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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 2, 1996
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NSA INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Tennessee 0--19487 62-1387102
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4260 East Raines Road, Memphis, Tennessee 38118
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (901) 366-9288
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Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
None.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 2, 1996, the Registrant completed negotiations for the
sale of certain of the assets of two of its wholly owned operating
subsidiaries, NSA International GmbH, a German corporation ("NSA Germany") and
NSA AG, a Swiss corporation ("NSA Switzerland"), to Holzmann Holding, AG,
("Buyer"), also a Swiss corporation, owned by Dan Holzmann, a Sales and
Marketing Director of NSA Germany and a Director of NSA Switzerland, and his
father, Gregory Holzmann. Pursuant to these same negotiations, NSA
International likewise has agreed to transfer the ownership of its Austrian
subsidiary, NSA Oko Filter Systems Vertriebs GmbH ("NSA Austria") to the Buyer.
The agreed upon aggregate purchase price for substantially all of the
assets of these subsidiaries was $1.5 million (U.S.), based on the approximate
book value of the assets. The purchase price for these transactions consists
of the delivery and payment in accordance with the terms of the Buyer's
promissory note in the principal amount of $1.5 million which is due and
payable over a seven year period at an interest rate of 4.5%. The note is
secured by certain of the assets of the Buyer. The Registrant and the Buyer
anticipate that with negotiations now concluded, the transaction will be
completed in the near future.
Additionally, as a condition of the sale, the Registrant entered into
a distribution contract with the Buyer which provides that the Buyer will
continue to purchase products from the Registrant for resale in Austria,
Germany and Switzerland.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
None.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
None.
ITEM 5. OTHER EVENTS.
None.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
None.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
None.
(b) Exhibits.
10.26 Distribution Agreement between the Registrant and
Holzmann Holding, AG
10.27 Promissory Note of Holzmann Holding, AG
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ITEM 8. CHANGE IN FISCAL YEAR.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NSA INTERNATIONAL, INC.
Date: September 16, 1996 By: /s/ Stan C. Turk
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Stan C. Turk
Chief Financial Officer
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EXHIBIT 10.26
DISTRIBUTION AGREEMENT
THIS AGREEMENT ("Agreement") is entered into this the 1st day of
September 1996, by and between NSA INTERNATIONAL, INC, a Tennessee corporation
("NSAI") having an office at 4260 East Raines Road, Memphis, Tennessee, USA
38118, and HOLZMANN HOLDING AG, a Swiss corporation ("Distributor") having an
office in the canton of Zug.
W I T N E S S E T H
WHEREAS, NSAI owns the right to the international distribution of
various types of water filters and other water treatment systems, air filters,
an in-home carbonation appliance, certain nutritional products, and other
related products;
WHEREAS, Distributor desires to obtain the exclusive right to sell and
distribute within a specified geographic area such products marketed by NSAI
upon the terms and conditions herein set forth; and
WHEREAS, Distributor desires, in connection with marketing of such
products, to obtain from NSAI access to NSAI's computer system and computer
consultants familiar with NSAI's computer hardware and software used in
connection with the distribution and sale of such products;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is mutually agreed as follows:
1. Definitions
1.1. The term "Confidential Information" means any and all
information, including Technical Information, that is not generally known to
the public or by NSAI's competitors which is valuable to NSAI or gives it an
advantage over its competitors, including, by way of example only, information
relating to: (a) NSAI's operational procedures, methods, processes and
techniques, (b) any ideas, inventions, discoveries, improvements, services,
products, formulas, apparatus, equipment, cost data, research or development
relating to the Products (as hereinafter defined) or otherwise relating to
NSAI's business, including information relating to NSAI's computer software
system; or (c) the prices, users, suppliers or customers of NSAI's products or
services.
1.2. The term "Distribute" means to promote and sell Products only
within the Territory. The terms "distributor" and "distribution" shall be
interpreted to comply fully with this definition.
1.3. The term "Exclusive" when used in reference to an appointment in
respect of the distribution of Products, means that during the term of this
Agreement, NSAI may not appoint a third party to Distribute, and itself retains
no right to Distribute within the Territory.
1.4. The term "Products" as used herein, shall include each of the
following: (a) those products specifically listed on EXHIBIT A hereto, and as
amended from time to time, and any and all improvements to such products which
may occur or be developed during the term of this Agreement, whether developed
by NSAI or Distributor; (b) any and all products which embody or employ any of
NSAI's Technical Information; (c) the materials and component parts of the
products identified in subparagraphs (a) and (b); (d) the by-products of any
such products, materials, or component parts, whether or not such by-products
are used or are usable in any other products; (e) all products which are
manufactured, assembled or sold or otherwise disposed of by Distributor as a
direct or indirect result of NSAI's providing Distributor with Confidential
Information or Technical Information. Additional or new products developed by
or for NSAI may be added to EXHIBIT A by agreement among the parties.
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1.5. The term "Technical Information" means any information, whether
confidential or otherwise, which is applicable to or useful in the
demonstration, testing, inspection, use, operation, maintenance or repair of
Products, including, by way of example only, engineering drawings, electrical,
electronic or other schematics, specifications, equipment and parts lists, test
procedures, and operating, maintenance and repair procedures and instructions.
1.6. The term "Territory" means those countries set forth on EXHIBIT
B hereof.
1.7. The term "Total Gross Sales" means Distributor's receipts from
the sale of all Products and New Products, net of returns and allowances in the
ordinary course of business and less sales or value added tax incurred in
connection with such sales. Total Gross Sales shall be determined on a month
to month basis.
2. Exclusive Distributorship.
2.1. Appointment. Subject to the terms of this Agreement, NSAI
hereby appoints Distributor as its Exclusive distributor with the right to
appoint subdistributors of the Products within the Territory; provided,
however, that this Agreement may be terminated or the exclusiveness of this
appointment may be withdrawn by NSAI upon notice to Distributor in the event
Distributor or its subdistributors fails to comply with the terms and
provisions of this Agreement. Distributor hereby accepts the appointment as
NSAI's Exclusive distributor of the Products within the Territory and agrees to
use its best efforts to sell the Products in accordance herewith only within
the Territory. Distributor agrees that it will not appoint or contract with
subdistributors located outside the Territory. In the event a subdistributor
of Distributor desires to enter a subdistributor into Distributor's method of
distribution and such new subdistributor does not reside in the Territory,
Distributor shall refer such new subdistributor to the NSAI master distributor
whose territory includes the geographic area in which the new subdistributor
resides. In the event the new subdistributor resides in a geographic area
which is not a part of any master distributor's territory, Distributor shall
not be entitled to enter such person on Distributor's method of Distribution.
2.2. Distributor's Compensation. Distributor's sole compensation
hereunder shall consist of the difference between Distributor's purchase price
paid to NSAI for the Products and the selling price received by Distributor
from its purchasers.
2.3. Method of Distribution. Prior to the date of this Agreement,
Distributor has furnished to NSAI a Plan of Distribution, which details the
method by which Distributor intends to market and sell the Products. The Plan
of Distribution is attached hereto as EXHIBIT C. At least thirty (30) days
prior to making any modifications to the Plan of Distribution, Distributor
shall notify NSAI of the proposed modification to the Plan of Distribution (a
"Proposed Modification"). Before any Proposed Modification shall become
effective, NSAI shall have given its written consent to such Proposed
Modification, which consent shall not be unreasonably withheld. Any
modification to the Plan of Distribution without the consent of NSAI or the
failure of Distributor to follow the Plan of Distribution as set forth on
EXHIBIT C (as modified in accordance with this SECTION 2.3) shall be a breach
of this Agreement.
2.4. Distribution of Other Products. In the event Distributor
desires to sell products other than the Products ("New Products") which are not
sold to Distributor by NSAI, Distributor shall notify NSAI of its desire to
sell such products ("New Product Notice"). The New Product Notice will contain
design and product specifications and all price, manufacturing, delivery, and
other material terms regarding the New Products. NSAI shall have a period of
thirty (30) days from the date NSAI receives the New Product Notice to
determine, in its reasonable discretion, whether Distributor may sell the New
Products. In the event NSAI determines that Distributor may sell the New
Products, NSAI may require Distributor, subject to applicable law, to affix the
NSA logo to the New Products prior to the sale of such New Products or
condition Distributor's ability to sell such New Products upon such New
Products being sold bearing NSAI's trademarks.
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2.5. Direct Selling Association Requirement. If the Plan of
Distribution described in EXHIBIT C utilizes person-to-person resale of the
Products in any manner other than from a fixed retail location then the Plan of
Distribution must comply fully with all provisions of the Code of Ethics of the
United States Direct Selling Association ("USDSA") as are applicable to USDSA
Member Companies. A copy of the USDSA Code of Ethics is attached hereto as
EXHIBIT D. Such provisions include, but are not limited to, requirements for
repurchase of inventory from selling agents or dealers. This requirement for
compliance with the USDSA Code of Ethics applies in each country of the
Territory in which Distributor does not maintain a separate membership in good
standing of a local Direct Selling Association which is a member of the World
Federation of Direct Selling Associations. In countries where membership in
such Direct Selling Association is maintained, Distributor's Plan of
Distribution shall comply with all applicable provisions of such local Direct
Selling Association Code and need not comply with the USDSA requirements
referenced above.
3. Purchase and Sale of Products. Subject to the provisions of
SECTION 3.4, NSAI shall sell, and Distributor shall buy, the Products, on a
purchase order by purchase order basis, in such quantities and on such dates as
Distributor shall determine; provided, however, that (a) NSAI shall have a
reasonable period of time (not to exceed seven days) to fill purchase orders
and (b) each purchase order shall be for a pallet load or as agreed upon by the
parties. NSAI and Distributor expressly reject application of the United
Nations Convention for the International Sale of Goods. All sales shall be
subject to the following:
3.1. Purchase Price. The purchase price of the Products shall be set
forth on EXHIBIT A. The prices set forth on EXHIBIT A shall remain constant
during the initial two (2) years of this Agreement; thereafter, they shall be
subject to change annually; provided, however, that any increase of the
purchase price of Products shall be limited to the increase in NSAI's actual
cost for Products.
3.2. Payment. Sales from NSAI to Distributor shall be against
irrevocable letters of credit in form, terms and substance satisfactory to NSAI
and its counsel. For product purchases payment shall be due 30 days from the
day of invoice. In the event the credit is not paid in full when due, NSAI
shall charge interest on all amounts due at 7% per annum. In lieu of
establishing irrevocable letters of credit, Distributor may prepay for any
shipment of Products by delivery of immediately available United States funds
via wire transfer or similar means.
3.3. Minimum Distributorship Fee/Purchase Requirements. As a
condition to the grant of the rights to Distributor, Distributor agrees to
either (i) purchase a minimum of $4,000,000 (U.S.) of the Products during each
year of the initial term of this Agreement (each year being measured from the
Anniversary date of this Agreement), or (ii) pay to NSAI, pursuant to the
provisions of SECTION 6.2, Minimum Distributorship Fees of not less than
$500,000 (U.S.) during each year of the initial term of this Agreement.
Exercise by NSAI of its rights of termination in the event Distributor
fails to meet the above minimums will not involve payment of any consequential
damages by Distributor to NSAI as a result of Distributor's failure to meet the
above minimum. In considering the exercise of this termination right, NSAI
agrees to take reasonable extenuating circumstances into account.
3.4. Delivery/Passage of Title. All Products purchased by
Distributor shall be delivered F.C.A. Incoterms 1990 to Distributor at NSAI's
Venlo warehouse until March 31, 1997. Through March 31, 1997, NSAI shall
continue to ship product from the Venlo warehouse to Distributor's dealers and
distributors located in the Territory at no additional cost to Distributor,
but, however, Distributor will reimburse NSAI on a weekly basis for all costs
of goods sold and associated freight charges. After March 31, 1997, all
products purchased by Distributor shall be delivered F.C.A. Incoterms 1990 at
NSAI's central warehouse in Europe.
3.5. Return of Products. Upon delivery to Distributor's warehouse,
Distributor shall have a reasonable time to inspect the Products delivered.
NSAI shall not be liable for any claims unless they are
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made promptly after receipt of the Products, and due opportunity has been given
for inspection by NSAI's representatives at Distributor's warehouse if so
requested by NSAI. In the event that Distributor believes Products received
from NSAI are defective, Distributor shall return such Products to NSAI at its
own cost. Through March 31, 1997, delivery to NSAI shall be made to NSAI's
Venlo warehouse. After March 31, 1997, delivery shall be to NSAI as it's
central warehouse in Europe. Upon receipt of the returned Products, NSAI shall
examine such Products, and determine, in its reasonable discretion, whether
such Products are defective. In the event NSAI determines such returned
Products are defective, it shall replace the quantity of the Products returned
to it and reimburse Distributor for all shipping expenses incurred by
Distributor in both returning the defective Products and shipping the
replacement Products. In the event NSAI determines that the returned Products
are not defective, such Products shall be shipped to Distributor in accordance
with SECTION 3.4.
4. Disclaimer of Warranties. Distributor acknowledges that the only
warranty given by NSAI is a warranty to repair or replace any Products
determined by NSAI to be defective, following proper notice and inspection
under SECTION 3.5 or determined by the parties to have failed to meet the
agreed upon product warranties, specifications and/or standards. In addition,
NSAI shall be responsible to reimburse Distributor for any out of pocket
consequential damages proximately caused by a defective Product. This section
applies also to products sold prior to the date of this Agreement. Any
warranty period shall begin to run at the time of resale to a consumer. EXCEPT
AS SET FORTH IN THIS PARAGRAPH, NSAI HEREBY DISCLAIMS ANY AND ALL WARRANTIES,
EXPRESS OR IMPLIED, RELATED TO THE PRODUCTS, INCLUDING BUT NOT LIMITED TO THE
WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY.
5. Exploitation of Rights by Distributor.
5.1. Best Efforts. Distributor shall at all times diligently use its
best efforts (a) to fully exploit the rights and licenses granted to it by
NSAI; (b) to achieve and maintain the maximum sales volume and distribution of
the Products; (c) otherwise to develop and satisfy fully the market for the
Products in each country within the Territory, without regard to whether
Distributor has met the minimum sales requirement; and (d) to refrain from any
activity which may adversely affect these objectives.
5.2. Facilities and Staff. Distributor shall establish and maintain
facilities and hire, train, and maintain a staff sufficient to enable
Distributor to perform its obligations under this Agreement. Such facilities
and staff shall be consistent with promoting the reputation of, and confidence
in, the Products. Distributor shall consult with and give due regard to the
advice of NSAI concerning distribution strategy and policy, and NSAI shall
supply Distributor with such Technical Information or other Confidential
Information, as in NSAI's sole discretion, is reasonably necessary to enable
Distributor to perform its obligations under this Agreement.
5.3. Product Brochures and Advertising. Through March 31, 1997,
Distributor shall purchase all advertising materials, sales literature,
catalogues, and other printed promotional material pertaining to the Products
("Promotional Materials") from NSAI at prices to be agreed upon on the date of
purchase. Through March 31, 1997, Distributor shall not be entitled to use any
Promotional Materials other than those purchased from NSAI. After March 31,
1997, Distributor shall prepare and distribute, at its own expense, such
advertising material, sales literature, catalogues, and other printed
promotional material, and conduct such promotional activity as may be necessary
to perform its obligations under this Agreement. NSAI shall supply samples,
existing product brochures and other NSAI literature to Distributor, in an
amount deemed reasonable in the sole discretion of NSAI. NSAI shall provide
all such materials in English and Distributor shall be responsible for any and
all costs associated with accurate translation, where required. Prior to their
distribution or use, Distributor will supply NSAI with copies, translated into
English, of all brochures, packaging, advertising or other literature prepared
by or for Distributor relating to the Products or
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Distributor's business involving the Products. At the request of NSAI,
Distributor will make changes in its advertising and promotional materials in
the event that NSAI determines, in its reasonable judgment, that such materials
do not accurately portray the features or performance characteristics of the
Products or otherwise are in violation of the terms of this Agreement. In the
event Distributor distributes or sells New Products which bear any NSAI
trademark or to which the NSA logo has been affixed, pursuant to SECTION 2.4
hereof, Distributor shall prepare and distribute, at its own expense, such
advertising material, sales literature, catalogues and other printed material
pertaining to such New Products (the "New Product Promotional Materials") as
Distributor shall deem necessary; provided, however, that prior to distribution
of the New Product Promotional Materials, Distributor will supply NSAI with
copies, translated into English, of the New Product Promotional Materials
proposed to be used and distributed by Distributor. NSAI shall have the right
to object to and reject the use or distribution of such New Product Promotional
Materials by Distributor, and, at the request of NSAI, Distributor shall not
use or distribute the rejected New Product Promotional Materials.
Notwithstanding the preceding sentence, the failure of NSAI to object to and
reject the use or distribution of any New Product Promotional Materials by
Distributor shall not be deemed to be an approval by NSAI of the New Product
Promotional Materials.
5.4. Non-Competition. Distributor specifically agrees (a) to refrain
from directly or indirectly manufacturing, assembling, or selling products or
services, under its own brand name or otherwise, inside or outside the
Territory, which are deemed to be competitive with Products or NSAI's other
products and business, and (b) to abide by the decision of NSAI on this issue
of being competitive with Products by either withdrawing the allegedly
competitive products from Distributor's lines or labeling such products to
conform with NSAI's instructions, whichever NSAI may request. The fact that
NSAI may permit Distributor to market certain competitive products temporarily
under Distributor's own brand shall not be construed as a waiver of NSAI's
right to enforce at any time the provisions of this SECTION 5.4.
5.5. Product Procedures. Distributor agrees to comply fully and
exactly with all Product procedures, including, but not limited to, handling,
storage, training, and installation procedures specified to Distributor by NSAI
at the time of purchase. It shall be a material breach of this Agreement if
Distributor fails to follow any such procedure.
6. Fees. Pursuant to the terms of this Agreement, Distributor agrees
to pay to NSAI the fees detailed below and provide NSAI with access to all
books and records of Distributor reasonably requested by NSAI which would allow
NSAI to determine the amount of fees owed to NSAI:
6.1. Computer Usage and Management Fees. In exchange for the
Computer Consulting Services and limited access to NSAI's mainframe computer
system as described in SECTION 7, Distributor agrees to pay NSAI as a Computer
Usage and Management Fee an amount equal to two percent (2%) of the Total Gross
Sales. The Computer Usage and Management Fee shall be paid quarterly in
arrears on the twentieth (20th) business day following the close of each
quarter, directly to a banking institution selected by NSAI by wire transfer,
based upon the Total Gross Sales for the immediately preceding quarter.
Failure to pay the Computer Usage and Management Fee as herein called for will
at the option of NSAI, result in termination of this Agreement. Computer Usage
and Management Fees not paid when due shall bear interest at the rate of 7% per
annum, from the due date until paid. If Distributor is delinquent in the
payment of all or a portion of the Computer Usage and Management Fee owed to
NSAI, NSAI may take such steps as it deems appropriate to collect the
delinquent fees including collection against letters of credit, delay of
shipments, or treatment as a breach of this Agreement.
6.2. Distributorship Fees. In exchange for the ability to utilize
NSAI's name and logo, and to sell the Products, Distributor agrees to pay NSAI
as a Distributorship Fee an amount equal to three percent (3%) of the Total
Gross Sales. The Distributorship Fee shall be paid quarterly in arrears on the
twentieth (20th) business day following the close of each quarter, directly to
a banking institution selected by NSAI by wire
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transfer, based upon the Total Gross Sales for the immediately preceding
quarter. Failure to pay the Distributorship Fee as herein called for will, at
the option of NSAI, result in termination of this Agreement. Distributorship
Fees not paid when due shall bear interest from the due date until paid at the
rate of 7% per annum. If Distributor is delinquent in the payment of all or a
portion of the Distributorship Fees owed to NSAI, NSAI may take such steps as
it deems appropriate to collect the delinquent fees including collection
against letters of credit, delay of shipments, or treatment as a breach of this
Agreement.
6.3. Books and Records. Distributor agrees to maintain complete
books and records and to make the same available to NSAI for inspection.
Distributor agrees to submit to NSAI periodic reports and financial statements
at the times, in the form and containing such information as may be prescribed
from time to time by NSAI. If required by NSAI in its sole discretion, such
financial statements shall be based upon an audit performed by a licensed
certified public accountant and prepared and certified in accordance with U.S.
or applicable local generally accepted accounting practices and procedures.
NSAI reserves the right to enter Distributor's premises and inspect such books
and records and to have such books and records audited. Distributor shall pay
any amounts determined by such audit to be due to NSAI, plus interest thereon
at the rate of 7% per annum accruing from the date such amounts should have
been paid to NSAI.
6.4. Intercompany Reconciliation. Distributor acknowledges and
agrees that its role as a master distributor for NSAI's products may result in
Distributor having to pay commissions to certain other master distributors as a
result of the Distributor's Plan of Distribution and the plans of distribution
of other master distributors. Accordingly, within three (3) business days
after the last business day of each month, NSAI shall cause its computer system
to run a reconciliation report which details payments required to be paid by
Distributor to other master distributors, NSAI, and National Safety Associates,
Inc., a Tennessee corporation. The amounts owed by Distributor as shown on the
reconciliation report shall be paid within two (2) days of Distributor's
receipt of the reconciliation report. Any amount determined to be owed by
Distributor pursuant to this SECTION 6.4, which remain unpaid after the
aforementioned two (2) day period shall bear interest at the maximum rate
allowed by law. Additionally, nonpayment of amounts owed to any other master
distributor, NSAI or National Safety Associates, Inc. pursuant to this SECTION
6.4, shall be a material breach of this Agreement.
7. Computer Consulting Services and Computer Usage
7.1. Computer Consulting Services. NSAI agrees to make its computer
personnel available to Distributor for consultation regarding the selection and
purchase of computer hardware and software to be used by Distributor in
connection with fulfilling its obligations hereunder, subject only to NSAI's
requirements for such personnel for the needs of its own business. Such
consultation shall occur in writing, by phone, or in person at NSAI's
facilities. If it is necessary for such services to be provided by outside
consultants who are not NSAI employees, then Distributor shall be responsible
for payment of all fees and expenses of such outside consultant, provided,
however, that NSAI shall not engage any such outside consultant without the
prior approval of Distributor. If such services are provided at Distributor's
site, subject to Distributor's request and upon NSAI's express approval in the
case of its own employees, then all travel expenses (including meals and
lodging) of such consulting personnel shall be shared equally by Distributor
and NSAI.
7.2. Computer Usage. NSAI will make available to Distributor limited
access to NSAI's mainframe computer and programs therein contained which will
allow Distributor to operate its business pursuant to the Plan of Distribution
attached hereto as EXHIBIT C. The computer services to be provided to
distributor by NSAI are set forth on EXHIBIT E. NSAI may limit Distributor's
access to the mainframe computer in any manner deemed necessary by NSAI to
protect any Confidential Information, Technical Information, or other
information contained on the mainframe computer system. Any attempt by
Distributor to gain access to the mainframe in excess of the access
specifically granted by NSAI will be a breach of this Agreement. Upon
termination of this Agreement, Distributor shall not be entitled to any
information stored on or programs
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located on NSAI's mainframe computer. Distributor expressly acknowledges that
all programming and information on NSAI's mainframe are the sole and exclusive
property of NSAI.
8. Confidentiality and Non-Disclosures. Distributor acknowledges
that, in the course of fulfilling its obligations hereunder, it has or will
receive or obtain Confidential Information and Technical Information of NSAI,
and that such information is proprietary and valuable to NSAI. Therefore,
Distributor will make such information available only to those of its employees
who need to know in order to fulfill Distributor's obligations hereunder, and
shall not communicate or divulge to, nor use for the benefit of, any other
person, firm or corporation any of the Technical Information or Confidential
Information communicated to Distributor pursuant to this Agreement or
otherwise. Distributor shall obligate its officers, directors, management
personnel, and employees to maintain the secrecy of such Technical Information
and Confidential Information. Distributor shall not, without the prior written
consent of NSAI, authorize or direct the release of any information to any
third party relating to the nature, terms, and conditions of this Agreement.
Distributor shall use its best efforts to safeguard the Technical Information
and Confidential Information from unauthorized disclosure. Distributor shall
be responsible for any breach of the requirements of this paragraph by anyone
to whom Distributor discloses the Technical Information or Confidential
Information. The obligations of Distributor contained in this paragraph are
independent, and the existence of any claim or cause of action of Distributor
against NSAI, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by NSAI of the obligations of
Distributor under this paragraph. Distributor's obligations under this
paragraph shall survive any termination or expiration of this Agreement.
9. Non-Solicitation. Distributor agrees, during the term hereof and
for a period of two (2) years after any expiration or termination hereof, not
to directly or indirectly offer to employ or employ any employees of NSAI while
they are in the employ of the NSAI, and not to offer to employ or employ any
former employee of NSAI for a period of two (2) years after they have left the
employ of NSAI. The obligations of Distributor contained in this paragraph are
independent, and the existence of any claim or cause of action of Distributor
against NSAI, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by NSAI of the obligations of
Distributor under this paragraph. Distributor's obligations under this
paragraph shall survive any termination or expiration of this Agreement.
10. Injunction and Damages. Distributor acknowledges that any breach
or imminent breach by Distributor of SECTIONS 8 AND 9 of this Agreement may
cause irreparable injury and harm to NSAI and that remedies at law for the
breach or imminent breach may be inadequate. Accordingly, in the event of a
breach hereof by Distributor, or in the event that NSAI, in good faith and upon
reasonable cause, determines that a breach hereof appears imminent, NSAI shall
be entitled to obtain specific performance, temporary and permanent injunctive
relief and such other relief to which it may be entitled at law or in equity
without the necessity of posting bond or of proving actual damage. NSAI shall
be entitled to recover all reasonable costs and attorneys' fees incurred by it
in the event it is successful in obtaining any such relief. In the event that
NSAI is unsuccessful in obtaining any relief under this paragraph, then NSAI
shall reimburse Distributor or its reasonable costs and attorneys' fees
incurred in defense of such action.
11. Regulatory and Governmental Approval. NSAI has been, prior to
the date of this Agreement, responsible for procuring all necessary regulatory
or other government approvals regarding the use or sales of the Products and
the Plans of Distribution in the Territories. Distributor hereby agrees that
it shall be responsible and liable for procuring all future necessary
regulatory or other government approvals regarding the use or sales of the
Products within the Territory. At the time when NSAI agrees to sell any New
Products developed by Distributor through its own distribution system, the
costs associated with the development of the new product shall be shared by the
parties. Distributor hereby agrees to indemnify and hold NSAI harmless for any
and all costs, including, but not limited to fines, penalties, and attorney's
fees, or judgments that result from any action by any individual, entity,
government or other regulatory body within the Territory taken after the date
of this Agreement. NSAI hereby agrees to indemnify and hold Distributor
harmless for
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<PAGE> 8
any and all costs, including, but not limited to, fines, penalties, and
attorneys fees, or judgments, that result from any action by any individual,
entity, government or other regulatory body within the Territory with respect
to matters relating to the Products and arising prior to the date of this
Agreement. Distributor agrees to provide reasonable assistance to NSAI to
investigate and/or resolve any of such actions which may be taken and for which
NSAI continues to maintain responsibility pursuant to the terms of this SECTION
11. Distributor agrees to forward to NSAI copies of all regulatory approvals
and to keep NSAI advised as to the status of pending approvals. Any regulatory
approvals sought by Distributor shall bear the name of NSAI.
12. Intellectual Property Rights.
12.1. Ownership. Distributor acknowledges NSAI's exclusive ownership
of the trademarks affixed to and the patents embodied in the Products and will
do nothing at any time, during or after the term of this Agreement, which could
adversely affect their validity or enforceability, including any modification
or obliteration of the trademark or patent markings on the Products as sold.
This Agreement shall not give Distributor any right to use the NSA name and
marks, or any other trademarks of NSAI, except as specifically authorized by
NSAI. Promptly following termination of this Agreement for any reason,
Distributor agrees to discontinue use of the NSAI name and marks, and any other
NSAI names and trademarks and to remove, or dispose of, as Distributor shall
direct, any signs or other indicia relating NSAI to the sale of the Products
and any use of NSAI's name and trademarks. Following termination of this
Agreement, Distributor shall not be permitted to use the NSA name or marks or
any other NSAI name or trademark in connection with any product. Distributor
shall not have any right to register in the Territory or elsewhere, any
trademarks identical with or similar to NSAI's trademarks. All use of NSAI's
trade name or trademarks by Distributor, in connection with the selling,
installation and service of the Products or the operation of its business,
under this Agreement shall be subject to NSAI's control and shall inure to the
benefit of NSAI.
12.2. Company Name. The trade name "NSA" is being used as part of
Distributor's name only with the specific permission of NSAI, and immediately
upon any termination of this Agreement, Distributor will cease use of the
designation "NSA" in its name, and will proceed to change its name, both in
trade and with all appropriate and necessary government officials, to one not
including the designation "NSA," or the name "National Safety Associates" or
any confusingly similar name or designation.
12.3. Defense of Rights. If necessary, Distributor shall, at NSAI's
request, assist NSAI in taking any action which may be necessary in order to
safeguard and defend NSAI's right of ownership in its trademarks or patents.
In particular, Distributor shall observe the market for designations which may
infringe NSAI's rights in and to its patents or trademarks and inform NSAI of
its observations. Distributor shall (a) be vigilant in detecting any possible
infringements of any of NSAI's patents or trademarks by third parties; (b)
inform NSAI promptly of any such event; and (c) collaborate wholeheartedly with
NSAI in proceeding against such infringers, to the extent requested by NSAI.
12.4. Infringement. NSAI makes no warranty or representation as to
whether the distribution and sale of Products by Distributor infringes the
patents, trademarks or other proprietary rights of any third party. In the
event that any infringements are alleged by third parties, NSAI agrees to
investigate the situation fully in collaboration with Distributor, and the
parties agree to cooperate in taking appropriate action to alleviate said
infringement and to resolve any claims. Distributor agrees that it will not
take any steps or institute any action to suppress an infringement or to
expunge any trademark registration without prior written authorization from
NSAI.
12.5. Limited License; Inventions. This Agreement grants a limited
license to Distributor to use, only as may be reasonably necessary to
effectuate the purposes of this Agreement, the trademarks, patents, copyrights,
Technical Information, Confidential Information or technology used by NSAI in
connection with or embodied in the Products. Any and all improvements,
modifications, inventions or discoveries by
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<PAGE> 9
Distributor or its employees, relating to the Products, made as a result of
Distributor's access to the Technical Information and Confidential Information,
or otherwise arising as a result of this Agreement shall be the sole and
exclusive property of NSAI. In furtherance of the foregoing, Distributor
hereby assigns, and agrees to assign, all such improvements, modifications,
inventions and discoveries to NSAI, and further authorizes NSAI as its
attorney-in-fact to execute all such documents as NSAI may determine are
necessary or desirable to confirm the foregoing assignment and/or NSAI's
ownership rights to such improvements, modifications, inventions or
discoveries. lt is expressly understood and agreed between the parties that
NSAI retains full ownership of all trademarks, patents, copyrights, Technical
Information, Confidential Information and other technology described above in
this SECTION 12.5. In the event of termination of this Agreement, for any
reason, Distributor agrees that all rights of access to or to use the
trademarks, patents, copyrights, Technical Information, Confidential
Information and other technology granted hereunder shall revert to NSAI, and
Distributor shall have no interest therein whatsoever.
13. Indemnity. Distributor shall indemnify and defend NSAI against
and hold NSAI harmless from any and all claims (including without limitation,
product liability claims), suits, damages, judgments, or losses, including
reasonable attorney's fees and other expenses incurred in investigation and
defense, which arise out of the distribution, marketing and/or sale or other
disposition by Distributor of Products, regardless of any fault by Distributor,
or out of any unauthorized use of any trademark, patent, process, idea, method
or device by Distributor, or otherwise as the result of any act or omission of
Distributor or its dealers, subdistributors or purchasers, regardless of any
fault by Distributor, and whether based upon breach of contract, negligence,
tort, strict liability or otherwise. Provided, however, Distributor shall not
indemnify and hold NSAI harmless from NSAI's liability resulting from its own
actions or negligence.
14. Damages. Neither party shall by reason of the termination or
non-renewal of this Agreement, in whole or in part, be liable to the other for
compensation, reimbursement or damages on account of the loss of prospective
profits or anticipated sales, or on account of expenditures, investments,
leases, property improvements or commitments in connection with the business or
goodwill of the other party, or otherwise.
15. Notice and Defense of Claims. Distributor shall immediately,
upon notice of a claim of any kind involving any Product or method of plan of
Distribution as described in SECTION 2.3, provide notice of the claim to NSAI.
Such notice shall provide a detailed description of the facts and circumstances
giving rise to such claim. The parties agree to cooperate in the defense of
said claim and to, apportion the costs arising therefrom as agreed between the
parties.
16. Term. Subject to prior termination in accordance herewith, this
Agreement shall have a term of seven (7) years, but shall be renewable for
successive five (5) year periods, if so agreed upon in writing by authorized
representatives of both parties at least one hundred eighty (180) days prior to
the end of the initial or any renewal term. NSAI shall consent to each renewal
provided that (i) Distributor is current in all payments required under this
Agreement, (ii) is currently in compliance with all of the terms, conditions
and provisions of this Agreement, and (iii) NSAI and Distributor agree to new
Minimum Distributorship Fee/Purchase Requirements for each successive term of
this Agreement.
17. Termination.
17.1. Termination by NSAI. NSAI shall have the right to terminate
this Agreement in the event of any of the following by giving Distributor
ninety (90) days prior written notice during which period Distributor shall
have the right to cure any event described herein:
(a) Distributor fails to meet the minimum purchase
requirements set forth herein;
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<PAGE> 10
(b) Distributor ships any Products outside the Territory, or
if Distributor ships or sells the Products to any entity or person
whom Distributor knows or should know will or is likely to sell,
distribute, or otherwise dispose of such Products outside the
Territory;
(c) Distributor becomes insolvent or if bankruptcy or similar
proceedings are instituted against Distributor, and such termination
will take effect on the day after such event takes place, without it
being necessary for NSAI to give notice to Distributor;
(d) In the event of any material breach by Distributor of its
obligations hereunder;
(e) Upon any change of ownership, control, management or
geographic location of Distributor to which NSAI has not consented in
advance;
(f) Upon the expiration of the term of this Agreement;
(g) Distributor fails to maintain an amount of working
capital, including cash, unrestricted funds or other sources as NSAI
may from time to time deem acceptable, equal to or greater than Five
Hundred Thousand U.S. Dollars ($500,000.--U.S.) at any time during
the term of this Agreement; or
(h) In the event of any breach by Distributor of any its
obligations under a Promissory Note, Assignment and Assumption
Agreement or Security Agreement executed by Distributor pursuant to
SECTION 21 hereof.
17.2. Termination by Distributor. Distributor shall have the right
to terminate this Agreement in the event of any of the following by giving NSAI
ninety (90) days prior written notice during which period NSAI shall have the
right to cure any event described herein:
(a) NSAI is adjudicated to be insolvent or if bankruptcy or
similar proceedings are instituted against NSAI;
(b) NSAI sells Products to any other person inside the
Territory;
(c) NSAI fails to ship Product orders; or
(d) In the event of any material breach by NSAI of its
obligations hereunder.
18. Effect of Termination. Upon any termination or expiration of
this Agreement, or at anytime upon the request of NSAI, Distributor shall, at
Distributor's expense, return to NSAI all documents and other copies of any
Technical Information and Confidential Information in its possession or under
its control. Upon the termination of this Agreement, Distributor shall have a
period of ninety (90) days to dispose of its remaining inventory of Products
within the Territory in accordance with the terms of this Agreement. After
such ninety (90) day period, Distributor may only sell such remaining inventory
to NSAI. In the event of a bankruptcy or similar proceeding involving
Distributor, Distributor shall forfeit any and all rights to and in all
Products in Distributor's possession. NSAI and/or NSA shall have the right to
retrieve the Products upon payment of the shipping fees and expenses and the
return of the amount paid for the Products, less any amounts owed to NSAI by
Distributor. Upon termination of this Agreement pursuant to SECTION 17.2 or
due to force majeure, the payment pursuant to the promissory note attached to
this Agreement as EXHIBIT F shall be waived on a prorated basis.
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<PAGE> 11
19. Relationship Between the Parties. This Agreement shall not
create the relationship of principal and agent between the parties.
Distributor shall have no authority to make any commitment on behalf of NSAI,
and NSAI shall have no authority to make any commitment on behalf of
Distributor. Distributor warrants that it shall not act as or represent itself
to be an agent for NSAI, nor create or attempt to create any obligation or
liability on behalf of NSAI. NSAI warrants that it shall not act as or
represent itself to be an agent for Distributor, nor create or attempt to
create any obligation on behalf of Distributor.
20. Appointment of Agents. Distributor may appoint authorized
subdistributors, dealers or agents to Distribute within the Territory in such
numbers and at such locations as may be approved by NSAI, which approval shall
not be unreasonably withheld. Distributor shall be responsible for the
performance of its subdistributors, dealers or agents and nothing in this
Agreement shall create the relationship of principal and agent or distributor
between NSAI and any such distributor, dealer or agent. In the event
Distributor appoints subdistributors, dealers or agents, Distributor shall
enter into agreements with such subdistributors, dealers and agents to
Distribute within the Territory (collectively the "Subdistributor Agreements").
The Subdistributor Agreements shall be substantially in the form attached
hereto as EXHIBIT G, and shall not be amended or modified without the prior
written consent of NSAI, such consent not to be unreasonably withheld. NSAI
and Distributor acknowledge that, as provided in the Subdistributor Agreements,
in the event this Agreement terminates for any reason, NSAI shall have the
option, but not the obligation, to assume the rights and obligations of
Distributor under the Subdistributor Agreements.
21. Sale of Assets. In connection with the execution of this
Agreement, Distributor shall enter into a transaction both with NSA
International GmbH and NSA AG, the wholly-owned subsidiaries of NSAI
(collectively the "Subsidiaries"), for the sale of certain of the assets of the
Subsidiaries to Distributor and the assignment by the Subsidiaries and the
assumption by Distributor of certain of the liabilities of the Subsidiaries.
The enforcement of this Agreement is subject to the execution of the documents
necessary and sufficient for the sale of certain assets and, for the
assignment/assumption of certain liabilities of the Subsidiaries.
22. Compliance with Foreign Laws. Distributor will comply with all
applicable laws and regulations during the course of performance of this
Agreement and related activities. Should registration of this Agreement with
governmental authorities be required under the laws of any country in the
Territory, Distributor shall comply with such registration requirements and
provide proof of such compliance to NSAI.
23. Compliance with Foreign Corrupt Practices Act. Distributor
represents and agrees that it has not offered, given, promised to give or
authorized giving, and will not offer, give, promise to give or authorize
giving, directly or indirectly, any money or anything else of value to any
governmental official, political party, political official or candidate for
political office in connection with its activities hereunder.
24. Re-export: Applicability of Territory Laws. Distributor agrees
that any Products purchased for shipment to one country within the Territory
shall not be shipped or exported to another country within the Territory (or
outside the Territory) by Distributor, or by Distributor's purchasers, without
the prior written approval of NSAI. Notwithstanding the definition of
Territory set forth herein, nothing herein shall obligate NSAI to ship Products
to any country within the Territory which is the subject of any export
restriction directive of the U.S. government. Notwithstanding the foregoing,
NSAI acknowledges and agrees, however, that Distributor may use a central
inventory center from which it will ship to other countries within the
Territory, provided that any such country to which shipments are directed has
previously been approved by NSAI in accordance with this paragraph. Prior to
the first shipment of Products to any particular country within the Territory,
whether by NSAI or Distributor (in which case Distributor shall notify NSAI in
writing prior to any shipment), NSAI may request that a country specific
addendum be made to this Agreement to address the application or effect of any
country specific laws, regulations or decrees. Distributor agrees to execute
any such addenda as may, in NSAI's sole discretion, be required. The parties
agree that any such
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<PAGE> 12
addenda shall attempt to preserve, as closely as possible, the intent of the
parties as expressed in the main body of this Agreement, while addressing or
making adjustment for the application or effect of any country specific laws,
regulations or decrees. Distributor also agrees to cease shipments to any
particular country upon notice from NSAI, if in NSAI's opinion, such shipments
would violate any U.S. government or other country's law, regulation, order or
decree.
25. Counterparts: English Version. This Agreement shall be executed
in duplicate but shall not be binding upon NSAI until a copy, signed by
Distributor, is executed by NSAI. This Agreement is entered into in the
English language. Should a translation of this Agreement into any other
language be required or desired for any reason, it is understood that in all
matters involving the interpretation of this Agreement, the English text shall
govern.
26. Force Majeure. No liability shall result from the delay in
performance or non-performance (other than the obligation to pay for Products
shipped) caused by force majeure or circumstances beyond the reasonable control
of the party affected, including, but not limited to, Acts of God, fire, flood,
war, embargo, any United States or foreign government regulation, direction or
request, accident, labor trouble, or shortage of, or inability to obtain
material, equipment or transport.
27. Notice. Any notice required or permitted herein may be hand
delivered, faxed, telexed, cabled or mailed, properly addressed to the party to
be notified at the address set forth above or at the last known address given
by such party to the other party, and shall be deemed delivered when so
transmitted.
28. Governing Law: Jurisdiction and Venue. This Agreement and all
transactions contemplated by this Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Tennessee
without regard to principles of conflicts of laws. The parties acknowledge
that a substantial portion of negotiations, anticipated performance and
execution of this Agreement occurred or shall occur in Shelby County, Tennessee
and that, therefore, each of the parties irrevocably and unconditionally (a)
agrees that any suit, action or legal proceeding arising out of or relating to
this Agreement shall be brought in the courts of record of the State of
Tennessee in Shelby County or the federal district court serving Shelby County,
Tennessee; (b) consents to the jurisdiction of each such court in any suit,
action or proceeding; (c) waives any objection which it may have to the laying
of venue of any such suit, action or proceeding in any of such courts; and (d)
agrees that service of any court paper may be effected on such party by mail,
at the address provided in this Agreement, or in such other manner as may be
provided under applicable laws or court rules of said state.
29. Severability. In case any one or more of the provisions
contained in this Agreement shall be adjudged invalid, illegal or unenforceable
by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall be limited to such provisions and the remainder of this
Agreement shall be valid and binding upon NSAI and Distributor.
30. Headings. The headings contained in this Agreement are for
convenience only and shall not be deemed to affect in any way the language of
the provisions to which they refer.
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<PAGE> 13
31. Exhibits. The Exhibits referred to herein are expressly
incorporated into this Agreement by this reference.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the date first
written above.
HOLZMANN HOLDING AG
By:
-----------------------------------
Its:
----------------------------------
NSA INTERNATIONAL, INC.
By:
-----------------------------------
Its:
----------------------------------
JOINDER
NSA International Gmbh and NSA AG (collectively the "Subsidiaries"),
hereby join as parties to this Agreement and execute this joinder clause solely
for the purpose of effecting the sale of assets and transfer of liabilities
contemplated in SECTION 21 of this Agreement, and for no other purpose.
NSA INTERNATIONAL GMBH, NSA AG, a Swiss corporation
a German Corporation
By: By:
------------------------------ -----------------------------------
Title: Title:
-------------------------- --------------------------------
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<PAGE> 1
EXHIBIT 10.27
PROMISSORY NOTE
$1,500,000.-- U.S. Memphis, Tennessee
September 1, 1996
FOR VALUE RECEIVED, the undersigned, HOLZMANN HOLDING AG, (the "Maker"),
promises to pay to the order of NSA INTERNATIONAL GMBH, (the "Lender"), the
principal sum of One Million Five Hundred Thousand United States Dollars
($1,500,000.-- U.S.), together with interest from September 1, 1996 until
maturity, upon disbursed and unpaid principal balances, at the rate hereinafter
specified, said principal and interest being payable as follows:
Six (6) consecutive equal annual installments of Two Hundred and Fifty
Thousand each, together with any and all accrued but unpaid interest on the
unpaid principal balance of the indebtedness hereby evidenced ("Installment"),
the first of said Installments being due on September 1, 1997, and one on
September 1 of each and every year thereafter until all are fully paid (the
final Installment being due and payable, unless sooner declared to be due and
payable, on September 1, 2003).
The rate of interest will be the Prime Rate (as hereinafter defined).
Such Prime Rate as of the date of this Note is four and one-half percent
(4.5%). Maker shall have the right to prepay principal and interest on this
Note without penalty.
Any amounts not paid when due hereunder (whether by acceleration or
otherwise) shall bear interest after maturity at the rate of seven percent (7%)
per annum or (b) the maximum effective contract rate which may be charged by
the Lender under applicable law from time to time in effect.
In the event that the foregoing provisions should be construed by a
court of competent jurisdiction not to constitute a valid, enforceable
designation of a rate of interest or method of determining same, the
indebtedness hereby evidenced shall bear interest at the maximum effective
contract rate which may be charged by the Lender under applicable law from time
to time in effect.
This Note is secured by that certain Security Agreement ("Security
Agreement") of even date herewith covering certain of Maker's assets received
by Maker pursuant to the terms of the Distribution Agreement and Bill of Sale
dated of even date herewith between the Maker and Lender.
All installments of interest, and the principal hereof, are payable by
Maker's corporate check at 4260 East Raines Road, Memphis, Tennessee 38118, or
at such other place as the holder may designate in writing, in lawful money of
the United States of America, which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment.
If the Maker shall fail to make the payment of principal and any
installment of interest, as above provided, and such failure shall continue
unremedied for a period of five (5) days following written notice thereof, or
upon the occurrence of any Event of Default, as that term is defined in the
Security Agreement, or upon the dissolution of the Maker and (if there is a
cure period applicable thereto) such default is not cured within such
applicable cure period, then and in any such event, the entire unpaid principal
balance of the indebtedness evidenced hereby, together with all interest then
accrued, shall, at the absolute option of the holder hereof, at once become due
and payable, without demand or notice, the same being hereby expressly waived.
If this Note is placed in the hands of an attorney for collection, by
suit or otherwise, the Maker shall pay on demand all costs of collection and
litigation (including court costs), together with a reasonable attorney's fee
if Lender is successful in the litigation.
The Maker and any endorsers or guarantors hereof waive protest,
demand, presentment, and notice of dishonor, and agree that this Note may be
extended, in whole or in part, without limit as to the number
Exhibit G-2
<PAGE> 2
of such extensions or the period or periods thereof, with notice to them and
without affecting their liability thereon.
It is the intention of the Lender and the Maker to comply strictly
with applicable usury laws; and, accordingly, in no event and upon no
contingency shall the holder hereof ever be entitled to receive, collect, or
apply as interest any interest, fees, charges or other payments equivalent to
interest, in excess of the maximum effective contract rate which the Lender may
lawfully charge under applicable statutes and laws from time to time in effect;
and in the event that the holder hereof ever receives, collects, or applies as
interest any such excess, such amount which, but for this provision, would be
excessive interest, shall be applied to the reduction of the principal amount
of the indebtedness hereby evidenced; and if the principal amount of the
indebtedness evidenced hereby, all lawful interest thereon and all lawful fees
and charges in connection therewith, are paid in full, any remaining excess
shall forthwith be paid to the Maker, or other party lawfully entitled thereto.
All interest paid or agreed to be paid by the Maker shall, to the maximum
extent permitted under applicable law, be amortized, prorated, allocated and
spread throughout the full period until payment in full of the principal so
that the interest hereon for such full period shall not exceed the maximum
amount permitted by applicable law. Any provision hereof, or of any other
agreement between the holder hereof and the Maker, that operates to bind,
obligate, or compel the Maker to pay interest in excess of such maximum
effective contract rate shall be construed to require the payment of the
maximum rate only. The provisions of this paragraph shall be given precedence
over any other provision contained herein or in any other agreement between the
holder hereof and the Maker that is in conflict with the provisions of this
paragraph.
This Note shall be governed and construed according to the statutes
and laws of the State of Tennessee of the United States of America therein from
time to time in effect without regard to principles of conflicts of law. Maker
irrevocably and unconditionally (a) agrees that any suit, action or legal
proceeding arising out of or relating to this Note shall be brought in the
courts of record of the State of Tennessee in Shelby County or the federal
district court serving Shelby County, Tennessee; (b) consents to the
jurisdiction of each such court in any suit, action or proceeding; (c) waives
any objection which it may have to the laying of venue of any such suit, action
or proceeding in any of such courts; and (d) agrees that service of any court
paper may be effected on Maker by mail, at the address provided in this Note,
or in such other manner as may be provided under applicable laws or court rules
of said state.
This Note is entered into in the English language. Should a
translation of this Note into any other language be required or desired for any
reason, it is understood that in all matters involving the interpretation of
this Note, the English text shall govern.
All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set
forth below:
If to the Seller: Copy to:
Charles R. Evans G. Robert Morris, Esq.
NSA International Gmbh Baker, Donelson, Bearman & Caldwell
c/o NSA International, Inc. 165 Madison Ave., Suite 2000
4260 East Raines Road Memphis, Tennessee 38103
Memphis, TN 38118
If to the Buyer: Copy to:
Holzmann Holding AG Dr. Jurg Galliker, Esq.
Baarerstr.8 KPMG
Postfach 244 Innere Margarethenstr.5
6301 Zug 4001 Basel
Exhibit G-3
<PAGE> 3
Any party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set forth
above, using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, facsimile, ordinary mail, or electronic
mail), but no such notice, request, demand, claim or other communication shall
be deemed to have been duly given unless and until it is actually received by
the intended recipient. Any party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered to it by giving the other party notice in the manner herein set forth.
HOLZMANN HOLDING AG
By:
-----------------------------------
Title:
--------------------------------
Exhibit G-4
