EXHIBIT 2.1
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
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This Amended and Restated Agreement and Plan of Merger (this
"AGREEMENT") is made, executed and entered into as of June 12, 2002, by and
among FoneFriend, Inc., a Nevada corporation (the "BUYER"), Universal Broadband
Networks, Inc., a Delaware corporation and its wholly-owned subsidiaries
("DEBTOR" OR "SELLER", including the Related Debtors (as hereinafter defined));
Buyer and Debtor, including the Related Debtors, hereinafter may individually be
referred to as a "PARTY", and collectively referred to as the "PARTIES"; Debtor
is currently a debtor-in-possession in the Chapter 11 bankruptcy case (the
"BANKRUPTCY CASE") entitled IN RE UNIVERSAL BROADBAND NETWORKS, INC., filed on
October 31, 2000, in the United States Bankruptcy Court for the Central District
of California, Santa Xxx Division (the "BANKRUPTCY COURT"), as Case No. SA
00-18281 JB; and the Parties desire to enter into a binding agreement with
regard to the following facts and circumstances and on the following terms and
conditions (collectively, the "RECITALS"):
R E C I T A L S:
A. Prior to the filing of the Bankruptcy Case, Debtor was an emerging
facilities-based integrated communications carrier using digital subscribed line
(DSL) technology to offer broadband data and voice telecommunication services to
businesses and residences. However, Debtor is no longer engaged in the conduct
of business to any significant extent, and currently operates for the sole
purpose of either reorganizing or liquidating its assets.
B. Debtor is a public corporation and is in compliance with its state and
federal filing requirements. Debtor became public pursuant to a reverse merger
into a public shell on the OTC Bulletin Board in 1997. Debtor's shares were
ultimately registered on the NASDAQ National Market System and traded under the
symbol UBNT, but trading on NASDAQ was suspended prior to the filing of the
Bankruptcy Case. It is the intention of the Buyer to seek re-listing subsequent
to the Closing and all parties signatory hereto agree to use their best efforts
to accomplish such re-listing. The shares are currently being traded during the
pendency of the Bankruptcy Case on the "Pink Sheets" under the symbol UBNTQ.
C. The following subsidiary corporations (the "RELATED DEBTORS") also filed a
petition under Chapter 11 of the United States Bankruptcy Code on October 31,
2000:
IJNT, Inc., a Nevada corporation ("IJNT"), as Case No. SA 00-18282 JB;
UBEE Networks Enterprises, Inc., a Nevada corporation ("UBEE"), as Case
No. SA 00-18283 JB;
UrJet Backbone Network, a Nevada corporation ("URJET BACKBONE"), as
Case No. SA 00-18284 JB; and
Man, Rabbit, House Multimedia, a California corporation ("MAN RABBIT
HOUSE"), as Case No. SA 00-18286 JB.
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D. IJNT, Man Rabbit House and UBEE are wholly-owned subsidiaries of Debtor.
UrJet Backbone is a wholly-owned subsidiary of UBEE.
E. Buyer is in the process of becoming a premier provider of Internet-based
telecommunication services in the United States and worldwide by capitalizing on
the current and future opportunities in Voice Over Internet Protocol telephony
technology and voice data integrated communication services in the e-commerce
marketplace. Buyer's technology enables subscribers through its services to make
and receive unlimited long distance telephone calls routed over the Internet by
using their standard residential telephone set without the need of a personal
computer.
F. The Parties desire that Buyer be merged with and into Debtor by way of a
statutory merger or an asset purchase. Universal Broadband Networks, Inc., a
Delaware corporation, will be the surviving corporation (the "SURVIVING
CORPORATION") following the merger between the Parties hereto (the "MERGER").
Other than as specifically set forth herein and in an applicable order of the
U.S Bankruptcy Court, Seller and Debtors represent that Buyer will not assume
any liabilities or obligations of the Debtor.
G. In order to consummate the Merger, the Parties must first obtain from the
Bankruptcy Court the entry of an order (the "APPROVAL ORDER") in the Bankruptcy
Case approving a plan of reorganization (the "PLAN") that incorporates the terms
of the Merger.
H. Buyer desires to conduct various inquiries, investigations, research and
analyses in connection with the contemplated Merger before proceeding with the
Merger. Buyer will incur significant costs in performing such inquiries,
investigations, research and analyses, and in seeking the issuance of the
Approval Order, which Buyer would be unwilling to incur absent a commitment by
Debtor to seek the issuance of the Approval Order and consummate the Merger if
the Bankruptcy Court issues the Approval Order.
I. Debtor will incur significant out-of-pocket costs and lost opportunity costs
in preparing the Plan and the disclosure statement (the "DISCLOSURE STATEMENT")
for the Plan, seeking the Approval Order and preparing for the Merger, which
Debtor would be unwilling to incur absent the payment of certain nonrefundable
consideration by Buyer.
J. The Parties entered into that certain Agreement and Plan of Merger, dated as
of March 29, 2002 (the "ORIGINAL AGREEMENT").
K. The Parties desire to terminate the Original Agreement and to accept the
terms of this Agreement in lieu of the terms set forth in the Original
Agreement.
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THEREFORE, PURSUANT TO THE RECITALS, and for good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Parties to the Original Agreement hereby agree that the Original Agreement shall
be superseded and replaced in its entirety by this Agreement, and the parties
hereto further covenant, agree, warrant, represent and declare as follows:
ARTICLE 1.
DEFINED TERMS
1.1. USE OF DEFINED TERMS. Capitalized words and phrases will have the meaning
assigned to them in this Agreement when used in this Agreement or any document
delivered pursuant to this Agreement, unless the context in which such
capitalized word or phrase is used reasonably prohibits the application of such
meaning.
1.2. LOCATION OF DEFINED TERMS. The following capitalized words and phrases are
defined in this Section 1.2 or in the following identified sections of this
Agreement:
(a) "AGREEMENT" is defined in the introductory Paragraph.
(b) "EFFECTIVE DATE" is defined as the execution date above first
written.
(c) "APPEAL" is defined in Section 2.2 hereof.
(d) "APPROVAL ORDER" is defined in Recital "G"
(e) "BANKRUPTCY CASE" is defined in the Introductory Paragraph.
(f) "BANKRUPTCY COURT" is defined in the Introductory Paragraph.
(g) "BUSINESS DAY" is defined in Section 6.11 hereof.
(h) "BUYER" is defined in the Introductory Paragraph.
(i) "CASH CONSIDERATION" is defined in Section 3.2 hereof.
(j) "CLOSING" is defined in Section 2.4 hereof.
(k) "CREDITORS" is defined in Section 3.5(a) hereof.
(l) "DEBTOR" is defined in the Introductory Paragraph.
(m) "DEBTOR PERSONS" is defined in Section 5.5 hereof.
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(n) "DEFAULT" is defined in Section 6.15 hereof.
(o) "DISCLOSURE STATEMENT" is defined in Recital "I".
(p) "DUE DILIGENCE" is defined in Section 4.1 hereof.
(q) "IJNT" is defined in Recital "C".
(r) "MAN RABBIT HOUSE" is defined in Recital "C".
(s) "MERGER" is defined in Recital "F".
(t) "NOTICE" is defined in Section 6.23 hereof.
(u) "OFFICIAL COMMITTEE OF CREDITORS" means the members of the
committee appointed on November 21, 2000 by the Office of the
United States Trustee.
(v) "ORIGINAL AGREEMENT" is defined in Recital "J".
(w) "OVER-BID" is defined in Section 2.3 hereof.
(x) "PARTY" and "PARTIES" are defined in the introductory
Paragraph.
(y) "PARTY'S AGENTS" is defined in Section 4.1 hereof.
(z) "PERSON" is defined in Section 6.10 hereof.
(aa) "PLAN" is defined in Recital "G".
(bb) "RECITALS" is defined in the Introductory Paragraph.
(cc) "REDEMPTION COMMENCEMENT DATE" is defined in Section 3.14(a)
hereof.
(dd) "REDEMPTION PRICE" is defined in Section 3.14(b) hereof.
(ee) "REDEMPTION NOTICE" is defined in Section 3.14(b) hereof.
(ff) "RELATED DEBTORS" is defined in Recital "C".
(gg) "SEC" is defined in Section 3.2 hereof.
(hh) "STAY" is defined in Section 2.2 hereof.
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(ii) "SURVIVING CORPORATION" is defined in Recital "F".
(jj) "TRUST" is defined in Section 3.5 hereof.
(kk) "TRUSTEE" is defined in Section 3.14 hereof.
(ll) "UBEE" is defined in Recital "C".
(mm) "URJET BACKBONE" is defined in Recital "C".
ARTICLE 2.
REQUIREMENT FOR BANKRUPTCY COURT APPROVAL OF MERGER
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2.1. APPROVAL ORDER. The Merger is expressly conditioned upon the entry by the
Bankruptcy Court of the Approval Order. Subject to the obligation of Debtor to
seek and consider Over-Bids as discussed in Section 2.3 hereof, each Party will
in good faith exercise all efforts reasonably required of such Party to obtain
the entry of the Approval Order. If, despite the good faith efforts of the
Parties the Approval Order is not entered within one hundred eighty (180) days
following the execution of this Agreement, then either Party may terminate the
Merger.
2.2. APPEAL OF APPROVAL ORDER. If the Approval Order is timely entered as set
forth in Section 2.1 hereof but an appeal (the "APPEAL") of the Approval Order
is filed and a stay (the "STAY") of the execution of the Approval Order is
issued pending the resolution of the Appeal, then either Party may terminate the
Merger. If an Appeal is filed but no Stay is issued and if the Approval Order
includes a finding of good faith, then the Parties will proceed with the Merger.
If an Appeal is filed but no Stay is issued and if the Approval Order does not
include a finding of good faith, then either Party may terminate the Merger.
Nothing contained herein shall prevent Debtor from consummating a plan of
reorganization if the Merger with the Buyer is not consummated. If the Merger is
terminated by either Party pursuant to this Section 2.2, Debtor shall forfeit
the right to any portion of the Cash Consideration remaining unpaid by Buyer. In
no event shall Buyer be entitled to the return of any Cash Consideration unless
the Debtor defaults or is unable to perform this Merger and Debtor shall have no
liabilities to Buyer hereunder other than as is set forth herein.
2.3. FIDUCIARY DUTIES AND POSSIBILITY OF OVER-BIDS. The Parties acknowledge that
Debtor, as the debtor-in-possession in the Bankruptcy Cases, owes a fiduciary
duty to the estates in the Bankruptcy Cases, which includes the obligation to
seek and consider more favorable offers (the "OVER-BIDS") from other prospective
purchasers and merger candidates, which Debtor may submit to the Bankruptcy
Court for consideration and approval. Debtor will not be deemed to have breached
this Agreement or to have acted in bad faith by reason of pursuing, considering
or accepting any such Over-Bids.
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2.4. NO INCONSISTENT ACTIONS. No Party will take any action inconsistent with
this Agreement pending either the consummation (the "CLOSING") of the Merger or
the termination of the Merger.
ARTICLE 3.
MERGER
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3.1. DESCRIPTION OF MERGER. Upon consummation of the Merger, Buyer will be
merged with and into Debtor or its assets acquired by Debtor with Debtor being
the Surviving Corporation. Upon consummation of the Merger, all of the shares of
Buyer will be converted into the right to receive ninety-five percent (95%) of
the shares of outstanding securities of the Surviving Corporation. Each of the
shares of Debtor issued and outstanding immediately before the Merger will be
cancelled and extinguished. Any conveyance, transfer or re-sale of the shares
issued pursuant to the Merger will be subject to all applicable securities laws.
3.2. CASH CONSIDERATION. As consideration to Debtor for entering into this
Agreement, preparing the Plan and the Disclosure Statement, pursuing the
issuance of the Approval Order and agreeing to the Merger, Buyer will deposit
with and pay Debtor, as cash consideration (the "CASH CONSIDERATION"), the sum
of One Hundred Fifteen Thousand and 00/100 Dollars ($115,000.00), plus the
reasonable costs associated with an audit of the Buyer and Seller, if required
as a condition of the Merger or to maintain compliance with the rules,
regulations and standards of the Securities and Exchange Commission (the "SEC")
during the term of this Agreement, and any fee payable to Debtor's prior
auditors which may be necessary for certification of an audit of Debtor, as set
forth below. The Cash Consideration shall be payable as follows:
(a) INITIAL DEPOSIT. Buyer has paid Debtor, as an initial
deposit toward the Cash Consideration, the sum of Fifty Thousand Dollars
pursuant to the terms of that certain Agreement and Plan of Merger dated as of
March 29, 2002 and has incurred costs and expenses in fulfilling its obligations
hereunder, including without limitation the audit costs of Buyer and Seller.
Debtor acknowledges receipt of this initial deposit.
(b) AUDIT EXPENSES. The reasonable costs associated with an
audit of the Buyer and Seller, if required as a condition of the Merger or to
maintain compliance with the rules, regulations and standards of the SEC from
the date of this Agreement until the Closing, up to a maximum of Fifteen
Thousand Dollars ($15,000), and any fee payable to Debtor's prior auditors which
may be necessary for certification of an audit of Debtor, up to a maximum of Ten
Thousand Dollars ($10,000), shall be paid as such fees and costs become due and
payable, and all such amounts shall be paid in any event no later than ten (10)
Business Days prior to the Closing.
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(c) FINAL DEPOSIT. Upon issuance of the Approval Order, Buyer
will pay Debtor the entire remainder of the Cash Consideration, including any
unpaid costs associated with an audit of the Buyer and Seller, if required as a
condition of the Merger or to maintain compliance with the rules, regulations
and standards of the SEC during the term of this Agreement, and any unpaid fee
payable to Seller's prior auditors which may be necessary for certification of
an audit of Seller.
3.3. APPLICATION OF CASH CONSIDERATION. Debtor will incur significant costs in
reliance on Buyer's agreement to pursue the Merger, which Debtor would not be
willing to incur absent this Agreement and the agreement that the Cash
Consideration will be payable in full and non-refundable in the event the Merger
is not consummated due to a default by Buyer. Therefore, in the event Buyer is
unable or unwilling to effect the Merger, the Cash Consideration will be payable
in full as a reasonable estimate of damages (and not as a penalty or forfeiture)
and shall not be refundable in whole or in part to Buyer. In the event Buyer has
not paid the full Cash Consideration hereunder at such time of default, Debtor
shall be entitled to collect such additional amounts as have not been paid. The
Parties hereby agree that this is an appropriate estimate of damages and not a
penalty or forfeiture. In the event that Debtor is unable or unwilling to effect
the Merger pursuant to the Plan and the Disclosure Statement prior to the
Closing or accepts an Over Bid, Debtor shall forfeit the right to, and Buyer
shall have no obligation to pay, any portion of the Cash Consideration remaining
unpaid by Buyer. In no event shall Buyer be entitled to the return of any Cash
Consideration unless the Closing does not occur by reason of the Debtor's
refusal or inability to consummate the Merger.
3.4. SURVIVING CORPORATION. The name of the Surviving Corporation will be
Fonefriend, Inc. or such other name as Buyer determines, in its sole discretion,
to be in the best interests of its shareholders. Said Corporation will be a
Delaware corporation unless and until otherwise changed by the Board of
Directors and stockholders of the Surviving Corporation.
3.5. SHARE STRUCTURE OF SURVIVING CORPORATION. Effective upon the Closing, the
share structure of the Surviving Corporation will be as follows:
(a) A trust (the "TRUST") created for the benefit of Debtor's
creditors and administrative expense claimants (the "CREDITORS") will own five
percent (5%) of the shares of outstanding securities of the Surviving
Corporation;
(b) Buyer's shareholders will own ninety-five percent (95%) of
the shares of outstanding securities of the Surviving Corporation; and
(c) Each of the shares of Debtor issued and outstanding
immediately before the Merger will be cancelled and extinguished and the
stockholders of Debtor prior to the Closing shall have no further interest or
rights in Debtor.
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3.6. REVERSE STOCK SPLIT. Consistent with Section 3.5 hereof, either before or
simultaneously with the Closing, the Parties may effect either a reverse stock
split of their securities or may amend the certificate of incorporation to allow
the issuance of additional shares of stock in a manner reasonably agreeable to
the Parties.
3.7. TRANSFER OF DEBTOR'S ASSETS FOR THE BENEFIT OF DEBTOR'S CREDITORS. All
assets of Debtor, including, without limitation, all of the Cash Consideration,
will be transferred at or before the Closing to a third party or the Trust. No
assets shall be transferred to the Surviving Corporation.
3.8. FUTURE REGISTRATION OF SHARES. The Surviving Corporation will exercise its
best efforts to register the shares of stock of the Surviving Corporation held
by the Trust for the benefit of the Debtor's Creditors and seek to have such
registration be deemed effective within one hundred eighty (180) days of the
effective date of the Merger. It is also agreed and understood that subsequent
to the Closing, the Board of Directors will use their best efforts to initiate
the filing of an SB-2 and an S-8 Registration Statement with the SEC for the
issuance and registration of 10,000,000 additional shares of common stock of the
Surviving Corporation.
3.9. PROHIBITION AGAINST REGISTRATION OF SHARES HELD BY BUYER INSIDERS. Buyer
will not file any registration statements to register any securities held by any
insiders of Buyer for a period of one (1) year from the effective date of the
Merger, except as otherwise set forth herein; provided, however, that in no
event shall any shares issued to Buyer's shareholders be registered prior to the
shares of the Trust or the Creditors. Notwithstanding the foregoing, the
restrictions set forth in this Agreement concerning the registration of shares
shall not apply if the Board of Directors of the Surviving Corporation makes a
good faith determination, after consultation with independent, qualified legal
counsel, that the failure of the Board of Directors to authorize and approve any
such proposed transaction could reasonably be deemed a breach of its fiduciary
duties under applicable law.
3.10. MARKET-STANDOFF PROVISION. From the date of the Approval Order and until
one hundred eighty (180) days thereafter, the Trust shall not sell any shares of
securities in the Surviving Corporation; provided, however, that the Trust shall
have the right to sell or transfer securities of the Surviving Corporation to
one or more third parties in private transactions (including the Trust to the
Creditors) any time after the Closing, provided such transferee agrees in
writing not to sell such acquired shares until the expiration of the one hundred
eighty day (180) period.
3.11. OFFICERS AND DIRECTORS. Concurrently upon the Closing, all officers and
directors of Debtor will resign and will be conclusively deemed to have
resigned. Buyer will appoint new directors of the Surviving Corporation, and the
newly appointed directors of the Surviving Corporation will appoint new officers
of the Surviving Corporation; provided, however, that Debtor's creditors shall
maintain the right to appoint one (1) member of the Board of Directors until
such time as such creditors hold less than one percent (1%) in the aggregate of
the outstanding securities of the Surviving Corporation. Thereafter, directors
will be elected by the stockholders of the Surviving Corporation pursuant to
applicable law and the certificate of incorporation and by-laws of the Surviving
Corporation.
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3.12. TIMING OF MERGER. The Parties shall consummate the Merger as promptly as
possible following the issuance by the Bankruptcy Court of the Approval Order.
3.13. CONDITIONS TO EFFECTIVENESS OF MERGER. Notwithstanding anything to the
contrary contained herein, Buyer shall have no obligation to complete the Merger
unless the Bankruptcy Court enters the Approval Order, which Approval Order
shall provide, among other things, that upon completion of the Merger, the
Surviving Corporation shall have assumed no liabilities or obligations of Debtor
or Related Debtors other than as set forth herein.
3.14. REDEMPTION OF SECURITIES.
(a) From and after the date which is one year after the
commencement of trading of the Surviving Corporation's securities on any
national securities exchange or quotation system (the "REDEMPTION COMMENCEMENT
DATE"), upon written request to the Surviving Corporation from the trustee of
the Trust appointed by the Official Committee of Creditors (the "TRUSTEE"), or
upon written request from the Surviving Corporation to the Trustee, the
Surviving Corporation shall redeem all or any of the then-outstanding shares of
securities of the Surviving Corporation held by the Trustee (the "REDEMPTION
SECURITIES") by paying in cash therefor an aggregate purchase price of $3
million or the corresponding pro-rata portion thereof, based upon the number of
Redemption Securities for which notice has been given by the Trustee (the
"REDEMPTION PRICE") and provided that the Surviving Corporation has on hand at
the time of such request sufficient surplus capital to provide for payment of
the full Redemption Price and is otherwise permitted to consummate such
redemption under applicable law.
(b) The Trustee or Surviving Corporation shall specify the
number of shares to be redeemed, the Redemption Price and the place at which
payment shall be made (the "REDEMPTION NOTICE"). The Trustee shall surrender to
the Surviving Corporation the certificate or certificates representing such
shares, and thereupon the Redemption Price shall be payable to the order of the
Trustee, and such surrendered certificates shall be cancelled. If less than all
the shares represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares.
(c) From and after the Redemption Commencement Date, unless a
default in the payment of the Redemption Price has occurred, all rights of the
Trustee as the holder of those Redemption Securities tendered for payment and
cancellation (except the right to receive the Redemption Price without interest
upon surrender of such certificate or certificates) shall cease with respect to
such shares, and such shares shall not be transferred thereafter on the books of
the Surviving Corporation or be deemed to be outstanding for any purpose
whatsoever. All shares of Redemption Securities that are not redeemed (including
shares as to which a default in the full payment of the Redemption Price has
occurred) shall remain outstanding.
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(d) On or before the Redemption Commencement Date, the
Surviving Corporation may deposit the Redemption Price with a bank or trust
corporation having aggregate capital and surplus in excess of $100,000,000 as a
trust fund for the benefit of the Trustee, with irrevocable instructions and
authority to the bank or trust corporation to pay the Redemption Price for such
shares to the Trustee on or after the Redemption Commencement Date upon receipt
of notification from the Trustee pursuant to Section 3.14(b) hereof. From and
after the date of payment to the Trustee, the shares so called for redemption
shall be redeemed and shall be deemed to be no longer outstanding, and the
holders thereof shall cease to be stockholders with respect to such shares and
shall have no rights with respect thereto except the rights to receive from the
bank or trust corporation payment of the Redemption Price of the shares, without
interest, upon surrender of its certificates therefor.
ARTICLE 4.
COVENANT OF CONFIDENTIALITY, SEC COMPLIANCE
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AND ANTIDILUTION PROTECTION
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4.1. COVENANT OF CONFIDENTIALITY. The Parties reasonably contemplate that in
connection with the performance by the Parties of any investigations, inquiries,
reviews and analyses (collectively, "DUE DILIGENCE") regarding the other Party
and the other Party's business and affairs, and in the preparation, processing
and approval of the Disclosure Statement and Plan, and in the pursuit and
consummation by the Parties of the Merger, each Party and the employees,
representatives and consultants of each Party (collectively, "PARTY'S AGENTS")
will receive or discover information that is confidential and proprietary in
nature, regarding the other and the value, quality, condition and affairs of the
other, which would not be disclosed, discovered or received by such Party or
such Party's Agents absent this Agreement. Therefore, absent the prior written
approval of the other Party, and except as otherwise set forth in this
Agreement: (a) Each Party will keep all such information strictly confidential
and not disclose any such information to any third party other than to its
professional advisors and such Party's agents with a reasonable need to know
such information in order to consummate the transactions contemplated by this
Agreement, and (b) each Party will ensure that any of such Party's Agents who
receive or have access to any such information is contractually bound by and
will not breach this covenant of strict confidentiality. Neither Party will
reproduce or disclose, or allow its Party's Agents to reproduce or disclose, any
such information, except (i) as necessary in connection with confirmation of a
Plan embodying the terms of this Agreement; (ii) in the furtherance of this
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Agreement and the Merger; (iii) if a potential private purchaser agrees to be
bound by this Section 4.1 or (iv) to the extent necessary to comply with law or
to enforce the provisions of this Agreement. If the Merger fails to occur, then
each Party will cause all such information to be promptly returned to the Party
legally entitled thereto and will continue to keep such information
confidential.
4.2. SECURITIES COMPLIANCE AND PUBLIC STATEMENTS. From the date of this
Agreement, the Buyer shall assume the costs of complying with all applicable
filing requirements of the SEC. The Debtor shall timely comply with all of the
requirements applicable to a publicly traded company, including, but limited to,
the filing of Form 10-K's, 10-Q's, 8-K's, and shall have any and all press
releases reviewed and approved by its corporate securities counsel. All Parties
agree not to issue any press release or otherwise make any public statement with
respect to the transactions contemplated hereby without the consent of the other
Party (which consent will not be unreasonably withheld) except as may be
required by law, in which event such press release or public statement shall be
made only after consultation with the other Party.
4.3. ANTIDILUTION PROTECTION. From the Closing and through the date which is
fifteen (15) months after the Redemption Commencement Date, the Trust or the
Creditors, as the case may be, shall maintain an ownership interest in the
Surviving Corporation equal to the percentage ownership of equity securities
then owned by the Trust or the Creditors. The Surviving Corporation shall take
all steps and do all acts necessary to maintain the Trust's or the Creditor's
equity ownership interest, including, without limitation, issuing additional
shares without the payment of any additional consideration and amending the
Surviving Corporation's charter documents. The Antidilution Protection as herein
defined shall not apply to any issuance of securities by the Surviving
Corporation which issuance is not dilutive of the interest of the Trust or the
Creditors from a book value standpoint.
ARTICLE 5.
WARRANTIES, REPRESENTATIONS, DISCLAIMERS, WAIVERS AND RELEASES
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5.1. LEGAL CAPACITY. Each Party represents that to the best of its knowledge,
subject to the provisions of this Agreement relating to entry of the Approval
Order, (a) such Party has the requisite power, authority and legal capacity to
make, execute, enter into and deliver this Agreement and to perform its
obligations under this Agreement, (b) any Person executing and delivering this
Agreement on behalf of such Party is duly authorized and empowered to do so, and
(c) neither this Agreement nor the performance by such Party of any obligation
under this Agreement will violate any provision of any article, by-law,
operating agreement, partnership agreement or governing articles of such Party
or any agreement, contract, covenant, condition, restriction, injunction or
order by which such Party is bound.
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5.2. NO UNDISCLOSED INDUCEMENTS. Each Party represents that it has entered into
this Agreement in reliance solely upon its own independent investigation and
analysis of the facts and circumstances, and that no representations, warranties
or promises, other than those set forth in this Agreement, were made by any
Party or any agent, employee or counsel of any Party to induce said Party to
execute this Agreement.
5.3. REPRESENTATION BY COUNSEL. Each Party represents that it has acted pursuant
to the advice of legal counsel of its own choosing in connection with the
negotiation, preparation and execution of this Agreement, or that it was advised
to obtain the advice of such legal counsel, had fair and ample opportunity to
obtain the advice of such legal counsel and willfully declined to obtain the
advice of such legal counsel.
5.4. BROKERAGE COMMISSIONS - INDEMNIFICATION. Each Party represents to the other
that, except as may be disclosed, acknowledged or agreed to in writing by both
Parties and properly and timely disclosed to the Bankruptcy Court, such Party
has not engaged or utilized the services of any broker, salesperson, agent or
finder in connection with the Merger and that no commission or fee will be due
or payable to any broker, salesperson, agent or finder as the result of any
conduct by or on behalf of such Party. The Buyer will indemnify, defend and hold
the Debtor harmless from and against any claims or liability for any commissions
or fees to any broker, salesperson, agent or finder which result from the
conduct of the Buyer in connection with the Merger, and from any attorneys' fees
and other costs of litigation, arbitration and/or settlement relating thereto.
5.5. NO WARRANTY REGARDING INFORMATION. This Agreement is made, executed and
entered into by the Parties, and the Merger, if it occurs, will occur without
any warranty, representation or guaranty of any kind by Debtor, or any director,
officer, employee, agent, representative, accountant, attorney or trustee of
Debtor (collectively, the "DEBTOR PERSONS"). Neither Debtor nor any Debtor
Person makes or will be deemed to have made any warranty or representation
regarding the truth, accuracy, completeness or source of any such information.
Buyer will conduct all of its own Due Diligence and make its own independent
determination of the merits, risks and costs relating to this Agreement and the
Merger, without any reliance upon Debtor or any of the Debtor Persons, or any
information provided by or obtained from Debtor or any of the Debtor Persons.
5.6. TRUTH AND ACCURACY. Each warranty and representation set forth in this
Agreement by Buyer will be true and accurate, and the Buyer will cause the same
to be true and accurate, on the Effective Date and as of the Closing.
5.7. SURVIVAL. Each statement, certification, representation, warranty,
covenant, disclosure, disclaimer, waiver, release and agreement contained in
this Agreement will terminate on the Closing. Notwithstanding the foregoing,
Sections 3.2, 3.3, 3.8, 3.9, 3.10, 3.11, 3.14, 4.1, 4.3, 5.9 and Article 6
hereof shall survive the Closing.
5.8. NO LIABILITY. Neither the Trust nor the Creditors shall have any
obligations or liabilities under this Agreement other than expressly set forth
of referenced herein.
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5.9. SECURITIES LAW EXEMPTION FROM REGISTRATION. Buyer represents and warrants
that the securities of Debtor to be issued to its shareholders will be exempt
from registration under Section 4(2) of the Securities Act and all applicable
state securities laws.
ARTICLE 6.
GENERAL PROVISIONS
------------------
6.1. INTEGRATION. This Agreement is the sole and entire agreement between the
Parties regarding the Merger. Any and all prior or contemporaneous agreements
and negotiations, oral or written, regarding such subject matter, are hereby
superseded. No employee or agent of any Party has authority to orally modify
this Agreement, or to make any oral representation or agreement other than as
contained in this Agreement.
6.2. AMENDMENT. No modification of, deletion from, or addition to this Agreement
will be effective unless made in writing and executed by each Party.
6.3. NO ASSIGNMENT. Neither Party may assign its rights or obligations under
this Agreement absent the written consent of the other Party.
6.4. CONSTRUCTION. The provisions of this Agreement will be liberally construed
to effectuate the Merger. Section headings were inserted for convenience only
and will not be given undue consideration in resolving questions of construction
or interpretation. For purposes of determining the meaning of, or resolving any
ambiguity with respect to, any provision of this Agreement, each Party will be
deemed to have had equal bargaining strength in the negotiation of this
Agreement and equal responsibility for the preparation of this Agreement and any
exhibits thereto, such that neither this Agreement nor any uncertainty or
ambiguity therein will be arbitrarily construed or resolved against any Party
pursuant to California Civil Code Section 1654 or any other similar authority or
rule of construction.
6.5. FURTHER ASSURANCES. Each Party will exercise its good faith best efforts to
satisfy and cause to be satisfied all contingencies, conditions and conditions
precedent to the transactions described in this Agreement, including, without
limitation, promptly executing all documents and promptly taking all actions,
including, without limitation, the payment of money, reasonably required to
effectuate such transactions and perform its obligations pursuant to this
Agreement. If and to the extent that any modification of this Agreement is
required in order for the contemplated transaction to comply with the
requirements of any securities, bankruptcy or other law applicable to such
transaction, then the Parties will amend this Agreement to allow such
compliance, provided that such amendment does not materially alter the benefits
reasonably expected to be received by each Party pursuant to this Agreement.
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6.6. FORM OF DEPOSITS AND PAYMENTS. All payments and deposits required pursuant
to this Agreement will be made in the form of either cash or immediately
available cash equivalents acceptable to the Person receiving such payment, and
federal wire transfer of funds will be an acceptable method of payment.
6.7. NO OBLIGATIONS TO THIRD PARTIES. Except for the Trust and the Creditors,
this Agreement will not confer any rights upon any third party or otherwise
obligate any Party to any Person who is not a Party. However, this Section 6.7
will not limit or restrict the binding effect of the Approval Order on Persons
who are not a Party to this Agreement.
6.8. GENDER AND QUANTITATIVE USE. Wherever the context of this Agreement may so
require, the gender will include the masculine, feminine and neuter, and the
quantitative usage of any word or phrase will include the singular and plural.
6.9. TIME IS OF THE ESSENCE. Time is of the essence, such that each Party will
perform all acts required of such Party pursuant to this Agreement by the date
or within the time period required pursuant to this Agreement.
6.10. PERFORMANCE DATES. If the date by which or upon which any obligation
otherwise must be performed pursuant to this Agreement occurs on a day other
than a Business Day, then the date by which or upon which such obligation must
be performed will be automatically extended until the next Business Day.
6.11. GOVERNING LAW. This Agreement is made under and will be construed in
accordance with and governed by the laws of the State of California, without
giving effect to the principles of conflicts of law.
6.12. JURISDICTION AND VENUE. The Parties hereby acknowledge and consent to the
exclusive jurisdiction of the Bankruptcy Court for the Central District of
California, Santa Xxx Division, and to venue in Orange County, California, for
the purpose of resolving any claim, controversy or disagreement which may arise
with respect to this Agreement or the Merger. It will be a material breach of
this Agreement to seek to resolve any such claim, controversy or disagreement in
any other court or forum.
6.13. DEFAULT. Any breach by a Party of any term, provision, covenant,
condition, agreement, warranty or representation in this Agreement will
constitute a material default (the "DEFAULT") pursuant to this Agreement if such
breach continues uncured for a period of five (5) Business Days following the
date of Notice thereof by the other Party; provided, however, that if the breach
is not of a type that can be cured by the payment of money and is of a type that
more than five (5) Business Days are reasonably required to cure, then there
will be no default by reason of such breach if the Party in breach: (a)
Commences the cure within five (5) Business Days of the date of the Notice, (b)
promptly and diligently prosecutes such cure to completion, and (c) completes
such cure within ten (10) Business Days following the date of such Notice.
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6.14. ENFORCEMENT. Subject to the provisions of this Agreement, including,
without limitation, those which relate to venue and jurisdiction, each Party
will have the right to enforce by proceedings at law or in equity all of the
provisions of this Agreement, including, without limitation, the right to
prosecute proceedings at law or in equity against any Person who violates or
attempts to violate any of such provisions, to enjoin any such Person from doing
so, to cause such violation to be remedied, and to recover damages for such
violation. Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party shall 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.
6.15. WAIVER. The failure by any Party to enforce any provision of this
Agreement will not constitute a waiver of the right to enforce the same
provision, or any other provision, thereafter. No waiver by any Party of any
provision of this Agreement will be deemed a waiver of any other provision of
this Agreement, whether or not similar, nor will any waiver constitute a
continuing waiver unless otherwise agreed to in writing.
6.16. SEVERABILITY. In the event that any provision of this Agreement is held by
any court of competent jurisdiction to be illegal, invalid or unenforceable for
any reason, then the remaining portions of this Agreement will nonetheless
remain in full force and effect, unless such portion of this Agreement is so
material that its deletion would violate the obvious purpose and intent of the
Parties.
6.17. DOCUMENTATION AND PERFORMANCE COSTS AND ATTORNEYS' FEES. Except as
otherwise provided herein, each Party will bear its own costs and attorneys'
fees incurred in the negotiation and documentation of this Agreement and in the
performance of its obligations under this Agreement.
6.18. ENFORCEMENT COSTS AND ATTORNEYS' FEES. If any Party commences legal
proceedings against any other Party to enforce the provisions of this Agreement
or to declare any rights or obligations under this Agreement, then the
prevailing Party will recover from the losing Party its costs of suit, including
reasonable attorneys' fees, as will be determined by the court in such
proceeding.
6.19. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which is an original and all of which will constitute one and the same
agreement.
6.20 INUREMENT. This Agreement is a legally binding contract and will inure to
the benefit of and be enforceable by, and will be binding upon and enforceable
against, each of the Parties and their respective successors, assigns, grantees,
heirs, executors, administrators and trustees.
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6.21 NOTICE. Any notice, consent, approval, disapproval, waiver or other
communication of any kind (collectively, a "NOTICE"), by any Party to any other
Party pursuant to this Agreement must be made in writing and delivered to such
other Party at the address shown below, unless written Notice of a different
address is given by such other Party pursuant to this Section 6.23. Any payments
to be made pursuant to this Agreement will be deemed made only upon actual
receipt. A Notice given by personal service will be deemed received upon
delivery. A Notice given by first class mail, postage prepaid, addressed to the
address required by this Section 6.23, will be deemed received five (5) Business
Days following the deposit thereof with the United States Post Office. A Notice
given by overnight courier service will be deemed received on the date of
delivery confirmed by the courier service. A Notice given by electronic
facsimile transmission will be deemed received on the date upon which the
recipient's facsimile machine confirms electronically the receipt of such
Notice, provided that a copy of any Notice given by facsimile transmission must
also be sent to the recipient by first class mail, postage prepaid, addressed to
the address required pursuant to this Section 6.23. Telephone numbers, if
listed, are listed for convenience purposes only and not for the purposes of
giving Notice pursuant to this Agreement. If any notice information for any
Party is missing in this document, it will not affect the validity or
enforceability of this Agreement, but the Party whose information is missing
shall promptly, and immediately upon request, provide such information to the
other Party.
6.22. JOINT PREPARATION. This Agreement is to be deemed to have been negotiated
and prepared jointly by the Parties and any uncertainty or ambiguity existing
herein, if any, shall not be interpreted against any Party, but shall be
interpreted according to the application of the rules of interpretation for
arm's length agreements.
DEBTOR: Universal Broadband Networks, Inc.
------- 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
A COPY OF ANY NOTICE TO DEBTOR MUST ALSO BE SENT TO:
----------------------------------------------------
Xxxxxx, Xxxxxxx & Golden, LLP
000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Lei Xxx Xxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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BUYER: FoneFriend, Inc.
------ 0000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
A COPY OF ANY NOTICE TO BUYER MUST ALSO BE SENT TO:
---------------------------------------------------
Xxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxx Xxxxx Xxxxx X
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COMMITTEE:
----------
______________________________________
______________________________________
______________________________________
______________________________________
Attn:_________________________________
Telephone: (___)______________________
Facsimile: (___)______________________
A COPY OF ANY NOTICE TO THE COMMITTEE MUST ALSO BE SENT TO:
-----------------------------------------------------------
Irell & Xxxxxxx, LLP
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx, Xxxx Mathasiel
Telephone: ( ) ____________
Facsimile: (___) ____________
6.23. EXHIBITS. The following Exhibits are attached hereto and incorporated
herein by this reference, as though fully set forth herein:
Exhibit A - Schedule of Assets to be Retained by the Surviving Corporation
[SIGNATURE PAGE FOLLOWS]
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THE UNDERSIGNED PARTIES made, executed and entered into this Agreement
as of the Effective Date.
DEBTOR: UNIVERSAL BROADBAND NETWORKS, INC.,
A DELAWARE CORPORATION
By: /S/ XXXXXXX XXXXXX
-----------------------------------
(signature)
Name: XXXXXXX XXXXXX
-----------------------------------
(typed or printed name)
Its: EXECUTIVE VICE PRESIDENT
-----------------------------------
(title or capacity)
BUYER: FONEFRIEND, INC.,
A NEVADA CORPORATION
By: /S/ XXXXXXXX XXXXXX
-----------------------------------
(signature)
Name: XXXXXXXX XXXXXX
-----------------------------------
(typed or printed name)
Its: PRESIDENT
-----------------------------------
(title or capacity)
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