Summary of MULTIBAND CORP - Yahoo! Finance

Entry into a Material Definitive Agreement, Other Events, Financial Statements and

Item 1.01 Entry into a Material Definitive Agreement

On July 9, 2012, MDU Communications International, Inc., a Delaware corporation ("MDU"), entered into an Acquisition Agreement ("Agreement") with Multiband Corporation, a Minnesota corporation ("Multiband"). The Agreement and the transactions contemplated by it have been approved by the boards of directors of both MDU and Multiband. The following description of the Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

Upon the terms and subject to the conditions set forth in the Agreement, MDU will merge with and into a wholly owned subsidiary of Multiband, (MBSUB), with MDU continuing as the surviving corporation ("Merger"). The Merger is intended to qualify as a reorganization within the meaning of the Internal Revenue Code of 1986, as amended, so that none of Multiband, MDU nor any of the MDU stockholders generally will recognize any gain or loss in the transaction, except that MDU stockholders may recognize gain or loss if Multiband exercises the cash payment option as Merger consideration, as set forth in the Agreement, or with respect to cash received in lieu of fractional shares of Multiband common stock.

Upon completion of the Merger ("Effective Time"), each issued and outstanding share of MDU common stock (other than shares held by Multiband, MDU and their respective subsidiaries) will be converted into the currently calculated right to receive 0.759 shares of common stock of Multiband ("Exchange Ratio"). The Agreement provides for adjustment of the number of Multiband shares if the trading price of Multiband common stock varies greater or less than 20% (based on $3.00 per share) at the Effective Time. In the alternative, Multiband has the option to pay an equivalent $12.9 million in cash for all the issued and outstanding shares of MDU common stock. The Agreement also provides for contingent consideration to MDU stockholders of record if MDU enters into a definitive agreement with a third party prior to or within three months after the Effective Time for the sale of a certain number of subscribers, proceeds from which would reduce the outstanding credit facility.

Each outstanding option (vested or unvested) to purchase shares of MDU common stock will be assumed by Multiband and valued according to the Exchange Ratio. Each outstanding share of MDU restricted stock will vest in full and become free of restrictions immediately prior to the Effective Time, and at the Effective Time will be converted into the right to receive 0.759 shares of common stock of Multiband.

The Agreement provides that the directors and officers of MDU Communications (USA) Inc., the wholly owned operating subsidiary of MDU, immediately prior to the Effective Time, will continue as the directors and officers of MDU, the surviving corporation of the Merger with MBSUB.

The obligations of MDU and Multiband to consummate the Merger are subject to various customary conditions, including, among others: (a) approval of the Agreement by the lenders of MDU and Multiband; (b) a third party fair market valuation on MDU requested by Multiband; (c) approval of the Agreement by the MDU stockholders representing a majority of MDU's outstanding shares; (d) effectiveness of the registration statement for the Multiband common stock to be issued in the Merger; (e) receipt of any required governmental body or exchange approvals; (f) the absence of any material adverse effect, any material litigation, injunction or similar restraint prohibiting or restricting consummation of the Merger or any of the other transactions contemplated by the Agreement; (g) subject to certain exceptions, the accuracy of the representations and warranties of each party; (h) the MDU credit facility not exceeding $29.7 million, and (i) the performance in all material respects by each party of its obligations under the Agreement.

MDU has made customary representations and warranties regarding, among other things: organization, standing and power; authority; capital structure; subsidiaries; publicly-filed documents; absence of undisclosed liabilities; absence of certain changes or events; tax matters; assets; intellectual property; environmental matters; compliance with laws; foreign corrupt practices; labor relations; employee benefit plans; material contracts; legal proceedings; loan matters; insurance; and affiliate transactions.

Multiband has made customary representations and warranties regarding, among other things: organization, standing and power; authority; capital structure; publicly-filed documents; absence of undisclosed liabilities; absence of certain changes or events; tax matters; compliance with laws; labor relations; employee benefit plans; insurance and legal proceedings.

MDU and Multiband have made customary covenants in the Agreement, including, among other things, covenants to (a) prepare and file with the Securities and Exchange Commission ("SEC"), as promptly as reasonably practicable, the registration statement on Form S-4, which will include the proxy statement relating to the special meeting of MDU's stockholders and the prospectus for the offering of Multiband's common stock in the Merger; and (b) cooperate with each other and use their respective reasonable best efforts to obtain all consents, approvals and authorizations that are necessary to consummate the transactions contemplated by the Agreement.

Each of MDU and Multiband have additionally agreed, subject to certain exceptions, to conduct its business in the ordinary course consistent with past practice between the execution of the Agreement and the Effective Time and not to take certain actions during such period.

MDU has additionally agreed (a) not to solicit competing acquisition proposals or, subject to certain exceptions, enter into discussions concerning, or furnish nonpublic information in connection with, any competing acquisition proposals,
(b) that it will call, give notice of, convene and hold a stockholders' meeting for the purpose of voting on the Agreement; and (c) subject to certain exceptions, that MDU's board of directors will recommend that MDU stockholders vote in favor of the Agreement.

The Agreement may be terminated, before or after receipt of MDU stockholder approval, in certain circumstances, including: (a) by mutual written agreement of the parties; (b) by either party upon a denial of a required consent or approval; (c) by either party if MDU stockholders fail to approve the transactions contemplated by the Agreement; (d) by either party if the Merger is not consummated on or before December 31, 2012, if such failure is not caused by any breach of the Agreement by the party proposing to terminate; (e) by MDU if lender approvals have not been received on or prior to July 31, 2012; or (f) by a failure to satisfy fully any of the conditions precedent benefiting such party at or prior to the Effective Time.

Upon termination of the Agreement by MDU upon accepting a competing proposal for acquisition prior to the vote of MDU stockholders, MDU may be required to pay Multiband a termination fee of $500,000.

This summary and the copy of the Agreement attached hereto as Exhibit 2.1 are included solely to provide investors with information regarding the terms of the Agreement. They are not intended to provide factual information about the parties or any of their respective subsidiaries or affiliates. The foregoing discussion is qualified in its entirety by reference to the Agreement. The Agreement contains representations and warranties by MDU and Multiband, which were made only for purposes of the Agreement and as of specific dates. The representations, warranties and covenants in the Agreement were made solely for the benefit of the parties to the Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those generally applicable to investors. Investors are not third-party beneficiaries under the Agreement and in reviewing the representations, warranties and covenants contained in the Agreement or any descriptions thereof in this summary, it is important to bear in mind that such representations, warranties and covenants or any descriptions were not intended by the parties to the Agreement to be characterizations of the actual state of facts or condition of MDU, Multiband or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Agreement, which subsequent information may or may not be fully reflected in MDU's and Multiband's public disclosures. For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone and should instead be read in conjunction with the other information contained in the reports, statements and filings that MDU and Multiband publicly file with the SEC.

Cautionary Statements Regarding Forward-Looking Information

This document contains forward-looking statements within the meaning of the . . .