)
INLAND MARINE INSURANCE:
Limit = $1 Million
BOILER & MACHINERY
INSURANCE: Limit = $1
Million ORDINANCE OR
LAW COVERAGE Limit =
$1 Million EARTHQUAKE
INSURANCE: Limit per
any one premises = $5
Million Limit any
single policy year =
$5 Million FLOOD
INSURANCE: Limit per
any one premises = $5
Million Limit any
single policy year =
$5 Million
----------------- ----------------------- -------------------------------- -------------- ----------------------------------------
9/15/2000 PLP0434751-01 Commercial General
Liability General General Aggregate Limit = $2 Million $10,851
Accident Products/Completed Operations Aggregate
Limit = $2 Million
Personal Injury &
Advertising Liability
Limit = $1 Million
Limit per Occurrence
= $1 Million Fire
Damage Limit =
$100,000 Medical
Expense Limit (any
one person) = $5,000
----------------- ----------------------- -------------------------------- -------------- ----------------------------------------
9/15/2000 CCR0152363-01 Crime Insurance General Blanket Limit = $100,000 $1,786
Accident Theft inside premises Limit = $10,000
Theft outside the premises Limit = $5,000
----------------- ----------------------- -------------------------------- -------------- ---------------------------------------
9/15/2000 BA0251587-01 Commercial Auto General Combined Single Limit = $1 Million $2,423
Accident Uninsured Motorist Limit = $1 Million
Underinsured Motorist
Limit = $1 Million
Hired & Non-Owned Auto
Limit = $1 Million
Medical Payments Per
Person = $2,000 Hired
or Borrowed Auto
Comprehensive =
$50,000 Hired or
Borrowed Auto
Collision = $50,000
----------------- ----------------------- -------------------------------- -------------- ----------------------------------------
9/15/2000 WC0083907-02 Workers'
Compensation General Bodily Injury by Accident = $100,000/accident $134,877
Accident Bodily Injury by Disease Policy Limit =
$500,000
Bodily Injury by Disease = $100,000/employee
----------------- ----------------------- -------------------------------- -------------- ----------------------------------------
9/15/2000 CC400674 Ocean Marine Commercial Vessel Limit = $400,000 $13,000
Union Aircraft Limit = $400,000
Cargo Limit = $40,000
----------------- ----------------------- -------------------------------- -------------- ---------------------------------------
9/15/2000 CVB0112856-00 Commercial
Umbrella CGU $5,000,000 Annual Limit of Liability $2,875
----------------- ----------------------- -------------------------------- -------------- ----------------------------------------
1/14/2001 90002524 Directors &
Officers Liability E-Risk Limit = $1,000,000 $8,325
Services
----------------- ----------------------- -------------------------------- -------------- ----------------------------------------
1/14/2001 ZE 0003880 Employment Practices Liability Pacific Limit = $1,000,000 $12,789
Insurance
Company
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
9/15/2000 PLP0434751-01 Commercial General General General Aggregate Limit = $2 Million $10,851
Liability Accident Products/Completed Operations Aggregate
Insurance Limit = $2 Million
Personal Injury &
Advertising Liability
Limit = $1 Million
Limit per Occurrence =
$1 Million Fire Damage
Limit = $100,000
Medical Expense Limit
(any one person) =
$5,000
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
9/15/2000 CCR0152363-01 Crime Insurance General Blanket Limit = $100,000 $1,786
Accident Theft inside premises Limit = $10,000
Insurance Theft outside the premises Limit = $5,000
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
9/15/2000 BA0251587-01 Commercial Auto General Combined Single Limit = $1 Million $2,423
Accident Uninsured Motorist Limit = $1 Million
Insurance Underinsured Motorist Limit = $1 Million
Hired & Non-Owned Auto
Limit = $1 Million
Medical Payments Per
Person = $2,000 Hired
or Borrowed Auto
Comprehensive =
$50,000 Hired or
Borrowed Auto
Collision = $50,000
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
9/15/2000 WC0083907-02 Workers' General Bodily Injury by Accident = $100,000/accident $134,877
Compensation Accident Bodily Injury by Disease Policy Limit =
Insurance $500,000
Bodily Injury by Disease = $100,000/employee
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
9/15/2000 C400674 Ocean Marine Commercial Union Vessel Limit = $400,000 $13,000
Insurance Aircraft Limit = $400,000
Cargo Limit = $40,000
----------------- --------------------- ---------------------------- ---------------------- -------------------------------------
3/31/2001 L45000-732016-98 Specific
& Aggregate Stop IAO Re $80,000 specific; 125% aggregate $88,146
Loss
----------------- --------------------- ---------------------------- ---------------------- -------------------------------------
3/31/2000 40500 Administrative
Services SIHO N/A $61,968
Contract
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
3/31/2001 Vision Care Insurance MECA Scheduled amounts per procedure. $67,726
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
3/31/2001 Employee Assistance Plan Quinco
Behavioral $12,144
Health
----------------- --------------------- ---------------------------- ---------------------- --------------------------------------
June 29, 2000
Schedule 5.22 Contracts and Commitments
1) Employment Agreement, dated November 1, 1996, by and between Onkyo America
and Xxxxxxx X. Pillow and amendments.
2) Employment Agreement, dated August 22, 1997, by and between Onkyo America and
Xxxxxx X. Xxxxxx and amendments.
3) Employment Agreement, dated June 1, 1998, by and between Onkyo America and
Xxxxxx Xxxxxxx and amendments.
Employment Agreement, dated February 1, 2000, by and between Onkyo America
Specialty Products, Inc. and Xxxxx X. Xxxxxx.
Employment Agreement, dated February 1, 2000, by and between Onkyo America
Specialty Products, Inc. and Xxx X. Xxxxxx.
Employment Agreement, dated February 1, 2000, by and between Onkyo America
Specialty Products, Inc. and Xxxxx Xxxxxx.
Confidential and or Proprietary Information Agreement, dated August 13, 1998, by
and between Onkyo America, Inc. and Noise Cancellation Technologies, Inc.
Confidentiality and Non-Competition Agreement, dated April 16, 1998, by and
between Onkyo America, Inc. and Parametric Technology Corporation.
Reciprocal Non-Disclosure Agreement, dated September 18, 1996, by and between
Onkyo America, Inc. and Chase Technologies. Confidentiality Agreement, dated
April 21, 1998, by and between Onkyo America, Inc. and Honda of America
Mfg./Honda R&D Americas, Inc.
Letter Agreement to Hold Information Confidential, dated July 10, 1998, by
and between Onkyo America and Nissan Research & Development, Inc. and
Nissan Motor Manufacturing Corporation U.S.A.
Non-Disclosure Confidentiality Agreement, dated November 15, 1999, by and
between Onkyo America and Immersion Graphics Corporation.
Mutual Non-Disclosure Agreement, dated January 24, 2000, by and between Onkyo
America and Rockford Corporation.
Non-Disclosure Agreement, dated August 7, 1996, by and between Onkyo America and
Advantage Cutting & Gasket, Inc.
Non-Disclosure Agreement, date unknown, by and between Onkyo America and Boston
Acoustics, Inc.
Confidentiality and Non-Competition Agreement, dated July 29, 1997, by and
between Onkyo America and Audax Industries.
Agreements, by and between Onkyo America and LaSalle Bank: Third Amended and
Restated Credit Agreement dated February 29, 2000 Second Replacement Credit Note
dated February 29, 2000 First Replacement Mortgage Note dated February 29, 2000
First Replacement Term Note dated February 29, 2000
Real Estate Mortgage, Assignment of Rents and Leases; Security Agreement and
Fixture Filing dated November 30, 1999.
Security Agreement dated September 24, 1999
Security Agreement for Onkyo America Specialty Products dated February 29, 2000
Stock Pledge Agreement
Supplier and Buyer Agreement, dated January 24, 2000, by and between Onkyo
America and Onkyo Malaysia Sdn. Bhd., appointing Onkyo America as distributor
for Onkyo Malaysia Sdn. Bhd.'s speakers in North America.
Loan Agreement dated October 26, 1998, by and between Onkyo Corporation and
Onkyo America, Inc. for $1 million.
Pre-Acquisition Confidentiality Agreement dated April 27, 2000, by and between
Onkyo America and Xxxx Manufacturing, LLC regarding the proposed purchase of
assets of Xxxx.
Changes to Schedule 5.22
Since June 29, 2000
Schedule 5.22
Contracts and Commitments
Agreement by and between Xxxx Manufacturing, LLC and Onkyo America, Inc.
regarding the proposed purchase of assets of Xxxx Manufacturing, LLC.
Letter dated August 11, 2000, to Xxxx Pillow of Onkyo America, Inc. from Xxxx
Xxxxxx of Xxxx Manufacturing, LLC regarding the interpretation of certain
language in the confidentiality and asset acquisition agreements between Onkyo
America, Inc. and Xxxx Manufacturing, LLC.
Joint Unanimous Resolution of the Board of Directors and Shareholders of Onkyo
America, Inc., dated August 1, 2000, regarding indemnification.
Agreements, by and between Onkyo America, Inc., Onkyo America Specialty
Products, Inc., and LaSalle Bank as set forth below:
Third Amended and Restated Credit Agreement dated February 29, 2000 among
LaSalle Bank, Onkyo America, Inc. and Onkyo America Specialty Products, Inc.,
as amended by First Amendment to Third Amended and Restated Credit Agreement
dated as of June 19, 2000.
Second Replacement Credit Note dated February 29, 2000 (Onkyo America, Inc.
and Onkyo America Specialty Products, Inc. as co-borrowers).
First Replacement Mortgage Note dated February 29, 2000 (Onkyo America, Inc.
and Onkyo America Specialty Products, Inc. as co-borrowers).
First Replacement Term Note dated February 29, 2000 (Onkyo America, Inc. and
Onkyo America Specialty Products, Inc. as co-borrowers).
Real Estate Mortgage, Assignment of Rents and Leases; Security Agreement and
Fixture Filing dated November 30, 1999 by and between Onkyo America, Inc. and
LaSalle Bank.
Security Agreement dated September 24, 1999 by and between Onkyo America, Inc.
and LaSalle Bank.
Security Agreement for Onkyo America Specialty Products dated February 29, 2000.
Stock Pledge Agreement by and between Onkyo America, Inc. and LaSalle Bank.
Schedule 5.23
Customers and Supplies
No exceptions.
[ * ]
* Confidential portions omitted and filed separately with the Commission.
Customers Greater than 5% of 1999 Sales
CUSTOMER ANNUAL SALES PERCENT
Delco 48,200,351 64.39%
[ * ] [ * ] [ * ]
[ * ] [ * ] [ * ]
* Confidential portions omitted and filed separately with the Commission.
Schedule 5.24
Severance Arrangements
Employment Agreement, dated November 1, 1996, by and between Onkyo
America and [ * ].
Employment Agreement, dated August 22, 1997, by and between Onkyo America and
[ * ].
Employment Agreement, dated June 1, 1998, by and between Onkyo America and
[ * ].
Employment Agreement, dated October 1, 1999, by and between Onkyo America and
[ * ].
Employment Agreement, dated October 1, 1999, by and between Onkyo America and
[ * ].
Employment Agreement, dated October 1, 1999, by and between Onkyo America and
[ * ].
Employment Agreement, dated June 1, 1997, by and between Onkyo America and Xxx
Xxxxxxx.
* Confidential portions omitted and filed separately with the Commission.
Schedule 5.25
Shareholders
Onkyo Corporation owns of record and beneficially 1,770 common shares.
Onkyo Malaysia Sdn. Bhd. owns of record and beneficially 2,065 common shares.
Onkyo Europe Electronics GMBH owns of record and beneficially 2,065 common
shares.
Buyer owns 100 issued and outstanding preferred shares.
Schedule 5.26
Broker's and Finder's Fees
None.
Schedule 5.29
Intellectual Property
1) Patent Number 4,673,056 for Loudspeaker System.
2) Patent Number 4,099,026 for Loudspeaker for vehicles.
3) Patent Number 5,527,587 for Trim and Piece Method for Making Same.
4) Patent Number 5,094,316 for Overhead Speaker System for Use in
Vehicles.
5) Patent Number 5,606,623 for Overhead Vehicle Loud Speaker Cabinet XJ
System.
6) Patent Number 5,546,381 for Mounted Sound Horn.
7) Subwoofer and cone technology owned by Onkyo Corporation: Patent
Number 4,377,617 for Loudspeaker Diaphragm and Process for Producing
Same. Patent Number 4,709,392 for Dome Speaker with a Diaphragm Having
at Least One Elongated Cut-out Portion. Patent Number 5,205,897
for Method of Bonding Loudspeaker Diaphragm, owned by Onkyo
Corporation.
8) Trademark License Agreement, by and between Onkyo Corporation and Onkyo
America, Inc. dated January 1, 1999 for the Onkyo Trademark.
9) Access to Design Database.
Changes to Schedule 5.22
Since June 29, 2000
Schedule 5.29
Intellectual Property
10) Patent Number 4,099,026 for Loudspeaker for vehicles has expired.
11) Patent Application Serial Number 9/332,844 for Loudspeaker Assembly and
Method of Assembly for same was filed on June 14, 1999. Patent is pending.
12) The Patent Number for the Mounted Sound Horn was incorrectly stated as
5,546,381. The correct patent number is 5,646,381.
Schedule 6.04
Consents and Approvals
None.
Schedule 6.08
Broker's and Finder's Fees
No exceptions.
Schedule 8.07
Distribution and Technical Services Agreement
The following documents are attached:
8.07(a). Distribution and Technical Services Agreement, dated
_______________, by and between Onkyo Corporation and Onkyo America, appointing
Onkyo America as Onkyo Group's exclusive distributor for certain speakers in
Canada, the United States, Mexico, and South America.
8.07(b). Distribution Agreement, dated _________________, by and
between Onkyo Corporation and Onkyo America, appointing Onkyo Corporation as
Onkyo America's exclusive distributor for certain speakers in Asia.
7
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT ("Agreement") is made and entered into as
of this ______ day of _______ 2000, by and between Onkyo America, Inc., an
Indiana corporation ("Onkyo America"), and Onkyo Corporation, a Japanese
corporation ("Onkyo Japan").
RECITALS
WHEREAS, Onkyo Japan is engaged in the worldwide manufacture,
distribution and sale of audio products, including speakers for various
applications.
WHEREAS, Onkyo Japan conducts its business, in part, through a number
of companies which Onkyo Japan controls, directly or indirectly, including (but
not limited to) stock ownership, through contract, or otherwise. For the purpose
of the foregoing, the term "control" means the possession of the powers to elect
or appoint the majority of the members of the board of directors (or other body
performing similar functions), or to control the outcome of decisions concerning
the matters contemplated by this Agreement.
WHEREAS, Onkyo America is engaged in the manufacture, distribution and
sale of speakers in Canada, the United States and Mexico and intends to expand
its activities to market and sell speakers in Japan and Asia (collectively, the
"Territory") and elsewhere;
WHEREAS, on or about the date of this Agreement certain members of the
Onkyo Group are entering into a Share Purchase Agreement to sell all of the
outstanding Onkyo America common shares to Global Technovations, Inc.;
WHEREAS, to ensure access to an effective distribution channel for
Onkyo America Speakers in the Territory after the share acquisition is complete,
Onkyo America wishes to appoint Onkyo Japan as its exclusive distributor in the
Territory for Onkyo America Speakers, as defined in Section 1.1 of this
Agreement, and to assist Onkyo Japan in developing the market for such Onkyo
America Speakers in the Territory; and
WHEREAS, Onkyo Japan wishes to accept that appointment and serve as
Onkyo America's exclusive distributor for Onkyo America Speakers in the
Territory;
NOW THEREFORE, Onkyo America and Onkyo Japan (individually, a "Party"
and collectively, the "Parties"), in consideration of the mutual promises set
forth herein, hereby agree as follows:
Article I
Terms and Conditions
Section 1.1. Appointment as Exclusive Distributor in the Territory.
(a) Onkyo America hereby appoints Onkyo Japan as the exclusive
distributor in the Territory for all Onkyo America Speakers which are sold by
Onkyo America in the Territory. "Onkyo America Speakers" are all automotive
speakers, office equipment speakers, television speakers and telephone speakers
(but not home theater speakers or home stereo speakers) manufactured or
assembled by Onkyo America.
(b) Unless waived in writing by Onkyo Japan pursuant to Section 1.2(a)
or sold unintentionally as provided in Section 1.2(b), Onkyo America shall not,
directly or indirectly, sell, manufacture or assemble any Onkyo America Speakers
for delivery in the Territory (or engage in acts or practices with respect to
any such Onkyo America Speakers, directly or indirectly including through
independent contractors or agents, which are customarily part of the
manufacturing or assembly process including but not limited to quality control
or inspection) (such acts and practices, "Added Services") or allow or cause any
other person or entity under Onkyo America's control, as such term is defined in
the second paragraph of the Recitals to this Agreement to do any of the
foregoing acts, other than through Onkyo Japan (or another distributor or
sub-distributor approved or appointed by Onkyo Japan) unless:
(i) such sale was made unintentionally; or
(ii) the Onkyo America Speakers are contained in Finished
Products manufactured or assembled outside the Territory and delivered into the
Territory without the addition of any Added Services performed in the Territory.
The term "Finished Products" shall mean products into which speakers are
incorporated and that are ultimately sold or re-sold in substantially such form
to consumers or end-users (including corporations or other entities for their
own use); or
(iii) such sale is permitted pursuant to Section 1.2 hereof.
(c) Onkyo America shall use its reasonable best efforts to refer (and
shall cause any person or entity under Onkyo America's control to use their
reasonable best efforts to refer) to Onkyo Japan all inquiries and orders for
Onkyo America Speakers received for delivery of Onkyo America Speakers into the
Territory (except as otherwise provided by this Agreement). If, after referring
inquiries and orders for delivery in the Territory to Onkyo Japan, a customer
demands that Onkyo America sell directly to that customer, Onkyo America may
sell Onkyo America Speakers to the customer for delivery in the Territory
provided that Onkyo America gives written notice to Onkyo Japan within 60 days
and Onkyo Japan is paid a commission on such sales in an amount equal to [ * ].
Commissions shall be paid for deliveries of Onkyo America Speakers into the
Territory, on [ * ].
(d) Nothing contained in this Agreement shall preclude Onkyo Japan from
purchasing components and other products competitive with Onkyo America Speakers
from third parties.
Section 1.2 Permitted Onkyo America Sales.
Notwithstanding the exclusive distributorship rights of Onkyo Japan,
Onkyo America or any Onkyo America affiliate may, directly or indirectly, sell
Onkyo America Speakers for delivery into the Territory:
* Confidential portions omitted and filed separately with the Commission.
(a) If and to the extent that the Chief Executive Officer or a Director
of Onkyo Japan shall have been advised by Onkyo America or any Onkyo America
affiliate of the material facts concerning the intention of Onkyo America or any
Onkyo America affiliate to make such sales and deliveries, and Onkyo Japan
waives in writing the opportunity to be the exclusive distributor with respect
to such sales and deliveries, either unconditionally or conditionally upon
payment of a commission or other compensation. Such waiver may not be
unreasonably withheld in view of Onkyo Japan's business plans, proposals and
opportunities as they exist at the time of the requested waiver, the amount of
commissions to be paid to Onkyo Japan, and the effect of any of the foregoing
factors on Onkyo Japan's business. Onkyo Japan's refusal to grant a waiver to
permit a sale to an existing customer shall be conclusively presumed to be
reasonable. "Existing customer" shall mean an Onkyo Japan customer (or affiliate
of a customer) to which Onkyo Japan or any Onkyo Group member has sold a similar
product within the prior year. Each waiver shall be limited to the proposed
transaction unless otherwise specified in the waiver; or
(b)(i) If, and to the extent that such sales and deliveries are made
unintentionally by Onkyo America. Sales and deliveries into the Territory shall
be deemed to have been made intentionally by Onkyo America if (by reason of
notification by Onkyo Japan or otherwise) the fact of such sales and deliveries
into the Territory shall have become known to the Chief Executive Officer or any
Director of Onkyo America, and Onkyo America, within 30 days of such
executive(s) having acquired such knowledge, have not agreed with the Chief
Executive Officer of Onkyo Japan either to (A) discontinuance by Onkyo America
of all such future sales or deliveries into the Territory or (B) the terms and
conditions under which Onkyo Japan will allow such sales and deliveries to
continue. Such terms and conditions shall include a definitive agreement
concerning the timing of payment of commissions or other compensation to be paid
to Onkyo Japan on past unpermitted sales and future permitted sales or
deliveries of Onkyo America Speakers by Onkyo America, and such other
conditions, as the Chief Executive Officer of Onkyo Japan shall, in his
discretion, deem acceptable.
(ii) If, after discontinuing the unauthorized shipment of Onkyo
America Speakers into the Territory, Onkyo America again ships Onkyo America
Speakers into the Territory, to the same customer, such sale shall be deemed
intentional.
(iii) If, unless otherwise agreed in writing between the Chief
Executive Officer of Onkyo Japan and Onkyo America, (A) Onkyo America
establishes, to the reasonable satisfaction of the Chief Executive Officer of
Onkyo Japan, that, in light of the relationship with Onkyo America's customer
which has been involved in the sales and delivery at issue, it is commercially
difficult or impracticable to discontinue such sale and delivery and to refer
such transactions to Onkyo Japan, and (B) Onkyo America will pay to Onkyo Japan
commissions for such past unpermitted sales (payable immediately) and for future
sales (payable on January 10 (for the period July 1 through and including
December 30) and on July 10 (for the period January 1 through and including June
30), then Onkyo Japan shall allow such sales and delivery to continue.
(iv) If, on more than one occasion Onkyo America fails to
forward an inquiry to Onkyo Japan, regardless of whether it has used its
reasonable best efforts, and such inquiry leads to sales of Onkyo America
Speakers which are fulfilled by Onkyo America, such sales shall be deemed
intentional.
(c) Unless otherwise agreed upon in writing by the Chief Executive
Officer of Onkyo America, the commissions referred to in this Agreement shall be
equal to 3.5% of the net sales price.
Section 1.3. Inspection Rights.
During each calendar year of the Term, as defined, and within 90 days
after expiration of the Term, Onkyo Japan, through its employees and
accountants, shall have the right to review the books and records of Onkyo
America or any affiliate which gives notice to Onkyo Japan as described in
Section 1.2. If any review reveals that commissions are owed to Onkyo Japan, the
commissions shall be promptly paid to it together with 6.5% per annum interest
at the Federal Funds rate (determined as of the date on which the sale relating
to the commission occurred), and if the total unpaid commissions exceed 5% of
commissions that would have been paid during the timeframe of the review, Onkyo
America or its affiliates shall promptly reimburse Onkyo Japan for its costs of
the review including the reasonable fees and costs of its accountants.
Section 1.4. Future Restrictions.
Onkyo America agrees that it shall take whatever action is necessary to
cause any current or future persons or entities under Onkyo America's control,
to adhere to and comply with this Agreement during the Term. In furtherance of
this covenant and agreement, Onkyo America or any Onkyo America affiliate shall
not sell the assets or equity interests of Onkyo America (except for a public
offering of securities) outside of the ordinary course of business (including
through any merger, consolidation or similar transaction) unless the purchaser
agrees to be bound by this Agreement during the Term by becoming a party to this
Agreement and not use the name "Onkyo" in the Territory.
Section 1.5. Remedies for Violation.
If Onkyo America or any Onkyo America affiliate violates the exclusive
appointment provisions of Sections 1.1, or 1.2, Onkyo Japan may, at its sole
discretion, exercise any one or more of the following options or any other legal
or equitable remedies available to Onkyo Japan under applicable law.
(a) Onkyo Japan may seek injunctive relief preventing Onkyo America
and/or any Onkyo America affiliate responsible for the violation (each a
"Defendant") from continuing to sell into the Territory;
(b) Onkyo Japan may require Onkyo America (and/or any other Onkyo
America affiliate responsible for the violation) to reimburse Onkyo Japan for
any damages that may result from the conduct that violates the exclusivity of
this Agreement;
(c) Onkyo Japan may require the Defendant(s) to account to
Onkyo Japan and pay it any profits made by the Defendant(s) on sales that
violate Sections 1.1 or 1.2;
(d) Onkyo Japan may offset any damages or profits to which it is
entitled under Section 1.5 (b) or (c) against sums owed to Onkyo America whether
represented by notes, royalties or accounts payable;
(e) Onkyo Japan may terminate this Agreement pursuant to the provisions
of Article III (including compliance with the 30 day notice period) without
penalty to Onkyo Japan.
(f) The remedies set forth under Section 1.5 (b) and (c) above are
mutually exclusive. However, Onkyo Japan may elect its choice of remedy at the
conclusion of the presentation of evidence in an arbitration proceeding.
Article III
Term
This Agreement shall be in effect until [ * ] (the "Term"), unless
earlier terminated for breach or amended or extended by mutual agreement of the
Parties in writing. Either Party may terminate this Agreement in the event of
the filing of any voluntary or involuntary petition to declare the other Party
insolvent or bankrupt that is not dismissed within 30 days; or making an
assignment or other arrangement for the benefit of creditors of such other
Party; or such other Party being dissolved or liquidated.
Article IV
Miscellaneous
Section 4.1. Governing Law.
This Agreement shall be construed and enforced in accordance with, and
governed by, the laws of Japan (without giving effect to the principles of
conflicts of laws thereof).
Section 4.2. Arbitration.
The Parties agree to attempt to resolve any dispute which arises under
this Agreement amicably and in good faith. Any dispute arising under or in
connection with this Agreement which cannot be resolved amicably and in good
faith within 30 days shall be resolved by three arbitrators by the American
Arbitration Association in arbitration proceedings conducted in Indianapolis,
* Confidential portions omitted and filed separately with the Commission.
Indiana, in accordance with the American Arbitration Association's commercial
arbitration rules. The decision of the arbitrators shall be final and binding
and shall be enforceable in any court of competent jurisdiction; provided,
however, that any Party may, as appropriate, seek temporary injunctive relief in
any court of competent jurisdiction. In any such arbitration proceeding, the
Parties agree to provide all discovery deemed necessary by the arbitrators. Any
award made by the arbitrators shall be final, binding and conclusive on all
Parties for all purposes, and judgment may be entered thereon in any court
having jurisdiction.
Section 4.3. Severability.
To the extent that any part of this Agreement is determined to be
invalid, illegal or unenforceable, such part shall be deleted and the remaining
provisions of this Agreement shall remain in effect.
Section 4.4. Waiver.
Failure by either Party to promptly enforce any of its rights hereunder
shall not constitute a waiver of future violations of such rights or preclude
such Party from enforcing future breaches of such rights.
Section 4.5. Entire Agreement.
This Agreement supersedes any prior discussions between the Parties
related to the distribution of Onkyo America Speakers by Onkyo Japan.
Section 4.6. Notices.
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a) on
the date of service if served personally on the Party to whom notice is to be
given, (b) on the day of transmission if sent via facsimile transmission to the
facsimile number given below, provided that telephonic confirmation of receipt
is obtained from the designated person for the recipient promptly after
completion of transmission, (c) three days after delivery to an express courier
service or the Express Mail service.
To: Onkyo Corporation
0-0, Xxxxxxx-Xxx, Xxxxxxxx-Xxx
Xxxxx 000-0000 Xxxxx
Attn: Xxxxx Xxxxxx, Chairman &
Chief Executive Officer
Telephone No.: 0000-00-0000
Facsimile No.: 0000-00-0000
To: Onkyo America, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxxxxxx, President
Tel: 812-342-0332 ext. 106
Fax: 000-000-0000
Section 4.7. Assignability.
This Agreement may not be assigned by either Party without the prior
written consent of the other, provided, however, that if a Party is not the
surviving party to a merger or sells all or substantially all of its assets,
such Party (and any successor hereunder) may assign these contractual rights
without further approval.
IN WITNESS WHEREOF, the Parties have, by their duly authorized
representatives, executed this Agreement as of the date first set forth above.
ONKYO CORPORATION ONKYO AMERICA, INC.
("Onkyo Japan") ("Onkyo America")
By:___________________________ By:_______________________________
Xxxxx Xxxxxx, Chairman & CEO Xxxxxxx Xxxxxxxxx, President
DISTRIBUTION AND TECHNICAL SERVICES AGREEMENT
THIS DISTRIBUTION AND TECHNICAL SERVICES AGREEMENT ("Agreement") is
made and entered into as of this _____ day of __________________, 2000, by and
between Onkyo America, Inc., an Indiana corporation ("Onkyo America"), and Onkyo
Corporation, a Japanese corporation ("Onkyo Japan").
RECITALS
WHEREAS, Onkyo Japan is engaged in the worldwide manufacture,
distribution and sale of audio products, including speakers for various
applications and electronic home audio products;
WHEREAS, Onkyo Japan conducts its business, in part, through a number
of companies which Onkyo Japan controls, directly or indirectly, including (but
not limited to) stock ownership, through contract, or otherwise. For the purpose
of the foregoing, the term "control" means the possession of the powers to elect
or appoint the majority of the members of the board of directors (or other body
performing similar functions), or to control the outcome of decisions concerning
the matters contemplated by this Agreement.
WHEREAS, Onkyo America is engaged in the manufacture, distribution and
sale of speakers in Canada, the United States and Mexico and intends to expand
its activities to market and sell speakers in Central and South America;
WHEREAS, on or about the date of this Agreement certain members of the
Onkyo Group are entering into a Share Purchase Agreement to sell all of the
outstanding Onkyo America common shares to Global Technovations, Inc.;
WHEREAS, to ensure continued access to an effective distribution
channel for its products in Canada, the United States, Mexico and Central and
South America (the "Territory") after the share acquisition is complete, Onkyo
Japan wishes to appoint Onkyo America as its exclusive distributor in the
Territory for certain speakers manufactured by or for the Onkyo Group, and to
assist Onkyo America in developing the market for such speakers in the
Territory; and
WHEREAS, Onkyo America wishes to accept that appointment and serve
as Onkyo Group's exclusive distributor for certain speakers in the Territory;
NOW THEREFORE, Onkyo America and Onkyo Japan (individually, a
"Party" and collectively, the "Parties"), in consideration of the mutual
promises set forth herein, hereby agree as follows:
Article I
Terms and Conditions
Section 1.1. Appointment as Exclusive Distributor in the Territory.
(a) Onkyo Japan hereby appoints Onkyo America as the exclusive
distributor in the Territory for all of the following types of speakers
manufactured or assembled by or for any member of the Onkyo Group: automotive
speakers; office equipment speakers including those used with or assembled in
the Territory for installation or use in computers; television speakers; and
cellular or other telephone speakers. The exclusive distribution rights exclude
(i) electronic home audio products, home theater speakers or home stereo
speakers which are hereafter referred to collectively as Home Audio Products,
and (ii) the speakers which are incorporated into "Finished Products" as
described in Section 1.1 (b)(ii) hereof. The automotive speakers, office
equipment speakers, television speakers and telephone speakers manufactured or
assembled by or for members of the Onkyo Group, other than those products
referred to in (i) and (ii) above, shall be referred to herein as "Onkyo Group
Speakers". Onkyo Japan shall give notice of Onkyo America's rights under this
Agreement to each member of the Onkyo Group as soon as practicable following the
execution of this Agreement.
(b) Unless waived in writing by Onkyo America pursuant to Section
1.2(a) or sold unintentionally as provided in Section 1.2(b), neither Onkyo
Japan nor any member of the Onkyo Group shall, directly or indirectly, sell,
manufacture or assemble any Onkyo Group Speakers for delivery in the Territory
(or engage in acts or practices with respect to any such Onkyo Group Speakers,
directly or indirectly including through independent contractors or agents,
which are customarily part of the manufacturing or assembly process including
but not limited to quality control or inspection) (such acts and practices,
"Added Services") or allow or cause any other member of the Onkyo Group to do
any of the foregoing acts other than through Onkyo America (or another
distributor or sub-distributor approved or appointed by Onkyo America) unless:
(i) such sale was made unintentionally, or;
(ii) the Onkyo Group Speakers are contained in Finished
Products manufactured or assembled outside the Territory and delivered into the
Territory without the addition of any Added Services performed in the Territory.
The term "Finished Products" shall mean products into which speakers are
incorporated and that are ultimately sold or re-sold in substantially such form
to consumers or end-users (including corporations or other entities for their
own use); or
(iii) such sale is permitted pursuant to Section 1.2 hereof.
(c) Onkyo Japan shall use its reasonable best efforts to refer (and
shall cause other members of the Onkyo Group to use their reasonable best
efforts to refer) to Onkyo America all inquiries and orders for Onkyo Group
Speakers received for delivery of Onkyo Group Speakers into the Territory,
regardless of whether the customer is located in the Territory (except as
otherwise provided by this Agreement). If, after referring inquiries and orders
for delivery in the Territory to Onkyo America, a customer demands that a member
of the Onkyo Group sell directly to that customer, the Onkyo Group member may
sell Onkyo Group Speakers to the customer for delivery in the Territory provided
that the member of the Onkyo Group gives written notice to Onkyo America within
60 days and Onkyo America is paid a commission on such sales in an amount equal
to [ * ]. Commissions shall be paid for deliveries of Onkyo Group Speakers into
the Territory, on [ * ].
(d) Nothing contained in this Agreement shall preclude Onkyo America
from purchasing components and other products competitive with Onkyo Group
Speakers from third parties; provided, however, that Onkyo America shall not
resell, in Asia, speakers produced by the following Japanese competitors of
Onkyo Japan: Xxxxxx, Pioneer, Panasonic, Minebea, Tokyo Cone and any and all
entities which these entities control.
Section 1.2. Permitted Onkyo Japan Sales.
Notwithstanding the exclusive distributorship rights of Onkyo America,
Onkyo Japan or any other member of the Onkyo Group may, directly or indirectly,
sell Onkyo Group Speakers for delivery into the Territory:
(a) If and to the extent that the Chief Executive Officer of Onkyo
America shall have been advised by Onkyo Japan or any other member of the Onkyo
Group of the material facts concerning the intention of the Onkyo Group to make
such sales and deliveries, and Onkyo America waives in writing the opportunity
to be the exclusive distributor with respect to such sales and deliveries,
either unconditionally or conditionally upon payment of a commission or other
compensation. Such waiver may not be unreasonably withheld in view of Onkyo
America's business plans, proposals and opportunities as they exist at the time
of the requested waiver, the amount of commissions to be paid to Onkyo America,
and the effect of any of the foregoing factors on Onkyo America's business.
Onkyo America's refusal to grant a waiver to permit a sale to an existing
customer shall be conclusively presumed to be reasonable. "Existing customer"
shall mean an Onkyo America customer (or affiliate of a customer) to which Onkyo
America has sold a similar product within the prior year. Each waiver shall be
limited to the proposed transaction unless otherwise specified in the waiver; or
* Confidential portions omitted and filed separately with Commission.
(b) (i) If and to the extent that such sales and deliveries are made
unintentionally by Onkyo Japan or other members of the Onkyo Group. Sales and
deliveries into the Territory shall be deemed to have been made intentionally by
the Onkyo Group if (by reason of notification by Onkyo America or otherwise) the
fact of such sales and deliveries into the Territory shall have become known to
the Chief Executive Officer or any Director of Onkyo Japan or any other member
of the Onkyo Group, and the Onkyo Group, within 30 days of such executive(s)
having acquired such knowledge, have not agreed with the Chief Executive Officer
of Onkyo America either to (A) discontinuance by the Onkyo Group of all such
future sales or deliveries into the Territory or (B) the terms and conditions
under which Onkyo America will allow such sales and deliveries to continue. Such
terms and conditions shall include a definitive agreement concerning the timing
of payment of commissions or other compensation to be paid to Onkyo America on
past unpermitted sales and future permitted sales or deliveries of Onkyo Group
Speakers by the Onkyo Group, and such other conditions, as the Chief Executive
Officer of Onkyo America shall, in his discretion, deem acceptable.
(ii) If, after discontinuing the unauthorized shipment of Onkyo Group
Speakers into the Territory, an Onkyo Group member again ships Onkyo Group
Speakers into the Territory, to the same customer, such sale shall be deemed
intentional.
(iii) If, unless otherwise agreed to in writing between the Chief
Executive Officer of Onkyo America and the applicable Onkyo Group member, (A)
the applicable Onkyo Group member establishes, to the reasonable satisfaction of
the Chief Executive Officer of Onkyo America, that, in light of the relationship
with the applicable Onkyo Group member's customer which has been involved in the
sales and delivery at issue, it is commercially difficult or impracticable to
discontinue such sale and delivery and to refer such transactions to Onkyo
America, and (B) the Onkyo Group will pay to Onkyo America commissions for such
past unpermitted sales (payable immediately) and for future sales (payable on
January 10 (for the period July 1 through and including December 30) and on July
10 (for the period January 1 through and including June 30), then Onkyo America
shall allow such sales and delivery to continue.
(iv) If, on more than one occasion Onkyo Japan fails to forward an
inquiry to Onkyo America, regardless of whether its has used its reasonable best
efforts, and such inquiry leads to sales of Onkyo Group Speakers which are
fulfilled by a member of the Onkyo Group, such sales shall be deemed
intentional.
(c) Unless otherwise agreed upon in writing by the Chief Executive
Officer of Onkyo America, the commissions referred to in this Agreement shall be
equal to 3.5% of the net sales price.
Section 1.3. Treatment of Home Audio Products.
Onkyo Japan reserves for itself or for any other party or parties that
it may designate, and does not grant to Onkyo America, the exclusive right to
sell or distribute (through Onkyo Japan's New Jersey subsidiary, Onkyo USA, Inc.
or otherwise) the Onkyo Group's Home Audio Products in, or outside of, the
Territory. If Onkyo America chooses to sell any Home Audio Products in the
future, it must not use a corporate name that includes "Onkyo" in connection
with any such sale.
Section 1.4. Right of First Refusal on New Intellectual Property.
Onkyo Japan hereby grants Onkyo America the right of first refusal to
acquire, whether by way of purchase, license, or otherwise, any rights to any
new Intellectual Property to be developed or acquired by any member of the Onkyo
Group relating to the Onkyo Group Speakers after the date of this Agreement and
before the expiration of the Term. For purposes of this Agreement, the term
"Intellectual Property" shall have the same meaning provided in the Share
Purchase Agreement entered into as of June 16, 2000 by and among Onkyo Europe
Electronics GMBH, Onkyo Malaysia SDN. BHD., Onkyo Corporation, Global
Technovations, Inc. and Onkyo America, Inc. In the event that Onkyo Japan
desires to sell, license or otherwise transfer any such Intellectual Property
relating to any Onkyo Group Speakers, whether the transfer is to someone who is
doing business in or intends to do business in the Territory or otherwise, Onkyo
Japan shall give written notice to Onkyo America of its intended disposition
disclosing all material terms including the identity of the item of Intellectual
Property, the proposed transfer price, the payment terms, and the identity of
the proposed transferee and, in case of licensing, the territory for such
license and the existence of exclusivity (the "Notice"). Onkyo America shall,
for a period of 30 days following receipt of the Notice, have the right to
acquire for its own account the item of Intellectual Property on the terms and
conditions contained in the Notice. In the event that Onkyo America declines to
exercise its right of first refusal with regard to any item of Intellectual
Property Onkyo Japan may sell, license or otherwise transfer such item of
Intellectual Property to the proposed transferee otherwise on the terms and
conditions contained in the Notice. In such event, Onkyo America shall continue
to have the right of first refusal under this Section 1.4 with respect to any
other items of such Intellectual Property for the remainder of the Term.
Section 1.5. Inspection Rights.
During each calendar year of the Term, as defined, and within 90 days
after expiration of the Term, Onkyo America, through its employees and
accountants, shall have the right to review the books and records of each member
of the Onkyo Group which gives notice to Onkyo America as described in Section
1.2. If any review reveals that commissions are owed to Onkyo America, the
commissions shall be promptly paid to it together with 6.5% per annum interest
at the Federal Funds rate (determined as of the date on which the sale relating
to the commission occurred), and if the total unpaid commissions exceed 5% of
commissions that would have been paid during the time-frame of the review, the
member of the Onkyo Group shall promptly reimburse Onkyo America for its costs
of the review including the reasonable fees and costs of its accountants.
Section 1.6. Future Restrictions.
Onkyo Japan agrees that it shall take whatever action is necessary to
cause any current or future member of the Onkyo Group to adhere to and comply
with this Agreement during the Term. In furtherance of this covenant and
agreement, the Onkyo Group shall not sell the assets or equity interests outside
of the ordinary course of business (including through any merger, consolidation
or similar transaction) of any Onkyo Group member unless the purchaser agrees to
be bound by this Agreement during the Term by becoming a party to this Agreement
and not using the name "Onkyo" in the Territory.
Section 1.7. Remedies for Violation.
If Onkyo Japan or any member of the Onkyo Group violates the exclusive
appointment provisions of Sections 1.1, or 1.2, Onkyo America may, at its sole
discretion, exercise any one or more of the following options or any other legal
or equitable remedies available to Onkyo America under applicable law:
(a) Onkyo America may seek injunctive relief preventing Onkyo Japan
and/or any other member of the Onkyo Group responsible for the violation (each a
"Defendant") from continuing to sell into the Territory;
(b) Onkyo America may require Onkyo Japan (and/or any Onkyo Group
Member responsible for the violation) to reimburse Onkyo America for any damages
that may result from the conduct that violates the exclusivity of this
Agreement;
(c) Onkyo America may require the Defendant(s) to account to
Onkyo America and pay it any profits made by the Defendant(s) on sales that
violate Sections 1.1 or 1.2;
(d) Onkyo America may offset any damages or profits to which it is
entitled under Section 1.7 (b) or (c) against sums owed to Onkyo Japan whether
represented by notes, royalties or accounts payable; and/or
(e) Onkyo America may terminate this Agreement pursuant to the
provisions of Article V (including compliance with the 30 day notice period)
without penalty to Onkyo America.
(f) The remedies set forth under Section 1.7 (b) and (c) above are
mutually exclusive. However, Onkyo America may elect its choice of remedy at the
conclusion of the presentation of evidence in an arbitration proceeding.
Article II
Technical Assistance
Onkyo Japan shall, at the reasonable request of Onkyo America from time
to time and at no additional cost except as set forth in this Article II,
provide technical assistance to Onkyo America. Onkyo Japan shall provide 60
man-days of technical assistance to Onkyo America; thereafter additional
technical assistance may be provided by Onkyo Japan at Onkyo Japan's option. For
the technical assistance provided by Onkyo Japan as set forth in this Article
II, Onkyo America shall pay Onkyo Japan a per diem rate based on a pro rata
portion of the salary and mandatory year end bonuses (not including benefits) of
the person or persons providing the technical assistance. In addition, Onkyo
America shall reimburse Onkyo Japan for any reasonable travel, lodging, or other
out-of-pocket expenses incurred by Onkyo Japan employees in connection with such
assistance; provided that travel related expenses including transportation,
lodging and food shall be considered unreasonable if inconsistent with any
written policy of Onkyo America applicable to its own employees.
Article III
Use of Trademarks
Section 3.1. Use of Tradename on Products.
Onkyo America shall not use the name "Onkyo" on any products that it
sells other than Onkyo Group Speakers that are sold by Onkyo America in its
capacity as exclusive distributor within the Territory for the Onkyo Group;
provided, however, that Onkyo America may sell its existing inventory of
products (and use the Onkyo name on such existing inventory without charge) for
up to 90 days after the date of this Agreement.
Section 3.2. Use of Tradename with Business.
Except as provided in Xxxxxxx 0.0, Xxxxx Xxxxxxx may, without cost, use
the "Onkyo" name as the name of its business until July 31, 2005 in the
Territory. After July 31, 0000, Xxxxx Xxxxxxx may use the "Onkyo" name only at
such times and in such manner as is authorized in writing by Onkyo Japan at its
discretion.
Article IV
Supply Arrangements
That certain supply agreement between Onkyo America and Onkyo Electric
(Malaysia) SND. BHD., dated January 24, 2000, shall remain in effect. To the
extent that Onkyo America and Onkyo Japan determine that it is in their
respective interests to establish similar supply arrangements with other members
of the Onkyo Group, separate supply agreements with such entities shall be
prepared and executed in a format that is reasonably acceptable to the parties
involved in such arrangements. Pricing, quantities, and delivery terms shall be
as set forth in those agreements.
Article V
Term
This Agreement shall be in effect until [ * ] (the "Term"), unless
earlier terminated for breach or amended or extended by mutual agreement of the
Parties in writing. Either Party may terminate this Agreement in the event of
the filing of any voluntary or involuntary petition to declare the other Party
insolvent or bankrupt that is not dismissed within 30 days; or making an
assignment or other arrangement for the benefit of creditors of such other
Party; or such other Party being dissolved or liquidated.
Article VI
Miscellaneous
Section 6.1. Governing Law.
This Agreement shall be construed and enforced in accordance with, and
governed by, the laws of the State of Indiana (without giving effect to the
principles of conflicts of laws thereof).
Section 6.2. Arbitration.
The Parties agree to attempt to resolve any dispute which arises under
this Agreement amicably and in good faith. Any dispute arising under or in
connection with this Agreement which cannot be resolved amicably and in good
faith within 30 days shall be resolved by three arbitrators by the American
Arbitration Association in arbitration proceedings conducted in Indianapolis,
Indiana, in accordance with the American Arbitration Association's commercial
arbitration rules. The decision of the arbitrators shall be final and binding
and shall be enforceable in any court of competent jurisdiction; provided,
however, that any Party may, as appropriate, seek temporary injunctive relief in
any court of competent jurisdiction. In any such arbitration proceeding, the
Parties agree to provide all discovery deemed necessary by the arbitrators. Any
award made by the
* Confidential portions omitted and filed separately with the Commission.
arbitrators shall be final, binding and conclusive on all Parties for all
purposes, and judgment may be entered thereon in any court having jurisdiction.
Section 6.3. Severability.
To the extent that any part of this Agreement is determined to be
invalid, illegal or unenforceable, such part shall be deleted and the remaining
provisions of this Agreement shall remain in effect.
Section 6.4. Waiver.
Failure by either Party to promptly enforce any of its rights hereunder
shall not constitute a waiver of future violations of such rights or preclude
such Party from enforcing future breaches of such rights.
Section 6.5. Entire Agreement.
This Agreement supercedes any prior discussions between the Parties
related to the distribution of Onkyo Group products by Onkyo America (other than
the supply agreement described in Article IV).
Section 6.6. Notices.
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a) on
the date of service if served personally on the Party to whom notice is to be
given, (b) on the day of transmission if sent via facsimile transmission to the
facsimile number given below, provided that telephonic confirmation of receipt
is obtained from the designated person for the recipient promptly after
completion of transmission, (c) three days after delivery to an express courier
service or the Express Mail service.
To: Onkyo Corporation
0-0, Xxxxxxx-Xxx, Xxxxxxxx-Xxx
Xxxxx 000-0000
Xxxxx
Attn: Xxxxx Xxxxxx, Chairman &
Chief Executive Officer
Telephone No.: 0000-00-0000
Facsimile No.: 0000-00-0000
To: Onkyo America, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx Xxxxxxxxx, President
Tel: 812-342-0332 ext. 106
Fax: 000-000-0000
Section 6.7. Assignability.
This Agreement may not be assigned by either Party without the prior
written consent of the other, provided, however, that if a Party is not the
surviving party to a merger or sells all or substantially all of its assets,
such Party (and any successor hereunder) may assign these contractual rights
without further approval.
IN WITNESS WHEREOF, the Parties have, by their duly authorized
representatives, executed this Agreement as of the date first set forth above.
ONKYO CORPORATION ONKYO AMERICA, INC.
("Onkyo Japan") ("Onkyo America")
By:
---------------------------- -------------------------------
Xxxxx Xxxxxx, Chairman & CEO Xxxxxxx Xxxxxxxxx, President
