AGREEMENT
THIS AGREEMENT made this 24th day of April, 1996 by and
among E&H Partners and between Emerson Radio Corp. ("Emerson" or
the "Company") on the one hand and Hopper Radio of Florida, Inc.
("Hopper"), Barry Smith ("Smith"), Kunio Takei ("Takei") and
Memcorp., Inc. ("Memcorp") (collectively, the "Hopper Parties")
and Donald Dvorkin ("Dvorkin") and Craig Roth ("Roth") on the
other. Emerson and the Hopper Parties and Dvorkin and Roth,
together with E&H Partners, may collectively be referred to as
the "Parties."
WITNESSETH:
WHEREAS, effective as of April 1, 1994, Emerson and
Hopper entered into a written agreement entitled "Partnership
Agreement of E&H Partners" (the "Partnership Agreement") for the
purpose of forming a partnership known as E&H Partners (sometimes
referred to as the "Partnership"); and
WHEREAS, effective as of April 1, 1994, Emerson and E&H
Partners entered into a written agreement entitled "Sales
Agreement" (the "Sales Agreement"), under which E&H Partners
agreed to purchase from Emerson and Emerson agreed to sell
exclusively to E&H Partners all "Emerson" branded or "H.H. Scott"
branded consumer electronics and microwave products returned by
Emerson's customers in the United States, except for any such
product which is returned by Emerson's customers for which
Emerson, with E&H Partners' and Hopper's consent, has entered
into a "Return to Vendor" program with a manufacturer (the
"Merchandise"); and
WHEREAS, on or about July 3, 1995, as amended on August
23, 1995, Emerson commenced an action against the Hopper Parties,
Dvorkin and Roth in the Superior Court of New Jersey, Morris
County, Law Division, entitled Emerson Radio Corp. v. Hopper
Radio of Florida, Inc., et al., Docket No. L-2062-95 (the "New
Jersey Action"); on or about January 26, 1996, Emerson commenced
an action against the Hopper Parties in the Court of Chancery for
the State of Delaware in and for New Castle County entitled
Emerson Radio Corp. v. Hopper Radio of Florida, Inc., et al.,
C.A. No. 14802 (the "Delaware Action"); and on or about March 7,
1996, the Hopper Parties filed a counterclaim against Emerson in
the Delaware Action (collectively, the "Litigation"); and
WHEREAS, Emerson agrees that Hopper and Smith shall be
permitted under this Agreement to continue selling new and
refurbished goods from other manufacturers and companies; and
WHEREAS, Memcorp has sold consumer electronic products
and, for purposes of this Agreement, will continue to sell
consumer electronic products, except as set forth in paragraph
13, below; and
WHEREAS, the parties have agreed to settle and dismiss
the Litigation on the terms and conditions set forth herein.
NOW, THEREFORE, the Parties hereto, in consideration of
the mutual covenants and agreements to be performed as set forth
below, hereby stipulate and agree as follows:
1. Payment By Hopper. On or before 1:00 p.m. Eastern
Standard Time on Friday, April 26, 1996 Hopper will loan to E&H
Partners, which will immediately pay to Emerson by single lump
sum bank wire transfer to Emerson's account no. 610-3760133 at
the Bank of New York, 1 Harmon Plaza, Secaucus, New Jersey 07099,
the amount of $5 million, representing approximately one-half
(1/2) of the difference between Hopper's present loan balance to
E&H Partners and Emerson's present loan balance to E&H Partners
as of that date (the "Hopper Loan"). Upon Emerson's receipt of
the Hopper Loan, E&H Partners will immediately grant to Emerson
and Hopper the Security Interest as set forth in paragraph 2
below, as evidenced by the exhibits attached hereto. The purpose
of the Hopper Loan is to allow E&H Partners to pay Emerson
for Merchandise sold by Emerson to the Partnership in an attempt to
bring Emerson's loan balance to E&H Partners equal to the amount
of Hopper's loan balance.
2. Security Interest In Partnership Inventory
2.1 E&H Partners hereby grants a security
interest to Hopper in the following property of the Partnership:
All goods (as defined by the Uniform
Commercial Code) of the Partnership wherever
located, whether now owned or leased or
hereafter acquired, including but not limited
to all inventory, Merchandise, raw materials,
supplies, parts, assemblies, subassemblies,
returned goods, packaging, cartons, goods in
transit, whether or not held by the
Partnership for processing, inspection,
remanufacturing, refurbishment, sale or
lease, or furnished or to be furnished under
contracts of service or to be used or
consumed in the Partnership's business, and
whether or not on consignment to the Partnership
or sold by the Partnership on consignment, on
a sale or return, sale on approval or sale or
use basis, all whether now existing, or owned
or hereafter arising, manufactured or
acquired, and in and to all substitutions and
replacements therefor, wherever the same may
be now or hereafter located;
All proceeds and products thereof,
All proceeds of insurance policies issued in
connection with or relating to the foregoing.
(collectively, the "Collateral"), to secure all liabilities to
Hopper outstanding from time to time, now or in the future, and
the Hopper Loan (including renewals, extensions, and
substitutions of any of the foregoing) arising out of or relating
to any and all loans or advances, services rendered and material
supplied to the Partnership by Hopper or its affiliates
(collectively, the "Hopper Secured Indebtedness").
2.2 E&H Partners has previously granted a
security interest to Emerson in goods (including inventory) which
Emerson has assigned to Congress Financial Corporation
("Congress"). E&H Partners hereby grants a new security interest
to Emerson in the following property of the Partnership:
All goods (as defined by the Uniform
Commercial Code) of the Partnership wherever
located, whether now owned or leased or
hereafter acquired, including but not limited
to all inventory, Merchandise, raw materials,
supplies, parts, assemblies, subassemblies,
returned goods, packaging, cartons, goods in
transit, whether or not held by the
Partnership for processing, inspection,
remanufacturing, refurbishment, sale or
lease, or furnished or to be furnished under
contracts of service or to be used or
consumed in the Partnership's business, and
whether or not on consignment to Partnership
or sold by the Partnership on consignment, on
a sale or return, sale on approval or sale or
use basis, all whether now existing, or owned
or hereafter arising, manufactured or
acquired, and in and to all substitutions and
replacements therefor, whether the same may
be now or hereafter located;
All proceeds and products thereof,
All proceeds of insurance policies issued in
connection with or relating to the foregoing.
(collectively, the "Collateral"), to secure all liabilities to
Emerson outstanding, from time to time, now or in the future,
including payment of accounts payable to Emerson for goods sold
and delivered by Emerson to the Partnership (the "Emerson Secured
Indebtedness").
2.3 The seniority and priority of the liens
granted to Hopper and to Emerson individually and collectively
(the "Emerson/Hopper Lien") shall be first priority, security
interests, equal in right and dignity to each other. So long as
Hopper and Emerson maintain perfected security interests in the
Collateral, the security interests of Hopper and of Emerson shall
be of equal rank with equal right to payment, regardless of when
the UCC-1 Financing Statements thereon were filed or indexed, or
the lien was first perfected. However, if either of them permits
its lien to become unperfected or junior to the lien of any other
person or entity such Party's lien shall be junior in right of
payment and in priority of lien of and to the rights of the
other.
2.4 The Partnership shall not permit any liens,
encumbrances, title retention rights or security interests in or
on the Collateral or on the assets of the Partnership other than
the security interest granted to Emerson and Hopper herein and
the lien granted to Emerson and assigned to Congress as set forth
in Congress' Consent Agreement, a true copy of which is attached
hereto as Exhibit A.
2.5 The bankruptcy of the Partnership or any
other insolvency involving the Partnership, or the commencement
of any proceeding under any federal or other bankruptcy,
insolvency, receivership, compromise of debt or other law for the
liquidation, reorganization or arrangement or compromise of debt,
prioritizing of creditors rights, or other restructuring shall
not affect the relative priorities of the Parties hereto or their
rights in any property of the Partnership or in which it has an
interest, including, without limitation, the Collateral. To the
extent that Emerson or Hopper receives payment or property
against the Hopper Loan or the Emerson Secured Indebtedness,
whether out of the Collateral, or the proceeds of any sale, lease
or transfer thereof, or in lieu of its interest therein, if any,
the recipient shall pay or deliver one-half of all such payments
or receipts to the other so that, as far as reasonably
practicable, the Hopper Loan balance and the Emerson Secured
Indebtedness shall be brought into balance and remain equal.
2.6 Neither Emerson nor Hopper may subordinate
any of the rights granted herein, the security interest in the
Partnership's property of any portion of the Hopper Loan or the
Emerson Secured Indebtedness to any third party, except for
Congress. Neither Emerson nor Hopper may lease, assign,
terminate or amend the rights of the other as the secured party.
In the event that continuation statements are filed by Emerson or
Hopper, such continuation statements shall serve as a
continuation statement for both Parties without the signature of
the corresponding Party.
2.7 (a) Each Party shall give prompt notice to
the other of the occurrence of any of the following events: (i)
such Party learns of or receives any notice of any material
default (including, without limitation, any non-payment of
amounts due or of amounts required to be paid to preserve,
maintain and protect any Collateral) by the Partnership with
respect to any indebtedness of the Partnership to Emerson or to
Hopper, or (ii) such Party gives any notice to the Partnership of
a default, or of an acceleration, under the terms of the
instruments relating to such indebtedness.
(b) Each such notice shall specify the
nature and extent of any such default and what actions, if any,
the Party giving such notice proposes to take under the operative
agreements, or any of them.
(c) Without limiting the rights of either
Hopper or Emerson to collect the full amount due and owing to it
from the Partnership, each of them agrees that it will at all
times cooperate in the enforcement of the security interests in,
pledges on, and liens and other encumbrances upon the Collateral
of the other.
2.8 Emerson and Hopper shall have the right, without
liability to the other, to repossess and/or to foreclose upon the
Collateral with or without notice or demand to the other and to
avail itself of any other legal or equitable remedy, except that
the Parties agree that neither Hopper nor Emerson may exercise
any such repossession or foreclosure or levy rights unless and
until the Partnership: (i) becomes insolvent as such term is
given meaning under the United States Bankruptcy Code (Title 11
United States Code) (the "Bankruptcy Code"); (ii) makes an
assignment for the benefit of its creditors generally; (iii)
filed for or is the subject of an order for relief under the
Bankruptcy Code relating to the Partnership; (iv) seeks
appointment of a receiver, trustee or custodian for the
Partnership or its assets; (v) the foreclosure, turnover
(voluntary, by operation of law or by court order) of all or a
portion of the Collateral to a creditor, sale or scheduling for
sale of any portion of the Collateral by another creditor under a
power of sale or court process; or (vi) the granting by the
Partnership of any liens upon the Collateral or the sufferance by
the Partnership of any lien or charge upon the Collateral other
than to secure the payment of the Hopper Loan or the Emerson
Secured Indebtedness ("Events of Default"), except for Congress.
2.9 Subject to the provisions of this Agreement which
may restrict the unfettered right of Hopper or of Emerson to
exercise its rights as a secured creditor under the UCC, upon the
occurrence of any such Event of Default, and at any time
thereafter, in addition to any right given by law or any other
instrument or document executed by the Partnership and without
notice or demand, Hopper and Emerson, as secured creditors: (a)
shall have all rights and remedies afforded to secured creditors
under the Uniform Commercial Code; (b) may and are authorized to
enter upon and use the Partnership's premises for a reasonable
period of time and use any and all equipment and property used or
useful in the preservation and maintenance of the Collateral,
without rental or other compensation; (c) may take immediate
possession of all or any portion of the Collateral, with or
without legal process, and timely take such measures as it may
deem necessary for the proper care and protection thereof; (d)
may haul, deliver, store (for a reasonable period of time) and
sell the Collateral, or any part thereof, at such time or times
for such sum or sums of money as it may deem proper, which sale
may be public or private, and at any such sale, either of such
creditors may be the purchaser of the Collateral. Whenever
notification with respect to the sale or other disposition of
Collateral is required by law, such notification of the time and
place of any public sale, or of the date after which a private
sale or other intended disposition is to be made, shall be deemed
reasonable if given at least five (5) days before the time of
such public sale, or the date after which any such private sale
or other intended disposition is to be made, as the case may be.
All of the rights of Emerson and of Hopper as creditors, and all
of their respective remedies, whether by statute, rule, common
law or evidenced hereby or by any other agreement, instrument or
paper, shall be cumulative and may be exercised separately or
concurrently. The Partnership agrees to pay on demand all costs
and expenses (including reasonable attorneys' fees) incurred or
paid by Emerson and Hopper as secured creditors in enforcing the
obligations secured by this Agreement and the same shall be
additional obligations hereunder and secured hereby. After
deducting all costs and expenses of collection, storage, custody,
sale or other disposition and delivery (including legal costs and
reasonable attorneys' fees) and all other charges against the
Collateral, the residue of the proceeds of any such sale or other
disposition shall be applied to the payment of any and all
obligations of the Partnership secured hereby and any and all
other liabilities hereby secured, due or to become due, in such
order of preference as Hopper and Emerson may reasonably
determine as provided in this Agreement, proper allowance for
interest on liabilities not then due being made, and, unless
otherwise provided by law, any excess shall be returned to the
Partnership. Either Hopper or Emerson may proceed against the
Collateral, any other security, any guaranty, suit on the debt,
or take such other action as it deems necessary or appropriate,
in such order as it may elect, and need not marshal Collateral
and may proceed against any obligor, asset or surety regardless
or the interest of other therein.
2.10 Emerson represents to the Partnership and to
Hopper that upon sale of any Merchandise to the Partnership there
shall be no liens, encumbrances or title retention rights in
favor of third parties in such Merchandise and that upon such
sale or transfer, the Partnership shall acquire the same free of
any liens, encumbrances or title retention rights of Emerson or
of third parties other than Congress.
2.11 The Partnership will join with Emerson and
with Hopper in the appropriate financing statements under the
Uniform Commercial Code, and at all times, the Partnership will
do, execute, acknowledge and deliver, and will cause to be done,
executed, acknowledged and delivered, by any corporation or
person obligated to the Partnership so to do, all and every such
further acts, deeds, and assurances as Emerson or Hopper shall
reasonably require for the better assuring and confirming unto
them, as secured creditors, the security interest in the
Collateral and the rights, privileges and remedies hereby or in
any other agreement created, granted or assigned, or intended so
to be, or which it may hereafter become bound to create, grant or
assign to Emerson or to Hopper. If the Partnership shall fail or
refuse to execute or deliver the same, any officer of Emerson or
of Hopper is authorized and appointed the Partnership's agent and
attorney in fact to execute and deliver the same in the
Partnership's name as the act, and deed of the Partnership.
2.12 Copies of all relevant financing statements
are attached hereto as Exhibit B.
3. E&H Partners' Billings. E&H Partners will continue to
accept all of the Merchandise, that is actually received by
Emerson or its agents through and including December 31, 1996 and
the billings related thereto. The Parties specifically agree and
acknowledge that the billings shall be paid only when there is
sufficient cash flow as set forth in paragraphs 6 and 7 below,
from the offset of the amount equal to the value of the
Designated Stock as set forth in paragraph 4 below and from the
value of the warehousing services set forth in paragraph 8 below.
4. Purchase of Designated Stock. Emerson agrees to
purchase certain designated stock in accordance with its currently
existing practice with the Partnership (the "Designated Stock")
that E&H Partners can make available in reasonable quantities,
with minimum lots of 100 units for each model for each weekly
billing period and in accordance with the pricing structure
currently used (i.e., E&H Partners' normal selling price of the
same models at similar quantities) and/or as otherwise mutually
agreed to by and between Emerson and Hopper. The pricing
structure currently used for the Designated Stock does not
necessarily reflect the price at which E&H Partners sells its RB
(refurbished) product. Hopper agrees and acknowledges that upon
the earliest of (i) movement of the Designated Stock to the
storage area maintained by the Partnership for Emerson-owned
inventory or shipment to or for Emerson, or (ii) any other
segregation of such Designated Stock (physically or in the
Partnership's records) from the inventory owned by and to be sold
by the Partnership to customers other than Emerson, or (iii) the
invoicing of such Designated Stock to Emerson, such Designated
Stock is no longer subject to the Emerson/Hopper Lien and title
thereto shall be deemed to have passed to Emerson. E&H Partners
shall have no responsibility for any warranty claims on or
returns of the Designated Stock and Emerson shall provide all
warranty service and products liability insurance for the
Designated Stock (which insurance shall cover E&H Partners as an
additional insured.)
5. Payment of Fees. E&H Partners will continue to pay
the following service fees which Hopper presently charges to E&H
Partners in accordance with paragraph 4.5 of the Partnership
Agreement: (i) a 1.5% management fee based upon net sales of E&H
Partners; and (ii) reimbursement for certain of Hopper's
warehouse and office overhead expenses that is allocable to E&H
Partners based upon services actually rendered to E&H Partners,
so long as Barry Smith, President of Hopper, is the General
Manager of E&H Partners.
6. Cash Flow Sharing. Emerson and Hopper agree to share
evenly the cash flow of E&H Partners after paying normal operating
expenses and any purchases from the Otake Companies as set forth
in paragraph 9 below. The Partner with the higher loan balance
at each month's end shall receive the first cash distributed by
E&H Partners to the extent necessary to make the loan balances
equal.
7. Repayment Of Loan Balance. Any monies due on the
Partners' respective loan balances (which includes both current and
future billings and/or loans made by the respective Partners' to the
Partnership in accordance with this Agreement) following the
reconciliation set forth in paragraph 6 above may only be paid
from the cash flow of the Partnership as set forth in paragraph 6
above and from the proceeds of a foreclosure set forth in
paragraph 2 above, and with respect to Emerson only, from the
offset of the amount equal to the value of the Designated Stock
as set forth in paragraph 4 above and, also, the value of the
warehousing services as set forth in paragraph 8 below. In the
event of foreclosure as set forth in paragraph 2 above, the
Partner whose loan balance is greater than the other at such time
of foreclosure shall be entitled to first payment out of the
proceeds of the foreclosure Collateral in that amount necessary
to make the loan balances equal. For purposes of this Agreement,
references to Emerson's loan balance and the Emerson Secured
Indebtedness refer to all unpaid amounts for (1) Emerson's
billing of the Merchandise to E&H Partners; (2) expenses paid by
Emerson on behalf of E&H Partners; and (3) services rendered to
or on behalf of E&H Partners by Emerson. For purposes of this
Agreement, references to Hopper's loan balance and the Hopper
Secured Indebtedness refer to all unpaid amounts for (1) Hopper's
cash advances to E&H Partners; (2) expenses paid by Hopper on
behalf of E&H Partners; and (3) services rendered to or on behalf
of E&H Partners by Hopper.
8. Warehousing Services. E&H Partners will continue to
provide warehousing services (distribution and receiving) to Emerson
for Emerson-owned inventory in accordance with the terms and
conditions established between Emerson and Hopper, until such
time as Emerson provides thirty (30) days prior written notice to
E&H Partners for discontinuance of such services. Emerson
understands that E&H Partners' obligation to perform these
warehousing services exists only so long as E&H Partners is using
the "Potter Building" located in Princeton, Indiana. E&H
Partners hereby represents that it has in the past segregated and
will continue to segregate Emerson-owned inventory in its
warehouse facilities and its books and records. E&H Partners
also hereby acknowledges that Congress holds a first lien on all
such Emerson-owned inventory. In the event Congress forecloses
its lien upon such Emerson-owned inventory, both E&H Partners and
Emerson will cooperate with Congress' instructions regarding the
disposition of such Emerson-owned inventory. Emerson shall pay
for any reasonable costs of the obligations or services provided
by the Partnership under this paragraph 8.
9. Purchase And Sale Of Returned Goods And Merchandise.
Any and all purchases and sales of "Emerson" branded refurbished
goods from Orion Sales, Inc., Orion Electric (America), Inc.,
Otake Trading Co., Ltd., Technos Development Limited and their
respective affiliates (the "Otake Companies") will be made by any
of the Parties hereto for the benefit of E&H Partners.
10. Realization Of Payments. All payables and receivables
between Emerson, Hopper and E&H Partners, including the
Designated Stock described in paragraph 4 above, are to be netted
weekly beginning with the first week following execution of this
Agreement.
11. Repayment Of Past Interest Claims To Emerson.
Notwithstanding any other provisions to the contrary in the
Partnership Agreement, the Partnership Agreement is hereby
amended to provide that E&H Partners shall remit payment to
Emerson in the amount of $800,000 in satisfaction of all past
interest claims due and owing to Emerson from the Partnership as
of the date hereof ("past interest claims due") solely as
follows:
11.1 If there is a sale of a Partner's interest in
accordance with the terms of the Partnership Agreement and the
purchase price is in excess of the respective Partner's Capital
Account (Partner's equity in Partnership), such excess shall be
paid to Emerson, up to the then balance of past interest claims
due at such time, any remaining amounts thereafter shall be
applied and/or distributed in accordance with Article VII of the
Partnership Agreement;
11.2 If there is a sale of all or substantially
all of the Partnership's assets with the purchase price(s)
received in excess of all Partners' Capital Accounts (Partners'
equity in the Partnership), such excess shall be paid to Emerson,
up to the then balance of past interest claims due at such time,
any remaining amounts thereafter shall be applied and/or
distributed in accordance with Article VII of the Partnership
Agreement; and
11.3 If profits are realized by the Partnership on
sales of "Emerson" branded refurbished products purchased from
the Otake Companies, or any of them, during such time as Emerson
maintains an exclusive relationship with the Otake Companies, or
any of them, for the purchase of "Emerson" branded refurbished
product, such profits, including any profit realized from the
sale of any such "Emerson" branded refurbished product purchased
during the time in which Emerson maintained an exclusive
relationship with the Otake Companies, or any of them, for the
purchase of "Emerson" branded refurbished product, shall be
allocated two-thirds (2/3) to Emerson and one-third (1/3) to
Hopper with the difference between the two-thirds (2/3) received
by Emerson and one-third (1/3) of such profit to be allocated to
payment towards and reduction of the past interest claims due
until such time as the past interest claims due is paid in full.
If profits are realized by the Partnership on sales of "Emerson"
branded refurbished products purchased from the Otake Companies,
or any of them, during such time as Emerson does not maintain an
exclusive relationship with the Otake Companies, or any of them,
for the purchase of "Emerson" branded refurbished product, such
profits shall be allocated one-half (1/2) to Emerson and one-half
(1/2) to Hopper. If profits are realized by the Partnership on
sales of products resulting from any transaction Emerson may
bring to E&H Partners from any supplier other than the Otake
Companies, or any of them, the profits will be allocated two-
thirds (2/3) to Emerson and one-third (1/3) to Hopper until such
time as the past interest claims due is paid in full.
11.4 For the purposes of this Article, "profits"
is defined as the gross sales price to third party customers less
the purchase price paid to third party vendors and less any other
incremental expenses directly attributable to such sale.
11.5 Payment of the interest contemplated by this
paragraph 11 shall be in full and complete satisfaction of all
interest claims of Emerson and Hopper. Emerson and Hopper agree
not to charge interest, late fees or any other charges related
thereto, after March 31, 1996 on their respective loans and/or
advances outstanding from time to time, now or in the future.
12. No Transfers. Nothing herein shall be interpreted as
amending any of the provisions of the Partnership Agreement
regarding transfer of interests in Article X of the Partnership.
13. Sourcing Of Video Product By Memcorp. Emerson and the
Hopper Parties hereby agree that Memcorp shall not source any
video product from Kong Wah Video Company Limited and its
affiliates for its 1996 product line, except for the nine inch
(9") color television already on order as of the date hereof, and
from the Otake Companies for its 1996 product line, except for
the TV/VCR combination units already on order as of the date
hereof and any other video products not in Emerson's current
product line-up. This provision shall immediately be waived in
the event of and upon Emerson's sale, licensing or discontinuance
of its entire existing television and video business.
14. Press Release. Emerson has prepared a joint press
release in the form and substance attached hereto as Exhibit C,
which Memcorp has approved, concerning the agreements and covenants
contained herein, immediately prior to execution hereof and which
may be issued immediately thereafter. This provision recognizes
that Emerson as a publicly traded company is required to issue
press releases regarding its material transactions in a timely
manner.
15. Dissolution Of E&H Partners. Article XII of the
Partnership Agreement is hereby amended to provide that the
Partnership shall be dissolved and its affairs wound-up upon the
first to occur of the following:
15.1 A mutual determination in writing by the
Partners to dissolve the Partnership other than as provided
herein;
15.2 The occurrence of the dissolution, insolvency
or bankruptcy of a Partner if such event leaves only one other
Partner remaining as a Partner;
15.3 The entry of a judgment of dissolution by a
court of competent jurisdiction or appointment of a receiver for
all or substantially all of the Partnership's assets;
15.4 A change of the largest common shareholder of
Emerson from Emerson's current Chairman and Chief Executive
Officer, Geoffrey P. Jurick, as held individually and/or with
affiliates, successors or assigns;
15.5 If prior to December 31, 1996, upon thirty
(30) days' written notice by either Partner that it wishes to
dissolve the Partnership, but only if the loan balances of each
and every Partner is paid in full on the date such written notice
is dated or given, whichever is earlier;
15.6 If after December 31, 1996, upon written
notice by either Partner to the other partner that it wishes to
dissolve the Partnership, the dissolution shall occur in an
orderly manner and as expeditiously as possible, supervised by
Barry Smith as the Managing Partner, and which dissolution shall
honor all outstanding agreements and obligations but in no event
shall the dissolution be completed and operations cease later
than six (6) months after the date of such notice. The Managing
Partner may continue to operate the Partnership in the normal
course of business during any such dissolution and may continue
to make any and all decisions reasonably necessary to operate the
Partnership to the extent set forth in the Partnership Agreement.
15.7 Article 12.1 of the Partnership Agreement
shall be amended, effective upon execution of this Agreement,
specifically and solely as set forth in paragraph 15 herein.
16. Ratification And Incorporation By Reference Of
Partnership Agreement And Sales Agreement. All of the terms and
conditions of the Partnership Agreement (the terms of which are
incorporated by reference as if fully set forth herein), as hereby
amended, are ratified, confirmed and adopted. Similarly, all of the
terms and conditions of the Sales Agreement (the terms of which are
incorporated by reference as if fully set forth herein), as
hereby amended, are ratified, confirmed and adopted. Neither the
Partnership Agreement nor the Sales Agreement may be further
modified, amended or superseded except as provided specifically
herein, and no provision of either the Partnership Agreement or
the Sales Agreement may be waived, except in writing duly
executed by Emerson and Hopper and their respective affiliates,
successors or assigns.
17. Dismissal Of Litigation. The Parties agree to execute
appropriate stipulations to dismiss the Litigation with prejudice
and without costs or attorneys' fees to either party and will
cause to be filed any and all necessary stipulations of dismissal
in the appropriate courts no later than Friday, April 26, 1996.
18. Release By Emerson. In consideration of the Hopper
Loan and the other consideration provided by the Hopper Parties
hereunder, Emerson shall, upon receipt of the Hopper Loan and
execution of this Agreement, release and forever discharge the
Hopper Parties and E&H Partners and their respective officers,
directors, shareholders, agents, employees and affiliates individually
or collectively, from and against any and all claims asserted or
assertable that Emerson may have against each and every one of
the Hopper Parties and E&H Partners from the beginning of time to
the date of execution of this Agreement. Emerson shall provide
the Hopper Parties with separate general releases of all claims
consistent with this paragraph 18, except that neither the Hopper
Parties nor E&H Partners shall be released from their respective
obligations to perform under this Agreement. Emerson
specifically acknowledges and agrees that Dvorkin's, Roth's and
Takei's employment and all duties for and on behalf of Emerson
have expired and that there are no obligations of any nature due
and owing from Dvorkin, Roth and/or Takei to Emerson except for
the obligations provided in this Agreement. Emerson also agrees
to release Dvorkin and Roth under the same terms and conditions
as set forth in this paragraph 18.
19. Release By The Hopper Parties. In consideration of
the mutual agreements set forth herein and other good and valuable
consideration, the Hopper Parties hereby release and forever
discharge Emerson and E&H Partners and their respective officers,
directors, shareholders, agents, employees and affiliates,
individually and collectively, from and against any and all
claims, asserted or assertable, each and every one of the Hopper
Parties may have against Emerson and/or E&H Partners from the
beginning of time to the date of execution of this Agreement.
The Hopper Parties shall provide Emerson and E&H Partners with
separate general releases of all claims consistent with this
paragraph 19, except that neither Emerson nor E&H Partners shall
be released from their respective obligations to perform under
this Agreement.
20. Release By Dvorkin And Roth. In consideration of
the dismissal of the Litigation and other good and valuable
consideration, Dvorkin and Roth hereby release and forever
discharge Emerson and its officers, directors, shareholders,
agents, employees and affiliates, individually and collectively,
from and against any and all claims, asserted or assertable by
Dvorkin and/or Roth against Emerson, as evidenced by their
respective signatures below. Dvorkin, Roth and Takei
specifically do not release Emerson from any duty which Emerson
may owe to defend or indemnify them pursuant to the terms of
their previous employment by Emerson or its subsidiaries and
affiliates, or from its obligations to perform under this
Agreement.
21. Release By E&H Partners. In consideration of the
mutual agreements set forth herein and other good and valuable
consideration, E&H Partners hereby releases and forever
discharges Emerson, the Hopper Parties, Dvorkin and Roth and
their respective officers, directors, shareholders, agents,
employees and affiliates, individually and collectively, from and
against any and all claims, asserted or assertable, E&H Partners
may have against Emerson and/or the Hopper Parties, Dvorkin and
Roth. E&H Partners shall provide Emerson, the Hopper Parties,
Dvorkin and Roth with separate general releases of all claims
consistent with this paragraph 21, except that neither Emerson,
the Hopper Parties, Dvorkin nor Roth shall be released from their
respective obligations to perform under this Agreement.
22. Further Acts. The Parties shall execute and deliver
such instruments and take such other actions as may be necessary
or desirable in order to carry out the provisions of this Agreement,
without any further consideration therefor, except where
specifically provided.
23. Representations and Warranties. The Hopper Parties
jointly and severally represent and warrant that: (i) each of the
Hopper Parties has full power and authority, corporate and other, to
execute and deliver this Agreement, and to perform its
obligations hereunder; (ii) this Agreement has been duly
authorized, executed and delivered by each of the Hopper Parties,
and constitutes a valid and binding agreement of each of them,
enforceable against each of them in accordance with the terms;
(iii) each of the Hopper Parties has been represented by and has
consulted with an attorney concerning this Agreement and
understands and accepts the terms hereof. Emerson represents and
warrants that: (i) it has full power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder; (ii) this Agreement has been duly executed and
delivered by Emerson and constitutes a valid and binding
agreement of Emerson enforceable against Emerson in accordance
with its terms, and (iii) Emerson has represented by and has
consulted with an attorney concerning this Agreement and
understands and accepts the terms hereof. The Partnership
represents and warrants that it has all rights to convey, to
Emerson and Hopper equally, a valid first security lien and
interest in all of E&H Partners' present and future inventory and
the proceeds thereof as referred to in paragraph 2 above.
24. Notices. All notices or other communications given
hereunder shall be in writing and shall be delivered personally,
by certified mail, return receipt requested, or overnight mail,
postage prepaid, and shall be deemed given when delivered if
delivered personally, or if mailed, such notice shall be deemed
given three (3) days after the date of mailing, excluding
Sundays. All notices provided hereunder shall be sent to the
parties at the following addresses:
If to Emerson: Eugene I. Davis, President
Emerson Radio Corp.
9 Entin Road
Parsippany, NJ 07054
Phone: (201) 428-2000
With a copy to: Jeffrey M. Davis, Esq.
Wolff & Samson, P.A.
5 Becker Farm Road
Roseland, NJ 07068
Phone: (201) 533-6561
Fax: (201) 740-1407
If to the Hopper
Parties: Barry Smith
Hopper Radio of Florida, Inc.
7145 W. 20th Avenue
Hialeah, FL 33014
With a copy to: Craig B. Sherman, Esq.
Sherman & Fischman, P.A.
3050 Biscayne Boulevard
Suite 600
Miami, FL 33137-4269
Phone: (305) 576-5522
Fax: (305) 576-7079
If to E&H Partners: Barry Smith
General Partner
E&H Partners
7145 W. 20th Avenue
Hialeah, FL 33014
If to
Donald Dvorkin: Donald Dvorkin
27 Denison Drive
Saddle River, NJ 07458
Fax: (201) 825-2085
If to Craig Roth: Craig Roth
14 Franklin Court
Bernardsville, NJ 07929
If to Memcorp: Memcorp. Inc.
7145 W. 20th Avenue
Hialeah, FL 33014
or at such other addresses as shall be furnished in writing by a
party hereto to the other parties hereto.
25. Complete Agreement. This Agreement, the Releases,
and the Partnership Agreement and Sales Agreement as amended by this
Agreement, constitute the entire agreement between the Parties
hereto pertaining to the subject matter hereof and supersedes all
prior written, oral or implied agreements or understanding as to
such subject matter, except as expressly provided herein.
26. Jurisdiction and Governing Law. This Agreement shall
be exclusively governed by and construed in accordance with the laws
of the State of Delaware without giving effect to and without
reference to the choice of law principles thereof. Jurisdiction
and venue for all purposes shall be in Delaware exclusively. No
party shall seek to transfer jurisdiction and venue to any
jurisdiction other than Delaware.
27. Amendment and Modifications. This Agreement may only
be amended or modified in writing signed by the party against whom
enforcement of such amendment or modification is sought.
28. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of, each of the Parties, and
each of their respective executors, administrators, successors,
assigns and legal representatives.
29. Titles and Headings. The titles and headings in this
Agreement are for reference purposes only, and shall not in any
way affect the meaning or interpretation of this Agreement.
30. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original
agreement, but all of which together shall constitute one and the
same instrument.
31. No Waiver. Neither any failure nor any delay on the
part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver hereof or thereof, nor shall a
single or partial exercise thereof preclude any other or further
exercise or any other right, power or privilege.
32. Severability. If any provision of this Agreement shall
be determined to be invalid or unenforceable to any extent, the
remainder of this Agreement shall not be affected thereby, and
each provision hereof shall be enforced to the fullest extent
permitted by law.
33. Taxes. Each Party to this Agreement shall bear its own
tax consequences, if any, that arise as a result of this Agreement.
34. Third Parties. Except as may be expressly set forth
herein, the parties hereto do not intend to confer any rights or
remedies upon any person other than the parties hereto.
35. Attorneys' Fees. Each of the Parties to this Agreement
shall bear all of his or its attorneys fees and all of his or its
expenses relating to all claims between the parties to date,
including but not limited to, the preparation and review of this
Agreement and all related matters. In the event of any
litigation related to, arising out of or concerning this
Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs. The representation of a Party to this
Agreement shall not in and of itself preclude representation of
E&H Partners.
36. Controlling Agreement. To the extent that this
Agreement, or any section or portion of this Agreement, is
inconsistent with either the Partnership Agreement or the Sales
Agreement, then and in that event the terms of this Agreement shall
control over the Partnership Agreement and/or the Sales Agreement.
IN WITNESS WHEREOF, the Parties have caused this
Agreement to be executed by the undersigned, thereunto duly
authorized, as of the day and year first above written.
HOPPER RADIO OF FLORIDA, INC.
By:_/s/Barry Smith__________
Barry Smith, President
BARRY SMITH
__/s/Barry Smith ___________
KUNIO TAKEI
__/s/Kunio Takei__________
DONALD DVORKIN
__/s/ Donald Dvorkin______
CRAIG ROTH
__/s/ Craig Roth __________
MEMCORP., INC.
By:_/s/ Barry Smith _______
E&H PARTNERS
Emerson Radio Corp.
By:___/s/ Eddie Rishty______
Eddie Rishty, Senior Vice
President-Controller &
Logistics
-and-
Hopper Radio of Florida,
Inc.
By:__/s/ Barry Smith________
Barry Smith, President
EMERSON RADIO CORP.
By:__/s/ Eddie Rishty_______
Eddie Rishty, Senior Vice
President-Controller &
Logistics