May 8, 2000
Xx. Xxxx Xxxxxx
President, 1st Universe Internet
0 Xxxx Xxxxx #000
Xxxxxx, XX 00000
Re: Purchase of 1st Universe Assets
Dear Xxxx:
This is our Letter of Intent regarding Worldwide Wireless Network,
Inc.'s ("WWWN") purchase of the assets of 1st Universe Internet
("FSUI"). If our terms are acceptable, we will draft a formal
Purchase Agreement for signature by both parties.
1. Owner: We assume that you are the sole owner ("Owner") of FSUI.
2. Asset Sale: WWWN and FSUI will transact an "asset sale". WWWN will
purchase all the assets of FSUI, which will include, but are not
limited to, all revenue-producing elements of FSUI, inclusive of its
customer base as of the date of the purchase agreement, all business
conducted with said base, its customer and prospect list, all accounts
receivable, its web hosting business, and company equipment.
3. Liabilities: WWWN will not be responsible for any liabilities of FSUI
created prior to the Closing of the Purchase Agreement and assumes
FSUI has no pending or current lawsuits, and no outstanding issues with
the IRS or other governmental agency .
4. FSUI Employees: WWWN will work with you to determine what employees
of FSUI will be hired by WWWN and what their positions and compensation
will be, but WWWN will not assume any prior obligations FSUI might have
with its current or past employees or agents.
5. Purchase Price: WWWN will purchase the assets of FSUI for 200,000
shares of its common stock, which will have "piggyback" registration
rights and be restricted as follows:
a) 2,500 shares may be sold every 30 days after Closing has occurred
and their free trade status is in compliance with SEC regulations,
with a minimum of 30 days between the sale of each 2,500 shares.
b) An additional 1,000 shares (i.e., a total of 3,500 shares) may
be sold any time the immediate preceeding average 30 day volume of
WWWN stock is 50,000 shares or greater.
c) A maximum of 15,000 shares can be sold in any 30-day period
from the start of month 13 through month 24.
d) All of Owner's stock will be free trading at the
beginning of month 25.
Please note that the ability to sell any stock in this purchase
agreement is subject to SEC rules regarding the registration and
sale of stock. It is understood that this will take precedent
over any proposed disposition of stock in this offer.
6. Indemnification: Owner is responsible for any claims made
against FSUI for activities that occurred prior
to Closing that impact the assets purchased by WWWN. Owner
agrees to indemnify WWWN for any such action that affects
the assets purchased for a period of one year from Closing.
30,000 shares of the purchase will be held in a mutually
agreeable escrow account for one year for potential
indemnification, although if damages impacting what WWWN
has purchased exceeds the value of said escrow shares, Owner
is responsible for full indemnification to WWWN.
7. Audit: There will be an audit 45 days after Closing of FSUI's
entire customer base and their MRI plus other profit centers that
contributed to the "$25,000/month audit benchmark" which you
identified for accounts billed by FSUI, as well as FSUI customers
billed by WWWN. Should this combined monthly figure be less
than it was at Closing, the purchase price of 200,000 shares will
be reduced on a pro-rata percentage basis. For example, if the
combined figure at Closing is $40,000, but 45 days later is 10%
less (i.e., $36,000), the purchase price of 200,000 shares will
be adjusted downwards by 10% (i.e., to 180,000 shares). There will
be no upward adjustment made to the purchase price, and service
upgrades to those accounts will not be included in this calculation,
as that will be considered post-Closing, future business. Any atypical
WWWN support cost during the aforementioned 45 day period to keep
these customers active, including special offers or commitments
to future deeper discounts, will be assessed and factored into
the conclusions of the 45 day audit, with fair and reasonable
adjustments made accordingly. Conversely, accounts which FSUI
adds to its base during the audit period may be used as an offset
to cover potential shortfalls.
8. Non-Circumvent & Non-Compete: Owner understands that FSUI's
customer base and prospect list are part of the assets being
purchased by WWWN for valuable consideration, and also acknowledges
his familiarity with WWWN's overall business. Accordingly, Owner
promises not to solicit his customers or any WWWN
customers, directly or indirectly, or assist a third party in
soliciting any of these customers, for a period of 5
years from the date of Closing. Additionally, Owner agrees not
to solicit WWWN employees nor compete or consult against WWWN,
directly or indirectly, in any market WWWN is in or has advised
Owner it is expanding into, for a period of three years. These
markets include the entirety of Southern California, Santa
Xxxxxxx, Las Vegas, the San Francisco Bay area, inclusive of
Oakland, and Honolulu.
9. Due Diligence/Accounts Payable: FSUI will make its books
and documentation fully available to WWWN during its due diligence
period, which is targeted to be completed by May 8, 2000. Furthermore,
FSUI will bring its accounts payable current with WWWN prior to Closing.
10. Non-Solicitation Period: Recognizing that WWWN will be using
financial and human resources to engage in due diligence, FSUI
promises that it will not seek, solicit, or entertain discussions
with any other party regarding any sale or venture involving FSUI
during WWWN's due diligence period.
11. Closing Costs: WWWN will pay for the legal costs associated with
preparation of the final Purchase Agreement. Each party will be responsible
for any other costs they might incur involving this transaction.
12. Closing Date: Both parties will strive to make best efforts
to complete this transaction and Close by May 8,
2000.
13. Survivability: The Purchase Agreement will survive and its
terms & conditions will take precedent to and
remain in effect irrespective of any other arrangement
the Owner personally enters into with WWWN.
Read and agreed to on this _____ day of __________, 2000:
1st Universe Internet Worldwide Wireless Networks, Inc.
/s/ Xxxx Xxxxxx /s/ Xxxxxxx X. (Xxxxx) Bream
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Xxxx Xxxxxx Xxxxxxx X. (Xxxxx) Bream
President President & COO
