EXHIBIT 10.3
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of May 21, 1999 by and
among Initio, Inc., a Nevada corporation with its principal place of business at
2500 Arrowhead Drive, Carson City, NV ("Initio"), America's Shopping Mall, a
Nevada corporation with its principal place of business at 382 Route 59, #310,
Monsey, NY 10952 ("ASM") and Pioneer Ventures Associates Limited Partnership, a
Connecticut limited partnership with its principals place of business at 651 Day
Hill Road, Windsor, CT 06095 ("Pioneer"):
WHEREAS, Initio and Pioneer are parties to a Debenture Commitment
Agreement dated February 25, 1998 (the "Debenture Agreement") whereby Pioneer
made a loan in the principal amount of Three Million Dollars ($3,000,000) (the
"Loan") and Initio issued to Pioneer a Convertible Subordinated Debenture Due
May 1, 2003 in the principal amount of Three Million Dollars ($3,000,000)
evidencing Initio's obligation to repay the Loan and providing for other terms
and conditions (the "Initio Debenture"); and
WHEREAS, Initio has entered into an Asset Purchase Agreement dated
April 21, 1999 with ASM pursuant to which Initio has agreed to sell to ASM and
ASM has agreed to purchase from Initio certain assets of Initio specified
therein (the "Asset Purchase Agreement"); and
WHEREAS, ASM and Pioneer have entered into an Investment Agreement
dated May 21, 1999 pursuant to which Pioneer has agreed to invest $4,200,000
into ASM and ASM has agreed to issue to Pioneer 10,000 shares of ASM's Series A
Senior Convertible Preferred Stock (the "Series A Shares") and 1,000,000 common
stock purchase warrants (the "Investment Agreement"); and
WHEREAS, in connection with the transactions contemplated by the Asset
Purchase Agreement and the Investment Agreement, (i) Initio wishes to assign and
delegate to ASM, and ASM has agreed to assume, Initio's obligations with respect
to Two Million Dollars ($2,000,000) in principal amount of the Initio Debenture,
with Initio remaining obligated with respect to the remaining One Million
Dollars ($1,000,000) in principal amount of the Initio Debenture, (ii) the
parties wish to provide for the issuance of a substitute Initio Debenture in the
principal amount of $1,000,000 in the form attached hereto as Exhibit A (the
"Substitute Debenture") and the issuance of a debenture from ASM to Pioneer in
the principal amount of $2,000,000 evidencing ASM's obligations to Pioneer in
the form attached hereto as Exhibit B (the "ASM Debenture") and (iii) Pioneer
wishes to consent to such delegation and assumption and the issuance of the
Substitute Debenture and the ASM Debenture, all upon the terms and subject to
the conditions of this Agreement:
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises contained herein, and intending to be legally bound do hereby agree as
follows:
1. Partial Assignment of Initio Debenture and Delegation of
Obligations.
(a) Initio hereby assigns to ASM, and delegates to ASM, Initio's
obligations as to $2,000,000 in principal amount of the Initio Debenture,
together with all associated obligations under the Debenture Agreement and the
Loan (collectively, the "Initio Obligations").
(b) ASM hereby accepts the assignment and delegation by Initio to ASM
of the Initio Obligations and agrees to be bound by the terms of the Debenture
Agreement applicable to Initio to the fullest extent as if ASM had been an
initial party thereto.
(c) Pioneer hereby consents to the assignment and delegation by Initio
to ASM of the Initio Obligations, the surrender of the Initio Debenture and the
issuance of the Substitute Debenture and the ASM Debenture;
all pursuant to the terms, and subject to the conditions, contained in this
Agreement.
The assignments and assumptions under this Agreement shall be effective
as of May 1, 1999.
2. Debenture Agreement in Full Force and Effect.
Other than the reduction in the principal amount of the Initio
Debenture from $3,000,000 to $1,000,000 the Debenture Agreement shall remain in
full force and effect without modification of any kind. Any provisions of the
Debenture Agreement applicable to the Initio Debenture shall automatically,
without any further action of the parties, be applicable to the Substitute
Debenture.
3. Issuance of Substitute Debentures.
At the Closing hereunder, (i) Pioneer shall surrender the Initio
Debenture to Milberg Weiss Bershad Hynes & Lerach LLP, as Escrow Agent under the
Escrow Agreement among Initio, Pioneer and the Escrow Agent entered into in
connection with the Debenture Agreement, (ii) Initio shall issue and deliver to,
and for the benefit of, Pioneer the Substitute Debenture and ASM shall issue and
deliver to, and for the benefit of, Pioneer the ASM Debenture.
4. Representations and Warranties of Initio.
Initio hereby represents and warrants to and for the benefit of
Pioneer:
(a) all of the representations and warranties of Initio in the
Debenture Agreement remain true, accurate and complete as of the date hereof;
(b) (i) Initio has fully complied with the terms and conditions of the
Debenture and the Debenture Agreement applicable to Initio, (ii) the Principal
Shareholders of Initio have fully complied with the terms and conditions of the
Voting Agreement among the Principal Shareholders and Pioneer and (iii) there is
no event of default existing under the Initio Debenture, the Debenture Agreement
or the Voting Agreement, nor is there any state of events currently existing
that, with notice or the passage of time, or both would constitute such an event
of default; and
(c) there have been no conversions or redemptions under the Initio
Debenture, nor have any notices been given or received by Initio relating to any
such conversion or redemption.
5. Representations and Warranties of ASM.
ASM hereby represents and warrants to and for the benefit of Pioneer:
(a) all of the representations and warranties of ASM contained in the
Investment Agreement are true, accurate and complete; and
(b) there is no event of default existing under the Investment
Agreement, the certificate of designation for the Series A Shares, the Warrants,
the Voting Agreement among the Principal Shareholders of ASM and Pioneer dated
May 21, 1999, or any of the Acquisition Agreements (as defined in the Investment
Agreement) nor is there any state of events currently existing that, with notice
or the passage of time, or both would constitute such an event of default.
6. Expenses.
Initio and ASM jointly and severally agree to indemnify Pioneer from
any and all expenses resulting from the surrender and cancellation of the Initio
Debenture and the issuance of the Substitute Debenture and the ASM Debenture,
including without limitation any transfer taxes.
7. Binding Effect.
This Agreement shall be binding upon the successors and assigns of the
parties. The parties shall execute and deliver such further and additional
instruments, agreements, and other documents as may be necessary to evidence or
carry out the provisions of this Agreement.
8. Notices.
All notices or other documents under this Agreement shall be in writing
and delivered personally or mailed by certified mail, postage prepaid, addressed
to the parties at their respective addresses first above written.
9. Waiver; Modifications.
This Assignment and Assumption Agreement may only be modified in a
writing signed by the all parties hereto.
10. Headings.
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
11. Governing Law.
This agreement shall be governed by the laws of The State of New York
without effect to its conflicts of law provisions.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
INITIO, INC.
By:________________________
Name:
Title:
AMERICA'S SHOPPING MALL, INC.
By: /s/ [ILLEGIBLE]
--------------------------
Name:
Title:
PIONEER VENTURES ASSOCIATES LIMITED PARTNERSHIP
By: Pioneer Ventures Corp.
Managing Member of the
Partnership's General Partner,
Ventures Management Partners LLC
By: /s/ John F. Ferraro
--------------------------
John F. Ferraro
Director
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") made the 21st day of
May, 1999 by DEERSKIN TRADING POST, INC. ("Deerskin"), as Tenant, a Nevada
corporation having an office at 2500 Arrowhead Drive, Carson City, Nevada 89706
and AMERICA'S SHOPPING MALL, INC. ("Assignee") a Nevada corporation having an
office at 382 Rte. 59, #310, Monsey, New York 10952.
W I T N E S E T H:
WHEREAS, Deerskin is party to a lease agreement dated October 13, 1998
(the "Lease"), with Green Street Corner, Inc. ("Landlord"), a copy of which is
attached hereto as Exhibit A;
WHEREAS, Deerskin possesses all right, title and interest in and to the
Lease, as tenant, and desires to sell, assign, and transfer the Lease to
Assignee, and Assignee desires to accept such sale, assignment and transfer,
upon the terms and conditions hereinafter set forth; and
WHEREAS, so far as is known, Deerskin and the Landlord have no claims
or defenses against the other by reason of the Lease.
NOW THEREFORE, in consideration of the mutual promises contained
herein, and for $10 and other good and valuable consideration, the receipt of
which is acknowledged, the parties agree as follows:
1. Assignment. Deerskin hereby sells, assigns and transfers to Assignee
all of Deerskin's right, title and interest in and to the Lease. The foregoing
sale, assignment and transfer
is made without any recourse whatsoever to Deerskin and without any
representations or warranties, express or implied, of any nature whatsoever.
2. Acceptance and Indemnification. Assignee hereby accepts the
foregoing sale, assignment, and transfer and promises to pay all rent and
additional rent and to faithfully perform all other covenants, stipulations,
agreements, and obligations under the Lease accruing on and after the date
hereof, or otherwise attributable to the period commencing on said date and
continuing thereafter, and Deerskin shall be responsible for the period prior
thereto, subject to the provisions of the Asset Purchase Agreement between
Deerskin and Assignee, dated April 21, 1999. Assignee shall indemnify and save
Deerskin harmless from any and all claims, demands, actions, causes of action,
suits, proceedings, damages, liabilities and costs and expenses of every nature
whatsoever which relate to the Lease or the premises demised thereunder arising
on or after the date hereof.
3. Consent of Landlord. Deerskin agrees to use its best efforts to
obtain the Landlord's consent to the assignment of the Lease and the release of
Deerskin's obligations under the Lease. In the event Deerskin is unable to
obtain such consent, Deerskin shall use its best efforts to obtain for Assignee
the benefits of the Lease.
4. Assignee's Expenses. All taxes and other governmental charges and
fees, including, without limitations, any and all transfer taxes, stamp taxes,
sales taxes, and
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recording fees, relating to the transaction evidenced by this Agreement shall be
paid by Assignee.
5. Binding Effect. This Agreement shall be binding upon the successors
and assigns of the parties. The parties shall execute and deliver such further
and additional instruments, agreements, and other documents as may be necessary
to evidence or carry out the provisions of this Agreement.
6. Entire Agreement. This Agreement supersedes all agreements
previously made between the parties relating to its subject matter.
7. Notices. All notices or other documents under this Agreement shall
be in writing and delivered personally or mailed by certified mail, postage
prepaid, addressed to the parties at their respective addresses first above
written.
8. Non-waiver. No delay or failure by either party to exercise any
right under this Agreement, and no partial or single exercise of that right,
shall constitute a waiver of that or any other right, unless otherwise expressly
provided herein.
9. Headings. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
10. Governing Law. This Agreement shall be construed
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in accordance with and governed by the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
AMERICA'S SHOPPING MALL, INC.
By /s/ [ILLEGIBLE]
--------------------------------
(Title)
DEERSKIN TRADING POST INC.
By /s/ Martin Fox
--------------------------------
Martin Fox, Chairman
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