EXHIBIT
10.30
   MEMBERSHIP
INTEREST
  PURCHASE
AGREEMENT
  (MUSIC1)
  BETWEEN
  ENERFUND,
LLC
  AND
  NET
ELEMENT, INC.
  DATED AS OF FEBRUARY 1, 2011
  
 
 This
MEMBERSHIP INTEREST PURCHASE
AGREEMENT (the “Agreement”) is made and entered into as of the 1ST day of
February, 2011, by and among ENERFUND, LLC, a limited liability company
organized and existing under the laws of Florida (the “Seller”), and NET
ELEMENT, INC., a corporation organized and existing under the laws of Delaware
(the “Purachaser”).
  RECITALS
 
 WHEREAS,Music1, LLC
(“Music1”) is a wholly-owned subsidiary of the Seller which in turn purchased
97% of the outstanding membership units of A&R Music Live, LLC, a Georgia
limited liability company having its place of business at 2280 Wren Road SE,
Conyers, Georgia (“A&R Live”) and the Internet domain names www.arlive.com and
www.music1.com
(the “Domains”) pursuant to the terms of that certain Membership Interest
Purchase Agreement dated as of October 21, 2010 between Music1 and Stephen
Strother, a copy of which is attached hereto as Exhibit A (the “MIPA”);
and
  WHEREAS,the Purchaser desires
to purchase the Seller’s interest in Music1, and the Seller desires to sell all
of its interest in Music1 (the “Interest”) pursuant to the terms of this
Agreement.
  AGREEMENT
 
 NOW, THEREFORE, in
consideration of the recitals and of the premises, mutual covenants, mutual
representations, warranties, covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree
that:
  ARTICLE
I
 PURCHASE OF
INTERESTS
  1.1.           Purchase and Sale of
Interests.  Upon the terms and subject to the conditions of
this Agreement, as of the Effective Date (the “Closing Date”), the Purchaser
shall purchase the Interest for the Purchase Price (as defined below) (the
“Interest Purchase”).
  1.2.           Purchase
Price.  In consideration for the sale of the Interest subject
to the conditions contained herein, the Purchaser shall purchase the Interest
from the Seller for Fifteen Thousand U.S. Dollars (US$15,000) (the “Purchase
Price”). In addition, the Purchaser agrees to fulfill the obligations of Music1
pursuant to the MIPA, and Seller hereby assigns to Purchaser, and Purchaser
hereby accepts such assignment, of all of Seller’s rights, title and interest in
and obligations under the MIPA and the Employment Agreement (as defined in the
MIPA).
  1.3.           Closing.
  (a)           The
sale and purchase of the Interests and the Domains shall occur simultaneously
with the signing and effective delivery of this Agreement.
  (b)           Prior
to the Closing, parties have delivered to each other the documents required to
be delivered pursuant to Article IV of this Agreement.
  1
  ARTICLE
II
 REPRESENTATIONS
AND WARRANTIES OF THE SELLER
  The
Seller represents and warrants to the Purchaser that the representations and
warranties made by it in this Article II are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing (as though
made then and as though the Closing were substituted for the date of this
Agreement throughout this Article II), except as set forth in the Disclosure
Schedules delivered by the Seller to the Purchaser prior to the
Closing.
  2.1.           Authority. The Seller
is an individual with the requisite capacity, power and authority:  (a) to
own and use the properties owned and used by it and (b) to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby.
  2.2.           Due Formation.Music1
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Florida, and Music1 has the corporate
power and authority and all necessary governmental approvals to own its
properties and assets and to carry on its business as it is now being conducted
and are duly qualified to do business and is in good standing in each of the
jurisdictions in which the ownership of its properties or the conduct of its
business requires such qualification, except for jurisdictions in which the
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect. Except as provided in Schedule 2.2 hereto, there are no
other Persons in which Music1 owns, of record or beneficially, any direct or
indirect equity or similar interest or any right (contingent or otherwise) to
acquire the same.
  2.3.           Capitalization.   The
Seller owns 100% of the issued and outstanding interests in Music1, and there
are no other interests, or options, warrants, calls, preemptive rights,
subscriptions or other rights, to acquire interests, in Music1 and there are no
outstanding contractual obligations of Music1 to repurchase, redeem or otherwise
acquire any membership interests of Music1 or to provide funds to make any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person. All the outstanding units of membership interest of Music1 are
duly authorized validly issued, fully paid and non-assessable and free of
preemptive rights.
  2.4.           No Undisclosed
Liabilities. Other than the obligations in the MIPA, Music1 has no
liabilities or obligations of any nature other than for incidental current
expenses incurred in the normal course of business such as salaries, equipment,
maintenance, etc., whether or not accrued, contingent or otherwise, and there is
no existing condition, situation or set of circumstances which could be expected
to result in such a liability or obligation.
  2.5.           No Violation of
Law.  To the Knowledge of the Seller, the businesses of Music1
are not being conducted in violation of any applicable Law.
  2.6.           Litigation;
Proceedings. (a) there are no actions, suits, claims (including worker’s
compensation claims), litigation or other governmental or judicial proceedings
or investigations or arbitrations against Music1 or any of its properties,
assets or business, or any of Music1’s current or former directors or officers
or any other Person whom Music1 has agreed to indemnify; (b) as of the date
hereof, there are no actions, suits or proceedings pending or threatened,
against the Seller or Music1 relating to the transactions contemplated by the
Transaction Agreements; and (c) there are no outstanding orders, judgments,
injunctions, awards or decrees of any governmental entity against the Seller or
Music1, any of its properties, assets or businesses, or any of Music1’s current
or former directors or officers or any other Person whom Music1 has agreed to
indemnify.
  2
  2.7.           Title to
Assets.  The Seller and Music1 own and have valid title to its
other tangible assets and properties which they purport to own, free and clear
of any and all Liens, except for Permitted Liens.
  ARTICLE
III
 REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
  The
Purchaser represents and warrants to the Seller that the representations and
warranties made by it in this Article III are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing (as
though made then and as though the Closing were substituted for the date of this
Agreement throughout this Article III).
  3.1.           Organization and
Qualifications.  The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently
conducted.  The Purchaser is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business conducted or property owned by each makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not reasonably be expected to have a Material Adverse
Effect.
  3.2.           Authorization.  The
Purchaser has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.  The execution and delivery of this
Agreement by the Purchaser and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Purchaser, and no further action is required by the Purchaser. 
This Agreement has been duly executed by the Purchaser and this Agreement
constitutes a valid and binding agreement of the Purchaser enforceable against
the Purchaser in accordance with its terms, subject, however, as to enforcement,
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
and to general principles of equity, regardless of whether such enforceability
is considered in equity or at law.  The Purchaser is not in violation of
any of the provisions of its Certificate or Articles of Incorporation, bylaws or
other organizational documents.
  3.3.           Brokers, Finders or
Financial Advisors.  No broker, investment broker, financial
advisor or other person is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission from the Purchaser in connection
with the transactions contemplated by this Agreement.
  3
  ARTICLE
IV
 DELIVERABLES
  4.1.           Certificates and Documents
of the Seller. The Seller shall have delivered at or prior to the Closing
the following:
  (i)           A
copy of Music1’s Certificate of Formation, with all amendments to date,
certified by the Secretary of State, together with a copy of the Operating
Agreement of Music1 certified by its secretary within three (3) business days of
the Effective Date;
  (ii)           possession
of all originals and copies of agreements, instruments, documents, deeds, books,
records, files and other data and information within the possession of the
Seller or any Affiliate of the Seller pertaining to Music1 (collectively, the
“Records”); provided, however, that the Seller may retain (1) copies of any tax
returns and copies of Records relating thereto; (2) copies of any Records that
the Seller is reasonably likely to need for complying with requirements of law;
and (3) copies of any Records that in the reasonable opinion of the Seller will
be required in connection with the performance of his obligations
herein;
  (iii)           resolutions
of Music1 or the Seller, or both as the requisite circumstance and Law requires,
authorizing and approving all matters in connection with this Agreement and the
transactions contemplated herein, certified by a duly authorized officer of
Music1 within three (3) days of the Effective Date;
  (iv)           the
stock book, stock ledger, minute books and corporate seal of
Music1;
  (v)           such
other documents relating to the transactions contemplated in this Agreement as
the Purchaser may reasonably request.
  4.2.           Certificates and Documents
of the Purchaser.  The Purchaser shall have delivered at or
prior to the Closing the following:
  (i)           resolutions
of the Board of Directors of the Purchaser, authorizing and approving all
matters in connection with this Agreement and the transactions contemplated
herein, certified by the secretary of the Purchaser as of the Closing
Date;
  (ii)           such
other documents relating to the transactions contemplated in this Agreement as
the Seller may reasonably request;
  (iii)           The
payment set forth in 1.2; and
  ARTICLE
V
 OTHER
AGREEMENTS
  5.1.           Confidentiality.    Each
of the parties hereto shall, and shall cause their respective principals,
officers, directors, shareholders, employees, agents, counsel, auditors, and
other personnel and authorized representatives to, hold in strict confidence,
and not divulge or disclose, any confidential information of any kind concerning
(i) the other parties and their respective principals, officers, directors,
shareholders, employees, agents, counsel, auditors and other personnel and
authorized representatives; (ii) the business or operations of any party to this
Agreement; or (iii) this Agreement, the transactions contemplated hereby, or any
negotiations or discussions between or among the parties hereto in connection
with any of the foregoing, except to the extent that such information is a
matter of public knowledge or is required to be disclosed by law or judicial or
administrative process as may be required by applicable law or as otherwise
contemplated herein. Notwithstanding anything contained herein to the contrary,
the confidentiality obligations of the parties hereto contained in this Section
6.1 shall survive the Closing.
  4
  5.2.           Expenses.   Except
as otherwise expressly provided herein, each party hereto will pay its own
expenses incurred in connection with the negotiation of this Agreement, the
performance of their respective obligations hereunder and the consummation of
the transactions contemplated hereby, whether or not consummated.
  ARTICLE
VI
 SURVIVAL
AND INDEMNIFICATION
  6.1.           Survival of Representations
and Warranties.  The representations and warranties contained
in Articles III and IV hereof shall survive the Effective Date for a period of
twelve (12) months, after which all such representations and warranties shall
terminate and be of no further force or effect.
  6.2.           Indemnification.Other than as otherwise provided in the MIPA, neither the Purchaser or
the Seller shall have an obligation to indemnify the other for any losses
arising from this Agreement.
  ARTICLE
VII
 MISCELLANEOUS
  7.1.           Arbitration. 
Any controversy or claim arising out of or relating to this Agreement that
cannot be resolved and which is the result of a breach or termination of
this Agreement shall be resolved, as follows:
  (a)           The
dispute or controversy will be settled finally and exclusively by binding
arbitration in accordance with and through the Commercial  Arbitration
Rules (“Rules”)
of the American Arbitration Association (“AAA”) in effect on the date of this
Agreement.
  (b)           The
place of the arbitration shall be Miami, Florida, United States of America. Each
party hereby irrevocably agrees that service of process, summons, notices or
other communications related to the arbitration procedure shall be deemed served
and accepted by the other party if given in the same manner as provided under
the notice provisions of this Agreement. Witnesses residing outside of the State
of Florida may testify telephonically.
  (c)           The
language to be used in the arbitration shall be English.
  (d)           The
arbitration shall be conducted by one arbitrator.  Upon request, the AAA
will produce a list of 10 potential arbitrators familiar with international
commercial legal issues.  The parties will attempt to agree on one
arbitrator. Failing to agree, the AAA shall appoint an arbitrator pursuant to
the Rules.
  5
  (e)           Judgment
upon the written award rendered by the arbitrator may be entered in any court or
record of competent jurisdiction in any country, or application may be made to
such court of judicial acceptance of the award and an order of enforcement, as
the law of such jurisdiction may require or allow.
  (f)           The
cost of the arbitration proceedings shall be determined under the respective
rules for cost of arbitration of the AAA in effect at the time of the request
for arbitrations.   All expenses of the arbitration, including
reasonable attorney’s fees, shall be borne by the losing party to the
arbitration or, as the case may be, shall be prorated to properly reflect any
partial prevailing or losing of the parties to the arbitration, as determined by
the arbitrators in the written award.
  (g)           The
panel of arbitrators specifically shall have the power to grant equitable relief
upon request of either party.
  7.2.           Entire
Agreement.  This Agreement, together with the Exhibits and
Schedules hereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into this Agreement and the Exhibits and Schedules
hereto.
  7.3.           Notices.  All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (c)
three business days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) two business days after
deposit with recognized overnight courier, specifying next day delivery, with
written verification of receipt.  The address for all notices, requests,
consents and other communications hereunder to the parties to this Agreement
shall be delivered or sent to the following:
  If to the
Seller:
  Enerfund,
LLC
 1450
South Miami Avenue
 Miami, FL
33130
 Attn:
Mike Zoi, Managing Member
 Email:
mzoi@enerfund.com
 
 If to the
Purchaser:
 
 Net
Element, Inc.
 1450
South Miami Avenue
 Miami, FL
33130
 Attn:  Mike
Zoi, President
 Email:
mzoi@netelement.com
  6
 
 With a
copy to:
 
 Curtis
Wolfe
 1450
South Miami Avenue
 Miami, FL
33130
 Email:
cw@netelement.com
 
 Or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.
 
 7.4.           Amendments;
Waivers.No provision of this Agreement may be amended except by a written
instrument signed by the Purchaser and the Seller.   No provision of
this Agreement may be waived except in a written instrument signed by the
party against whom enforcement of any such waiver is sought.  No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
  7.5.           Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
  7.6.           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns.  The
Seller may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser.  The Purchaser may
assign this Agreement or any of the rights or obligations hereunder without the
prior written consent of the Seller.
  7.7.           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.
  7.8.           Governing Law; Consent to
Jurisdiction.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Florida without regard to the principles of conflicts of law
thereof.
  7.9.           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page were an original
thereof.
  7
  7.10.                      Severability.  In
case any one or more of the provisions of this Agreement shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this
Agreement.
  7.11.                      Interpretation.  The
Section headings in this Agreement are for convenience of reference only and
shall not be deemed to alter or affect the meaning or interpretation of any
provision hereof.  The language used in this Agreement will be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party hereto.  The
disclosure of any matter in any portion of the Disclosure Schedules hereto shall
be deemed to be a disclosure for all purposes of this Agreement to which such
matter could reasonably be likely to be pertinent, but shall expressly not be
deemed to constitute an admission by the Seller or the Purchaser, as the case
may be, or to otherwise imply, that any such matter is material for the purposes
of this Agreement.
  ARTICLE
VIII
 DEFINITIONS
  8.1.           When
used in this Agreement, and in addition to the other terms defined herein, the
following terms shall have the meanings specified:
  (a)           Affiliate.  “Affiliate”
shall mean, in relation to any party hereto, any entity directly or indirectly
controlling, controlled by or under common control with such party.
  (b)           Agreement.  “Agreement”
shall mean this Membership Interest Purchase Agreement, together with the
Exhibits attached hereto and the Disclosure Schedule, as the same may be amended
from time to time in accordance with the terms hereof.
  (c)           Disclosure
Schedule.  “Disclosure Schedule” shall mean the Disclosure
Schedule delivered by the Seller to Music1 pursuant to Section 2.2 of this
Agreement.
  (d)           Effective
Date.  “Effective Date” shall mean the date on which the
parties hereto have signed and delivered this Agreement.
  (e)           Governmental
Entity.  “Governmental Entity” shall mean any federal, state,
local or foreign court, arbitral tribunal, administrative agency or commission
or other governmental or regulatory authority or administrative
agency.
  (f)           Indebtedness.  “Indebtedness”
shall mean all liabilities or obligations of Music1, whether primary or
secondary or absolute or contingent, in excess of $10,000 as to any single item:
(a) for borrowed money; or (b) evidenced by notes, bonds, debentures or similar
instruments; or (c) secured by Liens on any assets of Music1.
  (g)           Knowledge.  “Knowledge”
shall mean actual knowledge without independent investigation of any officer or
manager of the respective company who should, based on his or her
responsibilities, reasonably be expected to have such knowledge.
  8
  (h)           Law.  “Law”
shall mean any foreign, federal, state or local governmental law, rule,
regulation or requirement, including any rules, regulations and orders
promulgated thereunder and any orders, decrees, consents or judgments of any
governmental regulatory agencies and courts having the force of law, other than
any environmental laws.
  (i)           Lien.  “Lien”
shall mean, with respect to any asset (real, personal or mixed): (a) any
mortgage, pledge, lien, easement, lease, title defect or imperfection or any
other form of security interest, whether imposed by Law or by contract; and (b)
the interest of a vendor or lessor under any conditional sale agreement,
financing lease or other title retention agreement relating to such
asset.
  (j)           Loss.  “Loss”
shall mean any and all damages (including incidental and consequential damages),
assessments, fines, penalties, deficiencies, losses, judgments, amounts paid in
settlement or diminution in value, costs and expenses (including, without
limitation, interest, court costs, reasonable fees and expenses of attorneys,
accountants and other experts or other reasonable expenses incurred in
investigating, preparing, defending against or prosecuting any litigation or
claim, action, suit, proceeding or demand).
  (k)           Material Adverse
Effect.  “Material Adverse Effect” shall mean a material
adverse effect on the business, condition (financial or otherwise), results of
operations, assets, liabilities, prospects, liquidity or properties of
Music1.
  (l)           Permitted
Liens.  “Permitted Liens” shall mean those of the Existing
Liens that do not materially detract from the value of the property or assets of
Music1 taken as a whole subject thereto and do not materially impair the
business or operations of Music1.
  (m)           Person.  “Person”
shall mean a natural person, corporation, limited liability company,
association, joint stock company, trust, partnership, governmental entity,
agency or branch or department thereof, or any other legal entity.
  (n)           Subsidiary.  “Subsidiary”
shall mean any corporation, at least a majority of the outstanding capital stock
of which (or any class or classes, however designated, having ordinary voting
power for the election of at least a majority of the board of directors of such
corporation) shall at the time be owned by the relevant Person directly or
through one or more corporations which are themselves Subsidiaries.
  (o)           “Transaction
Agreements” shall mean this Agreement, the Employment Agreement, and any
other agreements contemplated in this Agreement.
  [Signatures
appear on next page]
  9
  
  IN
WITNESS WHEREOF, the parties hereto have caused this Membership Interest
Purchase Agreement to be duly executed by their respective authorized
signatories as of the Effective Date.
  PURCHASER:
  NET
ELEMENT, INC.
  By: 
/s/ Jonathan
New
 Name:
Jonathan New
 Title:
Chief Financial Officer
   SELLER:
  ENERFUND,
LLC
  By: 
/s/ Mike
Zoi
 Name:
Mike Zoi
 Title:
Managing Member







Exhibit A










MEMBERSHIP
INTEREST




PURCHASE
AGREEMENT




BETWEEN




MUSIC1,
LLC




AND




STEPHEN
STROTHER




DATED AS OF OCTOBER 21, 2010




Execution
Copy




This
MEMBERSHIP INTEREST PURCHASE
AGREEMENT (the “Agreement”) is made and entered into as of the 21st day
of October, 2010, by and among MUSIC1, LLC, a corporation organized and existing
under the laws of Florida (the “Purchaser” or “MUSIC1”), and STEPHEN STROTHER,
an individual who is resident in the State of Georgia (the
“Seller”).




RECITALS





WHEREAS, the Seller owns all
units of A&R Music Live, LLC, a Georgia limited liability company having its
place of business at 2280 Wren Road SE, Conyers, Georgia (“A&R Music Live”)
and the Internet domain names www.arlive.comand www.music1.com(the
“Domains”);




WHEREAS,the Purchaser, a
wholly-owned subsidiary of Enerfund, LLC (“Enerfund”) desires to purchase (i)
97% of the Seller’s membership interests in A&R Music Live (the “Interest”)
and (ii) the Domains, and the Seller desires to sell 97% of his membership
interests in A&R Music Live and the Domains to the Purchaser pursuant to the
terms of this Agreement.




AGREEMENT





NOW, THEREFORE, in
consideration of the recitals and of the premises, mutual covenants, mutual
representations, warranties, covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree
that:




ARTICLE
I


PURCHASE OF
INTERESTS




1.1. 
      Purchase and Sale of
Interests.  Upon the terms and subject to the conditions of
this Agreement, as of the Effective Date (the “Closing Date”), the Purchaser
shall purchase the Interest and the Domains for the Purchase Price (as defined
below) (the “Interest Purchase”).




1.2.   
    Purchase
Price.  In consideration for the sale of the Interests and in
reliance on the representations and warranties, covenants and agreements of the
Seller contained herein and the documents contemplated hereby, and subject to
the conditions contained herein, the Purchaser shall purchase the Interests from
the Seller for Fifteen Thousand U.S. Dollars (US$15,000) (the “Purchase Price”).
The Seller shall retain three percent (3%) of the equity.




1.3.     
  Closing.




(a)         The
sale and purchase of the Interests and the Domains shall occur simultaneously
with the signing and effective delivery of this Agreement.




(b)         Prior
to the Closing, parties have delivered to each other the documents required to
be delivered pursuant to Article V of this Agreement.




1
 Execution
Copy




ARTICLE
II


OTHER
COVENANTS




2.1.  
     Disclosure
Schedules.  Prior to the Closing Date, the Seller shall deliver
to Music1 disclosure schedules (the “Disclosure Schedules”) signed by the Seller
stating that the Disclosure Schedules were delivered pursuant to this Agreement
and are the Disclosure Schedules referred to in this Agreement.  The
Disclosure Schedules will be deemed to constitute an integral part of this
Agreement and to modify, as specified, the representations, warranties,
covenants or agreements of the Seller contained in this Agreement.




2.2.    
   Officer Position and
Employment Agreement.  As of the Closing Date, the Seller shall
become the President of Music1 reporting to the Board of
Directors.  Effective on the Closing Date, the Seller and Music1 shall
enter into an employment agreement in the form attached hereto as Exhibit A (the
“Employment Agreement”).  The Seller shall report to the Chairman or
Chief Executive Officer of Music1 as appointed by Enerfund.  During
the term of the Employment Agreement, the Seller shall be elected to the Board
of Directors of Music1.




2.3.      
 Audit.  The
Purchaser will engage independent auditors to conduct an audit of the books and
records of A&R Music Live as part of its due diligence at the Purchaser’s
expense.  The Seller has an ongoing obligation to cooperate with this
audit by providing the requested documents and documentation and to facilitate
its timely completion.




2.4.       
Investment.  The
Purchaser shall invest, or bring one or more investors, in and for the business
of Music1 in the minimum amount of $500,000 (the “Investment Amount”) before the
end of December 2012 (the “Investment End Date); provided, however, that
salaries to executives such as the Seller or others directly working for Music1,
as well as other expenses paid by Music1, LLC or its assigns directly related to
Music1’s operations shall contribute to the aggregate of the Investment
Amount.




2.5.      
 Operations/Merger.  A&R
Music Live and Music1’s businesses will be operated under the Music1 entity with
A&R Music Live owning the Domains. The Purchaser may, in its sole discretion
after the investment of the Investment Amount, merge the business and operations
of A&R Music Live with and into the Purchaser, with the Purchaser surviving
the merger and continuing the business.




2.6.      
 Board of
Directors.  Music1 shall be managed by a Board of
Directors.  During the term of the employment agreement, the Seller
shall have a seat on the Board of Directors.




2.7.      
 Quick Demo
Review.  The Seller has developed functionality that operates
with A&R Music Live’s functionality, known as “Quick Demo
Review”.  The Seller shall grant a license to Music1 or A&R Music
Live to use Quick Demo Review royalty free for the term of the Seller’s
employment with A&R Music Live or Music1. The Seller also has developed an
online video series known as “Around the Block.”  The Seller will
retain all rights to the “Around the Block” series where he will promote,
without the need for any additional license from Music1, both A&R Music Live
and Music1 without royalty or payment other than as otherwise expressly set
forth herein.




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2.8.  
     Atlanta
Office.  The Purchaser shall open an office in Atlanta,
Georgia.  The Seller will work from the Atlanta Office, unless
business requires that he otherwise travel.  The Seller will be
permitted to hire a program manager for the A&R Music Live business to work
virtually at a starting salary of $34,000 annually; provided that the Board of
Directors will evaluate the effectiveness of this working relationship after 60
days and may require the position to be filled by someone in the Atlanta or
Miami office, in its sole discretion. The Seller shall present to the Board of
Directors any additional personnel hires and the Board of Directors shall make a
determination of whether such personnel should be hired or such positions are
necessary and in the best interest of the company at that time.




2.9.    
   Unwind.  In
the event that the Purchaser fails to invest the Investment Amount resulting in
a material harm to A&R Music Live/Music1’s business by the Investment
End-Date or the Purchaser terminates without cause (or Seller terminates for
“good reason”) Seller’s employment agreement prior to 18 months from the
Effective Date, then the Seller shall have the right to repurchase A&R Music
Live for the amount of $1.00.  Following the Seller’s exercise of its
option to unwind this transaction, A&R Music Live and the Domains shall
revert to the Seller along with the functionality of the A&R Music Live
site.




2.10.    
 Public
Announcements.  Following the Closing, the Seller shall not
issue or cause the publication of any press release or other public announcement
with respect to this Agreement or the transactions contemplated hereby without
the prior consent of the Purchaser; provided, however, that: nothing herein will
prohibit either party from issuing or causing publication of any such press
release or public announcement to the extent that such party’s counsel
reasonably determines such action to be required by law, or the regulations of
any government agency or the principal exchange, in which case the party making
such determination will, to the greatest extent practicable in light of the
circumstances, use best efforts to allow the other party reasonable time to
comment on such release or announcement in advance of its issuance.




2.11.     
Non-Solicitation.  Neither
party shall solicit the employees, agents, contractors, members, or customers of
the other during the term of the Employment Agreement and for a period of one
(1) year thereafter.




2.12.    
 Best
Efforts.  Each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done as promptly as practicable, all things necessary, proper and advisable
under applicable laws and regulations to consummate and make the business of
Music1F a commercial and financial success.




ARTICLE
III


REPRESENTATIONS
AND WARRANTIES OF THE SELLER




The
Seller represents and warrants to the Purchaser that the representations and
warranties made by it in this Article III are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing (as
though made then and as though the Closing were substituted for the date of this
Agreement throughout this Article II), except as set forth in the Disclosure
Schedules delivered by the Seller to the Purchaser prior to the
Closing.




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3.1.  
     Authority. The Seller
is an individual with the requisite capacity, power and authority:  (a) to
own and use the properties owned and used by it and (b) to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby.




3.2.    
   Due
Formation.  A&R Music Live is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Georgia, and A&R Music Live has the corporate power and authority
and all necessary governmental approvals to own its properties and assets and to
carry on its business as it is now being conducted and are duly qualified to do
business and is in good standing in each of the jurisdictions in which the
ownership of its properties or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse
Effect.  The Seller has delivered or will deliver to Music1 copies of
the certificates of registration and charter or other organizational documents
of A&R Music Live (the “Organizational Documents”).  Such
Organizational Documents are in all material respects complete and correct and
in full force and effect, are the only documents governing the operation and
authority of A&R Music Live, and A&R Music Live is not in violation of
any of the provisions of the Organizational Documents.  Except as
provided in Schedule 3.2 hereto, there are no other Persons in which A&R
Music Live owns, of record or beneficially, any direct or indirect equity or
similar interest or any right (contingent or otherwise) to acquire the
same.




3.3.      
 Capitalization.   The
Seller owns 100% of the issued and outstanding interests in A&R Music Live,
and there are no other interests, or options, warrants, calls, preemptive
rights, subscriptions or other rights, to acquire interests, in A&R Music
Live and there are no outstanding contractual obligations of A&R Music Live
to repurchase, redeem or otherwise acquire any membership interests of A&R
Music Live or to provide funds to make any investment (in the form of a loan,
capital contribution or otherwise) in any other Person. All the outstanding
units of membership interest of A&R Music Live are duly authorized validly
issued, fully paid and non-assessable and free of preemptive
rights.




3.4.     
  No
Violation or Conflict.  The execution and delivery of the
Transaction Agreements do not, and the consummation of the transactions
contemplated hereby and thereby and compliance with the provisions hereof and
thereof will not, conflict with, result in any violation of, or breach or
default (with or without notice or lapse of time, or both) under, or give to
others a right of termination, cancellation or acceleration of any obligation or
the loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
A&R Music Live under, any provision of (i) the Organizational Documents,
(ii) any loan or credit agreement, note, bond, mortgage, lease, indenture or
other contract, agreement, instrument, permit, concession, franchise or license
applicable to A&R Music Live, or (iii) any judgment, order, decree, statute,
law, ordinance, rule, or regulation applicable to the Seller or A&R Music
Live or any of its respective properties or assets.




3.5.       
No Undisclosed
Liabilities. A&R Music Live have no liabilities or obligations of any
nature other than for incidental current expenses incurred in the normal course
of business such as salaries, equipment, maintenance, etc., whether or not
accrued, contingent or otherwise, and there is no existing condition, situation
or set of circumstances which could be expected to result in such a liability or
obligation.




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3.6.   
    No Violation of
Law.  To the Knowledge of the Seller, the businesses of A&R
Music Live are not being conducted in violation of any applicable
Law.




3.7.    
   Litigation;
Proceedings. (a) there are no actions, suits, claims (including worker’s
compensation claims), litigation or other governmental or judicial proceedings
or investigations or arbitrations against A&R Music Live or any of its
properties, assets or business, or any of A&R Music Live’s current or former
directors or officers or any other Person whom A&R Music Live has agreed to
indemnify; (b) as of the date hereof, there are no actions, suits or proceedings
pending or threatened, against the Seller or A&R Music Live relating to the
transactions contemplated by the Transaction Agreements; and (c) there are no
outstanding orders, judgments, injunctions, awards or decrees of any
governmental entity against the Seller or A&R Music Live, any of its
properties, assets or businesses, or any of A&R Music Live’s current or
former directors or officers or any other Person whom A&R Music Live has
agreed to indemnify.




3.8.      
 Title to
Assets.  The Seller and A&R Music Live own and have valid
title to its other tangible assets and properties which they purport to own,
free and clear of any and all Liens, except for Permitted Liens.




3.9.      
 Financial
Statements.  As of the date the Seller delivers the Disclosure
Schedules, the Seller will have delivered to Music1 the following financial
statements for A&R Music Live: balance sheet and incomes statement as of
December 31, 2009 (unaudited) (the “Financial Statements”).  The
Financial Statements have been prepared in accordance with accounting principles
consistently applied throughout the periods covered thereby and present fairly
in all material respects, as of their respective dates, the financial condition
and results of operations of A&R Music Live.




3.10.    
 Taxes.   Other
than as disclosed on Schedule 3.10 hereto, A&R Music Live has filed all
income tax returns (the “Tax Returns”) that it is required to file, and has paid
all income taxes (the “Taxes”) shown thereon as owing.  The most
recent financial statements contained in the Financial Statements reflect an
adequate reserve for all Taxes payable by A&R Music Live for all taxable
periods and portions thereof accrued through the date of such financial
statements, except to the extent that any failures to reflect such reserves
would not reasonably be expected to have a Material Adverse Effect.  There
is no pending dispute with any taxing authority relating to any Tax Returns of
A&R Music Live and there is no tax audit of any Tax Return pending or
currently in process.  There are no liens for Taxes upon any of the
assets of A&R Music Live, except Liens for current Taxes not yet due and
payable.




3.11.    
 Employees. Schedule
3.12 sets forth the names and titles of all current employees of each A&R
Music Live.




3.12.    
 Brokers, Finders
or Financial Advisors.    Neither the Seller, nor
A&R Music Live, has employed any investment banker, broker, finder or
intermediary (for the avoidance of doubt, expressly excluding attorneys or
accountants) in connection with the transactions contemplated hereby who might
be entitled to any fee or any commission in connection with or upon consummation
of the transactions contemplated hereby.




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ARTICLE
IV


REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER




The
Purchaser represents and warrants to the Seller that the representations and
warranties made by it in this Article IV are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing (as though
made then and as though the Closing were substituted for the date of this
Agreement throughout this Article IV).




4.1.    
   Organization and
Qualifications.  The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently
conducted.  The Purchaser is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business conducted or property owned by each makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not reasonably be expected to have a Material Adverse
Effect.




4.2.   
    Authorization.  The
Purchaser has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.  The execution and delivery of this
Agreement by the Purchaser and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Purchaser, and no further action is required by the Purchaser. 
This Agreement has been duly executed by the Purchaser and this Agreement
constitutes a valid and binding agreement of the Purchaser enforceable against
the Purchaser in accordance with its terms, subject, however, as to enforcement,
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
and to general principles of equity, regardless of whether such enforceability
is considered in equity or at law.  The Purchaser is not in violation of
any of the provisions of its Certificate or Articles of Incorporation, bylaws or
other organizational documents.




4.3.  
     Brokers, Finders or
Financial Advisors.  No broker, investment broker, financial
advisor or other person is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission from the Purchaser in connection
with the transactions contemplated by this Agreement.


ARTICLE
V
 DELIVERABLES
  5.1.    
   Certificates and Documents
of the Seller. The Seller shall have delivered at or prior to the Closing
the following:
  (i)          A
copy of A&R Music Live’s Certificate of Formation, with all amendments to
date, certified by the Secretary of State, together with a copy of the Operating
Agreement of A&R Music Live, certified by its secretary within three (3)
business days of the Effective Date;




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(ii)         possession
of all originals and copies of agreements, instruments, documents, deeds, books,
records, files and other data and information within the possession of the
Seller or any Affiliate of the Seller pertaining to A&R Music Live
(collectively, the “Records”); provided, however, that the Seller may retain (1)
copies of any tax returns and copies of Records relating thereto; (2) copies of
any Records that the Seller is reasonably likely to need for complying with
requirements of law; and (3) copies of any Records that in the reasonable
opinion of the Seller will be required in connection with the performance of his
obligations herein;




(iii)        resolutions
of A&R Music Live or the Seller, or both as the requisite circumstance and
Law requires, authorizing and approving all matters in connection with this
Agreement and the transactions contemplated herein, certified by a duly
authorized officer of A&R Music Live within three (3) days of the Effective
Date;




(iv)        the
stock book, stock ledger, minute books and corporate seal of A&R Music
Live;




(v)         The
Employment Agreement;




(vi)        The
Amended and Restated Operating Agreement of A&R Music Live;




(vii)       such
other documents relating to the transactions contemplated in this Agreement as
the Purchaser may reasonably request.




5.2.        Certificates and Documents
of the Purchaser.  The Purchaser shall have delivered at or
prior to the Closing the following:




(i)          resolutions
of the Board of Directors of the Purchaser, authorizing and approving all
matters in connection with this Agreement and the transactions contemplated
herein, certified by the secretary of the Purchaser as of the Closing
Date;




(ii)         the
Employment Agreement;




(iii)        such
other documents relating to the transactions contemplated in this Agreement as
the Seller may reasonably request;




(iv)        The
payment set forth in 1.2; and




(v)         The
Amended and Restated Operating Agreement of Music1, LLC.


5.3.        Intervening
Litigation.  If, prior to the Closing Date any preliminary or
permanent injunction or other Order issued by a court of competent jurisdiction
or by any other Governmental Entity shall restrain or prohibit this Agreement or
the consummation of the transactions contemplated herein for a period of fifteen
(15) days or longer, the Closing shall be adjourned at the option of either
party for a period of thirty (30) days.  If at the end of such thirty
(30) day period such injunction or Order shall not have been favorably resolved,
either party may, by written notice thereof to the other, terminate this
Agreement, without liability or further obligation hereunder.




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ARTICLE
VI


OTHER
AGREEMENTS




6.1.        Confidentiality.    Each
of the parties hereto shall, and shall cause their respective principals,
officers, directors, shareholders, employees, agents, counsel, auditors, and
other personnel and authorized representatives to, hold in strict confidence,
and not divulge or disclose, any confidential information of any kind concerning
(i) the other parties and their respective principals, officers, directors,
shareholders, employees, agents, counsel, auditors and other personnel and
authorized representatives; (ii) the business or operations of any party to this
Agreement; or (iii) this Agreement, the transactions contemplated hereby, or any
negotiations or discussions between or among the parties hereto in connection
with any of the foregoing, except to the extent that such information is a
matter of public knowledge or is required to be disclosed by law or judicial or
administrative process as may be required by applicable law or as otherwise
contemplated herein. Notwithstanding anything contained herein to the contrary,
the confidentiality obligations of the parties hereto contained in this Section
6.1 shall survive the Closing.




6.2.        Expenses.   Except
as otherwise expressly provided herein, each party hereto will pay its own
expenses incurred in connection with the negotiation of this Agreement, the
performance of their respective obligations hereunder and the consummation of
the transactions contemplated hereby, whether or not consummated.




ARTICLE
VII


SURVIVAL
AND INDEMNIFICATION




7.1.        Survival of Representations
and Warranties.  The representations and warranties contained
in Articles III and IV hereof shall survive the Effective Date for a period of
twelve (12) months, after which all such representations and warranties shall
terminate and be of no further force or effect.




7.2.        Indemnification by the
Seller.  For a period of twelve (12) months after the Effective
Date, the Seller shall indemnify and hold harmless the Purchaser and its
respective officers, directors, employees, agents, and shareholders
(collectively, the “Purchaser Indemnified Parties”) against any Losses incurred
or paid by any Purchaser Indemnified Party, as a result of (i) any breach or
failure of any of the representations and warranties of the Seller contained in
this Agreement or (ii) any breach of, or failure to perform, any agreement or
covenant of the Seller contained in this Agreement; provided that (i) the Seller
shall not be liable under this Section 8.2(a) unless the aggregate amount of
Losses attributable to the events or facts (including a series of related events
or facts) that resulted in such breach of representation, warranty covenant or
agreement is $10,000 or more; and (ii) the Seller’s maximum liability under this
Section 8.2(a) shall not exceed the amount due to be paid to the Seller in the
Employment Agreement for the remaining term of the employment contemplated
there.




7.3.        Indemnification by the
Purchaser.  For a period of twelve (12) months after the
Effective Date, the Purchaser shall indemnify and hold harmless the Seller
against any Losses incurred or paid by the Seller, as a result of (i) any breach
or failure of any of the representations and warranties of the Purchaser
contained in this Agreement or (ii) any breach of, or failure to perform, any
agreement or covenant of the Purchaser contained in this Agreement.


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7.4.        Procedure.  Promptly
(but in no event more than 15 days) after receipt by a Purchaser Indemnified
Party or the Seller (an “Indemnified Party”), as the case may require, of notice
of the commencement of any action, such Indemnified Party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section
7.4, notify in writing the indemnifying party of the commencement thereof. 
In case any such action is brought against any Indemnified Party, and such
Indemnified Party notifies the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, subject to the provisions hereof, with counsel
reasonably satisfactory to such Indemnified Party.  Following notification
to the Indemnified Party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such Indemnified Party under this
Section 7.4 for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense therewith, other than
reasonable costs of investigation.  The Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action, within a reasonable time after notice of commencement of
the action, with counsel reasonably satisfactory to the Indemnified Party; provided however, that the
indemnifying party shall be required to pay for Indemnified Party’s counsel, if
such Indemnified Party shall have reasonably concluded, on reliance of the
written opinion of counsel experienced in such matters, that there may be
defenses available to it or him which are different from or additional to those
available to the indemnifying party (in which case indemnifying parties shall
not have the right to direct the defense of action).  No settlement of any
action against an Indemnified Party shall be made without the consent of the
Indemnified Party, which shall not be unreasonably withheld.  In the event
that any Indemnified Party should have a direct claim against any indemnifying
party hereunder that does not involve any third-party claim or claims asserted
against the Indemnified Party, the Indemnified Party shall transmit to the
indemnifying party a written notice describing in reasonable detail the nature
of the claim, an estimate of the amount of damages attributable to such claim to
the extent feasible (which estimate shall not be conclusive of the final amount
of such claim) and the basis of the Indemnified Party’s request for
indemnification under this Article VII.  The parties agree that the sole
and exclusive remedy which any party hereto shall have against any other party
hereto under this Agreement shall be the right to proceed for compensation or
indemnification in the manner and only to the extent provided in this Article
VII.




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ARTICLE
VIII


MISCELLANEOUS




8.1.        Arbitration. 
Any controversy or claim arising out of or relating to this Agreement that
cannot be resolved and which is the result of a breach or termination of
this Agreement shall be resolved, as follows:




(a)         The
dispute or controversy will be settled finally and exclusively by binding
arbitration in accordance with and through the Commercial  Arbitration
Rules (“Rules”)
of the American Arbitration Association (“AAA”) in effect on
the date of this Agreement.




(b)         The
place of the arbitration shall be Miami, Florida, United States of America. Each
party hereby irrevocably agrees that service of process, summons, notices or
other communications related to the arbitration procedure shall be deemed served
and accepted by the other party if given in the same manner as provided under
the notice provisions of this Agreement. Witnesses residing outside of the State
of Florida may testify telephonically.




(c)         The
language to be used in the arbitration shall be English.




(d)         The
arbitration shall be conducted by one arbitrator.  Upon request, the AAA
will produce a list of 10 potential arbitrators familiar with international
commercial legal issues.  The parties will attempt to agree on one
arbitrator. Failing to agree, the AAA shall appoint an arbitrator pursuant to
the Rules.




(e)         Judgment
upon the written award rendered by the arbitrator may be entered in any court or
record of competent jurisdiction in any country, or application may be made to
such court of judicial acceptance of the award and an order of enforcement, as
the law of such jurisdiction may require or allow.




(f)          The
cost of the arbitration proceedings shall be determined under the respective
rules for cost of arbitration of the AAA in effect at the time of the request
for arbitrations.   All expenses of the arbitration, including
reasonable attorney’s fees, shall be borne by the losing party to the
arbitration or, as the case may be, shall be prorated to properly reflect any
partial prevailing or losing of the parties to the arbitration, as determined by
the arbitrators in the written award.




(g)         The
panel of arbitrators specifically shall have the power to grant equitable relief
upon request of either party.




8.2.        Entire
Agreement.  This Agreement, together with the Exhibits and
Schedules hereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into this Agreement and the Exhibits and Schedules
hereto.




8.3.        Notices.  All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (c)
three business days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) two business days after
deposit with recognized overnight courier, specifying next day delivery, with
written verification of receipt.  The address for all notices, requests,
consents and other communications hereunder to the parties to this Agreement
shall be delivered or sent to the following:




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If to the
Seller:




Stephen
Strother


2280 Wren
Road SE


Conyers,
Georgia 30058


Email:
ss@arlive.com





If to the
Purchaser:





Music1,
LLC


1450
South Miami Avenue


Miami, FL
33131


Attn:  Mike
Zoi, President


Email:
mzoi@Music1.com





With a
copy to:





Curtis
Wolfe


1450
South Miami Avenue


Miami, FL
33131


Email:
cwolfe@Music1.com





Or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.





8.4.        Amendments;
Waivers.  No provision of this Agreement may be amended except
by a written instrument signed by the Purchaser and the Seller.   No
provision of this Agreement may be waived except in a written instrument
signed by the party against whom enforcement of any such waiver is sought. 
No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.




8.5.        Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
  8.6.        Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns.  The
Seller may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser.  The Purchaser may
assign this Agreement or any of the rights or obligations hereunder without the
prior written consent of the Seller.
  8.7.        No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.




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8.8.        Governing Law; Consent to
Jurisdiction.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Florida without regard to the principles of conflicts of law
thereof.




8.9.        Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page were an original
thereof.




8.10.      Severability.  In
case any one or more of the provisions of this Agreement shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this
Agreement.




8.11.      Interpretation.  The
Section headings in this Agreement are for convenience of reference only and
shall not be deemed to alter or affect the meaning or interpretation of any
provision hereof.  The language used in this Agreement will be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party hereto.  The
disclosure of any matter in any portion of the Disclosure Schedules hereto shall
be deemed to be a disclosure for all purposes of this Agreement to which such
matter could reasonably be likely to be pertinent, but shall expressly not be
deemed to constitute an admission by the Seller or the Purchaser, as the case
may be, or to otherwise imply, that any such matter is material for the purposes
of this Agreement.




ARTICLE
IX


DEFINITIONS




9.1.        When
used in this Agreement, and in addition to the other terms defined herein, the
following terms shall have the meanings specified:




(a)         Affiliate.  “Affiliate”
shall mean, in relation to any party hereto, any entity directly or indirectly
controlling, controlled by or under common control with such party.




(b)         Agreement.  “Agreement”
shall mean this Membership Interest Purchase Agreement, together with the
Exhibits attached hereto and the Disclosure Schedule, as the same may be amended
from time to time in accordance with the terms hereof.




(c)         Control.  “Control”
(including the terms “controlling,” “controlled by,” and “under common control
with”), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities or by
contract.


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(d)         Change of
Control.  “Change of Control” shall mean (i) the merger or
consolidation of the Purchaser with or into any other corporation or entity, or
the merger or consolidation of any other corporation or entity into or with the
Purchaser, which results in the Purchaser or those persons who are shareholders
of the Purchaser as of the date hereof holding less than fifty percent (50%) in
voting power of the outstanding capital stock of the surviving corporation; (ii)
any sale or transfer in a single transaction or series of related transactions
of all or substantially all of the Company’s assets as of the transaction date
(or the date of the first transaction in a series of related transactions);
(iii) a third Person or Persons (who is or are not the Seller or shareholders of
the Purchaser as of the date hereof) becomes the beneficial owner (as such term
is in the Securities Exchange Act of 1934, as amended) of shares of the
Purchaser having more than fifty percent (50%) of the voting power of the
outstanding capital stock of the Purchaser; or (iv) any transaction or series of
related transactions in which a third Person or Persons (who is or are not the
Seller or shareholders of the Purchaser as of the date hereof), appoints or
elects a majority of the Board of Directors of the Company.




(e)         Disclosure
Schedule.  “Disclosure Schedule” shall mean the Disclosure
Schedule delivered by the Seller to Music1 pursuant to Section 2.2 of this
Agreement.




(f)          Effective
Date.  “Effective Date” shall mean the date on which the
parties hereto have signed and delivered this Agreement.




(g)         Governmental
Entity.  “Governmental Entity” shall mean any federal, state,
local or foreign court, arbitral tribunal, administrative agency or commission
or other governmental or regulatory authority or administrative
agency.




(h)         Indebtedness.  “Indebtedness”
shall mean all liabilities or obligations of A&R Music Live, whether primary
or secondary or absolute or contingent, in excess of $10,000 as to any single
item: (a) for borrowed money; or (b) evidenced by notes, bonds, debentures or
similar instruments; or (c) secured by Liens on any assets of A&R Music
Live.




(i)       Knowledge.  “Knowledge”
shall mean actual knowledge without independent investigation of Stephen
Strother or any officer or manager of the respective company who should, based
on his or her responsibilities, reasonably be expected to have such
knowledge.




(j)       Law.  “Law”
shall mean any foreign, federal, state or local governmental law, rule,
regulation or requirement, including any rules, regulations and orders
promulgated thereunder and any orders, decrees, consents or judgments of any
governmental regulatory agencies and courts having the force of law, other than
any Environmental Laws.




(k)       Lien.  “Lien”
shall mean, with respect to any asset (real, personal or mixed): (a) any
mortgage, pledge, lien, easement, lease, title defect or imperfection or any
other form of security interest, whether imposed by Law or by contract; and (b)
the interest of a vendor or lessor under any conditional sale agreement,
financing lease or other title retention agreement relating to such
asset.




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(l)        Loss.  “Loss”
shall mean any and all damages (including incidental and consequential damages),
assessments, fines, penalties, deficiencies, losses, judgments, amounts paid in
settlement or diminution in value, costs and expenses (including, without
limitation, interest, court costs, reasonable fees and expenses of attorneys,
accountants and other experts or other reasonable expenses incurred in
investigating, preparing, defending against or prosecuting any litigation or
claim, action, suit, proceeding or demand).




(m)      Material Adverse
Effect.  “Material Adverse Effect” shall mean a material
adverse effect on the business, condition (financial or otherwise), results of
operations, assets, liabilities, prospects, liquidity or properties of A&R
Music Live or Music1 as applicable, each taken as a whole.




(n)      Permitted
Liens.  “Permitted Liens” shall mean those of the Existing
Liens that do not materially detract from the value of the property or assets of
A&R Music Live taken as a whole subject thereto and do not materially impair
the business or operations of A&R Music Live.




(o)      Person.  “Person”
shall mean a natural person, corporation, limited liability company,
association, joint stock company, trust, partnership, governmental entity,
agency or branch or department thereof, or any other legal entity.




(p)      Subsidiary.  “Subsidiary”
shall mean any corporation, at least a majority of the outstanding capital stock
of which (or any class or classes, however designated, having ordinary voting
power for the election of at least a majority of the board of directors of such
corporation) shall at the time be owned by the relevant Person directly or
through one or more corporations which are themselves Subsidiaries.




(q)       “Transaction
Agreements” shall mean this Agreement, the Employment Agreement, and any
other agreements contemplated in this Agreement.




[Signatures
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IN
WITNESS WHEREOF, the parties hereto have caused this Membership Interest
Purchase Agreement to be duly executed by their respective authorized
signatories as of the Effective Date.




PURCHASER:MUSIC1,
      LLCBy:
                      /s/ Mike
Zoi


Name:
                Mike
      ZoiTitle:
                Managing
      MemberSELLER:/s/ Stephen StrotherName:
                Stephen
      Strother