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Exhibit
10.1
CONTRIBUTION
AGREEMENT
CONTRIBUTION AGREEMENT dated
as of December 14, 2004 by and among IBuyDigital, Inc., a Delaware
corporation (hereinafter referred to as the
“Corporation”), and Elliot Antebi, Steven Szklarz, Mark
Antebi and Barry Antebi (each hereinafter referred to as a
“Securityholder” and collectively as the
“Securityholders”).
W I T
N E S S E T H
:
WHEREAS, the Securityholders
currently own, and as of the Closing Date (as hereinafter defined)
will own, in the aggregate, 100% of the issued and outstanding
shares of capital stock of each of the entities set forth on
Schedule I attached hereto (the “Entities”);
and
WHEREAS, each of the
Securityholders desires to transfer and assign to the Corporation
all of his respective interest in and to the issued and outstanding
shares of capital stock of each of the Entities; and
WHEREAS, the Corporation
desires to issue to the Securityholders, and the Securityholders
desire to acquire from the Corporation, in exchange for the
aforesaid, an aggregate of 12,000,000 shares (collectively, the
“Shares”) of the common stock, $.0l par value
(“Common Stock”), of the Corporation.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto hereby agree
as follows:
SECTION I
EXCHANGE OF THE
SHARES
Subject to the terms and
conditions of this Agreement and on the basis of the
representations, warranties, covenants and agreements herein
contained, the Corporation hereby agrees to issue and convey to
each of the Securityholders, and each of the Securityholders
subscribes for and agrees to acquire and accept from the
Corporation, such number of the Shares as is set forth opposite
such Securityholder’s name on Schedule II attached
hereto.
In exchange for the aforesaid
issuance, conveyance and delivery of such Shares, each of the
Securityholders, individually and not in the aggregate, hereby
agrees to transfer and assign to the Corporation such shares of
capital stock in each of the Entities as is owned by each of the
Securityholders as of the Closing Date, in each instance as is set
forth on Schedule II attached hereto, all such shares of capital
stock together representing, as of the Closing Date, 100% of the
issued and outstanding shares of capital stock of each of the
Entities.
The Securityholders and the
Corporation intend that the transactions contemplated by this
Agreement be treated as a tax-free transfer under Section 351 of
the Internal Revenue Code of 1986, as amended. The Securityholders
and the Corporation hereto agree to file all applicable tax returns
on a consistent basis with such treatment.
SECTION II
REPRESENTATIONS, WARRANTIES,
COVENANTS
AND AGREEMENTS OF THE
CORPORATION
The Corporation represents
and warrants to, and covenants and agrees with, the
Securityholders, as of the date hereof, that:
A. Organization; Good
Standing . The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full corporate power and
authority to own its properties and to conduct the businesses in
which it is now engaged.
B. Authority . The
Corporation has full corporate power and authority to execute and
deliver this Agreement and to perform all of its obligations
hereunder, and no consent or approval of any other person or
governmental authority is required therefor. The execution and
delivery of this Agreement by the Corporation, the performance by
the Corporation of its covenants and agreements hereunder and the
consummation by the Corporation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action.
This Agreement constitutes a valid and legally binding obligation
of the Corporation, enforceable against the Corporation in
accordance with its terms.
C. No Legal Bar;
Conflicts . Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, violates any provision of the Certificate of Incorporation
or By-Laws of the Corporation or any law, statute, ordinance,
regulation, order, judgment or decree of any court or governmental
agency, or conflicts with or results in any breach of any of the
terms of or constitutes a default under or results in the
termination of or the creation of any lien pursuant to the terms of
any contact or agreement to which the Corporation is a party or by
which the Corporation or any of its assets is bound.
D. Capitalization .
The authorized capital stock of the Corporation consists of
50,000,000 shares of Common Stock, $0.01 par value per share, and
5,000,000 shares of undesignated Preferred Stock, $0.01 par value
per share (the “Preferred Stock”). Immediately
following the issuances contemplated hereby, there will be
12,000,000 shares of Common Stock issued and outstanding and no
shares of Preferred Stock issued and outstanding. In addition,
immediately following the issuances contemplated hereby, there will
be no issued or outstanding options, warrants, contracts, calls,
commitments or demands of any nature relating to the
Corporation’s Common Stock or Preferred Stock. The Shares
being issued hereunder have been duly authorized and, when issued
to the Securityholders for the consideration herein provided, will
be validly issued, fully paid and nonassessable.
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SECTION III
REPRESENTATIONS, WARRANTIES,
COVENANTS
AND AGREEMENTS OF THE
SECURITYHOLDERS
Each of the Securityholders,
individually and not in the aggregate, represents and warrants to,
and covenants and agrees with, the Corporation, as of the date
hereof, that:
A. Authority . Such
Securityholder has the full power, authority and legal right to
execute and deliver this Agreement, and to perform his respective
covenants and agreements hereunder, and this Agreement constitutes
a valid and legally binding obligation of each of them enforceable
against each of them in accordance with its terms.
B. Title to Shares .
Such Securityholder is, and as of the Closing Date will be, the
lawful record and beneficial owner of all of the shares of capital
stock of each of the Entities set forth opposite his name on
Schedule II attached hereto, free and clear of all pledges,
security interests, liens, charges, encumbrances, equities, claims,
options or limitations affecting his ability to vote such shares of
capital stock or to transfer such shares of capital stock to the
Corporation. The shares of capital stock set forth on Schedule II
attached hereto constitute, as of the Closing Date, 100% of the
issued and outstanding shares of capital stock of each of the
Entities. There are no issued or outstanding options, warrants,
contracts, calls, commitments or de
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