EXHIBIT 2.4
FIRST AMENDMENT
TO
AGREEMENT FOR PURCHASE AND SALE OF OKID ASSETS
THIS AMENDMENT, which is effective immediately upon execution by all
parties, is made as of the 28th day of April, 2000, by and between Futech
Interactive Products, Inc., an Arizona corporation ("Seller"), and ▇▇▇▇.▇▇▇,
Inc., a Delaware corporation ("Buyer").
R E C I T A L S:
A. The parties identified above, together with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ entered
into an Agreement for Purchase and Sale of oKID Assets, Dated February 25, 2000
(the "Sale Agreement"). Capitalized terms used in this Amendment shall have the
same meanings given those terms in the Sale Agreement.
B. The parties desire to amend the Sale Agreement on the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
T E R M S:
1. Section 2.1.1 of the Sale Agreement is hereby deleted in its
entirety.
2. Section 2.1.2 of the Sale Agreement is hereby deleted in its
entirety and replaced with the following:
2.1.2 Four Million (4,000,000) shares of Buyer's common
stock. Buyer will use its best efforts to register said shares
under the Securities Act within 150 days after the Closing. If a
Registration Statement is not effective within 150 days after the
Closing, then for each 30 day period thereafter during which the
Registration Statement is not effective, Buyer will issue Seller
an additional 10,000 shares of Buyer's common stock. Seller will
not sell during any 3 month period more than the greater of: (i)
5% of Buyer's outstanding common stock, and (ii) 200% of the
average weekly reported trading volume during the 4 weeks
preceding the sale.
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Notwithstanding the foregoing, if the publicly traded price of
Buyer's common tock is not at least $1.00 per share on the date
of the Closing, and said stock does not reach said price
(adjusted as necessary to take into account transactions such as
stock splits) within twenty-four (24) months thereafter, then
Buyer shall issue additional shares of Buyer's common stock to
Seller, as soon as is practicable after the date which is
twenty-four (24) months after the date of Closing, and the number
of shares to be so issued shall be calculated as follows: divide
(x) the difference between (i) $4,000,000.00 and (ii) the highest
publicly traded closing price of Buyer's common stock during the
24 month period from the Closing through the date which is 24
months thereafter, times the 4,000,000 shares of stock issued
pursuant to this Section (including the value of all splits and
other rights relating thereto), by (y) the publicly traded
closing price on the date which is 24 months after the date of
the Closing.
Seller agrees, and will confirm said agreement by executing one
or more documents so confirming, in form and with content
acceptable to Buyer, that: (A) the stock to be issued under this
Agreement will be a restricted security, issued pursuant to one
or more exemptions to the registration requirements of the
Securities Act; (B) Buyer's obligation to issue the stock is
subject to Buyer determining to Buyers' satisfaction that these
transactions are in compliance with the Securities Act and all
other applicable federal and state laws; and (C) Seller will
execute such documents as are necessary and/or appropriate to
insure compliance with applicable federal and state laws. Buyer
obtaining documentation as to the foregoing shall be a condition
to the obligation of Buyer to close the Transaction, or to issue
the stock.
3. Section 2.2 of the Sale Agreement is hereby deleted in its
entirety.
4. Section 3.1.1 of the Sale Agreement is hereby deleted in its
entirety and replaced with the following:
3.1.1 Seller's obligations under the contracts identified on
EXHIBIT 3.1.1-1 attached hereto (said assumptions shall include
only obligations arising after and relating to the time period
after the Closing). Any all contracts relating to the Website
shall be deemed to be included on EXHIBIT 3.1.1-1, as well as on
EXHIBIT 1.11.
EXHIBIT 3.1.1-2 is no longer part of the Sale Agreement. There are no
liabilities of Seller which Buyer is assuming other than as called for on
EXHIBIT 3.1.1-1.
5. Section 2.5 of the Sale Agreement is hereby deleted in its
entirety.
6. The following is hereby added at the end of Section 3.3 of the
Sale Agreement:
The parties understand and agree that Buyer has no obligation to
pay any debt of Seller, other than as expressly called for in
Section 3.1.1 of this Agreement.
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7. New Sections 5.8 and 5.9 are hereby added to Section 5 of the
Sale Agreement, as follows:
5.8 Approval of the Transaction by all of Buyer's creditors; and
5.9 Approval by the shareholders of Buyer of an amendment to
Buyer's governing documents authorizing an increase in the
authorized number of shares of stock of Buyer to 125,000,000.
8. The date in Section 6 of the Sale Agreement is hereby changed
to "May 19, 2000, or as soon thereafter as is practicable.".
9. Except as expressly called for in this Amendment, the Sale Agreement
continues unmodified and in full force and effect.
10. This Amendment may be executed by the parties in one or more
counterparts, and any number of counterparts signed in the aggregate by the
parties shall constitute a single instrument. The parties authorize and agree to
accept facsimile signatures in counterparts to this Amendment, and that said
facsimile signatures shall for all purposes be binding upon the parties as if
the same were originals.
DATED the date first hereinabove written.
SELLER: Futech Interactive Products, Inc., an Arizona
corporation
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
BUYER: ▇▇▇▇.▇▇▇, Inc., a Delaware corporation
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
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The undersigned was originally a party to the Sale Agreement, and
hereby consents to this Amendment, as of the date first hereinabove written.
Since the undersigned is no longer part of the transaction, any further
amendments shall not require the signature of the undersigned.
▇▇▇▇▇:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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AGREEMENT
FOR
PURCHASE AND SALE
OF
OKID ASSETS
THIS AGREEMENT is made as of the 25th day of February, 2000, by and
between Futech Interactive Products, Inc., an Arizona corporation ("SELLER"),
▇▇▇▇.▇▇▇, Inc., a Delaware corporation ("BUYER"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("▇▇▇▇▇").
R E C I T A L S:
A. Seller owns certain rights relating to the name "▇▇▇▇.▇▇▇," and the
website operated under that name.
B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, said rights, all in accordance with the terms and conditions set forth
below (the "TRANSACTION").
▇. ▇▇▇▇▇ owns certain rights to acquire stock of Seller, and is willing
to release those rights in exchange for a portion of the ownership of Buyer.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
T E R M S:
1. PURCHASE AND SALE. Seller hereby agrees to sell to Buyer, and
Buyer agrees to purchase from Seller, the following (collectively the "ASSETS").
1.1 The ▇▇▇▇.▇▇▇ website (the "Website"), all software rights
relating thereto, all graphics rights and artwork rights relating
thereto, including all original artwork and all copies thereof, all
rights to the animated characters appearing on the Website, and all
licenses and other agreements with third parties relating to the
Website
1.2 All furniture and computer equipment used by Seller's
staff in connection with the creation, operation and maintenance of the
Website (other than that leased under the Equipment Leases (defined
below)), including but not limited to the assets identified on
EXHIBIT 1.2 attached hereto (all of the foregoing are collectively
referred to below as the "FIXED ASSETS").
1.3 All of Seller's interest in the leases identified on
EXHIBIT 1.3 attached hereto (the "EQUIPMENT LEASES.")
1.4 All rights to the trade name "oKID" and all names used for
animated characters appearing on the Website, along with any and all
trademarks, service marks,
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logos and designs relating hereto, including all internet domain names
used in connection with the Website.
1.5 Any and all deposits received from third parties in
connection with contracts relating to the Website.
1.6 All of Seller's books and records (or copies thereof),
computer programs, software, drawings, financial and tax information
(or copies thereof), and all customer and vendor files, as the same
relate to the Assets.
1.7 All patents, copyrights, trade secrets, customer and
supplier lists, promotional materials, and other intangible rights used
in connection with the operation of the Website, including but not
limited to those described on EXHIBIT 1.7 attached hereto.
1.8 The phone numbers and all phone and other advertising
associated with the Website, excluding however phone numbers not used
exclusively for the Website.
1.9 All of Seller's internet addresses used by the Website.
1.10 All warranties and all warranty claims of Seller relating
to the Website.
1.11 All other assets associated with the Website, including
but not limited to those identified on EXHIBIT 1.11 attached hereto.
2. PURCHASE PRICE AND MANNER OF PAYMENT.
2.1 The purchase price for the Assets shall, subject to
adjustments as described below, be and be payable as follows:
2.1.1 Eight Million Two Hundred Fifty Thousand
Dollars ($8,250,000.00), payable with interest on the
outstanding balance calculated at the rate of six percent
(6%) per annum, from the Closing until paid in full, with
principal and interest being payable in full on the date
which is six (6) months after the Closing. This Agreement
shall at the Closing and without further act being required,
act as a security agreement wherein Buyer grants Seller a
security interest in the Assets as collateral for payment of
said amount. Buyer will provide Seller at the Closing with an
executed UCC-1 Financing Statement evidencing said lien.
Seller will subordinate the debt described in this Section
2.1.1 to one or more liens securing new or replacement asset
financing of Buyer, created after the Closing. If Buyer
consummates a public offering or a private offering before
the debt described in this Section 2.1.1 is paid in full,
then Seller may at its election participate in the offering
by converting its debt then owed under this Section 2.1.1
into equity, at a conversion rate based on 100% of the value
of the stock acquired in the conversion.
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2.1.2 Two Million (2,000,000) shares of Janex Stock
(defined below), which will be stock newly issued at the
Closing (additional to shares currently issued), and will be
issued at the Closing to Seller.
The term "JANEX STOCK" as used herein means the publicly
traded common stock of Buyer, subject to all terms and restrictions
relating thereto.
2.2 Buyer may offset amounts paid by Buyer for debts of Seller
against the amount due by Buyer to Seller as described in Section 2.1.1
above. At the Closing, Seller will provide Buyer with a certified
affidavit listing all of Seller's creditors and the balances owing to
the creditors (all creditors shall be listed, including any with
disputed claims). To the extent of the payments payable under Section
2.1.1 above, Buyer may pay the creditors on said list the amounts owing
as shown on said list, updated to the dates of payment, except that
amounts owing on disputed claims will be paid by Buyer to ▇▇▇▇▇▇ ▇.
▇▇▇▇ ("HOLDER") to be held by Holder in escrow in Holder's Bar Trust
Account for the benefit of Buyer and Seller until Buyer and Seller
agree as to the amounts to be paid to the creditors or until a Court
orders distribution of the amounts so held.
Holder shall deposit the amount received under this Section
into an interest bearing account. Interest earned in the account will
be applied in the same manner as principal is applied as called for in
this Section.
Holder shall be relived of all responsibility for funds held upon
surrendering them or tendering surrender of them pursuant to this
Agreement. The parties hereby authorize Holder, in the event any
demand is made upon Holder concerning this Agreement, at Holder's
election, to hold the money and any documents deposited with Holder
until an action shall be brought in a Court of competent jurisdiction
to determine the rights of the parties, or to interplead the parties
by an action brought in any Court. Deposit by Holder of all of said
funds and documents, after deducting therefrom Holder's charges and
expenses and attorneys' fees incurred in connection with any such
Court action or incurred in connection with Holder's duties hereunder,
shall relieve Holder from all further liability and responsibility in
connection therewith.
Seller and Buyer agree to indemnify and defend and hold
Holder harmless against all claims, demands or damages, including
attorneys' fees, expenses, and liabilities that Holder may incur
or sustain in connection with this Agreement or any court action
arising therefrom, and will pay the same upon demand. If not paid
upon demand, such amounts shall accrue interest at the rate of
12% per annum until paid in full.
Solely at Holder's election, Holder may resign as Holder by
sending written notice thereof to the parties to this Agreement.
The resignation shall be effective ten (10) days after the notice
is deposited into the United States mail, or such other date as
selected by Holder. All documents and monies held by Holder after
such resignation shall be returned to the proper parties or held
by Holder at Holder's discretion until the parties shall have
named a successor Holder.
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2.2 Buyer may offset amounts paid by Buyer for debts of Seller
against the amount due by Buyer to Seller as described in Section 2.1.1
2.3 The purchase price shall be allocated in accordance with
EXHIBIT 2.3 attached hereto.
2.4 The purchase price includes assumption of liabilities as
set out in Section 3 below.
2.5 ▇▇▇▇▇ will as soon as is practicable after the Closing
release, and transfer to Seller, the rights (to acquire Seller's
stock) which are described on EXHIBIT 2.5 attached hereto. ▇▇▇▇▇
agrees to execute such additional documents as are appropriate to
effect such release and transfer, but this document shall
automatically and without further act being required constitute such
release and transfer, effective at and only at the Closing. ▇▇▇▇▇
shall as soon as is practicable after the Closing be issued common
stock of Buyer representing ten percent (10%) of the capital stock of
Buyer.
3. LIABILITIES.
3.1 Buyer at the Closing will assume only the following of
Seller's obligations (the assumed obligations being referred to in this
Agreement as the "ASSUMED LIABILITIES"):
3.1.1 Seller's obligations under the contracts
identified on EXHIBIT 3.1.1-1 attached hereto and Seller's
obligations under the other liabilities which are identified
on EXHIBIT 3.1.1-2 attached hereto (unless otherwise
designated on EXHIBIT 3.1.1-1 or EXHIBIT 3.1.1-2, said
assumptions shall include only obligations arising after and
relating to the time period after the Closing).
3.2 All liabilities of Seller other than those identified in
Section 3.1 above shall be and remain the obligations of Seller, and
Seller shall indemnify, defend and hold Buyer harmless from and against
any and all such liabilities. Without limiting the generality of the
foregoing, it is expressly understood and agreed that Buyer is not
assuming any tort liability, any environmental liability, any
contractual liability for contracts not disclosed to and agreed upon by
Buyer, or any liability to or for employees or employee benefits. The
indemnities set forth in this Section shall survive the Closing.
3.3 Buyer may offset against the purchase price any and all
liabilities associated with the Assets which are not expressly assumed
by Buyer but which Buyer pays.
3.4 The following expenses associated with the Website and
other assets transferred hereby will be prorated to the close of
escrow: phone expenses, advertising expense, insurance premiums on any
insurance transferred to Buyer, personal property taxes, and other
normal operating expenses for the Website. If any of said expense
allocations or credits cannot be determined by the parties at the
Closing, then the parties will calculate the prorations and credits as
soon as practicable thereafter and pay each other any amounts owing as
a result thereafter within five (5) days after the determination is
made.
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3.5 Seller will, to the extent requested by Buyer, deliver to
Buyer prior to the Closing, estoppel letters or certificates, in form
acceptable to Buyer, from the lessors under the Equipment Leases.
3.6 Seller hereby agrees to indemnify, defend and hold Buyer
harmless from and against any and all liabilities, claims, expenses and
other costs arising from Seller's operations of the Website prior to
the Closing, except as expressly assumed by Buyer pursuant to this
Section 3. Buyer hereby agrees to indemnify, defend and hold harmless
Seller from and against any and all liabilities, claims, expenses or
other costs arising from Buyer's operations of the Wbsite from and
after the Closing. The indemnities set forth in this Section shall
survive the Closing.
4. INTERIM EVENTS. Seller agrees that Seller will take no action prior
to the Closing, other than in the ordinary course of business, which would or
might have a material adverse effect upon the financial condition of Seller, or
the value of the Website, and no benefits will be paid or incurred to
shareholders, officers, or directors of Seller between the date hereof and the
Closing, other than as is consistent with past activities and practices. Seller
will use Seller's best efforts to preserve for Buyer the present relationships
of Seller with Seller's employees, customers and others having business
relations with Seller relating to the Website.
5. CONDITIONS TO CLOSING. Buyer's obligation to close the Transaction
shall be conditioned upon (each of the conditions may be waived by Buyer in
writing only):
5.1 Buyer obtaining from the lessors of the Equipment Leases
their consents to the transfer of those leases to Buyer on terms
acceptable to Buyer;
5.2 Buyer having obtained, or having obtained the appropriate
consents or approvals to the assignment of, all permits, licenses and
contracts necessary to continue the operations of the Website;
5.3 Seller having maintained the Assets in the same condition
as of the date of this Agreement (subject to ordinary wear and tear
only);
5.4 Seller having conducted the operations of the Website
diligently and substantially in the same manner as prior to the
execution of this Agreement and not having entered into any contract,
commitment or transaction not in the usual and ordinary course of
business;
5.5 The operations of the Website not having changed in a
material and adverse manner between the date of this Agreement and the
date of Closing;
5.6 There being no governmental investigations or suits
pending or threatened with respect to the operations of the Website,
except as may otherwise be agreed to in writing by Buyer;
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5.7 Buyer obtaining from the lenders under the debts to be
assumed by Buyer under this Agreement their consents to the transfer of
those debts to Buyer on terms acceptable to Buyer.
6. CLOSING. The closing of the Transaction (the "Closing") shall occur
on March 3, 2000 at 10:00 a.m. M.S.T. at Buyer's business. The Transaction shall
be consummated without the use of an independent escrow company.
7. RESTRICTIVE COVENANTS.
(a) Seller agree not to, without the prior written consent of
Buyer, which consent may be withheld for any or no reason, for a
period of 3 years following the Closing, directly or indirectly, own,
manage, operate, control, be employed by, participate in, render
services to, make loans to, or be connected in any manner with the
ownership, management, operation, or control of any business operating
a website which is competitive with the Website.
In the event of any actual or threatened breach of the
provisions of this Section, Buyer shall be entitled to an injunction
restraining the actual or threatened breach. The parties further agree
that should there be a violation of the provisions of this Section,
the violating party shall be liable to Buyer for, in addition to
amounts pursuant to other remedies available against that party, two
(2) times the greater of the amount of profit earned by the violating
party as a result of the violation and the amount of profit which
would have been earned by Buyer from the activities causing the
violation had Buyer conducted said activities, plus interest on said
greater amount calculated at eighteen percent (18%) per annum from the
date of the violating activities until paid, as liquidated damages for
only Buyer's loss of potential profits. Nothing in this paragraph
shall be construed as prohibiting Buyer from pursuing any other
available remedies for such breach or threatened breach, including
pursuing a recovery for damages.
(b) Seller shall not, at any time within two (2) years after
the Closing, without the prior written consent of Buyer, which consent
may be withheld for any reason or no reason, directly or indirectly
induce, encourage or solicit or assist any person who was or is
employed (whether as an employee or as an independent contractor) by
the Seller to work on creation or maintenance of the Website during the
two years preceding the Closing, to leave the employ of Buyer, if Buyer
hires said person after the Closing.
(c) The parties acknowledge and agree that the restrictions
contained herein, including but not limited to the time period and
geographical area restrictions, are fair and reasonable and necessary
for the successful operation of the Website, that violation of any of
them would cause irreparable injury, and that the restrictions
contained herein are not unreasonably restrictive of any party's
ability to earn a living. If the scope of any restriction in this
Section is too broad to permit enforcement of such restriction to its
fullest extent, then such restriction shall be enforced to the maximum
extent permitted by law, and all parties hereto consent and agree that
such scope shall be modified judicially or by
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arbitration in any proceeding brought to enforce such restriction. The
parties hereto acknowledge and agree that remedies at law for any
breach or violation of the provisions of this Section would alone be
inadequate, and agree and consent that temporary and permanent
injunctive relief may be granted in connection with such violations,
without the necessity of proof of actual damage, and such remedies
shall be in addition to other remedies and rights the parties may have
at law or in equity. The parties agree that no party shall be required
to give notice or post any bond in connection with applying for or
obtaining any such injunctive relief.
(d) The parties acknowledge and agree that the covenants in
this Section shall be construed as an agreement independent of any
other provision of this Agreement, so that the existence of any claim
or cause of action by Seller against Buyer, whether predicated on this
Section or otherwise, shall not constitute a defense to the enforcement
of this Section.
8. DUE DILIGENCE INVESTIGATION. Buyer shall have until the Closing (the
"Due Diligence Period") in which to conduct any due diligence investigations,
including UCC-1 searches, which Buyer may deem necessary or appropriate to
ascertain the financial viability and value of the Assets. Throughout the Due
Diligence Period, Buyer (and its agents) shall have the right to inspect: (i)
all books, records and computer systems maintained by Seller, in order to
authenticate and audit all financial information provided to Buyer, (ii) all
equipment and machinery included in the definition of "Assets" as used in this
Agreement to verify that it is in an acceptable state of repair, (iii) all
agreements to which Seller is a party relating to the Website, and (iv) all
facilities and physical operations of Seller, including facilities warehousing
inventory. Seller shall provide access to Seller's federal and state income tax
returns, sales tax returns, financial statements (internal and those issued to
third parties), personal property tax returns, and all other governmental
filings, for the three previous years, for the purpose of conducting due
diligence investigations. Buyer may, in Buyer's sole discretion, terminate this
Agreement at any time prior to the Closing for any reason deemed appropriate by
Buyer.
Buyer and its representatives will further have the authority to
communicate with Seller's creditors, debtors, suppliers, agents and employees.
Seller agrees to aid Buyer and its representatives in Buyer's investigations and
evaluations of the Assets, and to provide whatever information and documents
Buyer reasonably deems necessary or appropriate to the making of an informed
decision regarding the Transaction.
9. ACCESS TO CUSTOMER FILES AND OTHER RECORDS. For a period of three
(3) years following the Closing, where there is a legitimate purpose not
injurious to Buyer, or if there is an audit by any taxing authority, other
governmental inquiry, or litigation or prospective litigation, to which Seller
is or may become a party, then Seller shall be granted access, at reasonable
times and after reasonable notice, to all customer files and other records
transferred to Buyer pursuant to this Agreement.
10. REPRESENTATIONS AND WARRANTIES. Seller hereby represents and
warrants as follows, as of the date hereof and as of the date of the Closing:
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10.1 AUTHORITY. As of the date of execution of this Agreement,
Seller has the power and authority to enter into and perform its
obligations under this Agreement.
10.2 FINANCIAL INFORMATION. Seller has furnished Buyer with
true, correct and complete copies of Seller's financial statements and
other books and records relating to the operation of the Website, which
statements fairly present what they purport to present as of their
respective dates.
10.3 TAXES. All federal and state income, excise, franchise,
payroll, property, sales, and other tax returns required to be filed by
or with respect to Seller's business (except returns not yet due) have
been filed, are complete and accurately reflect in all material
respects all matters therein required to be reflected, and all taxes
shown on such returns to be due, and any assessments received by Seller
with respect thereto, have been paid in full. Seller shall pay all such
future taxes relating to periods prior to the Closing, when and as the
same shall become due and payable. Seller shall provide Buyer with such
certificates and other evidence of payment of all taxes due in
connection with the Assets as Buyer shall request.
10.4 MATERIAL CHANGES. From the date of the most recent
financial statements provided by Seller to Buyer, and through the day
hereof, and through the date of Closing, Seller's business has been
conducted only in the ordinary course, there have been no material
adverse changes in the financial condition or operations of Seller's
business, and there has been no damage, destruction or other occurrence
(whether or not insured against) which materially adversely affects the
financial condition or operations of said business.
10.5 LIENS. All property to be transferred by Seller to Buyer
pursuant to this Agreement is, at the time of this Agreement, or will
be at the Closing, free and clear of any and all liens and
encumbrances.
10.6 LITIGATION. To the knowledge of Seller or Shareholder,
there is no litigation, proceeding, or investigation pending against
Seller, and Seller has no reasonable grounds to know any basis for such
litigation, proceeding or investigation.
10.7 LICENSES. Seller has any and all licenses, permits, and
contracts necessary and/or appropriate to operate the Website in the
manner in which the Website is currently operated.
10.8 HAZARDOUS MATERIALS. Seller has not dealt in any manner
with any hazardous or toxic materials or waste.
10.9 COMPLETE DISCLOSURE. Seller has disclosed to Buyer all
facts and papers which would or might be important to Buyer in making
the decision to purchase the Assets as called for in this Agreement.
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10.10 JUDGMENTS AGAINST SELLER AND/OR ASSETS. Seller is not
under any governmental investigation, no such investigation has been
threatened, and there are no judgments against Seller or the Assets.
10.11 COMPLETE SALE. The assets to be transferred under this
Agreement are all of the assets used by Seller in the operation of the
Website, other than the Excluded Assets.
10.12 ASSETS IN GOOD CONDITION. Each of the Assets which is a
tangible asset is and will be at the Closing in good working order and
condition.
10.13 DISCLOSURE MATERIALS. The financial condition of Seller
is at least as favorable as presented in the financial information,
including tax returns and financial statements, and books and records
provided by Seller to Buyer. Those materials and the other materials
disclosed to Buyer are true, complete and accurate in all respects, and
fairly represent the information they purport to provide. All the
information disclosed, as a whole, does not contain any statement that,
as of the date hereof, or as of the Closing, is false or misleading,
and does not omit to state any material fact (i) necessary to make the
statements made, in light of the circumstances under which they were
made, not false or misleading, or (ii) necessary to provide Buyer with
complete and accurate information as to Seller's assets and financial
standing.
10.14 DEFAULTS. There are no defaults or events with which the
giving of notice or the passage of time would constitute defaults under
any document under which Seller is obligated, including but not limited
to the Equipment Leases.
10.15 BULK SALES PROVISIONS. Seller shall indemnify and hold
Buyer harmless from any liability resulting from any failure to comply
with any applicable Bulk Sales provisions with respect to any and all
liabilities of Seller.
10.16 VENDOR ACCOUNTS. Seller will use Seller's best efforts
to cause a transfer to Buyer of all of Seller's supplier and other
vendor accounts relating to the Website, without adverse changes in the
account terms.
10.17 OUTSTANDING LIABILITIES. There are no liabilities of
Seller other than as are shown on the most recent financial statement,
other than liabilities arising in the normal course of business out of
purchases and sales of goods.
10.18 LOSSES. There are no unrealized or anticipated losses on
any commitment or contract of Seller.
The representations and warranties in this Section shall survive the Closing of
the Transaction.
11. This Section is intentionally omitted.
13
12. BULK SALE PROVISIONS. At Buyer's option, the parties will comply
with any and all bulk sale laws applicable to the Transaction. Seller warrants
and covenants to pay and discharge when due all claims of creditors which could
be asserted against Buyer by reason of any non-compliance with applicable bulk
sales laws to the extent that such liabilities are not specifically assumed by
Buyer under this Agreement.
13. EXPENSES. Each party shall bear its own expenses in completing the
Transaction. "Expenses" shall mean any expense of any nature incurred in
connection with the Transaction, including without limitation attorneys' fees,
accounting fees, filing fees and other costs.
14. BROKERAGE COMMISSIONS. Seller shall be solely responsible for the
payment of any and all brokerage fees or commissions in connection with the
Transaction and shall indemnify and hold harmless Buyer from and against any
liabilities or claims incurred in connection with such fees or commissions.
15. GOVERNING LAW; JURISDICTION. The courts of the State of Arizona
shall have the sole and exclusive jurisdiction and venue in any case or
controversy arising under this Agreement or by reason of this Agreement. The
parties agree that any litigation or arbitration arising from the interpretation
or enforcement of this Agreement shall be only in either Maricopa County
Superior Court or in the United States Federal District Court for the District
of Arizona, and for this purpose each party to this Agreement (and each person
who shall become a party) hereby expressly and irrevocably consents to the
jurisdiction and venue of such courts.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns, but may not be assigned by Seller.
17. ENTIRE AGREEMENT. Except as otherwise set forth herein, this
Agreement constitutes the entire agreement between the parties which respect to
the subject matter hereof, and supersedes all prior understandings, if any, with
respect thereto.
18. FURTHER ASSURANCES. The parties agree to do such further acts and
things and to execute and deliver such additional agreements and instruments as
any party may reasonably require to consummate, evidence, or confirm any
agreement contained herein in the manner contemplated hereby.
19. MODIFICATION. Any modification or waiver of any term of this
Agreement, including a modification or waiver of this term, must be in writing
and signed by the parties to be bound by the modification or waiver.
20. SEVERABILITY. In the event any portion of this Agreement shall be
declared by any court of competent jurisdiction to be invalid, illegal, or
unenforceable, such portion shall be deemed severed from this Agreement, and the
remaining parts hereof shall remain in full force and effect as fully as though
such invalid, illegal or unenforceable portion had never been a part of this
Agreement.
14
21. COUNTERPARTS, FACSIMILE SIGNATURES. This Agreement may be executed
by the parties in one or more counterparts, and any number of counterparts
signed in the aggregate by the parties shall constitute a single instrument. The
parties authorize and agree to accept facsimile signatures in counterparts to
this Agreement, and that said facsimile signatures shall for all purposes be
binding upon the parties as if the same were original signatures.
22. ATTORNEY'S FEES. Should any party institute any action or
proceeding to enforce this Agreement or any provision hereof, or for damages by
reason of any alleged breach of this Agreement, or of any provision hereof, or
for a declaration of rights hereunder, the prevailing party(s) of such action or
proceeding shall be entitled to receive from the other involved party or parties
all costs and expenses, including reasonable attorneys' fees and expert witness
fees incurred by the prevailing party(s) in connection with such action or
proceeding.
23. NOTICES. Any notice or communication given under the terms of this
Agreement ("Notice") shall be in writing and shall be delivered in person or
mailed by certified mail, return receipt requested, in the United States Mail,
postage pre-paid, addressed as follows:
If to Seller: Futech Interactive Products, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Buyer: ▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or at such other address as a person may from time to time designate by Notice
hereunder. Notice shall be effective upon delivery in person, or if mailed, at
midnight on the third business day after the date of mailing.
24. PARAGRAPH TITLES AND HEADINGS. The titles and headings of sections
of this Agreement are for the convenience of reference only, and are not
intended to define, limit, or describe the scope or intent of any provision of
this Agreement, and shall not affect the construction of any provision of this
Agreement.
25. PUBLICITY. Seller and Buyer agree that no public release or
announcement concerning the Transaction shall be issued by any party prior to
the Closing without the prior consent (which consent shall not be unreasonably
held) of the other party, except: (i) any document utilized in connection with
Buyer's financing for the Transaction; and (ii) as such release or announcement
may be required by law, in which case the party required to make the release or
announcement shall allow the other party reasonable time to comment on such
release or announcement in advance of such issuance. Buyer shall have the sole
right to determine what, if any, public announcement shall be made after the
Closing; provided, however, that Buyer will prior to the release of its initial
public announcement, deliver a copy thereof to Seller for Seller's review and
comment.
15
26. MISCELLANEOUS. The parties agree that each party and its counsel
have reviewed and revised this Agreement, or had an opportunity to review and
revise this Agreement, and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not apply to the
interpretation of this Agreement or any amendments or exhibits hereto. In the
event of default by Seller hereunder, Buyer shall, in addition to its other
remedies under this Agreement and in law or equity, be entitled to specific
performance of Seller's obligations under this Agreement. The parties do not
intend to confer any benefit upon any person, firm, or corporation other than
the parties hereto. No representation or warranty herein may be relied upon by
any person not a party to this Agreement. The Exhibits attached hereto are
incorporated into and are part of this Agreement. The parties agree that the
Assets constitute unique property, that there is no adequate remedy at law for
the damage which might be sustained for the failure of a party to this Agreement
to consummate the Transaction, and, accordingly, that each party hereto shall be
entitled to the remedy of specific performance to enforce such consummation. The
parties agree that time is of the essence of each and every provision of this
Agreement.
DATED the date first hereinabove written.
SELLER: Futech Interactive Products, Inc., an Arizona corporation
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
BUYER: ▇▇▇▇.▇▇▇, Inc., a Delaware corporation
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
16
LIST OF EXHIBITS:
----------------
List of Specific Furniture, Fixtures and Equipment 1.2
Assumed Leases 1.3
List of Specifically Included Intellectual Property Rights 1.7
List of Specifically Listed Other Assets 1.11
Purchase Price Allocation 2.3
▇▇▇▇▇'▇ Rights to Acquire Seller's Stock 2.5
Assumed Contracts 3.1.1-1
Other Assumed Liabilities 3.1.1-2
17
EXHIBIT 1.2
(LIST OF SPECIFIC FURNITURE, FIXTURES AND EQUIPMENT)
18 Exhibit 1.2, Page 1 of 1
EXHIBIT 1.3
(ASSUMED LEASES)
19 Exhibit 1.3, Page 1 of 1
EXHIBIT 1.7
(LIST OF SPECIFICALLY INCLUDED INTELLECTUAL PROPERTY RIGHTS)
20 Exhibit 1.7, Page 1 of 1
EXHIBIT 1.11
(LIST OF SPECIFICALLY LISTED OTHER ASSETS)
21 Exhibit 1.11, Page 1 of 1
EXHIBIT 2.3
(PURCHASE PRICE ALLOCATION)
22 Exhibit 2.3, Page 1 of 1
EXHIBIT 2.3
(PURCHASE PRICE ALLOCATION)
23 Exhibit 2.3, Page 1 of 1
EXHIBIT 2.5
(▇▇▇▇▇'▇ RIGHTS TO ACQUIRE SELLER'S STOCK)
24 Exhibit 2.5, Page 1 of 1
EXHIBIT 3.1.1-1
(ASSUMED CONTRACTS)
25 Exhibit 3.1.1-1, Page 1 of 1
EXHIBIT 3.1.1-2
(OTHER ASSUMED LIABILITIES)
26 Exhibit 3.1.1-2, Page 1 of 1
