EXHIBIT 10.03
ESCROW AGREEMENT
THIS AGREEMENT is made and entered into this 26 day of December, 1996,
by and between NATURAL BABY COMPANY, a New Jersey Corporation ("Seller") and
KIDS STUFF, INC., a Delaware corporation ("Buyer").
R E C I T A L S:
WHEREAS, Seller has agreed to sell to Buyer, and Buyer has agreed to
purchase from Seller certain business assets of Seller (the "Assets")
pursuant to the terms and conditions of a certain Asset Purchase
Agreement, dated May 10, 1996, as amended by a certain Addendum
effective as of November 10, 1996 (collectively the "Asset Purchase
Agreement"); and
WHEREAS, the Asset Purchase Agreement contemplates that the closing of
the purchase and sale of the Assets shall be consummated prior to the
date that the purchase price is paid by Buyer to Seller; and
WHEREAS, the Buyer and Seller have agreed that the closing be subject to
the terms of this Escrow Agreement pending the payment of the final
purchase price by Buyer to Seller; and
WHEREAS, the parties hereto desire to have Xxxxxxxx & Shohl, L.L.P.
serve as the escrow agent to hold the closing documents pursuant to the
terms of this Escrow Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth herein, and for other good and valuable considerations, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
T E R M S:
1. APPOINTMENT OF ESCROW AGENT. Seller and Buyer hereby appoint
Xxxxxxxx & Shohl, L.L.P. as the Escrow Agent and the Escrow Agent
hereby accepts such appointment to serve as the Escrow Agent all
in accordance with the terms and conditions set forth herein.
2. TERM. The term of this Agreement shall commence as of the closing
of the purchase and sale of the Assets (the "Closing Date") and
the Escrow Agent's obligations hereunder shall terminate upon the
earlier of the Final Closing Date or receipt of notice of
Sellers' termination of the transaction in accordance with
Paragraph 4 after the Effective Date of the Kids Stuff, Inc.
public offering of common shares.
3. DELIVERY OF CLOSING DOCUMENTS. Upon the Closing Date, the parties
hereto shall deliver to the Escrow Agent the Asset Purchase
Agreement and any and all other agreements and documents related
to the purchase and sale of the Assets (the "Closing Documents").
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4. DUTIES. The Escrow Agent shall receive and accept the Closing
Documents on the Closing Date and shall hold the Closing
Documents pursuant to the terms hereof. In no event shall the
Escrow Agent be obligated to accept any notice, request or demand
from anyone other than a party hereto.
5. DISPOSITION OF DOCUMENTS. Upon delivery of a certified check made
payable to Seller in the amount $1,075,000, a certified check in
the amount of $203,358.25 plus interest thereon payable to Seller
and the creditors listed on Schedule 1.2 of the Purchase
Agreement and a promissory note made payable to Seller in the
amount of $250,000 (the "Purchase Payment") Escrow Agent shall
deliver the Purchase Payment to Seller and the Closing Documents
to the respective parties. Thereupon, the closing of the Purchase
and sale of the Assets shall become Final. In the event of the
termination of the Escrow Agent's obligations under this
Agreement prior to the payment in full of the Purchase Price by
Buyer to Seller, the Escrow Agent shall distribute the Closing
Documents to the respective parties and thereafter shall have no
further obligation or liability with respect thereto.
6. COMPENSATION. The Escrow Agent shall be entitled to be
compensated by the Buyer for its reasonable costs and expenses of
performing its duties hereunder.
7. LIABILITY OF ESCROW AGENT. The Escrow Agent shall have no
liability for anything done or omitted to be done by it hereunder
except for its gross negligence or willful misconduct. The Escrow
Agent shall be under no duty to determine the truth or validity
of any notice or instruction received by it hereunder, and it
shall in no event be under any duty to determine whether any
party hereto has or has not performed their obligations under
this Agreement. Notwithstanding any provisions to the contrary
contained in this Agreement:
a) The Escrow Agent shall be fully protected and shall incur
no liability in acting upon any notice, request, consent
or other instrument believed to be genuine or to have been
signed or presented by the proper person or persons;
b) Receipt of any written notice or instruction shall be
deemed to occur only when the notice or instruction,
signed by the party or parties giving it, is actually
received by the Escrow Agent;
c) The Escrow Agent shall not be bound by any notice of or
demand with respect to, any waiver, modification,
amendment, cancellation, rescission, or supercisions of
this Agreement, unless in writing and signed by the
parties hereto;
d) In the event of any controversy or dispute or any
question as to the construction of this Agreement or with
respect to any action to be taken by the Escrow Agent
hereunder, the Escrow Agent may seek advice of counsel of
its own selection and shall incur no liability for any
action taken or suffered in good faith by it in
accordance with the advice or opinion of such counsel;
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e) The Escrow Agent's duties and obligations hereunder shall
be governed solely by the provisions of this Agreement.
The Escrow Agent shall assume no duties other than those
expressly imposed herein and it shall not be required to
take any action other than in accordance with the terms
hereof;
f) No amendment or modification of the terms of this
Agreement shall effect the rights and duties of the
Escrow Agent hereunder unless its written consent thereto
shall have been obtained;
g) Seller acknowledges that nothing in this Agreement shall
cause or give rise to an attorney-client relationship
between Escrow Agent and Seller or a conflict of interest
among the parties hereto. The Escrow Agent has made no
representations, either written or oral, which shall be
construed by Seller as creating an attorney-client
relationship with Seller. Seller hereby waives, releases
and relinquishes any and all claims against the Escrow
Agent based on or related to the Escrow Agent's breach of
any duty owed by the Escrow Agent to Seller in the
capacity as attorney or legal counsel for Seller,
including, but not limited to, any claims for conflict of
interest among the parties hereto.
8. INDEMNIFICATION. The parties hereto agree to exonerate and hold
the Escrow Agent harmless from any liabilities, including court
costs and attorney fees, arising out of any dispute between
Seller, Buyer or any other person relative to the Escrow Agent's
duties and obligations under this Escrow Agreement. The Escrow
Agent shall not be required to defend any legal proceeding which
may be instituted against it, in respect of the subject matter of
this Escrow Agreement unless requested so to do by Seller or
Buyer, in which event it shall have the right to be indemnified
by the party so requesting to its satisfaction against the cost
and expense of such defense. It shall not be required to
institute legal proceedings of any kind.
9. TERMINATION. This Agreement shall terminate and the Escrow Agent
shall have no further obligation with respect hereto upon the
earlier of the expiration of the term of this Agreement or the
distribution of the Closing Documents held by the Escrow Agent
pursuant to the terms of this Agreement.
10. NOTICES. Any notices or instructions to be given hereunder shall
be validly given if set forth in writing and mailed or delivered
as follows:
TO SELLER:
Natural Baby Company
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxx
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TO BUYER:
Kids Stuff, Inc.
0000 Xxxxxx Xxxxxxx Xxxxxx X.X., Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
TO ESCROW AGENT:
Xxxxxxxx & Shohl, L.L.P.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx X. XxXxxxx
11. INTEGRATED AGREEMENT; MODIFICATION; WAIVER. This Agreement
constitutes the entire understanding and agreement between the
parties pertaining to the subject matter contained herein and
supersedes all prior and contemporaneous agreements,
representations and understandings of the parties not otherwise
contained in this document. No alteration, modification,
amendment or change of this Agreement shall be binding unless
executed in writing by parties. No waiver of any of the
provisions of this Agreement shall be deemed a waiver of any
other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver.
12. GOVERNING LAW. The provisions of this Agreement shall be
construed under and the respective rights and obligations of the
parties shall be determined with reference to the laws of the
State of Ohio.
13. CAPTIONS. The paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of the Agreement.
14. COUNTERPART EXECUTION. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
15. SUCCESSORS AND ASSIGNS. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto, their successors and
assigns.
16. GENDER. All personal pronouns used in this Agreement shall
include the other genders, whether used in the masculine,
feminine or neuter, and the singular shall include the plural
whenever and as often as may be appropriate.
17. AGREEMENT TO TAKE NECESSARY AND DESIRABLE ACTIONS. The parties
hereto agree to execute and deliver such other assignments,
conveyances, instruments of transfer, documents, financing
statements, certificates and other writings and to take such
other actions as may be necessary or desirable in order to
consummate or implement expeditiously the transactions
contemplated by this Agreement.
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18. SEVERABILITY. Any term or provision of this Agreement which is
finally determined to be invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
19. SURVIVAL. All representations, warranties, covenants, and
indemnities made by the parties in this Agreement shall be deemed
made for the purpose of inducing the other to enter into this
Agreement, and shall survive the termination of the Escrow
Agent's obligations hereunder and remain operative in full force
and effect after the termination of this Agreement.
20. ENFORCEABILITY. This document shall not be deemed for any purpose
to represent the agreement or basis of the bargain between the
parties until it has been completely executed by all parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all
as of the day and year first above written.
NATURAL BABY COMPANY
By: /s/ XXXXXX XXXXXX, PRESIDENT
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Xxxxxx Xxxxxx, President
KIDS STUFF, INC.
By: /s/ XXXXXXX X. XXXXXX, CHIEF EXECUTIVE OFFICER
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Xxxxxxx X. Xxxxxx, Chief Executive Officer
XXXXXXXX & SHOHL, L.L.P.
By: /s/ XXXXX X. XXXXXXX, PARTNER
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Xxxxx X. XxXxxxx, Partner
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