Asset Purchase Agreement
THIS AGREEMENT made as of August 7, 2003 between iDial Networks, Inc. a Nevada
Corporation with offices at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx,
Xxxxx 00000, (the "Buyer") and GBLK Communications LLC, a Florida Limited
Liability Corporation with offices at 000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000,
Xxxxx, Xxxxxxx 00000.
(the "Seller")
IN CONSIDERATION of the mutual covenants and agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. Purchase of Assets. The Buyer agrees to purchase from the Seller and the
Seller agrees to sell to the Buyer all of the undertaking, property and
assets of the Seller used in the sellers business (the "Business") as a
going concern, of every kind and description and wherever situated,
including but not limited to the assets described in Schedule "A" hereto
(the "Assets").
2. Purchase Price. The purchase price (the "Purchase Price") payable by the
Buyer to the Seller for the Assets shall be:
(a) 25,168,212 shares of Buyers common stock (IDNW) to be paid
according to Schedule "B" (b) $118,000 in Note Payable to Xxxxxxx
Xxxxxxx
(c) Assumption of Debt listed in Schedule "C"
3. Payment of Purchase Price. The Purchase Price shall be paid and satisfied
at Closing by the Buyer as follows:
(a) by delivering to the Seller's attorneys, concurrently with the
execution of this Agreement, a cheque payable to the Seller's
attorneys in trust in the amount of 25,168,212 IDNW shares as a
deposit (the "Deposit"); and
(b) by delivering to the Seller the balance of the Purchase Price,
subject to the usual adjustments, on the Closing Date, by
certified cheque or bank draft.
(c) If the Buyer fails to complete this transaction as a result of
the breach by the Buyer of any of its obligations in this
Agreement, the Deposit, together with interest thereon may be
retained by the Seller as liquidated damages and shall be
obtained by the Seller making the requisite demand upon the
Seller's Attorney. If the Buyer fails to complete this
transaction for any other reason, including but not limited to
the non-fulfillment of any of the conditions for the Buyer's
benefit set forth in this Agreement, the Seller shall not be
entitled to the Deposit and it shall be forthwith released to the
Buyer.
4. Taxes. Any sales tax, use tax, excise tax, transfer tax, recordation tax,
or other tax imposed upon the transfer of the Assets from the Seller to the
Buyer shall be divided equally between the Seller and the Buyer. All state
and local personal property taxes shall be adjusted as of the Closing Date.
5. Allocation of Purchase Price. The Purchase Price shall be allocated among
the Assets according to an allocation which the parties undertake settle
upon, acting reasonably, prior to Closing. The Seller and the Buyer agree
that the amounts so attributed to the Assets are the respective fair market
values thereof, and shall file in mutually agreeable form all elections
required or desirable under the Internal Revenue Code of 1986, as amended
in respect of the foregoing allocations.
6. Investigation. After fulfillment or waiver of all conditions in this
Agreement which are intended for the benefit of the Buyer, the Buyer and
its advisers shall during business hours have reasonable access to the
Premises, books, leases and other records of the Business for the purpose
of investigating the business and affairs of the Business.
7. Closing Date. Time shall be of the essence of this Agreement. The closing
of this transaction shall take place at 2:00 p.m. on August 7, 2003 bor
such earlier or later date as may be mutually acceptable to the parties
hereto (the "Closing Date" or "Closing") at the office of Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
or at such other place as may approved in writing by the parties hereto or
their respective attorneys.
8. Insurance. The Seller shall, up to Closing maintain in force all insurance
presently in force on the Assets or in respect of the Business. Any
proceeds of insurance payable in respect of any event which occurs on or
prior to the Closing Date shall be received in trust for the Buyer and
shall promptly be paid over to the Buyer at Closing if the Buyer shall
complete the purchase of the Assets, failing which the Seller shall be
absolutely entitled to such proceeds. The Buyer acknowledges that it will
be responsible for placing its own insurance in respect to the Assets and
Business at or before Closing if the Seller's insurance is not transferred
to the Buyer on Closing if the Seller's insurance is not transferred to the
Buyer on Closing.
9. Normal Course of Business. After the date of this Agreement, the Seller
shall cause the Business to be carried on in the normal course of business.
10. Lease of Business Premises. Within five (5) days after the date of this
Agreement, the Seller shall deliver to the Buyer a copy of the lease of the
premises of the Business. On or before Closing, the Seller agrees to obtain
the landlord's consent to an assignment of such lease to the Buyer. On or
before Closing, the Seller and the Buyer agree to execute an assignment of
the Seller's interest in the lease to the Buyer.
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11. Third Party Consents. The Seller shall use its best efforts to obtain
consents of all requisite parties to the assignment of contracts forming
part of the Assets; and the Seller shall pay the cost of soliciting such
consents. The Buyer will cooperate in obtaining such consents.
12. Representations and Warranties. The Seller represents and
warrants to the Buyer as follows:
(a) The Seller is not and will not be a non-resident alien within the
meaning of the Internal Revenue Code of 1986, as amended.
(b) All financial statements provided to the Buyer have been prepared
in accordance with generally accepted accounting principles
applied on a consistent basis and present fairly the financial
position of the Business as at the date thereof and include and
disclose the material liabilities (either actual, accrued or
contingent and whether direct or indirect) of the Business as of
such date.
(c) The Business is not now, nor at Closing will be bound by any
agreement whether written or oral with any employee providing for
a specified period of notice of termination nor providing for any
fixed term of employment; and has now and at Closing will have no
employees who cannot be dismissed upon such notice as is required
by statutory or common law;
(d) The Business will not, at Closing be bound by any outstanding
contract or commitment which requires prior approval of the
assignment thereof by the Seller to the Buyer resulting from the
consummation of the transactions provided for herein, unless such
consent is obtained and provided to the Buyer on Closing.
(e) The Seller now has and at Closing will have a good and marketable
title to the Assets, free and clear of any and all claims, liens,
encumbrances and security interests whatsoever.
(f) The Business is not now and at Closing will not be in arrears or
in default in respect of the filing of any required state, local
or foreign or other return, and at each of such times (i) all
taxes, filing fees and other assessments due and payable or
collectable from the Business shall have been paid or collected,
(ii) no claim for additional taxes, filing fees or other amounts
and assessments has been made which has not been paid, and (iii)
to the best of the Seller's knowledge, no such return shall have
contained any misstatement or concealed any statement that should
have been included therein. The Business has withheld and will
withhold up to Closing from each payment made to any employee the
amount of all taxes (including but not limited to income tax) and
other deductions required to be
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withheld therefrom and have paid or will pay such amounts to the
proper tax or other receiving authority.
The representations and warranties of the Seller contained herein
shall survive the Closing and shall continue in full force and effect
for the benefit of the Buyer for a period of three years following the
Closing Date after which time the Seller shall be released from all
obligations and liabilities hereunder in respect of such
representations and warranties except with respect to any claims made
by the Buyer in writing prior to the expiration of such period.
13. Conditions for the Buyer's Benefit. This Agreement is conditional for a
period of 180 days upon the following conditions:
(a) The Buyer reviewing the source code of acquired software assets;
and
(b) The Buyer validating all acquired assets, both Software and
Hardware, and the condition to the satisfaction of the Buyer; .
The above conditions have been inserted for the sole benefit of the
Buyer and may be waived by the Buyer in whole or in part, without
prejudice to its rights of termination in the event of non-fulfillment
of any other condition in whole or in part. If any of the foregoing
conditions shall not have been fulfilled or waived by the Buyer on or
before the Closing Date, the Buyer may terminate this Agreement by
notice in writing to the Seller in which event the Deposit shall be
forthwith returned to the Buyer without interest or deduction and the
Buyer and the Seller shall be released from all obligations under this
Agreement.
14. Closing Deliveries. At Closing, the parties shall deliver the following, in
addition to any other documents, agreements or deliverables required or
provided by this Agreement:
(a) the Seller shall deliver to the Buyer:
(i) possession of the Assets;
(ii) a xxxx of sale conveying the Assets to the Buyer;
(iii)a Certificate certifying that all representations and
warranties contained in this Agreement are true and correct
in all material respects as of the Closing Date;
(iv) all other instruments, assurances, transfers, assignments,
consents, elections (and supporting materials) under the
Internal Revenue Code of 1986, as amended, and other
documents as the Buyer's attorneys consider reasonably
necessary or desirable to validly and effectively complete
the transfer the Assets to the Buyer; and
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(b) the Buyer shall deliver to the Seller:
(i) the balance of the Purchase Price payable on Closing; and
(ii) all other instruments, assurances and documents as the
Seller's attorneys consider reasonably necessary or
desirable to validly and effectively complete this
transaction.
15. Non-Competition. The Seller will not (without the prior written consent of
the Buyer) at any time within 2 years from the date hereof either
individually or in partnership or jointly or in conjunction with any person
or persons, firm, association, syndicate, company or corporation, as
principal, agent, employee officer, director or shareholder or in any other
manner whatsoever carry on or be engaged in or concerned with or interested
in, or advise, lend money to, guarantee the debts or obligations of, or
permit his name or any part thereof to be used or employed by or associated
with, any person or persons, firm, association, syndicate, company or
corporation engaged in or concerned with of interested in, any business
which competes with the Business (except as a shareholder, officer,
director or employee of the Buyer). On Closing, the Seller agrees to
deliver to the Buyer a non-competition agreement, in form and substance
satisfactory to the Buyer, which incorporates this provision.
16. Addresses for Service
The address for service of notice of each of the parties hereto is as
follows:
(a) iDial or the Acquirer:
iDial Networks, Inc.
0000 Xxxxxxxxxx Xx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxx, President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to:
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Xxxxxxx Xxxxxxxxx, Esq.
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
(b) GBLK or the Principal Shareholders
GBLK Communications L.L.C.
0000 Xxxxx Xxxx 000 Xxxxxx # 000
Xxxxxxxx XX 00000
Phone: 866-WWW-GBLK
17. General.
(a) Schedules and other documents attached or referred to in this
Agreement are an integral part of this Agreement.
(b) The division of this Agreement into paragraphs and subparagraphs
and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation
hereof.
(c) This Agreement constitutes the entire agreement among the parties
and except as herein stated and in the instruments and documents
to be executed and delivered pursuant hereto, contains all of the
representations and warranties of the respective parties. There
are no oral representations or warranties amount the parties of
any kind. This Agreement may not be amended or modified in any
respect except by written instrument signed by both parties.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
(e) Any notice required or permitted to be given hereunder shall be
in writing and shall be effectively given if (i) delivered
personally, (ii) sent by prepaid courier service or mail, or
(iii) sent prepaid by facsimile, telex or other similar means of
electronic communication (confirmed on the same or following day
by prepaid mail) addressed to the recipient at the address of the
recipient noted above. Any notice so given shall be deemed
conclusively to have been received when so personally delivered
or sent by telex, facsimile or other electronic communication or
on the second day following the sending thereof by private
courier or mail. Any party hereto or others mentioned above may
change any particulars of its address for notice by notice to the
others in the manner aforesaid.
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(f) This Agreement shall enure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
18. Applicable Law. This Agreement is subject to the laws of the
State of Texas.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
IDIAL NETWORKS, INC.
By:
---------------------------------
Xxxx X. Xxxx, President
GBLK COMMUNICATIONS LLC
By:
----------------------------------
Xxxxxxx Xxxxxxx, President
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Schedule "A"
List of Assets
(1) One Cisco AS 5300 (2) One 3com Ethernet Switch
(3) One Compaq UPS (4) One Sentry Remote Reboot Switch
(5) One Custom built Dialogic Server consisting of: - Three D/240 PCI T1 boards
- One DCB/960 Conferencing board - Cables and connectors
(6) One Aculab Custom built Conferencing Server - One Shark Card PCI 2 T1s
(7) Four Generic Windows Servers custom built (8) Rack shelves and mounting
equipment
Inventory of Software Products owned by GBLK
XXX XXX Proxy
WebPhone
Audio mixer/RTP relay bridge (not finished)
Conferencing using the PSTN (Dialogic cards)
Gcard (webpage-controlled)
Gcall (conf-on-the-go, DTMF-controlled)
Callback Third party call control using SIP (not
finished) Callback using the Dialogic
platform Callback windows client
Websites Super (for top-level supervisor)
Agent (for agents)
Subscriber (for people that make calls)
Database utilities
"Webcmds" interface between database clients (our programs) and the databases
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Schedule "B"
Stock Issuance
Name: Xxxx Xxxxxx
Address: 00000 Xxxx Xxxxxxx Xxxx xxxxx
Xxxxx # 000 Xxxxxxxx, Xxxxxxx 00000 Stock Amount: 4,831,788
Name: Xxxxxxx Xxxxx Stock Amount: 4,831,788
Address: 0000 Xxxxx Xxxx 000 Xxxxxx
Xxxxx Xxxxxxx 00000
Name: Xxxxxxx Xxxxx
Address: 2841 Xxxxx Xxxx 000 Xxxxxx Xxxxx Xxxxxx: 4,831,788
Xxxxx # 000 Xxxxxxxx, Xx 00000
Name: Xxxxxxx Xxxxx
Address: 2841 Xxxxx Xxxx 000 Xxxxxx Xxxxx Xxxxxx: 4,831,788
Xxxxx # 000 Xxxxxxxx, Xx 00000
Name: Xxxxxx X. Xxxxx Ch. E. LLC Stock Amount: 4,831,788
Address: 0000 Xxxxxxxx Xxx.
Xxxxx Xxxxxxx 00000
Name: Sante Fe Capital Group Stock Amount: 900,000
Address: 000 Xx. Xxxxxxxxx, Xxxxx 000
Xxxxx Xx, XX 00000
Name: X.X. Xxxx Stock Amount: 109,272
Address: 0000 Xxxxxx Xxxxx Xxxx
Xxxxxxxxx XX 00000
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Schedule "C"
Debt Assumption
Note to:
Xxxxxx X. Xxxxx Ch. E. LLC Note Amount: $27,000
Address: 0000 Xxxxxxxx Xxx.
Xxxxx Xxxxxxx 00000
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