Exhibit 2.1
LLC INTEREST PURCHASE AGREEMENT
This LLC Interest Purchase Agreement (this "Agreement") is made and entered
Into as of this 7th day of June, 2005 by the Sun Network Group, Inc., a Florida
corporation having its principal place of business at 1440 Coral Ridge Drive,
Suite 140, Coral Springs, FL 33180 ("Sun Network") and the members listed on
Schedule I hereto representing and owning 97.7778% (the "Members") of Aventura
Networks, LLC, a Florida limited liability company with its principal address at
20533 Biscayne Boulevard, Suite 1122, Miami, FL 33180 ("Aventura").
WITNESSETH:
WHEREAS, the Members are the owners of 97.7778% of all the issued and
outstanding Membership Interests (as hereinafter defined) of Aventura;
WHEREAS, the Members desire to sell, assign and convey to Sun Network their
respective Membership Interests, and those representing the minority membership,
on and subject to the terms and conditions of this Agreement; and
WHEREAS, Sun Network desires to purchase and acquire the Membership Interests
from the Members on and subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the respective representations and
warranties hereinafter set forth and of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Assets" shall mean:
all cash of Aventura on hand, in any bank, money market account, mutual
fund, and all certificates of deposit, letters of credit in favor of Aventura
and all other readily marketable securities or other cash equivalents of
Aventura;
all accounts receivable, notes receivable and other rights of Aventura to
receive payments, all as described in Schedule 1.1(b) hereto (the
"Receivables");
all equipment, vehicles, furniture and fixtures, and all other fixed assets
owned or leased by Aventura, constituting all such items necessary for the
continued operation of Aventura's business, as described on Schedule 1.1(c)
hereto (the "Fixed Assets");
all rights and benefits under all contracts, agreements, leases, licenses,
purchase commitments and sales orders to which Aventura is a party
(collectively, the "Contracts"), constituting all such Contracts which are
necessary or beneficial to the operation of Aventura's business, all set forth
on Schedule 1.1(d) annexed hereto;
all patents, patent rights, copyrights, trademarks, trademark rights, trade
names, trade name rights and patent, copyright or trademark applications, which
Aventura owns, all set forth on Schedule 1.1(e) annexed hereto, and all ideas,
know-how, trade secrets, inventions, technology, designs and any other
proprietary rights which Aventura owns;
any and all other assets of Aventura not described above, including all of
Aventura's interest in "VoIP Blue.com Inc" and Aventura Holdings, Inc, and any
and all assets included on the Balance Sheet (as hereinafter defined).
"Closing Date" shall mean June 7, 2005, or such other date as the parties
may mutually agree.
"Escrow Agent" shall mean Sun Network Group, Inc, or such other party as is
mutually agreed to by the parties hereto.
"Financial Statements" shall mean the unaudited balance sheet and P&L of
Aventura for its fiscal year ended March 31, 2005, and the unaudited monthly
operating reports of Aventura for the 12 months in the year ending on March 31,
2005, attached to this Agreement as Schedule II.
"Membership Interests" shall mean Aventura's Limited Liability Company
Interests, as defined in the Florida Limited Liability Company Act.
"Newco" shall mean the successor in interest to Sun Network Group, Inc. and
Aventura Networks, LLC.
"Shareholder Loan" shall mean the aggregate of all loans made to Sun
Network by shareholders that remain on the Company's books as of the Closing
Date.
"Sun Network Assets" shall mean all of the non-telecom and pre-existing
assets of Sun Network prior to the Closing Date, as described in Schedule 5.0.
"Sun Network Representative" shall mean the duly authorized representative
of Sun Network after the Closing Date, T. Joseph Coleman.
"Financing Agreement" shall mean the Stock Purchase Agreement by and
between Sun Network Group, Inc and Dutchess Private Equities Fund II, L.P.,
attached as Schedule 6.0.
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTERESTS; PURCHASE PRICE
Purchase and Sale of the Membership Interests. In reliance upon the
representations, warranties and covenants contained in this Agreement as of the
date hereof, and on the Closing Date, the Members hereby agree to sell,
transfer, assign, convey and deliver to Sun Network at the Closing, as
hereinafter defined, and Sun Network hereby agrees to purchase and accept from
the Members, on the terms and conditions set forth in this Agreement, all of
their respective right, title and interest in and to the Membership Interests,
free and clear of any liens, pledges, security interests, claims or encumbrances
of any kind.
Purchase Price. The purchase price (the "Purchase Price") for the
Membership Interests shall consist of Nine Hundred Million (900,000,000) shares
of Sun Network's common stock, par value $.001 (the "Sun Network Shares"), to be
issued to
the Members allocated pro-rata in accordance with each Member's respective
Membership Interest as set forth on Schedule I hereto.
ARTICLE III
CLOSING; CONDITIONS TO CLOSING; DELIVERIES
Closing. The closing of this transaction (the "Closing") shall be held on
the Closing Date at or about 10:00 a.m. Eastern Standard Time, at the offices of
Sun Network, or at such other time and place upon which the parties shall
agree.
3.1 Conditions to Sun Network's Obligation. Sun Network's obligation
hereunder to purchase and pay for the Membership Interests is subject to the
satisfaction, on or before the Closing Date, of the following conditions, any of
which may be waived, in whole or in part, by Sun Network in its sole
discretion, and the Members shall use their respective best efforts to cause
such conditions to be fulfilled:
(a) Representations and Warranties Correct; Performance of Covenants;
Satisfaction of Conditions. The representations and warranties of the Members
contained in this Agreement (including the Exhibits and Schedules hereto) and
those otherwise made in writing by or on behalf of the Members in connection
with the transactions contemplated by this Agreement shall be true, complete and
accurate in all material respects both when made and on and as of the
Closing Date as though such representations and warranties were made at and as
of such date, and the Members shall have delivered to Sun Network a certificate
signed by them, dated the Closing Date, to such effect. The Members shall have
duly and properly performed, complied with, satisfied and observed each of their
respective covenants, agreements, conditions to closing and obligations
contained in this Agreement to be performed, complied with, satisfied and
observed on or before the Closing Date, and the Members shall have delivered to
Sun Network a certificate signed by them, dated the Closing Date, to such
effect.
(b) Purchase Permitted by Applicable Laws. The purchase of and payment for
the Membership Interests to be purchased by Sun Network hereunder shall not be
prohibited by any applicable law or governmental regulation (all required
approvals having been received) and shall not subject Sun Network to any tax,
penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation.
(c) No Adverse Decision. There shall be no action, suit, investigation or
proceeding pending or threatened by or before any court, arbitrator or
administrative or governmental body which seeks to restrain, enjoin, prevent the
consummation of or otherwise affect the transactions contemplated by this
Agreement or questions the validity or legality of any such transactions or
seeks to recover damages or to obtain other relief in connection with any such
transactions.
(d) Approvals and Consents. The Members shall have duly obtained all
authorizations, consents, rulings, approvals, licenses, franchises, permits and
certificates, or exemptions therefrom, by or of all governmental authorities and
non-governmental administrative or regulatory agencies, domestic or foreign,
having jurisdiction over the parties hereto, their respective assets, this
Agreement, the Membership Interests or the transactions contemplated hereby,
including, without limitation, the consents of all third parties pursuant to
existing agreements or instruments by which Aventura or any of the Members may
be bound, which are required for the execution, delivery and performance by the
Members of this Agreement and the consummation of the transactions contemplated
hereby, at no cost or other adverse consequence to Sun Network, and all thereof
shall be in full force and effect at the time of Closing, and the Members shall
have each delivered to Sun Network a certificate signed by them and dated the
Closing Date, to such effect.
(e) Securities Law Compliance. All actions and steps necessary to assure
compliance with applicable Federal and state securities laws in connection with
the lawful sale of the Membership Interests pursuant to this Agreement shall
have been duly obtained and shall be effective on and as of the Closing.
(f) Proceedings: Receipt of Documents, Financial Statements. All corporate
and other proceedings taken or required to be taken by the Members in connection
with the transactions contemplated hereby and all documents incident thereto
shall have been taken and shall be satisfactory in form and substance to Sun
Network and its counsel, and Sun Network shall have received all such
information and such counterpart originals or certified or other copies of such
documents as Sun Network may reasonably request. Aventura Financial Statements
shall have been delivered and reviewed by Sun Network counsel and auditors and
have been deemed acceptable and approved.
(g) Delivery of Documents. The Members shall have delivered, or caused to be
delivered, to Sun Network the following:
(i) Limited liability company and tax good standing certificates of Aventura
from the State of Florida;
(ii) certified copies of the Certificate of Formation and Operating
Agreement of Aventura; and
(iii) all other consents, agreements, schedules, documents and exhibits
required by this Agreement to be delivered, or reasonably requested by Sun
Network, at or before the Closing.
(h) Adverse Change. Since [the date of the Balance sheet] up to the Closing
Date, Aventura shall not have suffered any adverse changes (other than changes
described in the Exhibits or Schedules hereto or any supplement to the Exhibits
or Schedules) and the Members shall have delivered to Sun Network a certificate
signed by them and dated the Closing Date, to such effect.
3.2 Conditions to the Obligation of the Members. The obligation of the
Members to consummate the transactions contemplated hereby are subject to the
fulfillment of the following conditions on or prior to the Closing Date, any of
which may be waived, in whole or in part, by the Members in their sole
discretion, and Sun Network shall use its best efforts to cause such conditions
to be fulfilled.
(a) Representations and Warranties Correct; Performance. The representations
and warranties of Sun Network in this Agreement and those otherwise made in
writing by or on behalf of Sun Network shall be true, complete and accurate when
made in all material respects on and as of the Closing Date, as though such
representations and warranties were made at and as of such date, and Sun Network
shall have delivered to the Members a certificate signed by its President and
dated the Closing Date, to such effect. Sun Network shall have duly and properly
performed, complied with, satisfied and observed each of its covenants,
agreements, conditions to closing and obligations contained in this Agreement to
be performed, complied with, satisfied and observed on or before the Closing
Date, and Sun Network shall have delivered to the Members a certificate signed
by its President and dated the Closing Date, to such effect.
(b) Purchase Permitted by Applicable Laws. The purchase of and payment for
the Membership Interests shall not be prohibited by any applicable law or
governmental regulation (all required approvals having been obtained).
(c) Delivery of Purchase Price. Sun Network shall have delivered the
Purchase Price due for the Membership Interests as hereinabove contemplated.
(d) Delivery of Documents. Sun Network shall have delivered, or caused to be
delivered, the following:
(i) Online access to all corporate and other filings of Sun Network;
(ii) certified copies of the Certificate of Incorporation and By-Laws of Sun
Network; and
(iii) all other consents, agreements, schedules, documents and exhibits
required by this Agreement to be delivered, or reasonably requested by the
Members, at or before the Closing including the Corporate Resolution authorizing
the Purchase.
(e) Shares Outstanding at Closing. At the time of closing, Sun Network shall
have, approximately, a total of 720,000,000 common shares outstanding, and
no stock options or Preferred shares, out of a total of 5,000,000,000 shares
authorized. Shares outstanding shall include any and all shares to be issued to
outgoing Sun Network Directors and officers, or their designees and the shares
to be issued under Rule 602 of Regulation E of the General Rules and Regulations
promised under the Securities Act of 1933, as amended for the initial shares
issued under the Financing Agreement.
(f) Capital and Debt at Closing. At the time of Closing, Sun Network shall
have no material debt of any kind, except for some accounting payables of
approximately $15,000 to accountants and auditors, the Shareholder Loan of
approximately $117,500, which is to be fully forgiven upon the transfer of the
Sun Network Assets, and shall have an approximate positive cash balance of
$300,000, upon Closing and full assumption by Newco of the Financing Agreement.
(g) BDC Election. Sun Network shall have elected to be regulated as a
business development company under the Investment Company Act of 1940 in
accordance with Regulation E of the General Rules and Regulations under the
Securities Act of 1933, as amended, which the Members and Sun Network hereby
acknowledge to have occurred on May 6, 2005
(h) Resignation of Sun Network Officers and Directors. The written
resignations of all directors and officers of Sun Network shall have been
submitted effective as of the Closing Date, attached as Schedule 7.0.
(i) No Adverse Decision. There shall be no action, suit, investigation or
proceeding pending or threatened by or before any court, arbitrator or
administrative or governmental body which seeks to restrain, enjoin, prevent the
consummation of or otherwise affect the transactions contemplated by this
Agreement or questions the validity or legality of any such transactions or
seeks to recover damages or to obtain other relief in connection with any such
transactions.
(j) Approvals and Consents. Sun Network shall have duly obtained all
authorizations, consents, rulings, approvals, licenses, franchises, permits and
certificates, or exemptions there from, by or of all governmental authorities
and non-governmental administrative or regulatory agencies, domestic or foreign,
having jurisdiction over the parties hereto, their respective assets, this
Agreement, the Sun Network Shares or the transactions contemplated hereby,
including, without limitation, the consents of all third parties pursuant to
existing agreements or instruments by which Sun Network may be bound, which are
required for Sun Network's execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby, and all thereof
shall be in full force and effect at the time of Closing, and Sun Network shall
have delivered to the Members a certificate signed by its President and dated
the Closing Date, to such effect.
(k) Proceedings: Receipt of Documents. All corporate and other proceedings
taken or required to be taken by Sun Network in connection with the transactions
contemplated hereby and all documents incident thereto shall have been taken and
shall be satisfactory in form and substance to the Members and their counsel,
and the Members shall have received all such information and such counterpart
originals or certified or other copies of such documents as they may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
The Member(s) owning 97.7778% of all the membership units hereby represents
and warrants to Sun Network as follows:
Organization and Good Standing. Aventura is a limited liability company,
duly formed, validly existing and in good standing under the laws of the State
of Florida and is in good standing as a foreign limited liability company in
each other jurisdiction where the properties owned, leased or operated or the
business conducted by it requires such qualification.
No Breach as to Aventura. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby does not, and will not,
result in a breach, violation or default or give rise to an event which with the
giving of notice or after the passage of time, or both, would result in a
breach, violation or default of any of the terms or provisions of Aventura's
Certificate of Formation, Operating Agreement or other limited liability company
agreement, or of any statute, indenture, mortgage, loan agreement or other
agreement, instrument or restriction to which Aventura is a party or by which
Aventura, or any of Aventura's assets, may be bound or affected, or any rule or
regulation of any court or governmental agency or body having jurisdiction over
Aventura; the execution and delivery of this Agreement by the Members have been
and, as of the Closing Date, the consummation of the transactions contemplated
hereby will have been duly authorized, and no further consent, authorization or
approval is necessary to enable Aventura to enter into and perform same.
Membership Interests. Schedule 4.3 attached hereto sets forth a true and
complete list of Aventura's Members of record and the Membership Interests owned
of record by each of them. Except as set forth on Schedule 4.3, there are no
outstanding preemptive, conversion, or other rights, options, warrants or
agreements granted or issued for the purchase or acquisition of a Membership
Interest. The limited liability company interests owned by the Members in the
aggregate constitutes 100% of Aventura's limited liability company interests.
Patents, Trademarks, Etc. Except as described on Schedule 4.4 annexed
hereto, there are no inventions, licenses, patents, patent applications,
trademarks, copyrights or similar intellectual property; listed in Schedule 4.4
hereto are all such items necessary for the present conduct of Aventura's
business; and except as specifically described on Schedule 4.4, none of which is
being contested or infringed upon; and the present conduct of Aventura's
business does not infringe upon or violate the rights of anyone else, nor has
Aventura or the Members received any notice of any infringement thereof.
Title to Assets.
Aventura has good and marketable title to all of its Assets; and
Except as described in Schedule 4.5(b) annexed hereto, but subject to minor
imperfections of title that do not affect, in any material respect, the use or
the value of such property and such assets taken as a whole, none of such Assets
or the use thereof: (i) is subject to any easements or restrictions or to any
mortgages, liens, pledges, charges, security interests, encumbrances or
encroachments, or to any rights of others of any kind of nature whatsoever, (ii)
encroaches or infringes on the property or rights of another or (iii)
contravenes in any material respect any applicable law or ordinance or any other
administrative regulation or violates any restrictive covenant or any provision
of law. There are no agreements or arrangements between Aventura and any third
person which have any material effect upon Aventura's title to or other rights
respecting the Assets except as set forth on Schedule 4.5(b).
Compliance with Law. Aventura is not in violation in any material respect
of any laws, governmental orders, rules or regulations to which Aventura or any
of its properties or businesses is subject.
Agreements. Annexed hereto on Schedule 4.7 is a true and complete list of
all material contracts, instruments, commitments, and agreements, whether oral
or written, presently in effect to which Aventura is a party or to which
Aventura or the Assets is subject including, without limitation, the following:
any plan or contract or arrangement, oral or written, providing for
employment or consulting services, bonuses, commissions, pensions, stock
purchase or stock option or other stock rights, deferred compensation,
retirement or severance payments, profit sharing, or the like;
any instrument or arrangement evidencing or relating in any way to (i)
indebtedness for borrowed money by way of direct loan, purchase money
obligation, conditional sale, lease purchase arrangement, guarantee or
otherwise, (ii) confession of judgment or agreed judgment, (iii) liens,
encumbrances or security interests, (iv) guaranties or indemnification or (v)
investments in any person;
any contract containing provisions limiting the freedom of Aventura to
engage in any business, compete in any line of business or market any particular
type of product, in any geographic area or with or to any person;
any license, sublicense, lease or sublease agreement, whether as licensor,
sublicensor, licensee, sublicensee, lessor, sublessor, lessee, sublessee or
otherwise, or any agreements with dealers, vendors, customers, suppliers, sales
representatives, any governmental entity, fund or university, or any agents,
marketing representatives, brokers or distributors;
any joint venture contract or arrangement or other agreement involving a
sharing of profits or expenses, or any joint or other technology development,
cooperation or exchange contract or arrangement;
agreements providing for disposition of the business or any assets or
shares of the capital stock of Aventura; agreements of merger or consolidation
to which Aventura are a party; or any letters of intent with respect to the
foregoing;
contracts requiring the performance of consulting services, software
development or modification or other services.
Except as described on Schedule 4.7, each such agreement is a valid and
subsisting agreement and is in full force and effect, all payments due to or
from Aventura thereunder have been made, there are no disputes or suits or
actions at law or otherwise pending or threatened thereunder, and such
agreements are the only agreements or arrangements of this nature. True,
complete, and correct copies of each such agreement have been supplied to Sun
Network prior to the date hereof.
Financial Statements. Attached hereto as Schedule II is a true and correct
copy of the Financial Statements. The Financial Statements have been prepared on
a consistent basis and fairly present the consolidated financial position
and results of operations of Aventura for the periods covered thereby. The books
and records respectively maintained by Aventura upon which the Financial
Statements are based are true and correct in all respects and accurately reflect
the business of Aventura. Except to the extent reflected or reserved against in
the Balance Sheet or as otherwise by Schedule II, Aventura has no liability of
any nature, whether absolute, accrued, contingent or otherwise and whether due
or to become due, including, without limitation, any liability for taxes for any
period prior to such date.
Absence of Changes. Except as set forth on Schedule 4.9 attached hereto,
since May 31, 2005, Aventura has been operated in the ordinary course and there
has not been:
any declaration, setting aside or payment of any dividend or other
distribution of any assets of any kind whatsoever with respect to any shares of
the capital stock of Aventura or any direct or indirect redemption, purchase or
other acquisition of any such shares of the capital stock of Aventura or any
issuance of securities or any rights whatsoever to acquire securities;
any difficulty with its labor relations adversely affecting the business of
Aventura;
any license, sale, transfer, pledge, lien, security interest, mortgage or
other disposition of any tangible or intangible assets;
any write-down or write-up of the value of any asset of Aventura or any
portion thereof;
any change in the accounting methods or practices followed by Aventura, in
depreciation or amortization policies or rates theretofore adopted by Aventura,
any single capital expenditure or commitment therefor by Aventura in excess
of $10,000, or such capital expenditures in the aggregate in excess of $25,000,
for additions to property, plant or equipment of Aventura;
any changes in the manner in which Aventura extends discounts or credit or
otherwise deals with customers, vendors, suppliers, distributors or sales
representatives;
any agreement or commitment relating to the sale by Aventura of any fixed
assets;
any outstanding contract or commitment which will result in any loss to
Aventura upon completion of performance thereof, or any outstanding contract,
bid or sale or service proposal quoting prices which will not result in a normal
profit in the ordinary course of business;
any grant by Aventura of any power of attorney (whether revocable or
irrevocable) to any person that is or may hereafter be in force for any purpose
whatsoever;
the creation of any lien of record or guarantee, or any investment in any
person; or
any commitment to do any of the acts it things specified in items (a)
though (k) of this Section 4.9.
Litigation. Except as described in Schedule 4.10, there are no actions,
suits, proceedings or investigations (including any purportedly on behalf of
Aventura) pending or threatened against or affecting the business or properties
of Aventura whether at law or in equity or admiralty or before or by any
governmental department, commission, board, agency, court or instrumentality,
domestic or foreign; nor is Aventura operating under, subject to, in violation
of or in default with respect to, any judgment, order, writ, injunction or
degree of any court or other governmental department, commission, board, agency
or instrumentality, domestic or foreign.
Taxes. Except as described in Schedule 4.11, Aventura has filed, or caused
to be filed, with all appropriate governmental agencies all required tax and
information returns and have paid, caused to be paid or accrued all taxes
(including, without limitation, all income, franchise, sales, excise and use
taxes), assessments, charges, penalties and interest shown to be due and
payable. Except as described on Schedule 4.11, Aventura has no liability,
contingent or otherwise, for any taxes, assessments, charges, penalties or
interest, other than amounts adequately reserved for. Aventura has not received
directly or indirectly notice of, nor is it otherwise aware of an audit or
examination; Aventura is not a party directly or indirectly to any action or
proceeding by any governmental authority for assessment or collection of taxes,
charges, penalties or interest; nor has any claim for assessment and collection
been asserted against Aventura directly or indirectly; nor has Aventura executed
a waiver of any statute of limitations with respect thereto. Aventura has paid,
or caused to be paid, or adequately reserved for, all applicable corporate
franchise taxes, unemployment taxes, payroll taxes, social security taxes,
occupation taxes, ad valorem taxes, property taxes, excise taxes and imposts,
sales and use taxes, except as described on Schedule 4.11, and all other taxes
of every kind, character or description required to be paid to the date hereof,
and have received no notices and is not otherwise aware, of any deficiencies,
adjustments or changes in assessments with respect to any such taxes. Aventura
has duly filed, or caused to be filed, all reports or returns relating to or
covering any such taxes or other charges which are due or required to be filed
at the date hereof and no extensions of time are in effect for the assessment of
deficiencies for such taxes in respect of any fiscal period.
Salaries. Schedule 4.12 annexed hereto sets forth a true and complete list,
as of the date of this Agreement, of all of the persons who are employed by
Aventura, together with their current compensation, fringe benefits and bonuses
paid or to be paid or the methods of computing such compensation and bonuses,
for the current fiscal year. Except as set forth on Schedule 4.12 annexed
hereto, no such employee is employed by Aventura under a written contract of
employment, nor since [the date of the balance sheet] has Aventura incurred any
outstanding liability for payment of wages, vacation pay (whether accrued or
otherwise), salaries, bonuses, pensions or contributions under any labor or
employment contract, whether oral or written, or by reason of any past practices
with respect to such employees based upon or accruing with respect to services
of present or former employees of Aventura.
Non-Compete and Confidentiality Agreements. Annexed hereto on Schedule 4.13
is a true and complete list of any and all non-competition or confidentiality
agreements presently in effect between Aventura and any third parties.
FCC Registration. Aventura is properly registered with the Federal
Communications Commission.
No Untrue Representation or Warranty. No representation or warranty made by
the Members contained in this Agreement or any attachment, statement, schedule,
exhibit, certificate or instrument furnished or to be furnished to Sun Network
by the Members pursuant hereto, or otherwise furnished in writing by the Members
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
any material fact necessary to make the statements contained herein or therein
not misleading.
No Conflict. The performance of this Agreement and the consummation of the
transactions contemplated herein will not result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which Aventura is a party or by which Aventura is bound, or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over Aventura or the property of Aventura.
Consents and Approval. All consents, approvals, authorizations and orders
necessary for the execution and delivery of this Agreement by the Members have
been obtained, and the Members have the full right, power and authority to enter
into this Agreement.
Authority. Such Member has full right, power and authority to enter into
this Agreement and any other documents executed and delivered by such Member in
connection with the transactions contemplated hereby (the "Ancillary
Documents"), and to convey to Sun Network such Member's Membership Interest. The
execution and delivery of this Agreement and the Ancillary Documents, and
the consummation of the transactions contemplated hereby and thereby, have been
duly authorized by all requisite corporate or other action on the part of such
Member.
No Breach as to Each Member. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby does not, and will
not, result in a breach, violation or default or give rise to an event which
with the giving of notice or after the passage of time, or both, would result in
a breach, violation or default of any agreement or instrument to which such
Member is a party.
Title to Membership Interests. Such Member has good and valid title to his,
her or its Membership Interest to be sold hereunder, free and clear of all
liens, encumbrances or claims except as described on Schedule 4.3, and upon
payment therefore pursuant hereto, good and valid title to such Membership
Interest, free and clear of all liens, encumbrances or claims (other than those
created by Sun Network) will pass to Sun Network.
Brokers. There has been no broker or finder involved in any manner in the
negotiation leading up to the execution of this Agreement or the consummation of
any transactions contemplated hereby, and such Member agrees to indemnify
Sun Network against, and hold Sun Network harmless from, any claim made by any
party for a broker's or finder's fee or other similar payment based upon any
agreements, arrangements or understanding directly made by such Member with such
party.
Qualified Investors.
Such Member is acquiring the Sun Network Shares comprising the
consideration for their own account for investment only and not with a view
toward the public sale or distribution thereof and not with a view to or for
sale in connection with any distribution thereof.
Such Member is an "accredited investor" as that term is defined in Rule 501
of the General Rules and Regulations under the Securities Act of 1933, as
amended (the "Securities Act"), and such Member is (i) experienced in making
investments of the kind described in this Agreement and the related documents,
(ii) able, by reason of his, her or its business and financial experience of and
the business and financial experience of his, her or its professional advisors
(if any) to protect his, her or its own interests in connection with the
transactions described in this Agreement, and the related documents, and (iii)
able to afford the entire loss of his, her or its investment in the Sun Network
Shares.
All subsequent offers and sales of the Sun Network Shares by such Member
shall be made pursuant to registration of the Sun Network Shares under the
Securities Act or pursuant to an exemption from registration.
Such Member acknowledges that the Sun Network Shares are being offered and
sold in reliance on specific exemptions from the registration requirements of
United States federal and state securities laws and that Sun Network is relying
upon the truth and accuracy of, and such Member's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Member set forth herein in order to determine the availability of such
exemptions and the eligibility of the Members to acquire the Sun Network
Shares.
Such Member and his, her or its advisor, if any, has been furnished with
materials relating to the business, finances and operations of Sun Network and
materials relating to the offer and sale of the Sun Network Shares which have
been requested by such Member. Such Member and his, her or its advisor, if any,
has been afforded the opportunity to ask questions of Sun Network and has
received complete and satisfactory answers to any such inquiries.
Such Member understands that his, her or its investment in the Sun Network
Shares involves a high degree of risk.
The Members understand that no United States federal or state agency or any
other government or governmental agency has passed on or made any recommendation
or endorsement of the Sun Network Shares.
Such Member acknowledges that: (i) the Sun Network Shares have not been and
are not being registered under the provisions of the Securities Act and may not
be transferred unless (A) subsequently registered thereunder or (B) such Member
has delivered to Sun Network an opinion of counsel, reasonably satisfactory in
form, scope and substance to Sun Network, to the effect that the Sun Network
Shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; and (ii) any sale of the Sun Network Shares
made in reliance on Rule 144 promulgated under the Securities Act may be made
only in accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Sun Network Shares under circumstances in which
the seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the Securities Act, may require compliance
with some other exemption under the Securities Act or the rules and regulations
of the Securities and Exchange Commission ("SEC") promulgated thereunder.
Such Member acknowledges and agrees that until such time as the Sun Network
Shares have been registered under the Securities Act, the Sun Network Shares
shall bear a restrictive legend in substantially the following form:
THESE SECURITIES (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SUN NETWORK
Sun Network represents and warrants to the Members as follows:
Organization and Good Standing. Sun Network is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and is in good standing as a foreign corporation in each other
jurisdiction where the properties owned, leased or operated or the business
conducted by it requires such qualification.
Registered Securities. Sun Network's common stock is registered with the
United States Securities and Exchange Commission pursuant to Section 12(g) of
the Securities and Exchange Act of 1934, as amended. Sun Network has 5 million
authorized shares of its common stock.
Listed Securities. Sun Network's common stock is listed on the OTC-BB, the
Berlin Stock Exchange, and the Frankfort Stock Exchange.
Corporate Authority. Sun Network has full authority to execute and to
perform this Agreement in accordance with its terms; the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
does not and will not result in a breach, violation or default or give rise to
an event which, with the giving of notice or after the passage of time, would
result in a breach, violation or default of any of the terms or provisions of
Sun Network's Certificate of Incorporation, By-Laws or of any indenture,
agreement, judgment, decree or other instrument or restriction to which Sun
Network is a party or by which Sun Network, Sun Network Shares or any of its
assets may be bound or affected; the execution and delivery of this Agreement
have been and, as of the Closing Date, the consummation of the transactions
contemplated hereby will have been, duly authorized, and no authorization or
approval, whether of the Members or directors of Sun Network or of governmental
bodies or otherwise, will be necessary in order to enable Sun Network to enter
into and perform same; and this Agreement constitutes a valid and binding
obligation enforceable against Sun Network in accordance with its terms.
Brokers. There has been no broker or finder involved in any manner in the
negotiations leading up to the execution of this Agreement or the consummation
of any transactions contemplated hereby.
No Untrue Representation or Warranty. No representation or warranty made by
Sun Network contained in this Agreement or any attachment, statement, schedule,
exhibit, certificate or instrument furnished or to be furnished to the Members
by Sun Network pursuant hereto, or otherwise furnished in writing by Sun Network
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
any material fact necessary to make the statements contained herein or therein
not misleading.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
Termination at Closing. The representations and the warranties of Sun
Network shall expire, merge and terminate at Closing. The representations and
warranties of the Members shall survive for a period of one year following the
Closing Date.
Indemnity by the Members Against Claims.
The Member owning 97.7778% of the membership units hereby agrees to
indemnify and hold Sun Network harmless from and against the follow-ing:
Any and all liabilities, losses, damag-es, claims, costs, taxes and
expenses of Aventura of any nature, whether abso-lute, contingent or otherwise,
which are not specifically disclosed to Sun Network in this Agreement or the
Schedules thereto;
Any and all liabilities, losses, damag-es, claims, costs and reasonable
expenses suffered by Sun Network- (whet-her awarded against Sun Network or paid
by Sun Network- in settlement of a claim or other-wise suffered), result-ing
from any misrepre-senta-tion, breach of any warran-ty, or non-fulfillment of any
covenant or agreement on the part of the Members con-tained in this Agree-ment
or in any written state-ment, at-tach-ment, sched-ule, exhibit or certificate
furnished or to be furnished by Aventura or the Members to Sun Network pursu-ant
hereto or in connec-tion with the trans-actions contem-plat-ed hereby; and
Any and all actions, suits, proceedings, demands, assessments or judgments,
costs and reasonable expenses (includ-ing reasonable attorneys' fees) inci-dent
to any of the foregoing.
Notice of Claim, Assumption of Defense and Settlement of Claims.
Any person entitled to indemnification under this Agreement (the
"Indemnitee") shall promptly give notice (an "Indemnification Notice") in
accordance with Section 11.1 hereof to the parties required to provide
indemnification (collectively the "Indemnifying Party") after the Indemnitee
shall have knowledge of any demands, claims, actions or causes of action
(singly, a "Claim" and hereinafter referred to collectively, as "Claims") which
might give rise to a Claim by the Indemnitee against the Indemnifying Party
stating the nature and basis of said Claim and amount thereof, to the extent
known. A failure to give notice hereunder shall not relieve the Indemnifying
Party from any obligation hereunder unless (x) such failure to give notice shall
materially and adversely affect the Indemnifying Party's ability to defend
the Claim; or (y) notice is received after the expiration of the applicable
survival period specified in this Agreement. Each such Indemnification Notice
shall specify in reasonable detail the nature and amount of the Claim and shall,
to the extent available to the Indemnitee, include such supporting documentation
as shall reasonably be necessary to apprise the Indemnifying Party of the facts
giving rise to the Claim. After the delivery of an Indemnification Notice
certifying that the Indemnitee has incurred or had asserted against it any
liabilities, claims, losses, damages, costs or expenses for which indemnity may
be sought in accordance with the terms of this Article VII (the "Damages"), the
Indemnitee shall make a claim in an amount equal to the incurred Damages or
asserted Damages, as the case may be (which, in the case of any asserted Damages
shall include the Indemnitee's reasonably estimated cost of the defense thereof,
hereinafter the "Estimated Defense Costs") and the Indemnifying Party shall
promptly reimburse the Indemnitee for the Damages for which the Indemnitee has
incurred and not been indemnified. In the event the Indemnifying Party shall
dispute the nature or amount of the Damages asserted, any such dispute shall be
resolved in accordance with the dispute resolution provisions contained in
Section 6.4 herein.
With respect to any third party Claims made subsequent to the Closing Date,
and prior to the expiration of the applicable survival period, the following
procedures shall be observed:
Promptly after delivery of an Indemnification Notice in respect of a Claim,
the Indemnifying Party may elect, by written notice to the Indemnitee, to
undertake the defense thereof with counsel reasonably satisfactory to the
Indemnitee and at the sole cost and expense of the Indemnifying Party. In the
event the Indemnifying Party elects to assume the defense of any such Claim, it
shall not, except as provided in Section 7.4(b)(ii) be liable to the Indemnitee
for any legal fees, costs and expenses incurred by the Indemnitee after the date
thereof, in connection with such defense. The Indemnitee shall have the right to
participate in, but not control the conduct of, any such action through counsel
of its own choosing, at its own expense.
Unless and until the Indemnifying Party assumes the defense of the third
party Claim as provided in Section 7.4(b) (i), or in the event the Indemnifying
Party ceases to diligently conduct such defense, the Indemnified Party may
defend against the third party Claim in any manner it reasonably may deem
appropriate, at the expense of the Indemnifying Party.
Failure by the Indemnifying Party to notify the Indemnitee of its election
to defend any such action within 45 days after notice thereof shall have been
given shall be deemed a waiver by the Indemnifying Party of its right to defend
such action. If the Indemnifying Party assumes the defense of any such Claim,
its obligations hereunder as to such Claim shall be limited to taking all steps
necessary in the defense or settlement of such Claim and to holding the
Indemnitee harmless from and against any and all losses, damages, expenses and
liabilities awarded in any such proceeding or arising out of any settlement
approved by the Indemnifying Party or any judgment in connection with such
Claim.
The Indemnifying Party shall not, in the defense of any such Claim, consent
to the entry of any judgment or enter into any settlement with respect to the
third party Claim without the prior written consent of Indemnitee (which consent
shall not be unreasonably withheld, conditioned or delayed), except that no
consent of the Indemnitee shall be required if the judgment or proposed
settlement (x) involves only the payment of money damages to be paid by the
Indemnifying Party and does not impose any injunction or other equitable relief
upon the Indemnitee, (y) includes as an unconditional term thereof a full
dismissal of the litigation or proceeding with prejudice and the delivery by the
claimant or plaintiff to the Indemnitee of a release from all liability with
respect to such claim or litigation, and (z) does not by its terms attribute
liability to the Indemnitee.
In no event will the Indemnitee consent to the entry of any judgment or
enter into any settlement with respect to the third party Claim without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
The Indemnitee will cooperate fully with the Indemnifying Party in the
conduct of any proceeding as to which the Indemnifying Party assumes the defense
hereunder. Such cooperation shall include (a) providing the Indemnifying Party
and its counsel access to all books and records of the Indemnitee to the extent
reasonably related to such proceeding, (b) furnishing information about the
Indemnitee to the Indemnifying Party and their counsel, (c) making employees
available to counsel to the Indemnifying Party, and (d) preserving the existence
of and maintaining all books and records of the Indemnitee that may reasonably
be deemed to be potentially relevant to any such proceeding until the proceeding
is finally concluded.
Dispute Resolution. In the event a dispute arises under this Agreement,
such disputes shall be resolved in the manner set forth in this Section 6.4.
If a dispute arises under this Agreement, Sun Network and the Members may
invoke the dispute resolution procedure set forth in this Section 6.4 by giving
written notice to the other party. The parties shall enter into discussions
concerning this dispute. If the dispute is not resolved as a result of such
discussion in 10 days, an attempt will be made to resolve the matter by a formal
nonbinding mediation with an independent neutral mediator agreed to by the
parties. If the parties cannot agree on a mediator within a period of 10 days
after expiration of the 10 day period for resolution by discussion, then either
party may apply to any court of competent jurisdiction for appointment of a
mediator, which appointment shall be binding and nonappealable. Upon
commencement of the mediation process, the parties shall promptly communicate
with respect to a procedure and schedule for the conduct of the proceeding and
for the exchange of documents and other information related to the dispute. The
mediation process shall be deemed ended if the dispute has not been resolved
within 30 days after appointment of the mediator.
All claims, disputes or other matters in question between the parties to
this Agreement arising out of or relating to this Agreement which are not
resolved by mediation in accordance with Section 6.4(a) within 30 days after
appointment of the mediator shall be submitted for, subject to and decided by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association currently in effect as of the date of this Agreement
("AAA Rules"), except to the extent those rules are inconsistent with this
Section 6.4. Any arbitration must be held in Los Angeles County, California by
a single arbitrator mutually selected by the parties hereto or, if the parties
hereto cannot agree on the appointment of such arbitrator within 10 days
following the date notice of the dispute is given by a party to the adverse
party, an arbitrator selected according to the AAA Rules. The arbitrator's
award shall be final, conclusive and binding upon all parties to this Agreement,
and judgment may be entered upon it in accordance with the Federal Arbitration
Act in any court of general jurisdiction or any United States District Court in
the state in which the arbitration is held. The arbitrator shall be required to
provide in writing to the parties the basis for the award or order of such
arbitrator, and a court reporter shall record all hearings (unless otherwise
agreed to by the parties), with such record constituting the official transcript
of such proceedings. Sun Network and the Members specifically desire this
Arbitration clause to be governed by the United States Federal Arbitration Act,
and not by the arbitration laws of any state.
In the event of arbitration filed or instituted between the parties
pursuant to this Section 6.4, the prevailing party will be entitled to receive
from the adverse party all costs, damages and expenses, including reasonable
attorney's fees, incurred by the prevailing party in connection with that action
or proceeding, whether or not the controversy is reduced to judgment or award.
The prevailing party will be that party who is determined by the arbitrator to
have prevailed on the major disputed issues.
Limitations on Liability.
The obligations of the Indemnifying Party with respect to any indemnifiable
Claim are subject to the limitation that an Indemnitee may not make or
bring any claim against an Indemnifying Party in respect of any such
indemnifiable Claim unless the aggregate amount of all indemnifiable damages
from time to time incurred by all Indemnitees collectively exceeds Twenty Five
Thousand Dollars ($25,000) (the "Basket Amount"). Once the aggregate amount
exceeds the Basket Amount, then the aggregate amount of Damages shall be
indemnifiable.
The parties to this Agreement agree that indemnifiable Claims arising under
this Agreement shall be limited to Five Hundred Thousand Dollars ($500,000)
Right to Set Off. Notwithstanding anything to the contrary set forth in
this Agreement or any Schedule hereto, in the event that Sun Network shall have
a Claim against the Members for which Sun Network has not been fully and
completely indemnified as contemplated above, Sun Network shall have the right
to set off the amount of such Claim against the Members, against any amounts due
to the Members hereunder or other-wise.
Remedies Cumulative. The remedies provided to an Indemnified Party herein
shall be cumulative and shall not preclude an Indemnified Party from asserting
any other rights or seeking any other remedies against an Indemnitor or his or
its respective heirs, successors or assigns. The asser-tion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent or
subsequent assertion or employment of any other appropriate right or remedy.
ARTICLE VII
COVENANTS
Due Diligence Investigation by Sun Network. During the period from the
date of this Agreement to and including the Closing Date, the Members shall
cause Sun Network to be given free access at reasonable times and during normal
business hours, to the offices, plants, records, files, minute books, books of
account and copies of tax returns of Aventura for the purpose of conducting an
investigation of the financial condition, legal status, liabilities, contracts,
sales, administration, business operations, property and title thereto,
litigation, patents, trademarks, copyrights and all other matters relating to
the business, properties and assets of Aventura, through Sun Network's
employees, independent accountants or other outside consultants. Sun Network
shall cause Aventura's personnel to reasonably assist Sun Network in making such
investigation. During such investigation, Sun Network shall have the right
to make copies of such records, files, tax returns and other materials as it may
deem advisable.
Due Diligence Investigation by Aventura. During the period from the date of
this Agreement to and including the Closing Date, Sun Network shall cause
Aventura to be given free access at reasonable times and during normal business
hours, to the offices, plants, records, files, minute books, books of account of
Sun Network for the purpose of conducting an investigation of the financial
condition, legal status, liabilities, contracts, sales, administration, business
operations, property and title thereto, litigation, patents, trademarks,
copyrights and all other matters relating to the business, properties and assets
of Sun Network, through Aventura's employees, independent accountants or other
outside consultants. Sun Network shall cause its personnel to reasonably assist
Aventura in making such investigation. During such investigation, Aventura
shall have the right to make copies of such records, files, tax returns and
other materials as it may deem advisable.
ARTICLE VIII
PERFORMANCE FOLLOWING THE CLOSING DATE
Use of Proceeds. The Members agree and covenant to cause Newco to
exclusively use the cash proceeds in Sun Network, following the Closing Date for
the general, investment and administrative expenses of Newco.
Reservation of Shares. The Members agree and covenant to cause Newco to
reserve the initial sum of $17,000 following the Closing Date for issuance and
payment to third parties for investor relations work to be performed on behalf
of Newco, as may be directed by the Sun Network Representative.
Transfer of Assets. In full consideration for the full forgiveness of any
and all Shareholder Loans of Sun Network, Newco shall irrevocably assign,
transfer and convey to the designee of Sun Network and the Shareholder, upon the
Closing Date, all right, title and ownership to all the Sun Network Assets as
more fully described in Schedule 5.0.
Assumption of Financing Agreement. The Members agree that it shall fully
assume and fully perform all terms and conditions of the Financing Agreement
attached hereto as Schedule 6.0. In the event that, after the Closing Date,
additional shares are required to be issued by Sun Network under the Financing
Agreement, then the Members shall be entitled to receive, and may issue, in
addition to the Sun Network Shares issued under paragraph 2.2 herein, an amount
of shares equal to a multiple of 5 times the number of shares required to be
issued under the Financing Agreement, beyond the initial shares.
Board Membership. The Members agree and covenant to nominate, or cause to
be nominated immediately following the Closing Date, a slate of three directors,
including a minimum of one director that qualifies as independent as defined in
Section 10 of the Investment Company Act of 1940.
Name Change. The Members agree and covenant to cause the name and trading
symbol of Sun Network to be changed immediately after the Closing Date.
Restriction on Share Issuances. The Members agree and covenant that for a
period of 12 months after the Closing Date, Newco will not issue shares of its
common stock representing greater than 5% of its then outstanding common stock
without the prior written authorization of the representative of Sun Network;
provided, however, that this limitation shall not apply to stock issuances made
by Newco in order to raise capital directly for the purchasing and maintaining
of its inventory deposits.
Restriction of Stock Splits. The Members agree and covenant that for a
period of 6 months after the Closing Date, Newco will not "split" its common
stock price in any manner without the approval and authorization the Sun Network
Representative.
Further Assurances. Each of the parties hereto agrees and covenants that,
at any time after the Closing Date, upon the request of the other, they will do,
execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acknowledgments, deeds,
assignments, bills of sale, transfers, conveyances, instruments, consents and
assurances as may reasonably be required for the better assuring and confirming
to the other, its successors and assigns, absolute ownership to the respective
shares to be sold hereunder.
Cooperation. The parties agree and covenant to cooperate with each other
fully with respect to actions required or requested to be undertaken with
respect to tax audits, administrative actions or proceedings, litigation and any
other matters that may occur after the Closing Date, and each party agrees and
covenants to maintain and make available to the other party upon request all
corporate, tax and other records reasonably required or requested in connection
with such matters.
ARTICLE IX
CONDUCT OF BUSINESS PENDING THE CLOSING
Between the date hereof and the Closing, and except as otherwise expressly
consented to in writing in advance or approved in writing in advance by Sun
Network:
Certain Changes. Except as permitted by this Agreement, without the prior
written consent of Sun Network, the Members agree and covenant that Aventura
shall not:
Borrow or agree to borrow any funds or incur, or assume or become subject
to, whether directly or by way of guarantee or otherwise, any material
obligation or liability (absolute or contingent);
Pay, discharge or satisfy any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than the payment, discharge
or satisfaction in the ordinary course of business and consistent with past
practice of liabilities or obligations reflected or reserved against in the
Balance Sheet or thereafter incurred in accordance with this Agreement;
Prepay any obligation having a fixed maturity of more than 90 days from the
date such obligation was issued or incurred;
Permit or allow any of its material property or assets (real, personal or
mixed, tangible or intangible) to be subjected to any lien;
Cancel any material debts or waive any claims or rights or sell, transfer,
or otherwise dispose of any of its properties or assets;
Grant any material increase in the compensation of officers or employees,
institute or amend any sales compensation plan, severance plan or other
arrangement for its officers or employees, or enter into any plan or agreement
with respect thereto;
Make any capital expenditures or commitments for additions to or
replacement of property, plant, equipment or intangible capital assets;
Pay, loan or advance any material amount to, or sell, transfer or lease any
material properties or assets to, or enter into any agreement or arrange with,
any of its employees, officers or directors or any affiliate thereof, except for
directors fees and compensation to employees, officers or directors at rates not
exceeding rates consistent with prior years;
Issue, or grant any options with respect to the issuance of, any shares of
its capital stock, or purchase shares of capital stock or make any equity
investment in, or agree to purchase or make any equity investment in, any other
entity, corporate or otherwise;
Declare, set aside or pay any dividend or other distribution of any assets
of any kind whatsoever with respect to any shares of the capital stock of
Aventura, or redeem, purchase or otherwise acquire, directly or indirectly, any
shares of the capital stock of Aventura; or
Agree, whether in writing or otherwise, to do any of the foregoing.
Contracts. The Members agree and covenant that Aventura shall not to enter
into any contract or commitment, or purchase any supplies or services or sell
any assets, except normal contracts or commitments for the purchase of, and
normal purchases of, supplies or services made in the usual and ordinary course
of business, consistent with the past practice of Aventura, and not in violation
of any other more restrictive provision of this Article IX. In addition,
and not in limitation of the foregoing, the Members agree to not cause Aventura
to take any actions to modify or amend any of the documents comprising Assets
without the express prior written consent of Sun Network.
Insurance: Property. The Members agree and covenant to cause Aventura to
maintain adequate insurance against all ordinary and insurable risks with
respect to all property, real, personal and mixed, owned or leased by them; and
all such property shall be used, operated, maintained and repaired in a careful
and reasonably efficient manner.
Maintain Books. The Members agree and covenant to cause Aventura to
maintain its books, accounts and records in accordance with generally accepted
accounting principals applied on a basis consistent with prior years
Consents and Waivers Without Any Condition. The Members agree and covenant
that Aventura shall not enter into any agreement or understanding, not earlier
approved in writing by Sun Network.
ARTICLE X
TERMINATION AND ABANDONMENT
Methods of Termination. The transactions contemplated herein may be
terminated and/or abandoned at any time, but not later than on the Closing Date:
By mutual written agreement of Sun Network and the Members;
By Sun Network or the Members if the Closing shall not have occurred on or
prior to June 9, 2005;
By Sun Network in its sole discretion from the date of this Agreement to
and including the date 10 business days from the date of this Agreement, but no
later than the Closing Date, if any schedule delivered by the Members annexed to
or other representation made by them herein, contains a misstatement or omission
that could reasonably be determined by Sun Network to have an effect that is
mutually adverse to the business, clients, properties, results of operations or
financial condition of Aventura.
Procedure upon Termination. In the event of termination and abandonment
pursuant to Section 10.1 hereof, written notice thereof shall forthwith be given
to the other parties hereto and the transactions contemplated by this
Agreement shall be terminated and/or abandoned without further action by Sun
Network or the Members. If the transactions contemplated by this Agreement are
terminated/or abandoned as provided herein, each party will redeliver all
documents, work papers and other material of any other party relating to the
transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same. No party hereto who shall
have satisfied in full all of the obligations of such party under this Agreement
which were to have been satisfied by such party prior to the Closing and who
shall have not breached any representation, warranty, covenant or agreement of
such party contained in this Agreement shall have any liability or further
obligation to any other party to this Agreement.
ARTICLE XI
GENERAL PROVISIONS
Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered personally, sent by telex or
facsimile transmission or sent by certified, registered or express trail,
postage prepaid. Any such notice shall be deemed given when so delivered
personally or when sent by facsimile transmission or, if mailed by certified or
registered mail, 10 days after the date of deposit in the United States mail,
postage prepaid, if addressed:
In the case of Sun Network:
Sun Network Group, Inc.
5670 Wilshire Blvd
Suite 1300
Los Angeles, CA. 90036
Attention: T. Joseph Coleman
Facsimile: 928-223-4637
(b) In the case of the Members:
Craig A. Waltzer
Aventura Networks, LLC
2025 NE 198th Terrace
Miami, FL 33179
Facsimile:305-402-2832
with a copy to:
M.J. Ejenbaum, PA
12865 West Dixie Highway
North Miami, Florida 33161
Facsimile 305-891-2172
or to such other address or to such other person as Sun Network or the Members
shall have last designated by written notice given as herein provided.
Modification. This Agreement and the Exhibits and Schedules annexed hereto
contain the entire agreement between the parties hereto and there are no
agreements, warranties or representations that are not set forth herein. All
prior negotiations, representations, warranties, agreements and understandings
are superseded hereby. This Agreement may not be modified or amended except by
an instrument in writing duly signed by or on behalf of the parties hereto and
dated on or subsequent to the date hereof.
Governing Law and Dispute Resolution. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Florida
applicable to agreements made and to be performed entirely within the State. The
Members hereby irrevocably consent and submit to the jurisdiction of any Florida
State or Federal court located in Miami Dade County over any action or
proceeding arising out of any dispute between the Members and Sun Network and
irrevocably agree, in this regard, not to commence any action or proceeding
arising out of any dispute between Sun Network and/or the Members in any other
jurisdiction. The Members further irrevocably consent to the service of process
in any such action or proceeding by the mailing of a copy of such process to
them at the address set forth above.
Binding Effect; Assignment. This Agreement shall be binding upon the
parties and inure to the benefit of the successors and assigns of the respective
parties hereto; provided, however, that this Agreement and any and all rights
hereunder may not be assigned by the Members without the prior written consent
of Sun Network, which may be withheld for any reason.
Counterparts. This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Paragraph Headings. The paragraph headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
Transaction Expenses. Notwithstanding anything else in this Agreement to
the contrary, the parties hereto shall each be responsible for the payment of
any and all of its, his or her own expenses, including without limitation, the
fees and expenses of counsel and other advisers, arising out of or relating
directly or indirectly to the transactions contemplated by this Agreement,
whether or not such transactions are consummated in whole or in part, except for
accounting and audit expenses which shall be borne by Aventura post Closing.
Waiver. The waiver of one breach or default hereunder shall not constitute
the waiver of any other or subsequent breach or default.
No Agency. This Agreement shall not constitute any party the legal
representative or agent of the other, nor shall any party have the right or
authority to assume, create, or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the other
party.
Entire Agreement. This Agreement sets forth the entire understanding of the
parties hereto relating to the subject matter hereof and thereof and supersedes
all prior agreements and understanding among or between any of the parties
relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
the day and date first above written.
SUN NETWORK GROUP, INC. THE MEMBERS:
/s/ Craig A. Waltzer
_______________________________
Craig A. Waltzer
By: /s/T. Joseph Coleman
__________________________
T. Joseph Coleman
President
97.7778% Membership Interest
LIST OF SCHEDULES AND EXHIBITS
1.1 (b) Receivables
1.1 (c) Fixed Assets
1.1 (d) Contracts
1.1 (e) Intellectual Property
4.3 Liens on Membership Interests
4.4(a) Intellectual Property of Aventura
4.5(b) Title Defects
4.7 Material Agreements
4.9 Changes
4.10 Litigation
4.11 Taxes
4.12 Salaries
4.13 Non-Compete and Confidentiality
5.0 Sun Network Assets List
6.0 Financing Agreement
7.0 Sun Network Corporate Resolution and Board Resignations
SCHEDULE I
LIST OF MEMBERS
NAME MEMBERSHIP INTEREST
____Aventura Holdings, Inc_____________________________ 97.7778%____%