EXHIBIT 10.5
AMENDMENT TO NORSTAR AGREEMENTS
THIS AGREEMENT is made this 20 day of September, 2002, but effective
as of January 2, 2002, by and between NORSTAR COMMUNICATIONS, INC., a
California corporation ("Norstar") and UNIVERSAL BROADBAND
COMMUNICATIONS, INC., a Nevada corporation ("UBC").
WHEREAS, on November 30, 2001, Norstar and UBC executed that certain
Asset Purchase and Sale Agreement (the "First Norstar Agreement"), which
was subsequently revised on January 22, 2002, but had an effective date
of January 2, 2002, to which reference is hereby made and incorporated
herein for all purposes; and
WHEREAS, on Xxxxx 00, 0000, Xxxxxxx and UBC executed that certain
Asset Purchase and Sale Agreement (the "Second Norstar Agreement"), to
which reference is hereby made and incorporated herein for all purposes;
and
WHEREAS, the First Norstar Agreement and the Second Norstar
Agreement were essentially a single transaction and they are hereinafter
collectively referred to as the "Norstar Asset Purchase Agreement";
NOW, THEREFORE, in consideration of the foregoing and the following
mutual covenants and agreements, the parties hereto do hereby agree as
follows:
1. AMENDMENT TO THE NORSTAR ASSET PURCHASE AGREEMENT. The Norstar
Asset Purchase Agreement is hereby amended to reflect the following:
a. The Second Norstar Agreement will be considered to be a
continuation of the First Norstar Agreement. As a result, the net value
of the Norstar Asset Purchase Agreement is $1,316,979.41, and all of the
shares of the UBC common stock given in exchange for the assets described
in the Norstar Asset Purchase Agreement should be valued at $0.21 per
share, pursuant to the Share Price Analysis more fully described in
SCHEDULE A attached hereto and incorporated herein by reference for all
purposes.
b. In the First Norstar Agreement, the consideration given by
Norstar is hereby deemed to have been assets valued at $778,048.76, which
included a promissory note from Norstar in favor of UBC in the amount of
$77,309.87, more fully described in SCHEDULE B attached hereto and
incorporated herein by reference for all purposes. The promissory note
was given by Norstar to UBC in payment for certain expenses paid by UBC
on Norstar's behalf. The consideration in the First Norstar Agreement
given by UBC is hereby deemed to have included (i) the assumption by UBC
of Norstar liabilities in the amount of $104,779.98 as of January 2,
2002, (ii) the issuance by UBC to Norstar of 1,711,933 shares of UBC
common stock valued at $368,739.74, or $0.21 per share as described in
SCHEDULE A attached hereto, (iii) a promissory note issued by UBC in
favor of Norstar in the amount of $46,545.27, more fully described in
SCHEDULE C attached hereto and incorporated herein by reference for all
purposes, which promissory note is to be payable only out of future cash
collections of the direct billing base acquired under the First Norstar
Agreement, and (iv) a promissory note issued by UBC in favor
1
of Norstar in the amount of $257,983.77, more fully described in SCHEDULE
D attached hereto and incorporated herein by reference for all purposes,
which promissory note is to be payable only in the common stock of UBC
valued at $0.21 per share as described in SCHEDULE A attached hereto.
c. In the Second Norstar Agreement, the consideration given
by Norstar is hereby deemed to have been assets valued at $665,260.63.
The consideration given by UBC is hereby deemed to have included the
assumption by UBC of Norstar liabilities in the amount of $21,550.00 as
of March 11, 2002, the issuance by UBC to Norstar of 4,186,260 shares of
UBC common stock valued at $901,694.40, or $0.21 per share as described
in SCHEDULE A attached hereto, and the forgiveness of a promissory note
issued by UBC in favor of Norstar in the amount of $257,983.77 as
described in SCHEDULE D attached hereto and the related accrued interest
of $1,749.04.
d. Certain assets acquired pursuant to the Second Norstar
Agreement, which assets are more fully described in SCHEDULE E attached
hereto and incorporated herein by reference for all purposes, will be
deemed to have been acquired for valuation purposes pursuant to the First
Norstar Agreement.
2. RATIFICATION. Except as modified hereby, Norstar and UBC do
hereby ratify, republish, and reconfirm the Norstar Asset Purchase
Agreement.
3. ATTORNEY'S FEES. In the event that it should become necessary
for any party entitled hereunder to bring suit against any other party to
this Agreement for enforcement of the covenants herein contained, the
parties hereby covenant and agree that the party who is found to be in
violation of said covenants shall also be liable for all reasonable
attorney's fees and costs of court incurred by the other parties hereto.
4. BENEFIT. All the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the
parties hereto, and their respective successors and permitted assigns.
5. CONSTRUCTION. Words of any gender used in this Agreement shall
be held and construed to include any other gender, and words in the
singular number shall be held to include the plural, and vice versa,
unless the context requires otherwise. In addition, the pronouns used in
this Agreement shall be understood and construed to apply whether the
party referred to is an individual, partnership, joint venture,
corporation or an individual or individuals doing business under a firm
or trade name, and the masculine, feminine and neuter pronouns shall each
include the other and may be used interchangeably with the same meaning.
6. WAIVER. No course of dealing on the part of any party hereto or
its agents, or any failure or delay by any such party with respect to
exercising any right, power or privilege of such party under this
Agreement or any instrument referred to herein shall operate as a waiver
thereof, and any single or partial exercise of any such right, power or
privilege shall not preclude any later exercise thereof or any exercise
of any other right, power or privilege hereunder or thereunder.
2
7. CUMULATIVE RIGHTS. The rights and remedies of any party under
this Agreement and the instruments executed or to be executed in
connection herewith, or any of them, shall be cumulative and the exercise
or partial exercise of any such right or remedy shall not preclude the
exercise of any other right or remedy.
8. INVALIDITY. In the event any one or more of the provisions
contained in this Agreement or in any instrument referred to herein or
executed in connection herewith shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect the other provisions of
this Agreement or any such other instrument.
9. HEADINGS. The headings used in this Agreement are for
convenience and reference only and in no way define, limit, simplify or
describe the scope or intent of this Agreement, and in no way effect or
constitute a part of this Agreement.
10. EXCUSABLE DELAY. None of the parties hereto shall be obligated
to perform and none shall be deemed to be in default hereunder, if the
performance of a non-monetary obligation is prevented by the occurrence
of any of the following, other than as the result of the financial
inability of the party obligated to perform: acts of God, strikes,
lock-outs, other industrial disturbances, acts of a public enemy,
terrorists, wars or war-like action (whether actual, impending or
expected and whether de jure or de facto), arrest or other restraint of
governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any
government of public authority, nuclear reaction or radiation,
radioactive contamination or other causes, whether of the kind herein
enumerated, or otherwise, that are not reasonably within the control of
the party claiming the right to delay performance on account of such
occurrence.
11. NO THIRD-PARTY BENEFICIARY. Any agreement to pay an amount and
any assumption of liability herein contained, express or implied, shall
be only for the benefit of the undersigned parties and their respective
successors and permitted assigns (as herein expressly permitted), and
such agreements and assumptions shall not inure to the benefit of the
obligees or any other party, whomsoever, it being the intention of the
parties hereto that no one shall be or be deemed to be a third-party
beneficiary of this Agreement.
12. MULTIPLE COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
13. LAW GOVERNING. This Agreement shall be construed and governed
by the laws of the State of California, and all obligations hereunder
shall be deemed performable in Orange County, California.
14. PERFECTION OF TITLE. The parties hereto shall do all other acts
and things that may be reasonably necessary or proper, fully or more
fully, to evidence, complete or perfect this Agreement, and to carry out
the intent of this Agreement.
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15. ENTIRE AGREEMENT. This instrument contains the entire
Agreement of the parties and may not be changed orally, but only by
an instrument in writing signed by the party against whom enforcement
of any waiver, change, modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.
NORSTAR COMMUNICATIONS, INC.
By /s/ XXXX XXXXX
-----------------------------
Xxxx Xxxxx, President
UNIVERSAL BROADBAND
COMMUNICATIONS, INC.
By /s/ XXXX XXXXX
-----------------------------
Xxxx Xxxxx, President
Attachments:
-----------
Schedule A - Share Price Analysis
Schedule B - The Norstar Promissory Note
Schedule C - The First UBC Promissory Note
Schedule D - The Second UBC Promissory Note
Schedule E - Certain Assets and Liabilities
4
Schedule A
Share Price Analysis
Description
-------------------------------------------------------------------------
Total NBV of Asset Acquired on 01/02/02 778,048.76
Total NBV of Asset Acquired on 03/11/02 665,260.63
Total Liabilities assumed (126,329.98)
=============
NET VALUE OF TRANSACTION $1,316,979.41
LESS NOTE ISSUED (46,545.27)
-------------
BASIS OF STOCK ISSUED $1,270,434.14
=============
Share issued 1/02/02 1,711,933
Share issued 3/11/02 4,186,260
-------------
Total Shares issued 5,898,193
=============
-------------
Per share value of transaction $0.2153938
=============
Page 1 of 1
Schedule B
PROMISSORY NOTE
$77,309.87 January 2, 2002
After date, without grace, for value received, NORSTAR
COMMUNICATIONS, INC., a California corporation having its principal
office and place of business in Orange County, California (the "Maker")
hereby promises to pay to the order of UNIVERSAL BROADBAND
COMMUNICATIONS, INC., a Nevada corporation having its principal office
and place of business in Orange County, California (the "Payee") the
original principal amount of SEVENTY-SEVEN THOUSAND THREE HUNDRED NINE
AND 87/100 DOLLARS ($77,309.87), with interest at the rate of 10 percent
per annum. All payments hereunder are payable in lawful money of the
United States of America at 00000 Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx,
Xxxxxxxxxx 00000, or such other place as the Payee may designate in
writing to the Maker.
The principal and interest of this Note shall be due and payable on
or before August 31, 2002.
This Note may be prepaid in whole or in part at any time without
premium or penalty by the Maker. Prepayments shall be applied first to
the principal. Any interest on any prepaid principal shall immediately
cease to accrue.
Except as provided herein, the Maker and each surety, endorser, and
guarantor waives all demands for payment, presentations for payment,
notices of intention to accelerate maturity, notices of acceleration of
maturity, protests, notices of protest, grace, and diligence in the
collection of this Note, and in filing suit hereon, and agrees that its
liability for the payment hereof shall not be affected or impaired by any
release or change in the security or by any extension or extensions of
time of payment.
In the event default is made in the payment of any part of the
principal or interest of this Note as the same becomes due and payable,
and such default shall continue for a period of 10 days following written
notice thereof given by the Payee or any holder hereof, the legal holder
hereof has the option, without notice or demand, to declare the unpaid
principal of this Note at once due and payable.
The undersigned hereby agrees to pay all expenses incurred by the
Payee, including reasonable attorney's fees, all of which shall become a
part of the principal hereof, if this Note is placed in the hands of an
attorney for collection, or if it is collected by suit or through any
probate, bankruptcy or any other legal proceedings.
If this Note is not paid at maturity, however maturity may be
brought about, all principal due on the date of such maturity shall bear
interest from the date of such maturity at the maximum contract rate of
interest which the Payee may charge the Maker under applicable law.
1
Any check, draft, money order or other instrument given in payment
of all or any portion of this Note may be accepted by the Payee or any
other holder hereof and handled in collection in the customary manner,
but the same shall not constitute payment hereunder or diminish any
rights of the Payee or any other holder hereof, except to the extent that
actual cash proceeds of such instrument are unconditionally received by
the Payee or any other holder hereof and applied to the indebtedness as
herein provided.
This Note shall be governed by and construed in accordance with the
laws of the State of California and applicable federal law.
NORSTAR COMMUNICATIONS, INC.
By /s/ XXXX XXXXX
------------------------------
Xxxx Xxxxx, President
2
Schedule C
PROMISSORY NOTE
$46,545.27 January 2, 2002
After date, without grace, for value received, UNIVERSAL BROADBAND
COMMUNICATIONS, INC., a Nevada corporation having its principal office
and place of business in Orange County, California (the "Maker") hereby
promises to pay to the order of NORSTAR COMMUNICATIONS, INC., a
California corporation having its principal office and place of business
in Orange County, California (the "Payee") the original principal amount
of FORTY-SIX THOUSAND FIVE HUNDRED FORTY-FIVE AND 27/100 DOLLARS
($46,545.27), with interest at the rate of 10 percent per annum. All
payments hereunder are payable as hereinafter provided in lawful money of
the United States of America at 00000 Xxx Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxxxxxxx 00000, or such other place as the Payee may designate
in writing to the Maker.
The principal and interest of this Note shall be due and payable on
or before August 31, 2002. Provided, however, notwithstanding anything
herein contained to the contrary, all payments of principal and interest
due on this Note shall be payable only of future cash collections of the
direct billing base acquired under that certain Asset Purchase and Sale
Agreement executed on November 30, 2001 by the Maker and the Payee, which
was subsequently revised on January 22, 2002, but had an effective date
of January 2, 2002, to which reference is hereby made and incorporated
herein for all purposes.
This Note may be prepaid in whole or in part at any time without
premium or penalty by the Maker. Prepayments shall be applied first to
the principal. Any interest on any prepaid principal shall immediately
cease to accrue.
Except as provided herein, the Maker and each surety, endorser, and
guarantor waives all demands for payment, presentations for payment,
notices of intention to accelerate maturity, notices of acceleration of
maturity, protests, notices of protest, grace, and diligence in the
collection of this Note, and in filing suit hereon, and agrees that its
liability for the payment hereof shall not be affected or impaired by any
release or change in the security or by any extension or extensions of
time of payment.
In the event default is made in the payment of any part of the
principal or interest of this Note as the same becomes due and payable,
and such default shall continue for a period of 10 days following written
notice thereof given by the Payee or any holder hereof, the legal holder
hereof has the option, without notice or demand, to declare the unpaid
principal of this Note at once due and payable.
The undersigned hereby agrees to pay all expenses incurred by the
Payee, including reasonable attorney's fees, all of which shall become a
part of the principal hereof, if this Note is placed in the hands of an
attorney for collection, or if it is collected by suit or through any
probate, bankruptcy or any other legal proceedings.
1
If this Note is not paid at maturity, however maturity may be
brought about, all principal due on the date of such maturity shall bear
interest from the date of such maturity at the maximum contract rate of
interest which the Payee may charge the Maker under applicable law.
Any check, draft, money order or other instrument given in payment
of all or any portion of this Note may be accepted by the Payee or any
other holder hereof and handled in collection in the customary manner,
but the same shall not constitute payment hereunder or diminish any
rights of the Payee or any other holder hereof, except to the extent that
actual cash proceeds of such instrument are unconditionally received by
the Payee or any other holder hereof and applied to the indebtedness as
herein provided.
This Note shall be governed by and construed in accordance with the
laws of the State of California and applicable federal law.
UNIVERSAL BROADBAND
COMMUNICATIONS, INC.
By /s/ XXXX XXXXX
------------------------------
Xxxx Xxxxx, President
Attachment:
-----------
Schedule A - Share Price Analysis
2
Schedule A
Share Price Analysis
Description
-------------------------------------------------------------------------
Total NBV of Asset Acquired on 01/02/02 778,048.76
Total NBV of Asset Acquired on 03/11/02 665,260.63
Total Liabilities assumed (126,329.98)
=============
NET VALUE OF TRANSACTION $1,316,979.41
LESS NOTE ISSUED (46,545.27)
-------------
BASIS OF STOCK ISSUED $1,270,434.14
=============
Share issued 1/02/02 1,711,933
Share issued 3/11/02 4,186,260
-------------
Total Shares issued 5,898,193
=============
-------------
Per share value of transaction $0.2153938
=============
Page 1 of 1
Schedule D
PROMISSORY NOTE
$257,983.77 March 11, 2002
After date, without grace, for value received, UNIVERSAL BROADBAND
COMMUNICATIONS, INC., a Nevada corporation having its principal office
and place of business in Orange County, California (the "Maker") hereby
promises to pay to the order of NORSTAR COMMUNICATIONS, INC., a
California corporation having its principal office and place of business
in Orange County, California (the "Payee") the original principal amount
of TWO HUNDRED FIFTY-SEVEN THOUSAND NINE HUNDRED EIGHTY-THREE AND 77/100
DOLLARS ($257,983.77), with interest at the rate of 10 percent per annum.
All payments hereunder are payable as hereinafter provided at 00000 Xxx
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, or such other place
as the Payee may designate in writing to the Maker.
The principal and interest of this Note shall be due and payable on
or before March 31, 2002. Provided, however, notwithstanding anything
herein contained to the contrary, all payments of principal and interest
due on this Note shall be payable only in the common stock of the Maker
valued at $0.21 per share, pursuant to Schedule A, attached hereto and
incorporated herein by reference for all purposes.
This Note may be prepaid in whole or in part at any time without
premium or penalty by the Maker. Prepayments shall be applied first to
the principal. Any interest on any prepaid principal shall immediately
cease to accrue.
Except as provided herein, the Maker and each surety, endorser, and
guarantor waives all demands for payment, presentations for payment,
notices of intention to accelerate maturity, notices of acceleration of
maturity, protests, notices of protest, grace, and diligence in the
collection of this Note, and in filing suit hereon, and agrees that its
liability for the payment hereof shall not be affected or impaired by any
release or change in the security or by any extension or extensions of
time of payment.
In the event default is made in the payment of any part of the
principal or interest of this Note as the same becomes due and payable,
and such default shall continue for a period of 10 days following written
notice thereof given by the Payee or any holder hereof, the legal holder
hereof has the option, without notice or demand, to declare the unpaid
principal of this Note at once due and payable.
The undersigned hereby agrees to pay all expenses incurred by the
Payee, including reasonable attorney's fees, all of which shall become a
part of the principal hereof, if this Note is placed in the hands of an
attorney for collection, or if it is collected by suit or through any
probate, bankruptcy or any other legal proceedings.
1
If this Note is not paid at maturity, however maturity may be
brought about, all principal due on the date of such maturity shall bear
interest from the date of such maturity at the maximum contract rate of
interest which the Payee may charge the Maker under applicable law.
Any check, draft, money order or other instrument given in payment
of all or any portion of this Note may be accepted by the Payee or any
other holder hereof and handled in collection in the customary manner,
but the same shall not constitute payment hereunder or diminish any
rights of the Payee or any other holder hereof, except to the extent that
actual cash proceeds of such instrument are unconditionally received by
the Payee or any other holder hereof and applied to the indebtedness as
herein provided.
This Note shall be governed by and construed in accordance with the
laws of the State of California and applicable federal law.
UNIVERSAL BROADBAND
COMMUNICATIONS, INC.
By /s/ XXXX XXXXX
------------------------------
Xxxx Xxxxx, President
Attachment:
-----------
Schedule A - Share Price Analysis
2
Schedule A
Share Price Analysis
Description
-------------------------------------------------------------------------
Total NBV of Asset Acquired on 01/02/02 778,048.76
Total NBV of Asset Acquired on 03/11/02 665,260.63
Total Liabilities assumed (126,329.98)
=============
NET VALUE OF TRANSACTION $1,316,979.41
LESS NOTE ISSUED (46,545.27)
-------------
BASIS OF STOCK ISSUED $1,270,434.14
=============
Share issued 1/02/02 1,711,933
Share issued 3/11/02 4,186,260
-------------
Total Shares issued 5,898,193
=============
-------------
Per share value of transaction $0.2153938
=============
Page 1 of 1
Schedule E
Certain Assets & Liabilities
Net Book
Description Value
-----------------------------------------------------------------------
1 Net Accounts Receivable - Direct
Gross Receivables 108,063.00
Less Reserve (67,681.48)
-----------
Net A/R - Direct 40,381.52
2 Customer Base Direct (Net) 19,516.34
3 FFE Acquired 169,270.36
4 Equipment and Computers 108,330.16
5 Software Capitalization 104,620.81
6 Leasehold improvements 100,162.63
7 Deposits 99,650.75
8 Prepaid expenses 13,688.00
9 Telephone equipment 27,000.00
10 Expense paid on behalf of UBC 18,118.32
Cash receipts retained by NCI
Expense to be paid on behalf of UBC
11 Net Due from Norstar 77,309.87
-------------
Total Assets Acquired on 01/02/02 778,048.76
=============
Page 1 of 3
Schedule E
Certain Assets & Liabilities
Net Book
Description Value
-----------------------------------------------------------------------
1 Net Accounts Receivable - LEC
Net Billed as of 3/10/02 453,245.45
Net Unbilled as of 3/10/02 60,447.28
-----------
Net A/R - LEC 513,692.73
2 Customer Base LEC (Net) 151,567.90
3 HBS Holdback/Receivable 38,971.00
(Less 100% Reserve) (38,971.00)
4 HBS Reserve for receivables 197,029.59
(Less 100% reserve) (197,029.59)
-------------
Asset Acquired 665,260.63
=============
Page 2 of 3
Schedule E
Certain Assets & Liabilities
Creditor Description of Assets
-------------------------------------------------------------------------
1 Pawnee Leasing Leased furniture 21,550.00
2 Epic Leasing Leased Furniture 43,849.50
3 VenServ Leased network equipment 60,930.48
4
-------------
126,329.98
=============
Page 3 of 3
