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EXHIBIT 4.1
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PURCHASE AND LOAN AGREEMENT
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THIS PURCHASE AND LOAN AGREEMENT (the "Agreement") is entered
into between SANYO DENKI CO., LTD., a company incorporated under laws of Japan
("Sanyo Denki"), and XXXXXXX & XXXXX, INC., a company incorporated under the
laws of the State of Ohio of the United States of America (the "Company"), this
25th day of May, 1989.
IN CONSIDERATION OF THE REPRESENTATIONS, WARRANTIES, AND
PROMISES HEREINAFTER SET FORTH, SANYO DENKI AND THE COMPANY AGREE AS FOLLOWS:
ARTICLE I
SALE OF SHARES
Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing (as defined herein), the Company shall sell and
deliver to Sanyo Denki, and Sanyo Denki shall purchase and accept from the
Company, 100,000 Common Shares, without par value, of the Company (the
"Shares"). The purchase price of the Shares to be paid by Sanyo Denki to the
Company at the Closing shall be $3,000,000 U.S. Dollars in cash (the "Purchase
Price").
ARTICLE II
LOAN
Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing Sanyo Denki shall lend to the Company, and the
Company shall borrow from Sanyo Denki, $1,000,000 U.S. Dollars (the "Loan").
The Loan shall be evidenced by the Company's promissory note, dated as of the
Closing, in the principal amount of $1,000,000 U.S. Dollars (the "Note"). The
principal amount of the Note shall bear interest at the rate of three percent
(3%) per annum, payable semi-annually on May 31 and November 30 of each year.
The entire principal amount of the Note shall be due and payable in full on May
31, 1994. The Company may at any time and from time to time prepay any part or
all of the principal amount of the Note, together with accrued interest on the
amount being prepaid, without penalty. A copy of the form of Note to be
executed and delivered
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by the Company to Sanyo Denki at the Closing is attached hereto as EXHIBIT A.
ARTICLE III
THE CLOSING
SECTION 3.1. TIME, DATE, AND PLACE OF CLOSING. The closing of
the transactions provided for in this Agreement (the "Closing") shall take
place at 6:30 p.m., local time, on May 25th, 1989, at the corporate offices of
the Company in Dayton, Ohio, or at such other time, date, and place as the
parties hereto shall mutually agree upon, but in no event later than May 25,
1989.
SECTION 3.2. DELIVERIES BY OR ON BEHALF OF THE COMPANY. At the
Closing, the Company shall deliver the following to Sanyo Denki:
(a) A certificate for the Shares, dated as of the Closing
and registered in the name of "Sanyo Denki Co., Ltd."; and
(b) The Note, dated as of the Closing and issued in the
name of "Sanyo Denki Co., Ltd."
SECTION 3.3. DELIVERIES BY OR ON BEHALF OF SANYO DENKI. At the
Closing, Sanyo Denki shall deliver the following to the Company:
(a) The $3,000,000 Purchase Price of the Shares shall be
paid to the Company by wire transfer, in immediately available funds, to such
account at such bank as the Company shall designate in writing to Sanyo Denki;
and
(b) The $1,000,000 in funds to be loaned to the Company
shall be transferred to the Company by wire transfer, in immediately available
funds, to such account at such bank as the Company shall designate in writing
to Sanyo Denki.
SECTION 3.4. SHAREHOLDER AGREEMENT. At the Closing, the
Company and Sanyo Denki shall each execute and deliver to the other a copy of
the Shareholder Agreement, substantially in the form attached hereto as EXHIBIT
B.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1. ORGANIZATION AND GOOD STANDING. The Company is a
corporation duly organized, validly existing and in
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good standing under the laws of the State of Ohio and has all requisite
corporate authority and power to own, operate and lease its properties and to
carry on its business as now being conducted. The copies of the Articles of
Incorporation and Code of Regulations, certified by the Secretary of the
Company, which have been delivered by the Company to Sanyo Denki, are true,
complete and accurate as of the date hereof.
SECTION 4.2. AUTHORIZED CAPITAL SHARES. The authorized capital
shares of the Company consist of 10,000,000 Common Shares, without par value,
of which 31,838 shares are held in the Company's treasury and 2,386,209 shares
are issued and outstanding as of the date of this Agreement. Except for
options to purchase 138,147 Common Shares of the Company outstanding under the
Company's employee or director compensation plans, there are no outstanding
options, warrants or rights to purchase Common Shares of the Company or
securities convertible into Common Shares of the Company.
SECTION 4.3. AUTHORIZATION. The Company has all necessary
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company and have been
approved by the Board of Directors of the Company. This Agreement has been
duly authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company enforceable in accordance
with its terms except that such enforceability may be subject to bankruptcy,
insolvency, receivership or other similar laws relating to creditors' rights.
SECTION 4.4. GOVERNMENTAL APPROVALS. No consent, approval,
order or authorization of, or registration, declaration or filing with any
governmental or public unit, agency, or authority is required under the laws of
the United States, or any state thereof, in connection with the execution and
delivery of this Agreement by the Company or the performance by the Company of
its obligations under this Agreement.
SECTION 4.5. AUTHORIZATION, ISSUANCE AND VALIDITY OF THE
SHARES. The Shares to be issued pursuant to this Agreement will be out of the
authorized and unissued Common Shares of the Company. The Shares, when issued
in accordance with this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable outstanding Common Shares of the Company.
SECTION 4.6. USE OF PROCEEDS. The Company intends to use the
proceeds of the Loan and the proceeds received in connection with the sale of
the Shares for general corporate purposes, principally capital expenditures and
working capital.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SANYO DENKI
SECTION 5.1. ORGANIZATION AND GOOD STANDING. Sanyo Denki is a
corporation duly organized, validly existing and in good standing under the
laws of Japan.
SECTION 5.2. AUTHORIZATION. Sanyo Denki has all necessary
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Sanyo Denki and have been
approved by the Board of Directors of Sanyo Denki. This Agreement has been
duly authorized, executed and delivered by Sanyo Denki and constitutes the
legal, valid and binding obligation of Sanyo Denki enforceable in accordance
with its terms except that such enforceability may be subject to bankruptcy,
insolvency, receivership or other similar laws relating to creditors' rights.
SECTION 5.3. GOVERNMENTAL APPROVAL. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
governmental or public unit, agency, or authority is required under the laws of
Japan, or any political subdivision thereof, in connection with the execution
and delivery of this Agreement by Sanyo Denki or the performance by Sanyo Denki
of its obligations hereunder, except for the issuance of an authorized
notification from the Minister of Finance of Japan pursuant to Articles 16 and
22 of the Japanese Foreign Exchange and Foreign Trade Control Act, relating to
capital transactions by a Japanese company, which notification Sanyo Denki has
applied for and expects to obtain.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SANYO DENKI
The obligations of Sanyo Denki to complete the transactions
provided for in this Agreement are subject to satisfaction at or prior to the
Closing of each of the following conditions, any of which may be waived in
writing by Sanyo Denki:
SECTION 6.1. CONTINUING WARRANTIES; PERFORMANCE. The
representations and warranties of the Company in this Agreement or in any
Exhibit to this Agreement or in any document delivered in connection with this
Agreement shall be true in all material respects as of the date when made and
as of the date of the Closing. The Company shall have performed in all
material respects each of the obligations and agreements hereunder to be
performed by the Company.
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SECTION 6.2. SHAREHOLDER AGREEMENT. At the Closing, Sanyo
Denki shall have received a copy of the Shareholder Agreement, executed by the
Company in substantially in the form as attached hereto as EXHIBIT B.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to complete the transactions
provided for in this Agreement are subject to satisfaction at or prior to the
Closing of each of the following conditions, any of which may be waived in
writing by the Company:
SECTION 7.1. CONTINUING WARRANTIES; PERFORMANCE. The
representations and warranties of Sanyo Denki in this Agreement or in any
Exhibit to this Agreement or in any document delivered in connection with this
Agreement shall be true in all material respects as of the date when made and
as of the date of the Closing. Sanyo Denki shall have performed in all
material respects each of the obligations and agreements hereunder to be
performed by Sanyo Denki.
SECTION 7.2. GOVERNMENTAL APPROVALS. Sanyo Denki shall have
obtained the authorized notification from the Minister of Finance of Japan
referred in Section 5.3.
SECTION 7.3. SHAREHOLDER AGREEMENT. At the Closing, the
Company shall have received a copy of the Shareholder Agreement, executed by
Sanyo Denki, substantially in the form attached hereto as EXHIBIT B.
ARTICLE VIII
SECURITIES LAW MATTERS AND REGISTRATION RIGHTS
SECTION 8.1. INFORMATION FURNISHED TO SANYO DENKI. Sanyo Denki
hereby represents and warrants to the Company that it has received copies of
the following documents: (a) the Articles of Incorporation and Code of
Regulations of the Company; (b) the Company's 1988 Annual Report to
Shareholders; (c) the Company's Annual Report on Form 10-K for the year ended
August 31, 1988; and (d) the Company's Quarterly Reports on Form 10-Q for the
quarters ended November 30, 1988 and February 28, 1989.
SECTION 8.2. OPPORTUNITY TO RECEIVE ADDITIONAL INFORMATION. In
connection with its purchase of the Shares and its acquisition of the Note,
Sanyo Denki represents and warrants to the Company that it has met personally
with an officer and other representatives of the Company and has had the
opportunity to ask questions and receive answers about the business,
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financial condition and prospects of the Company and has been provided the
opportunity to receive additional information to verify the accuracy of any
information furnished to it.
SECTION 8.3. RESTRICTIONS ON RESALE. Sanyo Denki represents,
warrants, and agrees with the Company as follows:
(a) Sanyo Denki is acquiring the Shares and Note for its
own account, not with a view to any resale or distribution thereof in
such manner as would constitute Sanyo Denki as an "underwriter" within
the meaning of Section 2(11) of the Securities Act of 1933 (the "1933
Act"), and that it will not make any sale, transfer or other disposition
of the Shares or Note in violation of the 1933 Act or the securities
laws of any state of the United States;
(b) Sanyo Denki acknowledges that it understands that the
sale of the Shares and the issuance of the Note have not been registered
under the 1933 Act on the basis that the sale of the Shares and the
issuance of the Note pursuant to this Agreement are exempt from
registration under Section 4(2) of the 1933 Act as not involving any
public offering of the Shares and Note;
(c) Sanyo Denki agrees that the Company may refuse to
permit it to sell the Shares or Note unless there is in effect a
registration statement under the 1933 Act covering such transfer or
Sanyo Denki furnishes to the Company an opinion of counsel, satisfactory
to counsel for the Company, that such registration is not required;
(d) Sanyo Denki understands and agrees that stop transfer
instructions will be noted on the records of the transfer agent for the
Common Shares of the Company and that there will be placed on the
certificate for the Shares, a legend stating substantially as follows:
"The shares evidenced by this certificate have been acquired for
the account of the registered holder and have not been
registered under the Securities Act of 1933 (the "1933 Act") in
reliance on the exemption contained in Section 4(2) of the 0000
Xxx. These shares may not be sold or transferred except in
transactions exempt from registration under the 1933 Act or
pursuant to an effective registration statement thereunder. The
sale, transfer or other disposition of these shares is
restricted pursuant to the provisions of a Purchase and Loan
Agreement and a Shareholder Agreement, dated May 25, 1989 copies
of which may be examined at the offices of the Company."
(e) Sanyo Denki understands and agrees that the Note to
be issued to it at the Closing will contain a legend
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restricting transfer and reference is made to the form of Note attached
hereto as EXHIBIT A for the wording of the legend.
SECTION 8.4. REGISTRATION RIGHTS. In the event Sanyo Denki
determines to sell any of the Shares in an open market transaction and the
Company does not exercise its right under the Shareholder Agreement to purchase
the Shares proposed to be sold, then Sanyo Denki shall be entitled to request
the Company, in accordance with the terms of the Share Registration Provisions,
attached hereto as EXHIBIT C, to undertake to register the Shares under the
1933 Act, all as set forth and to the extent described in the Share
Registration Provisions.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. COVENANTS TO SURVIVE AND BIND. All covenants,
agreements, representations and warranties made herein or in any agreement
delivered in connection with the Closing of this Agreement by or on behalf of
the Company to Sanyo Denki, or by Sanyo Denki to the Company, shall bind and
accrue to the benefit, as the case may be, of each of them, respectively, and
their assigns and successors, and such covenants, agreements, representations
and warranties shall survive the execution and delivery of this Agreement and
the completion of the Closing.
SECTION 9.2. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally or mailed by registered or certified mail, postage
prepaid, to the address indicated below or sent by telefax transmission to the
number set forth below (or to such other address or telefax number as any of
the same may have heretofore substituted therefor by written notification to
the other party hereto):
If to Sanyo Denki, to:
Shinjiro Yokozawa, President
Sanyo Denki Co., Ltd.
00-0, Xxxx Xxxxxxx, 0-xxxxx
Xxxxxxx-Xx
Xxxxx 000
Xxxxx
Via telefax: 000-000-000-0000
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If to the Company, to:
Xxxxxx X. Xxxxx, President
Xxxxxxx & Xxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Via telefax: 001-1-513-225-3314
With a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxxx, Xxxx and Xxxxx
0000 Xxxxxxxxxx Xxxxx, X.X.
Xxxxxx, Xxxx 00000
Via telefax: 001-1-513-443-6637
SECTION 9.3. COUNTERPARTS. For the convenience of the parties,
any number of counterparts hereof may be executed and each such executed
counterpart shall be deemed to be an original instrument.
SECTION 9.4. CERTAIN REFERENCES. All references to "Article",
"Section", and "Exhibit" mean an Article or Section of this Agreement or an
Exhibit to this Agreement, as the case may be.
SECTION 9.5. APPLICABLE LAW. This Agreement shall be governed
and construed in accordance with the substantive laws of the State of Ohio
without giving effect to the principles of conflict of laws.
SECTION 9.6. ENTIRE AGREEMENT. This Agreement and the Exhibits
attached hereto constitute the entire agreement between the parties with
respect to the within subject matter and terminate and supersede all previous
agreements, whether written or oral, relating to the same subject matter.
IN WITNESS WHEREOF, the Company and Sanyo Denki have caused this
Agreement to be duly executed as of the day and year first above written.
SANYO DENKI CO., LTD.
By________________________________
Shinjiro Yokozawa
President and Chief
Executive Officer
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XXXXXXX & XXXXX, INC.
By_______________________________
Xxxxxx X. Xxxxx
President and Chief
Executive Officer
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EXHIBIT A - FORM OF NOTE
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PROMISSORY NOTE
$1,000,000 U.S. Due May 31, 1994
Issue Date: May 25, 1989
XXXXXXX & XXXXX, INC. an Ohio Corporation (the "Company"), with
an office at 0000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000, promises to pay to the
order of SANYO DENKI CO. LTD., a Japanese Company, at 00-0, Xxxx Xxxxxxx,
0-Xxxxx, Xxxxxxx-Xx, Xxxxx 000, Xxxxx or at such other place as the holder
hereof may from time to time designate, the principal amount of ONE MILLION
U.S. DOLLARS ($1,000,000 U.S.), with interest on the unpaid balance at the rate
of three percent (3%) per annum. Interest only shall be payable semi-annually
on November 30 and May 31 of each year, commencing November 30, 1989, until the
principal amount of this Note is paid in full. The entire principal amount of
this Note shall be due and payable on May 31, 1994.
Prepayment of any amount of the principal amount of this Note,
together with accrued interest on the amount being prepaid, shall be allowed at
any time without penalty.
The occurrence of any of the following events shall be deemed to
constitute a default (an "Event of Default") under this Note:
(1) If the Company shall fail to pay all or any part of
the principal or interest on this Note as the same shall become due and
any such failure shall continue for a period of five (5) days;
(2) If the Company shall become insolvent or suspend
business or shall file a voluntary petition in bankruptcy or shall file
an answer admitting the jurisdiction of the court and the material
allegations of, or shall consent to, any involuntary petition pursuant
to or purporting to be pursuant to any bankruptcy, reorganization or
insolvency law of any jurisdiction, or if entry of an order for relief
in bankruptcy is made against the Company on its application, or the
Company makes an assignment for the benefit of creditors or fails or
admits failure to generally pay its debts as such debts become due, or
the Company applies for or consents to the appointment of any receiver,
custodian or trustee of all, or a substantial part of the property of
the Company;
(3) If an order shall be entered (without the
application, approval or consent of the Company) and shall not be
dismissed or stayed within thirty (30) days from its entry, pursuant to
or purporting to be pursuant to any bankruptcy, reorganization or
insolvency law of any jurisdiction (a) approving an involuntary petition
seeking reorganization of the Company; or (b) approving an involuntary
petition seeking
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an arrangement with creditors of the Company; or (c) appointing any
receiver, custodian, or trustee of all, or a substantial part of, the
property of the Company; or
(4) If the Company defaults in any payment of principal
of or interest on any other obligation for borrowed money beyond any
period of grace provided with respect thereto, or in performance of any
other agreement, term or condition contained in any agreement under
which such obligation is created, if the effect of such default is to
cause or permit the holder or holders of such obligation to cause such
obligation to become due prior to its stated maturity.
If one or more Events of Default referred to in the preceding
paragraph shall occur and such Event of Default is not corrected within ten
days after the holder hereof shall have given written notice of such Event of
Default to the Company, then the entire principal amount of this Note, together
with accrued interest, shall at once become due and payable at the option of
the Holder.
Presentment, protest, notice, notice of dishonor, demand for
payment and notice of protest are hereby waived.
THIS NOTE HAS BEEN ACQUIRED FOR THE ACCOUNT OF SANYO DENKI CO., LTD. AND THE
ISSUANCE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OF THE LAWS OF THE UNITED STATES OF AMERICA (THE "1933 ACT") IN RELIANCE ON THE
EXEMPTION CONTAINED IN SECTION 4(2) OF THE 1933 ACT FOR TRANSACTIONS NOT
INVOLVING A PUBLIC OFFERING. THIS NOTE MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, ACCEPTABLE TO
COUNSEL FOR THE COMPANY, THAT THE TRANSFER OF THE NOTE IS EXEMPT FROM
REGISTRATION UNDER THE 1933 ACT.
IN WITNESS WHEREOF, the Company has executed this Note this 25th
day of May, 1989 at Dayton, Ohio.
XXXXXXX & XXXXX, INC.
__________________________________
Xxxxxx X. Xxxxx
President and Chief
Executive Officer
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EXHIBIT B - FORM OF SHAREHOLDER AGREEMENT
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SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT is entered into between SANYO DENKI
CO., LTD., a company incorporated under laws of Japan ("Sanyo Denki"), and
XXXXXXX & XXXXX, INC., a company incorporated under the laws of the State of
Ohio of the United States of America (the "Company"), this 25th day of May,
1989 under the following circumstances:
A. Pursuant to a Purchase and Loan Agreement between the
Company and Sanyo Denki, dated May 25, 1989 (the "Purchase
Agreement"), the Company is concurrently herewith selling 100,000 of
its Common Shares, without par value, to Sanyo Denki; and
B. In the Purchase Agreement, the Company and Sanyo Denki
have agreed to enter into this Agreement;
NOW, THEREFORE, IN CONSIDERATION OF THE REPRESENTATIONS,
WARRANTIES AND PROMISES SET FORTH IN THE PURCHASE AGREEMENT AND THIS AGREEMENT,
THE COMPANY AND SANYO DENKI AGREE AS FOLLOWS:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 1.1. ORGANIZATION AND GOOD STANDING. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Ohio.
SECTION 1.2. AUTHORIZATION. The Company has all necessary
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company and have been
approved by the Board of Directors of the Company. This Agreement has been
duly authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company enforceable in accordance
with its terms, except (i) that such enforceability may be subject to
bankruptcy, insolvency, receivership or similar laws relating to creditors'
rights now or hereafter in effect and (ii) that the remedy of specific
performance and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding may be
brought.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SANYO DENKI
SECTION 2.1. ORGANIZATION AND GOOD STANDING. Sanyo Denki is a
corporation duly organized, validly existing and in good standing under the
laws of Japan.
SECTION 2.2. AUTHORIZATION. Sanyo Denki has all necessary
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Sanyo Denki and have been
approved by the Board of Directors of Sanyo Denki. This Agreement has been
duly authorized, executed and delivered by Sanyo Denki and constitutes the
legal, valid and binding obligation of Sanyo Denki enforceable in accordance
with its terms, except (i) that such enforceability may be subject to
bankruptcy, insolvency, receivership or similar laws relating to creditors'
rights now or hereafter in effect and (ii) that the remedy of specific
performance and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding may be
brought.
SECTION 2.3. OWNERSHIP OF SHARES. Sanyo Denki does not own any
Common Shares of the Company or any rights to acquire Common Shares of the
Company other than the 100,000 Common Shares it is acquiring pursuant to the
Purchase Agreement. Such 100,000 Common Shares are hereinafter referred to as
the "Shares."
SECTION 2.4. MEETINGS OF SHAREHOLDERS. Sanyo Denki agrees that
it will take such action as may be necessary to cause the Shares to be
represented at any meeting of shareholders of the Company, either in person or
by proxy, so that the Shares may be counted for purposes of determining the
presence of a quorum at any such meeting.
ARTICLE III
RESTRICTIONS ON CERTAIN ACTIONS BY SANYO DENKI
Sanyo Denki agrees that throughout the term of this Agreement it
will not, nor will it permit any entity which it controls, directly or
indirectly, without the prior written consent of the Company duly authorized by
a majority of the Company's Board of Directors, to:
(a) acquire, directly or indirectly, by purchase or
otherwise, any Common Shares of the Company or any other securities of
the Company entitled to vote generally in the election of directors of
the Company or securities
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convertible into such securities ("Voting Securities") if after such
acquisition Sanyo Denki would beneficially own in the aggregate more
than 100,000 Voting Securities of Company, provided, however, this
Article III shall not prohibit Sanyo Denki from acquiring Voting
Securities by way of stock splits or dividends or other distributions
made available to holders of Voting Securities generally;
(b) "solicit" proxies with respect to Voting Securities
under any circumstances or become a "participant" in any "election
contest" relating to the election of directors of the Company, as such
terms are defined in Regulation 14A under the Securities Exchange Act
of 1934;
(c) deposit any Voting Securities in a voting trust or
subject them to a voting agreement or other agreement of similar
effect;
(d) initiate, propose or otherwise solicit shareholders of
the Company for the approval of one or more shareholder proposals at
any time, or induce or attempt to induce any other person to initiate
any shareholder proposal;
(e) take any action to acquire or affect control of the
Company or to encourage or assist any other person to do so; or
(f) sell or otherwise dispose of any of the Voting
Securities it owns, except as follows:
(i) as permitted under Section 5.5 of this
Agreement; or
(ii) as a result of a merger or consolidation
of Sanyo Denki in which Sanyo Denki is not the surviving entity
and each entity that controls the surviving entity agrees to be
bound by the provisions of this Agreement; or
(iii) in accordance with the procedures at
Article IV relating to the Company's right of first refusal.
ARTICLE IV
RIGHT OF FIRST REFUSAL
If, during the term of this Agreement, Sanyo Denki desires to
sell any of the Voting Securities it owns other than as permitted under Section
5.5, the following provisions shall apply:
(a) In the event that Sanyo Denki receives a bona fide offer
from a third party to buy all or part of its Voting
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Securities (an "Offer") or in the event that Sanyo Denki desires to sell all or
part of its Voting Securities in the open market (a "Market Disposition
Program"), Sanyo Denki shall transmit to the Company a written notice (the
"Sanyo Denki Notice") setting forth:
(i) if a sale pursuant to an Offer is
proposed, as to each person to whom such sale is proposed to be
made: (A) the name, address and principal business activity of
such person; (B) the number of Voting Securities proposed to be
sold to such person; (C) the manner in which the sale is
proposed to be made; and (D) the price at which or other
consideration for which, and the material terms upon which, such
sale is proposed to be made, and stating that such person's
Offer is, to the best knowledge of Sanyo Denki, bona fide; and
(ii) if sales pursuant to a Market Disposition
Program are proposed: (A) the approximate date the sales are
scheduled to commence, and (B) the amount of Voting Securities
sought to be disposed of.
(b) Upon receipt of the documents required to be furnished to
it under subsection (a) proposing a sale or sales, the Company shall have an
option to purchase, in the case of an Offer, all but not less than all, and, in
the case of a Market Disposition Program, all or any part of, the Voting
Securities proposed to be disposed of on the following terms and conditions:
(i) If the option arises pursuant to an Offer,
the purchase price and terms for the purchase of the Voting
Securities purchasable upon exercise of the option shall be the
price and terms specified in the Sanyo Denki Notice; provided,
however, that: (A) if the Offer is a tender offer, the price
shall be the highest price paid by the successful tender offeror
pursuant to the tender offer to any of the shareholders of the
Company (it being understood that if the price offered in any
tender offer is increased, either by the original tender offeror
or a third party, after the Company has elected to exercise its
option at a lower price, then the Company shall have the right
to reexamine its decision and to elect not to exercise such
option so long as notice of its election not to exercise is
received by the Acquiror at least 24 hours prior to the
expiration of the tender offer and (B) if the price so specified
is payable in whole or in part in property (which term shall
include the securities of any other issuer), the price allocable
to such property shall be cash equal to the fair market value of
such property on the date the Company receives said notice, as
agreed upon within seven days after receipt thereof by the
parties hereto or, if such parties are unable to agree, as
determined by such investment banking firm as is mutually
agreeable to both parties. In the event that
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the parties are unable to agree on an investment banking firm
for the purposes of this subsection (i), each party shall name
its own investment banking firm and such firms shall select a
third investment banking firm to determine the value pursuant to
this subsection (i). The costs and expenses of such third
investment banking firm shall be borne equally by Sanyo Denki
and the Company.
(ii) If the option arises pursuant to a Market
Disposition Program, the purchase price for the purchase of the
Voting Securities purchasable upon exercise of the option shall
be the average of the closing sale prices for such Voting
Securities in the principal market where such securities are
traded for the 20 consecutive trading days preceding the day the
Sanyo Denki Notice is sent to the Company.
(iii) If the Company desires to exercise the
aforesaid option to purchase the Voting Securities proposed to
be disposed of, the Company shall send a written notice (the
"Company Notice") informing Sanyo Denki of such fact in time so
that Sanyo Denki receives such notice within 45 days after the
Sanyo Denki Notice is received by the Company but, in the case
of a tender offer, in no event later than 24 hours prior to the
expiration date of the tender offer.
(iv) At the time the Company Notice is
transmitted, there shall be deemed to be a binding agreement
between Sanyo Denki and the Company concerning the sale on the
price and the terms as provided for herein. If the Company
delivers a Company Notice to Sanyo Denki, then on the thirtieth
business day following Sanyo Denki's receipt of the Company
Notice, Sanyo Denki will deliver to the Company certificates for
the Voting Securities to be sold, duly endorsed for transfer or
accompanied by a duly executed stock power, and the Company will
deliver to Sanyo Denki the purchase price to be paid in
accordance with the terms and conditions set forth in the Sanyo
Denki Notice. All payments shall be made in the currency of the
United States in immediately available funds.
(v) The Company may assign its right to
purchase the Voting Securities and may designate in the Company
Notice any person or persons to take title to all or any part of
the Voting Securities subject to such option, but this shall not
relieve the Company of its obligation to pay the purchase price.
(c) If the conditions prescribed in subsection (a) have been
met in connection with a proposed sale of Voting Securities, and the Company
has not elected to exercise the option arising
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under subsection (b) hereof, then Sanyo Denki shall be free to effect such sale
under the following terms and conditions:
(i) if a sale pursuant to an Offer was
proposed, for a period of 90 days, but only to the person or
persons specified in the Sanyo Denki Notice at the price (or for
the consideration) and on the terms specified in said notice,
and if such sale does not occur within such 90 days, the Voting
Securities so proposed to be sold will continue to be subject to
this Agreement to the same extent as if such sale pursuant to an
Offer had not been proposed; and
(ii) if sales pursuant to a Market Disposition
Program were proposed, Sanyo Denki shall be entitled to offer
the Shares for sale in the open market for a period of six
months.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. SPECIFIC ENFORCEMENT. The parties hereto
acknowledge and agree that each would be irreparably damaged in the event that
any of the provisions of this Agreement are not performed by the other in
accordance with their specific terms or are otherwise breached. It is
accordingly agreed that each party shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement by the other and to
specifically enforce this Agreement and the terms and provisions thereof
against the other in any action instituted in the United States District Court
of the Southern District of Ohio, in addition to any other remedy to which such
aggrieved party may be entitled at law or in equity. The Company and Sanyo
Denki each consents to personal jurisdiction in any such action brought in the
United States District Court for the Southern District of Ohio and to service
of process upon it in the manner set forth in Section 5.7.
SECTION 5.2. TERMINATION. This Agreement shall terminate and
be of no further force and effect upon the earliest to occur of the following:
(a) at anytime that Sanyo Denki owns less than 1% of the
Company's outstanding Voting Securities;
(b) at the election of Sanyo Denki, exercisable upon
delivery of written notice thereof to the Company, if the Company shall fail to
comply with its obligations under this Agreement or the Purchase Agreement; or
(c) at the election of the Company, exercisable upon
delivery of written notice thereof to Sanyo Denki if Sanyo Denki
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shall fail to comply with any of its obligations under this Agreement or the
Purchase Agreement.
SECTION 5.3. MISCELLANEOUS. If any term or provision of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
SECTION 5.4. EXPENSES. Except as otherwise provided herein,
each party hereto shall pay its own expenses incurred in connection with this
Agreement.
SECTION 5.5. ASSIGNMENT. This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the successors of the
parties hereto. Except as otherwise provided herein, this Agreement shall not
be assignable. Sanyo Denki shall have the right to transfer all or any of the
Voting Securities owned by it to (i) any wholly-owned subsidiary or (ii) any
corporation more than 50% of whose voting securities are owned by Sanyo Denki
which corporation shall be reasonably acceptable to the Company; provided,
however, that such subsidiary or corporation shall agree in advance in writing
to be bound by all the terms of this Agreement.
SECTION 5.6. AMENDMENT. This Agreement may not be modified,
amended, altered or supplemented except by a written agreement signed by the
Company and Sanyo Denki which shall be authorized by all necessary corporate
action of each party.
SECTION 5.7. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, if
delivered personally or mailed by registered or certified mail, postage
prepaid, to the address indicated below or sent by telefax transmission to the
number set forth below (or to such other address or telefax number substituted
therefor by written notification to the other party hereto):
If to Sanyo Denki, to:
Shinjiro Yokozawa, President
Sanyo Denki Co., Ltd.
00-0, Xxxx Xxxxxxx, 0-xxxxx
Xxxxxxx-Xx
Xxxxx 000
Xxxxx
Via telefax: 000-000-000-0000
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If to the Company, to:
Xxxxxx X. Xxxxx, President
Xxxxxxx & Xxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Via telefax: 001-1-513-225-3314
With a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxxx, Xxxx and Xxxxx
0000 Xxxxxxxxxx Xxxxx, X.X.
Xxxxxx, Xxxx 00000
Via telefax: 001-1-513-443-6637
SECTION 5.8. COUNTERPARTS. For the convenience of the parties,
any number of counterparts hereof may be executed and each such executed
counterpart shall be deemed to be an original instrument.
SECTION 5.9. APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the substantive law of the State of Ohio
without giving effect to the principles of conflict of laws.
SECTION 5.10. ENTIRE AGREEMENT. This Agreement and the
Purchase Agreement constitute the entire agreement between the parties with
respect to the within subject matter and terminate and supersede all previous
agreements, whether written or oral, relating to the same subject matter.
IN WITNESS WHEREOF, the Company and Sanyo Denki have caused this
Agreement to be duly executed as of the day and year first above written.
SANYO DENKI CO., LTD.
By_____________________________
Shinjiro Yokozawa
President and Chief
Executive Officer
XXXXXXX & XXXXX, INC.
By____________________________
Xxxxxx X. Xxxxx
President and Chief
Executive Officer
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EXHIBIT C
SHARE REGISTRATION PROVISIONS
-----------------------------
All capitalized terms used herein and not defined herein, shall,
unless the context otherwise requires, have the meanings set forth in the
Purchase Agreement to which this Exhibit C is attached.
SECTION 1. REGISTRATION RIGHTS. (a) At any time after
November 30, 1989, Sanyo Denki shall be entitled to request the Company to
register the Shares under the Securities Act of 1933 (the "1933 Act") in
accordance with this Exhibit C provided Sanyo Denki shall have notified the
Company pursuant to the Shareholder Agreement that it intends to offer the
Shares for sale and the Company did not exercise its right under the
Shareholder Agreement to acquire the Shares. Assuming the Company has not
exercised its right to require the Shares pursuant to the Shareholder
Agreement, upon written notice from Sanyo Denki that it desires to have the
Shares registered under the 1933 Act, the Company shall prepare and file a
registration statement on Form S-3 (or any equivalent successor form), if
available for use by the Company under the then applicable rules and
regulations promulgated under the 1933 Act, to register the Shares under the
1933 Act for offering and sale to the public by Sanyo Denki; provided that if
Form S-3 (or such equivalent successor form) is not then available for use by
the Company, then the Company shall prepare and file a registration statement
on such form as may be used by it in order to register the Shares. The Company
shall undertake to cause such registration statement to become effective as
soon as practical after filing.
(b) Subject to the provisions of this Section 1, the Company
shall maintain the effectiveness of the registration statement filed pursuant
to this Exhibit C until the offering of the Shares by Sanyo Denki pursuant to
such registration statement is completed, withdrawn or terminated (but in no
event longer than three years after the Closing), and during such time shall
deliver such copies of the prospectus included in the registration statement as
Sanyo Denki may reasonably request. At the end of three years after the
Closing, or at such earlier time that Sanyo Denki informs the Company that the
offering has been withdrawn, the Company may in its discretion withdraw the
Shares from registration.
(c) The Company has no obligation to enter into an underwriting
or sales agency agreement with respect to the sale of the Shares by Sanyo
Denki.
SECTION 2. AGREEMENTS OF SANYO DENKI. In connection with the
registration of the Shares, Sanyo Denki agrees to provide all such information
and materials and take all such actions and execute all such documents as may
be required in order to permit the Company to comply with all applicable
requirements of the Securities and Exchange Commission (the "Commission") and
all
21
other applicable laws or regulations and to obtain acceleration of the
effective date of the registration statement.
SECTION 3. AGREEMENTS OF THE COMPANY. The Company agrees that
it shall use its best efforts to have any registration statement filed pursuant
to this Exhibit C declared effective as promptly as practicable and advise
Sanyo Denki of the progress of such filing and of any review thereof undertaken
by the Commission and promptly notify Sanyo Denki when such registration
statement becomes effective.
SECTION 4. COSTS AND EXPENSES. The Company shall bear the
entire cost and expense of any registration made pursuant to Section 1 of this
Exhibit C, including all registration and filing fees, the fees and expenses of
the Company's counsel and its independent accountants and all other
out-of-pocket expenses of the Company incident to the preparation and filing
under the 1933 Act of the registration statement. The Company shall not be
liable or responsible for the following fees: (i) the fees and expenses of
counsel and accountants for Sanyo Denki and (ii) all underwriting discounts and
commissions and transfer taxes, if any, attributable to the Shares. All such
fees and expenses not paid by the Company shall be paid by Sanyo Denki.
______________________________________
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