LOAN ASSIGNMENT AGREEMENT
Exhibit 10.1
THIS LOAN
ASSIGNMENT AGREEMENT (the “Agreement”) is executed and
delivered this 29th day of
December, 2010 (the “Closing
Date”), by and between Sibling Entertainment Group Holdings, Inc.,
a Texas corporation (“SIBE”), Sibling Theatricals,
Inc., a _____ corporation (“Borrower”), and SIBE Debt
Resolution, LLC, a ___________ limited liability company (the “Company”).
Background
The
Company was organized on December __, 2010, for the sole purpose of holding a
loan and security agreement (the “Loan Documents”) evidencing a
loan made by SIBE to Borrower in the original principal amount of $2,555,000
(the “Loan”) which,
pursuant to this Agreement, SIBE is assigning to the Company. The
Loan was made using the proceeds received by SIBE from the sale of $2,555,000 in
principal amount of SIBE’s 13% Series AA Secured Convertible Debentures (the
“Debentures”). SIBE
intends to transfer all of its ownership interest in the Company to the holders
of the Debentures in furtherance of a proposed settlement of the obligations of
SIBE due to the holders of Debentures.
Agreement
For and
inconsideration of the premises and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the parties
agree:
Section
1. Assignment of Loan
Documents
Section
1.1 Transfer and
Assignment. SIBE
hereby transfers, assigns, conveys, and delivers to the Company the Loan, any
and all security interests in the assets of Borrower in favor of the Company,
the Loan Documents and all rights of SIBE thereunder, all WITHOUT RECOURSE
(collectively, the “Assigned
Assets”). The Assigned Assets constitute substantially all of
the assets of SIBE. SIBE hereby directs Borrower to make all payments
in respect of the Loan to the Company and not to SIBE. SIBE agrees
that in the event payments in respect of the Loan are received by SIBE such
payments will be turned over to the Company in the form in which they were
received by SIBE.
Section
1.2 Consent to Transfer
and Assignment. Borrower
hereby acknowledges and reaffirms its obligations under the Loan Documents,
confirms that its assets are subject to a first priority security interest
created by the Loan Documents, and irrevocably consents to the assignment and
transfer of the Loan, the Loan Documents, and the security interest in the
assets of Borrower to the Company. Borrower irrevocably waives and
relinquishes any and all defenses to the enforcement of the Loan, the Loan
Documents, the perfection, transfer, and foreclosure of the security interest
created by the Loan Documents, and payment of the indebtedness evidenced the
Loan Documents.
Section
1.3 Assumption of Certain
Liabilities. At the
Closing, the Company shall assume, perform, discharge, and become obligated for,
commencing and effective from and after the Closing Date, (a) the
obligations and liabilities of SIBE arising under the Loan Documents and the
Debentures, and (b) the liabilities of SIBE listed on Section 1.2 of the
Disclosure Letter delivered to the Company at Closing (the “Assumed
Liabilities”).
Section
1.4 Issuance of
Shares. For and
in consideration of the transfer of the Assigned Assets, the Company hereby
issues and delivers to SIBE a certificate registered in the name of SIBE
evidencing 1,000,000 shares of limited liability company membership interests of
the Company (the “Shares”).
Section
2. The
Closing
Section
2.1 Closing.
The
closing of the contribution to the Company of the Assigned Assets and the
assumption of the Assumed Liabilities (the “Closing”) was held at 10:00
o’clock a.m. eastern time on the Closing Date at the offices of
SIBE.
Section
2.2 Deliveries at the
Closing. At the
Closing:
(a) The
Company delivered the Shares to SIBE against delivery of the Assigned
Assets.
(b) At
the Closing, SIBE delivered the Loan Documents duly endorsed for transfer to the
Company and such other bills of sale and assignments, as the Company requested,
effectively vesting in the Company good and valid title to the Assigned
Assets.
Section
3. Representations and
Warranties of SIBE.
Section
3.1 Organization and
Qualification. SIBE is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Texas and has all corporate power and authority to conduct
its business, to own, lease, or operate its properties in the places where its
business is conducted and such properties are owned, leased, or
operated.
Section
3.2 Authority.
SIBE has
the full power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and
performance of this Agreement by SIBE has been duly and validly authorized and
approved by all necessary action on the part of SIBE, and this Agreement is the
legal, valid, and binding obligation of SIBE, enforceable against SIBE in
accordance with its terms, except as enforceability may be limited by applicable
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors’ rights generally, and to the exercise of
judicial discretion in accordance with general equitable
principles.
Section
3.3 Consents and
Approvals. Except
for the consent of Borrower set forth herein, no authorization, consent,
approval, designation or declaration by, or filing with, any public body,
governmental authority, bureau, or agency is necessary or required as a
condition to the validity of this Agreement and the consummation of the
transactions contemplated hereby.
Section
3.4 Assigned Assets.
Except
for the security interest in favor of the holders of the Debentures, SIBE has
good and marketable title to all of the Assigned Assets, free and clear of all
liens, claims, charges, security interests, and other encumbrances of any kind
or of any nature.
Section
3.5 Litigation.
Except as
set forth in Section 3.5 of the Disclosure Letter, there are no formal or
informal complaints, investigations, claims, charges, arbitration, grievances,
actions, suits, or proceedings pending, or to the knowledge of SIBE threatened
against, or affecting SIBE, or any of the Assigned Assets at law or in equity or
admiralty, or before or by any federal, state, municipal, or other governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign. SIBE is not subject to any order, writ, injunction, or decree of
any federal, state, municipal court, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
affecting the Assigned Assets or SIBE.
Section
3.6 Brokers and
Finders. SIBE has
not incurred any obligation or liability to any party for any brokerage fees,
agent’s commissions, or finder’s fees in connection with the transactions
contemplated hereby.
Section
3.7 Correctness of
Representations. To the
best of its knowledge, no representation or warranty of SIBE in this Agreement
or in any exhibit or Disclosure Letter attached hereto or furnished to the
Company hereunder contains any untrue statement of fact, or omits to state any
fact necessary in order to make the statements contained therein not
misleading. True copies of all mortgages, indentures, notes, leases,
agreements, plans, contracts, and other instruments listed on or referred to in
the Disclosure Letter delivered or furnished to the Company pursuant to this
Agreement have been delivered to the Company.
Section
4. Representations and
Warranties of the Company.
Section
4.1 Organization and
Qualification. The
Company is a limited liability company duly organized, validly existing, and in
good standing under the laws of the State of _________ and has all limited
liability company power and authority to conduct its business, to own, lease, or
operate its properties in the places where such business is conducted and such
properties are owned, leased, or operated.
Section
4.2 Authority.
The
Company has full power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement by the Company has been duly and
validly authorized and approved by all necessary action on the part of the
Company, and this Agreement is the legal, valid, and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors’ rights generally, and by the exercise of judicial discretion in
accordance with equitable principles. Neither the execution and
delivery of this Agreement by the Company nor the consummation by the Company of
the transactions contemplated hereby will: (a) violate the Company’s
Operating Agreement, (b) violate any provisions of law or any order of any
court or any governmental unit to which the Company is subject, or by which its
Assigned Assets are bound, or (c) conflict with, result in a breach of, or
constitute a default under any indenture, mortgage, lease, agreement, or other
instrument to which the Company is a party or by which it or its assets or
properties are bound.
Section
4.3 Capitalization.
Immediately
prior to the Closing Date, no limited liability company membership interest was
outstanding. Other than as contemplated by this Agreement, there is
no subscription right, option, warrant, convertible security, or other right
(contingent or other) presently outstanding, for the purchase, acquisition, or
sale of any securities of the Company. At Closing there will be no
agreements purporting to restrict the transfer of the Company’s limited
liability company membership interests, no voting agreements, voting trusts, or
other arrangements restricting or affecting the voting of the limited liability
company membership interests, and none of the limited liability company
membership interest are currently pledged or held as security by any person or
entity.
Section
4.4 No Assets or
Liabilities. Immediately
prior to Closing, the Company had no assets, liabilities, or business
operations. By virtue of this Agreement, at Closing the Company will
hold the Loan and the Loan Documents.
Section
4.5 Litigation.
There is
no suit, action, proceeding, claim, or investigation pending, or, to the
Company’s knowledge, threatened, against the Company on the Assigned Assets,
business, goodwill, or financial condition of the Company or which would prevent
the Company from consummating the transactions contemplated by this
Agreement.
Section
4.6 Brokers and
Finders. Neither
the Company nor any affiliate of the Company has incurred any obligation or
liability to any party for any brokerage fees, agent’s commissions, or finder’s
fees in connection with the transactions contemplated by this
Agreement.
Section
4.7 Governmental Approval
and Consents. No
consent, approval, or authorization of or declaration, filing, or registration
with any governmental or regulatory authority is required in connection with the
execution, delivery, and performance of this Agreement or the consummation of
the transactions contemplated hereby.
Section
4.8 Correctness of
Representations. No
representation or warranty of the Company in this Agreement or in any exhibit,
certificate, or schedule attached hereto or furnished pursuant hereto contains,
or on the Closing Date will contain, any untrue statement of fact or omits or,
on the Closing Date, will omit, to state any fact necessary in order to make the
statements contained herein or therein not misleading, and all such statements,
representations, warranties, exhibits, and certificates shall be true and
complete on and as of the Closing Date as though made on that date.
Section
5. Representations and
Warranties of Borrower.
Section
5.1 Organization and
Qualification. Borrower
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of __________ and has all corporate power and authority to
conduct its business, to own, lease, or operate its properties in the places
where its business is conducted and such properties are owned, leased, or
operated.
Section
5.2 Authority.
Borrower
has the full power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement by Borrower has been duly and validly authorized
and approved by all necessary action on the part of Borrower, and this Agreement
is the legal, valid, and binding obligation of Borrower, enforceable against
Borrower in accordance with its terms, except as enforceability may be limited
by applicable equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors’ rights generally, and to the
exercise of judicial discretion in accordance with general equitable
principles.
Section
6. Indemnification
For the
purposes of this Section 6, “Losses” shall mean any and
all demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs, and expenses, including, without limitation, interest,
penalties, reasonable attorneys' and other professional fees and
expenses.
Section
6.1 Agreement of the
Company to Indemnify SIBE.
Subject
to the terms and conditions of this Section 6, Borrower and the Company shall
indemnify, defend, and hold harmless SIBE, against, from, and in respect of any
and all Losses asserted against, relating to, imposed upon, or incurred by SIBE
by reason of, resulting from, based upon, or arising out of the Loan, the Loan
Documents, and the offer, sale, and issuance of the Debentures.
Section
7. General
Provisions
Section
7.1 Notice. All
notices, requests, demands, and other communications hereunder shall be in
writing and shall be delivered by hand or mailed by first class registered or
certified mail, return receipt requested, first class postage prepaid, or by
simultaneous telefax, as follows:
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(a)
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If
to the Company:
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SIBE
Debt Resolution, LLC
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Attention:
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(b)
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If
to SIBE:
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000
Xxxxxx Xxxxxx
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Xxxxx
000
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Xxx
Xxxx, XX 00000
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Attention: Chief
Executive Officer
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(c)
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If
to Borrower:
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Sibling
Theatricals, Inc.
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Attention: _____________
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Telephone:
(___) ___-____
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Facsimile: (___)
___-____
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Any party
may change the address to which notices are to be sent to it by giving written
notice of such change of address to the other parties in the manner above
provided for giving notice. If delivered personally, the date on which a
notice, request, instruction or document is delivered shall be the date on which
such delivery is made, and if delivered by mail, the date on which such notice,
request, instruction, or document is received shall be the date of
delivery.
Section
7.2 Assignment; Binding
Effect. This
Agreement shall be binding upon the parties hereto and their respective
successors, permitted assigns and permitted transferees. SIBE may not
assign its rights or delegate its obligations hereunder without the Company’s
consent, which shall not be unreasonably withheld.
Section
7.3 Headings. The
Section, subsection, and other headings in this Agreement are inserted solely as
a matter of convenience and for reference, and are not a part of this
Agreement.
Section
7.4 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
counterpart has been signed by each party and delivered to the other party
hereto.
Section
7.5 Governing
Law. This
Agreement and the rights of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflicts of laws rules. The parties agree that any
appropriate state court or Federal court sitting in Xxxxxx County, Georgia
(collectively, the “Permitted
Courts”), shall have exclusive jurisdiction of any case or controversy
arising under or in connection with this Agreement and shall be a proper forum
in which to adjudicate such case or controversy, and each Party irrevocably:
(a) consents to the jurisdiction of the Permitted Courts in such actions,
(b) agrees not to plead or claim that such litigation brought in the
Permitted Courts has been brought in an inconvenient forum, and (c) waives
the right to object, with respect to such suit, action, or proceeding, that such
court does not have jurisdiction over such party. In any suit,
arbitration, mediation, or other proceeding to enforce any right or remedy under
this Agreement or to interpret any provision of this Agreement, the prevailing
party will be entitled to recover its costs, including reasonable attorneys’
fees, and all costs and fees incurred on appeal or in a bankruptcy or similar
action.
Section
7.6 Partial
Invalidity. Wherever
possible, each provision hereof shall be interpreted in such manner as to be
effective and valid under applicable law, but in case any one or more of the
provisions contained herein shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal, or unenforceable
provision or provisions had never been contained herein unless the deletion of
such provision or provisions would result in such a material change as to cause
completion of the transactions contemplated hereby to be
unreasonable.
Section
7.7 Survival.
The
covenants, representations, warranties, and agreements contained herein shall
survive the Closing of the transactions contemplated herein, for the length of
time that the Company or SIBE, as the case may be, may assert an indemnification
for a breach or violation of such covenant, representation, warranty, or
agreement pursuant to Section hereof.
IN
WITNESS WHEREOF, SIBE and the Company have caused this Agreement to be executed
and delivered as of the date first above written.
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By:
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/s/ Xxxxxxxx Xxxxxxx | |
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Xxxxxxxx
Xxxxxxx, Chief Executive Officer
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Sibling
Theatricals, Inc.
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By:
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/s/ Xxxxxxxx Xxxxxxx | |
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Xxxxxxxx
Xxxxxxx, Chief Executive Officer
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SIBE
Debt Resolution, LLC
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By:
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/s/ Xxxxxxxx Xxxxxxx | |
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Name:
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Xxxxxxxx Xxxxxxx | |
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Title:
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Managing Partner | |
