UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  July 18, 2014

 

PAYMEON, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

000-53574

20-4959207

(State or other
jurisdiction of
incorporation

(Commission File Number)
Identification No.

(IRS Employer

 

1040 Seminole Drive, #763, Fort Lauderdale, Florida  33304

(Address of principal executive offices) (Zip Code)

800-991-4534

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 





 


ITEM 1.01

ENRTY INTO A MATERIAL DEFINITIVE AGREEMENT

Effective July 18, 2014 the Company entered into and completed two membership interest purchase agreements to acquire a 19.4% equity interest in Prodeco Technologies, LLC, a private manufacturer of electric bicycles under the brand “Prodeco” with manufacturing facilities located in Oakland Park, Florida. Prodeco Technologies was organized under the laws of the State of Florida in June 2012. The Prodeco Technologies membership interests were acquired through the acquisition of all of the issued and outstanding membership interests of A Better Bike, LLC and EBikes, LLC, members of Prodeco Technologies, LLC. A Better Bike, LLC is owned by Vincent L. Celentano, the Company’s largest individual shareholder. EBikes is owned by Vincent D. Celentano, II. In consideration of the acquisition of all of the issued and outstanding membership interests of A Better Bike and EBikes, the Company issued an aggregate of 2,941,176 restricted shares of its common stock to the members of A Better Bike and EBikes. For accounting purposes the transactions are recorded at their historical cost.

 

Also effective July 18, 2014, the Company issued an aggregate of 2,494,241 shares of restricted common stock to Celentano Consulting Company, LLC, pursuant to the conversion of certain 7% unsecured convertible promissory notes (the “Notes”) held by Celentano Consulting Company in the aggregate principal amount and accrued interest through July 18, 2014 of $860,513. Celentano Consulting Company, LLC, an affiliate of the Company, is beneficially owned by Vincent L. Celentano. The Notes were convertible at $0.345 per share at the option of the holder.

 

The membership interest purchase agreements are incorporated herein by reference and a form of such agreement is filed as an exhibit to this Form 8-K. The description of the transactions contemplated by each membership purchase agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the exhibit filed herewith and incorporated by this reference.


ITEM 2.01

COMPLETION OF AN ACQUISITION OR DISPOSITION OF ASSETS


The information provided under Item 1.01 is incorporated herein by reference.


ITEM 3.02

UNREGISTERED SALES OF EQUITY SECURITIES


As more fully described in Item 1.01 above, the Company issued 2,941,176 shares of common stock to the members of A Better Bike,LLC and EBikes, LLC in consideration of the acquisition of A Better Bike, LLC and EBikes, LLC. In addition, the Company issued an aggregate of 2,494,241 shares of its restricted common stock to Celentano Consulting Company, LLC, pursuant to the conversion of the Notes. The shares of common stock were issued under the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. The shares contain a legend restricting transferability absent registration or applicable exemption. Following these transactions, on July 21, 2014, the Company has issued and outstanding approximately 11,408,105 shares of common stock.






 


ITEM 5.02

DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS


As previously disclosed, effective August 15, 2011, the Company entered into an executive employment agreement with Edward Cespedes to serve as the Company’s chief executive officer. The agreement provided for an initial base salary of $250,000 per year and a minimum annual bonus of $50,000, and up to $200,000 depending on the Company’s annual revenues. Effective July 18, 2014, Mr. Cespedes voluntarily amended his employment agreement with the Company. The amendment provides for a revised base salary of $175,000 per year and an annual bonus payable at the Company’s discretion. The amendment also provides for reductions in certain termination payments. In conjunction with the amendment to his employment agreement, Mr. Cespedes voluntarily agreed to forgive $326,729 of accrued but unpaid compensation owed to him by the Company. The amendment is incorporated herein by reference and is filed as an exhibit to this Form 8-K. The description of the transactions contemplated by the amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the exhibit filed herewith and incorporated by this reference.


ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

(d)

Exhibits.

Exhibit No.

 

Description

 

 

 

10.1

 

Membership Interest Purchase Agreement dated July 18, 2014, A Better Bike, LLC

10.2

 

Membership Interest Purchase Agreement dated July 18, 2014, EBIKES, LLC

10.3

 

Amendment to Edward Cespedes Executive Employment Agreement dated July 18, 2014







 


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



 

PAYMEON, INC.

 

 

 

/s/ Edward Cespedes

 

Edward Cespedes

 

Chief Executive Officer

 

July 22, 2014











EXHIBIT 10.1


MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

THIS AGREEMENT is made effective the 18th day of July, 2014, among PAYMEON, INC., a Florida corporation (“PAYM” or the “Buyer”), and Vincent L. Celentano (“Seller”).

 

BA C K G R O U N D

 

A.

The Buyer desires to acquire one hundred percent (100%) of the Membership Interests of A Better Bike, LLC, a Florida limited liability company (the “ABBLLC Membership Interests”) and the Seller desires to sell all right and title to the ABBLLC Membership Interests in exchange for the Purchase Consideration (see Section 2).


B.

ABBLLC owns 15.4 percent (15.4%) of the Membership Interests (the “ProTech Membership Interests”) of Prodeco Technologies, LLC, a Florida limited liability company (“ProTech”).


C.

ABBLLC’s sole current purpose is to hold the Membership Interests of ProTech and its sole asset is the ProTech Membership Interests.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.

Sale Agreement .  Subject to the terms and conditions of this Agreement, the Buyer agrees to purchase and the Seller agrees to sell the ABBLLC Membership Interests.  Absolute ownership of the Membership Interests will be transferred to the Buyer on the Closing Date free and clear of all liens, claims and encumbrances.  

 

2.

Purchase Consideration .  The total Purchase Consideration to be paid by the Buyer to the Seller for the purchase of the ABBLLC Membership Interests is Two Million Three Hundred Thirty Four Thousand Seven Hundred Forty-Eight (2,334,748) shares of PAYM restricted common stock.


3.

Representations and Warranties of Seller .  As an inducement to the Buyer to enter into this Agreement, the Seller represents and warrants to the Buyer that as of the date of this Agreement and the Closing Date:

 

3.1.

Absence of Liabilities .  ABBLLC currently has no debt, liability, obligation or commitment, absolute or contingent, known or unknown, relating to or connected with the ProTech Membership Interests.  ABBLLC has no other assets or liabilities, except for the ProTech Membership Interests, which represent a 15.4% interest in ProTech.  

 

3.2.

Title to Membership Interests .  The Seller owns, possesses and has good and marketable title to the ABBLLC Membership Interests free and clear of all liens, leases, pledges, charges, encumbrances, equities, covenants, conditions, restrictions or claims of every nature and kind whatsoever.  ABBLLC owns the ProTech Membership Interests free and clear of all liens, leases, pledges, charges, encumbrances, equities, covenants, conditions, restrictions or claims of every nature and kind whatsoever.

 

3.3.

Legal Requirements .  The Seller has all requisite power, authority and approvals to transfer ownership of the ABBLLC Membership Interests.  The Seller is the sole Member



1



of ABBLLC and ABBLLC is in good standing with the State of Florida and has complied and will continue to comply with all applicable federal, state or local statutes, laws and regulations, if any, with respect to its operations and ownership of the ProTech Membership Interests.

 

3.4.

Consents and Approvals .  Other than in compliance with the provisions of applicable statutes and regulations, no notice to, filing with, or authorization, consent or approval of, any domestic or foreign public body or authority is necessary for the consummation of the transactions contemplated by this Agreement.  The execution, delivery, performance and consummation of this Agreement does not and will not:  (a) violate, conflict with or constitute a default or an event that, with notice or lapse of time or both, would be a default, breach or violation under any term or provision of any instrument, agreement, contract, commitment, license, promissory note, conditional sales contract, indenture, mortgage, deed of trust, lease or other agreement, instrument or arrangement to which the ABBLLC or Seller is a party or by which the Seller or ABBLLC, or the ABBLLC Membership Interests or ProTech Membership Interests are bound; (b) violate, conflict or constitute a breach of any statute, regulation or judicial or administrative order, award, judgment or decree to which the Seller or ABBLLC is a party or to which the Seller or ABBLLC, or the ABBLLC Membership Interests or ProTech Membership Interests are bound or subject; or (c) result in the creation or imposition of any adverse claim or interest, or any lien, encumbrance, charge, equity or restriction of any nature whatever, upon or affecting the Seller or ABBLLC, or the ABBLLC Membership Interests or the ProTech Membership Interests.  The  sole manager of the Seller has consented to the sale of the ABBLLC Membership Interests and this Agreement.  The sale of the ABBLLC Membership Interests does not require the approval or consent of ProTech.

 

3.5.

Litigation .  There is no:  (a) action, suit or proceeding pending or threatened against the Seller, ABBLLC, the ABBLLC Membership Interests or the ProTech Membership Interests; or (b) proceeding, investigation, charges, audit or inquiry threatened or pending before or by any federal, state, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality which might result in an adverse effect on the Seller, ABBLLC or the ABBLLC Membership Interests or ProTech Membership Interests.

 

3.6.

Taxes .  There is no pending or known threatened claim against the Seller or ABBLLC for payment of any taxes arising from ABBLLC’s operations or Seller’s ownership of the ABBLLC Membership Interests.  The Seller and ABBLLC have not executed any waiver of any statute of limitations against assessments of taxes.

 

3.7.

Authority .  The Seller and ABBLLC each has taken all necessary action to authorize the execution, delivery and performance of this Agreement and has adequate power, authority and legal right to enter into, execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  This Agreement is legal, valid and binding with respect to each of the Seller and ABBLLC and is enforceable in accordance with its terms.  On execution, delivery and performance of this Agreement in accordance with its terms, the Buyer will own one hundred percent (100%) of the ABBLLC Membership Interests free of all claims, liens, encumbrances and liabilities.

 

3.8.

Full Disclosure .  This Agreement, any schedule referenced in or attached to this Agreement, any document furnished to the Buyer under this Agreement or any certification furnished to the Buyer under this Agreement does not contain any untrue



2



statement of a material fact and does not omit to state a material fact necessary to make such statement, in the circumstances under which it was made, not misleading.  All of the representations, warranties and covenants in this Agreement:  (a) are true and correct as of the date made; (b) will be true and correct as of the Closing Date; and (c) will survive and not be waived, discharged, released, modified, terminated or affected by any due diligence by the Buyer.  For purposes of this Agreement, when a statement is qualified by the phrase “to the best knowledge of the Seller,” such phrase means: (y) the actual knowledge of the Seller; and (z) the knowledge which the Seller, in the exercise of reasonable diligence, could obtain.


3.9

Due Diligence :  The Seller and its sole member/manager and representatives are Accredited Investors (as such term is defined under the Securities Act of 1933, as amended) and have reviewed the public filings of PAYM, including PAYM’s annual report on Form 10-K for the year ended December 31, 2013 and PAYM’s most recent quarterly report on Form 10-Q for the period ended March 31, 2014.  The Seller’s manager and representatives have been given the opportunity to conduct satisfactory due diligence of PAYM, and have been given the opportunity to speak with PAYM management during their due diligence.

 

4.

Representations and Warranties of PAYM .  PAYM has taken all necessary action to authorize the execution, delivery and performance of this Agreement and has adequate power, authority and legal right to enter into, execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  This Agreement is legal, valid and binding with respect to PAYM and is enforceable in accordance with its terms.


5.

Conditions to Closing .  Prior to the Closing Date, the Buyer and Seller will take all necessary steps to ensure the proper transfer of the ABBLLC Membership Interests at closing in compliance with the operating agreement of A Better Bike, LLC.  


6.

The Closing .  This Agreement will be consummated at _____________ local time at the offices of PayMeOn, Inc or such other mutually agreeable location in Fort Lauderdale, Florida on the later of the following dates (the “Closing Date”):  the first business day following the day on which the last of the conditions set forth in Section 5 hereof is satisfied or waived which in no event shall be later than ________________.

 

6.1.

The Buyer’s Deliveries .  On the Closing Date, the Buyer will deliver or cause to be delivered to the Seller the following items (all documents will be duly executed and acknowledged where required):

 

6.1.1.

Payment .  The Purchase Consideration.

 

6.1.2.

Evidence of Authority .  Such corporate resolutions and other evidence of authority with respect to the Buyer as might be reasonably requested by the Seller; and

 

6.1.3.

Additional Documents .  Such additional documents as might be reasonably requested by the Seller to consummate this Agreement.


6.2.

Seller’s Deliveries .  On the Closing Date, the Seller will deliver or cause to be delivered to the Buyer the following items (all documents will be duly executed and acknowledged where required):



3



 

6.2.1.

Assignment .  Bills of sale, assignments and conveyances acceptable to the Buyer necessary to convey to the Buyer all of the Seller’s right, title and interest in and to all of the ABBLLC Membership Interests;


6.2.2.

Consent and Approval .  ABBLLC and its sole member/manager shall provide written consent and/or approval of the transfer of the ABBLLC Membership Interests to Buyer; and

 

6.2.3.

Additional Documents .  Such additional documents as might be reasonably requested by the Buyer to consummate this Agreement.

 

7.

 Indemnification .  The parties agree to indemnify each other as follows:

 

7.1.

Seller’s Indemnification .  The Seller agrees to pay, defend, indemnify, reimburse and hold harmless the Buyer and the Buyer’s directors, officers, agents and employees (collectively, the “Buyer Indemnified Parties”) for, from and against any loss, damage, diminution in value, claim, liability, debt, obligation or expense (including interest, reasonable legal fees, and expenses of litigation and attorneys fees in enforcing this Agreement) incurred, suffered, paid by or resulting to any of the Buyer Indemnified Parties and which results from, arises out of or in connection with, is based upon, or exists by reason of:  (a) any breach or default in any representation or warranty of the Seller set forth in this Agreement or in the performance by the Seller of any covenant or obligation set forth in this Agreement; and (b) any claims, demands, violations, actions, assessments, taxes, penalties, fines, costs, expenses, obligations or other liabilities with respect to the ownership, operation or maintenance of the ABBLLC Membership Interests prior to the Closing Date.

 

7.2.

Buyer’s Indemnification .  The Buyer agrees to indemnify and hold harmless the Seller and the Seller’s officers, directors, managers, employees, agents and members (collectively, the “Seller Indemnified Parties”) against any loss, liability, deficiency, damage, expense or cost (including interest, reasonable legal fees and expenses of litigation and attorneys fees in enforcing this Agreement), whether or not actually incurred or paid that the Seller Indemnified Parties may suffer, sustain or become subject to, as a result of:  (a) any breach or default in any representation or warranty of the Buyer set forth in this Agreement or in the performance by the Buyer of any covenant or obligation set forth in this Agreement; and (b) any claim made by a third party with respect to the operation of the ABBLLC Membership Interests on or after the Closing Date.

 

7.3.

Limitation on Indemnification Obligations .  The parties’ indemnification obligations pursuant to the provisions of paragraph 7 are subject to the following limitations:

 

7.3.1.

Survival of Representations and Warranties .  No party can recover under paragraphs 7.1 or 7.2 unless a claim has been asserted by written notice, delivered to the other party on or prior to the date that is 6 months after the Closing Date.

 

7.3.2.

Indemnification Cap .  No party can recover under paragraphs 7.1 or 7.2 an amount in excess of Ten Thousand Dollars ($10,000).  The foregoing limitation shall not apply to recovery for breaches of the Representations and Warranties of



4



Organization, Existence, Good Standing, Power and Authority, and Enforceability.

 

7.4.

Other Remedies .  The remedies provided by this paragraph 7 are in addition to, and not in lieu of, such other remedies as may be available under applicable laws.  Without limitation, the Buyer is entitled to enforce this Agreement by specific enforcement without the necessity of demonstrating inadequacy of damages or irreparable harm.

 

7.5.

Payment .  Claims for indemnification involving the payment of money will be paid within ninety (90) days after written notification thereof.  Claims for indemnification involving amounts due to third parties will be promptly paid when due, subject to the right to contest the same in good faith.  Unpaid claims will incur interest at a floating rate of interest equal to the prime rate published from time to time in The Wall Street Journal.

 

8.

Termination .  This Agreement may be terminated and the transactions contemplated hereby may be abandoned by:  (a) mutual consent of the parties; (b) the Buyer, if the Buyer is not in default; (c) the Seller, if the Seller is not in default.  In the event of termination, written notice thereof will be given to the other party or parties specifying the provision pursuant to which such termination is made.  On termination pursuant to this paragraph 8, this Agreement will become void and have no effect and there will be no liability hereunder on the part of the Buyer or the Seller or any of their respective officers, directors, employees, agents, stockholders or principals.

 

9.

Default .  If a party fails to perform any obligation contained in this Agreement, the party claiming default will serve written notice to the other party specifying the nature of such default and demanding performance.  If such default has not been cured within ten (10) business days after receipt of such default notice, the non defaulting party will be entitled to exercise all remedies arising at law or in equity by reason of such default, including, without limitation, specific performance of this Agreement or any one or more of the provisions herein contained.


10.

Miscellaneous .  It is further agreed as follows:

 

10.1.

Time .  Time is of the essence of this Agreement.

 

10.2.

Notices .  Any notice, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given and received when delivered personally or by telefacsimile to the party designated to receive such notice, or on the date following the day sent by overnight courier, or on the third (3rd) day after the same is sent by certified mail, postage and charges prepaid, directed to the following addresses or to such other or additional addresses as any party might designate by written notice to the other parties:

 

 

If to PAYM:

 

 

Attention:  Chief Executive Officer

1040 Seminole Drive, #763

Fort Lauderdale, Fl  33304

 

 

 

 

 

 

 

 

 

 



5





 

With a copy to:

 

 

Brian Pearlman, Esq.

2200 Corporate Blvd NW

Boca Raton, Fl  33431

 

 

 

 

 

 

 

 

 

 

 

 

 

To the Seller:

 

 

Vincent L. Celentano, Manager

4314 Tranquility Drive

Highland Beach, Fl  33487 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With a copy to:

 

 

 

 

 

 

 

 

 

 

 

10.3.

Representations and Warranties .  The respective representations and warranties of the parties contained herein or in any certificates or other documents delivered prior to or at the Closing Date will not be deemed waived or otherwise affected by any investigation made by any party hereto.  Each and every such representation and warranty will survive the Closing Date and will not be terminated or extinguished for a period of six months after the Closing Date. 

 

10.4.

Cooperation .  Prior to and at all times following the termination of this Agreement the parties agree to execute and deliver, or cause to be executed and delivered, such documents and do, or cause to be done, such other acts and things as might reasonably be requested by any party to this Agreement to assure that the benefits of this Agreement are realized by the parties.

 

10.5.

Headings .  The paragraph headings contained in this Agreement are for reference purposes only and are not intended to affect in any way the meaning or interpretation of this Agreement.

 

10.6.

Entire Agreement .  This Agreement and any document executed in connection herewith on or after the date of this Agreement (the “Other Documents”) constitute the entire agreement between the parties with respect to the subject matter hereof and there are no agreements, understandings, warranties or representations except as set forth herein or in the Other Documents.

 

10.7.

Assignment .  It is agreed that the parties may not assign such party’s rights nor delegate such party’s duties under this Agreement without the express written consent of the other parties to this Agreement.  Notwithstanding the foregoing, the Buyer will be permitted to assign this Agreement for all or part of the ABBLLC Membership Interests to a wholly owned subsidiary provided the Buyer remains liable for the performance of this Agreement.



6



 

10.8.

Amendment .  Neither this Agreement, nor any of the provisions hereof can be changed, waived, discharged or terminated, except by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought.

 

10.9.

Severability .  If any clause or provision of this Agreement is illegal, invalid or unenforceable under any present or future law, the remainder of this Agreement will not be affected thereby.  It is the intention of the parties that if any such provision is held to be illegal, invalid or unenforceable, there will be added in lieu thereof a provision as similar in terms to such provisions as is possible and to be legal, valid and enforceable.

 

10.10.

Governing Law .  This Agreement will be interpreted, construed and enforced in accordance with the laws of the State of Florida, regardless of any applicable principles of conflicts of law.

 

10.11.

Attorney Fees .  If any party institutes an action or proceeding against any other party relating to the provisions of this Agreement, the party to such action or proceeding which does not prevail will reimburse the prevailing party therein for the reasonable expenses of attorneys’ fees and disbursements incurred by the prevailing party.

 

10.12.

Waiver .  Waiver of performance of any obligation or term contained in this Agreement by any party, or waiver by one party of the other’s default hereunder will not operate as a waiver of performance of any other obligation or term of this Agreement or a future waiver of the same obligation or a waiver of any future default.

 

10.13.

Counterpart Execution .  This Agreement may be executed in counterparts, including by telefacsimile, each of which will be deemed an original document but all of which will constitute a single document.

 

[Signature Pages Follow]

 



7




SIGNATURE PAGE TO MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, this Agreement has been executed by the parties effective the date first above written.

 

 

PAYMEON, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

 

 

 

SELLER

 

Vincent L. Celentano

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 





Consent and Acknowledgement:


A BETTER BIKE, LLC




By:

 

Name:  

Vincent L. Celentano

Its:  

Sole Member and Manager




8


EXHIBIT 10.2


MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

THIS AGREEMENT is made effective the 18th day of July, 2014, among PAYMEON, INC., a Florida corporation (“PAYM” or the “Buyer”), and Vincent D. Celentano, II. (“Seller”).

 

BA C K G R O U N D

 

A.

The Buyer desires to acquire one hundred percent (100%) of the Membership Interests of EBIKES, LLC, a Florida limited liability company (the “EBLLC Membership Interests”) and the Seller desires to sell all right and title to the EBLLC Membership Interests in exchange for the Purchase Consideration (see Section 2).


B.

EBLLC owns four percent (4.0%) of the Membership Interests (the “ProTech Membership Interests”) of Prodeco Technologies, LLC, a Florida limited liability company (“ProTech”).


C.

EBLLC’s sole current purpose is to hold the Membership Interests of ProTech and its sole asset is the ProTech Membership Interests.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.

Sale Agreement .  Subject to the terms and conditions of this Agreement, the Buyer agrees to purchase and the Seller agrees to sell the EBLLC Membership Interests.  Absolute ownership of the Membership Interests will be transferred to the Buyer on the Closing Date free and clear of all liens, claims and encumbrances.  

 

2.

Purchase Consideration .  The total Purchase Consideration to be paid by the Buyer to the Seller for the purchase of the EBLLC Membership Interests is SIX HUNDRED SIX THOUSAND FOUR HUNDRED TWENTY-EIGHT (606,428) shares of PAYM restricted common stock.


3.

Representations and Warranties of Seller .  As an inducement to the Buyer to enter into this Agreement, the Seller represents and warrants to the Buyer that as of the date of this Agreement and the Closing Date:

 

3.1.

Absence of Liabilities .  EBLLC currently has no debt, liability, obligation or commitment, absolute or contingent, known or unknown, relating to or connected with the ProTech Membership Interests.  EBLLC has no other assets or liabilities, except for the ProTech Membership Interests, which represent a 4.0% interest in ProTech.  

 

3.2.

Title to Membership Interests .  The Seller owns, possesses and has good and marketable title to the EBLLC Membership Interests free and clear of all liens, leases, pledges, charges, encumbrances, equities, covenants, conditions, restrictions or claims of every nature and kind whatsoever.  EBLLC owns the ProTech Membership Interests free and clear of all liens, leases, pledges, charges, encumbrances, equities, covenants, conditions, restrictions or claims of every nature and kind whatsoever.

 

3.3.

Legal Requirements .  The Seller has all requisite power, authority and approvals to transfer ownership of the EBLLC Membership Interests.  The Seller is the sole Member



1



of EBLLC and EBLLC is in good standing with the State of Florida and has complied and will continue to comply with all applicable federal, state or local statutes, laws and regulations, if any, with respect to its operations and ownership of the ProTech Membership Interests.

 

3.4.

Consents and Approvals .  Other than in compliance with the provisions of applicable statutes and regulations, no notice to, filing with, or authorization, consent or approval of, any domestic or foreign public body or authority is necessary for the consummation of the transactions contemplated by this Agreement.  The execution, delivery, performance and consummation of this Agreement does not and will not:  (a) violate, conflict with or constitute a default or an event that, with notice or lapse of time or both, would be a default, breach or violation under any term or provision of any instrument, agreement, contract, commitment, license, promissory note, conditional sales contract, indenture, mortgage, deed of trust, lease or other agreement, instrument or arrangement to which the EBLLC or Seller is a party or by which the Seller or EBLLC, or the EBLLC Membership Interests or ProTech Membership Interests are bound; (b) violate, conflict or constitute a breach of any statute, regulation or judicial or administrative order, award, judgment or decree to which the Seller or EBLLC is a party or to which the Seller or EBLLC, or the EBLLC Membership Interests or ProTech Membership Interests are bound or subject; or (c) result in the creation or imposition of any adverse claim or interest, or any lien, encumbrance, charge, equity or restriction of any nature whatever, upon or affecting the Seller or EBLLC, or the EBLLC Membership Interests or the ProTech Membership Interests.  The sole manager of the Seller has consented to the sale of the EBLLC Membership Interests and this Agreement.  The sale of the EBLLC Membership Interests does not require the approval or consent of ProTech.

 

3.5.

Litigation .  There is no:  (a) action, suit or proceeding pending or threatened against the Seller, EBLLC, the EBLLC Membership Interests or the ProTech Membership Interests; or (b) proceeding, investigation, charges, audit or inquiry threatened or pending before or by any federal, state, municipal or other governmental court, department, commission, board, bureau, agency or instrumentality which might result in an adverse effect on the Seller, EBLLC or the EBLLC Membership Interests or ProTech Membership Interests.

 

3.6.

Taxes .  There is no pending or known threatened claim against the Seller or EBLLC for payment of any taxes arising from EBLLC’s operations or Seller’s ownership of the EBLLC Membership Interests.  The Seller and EBLLC have not executed any waiver of any statute of limitations against assessments of taxes.

 

3.7.

Authority .  The Seller and EBLLC each has taken all necessary action to authorize the execution, delivery and performance of this Agreement and has adequate power, authority and legal right to enter into, execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  This Agreement is legal, valid and binding with respect to each of the Seller and EBLLC and is enforceable in accordance with its terms.  On execution, delivery and performance of this Agreement in accordance with its terms, the Buyer will own one hundred percent (100%) of the EBLLC Membership Interests free of all claims, liens, encumbrances and liabilities.

 

3.8.

Full Disclosure .  This Agreement, any schedule referenced in or attached to this Agreement, any document furnished to the Buyer under this Agreement or any certification furnished to the Buyer under this Agreement does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make



2



such statement, in the circumstances under which it was made, not misleading.  All of the representations, warranties and covenants in this Agreement:  (a) are true and correct as of the date made; (b) will be true and correct as of the Closing Date; and (c) will survive and not be waived, discharged, released, modified, terminated or affected by any due diligence by the Buyer.  For purposes of this Agreement, when a statement is qualified by the phrase “to the best knowledge of the Seller,” such phrase means: (y) the actual knowledge of the Seller; and (z) the knowledge which the Seller, in the exercise of reasonable diligence, could obtain.


3.9

Due Diligence :  The Seller and its sole member/manager and representatives are Accredited Investors (as such term is defined under the Securities Act of 1933, as amended) and have reviewed the public filings of PAYM, including PAYM’s annual report on Form 10-K for the year ended December 31, 2013 and PAYM’s most recent quarterly report on Form 10-Q for the period ended March 31, 2014.  The Seller’s manager and representatives have been given the opportunity to conduct satisfactory due diligence of PAYM, and have been given the opportunity to speak with PAYM management during their due diligence.

 

4.

Representations and Warranties of PAYM .  PAYM has taken all necessary action to authorize the execution, delivery and performance of this Agreement and has adequate power, authority and legal right to enter into, execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  This Agreement is legal, valid and binding with respect to PAYM and is enforceable in accordance with its terms.


5.

Conditions to Closing .  Prior to the Closing Date, the Buyer and Seller will take all necessary steps to ensure the proper transfer of the EBLLC Membership Interests at closing in compliance with the operating agreement of EBIKES, LLC.  


6.

The Closing .  This Agreement will be consummated at _____________ local time at the offices of PayMeOn, Inc or such other mutually agreeable location in Fort Lauderdale, Florida on the later of the following dates (the “Closing Date”):  the first business day following the day on which the last of the conditions set forth in Section 5 hereof is satisfied or waived which in no event shall be later than ________________.

 

6.1.

The Buyer’s Deliveries .  On the Closing Date, the Buyer will deliver or cause to be delivered to the Seller the following items (all documents will be duly executed and acknowledged where required):

 

6.1.1.

Payment .  The Purchase Consideration.

 

6.1.2.

Evidence of Authority .  Such corporate resolutions and other evidence of authority with respect to the Buyer as might be reasonably requested by the Seller; and

 

6.1.3.

Additional Documents .  Such additional documents as might be reasonably requested by the Seller to consummate this Agreement.


6.2.

Seller’s Deliveries .  On the Closing Date, the Seller will deliver or cause to be delivered to the Buyer the following items (all documents will be duly executed and acknowledged where required):

 



3



6.2.1.

Assignment .  Bills of sale, assignments and conveyances acceptable to the Buyer necessary to convey to the Buyer all of the Seller’s right, title and interest in and to all of the EBLLC Membership Interests;


6.2.2.

Consent and Approval .  EBLLC and its sole member/manager shall provide written consent and/or approval of the transfer of the EBLLC Membership Interests to Buyer; and

 

6.2.3.

Additional Documents .  Such additional documents as might be reasonably requested by the Buyer to consummate this Agreement.

 

7.

 Indemnification .  The parties agree to indemnify each other as follows:

 

7.1.

Seller’s Indemnification .  The Seller agrees to pay, defend, indemnify, reimburse and hold harmless the Buyer and the Buyer’s directors, officers, agents and employees (collectively, the “Buyer Indemnified Parties”) for, from and against any loss, damage, diminution in value, claim, liability, debt, obligation or expense (including interest, reasonable legal fees, and expenses of litigation and attorneys fees in enforcing this Agreement) incurred, suffered, paid by or resulting to any of the Buyer Indemnified Parties and which results from, arises out of or in connection with, is based upon, or exists by reason of:  (a) any breach or default in any representation or warranty of the Seller set forth in this Agreement or in the performance by the Seller of any covenant or obligation set forth in this Agreement; and (b) any claims, demands, violations, actions, assessments, taxes, penalties, fines, costs, expenses, obligations or other liabilities with respect to the ownership, operation or maintenance of the EBLLC Membership Interests prior to the Closing Date.

 

7.2.

Buyer’s Indemnification .  The Buyer agrees to indemnify and hold harmless the Seller and the Seller’s officers, directors, managers, employees, agents and members (collectively, the “Seller Indemnified Parties”) against any loss, liability, deficiency, damage, expense or cost (including interest, reasonable legal fees and expenses of litigation and attorneys fees in enforcing this Agreement), whether or not actually incurred or paid that the Seller Indemnified Parties may suffer, sustain or become subject to, as a result of:  (a) any breach or default in any representation or warranty of the Buyer set forth in this Agreement or in the performance by the Buyer of any covenant or obligation set forth in this Agreement; and (b) any claim made by a third party with respect to the operation of the EBLLC Membership Interests on or after the Closing Date.

 

7.3.

Limitation on Indemnification Obligations .  The parties’ indemnification obligations pursuant to the provisions of paragraph 7 are subject to the following limitations:

 

7.3.1.

Survival of Representations and Warranties .  No party can recover under paragraphs 7.1 or 7.2 unless a claim has been asserted by written notice, delivered to the other party on or prior to the date that is 6 months after the Closing Date.

 

7.3.2.

Indemnification Cap .  No party can recover under paragraphs 7.1 or 7.2 an amount in excess of Ten Thousand Dollars ($10,000).  The foregoing limitation shall not apply to recovery for breaches of the Representations and Warranties of Organization, Existence, Good Standing, Power and Authority, and Enforceability.



4



 

7.4.

Other Remedies .  The remedies provided by this paragraph 7 are in addition to, and not in lieu of, such other remedies as may be available under applicable laws.  Without limitation, the Buyer is entitled to enforce this Agreement by specific enforcement without the necessity of demonstrating inadequacy of damages or irreparable harm.

 

7.5.

Payment .  Claims for indemnification involving the payment of money will be paid within ninety (90) days after written notification thereof.  Claims for indemnification involving amounts due to third parties will be promptly paid when due, subject to the right to contest the same in good faith.  Unpaid claims will incur interest at a floating rate of interest equal to the prime rate published from time to time in The Wall Street Journal.

 

8.

Termination .  This Agreement may be terminated and the transactions contemplated hereby may be abandoned by:  (a) mutual consent of the parties; (b) the Buyer, if the Buyer is not in default; (c) the Seller, if the Seller is not in default.  In the event of termination, written notice thereof will be given to the other party or parties specifying the provision pursuant to which such termination is made.  On termination pursuant to this paragraph 8, this Agreement will become void and have no effect and there will be no liability hereunder on the part of the Buyer or the Seller or any of their respective officers, directors, employees, agents, stockholders or principals.

 

9.

Default .  If a party fails to perform any obligation contained in this Agreement, the party claiming default will serve written notice to the other party specifying the nature of such default and demanding performance.  If such default has not been cured within ten (10) business days after receipt of such default notice, the non defaulting party will be entitled to exercise all remedies arising at law or in equity by reason of such default, including, without limitation, specific performance of this Agreement or any one or more of the provisions herein contained.


10.

Miscellaneous .  It is further agreed as follows:

 

10.1.

Time .  Time is of the essence of this Agreement.

 

10.2.

Notices .  Any notice, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given and received when delivered personally or by telefacsimile to the party designated to receive such notice, or on the date following the day sent by overnight courier, or on the third (3rd) day after the same is sent by certified mail, postage and charges prepaid, directed to the following addresses or to such other or additional addresses as any party might designate by written notice to the other parties:

 

 

If to PAYM:

 

 

Attention:  Chief Executive Officer

1040 Seminole Drive, #763

Fort Lauderdale, Fl  33304

 

 

 

 

 

 

 

 

 

 



5





 

With a copy to:

 

 

Brian Pearlman, Esq.

2200 Corporate Blvd NW

Boca Raton, Fl  33431

 

 

 

 

 

 

 

 

 

 

 

 

 

To the Seller:

 

 

Vincent D. Celentano, Manager

4314 Tranquility Drive

Highland Beach, Fl  33487 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With a copy to:

 

 

 

 

 

 

 

 

 

 

 

10.3.

Representations and Warranties .  The respective representations and warranties of the parties contained herein or in any certificates or other documents delivered prior to or at the Closing Date will not be deemed waived or otherwise affected by any investigation made by any party hereto.  Each and every such representation and warranty will survive the Closing Date and will not be terminated or extinguished for a period of six months after the Closing Date. 

 

10.4.

Cooperation .  Prior to and at all times following the termination of this Agreement the parties agree to execute and deliver, or cause to be executed and delivered, such documents and do, or cause to be done, such other acts and things as might reasonably be requested by any party to this Agreement to assure that the benefits of this Agreement are realized by the parties.

 

10.5.

Headings .  The paragraph headings contained in this Agreement are for reference purposes only and are not intended to affect in any way the meaning or interpretation of this Agreement.

 

10.6.

Entire Agreement .  This Agreement and any document executed in connection herewith on or after the date of this Agreement (the “Other Documents”) constitute the entire agreement between the parties with respect to the subject matter hereof and there are no agreements, understandings, warranties or representations except as set forth herein or in the Other Documents.

 

10.7.

Assignment .  It is agreed that the parties may not assign such party’s rights nor delegate such party’s duties under this Agreement without the express written consent of the other parties to this Agreement.  Notwithstanding the foregoing, the Buyer will be permitted to assign this Agreement for all or part of the EBLLC Membership Interests to a wholly owned subsidiary provided the Buyer remains liable for the performance of this Agreement.



6



 

10.8.

Amendment .  Neither this Agreement, nor any of the provisions hereof can be changed, waived, discharged or terminated, except by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought.

 

10.9.

Severability .  If any clause or provision of this Agreement is illegal, invalid or unenforceable under any present or future law, the remainder of this Agreement will not be affected thereby.  It is the intention of the parties that if any such provision is held to be illegal, invalid or unenforceable, there will be added in lieu thereof a provision as similar in terms to such provisions as is possible and to be legal, valid and enforceable.

 

10.10.

Governing Law .  This Agreement will be interpreted, construed and enforced in accordance with the laws of the State of Florida, regardless of any applicable principles of conflicts of law.

 

10.11.

Attorney Fees .  If any party institutes an action or proceeding against any other party relating to the provisions of this Agreement, the party to such action or proceeding which does not prevail will reimburse the prevailing party therein for the reasonable expenses of attorneys’ fees and disbursements incurred by the prevailing party.

 

10.12.

Waiver .  Waiver of performance of any obligation or term contained in this Agreement by any party, or waiver by one party of the other’s default hereunder will not operate as a waiver of performance of any other obligation or term of this Agreement or a future waiver of the same obligation or a waiver of any future default.

 

10.13.

Counterpart Execution .  This Agreement may be executed in counterparts, including by telefacsimile, each of which will be deemed an original document but all of which will constitute a single document.

 

[Signature Pages Follow]

 



7




SIGNATURE PAGE TO MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, this Agreement has been executed by the parties effective the date first above written.

 

 

PAYMEON, INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

 

 

 

SELLER

 

Vincent D. Celentano, II

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 






Consent and Acknowledgement:


EBIKES, LLC




By:

 

Name:  

Vincent D. Celentano, II

Its:  

Sole Member and Manager





8


EXHIBIT 10.3

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this “ Amendment ”) is made among EDWARD A. CESPEDES (the “ Executive ”) and PAYMEON, INC., a Nevada corporation (the “ Company ”).

BACKGROUND

WHEREAS, the Executive and the Company are parties to that certain Employment Agreement dated as of August 15, 2011 (the “ Agreement ”); and

WHEREAS, The Executive and the Company desire to amend the Agreement, effective July 18, 2014;

AMENDMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

1.

Compensation and Related Matters .  Section 5(a) is hereby amended and restated in its entirety as follows:

(a)

Base Salary and Guaranteed Bonus.  During the Employment Period, the Company shall pay Executive a base salary at the rate of not less than $ 175,000 per year ("Base Salary"). Executive's Base Salary shall be paid in approximately equal installments in accordance with the Company’s customary payroll practices. The Compensation Committee (the "Committee") of the Board  of Directors of the Company (the "Board") shall review Executive's Base Salary for increase (but not decrease) no less frequently than annually and consistent with the compensation practices and guidelines of the Company. If Executive's Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement. In addition to Base Salary, Executive shall be eligible for, but not guaranteed, a discretionary annual bonus (the “Discretionary Bonus") on each December 31 of the Employment Period (pro-rated for partial years).

2.

Compensation Upon Termination or During Disability .  Section 8(a) and Section 8(d) is hereby amended and restated in their entirety as follows:   

(a)

Termination By Company without Cause or By Executive for Good Reason. If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason:

(i)

within five (5) days following such termination, the Company shall pay to Executive (A) his Base Salary through the Date of Termination and an amount equal to the product of (x) the higher of (i) the Executive's average annual incentive paid or payable under the Company's annual incentive plan (or any comparable predecessor plan) for the last three full fiscal years, including any portion thereof which has been earned but deferred and (ii) the annual incentive paid or payable under the Company's annual incentive plan for the most recently completed fiscal year, including any portion thereof which has been earned but deferred (and annualized if such fiscal year consists of less than twelve full months or if during which the Employee was employed for less than twelve full months), (such higher amount being referred to as the “Highest Annual Incentive”), provided that for purposes of determining the Highest Annual Incentive for all purposes of this Agreement, the term “annual incentive”




shall include any Bonus to the extent paid or payable and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365;(B) any accrued vacation pay (clauses (A) and (B) of this Section 8(a)(i) collectively referred to as the “Accrued Benefits”); and (C) a lump-sum cash payment equal to one (1) time the sum of Executive's Base Salary and Highest Annual Incentive; and

(ii)

the Company shall maintain in full force and effect, for the continued benefit of Executive, his spouse and his dependents for a period of one and one half ( 1-1/2 ) years following the Date of Termination the medical, hospitalization,  dental,  and life insurance programs in which Executive, his spouse and his dependents were participating immediately prior to the Date of Termination at the level in effect and upon substantially the same terms and conditions (including  without limitation contributions required by Executive for such benefits) as existed immediately prior to the Date of Termination; provided, that, if Executive,  his spouse or his dependents cannot continue to participate in the Company programs providing such benefits, or the Company was unable to provide such benefits during Executive’s employment, the Company shall arrange to provide Executive, his spouse and his dependents with the economic equivalent of such benefits which they otherwise would have been entitled to receive under such plans and programs (“Continued Benefits”),  provided,  that, such Continued Benefits shall terminate on the date or dates Executive receives equivalent  coverage and  benefits, without waiting period or pre-existing condition limitations, under the plans and programs of a subsequent employer (such coverage and benefits to be determined on a coverage-by-coverage or benefit-by-benefit, basis); and

(iii)

the Company shall reimburse Executive pursuant to Section 5 for reasonable expenses incurred, but not paid prior to such termination of employment; and

(iv)

Executive  shall be entitled to any other rights, compensation and/or benefits as may be due to Executive in accordance with the terms and provisions of any agreements, plans or programs of the Company; and

(v)

with respect to equity awards granted or made to the Executive, whether before, on or after the Commencement Date, then notwithstanding the terms or conditions of any stock option, stock appreciation right, restricted stock or similar agreements between the Company and Executive to the contrary, and for purposes thereof, such agreements shall be deemed to be amended in accordance with this Section 8(a)(v) if need be as of the Date of Termination and neither the Company, the Board nor the Committee shall take or assert any position contrary to the foregoing, such that Executive shall vest, as of the Date of Termination, in all rights under such agreements (e.g., stock options that would otherwise vest after the Date of Termination) and in the case of stock options, stock appreciation rights or similar awards, thereafter shall be permitted to exercise any and all such rights until the earlier of (i) the third anniversary of the Date of Termination and (ii) the end of the term of such awards (regardless of any termination of employment restrictions therein contained) and restricted stock held by Executive shall become immediately vested as of the Date of Termination.

(d)

Death. If Executive's employment is terminated by his death:

(v)

the Company shall pay in a lump sum to Executive's beneficiary, legal representatives or estate, as the case may be, Executive's Accrued Salary and Benefits and shall provide Executive's spouse and dependents with Continued Benefits for one and one-half (1-1/2) years ; and



2



(vi)

the Company shall reimburse Executive's beneficiary, legal representatives, or estate, as the case may be, pursuant to Section 5 for reasonable expenses incurred, but not paid prior to such termination of employment; and

(vii)

Executive's  beneficiary, legal representatives or estate, as the case may be, shall be entitled to any other rights, compensation and benefits as may be due to any such persons or estate in accordance with the terms and provisions of any agreements, plans or programs of the Company.

3.

Defined Terms .  Capitalized terms which are used in this Amendment but are not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

4.

Governing Law .  This Amendment shall be governed by and construed in accordance with the laws of the State of Florida, without regard to conflicts of laws provisions thereof.

5.

Ratification of Agreement .  Except as expressly modified or amended by this Amendment, all of the provisions of the Agreement are hereby ratified, confirmed and approved and shall remain in full force and effect.

6.

Further Assurances .  Each party hereto shall, upon the reasonable request of any other party hereto, execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the provisions of and the transactions contemplated by this Amendment.

7.

Counterparts .  This Amendment may be executed and delivered (including, without limitation, by facsimile transmission), in counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as dated above.

PAYMEON, INC.

 

 

By:

 

 

Edward A. Cespedes, CEO AND DIRECTOR

 

 

EXECUTIVE

 

 

 

EDWARD A. CESPEDES




3