EXHIBIT 10.5
CONTRIBUTION AGREEMENT
This contribution agreement (the "AGREEMENT"), is made as of April 1,
2004, by and between Splinex LLC, a Florida limited liability company (the
"PARENT"), and Splinex Technology Inc., a Delaware corporation (the "OPERATING
COMPANY").
WHEREAS, the Parent currently owns various assets including, without
limitation, certain intellectual property (the "IP"), and has incurred various
liabilities, in connection with its business (the "BUSINESS") of exploiting the
IP and developing, marketing and selling computer software products for
commercial and residential use in connection therewith;
WHEREAS, the Parent has been in the development phase of the Business
and currently desires to restructure the operations of the Business to prepare
for certain aspects of the operational phase of the Business, including, without
limitation, facilitating entering into a stock option plan for current and
future employers;
WHERAS, the Parent desires to transfer all of its assets and
liabilities to the Operating Company in consideration for the issuance of all of
the issued and outstanding stock of the Operating Company in a transaction that
qualifies as a tax-free incorporation pursuant to Section 351(a) of the Internal
Revenue Code (the "CODE"); and
WHEREAS, the Parent currently intends to maintain "control" of the
Operating Company, as such term is defined in Section 368(c) of the Code.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby
mutually covenant and agree as follows:
1. ASSIGNMENT OF ASSETS AND LIABILITIES OF THE BUSINESS.
Simultaneously with executing this Agreement, the Parent shall
contribute, assign and transfer to the Operating Company, and the Operating
Company shall accept, all of the Parent's assets and liabilities (such assets
and liabilities, collectively, the "CONTRIBUTED PROPERTY") as of the date
hereof, free and clear of all liens, claims, encumbrances and restrictions of
any kind whatsoever.
2. ISSUANCE OF STOCK. In consideration for the Parent's contribution of
the Contributed Property to the Operating Company pursuant to Section 1, the
Company has issued to the Parent 1,000 shares of Common Stock in the
Operating Company, representing 100% of the issued and outstanding stock of the
Operating Company, free and clear of any liens, claims, encumbrances and
restrictions of any kind whatsoever.
3. REPRESENTATIONS AND WARRANTIES OF THE PARENT. The Parent hereby
represents and warrants to and for the benefit of the Operating Company as of
the Execution Date, with full knowledge that the Operating Company is relying
upon the same, as follows:
(a) ORGANIZATION OF THE PARENT. The Parent is a limited liability
company duly formed, validly existing, and in active status under the laws of
the State of Florida, with full limited liability company power and authority to
carry on the business in which it is engaged, to own the property owned by it
and to perform its obligations under this Agreement.
(b) AUTHORIZATION. The transactions contemplated by this Agreement have
been duly authorized and approved by the Board of Managers of the Parent and by
all of the members of the Parent, and no other limited liability company act,
approval or proceeding on the part of the Parent is required to authorize the
execution and delivery of this Agreement by the Parent or for the consummation
of the contemplated transactions. The Parent has the full power, right and
authority to enter into and perform its obligations under this Agreement. This
Agreement constitutes a valid and binding agreement of the Parent enforceable in
accordance with its terms.
(c) TITLE TO CONTRIBUTED PROPERTY. Except for liens for taxes not yet
due, if any, the Parent has good, valid and marketable title to all of the
Contributed Property, free and clear of all liens, claims, encumbrances and
restrictions of any kind whatsoever.
(d) CONDITION OF ASSETS. All of the Contributed Property is in good
condition and repair, ordinary wear and tear excepted, and conforms with all
applicable laws, ordinances and regulations of all federal, state and local
governmental agencies and authorities where the failure to conform to those
laws, ordinances and regulations would have a material adverse effect on the
Business or the Contributed Property, and the Parent has not received notice of
any breach or violation of any of those laws, ordinances or regulations.
(e) BROKERS. No broker or finder has been employed by the Parent in
connection with the negotiations relative to this Agreement. All negotiations
relative to this Agreement have been carried on directly by the Parent without
the intervention of any third party other than legal counsel or accountants for
the Parent.
4. REPRESENTATIONS AND WARRANTIES OF THE OPERATING COMPANY. The
Operating Company hereby represents and warrants to and for the benefit of the
Parent as of the Execution Date, with full knowledge that the Parent is relying
upon the same, as follows:
(a) ORGANIZATION OF THE OPERATING COMPANY. The Operating Company is a
corporation duly formed, validly existing and in good standing under the laws of
the State of Delaware with full power and authority to carry on the business in
which it is engaged, to own the property owned by it and to perform its
obligations under this Agreement.
(b) AUTHORIZATION. The transactions contemplated by this Agreement have
been duly authorized and approved by the Operating Company, and no other
corporate act, approval or proceeding on the part of the Operating Company is
required to authorize the execution and delivery of this Agreement by the
Operating Company or for the consummation of the contemplated transactions. The
Operating Company has the requisite corporate power and authority to enter into
this Agreement and to perform its obligations under this Agreement. This
Agreement constitutes a valid and binding agreement of the Operating Company
enforceable in accordance with its terms.
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(c) CAPITALIZATION. The Operating Company has 10,000,000 shares of
authorized common stock and 5,000,000 shares of authorized preferred stock. Upon
consummation of the transactions contemplated hereby, including the issuance of
the common stock to the Parent pursuant to the terms of this Agreement the
Operating Company will have 1,000 shares of issued and outstanding common stock.
(d) BROKERS. No broker or finder has been employed by the Operating
Company in connection with the negotiations relative to this Agreement. All
negotiations relative to this Agreement have been carried on directly by the
Operating Company without the intervention of any third party other than legal
counsel or accountants for the Operating Company.
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Parent in Section 3 hereof and made by the Operating
Company in Section 4 hereof shall survive the execution of this Agreement and
the consummation of the transactions contemplated hereby.
6. COVENANTS AND AGREEMENTS OF THE PARENT. The Parent hereby covenants
and agrees as follows:
(a) LICENSES. The Parent shall assign, convey and/or transfer to the
Operating Company each and all of the licenses, permits and operating
authorizations necessary to operate the Business.
(b) CONSENTS. The Parent will use its best efforts to obtain the
consents and approvals which are necessary for the valid transfer and assignment
of the assets, including any intangible assets, and liabilities of the Business
to the Operating Company.
(c) FURTHER ASSURANCES. Each of the Parent and the Operating Company,
at the closing of the transactions contemplated hereby, or at any time or times
thereafter, upon request of any party hereto, will execute such additional
instruments, documents or certificates as either party deems reasonably
necessary in order to effect the transactions contemplated hereby.
7. DELIVERY OF DOCUMENTS.
(a) DOCUMENTS DELIVERED BY THE PARENT. Simultaneously with the
execution of this Agreement, the Parent shall deliver, or cause to be delivered,
to the Operating Company the following:
(i) all documents or instruments of conveyance, transfers or
assignments, and consents and approvals by the parties (other than the
Parent) to transfer all of the Contributed Property to the Operating
Company, as shall be necessary or appropriate to vest in, convey or
assign to the Operating Company full, complete, good and marketable
title to the Contributed Property including, without limitation, that
certain (x) Global Xxxx of Sale and Assignment and Assumption Agreement
(the "GLOBAL ASSIGNMENT") and (y) the Assignment and Assumption of the
Employment Agreements; and
(ii) all books and records of the Parent related to the
conduct of the Business.
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(b) DOCUMENTS DELIVERED BY THE OPERATING COMPANY. The Operating Company
shall deliver or cause to be delivered to the Parent the following:
(i) all documents, agreement or instruments to accept the
transfer of all of the Contributed Property to the Operating Company,
as shall be necessary or appropriate to vest in, convey or assign to
the Operating Company full, complete, good and marketable title to the
Contributed Property, including, without limitation, (x) a counterpart
to the Global Assignment and (y) a counterpart to the Assignment and
Assumption of Employment Agreements; and
(ii) a stock certificate evidencing the issuance of 1,000
shares of common stock in the Operating Company.
8. MISCELLANEOUS.
(a) NOTICES. All notices, demands or communication under this Agreement
must be in writing, and shall be deemed to have been effectively given when: (i)
personally delivered; (ii) two (2) days after posting in the United States mails
via prepaid, certified mail, return receipt requested; or (iii) one (1) day
after dispatch via overnight courier service, addressed as follows:
If to the Parent:
Splinex LLC
000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
with a copy to:
White & Case LLP
Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
If to the Operating Company:
Splinex Technology Inc.
000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
with a copy to:
White & Case LLP
Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
or to any other address as any party may designate by written notice of the
other parties.
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(b) MODIFICATION. No amendment or modification to this Agreement shall
be binding on any party, unless the amendment or modification is in writing and
executed by all of them with the same formality as this Agreement.
(c) SUCCESSORS. This Agreement shall be binding upon the parties, their
heirs, administrators, successors, executors and assigns. The parties agree that
they and their respective heirs, executors, successors, administrators and
assigns will execute any and all instruments, releases, assignments and consents
that may be reasonably required of them to execute the provisions of this
Agreement.
(d) COUNTERPARTS. This Agreement may be executed in several
counterparts, including facsimile counterparts, each of which shall serve as an
original for all purposes, but all copies of which shall constitute but one and
the same Agreement.
(e) HEADINGS. All headings set forth in this Agreement are intended for
convenience only and shall not control or affect the meaning, construction or
effect of this Agreement or of any of its provisions.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to the contemplated transactions, and it is agreed
that any prior oral or written agreements are null and void.
(g) SEVERABILITY. The invalidity of any one or more of the words in
this Agreement shall not affect the enforceability of the remaining portions of
this Agreement, all of which are inserted conditionally on their being valid in
law.
(h) NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the parties and their respective heirs, personal representatives,
legal representatives, successors and assigns, any rights or remedies under or
by reason of this Agreement.
(i) PREVAILING PARTY. If the parties to this Agreement are forced to
institute legal proceedings to enforce their rights in accordance with the
provisions of this Agreement, the prevailing party shall be entitled to recover
from the non-prevailing parties its reasonable attorneys' and paralegals' fees,
costs and expenses incurred in enforcing its rights, at pre-trial, trial and
appellate levels.
(j) CONSTRUCTION. This Agreement shall be construed without regard to
any presumption or other rule requiring construction against the party causing
this Agreement to be drafted, including any presumption of superior knowledge or
responsibility based upon a party's business or profession or any professional
training, experience, education or degrees of any member, agent, officer or
employee of any party.
(k) NUMBER, GENDER AND TERMINOLOGY. All terms and words used in this
Agreement, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require. All personal pronouns used in this Agreement, whether used in the
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masculine, feminine or neuter gender, shall include all other applicable
genders, the singular shall include the plural, and vice versa. Titles of
schedules, and sections are for convenience only and neither limit nor amplify
the provisions of this Agreement.
(l) NO WAIVER. No failure of any party to exercise any power given that
party under this Agreement or to insist upon strict compliance by the other
party to its obligations under this Agreement, and no custom or practice of the
parties in variance with the terms of this Agreement shall constitute a waiver
of any party's right to demand exact compliance with the terms of this
Agreement.
(m) GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Florida, without regard
to its conflicts of laws principles.
(n) SCHEDULES, EXHIBITS, SECTIONS AND ARTICLES. All exhibits or
schedules attached to this Agreement shall be deemed part of this Agreement and
incorporated into this Agreement, as if fully contained in it. All references in
this Agreement to this Agreement shall include all of the schedules attached to
this Agreement.
(o) JURISDICTION; VENUE; INCONVENIENT FORUM; WAIVER OF JURY TRIAL. ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT
ENTERED BY ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS
OF THE STATE OF FLORIDA, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL RIGHTS TO ANY
TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
THIS PROVISION SHALL SURVIVE CLOSING.
(signature page to follow)
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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement as of the date first set forth above.
SPLINEX, LLC
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: Manager
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SPLINEX TECHNOLOGY INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: President
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