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
atta
