SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 5, 2000
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Storm High Performance Sound Corp.
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Exact Name of Registrant as Specified in Charter)
Florida 0-29011 52-2048394
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(State or other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
8756 122nd Avenue NE Kirkland, WA 98033
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (425) 827-7817
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(Former Name or Former Address, if Changed Since Last Report)
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This report describes the terms and conditions of a Share Exchange
Agreement and Plan of Merger between the Storm High Performance Sound
Corporation ("Storm") and North Coast Productions, Inc. ("North
Coast") dated as of April 4, 2000, and effective as of April 5, 2000.
Item 2 Acquisition of Assets
On January 28, 2000, Storm entered into a Stock Purchase Agreement
("Stock Purchase Agreement") with North Coast, whereby, effective
March 31, 2000, North Coast became the holder of 7,115,593 shares, of
the 8,521,599 shares of common stock of Storm issued and outstanding
at the time of the transaction. The Stock Purchase Agreement was
previously discussed in Storm's Form 8-K filed on April 3, 2000.
The Stock Purchase Agreement called for North Coast to be merged into
Storm under provisions of Florida Statutes, Annoted.
The merger of North Coast into Storm was consummated under the Share
Exchange Agreement effective April 5, 2000. Storm issued 25,000,000
shares of its restricted common stock to the eighteen (18)
shareholders of North Coast in exchange for all of the issued and
outstanding common stock of North Coast. Concurrently, the 7,115,593
shares of common stock of Storm held by North Coast which were issued
pursuant to the January 28, 2000 Stock Purchase Agreement, were
returned to Storm and cancelled.
Under the Share Exchange Agreement, Storm shall continue as the
surviving corporation and the separate corporate existence of North
Coast shall cease.
The business activities and the use of assets of North Coast including
cash, receivables and intangibles and the payment of North Coast's
$1,000,000 convertible debentures and North Coast's loans and accounts
payable will be that of Storm as the surviving corporation.
The organization, general history, business activity and plan of
operations of North Coast were disclosed previously in Strom's Form
8-K filed on April 3, 2000.
A copy of the Stock Purchase Agreement and the Share Exchange
Agreement are filed herewith as Exhibit 2.1 and Exhibit 2.2
respectively and incorporated herein by reference.
Storm intends to hold a special meeting of shareholders to consider
and vote upon the following matters:
a) The redomiciling of Storm's state of incorporation form Florida
to Nevada.
b) The adaption of restated By-Laws and an Amendment of the Articles
of Incorporation approving a change of name to North Coast
Productions Inc.
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c) The adoption of an Amendment to the Articles of Incorporation
increasing the authorized capital stock to 200,000,000 shares of
$0.001 par value voting common stock and 50,000,000 shares of
$0.001 par value preferred stock.
d) Other corporate matters to be set forth in a Notice of Special
Meeting of Stockholders to be sent to the Company's stockholders.
Until the name change is approved by the stockholders, Storm will
carry on its business as The Storm High Performance Sound Corporation
dba North Coast Productions, Inc.
Item 7 Financial Statements, Pro Forma Financial Information and Exhibits.
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(1) Financial Statements of Business Acquired. The audited financial
statements of North Coast required by this item 7(a) are not yet
available. Storm expects that the audited financial statements of
Storm will be completed and filed by amendment to this Form 8-K
under cover of Form 8-K/A within 60 days after the date of this
Form 8-K.
(2) Pro Forma Financial Information. The Pro Forma Financial
Information of Storm and North Coast required by this Item 7(b)
are not yet available. Storm expects that the pro forma financial
statements will be completed and filed by Amendment to this 8-K
under cover of Form 8-K/A within 60 days after the date of this
Form 8-K.
(3) Exhibit 2.1 Stock Purchase Agreement dated as of January 28, 2000
by and between The Storm High Performance Sound Corporation and
North Coast Productions Inc.
(4) Exhibit 2.2 Share Exchange Agreement and Plan of Merger dated as
of April 4, 2000 by and between The Storm High Performance Sound
Corporation and North Coast Productions Inc.
The Exhibits to the Stock Purchase Agreement and to the Share Exchange Agreement
and Plan of Merger as listed in the index of Exhibits to each agreement are
omitted pursuant to Rule 601(b)(2) of Regulation S-B. The Company agrees to
furnish such documents supplementally to the Securities and Exchange Commission
upon request.
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EXHIBIT INDEX
Exhibit Description
2.1 Stock Purchase Agreement dated as of January 28, 2000 by and between The
Storm High Performance Sound Corporation and North Coast Productions Inc.
2.2 Share Exchange Agreement and Plan of Merger dated as of April 4, 2000, by
and between The Storm High Performance Sound Corporation and North Coast
Productions Inc.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Dated April 19, 2000 The Storm High Performance Sound Corporation
By: /s/ Patrick F. Charles
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Patrick F. Charles
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Exhibit 2.1
North Coast Productions, Inc.,
The Storm High Performance Sound Corporation
Stock Purchase Agreement
This Agreement and Plan of Merger, dated January 28, 2000 is entered
into by and between The Storm High Performance Sound Corporation (hereinafter
referred to as "Storm" or "the Company"), and North Coast Productions, Inc.
(hereinafter referred to as North Coast or the "Buyer").
1. Storm is duly organized and existing as a corporation under the laws of
the State of Florida, having an authorized capital stock of 50,000,000 shares,
par value $.001, of which 8,521,599 shares of common stock are issued and
outstanding.
2. North Coast is a corporation duly organized and existing under the laws
of the State of Washington having an authorized capital stock consisting of
100,000,000 shares of common stock, par value $.001, of which 5,000,000 shares
are issued and outstanding.
3. The board of directors of each of Storm and North Coast (collectively
the "Constituent Corporations") deem it advisable, for the general welfare and
advantage of the constituent corporations and their respective shareholders that
Storm issue 7,115,593 shares of Common Stock to North Coast in exchange for a
cash infusion of three hundred thousand dollars ($300,000), that as a result of
the transaction covered by this Agreement, Storm will become a subsidiary of
North Coast and North Coast will have full control of Storm, and that subsequent
to Storm becoming a subsidiary of North Coast, North Coast will merge North
Coast into Storm with Storm being the surviving corporation and North Coast
ceasing to exist (the "Merger").
4. The Buyer warrants on or before March 31, 2000, it will duly combine the
Constituent Corporations in accordance with the provisions of the Florida
Statutes Annotated. The Buyer warrants that by March 31, 2000, it will duly file
Articles of Merger with the Secretary of the State of the State of Florida to
effect the Merger. Said filing shall be the sole responsibility of the Buyer.
Amended and Restated Articles of Incorporation
5. The Buyer warrants that on or before March 31, 2000, as part of the
Merger, the Amended and Restated Articles of Incorporation of the Surviving
Corporation shall be amended to read as follows: (the term "Corporation" as used
in this article referring to the "Surviving Corporation"):
(a) First: The name of the Corporation is North Coast Productions,
Inc.
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(b) Second: The principal office of the Corporation is located at 8756
122nd Avenue, NE Kirkland, Washington 98033.
(c) Third: The Corporation is formed for the purpose of making of
movies in the entertainment industry, consultation and operation and for
doing all things of every kind incident to the business, including but not
limited to:
(d) Engaging in any lawful activity and to manufacture, purchase or
otherwise acquire, invest in, own mortgages, pledge, sell, assign and
transfer or otherwise dispose of, trade, deal in and deal with goods, wares
and merchandise and personal property of every class and description;
(e) Holding, purchasing and conveying real and personal property and
to mortgage or lease any such real and personal property with its
franchises and to take the same devise or bequest;
(f) Acquiring, and paying for in cash, stocks, bonds or any other
security of this Company, the good will, rights assets and property and to
undertake or assume the whole or any part of the obligations or liabilities
for any person, firm, association or corporation;
(g) Acquiring, holding, using, selling, leasing, granting licenses in
respect of, mortgage or otherwise, disposing of letters of patents of the
United States or any foreign country, patent rights, licenses and
privileges, inventions, improvement and processes, copyright, trademarks
and trade names relating useful in connection with any business in this
Corporation;
(h) Borrowing money and contracting debts when necessary for the
transaction of its business, or for the exercise of its corporate rights,
privileges or franchises, or for any other lawful purpose of its
incorporation; issuing bonds, promissory notes, bills of exchange,
debentures and other obligations and evidence of indebtedness, payable at
specified time or times or payable upon the happening of a specified event
or events, whether secured by mortgage, pledge or otherwise, or unsecured
for money borrowed, or in payment for property purchased, or acquired, or
for any other lawful objects;
(i) Doing all and everything necessary and proper for the
accomplishment of the objects enumerated in this plan or necessary or
incidental to the protection and benefit of the Corporation and, in
general, carrying on any lawful business necessary or incidental to the
attainment of the objects of the Corporation, whether or not such business
is similar in nature to the objects herein set forth above.
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(j) Fourth: Section 1. The maximum number of shares which the
Corporation is authorized to have outstanding is 100,000,000 shares, which
shall be classified as common stock.
Authorization and Sale of the Shares
6.1 Authorization. Storm is authorized to issue pursuant to the terms and
conditions hereof of up to 7,115,593 (seven million one hundred fifteen thousand
five hundred ninety-three) shares of Storm's Common Stock.
6.2 Sale. Subject to the terms and conditions hereof, Storm will issue to
the Buyer and the Buyer will purchase from Storm shares of Common Stock (the
"Securities") at a purchase price of three hundred thousand dollars ($300,000)
(the "Purchase Price") . Of the $300,000 Purchase Price, the initial fifty
thousand dollars ($50,000) shall be placed in an escrow account (the "Escrow
Account") as set forth in the Escrow Agreement attached hereto as Exhibit A. The
title on the Escrow Account is as follows:
SHPE/NCPI
The parties hereto acknowledge that the Buyer has tendered to the Escrow Agent,
the Law Firm of Larson-Jackson, P.C., an initial payment in connection with this
Share Purchase a check made payable to SHPE/NCPI in the amount of Ten Thousand
Dollars ($10,000.00). Said funds were immediately and without delay deposited in
the Escrow Account created specifically for this transaction and were paid for
the purposes set forth in paragraph. This ten thousand dollar payment is a
partial payment of the $50,000 to be deposited in the Escrow Account. The
pertinent banking coordinates and other information for the Escrow Account are
as follows:
Name of Bank: The Adams National Bank
Address: 1627 K Street NW
Washington, D.C. 20006
Telephone No.: (202) 466-4090
Fax No.: (202) 833-8875
Bank Contact: Catherine Upshur Purnell
Vice President/ Branch Manager
Account Title: SHPE/NCPI Escrow Account
Account No.: 40841705
ABA No.: 054001314
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7. Payment to Storm by Buyer. By February 4, 2000, the Buyer shall tender
to the Escrow Agent a non-refundable deposit of fifty thousand dollars ($50,000)
(the "Non-Refundable Deposit"). The Buyer may request an extension of time to
make the Non-Refundable Deposit but the right to grant the extension shall be
the sole right of Storm and Storm may set the new payment date for the
Non-Refundable Deposit. If the Buyer fails to tender the Non-Refundable Deposit
and Storm declines to grant an extension, the Buyer shall be in breach of this
Agreement. By February 4, 2000, the Buyer shall open an account with the Adams
National Bank ("Adams Bank") at 1627 K Street, NW, Washington, D.C. 20006 for
the purpose of depositing the Buyer's payments which shall total $250,000
exclusive of the $50,000 to be deposited in the Escrow Account. The Buyer shall
provide instructions to Adams Bank authorizing Adams Bank to respond to balance
verification requests of the Escrow Agent. On or before March 31, 2000, the
Buyer shall deposit or cause to be deposited in the Deposit Account at Adams
Bank, $250,000 as payment to Storm. If by March 31, 2000, the Buyer has not
successfully deposited or caused to be deposited a minimum of seventy-five
percent (75%), or two hundred thirty-two thousand five hundred dollars,
($232,500.00) under the aforementioned Deposit Escrow Agreement, such failure
shall constitute a material breach of this Agreement. As a result of such
material breach and as liquidated damages, Storm is entitled to keep the
Non-Refundable deposit of fifty thousand dollars ($50,000.00) deposited in the
Escrow Account. In the event the Buyer so breaches this Agreement and forfeits
$50,000 as liquidated damages, the remaining balance paid by the Buyer shall be
returned to the Buyer without delay.
8. In the event the Buyer has, in fact, deposited or caused to be deposited
a minimum of two hundred thirty-two thousand five hundred dollars ($232,500.00),
the Buyer may request an extension to pay the balance of the Purchase Price, but
Storm shall have the sole right in its discretion to grant the extension to a
date Storm deems appropriate.
9. Closing Date; Delivery and Effective Date
(a) The closing of the purchase and sale of the Securities to the
Buyer shall occur contemporaneously at Adams National Bank in Washington,
D.C. The official closing date ("Closing Date") of this Agreement shall be
March 31, 2000, unless extended by Storm in accordance with Section 8 of
this Agreement.
(b) Delivery. At the Closing, Storm shall cause to be delivered, via
overnight delivery, to the Buyer the Securities to be purchased by the
Buyer from Storm, in accordance with the terms of the Escrow Agreement.
Namely, the Buyer shall deposit in the aggregate three hundred thousand
dollars ($300,000.00) at Adams National Bank in Washington, D.C. for the
purpose of performing this Agreement. The Escrow Account titled SHPE/NCPI
shall have the sum of fifty thousand dollars ($50,000.00). Mr. Patrick
Charles ("Mr. Charles"), a principal of the Buyer, will open a separate and
subsequent deposit account (the "Deposit Account") to receive the balance
of two hundred and fifty thousand dollars ($250,000). The
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Deposit Account shall remain under the full and complete control of Mr.
Charles. However, Mr. Charles will instruct Adams National Bank, in
writing, with a copy to the Escrow Agent, to allow the Escrow Agent access
to information about the money deposited into the Deposit Account. Once
$250,000 have been deposited into the Deposit Account and $50,000 have been
deposited into the Escrow Account such that the Buyer has deposited an
aggregate of $300,000, Storm will transfer or cause the Securities to be
transferred to the Buyer. The Buyer and Storm agree that the funds held in
the Escrow Account referred to herein shall be disbursed in accordance with
the Escrow Agreement executed by the parties. The Escrow Agreement shall be
effective contemporaneously with this Agreement and is annexed as part of
this Agreement as Exhibit "A". On or prior to closing, Mr. Charles,
representing the Buyer, and Steve Larson-Jackson on behalf of the Escrow
Agent, shall jointly appear at Adams Bank and jointly issue and verify
payment to the list of creditors as set forth in the schedule of payments
attached hereto as Exhibit B.
(c) Effective Date: The Effective Date of this Agreement shall be
January 28, 2000.
(d) Post Delivery of Stock Certificates. The post delivery allocation
of the securities of Storm shall be as follows:
SHAREHOLDERS AMOUNT PERCENTAGE
NCPI Sharehodlers 7,115,593 83.50
Pre-Combination Storm Shareholders* 1,198,999 14
Mr. Robert Hannaberry 103,504 1.25
Mr. Leonard Zacharoff 103,503 1.25
Total Issued and Outstanding 8,521,599 100
*Exclusive of Messrs. Hannaberry and Zacharoff.
10.0 Contemporaneously with Storm's delivery of the Shares to the Buyer
pursuant to paragraph 9(b) of this Agreement, Messrs. Robert Hannaberry and
Leonard Zacharoff, the majority shareholders of Storm collectively owning
7,237,384 shares of Storm Common Stock, shall tender 7,030,377 shares back to
Storm and Storm shall retire such shares. In exchange for such shares, Storm
shall convey to Messrs. Hannaberry and Zacharoff all of Storm's assets that
Storm owns as of January 28, 2000, but not including assets acquired by Storm
after January 28, 2000. The parties hereto acknowledge that Storm presently has
no operations and that Storm's remaining shareholders will benefit from the
contemplated Merger in that an operating company will be merged into Storm.
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10.1 The parties hereto acknowledge that Messrs. Hannaberry and Zacharoff
have personally sold an amount of shares equal to one percent (1%) of the total
shares outstanding of Storm to the Buyer in the open market pursuant to Rule 144
in the amount of $10,652. The $300,000 Purchase Price for Storm's shares under
this Agreement is exclusive of the shares personally sold by Messrs. Hannaberry
and Zacharoff and the amount received for such personal sale shall not be
included in any amounts upon which any other calculations are made in this
Agreement or any other agreement.
10.2 After consummation of this Agreement, the remaining shares held by
Messrs. Hannaberry and Zacharoff shall be subject to a lock-up agreement
effective contemporaneously with Storm's issuance of the Securities. Messrs.
Hannaberry and Zacharoff shall be prohibited from selling such shares (the
"Lock-up Shares") into the securities markets during the period beginning on
January 7, 2000, and ending July 7, 2000. The shares personally sold by Messrs.
Hannaberry and Zacharoff as set forth in P. 10.1 are not included in the Lock-up
Shares. Beginning on July 8, 2000 Messrs. Hannaberry and Zacharoff are each
permitted to sell a maximum of twenty-five percent ( 25%) of their respective
stock on a monthly basis. However, in the event either Mr. Hannaberry or Mr.
Zacharoff does not sell his respect 25% allotment in any particular month, he
will be permitted to add the unsold portion to the amount he can sell in the
following month. The Buyer shall have the first right of refusal to acquire
shares so offered for sale by Messrs. Hannaberry and Zacharoff at the Common
Stock's closing price on the date immediately prior to Mr. Hannaberry's or Mr.
Zacharoff's offer to sell their respective shares. Should the Buyer exercise its
first right of refusal, it will have five (5) business days to close on a
purchase of the stock.
10.3 Upon the Buyer's tender of $50,000 to the Escrow Agent, Messrs. Robert
Hannaberry and Leonard Zacharoff, being the only officers and directors of
Storm, shall tender their resignations as officers and directors. In their
capacity as majority shareholders, Messrs. Robert Hannaberry and Leonard
Zacharoff shall appoint by consent Messrs. Patrick Charles and Terrence K.
Picken to serve as directors of Storm for a special term to end on Mach 31,
2000. In their capacity as directors, Messrs. Charles and Picken shall appoint
themselves as the sole officers of Storm. In their capacity as directors,
Messrs. Charles and Picken shall only be empowered to take those steps necessary
to duly effect a lawful offering of Storm's securities solely in the State of
Washington, and shall not take any other action on behalf of Storm without
majority shareholder approval. Messrs. Charles and Picken shall not disburse any
proceeds from such offering except to the extent necessary to tender payment for
the shares being sold under this Agreement should some of the proceeds from such
offering be used in such manner. The parties hereto acknowledge that the
offering is anticipated to be the source of payment for the Purchase Price
though it need not be the exclusive source for such payment. Otherwise, the
proceeds shall not be disbursed for any reason until after the Buyers have paid
the full Purchase Price as set forth herein. Any such offering of Storm's
securities shall be limited to an amount of securities such that Messrs.
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Hannaberry and Zacharoff shall retain a majority of the voting power of all the
shares in Storm. Should said offering be unsuccessful in raising an amount
sufficient to pay the Purchase Price set forth herein, any funds raised pursuant
to said offering shall remain the property of Storm and upon the termination of
Messrs. Charles and Picken's terms as directors on March 31, 2000, Messr.
Hannaberry and Zacharoff may reelect themselves as directors, or any other
persons to serve as directors as Messrs. Hannaberry and Zacharoff deem in the
best interest of Storm. Any violation of this provision by Messrs. Charles or
Picken shall be considered a material breach of this Agreement and shall result
in the termination of this Agreement with any money paid to the Escrow Agent
being forfeited by the Buyer as liquidated damages. The resignations and
resolutions to appoint Messrs. Charles and Picken as directors shall be in a
form as set forth in Exhibits D, E and F attached hereto.
Representations and Warranties of Storm and Buyer
11. Storm hereby represents and warrants to the Buyer as follows:
11.1 Organization and Standing; Articles and Bylaws. Storm is a corporation
duly organized and existing under, and by virtue of, the laws of the State of
Florida and is in good standing under such laws. Storm has the requisite
corporate power to own and operate its properties and assets, and to carry on
its business. Storm is qualified, licensed or domesticated as a foreign
corporation in all jurisdictions where the nature of its activities or of its
properties owned or leased makes such qualification, licensing or domestication
necessary at this time. Storm has furnished or shall cause to be furnished to
the Buyer copies of its Articles of Incorporation and Bylaws. Said copies are
true, correct and complete and contain all amendments through the date of this
Agreement.
11.2 Corporate Power. Storm has now, or will have at the Closing Date, all
requisite legal and corporate power to enter into this Agreement, to sell the
securities hereunder, and to carry out and perform its obligations under the
terms of this Agreement.
11.3 Subsidiaries. Storm has no subsidiaries. Storm does not own, directly
or indirectly, shares of stock or other interests in any other corporation,
association, joint venture, or business organization.
11.4 Capitalization. The authorized capital stock of Storm is 50,000,000
shares of Common Stock. 8,521,599 shares of Common Stock are issued and
outstanding. The issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and were issued
in compliance with applicable state and federal laws concerning the issuance of
securities. There are no outstanding rights, warrants, conversion rights, or
agreements for the purchase or acquisition from Storm of any shares of its
capital stock, except (i) options for 30,000 shares of Common Stock at an
exercise price of $.10, and 10,000 shares of Common Stock at an exercise price
of $1.00. Such options have been granted to Storm's market maker, Equitrade
Securities Corporation. Said options have existed for more than one (1) year
prior the instant Agreement.
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12.0 Authorization of Storm
(a) All corporate action on the part of Storm, its officers,
directors, and stockholders are authorized in connection with the sale and
issuance of the securities pursuant hereto and the performance of Storm's
obligations hereunder including the consent of a majority of the
outstanding shares. Director and President, Mr. Robert Hannaberry, and
Director and Vice-President, Mr. Leonard Zacharoff, control and own more
than 80% of the issued and outstanding securities of Storm and hereby
consent to this Agreement as evidenced by their signatures hereto. This
Agreement is a legal, valid and binding obligation of Storm, enforceable
against Storm in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting enforcement of creditors' rights, and except
as limited by application of legal principles affecting the availability of
equitable remedies.
(b) The Securities, when issued in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable, and
will be free of any liens or encumbrances; provided, however, that such
shares may be subject to restrictions on transfer under state and/or
federal securities laws as set forth herein, and as may be required by
future changes in such laws. In fact, no securities of Storm have been
registered with the Commission.
(c) No shareholder of Storm has any right of first refusal or any
preemptive rights in connection with the issuance of the Securities or of
the Common Stock by Storm.
13. Financial Statements. (Storm's audited balance sheet and statement of
income and expenses for the fiscal year ended December 31, 1999, are hereinafter
collectively referred to as the "Financial Statements.") The Buyer has been
supplied interim, unaudited financial statements. The Buyer intends to secure
the services of an independent auditing firm to generate audited financial
statements for Storm. At the conclusion of said audit, the financial statements
will fairly present the financial condition of Storm and the results of the
operations, if any, of Storm as of the date. Storm warrants that it has no
liabilities other than those set forth in the schedule attached hereto as part
of this Agreement as Exhibit C.
14. Material Contracts and Commitments. All the material contracts,
commitments, agreements, and instruments to which Storm is a party are legal,
valid, binding, and in full force and effect in all material respects and
enforceable by Storm in accordance with their terms except as limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws of general
application affecting enforcement of creditors' rights, and except as limited by
application of legal principles affecting the availability of equitable
remedies. Storm hereby discloses that is has not generated more than nominal
revenue in the most recent fiscal year.
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15. Compliance with Other Instruments. Storm is not in violation of any
term of its respective Articles of Incorporation or Bylaws, or in any material
respect of any contract, agreement, instrument, or, to the best knowledge of
Storm, any judgement, decree, order, statute, rule, or regulation applicable to
it. The execution, delivery, and performance of this Agreement by Storm and the
Buyer, and the issuance and sale of the Securities pursuant hereto, will not
result in any such violation or be in conflict with or constitute a default
under any such term, or cause the acceleration of maturity of any loan or
material obligation to which Storm is a party.
16. Litigation. There are no actions or proceedings against Storm which
might result in any adverse change in the prospects, conditions, affairs, or
operations if any of Storm or in any of its properties or assets, or in any
impairment of the right or ability of Storm to carry on its business as proposed
to be conducted.
17. Offering. The offer, sale and issuance of the Securities in conformity
with the terms of this Agreement will not violate the Securities Act.
18. Insurance. Storm does not currently have in force liability insurance
with insurer.
19. Taxes. Storm has timely filed tax returns that are required to have
been filed by them prior to the date of this Agreement with appropriate taxation
authorities.
20. Disclosure. This Agreement, the Financial Statements, and all
certificates delivered to the Buyer pursuant to this Agreement, when read
together, do not contain any untrue statement of a material fact and do not omit
to state a material fact necessary in order to make the statements contained
therein or herein not misleading. There is, to the best of Storm's knowledge, no
fact which materially adversely affects the prospects, condition, affairs or
operations of Storm or any of its properties or assets which has not been set
forth in this Agreement.
21. Representations and Warranties by Buyer. The Buyer represents and
warrants to Storm as follows:
(a) The Buyer is experienced in evaluating and investing in companies
such as Storm and has had the opportunity to discuss Storm's business,
management and financial affairs with its Chief Executive Officer, Mr.
Robert Hannaberry. The Buyer further warrants that it has received or shall
request at some future date prior to closing any and all information it
requires prior to the closing.
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(b) The securities are being acquired for the account of the Buyer,
for investment and not with a view to, or for resale in connection with,
any distribution or public offering thereof within the meaning of the
Securities Act. To the extent a distribution or public offering occurs, it
shall be conducted in accordance with the applicable federal securities
laws.
(c) The Buyer understands that Storm's shares have not been registered
with the U.S. Securities and Exchange Commission (the "SEC") pursuant to
Section 12 of the Securities Act of 1934, as amended, nor has Storm
registered any transactions pursuant to the Securities Act of 1933, as
amended. The Buyer further represents that as part of its performance
pursuant to the terms of this Agreement, the Buyer shall have the sole and
complete responsibility and shall use its best efforts to arrange for
filing the appropriate registration statement in connection with Storm to
have Storm's shares registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended. (such registration statement and other
documents filed with the SEC are referred to herein as the "SEC Filings").
Said registration shall be completed and filed with the SEC prior to April
1, 2000. The Buyer and Storm acknowledge Storm will be delisted or be
relegated to trading in the "pink sheets" upon the failure to timely and
successfully complete the registration process. All parties hereto agree
that failure to timely register Storm shall constitute a material breach of
this Agreement.
Any failure to timely and successfully complete the registration process
due to delays beyond the control of the Buyer, such as a failure of the auditors
to perform on a timely basis shall not constitute a material breach of this
Agreement by the Buyer.
(d) Notwithstanding that Storm has been publicly traded for more than
two years, the Buyer understands that only limited and nominal trading has
occurred in Storm's stock pursuant to its current listing on the Over the
Counter Bulletin Board ("OTCBB").
(e) The Buyer has the full right, power and authority to enter into
and perform this Agreement, and this Agreement constitutes a legal, valid
and binding obligation upon the Buyer, its successors, and assigns except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting enforcement of creditors'
rights, and except as limited by application of legal principles affecting
the availability of equitable remedies.
(f) The Buyer hereby acknowledges that it shall be responsible for its
own costs and expenses, including attorney's and auditor's fees, in
connection with the subject business combination. Buyer and Storm
acknowledge that each has or has had the opportunity to have its own legal
representation by its own securities counsel. Each party understands and
agrees it is responsible for payment of legal fees of its respective
counsel.
22. Legends. Each instrument or certificate representing the Securities may
be presented with the following legend:
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<PAGE>
The securities evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred, assigned or hypothecated unless there is an effective
registration statement under such Act covering such securities, the
sale is made in accordance with Rule 144 under the Act, or the company
receives an opinion of counsel for the holder of these securities
reasonably satisfactory to the company stating that such sale,
transfer, assignment or hypothecation is exempt from the registration
and prospectus delivery requirements of such Act.
Conditions to Closing
23. Conditions to Storm's Obligations. Storm shall stand ready to sell the
Securities to the Buyer.
24. Conditions to Obligations of Storm. Storm's obligation to sell and
transfer the Securities to the Buyer at the Closing is subject to the
fulfillment of Storm's satisfaction on or prior to the Closing Date of the
following conditions, any of which may be waived by the Buyer in writing signed
by an authorized officer:
(a) The above representations and warranties made by Storm shall be
true and correct when made, and shall be true and correct on the Closing
Date with the same force and effect as if they had been made on and as of
said date.
(b) Storm shall not make any public disclosure regarding this
Agreement unless required to do so under the applicable securities laws.
The parties hereby acknowledge Storm shall issue a press release upon
execution of the instant agreement.
(c) Storm shall cooperate with the auditors and provide all requested
information in a prompt and reasonable manner.
(d) Storm must cease and terminate any and all discussions with other
prospective acquirer or merger partners upon execution of this Agreement.
(e) Storm shall instruct and direct its agents, affiliates and others
to cooperate in the preparation of, and to timely file or provide
information to governmental authorities, self regulatory bodies or other
third parties to effectuate the subject business combination pursuant to
the terms of this agreement.
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<PAGE>
25. Waivers and Amendments. With the consent of the Buyer and of the record
or beneficial holders of more than 80 percent of the securities to be purchased,
the obligations of Storm's and the Buyer's rights under this Agreement may be
waived (either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely), and
with the same consent of Messrs. Hannaberry and Zacharoff, may enter into a
supplementary agreement with the Buyer to change in any manner or eliminating
any of the provisions of this Agreement; provided, however, that no such waiver
or supplemental agreement shall reduce the aforesaid percentage of Securities to
be acquired in this transaction. This Agreement or any provision hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.
26. Conditions to Buyer's Obligations. The Buyer's obligations to purchase
the securities at the Closing is subject to the fulfillment of the Agreement to
Messr's Hannaberry and Zacharoff's reasonable satisfaction on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties Correct; Performance of
Obligations. The representations and warranties made by the Buyer shall be
true and correct when made, and shall be true and correct on the Closing
Date with the same force and effect as if they have been made on and as of
said date; Storm shall not have been adversely affected in any way prior to
Closing the transaction unless Storm becomes a reporting issuer prior to
the Closing; Storm shall have performed all obligations and conditions
herein or any other related agreement required to be performed or observed
by it on or prior to the Closing date.
(b) Legitimate Investment. At the time of the Closing, the Buyer of
the Securities hereunder shall be legally permitted by the laws and
regulations to which the Buyer and Storm are subject.
(c) Due Diligence and Confidentiality. The Buyer shall provide
sufficient documents and other information upon the demand of Messrs.
Hannaberry and Zacharoff in order that the Messrs. Hannaberry and Zacharoff
can conduct their due diligence review with respect to the Buyer. In the
course of the parties' due diligence investigations, discussions and
negotiations, each party may disclose to the other certain proprietary,
confidential or other non-public information relating to its respective
business, the proprietary, confidential and non-public nature of which
information both parties desire to maintain. Except as set forth herein, no
party shall reveal or make known to any person, firm corporation or entity
or utilize in its own business or make any other usage of any information
disclosed to it by the other in connection with the discussions and
negotiations in connection with the subject transaction. The obligation to
limit disclosure shall cease if the information becomes part of the public
domain or the party has independently developed the information without the
use of any information provided by the other party. In the event the
business combination does
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<PAGE>
not occur and the transaction is not completed, the parties agree to return
all documents, including original and all copies in their possession, which
were obtained in connection with this Agreement and to maintain the
confidentiality of any information obtained hereunder for a period not to
exceed two (2) years.
Due Diligence Review
____________________
Storm shall permit the Buyer's employees, agents, accountants, legal
counsel and other representatives to have access to Storm's books, records,
employees, counsel, accountants, engineers and other representatives at all
reasonable times for the purpose of conducting its due diligence investigation.
Storm will make available to the Buyer for examination and reproduction all
documents and data of every kind and character relating to this Agreement and
the transactions contemplated hereby, in possession or control of, or subject to
reasonable access by either party. All such due diligence investigations shall
be completed and the Buyer shall notify Storm in writing of the satisfaction or
removal of this due diligence review condition by no later than March 6, 2000.
Upon mutual agreement of the parties, additional time may be allowed to complete
such due diligence investigation. Should the Buyer or Storm (in the context of
the due diligence investigation, either party is referred to as the "Reviewing
Party") become aware of any information during its due diligence investigation
which, in the opinion of the Reviewing Party, could have material adverse impact
on this Agreement and/or the transactions contemplated hereby, the Reviewing
Party shall immediately notify the company whom the Reviewing Party investigated
(the "Receiving Party") in writing of such information and the concerns which
such information has caused. The Receiving Party shall have a reasonable time to
respond to those concerns. In the event that the concerns cannot be resolved to
the satisfaction of the Reviewing Party, the Reviewing Party shall have the
right to terminate this Agreement without further liability hereunder. Each
party shall bear the costs and expenses of the respective due diligence
investigation hereunder, including the fees and expenses of professional
advisors.
(d) Payment of Third Parties. The Buyer will certify or represent to
Storm that the Buyer has paid any all third parties in connection with
subject transaction, including but not limited to the accountants, in full
prior to or on the Closing Date.
(e) The Buyer hereby acknowledges that it shall be responsible for its
own costs and expenses, including attorney's and auditor's fees, in
connection with the subject business combination.
(f) The Buyer and Storm shall observe the spirit and intent of this
Agreement and other related agreement in connection with the sale of the
Control Block of Common Stock of Storm High Performance Sound Corporation.
27. Governing Law. This Agreement shall be governed in all respects by the
laws of the District of Columbia.
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<PAGE>
28. Survival. The representations, warranties, covenants, and agreements
made herein shall survive the Closing of the transactions contemplated hereby.
29. Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
30. Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties hereto with regard to the subjects hereof and thereof.
31. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first class mail, postage
prepaid, addressed (a) if to the Buyer, at such the Buyer's address set forth
below or at such other address as the Buyer shall have furnished to Storm in
writing, or (b) if to Storm at its address set forth below, or at such other
address as Storm shall have furnished to the Buyer.
<TABLE>
To Buyer: To Storm: To Escrow Agent:
- --------- --------- ----------------
<S> <C> <C>
Mr. Patrick Charles Mr. Robert Hannaberry Mr. Steve Larson-Jackson
North Coast Productions Storm High Performance Sound Law Firm of Larson-Jackson, P.C.
Inc. 8756 122nd Avenue NE Corporation 1275 K Street, N.W., Suite 1101
Kirkland, WA 98033 626 Highway 17 West Washington, D.C., 20005
(Tel) 425- 827-7817 Pembroke, Ontario K8A 7G9 (Tel.) (202) 408-8180
(Fax) 425-827-2216 (Tel.) 613- 735-7588 (Fax) (202) 789-2216
(Fax) 613-735-8228
</TABLE>
32. Separability. In case any provision of this Agreement, not material to
the benefits intended to be conferred hereby shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
33. Finder's Fees.
(a) Storm (i) represents and warrants that it has retained no finder
or broker in connection with the transactions contemplated by this
Agreement and (ii) hereby agrees to indemnify and to hold Buyer's officers,
directors and controlling persons harmless of and from any liability for
commission or compensation in the nature of a finder's fee to any broker or
other person or firm (and the costs and expenses of defending against such
liability or asserted liability) for which Storm, or any of its employees
or representatives, are responsible.
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<PAGE>
(b) The Buyer (i) represents and warrants that it has retained no
finder or broker in connection with the transactions contemplated by this
Agreement and (ii) hereby agree to indemnify and to hold Storm, and their
respective officers, directors and controlling persons, harmless of and
from any liability for any commission or compensation in the nature of a
finder's fee to any broker or other person or firm (and the costs and
expenses of defending against such liability or asserted liability) for
which Storm, or any of its employees or representatives, are responsible.
(c) The Buyer and Storm represent, warrant and covenant Sidney Golub
and Tuscan Capital Ltd. ("Tuscan Capital") have served as consultants to
Storm. As such, all parties agree he shall be paid for said services upon
consummation of the transaction. Payment to Mr. Golub or Tuscan Capital is
pursuant to a separate and independent agreement (Consulting Agreement) and
neither Mr. Golub nor Tuscan Capital shall receive compensation under this
Agreement except as set forth in the Consulting Agreement. The parties to
this Agreement shall in good faith execute such other and further
instruments, assignments or documents as may be necessary or advisable to
carry out the transactions contemplated by this Agreement.
34. Titles and Subtitles. The titles of the Sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. References herein to exhibits to this
Agreement shall be deemed to incorporate such exhibits by reference.
35. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument, and which shall become effective when there
exist copies signed by Storm's directors, Messrs. Hannaberry and Zacharoff, and
the Buyer. All parties hereto agree that facsimiles of signatures and documents
including counterpart signatures shall be acceptable as signed copies of this
Agreement.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized representatives effective as of last date this
agreement is signed by one of the two below parties.
Storm High Performance Sound Corp. North Coast Productions, Inc. (Buyer)
By: /s/ Robert Hannaberry By: /s/ Patrick F. Charles
_______________________ _______________________
Robert Hannaberry, Director Patrick Charles, President
North Coast Production, Inc.
8756 122nd Avenue, NE
Kirkland, Washington, WA 98033
By:/s/ Leonard Zacharoff Buyer
________________________ (425) 827-7817
Leonard Zacharoff, Director
Storm High Performance Sound Corp.
777 South Hagler Drive 8th Floor West Tower
West Palm Beach, Florida 33401 Dated:
(613) 735-7558
Dated:
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<PAGE>
AMENDMENT TO STOCK PURCHASE AGREEMENT
1. Whereas, the parties hereto, North Coast Productions, Incorporated and
The Storm High Performance Sound Corporation, entered into a stock purchase
agreement dated January 28, 2000 and a Deposit Escrow Agreement dated January
27, 2000.
2. Whereas, the parties hereto acknowledge the instant writing constitutes
the first and only written amendments to the Stock Purchase Agreement and
Deposit Escrow Agreement.
3. Whereas, the parties hereto acknowledge and agree the instant amendment
is limited only to the express terms of the instant amendment and all other
provisions of the agreements shall remain the same.
4. The parties hereto agree the Articles of Merger shall be filed with the
applicable governmental agencies following the closing and in no event shall ten
(10) business days expire without the filing of the articles of merger. North
Coast Productions has the responsibility for preparing and filing the Articles
of Merger.
5. The parties hereto agree the balance of the purchase price in the amount
of Two Hundred and Fifty Thousand Dollars ($250,000.00) shall be transferred via
electronic wire on March 30, 2000 to Adams National Bank to the existing Escrow
Deposit Account. The wiring instructions and banking coordinates shall remain
the same as set forth in the original stock purchase agreement.
6. From the escrow account, Mr. Robert Hannaberry and Mr. Larson-Jackson
shall pay the accounts payable for Storm in the amount not to exceed One Hundred
Forty-Nine Thousand, Nine Hundred and Fifty Six Dollars and Zero Cents
($149,956.00). Any and all accounts payable shall be paid in full on March 31,
2000.
7. With respect to Item 21(c) of the stock purchase agreement, the parties
hereto agree the registration statement shall be completed and filed with the
U.S. Securities and Exchange Commission prior to April 15, 2000.
8. The parties hereto agree the executed facsimile containing each of the
three below signatures shall have the same force and effect as the original.
Buyer For the Company
NORTH COAST PRODUCTIONS INC. THE STORM HIGH PERFORMANCE SOUND CORP.
/s/ Patrick F. Charles /s/ Robert Hannaberry
_______________________ _____________________
Patrick F. Charles, President Robert Hannaberry, President
FAX #310-458-7912
Escrow Agent
Law Firm of Larson-Jackson, P.C.
/s/ Steve Larson-Jackson
________________________
Steve Larson-Jackson
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<PAGE>
INDEX TO EXHIBITS
Exhibit B Schedule of Payments
Exhibit C Payables as of January 1, 2000
Exhibit D Resignation of Director
Exhibit E Resignation of Director
Exhibit F Resolution of Shareholders and Directors of Storm
and The High Performance Sound Corporation
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<PAGE>
EXHIBIT 2.2
SHARE EXCHANGE AGREEMENT AND PLAN OF MERGER
SHARE EXCHANGE AGREEMENT AND PLAN OF MERGER dated as of April 4, 2000
("Agreement"), between The Storm High Performance Sound Corporation , a Florida
Corporation ("Storm"), and North Coast Productions Inc., a State of Washington
Corporation hereinafter referred to as "North Coast".
BACKGROUND
Pursuant to a Stock Purchase Agreement dated January 28, 2000 entered
into by and between Storm and North Coast, Storm became, upon closing of the
Stock Purchase Agreement effective March 31, 2000, a subsidiary of North Coast
and North Coast agreed, subsequent to Storm becoming a subsidiary of North Coast
to merge North Coast into Storm with Storm being the surviving corporation and
North Coast ceasing to exist.
The respective Boards of Directors of Storm and North Coast have each
approved, upon the terms and subject to the conditions set forth in this
Agreement, the merger ("Merger") of North Coast with and into Storm whereby each
issued and outstanding share of common stock of North Coast not owned directly
or indirectly by North Coast will be converted into the common stock of Storm
("Common Stock") as set forth in Article I.
In consideration of the respective representations, warranties,
covenants and agreements contained in this Agreement, Storm and North Coast
hereby agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions hereof, and
in accordance with the relevant provisions of the Florida statutes annotated
("Florida Statute"), North Coast shall be merged with and into Storm subject to
the conditions set forth in Article VI. Following the Merger, Storm shall
continue as the surviving corporation ("Surviving Corporation") and shall
continue its existence under the laws of the State of Florida, and the separate
corporate existence of North Coast shall cease.
1.02 Effective Time. The Merger shall be consummated and shall become
effective at such time ("Effective Time") as the conditions set forth in Article
VI are satisfied or waived, if permissible.
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<PAGE>
1.03 Effects of the Merger. The Merger shall have the effects specified in
the Florida Statute. This Plan of Merger is intended to constitute "a plan of
reorganization" within the meaning of Section 354 of the Internal Revenue Code,
1986 as amended. Further for federal income tax purposes it is intended that the
merger shall qualify as a reorganization as defined in Section 368 (a) of the
Internal Revenue Code.
1.04 Directors and Officers of the Surviving Corporation. From and after
the Effective Time, the directors and officers of the Surviving Corporation
shall be the persons set forth on Exhibit 1.04 hereto, until their successors
shall have been duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and by laws.
1.05 Shares. At or prior to the Effective Time, by virtue of the Merger the
following events shall occur:
(a) Each share of common stock or preferred stock held by North Coast
as treasury stock shall be cancelled and retired and shall cease to exist,
and no payment or consideration shall be made with respect thereto;
(b) 7,115,593 shares of common stock of Storm owned by North Coast
shall be returned to Storm's treasury and Storm shall retire and cancel
such shares. (c) Storm shall arrange delivery of 25,000,000 common shares
to be issued from Storm's treasury which shall be issued to each of North
Coast's shareholders, as set forth on Exhibit 1.05(c) annexed hereto, in
the number of Common Stock shares set forth next to each name.
1.06 Private Placement.
(a) The Common Stock issued to North Coast's shareholders have not
been and will not be registered with the Securities and Exchange Commission
("SEC") or the securities commission of any state, including but not
limited to Florida and Washington state, pursuant to an exemption from
registration by virtue of Storm's intended compliance with the provisions
of Sections 4(2) and 4(6) of the Securities Act of 1933, as amended
("Securities Act"), and the Common Stock will be made available only to
"accredited investors" or Company shareholders who have used a "Purchaser
representative", as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act. Such exemption limits the number and types of
investors to which the offering of Common Stock may be made and restricts
subsequent transfers of the Common Stock so offered which also may be
restricted by state securities laws. The Common Stock may not be resold or
otherwise disposed of by North Coast's shareholders unless, in the opinion
of counsel to Storm, registration under federal and applicable state
securities laws is not required or compliance is made with the registration
requirements of such laws.
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<PAGE>
ARTICLE II
EXCHANGE OF SHARES
2.01 Issuance of Certificates. Promptly after the Effective Time, the
Surviving Corporation shall issue to each person set forth on Exhibit 1.05(c) a
certificate representing the Common Stock to be issued to each North Coast
shareholder and simultaneously each North Coast shareholder shall exchange and
surrender the certificate representing all of such North Coast shareholder's
shares in the Company. At the close of business on the day of the Effective
Time, the stock ledger of North Coast shall be closed.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
STORM
Storm represents and warrants to North Coast as of the date of this
Agreement and as of the Effective Time as follows:
3.01 Existence; Good Standing. Storm is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
3.02 Capitalization. The authorized capital stock of Storm consists of
50,000,000 shares of Common Stock, par value $0.0001 ("Shares") and no other
classes of stock, common or preferred, or other securities. As of March 31,
2000, there were 8,606,815 shares of Common Stock issued and outstanding. All
issued and outstanding shares of Common Stock are duly authorized, validly
issued, free of preemptive rights, and non-assessable. Storm is not a party to
or bound by any written or oral contract or agreement which grants to any person
an option, warrant or right of first refusal or other right of any character to
acquire at any time, or upon the happening of any stated events any shares of or
interest in Storm, whether or not presently authorized, issued or outstanding,
and (ii) there are outstanding (a) no shares of capital stock or other voting
securities of Storm, (b) no securities of Storm or any of its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of Storm, (c) no options or other rights to acquire from Storm or any
of its subsidiaries, and no obligation of Storm or any of its subsidiaries to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Storm, and (d) no equity
equivalents, interests in the ownership or earnings of Storm or any of its
subsidiaries or other similar rights. Upon issuance of the Common Stock to North
Coast's shareholders, such shares of Common Stock shall be duly authorized,
validly issued, fully paid, non-assessable, and free of preemptive rights.
3.03 Authorization: Validity and Effect of Agreements. Storm has the
requisite corporate power and authority to execute and deliver this Agreement.
The consummation by Storm of the transactions contemplated hereby has been duly
authorized by all requisite corporate action and the issuance of the Common
Stock to North Coast's shareholders is required to be approved by the Board of
Directors of Storm and such approval was obtained. This Agreement constitutes
the valid and legally binding obligation of Storm, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
3.04 No Violation. To the best of Storm's knowledge neither the execution
and delivery by Storm of this Agreement, nor the consummation by Storm of the
transactions contemplated hereby in accordance with the terms hereof, will: (i)
conflict with or result in a breach of any provisions of the Articles of
Incorporation or Bylaws of Storm (ii) violate, or conflict with, or result in a
breach of any provision of, or constitute a default (or an event
E-22
<PAGE>
which with notice or lapse of time or both, would constitute a default) under,
or result in the termination or in a right of termination or cancellation of, or
accelerate the performance required by, or result in the triggering of any
payment of compensation under, or result in the creation of any lien, security
interest, charge or encumbrance("Lien")upon any of the material properties of
Storm or its subsidiaries under, or result in being declared void, voidable, or
without further binding effect, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust or any material license,
franchise permit, lease, contract, agreement or other instrument, commitment or
obligation to which Storm or any of Storm's subsidiaries if a party, or by which
Storm or any of Storm's subsidiaries or any of their respective properties is
bound or affected, except for any of the foregoing matters which would not have
a material adverse effect on the business, results of operations financial
condition or prospects of Storm and its subsidiaries taken as a whole ("Storm
Material Adverse Effect"); or (iii) other than the filings required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1978 ("HSR Act"), the Securities
Exchange Act of 1934, ("Exchange Act"), the Securities Act or applicable state
securities and "Blue Sky" laws or filings in connection with the maintenance of
its qualification to do business in other jurisdictions, and the filings
contemplated by Section 5.02 of this Agreement (collectively, "Regulatory
Filings"), require any material consent, approval or authorization of, or
declaration, filings or registration with, any domestic governmental or
regulatory authority, the failure to obtain or make which would have a Storm
Material Adverse Effect.
3.05 Documents. Storm has delivered to North Coast the following reports
and/or statements:
Audited financial statements for the year ended December 31, 1999.
Issuer Information and Disclosure Statement Pursuant to Rule 15 c
2-11(a)(5)
Form 8-K with March 31, 2000 Date of Report
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF NORTH COAST
North Coast represents and warrants to Storm as of the date of this
Agreement and as of the Effective Time as follows:
4.01 Existence; Good Standing; Corporate Authority; Compliance with Law
North Coast is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The copies of
North Coast's Articles of Incorporation and by laws previously delivered to
Storm are true and correct and have not since been amended, modified or
rescinded.
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<PAGE>
4.02 Authorization, Validity and Effect of Agreements. North Coast has the
requisite corporate power and authority to execute and deliver this Agreement,
and has obtained the approval of the Merger by the shareholders of North Coast.
The consummation by North Coast of all transactions contemplated hereby has been
duly authorized by all requisite corporate action. This Agreement constitutes
the valid and legally binding obligation of North Coast, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
4.03 Capitalization. The authorized capital stock of North Coast consists
of 100,000,000 shares of common stock, par value $.001 per share, and no other
classes of stock, common or preferred, or other securities. There are 5,000,000
shares of common stock issued and outstanding as of April 4, 2000. All issued
and outstanding shares of common stock are duly authorized, validly issued,
fully paid, non-assessable and free of preemptive rights. North Coast is not a
party to or bound by any written or oral contract or agreement which grants to
any person an option, warrant or right of first refusal or other right of any
character to acquire at any time, or upon the happening of any stated events,
any shares of or interest in North Coast, whether or not presently authorized,
issued or outstanding. North Coast shares of capital stock or other voting
securities of North Coast, (ii) no securities of North Coast or any of its
subsidiaries convertible into or exchangeable for shares of capital stock or
voting securities of North Coast, (iii) no options or other rights to acquire
from North Coast or any of its subsidiaries, and no obligations of North Coast
or any of its subsidiaries to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of North Coast, and (iv) no equity equivalents, interest in the
ownership or earnings of North Coast or any of its subsidiaries or other similar
rights. There are no outstanding obligations of North Coast or any of its
subsidiaries to repurchase, redeem or otherwise acquire any securities of North
Coast.
4.04 No Violation. Neither the execution and delivery by North Coast of
this Agreement nor the consummation by North Coast of the transactions
contemplated hereby in accordance with the terms hereof will: (i) conflict with
or result in a breach of any provisions of the Articles of Incorporation or
Bylaws of North Coast or its subsidiaries, (ii) violate, or conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination or in a right of termination or cancellation of, or
accelerate the performance required by, or result in the triggering of any
payment or compensation under, or result in the creation of any Lien upon any of
the properties of North Coast or its subsidiaries under, or result in being
declared void, voidable, or without further binding effect, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust
or any material license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation of which North Coast or its subsidiaries is
a party, or by which North Coast or its subsidiaries or any of their respective
properties or assets is bound or affected, except for any of the foregoing
matters which, singularly or in the aggregate, would not have a North Coast
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<PAGE>
Material Adverse Effect; (iii) other than the Regulatory filings, require any
material consent, approval or authorization of, or declaration, filing or
registration with, any domestic governmental or regulatory authority, the
failure to obtain or make which would have a North Coast Material Adverse
Effect, as defined in Section 7.01(c) below, or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to North Coast, any
of its subsidiaries or any of their assets, except for violations which in the
aggregate would not have a North Coast Material Adverse Effect or materially
adversely affect the ability of North Coast to consummate the Merger.
ARTICLE V
COVENANTS
5.01 Conduct of Business. From and after the date of this Agreement until
the Merger is affected or this Agreement is terminated, unless Storm has
consented in writing thereto, North Coast, and, with respect to (e) and (f)
below, Storm and North Coast:
(a) Shall, and shall cause its subsidiaries to, conduct its operations
according to its usual, regular and ordinary course in substantially the
same manner as heretofore conducted;
(b) Shall use reasonable efforts, and shall cause its subsidiaries to
use reasonable efforts, to preserve intact its business organization and
goodwill, keep available the services of its officers and employees and
maintain satisfactory relationships with those persons having business
relationships with it;
(c) Shall confer on a regular basis with one or more representatives
of Storm to report operational matters of materiality and any proposals to
engage in material transactions;
(d) Shall not amend its Articles of Incorporation or By Laws;
(e) Shall promptly notify the other parties hereto of any material
emergency or other material change in the condition (financial or
otherwise), business, properties, assets, liabilities, prospects or the
normal course of its businesses or in the operation of its properties, any
material litigation or material governmental complaints, investigations or
hearings (or communications indicating that the same may be contemplated),
or the breach in any material respect of any representation or warranty
contained herein;
(f) Shall promptly deliver to the other parties hereto true and
correct copies of any report, statement or schedule filed with or delivered
to the SEC, any other
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Governmental entity (other than routine corporate tax and other filings in
the ordinary course of business) or any shareholder of North Coast or
Storm, as the case may be, subsequent to the date of this Agreement;
(g) Shall not (i) issue, sell or pledge, or agree to issue, sell or
pledge, any shares of its capital stock, effect any stock split or
otherwise change its capitalization as it existed on the date hereof, (ii)
grant, confer or award any option, warrant, conversion, right or other
right to acquire any shares of its capital stock or grant any right to
convert or exchange any securities of North Coast for Common Stock, (iii)
increase any compensation or enter into or amend any employment agreement
with any of its present or future officers or directors, other than in the
ordinary course of North Coast's business, (iv) adopt any new employee
benefit plan, other than in the ordinary course of North Coast's business
(including any stock option, stock benefit or stock purchase plan) or amend
any existing employee benefit plan in any material respect, other than in
the ordinary course of business, except, in each case, for changes which
are less favorable to participants in such plans or as may be required by
applicable law, or (v) amend any Officer Employment Agreement or increase
any compensation payable pursuant to such Officer Employment Agreements;
(h) Shall not (i) except in the normal course of business as
consistent with prior practice, declare, set aside or pay any dividend
(whether in cash, stock or property) or make any other distribution or
payment with respect to any shares of its capital stock or (ii) directly or
indirectly redeem, purchase or otherwise acquire any shares of its capital
stock or make any commitment for any such action;
(i) Shall not, and shall not permit its subsidiaries to (i) sell,
lease or otherwise dispose of any assets of North Coast or its subsidiaries
(including capital stock) which are of a material amount, individually or
in the aggregate, or (ii) make any acquisition, by means of merger or
otherwise, of any assets or securities which are of a material amount,
individually or in the aggregate; and
(j) Shall not, and shall not permit its subsidiaries to, agree in
writing to take or otherwise take (i) any of the foregoing actions or (ii)
any action which would make any representation or warranty of North Coast
herein untrue or incorrect.
5.02 Filings; Other Action. Subject to the terms and conditions herein
provided, North Coast and Storm shall: (i) promptly make their respective
filings and thereafter make any other required submissions under the HSR act
with respect to the Merger if required; (ii) use all reasonable efforts to
cooperate with one another in (a) determining which filings are required to be
made prior to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
governmental or regulatory authorities of the United States, the several states,
and other jurisdictions in connection with the execution and delivery of this
Agreement and the consummation of the
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transactions contemplated hereby and (b) timely making all such filings and
timely seeking all such consents, approvals, permits or authorizations; and
(iii) use best efforts to take, or cause to be taken, all other action and do,
or cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contemplated by this Agreement.
If, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purpose of this Agreement, the proper officers and
directors of Storm and North Coast shall use best efforts to take all such
necessary action.
5.03 Inspection of Records. From the date hereof to the Effective Time,
each of Storm and North Coast shall allow all designated officers, attorneys,
accountants and other representatives of Storm and North Coast, as the case may
be, access at all reasonable times to the records and files, correspondence,
audits and properties, as well as to all information relating to commitments,
contracts, titles and financial position, or otherwise pertaining to the
business and affairs of Storm, North Coast and their subsidiaries.
5.04 Indemnification.
(a) (i) After the Effective Time, the Surviving Corporation
shall, to the fullest extent permitted, indemnify, defend and hold
harmless the present and former directors and officers of Storm and
North Coast and any subsidiaries and their respective heirs,
executors, administrators and legal representatives (individually, an
"Indemnified Party" and, collectively, the "Indemnified Parties" )
against all losses, expenses, claims, damages or liabilities arising
out of actions or omissions occurring on or prior to the Effective
Time (including, without limitation, acts or omissions relating to the
transactions contemplated by this Agreement (collectively "Losses")).
In connection with the foregoing obligations from and after the
Effective Time, the Surviving Corporation, shall bear the cost of
expenses incurred in defending against any claim, action, suit,
proceeding or investigation arising out of any alleged acts or
omissions occurring on or prior to the Effective Time (including,
without limitation, acts or omissions relating to the transactions
contemplated by this Agreement), as incurred to the fullest extent
permitted under applicable law. All rights to indemnification,
including provisions relating to advances, expenses and exculpation of
director liability, existing in favor of the Indemnified Parties as
provided in Storm's or North Coast's Articles of Incorporation and
Bylaws, as in effect as of the date of this Agreement, with respect to
matters occurring through the Effective Time, will survive the
Effective Time and will continue in full force and effect.
(ii) Any Indemnified Party will promptly notify the Surviving
Corporation of any claim, action, suit, proceeding or investigation
for which such party may seek indemnification under this Section (a
"Third Party Claim"). In the event of any such Third Party Claim, (x)
within twenty (20) days of receipt of such notice, the Surviving
Corporation will have the right to assume the defense thereof, and the
Surviving Corporation
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will not be liable to such Indemnified Parties for any legal expenses
of other counsel or any other expenses subsequently incurred
thereafter by such Indemnified Parties in connection with the defense
thereof, except that all Indemnified Parties (as a group) will have
the right to retain one separate counsel, acceptable to such
Indemnified Parties, as the expense of the Indemnifying Party if the
named parties to any such proceeding include both the Indemnified
Party and the Surviving Corporation and the representation of such
parties by the same counsel would be inappropriate due to a conflict
of interest between them, and each Indemnified Party will have the
right to retain a separate counsel, acceptable to such Indemnified
Party, at the expense of the Indemnifying Party, if representation of
such Indemnified Party and the other Indemnified Parties as a group
would be inappropriate due to a conflict of interest between them and
(y) the Indemnified Parties will cooperate in the defense of any such
matter. If the Surviving Corporation fails to take action within
twenty (20) days as set forth in (x) above, then the Indemnified Party
shall have the right to pay, compromise or defend any Third Party
Claim and to assert the amount of any payment on the Third Party Claim
plus the expense of defense or settlement as a Loss. The Surviving
Corporation will not be liable for any settlement affected without its
prior written consent, unless it has failed to take action within the
twenty (20) day period after receipt of notice as set forth above.
Notwithstanding the foregoing, the Surviving Corporation will not have
any obligation under this Section 5.04 to indemnify an Indemnified
Party when and if a court of competent jurisdiction ultimately
determines and such determination becomes final, that the
indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
(b) The Surviving Corporation shall pay all reasonable expenses,
including reasonable attorneys' fees, that may be incurred by any
Indemnified Parties in enforcing the indemnity and other obligations
provided for in this Section 5.04.
(c) The rights of each Indemnified Party hereunder shall be in
addition to any other rights such Indemnified Party may have under the
Articles of Incorporation or by laws of Storm, under the Florida Statute or
otherwise. The provisions of this Section shall survive the consummation of
the Merger and expressly are intended to benefit each of the Indemnified
Parties and will be binding on all successors and assigns of the Surviving
Corporation.
5.05 Further Action. Each party hereto shall, subject to the fulfillment at
or before the Effective Time of each of the conditions of performance set forth
herein or the waiver thereof, perform such further acts and execute such
documents as may be reasonably required to effect the Merger.
5.06 Expenses. Whether or not the Merger is consummated, except as provided
in Section 7.02 hereof or as provided otherwise herein, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses.
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5.07 Consent of Storm's Shareholders. North Coast shall submit the Merger
to the shareholders of the Company for their consideration in accordance with
Chapter 23B.11 of the Washington State Business Corporation Act and other
provisions of applicable law, and obtain the consent of its shareholders. North
Coast shall notify Storm in writing that the consent of the shareholders has
been obtained, and shall set forth the names of any dissenting shareholders at
least one (1) day prior to the Effective Time.
5.08 Publicity. The initial press release relating to this Agreement shall
be a joint press release and thereafter North Coast and Storm shall, subject to
their respective legal obligations (including requirements of the Nasdaq
National Market, stock exchanges and other similar regulatory bodies), consult
with each other, and use reasonable efforts to agree upon the text of any press
release, before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any federal or state governmental or regulatory agency or with
Nasdaq National Market, or any national securities exchange with respect
thereto.
5.09 Best Efforts to Close. The parties hereto agree to use their best
efforts to close the transactions contemplated hereby by April 5, 2000.
ARTICLE VI
CONDITIONS TO CONSUMMATION
OF THE MERGER
6.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of the
following conditions:
(a) This Agreement shall have been approved by the affirmative vote of
the shareholders of North Coast by the requisite vote in accordance with
applicable law and by the Board of Directors of Storm;
(b) No statute, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent), shall have
been enacted, entered, promulgated or enforced by any court or governmental
authority which is in effect and has the effect of prohibiting the
consummation of the Merger; provided, however, that each of the parties
shall have used its best efforts to prevent the entry of any injunction or
other order and to appeal as promptly as possible any injunction or other
order that may be entered;
(c) The waiting period (and any extension thereof ) applicable to the
consummation of the Merger under the HSR Act if required shall have expired
or been terminated;
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(d) Each of the consents listed on Schedule 6.01(d) hereto shall have
been obtained.
(e) North Coast has, or on or before the Effective Time of this
Agreement shall have completed the issuance of North Coast's Series A
Senior Subordinated Redeemable Convertible Debentures (the "Debentures") in
the face amount of $1,000,000 to Rock Solid Group LLC, a Colorado limited
liability company, upon the terms and conditions set forth in the
Subscription Agreement and other documentation relating to the issuance of
the Debentures. Subject to and upon the Closing of this Agreement, Storm
agrees to assume the liabilities and obligations of North Coast under the
Debentures as further set forth in this Agreement. On or prior to the
Effective Time, North Coast shall secure, in writing, from all of the
holders of the Debentures, their consent to Storm's assumption of North
Coast's liability and obligations to perform under the terms and conditions
of the Debenture Agreement.
(f) Upon the close of this Agreement the executive offices of the
Surviving Corporation shall be relocated to 8756 - 122nd Avenue NE,
Kirkland, Washington 98033.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
7.01 Closing and Termination. Except as otherwise set forth in this Section
7.01, this Agreement shall close by no later than 11:59 p.m. Seattle,
Washington, April 5, 2000, ("Closing Date") provided that either party may
extend this Agreement for an additional seven (7) day period by written notice
to the other party prior to the Closing Date. This Agreement shall terminate if
not closed by 11:59 p.m., Seattle, Washington, April 12, 2000. Notwithstanding
the foregoing and/or the approval of this Agreement by the shareholders of North
Coast and the Board of Directors of Storm, this Agreement may be terminated and
the Merger contemplated hereby may be abandoned at any time prior to the
Effective Time:
(a) By mutual written consent, duly authorized by their respective
Boards of Directors, by Storm and North Coast;
(b) By either Storm or North Coast
(i) if any court of competent jurisdiction or any other
governmental body shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
permanently prohibiting the Merger and such order, decree, ruling or
other action shall have become final and non-appealable;
(ii) if, upon a vote at a duly held meeting or upon any
adjournment thereof, the shareholders of North Coast or the Board of
Directors of Storm shall have failed to give any required approvals;
or
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(c) By Storm if North Coast shall have breached any of its
representations and warranties or covenants contained herein and if such
breach or breaches, either individually or in the aggregate, will have, or
are reasonably likely to have, a material adverse effect on the business,
results of operations, financial condition or prospects of North Coast (a
"North Coast Material Adverse Effect"), unless, in the case of a breach of
covenant, such failure to perform has been caused by a breach of this
Agreement by North Coast.
(d) By North Coast if Storm shall have breached any of its
representations and warranties and such breach or breaches, either
individually or in the aggregate, will have, or are reasonably likely to
have, a Storm Material Adverse Effect, or if Storm shall have breached in
any material respect any of its covenants contained herein, unless, in the
case of a breach of any covenant, such failure to perform has been caused
by a breach of this Agreement by North Coast;
7.02 Effect of Termination. In the event of the termination and abandonment
of this Agreement pursuant to Section 7.01, this Agreement, except for the
obligations of the parties pursuant to this Section 7.02 and the provisions of
Section 5.06, shall forthwith become void and have no effect, without any
liability on the part of any party or its directors, officers or shareholders;
provided that nothing in this Section 7.02 shall relieve any party to this
Agreement of liability for breach of this Agreement.
7.03 Amendment. To the extent permitted by applicable law, this Agreement
may be amended by the parties, at any time before or after approval of this
Agreement and the merger by the shareholders of North Coast but, after any such
shareholder approval, no amendment shall be made that by law requires further
approval of such shareholders without the approval of such shareholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of all the parties.
7.04 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein by any other
applicable party or in any document, certificate or writing delivered pursuant
hereto by any other applicable party, or (iii) subject to the terms hereof,
waive compliance with any of the agreements or conditions of the other parties
contained herein. Any agreement on the part of any party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of a party to this Agreement to assert any of
its rights under this Agreement shall not constitute a waiver of those rights.
7.05 Procedure for Closing, Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 7.01, an amendment of this
Agreement pursuant to Section 7.03 or an extension or waiver pursuant to Section
7.04 shall, in order to be effective, require (a) in the case of Storm, action
by its Board of Directors or the duly authorized designee of its Board of
Directors and (b) in the case of North Coast, action by its Board of Directors.
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ARTICLE VIII
MISCELLANEOUS
8.01 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall be deemed to be only
conditions to the Merger and shall not survive the Merger, provided, however,
that the representations and warranties contained in Section 1.07, and in this
Article VIII shall survive the Merger.
8.02 Assignment, Binding Effect; Benefit; Entire Agreement. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assign any rights, remedies, obligations or liabilities under or by reason of
this Agreement. This Agreement and any documents delivered by the parties in
connection herewith constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings (oral and written) among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
8.03 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision, clause, section or port of this Agreement is so broad as to be
unenforceable, the provision, clause, section or part shall be interpreted to be
only so broad as is enforceable, and all other provisions, clauses, sections or
parts of this Agreement which can be effective without such unenforceable
provision, clause, section or part shall, nevertheless, remain in full force and
effect.
8.04 Notices. Any notice required to be given hereunder shall be sufficient
if in writing, and sent by facsimile transmission and by courier service (with
proof of service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
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If to Storm, to
The Storm High Performance Sound Corporation
Patrick F. Charles, President and CEO
8756 - 122nd Avenue NE
Kirkland, WA 98033
Fax (425) 827-2216
If to North Coast, to
North Coast Productions Inc.
8756 122nd Avenue NE
Kirkland, WA 98033
Attn: Terrence K. Picken, Executive Vice-President
Fax: 425-827-2216
With a copy to:
Robert C. Laskowski
Attorney At Law
S.W. Fifth Avenue, Suite 1300
Portland, OR 97204-1151
Fax: 503-226-6278
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date it is
telecommunicated, personally delivered or mailed.
8.05 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to its rules of
conflict of laws.
8.06 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled under the Arbitration
Rules of the State of Florida.
8.07 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
8.08 Counterparts and Facsimile Signatures. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies of this Agreement
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each of which may be signed by less than all of the
parities hereto, but together all such copies shall constitute one and the same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
8.09 Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings ascribed to them below:
(a) "Affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first-mentioned person.
(b) "Control" (including the terms "controlling", "controlled by" and
"under common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies
of a person, whether through ownership of voting securities, by contract,
or otherwise.
(c) "Person" means a natural person, company, corporation,
partnership, joint venture, association, trust, unincorporated organization
or other entity.
(d) "Subsidiary" of any person means a person in which such first
referenced person owns directly or indirectly an amount of the voting
securities, other voting ownership or voting partnership interest which is
sufficient to elect at least a majority of its Board of directors or other
governing body (or, if there are no such voting interest, owns directly or
indirectly 50% or more of the equity interest).
8.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in the Agreement. The waiver by any party hereto to a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
8.11 Incorporation of Exhibits. All Exhibits and annexes attached hereto
and referred to herein are hereby incorporated herein and made a part hereof for
all purposes as if fully set forth herein.
8.12 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, words denoting any gender shall include all genders and words denoting
natural persons shall include corporations and partnerships and vice versa.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officers thereunto duly authorized, all
as of the day and year first above written.
THE STORM HIGH PERFORMANCE SOUND CORPORATION
By:/s/ Patrick F. Charles
______________________
Patrick F. Charles, President and CEO
NORTH COAST PRODUCTIONS INC.
By:/s/ Terrence K. Picken
______________________
Terrence K. Picken, Executive Vice-President
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INDEX TO EXHIBITS
TO SHARE EXCHANGE AGREEMENT AND PLAN OF MERGER
DATED APRIL 4, 2000 BETWEEN STORM AND NORTH COAST
Exhibit 1.04 Directors and Officers of the surviving Corporation
Exhibit 1.05(c) North Coast's Shareholders to receive stock in
accordance with Section 1.05(c) of the Agreement
Exhibit 6.01(d)(a) Minutes of Meeting of Board of
Directors of Storm dated April 4, 2000
authorizing the Share Exchange Agreement
Exhibit 6.01(d)(b) Consent of Shareholders of North Coast dated April 4,
2000 authorizing the Share Exchange Agreement.
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