10.20.4
STOCK PURCHASE AGREEMENT
AGREEMENT made March 26, 1999, between Aura Systems, Inc. ("Seller"), a
Delaware corporation with a place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Yoshikazu Masayoshi, Sadao Masayoshi, Sachie Masayoshi and
Kazuaki Masayoshi (jointly and severally, "Purchaser"), each having an address
c/o Sadao Masayoshi, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, Seller owns Two Hundred Eighty (280) shares (the "Shares") of
voting common stock, (Y)50,000 par value per share, of MYS ▇ ▇., a Japanese
corporation (the "Corporation"); and
WHEREAS, Purchaser desires to purchase the Shares from Seller, and
Seller desires to sell the Shares to Purchaser, pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Sale of the Shares.
1.1 In General. Seller hereby sells to Purchaser, and
Purchaser hereby purchases from Seller, the Shares for the price and upon the
terms and conditions set forth in this Agreement.
1.2 Exclusion of Linaeum Loudspeaker Tweeters. Notwithstanding
anything in this Agreement to the contrary, Seller will retain all the
intellectual properties concerning and relating to "Linaeum" loudspeaker
"tweeters" (the "Linaeum Technology").
1.2.1 In keeping with such retention, the Corporation has
previously assigned the Linaeum Technology to Seller. In furtherance
of such assignment, the Corporation and Purchaser each further agrees
at any time and from time to time to execute such other documents and
take such other actions as may be necessary or desirable (as
determined in Seller's reasonable judgment) to perfect, confirm or
evidence Seller's ownership of the Linaeum Technology.
1.2.2 The Corporation, however, is hereby granted,
conditioned on Purchaser's performance of their obligations
pursuant to this Agreement, a fully-paid, perpetual,
non-exclusive license from Seller for the manufacture, sale and
distribution of the Linaeum Technology for OEM channels.
1.2.3 For purposes of clarification, the parties and the
Corporation acknowledge and agree that the intellectual
properties concerning or relating to NRT have at all times been,
and shall continue to be, the exclusive property of Seller, and
no license or other rights with respect to such properties has
been or is hereby granted to the Corporation.
2. Purchase Price/Assumption of Liabilities:
2.1 Purchase Price. The aggregate cash consideration (the
"Price") to be paid by Purchaser for the Shares is $4,200,000, plus interest as
provided in this section 2. The Price shall be paid as follows:
2.1.1 First Installment By April 15 I999. $1,000,000, without interest, to be
paid in lawful funds of the United States on or before April 15, 1999, which
obligation is evidenced by a promissory note being executed and delivered
simultaneously with this Agreement.
2.1.2 Subsequent Installments. $3,200,000, with interest, to
be paid in lawful funds of the United States in twelve (12) equal
monthly installments of $290,000 each (principal and interest)
commencing on May 15, 1999 and continuing through April 15, 2000,
which obligation is evidenced by a promissory note being executed
and delivered simultaneously with this Agreement.
2.2 Assumption of Liabilities. As additional consideration for
the Shares, Purchaser and the Corporation agree to assume all liabilities
accruing from the Corporation or the operation of its business from March 1,
1996 through the date of this Agreement (including, but not limited to, any and
all liabilities arising out of or relating to that certain judgment against
defendants in an action entitled ▇▇▇▇▇, et. al v. Aura Systems Inc., et al in
the Circuit Court of the State of Oregon bearing case No. 9903-(12302), and each
Purchaser and the Corporation agree, jointly and severally, to indemnify and
hold Seller harmless from and against any and all such liabilities.
3. Security.
3.1 Escrow. To secure payment of the Price as well as the
performance of the other obligations of Purchaser pursuant to this Agreement,
the Shares are being delivered to Wolf Haldenstein ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP (the
"Escrow Agent"), to be held in escrow pursuant to that certain Escrow Agreement
(the "Escrow Agreement") executed simultaneously with the execution of this
Agreement. To accomplish such delivery, Purchaser will deliver to the Escrow
Agent the certificate(s) for the Shares together with stock power(s) executed in
blank. Also being held in this escrow are blank dated letters of resignation
from each Purchaser and blank dated letters from the Corporation to its banks.
3.2 Remedies. In the event of any default, Seller shall have a
right of action for full performance against each Purchaser jointly and
severally, and shall not be required to first pursue any remedies available
pursuant to the Escrow Agreement.
4. Deliveries at Closing.
4.1 Delivery of the Shares. Seller has simultaneously herewith
delivered the Shares to Purchaser. To accomplish such delivery, Seller has
tendered the certificate for the Shares together with the necessary stock power.
4.2 Deliveries of Escrow Agreement and Escrow Items. Seller,
Purchaser and the Escrow Agent have simultaneously herewith executed and
delivered the Escrow Agreement among one another and the appropriate parties
have delivered to the Escrow Agent the items to be held in escrow as described
in section 3 and the Escrow Agreement.
5. Additional Terms and Conditions.
5.1 Conduct of Business. From and after the date of this
Agreement, and continuing until receipt by Seller of the full Price, the
Corporation will conduct its business only in the ordinary course. Without
limiting the generality of the prior sentence, the Corporation agrees that
during the described period it will not dispose of, transfer, assign or encumber
any asset or take any other action with respect to any matter outside of the
ordinary course of business nor will it pay dividends or otherwise make
distributions to its shareholders.
5.2 Appointment of Representative Director. From and after the
date of this Agreement, and continuing until receipt by Seller of the full
Price, Seller shall have the right to appoint one Representative Director of the
Corporation. Each Purchaser agrees to vote the Shares owned by him in favor of
the election of the Representative Director designated by Seller.
5.3 Confidentiality. Seller, on one hand, and Purchaser, on
the other hand, each agree that this Agreement and its contents shall be
maintained in confidence and that neither this Agreement nor its contents shall
be disclosed to any third parties, except that disclosure may be made on a "need
to know" basis to each party's counsel, accountants, shareholders, potential
financing sources and investment bankers, provided that such third parties in
turn agree to retain the disclosed information in confidence.
5.4 Public Announcements. Neither party shall, without the
prior written consent of the other party, make any public release of information
regarding the matters contained in or contemplated by this Agreement, except (1)
each party may communicate with its employees, customers, suppliers, lenders,
lessors, shareholders and other particular groups as may be legally required or
necessary for an appropriate business purpose and not inconsistent with the best
interests of the other party or the prompt performance of the obligations
contemplated by this Agreement and (2) as required by law. Neither party shall
issue any press releases or similar announcement regarding this Agreement or the
transactions contemplated by this Agreement without the prior written approval
of the other party which approval shall not be unreasonably withheld or delayed.
5.5 Expenses of the Transaction. Each party, for its own
behalf, shall be solely responsible for and shall bear all of its own expenses,
including, but not limited to expenses of counsel, accountants and other
advisers, incurred at any time in connection with the transactions contemplated
by this Agreement.
6. Representations.
6.1 Seller. Seller represents and warrants to Purchaser that:
6.l.1 It has full power and authority to execute, deliver
and perform this Agreement, and this Agreement is binding upon
it.
6.1.2 No brokers, finders or agents, were involved in
connection with this Agreement.
6.2 Purchaser. Purchaser represents and warrants to Seller that:
6.1.2 They each have full power and authority to
execute, deliver and perform this Agreement, and this Agreement is binding upon
each of them.
6.2.2 Each of them is fully familiar with the business
and operations of the Corporation, including, but not
limited to, the business and operations of its subsidiaries
and affiliates, has made such investigation of the
Corporation as he has deemed advisable and believes that the
Price is fair and reasonable. Each of them understands and
acknowledges that there are no representations being made by
Seller with respect to the Corporation, its subsidiaries or
affiliates.
6.2.3 No brokers, finders or agents were involved in
connection with this Agreement.
6.3 Survival. The representations, warranties and covenants
contained in this Agreement, including, but not limited to, those set forth in
section 5 and this section 6, shall survive the closing. Each party hereby
agrees to indemnify and hold harmless the other party from and against any loss,
liability or expense (including, without limitation, reasonable attorneys fees)
which such other party may incur due to the breach of any representation,
warranty or covenant of the indemnifying party.
7. Governing Law/Consent to Jurisdiction.
7.1 Governing Law. This Agreement has been made and entered
into in the State of California and shall be governed by and construed and
enforced in accordance with the internal substantive laws of the State of
California, without regard to principles of conflicts of laws.
7.2 Consent to Jurisdiction. The parties irrevocably consent
to the jurisdiction of the courts of the State of California (and the Federal
courts having jurisdiction in the State of California) for purposes of any
judicial proceeding which may be instituted in connection with any matter
arising under or relating to this Agreement.
8. Miscellaneous.
8.1 Captions. Headings contained in this Agreement have been
inserted for reference purposes only and shall not be construed as part of this
Agreement.
8.2 Entire Agreement. This Agreement represents the entire
agreement between Seller and Purchaser regarding the subject matter hereof, and
supercedes any and all prior understandings, whether oral or written, with
respect thereto, including, but not limited to, that certain binding letter of
intent dated March 19, 1999. This Agreement cannot be modified or terminated,
nor may any of its provisions be waived, except by a written instrument signed
by Seller and Purchaser. There are no representations, warranties or covenants
except as expressly set forth in this Agreement.
8.3 Notices. Any notice or other communication given or made
pursuant to this Agreement must be in writing and shall be delivered to the
person to whom intended at the address set forth above (or at such other address
as such person may designate by proper notice) by personal delivery, by
telecopier, by nationally recognized courier (Federal Express, DHL, etc.) or by
certified or registered mail, postage prepaid, and shall be deemed given when
personally delivered or sent by telecopier or two (2) business days after
deposit with a courier or five (5) business days after mailing.
8.4 Severability. This Agreement shall be enforced to the
fullest extent permitted under applicable law and with each of its provisions
regarded as severable.
8.5 Rights and Remedies Cumulative. The rights and remedies of
the parties pursuant to this Agreement and under applicable law shall be
cumulative.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SELLER: PURCHASER:
AURA SYSTEMS, INC.
By:
Name: Yoshikazu Masayoshi
Title:
Sadao Masayoshi
Sachie Masayoshi
Kazuaki Masayoshi
AGREED TO:
MYS K.K.
By:
Name:
Title: