EXHIBIT 10.5
AMENDED AND RESTATED
ASSIGNMENT AND PURCHASE AGREEMENT
This Amended and Restated Assignment and Purchase Agreement
("Agreement") is made and entered into as of August 2, 2005, by and among Xxxxx
Xxxxx and Xxxxxxx Xxxxxxxxx (each a "Seller" and collectively the "Sellers"),
USN Corporation, a Colorado corporation ("USN") and LGS Holdings, Inc. (a
California corporation.) ("LGS"). This Agreement hereby amends and restates in
its entirety that certain Assignment and Purchase Agreement (the "Original
Agreement") dated as of June 17, 2005, by and among the Sellers and USN.
RECITALS
1. Sellers are the only members of Spotlight, LLC, a California limited
liability company (the "Company") which filed its Articles of Organization with
the office of the California Secretary of State on August 5, 2002 ("Articles of
Organization").
2. Each Seller currently owns a fifty percent (50%) Membership Interest
(as that term is defined in the Operating Agreement) in the Company
(collectively, the "Membership Interests").
3. The Company has heretofore conducted the business of purchasing
product for the operations of USN Television Group. The Company has not, prior
to the date hereof, made any distributions or payments of profit, earnings or
salary to the Members.
4. Sellers and USN previously entered into the Original Agreement
providing for the sale of the Membership Interests to USN.
5. Sellers intended to sell their Membership Interests to LGS (the
"Transaction") and not to USN and the Original Agreement did not accurately
reflect the terms of the Transaction, therefore Sellers, USN and LGS desire to
amend and restate the Original Agreement in its entirety to accurately reflect
the terms of the Transaction.
For and in consideration of the covenants, promises and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. SALE AND PURCHASE OF MEMBERSHIP INTERESTS
Subject to the terms and conditions in this Agreement, each Seller
hereby sells, assigns, transfers, conveys and delivers to LGS, and LGS hereby
purchases, each such Seller's Membership Interest.
2. SELLERS' REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITY
Each Seller represents, warrants and covenants to LGS as follows:
A. Each such Seller is the owner of his Membership Interest, free and
clear from any liens or encumbrances whatsoever, except those restrictions on
transfer which are set forth in the Operating Agreement, all of which are hereby
waived by each such Seller.
B. Each such Seller has the full power and authority to execute,
deliver and perform his obligations under this Agreement.
C. To each such Seller's actual knowledge, there are no lawsuits,
threats of litigation, claims, or other demands affecting or involving such
Seller's Membership Interest arising or accruing before the date of this
Agreement.
D. Each such Seller agrees to cooperate with LGS, and on LGS's
reasonable request without additional compensation, to execute all documents and
take all actions as necessary to perfect and implement LGS's full ownership of
each such Seller's Membership Interest.
E. Each such Seller shall, on a several and not joint and several
basis, indemnify, hold harmless and defend LGS, its directors, officers,
attorneys, successors, assigns, partners, members, agents, representatives,
employees and lenders, against and in respect of damages, costs, expenses,
reasonable fees of attorneys and consultants, claims, losses, liens, encumbrance
and other liabilities arising from any breach of such Seller's representations,
warranties or covenants in this Agreement. Notwithstanding anything to the
contrary contained herein, the indemnity and covenants contained in this
Paragraph shall survive the execution and delivery of this Agreement.
3. LGS'S REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITY
A. LGS represents and warrants to the Sellers: (i) that it has full
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder, (ii) that the EXECUTION and delivery of this Agreement by
LGS has been authorized by all necessary corporate action on behalf of LGS,
(iii) that this Agreement has been duly executed and delivered by LGS, (iv) that
this Agreement is a valid and binding agreement of LGS, enforceable against it
in accordance with its terms, and (v) LGS has (a) received copies of the
Articles of Organization and Operating Agreement, and (b) reviewed, inspected
and approved the assets and liabilities of the Company presented by Seller to
LGS.
B. LGS shall indemnify, hold harmless and defend each of the Sellers
(with counsel selected and paid for solely by LGS), its directors, officers,
attorneys, successors, assigns, partners, members, agents, representatives,
employees and lenders, against and in respect of any and all damages, costs,
expenses, reasonable fees of attorneys and consultants, claims, losses, liens,
encumbrance and other liabilities arising from any (i) breach of LGS's
representations, warranties or covenants IN this Agreement that survive the
Closing and (ii) failure of LGS to cause the Company to pay, satisfy, discharge
or otherwise resolve any liabilities of the Company listed on Exhibit "A"
attached hereto. Notwithstanding anything to the contrary contained herein, the
indemnity and covenants contained in this Paragraph shall survive the execution
and delivery of this Agreement.
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4. NATURE OF MEMBERSHIP INTERESTS
A. Other than as set forth herein, no person acting on behalf of any
Seller is authorized to make, and by execution hereof, LGS acknowledges that no
person has made, any representation, agreement, statement, warranty, guarantee
or promise regarding the Membership Interests except as may be expressly set
forth in this Agreement. No representation, warranty, agreement, statement,
guarantee or promise, if any, made by any person acting on behalf of any Seller
which is not contained in this Agreement will be valid or binding on any Seller.
B. LGS ACKNOWLEDGES AND AGREES THAT EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, THE SELLERS HAVE NOT MADE, DO NOT MAKE AND SPECIFICALLY NEGATE
AND DISCLAIM ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR
GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL
OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO
(I) VALUE OF THE MEMBERSHIP INTERESTS; (II) THE INCOME TO BE DERIVED FROM THE
COMPANY OR ANY EQUITY INTEREST THEREIN.
LGS ACKNOWLEDGES THAT (i) THIS SECTION 5.B HAS BEEN READ AND FULLY
UNDERSTOOD, (ii) LGS HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT
ITS MEANING AND SIGNIFICANCE, AND (iii) LGS HAS ACCEPTED AND AGREED TO THE TERMS
SET FORTH IN THIS SECTION 4.B.
5. TREATMENT OF ASSETS AND LIABILITIES
LGS hereby agrees and acknowledges that all of the assets and
liabilities of the Company will, by operation of the transfer of the Membership
Interests to LGS, be indirectly the assets and liabilities of LGS through the
Company as its wholly owned subsidiary.
6. GENERAL PROVISIONS
6.1 EXPENSES. All fees, costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fees, costs or expenses.
6.2 ARBITRATION. Any controversy, claim or dispute arising out of or in
any way relating to this Agreement or the alleged breach thereof, shall be
determined by final and binding arbitration administered by JAMS in Los Angeles,
California in accordance with the JAMS Arbitration Rules and Procedures (the
"RULES") which are in effect at the time of the arbitration or the demand
therefore. In the event of such an arbitration proceeding, the parties shall
select a mutually acceptable neutral arbitrator from among the JAMS panel of
arbitrators. In the event the parties cannot agree on an arbitrator, the
Administrator of JAMS shall appoint an arbitrator. California Code of Civil
Procedure ss. 1283.05, which provides for certain discovery rights, shall apply
to any such arbitration, and said code section is also hereby incorporated by
reference. In reaching a decision, the arbitrator shall have no authority to
change, extend, modify or suspend any of the terms of this Agreement. The
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arbitration shall be commenced and heard in Los Angeles, California. The
arbitrator(s) shall apply the substantive law (and the law of remedies, if
applicable) of California or federal law, or both, as applicable to the claim(s)
asserted, and the arbitrator is without jurisdiction to apply any different
substantive law. The arbitrator shall render an award and a written, reasoned
opinion in support thereof, stating all findings of fact and conclusions of law.
Judgment on the award may be entered in any court of competent jurisdiction,
even if a party who received notice under the Rules fails to appear at the
arbitration hearing(s). The parties may seek, from a court of competent
jurisdiction, provisional remedies or injunctive relief in support of their
respective rights and remedies hereunder without waiving any right to
arbitration. However, the merits of any action that involves such provisional
remedies or injunctive relief shall be determined by arbitration under this
Section 6.2.
6.3 FURTHER ASSURANCES. If at any time after the closing of the
transactions contemplated hereby any further action is reasonably necessary or
desirable to carry out the purposes of this Agreement, then promptly upon the
request of the other party, Sellers or LGS, as the case may be, shall take such
action (including, but not limited to, the execution of additional documents and
instruments).
6.4 AMENDMENTS. No amendment to this Agreement shall be effective
unless it shall be in writing and signed by the parties hereto.
6.5 NOTICES. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or
sent, postage prepaid, by registered or certified mail, and shall be deemed
given when so delivered, as follows:
(i) IF TO LGS:
LGS
_______________________________
_______________________________
(ii) IF TO SELLERS:
_______________________________
_______________________________
_______________________________
6.6 INTERPRETATION: EXHIBITS AND SCHEDULES. The headings contained in
this Agreement and in any exhibit attached hereto are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
6.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
6.8 ENTIRE AGREEMENT. This Agreement, together with all exhibits and
schedules attached hereto, contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersede all prior oral and written agreements and understandings relating to
such subject matter.
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6.9 SEVERABILITY. If any provision of this Agreement or the application
of any such provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
6.10 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California applicable to
agreements made and to be performed entirely within such state, without regard
to the conflicts of law principles of such state.
6.11 CONSTRUCTION. Each party has had a full and complete opportunity
to review this Agreement, and make suggestions or changes and seek legal advice.
Accordingly, each party understands that this Agreement is deemed to have been
drafted jointly by the parties and agrees that the common-law principles of
construing ambiguities against the drafter shall have no application hereto. It
should be construed fairly and not in favor of or against one party as the
drafter hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SELLERS:
/S/ XXXXXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
/S/ XXXXX XXXXX
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Xxxxx Xxxxx
LGS HOLDINGS, INC.:
By: /S/ XXXXXX XXXXXXXX
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Xxxxxx Xxxxxxxx, President
USN CORPORATION
By: /S/ XXXXX XXXXXXXX
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