As filed with the Securities and Exchange Commission on January 14, 2002
Registration Statement No. 333 -
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Amendment No. )
RAINWIRE PARTNERS, INC.
(Name of Small Business Issuer in its Charter)
Delaware 7370 57-0941152
(State or other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction) Classification code Number) Identification No.)
Monteith Commons, First Floor
2931 Piedmont Road, N.E.
Atlanta, Georgia 30305
(404) 842-1510
(Address and Telephone Number of Principal Executive Offices)
(Address of Principal Place of Business or Intended Principal Place of Business)
Lyne Marchessault
President
Monteith Commons, First Floor
2931 Piedmont Road, N.E.
Atlanta, Georgia 30305
(404) 842-1510
(Name, Address, and Telephone Number of Agent for Service)
Copies to:
Robert E. Altenbach, Esq.
Kutak Rock LLP
Suite 2100, Peachtree Center South Tower
225 Peachtree Street, N.E.
Atlanta, GA 30303
Approximate date of proposed sale to the public: As soon as practicable
after this registration statement becomes effective and all other conditions to
the proposed share exchange described herein have been satisfied.
If any of the Securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Registration
Securities to be Registered Registered Unit (1) Price Fee
--------------------------- ---------- ----------------- ------------------ -----------
Common Stock $.001 Par Value Per
Share 16,289,141 $0.06 $977,348.46 $233.59
Total 16,289,141 $0.06 $977,348.46 $233.59
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
THE INFORMATION CONTAINED IN THIS INFORMATION STATEMENT/PROXY
STATEMENT/PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY
NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS INFORMATION STATEMENT/PROXY
STATEMENT/PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES, IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
Subject to completion , 2002
FRONT COVER OF THE INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS
A SHARE EXCHANGE PROPOSAL
Rainwire Partners, Inc. Oasis Group, Inc.
Monteith Commons, First Floor Monteith Commons, First Floor
2931 Piedmont Road, NE 2931 Piedmont Road, NE
Atlanta, GA 30305 Atlanta, GA 30305
TO THE STOCKHOLDERS OF RAINWIRE PARTNERS, INC.
AND OASIS GROUP, INC.
Rainwire Partners, Inc., a Delaware corporation ("Rainwire") and Oasis
Group, Inc., a Georgia corporation ("Oasis") have entered into an Amended and
Restated Plan and Agreement to Exchange Stock (the "Share Exchange Agreement"),
whereby Oasis common Stockholders will receive one share of Rainwire common
stock for every 2.5 shares of Oasis common stock they own (the "Share
Exchange"). The Board of Directors of both corporations believe that the Share
Exchange will benefit the Stockholders of both corporations.
The Board of Directors of each of Rainwire and Oasis have approved the
Share Exchange Agreement and have recommended that their Stockholders approve
the Share Exchange Agreement as described in the attached materials. In
addition, the Board of Directors of Rainwire has approved various amendments to
Rainwire's Amended and Restated Certificate of Incorporation, which include a
one-for-twenty reverse split of Rainwire's common stock, an increase of the
number of authorized shares of common stock of Rainwire to 100,000,000, and a
change in the name of Rainwire to Oasis Group, Inc., and Rainwire's 2000 Stock
Option Plan. The Board of Directors of Rainwire and Oasis have recommended that
their Shareholders approve the foregoing. Information concerning all of the
foregoing is contained in this Information Statement/Proxy Statement/Prospectus.
WE URGE YOU TO READ THIS MATERIAL, INCLUDING THE SECTION DESCRIBING "RISK
FACTORS" THAT BEGINS ON PAGE [ ].
Lyne Marchessault Ronald A. Potts
President President and Chief Executive Officer
Rainwire Partners, Inc. Oasis Group, Inc.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION (THE "SEC") OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR THE
MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
This Information Statement/Proxy Statement/Prospectus is dated
[__________], 2002, and is first being mailed to Rainwire and Oasis stockholders
on or about [______], 2002.
INFORMATION STATEMENT/PROSPECTUS
RAINWIRE PARTNERS, INC.
Monteith Commons, First Floor
2931 Piedmont Rd., N.E.
Atlanta, GA 30305
WE ARE NOT ASKING YOU FOR YOUR PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY. THE ACTIONS DESCRIBED BELOW HAVE ALREADY BEEN APPROVED BY WRITTEN
CONSENT OF HOLDERS OF A MAJORITY OF RAINWIRE PARTNERS, INC.'S OUTSTANDING SHARES
OF COMMON STOCK. A VOTE OF THE REMAINING STOCKHOLDERS IS NOT NECESSARY. PLEASE
DO NOT SEND IN ANY OF YOUR SHARE CERTIFICATES AT THIS TIME.
Pursuant to the requirements of Section 14(c) of the Securities
Exchange Act of 1934 and Section 228(d) of the General Corporation Law of the
State of Delaware (the "Delaware Corporation Law"), this information statement
is being mailed on or about , 2002 to holders of record as of , 2001 (the
"Record Date") of shares of common stock, par value $0.001 ("Common Stock"), of
Rainwire Partners, Inc., a Delaware corporation (the "Company" or "Rainwire").
It is being furnished in connection with the following:
1. To approve an amendment to Rainwire's Amended and Restated Certificate
of Incorporation to reverse split the Company's common stock on a
one-for-twenty basis;
2. To approve an amendment to Rainwire's Amended and Restated Certificate
of Incorporation to increase the number of authorized shares of common
stock to 100,000,000;
3. To approve the issuance of up to 16,289,141 shares of Rainwire common
stock to the Stockholders of Oasis Group, Inc. ("Oasis") in exchange
for all of the Shares of the outstanding common stock of Oasis. As a
result of the Share Exchange, Oasis will become a wholly-owned
subsidiary of Rainwire;
4. To approve an amendment to Rainwire's Amended and Restated Certificate
of Incorporation to change the name of the Company to Oasis Group,
Inc.; and
5. To approve Rainwire Partner Inc.'s 2000 Stock Option Plan and reserve
1,050,000 Shares for issuance under the Plan.
A written consent executed by the Majority of the Shareholders of Rainwire
approving the Share Exchange Agreement was executed on December 20, 2001.
The closing date of the Share Exchange Agreement is dependent upon the
completion and satisfaction of required shareholder consents and notifications.
Oasis Group, Inc.
First Floor, Monteith Commons
2931 Piedmont Road, NE
Atlanta, GA 30305
NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD [ ],
-
TO THE STOCKHOLDERS OF OASIS GROUP, INC.
NOTICE IS HEREBY GIVEN THAT a special meeting of stockholders of Oasis
Group, Inc., will be held at [ ] on [ ], at [ ] local time, to consider and vote
upon the following matters:
A. To approve and adopt the Amended and Restated Plan and Agreement to
Exchange Stock by and between Rainwire Partners, Inc. and Oasis
Group, Inc., dated as of December 19, 2001, in accordance with the
terms of the Share Exchange Agreement and the transactions
contemplated by the Share Exchange Agreement. A copy of the Share
Exchange Agreement is attached as Annex A to the Information
Statement/Proxy Statement/Prospectus.
B. To act upon the postponement or adjournment of the special meeting,
if necessary, to permit further solicitation of proxies in the event
there are not sufficient votes at the time of the special meeting to
approve the proposal in item (1) above; and
C. To transact such other business as may properly come before the
special meeting.
The Board of Directors has fixed the close of business on [ ], 2002 as
the record date for determination of stockholders entitled to notice and to vote
at the special meeting.
It is important that the enclosed proxy card be signed, dated and
promptly returned in the enclosed envelope so that your shares will be
represented whether or not you plan to attend the special meeting. Do not send
your stock certificates with your proxy card.
By Order of the Board of Directors,
Ronald A. Potts
President
[ ], 2002
--------------------------
TABLE OF CONTENTS
Page
FORWARD-LOOKING STATEMENTS...................................................................................... 1
QUESTIONS AND ANSWERS ABOUT THE SHARE EXCHANGE
AND RELATED TRANSACTIONS................................................................................ 2
SUMMARY......................................................................................................... 6
The Share Exchange..................................................................................... 6
The Companies.......................................................................................... 7
Certain Consequences of the Share Exchange............................................................. 7
Reasons for the Approval of the Share Exchange Agreement by the Rainwire Board......................... 7
Written Consent........................................................................................ 8
Reasons for the Approval of the Share Exchange by Oasis Board.......................................... 8
Oasis Shareholder Vote................................................................................. 8
Voting by Directors and Executive Officers............................................................. 8
Interests of Certain Persons in the Share Exchange..................................................... 9
Closing and Conditions of the Share Exchange........................................................... 9
Termination of the Share Exchange Agreement............................................................ 9
The Share Exchange Consideration....................................................................... 9
Federal Income Tax Consequences........................................................................ 9
Accounting Treatment................................................................................... 10
Disposition of Current Operations...................................................................... 10
Dissenter's Rights..................................................................................... 10
Market for Rainwire Common Stock....................................................................... 10
The Amendments to Rainwire's Certificate of Incorporation.............................................. 10
Rainwire Partners, Inc. 2000 Stock Option Plan......................................................... 11
RISK FACTORS.................................................................................................... 11
Risks Related to the Business.......................................................................... 11
Risks Related to the Offering.......................................................................... 13
PRO FORMA FINANCIAL INFORMATION................................................................................. 14
PRO FORMA NARRATIVE............................................................................................. 14
THE ACQUISITION OF OASIS GROUP, INC............................................................................. 18
Background of the Offer and the Acquisition............................................................ 18
Approval of the Rainwire Board......................................................................... 19
Reasons for the Approval of the Rainwire Board......................................................... 19
Approval of the Oasis Board............................................................................ 20
Reasons for the Approval of the Oasis Board............................................................ 20
Accounting Treatment................................................................................... 21
Regulatory Matters..................................................................................... 21
Federal Income Tax Consequences........................................................................ 21
General Terms of Share Exchange Agreement.............................................................. 22
Background Information on Rainwire Partners, Inc................................................................ 26
Description of Business................................................................................ 27
Employees.............................................................................................. 29
Properties............................................................................................. 29
Legal Proceedings...................................................................................... 29
Market For Common Equity And Related Stockholder Matters............................................... 30
Management's Discussion and Analysis of Financial Condition and Results of Operations.................. 32
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure................... 34
Rainwire's Management and Executive Compensation....................................................... 34
Security Ownership of Certain Beneficial Owners and Management......................................... 37
BACKGROUND INFORMATION ON OASIS GROUP, INC...................................................................... 38
Description of Business................................................................................ 48
Real Estate Development................................................................................ 48
Residential Mortgage Operations........................................................................ 48
Oasis Group, Inc. Agreements........................................................................... 48
Market for Common Equity And Related Stockholder Matters............................................... 51
Management's Discussion and Analysis of Financial Condition and Results of Operations.................. 51
Oasis' Management and Executive Corporation............................................................ 52
Security Ownership of Certain Beneficial Owners and Management......................................... 54
THE REVERSE SPLIT............................................................................................... 54
Approval of the Rainwire Board......................................................................... 55
Reasons for the Approval of the Rainwire Board......................................................... 55
THE AUTHORIZED SHARE INCREASE................................................................................... 56
Approval of the Rainwire Board......................................................................... 56
ii
Reasons for the Approval of the Rainwire Board......................................................... 56
THE NAME CHANGE................................................................................................. 56
Approval of the Rainwire Board......................................................................... 56
Reasons for the Approval of the Rainwire Board......................................................... 56
RAINWIRE PARTNERS, INC. 2000 STOCK OPTION PLAN.................................................................. 56
Approval of the Rainwire Board......................................................................... 56
Reasons for the Approval of the Rainwire Board......................................................... 57
CERTAIN SECURITIES LAWS CONSIDERATIONS.......................................................................... 57
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT............................................................... 57
Outstanding Stock and Appraisal Rights.......................................................................... 58
Rainwire Partners Inc.................................................................................. 58
Oasis Group, Inc....................................................................................... 60
COMPARISON OF RIGHTS OF RAINWIRE STOCKHOLDERS AND
OASIS STOCKHOLDERS...................................................................................... 61
LEGAL MATTERS................................................................................................... 64
EXPERTS 64
WHERE YOU CAN FIND MORE INFORMATION............................................................................. 64
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES.......................................................................... 65
ANNEX A: Amended and Restated Plan and Agreement to Exchange Stock by and
between Rainwire and Oasis
ANNEX B: Appraisal and Dissenter's Rights Statutes (Delaware and Georgia)
ANNEX C: Form of Proxy
ANNEX D: Rainwire's Annual Report on Form 10-KSB for the year ended
December 31, 2000.
ANNEX E: Rainwire's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 2001.
ANNEX F: The Oasis Group, Inc. Audited Financial Statements
December 31, 2000.
iii
THIS DOCUMENT INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT RAINWIRE FROM DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
THAT HAVE NOT BEEN INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. THIS INFORMATION
IS AVAILABLE AT THE INTERNET WEBSITE THE SEC MAINTAINS AT HTTP://WWW.SEC.GOV, AS
WELL AS FROM OTHER SOURCES. SEE "WHERE YOU CAN FIND MORE INFORMATION" ON PAGE [
].
YOU MAY ALSO REQUEST COPIES OF THESE DOCUMENTS FROM US, WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST TO RAINWIRE OR FROM OASIS AT (404) 842-1510. IN
ORDER TO RECEIVE TIMELY DELIVERY OF THESE DOCUMENTS, YOU MUST MAKE YOUR REQUESTS
NO LATER THAN [ ].
FORWARD-LOOKING STATEMENTS
The statements contained in this Information Statement/Proxy
Statement/Prospectus that are not historical facts are forward-looking
statements under the federal securities laws. These forward-looking statements,
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict. Actual outcomes and
results may differ materially from what is expressed in, or implied by, such
forward-looking statements. Rainwire and Oasis undertake no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise. Among the important factors that could cause actual
results to differ materially from those expressed in, or implied by, the
forward-looking statements are changes in general economic conditions, increased
or unexpected competition, costs related to the proposed share exchange, failure
to obtain required stockholder or regulatory approvals or the share exchange not
closing for any other reason, failure of the combined company to retain and hire
key employees, difficulties in successfully integrating the parties' businesses
and technologies and other matters disclosed in Rainwire's filings with the
Securities and Exchange Commission. Investors are strongly encouraged to review
Rainwire's annual report on Form 10-KSB, for the year ended December 31, 2000
and other reports on file with the Securities and Exchange Commission for a
discussion of risks and uncertainties that could affect operating results and
the market price of the companies' stock.
QUESTIONS AND ANSWERS ABOUT THE SHARE EXCHANGE
AND RELATED TRANSACTIONS
Q: WHAT IS THE SHARE EXCHANGE AGREEMENT?
A: Rainwire Partners, Inc. will acquire Oasis Group, Inc. in a stock
exchange whereby the Shareholders of Oasis will receive shares of
Rainwire. Oasis will become a wholly owned subsidiary of Rainwire and
the Oasis shareholders as a group will receive 16,289,141 shares of the
Rainwire common stock, or approximately 94.25% ownership of Rainwire on
a fully-diluted basis. For more information on the Share Exchange
Agreement, see "Annex A: Plan and Agreement to Exchange Stock."
Q: WHY DID RAINWIRE AND OASIS AGREE TO THE SHARE EXCHANGE AGREEMENT?
A: Rainwire Partners, Inc.
On December 31, 2000, Rainwire's management adopted a plan to
discontinue the operations of Rainwire, to liquidate its assets, and to
acquire a potentially profitable company. Rainwire's Board of Directors
believes that the terms and provisions of the Share Exchange Agreement
provide Rainwire with an opportunity to acquire a potentially
profitable company are fair and in the best interests of Rainwire and
its stockholders. For more information on the reasons Rainwire has
approved the Share Exchange Agreement, see "The Acquisition of Oasis
Group, Inc. - Reasons for the Approval of the Rainwire Board."
Oasis Group, Inc.
Oasis' board of directors determined that a reverse merger was the best
vehicle to position Oasis in the public market. After discussions with
Rainwire, Oasis' board of directors believes that that the terms and
provisions of the Share Exchange Agreement provide Oasis with the best
opportunity to achieve its goal of reaching the public market. For more
information on the reasons Oasis has approved the Share Exchange, see
"The Acquisition of Oasis Group, Inc. - Reasons for the Approval of the
Oasis Board."
Q: WHAT APPROVALS ARE REQUIRED?
A: Rainwire Partners, Inc.
The approval of the Share Exchange Agreement and related transactions
required the affirmative vote of the holders of a majority of the
shares issued, outstanding and entitled to vote. On December 20, 2001,
Rainwire had 9,909,886 shares of common stock issued and outstanding
and 500,000 shares of Series D Convertible Preferred Stock issued and
outstanding, entitled to 10 votes per share. A written consent of the
majority of the shareholders of Rainwire representing 3,712,811 shares
of the common stock and 500,000 shares of the Series D Convertible
Preferred Stock, which approved the foregoing was executed on December
20, 2001.
2
Oasis Group, Inc.
The approval of the Share Exchange Agreement requires the affirmative
vote of the holders of a majority of the shares issued, outstanding and
entitled to vote.
Q: WHAT IS THE PURPOSE OF THIS INFORMATION STATEMENT/PROXY
STATEMENT/PROSPECTUS?
A: This document serves as Rainwire's Information Statement and Prospectus
and as Oasis' Proxy Statement. As an Information Statement, this
document is being provided to Rainwire's shareholders to inform them
that the holders of shares of Rainwire representing approximately 58.4%
of the voting power of Rainwire stock have delivered to Rainwire a
written consent approving the Share Exchange Agreement, amendments to
Rainwire's Amended and Restated Certificate of Incorporation, and the
Rainwire Partners, Inc. 2000 Stock Option Plan. Under Delaware law, the
amendments to Rainwire's certificate of incorporation and Stock Option
Plan must be approved by a majority of Rainwire's Shareholders.
As a Proxy Statement/Prospectus, this document is being provided to
Oasis' shareholders by Oasis because Oasis' Board of Directors is
soliciting the Oasis' shareholders approval for the Share Exchange
Agreement, and by Rainwire because Rainwire is offering Oasis
shareholders shares of Rainwire common stock in exchange for their
shares of Oasis common stock if the Share Exchange is completed.
Q: HOW WILL THE SHARE EXCHANGE AGREEMENT AFFECT ME?
A: In connection with the Share Exchange, Rainwire will assign, transfer
and deliver to the Oasis shareholders 16,289,141 shares of Rainwire
common stock, representing approximately 94.25% ownership of Rainwire
on a fully-diluted basis. After issuance of the Rainwire common stock
to the shareholders of Oasis, and the one - for - twenty reverse split
of Rainwire's common stock, current Rainwire shareholders will hold as
a group, approximately 5.75% of the fully-diluted Rainwire common
stock.
Q: WHAT DO I NEED TO DO NOW?
A: Rainwire Partners, Inc.
Shareholders of Rainwire do not need to do anything at this time. The
board of directors and a majority of the shareholders of Rainwire have
already approved the Share Exchange. However, Rainwire's shareholders
are urged to carefully read and consider the information contained in
this Information Statement/Proxy Statement/Prospectus.
Oasis Group, Inc.
After carefully reading and considering the information contained in
this Information Statement/Proxy Statement/Prospectus, indicate on your
proxy card how you want to vote and sign and mail it in the enclosed
return envelope as soon as possible so that your shares will be
represented at the shareholders meeting.
3
If you sign and send in your proxy card and do not indicate how you
want to vote, your proxy will be counted as a vote in favor of the
proposals.
The special meeting will be at [ ] on [ ] at [ ] local time. If you are
a holder of record, you may attend the special meeting and vote your
shares in person rather than signing and mailing your proxy.
Q: WHAT IF I DO NOT VOTE?
A: Failure by an Oasis shareholder to return their proxy will result in
their shares not being counted for purposes of determining the presence
of a quorum at the special meeting or determining whether we have
received the votes required to approve the exchange of common stock in
the Share Exchange.
- If you return your proxy signed but do not indicate how you want to
vote, your proxy will be counted as a vote "FOR" the Share Exchange.
- If you return your proxy and abstain from voting, your proxy will
not be counted as a vote cast on, and therefore will not affect the
outcome of, the Share Exchange.
Q: CAN OASIS SHAREHOLDERS CHANGE THEIR VOTE AFTER THEY HAVE MAILED THEIR
PROXY?
A: Yes. You can change your vote by sending in a later-dated, signed proxy
card before the shareholders meeting of Oasis, or attending the meeting
in person and voting differently. You can also revoke any proxy before
the shareholders meeting by sending a written notice to Oasis.
Q: WHY ARE RAINWIRE'S SHAREHOLDERS BEING PROVIDED WITH THIS INFORMATION
STATEMENT?
A: The Securities and Exchange Commission and federal securities laws
require that Rainwire provide its holders of voting securities with
notice of corporate action undertaken by written consent if proxies
were not solicited. We are providing you with this Information
Statement because the Amendments to the Certificate of Incorporation
and Share Exchange Agreement were approved by the written consent of
the holders of a majority of Rainwire's stock and proxies were not
required to be solicited.
Q: WHAT RIGHTS DO I HAVE IF I OPPOSE THE SHARE EXCHANGE?
A: Both Rainwire and Oasis shareholders may dissent and seek an appraisal
of the fair market value of their shares, but only if they comply with
all Delaware or Georgia laws and procedures, as appropriate. For more
information, see "Outstanding Stock and Appraisal Rights" and "Exhibit
B: Appraisal Rights Statute."
4
Q: WHAT ARE THE FEDERAL TAX CONSEQUENCES OF THE SHARE EXCHANGE TO ME?
A: The Share Exchange should be tax free to Rainwire and Oasis
shareholders. For more information on the federal tax consequences,
"The Acquisition of Oasis Group, Inc. - Federal Income Tax
Consequences."
Q: WHEN DO YOU EXPECT THE SHARE EXCHANGE TO BE COMPLETED?
A: If all conditions to closing have been satisfied, the parties will
close the Share Exchange as soon as possible, but not before the
greater of 20 days after this Information Statement/Proxy
Statement/Prospectus is mailed to the Rainwire shareholders and the
approval of greater than 50% of the Oasis shareholders is received.
Q: WHERE SHOULD I SEND MY STOCK CERTIFICATE?
A: Oasis shareholders should not send in their stock certificates with
their proxy. You must keep your stock certificate until after the Share
Exchange has been approved, at which time you will receive a letter of
transmittal describing how you may exchange your Oasis stock
certificate for certificates representing shares of Rainwire common
stock. At that time, you will have to submit your Oasis stock
certificates to the exchange agent with your completed letter of
transmittal. Rainwire stockholders do not need to do anything with
their stock certificates.
Q: ARE THEIR RISKS I SHOULD CONSIDER IN DECIDING WHETHER TO VOTE FOR THE
SHARE EXCHANGE?
A: Yes. The section entitled "Risk Factors" beginning on page [__] of this
Information Statement/Proxy Statement/Prospectus describes a number of
risks that you should consider in connection with the Share Exchange.
Q: WHAT IS THE REVERSE SPLIT?
A: In connection with the Share Exchange, on December 19, 2001, Rainwire's
Board of Directors approved an amendment to the Company's Amended and
Restated Certificate of Incorporation to effect a one-for-twenty
reverse stock split of the Company's issued outstanding Common Stock
(the "Reverse Split"). The amendment was approved in a written consent
executed by the holders of more than a majority of the outstanding
shares of Common Stock. Pursuant to the Reverse Split, each of the
twenty shares of Rainwire's Common issued and outstanding will be
reclassified as, and exchanged for, one share of newly issued Common
Stock.
Q: WHY DID RAINWIRE INCREASE ITS AUTHORIZED SHARES OF COMMON STOCK?
A: The Rainwire Board of Directors considered many factors in deciding to
increase Rainwire's authorized shares of Common Stock, including to
effect the Share Exchange.
5
See "The Acquisition of Oasis Group, Inc. -- Reasons for the Approval
of the Rainwire Board."
Q: WHY IS RAINWIRE PROPOSING APPROVAL OF THE RAINWIRE 2000 STOCK OPTION
PLAN?
A: Rainwire's Board of Directors believes that the grant of equity-based
awards such as stock options is a highly effective way to align the
interests of employees, directors and consultants of Rainwire with
those of stockholders and provides a cost-effective means of
encouraging their contributions to the success of Rainwire.
Q: WHOM SHOULD I CALL WITH ANY QUESTIONS:
A: If you have more questions about the Share Exchange, or you need
additional copies of this Information Statement/Proxy
Statement/Prospectus or the enclosed written consent, please contact:
Rainwire Partners, Inc. Oasis Group, Inc.
2931 Piedmont Road, N.E. 2931 Piedmont Road, N.E.
Monteith Commons, First Floor and Monteith Commons, First Floor
Atlanta, GA 30305 Atlanta, GA 30305
Attention: Lyne Marchessault Attention: Ronald A. Potts
Phone Number: (404) 842-1510 Phone Number: (404) 842-1510
SUMMARY
This summary highlights selected information from this Information
Statement/Proxy Statement/Prospectus and may not contain all of the information
that is important to you. Even though we have highlighted what we believe is the
most important information, you should carefully read the entire Information
Statement/Proxy Statement/Prospectus for a more complete understanding of the
Share Exchange and related transactions, including the annexes and other
documents to which we have referred you. You should also review the additional
information about Rainwire on file with the Securities and Exchange Commission
referred to in "Where You Can Find More Information."
THE SHARE EXCHANGE
The acquisition of Oasis will be effected as a stock exchange whereby
the shareholders of Oasis will receive shares of Rainwire and Oasis will become
a wholly-owned subsidiary of Rainwire. The shareholders of Oasis will hold
approximately 94.25% of the outstanding shares of the Company and the current
shareholders of Rainwire will retain approximately 5.75% ownership on a
fully-diluted basis. THE SHARE EXCHANGE AGREEMENT IS ATTACHED AS ANNEX A TO THIS
INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS. WE ENCOURAGE YOU TO READ THE
SHARE EXCHANGE AGREEMENT. IT IS THE PRINCIPAL DOCUMENT GOVERNING THE SHARE
EXCHANGE. See "The Acquisition of Oasis Group, Inc." and "Annex A: Plan and
Agreement to Exchange Stock."
6
THE COMPANIES
Rainwire Partners, Inc. is a Delaware corporation with its principal
offices located at 2931 Piedmont Road, N.E., Monteith Commons, First Floor,
Atlanta, GA 30305. Rainwire was incorporated on May 10, 1991, and as of December
31, 2000, it had adopted a plan to discontinue its operations and liquidate its
assets. See "Background Information on Rainwire Partners, Inc."
Oasis Group, Inc. is a privately-held Georgia corporation with its
principal offices located at 2931 Piedmont Road, N.E., Monteith Commons, First
Floor, Atlanta, GA 30305. Oasis is currently in the early stage of its business
and has entered into, and intends to continue to enter into various agreements
to implement its business plan. Oasis' business plan includes the acquiring,
owning, developing and selling of parcels of undeveloped property and a
residential mortgage operation. See "Background Information on Oasis Group,
Inc."
CERTAIN CONSEQUENCES OF THE SHARE EXCHANGE
Change in Corporate Offices
In August 2001, the corporate offices of Rainwire were transferred to
2931 Piedmont Road, N.E., Monteith Commons, First Floor, Atlanta, Georgia 30305.
Until the closing of the Share Exchange, Oasis has agreed to allow Rainwire to
use Oasis' offices on a rent free basis, although the parties have not entered
into a formal agreement.
Change in Senior Management
Upon closing of the Share Exchange Agreement, Lyne Marchessault will
resign as President of Rainwire, and Ronald A. Potts will be appointed President
and Chief Executive Officer of Rainwire.
Change in Board of Directors
Upon closing of the Share Exchange Agreement, Ronald A. Potts will be
appointed to the Board of Directors of Rainwire.
REASONS FOR THE APPROVAL OF THE SHARE EXCHANGE AGREEMENT BY THE RAINWIRE BOARD
On December 19, 2001, the Rainwire Board of Directors, unanimously
approved the Share Exchange Agreement and determined that the acquisition of
Oasis, and the transactions contemplated thereby are in the best interests of
Rainwire and its shareholders.
In reaching its decision to approve the Share Exchange Agreement as
well as the reverse stock split and authorized share increase, the Rainwire
Board of Directors considered a number of factors. See "The Acquisition of Oasis
-- Reasons for the Approval of the Rainwire Board."
7
WRITTEN CONSENT
Under Section 228 of the Delaware General Corporation Law the above
actions can be authorized, provided shareholders holding at least a majority of
the outstanding shares of Rainwire entitled to vote on the matter at the Record
Date give their written consent thereto. On December 20, 2001, the majority of
the shareholders approved the Share Exchange Agreement and the other actions.
Accordingly, a vote of the remaining stockholders of Rainwire is not necessary
to complete the Share Exchange or other actions.
REASONS FOR THE APPROVAL OF THE SHARE EXCHANGE BY OASIS BOARD
On December 19, 2001, the Oasis Board of Directors unanimously approved
the Share Exchange Agreement and determined that Rainwire's acquisition of Oasis
was in the best interest of Oasis and its shareholders.
In reaching its decision to approve the Share Exchange, the Oasis Board
of Directors considered a number of factors. See "The Acquisition of Oasis --
Reasons for the Approval of the Oasis Board.
OASIS SHAREHOLDER VOTE
If you are an Oasis shareholder, you may vote at the special meeting if
you owned shares of Oasis common stock at the close of business on , 2002.
As of the close of business on that day, shares of Oasis common stock were
outstanding.
Approval and adoption of the Share Exchange Agreement, the Share
Exchange and the other transactions contemplated by the Share Exchange
Agreement, and approval of the proposal regarding further solicitation of
proxies upon adjournment or postponement of the special meeting requires the
affirmative vote of the holders of at least a majority of the outstanding shares
of Oasis common stock.
VOTING BY DIRECTORS AND EXECUTIVE OFFICERS
On December 19, 2001, directors and executive officers of Rainwire and
their affiliates were entitled to vote approximately 2,231,461 shares of
Rainwire common stock, or approximately 22.5% of the shares of Rainwire common
stock outstanding on that date. In addition, directors and executive officers of
Rainwire were entitled to vote 500,000 shares of Series D Convertible Preferred
Stock, which are entitled to a total of 5,000,000 votes, or 10 votes per share.
Accordingly, on December 19, 2001, directors and executive officers of Rainwire
and their affiliates were entitled to 7,231,461 out of a total of 14,909,886
votes, or 48.5% of the total voting power.
On December 19, 2001, directors and executive officers of Oasis and
their affiliates were entitled to vote approximately 10,600,000 shares of Oasis
common stock, or approximately 28.5% of the shares of Oasis common stock
outstanding on that date.
8
INTERESTS OF CERTAIN PERSONS IN THE SHARE EXCHANGE
The interests of certain members of the Board and Management of
Rainwire and Oasis could be different than those of other Rainwire and Oasis
shareholders. See "The Acquisition of Oasis Group, Inc. -- Certain Relationships
and Related Transactions."
CLOSING AND CONDITIONS OF THE SHARE EXCHANGE
The acquisition of Oasis shall become effective at such time as the
Conditions Precedent for closing the Share Exchange Agreement have been either
satisfied or waived, and the required Shareholder consents and notifications are
completed. See "Annex A: Plan and Agreement to Exchange Stock."
TERMINATION OF THE SHARE EXCHANGE AGREEMENT
The Share Exchange Agreement may be terminated by either Rainwire or
Oasis prior to the closing under certain circumstances. See "Annex A: Plan and
Agreement to Exchange Stock."
THE SHARE EXCHANGE CONSIDERATION
Pursuant to the Share Exchange, the Oasis shareholders will receive
16,289,141 shares of Rainwire Common Stock constituting approximately 94.25% of
the post acquisition Fully-Diluted shares of Rainwire Common Stock. The Share
Exchange contemplates the issuance of shares of Rainwire Common Stock in excess
of the current number of outstanding Common Stock shares and will dilute current
shareholders of Rainwire Common Stock to approximately 5.75% Fully-Diluted
ownership post-acquisition.
FEDERAL INCOME TAX CONSEQUENCES
The acquisition of Oasis and the included transactions contemplated in
connection therewith have been structured with the intent that they be tax-free
to Rainwire, Oasis and holders of Oasis stock for federal income tax purposes.
See "The Acquisition of Oasis Group, Inc. -- Federal Income Tax Consequences."
In addition, the receipt of one share of common stock for every twenty
share of common stock held prior to the reverse split as a result of the reverse
split by Rainwire's shareholders should not result in any taxable gain or loss
to stockholders for federal income tax purposes.
The federal income tax discussion set forth above is included for
general information and may not apply to particular categories of holders of
Oasis stock or options subject to special treatment under the federal income tax
laws, such as foreign holders and holders whose stock or options were acquired
pursuant to the exercise of an employee stock option or otherwise as
compensation. In addition, there may be relevant foreign, state, local or other
tax consequences, which are not described above. The Oasis shareholders are
urged to consult their tax advisors to determine the specific tax consequences
of the Share Exchange, including the applicability and effect of foreign, state,
local and other tax laws.
9
ACCOUNTING TREATMENT
The transaction will be accounted for as a reverse acquisition of the
fair market value of Rainwire's stock by Oasis in accordance with generally
accepted accounting principles. "See the Acquisition of Oasis - Accounting
Treatment."
DISPOSITION OF CURRENT OPERATIONS
Due to the poor financial performance experienced from operations, on
December 31, 2000, Rainwire's management adopted a plan to discontinue its
operations and liquidate its assets. See "Background Information on Rainwire
Partners, Inc. - Disposition of Current Operations."
DISSENTER'S RIGHTS
Under Delaware law, Rainwire shareholders have the right to seek an
appraisal of the fair market value of their shares in connection with the Share
Exchange and other actions. See "Outstanding Stock and Appraisal Rights" and
"Annex B: Appraisal Rights Statutes."
Under Georgia law, Oasis shareholders have the right to seek an
appraisal of the fair market value of their shares in connection with the Share
Exchange. See "Outstanding Stock and Appraisal Rights" and "Annex B:
Appraisal Rights Statutes."
MARKET FOR RAINWIRE COMMON STOCK
Rainwire's common stock is expected to trade on the OTC Bulletin Board.
Rainwire's common stock was listed on the OTC Bulletin Board, under the symbol
RNWR until February, 2001, at which time such listing was suspended because
Rainwire failed to meet its reporting requirements under the Securities Exchange
Act of 1934. Rainwire is currently in the process of having its stock relisted
on the OTC Bulletin Board.
Upon completion of the Share Exchange, and the name change of Rainwire
to Oasis Group, Inc., Rainwire expects to obtain a new symbol for trading on the
OTC Bulletin Board.
THE AMENDMENTS TO RAINWIRE'S CERTIFICATE OF INCORPORATION
On December 19, 2001, Rainwire's Board of Directors approved an
amendment to Rainwire's Amended and Restated Certificate of Incorporation to
effect a one-for-twenty reverse stock split (the "Reverse Split") of Rainwire's
then issued and outstanding Common Stock (the "Prior Common"), to change the
name of Rainwire from Rainwire Partners, Inc. to Oasis Group, Inc. (the "Name
Change"), and to increase the authorized shares of Common Stock of the Company
to One Hundred Million (100,000,000) (the "Authorized Share Increase").
An amendment to Rainwire's Amended and Restated Certificate of
Incorporation reflecting the foregoing was filed with the Secretary of the State
of Delaware on , 2002.
10
RAINWIRE PARTNERS, INC. 2000 STOCK OPTION PLAN
The purpose of the Rainwire Partners, Inc. 2000 Stock Option Plan is to
promote the long term success of Rainwire and the creation of stockholder value.
The plan will reserve for issuance of stock incentives to employees, directors
and consultants of Rainwire 1,050,000 shares of Rainwire common stock. All
employees, directors and consultants of Rainwire and its subsidiaries will be
eligible to participate in the plan. The plan provides for the grant of
incentive and nonstatutory stock options.
RISK FACTORS
The Share Exchange involves a high degree of risk. By consenting to the
Share Exchange, current Oasis shareholders will be choosing to invest in
Rainwire Common Stock. Additionally, as a result of the Share Exchange, current
Rainwire shareholders will face dilution of their ownership interest in
Rainwire. An investment in Rainwire involves a high degree of risk. In addition
to the other information contained in this Information Statement/Proxy
Statement/Prospectus, you should carefully consider all of the following risk
factors relating to the proposed Share Exchange, Rainwire, Oasis and the
combined company in deciding whether to consent for the Share Exchange and other
actions.
No investment banker, appraiser or other independent third party has
been consulted concerning this offering or the fairness of the terms of the
Share Exchange. Thus, you may have less protection than if an investment banker
were involved in the transaction. For example, there has been less due diligence
performed on Rainwire and Oasis than would have been the case if an investment
banker were involved in the transaction.
RISKS RELATED TO THE BUSINESS
BECAUSE OF OUR LACK OF FUNDS AND PAST LOSSES, RAINWIRE'S INDEPENDENT
ACCOUNTANT'S AUDIT REPORT STATES THAT THERE IS SUBSTANTIAL DOUBT ABOUT ITS
ABILITY TO CONTINUE AS A GOING CONCERN.
Rainwire's independent certified public accountants have raised
substantial doubt about its ability to continue as a going concern. Rainwire's
ability to continue as a going concern is highly dependent upon obtaining
additional financing for its planned operations, and/or achieving profitable
operations. If Rainwire is unable to obtain additional financing in sufficient
amounts or on acceptable terms, it may not be able to continue its existence.
RAINWIRE HAS INCURRED SIGNIFICANT LOSSES.
As of December 31, 2000, the end of Rainwire's most recent fiscal year,
Rainwire had incurred significant losses. Additionally, as of December 31, 2000,
Rainwire adopted a plan to discontinue its operations and to liquidate its
assets. Accordingly, Rainwire expects to continue incurring operating losses
until it is able to derive meaningful revenues from Oasis' anticipated
operations. There can be no assurance that Oasis' anticipated operations will
ever produce profitable operations or that Rainwire will be able to continue to
obtain financing until Oasis is able to produce profitable operations. Because
of the substantial start-up costs that must be incurred by a new company,
Rainwire expects to incur significant operating losses during the
11
initial years of Oasis' operations. No assurance can be given that the future
operations of Oasis will be successful.
OASIS IS A DEVELOPMENT STAGE COMPANY AND HAS NO SIGNIFICANT OPERATING HISTORY.
Oasis was founded on November 16, 1999, and to date has had no business
operations. As of the date of this prospectus, Oasis has not had any revenue
producing operations on which you can evaluate its potential for future success.
Oasis' activities to date have been limited to conducting a private offering of
its securities and entering into agreements or letters of intent concerning
various real property and a mortgage brokerage company. As an early - stage
company, Oasis is subject to all risks, expenses, and uncertainties frequently
encountered by new companies. Any unanticipated expenses, problems, or
difficulties may result in material delays both in the completion of the Share
Exchange and in implementing Oasis' business plan.
OASIS MAY BE UNABLE TO RAISE ADDITIONAL FUNDING TO PURSUE OUR STRATEGIES WHICH
MAY HARM OUR BUSINESS.
Oasis anticipates the need for additional capital as it pursues its
business strategy. Oasis expects to raise additional capital through a
combination of new debt issuances and equity sales, from private as well as
public sources. Issuance of new debt and/or the sale of equity will likely have
a dilutive effect on Oasis and its shareholders. Implementation of Oasis'
strategy and its business plans is contingent upon the availability of such
funding sources. No assurance can be given that Oasis will be able to raise debt
or equity capital, at terms that are acceptable to Oasis, or at all, in order to
fund its operations as set forth above.
OASIS' BUSINESS PLAN MAY NEVER BE IMPLEMENTED.
Oasis' business plan includes the acquiring, owning, developing and
selling of parcels of undeveloped property and a residential mortgage operation.
Oasis has entered into agreements or letters of intent concerning various real
property and a mortgage brokerage company; however, there is no assurance that
any of the transactions contemplated by the agreements will ever be completed.
RAINWIRE DOES NOT ANTICIPATE PAYING ANY DIVIDENDS IN THE FORESEEABLE FUTURE.
Rainwire presently anticipates that it will retain all available funds
for use in the operation and expansion of its business and does not anticipate
paying any dividends in the foreseeable future. Any future payment of dividends
to its stockholders will depend on decisions that will be made by its board of
directors and will depend on then existing conditions, including our financial
condition, contractual restrictions, capital requirements and business
prospects.
ACQUISITIONS
Rainwire may make future acquisitions or investments in other
companies, facilities or technologies. Rainwire may not realize the anticipated
benefits of any acquisition or investment. If Rainwire makes any acquisitions,
it will be required to assimilate the operations, products and personnel of the
acquired businesses and train, retain and motivate key personnel from the
acquired businesses. Similarly, acquisitions may cause disruptions in Rainwire's
operations and
12
divert management's attention from day-to-day operations, which could impair
Rainwire's relationships with Rainwire's current employees, customers and
strategic partners. In addition, Rainwire's profitability may suffer because of
acquisition-related costs, amortization costs for certain intangible assets, and
impairment losses related to goodwill.
RISKS RELATED TO THE OFFERING
CURRENT RAINWIRE SHAREHOLDERS WILL SUFFER IMMEDIATE AND SUBSTANTIAL DILUTION
UNDER TERMS OF THE SHARE EXCHANGE AGREEMENT.
Under the terms of the Share Exchange Agreement, Rainwire will effect a
reverse split of its current issued and outstanding common stock and will issue
shares of Rainwire's Common Stock to the shareholders of Oasis. As a result,
current shareholders of Rainwire will suffer substantial dilution.
In addition, under the terms of the Share Exchange Agreement, Rainwire
will amend its Certificate of Incorporation to increase its authorized shares of
Common Stock to One Hundred Million (100,000,000). Rainwire's ability to issue
additional shares of Common Stock after the completion of the Share Exchange
will subject current Rainwire shareholders to additional dilution.
RAINWIRE MAY NOT BE ABLE TO LIST ITS STOCK ON AN EXCHANGE, AND EVEN IF IT DOES,
AN ACTIVE TRADING MARKET MAY NOT DEVELOP
Management intends to have Rainwire's stock listed on the OTC Bulletin
Board. There can be no assurance that we will be able to do so. Even if we are
able to obtain a listing on the OTC Bulletin Board, an active trading market may
not develop or, if developed, may not be sustained. Typically, stocks traded on
the OTC Bulletin Board or on the "pink sheets" have very limited liquidity, and
therefore, it may be very difficult for purchases of our Common Stock to
liquidate their investments at a favorable price, or at all.
THE MARKET PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY
The market price of the Common Stock could be subject to significant
fluctuations in response to:
- the fact that our stock will trade on the OTC Bulletin Board
or pink sheets,
- variations in quarterly and yearly operating results,
- general trends in our industry, and
- changes in state or federal regulations affecting Rainwire,
Oasis or our industry.
In addition, the stock market in recent years has experienced extreme
price and volume fluctuations that often have been unrelated or disproportionate
to the operating performance of affected companies. Broad market fluctuations
may adversely affect the market price of our Common Stock. Additionally, because
our common stock is expected to trade on either the OTC
13
Bulletin Board or the "pink sheets", a combination of limited liquidity and
significant price fluctuations may prevent an investor from being able to
liquidate their investments at a favorable price, or at all.
WE WILL BE SUBJECT TO THE PENNY STOCK RULES WHICH MAY ADVERSELY AFFECT TRADING
IN OUR STOCK
Because our common stock is not listed on any securities exchange or
the Nasdaq Stock Market and may not have a trading price of at least $5.00 per
share, our common stock is subject to federal penny stock regulations. As a
result, the market liquidity for the shares received in this offering could be
adversely affected because these regulations require broker-dealers to make a
special suitability determination for the purchase and to have received the
purchaser's written consent to the transaction prior to the sale. This makes it
more difficult administratively for broker-dealers to buy and sell stock subject
to the penny stock regulations on behalf of their customers. As a result, it may
be more difficult for a broker-dealer to sell the shares received in this
offering.
PRO FORMA FINANCIAL INFORMATION
Assuming the share exchange is completed, Rainwire Partners, Inc. will
be the legal parent of The Oasis Group, Inc. For accounting purposes, The Oasis
Group, Inc. will be the acquirer and its financial information will be reported
from the effective date of the share exchange forward. Accordingly, the
operations of Rainwire will no longer be reported and all historical financial
information and results of operations will be that of The Oasis Group, Inc.
The Oasis Group, Inc., a development stage, Georgia corporation was
formed in November, 1999, however, it had no financial transactions during that
year. The information included herein for Oasis is as of December 31, 2000 and
for the year then ended and the nine months ended September 30, 2001.
PRO FORMA NARRATIVE
OPERATIONS OF RAINWIRE PARTNERS, INC.
For the nine months ended September 30, 2001, Rainwire Partners, Inc.
is in the development stage and had no operations, having discontinued them as
of December 31, 2000. Therefore, there are no continuing operations for Rainwire
during the year ended December 31, 2000, or for the nine months ended September
30, 2001.
OPERATIONS OF THE OASIS GROUP, INC.
The operations of The Oasis Group, Inc were comprised of start-up
activities for which all incurred costs have been expensed. Since inception and
through September 30, 2001, Oasis incurred operating losses totaling
approximately $1,000,000, exclusive of accumulated other comprehensive loss of
$217,000, arising from unrealized holding losses on available-for-sale
securities. Therefore, neither Rainwire nor Oasis had any operating revenues
except for interest income earned by Oasis.
14
PRO FORMA EFFECT ON OPERATIONS OF COMBINING THE TWO COMPANIES HAD THE
TRANSACTION OCCURRED AT THE BEGINNING OF THE MOST RECENT FISCAL PERIODS -- YEAR
ENDED DECEMBER 31, 2000 AND NINE MONTHS ENDED SEPTEMBER 30, 2001
Had the two companies been combined for the year ended December 31,
2000 and for the nine months ended September 30, 2001, the pro forma effect
would have been losses from continuing operations during the development stage
of approximately $502,000 (Oasis) and a loss from discontinued operations of
$2,072,000 (Rainwire) for the year ended December 31, 2000. For the nine months
ended September 30, 2001 a loss from continuing operations was $497,000 (Oasis).
The resulting pro forma loss per share for the year 2000 for continuing and
discontinued operation would have been $.03, and $.16, respectively, based on
16,599,082 weighted average number of shares outstanding. Assuming the share
exchange at the beginning of 2000 and for the nine months ended September 30,
2001 the same per share amounts would have been a loss of $.03 for both
classifications based on 16,791,635 weighted average number of shares
outstanding. Previously reported loss per share for Rainwire for the two periods
mentioned were $.24 for discontinued operations for 2000 and $.00 for the nine
months ended September 30, 2001.
The following are the pro forma balance sheets had the two companies
been combined as of the beginning of the year ended December 31, 2000 and the
nine months ended September 30, 2001:
15
PRO FORMA BALANCE SHEETS
DECEMBER 31, 2000
ASSETS
PRO FORMA ADJUSTMENTS
RAINWIRE OASIS PRO FORMA
-------- ----- ---------
CURRENT ASSETS
Cash $2,043 $192 $2,235
Accounts receivable 34,662 34,662
Available-for-sale securities 250,000 250,000
-------------------------- ---------
TOTAL CURRENT ASSETS 36,705 250,192 286,897
-------------------------- ---------
OTHER ASSETS
Deposits 6,257 91,000 97,257
Note receivable 42,573 42,573
-------------------------- ---------
6,257 133,573 139,830
-------------------------- ---------
$42,962 $383,765 $426,727
========================== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $60,000 $15,000 $75,000
Accounts payable 469,517 469,517
Accrued business disposal costs/exp 513,016 513,016
Other accrued liabilities 110,361 110,361
-------------------------- ---------
TOTAL CURRENT LIABILITIES 1,152,894 15,000 1,167,894
-------------------------- ---------
REDEEMABLE PREFERRED STOCK
Par value $.001; authorized
2,500,000 shares
issued 1999 - 24,959 shares 52,913 -- 52,913
-------------------------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock 7,610 822,169(a) $ 813,109 16,670
Paid-in capital 1,321,472 (b) 2,134,581(a) $ 813,109 (0)
Contributed capital 166,000 166,000
Accumulated other comprehensive (loss) (117,000) (117,000)
(Deficit) accumulated since inception (2,491,927) (502,404) (b) 2,134,581 (859,750)
---------------------------- ----------- ----------------------------
(1,162,845) 368,765 2,947,690 2,947,690 (794,080)
---------------------------- ----------- ----------------------------
$ 42,962 $ 383,765 $ 2,947,690 $2,947,690 $ 426,727
============================ =========== ============================
PRO FORMA ADJUSTMENTS AS OF DECEMBER 31, 2000
Results of the stock exchange transaction
(a) 16,669,635 shares outstanding at a par value of $.001 per share or $16,670
(b) elimination of Rainwire's deficit to the extent of paid-in capital
16
PRO FORMA BALANCE SHEETS
SEPTEMBER 30, 2001
ASSETS
PRO FORMA ADJUSTMENTS
RAINWIRE OASIS PRO FORMA
-------- ----- ---------
CURRENT ASSETS
Cash $898 $ 72,673 $ 73,571
Accounts receivable 10,137 (c) $10,137 --
Available-for-sale securities 150,000 150,000
--------------------------- -----------------------
TOTAL CURRENT ASSETS 898 232,810 10,137 223,571
--------------------------- -----------------------
OTHER ASSETS
Deposits 96,000 96,000
Note receivable 43,573 43,573
Accrued interest 1,453 1,453
--------------------------- ---------
141,026 141,026
--------------------------- ---------
$898 $373,836 $10,137 $ 364,597
=========================== =======================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 475,105 $ --(c) $10,137 $464,968
Accrued business disposal costs/expenses 509,612 509,612
Other accrued liabilities 53,613 53,613
--------------------------- ------- ---------
TOTAL CURRENT LIABILITIES 1,038,330 -- 10,137 1,028,193
--------------------------- ------- ---------
REDEEMABLE PREFERRED STOCK
Par value $.001; authorized 2,500,000 shares
issued 1999 - 24,959 shares 52,913 -- 52,913
--------------------------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock 19,910 1,424,039(a) $1,426,664 17,285
Paid-in capital 1,381,672 (b) 2,808,336(a) $1,426,664 --
Contributed capital 166,000 166,000
Accumulated other comprehensive (loss) (217,000) (217,000)
(Deficit) accumulated since inception (2,491,927) (999,203) (b) 2,808,336 (682,794)
---------------------------- ---------- --------------------------
(1,090,345) 373,836 4,235,000 4,235,000 (716,509)
---------------------------- ---------- --------------------------
$ 898 $ 373,836 $4,245,137 $4,235,000 $ 364,597
============================ ========== ==========================
PRO FORMA ADJUSTMENTS AS OF SEPTEMBER 30, 2001
Results of the stock exchange transaction
(a) 17,284,635 shares outstanding at a par value of $.001 per share or $17,285
(b) elimination of Rainwire's deficit to the extent of paid-in capital
(c) intercompany loan eliminated
17
THE ACQUISITION OF OASIS GROUP, INC.
BACKGROUND OF THE OFFER AND THE ACQUISITION
On December 31, 2000, management of Rainwire adopted a plan to
discontinue the operations of Rainwire, liquidate its assets and explore
alternative plans for growth, which included the identification of companies in
markets that had greater growth and profitability potential than the market for
e-business solutions.
Management of Oasis has periodically reviewed its long-term strategic
plans and has periodically considered a wide range of options, including
internal growth strategies, growth through various strategic alliances,
investments, acquisitions or business combinations.
In February, 2001, Rainwire and Oasis began discussions concerning the
use of Rainwire as a reverse merger vehicle to position Oasis in the public
market. These initial discussions did not result in any agreements. After
unsuccessfully exploring similar agreements with other parties, Rainwire
re-entered discussions with Oasis in July, 2001.
On August 29, 2001, Rainwire and Oasis completed negotiations and a
Share Exchange Agreement (the "Non-Binding Share Exchange Agreement") was signed
and approved by Rainwire's and Oasis' respective Board of Directors subject to
the completion of due diligence and exchange of Schedules as outlined in the
Non-Binding Share Exchange Agreement.
Upon execution of the Non-Binding Share Exchange Agreement, Walter H.
Elliott resigned as a director and vice president of Rainwire, and Ronald A.
Potts, Mike McLaughlin and John Hill were appointed to the Board of Directors of
Rainwire. In addition, Ronald A. Potts was appointed President and Chief
Executive Officer of Rainwire and Peggy Evans was appointed Chief Financial
Officer of Rainwire.
Shortly after August 29, 2001, Rainwire and Oasis exchanged due
diligence requirements checklists and began to prepare each other's respective
deliverables.
On November 12, 2001, at the advice of corporate legal counsel, Ronald
A. Potts resigned as President, Chief Executive Officer, Chairman of the Board
and as a director of Rainwire. In addition, Lyne Marchessault resigned as
Secretary and a director of Oasis and John Hill and Michael Mc Laughlin resigned
as directors of Oasis.
During the period between August 29, 2001, and December 18, 2001, there
were numerous telephone calls and meeting between members of senior management
and their legal counsel regarding certain due diligence matters, including, most
notably, the settlement of Rainwire's outstanding liabilities.
On December 18, 2001, legal counsel distributed the final draft of the
Share Exchange Agreement.
On December 19, 2001, the Rainwire and Oasis Board of Directors held
telephonic meetings to consider the proposed agreement, including the new terms
from the Non - Binding Share Exchange Agreement. Prior to the meetings, the
directors were provided with a draft of
18
the Share Exchange Agreement and related documents. Both the Rainwire and Oasis
Board of Directors determined that the transactions contemplated by the Share
Exchange Agreement and related documents were advisable and in the best interest
of their respective companies and stockholders.
On December 19, 2001, the Share Exchange Agreement and related
documents were executed by the parties.
On December 20, 2001, the Share Exchange Agreement and related
documents were approved by a majority of the shareholders of Rainwire by written
consent.
APPROVAL OF THE RAINWIRE BOARD
The Rainwire Board of Directors, on December 19, 2001, unanimously
approved the Share Exchange Agreement and the transactions contemplated thereby,
including the acquisition, and determined that the acquisition, and the
transactions contemplated thereby are in the best interests of Rainwire and its
shareholders. On the Record Date, the Board of Directors as a group held
approximately 48.5% of the voting power of Rainwire.
REASONS FOR THE APPROVAL OF THE RAINWIRE BOARD
In approving the Share Exchange Agreement, the Rainwire Board
considered a number of factors, including, but not limited to, the following:
1. The familiarity of the Rainwire Board with the financial condition,
results of operations, business and prospects of Rainwire.
2. That Rainwire's financial condition, results of operations, business
and prospects make it very doubtful that Rainwire is strong enough to sustain
itself, if this acquisition is not consummated.
3. That Rainwire could not reach an agreement during its discussions
with another party concerning a similar transaction.
4. The Share Exchange gives the shareholders of Rainwire the
opportunity to participate in a unique market.
5. A review by Rainwire's Management of a range of alternative
strategies that might be pursued, the possible values that might be achieved
through those strategies, and Rainwire Board's conclusion that these alternative
strategies entailed increased risk and, in any event, were unlikely to result in
greater value to Rainwire or its shareholders than the acquisition of Oasis on
the terms specified in the Share Exchange Agreement. The Rainwire Board
determined that such terms, including but not limited to, the number of Shares
retained by Rainwire shareholders after the Share Exchange were fair and in the
best interest of Rainwire's shareholders.
19
6. The fact that Oasis could produce audited financial statements and
other information necessary for the filing of this registration statement and
had agreed to pay all fees and expenses associated with this registration
statement.
The foregoing discussion of the information and factors considered and
given weight by Rainwire's Board is not intended to be exhaustive. In view of
the variety of factors considered in connection with its evaluation of the
foregoing, the Rainwire Board did not find it practicable to, and did not,
quantify or otherwise assign relative weights to the specific factors considered
in reaching its determination. In addition, individual members of the Rainwire
Board may have given different weights to different factors.
The Board of Directors of Rainwire has not requested or received, and
will not receive, an opinion of an independent investment banker as to whether
the Share Exchange is fair from a financial point of view to Rainwire and its
shareholders.
APPROVAL OF THE OASIS BOARD
The Oasis Board of Directors, on December 19, 2001, unanimously
approved the Share Exchange Agreement and the transactions contemplated thereby,
including the acquisition of Oasis by Rainwire, and determined that the
acquisition, and the transactions contemplated thereby are in the best interests
of Oasis and its shareholders. On the Record Date, the Board of Directors as a
group held approximately % of the voting stock of Oasis.
REASONS FOR THE APPROVAL OF THE OASIS BOARD
In approving the Share Exchange Agreement, the Oasis Board considered a
number of factors, including, but not limited to, the following:
1. Investor, shareholder and management requests and desires for
liquidity as soon as possible were in the long-term best interest of Oasis and
its business.
2. A reverse merger, and filing of a registration statement under the
1933 Act was in the best interest of its shareholders because such a structure
is well known, universally accepted, and would treat all of its shareholders
equally as they would be able to sell their shares without the expense and
paperwork burden that would be imposed if their stock was not fully registered.
3. The Share Exchange Agreement and its terms, including the fees and
expenses associated with the filing of this registration statement and the
number of shares retained by the Rainwire Shareholders after the Share Exchange,
were in the best interest of the Oasis Shareholders.
The foregoing discussion of the information and factors considered and
given weight by Oasis' Board is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the
foregoing, the Oasis Board did not find it practicable to, and did not quantify
or otherwise assign relative weights to the specific factors considered in
reaching its determination. In addition, individual members of the Oasis Board
may have given different weights to different factors.
20
The Board of Directors of Oasis has not requested or received, and will
not receive, an opinion of an independent investment banker as to whether the
Share Exchange is fair from a financial point of view to Oasis and its
shareholders.
ACCOUNTING TREATMENT
The transaction will be accounted for as a reverse acquisition of the
fair market value of Rainwire's stock by Oasis in accordance with generally
accepted accounting principles. The accounting treatment applied in the reverse
transaction differs from the legal form of the transaction and the continuing
legal parent is Rainwire.
REGULATORY MATTERS
Rainwire does not believe that any material federal or state regulatory
approvals, filings or notices are required by Rainwire or Oasis in connection
with the Share Exchange other than such approvals, filings or notices required
pursuant to federal and state securities laws. Under Delaware law, approval of
the Share Exchange and related Amendments to Rainwire's Certificate of
Incorporation, must be obtained from the shareholders of Rainwire that own a
majority of the outstanding shares. Under Georgia law, approval of the Share
Exchange must be obtained from the shareholders of Oasis that own a majority of
the outstanding shares.
FEDERAL INCOME TAX CONSEQUENCES
The Acquisition and the included transactions contemplated in
connection therewith have been structured with the intent that they be tax-free
to Rainwire Partners, Inc., Oasis Group, Inc. and holders of Rainwire Partners,
Inc. stock for federal income tax purposes. Assuming that the Acquisition
constitutes a tax-free reorganization for federal income tax purposes, the
following are the general federal income tax consequences:
No gain or loss will be recognized by Rainwire, current stockholders of
Rainwire or Oasis in connection with the Acquisition and the included
transactions contemplated in connection therewith.
The receipt of one share of common stock for every twenty share of
common stock held prior to the reverse split as a result of the reverse split by
Rainwire's shareholders should not result in any taxable gain or loss to
stockholders for federal income tax purposes.
In addition, the acquisition may result in the limitation on the use of
net operating losses or the loss of the use of net operating losses of Rainwire
under section 382 of the Internal Revenue Code.
The federal income tax discussion set forth above is included for
general information and may not apply to particular categories of holders of
Oasis stock or options subject to special treatment under the federal income tax
laws, such as foreign holders and holders whose stock or options were acquired
pursuant to the exercise of an employee stock option or otherwise as
compensation. In addition, there may be relevant foreign, state, local or other
tax consequences, which are not described above. The Oasis shareholders are
urged to consult their tax advisors to
21
determine the specific tax consequences of the Acquisition, including the
applicability and effect of foreign, state, local and other tax laws.
GENERAL TERMS OF SHARE EXCHANGE AGREEMENT
The following is a summary of the material provisions of the Share
Exchange Agreement by and between Oasis and Rainwire. This summary does not
purport to be complete and is qualified in its entirety by reference to the
Share Exchange Agreement, which is attached hereto as Annex A.
Exchange and Purchase of Shares
On the terms and subject to the conditions set forth in the Share
Exchange Agreement, at the closing Rainwire shall assign, transfer, and deliver
to the Oasis shareholders, in their pro rata percentages based upon their
percentage ownership of Oasis common stock pre-closing, one (1) share of
Rainwire Common Stock for every 2.5 shares of Oasis common stock held by the
Oasis shareholders. The pre-closing holders of Rainwire Common Stock shall
retain their shares which, immediately following the issuance of Rainwire Common
Stock to the Oasis shareholders in connection with the closing of the
Acquisition shall constitute approximately 5.75% of the fully-diluted shares of
Rainwire Common Stock post-closing. Prior to the Closing, Rainwire will effect a
one-for-twenty reverse split of its issued and outstanding Common Stock and will
subsequently increase its authorized shares of Common Stock of the Company to
One Hundred Million (100,000,000).
Closing
The "Closing" shall mean the consummation of the exchange of shares of
Rainwire Common Stock and shares of Oasis common stock, as well as the
consummation of any other transactions which are included in the Share Exchange
Agreement and required to occur at or before Closing. The Closing shall take
place no later than within three business days following the date upon which all
of the conditions precedent contained in the Share Exchange Agreement have
occurred and all regulatory matters have been complied with.
Representations and Warranties
The Share Exchange Agreement contains various customary representations
and warranties of the parties thereto, without limitation, representations (a)
by Rainwire and Oasis as to their respective corporate status, capitalization,
accuracy of financial statements, the authorization and the enforceability of
the Share Exchange Agreement against each such party, absence of legal
proceedings, the absence of certain changes or events concerning their
respective businesses since September 30, 2001, certain tax matters, certain
employee benefit and pension plan matters, certain environmental matters,
quality of assets, certain labor matters, insurance matters and the absence of
material adverse changes with respect to their material contracts, and (b) by
Rainwire as to its compliance concerning SEC filings. The representations and
warranties contained in the Share Exchange Agreement will survive the Closing.
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Covenants
The Share Exchange Agreement contains various customary covenants of
the parties thereto. A description of certain of these covenants follows.
Conduct of Business Prior to Closing
From December 19, 2001 until Closing, Oasis covenants to, among other
things, except to the extent that Rainwire gives written consent to the
contrary:
(a) operate its business substantially as previously operated
and only in the regular ordinary course;
(b) maintain its assets and properties in good order and
condition;
(c) pay all accounts payable and collect all accounts
receivable in accordance with prudent business practice;
(d) comply with all laws applicable to the conduct of its
business; and
(e) maintain its books and records in the usual, regular, and
ordinary manner, on a basis consistent with past practices.
From December 19, 2001 until Closing, Rainwire covenants that unless
the prior written consent of Oasis shall have been obtained, and except as
otherwise expressly contemplated herein, Rainwire shall and shall cause each of
its Subsidiaries to:
(a) use reasonable commercial efforts to preserve intact its
business organization, licenses, permits, government programs, private
programs and customers; and
(b) notify Oasis of (i) any event or circumstance which has
caused or constituted, or is reasonably likely to have an Rainwire
Material Adverse Effect (as defined in the Exchange Agreement) or would
cause or constitute, a breach of any of Rainwire's representations,
warranties or covenants contained in the Exchange Agreement; or (ii)
any material change in the normal course of business or in the
operation of Rainwire's assets, and of any material governmental
complaints, investigations or hearings (or communications indicating
that the same may be contemplated) or adjudicatory proceedings.
Actions Prior to Closing
From December 19, 2001 until Closing, Oasis covenants not to, among
other things, without prior written consent of Rainwire:
(a) take any action that affects the ability of any party to
obtain its consents to or perform its covenants and agreements under
the Share Exchange Agreement;
23
(b) amend any of its organizational or governing documents;
(c) incur any additional debt or other obligation except in
the ordinary course of business;
(d) repurchase, redeem, or otherwise acquire or exchange Oasis
common stock or issue, sell, pledge or otherwise permit to become
outstanding any additional Oasis common stock;
(e) purchase, acquire, sell or dispose of any assets or
properties, except in the ordinary course of business;
(f) grant any increase in compensation or benefits to the
employees or officers of Oasis, enter into or amend any employment
contract between Oasis and any person or entity, or adopt any new
employee benefit plan or make a material change in or to any existing
employee benefit plan;
(g) make any significant change in any tax or accounting
methods;
(h) commence any litigation other than in accordance with post
practice; or
(i) modify, amend or terminate any material contract.
From December 19, 2001 until Closing, Rainwire covenants and agrees
that neither Rainwire nor any of its Subsidiaries, will do any of the following
without the prior written consent of Oasis:
(a) take any action which would (i) adversely affect the
ability of any party to the Share Exchange Documents (as defined in the
Exchange Agreement) to obtain any consents required for the
transactions contemplated thereby, or (ii) adversely affect the ability
of any party hereto to perform its covenants and agreements under the
Share Exchange Documents;
(b) take any action, or omit to take any action, which would
cause any of the representations and warranties contained in the Share
Exchange Agreement to be untrue or incorrect.
Supplemental Disclosure
From December 19, 2001 until Closing, Rainwire and Oasis covenant that
they each have the continuing obligation to disclose in writing to the other
party any matter or information hereafter arising or becoming known that, if
known on the date of execution of the Agreement, would have been required to be
set forth or listed in a Schedule thereto.
Conditions Precedent
Rainwire and Oasis shall each use its best efforts to satisfy its
respective conditions precedent for Closing.
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Financial Statements
Promptly upon completion of the audits referred to in the Share
Exchange Agreement, Oasis shall deliver to Rainwire copies of its audited
financial statements, at and through December 31, 2000, and copies of its
unaudited financial statements for the period ended September 30, 2001 together
with the notes thereto and the report thereon.
Other Transactions
Rainwire and Oasis shall deal exclusively and in good faith with each
other with regard to the transactions contemplated by the Share Exchange
Agreement and will not (a) solicit submission of proposals, (b) participate in
any discussions or negotiations, or (c) enter into any agreement or
understanding that would have the effect of preventing the consummation of the
transactions contemplated by the Share Exchange Agreement.
Conditions Precedent to Obligations of Rainwire and Oasis to Consummate
the Share Exchange Agreement
The obligation of Rainwire and Oasis to consummate the transactions as
contemplated by the Share Exchange Agreement are subject to the fulfillment and
satisfaction at Closing of, among others, each of the following conditions
precedent, any or all of which may be waived in whole or in part at or prior to
the Closing by the other party.
(a) All information required to be furnished by the parties
pursuant to the Share Exchange Agreement shall have been furnished as
of the Closing Date and such representations and warranties shall be
true and correct in all material respects on and as of the Closing
Date;
(b) Rainwire and Oasis shall have performed and complied in
all material respects with all covenants, agreements and conditions
required by the Share Exchange Agreement to be performed by them prior
to or as of the Closing;
(c) The Share Exchange Agreement and all other documents and
instruments to be delivered in connection therewith, shall have been
approved by a majority of the Rainwire and Oasis shareholders; and
(d) The Form S-4 shall have been declared and effective and no
stop order shall have been issued and no proceedings for that purpose
shall have been initiated or threatened.
Termination
The Share Exchange Agreement may be terminated and the exchange of
stock contemplated hereby may be abandoned at any time prior to the completion
of the Closing: (a) by mutual consent in writing of Rainwire and Oasis; (b) by
either Rainwire or Oasis if any court of competent jurisdiction shall have
issued an order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the exchange of stock and such
order, judgment or decree shall have become final and nonappealable; provided
that the
25
right to terminate the Share Exchange Agreement on this basis shall not be
available to any party whose failure to fulfill any obligation under the Share
Exchange Agreement has been the cause of, or resulted in, the failure of the
Closing to occur; (c) by Rainwire if there has been a material breach of any
covenant or agreement or of a representation or warranty on the part of Oasis
which has not been cured, or adequate assurance (acceptable to Rainwire in its
sole discretion) of cure given, in either case, within 15 business days
following receipt of notice of such breach; (d) by Oasis if (i) there has been a
material breach of any covenant or agreement or of a representation or warranty
on the part of Rainwire which has not been cured, or adequate assurance
(acceptable to Oasis in its sole discretion) of cure given, in either case,
within 15 business days following receipt of notice of such breach or (ii) at
Closing shares of Rainwire Common Stock shall not be listed on the
Over-the-Counter Bulletin Board (OTC:BB) (provided Oasis has made its best
efforts to assist Rainwire in obtaining such listing); or (e) by either Rainwire
or Oasis (and Oasis Shareholders) if either of such party's due diligence
investigation has disclosed the existence of (i) any matter relating to the
other party or its business that is materially and adversely (to the
investigating party) at variance with those matters theretofore disclosed to the
investigating party, or (ii) any matter which, in the investigating party's
reasonable judgment, (A) indicates a material adverse change in the condition,
assets or prospects of the other party, or (B) would make it inadvisable to
consummate the exchange of stock and other transactions contemplated by the
Share Exchange Agreement.
BACKGROUND INFORMATION ON RAINWIRE PARTNERS, INC.
You should read the following summary financial data together with the
discussion in "Rainwire's Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Rainwire's consolidated financial
statements and related notes contained elsewhere in this prospectus/proxy
statement.
The following operational data for the years ended December 31, 2000
and 1999 have been derived from Rainwire's audited consolidated financial
statements, which are contained elsewhere in this prospectus/proxy statement.
The operational data for the nine months ended September 30, 2001 and 2000 and
the balance sheet data as of September 30, 2001 have been derived from
Rainwire's accounting records and have not been audited. This interim data
contains all adjustments, consisting only of those that are of a normal
recurring nature, necessary to present fairly the financial position and results
of operations for the interim reporting periods. Operating results for the nine
months ended September 30, 2001 are not necessarily indicative of results that
may be expected for any future periods.
26
Nine Months Ended Years Ended
September 30, December 31,
------------------------ -----------------------
2001 2000 2000 1999
------- ------- ------- -------
(in thousands, except per share data)
Statement of Operations Data:
Revenue $ 0 $ 0 $ 0 $ 0
Net (Loss) from Continuing Operations 0 0 0 0
Discontinued Operations:
(Loss) from operations of discontinued business
0 (551) (1,495) (419)
Provision for (loss) on disposal of the business
0 0 (578) 0
Net (Loss) Attributable to Shareholders 0 (561) (2,073) (419)
(Loss) Per Share (basic and diluted) (1) $ (0.00) $ (0.09) $ (0.24) $ (0.08)
As of As of
September 30, 2001 December 31, 2000
------------------ -----------------
(in thousands)
Balance Sheet Data:
Cash and cash equivalents $ 1 $ 2
Working capital (deficiency) (1,037) (1,116)
Total assets 1 43
Redeemable preferred stock 53 53
Shareholders' equity (deficit) $(1,090) $(1,163)
(1) Loss per share has been calculated using the weighted average number of
outstanding shares of Rainwire's common stock for the periods presented.
The effect on the loss per share of the exercise of the outstanding stock
options, and other common stock equivalents have not been included as their
effect would be antidilutive.
DESCRIPTION OF BUSINESS
Business Development
The Company was incorporated on May 10, 1991 in Delaware for the
purpose of consolidating the operations of Azimuth, Inc. (a fully accredited
AIHA Industrial Hygiene Laboratory for testing asbestos, metals and organic
vapors) and certain of its former environmental products businesses and
acquiring the assets of four general partnerships which were then leasing real
estate and laboratory and other equipment to Azimuth and the products
27
businesses. The Company formerly had three operating subsidiaries: Trico
Environmetrics, Inc. ("Trico"), Envirometrics Products Company ("EPC") and
Azimuth, Inc.
In 1996, the Company entered into a "Turnaround" phase, and all of the
Company's former operations were divested by the year 2000.
During the course of the Company's "Turnaround" phase, the Company
explored alternative plans for growth that included the identification of
companies in other markets which had greater growth potential than the
Environmental, Health and Safety Market. In September, 1999, the Company was
introduced to The Catapult Group, Inc., a Georgia corporation ("Catapult"),
which was an Internet integration firm offering intelligent end-to-end
e-business solutions to large and middle-market organizations. In February 2000,
the Company and Catapult reached terms that each felt were fair to the parties
and entered into a non-binding agreement whereby the Company would acquire
Catapult, which became binding on March 8, 2000.
Prior to the closing of the Catapult Exchange Agreement, on July 26,
2000, the Company effected a 10:1 reverse split of its outstanding common stock,
issued 5,555,064 shares of its common stock to purchase all of the outstanding
common stock of Catapult, changed its name to The Catapult Group, Inc. and
increased its authorized shares from Ten Million (10,000,000) to Twenty Million
(20,000,000). An amendment to the Company's Certificate of Incorporation
reflecting such changes was filed with the Secretary of State of Delaware on
July 26, 2000. Upon completion of the Catapult Exchange Agreement, Catapult
became a wholly owned subsidiary of the Company and the shareholders of Catapult
became owners of approximately 90% of the outstanding shares of Common Stock of
the Company. The Company subsequently changed its name to Rainwire Partners,
Inc.
On December 31, 2000, management adopted a plan to discontinue the
operations of the Company and to liquidate its assets.
Business of Rainwire
Upon completion of the Share Exchange with The Catapult Group, Inc.,
Rainwire's business became that of an Internet integration firm offering
intelligent end-to-end e-business solutions to large and middle-market
organizations. However, as of December 31, 2000, Rainwire adopted a plan to
discontinue its operations and to liquidate its assets. Additionally, as of that
date, Rainwire began to explore alternative plans for growth, which included the
identification of companies in markets that had greater growth potential than
the market for e-business solutions.
On December 19, 2001, Rainwire entered into a Share Exchange Agreement
with Oasis. Upon completion of the Share Exchange, Rainwire's business will
consist of the business plan of Oasis, which includes the acquiring, owning,
developing and selling of parcels of undeveloped property and a residential
mortgage operation.
28
EMPLOYEES
Presently, Rainwire has no full-time employees other than executive
officers. The Company had 20 employees at December 31, 2000.
PROPERTIES
The following includes each of the principal real properties owned or
leased by Rainwire as of December 31, 2000.
1. 9229 University Boulevard, Charleston, SC (1)
Monthly Base Rental: $5,523.00
2. 4940 Peachtree Boulevard, Suite 350, Norcross, GA (2)
Monthly Base Rental: $3,695.69
3. 4940 665 Pylant Street, Atlanta, GA (3)
Monthly Base Rental: $21,921.00
4. 418 King Street, Suite 301, Charleston, SC (4)
Monthly Base Rental: $3,750.00
Lease Expiration Date: August 31, 2005
(1) Subsequent to December 31, 2000, Rainwire no longer occupied this location.
Rainwire is seeking to mitigate its outstanding lease liabilities.
(2) This lease expired during fiscal year 2000.
(3) Subsequent to December 31, 2000, Rainwire no longer occupied this location.
(4) Rainwire is seeking to mitigate the outstanding lease liability as the
landlord had seized and/or sold some of the equipment in partial
satisfaction of the past due lease rentals.
Until the closing of the Share Exchange, Oasis has agreed to allow
Rainwire to use Oasis' offices on a rent free basis, although the parties have
not entered into a formal agreement.
LEGAL PROCEEDINGS
Rainwire is involved with several legal actions, principally as
defendant. These actions involve outstanding liabilities of Rainwire including
those of subsidiaries. Following are four such actions.
A former landlord has alleged that Azimuth Laboratory, Inc., a
subsidiary of EVRM, is responsible for a hazardous waste cleanup on the leased
premises, and he is seeking recovery of approximately $130,000, including the
cleanup and remaining payments due under the terms of the lease agreement which
is to expire in December, 2001. A motion for summary judgment is expected to be
heard by the end of 2001. Only the remaining lease obligation of $66,271 has
been recorded as of December 31, 2000.
As of December 31, 2000, a demand against Rainwire was made by the
holder of the remaining Series C redeemable preferred stock for $21,666 relating
to the failure by Rainwire to
29
redeem 8,333 of those shares and to pay dividends when due. Substantially all of
that amount was recorded as of December 31, 2000. An action was filed against
Rainwire on April 20, 2001, which was reduced to a judgment on June 25, 2001 in
the amount of $21,665.96.
IOS Capital, Inc. has made a demand to Rainwire for sums defaulted upon
as a result of an equipment lease signed by Rainwire in February, 1997. IOS
Capital indicated that they would compromise the amounts owed for the sum of
$15,479.20 in full satisfaction of the claim; however, Rainwire failed to make
the payment by the required date.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market information
Rainwire's Common Stock has been publicly traded and was initially
quoted on the Nasdaq Smallcap Market ("Nasdaq") under the symbol "EVRM" on
August 12, 1994. Upon the divestiture of the Trico subsidiary Rainwire fell
below the listing requirements of Nasdaq. On December 3, 1996, the Rainwire's
common stock and warrants were delisted from The Nasdaq SmallCap Market and were
subsequently traded on Over the Counter Bulletin Board. On January 4, 1999, the
Securities and Exchange Commission (SEC) approved amendments to NASD Rules 6530
and 6540 to limit quotations on the OTC Bulletin Board(R) ("OTCBB") to the
securities of companies that report their current financial information to the
SEC. On November 18, 1999, Rainwire's common stock and warrants were delisted
from the OTCBB because of failure to have the required SEC periodic filings
submitted by that date. As of that date, price Quotations could be found on
Electronic Pink Sheets (the "Pink Sheets"). On January 28, 2000 Rainwire brought
its filings with the SEC current, thus meeting the requirements for re-listing
on the OTCBB. On March 21, 2000, Rainwire's common stock began trading on OTCBB.
On August 1, 2000, Rainwire received a new symbol from Nasdaq. As of that date,
Rainwire was traded on the OTCBB under the symbol RNWR. In 2001, Rainwire's
common stock was again delisted from the OTCBB because of Rainwire's failure to
file its required SEC periodic filings. On December 19, 2001, the last sale
price of a share of Rainwire's common stock on the Pink Sheets was $0.06.
The following table sets forth the high and low bid prices for the
Common Stock as reported in the trading media and for the periods reflected
above for each fiscal quarter commencing January, 1999 through September 30,
2001. The quotations listed below reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and do not necessarily represent actual
transactions.
30
HIGH LOW
1999
First Quarter 0.187 0.062
Second Quarter 0.375 0.062
Third Quarter 0.375 0.050
Fourth Quarter 0.375 0.005
2000
First Quarter 0.35 0.08
Second Quarter 0.375 0.06
Third Quarter* 4.25 2.00
Fourth Quarter 2.50 0.50
2001
First Quarter 0.50 0.10
Second Quarter 0.10 0.01
Third Quarter 0.15 0.03
* The common stock of Rainwire was consolidated 10 for 1 in July, 2000.
Holders
On December 31, 2000 there were approximately 103 shareholders of
record Rainwire's common stock, based on information provided by Rainwire's
transfer agent. This number may not include individuals whose shares are held in
"street names."
Dividends
Rainwire has never paid dividends on its Common Stock and does not
anticipate that it will do so in the foreseeable future. For the foreseeable
future any future earnings or funds otherwise available, if any, for the payment
of dividends will be used to pay dividends on the outstanding Preferred Stock or
for reinvestment in Rainwire's business. Any future determination to pay cash
dividends on the Common Stock will be at the discretion of the Board of
Directors and will reflect such other factors (including contractual
requirements) as the Board of Directors deem relevant.
As of December 31, 2000, there were 24,959 shares of Series C preferred
stock outstanding valued at $52,913, including accretion of $2,995.
On October 15, 2001, Rainwire's Board of Directors approved the
creation, authorized the issuance, and fixed the designation of 500,000 shares
of Series D Convertible Preferred Stock. On October 15, 2001, Rainwire's Board
of Directors further approved the exchange of 500,000 shares of its Series D
Convertible Preferred Stock for 10,000,000 shares of its common stock.
31
The holders of the Series D Convertible Preferred Stock are entitled to
receive a cumulative dividend at a rate of twelve percent (12%) per annum out of
any assets of Rainwire legally available therefore, when, if and as declared by
the Board of Directors. Dividends are payable on a quarterly basis.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction
with the Consolidated Financial Statements and Notes thereto, included as
Annexes D and E of this Information Statement/Proxy Statement/Prospectus.
General Overview
On July 26, 2000 the former company, Environmetrics, Inc. exchanged
approximately ninety percent of newly issued restricted common stock for all of
the outstanding common stock of The Catapult Group, Inc. On that date, the name
was changed to Rainwire Partners, Inc. for both The Catapult Group, Inc. and the
former company. As of the date of the exchange, the former company's net assets
were written down to a fair market value, as required under generally accepted
accounting principles. The previous historical financial data of The Catapult
Group, Inc. was carried forward since Catapult is considered the accounting
acquirer; therefore the following comments pertain to the historical financial
statements of The Catapult Group, Inc. and i20, Inc., including the net assets
acquired as mentioned above.
Results of Operations
Year ended December 2000 Compared to year ended December 1999
The company lost $419,028 for 1999 compared to a loss of $1,494,708 in
2000. In addition, in 2000 the company recorded a loss on the disposal of the
business of $578,191. The decision was made on December 31, 2000 to discontinue
the operations of the company; accordingly the financial statements for 1999
reflect the operating loss as a discontinued loss for comparative purposes.
The company commenced its operation in July, 1999 and acquired i20,
Inc. in August, 1999. i20, Inc.'s planned operations for the period subsequent
to its purchase was the basis for the company paying approximately $500,000 more
than the fair value of the assets acquired at that date. The loss from
discontinued operations in year 2000, includes not only a write off of the
unamortized balance of Goodwill of approximately $460,000 but unsuccessful
efforts to sustain the business during the period when dot.com companies were
failing. The loss on the disposal of the business in 2000 consists mainly of
forward looking expenses, which were obligation of the company as of December
2000 and obligation incurred as a result of that decision.
Nine Months Ended September 30, 2001 and 2000 (unaudited)
The Company has discontinued all operations as of December 31, 2000,
therefore, the nine month periods for 2001 and 2000 are of discontinued
operations only. As part of the presentation of discontinued operations for the
year 2000, all anticipated expense to be incurred
32
during 2001 with respect to the discontinuation of the business were included as
part of the provision for loss on disposal of the business as of December 31,
2000, therefore, no discontinued operations for the nine months ended September
30, 2001 are applicable. During the same comparable period a year ago, the
consolidated results of discontinued operations was $551,350, as a result of
revenues of $809,345, costs and expenses of $1,364,112 and net financial income
of $3,417.
Nine Months Ended September 30, 2000 and 1999 (unaudited)
The Company's operations began in the third quarter of 1999, and no
operating results were previously presented for that short period from August 4,
1999 (date that 100% of i20, Inc. was acquired) to September 30, 1999. Although
management of the Company may have anticipated that the Company would ultimately
achieve profitability, at no time from inception to date of discontinued
operations and disposal of the business were its operations profitable.
Financial Condition
The company's audit report for the year 2000 discloses a "going"
concern paragraph in reference to the company's concern for continuing its
existence in the future. This concern is highlighted by the fact that the
company has negative working capital of approximately $1,100,000, a deficit
since inception of approximately $2,500,000 and a deficit in stockholders equity
of approximately $1,160,000. There are a number of legal actions against the
company for failure to honor its commitments, which include an obligation of the
company incurred by Environmetrics, Inc., Azimuth Laboratories, Inc.
Nine Months Ended September 30, 2001 and 2000 (unaudited)
As of September 30, 2001, the Company had a deficit in stockholders'
equity of $1,090,345, comprised of total assets-cash of $898, total liabilities
of $1,038,330, and redeemable preferred stock of $52,913. Substantially all
liabilities are past due, and accrued business disposal costs and expenses
included therein include the balance of outstanding lease obligations, some of
which extend beyond 2001. The balance of redeemable preferred stock is also past
due as a result of a demand made by the holder thereof in 2000 and a judgment
awarded him in June, 2001.
To date all obligations have been paid from funds advanced by Oasis
Group, Inc., a company seeking to acquire the controlling interest in the
Company pursuant to the Amended and Restated Plan and Agreement to Exchange
Stock by and between Rainwire and Oasis, dated December 19, 2001.
Nine Months Ended September 30, 2000 and 1999 (unaudited)
As of September 30, 2000, the Company had total assets of $980,766
consisting of current assets of $319,099, substantially notes and accounts
receivable, other assets of $484,676, principally goodwill with an amortized
balance of $460,960 and property and equipment net of accumulated depreciation
of $176,991. Goodwill resulted from the acquisition of i20, Inc. in August,
1999, based on the excess of the value of consideration paid over the fair
market value of the acquired company's net assets.
33
Total liabilities were $752,798 consisting of current liabilities of
$599,532, including accounts payable of $390,403 and notes payable of $100,424,
long term debt of $98,855 and redeemable preferred stock of $54,411. As of
September 30, 2000 there was a negative working capital of $280,433, and a
positive balance in stockholders equity of $227,968.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
Rainwire engaged the firm of Welch, Roberts & Amburn, LLP to conduct
the audits of its financial statements for the years ended December 31, 1999,
and 1998. Welch, Roberts & Amburn, LLP, resigned on May 31, 2001 due to
outstanding and past due fees owed by Rainwire.
In connection with Welch, Roberts & Amburn, LLP's audits of the
financial statements of Rainwire, there were no disagreements with Welch,
Roberts & Amburn, LLP on any matter of accounting principles, financial
disclosure, or auditing scope or procedures, which disagreements if not resolved
to their satisfaction would have caused them to make reference in connection
with their opinion to the subject matter of the disagreement.
The audit reports of Welch, Roberts & Amburn, LLP on the consolidated
financial statements for the years ended December 31, 1999, and 1998 did not
contain any adverse opinion or disclaimer of opinion; however, the unqualified
opinion contained a fourth paragraph with respect to an emphasis of a paragraph
discussing recurring losses from operations and decreases in working capital
issues confronting Rainwire.
Rainwire had also engaged the firm of Tauber & Balser, P.C. in
connection with the audit of the consolidated balance sheet of The Catapult
Group, Inc., and Subsidiary as of December 31, 1999, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the period from July 21, 1999 (inception) to December 31, 1999.
In connection with the audit as of December 31, 1999, and for the
period from July 21, 1999 (inception) to December 31, 1999, there was no
disagreement with Tauber & Balser, P.C. on any matter of accounting principles,
financial disclosure, or auditing scope or procedures, which disagreement if not
resolved to their satisfaction would have caused them to make reference in
connection with their opinion to the subject matter of the disagreement.
The audit report of Tauber & Balser, P.C. on the consolidated financial
statements for the year ended December 31, 1999 was issued with an unqualified
opinion.
On or about September 9, 2001, Rainwire notified Tauber & Balser, P.C.
that it had engaged the firm of Braverman & Company, P.C., to conduct the audit
of its financial statements for the year ended December 31, 2000.
RAINWIRE'S MANAGEMENT AND EXECUTIVE COMPENSATION
Directors and Executive Officers
The following table sets forth all the directors, executive officers
and significant employees of Rainwire as of December 19, 2001. In March, 2001,
Bryan M. Johns resigned as
34
an officer and director of Rainwire. On August 29, 2001, Walter H. Elliott, III
resigned as an officer and director of Rainwire. On August 29, 2001, Ronald A.
Potts was appointed to the Board of Directors and as President and Chief
Executive Officer. Mr. Potts resigned from all of these positions on November
12, 2001. On November 12, 2001, Lyne Marchessault was appointed President of
Rainwire and Michael McLaughlin was appointed Assistant Secretary.
NAME AGE POSITION
Lyne Marchessault 43 President, Secretary and Director
Peggy Evans 54 Chief Financial Officer
Michael McLaughlin 58 Assistant Secretary and Director
John Hill 55 Director
Lyne Marchessault, President, Secretary and Director. Ms. Marchessault
was elected to our Board of Directors and appointed Secretary in July, 2000. Ms.
Marchessault was appointed President of Rainwire on November 12, 2001. In
addition, in August, 2001, Ms. Marchessault was elected to the Oasis Board of
Directors, a position which she resigned from in November, 2001. From 1996 until
January, 1998 Ms. Marchessault was the Director of International Marketing and
Public Relations for Ultimate Technographics. From January, 1998 until the
present, Ms. Marchessault has been the managing member of Osprey Investments,
LLC. Ms. Marchessault holds a Marketing degree from Concordia University and a
Masters in Business Administration from McGill University.
Peggy Evans, Chief Financial Officer. Ms. Evans was appointed as our
Chief Financial Officer in August, 2001. Since October 1, 2000, Ms. Evans has
been the Chief Financial Officer for Oasis Group, Inc. Prior to that time, Ms.
Evans served as the President of Yakley Management, Inc. and the Chief Operating
Officer of Eston Hospitality, LLC. Ms. Evans holds a B.S. degree in business
from Pepperdine University.
Michael McLaughlin, Director. Mr. McLaughlin was elected to our Board
of Directors in August, 2001, and appointed Assistant Secretary in November,
2001. In addition, Mr. McLaughlin was elected to the Oasis Board of Directors in
August, 2000, a position which he resigned from in November, 2001. For the last
14 years, Mr. McLaughlin has been the owner and President of American Flooring,
Inc. Mr. McLaughlin holds a bachelors degree in business from Florida Atlantic
University.
John Hill, Director. Mr. Hill was elected to our Board of Directors in
August, 2001. In addition, Mr. Hill was elected to the Oasis Board of Directors
in July, 2000, a position which he resigned from in November, 2001. From 1996
until 1998, Mr. Hill was a Divisional Claims Superintendent with State Farm Fire
& Casualty Company and from 1998 until the present, Mr. Hill has been a Section
Manager with State Farm. Mr. Hill holds a B.S. in Business Administration degree
from the University of Tennessee.
Directors hold office until the next annual meeting of shareholders.
Officers are elected by the Board of Directors following the Annual meeting of
stockholders.
35
Disposition of Current Operations
On December 31, 2000, management adopted a plan to discontinue the
operations of Rainwire and to liquidate its assets.
Certain Relationships and Related Transactions
In connection with the Non-binding Share Exchange Agreement executed in
August, 2001, Rainwire issued 12,000,000 shares of its common stock to Osprey
Investments, LLC (Lyne Marchessault, our President, Secretary and a director, is
the sole member) in satisfaction of loans in the principal amount of $60,000. In
addition, in October, 2001, Rainwire exchanged 500,000 of its Series D
Convertible Preferred Stock for 10,000,000 shares of its common stock owned by
Osprey. Ms. Marchessault abstained from the Board of Directors vote concerning
this exchange of shares.
Rainwire's officers and directors have ownership interests in Oasis.
Lyne Marchessault, our President, Secretary and a director, beneficially owns
approximately 4.6% of the outstanding common stock of Oasis. Additionally, Peggy
Evans, our newly appointed Chief Financial Officer, owns approximately 4.3% of
the outstanding common stock of Oasis and John Hill and Mike McLaughlin, newly
appointed directors each own less than 1.0% of the outstanding common stock of
Oasis.
In 2001, Oasis has loaned Rainwire approximately $150,000 to date, of
which Rainwire has paid $31,562.86. As of December 31, 2000, Rainwire had loaned
Oasis $12,700.
In connection with the Share Exchange Agreement, Rainwire moved its
business address to the offices of Oasis. Until the closing of the Share
Exchange, Oasis has agreed to allow Rainwire to use Oasis' offices on a rent
free basis, although the parties have not entered into a formal agreement.
Committees and Meetings
The Board of Directors held meetings during 2000. No director of
Rainwire during the last fiscal year failed to attend any of the meetings of
Rainwire's Board of Directors.
Executive Compensation
The compensation paid in 1999 and 2000 to the Chief Executive Officer
of Rainwire and to the President of Rainwire is set forth in the table below. No
other executive officer or any officer of a subsidiary had total compensation
that exceeded $100,000.
36
2000 SUMMARY COMPENSATION TABLE
RAINWIRE
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
AWARDS PAYOUTS
NAME AND OTHER ANNUAL RESTRICTED OPTIONS LTIP ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION STOCK SARs PAYOUT COMPENSATION
POSITION YEAR ($) ($) ($) AWARDS (#) ($) ($)
----------------------------------------------------------------------------------------------------------------------------
Bryan Johns 2000 $102,000 0 $7,200 0 0 0 0
President and 1999 $-0- 0 0 0 0 0 0
CEO (1)
Walter H. Elliott 2000 $91,249 0 0 0 0 0 0
President and 1999 $75,000 0 0 93,174(3) 150,000(4) 0 0
CEO (2)
(1) Mr. Johns entered into an employment agreement with Rainwire on July
26, 2000, which paid him an annual salary of $102,000 and an annual car
allowance of $7,200. Mr. Johns resigned as President and Chief
Executive Officer in March, 2001.
(2) Mr. Elliott resigned as President and Chief Executive Officer in July
2000. Mr. Elliott's salary was $85,000 per year until his resignation
in July, 2000. On July 26, 2000, Mr. Elliott entered into an employment
agreement with Rainwire that paid him an annual salary of $100,000. Mr.
Elliott's year 2000 salary reflects a prorated salary for each portion
of 2000.
(3) Represents shares of stock issued in lieu of salary for 1997 and 1998
when Mr. Elliott's salary was cut from $85,000 annually to $59,500.
This number does not reflect the 10:1 reverse stock split that occurred
in connection with the Catapult Share Exchange in July, 2000.
(4) Represents stock options granted in December, 1999. This number dos not
reflect the 10:1 reverse stock split that occurred in connection with
the Catapult Share Exchange in July, 2000.
There were no options granted to the Executive Officers of Rainwire and
its subsidiaries during the year ending December 31, 2000. The Company has no
stock appreciation rights ("SARs") outstanding.
Employment Agreements
On July 26, 2000, Rainwire entered into employment agreements with
Bryan M. Johns, President and Chief Executive Officer, and Walter H. Elliott,
Vice President. Mr. Johns resigned in March, 2001, and Mr. Elliott resigned in
August, 2001.
Options Granted
A number of options were granted during 2000 at $1.00 per share,
post-split, however, that information is not presently available, but all
options will expire within one year from the date of issuance, in the opinion of
legal counsel.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding shares of our
Common Stock beneficially owned as of December 19, 2001. Beneficial ownership is
calculated in accordance with Rule 13d-3(d) under the Securities Exchange Act of
1934. As used in the table below, a beneficial owner includes any person who
directly or indirectly, through contract, arrangement, understanding,
relationship or otherwise has or shares (a) the power to vote, or direct the
voting, of such security or (b) investment power which includes the power to
dispose, or to direct the disposition of, such security. In addition, a person
is deemed to be the beneficial owner of a security if that person has the right
to acquire beneficial ownership of such security within
37
60 days. Unless otherwise indicated, each person possesses sole voting and
investment power with respect to the shares identified as beneficially owned.
Except as otherwise indicated in the table, the address of the stockholders
listed below is that of Rainwire's principal executive office. Directors not
included in the table below do not hold Rainwire securities.
SHARES BENEFICIALLY OWNED
AS OF DECEMBER 19, 2001
NAME AND ADDRESS NUMBER PERCENT
Lyne Marchessault (1) 12,231,461 61.4%
Osprey Investments, LLC (2) 12,231,461 61.4%
Monteith Commons, First Floor
2931 Piedmont Road, N.E.
Atlanta, GA 30305
Bryan M. Johns (3) 1,296,182 6.5%
Arnold Johns (4) 1,064,721 5.3%
320 Cameron Ridge Drive
Atlanta, GA 30328
Anguilla Equity Partners, Inc. 1,481,350 7.4%
Keithley F.T. Lake
The Law Building,
The Valley Anguilla, BWI
(1) Includes 12,231,461 shares owned by Osprey Investments, LLC of which
Ms. Marchessault is the Sole Member.
(2) Includes 2,231,461 shares of common stock and 500,000 shares of Series
D Convertible Preferred Stock currently convertible into 10,000,000
shares of common stock.
(3) Mr. Johns resigned as an officer and director in April, 2001.
(4) Includes 648,091 shares owned by Cambridge Capital, LLC.
BACKGROUND INFORMATION ON OASIS GROUP, INC.
You should read the following unaudited financial information with
respect to Oasis Group, Inc., for the period ended September 30, 2001 together
with the discussion in Oasis' "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Oasis' audited financial statements for
the year ended December 31, 2000, included herein as Annex F.
38
THE OASIS GROUP, INC.
(A Development Stage Company)
BALANCE SHEET
SEPTEMBER 30, 2001
(unaudited)
ASSETS
Current Assets
Cash $ 72,673
Advances to related party 10,137
Available-for-sale securities 150,000
-----------
TOTAL CURRENT ASSETS 232,810
-----------
Other Assets
Deposits/Advances 96,000
Note receivable 43,573
Accrued interest 1,453
-----------
141,026
-----------
$ 373,836
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
TOTAL CURRENT LIABILITIES $ --
-----------
Commitments and Contingencies
Stockholders' Equity
Common stock, no par value;
50,000,000 shares authorized;
33,100,500 shares outstanding 1,424,039
Contributed capital 166,000
Accumulated other comprehensive (loss) (217,000)
(Deficit) accumulated during the development stage (999,203)
-----------
TOTAL STOCKHOLDERS' EQUITY 373,836
-----------
$ 373,836
===========
The accompanying notes are an integral part of these financial statements.
39
THE OASIS GROUP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS)
(unaudited)
NINE MONTHS NOVEMBER 16, 1999
ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30,
2001 2000 2001
----------- ----------- -----------
Revenues $ 2,453 $ -- $ 2,453
----------- ----------- -----------
General and administrative expenses 499,252 419,404 1,001,656
----------- ----------- -----------
NET (LOSS) $ (496,799) $ (419,404) $ (999,203)
OTHER COMPREHENSIVE (LOSS)
Unrealized holding loss on available-for-sale securities (100,000) (117,000) (217,000)
----------- ----------- -----------
COMPREHENSIVE (LOSS) $ (596,799) $ (536,404) $(1,216,203)
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
40
THE OASIS GROUP, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(DEFICIT)
ACCUMULATED ACCUMULATED
OTHER DURING THE
COMMON STOCK CONTRIBUTED COMPREHENSIVE DEVELOPMENT
SHARES AMOUNT CAPITAL (LOSS) STAGE TOTAL
------ ------ ------- ------ ----- -----
(AUDITED)
BALANCE, November 16, 1999 $ -- $ -- $ -- $ --
Issuance of stock July 15, 2000,
for:
Cash 2,250,000 309,169 309,169
Acquisition of securities 800,000 367,000 367,000
Services 26,000 26,000 26,000
Proceeds from sale of common
stock, September 30, 2000 150,000 120,000 120,000
Contributed services 166,000 166,000
Net (loss) for the year (117,000) (502,404) (619,404)
---------- ------------ ------------ ------------ ------------ ------------
BALANCE, December 31, 2000 3,226,600 $ 822,169 $ 166,000 $ (117,000) $ (502,404) $ 368,765
(UNAUDITED)
Issuance of stock for cash:
March 31, 2001 26,000 2,500 2,500
June 30, 2001 311,500 60,000 60,000
August 15, 2001 600,000 250,000 250,000
Issuance of stock for services 28,937,000 289,370 295,310
Net (loss) for the nine months
ended September 30, 2001 (100,000) (496,799) (596,799)
---------- ------------ ------------ ------------ ------------ ------------
BALANCE, September 30, 2001
(unaudited) 33,100,500 $ 1,424,039 $ 166,000 $ (217,000) $ (999,203) $ 373,836
========== ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
41
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NOVEMBER 16,
1999
(INCEPTION) TO
SEPTEMBER 30,
NINE MONTHS ENDED SEPTEMBER 30, 2001
------------------------------- -------------
OPERATING ACTIVITIES
2001 2000
--------- ---------
Net (loss) from operations $(496,799) $(496,799) $(999,203)
Adjustments to reconcile net (loss) to
net cash used by operating
activities:
Issuance of stock for services 289,370 26,000 315,370
Contributed Capital 115,000 166,000
Increase in accrued interest (1,453) (1,453)
Increase in note receivable (1,000) (1,000)
--------- --------- ---------
Net Cash Flow (To) Operating
Activities (209,882) (278,404) (520,286)
--------- --------- ---------
INVESTING ACTIVITIES:
Note receivable (42,573) (42,573)
Deposits/Advances (15,137) (66,000) (106,137)
--------- --------- ---------
Net Cash Flows (To) Investing
Activities (15,137) (108,573) (148,710)
--------- --------- ---------
FINANCING ACTIVITIES
Proceeds from sale of common stock 312,500 429,169 741,669
Increase (Decrease) in note payable (15,000) 15,000
--------- --------- ---------
Net Cash Flows From Financing Activities 297,500 444,169 741,669
--------- --------- ---------
NET INCREASE IN CASH 72,481 57,192 72,673
CASH, BEGINNING OF PERIOD
192 -- --
--------- --------- ---------
CASH, END OF PERIOD $ 72,673 $ 57,192 $ 72,673
========= ========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING ACTIVITIES
Acquisition of available-for-sale
securities for common stock $ 367,000
=========
The accompanying notes are an integral part of these financial statements.
42
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPANY BACKGROUND
Oasis Group, Inc. (the Company or Oasis), formerly Oasis Communities, Inc. is a
Georgia corporation formed November 16, 1999, to develop residential and
commercial real estate projects. It has a fiscal year-end of December 31 and is
a development stage company, as defined in SFAS No. 7, since its operations have
not commenced and it has not earned any significant revenues. There were no
transactions during 1999.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent amounts in the Company's financial statements and
the accompanying notes. Actual results could differ from those estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with the original maturities
of three months or less to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, Disclosures about fair
value of financial instruments, defines the fair value of a financial instrument
as the amount at which the instrument could be exchanged in a current
transaction between willing parties. The carrying values of the Company's
financial instruments, which include cash, note receivable and an unsecured
related party loan, approximate fair values due to the short maturities of such
instruments.
INCOME TAXES
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". A deferred tax asset or liability is recorded for all
temporary difference between financial and tax reporting of which depreciation
is the most significant. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to more likely than not be realized in future tax returns. Tax
law and rate changes are reflected in income in the period such changes are
enacted.
43
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
For financial reporting purposes, the Company has sustained a loss for 2000 of
approximately $502,000. For income tax purposes approximately $312,000 is
considered start-up costs, and the balance, comprised of $166,000 of contributed
capital and meals and entertainment of $24,000, constitutes a non-deductible
permanent difference. Start-up costs are not deductible until the Company
commences operations, at which time they are amortized over a 60-month period,
or permanently capitalized if no election is timely made to amortize them.
The Company's future utilization of the deferred tax benefit arising from the
deferral of start-up costs of approximately $110,000 cannot be currently
ascertained. Accordingly, a valuation allowance of approximately $110,000 has
been provided resulting in no recorded tax benefit as of December 31, 2000.
For the nine months ended September 30, 2001, the Company incurred a net loss of
$496000, of which $489,000 is considered deferred as start-up costs for income
tax purposes and the balance a permanent difference. The tax benefit of this
current loss of $171,000 has been offset by a valuation allowance of $171,000
since management believes it is more likely than not that the tax benefit
accumulated to date is not currently usable by the Company.
BASIS OF PRESENTATION AND MANAGEMENT'S ACTIONS TO OVERCOME OPERATING AND
LIQUIDITY PROBLEMS
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company's ability to
continue in existence is dependent on its ability to develop additional sources
of capital, and/or achieve profitable operations. The accompanying financial
statements do not include any adjustments that might result from the outcome of
these uncertainties. Management's plan is to raise additional debt or equity
financing and to begin operations in the near term, which are anticipated to be
sufficient to provide the necessary cash flow requirements for the Company.
44
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
NOTE 2 - DEPOSITS/ADVANCES
REAL ESTATE VIDEO PORTAL
An advance payment of $25,000 was made by the Company for the exclusive
development of a web-based "real estate video portal" on a cost-plus 15 percent
fixed-fee basis. An additional mobilization fee of $25,000 is required upon the
execution of a formal agreement with the software developer. All funds advanced
will be credited against the cost of the project and are non-refundable.
STOCK EXCHANGE TRANSACTIONS
The Company agreed to acquire all of the outstanding stock of Landmark Mortgage
Corporation, a Louisiana corporation (Landmark) and Statewide Mortgage and
Investment Corp., a Florida corporation (Statewide) for 1,370,000 shares of
Oasis common stock and the sum of $50,000, which will be applied towards certain
expenses pursuant to a non-binding letter of intent dated October 2000. Oasis
agreed to make $50,000 available for the financing of additional property that
Landmark anticipates acquiring at a purchase price of approximately $220,000.
Oasis advanced $71,000 in connection with this stock exchange transaction as of
September 30, 2001. The closing of this acquisition is expected to occur on or
before January 31, 2002, pursuant to a binding amendment entered into on
December 14, 2001.
PURCHASE OF REAL ESTATE
In February 2001 Oasis agreed to purchase from an unrelated party, undeveloped
land located in California and Arizona for $4,000,000, including a promissory
note for $3,000,000 for a 6 year term, with 6 percent interest for the first 12
months and at the prime rate thereafter not to exceed 8% or be less than 6%. If
the property appraises for more than $12,000,000 within 60 days of closing,
Oasis will issue an additional promissory note for the fair market value of the
property exceeding $12,000,000 multiplied by a factor of 0.35. The additional
note shall be for a term of six years, with interest at 4 percent per annum for
the first 2 years and 6 percent per annum, thereafter. Brokerage commissions are
payable in addition to the above purchase price.
NOTE 3 - AVAILABLE-FOR-SALE SECURITIES
Available-for-sale securities are recorded at fair value in investments on the
balance sheet, with the change in fair value during the period excluded from
results of operations, and recorded net of tax as a separate component of equity
(accumulated other comprehensive income). The following summarizes the
information relating to available-for-sale securities as of September 30, 2001:
45
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
NOTE 4 - AVAILABLE-FOR-SALE SECURITIES (continued)
Market value at September 30, 2001 $ 150,000
Market value at December 31, 2000 250,000
----------------
Unrealized holding loss in 2001 $ (100,000)
================
The unrealized holding loss for the nine months ended September 30, 2000 $ (117,000)
================
The Company utilizes the specific identification method of computing realized
gains and losses from the sales of its available-for-sale securities. Realized
losses from the sale of securities are shown in the other income section of the
income statement, and proceeds from the sale of securities are shown in the
statement of cash flows.
NOTE 5 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following is a summary of the activity from inception in accumulated other
comprehensive income (loss):
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, at inception $ 0
OTHER COMPREHENSIVE (LOSS)
unrealized holding losses on available-for-sale securities in 2000 (117,000)
unrealized holding losses on available-for-sale securities in 2001 (100,000)
---------------
ACCUMULATED OTHER COMPREHENSIVE (LOSS)
Ending balance, September 30, 2001 $ (217,000)
===============
NOTE 6 - CONTRIBUTED CAPITAL
Management of the Company has contributed its services to the Company during
2000 with an assigned value of $158,500 ($112,000 as of September 30, 2000). It
also contributed the value of rent, utilities and related overhead during 2000
amounting to $7,500 ($3,000 as of September 30, 2000).
NOTE 7 - SUBSEQUENT EVENTS
PURCHASE OF REAL ESTATE
On November 27, 2001, the Company executed a restated first amendment to the
February 2001 agreement for the purchase of real estate from an unrelated party,
resulting in the payment to the escrow agent of $10,000 by Oasis.
46
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
NOTE 7 - SUBSEQUENT EVENTS (continued)
STOCK EXCHANGE TRANSACTION
On December 19, 2001, the Oasis Board of Directors approved a share exchange
with Rainwire Partners, Inc. (Rainwire) in which all of the outstanding shares
of the Company would be exchanged for 16,289,141 newly issued shares of
Rainwire, representing 94.25% of the outstanding shares of Rainwire on a fully
diluted basis. The share exchange transaction would be exempt from income taxes
pursuant to the reorganization provisions of the Internal Revenue Code. After
the exchange, the Oasis shareholders would own the majority of the outstanding
shares of Rainwire. For legal purposes, Rainwire, a public company, would be the
parent, for accounting purposes the acquirer would be Oasis. The share exchange
is subject to shareholder approval among other conditions.
BINDING LETTER OF INTENT
In December 2001, the Company entered into a binding letter of intent to form a
joint investment for the development of a Florida real estate project in which
the Company is to receive a 55 percent member interest in a newly formed limited
liability company, Oasis Lost Key Island Resort, LLC in exchange for funding of
$25,000,000. A bridge loan for $3,500,000 is expected to be obtained by the
Company in January 2002.
47
DESCRIPTION OF BUSINESS
Oasis is a privately-held Georgia corporation, which was formed in
November, 1999. Oasis business plan includes the acquiring, owning, developing
and selling of parcels of undeveloped property. Upon obtaining undeveloped
property, Oasis activities may consist of selling the undeveloped land to other
developers or investors, selling improved land to residential or commercial
builders, or participating in joint ventures with other developers, investors or
residential or commercial builders to finance and construct infrastructure,
homes and other buildings. Oasis intends for its niche to include golf course
residential communities and resort developments. Oasis' business plan also
includes a residential mortgage operation.
REAL ESTATE DEVELOPMENT
To date, Oasis' real estate development activities have included only
the negotiation of and entering into of various agreements for the purchase of
real estate in various stages of development. A description of the agreements to
which Oasis is a party are included herein under "Background Information on
Oasis Group, Inc. - Oasis Group, Inc. Agreements."
RESIDENTIAL MORTGAGE OPERATIONS
On December 14, 2001, Oasis entered into a binding letter of intent to
acquire all of the outstanding stock of Landmark Mortgage Corporation, a fully
licensed wholesale mortgage lender based in New Orleans, Louisiana, and all of
the outstanding stock of Statewide Mortgage and Investment Corp., a fully
licensed wholesale mortgage lender based in Pensacola, Florida. A description of
the terms of the letter of intent is included herein under "Background
Information on Oasis Group, Inc. - Oasis Group, Inc. Agreements."
OASIS GROUP, INC. AGREEMENTS
In connection with Oasis' business plan, Oasis is in the various stages
of negotiation concerning the purchase of undeveloped property and other
agreements. The following is a summary of the material terms and provisions of
two agreements to which Oasis is a party.
REAL ESTATE SALE AND PURCHASE AGREEMENT -- HORNAK
In February 2001, Oasis entered into an agreement with Mrs. Libuse
Hornak for the purchase of undeveloped land located in California and Arizona.
The parties executed a Restated First Amendment to this Agreement on November
27, 2001.
Purchase Price
In consideration for the Property, Oasis agreed to pay Hornak the sum
of Four Million Dollars ($4,000,000) as follows: (a) At the Closing, Oasis shall
pay Hornak the sum of One Million Dollars ($1,000,000) less the Earnest Money,
and (b) at the Closing, Oasis shall deliver to Hornak a Promissory Note in the
amount of Three Million Dollars ($3,000,000), which will be secured by a Deed of
Trust covering certain parcels of property to be identified prior to the Closing
and shall be for a term of six (6) years and bear interest at a rate of 6% for
the first 12 months and at the prime rate thereafter not to exceed 8% or be less
than 6%.
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Within 60 days after the Closing, Oasis shall obtain an appraisal to
determine the fair market value of the entire Property. If the fair market value
exceeds $12,000,000, Oasis shall issue to Hornak an additional Promissory Note
equal to the amount by which the fair market value exceeds $12,000,000
multiplied by a factor of 0.35. The Note will be secured by a Deed of Trust and
shall be for a term of six years and shall bear interest at a rate of 4% for the
first two years and 6% thereafter.
Feasibility Period
The Feasibility Period begins upon receipt of all of the Due Diligence
Information by Purchaser and lasts for the greater of (a) ninety (90) days; or
(b) thirty days from the expiration of any appeal periods after the execution of
a development agreement.
Earnest Money
On the Effective Date of Agreement, Oasis deposited $10,000 with the
Escrow Agent. Upon expiration of the Feasibility Period, Oasis shall deposit an
additional $90,000 with the Escrow Agent.
Survey
During the Feasibility Period, Oasis had the right to enter onto the
Property and to have a new survey of the prepared or to have Hornak's survey of
the Property updated at Oasis' expense.
Title
Hornak shall convey to Oasis at the Closing good and marketable fee
simple title in and to the Property.
Property Inspection
Oasis and its agents have the right during the Feasibility Period to
enter the Property at reasonable times for the purpose of inspecting the
Property.
Representations and Warranties of Hornak
The Agreement contains various customary representations and warranties
by Hornak concerning Hornak's right, title and interest in the property and the
absence of any litigation, assessments or liens against the Property.
Representations and Warranties of Oasis
The Agreement contains various customary representations and warranties
of Oasis concerning its corporate status and authority to enter into the
Agreement.
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Covenants
From the Effective Date of the Agreement until the Closing, Hornak
covenants to:
(a) Maintain the Property and any existing insurance coverage;
(b) Not contract to convey or voluntarily encumber the Property or
enter into any contract that will be an obligation affecting the Property; and
(c) Cooperate with, and assist Oasis, in obtaining access to
governmental agencies having authority concerning the development of the
Property.
Brokerage Commissions
The parties shall pay all Brokerage Commissions at the Closing.
STOCK ACQUISITION AGREEMENT WITH LANDMARK MORTGAGE CORPORATION AND STATEWIDE
MORTGAGE AND INVESTMENTS CORP.
In October, 2000, Oasis entered into a non-binding letter of intent to
acquire all of the shares of outstanding stock of Landmark Mortgage Corporation,
a Louisiana corporation ("Landmark") and Statewide Mortgage and Investments
Corp., a Florida corporation ("Statewide"). On December 14, 2001, the parties
executed a binding Amendment to the non-binding letter of intent.
Closing
The Closing of the Stock Acquisition Agreement is expected to occur on
or before January 31, 2002.
Refinancing
Oasis agrees to use its best efforts to refinance, within a
commercially reasonable time after the Closing and on terms acceptable to Oasis,
certain real property owned by Landmark and Statewide located in Louisiana and
Florida. The total current outstanding balance on the two properties is
approximately $335,000 and the estimated total fair market value for the two
properties is approximately $530,000. In addition, Oasis agrees to make $50,000
available for the financing of additional property that Landmark anticipates
acquiring at a purchase price of approximately $220,000.
Debt and Third Party Guarantees
At the Closing, Oasis shall pay $50,000 to a third party in partial
satisfaction of a Promissory Note entered into by Landmark.
It is expressly understood by the parties that, except to the extent
specifically contemplated with respect to the mortgage liabilities, Oasis shall
not acquire any of the debts, liabilities or obligations arising out of the
operation of Landmark or Statewide.
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Purchase Price
Oasis shall issue to the shareholders of Landmark and Statewide on the
Closing Date a total of 1,370,000 shares of Oasis common stock and the sum of
$50,000, which will be applied towards certain expenses.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
There is no public trading market for Oasis' common stock.
Holders
On December 19, 2001 there were approximately 77 shareholders of
record of Oasis' common stock.
Dividends
Oasis has never paid dividends on its common stock and does not
anticipate that it will do so in the foreseeable future.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
General Overview
Oasis is a privately-held, development stage, Georgia corporation,
formed in November 1999. Its business plan includes acquiring, owning,
developing and selling undeveloped property either through direct ownership of
the properties, or through the acquisition of entities owning such properties.
From inception through September 30, 2001, Oasis provided substantially all of
its resources through the sale or issuance of its own common stock, of which
3,337,500 shares were issued for cash of $741,669; 800,000 shares in exchange
for securities valued at $367,000; and the balance of 28,963,000 for services
valued by the Board of Directors at $315,370, for a total capitalization as of
September 30, 2001 of 33,100,500 shares outstanding, with total consideration of
$1,424,039.
During 2001 the Company investigated numerous business opportunities
including the pending stock exchange transaction with Rainwire Partners, Inc.
(Rainwire), a public company, all of whose operations were discontinued as of
December 31, 2000. If the Rainwire stock exchange is completed, Oasis will own
the majority of its outstanding common stock. Oasis had advanced $10,137 as of
September 30, 2001, to Rainwire to meet some of the obligations of Rainwire, and
continues to advance Rainwire funds to enable it to meet its financial reporting
obligations to the Securities and Exchange Commission.
Several of the other businesses investigated by Oasis resulted in
pre-merger agreements which provide for the potential acquisition of undeveloped
real estate in several states, and two companies owned by the same interests,
which are involved in making mortgage loans secured by real estate, which in
turn are brokered to permanent lenders.
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Results of Operations
Year Ended December 31, 2000
The year ended December 31, 2000 was the first year the Company had
any operations although it was incorporated in 1999. During 2000, the Company
incurred a loss (start-up expenses) of approximately $502,000 of which travel
accounted for 49%, and services provided by management, which were contributed
to the Company, accounted for 33%. The balance, attributed to several
classifications, included consulting, 12% and legal fees, 3%. There was a
decline in the value of securities acquired in July 2000 of $117,000, which was
classified as an other comprehensive loss and was excluded from the
determination of the above net loss since the decline in value was attributed to
an unrealized holding loss which is classified as a separate account,
accumulated other comprehensive loss, in the accompanying balance sheet as of
December 31, 2000.
Nine Months Ended September 30, 2001 and 2000
During the nine months ended September 30, 2001, Oasis generated a
loss of approximately $497,000, which was incurred pursuing the development
stage activities of Oasis, principally for the search for viable real estate
projects, operating companies and the near finalization of the stock exchange
agreement with Rainwire. Included in this loss were approximately 40% for
outside services, 40% for management services, and the balance of 20% for mostly
travel. In addition, the value of the securities acquired in July 2000,
decreased $100,000 to a value of $150,000. Except for $2,453 of interest earned
on a note receivable there were no other earned revenues.
During the same nine-month period in 2000, Oasis incurred a loss of
$419,000, of which management services contributed to the company totaled 27%,
and travel totaled 45%. The balance, attributed to several classifications,
included consulting, 16% and legal fees, 4%.
OASIS' MANAGEMENT AND EXECUTIVE CORPORATION
Directors and Executive Officers
The following table sets forth all the directors, executive officers
and significant employees of the Company as of December 19, 2001.
NAME AGE POSITION
Ronald Potts 54 President, CEO and Chairman of the Board
Jack DiFranco 61 Director
Peggy Evans 54 Chief Financial Officer
Ronald A. Potts, Chairman, President and Chief Executive Officer. Mr.
Potts was elected to our Board of Directors and appointed Chairman and Chief
Executive Officer of Oasis in March, 2000, and President in August, 2000. In
addition, in August, 2001, Mr. Potts was elected to the Rainwire Board of
Directors and appointed Rainwire's President and Chief Executive
52
Officer, all positions which he resigned from in November, 2001. From 1996 until
March, 2000, Mr. Potts was President of Londott Investments. Mr. Potts holds an
Economics degree from the University of Western Ontario.
Jack DiFranco, Director. Mr. DiFranco was appointed to our Board of
Directors on December 14, 2001. Since 1985, Mr. DiFranco has been the Chairman
and President of Landmark Mortgage Corporation, and since 1988, Mr. DiFranco has
been the Chairman and President of Statewide Mortgage and Investments Corp. Mr.
DiFranco holds a degree in Law Enforcement from Delgado College.
Peggy Evans, Chief Financial Officer. Ms. Evans was appointed as our
Chief Financial Officer in August, 2001. Since October 1, 2000, Ms. Evans has
been the Chief Financial Officer for Oasis Group, Inc. Prior to that time, Ms.
Evans served as the President of Yakley Management, Inc. and the Chief Operating
Officer of Eston Hospitality, LLC. Ms. Evans holds a B.S. degree in business
from Pepperdine University.
Certain Relationships and Related Transactions
Oasis' officers and directors have ownership interests in Rainwire.
Ronald A. Potts owns approximately 1.5% of the outstanding common stock of
Rainwire on a fully-diluted basis.
In 2001, Oasis has loaned Rainwire approximately $150,000 to date, of
which Rainwire has paid $31,562.86. As of December 31, 2000, Rainwire had loaned
Oasis $12,700.
In connection with the Share Exchange Agreement, Rainwire has moved its
business address to the offices of Oasis. Until the closing of the Share
Exchange, Oasis has agreed to allow Rainwire to use Oasis' offices on a rent
free basis, although the parties have not entered into a formal agreement.
Executive Compensation
In 1999 and 2000, the Chief Executive Officer and President of Oasis
was paid no compensation for his services. No executive officers or any officer
of a subsidiary had total compensation that exceeded $100,000.
Employment Agreements
To date, Oasis has not entered into any employment agreements with its
executive officers.
Options Granted
No options were granted to any directors, officers or employees of
Oasis in 2000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding shares of our
Common Stock beneficially owned as of December 19, 2001. Beneficial ownership is
calculated in accordance
53
with Rule 13d-3(d) under the Securities Exchange Act of 1934. As used in the
table below, a beneficial owner includes any person who directly or indirectly,
through contract, arrangement, understanding, relationship or otherwise has or
shares (a) the power to vote, or direct the voting, of such security or (b)
investment power which includes the power to dispose, or to direct the
disposition of, such security. In addition, a person is deemed to be the
beneficial owner of a security if that person has the right to acquire
beneficial ownership of such security within 60 days. Unless otherwise
indicated, each person possesses sole voting and investment power with respect
to the shares identified as beneficially owned. Except as otherwise indicated in
the table, the address of the stockholders listed below is that of the Company's
principal executive office. Directors not included in the table below do not
hold Company securities.
SHARES BENEFICIALLY OWNED
AS OF DECEMBER 19, 2001
NAME AND ADDRESS NUMBER PERCENT
Ronald A. Potts 9,000,000 24.2%
2931 Piedmont Road, N.E.
Monteith Commons, First Floor
Atlanta, GA 30305
Peggy Evans 1,600,000 4.3%
2931 Piedmont Road, N.E.
Monteith Commons, First Floor
Atlanta, GA 30305
Cambridge Investments 3,000,000 8.1%
Keithley F.T. Lake
The Law Building, The Valley
Anguilla, BWI
Anguilla Equity Partners 2,500,000 6.7%
Keithley F.T. Lake
The Law Building, The Valley
Anguilla, BWI
Sonoma Investments 2,500,000 6.7%
AXA Offshore Management Limited
The Law Building, The Valley
Suite 100
P.O. Box 687
Angville, BWI
THE REVERSE SPLIT
Pursuant to the Reverse Split, every twenty shares of the common stock
of Rainwire issued and outstanding (the "Prior Common") will be reclassified as,
and exchanged for, one share of newly issued Common Stock, par value $.001 ("New
Common").
After the Effective Date of the Reverse Split, the certificates
representing shares of Prior Common represent one-twentieth the number of shares
of New Common. Certificates representing shares of New Common will be issued in
due course as old certificates are tendered
54
for exchange. No fractional shares of New Common will be issued and, in lieu
thereof, stockholders holding a number of shares of Prior Common not evenly
divisible by 20, and stockholders holding fewer than 20 shares of Prior Common
prior to the Effective Date, upon surrender of their old certificates, will
receive one share of stock in lieu of fractional shares of New Common.
The Reverse Split will not materially affect the proportionate equity
interest in the Company of any holder of Prior Common or the relative rights,
preferences, privileges or priorities of any such stockholder, and the par value
per share of the Common Stock will not changed. The New Common issued pursuant
to the Reverse Split will be fully paid and non-assessable. All shares of New
Common will have the same par value, voting rights and other rights as shares of
the Prior Common have. Stockholders of the Company do not have preemptive rights
to acquire additional shares of Common Stock which may be issued.
APPROVAL OF THE RAINWIRE BOARD
In connection with the Share Exchange, the Rainwire Board of Directors,
on December 19, 2001, unanimously approved the Reverse Split and determined that
it was in the best interest of Rainwire and its shareholders. On the Record
Date, the Board of Directors as a group held approximately 48.5% of the voting
power of Rainwire.
REASONS FOR THE APPROVAL OF THE RAINWIRE BOARD
In approving the Reverse Split, the Rainwire Board considered factors,
including, but not limited to, the following:
1. The Reverse Split will allow Rainwire to effect the Share
Exchange without significantly increasing the total number of issued
and outstanding Shares.
2. A fewer number of issued and outstanding shares should
enhance the acceptability of the common stock by the financial
community and the investing public and is also anticipated to initially
increase proportionally the per share market price of the common stock.
3. The proposed Reverse Stock Split may result in a broader
market for the common stock after the Share Exchange than would exist
if the Reverse Stock Split did not occur because the expected price
level will be greater as a result of the Reverse Stock Split, which may
encourage interest and trading in the common stock and possibly promote
greater liquidity for Rainwire's shareholders.
THE AUTHORIZED SHARE INCREASE
APPROVAL OF THE RAINWIRE BOARD
In connection with the Share Exchange, the Rainwire Board of Directors,
on December 19, 2001, unanimously approved the Authorized Share Increase and
determined that it was in the best interest of Rainwire and its shareholders. On
the Record Date, the Board of Directors as a group held approximately 48.5% of
the voting power of Rainwire.
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REASONS FOR THE APPROVAL OF THE RAINWIRE BOARD
In approving the Authorized Share Increase, the Rainwire Board
considered factors, including, but not limited to, the following:
1. The Share Increase will give Rainwire additional shares to
effect the Share Exchange Agreement.
2. The Share Increase will allow the Board of Directors to (a)
react without further Stockholder approval to the Company's capital
needs, (b) pursue strategic opportunities that may arise in the future,
(c) respond to business opportunities and pursue objectives that may
arise in the future including financings, acquisitions, strategic
business relationships or stock dividends or stock splits, and (d)
enable management to attract and retain talented employees through a
grant of stock options and other stock based incentives.
THE NAME CHANGE
APPROVAL OF THE RAINWIRE BOARD
In connection with the Share Exchange, the Rainwire Board of Directors,
on December 19, 2001, unanimously approved the Name Change and determined that
it was in the best interest of Rainwire and its shareholders. On the Record
Date, the Board of Directors as a group held approximately 48.5% of the voting
power of Rainwire.
REASONS FOR THE APPROVAL OF THE RAINWIRE BOARD
The Rainwire Board approved the Name Change because upon completion of
the Share Exchange, the business of Rainwire will be that of Oasis. The Board
believes that name "Oasis Group, Inc." will more accurately convey the scope of
our business after the Share Exchange and will capitalize on the recognition of
Oasis in the business community in which it operates.
RAINWIRE PARTNERS, INC. 2000 STOCK OPTION PLAN
APPROVAL OF THE RAINWIRE BOARD
On , 2000, the Rainwire Board of Directors unanimously approved
the Rainwire Partners, Inc. 2000 Stock Option Plan and determined that it was in
the best interest of Rainwire and its shareholders. On the Record Date, the
Board of Directors as a group held approximately % of the voting stock of
Rainwire.
REASONS FOR THE APPROVAL OF THE RAINWIRE BOARD
The Rainwire Board approved the Rainwire Partners, Inc. 2000 Stock
Option Plan for the purpose of advancing our interests and those of our
Stockholders by providing a means of attracting and retaining key employees,
directors and consultants. The Rainwire Board believes that this Plan serves
this purpose by encouraging and enabling key employees, directors and
56
consultants to participate in our future prosperity and growth by providing them
with incentives and compensation based on our performance, development and
financial success.
The foregoing discussions of the information and factors considered and
given weight by Rainwire's Board for the Reverse Split, Authorized Share
Increase, Name Change and Stock Option Plan are not intended to be exhaustive.
In view of the variety of factors considered in connection with its evaluation
of the foregoing, the Rainwire Board did not find it practicable to, and did
not, quantify or otherwise assign relative weights to the specific factors
considered in reaching its determination. In addition, individual members of the
Rainwire Board may have given different weights to different factors.
CERTAIN SECURITIES LAWS CONSIDERATIONS
The common stock to be issued in the Share Exchange will be registered
under the Securities Act of 1933, as amended (the "Securities Act"). These
shares will be freely transferable under the Securities Act, except for common
stock issued to any person who is deemed to be an affiliate of Oasis. Persons
who may be deemed to be affiliates include individuals or entities that control,
are controlled by, or are under common control with Oasis and include officers
and directors, as well as principal stockholders.
Oasis' affiliates may not sell their Rainwire common stock acquired in
the Share Exchange except pursuant to:
- an effective registration statement under the Securities Act
covering the resale of those shares;
- under paragraph (d) of Rule 145 under the Securities Act; or
- any other applicable exemption under the Securities Act.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors, executive officers and 10% beneficial owners of any class of
equity securities of Rainwire to file certain reports concerning their ownership
of Rainwire's equity securities. Based solely upon a review of Forms 3 and 4 and
amendments thereto furnished to the Corporation during its most recently
completed fiscal year, and Forms 5 and amendments thereto furnished to Rainwire
with respect to its most recently completed fiscal year, the directors, officers
and beneficial owners of 10% or more of any class of Rainwire's securities which
failed to make the requisite filings on a timely basis are set forth below.
In the years prior to December 31, 2000, various officers, directors
and control persons have failed to timely report under section 16(a) of the
Exchange Act. Bryan M. Johns, Lyne Marchessault and Anguilla Equity Partners,
Inc., who were Directors, Officers and/or 10% stockholders, failed to timely
file reports under Section 16 of the Exchange Act with respect to the Company
during the Company's 2000 fiscal year. In February 2001, Mr. Johns and
57
Ms. Marchessault each filed a Form 5 under Section 16 of the Exchange Act with
respect to their holdings of relevant equity securities of the Company as of the
end of the Company's 2000 fiscal year. Walter H. Elliott III, the Company's
other officer and director as of December 31, 2000, had no transactions during
the Company's 2000 fiscal year subject to Section 16 reporting.
Outstanding Stock and Appraisal Rights
RAINWIRE PARTNERS INC.
Rainwire presently has two classes of voting stock outstanding, its
common stock, which has a par value of $0.001, and its Series D Convertible
Preferred Stock, which has a par value of $0.01. As of the Record Date, there
were 20,000,000 shares authorized and 9,909,886 shares of common stock
outstanding, and 500,000 shares authorized and 500,000 shares of Series D
Convertible Preferred Stock outstanding. The Majority of Stockholders held
approximately 3,712,811 shares of Common Stock, or approximately 37.5% of
Rainwire's issued and outstanding Common Stock, and 500,000 shares of Series D
Convertible Preferred Stock, which equals 100% of Rainwire's issued and
outstanding Series D Convertible Preferred Stock and which are entitled to 10
votes per share, for a total of 5,000,000 votes.
Each holder of Common Stock would normally be entitled to one vote in
person or by proxy for each share of Common Stock in his or her name on the
books of Rainwire, as of the Record Date, on any matter submitted to the vote of
stockholders. However, under Section 228(a) of the Delaware Corporation Law, any
action which may be taken at a stockholders' meeting may be taken by written
consent of the requisite number of stockholders required to take such action.
The approval of the Amendments to the Certificate of Incorporation and the Stock
Exchange require the affirmative vote or written consent of a majority of
Rainwire's outstanding Common Stock. On December 19, 2001, the Board of
Directors and on December 20, 2001 the majority of stockholders, consented to
the Amendments and Share Exchange.
This Information Statement is being provided for your information
purposes only. This Information Statement also constitutes your notice of the
availability to you of appraisal rights pursuant to Section 262 of the Delaware
Corporation Law.
Under Section 262 of the Delaware Corporation Law, holders of record of
Shares who do not wish to accept the terms of the Share Exchange have the right
to seek an appraisal of the fair value of their Shares in the Delaware Court of
Chancery (the "Delaware Court"). Holders of Shares wishing to assert this right
must, on or before the twentieth day after the mailing of this Information
Statement, make a written demand for the appraisal of their Shares to: Rainwire
Partners, Inc., Attention: President, 2931 Piedmont Road, N.E., Monteith
Commons, First Floor, Atlanta, GA 30305. The demand must reasonably inform the
Corporation of the identity of the Stockholder making the demand as well as the
intention of the Stockholder to demand an appraisal of the fair value of the
Shares held by the Stockholder.
Only a holder of record of Shares, or a person duly authorized and
explicitly purporting to act on his behalf, is entitled to assert an appraisal
right for the Shares registered in his name. Beneficial owners who are not
record holders and who wish to exercise appraisal are advised to
58
consult promptly with the appropriate record holders as to the timely exercise
of appraisal rights. A record holder, such as a broker, who holds Shares as a
nominee for others may exercise appraisal rights with respect to the Shares held
for one or more beneficial owners, while not exercising such rights for other
beneficial owners. In such a case, the written demand should set forth the
number of Shares as to which the demand is made. Where no Shares are expressly
mentioned, the demand will be presumed to cover all Shares held in the name of
such record holder.
A demand for the appraisal of Shares owned of record by two or more
joint holders must identify and be signed by, or on behalf of, all of the
holders. A demand for appraisal signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity must so identify the persons signing the
demand.
An appraisal demand may be withdrawn by a Stockholder within 60 days
after the Effective Time by written withdrawal of his demand for an appraisal
and an acceptance of the terms of the Share Exchange, or may be withdrawn
thereafter with the written approval of the Corporation.
Only a holder of record of Shares on the date of the making of an
appraisal demand with respect to such Shares who continuously holds such Shares
through the Effective Time, who has otherwise complied with the requirements of
Section 262 of the Delaware Corporation Law shall be entitled to an appraisal.
Within 120 days after the Effective Time (the "120-Day Period"), any
remaining Stockholder who has properly demanded an appraisal and who has not
withdrawn his demand as provided above (such Stockholders being referred to
collectively as the "Dissenting Stockholders") and the Corporation each have the
right to file in the Delaware Court a petition (the "Petition") demanding a
determination of the fair value of the Shares held by all of the Dissenting
Stockholders. If, within the 120-Day Period, no Petition shall have been filed
as provided above, all rights to appraisal will ascertained as of the date of
the Share Exchange that throw any light on future prospects of the corporation.
Section 262 of the Delaware Corporation Law provides that fair value is to be
"exclusive of any element of value arising from the accomplishment or
expectation of the merger or consolidation." In addition, Delaware courts have
decided that the statutory appraisal remedy, depending on factual circumstances,
may or may not be a dissenter's exclusive remedy. The costs of the appraisal
proceeding may be determined by the Delaware Court and taxed upon the parties as
the Delaware Court deems equitable in the circumstances. Upon application, the
Delaware Court may also order that all or a portion of the expenses incurred by
any former holder of Shares in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys' fees and the fees and
expense of experts utilized in the appraisal proceeding, be charged pro rata
against the value of all the Shares entitled to an appraisal. Determinations by
the Delaware Court are subject to appellate review by the Delaware Supreme
Court.
Dissenting Stockholders generally are permitted to participate in the
appraisal proceedings. No appraisal proceeding in the Delaware Court shall be
dismissed as to any Dissenting Stockholder without the approval of the Delaware
Court, and this approval may be conditioned upon terms which the Delaware Court
deems just.
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From and after the Effective Time, Stockholders are not entitled to
vote the Shares for any purpose and are not entitled to receive payment of
dividends or other distributions on the Shares payable to stockholders of record
thereafter.
The foregoing description is not, and does not purport to be, a
complete summary of the applicable provisions of Section 262 of the Delaware
Corporation Law and is qualified in its entirety by reference to the text of
this provision which is set forth in its entirety in Annex B hereto. Any Former
Stockholder considering demanding appraisal is advised to consult its own legal
counsel.
OASIS GROUP, INC.
Oasis presently has only one class of voting stock outstanding, namely
its common stock, no par value. As of the Record Date, there were 50,000,000
shares authorized and [ ] shares of common stock outstanding.
Oasis is soliciting the written consent of a majority of the
shareholders of Oasis in favor of the Share Exchange. This Proxy Statement also
constitutes your notice of the availability to you of appraisal rights pursuant
to Article 13 of the Georgia Business Corporation Code.
Under Georgia law, our shareholders have the right to dissent from the
Share exchange and to receive instead the fair value of their shares if the
Share exchange is completed. Shareholders who dissent, however, will not receive
the amount distributed to our shareholders in connection with the Share exchange
and will forfeit their shares of our common stock for a value that may be higher
or lower than the aggregate per share amount to be distributed in connection
with the Share exchange. To exercise their dissenters' rights, shareholders must
strictly adhere to the provisions of Georgia law governing dissenters' rights.
The following is a summary of the procedures, that must be followed to exercise
dissenters' rights, but we encourage all shareholders to read the full text of
the relevant Georgia statutes, which are attached to this proxy statement as
Annex B.
To exercise dissenters' rights, shareholders must deliver to us, before
the vote on the Share Exchange is taken, a written notice of their intent to
demand payment for their shares if the Share Exchange closes. In addition,
shareholders exercising their dissenters' rights may not vote their shares in
person or by proxy in favor of the Share Exchange Agreement and the related
Share Exchange. A failure to vote on the Share Exchange Agreement and related
Share Exchange will not in itself by a waiver of a shareholder's dissenters'
rights. If the Share Exchange Agreement is approved at the annual meeting, we
will send a written notice to all shareholders who exercised their dissenters'
rights, which will include information on where shareholders must send their
demands for payment and by when the demands must be received. After receiving
this notice, dissenting shareholders must send timely written notice to us
demanding payment and their share certificates. Any dissenting shareholders who
do not timely send a demand to us will not be entitled to receive the fair value
of their shares.
Within 10 days of the closing of the Share Exchange, we will send an
offer to pay each dissenting shareholder who properly submitted a demand notice
and his or her share certificates the amount we estimate to be the fair value of
his or her shares, plus accrued interest from the
60
date of the closing of the Share Exchange. Shareholders who accept our written
offers or who fail to respond to our offers will receive payment for their
shares as set forth in our written offer within 60 days of our offer letter.
Shareholders who believe that our payment offers do not represent the fair value
of their shares or that the interest is incorrectly calculated may, within 30
days of receiving our offers, send us written notice of their own estimates of
the fair value of their shares and the amount of interest due. If we are not
able to reach agreement with any dissenting shareholder as to the fair value of
his or her shares or the interest due, we will file a proceeding in the Fulton
County Superior Court, and the court will decide the fair value of those shares
and the interest due. Shareholders who elect to exercise their dissenters'
rights and who receive the fair value of their shares will no longer be
shareholders of our company after payment is made.
The fair value that a dissenting shareholder receives for each of his
or her shares may be higher or lower than the aggregate per share amount
distributed in connection with the Share Exchange, and dissenting shareholders
will forfeit their shares of our common stock.
COMPARISON OF RIGHTS OF RAINWIRE STOCKHOLDERS AND
OASIS STOCKHOLDERS
After the Share Exchange, Oasis shareholders will become Rainwire
shareholders. The following summary, which is not a complete statement of all
differences between right of the holders of Oasis common stock and Rainwire
common stock, discussing differences between Rainwire's Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws and Oasis Articles
of Incorporation and Amended and Restated Bylaws, as well as differences between
the Delaware General Corporation Law and the Georgia Business Corporation Code.
61
CAPITALIZATION
OASIS
The authorized Capital Stock of Oasis consists of:
- 50,000,000 shares of stock, no par value.
RAINWIRE
The authorized Capital Stock of Rainwire consists of:
- 20,000,000 shares of Common Stock, par value $0.001;
- 2,500,000 shares of Preferred Stock, par value $0.01, of which:
- 70,000 shares have been designated Series A Preferred Stock;
- 208,640 shares have been designated Series B Preferred Stock;
- 74,878 shares have been designated Series C Preferred Stock;
and
- 500,000 shares have been designated Series D Convertible
Preferred Stock.
POWER TO CALL SHAREHOLDERS/STOCKHOLDERS MEETINGS
- Special meetings of the shareholders may be called by the Chairman of
the Board or the President or Secretary at the request in writing of a
majority of the Board of Directors or of the shareholders owning 10% of
the Capital Stock of Oasis issued, outstanding and entitled to vote.
- Special meetings of the stockholders, unless otherwise prescribed by
law, may not be called at any time by the stockholders but may be at
any time by the Chairman of the Board, by the President or by order of
the Board of Directors.
BOARD OF DIRECTORS
- The number of directors shall be as fixed from time to time by
resolution of the Board of Directors or stockholders.
- The number of directors constituting the Board of Directors shall be
determined from time to time by the Board of Directors, but such number
shall not be less than three nor more than nine.
Shareholders/Stockholders Quorum
- The holders of record of a majority of the issued and outstanding stock
of Oasis shall constitute a quorum.
- The holders of record of one-third of the outstanding stock entitled to
vote shall constitute a quorum.
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ACTION BY WRITTEN CONSENT OF SHAREHOLDERS/STOCKHOLDERS
OASIS
- Any action permitted or required to be taken at a meeting of the
shareholders may be taken without a meeting if a consent or consents in
writing shall be signed by all of the shareholders of the capital stock
entitled to vote.
RAINWIRE
- Any action may be taken without a meeting if a consent or consents in
writing shall be signed by the holders of the outstanding stock having
not less than the minimum number of votes that would be necessary to
authorize such action.
SHAREHOLDER APPROVAL OF CERTAIN BUSINESS COMBINATIONS
Under Delaware and Georgia law, "business combinations" by corporations
with "interested shareholders" are subject to a moratorium of three or five
years, respectively, unless specified conditions are met. The prohibited
transactions include a merger with, disposition of assets to, or the issuance of
stock to, the interested shareholder, or specified transactions that have the
effect of increasing the proportionate amount of the outstanding securities held
by the interested shareholders. Under Delaware and Georgia law, interested
shareholders are those shareholders who own 15% and 10% of the voting stock of a
corporation, respectively. Interested shareholders may avoid the prohibitions
against significant transactions with corporations in Delaware and Georgia under
the following circumstances:
DELAWARE
- Prior to becoming an interested stockholder, the board of directors
approves the transaction or transactions by which the stockholder
becomes an interested stockholder;
- the interested stockholder owned at least 85% of the voting stock,
excluding specified shares, upon consummation of the transaction that
results in the stockholder becoming an interested stockholder; or
- if at, or subsequent to, the time the stockholder becomes an interested
stockholder, the board of directors and at least 66 2/3% of the
stockholders, excluding shares held by the interested stockholder,
approve the transaction.
GEORGIA
- Prior to becoming an interested shareholder, the board of directors
approves the transaction or transactions by which the shareholder
becomes an interested shareholder;
- the interested shareholder owns at least 90% of the voting stock,
excluding specified shares, upon consummation of the transaction that
results in the shareholder becoming an interested shareholder; or
- subsequent to becoming an interested shareholder, the interested
shareholder holds 90% of the outstanding voting stock, excluding
specified shares, and the transaction is approved by a majority of the
shareholders of the voting stock entitled to vote thereon, excluding
specified shares.
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Georgia law also includes "fair price requirements" that would apply to
any business combinations between Oasis and any interested shareholder. Business
combinations with interested shareholders must be unanimously approved by at
least three "continuing directors" of Oasis or recommended by at least 66-2/3%
of such continuing directors and approved by a majority of the votes entitled to
be cast by holders of voting shares, other than voting shares beneficially owned
by the interested shareholder. This vote is not required if: (1) the fair market
value of the aggregate cash or securities to be received by the shareholders is
as high as the fair market value of their shares; (2) the shareholders receive
the same form of consideration as the interested shareholder previously paid for
shares of the same class or series; (3) there are no changes with respect to
dividends; and (4) the interested shareholder has not received the benefit of
any loans, advances, guarantees, pledges or other financial assistance provided
by eshare.
LEGAL MATTERS
The validity of the common stock to be issued in the Share Exchange
will be passed upon by Kutak Rock LLP, Atlanta, Georgia.
EXPERTS
The audited consolidated balance sheet of Rainwire Partners, Inc. and
subsidiary as of December 31, 2000 and the related consolidated statement of
operations, changes in stockholders' equity, and cash flows for the year then
ended included in this Information Statement/Proxy Statement/Prospectus and
elsewhere in the registration statement have been audited by Braverman &
Company, P.C., independent certified public accountants as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving such reports.
The audited consolidated balance sheet of Rainwire Partners, Inc. and
subsidiary as of December 31, 1999 and the related consolidated statement of
operations, changes in stockholders' equity, and cash flows for the year then
ended included in this Information Statement/Proxy Statement/Prospectus and
elsewhere in the registration statement have been audited by Tauber & Balser,
P.C., independent certified public accountants as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving such reports.
The Financial Statements of Oasis Group, Inc. included in this
Information Statement/Proxy Statement/Prospectus have been audited by Powell &
Booth, PC, independent auditors, as stated in their report appearing herein, and
are included in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Rainwire has filed a registration statement on Form S-4 under the
Securities Act with the Securities and Exchange Commission with respect to
Rainwire's common stock to be issued to Oasis shareholders in the Share
Exchange. This Information Statement/Proxy Statement/Prospectus constitutes the
prospectus of Rainwire filed as part of the registration statement. This
Information Statement/Proxy Statement/Prospectus does not contain all of the
information set forth in the registration statement because certain parts of the
registration statement are omitted in accordance with the rules and regulations
of the SEC. The registration statement and its exhibits are available for
inspection and copying from the Public Reference Section of the SEC, 450 Fifth
Street, N.W., Washington, D.C. 20549 or by calling the SEC at (800) SEC-0330.
The SEC maintains a Website that contains reports, proxy statements and other
information regarding each of us. The address of the SEC Website is
http://www.sec.gov. If you have any questions about the Share Exchange, please
call Rainwire at (404) 842-1510.
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THIS INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE SECURITIES OFFERED
BY THIS INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS IN ANY JURISDICTION TO
OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS INFORMATION STATEMENT/PROXY
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES PURSUANT TO THIS
INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATIONS THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET
FORTH OR INCORPORATED INTO THIS INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS
BY REFERENCE OR IN OUR AFFAIRS SINCE THE DATE OF THIS INFORMATION
STATEMENT/PROXY STATEMENT/PROSPECTUS.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Rainwire
pursuant to the foregoing provisions or otherwise, Rainwire has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in such act, and is
therefore unenforceable.
65
ANNEX A
AMENDED AND RESTATED
PLAN AND AGREEMENT TO EXCHANGE STOCK
BY AND BETWEEN
RAINWIRE PARTNERS, INC.,
AND
OASIS GROUP, INC.
DATED AS OF DECEMBER 19, 2001
TABLE OF CONTENTS
PAGE
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ARTICLE I
THE SHARE EXCHANGE
Section 1.01. The Share Exchange.......................................... A-
Section 1.02. Time and Place of Closing................................... A-
Section 1.03. Effective Time.............................................. A-
Section 1.04. Amendment to Certificate of Incorporation................... A-
ARTICLE II
MANNER OF CONVERTING SHARES
Section 2.01. Share Exchange Consideration................................ A-
Section 2.02. Conversion of Shares........................................ A-
Section 2.03. Adjustments to Exchange Ratio............................... A-
Section 2.04. Shares Held by Oasis........................................ A-
Section 2.05. Fractional Shares........................................... A-
ARTICLE III
EXCHANGE OF SHARES
Section 3.01. Exchange Agent.............................................. A-
Section 3.02. Instructions to Exchange Agent.............................. A-
Section 3.03. Exchange Procedures......................................... A-
Section 3.04. Rights of Former Oasis Owners............................... A-
Section 3.05. No Further Ownership Rights in Oasis Stock.................. A-
Section 3.06. No Liability................................................ A-
Section 3.07. Lost Certificates........................................... A-
Section 3.08. Withholding Rights.......................................... A-
Section 3.09. Further Assurances.......................................... A-
Section 3.10. No Fractional Shares........................................ A-
ARTICLE IV
FURTHER TERMS AND COVENANTS
Section 4.01. Preparation of Registration Statement....................... A-
Section 4.02. Oasis Shareholder Approval.................................. A-
Section 4.03. Rainwire Shareholder Approval............................... A-
Section 4.04. New Officers and Directors.................................. A-
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OASIS
Section 5.01. Organization, Authority and Capacity........................ A-
Section 5.02. Authorization and Validity.................................. A-
Section 5.03. Absence of Conflicting Agreements or Required Consents...... A-
Section 5.04. Governing Documents of Oasis................................ A-
Section 5.05. Outstanding and Authorized Capitalization................... A-
Section 5.06. Financial Statements........................................ A-
Section 5.07. Absence of Changes.......................................... A-
Section 5.08. No Undisclosed Liabilities.................................. A-
PAGE
----
Section 5.09. Litigation, Etc. ........................................... A-
Section 5.10. No Violation of Law......................................... A-
Section 5.11. Real and Personal Property.................................. A-
Section 5.12. Contracts and Commitments................................... A-
Section 5.13. Employment and Labor Matters................................ A-
Section 5.14. Employee Benefit Matters.................................... A-
Section 5.15. Insurance Policies.......................................... A-
Section 5.16. Taxes....................................................... A-
Section 5.17. Interested Transactions..................................... A-
Section 5.18. Intellectual Property....................................... A-
Section 5.19. Required Vote of Oasis Shareholders......................... A-
Section 5.20. Brokerage................................................... A-
Section 5.21. Statements True and Correct................................. A-
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF RAINWIRE
Section 6.01. Organization, Authority and Capacity........................ A-
Section 6.02. Authorization and Validity.................................. A-
Section 6.03. Absence of Conflicting Agreements or Required Consents...... A-
Section 6.04. Governing Documents......................................... A-
Section 6.05. Outstanding and Authorized Capitalization................... A-
Section 6.06. Reports and Financial Statements............................ A-
Section 6.07. Absence of Changes.......................................... A-
Section 6.08. No Undisclosed Liabilities.................................. A-
Section 6.09. Litigation, Etc. ........................................... A-
Section 6.10. No Violation of Law......................................... A-
Section 6.11. Real and Personal Property.................................. A-
Section 6.12. Contracts and Commitments................................... A-
Section 6.13. Employment and Labor Matters................................ A-
Section 6.14. Employee Benefit Matters.................................... A-
Section 6.15. Insurance Policies.......................................... A-
Section 6.16. Taxes....................................................... A-
Section 6.17. Interested Transactions..................................... A-
Section 6.18. Intellectual Property....................................... A-
Section 6.19. Brokerage................................................... A-
Section 6.20. Subsidiaries................................................ A-
Section 6.21. Statements True and Correct................................. A-
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.01. Access to Information....................................... A-
Section 7.02. No-Shop..................................................... A-
Section 7.03. Affirmative Covenants of Oasis.............................. A-
Section 7.04. Negative Covenants of Oasis................................. A-
Section 7.05. Affirmative Covenants of Rainwire........................... A-
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PAGE
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Section 7.06. Negative Covenants of Rainwire.............................. A-
Section 7.07. Confidentiality............................................. A-
Section 7.08. Public Announcements........................................ A-
Section 7.09. Filings with State Offices.................................. A-
Section 7.10. Conditions to Closing....................................... A-
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF RAINWIRE
Section 8.01. Representations and Warranties.............................. A-
Section 8.02. Performance; Covenants...................................... A-
Section 8.03. Necessary Consents and Approvals............................ A-
Section 8.04. No Material Adverse Change.................................. A-
Section 8.05. No Injunction, Etc. ........................................ A-
Section 8.06. Oasis Shareholder Approval.................................. A-
Section 8.07. Effectiveness of the Form S-4............................... A-
Section 8.08. Certificate of Share Exchange............................... A-
Section 8.09. Tax-Free Share Exchange..................................... A-
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF OASIS AND OASIS SHAREHOLDERS
Section 9.01. Representations and Warranties.............................. A-
Section 9.02. Performance; Covenants...................................... A-
Section 9.03. Necessary Consents and Approvals............................ A-
Section 9.04. No Material Adverse Change.................................. A-
Section 9.05. No Injunction, Etc. ........................................ A-
Section 9.06. Effectiveness of Form S-4................................... A-
Section 9.07. Certificate of Share Exchange............................... A-
Section 9.08. Tax-Free Share Exchange..................................... A-
Section 9.09. OTC Bulletin Board Listing.................................. A-
Section 9.10. Rainwire Shareholder Approval............................... A-
ARTICLE X
TERMINATION
Section 10.01. Right of Termination........................................ A-
Section 10.02. Effect of Termination....................................... A-
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
Section 11.01. Indemnification by Rainwire................................. A-
Section 11.02. Indemnification by Oasis and the Oasis Shareholders......... A-
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Notices..................................................... A-
Section 12.02. Expenses.................................................... A-
Section 12.03. Further Assurances.......................................... A-
Section 12.04. Waiver...................................................... A-
A-iii
PAGE
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Section 12.05. Assignment.................................................. A-
Section 12.06. Binding Effect.............................................. A-
Section 12.07. Headings.................................................... A-
Section 12.08. Entire Agreement............................................ A-
Section 12.09. Governing Law; Severability................................. A-
Section 12.10. Counterparts................................................ A-
Section 12.11. Brokers and Finders......................................... A-
Section 12.12. Schedules and Exhibits...................................... A-
Section 12.13. Enforcement of Agreement.................................... A-
ARTICLE XIII
CERTAIN DEFINITIONS......................................................... A-
A-iv
PLAN AND AGREEMENT TO EXCHANGE STOCK
THIS AMENDED AND RESTATED PLAN AND AGREEMENT TO EXCHANGE STOCK (this
"Agreement") is made and entered into as of December 19, 2001, by and between
RAINWIRE PARTNERS, INC., a Delaware corporation ("Rainwire"), and OASIS GROUP,
INC., a Georgia corporation ("Oasis").
WHEREAS, Oasis and Rainwire intend to effect a reorganization pursuant to
Section 368(a)(1)(B) of the Code (as hereinafter defined) whereby Rainwire will
acquire all of the outstanding shares of stock of Oasis from the Oasis
Shareholders in exchange for newly issued shares of common stock of Rainwire.
NOW, THEREFORE, for and in consideration of these premises and the mutual
covenants, promises, agreements, representations and warranties set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Rainwire and Oasis hereby agree as follows:
ARTICLE I
THE SHARE EXCHANGE
SECTION 1.01. THE SHARE EXCHANGE. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Georgia
Business Corporation Code ("GBCC") and the General Corporation Law of the State
of Delaware ("DGCL"), Rainwire will acquire all of the outstanding shares of
stock of Oasis from the Oasis Shareholders in exchange for validly issued, fully
paid and nonassessable shares of common stock of Rainwire, and, after giving
effect to all of the transactions contemplated by this Agreement, (a) the
Rainwire shareholders and the Oasis Shareholders will jointly own all of the
issued and outstanding shares of Rainwire and (b) Oasis will be a wholly-owned
subsidiary of Rainwire (the "Share Exchange").
SECTION 1.02. TIME AND PLACE OF CLOSING. The "Closing" shall mean the
consummation of the exchange of Rainwire Shares and the Oasis Shares, as set
forth in Article III, as well as the consummation of any other transactions
which are contemplated by this Agreement to occur at Closing. Closing shall take
place no later than within three business days following the date upon which all
of the conditions precedent contained in Articles VIII and IX of this Agreement
have occurred and all regulatory matters have been complied with, at 10:00 a.m.,
local time, at the offices of Kutak Rock, LLP, Suite 2100, 225 Peachtree Street,
N.E. Atlanta, Georgia 30303, or at such other time and place as the parties may
agree in writing. The date the Closing actually occurs is the "Closing Date."
SECTION 1.03. EFFECTIVE TIME. Subject to the provisions of this
Agreement, the parties shall file a Certificate of Share Exchange in such form
as is required by, and executed in accordance with, the relevant provisions of
the GBCC, including sec. 14-2-1105, and shall make all other filings or
recordings required under the GBCC as soon as practicable on or after the
Closing Date. The Share Exchange and other transactions contemplated by this
Agreement shall become effective on the date and at the time the Certificate of
Share Exchange reflecting the Share Exchange is duly filed with the Secretary of
State of the State of Georgia, or at such other time and date as Oasis,
Rainwire, and the Oasis Shareholders shall agree and as specified in the
Certificate of Share Exchange (the "Effective Time").
SECTION 1.04. AMENDMENT TO CERTIFICATE OF INCORPORATION. Prior to the
Closing, Rainwire will effect a twenty-for-one reverse split of its authorized
and outstanding common stock so that Rainwire will have approximately 495,495
shares of authorized common stock after the Reverse split (the "Reverse Split"),
and after the Reverse Split shall amend its Amended and Restated Certificate of
Incorporation to increase its authorized shares of common stock to 100,000,000
(the "Amendment"). Rainwire shall use its best efforts to obtain the written
consent of the majority of the Rainwire Shareholders in favor of the Reverse
Split and Amendment, and shall timely comply with all applicable state and
federal laws in connection with the shareholder consent, including the filing
and mailing of a Schedule 14C (or Registration
A-1
Statement on Form S-4) pursuant to the Securities Exchange Act of 1934 to all
shareholders as of the record date that did not provide Rainwire with their
written consent to the Reverse Split and Amendment.
ARTICLE II
MANNER OF CONVERTING SHARES
SECTION 2.01. SHARE EXCHANGE CONSIDERATION. Upon the terms and subject to
the conditions of this Agreement, the Oasis Shareholders shall receive, as
consideration for the Share Exchange of all of the issued and outstanding shares
of Oasis's Common Stock, no par value ("Oasis Common Stock"), shares of the
Common Stock, par value $.001, of Rainwire ("Rainwire Common Stock"), such
shares of Rainwire Common Stock to be issuable at the Closing in accordance with
the terms of this Agreement. At the Effective Time, all such shares of Rainwire
Common Stock shall be duly and validly issued, fully paid and nonassessable.
SECTION 2.02. CONVERSION OF SHARES. Subject to the provisions of this
Article II, at the Effective Time, by virtue of the Share Exchange and without
any action on the part of the parties hereto or the shareholders of any of the
parties, each 2.5 shares of the Fully Diluted Shares of Oasis Common Stock
issued and outstanding at the Effective Time shall, by virtue of the Share
Exchange and without any action on the part of the holder thereof, automatically
be converted into one (1) share of Rainwire Common Stock (the "Exchange Ratio").
"Fully Diluted Shares" shall be equal to the total number of outstanding shares
of Oasis Common Stock calculated on a fully diluted, fully converted basis as
though any and all convertible debt and equity securities (including any Oasis
Preferred Stock and any outstanding warrants and outstanding options (whether
vested or unvested)) had been converted or exercised into Common Stock. The
Exchange Ratio shall not change as a result of fluctuations in the market price
of Rainwire Common Stock between the date of this Agreement and the Effective
Time. The aggregate number of shares of Rainwire Common Stock issued pursuant to
this Section 2.02 shall be referred to as "Share Exchange Shares."
SECTION 2.03. ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
equitably adjusted to reflect fully the effect of any stock split, reverse
split, stock dividend (including any dividend or distribution of securities
convertible into Rainwire Common Stock or Oasis Common Stock), reorganization,
recapitalization or other like change with respect to Rainwire Common Stock or
Oasis Common Stock occurring after the date of this Agreement and prior to the
Effective Time. Any such change for which a record date is established shall be
deemed for the purposes of this Section 2.03 to have occurred on the record
date. Notwithstanding the foregoing, the Exchange Ratio shall not be adjusted
for any effects that the Stock Dividend and Amendment shall have on the Rainwire
Common Stock.
SECTION 2.04. SHARES HELD BY OASIS. Each share of Oasis Common Stock held
in treasury by Oasis, shall be canceled and retired at the Effective Time, and
no consideration shall be issued in exchange therefor.
SECTION 2.05. FRACTIONAL SHARES. No certificates representing fractional
shares of Rainwire Common Stock will be issued as a result of the Share
Exchange. Any fractional share interest to which an Oasis Shareholder would
otherwise be entitled to receive shall be rounded up to the nearest whole share
if such fraction is 0.5 or greater and shall be rounded down to the nearest
whole share if such fraction is less than 0.5.
ARTICLE III
EXCHANGE OF SHARES
SECTION 3.01. EXCHANGE AGENT. Rainwire's transfer agent shall serve as
the exchange agent (the "Exchange Agent") in the Share Exchange.
A-2
SECTION 3.02. INSTRUCTIONS TO EXCHANGE AGENT. At or prior to the
Effective Time, Rainwire shall give instructions to the Exchange Agent
concerning the issuance of such certificates representing the aggregate number
of shares of Rainwire Common Stock issuable pursuant to Section 2.02 in exchange
for outstanding shares of Oasis Common Stock.
SECTION 3.03. EXCHANGE PROCEDURES. Upon surrender of a certificate for
cancellation to the Exchange Agent, together with a letter of transmittal, duly
executed, and such other documents as may reasonably be required by the Exchange
Agent, the holder of such certificate shall be entitled to receive in exchange
therefor a Rainwire certificate representing that number of whole shares of
Rainwire Common Stock that such holder has the right to receive pursuant to the
provisions of this Article III, and the certificate so surrendered shall
forthwith be cancelled. Until surrendered as contemplated by this Section 3.03,
each certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Share Exchange
Consideration that the holder thereof has right to receive pursuant to the
provisions of this Article III. No interest will be paid or will accrue on any
cash payable to holders of certificates pursuant to the provisions of this
Article.
Rainwire shall not be obligated to deliver the consideration to which any
Oasis Shareholder is entitled as a result of the Share Exchange until such
holder surrenders his or her certificate or certificates representing the shares
of Oasis Common Stock for exchange as provided in this Article III or such
holder provides an appropriate affidavit regarding loss of such certificate or
agreement and an indemnification in favor of Rainwire pursuant to Section 3.07
hereof.
SECTION 3.04. RIGHTS OF FORMER OASIS OWNERS. At the Effective Time, the
stock transfer books of Oasis shall be closed and no transfer of Oasis Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered in accordance with the provisions of Section 3.03 of this Agreement,
each certificate theretofore representing shares of Oasis Common Stock (other
than shares to be canceled pursuant to Section 2.04 of this Agreement) shall
from and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Section 2.01 of this Agreement in exchange
therefor.
SECTION 3.05. NO FURTHER OWNERSHIP RIGHTS IN OASIS STOCK. All shares of
Rainwire Common Stock issued upon the surrender for exchange of shares of Oasis
Common Stock in accordance with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of Oasis
Common Stock, and there shall be no further registration of transfers on the
records of Oasis of shares of Oasis Common Stock which were outstanding
immediately prior to the Effective Time.
SECTION 3.06. NO LIABILITY. None of Rainwire, Oasis, the Exchange Agent
or any party hereto shall be liable to any Person in respect of any shares of
Rainwire Common Stock properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
SECTION 3.07. LOST CERTIFICATES. If any certificate representing Oasis
Common Stock shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such certificate to be lost,
stolen or destroyed and, if required by Rainwire, the posting by such Person of
a bond in such reasonable amount as Rainwire may direct as indemnity against any
claim that may be made against either of them with respect to such certificate,
the transfer agent will issue in exchange for such lost, stolen or destroyed
certificate the Share Exchange Consideration and unpaid dividends and
distributions on shares of Rainwire Common Stock deliverable in respect thereof,
in each case pursuant to this Agreement.
SECTION 3.08. WITHHOLDING RIGHTS. Rainwire shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of shares of Rainwire Common Stock such amounts as it is required
to deduct and withhold with respect to the making of such payment under the Code
and the rules and regulations promulgated thereunder, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by Rainwire
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Oasis Common Stock in respect of
which such deduction and withholding was made by Rainwire.
A-3
SECTION 3.09. FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of Rainwire shall be authorized to execute and deliver,
in the name and on behalf of Oasis, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of Oasis, any other
actions and things to vest, perfect or confirm of record or otherwise in Oasis
any and all right, title and interest in, to and under any of the rights,
properties or assets acquired or to be acquired by Oasis as a result of, or in
connection with, the Share Exchange.
SECTION 3.10. NO FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Rainwire Common Stock shall be issued upon the surrender
for exchange of certificates, no dividend or distribution of Rainwire Common
Stock shall relate to such fractional share interests and such fractional share
interests will not entitle the owner thereof to vote or to any rights as a
Stockholder of Rainwire. The procedure with respect to fractional shares is set
forth in Section 2.05 hereof.
ARTICLE IV
FURTHER TERMS AND COVENANTS
SECTION 4.01. PREPARATION OF REGISTRATION STATEMENT. As promptly as
reasonably practicable following the date of this Agreement, Rainwire and Oasis
shall prepare and file with the SEC a mutually acceptable Information
Statement/Proxy Statement (the "Information/Proxy Statement") and Rainwire shall
prepare and file with the SEC a Registration Statement on Form S-4 in which the
Information/ Proxy Statement will be included as a prospectus (such Registration
statement, and any amendments or supplements thereto, the Form "S-4"). Rainwire
agrees to provide Oasis with a reasonable opportunity to review and comment on
the Form S-4 before filing with the SEC. Each of Rainwire and Oasis shall use
commercially reasonable efforts (a) to request, within twenty-four (24) hours of
receiving oral or written notification by the SEC that it has no further
comments on the Form S-4, that the effective date of the Form S-4 be accelerated
so that the Form S-4 become effective as promptly and as practicable thereafter,
(b) to otherwise have the Form S-4 declared effective by the SEC as promptly as
practicable, (c) to keep the Form S-4 effective as long as is necessary to
consummate the Share Exchange and the transactions contemplated thereby.
Rainwire and Oasis shall, as promptly as practicable after receipt thereof, (i)
provide the other party copies of any written comments and advise the other
party of any oral comments received from the SEC relating to matters being
considered by the SEC in connection with its review, if any, of the Form S-4 and
(ii) respond to such comments by filing with the SEC a proper response and, if
necessary or desirable, an amendment to the Form S-4. Rainwire and its counsel
shall be responsible for the preparation and filing of the Form S-4, provided,
however, that Oasis and its counsel shall promptly provide such information,
draft and provide to Rainwire such portions of the Form S-4 and provide such
other assistance with respect to the preparation and filing of the Form S-4 as
Rainwire may from time to time reasonably request. Notwithstanding any other
provision herein to the contrary, no portion of the Form S-4 or any amendment or
supplement thereto nor any response to comments relating thereto may be filed
with the SEC, and no document or portion thereof may be incorporated by
reference into the Form S-4, without the prior approval of both Rainwire and
Oasis, which approval shall not be unreasonably withheld or delayed. Oasis will
use commercially reasonable efforts to cause the Form S-4 to be mailed to Oasis'
stockholders as soon as practicable after the Form S-4 is declared effective by
the SEC. Rainwire shall take any action (other than qualifying to do business in
any jurisdiction in which it is not now so qualified or to file a general
consent to service of process) required to be taken under any applicable state
securities laws in connection with the issuance of the shares of Rainwire Common
Stock to be issued in the Share Exchange (the "Share Issuance") and Oasis shall
furnish all information concerning Oasis and the holders of Oasis Common Stock
as may be reasonably requested in connection with any such action. Each party
will advise the other party, promptly after it receives notice thereof, of the
time when the Form S-4 has been declared effective by the SEC, the issuance by
the SEC or any state securities regulatory authority of any stop order or
threatened stop order relating to the Form S-4, the suspension of the
qualification of the Rainwire Common Stock issuable in connection with the Share
Exchange for offering or sale in any jurisdiction, any request by the SEC or any
state securities regulatory authority to respond to an inquiry, to provide any
information on a supplemental basis, to amend or
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supplement any document incorporated by reference into the Form S-4 (regardless
of whether the document which is the subject of such request was filed by the
party who is to receive notice as provided above), or any request by the SEC to
amend or supplement the Form S-4; in each case, together with all of the facts
and circumstances known to the notifying party relating to the event or events
which has or have given rise to the obligation to provide such notification. If
at any time prior to the Effective Time either Rainwire or Oasis becomes aware
that any information including, without limitation, information relating to
Rainwire or Oasis, or any of their respective affiliates, officers or directors,
has either been misstated in, or omitted from, the Form S-4, the party who has
become aware of such misstatement or omission shall promptly advise the other
party and Rainwire and Oasis shall cooperate with one another in the preparation
and filing, as soon as reasonably practicable, of an amendment or supplement to
the Form S-4 so that following the filing of such amendment or supplement, the
Form S-4 (including any documents incorporated by reference therein) would not
include any misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
SECTION 4.02. OASIS SHAREHOLDER APPROVAL.
(a) As soon as reasonably practicable after the date on which the
Form S-4 has been declared effective by the SEC, Oasis shall take all
actions required by the GBCC and Regulations 14A and 14C promulgated under
the Exchange Act to call, give notice of, solicit proxies with respect to,
convene and hold a meeting of its stockholders for the purpose of obtaining
the Required Oasis Vote (the "Oasis Stockholder Meeting").
(b) In connection with obtaining the Required Oasis Vote, the Board
of Oasis will not withdraw, modify or qualify the Oasis Recommendation in a
manner adverse to Rainwire (any such withdrawal, modification or
qualification, a "Change") or take any action in connection with or make
any statement at the Oasis Stockholder Meeting which is inconsistent with
the Oasis Recommendation or would reasonably be expected to diminish the
likelihood of obtaining the Required Oasis Vote.
(c) Oasis shall also take all action required under the GBCC with
respect to the holders of Dissenting Shares, if any; and
(d) Oasis shall cooperate with Rainwire in mailing to Oasis'
shareholders a transmittal letter to be used by such shareholders in
forwarding their certificates for surrender and exchange.
SECTION 4.03. RAINWIRE SHAREHOLDER APPROVAL. Rainwire shall take all
actions required by the DGCL and Regulations 14A and 14C promulgated under the
Exchange Act to obtain the consent of a majority of its shareholders in favor of
the Share Exchange and Amendments and to notify the remaining shareholders of
the actions taken by the majority.
SECTION 4.04. NEW OFFICERS AND DIRECTORS. Upon Closing, Lyne Marchessault
will resign as President of Rainwire, and Ronald A. Potts will be appointed
President and Chief Executive Officer of Rainwire. Additionally, upon Closing,
Ronald A. Potts will be appointed to the Board of Directors of Rainwire, and the
number of directors constituting Rainwire's Board of Directors will be increased
to a total of five (5) directors.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OASIS
Oasis represents and warrants the following to Rainwire:
SECTION 5.01. ORGANIZATION, AUTHORITY AND CAPACITY. Oasis is a
corporation, duly organized, validly existing, and in good standing under
the laws of the State of Georgia, and has the full corporate power and
authority necessary to (a) execute, deliver and perform its obligations
under this Agreement and the other documents and instruments to be executed
and delivered by Oasis pursuant to this Agreement (collectively, the "Share
Exchange Documents") and (b) carry on its business as
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it has been and is now being conducted and to own and lease the properties
and assets which it now owns or leases. Oasis is duly qualified to do
business and is in good standing in the jurisdictions set forth in Schedule
5.01, which includes every state of the United States in which the conduct
of the business and the ownership of such properties and assets requires it
to be so qualified.
SECTION 5.02. AUTHORIZATION AND VALIDITY. The execution, delivery
and performance of the Share Exchange Documents to be executed and
delivered by Oasis have been duly authorized by all necessary corporate
action on the part of Oasis, and the Board of Directors has recommended
that the Stockholders of Oasis approve this Agreement and the transactions
contemplated hereby be submitted for consideration to its shareholders. The
Share Exchange Documents to be executed and delivered by Oasis have been or
will be, as the case may be, duly executed and delivered by Oasis and
constitute or will constitute the legal, valid and binding obligations of
Oasis, enforceable in accordance with their respective terms, except as may
be limited by bankruptcy, insolvency, or other laws affecting creditors'
rights generally, or as may be modified by a court of equity.
SECTION 5.03. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED
CONSENTS. Except as set forth on Schedule 5.03, the execution, delivery
and performance by Oasis of the Share Exchange Documents to be executed and
delivered by Oasis: (a) do not require the consent of or notice to any
Authority or any other third party (except for those required under or in
relation to state securities or "blue sky" laws, the Securities Act, and
the GBCC with respect to the filing of the Certificate of Share Exchange);
(b) do not conflict with any provision of Oasis's articles or certificate
of incorporation or bylaws; (c) do not violate any law, ordinance,
regulation, ruling, judgment, order or injunction of any court or
governmental instrumentality to which Oasis is subject or by which Oasis or
any of its respective properties are bound; (d) do not conflict with,
constitute grounds for termination of, result in a breach of, or constitute
a default under the terms of any agreement, instrument, license or permit
to which Oasis is a party or by which Oasis or any of its properties are
bound; and (e) will not create any lien, encumbrance or restriction upon
any of the assets or properties of Oasis.
SECTION 5.04. GOVERNING DOCUMENTS OF OASIS. True and correct copies
of the organizational documents and all amendments thereto of Oasis in
effect on the date hereof have been or will be provided to Rainwire.
Rainwire has been or will be provided with access to the minutes of Oasis,
and such minutes accurately reflect all proceedings of the board of
directors of Oasis (and all committees thereof) required to be reflected in
such records through the date hereof.
SECTION 5.05. OUTSTANDING AND AUTHORIZED CAPITALIZATION. All
authorized and outstanding shares of Oasis Common Stock are accurately
described on Schedule 5.05. All outstanding shares of Oasis Common Stock
are listed and held of record as indicated on Schedule 5.05 and all shares
of outstanding Oasis Common Stock have been duly and validly issued, and
are fully paid and nonassessable. No shares of Oasis Common Stock were
issued in violation of preemptive rights of any past or present holder of
any Oasis Common Stock. Except as set forth on Schedule 5.05, there are no
outstanding warrants, options, rights, calls or other commitments of any
nature relating to Oasis Common Stock and there are no outstanding
securities of Oasis Convertible into or exchangeable for any Oasis Common
Stock. Except as set forth on Schedule 5.05, Oasis is not obligated to
issue or repurchase any Oasis Common Stock for any reason and no person or
entity has any right or privilege (whether preemptive or contractual) for
the purchase, subscription or issuance of any unissued Oasis Common Stock.
SECTION 5.06. FINANCIAL STATEMENTS. Attached hereto as Schedule
5.06(a), is the audited financial statements of Oasis for the year ended
December 31, 2000, and the unaudited financial statements for the period
ended September 30, 2001, which reflect the results of operation and
financial condition of Oasis for such periods and at such dates (the "Oasis
Financial Statements"). Except as disclosed in Schedule 5.06(b), to the
best of Oasis's or the Oasis Shareholders' knowledge, as of their
respective dates (or if amended or superseded by a subsequent report
created prior to the date of this Agreement, then as of the date of such
subsequent report), the Oasis Financial Statements did not contain any
untrue statement of a material fact or omit to state a material fact
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required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Except as disclosed in Schedule 5.06(b), to the best of Oasis's or the
Oasis Shareholders' knowledge, the Oasis Financial Statements present
fairly the financial position of Oasis as of the dates indicated and
present fairly the results of operations of Oasis for the periods then
ended, and are in accordance with the books and records of Oasis, which are
complete and correct in all material respects.
SECTION 5.07. ABSENCE OF CHANGES. Since September 30, 2001, Oasis
has conducted its business only in the ordinary course and has not, except
as set forth in Schedule 5.07:
(a) suffered any material adverse change in its working capital,
condition (financial or otherwise), assets, liabilities, reserves,
business or operations;
(b) paid, discharged or satisfied any material liability other than
in the ordinary course of business;
(c) written off as uncollectible any account receivable other than
in the ordinary course of business or suffered an impairment of any
other asset (or is aware of any facts that would result in such
write-off or impairment);
(d) compromised any debts, claims or rights or disposed of any of
its properties or assets other than in the ordinary course of business;
(e) entered into any commitments or transactions not in the
ordinary course of business involving aggregate value in excess of
$25,000 or made aggregate capital expenditures or commitments in excess
of $25,000;
(f) made any material change in any method of accounting or
accounting practice;
(g) subjected any of its assets, tangible or intangible, to any
Lien, encumbrance or restriction of any nature whatsoever, except for
liens for current property taxes not yet due and payable;
(h) hired, committed to hire or terminated any employee other than
in the ordinary course of business;
(i) except for payments, dividends or distributions consistent with
past practices for prior periods, declared, set aside or made any
payment, dividend or other distribution to any holder of Oasis Common
Stock or purchased, redeemed or otherwise acquired, directly or
indirectly, any Oasis Common Stock;
(j) terminated or amended any material contract, license or other
instrument to which Oasis is a party or suffered any loss or termination
or threatened loss or termination of any existing business arrangement
or material supplier, the termination or loss of which, in the
aggregate, would have a Oasis Material Adverse Effect;
(k) effected any change in its capital structure;
(l) (i) incurred, assumed or refinanced any Indebtedness other than
in the ordinary course of business consistent with past practice, or
(ii) made any loans, advances or capital contributions to, or
investments in, any Person other than an Oasis Subsidiary or any
employee or officer as a cash advance, in each case in the ordinary
course of business and consistent with past practice;
(m) paid, discharged or satisfied any liability, obligation, or
Lien other than payment, discharge or satisfaction of (i) Indebtedness
as it matures and become due and payable or (ii) liabilities,
obligations or Liens in the ordinary course of business consistent with
past practice;
(n) changed any of the accounting or tax principles, practices or
methods used by Oasis, except as required by changes in applicable Tax
Laws or changed reserve amounts or policies;
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(o) (i) entered into any employment contract or other arrangement
or made any change in the compensation payable or to become payable to
any of the officers of Oasis or Persons acting in a similar capacity or
Affiliates in the ordinary course consistent with past practice, (ii)
terminated or entered into or amended any employment, severance,
consulting, termination or other agreement or employee benefit plan, and
except for cash advances made in the ordinary course of business
consistent with past practice, (iii) paid any bonuses payable or to
become payable to any of the officers of Oasis or Persons acting in a
similar capacity or (iv) made any change in its existing borrowing or
lending arrangements for or on behalf of any of such Persons pursuant to
an employee benefit plan or otherwise;
(p) (i) paid or made any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any
existing plan, agreement or arrangement to any Affiliate, officer,
employee or Person acting in a similar capacity, or paid or agreed to
pay or made any accrual or arrangement for payment to any Affiliate,
officers, employees or Persons acting in a similar capacity of any
amount relating to unused vacation days, except payments and accruals
made in the ordinary course consistent with past practice, (ii) granted,
issued, accelerated or accrued salary or other payments or benefits
pursuant to any pension, profit-sharing, bonus, extra compensation,
incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, retirement or other
employee benefit plan, agreement or arrangement, or any employment or
consulting agreement with or for the benefit of any Affiliate, officer,
employee, agent or consultant or Person acting in a similar capacity,
whether past or present or (iii) or amended in any material respect any
such existing plan, agreement or arrangement to effect any of the
foregoing;
(q) made any payments (other than regular compensation and cash
advances payable to officers and employees or Persons acting in a
similar capacity of Oasis in the ordinary course consistent with past
practice), loans, advances or other distributions, or enter into any
transaction, agreement or arrangement with, the Oasis Shareholders, any
Oasis Affiliates, officers, employees, agents, consultants or Persons
acting in a similar capacity, stockholders of their Affiliates,
associates or family members;
(r) settled or compromised any Tax liability or agreed to any
adjustment of any Tax attribute or made any election with respect to
Taxes;
(s) (i) made any change in its working capital practices generally,
including accelerating any collections of cash or accounts receivable or
deferring payments or (ii) failed to make timely accruals, including
with respect to accounts payable and liabilities incurred in the
ordinary course of business;
(t) failed to renew (at levels consistent with presently existing
levels), terminated or amended or failed to perform any of its
obligations or permitted any material default to exist or caused any
material breach under, or entered into (except for renewals in the
ordinary course of business consistent with past practice), any policy
of insurance;
(u) except in the ordinary course of business consistent with past
practice pursuant to appropriate confidentiality agreements, and except
as required by any Law or any existing agreements set forth on Schedule
5.19 or as may be reasonably necessary to secure or protect intellectual
or other property rights of Oasis, provided any confidential information
to any Person other than Rainwire; or
(v) agreed, whether in writing or otherwise, to take any action
described in this Section 5.07.
SECTION 5.08. NO UNDISCLOSED LIABILITIES. To the best of Oasis's or
the Oasis Shareholders' knowledge, Oasis does not have any liabilities,
other than those liabilities which have been adequately reflected in or
provided for in the Oasis Financial Statements or as shown on Schedule 5.08
hereto.
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SECTION 5.09. LITIGATION, ETC. Except as listed on Schedule 5.09
hereto and except for matters that are covered by Oasis's insurance (taking
into account any applicable limits on coverage), (a) there are no claims,
lawsuits, actions, arbitrations, administrative or other proceedings
pending (a "Claim") against Oasis, or to the knowledge of Oasis, no such
matter is threatened, and there is no basis for any such action, (b) to the
knowledge of Oasis, there are no governmental or administrative
investigations or inquiries pending that involve Oasis, (c) there are no
judgments against or consent decrees binding on Oasis or its assets or
which may have an adverse effect on, the business or goodwill of Oasis; and
(d) all Claims have been reported to the appropriate insurance carrier and,
to the knowledge of Oasis, Oasis has not received a notice of denial of
coverage or a reservation of rights. A list of all outstanding Claims
against Oasis is set forth on Schedule 5.15.
SECTION 5.10. NO VIOLATION OF LAW. Oasis has not been or is not
currently in violation of any applicable local, state or federal law,
ordinance, regulation, order, injunction or decree, or any other
requirement of any governmental body, agency or authority or court binding
on it, or relating to its property or business or its advertising, sales or
pricing practices, except for any such violations as would not individually
or in the aggregate have a Oasis Material Adverse Effect.
SECTION 5.11. REAL AND PERSONAL PROPERTY.
(a) Schedule 5.11(a) sets forth a list of all items of material
personal and mixed, tangible and intangible property, rights and assets
owned or leased by Oasis. Except as set forth on Schedule 5.11(a), Oasis
(i) has good and valid title to all of the personal and mixed, tangible and
intangible property, rights and assets which it purports to own, including
all the personal property and assets reflected in the Oasis Financial
Statements; and (ii) owns such rights, assets and personal property free
and clear of all Liens, encumbrances or restrictions of any nature
whatsoever (except for current year ad valorem taxes).
(b) Schedule 5.11(b) contains a true and correct description of all
real property owned or leased by Oasis, including all improvements located
thereon. Except as set forth on Schedule 5.11(b), Oasis has good and
marketable title to all real property owned by it, free and clear of any
Liens, encumbrances or restrictions of any nature whatsoever. Rainwire has
been furnished with true, correct and complete copies of all leases, deeds,
easements and other documents and instruments concerning the matters listed
on Schedule 5.11(b). No condemnation or similar actions are currently in
effect or pending against any part of any real property owned or leased by
Oasis or, to the knowledge of Oasis, no such action is threatened against
any such real property. There are no encroachments, leases, easements,
covenants, restrictions, reservations or other burdens of any nature which
might impair in any material respect the use of any owned or leased real
property in a manner consistent with past practices nor does any part of
any building structure or any other improvement thereon encroach on any
other property.
(c) The assets owned or leased by Oasis (including all buildings and
improvements in connection therewith) are in good operating condition and
repair, ordinary wear and tear excepted, and such assets (together with any
assets leased by Oasis) include all rights, properties, interests in
properties, and assets necessary to permit Oasis to carry on its business
as presently conducted following the Share Exchange.
SECTION 5.12. CONTRACTS AND COMMITMENTS.
(a) Schedule 5.12 contains a complete and accurate list of all
contracts, agreements, commitments, instruments and obligations (whether
written or oral, contingent or otherwise) of Oasis of or concerning the
following matters which involve (i) payments by or to Oasis in excess of
$5,000, (ii) performance by or for Oasis of services or obligations the
value of which is in excess of $5,000, or
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(iii) performance by or for Oasis of services or obligations for greater
than 90 days (the "Oasis Agreements"):
(i) the lease (as lessee or lessor) or license (as licensee or
licensor) of any real or personal property (tangible or intangible);
(ii) the employment or engagement of any officer, director,
employee, consultant or agent;
(iii) any relationship with any Oasis Shareholder, or any person or
entity affiliated with or related to any Oasis Shareholder or any
officer, director, employee, consultant or agent of Oasis;
(iv) any arrangement limiting the freedom of Oasis to compete in
any manner in any line of business;
(v) any arrangement that could reasonably be anticipated to have a
Oasis Material Adverse Effect;
(vi) any arrangement not in the ordinary course of business;
(vii) any power of attorney, whether limited or general, granted by
or to Oasis;
(viii) any agreements relating to the making of any loan or advance
by Oasis;
(ix) any agreements providing for the indemnification by Oasis of
any Person;
(x) any agreements with any Authority except those entered into in
the ordinary course of business which are not material to Oasis;
(xi) any broker, distributor, dealer or representative or agency
agreements pursuant to which Oasis made payments in excess of $25,000
during the preceding fiscal year;
(xii) any agreements (including settlement agreements) currently in
effect pursuant to which Oasis licenses the right to use any
Intellectual Property to any Person or from any Person (other than
license agreements related to off-the-shelf software products);
(xiii) any confidentiality agreements entered into by Oasis during
the period commencing three years prior to the date hereof pursuant to
which confidential information has been provided to a third party or by
which Oasis was restricted from providing information to third parties,
other than confidentiality agreements entered into in the normal course
of business;
(xiv) any voting trust or similar agreements relating to any of the
ownership interests in Oasis to which any of the Oasis Shareholders or
Oasis is a party;
(xv) any joint venture, partnership or similar documents or
agreements; and
(xvi) any agreement that materially limits or purports to
materially limit the ability of Oasis to own, operate, sell, transfer,
pledge or otherwise dispose of any assets.
(b) Oasis has delivered or will deliver to Rainwire true and complete
copies of all Oasis Agreements. Except as indicated on Schedule 5.12, the
Oasis Agreements are valid and enforceable in accordance with their terms
(except to the extent limited by equitable principles or bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally) and there is not under any of such contracts (i) any existing or
claimed default by Oasis or event which with the notice or lapse of time,
or both, would constitute a default by Oasis or (ii) to the knowledge of
Oasis, any existing or claimed default by any other party or event which
with notice or lapse of time, or both, would constitute a default by any
such party. Except as indicated on Schedule 5.12, the continuation validity
and enforceability of the Oasis Agreements will not be affected by the
Share Exchange and the Share Exchange will not result in a breach of, or
default under, or require the consent of any other party to any of the
Oasis Agreements. Except as set forth on Schedule 5.12, there is no actual
or, to the knowledge of Oasis, threatened termination, cancellation or
limitation of any Oasis Agreements that would have a Oasis Material Adverse
Effect. To the knowledge of Oasis, there is no
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pending or threatened bankruptcy, insolvency or similar proceeding with
respect to any other party to the Oasis Agreements.
SECTION 5.13. EMPLOYMENT AND LABOR MATTERS.
(a) Schedule 5.13(a) sets forth (i) the number of full-time and
part-time employees of Oasis and (ii) the name and compensation paid to
each employee of or consultant to Oasis who currently receives or has
received salary, benefits and bonuses for the two most recently ended
fiscal years in excess of $50,000.
(b) Oasis is in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, occupational safety and health,
including the National Labor Relations Act, the Immigration Reform and
Control Act of 1986, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, 42 U.S.C. Section 1981, the Americans With Disabilities
Act, the Fair Labor Standards Act, ERISA, the Occupational Safety and
Health Act, the Family Medical Leave Act, and any other law, ordinance or
regulation respecting the terms and conditions of employment, including
authorization to work in the United States, equal employment opportunity
(including prohibitions against discrimination, harassment, and
retaliation), payment of wages, hours of work, occupational safety and
health, and labor practices.
(c) Except as disclosed on Schedule 5.13(c),
(i) there are no charges, governmental audits, investigations,
administrative proceedings or complaints concerning Oasis's employment
practices pending or, to the knowledge of Oasis, threatened before any
federal, state or local agency or court, and, to the knowledge of Oasis,
no basis for any such matter exists;
(ii) Oasis is not a party to any union or collective bargaining
agreement, and, to the knowledge of Oasis, no union attempts to organize
the employees of Oasis have been made, nor are any such attempts now
threatened; and
(iii) there are no pending or, to the knowledge of Oasis,
threatened material claims by any current or former employee of Oasis or
any employment-related claims or investigations by any Authority,
including any charges to the Equal Employment Opportunity Commission or
state employment practice agency, investigations regarding compliance
with federal, state or local wage and hour laws, audits by the Office of
Federal Contractor Compliance Programs, complaints of sexual harassment
or any other form of unlawful harassment, discrimination, or
retaliation.
SECTION 5.14. EMPLOYEE BENEFIT MATTERS. Schedule 5.14 attached
hereto sets forth a description of all "Employee Welfare Benefit Plans" and
"Employee Pension Benefit Plans" (as defined in Sections 3(1) and 3(2),
respectively, of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) existing on the date hereof that are or have been
maintained or contributed to by Oasis. Except as listed on Schedule 5.14,
Oasis does not maintain any retirement or deferred compensation plan,
savings, incentive, stock option or stock purchase plan, unemployment
compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance or hospitalization program or any other fringe
benefit arrangement for any employee, consultant or agent of Oasis, whether
pursuant to contract, arrangement, custom or informal understanding, which
do not constitute an "Employee Benefit Plan" (as defined in Section 3(3) of
ERISA), for which Oasis may have any ongoing material liability after
Closing. Oasis does not maintain nor has it ever contributed to any
Multi-Employer Plan as defined by Section 3(37) of ERISA. Oasis does not
currently maintain any Employee Pension Benefit Plan subject to Title IV of
ERISA. There have been no "prohibited transactions" (as described in
Section 406 of ERISA or Section 4975 of the Code) with respect to any
Employee Pension Benefit Plan or Employee Welfare Benefit Plan maintained
by Oasis as to which Oasis has been a party. As to any employee pension
benefit plan listed on Schedule 5.14 and subject to Title IV of ERISA,
there have been no reportable events (as such term is defined in Section
4043 of ERISA).
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SECTION 5.15. INSURANCE POLICIES. Attached hereto as Schedule 5.15
is a list of all insurance policies of Oasis setting forth with respect to
each policy the name of the insurer, a description of the policy, the
dollar amount of coverage, the amount of the premium, the date through
which all premiums have been paid, and the expiration date. Each insurance
policy relating to the insurance referred to in Schedule 5.15 is in full
force and effect, is valid and enforceable, and Oasis is not in breach of
or in default under any such policy. All policies listed on Schedule 5.15
will be outstanding and duly in force at the Closing Date, the premiums
payable in respect of such policies have been paid or will be paid in full
prior to the closing date, and none of such policies provide for any
retrospective premium adjustment or other experience based liability on the
part of Oasis. Oasis has not received any notice of or any reason to
believe that there is or has been any actual, threatened, or contemplated
termination or cancellation of any insurance policy relating to the said
insurance. Oasis has not since inception (a) been denied or had revoked,
canceled or rescinded any policy of insurance, or (b) self insured against
any risk ordinarily insured against by similar businesses. Schedule 5.15
contains a true, correct and complete list and summary of all claims which
have been made under each insurance policy relating to the said insurance.
Oasis has not failed to give any notice or to present any claim under any
insurance policy in a due and timely fashion, and to the best of its
knowledge, all insurable risks are adequately covered by insurance except
for any exposure occasioned by lack of Directors' and Officers' insurance
coverage.
SECTION 5.16. TAXES. Except as set forth on Schedule 5.16, Oasis has
filed or obtained filing extensions for all tax returns, federal, state,
county, and local, including payroll taxes, required to be filed by it, and
Oasis has paid or established adequate reserves (in accordance with
generally accepted accounting principles) for the payment of all taxes
shown to be due by such returns as well as all other taxes, assessments,
and governmental charges which have become due or payable, including,
without limitation, all taxes which Oasis is obligated to withhold from
amounts owing to employees, creditors, and third parties. The federal
income tax returns of Oasis have never been audited by the Internal Revenue
Service and no state income or sales tax returns of Oasis have been
audited. No deficiency assessment with respect to or proposed adjustment of
Oasis's federal, state, county, or local taxes, including payroll taxes, is
pending or, to the best of Oasis's knowledge, threatened. There is no tax
lien, whether imposed by any federal, state, county, or local taxing
authority, outstanding against the assets, properties, or business of Oasis
(other than liens for taxes not yet due and payable). Neither Oasis nor any
of its shareholders have ever filed a consent pertaining to Oasis pursuant
to Section 341(f) of the IRC (as hereinafter defined), relating to
collapsible corporations.
SECTION 5.17. INTERESTED TRANSACTIONS. Except as provided on
Schedule 5.17, Oasis is not a party to any contract, loan or other
transaction with any Oasis Shareholder nor does Oasis have any direct or
indirect interest in or affiliation with any Oasis Shareholder to any such
contract, loan or other transaction. No Oasis Shareholder is an employee,
consultant, partner, principal, director or owner of, or has any other
direct or indirect interest in or affiliation with, any person or business
entity that is engaged in a business that competes with or is similar to
the business of Oasis.
SECTION 5.18. INTELLECTUAL PROPERTY.
(a) Attached hereto as Schedule 5.18 is a true, correct and complete
list of all of Oasis's patents, trademarks, trade names, or trademark or
trade name registrations, domain name registrations, service marks, and
copyrights or copyright registrations (the "Proprietary Rights"). All of
Oasis's Proprietary Rights are valid, enforceable, in full force and effect
and free and clear of any and all security interests, liens, pledges and
encumbrances of any nature or kind. Oasis has not infringed upon and are
not infringing upon any patent, trademark, trade name, or trademark or
trade name registration, service mark, copyright, or copyright registration
of any other Person.
(b) No trade secret or confidential know-how material to the business
of Oasis as currently operated has been disclosed or authorized to be
disclosed to any third party, other than pursuant to a non-disclosure
agreement that protects Oasis's proprietary interests in and to such trade
secrets and confidential know-how, and other than disclosures to employees,
officers, directors, agents, attorneys,
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accountants, consultants, independent contractors or other representatives
of Oasis, each of whom is obligated (by contract, employment policy,
cannons of ethics or the like) to maintain the confidentiality of such
information.
(c) The consummation of the transactions contemplated hereby will not
result in the loss or impairment of the right of Rainwire or any of its
successors to own, use, license or sublicense any of the Intellectual
Property currently owned, used, licensed or sublicensed by Oasis nor will
it require the consent of any Authority or third party in respect of any
such Intellectual Property and no present or former employee, or officer of
Oasis has any right, title or interest, directly or indirectly, in whole or
in part, in any Intellectual Property.
SECTION 5.19. REQUIRED VOTE OF OASIS SHAREHOLDERS. The affirmative
vote of the holders of a majority of the outstanding shares of Oasis Common
Stock to adopt this Agreement and approve the Share Exchange is the only
vote of the holders of any class or series of Oasis Capital Stock necessary
to adopt this Agreement and approve the Share Exchange and the other
transactions contemplated hereby.
SECTION 5.20. BROKERAGE. Except as disclosed on Schedule 5.20,
neither Oasis, nor any Oasis Shareholder has employed any broker, finder,
advisor, consultant or other intermediary in connection with this Agreement
or the transactions contemplated by this Agreement who is or might be
entitled to any fee, commission or other compensation from Oasis, or from
Rainwire or its Affiliates, upon or as a result of the execution of this
Agreement or the consummation of the transactions contemplated hereby. Such
fee shall be borne by the Oasis Shareholders and not by Oasis or Rainwire.
SECTION 5.21. STATEMENTS TRUE AND CORRECT.
(a) No representation or warranty made herein by Oasis or any of the
Oasis Shareholders, nor in any statement, certificate or instrument to be
furnished to Rainwire by Oasis or any of the Oasis Shareholders pursuant to
any Share Exchange Document, contains or will contain any untrue statement
of material fact or omits or will omit to state a material fact necessary,
in light of the circumstances under which it was made, to make these
statements contained herein and therein not misleading.
(b) None of the information supplied or to be supplied by Oasis for
inclusion or incorporation by reference into the Form S-4 will, at the time
the Form S-4 is filed with the SEC, at any time the Form S-4 is amended or
supplemented, at the time the Form S-4 becomes effective under the
Securities Act and the Exchange Act or on the date it is first mailed to
holders of Oasis Common Stock, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they will be made, not misleading.
(c) Notwithstanding the foregoing provisions of Section 5.21(b), no
representation or warranty is made by Oasis with respect to information
supplied or to be supplied by Rainwire for inclusion or incorporation by
reference into the Form S-4 nor with respect to any statements made or
incorporated by reference in the Form S-4 based in whole or in part upon
such information.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF RAINWIRE
Rainwire hereby represents and warrants to Oasis as follows:
SECTION 6.01. ORGANIZATION, AUTHORITY AND CAPACITY. Rainwire is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Rainwire has the full power and authority
necessary to (a) execute, deliver and perform its obligations under the
Share Exchange Documents to be executed and delivered by it, and (b) carry
on its business as it has been and is now being conducted and to own and
lease the properties and assets which it now owns or
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leases. Rainwire is duly qualified to do business and is in good standing
in the jurisdictions set forth on Schedule 6.01, which includes every state
of the United States in which the conduct of the business and the ownership
of such properties and assets requires it to be so qualified.
SECTION 6.02. AUTHORIZATION AND VALIDITY. The execution, delivery
and performance of the Share Exchange Documents to be executed and
delivered by Rainwire have been duly authorized by all necessary corporate
action by Rainwire, and the Board of Directors has recommended that the
Shareholders of Rainwire approve the Share Exchange and the transactions
contemplated thereby be submitted for consideration to its shareholders.
The Share Exchange Documents to be executed and delivered by Rainwire have
been or will be, as the case may be, duly executed and delivered by
Rainwire and constitute or will constitute the legal, valid and binding
obligations of Rainwire, enforceable in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, or other laws
affecting creditors' rights generally, or as may be modified by a court of
equity.
SECTION 6.03. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED
CONSENTS. Except as set forth on Schedule 6.03, the execution, delivery
and performance by Rainwire of the Share Exchange Documents to be executed
and delivered by it: (a) do not require the consent of or notice to any
Authority or any other third party (except for those required under or in
relation to State Securities or "blue sky" laws, the Securities Act, and
the GCDL with respect to the filing of the Certificate of Share Exchange);
(b) will not conflict with any provision of Rainwire's articles or
certificate of incorporation or bylaws; (c) do not conflict with or result
in a violation of any law, ordinance, regulation, ruling, judgment, order
or injunction of any court or governmental instrumentality to which
Rainwire is a party or by which Rainwire or any of its respective
properties are bound; (d) do not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, require
any notice under, or accelerate or permit the acceleration of any
performance required by the terms of any Rainwire Material Agreement; and
(e) will not create any lien, encumbrance or restriction upon any of the
assets or properties of Rainwire.
SECTION 6.04. GOVERNING DOCUMENTS. True and correct copies of the
organizational documents and all amendments thereto of Rainwire and copies
of the bylaws of Rainwire have been provided to Oasis. Oasis has previously
been provided with access to Rainwire's minutes, and such minutes
accurately reflect all proceedings of the shareholders and board of
directors of Rainwire (and all committees thereof).
SECTION 6.05. OUTSTANDING AND AUTHORIZED CAPITALIZATION. The
authorized capital stock of Rainwire consists of 20,000,000 shares of
Rainwire Common Stock and 2,500,000 shares of Rainwire Preferred Stock. As
of the date of this Agreement, Rainwire has 9,909,886 shares of Rainwire
Common Stock issued and outstanding, 24,960 shares of Series C Preferred
Stock issued and outstanding, and 500,000 Shares of Series D Convertible
Preferred Stock issued and outstanding. All issued and outstanding shares
of Rainwire Common and Preferred Stock have been duly and validly issued,
and are fully paid and non-assessable. Except as set forth in Schedule
6.05, there are no outstanding warrants, options, rights, calls or other
commitments of any nature relating to shares of capital stock of Rainwire,
no outstanding securities convertible into or exchangeable for shares of
capital stock of Rainwire, and, Rainwire is not obligated to issue or
repurchase any of its shares of capital stock for any reason and no person
or entity has any right or privilege (whether preemptive or contractual)
for the purchase, subscription or issuance of any unissued shares of
capital stock of Rainwire. Except as set forth in Schedule 6.05 or the
Certificate of Incorporation, as amended, Rainwire has no obligation or
right (contingent or other) to purchase, redeem, or otherwise acquire any
of its equity securities or any interests therein or to pay any dividend or
make any other distribution in respect thereof. Except as set forth in
Schedule 6.05, there are no voting trusts or agreements nor any preemptive
rights relating to any outstanding securities of Rainwire (whether or not
Rainwire is a party thereto). No shares of Rainwire Common Stock are held
in Rainwire's treasury. All outstanding securities of Rainwire were issued
in compliance with all applicable federal
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and state securities laws. All Rainwire Common Stock to be issued in
connection with the Share Exchange will be duly and validly issued, fully
paid and nonassessable.
SECTION 6.06. REPORTS AND FINANCIAL STATEMENTS. Rainwire shall
complete, file and make available to Oasis (including through the SEC's
EDGAR system) true and complete copies of: (a) Rainwire's Annual Report on
Form 10-KSB filed with the SEC for the fiscal year ending December 31,
2000; (b) Rainwire's Quarterly Report on Form 10-QSB filed with the SEC for
the quarter ended March 31, 2001; (c) Rainwire's Quarterly Report on Form
10-QSB filed with the SEC for the quarter ended June 30, 2001; and (d)
Rainwire's Quarterly Report on Form 10-QSB filed with the SEC for the
quarter ended September 30, 2001 (individually a "SEC Report" and
collectively, the "SEC Reports"). To the best of Rainwire's knowledge, the
audited consolidated financial statements and unaudited consolidated
interim financial statements included in Rainwire SEC Reports (including
any related notes and schedules) complied as to form, as of their
respective dates of filing with the SEC, in all material respects with all
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, were prepared in accordance with GAAP
consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto, and except that unaudited statements do not
contain footnotes in substance or form required by GAAP, as is permitted by
Form 10-QSB of the Exchange Act) and fairly presented the financial
position of Rainwire and its consolidated Subsidiaries as of the dates
thereof and the results of operations and cash flows for the periods or as
of the dates then ended (subject, where appropriate, to normal year-end
adjustments).
SECTION 6.07. ABSENCE OF CHANGES. Since September 30, 2001, Rainwire
has conducted its business only in the ordinary course and has not, except
as set forth in the SEC Reports or Schedule 6.07:
(a) suffered any material adverse change in its working capital,
condition (financial or otherwise), assets, liabilities, reserves,
business or operations;
(b) paid, discharged or satisfied any material liability other than
in the ordinary course of business;
(c) written off as uncollectible any account receivable other than
in the ordinary course of business or suffered an impairment of any
other asset (or is aware of any facts that would result in such
write-off or impairment);
(d) compromised any debts, claims or rights or disposed of any of
its properties or assets other than in the ordinary course of business;
(e) entered into any commitments or transactions not in the
ordinary course of business involving aggregate value in excess of
$25,000 or made aggregate capital expenditures or commitments in excess
of $25,000;
(f) made any material change in any method of accounting or
accounting practice;
(g) subjected any of its assets, tangible or intangible, to any
Lien, encumbrance or restriction of any nature whatsoever, except for
liens for current property taxes not yet due and payable;
(h) hired, committed to hire or terminated any employee other than
in the ordinary course of business;
(i) except for payments, dividends or distributions consistent with
past practices for prior periods, declared, set aside or made any
payment, dividend or other distribution to any holder of Rainwire Common
Stock or purchased, redeemed or otherwise acquired, directly or
indirectly, any Rainwire Common Stock;
(j) terminated or amended any material contract, license or other
instrument to which Rainwire is a party or suffered any loss or
termination or threatened loss or termination of any
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existing business arrangement or material supplier, the termination or
loss of which, in the aggregate, would have a Rainwire Material Adverse
Effect;
(k) effected any change in its capital structure;
(l) (i) incurred, assumed or refinanced any Indebtedness other than
in the ordinary course of business consistent with past practice, or
(ii) made any loans, advances or capital contributions to, or
investments in, any Person other than an Rainwire Subsidiary or any
employee or officer as a cash advance, in each case in the ordinary
course of business and consistent with past practice;
(m) paid, discharged or satisfied any liability, obligation, or
Lien other than payment, discharge or satisfaction of (i) Indebtedness
as it matures and become due and payable or (ii) liabilities,
obligations or Liens in the ordinary course of business consistent with
past practice;
(n) changed any of the accounting or tax principles, practices or
methods used by Rainwire, except as required by changes in applicable
Tax Laws or changed reserve amounts or policies;
(o) (i) entered into any employment contract or other arrangement
or made any change in the compensation payable or to become payable to
any of the officers of Rainwire or Persons acting in a similar capacity
or Affiliates in the ordinary course consistent with past practice, (ii)
terminated or entered into or amended any employment, severance,
consulting, termination or other agreement or employee benefit plan, and
except for cash advances made in the ordinary course of business
consistent with past practice, (iii) paid any bonuses payable or to
become payable to any of the officers of Rainwire or Persons acting in a
similar capacity or (iv) made any change in its existing borrowing or
lending arrangements for or on behalf of any of such Persons pursuant to
an employee benefit plan or otherwise;
(p) (i) paid or made any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any
existing plan, agreement or arrangement to any Affiliate, officer,
employee or Person acting in a similar capacity, or paid or agreed to
pay or made any accrual or arrangement for payment to any Affiliate,
officers, employees or Persons acting in a similar capacity of any
amount relating to unused vacation days, except payments and accruals
made in the ordinary course consistent with past practice, (ii) granted,
issued, accelerated or accrued salary or other payments or benefits
pursuant to any pension, profit-sharing, bonus, extra compensation,
incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, retirement or other
employee benefit plan, agreement or arrangement, or any employment or
consulting agreement with or for the benefit of any Affiliate, officer,
employee, agent or consultant or Person acting in a similar capacity,
whether past or present or (iii) or amended in any material respect any
such existing plan, agreement or arrangement to effect any of the
foregoing;
(q) made any payments (other than regular compensation and cash
advances payable to officers and employees or Persons acting in a
similar capacity of Rainwire in the ordinary course consistent with past
practice), loans, advances or other distributions, or enter into any
transaction, agreement or arrangement with, the Rainwire Shareholders,
any Rainwire Affiliates, officers, employees, agents, consultants or
Persons acting in a similar capacity, stockholders of their Affiliates,
associates or family members;
(r) settled or compromised any Tax liability or agreed to any
adjustment of any Tax attribute or made any election with respect to
Taxes;
(s) (i) made any change in its working capital practices generally,
including accelerating any collections of cash or accounts receivable or
deferring payments or (ii) failed to make timely accruals, including
with respect to accounts payable and liabilities incurred in the
ordinary course of business;
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(t) failed to renew (at levels consistent with presently existing
levels), terminated or amended or failed to perform any of its
obligations or permitted any material default to exist or caused any
material breach under, or entered into (except for renewals in the
ordinary course of business consistent with past practice), any policy
of insurance;
(u) except in the ordinary course of business consistent with past
practice pursuant to appropriate confidentiality agreements, and except
as required by any Law or as may be reasonably necessary to secure or
protect intellectual or other property rights of Rainwire, provided any
confidential information to any Person other than Rainwire; or
(v) agreed, whether in writing or otherwise, to take any action
described in this Section 6.07.
SECTION 6.08. NO UNDISCLOSED LIABILITIES. To the best of Rainwire's
knowledge, neither Rainwire nor any of its Subsidiaries have any
Liabilities or obligations of any nature, whether or not accrued,
contingent or otherwise, except (a) Liabilities or obligations reflected in
any of the SEC Reports, (b) Liabilities incurred in the ordinary course of
business since the date of the most recent SEC Reports, or (c) Liabilities
or obligations that would not, individually or in the aggregate, have an
Rainwire Material Adverse Effect.
SECTION 6.09. LITIGATION, ETC. Except as listed on Schedule 6.09
hereto and except for matters that are covered by Rainwire's insurance
(taking into account any applicable limits on coverage), (a) there are no
claims, lawsuits, actions, arbitrations, administrative or other
proceedings pending (a "Claim") against Rainwire, or to the knowledge of
Rainwire, no such matter is threatened, and there is no basis for any such
action, (b) to the knowledge of Rainwire, there are no governmental or
administrative investigations or inquiries pending that involve Rainwire,
(c) there are no judgments against or consent decrees binding on Rainwire
or its assets or which may have an adverse effect on, the business or
goodwill of Rainwire; and (d) all Claims have been reported to the
appropriate insurance carrier and, to the knowledge of Rainwire, Rainwire
has not received a notice of denial of coverage or a reservation of rights.
A list of all outstanding Claims against Rainwire is set forth on Schedule
6.15.
SECTION 6.10. NO VIOLATION OF LAW. The business of Rainwire and its
Subsidiaries have not been and are not currently in violation of no local,
state or federal law, ordinance, regulation, order, injunction or decree,
or any other requirement of any governmental body except (a) as described
in any of the SEC Reports and (b) for violations that would not,
individually or in the aggregate, have an Rainwire Material Adverse Effect.
SECTION 6.11. REAL AND PERSONAL PROPERTY.
(a) Schedule 6.11(a) sets forth a list of all items of material
personal and mixed, tangible and intangible property, rights and assets
owned or leased by Rainwire. Except as set forth on Schedule 6.11(a),
Rainwire (i) has good and valid title to all of the personal and mixed,
tangible and intangible property, rights and assets which it purports to
own, including all the personal property and assets reflected in the
Rainwire Financial Statements; and (ii) owns such rights, assets and
personal property free and clear of all Liens, encumbrances or restrictions
of any nature whatsoever (except for current year ad valorem taxes).
(b) Schedule 6.11(b) contains a true and correct description of all
real property owned or leased by Rainwire, including all improvements
located thereon. Except as set forth on Schedule 6.11(b), Rainwire has good
and marketable title to all real property owned by it, free and clear of
any Liens, encumbrances or restrictions of any nature whatsoever. Oasis has
been furnished with true, correct and complete copies of all leases, deeds,
easements and other documents and instruments concerning the matters listed
on Schedule 6.11(b). No condemnation or similar actions are currently in
effect or pending against any part of any real property owned or leased by
Rainwire or, to the knowledge of Rainwire, no such action is threatened
against any such real property. There are no encroachments, leases,
easements, covenants, restrictions, reservations or other burdens of any
nature which might
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impair in any material respect the use of any owned or leased real property
in a manner consistent with past practices nor does any part of any
building structure or any other improvement thereon encroach on any other
property.
(c) The assets owned or leased by Rainwire (including all buildings
and improvements in connection therewith) are in good operating condition
and repair, ordinary wear and tear excepted, and such assets (together with
any assets leased by Rainwire) include all rights, properties, interests in
properties, and assets necessary to permit Rainwire to carry on its
business as presently conducted following the Share Exchange.
SECTION 6.12. CONTRACTS AND COMMITMENTS.
(a) Schedule 6.12 contains a complete and accurate list of all
contracts, agreements, commitments, instruments and obligations (whether
written or oral, contingent or otherwise) of Rainwire of or concerning the
following matters which involve (i) payments by or to Rainwire in excess of
$5,000, (ii) performance by or for Rainwire of services or obligations the
value of which is in excess of $5,000, or (iii) performance by or for
Rainwire of services or obligations for greater than 90 days (the "Rainwire
Agreements"):
(i) the lease (as lessee or lessor) or license (as licensee or
licensor) of any real or personal property (tangible or intangible);
(ii) the employment or engagement of any officer, director,
employee, consultant or agent;
(iii) any relationship with any Rainwire Shareholder, or any person
or entity affiliated with or related to any Rainwire Shareholder or any
officer, director, employee, consultant or agent of Rainwire;
(iv) any arrangement limiting the freedom of Rainwire to compete in
any manner in any line of business;
(v) any arrangement that could reasonably be anticipated to have a
Rainwire Material Adverse Effect;
(vi) any arrangement not in the ordinary course of business;
(vii) any power of attorney, whether limited or general, granted by
or to Rainwire;
(viii) any agreements relating to the making of any loan or advance
by Rainwire;
(ix) any agreements providing for the indemnification by Rainwire
of any Person;
(x) any agreements with any Authority except those entered into in
the ordinary course of business which are not material to Rainwire;
(xi) any broker, distributor, dealer or representative or agency
agreements pursuant to which Rainwire made payments in excess of $25,000
during the preceding fiscal year;
(xii) any agreements (including settlement agreements) currently in
effect pursuant to which Rainwire licenses the right to use any
Intellectual Property to any Person or from any Person (other than
license agreements related to off-the-shelf software products);
(xiii) any confidentiality agreements entered into by Rainwire
during the period commencing three years prior to the date hereof
pursuant to which confidential information has been provided to a third
party or by which Rainwire was restricted from providing information to
third parties, other than confidentiality agreements entered into in the
normal course of business;
(xiv) any voting trust or similar agreements relating to any of the
ownership interests in Rainwire to which any of the Rainwire
Shareholders or Rainwire is a party;
(xv) any joint venture, partnership or similar documents or
agreements; and
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(xvi) any agreement that materially limits or purports to
materially limit the ability of Rainwire to own, operate, sell,
transfer, pledge or otherwise dispose of any assets.
(b) Rainwire has delivered or will deliver to Oasis true and complete
copies of all Rainwire Agreements. Except as indicated on Schedule 6.12,
the Rainwire Agreements are valid and enforceable in accordance with their
terms (except to the extent limited by equitable principles or bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally) and there is not under any of such contracts (i) any existing or
claimed default by Rainwire or event which with the notice or lapse of
time, or both, would constitute a default by Rainwire or (ii) to the
knowledge of Rainwire, any existing or claimed default by any other party
or event which with notice or lapse of time, or both, would constitute a
default by any such party. Except as indicated on Schedule 6.12, the
continuation validity and enforceability of the Rainwire Agreements will
not be affected by the Share Exchange and the Share Exchange will not
result in a breach of, or default under, or require the consent of any
other party to any of the Rainwire Agreements. Except as set forth on
Schedule 6.12, there is no actual or, to the knowledge of Rainwire,
threatened termination, cancellation or limitation of any Rainwire
Agreements that would have a Rainwire Material Adverse Effect. To the
knowledge of Rainwire, there is no pending or threatened bankruptcy,
insolvency or similar proceeding with respect to any other party to the
Rainwire Agreements.
SECTION 6.13. EMPLOYMENT AND LABOR MATTERS.
(a) Schedule 6.13(a) sets forth (i) the number of full-time and
part-time employees of Rainwire and (ii) the name and compensation paid to
each employee of or consultant to Rainwire who currently receives or has
received salary, benefits and bonuses for the two most recently ended
fiscal years in excess of $50,000.
(b) Rainwire is in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, occupational safety and health,
including the National Labor Relations Act, the Immigration Reform and
Control Act of 1986, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, 42 U.S.C. Section 1981, the Americans With Disabilities
Act, the Fair Labor Standards Act, ERISA, the Occupational Safety and
Health Act, the Family Medical Leave Act, and any other law, ordinance or
regulation respecting the terms and conditions of employment, including
authorization to work in the United States, equal employment opportunity
(including prohibitions against discrimination, harassment, and
retaliation), payment of wages, hours of work, occupational safety and
health, and labor practices.
(c) Except as disclosed on Schedule 6.13(c),
(i) there are no charges, governmental audits, investigations,
administrative proceedings or complaints concerning Rainwire's
employment practices pending or, to the knowledge of Rainwire,
threatened before any federal, state or local agency or court, and, to
the knowledge of Rainwire, no basis for any such matter exists;
(ii) Rainwire is not a party to any union or collective bargaining
agreement, and, to the knowledge of Rainwire, no union attempts to
organize the employees of Rainwire have been made, nor are any such
attempts now threatened; and
(iii) there are no pending or, to the knowledge of Rainwire,
threatened material claims by any current or former employee of Rainwire
or any employment-related claims or investigations by any Authority,
including any charges to the Equal Employment Opportunity Commission or
state employment practice agency, investigations regarding compliance
with federal, state or local wage and hour laws, audits by the Office of
Federal Contractor Compliance Programs, complaints of sexual harassment
or any other form of unlawful harassment, discrimination, or
retaliation.
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SECTION 6.14. EMPLOYEE BENEFIT MATTERS. Schedule 6.14 attached
hereto sets forth a description of all "Employee Welfare Benefit Plans" and
"Employee Pension Benefit Plans" (as defined in Sections 3(1) and 3(2),
respectively, of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) existing on the date hereof that are or have been
maintained or contributed to by Rainwire. Except as listed on Schedule
6.14, Rainwire does not maintain any retirement or deferred compensation
plan, savings, incentive, stock option or stock purchase plan, unemployment
compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance or hospitalization program or any other fringe
benefit arrangement for any employee, consultant or agent of Rainwire,
whether pursuant to contract, arrangement, custom or informal
understanding, which do not constitute an "Employee Benefit Plan" (as
defined in Section 3(3) of ERISA), for which Rainwire may have any ongoing
material liability after Closing. Oasis does not maintain nor has it ever
contributed to any Multi-Employer Plan as defined by Section 3(37) of
ERISA. Rainwire does not currently maintain any Employee Pension Benefit
Plan subject to Title IV of ERISA. There have been no "prohibited
transactions" (as described in Section 406 of ERISA or Section 4975 of the
Code) with respect to any Employee Pension Benefit Plan or Employee Welfare
Benefit Plan maintained by Rainwire as to which Rainwire has been a party.
As to any employee pension benefit plan listed on Schedule 6.14 and subject
to Title IV of ERISA, there have been no reportable events (as such term is
defined in Section 4043 of ERISA).
SECTION 6.15. INSURANCE POLICIES. Attached hereto as Schedule 6.15
is a list of all insurance policies of Rainwire setting forth with respect
to each policy the name of the insurer, a description of the policy, the
dollar amount of coverage, the amount of the premium, the date through
which all premiums have been paid, and the expiration date. Each insurance
policy relating to the insurance referred to in Schedule 6.15 is in full
force and effect, is valid and enforceable, and Rainwire is not in breach
of or in default under any such policy. All policies listed on Schedule
6.15 will be outstanding and duly in force at the Closing Date, the
premiums payable in respect of such policies have been paid or will be paid
in full prior to the closing date, and none of such policies provide for
any retrospective premium adjustment or other experience based liability on
the part of Rainwire. Rainwire has not received any notice of or any reason
to believe that there is or has been any actual, threatened, or
contemplated termination or cancellation of any insurance policy relating
to the said insurance. Rainwire has not since inception (a) been denied or
had revoked, canceled or rescinded any policy of insurance, or (b) self
insured against any risk ordinarily insured against by similar businesses.
Schedule 6.15 contains a true, correct and complete list and summary of all
claims which have been made under each insurance policy relating to the
said insurance. Rainwire has not failed to give any notice or to present
any claim under any insurance policy in a due and timely fashion, and to
the best of its knowledge, all insurable risks are adequately covered by
insurance except for any exposure occasioned by lack of Directors' and
Officers' insurance coverage.
SECTION 6.16. TAXES. Except as set forth on Schedule 6.16, Rainwire
has filed or obtained filing extensions for all tax returns, federal,
state, county, and local, including payroll taxes, required to be filed by
it, and Rainwire has paid or established adequate reserves (in accordance
with generally accepted accounting principles) for the payment of all taxes
shown to be due by such returns as well as all other taxes, assessments,
and governmental charges which have become due or payable, including,
without limitation, all taxes which Rainwire is obligated to withhold from
amounts owing to employees, creditors, and third parties. The federal
income tax returns of Rainwire have never been audited by the Internal
Revenue Service and no state income or sales tax returns of Rainwire have
been audited. No deficiency assessment with respect to or proposed
adjustment of Rainwire's federal, state, county, or local taxes, including
payroll taxes, is pending or, to the best of Rainwire's knowledge,
threatened. There is no tax lien, whether imposed by any federal, state,
county, or local taxing authority, outstanding against the assets,
properties, or business of Rainwire (other than liens for taxes not yet due
and payable). Neither Rainwire nor any of its shareholders have ever filed
a consent pertaining to Rainwire pursuant to Section 341(f) of the IRC (as
hereinafter defined), relating to collapsible corporations.
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SECTION 6.17. INTERESTED TRANSACTIONS. Except as provided on
Schedule 6.17, Rainwire is not a party to any contract, loan or other
transaction with any Rainwire Shareholder nor does Rainwire have any direct
or indirect interest in or affiliation with any Rainwire Shareholder to any
such contract, loan or other transaction. No Rainwire Shareholder is an
employee, consultant, partner, principal, director or owner of, or has any
other direct or indirect interest in or affiliation with, any person or
business entity that is engaged in a business that competes with or is
similar to the business of Rainwire.
SECTION 6.18. INTELLECTUAL PROPERTY.
(a) Attached hereto as Schedule 6.18 is a true, correct and complete
list of all of Rainwire's patents, trademarks, trade names, or trademark or
trade name registrations, domain name registrations, service marks, and
copyrights or copyright registrations (the "Proprietary Rights"). All of
Rainwire's Proprietary Rights are valid, enforceable, in full force and
effect and free and clear of any and all security interests, liens, pledges
and encumbrances of any nature or kind. Rainwire has not infringed upon and
are not infringing upon any patent, trademark, trade name, or trademark or
trade name registration, service mark, copyright, or copyright registration
of any other Person.
(b) No trade secret or confidential know-how material to the business
of Rainwire as currently operated has been disclosed or authorized to be
disclosed to any third party, other than pursuant to a non-disclosure
agreement that protects Rainwire's proprietary interests in and to such
trade secrets and confidential know-how, and other than disclosures to
employees, officers, directors, agents, attorneys, accountants,
consultants, independent contractors or other representatives of Rainwire,
each of whom is obligated (by contract, employment policy, cannons of
ethics or the like) to maintain the confidentiality of such information.
(c) The consummation of the transactions contemplated hereby will not
result in the loss or impairment of the right of Rainwire or any of its
successors to own, use, license or sublicense any of the Intellectual
Property currently owned, used, licensed or sublicensed by Rainwire nor
will it require the consent of any Authority or third party in respect of
any such Intellectual Property and no present or former employee, or
officer of Rainwire has any right, title or interest, directly or
indirectly, in whole or in part, in any Intellectual Property.
SECTION 6.19. BROKERAGE. Except as disclosed on Schedule 6.20,
Rainwire has not employed any broker, finder, advisor, consultant or other
intermediary in connection with this Agreement or the transactions
contemplated by this Agreement who is or might be entitled to any fee,
commission or other compensation from Rainwire, or from Oasis or its
Affiliates, upon or as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby. Such fee shall be
borne by Rainwire.
SECTION 6.20. SUBSIDIARIES. Except as set forth on Schedule 6.20,
Rainwire does not have any subsidiaries and does not, directly or
indirectly, own a controlling interest in any corporation, partnership,
joint venture or other entity.
SECTION 6.21. STATEMENTS TRUE AND CORRECT.
(a) No representation or warranty made herein by Rainwire, nor in any
statement, certificate or instrument to be furnished to Oasis or the Oasis
Shareholders by Rainwire pursuant to any Share Exchange Document, contains
or will contain any untrue statement of material fact or omits or will omit
to state a material fact necessary, in light of the circumstances under
which it was made, to make these statements contained herein and therein
not misleading.
(b) None of the information supplied or to be supplied by Rainwire for
inclusion or incorporation by reference into the Form S-4 will, at the time
the Form S-4 is filed with the SEC, at any time the Form S-4 is amended or
supplemented, at the time the Form S-4 becomes effective under the
Securities Act and the Exchange Act or on the date it is first mailed to
holders of Rainwire Common Stock, contain any untrue statement of a
material fact or omit to state any material fact
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required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they will be made, not
misleading.
(c) Notwithstanding the foregoing provisions of this Section 6.21(b),
no representation or warranty is made by Rainwire with respect to
information supplied or to be supplied by Oasis for inclusion or
incorporation by reference into the Form S-4 nor with respect to any
statements made or incorporated by reference in the Form S-4 based in whole
or in part upon such information.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. ACCESS TO INFORMATION. From the date of this Agreement
through the Closing Date, Oasis will afford the officers and authorized
representatives of Rainwire access during regular business hours and upon
reasonable notice to Oasis's properties, books and records that may relate to or
concern the Share Exchange and will furnish such parties with such additional
financial, operating and other information as to the business and properties of
Oasis as such parties may from time to time reasonably request. Such parties
shall also be allowed access, upon reasonable notice, to consult with the
officers, employees, accountants, counsel and agents of Oasis in connection with
such investigation of the properties and business of Oasis. In addition, from
the date of this Agreement through the Closing Date, Rainwire will afford the
officers and authorized representatives of Oasis access during regular business
hours and upon reasonable notice to all of Rainwire's properties, books and
records that may relate to or concern the Share Exchange and will furnish such
parties with such additional financial, operating and other information as to
the business and properties of Rainwire as such parties may from time to time
reasonably request. Such parties shall also be allowed access, upon reasonable
notice, to consult with the officers, employees, accountants, counsel and agents
of Rainwire in connection with such investigation of the properties and business
of Rainwire. In each case, such access or investigation shall be subject to
Section 7.07.
SECTION 7.02. NO-SHOP. Unless and until this Agreement is terminated
pursuant to Article X hereof, Oasis shall not directly or indirectly, through
any officer, director, shareholder, employee, agent, or otherwise: (a) solicit,
initiate or encourage submission of proposals or offers from any person or other
entity relating to any purchase of any acquisition or business combination of
all or a material amount of the assets of, or an equity interest in Oasis, or
approve or undertake any such transaction; (b) participate in any discussions or
negotiations regarding, or furnish to any other person, corporation or other
entity, any information with respect to, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other person, corporation or other entity to do, any of the foregoing; or
(c) enter into any contract, agreement or understanding, whether oral or
written, that would prevent the consummation of the Share Exchange.
Notwithstanding the foregoing, in the event Oasis or any Oasis Shareholder shall
directly or indirectly receive a proposal relating to any acquisition or
business combination involving Oasis, Oasis or such Oasis Shareholder shall
immediately notify Rainwire in writing of the terms of such proposal. Oasis
agrees that it will, and will cause its officers, directors and representatives
to, immediately cease and cause to be terminated any activities, discussions or
negotiations existing as of the date of this Agreement with any parties
conducted heretofore with respect to any acquisition, business combination,
equity interest or similar transaction with respect to Oasis.
If either Oasis or the Oasis Shareholders signs a letter of intent or other
agreement in breach of this Section 7.02, and such transaction is ultimately
consummated, then, immediately upon the closing of such transaction, Oasis shall
pay Rainwire the sum of $10,000. The Parties agree that this amount is in
consideration for Rainwire's expenses and lost opportunities in connection with
a breach of this Section 7.02 by Oasis and shall not be construed as a penalty.
SECTION 7.03. AFFIRMATIVE COVENANTS OF OASIS. From the date hereof until
the earlier of the Effective Time or the termination of this Agreement, Oasis
covenants and agrees that, unless the prior
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written consent of Rainwire shall have been obtained, and except as otherwise
expressly contemplated herein, Oasis shall:
(a) operate its business only in the usual, regular, and ordinary
course of business, consistent with past practices;
(b) use reasonable commercial efforts to preserve intact its business
organization, licenses, permits, government programs, private programs and
customers;
(c) use reasonable commercial efforts to retain the services of its
employees, agents and consultants on terms and conditions not less
favorable than those existing prior to the date hereof and to ensure that
there are no material or adverse changes to employee relations;
(d) keep and maintain its assets in their present condition, repair
and working order, except for normal depreciation and wear and tear, and
maintain its insurance, rights and licenses;
(e) pay all accounts payable of Oasis in accordance with past practice
and collect all accounts receivable in accordance with past practice;
(f) consult with Rainwire prior to undertaking any new business
opportunity outside the ordinary course of business and not undertake such
new business opportunity without the prior written consent of Rainwire;
(g) make available to Rainwire true and correct copies of all internal
management and control reports (including aging of accounts receivable,
listings of accounts payable, and inventory control reports) and financial
statements related to Oasis and furnished to management of Oasis;
(h) cause all tax returns that have not been filed prior to the date
hereof to be prepared and filed on or before the date such tax return is
required to be filed (taking into account any extensions of the filing
deadlines granted); provided, however, that any such tax return shall not
be filed without a reasonable opportunity for prior review and comment by
Rainwire;
(i) as soon as reasonably practicable after they become available, but
in no event more than 30 days following the end of each calendar month,
deliver to Rainwire true and complete copies of its monthly financial
statements for each calendar month ending subsequent to the date hereof on
the format historically utilized by Oasis;
(j) perform in all material respects all obligations under agreements
relating to or affecting its assets, properties or rights;
(k) keep in full force and effect present insurance policies or other
comparable insurance coverage; and
(l) notify Rainwire of (i) any event or circumstance which has caused
or constituted, or is reasonably likely to have a Oasis Material Adverse
Effect or would cause or constitute, a breach of any of the
representations, warranties or covenants contained herein by Oasis or the
Oasis Shareholders; or (ii) any material change in the normal course of
business or in the operation of the assets, and of any governmental
complaints, investigations or hearings (or communications indicating that
the same may be contemplated), adjudicatory proceedings, budget meetings or
submissions involving Oasis or any material property of Oasis. Oasis agrees
to keep Rainwire fully informed of such events and to permit Rainwire's
representatives prompt access to all materials prepared in connection
therewith.
SECTION 7.04. NEGATIVE COVENANTS OF OASIS. From the date hereof until the
earlier of the Effective Time or the termination of this Agreement, Oasis
covenants and agrees that it will not do any of the following without the prior
written consent of Rainwire:
(a) take any action which would (i) adversely affect the ability of
any party to the Share Exchange Documents to obtain any consents required
for the transactions contemplated thereby, or
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(ii) adversely affect the ability of any party hereto to perform its
covenants and agreements under the Share Exchange Documents;
(b) amend any of its organizational or governing documents;
(c) incur any additional debt obligation or other obligation for
borrowed money except in the ordinary course of the business of Oasis
consistent with past practices, or impose, or suffer the imposition, on any
asset of Oasis of any lien or permit any such lien to exist;
(d) repurchase, redeem, or otherwise acquire or exchange, directly or
indirectly, any Oasis Common Stock, or declare or pay any dividend or make
any other distribution in respect of Oasis Common Stock;
(e) other than pursuant to the Share Exchange Documents, issue, sell,
pledge, encumber, authorize the issuance of, enter into any contract to
issue, sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional Oasis Common Stock or any
rights with respect to any Oasis Common Stock;
(f) purchase or acquire any assets or properties, whether real or
personal, tangible or intangible, or sell or dispose of any assets or
properties, whether real or personal, tangible or intangible, except in the
ordinary course of business and consistent with past practices;
(g) adjust, split, combine or reclassify any Oasis Common Stock or
issue or authorize the issuance of any other securities in respect of or in
substitution for Oasis Common Stock, or sell, lease, mortgage or otherwise
dispose of or otherwise encumber any asset having a book value in excess of
$50,000 other than in the ordinary course of business for reasonable and
adequate consideration;
(h) purchase any securities or make any material investment, either by
purchase of stock or other securities, contributions to capital, asset
transfers, or purchase of any assets, in any entity, or otherwise acquire
direct or indirect control over any other entity;
(i) grant any increase in compensation or benefits to the employees or
officers of Oasis, except in accordance with past practice; pay any
severance or termination pay or any bonus other than pursuant to written
policies or written contracts in effect as of the date hereof and disclosed
on the Schedules hereto; enter into or amend any severance agreements with
officers of Oasis; or grant any material increase in fees or other
increases in compensation or other benefits to directors of Oasis except in
accordance with past practice;
(j) other than as contemplated by this Agreement or as set forth on
Schedule 7.04, enter into or amend any employment contract between Oasis
and any person or entity (unless such amendment is required by law) that
Oasis does not have the unconditional right to terminate without liability
(other than liability for services already rendered), at any time on or
after the Effective Time;
(k) adopt any new employee benefit plan or make any material change in
or to any existing employee benefit plans other than any such change that
is required by law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan;
(l) make any significant change in any tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in tax laws or regulatory accounting requirements or
GAAP;
(m) commence any litigation other than in accordance with past
practice, settle any litigation involving any liability of Oasis for
material money damages or restrictions upon the operations of Oasis;
(n) except as set forth on Schedule 7.04, modify, amend or terminate
any material contract or waive, release, compromise or assign any material
rights or claims;
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(o) except in the ordinary course of business and, even if in the
ordinary course of business, then not in an amount to exceed $25,000 in the
aggregate, make or commit to make any capital expenditure, or enter into
any lease of capital equipment as lessee or lessor;
(p) take any action, or omit to take any action, which would cause any
of the representations and warranties contained in Article V to be untrue
or incorrect;
(q) make any loan to any person or increase the aggregate amount of
any loan currently outstanding to any person; and
(r) shall not agree, in writing or otherwise, to take any of the
foregoing actions or take any action that would result in any of the
conditions to the Share Exchange not being satisfied, or, except as
otherwise allowed hereunder, that could reasonably be expected to prevent,
impede, interfere with or significantly delay the transactions contemplated
hereby.
SECTION 7.05. AFFIRMATIVE COVENANTS OF RAINWIRE. From the date hereof
until the earlier of the Effective Time or the termination of this Agreement,
Rainwire covenants and agrees that, unless the prior written consent of Oasis
shall have been obtained, and except as otherwise expressly contemplated herein,
Rainwire shall and shall cause each of its Subsidiaries to:
(a) use reasonable commercial efforts to preserve intact its business
organization, licenses, permits, government programs, private programs and
customers; and
(b) notify Oasis of (i) any event or circumstance which has caused or
constituted, or is reasonably likely to have an Rainwire Material Adverse
Effect or would cause or constitute, a breach of any of Rainwire's
representations, warranties or covenants contained herein; or (ii) any
material change in the normal course of business or in the operation of
Rainwire's assets, and of any material governmental complaints,
investigations or hearings (or communications indicating that the same may
be contemplated) or adjudicatory proceedings.
SECTION 7.06. NEGATIVE COVENANTS OF RAINWIRE. From the date hereof until
the earlier of the Effective Time or the termination of this Agreement, Rainwire
covenants and agrees that neither Rainwire nor any of its Subsidiaries, will do
any of the following without the prior written consent of Oasis:
(a) take any action which would (i) adversely affect the ability of
any party to the Share Exchange Documents to obtain any consents required
for the transactions contemplated thereby, or (ii) adversely affect the
ability of any party hereto to perform its covenants and agreements under
the Share Exchange Documents;
(b) take any action, or omit to take any action, which would cause any
of the representations and warranties contained in Article VI to be untrue
or incorrect.
SECTION 7.07. CONFIDENTIALITY. Rainwire and Oasis agree that each shall
hold in confidence any confidential information about the other that it has
received, or hereafter receives, pursuant to any provision of this Agreement
under circumstances indicating the confidentiality of such information unless
(a) such information shall have been publicly disclosed other than as a result
of any wrongful action by the recipient of such information or (b) the recipient
of such information independently develops or is aware of such information.
SECTION 7.08. PUBLIC ANNOUNCEMENTS. Rainwire, Oasis and the Oasis
Shareholders will consult with each other before issuing any press releases or
otherwise making any public statements or filings with governmental entities
with respect to this Agreement or the transactions contemplated hereby and shall
not issue any press releases or make any public statements or filings with
governmental entities prior to such consultation and shall modify any portion
thereof if the other party objects thereto, unless the same may be required by
applicable law.
SECTION 7.09. FILINGS WITH STATE OFFICES. Upon the terms and subject to
the conditions of this Agreement, Oasis and Rainwire shall execute and file a
Certificate of Share Exchange with the Secretary of State of the State of
Georgia in connection with the Closing.
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SECTION 7.10. CONDITIONS TO CLOSING. The Oasis Shareholders, Oasis and
Rainwire agree to use their commercially reasonable best efforts to satisfy the
closing conditions set forth in Articles VIII and IX of this Agreement within
three (3) business days after all regulatory matters have been complied with.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF RAINWIRE
The obligation of Rainwire to consummate the Share Exchange is subject to
the satisfaction or written waiver, at or prior to Closing, of each of the
following conditions:
SECTION 8.01. REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Oasis and the Oasis Shareholders set forth in this
Agreement, or any document or instrument delivered to Rainwire hereunder,
shall be true and correct in all material respects as of the Effective Time
with the same force and effect as if such representations and warranties
had been made at and as of the Effective Time, except with respect to any
of such representations and warranties referring to a state of facts
existing on a specified date prior to the Closing Date, it shall be
sufficient if at the Effective Time such representation and warranty
continues to describe accurately the state of facts existing on the date so
specified; provided, however, that Oasis and the Oasis Shareholders shall
have five days to cure any such material breach of a representation or
warranty (it being agreed that such five day period shall commence as to
such breach upon Rainwire becoming aware thereof and that disclosure of a
matter subsequent to the date hereof shall not constitute a cure).
SECTION 8.02. PERFORMANCE; COVENANTS. All of the terms, covenants
and conditions of the Share Exchange Documents to be complied with or
performed by Oasis or the Oasis Shareholders at or prior to Closing shall
have been complied with and performed in all material respects including,
but not limited to, the delivery of the following documents:
(a) A good standing certificate regarding Oasis, certified by the
Secretary of State of the respective state of incorporation and all
states where such entity is qualified to do business, dated within 30
business days of the Closing;
(b) A certificate dated as of the Closing Date signed by the duly
authorized officers of Oasis certifying that the representations and
warranties of Oasis set forth herein are true and correct in all
material respects as of the Effective Time and that Oasis and each of
the Oasis Shareholders have fulfilled all of the conditions of this
Article VIII;
(c) Written consents of all third parties necessary for the
consummation of the transactions contemplated by the Share Exchange
Documents;
(d) Resolutions duly adopted by Oasis (Board and shareholder)
approving the execution, delivery and performance of this Agreement and
the consummation of the Share Exchange, certified by an appropriate
officer of Oasis; and
(e) All books and records of Oasis, including all corporate and
other records, minute books, stock record books, stock registers, books
of accounts, contracts, agreements and such other documents or
certificates as shall be reasonably requested by Rainwire, which the
parties acknowledge will at the Closing be located at the corporate
offices of Oasis.
SECTION 8.03. NECESSARY CONSENTS AND APPROVALS. Rainwire, Oasis and
the Oasis Shareholders shall have obtained all licenses, consents and
permits, provided all notices, and all waiting periods required by Law,
shall have expired, necessary in order for Rainwire and Oasis to consummate
the Share Exchange.
SECTION 8.04. NO MATERIAL ADVERSE CHANGE. There shall not have
occurred a Oasis Material Adverse Effect between the date hereof and the
Effective Time or a material change in the financial condition of Oasis as
represented in the Oasis Financial Statements and the Schedules attached to
this Agreement.
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SECTION 8.05. NO INJUNCTION, ETC. No action, proceeding,
investigation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency, or legislative body to
enjoin, restrain, prohibit or obtain substantial damages in respect of, or
which is related to, arises out of, this Agreement or the consummation of
the Share Exchange, or which is related to or arises out of the business or
operations of Oasis, if such action, proceeding, investigation or
legislation, in the reasonable judgment of Rainwire or its counsel, would
make it inadvisable to consummate such transactions. In the event any
order, decree or injunction shall have been issued, each party shall use
its reasonable efforts to remove any such order, decree or injunction.
SECTION 8.06. OASIS SHAREHOLDER APPROVAL. This Agreement and all
other documents and instruments to be delivered in connection herewith,
shall have been approved by the Oasis Shareholders.
SECTION 8.07. EFFECTIVENESS OF THE FORM S-4. The Form S-4 shall have
been declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the
SEC and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
SECTION 8.08. CERTIFICATE OF SHARE EXCHANGE. Oasis shall have
executed and delivered to Rainwire the Certificate of Share Exchange to be
filed with the Secretary of State of the State of Georgia in connection
with the Share Exchange.
SECTION 8.09. TAX-FREE SHARE EXCHANGE. The Parties are reasonably
satisfied that as of the Closing Date, the transactions contemplated by the
Share Exchange will qualify as a tax-free reorganization within the meaning
of Section 368(a) of the Code.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF OASIS AND OASIS SHAREHOLDERS
The obligations of Oasis and the Oasis Shareholders to close the Share
Exchange are subject to the satisfaction or waiver, at or prior to Closing, of
each of the following conditions:
SECTION 9.01. REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Rainwire set forth in this Agreement, or any document or
instrument delivered to any party hereunder, shall be true and correct in
all material respects as of the Effective Time with the same force and
effect as if such representations and warranties had been made at and as of
the Effective Time, except with respect to any of such representations and
warranties referring to a state of facts existing at a specified date prior
to the Closing Date, it shall be sufficient if at the Effective Time such
representation and warranty continues to describe accurately in all
material respects the state of facts existing on the date so specified;
provided, however, that Rainwire shall have five days to cure any such
material breach of a representation or warranty (it being agreed that such
five day period shall commence as to such breach upon Oasis becoming aware
thereof and that disclosure of a matter subsequent to the date hereof shall
not constitute a cure).
SECTION 9.02. PERFORMANCE; COVENANTS. All of the terms, covenants
and conditions of this Agreement to be complied with or performed by
Rainwire at or prior to the Closing shall have been complied with and
performed in all material respects, including, but not limited to delivery
of the following documents:
(a) A good standing certificate regarding Rainwire certified by
the Secretary of State of the State of Delaware, dated within 30 days
prior to Closing;
(b) A certificate dated as of the Closing Date signed by a duly
authorized officer of Rainwire certifying that the representations and
warranties of Rainwire set forth herein are true and correct in all
material respects as of the Effective Time and that Rainwire has
fulfilled all of the conditions of this Article; and
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(c) Resolutions duly adopted by the Board of Directors of Rainwire
approving the execution, delivery and performance of this Agreement and
the consummation of the Share Exchange, certified by an appropriate
officer of Rainwire;
SECTION 9.03. NECESSARY CONSENTS AND APPROVALS. Rainwire, Oasis and
the Oasis Shareholders shall have obtained all licenses, consents and
permits, provided all notices, and all waiting periods required by Law,
shall have expired, necessary in order for Rainwire and Oasis to consummate
the Share Exchange, including the waiting period associated with the Form
S-4 filed, or to be filed, by Rainwire in connection with the Amendment.
SECTION 9.04. NO MATERIAL ADVERSE CHANGE. There shall not have
occurred an Rainwire Material Adverse Effect between the date hereof and
the Effective Time.
SECTION 9.05. NO INJUNCTION, ETC. No action, proceeding,
investigation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency, or legislative body to
enjoin, restrain, prohibit or obtain substantial damages in respect of, or
which is related to, arises out of, this Agreement or the consummation of
the Share Exchange, or which is related to or arises out of the business or
operations of Rainwire, if such action, proceeding, investigation or
legislation, in the reasonable judgment of Oasis or its counsel, would make
it inadvisable to consummate such transactions. In the event any order,
decree or injunction shall have been issued, each party shall use its
reasonable efforts to remove any such order, decree or injunction.
SECTION 9.06. EFFECTIVENESS OF FORM S-4. The Form S-4 shall have
been declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the
SEC and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
SECTION 9.07. CERTIFICATE OF SHARE EXCHANGE. Rainwire shall have
executed and delivered to Oasis the certificate of share exchange to be
filed with the Secretary of State of the State of Georgia in connection
with the Share Exchange.
SECTION 9.08. TAX-FREE SHARE EXCHANGE. The Parties are reasonably
satisfied that as of the Closing Date, the transactions contemplated by the
Share Exchange will qualify as a tax-free reorganization within the meaning
of Section 368(a) of the Code.
SECTION 9.09. OTC BULLETIN BOARD LISTING. The shares of Rainwire
Common Stock to be issued in the Share Exchange shall have been approved
for listing on the OTC Bulletin Board, unless the failure to have such
shares approved for listing on the OTC Bulletin Board is waived in writing
by Oasis.
SECTION 9.10. RAINWIRE SHAREHOLDER APPROVAL. Rainwire shall have
taken all steps required by the DGCL and the federal securities laws to
obtain the consent of a majority of its shareholders in favor of the
Amendment and to notify the remaining shareholders of the Amendment.
ARTICLE X
TERMINATION
SECTION 10.01. RIGHT OF TERMINATION. This Agreement and the Share
Exchange may be terminated at any time prior to the Closing Date:
(a) By the mutual written consent of Rainwire and Oasis.
(b) by either Rainwire or Oasis if any court of competent jurisdiction
in the United States or any State shall have issued an order, judgment or
decree (other than a temporary restraining order) restraining, enjoining or
otherwise prohibiting the exchange of stock and such order, judgment or
decree shall have become final and nonappealable; provided that the right
to terminate this Agreement under this Section 10.01(b) shall not be
available to any party whose failure to fulfill any
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obligation under this Agreement has been the cause of, or resulted in, the
failure of the completion of the Closing to occur on or before such date;
or
(c) by Rainwire if there has been (i) a material breach of any
covenant or agreement or of a representation or warranty herein on the part
of Oasis which has not been cured, or adequate assurance (acceptable to
Rainwire in its sole discretion) of cure given, in either case, within
fifteen (15) business days following receipt of notice of such breach; or
(d) by Oasis if (i) there has been a material breach of any covenant
or agreement or of a representation or warranty herein on the part of
Rainwire which has not been cured, or adequate assurance (acceptable to
Oasis in its sole discretion) of cure given, in either case, within fifteen
(15) business days following receipt of notice of such breach or (ii) at
Closing Rainwire shall not be listed on the Over-the-Counter Bulletin Board
(OTC:BB) exchange; or
(e) by either Rainwire or Oasis (and the Oasis Shareholders) if either
of such party's due diligence investigation has disclosed the existence of
(i) any matter relating to the other party or its business that is
materially and adversely (to the investigating party) at variance with
those matters theretofore disclosed to the investigating party, or (ii) any
matter which, in the investigating party's reasonable judgment, (A)
indicates a material adverse change in the condition, assets or prospects
of the other party, or (B) would make it inadvisable to consummate the
exchange of stock and other transactions contemplated by this Agreement.
SECTION 10.02. EFFECT OF TERMINATION. In the event of termination in
accordance with this Article X, this Agreement shall become void and of no
further force or effect, without any liability on the part of any of the parties
hereto or their respective owners, directors, officers or employees, except the
obligations of each party to preserve the confidentiality of documents,
certificates and information furnished to such party pursuant thereto and for
any obligation or liability of any party based on or arising from any breach or
default by any such party with respect to his or its particular representations,
warranties, covenants or agreements, as to his or its particular actions or
inactions, contained in the Share Exchange Documents.
ARTICLE XI
SURVIVAL OF TERMS; INDEMNIFICATION
SECTION 11.01. INDEMNIFICATION BY RAINWIRE. Rainwire shall defend,
indemnify and hold harmless Oasis and the Oasis Shareholders and their
respective heirs, personal and legal representatives, guardians, successors and
assigns, from and against any and all claims, threats, liabilities, taxes,
interest, fines, penalties, suits, actions, proceedings, demands, damages,
losses, costs and expenses (including attorneys' and experts' fees and court
costs) of every kind and nature arising out of, resulting from or in connection
with any misrepresentation or omission or breach by Rainwire of any
representation or warranty contained in this Agreement.
SECTION 11.02. INDEMNIFICATION BY OASIS AND THE OASIS SHAREHOLDERS. Oasis
and the Oasis
Shareholders shall defend, indemnify and hold harmless Rainwire and its
respective representatives, successors and assigns, from and against any and all
claims, threats, liabilities, taxes, interest, fines, penalties, suits, actions,
proceedings, demands, damages, losses, costs and expenses (including attorneys'
and experts' fees and court costs) of every kind and nature arising out of,
resulting from, or in connection with any misrepresentation or omission or
breach by Oasis or the Oasis Shareholders or any representation or warranty
contained in this Agreement.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. NOTICES.
(a) Any notice sent in accordance with the provisions of this Section
12.01 shall be deemed to have been received (even if delivery is refused or
unclaimed) on the date which is: (i) the date of proper posting, if sent by
certified U.S. mail or by express U.S. mail or private overnight courier;
or (ii) the date on which sent, if sent by facsimile transmission, with
confirmation and with the original to be sent by certified U.S. mail,
addressed as follows:
If to Oasis: Oasis Group, Inc.
First Floor, Monteith Commons
2931 Piedmont Road, N.E.
Atlanta, GA 30305
Attention: Ronald A. Potts
Facsimile: (404) 842-1583
If to Rainwire: Rainwire Partners, Inc.
First Floor, Monteith Commons
2931 Piedmont Road, N.E.
Atlanta, GA 30305
Attention: Lyne Marchessault
Facsimile: (404) 842-1583
(b) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this
Section 12.01.
SECTION 12.02. EXPENSES. Each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including any fees of brokers, finders
investment bankers or other agents or incurred to obtain a fairness opinion;
provided, however, for all legal, accounting, investment banking and other fees
and expenses incurred by Oasis and the Oasis Shareholders as a result of the
transactions contemplated hereby, Oasis shall pay from its own funds the fees
and expenses of the Oasis Shareholders prior to the Closing, or to the extent
not so paid, then Oasis shall pay such fees and expenses after the Closing when
due.
SECTION 12.03. FURTHER ASSURANCES. Each party covenants that at any time,
and from time to time, after the Closing, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.
SECTION 12.04. WAIVER. Any failure on the part of any party to comply
with any of its obligations, agreements or conditions hereunder may be waived by
any other party to whom such compliance is owed. No waiver of any provision of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.
SECTION 12.05. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of all other parties.
SECTION 12.06. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and permitted assigns.
This Agreement shall survive the Closing and not be merged therein.
SECTION 12.07. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 12.08. ENTIRE AGREEMENT. This Agreement and the Exhibits,
Schedules, certificates and other documents delivered pursuant hereto or
incorporated herein by reference, contain and constitute the
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entire agreement among the parties and supersede and cancel any prior
agreements, representations, warranties, or communications, whether oral or
written, among the parties relating to the transactions contemplated by this
Agreement. Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only by an agreement in writing
signed by the party against whom or which the enforcement of such change,
waiver, discharge or termination is sought.
SECTION 12.09. GOVERNING LAW; SEVERABILITY. This Agreement shall be
governed by and construed in accordance with the Laws of the State of Georgia,
without regard to any applicable conflicts of Laws. The provisions of this
Agreement are severable and the invalidity of one or more of the provisions
herein shall not have any effect upon the validity or enforceability of any
other provision.
SECTION 12.10. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 12.11. BROKERS AND FINDERS. Except as set forth on Schedule
12.11, neither Oasis nor the Oasis Shareholders on the one hand, or Rainwire on
the other hand, has employed or otherwise incurred in any manner any liability
for any brokerage fees, agents commissions or finder's fees concerning the
transactions contemplated hereby.
SECTION 12.12. SCHEDULES AND EXHIBITS. All Schedules and Exhibits
attached to this Agreement are by reference made a part hereof. All Schedules
will be attached to this Agreement prior to the Closing. All Exhibits will be
attached to this Agreement within five (5) after this Agreement is signed by all
parties.
SECTION 12.13. ENFORCEMENT OF AGREEMENT. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. Oasis hereto agrees
that money damages or other remedy at law would not be sufficient or adequate
remedy for any breach or violation of, or a default under, this Agreement by
them and that in addition to all other remedies available to Rainwire, Rainwire
shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach, violation or
default and to any other equitable relief, including, without limitation,
specific performance, without bond or other security being required.
ARTICLE XIII
CERTAIN DEFINITIONS
Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:
"Affiliate" shall mean, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or
controlling such Person, (b) any Person, directly or indirectly, in which
such Person holds, of record or beneficially, five percent or more of the
equity or voting securities, (c) any Person that holds, of record or
beneficially, five percent or more of the equity or voting securities of
such Person, (d) any Person that, through Contract, relationship or
otherwise, exerts a substantial influence on the management of such
Person's affairs, (e) any Person that, through Contract, relationship or
otherwise, is influenced substantially in the management of their affairs
by such Person, or (f) any director, officer, partner or individual holding
a similar position in respect of such Person.
"Agreement" shall mean the Amended and Restated Agreement and Plan of
Share Exchange.
"Authority" shall mean any governmental, regulatory or administrative
body, agency, arbitrator or authority, any court or judicial authority, any
public, private or industry regulatory agency, arbitrator authority,
whether international, national, federal, state or local.
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"Claim" shall have the meaning set forth in Section 5.09.
"Closing Date" shall have the meaning set forth in Section 1.02.
"Closing" shall mean the meaning set forth in Section 1.02.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"Effective Time" shall have the meaning set forth in Section 1.03.
"ERISA" shall mean the Employee Retirement Security Act of 1974, as
amended.
"Exchange Agent" shall have the meaning set forth in Section 3.01.
"Exchange Ratio" shall have the meaning set forth in Section 2.02.
"GBCC" shall mean the Georgia Business Corporation Code, as amended.
"Intellectual Property" shall mean all letters patent, patent
applications, inventions upon which patent applications have not yet been
filed, trade names, trademarks, trademark registrations and applications,
service marks, service mark registrations and applications, copyrights and
copyright registrations and applications, both domestic and foreign, owned,
possessed or used by Borrower.
"Knowledge" or "known," "to the knowledge of," or similar references
shall mean the actual knowledge of any of the directors, officers or
managerial personnel of Oasis with respect to the matter in question, and
such knowledge as any of the directors, officers or managerial personnel of
Oasis reasonably should have obtained upon diligent investigation and
inquiry into the matter in question.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance (including, without
limitation, any easement, right-of-way, zoning or similar restriction or
title defect), lien (statutory or other) or preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing and the filing of any
financing statement under the UCC or comparable law of any jurisdiction).
"Oasis" shall mean Oasis Group, Inc., a Georgia corporation.
"Oasis Agreements" shall have the meaning set forth in Section 5.12.
"Oasis Common Stock" shall mean the Common Stock, no par value, of
Oasis.
"Oasis Material Adverse Effect" shall have mean a material adverse
effect on (a) Oasis's ability to perform its obligations under the Share
Exchange Documents to be executed and delivered by it or (b) the assets,
results of operations or prospects of Oasis taken as a whole.
"Oasis Shareholders" shall mean those persons listed on Schedule 1 of
this Agreement.
"Person" shall mean any corporation, partnership, joint venture,
company, syndicate, organization, association, trust, entity, joint stock
company, unincorporated organization, Authority or natural person.
"Rainwire" shall mean Rainwire Partners, Inc., a Delaware corporation.
"Rainwire Common Stock" shall mean the common stock, $.001 par value,
of Rainwire.
"Rainwire Material Adverse Effect" shall mean a material adverse
effect on (a) Rainwire's ability to perform its obligations under the Share
Exchange Documents to be executed and delivered by it or, (b) the assets,
results of operations or prospects of Rainwire and its Subsidiaries taken
as a whole.
"SEC Reports" shall have the meaning set forth in Section 6.06.
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"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Share Exchange" shall have the meaning set forth in Section 1.01.
"Share Exchange Documents" shall have the meaning set forth in Section
5.01.
"Subsidiary" shall mean any Person of which a majority of the
outstanding voting securities or other voting equity interests are owned,
directly or indirectly.
"Tax Return" means any return, declaration, report, claim for refund
or information return or statement relating to Taxes, including any
schedule or attachment thereto and including any amendment thereof.
"Tax" shall mean any Federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or
other tax of any kind whatsoever, including any interest, penalty or
addition thereto, whether disputed or not, and "Taxes" means any or all of
the foregoing collectively.
Any singular term in this Agreement shall be deemed to include the plural,
and any plural term the singular. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation."
[Remainder of page intentionally left blank]
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[Signature page to Amended and Restated Agreement and Plan of Share Exchange]
IN WITNESS WHEREOF, each of the Parties has caused this Amended and
Restated Agreement and Plan of Share Exchange to be executed on its behalf and
its corporate seal to be hereunto affixed and attested by officers thereunto as
of the day and year first above written.
RAINWIRE PARTNERS, INC.
By
------------------------------------
Name
----------------------------------
Title
-----------------------------------
OASIS GROUP, INC.
By
------------------------------------
Name
----------------------------------
Title
-----------------------------------
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ANNEX B
DELAWARE APPRAISAL RIGHTS STATUTE
SECTION 262. APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to sec. 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to sec.
251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or sec.
264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec. 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to secs.
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or depository
receipts in respect thereof) or depository receipts at the effective
date of the merger or consolidation will be either listed on a national
securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
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(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of such
stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of
such stockholder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must
do so by a separate written demand as herein provided. Within 10 days after
the effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not voted in
favor of or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to sec. 228
or sec. 253 of this title, each constitutent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constitutent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constitutent corporation shall send a second notice before
the effective date of the merger or consolidation notifying each of the
holders of any class or series of stock of such constitutent corporation
that are entitled to appraisal rights of the effective date of the merger
or consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the
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facts stated therein. For purposes of determining the stockholders entitled
to receive either notice, each constitutent corporation may fix, in
advance, a record date that shall be not more than 10 days prior to the
date the notice is given, provided, that if the notice is given on or after
the effective date of the merger or consolidation, the record date shall be
such effective date. If no record date is fixed and the notice is given
prior to the effective date, the record date shall be the close of business
on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has
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submitted such stockholder's certificates of stock to the Register in Chancery,
if such is required, may participate fully in all proceedings until it is
finally determined that such stockholder is not entitled to appraisal rights
under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
(8 Del. C. 1953, sec. 262; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, sec. 24;
57 Del. Laws, c. 148, secs. 27-29; 59 Del. Laws, c. 106, sec. 12; 60 Del. Laws,
c. 371, secs. 3-12; 63 Del. Laws, c. 25, sec. 14; 63 Del. Laws, c. 152,
secs. 1, 2; 64 Del. Laws, c. 112, secs. 46-54; 66 Del. Laws, c. 136, secs.
30-32; 66 Del. Laws, c. 352, sec. 9; 67 Del. Laws, c. 376, secs. 19, 20; 68 Del.
Laws, c. 337, secs. 3, 4; 69 Del. Laws, c. 61, sec. 10; 69 Del. Laws, c. 262,
secs. 1-9; 70 Del. Laws, c. 79, sec. 16; 70 Del. Laws, c. 186, sec. 1; 70 Del.
Laws, c. 299, secs. 2, 3; 70 Del. Laws, c. 349, sec. 22; 71 Del. Laws, c. 120,
sec. 15; 71 Del. Laws, c. 339, secs. 49-52.)
B-4
GEORGIA DISSENTER'S RIGHTS STATUTE
SECTION 14-2-1301.
As used in this article, the term:
(1) "Beneficial shareholder" means the person who is a beneficial
owner of shares held in a voting trust or by a nominee as the record
shareholder.
(2) "Corporate action" means the transaction or other action by the
corporation that creates dissenters' rights under Code Section 14-2-1302.
(3) "Corporation" means the issuer of shares held by a dissenter
before the corporate action, or the surviving or acquiring corporation by
merger or share exchange of that issuer.
(4) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under Code Section 14-2-1302 and who exercises that right
when and in the manner required by Code Sections 14-2-1320 through
14-2-1327.
(5) "Fair value," with respect to a dissenter's shares, means the
value of the shares immediately before the effectuation of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action.
(6) "Interest" means interest from the effective date of the corporate
action until the date of payment, at a rate that is fair and equitable
under all the circumstances.
(7) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on file
with a corporation.
(8) "Shareholder" means the record shareholder or the beneficial
shareholder.
SECTION 14-2-1302.
(a) A record shareholder of the corporation is entitled to dissent from,
and obtain payment of the fair value of his shares in the event of, any of the
following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a
party:
(A) If approval of the shareholders of the corporation is required
for the merger by Code Section 14-2-1103 or 14-2-1104 or the articles of
incorporation and the shareholder is entitled to vote on the merger; or
(B) If the corporation is a subsidiary that is merged with its
parent under Code Section 14-2-1104;
(2) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange of all or substantially all of
the property of the corporation if a shareholder vote is required on the
sale or exchange pursuant to Code Section 14-2-1202, but not including a
sale pursuant to court order or a sale for cash pursuant to a plan by which
all or substantially all of the net proceeds of the sale will be
distributed to the shareholders within one year after the date of sale;
(4) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the shares;
(B) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
B-5
(C) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(D) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights;
(E) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be acquired
for cash under Code Section 14-2-604; or
(F) Cancels, redeems, or repurchases all or part of the shares of
the class; or
(5) Any corporate action taken pursuant to a shareholder vote to the
extent that Article 9 of this chapter, the articles of incorporation,
bylaws, or a resolution of the board of directors provides that voting or
nonvoting shareholders are entitled to dissent and obtain payment for their
shares.
(b) A shareholder entitled to dissent and obtain payment for his shares
under this article may not challenge the corporate action creating his
entitlement unless the corporate action fails to comply with procedural
requirements of this chapter or the articles of incorporation or bylaws of the
corporation or the vote required to obtain approval of the corporate action was
obtained by fraudulent and deceptive means, regardless of whether the
shareholder has exercised dissenter's rights.
(c) Notwithstanding any other provision of this article, there shall be no
right of dissent in favor of the holder of shares of any class or series which,
at the record date fixed to determine the shareholders entitled to receive
notice of and to vote at a meeting at which a plan of merger or share exchange
or a sale or exchange of property or an amendment of the articles of
incorporation is to be acted on, were either listed on a national securities
exchange or held of record by more than 2,000 shareholders, unless:
(1) In the case of a plan of merger or share exchange, the holders of
shares of the class or series are required under the plan of merger or
share exchange to accept for their shares anything except shares of the
surviving corporation or another publicly held corporation which at the
effective date of the merger or share exchange are either listed on a
national securities exchange or held of record by more than 2,000
shareholders, except for scrip or cash payments in lieu of fractional
shares; or
(2) The articles of incorporation or a resolution of the board of
directors approving the transaction provides otherwise.
SECTION 14-2-1303.
A record shareholder may assert dissenters' rights as to fewer than all the
shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one beneficial shareholder and notifies the
corporation in writing of the name and address of each person on whose behalf he
asserts dissenters' rights. The rights of a partial dissenter under this Code
section are determined as if the shares as to which he dissents and his other
shares were registered in the names of different shareholders.
SECTION 14-2-1320.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, the meeting
notice must state that shareholders are or may be entitled to assert dissenters'
rights under this article and be accompanied by a copy of this article.
(b) If corporate action creating dissenters' rights under Code Section
14-2-1302 is taken without a vote of shareholders, the corporation shall notify
in writing all shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice described in Code Section
14-2-1322 no later than ten days after the corporate action was taken.
B-6
SECTION 14-2-1321.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, a record
shareholder who wishes to assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(2) Must not vote his shares in favor of the proposed action.
(b) A record shareholder who does not satisfy the requirements of
subsection (a) of this Code section is not entitled to payment for his shares
under this article.
SECTION 14-2-1322.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied the
requirements of Code Section 14-2-1321.
(b) The dissenters' notice must be sent no later than ten days after the
corporate action was taken and must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(3) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than 30 nor more than 60 days after the
date the notice required in subsection (a) of this Code section is
delivered; and
(4) Be accompanied by a copy of this article.
SECTION 14-2-1323.
(a) A record shareholder sent a dissenters' notice described in Code
Section 14-2-1322 must demand payment and deposit his certificates in accordance
with the terms of the notice.
(b) A record shareholder who demands payment and deposits his shares under
subsection (a) of this Code section retains all other rights of a shareholder
until these rights are canceled or modified by the taking of the proposed
corporate action.
(c) A record shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this article.
SECTION 14-2-1324.
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under Code Section 14-2-1326.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.
SECTION 14-2-1325.
(a) Except as provided in Code Section 14-2-1327, within ten days of the
later of the date the proposed corporate action is taken or receipt of a payment
demand, the corporation shall by notice to each
B-7
dissenter who complied with Code Section 14-2-1323 offer to pay to such
dissenter the amount the corporation estimates to be the fair value of his or
her shares, plus accrued interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of the
shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under Code
Section 14-2-1327; and
(5) A copy of this article.
(c) If the shareholder accepts the corporation's offer by written notice to
the corporation within 30 days after the corporation's offer or is deemed to
have accepted such offer by failure to respond within said 30 days, payment for
his or her shares shall be made within 60 days after the making of the offer or
the taking of the proposed corporate action, whichever is later.
SECTION 14-2-1326.
(a) If the corporation does not take the proposed action within 60 days
after the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under Code Section 14-2-1322 and repeat the payment demand
procedure.
SECTION 14-2-1327.
(a) A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due, and demand payment
of his estimate of the fair value of his shares and interest due, if:
(1) The dissenter believes that the amount offered under Code Section
14-2-1325 is less than the fair value of his shares or that the interest
due is incorrectly calculated; or
(2) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within 60 days after the date set for
demanding payment.
(b) A dissenter waives his or her right to demand payment under this Code
section and is deemed to have accepted the corporation's offer unless he or she
notifies the corporation of his or her demand in writing under subsection (a) of
this Code section within 30 days after the corporation offered payment for his
or her shares, as provided in Code Section 14-2-1325.
(c) If the corporation does not offer payment within the time set forth in
subsection (a) of Code Section 14-2-1325:
(1) The shareholder may demand the information required under
subsection (b) of Code Section 14-2-1325, and the corporation shall
provide the information to the shareholder within ten days after receipt
of a written demand for the information; and
(2) The shareholder may at any time, subject to the limitations
period of Code Section 14-2-1332, notify the corporation of his own
estimate of the fair value of his shares and the amount of interest due
and demand payment of his estimate of the fair value of his shares and
interest due.
B-8
SECTION 14-2-1330.
(a) If a demand for payment under Code Section 14-2-1327 remains unsettled,
the corporation shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding within
the 60 day period, it shall pay each dissenter whose demand remains unsettled
the amount demanded.
(b) The corporation shall commence the proceeding, which shall be a nonjury
equitable valuation proceeding, in the superior court of the county where a
corporation's registered office is located. If the surviving corporation is a
foreign corporation without a registered office in this state, it shall commence
the proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
corporation was located.
(c) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding, which
shall have the effect of an action quasi in rem against their shares. The
corporation shall serve a copy of the petition in the proceeding upon each
dissenting shareholder who is a resident of this state in the manner provided by
law for the service of a summons and complaint, and upon each nonresident
dissenting shareholder either by registered or certified mail or statutory
overnight delivery or by publication, or in any other manner permitted by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) of this Code section is plenary and exclusive. The court
may appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers described
in the order appointing them or in any amendment to it. Except as otherwise
provided in this chapter, Chapter 11 of Title 9, known as the "Georgia Civil
Practice Act," applies to any proceeding with respect to dissenters' rights
under this chapter.
(e) Each dissenter made a party to the proceeding is entitled to judgment
for the amount which the court finds to be the fair value of his shares, plus
interest to the date of judgment.
SECTION 14-2-1331.
(a) The court in an appraisal proceeding commenced under Code Section
14-2-1330 shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court, but not
including fees and expenses of attorneys and experts for the respective parties.
The court shall assess the costs against the corporation, except that the court
may assess the costs against all or some of the dissenters, in amounts the court
finds equitable, to the extent the court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment under Code Section
14-2-1327.
(b) The court may also assess the fees and expenses of attorneys and
experts for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of Code Sections 14-2-1320 through 14-2-1327; or
(2) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this article.
(c) If the court finds that the services of attorneys for any dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these attorneys reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
B-9
SECTION 14-2-1332.
No action by any dissenter to enforce dissenters' rights shall be brought
more than three years after the corporate action was taken, regardless of
whether notice of the corporate action and of the right to dissent was given by
the corporation in compliance with the provisions of Code Section 14-2-1320 and
Code Section 14-2-1322.
B-10
ANNEX C
[FORM OF PROXY FOR HOLDERS OF OASIS COMMON STOCK]
OASIS GROUP, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON , 2002
THE UNDERSIGNED HEREBY APPOINTS [ ] AND [ ], EACH WITH POWER
TO ACT WITHOUT THE OTHER AND WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION,
AS PROXIES TO VOTE, AS DESIGNATED HEREIN, ALL STOCK OF OASIS GROUP, INC. OWNED
BY THE UNDERSIGNED AT THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD AT THE
OFFICES OF OASIS GROUP, INC. LOCATED AT MONTEITH COMMONS, FIRST FLOOR, 2931
PIEDMONT ROAD, N.E., ATLANTA, GA 30305 ON , , 2002, AT
A.M., LOCAL TIME, AND AT ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF,
UPON THE MATTER SET FORTH ON THE REVERSE SIDE OF THIS PROXY, AS DESCRIBED IN THE
ACCOMPANYING PROXY STATEMENT/PROSPECTUS, AND ANY SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX. SEE
REVERSE SIDE. YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH
THE BOARD OF DIRECTORS' RECOMMENDATION. THE PROXIES CANNOT VOTE YOUR SHARES
UNLESS YOU SIGN AND RETURN THIS CARD.
(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE)
OASIS GROUP, INC.
PLEASE MARK VOTE IN THE BOX IN THE FOLLOWING MANNER USING DARK INK ONLY.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE FOLLOWING PROPOSAL:
1. To adopt the Amended and Restated Plan and Agreement to For Against Abstain
Exchange Stock by and between Rainwire Partners, Inc. and [ ] [ ] [ ]
Oasis Group, Inc., dated as of December 19, 2001, and
approve the transaction contemplated thereby in which all of
the outstanding shares of Oasis common stock will be
converted into the right to receive a number of Shares of
Rainwire common stock based on the exchange ratio as defined
in the Agreement.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR THE ADOPTION OF THE SHARE
EXCHANGE AGREEMENT AND APPROVAL OF THE SHARE EXCHANGE AND, IN THE DISCRETION OF
THE PROXY HOLDERS, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE SPECIAL
MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
C-1
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND RETURN THIS PROXY CARD PROMPTLY.
If you plan to attend the Special Meeting, please mark this box: [ ]
Date:
---------------------------------, 2002
--------------------------------------
(SIGNATURE)
--------------------------------------
(SIGNATURE)
Please sign exactly as your name appears hereon and mail this proxy in the
enclosed envelope. Joint owners should each sign. When signing as attorney,
administrator, executor, guardian or trustee, please give your full title as
such. If executed by a corporation, the proxy should be signed by a duly
authorized officer. If executed by a partnership, please sign in the partnership
name by an authorized person.
NAME & ADDRESS --------------------------------------------------------
[CONTROL NUMBER]
PRINT HERE
--------------------------------------------------------
TO VOTE BY MAIL:
-- Mark, sign and date your proxy card.
-- Return your proxy card in the postage-paid envelope provided.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
C-2
ANNEX D
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--------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2000
COMMISSION FILE NUMBER: 0-23892
---------------------
RAINWIRE PARTNERS, INC.
(Exact Name of Registrant as specified in its Charter)
DELAWARE 57-0941152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
MONTEITH COMMONS, FIRST FLOOR
2931 PIEDMONT ROAD, N.E.
ATLANTA, GEORGIA 30305
(Address of principal executive offices of Incorporation or organization and zip
code)
ISSUER'S TELEPHONE NUMBER: (404) 842-1510
(Registrants telephone number, including area code)
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:
NONE.
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
COMMON STOCK, PAR VALUE $0.001 PER SHARE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the last 90 days. Yes [ ] No [X]
At December 31, 2000, 7,609,886 shares of the Registrant's Common Stock
were issued outstanding and the estimated aggregate market value of the
Registrant's outstanding common stock held by non-affiliates of the Registrant
was approximately $226,876.
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
D-1
PART I
DESCRIPTION OF BUSINESS.
RECENT DEVELOPMENTS
In February, 2001, Rainwire Partners, Inc. ("Rainwire" or the "Company")
and Oasis Group, Inc., a Georgia corporation ("Oasis"), began discussions
concerning the use of Rainwire as a reverse merger vehicle to position Oasis in
the public market. These initial discussions did not result in any agreements.
After exploring similar agreements with other parties, the Company re-entered
discussions with Oasis in July, 2001.
On August 29, 2001, Rainwire and Oasis completed negotiations and the Oasis
Share Exchange Agreement was signed. It is a non-binding agreement subject to
the completion of due diligence and exchange of Schedules outlined in the Oasis
Share Exchange Agreement. Prior to the Closing, Rainwire plans to increase its
authorized common stock and reverse split its present outstanding shares.
The Company is seeking shareholder approval of the Oasis Share Exchange
Agreement and the transactions contemplated by it. The consent of persons
holding a simple majority (over 50%) of the outstanding Company common stock is
needed to approve the closing of the transaction and authorization of the other
transactions identified. Because current management owns greater than 50% of the
outstanding Company common stock, the Company expects to receive the necessary
shareholder approval and intends to prepare an Information Statement on Form 14C
to inform the remaining shareholders of the majority's decision. The Company
expects to mail the Information Statement to its shareholders on or about
November 25, 2001, and believes that the transaction will close on or about
December 15, 2001.
Upon execution of the Oasis Share Exchange Agreement, Walter H. Elliott,
the President and a director of the Company resigned, and Ronald A. Potts was
elected to the Board of Directors of the Company and was appointed President and
Chief Executive Officer of the Company. Additionally, Mike McLaughlin and John
Hill were elected to the Board of Directors and Peggy Evans was appointed Chief
Financial Officer.
Furthermore, upon execution of the Share Exchange Agreement, the Company
issued 12,000,000 shares of its common stock to Osprey Investments, LLC (of
which Lyne Marchessault is the sole member) in satisfaction of loans in the
principal amount of $60,000.
BUSINESS DEVELOPMENT.
The Company was incorporated on May 10, 1991 in Delaware for the purpose of
consolidating the operations of Azimuth, Inc. (a fully accredited AIHA
Industrial Hygiene Laboratory for testing asbestos, metals and organic vapors)
and certain of its former environmental products businesses and acquiring the
assets of four general partnerships which were then leasing real estate and
laboratory and other equipment to Azimuth and the products businesses. The
Company formerly had three operating subsidiaries: Trico Environmetrics, Inc.
("Trico"), Envirometrics Products Company ("EPC") and Azimuth, Inc.
In 1996, the Company entered into a "Turnaround" phase, and all of the
Company's former operations were divested by the year 2000.
During the course of the Company's "Turnaround" phase, the Company explored
alternative plans for growth that included the identification of companies in
other markets which had greater growth potential than the Environmental, Health
and Safety Market. In September, 1999, the Company was introduced to The
Catapult Group, Inc., a Georgia corporation ("Catapult"), which was an Internet
integration firm offering intelligent end-to-end e-business solutions to large
and middle-market organizations. In February 2000, the Company and Catapult
reached terms that each felt were fair to the parties and entered into a
non-binding agreement whereby Rainwire would acquire Catapult, which became
binding on March 8, 2000.
D-2
Prior to the closing of the Catapult Exchange Agreement, on July 26, 2000,
Registrant effected a 10:1 reverse split of its outstanding common stock, issued
5,555,064 shares of its common stock to purchase all of the outstanding common
stock of Catapult, changed its name to The Catapult Group, Inc. and increased
its authorized shares from Ten Million (10,000,000) to Twenty Million
(20,000,000). An amendment to Registrant's Certificate of Incorporation
reflecting such changes was filed with the Secretary of State of Delaware on
July 26, 2000. Upon completion of the Catapult Exchange Agreement, Catapult
became a wholly owned subsidiary of the Company and the shareholders of Catapult
became owners of approximately 90% of the outstanding shares of Common Stock of
the Company. The Company subsequently changed its name to Rainwire Partners,
Inc.
On December 31, 2000, management adopted a plan to discontinue the
operations of the Company and to liquidate its assets.
BUSINESS OF ISSUER.
Upon completion of the Share Exchange with The Catapult Group, Inc.,
Rainwire's business became that of an Internet integration firm offering
intelligent end-to-end e-business solutions to large and middle-market
organizations. However, as of December 31, 2000, Rainwire adopted a plan to
discontinue the operations of the Company and to liquidate its assets.
Additionally, as of that date, Rainwire began to explore alternative plans for
growth, which included the identification of companies in markets that had
greater growth potential than the market for e-business solutions.
On August 29, 2001, Rainwire entered into a Share Exchange Agreement with
Oasis. Upon completion of the Share Exchange, Rainwire's business will consist
of the business plan of Oasis, which includes the acquiring, owning and
developing of parcels of undeveloped property and a residential mortgage
operation.
EMPLOYEES.
Presently, the Company has no full-time employees other than executive
officers. The Company had 20 employees at December 31, 2000.
DESCRIPTION OF PROPERTY.
The following includes each of the principal real properties owned or
leased by the Company as of December 31, 2000.
9229 University Boulevard, Charleston, SC(1)
Monthly Base Rental: $5,523.00
4940 Peachtree Boulevard, Suite 350, Norcross, GA(2)
Monthly Base Rental: $3,695.69
665 Pylant Street, Atlanta, GA(3)
Monthly Base Rental: $21,921.00
418 King Street, Suite 301, Charleston, SC(4)
Monthly Base Rental: $3,750.00
Lease Expiration Date: August 31, 2005
---------------
(1) Subsequent to December 31, 2000, the Company no longer occupied this
location. The Company is seeking to mitigate its outstanding lease
liabilities.
(2) This lease expired during fiscal year 2000.
(3) Subsequent to December 31, 2000, the Company no longer occupied this
location.
(4) The Company is seeking to mitigate the outstanding lease liability as the
landlord had seized and/or sold some of the equipment in partial
satisfaction of the past due lease rentals.
D-3
LEGAL PROCEEDINGS.
The Company is involved with several legal actions, principally as
defendant. These actions involve outstanding liabilities of the Company
including those of subsidiaries. Following are four such actions.
Azimuth Laboratory, Inc., a subsidiary of EVRM, generated hazardous waste
during the time of its operations which ceased in April, 2000. According to a
former landlord, Azimuth was responsible for a hazardous waste cleanup on the
leased premises, and he is seeking recovery of approximately $130,000, including
the cleanup and remaining payments due under the terms of the lease agreement
which is to expire in December, 2001. A motion for summary judgment is expected
to be heard by the end of 2001. Only the remaining lease obligation of $66,271
has been recorded as of December 31, 2000.
As of December 31, 2000, a judgment against the Company was obtained by the
holder of the remaining Series C redeemable preferred stock for $21,666 relating
to the failure by the Company to redeem 8,333 of those shares and to pay
dividends when due. Substantially all of that amount was recorded as of December
31, 2000.
IOS Capital, Inc. has made a demand to Rainwire for sums defaulted upon as
a result of an equipment lease signed by Rainwire in February, 1997. IOS Capital
indicated that they would compromise the amounts owed for the sum of $15,479.20
in full satisfaction of the claim; however, Rainwire failed to make the payment
by the required date.
An action has been filed and reduced to a judgment against Rainwire
Partners, Inc. by H.E. Igoe in the amount of $21,665.96 filed on June 25, 2001.
This matter involved a share purchase agreement between Rainwire and Igoe.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 18, 2000 the Company filed a definitive Information Statement
soliciting consents from its shareholders concerning four (4) matters:
1. Reverse split of the outstanding shares 10:1;
2. Increase of the Authorized Shares from 10 million to 20 million;
3. Corporate name change to the Catapult Group, Inc.; and
4. Consent to consummate the share exchange with the Catapult Group.
On June 8, 2000 the Company's transfer agent, Continental Stock Transfer & Trust
Company suspended the consent count because a majority (approximately 60%) of
the consents had been returned. The transfer agent then issued the Company a
confirmation letter tabulating the consent count, 3,264,363 votes were received
with greater than 99% giving consent to the transactions outlined in the
Information Statement.
No other matters were submitted to our security holders for a vote during
the fiscal year ending December 31, 2000.
PART II
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION.
The Company's Common Stock has been publicly traded separately and was
initially quoted on the Nasdaq Smallcap Market ("Nasdaq") under the symbol
"EVRM" on August 12, 1994. Upon the divestiture of the Trico subsidiary the
Company fell below the listing requirements of Nasdaq. On December 3, 1996, the
Company's common stock and warrants were delisted from The Nasdaq SmallCap
Market and were subsequently traded on Over the Counter Bulletin Board. On
January 4, 1999, the
D-4
Securities and Exchange Commission (SEC) approved amendments to NASD Rules 6530
and 6540 to limit quotations on the OTC Bulletin Board(R) ("OTCBB") to the
securities of companies that report their current financial information to the
SEC. On November 18, 1999, the Company's common stock and warrants were delisted
from the OTCBB because of failure to have the required SEC periodic filings
submitted by that date. As of that date, price Quotations could be found on
Electronic Pink Sheets (the "Pink Sheets"). On January 28, 2000 the Company
brought its filings with the SEC current, thus meeting the requirements for
re-listing on the OTCBB. On March 21, 2000 the Company's common stock began
trading on OTCBB. On August 1, 2000, the Company received a new symbol from
NASDAQ. As of that date, Rainwire was traded on the OTCBB under the symbol RNWR.
In 2001, the Company's common stock was again delisted from the OTCBB because of
the Company's failure to file its required SEC periodic filings. On October 19,
2001, the last sale price of a share of the Company's common stock on the Pink
Sheets was $0.08.
The following table sets forth the high and low bid prices for the Common
Stock as reported in the trading media and for the periods reflected above for
each fiscal quarter commencing January, 1999 through December, 2000. The
quotations listed below reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and do not necessarily represent actual transactions.
HIGH LOW
----- -----
1999
First Quarter............................................. 0.187 0.062
Second Quarter............................................ 0.375 0.062
Third Quarter............................................. 0.375 0.050
Fourth Quarter............................................ 0.375 0.005
2000
First Quarter............................................. 0.35 0.08
Second Quarter............................................ 0.375 0.06
Third Quarter*............................................ 4.25 2.00
Fourth Quarter............................................ 2.50 0.50
---------------
* The common stock of the Company was consolidated 10 for 1 in July, 2000.
HOLDERS.
On December 31, 2000 there were approximately 103 shareholders of record
the Company's common stock, based on information provided by the Company's
transfer agent. This number may not include individuals whose shares are held in
"street names."
DIVIDENDS.
The Company has never paid dividends on its Common Stock and does not
anticipate that it will do so in the foreseeable future. For the foreseeable
future any future earnings or funds otherwise available, if any, for the payment
of dividends will be used to pay dividends on the outstanding Preferred Stock or
for reinvestment in the Company's business. Any future determination to pay cash
dividends on the Common Stock will be at the discretion of the Board of
Directors and will reflect such other factors (including contractual
requirements) as the Board of Directors deem relevant.
In April, 2000, all of the Series A and B preferred shares, and 2/3 of the
Series C preferred shares were converted into common stock of the Company,
including accrued dividends. Total common shares issued to effect the conversion
was 167,605, valued at $670,420 or $4.00 per share. As of December 31, 2000,
there were 24,959 shares of Series C preferred stock outstanding valued at
$52,913, including accretion of $2,995.
D-5
RECENT SALES OF UNREGISTERED SECURITIES.
In April, 2000, the Registrant issued an aggregate of 186,288 shares of its
common stock in settlement of prior accounts payable. These shares were sold
pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In July, 2000, the Registrant issued an aggregate of 5,555,064 shares of
its common stock to the shareholders of The Catapult Group, Inc. in exchange for
all of the outstanding common shares of The Catapult Group, Inc. These Shares
were sold pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In September, 2000, the Registrant issued an aggregate of 900,000 shares of
its common stock to four individuals in exchange for $700,000 or at a price of
$0.78 per share. All four individuals were accredited investors, and these
shares were sold pursuant to Section 4(2) of the Securities Act and have been
marked "restricted."
In September, 2000, the Registrant issued an aggregate of 120,000 shares of
its common stock in settlement of a note payable in the principal amount of
$150,000. These shares were sold pursuant to Section 4(2) of the Securities Act
and have been marked "restricted."
In August, 2001, the Registrant issued 12,000,000 shares of its common
stock in settlement of loans in the principal amount of $60,000. These shares
were sold pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In August, 2001, the Registrant issued 100,000 shares of its common stock
to an individual for services provided and to be provided to the Registrant. The
services were valued at $2,500 or $0.025 per share. These shares were sold
pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In September, 2001, the Registrant issued 200,000 shares of its common
stock to an individual in exchange for $10,000 or at a price of $0.05 per share.
The individual was an accredited investor, and these shares were sold pursuant
to Section 4(2) of the Securities Act and have been marked "restricted."
In October, 2001, the Registrant issued 500,000 shares of its Series D
Convertible Preferred Stock to Osprey Investments, LLC in exchange for
10,000,000 shares of the Registrant's common stock. These shares were sold
pursuant to Section 4(2) of the Securities Act and have been marked
"restricted".
SERIES D CONVERTIBLE PREFERRED STOCK ("SERIES D")
Our Amended and Restated Certificate of Incorporation authorizes 2,500,000
shares of preferred stock and provides that the Board of Directors may, by
resolution, fix the rights and limitations of our preferred stock. The Board of
Directors had previously utilized this authority to authorize 70,000 shares of
Series A Preferred Stock, 208,640 shares of Series B Preferred Stock and 74,878
shares of Series C Preferred Stock.
On October 15, 2001, our Board of Directors approved the creation,
authorized the issuance, and fixed the designation of 500,000 share of Series D
Convertible Preferred Stock. On October 15, 2001, our Board of Directors further
approved the exchange of 500,000 shares of our Series D Convertible Preferred
Stock for 10,000,000 of our common stock owned by Osprey Investments, LLC. Ms.
Marchessault abstained from the latter director vote. On or about October 26,
2001, we filed a Certificate of Designation of Series D Convertible Preferred
Stock with the Delaware Division of Corporations. Described below is a summary
of the terms of the Series D Convertible Preferred Stock.
Convertability
The Series D is immediately convertible at the option of the holder into
Ten Million (10,000,000) shares of the common stock of the Company. If the
Company shall fail to pay a dividend to the holders of the Series D for two
consecutive quarters, the Series D shall be convertible into fifty million
(50,000,000) shares of the common stock of the Company so long as such dividends
remain unpaid.
D-6
Redemption
The Company may redeem the Series D, in whole or in part, at any time, at a
redemption price equal to the sum of any accrued but unpaid dividends and $1.00
per share redeemed.
Dividends
The holders of the Series D shall be entitled to receive a cumulative
dividend at a rate of twelve percent (12%) per annum out of any assets of the
Company legally available therefore, when, if and as declared by our Board of
Directors. Dividends on Series D shall be payable on a quarterly basis.
Liquidation Preference
If the Company were dissolved or liquidated, voluntarily or involuntarily,
the holders of the Series D would be entitled to receive, prior and in
preference to any distribution of our assets to the holders of any of our other
equity securities, other than our Series C Convertible Preferred Stock, an
amount equal to $1.00 per share.
Voting Rights
On all matters on which the holders of our common stock are entitled to
vote, each holder of Series D shall be entitled to ten (10) votes for each share
of Series D standing in his or her name on the books of the Company. In
addition, the holders of the Series D shall be entitled to elect the majority of
the Company's Board of Directors.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
This 10-KSB contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. Investors are cautioned that certain
statements in this 10-KSB are "forward looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 and involve known and
unknown risks, uncertainties and other factors. Such uncertainties and risks
include, among others, certain risks associated with the closing of the Oasis
transaction described herein, government regulation, and general economic and
business conditions. Actual events, circumstances, effects and results may be
materially different from the results, performance or achievements expressed or
implied by the forward-looking statements. Consequently, the forward-looking
statements contained herein should not be regarded as representations by the
Company or any other person that the projected outcomes can or will be achieved.
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and Notes thereto, appearing elsewhere in
this Form 10-KSB.
GENERAL OVERVIEW
On July 26, 2000 the former company, Environmetrics, Inc. exchanged
approximately ninety percent of newly issued restricted common stock for all of
the outstanding common stock of The Catapult Group, Inc. On that date, the name
was changed to Rainwire Partners, Inc. for both The Catapult Group, Inc. and the
former company. As of the date of the exchange, the former company's net assets
were written down to a fair market value, as required under generally accepted
accounting principles. The previous historical financial data of The Catapult
Group, Inc. was carried forward since Catapult is considered the accounting
acquirer; therefore the following comments pertain to the historical financial
statements of The Catapult Group, Inc. and i20, Inc., including the net assets
acquired as mentioned above.
RESULTS OF OPERATIONS.
Year ended December 2000 Compared to year ended December 1999
The company lost $419,028 for 1999 compared to a loss of $1,494,708 in
2000. In addition, in 2000 the company recorded a loss on the disposal of the
business of $578,191. The decision was made on
D-7
December 31, 2000 to discontinue the operations of the company; accordingly the
financial statements for 1999 reflect the operating loss as a discontinued loss
for comparative purposes.
The company commenced its operation in July, 1999 and acquired i20, Inc. in
August, 1999. i20, Inc.'s planned operations for the period subsequent to its
purchase was the basis for the company paying approximately $500,000 more than
the fair value of the assets acquired at that date. The loss from discontinued
operations in year 2000, includes not only a write off of the unamortized
balance of Goodwill of approximately $460,000 but unsuccessful efforts to
sustain the business during the period when dot.com companies were failing. The
loss on the disposal of the business in 2000 consists mainly of forward looking
expenses, which were obligations of the company as of December 2000 and
obligation incurred as a result of that decision.
FINANCIAL CONDITION.
The company's audit report for the year 2000 discloses a "going" concern
paragraph in reference to the company's concern for continuing its existence in
the future. This concern is highlighted by the fact that the company has
negative working capital of approximately $1,100,000, a deficit since inception
of approximately $2,500,000 and a deficit in stockholders equity of
approximately $1,160,000. There are a number of legal actions against the
company for failure to honor its commitments, which includes an obligation of
the company incurred by Environmetrics, Inc., Azimuth Laboratories, Inc.
CERTAIN RISK FACTORS.
Rainwire Partners, Inc. has entered into a Plan and Agreement to Exchange
Stock by and among Rainwire, Oasis Group, Inc. and the Shareholders of Oasis
(the "Oasis Share Exchange Agreement"). As a result of the Oasis Share Exchange
Agreement, Oasis will become a wholly-owned subsidiary of Rainwire. Oasis faces
various risks that may prevent Oasis from implementing its business plan. If any
of the following risks actually occur, Oasis' business, financial condition or
results of operations could be materially harmed. If Oasis' business is harmed,
the trading price of Rainwire's Common Stock could decline and you could lose
all or part of your investment.
BECAUSE OF OUR LACK OF FUNDS AND PAST LOSSES, OUR INDEPENDENT ACCOUNTANT'S
AUDIT REPORT STATES THAT THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO
CONTINUE AS A GOING CONCERN.
Rainwire's independent certified public accountants have raised substantial
doubt about our ability to continue as a going concern. Our ability to continue
as a going concern is highly dependent upon obtaining additional financing for
our planned operations, and/or achieving profitable operations. If we are unable
to obtain additional financing in sufficient amounts or on acceptable terms, our
operating results and prospects could be adversely affected.
WE HAVE INCURRED SIGNIFICANT LOSSES.
As of December 31, 2000, the end of our most recent fiscal year, we had
incurred significant losses. Additionally, as of December 31, 2000, Rainwire
adopted a plan to discontinue the operations of the Company and to liquidate its
assets. Accordingly, we expect to continue incurring operating losses until we
are able to derive meaningful revenues from Oasis' anticipated operations. There
can be no assurance that Oasis' anticipated operations will ever produce
profitable operations or that we will be able to continue to obtain financing
until Oasis is able to produce profitable operations. Because of the substantial
start-up costs that must be incurred by a new company, we expect to incur
significant operating losses during the initial years of Oasis' operations. No
assurance can be given that the future operations of Oasis will be successful.
CURRENT RAINWIRE SHAREHOLDERS WILL SUFFER IMMEDIATE AND SUBSTANTIAL
DILUTION UNDER TERMS OF THE SHARE EXCHANGE AGREEMENT.
Under the terms of the Oasis Share Exchange Agreement, Rainwire will effect
a reverse split of its current issued and outstanding common stock and will
issue shares of the Company's Common Stock to the shareholders of Oasis. As a
result, current shareholders of Rainwire will suffer substantial dilution.
D-8
In addition, under the terms of the Oasis Share Exchange Agreement,
Rainwire will amend its Certificate of Incorporation to increase its authorized
shares of Common Stock to One Hundred Million (100,000,000). The Company's
ability to issue additional shares of Common Stock after the completion of the
Oasis Share Exchange will subject current Rainwire shareholders to additional
dilution.
OASIS IS A DEVELOPMENT STAGE COMPANY AND HAS NO SIGNIFICANT OPERATING
HISTORY.
Oasis was founded on November 16, 1999, and to date has had no business
operations. As of the date of this annual report, Oasis has not had any revenue
producing operations on which you can evaluate its potential for future success.
Oasis' activities to date have been limited to conducting a private offering of
its securities and entering into agreements or letters of intent concerning
various real property, a mortgage brokerage company and an aviation company. As
a development stage company, Oasis is subject to all risks, expenses, and
uncertainties frequently encountered by new companies. Any unanticipated
expenses, problems, or difficulties may result in material delays both in the
completion of the Oasis Share Exchange and in implementing Oasis' business plan.
WE MAY BE UNABLE TO RAISE ADDITIONAL FUNDING TO PURSUE OUR STRATEGIES WHICH
MAY HARM OUR BUSINESS
The Company anticipates the need for additional capital as it pursues its
business strategy. The Company expects to raise additional capital through a
combination of new debt issuances and equity sales, from private as well as
public sources. Issuance of new debt and/or the sale of equity will likely have
a dilutive effect on the Company and its shareholders. Implementation of the
Company's strategy and its business plans is contingent upon the availability of
such funding sources. No assurance can be given that the Company will be able to
raise debt or equity capital, at terms that are acceptable to the Company, or at
all, in order to fund its operations as set forth above.
OASIS' BUSINESS PLAN MAY NEVER BE IMPLEMENTED.
Oasis' business plan includes the acquiring, owning and developing of
parcels of undeveloped property and a residential mortgage operation. Oasis has
entered into agreements or letters of intent concerning various real property, a
mortgage brokerage company and an aviation company; however, there is no
assurance that any of the transactions contemplated by the agreements will ever
be completed.
WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS IN THE FORESEEABLE FUTURE.
We presently anticipate that we will retain all available funds for use in
the operation and expansion of our business and do not anticipate paying any
dividends in the foreseeable future. Any future payment of dividends to our
stockholders will depend on decisions that will be made by our board of
directors and will depend on then existing conditions, including our financial
condition, contractual restrictions, capital requirements and business
prospects.
OUR COMMON STOCK CURRENTLY TRADES ON THE PINK SHEETS(R) AND, AS A RESULT,
THERE MAY BE LIMITED TRADING VOLUME IN THE STOCK, AS WELL AS A GREATER SPREAD
BETWEEN "BID" AND "ASKED" PRICES.
Our common stock currently trades on the Pink Sheets(R), a quotation
service operated by Pink Sheets, LLC. The Pink Sheets(R) does not impose listing
standards or requirements, does not provide automatic trade executions, and does
not maintain relationships with quoted issuers. Issuers whose securities are
traded on the Pink Sheets(R) may experience a greater spread between the "bid"
and "asked" prices of their securities compared with securities traded on a
national securities exchange or Nasdaq, and a limited liquidity in their
securities. In addition, many investors have policies against the purchase or
holding of securities traded in the over-the-counter markets. Trading in an
over-the-counter market such as Pink Sheets(R) has, and will continue to, affect
both the trading volume and the market value of our common stock for the
foreseeable future.
D-9
FINANCIAL STATEMENTS.
The following documents are filed as part of this report:
(1) Independent Auditors' Report............................ F-1
(2) Financial statements:
Consolidated Balance Sheet.............................. F-2
Consolidated Statements of operations................... F-3
Consolidated Statements of Changes in Shareholders'
Equity................................................. F-4
Consolidated Statements of cash flows cumulative for
the years ending December 31, 2000 and 1999............ F-5
Notes to Financial Statements........................... F-6
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or other notes herein.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
The Company engaged the firm of Welch, Roberts & Amburn, LLP to conduct the
audits of its financial statements for the years ended December 31, 1999, and
1998. Welch, Roberts & Amburn, LLP, resigned on May 31, 2001 due to outstanding
and past due fees owed by the Company.
In connection with Welch, Roberts & Amburn, LLP's audits of the financial
statements of the Company, there were no disagreements with Welch, Roberts &
Amburn, LLP on any matter of accounting principles, financial disclosure, or
auditing scope or procedures, which disagreements if not resolved to their
satisfaction would have caused them to make reference in connection with their
opinion to the subject matter of the disagreement.
The audit reports of Welch, Roberts & Amburn, LLP on the consolidated
financial statements for the years ended December 31, 1999, and 1998 did not
contain any adverse opinion or disclaimer of opinion; however, the unqualified
opinion contained a fourth paragraph with respect to an emphasis of a paragraph
discussing recurring losses from operations and decreases in working capital
issues confronting the Company.
The Company had also engaged the firm of Tauber & Balser, P.C. in
connection with the audit of the consolidated balance sheet of The Catapult
Group, Inc., and Subsidiary as of December 31, 1999, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the period from July 21, 1999 (inception) to December 31, 1999.
In connection with the audit as of December 31, 1999, and for the period
from July 21, 1999 (inception) to December 31, 1999, there was no disagreement
with Tauber & Balser, P.C. on any matter of accounting principles, financial
disclosure, or auditing scope or procedures, which disagreement if not resolved
to their satisfaction would have caused them to make reference in connection
with their opinion to the subject matter of the disagreement.
The audit report of Tauber & Balser, P.C. on the consolidated financial
statements for the year ended December 31, 1999 was issued with an unqualified
opinion.
On or about September 9, 2001, the Company notified Tauber & Balser, P.C.
that it had engaged the firm of Braverman & Company, P.C., to conduct the audit
of its financial statements for the year ended December 31, 2000.
D-10
PART III
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
The following table sets forth all the directors, executive officers and
significant employees of the Company as of October 25, 2001. In April, 2001,
Bryan M. Johns resigned as an officer and director of the Company. On August 29,
2001, Walter H. Elliott, III resigned as an officer and director of the Company.
In the years prior to December 31, 2000, various officers, directors and
control persons have failed to timely report under section 16(a) of the Exchange
Act. Bryan M. Johns, Lyne Marchessault and Anguilla Equity Partners, Inc., who
were Directors, Officers and/or 10% stockholders, failed to timely file reports
under Section 16 of the Exchange Act with respect to the Company during the
Company's 2000 fiscal year. In February 2001, Mr. Johns and Ms. Marchessault
each filed a Form 5 under Section 16 of the Exchange Act with respect to their
holdings of relevant equity securities of the Company as of the end of the
Company's 2000 fiscal year. Walter H. Elliott III, the Company's other officer
and director as of December 31, 2000, had no transactions during the Company's
2000 fiscal year subject to Section 16 reporting.
NAME AGE POSITION
---- --- --------
Ronald A. Potts........................... 54 President, CEO, and Chairman of the Board
Lyne Marchessault......................... 43 Secretary and Director
Peggy Evans............................... 53 Chief Financial Officer
Michael McLaughlin........................ 58 Director
John Hill................................. 55 Director
Ronald A. Potts, Chairman, President and Chief Executive Officer. Mr. Potts
was elected to our Board of Directors and appointed Chairman, Chief Executive
Officer and President of the Rainwire in August, 2001. From 1996 until March,
2000, Mr. Potts was President of Londott Investments. Beginning in March, 2000,
Mr. Potts was elected to the Board of Directors and was appointed Chairman and
Chief Executive Officer of Oasis Group, Inc. Mr. Potts holds an Economics degree
from the University of Western Ontario.
Lyne Marchessault, Secretary and Director. Ms. Marchessault was elected to
our Board of Directors and appointed Secretary in July, 2000. In addition, in
August, 2001, Ms. Marchessault was elected to the Oasis Board of Directors. From
1996 until January, 1998 Ms. Marchessault was the Director of International
Marketing and Public Relations for Ultimate Technographics. From January, 1998
until the present, Ms. Marchessault has been the managing member of Osprey
Investments, LLC. Ms. Marchessault holds a Marketing degree from Concordia
University and a Masters in Business Administration from McGill University.
Peggy Evans, Chief Financial Officer. Ms. Evans was appointed as our Chief
Financial Officer in August, 2001. Since October 1, 2000, Ms. Evans has been the
Chief Financial Officer for Oasis Group, Inc. Prior to that time, Ms. Evans
served as the President of Yakley Management, Inc. and the Chief Operating
Officer of Eston Hospitality, LLC. Ms. Evans holds a B.S. degree in business
from Pepperdine University.
Michael McLaughlin, Director. Mr. McLaughlin was elected to our Board of
Directors in August, 2001. In addition, Mr. McLaughlin was elected to the Oasis
Board of Directors in August, 2000. For the last 14 years, Mr. McLaughlin has
been the owner and President of American Flooring, Inc. Mr. McLaughlin holds a
bachelors degree in business from Florida Atlantic University.
John Hill, Director. Mr. Hill was elected to our Board of Directors in
August, 2001. Mr. Hill has also been a director of Oasis Group, Inc. since July,
2000. From 1996 until 1998, Mr. Hill was a Divisional Claims Superintendent with
State Farm Fire & Casualty Company and from 1998 until the present,
D-11
Mr. Hill has been a Section Manager with State Farm. Mr. Hill holds a B.S. in
Business Administration degree from the University of Tennessee.
Directors hold office until the next annual meeting of shareholders.
Officers are elected by the Board of Directors following the Annual meeting of
stockholders.
EXECUTIVE COMPENSATION.
The compensation paid in 1999 and 2000 to the Chief Executive Officer of
the Company and to the President of the Company is set forth in the table below.
No executive officers or any officer of a subsidiary had total compensation that
exceeded $100,000.
2000 SUMMARY COMPENSATION TABLE
THE COMPANY
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- --------------------- -------
OTHER ANNUAL RESTRICTED OPTIONS LTIP ALL OTHER
SALARY BONUS COMPENSATION STOCK SARS PAYOUT COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) AWARDS (#) ($) ($)
--------------------------- ---- -------- ----- ------------ ---------- ------- ------- ------------
Bryan Johns............... 2000 $102,000 0 $7,200 0 0 0 0
President and CEO(1) 1999 $ -0- 0 0 0 0 0 0
Walter H. Elliott......... 2000 $ 91,249 0 0 0 0 0 0
President and CEO(2) 1999 $ 75,000 0 0 93,174(3) 150,000(4) 0 0
---------------
(1) Mr. Johns entered into an employment agreement with the Company on July 26,
2000, which paid him an annual salary of $102,000 and an annual car
allowance of $7,200. Mr. Johns resigned as President and Chief Executive
Officer in April, 2001.
(2) Mr. Elliott resigned as President and Chief Executive Officer in July 2000.
Mr. Elliott's salary was $85,000 per year until his resignation in July,
2000. On July 26, 2000, Mr. Elliott entered into an employment agreement
with the Company that paid him an annual salary of $100,000.
(3) Represents shares of stock issued in lieu of salary for 1997 and 1998 when
Mr. Elliott's salary was cut from $85,000 annually to $59,500. This number
does not reflect the 10:1 reverse stock split that occurred in connection
with the Catapult Share Exchange in July, 2000.
(4) Represents stock options granted in December, 1999. This number does not
reflect the 10:1 reverse stock split that occurred in connection with the
Catapult Share Exchange in July, 2000.
There were no options granted to the Executive Officers of the Company and
its subsidiaries during the year ending December 31, 2000. The Company has no
stock appreciation rights ("SARs") outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT.
SECURITY OWNERSHIP.
The following table sets forth information regarding ownership of the
Registrant's common stock by all persons who are known by the Registrant to own
more than 5% of the total outstanding shares, by all officers and directors of
the Company, and by all officers and directors as a group as of December 31,
2000. In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock subject to options
held by that person that are currently exercisable or exercisable within sixty
(60) days of the date of this Annual Report are deemed outstanding. These
shares, however are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Except as indicated in the footnotes
to this table and pursuant to applicable community property laws, each
shareholder named in the table has sole voting and investment power with the
shares
D-12
set forth opposite such shareholder's name. Except as otherwise indicated in the
table, the address of the stockholders listed below is that of the Company's
principal executive office. Directors not included in the table below do not
hold Company securities.
SHARES BENEFICIALLY
OWNED AS OF
DECEMBER 31, 2000
--------------------
NAME AND ADDRESS NUMBER PERCENT
---------------- --------- -------
Ronald A. Potts(1).......................................... 300,000 3.9%
Lyne Marchessault(2)........................................ 231,461 3.0%
Osprey Investments, LLC(3).................................. 231,461 3.0%
Monteith Commons, First Floor
2931 Piedmont Road, N.E.
Atlanta, Georgia 30305
Bryan M. Johns(4)........................................... 1,296,182 17.0%
Walter H. Elliott III(5).................................... 19,484 *
Arnold Johns(6)............................................. 1,064,721 14.0%
320 Cameron Ridge Drive
Atlanta, GA 30328
Jake Cantrell............................................... 485,000 6.4%
P.O. Box 1249
Alpharetta, GA 30009
Anguilla Equity Partners, Inc............................... 1,481,350 19.5%
Keithley F.T. Lake
The Law Building,
The Valley Anguilla, BWI
Cambridge Investments....................................... 462,922 6.1%
Keithley F.T. Lake
The Law Building, The Valley
Anguilla, BWI
Cambridge Capital, LLC...................................... 648,091 8.5%
3475 Lenox Road, N.E., Suite 995
Atlanta, GA 30326
All officers and directors as a group(7).................... 1,547,127 20.3%
---------------
* Less than 1%.
(1) Mr. Potts became an officer and director in August, 2001.
(2) Includes 231,461 shares owned by Osprey Investments, LLC of which Ms.
Marchessault is the sole member.
(3) Does not include the 12,000,000 shares issued to Osprey in August, 2001, and
the subsequent exchange of 10,000,000 shares of Common Stock for 500,000
shares of Series D Convertible Preferred Stock in October, 2001.
(4) Mr. Johns resigned as an officer and director in April, 2001.
(5) Mr. Elliott resigned as an officer and director on August 29, 2001.
(6) Includes 648,091 shares owned by Cambridge Capital, LLC.
(7) Does include shares owned by Ronald Potts who did not become an officer and
director until August, 2001.
CHANGES IN CONTROL.
The Company's Share Exchange Agreement with Oasis Group, Inc. provides for
a change of control of the Company. Upon execution of the Share Exchange
Agreement, Walter H. Elliott, the President and
D-13
a director of the Company resigned, and Ronald A. Potts was elected to the Board
of Directors of the Company and was appointed President and Chief Executive
Officer of the Company. Additionally, Mike McLaughlin and John Hill were elected
to the Board of Directors and Peggy Evans was appointed Chief Financial Officer.
Furthermore, upon execution of the Share Exchange Agreement, the Company
issued 12,000,000 shares of its common stock to Osprey Investments, LLC (of
which Lyne Marchessault is the sole member) in satisfaction of loans in the
principal amount of $60,000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In connection with the Share Exchange Agreement, Rainwire issued 12,000,000
shares of its common stock to Osprey Investments, LLC (of which Lyne
Marchessault, our Secretary and a director, is the sole member) in satisfaction
of loans in the principal amount of $60,000. In addition, in October, 2001,
Rainwire exchanged 500,000 of its Series D Convertible Preferred Stock for
10,000,000 shares of its common stock owned by Osprey. Ms. Marchessault
abstained from the Board of Directors vote concerning this exchange of shares.
Rainwire's officers and directors have ownership interests in Oasis. Walter
H. Elliott, a former officer and director of Rainwire, owns less than 1.0% of
the outstanding common stock of Oasis, and Lyne Marchessault, our Secretary and
a director, owns approximately 6.0% of the outstanding common stock of Oasis.
Additionally, Ronald A. Potts, who was appointed to the Board of Directors and
as Chief Executive Officer and President in connection with the Oasis Share
Exchange, owns 11.6% of the outstanding common stock of Oasis. Furthermore,
Peggy Evans, our newly appointed Chief Financial Officer, owns approximately
4.2% of the outstanding common stock of Oasis and John Hill and Mike McLaughlin,
newly appointed directors each own less than 1.0% of the outstanding common
stock of Oasis.
Additionally, in 2001, Oasis has loaned Rainwire approximately $43,000 to
date. As of December 31, 2000, Rainwire had loaned Oasis $12,700.
As a result of the change in control of Rainwire in connection with the
Oasis Share Exchange Agreement, Rainwire has moved its business address to the
offices of Oasis. Until the closing of the Oasis Share Exchange, Oasis has
agreed to allow Rainwire to use Oasis' offices on a rent free basis, although
the parties have not entered into a formal agreement.
EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS
3.1 Amended and Restated Certificate of Incorporation*
3.2 Amended and Restated Bylaws*
3.3 Certificate of Designation of Series A, B, and C Preferred Stock*
3.4 Certificate of Designation of Series D Convertible Preferred Stock
4.1 Rainwire Partners, Inc. 2000 Stock Option Plan
10.1 Plan and Agreement to Exchange Stock by and among Rainwire Partners,
Inc., Oasis Group, Inc. and the Shareholders of Oasis Group, Inc.
16.1 Letter on change in certifying accountant
23.1 Consent of Tauber & Balser, P.C.
---------------
* Incorporated by reference, filed as an Exhibit to report on Form 10-KSB for
1998, filed on January 28, 2000 (SEC File No. 0-23892).
REPORTS ON FORM 8-K
During the fourth quarter of 2000, the Registrant filed no reports on Form
8-K.
D-14
On October 17, 2001, the Registrant filed a Form 8-K report that reported
that the Registrant had abandoned its Information Statement on Schedule 14C
filed with the Commission on March 5, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: 10/26/01 /s/ RONALD A. POTTS
----------------------------------------------
Chairman of the Board, President,
Chief Executive Officer
Date: 10/26/01 /s/ PEGGY EVANS
----------------------------------------------
Chief Financial and Accounting Officer
Date: 10/26/01 /s/ LYNE MARCHESSAULT
----------------------------------------------
Secretary and Director
Date: 10/26/01 /s/ MIKE MCLAUGHLIN
----------------------------------------------
Director
Date: 10/26/01 /s/ JOHN HILL
----------------------------------------------
Director
D-15
TABLE OF CONTENTS
PAGE
----
INDEPENDENT AUDITORS' REPORT................................ D-F-1
BALANCE SHEET............................................... D-F-2
STATEMENTS OF OPERATIONS.................................... D-F-3
STATEMENTS OF STOCKHOLDERS' EQUITY.......................... D-F-4
STATEMENTS OF CASH FLOWS.................................... D-F-5
NOTES TO FINANCIAL STATEMENTS............................... D-F-6
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
RAINWIRE PARTNERS, INC.
ATLANTA, GEORGIA
We have audited the accompanying consolidated balance sheet of Rainwire
Partners, Inc. (a Delaware corporation) and subsidiary as of December 31, 2000,
and the related consolidated statements of operations, changes in stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The consolidated
financial statements of Rainwire Partners, Inc. as of December 31, 1999, were
audited by other auditors whose report dated March 29, 2000, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Rainwire
Partners, Inc. as of December 31, 2000, and the results of its operations and
its cash flows for the year then ended in conformity with auditing standards
generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Company has suffered substantial
recurring losses and has a deficit working capital and equity as of December 31,
2000. It has also discontinued its entire business operations and is dependent
upon its shareholders for all cash flow requirements. The Company needs the
ability to develop additional sources of capital, and/or achieve profitable
operations through a merger or acquisition. These conditions raise substantial
doubt about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Braverman & Company, P.C.
Phoenix, Arizona
October 14, 2001
D-F-1
RAINWIRE PARTNERS, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
ASSETS OF DISCONTINUED BUSINESS
CURRENT ASSETS
Cash........................................................ $ 2,043
Accounts receivable, net of allowance for doubtful accounts
of $29,575................................................ 21,962
Related party advance, unsecured............................ 12,700
-----------
TOTAL CURRENT ASSETS.............................. 36,705
-----------
OTHER ASSETS
Deposits.................................................... 6,257
-----------
$ 42,962
===========
LIABILITIES OF DISCONTINUED BUSINESS
CURRENT LIABILITIES
Shareholder loans........................................... $ 60,000
Accounts payable............................................ 469,517
Accrued business disposal costs and expenses................ 513,016
Other accrued liabilities................................... 110,361
-----------
TOTAL CURRENT LIABILITIES......................... 1,152,894
-----------
REDEEMABLE PREFERRED STOCK
Par value $.01; authorized 2,500,000 shares outstanding,
24,959 shares............................................. 52,913
-----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value; authorized, 20,000,000 shares
outstanding, 7,609,886 shares............................. 7,610
Paid-in capital............................................. 1,321,472
Deficit accumulated since inception......................... (2,491,927)
-----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT).............. (1,162,845)
-----------
$ 42,962
===========
See accompanying notes to financial statements
D-F-2
RAINWIRE PARTNERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
JULY 21, 1999
YEAR ENDED (INCEPTION) TO
DECEMBER 31, DECEMBER 31,
2000 1999
------------ --------------
(RESTATED)
REVENUES.................................................... $ $
----------- ----------
OPERATING EXPENSES..........................................
=========== ==========
INCOME (LOSS) FROM CONTINUING OPERATIONS....................
----------- ----------
DISCONTINUED OPERATIONS
Loss from operations of discontinued business............. (1,494,708) (419,028)
Provision for loss on disposal of the business............ (578,191)
----------- ----------
NET LOSS.................................................... $(2,072,899) $ (419,028)
=========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING........ 6,198,828 5,555,064
=========== ==========
BASIC AND DILUTED LOSS PER COMMON SHARE
Income (Loss) from operations............................. $ $
----------- ----------
Loss from discontinued operations......................... (0.24) (0.08)
----------- ----------
BASIC AND DILUTED LOSS PER COMMON SHARE..................... $ (0.24) $ (0.08)
=========== ==========
See accompanying notes to financial statements
D-F-3
RAINWIRE PARTNERS INC.
CONSOLIDATED STATEMENT OF CHANGES IS SHAREHOLDERS' EQUITY
COMMON STOCK
------------------ PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
--------- ------ ---------- ----------- -----------
BALANCE, JULY 21, 1999............. -- $ -- $ -- $ -- $ --
Issuance of stock July 22, 1999,
for:
Cash............................. 1,388,766 1,389 148,611 150,000
Services......................... 3,610,792 3,611 386,389 390,000
Acquisition of subsidiary........ 555,506 556 74,374 74,930
Net (loss) for the period.......... (419,028) (419,028)
--------- ------ ---------- ----------- -----------
BALANCE, DECEMBER 31, 1999
(RESTATED)....................... 5,555,064 5,555 609,375 (419,028) 195,902
Recapitalization, July 26, 2000.... 554,822 555 (188,329) (187,774)
Issuance of stock for:
Services at $.11 per share....... 480,000 480 52,320 52,800
Reduction in note payable at
$1.25 per share............... 120,000 120 149,880 150,000
Cash at $.78 per share........... 900,000 900 699,100 700,000
Dividends accrued on redeemable
preferred stock.................. (874) (874)
Net (loss) for the year............ (2,072,899) (2,072,899)
--------- ------ ---------- ----------- -----------
BALANCE, DECEMBER 31, 2000......... 7,609,886 $7,610 $1,321,472 $(2,491,927) $(1,162,845)
========= ====== ========== =========== ===========
See accompanying notes to financial statements
D-F-4
RAINWIRE PARTNERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDING DECEMBER 31, 2000 AND 1999
2000 1999
----------- ----------
(RESTATED)
CASH FLOWS FROM OPERATING ACTIVITIES
Continuing Operations..................................... $ $
Discontinued Operations
Adjustments to reconcile net loss to net cash flows used
by discontinued activities
Loss from operations of discontinued business.......... (1,494,708) (419,028)
Loss on disposal of the business....................... (578,191)
Stock issued for services.............................. 52,880 390,000
Depreciation and amortization.......................... 50,089 20,084
Goodwill impairment loss............................... 460,960
Loss on disposal of equipment.......................... 11,037
Changes in current assets and liabilities
Accounts receivable (net of i20 purchase for 1999)... 199,235 (175,480)
Other current assets................................. 20,000
Accounts payable and accrued expenses (net of i20
purchase for 1999).................................. 464,392 34,556
Provision for loss on disposal of the business......... 578,191
Net cash flows used by discontinued activities.... (236,115) (149,868)
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment..................................... (40,915) (6,358)
Payment for acquisition of subsidiary, net................ (221,480)
Cash received in recapitalization of the company.......... 15,464
Increase in other assets.................................. 1,315
----------- ---------
Net cash flows from (to) investing activities..... (24,136) (227,838)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable................... 60,000 250,000
Repayment of notes payable................................ (500,000)
Proceeds from issuance of common stock.................... 700,000 130,000
----------- ---------
Net cash flows from financing activities.......... 260,000 380,000
----------- ---------
NET CHANGE IN CASH FLOWS FOR THE YEAR....................... (251) 2,294
CASH, BEGINNING OF PERIOD................................... 2,294 --
----------- ---------
CASH, END OF PERIOD......................................... $ 2,043 $ 2,294
=========== =========
D-F-5
RAINWIRE PARTNERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
2000 1999
----------- ----------
(RESTATED)
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
Non-monetary net liabilities assumed in a recapitalization
of the Company on July 26, 2000
Fair value of equipment received....................... $ 19,486
Liabilities assumed.................................... (222,724)
-----------
Net non-monetary liabilities assumed................... (203,238)
Less cash received..................................... 15,464
-----------
Total non-monetary net liabilities assumed........ $ (187,774)
===========
Details of business acquisition
Fair value of assets acquired.......................... $ 636,428
Cash paid for the common stock......................... (265,000)
Issuance of common stock............................... (74,930)
Note payable........................................... (250,000)
---------
Liabilities assumed.................................... $ 46,498
=========
Due from stockholder for purchase of common stock........... $ 20,000
=========
Other
Accrued dividends on redeemable preferred stock........... $ 874
Common stock issued in settlement of note payable......... 150,000
===========
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
Interest paid during the year............................. $ 6,187 $ --
=========== =========
See accompanying notes to financial statements
D-F-6
RAINWIRE PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
NOTE 1 -- THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
Rainwire Partners, Inc., or RPID or the Company, (formerly Envirometrics,
Inc. or EVRM) was incorporated in Delaware in 1991. The Company acquired all of
the outstanding common stock of The Catapult Group, Inc., renamed Rainwire
Partners, Inc. (RPIG), a Georgia corporation, on July 26, 2000, in a qualifying
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986.
Prior to the stock exchange, the Company's operations had involved consulting
services in environmental and occupational health matters in addition to
providing the services of an American Industrial Hygiene Association and
National Voluntary Laboratory Accreditation Program, principally in the
Charleston, South Carolina area, with sales throughout the United States. RPIG
was formed in July 1999, to provide internet consulting, systems development and
integration as well as marketing and communications solutions to Global 2000 and
middle-market companies. Its operations were discontinued in April 2000.
On December 31, 2000, management adopted a plan to dispose of the entire
business of the Company. Because the Company sustained a loss on the
discontinuation of its business as of December 31, 2000 as well as a loss on the
disposal of the business at that date, the results of operations for the year
2000 have been presented to conform to those results. The financial statements
for the prior year have been restated to conform to the current year's
presentation. The fiscal year end of the Company is December 31.
PRINCIPLES OF CONSOLIDATION
The Company's consolidated financial statements as of December 31, 2000 and
1999 include the financial statements of the Company and subsidiaries for all
periods presented. All significant intercompany accounts and transactions have
been eliminated.
FINANCIAL STATEMENT PRESENTATION
The historical cost basis of all assets and liabilities of RPIG and its
former and present consolidated operating results have been presented from July
21, 1999 (date of inception) to December 31, 2000. For accounting purposes, the
acquisition has been treated as a recapitalization of RPIG. RPIG is considered
the accounting acquirer, because it became the owner of 90% of the total shares
outstanding of the common stock of RPID, on a fully diluted basis. The
consolidated statements of operations included herein are those of RPIG and its
subsidiary i20, Inc. The former operating results of EVRM have been eliminated.
The consolidated balance sheet presented herein includes all assets and
liabilities of EVRM as of the date of recapitalization at fair value, as well as
RPIG and its subsidiary, i20, Inc. at historical cost.
The accompanying financial statements have given effect to a reverse stock
split of 10 to 1 on July 26, 2000, and the recapitalization mentioned above, as
if they had occurred at the inception of RPIG.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America (GAAP) requires
management to make estimates and assumptions that affect the reported amounts
and the disclosure of contingent amounts in the Company's financial statements
and the accompanying notes. Actual results could differ from those estimates.
D-F-7
RAINWIRE PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CASH EQUIVALENTS
The Company considers all highly liquid investments with the original
maturities of three months or less to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, disclosures about fair
value of financial instruments, defines the fair value of a financial instrument
as the amount at which the instrument could be exchanged in a current
transaction between willing parties. The carrying value of the Company's
financial instruments, which include cash, shareholder advance and loans,
accounts payable and accruals, approximate fair values due to the short-term
maturities of such instruments.
GOODWILL
Goodwill was recorded in 1999 in connection with the acquisition of i20,
Inc. by RPIG. It was being amortized over a 10 year period. During late 2000
this asset became impaired and was written off as of December 31, 2000, due to
the discontinued operations of the business. Amortization expense of goodwill
for the years 2000 and 1999 was $25,143 and $16,762, respectively.
REVENUE RECOGNITION
Revenues were recorded as services were performed and costs were recorded
as incurred. The Company at each reporting date reviewed the status of major
contracts and immediately recorded losses in total, if any. Advance billings and
collections relating to future services, if any, were recorded as deferred
revenue and recognized when revenue was earned.
ADVERTISING EXPENSE
Advertising expense included the cost of sales brochures, print advertising
in trade publications, and trade shows. The cost of advertising was expensed as
incurred. Advertising expense for 2000 and 1999 was $93,268 and $8,602,
respectively.
INCOME TAXES
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes." A deferred tax asset or liability is recorded for all
temporary difference between financial and tax reporting of which depreciation
is the most significant. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to more likely than not realized in future tax returns. Tax law
and rate changes are reflected in income in the period such changes are enacted.
As of December 31, 1999, RPIG and its subsidiary had a deferred tax asset
of $168,000, principally due to the deferral of a deductible expense for common
stock issued for services. A valuation allowance equal to this amount was also
provided at that date, due to the uncertainty of its ultimate utilization, which
brought the resulting tax expense for 1999 to zero. As of December 31, 1999, the
Company had a net operating loss carry-forward of approximately $30,000, which
would expire, if unused in 2019. EVRM had a deferred tax asset as of the same
date of $1,785,860, however, a valuation allowance was recorded for an
equivalent amount resulting in no tax benefit recorded since its inception. The
net operating loss carry-forwards for the Company on a consolidated basis
approximate $6,500,000 as of December 31, 2000 and will expire at various dates
through year 2020, if unutilized. Due to a more than 50% change in ownership of
the Company's outstanding common stock for the latest testing period ended July
26, 2000, a
D-F-8
RAINWIRE PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Code Section 382 limitation on use of the loss carry-forwards became
substantially limited. In addition, it is not probable that any of the limited
losses can be utilized, since the Company contemplates that the proposed stock
exchange referred to in the subsequent events footnote will not only result in a
further limitation of the carry-forward losses, but will cause a loss of
continuity of business which is required under that Code Section of the Internal
Revenue Service in order to maintain loss carry-forwards of an acquired company.
For the year ended December 31, 2000, the increase in the deferred tax
asset due for the year 2000 was approximately $800,000. This amount was offset
completely by a valuation allowance of equal amount, since management cannot
determine, at the present time, that it is more likely than not that such
benefit will be utilized in future periods.
LOSS PER SHARE
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS No. 128) "Earnings Per Share." Basic loss per
share is computed by dividing net loss available to common stockholders by the
weighted average number of common shares outstanding during the period after
giving effect to the results of the reverse stock split referred to above.
GOING CONCERN
The Company's financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company's
ability to continue in existence is dependent upon its ability to develop
additional sources of capital, and/or achieve profitable operations. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Management's plan is to acquire a
potentially profitable company, such as contemplated by the proposed stock
exchange arrangement referred to in the subsequent events footnote, having the
ability to generate additional cash flows from either the sale of securities or
through operations to sustain the Company's future existence.
NOTE 2 -- REDEEMABLE PREFERRED STOCK
The Company had outstanding as of December 31, 1999, Series A, B and C
preferred stock with a $2 stated value. All shares issued may be "put" to the
Company for a cash price. All shares are convertible in common shares at the
rate of 3 for 1 for Series A, and the balance, 5 for 1. The Series A shares were
issued in 1997 for cash, the remaining shares were issued in 1998 to certain
officers and related parties in exchange for the conversion of outstanding debt
of the Company. In April 2000 all of the Series A and B preferred shares, and
2/3 of the Series C preferred shares were converted to common stock of the
Company, including accrued dividends. Total common shares issued to effect the
conversion was 167,605, valued at $670,420, or $4.00 per share. The conversion
resulted in a gain of $56,000, since the Series A shares were converted at a
value of $.80 less per share than the $2 value previously recorded for those
70,000 preferred shares. As of December 31, 2000, there were 24,959 Series C
preferred shares outstanding valued at $52,913 including accretion of $2,995.
NOTE 3 -- OPTIONS AND WARRANTS
In 1994, the Company adopted a stock option plan under which incentive and
non-qualifying options to purchase the Company's common stock could be granted
to employees. The Company applied Accounting Principles Board Opinion No. 25
whereby no compensation cost related to stock options is recognized as an
expense until the time the employee is subject to income taxation. Had
compensation cost been determined pursuant to SFAS No. 123 "Accounting for
Stock-Based Compensation" been recorded, the effect on net loss and loss per
share would not have been material.
D-F-9
RAINWIRE PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
As of December 31, 2000 the Company had outstanding from 1999, 81,000
options, including 30,000 options with an exercise price of $1.00 per share,
post split. The remaining options have exercise prices in excess of $23.80 per
share, post split. An additional number of options were granted during 2000 at
$1.00 per share, post-split, however, that information is not presently
available, but all options would expire within one-year from the date of
issuance, in the opinion of legal counsel. There were no warrants outstanding at
December 31, 2000.
NOTE 4 -- COMMITMENTS AND CONTINGENCIES
LEGAL ACTIONS
The Company is involved with several legal actions, principally as
defendant. These actions involve outstanding liabilities of the Company
including those of subsidiaries. All known outstanding liabilities, including
anticipated legal fees and costs have been recorded in the accompanying
financial statements. Following are two such actions.
Azimuth Laboratory, Inc., a subsidiary of EVRM generated hazardous waste
during the time of its operations which ceased in April 2000. According to a
former landlord, Azimuth was responsible for a hazardous waste cleanup on the
leased premises, and he is seeking recovery of approximately $130,000, including
the cleanup and remaining payments due under the terms of the lease agreement
which is to expire in December 2001. A motion for summary judgment is expected
to be heard by the end of 2001. Only the remaining lease obligation of $66,271
has been recorded as of December 31, 2000.
As of December 31, 2000 a judgment against the Company was obtained by the
holder of the remaining Series C redeemable preferred stock for $21,666 relating
to the failure by the Company to redeem 8,333 of those shares and to pay
dividends when due. Substantially all of that amount was recorded as of December
31, 2000.
DISPOSITION OF CORPORATE PROPERTY
Approximately 20 employees of the Company were still employed when the
decision was made to discontinue the operations of the Company on December 31,
2000. Substantially all employees either resigned or were terminated by August
31, 2001. No payroll tax reports have been filed with taxing authorities for any
wages paid in 2001, although related payroll taxes were paid. It is probable
that all compensation has not been reported for equipment, vehicles and other
corporate property obtained by employees when the Company ceased its operations
in 2001. Accordingly, the Company and/or its employees may have some liability
for payroll and/or sales taxes in connection with this matter.
SBA LOAN
Azimuth Laboratories, Inc. sold certain assets to a party in April 2000 who
assumed the remaining balance of an underlying loan from the Small Business
Administration. However, the Company's subsidiary was not relieved of liability
on the obligation, and remains contingently liable for its balance until
paid-off in approximately 3 years. The subsidiary was owed approximately $30,000
by the purchaser, however, that obligation has not been paid to the Company, and
some or all of that amount is being held in escrow pending either the payoff of
the SBA loan, or when the purchaser is successful in becoming the only principle
on the note. The outstanding balance of the SBA loan less the amount owed the
Company at December 31, 2000 approximates $50,000, which is included in accrued
liabilities as of December 31, 2000.
D-F-10
RAINWIRE PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 5 -- OPERATING LEASES
Included in the accrual for estimated loss on disposal of the business are
future rentals on lease obligations totaling approximately $300,000, of which
$228,734 relates to the balance owing on a 5 year lease expiring in 2005, which
had annual lease payments of approximately $50,000 per year. The Company is
seeking to mitigate the outstanding lease liability as the landlord had seized
and/or sold some of the equipment in partial satisfaction of the past due lease
rentals.
NOTE 6 -- CONSULTING AGREEMENTS
In July 2000 RPIG formalized with two individuals, consulting agreements
which provided for their continuing consulting services for a term of two years
from June 1999. They received a total of 650,000 shares of RPID common stock
valued at $.10 per share, which was exchanged in the aforementioned merger for
the Company's common stock. The agreements terminated in July 2001 without
further compensation.
In November 2000 the Company entered into an agreement with a shareholder
of the Company for consulting services to be provided for a period of one year
from November 10, 2000 for a total consideration of 480,000 shares of the
Company's common stock valued by the Board of Directors at $.11 per share. The
shares were issued in November 2000. The shareholder had an existing agreement
which was to expire in June 2001, however, expanded services were negotiated and
the current agreement was adopted to provide for those services and an extension
of time.
NOTE 7 -- EMPLOYMENT AGREEMENTS
The Company entered into two employment agreements covering the services of
its Chief Executive Officer and a Vice President for 3 years from July 26, 2000,
for total minimum annual compensation of $102,000 and $100,000, respectively, in
addition to certain other benefits. As a result of the discontinued operations,
these employees remaining as of December 31, 2000 resigned as of August 31,
2001. No accrual has been provided for any compensation after February 2001, as
current management believes none is owed.
NOTE 8 -- DISCONTINUED OPERATIONS
On December 31, 2000, management adopted a plan to discontinue the
operations of the Company and to liquidate its assets. Accordingly, the
accompanying financial statements for the year 2000 have given effect to this
date as the measurement date, since a loss was sustained for both discontinued
operations and disposal of the business. The disposal loss was provided for all
estimated costs and expenses to be incurred during the post phase-out period.
The financial statements for the prior year have been restated to conform with
the current year's presentation.
NOTE 9 -- SUBSEQUENT EVENTS
ISSUANCE OF COMMON STOCK
On August 29, 2001, the Company issued in exchange for the $60,000
shareholder loans outstanding as of December 31, 2000, 12,000,000 shares of the
Company's common stock, which is more than 50% of the total outstanding common
stock of the Company after issuance. In addition, it issued 100,000 shares of
common stock to an attorney in exchange for $2,500 of legal services he provided
for the Company.
D-F-11
RAINWIRE PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
PROPOSED EXCHANGE OF STOCK
On August 29, 2001, the Company entered into a Plan and Agreement to
exchange stock with Oasis Group, Inc. (Oasis), pursuant to Section 368(a)(1)(B)
of the Internal Revenue Code. Oasis is principally owned and controlled by a
shareholder of the Company who became the Company's President and Chief
Executive Officer on August 30, 2001. The exchange is to be transacted after
certain conditions precedent have been accomplished, at which time a formal
recapitalization of Oasis is contemplated. In 2001, Oasis loaned approximately
$43,000 to the Company. As of December 31, 2000, Oasis was advanced $12,700.
At the time the definitive closing is completed, all of the outstanding
common stock of Oasis will be acquired by the Company. Oasis will be considered
the accounting acquirer since it will own the majority of the outstanding shares
of the Company. For accounting purposes the historic transactions of Oasis will
replace those of the Company for presentation of results of operations and cash
flows, whereas Oasis will be consolidated with the Company for presentation of
its consolidated financial position. Prior to closing, the Company plans to
increase its authorized common stock and reverse split its present outstanding
shares.
OTHER
As of the date of this report, the Company's filings with the Securities
and Exchange Commission are not current which affected its ability to provide
quotations on the OTC Bulletin Board ("OTCBB").
D-F-12
ANNEX E
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
------------------------
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: SEPTEMBER 30, 2001
COMMISSION FILE NUMBER: 0-23892
RAINWIRE PARTNERS, INC.
(Exact Name of Registrant as specified in its charter)
DELAWARE 57-0941152
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
MONTEITH COMMONS, FIRST FLOOR
2931 PIEDMONT ROAD, N.E., ATLANTA, GEORGIA 30305
Address of Principal executive offices of Zip Code
Incorporation or organization
404-842-1510
Registrants telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the last 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as to the latest practical date.
NO. OF SHARES OUTSTANDING
CLASS ON SEPTEMBER 30, 2001
----- -------------------------
Common Stock Par Value $.001 Per share...................... 19,909,886
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
E-1
RAINWIRE PARTNERS, INC.
TABLE OF CONTENTS
PAGE
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
September 30, 2001 (unaudited) and December 31,
2000.................................................. E-
Unaudited Condensed Consolidated Statements of
Operations for the three and nine months ended
September 30, 2001 and 2000........................... E-
Unaudited Condensed Consolidated Statements of Cash
Flows for the nine months ended September 30, 2001 and
2000..................................................
Statement of Changes in Stockholders' equity for the
period December 31, 1999 to September 30, 2001
(unaudited)...........................................
Notes to Financial Statements (unaudited)..............
Item 2. Plan of operation................................
PART II OTHER INFORMATION
Item 1. Legal Proceedings................................
Item 2. Changes in Securities and Use of Proceeds........
Item 3. Defaults Upon Senior Securities..................
Item 4. Submission of Matters to a Vote of Security
Holders................................................
Item 5. Other Information................................
Item 6. Exhibits and Reports on Form 8-K.................
E-2
RAINWIRE PARTNERS, INC.
CONDENSED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2001 2000
------------- ------------
(UNAUDITED)
ASSETS OF DISCONTINUED BUSINESS
CURRENT ASSETS
Cash...................................................... $ 898 $ 2,043
Accounts receivable, net of allowance for doubtful
accounts............................................... 21,962
Related party advance, unsecured.......................... 898 12,700
----------- -----------
TOTAL CURRENT ASSETS.............................. 898 36,705
----------- -----------
OTHER ASSETS
Deposits.................................................. -- 6,257
----------- -----------
$ 898 $ 42,962
=========== ===========
LIABILITIES OF DISCONTINUED BUSINESS
CURRENT LIABILITIES
Shareholder loan.......................................... $ -- $ 60,000
Accounts payable.......................................... 475,105 469,517
Accrued business disposal costs and expenses.............. 509,612 513,016
Other accrued liabilities................................. 53,613 110,361
----------- -----------
TOTAL CURRENT LIABILITIES......................... 1,038,330 1,152,894
----------- -----------
REDEEMABLE PREFERRED STOCK
Par value $.01; authorized 2,500,00 shares issued
1999 -- 24,959 shares.................................. 52,913 52,913
----------- -----------
COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value; authorized, 20,000,000
shares outstanding, 19,909,886 and 7,609,886 shares....... 19,910 7,610
Paid-in capital............................................. 1,381,672 1,321,472
Deficit accumulated since inception......................... (2,491,927) (2,491,927)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT).............. (1,090,345) (1,162,845)
----------- -----------
$ 898 $ 42,962
=========== ===========
The accompanying notes are an integral part of these financial statements
E-3
RAINWIRE PARTNERS, INC.
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
2001 2000 2001 2000
----------- ---------- ----------- ----------
(UNAUDITED)
Revenues................................... $ -- $ -- $ -- $ --
Expenses...................................
----------- ---------- ----------- ----------
Income (loss) from continuing operations... -- --
Discontinued Operations:
Loss From Discontinued Operations........ (345,526) (551,350)
----------- ---------- ----------- ----------
Net Loss................................... $ -- $ (345,526) $ -- $ (551,350)
----------- ---------- ----------- ----------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING.............................. 13,709,886 6,226,181 10,049,886 5,823,511
=========== ========== =========== ==========
Basic and Diluted Loss Per Common Share....
Loss From Discontinued Operations.......... -- (0.06) -- (0.09)
----------- ---------- ----------- ----------
Basic and Diluted Loss Per Common Share.... $ -- $ (0.06) $ -- $ (0.09)
=========== ========== =========== ==========
The accompanying notes are an integral part of these financial statements
E-4
RAINWIRE PARTNERS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
2001 2000
-------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Continuing Operations..................................... $ -- $ --
Discontinued Operations...................................
Adjustments to reconcile net loss to net cash flows used
by discontinued activities.............................
Income (loss) from operations of discontinued
business.............................................. (551,350)
Depreciation and amortization........................ 43,999
Gain on sale of real property........................ (6,092)
Changes in current assets and liabilities:
Accounts receivable.................................. 34,662 74,421
Other currents assets................................ (9,586)
Deposits............................................. 6,257
Accounts payable and accrued liabilities............. (52,064) 116,891
-------- ---------
Net cash flows used by discontinued activities.............. (11,145) (331,717)
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Collections on notes receivable........................... 22,292
Net cash received in asset acquisition.................... 6,570
Decrease in other assets.................................. 2,527
Purchase of equipment..................................... -- (33,668)
-------- ---------
Net cash flows from (to) investing activities........ -- (2,279)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable................................ -- (352,292)
Proceeds from issuance of common stock.................... 10,000 700,000
-------- ---------
Net cash flows from financing activities............. 10,000 347,708
-------- ---------
NET CHANGE IN CASH FLOWS FOR THE PERIOD..................... (1,145) 13,712
-------- ---------
CASH, AT BEGINNING OF PERIOD................................ 2,043 2,294
-------- ---------
CASH, AT END OF PERIOD...................................... $ 898 $ 16,006
======== =========
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Shareholder loan paid by issuance of common stock........... $ 60,000
Legal services paid by issuance of common stock............. 2,500
--------
The accompanying notes are an integral part of these financial statements
E-5
RAINWIRE PARTNERS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
COMMON STOCK
-------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL (DEFICIT) TOTAL
---------- ------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1999....... 5,555,064 $ 5,555 $ 609,375 $ (419,028) $ 195,902
Recapitalization, July 26,
2000........................ 554,822 555 (188,329) (187,774)
Issuance of stock for:
Services at $.11 per
share....................... 480,000 480 52,320 52,800
Reduction in note payable at
$1.25 per share........... 120,000 120 149,880 150,000
Cash at $.78 per share...... 900,000 900 699,100 700,000
Dividends accrued on redeemable
preferred stock............. (874) (874)
Net (loss) for the year........ (2,072,899) (2,072,899)
---------- ------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 2000....... 7,609,886 7,610 1,321,472 (2,491,927) (1,162,845)
Issuance of stock for:
Reduction of shareholder
loan...................... 12,000,000 12,000 48,000 60,000
Legal fees.................. 100,000 100 2,400 2,500
Cash........................ 200,000 200 9,800 10,000
Net income (loss) for the
nine months ended
September 30, 2001........ -- --
---------- ------- ---------- ----------- -----------
BALANCE, SEPTEMBER 30, 2001...... 19,909,886 $19,910 $1,381,672 $(2,491,927) $(1,090,345)
========== ======= ========== =========== ===========
The accompanying notes are an integral part of these financial statements
E-6
RAINWIRE PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited condensed
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of the Company's financial position as of September 30, 2001 and
the results of its operations and cash flows for the three and nine months ended
September 30, 2001 and 2000 have been made. Operating results for the nine
months ended September 30, 2001 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2001.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Form 10-KSB
for the year ended December 31, 2000
ITEM 2. PLAN OF OPERATION
For the near term, the Company continues to work towards finalizing its
stock exchange agreement with Oasis Group, Inc. It is financially dependent on
its shareholders, who have financed its existence since closing down its
operations in February 2001. Management of the Company believes that its
shareholders will continue to provide the finances the Company requires.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved with several legal actions, principally as
defendant. These actions involve outstanding liabilities of the Company
including those of subsidiaries. Following are four such actions:
Azimuth Laboratory, Inc., a subsidiary of EVRM, generated hazardous waste
during the time of its operations which ceased in April, 2000. According to a
former landlord, Azimuth was responsible for a hazardous waste cleanup on the
leased premises, and he is seeking recovery of approximately $130,000, including
the cleanup and remaining payments due under the terms of the lease agreement
which is to expire in December, 2001. A motion for summary judgment is expected
to be heard by the end of 2001. Only the remaining lease obligation of $66,271
has been recorded as of December 31, 2000.
As of December 31, 2000, a judgment against the Company was obtained by the
holder of the remaining Series C redeemable preferred stock for $21,666 relating
to the failure by the Company to redeem 8,333 of those shares and to pay
dividends when due. Substantially all of that amount was recorded as of December
31, 2000.
IOS Capital, Inc. has made a demand to Rainwire for sums defaulted upon as
a result of an equipment lease signed by Rainwire in February, 1997. IOS Capital
indicated that they would compromise the amounts owed for the sum of $15,479.20
in full satisfaction of the claim; however, Rainwire failed to make the payment
by the required date.
An action has been filed and reduced to a judgment against Rainwire
Partners, Inc. by H.E. Igoe in the amount of $21,665.96 filed on June 25, 2001.
This matter involved a share purchase agreement between Rainwire and Igoe.
E-7
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In August, 2001, the Registrant issued 12,000,000 shares of its common
stock in settlement of loans in the principal amount of $60,000. These shares
were sold pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In August, 2001, the Registrant issued 100,000 shares of its common stock
to an individual for services provided and to be provided to the Registrant. The
services were valued at $2,500 or $0.025 per share. These shares were sold
pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
In September, 2001, the Registrant issued 200,000 shares of its common
stock to an individual in exchange for $10,000 or at a price of $0.05 per share.
The individual was an accredited investor, and these shares were sold pursuant
to Section 4(2) of the Securities Act and have been marked "restricted."
In October, 2001, the Registrant issued 500,000 shares of its Series D
Convertible Preferred Stock to Osprey Investments, LLC in exchange for
10,000,000 shares of the Registrant's common stock. These shares were sold
pursuant to Section 4(2) of the Securities Act and have been marked
"restricted."
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
As of December 31, 2000, a judgment against the Company was obtained by the
holder of the remaining Series C redeemable preferred stock for $21,666 relating
to the failure by the Company to redeem 8,333 of those shares and to pay
dividends when due.
As of September 30, 2001, 24,959 shares of Series C Preferred Stock remain
outstanding. Dividends on these shares total $2,621 and are still unpaid.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
In February, 2001, Rainwire Partners, Inc. ("Rainwire" or the "Company")
and Oasis Group, Inc., a Georgia corporation ("Oasis"), began discussions
concerning the use of Rainwire as a reverse merger vehicle to position Oasis in
the public market. These initial discussions did not result in any agreements.
After exploring similar agreements with other parties, the Company re-entered
discussions with Oasis in July, 2001.
On August 29, 2001, Rainwire and Oasis completed negotiations and the Oasis
Share Exchange Agreement was signed. It is a non-binding agreement subject to
the completion of due diligence and exchange of Schedules outlined in the Oasis
Share Exchange Agreement. Prior to the Closing, Rainwire plans to increase its
authorized common stock and reverse split its present outstanding shares.
The Company is seeking shareholder approval of the Oasis Share Exchange
Agreement and the transactions contemplated by it. The consent of persons
holding a simple majority (over 50%) of the outstanding Company common stock is
needed to approve the closing of the transaction and authorization of the other
transactions identified. Because current management owns greater than 50% of the
outstanding Company common stock, the Company expects to receive the necessary
shareholder approval and intends to prepare an Information Statement on Form 14C
to inform the remaining shareholders of the majority's decision. The Company
expects to mail the Information Statement to its shareholders on or about
November 25, 2001, and believes that the transaction will close on or about
December 15, 2001.
Upon execution of the Oasis Share Exchange Agreement, Walter H. Elliott,
the President and a director of the Company resigned, and Ronald A. Potts was
elected to the Board of Directors of the Company and was appointed President and
Chief Executive Officer of the Company. Additionally, Mike
E-8
McLaughlin and John Hill were elected to the Board of Directors and Peggy Evans
was appointed Chief Financial Officer.
Furthermore, upon execution of the Share Exchange Agreement, the Company
issued 12,000,000 shares of its common stock to Osprey Investments, LLC (of
which Lyne Marchessault is the sole member) in satisfaction of loans in the
principal amount of $60,000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
A. Exhibits
3.4 Certificate of Designation of Series D Convertible Preferred
Stock*
10.1 Plan and Agreement to Exchange Stock by and among Rainwire
Partners, Inc., Oasis Group, Inc. and the shareholders of
Oasis Group, Inc.*
---------------
* Incorporated by reference, filed as an Exhibit to report on form 10-KSB for
2000, filed on October 30, 2001 (SEC File No. 000-23892)
B. Reports on Form 8-K
During the third quarter of 2001, the Registrant filed no reports on
Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
RAINWIRE PARTNERS, INC.
November 1, 2001 /s/ RONALD A. POTTS
----------------------------------------------
President and Chief Executive Officer
E-9
ANNEX F
THE OASIS GROUP, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2000
F-1
TABLE OF CONTENTS
PAGE
----
INDEPENDENT AUDITOR'S REPORT................................ F-
BALANCE SHEET............................................... F-
STATEMENTS OF OPERATIONS.................................... F-
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY................ F-
STATEMENTS OF CASH FLOWS.................................... F-
NOTES TO FINANCIAL STATEMENTS............................... F-
F-2
INDEPENDENT AUDITOR'S REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
THE OASIS GROUP, INC.
ATLANTA, GEORGIA
We have audited the accompanying balance sheet of The Oasis Group, Inc. (a
Georgia corporation in the development stage) as of December 31, 2000, and the
related statements of operations and comprehensive loss, changes in
stockholders' equity and cash flows for the year then ended, and for the period
from November 16, 1999 (inception), to December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Oasis Group, Inc. as of
December 31, 2000, and the results of its operations and its cash flows for the
year then ended, and for the period from November 16, 1999 (inception) to
December 31,2000, in conformity with accounting principles generally accepted in
the United States of America.
Powell & Booth, P.C
Atlanta, Georgia
July 24, 2001, except as to Note 2
as to which the date is December 14, 2001
F-3
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 2000
ASSETS
Current Assets
Cash...................................................... $ 192
Available-for-sale securities............................. 250,000
---------
TOTAL CURRENT ASSETS.............................. 250,192
---------
Other Assets
Deposits/Advances......................................... 91,000
Note receivable........................................... 42,573
---------
133,573
---------
$ 383,765
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
TOTAL CURRENT LIABILITIES -- unsecured, related
party loan........................................ $ 15,000
---------
Commitments and Contingencies
Stockholders' Equity
Common stock, no par value; 50,000,000 shares authorized;
3,226,000 shares outstanding........................... 822,169
Contributed capital....................................... 166,000
Accumulated other comprehensive (loss).................... (117,000)
(Deficit) accumulated during the development stage........ (502,404)
---------
TOTAL STOCKHOLDERS' EQUITY........................ 368,765
---------
$ 383,765
=========
The accompanying notes are an integral part of these financial statements
F-4
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
NOVEMBER 16,
1999
YEAR ENDED (INCEPTION) TO
DECEMBER 31, DECEMBER 31,
2000 2000
------------ ---------------
Revenues.................................................... $ -- $ --
General and administrative expenses......................... 502,404 502,404
--------- ---------
NET (LOSS).................................................. $(502,404) $(502,404)
--------- ---------
OTHER COMPREHENSIVE (LOSS)
Unrealized holding loss on available-for-sale securities.... (117,000) (117,000)
--------- ---------
COMPREHENSIVE (LOSS)........................................ $(619,404) $(619,404)
========= =========
The accompanying notes are an integral part of these financial statements
F-5
THE OASIS GROUP, INC.
STATEMENT OF CHANGES IS SHAREHOLDERS' EQUITY
(DEFICIT)
ACCUMULATED ACCUMULATED
COMMON STOCK OTHER DURING THE
-------------------- CONTRIBUTED COMPREHENSIVE DEVELOPMENT
SHARES AMOUNT CAPITAL (LOSS) STAGE TOTAL
--------- -------- ----------- ------------- ----------- ---------
BALANCE, December 31, 1999........ -- $ -- $ -- $ -- $ -- $ --
Issuance of stock July 15, 2000,
for:
Cash............................ 2,250,000 $309,169 309,169
Acquisition of securities....... 800,000 367,000 367,000
Services........................ 26,000 26,000 26,000
Proceeds from sale of common
stock, September 30, 2000....... 150,000 120,000 120,000
Contributed services.............. 166,000 166,000
Net (loss) for the year........... (117,000) (502,404) (619,404)
--------- -------- -------- --------- --------- ---------
BALANCE, December 31, 2000........ 3,226,600 $822,169 $166,000 $(117,000) $(502,404) $ 368,765
========= ======== ======== ========= ========= =========
The accompanying notes are an integral part of these financial statements
F-6
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
NOVEMBER 16,
1999 TO
YEAR ENDED (INCEPTION) TO
DECEMBER 31, DECEMBER 31,
2000 2000
------------ --------------
OPERATING ACTIVITIES
Net (loss) from operations................................ $(502,404) $(502,404)
Adjustments to reconcile net (loss) to net cash used by
operating activities
Issuance of stock for services......................... 26,000 26,000
Contributed Capital.................................... 166,000 166,000
--------- ---------
Net Cash Flows (To) Operating Activities............. (310,404) (310,404)
--------- ---------
INVESTING ACTIVITIES
Note receivable........................................... (42,573) (42,573)
Deposits/Advances......................................... (91,000) (91,000)
--------- ---------
Net Cash Flows (To) Investing Activities............. (133,573) (133,573)
--------- ---------
FINANCING ACTIVITIES
Proceeds from sale of common stock........................ 429,169 429,169
Increase in note payable.................................. 15,000 15,000
--------- ---------
Net Cash Flows From Financing Activities............. 444,169 444,169
--------- ---------
NET INCREASE IN CASH................................. 192 192
CASH, BEGINNING OF PERIOD............................ -- --
--------- ---------
CASH, END OF PERIOD.................................. $ 192 $ 192
========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
Acquisition of available-for-sale securities for common
stock.................................................. $ 367,000 $ 367,000
========= =========
The accompanying notes are an integral part of these financial statements
F-7
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPANY BACKGROUND
Oasis Group, Inc. (the Company or Oasis), formerly Oasis Communities, Inc.
is a Georgia corporation formed November 16, 1999, to develop residential and
commercial real estate projects. It has a fiscal year-end of December 31 and is
a development stage company, as defined in SFAS No. 7, since its operations have
not commenced and it has not earned any significant revenues. There were no
transactions during 1999.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent amounts in the Company's financial
statements and the accompanying notes. Actual results could differ from those
estimates.
CASH EQUIVALENTS
The Company considers all highly liquid investments with the original
maturities of three months or less to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, Disclosures about fair
value of financial instruments, defines the fair value of a financial instrument
as the amount at which the instrument could be exchanged in a current
transaction between willing parties. The carrying values of the Company's
financial instruments, which include cash, note receivable and an unsecured
related party loan, approximate fair values due to the short maturities of such
instruments.
INCOME TAXES
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". A deferred tax asset or liability is recorded for all
temporary difference between financial and tax reporting of which depreciation
is the most significant. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to more likely than not be realized in future tax returns. Tax
law and rate changes are reflected in income in the period such changes are
enacted.
For financial reporting purposes, the Company has sustained a loss for 2000
of approximately $502,000. For income tax purposes approximately $312,000 is
considered start-up costs, and the balance, comprised of $166,000 of contributed
capital and meals and entertainment of $24,000, constitutes a non-deductible
permanent difference. Start-up costs are not deductible until the Company
commences operations, at which time they are amortized over a 60-month period,
or permanently capitalized if no election is timely made to amortize them.
The Company's future utilization of the deferred tax benefit arising from
the deferral of start-up costs of approximately $110,000 cannot be currently
ascertained. Accordingly, a valuation allowance of approximately $110,000 has
been provided resulting in no recorded tax benefit as of December 31, 2000.
F-8
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
BASIS OF PRESENTATION AND MANAGEMENT'S ACTIONS TO OVERCOME OPERATING AND
LIQUIDITY PROBLEMS
The Company's financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company's
ability to continue in existence is dependent on its ability to develop
additional sources of capital, and/or achieve profitable operations. The
accompanying financial statements do not include any adjustments that might
result from the outcome of these uncertainties. Management's plan is to raise
additional debt or equity financing and to begin operations in the near term,
which are anticipated to be sufficient to provide the necessary cash flow
requirements for the Company.
NOTE 2 -- RELATED PARTY TRANSACTIONS AND OBLIGATIONS
On July 15, 2000, the president/chief executive officer/chairman of the
board/director exchanged 500,000 shares of free trading stock in a OTC Bulletin
Board listed company he owned, Lahaina Acquisitions, Inc., for 800,000 shares of
restricted common stock of the Company. Although the value of the acquired
shares was $734,000 on the date of the exchange, the value assigned by the
Company to those securities was $367,000, due to the current restriction on
tradability of the securities.
A shareholder of the company advanced $15,000 on an unsecured basis, which
was repaid in 2001 without interest.
NOTE 3 -- DEPOSITS/ADVANCES
REAL ESTATE VIDEO PORTAL
An advance payment of $25,000 was made by the Company for the exclusive
development of a web-based "real estate video portal" on a cost-plus 15 percent
fixed-fee basis. An additional mobilization fee of $25,000 is required upon the
execution of a formal agreement with the software developer. All funds advanced
will be credited against the cost of the project and are non-refundable.
STOCK EXCHANGE TRANSACTIONS
The Company agreed to acquire all of the outstanding stock of Landmark
Mortgage Corporation, a Louisiana corporation (Landmark) and Statewide Mortgage
and Investment Corp., a Florida corporation (Statewide) for 1,370,000 shares of
Oasis common stock and the sum of $50,000, which will be applied towards certain
expenses pursuant to a non-binding letter of intent dated October, 2000. Oasis
agreed to make $50,000 available for the financing of additional property that
Landmark anticipates acquiring at a purchase price of approximately $220,000.
Oasis advanced $66,000 in connection with this stock exchange transaction as of
December 31, 2000. The closing of this acquisition is expected to occur on or
before January 31, 2002, pursuant to a binding amendment entered into on
December 14, 2001.
NOTE 4 -- AVAILABLE-FOR-SALE SECURITIES
Available-for-sale securities are recorded at fair value in investments on
the balance sheet, with the change in fair value during the period excluded from
results of operations, and recorded net of tax as a separate component of equity
(accumulated other comprehensive income). The following summarizes the
information relating to available-for-sale securities as of December 31, 2000:
Market value at December 31, 2000........................... $ 250,000
Assigned value at date of acquisition....................... 367,000
---------
Unrealized holding loss..................................... $(117,000)
=========
F-9
THE OASIS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company utilizes the specific identification method of computing
realized gains and losses from the sales of its available-for-sale securities.
Realized losses from the sale of securities are shown in the other income
section of the income statement, and proceeds from the sale of securities are
shown in the statement of cash flows.
NOTE 5 -- ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following is a summary of the activity from inception in accumulated
other comprehensive income (loss):
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, at inception..................................... $ 0
OTHER COMPREHENSIVE (LOSS), unrealized holding loss on
available-for-sale securities............................. (117,000)
---------
ACCUMULATED OTHER COMPREHENSIVE (LOSS)
Ending balance, December 31, 2000......................... $(117,000)
=========
NOTE 6 -- CONTRIBUTED CAPITAL
Management of the Company has contributed its services to the Company
during the year with an assigned value of $158,500. It also contributed the
value of rent, utilities and related overhead during the year amounting to
$7,500.
NOTE 7 -- SUBSEQUENT EVENTS
PURCHASE OF REAL ESTATE
In February, 2001 Oasis agreed to purchase from an unrelated party,
undeveloped land located in California and Arizona for $4,000,000, including a
promissory note for $3,000,000 for a 6 year term, with 6 percent interest for
the first 12 months and at the prime rate thereafter not to exceed 8% or be
less than 6%. If the property appraises for more than $12,000,000 within 60
days of closing, Oasis will issue an additional promissory note for the fair
market value of the property exceeding $12,000,000 multiplied by a factor of
0.35. The additional note shall be for a term of six years, with interest at 4
percent per annum for the first 2 years and 6 percent per annum, thereafter.
Brokerage commissions are payable in addition to the above purchase price.
F-10
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
2.1 Amended and Restated Plan and Agreement to Exchange
Stock by and between Rainwire Partners, Inc. and
Oasis Group, Inc., dated as of December 19, 2001
(included as Annex A to the Information
Statement/Proxy Statement/Prospectus)
5.1 Opinion of Kutak Rock LLP with respect to the
validity of the shares being offered
9.1 Form of Proxy (included as Annex C to the Information
Statement/Proxy Statement/Prospectus)
10.1 Real Estate Sale and Purchase Agreement by and
between Oasis Group, Inc. and Mrs. Libuse Hornak
10.2 Restated First Amendment to Real Estate Sale and
Purchase Agreement by and between Oasis Group, Inc.
and Mrs. Libuse Hornak
23.1 Consent of Kutak Rock LLP (set forth in Exhibit 5.1)
23.2 Consent of Braverman & Company, P.C.
23.3 Consent of Powell & Booth, PC
23.4 Consent of Tauber & Balser, P.C.
ITEM 27. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in the registration
statement; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement or
any material change to such information in the
registration statement.
2. That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
4. That prior to any public reoffering of the
securities registered hereunder through use of a prospectus
which is a part of this registration statement, by any person
or party who is deemed to be an underwriter within the meaning
of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the
applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable
form.
5. That every prospectus (i) that is filed pursuant
to paragraph (4) immediately preceding, or (ii) that purports
to meet the requirements of Section 10(a)(3) of the Act and is
used in connection with an offering of securities subject to
Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such
amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
6. To respond to requests for information that is
incorporated by reference into the prospectus pursuant to
[Items 4, 10(b), 11, or 13] of this Form, within one business
day of receipt of any such request, and to send the
incorporated documents by first class mail or other equally
prompt means, including information contained in documents
filed after the effective date of this registration statement
through the date of responding to such request.
7. To supply by means of a post-effective amendment
all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of
and included in this registration statement when it became
effective.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers, or controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
2
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
3
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-4 and authorized this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia, on January 10, 2002.
RAINWIRE PARTNERS, INC.
(Registrant)
By /s/ Lyne Marchessault
-----------------------------------
Lyne Marchessault
President
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
Date: January 10 , 2002
/s/ Lyne Marchessault
----------------------------------------------
Lyne Marchessault
President, Secretary and Director
/s/ Michael McLaughlin
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Michael McLaughlin
Director
/s/ John Hill
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John Hill
Director
/s/ Peggy Evans
----------------------------------------------
Peggy Evans
Chief Financial Officer