-----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, Qqa1qMn42s8MPhCc5yVbUrwfLUpGgqasqmUyOIPX6G4nG2eOdEg0atVXQrDlYbbN St5WYICLP/5L37FPGoDIJw== 0001019687-05-002521.txt : 20050907 0001019687-05-002521.hdr.sgml : 20050907 20050907144020 ACCESSION NUMBER: 0001019687-05-002521 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050831 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050907 DATE AS OF CHANGE: 20050907 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AVENUE ENTERTAINMENT GROUP INC /DE/ CENTRAL INDEX KEY: 0001023298 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ALLIED TO MOTION PICTURE PRODUCTION [7819] IRS NUMBER: 954622429 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12885 FILM NUMBER: 051072527 BUSINESS ADDRESS: STREET 1: 11111 SANTA MONICA BLVD STREET 2: SUITE 2110 CITY: LOS ANGELES STATE: CA ZIP: 90025 BUSINESS PHONE: 3109966800 MAIL ADDRESS: STREET 1: 11111 SANTA MONICA BLVD STREET 2: SUITE 2110 CITY: LOS ANGELES STATE: CA ZIP: 90025 8-K 1 avenue_8k-090305.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of report (Date of earliest event reported): August 31, 2005 ----------------- Avenue Entertainment Group, Inc - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 001-12885 95-4622429 - ---------------------------- ------------------------ ------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 777 Westchester Avenue, White Plains, New York 10604 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (914) 249-9700 ---------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT Brokaw Purchase - --------------- On September 2, 2005, Avenue Entertainment Group, Inc. (the "Company"), Avenue Pictures, Inc., a wholly owned subsidiary of the Company ("Avenue Pictures"), Cary Brokaw, and Cary Brokaw Productions, Inc. ("Brokaw Productions"), a corporation wholly owned by Cary Brokaw, entered into an Asset Purchase Agreement (the "Brokaw Agreement"), and completed the asset purchase and sale described in the Brokaw Agreement (the "Brokaw Purchase"). The Brokaw Agreement is attached as Exhibit 2.1 to this Report. On September 2, 2005, Cary Brokaw resigned as a director of the Company, and as the Company's President and Chief Executive and Financial Officer. Cary Brokaw also resigned prior to completion of the Brokaw Purchase as a director and officer of the following entities, each of which is a direct or indirect wholly owned subsidiary of the Company: Avenue Pictures, Black Coffee Productions, Inc., Grafasi, Inc., Shadow and Light Productions, Inc., TCB Productions, Inc., and LCA Acquisition Subsidiary. Under the terms of the Brokaw Agreement, (1) Avenue Pictures transferred certain of its assets to Brokaw Productions, (2) Avenue Pictures assigned certain of its liabilities to Brokaw Productions, and (3) Brokaw Productions granted Avenue Pictures a right to certain of the revenues that Brokaw Productions may be entitled to receive in the future related to selected assets transferred by Avenue Pictures to Brokaw Productions pursuant to the Brokaw Agreement. The assets transferred to Brokaw Productions included Avenue Pictures rights in certain theatrical and cable motion picture projects, including all of Avenue Picture's rights under various producer agreements. In addition, the assets also included Avenue Picture's rights to various scripts (including options to purchase or develop various scripts), which may in the future become motion picture or other entertainment projects, as well as certain of Avenue Picture's "First Look" rights with respect to various entertainment projects. Brokaw Productions also acquired various office equipment, furniture, and fixtures so that it could continue Avenue Picture's business that related to the purchased assets. The terms of the Brokaw Agreement require Cary Brokaw to pay the Company a percentage of any proceeds he receives as a result of any future sale of Brokaw Productions or any registered initial public offering of Brokaw Production's equity securities. Cary Brokaw also transferred 711,250 shares of the Company's common stock to Avenue Pictures, and delivered to the Company for cancellation all options held by him to purchase shares of the Company's common stock. The Company also agreed to issue Cary Brokaw a new option to purchase 500,000 shares of the Company's common stock, at a purchase price of $0.50 per share of Company common stock. This stock option was issued as described below. Brokaw Productions did not pay any cash or cash equivalents as consideration for the Brokaw Purchase. The Brokaw Agreement also requires the Company and Avenue Pictures to change their corporate names and to cease all use of the names "Avenue Entertainment Group," "Avenue Pictures," and all other similar names, trademark, brand, and logos, as soon as practicable after September 2, 2005. In connection with the Brokaw Agreement, the Company also entered into a Voting Agreement, dated as of September 2, between the Company and Cary Brokaw, which agreement provides that Cary Brokaw will vote all of the shares of the Company's common stock that he owns in accordance with the recommendation of the Company's board of directors. This Voting Agreement will terminate no later than September 2, 2007. The foregoing summary of the Brokaw Agreement and the Voting Agreement is not complete and is qualified in its entirety by reference to the complete text of the Brokaw Agreement and the Voting Agreement, which are filed as Exhibits 2.1 and 10.1 to this current report on Form 8-K and which is incorporated by reference. As required by the Brokaw Agreement, effective on September 2, 2005, the Company granted Cary Brokaw an option to purchase shares of its common stock pursuant to a Stock Option Agreement between the Company and Cary Brokaw (the "Brokaw Stock Option Agreement"). Under the terms of the Brokaw Stock Option Agreement, the Company issued Cary Brokaw a fully vested option to purchase 500,000 shares of the Company's common stock, at a purchase price of $0.50 per share of Company common stock. The Company did not register this stock option with the Securities and Exchange Commission, and is issuing this stock option to Cary Brokaw under the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the "Act"), as a sale of securities not involving a public offering. Cary Brokaw may require the Company to register the shares subject to his option pursuant to the Act. The foregoing summary of the Brokaw Stock Option Agreement is not complete and is qualified in its entirety by reference to the complete text of the Brokaw Stock Option Agreement, which is filed as Exhibit 10.2 to this current report on Form 8-K and which is incorporated by reference. ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS The response to Item 1.01 above is incorporated herein by reference. ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES The response to Item 1.01 above is incorporated by reference. ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS (b) On September 2, 2005, in connection with the Brokaw Purchase, the Company accepted the resignation of Cary Brokaw as a director of the Company and as the Company's President and Chief Executive and Financial Officer. Cary Brokaw has not resigned as a director or officer of the Company because of a disagreement with the Company on any matter relating to the Company's operations, policies, or practices, nor was Cary Brokaw removed from the Company's board of directors for cause. On September 2, 2005, in connection with the Brokaw Purchase, the Company accepted the resignation of Sheri L. Halfon as a director of the Company and as a Senior Vice President of the Company. Sheri Halfon has not resigned as a director or officer of the Company because of a disagreement with the Company on any matter relating to the Company's operations, policies, or practices, nor was Sheri Halfon removed from the Company's board of directors for cause. On August 31, 2005, Michael Hammer resigned as a director of the Company. Mr. Hammer has not resigned as a director of the Company because of any disagreement with the Company on any matter relating to the Company's operations, policies, or practices, nor was Mr. Hammer removed from the Company's board of directors for cause. (c) Effective upon the resignation of Cary Brokaw as President, Chief Executive Officer, and Chief Financial Officer on September 2, 2005, the Company's board of directors appointed Gene Feldman as its new President, Chief Executive Officer, and Chief Financial Officer. Prior to his appointment as the Company's new President, Chief Executive Officer, and Chief Financial Officer, Mr. Feldman was a Director of the Company and served as the Company's Chairman of the Board, and Mr. Feldman continues to serve the Company in such capacities. Further information regarding Mr. Feldman, his background, and his contractual arrangements with the Company can be found in the Company's 10-KSB filed with the Securities Exchange Commission on April 15, 2005, which is hereby incorporated by reference. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (b) Pro Forma Financial Information: The financial information required by this item will be filed by amendment within 71 days after September 2, 2005. (c) Exhibits: Exhibit Description ------- ----------- 2.1 Asset Purchase Agreement between Cary Brokaw Productions Inc., Cary Brokaw, Avenue Pictures, Inc., and Avenue Entertainment Group, Inc. dated as of September 2, 2005 10.1 Voting Agreement dated as of September 2, 2005, by and among Cary Brokaw ("Brokaw"), Avenue Entertainment Group, Inc., and Gene Feldman 10.2 Stock Option Agreement between Avenue Entertainment Group, Inc. and Cary Brokaw dated September 2, 2005 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: September 7, 2005 By: /s/ Gene Feldman ------------------------------------------ Gene Feldman, President & CEO EX-2.1 2 avenue_8kex2-1.txt ASSET PURCHASE AGREEMENT - CARY BROKAW EXHIBIT 2.1 ASSET PURCHASE AGREEMENT BETWEEN CARY BROKAW PRODUCTIONS, INC., A DELAWARE CORPORATION CARY BROKAW AVENUE ENTERTAINMENT GROUP, INC., A DELAWARE CORPORATION AND AVENUE PICTURES, INC., A DELAWARE CORPORATION September 2, 2005 ASSET PURCHASE AGREEMENT THIS AGREEMENT is entered into as of September 2, 2005, by and among CARY BROKAW PRODUCTIONS, INC., a Delaware corporation ("BUYER"), Cary Brokaw, an individual ("BROKAW"), Avenue Pictures, Inc., a Delaware corporation ("SELLER"), and Avenue Entertainment Group, Inc., a Delaware corporation ("PARENT"). Buyer, Brokaw, Seller and Parent are hereinafter referred to collectively herein as the "PARTIES." RECITALS A. Seller wishes to sell and transfer, and Buyer wishes to purchase and receive, certain assets and certain related liabilities of Seller. B. Brokaw is the sole member of Buyer and, in consideration for the asset sale and transfer described above, wishes to surrender certain rights and certain securities of Seller and Parent held by Brokaw. AGREEMENT In consideration of the representations, warranties and covenants herein contained, the Parties agree as follows: ARTICLE I THE PURCHASE 1.1 PURCHASE AND SALE OF ASSETS. (a) Upon and subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 1.6(a)), Buyer shall purchase from Seller, and Seller shall sell, transfer, convey, assign and deliver to Buyer, in consideration of the payment of the Purchase Consideration to Seller as described in Section 1.3, all right, title and interest, free and clear of all Liens in and to the following assets of Seller (collectively, the "ACQUIRED ASSETS"): (i) ASSIGNED CONTRACTS. All rights of Seller under the agreements identified in SCHEDULE 1.1(A)(I) (collectively, the "ASSIGNED CONTRACTS"). For purposes of clarity, Buyer shall assume such Assigned Contracts as of the Closing. All royalties and other payments paid or payable to Seller under such Assigned Contracts following the Closing (including all accrued but unpaid royalties and other payments) shall become the property of Buyer as of the Closing, and all claims of Seller under such Assigned Contracts (whether or not such claims have arisen or been asserted prior to the Closing) shall become the property of Buyer as of the Closing. (ii) ASSETS RELATED TO THE ASSIGNED CONTRACTS. All goodwill, Intellectual Property (as hereinafter defined), and other assets owned, controlled by, or licensed to Seller that, directly or indirectly, arises out of, or relates to, the Assigned Contracts or the properties or assets to which the Assigned Contracts pertain. (iii) TRADEMARKS. All Trademark and other Intellectual Property associated with the "Avenue Pictures" and "Avenue Entertainment" names (the "AVENUE TRADEMARKS"); PROVIDED HOWEVER that, effective upon the Closing, Buyer hereby grants Seller a limited, non-transferable, royalty-free, worldwide license to use the Avenue Trademarks for the sole purpose of conducting business under such name until the corporate name of Seller has been altered pursuant to Section 6.1 below. (iv) TANGIBLE ASSETS. The tangible assets of Seller set forth on SCHEDULE 1.1(A)(IV). (v) PRE-CLOSING REVENUES. Any revenues received by Seller or Parent pursuant to the Assigned Contracts subsequent to September 30, 2004 and prior to the Closing (as defined below). Any such revenues received by Seller and Parent shall be segregated and set aside for the benefit of Buyer, and shall be paid to Buyer at the Closing (subject to any Participation Rights of Seller pursuant to Section 1.3(a) below). (b) Buyer shall not acquire anything from Seller other than the Acquired Assets. 1.2 ASSUMPTION OF LIABILITIES. Upon and subject to the terms and conditions of this Agreement, Buyer shall assume and become responsible for, and perform, from and after the Closing, Seller's obligations under each of the Assigned Contracts and only such other obligations and liabilities as are specifically described in SCHEDULE 1.2 (the "ASSUMED LIABILITIES"). Buyer shall not assume or become responsible for, and Seller shall remain liable for and responsible for the performance of, any and all obligations and liabilities of Seller existing as of the Closing (or arising after the Closing) other than the Assumed Liabilities (collectively, Seller's "RETAINED LIABILITIES"). The Retained Liabilities shall include, without limitation, any and all liabilities and obligations relating to the Assigned Contracts that arose prior to the Closing Time. 1.3 PURCHASE CONSIDERATION. In full consideration of Seller's sale, transfer, conveyance, assignment and delivery to Buyer at the Closing of the Acquired Assets, Buyer and Brokaw shall deliver to Seller at the Closing the "PURCHASE CONSIDERATION" consisting exclusively of the following: (a) Buyer shall grant Seller certain continuing interests in the revenue and/or compensation of certain of the projects that are subject to the Assigned Contracts, all on the terms set forth on SCHEDULE 1.3(A) hereto (the "PARTICIPATION RIGHTS"); (b) Brokaw shall transfer and assign to Seller 711,250 shares of common stock of Parent ("COMMON STOCK OF PARENT") held by Brokaw, free and clear of all liens and encumbrances, other than any liens or encumbrances created by Seller or Parent. For avoidance of doubt, Brokaw shall retain all other shares of Common Stock of Parent currently held by Brokaw, or 700,000 shares (the "BROKAW SHARES"). -2- (c) Brokaw shall tender to Parent for cancellation all options to purchase shares of Common Stock of Parent (other than the option described in Section 1.4 below). (d) Brokaw shall agree, until the 18-month anniversary of the Closing Date, (i) not to sell, or make any short sale of, the Brokaw Shares or any shares issued upon exercise of the Amended Option, without the prior written consent of the Parent, and (ii) not to execute any agreement regarding (i) above; provided however that the foregoing restriction shall be binding on Brokaw only for so long as all executive officers and directors of Parent agree to be similarly bound. (E) Brokaw shall undertake that, in the event that Buyer engages in a Sale or an Initial Public Offering with five (5) years from the date of this Agreement, Brokaw shall pay or transfer to Parent (subject to any restrictions on transfer applicable to any non-cash consideration), promptly following the closing of such Sale or Initial Public Offering, an amount of consideration equal to the difference between (i) twenty percent (20%) of the proceeds Brokaw receives in such Sale or Initial Public Offering (if any) with respect to Brokaw's interest in Buyer, and (ii) the aggregate value of all consideration paid prior to such date to Seller and/or Parent pursuant to this Section 1.3. 1.4 STOCK OPTION ISSUANCE. At the Closing, Parent shall issue and deliver to Brokaw an option to purchase 500,000 shares of Parent at an exercise price of $.50 per share, and with an exercise period terminating on the fifth anniversary of the Closing. 1.5 ALLOCATION OF PURCHASE CONSIDERATION. The Purchase Consideration plus, to the extent applicable, any Assumed Liabilities shall be allocated among the Acquired Assets in the manner mutually agreed by the parties, such agreement to be concluded within 90 days of the date of this Agreement. Each Party hereto shall file all tax returns in a manner consistent with such allocation. The Parties agree that the transactions contemplated by this Agreement constitute a sale, rather than a license, of the Acquired Assets for United States federal income tax purposes, and to file all tax returns in a manner consistent with such treatment. The payment by Buyer to Seller of the Purchase Consideration shall be free and clear of any deduction or withholding for or on account of any taxes, charges, or remittance fees. Buyer and Seller agree to cooperate to provide such withholding or other certificates as are necessary to provide for the foregoing. 1.6 THE CLOSING. (a) The closing of the transactions contemplated by this Agreement (the "CLOSING") shall take place at the offices of Alschuler Grossman Stein & Kahan, 1620 26th Street, North Tower, Santa Monica, California 90404, at 12:00 p.m. local time on September 2, 2005, or, if all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby have not been satisfied or waived by such date, on such mutually agreeable later date as soon as practicable after the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (the "CLOSING DATE"). The time of day on the Closing Date that the Closing occurs is hereinafter called the "CLOSING TIME." -3- (b) At the Closing: (i) Seller shall deliver to Buyer the various certificates, instruments and documents referred to in Section 5.1; (ii) Buyer shall deliver to Seller the various certificates, instruments and documents referred to in Section 5.2; (iii) Seller shall deliver to Buyer a certificate of the secretary of Seller, dated as of the date hereof, certifying as to (i) the Certificate of Incorporation of Seller as in effect as of the date hereof, (ii) the Bylaws of Seller as in effect as of the date hereof, (iii) resolutions approved by the board of directors of Seller and the board of directors of Parent authorizing this Agreement, the Ancillary Documents, and the transactions contemplated hereby and thereby, and (iv) resolutions approved by the required vote of Seller's stockholders and Parent's shareholders authorizing this Agreement, the Ancillary Documents, and the transactions contemplated hereby and thereby; (iv) Seller shall execute and deliver to Buyer: (A) the bill of sale in the form attached hereto as EXHIBIT A (the "BILL OF SALE"), (B) the Assignment and Assumption Agreement in the form attached hereto as EXHIBIT B (the "ASSIGNMENT AGREEMENT"), and (C) such other instruments of conveyance and supporting documents as Buyer may reasonably request in order to effect the sale, transfer, conveyance and assignment to Buyer of valid ownership of the Acquired Assets (the "ADDITIONAL CONVEYANCE Agreements") even if after the Closing; (v) Buyer and Brokaw shall deliver to Seller the Purchase Consideration; (vi) Buyer and Brokaw shall deliver to Seller the Voting Agreement in the form attached hereto as EXHIBIT C (the "VOTING AGREEMENT"), duly executed by Brokaw; (vii) Buyer and Brokaw shall deliver to Seller all books and records of Seller in Buyer and Brokaw's possession that are not directly related to the Acquired Assets; (viii) Seller shall deliver to Buyer, or otherwise put Buyer in possession and control of, all of the Acquired Assets of a tangible nature; and (ix) Parent and Seller shall deliver to Buyer and Brokaw the Voting Agreement duly executed by Parent; (x) Seller shall pay to Buyer any amount due pursuant to Section 1.1(a)(v) hereof. The Bill of Sale, Assignment Agreement, Voting Agreement, and the Additional Conveyance Agreements are hereinafter referred to collectively as the "ANCILLARY DOCUMENTS". -4- 1.7 FURTHER ASSURANCES. Purchaser and Brokaw will deliver to a representative designated by the Company, at the Closing or as soon as practicable thereafter, copies of all material corporate books and records in Purchaser's or Brokaw's possession, including copies of all material agreements to which the Company is a party, provided that Purchaser and Brokaw may keep copies of such books and records for their files. At any time and from time to time after the Closing, at the request of any Party and without further consideration, each Party shall execute and deliver such other instruments of sale, transfer, conveyance and assignment or assumption and take such action as another Party may reasonably determine is necessary to transfer, convey and assign to Buyer, and to confirm Buyer's rights to, title in and ownership of, the Acquired Assets, to place Buyer in actual possession and operating control thereof, to confirm Buyer's assumption of the Assumed Liabilities and/or to confirm Seller' retention of the Retained Liabilities (as the case may be) and to carry out the purposes and intent of this Agreement. Without limiting the foregoing, (i) at all times from and after the Closing, in event that Seller receives any payments or other consideration pursuant to any Assigned Agreement, Seller shall promptly transfer such payments or other consideration over to the Buyer, and (ii) Buyer and Seller shall execute and deliver such agreements and instruments as any of the parties to the Assigned Contracts may reasonably require to evidence the assignment and assumption of the Assigned Contracts and the rights and obligations of Seller thereunder. ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER Seller and Parent jointly and severally represent and warrant to Buyer that the statements contained in this Article II are true, correct and complete as of the date of this Agreement, except to the extent that of any exceptions to the following that would reasonably be expected to be known to Buyer or Brokaw: 2.1 ORGANIZATION; CAPITALIZATION. Each of Seller and Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own its properties and to carry on its business as now being conducted and as proposed to be conducted, and is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify, individually or in the aggregate, would have a material adverse effect on the condition (financial or otherwise), results of operations, business, properties, assets or prospects of Seller (a "MATERIAL ADVERSE EFFECT"). Seller is a wholly owned subsidiary of Parent, and no Person other than Parent has any equity interest, or any other interest of any kind convertible into an equity interest, in Seller. 2.2 AUTHORIZATION. The execution and delivery by Seller and Parent of this Agreement and the Ancillary Documents, and the consummation by Seller and Parent of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of Seller and Parent. This Agreement and the Ancillary Documents, when executed and delivered by Seller and Parent, constitute, or will constitute, the valid and legally binding obligations of Seller and Parent, enforceable against Seller and Parent in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, moratorium and other laws generally affecting the enforcement of creditors rights, or by principles of equity (regardless of whether considered in a proceeding in equity or at law). -5- 2.3 NONCONTRAVENTION. The execution and delivery by Seller and Parent of this Agreement and the Ancillary Documents and the consummation by Seller and Parent of the transactions contemplated hereby and thereby will not, with or without the giving of notice or the passage of time or both: (a) violate the provisions of any law, rule or regulation applicable to Seller or Parent; (b) violate the provisions of Seller's or Parent's Certificate of Incorporation, Bylaws, or other organizational documents; (c) violate any judgment, decree, order or award of any court, Governmental Body or arbitrator applicable to Seller or Parent or any of the Acquired Assets; or (d) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or require any consent under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon any of the Acquired Assets, pursuant to any indenture, mortgage or deed of trust or other agreement or instrument to which Seller or Parent is a party or by which Seller or Parent or any of their respective assets is bound. 2.4 INTELLECTUAL PROPERTY. (a) Seller and Parent own or have the right to use all Intellectual Property used in the operation of its business or necessary for the operation of their business as presently conducted. Each item of Intellectual Property owned by or used by Seller in the operation of its business that is acquired by Buyer pursuant to this Agreement and the Ancillary Documents will be owned or available for use by Buyer on substantially identical terms and conditions immediately following the Closing. (b) There are no legal or governmental proceedings (other than current Trademark applications) pending which relate to the Intellectual Property of Seller, and Seller is not aware of any information indicating that such proceedings are contemplated or threatened by any Governmental Body or other person. 2.5 OWNERSHIP OF ASSETS. Seller is the true and lawful owner of, and has good and marketable title to, or leasehold interest in, all of the Acquired Assets, free and clear of all Liens. Buyer is hereby acquiring, and immediately following the Closing Buyer will own and lawfully possess, good and marketable title to all of the Acquired Assets, free and clear of all Liens. No Person other than Seller owns, controls, or has any interest in, any of the Acquired Assets other than, with respect to the Assigned Contracts, Persons (other than Seller) that are parties thereto. 2.6 COMPLIANCE WITH CONTRACTS. (a) Each Assigned Contract is a valid and binding agreement of Seller, and Seller does not have any knowledge that any Contract is not a valid and binding agreement of the other parties thereto; (b) Seller has fulfilled all its material obligations required pursuant to each Assigned Contract prior to the Closing Time, and Seller has no reason to believe that, but for the execution of this Agreement and the consummation of the transactions contemplated herein, the obligations of Seller under each Assigned Contract which remain to be performed after the Closing Time could not be performed in accordance with their terms; -6- (c) Seller is not in material breach of or default under any Assigned Contract, and no event has occurred that would, with the passage of time or the giving of notice or both, constitute such a default, result in a loss of rights or result in the creation of any lien, charge or encumbrance, thereunder or pursuant thereto; (d) The continuation, validity and effectiveness of each Assigned Contract will not be affected by the transfer thereof to Buyer under this Agreement, and all the Assigned Contracts are assignable to Buyer without the consent of any third party; other than the Assigned Contract Consents described in Section 4.2 below. 2.7 BROKERS' FEES. There is no investment banker, broker, finder or other intermediary who has been retained or is authorized to act for Seller or Parent who is entitled to a fee or commission from Seller or Buyer upon consummation of the transactions contemplated hereby. 2.8 DISCLOSURE. No representation or warranty by Seller or Seller contained in this Agreement, and no statement contained in the Disclosure Schedule or any other document, certificate or other instrument delivered to or to be delivered by or on behalf of Seller or Parent pursuant to this Agreement or the Ancillary Documents, contains or upon delivery will contain any untrue statement of a material fact or omits or upon delivery will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading. ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and warrants to Seller and Parent that the statements contained in this Article III are true, correct and complete as of the date of this Agreement. 3.1 ORGANIZATION. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to execute and deliver this Agreement and the Ancillary Documents, and to consummate the transactions contemplated hereby and thereby. 3.2 AUTHORIZATION. The execution and delivery by Buyer of this Agreement and the Ancillary Documents, and the consummation by Buyer of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement and the Ancillary Documents, when executed and delivered by Buyer, constitute, or will constitute, the valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, moratorium and other laws generally affecting the enforcement of creditors rights, or by principles of equity. -7- 3.3 NONCONTRAVENTION. The execution and delivery by Buyer of this Agreement and the Ancillary Documents and the consummation by Buyer of the transactions contemplated hereby and thereby will not, with or without the giving of notice or the passage of time or both: (a) violate the provisions of any law, rule or regulation applicable to Buyer; (b) violate the provisions of the charter or by-laws of Buyer; (c) violate any judgment, decree, order or award of any court, Governmental Body or arbitrator applicable to Buyer; or (d) result in the breach of, or constitute a default under, any indenture, mortgage or deed of trust or other agreement or instrument to which Buyer is a party that would materially adversely affect Buyer's ability to perform its obligations hereunder. 3.4 BROKERS' FEES. There is no investment banker, broker, finder or other intermediary who has been retained or is authorized to act for Buyer who is entitled to a fee or commission from Seller or Buyer upon consummation of the transactions contemplated hereby. 3.5 DISCLOSURE. No representation or warranty by Buyer contained in this Agreement, and no statement contained in the Disclosure Schedule or any other document, certificate or other instrument delivered to or to be delivered by or on behalf of Buyer pursuant to this Agreement or the Ancillary Documents, contains or upon delivery will contain any untrue statement of a material fact or omits or upon delivery will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading. ARTICLE IV COVENANTS 4.1 BEST EFFORTS. Each of the Parties shall use its best efforts to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement and the Ancillary Documents. 4.2 NOTICES AND CONSENTS. Each Party shall obtain, at its expense, all such waivers, releases, permits, consents, approvals or other authorizations from third parties and Governmental Bodies as are necessary to consummate the transactions contemplated by this Agreement and the Ancillary Documents, including, without limitation, in the case of Seller, the written consent to the assignment of each Assigned Contract listed in Schedule 4.2 hereto from each of the parties thereto to the extent required by the terms of the Assigned Contract (the "ASSIGNED CONTRACT CONSENTS"). 4.3 FINANCIAL STATEMENTS; AUDIT. Buyer will keep and maintain accurate books and records adequate for Seller to ascertain the amounts payable to Seller pursuant to Section 1.3(a) hereof for a period of two (2) years from the end of each quarter when such amounts are payable. In connection therewith, promptly after the end of each calendar quarter after the Closing Date through June 30, 2008, and promptly after the end of the six-month periods ending December 31, 2008, June 30, 2009, December 31, 2009, and June 30, 2010, Buyer will deliver to Seller a report setting forth sufficient detail to accurately ascertain the amounts payable to Seller pursuant to Section 1.3(a) hereof for the applicable quarter or six-month period. Such bi-annual reports will continue to be delivered after June 30, 2010 to the extent that material payments continue to -8- be due under this Agreement subsequent to such date. Buyer will furnish Seller with such report whether or not any amounts are payable by Buyer to Seller for such quarter or six-month period. Seller will have the right to audit the books and records of Buyer relating to such payments for the sole purpose of verifying such amounts, not more than once per calendar year upon providing at least sixty (60) days prior written notice to Buyer. All such audits will be conducted during reasonable business hours of Buyer, and in a manner that does not unreasonably interfere with Buyer's normal business activities, by an independent certified public accountant or equivalent (the "AUDITOR"). Except for a statement of the payments due pursuant to this Agreement, the Auditor will not disclose any information learned during the audit to Seller. Any such audit will be conducted at Seller's expense unless such audit reveals a deficiency of 10% or more in payments due to Seller, in which case Buyer shall reimburse Seller for the reasonable cost of such audit. 4.4 APPOINTMENT OF NEW DIRECTORS. As it is envisioned that Brokaw and Sheri Halfon will resign as directors and officer of the Seller as of the Closing, promptly after the Closing Date, the Company shall take all reasonable steps necessary to cause at least two (2) individuals to be appointed to the Company's board of directors. ARTICLE V CONDITIONS TO CLOSING 5.1 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of Buyer to consummate the transactions contemplated hereby is subject to the satisfaction or waiver of the following additional conditions: (a) Other than approval by applicable Governmental Bodies of the assignment of Trademarks and Copyrights (which may be obtained after, but must be filed for at or prior to, the Closing), Seller shall have obtained all of the waivers, releases, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2, including without limitation, having obtained the Assigned Contract Consents. (b) No action, suit or proceeding shall be pending or, to the knowledge of Seller or Parent, threatened wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement or the Ancillary Documents, (ii) cause any of the transactions contemplated by this Agreement or the Ancillary Documents to be rescinded following consummation, or (iii) affect materially and adversely, in Buyer's sole reasonable judgment, the right of Buyer to own, operate or control any of the Acquired Assets following the Closing, and no such judgment, order, decree, stipulation or injunction shall be in effect. (c) The representations and warranties of Seller set forth in Article II shall be true, correct and complete when made on the date hereof and shall be true, correct and complete as of the Closing Time as if made as of the Closing Time (except for representations and warranties made as of a specific date, which shall be true, correct and complete as of such date). -9- (d) Each of Seller and Parent shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement and the Ancillary Documents as of or prior to the Closing Time. (e) All corporate and other proceedings required to be taken on the part of Seller and Parent to authorize or carry out this Agreement and to convey, assign, transfer and deliver the Acquired Assets shall have been taken. (f) Seller and Parent shall have executed and delivered this Agreement and the Ancillary Documents. (g) All actions to be taken by Seller or Parent in connection with the consummation of the transactions contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to Buyer. 5.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of Seller to consummate the transactions contemplated hereby is subject to the satisfaction or waiver of the following additional conditions: (a) The representations and warranties of Buyer set forth in Article III shall be true, correct and complete in all respects when made on the date hereof and shall be true, correct and complete as of the Closing Time as if made as of the Closing Time (except for representations and warranties made as of a specific date, which shall be true and correct as of such date). (b) Buyer shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement and the Ancillary Documents as of the Closing Time. (c) No action, suit, or proceeding shall be pending, or to the knowledge of Buyer, threatened, wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement or the Ancillary Documents, or (ii) cause any of the transactions contemplated by this Agreement or the Ancillary Documents to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect. (d) All actions to be taken by Buyer in connection with the consummation of the transactions contemplated hereby and all certificates, instruments and other documents required to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to Seller. -10- ARTICLE VI POST-CLOSING COVENANTS 6.1 USE OF NAME. As soon as practicable following the Closing, Seller and Parent will take all actions necessary to change their respective corporate names and to cease, and cause any affiliated entities to cease, using the names "Avenue Entertainment Group," "Avenue Pictures," and any other name, Trademark, brand, or logo similar thereto, after the Closing. 6.2 TRANSFER AND SALES TAX. Buyer and Seller agree to use reasonable efforts to minimize all sales, use and transfer taxes and other similar taxes and fees (including penalties and interest) ("TRANSFER TAXES"), if any, arising out of or in connection with or attributable to the consummation of the transactions contemplated by this Agreement. Seller shall be responsible under this Agreement for the timely payment of any such Transfer Tax. Buyer and Seller shall cooperate in all reasonable respects in the preparation and timely filing of all tax returns and other documentation required to be filed in respect of any Transfer Tax. 6.3 SHARING OF DATA. Promptly upon request by Buyer made at any time following the Closing Date, Seller shall authorize the release to Buyer of all files pertaining to the Acquired Assets held by any Governmental Body or other third party. 6.4 INDEMNIFICATION OF BROKAW. Seller and Parent shall indemnify Brokaw if Brokaw is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding or any alternative dispute resolution mechanism, whether civil, criminal, administrative or investigative by reason of the fact that Brokaw is or was a director, officer, employee or agent of Seller or Parent, or any subsidiary of Seller or Parent, or by reason of the fact that Brokaw is or was serving at the request of Seller or Parent as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by Seller or Parent, which approval shall not be unreasonably withheld) actually and reasonably incurred by Brokaw in connection with such action, suit or proceeding if Brokaw acted in good faith and in a manner Brokaw reasonably believed to be in or not opposed to the best interests of Seller or Parent, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Brokaw's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Brokaw did not act in good faith and in a manner which Brokaw reasonably believed to be in or not opposed to the best interests of Seller or Parent, and, with respect to any criminal action or proceeding, had reasonable cause to believe that Brokaw's conduct was unlawful. Seller and Parent shall advance all expenses incurred by Brokaw in connection with the investigation, defense, settlement or appeal of any civil or criminal action, suit or proceeding referenced in this Section 6.4. Brokaw hereby undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that Brokaw is not entitled to be indemnified by Seller and Parent as authorized hereby. The advances to be made hereunder shall be paid by Seller and Parent to Brokaw within thirty (30) days following delivery of a written request therefor by Brokaw to Seller and Parent. -11- 6.5 REPORTS. Parent and Seller shall make and file all required reports, notices and other instruments required in connection with the transactions contemplated hereby with any Governmental Body or regulatory or trade association, including without limitation filing a Current Report on Form 8-K with the U.S. Securities and Exchange Commission. Parent and Seller shall provide Buyer with an opportunity to review and comment on each such report or notice. ARTICLE VII INDEMNIFICATION 7.1 INDEMNIFICATION BY SELLER. Seller and Parent shall indemnify and hold harmless Buyer and its officers, directors, agents and affiliates from and against any and all claims, debts, obligations and other liabilities, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation) ("DAMAGES") as incurred or suffered resulting from, relating to or constituting: (a) any inaccuracy in, or breach of, any material representation or warranty or failure to perform any covenant or agreement of Seller contained in this Agreement or any of the Ancillary Documents; (b) any Retained Liabilities; and (c) any liability or obligation to pay severance benefits to any employee of Seller or Parent whose employment is terminated in connection with the consummation of the transactions contemplated by this Agreement, and all liabilities resulting from the termination of employment of employees of Seller or Parent prior to the Closing Time that arose under any federal, state or foreign law or under any employee benefit plan or policies established or maintained by Seller. 7.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify and hold harmless Seller and its officers, directors, agents and affiliates from and against any and all Damages as incurred or suffered resulting from, relating to or constituting any inaccuracy in, or breach of, any material representation or warranty or failure to perform any covenant or agreement of Buyer contained in this Agreement or any of the Ancillary Documents. 7.3 SURVIVAL OF REPRESENTATIONS; CLAIMS FOR INDEMNIFICATION. All representations and warranties made by the Parties herein or in any instrument or document furnished in connection herewith shall survive the Closing and continue until the second anniversary of the Closing Date. -12- ARTICLE VIII DEFINITIONS As used in this Agreement, the following terms shall have the following respective meanings: 8.1 "ACQUIRED ASSETS" has the meaning set forth in Section 1.1(a). 8.2 "ADDITIONAL CONVEYANCE AGREEMENTS" has the meaning set forth in Section 1.6(b). 8.3 "ANCILLARY DOCUMENTS" has the meaning set forth in Section 1.6(b). 8.4 "PARENT" has the meaning set forth in the Introduction. 8.5 "ASSIGNED CONTRACTS" has the meaning set forth in Section 1.1(a)(i). 8.6 "ASSIGNED CONTRACT CONSENTS" has the meaning set forth in Section 4.2. 8.7 "ASSIGNMENT AGREEMENTS" has the meaning set forth in Section 1.6(b). 8.8 "ASSUMED LIABILITIES" has the meaning set forth in Section 1.2. 8.9 "BILLS OF SALE" has the meaning set forth in Section 1.6(b). 8.10 "BUYER" has the meaning set forth in the Introduction. 8.11 "CLOSING" has the meaning set forth in Section 1.6(a). 8.12 "CLOSING DATE" has the meaning set forth in Section 1.6(a). 8.13 "CLOSING TIME" has the meaning set forth in Section 1.6(a). 8.14 "DAMAGES" has the meaning set forth in Section 7.1. 8.15 "GOVERNMENTAL BODY" means and includes any: (a) nation, state, county, city, town, village, district, or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental agency, commission, branch, department, official, or entity and any court or other tribunal); (d) multi-national organization or body; or (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature. 8.16 "INITIAL PUBLIC OFFERING" shall mean an initial public offering of shares of Buyer or any successor entity pursuant to an effective registration statement under the Securities Act of 1933, as amended. -13- 8.17 "INTELLECTUAL PROPERTY" means any and all of the following and all statutory and/or common law rights throughout the world in, arising out of or associated therewith: (A) all works of authorship, copyrights (registered or otherwise), copyrightable works, and all applications, registrations and renewals in connection therewith, and all other rights corresponding thereto throughout the world (individually a "COPYRIGHT" and collectively the "COPYRIGHTS"); (B) all inventions (whether or not patentable, reduced to practice or made the subject of a pending patent application); (C) all trademarks, service marks, trade dress, logos, trade names, domain names and corporate names (whether or not registered) together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, and all rights therein provided by international treaties or conventions (individually a "TRADEMARK" and collectively the "TRADEMARKS"); (D) all United States and foreign patents, patent applications (including all provisional applications), patent disclosures, together with all reissuances, divisions, continuations, continuations-in-part, revisions, extensions and reexaminations thereof (individually a "PATENT" and collectively the "PATENTS"); (E) all computer software and firmware, including data, databases and related documentation in both tangible and intangible form, and any and all code, including assemblers, applets, compilers, source code, object code, data (including sound and image data), HTML code, operating systems and specifications, design tools and user interfaces, in any form or format; (F) all trade secrets and confidential business information, know-how, formulas, ideas, concepts, technology and technical data, research and development information, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information; (G) all licenses, agreements and other rights in any third party intellectual property and other proprietary rights, including moral and economic rights of authors and inventors (however denominated) and industrial rights, relating to any of the foregoing, in each case (to the extent assignable), including remedies against infringements thereof and rights of protection of interest therein under the laws of all jurisdictions; and (H) all causes of action, rights and remedies relating to the Intellectual Property.. 8.18 "LIEN" means any mortgage, hypothecation, pledge, lien, security interest, claim, encumbrance, easement, right-of-way, building or use restriction, exception, variance, reservation, charge, restriction or limitation of any kind or nature. 8.19 "MATERIAL ADVERSE EFFECT" has the meaning set forth in Section 2.1. 8.20 "PARTIES" has the meaning set forth in the Introduction. 8.21 "PERSON" includes any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, trust or other entity or organization, whether or not a legal entity and whether foreign or domestic, or any Governmental Body. 8.22 "PURCHASE CONSIDERATION" has the meaning set forth in Section 1.3. 8.23 "RETAINED LIABILITIES" has the meaning set forth in Section 1.2. -14- 8.24 "SALE" means any sale of all or substantially all assets of Buyer, or any merger, consolidation or similar transaction as a result of which the members of Buyer hold less than 50% of the voting interests of the surviving entity. 8.25 "SELLER" has the meaning set forth in the Introduction. 8.26 "TAXES" means all taxes, charges, fees and similar assessments of any nature (including those relating to income, receipts, excise, real property, personal property, sales, use, transfer, estate or inheritance, withholding, employment, payroll and franchises) imposed by any federal, state, local or foreign taxing authority or Governmental Body. 8.27 "TRADEMARKS" has the meaning set forth in Section 8.17. 8.28 "TRANSFER TAXES" has the meaning set forth in Section 6.2. ARTICLE IX MISCELLANEOUS 9.1 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns. 9.2 ENTIRE AGREEMENT. This Agreement (including the documents referred to herein) constitutes the entire agreement between the Parties and, except as specifically set forth herein, supersedes any prior understandings, agreements, or representations between the Parties, written or oral, that may have related in any way to the subject matter hereof. 9.3 SUCCESSION AND ASSIGNMENT. This Agreement may not be transferred, assigned, pledged or hypothecated by any Party hereto, other than with the consent of all other Parties hereto. Subject to the limitations set forth in the immediately preceding sentence, this Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. 9.4 COUNTERPARTS. This Agreement may be executed in any number of counterparts, and by facsimile, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 9.5 HEADINGS. The Section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 9.6 NOTICES. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly delivered (a) one day after it is sent via a reputable nationwide overnight courier service, (b) on the date of delivery if delivered by personal delivery, (c) on the date the return receipt is signed if sent by registered or certified mail or, (d) in the case of a facsimile or electronic transmission, upon confirmation of completed transmission, in each case to the intended recipient as set forth below: -15- If to Seller or Parent: Avenue Pictures, Inc. ---------------------- Attn: Gene Feldman c/o Gene Feldman Productions, LLC 10 West 55th Street, Apt. 26B New York, NY 10023 Facsimile: If to Buyer or Brokaw: Cary Brokaw Productions, Inc. --------------------- Attn.: Mr. Cary Brokaw 10202 W. Washington Blvd. David Lean Bldg., Rm. 119 Culver City, CA 90232 Facsimile: (310) 244-6869 Any Party may give any notice, instruction or communication in connection with this Agreement using any other means (including personal delivery, telecopy or ordinary mail), but no such notice, instruction or communication shall be deemed to have been delivered unless and until it is actually received by the Party to whom it is sent. Any Party may change the address to which notices, instructions and communications are to be delivered by giving the other Parties notice thereof in the manner herein set forth in this Section 9.6. 9.7 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be governed by and construed in accordance with the internal laws (and not the law of conflicts) of the State of California. Legal proceedings relating to this Agreement, the Ancillary Documents or the transactions contemplated hereby or thereby may be commenced only in the state or federal courts in the State of California. The Parties each consent to the exclusive jurisdiction of such courts in any such action or proceeding and waive any objection to venue laid therein. 9.8 AMENDMENTS AND WAIVERS. The Parties may mutually amend any provision of this Agreement at any time prior to the Closing Time. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the Parties. No waiver by either Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. 9.9 SEVERABILITY. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or -16- provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed. 9.10 EXPENSES. Each Party shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. 9.11 CONSTRUCTION. The language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent, and no rule of strict construction shall be applied against either Party. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Except if otherwise provided, the word "including," as used herein means including without limitation. 9.12 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. -17- IN WITNESS WHEREOF, the Parties hereto have executed this Asset Purchase Agreement as of the date first above written. BUYER: SELLER: CARY BROKAW PRODUCTIONS, INC. AVENUE PICTURES, INC. a Delaware corporation a Delaware corporation By: /S/ CARY BROKAW By: /S/ GENE FELDMAN ------------------------------- -------------------------------- CARY BROKAW, ITS PRESIDENT GENE FELDMAN, ITS PRESIDENT AND CHIEF EXECUTIVE OFFICER BROKAW: PARENT: AVENUE ENTERTAINMENT GROUP, INC. a Delaware corporation By: /S/ CARY BROKAW By: /S/ GENE FELDMAN ------------------------------- -------------------------------- CARY BROKAW GENE FELDMAN, ITS CHAIRMAN OF THE BOARD -18- EX-10.1 3 avenue_8kex10-1.txt VOTING AGREEMENT DATED AS OF SEPTEMBER 2, 2005 EXHIBIT 10.1 VOTING AGREEMENT THIS VOTING AGREEMENT (this "AGREEMENT"), is made and entered into as of September 2, 2005, by and between Cary Brokaw ("BROKAW") and Avenue Entertainment Group, Inc. a Delaware corporation (the "COMPANY") with reference to the following facts: A. Brokaw is a stockholder and optionholder of the Company. B. Pursuant to that certain Asset Purchase Agreement dated as of even date herewith by and among Cary Brokaw Productions, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("CPI") Brokaw, Avenue Pictures, Inc., a Delaware corporation ("API"), and the Company, among other things, (1) API transferred certain of its assets, and assigned certain of its liabilities, to CPI, (2) CPI granted API a right to certain of its revenues to which it may be entitled to receive in the future, (3) Brokaw transferred 711,250 shares of the Company's common stock ("COMPANY COMMON STOCK") to API, (4) Brokaw delivered to the Company for cancellation all options held by him to purchase shares of Company Common Stock, and (5) the Company agreed to issue Brokaw a new option to purchase 500,000 shares of Company Common Stock. C. The parties desire to enter into this Agreement to memorialize their agreements regarding the voting of shares of Company Common Stock held by Brokaw as further described herein. NOW, THEREFORE, in consideration of the foregoing recitals and the agreements and covenants contained herein and other valuable consideration, the parties hereto agree as follows: 1. DEFINITIONS. ------------ 1.1 "BOARD OF DIRECTORS" means the Company's board of directors. 1.2 "COMPANY COMMON STOCK" has the meaning ascribed to it in the recitals. 1.3 "PERSON" includes any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, trust or other entity or organization, whether or not a legal entity and whether foreign or domestic, or any governmental body. 1.4 "SHARES" shall mean 700,000 shares of Company Common Stock retained by Brokaw following completion of the transactions contemplated by the Asset Purchase Agreement. 1.5 "VOTE" means, with respect to any Shares, to (i) vote, or to cause to be voted, all such Shares at all annual and special meetings of the Company's stockholders, however called, or any postponements or continuations thereof and (ii) execute, or cause to be executed, with respect to all such Shares, all written consents of the Company's stockholders in lieu of any annual or special meeting of the Company's stockholders. 2. AGREEMENT TO VOTE. ------------------ 2.1 VOTING AGREEMENT. Until the termination of this Agreement in accordance with its terms, Brokaw hereby irrevocably and unconditionally agrees to Vote the Shares in accordance with the recommendation of the Board of Directors (or any committee thereof formed for the purpose of giving such direction to the Stockholders) with respect to each matter for which the Board of Directors makes any recommendation to the Company's stockholders as to how to Vote their shares. 2.2 GRANTING OF PROXY. In the event that Brokaw shall fail to vote the Shares as required pursuant to Section 2.1 above with respect to any matter for which the Board of Directors makes any recommendation to the Company's stockholders as to how to Vote their shares, Brokaw shall be deemed immediately upon the existence of such a breach to have granted to the Chairman of the Board of Directors of the Company a proxy to Vote the Shares as required pursuant to Section 2.1 above. Brokaw acknowledges that the proxy granted hereby, including any successive proxy if need be, is given to secure the performance of a duty, is coupled with an interest, and shall be irrevocable until the duty is performed. 3. TERMINATION AND AMENDMENT OF AGREEMENT. --------------------------------------- 3.1 TERMINATION. (a) This Agreement shall terminate upon the first to occur of the following: (i) September 2, 2007, and (ii) the written agreement of the Company and Brokaw. (b) The application of this Agreement shall terminate as to any Shares sold or transferred by Brokaw to any Person who is not an Affiliate of Brokaw, within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended. 3.2 AMENDMENT AND MODIFICATION. This Agreement may be amended or modified only with the written consent of the Company and Brokaw, expressly setting forth the amendments or modifications. 4. MISCELLANEOUS. -------------- 4.1 ENTIRE AGREEMENT. This Agreement, including the exhibits hereto and the agreements expressly referred to herein, constitutes the entire understanding between the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. There are no warranties, representations or other agreements between the parties, in connection with the subject matter hereof, except as specifically set forth herein. No supplement, modification, waiver or termination of this Agreement shall be binding unless made in writing and in compliance with the provisions of Sections 3.2 or 4.2. -2- 4.2 WAIVERS. No term, condition or provision of this Agreement may be waived except by an express written instrument to such effect signed by the party to whom the benefit of such term, condition or provision runs. No such waiver of any term, condition or provision of this Agreement shall be deemed a waiver of any other term, condition or provision, irrespective of similarity, or shall constitute a continuing waiver of the same term, condition or provision, unless otherwise expressly provided. No failure or delay on the part of any party in exercising any right, power or privilege under any term, condition or provision of this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any other right, power or privilege. 4.3 SEVERABILITY. In the event any one or more of the terms, conditions or provisions contained in this Agreement should be found in a final award or judgment rendered by any court or arbitrator or panel of arbitrators of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining terms, conditions and provisions contained herein shall not in any way be affected or impaired thereby, and this Agreement shall be interpreted and construed as if such term, condition or provision, to the extent the same shall have been held invalid, illegal, or unenforceable, had never been contained herein, provided that such interpretation and construction is consistent with the intent of the parties as expressed in this Agreement. 4.4 APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to the choice of law principles thereof. 4.5 EXECUTION AND COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute only one instrument. Any one of such counterparts shall be sufficient for the purpose of proving the existence and terms of this Agreement, and no party shall be required to produce an original or all of such counterparts in making such proof. 4.6 COVENANT OF FURTHER ASSURANCES. All parties to this Agreement shall, upon request, perform any and all acts and execute and deliver any and all certificates, instruments and other documents that may be necessary or appropriate to carry out any of the terms, conditions and provisions hereof or to carry out the intent of this Agreement. 4.7 NO THIRD PARTY BENEFIT. Nothing contained in this Agreement shall be deemed to confer any right or benefit on any Person who is not a party to this Agreement. 4.8 CONSTRUCTION; REPRESENTATION BY COUNSEL. The parties hereto represent that they have been represented and advised by counsel in connection with the negotiation and preparation of this Agreement, and this Agreement shall be deemed to have been drafted jointly by the parties, notwithstanding that one party or the other may have performed the actual drafting hereof. This Agreement shall be construed and interpreted in accordance with the plain meaning of its language, and not for or against either party, and as a whole, giving effect to all of the terms, conditions and provisions hereof. -3- 4.9 NOTICES. All notices and communications to be given or otherwise made to any party hereto shall be deemed to be sufficient if contained in a written instrument delivered in person or by facsimile or duly sent by first class registered or certified mail, return receipt requested, postage prepaid, or by overnight courier, or addressed to such party at the following address or facsimile number: If to Brokaw: Cary Brokaw 10202 W. Washington Blvd. David Lean Bldg., Rm. 119 Culver City, CA 90232 Facsimile: (310) 244-6869 If to the Company: Avenue Entertainment Group, Inc. c/o Gene Feldman Productions, LLC 10 West 55th Street, Apt. 26B New York, NY 10023 Facsimile: (914) 249-9745 or to such other address or facsimile number as the party to whom notice is to be given may have furnished to the other party hereto in writing in accordance herewith. Any such notice or communication shall be deemed to have been delivered and received: (a) in the case of personal delivery or delivery by facsimile, on the date of such delivery, (b) in the case of nationally-recognized overnight courier, on the next business day after the date when sent and (c) in the case of mailing, on the third business day following that on which the piece of mail containing such communications is posted. As used in this Section, "BUSINESS DAY" shall mean any day other than a day on which banking institutions in the State of California are legally closed for business. [rest of page intentionally left blank] -4- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date, month and year first above written. /S/ CARY BROKAW ---------------------------------- CARY BROKAW, an individual AVENUE ENTERTAINMENT GROUP, INC., a Delaware corporation By: /S/ GENE FELDMAN ------------------------------ Name: GENE FELDMAN ---------------------------- Title: CHAIRMAN OF THE BOARD --------------------------- -5- EX-10.2 4 avenue_8kex10-2.txt STOCK OPTION AGREEMENT DATED SEPTEMBER 2, 2005 EXHIBIT 10.2 AVENUE ENTERTAINMENT GROUP, INC. STOCK OPTION AGREEMENT I. NOTICE OF STOCK OPTION GRANT ---------------------------- Cary Brokaw 10202 W. Washington Boulevard, David Lean Building, Room 119 Culver City, CA 90232 You have been granted a Nonstatutory Stock Option to purchase Common Stock of the Company, subject to the terms and conditions of this Agreement, as follows: Date of Grant: September 2, 2005 Vesting Terms: Fully vested as of Date of Grant Exercise Price per Share: $0.50 Total Number of Shares Granted: 500,000 Total Exercise Price $250,000.00 Term/Expiration Date: 5-Year Anniversary of Date of Grant (September 2, 2010). II. AGREEMENT --------- 1. DEFINITIONS. As used herein, the following definitions shall apply: (a) "AGREEMENT" means this stock option agreement between the Company and Optionee evidencing the terms and conditions of this Option. (b) "APPLICABLE LAWS" means the requirements relating to the administration of stock options under U. S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction that may apply to this Option. (c) "BOARD" means the Board of Directors of the Company or any committee of the Board which has been designated by the Board to administer this Agreement. (d) "CODE" means the U.S. Internal Revenue Code of 1986, as amended. (e) "COMMON STOCK" means the common stock of the Company. (f) "COMPANY" means Avenue Entertainment, Inc., a Delaware corporation. (g) "FAIR MARKET VALUE" means, as of any date, the value of Common Stock determined, its Fair Market Value shall be (i) the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market for the last market trading day prior to the time of determination, as reported in THE WALL STREET JOURNAL, (ii) the average of the closing bid and ask prices quoted in the over-the-counter market, or (iii) if no such quotations are available, such other source as the Board deems reliable. (h) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. (i) "NOTICE OF GRANT" means a written notice, in Part I of this Agreement, evidencing certain the terms and conditions of this Option grant. The Notice of Grant is part of the Option Agreement. (j) "OPTION" means this stock option. (k) "OPTIONED STOCK" means the Common Stock subject to this Option. (l) "OPTIONEE" means the person named in the Notice of Grant or such person's successor. (m) "PARENT" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code. (n) "SHARE" means a share of the Common Stock, as adjusted in accordance with Section 10 of this Agreement. (o) "SUBSIDIARY" means a "subsidiary corporation", whether now or hereafter existing, as defined in Section 424(f) of the Code. 2. GRANT OF OPTION. The Board hereby grants to Optionee named in the Notice of Grant attached as Part I of this Agreement the Option to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the "Exercise Price"), subject to the terms and conditions of this Agreement. -2- 3. EXERCISE OF OPTION. (a) RIGHT TO EXERCISE. This Option is exercisable at any time during its term in accordance with the terms of the Notice of Grant and the applicable provisions of this Agreement. (b) METHOD OF EXERCISE. This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"), which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the "Exercised Shares"), and such other representations and agreements as may be required by the Company. The Exercise Notice shall be completed by Optionee and delivered to Secretary of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. (c) LEGAL COMPLIANCE. No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to Optionee on the date the Option is exercised with respect to such Exercised Shares. (d) BUYOUT PROVISIONS. The Board may at any time offer to buy out for a payment in cash or Shares an Option previously granted based on such terms and conditions as the Board shall establish and communicate to Optionee at the time that such offer is made. Optionee may accept or reject any such offer in Optionee's sole discretion. 4. METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of Optionee: (a) cash; or (b) check; or (c) consideration received by the Company under a cashless exercise program implemented by the Company; or (d) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an option, have been owned by Optionee for more than six (6) months on the date of surrender, AND (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares. 5. OPTIONEE'S REPRESENTATIONS. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), at the time this Option is exercised, Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B. -3- 6. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee. 7. TERM OF OPTION. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the terms of this Agreement. 8. DEATH OF OPTIONEE. If Optionee dies, the Option may be exercised by Optionee's estate or by a person who acquires the right to exercise the Option by bequest or inheritance. The Option may be exercised by the executor or administrator of Optionee's estate or, if none, by the person(s) entitled to exercise the Option under Optionee's will or the laws of descent or distribution. 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET SALE. (a) CHANGES IN CAPITALIZATION. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by this Option, as well as the price per share of Common Stock covered by this Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to this Option. (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or liquidation of the Company, to the extent that this Option has not been previously exercised, it will terminate immediately prior to the consummation of such proposed action. The Board may, in the exercise of its sole discretion in such instances, declare that this Option shall terminate as of a date fixed by the Board and give Optionee the right to exercise his or her Option as to all or any part of the Optioned Stock. (c) MERGER OR ASSET SALE. In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, this Option shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for this Option, the Board shall notify Optionee in writing or electronically at least fifteen (15) days before such merger or sale of substantially all of the assets of the Company so that Optionee shall have time to exercise his Option before the date of such merger or sale of substantially all of the assets of the Company, and the Option shall terminate -4- upon the closing of such merger or sale of substantially all of the assets of the Company. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Board may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. 11. TAX CONSEQUENCES. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice. Optionee understands that the Company may be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of any compensation income recognized at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 12. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS. (a) LEGENDS. Optionee understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH. (b) STOP-TRANSFER NOTICES. Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. -5- (c) REFUSAL TO TRANSFER. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. 13. REGISTRATION OF SHARES. Upon the written request of Optionee, the Company shall use its reasonable efforts to cause all Optioned Stock to be registered pursuant to the Securities Act, pursuant to a registration statement on Form S-8 or Form S-3 or such other registration form as may be available for such purpose. The Company shall use all reasonable efforts to cause such registration statement to become effective within 60 days after Optionee's request therefor, and shall cause such registration statement to remain effective until all Optioned Stock has been resold pursuant to such registration statement, or may be sold pursuant to Rule 144 promulgated under the Securities Act without regard to any volume restrictions. 14. ENTIRE AGREEMENT; GOVERNING LAW. This Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to Optionee's interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California. By your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of this Agreement. Optionee has reviewed this Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions relating to this Agreement. Optionee further agrees to notify the Company upon any change in the residence address indicated below. OPTIONEE: AVENUE ENTERTAINMENT GROUP, INC., a Delaware corporation /S/ CARY BROKAW By: /S/ GENE FELDMAN - ---------------------------------- --------------------------------- Cary Brokaw Gene Feldman, its President & Chief Executive Officer -6- -----END PRIVACY-ENHANCED MESSAGE-----