EX-2.1
UNITED XXXXXXX.XXX
00000 XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
000-000-0000
August 13, 2002
Mr. Xxxxx Xxxxxx
President
United Communications HUB Inc.
000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Dear Xxxxx:
This letter of intent sets forth the understanding of the principal terms upon
which United Communications HUB, Inc., ("UCHUB") proposes to effect a business
combination by entering into a Share Exchange and Plan of Merger Agreement
("Merger Agreement") with United Xxxxxxx.xxx ("United") whereby UCHUB shall
become a wholly-owned subsidiary of United following the Closing of the
transaction.
I. General Information
--------------------
UCHUB
-----
UCHUB is a privately held corporation incorporated under the laws of the state
of California. UCHUB has teamed up with municipalities, utility companies cable
companies, affinity groups and software companies to offer bundled services to
existing customers through UCHUB's unique technology represented as a Digital
Access Hub.
UCHUB is seeking additional financing to expand its operations domestically as
well as internationally with development underway to commence business activity
in various digital cities.
UNITED
------
United is a Nevada corporation. It is a publicly traded, fully reporting
company, trading symbol "UDTC" on the OTC: BB.
United has entered into a merger agreement with Quick Draw, Inc., a Nevada
corporation to acquire all of the stock of Quick Draw in a share exchange. The
merger is expected to be completed by August 31, 2002. Quick Draw has deployed
and currently operates, through its parent company, approximately 120 ATMs
across the United States under its operating banner Quick Draw ATM.
Approximately 10% of these ATMs are owned by Quick Draw. The balance are
managed for others.
II. Intent of the Parties
------------------------
1. The parties propose that the Business Combination shall be effected. It
is anticipated that UCHUB will merge with and into United. The result of the
Business Combination predicated on the timely performance of this agreement in
full, including and not limited to II,2,a, will result in the UCHUB shareholders
will collectively own 78% of the outstanding shares and the current
shareholders of United (including former shareholders of Quick Draw) will
collectively own 22% of the issued and outstanding shares of capital stock
immediately after the anticipated business combination. These percentages are
predicated on UCHUB contributing its company and United contributing its shell,
the Quick Draw ATM deal and $1 Million in funding for UCHUB.
Consummation of the Business Combination will be subject to conditions to be
contained in definitive agreements necessary to document the transactions
proposed in this letter (collectively, the "Definitive Agreements").
2. The terms and conditions of the proposed Business Combination are to be
contained in the Definitive Agreements, which will be satisfactory in all
respects, in form and substance, to the parties. It is anticipated that the
Definitive Agreements will, among other things, contain the following
provisions:
a. United to arrange for additional funding for UCHUB project in an amount
equal to not less than $1,000,000 (less commissions and fees if any). Which the
deal is predicated on upon a merged deal or funding 30 days hereafter, whichever
is first. Should United be unable to complete such in timely arrangements for
these funds to be invested, or that UCHUB funds the first million, then, at the
sole discretion of UCHUB, ownership as outlined in paragraph II-1 above shall be
represented so that UCHUB shareholders shall own 90% and United Trading
shareholders shall own 10%.
b. Include mutual representations, warranties and covenants customary in
transactions similar to those contemplated hereby, all of which representations
and warranties will terminate upon the consummation of the Business Combination;
c. Provide that upon the consummation of the Business Combination (i) United
will change its corporate name to be mutually agreed upon and as recommended by
UCHUB (ii) Xxxxx Xxxxxx will continue as CEO and President and Chairman of the
Board with controlling member (iii) Xxxxx Xxxxxx will assume the position of CFO
and remain as a Board member.
d. Provide for the delivery of customary legal opinions, closing
certificates and other documents;
e. Provide that each party shall be responsible for its own costs and
expenses, including audit and attorneys' fees, incurred in connection with the
transactions contemplated hereby;
f. Provide that the parties and their affiliates will cooperate in the
preparation of, and expeditiously file or provide, any information to
governmental authorities, required or helpful to effectuate the transactions
contemplated hereby, and
g. Include the terms and conditions set forth herein.
h. Employment agreements for Mr. Xxxxx Xxxxxx and Mr. Xxxxx Xxxxxx currently
in place will remain in place and become an obligation of the combined companies
following the completion of the merger, or will be replaced by new agreements
satisfactory to the parties involved not less than their existing agreements.
Employment Agreements for Xx. Xxxxxx and fro Xx. Xxxxxx, while acting as CFO and
CEO respectively, shall be negotiated in good faith option clauses and bonuses
as part of their contracts.
i. Parties agree that no announcements will be made without the written
approval of both parties. Due to the fact that Xx. Xxxxxx, the CEO and
President of UCHUB is an internationally televised personality, Xx. Xxxxxx will
receive a personal amount of stock per announcement that he participates in.
Parties will negotiate this in good faith prior to any such announcement.
III. Terms and Conditions
----------------------
At and conditioned upon execution of the Definitive Agreements:
1. United shall issue its shares of common stock to UCHUB stockholders equal
to 78% (or 90% if United is unable to arrange for financing as outlined in
paragraph II 2 a above) of United's total common shares issued and outstanding
as of the date of Closing.
2. UCHUB shall tender all of its issued and outstanding shares to United.
3. Other Terms and Conditions
-----------------------------
Other terms and conditions relating to the transaction shall be negotiated in
good faith and mutually agreed upon prior to preparation and finalization of the
Definitive Agreements.
4. Miscellaneous
-------------
The Definitive Agreements shall provide that the consummation of the
transactions contemplated hereby will be subject to conditions customary in
transactions similar to those contemplated hereby, including, without
limitation, that (i) the representations and warranties contained in the
Definitive Agreements will be true and correct in all material respects as of
the date they are made and as of the closing date, (ii) the parties shall have
obtained all necessary or desirable consents, rulings and approvals from such
governmental or non-governmental authorities having jurisdiction including the
court, (iii) the parties shall have obtained all necessary consents pursuant to
existing agreements or instruments by which they may be bound; and (iv) the
parties shall have complied with all requisite corporate procedures.
5. Public Announcements
---------------------
Public announcements regarding the transactions contemplated hereby will be made
only with the approval of each party hereto, except as may be required under
applicable law (and then only after notice to the other party, to the extent
possible).
6. Due Diligence Contingency
---------------------------
Satisfactory due diligence reviews by each party shall be a condition of
closing. UCHUB and United agree to cooperate with each other in the performance
of their respective due diligence reviews. Procedures and details of the due
diligence review condition shall be set forth in the Definitive Agreements.
From the date hereof until the earlier of the closing of the transactions
contemplated hereby or the termination of negotiations between the parties, the
parties (and, their designated representatives) will have reasonable access
through the personnel, facilities, officers and to all appropriate books and
records of each other for purposes of conducting a due diligence investigation
with respect to the transactions contemplated hereby.
If the transactions contemplated hereby are not consummated, the parties will
return all documents, including originals and all copies in their possession,
which were obtained hereunder and maintain the confidentiality of any
information obtained hereunder in accordance with the terms of paragraph 9.
7. Confidentiality
---------------
In the course of the parties due diligence investigation and discussions and
negotiations, each party may disclose to the other certain proprietary,
confidential or other non-public information (collectively, the "information")
relating to its respective business, the proprietary, confidential and
non-public nature of which information both parties desire to maintain. Except
as herein set forth, no party shall (a) reveal or make known to any person,
firm, corporation or entity or (b) utilize in its own business or (c) make any
other usage of, any information disclosed to it by the other in connection with
the discussions and negotiations about mentioned. A party's obligations with
respect to any item of information disclosed to it shall terminate if that item
of information becomes disclosed in published literature or otherwise becomes
generally available to the public; provided, however, that such public
disclosure did not result, directly or indirectly, from any act, omission or
fault of such party with respect to that item of information. Further, this
paragraph shall not apply to any item of information which (i) was independently
developed by such party without the use of any information provided to such
party, (ii) at the time of disclosure was already generally available to the
public, or (iii) at the time of disclosure was already in the possession of the
party intending to utilize the item of information and was not acquired by such
party, directly or indirectly, for the disclosing party under a confidentiality
agreement. All parties agree that the information either it has received or may
receive from any other party has been and will be used by the receiving party
solely for the limited purpose of its investigation and evaluation of the other
party in connection with the potential Business Combination.
8. Approvals
---------
It is understood by the parties that this letter of Intent and the Definitive
Agreements are subject to review and approval thereof by each party's respective
Board of Directors.
9. Established Deadline Dates
----------------------------
The Definitive Agreements shall be entered into between the parties based on the
following schedule:
- Execute Letter of Intent August 14, 2002
- Execute Final Agreement to be determined (per II,2,a)
- Complete Due Diligence to be determined
- Champagne or Shotgun Date to be determined
This Letter of Intent shall expire and terminate 5:00 p.m. PDT August 15, 2002.
It is understood that this letter is merely a non-binding expression of intent.
In the event UCHUB and United fail to agree on terms and conditions and
provisions of Definitive Agreements other than set forth herein, prior to the
expiration of this Letter of Intent, no party (nor any of their affiliates) will
have any binding obligation liability hereunder or otherwise with respect to the
transaction contemplated hereby, or any expenses related thereto, except as may
otherwise be provided herein, unless and until the Definitive Agreements are
duly executed and delivered in a form satisfactory to both parties, and
thereafter any binding obligation or liability will only be pursuant to the
terms of the Definitive Agreements.
Whether not the transactions contemplated hereby are consummated and except as
may be specifically agreed as to particular expenses, each party will pay its
own expenses, including those of its accountants, advisors, and counsel, in
connection with the transactions contemplated hereby. Neither party has
incurred any liability on behalf of the other party for any brokerage or finders
fee or other compensation in connection with the transactions contemplated
hereby.
10. Other Matters
--------------
It is agreed between the parties that:
- The parties hereto have the right and authority to enter into this Letter
of Intent.
- Time is of the essence and that each party will use its best efforts to
finalize Definitive Agreements on or before a date to be determined.
- The Effective Date of this Letter of Intent shall be the later of the
dates signed by the parties as evidenced below.
- The Definitive Agreements and the documents and instruments delivered
pursuant thereto shall be governed by and construed in accordance with the laws
of the State of Nevada.
This letter may be executed in any number of counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument. Facsimile transmitted signed copies shall be binding.
Please evidence your concurrence with this Letter of Intent and the general
terms and conditions set forth herein by dating and signing a copy of this
Letter in the space provided below and returning it to us.
We look forward to an amalgamation of our businesses and to a mutually
beneficial relationship.
Sincerely,
UNITED XXXXXXX.XXX United Communications Hub, Inc.
By s/Xxxxx X. Xxxxxx By _s/Xxxxx Wilcox_____
------------------- ----------------
Xxxxx X. Xxxxxx, President Xxxxx Xxxxxx, President
Date 8/15/02 Date 8/15/02
------- -------
