AGREEMENT AND PLAN OF MERGER
among
Fremont Corporation
Networker Systems, Inc.
and
Wireless Frontier Internet, Inc.
Dated as of September 16, 2003
ARTICLE I DEFINITIONS...................................................................................4
1.1 Certain Definitions...........................................................................4
1.2 Other Definitions.............................................................................5
ARTICLE II THE MERGER....................................................................................6
2.1 Merger; Surviving Corporation.................................................................6
2.2 Articles of Incorporation.....................................................................6
2.3 By-Laws. 6
2.4 Directors and Officers........................................................................6
2.5 Effective Time................................................................................6
2.6 Merger Shares; Conversion and Cancellation of Securities......................................7
2.7 Surrender of Company Certificates.............................................................7
2.8 Stock Transfer Books..........................................................................9
2.9 Dissenting Shares.............................................................................9
2.10 Restriction on Transfer.......................................................................9
2.11 Restrictive Legend...........................................................................10
2.12 Closing. 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................10
3.1 Due Organization and Qualification; Subsidiaries; Due Authorization..........................10
3.2 Capitalization...............................................................................10
3.3 Further Financial Matters....................................................................11
3.4 No Other Representations.....................................................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WIRELESS...................................................11
4.1 Due Organization and Qualification; Due Authorization........................................11
4.2 No Conflicts or Defaults.....................................................................11
4.3 Capitalization...............................................................................11
4.4 Financial Statements.........................................................................12
4.5 Further Financial Matters....................................................................12
4.6 Brokers 12
ARTICLE V COVENANTS OF WIRELESS........................................................................12
5.1 Consents of the Wireless Shareholders........................................................12
5.2 State Statutes...............................................................................12
ARTICLE VI DELIVERIES...................................................................................12
6.1 Items to Be Delivered to Wireless Prior to or at Closing by the Company......................12
6.2 Items to Be Delivered to the Company Prior to or at Closing by Wireless......................13
ARTICLE VII CONDITIONS PRECEDENT.........................................................................13
ARTICLE VIII NO PUBLIC DISCLOSURE.........................................................................14
ARTICLE IX CONFIDENTIAL INFORMATION.....................................................................14
ARTICLE X TERMINATION..................................................................................14
10.1 Termination..................................................................................14
ARTICLE XI MISCELLANEOUS................................................................................15
2
11.1 Survival of Representations, Warranties and Agreements.......................................15
11.2 Access to Books and Records..................................................................15
11.3 Further Assurances...........................................................................15
11.4 Notice 15
11.5 Entire Agreement.............................................................................16
11.6 Successors and Assigns.......................................................................16
11.7 Governing Law................................................................................16
11.8 Counterparts.................................................................................17
11.9 Construction.................................................................................17
11.10 Severability.................................................................................17
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AGREEMENT AND PLAN OF MERGER, dated as of September 16, 2003 (the
"Agreement"), among FREMONT CORPORATION, a Delaware corporation, (the
"Company"), NETWORKER SYSTEMS, INC., a Texas corporation and wholly owned
subsidiary of the Company ("Merger Sub"), and WIRELESS FRONTIER INTERNET, INC.,
a Texas corporation ("Wireless"). Wireless, Merger Sub and the Company are
collectively referred to herein as the "Parties.."
RECITALS:
WHEREAS, the respective boards of directors of each of Wireless, Merger Sub
and the Company have approved the merger of Merger Sub with and into the Company
(the "Merger") and approved the Merger upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the Company's sole asset is a 100% equity interest in Winfill
Holdings International Limited, a company organized under the laws of the
British Virgin Islands (the "Subsidiary") which in turn holds an interest in a
sino-foreign joint venture;
WHEREAS, immediately after the consummation of the Merger, the Company will
transfer all of the equity interest of the Subsidiary to Million Treasure
Enterprises Limited, a British Virgin Islands corporation ("MTE"), and MTE will
return to the Company 661,654 shares of the Company's Common Stock currently
owned by MTE (the "MTE Shares") for cancellation and cancel a warrant to acquire
2,000,000 shares of the Company's Class B Common Stock (the "MTE Warrant");
WHEREAS, it is intended that, for federal income tax purposes, the Merger
shall qualify as a reorganization under the Provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code"); and
WHEREAS, the Company, Wireless and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual promises herein
made, and in consideration of the representations, warranties, covenants and
agreements herein contained, and intending to be legally bound hereby, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. The following terms shall, when used in this
Agreement, have the following meanings:
"Affiliate" means, with respect to any Person: (i) any Person directly or
indirectly owning, controlling, or holding with power to vote 10% or more of the
outstanding voting securities of such other Person (other than passive or
institutional investors); (ii) any Person 10% or more of whose outstanding
voting securities are directly or indirectly owned, controlled, or held with
power to vote, by such other Person; (iii) any Person directly or indirectly
controlling,
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controlled by, or under common control with such other Person; and (iv) any
officer, director or partner of such other Person. "Control" for the foregoing
purposes shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or voting interests, by
contract or otherwise.
"Business Day" means any day other than Saturday, Sunday or a day on which
banking institutions in Los Angeles, California, are required or authorized to
be closed.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Collateral Documents" mean the Exhibits and any other documents,
instruments and certificates to be executed and delivered by the Parties
hereunder or thereunder.
"Commission" means the Securities and Exchange Commission or any Regulatory
Authority that succeeds to its functions.
"Company Common Stock" means the common shares of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Liability" means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due).
"Merger Shares" means the shares of Company Common Stock deliverable by the
Company in exchange for Wireless Common Stock pursuant to Section 2.6.
"Person" means any natural person, corporation, partnership, trust,
unincorporated organization, association, limited liability company, Regulatory
Authority or other entity.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Subsidiary" of a specified Person means (a) any Person if securities
having ordinary voting power (at the time in question and without regard to the
happening of any contingency) to elect a majority of the directors, trustees,
managers or other governing body of such Person are held or controlled by the
specified Person or a Subsidiary of the specified Person; (b) any Person in
which the specified Person and its subsidiaries collectively hold a 50% or
greater equity interest; (c) any partnership or similar organization in which
the specified Person or subsidiary of the specified Person is a general partner;
or (d) any Person the management of which is directly or indirectly controlled
by the specified Person and its Subsidiaries through the exercise of voting
power, by contract or otherwise.
"Wireless Common Stock" means the common shares of Wireless.
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"Wireless Shareholders" means, as of any particular date, the holders of
Wireless Common Stock on that date.
1.2 Other Definitions. The following terms shall, when used in this
Agreement, have the meanings assigned to such terms in the Sections indicated.
Term Schedule
---- --------
"Agreement"............................................................................................ Preamble
"Articles of Merger"................................................................................... 2.5
"BCA".................................................................................................. 2.1
"Closing".............................................................................................. 2.12
"Closing Date"......................................................................................... 2.12
"Company Financial Statements"........................................................................ 3.4
"Conversion"........................................................................................... 2.6(a)
"Dissenting Shares"................................................................................... 2.9
"Effective Time"....................................................................................... 2.5
"Excluded Shares"...................................................................................... 2.6(a)
"Merger".............................................................................................. 2.1
"Parties"............................................................................................. Preamble
"Surviving Corporation"............................................................................... 2.1
"Wireless Common Stock"................................................................................ 2.7(a)
"Wireless Certificates"................................................................................ 2.7(a)
ARTICLE II
THE MERGER
2.1 Merger; Surviving Corporation. In accordance with and subject to the
provisions of this Agreement and the Texas Business Corporation Act ("BCA"), at
the Effective Time, the Merger Sub shall be merged with and into Wireless (the
"Merger"), and Wireless shall be the surviving corporation in the Merger
(hereinafter sometimes called the "Surviving Corporation") and shall continue
its corporate existence under the laws of the State of Texas. At the Effective
Time, the separate existence of the Merger Sub shall cease. All properties,
franchises and rights belonging to Wireless and Merger Sub, by virtue of the
Merger and without further act or deed, shall be vested in the Surviving
Corporation, which shall thenceforth be responsible for all the liabilities and
obligations of each of Merger Sub and Wireless.
2.2 Articles of Incorporation. Wireless' articles of incorporation, as in
effect at the Effective Time, shall continue in full force and effect as the
articles of incorporation of the Surviving Corporation until altered or amended
as provided therein or by law.
2.3 By-Laws. Wireless' by-laws, as in effect at the Effective Time, shall
be the by-laws of the Surviving Corporation until altered, amended or repealed
as provided therein or by law.
2.4 Directors and Officers. The directors of Wireless prior to the
Effective Time shall be the directors of the Surviving Corporation. The members
of the board of directors of the
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Surviving Corporation shall serve thereafter in accordance with the articles of
incorporation and by-laws of the Surviving Corporation and the BCA. The officers
of Wireless prior to the Effective Time shall continue to serve as officers of
the Surviving Corporation in accordance with the articles of incorporation and
by-laws of the Surviving Corporation and the BCA.
2.5 Effective Time. The Merger shall become effective at the time and date
that the articles of merger (the "Articles of Merger"), in form and substance
acceptable to the Parties, is accepted for filing by the Secretary of State of
the State of Texas in accordance with the provisions of Section 8.06 of the BCA.
The Articles of Merger shall be executed by the Merger Sub and Wireless and
delivered to the Secretary of State of the State of Texas for filing on the
Closing Date. The date and time when the Merger becomes effective are referred
to herein as the "Effective Time."
2.6 Merger Shares; Conversion and Cancellation of Securities.
(a) Conversion of Wireless Common Stock. At the Effective Time, all shares
of Wireless Common Stock outstanding immediately before the Effective Time,
other than shares described in Section 2.6(b) and other than Dissenting Shares,
collectively, the "Excluded Shares", shall be converted, by virtue of the
Merger, into 16,000,000 shares of the Company's Common Stock (the "Merger
Shares") which shares shall be temporarily deposited with Xxxxxx X. Xxxxx (the
"escrow agent"), to be held by the Escrow Agent for distribution within ten (10)
days of the date hereof on a pro rata basis among the then holders of Wireless
Common Stock so, that the holders of Wireless Common Stock will own 71% of the
Company's issued and outstanding capital stock on a fully diluted basis as of
the Effective Date after giving effect to the Merger, subject to the following:
(i) the allocation of the Merger Shares among Wireless Shareholders
excluding the holders of Dissenting Shares shall be as set forth on Exhibit 2.6
to be delivered to the Company at least one business day prior to the Closing;
(ii) the cancellation of the MTE Shares; and
(iii) the cancellation of the MTE Warrant.
At the Effective Time, all Wireless Shares shall no longer be outstanding
and shall be cancelled and retired and shall cease to exist, and each
certificate formerly representing any Wireless Common Stock (other than Excluded
Shares) shall thereafter represent only the right to the Merger Shares and any
distribution or dividend pursuant to Section 2.7(b).
(b) Treasury Shares, Etc. Each share of Wireless Common Stock held in the
treasury of Wireless and each share of Wireless Common Stock, if any, held by
the Company or any subsidiary of the Company immediately before the Effective
Time shall be cancelled and extinguished, and nothing shall be issued or paid in
respect thereof.
(c) Fractional Shares. No certificates or scrip evidencing fractional
shares of the exchange for Wireless Common Stock. All fractional share amounts
shall be rounded up to the nearest whole share.
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2.7 Surrender of Company Certificates.
(a) Exchange Procedures. Promptly after the Effective Time, the Company or
its appointed designee shall mail to each holder of a certificate or
certificates of Wireless Common Stock ("Wireless Certificates") whose shares are
converted into the right to receive the Merger Shares, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to Wireless Certificates shall pass to the Company, only upon
delivery of the Wireless Certificates to the Company and which shall be in such
form and have such other provisions as the Company may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Wireless
Certificates in exchange for the Merger Shares and any dividends or other
distributions pursuant to Section 2.7(b). Upon surrender of Wireless
Certificates for cancellation to the Company, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holders of such Wireless Certificates shall be
entitled to receive the Merger Shares in exchange therefor and any dividends or
distributions payable pursuant to Section 2.7(b), and the Wireless Certificates
so surrendered shall forthwith be canceled. Until so surrendered, outstanding
Wireless Certificates will be deemed from and after the Effective Time, for all
corporate purposes, subject to Section 2.9, to evidence the ownership of the
number of full shares of Company Common Stock into which such shares of the
Wireless Common Stock shall have been so converted and any dividends or
distributions payable pursuant to Section 2.7(b). Notwithstanding the foregoing,
if any Wireless Certificate is lost, stolen, destroyed or mutilated, such holder
shall provide evidence reasonably satisfactory to the Company as to such loss,
theft, destruction or mutilation and an affidavit in form and substance
satisfactory to the Company, and, thereupon, such holder shall be entitled to
receive the Merger Shares in exchange therefor and any dividends or
distributions payable pursuant to Section 2.7(b), and Wireless Certificates so
surrendered shall forthwith be canceled.
(b) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the date of this Agreement with respect to
Wireless Common Stock with a record date after the Effective Time, will be paid
to the holders of any unsurrendered Company Certificates with respect to the
shares of Wireless Common Stock represented thereby until the holders of record
of such Wireless Certificates shall surrender such Wireless Certificates or, in
the case of any Wireless Certificate which is lost, stolen, destroyed or
mutilated, an affidavit in form and substance satisfactory to the Company.
Subject to applicable law, following surrender of any such Wireless Certificates
or delivery of such affidavit, the Company shall deliver to the record holders
thereof, without interest, the Merger Shares and the amount of any such
dividends or other distributions with a record date after the Effective Time
payable with respect to such whole shares of Wireless Common Stock.
(c) Transfers of Ownership. If certificates for shares of Company Common
Stock are to be issued in a name other than that in which the Wireless
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Wireless Certificates so surrendered
will be properly endorsed and otherwise in proper form for transfer and that the
persons requesting such exchange will have paid to the Company or any agent
designated by it any transfer or other taxes required by reason of the issuance
of certificates for shares of Company Common Stock in any name other than that
of the registered holder of the Wireless Certificates surrendered, or
established to the satisfaction of the Company or any agent designated by it
that such tax has been paid or is not payable.
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(d) Required Withholding. In connection with any payment to any holder or
former holder of the Wireless Common Stock, each of the Company and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of the Wireless Common Stock such amounts as may be
required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax law or under any other applicable laws.
To the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the person
to whom such amounts would otherwise have been paid.
(e) No Liability. Notwithstanding anything to the contrary in this Section
2.7, neither the Company, the Surviving Corporation nor any party hereto shall
be liable to any Person for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Wireless Certificate shall not have been surrendered prior to the date
immediately prior to the date on which such property would otherwise escheat to
or become the property of any Governmental or Regulatory Authority, any such
property, to the extent permitted by applicable law, shall become the property
of the Surviving Corporation, free and clear of all claims or interest of any
person previously entitled thereto.
(f) Termination. Any holders of the Wireless Certificates who have not
complied with this ARTICLE II shall look only to the Company or the Surviving
Corporation for, and the Company and the Surviving Corporation shall remain
liable for, payment of their claim for Merger Shares and any dividends or
distributions with respect to Company Common Stock, without interest thereon.
2.8 Stock Transfer Books. At the Effective Time, the stock transfer books
of Wireless shall be closed, and there shall be no further registration of
transfers of shares of Wireless Common Stock thereafter on the records of
Wireless.
2.9 Dissenting Shares. Shares of Wireless Common Stock which are issued and
outstanding immediately prior to the Effective Time and which are held by
persons who have properly exercised, and not withdrawn or waived, appraisal
rights with respect thereto in accordance with Section 5.12 of the BCA (the
"Dissenting Shares"), will not be converted into the right to receive the Merger
Shares, and holders of such shares of Company Common Stock will be entitled, in
lieu thereof, to receive payment of the appraised value of such shares of
Wireless Common Stock in accordance with the provisions of such Section 5.12
unless and until such holders fail to perfect or effectively withdraw or lose
their rights to appraisal and payment under the BCA. If, after the Effective
Time, any such holder fails to perfect or effectively withdraws or loses such
right, such shares of Wireless Common Stock will thereupon be treated as if they
had been converted at the Effective Time into the right to receive the Merger
Shares, without any interest thereon. Wireless will give the Company prompt
notice of any demands received by Wireless for appraisal of shares of Wireless
Common Stock. Prior to the Effective Time, Wireless will not, except with the
prior written consent of the Company make any payment with respect to, or settle
or offer to settle, any such demands.
2.10 Restriction on Transfer. The Merger Shares may not be sold,
transferred, or otherwise disposed of without registration under the Act or an
exemption there from, and that in
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the absence of an effective registration statement covering the Merger Shares or
any available exemption from registration under the Act, the Merger Shares must
be held indefinitely. Wireless Shareholders are aware that the Merger Shares may
not be sold pursuant to Rule 144 promulgated under the Act unless all of the
conditions of that Rule are met. Among the conditions for use of Rule 144 may be
the availability of current information to the public about the Company, which
information is not currently available.
2.12 Restrictive Legend. All certificates representing the Merger Shares
shall contain the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE, INCLUDING
CERTAIN VOTING AND TRANSFER RIGHTS WITH RESPECT THERETO, ARE
SUBJECT TO THE TERMS OF AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF SEPTEMBER 16, 2003, AMONG FREMONT CORPORATION, NETWORKER
SYSTEMS, INC., AND WIRELESS FRONTIER INTERNET, INC. A COPY OF
WHICH IS ON FILE IN THE PRINCIPAL OFFICE OF THE ISSUER.
FURTHER, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF WITHOUT
REGISTRATION UNDER THE ACT OR AN EXEMPTION THERE FROM."
2.12 Closing. The closing of the transactions contemplated by this
Agreement and the Collateral Documents (the "Closing") shall take place at the
offices of Loeb & Loeb LLP, 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, or at such other location as the parties may agree as
soon as practicable (the "Closing Date"), it being understood and agreed that
the closing shall be deemed to occur simultaneously with the execution of this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Wireless that:
3.1 Due Organization and Qualification; Subsidiaries; Due Authorization.
(a) The Company is a corporation duly incorporated, and under the laws of
Delaware.
(b) Except as set forth in Schedule 3.1(b) attached hereto, the Company
does not own, directly or indirectly, any capital stock, equity or interest in
any corporation, firm, partnership, joint venture or other entity.
3.2 Capitalization. Except as set forth on Schedule 3.2, the authorized
capital stock of the Company immediately prior to giving effect to the
transactions contemplated hereby consists of 100,000,000 shares of Common Stock
par value $.0001 per share, of which 5,946,900 shares are issued and outstanding
(of which 85,000 shares may be in dispute). All of the outstanding
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shares of capital stock are, and the Company Shares when issued in accordance
with the terms hereof will be, duly authorized, validly issued, fully paid and
non-assessable, and have not been or, with respect to the Company Shares, will
not be, issued in violation of any preemptive right of stockholders. The Company
Shares are not subject to any preemptive or subscription right, any voting trust
agreement or other contract, agreement, arrangement, option, warrant, call,
commitment or other right of any character obligating or entitling the Company
to issue, sell, redeem or repurchase any of its securities.
3.3 Further Financial Matters. Except as set forth on Schedule 3.3, to its
knowledge, the Company does not have any Liabilities.
3.4 No Other Representations. Except as set forth in this Article III, the
Company is making no representations and warranties, it being understood and
agreed that the Company (a) has no current financial information available, and
(b) is delinquent in its filings with the Securities and Exchange Commission and
accordingly, no representation is given as to if and when the Company's capital
stock may be publicly traded.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WIRELESS
Wireless represents and warrants to the Company that:
4.1 Due Organization and Qualification; Due Authorization.
(a) Wireless is a corporation duly organized, validly existing and in good
standing under the laws of Texas, with full power and authority to own, lease
and operate its business and properties and to carry on its business in the
places and in the manner as presently conducted or proposed to be conducted.
(b)Wireless has requisite power and authority to execute and deliver this
Agreement, and to consummate the transactions contemplated hereby. Wireless has
taken all action necessary for the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, and this Agreement
constitutes the valid and binding obligation of Wireless, enforceable against
Wireless in accordance with its terms, except as may be affected by bankruptcy,
insolvency, moratoria or other similar laws affecting the enforcement of
creditors' rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
4.2 No Conflicts or Defaults. The execution and delivery of this Agreement
by and the consummation of the transactions contemplated hereby do not and shall
not (a) contravene the organizational documents of Wireless, or (b) with or
without the giving of notice or the passage of time, (i) violate, conflict with,
or result in a breach of, or a default or loss of rights under, any material
covenant, agreement, mortgage, indenture, lease, instrument, permit or license
to which Wireless is a party or by which Wireless or any of their respective
assets are bound, or any judgment, order or decree, or any law, rule or
regulation to which Wireless, the Shareholder, or any of their respective assets
are subject, (ii) result in the creation of, or give any party the right to
create, any lien upon any of the assets of Wireless.
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4.3 Capitalization. All of the Wireless Shares are, and when transferred in
accordance with the terms hereof, will be, duly authorized, validly issued,
fully paid and nonassessable, and have not been or will not be transferred in
violation of any rights of third parties. The Wireless Shares are not subject to
any preemptive or subscription right, any voting trust agreement or other
contract, agreement, arrangement, option, warrant, call, commitment or other
right of any character obligating or entitling Wireless to issue, sell, redeem
or repurchase any of its securities, and there is no outstanding security of any
kind convertible into or exchangeable for shares.
4.4 Financial Statements. Schedule 4.4 contains copies of the audited
balance sheet of Wireless as of December 31, 2002 and the related Statement of
Operations, Stockholders' Equity and Cash Flows for the period then ended (the
"Wireless Financial Statements"). The Wireless Financial Statements present
fairly the financial position of Wireless as of the date and for the period
indicated.
4.5 Further Financial Matters. Except as set forth on Schedule 4.4,
Wireless has no material liabilities or obligations which are required to be
reflected or reserved in a balance sheet or the notes thereto under generally
accepted accounting principles, but which are not reflected in the Wireless
Financial Statements.
4.6 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried without the intervention of
any Person in such a manner as to give rise to any valid claim by any Person for
a finder's fee, brokerage commission or similar payment.
ARTICLE V
COVENANTS OF WIRELESS
Between the date of this Agreement and the Closing Date:
5.1 Consents of the Wireless Shareholders. Promptly after the date hereof,
Wireless will take all action necessary in accordance with its Articles of
Incorporation and by-laws to solicit consents from the Wireless shareholders for
the adoption and approval of this Agreement and approval of the Merger. Wireless
will use its reasonable efforts to solicit from its shareholders consents in
favor of the adoption and approval of this Agreement and the approval of the
Merger and will take all other action necessary or advisable to secure the
consent of its shareholders required by the BCA to obtain such approvals.
5.2 State Statutes. Wireless and its Board of Directors shall, if any state
takeover statute or similar law is or becomes applicable to the Merger, this
Agreement or any of the transactions contemplated by this Agreement, use all
reasonable efforts to ensure that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise to minimize the effect of
such statute or regulation on the Merger, this Agreement and the transactions
contemplated hereby.
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ARTICLE VI
DELIVERIES
6.1 Items to Be Delivered to Wireless Prior to or at Closing by the
Company.
(a) board of director and shareholder meetings in possession of Xxxxxxxxxx;
(b) all financial information and tax returns in possession of Xxxxxxxxxx;
(c) letters of resignation from the Company's current officers and
directors to be effective upon Closing and after the appointments described in
this section;
(d) instructions for the issuance of certificates representing 16,000,000
Company Shares issued in the denominations as set forth opposite the respective
names as designated by Wireless on or before the Closing, duly authorized,
validly issued, fully paid for and non-assessable;
6.2 Items to Be Delivered to the Company Prior to or at Closing by
Wireless.
(a) copies of board, and if applicable, shareholder resolutions approving
this transaction and authorizing the issuances of the shares hereto; and
(b) designation of new directors.
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of the parties under this Agreement shall be and are
subject to fulfillment, prior to or at the Closing, of each of the following
conditions:
(a) That each of the representations and warranties of the parties
contained herein shall be true and correct at the time of the Closing Date as if
such representations and warranties were made at such time.
(b) That the parties shall have performed or complied with all agreements,
terms and conditions required by this Agreement to be performed or complied with
by them prior to or at the time of the Closing.
(c) Wireless shall have paid (a) all of the costs and expenses of the
Company associated with the transactions contemplated by this Agreement,
including the legal fees of Loeb & Loeb LLP and (b) Xxxxxx Xxxxxxxxxx,
("Xxxxxxxxxx") the amount of $20,000;
(d) MTE and the Company shall have entered into an Asset Purchase Agreement
so that immediately after the Closing the Company shall transfer to MTE all of
equity interest in the Subsidiary in consideration for the cancellation of the
MTE Shares and MTE Warrants and the cancellation of all sums owed by the Company
to MTE and the Subsidiary. All such transfers and assignments shall be in form
and substance reasonably satisfactory to Wireless and its counsel.
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(e) MTE shall have entered into an option agreement with R. Xxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxxxx pursuant to which
MTE shall have granted to each optionee an option to acquire One Million shares
of the Company's Common Stock at an aggregate exercise price of $10.00 per
optionee to be exercised at any time between the period commencing 70 days
following the Closing and ending 120 days following the Closing.
(f) The Company shall have issued or provided irrevocable instructions to
the Company's transfer agent to issue (a) 448,204 shares of the Company's Common
stock to Xxxxxxxxxx; and (b) 1,125,000 shares of the Company's Common Stock to
Xxxx Xxxxxxxx and/or his designees.
ARTICLE VIII
NO PUBLIC DISCLOSURE
Without the prior written consent of the others, none of the Company, or
Wireless will, and will each cause their respective representatives not to, make
any release to the press or other public disclosure with respect to either the
fact that discussions or negotiations have taken place concerning the
transactions contemplated by this Agreement, the existence or contents of this
Agreement or any prior correspondence relating to this transactions contemplated
by this Agreement, except for such public disclosure as may be necessary, in the
written opinion of outside counsel (reasonably satisfactory to the other
parties) for the party proposing to make the disclosure not to be in violation
of or default under any applicable law, regulation or governmental order. If
either party proposes to make any disclosure based upon such an opinion, that
party will deliver a copy of such opinion to the other party, together with the
text of the proposed disclosure, as far in advance of its disclosure as is
practicable, and will in good faith consult with and consider the suggestions of
the other party concerning the nature and scope of the information it proposes
to disclose.
ARTICLE IX
CONFIDENTIAL INFORMATION
Confidential Information. In connection with the negotiation of this
Agreement and the consummation of the transactions contemplated hereby, each
party hereto will have access to data and confidential information relating to
the other party. Each party hereto shall treat such data and information as
confidential, preserve the confidentiality thereof and not duplicate or use such
data or information, except in connection with the transactions contemplated
hereby, and in the event of the termination of this Agreement for any reason
whatsoever, each party hereto shall return to the other all documents, work
papers and other material (including all copies thereof) obtained in connection
with the transactions contemplated hereby and will use reasonable efforts,
including instructing its employees who have had access to such information, to
keep confidential and not to use any such data or information; provided,
however, that such obligations shall not apply to any data and information (i)
which at the time of disclosure, is available publicly, (ii) which, after
disclosure, becomes available publicly through no fault of the receiving party,
(iii) which the receiving party knew or to which the receiving party had access
prior to disclosure by the disclosing party, (iv) which is required by law,
regulation or exchange
14
rule, or in connection with legal process, to be disclosed, or (v) which is
disclosed by a receiving party to its attorneys or accountants, who shall
respect the above restrictions.
ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated at any time before or,
at Closing, by:
(a) The mutual agreement of the constituent parties;
(b) Any party if:
(i) provision of this Agreement applicable to a party shall be materially
untrue or fail to be accomplished;
(ii) Any legal proceeding shall have been instituted or shall be imminently
threatening to delay, restrain or prevent the consummation of this Agreement; or
(iii) If by September 30, 2003, the conditions precedents to the Closing
are not satisfied or waived.
ARTICLE XI
MISCELLANEOUS
11.1 Survival of Representations, Warranties and Agreements. All
representations and warranties and statements made by a party to in this
Agreement or in any document or certificate delivered pursuant hereto shall not
survive the Closing Date.
11.2 Access to Books and Records. During the course of this transaction
through Closing, each party agrees to make available for inspection all
corporate books, records and assets, and otherwise afford to each other and
their respective representatives, reasonable access to all documentation and
other information concerning the business, financial and legal conditions of
each other for the purpose of conducting a due diligence investigation thereof.
Such due diligence investigation shall be for the purpose of satisfying each
party as to the business, financial and legal condition of each other for the
purpose of determining the desirability of consummating the proposed
transaction. The Parties further agree to keep confidential and not use for
their own benefit, except in accordance with this Agreement any information or
documentation obtained in connection with any such investigation.
11.3 Further Assurances. If, at any time after the Closing, the parties
shall consider or be advised that any further deeds, assignments or assurances
in law or that any other things are necessary, desirable or proper to complete
the merger in accordance with the terms of this agreement or to vest, perfect or
confirm, of record or otherwise, the title to any property or rights of the
parties hereto, the Parties agree that their proper officers and directors shall
execute and deliver all such proper deeds, assignments and assurances in law and
do all things necessary, desirable or proper to vest, perfect or confirm title
to such property or rights and otherwise to
15
carry out the purpose of this Agreement, and that the proper officers and
directors the parties are fully authorized to take any and all such action.
11.4 Notice. All communications, notices, requests, consents or demands
given or required under this Agreement shall be in writing and shall be deemed
to have been duly given when delivered to, or received by prepaid registered or
certified mail or recognized overnight courier addressed to, or upon receipt of
a facsimile sent to, the party for whom intended, as follows, or to such other
address or facsimile number as may be furnished by such party by notice in the
manner provided herein:
If to the Company:
c/o Xxxxxx Xxxxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
cc: Xxxxx X. Xxxxxxxx, Esq.
Loeb & Loeb LLP
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Wireless:
c/o Xxxxx Xxxxxx, Esq.
000 Xxxxxxxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Or such other address as any such party may notify to the
other parties to the Agreement by not less than three (3)
Business Day's notice.
11.5 Entire Agreement. This Agreement and any instruments and agreements to
be executed pursuant to this Agreement, sets forth the entire understanding of
the parties hereto with respect to its subject matter, merges and supersedes all
prior and contemporaneous understandings with respect to its subject matter and
may not be waived or modified, in whole or in part, except by a writing signed
by each of the parties hereto. No waiver of any provision of this Agreement in
any instance shall be deemed to be a waiver of the same or any other provision
in any other instance. Failure of any party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such provision.
11.6 Successors and Assigns. This Agreement shall be binding upon,
enforceable against and inure to the benefit of, the parties hereto and their
respective heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to
16
confer any right, remedy or benefit upon any other person. This Agreement may
not be assigned by any party hereto except with the prior written consent of the
other parties, which consent shall not be unreasonably withheld.
11.7 Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Delaware are applicable to
agreements made and fully to be performed in such state, without giving effect
to conflicts of law principles.
11.8 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11.9 Construction. Headings contained in this Agreement are for convenience
only and shall not be used in the interpretation of this Agreement. References
herein to Articles, Sections and Exhibits are to the articles, sections and
exhibits, respectively, of this Agreement. The Disclosure Schedules are hereby
incorporated herein by reference and made a part of this Agreement. As used
herein, the singular includes the plural, and the masculine, feminine and neuter
gender each includes the others where the context so indicates. 1.3
11.10 Severability. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, this Agreement
shall be interpreted and enforceable as if such provision were severed or
limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first set forth above.
FREMONT CORPORATION
By:
--------------------------------------------------
WIRELESS FRONTIER INTERNET, INC.
By:
--------------------------------------------------
NETWORKER SYSTEMS, INC.
By:
--------------------------------------------------
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Schedule 3.1(b)
Winfill Holdings International Limited a British Virgin Islands Company
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Schedule 3.3
CT Corporation (corporate agent) - $265.00
Computershare Trust Company, Inc. (transfer fee) - $1,897.00
The Nasdaq Stock Market, Inc. (1999 listing fee; Fremont was delisted in early
1999) - $4,000.00
Xxxxxxx Xxxxxxxx Investment Co. (rent) - $118.50
State of Delaware (franchise tax)
Final order and judgement dated September 13, 1995 against Fremont Corporation
in the United States District Court for the Southern District of New York in
favor of C.R.A. Realty Corporation - $2,850.00 (received by Fremont in March
2001).
Claim of Xxxxxxx Pintaura dated November 8, 1999 for injuries sustain on August
26, 1999 while riding a Diamondback Viper; claim asserted by law firm
Schondebare & Xxxxx (received by Fremont in November 1999); amount unknown.
Claim of Xxxx X. Xxxxxxxxxxx, the Chapter 7 Trustee of the estate of CSA, Inc.,
dated August 10,2000, for pre-petition payments made to Fogance Industries Ltd.,
a Hong Kong company, aggregating $652,721.00. Fogance is a subsidiary of South
China Bicycles Co. Ltd., a PRC company which is a subsidiary of South China
Bycycles Winfill Limited, a Sino-foreign joint venture, which is a subsidiary of
Winfill Holdings International Limited, a BVI corporation, which is a subsidiary
of Fremont.
Claim of Xxxxxxxx Xxxx dated August 1, 1997, for 108,000 shares of common stock,
to be registered on Form S-8 (never issued or registered).
Claim of Xxxxx Song dated August 1, 1997, for 12,000 shares of common stock, to
be registered on Form S-8 (never issued or registered).
Claim of Xxxx Xxxxxxx under a six month consulting contract dated August 21,
1998 for unpaid consulting fees of $12,000, warrants to purchase 20,000 shares
of common stock exercisable for three years at $1.50 per share, to be registered
on Form S-8 (never issued or registered).
Claim of Champ Pacific Capital Limited (Xxxxx Xxxx) under an 18 month consulting
contract effective October 1, 1996 for $100,000.
The following liabilities that need to be settled as a contribution to capital:
Due to MTE: $27,380. Due to subsidiaries and affiliates (Winfill Holdings
International Limited, South China Bicycles Winfill Limited, South China
Bicycles Co. Ltd., and Fogance Industries Limited, among others): $159,171.
Liability to Xxxxxx Xxxxxxxxxx ($111,250 as of December 31, 2001).
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