SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 25, 1999
ADVANCED WIRELESS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Alabama 0-26533 63-1205304
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
927 Sunset Drive
Irving, Texas 75061
(Address of principal executive office)
Issuer's telephone number: 972-254-7604
Item 2. Acquisition of Assets
On August 25, 1999, Advanced Wireless Systems, Inc. (the Company) purchased
all of the assets of Dibbs Internet Services, Inc. (Dibbs), an Alabama
corporation, an Internet service provider in Mobile, Alabama, for a purchase
price of $225,000. Dibbs provides Internet services to approximately 730
Internet customers in the Mobile metropolitan area via dial-in telephone line
access. We will continue offering Dibbs customers the telephonic Internet
service that they have now, and we will also offer them the opportunity to
convert to use of our high speed wireless Internet service.
We acquired the Dibbs assets used in the operation of its Internet service,
including its equipment, software, and the right to use the Dibbs trade name,
for $225,000 cash, paid in full on August 25, 1999, to Dibbs and its sole
shareholder and president, Diane Summers. We negotiated the purchase price
with Ms. Summers, who is not affiliated with our Company, in arms-length
negotiations. We used cash from our working capital reserves to pay the
purchase price. We did not assume any liabilities of Dibbs in the
transaction.
- 1 -
The assets purchased include the equipment necessary to service the Dibbs
subscribers, including three computers, two network hubs, a Cisco 2500
router, software, a backup power supply and other network accessories. Dibbs
services 730 subscribers, who use 56k, 64k or 128k ISDN telephone services
and e-mail dial-up services. The Dibbs basic service begins at $19.95 per
month. The subscriber base includes 58 domains and 47 commercial websites.
In the first three months of 1999, Dibbs had average net income of $6,179
per month based on average revenues of $16,795 per month.
The asset purchase agreement includes a two year non-competition clause in
which Dibbs and Ms. Summers agree not to compete with our Company in
providing Internet services within a 75 mile radius of Mobile for two years.
Ms. Summers also agreed to provide consulting services to us, to help us
take over and operate the Dibbs business, for up to 60 days after the
purchase, for $1,200 per week.
Item 7. Financial Statements and Exhibits
The financial statements required by this Item for the Dibbs asset purchase
will be filed within 60 days after the date of this report.
Exhibits
2.1 Agreement to Purchase Assets between Advanced Wireless Systems, Inc.,
and Dibbs Internet Services, Inc. (filed herewith).
2.2 Bill of Sale from Dibbs Internet Services, Inc., to Advanced Wireless
Systems, Inc. (filed herewith).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVANCED WIRELESS SYSTEMS, INC.
Date: September 8, 1999 /s/ Monte Julius
---------------------------------------------
Monte Julius, President
- 2 -
AGREEMENT TO PURCHASE ASSETS
This Agreement to Purchase Assets (the "Agreement") is entered into on
this 28th day of July, 1999, by and among Advanced Wireless Systems, Inc.,
an Alabama corporation, represented by Monte Julius, its President ("Buyer")
and Dibbs Internet Services, Inc., an Alabama corporation, represented herein
by its President, Diane Summers (the "Company").
WHEREAS, Buyer desires to purchase from Company and the Company desires
to sell to Buyer certain assets of the Company.
NOW, THEREFORE, in consideration of the payments and transfers provided
for in this Agreement, the parties agree as follows:
1. Assets To Be Transferred. Subject to the conditions set forth in this
Agreement, the Company shall sell, transfer, convey, assign and deliver
to Buyer and Buyer shall purchase the following assets (the "Purchased
Assets"):
a. All good will, going concern value, trade names, Internet domain
names and trademarks used or useful in the operations of Company's
business including, but not limited to, the names, "Dibbs Internet
Services, Inc., Dibbs Internet Services, Inc.com, Dibbs Internet
Services, Dibbs Internet Services.com" or any derivative thereof,
trademark rights, logos, trademark applications, trademark
registrations, service marks, including all claims for
infringement, and all registrations therefor. Exhibit A to this
Agreement sets forth all trade names, trademarks, trademark
registrations, trade name registrations and Internet domain names;
b. The equipment to be transferred is listed in Exhibit B;
- 1 -
c. Any and all domain registrations, network, telephone numbers, and
all similar assets that are used, necessary or useful to continue
Company's operations of providing Internet access services,
servicing, programming, online shopping, web site promotion,
web site hosting, virtual hosting, servers, domain registration.
Exhibit B-2, sets forth in detail all the assets described in this
subsection I (c). The content of the directory and subdirectories
of Shareholder under "http://www.dibbs.net/di/" shall also be
excluded from the Purchased Assets. Company and Shareholder
represent and warrant in solido that neither the directory nor
any of the subdirectories contain any trade secrets, confidential
information or any records or information of any nature whatsoever
about the Company, its assets, its operations, or subscribers. To
the extent available and as requested by Buyer, Company shall
deliver the items set forth in this subsection 1 (c) in an
electronic format and a paper format. See Exhibit P;
d. Any and all software, source codes, software manuals, software
rights, copyrights, copyright agreements, licenses, license
agreements, authorized dealer agreements, certification
agreements, and dealer certification agreements of Company,
related to, used and/or useful in the operation of the business
of Company. Exhibits C, D, E and F, respectively, are detailed
lists of:
i. The software, software agreements and source codes for the
software;
ii. The copyrights and copyright agreements;
iii. The licenses and license agreement; and
iv. The authorized dealer agreements, certification agreements
and dealer certification agreements of the Company used
and/or useful in its business operations;
e. All processes, know-how, discoveries, improvements, designs, trade
secrets, shop and royalty rights and all other types of
proprietary intellectual property of the Company. Exhibit G is a
list of all such assets. To the extent available and as requested
by Buyer, Company shall deliver the items set forth in this
subsection 1 (e) in an electronic format and a paper format;
f. All accounting and billing software, all source codes related to
the accounting and billing software programs, credit card
machines, credit card agreements, automatic payment agreements and
other similar property and rights of the Company. Exhibit H is a
list of such agreements and assets;
g. All mailing lists, marketing data, accounting records, business
records, operating data and other data of the Company used and/or
useful in its business operations. Exhibit I sets forth the
names, addresses, accounts numbers, telephone numbers, payment
history and account balance of each subscriber of Company. To
the extent available and as requested by Buyer, Company shall
deliver the items set forth in this subsection 1 (g) in an
electronic format and a paper format;
- 2 -
h. In the event any related party to Company including Company's
Shareholder, owns or licenses to Company any asset that Company
uses in any of its business, Company shall cause those assets
and/or licenses to be transferred without additional consideration
to Company in order that they can be transferred to Buyer as part
of the transaction contemplated by this Agreement; and
i. Company shall set forth on Exhibit J to this Agreement the
following:
i. All connections to the Internet. Example: Frame Relay Tl
with 128K CIR to UUNET, and 6mbps Fractional T3 to
Sprintlink;
ii. All routing protocol used. Example: BGP4 full route with
UUNET, BGP4 Customer route with Sprintlink and OSPF
internal;
iii. All routing and RAS equipment used;
iv. All IP blocks with ownership and portability. Example:
192.168.0.0/18 -- UUNET, nonportable;
v. Company's entire hardware platform, operating system,
software version for DNS, smtp, pop3, http, radius, nntp,
and mailing list servers;
- 3 -
vi. All other servers not listed above, such as Real Audio,
Chat, SQL, and MUD servers;
vii. All E-commerce platforms used. Example: Oracle 8i on HP UX,
Cybercash on Linux PII/450;
viii. All scripting language used for web servers, such as Perl 5,
VBScript, C, Java Servlet, Java Script, Java Applet;
ix. What software is used for billing; and
x. How the billing system interfaced to the Raidus accounting
data files;
j. All customers/subscribers, customer/subscriber agreements,
agreements to sell subscriber lists, subscriber/customers lists,
rights to income, cash flow, maintenance agreements, and
agreements of any nature used in the operation of the business of
the Company. Exhibit K to this Agreement sets forth in detail all
agreements and rights described in this subsection 1(j). To the
extent available and as requested by Buyer, Company shall deliver
the items set forth in this subsection IO) in an electronic format
and a paper format.
2. Assumption of Liabilities. Buyer shall not and does not assume or
agree to pay, perform or discharge any debt, liability or obligation of
the Company of any nature whatsoever and the Company shall remain solely
responsible for satisfying, discharging and performing all of its own
liabilities including, but not limited to, the following:
a. Taxes. All United States, state, local and other taxes
applicable to, imposed upon or arising out of the sale and
transfer of the Purchased Assets to Buyer and the other
transactions contemplated by this Agreement, including but not
limited to, any income, transfer, sales, use, gross receipts or
documentary stamp taxes;
b. Claims. Any liability of the Company whether or not insured
against;
- 4 -
c. Transaction Expenses. All liabilities, costs, obligations or
expenses incurred by the Company in connection with this
Agreement and the transactions contemplated herein;
d. Liability for Breach. Liabilities and obligations of the Company
for any breach or failure to perform any of the Company's
covenants and agreements, including but not limited to, those
contained in or made pursuant to this Agreement; and
e. Shareholder Liabilities. Liabilities and obligations of the
Company to its Shareholder as such.
3. Purchase Price Payment - Allocation.
a. Purchase Price. - The purchase price for the Purchased Assets
shall be $225,000.00;
b. The Buyer shall allocate and pay directly to the Shareholder
of Company, $2,500.00 of the purchase price for payment of
the covenants set forth in Section 17 of this Agreement.
Further, the Buyer shall also allocate an additional
$2,500.00 of the purchase price to the Company for payment
of the covenants set forth in Section 17 of this Agreement;
c. After the purchase price has been computed, the parties
shall execute an Allocation Agreement in accordance with
Section 1060 of the Internal Revenue Code of 1986, as
amended.
The Company and Buyer will follow and use such allocation
in all income, sales registration and other tax returns,
filings or other related reports made by them to any
governmental agencies. To the extent that disclosures of
this allocation are required to be made by the parties to
the Internal Revenue Service ("IRS")under the provisions of
Section 1060 of the Internal Revenue Code of 1986, as
amended (the "Code") or any regulations thereunder,
Buyer and the Company will disclose such reports to each
other prior to filing with the IRS; and
d. Payment of Purchase Price. The purchase price shall be paid by
Buyer as follows:
i. Upon the execution of this Agreement, Buyer shall pay to
Company twenty-five thousand ($25,000.00) dollars as a
partial payment of the Purchase Price. In the event that
the transaction contemplated by this Agreement does not
close, Company shall repay the partial payment of the
Purchase Price;
ii. Cash to the Company. Buyer shall deliver to the Company
at Closing of this Agreement $2,500.00 as compensation for
the covenants of the Company set forth in Section 17 of
this Agreement;
iii. Buyer shall deliver $2,500.00 to the Shareholder of
Company as Compensation for the covenants of the
Shareholder set forth in Section f7 of this Agreement; and
iv. Buyer shall pay to Company the balance of the purchase by
certified check or wire transfers at the Closing.
v. Buyer will provide courtesy account - di@dibbs.net or
dibbs.com - to Diane Summers for 36 months, after which
that address or user name shall not be issued to anyone
else.
4. Representations and Warranties of the Company and Shareholder. The
Company and its Shareholder jointly and in solido make the following
representations and warranties to Buyer, each of which Buyer relies
upon as a material reason for the acquisition of the Purchased Assets:
a. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Alabama;
b. Power and Authority. The Company has all requisite power and
authority to own, operate and lease its properties, to carry on
its business as and where such is now being conducted, to enter
into this Agreement and the other documents and instruments to be
executed and delivered by the Company pursuant hereto and to carry
out the transactions contemplated by this Agreement;
c. Authority. The execution and delivery of this Agreement and any
other documents and instruments to be executed and delivered by
the Company and the consummation of the transactions contemplated
by this Agreement have been duly authorized by the Shareholder of
the Company. No act or proceeding on the part of the Company is
- 4 -
necessary to authorize or consummate this Agreement;
d. No Violation. Neither the execution and delivery of this
Agreement or any other documents and instruments to be executed
and delivered by the Company pursuant to this Agreement, nor the
consummation by the Company of the transactions contemplated in
this Agreement (i) will violate any statute, law, rule,
regulation, order, writ, injunction or decree of any court or
governmental authority or (ii) require any authorization, consent,
approval, exemption or other action by or notice to any court,
administrative or governmental agency, instrumentality,
commission, authority, board or body;
e. Tax Return Filed. All federal, state, local and other tax returns
required to be filed by or on behalf of the Company have been
filed and the taxes due by Company have been paid;
f. No Litigation. Except as set forth on Exhibit K there is no
action, suit, arbitration proceeding, investigation or inquiry
pending or threatened against the Company, its business or any of
its assets. Further, neither the Company nor its Shareholders
know, or have any grounds to know, of any basis for any such
proceedings, investigations or inquiries. Except as set forth
on Exhibit K, the Company, its business and assets are not subject
to any judgment, order, writ, or injunction of any court,
arbitrator or any governmental department, commission, board,
bureau, agency or instrumentality;
g. Compliance with Laws. The Company (including its operations,
practices, properties and assets) is in compliance with all
applicable federal, state and local laws, ordinances, orders,
rules and regulations. The Company has not received notice of
any violation or alleged violation of any federal, state or local
laws, ordinances, orders, rules or regulations. All reports and
returns required to be filed by the Company with any governmental
authority have been filed;
h. Number of Subscribers. That there are approximately 730 Internet
paying subscribers of the Company. Neither the Company nor its
Shareholders know of any reason that any material number of
subscribers (material being ten (10%) percent) are dissatisfied
with the Company's policies and/or service.
- 5 -
Company's attrition rate of subscribers is approximately ___
amount per month and Company regularly adds 5 new subscribers per
month to its lists of paying subscribers.
i. Liens. All the Purchased Assets transferred under this Agreement
to Buyer are free and clear of all liens and/or encumbrances of
any nature whatsoever. Company transfers to Buyer good and
marketable title to the Purchased Assets with the unrestricted
right to use and transfer them;
j. Condition of Assets. The Purchased Assets are in good working
order and all have maintained in accordance with any
manufacturer's warranty requirements and no license or other
intangible asset has lapsed nor has any license or agreement
related to the use of any Purchased Asset been violated or
rescinded;
k. Third Parties. Except as set forth on Exhibit L, no consent or
approval is required from any third party to transfer to Buyer any
of the Purchased Assets or any rights to use or operate any of
the Purchased Assets;
l. Diane Summers is the sole owner of one hundred (100%) percent of
the outstanding and issued stock interests of the Company
("Shareholder").
m. Attached as Exhibit M are the income tax returns, bank
statements(without checks) and financial statements of the Company
for the last three (3) years and for operations for 1999 from
January 1, 1999 through June 30, 1999. The income tax returns and
financial statements accurately reflect and represent the current
status of and the operational history of the Company and are true
and correct. Further, the income tax returns and financial
statements do not contain any misrepresentation or omission.
Company's bad debt percentage of its accounts receivable is 0
and Company's percentage of accounts receivable over thirty (30)
days is 0, over sixty (60) days is 0 and over (90) days is 0.
- 6 -
n. There are no other assets of any nature used or useful in the
operation of Company's business other than those set forth in
Sections I and the exhibits referred to in Section 1.
5. Representations and Warranties of Buyer. Buyer makes the following
representations and warranties to the Company:
a. Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Alabama; and
b. Buyer has all requisite power to enter into this Agreement and
the other documents and instruments to be executed and delivered
by Buyer and to carry out the transactions contemplated hereby
and thereby.
6. Closing. The Closing of this transaction ("the Closing") shall be on
or prior to Oct 1, 1999 at the offices of Mr. Gilbert Dukes 51 D.
Tacon Street, Mobile, AL 36607. Such date is referred to in this
Agreement as the "Closing Date".
7. Conditions Precedent to Buyer's Obligations to Close. Buyer's
obligation to close this Agreement is contingent upon: (1) the
completion by Buyer, to its 'sole satisfaction, of its business and
legal due diligence investigation of Company; (2) receipt of all
required approvals, consents and authorizations of governmental or
regulatory authorities having jurisdiction; (3) receipt of all
required material consents of third parties; (4) the occurrence of no
material adverse change in the business or prospects of Company from
January 1, 1999 through the Closing Date; (5) the completion of other
legal documentation satisfactory to Buyer and its counsel; and (6) the
delivery to Buyer of the items set forth in Section 9 of this
Agreement.
8. Company will be operated from the date hereof through the Closing Date
(or earlier termination of the proposed transaction) in the ordinary
course of its business, consistent with past practices. Company will,
during that time, deliver to Buyer such reports on its operating and
financial performance as Buyer may reasonably request, but no less
often than monthly.
9. Items to be Delivered by the Company. The Company, as requested by
Buyer, shall deliver to Buyer at Closing the following:
- 7 -
a. Wills of Sale. Bills of Sale and such other instruments of
assignment, transfer, conveyance and endorsement as will be
sufficient in theopinion of Buyer and its counsel to transfer,
assign, convey and deliver to Buyer the Purchased Assets;
b. Resolutions. A copy of the resolution of the Shareholder of
the Company authorizing and approving this Agreement and the
consummation of the transactions contemplated by this
Agreement;
c. All third party consents and approvals necessary to transfer
the Purchased Asset to Buyer;
d. Other Documents. All other documents, instruments, writings
and such other certificates of authority as Buyer may request;
e. Subscription agreements in form and substance satisfactory to
counsel for Buyer;
f. Current financial statements and tax returns of Company as
referred to in Section 4 (m) of this Agreement;
g. Proof satisfactory to Buyer that the transfer of all the
Purchased Assets, particularly those related to the actual
operations of providing Internet services, have been transferred
to Buyer. See Exhibit P;
h. All operating software documentation, including all source
codes. See Exhibit P;
i. All items set forth in Subsection "i" of Section 1 of this
Agreement; and
j. An opinion of counsel in form and substance as that attached as
Exhibit O to this Agreement.
10. Items to be Delivered by Buyer. At the Closing, Buyer shall deliver
to Company the following documents:
a. $2,500.00 to the Shareholder of Company and $2,500.00 to the
Company;
- 8 -
b. The cash portion of the purchase price, consisting of the
balance of the purchase price; and
c. Resolutions. A copy of the resolution from the
Board of Directors of Buyer authorizing and approving
this Agreement and the consummation of the
transactions contemplated by this Agreement.
11. Transfer Taxes. Any sales, use, excise or other similar
tax imposed with respect to the transactions provided for
in this Agreement, and any interest or penalties related
thereto,shall be paid by the Company and the Company
shall indemnify and hold Buyer has from any such tax,
interest or penalty that may be assessed against Buyer.
12. Effective Date. The effective date of this Agreement for
all purposes shall be the date of the last party to execute
this Agreement.
13. Counterparts. This Agreement may be executed
simultaneously 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.
14. Further Documents. Buyer and the Company shall execute
all other documents and take such other action or
corporate proceedings as may be necessary or desirable to
carry out the terms of this Agreement.
15. Independent Covenants. Each covenant contained in this
Agreement shall be construed (absent an express contrary
provision therein) as being independent of such other
covenant contained herein and compliance with any one
covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any or all
other covenants.
16. Attorney's Fees Provision. In the event of a breach of
this Agreement, the nonbreaching party shall have the
right to recover reasonable attorney's fees from the
breaching party, in addition to any other costs and
damages allowed by law or equity and under this Agreement.
17. Non-Compete Agreement.
- 9 -
The Shareholder and Company acknowledge that the Company
has invested significant time and effort in developing
its business which is being sold to Buyer. The success of
the Company has depended and will, after the sale of the
business and assets to Buyer, continue to depend to a
substantial extent upon the manner in which this unique
business operates and obtains its business and subscriber
contracts. In order for Buyer to protect its business
interest and investment being made as a result of this
Agreement, it is the intent of the parties to this
Agreement to restrict the Company's and the Shareholder's
ability to compete with Buyer or to use any such trade
secrets or confidential information to compete with Buyer,
and in consideration for the benefits provided in this
Agreement, the Company and Shareholder agree to the
restrictions provided in this Section 17.
a. Definitions. The following words and expressions
shall have the following meanings:
i. "Trade Secrets." The term "trade secrets" shall
mean all processes, know-how, discoveries,
improvements, designs, programs, subscriber
names, agreements and lists, subscriber payment
and payment history, all information, equipment,
processes, operating protocols as described in
Subsection "i" of Section I of this Agreement,
and all proprietary intellectual property;
ii. "Confidential Information." The term
confidential information shall mean all shop
and royalty rights, source codes, credit card
agreements, software agreements, copyright
agreements, licensing agreements, authorized
dealer certification, all subscriber information,
all records, files, financial statements, cost
reports, other financial information, products,
plans, policies and procedures developed as a
part of a confidential business plan, management
systems and procedures, including manuals and
supplements thereto;
iii. "The Business." The term "the business" shall
mean the business related to the provision and
support of Internet services carried on by the
Company in the State of Alabama; and
iv. "Shareholder." The term "Shareholder" shall mean
Diane Summers.
- 10 -
b. The Company and Shareholder shall not for a period of
two (2) years from and after the date of the execution
of this Agreement, directly or indirectly, own any
interest in, manage, operate, control or participate
to any extent in the ownership, management, operation
or control of, or be connected in any manner with any
business which competes in any manner with the Buyer,
its successors, assigns and/or joint ventures in the
providing of Internet services or services similar to
those previously provided by Company or to those
provided by Buyer within the territory in which the
Company and Shareholder competed and provided
services, and which the Buyer will continue to compete
and provide services, to wit, within a seventy-five
(75) mile radius of Mobile, Alabama.
Company and Shareholder acknowledge that the restrictions set
forth in this Section 17 are reasonable and necessary for the
purpose of protecting the legitimate business and investment of
the Buyer.
The covenants set forth in this Section 17 shall be
construed as agreements independent of any other
provision of this Agreement and, except as otherwise
provided for in this Agreement, the existence of any
claim or cause of action of Company or Shareholder
against the Buyer whether predicated on this Agreement
or otherwise shall not constitute a defense of Company
or Shareholder to the enforcement of the covenants set
forth in this Section 17 by the Buyer;
c. Protection of Information and Non-solicitation:
Company and Shareholder hereby covenant and agree as
follows:
i. At any time following the execution of this
Agreement, Company and Shareholder shall not use
or disclose, directly or indirectly, for any
reason whatsoever or in any way, any confidential
information or other trade secrets as defined
herein. The obligation not to use or disclose
any of the confidential information shall not
apply to any information that becomes public
knowledge through no fault of the Company or
Shareholder, but the termination of the
obligation for non-use or nondisclosure by reason
of such information becoming public knowledge
shall only be from the date such information
becomes public knowledge. That which the Buyer
or Company asserts to be confidential information
is presumed not to be generally known;
- 11 -
ii. All files, records, recordings, tapes, programs, documents,
subscriber names and lists, contracts, agreements,
equipment and similar items relating to the business of
the Company, whether prepared by the Company or Shareholder
or otherwise, shall be the exclusive property of the Buyer;
iii. Company and Shareholder shall not either directly or
indirectly, either orally or in writing, make known to any
person, firm or corporation the name and/or address of any
of the subscribers, former subscribers, temporary
subscribers, customers or clients of the Company related
to the Business of the Company, or any other confidential
information of the Company or information that is
proprietary to the Company; and
iv. For a period of two (2) years following the execution of
this Agreement, Company and Shareholder shall not, either
directly or indirectly, orally or in writing, call on or
attempt to call on, solicit, or take away or assist another
person to call on, solicit, or take away any of the
subscribers, customers, clients or prospects of the Buyer.
However, Shareholder may speak socially with her friends
concerning the sale of the business and her experiences in
operating the business providing she does not disclose any
trade secrets or confidential information or otherwise
breach this Agreement.
d. With respect to each and every breach or violation or threatened
breach or violation by Company or any Shareholder of any of the
covenants set forth in this Section 17, the Buyer, in addition to
all other remedies available at law or in equity, including
specific performance of the provisions hereof, shall be entitled
to enjoin the commencement or continuance thereof and may, without
notice to the Company or the Shareholder, apply to any court of
competent jurisdiction for entry of an immediate restraining
order or in unction. In addition, the Company and the breaching
Shareholder, in solido, shall pay the Buyer a reasonable sum for
Buyer's attorney's fees and costs of litigation should the Buyer
bring an action, and prevail therein, against Company or against
any Shareholder for the breach of this Agreement. It is further
agreed that in any action for injunctive relief, Buyer shall be
relieved of the necessity of posting bond;
- 12 -
e. In the event the Company or any Shareholder violates any of their
covenants or agreements under this Section 17, Buyer shall also
be entitled to an accounting and repayment of all profits,
compensation, commissions, remunerations or benefits which the
Company and/or Shareholder directly or indirectly have realized
or may realize, as a result of, growing out of, or in connection
with, any such violations. This remedy shall be in addition to,
and not in limitation of, any injunctive relief or other rights
or remedies which Buyer is, or may be, entitled at law or in
equity or under this Agreement;
f. During the duration of this two (2) year non-competition period,
the Buyer may notify anyone associated with any Shareholder of the
existence and provisions of this Agreement, if the Buyer
reasonably believes any Shareholder is working for, advising or
assisting in any way a competitor in violation of this Agreement;
and
g. Company and Shareholder covenant, warrant and represent that they
and Company have turned over and delivered to Buyer all of its
subscribers, subscriber lists, contacts and referrals and have not
retained any copies, electronic or otherwise. Company and
Shareholder further represent that they shall not use any name
similar to the names that are to be transferred to Buyer as a
result of this Agreement.
18. Company and Shareholder shall cooperate and assist Buyer in taking
over the business operations of Company. Such cooperation and
assistance shall consist of acts reasonably requested by Buyer
including but not limited to the following:
a. Preparation of and forwarding of correspondence to each
subscriber explaining the acquisition by Buyer and the
recommendation by Company and Shareholder that each subscriber
continue to use Buyer as their Internet service provider;
b. Training of Buyer's personnel within 5 working days prior to
closing in the use and operation of Company's software, licenses
and equipment, including but not limited to, Company's billing
and accounting software. After said 5 days the operation of
the system Dibbs Internet will no longer be responsible for the
operation of the system;and
c. Delivering the Purchase Assets to Buyer.
- 13 -
19. Miscellaneous.
a. Governing Law. This Agreement and all assignments and other
instruments executed in accordance with it and the execution
hereof shall be governed by and interpreted according to the
laws of the State of Alabama. Jurisdiction and venue for all
disputes between the parties shall be in United States District
Court for the District of Alabama;
b. Cooperation. Each party to this Agreement shall provide the
other party with reasonable access to all relevant documents,
data and other information which may be required by the other
party for the purpose of preparing tax returns and responding
to any audit by any taxing jurisdiction. Notwithstanding
anything to the contrary in this Agreement, neither party to
this Agreement shall be required at any time to disclose to the
other party any tax returns or other confidential tax
information;
c. Entire Agreement. This Agreement, the documents to be executed
hereunder, and the Exhibits attached hereto constitute the
entire agreement between the parties, supersedes all prior
agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the
parties except as specifically set forth herein. No
supplement, amendment, modification, waiver or termination of
this Agreement shall be binding unless executed in writing by
the parties to this Agreement;
d. Survival of Closing. Unless otherwise specifically provided,
all warranties and obligations given in, or created by, this
Agreement shall survive the Closing. Further, all obligations
of Company and Shareholder are joint and in solids obligations;
e. Waiver. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise
expressly provided;
f. Captions. The captions in this Agreement are for convenience
only and shall not be considered a part of or affect the
construction or interpretation of any provision of this
Agreement;
- 14 -
g. Notices. All claims, notices, requests, demands or other
communications under this Agreement shall be in writing, shall
be personally delivered or deposited into the United States mail
(first class, registered or certified mail), postage prepaid,
and shall be addressed as follows:
If to Company:
Dibbs Internet Services, Inc.
P.O. Box 91098
Mobile, Alabama 36691
with copy to:
Gilbert F. Duke, III
Coale, Dukes & Kirpatrick
51-D Tacon Street
Mobile, Alabama 36607
If to Buyer:
Advanced Wireless Systems, Inc,
900 Frenchman Street
New Orleans, La. 70116
with copy to:
Michael A. Mayhall, Esquire
700 Camp Street
New Orleans, LA 70130
Any notice so addressed and mailed by registered or certified mail shall be
deemed to be given when so mailed. Any notice so addressed and otherwise
delivered shall be deemed to be given when actually received by the
addressee;
h. Expenses. Except as otherwise provided for in this Agreement,
each party shall be solely responsible for all expenses incurred
by it in connection with this transaction (including, without
limitation, fees and expenses of its own counsel and
accountants);
i. Brokers. Company and Shareholder represent and warrant that
there are no persons or entities to whom sales commissions are
due for services rendered to Company in connection with this
transaction. Each of the parties hereto indemnifies the other
from and against any obligation or liability, contingent or
otherwise, for broker's or finder's fees, with respect to the
matters provided for in this Agreement, and, if any such
obligation or liability exists, it shall remain the obligation of
the party creating the obligation;
j. Severability. If any term or provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of
law, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the
economic or legal substance of the transaction contemplated
hereby is not affected in any materially adverse manner to
either party;
k. Gender and Number. Whenever the context here requires, the
gender of all words shall include the masculine, feminine and
neuter, and the number of all words shall include the singular
and plural;
l. Successors or Assigns. This Agreement may be assigned by Buyer
and if it is so assigned, it shall inure to the benefit of, and
be binding upon,' the successors, heirs, personal representatives
or assigns of the parties;
m. Force Majeure. Neither party shall be liable nor deemed to be in
default for any delay or failure in performance under this
Agreement resulting directly or indirectly, from Acts of God,
civil or military authority, acts of public enemy, war,
accidents, fires, explosions, earthquakes, floods, failure of
transportation,non-appropriation, or any similar cause beyond the
reasonable control of either party;
n. Time of Essence. Time shall be of the essence with respect to
this Agreement and performance by the parties with all terms
contained in this Agreement;
o. Third Parties. Nothing in this Agreement shall create, or be
interpreted to create, any rights in any third parties;
p. Dispute Resolution.
i. Agreement of Parties: The parties agree that in the event of
any dispute between the parties, whether past, present or
- 15 -
future, of any nature and of any kind, they will meet
to resolve such disputes by informal discussion
and in good faith. In the event that the parties
are unable to resolve the controversy or dispute,
the aggrieved party shall submit the matter to be
resolved by arbitration before Litigation Arbiters,
P. 0. Box 1238, Covington, Louisiana 70434 (Phone
No. (504) 893-6910) (hereinafter "Litigation Arbiters").
The parties shall agree on the selection of one individual
arbitrator from the list of former judges associated with
Litigation Arbiters to be the sole arbitrator in any
dispute. The parties shall be deemed to have made the
Litigation Arbiters' rules a part of this Agreement
to the extent that the Litigation Arbiters' rules
do not conflict with the terms of this Agreement;
ii. Place of Hearing: Arbitration shall take place in
Mobile, Alabama with Litigation Arbiters;
iii. Representation of Counsel: Any party may be
represented at the hearing by counsel or by other
authorized representative;
iv. Stenographic Record: There shall be an official
stenographic record of any hearing conducted;
v. Attendance at Hearings: Persons having a direct
interest in the arbitration are entitled to
attend hearings. It shall be discretionary with
the arbitrator to determine the propriety of the
attendance of any other person;
vi. Discovery: The parties shall be entitled to
conduct discovery in accordance with Alabama Code
of Civil Procedure. It shall be discretionary
with the arbitrator to make determinations
regarding the propriety of discovery and any
abuses thereof,
vii. Proceedings: Each party shall have equal time and
opportunity for submission of arguments and
evidence;
viii.Post Hearing Briefs: Post hearing briefs must be
filed within fifteen (15)working days of the
hearing unless both parties agree otherwise;
- 16 -
ix. Arbitration in the Absence of a Party: The arbitration may
proceed in the absence of any party who, after notice,
fails to be present. An award shall not be made solely on
the default of a party. The arbitrator shall require the
attending party to submit evidence in support of its claim;
x. Evidence: The arbitrator shall be the judge of the
relevancy and materiality of the evidence offered, and
conformity to the Alabama Code of Evidence shall be
necessary;
xi. Time of Award: The award shall be executed by the
arbitrator not later than thirty (30) days from the date of
hearing unless both sides agree otherwise;
xii. Form of Award: The award shall be in writing, shall state
the reasons for judgment, and shall be signed and dated by
the arbitrator;
xiii.Witness Expenses: The expenses of witnesses for either side
shall be paid by the party producing such witness;
xiv. Binding Award: The parties agree that, except as expressly
provided for herein, the arbitrator's award shall be binding
and that each party shall be bound by any award or decision
rendered by the arbitrator pursuant to this Agreement;
xv. Authority of Arbitrator. The arbitrator shall retain all
authority and power that an ordinary judge retains,
including, without limitation, the power to issue
injunctions and award liquidated damages. The arbitrator
shall be required to apply Alabama and federal subject
matter law; and
xvi. Appeal: Findings of fact shall not be appealable. However,
any incorrect application or interpretation by the
arbitrator of substantive, procedural or evidentiary
subject-matter law is appealable to a court of competent
jurisdiction.
- 17 -
In witness whereof, the parties have executed this Agreement on the date set
forth by their signatures below:
COMPANY:
Dibbs Internet Services, Inc., An Alabama corporation
/s/
Diane Summers, Individually
and as a Shareholder
DATE: July 28,1999
BUYER:
Advanced Wireless Systems, Inc.
/s/
Monte Julius
President
DATE: 7-28-99
- 18 -
SELLER'S EXHIBITS TO THAT CERTAIN
AGREEMENT TO PURCHASE ASSETS
BY AND BETWEEN
ADVANCED WIRELESS SYSTEMS, INC.
AND
DIBBS INTERNET SERVICES, INC.
Exhibit "A": List of trade names, trademarks, trademark registrations,
trade name registrations and Internet domain names: Dibbs
Internet Services, Inc.
Exhibit "B": Detailed list of all assets to be transferred. See attached.
Exhibit "B- 1": Detailed list of all equipment to be retained by Company.
Exhibit "B-2": Detailed list of all assets described in Section I (c) of
the Agreement.
Exhibit "C": Detailed list of the software, software agreements and
source codes for the software. Solaris
Exhibit "D": Detailed list of the copyrights and copyright agreements.
None
Exhibit "F": Detailed list of the licenses and license agreement. None
Exhibit "F": Detailed list of the authorized dealer agreements,
certification agreements and dealer certification agreements
of the Company used and/or useful in its business operations.
None.
Exhibit"G": Detailed list of all processes, know-how, discoveries,
improvements, designs,trade secrets, shop and royalty rights
and all other types of proprietary intellectual property of
the Company. None.
Exhibit "H: Detailed list of all accounting software and billing
software, all source codes related to the accounting and
billing software , programs, credit card machines, credit
card agreements and other similar property and rights of the
company. ISP Track & IC Verify only.
Exhibit "I": A detailed list setting forth the names, addresses,
account numbers, telephone numbers, payment history and
account balance of each subscriber of Company and all
agreements to sell subscriber lists.
- 1 -
Exhibit "J": A list of the following:
a) All connections to the Internet. Example: Frame
Relay T I with 128KCIR to UUNET, and 6mbps
Fractional T3 to Sprintlink; BBN Planet by GTE;
TI
b) All routing protocol used. Example: BGP4 full route
with UUNET, BGP4 Customer route with Sprintlink and
OSPF internal; to be delivered
c) All routing and RAS equipment used; Cisco 2501
d) All IP blocks with ownership and portability.
Example: 192.168.0.0/18 -- UUNET, nonportable; None
e) Company's entire hardware platfon-n, operating
system, software version for DNS, smtp, pop3, http,
radius, http, and mailing list servers; To be
delivered
f) All other servers not listed above, such as Real
Audio, Chat, SQL, and MUD servers; None
g) All E-commerce platforms used. Example: Oracle 8i on
HP UX, Cybercash on Linux PIU450; Raven
h) All scripting language used for web servers, such as
Perl 5, VBScript, C, Java Serviet, Java Script, Java
Applet; Perl 5 and Java
i) What software is used for billing; ISP Track IC
Verify; and
j) How the billing system interfaced to the Raidus
accounting data files. Billing system is not
interfaced.
Exhibit "K": All customers/ subscribers, customer/subscriber agreements,
agreements to sell subscriber lists, subscriber/ customer
lists, rights to income, maintenance agreements, and
agreements of any nature used in the operation of the business
of the Company. On line sign up form; customer list to be
delivered; Amazon provides income; no maintenance agreement;
credit card processing agreement.
Exhibit "L": A list of any litigation, arbitration proceedings,
investigation or inquiries pending or threatened against the
Company, its business any of its assets, any judgments,
orders, writs, or an injunction of any court, arbitrator or
any governmental department, commission, board, bureau, agency
or instrumentality. None.
- 2 -
Exhibit "M": A list of any third parties required to transfer any of the
Purchased Assets or any rights to use and/or operate any of
the Purchased Assets.
Exhibit "N": Copies of income tax returns, bank statements (without checks)
and financial statements of the Company for the last three (3)
years and for operations for 1999 from January 1, 1999
through June 30, 1999.
Exhibit "O": Opinion Letter of counsel.
Exhibit P: Rights to numbers: 661-6349 (voice); 661-8778 (data line)
- 3 -
Exhibit B
Dibbs Internet
July 9,1999
The following items will be included with the sale of my company:
Sun Sparc
OS: Solaris v2.4
Machine name: cafe
128MB RAM
4GB internel harddrive
3.5 floppy drive
Monitor
Keyboard
Mouse
Laser mouse pad
Note: Fully configured with mail server, authentication server, DNS, TCP
wrappers, crons for automated backups, web stats, etc., misc programs, batch
files, etc. Serves as the main server for my internet w ork and services.
Sun Sparc
OS: Solaris v2.4
Machine name: java
96MB RAM
2GB internal harddrive
2GB external 2GB harddrive (Sun)
3.5 floppy drive
Monitor
Keyboard
Mouse
Laser mouse pad
Note: Fully configured. Dedicated to hosting commercial websites.
Additional Sun Accessories:
Sun external CDROM drive
Solaris v2.4 software on CD
Miscellaneous manuals
Racer (IBM clone) Pentium-233
Machine name: chicory
OS: FreeBSD v2.2.6
64MB RAM
4GB harddrive
3.5 floppy drive
CDROM drive
Monitor
- 1 -
Keyboard
FreeBSD v2.2.6 software on CD
Note: Fully configured. Hosts Secure server (SSL) and commercial websites.
Includes FrontPage extensions support.
USRobotics Total Control Enterprise Network Hub
Chassis w/ built in power supply
Duel TI/PRI card
HiPerARC (Access Router Card)
NMC (Network Management Card)
72 digital modems (12 quad cards & 1 DSP card) - supports Analog, MultiLink or
ISDN
callers (69 D channels, 3 B channels)
x2 and V.90 support
USRobotics Total Control Enterprise Network Hub
Chassis w/ built in power supply
Duel T1/PRI card
NetServer PRI Card
NMC (Network Management Card)
48 digital modems (12 quad cards) - supports Analog, MultiLink or ISDN callers
(46 D channels, 2 B channels)
x2 and V.90 support
Total Control Enterprise Network Hub Documentation on CD
Total Control Manager software
Miscellaneous Total Control related manuals
BackUPS
APC 1250 BackUPS (2)
TrippLite 1400 (2)
Network Accessories:
Hewlett Packard external SureStore 6000 tape drive
4 Hewlett Packard tapes with current backups of all machines
Hewlett Parkard SureStore Backup software on CD
Cisco 2500 Router
10-BaseT Transceiver
Solo Encore Digital Link DSU/CSU
Asante 10T Hub/12
Network cables
Miscellaneous Items:
Miscellaneous equipment cables
Miscellaneous power cables
Billing software
ICVerify credit card processing software
- 2 -
BILL OF SALE
I Diane Summers, President of Dibbs Internet Services Inc. do sell to Advanced
Wireless Systems Inc. as per Agreement between Dibbs Internet Services Inc.
and Advanced Wireless Inc. The above named corporation Dibbs Internet
Services will become the property of Advanced Wireless Systems Inc. upon
receipt of $225,000.00. $25,000.00 has been pre-paid, balance remaining of
$200,000.00.
All revenues for Dibbs Internet Services and operating expenses will become
the property of Advanced Wireless Systems Inc. as of August 25, 1999.
Advanced Wireless will compensate Diane Summers $1,200.00 per week during the
transition period. Current project time frame is no more than 45-60 days from
the date of this receipt.
Witnessed this day the $200,000.00 balance paid to Diane Summers as payment
in full.
Diane Summers
President
Dibbs Internet Services Inc.
/s/
Date: August 23, 1999
Advanced Wireless Systems, Inc.
/s/
Date: August 23, 1999
Witnessed by: /s/
Date: August 23, 1999