Exhibit 10.1
PROMISSORY NOTE

US$23,501,513.71   February 21, 2007

     FOR VALUE RECEIVED, CAPETRONIC DISPLAY LIMITED, a British Virgin Islands
corporation, with offices located at Grande Building, No. 5 Zhongshan Road,
Zhongshan, Guandong, P.R.C., China, NAKAMICHI CORPORATION, a Japanese
corporation, with offices located at 23-3 Higashi 2-chome Shibuya-ku, Tokyo
Japan, AKAI ELECTRIC (CHINA) CO. LTD., a Peoples’ Republic of China corporation,
with offices located at Grande Building, No. 5 Zhongshan Road, Zhongshan,
Guandong, P.R.C., China, and SANSUI ELECTRIC (CHINA) CO. LTD., a Peoples’
Republic of China corporation, with offices located at Grande Building, No. 5
Zhongshan Road, Zhongshan, Guandong, P.R.C., China (each an “Issuer”, and
collectively, the “Issuers”), hereby, jointly and severally, promise to pay to
EMERSON RADIO CORP., a Delaware corporation, or its successors and/or assigns
(the “Holder”), the sum of TWENTY-THREE MILLION FIVE HUNDRED ONE THOUSAND FIVE
HUNDRED THIRTEEN and 71/100 Dollars ($23,501,513.71) in lawful money of the
United States of America, together with interest thereon at the rate set forth
in Section 2 below and payable in accordance with the provisions of this
Promissory Note.
     1. PAYMENTS. Except as otherwise provided herein, payments of principal and
interest shall be made in installments (each, an “Installment”) in such amounts
and on such dates as set forth on Schedule 1 to this Promissory Note, with all
amounts of interest due hereunder scheduled to be paid in the final Installment.
All of the foregoing payments and any other payments under this Promissory Note
shall be made by wire transfer of immediately available funds pursuant to the
following instructions:

             
 
  To:   Emerson Radio Corp.
 
      5101 Statesman Dr
 
      Irving, Texas 75063
 
           
 
  Account #:        
 
           
 
  SWIFT Code:    
 
           
 
  ABA #:        
 
           
 
  Bank:    
 
       

     2. INTEREST. Interest on the unpaid principal balance hereof shall accrue
at a rate equal to EIGHT and 25/100th percent (8.25%) per annum, commencing on
February 20, 2007, until all obligations hereunder shall have been paid and
satisfied in full; provided, however, that upon the occurrence of an Event of
Default (as defined below), the interest rate shall automatically increase by
TWO percent (2%) per annum until such time as such Event of Default shall be
cured or waived by the Holder.

 

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     3. OPTIONAL PREPAYMENT. The Issuers may prepay the principal amount
outstanding hereunder, together with all accrued and unpaid interest, in whole
or in part, at any time or from time to time without premium or penalty. All
payments made hereunder, including prepayments, shall first be applied to
accrued and unpaid interest, and the balance, if any, towards reduction of the
principal amount owed hereunder.
     4. EVENTS OF DEFAULT.
          (a) The occurrence of any one or more of the following events shall
constitute an event of default (hereinafter, an “Event of Default”) under this
Promissory Note:
          (i) the Issuers’ failure to pay all or any part of the principal or
interest hereunder when due;
          (ii) any Issuer shall deny any of its obligations under this
Promissory Note, or any Issuer or any other person acting on behalf of an Issuer
shall challenge the effectiveness or enforceability of this Promissory Note;
          (iii) The Grande Holdings Limited, a Bermuda corporation (the “Parent
Guarantor”), shall deny any of its obligations under, or challenge the
effectiveness or enforceability of the Guaranty, dated as of February 21, 2007,
executed and delivered by the Parent Guarantor for the benefit of the Holder
(the “Guaranty”);
          (iv) the invalidity or unenforceability of the Guaranty; and/or
          (v) any Issuer or the Parent Guarantor shall have applied for or
consented to the appointment of a custodian, receiver, trustee or liquidator, or
other court-appointed fiduciary of all or a substantial part of its properties;
or a custodian, receiver, trustee or liquidator or other court appointed
fiduciary shall have been appointed for any Issuer or the Parent Guarantor with
or without the consent of such person; any Issuer or the Parent Guarantor is
generally not paying its debts as they become due by means of available assets
or is insolvent, or has made a general assignment for the benefit of creditors;
any Issuer or the Parent Guarantor files a voluntary petition in bankruptcy, or
a petition or an answer seeking reorganization or an arrangement with creditors
or seeking to take advantage of any insolvency law (including, without
limitation, Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute, or any other federal, state or
foreign bankruptcy, reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors’ rights generally (any of the foregoing,
an “Insolvency Law”)), or an answer admitting the material allegations of a
petition in any bankruptcy, reorganization or insolvency proceeding or has taken
action for the purpose of effecting any of the foregoing; or the appointment of
any trustee, receiver, custodian, liquidator, or other court-appointed fiduciary
of such Issuer or the Parent Guarantor, as the case may be, or of all or any
substantial part of such person’s properties, after the commencement of any
proceeding against any Issuer

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or the Parent Guarantor seeking any reorganization, rehabilitation, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
Insolvency Law.
          (b) Upon the occurrence of any Event of Default, the Holder may
declare all amounts due hereunder to be due and payable immediately and, upon
any such declaration, the same shall become and be immediately due and payable.
If an Event of Default specified in clause (vi) occurs, then all amounts due
hereunder shall become immediately due and payable without any declaration or
other act on the part of the Holder. Upon the occurrence of any Event of
Default, the Holder may, in addition to declaring all amounts due hereunder to
be immediately due and payable, pursue any available remedy, whether at law or
in equity. The Holder shall be deemed to have made such declaration to the
Issuers under this Section 4(b) by (i) providing written notice to any Issuer at
the address set forth in the first paragraph of this Promissory Note by any
method reasonably selected by the Holders, which notice shall be deemed to be
received by both Issuers upon receipt by the Holder of a confirmation of
delivery to any Issuer, (ii) upon the Holder or a person acting on its behalf
making a public announcement setting forth the Holder’s intention to accelerate
the obligations under this Promissory Note (including, without limitation, by
including such information in a report filed with the U.S. Securities and
Exchange Commission by the Holder), or (iii) providing notice of such
declaration to the Parent Guarantor in accordance with the notice provisions
under the Guaranty.
     5. FEES AND EXPENSES. Upon the occurrence of an Event of Default, the
Issuers shall pay all reasonable costs that the Holder incurs in enforcing this
Promissory Note, including, without limitation, reasonable attorneys fees and
expenses.
     6. WAIVER OF PRESENTMENT, DEMAND AND DISHONOR. No delay on the part of the
Holder in exercising any power or right hereunder shall operate as a waiver of
any such power or right; nor shall any single or partial exercise of any power
or right preclude any other or further exercise of such power or right, or the
exercise of any other power or right, and no waiver whatsoever shall be valid
unless in writing, signed by the Holder, and then only to the extent expressly
set forth therein. No remedy is exclusive of any other remedy and all remedies
shall be cumulative to the maximum extent permitted by applicable law. Each
Issuer hereby waives presentment, demand for payment, diligence, notice of
dishonor and all other notices or demands in connection with the delivery,
acceptance, performance, default or indorsement of this Promissory Note.
     7. AMENDMENTS AND ASSIGNMENT. This Promissory Note can be amended only by
an instrument signed by the Holder and the Issuers. Neither this Promissory Note
nor any of the obligation of the Issuers under this Promissory Note may not be
assigned or transferred without the prior written consent of the Holder. The
Holder may sell, assign, transfer, pledge, hypothecate or otherwise dispose of
this Promissory Note or any of its rights hereunder without the consent of the
Issuers.
     8. GOVERNING LAW. This Promissory Note has been delivered in the State of
New York and is to be construed and enforced according to, and governed by, the
laws of the State of New York without regard to the choice of law principles
thereof.

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     9. CONSENT TO JURISDICTION; CONSENT TO JURISDICTION. Each Issuer hereby
irrevocably submits to the jurisdiction of the courts of the State of New York
and to the jurisdiction of the United States District Court for the Southern
District of New York, in each case, located in the Borough of Manhattan in The
City of New York, for the purposes of any suit, action or other proceeding
brought by Holder arising out of or based upon this Promissory Note. EACH ISSUER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT ISSUER IS NOT SUBJECT PERSONALLY TO THE JURISDICTION
OF THE ABOVE-NAMED COURTS, THAT SUCH ISSUER’S PROPERTY IS EXEMPT OR IMMUNE FROM
ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR
THAT THIS PROMISSORY NOTE MAY NOT BE ENFORCED IN OR BY SUCH COURT.
     10. JURY WAIVER. EACH ISSUER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT TO REQUEST OR TO HAVE A TRIAL BY JURY IN ANY
CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS PROMISSORY NOTE OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.
[Signature Page Follows.]

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     IN WITNESS WHEREOF, each Issuer has caused this Promissory Note to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.

              ATTEST       CAPETRONIC DISPLAY LIMITED
 
           
/s/ Ruby Lee
      By:   /s/ Paul Law Fwok Fai
 
           
Name: Ruby Lee
          Name: Paul Law Fwok Fai
Title: Authorised Signatory
 
            ATTEST       NAKAMICHI CORPORATION
 
           
/s/ Ruby Lee
      By:   /s/ Michael Binney
 
           
Name: Ruby Lee
          Name: Michael Binney
Title: Director
 
            ATTEST       AKAI ELECTRIC (CHINA) CO. LTD.
 
           
/s/ Ruby Lee
      By:   /s/ Paul Law Fwok Fai
 
           
Name: Ruby Lee
          Name: Paul Law Fwok Fai
Title: Authorised Signatory
 
            ATTEST       SANSUI ELECTRIC (CHINA) CO. LTD.
 
           
/s/ Ruby Lee
      By:   /s/ Paul Law Fwok Fai
 
           
Name: Ruby Lee
          Name: Paul Law Fwok Fai
Title: Authorised Signatory

Signature Page To Promissory Note

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SCHEDULE 1
INSTALLMENTS

                  Installment           Installment Amount Number   Payment Date
  (in US Dollars)
 
               
1.
  April 1, 2007   $ 672,000.00  
2.
  April 7, 2007   $ 4,626,800.00  
3.
  April 26, 2007   $ 4,785,246.38  
4.
  May 4, 2007   $ 4,543,664.18  
5.
  May 5, 2007   $ 1,780,790.62  
6.
  May 10, 2007   $ 120,271.88  
7.
  May 17, 2007   $ 4,225,894.55  
8.
  May 26, 2007   $ 1,056,729.53  
9.
  June 3, 2007   $ 2,060,348.47  

Schedule 1 To Promissory Note