-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MEuHZgrOM88Ay/TpoFEXGbuydfiQtNs1SjjIH0qR36sQpI+ktCW0p5SrbbmLovOX VAd5bX5fskQreQVcqoklmw== 0001116502-04-000026.txt : 20040108 0001116502-04-000026.hdr.sgml : 20040108 20040108152508 ACCESSION NUMBER: 0001116502-04-000026 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040108 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VIRILITEC INDUSTRIES INC CENTRAL INDEX KEY: 0001076700 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 113447894 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-79385 FILM NUMBER: 04515383 BUSINESS ADDRESS: STREET 1: 100 CEDARURST AVE STREET 2: SUITE 201 CITY: CEDARHURST STATE: NY ZIP: 11516 MAIL ADDRESS: STREET 1: 100 CEDARHURST AVENUE SUTIE 201 CITY: CEDARHURST STATE: NY ZIP: 11516 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AVENUE GROUP INC CENTRAL INDEX KEY: 0001100006 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 980200077 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 15303 VENTURA BOULEVARD STREET 2: SUITE 900 CITY: SHERMAN OAKS STATE: CA ZIP: 91403 BUSINESS PHONE: 8183803020 MAIL ADDRESS: STREET 1: 15303 VENTURA BOULEVARD STREET 2: SUITE 900 CITY: SHERMAN OAKS STATE: CA ZIP: 91403 FORMER COMPANY: FORMER CONFORMED NAME: I T TECHNOLOGY INC DATE OF NAME CHANGE: 20000120 SC 13D 1 sc13d.txt SCHEDULE 13D ------------------------------ OMB APPROVAL ------------------------------ OMB Number: 3235-0145 Expires: December 31, 2005 Estimated average burden hours per response..........11 ------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No.____)* VIRILITEC INDUSTRIES, INC. (Name of Issuer) COMMON STOCK, $0.0001 PAR VALUE (Title of Class of Securities) 928234 10 3 (CUSIP Number) Jonathan Herzog Avenue Group, Inc. 153030 Ventura Boulevard 9th Floor Sherman Oaks, California 91403 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 2, 2003 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. Seess.240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 928234 10 3 SCHEDULE 13D Page 2 of 7 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Avenue Group, Inc. Tax I.D. No. 98-0200077 - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power --------------------------------------------------------- 40,000,000 Number of --------------------------------------------------------- Shares 8. Shared Voting Power Beneficially -0- Owned by --------------------------------------------------------- Each 9. Sole Dispositive Power Reporting 40,000,000 Person With --------------------------------------------------------- 10. Shared Dispositive Power -0- - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 40,000,000 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 25.4%* - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- * The calculation of the foregoing percentage is based on the number of shares of Virilitec Industries, Inc. common stock outstanding as of December 2, 2003 as set forth in the Merger Agreement (as defined below). CUSIP No. 928234 10 3 SCHEDULE 13D Page 3 of 7 ITEM 1. SECURITY AND ISSUER This statement relates to the Common Stock, $0.0001 par value per share (the "Common Stock"), of Virilitec Industries, Inc., a Delaware corporation (the "Issuer"). The address of the Issuer's principal executive offices is 236 Broadway, Suite 201, Brooklyn, New York 11211. ITEM 2. IDENTITY AND BACKGROUND This Schedule 13D is being filed on behalf of Avenue Group, Inc., a Delaware corporation ("Avenue Group"), whose principal business address is 15303 Ventura Boulevard, 9th Floor, Sherman Oaks, California 91403. Avenue Group is engaged in oil and gas exploration and development, e-commerce and digital media. The names, citizenship, business addresses, present principal occupation or employment, and the name and principal business and address of any corporation or other organization in which such employment is conducted, of the directors and executive officers of Avenue Group are as set forth in Annex I hereto and incorporated herein by this reference. Except as set forth on Annex I, neither Avenue Group, nor, to its knowledge, any person listed in Annex I has during the last five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The sources of the consideration for the purchases reported hereon consisted of the working capital of Avenue Group. ITEM 4. PURPOSE OF TRANSACTION On December 2, 2003, Avenue Group entered into a Subscription Agreement (the "Subscription Agreement") with Roo Media Corporation, a Delaware corporation ("ROO"), pursuant to which Avenue Group agreed to acquire 75 shares of the common stock of ROO for $200,000. The sale of the shares of ROO to Avenue Group pursuant to the Subscription Agreement was conditioned upon the closing of the transactions contemplated by that certain Agreement and Plan of Merger dated December 2, 2003 (the "Merger Agreement") by and among the Issuer, ROO, VRLT Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Issuer ("Merger Sub") and Jacob Roth and Bella Roth. Pursuant to the Merger Agreement, ROO agreed to merge with and into Merger Sub, with ROO being the surviving corporation (the "Merger"). In connection with the Merger, all of the issued and outstanding shares of ROO were cancelled and converted into the right to receive an aggregate of 148,000,000 shares of the Common Stock of the Issuer. As a result of the Merger, all of the shares of ROO common stock owned by Avenue Group, including the 75 shares acquired by the Subscription Agreement were automatically converted into an aggregate of 40,000,000 shares of the Common Stock of the Issuer. Avenue Group has acquired, and currently holds, its shares of Common Stock in the Issuer for investment purposes only. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Avenue Group beneficially owns 40,000,000 shares of the Common Stock, or approximately 25.4% of the outstanding Common Stock. This percentage is based on 157,669,130 shares of Common Stock outstanding upon consummation of the Merger as set forth in the Merger Agreement. CUSIP No. 928234 10 3 SCHEDULE 13D Page 4 of 7 (b) Avenue Group has the sole power to vote and dispose, or direct the disposition, of all 40,000,000 shares of the Common Stock.. (c) Not applicable. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Avenue Group and ROO are parties to the Subscription Agreement, pursuant to which Avenue Group acquired 75 shares of the common stock of ROO. ROO also granted Avenue Group certain registration rights with respect to the shares of ROO owned by Avenue Group, all pursuant to a registration rights agreement dated December 2, 2003 between Avenue Group and ROO. Upon consummation of the Merger, all shares of common stock of ROO held by Avenue Group were automatically converted into an aggregate of 40,000,000 shares of the Common Stock of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 99.1 Subscription Agreement dated December 2, 2003 between Avenue Group and ROO. 99.2 Registration Rights Agreement dated December 2, 2003 between Avenue Group and ROO. 99.3 Agreement and Plan of Merger dated December 2, 2003 (the "Merger Agreement") by and among the Issuer, ROO, VRLT Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Issuer and Jacob Roth and Bella Roth.* * Previously filed as Exhibit 2.1 to Issuer's Form 8-K filed on December 18, 2003 (File No. 000-25659), which exhibit is incorporated herein by this reference. CUSIP No. 928234 10 3 SCHEDULE 13D Page 5 of 7 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: January 8, 2004 Avenue Group, Inc. By: /s/ Jonathan Herzog ------------------------------------------------ Name: Jonathan Herzog Title: Executive Vice President and Secretary CUSIP No. 928234 10 3 SCHEDULE 13D Page 6 of 7 Annex I INFORMATION CONCERNING EXECUTIVE OFFICERS AND DIRECTORS OF AVENUE GROUP, INC. The following are the name and present principal occupation or employment for each director and executive officer of Avenue Group. The address of each director and executive officer is 15303 Ventura Boulevard, 9th Floor, Sherman Oaks, California 91403. Mr. Tan is a citizen of Australia. Mr. Mochkin , Mr. Herzog and Mr. Aharonoff are all citizens of the United States. NAME AND ADDRESS POSITION(S) CURRENTLY HELD WITH THE COMPANY - ---------------- ------------------------------------------- Levi Mochkin President, Chief Executive Officer and Director Jonathan Herzog Executive Vice President, Chairman of the Board, Secretary and Director Jim Tan Chief Financial Officer and Director Daniel Aharonoff EVP -Information Technology; VideoDome.Com Networks, Inc., Chief Executive Officer LEVI MOCHKIN has served as Avenue's Chief Executive Officer, President and Director since October, 2003. He has also served as the Chief Executive Officer of Avenue Energy since October 2003 and as one of Avenue Energy's Directors and its Director Operations since November, 2002. Previously, he served as one of Avenue's initial directors from mid 1999 until August 2001 and served as its Chief Executive Officer from January 1999 until August 2001. For over twelve years, Mr. Mochkin has been an executive director of the Ledger Holdings Group, located in Melbourne, Australia which until 1999 was engaged in equity and capital market activities in Australia. From 1995 to 1999, Ledger was contracted to Bell Securities Limited for the development of Bell's equity brokering business. In 1997, Bell through Mr. Mochkin and his Ledger Group, acted on behalf of one of the Australia's largest gold mining companies, Great Central Mines and carried out two simultaneous on market takeover bids on the Australian Stock Exchange, worth a combined total value of AUD $330 million. Great Central Mines was ultimately acquired by Normandy Mining, which in turn was acquired by Newmont Mining in the United States. Mr. Mochkin is the brother-in-law of Jonathan Herzog. From 1999 through 2001, Mr. Mochkin was mostly inactive as a broker, but continued to be active as a private investor. On December 3, 2001, Mr. Mochkin entered into a voluntary undertaking with the Australian Securities and Investment Commission ("ASIC") "not to act as a representative of a securities adviser or an investment adviser" and relinquished his license. This was a result of concerns raised by ASIC that during a 14-month period from August 1997 through October 1998, Mr. Mochkin may have acted in contravention of Sections 997 and 998 of the Australian Corporations Act of 2001 which "prohibit trading on the stock market that may give a false and misleading appearance in relation to the market for, or the price of, a stock". There has been no assertion of personal gain by Mr. Mochkin relating to the activity under concern by ASIC. Mr. Mochkin denied the ASIC concerns and requested and received from ASIC a letter that he may request a review of the undertaking and may ask that the undertaking be rescinded at any time. JONATHAN HERZOG. Mr. Jonathan Herzog, the original founder of the Company, served as its Chief Financial Officer from February 1999 to August 2001, when he filled a vacancy to become the Company's Chairman of the Board and Chief Executive Officer. Since November 2001, Mr. Herzog has served as an Executive Vice President of the Company and in May 2002 was once again appointed as its Chairman. Between 1995 and 1999, Mr. Herzog was a securities dealer and consultant with the Ledger Holdings Group at Bell Securities Limited, a member of the Australian Stock Exchange. He has been actively involved in the Australian financial markets for over thirteen years. He attended the Rothberg School at Hebrew University in Jerusalem in 1991. Mr. Herzog is a Fellow of the CUSIP No. 928234 10 3 SCHEDULE 13D Page 7 of 7 Australian Institute of Company Directors since 1993, and holds a Bachelor of Economics Degree from Monash University in Melbourne, Australia. (YAM-HIN) JIM TAN. Mr. Jim Tan is a Chartered Accountant in Australia. Mr. Tan has served as the Company's Chief Financial Officer since August 2001. Mr. Tan joined the Company in April 2001, to serve as a financial controller and manager of Business Development at Stampville. For a period of over five years prior to April 2001, Mr. Tan was a self-employed Business Consultant in Malaysia consulting to government agencies in Malaysia and to private industry in the Pacific Rim and China. In 1976, he was admitted as an associate member to the Institute of Chartered Accountants in Australia. From 1967 to 1975, Mr. Tan was employed in Melbourne, Australia, with various Chartered Accounting firms, including Marquand and Co., which became part of Hall Chadwick and Coopers and Lybrand, now known as Price Waterhouse Coopers, specializing in the areas of Audit and Insolvency. DANIEL AHARONOFF. Mr. Daniel Aharonoff has served as EVP- Information Technology of the Company since October, 2003. Previously, he served as a director and President of the Company from May 2002 until October, 2003. Mr. Aharonoff is also the Chief Executive Officer, founder and along with his wife Vardit Cohen, 50% shareholder of our 50% subsidiary VideoDome. Prior to founding VideoDome in 1997, Mr. Aharonoff was the founder in 1995 and Chief Executive Officer of Infolink Communications, an Internet training center. Mr. Aharonoff has been involved in the digital media sector since the industries inception in 1995. As a result of Mr. Aharonoff's new media background he has provided strategic support for NBC and served as interim CTO for The Fox Family Channel and FoxKids Online Network. An electronics engineer and avid inventor by trade Mr. Aharonoff is a contributing writer, speaker, and commentator on the topic of digital media. EX-99.1 3 subscriptionagmt991.txt SUBSCRIPTION AGREEMENT Exhibit 99.1 SUBSCRIPTION AGREEMENT ROO MEDIA CORPORATION This Subscription Agreement is made by and between ROO Media Corporation Inc., a Delaware corporation (the "Company"), and the undersigned, a prospective purchaser (the "Purchaser"), who is subscribing hereby for seventy-five (75) shares of the Company's common stock (the "Shares"), in a private placement by the Company (the "Offering") to one or more qualified investors. The Offering is made pursuant to the terms of an Information Memorandum provided to Purchaser by the Company (referred to herein as the "Disclosure Document"). Upon the consummation of the merger of the Company with and into a NASDAQ OTCBB Listed company, as described in the Disclosure Document (the "Merger"), the Shares shall be automatically converted into approximately Fifteen Million (15,000,000) shares of the common stock of the successor company ("Newco") following the Merger. Purchaser acknowledges and understands that the sale of the Shares is not covered by an effective Registration Statement pursuant to the United States Securities Act of 1933, as amended (the "Act"). Accordingly, the reoffer and resale of the Shares by the undersigned will be restricted pursuant to the Act. In consideration of the Company's agreement to accept the undersigned as a security holder of the Company upon the terms and conditions set forth herein, the Purchaser agrees and represents as follows: A. SUBSCRIPTION The Purchaser hereby subscribes to purchase the Shares for the aggregate purchase price of $200,000 (the "Subscription"). Upon satisfaction of the conditions to closing set forth in Paragraph E of this Subscription Agreement, the Purchaser shall pay and deliver to the Company the purchase price for the Shares, in the form of a check or wire transfer (the "Payment"). As used herein, the term "Shares" shall include shares of the Company's common stock as well as the securities of any successor to the Company issued to the former shareholders of the Company. Upon delivery of the executed Subscription Agreement to the Company, the Purchaser's commitment is irrevocable and cannot be withdrawn, subject to the satisfaction of the conditions set forth in Paragraph E herein. B. REGISTRATION RIGHTS The Company has agreed, subject to the requirements and restrictions of the Act and the terms and conditions of the Registration Rights Agreement between the Company and the Purchaser, to include the reoffer and resale by Purchaser of the Shares purchased in this Offering in a registration statement under the Act (the "Registration Statement"). The Company has agreed to utilize its best efforts to (i) file the Registration Statement with the Securities and Exchange Commission (the "SEC") no later than March 31, 2004, and (ii) to take such further actions and file such amendments to the Registration Statement as C-1 may be necessary to respond to any comments that the SEC may have in a timely manner and to otherwise take such steps as may be necessary so that the Registration Statement is declared effective as soon as reasonably practicable after the filing thereof. The Purchaser shall cooperate with the Company in connection with the preparation and filing of the Registration Statement and shall take such actions as are reasonably requested by the Company in connection therewith. Notwithstanding the Company's best efforts, in the event the Company has not filed the Registration Statement with the SEC on or prior to April 15, 2004, or the Registration Statement is not declared effective by the SEC on or prior to August 1, 2004, the Company agrees to issue to the Purchaser a number of shares of its common stock equal to two percent (2%) of the total number of Shares sold to Purchaser pursuant to this Subscription Agreement (the "Additional Shares"). In addition, if, at the end of each fifteen (15) calendar day period following April 15, 2004 or August 1, 2004, as applicable, the Company still has not filed the Registration Statement with the SEC, the Company shall issue to Purchaser a number of shares of its common stock equal to two percent (2%) of the total number of Shares (including any Additional Shares) sold or issued to Purchaser pursuant to this Subscription Agreement. Any Additional Shares issued by the Company shall be included with the Shares on the Registration Statement. Notwithstanding the foregoing, the Company shall not be obligated to issue the Additional Shares if the delay in filing of the Registration Statement is caused solely by the Purchaser's failure to deliver, in a commercially reasonable and timely manner, the information regarding the Purchaser that is needed by the Company to complete the Registration Statement. In no event shall the issuance of any Additional Shares to the Purchaser increase the aggregate amount of the Payment otherwise owed by Purchaser. The form of the Registration Rights is attached to the Memorandum as Exhibit "A." At Purchaser's option and upon delivery of notice to the Company from Purchaser, the Registration Statement shall also cover, in addition to the reoffer and resale of the Shares, the distribution of the Shares to the Purchaser's shareholders. C. REPRESENTATIONS AND WARRANTIES 1. The Purchaser understand that the Shares are being offered and sold under the exemption from registration provided for in Section 4(2) of the Act, that this Subscription was unsolicited, and no other offering literature or prospectus other than the information already received has been provided, that this transaction has not been scrutinized by the SEC or by and any administrative agency charged with administration of the Securities laws of any state (except some states where the transaction might be registered). As a material inducement to the Company in connection with its consideration as to whether to accept this Subscription, the Purchaser hereby represents and warrants to, and agrees with the Company as follows: (a) The Shares are being purchased for the Purchaser's own account, for investment purposes only, and not for the account of any other person, and not with a view to distribution, assignment, or resale to others or to fractionalization in whole or in part and that the offering and sale of the Shares is intended to be exempt from registration under the Securities Act of 1933 (the "Act") by virtue of Section 4(2) of the Act and the provisions of Regulation D promulgated there under ("Regulation D"). In furtherance thereof, the Purchaser represents, warrants, and agrees, except as expressly set forth herein, no other person has or will have a direct or indirect beneficial interest in such Shares and the Purchaser will not sell, hypothecate, or otherwise transfer his Shares except in accordance with the Act and applicable state securities laws or unless, in the opinion of C-2 counsel for the Company, an exemption from the registration requirements of the Act and such laws is available. (b) The Purchaser has been furnished with and has carefully read the Disclosure Document. (c) In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representations or other information (whether oral or written) from the Company, or any of its agents other than as set forth in the Disclosure Documents. (d) The Purchaser hereby represents and warrants that all documents, books and records and other information pertaining to the Company and this investment that the Purchaser or its representatives, including Purchaser's attorney, his accountant and/or other duly designated purchaser representative, have deemed to be necessary in order for the Purchaser or its representative to appropriately evaluate its investment in the Company have been made available to the Purchaser by the Company. (e) The Purchaser recognizes the Company (xi) has only been organized since 2001 and that it has little financial or operating history, (ii) has never been profitable and does not expect to be profitable in the foreseeable future, (iii) has extremely limited financial resources and will be dependant on proceeds from the sale of the Shares and other financings for its working capital for the foreseeable future, (iv) that investment in the Company involves substantial risks, and (v) the Purchaser has taken full cognizance of and understands all of the risk factors related to the purchase of Shares, including, but not limited to, those risk factors set forth within the Information Memorandum. (f) The Purchaser has carefully considered and has, to the extent the Purchaser believes such discussion necessary, discussed with the Purchaser's professional legal, tax and financial advisers the suitability of an investment in the Company for the Purchaser's particular tax and financial situation and the Purchaser has determined that the Shares are a suitable investment for the Purchaser. (g) The Purchaser has had an opportunity to review the Disclosure Document and to discuss its contents with officers of the Company. Based on the representations and warranties of the Company contained in the Disclosure Document and in this Subscription Agreement, the Purchaser is able (i) to bear the economic risk of this investment, (ii) to hold the shares indefinitely, and (iii) presently to afford a complete loss of this investment; the Purchaser has adequate means of providing for current needs and personal contingencies, has no need for liquidity in this investment. (h) The person executing this Subscription Agreement on behalf of the Purchaser has been duly authorized and is duly qualified (A) to execute and deliver this Subscription Agreement and all other instruments executed and delivered on behalf of the Purchaser in connection with the purchase of the Shares and (B) to purchase and hold Shares. The signature of the person executing this Subscription Agreement on behalf of the Purchaser is binding C-3 upon the Purchaser and the Purchaser has not been formed for the specific purpose of acquiring Shares. (i) The Purchaser has had the opportunity to consult with advisors, and recognizes that the Company's counsel, accountants and other advisors have not represented and do not represent the Purchaser's interest in an investment in the Company. 2. Representations of the Company The Company hereby represents and warrants to, and agrees with the Purchaser as follows: (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; and (b) The execution, delivery and performance of this Agreement have been duly authorized by the Board of Directors of the Company. The Company has full corporate power and authority to enter into this Agreement and to perform its obligations hereunder. This Agreement constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms and conditions except to the extent the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors' rights or by general equitable principles. (c) The Company has duly authorized the issuance and delivery of the Common Stock upon terms and conditions set forth herein, and upon such issuance and delivery against payment, the Common Stock will be validly issued, fully paid and non-assessable. (d) The Offering is a private placement by the Company exempt from the registration requirements of the Act pursuant to Section 4(2) thereunder. (e) Upon the consummation of the Merger, the Shares shall be automatically converted into no less than Fifteen Million (15,000,000) shares of the common stock of Newco. (f) Upon the consummation of the Merger and the closing of the sale of the Shares pursuant to the terms of this Subscription Agreement, Purchaser shall be the owner of not less than Forty Million (40,000,000) shares of the common stock of Newco and such shares shall represent not less than twenty-five and nine-tenths percent 25.5% of the issued and outstanding shares of Newco on a fully-diluted basis. 3. The foregoing representations and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of the acceptance hereof by the Company and shall survive thereafter. If such representations and warranties shall not be true and accurate in any respect, the Purchaser or the Company, as the case may be, will, prior to such acceptance, given written notice of such fact to the other party specifying which representations and warranties are not true and accurate and the reasons therefore. C-4 4. The Purchaser and the Company shall indemnify and hold harmless one another or any of their respective officers, employees, registered representatives, agents, attorneys, directors, or control persons of any such entity (collectively, "Representatives") who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, against losses, liabilities and expenses (including reasonable attorneys' fees, judgments, fines and amounts paid in settlement or otherwise) incurred by the Purchaser, the Company or their respective Representatives, by reason of or arising from or relating to any actual or alleged (i) breach of any of the representations, warranties, covenants or agreements set forth in this Subscription Agreement; (ii) any misrepresentation or misstatement of facts or any material omission to represent or state facts made by such party to the other party concerning himself or his financial position in connection with the offering or sale of the Shares set forth in this Subscription Agreement, the Information Memorandum or any other Disclosure Document which is not remedied by timely notice to the other party as provided above. C. INVESTOR INFORMATION The Purchaser will only accept subscriptions from persons who meet certain suitability standards. D. UNDERSTANDINGS 1. The Purchaser understands, acknowledges and agrees with the Company and as follows: (a) This subscription is and shall be irrevocable, subject to the satisfaction of the closing conditions set forth in paragraph E herein. (b) No federal or state agency has made any finding or determination as to the fairness of this offering for investment, nor any recommendation or endorsement of the Shares. (c) Currently, there is no public market for the Shares or any of the Company's securities and there is no certainty that such a market will ever develop. There can be no assurance that the Purchaser will be able to sell or dispose of his Shares. Moreover, no assignment, sale, transfer, exchange or other disposition of the Shares can be made other than in accordance with all applicable securities laws. (e) There can be no assurance as to the federal or state tax results of an investment in Shares. (f) Any information which the Purchaser receives which is not contained in the Disclosure Documents and is not otherwise available to the public shall be deemed to be confidential and nonpublic, and all such information shall be kept in confidence by the Purchaser and shall neither be used by the Purchaser to the Purchaser's personal benefit (other than in connection with his subscription for shares) nor disclosed to any third party for any reason; provided, that this obligation shall not apply to any such information which (i) is part of the public knowledge or literature and readily accessible at the date hereof; (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of these C-5 provisions); or (iii) is received from third parties (except third parties who disclose such information in violation of any confidentiality agreements including, without limitation, any Subscription Agreement they may have with the Company). (g) The Purchaser has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of investment in the Company and of making an informed investment decision. (h) The Purchaser has had prior personal or business relationships with the Company or its officers or directors or by reason of the Purchaser's business or financial experience, has the capacity to protect the Purchaser's own interest in connection with this transaction. 2. The representations, warranties, understandings, acknowledgments and agreements of Purchaser in this Agreement are true and accurate as of the date hereof, shall be true and accurate as of the date of the acceptance hereof by the Company and shall survive thereafter. E. CLOSING CONDITIONS In addition to the other conditions to the sale of the Shares described herein, the closing of the sale of the Shares to Purchaser, and the obligation of the Purchaser to deliver the Payment to the Company, is expressly conditioned upon the satisfaction of each of the following conditions to the satisfaction of Purchaser, in its discretion, unless such conditions are waived by Purchaser: 1. The Merger is completed and Company (or its successor) is an SEC reporting company under the terms of the Securities and Exchange Act of 1934, as amended; 2. The shares of the Company's (or its successor's) common stock are listed for trading on the OTC Bulletin Board; 3. The Purchaser shall have received a certificate, dated as of the date hereof (the "Closing Date"), of the President or an Executive or Senior Vice President and a principal financial or accounting officer of the Company in which such officers, to the best of their knowledge after reasonable investigation, shall state that (i) the representations and warranties of the Company in the Disclosure Document are true and correct, (ii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date, (iii) there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Disclosure Documents or as described in such certificate, and (iv) the Merger has been completed and the shares of the Company's (or its successor's) common stock are listed for trading on the OTC Bulletin Board; and C-6 4. The Purchaser shall have received an opinion, dated such Closing Date, of counsel for the Company, that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Document and to enter into and perform its obligations under the Subscription Agreement and the Registration Rights Agreement. (ii) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business as described in the Disclosure Document, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a material adverse effect on the Company's business, financial condition or operations. (iii) The Subscription Agreement and the Registration Rights Agreement constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (iv) The Shares have been duly authorized, are validly issued, fully paid and nonassessable; and the outstanding shares of the Company's common stock have been duly authorized and validly issued, are fully paid and nonassessable. (v) No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by the Subscription Agreement and the Registration Rights Agreement in connection with the issuance or sale of the Shares by the Company, except such as may be required under state securities laws; (vi) The execution, delivery and performance of the Subscription Agreement and the Registration Rights Agreement and the issuance and sale of the Shares and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any statute, any rule, regulation or order of any governmental agency or body or any court having jurisdiction over the Company or any of its properties, or the charter or by-laws of the Company, or, to such counsel's knowledge, any agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the properties of the Company is subject, and the Company has full power and authority to authorize, issue and sell the Shares as contemplated by the Subscription Agreement. (vii) The sale of the Shares to Purchaser pursuant to the Registration Rights Agreement is exempt from the registration requirements of the Act pursuant to Section 4(2) thereof; and (viii) The Company (or its successor) is an SEC reporting company and its shares of common stock are listed for trading on OTC Bulletin Board. C-7 F. MISCELLANEOUS 1. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, singular, or plural as the identity of the person or persons may require. 2. Neither this Subscription Agreement nor any provisions hereof shall be waived, modified, changed, discharged, terminated, revoked, or canceled except by an instrument in writing signed by the party against whom any change, discharge, or termination is sought. 3. Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered or sent by registered mail, return receipt requested, addressed to the other party at the address of such party set forth on the signature page, as amended from time to time, or, in the case of the Purchaser, at the address provided in this Subscription Agreement, or to such other address furnished by notice given in accordance with this Article E. 4. Failure of either party to exercise any right or remedy under this Subscription Agreement or any other agreement between the Company and the Purchaser, or otherwise, or delay by either party in exercising such right or remedy, will not operate as a waiver thereof. No waiver by either party will be effective unless and until it is in writing and signed by such party. 5. Arbitration. (a) Any dispute, controversy or claim arising out of, relating to, or in connection with, this Subscription Agreement, or the breach, termination or validity thereof, except for claims for equitable, including injunctive, relief, shall be finally settled by arbitration conducted in accordance with this Section. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association (the "AAA") in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties. The seat of the arbitration shall be Los Angeles, CA.. Each party hereby irrevocably submits to the jurisdiction of the arbitrator in Los Angeles, CA and waives any defense in an arbitration based upon any claim that such party is not subject personally to the jurisdiction of such arbitrator, that such arbitration is brought in an inconvenient forum or that such venue is improper. (b) The arbitration shall be conducted by one arbitrator, who shall be appointed by the AAA. The arbitrator shall have the authority only to enforce the legal and contractual rights of the parties and shall not add to, modify, disregard, or refuse to enforce any contractual provision. There shall be no pre-arbitration discovery. The parties acknowledge and agree that by entering into this Subscription Agreement they are agreeing to this arbitration provision and are waiving all rights to a trial by jury. The arbitral award shall be in writing and shall be final and binding on the parties. The award shall include an award of costs, including the fees and costs of the arbitrators and reasonable attorneys' fees and disbursements in accordance with the arbitrator's view of the merits of the parties' respective positions in the dispute. Except upon a finding of actual fraud, intentional or knowing misrepresentation, willful and knowing omissions of material fact or willful misconduct, no such award shall include punitive C-8 damages. Judgment upon the award may be entered by any governmental authority having jurisdiction thereof or having jurisdiction over the parties or their assets. 6. This Subscription Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of New York (without giving effect to principles of conflicts of law) and shall be binding upon and shall inure to the benefit of the parties and their respective heirs, estate, legal representatives, successors and assigns. 7. In the event that any provision of this Subscription Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof. 8. This Subscription Agreement along with the Exhibits hereto constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersede any and all prior or contemporaneous representations, warranties, agreements and understandings in connection therewith. Except as otherwise provided in this Section 8, this Subscription Agreement may be amended only by a writing executed by all parties hereto. No party shall be liable or bound to the other in any manner by any warranties, representations or covenant except as specifically set forth herein. 9. Title to the Shares shall be taken as follows: Avenue Group, Inc., a Delaware corporation. 10. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein. 11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 12. The titles of the paragraphs and subparagraphs of this Agreement are for convenience and are not to be considered in construing this Agreement. 13. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or if deposited the United States Post Office, be registered or certified mail, addressed to a party at its address hereinafter shown below its signature or at such other address as such party may designate by ten (10) days advance written notice to the other party. C-9 14. The warranties and representations of the Company contained in or made pursuant to this Agreement shall survive the executions and delivery of this Agreement and the Closing hereunder. C-10 ROO MEDIA CORPORATION. SUBSCRIPTION AGREEMENT SIGNATURE PAGE This page constitutes the Signature Page for the Subscription Agreement. The Purchaser represents to you that (a) the information contained herein is complete and accurate on the date hereof and may be relied upon by you and (b) the Purchaser will notify you immediately of any change in any of such information occurring prior to the acceptance of the subscription and will promptly send you written confirmation of such change. The Purchaser hereby certifies that he has read and understands the Disclosure Documents and this Subscription Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Subscription Agreement this 28th day of November, 2003. ROO Media Corporation. /s/ Robert Petty ---------------------------------------- By: Robert Petty Its: CEO Avenue Group, Inc., /s/ Jonathan Herzog ---------------------------------------- By: Jonathan Herzog Its: Executive Vice President Tax I.D. No.: Address: 15303 Ventura Blvd., Suite 900 Sherman Oaks, CA 91403 75 - ---------------- Number of Shares $200,000 (US) Total Purchase Price THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION THEREFROM IS AVAILABLE. C-11 EX-99.2 4 registrationagmt992.txt REGISTRATION RIGHTS AGREEMENT Exhibit 99.2 EXHIBIT A REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of November 28, 2003, by and between ROO Media Corporation Inc., a Delaware corporation (the "Company"), and Avenue Group, Inc., a Delaware corporation (the "Shareholder"), with reference to the following facts. W I T N E S S E T H: WHEREAS, on the date hereof, pursuant to the terms of the Subscription Agreement dated November 28, 2003, between the Company and the Shareholder, (the "Offering") the Shareholder has acquired an aggregate amount of seventy-five (75) shares of the Company's common stock (the "Common Stock") (hereinafter collectively referred to as the "Shares"); WHEREAS, the Company has agreed with the Shareholder to grant certain registration rights to Shareholder with respect to the Shares. NOW, THEREFORE, in consideration of the mutual representations, covenants and agreements contained herein, the parties hereto agree as follows: 1. Registration of the Shares. -------------------------- (a) The Company agrees, subject to the requirements and restrictions of the Securities Act of 1933, as amended (the "Act"), and the terms and conditions herein, to include the reoffer and resale by the Shareholder of the Shares purchased by the Shareholder in this Offering in a registration statement under the Act (the "Registration Statement"). The Registration Statement shall also, at the Shareholder's option, cover the distribution of the Shares to the Shareholder's shareholders. The Company has agreed to utilize its best efforts to (i) file the Registration Statement with the Securities and Exchange Commission (the "SEC") no later than March 31, 2004, and (ii) to take such further actions and file such amendments to the Registration Statement as may be necessary to respond to any comments that the SEC may have in a timely manner and to otherwise take such steps as may be necessary so that the Registration Statement is declared effective as soon as reasonably practicable after the filing thereof. Notwithstanding the Company's best efforts, in the event the Company has not filed the Registration Statement with the SEC on or prior to April 15, 2004, or the Registration Statement is not declared effective by the SEC on or prior to August 1, 2004, the Company agrees to issue to the Shareholder a number of shares of its common stock equal to two percent (2%) of the total number of Shares sold to Shareholder pursuant to the Subscription Agreement (the "Additional Shares"). In addition, if, at the end of each fifteen (15) calendar day period following April 15, 2004 or August 1, 2004, as applicable, the Company still has not filed the Registration Statement with the SEC, the Company shall issue to Shareholder a number of shares of its common stock equal to two percent (2%) of the total number of Shares (including any Additional Shares) sold or issued to Shareholder pursuant to this Subscription Agreement. Any Additional Shares issued by the Company shall be included with the Shares on the Registration Statement. Notwithstanding the foregoing, the Company shall not be obligated to issue the Additional Shares if the delay in filing of the Registration Statement is caused solely by the Shareholder's failure to deliver, in a commercially reasonable and timely manner, the information regarding the Shareholder that is needed by the Company to complete the Registration Statement. In connection with the foregoing, the Shareholder agrees to cooperate with the Company and to provide the Company in a timely manner with all information regarding the Shareholder as the Company may reasonably request in connection with the preparation of the Registration Statement. In addition, the Shareholder agrees to promptly notify the Company of any changes in the information set forth in the Registration Statement regarding Shareholder or Shareholder's plan of distribution as set forth in such Registration Statement. (b) The Company shall prepare and file with the SEC (i) such amendments and supplements to the Registration Statement and any "Prospectus," as such term is hereinafter defined, used in connection therewith, and (ii) such other filings required by the SEC, in each case as may be necessary to keep the Registration Statement continuously effective and not misleading until the first to occur of (A) all of the Shares have been previously sold, distributed or disposed of pursuant to the Registration Statement; (B) all of the Shares have otherwise been sold, distributed, transferred or disposed of to any entity other than an Affiliate of the Shareholders; or (C) one hundred and eighty (180) days from the effective date of the Registration Statement or such other time thereafter as the Company in its sole discretion may agree to. (c) In order to facilitate the public sale or other disposition or distribution of all or any of the Shares by the Shareholders pursuant to the Registration Statement, the Company shall furnish to the Shareholders with respect to the Shares registered under the Registration Statement such number of copies of prospectuses, prospectus supplements and preliminary prospectuses as such Shareholders reasonably requests in conformity with the requirements of the Act (collectively, the "Prospectus"). (d) The Company shall file such documents, if any, reasonably required of the Company for normal blue sky clearance in New York, California and such other state(s) as the Company in its sole discretion may agree to; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this clause (d), (ii) subject itself to general taxation in any such jurisdiction; (iii) consent to general service of process in any such jurisdiction; or (iv) undertake compliance with substantive requirements of the blue sky laws or regulations of a jurisdiction which are unreasonably burdensome or onerous, including escrow requirements. 2. Registration Statement Delaying or Suspension Events. ---------------------------------------------------- (a) Notwithstanding anything to the contrary contained herein, the Company shall be entitled to (i) postpone the filing of the Registration Statement required to be prepared and filed by it hereunder or (ii) withdraw the Registration Statement after its filing but before it has been declared effective, if, in either case, the Company in its good faith discretion determines that such registration would interfere in any material respect with any proposal or plan by the Company to engage in any financing or any material acquisition or disposition by the Company or any subsidiary thereof of the capital stock or assets (other than in the ordinary course of business), any tender offer or any offering, merger, consolidation, corporate reorganization or restructuring or other similar transaction material to the Company and its subsidiaries as a whole ("Material Event"). In the event the filing of the Registration Statement is postponed or withdrawn, the Company shall file or re-file the Registration Statement within ten (10) days after the Company, in its good faith discretion, determines that the Material Event has been completed or terminated. Nothing in this paragraph shall effect the Company's obligations to deliver to Shareholder the Additional Shares pursuant to paragraph 1(a) herein. (b) The Shareholders further acknowledge and agree that after the effective date of the Registration Statement the Company may, in its good faith discretion, determine that there is a Material Event and that the use of the Prospectus should be suspended until such time as an amendment or supplement to the Registration Statement or the Prospectus has been filed by the Company and any such amendment to the Registration Statement is declared effective by the SEC, or until such time as the Company has filed an appropriate report with the SEC pursuant to the Securities Exchange Act of 1934, as amended, to report the Material Event. Each Shareholder hereby covenants that it will not sell any Shares pursuant to the Prospectus during the period commencing at the time at which the Company gives such Shareholder written notice of the suspension of the use or the Prospectus and ending at the time the Company gives such Shareholder written notice that the Shareholders may thereafter effect sales pursuant to the Prospectus. (c) The Company shall disclose to the Shareholders the nature of any Material Event or the business purpose for which it has delayed or withdrawn the Registration Statement or suspended the use of the Prospectus, provided the Shareholders agree to keep any information so disclosed confidential and not complete any trades of Common Stock until the Company informs the Shareholders the information is considered public information or is no longer material. 3. Transfer of Shares. Shareholders agree not to effect any disposition of the Shares that would constitute a "sale" within the meaning of the Act, except pursuant to the Registration Statement or in a transaction exempt from registration under the Act, in which case the Shareholders shall, prior to effecting such disposition, submit to the Company an opinion of counsel in form and substance reasonably satisfactory to the Company to the effect that the proposed transaction is in compliance with the Act. 4. Registration Expenses --------------------- All expenses incident to the Company's performance of or compliance with this Agreement including, without limitation (i) all registration and filing fees, all fees and expenses associated with filings required to be made with the NASD, as may be required by rules and regulations of the NASD, fees and expenses of compliance with securities or blue sky laws (including fees and disbursements of counsel in connection with blue sky qualifications for the Shares), if any, rating agency fees, printing expenses (including expenses of printing certificates for the Shares in a form eligible for deposit with the Depository Trust Company and of printing prospectuses, messenger and delivery expenses, (ii) internal expenses (including, without limitation, all salaries and expenses of their officers and employees performing legal or accounting duties), and (iii) fees and expenses of (a) counsel for the Company, (b) the Company's independent certified public accountants, and (c) counsel for the Shareholders, (all such expenses being herein called "Registration Expenses") will be borne by the Company. Any underwriting discounts or commissions attributable to the sale of the Shares shall be borne by the Shareholders. In the event that following effectiveness of the Registration Statement, it becomes necessary for the Company to prepare and file a supplemental prospectus or amended prospectus in order to maintain the effectiveness of such Registration Statement, the Company shall pay all printing costs associated with the printing of such supplemental or amended Prospectus to be distributed in connection with sales of their securities pursuant thereto. 5. Miscellaneous ------------- (a) Publicity. No press release, publicity, disclosure or notice to any Person concerning any of the transactions contemplated by this Agreement shall be issued, given, made or otherwise disseminated by the Shareholders, or any of their respective Associates at any time, without the prior written approval of the Company. Notwithstanding anything to the contrary contained herein, the Company shall be entitled to issue press releases regarding the transactions contemplated by this Agreement. (b) Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of New York (without giving effect to principles of conflicts of law). (c) Arbitration of Disputes. ------------------------ (i) All Disputes arising between the parties hereto with respect to the making, construction, terms, or interpretation of this Agreement or any breach thereof, or the rights or obligations of any party hereto or thereto, shall, in lieu of court action, be submitted to mandatory, binding arbitration, pursuant to the terms of Section F5 of each Shareholder's Subscription Agreement. (ii) BY INITIALING IN THE SPACE BELOW, YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" SECTION OF YOUR SUBSCRIPTION AGREEMENT DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY THE LAWS OF THE STATE OF CALIFORNIA AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" SECTION OF YOUR SUBSCRIPTION AGREEMENT. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE LAWS OF THE STATE OF CALIFORNIA. YOU AGREE THAT YOUR AGREEMENT TO THIS ARBITRATION SECTION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" SECTION OF YOUR SUBSCRIPTION AGREEMENT TO NEUTRAL ARBITRATION. INITIALS RP COMPANY'S INITIALS JH (d) Notices. All notices and other communications required or permitted under this Agreement shall be in writing which are addressed as provided in this Section 5(d) if delivered personally against proper receipt or by confirmed facsimile transmission shall be effective upon delivery and (ii) if delivered (A) by certified or registered mail with postage prepaid shall be effective five (5) Business Days or (B) by Federal Express or similar courier service with courier fees paid by the sender, shall be effective two (2) Business Days following the date when mailed or couriered, as the case may be. Any party hereto may from time to time change its address for the purpose of notices to such party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents. Initially, all notices shall be sent to the parties hereto as follows: if to the Company: AVENUE GROUP, INC. 15303 Ventura Boulevard Suite 900 Sherman Oaks, CA. 91403 Attention: Jonathan Herzog Telephone: (818) 380-3020 Facsimile: (818) 380-3021 with a copy to (not constituting notice): Barry L. Burten, Esq. Jeffer, Mangels, Butler & Marmaro LLP 1900 Ave. of the Stars, 7th Floor Los Angeles, CA 90067 Telephone: (310) 785-5359 Facsimile: (310) 712-3359 if to the Shareholders at the addresses or facsimile numbers set forth beneath their respective names on the signature page hereof. (e) Headings. The table of contents of this Agreement and the underlined headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. (f) Assignment. No Shareholder may assign any of its rights or delegate any of its obligations under this Agreement to any other person without the prior written consent of the Company. The Company may assign the Company's rights and obligations hereunder to an Affiliate or pursuant to the acquisition of all or substantially all of the voting securities or assets of the Company by means of a merger, stock purchase or other similar transaction. (g) Third Party Beneficiaries. Nothing in this Agreement is intended to provide any rights or remedies to any person (including any employee or creditor of any Shareholder) other than the parties hereto. (h) Severability. In the event that any provision of this Agreement, or the application of such provision to any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be affected and shall continue to be valid and enforceable to the fullest extent permitted by law. (i) Integration, Entire Agreement. Except as expressly noted in Section 5(c) above, this Agreement sets forth the entire understanding of the Parties hereto and supersedes all other agreements and understandings between any of the parties relating to the subject matter hereof and thereof. (j) No Waiver. No failure on the part of either party hereto to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of either party hereto in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver thereof; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. (k) Amendments. This Agreement may not be amended, modified, altered or supplemented except by means of a written instrument executed by the Company and the Shareholder. (l) Representations and Warranties, Representatives. No party hereto shall make any warranties or representations, or assume or create any obligations, on the other party's behalf except as may be expressly permitted hereunder or in writing by such other party. Each party hereto shall be solely responsible for the actions of all its representative employees, agents and representatives. (m) Interpretation of the Agreement: (i) Each party hereto acknowledges that it has participated in the drafting of this Agreement, and any applicable rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in connection with the construction or interpretation of this Agreement; (ii) Whenever required by the context hereof, the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; and the neuter gender shall include the masculine and feminine genders; (iii) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, and shall be deemed to be followed by the words "without limitation"; and (iv) References herein to "Sections" and "Exhibits" are intended to refer to Sections of and Exhibits to this Agreement. (o) Counterparts This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. COMPANY: ROO MEDIA CORPORATION By: /s/ Robert Petty ---------------- Name: Robert Petty Title: CEO SHAREHOLDER: AVENUE GROUP, INC. By: /s/ Jonathan Herzog --------------------------- Name: Jonathan Herzog Title: Executive Vice President -----END PRIVACY-ENHANCED MESSAGE-----