Document:

exv4w1

 

Exhibit 4.1

Stock Option Plan of Genoil Inc., as amended October 25, 2001 and January 13,
2003

 

 

GENOIL INC.

STOCK OPTION PLAN

as amended October 25, 2001

and January 13, 2003

ARTICLE I

PURPOSE OF PLAN

1.1 The purpose of the Plan is to attract, retain and motivate persons as
directors, officers, key employees and consultants of the Corporation and its
Subsidiaries and to advance the interests of the Corporation by providing such
persons with the opportunity, through share options, to acquire an increased
proprietary interest in the Corporation.

ARTICLE II

DEFINED TERMS

     Where used herein, the following terms shall have the following meanings,
respectively:

2.1 “Board” means the board of directors of the Corporation or, if established
and duly authorized to act, the Executive Committee or another Committee
appointed for such purpose by the board of directors of the Corporation;

2.2 “Business Day” means any day, other than a Saturday or a Sunday, on which
the Exchange is open for trading;

2.3 “Consultant” means an individual (including an individual whose services
are contracted through a personal holding corporation) with whom the
Corporation or any Subsidiary has a contract for substantial services;

2.4 “Corporation” means GENOIL INC. and includes any successor corporation
thereto;

2.5 “Eligible Person” means any director, officer, employee (part-time or
full-time) or Consultant of the Corporation or any Subsidiary;

2.6 “Exchange” means The Toronto Stock Exchange and, where the context permits,
any other exchange on which the Shares are or may be listed from time;

2.7 “Insider” means:

	 	(a)	 	an Insider as defined under Section 1(1) of the Securities
Act (Ontario), other than a person who falls within that definition
solely by virtue of being a director or senior officer of a
Subsidiary; and

 

 

	 	(b)	 	an associate as defined under Section 1(1) of the Securities
Act (Ontario) of any person who is an insider by virtue of (i)
above;

2.8 “Market Price” at any date in respect of the Shares shall be the greatest
closing price of such Shares on any Exchange on the last Business Day preceding
the date on which the Option is approved by the Board (or, if such Shares are
not then listed and posted for trading on the Exchange, on such stock exchange
in Canada on which the Shares are listed and posted for trading as may be
selected for such purpose by the Board). In the event that such Shares did not
trade on such Business Day, the Market Price shall be the average of the bid
and ask prices in respect of such Shares at the close of trading on such date.
In the event that such Shares are not listed and posted for trading on any
stock exchange, the Market Price shall be the fair market value of such Shares
as determined by the Board in its sole discretion;

2.9 “Option” means an option to purchase Shares granted under the Plan;

2.10 “Option Price” means the price per Share at which Shares may be purchased
under the Option, as the same may be adjusted from time to time in accordance
with Article 8;

2.11 “Optionee” means an Eligible Person to whom an Option has been granted;

2.12 “Outstanding Issue” means the number of Shares outstanding on a
non-diluted basis, determined on the basis of the number of shares that are
outstanding immediately prior to the share issuance under Article 5 herein,
excluding shares issued pursuant to share compensation arrangements over the
preceding one-year period;

2.13 “Person” means an individual, a corporation, a partnership, an
unincorporated association or organization, a trust, a government or department
or agency thereof and the heirs, executors, administrators or other legal
representatives of an individual and an associate or affiliate of any thereof
as such terms are defined in the Business Corporations Act (Alberta);

2.14 “Plan” means the GENOIL INC. Share Option Plan, as the same may be amended
or varied from time to time;

2.15 “Share Compensation Arrangement” means any stock option, stock option
plan, employee stock purchase plan or any other compensation or incentive
mechanism involving the issuance or potential issuance of Shares, including a
share purchase from treasury which is financially assisted by the Corporation
by way of a loan, guarantee or otherwise;

2.16 “Shares” means the common shares of the Corporation or, in the event of an
adjustment contemplated by Article 8, such other shares or securities to which
an Optionee may be entitled upon the exercise of an Option as a result of such
adjustment; and

2.17 “Subsidiary” means any corporation which is a subsidiary as such term is
defined in section 4 of the Business Corporations Act (Alberta) (as such
provision is from time to time amended, varied or re-enacted) of the
Corporation.

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ARTICLE III

ADMINISTRATION OF THE PLAN

3.1 The Plan shall be administered in accordance with the rules and policies of
the Exchange in respect of employee stock option plans by the Board. The Board
shall receive recommendations of management and shall determine and designate
from time to time those directors, officers, employees and Consultants of the
Corporation or its Subsidiaries to whom an Option should be granted and the
number of Shares, which will be optioned from time to time to any individual
and the terms and conditions of the grant.

3.2 The Board shall have the power, where consistent with the general purpose
and intent of the Plan and subject to the specific provisions of the Plan:

	 	(a)	 	to establish policies and to adopt, prescribe, amend or vary
rules and regulations for carrying out the purposes, provisions and
administration of the Plan and make all other determinations
necessary or advisable for its administration;

	 	(b)	 	to interpret and construe the Plan and to determine all
questions arising out of the Plan and any Option granted pursuant to
the Plan and any such interpretation, construction or determination
made by the Board shall be final, binding and conclusive for all
purposes;

	 	(c)	 	to determine which Eligible Persons are granted Options and
to grant Options;

	 	(d)	 	to determine the number of Shares covered by each Option;

	 	(e)	 	to determine the Option Price;

	 	(f)	 	to determine the time or times when Options will be granted
and exercisable;

	 	(g)	 	to determine if the Shares which are subject to an Option
will be subject to any restrictions upon the exercise of such
Option; and

	 	(h)	 	to prescribe the form of the instruments relating to the
grant, exercise and other terms of Options which initially shall be
substantially in the form annexed hereto as Schedule “A”.

ARTICLE IV

SHARES SUBJECT TO THE PLAN

4.1 Options may be granted in respect of authorized and unissued Shares
provided that, subject to increase by the Board, the receipt of the approval of
the Exchange and the approval of shareholders of the Corporation, the maximum
aggregate number of Shares reserved by the Corporation for issuance and which
may be purchased upon the exercise of all Options shall equal 19,000,000 Shares
in respect of which Options are not exercised shall be available for subsequent
Options under the Plan. No fractional Shares may be purchased or issued under
the Plan.

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ARTICLE V

ELIGIBILITY; GRANT; TERMS OF OPTIONS

5.1 Options may be granted to Eligible Persons.

5.2 Options may be granted by the Corporation pursuant to the recommendations
of the Board from time to time provided and to the extent that such decisions
are approved by the Board.

5.3 Subject to the provisions of this Plan, the number of Shares subject to
each Option, the Option Price, the expiration date of each Option, the extent
to which each Option is exercisable from time to time during the term of the
Option and other terms and conditions relating to each such Option shall be
determined by the Board. At no time shall the period during which an Option
shall be exercisable exceed 10 years.

5.4 In the event that no specific determination is made by the Board with
respect to the following matter, the period during which an Option shall,
subject to any other specific provisions of the Plan, be exercisable shall be
five years from the date the Option is granted to the Optionee.

5.5 The Option Price of Shares which are the subject of any Option shall in no
circumstances be lower than the Market Price of the Shares at the date of the
grant of the Option.

5.6 The maximum number of Shares which may be reserved for issuance to any one
Optionee under this Plan or under any other Share Compensation Arrangement
shall not exceed 5% of the Outstanding Issue.

5.7 The maximum number of Shares which may be reserved for issuance to Insiders
under the Plan or under any other Share Compensation Arrangement shall be 10%
of the Outstanding Issue.

5.8 The maximum number of Shares which may be issued to any one Insider and
such Insider’s associates under the Plan and any other Share Compensation
Arrangement in any 12 month period shall be 5% of the Outstanding Issue. The
maximum number of Shares which may be issued to any Insiders under the Plan and
any other Share Compensation Arrangement in any 12 month period shall be 10% of
the Outstanding Issue.

5.9 Any entitlement to acquire Shares granted pursuant to the Plan or any other
Share Compensation Arrangement prior to the Optionee becoming an Insider shall
be excluded for the purposes of the limits set out in 5.7 and 5.8 above.

5.10 An Option is personal to the Optionee and is non-assignable.

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ARTICLE VI

EXERCISE OF OPTIONS

6.1 Subject to the provisions of the Plan, an Option may be exercised from time
to time by delivery to the Corporation at its registered office of a written
notice of exercise addressed to the
Secretary of the Corporation specifying the number of Shares with respect to
which the Option is being exercised and accompanied by payment in full of the
Option Price of the Shares to be purchased. Certificates for such Shares shall
be issued and delivered to the Optionee within a reasonable period of time
following the receipt of such notice and payment.

6.2 Notwithstanding any of the provisions contained in the Plan or in any
Option, the Corporation’s obligation to issue Shares to an Optionee pursuant to
the exercise of an Option shall be subject to:

	 	(a)	 	completion of such registration or other qualification of
such Shares or obtaining approval of such governmental or regulatory
authority as counsel to the Corporation shall reasonably determine
to be necessary or advisable in connection with the authorization,
issuance or sale thereof;

	 	(b)	 	the listing of such Shares on the Exchange, if applicable;
and

	 	(c)	 	the receipt from the Optionee of such representations,
agreements and undertakings, including as to future dealings in such
Shares, as the Corporation or its counsel reasonably determines to
be necessary or advisable in order to safeguard against the
violation of the securities laws of any jurisdiction.

     In this connection the Corporation shall, to the extent necessary, take
all reasonable steps to obtain such approvals, registrations and qualifications
as may be necessary for the issuance of such Shares in compliance with
applicable securities laws and for the listing of such Shares on the Exchange.

ARTICLE VII

TERMINATION OF EMPLOYMENT; DEATH

7.1 Subject to Section 7.2 and any express resolution passed by the Board with
respect to an Option, an Option, and all rights to purchase pursuant thereto,
shall expire and terminate immediately upon the Optionee ceasing to be a
director, officer or a part-time or full-time employee of the Corporation or of
any Subsidiary. The entitlement of a Consultant to Options including the
termination thereof shall be in accordance with the terms of the consulting
agreement entered into between the Corporation or the Subsidiary and the
Consultant but will not exceed 90 days after termination of the contract.

7.2 If, before the expiry of an Option in accordance with the terms thereof,
the employment of the Optionee with the Corporation or with any Subsidiary
shall terminate, in either case by reason of the death of the Optionee, such
Option may, subject to the terms thereof and any other terms of the Plan, be
exercised by the legal representative(s) of the estate of the Optionee at any
time during the first six months following the death of the Optionee (but prior
to the expiry of the

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Option in accordance with the terms thereof) but only to
the extent that the Optionee was entitled to exercise such Option at the date
of the termination of his employment.

7.3 Options shall not be affected by any change of employment of the Optionee
or by the Optionee ceasing to be a director where the Optionee continues to be
employed by the Corporation or continues to be a director or officer of, the
Corporation or any Subsidiary.

ARTICLE VIII

CHANGE IN CONTROL AND CERTAIN ADJUSTMENTS

8.1 Notwithstanding any other provision of this Plan in the event that the
Corporation receives an offer (the “Offer”) for:

	 	(a)	 	the acquisition by any Person of Shares or rights or options
to acquire Shares of the Corporation or securities which are
convertible into Shares of the Corporation or any combination
thereof such that after the completion of such acquisition such
Person would be entitled to exercise 30% or more of the votes
entitled to be cast at a meeting of the shareholders; or

	 	(b)	 	the sale by the Corporation of all or substantially all of
the property or assets of the Corporation;

then notwithstanding that at the effective time of the Offer the Optionee may
not be entitled to all the Shares granted by the Option, the Optionee shall be
entitled to exercise the Options to the full amount of the Shares remaining at
that time from the date of the Offer to the date of the close of any such
transaction. If such transaction is not completed within 90 days of the date of
the Offer and the Optionee has not so exercised that portion of the Option
relating to Shares to which the Optionee would not otherwise be entitled, this
provision shall cease to apply to the Offer.

8.2 Appropriate adjustments with respect to Options granted or to be granted,
in the number of Shares optioned and in the Option Price, shall be made by the
Board to give effect to adjustments in the number of Shares of the Corporation
resulting from subdivisions, consolidations or reclassifications of the Shares
of the Corporation, the payment of stock dividends or cash dividends by the
Corporation (other than dividends in the ordinary course), the distribution of
securities, property or assets by way of dividend or otherwise (other than
dividends in the ordinary course), or other relevant changes in the capital
stock of the Corporation or the amalgamation or merger of the Corporation with
or into any other entity, subsequent to the approval of the Plan by the Board.
The appropriate adjustment in any particular circumstance shall be conclusively
determined by the Board in its sole discretion, subject to approval by the
Shareholders of the Corporation and to acceptance by the Exchange respectively,
if applicable.

ARTICLE IX

AMENDMENT OR DISCONTINUANCE OF PLAN

9.1 The Board may amend or discontinue the Plan at any time upon receipt of
requisite regulatory approval including without limitation, the approval of the
Exchange, provided,

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however, that no such amendment may, without the consent of
the shareholders, increase the maximum number of Shares that may be optioned
under the Plan, change the manner of determining the minimum Option Price,
reduce the Option Price for Options granted to Insiders or, without the consent
of the Optionee, alter or impair any of the terms of any Option previously
granted to an Optionee under the Plan. Any amendments to the terms of an Option
shall also require regulatory approval, including without limitation, the
approval of the Exchange.

ARTICLE X

MISCELLANEOUS PROVISIONS

10.1 The holder of an Option shall not have any rights as a shareholder of the
Corporation with respect to any of the Shares covered by such Option until such
holder shall have exercised such Option in accordance with the terms of the
Plan (including tendering payment in full of the Option Price of the Shares in
respect of which the Option is being exercised) and the issuance of Shares by
the Corporation.

10.2 Nothing in the Plan or any Option shall confer upon an Optionee any right
to continue in the employ of the Corporation or any Subsidiary or affect in any
way the right of the Corporation or any Subsidiary to terminate his employment
at any time; nor shall anything in the Plan or any Option be deemed or
construed to constitute an agreement, or an expression of intent, on the part
of the Corporation or any Subsidiary to extend the employment of any Optionee
beyond the time which he would normally be retired pursuant to the provisions
of any present or future retirement plan of the Corporation or any Subsidiary
or any present or future retirement plan of the Corporation or any Subsidiary,
or beyond the time at which he would otherwise be retired pursuant to the
provisions of any contract of employment with the Corporation or any
Subsidiary.

10.3 To the extent required by law or regulatory policy or necessary to allow
Shares issued on exercise of an Option to be free of resale restrictions, the
Corporation shall report the grant, exercise or termination of the Option to
the Exchange and the appropriate securities regulatory authorities.

ARTICLE XI

SHAREHOLDER AND REGULATORY APPROVAL

11.1 The Plan shall be subject to the approval of the shareholders of the
Corporation to be given by a resolution passed at a meeting of the shareholders
of the Corporation in accordance with the Business Corporations Act (Alberta),
and to acceptance by the Exchange. Any Options granted prior to such approval
and acceptances shall be conditional upon such approval and acceptance being
given and no such Options may be exercised unless such approval and acceptance
is given.

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SCHEDULE “A” TO SHARE OPTION PLAN

CERTIFICATE OF GENOIL INC.

     GENOIL INC. (the “Corporation”), for good and valuable consideration,
hereby grants to the Optionee set forth below an Option to purchase common
shares of the Corporation. The Option shall be subject to the terms and
conditions set forth in the GENOIL INC. Share Option Plan, as the same may be
amended or replaced from time to time (the “Plan”), and in addition shall be
subject to the terms set forth below:

	 	 	 
	Optionee:
	 	 
	Position
with the Corporation 

	:	 
	Number of Shares

	:	 
	Option Price

	:	 
	Expiry Date of Option

	:	 
	Rights of Exercise

	:	 

     On the close of business on the Expiry Date, the Options granted will
expire and terminate and be of no further force and effect whatsoever as to the
Shares for which the Option hereby granted has not been exercised.

     Where used herein all defined terms shall have the respective meanings
attributed thereto in the Plan. As provided for under the Plan, the Option
provided for herein is not assignable to any other person. If you require a
copy of the Plan, please contact the Secretary of the Corporation and she will
provide a copy to you.

     DATED this 13th day of January, 2003.SPA with Langley Park Invts 7.15.04

	
 

 

 

 

 STOCK PURCHASE AGREEMENT

Between

GALAXY MINERALS, INC
and
LANGLEY PARK INVESTMENTS PLC

 

 

 

	

	
July 15th, 2004 

	

 

 

	 
	 	1	 
	

	 

 

TABLE OF CONTENTS

	
ARTICLE 
	
I
	
CERTAIN DEFINITIONS
	
1

	
1.1
	
 
	
Certain Definitions
	
1

	
 
	
 
	
 
	
 

	
ARTICLE 
	
II
	
PURCHASE AND SALE OF SHARES
	
4

	
2.1
	
 
	
Purchase and Sale; Purchase Price
	
4

	
2.2
	
 
	
Execution and Delivery of Documents; The Closing
	
5

	
 
	
 
	
 
	
 

	
ARTICLE
	
III
	
REPRESENTATIONS AND WARRANTIES
	
5

	
3.1
	
 
	
Representations, Warranties and Agreements of the Target Company
	
5

	
3.2
	
 
	
Representations and Warranties of Langley
	
8

	
 
	
 
	
 
	
 

	
ARTICLE 
	
IV
	
OTHER AGREEMENTS OF THE PARTIES
	
11

	
4.1
	
 
	
Manner of Offering
	
11

	
4.2
	
 
	
Notice of Certain Events
	
12

	
4.3
	
 
	
Blue Sky Laws
	
12

	
4.4
	
 
	
Integration
	
12

	
4.5
	
 
	
Furnishing of Rule 144(c) Materials
	
12

	
4.6
	
 
	
Solicitation Materials
	
12

	
4.7
	
 
	
Listing of Common Stock
	
13

	
4.8
	
 
	
Indemnification
	
13

	
4.9
	
 
	
Sale of Langley Shares
	
15

	
4.10
	
 
	
Lock Up by Langley
	
15

	
4.11
	
 
	
London Stock Exchange
	
15

	
 
	
 
	
 
	
 

	
ARTICLE
	
V
	
MISCELLANEOUS
	
15

	
5.1
	
 
	
Fee and Expenses
	
15

	
5.2
	
 
	
Entire Agreement
	
15

	
5.3
	
 
	
Notices
	
15

	
5.4
	
 
	
Amendments; Waivers
	
16

	
5.5
	
 
	
Headings
	
16

	
5.6
	
 
	
Successors and Assigns
	
16

	
5.7
	
 
	
No Third Party Beneficiaries
	
17

	
5.8
	
 
	
Governing Law; Venue; Service of Process
	
17

	
5.9
	
 
	
Survival
	
17

	
5.10
	
 
	
Counterpart Signatures
	
17

	
5.11
	
 
	
Publicity
	
17

	
5.12
	
 
	
Severability
	
17

	
5.13
	
 
	
Limitation of Remedies
	
17

	
 
	
 
	
 
	
 

 

	 
	 	2	 
	

	 

 

	
LIST OF SCHEDULES:
	
 

	
 
	
 

	
Schedule 3.1(a)
	
Subsidiaries

	
Schedule 3.1(c)
	
Capitalization and Registration Rights

	
Schedule 3.1(d)
	
Equity and Equity Equivalent Securities

	
Schedule 3.1(e)
	
Conflicts

	
Schedule 3.1(f)
	
Consents and Approvals

	
Schedule 3.1(g) 
	
Litigation

	
Schedule 3.1(h)
	
Defaults and Violations

 

	
LIST OF EXHIBITS:
	
 

	
 
	
 

	
Exhibit A
	
Escrow Agreement

	
Exhibit B
	
Officer’s Certificate

 

	 
	 	1	 
	

	 

 

    THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 15th, 2004, between Galaxy Minerals, Inc., a corporation organized and existing under the laws of the State of Florida (the “Target Company”), and Langley Park Investments PLC, a corporation organized under the laws of England and Wales with its offices at 30 Farringdon Street, London EC4A 4HJ ( “Langley”).

WHEREAS, subject to the terms and conditions set forth in this Agreement, the Target Company desires to issue and sell to Langley and Langley desires to acquire from the Target Company the shares of the Target Company’s common stock, par value $0.001 (“Common Stock”) for the Total Purchase Price. The consideration to be paid by Langley for the Common Stock shall be subject to certain downside price protection (the “Downside Price Protection”) provided in Section 2 of the Escrow Agreement.

 

IN CONSIDERATION of the mutual covenants contained in this Agreement, the Target Company and Langley agree as follows:

 

 

ARTICLE I
CERTAIN DEFINITIONS

1.1   Certain Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

“Affiliate” means, with respect to any Person, any Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

“Agreement” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Attorney-in-Fact” means Gottbetter & Partners, LLP, 488 Madison Avenue, 12 Floor, New York, NY 10022; Tel: 212-400-6900; Fax: 212-400-6901.

“Business Day” means any day except Saturday, Sunday, any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other government actions to close.

   

“Change of Control” means the acquisition, directly or indirectly, by any Person of ownership of, or the power to direct the exercise of voting power with respect to, a majority of the issued and outstanding voting shares of the Target Company.

 

“Closing” shall have the meaning set forth in Section 2.2(a) hereof.

 

	 
		1	 
	

	 

 

“Closing Bid Price” shall mean the closing bid price for a share of Common Stock on such date on the OTCBB (or such other exchange, market, or other system that the Common Stock is then traded on), as reported on Bloomberg, L.P. (or similar organization or agency succeeding to its functions of reporting prices).

“Closing Date” shall have the meaning set forth in Section 2.2(a) hereof.

“Closing Price” shall be the closing bid price of the Common Stock on the day of Closing.

“Common Stock” shall have the meaning in the recital.

“Consideration Stock” shall have the meaning set forth in Secion 2.1(a) hereof.

“Control Person” shall have the meaning set forth in Section 4.8(a) hereof.

“Default” means any event or condition which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“Disclosure Documents” means the Target Company’s reports filed under the Exchange Act with the SEC.

“Downside Price Protection” shall have the meaning in the recital.

“Escrow Agent” means Gottbetter & Partners, LLP, 488 Madison Avenue, 12 Floor, New York, NY 10022; Tel: 212-400-6900; Fax: 212-400-6901.

“Escrow Agreement” means the escrow agreement, dated the date hereof, by and among the Target Company, Langley and the Escrow Agent annexed hereto as Exhibit A.

“Event of Default” shall have the meaning set forth in Section 5.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Execution Date” means the date of this Agreement first written above.

“Indemnified Party” shall have the meaning set forth in Section 4.8(b) hereof.

“Indemnifying Party” shall have the meaning set forth in Section 4.8(b) hereof.

 

“G&P” means Gottbetter & Partners, LLP.

 

“Langley” shall have the meaning in the introductory paragraph.

 

 

	 
		2	 
	

	 

 

“Langley Consideration Shares” shall have the meaning in Section 2.1(c) hereof.

“Langley Escrow Shares” means the Langley Consideration Shares deposited into escrow by the Target Company under the terms of the Escrow Agreement in Exhibit A.

“Langley Protection Shares” means the Langley Escrow Shares that the Target Company is required to sell to Langley under the terms of the Escrow Agreement in Exhibit A.

“Langley Shares” shall mean ordinary shares of 1.0p each in Langley.

“Losses” shall have the meaning set forth in Section 4.8(a) hereof.

“Material” shall mean having a financial consequence in excess of $25,000.

“Material Adverse Effect” shall have the meaning set forth in Section 3.1(a).

“NASD” means the National Association of Securities Dealers, Inc.

“Nasdaq” shall mean the Nasdaq Stock Market, Inc.®

 

“OTCBB” shall mean the NASD over-the counter Bulletin Board®.

“Per Share Market Value” of the Common Stock means on any particular date (a) the last sale price of shares of Common Stock on such date or, if no such sale takes place on such date, the last sale price on the most recent prior date, in each case as officially reported on the principal national securities exchange on which the Common Stock is then listed or admitted to trading, or (b) if the Common Stock is not then listed or admitted to trading on any national securities exchange, the closing bid price per share as reported by Nasdaq, or (c) if the Common Stock is not then listed or admitted to trading on the Nasdaq, the closing bid price per share of the Common Stock on such date as reported on the OTCBB or if there is no such price on such date, then the last bid price on the date nearest preceding such date, or (d) if the Common Stock is not quoted on the OTCBB, the closing bid price for a share of Common Stock on such date in the over-the-counter market as reported by the Pinksheets LLC (or similar organization or agency succeeding to its functions of reporting prices) or if there is no such price on such date, then the last bid price on the date nearest preceding such date, or (e) if the Common Stock is no longer publicly traded, the fair market value of a share of the Common Stock as determined by an appraiser selected in good faith by Langley and the Target Company.

“Person” means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

 

	 
		3	 
	

	 

 

“Reporting Issuer” means a company that is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act.

“Required Approvals” shall have the meaning set forth in Section 3.1(f).

“Securities” means the Common Stock and stock of any other class into which such shares may hereafter have been reclassified or changed.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Subsidiaries” shall have the meaning set forth in Section 3.1(a).

“Target Company” shall have the meaning set forth in the introductory paragraph.

“Total Purchase Price” shall have the meaning in the recital.

“Trading Day” means (a) a day on which the Common Stock is quoted on Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock has been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or any stock exchange, a day on which the Common Stock is quoted in the over-the-counter market, as reported by the Pinksheets LLC (or any similar organization or agency succeeding its functions of reporting prices).

“Transaction Documents” means this Agreement and all exhibits and schedules hereto and all other documents, instruments and writings required pursuant to this Agreement.

“U.S.” means the United States.

 

ARTICLE II
PURCHASE AND SALE OF SHARES 

2.1   Purchase and Sale; Purchase Price.

(a) Subject to the terms and conditions set forth herein, the Target Company shall issue and sell and Langley shall purchase 31,578,950 (thirty-one million five hundred & seventy eight thousand nine hundred & fifty ) shares of the Target Company’s Common Stock (the “Consideration Stock”).

(b) The total purchase price (the “Total Purchase Price”) shall be the number of shares of Consideration Stock multiplied by the Closing Bid Price per share of Common Stock on July 14th 2004 of “$0.38” 

 

(c) The Total Purchase Price shall be paid by delivery to the Target Company of the number of Langley Shares (the “Langley Consideration Shares”) equal to the Total Purchase Price divided by the conversion rate of the British Pound Sterling to purchase US Dollars determined below on the July 30, 2004. The Langley Shares shall have a value of £1 per share. The number of Langley Shares to be issued will be based on the conversion rate of the British Pound Sterling to the US Dollar in effect as of the close of business on the day preceding the closing of the transaction, as quoted by Coutts & Co. as the commercial rate it gives to purchase US Dollars. For example, if the effective conversion rate is $1.80/£ 1 and the Total Purchase Price is $8,000,000, then the number of Langley Shares the Target Company will receive shall equal the $8,000,000/$1.80, or 4,444,444 Langley Shares. The Langley Consideration Shares shall be subject to the “Downside Price Protection” provided in Section 2 of the Escrow Agreement.

 

 

	 
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2.2   Execution and Delivery of Documents; The Closing.

 

(a)   The Closing of the purchase and sale of the shares of Consideration Stock (the “Closing”) shall take place within sixty (60) days from the date hereof (the “Closing Date”). On the Closing Date,

 

(i)   the Target Company shall execute and deliver to the Escrow Agent a certificate in the name of Langley representing shares of Consideration Stock;

 

(ii)   the Target Company shall execute and deliver to Langley a certificate of its President, in the form of Exhibit B annexed hereto, certifying that attached thereto is a copy of resolutions duly adopted by the Board of Directors of the Target Company authorizing the Target Company to execute and deliver the Transaction Documents and to enter into the transactions contemplated thereby;

 

(iii)    the Target Company, Langley and the Escrow Agent shall execute and deliver to each other the Escrow Agreement;

 

(iv)    Langley shall deliver the Langley Consideration Shares to the Escrow Agent; and

 

(v)   the Target Company shall wire the monies owed to G&P pursuant to Section 5.1 hereof for legal fees with the following wire instructions:

Citibank, N.A.

488 Madison Avenue

New York, NY
   ABA Routing No.: 021000089
   Account Name: Gottbetter & Partners, LLP
   Account No. 49061322

Reference: Galaxy Minerals, Inc.

 

 

	 
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ARTICLE III
REPRESENTATIONS AND WARRANTIES

3.1   Representations, Warranties and Agreements of the Target Company. The Target Company hereby makes the following representations and warranties to Langley, all of which shall survive the Closing:

 

(a)   Organization and Qualification. The Target Company is a corporation, duly incorporated, validly existing and in good standing under the laws of the State of Florida, with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Target Company has no subsidiaries other than as set forth on Schedule 3.1(a) attached hereto (collectively, the “Subsidiaries”). Each of the Subsidiaries is a corporation, duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with the full corporate power and authority to own and use its properties and assets and to carry on its business as currently conducted. Each of the Target Company and the Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not, individually or in the aggregate, have a material adverse effect on the results of operations, assets, prospects, or financial condition of the Target Company and the Subsidiaries, taken as a whole (a “Material Adverse Effect”).

 

(b)   Authorization, Enforcement. The Target Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated hereby and by each other Transaction Document and to otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Target Company and the consummation by it of the transactions contemplated hereby and thereby has been duly authorized by all necessary action on the part of the Target Company. Each of this Agreement and each of the other Transaction Documents has been or will be duly executed by the Target Company and when delivered in accordance with the terms hereof or thereof will constitute the valid and binding obligation of the Target Company enforceable against the Target Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(c)   Capitalization. The authorized, issued and outstanding capital stock of the Company is set forth on Schedule 3.1(c). No shares of Common Stock are entitled to preemptive or similar rights, nor is any holder of the Common Stock entitled to preemptive or similar rights arising out of any agreement or understanding with the Target Company by virtue of this Agreement. Except as disclosed in Schedule 3.1(c), there are no outstanding options, warrants, script, rights to subscribe to, registration rights, calls or commitments of any character whatsoever relating to securities, rights or obligations convertible into or exchangeable for, or giving any person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings, or arrangements by which the Target Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Neither the Target Company nor any Subsidiary is in violation of any of the provisions of its Certificate of Incorporation, bylaws or other charter documents.

 

 

	 
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(d)   Issuance of Securities. The shares of Consideration Stock have been duly and validly authorized for issuance, offer and sale pursuant to this Agreement and, when issued and delivered as provided hereunder against payment in accordance with the terms hereof, shall be valid and binding obligations of the Target Company enforceable in accordance with their respective terms. 

 

(e)   No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Target Company and the consummation by the Target Company of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of its Certificate of Incorporation or bylaws (each as amended through the date hereof) or (ii) be subject to obtaining any consents except those referred to in Section 3.1(f), conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Target Company is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Target Company or its Subsidiaries is subject (including, but not limited to, those of other countries and the federal and state securities laws and regulations), or by which any property or asset of the Target Company or its Subsidiaries is bound or affected, except in the case of clause (ii), such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. The business of the Target Company and its Subsidiaries is not being conducted in violation of any law, ordinance or regulation of any governmental authority.

 

(f)   Consents and Approvals. Except as specifically set forth in Schedule 3.1(f), neither the Target Company nor any Subsidiary is required to obtain any consent, waiver, authorization or order of, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Target Company of this Agreement and each of the other Transaction Documents (together with the consents, waivers, authorizations, orders, notices and filings referred to in Schedule 3.1(f), the “Required Approvals”).

 

(g)   Litigation; Proceedings. Except as specifically disclosed in Schedule 3.1(g), there is no action, suit, notice of violation, proceeding or investigation pending or, to the best knowledge of the Target Company, threatened against or affecting the Target Company or any of its Subsidiaries or any of their respective properties before or by any court, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) which (i) relates to or challenges the legality, validity or enforceability of any of the Transaction Documents or the shares of Consideration Stock, (ii) could, individually or in the aggregate, have a Material Adverse Effect or (iii) could, individually or in the aggregate, materially impair the ability of the Target Company to perform fully on a timely basis its obligations under the Transaction Documents.

 

 

	 
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(h)   No Default or Violation. Except as set forth in Schedule 3.1(h) hereto, neither the Target Company nor any Subsidiary (i) is in default under or in vio­lation of any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound, except such conflicts or defaults as do not have a Material Adverse Effect, (ii) is in violation of any order of any court, arbitrator or governmental body, except for such violations as do not have a Material Adverse Effect, or (iii) is in violation of any statute, rule or regu­lation of any governmental authority which could (individually or in the aggregate) (a) adversely affect the legality, validity or enforceability of this Agree­ment, (b) have a Material Adverse Effect or (c) adversely impair the Target Company’s ability or obligation to perform fully on a timely basis its obligations under this Agreement.

 

(i)   Disclosure Documents. The Disclosure Documents are accurate in all material respects and do not contain any untrue statement of material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

(j)   Non-Registered Offering. Neither the Target Company nor any Person acting on its behalf has taken or will take any action (including, without limitation, any offering of any securities of the Target Company under circumstances which would require the integration of such offering with the offering of the Securities under the Securities Act) which might subject the offering, issuance or sale of the Securities to the registration requirements of Section 5 of the Securities Act.

 

(k)   Placing Agent. The Target Company accepts and agrees that Dungarvon Associates, Inc. (“Dungarvon”) is acting for Langley and does not regard any person other than Langley as its customer in relation to this Agreement, and that it has not made any recommendation to the Target Company, in relation to this Agreement and is not advising the Target Company, with regard to the suitability or merits of the Langley Shares and in particular Dungarvon has no duties or responsibilities to the Target Company for the best execution of the transaction contemplated by this Agreement. 

 

(l)   Private Placement Representations. The Target Company (i) has received and carefully reviewed such information and documentation relating to Langley that the Target Company has requested, including, without limitation, Langley’s Confidential Private Offering Memorandum dated June 17, 2004; (ii) has had a reasonable opportunity to ask questions of and receive answers from Langley concerning the Langley Shares, and all such questions, if any, have been answered to the full satisfaction of the Target Company; (iii) has such knowledge and expertise in financial and business matters that it is capable of evaluating the merits and risks involved in an investment in the Langley Shares; (iii) understands that Langley has determined that the exemption from the registration provisions of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(2) of the Securities Act is applicable to the offer and sale of the Langley Shares, based, in part, upon the representations, warranties and agreements made by the Target Company herein; and (iv) except as provided herein and in the Private Placement Memorandum, dated June 17, 2004, no representations or warranties have been made to the Target Company by Langley or any agent, employee or affiliate of Langley and in entering into this transaction the Target Company is not relying upon any information, other than the results of independent investigation by the Target Company.

 

 

	 
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Langley acknowledges and agrees that the Target Company makes no representation or warranty with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.1 hereof.

 

3.2   Representations and Warranties of Langley. Langley hereby represents and warrants to the Target Company as follows: 

 

(a)   Organization; Authority. Langley is a corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation with the requisite power and authority to enter into and to consummate the transactions contemplated hereby and by the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The acquisition of the shares of Consideration Stock to be purchased by Langley hereunder has been duly authorized by all necessary action on the part of Langley. This Agreement has been duly executed and delivered by Langley and constitutes the valid and legally binding obligation of Langley, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to, or affecting generally the enforcement of, creditors rights and remedies or by other general principles of equity.

 

(b)   Investment Intent. Langley is acquiring the shares of Consideration Stock to be purchased by it hereunder, for its own account for investment purposes only and not with a view to or for distributing or reselling such shares of Consideration Stock, or any part thereof or interest therein, without prejudice, however, to Langley’s right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such shares of Consideration Stock in compliance with applicable federal and state securities laws. 

 

(c)   Experience of Langley. Langley, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of an investment in the shares of Consideration Stock to be acquired by it hereunder, and has so evaluated the merits and risks of such investment.

 

 

	 
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(d)   Ability of Langley to Bear Risk of Investment. Langley is able to bear the economic risk of an investment in the Securities to be acquired by it hereunder and, at the pre­sent time, is able to afford a complete loss of such investment.

 

(e)   Access to Information. Langley acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Target Company concerning the terms and conditions of the Securities offered hereunder and the merits and risks of investing in such securities; (ii) access to information about the Target Company and the Target Company’s financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment in the Securities; and (iii) the opportunity to obtain such additional information which the Target Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment and to verify the accuracy and completeness of the information that it has received about the Target Company.

 

(f)   Reliance. Langley understands and acknowledges that (i) the shares of Consideration Stock being offered and sold to it hereunder are being offered and sold without registration under the Securities Act in a private placement that is exempt from the registration provisions of the Securities Act under Section 4(2) of the Securities Act and (ii) the availability of such exemption depends in part on, and that the Target Company will rely upon the accuracy and truthfulness of, the foregoing representations and Langley hereby consents to such reliance.

 

(g)   Regulation S. Langley understand and acknowledge that (A) the shares of Consideration Stock have not been registered under the Securities Act, are being sold in reliance upon an exemption from registration afforded by Regulation S; and that such shares of Consideration Stock have not been registered with any state securities commission or authority; (B) pursuant to the requirements of Regulation S, the shares of Consideration Stock may not be transferred, sold or otherwise exchanged unless in compliance with the provisions of Regulation S and/or pursuant to registration under the Securities Act, or pursuant to an available exemption hereunder; and (C) Langley is under no obligation to register the shares of Consideration Stock under the Securities Act or any state securities law, or to take any action to make any exemption from any such registration provisions available.

(h)    Neither Langley nor any of its affiliates, directors or officers shall either for its own account or procure others to engage in the manipulation of the Target Company’s stock price before the expiry of the Escrow Agreement.

 

Langley is not a U.S. person and is not acquiring the shares of Consideration Stock for the account of any U.S. person; (B) no director or executive officer of Langley is a national or citizen of the United States; and (C) it is not otherwise deemed to be a “U.S. Person” within the meaning of Regulation S.

 

 

	 
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Langley was not formed specifically for the purpose of acquiring the shares of Consideration Stock purchased pursuant to this Agreement.

Langley is purchasing the shares of Consideration Stock for its own account and risk and not for the account or benefit of a U.S. Person as defined in Regulation S and no other person has any interest in or participation in the shares of Consideration Stock or any right, option, security interest, pledge or other interest in or to the shares of Consideration Stock. Langley understands, acknowledges and agrees that it must bear the economic risk of its investment in the shares of Consideration Stock for an indefinite period of time and that prior to any such offer or sale, the Target Company may require, as a condition to effecting a transfer of the shares of Consideration Stock, an opinion of counsel, acceptable to the Target Company, as to the registration or exemption therefrom under the Securities Act and any state securities acts, if applicable.

Langley will, after the expiration of the Restricted Period, as set forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or otherwise transfer the shares of Consideration Stock only in accordance with Regulation S, or pursuant to an available exemption under the Securities Act and, in any case, in accordance with applicable state securities laws. The transactions contemplated by this Agreement have neither been pre-arranged with a purchaser who is in the U.S. or who is a U.S. Person, nor are they part of a plan or scheme to evade the registration provisions of the United States federal securities laws.

The offer leading to the sale evidenced hereby was made in an “offshore transaction.” For purposes of Regulation S, Langley understands that an “offshore transaction” as defined under Regulation S is any offer or sale not made to a person in the United States and either (A) at the time the buy order is originated, the purchaser is outside the United States, or the seller or any person acting on his behalf reasonably believes that the purchaser is outside the United States; or (B) for purposes of (1) Rule 903 of Regulation S, the transaction is executed in, or on or through a physical trading floor of an established foreign exchange that is located outside the United States or (2) Rule 904 of Regulation S, the transaction is executed in, on or through the facilities of a designated offshore securities market, and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the U.S.

Neither Langley nor any affiliate or any person acting on Langley’s behalf, has made or is aware of any “directed selling efforts” in the United States, which is defined in Regulation S to be any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the shares of Consideration Stock being purchased hereby.

Langley understands that the Target Company is the seller of the shares of Consideration Stock which are the subject of this Agreement, and that, for purpose of Regulation S, a “distributor” is any underwriter, dealer or other person who participates, pursuant to a contractual arrangement, in the distribution of securities offered or sold in reliance on Regulation S and that an “affiliate” is any partner, officer, director or any person directly or indirectly controlling, controlled by or under common control with any person in question. Langley agrees that Langley will not, during the Restricted Period set forth under Rule 903(b)(iii)(A), act as a distributor, either directly or though any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the shares of Consideration Stock other than to a non-U.S. Person. 

 

	 
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Langley acknowledges that the shares of Consideration Stock will bear a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN “OFFSHORE TRANSACTION” IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE SECURITIES AND EXCHANGE    COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.

 

The Target Company acknowledges and agrees that Langley makes no representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2.

 

ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES

4.1   Manner of Offering. The Securities are being issued pursuant to section 4(2) of the Securities Act and Regulation S thereunder. The Langley Consideration Shares are being issued pursuant to section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder.

 

4.2   Notice of Certain Events. The Target Company shall, on a continuing basis, (i) advise Langley promptly after obtaining knowledge of, and, if requested by Langley, confirm such advice in writing, of (A) the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of the shares of Consideration Stock, for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority, or (B) any event that makes any statement of a material fact made by the Target Company in Section 3.1 or in the Disclosure Documents untrue or that requires the making of any additions to or changes in Section 3.1 or in the Disclosure Documents in order to make the statements therein, in the light of the circumstances under which they are made, not misleading, (ii) use its best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption from qualification of the Securities under any state securities or Blue Sky laws, and (iii) if at any time any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Securities under any such laws, and use its best efforts to obtain the withdrawal or lifting of such order at the earliest possible time.

 

 

	 
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4.3   Blue Sky Laws. The Target Company agrees that it will execute all necessary documents and pay all necessary state filing or notice fees to enable the Target Company to sell the Securities to Langley.

 

4.4   Integration. The Target Company shall not and shall use its best efforts to ensure that no Affiliate shall sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to Langley.

 

4.5   Furnishing of Rule 144(c) Materials. The Target Company shall, for so long as any of the Securities remain outstanding and during any period in which the Target Company is not subject to Section 13 or 15(d) of the Exchange Act, make available to any registered holder of the Securities (“Holder” or “Holders”) in connection with any sale thereof and any prospective purchaser of such Securities from such Person, such information in accordance with Rule 144(c) promulgated under the Securities Act as is required to sell the Securities under Rule 144 promulgated under the Securities Act.

 

4.6   Solicitation Materials. The Target Company shall not (i) distribute any offering materials in connection with the offering and sale of the shares of Consideration Stock other than the Disclosure Documents and any amendments and supplements thereto prepared in compliance herewith or (ii) solicit any offer to buy or sell the shares of Consideration Stock by means of any form of general solicitation or advertising.

 

4.7   Listing of Common Stock. If the Common Stock is or shall become listed on the OTCBB or on another exchange, the Target Company shall (a) use its best efforts to maintain the listing of its Common Stock on the OTCBB or such other exchange on which the Common Stock is then listed until two years from the date hereof, and (b) shall provide to Langley evidence of such listing.

 

4.8   Indemnification.

 

(a)   Indemnification.

 

(i)   The Target Company shall, notwithstanding termination of this Agreement and without limitation as to time, indemnify and hold harmless Langley and its officers, directors, agents, employees and affiliates, each Person who controls or Langley (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each such Person, a “Control Person”) and the officers, directors, agents, employees and affiliates of each such Control Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of, or relating to, a breach or breaches of any representation, warranty, covenant or agreement by the Target Company under this Agreement or any other Transaction Document.

 

 

	 
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(ii)   Langley shall, notwithstanding termination of this Agreement and without limitation as to time, indemnify and hold harmless the Target Company, its officers, directors, agents and employees, each Control Person and the officers, directors, agents and employees of each Control Person, to the fullest extent permitted by application law, from and against any and all Losses, as incurred, arising out of, or relating to, a breach or breaches of any representation, warranty, covenant or agreement by Langley under this Agreement or the other Transaction Documents, except for Losses solely arising out of negligence, bad faith or breach of this Agreement.

 

(iii)    The Target Company and Langley acknowledge that in the SEC’s opinion, directors, officers and persons controlling a company subject to the Securities Act can not be indemnified for liabilities arising under the Securities Act by such company.

 

(b)   Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

 

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of the claim against the Indemnified Party but will retain the right to control the overall Proceedings out of which the claim arose and such counsel employed by the Indemnified Party shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

 

	 
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All fees and expenses of the Indemnified Party to which the Indemnified Party is entitled hereunder (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten (10) Business Days of written notice thereof to the Indemnifying Party.

 

No right of indemnification under this Section shall be available as to a particular Indemnified Party if the Indemnifying Party obtains a non-appealable final judicial determination that such Losses arise solely out of the negligence or bad faith of such Indemnified Party in performing the obligations of such Indemnified Party under this Agreement or a breach by such Indemnified Party of its obligations under this Agreement.

 

(c)   Contribution. If a claim for indemnification under this Section is unavailable to an Indemnified Party or is insufficient to hold such Indemnified Party harmless for any Losses in respect of which this Section would apply by its terms (other than by reason of exceptions provided in this Section), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative benefits received by the Indemnifying Party on the one hand and the Indemnified Party on the other and the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether there was a judicial determination that such Losses arise in part out of the negligence or bad faith of the Indemnified Party in performing the obligations of such Indemnified Party under this Agreement or the Indemnified Party’s breach of its obligations under this Agreement. The amount paid or payable by a party as a result of any Losses shall be deemed to include any attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party.

 

(d)   Non-Exclusivity. The indemnity and contribution agreements contained in this Section are in addition to any obligation or liability that the Indemnifying Parties may have to the Indemnified Parties.

 

4.9   Sale of Langley Consideration Shares. Langley shall assist the Target Company in setting up and maintaining a trading account at a registered broker in the United Kingdom to facilitate the sale of the Langley Consideration Shares. Broker’s commissions in the trading account shall not exceed one half percent (0.5%).

 

4.10   Lock Up by Langley. Langley shall not sell, transfer or assign all or any of the shares of Consideration Stock for a period of two (2) years following the Closing, without the written consent of the Target Company, which consent may be withheld in the Target Company’s sole discretion.

 

 

	 
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ARTICLE V
MISCELLANEOUS

5.1   Fees and Expenses. Except as set forth in this Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Target Company shall pay all stamp and other taxes and duties levied in connection with the issuance of the shares of Consideration Stock pursuant hereto. Langley shall be responsible for any taxes payable by Langley that may arise as a result of the investment hereunder or the transactions contemplated by this Agreement or any other Transaction Document. The Target Company agrees to pay a total Langley’s counsel $7,500 for legal fees associated with the transactions contemplated by this Agreement at Closing. The Target Company shall pay all costs, expenses, fees and all taxes incident to and in connection with: (A) the issuance and delivery of the Securities, (B) the exemption from registration of the Securities for offer and sale to Langley under the securities or Blue Sky laws of the applicable jurisdictions, and (C) the preparation of certificates for the Securities (including, without limitation, printing and engraving thereof), and (D) all fees and expenses of counsel and accountants of the Target Company.

 

5.2   Entire Agreement This Agreement, together with all of the Exhibits annexed hereto, and any other Transaction Document contains the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters. This Agreement shall be deemed to have been drafted and negotiated by both parties hereto and no presumptions as to interpretation, construction or enforceability shall be made by or against either party in such regard.

 

5.3   Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given upon facsimile transmission (with written transmission confirmation report) at the number designated below (if delivered on a Business Day during normal business hours where such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal business hours where such notice is to be received) whichever shall first occur. The addresses for such communications shall be:

 

	         If to the Target Company	 Galaxy Minerals, Inc.	 
	 	 500 Park Avenue, Suite 203	 
	 	 Lake Villa, IL 60046	 
	 	 Attn: President	 
	 	  Tel: (847) 265 7600	 
	 	  Fax: (847) 265 0995   	 

           

	 
		16	 
	

	 

 

  

        

	         With copies to:	 The Lebrecht Group, APLC	 
	 	 22342 Avenida Empressa	 
	 	 Suite 220	 
	 	 Rancho Santa Margarita	 
	 	 CA 92688	 
	 	 Attn: Brian A. Lebrecht	 
	 	 Tel: 949 635 1240	 
	 	 Fax: 949 635 1244	 
	 	 	 
	 	 	 
	         If to Langley:	Langley Park Investments PLc	 
	 	30 Farringdon Street	 
	 	London EC4A 4HJ	 
	 	Attn: Harry Pearl	 
	 	Tel: 44.207.569.0044	 
	 	Fax: 44.207.724.0090	 

 

	        With copies to:	Gottbetter & Partners, LLP	 
	 	488 Madison Ave. 12th Floor	 
	 	New York, New York 10022	 
	 	Attn: Adam S. Gottbetter, Esq.	 
	 	Tel: (212) 400-6900	 
	 	Fax: (212) 400-6901	 

 

or such other address as may be designated hereafter by notice given pursuant to the terms of this Section 5.3.

 

5.4   Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by both the Target Company and Langley, or, in the case of a waiver, by the party against whom enforce­ment of any such waiver is sought. No waiver of any default with respect to any provision, condition or require­ment of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

 

5.5   Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

5.6   Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. The assignment by a party of this Agreement or any rights hereunder shall not affect the obligations of such party under this Agreement.

 

5.7   No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

 

	 
		17	 
	

	 

 

5.8   Governing Law; Venue; Service of Process. The parties hereto acknowledge that the transactions contemplated by this Agreement and the exhibits hereto bear a reasonable relation to the State of New York. The parties hereto agree that the internal laws of the State of New York shall govern this Agreement and the exhibits hereto, including, but not limited to, all issues related to usury. Any action to enforce the terms of this Agreement or any of its exhibits, or any other Transaction Document shall be brought exclusively in the state and/or federal courts situated in the County and State of New York. If and only if New York declines jurisdiction within the State of New York, such action shall be brought in the State and County where the Target Company’s principle place of business is situated. Service of process in any action by Langley or the Target Company to enforce the terms of this Agreement may be made by serving a copy of the summons and complaint, in addition to any other relevant documents, by commercial overnight courier to the other party at its principal address set forth in this Agreement.

 

5.9   Survival. The representa­tions and warranties of the Target Company and Langley contained in Article III and the agreements and covenants of the parties contained in Article IV and this Article V shall survive the Closing.

 

5.10   Counterpart Signatures. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.

 

5.11   Publicity. The Target Company and Langley shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and neither party shall issue any such press release or otherwise make any such public statement without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed, unless counsel for the disclosing party deems such public statement to be required by applicable federal and/or state securities laws. Except as otherwise required by applicable law or regulation, the Target Company will not disclose to any third party (excluding its legal counsel, accountants and representatives) the names of Langley.

 

5.12   Severability. In case any one or more of the provisions of this Agreement shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision which shall be a reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

5.13   Limitation of Remedies. With respect to claims by the Target Company or any person acting by or through the Target Company, or by Langley or any person acting through Langley, for remedies at law or at equity relating to or arising out of a breach of this Agreement, liability, if any, shall, in no event, include loss of profits or incidental, indirect, exemplary, punitive, special or consequential damages of any kind.

 

 

	 
		18	 
	

	 

 

[ SIGNATURE PAGE FOLLOWS ]

 

 

	 
		19	 
	

	 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first indicated above.

                   

	
Target Company:

	
 

	
Galaxy Minerals, Inc.

	
 

	
 

	
 

	
By:   /s/ Richard N. Jobling                                                                              

	
Name: Richard N. Jobling

	
Title: President

	
 

	
 

	
 

	
 

	
Langley:

	
 

	
 

	
Dungarvon Associates, Inc. on behalf of Langley Park Investments Plc.

	
 

	
 

	
 

	
By:        /s/ name unknown                                                                              

	
Name:    ____________________________________________________

	
Title:      ____________________________________________________

 

	 
		20	 
	

	 

 

Schedule 3.1(a)

Subsidiaries

Yellow Jacket Finance Limited                                100%

Yellow Jacket Finance limited / Stealth Corporation Joint Venture            51%

	 
		21	 
	

	 

Schedule 3.1(c)

Capitalization and Registration Rights

	
Common Stock

	
Common Stock par value $0.001
	
250,067,500

	
 
	
 

	
Total
	
 

	
Options and Warrants

	
NIL

	
   

		22	 
	

	 

Schedule 3.1(d)

Equity and Equity Equivalent Securities

	
 
	
Authorized
	
Issued

		

	

	
 
	
 
	
 

	
Common Stock par value $0.001
	
500,000,000
	
250,067,500

	
 
	
 
	
 

	
 
	
 
	
 

	
Preferred Stock par value $0.001
	
10,000,000
	
Nil

 

	 
		23	 
	

	 

 

Schedule 3.1(e)

 

 

Conflicts

None 

 

 

 

	 
		24	 
	

	 

 

Schedule 3.1(f)

Consents and Approvals

None

 

	 
		25	 
	

	 

 

 

Schedule 3.1(g)

Litigation

The Company was informed that an action may have been filed in District Court against another company and that the Company may have been listed as a party under its former name, HeavenExpress.Com, Inc. The Company believes the action may have been filed on November 14, 2003, but that at no time since that date, has the Company been served with process nor to its knowledge has any effort been made to serve it with process. Pursuant to Federal Rule of Civil Procedure 4(m), since March 16, 2004, more than 120 days has passed since the filing of this action without the plaintiff ever attempting to serve the Company, the action is subject to being dismissed, and there has not been any effort by the plaintiff to seek to extend the time period within which to serve the Company.

In light of the foregoing, this action does not appear to constitute pending or threatened legal action against the Company at this point.

- The action was a spurious claim involving parties outside Galaxy. 

- The statutory 120 day time limit for service, expired some time ago, the 
Company has never received a summons or notice.

- The note above appears in the 10Q, because the Directors insisted it appear in the 10Q in accordance with our policy of transparency, and given the sometime litigious nature of the USA, it was felt pertinent.

- Galaxy has never been served.

- We do not for any moment believe the action or more correctly the non action will cause any material harm to Galaxy, it is for all intents and purposes a “Dead Issue” that we believed should have been mentioned as it was in our 10Q. and thus it was recorded.

 

	 
		26	 
	

	 

 

Schedule 3.1(h)

Defaults and Violations

None

 

 

	 
		27

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