EXHIBIT 10.1
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STOCK PURCHASE AGREEMENT
BETWEEN
AVENUE GROUP, INC.
AND
XXXXXXX PARK INVESTMENTS PLC
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JULY 19, 2004
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TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS...........................................................................1
1.1 Certain Definitions.............................................................................1
ARTICLE II PURCHASE AND SALE OF SHARES...................................................................4
2.1 Purchase and Sale; Purchase Price...............................................................4
2.2 Execution and Delivery of Documents; The Closing................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES...............................................................5
3.1 Representations, Warranties and Agreements of the Target Company................................5
3.2 Representations and Warranties of Xxxxxxx.......................................................8
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES..............................................................11
4.1 Manner of Offering.............................................................................11
4.2 Notice of Certain Events.......................................................................12
4.3 Blue Sky Laws..................................................................................12
4.4 Integration....................................................................................12
4.5 Furnishing of Rule 144(c) Materials............................................................12
4.6 Solicitation Materials.........................................................................12
4.7 Listing of Common Stock........................................................................13
4.8 Indemnification................................................................................13
4.9 Sale of Xxxxxxx Shares.........................................................................15
4.10 Lock Up by Xxxxxxx.............................................................................15
4.11 London Stock Exchange..........................................................................15
ARTICLE V MISCELLANEOUS................................................................................15
5.1 Fees and Expenses..............................................................................15
5.2 Entire Agreement...............................................................................15
5.3 Notices........................................................................................15
5.4 Amendments; Waivers............................................................................16
5.5 Headings.......................................................................................16
5.6 Successors and Assigns.........................................................................16
5.7 No Third Party Beneficiaries...................................................................17
5.8 Governing Law; Venue; Service of Process.......................................................17
5.9 Survival.......................................................................................17
5.10 Counterpart Signatures.........................................................................17
5.11 Publicity......................................................................................17
5.12 Severability...................................................................................17
5.13 Limitation of Remedies.........................................................................17
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LIST OF SCHEDULES:
Schedule 3.1(a) Subsidiaries
Schedule 3.1(c) Capitalization and Registration Rights
Schedule 3.1(e) Conflicts
Schedule 3.1(f) Consents and Approvals
Schedule 3.1(g) Litigation
Schedule 3.1(h) Defaults and Violations
LIST OF EXHIBITS:
Exhibit A Escrow Agreement
Exhibit B Officer's Certificate
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THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of July 15, 2004, between Avenue Group, Inc., a corporation organized
and existing under the laws of the State of Delaware (the "Target Company"), and
Xxxxxxx Park Investments PLC, a corporation organized under the laws of England
and Wales with its offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (
"Xxxxxxx").
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Target Company desires to issue and sell to Xxxxxxx and Xxxxxxx
desires to acquire from the Target Company the shares of the Target Company's
common stock, par value $.0002 (the "Common Stock") for the Total Purchase
Price. The consideration to be paid by Xxxxxxx for the Common Stock shall be
subject to certain downside price protection (the "Downside Price Protection")
provided in Section 2 of the Escrow Agreement.
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Target Company and Xxxxxxx agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Attorney-in-Fact" means Gottbetter & Partners, LLP, 000 Xxxxxxx
Xxxxxx, 00 Xxxxx, Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Business Day" means any day except Saturday, Sunday, any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.
"Change of Control" means the acquisition, directly or indirectly, by
any Person of ownership of, or the power to direct the exercise of voting power
with respect to, a majority of the issued and outstanding voting shares of the
Target Company.
"Closing" shall have the meaning set forth in Section 2.2(a) hereof.
"Closing Bid Price" shall mean the closing bid price for a share of
Common Stock on such date on the OTCBB (or such other exchange, market, or other
system that the Common Stock is then traded on), as reported on Bloomberg, L.P.
(or similar organization or agency succeeding to its functions of reporting
prices).
"Closing Date" shall have the meaning set forth in Section 2.2(a)
hereof.
"Closing Price" shall be the closing bid price of the Common Stock on
the day of Closing.
"Common Stock" shall have the meaning in the recital.
"Consideration Stock" shall have the meaning set forth in Section
2.1(a) hereof.
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"Control Person" shall have the meaning set forth in Section 4.8(a)
hereof.
"Default" means any event or condition which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Disclosure Documents" means the Target Company's reports filed under
the Exchange Act with the SEC.
"Downside Price Protection" shall have the meaning in the recital.
"Escrow Agent" means Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, 00
Xxxxx, Xxx Xxxx, XX 00000; Tel: 000-000-0000; Fax: 000-000-0000.
"Escrow Agreement" means the escrow agreement, dated the date hereof,
by and among the Target Company, Xxxxxxx and the Escrow Agent annexed hereto as
EXHIBIT A.
"Event of Default" shall have the meaning set forth in Section 5.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Execution Date" means the date of this Agreement first written above.
"Indemnified Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"Indemnifying Party" shall have the meaning set forth in Section 4.8(b)
hereof.
"G&P" means Gottbetter & Partners, LLP.
"Xxxxxxx" shall have the meaning in the introductory paragraph.
"Xxxxxxx Consideration Shares" shall have the meaning in Section 2.1(c)
hereof.
"Xxxxxxx Escrow Shares" means the Xxxxxxx Consideration Shares
deposited into escrow by the Target Company under the terms of the Escrow
Agreement in EXHIBIT A.
"Xxxxxxx Protection Shares" means the Xxxxxxx Escrow Shares that the
Target Company is required to sell to Xxxxxxx under the terms of the Escrow
Agreement in EXHIBIT A.
"Xxxxxxx Shares" shall mean ordinary shares of 1.0p each in Xxxxxxx.
"Losses" shall have the meaning set forth in Section 4.8(a) hereof.
"Material" shall mean having a financial consequence in excess of
$25,000.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a).
"NASD" means the National Association of Securities Dealers, Inc.
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"Nasdaq" shall mean the Nasdaq Stock Market, Inc.(R)
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"OTCBB" shall mean the NASD over-the counter Bulletin Board(R).
"Per Share Market Value" of the Common Stock means on any particular
date (a) the last sale price of shares of Common Stock on such date or, if no
such sale takes place on such date, the last sale price on the most recent prior
date, in each case as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading, or (b)
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if the Common Stock is not then listed or admitted to trading on any national
securities exchange, the closing bid price per share as reported by Nasdaq, or
(c) if the Common Stock is not then listed or admitted to trading on the Nasdaq,
the closing bid price per share of the Common Stock on such date as reported on
the OTCBB or if there is no such price on such date, then the last bid price on
the date nearest preceding such date, or (d) if the Common Stock is not quoted
on the OTCBB, the closing bid price for a share of Common Stock on such date in
the over-the-counter market as reported by the Pinksheets LLC (or similar
organization or agency succeeding to its functions of reporting prices) or if
there is no such price on such date, then the last bid price on the date nearest
preceding such date, or (e) if the Common Stock is no longer publicly traded,
the fair market value of a share of the Common Stock as determined by an
appraiser selected in good faith by Xxxxxxx and the Target Company.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"Reporting Issuer" means a company that is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.
"Required Approvals" shall have the meaning set forth in Section
3.1(f).
"Securities" means the Common Stock and stock of any other class into
which such shares may hereafter have been reclassified or changed.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiaries" shall have the meaning set forth in Section 3.1(a).
"Target Company" shall have the meaning set forth in the introductory
paragraph.
"Total Purchase Price" shall have the meaning in the recital.
"Trading Day" means (a) a day on which the Common Stock is quoted on
Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock has
been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or
any stock exchange, a day on which the Common Stock is quoted in the
over-the-counter market, as reported by the Pinksheets LLC (or any similar
organization or agency succeeding its functions of reporting prices).
"Transaction Documents" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.
"U.S." means the United States.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale; Purchase Price.
(a) Subject to the terms and conditions set forth herein, the
Target Company shall issue and sell and Xxxxxxx shall purchase an amount of the
Target Company's Common Stock (the "Consideration Stock") which has a value
equal to US$11,000,000 calculated pursuant to Section 2.1(b) below (the "Total
Purchase Price").
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(b) The number of shares of Consideration Stock having a value
equal to Total Purchase Price shall be calculated by dividing the Total Purchase
Price by the average of the Closing Bid Price per share of Common Stock during
the ten (10) Trading Days immediately preceding July 30, 2004.
(c) The Total Purchase Price shall be paid by delivery to the
Target Company of the number of Xxxxxxx Shares (the "Xxxxxxx Consideration
Shares") equal to the Total Purchase Price divided by the conversion rate of the
British Pound Sterling to purchase US Dollars determined below on the July 30,
2004. The Xxxxxxx Shares shall have a value of (pound)1 per share. The number of
Xxxxxxx Shares to be issued will be based on the conversion rate of the British
Pound Sterling to the US Dollar in effect as of the close of business on the day
preceding the closing of the transaction, as quoted by Xxxxxx & Co. as the
commercial rate it gives to purchase US Dollars. For example, if the effective
conversion rate is $1.80/(pound) 1 and the Total Purchase Price, then the number
of Xxxxxxx Shares the Target Company will receive shall equal the
$11,000,000/$1.80, or 6,111,111 Xxxxxxx Shares. The Xxxxxxx Consideration Shares
shall be subject to the "Downside Price Protection" provided in Section 2 of the
Escrow Agreement.
2.2 Execution and Delivery of Documents; The Closing.
(a) The Closing of the purchase and sale of the shares of
Consideration Stock (the "Closing") shall take place within sixty (60) days from
the date hereof (the "Closing Date"). On the Closing Date,
(i) the Target Company shall execute and deliver to the Escrow
Agent a certificate in the name of Xxxxxxx representing shares of Consideration
Stock;
(ii) the Target Company shall execute and deliver to Xxxxxxx a
certificate of its President, in the form of EXHIBIT B annexed hereto,
certifying that attached thereto is a copy of resolutions duly adopted by the
Board of Directors of the Target Company authorizing the Target Company to
execute and deliver the Transaction Documents and to enter into the transactions
contemplated thereby;
(iii) the Target Company, Xxxxxxx and the Escrow Agent shall
execute and deliver to each other the Escrow Agreement; and
(iv) Xxxxxxx shall deliver the Xxxxxxx Consideration Shares to
the Escrow Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations, Warranties and Agreements of the Target
Company. The Target Company hereby makes the following representations and
warranties to Xxxxxxx, all of which shall survive the Closing:
(a) Organization and Qualification. The Target Company is a
corporation, duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, 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 Target Company has no subsidiaries other than as set
forth on SCHEDULE 3.1(A) attached hereto (collectively, the "Subsidiaries").
Each of the Subsidiaries is a corporation, duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
with the full corporate power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Each of the Target
Company and the material Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not, individually or in the aggregate, have a material
adverse effect on the results of operations, assets, prospects, or financial
condition of the Target Company and the Subsidiaries, taken as a whole (a
"Material Adverse Effect").
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(b) Authorization, Enforcement. The Target Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated hereby and by each other Transaction Document and to
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement and each of the other Transaction Documents by
the Target Company and the consummation by it of the transactions contemplated
hereby and thereby has been duly authorized by all necessary action on the part
of the Target Company. Each of this Agreement and each of the other Transaction
Documents has been or will be duly executed by the Target Company and when
delivered in accordance with the terms hereof or thereof will constitute the
valid and binding obligation of the Target Company enforceable against the
Target Company in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
(c) Capitalization. The authorized, issued and outstanding
capital stock of the Company is set forth on SCHEDULE 3.1(C). No shares of
Common Stock are entitled to preemptive or similar rights, nor is any holder of
the Common Stock entitled to preemptive or similar rights arising out of any
agreement or understanding with the Target Company by virtue of this Agreement.
Except as disclosed in SCHEDULE 3.1(C), there are no outstanding options,
warrants, script, rights to subscribe to, registration rights, calls or
commitments of any character whatsoever relating to securities, rights or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Target Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
Neither the Target Company nor any Subsidiary is in violation of any of the
provisions of its Certificate of Incorporation, bylaws or other charter
documents.
(d) Issuance of Securities. The shares of Consideration Stock
have been duly and validly authorized for issuance, offer and sale pursuant to
this Agreement and, when issued and delivered as provided hereunder against
payment in accordance with the terms hereof, shall be valid and binding
obligations of the Target Company enforceable in accordance with their
respective terms.
(e) No Conflicts. The execution, delivery and performance of
this Agreement and the other Transaction Documents by the Target Company and the
consummation by the Target Company of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of its
Certificate of Incorporation or bylaws (each as amended through the date hereof)
or (ii) be subject to obtaining any consents except those referred to in Section
3.1(f), conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any material
agreement, indenture or instrument to which the Target Company is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Target Company or its Subsidiaries is subject (including, but not
limited to, those of other countries and the federal and state securities laws
and regulations), or by which any property or asset of the Target Company or its
Subsidiaries is bound or affected, except in the case of clause (ii), such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect. To the best of its knowledge, the business of the Target Company
and its Subsidiaries is not being conducted in violation of any law, ordinance
or regulation of any governmental authority.
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(f) Consents and Approvals. Except as specifically set forth
in SCHEDULE 3.1(F), neither the Target Company nor any Subsidiary is required to
obtain any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Target Company of this Agreement and each of the
other Transaction Documents (together with the consents, waivers,
authorizations, orders, notices and filings referred to in SCHEDULE 3.1(F), the
"Required Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed
in SCHEDULE 3.1(G), there is no action, suit, notice of violation, proceeding or
investigation pending or, to the best knowledge of the Target Company,
threatened against or affecting the Target Company or any of its Subsidiaries or
any of their respective properties before or by any court, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) which (i) relates to or challenges the legality, validity or
enforceability of any of the Transaction Documents or the shares of
Consideration Stock, (ii) could, individually or in the aggregate, have a
Material Adverse Effect or (iii) could, individually or in the aggregate,
materially impair the ability of the Target Company to perform fully on a timely
basis its obligations under the Transaction Documents.
(h) No Default or Violation. Except as set forth in SCHEDULE
3.1(H) hereto, neither the Target Company nor any Subsidiary (i) is in default
under or in violation of any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, except such conflicts or defaults as do not have a Material
Adverse Effect, (ii) is in violation of any order of any court, arbitrator or
governmental body, except for such violations as do not have a Material Adverse
Effect, or (iii) is in violation of any statute, rule or regulation of any
governmental authority which could (individually or in the aggregate) (a)
adversely affect the legality, validity or enforceability of this Agreement, (b)
have a Material Adverse Effect or (c) adversely impair the Target Company's
ability or obligation to perform fully on a timely basis its obligations under
this Agreement in any material way.
(i) Disclosure Documents. The Disclosure Documents are
accurate in all material respects and do not contain any untrue statement of
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(j) Non-Registered Offering. Neither the Target Company nor
any Person acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of the Target Company under
circumstances which would require the integration of such offering with the
offering of the Securities under the Securities Act) which might subject the
offering, issuance or sale of the Securities to the registration requirements of
Section 5 of the Securities Act.
(k) Placing Agent. The Target Company accepts and agrees that
Dungarvon Associates, Inc. ("Dungarvon") is acting for Xxxxxxx and does not
regard any person other than Xxxxxxx as its customer in relation to this
Agreement, and that it has not made any recommendation to the Target Company, in
relation to this Agreement and is not advising the Target Company, with regard
to the suitability or merits of the Xxxxxxx Shares and in particular Dungarvon
has no duties or responsibilities to the Target Company for the best execution
of the transaction contemplated by this Agreement.
(l) Private Placement Representations. The Target Company (i)
has received and carefully reviewed such information and documentation relating
to Xxxxxxx that the Target Company has requested, including, without limitation,
Xxxxxxx'x Confidential Private Offering Memorandum dated June 17, 2004; (ii) has
had a reasonable opportunity to ask questions of and receive answers from
Xxxxxxx concerning the Xxxxxxx Shares, and all such questions, if any, have been
answered to the full satisfaction of the Target Company; (iii) has such
knowledge and expertise in financial and business matters that it is capable of
evaluating the merits and risks involved in an investment in the Xxxxxxx Shares;
(iii) understands that Xxxxxxx has determined that the exemption from the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), provided by Section 4(2) of the Securities Act is applicable
to the offer and sale of the Xxxxxxx Shares, based, in part, upon the
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representations, warranties and agreements made by the Target Company herein;
and (iv) except as provided herein and in the Private Placement Memorandum,
dated June 17, 2004, no representations or warranties have been made to the
Target Company by Xxxxxxx or any agent, employee or affiliate of Xxxxxxx and in
entering into this transaction the Target Company is not relying upon any
information, other than the results of independent investigation by the Target
Company.
Xxxxxxx acknowledges and agrees that the Target Company makes no representation
or warranty with respect to the transactions contemplated hereby other than
those specifically set forth in Section 3.1 hereof.
3.2 Representations and Warranties of Xxxxxxx. Xxxxxxx hereby
represents and warrants to the Target Company as follows:
(a) Organization; Authority. Xxxxxxx is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation with the requisite power and authority to enter
into and to consummate the transactions contemplated hereby and by the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The acquisition of the shares of Consideration Stock to be purchased
by Xxxxxxx hereunder has been duly authorized by all necessary action on the
part of Xxxxxxx. This Agreement has been duly executed and delivered by Xxxxxxx
and constitutes the valid and legally binding obligation of Xxxxxxx, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to, or affecting generally the enforcement of, creditors
rights and remedies or by other general principles of equity. Xxxxxxx is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not, individually or
in the aggregate, have a Material Adverse Effect.
(b) Investment Intent. Xxxxxxx is acquiring the shares of
Consideration Stock to be purchased by it hereunder, for its own account for
investment purposes only and not with a view to or for distributing or reselling
such shares of Consideration Stock, or any part thereof or interest therein,
without prejudice, however, to Xxxxxxx'x right, subject to the provisions of
this Agreement, at all times to sell or otherwise dispose of all or any part of
such shares of Consideration Stock in compliance with applicable federal and
state securities laws.
(c) Experience of Xxxxxxx. Xxxxxxx, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of an investment in the shares of Consideration Stock to be acquired by it
hereunder, and has so evaluated the merits and risks of such investment.
(d) Ability of Xxxxxxx to Bear Risk of Investment. Xxxxxxx is
able to bear the economic risk of an investment in the Securities to be acquired
by it hereunder and, at the present time, is able to afford a complete loss of
such investment.
(e) Access to Information. Xxxxxxx acknowledges that it has
been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Target Company
concerning the terms and conditions of the Securities offered hereunder and the
merits and risks of investing in such securities; (ii) access to information
about the Target Company and the Target Company's financial condition, results
of operations, business, properties, management and prospects sufficient to
enable it to evaluate its investment in the Securities; and (iii) the
opportunity to obtain such additional information which the Target Company
possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the investment
and to verify the accuracy and completeness of the information that it has
received about the Target Company.
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(f) Reliance. Xxxxxxx understands and acknowledges that (i)
the shares of Consideration Stock being offered and sold to it hereunder are
being offered and sold without registration under the Securities Act in a
private placement that is exempt from the registration provisions of the
Securities Act under Section 4(2) of the Securities Act and (ii) the
availability of such exemption depends in part on, and that the Target Company
will rely upon the accuracy and truthfulness of, the foregoing representations
and Xxxxxxx hereby consents to such reliance.
(g) Regulation X. Xxxxxxx understand and acknowledge that (A)
the shares of Consideration Stock have not been registered under the Securities
Act, are being sold in reliance upon an exemption from registration afforded by
Regulation S; and that such shares of Consideration Stock have not been
registered with any state securities commission or authority; (B) pursuant to
the requirements of Regulation S, the shares of Consideration Stock may not be
transferred, sold or otherwise exchanged unless in compliance with the
provisions of Regulation S and/or pursuant to registration under the Securities
Act, or pursuant to an available exemption hereunder; and (C) Xxxxxxx is under
no obligation to register the shares of Consideration Stock under the Securities
Act or any state securities law, or to take any action to make any exemption
from any such registration provisions available.
Xxxxxxx is not a U.S. person and is not acquiring the shares of
Consideration Stock for the account of any U.S. person; (B) no director or
executive officer of Xxxxxxx is a national or citizen of the United States; and
(C) it is not otherwise deemed to be a "U.S. Person" within the meaning of
Regulation X.
Xxxxxxx was not formed specifically for the purpose of acquiring the
shares of Consideration Stock purchased pursuant to this Agreement.
Xxxxxxx is purchasing the shares of Consideration Stock for its own
account and risk and not for the account or benefit of a U.S. Person as defined
in Regulation S and no other person has any interest in or participation in the
shares of Consideration Stock or any right, option, security interest, pledge or
other interest in or to the shares of Consideration Stock. Xxxxxxx understands,
acknowledges and agrees that it must bear the economic risk of its investment in
the shares of Consideration Stock for an indefinite period of time and that
prior to any such offer or sale, the Target Company may require, as a condition
to effecting a transfer of the shares of Consideration Stock, an opinion of
counsel, acceptable to the Target Company, as to the registration or exemption
therefrom under the Securities Act and any state securities acts, if applicable.
Xxxxxxx will, after the expiration of the Restricted Period, as set
forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or
otherwise transfer the shares of Consideration Stock only in accordance with
Regulation S, or pursuant to an available exemption under the Securities Act
and, in any case, in accordance with applicable state securities laws. The
transactions contemplated by this Agreement have neither been pre-arranged with
a purchaser who is in the U.S. or who is a U.S. Person, nor are they part of a
plan or scheme to evade the registration provisions of the United States federal
securities laws.
The offer leading to the sale evidenced hereby was made in an "offshore
transaction." For purposes of Regulation S, Xxxxxxx understands that an
"offshore transaction" as defined under Regulation S is any offer or sale not
made to a person in the United States and either (A) at the time the buy order
is originated, the purchaser is outside the United States, or the seller or any
person acting on his behalf reasonably believes that the purchaser is outside
the United States; or (B) for purposes of (1) Rule 903 of Regulation S, the
transaction is executed in, or on or through a physical trading floor of an
established foreign exchange that is located outside the United States or (2)
Rule 904 of Regulation S, the transaction is executed in, on or through the
facilities of a designated offshore securities market, and neither the seller
nor any person acting on its behalf knows that the transaction has been
prearranged with a buyer in the U.S.
Neither Xxxxxxx nor any affiliate or any person acting on Xxxxxxx'x
behalf, has made or is aware of any "directed selling efforts" in the United
States, which is defined in Regulation S to be any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the shares of
Consideration Stock being purchased hereby.
Xxxxxxx understands that the Target Company is the seller of the shares
of Consideration Stock which are the subject of this Agreement, and that, for
purpose of Regulation S, a "distributor" is any underwriter, dealer or other
person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation S and that
8
an "affiliate" is any partner, officer, director or any person directly or
indirectly controlling, controlled by or under common control with any person in
question. Xxxxxxx agrees that Xxxxxxx will not, during the Restricted Period set
forth under Rule 903(b)(iii)(A), act as a distributor, either directly or though
any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the
shares of Consideration Stock other than to a non-U.S. Person.
Xxxxxxx acknowledges that the shares of Consideration Stock will bear a
legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT.
(h) Issuance of Xxxxxxx Consideration Shares. The shares of
Xxxxxxx Consideration Shares have been duly and validly authorized for issuance,
offer and sale pursuant to this Agreement and, when issued and delivered as
provided hereunder against payment in accordance with the terms hereof, shall be
valid and binding obligations of Xxxxxxx enforceable in accordance with their
respective terms.
(i) Consents and Approvals. Except for the admission for
listing on the London Stock Exchange, Xxxxxxx is not required to obtain any
consent, waiver, authorization or order of, or make any filing or registration
with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by
Xxxxxxx of this Agreement and each of the other Transaction Documents.
The Target Company acknowledges and agrees that Xxxxxxx makes no representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Manner of Offering. The Securities are being issued pursuant to
section 4(2) of the Securities Act and Regulation S thereunder. The Xxxxxxx
Consideration Shares are being issued pursuant to section 4(2) of the Securities
Act and Rule 506 of Regulation D thereunder.
4.2 Notice of Certain Events. The Target Company shall, on a continuing
basis, when disclosed by way of public announcement or filing with the SEC (i)
advise Xxxxxxx promptly after obtaining knowledge of, and, if requested by
Xxxxxxx, confirm such advice in writing, of (A) the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of the shares of Consideration Stock, for offering
or sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority, or (B)
any event that makes any statement of a material fact made by the Target Company
in Section 3.1 or in the Disclosure Documents untrue or that requires the making
9
of any additions to or changes in Section 3.1 or in the Disclosure Documents in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
from qualification of the Securities under any state securities or Blue Sky
laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Securities under any such laws, and use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
4.3 Blue Sky Laws. The Target Company agrees that it will execute all
necessary documents and pay all necessary state filing or notice fees to enable
the Target Company to sell the Securities to Xxxxxxx.
4.4 Integration. The Target Company shall not and shall use its best
efforts to ensure that no Affiliate shall sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to Xxxxxxx.
4.5 Furnishing of Rule 144(c) Materials. The Target Company shall, for
so long as any of the Securities remain outstanding and during any period in
which the Target Company is not subject to Section 13 or 15(d) of the Exchange
Act, make available to any registered holder of the Securities ("Holder" or
"Holders") in connection with any sale thereof and any prospective purchaser of
such Securities from such Person, such information in accordance with Rule
144(c) promulgated under the Securities Act as is required to sell the
Securities under Rule 144 promulgated under the Securities Act.
4.6 Solicitation Materials. The Target Company shall not (i) distribute
any offering materials in connection with the offering and sale of the shares of
Consideration Stock other than the Disclosure Documents and any amendments and
supplements thereto prepared in compliance herewith or (ii) solicit any offer to
buy or sell the shares of Consideration Stock by means of any form of general
solicitation or advertising.
4.7 Listing of Common Stock. If the Common Stock is or shall become
listed on the OTCBB or on another exchange, the Target Company shall (a) use its
best efforts to maintain the listing of its Common Stock on the OTCBB or such
other exchange on which the Common Stock is then listed until two years from the
date hereof, and (b) shall provide to Xxxxxxx evidence of such listing.
4.8 Indemnification.
(a) Indemnification.
(i) The Target Company shall, notwithstanding termination of
this Agreement and without limitation as to time, indemnify and hold harmless
Xxxxxxx and its officers, directors, agents, employees and affiliates, each
Person who controls or Xxxxxxx (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) (each such Person, a "Control
Person") and the officers, directors, agents, employees and affiliates of each
such Control Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of, or relating to, a breach
or breaches of any representation, warranty, covenant or agreement by the Target
Company under this Agreement or any other Transaction Document.
(ii) Xxxxxxx shall, notwithstanding termination of this
Agreement and without limitation as to time, indemnify and hold harmless the
Target Company, its officers, directors, agents and employees, each Control
Person and the officers, directors, agents and employees of each Control Person,
to the fullest extent permitted by application law, from and against any and all
Losses, as incurred, arising out of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by Xxxxxxx under this Agreement
or the other Transaction Documents, except for Losses solely arising out of
negligence, bad faith or breach of this Agreement by the Target Company.
10
(iii) The Target Company and Xxxxxxx acknowledge that in the
SEC's opinion, directors, officers and persons controlling a company subject to
the Securities Act can not be indemnified for liabilities arising under the
Securities Act by such company.
(b) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "Indemnifying Party") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all reasonable fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed to
pay such fees and expenses; or (2) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of the claim against the Indemnified Party but will
retain the right to control the overall Proceedings out of which the claim arose
and such counsel employed by the Indemnified Party shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement encompasses solely monetary payment and includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party to which the
Indemnified Party is entitled hereunder (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party with supporting documentation.
No right of indemnification under this Section shall be
available as to a particular Indemnified Party if the Indemnifying Party obtains
a non-appealable final judicial determination that such Losses arise solely out
of the negligence or bad faith of such Indemnified Party in performing the
obligations of such Indemnified Party under this Agreement or a breach by such
Indemnified Party of its obligations under this Agreement.
(c) Contribution. If a claim for indemnification under this
Section is unavailable to an Indemnified Party or is insufficient to hold such
Indemnified Party harmless for any Losses in respect of which this Section would
apply by its terms (other than by reason of exceptions provided in this
Section), then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such proportion as is appropriate to reflect the
relative benefits received by the Indemnifying Party on the one hand and the
Indemnified Party on the other and the relative fault of the Indemnifying Party
11
and Indemnified Party in connection with the actions or omissions that resulted
in such Losses as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether there was a judicial
determination that such Losses arise in part out of the negligence or bad faith
of the Indemnified Party in performing the obligations of such Indemnified Party
under this Agreement or the Indemnified Party's breach of its obligations under
this Agreement. The amount paid or payable by a party as a result of any Losses
shall be deemed to include any attorneys' or other fees or expenses incurred by
such party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party.
(d) Non-Exclusivity. The indemnity and contribution agreements
contained in this Section are in addition to any obligation or liability that
the Indemnifying Parties may have to the Indemnified Parties.
4.9 Sale of Xxxxxxx Consideration Shares. Xxxxxxx shall assist
the Target Company in setting up and maintaining a trading account at a
registered broker in the United Kingdom to facilitate the sale of the Xxxxxxx
Consideration Shares. Broker's commissions in the trading account shall not
exceed one half percent (0.5%).
4.10 Lock Up by Xxxxxxx. Xxxxxxx shall not sell, transfer or
assign all or any of the shares of Consideration Stock for a period of two (2)
years following the Closing, without the written consent of the Target Company,
which consent may be withheld in the Target Company's sole discretion.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Except as set forth in this Agreement, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Target Company shall pay all stamp and other taxes and duties
levied in connection with the issuance of the shares of Consideration Stock
pursuant hereto. Xxxxxxx shall be responsible for any taxes payable by Xxxxxxx
that may arise as a result of the investment hereunder or the transactions
contemplated by this Agreement or any other Transaction Document. The Target
Company has paid a total of $5,000 to Xxxxxxx'x counsel for legal fees
associated with the transactions contemplated by this Agreement at Closing and
for acting as Escrow Agent. Xxxxxxx agrees to pay any other fees and expenses of
such counsel in the transactions contemplated by this Agreement at Closing and
for acting as Escrow Agent. The Target Company shall pay all costs, expenses,
fees and all taxes incident to and in connection with: (A) the issuance and
delivery of the Securities, (B) the exemption from registration of the
Securities for offer and sale to Xxxxxxx under the securities or Blue Sky laws
of the applicable jurisdictions, and (C) the preparation of certificates for the
Securities (including, without limitation, printing and engraving thereof), and
(D) all fees and expenses of counsel and accountants of the Target Company.
5.2 Entire Agreement This Agreement, together with all of the Exhibits
annexed hereto, and any other Transaction Document contains the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters. This Agreement shall be deemed to have been drafted and
negotiated by both parties hereto and no presumptions as to interpretation,
construction or enforceability shall be made by or against either party in such
regard.
5.3 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given upon facsimile transmission (with written transmission confirmation
report) at the number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business Day
during normal business hours where such notice is to be received) whichever
shall first occur. The addresses for such communications shall be:
If to the Target Company: Avenue Group, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: President and CEO
Tel: (000) 000-0000
Fax: (000) 000-0000
12
With copies to: Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP
1900 Avenue of the Stars
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Xxxxxxx: Xxxxxxx Park Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Xxxxx Xxxxx
Tel: 00.000.000.0000
Fax: 00.000.000.0000
With copies to: Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.
5.4 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by both the Target Company and Xxxxxxx, or, in the case of a waiver, 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.
5.5 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.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted
assigns. The assignment by a party of this Agreement or any rights hereunder
shall not affect the obligations of such party under this Agreement.
5.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
5.8 Governing Law; Venue; Service of Process. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the internal laws of the State of New York shall govern this
Agreement and the exhibits hereto, including, but not limited to, all issues
related to usury. Any action to enforce the terms of this Agreement or any of
its exhibits, or any other Transaction Document shall be brought exclusively in
the state and/or federal courts situated in the County and State of New York. If
and only if New York declines jurisdiction within the State of New York, such
action shall be brought in the State and County where the Target Company's
principle place of business is situated. Service of process in any action by
Xxxxxxx or the Target Company to enforce the terms of this Agreement may be made
by serving a copy of the summons and complaint, in addition to any other
relevant documents, by commercial overnight courier to the other party at its
principal address set forth in this Agreement.
13
5.9 Survival. The representations and warranties of the Target Company
and Xxxxxxx contained in Article III and the agreements and covenants of the
parties contained in Article IV and this Article V shall survive the Closing.
5.10 Counterpart Signatures. 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 party, it being understood that both
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.
5.11 Publicity. The Target Company and Xxxxxxx shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, unless counsel for the disclosing party deems such public
statement to be required by applicable federal and/or state securities laws.
Except as otherwise required by applicable law or regulation, the Target Company
will not disclose to any third party (excluding its legal counsel, accountants
and representatives) the names of Xxxxxxx.
5.12 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
therefore, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.
5.13 Limitation of Remedies. With respect to claims by the Target
Company or any person acting by or through the Target Company, or by Xxxxxxx or
any person acting through Xxxxxxx, for remedies at law or at equity relating to
or arising out of a breach of this Agreement, liability, if any, shall, in no
event, include loss of profits or incidental, indirect, exemplary, punitive,
special or consequential damages of any kind.
[ SIGNATURE PAGE FOLLOWS ]
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.
Target Company:
Avenue Group, Inc.
By: /s/ Xxxx Xxxxxxx
---------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
Xxxxxxx:
Dungarvon Associates, Inc. on behalf of
Xxxxxxx Park Investments Plc.
By: /s/ Xxxxxx Xxxxxx
---------------------
Name: Xxxxxx Xxxxxx
Title: Director
15
Schedule 3.1(a)
Subsidiaries
Avenue Energy, Inc.
Xxxxxxxxxx.Xxx, Inc.
XxxxxXxxx.xxx Networks, Inc.
Bickhams Media, Inc.
I.T. Technology Pty., Ltd.
16
Schedule 3.1(c)
Capitalization and Registration Rights
Preferred stock: $.001 par value, 25,000,000 shares authorized, none issued and
outstanding as of May 1, 2004.
Common stock: $.0002 par value, 500,000,000 shares authorized, 207,882,837
issued and outstanding as of July 19, 2004.
Options
Fawden - Options to purchase 50,000,000 shares of the Company's common stock at
$0.4 per share.
Tan - option to purchase 1,000,000 shares upon the exercise of a stock option at
an exercise price of $.10 per share.
Xxxxxx - Options to purchase 6,750,000 shares of the Company's common stock at
$.15 per share.
Aharonoff - Options to purchase 150,000 shares of the Company's common stock at
$.25 per share.
Registration Rights
As of July 19, 2004 holders of approximately 26,000,000 outstanding shares of
Common Stock and holders of options to purchase approximately 56,750,000 shares
of Common Stock have registration rights. All of the registration rights were
granted in connection with private placements of the Company's Common Stock. A
summary of the principal registration rights granted is set forth below:
1. In April, 2002, the purchaser an option to 50,000,000 shares of Common
Stock was granted registration rights with respect to the underlying
Common Stock.
2. In 2002 to a group of investors, who received 10,250,000 shares of
Common Stock were granted registration rights.
3. In November 2002 to a single investor who received 2,600,000 shares of
common stock was granted registration rights.
4. In November, 2002, a single investor who received 3,915,850 shares of
common stock was granted registration rights.
5. In November, 2002, a consultant shares who received 1,000,000 shares of
Common Stock with registration rights for services rendered.
6. In 2003 to a group of investors received registration rights with
respect to 8,125,000 shares of Common Stock issued to them.
7. In March, 2004, an employee received options to acquire up to 6,750,000
shares of common stock with registration rights on the underlying
Common Stock. The Company's Form S-8 Registration Statement which was
filed with the Securities and Exchange Commission on April 26, 2004
covers 2,250,000 of these shares.
Please note as a practical matter holders of registration rights with respect to
items 2 - 4 will be able to sell all of their shares without a restrictive
legend prior to the end of 2004 pursuant to Rule 144k. Currently, holders of
these shares plus the holders of shares in item 5 can sell many of these shares
at any given time subject to the volume limitations set forth in Rule 144.
17
Schedule 3.1(e)
Conflicts
None.
18
Schedule 3.1(f)
Consents and Approvals
None.
19
Schedule 3.1(g)
Litigation
None.
20
Schedule 3.1(h)
Defaults and Violations
None, except as set forth in Note 7 ("Subsequent Events") of the Company's
Quarterly Report on Form 10-QSB with respect to the Participation Agreement with
Aladdin Middle East.
21
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT (this "Agreement"), dated as of July 19, 2004, by and
between Avenue Group, Inc., a Delaware corporation with its principal place of
business at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 (the
"Target Company"); Gottbetter & Partners, LLP with its principal place of
business at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "Escrow Agent"); and
Xxxxxxx Park Investments Plc, a corporation organized under the laws of England
and Wales with its offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ("Xxxxxxx").
RECITALS
A. Simultaneously with the execution of this Agreement,
Xxxxxxx and the Target Company entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement"), dated as of the date hereof and incorporated herein
by reference, pursuant to which the Target Company has agreed to issue and
Xxxxxxx has agreed that the Xxxxxxx Consideration Shares shall be deposited into
escrow pursuant to this Agreement, including fifty percent (50%) of the Xxxxxxx
Consideration Shares to be deposited into escrow as Downside Price Protection
(the "Xxxxxxx Escrow Shares").
B. The Escrow Agent is willing to act as escrow agent pursuant
to the terms of this Agreement with respect to the purchase of the shares of
Consideration Stock.
C. All capitalized terms used but not defined herein shall
have the meanings ascribed thereto in the Stock Purchase Agreement.
NOW, THEREFORE, IT IS AGREED:
1. DEPOSIT INTO ESCROW. At Closing, the Target Company shall
(i) deposit the Xxxxxxx Consideration Shares with the Escrow Agent, (ii) deliver
blank stock powers (the "Stock Powers") for the Xxxxxxx Escrow Shares to the
Escrow Agent and (iii) deposit the Consideration Stock with the Escrow Agent.
The Escrow Agent shall hold the Xxxxxxx Consideration Shares, the Consideration
Stock and the Stock Powers in escrow when delivered.
2. TERMS OF ESCROW. (a) If the Market Value of the Common
Stock two years after Closing is less than the Closing Price, the Target Company
shall sell to Xxxxxxx the number of Xxxxxxx Escrow Shares (the "Xxxxxxx
Protection Shares") equal to (a) the Xxxxxxx Consideration Shares multiplied by
(b) the Percentage Decrease, at a purchase price of 1p per Xxxxxxx Consideration
Share (the "Escrow Purchase Price"). The "Percentage Decrease" shall be equal to
1 - Market Value/the Closing Price. "Market Value" shall be the average of the
ten (10) closing bid prices per share of the Common Stock during the ten (10)
trading days immediately preceding the two year anniversary of the Closing. For
the purposes hereof Market Value shall take into account the effect of any stock
splits, stock dividends, recapitalizations, reorganizations or similar events
occurring at the Target Company during the two year period following the Closing
pursuant to which the number of Xxxxxxx Protection shares were appropriately
adjusted or in lieu thereof other appropriate distributions were received from
the Company into Escrow at the time of such event.
Within three (3) Business Days of the two year anniversary of the
Closing, Xxxxxxx shall (i) send a notice ("Sale Notice") to the Target Company
and the Escrow Agent of the Xxxxxxx Protection Shares to be sold by the Target
Company to Xxxxxxx, if any, and (ii) deposit the Escrow Purchase Price with the
Escrow Agent, if necessary. Within fourteen (14) Business Days of the Target
Company's and the Escrow Agent's receipt of the Sale Notice and Escrow Agent's
receipt of the Escrow Purchase Price, the Escrow Agent is authorized and
directed (i) to pay the Escrow Purchase Price to the Target Company, if any,
(ii) to deliver the Xxxxxxx Protection Shares, if any, and the Stock Powers to
Xxxxxxx, (iii) to deliver the remaining Xxxxxxx Escrow Shares, if any, to the
Target Company, and (iv) to deliver the Stock Powers to the Target Company if
the total number of Xxxxxxx Protection Shares is zero.
A-1
(b) If at any time before September 30, 2004, the Xxxxxxx
Consideration Shares are admitted for trading on the London Stock Exchange plc
(the "London Exchange"), the Escrow Agent is authorized and directed to
distribute, within fourteen (14) Business Days of such admittance, (i) the
Consideration Stock to Xxxxxxx and (ii) fifty percent (50%) of the Xxxxxxx
Consideration Shares to the Target Company. If the Xxxxxxx Consideration Shares
are not admitted for trading on the London Exchange by September 30, 2004, the
Escrow Agent is authorized and directed to distribute, no later than October 5,
2004, (i) the Consideration Stock to the Target Company and (ii) the Xxxxxxx
Consideration Shares to Xxxxxxx.
3. DUTIES AND OBLIGATIONS OF THE ESCROW AGENT.
(a) The parties hereto agree that the duties and obligations
of the Escrow Agent shall be only those obligations herein specifically provided
and no other. The Escrow Agent's duties are those of a depositary only, and the
Escrow Agent shall incur no liability whatsoever, except as a direct result of
its willful misconduct or gross negligence in the performance of its duties
hereunder;
(b) The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken, suffered or omitted to be taken by
it in accordance with the advice of such counsel;
(c) The Escrow Agent shall not be bound in any way by the
terms of any other agreement to which Xxxxxxx and the Target Company are
parties, whether or not the Escrow Agent has knowledge thereof, and the Escrow
Agent shall not in any way be required to determine whether or not any other
agreement has been complied with by Xxxxxxx and the Target Company, or any other
party thereto. The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed jointly by Xxxxxxx and
the Target Company and agreed to in writing by the Escrow Agent;
(d) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands which, in its
opinion, are in conflict with any of the provisions of this Agreement, the
Escrow Agent shall be entitled to refrain from taking any action other than
keeping safely the Consideration (as defined below) or taking certain action
until the Escrow Agent is directed otherwise in writing jointly by Xxxxxxx and
the Target Company or by a final judgment of a court of competent jurisdiction;
(e) The Escrow Agent shall be fully protected in relying upon
any written notice, demand, certificate or document which the Escrow Agent, in
good faith, believes to be genuine. The Escrow Agent shall not be responsible
for the sufficiency or accuracy of the form, execution, validity or genuineness
of documents or securities now or hereafter deposited hereunder or of any
endorsement thereon, or for any lack of endorsement thereon, or for any
description therein; nor shall the Escrow Agent be responsible or liable in any
respect on account of the identity, authority or rights of the persons executing
or delivering or purporting to execute or deliver any such document, security or
endorsement;
(f) The Escrow Agent shall not be required to institute legal
proceedings of any kind and shall not be required to defend any legal
proceedings which may be instituted against it or in respect of the
Consideration;
(g) If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to relinquish custody of any of the Securities
(to the extent delivered to the Escrow Agent pursuant hereto, the
"Consideration"), it may do so by delivering the same to another Person that
agrees to act as escrow agent hereunder and whose substitution for the Escrow
Agent is agreed upon in writing by Xxxxxxx and the Target Company; provided,
however, that such successor Escrow Agent must be resident in the United States.
If no such escrow agent is selected within three (3) days after the Escrow Agent
gives notice to Xxxxxxx and the Target Company of the Escrow Agent's desire to
so relinquish custody of the Consideration and resign as Escrow Agent, then the
Escrow Agent may do so by delivering the Consideration to the clerk or other
proper officer of a state or federal court of competent jurisdiction situate in
the state and county of New York. The fee of any court officer shall be borne by
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the Target Company. Upon such delivery, the Escrow Agent shall be discharged
from any and all responsibility or liability with respect to the Consideration
and this Agreement and each of the Target Company and Xxxxxxx shall promptly pay
all monies it may owe to the Escrow Agent for its services hereunder, including,
but not limited to, reimbursement of its out-of-pocket expenses pursuant to
paragraph (i) below;
(h) This Agreement shall not create any fiduciary duty on the
Escrow Agent's part to Xxxxxxx or the Target Company, nor disqualify the Escrow
Agent from representing either party hereto in any dispute with the other,
including any dispute with respect to the Purchase Agreement or Debenture;
provided, however, that in the event of such dispute, the Escrow Agent shall
have the right to commence an interpleader action in any court of competent
jurisdiction of the state of New York or of the United States located in the
county and state of New York, deposit the Consideration with such court;
(i) The parties acknowledge and agree that the Escrow Agent is
counsel to Xxxxxxx. The parties agree to, and agree not to object to, the Escrow
Agent's engagement as Escrow Agent hereunder;
(j) Upon the full performance of this Agreement, the Escrow
Agent shall be deemed released and discharged of any further obligations
hereunder.
4. INDEMNIFICATION.
(a) Xxxxxxx hereby indemnifies and holds free and harmless the
Escrow Agent from any and all losses, expenses, liabilities and damages
(including but not limited to reasonable attorney's fees, and amounts paid in
settlement) resulting from claims asserted by the Target Company against the
Escrow Agent with respect to the performance of any of the provisions of this
Agreement;
(b) The Target Company hereby indemnifies and holds free and
harmless the Escrow Agent from any and all losses, expenses, liabilities and
damages (including but not limited to reasonable attorney's fees, and amount
paid in settlement) resulting from claims asserted by Xxxxxxx against the Escrow
Agent with respect to the performance of any of the provisions of this
Agreement;
(c) Xxxxxxx and the Target Company, jointly and severally,
hereby indemnify and hold the Escrow Agent harmless from and against any and all
losses, damages, taxes, liabilities and expenses that may be incurred by the
Escrow Agent, arising out of or in connection with its acceptance of appointment
as the Escrow Agent hereunder and/or the performance of its duties pursuant to
this Agreement, the Purchase Agreement and the Securities, including, but not
limited to, all legal costs and expenses of the Escrow Agent incurred defending
itself against any claim or liability in connection with its performance
hereunder, provided that the Escrow Agent shall not be entitled to any indemnity
for any losses, damages, taxes, liabilities or expenses that directly result
from its willful misconduct or gross negligence in its performance as Escrow
Agent hereunder
(d) In the event of any legal action or proceeding involving
any of the parties to this Agreement which is brought to enforce or otherwise
adjudicate any of the rights or obligations of the parties hereunder, the
non-prevailing party or parties shall pay the legal fees of the prevailing party
or parties and the legal fees, if any, of the Escrow Agent.
5. MISCELLANEOUS.
(a) All notices, including Notices of Conversion and Notices
of Exercise, objections, requests, demands and other communications sent to any
party hereunder shall be deemed duly given if (x) in writing and sent by
facsimile transmission to the Person for whom intended if addressed to such
Person at its facsimile number set forth below or such other facsimile number as
such Person may designate by notice given pursuant to the terms of this Section
5 and (y) the sender has confirmation of transmission:
(i) If to the Target Company: Avenue Group, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: CEO
Tel: (000) 000-0000
Fax:
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With copies to: Jeffer, Mangels, Xxxxxx & Xxxxxxx LLP
1900 Avenue of the Stars
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(ii) If to Xxxxxxx: Xxxxxxx Park Investments PLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Attn: Xxxxx Xxxxx
Tel: 00.000.000.0000
Fax: 00.000.000.0000
(iii) If to the Escrow Agent: Gottbetter & Partners, LLP
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx
00000 Attn: Xxxx X. Xxxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) This Agreement has been prepared, negotiated and delivered
in the state of New York and shall be governed by and construed and enforced in
accordance with the laws of the state of New York applicable to contracts
entered into and performed entirely within New York, without giving effect to
the principles of New York law relating to the conflict of laws.
(c) 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 party, it being understood that both
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.
(d) This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. The
assignment by a party of this Agreement or any rights hereunder shall not affect
the obligations of such party under this Agreement.
6. TERMINATION OF ESCROW. The term of this Escrow Agreement shall begin
upon the date hereof and shall continue until terminated upon the earlier to
occur of (i) the Xxxxxxx Escrow Shares are fully distributed or (ii) the written
agreement of the parties to terminate this Agreement. Upon the termination of
this Escrow Agreement pursuant to subsection (ii), the Escrow Agent shall
distribute any of the Xxxxxxx Escrow Shares then held by it pursuant to the
terms of the written agreement of the parties.
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed the day and year first above written.
The Target Company:
Avenue Group, Inc.
By:
--------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
Xxxxxxx:
Dungarvon Associates, Inc. on behalf of
Xxxxxxx Park Investments Plc.
By:
--------------------------
Name:
Title:
Escrow Agent:
Gottbetter & Partners, LLP
By:
--------------------------
Name: Xxxx X Xxxxxxxxxx
Title: Managing Partner
A-5
EXHIBIT B
AVENUE GROUP, INC.
OFFICER'S CERTIFICATE
I, Xxxx Xxxxxxx, being the Chief Executive Officer of Avenue Group,
Inc., a Delaware corporation (the "Target Company"), pursuant to Section
2.2(a)(ii) of that certain Stock Purchase Agreement (the "Purchase Agreement"),
dated as of July 19, 2004, by and between the Target Company and Xxxxxxx Park
Investments PLC, do hereby certify on behalf of the Target Company that attached
hereto is a copy of the resolutions duly adopted by the Board of Directors of
the Target Company authorizing the Target Company to execute and deliver the
Transaction Documents, as such term is defined in the Purchase Agreement and to
enter into the transactions contemplated thereby.
IN WITNESS WHEREOF, I have executed this Officer's Certificate on
behalf of the Target Company this 19th day of July, 2004.
Avenue Group, Inc.
By:
-------------------------------------------
Xxxx Xxxxxxx, Chief Executive Officer
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Board Resolutions
STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND XXXXXXX PARK
INVESTMENTS PLC
WHEREAS, Xxxxxxx Park Investments PLC, a newly formed
corporation organized under the laws of England and Wales
("Xxxxxxx"), is being established to hold as its assets shares
of publicly traded NASD over-the-counter Bulletin Board
companies in the United States (the "Target Companies");
WHEREAS, at such time as Xxxxxxx has acquired a sufficient
amount of the shares of the Target Companies to meet the
requirements for listing on the London Stock Exchange, Xxxxxxx
intends to list its ordinary shares on the London Stock
Exchange, which listing Xxxxxxx anticipates will occur no
later than September 30, 2004 (the "Listing");
WHEREAS, Xxxxxxx anticipates that one of the Target Companies
will be the Company, and in connection therewith, Xxxxxxx and
the Company have negotiated a stock purchase agreement, the
current form of which is attached hereto as Exhibit A (the
"Stock Purchase Agreement"), which contemplates the exchange
of Xxxxxxx Consideration Shares (as defined below) for US$11
million (the "Total Purchase Price") of the Company's common
stock valued as set forth below (the "Consideration Stock");
WHEREAS, pursuant to the Stock Purchase Agreement, the number
of shares of Consideration Stock valued at the Total Purchase
Price shall be determined by dividing the Total Purchase Price
by the average of the Closing Bid Price per share of the
Company's common stock during the 10 trading days immediately
preceding July 30, 2004, and the Total Purchase Price shall be
paid by delivery to the Company of the number of ordinary
Xxxxxxx shares valued at 1 British Pound Sterling equal to the
Total Purchase Price divided by the conversion rate of the
British Pound Sterling to purchase US Dollars as determined on
July 30, 2004 (the "Xxxxxxx Consideration Shares");
WHEREAS, pursuant to the Stock Purchase Agreement, Xxxxxxx has
agreed that it will not transfer, sell or assign any of the
Consideration Stock for a period of two years from the closing
date of the transaction without the written consent of the
Company;
WHEREAS, pursuant to the Stock Purchase Agreement, the closing
shall occur at such time on or after July 31, 2004 as the
Listing has occurred and the other conditions of closing set
forth in the Stock Purchase Agreement are satisfied, and if
the closing has not occurred on or before September 30, 2004,
the transactions contemplated by the Stock Purchase Agreement
shall terminate and the Consideration Stock shall be returned
to the Company;
WHEREAS, pursuant to the Escrow Agreement, the current form of
which is attached hereto as Exhibit B, at the Closing, fifty
percent (50%) of the Xxxxxxx Consideration Shares will be
released to the Company, fifty percent (50%) of the Xxxxxxx
Consideration Shares continue to be held in Escrow (the
"Xxxxxxx Protection Shares") and all of the Consideration
Stock will be released to Xxxxxxx;
WHEREAS, pursuant to the Escrow Agreement, at the Closing, in
the event that two years from the closing date, the value of
the Consideration Stock is less than Total Purchase Price, a
portion or all of the Xxxxxxx Protection Shares held in Escrow
shall be returned to Xxxxxxx with the remaining Xxxxxxx
Protection Shares then held in Escrow released to the Company;
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WHEREAS, in the event the closing has not occurred on or
before September 30, 2004, the transactions contemplated by
the Stock Purchase Agreement shall terminate and the
Consideration Stock shall be returned to the Company;
WHEREAS, Xxxxx Xxxxx has rendered financial advisory services
on behalf of the Company;
WHEREAS, as full compensation for such services and in full
satisfaction of all claims of Gem Advisors, Inc. and Xx. Xxxxx
has against the Company or Xxxxxxx with respect thereto, the
Company is prepared to transfer to Gem Advisors, Inc. 5% of
the Xxxxxxx Consideration Shares and the Xxxxxxx Protection
Shares when such shares are released from Escrow pursuant to
the terms of the Escrow Agreement;
WHEREAS, in connection with the transactions contemplated by
the Stock Purchase Agreement, the Board has been presented
with and reviewed forms of the Transaction Documents, as such
term is defined in the Stock Purchase Agreement, including,
but not limited to, the Stock Purchase Agreement and the
Escrow Agreement;
WHEREAS, the Board has determined that it is in the best
interest of the Company to enter into the transactions
contemplated by the Stock Purchase Agreement and the
Transaction Documents;
RESOLVED, that the Stock Purchase Agreement and the Escrow
Agreement and each of the documents and transactions
contemplated thereby, be and hereby are, ratified and approved
in their entirety with such non-material modifications or
amendments thereto as the Chief Executive Officer or Chief
Financial Officer, or either of them acting alone, shall deem
necessary or appropriate as conclusively evidenced by the
execution of such documents or consummation of such
transactions.
RESOLVED, FURTHER, that the Board hereby authorizes and
approves the issuance, out of the Company's authorized but
unissued common stock up to Sixty-Two Million (62,000,000)
shares, as the Consideration Stock valued at the Total
Purchase Price of $ 11 million;
RESOLVED FURTHER, that the number of shares of Consideration
Stock to be issued to Xxxxxxx, pursuant of the Stock Purchase
Agreement, shall be determined by dividing the Total Purchase
Price of $ 11 million by the average of the Closing Bid Price
per share of the Company's common stock during the 10 trading
days immediately preceding July 30, 2004;
RESOLVED FURTHER, that the aggregate number of Xxxxxxx
Consideration Shares to be issued to the Company, pursuant of
the Stock Purchase Agreement, shall be determined by
multiplying the Total Purchase Price of $ 11 million by the
conversion rate of the (UK)(pound)1 into (US) $1.00 as
determined on July 30, 2004;
RESOLVED FURTHER, that the Board hereby acknowledges that the
Xxxxxxx Protection Shares representing 50% of the Xxxxxxx
Consideration Shares shall remain in Escrow for a period of
two years from the Closing as protection against a decline in
the trading price of the Company's shares and to the extent
there is such a decline, Xxxxxxx shall be entitled to receive
from the Xxxxxxx Protection Shares held in escrow a percentage
of the Xxxxxxx Consideration Shares equal to the percentage
decline in the Avenue shares and the remainder of such Xxxxxxx
Protection Shares, if any, shall be released to the Company;
RESOLVED FURTHER, that the Board hereby authorizes the Company
to transfer to Gem Advisors, Inc., 5% of the Xxxxxxx
Consideration Shares and the Xxxxxxx Protection Shares, when
such shares are released from Escrow pursuant to the terms of
the Escrow Agreement as full compensation for and satisfaction
of Gem Advisor's and Xxxxx Xxxxx'x financial advisory services
on behalf of the Company and all claims Gem Advisors and Xx.
Xxxxx have against the Company or Xxxxxxx with respect
thereto;
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RESOLVED, FURTHER, that the Company is hereby authorized to
offer, sell, issue and deliver the Consideration Stock,
pursuant to the terms of the Stock Purchase Agreement, the
Escrow Agreement and the Transaction Documents, with such
modifications or amendments to such documents as the Chief
Executive Officer or Chief Financial Officer, or either of
them acting alone, shall deem necessary or appropriate as
conclusively evidenced by the execution of such documents.
RESOLVED FURTHER, that the Chief Executive Officer, or any
other officer of the Company, be, and each of them hereby is,
authorized and directed, in the name and on behalf of the
Company, to execute, deliver, and cause the Company to perform
its obligations under the Stock Purchase Agreement, the Escrow
Agreement, and each of the other Transaction Documents,
including such representations, warranties and covenants of
the Company and other provisions as such officer(s), in their
sole discretion, shall deem necessary or appropriate, as
conclusively evidenced by such officer(s) execution thereof.
RESOLVED FURTHER, that the Chief Executive Officer, or any
other executive officer of the Company, be, and each of them
hereby is, authorized, in the name and on behalf of the
Company, to make all such arrangements, to do and perform all
such acts and things, and to execute and deliver all such
officers' certificates and such other instruments and
documents as they may deem necessary or appropriate in order
to effectuate fully the purpose of each and all of the
foregoing resolutions (hereby ratifying and confirming any and
all actions taken heretofore and hereafter to accomplish such
purposes, all or singular).
RESOLVED FURTHER, that for the purpose of giving effect to the
proposed issuance and sale of the Consideration Stock by the
Company and the related transactions contemplated by the Stock
Purchase Agreement, such officers of the Company, or any one
or more of them, be and each of them hereby is authorized,
empowered and directed to take such additional actions and to
execute and deliver such instruments as they deem necessary or
desirable.
RESOLVED FURTHER, that the corporate seal of the Company may,
but shall not be required to, be affixed to any instrument or
document executed pursuant to the foregoing resolutions.
RESOLVED FURTHER, that the Chief Executive Officer and any
executive officer of the Company be, and hereby are,
authorized to take all such actions and to do, or authorize to
be done, all such things as such persons may deem necessary or
appropriate to effectuate the purposes of these resolutions.
RESOLVED FURTHER, that the authority and power given hereunder
shall be deemed retroactive and any and all acts authorized
hereunder performed prior to the passage of this resolution
are hereby approved, confirmed and ratified.
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