STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT, made as of this 1st day of April, 2000, by
and between:
ARCTURUS VENTURES, INC., a Nevada corporation with its principal office
located at 00 Xxxxxxxx Xxxxxxx, Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
(hereinafter "ISSUER")
AND
OLDE MONMOUTH CAPITAL CORP., a New Jersey corporation with its
principal office located at 00 Xxxxxxxx Xxxxxxx, Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxx
00000 (hereinafter "FOUNDER")
WITNESSETH THAT:
WHEREAS, OLDE MONMOUTH CAPITAL CORP. is the founder of ISSUER, which
has been organized as a "blank check" company as defined is SEC Rule 419;
WHEREAS, OLDE MONMOUTH CAPITAL CORP. desires to assure compliance with
SEC rules and regulations applicable to Rule 419 blank check companies and
thereby assure a potential target company that following its merger or
acquisition the NASD will be authorized to permit trading in the ISSUER's Common
Stock;
NOW, THEREFORE, intending to be legally bound and in consideration of the mutual
promises and covenants contained herein intending the target Company as a third
party beneficiary hereof to rely upon this Standstill Agreement, the parties
agree as follows:
1. FOUNDER is the owner of 500,000 shares of the Common Stock of ISSUER.
2. In consideration of the commitments of ISSUER set forth in Paragraph 3
following, FOUNDER agrees that notwithstanding any SEC rule or regulation,
including specifically Rule 144, now existing or hereafter adopted, which would
permit earlier sale, transfer, pledge hypothecation or disposition, other than
pursuant to an effective Registration Statement as provided in Paragraph 3
following, that it will not, for purposes of Rule 144, be deemed to have
commenced the holding period required by Rule 144 until that date on which the
merger or acquisition is consummated after the reconfirmation vote required by
Rule 419.
(b) ISSUER is hereby authorized by FOUNDER to:
(i) instruct its transfer agent to place a restrictive legend on the
face of the certificates issued to them stating that"
"The shares represented by this certificate are subject to a
Standstill Agreement of
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April 1, 2000 and may not be sold, transferred, pledged,
hypothecated or disposed of except in accordance with such
Standstill Agreement"; and
(ii) instruct its transfer agent to place "stop transfer" instructions
against the certificate issued to it, subject to the requirement that such
instructions not be released until it provides an opinion of its counsel that
there has been compliance with the terms of this Paragraph 2 of this Standstill
Agreement.
3. In consideration of the Standstill obligations set forth in Paragraph 2
above, ISSUER agrees that in any agreement with a target company for its merger
or acquisition, it will require that:
(i) the target Company shall agree that within fifteen (15) days
following the consummation of the merger or acquisition it will file a Form 8-K
containing all the information as would be required if Rule 12(g)3(a) applied,
and as required for Form 10-KSB, and shall clear all comments thereon with all
due speed, in good faith.
(ii) the target company shall agree that, assuming a merger or a
acquisition is consummated, it will make all filings, including the Form 8-K
referred to above, required under the Securities Ac t of 1934 on a timely basis
so as to maintain the applicability of Rule 144; and
(iii) the target company shall provide piggyback registration rights to
FOUNDER so that in the event ISSUER files a 1933 Act Registration Statement with
the SEC it will notify FOUNDER and upon request include its shares in such
Registration Statement at no cost to it.
4. This Standstill Agreement shall not be subject to amendment, except as may be
required to comply with any SEC or NASD rule, regulation or requirement.
5. The parties agree that the target company is intended to be a third party
beneficiary of this Standstill Agreement and shall have standing to enforce the
terms hereof.
6. The parties agree that the validity, interpretation, and performance of this
Standstill Agreement shall be controlled by and construed under the laws of the
State of Nevada. Venue and jurisdiction of any controversy or claim arising out
of, or relating to this Standstill Agreement, or the breach thereof, shall be in
Newark, New Jersey. In any legal action or other proceeding involving, arising
out of or in any way relating to this Standstill Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs, and expenses of
litigation.
7. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
8. The provisions of this Agreement shall be binding upon and inure to the
benefit of each of the parties and their respective successors and assigns.
9. The failure of either party to object to, or to take affirmative action with
respect to, any conduct of the other party which is in violation of the terms of
this Agreement shall not be construed as a waiver of such violation or breach,
or of any future breach, violation, or wrongful conduct. No delay or failure by
any party to exercise any right under this Agreement, and no
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partial or single exercise of that right, shall constitute a waiver or
exhaustion of that or any other right, unless otherwise expressly provided
herein.
8. All notices or other communications to be sent as provided for by this
Standstill Agreement shall be in writing and shall be sent by certified mail,
return receipt requested, postage prepaid, to the persons and addresses set
forth at the beginning of this Standstill Agreement, or such other persons
and/or addresses as may hereafter be designated in writing by the parties.
IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Agreement the day and year first above written:
WITNESS: STOCKHOLDER:
OLDE MONMOUTH CAPITAL CORP.
By: /s/ Xxxxxxx Xxxxxxx
-------------------
President
ARCTURUS VENTURES, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------
President
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