Exhibit 10.3
COMPOSITION AGREEMENT
THIS COMPOSITION AGREEMENT (the "Agreement") made as of the ___ day of
September, 2002, by and among ParView, Inc., a Nevada corporation ("ParView"),
and AmeriCapital, LLC, a Nevada limited liability company ("AmeriCapital") and
All American Semiconductor, Inc., a Delaware corporation ("All American";
AmeriCapital and All American are sometimes referred to herein collectively as
the "All American Parties").
W I T N E S S E T H:
WHEREAS, ParView and All American entered into that certain Security
Agreement dated as of October 19, 2000 (the "Original Security Agreement"; the
Original Security Agreement, as amended by the Amendment to Security Agreement
(as such term is defined below in Part I), and as the same may hereafter be
amended in accordance with its terms, is collectively referred to as the
"Security Agreement"; unless otherwise defined, all capitalized terms used
herein shall have the meanings set forth in the Security Agreement); and
WHEREAS, pursuant to the Original Security Agreement, ParView granted
in favor of All American a security interest in the Collateral (as defined
below), as collateral security for the payment and performance of the
Obligations, which security interest the parties acknowledge was perfected by
All American; and
WHEREAS, ParView does hereby acknowledge that Events of Default have
occurred and are continuing under the Security Agreement; and
WHEREAS, by virtue of the occurrence and continuance of Events of
Default, the All American Parties are entitled to take immediate action to
enforce their respective rights and remedies in and to the Collateral; and
WHEREAS, ParView acknowledges and agrees that it and the All American
Parties have agreed to the terms and conditions of the Composition Agreement
(the "Replacement Agreement") in the form of Exhibit "A" annexed to this
Agreement, and to the Transaction Documents (as defined in the Replacement
Agreement); and
WHEREAS, ParView and the All American Parties desire to either resolve
the existing matters between them in the manner provided for in this Agreement
or, alternatively, in the manner provided for in the Replacement Agreement, as
more particularly described herein and therein; and
WHEREAS, ParView has requested that if the Buyout Actions occur within
the Time Period (as such terms are defined below), as part of the consideration
to ParView from the All American Parties, then the All American Parties consent
to the transfer of the Transferred Leases to Yamaha Motor Corporation, U.S.A.
("Yamaha"), compromise the Deficiency in the manner contemplated in this
Agreement, and take the other Responsive Actions (as hereinafter defined); and
WHEREAS, subject to the terms and conditions of this Agreement, the All
American Parties have consented and agreed to do so.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto do hereby agree as follows:
I. Definitions.
(a) In addition to the other terms defined in the body of
this Agreement, as used in this Agreement (such terms and other capitalized
terms used herein having the respective meanings specified and defined in this
Agreement), the following terms shall have the following meanings, unless the
context otherwise requires:
"Affiliate" shall mean any Person or other business entity
which directly or indirectly controls, or is controlled by, or is under common
control with ParView or a direct or indirect subsidiary of ParView.
"Agreement" shall mean this Agreement, as it may from time to
time be amended, supplemented or otherwise modified in accordance with its
terms.
"All American ParView Stock" shall have the meaning set forth
in Part IX of this Agreement.
"All American Releasees" shall mean All American and
AmeriCapital and their respective subsidiaries and affiliates, and each and
every one of each of the foregoing's respective shareholders, directors,
officers, employees, representatives, legal counsel, agents, parents,
subsidiaries and affiliates, and persons employed or engaged by them, whether
past or present.
"Amendment to Security Agreement" shall mean that certain
Amendment to Security Agreement and Joinder dated as of the date of this
Agreement, made by ParView in favor of the All American Parties, which amends
the Original Security Agreement.
"Business Day" shall mean a day other than a Saturday, Sunday
or any national holiday.
"Buyout Actions" shall have the meaning in Part VIII of this
Agreement.
"Collateral Agreements" shall mean the Security Agreement and
any documents and instruments related thereto and/or executed in connection
therewith, and all other agreements creating or unambiguously intending to
create a security interest in or lien upon the Collateral or any other security
for repayment of the Obligations.
"DavLeon Reimbursement Obligations" shall mean the obligations
of ParView (i) with respect to the "Pleasant Valley", "Riverfront", "Mississippi
National", "Linkscorp. Alabama I, L.L.C.", and "Linkscorp Florida, L.L.C."
Leases, under each of those certain Reimbursement Agreements dated as of June
21, 2001, each made by ParView in favor of All American, as amended or
substituted and (ii) any and all other agreements with respect to the aforesaid
Leases or any other Leases giving rise to reimbursement obligations of ParView
made from time to time hereafter by ParView in favor of an All American Party.
"Deficiency" shall mean the difference between the aggregate
amount of the Obligations as of the date of this Agreement (other than the
Davleon Reimbursement Obligations and the amounts relating to the Lease Payment
Guaranty) and (b) the sum of $2,000,000, plus the All American ParView Stock.
"Display Products" shall mean displays or flat panels of any
nature.
"Executive Management Team" shall mean, collectively, David
Chessler, Richard Halloy, Scott Myers, Lee Neighbors, Scott Klein, Kevin
Carpenter, and David Saslow, and/or such other management personnel with the
title of vice president or higher rank or with managerial responsibility.
"Extraordinary Transaction" shall mean an event whereby
ParView is acquired by sale or issuance of stock or otherwise, or ParView sells,
conveys, leases in one transaction all or substantially all of its property
other than leasing inventory in the ordinary course of business, or otherwise
disposes of all or substantially all of its property or business or merges,
consolidates or enters into any recapitalization, reclassification, share
exchange, conversion or other business combination or reorganization or
acquisition or similar transaction with any other entity (other than a
wholly-owned subsidiary). To this effect, any such transaction in which ParView
is the surviving entity shall not be an "Extraordinary Transaction" unless as a
result of the transaction a "change of control" has occurred. For purposes of
this definition, "change of control" shall be deemed to occur if ParView shall
(1) enter into an Extraordinary Transaction where the stockholders of ParView
immediately prior to the transaction own less than fifty percent (50%) of the
voting power of the surviving entity after such Extraordinary Transaction or (2)
ParView or its shareholders effect any other transaction or series of related
transactions (i) in which more than fifty percent (50%) of the voting power of
ParView directly or indirectly beneficially owned by ParView's shareholders of
record as of May 1, 2002 (excluding any disposition of any shares of the All
American ParView Stock by All American) is disposed of or no longer held, or
(ii) in which more than fifteen percent (15%) of the aggregate voting power
represented by
shares directly or indirectly beneficially owned on May 1, 2002 by David
Chessler and all entities in which David Chessler owns any direct or indirect
pecuniary interest or equity interest (but excluding any shares owned by
unrelated third parties and deemed to be beneficially owned by Mr. Chessler as a
result of a proxy, voting trust or other similar agreement) are disposed of,
provided that an Extraordinary Transaction effected solely for the purpose of
changing the domicile of ParView shall not be deemed a change in control of
ParView.
"Lease" shall mean with respect to ParView equipment sold or
leased to any particular golf course, all of ParView's right, title and interest
in, to and under all Chattel Paper delivered by the golf course in connection
therewith, together with all interests of ParView in and to the equipment and
other property subject thereof, and all other documents, instruments, and
agreements at any time made or delivered in connection therewith, and all
amendments thereto.
"Lien" shall mean any lien, charge, claim, mortgage, security
interest, pledge or other encumbrance of any kind, including, without
limitation, (i) the rights of the seller under any conditional sale, agreement
for deed or title retention agreement, (ii) the rights of the transferee or
transferor under or beneficiary of any agreement or arrangement pursuant to
which there is a transfer of or creation of an interest in property, assets,
revenue or income in order to secure indebtedness, and (iii) any sale or other
disposition of property with the intention of having the seller lease or acquire
the right to possession thereof in an arrangement commonly referred to as a
"sale-leaseback transaction".
"Notification Letter" shall have the meaning set forth in
Section VIII(b)(iii) of this Agreement.
"Obligations" shall mean, collectively, any and all other
obligations and liabilities (primary, secondary, direct, indirect, contingent,
sole, joint or several, whether similar or dissimilar or related or unrelated)
of ParView in favor of either of the All American Parties, due or to become due,
now existing or hereafter incurred, created, contracted or acquired, arising
under, out of or in connection with any of the Transaction Documents, including,
without limitation, all existing or hereafter created invoices of All American
to ParView, and the DavLeon Reimbursement Obligations, and losses for which the
All American Parties are indemnified for under this Agreement; provided that if
the Buyout Actions (as defined in Part VIII) occur before the end of the Time
Period (as defined in Part VIII), then from and after such date (i) ParView
shall have no obligation with respect to any Prior Amounts (as defined in Part
VIII of this Agreement) except as expressly set forth elsewhere in this
Agreement; and (ii) the Obligations shall include only: Obligations created on
or after the date of this Agreement and the DavLeon Reimbursement Obligations
and ParView's indemnification obligations under paragraph 5, Part II of this
Agreement and Obligations created in connection with or as a result of this
Agreement or any other Transaction Document (said surviving Obligations are
collectively referred to as the "Surviving Obligations").
"Obligor" shall mean the lessee or other obligor under the
Chattel Paper, including, without limitation, under the Leases.
"Option Rights" shall have the meaning set forth in Part
II(1)(g) of this Agreement.
"Paid in Full" shall mean the full and indefeasible payment of
all Obligations.
"Person" shall mean any individual, sole proprietorship,
partnership (general or limited), joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
public benefit corporation, other entity or government (whether federal, state,
county, city, municipal, local, foreign, or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Registration Rights Agreement" shall mean that certain
Registration Rights Agreement dated on or about the date of this Agreement, by
and between ParView and All American.
"Replacement Agreement" shall have the meaning set forth in
the fourth 'WHEREAS Clause" of this Agreement.
"Responsive Actions" shall have the meaning set forth in Part
VIII of this Agreement.
"Security Agreement" shall have the meaning set forth in the
first "WHEREAS Clause" of this Agreement.
"Stock" shall mean any shares, general or limited partnership
interests, equity interests or other equivalents (regardless of how designated)
of or in a corporation, partnership or other Person, whether voting or
nonvoting, including, without limitation, common stock, preferred stock or any
other "equity security" (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended).
"Tag Along Rights" shall have the meaning set forth in Section
IV(6) of this Agreement.
"Time Period" shall have the meaning set forth in Part VIII of
this Agreement.
"Transaction Documents" shall mean this Agreement, the
Collateral Agreements, the Registration Rights Agreement, the agreements
creating and evidencing the DavLeon Reimbursement Obligations, all UCC financing
statements and other filings currently of record, as well as any and all other
documents, instruments or agreements (other than informal non-binding
correspondence) at any time concurrently or hereafter made or delivered in
connection with the transactions contemplated herein or hereby or related hereto
and all modifications, amendments, renewals, and supplements to any of the
foregoing.
"Transferred Leases" shall mean the Leases described in
Exhibit "B" of this Agreement.
"Yamaha" shall mean Yamaha Motor Company Ltd., its successors
and assigns.
(b) All other capitalized terms used but not defined in
this Agreement shall have the meanings set forth in the Security Agreement. All
defined terms used herein referring to the plural shall also mean the singular,
and those referring to the singular shall also mean to the plural, unless the
context otherwise requires. If there is any conflict between this Agreement and
the Security Agreement with respect to defined terms or otherwise, this
Agreement shall govern and control.
II. Acknowledgment of Obligations and Representations and Warranties;
Certain Agreements.
1. ParView hereby agrees, represents, warrants, acknowledges and
affirms the following:
(a) As of the date of this Agreement, ParView is indebted
or otherwise obligated to the All American Parties pursuant to invoices and the
other Transaction Documents for the Obligations. ParView has not knowingly
granted any lien or security interest senior in priority to the security
interest granted in the Security Agreement to any other party; provided,
however, that certain security interests are on file in the Secretary of State
offices of Nevada, Florida and certain other states in which golf courses where
ParView equipment is located by Linc Capital, LLC filed prior to the security
interest granted to All American. To the extent that ParView has any claims,
defenses, offsets or counterclaims, in respect of the Obligations, ParView
hereby waives the same to the fullest extent permitted by law. Such waiver,
together with the releases contemplated in Part VI of this Agreement, are a
material inducement to and consideration for All American Parties to enter into
this Agreement.
(b) This Agreement and the other Transaction Documents
are valid, binding, and enforceable against ParView in accordance with their
respective terms except to the extent subject to applicable bankruptcy,
insolvency and similar laws affecting creditor's rights generally and subject,
as to enforceability, to general principles of equity (whether applied in a
proceeding in equity or at law).
(c) All admissions, acknowledgements, warranties,
representations and covenants contained in this Agreement and the other
Transaction Documents (i) are a material part of this Agreement and the other
Transaction Documents; (ii) are (or will be when made) complete, true and
accurate and can be reasonably relied upon by the All American Parties without
further investigation; (iii) are made freely, voluntarily, and without duress;
(iv) are made for the specific purpose of inducing the All American Parties to
enter into this Agreement; and (v) with respect to the representations and
warranties, are made on and as of the date hereof; and (vi) are remade
(except to the extent same relate solely to an earlier date) and reaffirmed as
of each date, if any, on which an All American Party extends additional credit
to ParView (without implying any obligation to do so).
(d) By executing and delivering this Agreement and the
other Transaction Documents and by consummating the transactions contemplated
herein and therein ParView does not intend to hinder, delay or defraud any
entity or individual to which ParView is now, has or shall become indebted, or
to otherwise cause a fraudulent transfer or preferential transfer to occur
whether under state or federal law.
(e) To the extent that pursuant to this Agreement the
execution and delivery hereof and the consummations of the transactions
contemplated hereby, either of the All American Parties receives transfers
within the meaning of the United States Bankruptcy Code, 11 U.S.C. ss.101, et
seq., as amended (the "Bankruptcy Code"), ParView acknowledges that it has
received, in exchange for such transfers, reasonably equivalent value or new
value not less than the value of such transfers to the All American Parties.
(f) ParView is a validly existing corporation in good
standing under the laws of the State of Nevada and duly qualified and in good
standing to transact business as a foreign corporation in the State of Florida
and in each other state in which it transacts business and is required to be
qualified to transact such business except to the extent that no material
adverse affect would result from the failure to so qualify and be in good
standing; ParView has the unrestricted right and authority to execute and
deliver this Agreement, and to enter into and perform all transactions directly
or indirectly contemplated by this Agreement; ParView has not executed any
document or instrument of any kind that would prohibit the execution and
delivery of this Agreement or the entry into and performance of any of the
transactions contemplated by this Agreement, and the execution and delivery of
this Agreement will not cause (with or without the passage of time, the giving
notice or an opportunity to cure) a breach or a default under any agreement
(written or oral), instrument or other document that ParView is a party or bound
to or any of its assets is subject to, or result in any acceleration or
termination thereof , the effect of which would have a material adverse effect
on ParView or any interests of either of the All American Parties. The
individual who has executed this Agreement on behalf of ParView has been duly
authorized to do so. Simultaneously with the execution hereof, ParView is
providing to All American a copy certified by the President or Chief Executive
Officer and the Secretary of ParView of the relevant corporate resolutions duly
adopted by the Board of Directors and shareholders of ParView authorizing and
approving the execution and delivery of this Agreement, and authorizing and
approving all transactions contemplated by this Agreement, including, without
limitation, authorizing an amendment to the Articles of Incorporation of ParView
to increase the number of authorized shares of Common Stock of ParView to a
sufficient number to authorize the issuance to All American of the All American
ParView Common Stock as provided hereunder.
(g) ParView has no Subsidiaries, is not engaged in any
joint venture or partnership with any other Person, and is not an Affiliate of
any other Person. All of the issued and outstanding Stock of ParView is owned by
each of the shareholders and in the amounts set forth on Schedule A hereto.
Except as set forth on Schedule A, there are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which ParView may
be required to issue, sell, repurchase, convert or redeem any of its Stock or
other equity securities or any Stock or other equity securities of its
Subsidiaries ("Option Rights"). Except as set forth on Schedule A, there are no
shareholder, voting, right of first refusal or similar agreements by or among
ParView and all or any of its shareholders or other third parties. After issuing
the All American ParView Stock and giving effect to issuance of all common Stock
of ParView under all existing Option Rights (regardless of whether conversion,
exercise, issuance or the like in respect of the Option Rights is then permitted
by the terms of the relevant documents), Schedule A sets forth the percentage of
common Stock that All American would hold as of the date of such issuance of the
All American ParView Stock. All of the shares of Stock and other securities
(including, without limitation, stock options) issued by ParView prior to the
date hereof have been issued in accordance with law (including, without
limitation, federal and state securities laws) and any and all disclosures
(written or oral) made and any and all information and/or documents provided to
any purchasers of shares of Stock or other securities have been or the
statements contained therein were true, correct and complete in all material
respects and did not fail or omit to disclose or contain any material fact
necessary in order to make the disclosures or statements contained therein, in
light of the circumstances under which made, not misleading. Schedule "A"
indicates by asterisk each of the shareholders constituting the family members
of David Chessler, who hold the amounts of Stock of ParView and/or Option Rights
set forth on such Schedule.
(h) ParView has heretofore advised the All American
Parties of the sale or other disposition, and/or refinancing of all Collateral,
now or at any time heretofore existing, including without limitation, all Leases
and all of the property subject thereof, other than transfers that have occurred
in the ordinary course of business or as were permitted pursuant to the Security
Agreement.
(i) Annexed hereto as Exhibit "C" is a true and complete
list of the Persons constituting the Executive Management Team. ParView agrees
to, from time to time, promptly provide written notice to All American of any
changes in the Executive Management Team.
(j) ParView acknowledges and agrees that sales of
inventory by All American to ParView prior to the date of this Agreement were on
an "As Is - Where Is" basis, without representation or warranty of any kind
whatsoever, except for pass-throughs of component manufacturers' warranties, if
any, and solely to the extent permitted by the respective component
manufacturers of such inventory.
(k) If any third party vendor now or hereafter claims
that All American is obligated to purchase any products from or pay any
bill-back to such vendor, which purported obligation arose as a result of, or
relates to, any transaction or dealing in which All American was heretofore
involved in with ParView, ParView shall be responsible to purchase the products
in question in the ordinary course of business directly from the vendor or pay
such bill-back; provided, however, that ParView shall have no obligation
hereunder to All American with respect to ADS.
2. ParView acknowledges and agrees that each of the
representations and warranties and waivers made by ParView in this Agreement
shall survive the execution and delivery of this Agreement and all other
Transaction Documents and continue until all Obligations are Paid in Full.
3. The All American Parties hereby represent, warrant,
acknowledge and affirm the following:
(a) The All American ParView Stock is being acquired for
investment for All American's own account and not with a view to, or for resale
in connection with, any distribution or public offering thereof within the
meaning of the Securities Act of 1933 (the "Securities Act").
(b) All American acknowledges that the All American
ParView Stock acquired pursuant to this Agreement will not be registered under
the Securities Act or qualified under any state securities laws based upon the
offering and sale of such securities being exempt from registration under the
Securities Act and exempt from qualification under such state securities laws,
and that All American's reliance upon such exemptions is predicated in part upon
their representations set forth in this Section. All American acknowledges and
understands that the All American ParView Stock received under this Agreement
must be held indefinitely unless the All American ParView Stock is subsequently
registered under the Securities Act and qualified under applicable state
securities laws or exemptions from such registration or qualifications are
available. For purposes of clarification, the foregoing sentence shall not
restrict the rights of All American pursuant to Part IV, Section 7 of this
Agreement entitled "Tag Along Rights".
(c) All American covenants that in no event will it
dispose of any of the All American ParView Stock (other than in conjunction with
an effective registration statement for the All American ParView Stock under the
Securities Act) unless and until All American has furnished ParView with an
opinion of counsel reasonably satisfactory in form and substance to ParView to
the effect that such disposition will not require registration under the
Securities Act and applicable state securities laws.
(d) All American is an "accredited investor" as that term
is defined in Rule 501 of Regulation D promulgated under the Securities Act.
(e) All American (i) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment in the All American ParView Stock; and (ii) has the
ability to bear the economic risks of their investment.
(f) Each certificate representing the All American
ParView Stock shall be endorsed with the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW, AND SUCH SECURITIES MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE
SAME ARE REGISTERED AND QUALIFIED IN ACCORDANCE WITH THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, OR IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
4. ParView acknowledges and agrees that notwithstanding the
satisfaction of the Deficiency, or otherwise, it shall remain obligated for
payment and performance of the DavLeon Reimbursement Obligations in accordance
with the terms of the relevant Transaction Documents and that the Collateral
shall continue to secure such Obligations until such Obligations are Paid in
Full.
5. ParView hereby indemnifies, defends, and holds harmless the
All American Releasees, and each of them, from, against and in respect of any
and all direct or indirect damages, liabilities, obligations, claims, demands,
losses, costs and expenses (including reasonable attorneys' and paralegals' fees
and costs incurred before and at trial, at all tribunal levels, whether or not
suit is instituted, and at arbitration and in establishing this right to
indemnification) asserted against or suffered or incurred by the All American
Releasees or any of them (including, without limitation, All American and/or
AmeriCapital themselves) to the extent directly or indirectly under, caused by
or resulting from (i) a breach by ParView of any of its representations,
warranties, covenants or obligations contained in this Agreement, or any other
Transaction Document that has not been cured within 30 days written notice to
ParView by All American (provided, however, that such 30 day period shall run
concurrently with any default notice period set forth in such Transaction
Document and provided further that written notice, but no cure period, shall be
required if the breach is not curable); (ii) any claim directly or indirectly
made by a shareholder of ParView against any of the All American Releasees;
(iii) any obligation for taxes in respect of any of the Leases, whether for
sales or use taxes, documentary stamp taxes or otherwise, arising prior to the
sale of the Transferred Leases to Yamaha and relating to periods prior to July
1, 2001 or after May 1, 2002; or (iv) any claims asserted by Yamaha against any
of the All American Releasees at any time arising out of or in connection with
this Agreement, the other Transaction Documents or the Transferred Leases or in
any way related to the transactions contemplated hereby or thereby.
Nothing contained in this Agreement is intended to limit or
abrogate any right any All American Releasee may have under common law, whether
to indemnification, reimbursement, or otherwise.
ParView shall pay all amounts due from time to time in respect
of a loss indemnified for above, in cash, to All American (on behalf of the
applicable All American Releasee) within five (5) Business Days of notice of
demand of any such payment.
6. ParView shall make no payments, directly or indirectly, to any
Affiliate (or any person or entity affiliated with any officer or director of
ParView) or to any shareholder (other than All American) or non-institutional
investor to whom ParView is heretofore or hereafter indebted, whether for the
sale of goods, rendition of services, any licensing or royalty arrangements, or
otherwise, except that, so long as no Event of Default or default under this
Agreement or any other Transaction Documents shall have occurred, ParView shall
be entitled to make payments to: (i) Scorecast, Inc. in accordance with the
Distribution Agreement between ParView and Scorecast, Inc., a copy of which is
annexed hereto as Exhibit "D" (the "Scorecast Agreement"); (ii) ADS, in
accordance with the settlement agreement dated as of February 1, 2002; a copy of
which is annexed hereto as Exhibit "E" (the "ADS Settlement Agreement); (iii)
David Chessler and Jerome Chessler, as landlord, for rent for the real property
leased from it by ParView, a copy of which lease is annexed hereto as Exhibit
"F" (the "Real Property Lease"); (iv) Jerome Chessler in an amount not to exceed
$100,000 per annum pursuant to that certain Retirement Agreement (the
"Retirement Agreement") dated June 22, 2001, by and between Jerome Chessler and
Parview, a copy of which Agreement is annexed hereto as Exhibit "G"; and (iv)
Philip Kaltenbacher in connection
with the restructuring of an existing promissory note (the "Kaltenbacher Note")
in the original principal amount of $1,400,000, a copy of the existing Note is
annexed hereto as Exhibit "H"; provided, however, that, after giving effect to
such payments, in its reasonable good faith business judgment, the independent
members of the Board of Directors of ParView shall have determined that ParView
will have sufficient cash flow to pay and perform its other obligations as they
become due. ParView represents and warrants to the All American Parties that
each of the Scorecast Agreement, the Kaltenbacher Note, the Retirement Agreement
, the Real Property Lease and the ADS Settlement Agreement is a full, true and
complete copy thereof and that there are no other agreements, undertakings or
the like (monetary or otherwise) relating to such Agreements, or otherwise with
Affiliates.
7. ParView shall not, except as expressly permitted under this
Agreement, directly or indirectly, declare or pay any bonuses to, or increase
any salaries for, directors, or executive and/or management level employees, or
set aside or deposit or otherwise invest any sum for such purpose. ParView may
pay bonuses to the Executive Management Team in an aggregate amount to all such
Persons in any event not to exceed $400,000, and may grant salary increases to
members of the Executive Management Team not in excess of 7.5% per person in any
calendar year, so long as after taking into account the payment of such bonuses
and/or salary increases, ParView's net income after taxes, as determined in
accordance with generally accepted accounting principles, consistently applied
("Net Income") is greater than $100,000 for such calendar year; provided,
however, if ParView's Net Income in any calendar year, after taking into account
the payment of such bonuses, is less than or equal to $100,000, then ParView
shall not pay bonuses to the Executive Management Team in an amount exceeding
$200,000 in the aggregate; provided, further, that in any case no bonuses or
salary increases shall be paid unless (a) such bonuses and/or salary increases
are approved by the independent members of ParView's Board of Directors, and (b)
such bonuses are paid in accordance with the terms of the compensation plans for
the Executive Management Team as heretofore provided to All American and as in
effect as of the date of this Agreement. Exhibit "C" to this Agreement sets
forth the annual salary and bonus plan as of the date of this Agreement and as
of March 1, 2001 of each of the members of the Executive Management Team. The
All American Parties agree that in the case of each Team Member employed as of
the date of this Agreement, the salary cap does not apply to the particular Team
Member unless and until such Team Member's salary has been increased to the
amount as of March 1, 2001 set forth on Exhibit C. The All American Parties have
relied on the accuracy and completeness of Exhibit "C" in agreeing to the
payment of salaries and bonuses provided in this Section 6.
III. Exclusive Supplier
1. For a period of three (3) years from the date of this
Agreement (or, if earlier, the date on which all or substantially all of the
assets or stock of ParView, which shall not include the transfer of leases
contemplated by this Agreement, are purchased by Yamaha), ParView (and its
successor by merger or otherwise) shall not purchase any Display Products from
any Person other than All American, and ParView hereby grants to All American
the right to be ParView's (and its successor and respective subsidiaries)
exclusive supplier of all of the Display Products (or any other future
generation or versions hereof) used, sold or leased by ParView (or its successor
and respective subsidiaries), provided, that All American agrees to sell such
Display Products to ParView (or successors or their respective subsidiaries) at
a price equal to the then fair market price thereof for similar quantities and
on terms offered in arm's length transactions through an authorized North
American distributor by such third parties capable of then delivering the
Display Products and authorized by the manufacturer thereof to sell in North
America at such price. ParView agrees to provide to All American a written
request setting forth the price and all other relevant terms of any bona fide
offers made by unrelated third parties for Display Products. All American shall
have the right to match the terms of any bona fide offers made by any such
unrelated third parties. As used herein, the term "unrelated third parties"
shall mean suppliers that are not Affiliates of ParView and have not received
any form of remuneration other than the cash purchase price for the Display
Products set forth in the offer or request for such Products. This Part III
shall be binding upon all successors and assigns of ParView. Nothing contained
in this Part III (or otherwise in this Agreement) shall obligate All American to
sell any products or services to ParView unless All American elects to do so in
its sole and absolute discretion. All American agrees to execute any
confidentiality or nondisclosure agreements in form and substance reasonably
acceptable to All American that are required by such third parties in connection
with such disclosures (the parties acknowledge that such reasonable agreements
include standard exceptions related to previously known information, publicly
known or otherwise available information, information obtained lawfully from
other sources, and information disclosed pursuant to judicial action or legal
requirements).
2. As soon as reasonably practicable, but in no event more than
five (5) business days, after receiving a purchase request from ParView
complying with the requirements set forth in Section III(1) above, All American
shall either agree in writing to provide such Display Products in accordance
with the terms and conditions of the written request or advise ParView that it
does not wish to provide such Display Products. If All American provides written
notice to ParView that All American cannot or All American is not willing to
provide the Display Products, in a particular request or offer, or certain of
the items constituting such request or offer, ParView shall then have the right
to obtain same from the third party source to fulfill such request or offer
until such time that All American advises ParView (or its successor) in writing
that All American can or is now willing to provide such Display Products(s) to
fulfill future requests or offers, as long as ParView obtains the items upon
terms and conditions no less favorable to ParView as those set forth in the
written request from ParView to All American provided for in the preceding
paragraph. The provisions of this Part III shall not apply to Display Products
used in products previously manufactured by any entity with whom ParView enters
into a Reorganization Event after the date of this Agreement. The fact that All
American declined to fulfill a particular order shall not constitute or be
deemed to abrogate All American's rights under this Part III (2) as to any
future requests, offers, or requirements. If All American agrees to fulfill a
particular request or order and ParView does not purchase substantially all of
the quantity within the time frames specified in the request or order relied
upon by All American in granting the particular price, then All American shall
be entitled to a reasonable bill back to reflect a fair price for the quantity
actually purchased.
IV. All American ParView Stock.
1. As further material consideration and as a material inducement
for all of the All American Parties' agreements and other obligations hereunder,
including, without limitation, eliminating the Deficiency when and as
contemplated below, simultaneously with the completion of the other Buyout
Actions (as defined in Part VIII), ParView shall immediately authorize and issue
to All American 11,000,000 shares of the common stock of ParView, par value
$0.01 per share (the "All American ParView Stock").
2. So long as and to the extent that All American or any of its
affiliates is the holder of the All American ParView Stock, or any of it, David
Chessler shall be entitled to exercise any and all voting rights associated with
such Stock at the time then held by All American or its affiliate (except for
the right to approve a change in the articles, bylaws, or take any other action,
which would in any way change the rights, preferences and/or priorities of the
All American ParView Stock), regardless of whether an Event of Default shall
occur. If during the aforesaid period David Chessler dies, his voting rights
given in respect of the All American ParView Stock shall be transferred to the
Board of Directors of ParView or its designee. Notwithstanding the foregoing,
ParView shall concurrently give All American all notices given to stockholders
from time to time in connection with any matter on which a stockholder vote is
being conducted. Nothing contained in this Paragraph 2 (or otherwise) shall
prevent, hinder, limit or otherwise adversely affect in any way the ability and
right of All American or its affiliate to, at any time from and after the
issuance thereof, sell, assign, transfer, encumber, pledge or otherwise dispose
of any or all of the shares of the All American ParView Stock owned by All
American or its affiliate; it being expressly understood and agreed that
immediately upon the sale or other transfer or disposition by All American or
its affiliate of any shares of the All American ParView Stock to a third party,
(i) the voting rights granted in this paragraph 2 with respect to such shares so
sold or otherwise transferred or disposed shall automatically and fully
terminate as follows: (a) during the first two (2) years from date of this
Agreement, to the extent of and with respect to shares transferred by All
American and its affiliates in all such transactions that do not exceed fifty
percent (50%) of the aggregate number of shares initially issued to All American
pursuant to this Agreement (as adjusted as contemplated in this Agreement) , and
(b) thereafter, to the extent of and with respect to shares transferred by All
American or its affiliate in all such transactions that do not exceed sixty-six
and two thirds percent (66-2/3%) of the aggregate number of shares initially
issued to All American pursuant to this Agreement (subject to adjustment as
aforesaid); provided, further, that, notwithstanding anything to the contrary,
from and after the date that any common Stock of ParView is registered with the
Securities and Exchange Commission or otherwise is publicly traded, one hundred
percent (100%) of the All American ParView Stock may be sold or transferred, in
whole or in part, without restriction on the transferability of the
corresponding voting rights and the voting rights provided in this paragraph 2
shall automatically and fully terminate with respect to any shares so sold or
transferred. Although not a requirement to effectuate the aforesaid termination
of the voting restrictions, ParView and/or David Chessler (or his successor)
hereby agrees from time to time as and when requested by All American or its
affiliate to execute any and all instruments and other documents and to take
such other actions to evidence the full and automatic termination of the voting
rights granted in this paragraph 2 in connection with sales or other
transfers or dispositions of shares to third parties by All American or its
affiliates. The parties acknowledge that the voting rights set forth herein are
coupled with an interest, and shall not terminate upon the sale or transfer of
all of the stock of, or merger or consolidation of or with, All American and any
affiliate of All American and any third party. For purpose of this paragraph, an
"affiliate" of All American is any Person which directly or indirectly controls,
or is controlled by, or is under common control with All American, or a direct
or indirect subsidiary of All American, but shall not include any successor to
All American or any affiliate of All American by merger, consolidation or other
similar transaction. The aforesaid voting rights granted to David Chessler (or
his successor) in this Paragraph 2 are limited to voting the All American
ParView Stock at annual and special meetings of shareholders and pursuant to
written shareholder consents, as required. Nothing contained in this Paragraph 2
is intended or shall be implied to give David Chessler (or his successor) any
right or other ability to cause a change in the rights associated with the All
American ParView Stock; provided, however, that David Chessler (or his
successor) shall have the right to vote the All American ParView Stock as set
forth herein with respect to all business issues related to the operation of
ParView, and/or issues in connection with the sale of the assets and/or stock of
ParView.
ParView shall give All American written notice of any
Extraordinary Transaction, stock split or stock dividend (which notice shall
contain reasonably detailed information of the terms and conditions of the
proposed transaction) not later than the earlier of ten (10) days prior to the
stockholders' meeting called to approve such transaction, ten (10) days prior to
the record date of such transaction or event or ten (10) days prior to the
closing or occurrence of such transaction or event, whichever is earlier, and
shall also notify All American in writing of the final approval of such
transaction. Notwithstanding the foregoing, if notice is provided to the other
common stockholders (other than officers or employees of Parview in their
capacity as such) earlier than such ten day period, All American shall be
notified together with the other common stockholders.
3. Payment of Taxes. ParView will pay any and all taxes,
documentary or otherwise, that are payable with respect to the issuance or
delivery of the All American ParView Stock.
4. Information Rights. The holders of the All American ParView
Stock shall upon request from time to time be entitled to receive from ParView
such financial statements and other material financial and business information
and reports regarding ParView and/or its operations which are reasonably
requested by the holders and which ParView has prepared, has available or can
provide without material cost or expense, in addition to being entitled to
receive all such information and reports otherwise provided to any of the other
holders of ParView's common stock or otherwise required to be provided by law.
ParView agrees to provide to All American copies of any letter of intent,
contract, or any other material agreement entered into in connection with any
Extraordinary Transaction or other material transaction entered into other than
in the ordinary course of ParView's business not later than five (5) business
days following execution of any such letter of intent, contract or other
material agreement, together with (1) audited or unaudited financial statements,
as then available, in either case prepared in accordance with generally accepted
accounting principles consistently applied and certified by the President or
Chief Financial Officer of ParView, cumulative for the period beginning on the
first day of the then applicable fiscal year of ParView through the last day of
the month prior to the month in which the aforesaid letter of intent, contract
or any other material agreement(s) is to be furnished to such holders, and (2)
all pro forma financial statements prepared in the evaluation of the transaction
in question. ParView further agrees to provide information regarding any Stock
issuances by ParView. As a condition of obtaining any information not delivered
generally to other stockholders or required by law to be delivered to any
stockholders, All American agrees to execute reasonable confidentiality or
nondisclosure agreements as requested by ParView or by third parties in
connection with such disclosures (the parties acknowledge that such reasonable
agreements include standard exceptions related to previously known information,
publicly known or otherwise available information, information obtained lawfully
from other sources, and information disclosed pursuant to judicial action or
legal requirements).
5. Anti-Dilution, etc.
(a) ParView represents and warrants that as of the date
hereof, no holder of any Stock of ParView has any anti-dilution rights beyond
any statutory rights that may exist. ParView agrees that if any owner of any
Stock of ParView is in the future granted any anti-dilution rights in connection
with the Stock, so long as All American is the holder of any of the All American
ParView Stock, All American shall be granted equivalent anti-dilution rights on
the same terms. ParView further represents and warrants that as of the date
hereof, no holder of
any option, warrant, convertible debt, equity or other right to purchase any
Stock of ParView has been granted any anti-dilution rights in connection with
the Stock other than rights customarily granted in the event of any stock split,
stock dividend or similar transaction that would have the effect of treating the
optionholder as if the optionholder held common stock at the time of such
transaction (the "Customary Rights"). ParView agrees that if any holder of any
Stock or any option, warrant, convertible debt, equity or other right to
purchase any Stock of ParView is in the future granted anti-dilution rights in
connection with the Stock greater than the Customary Rights, so long as All
American is the holder of any of the All American ParView Stock, ParView shall
grant equivalent rights on the same terms to All American.
(b) Any Stock of ParView (or any options, warrants or
other rights to purchase shares of Stock of ParView) issued to Chessler, any
Affiliate or family member of Chessler, or any members of the Executive
Management Team (as defined below) other than Chessler, shall be issued at a
purchase price or exercise price that is not less than the greater of the fair
market value of such shares or the underlying shares at the time issued (as
determined by the members of the Board of Directors of ParView) or $1.00 (as
adjusted upward for any reverse stock splits or other reductions in the then
outstanding capital stock of ParView). If, in any calendar year, ParView issues
to the Executive Management Team in the aggregate more than 150,000 shares of
Stock of ParView and/or options, warrants or other rights to purchase shares of
Stock of ParView (the "Executive Management Team Limit"), then ParView shall
issue to the holders of the All American ParView Stock, at no cost, that number
of shares of Stock of ParView granted or issued to the Executive Management Team
that exceeds the Executive Management Team Limit, such securities to be issued
on the same terms and conditions as the shares of Stock of ParView and/or
options, warrants or other rights to purchase shares of Stock of ParView that
were issued to the Executive Management Team. Any shares of Stock of ParView (or
options, warrants or other rights to purchase shares of Stock of ParView) that
are issued to any persons or entities (including, without limitation direct or
indirect beneficial owners of any capital stock or subordinated debt) as of the
date of this Agreement or thereafter (other than members of the Executive
Management Team or their successors which are subject to the Executive
Management Team Limit) shall be issued at a purchase price or exercise price
that is not less than the fair market value of such shares as determined by the
members of the Board of Directors of ParView acting in good faith.
(c) ParView and Chessler represent and warrant that the
Employment Agreement attached hereto as Exhibit I (the "Employment Agreement")
is a true and complete copy of the only employment type agreement between
Chessler and ParView as of the date hereof. Chessler represents that, as of the
date hereof, there is no Good Reason, as defined in paragraph 8(f) of the
Employment Agreement, and as of the date hereof there is nothing in this
Agreement that would give rise to Chessler's right to terminate and receive the
Severance (as defined in the Employment Agreement). Notwithstanding the
provisions in the Employment Agreement to the contrary, if an Extraordinary
Transaction occurs at any time and, in connection with such Extraordinary
Transaction, Chessler shall receive, directly or indirectly, any benefits,
compensation, payments, cash, cash equivalents, covenants not to compete, stock
options, bonuses, severance and termination payments, buyouts, or any other
value or other consideration whatsoever (collectively, "Consideration"), at any
time within the first five (5) years following the date of any Extraordinary
Transaction in excess of the amounts payable under the Employment Agreement
(such applicable amount is referred to as the "Threshold Amount"), Chessler
shall pay or cause to be paid to All American: (i) one hundred percent (100%) of
all such excess amounts over the Threshold Amount constituting severance or
other termination payments or initial bonuses or up-front payments; and (ii)
fifty percent (50%) of all other Consideration. If for any calendar year David
Chessler is entitled to any type of bonus as may be allowed elsewhere in this
Agreement, in no event shall ParView pay David Chessler, or shall David Chessler
receive from ParView any type of bonus compensation that exceeds the salary
received by David Chessler for the same calendar year. The parties acknowledge
that Consideration for purposes of this paragraph does not include any payment
received by David Chessler in connection with the sale of ParView stock so long
as the amount received by or allocated to David Chessler per share of ParView
stock is the same as the amount received by or allocated to each other
stockholder of the same class and series of ParView stock per share.
6. Restrictions on Transfer. Any sale, transfer or other
disposition, whether voluntarily or by operation of law, in any transaction or
series of related transactions, of any shares of ParView Stock (a "Transfer") by
a David Chessler Affiliate (as hereinafter defined) may only be made to a bona
fide third party purchaser, in an arm's length transaction for full and fair
consideration (a "Permitted Transfer"). The applicable David Chessler Affiliate
shall notify the proposed transferee in writing of the Tag Along Rights on or
before entering into the relevant transaction documents and shall provide All
American with a copy of the notice and all such transactions
documents when issued or executed and delivered. Any and all other Transfers
shall be void, of no force or effect, and transfer no right, title or interest
in or to any of the shares underlying such Transfer to the purported transferee.
As used in this Part IV paragraphs 6, 7 and 8, the following terms shall have
the following meanings: "David Chessler Affiliate" refers individually and
collectively to each and all of the following items (i), (ii) and (iii) and each
and all combinations thereof: (i) David Chessler, and (ii) any Affiliate of
David Chessler; "Affiliate" means, with respect to a party, any person or entity
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, such party; and "Control,"
"controlling," or "controlled by" means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
party, whether through the ownership of voting securities, by contract, or
otherwise. Notwithstanding anything to the contrary contained herein, David
Chessler acknowledges and agrees that if he transfers any Stock of ParView owned
by him as of the date of this Agreement to a family member, the restrictions of
this Section 6 and of Section 7 and 8 below shall be transferred together with
such Stock and shall then become binding upon the transferee and any failure to
do so shall void such transfer. David Chessler further represents and warrants
that, except for the transfers to Linda Chessler disclosed to All American,
during the twenty four (24) month period prior to the date of this Agreement, he
has not transferred any Stock of Parview to any of his family members; provided
that the only penalty or other remedy for breach of this provision hereunder
shall be that the restrictions and provisions of Sections 6, 7 and 8 of this
Agreement shall apply to any Stock transfers that have not been so disclosed;
provided further, however, that if said restrictions and provisions cannot be
imposed then the aforesaid limitation of penalties or remedies shall not apply.
7. Tag Along Rights. Subject to the provisions of Section 6
above, if a David Chessler Affiliate desires to effect a Permitted Transfer,
then, at least thirty (30) calendar days prior to the closing of such Permitted
Transfer, David Chessler shall, by written notice, offer (the "Participation
Offer") to All American the right (but not the obligation) to sell in the
Permitted Transfer that number of shares that is the same percentage of all All
American ParView Stock then owned as the percentage of Stock being sold by the
David Chessler Affiliate(s) in relation to the aggregate number of shares of
ParView common Stock then held by all of the David Chessler Affiliates, at the
same price (the "Purchase Price") and upon the same terms and conditions and
otherwise treated the same, in substance, as the ParView common Stock proposed
to be transferred by the applicable David Chessler Affiliates (the "Tag Along
Rights"). Each and all Permitted Transfers shall be subject to such Tag Along
Rights, and no transfer by any David Chessler Affiliate shall be deemed to have
been completed, unless and until All American is paid the full Purchase Price in
accordance with the provisions of this Section 7, and no Permitted Transfer
shall be deemed to have occurred unless and until such compliance has occurred.
8. Procedures. At the end of the Time Period (if the other Buyout
Actions have occurred), ParView shall provide evidence that all Stock owned by
the David Chessler Affiliates has been legended to reflect the Tag Along Rights
contained in Section 7, in a manner satisfactory to All American. Within five
(5) business days after All American's receipt of the Participation Offer, All
American shall deliver to David Chessler a written notice specifying the number
of shares of ParView common Stock that All American desires to transfer in the
Participation Offer. At the closing of a Permitted Transfer, (i) All American
shall deliver to the third party purchaser the certificates for all shares being
transferred by All American, duly endorsed for transfer or accompanied by stock
powers duly endorsed in blank, against payment of the Purchase Price, and (ii)
David Chessler shall cause such third party purchaser to deliver to All American
such Purchase Price.
9. Effect on Non-Compliance. Any Transfer that is not in full
compliance with the provisions of the foregoing Sections 6, 7, and 8, shall be
void, of no force or effect, and transfer no right, title or interest in or to
the shares underlying such Transfer to the purported transferee.
V. Events of Default.
Each of the following shall constitute an Event of Default hereunder
and the other Transaction Documents:
(a) Any failure by ParView to observe or perform any of
the covenants, agreements, terms or conditions to be observed or performed
pursuant to this Agreement or any other Transaction Document; provided, however,
if such failure is curable, ParView shall have a period of thirty (30) days
after the earlier of (i) ParView's having actual knowledge of the occurrence of
such default or (ii) written notice from an All American Party of the occurrence
of a default to cure such failure;
(b) Any representation or warranty made by ParView herein
shall be false, misleading or incomplete in any material respect.
Upon the occurrence of an Event of Default, the All American Parties
shall have all rights and remedies, including for breach of contract, under the
Transaction Documents and applicable law.
VI. Release. ParView hereby releases and forever discharges the
All American Releasees, and each of them, of and from all actions, agreements,
damages, judgments, claims, counterclaims, and demands whatsoever, liquidated or
unliquidated, contingent or fixed, known or unknown, determined or undetermined,
at law or in equity, which ParView, has had, now has, or may have against the
All American Releasees, or any of them, for, upon or by reason of any matter,
cause or thing whatsoever from the beginning of the world to the date of this
Agreement, including, without limitation, arising out of, related to or
pertaining to the Obligations, the Transaction Documents, any prior dealings or
course of conduct, delivery or failure to deliver at all or timely of any
products or services, other Display Products or otherwise (including, without
limitation, the negotiation, closing, administration, and extension of credit
giving rise to the Obligations or the Transaction Documents, or any disputes
with any third party, or any declaration of, or actions or inactions taken or
not taken in respect of, the Existing Defaults or any other Event of Default or
defaults, or any collection or recovery efforts taken in respect of the
Obligations, or any of them). ParView acknowledges that this provision is a
material inducement for the All American Parties entering into this Agreement.
VII. Covenant Not to Sue. (a) The All American Releasees hereby
covenant and agree that none of them shall commence any litigation against
ParView, or its successors or assigns with respect to any matter in existence as
of the date hereof; provided, however, that this covenant not to sue shall not
apply to: (i) any claim against ParView with respect to any matter that is the
subject of any agreement, covenant, indemnification or representation or
warranty made by ParView in this Agreement or in any of the other Transaction
Documents; or (ii) any claim against ParView that arises out of, or in
connection with, a claim asserted by a third party against an All American
Releasee related to actions prior to the date of this Agreement; provided,
however, that any damages for which ParView is liable under this subpart shall
not include payment for any inventory received from All American for which All
American has been paid either in cash or by virtue of the settlement evidenced
by this Agreement.
(b) If Yamaha closes an acquisition of the All American
ParView stock in connection with its acquisition of ParView, All American agrees
that it shall give ParView a release as to all matters of which All American
Parties were aware of as of the date of this Agreement in form and substance
otherwise identical to the release being given by ParView to the All American
Releasees in Part VI to this Agreement; provided, that in the event any
litigation related to an indemnification claim pursuant to this Agreement or
relating to subparts (i) and (ii) of Subsection (a) above, has been filed prior
to the date of such closing, the claims related to that litigation shall not be
released.
VIII. 1. Purchase of the Transferred Leases. The All American
Parties agree that if all of the Buyout Actions occur within ten (10) Business
Days from the date of this Agreement (the "Time Period") (the occurrence of the
Buyout Actions within the Time Period being referred to herein as the
satisfaction of the "Buyout Conditions"), then the All American Parties shall
thereupon take the Responsive Actions.
As used in this Section VIII:
(a) The term "Buyout Amount" shall (i) be payable in full in
immediately available funds, and (ii) be equal to $2,031,000.
(b) The term "Buyout Actions" shall mean all of the following:
(i) All American shall have received the Buyout Amount
for application, together with the All American ParView Stock, in settlement of
the Deficiency and in satisfaction of the Obligations (other than Surviving
Obligations) on account of its security interest in the Collateral;
(ii) ParView shall have issued and delivered to All
American the All American ParView Stock for application, together with the
Buyout Amount, in lieu of cash payments in settlement of the Deficiency
and in satisfaction of the Obligations (other than the Surviving Obligations)
and on account of its security interest in the Collateral; and
(iii) All of the Transaction Documents, and the
"Transaction Documents" as defined in the Replacement Agreement, listed
on Exhibit K hereto shall have been executed and delivered by the
parties thereto;
(c) The term "Responsive Actions" means:
(i) Each of the All American Parties shall release its
security interests in, all of its right, title and interest in and to the
Transferred Leases (without recourse and without representation and warranty of
any kind all of which are expressly hereby disclaimed), and in furtherance
thereof shall provide UCC-3's releasing all interest in the Transferred Leases
and, to the extent requested by Yamaha with respect to any of the Transferred
Leases that relate to UCC-1 filings identifying All American or AmeriCapital as
an "additional secured", shall execute UCC-3 assignments of such rights (to the
extent that any rights may exist, as to which existence no representation or
warranty shall be made) with respect to such filings to Yamaha
(ii) The Deficiency shall thereupon be deemed to be
satisfied in full and All American shall deliver a written acknowledgment of
such satisfaction signed by the All American Parties; and
(iii) All American Parties and ParView will send a letter
(the "Notification Letter") (i) to each lessee under the Transferred Leases, in
the form attached hereto as Exhibit "L", directing all future payments to be
made to Yamaha pursuant to the provisions of such letter and (ii) to each lessee
under the leases described on Exhibit "M" (the "Nontransferred Leases"), in the
form attached hereto as Exhibit "N", directing all future payments to be made to
ParView pursuant to the provisions of such letter.
2. All amounts under the Transferred Leases and the
Nontransferred Leases that have been invoiced by Americapital for periods prior
to May 1, 2002 but which have not been collected by AmeriCapital as of the date
of the respective Exhibits are set forth on Exhibit B to this Agreement (for the
Transferred Leases) and on Exhibit M to this Agreement (for the Nontransferred
Leases) and are referred to as the "Transferred Leases Prior Amounts" and the
"Nontransferred Leases Prior Amounts", respectively. AmeriCapital has relied on
ParView for the information to generate such invoices as well as the invoices
for the July, August and September Invoiced Amounts and the Nontransferred
Leases September Invoiced Amounts and AmeriCapital makes no representation as to
what amounts are actually due and/or collectible. The parties acknowledge that
All American has invoiced the amounts payable under the Transferred Leases for
the months of July and August of 2002, and prior to the end of the Time Period
may have invoiced amounts payable under certain of the Transferred Leases for
September of 2002 (the "July, August and September Invoiced Amounts"). Within
five business days of the date All American receives the Buyout Amount and the
All American ParView Stock, All American agrees to remit to Yamaha all July,
August and September Invoiced Amounts that have been collected by All American
or AmeriCapital up to such date, and to the extent any July, August and
September Invoiced Amounts are received by All American or AmeriCapital after
such five day period, then the same shall be held in trust for Yamaha and All
American shall promptly remit all such amounts to Yamaha. All American confirms
that if the Buyout Actions occur within the Time Period, then All American and
AmeriCapital will not invoice any other amounts with respect to the Transferred
Leases after the first business day after the last day of the Time Period. As of
August 28, 2002, the amounts collected by All American or AmeriCapital with
respect to the July, August and September Invoiced Amounts total $59,573.55, and
are set forth on Exhibit "J" together with a true and correct copy of such
invoices.
3. The parties acknowledge prior to the date on which the Buyout
Actions occur, All American may have invoiced certain amounts payable under the
Nontransferred Leases for September, 2002 (the "Nontransferred Leases September
Invoiced Amounts"). All American agrees not to invoice any amounts payable
pursuant to the Nontransferred Leases after the date on which the Buyout Actions
occur. From and after the date on which the Buyout Actions occur (i) All
American shall promptly remit to ParView any Nontransferred Leases September
Invoiced Amounts that have been collected by All American or AmeriCapital at any
time before or after such date and any amounts so collected by All American or
AmeriCapital shall be held in trust for the benefit of ParView until paid over
by All American or AmeriCapital to ParView, (ii) ParView shall have all rights
to collect all Nontransferred Leases Prior Amounts from and after such date, and
any Nontransferred Leases Prior Amounts
collected by All American or AmeriCapital on or after such date shall be held in
trust for the benefit of ParView until paid over by All American or AmeriCapital
to ParView.
IX. Replacement Agreement.
The parties have executed the Replacement Agreement and the Transaction
Documents defined therein which do not constitute Transaction Documents under
this Agreement. If all of the Buyout Actions have not occurred by the close of
business on the last day of the Time Period, this Agreement shall be superceded,
without further action, by the Replacement Agreement and the other "Transaction
Documents," as defined therein, and each party shall perform its obligations
thereunder when and as set forth therein; provided, further, that while not
needed to give effect to the foregoing, at the request of any party hereto, the
other party(ies) shall take such additional actions as may be reasonably
requested to evidence the matters provided for therein. If the Buyout Actions
(other than any failure of All American to execute or deliver any Transaction
Document) have occurred by the close of business on the last day of the Time
Period, the Replacement Agreement and "Transaction Documents" not constituting
Transaction Documents under this Agreement shall be deemed to be void and of no
force and effect.
X. No Third Party Beneficiaries or Obligations
Nothing in this Agreement or any Transaction Document, express or
implied, is intended to or shall confer upon any person other than the parties
hereto or the All American Releasees (as specified herein) any rights, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.
Without limiting the foregoing, the parties acknowledge and agree that (i)
nothing in this Agreement shall impose any obligation on or liability of Yamaha
to any party hereto, (ii) that nothing in this Agreement shall impose any
obligation on or any liability of any party hereto to Yamaha and (iii) each
party hereto shall only look to the other parties to this Agreement for
performance of the obligations of this Agreement.
XI. Miscellaneous.
(a) Headings. Section and subsection headings in this
Agreement are for convenience of reference only and shall not govern or
influence in any manner whatsoever the interpretation of any provision hereof.
(b) Waiver. No failure of any party to exercise any power
given under this Agreement or to insist upon strict compliance with any of the
terms or conditions specified in this Agreement shall constitute a waiver of
such party's right to demand exact compliance with the terms of this Agreement.
(c) Time is of the Essence. Time is of the essence of
this Agreement and the other Transaction Documents.
(d) Execution of Agreement; etc. Each of the parties
hereto hereby acknowledges that it has been represented by independent counsel
of its choice throughout all negotiations that have preceded the execution of
this Agreement and the other documents contemplated hereby and that it has
executed the same with the consent and upon the advice of such independent
counsel. Each of the parties hereto acknowledges that no other party, or agent
or attorney of any other party, has made any promise, representation or warranty
whatsoever, express or implied, not contained herein concerning the subject
matter hereof to induce the other party to execute this Agreement and other
documents referred to herein, and each party hereto acknowledges that it has not
executed this Agreement or such other documents in reliance upon any such
promise, representation or warranty not contained herein. Each of the parties
further acknowledges that it has not executed this Agreement under any form of
duress or coercion and that it is entering into this Agreement under its own
free will believing this Agreement to be in its best interests and in the best
interest of its respective shareholders.
(e) Reinstatement of Obligations. To the extent that any
payments or transfers made to All American under this Agreement or any of the
other Transaction Documents are avoided or are required to be disgorged in any
bankruptcy or other proceeding, such amounts shall be reinstated or continue to
be effective as Obligations and secured by the Collateral, as applicable, to the
extent of such avoidance or disgorgement.
(f) Additional Actions. Each party agrees to from time to
time upon any other party's request to take such additional actions, including,
without limitations, the execution and delivery of any instruments and
documents, reasonably necessary or desirable in the opinion of any party to
effectuate the provisions and spirit of this Agreement and the other Transaction
Documents.
(g) Survival. The representations, warranties, covenants
and agreements contained in this Agreement, and in any agreements, certificates
or other instruments delivered pursuant to this Agreement, shall survive the
execution, delivery and performance of this Agreement and the other Transaction
Documents and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any party or of the actual or constructive
knowledge by any party of any inaccuracy or breach thereof.
(h) Attorneys' Fees, etc. ParView hereby expressly agrees
that each of the All American Parties is entitled to collect, and that ParView
shall pay, all costs and expenses, including attorneys' fees and costs, incurred
by either of them from and after the date of this Agreement in connection with
(i) enforcing its rights under or in connection with this Agreement or any of
the other Transaction Documents; (ii) its collection efforts in respect of the
Obligations; enforcing any judgments to be entered against ParView; (iii)
enforcing, perfecting or protecting its rights in or in connection with any
bankruptcy or other proceeding; or (iv) as otherwise provided in this Agreement
or in the other Transaction Documents.
(i) No Novation; Ratification. This Agreement is not a
novation of the Security Agreement or other existing Transaction Documents
except as expressly set forth in this Agreement. The parties agree that, except
as modified herein, all terms, agreements, conditions, rights and obligations
under the Security Agreement and all other Transaction Documents are hereby
reaffirmed and shall otherwise remain in full force and effect as originally
written and agreed. The Transaction Documents, including, without limitation,
this Agreement and any other Transaction Document entered into in connection
herewith shall be construed to give the All American Parties the greatest
possible cumulative rights and remedies; and should there be any apparent
conflict between this Agreement, the Security Agreement or any other Transaction
Document, this principle of construction shall apply.
(j) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered personally
or by facsimile transmission, in either case with receipt acknowledged, or the
earlier of five (5) days after being sent by registered or certified mail,
return receipt requested and postage prepaid or actual delivery by such mail, or
one day after being sent by overnight courier:
(i) If to either of the All American Parties to:
All American Semiconductor, Inc.
16115 N.W. 52nd Avenue
Miami, Florida 33014
Attention: Mr. Howard Flanders
Facsimile No.: (305) 624-5258
Telephone No.: (305) 626-4149
with a copy to:
Bruce M. Goldberg, Chief Executive Officer
All American Semiconductor, Inc.
230 Devcon Drive
San Jose, California 95112
Facsimile No.: (408) 437-8984
Telephone No.: (408) 437-4631
with a copy to:
Bilzin Sumberg Dunn Baena Price & Axelrod LLP
2500 First Union Financial Center
200 South Biscayne Boulevard
Miami, Florida 33131
Attention: Alan D. Axelrod, Esq.
Robert M. Siegel, Esq.
Facsimile No.: (305) 374-7593
Telephone No.: (305) 374-7580
(ii) If to ParView:
1856 Apex Road
Sarasota, Florida 34240
Attn: Mr. David Chessler
Facsimile: (941) 379-5206
Telephone No.: (888) 727-8439
with a copy to:
Trenam Kemker
101 E. Kennedy Boulevard
Suite 2700
Tampa, Florida 33602
Attn: Nelson T. Castellano, Esq.
Facsimile: (813) 229-6553
Telephone No.: (813) 223-7474
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section.
(k) Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts or
counterpart signature pages have been signed by each of the parties hereto and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart or counterpart signature page. A facsimile signature
to this Agreement, the Replacement Agreement, the Transaction Documents and all
other documents in connection herewith, shall have the same force and effect as
an original signature hereto.
(l) Entire Agreement. This Agreement and the Transaction
Documents, including the Exhibits constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
(m) Binding Effect, Benefits, Assignments. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns; nothing in this Agreement,
expressed or implied, is intended to confer on any other Person, other than the
parties hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement. This
Agreement and ParView's rights, benefits and obligations hereunder may not be
assigned by ParView by operation of law or otherwise, including in any merger or
other Extraordinary Transaction of ParView unless in the case of a merger or
other Reorganization Event, the other party(ies) in the merger or other
Extraordinary Transaction acknowledge the validity, priority, and extent of the
All American Parties' security interests and liens in and to the Collateral and
their other rights and benefits hereunder upon documentation satisfaction to the
All American Parties.
(n) No Partnership or Joint Venture. This Agreement shall
not be construed to create between the All American Parties, or either of them,
and ParView, or their respective successors or permitted assigns, the
relationship of principal and agent, joint venturers, partners or any other
similar relationship, the existence of which is hereby expressly denied by the
All American Parties and ParView. Neither the All American Parties nor ParView
shall have the right to bind or contract for the other in any manner or
situation whatsoever nor shall either of them be liable to any third party in
any way or manner whatsoever for any engagement, obligation, contract,
representation, or transaction, or for any negligent act or omission to act, of
the other, except as expressly provided herein.
(o) Severability. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void, invalid or unenforceable, the
remainder of this Agreement will continue in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto. In that
regard, the parties request that any court interpret this Agreement and the
provisions hereof as broadly as possible to give the maximum effect and
enforceability to the provisions hereof. The parties further agree to replace
such illegal, void, invalid or unenforceable provision of this Agreement with a
legal, valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such illegal, void,
invalid or unenforceable provision.
(p) Remedies Cumulative. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby or
by law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
(q) Governing Law; Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida,
without regard to conflicts of law. Subject to subsection (t) below, each of the
parties hereto irrevocably consents to the exclusive jurisdiction and venue of
any court located within Miami-Dade County in the State of Florida in connection
with any matter based upon or arising out of this Agreement or the matters
contemplated herein or therein, agrees that process may be served upon them in
any manner authorized by the laws of the State of Florida for such persons and
waives and covenants not to assert or plead any objection which they might
otherwise have to such jurisdiction and venue and such process.
(s) Rules of Construction. The parties hereto agree that
they have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such
agreement or document.
(t) Arbitration.
(i) In the event of a dispute hereunder or
relating to the transactions contemplated hereby, including under or with
respect to any of the Transaction Documents and other agreements to be executed
and delivered pursuant hereto, arbitration will be the sole and exclusive method
of resolving the dispute, except that a party may seek a preliminary injunction,
temporary restraining order or other preliminary judicial relief if, in its
judgment, the action is necessary to avoid irreparable damage or harm and either
All American Party may avail itself of judicial process in foreclosing on any
lien or security interest granted under any of the Transaction Documents.
(ii) The arbitrator will consist of any person who
is mutually acceptable to the parties to the dispute. However, if the parties
are unable to agree on a single arbitrator, an arbitration panel of three
arbitrators will be selected as provided below. Each party shall select one
arbitrator and the third arbitrator shall be selected by the two chosen by the
parties. Every arbitrator must be independent (not a party to this Agreement or
a lawyer or relative to a party to this Agreement or an agent, officer,
director, employee or shareholder of a party to or a relative of any of those
Persons) without any economic or financial interest of any kind in the outcome
of the arbitration. Each arbitrator's conduct will be governed by rules of the
American Arbitration Association. The arbitration will be conducted in Miami,
Florida, in accordance with the rules of the American Arbitration Association
and the discovery rules of the Florida Rules of Civil Procedure. The arbitrators
shall not be empowered to award punitive damages. The arbitrator's or
arbitrators' fees shall be paid by ParView.
(iii) The arbitrator or arbitration panel by
majority thereof shall render its decision in writing within thirty (30) days
after the arbitration or conclusion of the hearing. The decision of the
arbitrator or arbitration panel will be final, binding and conclusive as to all
the parties and the decision of the arbitrator or arbitration panel will not be
subject to appeal, review or re-examination, except for fraud, perjury, manifest
clerical error, or evident partiality or misconduct by an arbitrator that
prejudices the rights of any party to the arbitration. Any party may enforce the
arbitration award in any state or federal court located in Miami-Dade County,
Florida.
(iv) Each of the All American Parties shall be
entitled to recover from ParView all of its costs and expenses incurred in
connection with the enforcement of its rights hereunder or thereunder, including
reasonable attorneys' and paralegals' fees and costs incurred before and at
arbitration, at any other proceeding, at all tribunal levels and whether or not
suit or any other proceeding is brought.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first set forth.
ALL AMERICAN SEMICONDUCTOR, INC., a Delaware
corporation
By: /s/ Howard L. Flanders
-----------------------------------------
Name: Howard L. Flanders
---------------------------------------
Title: EVP & CFO
--------------------------------------
AMERICAPITAL, LLC, a Nevada limited liability
company
By: All American Semiconductor, Inc., a
Delaware corporation, its member
By: /s/ Howard L. Flanders
----------------------------------
Name: Howard L. Flanders
--------------------------------
Title: EVP & CFO
-------------------------------
PARVIEW, INC., a Nevada corporation
By: /s/ David M. Saslow
------------------------------------------
Name: David M. Saslow
----------------------------------------
Title: Exec. VP
---------------------------------------
By: /s/ David C. Chessler
------------------------------------------
David C. Chessler, solely as to Paragraphs
6 & 7 of Part II and Paragraphs 2, 5(b) &
(c), 6, 7, 8 and 9 of Part IV of this
Agreement
[Acknowledgments are on the following pages.]
STATE OF FLORIDA )
) SS:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 18th
day of Sept., 2002, by Howard Flanders, as EVP/CFO of All American
Semiconductor, Inc., a Delaware corporation, on behalf of said corporation.
He/She is personally known to me or has produced a State of ____________
driver's license as identification.
Sign Name: /s/ MAGDALENA MEDEL
------------------------------
Print Name: Magdalena Medel
-----------------------------
My Commission Expires: NOTARY PUBLIC
Serial No. (none, if blank):
-------
[NOTARY SEAL]
[Acknowledgments continue on the following pages.]
STATE OF FLORIDA )
) SS:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 18th
day of Sept., 2002, by Howard Flanders, as EVP/CFO of All American
Semiconductor, Inc., a Delaware corporation, as the member of AmeriCapital LLC,
a Nevada limited liability company. He/She is personally known to me or has
produced a State of ____________ driver's license as identification.
Sign Name: /s/ MAGDALENA MEDEL
------------------------------
Print Name: Magdalena Medel
-----------------------------
My Commission Expires: NOTARY PUBLIC
Serial No. (none, if blank):
-------
[NOTARY SEAL]
[Acknowledgments continue on the following pages.]
STATE OF )
------------
) SS:
COUNTY OF )
------------
The foregoing instrument was acknowledged before me this 17
day of September, 2002, by David M. Saslow, as ____________________ of ParView,
Inc., a Nevada corporation, on behalf of said corporation. He/She is personally
known to me or has produced a State of Florida driver's license as
identification.
Sign Name: /s/ AMY J. CROSHAW
------------------------------
Print Name: Amy J. Croshaw
-----------------------------
My Commission Expires: NOTARY PUBLIC
Serial No. (none, if blank):
-------
[NOTARY SEAL]
[Acknowledgments continue on the following page.]
STATE OF )
------------
) SS:
COUNTY OF )
------------
The foregoing instrument was acknowledged before me this 17
day of September, 2002, by David C. Chessler, individually. He is personally
known to me or has produced a State of Florida driver's license as
identification.
Sign Name: /s/ AMY J. CROSHAW
------------------------------
Print Name: Amy J. Croshaw
-----------------------------
My Commission Expires: NOTARY PUBLIC
Serial No. (none, if blank):
-------
[NOTARY SEAL]
LIST OF EXHIBITS
Exhibit "A" - Replacement Agreement
Exhibit "B" - Transferred Leases (includes applicable "Prior
Amounts" - see Part VIII)
Exhibit "C" - Executive Management Team
Exhibit "D" - Scorecast Agreement
Exhibit "E" - ADS Settlement Agreement
Exhibit "F" - Real Property Lease
Exhibit "G" - Retirement Agreement
Exhibit "H" - Kaltenbacher Note
Exhibit "I" - Employment Agreement
Exhibit "J" - July, August and September Invoiced Amounts as
of Date of Agreement
Exhibit "K" - List of Documents to be Executed
Exhibit "L" - Notification Letter (Transferred Leases)
Exhibit "M"- Nontransferred Leases (includes applicable "Prior
Amounts" - see Part VIII)
Exhibit "N" - Notification Letter (Nontransferred Leases)
Exhibit "O"- Nontransferred Leases - September Invoices