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 ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(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 ▇▇▇▇▇▇-▇▇▇▇▇▇▇, 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 ▇▇▇▇▇ National Bank
Address: ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Bank Contact: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President/ Branch Manager
Account Title: SHPE/NCPI Escrow Account
Account No.: ▇▇▇▇▇▇▇▇
ABA No.: ▇▇▇▇▇▇▇▇▇
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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 ▇▇▇▇▇
National Bank ("▇▇▇▇▇ Bank") at ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ 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 ▇▇▇▇▇ Bank authorizing ▇▇▇▇▇ 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 ▇▇▇▇▇
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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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). ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇▇"), 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 ▇▇.
▇▇▇▇▇▇▇. However, ▇▇. ▇▇▇▇▇▇▇ will instruct ▇▇▇▇▇ 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, ▇▇. ▇▇▇▇▇▇▇,
representing the Buyer, and ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇ on behalf of the Escrow
Agent, shall jointly appear at ▇▇▇▇▇ 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
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 103,504 1.25
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, 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 ▇▇. ▇▇▇▇▇▇▇▇▇▇ or ▇▇.
▇▇▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇▇▇▇'▇ or ▇▇.
▇▇▇▇▇▇▇▇▇'▇ 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. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, being the only officers and directors of
Storm, shall tender their resignations as officers and directors. In their
capacity as majority shareholders, Messrs. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ shall appoint by consent Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ to serve as directors of Storm for a special term to end on Mach 31,
2000. In their capacity as directors, Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall appoint
themselves as the sole officers of Storm. In their capacity as directors,
Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇'▇ 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. ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ 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, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, and
Director and Vice-President, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, 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, ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. 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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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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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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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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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.
To Buyer: To Storm: To Escrow Agent:
--------- --------- ----------------
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Mr. ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇
North Coast Productions Storm High Performance Sound Law Firm of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, P.C.
Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ Corporation ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇
(Tel) ▇▇▇- ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (Tel.) (▇▇▇) ▇▇▇-▇▇▇▇
(Fax) ▇▇▇-▇▇▇-▇▇▇▇ (Tel.) ▇▇▇- ▇▇▇-▇▇▇▇ (Fax) (▇▇▇) ▇▇▇-▇▇▇▇
(Fax) ▇▇▇-▇▇▇-▇▇▇▇
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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(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 ▇▇▇▇▇▇ ▇▇▇▇▇
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 ▇▇. ▇▇▇▇▇ or Tuscan Capital is
pursuant to a separate and independent agreement (Consulting Agreement) and
neither ▇▇. ▇▇▇▇▇ 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.
E-15
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/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________ _______________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Director ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
North Coast Production, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Buyer
________________________ (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Director
Storm High Performance Sound Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Dated:
(▇▇▇) ▇▇▇-▇▇▇▇
Dated:
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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 ▇▇▇▇▇ 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, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇-▇▇▇▇▇▇▇
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
_______________________ _____________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
FAX #▇▇▇-▇▇▇-▇▇▇▇
Escrow Agent
Law Firm of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, P.C.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇
________________________
▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇
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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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