PARTNERSHIP AGREEMENT
OF
E & H PARTNERS
Effective as of April 1, 1994
PARTNERSHIP AGREEMENT
OF
E & H PARTNERS
This Partnership Agreement effective as of April 1, 1994, by and
among Emerson Radio Corp., a New Jersey corporation with its principal
office located at 9 Entin Road, Parsippany, New Jersey 07054
("Emerson") and Hopper Radio of Florida, Inc., a Florida corporation,
with its principal office located at 7145 West 20th Avenue, Hialeah, Florida
33014 ("Hopper").
WHEREAS, the parties wish to form a general Partnership under the
laws of the State of Delaware for the purposes hereinafter described;
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth and other good and valuable consideration, the receipt of which is
hereto hereby acknowledged, the parties hereby agree as follows:
I. DEFINITIONS. Certain defined terms used in this Agreement are
set forth in Exhibit A.
II. ORGANIZATION.
2.1 Formation. The parties hereby form a general Partnership
pursuant to the provisions of this Agreement and the laws of the State of
Delaware.
2.2 Name. The name of the Partnership shall be E & H Partners.
2.3 Trade Name. The Partnership shall conduct its business
under any trade name selected by the Partners.
2.4 Term. The term of the Partnership shall commence as of
the date hereof and shall continue until terminated in accordance with the
provisions of this Agreement.
2.5 Principal Office and Qualifications.
2.5-1 The principal office of the Partnership shall be
located at 7145 West 20th Avenue, Hialeah, Florida 33014, or such other
place as may from time to time be determined by the Partners.
2.5-2 The Partners shall use their best efforts to
qualify the Partnership to do business in each jurisdiction where the
activities of the Partnership make such qualification necessary.
III. PURPOSE; LICENSES; OTHER BUSINESS.
3.1 Purposes. The Partnership is being organized for the
following:
3.1-1. To purchase consumer electronics products from
Emerson which products are returned to Emerson by its customers and are
available for resale "AS-IS" ("Merchandise"), to refurbish such
Merchandise, if feasible, and to sell such Merchandise as refurbished or
"as is" worldwide in all countries in which Emerson has trademark rights
to the Emerson brand name and trademark ("Merchandise Territory") in
accordance with the Sales Agreement between Emerson and E & H Partners
("Sales Agreement") made as of the date hereof.
3.1-2. To purchase new consumer electronics products
("New Products") from manufacturers sourced through Emerson Radio
International Ltd. upon the terms to be determined by the parties thereto,
or through third party sources if such New Products can be obtained on more
favorable prices and terms, and to sell the New Products solely in the
countries of Mexico, Central and South America in which Emerson has
trademark rights to the Emerson brand name and trademark and upon the terms
to be determined by the Partners ("New Product Territory"). The Partners
shall select an importer of record.
3.2. Licenses. Emerson agrees to license to the Partnership
the trademark design and logo associated with the Emerson name in
connection with the Partnership's purposes as specifically defined herein
upon the terms to be agreed to by the Partners.
3.3 Other Business. In the event the Partnership performs a
service for either Partner for their individual benefit and not for the
benefit of the Partnership, the Partnership shall charge such Partner a fee
for providing such services. However, prior to performing such services,
the Partners must agree that the Partnership may perform such services and
agree to the amount of fee to be charged.
IV. INITIAL CAPITAL CONTRIBUTIONS.
4.1 Proportions. Unless otherwise agreed by all of the
Partners, all Initial Capital Contributions ("Initial Contributions") from
the Partnership shall be made as follows:
4.1-1 Emerson shall (a) contribute Merchandise to the
Partnership equal to the amount of Hopper's Initial Cash Contribution
including working capital for the first ninety (90) days of operation for
including but not limited to costs of labor, rent, overhead, materials,
refurbishing and sales expense which amount shall not exceed Five Hundred
Thousand ($500,000) U.S. dollars; (b) sell the Merchandise to E & H
Partners at the prices set forth in the Sales Agreement, as same may be
amended; (c) license to the Partnership its trademark, design and logo upon
terms to be agreed to by the Partners; (d) provide E & H Partners access to
its vendors through Emerson, (e) relinquish the territories for refurbished
Merchandise as set forth herein and in the Sales Agreement; and f) lease to
the partnership the equipment to refurbish the Merchandise which Emerson
currently owns at its facility located in Princeton, Indiana at a lease
rate of $1.00/year which equipment Emerson represents is presently in good
working condition. However E & H Partners shall be responsible for the
repair and maintenance of such equipment. It is agreed by the Partners that
Emerson's Initial Contribution shall constitute Emerson owning 50%
Percentage Interest in the Partnership.
4.1.-2 Hopper shall (a) provide the set price list
at which all Merchandise shall be sold which shall be approved in advance
by the Partners. In order for Hopper to sell such Merchandise at prices
below such approved price list, Hopper shall obtain Emerson's prior written
approval, (b) provide E & H Partners with financing subject to both
Partners agreeing to the terms of the financing; c) provide the physical
location for the partnership to perform its refurbishing of merchandise at
a rental rate of $2.00/ft. or as otherwise agreed to by the Partners;
d) provide the employees for the Partnership and the overhead cost for the
first ninety (90) days of operation including but not limited to costs
of labor, rent, overhead, materials, refurbishing, sales expenses, initial
purchase of Merchandise, which amounts in the aggregate shall not exceed
Five Hundred Thousand ($500,000) U.S. dollars. It is agreed by the
Partners that Hopper's Initial Contribution shall constitute Hopper owning
50% Percentage Interest in the Partnership.
The Partners shall agree to the value to be assigned to each Partner's
Initial Contribution.
4.2 Forfeiture. Each Partner hereby acknowledges and agrees
that the Partnership and each of the Partners are relying upon the prompt
performance in making all Initial Contributions. Accordingly, each Partner
hereby pledges to the Partnership and each other Partner its Percentage
Interest to secure its obligations to make all Initial Contributions
pursuant to Section 4.1 hereof. If any Partner fails to make its Initial
Contribution, it shall be deemed to be a Defaulting Partner and its
Percentage Interest shall be subject to foreclosure and shall be
extinguished as damages for such default. Each Partner acknowledges that
if it is a Defaulting Partner, it shall lose its entire investment in the
Partnership.
4.3 No Withdrawal of Interest. No Partner shall have the
right to withdraw any part of its Initial Contribution or to receive any
distribution, except in accordance with the provisions of this Agreement.
No interest shall be paid on any Initial Contribution.
4.4 Advances by Partners. If any Partner shall advance
funds to the Partnership other than as provided in this Article, the
amount of such advance shall not be deemed a Capital Contribution unless the
Partners expressly agree otherwise in writing. The amount of such advance
shall be agreed to in advance by the Partners and shall be debt due from
the Partnership to such Partner for all purposes and shall be evidenced
by a promissory note of the Partnership payable to the order of the lending
Partner. The lending Partner shall have all rights of a creditor against
the Partnership for all purposes. The Partners may cause the Partnership
to repay any advances to the Partnership in accordance with their terms out
of available funds prior to any distributions to the Partners under any
other provision of this Agreement. Any advance made by a Partner shall
bear such interest and shall have such other terms as are determined by
the Partners.
4.5 Services by Partners. In the event either Partner, in
its individual capacity and not as a Partner of the Partnership, provides
services to the Partnership for the Partnerships benefit, such Partner
shall charge the Partnership a fee for such services. However, prior to
the acceptance by the Partners of such services, the Partners must agree
that the Partnership may accept such services and agree to the amount of
fee to be charged. In accordance herewith, it is hereby agreed and
understood that, except for the sales expense during the initial ninety
(90) days of operation as defined in Section 4.1 hereof, in its capacity as
selling agent for the Partnership, Hopper shall be paid a fee of gross
sales payable as agreed to by the Partners.
V. CAPITAL ACCOUNTS.
An individual Capital Account shall be maintained for each
Partner, and the Partner's Initial Contribution shall be credited to that
account. Capital Accounts shall be maintained in accordance with section
1.704-1(b) (2) (iv) of the Regulations. In applying the preceding
sentence, where any item may be treated in more than one manner under
such Regulations, the decision as to which permissible manner is selected
shall be made by the Partners. Notwithstanding anything herein to the
contrary, consistent with section 1.704-1(b) (2) (iv) of the Regulations,
the Capital Accounts of all Partners shall be adjusted to reflect the fair
market value of the Partnership's assets (including intangible assets) in
connection with (and to be effective immediately prior to) any contribution
of capital to or distribution of property from the Partnership, other than a
contribution or distribution which is pro rata among all Partners, or upon
the liquidation of the Partnership. The Partners understand and acknowledge
that the Capital Accounts as so maintained shall be the basis upon which
the Partners' Percentage Interests in the Partnership are determined for
all purposes hereunder.
VI. ALLOCATION OF PROFITS AND LOSSES.
6.1 Allocations to be Pro Rata. Profits or Losses for any
Accounting Period shall be allocated fifty percent (50%) to each Partner
for that Accounting Period.
6.2 Definition of Profits and Losses. Profits or Losses
shall mean, for each Accounting Period, the amount of net profit or net
loss as shown of the financial statements of the Partnership (which
financial statements shall be consolidated with those of any subsidiaries
the Partnership may at any time own) for such Accounting Period prepared
pursuant to Article XIII in accordance with generally accepted accounting
principles, consistently applied ("GAAP"); provided, however, that for
purposes of adjusting the Partner's Capital Accounts in accordance with
Article V to reflect such Profits or Losses, the Profits or Losses
determined in accordance with GAAP shall be adjusted as shall be deemed
necessary by the Partners, in order to make such definition of Profits
and Losses consistent with the principles set forth in section 1.704-1(b)(2)
of the Regulations. Any elections or other decisions relating to the
manner in which the income, deductions, gains, losses and credits of the
Partnership shall be allocated for tax purposes among the Persons who
were Partners during a given Accounting Period shall be made by the Partners
in such manner as they deem equitable; provided that any such allocation
shall be in accordance with the Code and the Regulations.
VII. DISTRIBUTIONS.
7.1 Time and Amount of Distributions. Distributions of
cash shall be made from the Partnership to the Partners on a quarterly basis
or at such other times as the Partners may determine; provided, however,
that for any calendar year the Partnership shall distribute cash no less than
the "Tax Distribution Amount" (as defined in Section 7.3). The Partners
shall make such minimum distributions at such times during the calendar
year and during the 75 days following the end of the calendar year as
shall enable the Partners to use such distributions to satisfy their
estimated and final income tax liabilities for the calendar year. Further,
the Partners shall cause the Partnership to make additional distributions to
the Partners to the extent they, in their discretion, determine that the
Partnership shall have excess cash flow which is not necessary for current
and reasonably foreseeable future capital expenditures, lease obligations,
operating expenses and working capital.
7.2 Distributions to be Pro Rata. All distributions to
the Partners shall be made in proportion to the Partners' Percentage
Interests at the time of distribution.
7.3 Tax Distribution Amount. For purposes of this Agreement,
the "Tax Distribution Amount" for any calendar year shall be an amount
equal to fifty percent (50%) of the aggregate taxable income taxed to
the Partners for federal income tax purposes for such calendar year; provided,
however, that if the maximum marginal federal individual income tax rate,
including any surtax, shall increase beyond the rate applicable during
1993, or if at any time after 1993 the maximum marginal federal corporate
income tax rate shall exceed the maximum marginal federal income tax
rate (including any surtax), then an equitable adjustment to the Tax
Distribution Amount shall be made.
VIII REPRESENTATIONS AND WARRANTIES.
8.1 Representations and Warranties of Emerson Radio Corp.
Emerson Radio Corp. hereby represents and warrants to the other Partner
as follows:
8.1-1 It has been duly organized and is validly existing
and in good standing under the laws of the State of New Jersey and has
the requisite power and authority to carry on its business.
8.1-2 Subject to the approval of the United States
Bankruptcy Court, it has the full right, power and authority to execute
and deliver this Agreement and to perform each of its obligations hereunder
and no consent from any third party is required for its execution, delivery
and performance hereof.
8.1-3 Subject to the appropriate Bankruptcy Court
order, the consummation of the transactions contemplated hereby will not
violate, conflict with or result in a breach of any terms of any instrument
or other agreement to which it is a party, nor to the best of its knowledge,
will it conflict with any applicable law, regulation, ordinance or order.
8.1-4 Subject to the approval of the United States
Bankruptcy Court, it has duly executed and delivered this Agreement and
that all actions necessary to make this Agreement its valid and binding
obligation have been taken and this Agreement is not subject to any
restriction which prohibits or would be violated by the execution and
delivery hereof or consummation of the transactions contemplated hereby.
8.1-5 It has reviewed the terms of and understands
that the Partnership will be executing, delivering and performing pursuant
to the terms of the Sales Agreement.
8.2 Representations and Warranties of Hopper. Hopper hereby
represents and warrants to the other Partner as follows:
8.2-1 It has been duly organized and is validly existing
and in good standing under the laws of the State of Florida and has the
requisite power and authority to carry on its business.
8.2-2 It has the full right, power and authority to
execute and deliver this Agreement and to perform each of its obligations
hereunder and no consent of any third party is required for its
execution, delivery and performance hereof.
8.2-3 The consummation of the transactions contemplated
hereby will not violate, conflict with or result in a breach of any terms
of any instrument or other agreement to which it is a party, nor to the
best of its knowledge, will it conflict with any applicable law, regulation,
ordinance or order.
8.2-4 It has duly executed and delivered this Agreement
and all actions necessary to make this Agreement its valid and binding
obligation have been taken and this Agreement is not subject to any
restriction which prohibits or would be violated by the execution and
delivery hereof or consummation of the transactions contemplated hereby.
8.2-5 It has reviewed the terms of and understands that
the Partnership will be executing, delivering and performing pursuant to
the terms of the Sales Agreement.
IX. MANAGEMENT OF PARTNERSHIP; RIGHTS, POWERS AND DUTIES OF THE
GENERAL MANAGER.
9.1 General Manager.
Barry Smith of Hopper shall be General Manager of the
Partnership ("General Manager") and shall have operational control of the
day-to-day business of the Partnership and all transactions in the ordinary
course of business, including but not limited to all matters pertaining
to (i) the production, purchase, marketing and sale of the Partnership's
Merchandise and New Products (ii) the retention and termination of
employees of the Partnership; and (iii) all of the Partnership's
administrative matters. Not- withstanding the above, the General Manager
shall only operate the day-to-day business of the Partnership in accordance
with operating budgets and forecasts as approved in advance by the
Partners. If Barry Smith resigns as the General Manager, ceases to be a
principal of Hopper, becomes insolvent or bankrupt, the Partners shall
designate a new General Manager.
9.2 Specific Powers. In furtherance of the foregoing, the
General Manager shall have all powers which are necessary to carry out
the duties as specifically defined in section 9.1 herein.
9.3 Liability of The General Manager. The General Manager
shall not be liable to the Partnership or to any Partner for (i) the
performance of, or the omission to perform, any act if in good faith the
General Manager determined that such conduct was in the best interest of
the Partnership, in accordance with his duties as defined in section 9.1
and such conduct did not constitute fraud or reckless or intentional
misconduct, (ii) the termination of the Partnership and this Agreement
pursuant to the terms hereof, and (iii) the performance of, or the
omission to perform, any act in good faith reliance on advice of legal
counsel, accountants or other professional consultants to the Partnership
9.4 Indemnification of The General Manager. The Partnership,
its receiver or its trustee shall indemnify, defend and hold the General
Manager and his permitted successors and assigns harmless from and
against any expense, loss, damage or liability incurred or connected with,
or any claim, suit, demand, loss, judgment, liability, cost or expense
(including reasonable attorneys' fees) arising from or connected with the
Partnership or any act or omission of the General Manager (including claims,
suits or demands by another Partner), and amounts paid in settlement of any
of the foregoing, provided that the same were not the result of fraud or
reckless or intentional misconduct on the part of the General Manager. The
Partners, in their discretion, may advance to the General Manager the costs
of defending any claim, suit or action against the General Manager connected
with the Partnership or any act or omission by the General Manager if the
General Manager undertakes to repay the advanced funds, with interest, if
the General Manager is not entitled to indemnification under this Section
9.4.
X. TRANSFER OF INTERESTS IN PARTNERSHIP.
10.1 Restrictions on Transfers. Except as otherwise permitted
by this Agreement, no Partner shall Transfer all or any portion of its
interest in the Partnership.
10.2 Permitted Transfers. A Partner shall only be permitted
to Transfer all or any portion of its interest in the Partnership
("Partnership Interest") to a wholly owned subsidiary, or a wholly owned
subsidiary of a wholly owned subsidiary, of the transferring Partner.
10.3 Conditions Precedent To Transfer. Notwithstanding any
provision of Section 10.2, no Transfer shall be permitted, except in the
case of a Transfer occurring involuntarily by operation of law, unless
the transferor and transferee shall execute and deliver to the Partnership
such opinions of counsel and documents and instruments of conveyance as may
be necessary or appropriate in the opinion of counsel to the Partnership to
effect such Transfer and to confirm the agreement of the transferee to
be bound by the provisions of this Agreement (including this Article).
10.4 Effect of Disposition. Following any disposition of a
Partner's entire Partnership Interest, the Partner shall have no further
rights as a Partner in the Partnership (including any rights as a
General Manager).
10.5 Transferee's Capital Account. In any interest in the
Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred interest.
XI. COVENANT AGAINST COMPETITION. Emerson hereby expressly
acknowledges and agrees that, for a period of one (1) year following
termination of this Agreement as provided herein, it will not directly
or indirectly through its employees, agents or representatives, sell
remanufactured products to or contact Hopper's existing customers as of
the effective date of this Agreement, to the extent Hopper substantiates
such customers were existing Hopper customers at such time and identifies
such customers to Emerson in writing at time of termination, unless Emerson
obtains Hopper's prior written consent. It is Hopper's option whether
it will so identify customers at time of termination.
XII. DISSOLUTION AND TERMINATION.
12.1 Events Causing Dissolution. The Partnership shall be
dissolved and its affairs wound up upon the first to occur of the following:
12.1-1 a determination by the Partners to dissolve the
Partnership;
12.1-2 the occurrence of the dissolution, insolvency,
bankruptcy, death or incompetency of a Partner if such event leaves only
one other Partner remaining as a Partner;
12.1-3 the entry of a judgment of dissolution by a
court of competent jurisdiction;
12.1-4 if either Partner provides six (6) months'
written notice to the other Partner that it wishes to dissolve the
Partnership.
12.2 Liquidation.
12.2-1 Upon a dissolution of the Partnership requiring
the winding-up of its affairs, the General Manager (which term for
purposes of this Article XII shall mean a Person appointed by the Partners
if the General Manager at time of dissolution cannot or will not then serve)
shall wind up its affairs. The assets of the Partnership shall be sold
within a reasonable period of time to the extent necessary to pay or
provide for the payment of all debts and liabilities of the Partnership,
and may be sold to the extent deemed practicable and prudent by the Partners.
12.2-2 The net assets of the Partnership remaining after
satisfaction of all such debts and liabilities and the creation of any
reserves under Subsection 12.2-4, shall be distributed to the Partners
in accordance with their positive Capital Account balances as of the date
of such distribution, after giving effect to all contributions, distributions
and allocations for all periods, including the period during which such
liquidation occurs. Any property distributed in kind in the liquidation
shall be valued at fair market value.
12.2-3 Distributions to Partners pursuant to this
Article XII shall be made by the end of the taxable year of the liquidation,
or, if later, within ninety (90) days after the date of such liquidation
in accordance with Regulation Section 1.704-1(b)(2)(ii)(g).
12.2-4 The Partners shall withhold from distribution
under this Section 12.2 such reserves which are required by applicable law
and such other reserves for subsequent computation adjustments and for
contingencies, including contingent liabilities relating to pending or
anticipated litigation or to Internal Revenue Service examinations. Any
amount held as a reserve shall reduce the amount payable under this
Section 12.2 and shall be held in a segregated interest-bearing account. The
unused portion of any reserve shall be distributed with interest thereon
pursuant to this Section 12.2 after the Partners shall have determined that
the need therefore shall have ceased.
12.3 Partner's Deficit Capital Account. If the Partnership is
"liquidated" within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g),
distributions shall be made only to Partners with positive Capital Accounts
in compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(2). If any
Partner's Capital Account shall have a deficit balance after giving effect
to all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs, that Partner shall
contribute to the capital of the Partnership the amount necessary to restore
such deficit balance to zero, in compliance with Regulation Section
1.704-1(b)(2)(ii)(b)(3), and if the Partnership is dissolving and being
wound up pursuant to this Article XII the amount so contributed shall be
treated as proceeds from the liquidation of Partnership assets for purposes
of, and shall be distributed pursuant to, this Article XII.
XIII. BOOKS AND REPORTS.
13.1 Maintenance of Records. The Partners shall appoint a
third party accountant ("accountant") to maintain true and correct books
and records of the Partnership in accordance with GAAP. Such books and
reports shall be maintained at the accountant's offices or at such other
location as agreed to by the Partners. Each Partner, and any duly
authorized employee, agent or representative thereof, shall have the right
to inspect, copy and make extracts or compilations from or, at such
Partner's request, have the accountant send to such Partner copies of such
books and reports.
13.2 Reports to Partners. As soon as practicable after the
end of each Fiscal Year, the accountant (i) shall cause to be prepared and
sent to each Partner a balance sheet and a statement of income of the
Partnership which shall be audited by a certified public accountant, and
(ii) shall cause to be prepared and sent to each Partner a report setting
forth in sufficient detail all such information and data with respect to
the Partnership for such fiscal Year as shall enable such Partner to
prepare its Federal, state and local income tax returns in accordance with
the laws, rules and regulations then prevailing. The accountant shall also
cause to be prepared and filed all Federal, state and local tax returns
required of the Partnership. All balance sheets, statements, reports and
tax returns required pursuant to this Section 13.2 shall be prepared at the
expense of the Partnership.
XIV. PARTNERSHIP EXPENSES. The Partners agree that the Partnership
shall pay the reasonable costs and expenses of the Partners incurred
directly in connection with the business of the Partnership, provided such
costs and expenses are approved in advance by the Partners.
XV. AMENDMENT OF PARTNERSHIP AGREEMENT. This Agreement may be
amended only by the written agreement of the Partners.
XVI. NOTICES. All notices, consents, waivers, requests or other
instruments or communications given pursuant to this Agreement shall be in
writing, signed by the party giving the same, and shall be delivered by
hand or sent by registered or certified United States mail, return receipt
requested, postage prepaid, or by a recognized overnight delivery service,
addressed, in the case of the Partnership, to the Partnership at its
principal place of business, with a copy to each Partner, at the address
set forth in the Partnership's books and records. Any Partner may, by
notice to the Partnership and each other Partner given in the manner
specified in this Article, specify any other address for the receipt of
such notices, instruments or other communications. Any notice, instrument
or other communication shall be deemed properly given when personally
delivered, on the fifth day after being so mailed by certified or
registered mail, or on the next business day after being so sent by
overnight delivery service.
XVII. (OMITTED)
XVIII. MISCELLANEOUS.
18.1 Interpretations.
18.1-1 Article, Section and Subsection headings are not
to be considered part of this Agreement, are included solely for convenience
and are not intended to be full or accurate descriptions of the contents
thereof.
18.1-2 The use of the terms ""herein", hereunder",
"hereof" and like terms shall be deemed to refer to this entire Agreement
and not merely to the particular provision in which the term is contained,
unless the context clearly indicates otherwise.
18.1-3 The use of the word "including" or a like term
shall be construed to mean "including but not limited to".
18.1-4 Exhibits and schedules to this Agreement are an
integral part of this Agreement.
18-1-5 Words importing a particular gender shall include
every other gender and words importing the singular shall include the
plural and visa-versa, unless the context clearly indicates otherwise.
18.1-6 Any reference to a provision of the Code or
Regulations shall be construed to be a reference to any successor provision
thereof.
18-1-7 This Agreement is the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
written or oral agreements relating to such subject matter. Any matter
concerning the Partnership or Partnership business which is not
specifically set forth herein must be unanimously approved in writing by
the Partners.
18.2 Severability. If any provision of this Agreement shall
be determined by any court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby, and each provision hereof shall be valid and shall be
enforced to the fullest extent permitted by law.
18.3 Counterparts. This Agreement may be executed in several
counterparts, and as so executed shall constitute one agreement, binding on
all of the parties hereto, notwithstanding that all the parties are not
signatory to the original or to the same counterpart.
18.4 Benefits and Obligations. The covenants and agreements
herein contained shall inure to the benefit of, and be binding upon, the
parties hereto and their respective heirs, administrators, legal
representatives, successors and assigns. No provision of this Agreement
shall inure to the benefit of, or be enforceable by, any creditors,
contractors or other third parties.
18.5 Applicable Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware.
18.6 Consent to Jurisdiction; Service of Process. Each
Partner, wherever resident or doing business, (i) hereby consents to the
venue and jurisdiction of, and hereby waives any defense based upon the
lack of jurisdiction or venue of, any Delaware court or the United States
District Court for the District of Delaware in connection with any suit
to enforce the rights of the parties hereunder or any right or action
related to this Agreement, and (ii) hereby agrees that process may be
served in any such action in any manner provided by the laws of the United
States District Court for the District of Delaware or the State of Delaware
for service of process or by mailing a copy of such process by certified
mail, return receipt requested.
18.7 Waiver of Partition. Except as specifically set forth
herein, each Partner irrevocably waivers any right that it may have to
maintain any action for partition with respect to the property of the
Partnership or to compel any sale or appraisal of Partnership assets.
18.8 Assumed Name and Amendments. The Partnership shall file
a certificate of assumed name of the Partnership in accordance with Title
56 of the New Jersey statutes, as amended from time to time, or any similar
provision of any other jurisdiction in which the Partnership does business,
and amend the same to the extent required by applicable law.
18.9 Nonsolicitation. The Partners agree not solicit each
others employees.
18.10 Non-Disclosure. The Partners hereby expressly acknowledge
and agree that (unless required by applicable law or court order and except
for disclosure to attorneys and accountants), without the prior consent of
each Partner, they may not disclose to any person or entity (i) that the
Partnership or this Agreement exists, (ii) any of the terms of the
Partnership or this Agreement, or (iii) any non-public information
regarding the Partnership or the operation of its business. In addition
to and not in limitation of the foregoing, no Partner (including its
Affiliates, employees and agents) may make any public statement or
other disclosure regarding the Partnership or its affairs without the prior
consent of each Partner.
18.11 No Third Party Beneficiaries. This Agreement and the
rights, representations and obligations hereunder do not and shall not
confer any rights to any third parties including, but not limited to, banks
and any other financial lenders of the Partnership or either Partner, and
no third parties shall have any rights under this Agreement.
18.12 Emergence from Bankruptcy The Partners hereby expressly
acknowledge and agree that the effectiveness of this Agreement, and the
rights and obligations hereunder, are conditioned upon 1) the emergence of
Emerson from the bankruptcy action presently filed in the U.S.
Bankruptcy Court of the District of New Jersey ("Bankruptcy"); and, 2) the
emergence from Bankruptcy is due to the funding of the confirmed Plan of
Reorganization by Fidenas Investment Limited or an affiliate thereof.
18.13 Attorneys Fees and Costs. It is agreed and acknowledged
by the Partners that, in any suit by either Partner to enforce the rights
under this Agreement, the prevailing Partner shall be entitled to receive
from the other Partner the reasonable attorneys fees and costs incurred
from such suit.
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement as a Partner as of the day first set forth above.
HOPPER RADIO OF FLORIDA, INC. EMERSON RADIO CORP.
By: /s/Barry Smith By:/s/ Eugene I. Davis
______________________ _______________________________
Barry Smith, President Eugene I. Davis, Executive
Vice President
EXHIBIT A - DEFINITIONS
For purposes of this Agreement, the following terms shall have
the following meanings:
A.1 "Accounting Period" means the following fiscal periods:
the initial Accounting Period shall commence on the first day of the term
of the Partnership. Each subsequent Accounting Period shall commence
immediately after the close of the next preceding Accounting Period.
Each Accounting Period shall close at the close of business on the first to
occur of (i) the last day of a Fiscal Year of the Partnership, (ii) the
acceptance of a Capital Contribution from a new or existing Partner,
other than a Capital Contribution which is pro rata among all existing
Partners, (iii) the effective date of any withdrawal of a Partner, or
(iv) the date of the Partnership's liquidation.
A.2 "Affiliate" means with respect to any person or
entity, a person or entity which directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control
with, such person or entity.
A.3 "Agreement" means this Partnership Agreement, as amended
and in effect from time to time.
A.4 "Capital Account" means, with respect to any Partner,
the amount of such Partner's Capital Contributions, increased or decreased
as provided in this Agreement.
A.5 "Capital Contribution" means, with respect to any
Partner, the amount of money and the value of any property other than
money contributed to the Partnership by the Partner.
A.6 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
A.7 "Fiscal Year" means the calendar year; but, upon
commencement of the Partnership, "Fiscal Year" means the period from the
first day of the term of the Partnership to the next following December
31, and upon dissolution of the Partnership it shall mean the period from
the end of the last preceding Fiscal Year to the date of such dissolution.
A.8 "General Manager" means the person designated as the
General Manager pursuant to Section 9.1.
A.9 "Partner" means Emerson Radio Corp. and Hopper Radio
of Florida, Inc. and any Person subsequently admitted as a Partner of the
Partnership pursuant to the terms of this Agreement.
A.10 "Partners" means Emerson Radio Corp. and Hopper Radio
of Florida, Inc. collectively.
A.11 "Partnership" means the general Partnership subject to
this Agreement.
A.12 "Percentage Interest" means, with respect to any
Partner for any Accounting Period, the percentage obtained by dividing the
balance in such Partner's Capital Account at the beginning of the Accounting
Period by the aggregate balances in the Capital Accounts of all Partners at
such time, as adjusted, if at all, in accordance with the provisions of
Article V.
A.13 "Person" means an individual, a corporation, an
association, a Partnership, a joint venture, an estate, a trust, or any
other legal entity.
A.14 "Profits and Losses shall have the meaning set forth
in Article VI of this Agreement.
A.15 "Regulations" means the Income Tax Regulations
promulgated under the Code, as such Regulations may be amended from time
to time.
A.16 "Territory" shall mean the territories as defined in
Section III.
A.17 "Transfer" shall mean, as a noun, any voluntary or
involuntary transfer, sale, pledge, hypothecation, gift, or other
disposition and, as a verb, voluntarily or involuntarily to transfer,
sell, pledge, hypothecate, give or otherwise dispose of.
SALES AGREEMENT
This Agreement, effective as of April 1, 1994 is between Emerson
Radio Corp. ("Seller or the "Company"), a New Jersey corporation, having
its principal place of business at 9 Entin Road, Parsippany, New Jersey,
07054 and E & H Partners ("Partnership"), a Delaware Partnership, with
executive offices at 7145 West 20th Avenue, Hialeah, Florida 33014.
WHEREAS:
A. The Seller directly and through affiliates distributes a
variety of consumer electronics and microwave products under the Emerson
brand name primarily in the United States of America, Mexico and Canada,
but also, throughout the world;
B. From time-to-time certain of such products are returned by
Seller's customers in the United States to the Seller, some of which are
reported to exhibit electronic, mechanical and/or cosmetic imperfections.
Such products may be inspected and refurbished by or for the benefit of
Seller and may be resold as refurbished or "AS IS"; and
C. The Partnership desires to purchase from Seller products
available for re-sale "AS-IS", refurbish such products for resale and
resell such products and represents it has the capability, capacity,
personnel and experience to refurbish and resell such products.
NOW THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration,
the Seller and Partnership hereby mutually agree as follows:
1. TERM
The terms set forth herein shall be effective commencing April 1,
1994 and continue through December 31, 1996 subject to earlier
termination as set forth herein or renegotiation by the parties.
2. PURCHASE AND EXCLUSIVE SALE REQUIREMENTS
Partnership agrees to purchase from Seller and Seller agrees to
sell exclusively to Partnership all consumer electronics and microwave
products returned by Seller's customers in the United States to Seller.
Such products shall be referred to hereinafter as the "Merchandise".
3. NOTICE OF AVAILABILITY
A. At least once a month, unless more frequently requested by
the Partnership not to exceed four (4) times a month, Seller shall deliver
to Partnership a schedule of the quantities of Merchandise to be sold to
Partnership hereunder ("Notice of Availability"). After receipt of the
Notice of Availability, Partnership shall take delivery of the Merchandise
listed in the Notice of Availability within a reasonable amount of time
not to exceed fifteen (15) business days of the Notice of Availability. A
Notice of Availability may be given as frequently as determined by
Seller in its own discretion.
B. Partnership represents that it is aware that Seller is
planning to enter into arrangements to sell consumer electronics products
in geographic regions and countries where Seller does not presently
distribute such products. The Partnership will not directly compete with
Seller in Seller's distribution channels on any current line models.
Notwithstanding the above, the Partnership may market the refurbished
Merchandise in all areas of the U.S.
4. PRICING
The price of the Merchandise to Partnership is set forth in the
presently effective price list ("Price List"), a copy of which is annexed
as Exhibit A. The Price List shall be subject to such increases or
decreases, as may be mutually agreed to by the parties, considering current
factory prices adjusted to percentage discounts against newest landed price
for similar or like models or market situation warrants adjustment. Seller
and Partnership agree to establish a price structure for discontinued non-
current Merchandise not reflected on Exhibit A.
5. PAYMENT
Due Date and Credit
Hopper Radio of Florida, Inc. shall arrange a credit facility for
payment by the Partnership to Emerson on terms to be agreed to by the
Partnership and Emerson.
6. AVAILABILITY AND DELIVERY
All of Partnership's purchases of Merchandise from Seller will be
sold and delivered F.O.B. Seller's facilities or such facilities designated
by Seller (the "Facilities"). Irrespective of any other provision hereof,
Partnership shall bear all risk of loss or damage to the Merchandise upon
Seller's delivery of the Merchandise to Partnership's agent at the
Facilities. All shipping, packing, warehousing, insurance, demurrage,
freight and other costs shall be borne by the Partnership. The Partnership
shall select a method of conveyance conforming to the standard commercial
practices of the Partnership.
7. SECURITY INTEREST
Partnership hereby grants to Seller a security interest in unpaid
Merchandise, and parts and accessories for same ("Collateral"), to secure
all liabilities (including renewals, extensions and substitutions of same)
of the Partnership to the Seller arising out of or relating to the purchase
by Partnership of the Merchandise. The failure of Partnership to pay the
purchase price of any Merchandise when due shall give the Seller the
right, without liability, to repossess the Collateral with or without
notice or demand and to avail itself of any legal or equitable remedy,
with or without terminating this Agreement. Seller shall have all the
rights of a secured party. Partnership agrees to execute and deliver a
Security Agreement and related Financing Statement (UCC-1) consistent with
the terms of this Agreement and take any and all other action as may be
required in order to assist Seller in perfecting the security interest in the
Collateral including execution and delivery of reasonably requested
documentation.
8. INSPECTION, REPAIR AND REFURBISHING
Upon receipt of the Merchandise, Partnership shall inspect each such
Merchandise and, if feasible in Partnership's sole discretion, repair and
refurbish same in accordance with applicable industry standards and
applicable law for resale as refurbished product. Packaging by Partnership
of the inspected and, if applicable, refurbished Merchandise shall plainly
indicate that the Merchandise has either been refurbished or is to be
resold "AS IS". Partnership agrees to employ sufficient and properly
trained personnel and maintain all necessary facilities, tools, equipment,
quality control and repair manuals and procedures necessary for the proper
performance of the inspection and refurbishing services to be provided by
Partnership. Upon reasonable notice, Partnership shall allow Seller to
inspect its refurbishing facilities. Partnership shall maintain and make
available to Seller such records, reports, samples and test results as
shall be agreed upon by the parties hereto.
9. PARTS AND ACCESSORIES
Seller agrees to sell and source for Partnership, and Partnership
agrees to buy from Seller, parts and accessories for the Merchandise upon
terms to be agreed upon by the parties unless the Partnership can obtain
equivalent or better parts and accessories from third parties at more
favorable prices and terms. Partnership agrees that no parts or accessory
orders placed by or at the request of Partnership may be cancelled.
10. TERRITORY
Partnership shall have the exclusive right to resell the Merchandise
refurbished by the Partnership worldwide in all countries where Seller has
trademark rights to the Emerson brand name and trademark ("Territory).
Partnership agrees to and shall not resell the Merchandise in any place
outside the Territory.
11. DUTY DRAWBACKS
At Seller's cost and expense, Partnership shall cooperate with and
take all actions reasonably necessary to afford Seller the benefit of and
assist Seller in securing any applicable duty drawbacks or refunds to which
it may be entitled from any governmental entity as a result of the sale of
the Merchandise to Partnership.
12. TAXES/DUTIES
Partnership will be responsible for and shall pay all applicable
duties, taxes, fees or additional charges (including any interest and
penalties thereon), if any, imposed by taxing authorities by direct reason
of the sale and delivery of the Merchandise. These duties, taxes, fees or
additional charges shall not include any taxes assessed on Seller's income.
In the event Partnership is purchasing for resale, a duly executed resale
certificate shall be delivered to Seller prior to delivery of Merchandise
by Seller, or Partnership shall pay to Seller all applicable sales, excise
or other applicable taxes which would have otherwise not been required to
be collected by Seller.
13. PARTNERSHIP'S AUTHORITY
Partnership hereby represents and warrants to Seller that:
(a) Partnership is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization.
(b) Partnership has the full power and authority to execute
and deliver this Agreement and to perform all of its obligations
hereunder.
(c) The execution and delivery of this Agreement has been duly
authorized by all necessary action of Partnership and constitutes the
valid and legally binding obligation of Partnership enforceable
against Partnership in accordance with its terms.
14. SELLER'S AUTHORITY
Seller hereby represents and warrants to Partnership that:
(a) Seller is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation.
(b) Subject to Bankruptcy Court approval, Seller has the full
power and authority to execute and deliver this Agreement and to
perform all of its obligations hereunder.
(c) The execution and delivery of this Agreement has been duly
authorized by all necessary corporate action of Seller and, subject
to Bankruptcy Court approval, constitutes the valid and legally
binding obligation of Seller enforceable against Seller in accordance
with its terms.
15. FORCE MAJEURE
A. Neither party will have any liability to the other by
reason of any failure or delay in performance of any provision of this
Agreement, except for payment obligations, if and to the extent that such
failure or delay is due to any occurrence (other than financial) beyond the
reasonable control of the party failing or delaying to perform. "Beyond
reasonable control" includes, but is not limited to, (i) acts of God, (ii)
labor disputes, (iii) civil disturbances, (iv) fires, (v) floods,
(vi) explosions, (vii) riots, war, rebellion or sabotage, (viii)
transportation failure or delays or (ix) rules, regulations, orders, or
directives of any governmental body (including any agency or subdivision
thereof), provided that with respect to (ix), the party seeking relief has
completed and made all requisite applications and paid all requisite fees,
permits, imposts and taxes in a timely fashion.
B. A party seeking relief shall, as soon as practicable
after the impediment and its effects on its ability to perform become
known, give written notice to the other party. Written notice shall also
be given when the impediment ceases. Grounds of relief under this Section
relieves the failing party from damages and/or penalties, but not from the
duty to pay interest at the Prime Rate plus three percent (3%) per annum on
monies due and owing to the other party.
16. TERMINATION
A. If either party defaults on any material obligation required of
it or breaches any material term or provision of this Agreement, then the
other party may terminate this Agreement upon thirty (30) days prior
written notice unless such default is cured within said thirty (30) day
period.
B. This Agreement shall terminate by its own force without notice
from Seller in the event that (i) Partnership shall be dissolved or shall
lose its authorization to do business by forfeiture or otherwise, or shall
be adjudicated a bankrupt or insolvent, (ii) a trustee, liquidator or
receiver shall be appointed for the Partnership or a material or
substantial portion of its assets, subsidiaries or property, or any
substantial parts thereof, (iii) any court or governmental agency shall
have taken jurisdiction of the business or property of the Partnership or
any substantial part thereof or (iv) any proceedings for the reorganization,
dissolution, liquidation or winding up of the Partnership shall have been
commenced by a third party, and any such event described in (i) through
(iv) above has not been cured, dismissed or reversed within thirty (30)
days from the date of occurrence.
C. This Agreement shall terminate immediately by its own force,
without notice from Seller in the event that (i) Partnership makes an
assignment for the benefit of creditors, or a public admission of
insolvency, (ii) Partnership shall file a voluntary petition in
bankruptcy under any bankruptcy or insolvency law or any law providing
for Partnership's reorganization, dissolution, liquidation or winding up,
(iii) Partnership shall consent to the appointment of a receiver or trustee
of itself or of its property or any substantial part thereof or (v) the
Partnership is dissolved.
D. In the event that the (i) Partnership has rendered or renders
an incorrect, material representation in connection with the rights granted
Partnership hereunder, (ii) Partnership commits intentional or negligent
damage to Seller's business, reputation, client base, distribution
channels or assets or the value of any of Seller's tradenames, trademarks,
service marks, symbols, signs, good will or other distinctive marks (iii)
Partnership fails to timely pay for the Merchandise (iv) Partnership
registers or attempts to register in its own name, or the name of any
affiliate, any trademark owned by the Seller or similar to a trademark
owned by the Seller, (v) Partnership fails to timely purchase or accept
delivery of all Merchandise required hereunder, (vi) Partnership
breaches any of the representations and warranties set forth in Section 18
then, in addition to the rights granted, or available under law or in equity,
Seller may, by written notice to Partnership, require such breach or event
to be remedied and if such breach or event is not remedied within thirty (30)
days after such notice, Seller shall have the right to terminate this
Agreement and all of Seller's obligations hereunder forthwith by a further
notice in writing, such termination to be effective upon receipt of such
notice.
17. SELLER'S DISCLAIMER OF WARRANTIES
SELLER SELLS THE MERCHANDISE AND ANY PARTS AND ACCESSORIES TO
PARTNERSHIP, WITHOUT WARRANTY OF SELLER, ON AN "AS IS" BASIS ANY AND ALL
WARRANTIES EITHER EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO, THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
HEREBY EXCLUDED. SELLER SHALL NOT BE LIABLE TO PARTNERSHIP FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE OR
KIND WHATSOEVER, OR FOR LOST PROFITS. PARTNERSHIP SHALL UNDER NO
CIRCUMSTANCE HAVE THE RIGHT TO RETURN THE MERCHANDISE TO SELLER, EXCEPT AS
SPECIFICALLY AGREED TO IN WRITING BETWEEN THE PARTIES.
HOWEVER, THIS DISCLAIMER OF WARRANTY SHALL NOT APPLY IF MERCHANDISE,
UNALTERED BY THE PARTNERSHIP IN ANY WAY, AT ANY TIME IS HELD BY ANY
GOVERNMENTAL AGENCY OR COURT JUDGMENT, ORDER OR RULING TO BE UNSAFE.
18. PARTNERSHIP'S REPRESENTATIONS, WARRANTIES AND OBLIGATIONS
Partnership represents that:
A. Partnership possesses all necessary registrations, licenses
and permits to engage in the activities contemplated by this Agreement and
Partnership and the Affiliates shall comply with all local laws, rules,
ordinances and regulations applicable wherever the Merchandise is sold
or resold relating to the activities to be performed hereunder, including,
but not limited to, the importation, distribution, sale, servicing and
marketing of the Merchandise.
B. The Partners of the Partnership are experienced in and
regularly deal with like merchandise and parts, are otherwise capable of
evaluating and dealing with the same and accepts the Merchandise and
parts and accessories without any warranty of Seller. Partnership shall
conspicuously mark the Merchandise and all packaging and documentation
for same to indicate that such Merchandise has been refurbished or is
available for re-sale only on an "AS IS" basis.
C. Partnership shall employ sufficient and properly trained
personnel and maintain all necessary facilities, tools, equipment, quality
control and procedures necessary for the proper performance of the
obligations arising under the terms of this Agreement.
D. Partnership and the Affiliates shall comply with any and all
applicable national, federal, state or local statutes, codes, rules,
regulations and laws, and all rules and regulations promulgated thereunder
or otherwise relating to the packaging, marking, advertisement and/or
identification of the Merchandise.
E. Partnership shall ensure that all Merchandise that is sold is
merchantable, commercially saleable and safe for use in the normal course.
Partnership shall ensure that all advertising for the resale of the
Merchandise clearly indicates that the Merchandise has been refurbished or
is available on an "AS IS" basis.
F. Partnership shall obtain all necessary listings, approvals
and ratings for the Merchandise where such approvals or ratings are required
by law or governmental regulations or customary industry practice wherever
the Merchandise is sold or resold only if the Partnership alters the
Merchandise. If the Partnership does not alter the Merchandise, the Seller
is responsible to obtain all necessary listings, approvals and ratings.
G. Partnership shall ensure that Merchandise sold to Partnership's
customers contains only Partnership's warranty, if any, and that the
Merchandise sold to Partnership's customers does not state or imply that
any warranty is granted which may create or infer liability on Seller.
H. Upon reasonable notice, the Partnership shall allow the Seller
the right to inspect the Partnership's Merchandise held for resale and
its facilities.
I. Partnership shall furnish to Seller satisfactory evidence of
Partnership's financial ability to perform the terms of this Agreement.
J. Seller will have the right, at any time during the term of
this Agreement, but at reasonable intervals, to receive from Partnership, at
Seller's prior written request, representative Merchandise currently
being sold, to assure that they conform to the terms of this Agreement.
K. Partnership shall be fully responsible, including all costs
therefore, for after-sales support for Merchandise. In the event that
Partnership for any reason fails to fulfill its warranty obligation,
Seller may, with reasonable notice and an opportunity to cure, assume such
obligation on its behalf, in which event Partnership shall reimburse
Seller for the reasonable and necessary costs of providing such service.
19. INDEMNIFICATION
The Partnership agrees to indemnify and hold harmless the Seller,
its subsidiaries, directors, officers and employees from and against any and
all claims, demands, judgments, loss, liability, damages, costs and
expenses of every nature and kind occurring anywhere in the world, including,
but not limited to, counsel fees and legal expenses arising from or
related to any action or omission of the Partnership, its Affiliates,
its agents, servants and employees, in connection with the Partnership's
operations or actions or obligations arising under this Agreement, or the
resale of the Merchandise, including but not limited to the Partnership's
failure to comply with the representations, warranties and obligations set
forth herein unless the claims arise solely from manufacturers defect.
20. PRODUCT RECALL
A. When Partnership has reason to believe that there is
reliable information which reasonably supports the conclusion that a
determined or undetermined number of items of Merchandise shipped by
Partnership to Partnership's customers fail to meet any law or government
regulation or standard, or contain defects or hazards which could cause
death or serious bodily injury to any person, or property damage
("defects"), Partnership shall do whatever is requested by applicable
governmental authorities and good business practice to safeguard the public
and users of the Merchandise, including but not limited to locating,
identifying and notifying customers and recalling such Merchandise.
Upon recalling such Merchandise, if the Partnership through altering,
remanufacturing, or selling, caused such defects, Partnership shall at
its sole option repair or replace such Merchandise or otherwise discharge
any obligations assessable upon a manufacturer or reseller of hazardous
products under applicable law or government regulation or standard. Any
costs incurred by Partnership in connection with complying with the
requirements of this paragraph shall be borne by Partnership.
B. If the Seller is subject to a product recall due to any defects
or hazards of Merchandise, as a result of refurbishing or alteration by
Partnership, shipped by Partnership to Partnership's customers, the
Partnership agrees to promptly repair or replace such Merchandise or
otherwise discharge promptly any obligations assessable upon the Seller.
If any such product recall is as a result of the Actions performed by
Partnership or if, Seller is subject to a product recall due to the failure
of the Merchandise to meet any law or government regulation, Partnership
agrees to bear all related costs and to indemnify the Seller for all costs
and expenses, including attorney's fees, arising from such product recall
borne by Seller, and to bear the cost of a reasonable advertising campaign
to repair the damage done to Seller's name and goodwill. Partnership shall
be required to take all such necessary action to assist Seller in complying
with this provision.
C. However, notwithstanding the above, if the defects are not caused
by the Partnership's refurbishing, altering or selling of the Merchandise,
all costs for recalling, repairing or replacing the Merchandise shall be
borne by Seller.
21. STATUS OF THE PARTIES
The relationship between the Seller and the Partnership created by
this Agreement shall be one of an independent contractor and neither is to
be deemed an agent or employee of the other for any purpose. Neither the
Seller nor the Partnership has the authority to bind the other to any third
person or otherwise unless expressly agreed to in writing by both parties.
This Agreement does not constitute a contract of employment, franchise,
partnership, agency or joint venture with respect to the Partnership or
employees of the Partnership. In no event shall the Partnership or its
employees, directly or indirectly, represent that they are employees or
agents of the Seller.
22. INSURANCE
The Partnership shall purchase and maintain insurance satisfactory to
the Seller of the kinds and in the amounts as agreed to by the parties or
in amounts required by law, whichever is greater, and furnish the Seller
with certificates of insurance (naming Seller as beneficiary) as evidence
thereof, in the prescribed form prior to the commencement of services, and
annually thereafter not less than thirty (30) days prior to the expiration
dates of said policies. Seller shall be named on all policies of insurance
procured by Partnership covering the same or similar losses and each policy
shall require that Seller shall be provided with a least 30 days prior
written notice in the event the policy is changed or cancelled.
23. NEW PRODUCTS
Seller reserves the right to introduce new categories of products, at
any time. In the event Seller does introduce such new products, it shall
so advise Partnership of the types, prices and quantities of new products
returned to Seller by its customers ("returned, new product") available
for sale "AS IS" ("Notice of Returned New Products"). Within five (5) days
following receipt of the Notice of Returned New Products, Partnership shall
advise Seller if it is interested in purchasing such returned, new products.
If it so elects, said returned, new products will be deemed "Merchandise"
under the terms of this Agreement and the terms of this Agreement shall
apply to the sale of such returned, new product. In the event Partnership
does not so elect to purchase the returned, new products, Seller may sell
such returned, new products to other third parties without any liability
to Partnership and without waiving any of its rights hereunder.
24. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between Seller and
Partnership with respect to the purchase and sale of the Merchandise and
no representation or statement not contained herein shall be binding upon
Seller or Partnership as a warranty or otherwise unless in writing and
executed by both parties hereto. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
25. ASSIGNMENT
This Agreement may not be transferred or assigned by either party,
nor may either party delegate or subcontract any of its duties hereunder,
without the express prior written consent of the other party, in each
instance, which either party may grant or withhold in its sole discretion.
For the purposes of this Agreement, the term "assigned" shall be deemed to
include, but not be limited to all transfers of control, whether
accomplished by means of (a) a transfer of stock, voting trust, or
otherwise to any person or entity not in control immediately prior to such
transfer; or (b) corporate merger, consolidation, combination or
reorganization; or (c) other means. Notwithstanding the above, Seller
may assign this Agreement without Partnership's consent to a majority
shareholder, subsidiary or a parent or successor entity.
26. ACCEPTANCE AND GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts executed and to
be performed in Delaware, including matters of construction, validity,
performance and enforcement, but excluding the choice of law rules. The
Seller and Partnership agree to the exclusive jurisdiction of the State of
Delaware to settle any dispute arising from this Agreement.
27. SEVERABILITY AND COUNTERPARTS
If any provision of this Agreement is prohibited by or deemed
unlawful or unenforceable under any applicable law of any jurisdiction,
such decision shall not affect the validity of the remaining provisions nor
shall such decision invalidate such provision in any other jurisdiction.
This Agreement may be executed in counterparts and each such counterpart
shall for all purposes constitute one Agreement binding on the parties
hereto notwithstanding that both parties are not signatory to the same
counterpart.
28. SECTION HEADINGS
Section headings are inserted for convenience only and shall not
affect any construction or interpretation of this Agreement. All reference
herein to sections, paragraphs, clauses and other subdivision of this
Agreement and the words "herein" "hereof" "hereto" "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
section, paragraph, clause or other subdivision hereof.
29. NOTICES
Any notice or other communication which shall be given to either
party in connection with this Agreement shall be in writing (including
telex or facsimile transmission) and shall be effective when received by
such party at the office designated herein or at any other office as
notified in writing.
30. AMENDMENT; WAIVER
No provision of this Agreement may be amended, waived or otherwise
modified except by an instrument in writing signed by the parties hereto.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement below to be effective the day and year first above written.
For Seller: For Partnership:
EMERSON RADIO CORP. HOPPER RADIO OF FLORIDA, INC.
By:/s/ Eugene I. Davis /s/ Barry Smith
_______________________ ___________________________
Eugene I. Davis Barry Smith
Executive Vice President President
AGREEMENT
THIS AGREEMENT, dated as of July 1, 1994, (the "Effective Date") is
made by and between ALEX WIJNEN, having an address at 14 Independence
Court, Madison, New Jersey 07940 ("Wijnen"), and EMERSON RADIO CORP., a
Delaware corporation having an address at Nine Entin Road, Parsippany,
New Jersey 07054 (the "Company").
W I T N E S S E T H
WHEREAS, Wijnen and the Company entered into an Employment Agreement
(the "Employment Agreement") dated as of July 7, 1992; and
WHEREAS, Wijnen has performed services pursuant to the Employment
Agreement and the Company has compensated Wijnen for such services; and
WHEREAS, Wijnen and the Company desire to modify the relationship
contemplated by the Employment Agreement in accordance with the terms
hereof; and
WHEREAS, the parties hereby mutually agree that the Employment
Agreement and all obligations thereunder shall be and hereby are
terminated effective June 30, 1994, in accordance with the terms and
conditions hereof; and
WHEREAS, the parties wish to set forth the terms and conditions of
the relationship between Wijnen and the Company commencing as of July 1,
1994 (the "Effective Date") and continuing thereafter for a period of
eighteen (18) months until December 31, 1995 (the "Term"); and
WHEREAS, the parties desire to protect the Company's proprietary
and confidential business information and other lawful business interests;
NOW THEREFORE, in consideration of the mutual obligations set forth
herein, receipt of which is hereby acknowledged, the parties agree as
follows:
1. Definitions.
The following capitalized words and phrases shall have the meanings
specified when used in this Agreement, unless the context clearly indicates
otherwise:
1.1. "Agreement" means this Agreement, as it may from time to
time be amended or modified.
1.2. "Company" shall mean Emerson Radio Corp. and any of its
divisions, subsidiaries, parents, affiliates, successors-in-interests,
predecessors-in-interests, benefit plans or assigns thereof, and any
officer, director, managing agent, employee, administrator, fiduciary,
agent or other representative of any of the foregoing.
2. Termination of Employment Agreement and Agreement to Provide
Consulting Services.
2.1. The Employment Agreement and employment of Wijnen as an
officer of the Company and any other employment Wijnen has or had with the
Company shall be and hereby is terminated by mutual consent as of the close
of business on June 30, 1994 and he shall be paid his salary and receive
all benefits under the Employment Agreement up to June 30, 1994. All
duties and obligations of Wijnen under the Employment Agreement and in
respect of any such employment are ended as of June 30, 1994, and all
duties and obligations of the Company to Wijnen in respect thereof are
terminated at such time, except as otherwise provided herein.
2.2. Wijnen hereby resigns, without any further action
required, from all offices of the Company, effective at the close of
business of June 30, 1994. Wijnen also waives any claim or right to
reinstatement. The Company hereby accepts such resignation from such
offices. Subject to the provisions of Section 9.3, the Company
acknowledges that upon the execution of this Agreement by Wijnen, all of
Wijnen's affirmative obligations under the Employment Agreement will have
been performed in full.
2.3. Wijnen agrees to provide to the Company consulting
services during the Term from time to time at the direct request of the
Company's President, Chief Executive Officer, Chief Financial Officer or
General Counsel provided that the furnishing of such services does not
unduly interfere with the performance by Wijnen with any duties required of
him by his employer or by self employment.
3. Payments to Wijnen.
3.1 In consideration of whatever consulting services are
referred to in Section 2.3 and the other consideration provided herein, the
Company agrees to pay Wijnen in the ordinary course of business the
aggregate sum of Two Hundred Eighty Thousand and no/100 dollars ($280,000)
to be paid in equal bi-weekly installments for a period of twelve (12)
months commencing on the Effective Date in accordance with the Company's
present payroll practice (the "Consulting Payments"). In the event that
the Company's present payroll practice is changed, the bi-weekly
installments shall be changed to conform with such payroll policy for any
Consulting Payments remaining due during the Term.
3.2. The Company may deduct or withhold from any payment
required to be made to Wijnen hereunder an amount as may be necessary to
satisfy the Company's obligation with respect to any applicable income and
employment tax withholding under applicable federal and state laws.
4. Additional Compensation to Wijnen.
Wijnen and the Company acknowledge the validity of indebtedness
owed by Wijnen to the Company in the amount of $130,000.00 and agree that
Wijnen shall be available to provide consulting services in the manner
contemplated by Section 2.3 for the period July 1, 1995 through December
31, 1995 for and in consideration of the forgiveness of such indebtedness,
such forgiveness to be made in the ordinary course of business pro rata
over 13 bi-weekly periods, commencing July 1, 1995 and ending December 31,
1995, for so long as Wijnen provides such services. In addition to the pro
rata forgiveness of debt conditioned upon the performance by Wijnen of such
consulting services as are referred to in Section 2.3 the Company shall pay
to Wijnen the aggregate sum of $10,000 to be paid, subject to any
requirements contemplated by Section 3.2, in equal bi-weekly
installments commencing July 1, 1995 and ending December 31, 1995.
5. Vacation Benefits.
5.1. The parties agree that any accrual of vacation benefits
by Wijnen shall and does permanently cease as of the close of business on
June 30, 1994.
5.2. Wijnen acknowledges that he has used and the Company has
fully compensated him for any accrued vacation benefits and no payment for
vacation benefits is due or owing or will be due and owing hereunder.
6. Pension Benefits.
Wijnen shall be entitled to continue to participate in and
remain eligible for the Company's Employee Savings Plan during the term
provided that the Company shall have no obligation whatsoever to pay or
otherwise provide for any contributions whatsoever. Nothing herein is
intended or should be construed as changing, rescinding or modifying any
vested rights to pension benefits or the Company's Employee Savings Plan
benefits Wijnen may have under any such pension benefits or Employee
Savings Plan as of the Effective Date.
7. Health, Life and Disability Insurance Plans.
7.1 Wijnen understands and agrees that the Company will
continue at its expense his existing coverage under the Company's health,
dental, life and disability insurance plans during the Term to the extent
legally permissible under the Company's health, life and disability
insurance plans and applicable federal and state law; provided that Wijnen
fulfill such requirements as may be reasonably requested by the Company's
insurers.
7.2. If Wijnen secures full-time employment before the
completion of the Term and becomes covered under any other employer's plan
to at least the same extent as the existing health, life and disability
coverage provided to Wijnen by the Company, he understands that coverage
under the Company's health, life and disability insurance plans shall end
upon the date of such coverage by the new employer's plan.
7.3. To the extent permissible by the Company's insurers and
applicable federal and state law, if Wijnen's health insurance coverage
terminates solely because of a change in insurance carrier, Wijnen shall be
accorded the right to participate at the Company's expense in and receive
benefits under and in accordance with the provisions of any Company plan
relating to medical insurance or reimbursement to the extent such plan is
in existence from time to time for the benefit of executives of the
Company. Wijnen shall then be entitled to participate in such medical plan
to the same extent as persons holding comparable positions in the Company
from time to time. The Company may discontinue any such plan at any time
or times, without any liability to Wijnen. The parties agree that under no
circumstances shall the Company be required to make any payments other than
insurance premiums.
7.4. For purpose of COBRA, 29 U.S.C. 1161-1168, Wijnen's
termination is denominated as of December 31, 1995.
8. Full Satisfaction.
Wijnen agrees that the payments and credits described in this
Agreement shall be in full satisfaction of any and all claims against the
Company for payment of any nature whatsoever, including but not limited to
all forms of compensation, benefits, stock options (whether or not vested),
severance pay, salary, bonuses and perquisites that Wijnen has or may have
against the Company, whether matured or unmatured and whether known or
unknown, arising out of the Employment Agreement, Wijnen's employment
relationship, status as an officer, the termination of Wijnen's status as
an officer of the Company or any other agreement or promise, whether oral
or written, which Wijnen may have with the Company.
9. Releases.
9.1. Except as set forth below, in consideration of the
provisions of this Agreement and for other good and sufficient
consideration, receipt of which is hereby acknowledged, Wijnen hereby fully
and forever releases and discharges the Company from all actions, causes of
actions, suits, covenants, contracts, controversies, agreements, promises,
claims, and demands in law or equity, (regardless of whether or not known
at present), which Wijnen ever had, now has, or hereafter may have against
the Company, including, but not limited to (a) claims related to the
payment of compensation and benefits, (b) claims for breach of the
Employment Agreement, (c) claims for wrongful discharge, (d) rights and
claims alleging a violation of the Age Discrimination in Employment Act of
1967, as amended, 29 U.S.C. 621 et seq., as of the date this Agreement is
executed, (e) claims pursuant to any federal, state or local law regarding
discrimination based on race, color, creed, age, sex, religion, marital
status, affectational or sexual orientation, disability, atypical
hereditary or cellular blood traits, ancestry, national origin, draft
liability or veteran status, (f) claims for alleged violation of any other
local, state, or federal law, regulations, ordinances or public policy
having any bearing whatsoever on the terms or conditions of Wijnen's
employment with the Company or the termination of such employment, (g)
claims pursuant to common law under tort, contract or any other theories
now or hereafter recognized, (h) claims related in any way to the stock
options of the Company and (i) any other claims arising directly or
indirectly by any reason whatsoever out of Wijnen's employment relationship
or the termination of Wijnen's employment relationship with the Company.
9.2. In consideration of the provisions of this Agreement and
for other good and sufficient consideration, receipt of which is hereby
acknowledged, the Company hereby fully and forever releases and discharges
Wijnen from all actions, causes of actions, suits, covenants, contracts,
controversies, agreements, promises, claims, and demands in law or equity,
(regardless of whether or not known at present), which the Company ever
had, now has, or, excluding breaches of this Agreement, hereafter may have
against Wijnen.
9.3. Notwithstanding the provisions of Section 9.1, any claims
by Wijnen (a) for indemnification and defense under any provisions of the
Company's and its successors' and/or assigns' charter, By-laws, and any
applicable policy, or by law and (b) relating solely to events arising
subsequent to the effective date of this Agreement or from any breaches of
this Agreement, shall not be released.
9.4. Wijnen understands that there are various state and
federal laws that prohibit employment discrimination on the basis, of age,
sex, race, color, national origin, religion, disability and other
categories, and that these laws are enforced by the courts and various
government agencies. Wijnen intends to give up any rights he may have
under these laws or any other laws with respect to his employment with the
Company, or the termination of that employment.
10. Protection of Confidential Information.
10.1. Except as otherwise provided by law or judicial order and
notwithstanding the fact that the parties hereby agree to terminate
effective June 30, 1994 the non-compete covenant in paragraph 6 (c) of the
Employment Agreement and of the application to Wijnen of any other Company
policies regarding non-competition, Wijnen whether directly or indirectly,
either alone or jointly with any person, firm or corporation and whether as
a principal, servant or agent, shall not at any time make, use for his own
purposes or divulge to any person, firm or corporation any information or
fact (excluding information which is generally available to the public or
which the Company has previously made publicly available and excluding such
information as is required to be divulged to a government agency or
pursuant to lawful process) relating to the management, business (including
prospective business), finances, inventions, technologies or technical
processes of the Company or its customers, or the terms of any contracts
between the Company and any of its customers, which have come to the
knowledge of Wijnen during his employment by the Company which is
confidential, provided that nothing in this paragraph shall prevent Wijnen
from using his own skill in business in which he may lawfully be engaged.
Wijnen agrees that he will not during the Term accept employment with or
furnish services for, directly or indirectly, Otake Corp., Orion Sales
Corp. Grand Prix or Sanyo Corp. or any of their respective affiliates.
10.2. Concurrently with the execution of this Agreement, Wijnen
represents that he has surrendered to the Company any and all documents,
memoranda, records, files, letters, specifications or other papers,
computer disks or other affairs of Company (the "Confidential Material").
10.3. "Confidential Material" shall mean all information of any
kind or nature pertaining to the Company which is not generally available
to the public, including, but not limited to, information relating to the
Company's agreements, proprietary rights, research, developments,
inventions, know-how, trade secrets, patents, patent applications,
environmental matters, documents of any kind and manuals, technical
advances, commercial arrangements, manufacture, engineering, products,
accounting, sales, strategies, tax returns, financial records and
statements, marketing, customers or customers lists, dealings with
government agencies, and any information of a like nature furnished to or
obtained by Wijnen from the Company during his employment by the Company
relating to activities of third parties which said third party or parties
have transmitted to the Company under any agreement or arrangement to hold
the same secret or confidential.
10.4. The Company shall cause to be returned to Wijnen all of
Wijnen's personal property that is in the possession of the Company and
Wijnen shall cause to be returned to the Company all of the Company's
equipment that is in the possession of Wijnen.
10.5. Wijnen hereby covenants with the Company that he will
not, for any reason whatsoever and whether directly or indirectly, either
alone or jointly with any person, firm or corporation and whether as
principal, servant or agent in any way make any negative comment about the
Company to third parties or disparage its business capabilities, products,
plans or management to any supplier, vendor, contractor, creditor,
shareholder, media, subcontractor, competitor or customer of the Company.
10.6. The Company hereby covenants with Wijnen that its
executive officers, board members and public relations firm will not, for
any reason whatsoever and whether directly or indirectly, either alone or
jointly with any person, firm or corporation and whether as principal,
servant or agent in any way make any negative comment about Wijnen to third
parties.
11. Confidentiality.
11.1. Except as provided in Sections 11.2 and 11.3 hereof and
as otherwise provided by law or judicial order, the parties agree that the
terms and conditions of this Agreement shall remain confidential between
them and shall not be disclosed to any other person.
11.2. Notwithstanding the provision of Section 11.1, nothing in
this Agreement shall prevent Wijnen from discussing this Agreement in
confidence with his attorneys, financial advisers or members of his
immediate family or with any federal or state taxing authority; provided,
however, that before disclosing any such information to any such person,
Wijnen shall advise such person that the terms of the Agreement are
confidential.
11.3. Notwithstanding the provision of Section 11.1, the
Company shall be entitled to make any disclosure which it deems necessary
in order to comply with any applicable securities statutes and regulations
and securities exchange rules.
12. Miscellaneous.
12.1. This Agreement contains the entire Agreement of the
parties with respect to its subject matter hereof and supersedes all prior
negotiations and agreements among them.
12.2. This Agreement may be modified, altered or terminated
only upon the express written consent of the parties hereto, which consent
must be signed by the parties.
12.3. In the event a court of competent jurisdiction determines
there exists any default or breach by the Company of this Agreement, (i)
all of Wijnen's obligations to the Company with respect to the $130,000
loan described in Section 4 shall be deemed to have been fulfilled and the
Company's right to collect any further payments shall be waived and (ii)
Wijnen's release under Section 9 shall be void and he shall be free to
pursue any claims which existed prior to execution of this Agreement.
12.4. The parties mutually warrant that they: (a) have
negotiated and consulted with counsel with respect to the terms hereof, (b)
have read this Agreement, (c) understand all the terms and conditions
hereof, (d) are not incompetent or had a guardian, conservator or trustee
appointed for them and (e) entered into this Agreement of their own free
will and volition.
12.5. The waiver of any party of a breach of any provision
hereof shall not operate or be construed as a waiver of any subsequent
breach by any party.
12.6. The article headings contained herein are for convenience
only and shall not in any way affect the interpretation, construction or
enforceability of any provision of this Agreement.
12.7. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey, exclusive of any
choice of law rules.
12.8. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same Agreement.
12.9. This Agreement shall not be assignable by Wijnen, but it
shall be binding upon, and shall inure to the benefit of, his heirs,
executors, administrator, devises and legal representatives.
12.10. Wijnen acknowledges and agrees that he is entitled
to at least twenty-one days within which to consider this Agreement and
that the Company advised him to consult an attorney prior to executing this
Agreement.
12.11. Wijnen's waiver of claims, if any, alleging a
violation for the Age Discrimination in Employment Act of 1967, as amended,
shall become effective and enforceable on the eighth day after execution by
Wijnen. The parties understand and agree that Wijnen may revoke his waiver
of claims under the Age Discrimination in Employment Act of 1967, as
amended, after having executed this Agreement by so advising the Company in
writing, provided such writing is received by the Company at the address
listed below for notices to the Company no later than 11:59 p.m. on the
seventh day after Wijnen's execution of this Agreement.
12.12. All notices, requests, demands and other communications
hereunder shall be sent to the following by certified mail, return receipt
requested.
Notices to Wijnen:
Mr. Alex G. Wijnen
14 Independence Court
Madison, New Jersey 07940
and a copy to:
David H. Ben-Asher, Esq.
Rabner, Allcorn, Baumgart,
Ben-Asher & Tucker
52 Upper Montclair Plaza
P.O. Box 890
Upper Montclair, New Jersey 07043
Notices to the Company:
Mr. Eugene I. Davis
Executive Vice President
Emerson Radio Corp.
Nine Entin Road
P.O. Box 430
Parsippany, New Jersey 07054-0430
and a copy to:
Jeff Davis, Esq.
Lowenstein, Sandler, Kohl,
Fisher & Boylan
A Professional Corporation
65 Livingston Avenue
Roseland, New Jersey 07068
Any party may designate other addresses and recipients at any time by
sending written notice of such changes to the other party hereto.
12.13. WIJNEN ACKNOWLEDGES AND AGREES THAT HE HAS READ AND
FULLY UNDERSTANDS THE MEANING OF EACH PROVISION OF THIS AGREEMENT,
INCLUDING SPECIFICALLY THE RELEASES CONTAINED HEREIN. WIJNEN FURTHER
ACKNOWLEDGES AND AGREES THAT HE HAS BEEN ADVISED IN WRITING BY THE COMPANY
TO CONSULT COUNSEL, THAT HE HAS HAD THE OPPORTUNITY TO CONSULT WITH AN
ATTORNEY CONCERNING THIS AGREEMENT AND THAT HE FREELY AND VOLUNTARILY
ENTERS INTO IT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
WITNESS:
____________________________ /s Alex Wijnen
___________________
Alex Wijnen
ATTEST: EMERSON RADIO CORP.
____________________________ /s/ Eugene I. Davis
_________________________
Eugene I. Davis
Executive Vice President
EMERSON RADIO INTERNATIONAL, LTD
Citco Building
Wickhams Cay
P.O. Box 662, Road Town
Tortola
British Virgin Island
Peter G. Bunger
Rosa Maris
29, Avenue des Papalins
MC 9800 Monaco
Re: Independent Consultant's Agreement
Dear Peter:
This letter, when signed by you (referred to herein as "you") and
returned to Emerson Radio International Limited ("Emerson" or "us"), shall
confirm your acceptance of our offer to engage you as an independent
consultant for Emerson on the following terms:
1. You are being retained to consult with the Board of Directors
of Emerson or any other officer, employee or agent of Emerson as designated
by the Board on (i) evaluation of opportunities to generate of sourcing
and/or licensing fees, (ii) identification and evaluation of international
markets for existing and new products under the "Emerson" name, and (iii)
development of activities in international markets (hereinafter collectively
referred to as "Services").
2. The term of this Agreement (the "Term") commences as of October
1994, and, subject to paragraph 4, ends on September 30, 1996. For all
services rendered by you during the Term, you shall receive annual
compensation in the aggregate amount of $40,000, payable in equal monthly
installments.
3. You hereby agree that all ideas, written materials, and other
developments or improvements conceived and creation of any work ("Work")
by you, alone or with others, during the term of this Agreement, including
but not limited to all programs, strategies, or promotions, etc., whether in
progress or completed that are within the scope of the Services of this
Agreement are for the sole benefit and the sole and exclusive property
of Emerson and that any and all trademarks, patents, copyrights, trade
secrets and Work shall be owned by and belong to Emerson absolutely. You
agree to assist Emerson, at its expense, to obtain copyrights, trademarks,
patents or any other applicable proprietary rights ("rights") on any such
Work and agree to execute all documents and do anything necessary to obtain
such rights in the name of Emerson as requested by Emerson. You agree that
to the extent that any Work is deemed by a Court in any competent
jurisdiction not to be the property of Emerson, you shall fully and
exclusively assign all rights, title and interest to the Work to Emerson
including but not limited to full and complete copyrights, trademarks,
patents and the right to copyright all Work. You shall cause your agents
to be bound by the terms of this paragraph 3.
4. During the Term, either party may terminate this Agreement by
reason of a breach hereof upon thirty (30) days written notice after giving
a written notice of default with seven (7) days to cure. If during the
term of this Agreement Emerson discontinues operating its present business
or you become incapacitated and cannot perform the Services for a period of
thirty (30) non-consecutive days during any calendar year, this Agreement
shall terminate immediately; provided however, that you shall be entitled
to receive all fees and reimbursements properly payable hereunder in the
event Emerson discontinues operating its present business.
5. You shall make periodic reports to Emerson on your Services as
requested by Emerson from time to time (but no less frequently than
monthly), shall retain all records regarding your Services for a period of
at least six (6) years and shall permit Emerson or its representatives
access to such records upon reasonable notice.
6. You shall pay your own taxes (regardless of the origin of the
taxing authority) with respect to all payments made to you hereunder and
agree to hold Emerson harmless from and against any claim by any
governmental taxing authority (i) that Emerson should have withheld any
sums from your compensation or otherwise made any payment on your behalf or
(ii) resulting from your engagement hereunder.
7. You represent that you are not subject to any restrictions
(contractual or otherwise) which prevent you from accepting this engagement.
You covenant and agree that provided Emerson is not in default under the
terms of this Agreement, you shall not render any services which
would conflict with your responsibilities hereunder or create a conflict of
interest.
8. During the course of your engagement, you will, at the absolute
discretion of the Board of Emerson, have access to certain confidential
information relating to the business, methods and practices of Emerson, its
plans for new products, its pricing policies, and its relationships with
its customers, accounts, directors, officers and employees. You
acknowledge that all of the foregoing is confidential, and that the use
(other than for the Services herein), disclosure or threatened disclosure
of any of such confidential and proprietary information would have a
material adverse effect upon Emerson's business and prospects.
Accordingly, you agree to keep confidential and not to use (other than for
the Services herein), disclose all or any part of the foregoing information
during the term and for a period of 3 years thereafter. Unless such
information becomes part of the public domain. Should you violate or
threaten to violate the provisions of this paragraph or those of paragraphs
7 and 21, you acknowledge that Emerson could be irreparably injured and
that it will not have an adequate remedy at law. Accordingly, you agree
that in any such event, Emerson may seek and obtain a temporary restraining
order, injunction or other appropriate equitable relief without proof of
actual damages or the posting of a bond or other security.
9. Your status under this Agreement shall be that of an independent
contractor and, except as specifically provided in this Agreement, you,
alone, shall bear all costs and expenses incurred by you or any person
engaged by you in performing your duties hereunder. Emerson shall, upon
presentation of appropriate documentation and in accordance with customary
Emerson procedures, reimburse you for all reasonable travel (via business
class) and other expenses incurred by you in the performance of the
Services which expenses and amounts are incurred with the prior written
approval of the Board or other authorized person as designated by the Board.
10. You shall have no authority to enter into any agreements or
commitments on behalf of Emerson, nor shall you represent or hold yourself
out to any person, firm or corporation as having any such authority.
11. You agree to indemnify, defend and hold Emerson harmless from
and against all demands, claims, damages, losses and defenses (including
reasonable costs, fees of attorneys, accountants and expert witnesses)
arising out of or resulting from the negligent performance of, or omission
to perform, the Services.
12. Emerson agrees to indemnify, defend and hold you harmless from
and against all demands, claims, damages, losses and defenses (including
reasonable costs, fees of attorneys, accountants and expert witnesses)
which may arise out of or resulting from its misconduct or negligence.
13. This Agreement supersedes and replaces any and all prior
agreements and understandings between you and Emerson and may not be
changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification or discharge
is sought. The failure by either party to insist upon strict compliance with
any of the terms, covenants or conditions hereof shall not be deemed a
waiver of such terms, covenants or conditions, nor shall any waiver or
relinquishment of any right or power hereunder at any one time or
more times be deemed a waiver or relinquishment of such right or power
at any other time or times. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
14. Any notice or other communication required or permitted by this
Agreement shall be sufficiently given or sent if delivered personally,
sent by telegram, or mailed by certified or registered mail, postage prepared
to the addresses set forth herein, or to such other address as may be
furnished in writing by either party to the other. All such notices and
communications shall be deemed to have been given as of the date
received if delivered personally, or the date so sent or so deposited in
overnight express mail (Federal Express or DHL) if otherwise given.
15. This Agreement shall be binding upon and inure to the benefit
of the parties and their legal representatives, successors and assigns.
16. This Agreement shall be governed by the laws of the British
Virgin Islands. The parties consent to the non-exclusive jurisdiction of
the Courts of the British Virgin Islands for the resolution of any and all
claims or disputes relating to this Agreement.
17. This Agreement is nonassignable unless agreed to in writing by
the parties.
18. Each party agrees to comply with all laws, rules and regulations
in its performance under this Agreement.
19. This Agreement does not confer any rights upon third parties.
20. Paragraphs 6, 8, and 11 shall survive termination or expiration
of this Agreement.
21. You shall use your own name in performance of the Services
herein and may not use the trademarks, tradenames or rights to use same
belonging to Emerson and/or its subsidiaries or affiliates without
Emerson's prior written consent in each instance.
If the above terms conform with your understanding, kindly sign
this letter in the appropriate space below.
Very truly yours,
EMERSON RADIO INTERNATIONAL LIMITED
By: /s/ Geoffrey P. Jurick
_____________________________
Geoffrey P. Jurick
Director
AGREED AND ACCEPTED AS OF THE
FIRST DAY OF OCTOBER, 1994
By: /s/ Peter C. Bunger
______________________
Peter G. Bunger
EMERSON RADIO EUROPE B.V.
Drentastraat 20
1083 HK Amsterdam
Netherlands
Peter G. Bunger
Mythenquai 26
CH 8002 Zurich
Re: Independent Consultant's Agreement
Dear Peter:
This letter, when signed by you (referred to herein as "you") and
returned to Emerson Radio Europe B.V. ("Emerson" or "us"), shall confirm
your acceptance of our offer to engage you as an independent consultant for
Emerson on the following terms:
1. You are being retained to consult with the Board of Directors
of Emerson or any other officer, employee or agent of Emerson as designated
by the Board on (i) evaluation of opportunities to generate of sourcing
and/or licensing fees, (ii) identification and evaluation of international
markets for existing and new products under the "Emerson" name, and (iii)
development of activities in international markets (hereinafter collectively
referred to as "Services").
2. The term of this Agreement (the "Term") commences as of October
1994, and, subject to paragraph 4, ends on September 30, 1996. For all
services rendered by you during the Term, you shall receive annual
compensation in the aggregate amount of $100,000, payable in equal monthly
installments.
3. You hereby agree that all ideas, written materials, and other
developments or improvements conceived and creation of any work ("Work") by
you, alone or with others, during the term of this Agreement, including but
not limited to all programs, strategies, or promotions, etc., whether in
progress or completed that are within the scope of the Services of this
Agreement are for the sole benefit and the sole and exclusive property of
Emerson and that any and all trademarks, patents, copyrights, trade secrets
and Work shall be owned by and belong to Emerson absolutely. You agree to
assist Emerson, at its expense, to obtain copyrights, trademarks, patents
or any other applicable proprietary rights ("rights") on any such Work and
agree to execute all documents and do anything necessary to obtain such
rights in the name of Emerson as requested by Emerson. You agree that to
the extent that any Work is deemed by a Court in any competent jurisdiction
not to be the property of Emerson, you shall fully and exclusively assign
all rights, title and interest to the Work to Emerson including but not
limited to full and complete copyrights, trademarks, patents and the right
to copyright all Work. You shall cause your agents to be bound by the
terms of this paragraph 3.
4. During the Term, either party may terminate this Agreement by
reason of a breach hereof upon thirty (30) days written notice after giving
a written notice of default with seven (7) days to cure. If during the
term of this Agreement Emerson discontinues operating its present business
or you become incapacitated and cannot perform the Services for a period of
thirty (30) non-consecutive days during any calendar year, this Agreement
shall terminate immediately; provided however, that you shall be entitled
to receive all fees and reimbursements properly payable hereunder in the
event Emerson discontinues operating its present business.
5. You shall make periodic reports to Emerson on your Services as
requested by Emerson from time to time (but no less frequently than
monthly), shall retain all records regarding your Services for a period of
at least six (6) years and shall permit Emerson or its representatives
access to such records upon reasonable notice.
6. You shall pay your own taxes (regardless of the origin of the
taxing authority) with respect to all payments made to you hereunder and
agree to hold Emerson harmless from and against any claim by any
governmental taxing authority (i) that Emerson should have withheld any
sums from your compensation or otherwise made any payment on your behalf or
(ii) resulting from your engagement hereunder.
7. You represent that you are not subject to any restrictions
(contractual or otherwise) which prevent you from accepting this engagement.
You covenant and agree that provided Emerson is not in default under the
terms of this Agreement, you shall not render any services which would
conflict with your responsibilities hereunder or create a conflict of
interest.
8. During the course of your engagement, you will, at the absolute
discretion of the Board of Emerson, have access to certain confidential
information relating to the business, methods and practices of Emerson, its
plans for new products, its pricing policies, and its relationships with
its customers, accounts, directors, officers and employees. You
acknowledge that all of the foregoing is confidential, and that the use
(other than for the Services herein), disclosure or threatened disclosure
of any of such confidential and proprietary information would have a
material adverse effect upon Emerson's business and prospects.
Accordingly, you agree to keep confidential and not to use (other than
for the Services herein), disclose all or any part of the foregoing
information during the term and for a period of 3 years thereafter.
Unless such information becomes part of the public domain. Should you
violate or threaten to violate the provisions of this paragraph or those of
paragraphs 7 and 21, you acknowledge that Emerson could be irreparably
injured and that it will not have an adequate remedy at law. Accordingly,
you agree that in any such event, Emerson may seek and obtain a temporary
restraining order, injunction or other appropriate equitable relief
without proof of actual damages or the posting of a bond or other security.
9. Your status under this Agreement shall be that of an
independent contractor and, except as specifically provided in this
Agreement, you, alone, shall bear all costs and expenses incurred by you
or any person engaged by you in performing your duties hereunder. Emerson
shall, upon presentation of appropriate documentation and in accordance
with customary Emerson procedures, reimburse you for all reasonable
travel (via business class) and other expenses incurred by you in the
performance of the Services which expenses and amounts are incurred with
the prior written approval of the Board or other authorized person as
designated by the Board.
10. You shall have no authority to enter into any agreements or
commitments on behalf of Emerson, nor shall you represent or hold yourself
out to any person, firm or corporation as having any such authority.
11. You agree to indemnify, defend and hold Emerson harmless from
and against all demands, claims, damages, losses and defenses (including
reasonable costs, fees of attorneys, accountants and expert witnesses)
arising out of or resulting from the negligent performance of, or omission
to perform, the Services.
12. Emerson agrees to indemnify, defend and hold you harmless from
and against all demands, claims, damages, losses and defenses (including
reasonable costs, fees of attorneys, accountants and expert witnesses)
which may arise out of or resulting from its misconduct or negligence.
13. This Agreement supersedes and replaces any and all prior
agreements and understandings between you and Emerson and may not be
changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification or
discharge is sought. The failure by either party to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall
not be deemed a waiver of such terms, covenants or conditions, nor shall
any waiver or relinquishment of any right or power hereunder at any one time
or more times be deemed a waiver or relinquishment of such right or power
at any other time or times. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
14. Any notice or other communication required or permitted by
this Agreement shall be sufficiently given or sent if delivered personally,
sent by telegram, or mailed by certified or registered mail, postage
prepared to the addresses set forth herein, or to such other address as may
be furnished in writing by either party to the other. All such notices and
communications shall be deemed to have been given as of the date received
if delivered personally, or the date so sent or so deposited in overnight
express mail (Federal Express or DHL) if otherwise given.
15. This Agreement shall be binding upon and inure to the
benefit of the parties and their legal representatives, successors and
assigns.
16. This Agreement shall be governed by the laws of The
Netherlands. The parties consent to the non-exclusive jurisdiction of the
Courts of The Netherlands for the resolution of any and all claims or
disputes relating to this Agreement.
17. This Agreement is nonassignable unless agreed to in writing by
the parties.
18. Each party agrees to comply with all laws, rules and
regulations in its performance under this Agreement.
19. This Agreement does not confer any rights upon third parties.
20. Paragraphs 6, 8, and 11 shall survive termination or expiration
of this Agreement.
21. You shall use your own name in performance of the Services
herein and may not use the trademarks, tradenames or rights to use same
belonging to Emerson and/or its subsidiaries or affiliates without
Emerson's prior written consent in each instance.
If the above terms conform with your understanding, kindly sign
this letter in the appropriate space below.
Very truly yours,
EMERSON RADIO EUROPE B.V.
By: /s/ Geoffrey P. Jurick
___________________
Geoffrey P. Jurick
Director
AGREED AND ACCEPTED AS OF THE
FIRST DAY OF OCTOBER, 1994
By: /s/ Peter G. Bunger
____________________
Peter G. Bunger
EMPLOYMENT AGREEMENT, dated as
of October 3, 1994, between EMERSON
RADIO CORP., a Delaware
corporation (the "Company"),
and Andrew Cohan ("Employee").
Employee is willing to serve as Vice President - Merchandising and
Special Projects of the Company and the Company desires to retain the
Employee in such capacity on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and the Employee hereby agree as follows:
1. EMPLOYMENT
(a) The Company agrees to employ Employee and Employee agrees
to serve the Company and its affiliates during the period beginning with
the date of this Agreement and ending October 3, 1997 (the "Employment
Period" or "Term").
(b) Employee shall serve as a Vice President - Merchandising
and Special Projects of the Company and shall serve in such other
capacities and offices in the Company or its affiliates as the Board of
Directors or the Chief Executive Officer may reasonably request given
Employee's skills and abilities.
(c) The term "Company" as used in this Agreement shall be
deemed to include any and all present and future subsidiaries and
affiliates of the Company.
2. DEVOTION OF TIME
During the Employment Period, Employee shall expend all of his
working time for the Company, shall devote his best efforts, energy and
skill to the services of the Company and the promotion of its interests,
and shall not take part in activities detrimental to the best interests of
the Company.
3. COMPENSATION
For all services rendered by the Employee in any capacity required
hereunder during the Term, including, without limitation, services as an
executive, officer, director, or member of any committee of the Company, or
any subsidiary, affiliate or division thereof, the Executive shall be
compensated as follows:
(a) Base Salary. The Company shall pay the Employee an
initial salary of $140,000 per annum or such higher annual amount as is
being paid from time to time pursuant to the terms hereof ("Base Salary").
The Base Salary shall be reviewed from time to time and subject to such
periodic increases as the Board of Directors shall deem appropriate in
accordance with the Company's customary procedures and practices regarding
the salaries of officers of the Company. Base Salary shall be payable in
accordance with the customary payroll practices of the Company, but in no
event less frequently than monthly.
(b) Bonus. The Employee shall be entitled to receive an
annual formula bonus equal to an amount up to thirty percent (30%) of the
Base Salary upon attainment of objectives identified by the Board of
Directors consistent with general policies adopted by the Board with
respect to executive and sales personnel. The Employee may also receive an
additional annual performance bonus to be recommended by the Compensation
and Personnel Committee of the Board of Directors and established and to be
payable from time to time at the sole discretion of the Board of Directors.
(c) Stock Option. Subject to approval of the Compensation
and Personnel Committee, the Company will grant the Employee, as of the
effective date of this Agreement, options to purchase 30,000 shares of the
Company's common stock, par value $0.10 per share (the "Stock"), at an
exercise price per share established by the Compensation and Personnel
Committee. One third of the shares subject to this option shall become
vested and exercisable upon each anniversary of the effective date of the
Agreement. If the outstanding shares of common stock are increased or
decreased, or are changed into or exchanged for a different number of or
kind of shares or securities, as a result of one or more reorganizations,
recapitalization, stock splits reverse stock splits, stock dividends or the
like, appropriate adjustments shall be made in the number of shares for the
unexercised portions of the option and appropriate adjustment shall be made
for the exercise price.
(d) Additional Benefits. Except as modified by this
Agreement, the Employee shall be entitled to participate in all
compensation or employee benefit plans or programs, and to receive all
benefits, perquisites and emoluments, for which any salaried employees of
the Company are eligible under any plan or program now or hereafter
established and maintained by the Company for senior officers, to the
fullest extent permissible under the general terms and provisions of such
plans or programs and in accordance with the provisions thereof, including
group hospitalization, health, dental care life or other insurance, tax-
qualified pension, savings, thrift and profit-sharing plans, termination
pay programs, sick-leave plans, travel or accident insurance, disability
insurance, automobile allowance or automobile lease plans, and executive
contingent compensation plans, including, without limitation, capital
accumulation programs and stock purchase, restricted stock and stock
option plans. Notwithstanding the foregoing, nothing in this Agreement
shall preclude the amendment or termination of any such plan or program,
provided that such amendment or termination is applicable generally to the
senior officers of the Company or any subsidiary or affiliate.
(e) Perquisites. The Company also will furnish the Employee,
without cost to him, with perquisites consistent with those afforded other
officers holding positions with the Company comparable to the position held
by the Employee, including the following:
(i) an allowance for the use of an automobile;
(ii) reimbursement of out-of-pocket expenses incurred in
the discharge of the Employee's duties pursuant to
this Agreement at the request of the Company; and
(iii) three weeks paid vacation.
4. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) Certain Terminations. In the event the Employee's
employment hereunder terminates due to either Permanent Disability, a
Without Cause Termination or a Constructive Discharge, the Company
shall, as liquidated damages or severance pay, or both, continue, subject
to the provisions of Section 5 below, to pay the Employee's Base Salary as
in effect at the time of such termination as such payments would otherwise
become due and payable until the expiration of the Term (the "Severance
Period") and the other benefits and qualified stock options provided
hereunder shall continue to vest pursuant to the terms hereof during the
Severance Period, provided, that in the case of Permanent Disability, such
payments shall be offset by any amounts otherwise paid to the Employee
under the Company's disability program generally available to other
employees. In addition, earned but unpaid Base Salary as of the date of
termination of employment shall be payable in full. Group hospitalization,
health, dental care, life or other insurance, travel or accident insurance
and disability insurance shall continue through the end of the Severance
Period.
(b) Other Terminations. In the event that the Employee's
employment hereunder terminates due to a Termination for Cause or the
Employee unilaterally severs the employment relationship or terminates
employment with the Company for reason other than a Constructive Discharge
or Permanent Disability, earned but unpaid Base Salary as of the date of
termination of employment shall be payable in full and vested qualified
stock options will remain vested in the Employee. However, no other
payments of any nature whatsoever, including unearned Base Salary, shall be
made, or benefits provided, by the Company under this Agreement except for
stock options to the extent already vested and exercisable hereunder,
benefits vested and payable under any retirement plan and benefits that
have already become vested under the terms of employee benefit programs
maintained by the Company or its affiliates of its employees. All options
not vested shall be canceled as of the date of termination.
(c) Definitions. For purposes of this Agreement, the
following terms have the following meanings:
(i) The term "Termination for Cause" means, to the
maximum extent permitted by applicable law, (x) a termination of the
Employee's employment by the Company because the Employee has breached or
failed to perform his duties under this Agreement, applicable law or the by-
laws of the Company, including the unreasonable neglect or refusal to
perform duties assigned by the Board of Directors or Executive Committee,
(x) abuse of office or malfeasance by Employee, (y) conviction of the
Employee of a felony which the Board reasonably deems to be an "abuse of
office" or a crime of moral turpitude or (z) a breach of any
representation contained in this Agreement.
(ii) The term "Constructive Discharge" means a
termination of the Employee's employment by the Employee due to a failure
of the Company or its successors without the prior consent of the Employee
to fulfill the obligations under this Agreement in any material respect.
(iii) The term "Without Cause Termination" means
termination of the Employee's employment by the Company, upon 30 days'
notice to the Employee, other than due to (v) Permanent Disability, (x)
retirement, (y) expiration of the Term, or (z) Termination for Cause.
(iv) The term "Permanent Disability" means the inability
of the Employee, as determined by the Board and confirmed by competent
medical evidence, to work for a period of three continuous full calendar
months or 90 non-consecutive days during any twenty-four consecutive
calendar months due to illness or injury of a physical or mental nature.
To determine issues of disability, the Executive agrees to submit himself
for appropriate medical examination to physicians reasonably acceptable to
the Company and the Employee.
5. OTHER DUTIES OF EMPLOYEE DURING AND AFTER TERM.
(a) Confidential Information. The Employee recognizes and
acknowledges that all information pertaining to the affairs, business,
clients, customers, vendors, plans or prospects of the Company or any of
its subsidiaries or affiliates (any or all of such entities being
hereinafter referred to as the "Business"), as such information may exist
from time to times, other than information that the Company has previously
made publicly available, is confidential information and is a unique and
valuable asset of the Business, access to and knowledge of which are
essential to the performance of the Employee's duties under this Agreement.
The Employee shall not, except to the extent reasonably necessary in the
performance of his duties under this Agreement, divulge to any person,
firm, association, corporation, or governmental agency, any information
concerning the affairs, business, clients, customers, vendors, plans or
prospects of the Business (except such information as is required by law to
be divulged to a government agency or pursuant to lawful process) or make
use of any such information for his own purposes or for the benefit of any
person, firm, association or corporation (except the Business) and shall
use his reasonable best efforts to prevent the disclosure of any such
information by others. All records, memoranda, letters, books, papers,
reports, accounting, experience or other data, and other records and
documents relating to the Business, whether made by the Employee or
otherwise coming into his possession, are confidential information and are,
shall be and shall remain the property of the Business. No copies thereof
shall be made which are not retained by the Business, and the Employee
agrees, on termination of his employment or on demand of the Company, to
deliver the same to the Company.
(b) Patents. Any methods, developments, inventions and/or
improvements, whether patentable or unpatentable, which Employee may
conceive or make along the lines of the Company's business while in its
employ, shall be and remain the property of the Company. Employee further
agrees on request to execute patent applications based on such methods,
developments, inventions and/or improvements, including any other
instruments deemed necessary by the Company for the prosecution of such
patent application or the acquisition of Letters Patent of this and any
foreign country.
(c) Non-Compete/Non-Solicitation. Employee shall have access
to and shall be directly or indirectly responsible for the Company's
customer lists, pricing, policies, projections, product development, trade
secrets and other privileged and confidential information essential to the
Company's business. During the term of this Agreement and the Severance
Period, if applicable, the Employee shall not without express prior written
approval of the Company's Board, directly or indirectly, own or hold any
proprietary interest in, or be employed by or receive remuneration from,
any corporation, partnership, sole proprietorship or other entity engaged
in competition with the Company or any of its affiliates (a "Competitor"),
other than severance-type or retirement-type benefits from entities
constituting prior employers of the Employee. The Employee also agrees
that he will not solicit for the account of any Competitor, any vendor,
customer or client of the Company or its affiliates, or, in the event of
the Employee's termination of employment, any entity or individual that was
such a customer or client during the 12-month period immediately preceding
the Employee's termination of employment. The Employee also agrees not to
act on behalf of any Competitor to interfere with the relationship between
the Company or its affiliates and their employees.
For purposes of the preceding paragraph, (i) the term
"proprietary interest" means legal or equitable ownership, whether through
stockholding or otherwise, of an equity interest in a business, firm or
entity other than ownership of less than 5 percent of any class of equity
interest in a publicly held business, firm or entity and (ii) an entity
shall be considered to be "engaged in competition" if such entity is, or is
a holding company for, an entity engaged in the consumer electronics business.
(d) Remedies. The Company's obligation to make payments,
deliver shares of Stock or provide for any benefits under this Agreement
(except to the extent vested or exercisable) shall cease upon a violation
of the preceding provisions of this section. The Employee's agreement as
set forth in this Section 5 shall survive the Employee's termination of
employment with the Company. Employee acknowledges and agrees that, in the
event he violates any of the restrictions of this Section 5, the Company
will be without adequate remedy at law and will therefore be entitled to
enforce such restrictions by temporary or permanent injunctive or mandatory
relief obtained in an action or proceeding instituted in the courts of the
State of New Jersey or any other court of competent jurisdiction without
the necessity of proving damages and without prejudice to any other
remedies which it may have at law or in equity, and Employee hereby
consents to the jurisdiction of such court for such purpose, provided that
reasonable notice of any proceeding is given, it being understood that such
injunction shall be in addition to any remedy which the Company may have by
law or otherwise.
6. WITHHOLDING TAXES.
The Company may directly or indirectly withhold from any
payments made under this Agreement all Federal, state, city or other taxes
as shall be required pursuant to any law or governmental regulation or
ruling.
7. CONSOLIDATION, MERGER, OR SALE OF ASSETS.
Nothing in this Agreement shall preclude the Company or its
subsidiaries or affiliates from consolidation or merging into or with, or
transferring all or substantially all their or its assets, to, another
corporation which assumes this Agreement and all obligations and
undertakings of the Company hereunder. Upon such a consolidation,
merger or transfer of assets assumption, the term "Company" as used herein
shall mean such other corporation and this Agreement shall continue in full
force and effect.
8. NOTICES.
All notices, requests, demands and other communications
required or permitted hereunder shall be given in writing and shall be
deemed to have been duly given if delivered or mailed, postage prepaid, by
same day or overnight mail as follows:
(a) To the Company:
Emerson Radio Corp.
9 Entin Road
Parsippany, New Jersey 07054
Attn: Chief Executive Officer
(b) To the Employee:
C/O Emerson Radio Corp.
9 Entin Road
Parsippany, New Jersey 07054
or such other address as either party shall have previously specified in
writing to the other.
9. RIGHTS TO PAYMENTS.
Employee shall not under any circumstances have any option or
right to require payments hereunder otherwise than in accordance with the
terms of this Agreement. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary,
to effect any such action shall be null, void and of no effect; provided,
however, that nothing in this Section 9. shall preclude the assumption of
such rights by executors, administrators or other legal representatives of
the Employee or his estate and their assigning any rights hereunder to the
person or persons entitled thereto.
10. SOURCE OF PAYMENT.
All payments provided for under this Agreement shall be paid in
cash from the general funds of the Company. The Company shall not be
required to establish a special or separate fund or other segregation of
assets to assure such payments, and, if the Company shall make any
investments to aid it in meeting its obligations hereunder, the Employee
shall have no right, title or interest whatever in or to any such
investments except as may otherwise be expressly provided in a separate
written instrument relating to such investments. Nothing contained in this
Agreement, and no action taken pursuant to its provisions, shall create or
be construed to create a trust of any kind, or a fiduciary relationship,
between the Company and the Employee or any other person. To the extent
that any person acquires a right to receive payments from the Company
hereunder, such right, without prejudice to rights which employees may
have, shall be no greater than the right of an unsecured creditor of the
Company.
11. REPRESENTATIONS.
(a) Employee hereby represents that, as of the day hereof,
neither his resume nor any other information relating to his employment
history or work experience that he has provided to the Company, whether
written or oral, contains any untrue statement or omission necessary to
make the statements contained therein not misleading. Employee undertakes
to immediately advise the Company of any change relating to such
information. Failure to comply with the terms of this Section 11 shall be
deemed to be a material breach of this Agreement.
(b) You represent and warrant to the Company that you are not
now under any obligations to any business, firm, corporation, association,
venture or other entity or person, and have no other interest which is
inconsistent or in conflict with this Agreement, or which would prevent,
limit or impair, in any way, the performance by you any of your covenants
or agreements contained herein, or any duties of your employment. You
further represent that you have not brought and will not bring or use in
the performance of your duties at the Company any proprietary or
Confidential Information (whether or not in writing) of a former employer
without that employer's written authorization. If the Company is made a
party to any proceedings in connection with any alleged violations of
any alleged agreements or contracts as represented herein, you agree to
indemnify and hold the Company harmless from and against any and all
liabilities and expenses, costs and attorneys fees of counsel chosen by
the Company which it may incur or sustain arising out of any claims, actions
or demands or proceedings for any such alleged violations.
12. RELOCATION EXPENSES
Employee shall permanently relocate his residence to the
location of the Company's principle office as soon as practicable. Company
shall provide to Employee such relocation expenses as are authorized
pursuant to the Company's relocation practice, a copy of which has been
furnished to Employee. Further, Employee shall be reimbursed for
reasonable overnight expenses incurred Monday through Thursday of each week
through June 1995.
13. BINDING AGREEMENT.
Expect as otherwise expressly provided herein, this Agreement
shall be binding upon, and shall inure to the benefit of, the Company, its
successors and assigns. This Agreement, as it relates to the Employee, is
a personal contract and the rights and interest of the Employee hereunder
may not be sold, transferred, assigned, pledged or hypothecated except as
expressly provided herein.
14. GOVERNING LAW.
The validity, interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of New Jersey.
15. ADDITIONAL DOCUMENTS.
Executive shall execute and deliver to the Company the Employee
Confidentiality and Non-Disclosure Policy and Inventions Policy, copies of
which are attached as Exhibits "A" and "B". It is intended that such
policies shall be supplemental to the obligations of the Employee set forth
herein.
16. SIGNING BONUS.
Upon execution of this Agreement by the Company, the Employee
shall be entitled to receive a signing bonus of $15,000 payable in 3 equal
installments commencing on the date of execution of this Agreement and
continuing thereafter on the first day of the third and sixth month
thereafter.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Employee has signed this
Agreement, all as of the first date above written.
EMERSON RADIO CORP.
a Delaware Corp.
By: /s/ Eugene I. Davis
____________________________
Name: Eugene I. Davis
Title: Executive Vice-President
EMPLOYEE
/s/ Andrew Cohan
______________________________
Andrew Cohan
EMERSON RADIO CORP.
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of this Stock Option Plan
("Plan"), to be known as the "Emerson Radio Corp. 1994 Non-Employee
Director Stock Option Plan" is to attract and retain qualified personnel to
accept and continue in positions of responsibility as outside directors
with Emerson Radio Corp., a Delaware corporation ("Company").
2. Definitions. As used in the Plan, unless the context
requires otherwise, the following terms shall have the following
meanings:
(a) "Anniversary Date" shall mean, for each Outside Director,
the later of (x) the first day subsequent to the expiration of one
year following the date on which such Outside Director is first
elected to serve on the Board or (y) the Effective Date.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Certificate" shall mean the Certificate of Incorporation on
file with the Secretary of State of Delaware.
(d) "Committee" shall mean a committee of the Board designated by
the Board and consisting solely of members of the Board who are not
Outside Directors.
(e) "Common Stock" shall mean the Company's common stock, par value
$0.01 per share, authorized for issuance pursuant to the Certificate
or if, pursuant to the adjustment provisions of Section 11 hereof,
another security is substituted for the Common Stock, such other
security.
(f) "Effective Date" shall mean the date the Plan is adopted by the
Board.
(g) "Fair Market Value" shall mean the fair market value of the
Common Stock on the Anniversary Date. If on such date (or, if such
date is not a business day, on the next business date next succeeding
such date) the Common Stock is listed on a stock exchange or is
quoted on the automated quotation system of NASDAQ, the Fair Market
Value shall be the closing sale price (or if such price is
unavailable, the average of the high bid price and low asked price)
on such date. If no such closing sale price or bid and asked prices
are available, the Fair Market Value shall be determined in good
faith by the Committee in accordance with generally accepted
valuation principles and such other factors as the Committee
reasonably deems relevant.
(h) "Option" shall mean the right, granted pursuant to Section 7 of
the Plan, to purchase one or more shares of Common Stock.
(i) "Optionee" shall mean a person to whom an option has been
granted under the Plan.
(j) "Outside Director" shall mean any member of the Board who, on
such person's Anniversary Date, shall not have served as an employee
of the Company or any of the Company's subsidiaries during the twelve
months proceeding such Anniversary Date.
3. Stock Subject to the Plan. There will be reserved for
issuance upon the exercise of Options granted from time to time under
the Plan an aggregate of 300,000 shares of Common Stock, subject to
adjustment as provided in Section 11 hereof. The Committee shall
determine from time to time whether all or part of such 300,000
shares shall be authorized but unissued shares of Common Stock or
issued shares of Common Stock which shall have been reacquired by the
Company and which are held in its treasury. If any Option granted
under the Plan should expire or terminate for any reason without
having been exercised in full, the unpurchased shares shall become
available for the grant of Options under the Plan.
4. Administration of the Plan. The Plan shall be administered by
the Committee. Subject to the provisions of the Plan, the Committee
shall have full discretion:
(a) To determine the exercise price of Option granted hereunder in
accordance with Section 7(b) hereof;
(b) To interpret the Plan;
(c) To promulgate, amend and rescind rules and regulations relating
to the Plan, provided, however, that no such rules or regulations
shall be inconsistent with any of the terms of the Plan;
(d) To subject any Option to such additional restrictions and
conditions (not inconsistent with the Plan) as may be specified when
granting the Option; and
(e) To make all other determinations in connection with the
administration of the Plan.
5. Eligibility. The only persons who shall be eligible to
receive Options under the Plan shall be persons who, on their applicable
Anniversary Date, constitute Outside Directors.
6. Term. No Option shall be granted under the Plan more than ten
years after the date that the Plan is first adopted by the Board.
7. Grant of Stock Options. The following provisions shall apply
with respect to Options granted hereunder:
(a) Grant. At the close of business on the Anniversary Date of
each Outside Director during the term of the Plan, the Company
shall grant an option to purchase twenty five thousand (25,000) shares
of Common Stock (subject to adjustment pursuant to Section 11 hereof),
to such director and an additional option to purchase twenty five
thousand (25,000) shares of Common Stock to each Outside Director
who, as of the close of business on the Anniversary Date applicable
to such Outside Director, is chairman of a duly constituted committee
of the Board, it being understood that no person shall be entitled to
receive Options covering more than 50,000 shares of Common Stock
(subject to adjustment pursuant to Section 11 hereof) pursuant to the
Plan.
(b) Option Price. The price at which shares of Common Stock
shall be purchased upon exercise of an Option shall be established by
the Committee in its sole discretion at a price not to exceed the
Fair Market Value of such shares on the Anniversary Date.
(c) Expiration. Except as otherwise provided in Section 10 hereof,
each option shall cease to be exercisable ten years after the date on
which it is granted.
8. Exercise of Options. Unless the exercise date of an Option
is accelerated pursuant to Section 12 hereof, the following provisions
shall apply, subject to the restrictions set forth in Section 10 with
respect to the exercise of Options:
(a) during the first year after the Anniversary Date, such Option
shall not be exercisable; and
(b) during the second year after the Anniversary Date, such Option
may only be exercised as to up to 33% of the shares of Common Stock
initially covered thereby; and
(c) during the third year after the Anniversary Date, such Option
may only be exercised as to up to 66 2/3% of the shares of Common
Stock initially covered thereby; and
(d) an Option may be exercised in its entirety or as to any portion
thereof at any time during the fourth year after the Anniversary Date
and thereafter until the term of such Option expires or otherwise
ends.
9. Method of Exercise. To the extent permitted by Section 8
hereof, Optionees may exercise their Options from time to time by giving
written notice to the Company. The date of exercise shall be the date on
which the Company receives such notice. Such notice shall be on a form
furnished by the Company and shall state the number of shares to be
purchased and the desired closing date, which date shall be least
fifteen days after the giving of such notice, unless an earlier date
shall have been mutually agreed upon. At the closing, the Company shall
deliver to the Optionee (or other person entitled to exercise the
Option) at the principal office of the Company, or such other place as
shall be mutually acceptable, a certificate or certificates for such
shares against payment in full of the Option price for the number of shares
to be delivered, such payment to be by a certified or bank cashier's check
and/or, if permitted by the Committee of capital stock of the Company
having a Fair Market Value (as determined pursuant to Section 2(f)) on
the date of exercise equal to the excess of the purchase price for the
shares purchased over the amount (if any) of the certified or bank
cashier's check. If the Optionee (or other person entitled to exercise
the Option) shall fail to accept delivery of any or pay for all or any
part of the shares specified in his notice when the Company shall
tender such shares to him, his right to exercise the Option with respect
to such unpurchased shares may be terminated.
10. Termination of Board Status. In the event that an Optionee
ceases to serve on the Board for any reason other than death or disability,
such Optionee's Options shall automatically terminate three months after
the date on which such service terminates, but in any event not later
than the date on which such Options would terminate pursuant to Section 7(c)
hereof. In the event that an Optionee is removed from the Board by means
of a resolution which recites that the Optionee ceases to serve on the
Board by reason of death or disability, an Option exercisable by him shall
terminate one year after the date of death or disability of the Optionee,
but in any event not later than the date on which such Options would
terminate pursuant to Section 7(c) hereof. During such time after death,
an option may be executed only by the Optionee's personal representative,
executor or administrator, as the case may be. No exercise permitted by
this Section 10 shall entitle an Optionee or his personal representative,
executor or administrator to exercise any portion of any Option beyond
the extent to which such Option is exercisable pursuant to Section 8 hereof
on the date such Optionee ceases to serve on the Board.
11. Changes in Capital Structure. In the event that, by reason
of a stock dividend, recapitalization, reorganization, merger, consolidation,
reclassification, stock split-up, combination of shares, exchange of
shares or comparable transaction occurring on a date subsequent to the
Effective Date, the outstanding shares of Common Stock of the Company are
hereafter increased or decreased, or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
any other corporation, then appropriate adjustments shall be made by the
Committee to the number and kind of shares reserved for issuance under the
Plan upon the grant and exercise of Options and the number and kind of
shares subject to the automatic grant provisions of Section 7(a) hereof. In
addition, the Board shall make appropriate adjustments to the number and kind
of shares subject to outstanding Options, and the purchase price per share
under outstanding Options shall be appropriately adjusted consistent with
such change. In no event shall fractional shares be issued or issuable
pursuant to any adjustment made under this Section 11. The determination
of the Committee as to any such adjustment shall be final and conclusive.
12. Mandatory Exercise. Notwithstanding anything to the
contrary set forth in the Plan, in the event that (x) the Company should
adopt a plan of reorganization pursuant to which (i) it shall merge into,
consolidate with, or sell substantially all of its assets to, any other
corporation or entity or (ii) any other corporation or entity shall merge
into the Company in a transaction in which the Company shall become a
wholly-owned subsidiary of another entity, or (y) the Company should adopt
a plan of complete liquidation, then (I) all Options granted hereunder
shall be deemed fully vested and (II) the Company may give an Optionee
written notice therefor requiring such Optionee either (a) to exercise his
or her Options within thirty days after receipt of such notice, including
all installments whether or not they would otherwise be exercisable at the
date, (b) in the event of a merger or consolidation in which shareholders
of the Company will receive shares of another corporation, to agree to
convert his or her Options into comparable options to acquire such shares,
(c) in the event of a merger or consolidation in which shareholders of the
Company will receive cash or other property (other than capital stock), to
agree to convert his or her Options into such consideration (in an amount
representing the appreciation over the exercise price of such Options) or
(d) to surrender such Options or any unexercised portion thereof.
13. Option Grant. Each grant of an option under the Plan will
be evidenced by a document in such form as the Committee may from time to
time approve. Such document will contain such provisions as the Committee
may in its discretion deem advisable, including without limitation
additional restrictions or conditions upon the exercise of an Option,
provided that such provisions are not inconsistent with any of the
provisions of the Plan. The Committee may require an Optionee, as a
condition to the grant or exercise of an Option or the payment therefor, to
make such representations and warranties and to execute and deliver such
notices of exercise and other documents as the Committee may deem consistent
with the Plan or the terms and conditions of the option agreement. Not
in limitation of any of the foregoing, in any such case referred to in
the proceeding sentence the Committee may also require the Optionee to
execute and deliver documents (including the investment letter,
described in Section 14), containing such representations, warranties and
agreements as the Committee or counsel to the Company shall deem necessary
or advisable to comply with any exemption from registration under the
Securities Act of 1993, as amended, any applicable State securities laws,
and any other applicable law, regulation or rule.
14. Investment Letter. If required by the Committee, each
Optionee shall agree to execute a statement directed to the Company, upon
each and every exercise by such Optionee of any Options, that shares issued
thereby are being acquired for investment purposes only and not with a view
to the redistribution thereof, and containing an agreement that such shares
will not be sold or transferred unless either (1) registered under the
Securities Act of 1933, as amended, or (2) exempt from such registration in
the opinion of Company counsel. If required by the Committee, certificates
representing shares of Common Stock issued upon exercise of Options shall
bear a restrictive legend summarizing the restrictions on transferability
applicable thereto.
15. Requirements of Law. The granting of Options, the issuance
of shares upon the exercise of an Option, and the delivery of shares upon
the payment therefor shall be subject to compliance with all applicable
laws, rules, and regulations. Without limiting the generality of the
foregoing, the Company shall not be obligated to sell, issue or deliver any
shares unless all required approvals from governmental authorities and
stock exchanges shall have been obtained and all applicable requirements of
governmental authorities and stock exchanges shall have been complied with.
16. Tax Withholding. The Company, as and when appropriate, shall
have the right to require each Optionee purchasing or receiving shares of
Common Stock under the Plan to pay any federal, state, or local taxes
required by law to be withheld.
17. Nonassignability. No Option shall be assignable or transferable
by an Optionee except by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the
Internal Revenue Code of 1986, as amended (the "Code"), or Title I of the
Employee Retirement Income Security Act ("ERISA") or the rules thereunder,
in which event the terms of this Plan, including all restrictions and
limitations set forth herein, shall continue to apply to the transferee.
Except as otherwise provided in the immediately preceding sentence, during
an Optionee's lifetime, no person other than the Optionee may exercise his
or her Options.
18. Optionee's Rights as Shareholder and Board Member. An Optionee
shall have no rights as a shareholder of the Company with respect to any
shares subject to an Option until the Option has been exercised and the
certificate with respect to the shares purchased upon exercise of the
Option has been duly issued and registered in the name of the Optionee.
Nothing in the Plan shall be deemed to give an Optionee any right to a
continued position on the Board nor shall it be deemed to give any person
any other right not specifically and expressly provided in the Plan.
19. Termination and Amendment. The Board may at any time terminate
or amend the Plan as it may deem advisable, except that (i) the provisions
of this Plan relating to the amount of shares covered by Options, the
exercise price of Options or the timing of Option grants or exercises
shall not be amended more than once every six months, other than
to comport with changes in the Code, ERISA or the rules thereunder, (ii) no
such termination or amendment shall adversely affect any Optionee with
respect to any right which has accrued under the Plan in regard to any
Option granted prior to such termination or amendment, and (iii) no such
amendment shall be effective without approval of the stockholders of the
Company if the effect of such amendment is to (a) materially increase the
number of shares of Common stock authorized for issuance pursuant to the
Plan (otherwise than pursuant to Section 11), (b) increase the number of
shares of Common Stock subject to Options, (c) reduce the exercise price of
Options, (d) materially modify the requirements as to eligibility for
participation in the Plan or (e) materially increase the benefits accruing
to participants under the Plan.
20. Sunday or Holiday. In the event that the time for the
performance of any action or the giving of any notice is called for under
the Plan within a period of time which ends or falls on a Sunday or legal
holiday, such period shall be deemed to end or fall on the next date
following such Sunday or legal holiday which is not a Sunday or legal
holiday.
21. Stockholder Approval. This Plan shall be presented to the
Company's stockholders for their ratification and approval by vote of a
majority of such stockholders present or represented on the date of the
meeting of the stockholders at which this Plan is presented for approval.
Options may be granted prior to stockholder approval of this Plan.