AMENDMENT NO. 1
TO
STOCK PURCHASE AGREEMENT
This Amendment No. 1 (this "Amendment") to the Stock Purchase Agreement
dated as of March 11, 2004 (the "Purchase Agreement") among ROO Group, Inc., a
Delaware corporation (the "Purchaser"), and the shareholders of Reality Group
Pty Ltd., a corporation existing under the laws of Australia, (collectively, the
"Sellers"), is dated as of October 28, 2005.
WITNESSETH:
WHEREAS, on March 11, 2004, the Purchaser and the Sellers entered into the
Purchase Agreement, a copy of which is annexed hereto as Exhibit A; and
WHEREAS, the parties now desire to amend the Purchase Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of and for the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Purchase Agreement is hereby
amended as follows:
1. All capitalized terms not defined herein shall have the meanings of the
ascribed to such terms in the Purchase Agreement.
2. ALL TERMS OF THIS AMENDMENT ARE SUBJECT TO AND CONDITIONED UPON
EXECUTION BY ALL PARTIES HEREOF TO THAT CERTAIN STOCK PURCHASE AGREEMENT DATED
OCTOBER 28, 2005 BETWEEN A WHOLLY OWNED SUBSIDIARY OF THE PURCHASER AND THE
SHAREHOLDERS OF FACTORY 212 PTY LTD, A CORPORATION EXISTING UNDER THE LAWS OF
AUSTRALIA.
3. The Sellers acknowledge that on October 3, 2005, the Purchaser caused a
one-for-50 reverse split of the Purchaser's outstanding shares of common stock.
ALL NUMERICAL REFERENCES TO SHARES OF THE PURCHASER'S COMMON STOCK IN THIS
AMENDMENT ARE POST ONE-FOR-50 REVERSE STOCK SPLIT NUMBERS.
4. The Sellers hereby agree to exercise their Buy-back Option pursuant to
Section 7 of the Purchase Agreement effective as of January 1, 2006 by executing
and delivering to the Purchaser the notice of exercise form attached as Exhibit
B hereto, comprising a total of 66,120 shares of Common Stock ("Buy Back
Shares"). After the Sellers exercise their Buy-back Option pursuant to this
Section 4 of this Amendment, such Sellers will own a total of 101,080 Exchange
Shares.
5. The Sellers and the Purchaser hereby agree that the Share Variance,
pursuant to Section 6(c) of the Purchase Agreement, shall be calculated based
upon a closing sale price of $2.50 (post one-for-50 reverse split). In
accordance with this Section 5 and Section 6(c) of the Purchase Agreement, the
Sellers and the Purchaser hereby acknowledge and agree that the Share Variance
equals $1,263,500.00.
6. The Sellers and the Purchaser hereby agree that the Purchaser shall pay
the Share Variance to the Sellers as follows:
(a) $200,000.00 of the total $1,263,500.00 Share Variance shall be paid
by the Purchaser to the Sellers in cash by October 28, 2005.
(b) The remaining $1,063,500.00 of the Share Variance shall be paid by
the Purchaser to the Sellers in shares of common stock of Purchaser
("Common Stock") based on a stock price of $2.50 per share,
resulting in 425,400 shares of Common Stock (the "Variance Shares").
(c) The Purchaser shall issue to the Sellers by October 31, 2005 359,280
shares of Common Stock (amounting to the number Variance Shares less
the number of Buy Back Shares which are retained by the Sellers and
form part of the Variance Shares) and such shares shall be allocated
to the Sellers in accordance with Exhibit C hereto.
(d) The Purchaser guarantees (the "Variance Guarantee") that the Sellers
will be able to sell the Exchange Shares and the Variance Shares for
a price equal to or greater than US$2.50 per share for a period of
fourteen (14) days after the earliest of the dates specified in
Section 10 and 11 of this Amendment (the "Variance Guarantee
Period"). In the event the Sellers are unable to sell any of the
Exchange Shares or the Variance Shares for a price equal to or
greater than US$2.50 per share during the Variance Guarantee Period,
then the Purchaser shall issue the Sellers such number of shares of
Common Stock equal to (x) applicable number of Variance and/or
Exchange Shares multiplied by US$2.50 less (y) applicable number of
Variance and/or Exchange Shares multiplied by the average closing
sale price of the Common Stock on the OTC Bulletin Board during the
Variance Guarantee Period, divided by (z) by the average closing
sale price of the Common Stock on the OTC Bulletin Board during the
Variance Guarantee Period. Notwithstanding anything in this
Amendment to the contrary, if at any time any offer is presented to
the Sellers to purchase such Sellers' Variance Shares for a price
equal to or greater than US$2.50 per share, and any Seller does not
accept such offer, then the Purchaser's obligations pursuant to the
Variance Guarantee shall be automatically terminated with respect to
such Seller.
7. The Sellers and the Purchaser hereby agree that payment of the Share
Variance in accordance with Section 6 of this Amendment shall constitute full
satisfaction of the Guarantee.
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8. Within thirty (30) days after the date hereof, the Purchaser shall
prepare and file with the United States Securities and Exchange Commission (the
"Commission") a registration statement under the United States Securities Act of
1933, as amended (the "Securities Act"), providing for the resale of 359,280 of
the Variance Shares (the "Initial Registration Statement").
9. The Purchaser hereby agrees that if, at any time, and from time to
time, after the Initial Registration Statement is declared effective by the
Commission, if the Purchaser shall determine to register for its own account or
the account of others under the the Securities Act any of its equity securities,
the Purchaser shall include in such registration statement the Variance Shares
which were not included in the Initial Registration Statement and any shares
issued pursuant to the Variance Guarantee. This "piggy-back" registration right
shall not apply to an offering of equity securities registered on Form S-4 or
S-8 (or their then equivalent forms) relating to securities to be issued solely
in connection with an acquisition of any entity or business or securities
issuable in connection with a stock option or other employee benefit plan.
10. The first sentence of Section 8 of the Purchase Agreement is hereby
amended to be and read as follows:
"Each Seller hereby agrees that it shall not, unless permitted by the
Board of Directors of the Purchaser, sell any of its Exchange Shares
before October 28, 2005."
11. Subject to the requirements of Rule 144 promulgated under the
Securities Act, each Seller hereby agrees that 300,000 of the Variance Shares
may not be sold until the Variance Shares have been registered on an effective
registration statement with the United States Securities and Exchange Commission
(the "Commission") or before December 31, 2005, whichever is the later. The
remaining 125,400 of the Variance Shares may not be sold by the Sellers until
such Variance Shares have been registered on an effective registration statement
with the Commission or before February 28, 2006, whichever is the later.
12. Each Seller acknowledges that the transactions contemplated by this
Amendment, including any offering of securities hereby, have not been reviewed
by the Commission or any state agency because it is intended to be a nonpublic
offering exempt from the registration requirements of the Securities Act and
state securities laws. Each Seller understands that the Purchaser is relying in
part upon the truth and accuracy of, and each Seller's compliance with the
representations, warranties, agreements, acknowledgments and understandings of
each Seller set forth herein in order to determine the availability of such
exemptions and the eligibility of the Sellers to acquire any securities
hereunder.
13. Each Seller agrees that it is acquiring all securities pursuant to
this Amendment in an offshore transaction pursuant to Regulation S, promulgated
under the Securities Act, and hereby represents to the Purchaser as follows:
(a) Such Seller is outside the United States when receiving and
executing this Amendment;
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(b) Seller was not induced to invest in any securities offered
hereby by any form of general solicitation or general advertising
including, but not limited to, the following: (i) any advertisement,
article, notice or other communication published in any newspaper,
magazine or similar media or broadcast over the news or radio; and (ii)
any seminar or meeting whose attendees were invited by any general
solicitation or advertising; and
(c) Seller has not acquired any securities pursuant to this
Amendment as a result of, and will not itself engage in, any "directed
selling efforts" (as defined in Regulation S under the Securities Act) in
the United States in respect of any such securities which would include
any activities undertaken for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in the United
States for the resale of such securities; provided, however, that the
Seller may sell or otherwise dispose of such securities pursuant to
registration of the securities under the Securities Act and any applicable
state and provincial securities laws or under an exemption from such
registration requirements and as otherwise provided herein.
14. Each Seller acknowledges and agrees that the Purchaser will refuse to
register the transfer of any securities acquired pursuant to this Amendment not
made in accordance with the provisions of Regulation S under the Securities Act,
pursuant to an effective registration statement under the Securities Act, or
pursuant to an available exemption from the registration requirements of the
Securities Act and in accordance with applicable state and provincial securities
laws.
15. Each Seller understands and agrees that offers and sales of any
securities acquired pursuant to this Amendment prior to the expiration of a
period of one year after the date of transfer of such securities under this
Amendment (the "Distribution Compliance Period"), shall only be made in
compliance with the safe harbor provisions set forth in Regulation S under the
Securities Act, pursuant to the registration provisions of the Securities Act or
an exemption therefrom, and that all offers and sales after the Distribution
Compliance Period shall be made only in compliance with the registration
provisions of the Securities Act or an exemption therefrom, and in each case
only in accordance with all applicable securities laws.
16. Each Seller understands and agrees not to engage in any hedging
transactions involving any securities acquired pursuant to this Amendment prior
to the end of the Distribution Compliance Period unless such transactions are in
compliance with the Securities Act.
17. All references to currencies within this Amendment are in United
States dollars.
18. (A) This Amendment shall be construed and interpreted in accordance
with the laws of the State of New York without giving effect to the conflict of
laws rules thereof or the actual domiciles of the parties.
(B) Except as amended hereby, the terms and provisions of the Purchase
Agreement shall remain in full force and effect, and the Purchase Agreement is
in all respects ratified and confirmed. On and after the date of this agreement,
each reference in the Purchase Agreement to the "Agreement," "hereinafter,"
"herein," "hereinafter," "hereunder," "hereof," or words of like import shall
mean and be a reference to the Purchase Agreement as amended by this Amendment.
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(C) This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute a single Amendment.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Purchase Agreement as of the date first stated above.
ROO GROUP, INC.
By: /s/ Xxxxx Xxxxx
---------------------------
Xxxxx Xxxxx
Chief Financial Officer
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SELLERS:
TRUISTIC PTY LTD ATF XXX INVESTMENT TRUST
By: /s/ Xxxxx Xxx
---------------------------
Print Name: Xxxxx Xxx
---------------------
XXXXXXX XXXXXX ATF THE BOLLEN INVESTMENT TRUST
By: /s/ Xxxx Xxxxxx
---------------------------
Print Name: Xxxx Xxxxxx
---------------------
XXXXX XXXXXXX ATF THE CAMPIOIN INVESTMENT TRUST
By: /s/ Xxxxx Xxxxxxx
---------------------------
Print Name: Xxxxx Xxxxxxx
---------------------
XXXXX XXXXXXXX ATF THE K DAVIDSON INVESTMENT TRUST
By: /s/ Xxxxx Xxxxxxxx
---------------------------
Print Name: Xxxxx Xxxxxxxx
---------------------
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Exhibit A
Stock Purchase Agreement
Exhibit B
Notice of Exercise
(To be executed by the Sellers in order to exercise their
Buy-back Option Pursuant to Section 7 of the Stock Purchase
Agreement dated as of March 11, 2004 among ROO Group, Inc.
and the shareholders of Reality Group Pty Ltd.)
The undersigned hereby irrevocably elects to exercise its Buy-back Option
and to thereby acquire 11.6 shares of common stock of Reality Group Pty Ltd. in
exchange for returning 26,448 Exchange Shares to ROO Group, Inc., according to
the conditions hereof, as of the date written below.
By signing this Notice of Exercise, the undersigned hereby represents
that: (a) at the time of exercise of the Buy-back Option it is not in the United
States; (b) it is not a "U.S. Person" as defined in Regulation S, promulgated
under the United States Securities Act of 1933, as amended, and is not
exercising the Buy-back Option on behalf of a "U.S. Person"; and (c) did not
execute or deliver this Notice of Exercise in the United States.
DATED this 28th day of October, 2005.
TRUISTIC PTY LTD ATF XXX
INVESTMENT TRUST
By: /s/ Xxxxx Xxx
------------------------- ------------------------------
Witness
Print Name: Xxxxx Xxx
----------------------
---------------------------------
Complete Address
---------------------------------
---------------------------------
B-1
Exhibit B
Notice of Exercise
(To be executed by the Sellers in order to exercise their
Buy-back Option Pursuant to Section 7 of the Stock Purchase
Agreement dated as of March 11, 2004
among ROO Group, Inc. and the shareholders of Reality Group Pty Ltd.)
The undersigned hereby irrevocably elects to exercise its Buy-back Option
and to thereby acquire 11.6 shares of common stock of Reality Group Pty Ltd. in
exchange for returning 26,448 Exchange Shares to ROO Group, Inc., according to
the conditions hereof, as of the date written below.
By signing this Notice of Exercise, the undersigned hereby represents
that: (a) at the time of exercise of the Buy-back Option it is not in the United
States; (b) it is not a "U.S. Person" as defined in Regulation S, promulgated
under the United States Securities Act of 1933, as amended, and is not
exercising the Buy-back Option on behalf of a "U.S. Person"; and (c) did not
execute or deliver this Notice of Exercise in the United States.
DATED this 28th day of October, 2005.
XXXXXXX XXXXXX ATF THE BOLLEN
INVESTMENT TRUST
By: /s/ Xxxxxxx X. Xxxxxx
------------------------- ------------------------------
Witness
Print Name: Xxxxxxx X. Xxxxxx
----------------------
---------------------------------
Complete Address
---------------------------------
---------------------------------
B-2
Exhibit B
Notice of Exercise
(To be executed by the Sellers in order to exercise their
Buy-back Option Pursuant to Section 7 of the Stock Purchase
Agreement dated as of March 11, 2004
among ROO Group, Inc. and the shareholders of Reality Group Pty Ltd.)
The undersigned hereby irrevocably elects to exercise its Buy-back Option
and to thereby acquire 2.9 shares of common stock of Reality Group Pty Ltd. in
exchange for returning 6,612 Exchange Shares to ROO Group, Inc., according to
the conditions hereof, as of the date written below.
By signing this Notice of Exercise, the undersigned hereby represents
that: (a) at the time of exercise of the Buy-back Option it is not in the United
States; (b) it is not a "U.S. Person" as defined in Regulation S, promulgated
under the United States Securities Act of 1933, as amended, and is not
exercising the Buy-back Option on behalf of a "U.S. Person"; and (c) did not
execute or deliver this Notice of Exercise in the United States.
DATED this 28th day of October, 2005.
XXXXX XXXXXXX ATF THE XXXXXXX
INVESTMENT TRUST
By: /s/ Xxxxx Xxxxxxxx
------------------------- ------------------------------
Witness
Print Name: Xxxxx Xxxxxxxx
----------------------
---------------------------------
Complete Address
---------------------------------
---------------------------------
B-3
Exhibit B
Notice of Exercise
(To be executed by the Sellers in order to exercise their
Buy-back Option Pursuant to Section 7 of the Stock Purchase
Agreement dated as of March 11, 2004
among ROO Group, Inc. and the shareholders of Reality Group Pty Ltd.)
The undersigned hereby irrevocably elects to exercise its Buy-back Option
and to thereby acquire 2.9 shares of common stock of Reality Group Pty Ltd. in
exchange for returning 6,612 Exchange Shares to ROO Group, Inc., according to
the conditions hereof, as of the date written below.
By signing this Notice of Exercise, the undersigned hereby represents
that: (a) at the time of exercise of the Buy-back Option it is not in the United
States; (b) it is not a "U.S. Person" as defined in Regulation S, promulgated
under the United States Securities Act of 1933, as amended, and is not
exercising the Buy-back Option on behalf of a "U.S. Person"; and (c) did not
execute or deliver this Notice of Exercise in the United States.
DATED this 28th day of October, 2006.
XXXXX XXXXXXXX ATF THE K DAVIDSON
INVESTMENT TRUST
By: /s/ Xxxxx Xxxxxxx
------------------------- -----------------------------
Witness
Print Name: Xxxxx Xxxxxxx
----------------------
---------------------------------
Complete Address
---------------------------------
---------------------------------
B-4
Exhibit C
Allocation of Variance Shares
Number of Shares of
Seller: Variance Shares:
------ ---------------
Truistic Pty Ltd atf Xxx Investment Trust 143,712
Xxxxxxx Xxxxxx atf the Bollen Investment Trust 143,712
Xxxxx Xxxxxxx atf the Xxxxxxx Investment Trust 35,928
Xxxxx Xxxxxxxx atf the K Davidson Investment Trust 35,928
