EXHIBIT 10.8
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT (this "Agreement") made and entered into on
September 26, 2005 by and among PowerHouse Technologies Group, Inc., a Delaware
corporation ("PTG"), The Wall Street Group, Inc., a New York corporation
("WSG"), and Wall Street Consultants, Inc., a New York corporation ("WSC" and
together with WSG the "WSG Parties"). (PTG, WSG, and WSC are referred to
individually and collectively as "Party" or the "Parties.")
WHEREAS, WSG is the Claimant and PTG is the Respondent in an
arbitration proceeding pending before the American Arbitration Association, Case
No. 13 117 Y 00213 05 (the "Arbitration"), in which PTG has asserted a
counterclaim against WSG, and the Parties hereto desire to settle and terminate
the Arbitration, including all claims and counterclaims asserted therein;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises hereinafter set forth, it is hereby agreed as follows:
1. At a closing to be held on or before September 27, 2005 at the offices
of Xxxxxx Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx:
(a) PTG shall pay to WSG the sum of $328,000 by wire transfer to a
bank account designated by WSG, or, at the option of WSG, by certified or bank
cashier's check;
(b) PTG shall grant to WSC, which is an affiliate of WSG, a
five-year option (the "Option") for the purchase of 350,000 shares of Common
Stock
of PTG, by delivering to the WSG Parties' attorneys, XxXxxxx, Deutsch, Xxxxxxxx
& Xxxxxxxxx, LLP ("MDM&C"), an option agreement in the form annexed hereto as
Exhibit 1 (the "Option Agreement") signed by a duly authorized officer of PTG
(the signed Option Agreement may be delivered by facsimile or pdf, provided that
the original is received by MDM&C by the next business day);
(c) The WSG Parties shall deliver to PTG a Release in the
form attached hereto as Exhibit 2 (the "WSG Release");
(d) PTG shall deliver to the WSG Parties a Release in the
form attached hereto as Exhibit 3 (the "PTG Release");
(e) WSG and PTG shall execute a Stipulation in the form attached
hereto as Exhibit 4 (the "Stipulation") dismissing the Arbitration with
prejudice and without costs by any Party as against another; and
(f) Until the funds referred to in paragraph 1(a) have been received
in WSG's account and the original Option Agreement has been received by MDM&C,
MDM&C shall hold the Option Agreement, the WSG Release, the PTG Release and the
Stipulation in escrow. Immediately after such funds are received in WSG's
account and the original Option Agreement is received by MDM&C, MDM&C shall (i)
deliver the Option Agreement to WSC, (ii) deliver the WSG Release to PTG, (iii)
deliver the PTG Release to WSG and (iv) deliver to PTG the Stipulation signed by
MDM&C for filing with the American Arbitration Association, and WSG and PTG
shall execute such other documents as shall be necessary to effect the dismissal
of the Arbitration.
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2. Without admitting or denying whether the Stock Option Agreement, dated
April 1, 2003, between Agate Technologies Inc. (now known as PTG) and WSC (the
"2003 Stock Option Agreement") is a valid or enforceable agreement, the Parties
agree that, upon completion of the closing referred to in paragraph 1, the 2003
Stock Option Agreement shall be terminated, cancelled and be deemed null and
void.
3. This Agreement is not intended to be and shall not be deemed to be an
admission of liability or of any fact by any of the Parties.
4. The Parties acknowledge that they are subject to the terms of a
Confidentiality Agreement, dated as of September 15, 2005 (the "Confidentiality
Agreement"), by and among the Parties.
5. In connection with the issuance of the Option, PTG represents
and warrants to the WSG Parties as follows:
(a) PTG has delivered to the WSG Parties or their attorneys a true and
complete copy of the Common Stock and Warrant Purchase Agreement, dated as of
September 21, 2005, by and between PTG and Cordillera Fund, L.P., including the
Disclosure Schedule referred to therein (the "Delivered Purchase Agreement").
The terms and provisions of Section 4 of, and the Disclosure Schedule to, the
Delivered Purchase Agreement are the same as the terms and provisions of Section
4 of, and the Disclosure Schedule to, each of the other purchase agreements in
like form simultaneously entered into by PTG with the
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Other Purchasers (as such term is defined in Section 2 of the Delivered Purchase
Agreement).
(b) PTG has delivered to the WSG Parties or their attorneys a copy
of a "Common Stock Offering" term sheet received by PTG on August 1, 2005
describing some of the proposed terms of the financing which were subsequently
modified and incorporated into the Delivered Purchase Agreement.
(c) Each of PTG's representations and warranties in Section 4 of the
Delivered Purchase Agreement, subject to the qualifications and limitations set
forth therein, are hereby deemed made by PTG to the WSG Parties as if addressed
to them, provided that this paragraph 5(c) does not apply to PTG's covenants and
obligations in Section 4 of the Delivered Purchase Agreement.
6. In connection with WSC's receipt of the Option, each of the WSG Parties
represents and warrants to PTG as follows:
(a) It is an "accredited investor" within the meaning of Rule
501(a)(8) of Regulation D under the Securities Act of 1933, as amended.
(b) It is knowledgeable, sophisticated and experienced in making
investment decisions such as that involved in acquiring the Option, and has
requested, received and reviewed all information it deems relevant in making an
informed decision to acquire the Option, including, without limitation, the
documents referred to in paragraphs 5(a) and 5(b) above and the reports and
documents filed by PTG with the U.S. Securities and Exchange Commission which
are referred to in Section 4.19 of the Delivered Purchase Agreement.
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(c) WSC is acquiring the Option for its own account for investment
and with no present intention of distributing the Option or the shares issuable
upon the exercise thereof.
7. Nothing contained in this Agreement or in the Releases provided for in
paragraphs 1(c) and 1(d) shall release any of the Parties from its obligations
under this Agreement.
8. All notices and other communications hereunder shall be in writing and
shall be deemed complete and to have been sufficiently given if mailed by
Certified or Registered Mail, Return Receipt Requested, addressed as follows:
To PTG:
PowerHouse Technologies Group, Inc.
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attention: Xx. Xxx Xxxxxx, CEO
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
To WSG and WSC:
The Wall Street Group, Inc.
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx
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With a copy to:
I. Xxxxxxx Xxxxx, Esq.
XxXxxxx, Deutsch, Xxxxxxxx & Xxxxxxxxx, LLP
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
or in any case to such other address as shall have been specified by notice from
the addressee to the sender of such notice or other communication. All such
communications shall be deemed received on the date received or refused as
established by the Return Receipt.
9. This Agreement together with the Confidentiality Agreement set forth
the full and complete understanding of the Parties with respect to the subject
matter hereof. This Agreement may not be modified or amended except by a writing
executed by the Party to be charged.
10. No failure on the part of any Party to enforce any covenant or
provision herein contained shall be deemed a waiver hereunder by such Party,
or discharge or invalidate such covenant or provision, or affect the right of
such Party to enforce the same in the event of any subsequent default.
11. This Agreement shall be construed in accordance with and governed by
the laws of the State of New York without regard to choice of law principles.
Each of the Parties consents to the jurisdiction of the courts in the State of
New York in any civil action or proceeding commenced by any Party to enforce its
rights hereunder. The prevailing Party in any such suit or proceeding shall be
entitled to recover its reasonable attorneys' fees and expenses.
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12. This Agreement may be signed in counterparts, each of which shall be
deemed to be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf by a duly authorized officer.
POWERHOUSE TECHNOLOGIES GROUP, INC.
By: /s/ Xxx Xxxxxx
--------------------
Name: XXX XXXXXX
Title: CEO
THE WALL STREET GROUP, INC.
By:__________________________
Name:
Title:
WALL STREET CONSULTANTS, INC.
By:__________________________
Name:
Title:
XXXXXXX, DEUTSCH, XXXXXXXX & XXXXXXXXX, LLP
(For purposes of paragraphs l(b) and l(f) only)
By:__________________________
Name:
Title:
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf by a duly authorized officer.
POWERHOUSE TECHNOLOGIES GROUP, INC.
By:_________________________
Name:
Title:
THE WALL STREET GROUP, INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: XXXXXX XXXXXXXX
Title: VICE PRESIDENT
WALL STREET CONSULTANTS, INC.
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: XXXXXX XXXXXXXX
Title: VICE PRESIDENT
XXXXXXX, DEUTSCH, XXXXXXXX &
XXXXXXXXX, LLP
(For purposes of paragraphs l(b) and l(f) only)
By: /s/ Xxx X. Xxxx
---------------------
Name: XXX X. XXXX
Title: Attorney
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Exhibit 1
Option Agreement
STOCK OPTION AGREEMENT
Option granted by PowerHouse Technologies Group, Inc. a Delaware
corporation (the "Corporation"), to Wall Street Consultants, Inc., a New York
corporation (which together with its assigns is sometimes hereinafter referred
to as the "Grantee"):
1. The Option. The Corporation grants to the Grantee, effective on
September 26, 2005 (the "Date of Grant"), a stock option (the "Option") to
purchase, on the terms and conditions herein set forth, up to 350,000 (the
"Shares") of the Corporation's fully-paid, nonassessable shares of common stock,
par value $0.0001 per share ("Common Stock"), at the purchase price for the
Shares set forth in Section 2 below.
2. The Purchase Price. The purchase price of the Shares shall be $0.60 per
share (the "Purchase Price"), as such Purchase Price shall be adjusted from time
to time pursuant to Section 9.
3. Exercise of Option.
(a) The Option is exercisable over a period ending five years from the
Date of Grant (the "Option Period"). The Option may be exercised from time to
time during the Option Period as to the total number of Shares subject to this
Option, or any lesser amount thereof, and the Option shall continue as to any
unexercised Shares.
(b) In the event the Grantee elects to exercise all or any portion of
the Option, the Grantee shall deliver to the Corporation written notice (the
"Notice") of such election, which Notice shall specify the number of Shares in
respect of which the Option is to be exercised, along with payment of the
Purchase Price of the Shares in respect of which the Option is exercised. The
Purchase Price shall be paid in full in United States dollars at the time of
exercise. If the Option is exercised in accordance with the provisions of this
Agreement, the Corporation shall deliver as soon as practicable to the Grantee a
certificate or certificates representing the number of Shares in respect of
which the Option is being exercised, which Shares shall be registered in the
holder's name.
4. Sale of Shares. The Grantee shall not be entitled to sell, transfer, or
distribute the Shares or the Option except pursuant to (i) an effective
registration statement under the Securities Act of 1933, as amended (the "Act"),
or (ii) if there be no registration statement in effect, pursuant to an
exemption from registration under the Act. Prior to offering or selling the
Shares or the Option upon a claim of exemption, the holder shall obtain a
written opinion from counsel reasonably satisfactory to the Corporation to the
effect that such exemption is available or shall deliver a "no-action" letter
from the Securities and Exchange Commission with respect to the proposed sale,
transfer or distribution of the Shares or the Option.
5. Registration Rights. The Corporation agrees that, for so long as the
Option remains exercisable and for a period of two years thereafter, whenever
the Corporation proposes to file with the Securities and Exchange Commission a
registration statement (other than as to securities issued pursuant to an
employee benefit plan or as to a merger, acquisition or similar transaction
subject to Rule 145 promulgated under the Securities Act), the Corporation
shall, at least 30 days prior to such filing, give written notice of such
proposed filing to the Grantee setting forth the facts with respect to such
proposed filing, and shall offer to include in any such filing the Shares
subject to the Option provided that the Corporation receives a request therefore
at least 10 days prior to the proposed filing date. All fees, disbursements and
out-of-pocket expenses in connection with the filing of any registration
statement and in complying with applicable securities and blue sky laws shall be
borne by the Corporation.
The Corporation will indemnify and hold harmless the Grantee and each
person who controls the Grantee within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages, expenses and
liabilities, joint or several (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in any settlement
effected with the Corporation's consent (not to be unreasonably withheld) of,
any action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Act, the Exchange Act or other federal or
state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based on (A) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement filed with respect to the Shares (including any related
preliminary or definitive prospectus, or any amendment or supplement to such
registration statement or prospectus), (B) any omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading, or (C) any violation by the
Corporation of the Act, the Exchange Act, any blue sky laws or any rule or
regulation thereunder in connection with such registration; provided however,
that the Corporation will not be liable to the extent that such loss, claim,
damage, expense or liability arises from and is based solely on a material
untrue statement and in conformity with information furnished in writing to the
Corporation by the Grantee expressly for use in such registration statement.
With respect to the matter referred to in the proviso of the foregoing sentence,
the Grantee will indemnify and hold harmless the Corporation from and against
any and all losses, claims, damages, expenses and liabilities, joint or several,
to which it may become subject under the Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise to the same
extent provided in the immediately preceding sentence.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving matters referred to in the foregoing
paragraph, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party, send written notice thereof to the
indemnifying party, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof at its own expense with counsel reasonably satisfactory to the
indemnified party or parties, and in
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such case, if the indemnified party desires to retain its own counsel, the
expense of such counsel shall be borne by the indemnified party.
6. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties' respective successors and assigns.
7. Expiration of Option. This Option is not exercisable after the
expiration of five years from the Date of Grant.
8. Rights. The Grantee shall not, by reason of the granting to it of the
Option, have or thereby acquire any rights of a stockholder of the Corporation
with respect to any Shares unless and until it has tendered full payment of the
Purchase Price for such Shares.
9. Adjustments of Purchase Price.
(a) In case the Corporation after the Date of Grant shall (i) pay a
stock dividend or make a distribution in shares of capital stock of the
Corporation, or (ii) sub-divide its outstanding shares of Common Stock, or (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Corporation, the exercise right and the Purchase Price in
effect immediately prior to such action shall be adjusted so that the Grantee
shall be entitled to receive the number of shares of capital stock of the
Corporation which it would have owned immediately following such action had such
Option been exercised immediately prior thereto. An adjustment made pursuant to
this sub-Section 9(a) shall, in the case of a subdivision, combination or
reclassification become effective retroactively immediately after the effective
date thereof and shall, in case of a dividend or distribution, become effective
retroactively immediately after the record date thereof, subject in each case to
the provisions of sub-Section 9(e). If, as a result of an adjustment made
pursuant to this sub-Section 9(a), the Grantee shall become entitled to receive
shares of two or more classes of capital stock of the Corporation, the Board of
Directors of the Corporation (whose determination shall be conclusive) shall
determine the allocation of the adjusted Purchase Price between or among shares
of such classes of capital stock.
(b) In the case the Corporation after the Date of Grant shall issue
rights or warrants to all the holders of Common Stock entitling them (for a
period expiring more than 45 days after the record date mentioned below) to
subscribe for or purchase shares of Common Stock at a price per share less than
the current market price per share of Common Stock (as defined in sub-Section
9(d)) at the record date mentioned below, then, and thereafter successively upon
each such issuance, the Purchase Price in effect immediately prior to the
issuance of such rights or warrants shall forthwith be reduced to a price
(calculated to the nearest full cent) determined by multiplying the Purchase
Price in effect immediately prior to such issuance by a fraction the numerator
of which shall be the number of shares of Common Stock outstanding immediately
prior to such record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of additional shares so offered
would purchase at such
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current market price and the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to such record date plus the
number of additional shares of Common Stock offered for subscription or
purchase. An adjustment made pursuant to this sub-Section 9(b) shall become
effective retroactively immediately after the record date for the determination
of stockholders entitled to receive rights or warrants as aforesaid, subject to
the provisions of sub-Section 9(e).
(c) In case the Corporation after the Date of Grant shall distribute
to all the holders of Common Stock any evidences of its indebtedness or any
assets (other than a cash distribution made as a dividend payable out of
earnings or out of any surplus legally available for dividends under the laws of
the jurisdiction of incorporation of the Corporation) or rights to subscribe or
purchase other than rights to subscribe for or purchase Common Stock, then, and
thereafter successively upon each such distribution, the Purchase Price in
effect immediately prior to such distribution shall forthwith be reduced to a
price (calculated to the nearest full cent) determined by multiplying the
Purchase Price in effect immediately prior to such distribution by a fraction
the numerator of which shall be the current market price per share of Common
Stock (as defined in sub-Section 9(d)) at the record date mentioned below, less
the then fair market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) of the portion of such
evidences of indebtedness or such assets so distributed, or of such subscription
or purchase rights, applicable to one share of Common Stock and the denominator
of which shall be the current market price per share. An adjustment made
pursuant to this sub-Section 9(c) shall become effective retroactively
immediately after the record date for the determination of stockholders entitled
to receive such distribution, subject to the provisions of sub-Section 9(e).
The certificate of any independent firm of public accountants of
recognized standing selected by the Board of Directors of the Corporation shall
be conclusive evidence of the correctness of any computation made under
sub-Section 9(a) through 9(c). All calculations under this Section 9 shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.
(d) For the purposes of any computation under sub-Section 9(a)
through 9(c) hereof, the current market price per share of Common Stock at any
date shall be deemed to be the average of the daily closing prices for the 30
consecutive business days commencing 45 business days before the day in
question. The closing price for each day shall be the last reported sale price
regular way or, in case no such reported sale take place on such day, the
average of the reported closing bid and asked prices regular way, in either case
as officially reported by the New York Stock Exchange, or, if the Common Stock
is not listed or admitted to trading on such Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
as officially reported by such exchange, or, if the Common Stock is not listed
or admitted to trading on any national securities exchange, the last reported
sale price regular way on the Over-The-Counter Bulletin Board, or if no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, or if the Common Stock is not then listed and
admitted to trading on the Over-The-Counter Bulletin Board, the average of the
closing bid and asked prices as furnished by a
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securities broker-dealer which during the period was a principal market maker in
the Common Stock, selected by the Corporation for the purpose.
(e) No adjustment of the Purchase Price shall be required under sub-
Section 9(a) through 9(c) hereof if the amount of such adjustment is less than
$.10; provided, however, that any adjustments which by reason of the foregoing
are not required at the time to be made shall be carried forward and taken into
account and included in determining the amount of any subsequent adjustment. If
the Corporation shall take a record of the holders of Common Stock for the
purpose of entitling them to receive any dividend or distribution or any
subscription or purchase rights and shall, thereafter and before the
distribution to stockholders of any such dividend, distribution or subscription
or purchase rights, legally abandon its plan to pay or deliver such dividend,
distribution or subscription or purchase rights, then no adjustment of the
Purchase Price shall be required by reason of the taking of such record.
(f) In case the Corporation after the Date of Grant shall take any
action affecting the Common Stock, other than actions described in sub-Sections
9(a) through 9(c), which in the opinion of the Board of Directors of the
Corporation would materially affect the rights of the Grantee, the Purchase
Price and shares purchasable on exercise of the Option shall be adjusted in such
manner, if any, and at such time, as the Board of Directors of the Corporation,
in its sole discretion, may determine to be equitable in the circumstances.
(g) Whenever the Purchase Price is adjusted pursuant to this Section
9, the Corporation shall promptly provide to the Grantee a certificate signed by
the President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary of the Corporation setting forth in
reasonable detail the events requiring the adjustment and the method by which
such adjustment was calculated, and specifying the Purchase Price and the number
or kind or class of shares or other securities or property purchasable upon
exercise of the Option after giving effect to such adjustment.
(h) In case the Corporation after the Date of Grant shall propose
(i) to pay any dividend payable in stock to the holders of Common Stock or to
make any other distribution (other than cash dividends as referred to in
sub-Section (c) hereof) to the holders of Common Stock, or (ii) to offer to the
holders of Common Stock rights to subscribe to or purchase any additional shares
of any class or any other rights or options, or (iii) to effect any
reclassification of Common Stock (other than a reclassification involving merely
the subdivision or combination of outstanding shares of Common Stock) or any
capital reorganization, or any consolidation or merger, or any sale, transfer or
other disposition of its property, assets and business substantially as an
entirety, or the liquidation, dissolution or winding up of the Corporation,
then, in each such case, the Corporation shall mail, first class, postage
prepaid, to the Grantee notice of such proposed action, which shall specify the
date on which the books of the Corporation shall close, or a record be taken,
for such stock dividend or other distribution or such rights or options, or the
date on which such reclassification, reorganization, consolidation, merger,
sale, transfer, other disposition, liquidation, dissolution or winding up shall
take place or
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commence, as the case may be, and the date for participation therein by the
holders of Common Stock if any such date is to be fixed, and shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action on the Purchase Price and the number or kind
or class of shares or other securities or property purchasable upon exercise of
the Option after giving effect to any adjustment which will be required as a
result of such action. Such notice shall be mailed in the case of any action
covered by clause (i) or (ii) above at least ten days prior to the record date
for determining holders of the Common Stock for purposes of such action, and in
the case of any action covered by clause (iii) above at least ten days prior to
the date of the taking of such proposed action.
(i) Failure to provide any certificate or notice or to mail any
notice, or any defect in any certificate or notice, pursuant to sub-Sections
9(g) and 9(h), shall not affect the legality or validity of the adjustment in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable on exercise of the Option or of any transaction giving
rise thereto.
(j) For the purposes of this Section 9, the number of shares of
Common Stock of the Corporation at any time outstanding shall not include shares
then owned or held by or for the account of the Corporation.
(k) For the purposes of this Section 9, the term "Common Stock"
shall mean (i) the class of stock designated as the common stock, par value
$0.0001 per share, of the Corporation, at the Date of Grant or (ii) any other
class of stock resulting from successive changes or reclassifications of such
common stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. In the event that at any time, as
a result of an adjustment made pursuant to this Section 9, shares other than
shares of Common Stock are issuable upon exercise of the Option, thereafter the
number of such other shares so issuable shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in this Section 9, and all
other provisions of this Agreement with respect to Common Stock shall apply on
like terms to any such other shares. Subject to the foregoing, and unless the
context requires otherwise, all references to Common Stock in this Agreement
shall, in the event of an adjustment pursuant to this Section 9, be deemed to
refer also to any other securities or property then issuable upon exercise of
the Option as a result of such adjustments.
(l) On September 26, 2005 the Corporation sold Common Stock and
issued Common Stock Purchase Warrants pursuant to several Common Stock and
Warrant Purchase Agreements in substantially the same form, each dated as of
September 21, 2005 (as amended from time to time, the "Purchase Agreements"), by
and among the Corporation and certain purchasers named therein (the "PIPE
Transaction"). A copy of one of the Purchase Agreements has been provided to the
Grantee. Notwithstanding the provisions of this Section 9 or any other
provisions of this Agreement to the contrary, the PIPE Transaction and the
issuance of shares of Common Stock, warrants or other securities pursuant to,
and the other transactions contemplated by, the Purchase Agreements, whether
occurring prior to, on or after the Date of Grant, shall not cause or
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result in any adjustment of the Purchase Price or the number of shares of Common
Stock or other securities purchasable upon exercise of the Option.
10. Consolidation or Merger. In case, after the Date of Grant, as a result
of a merger or consolidation of the Corporation into or with another
corporation, or the sale or other transfer of the Corporation's property, assets
and business substantially as an entirety to a successor corporation, the Common
Stock is in effect changed, in whole or in part, into a different kind or class
of stock or other securities or property, the Corporation, or the successor
corporation, as the case may be, shall execute and deliver to the Grantee a
supplemental agreement providing that the Grantee shall have the right
thereafter (until the expiration of the right of exercise of the Option) to
receive upon exercise of the Option the kind and amount of shares of stock or
other securities or property receivable upon such merger or consolidation, or
upon the dissolution following such sale or other transfer, by a holder of the
number of shares of Common Stock of the Corporation issuable upon exercise of
the Option immediately prior to such change. Such supplemental agreement shall
provide for adjustments which shall be as nearly equivalent as practicable to
the adjustments provided for in this Agreement. The provisions of this Section
10 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
11. Fractional Interests. The Corporation shall not be required to issue
fractional shares of Common Stock or to make any payment in cash upon any
exercise of the Option, but if the number of shares of Common Stock purchasable
upon exercise of the Option has been adjusted pursuant to sub-Section 9(a), in
respect of any final fraction of a share which the Grantee would otherwise be
entitled to purchase upon such exercise, the Corporation may, in its sole
discretion, (a) make a payment in cash based on the market price of the Common
Stock on the basis of the closing price (as provided in the second sentence of
sub-Section 9(d)) on the business day next preceding the date of exercise or (b)
make such other provisions with respect to such fractional shares as it shall
determine.
12. Reserve of Shares. The Corporation will reserve and set aside and have
at all times, free from preemptive rights, the number of shares of authorized
but unissued Common Stock deliverable upon exercise of the Option, and it will
have at all times any other rights or privileges provided for therein sufficient
to enable it at all times to fulfill all of its obligations in this Agreement.
13. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
* * *
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If the foregoing is in accordance with the Grantee's understanding and
approved by it, it may so confirm by signing and returning the duplicate of this
Agreement delivered for that purpose.
POWERHOUSE TECHNOLOGIES GROUP, INC.
By: ______________________________
Dated: September 26, 2005
The foregoing is in accordance with the undersigned's understanding and is
hereby confirmed and agreed to as of the Date of Grant.
WALL STREET CONSULTANTS, INC.
By: ______________________________
Dated: September 26, 2005
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Exhibit 2
WSG Release
RELEASE
To all to whom these presents shall come or may concern, know that THE
WALL STREET GROUP, INC., a New York corporation, and WALL STREET CONSULTANTS,
INC., a New York corporation, on their own behalf and on behalf of their
predecessors, parents, subsidiaries, affiliates, divisions, directors, officers,
employees, agents, members, and partners (hereinafter referred to individually
and collectively as the "RELEASORS"), jointly and severally, for good and
valuable consideration received from POWERHOUSE TECHNOLOGIES GROUP, INC., a
Delaware corporation, receipt whereof is hereby acknowledged, hereby forever
release and forever discharge POWERHOUSE TECHNOLOGIES GROUP, INC. and AGATE
TECHNOLOGIES, INC., a Delaware corporation, and each of their predecessors,
parents, subsidiaries, affiliates, divisions, directors, officers, agents,
employees, members, and partners (hereinafter referred to individually and
collectively as the "RELEASEES") and RELEASEES' heirs, executors,
administrators, successors and assigns, from any and all claims, debts, demands,
causes of action, losses, suits, contracts, agreements, obligations, costs,
damages, controversies, judgments, liabilities and other claims of any kind or
nature whatsoever, known or unknown, suspected or unsuspected, fixed or
contingent, in equity or in law or otherwise, which against any of the
RELEASEES, any of the RELEASORS or any of the RELEASORS' heirs, executors,
administrators, successors or assigns, ever had, now have or in the future can,
shall or may have
for, upon, or by reason of any matter, cause or thing whatsoever from the
beginning of the world to the day of the date of this RELEASE.
This RELEASE is made in connection with that certain Settlement Agreement,
dated September 26, 2005 (the "Settlement Agreement"), among The Wall Street
Group, Inc., Wall Street Consultants, Inc., and PowerHouse Technologies Group,
Inc. in connection with an arbitration before the American Arbitration
Association entitled The Wall Street Group, Inc. and PowerHouse Technologies
Group, Inc., Case Number 13 117 Y 00213 05 (the "Arbitration"). This RELEASE is
intended to release all claims that were asserted or could have been asserted by
any of the RELEASORS against any of the RELEASEES in the Arbitration and, in
addition, all other claims that any of the RELEASORS ever had, now have or
hereafter can, shall or may have against any of the RELEASEES for, upon, or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this RELEASE.
Notwithstanding anything to the contrary contained herein, nothing in this
RELEASE or the Settlement Agreement shall be construed to release The Wall
Street Group, Inc., Wall Street Consultants, Inc. or PowerHouse Technologies
Group, Inc. from any of its obligations pursuant to the Settlement Agreement.
Notwithstanding any arbitration or appraisal provisions contained in any
underlying or other agreement, the construction and effect of this RELEASE shall
be determined solely in a court of competent jurisdiction.
This RELEASE may not be changed orally.
2
IN WITNESS WHEREOF, The Wall Street Group, Inc. and Wall Street
Consultants, Inc. have each caused this RELEASE to be executed by its duly
authorized officer and its corporate seal to be hereunto affixed on
September___, 2005.
IN PRESENCE OF:
THE WALL STREET GROUP, INC.
By: _____________________________
Name:
Title:
WALL STREET CONSULTANTS, INC.
By: _____________________________
Name:
Title:
3
STATE OF_____________________ )
) ss.:
COUNTY OF____________________ )
On the ___ day of _________, 2005, before me, the undersigned, personally
appeared _________________, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
________________________________________
Notary Public
4
STATE OF_____________________ )
) ss.:
COUNTY OF____________________ )
On the ____ day of___________, 2005, before me, the undersigned,
personally appeared ______________________, personally known to me or proved to
me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
________________________________________
Notary Public
5
Exhibit 3
PTG Release
RELEASE
To all to whom these presents shall come or may concern, know that
POWERHOUSE TECHNOLOGIES GROUP, INC., a Delaware corporation, on its own behalf
and on behalf of its predecessors, parents, subsidiaries, affiliates, divisions,
directors, officers, employees, agents, members, and partners, and on behalf of
Agate Technologies, Inc. (hereinafter referred to individually and collectively
as the "RELEASORS"), jointly and severally, for good and valuable consideration
received from THE WALL STREET GROUP, INC., a New York corporation, and WALL
STREET CONSULTANTS, INC., a New York corporation, receipt whereof is hereby
acknowledged, hereby forever releases and forever discharges THE WALL STREET
GROUP, INC. and WALL STREET CONSULTANTS, INC. and each of their predecessors,
parents, subsidiaries, affiliates, divisions, directors, officers, agents,
employees, members, and partners (hereinafter referred to individually and
collectively as the "RELEASEES") and RELEASEES' heirs, executors,
administrators, successors and assigns, from any and all claims, debts, demands,
causes of action, losses, suits, contracts, agreements, obligations, costs,
damages, controversies, judgments, liabilities and other claims of any kind or
nature whatsoever, known or unknown, suspected or unsuspected, fixed or
contingent, in equity or in law or otherwise, which against any of the
RELEASEES, any of the RELEASORS or any of the RELEASORS' heirs, executors,
administrators, successors or assigns, ever had, now have or in the future can,
shall or may have for, upon, or by reason of any matter, cause or thing
whatsoever from the beginning of the world to the day of the date of this
RELEASE.
This RELEASE is made in connection with that certain Settlement Agreement,
dated September 26, 2005 (the "Settlement Agreement"), among The Wall Street
Group, Inc., Wall Street Consultants, Inc., and PowerHouse Technologies Group,
Inc. in connection with an arbitration before the American Arbitration
Association entitled The Wall Street Group, Inc. and PowerHouse Technologies
Group, Inc., Case Number 13 117 Y 00213 05 (the "Arbitration"). This RELEASE is
intended to release all claims that were asserted or could have been asserted by
any of the RELEASORS against any of the RELEASEES in the Arbitration and, in
addition, all other claims that any of the RELEASORS ever had, now have or
hereafter can, shall or may have against any of the RELEASEES for, upon, or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this RELEASE.
Notwithstanding anything to the contrary contained herein, nothing in this
RELEASE or the Settlement Agreement shall be construed to release The Wall
Street Group, Inc., Wall Street Consultants, Inc. or PowerHouse Technologies
Group, Inc. from any of its obligations pursuant to the Settlement Agreement.
Notwithstanding any arbitration or appraisal provisions contained in any
underlying or other agreement, the construction and effect of this RELEASE shall
be determined solely in a court of competent jurisdiction.
This RELEASE may not be changed orally.
2
IN WITNESS WHEREOF, PowerHouse Technologies Group, Inc. has caused this
RELEASE to be executed by its duly authorized officer and its corporate seal to
be hereunto affixed on September___, 2005.
IN PRESENCE OF:
POWERHOUSE TECHNOLOGIES
GROUP, INC.
By: _________________________________
Name:
Title:
3
STATE OF_______________ )
) ss.:
COUNTY OF______________ )
On the ____ day of ____________, 2005, before me, the undersigned,
personally appeared ____________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed' the instrument.
________________________________________
Notary Public
4
Exhibit 4
Stipulation
AMERICAN ARBITRATION ASSOCIATION
STIPULATION OF DISMISSAL WITH
PREJUDICE AND WITHOUT COSTS
In the Matter of the Arbitration between:
The Wall Street Group, Inc.
and
Powerhouse Technologies, Inc.
13 117 Y 00213 05
Case Manager: Xxxxxx X. Xxxx
IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned, the
attorneys of record for the parties to the above-entitled arbitration, that the
arbitration be and the same hereby is dismissed with prejudice and without costs
to either party as against the other. This Stipulation may be filed with the
American Arbitration Association without further notice.
Dated: New York, New York
September 26, 0000
XxXxxxx, Xxxxxxx, Xxxxxxxx, &
Xxxxxxxxx, LLP
By _________________________________
Attorneys for Claimant
The Wall Street Group, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(000)000-0000
Xxxxxx Xxxx LLP
By _________________________________
Attorneys for Respondent
PowerHouse Technologies Group,
Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000)000-0000
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