AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is entered into as of this 14th
day of February, 2002 by and between WAVE POWER. NET, INC. (the "Company"), a
Delaware corporation, whose address is 000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx,
Xxxxxxx 00000, and 3 Strikes (USA), Inc. ("Three Strikes"), a New York
corporation, whose address is 00 Xxxxxxxx Xx., Xxxxxxxx, Xxxxxxxxxxx 00000.
RECITAL
A. The Company and Three Strikes desire to effect a Type B reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended, on
the terms and conditions set forth below, whereby the Company will acquire all
of the issued and outstanding shares of Three Strikes' common stock by issuing
solely in exchange therefore to Three Strikes' shareholders, shares of the
Company's Common Capital Stock (the "Company Stock").
NOW THEREFORE in consideration of the foregoing recitals, the mutual
representations, warranties and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
I. BASIC TRANSACTION.
1.1 Plan of Reorganization. Subject to the terms and conditions of this
Agreement and pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended, the parties to this Agreement shall effect a Type B
reorganization (the "Reorganization") whereby all of the outstanding shares of
Three Strikes' common stock will be exchanged for 20,000,000 post reverse split
shares of the Company's Common Stock. The Reorganization shall take place on
the Closing Date (hereinafter defined in Section 1.2 of this Agreement) and
shall be accomplished in accordance with Article V below.
1.2 Closing. The closing of the Reorganization and exchange contemplated
and provided for in this Agreement (the "Closing") shall take at a time and
place to be mutually agreed upon by the parties on the third business day
following the satisfaction or waiver or all conditions to the obligations of the
parties to consummate the subject reorganization and exchange (other than the
conditions with respect to actions the respective parties will take at the
Closing itself) or such other date as the parties may mutually determine (the
"Closing Date"). It is the parties intention to close this transaction as soon
as practicable, however, the Closing Date shall occur no later than March 1,
2002, absent regulatory delays or breach.
1.3 Terms of Exchange. On the Closing Date the Company shall:
a. Will issue ratably and cause to be delivered to the Three Strikes'
shareholders certificates or rights representing 100,000,000 pre-split shares or
its equivalent post reverse split shares of the Company's Common Capital Stock,
in consideration for the transfer to the Company by the Three Strikes'
shareholders of all the common shares of the capital stock of Three Strikes
issued and outstanding as of the Closing Date. No other shares of any
preference or type of Three Strikes shares are outstanding on the date of this
Agreement or shall be outstanding on the Closing Date; and
b. The parties agree that a 1:5 reverse stock split of the shares of the
Company shall occur on or after the closing inasmuch as the Company has only
75,000,000 shares authorized and pursuant to the Agreement of the Parties, Three
Strikes' shareholders are to receive the equivalent of 100,000,000 pre-reverse
split common shares which cannot be accomplished without shareholders approval
of a reverse stock split. Due to the time delay in obtaining shareholder
approval, the Company and Three Strikes are contemplating closing the
transaction by the issuance of all of the remaining authorized common stock,
which would provide Three Strikes with approximately 56,000,000 shares of common
stock or approximately 74% of the shares of the Company. The Company and its
principal shareholders have consented to the reverse stock split and the
issuance of additional shares of common stock to the Three Strikes' shareholders
to effectuate the post reverse split total of 20,000,000 shares to Three
Strikes' shareholders.
c. The Three Strikes' shareholders shall, in consideration for their
receipt of the shares of the Company's Common Capital Stock, transfer and
deliver to the Company certificates representing all of the issued and
outstanding shares of Three Strikes' common stock owned by them. The Company
shall receive good and marketable title to all of Three Strikes' issued and
outstanding common stock free and clear of all liens, mortgages, pledges,
claims or other rights or encumbrances whatever, whether disclosed or
undisclosed.
1.4 Restrictions on Transfer. The Company's Common Capital Stock, when
issued and delivered hereunder, shall not be registered under the Securities
Act of 1933, as amended, nor shall the Three Strikes' shareholders be granted
any registration rights as to such shares. Each certificate representing shares
of the Company's Common Capital Stock will bear a customary restrictive legend
which states in effect that such shares have not been registered under the
Securities Act of 1933 and consequently may not be transferred, assigned, sold
or hypothecated unless registered under the Securities Act of 1933 or, in the
opinion of Company's counsel, an exemption from the registration requirements of
the Securities Act of 1933 is available for such transaction.
II. REPRESENTATIONS AND WARRANTIES.
2.1 Representations and Warranties of Three Strikes. Three Strikes hereby
represents and warrants to the Company that the statements contained in this
Section 2.1 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 2.1), except as set forth in the disclosure schedule accompanying this
Agreement (the "Three Strikes Disclosure Statement"). The Three Strikes'
Disclosure Statement will be arranged in paragraphs corresponding to the
lettered subsections contained in this Section 2.1.
a. Due Organization. Three Strikes is a corporation duly organized,
validly existing, and in good standing under the laws of the State of New York
and is qualified to do business and is in good standing in all jurisdictions in
which such qualification is necessary. Three Strikes has all requisite
corporate power and authority to conduct its business, to own its properties and
to execute and deliver, and to perform all of its obligations under this
Agreement to which it is a party.
b. Due Authority. The execution, delivery and performance under this
Agreement and the documents provided for herein by Three Strikes, have been
authorized by all necessary corporate action; provided, however, that Three
Strikes cannot consummate the Reorganization unless or until it receives the
requisite approval from its shareholders.
c. Capitalization. Three Strikes' authorized capitalization presently
consists of shares of capital stock, no par value, of which, as of the date
hereof, ________ shares are issued and outstanding and _____________ shares
have been reserved for issuance based upon certain specified contingencies. All
issued and outstanding shares have been duly authorized, validly issued and
fully paid and non-assessable, and subject to no preemptive rights of any
shareholder.
d. Outstanding Options, Warrants or Other Rights. Three Strikes has no
outstanding warrants, options or similar rights whereby any person may subscribe
for or purchase shares of its common stock, nor are there any other securities
outstanding which are convertible into or exchangeable for its common stock, and
there are no contracts or commitments pursuant to which any person may acquire
or Three Strikes may become bound to issue any shares of such common stock.
e. Copies of Documents Genuine. All copies of Three Strikes' articles
of incorporation and bylaws (each as amended to date) and all minutes of
meetings or written consents in lieu of meetings of shareholders, directors and
committees of directors of Three Strikes which have been or will be furnished to
the Company are true, complete, correct and unmodified copies of such documents.
f. Officers and Directors. The officers and directors of Three Strikes
consists of the following:
Name Office
---- ------
Xxxx Xxxxxxx Director, President, Secretary & Treasurer
g. Noncontravention. The execution of this Agreement by Three Strikes and
the consummation of the transactions contemplated hereby will not result in the
breach of any term or provision of, or constitute a default under, any
provision or restrictions of any indenture, agreement, or other instrument or
any judgment, order, or decree to which Three Strikes is a party or by which it
is bound, or will it conflict with any provisions or the Articles of
Incorporation or Bylaws of Three Strikes.
h. Litigation. There are no suits, actions or proceedings at law or in
equity, pending or threatened against or affecting Three Strikes that can be
expected to result in any materially adverse change in the business, properties,
operations, prospects, or assets or in its condition, financial or otherwise.
i. Laws and Regulations. Three Strikes has complied with all laws,
rules, regulations and ordinances relating to or affecting the conduct of Three
Strikes' business, and Three Strikes possesses and holds all licenses and
permits required in its business by federal, state or local authorities.
j. Full Disclosure. Neither this Agreement nor any other instrument
furnished to the Company by or on behalf of Three Strikes contains any untrue
statement of a material fact or omits to state a material fact necessary to make
any statements made not misleading, and there is no fact that materially and
adversely affects, or foreseeably may materially and adversely affect, Three
Strikes' financial condition, liabilities, business, or assets that have not
been disclosed herein or in any other instrument.
k. Representations and Warranties True at Closing. Except as expressly
herein otherwise provided, all of the representations and warranties of Three
Strikes set forth herein shall be true as of the Closing Date as though such
representations and warranties were made on and as of such date.
l. Reverse Splits. Three Strikes hereby warrants and avers that, post
merger, that it will not enact a reverse split of its issued and outstanding
common stock shares nor its authorized common stock shares (other than as
contemplated in this Agreement), for a period of 30 consecutive months from the
date of Closing. Further, Three Strikes agrees that this provision shall carry
over should Three Strikes merge with, or be acquired by, another entity during
this 30 month period or, should Three Strikes become a subsidiary of another
entity.
m. Shareholders. Appended to this Agreement are schedules setting forth
the names, addresses, social security numbers and number of shares of stock
held by each shareholder of Three Strikes and Wave Power Net's respective
equity holders.
2.2 Representations and Warranties of the Company. The Company represents
and warrants to Three Strikes and its shareholders that the statements contained
in this Section 2.2 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 2.2), except as set forth in the disclosure schedule
accompanying this Agreement (the "Company Disclosure Statement"). The Company
Disclosure Statement will be arranged in paragraphs corresponding to the
lettered subsections contained in this Section 2.2.
a. Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware and is
qualified to do business and is in good standing in all jurisdictions in which
such qualification is necessary. The Company has all requisite corporate power
and authority to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under this Agreement to which it
is a party.
b. Due Authority. The execution, delivery and performance under this
Agreement and the documents provided for herein by Company have been authorized
by all necessary corporate action.
c. Capitalization. The Company's authorized capitalization presently
consists of 75,000,000 shares of capital stock, $0.001 par value, of which as of
January 19, 2002, 17,780,000 shares are issued and outstanding and up to 1.3
million common shares have been reserved for future issuance based upon certain
specified contingencies. All issued and outstanding shares have been duly
authorized, validly issued and fully paid and nonassessable and all shares of
Company's Common Capital Stock to be issued and delivered on the Closing Date to
the Three Strikes ' shareholders pursuant to the Agreement will be, when so
delivered, duly authorized and validly issued and outstanding, fully paid and
non-assessable, free and clear of any lien, charge, claim or encumbrance
whatsoever and subject to no preemptive rights of any Shareholder. No other
class of stock (common or preferred) is, or has been authorized or issued by the
Company, its Articles of Incorporation or By-Laws.
d. Outstanding Options, Warrants or Other Rights. Except as set forth in
the Company Disclosure Statement, the Company has no outstanding warrants,
options or similar rights whereby any person may subscribe for or purchase
shares of its common stock, nor are there any other securities outstanding which
are convertible into or exchangeable for its common stock, and there are no
contracts or commitments pursuant to which any person may acquire or Three
Strikes may become bound to issue any shares of such common stock.
e. Financial Statements. The Company has provided Three Strikes with its
most recent audited financial statements dated September 30, 2001. These
financial statements have been prepared in accordance with generally accepted
accounting principles, are correct, complete, and fairly represent the financial
position and results of operations of the Company as of said date and for the
periods indicated.
f. Adverse Changes. Since the date of the financial statements described
in Section 2.2(e) above, there have not been, and prior to the Closing Date,
there will not be, any material changes in the financial position of the Company
and its subsidiaries (if any) except changes arising in the ordinary course of
business and except changes that are otherwise disclosed in writing to Three
Strikes .
g. Undisclosed Liabilities. The Company does not have any liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due) except for liabilities set forth on the face
of the Balance Sheet delivered to Three Strikes in accordance with the
provisions of Section 2.2(e) above, and liabilities which have arisen after the
date of the financial statements provided in accordance with the provisions of
Section 2.2(e) above in the ordinary course of the Company business.
h. Noncontravention. The execution of this Agreement by the Company and
the consummation of the transactions contemplated hereby will not result in the
breach of any term or provision of, or constitute a default under, any provision
or restrictions of any indenture, agreement, or other instrument or any
judgment, order, or decree to which the Company is a party or by which it is
bound, or will it conflict with any provisions or the Articles of Incorporation
or Bylaws of the Company.
i. SEC Filings. The Company has made all filings with the SEC that it has
been required to make under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (collectively the Public Reports).
Each of the Public Reports has complied with the Securities Act and the
Securities Exchange Act in all material respects. None of the Public Reports,
as of their respective dates, contained any untrue statement of a material fact,
or omitted to state a material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. All SEC filings by the Company within the last twelve months have
been made in a timely fashion without extension. The Company's stock presently
trades on the NASD bulletin board under the symbol, "WPDN". No order or
determination of any regulatory agency, body or association is pending or
threatened which would cause the company to have its shares "de-listed" or
otherwise prevented from being offered for sale.
j. Litigation. There are no suits, actions or proceedings at law or in
equity, pending or threatened against or affecting the Company that can be
expected to result in any materially adverse change in the Company or its
assets.
k. Representations and Warranties True at Closing. Except as expressly
herein otherwise provided, all of the representations and warranties of the
Company set forth herein shall be true as of the Closing Date as though such
representations and warranties were made on and as of such date.
III. COVENANTS.
From the date of this Agreement until the Closing Date, and for a period of 80
days thereafter, the Company and Three Strikes agree as follows:
3.1 General. Each of the parties hereto will use its best efforts to take
all actions and to do all things necessary in order to consummate and make
effective the transaction contemplated by this Agreement (including satisfaction
of the closing conditions set forth in Article IV below).
3.2 Notices and Consents. Each of the parties hereto will give any
notices to third parties, and will use its best efforts to obtain any third
party consents, that the other party reasonably may request in connection with
any matter referred to in Sections 2.1 or 2.2 above.
3.3 Regulatory Matters and Approvals. Each of the parties hereto will
give notices to, make any filings with, and use its best efforts to obtain any
authorizations, consents and approvals of governments and governmental agencies
in connection with the matters referred to in Sections 2.1 and 2.2 above.
Without limiting the generality of the foregoing:
a. Securities Law Compliance. The Company will take all actions as may be
necessary, proper and advisable, under Federal and state securities laws in
connect with the offering and issuance of the Common Capital Stock to the Three
Strikes' shareholders in connection with the Reorganization provided for under
this Agreement and as required to complete the transaction as contemplated.
b. Delaware Corporation Law. The Company will obtain, as soon as
reasonably practicable, any required consents or approvals providing for the
acquisition of Three Strikes, all in accordance with the provisions of the
Delaware Corporation Law.
c. New York Corporation Law. If statutorily obligated, Three Strikes will
call a special meeting of its shareholders as soon as reasonably practicable in
order that its shareholders may consider and vote upon the adoption of this
Agreement and the approval of the Reorganization with the resultant sale and
transfer to the Company of all of the issued and outstanding shares of Three
Strikes' common stock.
3.4 Operations of Business. Three Strikes will not engage in any
practice, take any action, or enter into any transaction outside the ordinary
course of business. Without limiting the generality of the foregoing, Three
Strikes will not:
a. Authorize or effect any change in its charter or bylaws;
x. Xxxxx any options, warrants or other rights to purchase or obtain any
of its capital stock or issue, sell, or otherwise dispose of any of its capital
stock (except upon the conversion or exercise of options, warrants, and other
rights currently outstanding);
c. Declare, set aside, or pay any dividend or distribution with respect to
its capital stock (whether in cash or in kind), or redeem, repurchase or
otherwise acquire any of its capital stock;
d. Issue any note, bond or other debt security or create, incur, assume,
or guarantee any indebtedness for borrowed money or capitalized lease
obligations outside the ordinary course of business except for a working line of
credit up to $2,000,000 which Three Strikes is currently pursuing with several
financial institutions;
x. Xxxxx any security interest on, or otherwise pledge, any of its assets
outside the ordinary course of business except as it pertains to the
indebtedness excepted in subsection (d) above;
f. Make any capital investment in, make any loan to, or acquire the
securities or assets of any other person or entity outside the ordinary course
of business; or
g. Make any change in management terms for any of its directors, officers
and employees outside the ordinary course of business.
3.5 Access. The Company and Three Strikes each agree that they will
permit the others directors, officers, accountants, attorneys and other
representatives full access, during reasonable business hours throughout the
term or applicability of this Agreement, to all premises, properties, personnel,
books, records, contracts and documents of or pertaining to the others business
affairs, operations, properties and financial affairs as the other party may
reasonably request. All information provided shall be furnished strictly
subject to the confidentiality provision of this Agreement.
3.6 Confidentiality. All information and documents furnished by a party
pursuant to Section 3.5 of this Agreement shall be deemed and treated as
proprietary in nature. Each party (and the Three Strikes' shareholders) agree
that it shall hold all information received from another party pursuant to or in
connection with this Agreement in the highest and strictest confidence and shall
not reveal any such information to any individual who is not one of its
directors, officers, key employee, attorney or accountant, and that it will not
use any such information obtained for any purpose whatsoever other than
assisting in its due diligence inquiry precedent to the Closing and, if this
Agreement is terminated for any reason whatsoever, agrees to return to the other
party any all tangible embodiments (and all copies) thereof which are in its
possession. This covenant shall survive the consummation or termination of this
Agreement.
3.7 Publicity and Filings. All press releases, shareholder
communications, filings with the Securities and Exchange Commission or other
governmental agency or body and other information and publicity generated by the
Company or Three Strikes regarding the Reorganization and exchange contemplated
in this Agreement shall be reviewed and approved by the other party and its
counsel before release or dissemination to the public or filing with any
governmental agency or body whatever. Post-Closing the Company and Three
Strikes will provide each other with such documents, information, assistance and
cooperation as may be reasonably required to complete on a timely fashion, all
required filings with any state, local, federal or regulatory body or agency.
3.8 Notice of Developments. Each party hereto will give prompt written
notice to the other of any material adverse development causing a breach of any
of its own representations and warranties in Sections 2.1 and 2.2 above. No
disclosure by any party hereto pursuant to this Section 3.8, however, shall be
deemed to amend or supplement the disclosure statement provided under the terms
of this Agreement or to prevent or cure any breach of warranty, breach of
covenant or misrepresentation.
3.9 Stand-Still Agreement. Neither the Company nor Three Strikes will
(and each Three Strikes Shareholder agrees that it will not on behalf of Three
Strikes ) solicit, initiate, or encourage the submission of any proposal or
offer from any person or entity relating to any other transaction pending the
closing of the transaction contemplated herein (including any acquisition
structured as a merger, consolidation, or share exchange).
3.10 Covenants of Three Strikes' shareholders. Each of the Three Strikes'
shareholders covenants and agrees with, and represents to, the Company as
follows:
a. No Registration of Company Stock. Each of the Three Strikes'
shareholders understands that none of the Common Shares to be received from the
Company at Closing have been registered under the Securities Act of 1933, as
amended, or any applicable securities laws of any state. Each of the
Shareholders hereby represents and warrants that the Shares are being acquired
by him solely for investment and not with a view to distribution or immediate
resale thereof.
b. Stock Legend. Each of the Three Strikes' shareholders further agree
and understand that each certificate representing such shares of the Shares
issued under the Reorganization and exchange provided for under this Agreement
will bear the customary restrictive legend conspicuously noted on said
certificate.
3.11 Election of Officers. The Company agrees that Xxxx Xxxxxxx, the
current President of Three Strikes, shall become President and Chairman of the
Board of the Company and of Three Strikes after the consummation of the
Reorganization and exchange provided for under the terms of this Agreement and
shall be further authorized, subject to approval of Three Strikes existing Board
of Directors, to select the officers and directors of Three Strikes and the
Company. The Company covenants and agrees to approve of the selections made by
Xxxx Xxxxxxx and further that Xxxx Xxxxxxx shall be appointed, effective as of
the Closing Date, a member of the Company's Board of Directors with all other
existing Board members resigning. This covenant shall survive the consummation
of this Agreement.
3.12 Employment Agreement. The Company agrees that the employment
agreement between Three Strikes and Xxxx Xxxxxxx shall continue in effect
according to the terms thereof. This covenant shall survive the consummation of
this Agreement.
4. CONDITIONS TO THE EXCHANGE.
4.1 Conditions Precedent to Exchange by Company. The obligation of the
Company to consummate the Reorganization contemplated by this Agreement are
subject to satisfaction, or written waiver by the Company, of the following
conditions at or before the Closing Date:
(a) Representations and Warranties True. The representations and
warranties by Three Strikes and the Three Strikes' shareholders in the
Agreement shall have been correct on and as of the Closing Date with the same
force and effect (except as expressly provided in the Agreement or otherwise
approved in writing by the Company) as though such representations and
warranties had been made on and as of the Closing Date.
(b) No Adverse Change. Three Strikes shall not have suffered any adverse
change in its financial condition or business and no properties or assets of
Three Strikes shall have suffered any destruction, damage or loss, whether or
not covered by insurance.
(c) Performance. Three Strikes and the Three Strikes' shareholders shall
have performed all of the terms, covenants, agreements and conditions of the
Agreement on their respective parts to be performed.
(d) Shareholder Approval. The Three Strikes' shareholders shall have
approved the terms and conditions of the Reorganization resulting in the
issuance of the Common Shares as provided for herein and no Three Strikes
shareholder shall dissent with respect to the Reorganization provided for in
this Agreement.
(e) Legal Opinion. If requested, the Company shall have received the
favorable written opinion of counsel for Three Strikes as to those matters set
forth an Exhibit to be attached hereto and any other matter which the Company
may reasonably requested in connection with the Reorganization provided for in
this Agreement. In rendering the required opinion, counsel may, as to any
factual matter, rely upon a certificate of any public official and any officer
of Three Strikes who is cognizant of such factual information.
(f) No Restraint. No injunction or restraining order shall be in effect
to forbid or enjoin the consummation of this Agreement.
(g) Approval of Documents. All legal matters in connection with the
consummation of the Reorganization contemplated by this Agreement and all
documents and instruments delivered in connection therewith shall be reasonably
satisfactory in form and in substance to counsel for the Company and such
counsel shall have received authenticated copies of those copies of the
corporate documents and certificates as counsel for the Company may reasonably
request in connection with this transaction.
(h) Officers Certifications. Each Party shall have received a certificate
signed by the President and Chief Executive Officer verifying the accuracy of
the information provided and that the Company is in compliance with the terms of
this Agreement.
4.2 Conditions to Three Strikes Obligations. The obligations of Three
Strikes and the Three Strikes' shareholders to consummate the Reorganization
contemplated by this Agreement are subject to satisfaction or written waiver by
Three Strikes and the Three Strikes' shareholders of the following conditions at
or before the Closing Date:
(a) Representations and Warranties True. The representations and
warranties by the Company in the Agreement shall have been correct on and as of
the Closing Date with the same force and effect (except as expressly provided in
the Agreement or otherwise approved in writing by the Shareholders) as though
such representations and warranties had been made on and as of the Closing Date.
(b) No Adverse Change. The Company shall not have suffered any adverse
change in its financial condition or business and no properties or assets of the
Company shall have suffered any destruction, damage or loss, whether or not
covered by insurance.
(c) Performance. The Company shall have performed all of the terms,
covenants, agreements and conditions of the Agreement on its part to be
performed.
(d) Legal Opinion. If requested, Three Strikes shall have received the
favorable written opinion of counsel for the Company as to those matters set
forth as an Exhibit and is attached hereto and any other matter which Three
Strikes may reasonably request in connection with the Reorganization provided
for in this Agreement. In rendering the required opinion, counsel may, as to any
factual matter, rely upon a certificate of any public official and any officer
of the Company who is cognizant of such factual information.
(e) No Restraint. No injunction or restraining order shall be in effect
to forbid or enjoin the consummation of this Agreement.
(f) Approval of Documents. All legal matters in connection with the
consummation of the Reorganization contemplated by this Agreement and all
documents and instruments delivered in connection therewith shall be reasonably
satisfactory in form and in substance to counsel for Three Strikes and such
counsel shall have received authenticated copies of those copies of the
corporate documents and certificates as counsel for Three Strikes may
reasonably request in connection with this transaction.
(g) Regulatory Matters. There shall have been no proceeding, completed,
pending or threatened by any regulatory body, the effect of which would result
in a fine to the Company or suspension of the Company's right to sell its stock
in the public market or the right to have its stock listed on any nationally
recognized exchange. The Company shall provide an opinion of counsel to Three
Strikes stating that the Company is not obligated to file an information
statement pursuant to Regulation 14(c) of the Securities Exchange Act of 1934
under the terms contemplated under this Agreement. If the Company is unable to
provide such an opinion, the parties hereby agree that a 14(c) information will
be filed in a timely manner by the Company.
(h) Liabilities. The Company shall have no liabilities at the time of
closing and shall have paid all sums due to its transfer agent up to the date of
closing.
V. ACTIONS AT CLOSING.
5.1 Exchange. Each ___________ share of Three Strikes' common stock
that shall be outstanding on the Closing Date and held by a Three Strikes
shareholder shall be converted into _____________ fully paid and nonassessable
shares of the Company's Common Capital Stock; provided, however, that the number
of shares of the Company's Common Capital Stock into which shares of Three
Strikes' common stock are to converted shall be rounded off to the nearest whole
number of shares, and no fractional shares shall be issued. The number of
shares of the Company's Common Capital Stock that each Three Strikes'
shareholder shall receive in exchange for his or her shares of Three Strikes'
common stock are set forth as an Exhibit and attached hereto.
5.2 Shareholders' Actions at Closing. On the Closing Date, the
Shareholders, contemporaneously with the performance by Company of its
obligations to be performed at the Closing, shall deliver to the Company the
following:
(a) Three Strikes Stock Certificates. Stock certificates representing all
of the outstanding shares of Three Strikes' common stock endorsed for transfer,
with all necessary stock assignments and other pertinent documents.
(b) Certified Corporate Resolutions. Certified copy of the resolutions
duly adopted by the Board of Directors and the shareholders of Three Strikes
authorizing and approving the execution and delivery of this Agreement and the
performance of its obligations hereunder.
(c) Opinion. The opinion of counsel as described in Section 4.2(f) of this
Agreement; and
(d) Other Documents. Such further certificates and documents as shall be
reasonably requested by counsel for the Company to insure compliance by Three
Strikes and Three Strikes' shareholders of all obligations imposed upon them
hereunder.
5.3 Company's Actions at Closing. On the Closing Date, the Company,
contemporaneously with the performance by Three Strikes and the Three Strikes'
shareholders of their obligations to be performed at the Closing, shall deliver
to the Three Strikes' shareholders the following:
(a) Company Common Capital Stock Certificates. Stock certificates
representing an aggregate of 20,000,000 post split shares of Company's Common
Capital Stock (or approximately 56,000,000 pre-split common shares with rights
as provided in section 1.3(b)) to which each Three Strikes shareholder shall be
entitled to receive pursuant to this Agreement, as set forth as an Exhibit and
attached hereto, with each certificate bearing the restrictive legend described
in Section 1.4
above.
(b) Certified Corporate Resolutions. Certified copy of the resolutions
duly adopted by the Board of Directors of the Company authorizing and approving
the execution and delivery of this Agreement by the Company and the performance
of its obligations hereunder.
(c) Opinion. The opinion of counsel as described in Section 4.1(f) of this
Agreement; and
(d) Other Documents. Such further certificates and documents as shall be
reasonably requested by counsel to Three Strikes and Three Strikes' shareholders
to insure compliance by the Company with all obligations imposed upon it
hereunder.
5.4 Stock Rights. On the Closing Date, the Three Strikes' shareholders
who have exchanged their shares of Three Strikes' common stock for shares of the
Company's Common Capital Stock shall thereupon cease to have any rights with
respect to their Three Strikes' shares and their sole right thereafter shall be
with respect to the shares of the Company's Common Capital Stock received
hereunder.
VI. TERMINATION.
6.1 Termination of Agreement. This Agreement may be terminated as
provided below:
(a) The parties hereto may terminate this Agreement by mutual consent at
any time prior to the Closing Date;
(b) The Company may terminate this Agreement by giving written notice to
the Shareholders at any time prior to the Closing Date; (1) in the event Three
Strikes and/or its Shareholders have breached any material representation,
warranty, or covenant contained in this Agreement in any material respect or as
a result of any direct or indirect acts, intentional or unintentional acts, or
acts of omission by Three Strikes constituting a breach hereof, this transaction
may be unwound with all parties concerned returned to their status quo. The
Company must notify Three Strikes, in writing, of this breach, and if the breach
has continued without cure for a period of 7 days after the notice of breach, or
(2) if the Closing shall not have occurred on or before March 1, 2002 by reason
of the failure of any condition precedent under Section 4.1 (a-h, inclusive)
hereof (unless the failure results primarily from the Company breaching any
representation, warranty, or covenant contained in this Agreement or unless
delayed by regulatory approval beyond the control of the Parties); and
(c) Three Strikes and the Three Strikes' shareholders may terminate this
agreement by giving written notice to the Company at any time prior to the
Closing Date (1) in the event the Company has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect, Three Strikes and the Three Strikes' shareholders have
notified the Company of this breach, and the breach has continued without cure
for a period of 7 days after the notice of breach, or (2) if the Closing shall
not have occurred on or before March 1, 2002 by reason of the failure of any
condition precedent under Section 4.2 (a-h, inclusive) hereof (unless the
failure results primarily from the Shareholders and/or Three Strikes breaching
any representation, warranty, or covenant contained in this Agreement).
(d) It is the parties intention to close this transaction as soon as
practicable, however, the Closing Date shall occur no later than March 1, 2002,
absent regulatory delays. At the Company's option, per written notice to the
last known addresses of Three Strikes, should the closing not take place on or
before March 1, 2002 as a result of any material direct or indirect acts,
intentional or unintentional acts, or acts of omission which c constitute a
breach of this Agreement by Three Strikes, the transaction may be unwound with
all parties concerned returned to their status quo. Any costs borne by the
Company as a result of such a breach, will be paid by Three Strikes except in
the event of Company or its shareholders delay the closing (with or without
otherwise breaching this Agreement) or in the event the closing is delayed due
to regulatory matters beyond the control of Three Strikes. Included in such
regulatory delay issues, but not limited thereto, are the requirements of filing
a 14(c) notification and 14(c) final notice which require an opinion of counsel.
6.2 Effect of Termination. If any party hereto terminates this Agreement
pursuant to Section 6.1(a) above, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to the other party
(except for any liability of any Party then in breach). Should this transaction
be unilaterally terminated without cause by Three Strikes, as set forth in
Section 6.1(b), any costs borne by the Company as a result, will be paid by
Three Strikes, except in the event of Company or its shareholders delay the
closing (with or without otherwise breaching this Agreement) or in the event the
closing is delayed due to regulatory matters beyond the control of Three
Strikes. Included in such regulatory delay issues, but not limited thereto, are
the requirements of filing a 14(c) notification and 14(c) final notice which
require an opinion of counsel.
VII. GENERAL PROVISIONS.
7.1 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties concerning the subject matter hereof and
supersedes any and all prior negotiations, understandings or agreements in
regard thereto.
7.2 Applicable Law. This Agreement shall be construed in accordance and
governed by the laws of the State of Delaware.
7.3 Notices. Unless otherwise changed by notice given in accordance with
this provision, any notice or other communications required or permitted herein
shall be deemed given if delivered personally or sent by certified mail, postage
prepaid, return receipt requested, addressed to the other parties at the
addresses set forth above or, in the case of the Shareholders, at the address
set forth their signature.
7.4 Waiver. All rights and remedies under this Agreement are cumulative
and are not exclusive of any other rights and remedies provided by law. No delay
or failure in the exercise of any right or remedy arising under this Agreement
shall operate as a waiver of any subsequent right or remedy subsequently arising
under this Agreement.
7.5 Survival of Provisions. All agreements, representations, covenants
and warranties on the part of the parties contained herein or in any instrument
executed and delivered in connection herewith shall survive closing of this
Agreement and any investigation at any time made with respect thereto.
7.6 Attorney's Fees. In the event of litigation for enforcement of the
terms of this Agreement or to enforce any remedy hereunder, the prevailing party
shall be entitled to recover from the other party any and all costs and
expenses, including reasonable attorney's fees, as may be incurred.
7.7 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective personal representatives,
successors and assigns.
7.8 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.9 Execution by Facsimile. Facsimile execution of this Agreement by any
party is authorized and shall be binding upon all parties.
7.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original hereof.
IN WITNESS WHEREOF, this Agreement has been executed on the date first above
written.
WAVE POWER NET, INC.
By: __________________
Xxxxx Xxxxxx, President
3 Strikes (USA), Inc.
By: ___________________
Xxxx Xxxxxxx, President
SHAREHOLDER AGREEMENTS AND COVENANTS
THE UNDERSIGNED, each being shareholders of 3 Strikes (USA), Inc., ("Three
Strikes"), hereby represent that they own the number of shares of Three Strikes'
common stock as set forth beneath their respective signature below and further
covenant and agree to comply with, undertake to perform, and abide by, the
various covenants, warranties and undertakings as set forth in the foregoing
Agreement and Plan of Reorganization dated February 14, 2002 by and between 3
Strikes (USA), Inc. and Wave Xxxxx.Xxx, Inc. This document shall be
incorporated by reference in the Plan of Reorganization dated February 14, 2002
by and between 3 Strikes (USA), Inc. and Wave Xxxxx.Xxx, Inc.
EXECUTED on the date set forth below the respective signatures.
SHAREHOLDERS:
_____________________________
Name:
Number of Shares:
Date:
_____________________________
Name:
Number of Shares:
Date:
_____________________________
Name:
Number of Shares:
Date:
EXHIBIT A
-----------
THIS EXHIBIT is attached to and made a part of that certain Agreement and
Plan of Reorganization dated February 14, 2002 between and among WAVE POWER
NET, INC. (the "Company") and 3 STRIKES (USA), Inc. ("Three Strikes ").
Legal Opinion
-------------
The legal opinion shall contain the following:
The Company [Three Strikes] is a corporation duly organized, validly existing,
and in good standing under the laws of the State of New York.
The authorized capital stock of the Company [Three Strikes] and the shares of
common stock of the Company [Three Strikes] are as set forth in the Company's
[Three Strikes] representations. All outstanding shares of the Company's[Three
Strikes ] common stock are duly and validly authorized and issued, are fully
paid and nonassessable, and have not been issued in violation of any preemptive
rights of stockholders, if any. To the knowledge of such counsel, there is no
existing option, warrant, call, subscription, or other agreement or commitment
obligating the Company [Three Strikes] to issue or sell, or to purchase or
redeem, any shares of its capital stock other than those represented by the
Company [Three Strikes] to Three Strikes [the Company] in this Agreement.
1. To their knowledge, all consents or approvals by third parties required
in connection with the execution and consummation of this Agreement have been
duly obtained and no consents or approvals by any additional third parties or by
any governmental agency are required in connection therewith.
2. To their knowledge, the execution of this Agreement and the transactions
contemplated hereby will no result in the breach of any term or provision of,
or constitute a default under, any provision or restriction of any indenture,
agreement, or other instrument to which the Company [Three Strikes] is a party
or by which it is bound, nor will it conflict with the provisions of the
Articles of Incorporation or Bylaws of the Company [Three Strikes].
3. All corporate action (including the Board of Directors and approval by
the Stockholders) required to authorize the transactions contemplated by this
Agreement have been duly and properly taken.
4. The Agreement have been duly authorized, executed, and delivered by the
Company [Three Strikes] and constitutes a valid agreement, legally binding upon
the Company [Three Strikes] and enforceable in accordance with its terms.
5. The Stockholders of Three Strikes have full right and power to transfer
and deliver their shares pursuant to this Agreement, free and clear of any
liens, encumbrances, restrictions or claims.
Additional items for inclusion in opinion provided by Company's counsel:
6. The Company has filed with the Securities Exchange Commission and any
applicable state securities agency all reports or other documents required of it
to assert and claim an exemption from the registration provisions of the
Securities Act of 1933, as amended, and any applicable state securities laws
with respect to the issuance to the shareholders of Three Strikes of the shares
of the Company's Common Stock.
EXHIBIT B
-----------
THIS EXHIBIT is attached to and made a part of that certain Agreement and
Plan of Reorganization dated February 14, 2002 between and among WAVE
XXXXX.XXX.XXX,, INC. (the "Company") and 3 STRIKES (USA), INC, ("Three
Strikes").
Ownership List
The following is the name and address of each Three Strikes' shareholder,
together with the number of his shares of Three Strikes' common stock, and the
number of shares of the Company's Common Capital Stock which the Company shall
issue to such shareholder in accordance with the terms of the above referenced
Agreement and Plan of Reorganization:
Three Strikes' Shareholder Shares of Three Strikes Shares of Company
Name and Address Common Stock Common Capital Stock
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