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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 21, 1997
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Date of Report (Date of earliest event reported)
ML DIRECT INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-21211 13-3842020
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization File Number) Identification)
No.)
645 Fifth Avenue
New York, New York 10022
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(Address of principal executive offices) (Zip code)
(212) 355-5634
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(Registrant's telephone number, including area code)
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Item 2. Acqusition or Disposition of Assets.
On October 21, 1997, pursuant to an Asset Purchase Agreement (the
"Agreement"), ML Direct Inc. (the "Company") sold certain assets to Star
Shoppe Direct, Inc. ("Star Shoppe"), a Florida corporation wholly-owned by
Benedict V. White ("White"), the then Executive Vice President of the
Company. In the transaction, (i) the Company received cash consideration of
$118,000, (ii) the Company retained a 50% interest in the gross revenue, if
any, paid to Star Shoppe as a result of a certain infomercial, (iii) Star
Shoppe assumed the Company's lease of office space in Clearwater, Florida,
and an equipment lease, and Star Shoppe acquired the office furnishings at
the Clearwater location, and (iv) the Company assigned certain contracts,
contract rights, trademarks and potential contractual and business relations
to Star Shoppe. The consideration received by the Company was determined in
arms-length negotiations between the Company and Mr. White. In connection
with the transaction the Company and Mr. White entered into a Separation
Agreement and Release pursuant to which Mr. White's employment relationship
with the Company was terminated effective as of September 12, 1997, and the
Company and Mr. White exchanged mutual releases. The foregoing summary is not
a complete description of the terms of the reported transaction; reference is
made to the Exhibits attached hereto as Exhibits 2.1 through 2.5, each of
which is incorporated herein by reference. Such summary is qualified in its
entirety by such reference.
Item 5. Other Events.
As of October 24, 1997, James Lawless resigned as the Company's President.
The Company's Chairman, Nancy Shalek, has been elected President of the
Company.
The Company has moved its principal executive offices to 645 Fifth Avenue,
Suite 1102, New York, NY 10022.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of business acquired.
Not applicable.
(b) Pro forma financial information.
To be filed shortly.
(c) Exhibits.
2.1 Asset Purchase Agreement among ML Direct Inc. (the "Company"), Star
Shoppe Direct, Inc. ("Star Shoppe") and Benedict V. White ("White"),
dated as of October 20, 1997.
2.2 Bill of Sale, dated as of October 20, 1997, from the Company to Star
Shoppe.
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2.3 Assignment and Assumption Agreement, dated as of October 20, 1997,
between the Company and Star Shoppe.
2.4 Assignments of Trademarks, from the Company to Star Shoppe.
2.5 Separation Agreement and Release, dated as of October 20, 1997,
between the Company and White.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934. the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ML DIRECT INC.
Date: November 5, 1997 By:/s/ Nancy Shalek
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Nancy Shalek
Chairman, Chief Executive Officer
and President
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated October 20, 1997, by and between Star
Shoppe Direct, Inc., a Florida corporation (the "Buyer"), Benedict V. White
("White") and ML Direct, Inc., a Delaware corporation (the "Seller").
1. Definitions. The following terms when used in this Agreement
shall have the meaning set forth opposite such term. Other terms are defined
elsewhere in this Agreement:
1.1 Assets: The Furnishings, Intangible Property, Lease and
Contracts, collectively.
1.2 Assumed Liabilities: The obligations and liabilities (A)
arising out of, under or pursuant to: (i) the Contracts listed on Schedule
1.7(a), (ii) the Lease and (iii) the Furnishings Lease, and (B) listed on
Schedule 1.2. Buyer assumes no other liabilities of Seller.
1.3 Business: The promotion and sale, wholesale and retail, of
various products, principally through electronic or direct response placement
or retail outlets as operated from the Leased Facilities.
1.4 Closing: The consummation of the transactions herein
contemplated.
1.5 Closing Date: The day on which the Closing occurs.
1.6 Closing Documents: The Bill of Sale, annexed hereto as
Exhibit A, the Assignment and Assumption Agreement annexed hereto as Exhibit B,
the Consent to the Assignment of Lease evidencing the lessor's consent to the
assignment of the Lease to Buyer in form and substance reasonably acceptable to
Buyer and Seller, the Assignment of Trademark annexed hereto as Exhibits C and
D, the Confidential Separation Agreement and Release annexed hereto as Exhibit
E, and all other instruments and documents required to be executed and
delivered at the Closing in order to consummate the Closing.
1.7 Contracts: All of Seller's right, title and interest in and
to the contracts and agreements, including Seller's duties and obligations
thereunder as indicated on Schedule 1.7(a), and prospective or potential
contractual or business relations with such parties, as indicated on Schedule
1.7(b).
1.8 Furnishings: All tangible property located at the Leased
Facilities, whether leased or owned by Seller.
1.9 Furnishings Lease: The lease of the certain office equipment
and furniture between Seller and Aaron Rents, Inc., as indicated in Schedule
1.9.
1.10 Intangible Property: All of Seller's right, title and
interest in and to the tradenames "Optimum Maid" and "Scent Signs", the marks
related thereto, and the goodwill
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symbolized by the names and the marks.
1.11 Knowledge: Actual knowledge.
1.12 Leased Facilities: The real property located at 3001
Executive Drive, Suite 120, Clearwater, Florida, which is the subject of the
lease dated October 28, 1996 between Seller and SeaLund & Associates
Corporation ("Lease").
1.13 Purchase Price: The price payable by Buyer as consideration
for the sale of the Assets and more fully described in Section 2.2.
2. Sale and Purchase of Assets.
2.1 Sale of Assets. At the Closing, (i) Seller shall sell,
convey and deliver the Assets to the Buyer pursuant to a Bill of Sale and
Assignment and Assumption Agreement in the forms annexed as Exhibits A and B,
respectively; and (ii) the Buyer shall purchase, acquire and assume the Assets
and the Assumed Liabilities, from Seller for the Purchase Price. In addition,
at the Closing the parties hereto shall execute and deliver the other Closing
Documents, the Consent to Assignment of Lease to be delivered as soon as
practicable.
2.2 Purchase Price and Payment. The Purchase Price for the
Assets shall be one hundred thousand dollars ($100,000) which shall be paid at
the Closing by cashiers' check or wire transfer in immediately available funds.
In addition, on the Closing, Buyer shall assume the payment, performance and
discharge of the Assumed Liabilities.
2.3 Reimbursement of Expenses. At the Closing, Buyer shall pay
to Seller the amount on Schedule 2.3 as reimbursement for those expenses
incurred after September 12, 1997.
2.4 HSN Direct. Buyer shall pay Seller fifty percent (50%) of
the gross revenue paid to Buyer from HSN Direct ("HSN") from Magic Fingers
infomercials. Payment shall be made directly from HSN to Seller provided,
however, that if HSN elects not to make such payments directly to Seller, Buyer
shall make such payments to Seller within five (5) business days of receipt of
payment from HSN. Buyer shall take reasonable good faith efforts to provide
Seller with such information as is reasonable to enforce this Section 2.4.
Seller shall have the right to inspect Buyer's books and records, at Seller's
expense, to the extent reasonably necessary to enable Seller to ascertain
whether it has received the full amount of the payments to which it is entitled
pursuant to this Section 2.4. If requested by Seller, Buyer will request HSN,
in writing, that it is to pay Seller all amounts payable to Seller pursuant to
this Section 2.4, and that HSN is to provide Seller with such documentation as
Seller may reasonably request to enable it to ascertain whether it has received
the full amount of the payments to which it is entitled pursuant to his Section
2.4. Nothing herein shall be construed as (i) permitting Seller any rights
(other than the right to receive the stated percentage of gross revenues) under
any Magic Fingers infomercial contracts or (ii) a
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partnership or agency relationship between Seller and Buyer.
2.5 Closing. The Closing shall take place at the offices of
Gersten, Savage, Kaplowitz & Fredericks, LLP, 101 East 52nd Street, New York,
New York 10022, at 10:00 a.m. local time, on October 20, 1997. The Closing may
occur at such other time and place as Buyer and Seller shall mutually agree and
shall occur earlier than the date specified above, by a notice similarly given,
if the conditions precedent have been satisfied prior to such date.
3. Representations and warranties of the Seller. The Seller
represents and warrants to the Buyer as follows:
3.1 Due Incorporation and Qualification. Seller is a
corporation duly organized and validly existing under the laws of the State of
Delaware.
3.2 Due Authorization and No Breach. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
(i) have been duly authorized by the board of directors of Seller and (ii) will
not conflict with or result in the breach or violation of any of the terms or
conditions of, or constitute (or, with notice or lapse of time or both, would
constitute) a default under, (A) the Certificate of Incorporation or By-laws of
Seller; (B) any material instrument, contract or other agreement relating to the
Business to which Seller is a party or by which any of the Assets is bound or
subject; or (C) any material statute or any regulation, order, judgment or
decree of any court or governmental or regulatory body; in each case the result
of which would materially and adversely affect the Assets or Business or the
ability of Seller to consummate the transactions contemplated herein.
3.3 Litigation. Except as set forth on Schedule 3.3 or to
White's knowledge, Seller is not a party to, nor to its knowledge, threatened
with, nor is there a basis for, any litigation or judicial, administrative or
arbitration proceeding which if decided adversely to Seller would have a
material adverse effect upon the transactions contemplated hereby or upon the
Assets or Business.
3.4 Claims. To Seller's knowledge, except for claims by the
applicable lessors under the Lease or Furnishings Lease or the contracting
parties under the Contracts or to White's knowledge, there are no claims on any
Asset by any third party which, if determined to be valid, would substantially
impair the value of the Assets taken as a whole.
3.5 Representations and warranties on Closing Date. The
representations and warranties contained in this Article 3 shall be true and
complete on and as of the Closing Date with the same force and effect as though
such representations and warranties have been made on and as of the Closing
Date.
4. Representations and Warranties of the Buyer. The Buyer and
White, jointly
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and severally, represent and warrant to the Seller as follows:
4.1 Due Incorporation and Qualification. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida.
4.2 Due Authorization and No Breach. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
(i) have been duly authorized by the board of directors of the Buyer and (ii)
will not conflict with or result in the breach or violation of any of the terms
or conditions of, or constitute (or, with notice or lapse of time or both, would
constitute) a default under, (A) the Certificate of Incorporation or By-laws of
the Buyer; (B) any material instrument, contract or other agreement relating to
the Business to which the Buyer is a party or by which any of the Assets is
bound or subject; or (C) any material statute or any regulation, order, judgment
or decree of any court or governmental or regulatory body; in each case the
result of which would materially and adversely affect the Assets or Business or
the ability of the Buyer to consummate the transactions contemplated herein.
4.3 Litigation. Neither Buyer or White is a party to, nor to
their knowledge, threatened with, nor is there a basis for, any litigation or
judicial, administrative or arbitration proceeding which if decided adversely
to Buyer or White would have a material adverse effect upon the transactions
contemplated hereby or upon the Assets or Business.
4.4 Representations and Warranties on Closing Date. The
representations and warranties contained in this Article 4 shall be true and
complete on and as of the Closing Date with the same force and effect as though
such representations and warranties have been made on and as of the Closing
Date.
5. Covenants and Agreements. The parties covenant and agree as
follows:
5.1 Execution of Closing Documents. On the Closing, each of the
parties shall execute and deliver, and cause its affiliates to execute and
deliver, each of the Closing Documents to be executed and delivered by it.
5.2 Cooperation in Preparing Applications. The parties hereto
agree that they will assist and cooperate fully with each other in the prompt
preparation and filing of any applications, approvals, consents or similar
documents which counsel for the Buyer and counsel for the Seller shall agree are
required for the consummation of the transactions provided for in this
Agreement.
5.3 Consent to Jurisdiction and Service of Process. Any legal
action, suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby may be instituted in any state or federal court
in the State of New York, and each party waives any objection which such party
may now or hereafter have to the laying of the venue of any such action, suit or
proceeding, and irrevocably submits to the jurisdiction of any such court in any
such action,
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suit or proceeding. Any and all service of proceeding shall be
effective against any party if given by registered or certified mail, return
receipt requested, or by any other means of mail which requires a signed
receipt, postage prepaid, mailed to such party as herein provided.
5.4 Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby, including, but not limited to, assignment of any registered
tradename or mark of the Intangible Property and assignments of the Contracts
which Seller shall prepare subject to Buyer's approval which shall not be
unreasonably withheld. Each such party shall use its best efforts, without the
incurring of undue expenses, to fulfill or obtain the fulfillment of the
conditions to the Closing, including, without limitation, the execution and
delivery of any documents or other papers, the execution and delivery of which
are conditions precedent to the Closing. Each party shall use reasonable
efforts to procure the consents necessary for assignment of the Contracts, the
Lease and the Furnishings Lease.
6. Conditions Precedent to the Obligation of the Buyer to Close.
The obligations of the Buyer to enter into and complete the Closing is subject
to the fulfillment on or prior to the Closing Date of the following conditions,
any one or more of which may be waived by it:
6.1 Representations and Covenants. The representations and
warranties of the Seller contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. Seller shall have performed and complied with all covenants and
agreements required by this Agreement to be performed or complied with by Seller
on or prior to the Closing Date.
6.2 No Injunction. No injunction or restraining order shall be
in effect which forbids or enjoins the consummation of the transactions
contemplated by this Agreement, no proceedings for such purpose shall be
pending, and no federal, state, or local statute, rule or regulation shall have
been enacted which prohibits, restricts or delays such consummation.
7. Conditions Precedent to the Obligation of the Seller to Close.
The obligations of the Seller to enter into and complete the Closing is subject
to the fulfillment on or prior to the Closing Date of the following conditions,
any one or more of which may be waived by it:
7.1 Representations and Covenants. The representations and
warranties of the Buyer contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. The Buyer shall have performed and complied with all covenants
and agreements required by this Agreement to be performed or complied with by
Buyer on or prior to the Closing Date.
7.2 No Injunction. No injunction or restraining order shall be
in effect
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which forbids or enjoins the consummation of the transactions contemplated by
this Agreement, no proceedings for such purpose shall be pending, and no
federal, state, or local statute, rule or regulation shall have been enacted
which prohibits, restricts or delays such consummation.
8. Survival of Representations and Warranties. All representations
and warranties of any party to the other made hereunder shall survive for a
period of one year following the Closing and any action thereon must be
commenced within one year of the Closing Date.
9. Waiver of Bulk Sales Compliance. The parties hereby waive
compliance with the requirements of the provisions of the Uniform Commercial
Code relating to bulk sales (Art. 6 thereof). In lieu of such compliance,
Seller shall indemnify and hold Buyer harmless from and against any claims
asserted against Buyer by creditors of Seller (including taxing authorities) as
and to the extent set forth in Section 10 hereof.
10. Indemnification.
10.1 Obligation of the Seller to Indemnify. Seller shall
indemnify, defend and hold harmless the Buyer and its assigns from and against
any losses, liabilities, damages or deficiencies, including interest, penalties
and reasonable attorneys' fees, but net of any related benefits ("Losses")
arising out of or due to a breach of any representation, warranty, covenant or
agreement of Seller contained herein or in any certificate or instrument
required to be delivered pursuant hereto, including, but not limited to, a
breach which results in a liability of Buyer to a third party, including, but
not limited to, any such claims resulting from the failure to comply with the
bulk sales law.
10.2 Obligation of the Buyer and White to Indemnify. The Buyer
and White, jointly and severally, shall indemnify, defend and hold harmless the
Seller and its assigns from and against any Losses arising out of or due to a
breach of any representation, warranty, covenant or agreement of the Buyer or
White, contained herein or in any certificate or instrument required to be
delivered pursuant hereto, including, but not limited to, a breach which results
in a liability of Seller to a third party, including, but not limited to,
Buyer's failure to pay or discharge an Assumed Liability.
10.3 Notice to Indemnifying Party. If any party (the
"Indemnitee") receives notice of any claim or the commencement of any action or
proceeding with respect to which any other party (or parties) is obligated to
provide indemnification (the "Indemnifying Party") pursuant to Section 10.1 or
10.2, the Indemnitee shall promptly give the Indemnifying Party notice thereof.
Such notice shall be a condition precedent to any liability of the Indemnifying
Party under the provisions for indemnification contained in this Agreement
provided that such Indemnifying Party shall be relieved of its obligation
hereunder only to the extent of the detriment suffered by the Indemnifying Party
as a result of Indemnitee's failure to give prompt notice. If such event
involves a claim by a third party, the Indemnifying Party shall have the right
at its sole expense to control and
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assume the defense of the matter giving rise to such indemnification with
counsel reasonably satisfactory to the Indemnitee and to compromise or settle
any such matter, provided that such compromise or settlement entirely and
unconditionally releases the Indemnitee from all liability with respect
thereto. If the Indemnifying Party shall assume the defense of the
Indemnitee, the Indemnitee shall have the right to participate in such
defense but only at its own expense and the Indemnifying Party shall not be
obligated to pay the fees of counsel to the Indemnitee incurred after such
assumption. If the Indemnifying Party does not assume the defense of such
matter within a reasonable time after notice thereof, the Indemnitee may
defend, settle and/or compromise such matter for the account and the expense
of the Indemnifying Party.
11. Termination of Agreement. This Agreement may be terminated prior
to the Closing as follows:
(i) at the election of the Seller, if any one or more of the
conditions to its obligations to close have not been fulfilled as of October 20,
1997;
(ii) at the election of the Buyer, if any one or more of the
conditions to its obligation to close have not been fulfilled as of October 20,
1997;
(iii) at the election of the Seller or the Buyer, if any
legal proceeding is commenced or threatened by any governmental agency or other
person directed against the consummation of the Closing or any other transaction
contemplated under this Agreement and either the Seller or the Buyer, as the
case may be, reasonably and in good faith deems it impractical or inadvisable to
proceed in view of such legal proceeding or threat thereof; or
(iv) at any time on or prior to the Closing Date, by mutual
written consent of the Seller and the Buyer. If this Agreement so terminates,
it shall become null and void and have no further force or effect, except as
otherwise provided herein.
12. Miscellaneous.
12.1 Publicity. Except as otherwise required by federal or state
law, no announcement concerning this Agreement or the transactions contemplated
hereby shall be issued without advance approval of the form and substance
thereof by the Seller and the Buyer which shall not be unreasonably withheld.
12.2 Notices. Any notice of other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, telegraphed, telecopied or telexed, or sent by certified,
registered, or express mail, postage prepaid, and shall be deemed given when so
delivered personally, telegraphed, telecopied or telexed, or if mailed three
days after the date of mailing, as follows:
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(i) If to the Buyer or White, to:
Star Shoppe Direct, Inc.
3001 Executive Drive, Suite 120
Clearwater, FL 34622
Attn: Benedict V. White
with a copy to:
Gersten, Savage, Kaplowitz & Fredericks, LLP
101 East 52nd Street, 9th Floor
New York, NY 10022
Attn: James G. Smith, Esq.
(ii) If to Seller, to:
ML Direct Inc.
c/o The Columbus Circle
211 East 49th Street
New York, New York 10017
Attn: Nancy Shalek
with a copy to:
Sierchio & Albert PC
41 East 57th Street
New York, NY 10022
Attn: Steve Albert, Esq.
12.3 Entire Agreement. This Agreement (including the Exhibits
and Schedules hereto) contains the entire agreement among the parties with
respect to the transactions contemplated hereby and supersedes all prior
agreements, written or oral, with respect thereto.
12.4 Waivers and Amendments. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder, preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity.
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The rights and remedies of any party arising out of or otherwise in respect
of any inaccuracy in or breach of any representation, warranty, covenant or
agreement contained in this Agreement shall in no way be limited by the fact
that the act, omission, occurrence or other state of facts upon which any
claim of any such inaccuracy or breach is based may also be the subject
matter of any other representation, warranty, covenant or agreement contained
in this Agreement (or in any other agreement between the parties) as to which
there is no inaccuracy or breach.
12.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12.6 No Assignment. This Agreement is not assignable by Seller
or Buyer, whether by operation of law or otherwise, without the prior written
consent of the other.
12.7 Variations in Pronouns. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
12.8 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12.9 Exhibits and Schedules. The Exhibits and Schedules to this
Agreement are a part of this Agreement as if set forth in full herein.
12.10 Headings. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.11 Expenses. Each party shall bear its own expenses in
connection with all matters relating to the transactions contemplated hereby.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above-written.
ML DIRECT INC.
By:___________________________________
Name:
Title:
STAR SHOPPE DIRECT, INC.
By:____________________________________
Benedict V. White
Title:
____________________________________
Benedict V. White
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BILL OF SALE
BILL OF SALE dated as of October 20, 1997, from ML DIRECT, INC., a
Delaware corporation ("Seller"), to STAR SHOPPE DIRECT, INC., a Florida
corporation ("Buyer").
Buyer and Seller are parties to an Asset Purchase Agreement dated as
of October ___, 1997 (the "Purchase Agreement"). Seller desires to sell,
transfer, convey, assign and deliver, and Buyer desires to purchase and acquire,
certain assets of Seller relating to the facility located at 3001 Executive
Drive, Suite 120, Clearwater, Florida ("Facility"). The execution and delivery
of this Bill of Sale is a condition to Buyer's obligations under the Purchase
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller hereby agrees as follow:
1. Capitalized terms used herein but not defined herein shall have
the meanings assigned such terms in the Purchase Agreement.
2. Seller hereby sells, transfers, conveys, assigns and delivers to
Buyer, and Buyer hereby accepts all of Seller's right, title and interest in and
to (i) the tangible property located at the Facility; and (ii) the prospective
or potential contractual or business relations with such parties set forth on
Schedule A-1 ("Transferred Assets").
3. Seller hereby covenants and agrees to execute and deliver to
Buyer such instruments of sale, transfer, conveyance, assignment and delivery,
and such consents, assurances, powers of attorney and other instruments as may
be reasonably requested by Buyer or its counsel in order to vest in Buyer all
right, title and interest of Seller in and to the Transferred Assets.
4. The Transferred Assets shall not include any assets other than
the Transferred Assets, including (i) all cash on hand and cash equivalents;
(ii) all monies to be received by Seller under the Purchase Agreement and all
other rights of Seller hereunder; (iii) all stock records, corporate and
partnership charters and seals, minute books and returns and records relating to
state and federal income taxes, check books, ledgers, and financials; provided,
however, that such documents and records shall be available for inspection and
copying by Buyer at all reasonable times upon request for a proper purpose; (iv)
all governmental permits, consents and authorizations; (v) any accounts
receivable or tax refunds for periods prior to the Closing Date; (vi) any of
Seller's shares of KN2B, Inc.; (vii) and the names "ML Direct" or "Home Shopping
Showcase".
5. Notwithstanding any other provision of this Bill of Sale to the
contrary, nothing contained in this Bill of Sale shall in any way supersede,
modify, replace, amend, change, rescind, waive, exceed, expand, enlarge or in
any way affect the provisions, including the warranties, covenants, agreements,
conditions, representations or, in general any of the rights and remedies, and
any of the obligations and indemnifications of Seller set forth in the Purchase
Agreement nor shall this Bill of Sale expand or enlarge any remedies under the
Purchase Agreement including without
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limitation any limits on indemnification specified therein. This Bill of
Sale is intended only to effect the transfer of certain property to be
transferred pursuant to the Purchase Agreement.
6. This Bill of Sale shall be governed by and construed in
accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed
and delivered on the date and year first written above.
ML DIRECT, INC.
By:__________________________________
Name:
Its:
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ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of October 20, 1997,
between STAR SHOPPE DIRECT, INC., a Florida corporation ("Buyer"), and ML
DIRECT, INC., a Delaware corporation ("Seller").
Buyer and Seller are parties to an Asset Purchase Agreement dated as
of October 20, 1997 (the "Purchase Agreement"). It is a condition precedent to
Buyer's and Seller's obligations under the Purchase Agreement that Buyer and
Seller execute and deliver this Assignment and Assumption Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Buyer hereby agrees as follows:
1. Capitalized terms used herein but not defined herein shall have
the meanings assigned such terms in the Purchase Agreement.
2. Seller hereby assigns to Buyer all of Seller's right, title and
interest in and to the contracts and agreements as set forth in Schedule B-1
(the "Contracts").
3. Buyer hereby assumes all obligations and liabilities arising out
of, under or pursuant to the Contracts (the "Assumed Liabilities").
4. From time to time after the date hereof, each of Buyer and Seller
will execute and deliver to the other such instruments as may be reasonably
requested by Buyer or its counsel or Seller or its counsel, as the case may be,
in order to carry out the purpose and intent of this Assignment and Assumption
Agreement and the Purchase Agreement.
5. Notwithstanding any other provision of this Assignment and
Assumption Agreement to the contrary, nothing contained in this Assignment and
Assumption Agreement shall in any way supersede, modify, replace, amend, change,
rescind, waive, exceed, expand, enlarge or in any way affect the provisions,
including the warranties, covenants, agreements, conditions, representations or,
in general any of the rights and remedies, and any of the obligations and
indemnifications of Buyer or Seller set forth in the Purchase Agreement nor
shall this Assignment and Assumption Agreement expand or enlarge any remedies
under the Purchase Agreement including without limitation any limits on
indemnification specified therein. This Assignment and Assumption Agreement is
intended only to effect the transfer of certain liabilities and executory
contracts assumed pursuant to the Purchase Agreement and shall be governed
entirely in accordance with the terms and conditions of the Purchase Agreement.
6. This Assignment and Assumption Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, Buyer and Seller have caused this Assignment and
Assumption Agreement to be executed and delivered on the date and year first
written above.
STAR SHOPPE DIRECT, INC.
By:_____________________________
Name:
Its:
ML DIRECT, INC.
By:_____________________________
Name:
Its:
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<PAGE>
ASSIGNMENT OF TRADEMARK
WHEREAS, ML Direct, Inc., a Delaware corporation, of c/o The Columbus
Circle, 211 East 49th Street, New York, New York 10017, has adopted, used,
and is using a mark which is registered in the United States Patent and
Trademark Office, trademark name "Scent Signs", Serial No. 75-249692, filing
date February 28, 1997; and
WHEREAS, Star Shoppe Direct, Inc., a Florida corporation, of 3001
Executive Drive, Suite 120, Clearwater, Florida 34622, is desirous of
acquiring said mark and the registration thereof;
NOW THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, said ML Direct, Inc. does hereby assign unto the said
Star Shoppe Direct, Inc. all of its right, title and interest to the said
mark, together with the goodwill symbolized by the mark, and the above
identified registration thereof.
Nothing herein shall expand the representations and warranties in the
Asset Purchase Agreement dated the date hereof among ML Direct, Inc., Star
Shoppe Direct, Inc., and Benedict V. White and no other representations or
warranties, express or implied, are made by ML Direct, Inc. hereby.
ML DIRECT, INC.
By: _____________________________
Name:
Title:
State of New York )
) ss.
County of New York )
On this _____ day of October, 1997, before me, a notary public,
personally appeared ___________________________, to me known, who being by me
duly sworn, did depose and say that he/she is the _________________ of ML
Direct, Inc., the corporation named in and which executed the foregoing, that
he/she is duly authorized to execute the same, and that he/she subscribed,
sworn to and acknowledged the same in his/her capacity as such officer and as
the authorized and binding act and deed of said corporation.
_________________________________
Notary Public
<PAGE>
ASSIGNMENT OF TRADEMARK
WHEREAS, ML Direct, Inc., a Delaware corporation, of c/o The Columbus
Circle, 211 East 49th Street, New York, New York 10017, has adopted, used,
and is using a mark which is registered in the United States Patent and
Trademark Office, trademark name "Optimum Maid", Serial No. 75-224024, filing
date January 10, 1997; and
WHEREAS, Star Shoppe Direct, Inc., a Florida corporation, of 3001
Executive Drive, Suite 120, Clearwater, Florida 34622, is desirous of
acquiring said mark and the registration thereof;
NOW THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, said ML Direct, Inc. does hereby assign unto the said
Star Shoppe Direct, Inc. all of its right, title and interest to the said
mark, together with the goodwill symbolized by the mark, and the above
identified registration thereof.
Nothing herein shall expand the representations and warranties in the
Asset Purchase Agreement dated the date hereof among ML Direct, Inc., Star
Shoppe Direct, Inc. and Benedict V. White and no other representations or
warranties, express or implied, are made by ML Direct, Inc. hereby.
ML DIRECT, INC.
By: _____________________________
Name:
Title:
State of New York )
) ss.
County of New York )
On this _____ day of October, 1997, before me, a notary public,
personally appeared ___________________________, to me known, who being by me
duly sworn, did depose and say that he/she is the _________________ of ML
Direct, Inc., the corporation named in and which executed the foregoing, that
he/she is duly authorized to execute the same, and that he/she subscribed,
sworn to and acknowledged the same in his/her capacity as such officer and as
the authorized and binding act and deed of said corporation.
_________________________________
Notary Public
<PAGE>
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE
This SEPARATION AGREEMENT AND RELEASE (the "Agreement") is entered into
by Benedict V. White (the "Employee"), and ML Direct, Inc., a Delaware
company, (the "Company"). The Company, and all companies affiliated with,
and subsidiaries of, the Company, are collectively referred to herein as
"Affiliates".
WHEREAS, the Company and Employee mutually desire to terminate the
Employment Agreement dated April 15, 1996; and
WHEREAS, the Company and Employee terminated the employment relationship
effective September 12, 1997, (the "Separation Date"); and
WHEREAS, the Company and the Employee wish to resolve all matters
relating to the Employee's separation from service;
NOW, THEREFORE, in exchange for mutual consideration, and intending to be
legally bound, the parties hereby agree as follows:
1. Waiver. The Employee hereby waives any and all claims which the Employee
might have against the Company and/or Affiliates for salary payments,
vacation pay, incentives, bonuses, expense reimbursement, severance pay or
benefits, or other remuneration or employee benefits of any kind; except (i)
for accrued and unpaid salary pursuant to Section 3(a) of the Employment
Agreement up to September 12, 1997, receipt of which is hereby acknowledged
by Employee, (ii) stock options to purchase up to 200,000 shares of the
Company's common stock pursuant to Section 3(b) of the Employment Agreement,
receipt of a duly executed stock option agreement acceptable to Employee is
hereby acknowledged, and (iii) to the extent that the Employee and any
eligible dependents have healthcare coverage under Company-maintained benefit
plans in force on the Separation Date, the right of the Employee and any
covered dependents to purchase health benefit continuation coverage under the
federal law commonly known as COBRA.
2. No Disparagement; Representations. Except as may be required by law, the
parties shall not disclose the fact that the Employee and the Company entered
into this Agreement, or any of the terms and conditions of said Agreement.
No person officially charged with, and acting pursuant to, the authority to
speak to the media or the public on behalf of the Company shall at any time
make any voluntary statement, or make any untrue statement while under any
compulsory legal process, which is calculated to, or which foreseeably will,
damage the reputation of the Employee. The Employee shall not at any time
make any voluntary statement of any kind, or make any untrue statement while
under any compulsory legal process, which is calculated to, or which
foreseeably will, damage the business or reputation of the Company, and/or
Affiliates, or its directors, officers, employees, agents, consultants or
advisors. Employee represents and warrants that to his actual knowledge and
except to the Company's actual knowledge, the Company is not a party to nor
threatened with any litigation or judicial, administrative or arbitration
proceeding, arising out of the
<PAGE>
operations of the Business, as "Business" is defined in the Asset Purchase
Agreement between the Company, Star Shoppe Direct, Inc., and Employee dated
the date hereof, which if decided adversely to the Company would have a
material adverse effect on the Company.
3. Termination of Employment Agreement. Except as otherwise specifically
provided herein, the parties mutually agree that Employment Agreement
terminated on, and none of the provisions of the Employment Agreement will
have any force or effect as of, the Separation Date.
4. Reciprocal Releases.
a. Except for claims arising under this Agreement and/or the Asset
Purchase Agreement (and the agreements and instruments executed in connection
therewith), the Employee, as his free and voluntary act, hereby releases and
discharges the Company and Affiliates and their successors and assigns, and
the active and former directors, officers, employees, agents, consultants and
advisors of each of them, of and from any and all obligations, claims,
demands, judgments, or causes of action of any kind whatsoever, known or
unknown, in tort, contract, by statute or on any basis, for equitable relief,
compensatory, punitive or other damages, expenses (including attorney' fees),
reimbursements of costs of any kind, including but not limited to, any and
all claims, demands, rights and/or causes of action, including those which
might arise out of allegations relating to a claimed breach of an alleged
oral or written employment contract, or relating to purported employment
discrimination or civil rights violations, which the Employee might have or
assert against any of said entities or persons by reason of any matter, cause
or thing whatsoever known or unknown to Employee, and which occurred or did
not occur prior to the time of execution of this Agreement.
b. Except for claims arising under this Agreement and/or the Asset
Purchase Agreement (and the agreements and instruments executed in connection
therewith), the Company, on behalf of itself and its officers, directors,
employees and agents (in their capacities as such), hereby releases and
discharges the Employee, and his heirs and assigns, of and from any and all
obligations, claims, demands, judgments or causes of action of any kind
whatsoever, known or unknown in tort, contract, by statute or on any other
basis, for equitable relief, compensatory, punitive, or other damages,
expenses (including attorney's fees), reimbursements or costs of any kind,
including but not limited to, any and all claims, demands, rights and/or
causes of action, including breach of fiduciary duty, breach of the duty of
confidentiality, tortuous interference with contract or prospective economic
advantage, defamation, libel, civil conspiracy, false light invasion of
privacy, actions which might arise out of allegations relating to a claimed
breach of an alleged oral or written employment contract, or relating to
purported employment discrimination or civil rights violations, which the
Company or its officers, directors, employees or agents, might have or assert
against the Employee by reason of any event which is known or unknown to the
Company, and which occurred or did not occur prior to the time of execution
of this Agreement.
2
<PAGE>
5. No Litigation
a. Except with respect to either: (1) a claim that the Company is in
violation of a provision of this Agreement, or (2) a claim alleging an
offending act or omission which occurs after the date of this Agreement, the
Employee promises not to initiate a lawsuit or to bring a claim against the
Company and/or its Affiliates, or their successors or assigns, or the
directors, officers, employees, agents, consultants or advisors or of any of
them, in any court, government agency, or otherwise, relating to the
Employee's employment or any other matters, including, but not limited to,
any claim under any federal, state or local statute, ordinance, or rule of
law. Except with respect to an alleged offending act or omission as
described in clause "(2)" of this paragraph, the Employee agrees not to
request, or to directly or indirectly cause, any governmental agency or other
person to commence any investigation or bring any action against any company
or person named in the previous sentence, and, except as provided in the
first phrase of this sentence, the Employee waives any remedy or recovery in
any action which may be brought on the Employee's behalf by any government
agency or other person.
b. Except with respect to either: (1) a claim that the Employee is in
violation of a provision of this Agreement, or (2) a claim alleging an
offending act or omission which occurs after the date of this Agreement, the
Company, on behalf of itself and its officers, promises not to initiate a
lawsuit or to bring a claim against the Employee, his heirs or assigns, in
any court, government agency, or otherwise, relating to the Employee's
employment or any other matters, including, but not limited to, any claim
under any federal, state or local statute, ordinance, or rule of law. Except
with respect to an alleged offending act or omission as described in clause
"(2)" of this paragraph, the Company, on behalf of itself and its officers,
agrees not to request, or to directly or indirectly cause, any governmental
agency or other person to commence any investigation or bring any action
against the Employee, and except as provided in the first phrase of this
sentence, the Company, on behalf of itself and its officers, waives any
remedy or recovery in any action which may be brought on the Company's behalf
by any government agency or other person.
6. Cooperation and Indemnification in the Event of Third-Party Litigation.
a. In the event that any third-party (including, without limitation,
any private party or governmental entity) asserts a claim or legal cause of
action, initiates a governmental review, or initiates a legal proceeding
(civil or criminal), with respect to any event or matters with which the
Employee was formerly involved as an employee of the Company, the Company
shall indemnify the Employee to the same extent, and subject to the same
terms, conditions and limitations, as would be applicable under the
certificate of incorporation or by-laws of the Company or applicable laws to
an individual who is a present or former employee or representative of the
Company or as covered by any directors and officers insurance in effect
during Employee's employment; provided, however, that no indemnification
shall apply with respect to legal costs, other costs or damages relating to
conduct of the Employee which was outside the scope of his duties as an
employee of the Company
3
<PAGE>
or was in violation of law or Company policy. At the outset of any
litigation involving the Employee, the Company, to the extent practicable,
shall advise the Employee in writing whether it then has reason to believe
the Employee acted unlawfully or outside the scope of his duties of the
Company, and if so, the factual and legal basis for its belief; provided that
such notification shall be for information purposes only and shall not be
actionable on the part of the Employee. In consideration for such
indemnification, the Employee agrees to make himself available and to
cooperate in the defense and in the preparation of the legal response to any
such matter.
b. Subject to the scope of the indemnification of paragraph "a", in the
event of a civil action commenced by a private party or government agency
proceeding which implicates the Employee in connection with his conduct
during his period of service with the Company, the Company reserves the
discretion to retain counsel to jointly represent the Company and the
Employee and the Company shall control the action or proceeding, unless and
until such counsel determines that the interests of the Company and the
Employee pose a conflict of interest for such counsel under the applicable
code of professional conduct. In the event that separate counsel is retained
for the Employee, the Company will reimburse the reasonable attorney's fees
of counsel of the Employee's choice reasonably acceptable to the Company, and
such reimbursement will be paid as services are rendered, subject to a right
of the Company to recover the amount of such payments from the Employee in
the event, and to the extent, that a court or agency finds that the relevant
actions of the Employee were unlawful or outside the scope of his duties or
are otherwise not subject to indemnification as provided in Section 6a herein.
7. Terms are Severable. Should any provision of this Agreement be declared
or be determined by any court of competent jurisdiction to be illegal or
invalid, the validity of the remaining parts, terms or provisions shall not
be affected thereby, and said illegal or invalid part, term or provision,
unless otherwise provided herein, shall be deemed not to be a part of this
Agreement.
8. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
9. Entire Agreement. This Agreement sets forth the entire understanding of
the Company and the Employee and supersedes all prior agreements,
arrangements, and communications, whether oral or written, pertaining to the
subject matter hereof. This Agreement shall not be modified or amended
except by written agreement of the Employee and the Company.
[Signatures on following page]
4
<PAGE>
THE UNDERSIGNED, intending to be legally bound, have executed this
Confidential Separation Agreement and Release as of this __ day of
_______________, 1997.
THE COMPANY THE EMPLOYEE
By:___________________________ By:___________________________
Title
5
