This opinion constitutes my findings following a bench trial in this action involving Plaintiffs, AJW Partners, LLC, New Millennium Capital Partners II, LLC, AJW Offshore, Ltd. and AJW Qualified Partners, LLC (collectively "AJW") v. Defendants, Peak Entertainment Holdings, Inc. ("Peak"). AJW seeks specific performance of a stock put (the Put), and requests an order directing Peak to purchase AJW's 1,000,000 shares of Peak's stock at $.75 per share, pursuant to a Settlement Agreement and Release dated December 22, 2003 (the "Agreement").^[FN1] Additionally, AJW alleges that Peak breached its obligations under the Agreement and seeks a declaration that Peak is in breach of the Agreement. Finally, AJW seeks attorneys fees, pursuant to ¶14 of the Agreement.

The sole issue which was tried, as agreed by the parties, is whether Peak received a notice informing it that AJW wished to exercise put rights in accordance with the Agreement. All other facts are not disputed, as set forth in my February 21, 2006, opinion, denying both AJW's motion and Peak's cross-motion for summary judgment.

It is undisputed that Plaintiffs, AJW, are investment funds, maintaining offices in New York. Defendant, Peak, is a publicly traded Nevada Corporation. Also undisputed is that on December 22, 2003, the parties entered into the Agreement, under which AJW surrendered all securities, rights to receive additional securities and secured interest rights, pursuant to two previous March and April Securities Purchase Agreements between the parties. In exchange for such surrender of rights by AJW, Peak agreed to pay $1,000,000.00 and 1,000,000 shares of [*2]Peak's unregistered common stock. Paragraph 5 of the Agreement provides a put option for Plaintiffs, under the following terms:

Thirteen months after Closing, the Holders shall have the right to put the Holder's Common Stock [the unregistered shares] (as to the unsold balance of the 1,000,000 shares) to Peak at $.75 per share, on an all-or-none basis. The Holders shall provide Peak with written notice if they wish to exercise the put, which must be received by Peak after thirteen months and prior to one year and two months after the Closing, at the expiration of which, this put right terminates. Closing on the put shall occur within ten (10) business days from receipt of notice of the put. The put cannot be withdrawn by the Holders once exercised.^[FN2] (Settlement Agreement and Release, ¶5).

There is also no dispute that the "Closing"occurred on January 5, 2004. By the Agreement's plain and unambiguous language, in order to exercise the Put, AJW was required to provide Peak with a written notice that was received by Peak on or after February 6, 2005, but before March 6, 2005. Afterwards, the put right terminated.

AJW introduced documentary evidence showing that they sent a letter, dated January 10, 2005 (the "Letter"), to Peak at the address designated in the Agreement and by one of the methods of delivery specified in the Agreement. (Exhibit B to Plaintiff's Notice of Motion for Summary Judgment). The contents of the Letter, if it was received, are undisputed to have been sufficient to provide Peak with adequate notice that AJW intended to exercise its put right.

It is also not disputed that on or about January 24, 2005, Plaintiffs telecopied the put notice to Defendant, exercising the put for all 1,000,000 shares and that, on January 28, 2005, plaintiffs sent the put notice by registered mail addressed to Defendant's United Kingdom offices, at the address listed in the Agreement. What is disputed is whether Peak received this notice.

As proof that Peak received the notice within the requisite time period, Plaintiff introduced into evidence an e-mail message from Great Britain's postal service, the Royal Mail Group (the "Royal Mail") to AJW's counsel, dated September 26, 2005 and the deposition of Nicholas Lord ("Lord"), an employee of the Royal Mail. The e-mail was generated as a response to an inquiry made on the Royal Mail's Track and Trace system on the company's website ("Track & Trace"). Based on the registered mail number for the put notice, the Royal Mail advised that the package "was delivered and signed on 14 February [2005]." (Exhibit P-1 EVD 2/14/07.) Also received into evidence was a United States Postal Service receipt confirming the January 28, 2005 mailing.^[FN3]Peak's attorney, although preserving any hearsay objections, did not object to the admissibility of the e-mail or the Lord deposition. Rather, Peak claimed that this email did not prove that Peak actually received the notice, which, relying on the deposition [*3]of Phil Ogden ("Ogden"), a managing director at Peak, it claimed was never received.

At his deposition, Lord stated that, for registered mailings, the deliverer is responsible for obtaining a signature from "somebody at the intended address." He further testified that, with respect to a business, registered mail would more than likely be left with "the receptionist, or some sort of mail person." Lord testified that he did not know Harminder Jheeta, the Customer Services Advisor who sent the September 26, 2005 e-mail confirming delivery of the Letter, but explained that he led a team of Customer Services Advisors with similar responsibilities. He identified the e-mail as a specific response that would have been typed by the sender, as opposed to an automated response, and described responding to customer inquiries, by checking the Track and Trace system records and sending such a response, as part of the routine business of the Royal Mail. He also described the process by which delivery information was recorded on Track and Trace. When a Royal Mail officer returns to the delivery office, information from the delivery card, including date and time of delivery, is entered into Track and Trace. For registered mail sent from the US Postal Service, the USPS barcode number is included. Additionally, Lord testified that it was the Royal Mail's practice to destroy the hard copies of the signature cards and delete the electronic records relating thereto twelve months after delivery. On cross-examination, Lord was asked if, within the twelve months the Royal Mail retained records, the identity of the carrier who delivered the Letter and the identify of the person who signed for the Letter could have been obtained. Lord confirmed that the identity of the carrier could have been ascertained during that twelve months and also explained that, within that time, the sender could have obtained a free copy of the signature card.

Before going further, I need to resolve Peak's contention that, based on this latter testimony, I should apply an adverse inference that the information on the signature card, if produced, would have indicated that Peak did not receive the notice. It is Peak's argument that since AJW was the sole party in the position to obtain a copy of the signature, and because AJW neglected to do so while the information was available such adverse inference is appropriate, citing Residential Funding Corporation v. DeGeorge Financial Corp. (306 F.3d 99 [2d Cir. 2002]). For the reasons stated in the margin, I decline to impose the requested sanction.^[FN4] [*4]

Ogden, the managing director at Peak, described the Premises at the Bagshaw Building, the address at which the Agreement specified Peak was to receive correspondence. According to Ogden, the Bagshaw Building, the building which houses Peak's offices, was not labeled in a way that identified the portion of the building used as Peak's offices. Moreover, Ogden testified that Peak used approximately fifty percent of the premises and the other half was occupied by four other companies and some residential tenants.^[FN5]

Upon entering the building, one encounters a receptionist's desk. Peak did not employ a permanent receptionist and instead used the desk as a "hot desk," meaning that certain Peak employees, who sometimes did administrative work, sat at that desk when they were working in that capacity. Ogden further testified that the three employees who worked at the reception desk during the relevant time period are no longer with the company. This reception desk was usually occupied during Peak's regular business hours, which were between 9:00 a.m. and 5:00-5:30 p.m. He also stated that, while regular mail generally arrived between 9:00 to 10:00 a.m., there was no set time at which registered or overseas mail arrived, and that while it was possible registered mail could be delivered in the evening, he doubted that this would be done because "...it would be futile because there would be nobody there."

Ogden further stated that, if the receptionist desk was unoccupied when regular mail arrived, the mail was generally left outside reception or the offices of other tenants. If the reception desk was not manned when registered mail arrived, a delivery person would generally look for another person to sign for the package, although sometimes a person arriving at the empty reception area would leave the premises. Even though Peak typically closed its offices around 5:30 p.m, the directors and senior managers usually remained until later. Ogden did not recall any point at which he or certain co-workers encountered couriers or DHL representatives after normal business hours and testified that, to the best of his knowledge, deliveries of registered mail, ordinary mail and Federal Express or overnight packages were all made to Peak [*5]during ordinary business hours.Ogden also testified that there were occasions when the company had not received certain packages. When questioned about the Letter, Ogden recalled that he had received it in some form or other but did not recall when and stated that he received it only as a facsimile. It was his recollection that he had received the fax twice and understood that Mr. Shorrocks, another Peak employee, had also only received the document the two times Ogden gave it to him in facsimile form. (According to Ogden, the only Peak employees other than himself, who would have received the Letter during the first quarter of that year, were Mr. and Mrs Shorrocks.). He did not believe that anyone from Peak called the N.I.R. Group after receiving the fax or informed Corey Ribotsky, the manager and decision maker for the investment activities of each of the plaintiff investment funds, or anyone else at N.I.R. (which mailed the letter, f.n. 3, supra) prior to March 31, 2005, that Peak viewed AJW's correspondence as insufficient to exercise the Put because the letters did not comply with the time frames specified in the Agreement.^[FN6]

Based on the solely on the evidence received at trial, I am satisfied, by a preponderance of the credible evidence, that the Letter reached the Royal Mail and was then delivered to the address listed in the Agreement. I also find that this delivery occurred as the e-mail states, on February 14, 2005, within the specified time period. Moreover, even though the evidence does not identify who, if anyone at Bagshaw Hall received the Letter, it is more likely than not, that someone from Peak received the notice. This inference is not unreasonable, especially based upon the Royal Mail e-mail stating that the letter had been "received and signed." Further supporting this finding of receipt is that, initially Peak only contended only that the notice was not sent in compliance with the Agreement, and the first sworn statement from the Defendant, alleging non-receipt was at Ogden's deposition, which occurred November 2, 2006, after Lord had been deposed. To me, this demonstrates that Peak received the letter, and that the allegation of non-receipt was an afterthought, created when Peak learned that there was no actual evidence of its receipt of the letter.

Consequently, I find that Plaintiff has established, by a preponderance of the evidence that the notice was received by Defendant, as required by the Agreement.

Accordingly, it is ADJUDGED and DECLARED that Defendant is in breach of its obligations under the Settlement Agreement and Release, and the Defendant is DIRECTED to purchase Plaintiff's 1,000,000 shares of Peak's stock at $.75 per share, pursuant to the Agreement. I also conclude that Peak is entitled to reasonable attorneys fees, pursuant to paragraph 14 of the Agreement.

It is also ORDERED that the issue of attorney's fees is referred to a Special Referee to hear and report with recommendations, except that, in the event of and upon the filing of a stipulation of the parties, as permitted by C.P.L.R. § 4317, the Special Referee, or another person designated by the parties to serve as referee, shall determine the aforesaid issue; and, it is further [*6]

ORDERED that a copy of this order with notice of entry shall be served on the Special Referee Clerk (Room 119) to arrange a date for the reference to a Special Referee.

SO ORDERED:

Dated:_____________

ENTER

__________________________________

J.S.C.