Announcement Regarding Funai Global Licensing Agreement for Philips Audio, Video, Multimedia and Accessories Business

  Announcement Regarding Funai Global Licensing Agreement for Philips Audio,
  Video, Multimedia and Accessories Business

Business Wire

ATLANTA -- October 29, 2013

As announced by Funai Electric Co., Ltd. (headquarters: Daito, Osaka;
hereinafter, “Funai”) on January 29, 2013 in “Notice of Acquisition of
Lifestyle Entertainment Businesses of PHILIPS”, Funai reached an agreement
with Royal Philips (headquarters: the Netherlands; NYSE: PHG; AEX: PHIA;
hereinafter, “PHILIPS”) to acquire from Philips all shares in a company that
will hold the operations of the PHILIPS’ Lifestyle Entertainment Business.

However, Funai received notice from PHILIPS on October 25, 2013 that Philips
will terminate the transaction.

“We are disappointed that Philips has terminated the contract from their side
and we are not able to acquire the Lifestyle Entertainment business unit,”
stated Tomonori Hayashi, CEO, Funai Electric. “We have had a long and
prosperous relationship with Philips and look forward to continuing that with
our brand licensing and distribution agreements of Philips Television and
Lifestyle Entertainment products in North America.”

At the same time Philips informed Funai that it will take legal action to
recover damages caused by an alleged breach of contract by Funai and that it
will submit a request for arbitration at the International Court of
Arbitration (ICC). In response, Funai states that there is no such breach of
the SPA and that Funai at all times has respected and continues to respect the
terms and conditions of the SPA. “We respected the agreement with Philips and
feel that there is no grounds for breach,” Tomonori Hayashi stated.

“As Philips stated earlier, there will be no impact on existing agreements
between the Funai’s subsidiaries P&F USA and P&F Mexico and Philips P&F/Funai
will continue to be the exclusive licensee for TV, Video and Home Theatre
products, and will remain the exclusive distributor for Lifestyle
Entertainment products in North America,” Hayashi stated.

The Company will make further disclosures when required.

About Funai Electric Co., Ltd.

Funai Electric Co., Ltd., established in 1961, is headquartered in Osaka,
Japan and is listed in the Tokyo and Osaka Securities Exchange First Section
(6839). In addition to the consumer electronic product brands sold by FUNAI
Corporation in the USA and the products sold by other FUNAI sales and
marketing companies in Japan, Asia, Europe, and South America, Funai Electric
Company, Ltd. is a major original equipment manufacturer (OEM) supplier for
consumer electronics, computer, and computer peripheral companies on a global
basis. For more information on the Funai group, please visit
www.funaiworld.com.

About P&F

P&F is a subsidiary of the Funai Electric Co., LTD, Inc. and is the exclusive
licensee for Philips consumer televisions and home theater and Philips
Hospitality in North America. P&F also is the exclusive distributor in North
America for Philips lifestyle entertainment including, home and portable
audio, headphones, portable DVD and accessories. Funai Electric Co., Ltd.,
established in 1961, is headquartered in Osaka, Japan and is listed in the
Tokyo Securities Exchange First Section (6839). In addition to the consumer
electronic product brands sold by FUNAI Corporation and the products sold by
other FUNAI sales and marketing companies in Asia, Europe, and South America,
Funai Electric Company, Ltd. is a major original equipment manufacturer (OEM)
supplier for appliance, consumer electronics, computer, and computer
peripheral companies on a global basis.

All trademarks and copyrights are the property of their respective owners.

Contact:

For P&F USA and P&F Mexicana
Lindsay Woods, +1 678 592 3844
lwoods@redmedia.biz