0000950144-01-508213.txt : 20011101
0000950144-01-508213.hdr.sgml : 20011101
ACCESSION NUMBER: 0000950144-01-508213
CONFORMED SUBMISSION TYPE: 10KSB
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20011030
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: RAINWIRE PARTNERS INC /DE/
CENTRAL INDEX KEY: 0000917253
STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823]
IRS NUMBER: 570941152
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10KSB
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-23892
FILM NUMBER: 1770569
BUSINESS ADDRESS:
STREET 1: 9229 UNIVERSITY BLVD
STREET 2: STE 201
CITY: CHARLESTON
STATE: SC
ZIP: 29406
BUSINESS PHONE: 8435539456
MAIL ADDRESS:
STREET 1: 9229 UNIVERSITY BLVD
STREET 2: STE 201
CITY: CHARLESTON
STATE: SC
ZIP: 29406
FORMER COMPANY:
FORMER CONFORMED NAME: ENVIROMETRICS INC /DE/
DATE OF NAME CHANGE: 19940107
10KSB
1
g72313e10ksb.txt
RAINWIRE PARTNERS, INC.
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
================================================================================
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2000
Commission file number: 0-23892
RAINWIRE PARTNERS, INC.
(Exact Name of Registrant as specified in its Charter)
DELAWARE 57-0941152
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
Monteith Commons, First Floor
2931 Piedmont Road, N.E.
Atlanta, Georgia 30305
(Address of principal executive offices of Incorporation or
organization and zip code)
Issuer's telephone number: (404) 842-1510
(Registrants telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the last 90 days.
YES [ ] NO [X]
At December 31, 2000, 7,609,886 shares of the Registrant's Common Stock
were issued outstanding and the estimated aggregate market value of the
Registrant's outstanding common stock held by non-affiliates of the Registrant
was approximately $226,876.
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
PART I
I. DESCRIPTION OF BUSINESS.
A. Recent Developments
In February, 2001, Rainwire Partners, Inc. ("Rainwire" or the
"Company") and Oasis Group, Inc., a Georgia corporation ("Oasis"),
began discussions concerning the use of Rainwire as a reverse merger
vehicle to position Oasis in the public market. These initial
discussions did not result in any agreements. After exploring similar
agreements with other parties, the Company re-entered discussions with
Oasis in July, 2001.
On August 29, 2001, Rainwire and Oasis completed negotiations
and the Oasis Share Exchange Agreement was signed. It is a non-binding
agreement subject to the completion of due diligence and exchange of
Schedules outlined in the Oasis Share Exchange Agreement. Prior to the
Closing, Rainwire plans to increase its authorized common stock and
reverse split its present outstanding shares.
The Company is seeking shareholder approval of the Oasis Share
Exchange Agreement and the transactions contemplated by it. The consent
of persons holding a simple majority (over 50%) of the outstanding
Company common stock is needed to approve the closing of the
transaction and authorization of the other transactions identified.
Because current management owns greater than 50% of the outstanding
Company common stock, the Company expects to receive the necessary
shareholder approval and intends to prepare an Information Statement on
Form 14C to inform the remaining shareholders of the majority's
decision. The Company expects to mail the Information Statement to its
shareholders on or about November 25, 2001, and believes that the
transaction will close on or about December 15, 2001.
Upon execution of the Oasis Share Exchange Agreement, Walter
H. Elliott, the President and a director of the Company resigned, and
Ronald A. Potts was elected to the Board of Directors of the Company
and was appointed President and Chief Executive Officer of the Company.
Additionally, Mike McLaughlin and John Hill were elected to the Board
of Directors and Peggy Evans was appointed Chief Financial Officer.
Furthermore, upon execution of the Share Exchange Agreement,
the Company issued 12,000,000 shares of its common stock to Osprey
Investments, LLC (of which Lyne Marchessault is the sole member) in
satisfaction of loans in the principal amount of $60,000.
B. Business Development.
The Company was incorporated on May 10, 1991 in Delaware for
the purpose of consolidating the operations of Azimuth, Inc. (a fully
accredited AIHA Industrial Hygiene Laboratory for testing asbestos,
metals and organic vapors) and certain of its former environmental
products businesses and acquiring the assets of four general
partnerships which were then leasing real estate and laboratory and
other equipment to Azimuth and the products businesses. The Company
formerly had three operating
subsidiaries: Trico Environmetrics, Inc. ("Trico"), Envirometrics
Products Company ("EPC") and Azimuth, Inc.
In 1996, the Company entered into a "Turnaround" phase, and
all of the Company's former operations were divested by the year 2000.
During the course of the Company's "Turnaround" phase, the
Company explored alternative plans for growth that included the
identification of companies in other markets which had greater growth
potential than the Environmental, Health and Safety Market. In
September, 1999, the Company was introduced to The Catapult Group,
Inc., a Georgia corporation ("Catapult"), which was an Internet
integration firm offering intelligent end-to-end e-business solutions
to large and middle-market organizations. In February 2000, the Company
and Catapult reached terms that each felt were fair to the parties and
entered into a non-binding agreement whereby Rainwire would acquire
Catapult, which became binding on March 8, 2000.
Prior to the closing of the Catapult Exchange Agreement, on
July 26, 2000, Registrant effected a 10:1 reverse split of its
outstanding common stock, issued 5,555,064 shares of its common stock
to purchase all of the outstanding common stock of Catapult, changed
its name to The Catapult Group, Inc. and increased its authorized
shares from Ten Million (10,000,000) to Twenty Million (20,000,000). An
amendment to Registrant's Certificate of Incorporation reflecting such
changes was filed with the Secretary of State of Delaware on July 26,
2000. Upon completion of the Catapult Exchange Agreement, Catapult
became a wholly owned subsidiary of the Company and the shareholders of
Catapult became owners of approximately 90% of the outstanding shares
of Common Stock of the Company. The Company subsequently changed its
name to Rainwire Partners, Inc.
On December 31, 2000, management adopted a plan to discontinue
the operations of the Company and to liquidate its assets.
C. Business of Issuer.
Upon completion of the Share Exchange with The Catapult Group,
Inc., Rainwire's business became that of an Internet integration firm
offering intelligent end-to-end e-business solutions to large and
middle-market organizations. However, as of December 31, 2000, Rainwire
adopted a plan to discontinue the operations of the Company and to
liquidate its assets. Additionally, as of that date, Rainwire began to
explore alternative plans for growth, which included the identification
of companies in markets that had greater growth potential than the
market for e-business solutions.
On August 29, 2001, Rainwire entered into a Share Exchange
Agreement with Oasis. Upon completion of the Share Exchange, Rainwire's
business will consist of the business plan of Oasis, which includes the
acquiring, owning and developing of parcels of undeveloped property.
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D. Employees.
Presently, the Company has no full-time employees other than
executive officers. The Company had 20 employees at December 31, 2000.
II. DESCRIPTION OF PROPERTY.
The following includes each of the principal real properties owned or
leased by the Company as of December 31, 2000.
1. 9229 University Boulevard, Charleston, SC(1)
Monthly Base Rental: $5,523.00
2. 4940 Peachtree Boulevard, Suite 350, Norcross, GA(2)
Monthly Base Rental: $3,695.69
3. 665 Pylant Street, Atlanta, GA(3)
Monthly Base Rental: $21,921.00
4. 418 King Street, Suite 301, Charleston, SC(4)
Monthly Base Rental: $3,750.00
Lease Expiration Date: August 31, 2005
(1) Subsequent to December 31, 2000, the Company no longer
occupied this location. The Company is seeking to mitigate
its outstanding lease liabilities.
(2) This lease expired during fiscal year 2000.
(3) Subsequent to December 31, 2000, the Company no longer
occupied this location.
(4) The Company is seeking to mitigate the outstanding lease
liability as the landlord had seized and/or sold some of the
equipment in partial satisfaction of the past due lease
rentals.
III. LEGAL PROCEEDINGS.
The Company is involved with several legal actions, principally as
defendant. These actions involve outstanding liabilities of the Company
including those of subsidiaries. Following are four such actions.
Azimuth Laboratory, Inc., a subsidiary of EVRM, generated hazardous
waste during the time of its operations which ceased in April, 2000. According
to a former landlord, Azimuth was responsible for a hazardous waste cleanup on
the leased premises, and he is seeking recovery of approximately $130,000,
including the cleanup and remaining payments due under the terms of the lease
agreement which is to expire in December, 2001. A motion for summary judgment is
expected to be heard by the end of 2001. Only the remaining lease obligation of
$66,271 has been recorded as of December 31, 2000.
As of December 31, 2000, a judgment against the Company was obtained by
the holder of the remaining Series C redeemable preferred stock for $21,666
relating to the failure by the
3
Company to redeem 8,333 of those shares and to pay dividends when due.
Substantially all of that amount was recorded as of December 31, 2000.
IOS Capital, Inc. has made a demand to Rainwire for sums defaulted
upon as a result of an equipment lease signed by Rainwire in February, 1997.
IOS Capital indicated that they would compromise the amounts owed for the sum
of $15,479.20 in full satisfaction of the claim; however, Rainwire failed to
make the payment by the required date.
An action has been filed and reduced to a judgment against Rainwire
Partners, Inc. by H.E. Igoe in the amount of $21,665.96 filed on June 25, 2001.
This matter involved a share purchase agreement between Rainwire and Igoe.
IV. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 18, 2000 the Company filed a definitive Information Statement
soliciting consents from its shareholders concerning four (4) matters:
1. Reverse split of the outstanding shares 10:1;
2. Increase of the Authorized Shares from 10 million to 20
million;
3. Corporate name change to the Catapult Group, Inc.; and
4. Consent to consummate the share exchange with the Catapult
Group.
On June 8, 2000 the Company's transfer agent, Continental Stock Transfer & Trust
Company suspended the consent count because a majority (approximately 60%) of
the consents had been returned. The transfer agent then issued the Company a
confirmation letter tabulating the consent count, 3,264,363 votes were received
with greater than 99% giving consent to the transactions outlined in the
Information Statement.
No other matters were submitted to our security holders for a vote
during the fiscal year ending December 31, 2000.
PART II
V. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
A. Market information.
The Company's Common Stock has been publicly traded separately
and was initially quoted on the Nasdaq Smallcap Market ("Nasdaq") under
the symbol "EVRM" on August 12, 1994. Upon the divestiture of the Trico
subsidiary the Company fell below the listing requirements of Nasdaq.
On December 3, 1996, the Company's
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common stock and warrants were delisted from The Nasdaq SmallCap Market
and were subsequently traded on Over the Counter Bulletin Board. On
January 4, 1999, the Securities and Exchange Commission (SEC) approved
amendments to NASD Rules 6530 and 6540 to limit quotations on the OTC
Bulletin Board(R) ("OTCBB") to the securities of companies that report
their current financial information to the SEC. On November 18, 1999,
the Company's common stock and warrants were delisted from the OTCBB
because of failure to have the required SEC periodic filings submitted
by that date. As of that date, price Quotations could be found on
Electronic Pink Sheets (the "Pink Sheets"). On January 28, 2000 the
Company brought its filings with the SEC current, thus meeting the
requirements for re-listing on the OTCBB. On March 21, 2000 the
Company's common stock began trading on OTCBB. On August 1, 2000, the
Company received a new symbol from NASDAQ. As of that date, Rainwire
was traded on the OTCBB under the symbol RNWR. In 2001, the Company's
common stock was again delisted from the OTCBB because of the Company's
failure to file its required SEC periodic filings. On October 19, 2001,
the last sale price of a share of the Company's common stock on the
Pink Sheets was $0.08.
The following table sets forth the high and low bid prices for
the Common Stock as reported in the trading media and for the periods
reflected above for each fiscal quarter commencing January, 1999
through December, 2000. The quotations listed below reflect
inter-dealer prices, without retail mark-up, mark-down or commissions
and do not necessarily represent actual transactions.
HIGH LOW
----- -----
1999
First Quarter 0.187 0.062
Second Quarter 0.375 0.062
Third Quarter 0.375 0.050
Fourth Quarter 0.375 0.005
2000
First Quarter 0.35 0.08
Second Quarter 0.375 0.06
Third Quarter* 4.25 2.00
Fourth Quarter 2.50 0.50
* The common stock of the Company was consolidated 10 for 1 in
July, 2000.
B. Holders.
On December 31, 2000 there were approximately 103 shareholders
of record the Company's common stock, based on information provided by
the Company's transfer agent. This number may not include individuals
whose shares are held in "street names."
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C. Dividends.
The Company has never paid dividends on its Common Stock and
does not anticipate that it will do so in the foreseeable future. For
the foreseeable future any future earnings or funds otherwise
available, if any, for the payment of dividends will be used to pay
dividends on the outstanding Preferred Stock or for reinvestment in the
Company's business. Any future determination to pay cash dividends on
the Common Stock will be at the discretion of the Board of Directors
and will reflect such other factors (including contractual
requirements) as the Board of Directors deem relevant.
In April, 2000, all of the Series A and B preferred shares,
and 2/3 of the Series C preferred shares were converted into common
stock of the Company, including accrued dividends. Total common shares
issued to effect the conversion was 167,605, valued at $670,420 or
$4.00 per share. As of December 31, 2000, there were 24,959 shares of
Series C preferred stock outstanding valued at $52,913, including
accretion of $2,995.
D. Recent Sales of Unregistered Securities.
In April, 2000, the Registrant issued an aggregate of 186,288
shares of its common stock in settlement of prior accounts payable.
These shares were sold pursuant to Section 4(2) of the Securities Act
and have been marked "restricted."
In July, 2000, the Registrant issued an aggregate of 5,555,064
shares of its common stock to the shareholders of The Catapult Group,
Inc. in exchange for all of the outstanding common shares of The
Catapult Group, Inc. These Shares were sold pursuant to Section 4(2) of
the Securities Act and have been marked "restricted."
In September, 2000, the Registrant issued an aggregate of
900,000 shares of its common stock to four individuals in exchange for
$700,000 or at a price of $0.78 per share. All four individuals were
accredited investors, and these shares were sold pursuant to Section
4(2) of the Securities Act and have been marked "restricted."
In September, 2000, the Registrant issued an aggregate of
120,000 shares of its common stock in settlement of a note payable in
the principal amount of $150,000. These shares were sold pursuant to
Section 4(2) of the Securities Act and have been marked "restricted."
In August, 2001, the Registrant issued 12,000,000 shares of
its common stock in settlement of loans in the principal amount of
$60,000. These shares were sold pursuant to Section 4(2) of the
Securities Act and have been marked "restricted."
In August, 2001, the Registrant issued 100,000 shares of its
common stock to an individual for services provided and to be provided
to the Registrant. The services were valued at $2,500 or $0.025 per
share. These shares were sold pursuant to Section 4(2) of the
Securities Act and have been marked "restricted."
In September, 2001, the Registrant issued 200,000 shares of
its common stock to an individual in exchange for $10,000 or at a
price of $0.05 per share. The individual was an accredited investor,
and these shares were sold pursuant to Section 4(2) of the Securities
Act and have been marked "restricted."
In October, 2001, the Registrant issued 500,000 shares of its
Series D Convertible Preferred Stock to Osprey Investments, LLC in
exchange for 10,000,000 shares of the
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Registrant's common stock. These shares were sold pursuant to Section
4(2) of the Securities Act and have been marked "restricted".
E. Series D Convertible Preferred Stock ("Series D")
Our Amended and Restated Certificate of Incorporation
authorizes 2,500,000 shares of preferred stock and provides that the
Board of Directors may, by resolution, fix the rights and limitations
of our preferred stock. The Board of Directors had previously utilized
this authority to authorize 70,000 shares of Series A Preferred Stock,
208,640 shares of Series B Preferred Stock and 74,878 shares of Series
C Preferred Stock.
On October 15, 2001, our Board of Directors approved the
creation, authorized the issuance, and fixed the designation of 500,000
share of Series D Convertible Preferred Stock. On October 15, 2001, our
Board of Directors further approved the exchange of 500,000 shares of
our Series D Convertible Preferred Stock for 10,000,000 of our common
stock owned by Osprey Investments, LLC. Ms. Marchessault abstained from
the latter director vote. On or about October 26, 2001, we filed a
Certificate of Designation of Series D Convertible Preferred Stock with
the Delaware Division of Corporations. Described below is a summary of
the terms of the Series D Convertible Preferred Stock.
Convertability
The Series D is immediately convertible at the option of the
holder into Ten Million (10,000,000) shares of the common stock of the
Company. If the Company shall fail to pay a dividend to the holders of
the Series D for two consecutive quarters, the Series D shall be
convertible into fifty million (50,000,000) shares of the common stock
of the Company so long as such dividends remain unpaid.
Redemption
The Company may redeem the Series D, in whole or in part, at
any time, at a redemption price equal to the sum of any accrued but
unpaid dividends and $1.00 per share redeemed.
Dividends
The holders of the Series D shall be entitled to receive a
cumulative dividend at a rate of twelve percent (12%) per annum out of
any assets of the Company legally available therefore, when, if and as
declared by our Board of Directors. Dividends on Series D shall be
payable on a quarterly basis.
Liquidation Preference
If the Company were dissolved or liquidated, voluntarily or
involuntarily, the holders of the Series D would be entitled to
receive, prior and in preference to any distribution of our assets to
the holders of any of our other equity securities, other than our
Series C Convertible Preferred Stock, an amount equal to $1.00 per
share.
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Voting Rights
On all matters on which the holders of our common stock are
entitled to vote, each holder of Series D shall be entitled to ten (10)
votes for each share of Series D standing in his or her name on the
books of the Company. In addition, the holders of the Series D shall be
entitled to elect the majority of the Company's Board of Directors.
VI. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
This 10-KSB contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbors created thereby.
Investors are cautioned that certain statements in this 10-KSB are
"forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and involve known and unknown
risks, uncertainties and other factors. Such uncertainties and risks
include, among others, certain risks associated with the closing of the
Oasis transaction described herein, government regulation, and general
economic and business conditions. Actual events, circumstances, effects
and results may be materially different from the results, performance
or achievements expressed or implied by the forward-looking statements.
Consequently, the forward-looking statements contained herein should
not be regarded as representations by the Company or any other person
that the projected outcomes can or will be achieved.
The following discussion and analysis should be read in
conjunction with the Consolidated Financial Statements and Notes
thereto, appearing elsewhere in this Form 10-KSB.
A. General Overview
On July 26, 2000 the former company, Environmetrics, Inc.
exchanged approximately ninety percent of newly issued restricted
common stock for all of the outstanding common stock of The Catapult
Group, Inc. On that date, the name was changed to Rainwire Partners,
Inc. for both The Catapult Group, Inc. and the former company. As of
the date of the exchange, the former company's net assets were written
down to a fair market value, as required under generally accepted
accounting principles. The previous historical financial data of The
Catapult Group, Inc. was carried forward since Catapult is considered
the accounting acquirer; therefore the following comments pertain to
the historical financial statements of The Catapult Group, Inc. and
i20, Inc., including the net assets acquired as mentioned above.
B. Results of Operations.
Year ended December 2000 Compared to year ended December 1999
The company lost $419,028 for 1999 compared to a loss of
$1,494,708 in 2000. In addition, in 2000 the company recorded a loss on
the disposal of the business of $578,191. The decision was made on
December 31, 2000 to discontinue the operations
8
of the company; accordingly the financial statements for 1999 reflect
the operating loss as a discontinued loss for comparative purposes.
The company commenced its operation in July, 1999 and acquired
i20, Inc. in August, 1999. i20, Inc.'s planned operations for the
period subsequent to its purchase was the basis for the company paying
approximately $500,000 more than the fair value of the assets acquired
at that date. The loss from discontinued operations in year 2000,
includes not only a write off of the unamortized balance of Goodwill of
approximately $460,000 but unsuccessful efforts to sustain the business
during the period when dot.com companies were failing. The loss on the
disposal of the business in 2000 consists mainly of forward looking
expenses, which were obligations of the company as of December 2000 and
obligation incurred as a result of that decision.
C. Financial Condition.
The company's audit report for the year 2000 discloses a
"going" concern paragraph in reference to the company's concern for
continuing its existence in the future. This concern is highlighted by
the fact that the company has negative working capital of approximately
$1,100,000, a deficit since inception of approximately $2,500,000 and a
deficit in stockholders equity of approximately $1,160,000. There are a
number of legal actions against the company for failure to honor its
commitments, which includes an obligation of the company incurred by
Environmetrics, Inc., Azimuth Laboratories, Inc.
D. Certain Risk Factors.
Rainwire Partners, Inc. has entered into a Plan and Agreement
to Exchange Stock by and among Rainwire, Oasis Group, Inc. and the
Shareholders of Oasis (the "Oasis Share Exchange Agreement"). As a
result of the Oasis Share Exchange Agreement, Oasis will become a
wholly-owned subsidiary of Rainwire. Oasis faces various risks that may
prevent Oasis from implementing its business plan. If any of the
following risks actually occur, Oasis' business, financial condition or
results of operations could be materially harmed. If Oasis' business is
harmed, the trading price of Rainwire's Common Stock could decline and
you could lose all or part of your investment.
BECAUSE OF OUR LACK OF FUNDS AND PAST LOSSES, OUR INDEPENDENT
ACCOUNTANT'S AUDIT REPORT STATES THAT THERE IS SUBSTANTIAL DOUBT ABOUT
OUR ABILITY TO CONTINUE AS A GOING CONCERN.
Rainwire's independent certified public accountants have
raised substantial doubt about our ability to continue as a going
concern. Our ability to continue as a going concern is highly dependent
upon obtaining additional financing for our planned operations, and/or
achieving profitable operations. If we are unable to obtain additional
financing in sufficient amounts or on acceptable terms, our operating
results and prospects could be adversely affected.
9
WE HAVE INCURRED SIGNIFICANT LOSSES.
As of December 31, 2000, the end of our most recent fiscal
year, we had incurred significant losses. Additionally, as of December
31, 2000, Rainwire adopted a plan to discontinue the operations of the
Company and to liquidate its assets. Accordingly, we expect to continue
incurring operating losses until we are able to derive meaningful
revenues from Oasis' anticipated operations. There can be no assurance
that Oasis' anticipated operations will ever produce profitable
operations or that we will be able to continue to obtain financing
until Oasis is able to produce profitable operations. Because of the
substantial start-up costs that must be incurred by a new company, we
expect to incur significant operating losses during the initial years
of Oasis' operations. No assurance can be given that the future
operations of Oasis will be successful.
CURRENT RAINWIRE SHAREHOLDERS WILL SUFFER IMMEDIATE AND
SUBSTANTIAL DILUTION UNDER TERMS OF THE SHARE EXCHANGE AGREEMENT.
Under the terms of the Oasis Share Exchange Agreement,
Rainwire will effect a reverse split of its current issued and
outstanding common stock and will issue shares of the Company's Common
Stock to the shareholders of Oasis. As a result, current shareholders
of Rainwire will suffer substantial dilution.
In addition, under the terms of the Oasis Share Exchange
Agreement, Rainwire will amend its Certificate of Incorporation to
increase its authorized shares of Common Stock to One Hundred Million
(100,000,000). The Company's ability to issue additional shares of
Common Stock after the completion of the Oasis Share Exchange will
subject current Rainwire shareholders to additional dilution.
OASIS IS A DEVELOPMENT STAGE COMPANY AND HAS NO SIGNIFICANT
OPERATING HISTORY.
Oasis was founded on November 16, 1999, and to date has had no
business operations. As of the date of this annual report, Oasis has
not had any revenue producing operations on which you can evaluate its
potential for future success. Oasis' activities to date have been
limited to conducting a private offering of its securities and entering
into agreements or letters of intent concerning various real property,
a mortgage brokerage company and an aviation company. As a development
stage company, Oasis is subject to all risks, expenses, and
uncertainties frequently encountered by new companies. Any
unanticipated expenses, problems, or difficulties may result in
material delays both in the completion of the Oasis Share Exchange and
in implementing Oasis' business plan.
WE MAY BE UNABLE TO RAISE ADDITIONAL FUNDING TO PURSUE OUR
STRATEGIES WHICH MAY HARM OUR BUSINESS
The Company anticipates the need for additional capital as it
pursues its business strategy. The Company expects to raise additional
capital through a combination of new debt issuances and equity sales,
from private as well as public sources. Issuance of new debt and/or the
sale of equity will likely have a dilutive effect on the Company and
its shareholders. Implementation of the Company's strategy and its
business plans is contingent upon the availability of such funding
sources. No assurance can be given that
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the Company will be able to raise debt or equity capital, at terms that
are acceptable to the Company, or at all, in order to fund its
operations as set forth above.
OASIS' BUSINESS PLAN MAY NEVER BE IMPLEMENTED.
Oasis' business plan consists of acquiring, owning and
developing parcels of undeveloped property. Oasis has entered into
agreements or letters of intent concerning various real property, a
mortgage brokerage company and an aviation company; however, there is
no assurance that any of the transactions contemplated by the
agreements will ever be completed.
WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS IN THE FORESEEABLE
FUTURE.
We presently anticipate that we will retain all available
funds for use in the operation and expansion of our business and do not
anticipate paying any dividends on our common stock in the foreseeable
future. Any future payment of dividends to our stockholders will depend
on decisions that will be made by our board of directors and will
depend on then existing conditions, including our financial condition,
contractual restrictions, capital requirements and business prospects.
OUR COMMON STOCK CURRENTLY TRADES ON THE PINK SHEETS(R) AND,
AS A RESULT, THERE MAY BE LIMITED TRADING VOLUME IN THE STOCK, AS WELL
AS A GREATER SPREAD BETWEEN "BID" AND "ASKED" PRICES.
Our common stock currently trades on the Pink Sheets(R), a
quotation service operated by Pink Sheets, LLC. The Pink Sheets(R) does
not impose listing standards or requirements, does not provide
automatic trade executions, and does not maintain relationships with
quoted issuers. Issuers whose securities are traded on the Pink
Sheets(R) may experience a greater spread between the "bid" and "asked"
prices of their securities compared with securities traded on a
national securities exchange or Nasdaq, and a limited liquidity in
their securities. In addition, many investors have policies against the
purchase or holding of securities traded in the over-the-counter
markets. Trading in an over-the-counter market such as Pink Sheets(R)
has, and will continue to, affect both the trading volume and the
market value of our common stock for the foreseeable future.
VII. FINANCIAL STATEMENTS.
The following documents are filed as part of this report:
(1) Independent Auditors' Report..........................................F-1
(2) Financial statements:
Consolidated Balance Sheet..........................................F-2
Consolidated Statements of operations...............................F-3
11
Consolidated Statements of Changes in Shareholders' Equity..........F-4
Consolidated Statements of cash flows cumulative for the
years ending December 31, 2000 and 1999.........................F-5
Notes to Financial Statements.......................................F-6
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or other notes herein.
VIII. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company engaged the firm of Welch, Roberts & Amburn, LLP to conduct
the audits of its financial statements for the years ended December 31, 1999,
and 1998. Welch, Roberts & Amburn, LLP, resigned on May 31, 2001 due to
outstanding and past due fees owed by the Company.
In connection with Welch, Roberts & Amburn, LLP's audits of the
financial statements of the Company, there were no disagreements with Welch,
Roberts & Amburn, LLP on any matter of accounting principles, financial
disclosure, or auditing scope or procedures, which disagreements if not resolved
to their satisfaction would have caused them to make reference in connection
with their opinion to the subject matter of the disagreement.
The audit reports of Welch, Roberts & Amburn, LLP on the consolidated
financial statements for the years ended December 31, 1999, and 1998 did not
contain any adverse opinion or disclaimer of opinion; however, the unqualified
opinion contained a fourth paragraph with respect to an emphasis of a paragraph
discussing recurring losses from operations and decreases in working capital
issues confronting the Company.
The Company had also engaged the firm of Tauber & Balser, P.C. in
connection with the audit of the consolidated balance sheet of The Catapult
Group, Inc., and Subsidiary as of December 31, 1999, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the period from July 21, 1999 (inception) to December 31, 1999.
In connection with the audit as of December 31, 1999, and for the
period from July 21, 1999 (inception) to December 31, 1999, there was no
disagreement with Tauber & Balser, P.C. on any matter of accounting principles,
financial disclosure, or auditing scope or procedures, which disagreement if
not resolved to their satisfaction would have caused them to make reference in
connection with their opinion to the subject matter of the disagreement.
The audit report of Tauber & Balser, P.C. on the consolidated financial
statements for the year ended December 31, 1999 was issued with an unqualified
opinion.
On or about September 9, 2001, the Company notified Tauber & Balser,
P.C. that it had engaged the firm of Braverman & Company, P.C., to conduct the
audit of its financial statements for the year ended December 31, 2000.
12
PART III
IX. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
The following table sets forth all the directors, executive officers
and significant employees of the Company as of October 25, 2001. In April, 2001,
Bryan M. Johns resigned as an officer and director of the Company. On August 29,
2001, Walter H. Elliott, III resigned as an officer and director of the Company.
In the years prior to December 31, 2000, various officers, directors
and control persons have failed to timely report under section 16(a) of the
Exchange Act. Bryan M. Johns, Lyne Marchessault and Anguilla Equity Partners,
Inc., who were Directors, Officers and/or 10% stockholders, failed to timely
file reports under Section 16 of the Exchange Act with respect to the Company
during the Company's 2000 fiscal year. In February 2001, Mr. Johns and Ms.
Marchessault each filed a Form 5 under Section 16 of the Exchange Act with
respect to their holdings of relevant equity securities of the Company as of the
end of the Company's 2000 fiscal year. Walter H. Elliott III, the Company's
other officer and director as of December 31, 2000, had no transactions during
the Company's 2000 fiscal year subject to Section 16 reporting.
NAME AGE POSITION
Ronald A. Potts 54 President, CEO, and Chairman of the Board
Lyne Marchessault 43 Secretary and Director
Peggy Evans 53 Chief Financial Officer
Michael McLaughlin 58 Director
John Hill 55 Director
Ronald A. Potts, Chairman, President and Chief Executive Officer. Mr.
Potts was elected to our Board of Directors and appointed Chairman, Chief
Executive Officer and President of the Rainwire in August, 2001. From 1996 until
March, 2000, Mr. Potts was President of Londott Investments. Beginning in March,
2000, Mr. Potts was elected to the Board of Directors and was appointed Chairman
and Chief Executive Officer of Oasis Group, Inc. Mr. Potts holds an Economics
degree from the University of Western Ontario.
Lyne Marchessault, Secretary and Director. Ms. Marchessault was elected
to our Board of Directors and appointed Secretary in July, 2000. In addition, in
August, 2001, Ms. Marchessault was elected to the Oasis Board of Directors. From
1996 until January, 1998 Ms. Marchessault was the Director of International
Marketing and Public Relations for Ultimate Technographics. From January, 1998
until the present, Ms. Marchessault has been the managing member of Osprey
Investments, LLC. Ms. Marchessault holds a Marketing degree from Concordia
University and a Masters in Business Administration from McGill University.
Peggy Evans, Chief Financial Officer. Ms. Evans was appointed as our
Chief Financial Officer in August, 2001. Since October 1, 2000, Ms. Evans has
been the Chief Financial Officer for Oasis Group, Inc. Prior to that time, Ms.
Evans served as the President of Yakley
13
Management, Inc. and the Chief Operating Officer of Eston Hospitality, LLC. Ms.
Evans holds a B.S. degree in business from Pepperdine University.
Michael McLaughlin, Director. Mr. McLaughlin was elected to our Board
of Directors in August, 2001. In addition, Mr. McLaughlin was elected to the
Oasis Board of Directors in August, 2000. For the last 14 years, Mr. McLaughlin
has been the owner and President of American Flooring, Inc. Mr. McLaughlin holds
a bachelors degree in business from Florida Atlantic University.
John Hill, Director. Mr. Hill was elected to our Board of Directors in
August, 2001. Mr. Hill has also been a director of Oasis Group, Inc. since July,
2000. From 1996 until 1998, Mr. Hill was a Divisional Claims Superintendent with
State Farm Fire & Casualty Company and from 1998 until the present, Mr. Hill has
been a Section Manager with State Farm. Mr. Hill holds a B.S. in Business
Administration degree from the University of Tennessee.
Directors hold office until the next annual meeting of shareholders.
Officers are elected by the Board of Directors following the Annual meeting of
stockholders.
X. EXECUTIVE COMPENSATION.
The compensation paid in 1999 and 2000 to the Chief Executive Officer of the
Company and to the President of the Company is set forth in the table below. No
executive officers or any officer of a subsidiary had total compensation that
exceeded $100,000.
2000 SUMMARY COMPENSATION TABLE
THE COMPANY
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
NAME AND OTHER ANNUAL RESTRICTED OPTIONS LTIP ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION STOCK SARs PAYOUT COMPENSATION
POSITION YEAR ($) ($) ($) AWARDS (#) ($) ($)
----------------- ---- -------- ----- ------------ ---------- ------- ------ ------------
Bryan Johns 2000 $102,000 0 $7,200 0 0 0 0
President and 1999 $ -0- 0 0 0 0 0 0
CEO(1)
Walter H. Elliott 2000 $ 91,249 0 0 0 0 0 0
President and 1999 $ 75,000 0 0 93,174(3) 150,000(4) 0 0
CEO(2)
(1) Mr. Johns entered into an employment agreement with the Company on July
26, 2000, which paid him an annual salary of $102,000 and an annual car
allowance of $7,200. Mr. Johns resigned as President and Chief
Executive Officer in April, 2001.
(2) Mr. Elliott resigned as President and Chief Executive Officer in July
2000. Mr. Elliott's salary was $85,000 per year until his resignation
in July,2000. On July 26, 2000, Mr. Elliott entered into an employment
agreement with the Company that paid him an annual salary of $100,000.
(3) Represents shares of stock issued in lieu of salary for 1997 and 1998
when Mr. Elliott's salary was cut from $85,000 annually to $59,500.
This number does not reflect the 10:1 reverse stock split that occurred
in connection with the Catapult Share Exchange in July, 2000.
(4) Represents stock options granted in December, 1999. This number dos not
reflect the 10:1 reverse stock split that occurred in connection with
the Catapult Share Exchange in July, 2000.
There were no options granted to the Executive Officers of the Company
and its subsidiaries during the year ending December 31, 2000. The Company has
no stock appreciation rights ("SARs") outstanding.
14
XI. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT.
A. Security Ownership.
The following table sets forth information regarding ownership of the
Registrant's common stock by all persons who are known by the Registrant to own
more than 5% of the total outstanding shares, by all officers and directors of
the Company, and by all officers and directors as a group as of December 31,
2000. In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock subject to options
held by that person that are currently exercisable or exercisable within sixty
(60) days of the date of this Annual Report are deemed outstanding. These
shares, however are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Except as indicated in the footnotes
to this table and pursuant to applicable community property laws, each
shareholder named in the table has sole voting and investment power with the
shares set forth opposite such shareholder's name. Except as otherwise indicated
in the table, the address of the stockholders listed below is that of the
Company's principal executive office. Directors not included in the table below
do not hold Company securities.
SHARES BENEFICIALLY OWNED
AS OF DECEMBER 31, 2000
NAME AND ADDRESS NUMBER PERCENT
---------------- --------- -------
Ronald A. Potts(1) 300,000 3.9%
Lyne Marchessault(2) 231,461 3.0%
Osprey Investments, LLC(3) 231,461 3.0%
Monteith Commons, First Floor
2931 Piedmont Road, N.E.
Atlanta, Georgia 30305
Bryan M. Johns(4) 1,296,182 17.0%
Walter H. Elliott III(5) 19,484 *
Arnold Johns(6) 1,064,721 14.0%
320 Cameron Ridge Drive
Atlanta, GA 30328
Jake Cantrell 485,000 6.4%
P.O. Box 1249
Alpharetta, GA 30009
Anguilla Equity Partners, Inc. 1,481,350 19.5%
Keithley F.T. Lake
The Law Building, The Valley
Anguilla, BWI
15
SHARES BENEFICIALLY OWNED
AS OF DECEMBER 31, 2000
NAME AND ADDRESS NUMBER PERCENT
---------------- --------- -------
Cambridge Investments 462,922 6.1%
Keithley F.T. Lake
The Law Building, The Valley
Anguilla, BWI
Cambridge Capital, LLC 648,091 8.5%
3475 Lenox Road, N.E., Suite 995
Atlanta, GA 30326
All officers and directors as a 1,547,127 20.3%
group(7)
* Less than 1%.
(1) Mr. Potts became an officer and director in August, 2001.
(2) Includes 231,461 shares owned by Osprey Investments, LLC of
which Ms. Marchessault is the sole member.
(3) Does not include the 12,000,000 shares issued to Osprey in
August, 2001, and the subsequent exchange of 10,000,000 shares
of Common Stock for 500,000 shares of Series D Convertible
Preferred Stock in October, 2001.
(4) Mr. Johns resigned as an officer and director in April, 2001.
(5) Mr. Elliott resigned as an officer and director on August 29,
2001.
(6) Includes 648,091 shares owned by Cambridge Capital, LLC.
(7) Does include shares owned by Ronald Potts who did not become
an officer and director until August, 2001.
B. Changes in Control.
The Company's Share Exchange Agreement with Oasis Group, Inc. provides
for a change of control of the Company. Upon execution of the Share Exchange
Agreement, Walter H. Elliott, the President and a director of the Company
resigned, and Ronald A. Potts was elected to the Board of Directors of the
Company and was appointed President and Chief Executive Officer of the Company.
Additionally, Mike McLaughlin and John Hill were elected to the Board of
Directors and Peggy Evans was appointed Chief Financial Officer.
Furthermore, upon execution of the Share Exchange Agreement, the
Company issued 12,000,000 shares of its common stock to Osprey Investments, LLC
(of which Lyne Marchessault is the sole member) in satisfaction of loans in the
principal amount of $60,000.
16
XII. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In connection with the Share Exchange Agreement, Rainwire issued
12,000,000 shares of its common stock to Osprey Investments, LLC (of which Lyne
Marchessault, our Secretary and a director, is the sole member) in satisfaction
of loans in the principal amount of $60,000. In addition, in October, 2001,
Rainwire exchanged 500,000 of its Series D Convertible Preferred Stock for
10,000,000 shares of its common stock owned by Osprey. Ms. Marchessault
abstained from the Board of Directors vote concerning this exchange of shares.
Rainwire's officers and directors have ownership interests in Oasis.
Walter H. Elliott, a former officer and director of Rainwire, owns less than
1.0% of the outstanding common stock of Oasis, and Lyne Marchessault, our
Secretary and a director, owns approximately 6.0% of the outstanding common
stock of Oasis. Additionally, Ronald A. Potts, who was appointed to the Board of
Directors and as Chief Executive Officer and President in connection with the
Oasis Share Exchange, owns 11.6% of the outstanding common stock of Oasis.
Furthermore, Peggy Evans, our newly appointed Chief Financial Officer, owns
approximately 4.2% of the outstanding common stock of Oasis and John Hill and
Mike McLaughlin, newly appointed directors each own less than 1.0% of the
outstanding common stock of Oasis.
Additionally, in 2001, Oasis has loaned Rainwire approximately $43,000
to date. As of December 31, 2000, Rainwire had loaned Oasis $12,700.
As a result of the change in control of Rainwire in connection with the
Oasis Share Exchange Agreement, Rainwire has moved its business address to the
offices of Oasis. Until the closing of the Oasis Share Exchange, Oasis has
agreed to allow Rainwire to use Oasis' offices on a rent free basis, although
the parties have not entered into a formal agreement.
XIII. EXHIBITS AND REPORTS ON FORM 8-K.
A. Exhibits
3.1 Amended and Restated Certificate of Incorporation *
3.2 Amended and Restated Bylaws *
3.3 Certificate of Designation of Series A, B, and C Preferred Stock *
3.4 Certificate of Designation of Series D Convertible Preferred Stock
4.1 Rainwire Partners, Inc. 2000 Stock Option Plan
10.1 Plan and Agreement to Exchange Stock by and among Rainwire Partners,
Inc., Oasis Group, Inc. and the Shareholders of Oasis Group, Inc.
16.1 Letter on change in certifying accountant
23.1 Consent of Tauber & Balser, P.C.
* Incorporated by reference, filed as an Exhibit to report on
Form 10-KSB for 1998, filed on January 28, 2000 (SEC File No. 0-23892).
17
B. Reports on Form 8-K
During the fourth quarter of 2000, the Registrant filed no reports on
Form 8-K.
On October 17, 2001, the Registrant filed a Form 8-K report that
reported that the Registrant had abandoned its Information Statement on Schedule
14C filed with the Commission on March 5, 2001.
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: 10/26/01 /s/ Ronald A. Potts
-------- --------------------------------------------
Chairman of the Board, President,
Chief Executive Officer
Date: 10/26/01 /s/ Peggy Evans
-------- --------------------------------------------
Chief Financial and Accounting Officer
Date: 10/26/01 /s/ Lyne Marchessault
-------- --------------------------------------------
Secretary and Director
Date: 10/26/01 /s/ Mike McLaughlin
-------- --------------------------------------------
Director
Date: 10/26/01 /s/ John Hill
-------- --------------------------------------------
Director
19
TABLE OF CONTENTS
PAGE
----
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET F-2
STATEMENTS OF OPERATIONS F-3
STATEMENTS OF STOCKHOLDERS' EQUITY F-4
STATEMENTS OF CASH FLOWS F-5
NOTES TO FINANCIAL STATEMENTS F-6
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
RAINWIRE PARTNERS, INC.
ATLANTA, GEORGIA
We have audited the accompanying consolidated balance sheet of Rainwire
Partners, Inc. ( a Delaware corporation) and subsidiary as of December 31, 2000,
and the related consolidated statements of operations, changes in stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The consolidated
financial statements of Rainwire Partners, Inc. as of December 31, 1999, were
audited by other auditors whose report dated March 29, 2000, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Rainwire Partners,
Inc. as of December 31, 2000, and the results of its operations and its cash
flows for the year then ended in conformity with auditing standards generally
accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has suffered substantial
recurring losses and has a deficit working capital and equity as of December 31,
2000. It has also discontinued its entire business operations and is dependent
upon its shareholders for all cash flow requirements. The Company needs the
ability to develop additional sources of capital, and/or achieve profitable
operations through a merger or acquisition. These conditions raise substantial
doubt about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Braverman & Company, P.C.
Phoenix, Arizona
October 14, 2001
F-1
RAINWIRE PARTNERS, INC
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
ASSETS OF DISCONTINUED BUSINESS
CURRENT ASSETS
Cash $ 2,043
Accounts receivable, net of allowance
for doubtful accounts of $29,575 21,962
Related party advance, unsecured 12,700
------------
TOTAL CURRENT ASSETS 36,705
------------
OTHER ASSETS
Deposits 6,257
------------
------------
$ 42,962
============
LIABILITIES OF DISCONTINUED BUSINESS
CURRENT LIABILITIES
Shareholder loans $ 60,000
Accounts payable 469,517
Accrued business disposal costs and expenses 513,016
Other accrued liabilities 110,361
------------
TOTAL CURRENT LIABILITIES 1,152,894
------------
REDEEMABLE PREFERRED STOCK
Par value $.01; authorized 2,500,000 shares
outstanding, 24,959 shares 52,913
------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value; authorized, 20,000,000 shares
outstanding, 7,609,886 shares 7,610
Paid-in capital 1,321,472
Deficit accumulated since inception (2,491,927)
------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,162,845)
------------
$ 42,962
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-2
RAINWIRE PARTNERS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
July 21, 1999
Year Ended (Inception) to
December 31, December 31,
2000 1999
------------ --------------
(Restated)
REVENUES $ -- $ --
OPERATING EXPENSES -- --
------------ ------------
INCOME (LOSS) FROM CONTINUING OPERATIONS -- --
DISCONTINUED OPERATIONS
Loss from operations of discontinued business (1,494,708) (419,028)
Provision for loss on disposal of the business (578,191)
------------ ------------
NET LOSS $ (2,072,899) $ (419,028)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 6,198,828 5,555,064
============ ============
BASIC AND DILUTED LOSS PER COMMON SHARE
Income (Loss) from operations $ -- $ --
Loss from discontinued operations (0.24) (0.08)
------------ ------------
BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.24) $ (0.08)
============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-3
RAINWIRE PARTNERS INC.
CONSOLIDATED STATEMENT OF CHANGES IS SHAREHOLDERS' EQUITY
COMMON STOCK
----------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
--------- ------ ------------ ------------ ------------
BALANCE, JULY 21, 1999 -- $ -- $ -- $ -- $ --
Issuance of stock July 22, 1999, for:
Cash 1,388,766 1,389 148,611 150,000
Services 3,610,792 3,611 386,389 390,000
Acquisition of subsidiary 555,506 556 74,374 74,930
Net (loss) for the period (419,028) (419,028)
--------- ------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1999 (RESTATED) 5,555,064 5,555 609,375 (419,028) 195,902
Recapitalization, July 26, 2000 554,822 555 (188,329) (187,774)
Issuance of stock for:
Services at $.11 per share 480,000 480 52,320 52,800
Reduction in note payable at $1.25 per share 120,000 120 149,880 150,000
Cash at $.78 per share 900,000 900 699,100 700,000
Dividends accrued on redeemable preferred
stock (874) (874)
Net (loss) for the year (2,072,899) (2,072,899)
--------- ------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 2000 7,609,886 $7,610 $ 1,321,472 $ (2,491,927) $ (1,162,845)
========= ====== ============ ============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-4
RAINWIRE PARTNERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDING
DECEMBER 31, 2000 AND 1999
2000 1999
------------ ----------
(RESTATED)
CASH FLOWS FROM OPERATING ACTIVITIES
Continuing Operations $ -- $ --
Discontinued Operations
Adjustments to reconcile net loss to net cash flows
used by discontinued activities
Loss from operations of discontinued business (1,494,708) (419,028)
Loss on disposal of the business (578,191)
Stock issued for services 52,880 390,000
Depreciation and amortization 50,089 20,084
Goodwill impairment loss 460,960
Loss on disposal of equipment 11,037
Changes in current assets and liabilities
Accounts receivable (net of i20 purchase for 1999) 199,235 (175,480)
Other current assets 20,000
Accounts payable and accrued expenses (net of i20
purchase for 1999) 464,392 34,556
Provision for loss on disposal of the business 578,191
Net cash flows used by discontinued activities (236,115) (149,868)
------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (40,915) (6,358)
Payment for acquisition of subsidiary, net (221,480)
Cash received in recapitalization of the company 15,464
Increase in other assets 1,315
------------ ----------
Net cash flows from (to) investing activities (24,136) (227,838)
------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable 60,000 250,000
Repayment of notes payable (500,000)
Proceeds from issuance of common stock 700,000 130,000
------------ ----------
Net cash flows from financing activities 260,000 380,000
------------ ----------
NET CHANGE IN CASH FLOWS FOR THE YEAR (251) 2,294
CASH, BEGINNING OF PERIOD 2,294 --
------------ ----------
CASH, END OF PERIOD $ 2,043 $ 2,294
============ ==========
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Non-monetary net liabilities assumed in a recapitalization of
the Company on July 26, 2000
Fair value of equipment received $ 19,486
Liabilities assumed (222,724)
------------
Net non-monetary liabilities assumed (203,238)
Less cash received 15,464
------------
Total non-monetary net liabilities assumed $ (187,774)
============
Details of business acquisition
Fair value of assets acquired $ 636,428
Cash paid for the common stock (265,000)
Issuance of common stock (74,930)
Note payable (250,000)
----------
Liabilities assumed $ 46,498
==========
Due from stockholder for purchase of common stock $ 20,000
==========
Other
Accrued dividends on redeemable preferred stock $ 874
Common stock issued in settlement of note payable 150,000
============
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
Interest paid during the year $ 6,187 $ --
============ ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
F-5
RAINWIRE PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
NOTE 1 -- THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
Rainwire Partners, Inc., or RPID or the Company, (formerly
Envirometrics, Inc. or EVRM) was incorporated in Delaware in 1991. The Company
acquired all of the outstanding common stock of The Catapult Group, Inc.,
renamed Rainwire Partners, Inc. (RPIG), a Georgia corporation, on July 26, 2000,
in a qualifying reorganization under Section 368 (a)(1)(B) of the Internal
Revenue Code of 1986. Prior to the stock exchange, the Company's operations had
involved consulting services in environmental and occupational health matters in
addition to providing the services of an American Industrial Hygiene Association
and National Voluntary Laboratory Accreditation Program, principally in the
Charleston, South Carolina area, with sales throughout the United States. RPIG
was formed in July 1999, to provide internet consulting, systems development and
integration as well as marketing and communications solutions to Global 2000 and
middle-market companies. Its operations were discontinued in April 2000.
On December 31, 2000, management adopted a plan to dispose of the
entire business of the Company. Because the Company sustained a loss on the
discontinuation of its business as of December 31, 2000 as well as a loss on the
disposal of the business at that date, the results of operations for the year
2000 have been presented to conform to those results. The financial statements
for the prior year have been restated to conform to the current year's
presentation. The fiscal year end of the Company is December 31.
PRINCIPLES OF CONSOLIDATION
The Company's consolidated financial statements as of December 31, 2000
and 1999 include the financial statements of the Company and subsidiaries for
all periods presented. All significant intercompany accounts and transactions
have been eliminated.
FINANCIAL STATEMENT PRESENTATION
The historical cost basis of all assets and liabilities of RPIG and its
former and present consolidated operating results have been presented from July
21, 1999 (date of inception) to December 31, 2000. For accounting purposes, the
acquisition has been treated as a recapitalization of RPIG. RPIG is considered
the accounting acquirer, because it became the owner of 90% of the total shares
outstanding of the common stock of RPID, on a fully diluted basis. The
consolidated statements of operations included herein are those of RPIG and its
subsidiary i20, Inc. The former operating results of EVRM have been eliminated.
The consolidated balance sheet presented herein includes all assets and
liabilities of EVRM as of the date of recapitalization at fair value, as well as
RPIG and its subsidiary, i20, Inc. at historical cost.
F-6
The accompanying financial statements have given effect to a reverse
stock split of 10 to 1 on July 26, 2000, and the recapitalization mentioned
above, as if they had occurred at the inception of RPIG.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America (GAAP) requires
management to make estimates and assumptions that affect the reported amounts
and the disclosure of contingent amounts in the Company's financial statements
and the accompanying notes. Actual results could differ from those estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with the original
maturities of three months or less to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, disclosures about
fair value of financial instruments, defines the fair value of a financial
instrument as the amount at which the instrument could be exchanged in a current
transaction between willing parties. The carrying value of the Company's
financial instruments, which include cash, shareholder advance and loans,
accounts payable and accruals, approximate fair values due to the short-term
maturities of such instruments.
GOODWILL
Goodwill was recorded in 1999 in connection with the acquisition of
i20, Inc. by RPIG. It was being amortized over a 10 year period. During late
2000 this asset became impaired and was written off as of December 31, 2000, due
to the discontinued operations of the business. Amortization expense of goodwill
for the years 2000 and 1999 was $25,143 and $16,762, respectively.
REVENUE RECOGNITION
Revenues were recorded as services were performed and costs were
recorded as incurred. The Company at each reporting date reviewed the status of
major contracts and immediately recorded losses in total, if any. Advance
billings and collections relating to future services, if any, were recorded as
deferred revenue and recognized when revenue was earned.
ADVERTISING EXPENSE
Advertising expense included the cost of sales brochures, print
advertising in trade publications, and trade shows. The cost of advertising was
expensed as incurred. Advertising expense for 2000 and 1999 was $93,268 and
$8,602, respectively.
F-7
INCOME TAXES
Income taxes are provided for using the liability method of accounting
in accordance with Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes." A deferred tax asset or liability is recorded for
all temporary difference between financial and tax reporting of which
depreciation is the most significant. Deferred tax expense (benefit) results
from the net change during the year of deferred tax assets and liabilities.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to more likely than not realized in future tax
returns. Tax law and rate changes are reflected in income in the period such
changes are enacted.
As of December 31, 1999, RPIG and its subsidiary had a deferred tax
asset of $168,000, principally due to the deferral of a deductible expense for
common stock issued for services. A valuation allowance equal to this amount was
also provided at that date, due to the uncertainty of its ultimate utilization,
which brought the resulting tax expense for 1999 to zero. As of December 31,
1999, the Company had a net operating loss carry-forward of approximately
$30,000, which would expire, if unused in 2019. EVRM had a deferred tax asset as
of the same date of $1,785,860, however, a valuation allowance was recorded for
an equivalent amount resulting in no tax benefit recorded since its inception.
The net operating loss carry-forwards for the Company on a consolidated basis
approximate $6,500,000 as of December 31, 2000 and will expire at various dates
through year 2020, if unutilized. Due to a more than 50% change in ownership of
the Company's outstanding common stock for the latest testing period ended July
26, 2000, a Code Section 382 limitation on use of the loss carry-forwards became
substantially limited. In addition, it is not probable that any of the limited
losses can be utilized, since the Company contemplates that the proposed stock
exchange referred to in the subsequent events footnote will not only result in a
further limitation of the carry-forward losses, but will cause a loss of
continuity of business which is required under that Code Section of the Internal
Revenue Service in order to maintain loss carry-forwards of an acquired company.
For the year ended December 31, 2000, the increase in the deferred tax
asset due for the year 2000 was approximately $800,000. This amount was offset
completely by a valuation allowance of equal amount, since management cannot
determine, at the present time, that it is more likely than not that such
benefit will be utilized in future periods.
LOSS PER SHARE
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS No. 128) "Earnings Per Share."
Basic loss per share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding during
the period after giving effect to the results of the reverse stock split
referred to above.
GOING CONCERN
The Company's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company's
ability to continue in existence is dependent upon its
F-8
ability to develop additional sources of capital, and/or achieve profitable
operations. The accompanying financial statements do not include any adjustments
that might result from the outcome of this uncertainty. Management's plan is to
acquire a potentially profitable company, such as contemplated by the proposed
stock exchange arrangement referred to in the subsequent events footnote, having
the ability to generate additional cash flows from either the sale of securities
or through operations to sustain the Company's future existence.
NOTE 2 -- REDEEMABLE PREFERRED STOCK
The Company had outstanding as of December 31, 1999, Series A, B and C
preferred stock with a $2 stated value. All shares issued may be "put" to the
Company for a cash price. All shares are convertible in common shares at the
rate of 3 for 1 for Series A, and the balance, 5 for 1. The Series A shares were
issued in 1997 for cash, the remaining shares were issued in 1998 to certain
officers and related parties in exchange for the conversion of outstanding debt
of the Company. In April 2000 all of the Series A and B preferred shares, and
2/3 of the Series C preferred shares were converted to common stock of the
Company, including accrued dividends. Total common shares issued to effect the
conversion was 167,605, valued at $670,420, or $4.00 per share. The conversion
resulted in a gain of $56,000, since the Series A shares were converted at a
value of $.80 less per share than the $2 value previously recorded for those
70,000 preferred shares. As of December 31, 2000, there were 24,959 Series C
preferred shares outstanding valued at $52,913 including accretion of $2,995.
NOTE 3 -- OPTIONS AND WARRANTS
In 1994, the Company adopted a stock option plan under which incentive
and non-qualifying options to purchase the Company's common stock could be
granted to employees. The Company applied Accounting Principles Board Opinion
No. 25 whereby no compensation cost related to stock options is recognized as an
expense until the time the employee is subject to income taxation. Had
compensation cost been determined pursuant to SFAS No. 123 "Accounting for
Stock-Based Compensation" been recorded, the effect on net loss and loss per
share would not have been material.
As of December 31, 2000 the Company had outstanding from 1999, 81,000
options, including 30,000 options with an exercise price of $1.00 per share,
post split. The remaining options have exercise prices in excess of $23.80 per
share, post split. An additional number of options were granted during 2000 at
$1.00 per share, post-split, however, that information is not presently
available, but all options would expire within one-year from the date of
issuance, in the opinion of legal counsel. There were no warrants outstanding at
December 31, 2000.
NOTE 4 -- COMMITMENTS AND CONTINGENCIES
LEGAL ACTIONS
The Company is involved with several legal actions, principally as
defendant. These actions involve outstanding liabilities of the Company
including those of subsidiaries. All known outstanding liabilities, including
anticipated legal fees and costs have been recorded in the accompanying
financial statements. Following are two such actions.
F-9
Azimuth Laboratory, Inc., a subsidiary of EVRM generated hazardous
waste during the time of its operations which ceased in April 2000. According to
a former landlord, Azimuth was responsible for a hazardous waste cleanup on the
leased premises, and he is seeking recovery of approximately $130,000, including
the cleanup and remaining payments due under the terms of the lease agreement
which is to expire in December 2001. A motion for summary judgment is expected
to be heard by the end of 2001. Only the remaining lease obligation of $66,271
has been recorded as of December 31, 2000.
As of December 31, 2000 a judgment against the Company was obtained by
the holder of the remaining Series C redeemable preferred stock for $21,666
relating to the failure by the Company to redeem 8,333 of those shares and to
pay dividends when due. Substantially all of that amount was recorded as of
December 31, 2000.
DISPOSITION OF CORPORATE PROPERTY
Approximately 20 employees of the Company were still employed when the
decision was made to discontinue the operations of the Company on December 31,
2000. Substantially all employees either resigned or were terminated by August
31, 2001. No payroll tax reports have been filed with taxing authorities for any
wages paid in 2001, although related payroll taxes were paid. It is probable
that all compensation has not been reported for equipment, vehicles and other
corporate property obtained by employees when the Company ceased its operations
in 2001. Accordingly, the Company and/or its employees may have some liability
for payroll and/or sales taxes in connection with this matter.
SBA LOAN
Azimuth Laboratories, Inc. sold certain assets to a party in April 2000
who assumed the remaining balance of an underlying loan from the Small Business
Administration. However, the Company's subsidiary was not relieved of liability
on the obligation, and remains contingently liable for its balance until
paid-off in approximately 3 years. The subsidiary was owed approximately $30,000
by the purchaser, however, that obligation has not been paid to the Company, and
some or all of that amount is being held in escrow pending either the payoff of
the SBA loan, or when the purchaser is successful in becoming the only principle
on the note. The outstanding balance of the SBA loan less the amount owed the
Company at December 31, 2000 approximates $50,000, which is included in accrued
liabilities as of December 31, 2000.
NOTE 5 -- OPERATING LEASES
Included in the accrual for estimated loss on disposal of the business
are future rentals on lease obligations totaling approximately $300,000, of
which $ 228,734 relates to the balance owing on a 5 year lease expiring in 2005,
which had annual lease payments of approximately $50,000 per year. The Company
is seeking to mitigate the outstanding lease liability as the landlord had
seized and/or sold some of the equipment in partial satisfaction of the past due
lease rentals.
F-10
NOTE 6 -- CONSULTING AGREEMENTS
In July 2000 RPIG formalized with two individuals, consulting
agreements which provided for their continuing consulting services for a term of
two years from June 1999. They received a total of 650,000 shares of RPID common
stock valued at $.10 per share, which was exchanged in the aforementioned merger
for the Company's common stock. The agreements terminated in July 2001 without
further compensation.
In November 2000 the Company entered into an agreement with a
shareholder of the Company for consulting services to be provided for a period
of one year from November 10, 2000 for a total consideration of 480,000 shares
of the Company's common stock valued by the Board of Directors at $.11 per
share. The shares were issued in November 2000. The shareholder had an existing
agreement which was to expire in June 2001, however, expanded services were
negotiated and the current agreement was adopted to provide for those services
and an extension of time.
NOTE 7 -- EMPLOYMENT AGREEMENTS
The Company entered into two employment agreements covering the
services of its Chief Executive Officer and a Vice President for 3 years from
July 26, 2000, for total minimum annual compensation of $102,000 and $100,000,
respectively, in addition to certain other benefits. As a result of the
discontinued operations, these employees remaining as of December 31, 2000
resigned as of August 31, 2001. No accrual has been provided for any
compensation after February 2001, as current management believes none is owed.
NOTE 8 -- DISCONTINUED OPERATIONS
On December 31, 2000, management adopted a plan to discontinue the
operations of the Company and to liquidate its assets. Accordingly, the
accompanying financial statements for the year 2000 have given effect to this
date as the measurement date, since a loss was sustained for both discontinued
operations and disposal of the business. The disposal loss was provided for all
estimated costs and expenses to be incurred during the post phase-out period.
The financial statements for the prior year have been restated to conform with
the current year's presentation.
NOTE 9- SUBSEQUENT EVENTS
ISSUANCE OF COMMON STOCK
On August 29, 2001, the Company issued in exchange for the $60,000
shareholder loans outstanding as of December 31, 2000, 12,000,000 shares of the
Company's common stock, which is more than 50% of the total outstanding common
stock of the Company after issuance. In addition, it issued 100,000 shares of
common stock to an attorney in exchange for $2,500 of legal services he provided
for the Company.
PROPOSED EXCHANGE OF STOCK
On August 29, 2001, the Company entered into a Plan and Agreement to
exchange stock with Oasis Group, Inc. (Oasis), pursuant to Section 368(a)(1)(B)
of the Internal Revenue Code.
F-11
Oasis is principally owned and controlled by a shareholder of the Company who
became the Company's President and Chief Executive Officer on August 30, 2001.
The exchange is to be transacted after certain conditions precedent have been
accomplished, at which time a formal recapitalization of Oasis is contemplated.
In 2001, Oasis loaned approximately $43,000 to the Company. As of December 31,
2000, Oasis was advanced $12,700.
At the time the definitive closing is completed, all of the outstanding
common stock of Oasis will be acquired by the Company. Oasis will be considered
the accounting acquirer since it will own the majority of the outstanding shares
of the Company. For accounting purposes the historic transactions of Oasis will
replace those of the Company for presentation of results of operations and cash
flows, whereas Oasis will be consolidated with the Company for presentation of
its consolidated financial position. Prior to closing, the Company plans to
increase its authorized common stock and reverse split its present outstanding
shares.
OTHER
As of the date of this report, the Company's filings with the
Securities and Exchange Commission are not current which affected its ability to
provide quotations on the OTC Bulletin Board ("OTCBB").
F-12
EX-3.4
3
g72313ex3-4.txt
CERTIFICATE OF DESIGNATION OF SERIES D
EXHIBIT 3.4
CERTIFICATE OF DESIGNATION
OF
SERIES D CONVERTIBLE PREFERRED STOCK
OF
RAINWIRE PARTNERS, INC.
Pursuant to Section 151 of the Delaware General Corporation Law,
Rainwire Partners, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the provisions of the Delaware General
Corporation Law, and pursuant to authority conferred upon the Board of Directors
of the Corporation (the "Board") by the Amended and Restated Certificate of
Incorporation of the Corporation, the Board, by a Unanimous Written Consent
dated October 15, 2001, adopted the following resolution: (a) authorizing the
creation and issuance of Series D Convertible Preferred Stock of the
Corporation, and (b) defining with specificity the terms of said Series, as
follows:
RESOLVED, that pursuant to authority expressly granted to and vested in
the Board of Directors by the Certificate of Incorporation, as amended, of the
Corporation, the Board hereby ratifies its creation of the following Series (the
"Series") of Preferred Stock (the "Preferred Stock"), and authorizes the
issuance thereof, and hereby fixes the designation thereof, preferences and
relative, participating, optional and other special limitations or restrictions
thereon (in addition to the designations, preferences and relative,
participating and other special rights, and the qualifications, limitations or
restrictions thereof, set forth in the Certificate of Incorporation, as amended,
of the Corporation, which are applicable to the Preferred Stock of all Series
and Classes) as follows:
WRITTEN CONSENT TO ACTION
OF THE
BOARD OF DIRECTORS
OF
RAINWIRE PARTNERS, INC.
October 15, 2001
Pursuant to Section 141 of the General Corporation Law of the State of
Delaware, the undersigned, being all of the directors of Rainwire Partners,
Inc., a Delaware corporation (the "Corporation"), acting without notice of a
meeting, hereby waive notice and the holding of such meeting and consent to,
adopt and vote in favor of the following resolutions:
WHEREAS, the Board of Directors of the Corporation desires to define
the rights, preferences and privileges of the Series D Convertible Preferred
Stock.
BE IT RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation pursuant to Part B of its
Amended and Restated Certificate of Incorporation, a series of preferred shares
is hereby established and given the designation of "Series D Convertible
Preferred Stock", whose voting powers, designations, preferences, rights,
restrictions, limitations, qualifications, terms and conditions are as follows:
1. NUMBER OF AUTHORIZED SHARES. The initial number of authorized
shares of Series D Convertible Preferred Stock shall be Five Hundred Thousand
(500,000), par value $0.01 per share.
2. VOTING RIGHTS. On all matters on which the holders of Common
Stock are entitled to vote, each holder of Series D Convertible Preferred Stock
shall be entitled to ten (10) votes for each share of Series D Convertible
Preferred Stock standing in his or her name on the books of the Corporation. In
addition, the holders of the Series D Convertible Preferred Stock shall be
entitled to elect the majority of the Corporation's Board of Directors. The
ability of the holders of the Series D Convertible Preferred Stock to elect the
majority of directors of the Corporation shall not be affected or impaired by a
partial redemption of the Series D Convertible Preferred Stock by the Company
pursuant to paragraph 7.
3. DIVIDENDS. The holders of the Series D Convertible Preferred
Stock shall be entitled to receive dividends at a rate of twelve percent (12%)
per annum out of any assets of the Corporation legally available therefor, when,
if and as declared by the Board of Directors. Dividends on Series D Convertible
Preferred Stock ("Series D Convertible Preferred Dividends") shall be payable on
a quarterly basis. Series D Convertible Preferred Dividends shall cumulate so
that, if the Corporation is unable to pay or if the Board of Directors fails to
declare Series D Convertible Preferred Dividends for any quarter, such Series D
Convertible Preferred Dividends nevertheless shall accrue and be payable in
subsequent quarters. Any payment of Series D Convertible Preferred Dividends by
the Corporation in any year shall first be applied to the Series D Convertible
Preferred Dividends due for that year, and then towards any accrued but unpaid
Series D Convertible Preferred Dividends for prior years, in reverse
chronological order. All accrued and unpaid Series D Convertible Preferred
Dividends must be declared and paid or set aside for payment (a) pari passu and
on a pro rata basis with all dividends payable upon the Series D Convertible
Preferred Stock; (b) before any dividends or other distributions may be paid
with respect to the Common Stock of the Corporation; and (c) before the
Corporation redeems, purchases or otherwise acquires for consideration any
Common Stock.
4. LIQUIDATION PREFERENCE.
(a) LIQUIDATION VALUE. In the event of any Liquidation
Event, the holders of the Series D Convertible Preferred Stock shall be
entitled pari passu to be paid, before any distribution or payment is
made upon any Common Stock, an amount in cash equal to the Series D
Liquidation Value of each share of Series D Convertible Preferred Stock
held by them, plus an amount equal to all declared and unpaid dividends
thereon. Thereafter holders of Series D Convertible Preferred Stock
shall be entitled to participate in the distribution of any remaining
assets pro rata with the holders of Common Stock on an as converted
basis. If upon any Liquidation Event, the Corporation's assets to be
distributed among the holders of the Series D Convertible Preferred
Stock are insufficient to permit payment in full of the Series D
Liquidation Value to such holders, such assets shall be distributed
ratably among them based upon the aggregate Series D Liquidation Value
of the Series D Convertible Preferred Stock held by each holder.
(b) NOTICE OF LIQUIDATION EVENT. At least fifteen (15)
days' previous notice by mail, postage prepaid, shall be given to the
holders of record of the Series D Convertible Preferred Stock of any
Liquidation Event, such notice to be addressed to each such holder at
the address of such holder appearing on the books of the Corporation or
given by such holder to the Corporation for the purpose of notice, or
if no such address appears or is so given, at the place where the
principal office of the Corporation is located. Such notice shall state
the anticipated date fixed for the Liquidation Event, the Series D
Liquidation Value, and shall call upon such holder to surrender to the
Corporation on said date at the place designated in the notice such
holder's certificate or certificates representing their Series D
Convertible Preferred Stock; provided, however, that failure to so
surrender such certificate or certificates shall not affect such
holder's rights under this Section 4.
(c) DEFINITIONS.
(i) Liquidation Event. For purposes of this
Agreement, a "Liquidation Event" shall mean any liquidation,
dissolution or winding up of the Corporation whether voluntary
or involuntary.
(ii) Series D Liquidation Value. For purposes of
this Agreement, "Series D Liquidation Value," shall mean
$500,000.
5. RANKING. The Series D Convertible Preferred Stock shall rank:
(a) on parity with any and all other classes of Preferred Stock of the
Corporation issued and outstanding as of the date hereof; (b) senior to all of
the Corporation's Common Stock; and (c) senior to any other
2
class or series of capital stock of the Corporation hereafter created not
specifically ranking by its terms on parity with any Series D Convertible
Preferred Stock, in each case as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
6. CONVERSION RIGHTS.
(a) CONVERSION. At any time, each share of Series D
Convertible Preferred Stock, at the option of the holder thereof, may
be converted into and exchanged for Common Stock as set forth herein;
provided, that all shares of Series D Convertible Preferred Stock held
by such holder are converted and exchanged. The Series D Convertible
Preferred Stock is fully convertible into Ten Million (10,000,000)
shares of the Common Stock of the Corporation (with appropriate
adjustments for stock splits, stock dividends, recapitalization and
other similar transactions) which shall be distributed pro rata among
the holders of Series D Convertible Preferred Stock in accordance with
the number of shares of Series D Convertible Preferred Stock held by
such holder. Provided that, if the Corporation shall fail to pay a
dividend to the holders of Series D Convertible Preferred Stock for two
consecutive quarters, the Series D Convertible Preferred Stock shall be
fully convertible into Fifty Million (50,000,000) shares of the Common
Stock of the Corporation (with appropriate adjustments for stock
splits, stock dividends, recapitalization and other similar
transactions) so long as such dividends remain unpaid. Each holder of
Series D Convertible Preferred Stock who desires to exercise the right
to convert his shares of Series D Convertible Preferred Stock to Common
Stock must provide written notice to the Corporation. If there are any
declared by unpaid dividends or other amounts due on or in respect of
such shares, such dividends and other amounts shall remain due to the
holders of the Series D Convertible Preferred Stock notwithstanding the
conversion of the Series D Convertible Preferred Stock into Common
Stock.
(b) ADJUSTMENTS.
(i) In case, at any time after the date hereof,
of any capital reorganization or any reclassification of the
stock of the Corporation (other than as a result of a stock
dividend payable on Common Stock in the form of Common Stock
or subdivision, split-up or combination involving the Common
Stock), the shares of Series D Convertible Preferred Stock,
after such capital reorganization or reclassification, shall
be convertible into the kind and number of shares of stock or
other securities or property of the Corporation or otherwise
to which such holder would have been entitled if immediately
prior to such capital reorganization or reclassification he,
she or it had converted his, her or its shares of Series D
Convertible Preferred Stock into Common Stock. The provisions
of this clause (i) shall similarly apply to successive capital
reorganizations or reclassifications.
(ii) All calculations under this Section 5 shall
be made to the nearest cent or to the nearest one hundredth
(1/100) of a share, as the case may be.
3
(iii) Upon the occurrence of each adjustment or
readjustment pursuant to this Section 5, the Corporation at
its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare
and furnish to each holder of Series D Convertible Preferred
Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation, upon
written request at any time of any holder of Series D
Convertible Preferred Stock, shall furnish or cause to be
furnished to such holder a like certificate setting forth (A)
such adjustments and readjustments, (B) the Series D
Conversion Rate before and after such adjustment or
readjustment, and (C) the number of Common Stock and the
amount, if any, of other property which at the time would be
received upon the conversion of such holder's shares of Series
D Convertible Preferred Stock.
7. REDEMPTION. At any time, the Corporation may redeem the Series
D Convertible Preferred Stock by paying in cash therefor an amount equal to the
sum of (i) any accrued but unpaid dividends, and (ii) $1.00 per share redeemed
(the "Series D Convertible Redemption Price"). Upon payment of the Series D
Convertible Redemption Price, all rights of the holders of the redeemed shares
of Series D Convertible Preferred Stock as holders of Series D Convertible
Preferred Stock shall cease with respect to such shares, and such shares shall
not thereafter be transferred on the books of the Corporation or be deemed to be
outstanding for any purpose whatsoever. The shares of Series D Convertible
Preferred Stock not redeemed shall remain outstanding and entitled to all the
rights and preferences provided herein. Notwithstanding the foregoing, on the
five-year anniversary of the issuance of the Series D Convertible Preferred
Stock, the Corporation shall redeem all of the shares of Series D Convertible
Preferred Stock then outstanding.
8. ISSUE TAX. The issuance of certificates for shares of Common
Stock upon conversion of the Series D Convertible Preferred Stock shall be made
without charge to the holders thereof for any issuance tax in respect thereof,
provided that the Corporation shall not be required to pay any income or similar
taxes of a holder arising in connection with a conversion or any tax that may be
payable in respect of any transfer involved in the issuance and delivery of any
certificates in a name other than that of the holder of the Series D Convertible
Preferred Stock which is being converted.
9. NO IMPAIRMENT. The Corporation, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, shall not avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the Corporation,
but shall at all times in good faith assist in the carrying out of all the
provisions hereto and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion and other rights of the holders
of the Series D Convertible Preferred Stock against impairment.
10. CLOSING OF BOOKS. The Corporation will at no time close its
transfer books against the transfer of any Series D Convertible Preferred Stock
or of any shares of Common Stock issued or issuable upon the conversion of any
shares of Series D Convertible Preferred
4
Stock in any manner that interferes with the timely conversion of such Series D
Convertible Preferred Stock.
11. PREFERRED SHAREHOLDER APPROVALS. Without the prior vote or
consent of two-thirds of the holders of the Series D Convertible Preferred
Stock, voting as a separate class, the Corporation shall not amend, alter, or
repeal its Certificate of Incorporation or its Bylaws in any manner adverse to
the holders of Series D Convertible Preferred Stock.
12. RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
at all times shall reserve and keep available out of its authorized but unissued
Common Stock, solely for the purpose of effecting the conversion of the shares
of Series D Convertible Preferred Stock, such number of its Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series D Convertible Preferred Stock; and if at any time
the number of authorized but unissued Common Stock shall not be sufficient to
effect the conversion of all then outstanding shares of Series D Convertible
Preferred Stock, the Corporation will take such corporate action as may be
necessary to increase its authorized but unissued Common Stock to such number of
shares as shall be sufficient for such purpose.
13. NO REISSUANCE OF SERIES D CONVERTIBLE PREFERRED STOCK. No
share or shares of Series D Convertible Preferred Stock acquired by the
Corporation by reason of purchase, conversion or otherwise shall be reissued,
and all such shares shall be canceled, retired and eliminated from the shares
which the Corporation shall be authorized to issue.
14. GENERAL. In addition to the foregoing provisions, the Series D
Convertible Preferred Stock shall be subject to, and shall be entitled to the
benefits of, any terms and conditions set forth in the Certificate of
Incorporation of the Corporation with respect to preferred stock generally.
FURTHER RESOLVED, that the officers of the Corporation be, and they
hereby are, authorized and directed in the Corporation's behalf to execute,
deliver and file such instruments, documents and agreements, and to take such
other actions, as they consider necessary or appropriate to implement the
foregoing resolutions.
5
[Signature page to Certificate of Designation of Series D Convertible
Preferred Stock of Rainwire Partners, Inc.]
IN WITNESS WHEREOF, the undersigned have executed this consent as of
the _____ day of October, 2001.
By
------------------------------------------
Lynne Marchessault
By
------------------------------------------
Ronald Potts
By
------------------------------------------
Mike McLaughlin
By
------------------------------------------
John Hill
Constituting all of the Directors of Rainwire
Partners, Inc.
6
EX-4.1
4
g72313ex4-1.txt
RAINWIRE PARTNERS, INC. 2000 STOCK OPTION PLAN
EXHIBIT 4.1
RAINWIRE PARTNERS, INC. 2000 STOCK OPTION PLAN
ARTICLE I
NAME AND PURPOSE
SECTION 1.01. NAME. The name of the plan shall be the Rainwire
Partners, Inc. 2000 Stock Option Plan (the "Plan").
SECTION 1.02. PURPOSE OF THE PLAN. The purpose of the Plan is to enable
the Employees, Consultants and Directors of Rainwire Partners, Inc. (the
"Company") to share in the growth and prosperity of the Company by encouraging
stock ownership by Employees, Consultants and Directors and to assist the
Company to obtain and retain key management personnel. Either Incentive Stock
Options or Nonqualified Stock Options may be granted to Employees of the Company
under the Plan but only Nonqualified Stock Options may be granted to
Non-Employee Directors and Consultants under the Plan.
ARTICLE II
DEFINITIONS
As used herein, the following definitions shall apply.
"Affiliate" has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations of the Securities Exchange Act of 1934, as amended.
"Agreement" shall mean a written agreement entered into in accordance
with Paragraph 5(c).
"Board" shall mean the Board of Directors of the Company.
"Change of Control" means the approval by the Company's shareholders of
(a) a merger or consolidation of the Company with or into another corporation
(other than a merger or consolidation in which the Company is the surviving
corporation and which does not result in any capital reorganization or
reclassification or other change in the Company's then outstanding shares of
common stock), (b) a sale or disposition of all or substantially all of the
Company's assets, or (c) a plan of liquidation or dissolution of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation Committee of the Board. If the
Board does not have a Compensation Committee, the Board shall constitute the
Compensation Committee.
"Common Stock" shall mean the common stock of the Company.
"Company" shall mean Rainwire Partners, Inc., a Delaware corporation.
"Consultant" shall mean any person, including an advisor, who is not an
employee of the Company but who renders services to the Company or any
Subsidiary or Affiliate and is compensated for such services.
"Continuous Service" shall mean the absence of any interruption or
termination of service as an Employee or Consultant of the Company or a
Subsidiary or Affiliate. Continuous Service shall not be considered interrupted
in the case of (a) sick leave, military leave or any other leave of absence
approved by the Company, (b) transfers between payroll locations of the Company
or between the Company, an Affiliate or a successor, (c) a Director's
performance of services in an emeritus or advisory capacity, or (d) changes
between a Participant's status as an Employee or Director provided the
Participant is continuously performing services for the Company or an Affiliate.
"Director" shall mean any member of the Board and any member of the
board of directors of any Affiliate that the Board has by resolution designated
as being eligible for participation in this Plan.
"Disability" shall mean a physical or mental condition, which in the
sole and absolute discretion of the Committee, is reasonably expected to be of
indefinite duration and to substantially prevent a Participant from fulfilling
his or her duties or responsibilities to the Company or an Affiliate.
"Effective Date" shall mean the date specified in Section 12.01 hereof.
"Employee" shall mean any person (including, if appropriate, any
Officer or Director) employed by the Company or by any Subsidiary or Affiliate
of the Company. The Payment by the Company of a director's fee to a Director
shall not be sufficient to constitute "employment" of such Director by the
Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exercise Price" shall mean the price per Optioned Share at which an
Option may be exercised.
"Fair Market Value" shall mean the fair market value of the Common
Stock, as determined under Section 7.02 hereof.
"Incentive Stock Option" shall mean any stock option granted to an
Employee under the Plan, which the Committee intends at the time it is granted
to be an incentive stock option within the meaning of Section 422 of the Code.
"Named Executive" shall mean any individual who, on the last day of the
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.
2
"Non-Employee Director" shall mean any person who is a member of the
Board but is not an Employee of the Company and has not been an Employee of the
Company or any subsidiary of the Company at any time during the preceding twelve
(12) months. Service as a director does not in itself constitute employment for
purposes of this definition.
"Nonqualified Stock Option" shall mean any stock option granted to an
Employee, Non-Employee Director or Consultant under the Plan which is not a
stock option within the meaning of Section 422 of the Code.
"Option" shall mean an Incentive Stock Option or a Nonqualified Stock
Option granted pursuant to this Plan.
"Optioned Shares" shall mean Shares subject to an Option granted
pursuant to this Plan.
"Participant" shall mean any person who receives an Option pursuant to
the Plan.
"Permanent and Total Disability" shall mean, as determined by the
Committee, an illness or injury of a potentially permanent nature, expected to
last for a continuous period of at least twelve (12) months, certified by a
physician selected by or satisfactory to the Committee, which prevents the
Participant from engaging in any occupation for wage or profit for which the
Participant is reasonably fitted by training, education or experience.
"Plan" shall mean this Rainwire Partners, Inc. 2000 Stock Option Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated under the Exchange Act,
as amended, or any successor provision.
"Share" shall mean one share of Common Stock.
"Year of Service" shall mean a full twelve-month period, measured from
the grant date of an Option and each annual anniversary of that date, during
which a Participant has not terminated Continuous Service for any reason.
ARTICLE III
TERM OF THE PLAN AND OPTIONS
SECTION 3.01. TERM OF THE PLAN. This Plan shall remain in effect until
terminated by the Board. Termination of the Plan shall not affect any Options
previously granted, and such Options shall remain valid and in effect until they
have been earned and paid, or by their terms expire or are forfeited. No Option
shall be granted under the Plan after ten years from the Effective Date.
SECTION 3.02. TERM OF OPTIONS. The term of each Option granted under
the Plan shall be established by the Committee, but shall not exceed 10 years;
provided, however, that in the case of an Employee who owns Shares representing
more than 10% of the outstanding Common Stock at the time an Incentive Stock
Option is granted, the term of such Incentive Stock Option shall not exceed five
years.
3
ARTICLE IV
SHARES SUBJECT TO THE PLAN
Except as otherwise required under Article 9, the aggregate number of
Shares deliverable pursuant to Options shall be 1,050,000 Shares. Such Shares
may either be authorized but unissued Shares, Shares held in treasury, or Shares
held in a grantor trust created by the Company. If any Option should expire,
become unexercisable, or be forfeited for any reason, the Shares subject to the
Option shall, unless the Plan shall have been terminated, be available for the
grant of additional Options under the Plan.
ARTICLE V
ADMINISTRATION OF THE PLAN
SECTION 5.01. COMPOSITION OF THE COMMITTEE. The Committee shall
administer the Plan. In the absence at any time of a duly appointed Committee,
the Board shall administer the Plan.
SECTION 5.02. POWERS OF THE COMMITTEE. Except as limited by the express
provisions of the Plan or by resolutions adopted by the Board, the Committee
shall have sole and complete authority and discretion (a) to select Participants
and grant Options, (b) to determine the form and content of Options to be issued
under the Plan, (c) to interpret the Plan, (d) to prescribe, amend and rescind
rules and regulations relating to the Plan, and (e) to make other determinations
necessary or advisable for the administration of the Plan. The Committee shall
have and may exercise such other power and the Board may delegate authority as
to it from time to time. A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by a majority of the
Committee without a meeting, shall be deemed the action of the Committee.
SECTION 5.03. AGREEMENT. Each Option granted by the Committee shall be
evidenced by a written agreement containing such provisions as may be approved
by the Committee. Each such Agreement shall constitute a binding contract
between the Company and the Participant and every Participant who enters into an
Agreement shall be bound by the terms and restrictions of the Plan and of such
Agreement. The terms of each Agreement shall be in accordance with the Plan, but
each Agreement may include such additional provisions and restrictions as the
Committee, in its discretion may determine, provided that such additional
provisions and restrictions are not inconsistent with the terms of the Plan. In
particular, the Committee shall set forth in each Agreement (a) the Exercise
Price of the Option, (b) the number of Shares subject to, and the expiration
date of, the Option, (c) the manners, times and rates (cumulative or otherwise)
of exercise or vesting of such Option, and (d) the restrictions, if any, placed
upon such Option or upon Shares which may be issued upon exercise of such
Option.
The Chairman of the Committee and such other Directors and officers as
shall be designated by the Committee are hereby authorized to execute Agreements
on behalf of the Company and to cause them to be delivered to the recipients of
the Options.
4
SECTION 5.04. EFFECT OF THE COMMITTEE'S DECISIONS. All decisions,
determinations and interpretations of the Committee shall be final and
conclusive on all persons affected thereby.
SECTION 5.05. INDEMNIFICATION. In addition to such other rights of
indemnification as they may have, the members of the Committee shall be
indemnified by the Company in connection with any claim, action, suit or
proceeding relating to any action taken or failure to act under or in connection
with the Plan or any Option granted hereunder to the full extent provided for
under the Company's governing instruments with respect to the indemnification of
Directors.
ARTICLE VI
GRANT OF OPTIONS
SECTION 6.01. GENERAL RULE. The Committee shall have the discretion to
grant Non-Employee Directors, Directors (including members of the Committee),
Consultants and Employees Options to purchase Optioned Shares, which shall be
subject to any restrictions or conditions imposed pursuant to Article 15 of this
Plan.
SECTION 6.02. SPECIAL RULES FOR INCENTIVE STOCK OPTIONS. The aggregate
Fair Market Value, as of the date the Option is granted, of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by
an Employee during any calendar year (under all incentive stock option plans, as
defined in Section 422 of the Code, of the Company or any present or future
Affiliate of the Company) shall not exceed $100,000. Notwithstanding the
foregoing, the Committee may grant Options in excess of the foregoing
limitations, in which case such Options granted in excess of such limitation
shall be treated as Nonqualified Stock Options. For purposes of this Section
6.02, Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares shall be determined
as of the date of grant of such Option.
ARTICLE VII
EXERCISE PRICE FOR OPTIONS
SECTION 7.01. OPTION EXERCISE PRICE.
(a) The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is
determined by the Committee, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the
time of the grant of such Incentive Stock Option,
owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per share
exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
5
(B) granted to any Employee, the per
share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the
time of the grant of such Option, owns stock
representing more than ten percent (10%) of the
voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market
Value per Share on the date of the grant.
(B) granted to a person who, at the
time of the grant of such Option, is a Named
Executive of the Company, the per share Exercise
Price shall be no less than 100% of the Fair Market
Value on the date of grant of such Option is intended
to qualify as performance-based compensation under
Section 162(m) of the Code.
(C) granted to any person, the per
Share exercise price shall be no less than 85% of the
Fair Market Value per Share on the date of grant.
SECTION 7.02. STANDARDS FOR DETERMINING FAIR MARKET VALUE. The Fair
Market Value of the Optioned Shares shall be determined as follows:
(a) If the Common Stock is listed on any established
stock exchange or a national market system including without limitation
the National Market of the National Association of Securities Dealers,
Inc. Automated Quotation ("NASDAQ") System, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such system or exchange on the date
of determination (or if no trading or bids occurred on the date of
determination, on the last trading day prior to the date of
determination), as reported in The Wall Street Journal or such other
source as the Committee deems reliable;
(b) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock for the date of determination (or if no
bids occurred on the date of determination, on the last trading day
prior to the date of determination); or
(c) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Committee.
6
ARTICLE VIII
EXERCISE OF OPTIONS
SECTION 8.01. GENERALLY. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Committee, consistent with the terms of the Plan, and reflected in the Option
Agreement, including any vesting requirements and/or performance criteria with
respect to the Company and/or the Optionee.
Notwithstanding the foregoing, each Participant shall become (100%)
vested immediately (a) upon termination of the Participant's Continuous Service
due to the Participant's Disability or death, or (b) termination of the
Participant's Continuous Service within 12 months following a Change in Control,
unless such termination was for "Cause" as defined in Section 8.03 below. An
Option may not be exercised for a fractional Share.
SECTION 8.02. PROCEDURE FOR EXERCISE. A Participant may exercise an
Option, subject to provisions relative to its termination and limitations on its
exercise, only by (a) written notice of intent to exercise the Option with
respect to a specified number of Shares, and (b) payment to the Company
(contemporaneously with delivery of such notice) (i) in cash, (ii) by check,
(iii) by delivery of a promissory note with such recourse, interest, security
and redemption provisions as the Committee determines to be appropriate (subject
to the provisions of Section 153 of the Delaware General Corporation Law);
provided that the term of such promissory note shall not exceed twelve (12)
months, (iv) by the transfer and delivery to the Company of Shares having a Fair
Market Value on the date of exercise of the Option at least equal to the option
price, (v) by authorization from the Company to retain from the total number of
shares as to which the Option is exercised that number of shares having a Fair
Market Value on the date of exercise equal to the exercise price for the total
number of Shares as to which the option is exercised; or (vi) any combination of
(i) through (v). Each such notice (and payment where required) shall be
delivered, or mailed by prepaid registered or certified mail, addressed to the
President or Chief Executive Officer of the Company at its executive offices.
Common Stock utilized in full or partial payment of the Exercise Price for
Options shall be valued at its Fair Market Value at the date of exercise.
SECTION 8.03. PERIOD OF EXERCISABILITY. Except to the extent otherwise
provided herein or in the terms of an Agreement, an Option may be exercised by a
Participant only while he has maintained Continuous Service from the date of the
grant of the Option, or within three months after termination of such Continuous
Service (but not later than the date on which the Option would otherwise
expire).
(a) DEATH.
(i) If the Optionee shall die at any time after the date
an Option is granted and prior to any termination hereof, the executor
or administrator of the estate of the Optionee or the person or persons
to whom the Option shall have been validly transferred by the executor
or the administrator pursuant to will or the laws of descent and
distribution shall have the right, during the period ending one (1)
year after the date of the Optionee's death, to exercise the Option to
the
7
extent that it was exercisable at the date of death and shall not have
been exercised. Any Options not exercised within said time period shall
terminate and all rights thereunder shall cease. In the event of the
Optionee's death, any Options not vested as of the date of the
Optionee's death shall become immediately vested; provided, however,
that the Optionee was continuously employed by the Company, or
continuously served on the Board or as a Consultant for at least three
years, or such shorter period as the Committee determines in its sole
discretion.
(ii) Notwithstanding the foregoing, no transfer of an
Option by will or the laws of descent and distribution shall be
effective to bind the Company unless the Company shall have been
furnished with written notice thereof and an authenticated copy of the
will and/or such other evidence as the Committee may deem necessary to
establish the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions of the Option.
(b) PERMANENT AND TOTAL DISABILITY. If the Optionee becomes
Permanently and Totally Disabled at any time after the date an Option is granted
and prior to any termination thereof, the Optionee (or in the case of the
Optionee becoming mentally incapacitated, his guardian or legal representative)
shall have the right, during a period ending one (1) year after such Permanent
and Total Disability, to exercise the Option to the extent that it was
exercisable at the date of such Permanent and Total Disability and shall not
have been exercised. Any Options not exercised within said time period shall
terminate and all rights thereunder shall cease. In the Event of the Optionee's
Permanent and Total Disability, any Options not vested as of the date of the
Optionee's Permanent and Total Disability shall become immediately vested;
provided, however, that the Optionee was continuously employed by the Company,
or continuously served on the Board or as a Consultant for at least three (3)
years, or such shorter period as the Committee determines in its sole
discretion.
(c) OTHER.
(i) Upon termination of the Participant's continuous
service within twelve (12) months of a Change in Control, all options
shall become fully exercisable.
(ii) Upon termination of the Participant's employment with
the Company by Participant (other than due to death or Permanent and
Total Disability) or by the Company (other than for Cause), any Options
not vested as of the date of the Participant's termination shall
immediately terminate and all rights thereunder shall cease unless the
Committee determines otherwise in its sole discretion. If a
registration statement has been declared effective under the Securities
Act of 1933, as amended, relating to the issuance of shares under the
Plan, vested Options shall terminate ninety (90) days after termination
of Optionee's employment with the Company and all rights under such
Options shall cease unless the Committee determines otherwise in its
sole discretion. If a registration statement has not been declared
effective under the Securities Act of
8
1933, vested Options shall terminate one (1) year after termination of
Participant's employment with the Company and all rights under such
Options shall cease unless the Committee determines otherwise in its
sole discretion.
(iii) The Participant's rights to exercise such Options
shall terminate immediately upon termination of the Participant's
Continuous Service due to "Cause" which for purposes hereof shall have
the meaning set forth in any unexpired employment, consulting, or
severance agreement between the Participant and the Company (and, in
the absence of any such agreement, shall mean termination because of
the Participant's dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to
perform stated duties, or willful violation of any law, rule or
regulation (other than traffic violations or similar offenses); and
(iv) The Participant's rights to exercise such Options
shall terminate immediately upon a determination by the Committee that
the Participant has violated a noncompetition provision contained in
any unexpired employment, consulting, or other written agreement
between the Participant and the Company or an Affiliate.
SECTION 8.04. EFFECT OF THE COMMITTEE'S DECISIONS. The Committee's
determination whether a Participant's Continuous Service has ceased, and the
effective date thereof, shall be final and conclusive on all persons affected
thereby.
SECTION 8.05. BUY-OUT PROVISION. The Committee may at any time offer to
buy out for a payment in cash or Shares an Option previously granted under the
Plan based on such terms and conditions as the Committee shall establish and
communicate to the Optionee at the time such offer is made.
ARTICLE IX
CHANGE IN CONTROL; EFFECT OF CHANGES
IN COMMON STOCK SUBJECT TO THE PLAN
SECTION 9.01. CHANGE IN CONTROL. Upon a termination of a Participant's
Continuous Service within 12 months of a Change in Control, all Options shall
become fully exercisable, notwithstanding any other provision of the Plan or any
Agreement.
SECTION 9.02. RECAPITALIZATIONS; STOCK SPLITS, ETC. The number and kind
of Shares reserved for issuance under the Plan, and the number and kind of
Shares subject to outstanding Options, and the Exercise Price thereof, shall be
proportionately adjusted for any increase, decrease, change or exchange of
Shares for a different number or kind of shares or other securities of the
Company which results from a merger, consolidation, recapitalization,
reorganization, reclassification, stock dividend, split-up, combination of
shares, or similar event in which the number or kind of shares is changed
without the receipt or payment of consideration by the Company.
9
SECTION 9.03. TRANSACTIONS IN WHICH THE COMPANY IS NOT THE SURVIVING
ENTITY. In the event of (a) the liquidation or dissolution of the Company, (b) a
merger or consolidation in which the Company is not the surviving entity, or (c)
the sale or disposition of all or substantially all of the Company's assets (any
of the foregoing to be referred to herein as a "Transaction"), all outstanding
Options, together with the Exercise Prices thereof, shall be equitably adjusted
for any change or exchange of Shares for a different number or kind of shares or
other securities which results from the Transaction, and the forfeiture
provisions set forth in subsections 8(c)(2) and 17(c) shall automatically become
null and void.
SECTION 9.04. SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. Any adjustment
made pursuant to Sections 9.02 and 9.03 shall be made in such a manner as not to
constitute a modification, within the meaning of Section 424(h) of the Code, of
outstanding Incentive Stock Options.
SECTION 9.05. CONDITIONS AND RESTRICTIONS ON NEW, ADDITIONAL, OR
DIFFERENT SHARES OR SECURITIES. If, by reason of any adjustment made pursuant to
this Article IX, a Participant becomes entitled to new, additional, or different
shares of stock or securities, then, except as expressly provided in this
Article IX, such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to this Plan and any applicable Agreement
before the adjustment was made. No fractional shares of Company Stock resulting
from any adjustments made pursuant to this Article IX shall be issued upon
exercise of an Option, but the Fair Market Value of any such fractional share
shall be paid in cash upon such exercise.
SECTION 9.06. OTHER ISSUANCES. Except as expressly provided in this
Section, the issuance by the Company, a Subsidiary or an Affiliate of shares of
stock of any class, or of securities convertible into Shares or stock of another
class, for cash or property or for labor or services either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor, shall not affect,
and no adjustment shall be made with respect to, the number, class, or Exercise
Price of Shares then subject to Options or reserved for issuance under the Plan.
SECTION 9.07. CERTAIN SPECIAL DIVIDENDS. The Exercise Price of Shares
subject to outstanding Options shall be proportionately adjusted upon the
payment of a special large and nonrecurring dividend that has the effect of a
return of capital to the stockholders.
ARTICLE X
NON-TRANSFERABILITY OF INCENTIVE STOCK OPTIONS
Incentive Stock Options may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution. Notwithstanding the foregoing, or any
other provision of this Plan, a Participant who holds Nonqualified Stock Options
may transfer such Nonqualified Stock Options to his or her spouse, lineal
ascendants, lineal descendants, or to a duly established trust for the benefit
of one or more of these individuals. The Nonqualified Stock Options so
transferred may thereafter be transferred only to the Participant who originally
received the grant or to an individual or trust to whom the Participant could
have initially transferred the Nonqualified Stock Options pursuant to this
Article 10. Nonqualified Stock Options which are transferred pursuant to
10
this Article 10 shall be exercisable or earned by the transferee according to
the same terms and conditions as applied to the Participant.
ARTICLE XI
TIME OF GRANTING OPTIONS
The date of grant of an Option shall, for all purposes, be the later of
the date on which the Committee makes the determination of granting such Option
and the Effective Date. Notice of the determination shall be given to each
Participant to whom an Option is so granted within a reasonable time after the
date of such grant.
ARTICLE XII
EFFECTIVE DATE
The Plan shall become effective , 2000, subject to its approval by a
favorable vote of at least a majority of the total votes cast at a duly called
meeting, or written consent in lieu thereof, of the Company's stockholders held
in accordance with Applicable Laws.
ARTICLE XIII
MODIFICATION OF OPTIONS
At any time, and from time to time, the Board may authorize the
Committee to direct execution of an instrument providing for the modification of
any outstanding Option, provided no such modification shall confer on the holder
of said Option any right or benefit which could not be conferred on him by the
grant of a new Option at such time, or impair the Option without the consent of
the holder of the Option.
ARTICLE XIV
AMENDMENT AND TERMINATION OF THE PLAN
The Board may from time to time amend the terms of the Plan and, with
respect to any Shares at the time not subject to Options, suspend or terminate
the Plan. No amendment, suspension or termination of the Plan shall, without the
consent of any affected holders of an Option, alter or impair any rights or
obligations under any Option theretofore granted.
ARTICLE XV
CONDITIONS UPON ISSUANCE OF SHARES
SECTION 15.01. INVESTMENT ASSURANCES. The Company may require a
Participant, as a condition of exercising or acquiring stock under any Option
grant, (i) to give written assurances satisfactory to the Company as to the
Participant's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the
11
Company who is knowledgeable and experienced in financial and business matters
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Option grant;
and (ii) to give written assurances satisfactory to the Company stating that the
Participant is acquiring the stock subject to the Option grant for the
Participant's own account and not with any present intention of selling or
otherwise distributing the stock. The foregoing requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (iii) the issuance
of the shares upon the exercise or acquisition of stock under the Option grant
has been registered under a then currently effective registration statement
under the Securities Act or (iv) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.
SECTION 15.02. SPECIAL CIRCUMSTANCES. The inability of the Company to
obtain approval from any regulatory body or authority deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder
shall relieve the Company of any liability in respect of the non-issuance or
sale of such Shares. As a condition to the exercise of an Option, the Company
may require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
SECTION 15.03. REPURCHASE RIGHT; DAMAGES. The Company shall have the
right to forfeit Shares (in the case of Optioned Shares, in exchange for any
Exercise Price paid by the Participant) that a Participant receives pursuant to
an Option if the Participant breaches a noncompetition provision in any
unexpired employment, consulting or other written agreement between the
Participant and the Company or an Affiliate. If a Participant has disposed of
such Shares, the Company may seek compensatory damages from the Participant, as
well as seek specific performance for the sale to the Company of such other
Shares that the Participant owns or controls (but only to the extent necessary
to provide the Company with the recovery contemplated in the preceding
sentence).
SECTION 15.04. COMMITTEE DISCRETION. The Committee shall have the
discretionary authority to impose in Agreements such restrictions on Shares as
it may deem appropriate or desirable, including but not limited to the authority
to impose a right of first refusal, or to establish repurchase rights, or to pay
an Optionee the in-the-money value of his Option in consideration for its
cancellation, or all or any combination of these or other restrictions.
ARTICLE XVI
RESERVATION OF SHARES
The Company, during the term of the Plan, will reserve and keep
available a number of Shares sufficient to satisfy the requirements of the Plan.
12
ARTICLE XVII
WITHHOLDING TAX
As a condition of the exercise of an Option granted under the Plan, the
Participant (or in the case of the Participant's death, the person exercising
the Option) shall make such arrangements as the Committee may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise of the Option and the
issuance of Shares. The Company shall not be required to issue any Shares under
the Plan until such obligations are satisfied. The Committee, in its discretion,
may permit the Participant to satisfy the obligation, in whole or in part, by
irrevocably electing to have the Company withhold Shares, or to deliver to the
Company Shares that he already owns, having a value equal to the amount required
to be withheld. The value of the Shares to be withheld, or delivered to the
Company, shall be based on the Fair Market Value of the Shares on the date the
amount of tax to be withheld is determined. As an alternative, the Company may
retain, or sell without notice, a number of such Shares sufficient to cover the
amount required to be withheld.
ARTICLE XVIII
NO SHAREHOLDER RIGHTS
No Participant shall have any voting or dividend rights or other rights
of a stockholder in respect of any Shares covered by an Option prior to the time
said Shares are actually distributed to him.
ARTICLE XIX
NO EMPLOYMENT OR OTHER RIGHTS
In no event shall an Employee's or Director's eligibility to
participate or participation in the Plan create or be deemed to create any legal
or equitable right of the Employee, Director, or any other party to continue
employment by or service with the Company or any Affiliate. No Employee or
Director shall have a right to be granted an Option or, having received an
Option, the right to again be granted an Option. An Employee or Director who has
been granted an Option however, if otherwise eligible, may be granted an
additional Option or Options.
ARTICLE XX
GOVERNING LAW
The Plan shall be governed by and construed in accordance with the laws
of the State of Delaware, except to the extent that federal law shall be deemed
to apply.
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13
EX-10.1
5
g72313ex10-1.txt
PLAN & AGREEMENT TO EXCHANGE STOCK
EXHIBIT 10.1
================================================================================
PLAN AND AGREEMENT TO EXCHANGE STOCK
by and among
RAINWIRE PARTNERS, INC.,
OASIS GROUP, INC.
and
SHAREHOLDERS OF OASIS GROUP, INC.
Dated as of August 29, 2001
================================================================================
Table of Contents
Page
ARTICLE I
THE SHARE EXCHANGE
Section 1.01. The Share Exchange..............................................1
Section 1.02. Time and Place of Closing.......................................1
Section 1.03. Effective Time..................................................1
Section 1.04. Amendment to Certificate of Incorporation.......................2
ARTICLE II
MANNER OF CONVERTING SHARES
Section 2.01. Share Exchange Consideration....................................2
Section 2.02. Conversion of Shares............................................2
Section 2.03. Adjustments to Exchange Ratio...................................3
Section 2.04. Shares Held by Oasis............................................3
Section 2.05. Fractional Shares...............................................3
ARTICLE III
EXCHANGE OF SHARES
Section 3.01. Exchange Agent..................................................3
Section 3.02. Instructions to Exchange Agent..................................3
Section 3.03. Exchange Procedures.............................................3
Section 3.04. Rights of Former Oasis Owners...................................4
Section 3.05. No Further Ownership Rights in Oasis Stock......................4
Section 3.06. No Liability....................................................4
Section 3.07. Lost Certificates...............................................4
Section 3.08. Withholding Rights..............................................4
Section 3.09. Further Assurances..............................................5
Section 3.10. No Fractional Shares............................................5
ARTICLE IV
FURTHER TERMS AND COVENANTS
Section 4.01. Delivery of Investment Representation Letters...................5
Section 4.02. [Reserved]......................................................5
Section 4.03. Oasis Shareholder Approval......................................5
Section 4.04. Rainwire Shareholder Approval...................................5
Section 4.05. [Reserved]......................................................5
Section 4.06. New Directors...................................................5
Section 4.07. Conversion of Note..............................................5
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF Oasis
Section 5.01. Organization, Authority and Capacity............................6
Section 5.02. Authorization and Validity......................................6
Section 5.03. Absence of Conflicting Agreements or Required Consents..........6
Section 5.04. Governing Documents of Oasis....................................6
Section 5.05. Outstanding and Authorized Capitalization.......................7
Section 5.06. Financial Statements............................................7
Section 5.07. Absence of Changes..............................................7
Section 5.08. No Undisclosed Liabilities.....................................10
Section 5.09. Litigation, Etc................................................10
Section 5.10. No Violation of Law............................................10
Section 5.11. Real and Personal Property.....................................10
Section 5.12. Contracts and Commitments......................................11
Section 5.13. Employment and Labor Matters...................................13
Section 5.14. Employee Benefit Matters.......................................13
Section 5.15. Insurance Policies.............................................14
Section 5.16. Taxes..........................................................14
Section 5.17. Interested Transactions........................................15
Section 5.18. Intellectual Property..........................................15
Section 5.19. Required Vote of Oasis Shareholders............................15
Section 5.20. Brokerage......................................................16
Section 5.21. Statements True and Correct....................................16
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF RAINWIRE
Section 6.01. Organization, Authority and Capacity...........................16
Section 6.02. Authorization and Validity.....................................16
Section 6.03. Absence of Conflicting Agreements or Required Consents.........16
Section 6.04. Governing Documents............................................17
Section 6.05. Outstanding and Authorized Capitalization......................17
Section 6.06. Reports and Financial Statements...............................17
Section 6.07. Absence of Changes.............................................18
Section 6.08. No Undisclosed Liabilities.....................................20
Section 6.09. Litigation, Etc................................................20
Section 6.10. No Violation of Law............................................21
Section 6.11. Real and Personal Property.....................................21
Section 6.12. Contracts and Commitments......................................21
Section 6.13. Employment and Labor Matters...................................23
Section 6.14. Employee Benefit Matters.......................................24
Section 6.15. Insurance Policies.............................................25
Section 6.16. Taxes..........................................................25
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Section 6.17. Interested Transactions........................................25
Section 6.18. Intellectual Property..........................................26
Section 6.19. Brokerage......................................................26
Section 6.20. Subsidiaries...................................................26
Section 6.21. Statements True and Correct....................................26
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.01. Access to Information..........................................27
Section 7.02. No-Shop........................................................27
Section 7.03. Affirmative Covenants of Oasis.................................28
Section 7.04. Negative Covenants of Oasis....................................29
Section 7.05. Affirmative Covenants of Rainwire..............................31
Section 7.06. Negative Covenants of Rainwire.................................31
Section 7.07. Confidentiality................................................31
Section 7.08. Public Announcements...........................................32
Section 7.09. Filings with State Offices.....................................32
Section 7.10. Conditions to Closing..........................................32
Section 7.11. Sale of Shares.................................................32
Section 7.12. [Reserved].....................................................33
Section 7.13. [Reserved].....................................................33
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF Rainwire
Section 8.01. Representations and Warranties.................................33
Section 8.02. Performance; Covenants.........................................33
Section 8.03. Necessary Consents and Approvals...............................34
Section 8.04. No Material Adverse Change.....................................34
Section 8.05. No Injunction, Etc.............................................34
Section 8.06. Investor Representation Letters................................34
Section 8.07. Oasis Shareholder Approval.....................................34
Section 8.08. [Reserved].....................................................34
Section 8.09. Certificate of Share Exchange..................................34
Section 8.10. Tax-Free Share Exchange........................................35
Section 8.11. Evidence of Compliance with Securities Laws....................35
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF Oasis AND Oasis SHAREHOLDERS
Section 9.01. Representations and Warranties.................................35
Section 9.02. Performance; Covenants.........................................35
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Section 9.03. Necessary Consents and Approvals...............................35
Section 9.04. No Material Adverse Change.....................................36
Section 9.05. No Injunction, Etc.............................................36
Section 9.06. Securities Filings.............................................36
Section 9.07. Certificate of Share Exchange..................................36
Section 9.08. Tax-Free Share Exchange........................................36
Section 9.09. Employment Agreements..........................................36
Section 9.10. Rainwire Shareholder Approval..................................36
ARTICLE X
TERMINATION
Section 10.01. Right of Termination...........................................36
Section 10.02. Effect of Termination..........................................37
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
Section 11.01. Indemnification by Rainwire....................................37
Section 11.02. Indemnification by Oasis and the Oasis Shareholders............38
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Notices........................................................38
Section 12.02. Expenses.......................................................38
Section 12.03. Further Assurances.............................................39
Section 12.04. Waiver.........................................................39
Section 12.05. Assignment.....................................................39
Section 12.06. Binding Effect.................................................39
Section 12.07. Headings.......................................................39
Section 12.08. Entire Agreement...............................................39
Section 12.09. Governing Law; Severability....................................39
Section 12.10. Counterparts...................................................39
Section 12.11. Brokers and Finders............................................40
Section 12.12. Schedules and Exhibits.........................................40
Section 12.13. Enforcement of Agreement.......................................40
ARTICLE XIII
CERTAIN DEFINITIONS..................................................................40
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PLAN AND AGREEMENT TO EXCHANGE STOCK
THIS PLAN AND AGREEMENT TO EXCHANGE STOCK (this "Agreement") is made
and entered into as of August 29, 2001, by and among RAINWIRE PARTNERS, INC., a
Delaware corporation ("Rainwire"), and OASIS GROUP, INC., a Georgia corporation
("Oasis"), and the SHAREHOLDERS OF OASIS, all of whom are listed on Schedule 1
(collectively, the "Oasis Shareholders").
WHEREAS, Oasis, Rainwire, and the Oasis Shareholders intend to effect a
reorganization pursuant to Section 368(a)(1)(B) of the Code (as hereinafter
defined) whereby Rainwire will acquire all of the outstanding shares of stock of
Oasis from the Oasis Shareholders in exchange for newly issued shares of common
stock of Rainwire.
NOW, THEREFORE, for and in consideration of these premises and the
mutual covenants, promises, agreements, representations and warranties set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Rainwire, Oasis and the Oasis Shareholders
hereby agree as follows:
ARTICLE I
THE SHARE EXCHANGE
SECTION 1.01 THE SHARE EXCHANGE. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Georgia
Business Corporation Code ("GBCC") and the General Corporation Law of the State
of Delaware ("GCDL"), Rainwire will acquire all of the outstanding shares of
stock of Oasis from the Oasis Shareholders in exchange for validly issued, fully
paid and nonassessable shares of common stock of Rainwire, and, after giving
effect to all of the transactions contemplated by this Agreement, (a) the
Rainwire shareholders and the Oasis Shareholders will jointly own all of the
issued and outstanding shares of Rainwire and (b) Oasis will be a wholly-owned
subsidiary of Rainwire (the "Share Exchange").
SECTION 1.02 TIME AND PLACE OF CLOSING. The "Closing" shall mean the
consummation of the exchange of Rainwire Shares and the Oasis Shares, as set
forth in Article III, as well as the consummation of any other transactions
which are contemplated by this Agreement to occur at Closing. Closing shall take
place no later than within three business days following the date upon which all
of the conditions precedent contained in Articles VIII and IX of this Agreement
have occurred and all regulatory matters have been complied with, at 10:00 a.m.,
local time, at the offices of Kutak Rock, LLP, Suite 2100, 225 Peachtree Street,
N.E. Atlanta, Georgia 30303, or at such other time and place as the parties may
agree in writing. The date the Closing actually occurs is the "Closing Date."
SECTION 1.03 EFFECTIVE TIME. Subject to the provisions of this
Agreement, the parties shall file a Certificate of Share Exchange in such form
as is required by, and executed in accordance with, the relevant provisions of
the GBCC, including ss. 14-2-1105, and shall make all other filings or
recordings required under the GBCC as soon as practicable on or after the
Closing
Date. The Share Exchange and other transactions contemplated by this Agreement
shall become effective on the date and at the time the Certificate of Share
Exchange reflecting the Share Exchange is duly filed with the Secretary of State
of the State of Georgia, or at such other time and date as Oasis, Rainwire, and
the Oasis Shareholders shall agree and as specified in the Certificate of Share
Exchange (the "Effective Time").
SECTION 1.04 AMENDMENT TO CERTIFICATE OF INCORPORATION. Prior to the
Closing, Rainwire will effect a twenty-for-one reverse split of its authorized
and outstanding common stock so that Rainwire will have approximately 1,000,000
shares of authorized common stock after the Reverse split (the "Reverse Split"),
and after the Reverse Split shall amend its Amended and Restated Certificate of
Incorporation to increase its authorized shares of common stock to 100,000,000
(the "Amendment"). Rainwire shall use its best efforts to obtain the written
consent of the majority of the Rainwire Shareholders in favor of the Reverse
Split and Amendment, and shall timely comply with all applicable state and
federal laws in connection with the shareholder consent, including the filing
and mailing of a Schedule 14C pursuant to the Securities Exchange Act of 1934 to
all shareholders as of the record date that did not provide Rainwire with their
written consent to the Reverse Split and Amendment.
ARTICLE II
MANNER OF CONVERTING SHARES
SECTION 2.01 SHARE EXCHANGE CONSIDERATION. Upon the terms and subject
to the conditions of this Agreement, the Oasis Shareholders shall receive, as
consideration for the Share Exchange of all of the issued and outstanding shares
of Oasis's Common Stock, no par value ("Oasis Common Stock"), shares of the
Common Stock, par value $.001, of Rainwire ("Rainwire Common Stock"), such
shares of Rainwire Common Stock to be issuable at the Closing in accordance with
the terms of this Agreement. At the Effective Time, all such shares of Rainwire
Common Stock shall be duly and validly issued, fully paid and nonassessable.
SECTION 2.02 CONVERSION OF SHARES. Subject to the provisions of this
Article II, at the Effective Time, by virtue of the Share Exchange and without
any action on the part of the parties hereto or the shareholders of any of the
parties, each share of Oasis Common Stock issued and outstanding at the
Effective Time shall, by virtue of the Share Exchange and without any action on
the part of the holder thereof, automatically be converted into that number of
shares of Rainwire Common Stock as shall be obtained by dividing (a) 19,418,000
(the "Share Exchange Consideration") by (b) the number of Fully Diluted Shares
(as hereinafter defined), with the resulting quotient (carried to four decimal
places) being referred to herein as the "Exchange Ratio." "Fully Diluted Shares"
shall be equal to the total number of outstanding shares of Oasis Common Stock
calculated on a fully diluted, fully converted basis as though any and all
convertible debt and equity securities (including any Oasis Preferred Stock and
any outstanding warrants and outstanding options (whether vested or unvested))
had been converted or exercised into Common Stock. The Exchange Ratio shall not
change as a result of fluctuations in the market price of Rainwire Common Stock
between the date of this Agreement and the Effective Time. The aggregate number
of shares of Rainwire Common Stock issued pursuant to this Section 2.02 shall be
referred to as "Share Exchange Shares."
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SECTION 2.03 ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
equitably adjusted to reflect fully the effect of any stock split, reverse
split, stock dividend (including any dividend or distribution of securities
convertible into Rainwire Common Stock or Oasis Common Stock), reorganization,
recapitalization or other like change with respect to Rainwire Common Stock or
Oasis Common Stock occurring after the date of this Agreement and prior to the
Effective Time. Any such change for which a record date is established shall be
deemed for the purposes of this Section 2.03 to have occurred on the record
date. Notwithstanding the foregoing, the Exchange Ratio shall not be adjusted
for any effects that the Stock Dividend and Amendment shall have on the Rainwire
Common Stock.
SECTION 2.04 SHARES HELD BY OASIS. Each share of Oasis Common Stock
held in treasury by Oasis, shall be canceled and retired at the Effective Time,
and no consideration shall be issued in exchange therefor.
SECTION 2.05 FRACTIONAL SHARES. No certificates representing fractional
shares of Rainwire Common Stock will be issued as a result of the Share
Exchange. Any fractional share interest to which an Exchanging Shareholder would
otherwise be entitled to receive shall be rounded up to the nearest whole share
if such fraction is 0.5 or greater and shall be rounded down to the nearest
whole share if such fraction is less than 0.5.
ARTICLE III
EXCHANGE OF SHARES
SECTION 3.01 EXCHANGE AGENT. Rainwire's transfer agent shall serve as
the exchange agent (the "Exchange Agent") in the Share Exchange.
SECTION 3.02 INSTRUCTIONS TO EXCHANGE AGENT. At or prior to the
Effective Time, Rainwire shall give instructions to the Exchange Agent
concerning the issuance of such certificates representing the aggregate number
of shares of Rainwire Common Stock issuable pursuant to Section 2.02 in exchange
for outstanding shares of Oasis Common Stock.
SECTION 3.03 EXCHANGE PROCEDURES. Upon surrender of a certificate for
cancellation to the Exchange Agent, together with a letter of transmittal, duly
executed, and such other documents as may reasonably be required by the Exchange
Agent, the holder of such certificate shall be entitled to receive in exchange
therefor a Rainwire certificate representing that number of whole shares of
Rainwire Common Stock that such holder has the right to receive pursuant to the
provisions of this Article III, and the certificate so surrendered shall
forthwith be cancelled. Until surrendered as contemplated by this Section 3.03,
each certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Share Exchange
Consideration that the holder thereof has right to receive pursuant to the
provisions of this Article III. No interest will be paid or will accrue on any
cash payable to holders of certificates pursuant to the provisions of this
Article.
Rainwire shall not be obligated to deliver the consideration to which
any Exchanging Shareholder is entitled as a result of the Share Exchange until
such holder surrenders his or her
3
certificate or certificates representing the shares of Oasis Common Stock for
exchange as provided in this Article III or such holder provides an appropriate
affidavit regarding loss of such certificate or agreement and an indemnification
in favor of Rainwire pursuant to Section 3.07 hereof. All certificates
representing shares of Rainwire Common Stock shall bear the appropriate
"restricted stock legend" evidencing that such shares have not been registered
under the Securities Act.
SECTION 3.04 RIGHTS OF FORMER OASIS OWNERS. At the Effective Time, the
stock transfer books of Oasis shall be closed and no transfer of Oasis Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered in accordance with the provisions of Section 3.03 of this Agreement,
each certificate theretofore representing shares of Oasis Common Stock (other
than shares to be canceled pursuant to Section 2.04 of this Agreement) shall
from and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Section 2.01 of this Agreement in exchange
therefor.
SECTION 3.05 NO FURTHER OWNERSHIP RIGHTS IN OASIS STOCK. All shares of
Rainwire Common Stock issued upon the surrender for exchange of shares of Oasis
Common Stock in accordance with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of Oasis
Common Stock, and there shall be no further registration of transfers on the
records of Oasis of shares of Oasis Common Stock which were outstanding
immediately prior to the Effective Time.
SECTION 3.06 NO LIABILITY. None of Rainwire, Oasis, the Exchange Agent
or any party hereto shall be liable to any Person in respect of any shares of
Rainwire Common Stock properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
SECTION 3.07 LOST CERTIFICATES. If any certificate representing Oasis
Common Stock shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such certificate to be lost,
stolen or destroyed and, if required by Rainwire, the posting by such Person of
a bond in such reasonable amount as Rainwire may direct as indemnity against any
claim that may be made against either of them with respect to such certificate,
the transfer agent will issue in exchange for such lost, stolen or destroyed
certificate the Share Exchange Consideration and unpaid dividends and
distributions on shares of Rainwire Common Stock deliverable in respect thereof,
in each case pursuant to this Agreement.
SECTION 3.08 WITHHOLDING RIGHTS. Rainwire shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of shares of Rainwire Common Stock such amounts as it is required
to deduct and withhold with respect to the making of such payment under the Code
and the rules and regulations promulgated thereunder, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by Rainwire
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Oasis Common Stock in respect of
which such deduction and withholding was made by Rainwire.
4
SECTION 3.09 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of Rainwire shall be authorized to execute and deliver,
in the name and on behalf of Oasis, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of Oasis, any other
actions and things to vest, perfect or confirm of record or otherwise in Oasis
any and all right, title and interest in, to and under any of the rights,
properties or assets acquired or to be acquired by Oasis as a result of, or in
connection with, the Share Exchange.
SECTION 3.10 NO FRACTIONAL SHARES. No certificates or scrip
representing fractional shares of Rainwire Common Stock shall be issued upon the
surrender for exchange of certificates, no dividend or distribution of Rainwire
Common Stock shall relate to such fractional share interests and such fractional
share interests will not entitle the owner thereof to vote or to any rights as a
Stockholder of Rainwire. The procedure with respect to fractional shares is set
forth in Section 2.05 hereof.
ARTICLE IV
FURTHER TERMS AND COVENANTS
SECTION 4.01 DELIVERY OF INVESTMENT REPRESENTATION LETTERS. On or
before the Closing, each of the Oasis Shareholders shall execute and deliver to
Rainwire an Investment Representation Letter in the form attached hereto as
Exhibit A.
SECTION 4.02 [RESERVED].
SECTION 4.03 OASIS SHAREHOLDER APPROVAL. Oasis shall (a) take all steps
required by GBCC to obtain the consent of all of its shareholders (by having all
of its shareholders execute this Agreement) as soon as reasonably practicable,
(b) take all action required under the GBCC with respect to the holders of
Dissenting Shares, if any, and (c) in cooperation with Rainwire mail to its
shareholders a transmittal letter to be used by such shareholders in forwarding
their certificates for surrender and exchange.
SECTION 4.04 RAINWIRE SHAREHOLDER APPROVAL. Rainwire shall take all
steps required by the GCDL and the federal securities laws to obtain the consent
of a majority of its shareholders in favor of the Amendment and to notify the
remaining shareholders of the Amendment.
SECTION 4.05 [RESERVED].
SECTION 4.06 NEW DIRECTORS. Upon execution of this Agreement, Walter H.
Elliott will resign as an officer and director of Rainwire, Ronald Potts, Mike
McLaughlin and John Hill will be appointed to the Board of Directors of
Rainwire, and the number of directors constituting Rainwire's Board of Directors
will be increased to a total of five (5) directors.
SECTION 4.07 CONVERSION OF NOTE. Upon execution of this Agreement,
Rainwire will convert that promissory note by and between Rainwire and Osprey
Investments in the principal amount of $60,000, into 12,000,000 shares of common
stock of Rainwire at $0.005 per share.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OASIS
Oasis represents and warrants the following to Rainwire:
SECTION 5.01 ORGANIZATION, AUTHORITY AND CAPACITY. Oasis is a corporation,
duly organized, validly existing, and in good standing under the laws of the
State of Georgia, and has the full corporate power and authority necessary to
(a) execute, deliver and perform its obligations under this Agreement and the
other documents and instruments to be executed and delivered by Oasis pursuant
to this Agreement (collectively, the "Share Exchange Documents") and (b) carry
on its business as it has been and is now being conducted and to own and lease
the properties and assets which it now owns or leases. Oasis is duly qualified
to do business and is in good standing in the jurisdictions set forth in
Schedule 5.01, which includes every state of the United States in which the
conduct of the business and the ownership of such properties and assets requires
it to be so qualified.
SECTION 5.02 AUTHORIZATION AND VALIDITY. The execution, delivery and
performance of the Share Exchange Documents to be executed and delivered by
Oasis have been duly authorized by all necessary corporate action on the part of
Oasis. The Share Exchange Documents to be executed and delivered by Oasis have
been or will be, as the case may be, duly executed and delivered by Oasis and
constitute or will constitute the legal, valid and binding obligations of Oasis,
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, or other laws affecting creditors' rights generally,
or as may be modified by a court of equity.
SECTION 5.03 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS.
Except as set forth on Schedule 5.03, the execution, delivery and performance by
Oasis of the Share Exchange Documents to be executed and delivered by Oasis: (a)
do not require the consent of or notice to any Authority or any other third
party; (b) do not conflict with any provision of Oasis's articles or certificate
of incorporation or bylaws; (c) do not violate any law, ordinance, regulation,
ruling, judgment, order or injunction of any court or governmental
instrumentality to which Oasis is subject or by which Oasis or any of its
respective properties are bound; (d) do not conflict with, constitute grounds
for termination of, result in a breach of, or constitute a default under the
terms of any agreement, instrument, license or permit to which Oasis is a party
or by which Oasis or any of its properties are bound; and (e) will not create
any lien, encumbrance or restriction upon any of the assets or properties of
Oasis.
SECTION 5.04 GOVERNING DOCUMENTS OF OASIS. True and correct copies of
the organizational documents and all amendments thereto of Oasis in effect on
the date hereof have been or will be provided to Rainwire. Rainwire has been or
will be provided with access to the minutes of Oasis, and such minutes
accurately reflect all proceedings of the board of directors of Oasis (and all
committees thereof) required to be reflected in such records through the date
hereof.
6
SECTION 5.05 OUTSTANDING AND AUTHORIZED CAPITALIZATION. All authorized
and outstanding shares of Oasis Common Stock are accurately described on
Schedule 5.05. All outstanding shares of Oasis Common Stock are listed and held
of record as indicated on Schedule 5.05 and all shares of outstanding Oasis
Common Stock have been duly and validly issued, and are fully paid and
nonassessable. No shares of Oasis Common Stock were issued in violation of
preemptive rights of any past or present holder of any Oasis Common Stock.
Except as set forth on Schedule 5.05, there are no outstanding warrants,
options, rights, calls or other commitments of any nature relating to Oasis
Common Stock and there are no outstanding securities of Oasis Convertible into
or exchangeable for any Oasis Common Stock. Except as set forth on Schedule
5.05, Oasis is not obligated to issue or repurchase any Oasis Common Stock for
any reason and no person or entity has any right or privilege (whether
preemptive or contractual) for the purchase, subscription or issuance of any
unissued Oasis Common Stock.
SECTION 5.06 FINANCIAL STATEMENTS. Attached hereto as Schedule 5.06(a),
is the audited balance sheet of Oasis for the year ended December 31, 2000,
which reflect the results of operation and financial condition of Oasis for such
periods and at such dates (the "Oasis Financial Statements"). Except as
disclosed in Schedule 5.06(b), to the best of Oasis's or the Oasis Shareholders'
knowledge, as of their respective dates (or if amended or superseded by a
subsequent report created prior to the date of this Agreement, then as of the
date of such subsequent report), the Oasis Financial Statements did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Except as
disclosed in Schedule 5.06(b), to the best of Oasis's or the Oasis Shareholders'
knowledge, the Oasis Financial Statements present fairly the financial position
of Oasis as of the dates indicated and present fairly the results of operations
of Oasis for the periods then ended, and are in accordance with the books and
records of Oasis, which are complete and correct in all material respects.
SECTION 5.07 ABSENCE OF CHANGES. Since December 31, 2000, Oasis has
conducted its business only in the ordinary course and has not, except as set
forth in Schedule 5.07:
(a) suffered any material adverse change in its working
capital, condition (financial or otherwise), assets, liabilities,
reserves, business or operations;
(b) paid, discharged or satisfied any material liability
other than in the ordinary course of business;
(c) written off as uncollectible any account receivable
other than in the ordinary course of business or suffered an impairment
of any other asset (or is aware of any facts that would result in such
write-off or impairment);
(d) compromised any debts, claims or rights or disposed
of any of its properties or assets other than in the ordinary course of
business;
7
(e) entered into any commitments or transactions not in
the ordinary course of business involving aggregate value in excess of
$25,000 or made aggregate capital expenditures or commitments in excess
of $25,000;
(f) made any material change in any method of accounting
or accounting practice;
(g) subjected any of its assets, tangible or intangible,
to any Lien, encumbrance or restriction of any nature whatsoever,
except for liens for current property taxes not yet due and payable;
(h) hired, committed to hire or terminated any employee
other than in the ordinary course of business;
(i) except for payments, dividends or distributions
consistent with past practices for prior periods, declared, set aside
or made any payment, dividend or other distribution to any holder of
Oasis Common Stock or purchased, redeemed or otherwise acquired,
directly or indirectly, any Oasis Common Stock;
(j) terminated or amended any material contract, license
or other instrument to which Oasis is a party or suffered any loss or
termination or threatened loss or termination of any existing business
arrangement or material supplier, the termination or loss of which, in
the aggregate, would have a Oasis Material Adverse Effect;
(k) effected any change in its capital structure;
(l) (i) incurred, assumed or refinanced any Indebtedness
other than in the ordinary course of business consistent with past
practice, or (ii) made any loans, advances or capital contributions to,
or investments in, any Person other than an Oasis Subsidiary or any
employee or officer as a cash advance, in each case in the ordinary
course of business and consistent with past practice;
(m) paid, discharged or satisfied any liability,
obligation, or Lien other than payment, discharge or satisfaction of
(i) Indebtedness as it matures and become due and payable or (ii)
liabilities, obligations or Liens in the ordinary course of business
consistent with past practice;
(n) changed any of the accounting or tax principles,
practices or methods used by Oasis, except as required by changes in
applicable Tax Laws or changed reserve amounts or policies;
(o) (i) entered into any employment contract or other
arrangement or made any change in the compensation payable or to become
payable to any of the officers of Oasis or Persons acting in a similar
capacity or Affiliates in the ordinary course consistent with past
practice, (ii) terminated or entered into or amended any employment,
severance, consulting, termination or other agreement or employee
benefit plan, and except for cash advances made in the ordinary course
of business consistent with past practice, (iii) paid
8
any bonuses payable or to become payable to any of the officers of
Oasis or Persons acting in a similar capacity or (iv) made any change
in its existing borrowing or lending arrangements for or on behalf of
any of such Persons pursuant to an employee benefit plan or otherwise;
(p) (i) paid or made any accrual or arrangement for
payment of any pension, retirement allowance or other employee benefit
pursuant to any existing plan, agreement or arrangement to any
Affiliate, officer, employee or Person acting in a similar capacity, or
paid or agreed to pay or made any accrual or arrangement for payment to
any Affiliate, officers, employees or Persons acting in a similar
capacity of any amount relating to unused vacation days, except
payments and accruals made in the ordinary course consistent with past
practice, (ii) granted, issued, accelerated or accrued salary or other
payments or benefits pursuant to any pension, profit-sharing, bonus,
extra compensation, incentive, deferred compensation, stock purchase,
stock option, stock appreciation right, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, or
any employment or consulting agreement with or for the benefit of any
Affiliate, officer, employee, agent or consultant or Person acting in a
similar capacity, whether past or present or (iii) or amended in any
material respect any such existing plan, agreement or arrangement to
effect any of the foregoing;
(q) made any payments (other than regular compensation
and cash advances payable to officers and employees or Persons acting
in a similar capacity of Oasis in the ordinary course consistent with
past practice), loans, advances or other distributions, or enter into
any transaction, agreement or arrangement with, the Oasis Shareholders,
any Oasis Affiliates, officers, employees, agents, consultants or
Persons acting in a similar capacity, stockholders of their Affiliates,
associates or family members;
(r) settled or compromised any Tax liability or agreed to
any adjustment of any Tax attribute or made any election with respect
to Taxes;
(s) (i) made any change in its working capital practices
generally, including accelerating any collections of cash or accounts
receivable or deferring payments or (ii) failed to make timely
accruals, including with respect to accounts payable and liabilities
incurred in the ordinary course of business;
(t) failed to renew (at levels consistent with presently
existing levels), terminated or amended or failed to perform any of its
obligations or permitted any material default to exist or caused any
material breach under, or entered into (except for renewals in the
ordinary course of business consistent with past practice), any policy
of insurance;
(u) except in the ordinary course of business consistent
with past practice pursuant to appropriate confidentiality agreements,
and except as required by any Law or any existing agreements set forth
on Schedule 5.19 or as may be reasonably necessary to secure or protect
intellectual or other property rights of Oasis, provided any
confidential information to any Person other than Rainwire; or
9
(v) agreed, whether in writing or otherwise, to take any
action described in this Section 5.07.
SECTION 5.08. NO UNDISCLOSED LIABILITIES. To the best of Oasis's or the
Oasis Shareholders' knowledge, Oasis does not have any liabilities, other than
those liabilities which have been adequately reflected in or provided for in the
Oasis Financial Statements or as shown on Schedule 5.08 hereto.
SECTION 5.09. LITIGATION, ETC. Except as listed on Schedule 5.09 hereto
and except for matters that are covered by Oasis's insurance (taking into
account any applicable limits on coverage), (a) there are no claims, lawsuits,
actions, arbitrations, administrative or other proceedings pending (a "Claim")
against Oasis, or to the knowledge of Oasis, no such matter is threatened, and
there is no basis for any such action, (b) to the knowledge of Oasis, there are
no governmental or administrative investigations or inquiries pending that
involve Oasis, (c) there are no judgments against or consent decrees binding on
Oasis or its assets or which may have an adverse effect on, the business or
goodwill of Oasis; and (d) all Claims have been reported to the appropriate
insurance carrier and, to the knowledge of Oasis, Oasis has not received a
notice of denial of coverage or a reservation of rights. A list of all
outstanding Claims against Oasis is set forth on Schedule 5.15.
SECTION 5.10. NO VIOLATION OF LAW. Oasis has not been or is not
currently in violation of any applicable local, state or federal law, ordinance,
regulation, order, injunction or decree, or any other requirement of any
governmental body, agency or authority or court binding on it, or relating to
its property or business or its advertising, sales or pricing practices, except
for any such violations as would not individually or in the aggregate have a
Oasis Material Adverse Effect.
SECTION 5.11. REAL AND PERSONAL PROPERTY.
(a) Schedule 5.11(a) sets forth a list of all items of
material personal and mixed, tangible and intangible property, rights
and assets owned or leased by Oasis. Except as set forth on Schedule
5.11(a), Oasis (i) has good and valid title to all of the personal and
mixed, tangible and intangible property, rights and assets which it
purports to own, including all the personal property and assets
reflected in the Oasis Financial Statements; and (ii) owns such rights,
assets and personal property free and clear of all Liens, encumbrances
or restrictions of any nature whatsoever (except for current year ad
valorem taxes).
(b) Schedule 5.11(b) contains a true and correct
description of all real property owned or leased by Oasis, including
all improvements located thereon. Except as set forth on Schedule
5.11(b), Oasis has good and marketable title to all real property owned
by it, free and clear of any Liens, encumbrances or restrictions of any
nature whatsoever. Rainwire has been furnished with true, correct and
complete copies of all leases, deeds, easements and other documents and
instruments concerning the matters listed on Schedule 5.11(b). No
condemnation or similar actions are currently in effect or pending
against any part of any real property owned or leased by Oasis or, to
the knowledge of Oasis, no such action is threatened against any such
real property. There are no
10
encroachments, leases, easements, covenants, restrictions, reservations
or other burdens of any nature which might impair in any material
respect the use of any owned or leased real property in a manner
consistent with past practices nor does any part of any building
structure or any other improvement thereon encroach on any other
property.
(c) The assets owned or leased by Oasis (including all
buildings and improvements in connection therewith) are in good
operating condition and repair, ordinary wear and tear excepted, and
such assets (together with any assets leased by Oasis) include all
rights, properties, interests in properties, and assets necessary to
permit Oasis to carry on its business as presently conducted following
the Share Exchange.
SECTION 5.12. CONTRACTS AND COMMITMENTS.
(a) Schedule 5.12 contains a complete and accurate list
of all contracts, agreements, commitments, instruments and obligations
(whether written or oral, contingent or otherwise) of Oasis of or
concerning the following matters which involve (i) payments by or to
Oasis in excess of $5,000, (ii) performance by or for Oasis of services
or obligations the value of which is in excess of $5,000, or (iii)
performance by or for Oasis of services or obligations for greater than
90 days (the "Oasis Agreements"):
(i) the lease (as lessee or lessor) or license
(as licensee or licensor) of any real or personal property
(tangible or intangible);
(ii) the employment or engagement of any officer,
director, employee, consultant or agent;
(iii) any relationship with any Oasis Shareholder,
or any person or entity affiliated with or related to any
Oasis Shareholder or any officer, director, employee,
consultant or agent of Oasis;
(iv) any arrangement limiting the freedom of
Oasis to compete in any manner in any line of business;
(v) any arrangement that could reasonably be
anticipated to have a Oasis Material Adverse Effect;
(vi) any arrangement not in the ordinary course
of business;
(vii) any power of attorney, whether limited or
general, granted by or to Oasis;
(viii) any agreements relating to the making of any
loan or advance by Oasis;
(ix) any agreements providing for the
indemnification by Oasis of any Person;
11
(x) any agreements with any Authority except
those entered into in the ordinary course of business which
are not material to Oasis;
(xi) any broker, distributor, dealer or
representative or agency agreements pursuant to which Oasis
made payments in excess of $25,000 during the preceding fiscal
year;
(xii) any agreements (including settlement
agreements) currently in effect pursuant to which Oasis
licenses the right to use any Intellectual Property to any
Person or from any Person (other than license agreements
related to off-the-shelf software products);
(xiii) any confidentiality agreements entered into
by Oasis during the period commencing three years prior to the
date hereof pursuant to which confidential information has
been provided to a third party or by which Oasis was
restricted from providing information to third parties, other
than confidentiality agreements entered into in the normal
course of business;
(xiv) any voting trust or similar agreements
relating to any of the ownership interests in Oasis to which
any of the Oasis Shareholders or Oasis is a party;
(xv) any joint venture, partnership or similar
documents or agreements; and
(xvi) any agreement that materially limits or
purports to materially limit the ability of Oasis to own,
operate, sell, transfer, pledge or otherwise dispose of any
assets.
(b) Oasis has delivered or will deliver to Rainwire true
and complete copies of all Oasis Agreements. Except as indicated on
Schedule 5.12, the Oasis Agreements are valid and enforceable in
accordance with their terms (except to the extent limited by equitable
principles or bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) and there is not under any of
such contracts (i) any existing or claimed default by Oasis or event
which with the notice or lapse of time, or both, would constitute a
default by Oasis or (ii) to the knowledge of Oasis, any existing or
claimed default by any other party or event which with notice or lapse
of time, or both, would constitute a default by any such party. Except
as indicated on Schedule 5.12, the continuation validity and
enforceability of the Oasis Agreements will not be affected by the
Share Exchange and the Share Exchange will not result in a breach of,
or default under, or require the consent of any other party to any of
the Oasis Agreements. Except as set forth on Schedule 5.12, there is no
actual or, to the knowledge of Oasis, threatened termination,
cancellation or limitation of any Oasis Agreements that would have a
Oasis Material Adverse Effect. To the knowledge of Oasis, there is no
pending or threatened bankruptcy, insolvency or similar proceeding with
respect to any other party to the Oasis Agreements.
12
SECTION 5.13. EMPLOYMENT AND LABOR MATTERS.
(a) Schedule 5.13(a) sets forth (i) the number of
full-time and part-time employees of Oasis and (ii) the name and
compensation paid to each employee of or consultant to Oasis who
currently receives or has received salary, benefits and bonuses for the
two most recently ended fiscal years in excess of $50,000.
(b) Oasis is in compliance in all material respects with
all applicable laws respecting employment and employment practices,
terms and conditions of employment, wages and hours, occupational
safety and health, including the National Labor Relations Act, the
Immigration Reform and Control Act of 1986, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. Section
1981, the Americans With Disabilities Act, the Fair Labor Standards
Act, ERISA, the Occupational Safety and Health Act, the Family Medical
Leave Act, and any other law, ordinance or regulation respecting the
terms and conditions of employment, including authorization to work in
the United States, equal employment opportunity (including prohibitions
against discrimination, harassment, and retaliation), payment of wages,
hours of work, occupational safety and health, and labor practices.
(c) Except as disclosed on Schedule 5.13(c),
(i) there are no charges, governmental audits,
investigations, administrative proceedings or complaints
concerning Oasis's employment practices pending or, to the
knowledge of Oasis, threatened before any federal, state or
local agency or court, and, to the knowledge of Oasis, no
basis for any such matter exists;
(ii) Oasis is not a party to any union or
collective bargaining agreement, and, to the knowledge of
Oasis, no union attempts to organize the employees of Oasis
have been made, nor are any such attempts now threatened; and
(iii) there are no pending or, to the knowledge of
Oasis, threatened material claims by any current or former
employee of Oasis or any employment-related claims or
investigations by any Authority, including any charges to the
Equal Employment Opportunity Commission or state employment
practice agency, investigations regarding compliance with
federal, state or local wage and hour laws, audits by the
Office of Federal Contractor Compliance Programs, complaints
of sexual harassment or any other form of unlawful harassment,
discrimination, or retaliation.
SECTION 5.14. EMPLOYEE BENEFIT MATTERS. Schedule 5.14 attached hereto
sets forth a description of all "Employee Welfare Benefit Plans" and "Employee
Pension Benefit Plans" (as defined in Sections 3(1) and 3(2), respectively, of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
existing on the date hereof that are or have been maintained or contributed to
by Oasis. Except as listed on Schedule 5.14, Oasis does not maintain any
retirement or deferred compensation plan, savings, incentive, stock option or
stock purchase plan,
13
unemployment compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance or hospitalization program or any other fringe benefit
arrangement for any employee, consultant or agent of Oasis, whether pursuant to
contract, arrangement, custom or informal understanding, which do not constitute
an "Employee Benefit Plan" (as defined in Section 3(3) of ERISA), for which
Oasis may have any ongoing material liability after Closing. Oasis does not
maintain nor has it ever contributed to any Multi-Employer Plan as defined by
Section 3(37) of ERISA. Oasis does not currently maintain any Employee Pension
Benefit Plan subject to Title IV of ERISA. There have been no "prohibited
transactions" (as described in Section 406 of ERISA or Section 4975 of the Code)
with respect to any Employee Pension Benefit Plan or Employee Welfare Benefit
Plan maintained by Oasis as to which Oasis has been a party. As to any employee
pension benefit plan listed on Schedule 5.14 and subject to Title IV of ERISA,
there have been no reportable events (as such term is defined in Section 4043 of
ERISA).
SECTION 5.15. INSURANCE POLICIES. Attached hereto as Schedule 5.15 is a
list of all insurance policies of Oasis setting forth with respect to each
policy the name of the insurer, a description of the policy, the dollar amount
of coverage, the amount of the premium, the date through which all premiums have
been paid, and the expiration date. Each insurance policy relating to the
insurance referred to in Schedule 5.15 is in full force and effect, is valid and
enforceable, and Oasis is not in breach of or in default under any such policy.
All policies listed on Schedule 5.15 will be outstanding and duly in force at
the Closing Date, the premiums payable in respect of such policies have been
paid or will be paid in full prior to the closing date, and none of such
policies provide for any retrospective premium adjustment or other experience
based liability on the part of Oasis. Oasis has not received any notice of or
any reason to believe that there is or has been any actual, threatened, or
contemplated termination or cancellation of any insurance policy relating to the
said insurance. Oasis has not since inception (a) been denied or had revoked,
canceled or rescinded any policy of insurance, or (b) self insured against any
risk ordinarily insured against by similar businesses. Schedule 5.15 contains a
true, correct and complete list and summary of all claims which have been made
under each insurance policy relating to the said insurance. Oasis has not failed
to give any notice or to present any claim under any insurance policy in a due
and timely fashion, and to the best of its knowledge, all insurable risks are
adequately covered by insurance except for any exposure occasioned by lack of
Directors' and Officers' insurance coverage.
SECTION 5.16. TAXES. Except as set forth on Schedule 5.16, Oasis has
filed or obtained filing extensions for all tax returns, federal, state, county,
and local, including payroll taxes, required to be filed by it, and Oasis has
paid or established adequate reserves (in accordance with generally accepted
accounting principles) for the payment of all taxes shown to be due by such
returns as well as all other taxes, assessments, and governmental charges which
have become due or payable, including, without limitation, all taxes which Oasis
is obligated to withhold from amounts owing to employees, creditors, and third
parties. The federal income tax returns of Oasis have never been audited by the
Internal Revenue Service and no state income or sales tax returns of Oasis have
been audited. No deficiency assessment with respect to or proposed adjustment of
Oasis's federal, state, county, or local taxes, including payroll taxes, is
pending or, to the best of Oasis's knowledge, threatened. There is no tax lien,
whether imposed by any federal, state, county, or local taxing authority,
outstanding against the assets, properties, or business of Oasis (other than
liens for taxes not yet due and payable). Neither Oasis nor any of its
shareholders
14
have ever filed a consent pertaining to Oasis pursuant to Section 341(f) of the
IRC (as hereinafter defined), relating to collapsible corporations.
SECTION 5.17. INTERESTED TRANSACTIONS. Except as provided on Schedule
5.17, Oasis is not a party to any contract, loan or other transaction with any
Oasis Shareholder nor does Oasis have any direct or indirect interest in or
affiliation with any Oasis Shareholder to any such contract, loan or other
transaction. No Oasis Shareholder is an employee, consultant, partner,
principal, director or owner of, or has any other direct or indirect interest in
or affiliation with, any person or business entity that is engaged in a business
that competes with or is similar to the business of Oasis.
SECTION 5.18. INTELLECTUAL PROPERTY.
(a) Attached hereto as Schedule 5.18 is a true, correct
and complete list of all of Oasis's patents, trademarks, trade names,
or trademark or trade name registrations, domain name registrations,
service marks, and copyrights or copyright registrations (the
"Proprietary Rights"). All of Oasis's Proprietary Rights are valid,
enforceable, in full force and effect and free and clear of any and all
security interests, liens, pledges and encumbrances of any nature or
kind. Oasis has not infringed upon and are not infringing upon any
patent, trademark, trade name, or trademark or trade name registration,
service mark, copyright, or copyright registration of any other Person.
(b) No trade secret or confidential know-how material to
the business of Oasis as currently operated has been disclosed or
authorized to be disclosed to any third party, other than pursuant to a
non-disclosure agreement that protects Oasis's proprietary interests in
and to such trade secrets and confidential know-how, and other than
disclosures to employees, officers, directors, agents, attorneys,
accountants, consultants, independent contractors or other
representatives of Oasis, each of whom is obligated (by contract,
employment policy, cannons of ethics or the like) to maintain the
confidentiality of such information.
(c) The consummation of the transactions contemplated
hereby will not result in the loss or impairment of the right of
Rainwire or any of its successors to own, use, license or sublicense
any of the Intellectual Property currently owned, used, licensed or
sublicensed by Oasis nor will it require the consent of any Authority
or third party in respect of any such Intellectual Property and no
present or former employee, or officer of Oasis has any right, title or
interest, directly or indirectly, in whole or in part, in any
Intellectual Property.
SECTION 5.19. REQUIRED VOTE OF OASIS SHAREHOLDERS. The Persons listed
on Schedule 1 include all of the Shareholders of Oasis, and all such Persons
have approved of, and executed a copy of, this Agreement. No other vote of the
Oasis Shareholders is required by the certificate of incorporation or bylaws of
Oasis or any other governing documents of Oasis in order for Oasis to consummate
the Share Exchange and the transactions contemplated hereby.
15
SECTION 5.20. BROKERAGE. Except as disclosed on Schedule 5.20, neither
Oasis, nor any Exchanging Shareholder has employed any broker, finder, advisor,
consultant or other intermediary in connection with this Agreement or the
transactions contemplated by this Agreement who is or might be entitled to any
fee, commission or other compensation from Oasis, or from Rainwire or its
Affiliates, upon or as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby. Such fee shall be borne by
the Oasis Shareholders and not by Oasis or Rainwire.
SECTION 5.21. STATEMENTS TRUE AND CORRECT. No representation or
warranty made herein by Oasis or any of the Oasis Shareholders, nor in any
statement, certificate or instrument to be furnished to Rainwire by Oasis or any
of the Oasis Shareholders pursuant to any Share Exchange Document, contains or
will contain any untrue statement of material fact or omits or will omit to
state a material fact necessary, in light of the circumstances under which it
was made, to make these statements contained herein and therein not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF RAINWIRE
Rainwire hereby represents and warrants to Oasis as follows:
SECTION 6.01. ORGANIZATION, AUTHORITY AND CAPACITY. Rainwire is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Rainwire has the full power and authority necessary to
(a) execute, deliver and perform its obligations under the Share Exchange
Documents to be executed and delivered by it, and (b) carry on its business as
it has been and is now being conducted and to own and lease the properties and
assets which it now owns or leases. Rainwire is duly qualified to do business
and is in good standing in the jurisdictions set forth on Schedule 6.01, which
includes every state of the United States in which the conduct of the business
and the ownership of such properties and assets requires it to be so qualified.
SECTION 6.02. AUTHORIZATION AND VALIDITY. The execution, delivery and
performance of the Share Exchange Documents to be executed and delivered by
Rainwire have been duly authorized by all necessary corporate action by
Rainwire. The Share Exchange Documents to be executed and delivered by Rainwire
have been or will be, as the case may be, duly executed and delivered by
Rainwire and constitute or will constitute the legal, valid and binding
obligations of Rainwire, enforceable in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, or other laws affecting
creditors' rights generally, or as may be modified by a court of equity.
SECTION 6.03. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS.
Except as set forth on Schedule 6.03, the execution, delivery and performance by
Rainwire of the Share Exchange Documents to be executed and delivered by it: (a)
do not require the consent of or notice to any Authority or any other third
party; (b) will not conflict with any provision of Rainwire's articles or
certificate of incorporation or bylaws; (c) do not conflict with or result in a
violation of any law, ordinance, regulation, ruling, judgment, order or
injunction of any court or
16
governmental instrumentality to which Rainwire is a party or by which Rainwire
or any of its respective properties are bound; (d) do not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, require any notice under, or accelerate or permit the
acceleration of any performance required by the terms of any Rainwire Material
Agreement; and (e) will not create any lien, encumbrance or restriction upon any
of the assets or properties of Rainwire.
SECTION 6.04. GOVERNING DOCUMENTS. True and correct copies of the
organizational documents and all amendments thereto of Rainwire and copies of
the bylaws of Rainwire have been provided to Oasis. Oasis has previously been
provided with access to Rainwire's minutes, and such minutes accurately reflect
all proceedings of the shareholders and board of directors of Rainwire (and all
committees thereof).
SECTION 6.05. OUTSTANDING AND AUTHORIZED CAPITALIZATION. The authorized
capital stock of Rainwire consists of 20,000,000 shares of Rainwire Common Stock
and 2,500,000 shares of Rainwire Preferred Stock. As of the date of this
Agreement, Rainwire has 7,705,387 shares of Rainwire Common Stock and 24,960
shares of Preferred Stock issued and outstanding. All issued and outstanding
shares of Rainwire Common Stock have been duly and validly issued, and are fully
paid and non-assessable. Except as set forth in Schedule 6.05, there are no
outstanding warrants, options, rights, calls or other commitments of any nature
relating to shares of capital stock of Rainwire, no outstanding securities
convertible into or exchangeable for shares of capital stock of Rainwire, and,
Rainwire is not obligated to issue or repurchase any of its shares of capital
stock for any reason and no person or entity has any right or privilege (whether
preemptive or contractual) for the purchase, subscription or issuance of any
unissued shares of capital stock of Rainwire. Except as set forth in Schedule
6.05 or the Certificate of Incorporation, as amended, Rainwire has no obligation
or right (contingent or other) to purchase, redeem, or otherwise acquire any of
its equity securities or any interests therein or to pay any dividend or make
any other distribution in respect thereof. Except as set forth in Schedule 6.05,
there are no voting trusts or agreements nor any preemptive rights relating to
any outstanding securities of Rainwire (whether or not Rainwire is a party
thereto). No shares of Rainwire Common Stock are held in Rainwire's treasury.
All outstanding securities of Rainwire were issued in compliance with all
applicable federal and state securities laws. All Rainwire Common Stock to be
issued in connection with the Share Exchange will be duly and validly issued,
fully paid and nonassessable.
SECTION 6.06. REPORTS AND FINANCIAL STATEMENTS. Prior to the closing,
Rainwire shall complete, file and make available to Oasis (including through the
SEC's EDGAR system) true and complete copies of: (a) Rainwire's Annual Report on
Form 10-KSB filed with the SEC for the fiscal year ending December 31, 2000; (b)
Rainwire's Quarterly Report on Form 10-QSB filed with the SEC for the quarter
ended March 31, 2001, (c) Rainwire's Quarterly Report on Form 10-QSB filed with
the SEC for the quarter ended June 30, 2001 (individually a "SEC Report" and
collectively, the "SEC Reports"). To the best of Rainwire's knowledge, the
audited consolidated financial statements and unaudited consolidated interim
financial statements included in Rainwire SEC Reports (including any related
notes and schedules) complied as to form, as of their respective dates of filing
with the SEC, in all material respects with all applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were
17
prepared in accordance with GAAP consistently applied during the periods
involved (except as otherwise disclosed in the notes thereto, and except that
unaudited statements do not contain footnotes in substance or form required by
GAAP, as is permitted by Form 10-QSB of the Exchange Act) and fairly presented
the financial position of Rainwire and its consolidated Subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods or as
of the dates then ended (subject, where appropriate, to normal year-end
adjustments).
SECTION 6.07. ABSENCE OF CHANGES. Since June 30, 2001, Rainwire has
conducted its business only in the ordinary course and has not, except as set
forth in the SEC Reports or Schedule 6.07:
(a) suffered any material adverse change in its working
capital, condition (financial or otherwise), assets, liabilities,
reserves, business or operations;
(b) paid, discharged or satisfied any material liability
other than in the ordinary course of business;
(c) written off as uncollectible any account receivable
other than in the ordinary course of business or suffered an impairment
of any other asset (or is aware of any facts that would result in such
write-off or impairment);
(d) compromised any debts, claims or rights or disposed
of any of its properties or assets other than in the ordinary course of
business;
(e) entered into any commitments or transactions not in
the ordinary course of business involving aggregate value in excess of
$25,000 or made aggregate capital expenditures or commitments in excess
of $25,000;
(f) made any material change in any method of accounting
or accounting practice;
(g) subjected any of its assets, tangible or intangible,
to any Lien, encumbrance or restriction of any nature whatsoever,
except for liens for current property taxes not yet due and payable;
(h) hired, committed to hire or terminated any employee
other than in the ordinary course of business;
(i) except for payments, dividends or distributions
consistent with past practices for prior periods, declared, set aside
or made any payment, dividend or other distribution to any holder of
Rainwire Common Stock or purchased, redeemed or otherwise acquired,
directly or indirectly, any Rainwire Common Stock;
(j) terminated or amended any material contract, license
or other instrument to which Rainwire is a party or suffered any loss
or termination or threatened loss or termination of any existing
business arrangement or material supplier, the termination or loss of
which, in the aggregate, would have a Rainwire Material Adverse Effect;
18
(k) effected any change in its capital structure;
(l) (i) incurred, assumed or refinanced any Indebtedness
other than in the ordinary course of business consistent with past
practice, or (ii) made any loans, advances or capital contributions to,
or investments in, any Person other than an Rainwire Subsidiary or any
employee or officer as a cash advance, in each case in the ordinary
course of business and consistent with past practice;
(m) paid, discharged or satisfied any liability,
obligation, or Lien other than payment, discharge or satisfaction of
(i) Indebtedness as it matures and become due and payable or (ii)
liabilities, obligations or Liens in the ordinary course of business
consistent with past practice;
(n) changed any of the accounting or tax principles,
practices or methods used by Rainwire, except as required by changes in
applicable Tax Laws or changed reserve amounts or policies;
(o) (i) entered into any employment contract or other
arrangement or made any change in the compensation payable or to become
payable to any of the officers of Rainwire or Persons acting in a
similar capacity or Affiliates in the ordinary course consistent with
past practice, (ii) terminated or entered into or amended any
employment, severance, consulting, termination or other agreement or
employee benefit plan, and except for cash advances made in the
ordinary course of business consistent with past practice, (iii) paid
any bonuses payable or to become payable to any of the officers of
Rainwire or Persons acting in a similar capacity or (iv) made any
change in its existing borrowing or lending arrangements for or on
behalf of any of such Persons pursuant to an employee benefit plan or
otherwise;
(p) (i) paid or made any accrual or arrangement for
payment of any pension, retirement allowance or other employee benefit
pursuant to any existing plan, agreement or arrangement to any
Affiliate, officer, employee or Person acting in a similar capacity, or
paid or agreed to pay or made any accrual or arrangement for payment to
any Affiliate, officers, employees or Persons acting in a similar
capacity of any amount relating to unused vacation days, except
payments and accruals made in the ordinary course consistent with past
practice, (ii) granted, issued, accelerated or accrued salary or other
payments or benefits pursuant to any pension, profit-sharing, bonus,
extra compensation, incentive, deferred compensation, stock purchase,
stock option, stock appreciation right, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, or
any employment or consulting agreement with or for the benefit of any
Affiliate, officer, employee, agent or consultant or Person acting in a
similar capacity, whether past or present or (iii) or amended in any
material respect any such existing plan, agreement or arrangement to
effect any of the foregoing;
(q) made any payments (other than regular compensation
and cash advances payable to officers and employees or Persons acting
in a similar capacity of Rainwire in the ordinary course consistent
with past practice), loans, advances or other distributions, or
19
enter into any transaction, agreement or arrangement with, the Rainwire
Shareholders, any Rainwire Affiliates, officers, employees, agents,
consultants or Persons acting in a similar capacity, stockholders of
their Affiliates, associates or family members;
(r) settled or compromised any Tax liability or agreed to
any adjustment of any Tax attribute or made any election with respect
to Taxes;
(s) (i) made any change in its working capital practices
generally, including accelerating any collections of cash or accounts
receivable or deferring payments or (ii) failed to make timely
accruals, including with respect to accounts payable and liabilities
incurred in the ordinary course of business;
(t) failed to renew (at levels consistent with presently
existing levels), terminated or amended or failed to perform any of its
obligations or permitted any material default to exist or caused any
material breach under, or entered into (except for renewals in the
ordinary course of business consistent with past practice), any policy
of insurance;
(u) except in the ordinary course of business consistent
with past practice pursuant to appropriate confidentiality agreements,
and except as required by any Law or as may be reasonably necessary to
secure or protect intellectual or other property rights of Rainwire,
provided any confidential information to any Person other than
Rainwire; or
(v) agreed, whether in writing or otherwise, to take any
action described in this Section 6.07.
SECTION 6.08. NO UNDISCLOSED LIABILITIES. To the best of Rainwire's
knowledge, neither Rainwire nor any of its Subsidiaries have any Liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
except (a) Liabilities or obligations reflected in any of the SEC Reports, (b)
Liabilities incurred in the ordinary course of business since the date of the
most recent SEC Reports, or (c) Liabilities or obligations that would not,
individually or in the aggregate, have an Rainwire Material Adverse Effect.
SECTION 6.09. LITIGATION, ETC. Except as listed on Schedule 6.09 hereto
and except for matters that are covered by Rainwire's insurance (taking into
account any applicable limits on coverage), (a) there are no claims, lawsuits,
actions, arbitrations, administrative or other proceedings pending (a "Claim")
against Rainwire, or to the knowledge of Rainwire, no such matter is threatened,
and there is no basis for any such action, (b) to the knowledge of Rainwire,
there are no governmental or administrative investigations or inquiries pending
that involve Rainwire, (c) there are no judgments against or consent decrees
binding on Rainwire or its assets or which may have an adverse effect on, the
business or goodwill of Rainwire; and (d) all Claims have been reported to the
appropriate insurance carrier and, to the knowledge of Rainwire, Rainwire has
not received a notice of denial of coverage or a reservation of rights. A list
of all outstanding Claims against Rainwire is set forth on Schedule 6.15.
SECTION 6.10. NO VIOLATION OF LAW. The business of Rainwire and its
Subsidiaries have not been and are not currently in violation of no local, state
or federal law, ordinance, regulation,
20
order, injunction or decree, or any other requirement of any governmental body
except (a) as described in any of the SEC Reports and (b) for violations that
would not, individually or in the aggregate, have an Rainwire Material Adverse
Effect.
SECTION 6.11. REAL AND PERSONAL PROPERTY.
(a) Schedule 6.11(a) sets forth a list of all items of
material personal and mixed, tangible and intangible property, rights
and assets owned or leased by Rainwire. Except as set forth on Schedule
6.11(a), Rainwire (i) has good and valid title to all of the personal
and mixed, tangible and intangible property, rights and assets which it
purports to own, including all the personal property and assets
reflected in the Rainwire Financial Statements; and (ii) owns such
rights, assets and personal property free and clear of all Liens,
encumbrances or restrictions of any nature whatsoever (except for
current year ad valorem taxes).
(b) Schedule 6.11(b) contains a true and correct
description of all real property owned or leased by Rainwire, including
all improvements located thereon. Except as set forth on Schedule
6.11(b), Rainwire has good and marketable title to all real property
owned by it, free and clear of any Liens, encumbrances or restrictions
of any nature whatsoever. Oasis has been furnished with true, correct
and complete copies of all leases, deeds, easements and other documents
and instruments concerning the matters listed on Schedule 6.11(b). No
condemnation or similar actions are currently in effect or pending
against any part of any real property owned or leased by Rainwire or,
to the knowledge of Rainwire, no such action is threatened against any
such real property. There are no encroachments, leases, easements,
covenants, restrictions, reservations or other burdens of any nature
which might impair in any material respect the use of any owned or
leased real property in a manner consistent with past practices nor
does any part of any building structure or any other improvement
thereon encroach on any other property.
(c) The assets owned or leased by Rainwire (including all
buildings and improvements in connection therewith) are in good
operating condition and repair, ordinary wear and tear excepted, and
such assets (together with any assets leased by Rainwire) include all
rights, properties, interests in properties, and assets necessary to
permit Rainwire to carry on its business as presently conducted
following the Share Exchange.
SECTION 6.12. CONTRACTS AND COMMITMENTS.
(a) Schedule 6.12 contains a complete and accurate list
of all contracts, agreements, commitments, instruments and obligations
(whether written or oral, contingent or otherwise) of Rainwire of or
concerning the following matters which involve (i) payments by or to
Rainwire in excess of $5,000, (ii) performance by or for Rainwire of
services or obligations the value of which is in excess of $5,000, or
(iii) performance by or for Rainwire of services or obligations for
greater than 90 days (the "Rainwire Agreements"):
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(i) the lease (as lessee or lessor) or license
(as licensee or licensor) of any real or personal property
(tangible or intangible);
(ii) the employment or engagement of any officer,
director, employee, consultant or agent;
(iii) any relationship with any Rainwire
Shareholder, or any person or entity affiliated with or
related to any Rainwire Shareholder or any officer, director,
employee, consultant or agent of Rainwire;
(iv) any arrangement limiting the freedom of
Rainwire to compete in any manner in any line of business;
(v) any arrangement that could reasonably be
anticipated to have a Rainwire Material Adverse Effect;
(vi) any arrangement not in the ordinary course
of business;
(vii) any power of attorney, whether limited or
general, granted by or to Rainwire;
(viii) any agreements relating to the making of any
loan or advance by Rainwire;
(ix) any agreements providing for the
indemnification by Rainwire of any Person;
(x) any agreements with any Authority except
those entered into in the ordinary course of business which
are not material to Rainwire;
(xi) any broker, distributor, dealer or
representative or agency agreements pursuant to which Rainwire
made payments in excess of $25,000 during the preceding fiscal
year;
(xii) any agreements (including settlement
agreements) currently in effect pursuant to which Rainwire
licenses the right to use any Intellectual Property to any
Person or from any Person (other than license agreements
related to off-the-shelf software products);
(xiii) any confidentiality agreements entered into
by Rainwire during the period commencing three years prior to
the date hereof pursuant to which confidential information has
been provided to a third party or by which Rainwire was
restricted from providing information to third parties, other
than confidentiality agreements entered into in the normal
course of business;
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(xiv) any voting trust or similar agreements
relating to any of the ownership interests in Rainwire to
which any of the Rainwire Shareholders or Rainwire is a party;
(xv) any joint venture, partnership or similar
documents or agreements; and
(xvi) any agreement that materially limits or
purports to materially limit the ability of Rainwire to own,
operate, sell, transfer, pledge or otherwise dispose of any
assets.
(b) Rainwire has delivered or will deliver to Oasis true
and complete copies of all Rainwire Agreements. Except as indicated on
Schedule 6.12, the Rainwire Agreements are valid and enforceable in
accordance with their terms (except to the extent limited by equitable
principles or bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) and there is not under any of
such contracts (i) any existing or claimed default by Rainwire or event
which with the notice or lapse of time, or both, would constitute a
default by Rainwire or (ii) to the knowledge of Rainwire, any existing
or claimed default by any other party or event which with notice or
lapse of time, or both, would constitute a default by any such party.
Except as indicated on Schedule 6.12, the continuation validity and
enforceability of the Rainwire Agreements will not be affected by the
Share Exchange and the Share Exchange will not result in a breach of,
or default under, or require the consent of any other party to any of
the Rainwire Agreements. Except as set forth on Schedule 6.12, there is
no actual or, to the knowledge of Rainwire, threatened termination,
cancellation or limitation of any Rainwire Agreements that would have a
Rainwire Material Adverse Effect. To the knowledge of Rainwire, there
is no pending or threatened bankruptcy, insolvency or similar
proceeding with respect to any other party to the Rainwire Agreements.
SECTION 6.13. EMPLOYMENT AND LABOR MATTERS.
(a) Schedule 6.13(a) sets forth (i) the number of
full-time and part-time employees of Rainwire and (ii) the name and
compensation paid to each employee of or consultant to Rainwire who
currently receives or has received salary, benefits and bonuses for the
two most recently ended fiscal years in excess of $50,000.
(b) Rainwire is in compliance in all material respects
with all applicable laws respecting employment and employment
practices, terms and conditions of employment, wages and hours,
occupational safety and health, including the National Labor Relations
Act, the Immigration Reform and Control Act of 1986, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C.
Section 1981, the Americans With Disabilities Act, the Fair Labor
Standards Act, ERISA, the Occupational Safety and Health Act, the
Family Medical Leave Act, and any other law, ordinance or regulation
respecting the terms and conditions of employment, including
authorization to work in the United States, equal employment
opportunity (including prohibitions against
23
discrimination, harassment, and retaliation), payment of wages, hours
of work, occupational safety and health, and labor practices.
(c) Except as disclosed on Schedule 6.13(c),
(i) there are no charges, governmental audits,
investigations, administrative proceedings or complaints
concerning Rainwire's employment practices pending or, to the
knowledge of Rainwire, threatened before any federal, state or
local agency or court, and, to the knowledge of Rainwire, no
basis for any such matter exists;
(ii) Rainwire is not a party to any union or
collective bargaining agreement, and, to the knowledge of
Rainwire, no union attempts to organize the employees of
Rainwire have been made, nor are any such attempts now
threatened; and
(iii) there are no pending or, to the knowledge of
Rainwire, threatened material claims by any current or former
employee of Rainwire or any employment-related claims or
investigations by any Authority, including any charges to the
Equal Employment Opportunity Commission or state employment
practice agency, investigations regarding compliance with
federal, state or local wage and hour laws, audits by the
Office of Federal Contractor Compliance Programs, complaints
of sexual harassment or any other form of unlawful harassment,
discrimination, or retaliation.
SECTION 6.14. EMPLOYEE BENEFIT MATTERS. Schedule 6.14 attached hereto
sets forth a description of all "Employee Welfare Benefit Plans" and "Employee
Pension Benefit Plans" (as defined in Sections 3(1) and 3(2), respectively, of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
existing on the date hereof that are or have been maintained or contributed to
by Rainwire. Except as listed on Schedule 6.14, Rainwire does not maintain any
retirement or deferred compensation plan, savings, incentive, stock option or
stock purchase plan, unemployment compensation plan, vacation pay, severance
pay, bonus or benefit arrangement, insurance or hospitalization program or any
other fringe benefit arrangement for any employee, consultant or agent of
Rainwire, whether pursuant to contract, arrangement, custom or informal
understanding, which do not constitute an "Employee Benefit Plan" (as defined in
Section 3(3) of ERISA), for which Rainwire may have any ongoing material
liability after Closing. Oasis does not maintain nor has it ever contributed to
any Multi-Employer Plan as defined by Section 3(37) of ERISA. Rainwire does not
currently maintain any Employee Pension Benefit Plan subject to Title IV of
ERISA. There have been no "prohibited transactions" (as described in Section 406
of ERISA or Section 4975 of the Code) with respect to any Employee Pension
Benefit Plan or Employee Welfare Benefit Plan maintained by Rainwire as to which
Rainwire has been a party. As to any employee pension benefit plan listed on
Schedule 6.14 and subject to Title IV of ERISA, there have been no reportable
events (as such term is defined in Section 4043 of ERISA).
SECTION 6.15. INSURANCE POLICIES. Attached hereto as Schedule 6.15 is a
list of all insurance policies of Rainwire setting forth with respect to each
policy the name of the insurer, a
24
description of the policy, the dollar amount of coverage, the amount of the
premium, the date through which all premiums have been paid, and the expiration
date. Each insurance policy relating to the insurance referred to in Schedule
6.15 is in full force and effect, is valid and enforceable, and Rainwire is not
in breach of or in default under any such policy. All policies listed on
Schedule 6.15 will be outstanding and duly in force at the Closing Date, the
premiums payable in respect of such policies have been paid or will be paid in
full prior to the closing date, and none of such policies provide for any
retrospective premium adjustment or other experience based liability on the part
of Rainwire. Rainwire has not received any notice of or any reason to believe
that there is or has been any actual, threatened, or contemplated termination or
cancellation of any insurance policy relating to the said insurance. Rainwire
has not since inception (a) been denied or had revoked, canceled or rescinded
any policy of insurance, or (b) self insured against any risk ordinarily insured
against by similar businesses. Schedule 6.15 contains a true, correct and
complete list and summary of all claims which have been made under each
insurance policy relating to the said insurance. Rainwire has not failed to give
any notice or to present any claim under any insurance policy in a due and
timely fashion, and to the best of its knowledge, all insurable risks are
adequately covered by insurance except for any exposure occasioned by lack of
Directors' and Officers' insurance coverage.
SECTION 6.16. TAXES. Except as set forth on Schedule 6.16, Rainwire has
filed or obtained filing extensions for all tax returns, federal, state, county,
and local, including payroll taxes, required to be filed by it, and Rainwire has
paid or established adequate reserves (in accordance with generally accepted
accounting principles) for the payment of all taxes shown to be due by such
returns as well as all other taxes, assessments, and governmental charges which
have become due or payable, including, without limitation, all taxes which
Rainwire is obligated to withhold from amounts owing to employees, creditors,
and third parties. The federal income tax returns of Rainwire have never been
audited by the Internal Revenue Service and no state income or sales tax returns
of Rainwire have been audited. No deficiency assessment with respect to or
proposed adjustment of Rainwire's federal, state, county, or local taxes,
including payroll taxes, is pending or, to the best of Rainwire's knowledge,
threatened. There is no tax lien, whether imposed by any federal, state, county,
or local taxing authority, outstanding against the assets, properties, or
business of Rainwire (other than liens for taxes not yet due and payable).
Neither Rainwire nor any of its shareholders have ever filed a consent
pertaining to Rainwire pursuant to Section 341(f) of the IRC (as hereinafter
defined), relating to collapsible corporations.
SECTION 6.17. INTERESTED TRANSACTIONS. Except as provided on Schedule
6.17, Rainwire is not a party to any contract, loan or other transaction with
any Rainwire Shareholder nor does Rainwire have any direct or indirect interest
in or affiliation with any Rainwire Shareholder to any such contract, loan or
other transaction. No Rainwire Shareholder is an employee, consultant, partner,
principal, director or owner of, or has any other direct or indirect interest in
or affiliation with, any person or business entity that is engaged in a business
that competes with or is similar to the business of Rainwire.
SECTION 6.18. INTELLECTUAL PROPERTY.
(a) Attached hereto as Schedule 6.18 is a true, correct
and complete list of all of Rainwire's patents, trademarks, trade
names, or trademark or trade name registrations,
25
domain name registrations, service marks, and copyrights or copyright
registrations (the "Proprietary Rights"). All of Rainwire's Proprietary
Rights are valid, enforceable, in full force and effect and free and
clear of any and all security interests, liens, pledges and
encumbrances of any nature or kind. Rainwire has not infringed upon and
are not infringing upon any patent, trademark, trade name, or trademark
or trade name registration, service mark, copyright, or copyright
registration of any other Person.
(b) No trade secret or confidential know-how material to
the business of Rainwire as currently operated has been disclosed or
authorized to be disclosed to any third party, other than pursuant to a
non-disclosure agreement that protects Rainwire's proprietary interests
in and to such trade secrets and confidential know-how, and other than
disclosures to employees, officers, directors, agents, attorneys,
accountants, consultants, independent contractors or other
representatives of Rainwire, each of whom is obligated (by contract,
employment policy, cannons of ethics or the like) to maintain the
confidentiality of such information.
(c) The consummation of the transactions contemplated
hereby will not result in the loss or impairment of the right of
Rainwire or any of its successors to own, use, license or sublicense
any of the Intellectual Property currently owned, used, licensed or
sublicensed by Rainwire nor will it require the consent of any
Authority or third party in respect of any such Intellectual Property
and no present or former employee, or officer of Rainwire has any
right, title or interest, directly or indirectly, in whole or in part,
in any Intellectual Property.
SECTION 6.19. BROKERAGE. Except as disclosed on Schedule 6.20, Rainwire
has not employed any broker, finder, advisor, consultant or other intermediary
in connection with this Agreement or the transactions contemplated by this
Agreement who is or might be entitled to any fee, commission or other
compensation from Rainwire, or from Oasis or its Affiliates, upon or as a result
of the execution of this Agreement or the consummation of the transactions
contemplated hereby. Such fee shall be borne by Rainwire.
SECTION 6.20. SUBSIDIARIES. Except as set forth on Schedule 6.20,
Rainwire does not have any subsidiaries and does not, directly or indirectly,
own a controlling interest in any corporation, partnership, joint venture or
other entity.
SECTION 6.21. STATEMENTS TRUE AND CORRECT. No representation or
warranty made herein by Rainwire, nor in any statement, certificate or
instrument to be furnished to Oasis or the Oasis Shareholders by Rainwire
pursuant to any Share Exchange Document, contains or will contain any untrue
statement of material fact or omits or will omit to state a material fact
necessary, in light of the circumstances under which it was made, to make these
statements contained herein and therein not misleading.
26
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. ACCESS TO INFORMATION. From the date of this Agreement
through the Closing Date, Oasis will afford the officers and authorized
representatives of Rainwire access during regular business hours and upon
reasonable notice to Oasis's properties, books and records that may relate to or
concern the Share Exchange and will furnish such parties with such additional
financial, operating and other information as to the business and properties of
Oasis as such parties may from time to time reasonably request. Such parties
shall also be allowed access, upon reasonable notice, to consult with the
officers, employees, accountants, counsel and agents of Oasis in connection with
such investigation of the properties and business of Oasis. In addition, from
the date of this Agreement through the Closing Date, Rainwire will afford the
officers and authorized representatives of Oasis access during regular business
hours and upon reasonable notice to all of Rainwire's properties, books and
records that may relate to or concern the Share Exchange and will furnish such
parties with such additional financial, operating and other information as to
the business and properties of Rainwire as such parties may from time to time
reasonably request. Such parties shall also be allowed access, upon reasonable
notice, to consult with the officers, employees, accountants, counsel and agents
of Rainwire in connection with such investigation of the properties and business
of Rainwire. In each case, such access or investigation shall be subject to
Section 7.07.
SECTION 7.02. NO-SHOP. Unless and until this Agreement is terminated
pursuant to Article X hereof, Oasis shall not directly or indirectly, through
any officer, director, shareholder, employee, agent, or otherwise: (a) solicit,
initiate or encourage submission of proposals or offers from any person or other
entity relating to any purchase of any acquisition or business combination of
all or a material amount of the assets of, or an equity interest in Oasis, or
approve or undertake any such transaction; (b) participate in any discussions or
negotiations regarding, or furnish to any other person, corporation or other
entity, any information with respect to, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other person, corporation or other entity to do, any of the foregoing; or
(c) enter into any contract, agreement or understanding, whether oral or
written, that would prevent the consummation of the Share Exchange.
Notwithstanding the foregoing, in the event Oasis or any Oasis Shareholder shall
directly or indirectly receive a proposal relating to any acquisition or
business combination involving Oasis, Oasis or such Oasis Shareholder shall
immediately notify Rainwire in writing of the terms of such proposal. Oasis
agrees that it will, and will cause its officers, directors and representatives
to, immediately cease and cause to be terminated any activities, discussions or
negotiations existing as of the date of this Agreement with any parties
conducted heretofore with respect to any acquisition, business combination,
equity interest or similar transaction with respect to Oasis.
If either Oasis or the Oasis Shareholders signs a letter of intent or
other agreement in breach of this Section 7.02, and such transaction is
ultimately consummated, then, immediately upon the closing of such transaction,
Oasis shall forfeit to Rainwire the amount of Financing that had been provided
to Rainwire in accordance with 4.05 at the time of the breach. The Parties
27
agree that this amount is in consideration for Rainwire's expenses and lost
opportunities in connection with a breach of this Section 7.02 by Oasis and
shall not be construed as a penalty.
SECTION 7.03. AFFIRMATIVE COVENANTS OF OASIS. From the date hereof
until the earlier of the Effective Time or the termination of this Agreement,
Oasis covenants and agrees that, unless the prior written consent of Rainwire
shall have been obtained, and except as otherwise expressly contemplated herein,
Oasis shall:
(a) operate its business only in the usual, regular, and
ordinary course of business, consistent with past practices;
(b) use reasonable commercial efforts to preserve intact
its business organization, licenses, permits, government programs,
private programs and customers;
(c) use reasonable commercial efforts to retain the
services of its employees, agents and consultants on terms and
conditions not less favorable than those existing prior to the date
hereof and to ensure that there are no material or adverse changes to
employee relations;
(d) keep and maintain its assets in their present
condition, repair and working order, except for normal depreciation and
wear and tear, and maintain its insurance, rights and licenses;
(e) pay all accounts payable of Oasis in accordance with
past practice and collect all accounts receivable in accordance with
past practice;
(f) consult with Rainwire prior to undertaking any new
business opportunity outside the ordinary course of business and not
undertake such new business opportunity without the prior written
consent of Rainwire;
(g) make available to Rainwire true and correct copies of
all internal management and control reports (including aging of
accounts receivable, listings of accounts payable, and inventory
control reports) and financial statements related to Oasis and
furnished to management of Oasis;
(h) cause all tax returns that have not been filed prior
to the date hereof to be prepared and filed on or before the date such
tax return is required to be filed (taking into account any extensions
of the filing deadlines granted); provided, however, that any such tax
return shall not be filed without a reasonable opportunity for prior
review and comment by Rainwire;
(i) as soon as reasonably practicable after they become
available, but in no event more than 30 days following the end of each
calendar month, deliver to Rainwire true and complete copies of its
monthly financial statements for each calendar month ending subsequent
to the date hereof on the format historically utilized by Oasis;
28
(j) perform in all material respects all obligations
under agreements relating to or affecting its assets, properties or
rights;
(k) keep in full force and effect present insurance
policies or other comparable insurance coverage; and
(l) notify Rainwire of (i) any event or circumstance
which has caused or constituted, or is reasonably likely to have a
Oasis Material Adverse Effect or would cause or constitute, a breach of
any of the representations, warranties or covenants contained herein by
Oasis or the Oasis Shareholders; or (ii) any material change in the
normal course of business or in the operation of the assets, and of any
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), adjudicatory
proceedings, budget meetings or submissions involving Oasis or any
material property of Oasis. Oasis agrees to keep Rainwire fully
informed of such events and to permit Rainwire's representatives prompt
access to all materials prepared in connection therewith.
SECTION 7.04. NEGATIVE COVENANTS OF OASIS. From the date hereof until
the earlier of the Effective Time or the termination of this Agreement, Oasis
covenants and agrees that it will not do any of the following without the prior
written consent of Rainwire:
(a) take any action which would (i) adversely affect the
ability of any party to the Share Exchange Documents to obtain any
consents required for the transactions contemplated thereby, or (ii)
adversely affect the ability of any party hereto to perform its
covenants and agreements under the Share Exchange Documents;
(b) amend any of its organizational or governing
documents;
(c) incur any additional debt obligation or other
obligation for borrowed money except in the ordinary course of the
business of Oasis consistent with past practices, or impose, or suffer
the imposition, on any asset of Oasis of any lien or permit any such
lien to exist;
(d) repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any Oasis Common Stock, or declare or pay any
dividend or make any other distribution in respect of Oasis Common
Stock;
(e) other than pursuant to the Share Exchange Documents,
issue, sell, pledge, encumber, authorize the issuance of, enter into
any contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional
Oasis Common Stock or any rights with respect to any Oasis Common
Stock;
(f) purchase or acquire any assets or properties, whether
real or personal, tangible or intangible, or sell or dispose of any
assets or properties, whether real or personal, tangible or intangible,
except in the ordinary course of business and consistent with past
practices;
29
(g) adjust, split, combine or reclassify any Oasis Common
Stock or issue or authorize the issuance of any other securities in
respect of or in substitution for Oasis Common Stock, or sell, lease,
mortgage or otherwise dispose of or otherwise encumber any asset having
a book value in excess of $50,000 other than in the ordinary course of
business for reasonable and adequate consideration;
(h) purchase any securities or make any material
investment, either by purchase of stock or other securities,
contributions to capital, asset transfers, or purchase of any assets,
in any entity, or otherwise acquire direct or indirect control over any
other entity;
(i) grant any increase in compensation or benefits to the
employees or officers of Oasis, except in accordance with past
practice; pay any severance or termination pay or any bonus other than
pursuant to written policies or written contracts in effect as of the
date hereof and disclosed on the Schedules hereto; enter into or amend
any severance agreements with officers of Oasis; or grant any material
increase in fees or other increases in compensation or other benefits
to directors of Oasis except in accordance with past practice;
(j) other than as contemplated by this Agreement or as
set forth on Schedule 7.04, enter into or amend any employment contract
between Oasis and any person or entity (unless such amendment is
required by law) that Oasis does not have the unconditional right to
terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time;
(k) adopt any new employee benefit plan or make any
material change in or to any existing employee benefit plans other than
any such change that is required by law or that, in the opinion of
counsel, is necessary or advisable to maintain the tax qualified status
of any such plan;
(l) make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in tax laws or regulatory accounting
requirements or GAAP;
(m) commence any litigation other than in accordance with
past practice, settle any litigation involving any liability of Oasis
for material money damages or restrictions upon the operations of
Oasis;
(n) except as set forth on Schedule 7.04, modify, amend
or terminate any material contract or waive, release, compromise or
assign any material rights or claims;
(o) except in the ordinary course of business and, even
if in the ordinary course of business, then not in an amount to exceed
$25,000 in the aggregate, make or commit to make any capital
expenditure, or enter into any lease of capital equipment as lessee or
lessor;
(p) take any action, or omit to take any action, which
would cause any of the representations and warranties contained in
Article V to be untrue or incorrect;
30
(q) make any loan to any person or increase the aggregate
amount of any loan currently outstanding to any person; and
(r) shall not agree, in writing or otherwise, to take any
of the foregoing actions or take any action that would result in any of
the conditions to the Share Exchange not being satisfied, or, except as
otherwise allowed hereunder, that could reasonably be expected to
prevent, impede, interfere with or significantly delay the transactions
contemplated hereby.
SECTION 7.05. AFFIRMATIVE COVENANTS OF RAINWIRE. From the date hereof
until the earlier of the Effective Time or the termination of this Agreement,
Rainwire covenants and agrees that, unless the prior written consent of Oasis
shall have been obtained, and except as otherwise expressly contemplated herein,
Rainwire shall and shall cause each of its Subsidiaries to:
(a) use reasonable commercial efforts to preserve intact
its business organization, licenses, permits, government programs,
private programs and customers; and
(b) notify Oasis of (i) any event or circumstance which
has caused or constituted, or is reasonably likely to have an Rainwire
Material Adverse Effect or would cause or constitute, a breach of any
of Rainwire's representations, warranties or covenants contained
herein; or (ii) any material change in the normal course of business or
in the operation of Rainwire's assets, and of any material governmental
complaints, investigations or hearings (or communications indicating
that the same may be contemplated) or adjudicatory proceedings.
SECTION 7.06. NEGATIVE COVENANTS OF RAINWIRE. From the date hereof
until the earlier of the Effective Time or the termination of this Agreement,
Rainwire covenants and agrees that neither Rainwire nor any of its Subsidiaries,
will do any of the following without the prior written consent of Oasis:
(a) take any action which would (i) adversely affect the
ability of any party to the Share Exchange Documents to obtain any
consents required for the transactions contemplated thereby, or (ii)
adversely affect the ability of any party hereto to perform its
covenants and agreements under the Share Exchange Documents;
(b) take any action, or omit to take any action, which
would cause any of the representations and warranties contained in
Article VI to be untrue or incorrect.
SECTION 7.07. CONFIDENTIALITY. Rainwire and Oasis agree that each shall
hold in confidence any confidential information about the other that it has
received, or hereafter receives, pursuant to any provision of this Agreement
under circumstances indicating the confidentiality of such information unless
(a) such information shall have been publicly disclosed other than as a result
of any wrongful action by the recipient of such information or (b) the recipient
of such information independently develops or is aware of such information.
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SECTION 7.08. PUBLIC ANNOUNCEMENTS. Rainwire, Oasis and the Oasis
Shareholders will consult with each other before issuing any press releases or
otherwise making any public statements or filings with governmental entities
with respect to this Agreement or the transactions contemplated hereby and shall
not issue any press releases or make any public statements or filings with
governmental entities prior to such consultation and shall modify any portion
thereof if the other party objects thereto, unless the same may be required by
applicable law.
SECTION 7.09. FILINGS WITH STATE OFFICES. Upon the terms and subject to
the conditions of this Agreement, Oasis and Rainwire shall execute and file a
Certificate of Share Exchange with the Secretary of State of the State of
Georgia in connection with the Closing.
SECTION 7.10. CONDITIONS TO CLOSING. The Oasis Shareholders, Oasis and
Rainwire agree to use their commercially reasonable best efforts to satisfy the
closing conditions set forth in Articles VIII and IX of this Agreement within
three (3) business days after all regulatory matters have been complied with.
SECTION 7.11. SALE OF SHARES.
(a) The Rainwire Common Stock to be issued in the Share
Exchange will be issued by Rainwire relying on an exemption from
registration pursuant to Section 4(2) under the Securities Act and
Regulation D thereunder or similar exemptions under the Securities Act
and that the certificates representing the shares of Rainwire Common
Stock shall bear appropriate legends to identify such shares as
"restricted securities" under the Securities Act, to comply with
applicable state securities laws. Each Oasis Shareholder acknowledges
and agrees that in order for Rainwire to rely on such exemptions from
registration, Rainwire will be required to obtain certain
representations made by the Oasis Shareholders including, but not
limited to, representations regarding limitations on resales of
Rainwire Common Stock.
(b) So long as required in the reasonable opinion of
Rainwire's counsel, stock transfer orders will be given to Rainwire's
Transfer Agent in connection with the certificates to be issued
representing Rainwire Common Stock and such certificates will bear
legends substantially as follows:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF, NOR WILL
ANY ASSIGNEE OR ENDORSEE HEREOF BE RECOGNIZED AS AN OWNER
HEREOF BY THE ISSUER FOR ANY PURPOSE, UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH
RESPECT TO SUCH SHARES SHALL THEN BE IN EFFECT OR UNLESS THE
TRANSACTION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT. IN ADDITION, THESE SECURITIES HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE
32
AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION
WHICH IS EXEMPT UNDER THE APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EFFECTIVE REGISTRATION OR QUALIFICATION UNDER
SUCH LAWS."
SECTION 7.12. [RESERVED].
SECTION 7.13. [RESERVED].
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF RAINWIRE
The obligation of Rainwire to consummate the Share Exchange is subject
to the satisfaction or written waiver, at or prior to Closing, of each of the
following conditions:
SECTION 8.01. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Oasis and the Oasis Shareholders set forth in this Agreement, or
any document or instrument delivered to Rainwire hereunder, shall be true and
correct in all material respects as of the Effective Time with the same force
and effect as if such representations and warranties had been made at and as of
the Effective Time, except with respect to any of such representations and
warranties referring to a state of facts existing on a specified date prior to
the Closing Date, it shall be sufficient if at the Effective Time such
representation and warranty continues to describe accurately the state of facts
existing on the date so specified; provided, however, that Oasis and the Oasis
Shareholders shall have five days to cure any such material breach of a
representation or warranty (it being agreed that such five day period shall
commence as to such breach upon Rainwire becoming aware thereof and that
disclosure of a matter subsequent to the date hereof shall not constitute a
cure).
SECTION 8.02. PERFORMANCE; COVENANTS. All of the terms, covenants and
conditions of the Share Exchange Documents to be complied with or performed by
Oasis or the Oasis Shareholders at or prior to Closing shall have been complied
with and performed in all material respects including, but not limited to, the
delivery of the following documents:
(a) A good standing certificate regarding Oasis,
certified by the Secretary of State of the respective state of
incorporation and all states where such entity is qualified to do
business, dated within 30 business days of the Closing;
(b) A certificate dated as of the Closing Date signed by
the duly authorized officers of Oasis certifying that the
representations and warranties of Oasis set forth herein are true and
correct in all material respects as of the Effective Time and that
Oasis and each of the Oasis Shareholders have fulfilled all of the
conditions of this Article VIII;
(c) Written consents of all third parties necessary for
the consummation of the transactions contemplated by the Share Exchange
Documents;
33
(d) Resolutions duly adopted by Oasis (Board and
shareholder) approving the execution, delivery and performance of this
Agreement and the consummation of the Share Exchange, certified by an
appropriate officer of Oasis; and
(e) All books and records of Oasis, including all
corporate and other records, minute books, stock record books, stock
registers, books of accounts, contracts, agreements and such other
documents or certificates as shall be reasonably requested by Rainwire,
which the parties acknowledge will at the Closing be located at the
corporate offices of Oasis.
SECTION 8.03. NECESSARY CONSENTS AND APPROVALS. Rainwire, Oasis and the
Oasis Shareholders shall have obtained all licenses, consents and permits,
provided all notices, and all waiting periods required by Law, shall have
expired, necessary in order for Rainwire and Oasis to consummate the Share
Exchange.
SECTION 8.04. NO MATERIAL ADVERSE CHANGE. There shall not have occurred
a Oasis Material Adverse Effect between the date hereof and the Effective Time
or a material change in the financial condition of Oasis as represented in the
Oasis Financial Statements and the Schedules attached to this Agreement.
SECTION 8.05. NO INJUNCTION, ETC. No action, proceeding, investigation
or legislation shall have been instituted, threatened or proposed before any
court, governmental agency, or legislative body to enjoin, restrain, prohibit or
obtain substantial damages in respect of, or which is related to, arises out of,
this Agreement or the consummation of the Share Exchange, or which is related to
or arises out of the business or operations of Oasis, if such action,
proceeding, investigation or legislation, in the reasonable judgment of Rainwire
or its counsel, would make it inadvisable to consummate such transactions. In
the event any order, decree or injunction shall have been issued, each party
shall use its reasonable efforts to remove any such order, decree or injunction.
SECTION 8.06. INVESTOR REPRESENTATION LETTERS. The Oasis Shareholders
that did not deliver Investor Representation Letters on the date of signing of
this Agreement shall have delivered Investment Representation Letters.
SECTION 8.07. OASIS SHAREHOLDER APPROVAL. This Agreement and all other
documents and instruments to be delivered in connection herewith, shall have
been approved by the Oasis Shareholders in accordance with GBCC.
SECTION 8.08. [RESERVED].
SECTION 8.09. CERTIFICATE OF SHARE EXCHANGE. Oasis shall have executed
and delivered to Rainwire the Certificate of Share Exchange to be filed with the
Secretary of State of the State of Georgia in connection with the Share
Exchange.
SECTION 8.10. TAX-FREE SHARE EXCHANGE. The Parties are reasonably
satisfied that as of the Closing Date, the transactions contemplated by the
Share Exchange will qualify as a tax-free reorganization within the meaning of
Section 368(a) of the Code.
34
SECTION 8.11. EVIDENCE OF COMPLIANCE WITH SECURITIES LAWS. Rainwire
shall be reasonably satisfied that the issuance of Rainwire Common Stock to the
Oasis Shareholders qualifies for an exemption from registration pursuant to
Section 4(2) under the Securities Act and Regulation D thereunder.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF OASIS AND OASIS SHAREHOLDERS
The obligations of Oasis and the Oasis Shareholders to close the Share
Exchange are subject to the satisfaction or waiver, at or prior to Closing, of
each of the following conditions:
SECTION 9.01. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Rainwire set forth in this Agreement, or any document or
instrument delivered to any party hereunder, shall be true and correct in all
material respects as of the Effective Time with the same force and effect as if
such representations and warranties had been made at and as of the Effective
Time, except with respect to any of such representations and warranties
referring to a state of facts existing at a specified date prior to the Closing
Date, it shall be sufficient if at the Effective Time such representation and
warranty continues to describe accurately in all material respects the state of
facts existing on the date so specified; provided, however, that Rainwire shall
have five days to cure any such material breach of a representation or warranty
(it being agreed that such five day period shall commence as to such breach upon
Oasis becoming aware thereof and that disclosure of a matter subsequent to the
date hereof shall not constitute a cure).
SECTION 9.02. PERFORMANCE; COVENANTS. All of the terms, covenants and
conditions of this Agreement to be complied with or performed by Rainwire at or
prior to the Closing shall have been complied with and performed in all material
respects, including, but not limited to delivery of the following documents:
(a) A good standing certificate regarding Rainwire
certified by the Secretary of State of the State of Delaware, dated
within 30 days prior to Closing;
(b) A certificate dated as of the Closing Date signed by
a duly authorized officer of Rainwire certifying that the
representations and warranties of Rainwire set forth herein are true
and correct in all material respects as of the Effective Time and that
Rainwire has fulfilled all of the conditions of this Article; and
(c) Resolutions duly adopted by the Board of Directors of
Rainwire approving the execution, delivery and performance of this
Agreement and the consummation of the Share Exchange, certified by an
appropriate officer of Rainwire;
SECTION 9.03. NECESSARY CONSENTS AND APPROVALS. Rainwire, Oasis and the
Oasis Shareholders shall have obtained all licenses, consents and permits,
provided all notices, and all waiting periods required by Law, shall have
expired, necessary in order for Rainwire and Oasis to consummate the Share
Exchange, including the waiting period associated with the Schedule 14C filed,
or to be filed, by Rainwire in connection with the Amendment.
35
SECTION 9.04. NO MATERIAL ADVERSE CHANGE. There shall not have occurred
an Rainwire Material Adverse Effect between the date hereof and the Effective
Time.
SECTION 9.05. NO INJUNCTION, ETC. No action, proceeding, investigation
or legislation shall have been instituted, threatened or proposed before any
court, governmental agency, or legislative body to enjoin, restrain, prohibit or
obtain substantial damages in respect of, or which is related to, arises out of,
this Agreement or the consummation of the Share Exchange, or which is related to
or arises out of the business or operations of Rainwire, if such action,
proceeding, investigation or legislation, in the reasonable judgment of Oasis or
its counsel, would make it inadvisable to consummate such transactions. In the
event any order, decree or injunction shall have been issued, each party shall
use its reasonable efforts to remove any such order, decree or injunction.
SECTION 9.06. SECURITIES FILINGS. Rainwire shall have filed with the
SEC its Annual Report on Form 10-KSB for the fiscal year ending December 31,
2000, its Quarterly Report on Form 10-QSB for the quarter ended March 31, 2001,
and its Quarterly Report on form 10-QSB for the quarter ended June 30, 2001.
SECTION 9.07. CERTIFICATE OF SHARE EXCHANGE. Rainwire shall have
executed and delivered to Oasis the certificate of share exchange to be filed
with the Secretary of State of the State of Georgia in connection with the Share
Exchange.
SECTION 9.08. TAX-FREE SHARE EXCHANGE. The Parties are reasonably
satisfied that as of the Closing Date, the transactions contemplated by the
Share Exchange will qualify as a tax-free reorganization within the meaning of
Section 368(a) of the Code.
SECTION 9.09. EMPLOYMENT AGREEMENTS. Upon execution of this Agreement,
and as a result of Walter Elliott's resignation, Walter Elliott's employment
agreement with Rainwire shall be terminated.
SECTION 9.10. RAINWIRE SHAREHOLDER APPROVAL. Rainwire shall have taken
all steps required by the GCDL and the federal securities laws to obtain the
consent of a majority of its shareholders in favor of the Amendment and to
notify the remaining shareholders of the Amendment.
ARTICLE X
TERMINATION
SECTION 10.01. RIGHT OF TERMINATION. This Agreement and the Share
Exchange may be terminated at any time prior to the Closing Date:
(a) By the mutual written consent of Rainwire and Oasis.
(b) by either Rainwire or Oasis if any court of competent
jurisdiction in the United States or any State shall have issued an
order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the exchange
36
of stock and such order, judgment or decree shall have become final and
nonappealable; provided that the right to terminate this Agreement
under this Section 10.01(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the completion of the Closing
to occur on or before such date; or
(c) by Rainwire if there has been (i) a material breach
of any covenant or agreement or of a representation or warranty herein
on the part of Oasis which has not been cured, or adequate assurance
(acceptable to Rainwire in its sole discretion) of cure given, in
either case, within fifteen (15) business days following receipt of
notice of such breach; or
(d) by Oasis if (i) there has been a material breach of
any covenant or agreement or of a representation or warranty herein on
the part of Rainwire which has not been cured, or adequate assurance
(acceptable to Oasis in its sole discretion) of cure given, in either
case, within fifteen (15) business days following receipt of notice of
such breach or (ii) at Closing Rainwire shall not be listed on the
Over-the-Counter Bulletin Board (OTC:BB) exchange; or
(e) by either Rainwire or Oasis (and the Oasis
Shareholders) if either of such party's due diligence investigation has
disclosed the existence of (i) any matter relating to the other party
or its business that is materially and adversely (to the investigating
party) at variance with those matters theretofore disclosed to the
investigating party, or (ii) any matter which, in the investigating
party's reasonable judgment, (A) indicates a material adverse change in
the condition, assets or prospects of the other party, or (B) would
make it inadvisable to consummate the exchange of stock and other
transactions contemplated by this Agreement.
SECTION 10.02. EFFECT OF TERMINATION. In the event of termination in
accordance with this Article X, this Agreement shall become void and of no
further force or effect, without any liability on the part of any of the parties
hereto or their respective owners, directors, officers or employees, except the
obligations of each party to preserve the confidentiality of documents,
certificates and information furnished to such party pursuant thereto and for
any obligation or liability of any party based on or arising from any breach or
default by any such party with respect to his or its particular representations,
warranties, covenants or agreements, as to his or its particular actions or
inactions, contained in the Share Exchange Documents.
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
SECTION 11.01. INDEMNIFICATION BY RAINWIRE. Rainwire shall defend,
indemnify and hold harmless Oasis and the Oasis Shareholders and their
respective heirs, personal and legal representatives, guardians, successors and
assigns, from and against any and all claims, threats, liabilities, taxes,
interest, fines, penalties, suits, actions, proceedings, demands, damages,
losses, costs and expenses (including attorneys' and experts' fees and court
costs) of every kind and
37
nature arising out of, resulting from or in connection with any
misrepresentation or omission or breach by Rainwire of any representation or
warranty contained in this Agreement.
SECTION 11.02. INDEMNIFICATION BY OASIS AND THE OASIS SHAREHOLDERS.
Oasis and the Oasis Shareholders shall defend, indemnify and hold harmless
Rainwire and its respective representatives, successors and assigns, from and
against any and all claims, threats, liabilities, taxes, interest, fines,
penalties, suits, actions, proceedings, demands, damages, losses, costs and
expenses (including attorneys' and experts' fees and court costs) of every kind
and nature arising out of, resulting from, or in connection with any
misrepresentation or omission or breach by Oasis or the Oasis Shareholders or
any representation or warranty contained in this Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. NOTICES.
(a) Any notice sent in accordance with the provisions of
this Section 12.01 shall be deemed to have been received (even if
delivery is refused or unclaimed) on the date which is: (i) the date of
proper posting, if sent by certified U.S. mail or by express U.S. mail
or private overnight courier; or (ii) the date on which sent, if sent
by facsimile transmission, with confirmation and with the original to
be sent by certified U.S. mail, addressed as follows:
If to Oasis: Oasis Group, Inc.
[TO BE PROVIDED]
Attention: Ronald Potts
Facsimile: [TO BE PROVIDED]
If to Rainwire: Rainwire Partners, Inc.
[TO BE PROVIDED]
Attention: Ms. Lynne Marchessault
Facsimile: [TO BE PROVIDED]
(b) Any party hereto may change its address specified for
notices herein by designating a new address by notice in accordance
with this Section 12.01.
SECTION 12.02. EXPENSES. Each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including any fees of brokers, finders
investment bankers or other agents or incurred to obtain a fairness opinion;
provided, however, for all legal, accounting, investment banking and other fees
and expenses incurred by Oasis and the Oasis Shareholders as a result of the
transactions contemplated hereby, Oasis shall pay from its own funds the fees
and expenses of the Oasis Shareholders prior to the Closing, or to the extent
not so paid, then Oasis shall pay such fees and expenses after the Closing when
due.
38
SECTION 12.03. FURTHER ASSURANCES. Each party covenants that at any
time, and from time to time, after the Closing, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.
SECTION 12.04. WAIVER. Any failure on the part of any party to comply
with any of its obligations, agreements or conditions hereunder may be waived by
any other party to whom such compliance is owed. No waiver of any provision of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.
SECTION 12.05. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of all other parties.
SECTION 12.06. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and permitted assigns.
This Agreement shall survive the Closing and not be merged therein.
SECTION 12.07. HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 12.08. ENTIRE AGREEMENT. This Agreement and the Exhibits,
Schedules, certificates and other documents delivered pursuant hereto or
incorporated herein by reference, contain and constitute the entire agreement
among the parties and supersede and cancel any prior agreements,
representations, warranties, or communications, whether oral or written, among
the parties relating to the transactions contemplated by this Agreement. Neither
this Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom or which the enforcement of such change, waiver, discharge or
termination is sought.
SECTION 12.09. GOVERNING LAW; SEVERABILITY. This Agreement shall be
governed by and construed in accordance with the Laws of the State of Georgia,
without regard to any applicable conflicts of Laws. The provisions of this
Agreement are severable and the invalidity of one or more of the provisions
herein shall not have any effect upon the validity or enforceability of any
other provision.
SECTION 12.10. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 12.11. BROKERS AND FINDERS. Except as set forth on Schedule
12.11, neither Oasis nor the Oasis Shareholders on the one hand, or Rainwire on
the other hand, has employed or otherwise incurred in any manner any liability
for any brokerage fees, agents commissions or finder's fees concerning the
transactions contemplated hereby.
39
SECTION 12.12. SCHEDULES AND EXHIBITS. All Schedules and Exhibits
attached to this Agreement are by reference made a part hereof. All Schedules
will be attached to this Agreement prior to the Closing. All Exhibits will be
attached to this Agreement within five (5) after this Agreement is signed by all
parties.
SECTION 12.13. ENFORCEMENT OF AGREEMENT. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. Oasis hereto agrees
that money damages or other remedy at law would not be sufficient or adequate
remedy for any breach or violation of, or a default under, this Agreement by
them and that in addition to all other remedies available to Rainwire, Rainwire
shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach, violation or
default and to any other equitable relief, including, without limitation,
specific performance, without bond or other security being required.
ARTICLE XIII
CERTAIN DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
"Affiliate" shall mean, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or controlling
such Person, (b) any Person, directly or indirectly, in which such Person holds,
of record or beneficially, five percent or more of the equity or voting
securities, (c) any Person that holds, of record or beneficially, five percent
or more of the equity or voting securities of such Person, (d) any Person that,
through Contract, relationship or otherwise, exerts a substantial influence on
the management of such Person's affairs, (e) any Person that, through Contract,
relationship or otherwise, is influenced substantially in the management of
their affairs by such Person, or (f) any director, officer, partner or
individual holding a similar position in respect of such Person.
"Agreement" shall mean the Agreement and Plan of Share Exchange.
"Authority" shall mean any governmental, regulatory or administrative
body, agency, arbitrator or authority, any court or judicial authority, any
public, private or industry regulatory agency, arbitrator authority, whether
international, national, federal, state or local.
"Claim" shall have the meaning set forth in Section 5.09.
"Closing Date" shall have the meaning set forth in Section 1.02.
"Closing" shall mean the meaning set forth in Section 1.02.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
40
"GCDL" shall mean the General Corporation Law of the State of Delaware.
"Effective Time" shall have the meaning set forth in Section 1.03.
"ERISA" shall mean the Employee Retirement Security Act of 1974, as
amended.
"Exchange Agent" shall have the meaning set forth in Section 3.01.
"Exchange Ratio" shall have the meaning set forth in Section 2.02.
"GBCC" shall mean the Georgia Business Corporation Code, as amended.
"Intellectual Property" shall mean all letters patent, patent
applications, inventions upon which patent applications have not yet been filed,
trade names, trademarks, trademark registrations and applications, service
marks, service mark registrations and applications, copyrights and copyright
registrations and applications, both domestic and foreign, owned, possessed or
used by Borrower.
"Investor Representation Letter" shall have the meaning set forth in
the Preamble of this Agreement.
"Knowledge" or "known," "to the knowledge of," or similar references
shall mean the actual knowledge of any of the directors, officers or managerial
personnel of Oasis with respect to the matter in question, and such knowledge as
any of the directors, officers or managerial personnel of Oasis reasonably
should have obtained upon diligent investigation and inquiry into the matter in
question.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance (including, without limitation, any
easement, right-of-way, zoning or similar restriction or title defect), lien
(statutory or other) or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC or comparable
law of any jurisdiction).
"Oasis" shall mean Oasis Group, Inc., a Georgia corporation.
"Oasis Agreements" shall have the meaning set forth in Section 5.12.
"Oasis Common Stock" shall mean the Common Stock, no par value, of
Oasis.
"Oasis Material Adverse Effect" shall have mean a material adverse
effect on (a) Oasis's ability to perform its obligations under the Share
Exchange Documents to be executed and delivered by it or (b) the assets, results
of operations or prospects of Oasis taken as a whole.
"Oasis Shareholders" shall mean those persons listed on Schedule 1 of
this Agreement.
41
"Person" shall mean any corporation, partnership, joint venture, Oasis,
syndicate, organization, association, trust, entity, joint stock Oasis,
unincorporated organization, Authority or natural person.
"Rainwire" shall mean Rainwire Partners, Inc., a Delaware corporation.
"Rainwire Common Stock" shall mean the common stock, $.001 par value,
of Rainwire.
"Rainwire Material Adverse Effect" shall mean a material adverse effect
on (a) Rainwire's ability to perform its obligations under the Share Exchange
Documents to be executed and delivered by it or, (b) the assets, results of
operations or prospects of Rainwire and its Subsidiaries taken as a whole.
"SEC Reports" shall have the meaning set forth in Section 6.06.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Share Exchange" shall have the meaning set forth in Section 1.01.
"Share Exchange Documents" shall have the meaning set forth in Section
5.01.
"Shareholders" shall mean all of the holders of Oasis Common Stock.
"Subsidiary" shall mean any Person of which a majority of the
outstanding voting securities or other voting equity interests are owned,
directly or indirectly.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto and including any amendment thereof.
"Tax" shall mean any Federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not, and "Taxes" means any or
all of the foregoing collectively.
Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
42
[Signature page to Agreement and Plan of Share Exchange]
IN WITNESS WHEREOF, each of the Parties has caused this Agreement and
Plan of Share Exchange to be executed on its behalf and its corporate seal to be
hereunto affixed and attested by officers thereunto as of the day and year first
above written.
RAINWIRE PARTNERS, INC.
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
OASIS GROUP, INC.
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
[Signatures continued on following page]
[Signature page to Agreement and Plan of Share Exchange
for Oasis Shareholders]
OASIS SHAREHOLDER
----------------------------------------
Name
-----------------------------------
[Signatures continued on following page]
[Signature page to Agreement and Plan of Share Exchange
for Oasis Shareholders]
OASIS SHAREHOLDER
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
EX-16.1
6
g72313ex16-1.txt
LETTER ON CHANGE IN CERTIFYING ACCOUNTANT
EXHIBIT 16.1
TAUBER & BALSER, P.C.
--------------------------------------------------------------------------------
Accountants and Consultants Tower Place, Suite 250
3340 Peachtree Road, N.E.
Atlanta, Georgia 30326-1026
(404) 261-7200 FAX (404) 261-9481
October 29, 2001
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
We have been furnished with a copy of the response to Section 8 of Form 10-KSB
for the event that occurred on September 19, 2001, to be filed by our former
client, Rainwire Partners, Inc. We agree with the statements made in response
to that Item insofar as they relate to our Firm.
Very truly yours,
/s/ Tauber & Balser, P.C.
Tauber & Balser, P.C.
EX-23.1
7
g72313ex23-1.txt
CONSENT OF TAUBER & BALSER, P.C.
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
WITH REGARD TO RAINWIRE PARTNERS, INC.
TAUBER & BALSER, P.C.
Certified Public Accountants
3340 Peachtree Road, N.E.
Suite 250
Atlanta, GA 30326
We hereby consent to the use of our report, dated March 29, 2000, accompanying
the consolidated financial statements of Rainwire Partners, Inc. as of December
31, 1999, included in the Company's Annual Report on Form 10-KSB.
/s/ Tauber & Balser, P.C.
--------------------------------
Tauber & Balser, P.C.
Atlanta, Georgia
October 29, 2001