SECURITY AGREEMENT
(ONKYO AMERICA, INC.)
THIS SECURITY AGREEMENT (this "Agreement") dated as of August 31, 2000,
is among ONKYO AMERICA, INC., an Indiana corporation (together with its
successor, and assigns, the "Company"); the other persons or entities which from
time to time become parties hereto as debtors (collectively, including the
Company, the "Debtors" and individually each a "Debtor"); and GMAC BUSINESS
CREDIT, LLC, a Delaware limited liability company ("Agent").
W I T N E S S E T H:
WHEREAS, Onkyo Acquisition Corporation, an Indiana corporation
("Onkyo"), entered into a Credit Agreement dated as of August 31, 2000 (as
amended or otherwise modified from time to time, the "Credit Agreement") with
the Agent and the lenders party thereto ("Lenders"), pursuant to which the
Lenders agreed to make loans to Onkyo;
WHEREAS, Onkyo intends to merge with and into the Company and the
Company will be the surviving entity (the "Merger"); and
WHEREAS, pursuant to Section 10.11 of the Credit Agreement and certain
other provisions thereof, the Merger requires the consent of the Agent, which
consent the Agent is unwilling to give without the Company (who will be assuming
all of Onkyo's rights, duties and liabilities under the Credit Agreement and the
related Loan Documents in connection with the Merger) entering into this
Agreement.
NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Company under or in
connection with the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1) Definitions. When used herein, (a) the terms Certificated Security, Chattel
Paper, Deposit Account, Document, Equipment, Financial Asset, Fixture,
Goods, Inventory, Instrument, Investment Property, Security, Security
Entitlement and Uncertificated Security have the respective meanings
assigned thereto in the UCC (as defined below); (b) capitalized terms which
are not otherwise defined have the respective meanings assigned thereto in
the Credit Agreement; and (c) the following terms have the following
meanings (such definitions to be applicable to both the singular and plural
forms of such terms):
2) Account Debtor means the party who is obligated on or under any Account
Receivable, Contract Right or General Intangible.
3) Account Receivable means, with respect to any Debtor, any right of such
Debtor to payment for goods sold or leased or for services rendered. 4)
Assigned Agreements means, with respect to any Debtor, all of such Debtor's
right, title and interest in and to each of the agreements listed on
Schedule VI hereto, in each case as such agreements may be amended or
otherwise modified from time to time.
5) Assignee Deposit Account - see Section 4.
6) Collateral means, with respect to any Debtor, all property and rights of
such Debtor in which a security interest is granted hereunder.
7) Computer Hardware and Software means, with respect to any Debtor, all of such
Debtor's rights (including rights as licensee and lessee) with respect to (i)
computer and other electronic data processing hardware, including all integrated
computer systems, central processing units, memory units, display terminals,
printers, computer elements, card readers, tape drives, hard and soft disk
drives, cables, electrical supply hardware, generators, power equalizers,
accessories, peripheral devices and other related computer hardware; (ii) all
software programs designed for use on the computers and electronic data
processing hardware described in clause (i) above, including all operating
system software, utilities and application programs in whatsoever form (source
code and object code in magnetic tape, disk or hard copy format or any other
listings whatsoever); (iii) any firmware associated with any of the foregoing;
and (iv) any documentation for hardware, software and firmware described in
clauses (i), (ii) and (iii) above, including flow charts, logic diagrams,
manuals, specifications, training materials, charts and pseudo codes.
8) Contract Right means, with respect to any Debtor, any right of such Debtor to
payment under a contract for the sale or lease of goods or the rendering of
services, which right is at the time not yet earned by performance.
9) Default means the occurrence of: (a) any Unmatured Event of Default under
Section 12.1.1 or 12.1.4 of the Credit Agreement; or (b) any Event of Default.
General Intangibles means, with respect to any Debtor, all of such Debtor's
"general intangibles" as defined in the UCC and, in any event, includes (without
limitation) all of such Debtor's trademarks, trade names, patents, copyrights,
trade secrets, customer lists, inventions, designs, software programs, mask
works, goodwill, registrations, licenses, franchises, tax refund claims,
guarantee claims, security interests and rights to indemnification.
10) Intellectual Property means all past, present and future: trade secrets and
other proprietary information; trademarks, service marks, business names,
designs, logos, indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights; unpatented inventions (whether or not
patentable); patent applications and patents; industrial designs, industrial
design applications and registered industrial designs; license agreements
related to any of the foregoing and income therefrom; books, records, writings,
computer tapes or disks, flow diagrams, specification sheets, source codes,
object codes and other physical manifestations, embodiments or incorporations of
any of the foregoing; the right to ▇▇▇ for all past, present and future
infringements of any of the foregoing; and all common law and other rights
throughout the world in and to all of the foregoing.
11) Liabilities means, as to each Debtor, all obligations (monetary or
otherwise) of such Debtor under the Credit Agreement, any Note, any other Loan
Document or any other document or instrument executed in connection therewith
and, in the case of the Company, all Hedging Obligations owed to Agent, if any,
in each case howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due.
12) Non-Tangible Collateral means, with respect to any Debtor, collectively,
such Debtor's Accounts Receivable, Contract Rights and General Intangibles.
13) UCC means the Uniform Commercial Code as in effect in the State of Illinois
on the date of this Agreement; provided that, as used in Section 8 hereof, "UCC"
shall mean the Uniform Commercial Code as in effect from time to time in any
applicable jurisdiction.
14) Grant of Security Interest. As security for the payment of all Liabilities,
each Debtor hereby assigns to the Agent, and grants to the Agent, a continuing
security interest in, the following, whether now or hereafter existing or
acquired:
15) All of such Debtor's:
a) Accounts Receivable;
b) Assigned Agreements, including, without limitation, (i) all
rights of such Debtor to receive monies due and to become due
under or pursuant to the Assigned Agreements, (ii) all rights
of such Debtor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Debtor for damages arising
out of or for breach or default under the Assigned Agreements
and (iv) the right of such Debtor to terminate the Assigned
Agreements, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder;
c) Certificated Securities;
d) Chattel Paper;
e) Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties,
service contracts, program services, test rights, maintenance
rights, support rights, improvement rights, renewal rights and
indemnifications, and any substitutions, replacements,
additions or model conversions of any of the foregoing;
f) Contract Rights;
g) Deposit Accounts;
h) Documents;
i) Financial Assets;
j) General Intangibles;
k) Goods (including all of its Equipment, Fixtures and
Inventory), and all accessions, additions, attachments,
improvements, substitutions and replacements thereto and
therefor;
l) Instruments;
m) Intellectual Property;
n) Investment Property;
0) money (of every jurisdiction whatsoever);
p) Security Entitlements;
q) Uncertificated Securities; and
to the extent not included in the foregoing, other personal property of any kind
or description; together with all books, records, writings, data bases,
information and other property relating to, used or useful in connection with,
or evidencing, embodying, incorporating or referring to any of the foregoing,
and all proceeds, products, offspring, rents, issues, profits and returns of and
from any of the foregoing; provided that to the extent that the provisions of
any lease or license of Computer Hardware and Software or Intellectual Property
expressly prohibit (which prohibition is enforceable under applicable law) the
assignment thereof, and the grant of a security interest therein, such Debtor's
rights in such lease or license shall be excluded from the foregoing assignment
and grant for so long as such prohibition continues, it being understood that
upon request of the Agent, such Debtor will in good faith use reasonable efforts
to obtain consent for the creation of a security interest in favor of the Agent
in such Debtor's rights under such lease or license.
16. Warranties. Each Debtor warrants that: (i) no financing statement (other
than any which may have been filed on behalf of the Agent or in connection with
liens expressly permitted by the Credit Agreement ("Permitted Liens")) covering
any of the Collateral is on file in any public office; (ii) such Debtor is and
will be the lawful owner of all Collateral, free of all liens and claims
whatsoever, other than the security interest hereunder and Permitted Liens, with
full power and authority to execute this Agreement and perform such Debtor's
obligations hereunder, and to subject the Collateral to the security interest
hereunder; (iii) all information with respect to Collateral and Account Debtors
set forth in any schedule, certificate or other writing at any time heretofore
or hereafter furnished by such Debtor to the Agent is and will be true and
correct in all material respects as of the date furnished; (iv) such Debtor's
chief executive office and principal place of business are as set forth on
Schedule I hereto (and such Debtor has not maintained its chief executive office
and principal place of business at any other location at any time after January
1, 2000; (v) each other location where such Debtor maintains a place of business
is set forth on Schedule II hereto; (vi) except as set forth on Schedule III
hereto, such Debtor is not now known and during the five years preceding the
date hereof has not previously been known by any trade name; (vii) except as set
forth on Schedule III hereto, during the five years preceding the date hereof
such Debtor has not been known by any legal name different from the one set
forth on the signature pages of this Agreement nor has such Debtor been the
subject of any merger or other corporate reorganization; (viii) Schedule IV
hereto contains a complete listing of all of such Debtor's Intellectual Property
which is subject to registration statutes; (ix) such Debtor is not in default
under any Assigned Agreement, and, to the knowledge of such Debtor, neither such
Debtor nor any party to an Assigned Agreement with such Debtor is in default
thereunder or has a claim or defense thereunder or relating thereto against such
party or such Debtor, respectively; (x) such Debtor is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation; (xi) the execution and delivery of this Agreement and the
performance by such Debtor of its obligations hereunder are within such Debtor's
corporate powers, have been duly authorized by all necessary corporate action,
have received all necessary governmental approval (if any shall be required),
and do not and will not contravene or conflict with any provision of law or of
the charter or by-laws of such Debtor or of any material agreement, indenture,
instrument or other document, or any material judgment, order or decree, which
is binding upon such Debtor; (xii) this Agreement is a legal, valid and binding
obligation of such Debtor, enforceable in accordance with its terms, except that
the enforceability of this Agreement may be limited by bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law); and (xiii) such Debtor is in compliance
with the requirements of all applicable laws (including the provisions of the
Fair Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which would reasonably be expected to result
in a Material Adverse Effect.
17. Collections, etc. Until such time during the existence of a Default as the
Agent shall notify such Debtor of the revocation of such power and authority,
each Debtor (a) may, in the ordinary course of its business, at its own expense,
sell, lease or furnish under contracts of service any of the Inventory normally
held by such Debtor for such purpose, use and consume, in the ordinary course of
its business, any raw materials, work in process or materials normally held by
such Debtor for such purpose, and use, in the ordinary course of its business
(but subject to the terms of the Credit Agreement), the cash proceeds of
Collateral and other money which constitutes Collateral, (b) will, at its own
expense, endeavor to collect, as and when due, all amounts due under any of the
Non-Tangible Collateral, including the taking of such action with respect to
such collection as the Agent may reasonably request in writing or, in the
absence of such request, as such Debtor may deem advisable, and (c) may grant,
in the ordinary course of business, to any party obligated on any of the
Non-Tangible Collateral, any rebate, refund or allowance to which such party may
be lawfully entitled, and may accept, in connection therewith, the return of
Goods, the sale or lease of which shall have given rise to such Non-Tangible
Collateral. The Agent, however, may, at any time that a Default exists, whether
before or after any revocation of such power and authority or the maturity of
any of the Liabilities, notify any parties obligated on any of the Non-Tangible
Collateral to make payment to the Agent of any amounts due or to become due
thereunder and enforce collection of any of the Non-Tangible Collateral by suit
or otherwise and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby. Upon the
written request of the Agent during the existence of a Default, each Debtor
will, at its own expense, notify any or all parties obligated on any of the
Non-Tangible Collateral to make payment to the Agent of any amounts due or to
become due thereunder.
18. Upon written request by the Agent during the existence of a Default, each
Debtor will forthwith, upon receipt, transmit and deliver to the Agent, in the
form received, all cash, checks, drafts and other instruments or writings for
the payment of money (properly endorsed, where required, so that such items may
be collected by the Agent) which may be received by such Debtor at any time in
full or partial payment or otherwise as proceeds of any of the Collateral.
Except as the Agent may otherwise consent in writing, any such items which may
be so received by any Debtor will not be commingled with any other of its funds
or property, but will be held separate and apart from its own funds or property
and upon express trust for the Agent until delivery is made to the Agent. Each
Debtor will comply with the terms and conditions of any consent given by the
Agent pursuant to the foregoing sentence.
19. During the existence of a Default, all items or amounts which are delivered
by any Debtor to the Agent on account of partial or full payment or otherwise as
proceeds of any of the Collateral shall be deposited to the credit of a deposit
account (each an "Assignee Deposit Account") of such Debtor with Agent (or
another financial institution selected by the Agent) over which the Agent has
sole dominion and control, as security for payment of the Liabilities. No Debtor
shall have any right to withdraw any funds deposited in the applicable Assignee
Deposit Account. The Agent may, from time to time, in its discretion, and shall
upon request of the applicable Debtor made not more than once in any week, apply
all or any of the then balance, representing collected funds, in the Assignee
Deposit Account toward payment of the Liabilities, whether or not then due, in
such order of application as the Agent may determine, and the Agent may, from
time to time, in its discretion, release all or any of such balance to the
applicable Debtor.
20. The Agent (or any designee of the Agent) is authorized to endorse, in the
name of the applicable Debtor, any item, howsoever received by the Agent,
representing any payment on or other proceeds of any of the Collateral. The
Agent shall give notice to the applicable Debtor of any such endorsement
contemporaneously therewith.
21. Certificates, Schedules and Reports. Each Debtor will from time to time, as
the Agent may request in writing, deliver to the Agent such schedules,
certificates and reports respecting all or any of the Collateral at the time
subject to the security interest hereunder, and the items or amounts received by
such Debtor in full or partial payment of any of the Collateral, as the Agent
may reasonably request. Any such schedule, certificate or report shall be
executed by a duly authorized officer of such Debtor and shall be in such form
and detail as the Agent may specify. Each Debtor shall immediately notify the
Agent of the occurrence of any event causing any loss or depreciation in the
value of its Inventory or other Goods which is material to the Company and its
Subsidiaries, if any, taken as a whole, and such notice shall specify the amount
of such loss or depreciation.
22. Agreements of the Debtors. Each Debtor (a) will, upon request of the Agent,
execute such financing statements and other documents (and pay the cost of
filing or recording the same in all public offices reasonably deemed appropriate
by the Agent) and do such other acts and things (including, delivery to the
Agent of any Instruments or Certificated Securities which constitute
Collateral), all as the Agent may from time to time reasonably request, to
establish and maintain a valid security interest in the Collateral (free of all
other liens, claims and rights of third parties whatsoever, other than Permitted
Liens) to secure the payment of the Liabilities; (b) will keep all its Inventory
at, and will not maintain any place of business at any location other than, its
address(es) shown on Schedules I and II hereto or at such other addresses of
which such Debtor shall have given the Agent not less than 10 days' prior
written notice, (c) will keep its records concerning the Non-Tangible Collateral
in such a manner as will enable the Agent or its designees to determine at any
time the status of the Non-Tangible Collateral; (d) will furnish the Agent such
information concerning such Debtor, the Collateral and the Account Debtors as
the Agent may from time to time reasonably request; (e) will permit the Agent
and its designees, from time to time, on reasonable notice and at reasonable
times and intervals during normal business hours (or at any time without notice
during the existence of a Default) to inspect such Debtor's Inventory and other
Goods, on reasonable notice and at reasonable times during normal business hours
(or at any time without notice during the existence of a Default), and to
inspect, audit and make copies of and extracts from all records and other papers
in the possession of such Debtor pertaining to the Collateral and the Account
Debtors, and will, upon written request of the Agent during the existence of a
Default, deliver to the Agent all of such records and papers; (f) will, upon
written request of the Agent, stamp on its records concerning the Collateral,
and add on all Chattel Paper constituting a portion of the Collateral, a
notation, in form satisfactory to the Agent, of the security interest of the
Agent hereunder; (g) except for the sale or lease of Inventory in the ordinary
course of its business and sales of Equipment which is no longer useful in its
business or which is being replaced by similar Equipment, will not sell, lease,
assign or create or permit to exist any Lien on any Collateral other than
Permitted Liens; (h) without limiting the provisions of Section 10.3 of the
Credit Agreement, will at all times keep all of its Inventory and other Goods
insured under policies maintained with reputable, financially sound insurance
companies against loss, damage, theft and other risks to such extent as is
customarily maintained by companies similarly situated, and cause all such
policies to provide that loss thereunder shall be payable to the Agent (it being
understood that (A) so long as no Default shall be existing, the Agent shall
deliver any proceeds of such insurance which may be received by it to such
Debtor and (B) whenever a Default shall be existing, the Agent may apply any
proceeds of such insurance which may be received by it toward payment of the
Liabilities, whether or not due, in such order of application as the Agent may
determine), and such policies or certificates thereof shall, if the Agent so
requests, be deposited with or furnished to the Agent; (i) will take such
actions as are reasonably necessary to keep its Inventory in good repair and
condition; (j) will take such actions as are reasonably necessary to keep its
Equipment in good repair and condition and in good working order, ordinary wear
and tear excepted; (k) will promptly pay when due all license fees, registration
fees, taxes, assessments and other charges which may be levied upon or assessed
against the ownership, operation, possession, maintenance or use of its
Equipment and other Goods; (l) will, upon written request of the Agent, (i)
cause to be noted on the applicable certificate, in the event any of its
Equipment is covered by a certificate of title, the security interest of the
Agent in the Equipment covered thereby, and (ii) deliver all such certificates
to the Agent or its designees; (m) will take all steps reasonably necessary to
protect, preserve and maintain all of its rights in the Collateral; (n) except
as listed on Schedule V, will keep all of the tangible Collateral in the United
States; (o) shall perform materially all covenants, stipulations, agreements and
obligations under any Assigned Agreement; and (p) will reimburse the Agent for
all expenses, including reasonable attorney's fees and charges (including time
charges of attorneys who are employees of the Agent), incurred by the Agent in
seeking to collect or enforce any rights in respect of such Debtor's Collateral.
23. Any expenses incurred in protecting, preserving or maintaining any
Collateral shall be borne by the applicable Debtor. Whenever a Default shall be
existing, the Agent shall have the right to bring suit to enforce any or all of
the Intellectual Property or licenses thereunder, in which event the applicable
Debtor shall at the request of the Agent do any and all lawful acts and execute
any and all proper documents required by the Agent in aid of such enforcement
and such Debtor shall promptly, upon demand, reimburse and indemnify the Agent
for all costs and expenses incurred by the Agent in the exercise of its rights
under this Section 6. Notwithstanding the foregoing, the Agent shall have no
obligation or liability regarding the Collateral or any thereof by reason of, or
arising out of, this Agreement.
24. Default. Whenever a Default shall be existing, the Agent may exercise from
time to time any right or remedy available to it under applicable law. Each
Debtor agrees, in case of Default, (i) to assemble, at its expense, all its
Inventory and other Goods (other than Fixtures) at a convenient place or places
acceptable to the Agent, and (ii) at the Agent's request, to execute all such
documents and do all such other things which may be necessary or desirable in
order to enable the Agent or its nominee to be registered as owner of the
Intellectual Property with any competent registration authority. Any
notification of intended disposition of any of the Collateral required by law
shall be deemed reasonably and properly given if given at least ten days before
such disposition. Any proceeds of any disposition by the Agent of any of the
Collateral may be applied by the Agent to payment of expenses in connection with
the Collateral, including reasonable attorney's fees and charges (including time
charges of attorneys who are employees of the Agent), and any balance of such
proceeds may be applied by the Agent toward the payment of such of the
Liabilities, and in such order of application, as the Agent may from time to
time elect.
25. General. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any of the Collateral in its possession (a) if such
Collateral is accorded treatment substantially equal to that which the Agent
accords its own property of a similar nature, or (b) if it takes such action for
that purpose as any applicable Debtor requests in writing, including, without
limitation, providing written information to Debtor of all cash constituting
Collateral in the custody of the Agent, but failure of the Agent to comply
(unless due to the Agent's gross negligence or willful misconduct) with any such
request shall not of itself be deemed a failure to exercise reasonable care, and
no failure of the Agent (other than due to the Agent's gross negligence or
willful misconduct) to preserve or protect any right with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by any Debtor, shall be deemed
of itself a failure to exercise reasonable care in the custody or preservation
of such Collateral.
26. Any notice from the Agent to any Debtor, if mailed, shall be deemed given
five days after the date mailed, postage prepaid, addressed to such Debtor
either at such Debtor's address shown on Schedule I hereto or at such other
address as such Debtor shall have specified in writing to the Agent as its
address for notices hereunder.
27. Each of the Debtors agrees to pay all expenses, including reasonable
attorney's fees and charges (including time charges of attorneys who are
employees of the Agent) paid or incurred by the Agent in endeavoring to collect
the Liabilities of such Debtor, or any part thereof, and in enforcing this
Agreement against such Debtor, and such obligations will themselves be
Liabilities.
28. No delay on the part of the Agent in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Agent of any right or remedy shall preclude other or further exercise thereof or
the exercise of any other right or remedy.
29. This Security Agreement shall remain in full force and effect until all
Liabilities have been paid in full and all Commitments have terminated. If at
any time all or any part of any payment theretofore applied by tie Agent to any
of the Liabilities is or must be rescinded or returned by the Agent for any
reason whatsoever (including the insolvency, bankruptcy or reorganization of any
Debtor), such Liabilities shall, for the purposes of this Agreement, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by the Agent, and this
Agreement shall continue to be effective or be reinstated, as the case may be,
as to such Liabilities, all as though such application by the Agent had not been
made. At such time that this Agreement is no longer in full force and effect,
the Agent will, at the appropriate Debtor's expense, execute and deliver to such
Debtor such documents as are reasonably necessary to evidence the termination of
the pledge, assignment and security interest granted hereby and deliver all
property belonging to such Debtor held by the Agent.
30. Upon any sale, lease, transfer or other disposition of any item of
Collateral as specifically permitted by and in accordance with the terms of this
Agreement and the Loan Documents (other than sales of Inventory in the ordinary
course of business), the Agent will, at the appropriate Debtor's expense,
execute and deliver to such Debtor such documents as are reasonably necessary to
evidence the release of such item of Collateral from the assignment and security
interest granted hereby; provided, however, that at the time of such request and
such release no Default shall have occurred and be continuing.
31. This Agreement shall be construed in accordance with and governed by the
laws of the State of Illinois applicable to contracts made and to be performed
entirely within such State, subject, however, to the applicability of the UCC of
any jurisdiction in which any Goods of any Debtor may be located at any given
time or as otherwise restricted by the UCC. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
32. The rights and privileges of the Agent hereunder shall inure to the benefit
of its successors and assigns.
33. This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement. At any time after the date of this
Agreement, one or more additional Persons may become parties hereto by executing
and delivering to the Agent a counterpart of this Agreement together with
supplements to the Schedules hereto setting forth all relevant information with
respect to such party as of the date of such delivery. Immediately upon such
execution and delivery (and without any further action), each such additional
Person will become a party to, and will be bound by all the terms of, this
Agreement.
34. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. EACH DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH DEBTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADDRESS SET FORTH ON SCHEDULE I HERETO (OR SUCH OTHER ADDRESS AS
IT SHALL HAVE SPECIFIED IN WRITING TO THE AGENT AS ITS ADDRESS FOR NOTICES
HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH
DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
35. EACH DEBTOR AND THE AGENT HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY
NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
36. It is the intention of the parties hereto that the priorities and agreements
herein contained continue to apply after the enactment by the various States of
Revised Article 9--Secured Transactions (with conforming amendments to Articles
1, 2, 2a, 4, 5, 6, 7 and 8) to the UCC as approved by The American Law Institute
in 1998 and approved and recommended for enactment in all the States by the
National Conference of Commissioners for Uniform State Laws in 1998 ("Revised
Article 9") and the effectiveness of Revised Article 9 in any State. After the
effectiveness of Revised Article 9 in any State governing perfection and the
effect of perfection or non-perfection of a security interest in any Collateral,
as to such State and such Collateral, (i) all section references herein to, and
all defined terms used herein defined in, Article 9 of the UCC as currently in
effect shall be deemed to be to any corresponding Section or definition of
Revised Article 9, and (ii) if any definition used herein by reference to
Revised Article 9 is broader than the corresponding definition used in current
Article 9 of the UCC, such broader definition will apply herein.
[SIGNATURE PAGE FOLLOWS]
Security Agreement Signature Page
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
DEBTORS:
ONKYO AMERICA, INC.
By:
Title:
AGENT:
GMAC BUSINESS CREDIT, LLC
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Schedule I
To the Security Agreement among GMAC Business Credit,
LLC and Onkyo America, Inc.
Chief Executive Office and Principal Place of Business
Onkyo America, Inc.
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Schedule II
To the Security Agreement
among GMAC Business
Credit, LLC And Onkyo
America, Inc.
Other Locations Where a Place of Business is Maintained
1) Onkyo America, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2) Onkyo America, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Other Locations Where Inventory is Stored
1) [ * ]
2) [ * ]
3) [ * ]
4) [ * ]
5) [ * ]
* Confidential portions omitted and filed separately with the Commission.
Schedule III
To the Security Agreement
among GMAC Business
Credit, LLC And Onkyo
America, Inc.
Trade Names
None
Schedule IV
To the Security Agreement among GMAC Business Credit,
LLC And Onkyo America, Inc.
Intellectual Property
1) Subwoofer and cone tecnology owned by Onkyo Corporation:
Patent Number 4,377,617 for Loudspeaker Diaphragm and process for Producing
Same.
Patent Number 4,709,392 for Dome Speaker with Diaphragm Having at Least One
Elongated Cut-Out Portion.
Patent Number 5,205,897 for Method of Bonding Loudspeaker Diaphragm.
2) Pursuant to the Share Purchase Agreement dated June 29, 2000, and amended as
of August 3, 2000, among Onkyo Europe Electronics GmbH, Onkyo Malaysia SDN.BHD.,
Onkyo Corporation, Global Technovations, Inc., and Onkyo America, Inc. ("Share
Purchase Agreement"), Onkyo America, Inc. was granted the following: a) a
royalty-free license and right to possess, use, display and reproduce the name
"Onkyo America," "Onkyo America, Inc.," in connection with Onkyo America, Inc.'s
business for five years from August 31, 2000; and (b) the right to use, display
and reproduce the "Onkyo" name on Onkyo Group Speakers (as defined in the Share
Purchase Agreement) in its capacity as exclusive distributor for Onkyo
Corporation under the Distributoin and Technical Service Agreement, dated August
31, 2000, by and among Onkyo Corporation and Onkyo America, Inc.
3) Pursuant to the Asset Purchase Agreement, dated September 30, 1999, by and
among Top Source Automotive, Inc., Top Source Technologies, Inc. and Onkyo
America, Inc., Onkyo America acquired rights in the following trade names: Top
Source Automotive, Inc., Top Source Automotive and Top Source.
Schedule V
To the Security Agreement among GMAC Business Credit,
LLC And Onkyo America, Inc.
Collateral Not Located in United States
None.
Schedule VI
To the Security Agreement among GMAC Business Credit,
LLC and Onkyo America, Inc.
Assigned Contracts
Share Purchase Agreement dated June 29, 2000, and amended as of August 3,
2000, by and among Onkyo Europe Electronics GmbH, Onkyo Malaysia SDN.BHD., Onkyo
Corporation and Global Technovations, Inc. and Onkyo America, Inc.
