MEMBERSHIP INTEREST PURCHASE AGREEMENT
Exhibit
10.5
THIS
MEMBERSHIP INTEREST PURCHASE
AGREEMENT (the “Agreement”) is made and entered into this 1st day of
May, 2007, (the “Effective Date”), by and among certain members of E360, LLC, a
Florida Limited Liability Company (“Sellers”), and GEN2MEDIA Corporation, a
to-be-formed Nevada corporation (“Buyer”) regarding the purchase and sale of
certain membership units owned by Sellers in E360, LLC (the
“Company”)
RECITALS
WHEREAS,
Sellers comprise members of the Company holding 95% of the membership
interests therein (the “Interest”); and
WHEREAS,
Buyer has agreed to purchase from Sellers, and Sellers have agreed to sell
to
Buyer, the Interest and all other right, title and interest of Sellers in the
Company, all in accordance with the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of the mutual covenants set forth below and in
exchange for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto now agree as
follows:
AGREEMENT
1. Recitals. The
above recitals are true and correct, are acknowledged by the parties hereto
and
are incorporated into this Agreement by this reference.
2. Sale
of Interest; Closing Deliveries. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall be consummated
on the date hereof (the “Closing Date”). At the Closing, the
following documents, instruments and agreements shall be executed and/or
delivered, subject to the terms of this Agreement, by the parties as set forth
below:
a. Sellers
shall effect the sale of the Interest by delivering to Buyer duly and properly
executed assignments, (the “Assignments”), together with such other documents of
transfer as are reasonably necessary in Buyer’s opinion to effect the transfer
of the Interest in accordance with the terms of this Agreement.
b. Buyer
shall deliver to Sellers the Purchase Price as defined in and pursuant to
paragraph 3 hereinbelow.
c. The
Company, Buyer and Sellers shall each deliver to one another, as appropriate,
such other certificates, documents, instruments and agreements as any of the
Company, Buyer or Sellers shall deem reasonably necessary in order to confirm
or
effectuate the transactions contemplated herein, in form and substance
reasonably satisfactory to each party requesting the same.
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3. Purchase
Price; Payment
a. The
purchase price for the Interest (the “Purchase Price”) shall be by issuance of a
total of 32,499,999 shares of restricted, Class A Common Stock of Buyer, in
a
tax free exchange. Said shares shall be restricted and shall not be tradable
in
any public market until such time, and unless allowed by applicable laws. Buyer
makes no representation as to the value or marketability of said
shares. Said shares shall be issued in the following amounts:
10,833,333 to Xxxx Spio, 10,833,333 to Xxxx Xxxxxxx and 10,833,833 to Xxx
XxXxxxxx.
4. Representations
and Warranties.
a. Sellers’
Representations and Warranties. Sellers, jointly and
severally, represent and warrant to the Buyer and to the Company as
follows:
i. Power
and Authority. Sellers have all requisite power, authority and
capacity to enter into this Agreement and the Assignments and to perform their
respective obligations under this Agreement and the Assignments. This
Agreement, the Assignments and the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action on the part of
Sellers. This Agreement and the Assignments have been duly executed
and delivered by Sellers and constitute the legal, valid and binding obligation
of Sellers, enforceable against Sellers in accordance with its
terms. No further action of any other party is or will be required in
connection with the transactions contemplated hereby.
ii. No
Conflict. The execution and delivery of this Agreement and
the Assignments and any other agreements and instruments to be
executed and delivered hereunder or in connection herewith and the consummation
of the transactions contemplated hereby and the compliance with the provisions
hereof and thereof do not and will not (i) violate, or conflict with, or result
in a breach of any provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
give
rise to a right of termination, cancellation, modification or acceleration
of
the performance required by or a loss of a benefit under, or result in the
creation of any encumbrance upon the Interest or any other properties or assets
of Sellers under any note, bond, mortgage, indenture, deed of trust, license,
agreement, lease, permit, franchise or other instrument or obligation to which
Sellers are a party or by which the Interest is bound or affected, or (ii)
violate any law, rule, regulation, order or code by which any of the Interest
or
Sellers’ properties are bound or affected.
iii. Interest
Ownership. Sellers are, immediately prior to the Effective Date
hereof, and will be, upon the assignment of the Interest to Buyer, the sole
owners, free and clear of any claims, liens, options, pledges, security
interests, charges, encumbrances and restrictions whatsoever, of the
Interest.
iv. Litigation. There
is no litigation or proceeding pending, or to Sellers’ best knowledge,
threatened, against or relating to Sellers, their properties or business, or
against or relating to the Interest, nor do Sellers have reasonable grounds
to
know of any basis for any such action or of any governmental investigation
thereof.
v. Disclosure. No
representation or warranty made by Sellers in this Agreement, nor any statement
or certificate furnished or to be furnished pursuant hereto, or furnished or
to
be furnished in connection with the transactions contemplated hereby, contains
or will contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained therein
not
misleading.
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The
foregoing representations and warranties are true and accurate as of the date
hereof and shall survive the execution and delivery of this Agreement and the
purchase of the Interest. Sellers agree to jointly and severally
indemnify and hold the Company and its affiliates, successors, assigns, and
their managers, officers, directors, members, shareholders, employees, agents
and representatives, and Buyer and its trustees and beneficiaries, and their
heirs, beneficiaries, agents and representatives, harmless from and against
any
and all expenses, including reasonable attorneys’ fees, and tax and untaxed
costs and other reasonable expenses, losses, damages or liabilities due to
or
arising out of a breach by Sellers of any representation or warranty made by
Sellers herein.
b. Buyer’s
Representations and Warranties. Buyer makes representations and
warranties to the Sellers as follows:
i. Power
and Authority. Buyer has all requisite power and authority to
enter into this Agreement and to perform its obligations under this
Agreement. This Agreement has been duly executed and delivered by
Buyer and constitutes the legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms. No further
action of any other party is or will be required in connection with the
transactions contemplated hereby.
ii. No
Conflict. The execution and delivery of this Agreement and
the Assignment and any other agreements and instruments to be
executed and delivered hereunder or in connection herewith and the consummation
of the transactions contemplated hereby and the compliance with the provisions
hereof and thereof do not and will not violate, or conflict with, or result
in a
breach of any provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or give
rise
to a right of termination, cancellation, modification or acceleration of the
performance required by or a loss of a benefit under, or result in the creation
of any encumbrance upon the Interest or any other properties or assets of Buyer
under it Articles of Incorporation, Bylaws or other governing documents to
which
Buyer is subject, or any note, bond, mortgage, indenture, deed of trust,
license, agreement, lease, permit, franchise or other instrument or obligation
to which Buyer is a party.
iii. Litigation. There
is no litigation or proceeding pending, or to Buyer’s best knowledge,
threatened, against or relating to Buyer or its properties, nor does Buyer
have
reasonable grounds to know of any basis for any such action or of any
governmental investigation thereof.
iv. Disclosure. No
representation or warranty made by Buyer in this Agreement, nor any statement
or
certificate furnished or to be furnished pursuant hereto, or furnished or to
be
furnished in connection with the transactions contemplated hereby, contains
or
will contain any untrue statement of a material fact, or omits or will omit
to
state a material fact necessary to make the statements contained therein not
misleading.
The
foregoing representations and warranties are true and accurate as of the date
hereof and shall survive the execution and delivery of this Agreement and the
purchase of the Interest. Buyer agrees to indemnify and hold Sellers
and its affiliates, successors, assigns, and their members, shareholders,
officers, directors, employees, agents and representatives, harmless from and
against any and all expenses, including reasonable attorneys’ fees, and tax and
untaxed costs and other reasonable expenses, losses, damages or liabilities
due
to or arising out of a breach by Buyer of any representation or warranty made
by
Buyer herein.
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5. Commissions
and Finder’s Fees. The parties hereto each represent and warrant
to the other that this Agreement results without the assistance or advice of
any
finder, broker or commission agent. Each of the parties represents
and warrants that such party has made no arrangements or commitments with
respect to any brokerage fees, stock sale commission or finder’s fees, and each
party shall hold the other parties harmless with respect to any such agreements
or commitments.
6. Survival
of Representations. All representations, warranties, covenants
and indemnities made by the parties hereunder shall survive the closing of
the
transactions contemplated in this Agreement.
7. Benefit. This
Agreement shall be binding upon, and inure to the benefit of the parties hereto
and their heirs, executors, personal representatives, successors and
assigns.
8. Enforcement
Proceedings. It is expressly agreed and stipulated that this
Agreement shall be deemed to have been made and to be performed in Orange
County, Florida, and all questions concerning the validity, interpretation,
or
performance of any of its terms or provisions, or of any rights or obligations
of the parties hereto, shall be governed by and resolved in accordance with
the
laws of the State of Florida. Each party hereby irrevocably submits
to the exclusive venue and jurisdiction of the courts (state and federal) in
and
for Orange County, Florida over any dispute arising out of this Agreement,
the
assignment or the transactions contemplated hereby, and agree that all claims
in
respect of such dispute or proceeding shall be heard and determined in such
courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection that they may have to the venue
of
any such dispute brought in such court or any defense of inconvenient forum
for
the maintenance of such dispute. EACH PARTY HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND A TRIAL BY JURY FOR ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A
TRIAL BY JURY ARISING FROM ANY SOURCE, INCLUDING BUT NOT LIMITED TO THE
CONSTITUTION OF THE UNITED STATES, THE CONSTITUTION OF ANY STATE, COMMON LAW
OR
ANY APPLICABLE STATUTE OR REGULATION. EACH PARTY IS HEREBY KNOWINGLY AND
VOLUNTARILY WAIVING THE RIGHT TO DEMAND TRIAL BY JURY.
9. Costs
of Enforcement. In the event any party initiates action to
enforce rights hereunder, the prevailing party shall recover from the
non-prevailing party his or its reasonable expenses, court costs and
reasonable attorneys’ fees. As used herein, expenses, court costs and
attorneys’ fees include expenses, court costs and attorneys’ fees incurred in
any appellate proceeding. Expenses incurred in enforcing this
paragraph and in collecting amounts due hereunder shall be covered by this
paragraph. For this purpose, the court is requested by the parties to
award actual costs and attorneys’ fees incurred by the prevailing party, it
being the intention of the parties that the prevailing party be completely
reimbursed for all such costs and fees.
10. Entire
Agreement and Modification. This Agreement constitutes the entire
agreement between the parties with respect to the subject matters contained
herein. This Agreement shall not be amended or modified except by
instrument in writing executed by all of the parties hereto.
11. Invalid
Provision. The invalidity or unenforceability of a particular
provision of this Agreement shall not affect the other provisions hereof, and
the Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
12. Transaction
Costs. Transfer taxes and recording fees, if any, incurred in
connection with the assignment and transfer of the Interest shall be borne
by
Buyer. Buyer and Sellers shall each bear their own attorneys’ fees
and costs, except as set forth in Section 9 above.
[Signatures
on Following Page]
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IN
WITNESS WHEREOF, the parties hereto
have duly executed this Membership Interest Purchase Agreement on the day and
year first above written.
| GEN2MEDIA CORPORATION | ||||
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Xxxx
Spio,
President (to be formed)
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/s/
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/s/
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Xxxx
Spio,
Individually
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Xxxx
Xxxxxxx
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/s/
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Xxx
XxXxxxxx
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