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 __, 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 ,
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___, 2002 between and among WAVE POWER
NET, INC. (the "Company") and 3 STRIKES (USA), Inc. ("Three Strikes ").
Legal Opinion
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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 Delaware 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 __, 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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