EXHIBIT 10.05
ASSET PURCHASE AGREEMENT
Agreement effective as of June 30, 1996, by and between ▇▇▇▇▇▇ ▇▇▇▇ CO.,
LTD., an Ohio corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ("Seller") and KIDS STUFF, INC., a Delaware corporation, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Buyer").
R E C I T A L S:
WHEREAS, Seller received the assets and liabilities of its subsidiary
Perfectly Safe, Inc. ("Perfectly Safe") in a liquidating distribution
under Section 332 of the Internal Revenue Code of 1986, as amended; and
WHEREAS, Seller desires to sell the Perfectly Safe assets to Buyer as
well as certain other assets of ▇▇▇▇▇▇ ▇▇▇▇ used to perform
telemarketing, order fulfillment, data processing and administrative
functions, all of which are identified on Exhibit A hereto.
WHEREAS, Buyer desires to acquire the assets set forth in Exhibit A upon
the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. TRANSFER AND SALE. Seller shall transfer, sell, assign and convey
unto Buyer, and Buyer shall purchase from Seller, for the
Purchase Price set forth in Paragraph 4 below, the assets
identified and described on Exhibit A attached hereto and made a
part hereof (the "Assets").
2. CLOSING. The closing shall take place at the office of Kids
Stuff, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇.▇., ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
3. TRANSFER AT CLOSING. At the time of the closing, Seller shall
transfer to Buyer, free and clear of any lien or encumbrance
(except as otherwise provided herein), all of the Assets
identified on Exhibit A. Upon Buyer's demand, Seller shall
execute and deliver all other documents necessary to give full
effect to the terms of this Agreement.
4. PURCHASE PRICE. The purchase price payable by Buyer for the
Assets transferred and sold hereunder shall be $2,613,404.00
payable at the closing as follows:
(a) Buyer shall execute and deliver to Seller a certain
Promissory Note, a form of which is attached hereto as
Exhibit B, for the principal amount of $366,858.00
repayable upon the terms and conditions stated therein;
(b) The assumption by Buyer of accounts payable of Perfectly
Safe as of June 30, 1996 in the amount of $1,215,703; the
assumption by Buyer of Seller's obligations in the amount
of $650,000 as of June 30, 1996 under Seller's credit
facility at United National Bank and Trust Company; and,
Seller's
assumption of Perfectly Safe's deferred federal
income tax liability in the amount of $75,843, as of June
30, 1996; and,
(c) The issuance to Seller of 2,400,000 shares of Buyer's
common stock valued at $.125 per share and 5,000,000
shares of Series A Preferred Stock Value at $.001 per
share.
5. REPRESENTATIONS OF SELLER. Seller warrants and represents that
the following are now true and will be true at closing:
(a) Seller is a corporation duly organized and validly
existing and in good standing under the laws of the State
of Ohio, and has the requisite corporate power and
authority to own and operate its property and to carry on
its business as now conducted.
(b) Seller has all requisite power and full legal right to
enter into this Agreement with Buyer and to perform all of
its agreements and obligations hereunder in accordance
with its terms. This Agreement has been duly authorized by
Seller's Board of Directors, has been duly executed and
delivered by Seller, and constitutes the legal, valid and
binding obligation of Seller.
(c) Seller has good and marketable title to the Assets, free
and clear of all liens, pledges, charges, security
interests, mortgages, encumbrances or title retention
agreements except for the lien of United National Bank
&Trust. All of the fixed Assets shall be in good operating
condition and repair, and free from material defects.
(d) The sale, assignment, transfer, conveyance and delivery of
the Assets will not conflict with or violate any provision
of the Seller's Articles of Incorporation, Code of
Regulations, or other any other agreement to which Seller
is a party.
6. REPRESENTATIONS OF BUYER. Buyer warrants and represents the
following are now true and will be true at closing:
(a) Buyer is a corporation duly organized and validly existing
and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and
authority to own and operate its property and to carry on
its business as now conducted.
(b) Buyer has all requisite power and full legal right to
enter into this Agreement with Seller and to perform all
of its agreements and obligations hereunder in accordance
with its terms. This Agreement has been duly authorized by
Buyer's Board of Directors, has been duly executed and
delivered by Buyer, and constitutes the legal, valid and
binding obligation of Buyer.
(c) The purchase and acceptance of delivery of the Assets by
Buyer will not conflict with or violate any provision of
the Buyer's Certificate of
Incorporation, By-Laws, or other any other agreement to
which Buyer is a party.
7. ACCESS AND INFORMATION. Seller shall give to Buyer and its
counsel, accountants and other representatives full access,
during normal business hours throughout the period before the
closing, to all of Seller's books, contracts, commitments and
records, and shall furnish Buyer during such period with all
information concerning Seller's affairs that Buyer reasonably
requests.
8. NO VIOLATION. The parties represent to each other that their
performance of this Agreement, including any conditions or
surviving warranties or representations, is not in violation of
any law, statute, local ordinance, state or federal regulation,
court order or administrative ruling.
9. SURVIVAL OF WARRANTIES. All representations and warranties made
herein shall survive the closing and continue to be enforceable
by the parties hereto after the termination of this Agreement.
10. GOVERNING LAW. This Agreement shall be construed and interpreted
under the laws of the State of Ohio.
11. BINDING EFFECT. This Agreement shall inure to the benefit of and
be binding upon the parties and their respective successors and
assigns.
12. COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
13. NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and be deemed to have been duly
given if delivered or mailed, first class postage prepaid, to the
address of the appropriate party shown at the outset of this
Agreement.
14. NON-WAIVER. No delay or failure by either party to exercise any
right hereunder, and no partial or single exercise of any such
right shall constitute a waiver of that or any other right,
unless otherwise expressly provided herein.
15. HEADINGS. Headings in this Agreement are for reference and
convenience only and shall not be used to interpret or construe
its provisions.
16. TIME. Time is of the essence of this Agreement. It is the
intent of the parties that the transactions contemplated by this
Agreement be effective as of June 30, 1996.
17. ENTIRE AGREEMENT; MODIFICATION. This Agreement supersedes all
prior agreements and constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. It may
not be amended or modified except by an instrument executed by
the parties.
IN WITNESS WHEREOF, the parties hereto have signed this instrument.
▇▇▇▇▇▇ ▇▇▇▇ CO., LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PRESIDENT
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
KIDS STUFF, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, CHIEF EXECUTIVE OFFICER
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
EXHIBIT A
SCHEDULE OF ASSETS
Inventories
Deferred Catalog Expense
Prepaid Assets & Deposits
Receivable from Affiliates
Data Processing Equipment
Machinery and Equipment
Vehicles
Furniture & Fixtures
Customer Lists
Development & Catalog Costs
Goodwill
EXHIBIT B
PROMISSORY NOTE
$366,858.00 PROMISSORY NOTE June 30, 1996
===============
FOR VALUE RECEIVED, KIDS STUFF, INC. a Delaware corporation, whose
address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
("Borrower") promises to pay to ▇▇▇▇▇▇ ▇▇▇▇ CO., LTD., an Ohio corporation
("Lender"), as hereinafter set forth, the principal sum of Three Hundred Sixty
Six Thousand Eight Hundred Fifty Eight and 00\100 Dollars ($366,858.00) with
interest thereon from the date hereof at the rate of eight percent (8%) per
annum.
Payments of principal and interest shall be made as follows: The
payment of the first installment of $66,858.00 in principal plus interest
accrued thereon to date shall be due and payable on June 30, 1997; the second
installment of $100,000.00 in principal plus interest accrued thereon to date
shall be due and payable on June 30, 1998; the third installment of $100,000.00
in principal plus interest accrued thereon to date shall be due and payable on
June 30,1999; and the final installment of $100,000.00 in principal plus
interest accrued thereon to date shall be due and payable on June 30, 2000.
If any of the following events shall occur and be continuing, it shall
constitute an Event of Default under this Note:
(a) Failure to make any payments of principal or interest required to
be made under this Note within thirty (30) days (excluding bank
holidays) after the same shall become due;
(b) Failure to perform or observe any covenant, term or condition
contained in this Note and such default shall not have been
remedied for a period of thirty (30) days following written
notice thereof by Lender.
Upon any Event of Default, and if such default shall continue for a
period of thirty (30) days, then the Lender may, at his option and without
further notice, declare the unpaid principal hereof and all accrued interest
thereon to be at once due and payable in full.
There shall be no prepayment penalty in the event that the undersigned
prepays all or a portion of the principal sum and accrued interest evidenced
hereby.
The Borrower and all indorsers, sureties, and guarantors hereof,
jointly and severally waive presentment, demand for payment, notice of dishonor,
notice of protest, and protest, and all other notices or demands in connection
with the delivery, acceptance performance, default, indorsement, or guaranty of
this instrument.
BORROWER:
KIDS STUFF, INC.
By: //S ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, CHIEF EXECUTIVE OFFICER
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
EXHIBIT C
SCHEDULE OF ASSUMED ACCOUNTS PAYABLE
Miscellaneous Payables in the amount of $1,215,703
