Document:

Exhibit
99.1

 

3COM CORPORATION

 

1983 STOCK OPTION PLAN

AMENDED AND RESTATED STOCK OPTION
AGREEMENT

 

This Amended and Restated Stock Option Agreement (this
“Option Agreement”) is entered into as of
May 18, 2005 by and between 3Com Corporation (the “Company”)
and Eric A. Benhamou (the “Optionee”), and
amends and restates the Original Agreements (as defined below).

 

WHEREAS, the Company previously granted the Optionee
an option (the “Option”) to purchase [________]
shares (the “Shares”) of the Company’s common
stock for an exercise price of $[_____] per share pursuant to the terms of a
Notice of Grant and Stock Option Agreement, each dated as of [___________] (the
“Original Agreements”);

 

WHEREAS, the Optionee is Chairman of the Company’s
Board of Directors and an employee of the Company;

 

WHEREAS, the Original Agreements provide that, upon
termination of the Optionee’s employment with the Company, the Option will
terminate if not exercised within three months of the date on which the
Optionee’s employment terminates;

 

WHEREAS, the Option is currently vested and
exercisable with respect to all of the Shares;

 

WHEREAS, the Company and the Optionee desire to amend
the Original Agreements to provide that the Option will not terminate upon a
termination of the Optionee’s employment with the Company; provided that
the Optionee continues to serve as a member of the Company’s Board of Directors
or as a Consultant (as defined below) to the Company; and

 

WHEREAS, the parties agree that this Option Agreement,
together with the Notice of Grant attached hereto as Exhibit A, amends
and restates in their entirety the Original Agreements.

 

NOW THEREFORE, the parties agree as follows:

 

3Com Corporation (the “Company”)
has granted to the Optionee an option to purchase certain shares of common
stock of the Company, in the manner and subject to the following terms and
conditions.  Unless otherwise defined
herein, the terms defined in the 1983 Stock Option Plan, as amended (the “Plan”) shall have the same defined meanings in this Option
Agreement.

 

1.             Definitions:

 

(a)           “Notice of Grant”
shall mean the “3COM CORPORATION NOTICE OF GRANT OF STOCK OPTION” attached
hereto as Exhibit A.

 

(b)           “Optionee” shall
mean the holder of an outstanding Option granted under the Plan and whose name
is set forth in the Notice of Grant.

 

(c)           “Date of Option Grant”
shall mean the “Date of Grant” set forth in the
Notice of Grant.

 

 

(d)           “Number of Option Shares”
shall mean the “Total Number of Option Shares Granted”
as set forth in the Notice of Grant.  The
number of such shares of common stock of the Company may be adjusted from time
to time pursuant to Section 9.

 

(e)           “Exercise Price”
shall mean the “Option Price per Share” as set
forth in the Notice of Grant.  Such price
per share may be adjusted from time to time pursuant to Section 9.

 

(f)            “Initial Vesting Date”
shall be the date occurring one (1) year after the Date of Option Grant.

 

(g)           Determination of “Vested Ratio”:

 

	
   

  	
   

  	
  Vested
  Ratio

  
	
  Prior to the Initial Vesting Date

  	
   

  	
  0

  
	
  On the Initial Vesting Date, for each full year of
  the Optionee’s continuous employment by a Participating Company from the Date
  of Option Grant until the Initial Vesting Date

  	
   

  	
  1⁄4

  
	
  Plus

  	
   

  	
   

  
	
  For each subsequent full year thereafter of the
  Optionee’s continuous employment by a Participating Company from the Initial
  Vesting Date

  	
   

  	
  1⁄4

  
	
  In no event shall the Vested Ratio exceed 1/1.

  	
   

  	
   

  

 

(h)           “Option Termination Date”
shall mean the date occurring ten (10) years after the Date of Option Grant.

 

(i)            “Company” shall
mean 3Com Corporation, a Delaware corporation, and any successor corporation
thereto.

 

(j)            “Participating Company”
shall mean (i) the Company and (ii) any present or future parent and/or
subsidiary corporation of the Company while such corporation is a parent or
subsidiary of the Company.  For purposes
of this Option Agreement, a parent corporation and a subsidiary corporation
shall be as defined in sections 424(e) and 424(f) of the Internal Revenue Code
of 1986, as amended (the “Code”).

 

(k)           “Service Provider”
means an Employee, Director or Consultant.

 

(l)            “Consultant”
means any person, including an advisor, engaged by the Company, or a parent or
subsidiary of the Company, to render services to such entity.

 

 

2.             Grant of Option.  The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant, an option to purchase the
number of Shares set forth in the Notice of Grant, at the exercise price per
Share set forth in the Notice of Grant, and subject to the terms and conditions
of the Plan, which is incorporated herein by reference.  Subject to Section 15(c) of the Plan, in
the event of a conflict between the terms and conditions of the Plan and this
Option Agreement, the terms and conditions of the Plan shall prevail.  This Option is not intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code and shall be
treated as a Nonstatutory Stock Option.

 

3.             Administration.  All questions of interpretation concerning
this Option Agreement shall be determined by the Plan Administrator.  All determinations by the Administrator shall
be final and binding upon all persons having an interest in the Option.  Any officer of any Participating Company
shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, or election which is the responsibility of or which
is allocated to the Company herein, provided the officer has apparent authority
with respect to such matter, right, obligation, or election.

 

4.             Exercise of the Option:

 

(a)           Right to Exercise. The Option
shall be exercisable during its term in accordance with the vesting schedule
set forth herein and with the applicable provisions of the Plan and this Option
Agreement.  The Option shall first become
exercisable on the Initial Vesting Date. 
The Option shall be exercisable on and after the Initial Vesting Date
and prior to the termination of the Option in the amount equal to the Number of
Option Shares multiplied by the Vested Ratio as set forth in
Section 1(g) less the number of shares previously acquired upon exercise of the
Option.  In no event shall the Option be
exercisable for more shares than the Number of Option Shares.

 

(b)           Method of Exercise.  The Option shall be exercisable by written
notice to the Company which shall state the election to exercise the Option,
the number of shares for which the Option is being exercised, and such other
representations and agreements as to the Optionee’s investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement.  Such written notice
shall be signed by the Optionee and shall be delivered to the Company’s Stock
Administration Department, or other authorized representative of the Company,
prior to the termination of the Option as set forth in Section 6, accompanied
by full payment of the option price for the number of shares being purchased.

 

(c)           Form of Payment of Option Price.  Such payment shall be made (1) in cash, by
check, or cash equivalent, (2) by tender of shares of the Company’s stock owned
by the Optionee and having a fair market value not less than the option price,
which (i) either have been owned by the Optionee for more than six (6) months
or were not acquired, directly or indirectly from the Company, and (ii) have a
fair market value not less than the option price, (3) Immediate Sales Proceeds,
as defined below, or (4) by any combination of the foregoing.  Notwithstanding the foregoing, the Option may
not be exercised by the tender of the Company’s stock to the extent such tender
of stock would constitute a violation of the provisions of any law, regulation,
and/or agreement restricting the redemption of the Company’s stock.  “Immediate Sales Proceeds”
shall mean the assignment in form acceptable to the Company of the proceeds of
a sale of the shares acquired on the exercise of the Option pursuant to a
procedure approved by the Company.  The
Company reserves the right to decline to approve any such procedure in the
Company’s sole and absolute discretion.

 

 

(d)           Withholding.  At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
shall make adequate provision for federal and state tax withholding obligations
of the Company, if any, which arise in connection with the Option including,
without limitation, obligations arising upon (i) the exercise of the Option in
whole or in part, (ii) the transfer, in whole or in part, of any shares
acquired on exercise of the Option, or (iii) the lapsing of any restriction
with respect to any shares acquired on exercise of the Option.

 

(e)           Certificate Registration.  The shares as to which the Option shall be
exercised shall be registered in the name of the Optionee, or, if applicable,
the heirs of the Optionee.  If payment of
the option price is accomplished using Immediate Sales Proceeds, the
certificate or certificates shall be registered in the name of a nominee which
is an authorized broker for the Company’s same-day sale program.

 

(f)            Restriction on Grant of Option and
Issuance of Shares.  The grant of the
Option and the issuance of shares pursuant to the Option shall be subject to
compliance with all applicable requirements of federal or state law with
respect to such securities.  The Option
may not be exercised if the issuance of shares upon such exercise would
constitute a violation of any applicable federal or state securities laws or
other law or regulations.  In addition,
no Option may be exercised unless (i) a registration statement under the
Securities Act of 1933, as amended, shall at the time of exercise of the Option
be in effect with respect to the shares issuable upon exercise of the Option,
or (ii) in the opinion of legal counsel to the Company, the shares issuable
upon exercise of the Option may be issued in accordance with the terms of an
applicable exemption from the registration requirements of said Act.  As a condition to the exercise of the Option,
the Company may require the Optionee to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

 

(g)           Fractional Shares.  The Company shall not be required to issue
fractional shares upon the exercise of the Option.

 

5.             Non-Transferability of the Option.  The 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 the Optionee only by the Optionee.

 

6.             Termination of the Option.  The Option shall terminate and may no longer
be exercised on the first to occur of (i) the Option Termination Date as
defined above, (ii) the last date for exercising the Option following
termination of the Optionee’s relationship as a Service Provider as described
in Section 7, (iii) upon a Transfer of Control as described in Section 8, or
(iv) upon a vote by the shareholders of the Company to disapprove the
reservation of shares required for issuance hereunder.

 

7.             Termination of Service Relationship:

 

(a)           Termination of Option.  If the
Optionee ceases to be a Service Provider for any reason except by reason of
death or Disability, the Option, to the extent unexercised and exercisable by
the Optionee on the date on which the Optionee ceased to be a Service Provider,
may be exercised by the Optionee within three (3) months after the date on
which the Optionee’s relationship as a Service Provider terminates, but in any
event no later than the Option Termination Date.  If the Optionee’s Service Provider
relationship is terminated because of the

 

 

death of the
Optionee or Disability of the Optionee, the Option may be exercised by the
Optionee (or the Optionee’s legal representative) at any time prior to the
expiration of twelve (12) months from the date of such termination, but in any
event no later than the Option Termination Date. The Optionee’s Service
Provider relationship shall be deemed to have terminated on account of death if
the Optionee dies within three (3) months after the Optionee’s termination the
Service Provider relationship.

 

(b)           Exercise Prevented by Law.  Except as provided in this Section 7, the
Option shall terminate and may not be exercised after the Optionee’s Service
Provider relationship terminates unless the exercise of the Option in
accordance with this Section 7 is prevented by the provisions of Section 4(f).
If the exercise of the Option is so prevented, the Option shall remain exercisable
until three (3) months after the date the Optionee is notified by the Company
or its Parent or Subsidiary for whom the Optionee provides service that the
Option is exercisable but in no event later than the Option Termination Date.

 

(c)           Leave of Absence.  For purposes hereof, the Optionee’s
employment with a Participating Company shall not be deemed to terminate if the
Optionee takes any military leave, sick leave or other bona fide leave of
absence approved by the Company of ninety (90) days or less.  In the event of a leave in excess of ninety
(90) days, the Optionee’s employment shall be deemed to terminate on the
ninety-first (91st) day of the leave unless the Optionee’s right to
reemployment with the Participating Company remains guaranteed by statute or
contract.

 

(d)           No Guarantee of Continued Service.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
THIS OPTION AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR
THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER
AT ANY TIME, WITH OR WITHOUT CAUSE.

 

8.             Ownership Change and Transfer of Control.  For the purposes hereof the “Control Company” shall mean the Participating Company whose
stock is subject to this Option.  Except
as provided in an applicable Executive Severance Plan, Management Retention
Agreement or other formal written employment contract between the Optionee and
the Company, in the event of a Transfer of Control, the Board, in its sole
discretion, shall either (i) provide that any unexercised portion of the Option
shall be fully exercisable and fully vested as of a date prior to the Transfer
of Control, as the Board so determines, or (ii) arrange with the surviving,
continuing, successor, or purchasing corporation, as the case may be, that such
corporation assume the Company’s right and obligations under this Option
Agreement either by assuming the Option or by granting an equivalent
substituted option by the successor corporation or a Parent or Subsidiary of
the successor corporation. The Option shall terminate as of the date of the
Transfer of Control to the extent that the Option is neither exercised as of
the date of the Transfer of Control, nor assumed by the surviving continuing,
successor or purchasing corporation, as the case may be.  Subject to the terms and conditions of the
Plan, in the event that there is a 
conflict

 

 

between this Option Agreement and any applicable, (i) Executive
Severance Plan, (ii) formal written management retention agreement, or (iii)
formal written employment agreement; the applicable severance plan, management
retention agreement or employment agreement shall govern.

 

9.             Effect of Change in Stock Subject to the Option.  Appropriate adjustments shall be made in the
number, exercise price and class of shares of stock subject to the Option in
the event of a stock dividend, stock split, reverse stock split, combination,
reclassification or like change in the capital structure of the Company.  In the event a majority of the shares which
are of the same class as the shares that are subject to the Option are exchanged
for, converted into, or otherwise become (whether or not pursuant to an
Ownership Change) shares of another corporation (the “New Shares”),
the Company may unilaterally amend the Option to provide that the Option is
exercisable for New Shares.  In the event
of any such amendment, the number of shares and the exercise price shall be
adjusted in a fair and equitable manner.

 

10.           Rights as a Shareholder or Employee.  The Optionee shall have no rights as a
shareholder with respect to any shares covered by the Option until the date of
the issuance of a certificate or certificates for the shares for which the
Option has been exercised.  No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date such stock certificate or certificates are
issued, except as provided in Section 9. 
Nothing in the Option shall confer upon the Optionee any right to
continue in the service of a Participating Company or interfere in any way with
any right of the Participating Company to terminate the Optionee’s Service
Provider relationship at any time.

 

11.           Legends.  The Company may at any time place legends
referencing any applicable federal and/or state securities restrictions on all
certificates representing shares of stock subject to the provisions of this
Option Agreement.  The Optionee shall, at
the request of the Company, promptly present to the Company any and all
certificates representing shares acquired pursuant to this Option in the
possession of the Optionee in order to effectuate the provisions of this
Section.

 

12.           Binding Effect.  This Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.

 

13.           Amendment or Termination.  The Administrator may at any time amend or
terminate the Plan and/or the Option; provided, however, that no such amendment
or termination may adversely affect the Option or any unexercised portion
hereof without the consent of the Optionee.

 

14.           Integrated Agreement.  The Plan is
incorporated herein by reference.  The
Plan and this Option 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 the Optionee’s
interest except by means of a writing signed by the Company and Optionee.  To the extent contemplated herein, the
provisions of this Option Agreement shall survive any exercise of this Option
and shall remain in full force and effect.

 

15.           Applicable Law.  This Option Agreement shall be construed in
accordance with, and all disputes hereunder shall be governed by, the laws of
the Commonwealth of Massachusetts without regard to its conflict of laws
rules.  The parties hereby irrevocably
consent and submit to the personal jurisdiction and venue of the United States
District Court for the District of Massachusetts (sitting in Boston,
Massachusetts) or the Suffolk County Superior Court (sitting in Boston,
Massachusetts) for any

 

 

action and for all purposes in connection
with this Option Agreement and waive any defense based upon improper or
inconvenient venue or lack of personal jurisdiction.

 

16.           Data Privacy.  By entering into this Option Agreement, and
as a condition of the grant of the Option, the Optionee consents to the
collection, use and transfer of personal data as described in this Section. The
Optionee understands that the Company and its subsidiaries hold certain
personal information about the Optionee including, but not limited to, the
Optionee’s name, home address and telephone number, date of birth, social
security number or equivalent tax identification number, salary, nationality,
job title, any shares of stock or directorships held in the Company, details of
all Options or other entitlements to shares of stock awarded, cancelled,
exercised, vested, unvested or outstanding in the Optionee’s favor, for the
purpose of managing and administering the Plan (“Data”).  The Optionee further understands that the
Company and/or its subsidiaries will transfer Data amongst themselves as
necessary for the purposes of implementation, administration, and management of
the Optionee’s participation in the Plan, and that the Company and/or its
subsidiaries may each further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plan (“Data Recipients”). 
The Optionee understands that these Data Recipients may be located in
the Optionee’s country of residence, the European Economic Area, or elsewhere,
such as the United States.  The Optionee
authorizes the Data Recipients to receive, possess, use, retain and transfer
Data in electronic or other form, for the purposes of implementing,
administering and managing the Optionee’s participation in the Plan, including
any transfer of such Data, as may be required for the administration of the
Plan and/or the subsequent holding of shares of stock on the Optionee’s behalf,
to a broker or third party with whom the shares acquired on exercise may be
deposited.  The Optionee understands that
he or she may, at any time, review the Data, require any necessary amendments
to it or withdraw the consent herein in writing by contacting the Company.  The Optionee further understands that
withdrawing consent may affect the Optionee’s ability to participate in the
Plan.

 

17.           Release.  In consideration of the promises and benefits
set forth herein, the sufficiency of which is acknowledged, the Optionee hereby
irrevocably and unconditionally releases the Company and its parents,
subsidiaries, predecessors, successors, affiliates and joint ventures, and all
of their directors, officers, employees, representatives, attorneys, agents,
insurers, assigns, employee benefit programs (and the trustees, administrators,
fiduciaries, and insurers of such programs), and any other persons acting by,
through, under, or in concert with any of the persons or entities identified
above (the “Released Parties”) from all known and
unknown claims, promises, debts, obligations, causes of action, or similar
rights of any type, in law or in equity, that he has, had or may have had
arising from or relating to his employment with the Company and the termination
thereof (“Claims”).  The Optionee understands that the Claims that
he is hereby releasing include, but are not limited to, any and all claims
based on common law or any federal, state or local law, regulation or
ordinance, including, without limitation, the Federal Age Discrimination in
Employment Act.  The Optionee certifies
and agrees that he has not as of the date of this Option Agreement filed or
maintained any lawsuit, claim or action of any kind whatsoever against the
Released Parties and that he will not in the future file, cause or knowingly
permit any lawsuit, claim or action to be filed on his behalf relating to the
Claims released above.  The Optionee
understands that by this Option Agreement and the release set forth above he is
waiving his rights under Section 1542 of the California Civil Code and
understands the significance of that waiver. 
Section 1542 provides as follows: 
“A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”

 

 

18.           Acknowledgements.  By his signature below, the Optionee confirms
and agrees that he has carefully read and understands the provisions of this
Option Agreement; that he has had twenty-one (21) calendar days to consider
this Option Agreement before signing it; that he is entering into this Option
Agreement knowingly and voluntarily, intending that it will have binding legal
effect; and that the Company has encouraged him to consult with an attorney of
his own choice concerning the terms of this Option Agreement prior to signing
it.  The Optionee agrees that he is not
signing this Option Agreement in reliance on any promises, representations or
inducements other than those set forth herein. 
The Optionee understands that he has seven (7) calendar days within
which to revoke his signature and that this Option Agreement will not be
effective or binding until the expiration of the revocation period, provided
that he does not revoke his signature.

 

 

IN WITNESS WHEREOF, the parties have executed this Option
Agreement through their duly authorized representatives as of the date first
set forth above.

 

	
   

  	
   

  	
   

  	
   

  
	
  3COM CORPORATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Eric A. Benhamou

  

 

 

Exhibit A

 

Notice of Grant dated as
of [____________]Exhibit 10.41

                              CONSULTANCY AGREEMENT

         This Agreement is made this 1st day of January, 2005 (the "Agreement")
between

(1)      Reuadnal Limited, of  4 Queensdale Road London W11 4QD ( "Reuadnal")

(2)      David Landauer of Park Cottage Bepton West Sussex GU29 OJB (the
"Consultant") and

(3)      Avenue Group, Inc., a Delaware corporation (the "Company")

                                     WHEREAS

         A. Reuadnal is engaged in business including that of providing business
         and financial consulting services. The Consultant is an employee of
         Reuadnal.

         B. The Company desires to engage Reuadnal and through it the Consultant
         on a non-exclusive basis to render consulting services to the Company.

         C. Reuadnal agrees to be engaged and retained by the Company, and to
         provide the services of the Consultant, upon the terms and conditions
         set forth herein.

                             IT IS AGREED AS FOLLOWS

         2. Engagement: The Company hereby engages Reuadnal and Reuadnal hereby
         accepts the engagement to provide the business and financial services
         of the Consultant to the Company, to render advice, consultation,
         information and services to the Company and its officers and directors
         regarding general financial and business matters (the "Services"),
         including, but not limited to:

            (a) assisting the Company in advancing its strategic plan relative
         to the identification of, and communication with, corporate finance
         joint venture partners relating to the Company's overall business plan;

            (b) identifying and/or introducing potential investors

         It is understood and agreed by the parties hereto that:

            (i) the sole function of the Consultant will be to bring potential
            investors and the Company together; and

            (ii) neither Reuadnal or the Consultant will engage in, nor shall
            the Consultant be responsible to render any advice or participate
            in, any further corporate activities after the making of such
            introductions relative to such Services

         3. Compliance: The Consultant hereby undertakes to perform its Services
         under this Agreement in a manner consistent
         with the instructions of the Company, and  the Consultant shall:

                                       1
<PAGE>

            (a) Introduce only persons whom the Consultant reasonably believes
            are "accredited investors";

            (b) Introduce only persons with whom the Consultant has a prior
            relationship; and

            (c) Not solicit potential investors by means of general solicitation
            or general advertising.

         4. Acting as Finder Only and Indemnity: It is understood that Reuadnal
         and/or the Consultant is acting as a finder only, is not a licensed
         securities broker or dealer, and shall have no authority to enter into
         any commitments on the Company's behalf, or to negotiate the terms of
         the Offering or to hold any funds or securities in connection with the
         Offering or to perform any act which would require the Consultant to
         become licensed as a securities broker or dealer.

         5. Reports to the Company. During the Term of this Agreement, Reuadnal
         and the Consultant agree to use reasonable endeavours to keep the
         Company informed at the Company's reasonable request for information
         about the Consultant's activities in discharge of his duties hereunder.

         6. No Power to Bind. Neither Reuadnal nor the Consultant shall have
         power to bind the Company to any contract or obligation or to transact
         any business in the Company's name or on behalf of the Company in any
         manner and the Company shall have no right to compel Reuadnal or the
         Consultant to undertake any particular tasks in the performance of this
         Agreement.

         7. No Offer to Sell to be Made. Neither Reuadnal or the Consultant will
         in any manner offer or sell any of the Company's securities, including
         its $.0002 par value common stock (the "Common Stock"), or recommend
         that such persons invest in the Company, nor discuss with such persons
         the terms of any offering of the Company's securities or any other
         basis upon which such persons might negotiate with the Company;
         Furthermore, in the performance of their Services hereunder Reuadnal
         and the Consultant agree not to offer or sell any securities of the
         Company, to any United States citizen or resident, or engage in any
         other capital raising activities in the United States, unless such
         offers, sales, and/or capital raising activities are conducted through
         a U.S. licensed broker/dealer and are first approved in writing by the
         Company and then only if it is in full compliance with the requirements
         of applicable U.S. federal and state securities laws.

         8. Term. The term of this Agreement shall commence as of the date
         hereof and continue until September 20, 2005 (the "Term")

         9. Fees: As consideration for this Agreement the Company agrees to pay
         Reuadnal a non-refundable consulting fee of US$80,000 (the "Consultancy
         Fee") of which US$35,000 is payable on the signing of this Agreement
         and the balance of US$45,000 is payable at the rate of US$5,000 payable
         on each monthly anniversary date of this Agreement during the Term
         hereof commencing on January 14, 2005 by wire transfer to the
         Reuadnal's bank account without deductions or withholdings, time to be
         of the essence for the purposes of payment. The Company may, at it's
         own election, pay the balance of any sum then remaining due, at any
         time.

         10. Exclusivity; Performance; Confidentiality. The services of
         Reuadnal/Consultant hereunder shall not be exclusive, and they may
         perform similar or different services for other persons or entities
         whether or not they are competitors of Company. Reuadnal and the
         Consultant make no representations of any kind or nature as to whether,
         or not, their services to Company will be helpful to the Company, or
         successful in the eyes of the Company, and shall only be required to
         expend such time as they deem necessary or appropriate to perform the
         Services hereunder. In addition, Company's engagement of
         Reuadnal/Consultant is on a non-exclusive basis and Company may engage

                                       2
<PAGE>

         one or more other consultants during the Term hereof to perform similar
         or comparable services to those being rendered by the Consultant
         pursuant to this Agreement.

         Reuadnal and the Consultant acknowledge and agree that in the course of
         his duties they may obtain confidential and valuable non-public or
         proprietary information regarding or pertaining to the Company during
         the Term hereof (the "Confidential Information"). Reuadnal and
         Consultant agree not to, directly or indirectly, disclose, without the
         prior written consent of the Company, such Confidential Information to
         any other party except as necessary in the discharge of the Services.
         Confidential Information shall cease being deemed Confidential
         Information once it is disclosed or is otherwise known to the public
         generally, unless it is only in the public domain by reason of the
         Consultant's breach of this sub-clause. All such Confidential
         Information which has been provided to Consultant or its
         representatives which is in writing shall be clearly and conspicuously
         marked with the word "Confidential."

         11. Independent Contractor: It is agreed that the Consultant is not
         engaged in any employment relationship with the Company, but is
         employed by Reuadnal. He shall complete the Services required hereunder
         according to his own means and methods of work, and he shall not be
         subject to the control or supervision of the Company, except as to the
         results of the work and as otherwise expressly provided herein. The
         Company acknowledges that nothing in this Agreement shall be construed
         to require Reuadnal or the Consultant to provide any particular
         services, including the Services, to the Company at any specific time,
         or in any specific place or manner, unless otherwise mutually agreed.
         Payments to consultant hereunder shall not be subject to withholding
         taxes or other employment taxes, penalties, or interest charges
         whatsoever, and shall be paid gross.

         12. Representations of Consultant and Company. Neither Reuadnal or the
         Consultant are registered as a "broker/dealer" under the Securities
         Exchange Act of 1934, as amended, nor does Company believe such
         registration is required in order for Company to engage the services of
         the Consultant through Reuadnal. As to matters within his control, the
         Company represents and warrant to Reuadnal and the Consultant that:

             (a) payment of the Consulting Fee in this Agreement will be in full
             compliance with all applicable state and Federal securities laws;
             and

             (b) the performance of the Services by Reuadnal and the Consultant
             shall not violate any provision of law (including, without
             limitation state and Federal securities laws).

         13. Expenses. Reuadnal and the Consultant shall be responsible for all
         of their own expenses in connection with the performance of the
         Services, unless otherwise agreed to or approved by the Company in
         writing and transmitted to Consultant on paper, in electronic mail, by
         Telefax, or other document transmittal. Notwithstanding the above, the
         Company shall reimburse Reuadnal for any expenses up to an amount of
         US$300 incurred by Reuadnal provided that the Company, in its
         discretion, agrees to do so and provides Reuadnal with written
         authorization prior to incurring such expenses.

         14. Notices. Any notice, report or demand required, permitted or
         desired under this Agreement shall be sufficient if in writing and
         delivered by certified mail, return receipt requested or Federal
         Express (or similar courier) at the following addresses (or such other
         addresses designated by proper notice):

                                       3
<PAGE>

               To the Company:  Levi Mochkin
                                         President and CEO
                                         Avenue Group, Inc.
                                         17547 Ventura Blvd.
                                         Suite 305
                                         Encino, CA 91316
                                         Facsimile: 1818 301 2708

               With a copy to:  Barry L. Burten, a Professional Corporation
                                         Jeffer, Mangels, Butler & Marmaro, LLP
                                         1900 Avenue of the Stars, 7th Floor
                                         Los Angeles, CA 90067
                                         Facsimile: (310) 712-3359

               Or as the case may be

               To Reuadnal and/or
               the Consultant:   Mr. David Landauer
                                         c/o Reuadnal Limited
                                         4 Queensdale Road
                                         London W114QD
                                         England
                                         Facsimile: 01730 812731

         15. Jurisdiction and Governing Law. By excluding any other place of
         feasible jurisdiction, the place of legal jurisdiction with respect to
         the terms and conditions of this Agreement, the interpretation thereof
         or any dispute with respect hereto, is agreed to be the law of the
         State of California. Furthermore, the parties agree that any dispute
         between the parties arising out of or relating to this Agreement shall
         be governed by the substantive laws of the State of California.

         16. Severability. If any term, condition or provision of this Agreement
         or the application thereof to any party or circumstances shall, at any
         time or to any extent, be invalid or unenforceable, the remainder of
         this Agreement, or the application of such term, condition or provision
         to parties or circumstances other than those as to which it is held
         invalid or unenforceable, shall not be affected thereby, and each term,
         condition and provision of this Agreement shall be valid and
         enforceable to the fullest extent permitted by law.

         17. Assignment. The rights granted hereunder to Reuadnal and/or the
         Consultant and the Services to be provided are personal in nature
         between Reuadnal and/or the Consultant and the Company and cannot be
         assigned without the written agreement of all parties Any purported
         transfer of any such rights not specifically authorized pursuant to
         this Agreement shall be void and shall also constitute a breach of this
         Agreement.

         18. Release:

            (a) Released Matters. As of the date hereof, Reuadnal and the
            Consultant on the one hand and the Company on the other hand hereby
            release and absolutely and forever discharge one another and their
            respective agents, attorneys representatives, assigns, transferees,
            predecessors in interest, successors in interest, affiliates,
            subsidiaries, joint venturers, partners, and its employees,
            officers, directors, heirs, legatees, executors, administrators, and
            servants (all of which for convenience are hereinafter referred to
            as "Released Parties"), and absolutely and forever discharge them
            from, and shall indemnify and hold the respective Parties' Released
            Parties harmless from and against, any and all rights, claims,
            demands, damages, debts, liabilities, accounts, obligations,
            reckonings, liens, attorney's fees, costs, expenses, actions and
            causes of action of every kind and nature whatsoever, whether now
            known or unknown, suspected or unsuspected, based upon statute,
            common law or otherwise, which Readnal/Consultant on the one hand

                                       4
<PAGE>

            and the Company on the other hand has, own or hold, or at any time
            heretofore ever had, owned or held, or may hereafter have, own or
            hold based upon or related to any fact, thing, act, event,
            happening, inaction or omission occurring or existing at any time up
            to and including the date hereof, including but not limited to
            claims of the Consultant arising out of or relating to:

                (i) the Company; or

                (ii) any compensation or benefit of any nature whatsoever which
                may be due Consultant or which may become due Consultant as a
                result any services rendered by Consultant to or on behalf of
                the Company prior to the date hereof, or

                (iii) any claims arising out of or relating to any prior
                contract, agreement or understanding with the Company, including
                any claims relating to or arising out of relating to a proported
                November 7, 2003 agreement between the Company and Consultant

                PROVIDED THAT nothing in this Section is intended to affect

                (iv) any parties rights deriving from this Agreement, or

                (v) all and any rights of the Consultant deriving from his
                shareholding in, and as a shareholder in, the Company

                All matters release pursuant to this Section 19, hereinaftrer
                referred to as the "Released Matters."

            (b) No Admissions. Neither this Agreement nor anything contained
            herein shall be admissible in any proceeding as evidence of or an
            admission by any Party of any wrongdoing, liability or violation of
            any law or regulation within the jurisdictoin of England and Wales
            or of the state of California. This Agreement may be introduced into
            a legal proceeding solely for the purpose of enforcing this
            Agreement and the provisions hereof.

            (c) Covenant Not to Sue, No Prior Assignment. the Company and the
            Consultant represents and warrants that neither of them have
            heretofore assigned or transferred to any person or entity any
            rights he has or matter released herein, including but not limited
            to Consultant's rights and interests in and to compensation or
            expense reimbursement. The Parties further agree that as of the date
            hereof the effectiveness of Releases with respect to the Released
            matters in this clause above shall become irrevocable. The Parties
            hereby covenant and agree that they will forever refrain and
            forebear from commencing, instituting or prosecuting any lawsuit,
            action or other proceeding against the other arising out of, or in
            connection with any of the matters released in this Agreement.

         19. Miscellaneous. No waiver of any of the provisions of this Agreement
         shall be deemed or shall constitute a waiver of any other provision and
         no waiver shall constitute a continuing waiver. No waiver shall be
         binding unless executed in writing by the party making the waiver. No
         supplement, modification, or amendment of this Agreement shall be
         binding unless executed in writing by all parties. This Agreement
         constitutes the entire agreement between the parties and supersedes any
         prior agreements or negotiations with respect to the subject matter
         hereof. This Agreement may be executed in counterparts, and all
         counterparts will be considered as part of one agreement binding on all
         parties to this Agreement. This Agreement may be executed via
         facsimile, which signatures shall be deemed legal and binding as an
         original signature hereto.

                                       5
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
on the date first written above.

                                            "Consultant"
                                            DAVID LANDAUER

                                            Signature: /s/ David Landauer
                                                       ------------------
                                            "REUADNAL"

                                            Signature /s/ David Landauer
                                                      ------------------

                                            "Company"

                                            AVENUE GROUP, INC.

                                            Signature: /s/ Levi Mochkin
                                                       ----------------
                                            Name:    Levi Mochkin
                                            Title:   President and CEO

                                       6

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