Exhibit 2.1
ASSET PURCHASE AGREEMENT
AGREEMENT, made as of the 30th day of November, 2001 by and between V2
Development Company Limited, a company incorporated under the laws of the Hong
Kong Special Administrative Region of the Peoples' Republic of China with
offices located at Unit D-F, 26th Floor, 388 Castle Peak Road, Tsuen Wan, Hong
Kong ("Purchaser"), and Monogram International, Inc., a Delaware corporation
with offices located at 12395 75th Street, North Largo, FL 33733,("Monogram 1"),
Monogram Products (H.K.) Limited, a company incorporated under the laws of the
Hong Kong Special Administrative Region of the Peoples' Republic of China with
offices located at Unit D-F, 26th Floor, 388 Castle Peak Road, Tsuen Wan, Hong
Kong, ("Monogram 2"), Monogram Acquisition I, LLC, a Delaware limited liability
company with offices located at 00000 00xx Xxxxxx, Xxxxx Xxxxx, XX 00000,
("Monogram 3"), (Monogram 1, Monogram 2 and Monogram 3 collectively, hereinafter
referred to as the "Seller") and Toymax International, Inc., a Delaware
corporation with offices located at 000 Xxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx
00000 (hereinafter referred to as "Toymax").
W I T N E S S E T H
WHEREAS, Seller is in the business of creating, designing, marketing
and distributing certain innovative and technological advanced toys as well as
leisure products which are sold in the United States and throughout the world
(the "Toy Business");
WHEREAS, Seller desires to sell, and cause to be transferred, assigned
and conveyed to Purchaser, and Purchaser desires to accept and purchase, certain
assets of the Seller relating to the Toy Business, subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms shall
have the following meanings and, as the context requires, the singular shall
include the plural:
(a) The term "Accounts Receivable" means (a) all trade
accounts receivable and other rights to payment from
customers of the Seller as set forth on the Trial
Balance.
(b) The term "Acquired Assets" shall have the meaning
specified in paragraph 2.
(c) The term "Assigned Contracts" means all material
contracts, Assigned Licenses and leases of the Seller
as set forth on Schedule 2(ii).
(d) The term "Assumed Liabilities" shall have the meaning
specified in paragraph 3(b).
(e) The term "Assigned Licenses" shall be those certain
licenses set forth on SCHEDULE 1(e).
(f) The term "Assumption Notice" shall have the meaning
specified in paragraph 6(c)(i).
(g) The term "Closing" shall have the meaning specified
in paragraph 9(a).
(h) The term "Closing Date" means the date specified in
paragraph 9(a).
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(i) The term "Contemplated Transaction" shall have the
meaning specified in paragraph 4(a).
(j) The term "Indemnification Notice" shall have the
meaning specified in paragraph 6(c).
(k) The term "Inventory" means all products owned and
held for future sale by the Seller as set forth on
the Trial Balance.
(l) The term "Lien" means claims, charges, set-offs,
security interests and any other encumbrance,
interest or lien or other restrictions or limitations
of any kind or nature whatsoever.
(m) The term "Person" means any natural person,
corporation, division of a corporation, partnership,
trust, joint venture, association, firm, company,
limited liability company, estate or unincorporated
organization.
(n) The term "Proprietary Rights" means a patent, claim
of copyright, trademark, trade name, brand name,
service xxxx, logo, symbol, trade dress or design, or
any other invention, trade secret, technical
information, know-how, proprietary right or
intellectual property owned by Seller.
(o) The term "Purchase Price" shall have the meaning
specified in paragraph 3(a).
(p) The term "Transaction Documents" shall have the
meaning specified in paragraph 4(a).
(q) The term "Transfer Risk" shall have the meaning
specified in paragraph 3(b).
(r) The term Trial Balance shall mean the trial balance
of the Seller dated as of 11/30/01 annexed as
Schedule 1(r).
2. PURCHASE AND SALE. Upon the terms and subject to the conditions hereof,
Seller shall sell and cause to be transferred, assigned and conveyed to
Purchaser and Purchaser shall purchase and acquire from Seller on the Closing
Date for the consideration hereinafter set forth, all of the right, title and
interest of Seller in and to those certain assets of the Seller (collectively,
the "Acquired Assets") consisting of the following:
(i) all assets of the Seller set forth on the Trial Balance
excluding only prepaid taxes and income tax receivable;
(ii) the Assigned Contracts specified on SCHEDULE 2(ii);
(iii) the Assigned Licenses specified on Schedule 1(e); and
(iv) the Proprietary Rights listed on Schedule 2(iv).
3. PURCHASE PRICE, PAYMENT; ASSUMPTION OF LIABILITIES; TRANSFER RISK.
(a) In consideration of the sale of the Acquired Assets by Seller to
Purchaser pursuant hereto and upon the terms and subject to the conditions
hereof, Purchaser shall pay to Seller Two Million Two Hundred Fifty Thousand
U.S. Dollars ($2,250,000.00) (the "Purchase Price"). The Purchase Price shall be
paid on the Closing Date in immediately available funds via wire transfer or by
certified or official bank check of a member bank to the New York Clearing
House.
(b) Seller acknowledges and agrees that, except as specifically set
forth on SCHEDULE 3(b) Purchaser is acquiring the Acquired Assets hereunder
without any assumption of Seller's obligations or liabilities (the "Assumed
Liabilities"). Except for the Assumed Liabilities, Purchaser shall not be deemed
to have assumed, nor shall Purchaser be liable or responsible for, any
obligations or liabilities of Seller.
(c) Purchaser acknowledges and agrees that the consent of licensors
under the Assigned Licenses and certain consents under other Assigned Contracts
is required in order to
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duly assign those agreements to Purchaser. Purchaser further acknowledges that
such consents have not been obtained. Seller agrees to cooperate with Purchaser
to obtain all such consents, however, Purchaser assumes the full financial risk
with respect to the failure to obtain any such consent (the "Transfer Risk").
(d) The Acquired Assets shall be transferred, assigned, conveyed and
delivered to Purchaser free and clear of any and all Liens, liabilities and
interests except as specified on SCHEDULE 3(b).
(e) The Purchase Price to be paid hereunder for the transfer of the
Acquired Assets shall be allocated by Purchaser and Seller as set forth on
SCHEDULE 3(e) attached hereto. Purchaser and Seller shall reflect the Acquired
Assets upon their respective books and records for tax reporting purposes in
accordance with such schedule and shall file all tax returns, declarations,
reports and other filings in accordance with and based upon such schedule,
including, without limitation, the reports required to be filed under Section
1060 of the Internal Revenue Code of 1986, as amended, if applicable. Purchaser
and Seller shall not take a position that is inconsistent with such allocation
in any proceeding or investigation before any court, arbitrator or governmental
authority.
(f) Seller agrees and acknowledges that in the event the Purchase Price
is delivered to Seller prior to the Closing, if for any reason the Closing does
not occur, Seller will, upon demand, return the Purchase Price to the Purchaser.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby makes the
following representations and warranties to Purchaser:
(a) AUTHORITY RELATIVE TO THIS AGREEMENT. (i) Seller has the full
power, capacity, and authority to execute and deliver this Agreement and all
ancillary documents and agreements relating to this Agreement (collectively, the
"Transaction Documents") and to carry out its obligations thereunder. The
execution, delivery, and performance of the Transaction Documents and the
consummation of the transaction contemplated thereby (collectively, the
"Contemplated Transaction") have been duly and validly authorized by Seller. The
execution and delivery of the Transaction Documents and the Contemplated
Transaction have been duly authorized by the Boards of Directors of Seller and
no other corporate proceedings on the part of Seller are necessary in order to
authorize the Contemplated Transaction.
(ii) This Agreement has been duly and validly executed and
delivered by Seller and (assuming the valid execution and delivery thereof by
Purchaser) constitutes the legal, valid, and binding agreement of Seller,
enforceable against Seller in accordance with its terms, except as those
obligations and their enforceability may be limited by applicable bankruptcy and
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies is subject to the discretion
of the court before which any proceeding therefore may be brought (whether at
law or in equity).
(b) NO CONFLICTS. The execution, delivery, and performance by Seller of
this Agreement does not, and the Contemplated Transaction will not: (i) violate
any provision of the articles of incorporation or by-laws of Seller; (ii) except
with respect to the Transfer Risk, and the CIT Consent (as defined at paragraph
8(b)(v), to Seller's knowledge, violate, conflict with, or result in a material
breach or material default under (with or without the giving of notice or the
passage of time or both), or permit the suspension or termination of, any
non-license material contract (oral or written) to which Seller is a party or by
which the Seller may be bound or subject; or (iii) violate any judgment, order,
injunction, decree or award against, or binding upon, Seller.
(c) CORPORATE EXISTENCE AND POWER. Seller is duly organized, validly
existing, and in good standing under the laws of the jurisdiction where it was
organized.
(d) COMPLIANCE WITH LAWS. To the best of Seller's knowledge, Seller is
not in violation, in any material respect, of any order or any law, or
regulation of any applicable
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jurisdiction that would have a material adverse effect on Seller's ability to
carry out the Contemplated Transaction.
(e) LITIGATION. To the best of Seller's knowledge, there are no: (i)
outstanding orders of any governmental authority against or involving Seller
that would have a material adverse effect on Seller's ability to carry out the
Contemplated Transaction; and (ii) material actions, suits, claims or
counterclaims, examinations, audits or legal, arbitral or other proceedings or
investigations pending, or, to the knowledge of Seller, threatened on the date
hereof, against or involving Seller that would have a material adverse effect on
Seller's ability to carry out the Contemplated Transaction.
(f) NO CONSENTS. Except for the consents required to be obtained in
connection with the Assigned Licenses and the CIT Consent, there are no material
consents and approvals of governmental and other regulatory agencies, foreign or
domestic, and/or of any other parties which are required to be obtained by or on
behalf of Seller in order to enable the Seller to enter into and carry out the
Contemplated Transaction in all material respects.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby makes
the following representations and warranties to Seller:
(a) AUTHORITY RELATIVE TO THIS AGREEMENT. Purchaser has the full power,
capacity, and authority to execute and deliver the Transaction Documents. The
Contemplated Transaction has been duly and validly authorized by Purchaser and
no other acts on the part of Purchaser are necessary or required to authorize
the Contemplated Transaction.
This Agreement has been duly and validly executed and delivered by
Purchaser and (assuming the valid execution and delivery thereof by Seller)
constitutes the legal, valid, and binding agreement of Purchaser, enforceable
against Purchaser in accordance with its terms, except as those obligations and
their enforceability may be limited by applicable bankruptcy and other similar
laws affecting the enforcement of creditors' rights generally and except that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought (whether at law or in
equity).
(b) NO CONFLICTS. The execution, delivery, and performance by Purchaser
of this Agreement and the Contemplated Transaction do not and will not: (i)
violate any provision of the articles of incorporation or by-laws of Purchaser;
(ii) violate, conflict with, or result in a material breach or material default
under (with or without the giving of notice or the passage of time or both), or
permit the suspension or termination of, any material contract (oral or written)
to which Purchaser is a party or by which Purchaser or any of its assets may be
bound or subject, or result in the creation of any lien upon its assets; or
(iii) violate any judgment, order, injunction, decree or award against, or
binding upon, Seller.
(c) CORPORATE EXISTENCE AND POWER. Purchaser is duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation.
(d) COMPLIANCE WITH LAWS. To the best of Purchaser's knowledge,
Purchaser is not in violation in any material respect, of any order or any law,
or regulation of any applicable jurisdiction that would affect its respective
assets or business and have a material adverse effect on the Purchaser's ability
to carry out the Contemplated Transaction.
(e) NO CONSENTS. There are no material consents and approvals of
governmental and other regulatory agencies, foreign or domestic, and/or of any
other parties which are required to be obtained by or on behalf of Purchaser in
order to enable Purchaser to enter into and carry out the Contemplated
Transaction in all material respects.
(f) LITIGATION. To the best of Purchaser's knowledge, there are no: (i)
outstanding orders of any governmental authority against or involving Purchaser
that would have a material adverse effect on Purchaser's ability to carry out
the Contemplated Transaction; and (ii) material actions, suits, claims or
counterclaims, examinations, audits or legal, administrative, governmental,
arbitral or other proceedings or investigations pending, or, to the knowledge of
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Purchaser, threatened on the date hereof, against or involving Purchaser that
would have a material adverse effect on the Purchaser's ability to carry out the
Contemplated Transaction.
(g) NO REPRESENTATIONS. Purchaser represents and agrees that it has
independently investigated, analyzed and appraised the condition, value and
profitability of the Acquired Assets and that Purchaser is acquiring same on an
"As Is" and "Where Is" basis on the Closing Date, except as otherwise expressly
set forth in this agreement. Purchaser recognizes, acknowledges and agrees that,
except as expressly set forth in this agreement, neither the Seller nor any
agent, employee, broker, consultant or other person representing the Seller has
made, and Seller is not liable for or bound in any manner by, any express or
implied warranties, guarantees, promises, statements, inducements, or
representations pertaining to the condition of the Acquired Assets, the income,
expenses and operation relative to Acquired Assets, or any other matter or thing
with respect thereto.
6. INDEMNIFICATIONS. (a) From and after the Closing Date, Purchaser hereby
agrees to indemnify, protect, reimburse and hold harmless Seller and Toymax and
their respective shareholders, officers, directors, members, successors and
assigns, and each of them (hereinafter collectively referred to as the "Seller
Group"), from and against any and all liabilities, damages, losses, obligations,
penalties, claims, actions, litigations, demands, defenses, judgments, suits,
costs, disbursements and expenses, including, but not limited to, reasonable
attorneys' fees and expenses (hereinafter collectively referred to as the
"Damages") of whatsoever kind and nature, imposed upon, incurred by or asserted
or awarded against any of the Seller Group directly or indirectly arising out
of, relating to or resulting from (i) the ownership, operation or management of
the Acquired Assets on and after the Closing Date (including, without
limitation, any Damages arising out of claims for defective products sold,
distributed, leased or licensed by Purchaser after the Closing Date, and any
obligation or liability of Purchaser under Assigned contract); (ii) any of the
obligations which Purchaser has specifically agreed to assume or perform
pursuant to the express provisions of this Agreement; (iii) Purchaser's breach
of any agreement, covenant, term, condition or provision contained herein or
Purchaser's failure to perform any agreement, covenant, term, condition or
provision on its part to be performed, or (iv) Purchaser's misrepresentation or
breach of any representation or warranty made by Purchaser hereunder or any
misstatement or omission in any certificate, schedule, application, exhibit or
other document delivered or caused to be delivered by Purchaser pursuant to or
in furtherance of the Contemplated Transaction.
(b) From and after the Closing Date, Seller and Toymax hereby agree to
indemnify, protect, reimburse and hold harmless Purchaser and Purchaser's
shareholders, officers, directors, successors and assigns, and each of them
(hereinafter collectively referred to as the "Purchaser Group") from and against
any and all Damages of whatsoever kind and nature, imposed upon, incurred by or
asserted or awarded against any of the Purchaser Group directly or indirectly
arising out of, relating to or resulting from (i) the ownership, operation or
management of the Acquired Assets prior to the Closing Date (including, without
limitation, any Damages arising out of claims for defective products sold,
distributed, leased or licensed by Seller, or services provided by Seller prior
to the Closing Date and any obligation or liability of Seller under any of the
Assigned Contracts) except for the obligations which Purchaser has specifically
agreed to assume or perform pursuant to the express provisions of this
Agreement; (ii) Seller's breach of any agreement, covenant, term, condition or
provision contained herein or Seller's failure to perform any agreement,
covenant, term, condition or provision on its part to be performed hereunder; or
(iii) Seller's misrepresentation or breach of any representation or warranty
made by Seller hereunder or any misstatement or omission in any certificate,
schedule, application, exhibit or other document delivered or caused to be
delivered by Seller pursuant to or in furtherance of the Contemplated
Transaction.
(c) A party making a claim for indemnification hereunder (hereinafter
referred to as the "Indemnified Party"), shall give the other party (hereinafter
referred to as the "Indemnifying Party") written notice of such claim within a
reasonable time from the actual discovery of same (the "Indemnification
Notice"); PROVIDED, HOWEVER, that the failure to give such notice will not
relieve the Indemnifying Party from any liability that it may have to the
Indemnified Party except to the extent that the Indemnifying Party demonstrates
actual prejudice as a result thereof. Any such Indemnification Notice shall be
accompanied by a copy of documents which have been
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served upon the Indemnified Party, if any.
(i) With respect to claims for indemnification relating to an
action or proceeding of a third party, the Indemnifying Party shall, subject to
the rights of or duties to any insurer, reinsurer or other Person having
liability therefore, and provided that there is no notice of a Defense Objection
as provided below, have the option to assume, at the Indemnifying Party's sole
cost and expense, the control of the defense of any legal proceedings, including
employment of counsel reasonably satisfactory to the Indemnified Party, which
option must be exercised by the giving of notice thereof to the Indemnified
Party no later than twenty (20) days from the date of receipt of the
Indemnification Notice (the "Assumption Notice"). For purposes of this paragraph
6, the term "Defense Objection" means the occurrence of any of the following
events (1) the Indemnifying Party is also a party to the particular proceeding
in question and the Indemnified Party determines in good faith that joint
representation would be inappropriate; or (2) the Indemnifying Party fails to
provide reasonable assurances to the Indemnified Party of its financial capacity
to defend such proceeding and to provide indemnification with respect to such
proceeding. If the Indemnifying Party shall have exercised its right to assume
control, as provided Indemnifying Party has not given notice of a Defense
Objection within ten (10) days after Indemnified Party has received the
Assumption Notice, the Indemnified Party may, in its sole discretion and at its
sole cost and expense, employ counsel to represent it in addition to counsel
employed by the Indemnifying Party. The Indemnified Party shall cooperate with
the Indemnifying Party assuming control of legal proceedings and shall make
available all pertinent information under the control of the Indemnified Party
as to such legal proceedings and shall make appropriate personnel reasonably
available for discovery and trial. In the event that the Indemnifying Party
shall exercise its right to undertake control of the defense of any such legal
proceedings, such Indemnifying Party may only compromise or settle such legal
proceeding on behalf of and for the account of the Indemnified Party after it
obtains the prior written consent of the Indemnified Party; PROVIDED, HOWEVER,
that if the Indemnifying Party shall receive an offer of a settlement or
compromise from the other parties in the applicable legal proceedings at a
particular amount, or obtain a commitment from such parties that they would
accept a compromise or settlement at such amount if offered, and such settlement
or compromise requires only the payment of such amount, the granting of an
appropriate release or similar accommodation, and no other relief, and the
Indemnified Party refuses to consent thereto and elects to continue the legal
proceedings, then the Damages of the Indemnified Party which are the subject of
the applicable legal proceedings to which the settlement or compromise relates
shall be deemed to be limited to that amount of Damages which the Indemnified
Party would have had if such compromise or settlement had been effected. In the
event that the Indemnifying Party does not exercise its option to assume control
of any such action or proceeding, then the Indemnifying Party shall nevertheless
be obliged to indemnify the Indemnified Party pursuant to the provisions hereof,
and shall promptly pay all Damages as incurred by the Indemnified Party.
(ii) Any claim for indemnification with respect to any matter
not related to a third party claim may be asserted by Indemnification Notice.
The claim specified in such notice shall be deemed valid and the Indemnified
Party shall be entitled to indemnification hereunder on account of such claim
unless within twenty (20) days of the Indemnifying Party's receipt of the
Indemnification Notice, the Indemnifying Party gives notice to the Indemnified
Party that it disputes the validity of such claim. In such event the dispute
will be settled in accordance with the provisions of paragraph 15(f) hereof.
(d) Any and all amounts due for indemnity hereunder shall be promptly
paid, in lawful money of the United States of America, as Damages are incurred,
and in any event within thirty (30) days after written demand therefore.
Payments shall be made in accordance with the reasonable instructions of the
Indemnified Party.
(e) The indemnification rights of the parties under this paragraph are
independent of and in addition to such rights and remedies as the parties may
have at law or in equity or otherwise, it being understood that the rights and
remedies of the parties under this Agreement are cumulative and not exclusive,
and are in addition to all other rights and remedies available under applicable
law.
7. AGREEMENTS PENDING CLOSING.
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(a) AGREEMENTS OF SELLER PENDING THE CLOSING. Seller covenants and
agrees that in the event the Closing does not occur simultaneously with the
execution of this agreement, pending the Closing and except as otherwise agreed
to in writing by Purchaser:
(i) COMPLIANCE WITH LAWS, ETC. Seller shall comply in all
material respects with all orders, laws or regulations applicable to the
Acquired Assets, the noncompliance with which would have a material adverse
affect on the Acquired Assets.
(ii) UPDATE SCHEDULES. Seller shall promptly disclose to
Purchaser any information contained in its representations and warranties which,
because of an event occurring after the date hereof is incomplete or is no
longer correct at all times after the date hereof until the Closing Date;
provided, however, that none of such disclosures shall be deemed to modify,
amend or supplement the representations and warranties of Seller or the
schedules hereto, unless Purchaser shall have consented thereto in writing.
(iii) CONDUCT OF BUSINESS. Seller shall operate the Toy
Business only in the ordinary course and in substantially the same manner as it
has been operated in the past and not sell any of Acquired Assets except for
sales from Inventory in the ordinary course of business.
(iv) PRESS RELEASES. Except as required by applicable law,
Seller shall not give notice to third parties or otherwise make any public
statements or releases concerning this Agreement or the Contemplated Transaction
except for such written information as shall have been approved in writing as to
form and content by Purchaser.
(b) AGREEMENTS OF PURCHASER PENDING THE CLOSING. Purchaser covenants
and agrees that in the event the Closing does not occur simultaneously with the
execution of this agreement, pending the Closing and except as otherwise agreed
to in writing by Seller:
(i) CONFIDENTIALITY. Unless and until the Closing has been
consummated, Purchaser will hold, and shall cause their counsel, independent
certified public accountants, appraisers, and investment bankers to hold in
confidence any confidential data or information made available to Purchaser in
connection with this Agreement with respect to Seller or the Acquired Assets
using the same standard of care to protect such confidential data or information
as is used to protect Purchaser's confidential information. Purchaser agrees
that any confidential data or information shall be used solely to evaluate the
Contemplated Transaction. If the transactions contemplated by this Agreement are
not consummated, Purchaser agrees that it shall return or cause to be returned
to Seller all written materials and all copies thereof that were supplied to
Purchaser by Seller that contain any such confidential data or information.
(ii) PRESS RELEASES. Except as required by applicable law,
Purchaser shall not give notice to third parties or otherwise make public
statements or releases concerning this Agreement or the Contemplated Transaction
except for such written information as shall have been approved in writing as to
form and content by Seller.
8. CONDITIONS PRECEDENT TO CLOSING.
(a) CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All obligations of
Purchaser under this Agreement are subject to the fulfillment or satisfaction,
prior to or at the Closing, of each of the following conditions precedent (any
of which may be waived by Purchaser, in whole or in part):
(i) The representations and warranties of Seller contained in
this Agreement and in any schedule, certificate or document delivered by Seller
to Purchaser pursuant to the provisions hereof shall have been accurate in all
material respects on the date hereof, or when made, without regard to any
schedule updates furnished by Seller after the date hereof and shall be accurate
in all material respects on the Closing Date with the same effect as though such
representations and warranties were made as of such date;
(ii) Seller shall have performed and complied with all
material agreements,
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covenants, obligations and conditions required by this Agreement to be performed
or complied with by it on or prior to or at the Closing;
(iii) Purchaser shall have received a certificate from Seller
dated the Closing Date, certifying in such detail as Purchaser may reasonably
request that the conditions specified in Sections (i) and (ii) hereof and the
covenants set forth in paragraph 7(a) have been fulfilled in all material
respects;
(b) CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER AND TOYMAX. All
obligations of Seller and Toymax under this Agreement are subject to the
fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent (any of which may be waived by Seller, in whole
or in part):
(i) The representations and warranties of Purchaser contained
in this Agreement or in any list, certificate or document delivered by Purchaser
to Seller pursuant to the provisions hereof shall have been accurate in all
material respects as of the date of this Agreement and shall be accurate in all
material respects on the Closing Date with the same effect as though such
representations and warranties were made as of such date;
(ii) Purchaser shall have performed and complied with all
material agreements, covenants, obligations and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing;
(iii) Seller shall have received a certificate from Purchaser
dated the Closing Date certifying in such detail as Seller may reasonably
request that the conditions specified in Sections (i) and (ii) hereof have been
fulfilled in all material respects;
(iv) Seller's receipt of a fairness opinion in a form
acceptable to Seller, Toymax and their counsel from an independent investment
banking firm which states that the Contemplated Transaction, if consummated, is
fair; and
(v) Seller has obtained the consent and approval of Fleet Bank
and CIT Group/Commercial Services Inc. ("CIT") to the Contemplated Transaction
(the "CIT Consent").
(c) FAILURE TO FULFILL CONDITIONS PRECEDENT. In the event that a party
fails to fulfill any of the conditions precedent, the other party may (i)
terminate this Agreement pursuant to paragraph 11 or (ii) waive the condition
precedent and consummate the Contemplated Transaction.
9. THE CLOSING. (a) The Closing shall take place at the offices of
Ettelman & Xxxxxxxxxx, P.C., 000 Xxxxxxx Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxx
Xxxx, Xxx Xxxx 00000 simultaneously with the execution hereof or, within ten
(10) days after the date that Purchaser shall have given written notice to
Seller that the conditions precedent to Closing set forth in paragraph 8 have
been satisfied or waived (the "Closing Notice"), or at such other time and date
as the parties may unanimously agree upon in writing. Such closing is
hereinafter referred to as the "Closing" and the date of the Closing is
hereinafter referred to as the "Closing Date".
(b) Seller agrees to deliver, or cause to be delivered, the following
to Purchaser on the Closing Date:
(i) subject to the Transfer Risks, such bills of sale,
assignments, endorsements, consents, permits, approvals, authorizations and
other good and sufficient instruments and documents of conveyance, transfer and
consent in form reasonably satisfactory to Purchaser and its counsel, as shall
be necessary and effective to transfer and assign to, and vest in, Purchaser all
of Seller's right, title and interest in and to the Acquired Assets;
(ii) subject to the Transfer Risks, all of the Assigned
Contracts and other documents, books, records, papers, files, office supplies
and data belonging to Seller which relate to the Acquired Assets; and
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(iii) duly executed resolutions of Seller and Toymax approving
the terms and conditions of this Agreement and the Contemplated Transaction.
Subject to the Transfer Risks, simultaneously with Seller's delivery of
the aforementioned, Seller shall take all action as may be required to duly and
effectively deliver and place Purchaser in actual possession and operating
control of the Acquired Assets; PROVIDED, HOWEVER, that nothing contained herein
shall be deemed to require Seller to deliver possession of the Acquired Assets
at a location other than Seller's current business premises.
(c) Purchaser agrees to deliver, or cause to be delivered, the
following on the Closing Date:
(i) the Purchase Price pursuant to paragraph 3(a) hereof;
(ii) duly executed resolutions of Purchaser approving the
terms and conditions of this Agreement and the Contemplated Transaction; and
(iii) an undertaking whereby Purchaser will assume the Assumed
Liabilities.
10. POST CLOSING MATTERS. (a) To the extent that Seller's rights under any
Assigned Contract may not be assigned without obtaining the permit, consent,
approval or authorization of another Person which has not been obtained, this
Agreement shall not constitute an agreement to assign the same if an attempted
assignment would constitute a breach thereof or be unlawful, and Seller shall
use its reasonable efforts to obtain any such required consent(s) as promptly as
possible. If any such permit, approval, authorization or consent shall not be
obtained or if any attempted assignment would be ineffective or would impair
Purchaser's rights under the Seller's Asset in question so that Purchaser would
not in effect acquire the benefit of all such rights, Seller, to the maximum
extent permitted by law and the asset, shall act after the Closing as
Purchaser's agent in order to obtain for it the benefits thereunder and shall
cooperate, to the maximum extent permitted by law and the asset, with Purchaser
in any other reasonable arrangement designed to provide such benefits to
Purchaser.
(b) Subject to the Transfer Risks, Seller, from time to time after the
Closing, at Purchaser's request, will execute, acknowledge and deliver to
Purchaser such other instruments of conveyance and transfer and will take such
other actions and execute and deliver such other agreements, documents,
certificates and further assurances as Purchaser may reasonably request in order
to vest more effectively in Purchaser, or to put Purchaser more fully in
possession of, the Acquired Assets or to enable Purchaser to fully obtain the
practical realization of the benefits, utilization and value of the Acquired
Assets or to better enable Purchaser to complete, perform or discharge any of
the Assumed Liabilities by Purchaser pursuant to the express provisions hereof.
Each of the parties hereto will cooperate with the other and execute and deliver
to the other party hereto such other instruments and documents and take such
other actions as may be reasonably requested from time to time by the other
party to evidence and confirm the intended purposes of this Agreement.
(c) From and after the Closing Date, Seller will not itself use the
name "Monogram" or any names similar thereto or variations thereof, including,
without limitation, the use of such name in an active trade or business or in
connection with any products in such trade or business.
(d) Seller and Toymax will continue to maintain all presently existing
policies of insurance relating to the Acquired Assets from the Closing Date
until March 31, 2002; PROVIDED, HOWEVER, that Purchaser shall be solely
responsible for the payment of all premiums on all such insurance policies for
all periods after the Closing Date.
(e) Purchaser shall cause the release of Toymax and any affiliate of
Toymax from any guarantee or other financial commitment delivered or made to any
of the Licensor's listed on Schedule 1(e) hereof.
(f) Within thirty (30) days of the Closing Date Purchaser will cause
the employee's whose employment contracts are being assumed by Purchaser
hereunder, Xxxxxx
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Holden, Xxxx Xxxxxx and Xxxxxx Xxxx to deliver a release to Seller of all
liabilities or claims of any kind or nature arising as a result of such person's
employment with Seller.
11. TERMINATION. (a) This Agreement shall terminate and the parties shall
have no further obligations hereunder except for the confidentiality provisions
contained in paragraph 7(b)(i) upon the happening of any of the following
events:
(i) the mutual written consent of Purchaser and Seller;
(ii) by Purchaser at its option, by written notice to Toymax
and Seller, if any of the conditions specified in paragraph 8(a) have not been
satisfied on or before the Termination Date. Initially, the Termination Date
will be March 1, 2002, and may be extended by the mutual written consent of the
parties.
(iii) by Seller, at its option, by written notice to
Purchaser, if any of the conditions specified in paragraph 8(b) and (iv) have
not been satisfied on or before the Termination Date.
(b) TERMINATION OBLIGATIONS. In the event of the termination of this
Agreement, or if the Agreement is not executed by the parties, the parties agree
that (i) no party can be held liable for expenses incurred or opportunities
foregone by another party in reliance on this Agreement in the event of a
termination pursuant to the terms hereof; (ii) this Agreement will be deemed
null and void and no party will have any liability to another party of any
nature whatsoever or be entitled to damages arising out of or relating to the
termination hereof; and (iii) any part of the Purchase Price which has been paid
by Purchaser to Seller shall be immediately returned upon Purchaser's demand.
12. SURVIVAL. Notwithstanding anything to the contrary contained herein,
the provisions of paragraphs 6, 10, 13 and 15(f) shall survive the Closing of
this Agreement for a period of one (1) year. The remaining paragraphs shall not
survive the Closing. In the event that any of the conditions precedent to a
party's obligation to close have not been satisfied and the parties proceed to
consummate the Contemplated Transaction, the parties shall be deemed to have
waived all such failed conditions precedent and shall be deemed to have waived
their respective rights, whether known or unknown, to pursue claims for damages
or in equity relating to such failed conditions precedent.
13. NON-COMPETITION. For the period beginning the Closing Date and ending
on the second anniversary thereof, Toymax, directly or indirectly, in any
capacity, either for itself or on behalf of any other person, shall not compete
with Purchaser or its subsidiaries and affiliates, in connection with the types
of products set forth on SCHEDULE 13 attached hereto.
For the period beginning on the date hereof and ending on the second
anniversary hereof, Purchaser directly or indirectly, in any capacity, either
for itself or on behalf of any other person, shall not compete with Toymax and
its subsidiaries and affiliates, in connection with the types of products which
Toymax: (y) has produced prior to the date hereof; or (z) is currently
developing.
14. BENEFITS OF PARTIES; This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors,
heirs, legal representatives and assigns.
15. MISCELLANEOUS.
(a) Notices. All notices permitted, required or provided for by this
Agreement shall be made in writing, and shall be deemed adequately delivered if
delivered by hand or by a nationally recognized overnight courier service that
regularly maintains records of its pick ups and deliveries, to the parties at
their respective addresses set forth above or to any other address designated by
a party hereto by written notice of such address change. Notices shall be deemed
given as of the date of delivery to the overnight courier service or to the
recipient if delivered by
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hand, and received one day after delivery to the overnight courier service or
when actually received if delivered by hand.
(b) Modification or Amendment. This Agreement may not be modified or
amended except by an instrument in writing signed by the party or parties
against whom enforcement is sought.
(c) Third Party Beneficiaries. Except for their proper successors and
assigns, the parties hereto intend that no third party shall have any rights or
claims by reason of this Agreement, nor shall any party have any rights or
claims against any third party.
(d) Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
(e) Invalidity of Provision. Any term or provision of this Agreement
which is 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.
Further, to the extent that any term or provision hereof is deemed invalid, void
or otherwise unenforceable, but may be made enforceable by amendment thereto,
the parties agree that such amendment may be made so that the same shall,
nevertheless, be enforceable to the fullest extent permissible under the laws
and public policies applied in any such jurisdiction in which enforcement is
sought.
(f) Governing Law Disputes. All questions pertaining to the validity,
construction, execution and performance of this Agreement shall be construed and
governed in accordance with the laws of the State of New York, without giving
effect to the conflicts or choice of law provisions thereof. Any dispute arising
under this Agreement shall be settled in any court of competent jurisdiction
located in the state of New York, County of Nassau, and to the extent not
otherwise subject to the jurisdiction of such courts Purchaser agrees to waive
any objection to such jurisdiction and agrees to subject itself to the
jurisdiction of such court.
(g) Waiver of Breach. Any waiver of any of the provisions of this
Agreement, or of any inaccuracy in or non-fulfillment of any of the
representations, warranties or obligations hereunder or contemplated hereby,
shall not be effective unless made in writing and signed by the party against
whom the enforcement of any such waiver is sought. A waiver given in any case
shall only apply with respect to that particular act, omission or breach, and
shall not be effective as to any further or subsequent act, omission or breach,
regardless of whether they be of the same or similar nature.
(h) Counterparts/Faxes. This Agreement may be executed by fax and in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(i) Entire Agreement. (i) This Agreement sets forth the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and supersedes all prior agreements, promises,
understandings, letters of intent, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any party hereto or
by any related or unrelated third party.
(ii) All exhibits and schedules attached hereto, and all
certificates, documents and other instruments delivered or to be delivered
pursuant to the terms hereof are hereby expressly made a part of this Agreement
as fully as those set forth herein, and all references herein to the terms "this
Agreement", "hereunder", "herein", "hereby" or "hereto" shall be deemed to refer
to this Agreement and to all such writings.
(j) Expenses. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions of this Agreement and the
consummation of the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by a duly authorized officer, all on the day and year
first above written.
SELLER PURCHASER
MONOGRAM INTERNATIONAL, INC. V2 DEVELOPMENT COMPANY LIMITED
By: By:
------------------------------- ---------------------------------
Name: Name:
Title: Title:
MONOGRAM PRODUCTS (H. K.) LIMITED
By:
-------------------------------
Name:
Title:
MONOGRAM ACQUISITION I, LLC
By:
-------------------------------
Name:
Title:
TOYMAX INTERNATIONAL, INC.
By:
-------------------------------
Name:
Title:
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