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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is made and entered into
effective as of October 31, 2000 ("EFFECTIVE DATE") by and between XETA
TECHNOLOGIES, INC., an Oklahoma corporation ("PURCHASER"), and PRO NETWORKS
CORPORATION, a Missouri corporation ("SELLER") and XXXXX XXXX XXXXXXX,
individually and as Trustee of the Xxxxx Xxxx Xxxxxxx Revocable Living Trust
dated December 17, 1999, and XXXX XXXXXX XXXXXXX, individually and as Trustee of
the Xxxx Xxxxxx Xxxxxxx Revocable Living Trust dated December 17, 1999
(collectively hereinafter referred to, jointly and severally, as the "PRINCIPAL
SHAREHOLDER").
RECITALS
A. Seller is in the business of providing computer networking
sales and service (the "BUSINESS").
B. Seller desires to sell the Business to Purchaser as a going
concern and in connection therewith sell substantially all of Seller's assets to
Purchaser, and Purchaser desires to purchase such Business and assets, and to
assume certain of Seller's liabilities relating thereto, upon the terms and
conditions set forth in this Agreement (the "ASSET PURCHASE").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, Seller and Purchaser agree as follows:
ARTICLE I
TERMS AND INTERPRETATION
1.1 Definitions. Capitalized terms used in this Agreement shall have
the following meanings:
1.1.1 "AFFILIATE" of, or "AFFILIATED" with, a specified person
or entity means a person or entity that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, the specified person or entity.
1.1.2 "ASSETS" has the meaning set forth in Section 2.1.
1.1.3 "ASSUMED LIABILITIES" means the liabilities and
obligations of the Seller or relating to the Seller's business or
operations to be assumed by Purchaser at the Closing in accordance with
Section 2.7.
1.1.4 "CLOSING" has the meaning set forth in Section 3.1.
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1.1.5 "CLOSING DATE" has the meaning set forth in Section 3.1.
1.1.6 "CLOSING DATE BALANCE SHEET" has the meaning set forth
in Section 2.5.
1.1.7 "CLOSING EQUITY CERTIFICATE" has the meaning set forth
in Section 2.5.
1.1.8 "CLOSING EQUITY VALUE" has the meaning set forth in
Section 2.5.
1.1.9 "CODE" means the Internal Revenue Code of 1986, as
amended.
1.1.10 "DAMAGES" has the meaning set forth in Section 10.2.
1.1.11 "EARNOUT" has the meaning set forth in Section 2.2(c).
1.1.12 "EBITDA" has the meaning set forth in Section 2.2(c).
1.1.13 "EBITDA TARGET" has the meaning set forth in Section
2.2(c).
1.1.14 "EMPLOYMENT AGREEMENT" has the meaning set forth in
Section 4.1.
1.1.15 "ENCUMBRANCES" means all liens, encumbrances,
mortgages, pledges, security interests, conditional sales agreements,
charges, options, preemptive rights, rights of first refusal,
reservations, restrictions or other encumbrances or material defects in
title.
1.1.16 "ENVIRONMENTAL, HEALTH AND SAFETY LAWS" means any
federal, state or local Law, including, without limitation, any
judicial or administrative interpretation thereof, any judicial or
administrative order, consent decree or judgment, or agreement with any
Governmental Authority, relating to (a) pollution, exposure to oil,
pollutants, contaminants, hazardous or toxic materials or waste, (b)
the protection, preservation or restoration of the environment,
including laws relating to exposures to, or emissions, discharges,
releases or threatened releases of oil, pollutants, contaminants,
hazardous or toxic materials or wastes into ambient air, surface water,
ground water or land surface or subsurface strata or (c) the
manufacture, processing, labeling, distribution, use, treatment,
storage, transport, handling or disposal of oil, pollutants,
contaminants, hazardous or toxic materials or wastes or relating to the
environment, plant and animal life, natural resources or health, safety
or any Hazardous Substance, in each case as amended from time to time
prior to the Closing Date. "ENVIRONMENTAL, HEALTH AND SAFETY LAWS"
include, without limitation, (i) the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980 (CERCLA),
42 U.S.C. Sections 9601 et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Sections 1251 et seq., the Toxic Substances
Control Act, 15 U.S.C. Sections 2601 et seq., the Clean Air Act, 42
U.S.C. Sections 7401 et seq., the Safe Drinking Water Act, 42 U.S.C.
Sections 300f et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Sections 5101 et seq., the Atomic Energy Act, 42 U.S.C. Sections
2011 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Sections 136 et seq., and the
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Occupational Safety and Health Act, 29 U.S.C. Sections 651 et seq., in
each case as amended from time to time prior to the Closing Date, and
any other federal, state or local Laws now or hereafter relating to any
of the foregoing, and (ii) any common law or equitable doctrine
(including, without limitation, injunctive relief and tort doctrines
such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of, effects of or exposure to
any Hazardous Substance.
1.1.17 "ESCROW AGENT" means BANK ONE TRUST COMPANY, N. A.
1.1.18 "ESCROW AGREEMENT" means the agreement among Seller,
Purchaser and the Escrow Agent in the form attached as Exhibit 1.1.18
governing the receipt and application of the Escrow Deposit.
1.1.19 "ESCROW DEPOSIT" means the funds referred to in Section
2.2(b), which shall be placed into an interest-bearing escrow account
during the Equity Determination Period to secure Purchaser against
overvaluation of Seller's stockholders' equity, including the
uncollectibility of Seller's receivables.
1.1.20 "EQUITY DETERMINATION PERIOD" has the meaning set forth
in Section 2.5.
1.1.21 "EQUITY SHORTFALL" has the meaning set forth in Section
2.4.
1.1.22 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
1.1.23 "EXCLUDED ASSETS" has the meaning set forth in Section
2.1.
1.1.24 "EXCLUDED LIABILITIES" has the meaning set forth in
Section 2.7.
1.1.25 "FINANCIAL STATEMENTS" has the meaning set forth in
Section 5.6.
1.1.26 "GAAP" means generally accepted accounting principles
consistently applied for all periods involved.
1.1.27 "GOVERNMENTAL AUTHORITY" means any federal, state,
local or foreign government, political subdivision or governmental or
regulatory authority, agency, board, bureau, commission,
instrumentality or court or quasi-governmental authority.
1.1.28 "HAZARDOUS SUBSTANCES" means any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental, Health and Safety Law. The term "Hazardous Substances"
includes, without limitation, any substance to which exposure is
regulated by any Governmental Authority or any Environmental, Health
and Safety Law including, without limitation, any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance, hazardous
waste, special waste, industrial substance or petroleum or any
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derivative or by-product thereof, radon, radioactive material, asbestos
or asbestos containing material, urea formaldehyde foam insulation,
lead or polychlorinated biphenyls.
1.1.29 "INDEMNIFIED PARTY" has the meaning set forth in
Section 10.7.
1.1.30 "INDEMNIFICATION PERIOD" has the meaning set forth in
Section 10.1.
1.1.31 "INDEMNIFYING PARTY" has the meaning set forth in
Section 10.7.
1.1.32 "KEY EMPLOYEES" has the meaning set forth in Section
4.4.
1.1.33 "LAW" or "LAWS" means any and all federal, state, local
or foreign statutes, laws, ordinances, proclamations, codes,
regulations, licenses, permits, authorizations, approvals, consents,
legal doctrines, published requirements, orders, decrees, judgments,
injunctions and rules of any Governmental Authority, including, without
limitation, those covering environmental, Tax, energy, safety, health,
transportation, bribery, record keeping, zoning, discrimination,
antitrust and wage and hour matters, in each case as amended and in
effect from time to time.
1.1.34 "LEASES" means all leases for facilities leased by the
Seller.
1.1.35 "LETTER OF INTENT" means that certain letter of intent
dated October ___, 2000 by and between Purchaser and Seller.
1.1.36 "LOSS" or "LOSSES" means all liabilities, losses,
claims, damages, actions, suits, proceedings, demands, assessments,
adjustments, fees, costs and expenses (including specifically, but
without limitation, reasonable attorneys' fees and costs and expenses
of investigation), net of (i) income Tax effects with respect thereto
(including, without limitation, income Tax benefits recognized in
connection therewith and income Taxes upon any indemnification recovery
thereof) and (ii) insurance proceeds.
1.1.37 "MINIMUM REQUIRED EQUITY" has the meaning set forth in
Section 2.3.
1.1.38 "OPTION PLAN" has the meaning set forth in Section 4.4.
1.1.39 "PENSION PLAN" means and includes each "EMPLOYEE
PENSION BENEFIT PLAN" maintained by the Company (within the meaning of
Section 3(2)(A) of ERISA).
1.1.40 "PERMITS" has the meaning set forth in Section 5.12.
1.1.41 "PERMITTED DISTRIBUTIONS" means distributions made by
Seller to its shareholders between the Valuation Date and the Closing
Date in an amount not to exceed $1,000,000 in the aggregate and which
do not reduce Seller's Equity to an amount which is less than the
Minimum Required Equity.
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1.1.42 "PERMITTED ENCUMBRANCES" means (a) any Encumbrances
reserved against in the Financial Statements, (b) Encumbrances for
property or ad valorem Taxes not yet due and payable or which are being
contested in good faith and by appropriate proceedings and (c)
obligations under operating and capital leases which are listed in
Schedule 5.10.
1.1.43 "PRORATED TAXES" has the meaning assigned in Section
3.6.
1.1.44 "TAXES" means all taxes, charges, fees, levies or other
assessments including, without limitation, income, gross receipts,
excise, property, sales, withholding, social security, unemployment,
occupation, use, service, service use, license, payroll, franchise,
transfer and recording taxes, fees and charges, imposed by the United
States or any state, local or foreign government or subdivision or
agency thereof, whether computed on a separate, consolidated, unitary,
combined or any other basis; and such term shall include any interest,
fines, penalties or additional amounts attributable to or imposed with
respect to any such taxes, charges, fees, levies or other assessments.
1.1.45 "UCC" means the Uniform Commercial Code as the same is
in force in the jurisdiction implicated in any particular reference
herein.
1.1.46 "VALUATION BALANCE SHEET" means Seller's Balance Sheet
as of the Valuation Date.
1.1.47 "VALUATION DATE" means August 31, 2000.
1.1.48 "WELFARE PLAN" means and includes each "EMPLOYEE
WELFARE BENEFIT PLAN" maintained by Seller (within the meaning of
Section 3(1) of ERISA).
1.2. Interpretation. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in Article I and elsewhere in this
Agreement include the plural as well as the singular;
(b) Words of the masculine gender in this Agreement shall be
deemed and construed to include correlative words of the feminine and
neuter genders and words of the neuter gender shall be deemed and
construed to include correlative words of the masculine and feminine
genders;
(c) The words "herein," "hereof," and "hereunder" and other
words of similar import refer to this Agreement as a whole, including
all Schedules and Exhibits, and not to any particular Article, Section
or other subdivision;
(d) The terms "include," "includes" and "including" are not
limiting and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or;"
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(e) The term "MATERIAL" shall mean, or an event shall be
deemed to be "material," if its existence produces an effect or
variance of fifty thousand ($50,000) or more; and
(f) Whenever a statement of any party is qualified by that
party's knowledge, "KNOWLEDGE" means and includes the actual personal
knowledge of the person making such statement at the time or times that
such statement is made. If the statement is made by a corporation, the
knowledge of the corporation's officers and directors shall be imputed
to the corporation.
ARTICLE II
PLAN OF ACQUISITION
2.1. Acquisition of the Assets. Upon the terms and subject to the
conditions of this Agreement, at the Closing, the Seller agrees to sell, convey,
transfer, assign and deliver to Purchaser, and Purchaser agrees to purchase from
Seller, all of Seller's assets, properties, businesses, franchises, goodwill and
rights of every kind and character, tangible or intangible, real or personal,
whether owned or leased, other than the Excluded Assets (collectively, the
"ASSETS"), free and clear of all Encumbrances other than Permitted Encumbrances.
Without limiting the generality of the foregoing, the Assets shall consist of:
(a) all accounts and notes receivable of Seller;
(b) all inventory (including, without limitation, spare parts
inventory) and work-in-progress of Seller;
(c) all customer lists, sales records, credit data and other
information relating to customers of Seller;
(d) all rights, title and interest of Seller in, to and under
all existing contracts, leases and agreements, written and verbal to
which the Seller is a party;
(e) all right, title and interest of the Seller in computer
equipment and hardware used exclusively by the Seller, including,
without limitation, all central processing units, terminals, disk
drives, tape drives, electronic memory units, printers, keyboards,
screens, peripherals (and other input/output devices), modems and other
communication controllers, networking equipment, and any and all parts
and appurtenances thereto, together with all software licenses which
may be transferred and intellectual property with such computer
equipment and hardware;
(f) all of the furniture, fixtures, equipment, machinery,
tools, appliances, telephone systems, copy machines, fax machines,
implements, spare parts, supplies and all other tangible personal
property of every kind and description owned by Seller;
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(g) all motor vehicles and other transportation equipment of
Seller;
(h) all right, title and interest of Seller in and to and
under all licenses, franchises, permits, and other governmental
authorizations;
(i) all right, title and interest of Seller in, to and under
all intangible property of Seller, all goodwill associated therewith,
and all rights and privileges used in the conducting of the Business
and the right to recover for infringement thereon;
(j) the name "Pro Networks Corporation" and any trade names or
other assumed names under which Seller operates;
(k) copies of Seller's books, records, papers and instruments
of whatever nature and wherever located that relate to the Business or
the Assets or which are required or necessary for Purchaser to conduct
the Business from and after the Closing in the manner in which it was
being conducted before the Closing;
(l) all insurance proceeds and insurance claims of Seller that
relate exclusively to the Business or to all or any part of the Assets
and, to the extent transferable, the benefit of and the right to
enforce the covenants and warranties, if any, that the Seller is
entitled to enforce with respect to the Assets against its predecessors
in title, if any;
(m) all right, title and interest of the Seller in, to and
under all rights, privileges, claims, causes of action, and options
relating or pertaining exclusively to the Business or the Assets; and
(n) all other or additional privileges, rights, interests,
properties and assets of Seller of every kind and description and
wherever located, that are exclusively used or intended for the
exclusive use in connection with the Business as presently being
conducted.
The "EXCLUDED ASSETS" are the assets of the Seller listed in Schedule
2.1.
2.2. Purchase Price. The purchase price for the Assets shall be equal
to the sum of the following:
(a) The sum of $3,800,000 to be paid at Closing in cash or in
immediately available funds by wire transfer in accordance with the
wiring instructions set forth in Schedule 2.2(a);
(b) The sum of $200,000 ("ESCROW DEPOSIT") to be delivered to
the Escrow Agent at Closing in cash or in immediately available funds
by wire transfer in accordance with the wiring instructions set forth
in Schedule 2.2(b), pursuant to, and to be applied in accordance with,
the terms of the Escrow Agreement;
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(c) Up to an additional $4,000,000 total "EARNOUT" based upon
Seller's earnings before interest, taxes, depreciation and amortization
("EBITDA") for FY2001 and 2002 based on the following formula, which
assumes FY00 EBITDA of $2,750,000 and a 25% annual increase in Seller's
EBITDA ("EBITDA TARGET"), with a maximum annual Earnout of $2,000,000
for each of such fiscal years:
For FY01: $2MM times (FY01 EBITDA - $2.75MM)/$687,500
For FY02: $2MM times (FY02 EBITDA - 3.4375MM)/$859,375
For purposes of this provision, EBITDA will be calculated in accordance
with GAAP applied on a consistent basis, and the Earnout payable for
each year shall be paid in cash or in accordance with the wiring
instructions set forth in Section 2.2(a) by January 15th of the
following year.
2.3 Permitted Distributions. Purchaser's decision to enter into the
Asset Purchase is based on its expectation of growth in Seller's total
stockholders' equity between the Valuation Date and the Closing Date, and
Purchaser's obligation to close is contingent upon Seller's having a total
stockholders' equity (herein referred to as the "MINIMUM REQUIRED EQUITY") which
is not less than $1,500,000.
2.4 Escrow. The Escrow Deposit shall be held in escrow during the
Equity Determination Period pursuant to the Escrow Agreement. At the end of such
period the escrow shall be closed, whereupon (a) Purchaser shall receive out of
Escrow Deposit (i) that amount which is equal to the face value of Seller's
uncollected receivables which have not been collected by Purchaser at the end of
such time period as such uncollected receivables were booked as of the Valuation
Date less any amounts reserved by Seller against such receivables prior to the
Closing and (ii) the amount, if any, by which Seller's stockholders' equity as
of either the Valuation Date or the Closing Date is found to have been, in fact,
less than the Minimum Required Equity ("EQUITY SHORTFALL"), and (b) Seller shall
receive the full remaining balance of the Escrow Deposit together with the
re-assignment to it of all uncollected receivables, if any; provided that if the
Escrow Deposit is less than the amounts due to Purchaser pursuant to clause
2.4(a), Seller shall refund to Purchaser the amount of such deficiency to the
extent of the Equity Shortfall, if any. Purchaser will use its best efforts to
collect all assigned receivables during the Equity Determination Period.
2.5 Equity Determination. Seller shall perform and certify a physical
count of its inventory as of the Closing Date at which Purchaser and its duly
authorized representatives shall be entitled to be present. Seller's books shall
be closed as of the Closing Date consistent with past practice in accordance
with GAAP. A balance sheet for Seller as of the Closing Date ("CLOSING DATE
BALANCE SHEET") shall be delivered by Seller to Purchaser at or within sixty
(60) days after the Closing, and Purchaser shall have thirty (30) days following
such delivery ("EQUITY DETERMINATION PERIOD") to review the Closing Balance
Sheet to complete Purchaser's verification that Seller's receivables are
collectible and that there have been no material changes in the assets or
liabilities of Seller since the Valuation Date (other than the Permitted
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Distributions). At or before the end of the Equity Determination Period,
Purchaser shall deliver to the Seller a certificate ("CLOSING EQUITY
CERTIFICATE") signed by an officer of Purchaser indicating its determination of
the amount of Seller's total stockholder's equity of the Closing Date ("CLOSING
EQUITY VALUE") as determined by Purchaser in good faith and Purchaser's proposed
allocation of the Escrow Deposit.
2.6 Disagreement Regarding Equity Determination. Notwithstanding
Section 2.5 above, Seller and its representatives shall have the right for a
period of thirty (30) days after receiving the Closing Equity Certificate to
review its books and records as of the Closing Date and, if Seller desires, to
have an independent public accountant examine such book and records, for up to
an additional sixty (60) days (ninety (90) days in all following such receipt),
to verify Purchaser's calculation of the Closing Equity Value and the proposed
allocation of the Purchase Price. If Seller does not agree with Purchaser's
calculation of Closing Equity Value or proposed allocation of the Escrow
Deposit, the parties shall negotiate in good faith to agree upon such value and
allocation.
2.7 Assumed Liabilities. As further consideration for Asset Purchase,
Purchaser shall assume and discharge (a) all liabilities and obligations of
Seller which are properly shown and adequately reserved for in the Financial
Statements except those liabilities listed in Schedule 2.7, ("EXCLUDED
LIABILITIES"), and (b) all trade payables incurred by Seller after the date of
the Financial Statements and prior to the Closing in the ordinary course of
business.
2.8 Allocation of Purchase Price. The parties to this Agreement shall
allocate the Purchase Price among the Assets in accordance with attached Exhibit
2.8. The parties agree to file any and all applicable tax returns and other
required related tax schedules in accordance with such allocation and Section
1060 of the Internal Revenue Code and will not adopt or otherwise assert tax
positions inconsistent therewith. Purchaser and Seller shall each prepare and
file its Form 8594 for the taxable year in which the Closing takes place,
consistent with the requirements set forth in this Section 2.8.
ARTICLE III
THE CLOSING
3.1 Closing Time and Place. The consummation of the Asset Purchase and
the other transactions contemplated by this Agreement (the "CLOSING") shall take
place as soon as reasonably practicable after each party to this Agreement shall
have indicated to the other that it has satisfied or stands ready to satisfy all
conditions of Closing for which it is responsible, or at such other time and
place as Seller and Purchaser shall mutually agree, but not later than November
1, 2000, which date shall be referred to as the "CLOSING DATE." The Closing
shall take place at the offices of Purchaser's counsel, Xxxxxx & Xxxxx, P.C.,
000 Xxxxx Xxxx, Xxxxx, Xxxxxxxx 00000-0000.
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3.2 Seller's Deliveries. At the Closing, Seller will deliver to
Purchaser all of the items described in Section 8.10 hereof, including the Xxxx
of Sale referred to therein conveying to Purchaser all of Seller's right, title
and interest in and to all of the Assets. At or after the Closing, Seller shall
execute and deliver to Purchaser such other instruments of transfer as shall be
reasonably necessary or appropriate to vest in Purchaser good title to the
Assets, free and clear of all Encumbrances other than Permitted Encumbrances and
to comply with the purposes and intent of this Agreement.
3.3 Purchaser's Deliveries. At the Closing, Purchaser will deliver to
Seller all of the items described in Section 9.4 hereof.
3.4 Further Assurances. Seller and Purchaser agree that they shall, at
any time and from time to time after the Closing, upon request of the other
party, do, execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be required to
carry out the purposes and intents of this Agreement. No action taken or
document executed pursuant to this section shall increase the liability of
Seller or Purchaser beyond that contemplated by any other provision of this
Agreement.
3.5 Consents. To the extent that the assignment or transfer of any
contract or right to be assigned or transferred to Purchaser as provided in this
Agreement shall require the consent of the other party thereto, this Agreement
shall not constitute an agreement to assign or transfer the same if any
attempted assignment would constitute a breach thereof. Seller agrees that it
will use reasonable efforts which efforts shall not include the furnishing by
Seller of monetary or other consideration to obtain the consent of the other
parties to all Material Contracts to the assignment or transfer thereof to
Purchaser. Seller shall have no liability to Purchaser for failure to obtain any
such third party consent provided Seller complies with its obligations under
this section. Purchaser agrees that it will cooperate with and assist Seller in
its efforts to obtain any such consents. If Seller is unable to obtain any
necessary consent to an assignment or transfer to Purchaser of any Material
Contract, Purchaser shall have the right to terminate this Agreement pursuant to
Section 11.1 without liability to any party under this Agreement.
3.6 Prorations. Any paid or unpaid taxes or governmental charges or
assessments which are levied or assessed based solely on time periods (e.g.,
property taxes but not sales or income taxes), relating to the Assets for the
periods during which the Closing occurs ("PRORATED TAXES"), shall not be deemed
to be part of the Assumed Liabilities or Assets to be acquired by Purchaser, but
shall be prorated between Seller and Purchaser, as of the Closing Date, with
Purchaser bearing only that portion of such expense that the number of days
after the Closing Date bears to the total number of days in the applicable
period and Seller bearing only that portion of such expense that the number of
days prior to the Closing Date bears to the total number of days in the
applicable period. To the extent not adjusted in cash at Closing, all requests
for payment of taxes properly attributable to one party that are received by the
other will be promptly forwarded to the other party, which shall promptly pay
the same.
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3.7 Cooperation and Assistance. Subsequent to the Closing, Purchaser
agrees that, upon written notice to and consent by Purchaser, the Principal
Shareholder and other appropriate employees of Purchaser who were employees of
Seller prior to Closing, shall be permitted to assist Seller with the resolution
of the Excluded Liabilities; provided, however, that such assistance shall not
unreasonably interfere with such employees' performance of their duties for
Purchaser nor interfere with or adversely affect in a material manner
Purchaser's relationships with its customers, suppliers, licensors, licensees,
consultants or employees.
ARTICLE IV
EMPLOYMENT MATTERS
4.1. Employees to be Hired. Except as expressly provided in the
following sentence and elsewhere in this Article IV, neither Purchaser nor any
of its Affiliates shall have any obligation to offer employment to, or employ,
any employee of Seller, and neither Purchaser nor any of its Affiliates shall
have any liability in respect of any salary, severance, health, welfare,
retirement, or any other benefits relating to employment of such employees with
Seller or its predecessors. Purchaser shall offer employment effective
immediately after the Closing Date to Xxxx Xxxxxxx in accordance with the
provisions of the employment agreement attached as Exhibit 4.1 ("EMPLOYMENT
AGREEMENT"). Purchaser, at its option, may offer employment as of the Closing
Date to other employees of Seller, and Seller shall cooperate with Purchaser in
the latter's efforts to employ any such employees.
4.2. Medical Coverage. Seller shall retain responsibility for and
continue to pay in accordance with its applicable employee plans all hospital,
medical, life insurance, disability and other employee welfare benefit plan
expenses and benefits for each Seller employee hired by Purchaser to the extent
of Seller's responsibility to employees and their covered dependents (or the
applicable requirements under COBRA) for the period prior to the Closing Date.
4.3. Indemnification. Seller shall, defend, indemnify and hold harmless
Purchaser, its corporate affiliates, and their respective directors, officers
and employees, successors and assigns against and in respect of: (i) any claim
for wrongful discharge or breach of any written employment contract or written
plan or policy arising from any termination of the employment of any employee by
Seller prior to Closing; (ii) any claim for severance benefits or termination
pay or continued employment arising out of or resulting from any employee's
employment by Seller prior to Closing, including, without limitation, any claims
relating to Purchaser's obligations as a successor;
4.4 Stock Options. Purchaser will set aside for grant under the terms
of the XETA Technologies 2000 Stock Option Plan (the "OPTION PLAN") a copy of
which is attached hereto as Schedule 4.4, immediately after the closing, options
for the purchase of 50,000 shares of Purchaser common stock by such key
employees of Seller as Purchaser has determined to be vital to the continued
successful operation of the Purchased Business ("KEY EMPLOYEES") and whose names
are set forth in Schedule 4.4. Consistent with the Plan, these options will have
an option price equal to the market value per share on the date of the grant and
will be exercisable for ten (10) years after date of grant. Twenty-five thousand
(25,000) of these options will vest two (2) years after the date of grant and
the other twenty-five thousand (25,000) of such options
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will vest three (3) years after the date of grant. Consistent with the Option
Plan all such vesting will be conditioned upon the grantee's continued
employment with Purchaser on the vesting date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL SHAREHOLDER AND THE SELLER
The Principal Shareholder and Seller represent and warrant to Purchaser
as follows:
5.1. Organization and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Missouri and is duly authorized to do business under all applicable Laws and to
carry on its business in the places and in the manner as now conducted. Attached
as Schedule 5.1 are true, correct, and complete copies of Seller's Certificate
of Incorporation and Bylaws, and all amendments thereto, and a Certificate of
Seller's Good Standing from the Secretary of State of Missouri dated within ten
(10) days of the Closing Date. Seller has the requisite power and authority to
own, lease and operate its assets and properties and to carry on its business as
such business is currently being conducted. Seller is qualified and in good
standing in each jurisdiction in which the operation of its business requires
such qualification and a failure to qualify would not have a material adverse
effect on Seller or the Business.
5.2. Authority. Seller has the requisite power and authority to enter
into this Agreement and to effect the transactions contemplated hereby. The
Principal Shareholder has the full legal right, power and authority to enter
into this Agreement. The execution, delivery and performance of this Agreement
have been approved by Seller's Board of Directors and Seller's shareholders.
Attached as Schedule 5.2 are true and correct copies of the Resolutions adopted
and approved by all of Seller's Directors and all of its shareholders by
unanimous written consent authorizing the transactions to be effected pursuant
to this Agreement. No additional corporate proceedings on the part of Seller is
necessary to authorize the execution and delivery of this Agreement and the
consummation by Seller of the transactions contemplated hereby.
5.3 Enforceability. This Agreement has been duly and validly executed
and delivered by Seller and the Principal Shareholder, and, assuming the due
authorization, execution and delivery hereof by Purchaser, constitutes a valid
and binding agreement of Seller and the Principal Shareholder, enforceable
against each of them in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity.
5.4 Non-Contravention. The execution and delivery of this Agreement by
Seller and the Principal Shareholder do not, and the consummation by Seller and
the Principal Shareholder of the transactions contemplated hereby will not to
Seller's and the Principal Shareholder's knowledge, (i) violate or result in a
breach of any provision of, or constitute a default under, (ii) result in the
termination of, (iii) accelerate the performance required by, (iv) result in a
right
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of termination or acceleration under, or result in the creation of any
Encumbrances upon any of the Assets under any of the terms, conditions or
provisions of, (X) Seller's Articles of Incorporation or Bylaws, (Y) any Laws
applicable to Seller or any of the Assets, or (Z) except as set forth in
Schedule 5.4, any material instrument or agreement which Seller is now a party
or by which Seller or any of the Assets may be bound or affected.
5.5 Consents. No declaration, filing or registration with, or notice
to, or authorization, consent or approval of, any Governmental Authority or
third party is necessary to Seller's and the Principal Shareholder's knowledge
for the execution and delivery of this Agreement by Seller and the Principal
Shareholder or the consummation by Seller and the Principal Shareholder of the
transactions contemplated hereby except as set forth in Schedule 5.5 and such
actions or filings which, if not made or obtained, as the case may be, would not
have a material adverse affect.
5.6 Financial Statements. Seller has delivered to Purchaser copies of
Seller's (audited/reviewed) financial statements for the twelve (12) months
ended December 31, 1998, and December 31, 1999 and internally-generated
financial statements for the eight-month period ended as of August 31, 2000, and
the nine-month period ended as of September 30, 2000 (collectively, the
"FINANCIAL STATEMENTS"), copies of which are hereto attached as Schedule 5.6.
The Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis and fairly and accurately present all of Seller's assets and
liabilities as of the date thereof and the results of operations for the periods
covered thereby.
5.7 Assets. Except as set forth in Schedule 5.7, Seller has good and
marketable title to all of the Assets or, in the case of leased Assets, valid
leasehold interests whether real, personal, mixed, tangible or intangible. All
the owned Assets and the Seller's interest in the other Assets are free and
clear of restrictions on or conditions to transfer or assignment, and free and
clear of Encumbrances other than Permitted Encumbrances. The Assets are all the
assets and properties necessary to permit the Seller to operate the Business as
currently operated. The Assets are in good working order and condition, ordinary
wear and tear excepted.
5.8 Accounts and Notes Receivable. Schedule 5.8 sets forth an accurate
list of the accounts and notes receivable of the Seller as of October 31, 2000.
Receivables from and advances to employees, Seller, its shareholders or any
entities or persons related to or Affiliates of Seller or its shareholders are
separately identified in Schedule 5.8. Schedule 5.8 also sets forth an accurate
aging of all accounts and notes receivable as of the October 31, 2000, showing
amounts due in 30-day aging categories. The trade and other accounts receivable
of the Seller are bona fide receivables, arising from the sale of goods or
services in the ordinary course of business and were recorded correctly on the
book and records of Seller in accordance with GAAP and to the knowledge of the
Seller and the Principal Shareholders are collectible in the amounts shown on
Schedule 5.8 net of reserves reflected in the Financial Statements, provided
that the foregoing is not a guarantee of the collectibility of such receivables.
5.9 Inventories. Except as stated in Schedule 5.9, the items of
inventory being sold under this Agreement exist in fact, are current, were
purchased in the ordinary course of business and are in the aggregate valued at
the lesser of cost or fair market value.
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5.10 Contracts. Set forth in Schedule 5.10 is a list of all material
contracts, agreements, instruments, leases and licenses to which the Seller is a
party or to which any of the Assets is subject, all of which ("MATERIAL
CONTRACTS") are valid and binding obligations of Seller and, to the best of
Seller's knowledge, of the other parties thereto in accordance with their
respective terms and conditions. True and correct copies of all documents
described in any exhibit attached to this Agreement have been made available or
delivered to Purchaser. Except as otherwise indicated in Schedule 5.4 or
Schedule 5.10 hereto, (i) neither the Seller nor, to the Seller's knowledge, any
other party to any such Material Contract has given notice of termination or
taken any action inconsistent with the continuance of, is now in violation or
breach of, or in default in complying with, any material provision thereof and
(ii) the consent of any other party to such contract, agreement, instrument,
lease or license is not required to validly effect the assignment, transfer or
conveyance thereof from Seller to Purchaser.
5.11 Tangible Personal Property. Attached as Schedule 5.11 is a true,
complete and accurate list of all material tangible personal property included
in the Assets, and Seller owns all such property free and clear of all liens,
claims, charges, encumbrances and security interests of any kind or nature,
except as stated in Schedule 5.11. Except as otherwise set forth in Schedule
5.11, such tangible personal property is adequate for the conduct of the
Business as presently conducted. At Closing, Purchaser will receive all such
tangible personal property free and clear of all liens, claims, charges,
encumbrances and security interests of any kind or nature, except as set forth
in Schedule 5.11. To the best of Seller's knowledge, all such tangible personal
property is in good operating condition and repair (ordinary wear and tear
excluded), is useable in the Business as presently conducted and has been
maintained and repaired in accordance with customary industry practices, except
as may otherwise be noted in Schedule 5.11.
5.12 Permits. Schedule 5.12 contains an accurate list of all material
licenses, franchises, permits and other governmental authorizations held by
Seller (the "PERMITS"). The Permits are valid, and Seller has not received any
written notice that any Governmental Authority intends to cancel, terminate or
decline to renew any such Permit. To Seller's knowledge, the Permits are all the
permits that are required by Law for the operation of the businesses of Seller
as currently conducted and the ownership of the Assets except any Permit the
failure to have which would not have a material adverse effect. The Seller has
conducted and is conducting the Business in substantial compliance with the
requirements, standards, criteria and conditions set forth in the Permits.
5.13 Intangible Personal Property. Attached as Schedule 5.13 is a true,
complete and accurate list of all material intangible personal property of
Seller (other than Permits) as related to the Business, including all material
patents, patent applications, trademarks, trademark applications and
registrations therefor, options to purchase property of others and any licenses
(including but not limited to software licenses as licensee) and other
agreements or arrangements providing for the right to use the property of others
in the conduct of the Business. Seller is not a licensor in respect of any
patents, trade secrets, technical data, inventions, know-how, trademarks, trade
names, copyrights or applications therefor, relating to the Business, except as
stated in Schedule 5.13. Except as disclosed in Schedule 5.13, Seller owns or
possesses adequate licenses or other rights to use all patents, trade secrets,
technical data, trademarks, trade names or copyrights necessary to
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conduct the Business as now operated, and have not received notice that its use
of such patents, trade secrets, technical data, trademarks, trade names or
copyrights infringes the rights of others. Except as set forth in Schedule 5.13,
there are no adverse claims, liens, encumbrances, or security interests upon or
affecting the items of intangible property described and, Seller is the owner of
all right, title and interest in and to such intangible property.
5.14 Real Property. Attached as Schedule 5.14 is a true, complete and
accurate description of all interests in real property owned, used by or leased
to Seller. Seller has valid leases, not in default, as to such real property
leased by it, all free and clear of all liens, mortgages, charges or
encumbrances of any nature whatsoever, except as described in Schedule 5.14 and
except for (a) liens for current state and local property taxes or general or
special assessments not in default, and such liens, encumbrances, easements,
rights of way, building and use restrictions, exceptions, reservations and
limitations as do not in any material respect detract from the value of the
property subject thereto or interfere with or impair the present and continued
use thereof in the usual and normal conduct of the Business.
5.15 Environmental Matters. Except as set forth in Schedule 5.15, (a)
Seller is in compliance, in all material respects, with all Environmental,
Health and Safety Laws, including, without limitation, Environmental, Health and
Safety Laws; (b) Seller has obtained and complied, in all material respects,
with all necessary permits and other approvals necessary to treat, transport,
store, dispose of and otherwise handle Hazardous Substances; (c) to Seller's
knowledge, there has been no "release" or threat of "release" (as defined in any
Environmental, Health and Safety Law) at, from, in or on any property owned or
operated by the Seller relating to the Assets and (d) to Seller's knowledge,
there is no pending claim against it based on any Environmental, Health and
Safety Law and no such claim has been threatened in a writing to Seller.
5.16 Labor Relations. Seller is not bound by or subject to any
arrangement with any labor union, and no employees of Seller are represented by
any labor union or covered by any collective bargaining agreement nor, to
Seller's or the Principal Shareholder's knowledge, is any campaign to establish
such representation in progress. There is no pending nor, to Seller's or the
Principal Shareholder's knowledge, threatened labor dispute involving Seller or
any group of Seller's employees nor has Seller experienced any significant labor
interruptions over the past five (5) years. Except as set forth on Schedule
5.16, Seller nor the Principal Shareholder has no knowledge of any claims made
by or disputes with any of its employees.
5.17 Trade Restrictions and Confidentiality Agreements. Schedule 5.17
sets forth all agreements containing covenants not to compete or solicit
employees or to maintain the confidentiality of information to which Seller is
bound or under which Seller has any rights or obligations.
5.18 Employee Compensation. Schedule 5.18 contains a description of all
salary and other compensation arrangements which Seller has with its employees
and contains a complete list of the names and current salary rates of and bonus
commitments to each person currently employed by Seller whose annual salary
exceeds Thirty Thousand Dollars ($30,000). Except as set forth in
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Schedule 5.18, Seller has not unsatisfied obligations for employee overtime,
retraining or reimbursement of employee training expenses.
5.19 Employee Benefit Plans. Seller is in compliance in all material
respects with all reporting and disclosure requirements applicable to it and its
Pension Plans and Welfare Plans under the Code, ERISA, and all Department of
Labor and Internal Revenue Service regulations promulgated thereunder. No civil
or criminal action brought pursuant to the provisions of Title I, Subtitle B,
Part 5 of ERISA or any other federal or state law is pending or, to Seller's or
the Principal Shareholder's knowledge threatened, against any fiduciary of the
Pension Plans or the Welfare Plans. To the Seller's and the Principal
Shareholder's knowledge, no Pension or Welfare Plan, nor any fiduciary thereof,
has been, or is currently, the direct or indirect subject of an audit,
investigation or examination by any Governmental Authority.
5.19.1 Pension Plan; Claims. Every Pension Plan or similar
arrangement maintained by Seller, whether written or oral, is listed
and described in Schedule 5.19.1. There are no outstanding liabilities
of Seller to the Pension Plan (other than payroll deduction
contributions not yet remitted to the Plan Trustee), and neither the
Seller nor the Principal Shareholder knows of any potential liabilities
in connection therewith. There is no action, suit or claim pending
(other than for benefits in the normal course), pending or to the
knowledge of Seller or the Principal Shareholder threatened, and
neither the Seller nor the Principal Shareholder has any knowledge of
any facts which could give rise to any action, suit or claim, against
the Pension Plan or Seller, which might subject Seller to any material
liability.
5.19.2 Welfare Plans; Claims. Every Welfare Plan or similar
arrangement maintained by Seller or to which it makes employer
contributions with respect to its employees, whether by written or oral
agreement, are listed in Schedule 5.19.2. There is no action, suit or
claim (other than for benefits in the ordinary course) pending or to
the knowledge of Seller or the Principal Shareholder threatened, and
neither Seller nor the Principal Shareholder has any knowledge of any
facts which could give rise to any action, suit or claim against any of
the Welfare Plans or Seller, which might subject Seller to any material
liability.
5.19.3 Prohibited Transactions. To Seller's and the Principal
Shareholder's knowledge, none of the Welfare Plans or the Pension Plan,
nor any of their related trusts, nor Seller or any trustee,
administrator or other "PARTY IN INTEREST" or "DISQUALIFIED PERSON"
(within the meaning of Section 3(14) of ERISA or Section 4975(e)(2) of
the Code, respectively) with respect to the Pension Plan or any Welfare
Plan, has engaged in any non-exempt "PROHIBITED TRANSACTION" (within
the meaning of Section 406 of ERISA or Section 4975(c) of the Code,
respectively) with respect to Seller's participation therein, which
could subject the Pension Plan or any of the Welfare Plans, their
related trusts, trustees, administrators or other fiduciaries, Seller,
Purchaser, or any other party dealing with the Pension Plan or the
Welfare Plans, to the penalties or excise tax imposed on prohibited
transactions by Section 502 of ERISA or Section 4975 of the Code or
which could have a material adverse effect on the assets, business or
financial condition of Seller.
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5.19.4 Compliance. To the knowledge of Seller and the
Principal Shareholder, (a) the Pension Plan and each of the Welfare
Plans complies currently, and has complied in the past, both as to form
and operation and in all material respects, with its own terms and with
the provisions of ERISA and the Code, and all other applicable laws,
rules and regulations; (b) all necessary governmental approvals and
determinations for the Pension Plan have been obtained, including where
applicable, a favorable determination as to its qualification under
Sections 401(a), and 501(a) of the Code; and (c) nothing has occurred
since the date of each such determination or recognition letter that
would adversely affect such qualification. To the knowledge of the
Seller and the Seller, all amounts that are currently owing to plan
participants, or contributions required to be made to the Pension Plan
or any of the Welfare Plans have been paid or contributed with respect
to all periods prior to the Closing Date or have been provided for by
adequate reserves in the Financial Statements.
5.19.5 COBRA. To the knowledge of Seller and the Principal
Shareholder, except as set forth in Schedule 5.19.5, Seller has
complied in all material respects with the "CONTINUATION COVERAGE
REQUIREMENTS OF GROUP HEALTH PLANS" provided in Section 4980B of the
Code, Sections 601 et. seq. of ERISA, the Family and Medical Leave Act
of 1994, and all regulations promulgated thereunder.
5.19.6 401(k) Plan. The Seller's 401(k) Plan permits, or prior
to Closing shall be amended to permit, employees of Seller who are
hired by Purchaser to roll or directly transfer their vested account
balances to a "QUALIFIED EMPLOYEE PENSION PLAN" at no cost to
Purchaser.
5.19.7 Miscellaneous Benefit Plan Matters. Neither Seller nor
any other entity, whether or not incorporated, which is deemed to be
under "COMMON CONTROL" (as defined in Section 414 of the Code, or
4001(b) of ERISA) with Seller ("COMMONLY CONTROLLED ENTITY") maintains
or contributes to any "EMPLOYEE PENSION BENEFIT PLAN" (within the
meaning of Section 3(2)(A) of ERISA) ) that (a) is a "DEFINED
CONTRIBUTION PLAN" described in Section 3(34) of ERISA or Section
414(i) of the Code, or a "DEFINED BENEFIT PLAN" described in Section
3(35) of ERISA or Section 414(j) of the Code, and (b) gives rise, or
will give rise, to any liability of Seller for (i) any delinquent
premium payments due under Section 4007 or ERISA with respect to any
such defined benefit plan, or (ii) any unpaid minimum funding
contributions that would result in the imposition of a lien on any
assets of Seller pursuant to Section 412(c)(11) of the Code or Section
302(c)(11) of ERISA. Neither Seller nor any "COMMONLY CONTROLLED
ENTITY" (as defined in ERISA) sponsors or sponsored, maintains or
maintained, any defined benefit plan that has been, or will be,
terminated in a manner that would result in any liability of Seller to
the Pension Benefit Guaranty Corporation or that would result in the
imposition of a lien on any assets of Seller pursuant to Section 4068
of ERISA. At no time during the five-year period immediately preceding
the first day of the year in which the Closing Date occurs has Seller
or any Commonly Controlled Entity participated in or contributed to any
"MULTI-EMPLOYER PLAN" (within the meaning of Section 4001(a)(3) of
ERISA or Section 414(f) of the Code), or had an obligation to
participate in or contribute to any such multi-employer plan. No
agreement subject to Section 4204 of ERISA has been entered into in
connection with the Xxxxx
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Xxxxxxxx. Xxxx of the Welfare Plans provides for or promises retiree
medical, disability or life insurance benefits to any current or former
employee, officer, or director of Seller.
5.20 Litigation and Legal Compliance. Except as set forth in Schedule
5.20, there is no material claim, action, suit or proceeding, pending or, to the
knowledge of the Seller and the Principal Shareholder, threatened against or
affecting Seller, at law or in equity, or before or by any Governmental
Authority having jurisdiction over Seller. No written notice of any claim,
action, suit or proceeding, whether pending or threatened, has been received by
the Seller and, to the Principal Shareholder's and Seller's knowledge, there is
no basis therefor. Except to the extent set forth in Schedule 5.20, the Seller
has to its knowledge conducted and is conducting the Business in compliance with
all Laws applicable to Seller, the Assets or the operation of the Business.
5.21 Taxes. Except as set forth in Schedule 5.21, Seller has timely
filed all requisite federal, state, local and other tax returns for all fiscal
periods for which the applicable statute of limitations has not expired, and has
duly paid in full or made adequate provision in the Financial Statements for the
payment of all Taxes for all periods for which the applicable statute of
limitations has not expired. Seller has duly withheld and paid or remitted all
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, shareholder or other
person or entity that required withholding under any applicable Law, including,
without limitation, any amounts required to be withheld or collected with
respect to social security, unemployment compensation, sales or use taxes or
workers' compensation. There are no examinations in progress or claims against
Seller relating to Taxes for any period or periods prior to and including the
Effective Date and no written notice of any claim for Taxes, whether pending or
threatened, has been received. Seller has not granted or been requested to grant
any extension of the limitation period applicable to any claim for Taxes or
assessments with respect to Taxes. Seller is not a party to any tax allocation
or sharing agreement and is not otherwise liable or obligated to indemnify any
person or entity with respect to any Taxes. The amounts shown as accruals for
Taxes in the Financial Statements as of August 31, 2000 are, and at Closing will
be, sufficient for the payment of all Taxes for all fiscal periods ended on or
before that date. Seller currently utilizes the accrual method of accounting for
income tax purposes. Such method of accounting has not changed in the past five
(5) years.
5.22 Solvency. Seller is not insolvent, and will not be rendered
insolvent by the transfer contemplated by this Agreement. Seller assets exceed
its liabilities, and Seller is currently paying its obligations as they become
due.
5.23 Change of Name. Except as set forth in Schedule 5.23, Seller has
not conducted business under any name during the past five (5) years other than
Pro Networks Corporation.
5.24 Books and Records. The books of account, minute books, stock
record books, and other records of Seller, are complete and correct in all
material respects, have been maintained in accordance with sound business
practices, and all of them have been made available for inspection by Purchaser.
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5.25 Disclosure. Seller has fully provided Purchaser and its
representatives with all the information that Purchaser has requested in
analyzing whether to consummate the Asset Purchase. To Seller's knowledge, none
of the information so provided nor any representation or warranty of Seller
contained in this Agreement contains any untrue statement of a material fact, or
omits to state a material fact necessary to make such representation, warranty
or statement, not misleading.
5.26 No Implied Representations. Notwithstanding anything to the
contrary contained in this Agreement, the Seller and the Principal Shareholder
have not made any representation or warranty whatsoever, express or implied,
other than those representations and warranties of the Seller and the Principal
Shareholder expressly set forth in this Agreement.
5.27 Accuracy of Information Furnished. This Agreement and the attached
schedules and exhibits are free of any untrue statements of material fact and do
not omit to state a material fact necessary to make the statements contained in
this Agreement and the attached schedules and exhibits not misleading. To the
best of Seller's knowledge, there is nothing which has not been set forth or
disclosed in this Agreement and the attached exhibits which currently materially
adversely affects the Business or the Assets.
5.28 Location. Except as to items that may be out for service or repair
or with sales representatives for marketing purposes, all tangible personal
property included in the Assets is currently found at the locations set forth in
Schedule 5.28.
5.29 Warranty Claims. Except as set forth in Schedule 5.29, there are
no warranty claims for defective work completed by the Business existing,
pending or, to the knowledge of the Seller, threatened against the Business or
Seller.
5.30 Management and Ownership. All of Seller's officers, directors and
shareholders are as identified in Schedule 5.30.
5.31 Trade Debt. Attached as Schedule 5.31 is a true, complete and
accurate list of all of Seller's trade payables and all other creditors and
claimants who would be entitled to notice of the Asset Purchase under the
Missouri Bulk Sales Law, together with a true and current statement of the
amount owed to each such creditor and other claimant as of October 31, 2000.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
6.1. Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Oklahoma. Attached
as Schedule 6.1 are true, correct, and complete copies of Purchaser's
Certificate of Incorporation and Bylaws, and all amendments thereto, and a
Certificate of Purchaser's Good Standing from the Secretary of State of Oklahoma
dated within ten (10) days of the Closing Date. Purchaser is duly authorized and
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qualified under all applicable Laws to carry on its business in the places and
in the manner now conducted. Purchaser has the requisite power and authority to
own, lease and operate its assets and properties and to carry on its business as
such business is currently being conducted.
6.2 Authority. Purchaser has the full legal right, power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement have been
approved by the board of directors of Purchaser. Attached as Schedule 6.2 is a
true and correct copy of the Resolutions adopted and unanimously approved by
Purchaser's Directors authorizing the Asset Purchase by written memorandum of
action. No additional corporate proceedings on the part of Purchaser are
necessary to authorize the execution and delivery of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby.
6.3 Enforceability. This Agreement has been duly and validly executed
and delivered by Purchaser, and, assuming the due authorization, execution and
delivery by Seller and the Principal Shareholder, constitutes valid and binding
agreements of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity.
6.4 Non-Contravention. The execution and delivery of this Agreement by
Purchaser do not, and the consummation by Purchaser of the transactions
contemplated hereby will not, violate or result in a breach of any provision of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration under any of the terms, conditions or provisions of (i) Purchaser's
Certificate of Incorporation or Bylaws, (ii) any Law applicable to Purchaser or
any of its properties or assets or (iii) any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which Purchaser is now a
party or by which Purchaser or any of its properties or assets may be bound or
affected.
6.5 Consents. No declaration, filing or registration with, or notice
to, or authorization, consent or approval of, any Governmental Authority is
necessary for the execution and delivery of this Agreement by Purchaser or the
consummation by Purchaser of the transactions contemplated hereby.
6.6 No Implied Representations. Notwithstanding anything to the
contrary contained in this Agreement, Purchaser has not made any representation
or warranty whatsoever, express or implied, other than those representations and
warranties of Purchaser expressly set forth in this Agreement.
6.7 Litigation. There is no suit, action, administrative proceeding or
other proceeding or governmental investigation pending, or to Purchaser's
knowledge, threatened against Purchaser that, if adversely determined to
Purchaser could have a material adverse effect on the ability of Purchaser to
perform its obligations hereunder.
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6.8 Disclosure. Purchaser has fully provided Seller and its
representatives with all the information that Seller has requested in analyzing
whether to consummate the Asset Purchase. None of the information so provided
nor any representation or warranty of Purchaser contained in this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE VII
CERTAIN COVENANTS
7.1 Conduct of Business. Seller shall conduct the Business up to the
date of Closing in the normal and regular manner, and will not enter into any
contact except as may be required in the ordinary course of business. Except
with respect to disclosure to their respective attorneys, financial advisors and
officers and employees with a need to know, or as otherwise required by law, the
parties shall insure that the existence of this Agreement is kept in strictest
confidence prior to Closing, and no party shall disclose the terms hereof to any
person, before Closing, without each party's prior written consent.
7.2 Future Cooperation; Final Equity Value; Tax Matters. The Principal
Shareholder, Seller and Purchaser shall each deliver or cause to be delivered to
the other following the Closing such additional instruments as the other may
reasonably request for the purpose of fully carrying out this Agreement.
Purchaser will, and will cause its officers, directors and employees to,
cooperate with Seller and its representatives in their review and verification
of the Closing Equity Value determined by Purchaser, pursuant to Section 2.5.
Seller will cooperate and use its reasonable efforts to causes its officers,
directors and employees to cooperate with Purchaser at and after the Closing in
furnishing information, evidence, testimony and other assistance in connection
with any actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all tax periods prior to the Closing. Purchaser
will provide Seller and the Principal Shareholder with access to such of
Seller's books and records as may be reasonably requested by Seller or the
Principal Shareholder in connection with federal, state and local tax matters
relating to periods prior to the Closing. The party requesting cooperation,
information or actions under this Section 7.2 shall reimburse the other party
for all reasonable out-of-pocket costs and expenses paid or incurred in
connection therewith, which costs and expenses shall not, however, include per
diem charges for employees or allocations of overhead charges.
7.3 Access. Between the date of this Agreement and the Closing Date,
Seller shall give Purchaser and its authorized representatives reasonable access
upon reasonable notice during reasonable business hours and in such manner as
not unduly to disrupt their respective normal business activities, to any and
all premises, properties, contracts, commitments, books, records and affairs of
the Business and shall cause its officers and employees to furnish to Purchaser
any and all financial, technical and operating data and other information
pertaining to the Business as Purchaser may from time to time reasonably
request; provided, however, that such access shall not include access to any
item or property not related to the Business.
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7.4 Vendor and Customer Introductions. After Closing, Seller shall make
arrangements reasonably satisfactory to Purchaser for representatives of the
Purchaser to meet Seller's vendors and customers. Seller will be permitted to
have a representative at each such meeting.
7.5 Confidentiality. Purchaser agrees that prior to the Closing Date it
will keep confidential all non-public information regarding Seller furnished to
it by Seller, provided, however, that Purchaser may disclose such information to
such representatives, attorneys, accountants, bankers and other persons retained
by Purchaser in connection with the transactions contemplated by this Agreement
who similarly agree to keep such information confidential; and provided further,
that Purchaser shall also have the right, in connection with the assignment of
contracts, licenses, certificates, leases, commitments or other rights to be
assigned or transferred to Purchaser as provided in this Agreement, and upon the
giving of reasonable notice to Seller, to disclose and discuss matters related
to the rights to be assigned or transferred under this Agreement directly with
the parties having the power to assign or transfer such rights, regardless of
whether or not the information is considered non-public.
7.6 Preservation and Continuity of Representations. Seller and the
Principal Shareholder, jointly and severally, hereby covenant with Purchaser
that from and after the Effective Date and through the Closing Date or the
earlier termination of the Agreement, each of the Seller and the Principal
Shareholder shall use its and his reasonable efforts to ensure that all of the
representations and warranties set forth in Article V hereof shall be true in
all material respects as of the Closing Date as if repeated at and as of such
time, and shall advise Purchaser promptly of any material adverse change or
deviation in or from any of the representations and warranties herein from the
Effective Date through the Closing Date.
7.7 Effect of Purchaser's Due Diligence. Purchaser's due diligence
review shall not relieve Seller or the Principal Shareholder of any duties
concerning their respective representations, warranties, covenants or agreements
contained in this Agreement.
7.8 Filings with SEC. Between the Effective Date and the Closing, or
promptly thereafter, Purchaser may have to make certain filings with the
Securities and Exchange Commission. To the extent that information concerning
the Principal Shareholder and/or Seller is required to be included in such
filings as required by applicable law, Seller and the Principal Shareholder
shall supply or cause Seller's auditors and other advisors to supply such
information, in the manner and form reasonably requested by Purchaser, at
Purchaser's cost, promptly and in any event not later than twenty (20) days
after receipt of such request.
ARTICLE VIII
CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE
Each and every obligation of Purchaser under this Agreement that has to
be performed on or after the date hereof shall be subject to the satisfaction or
waiver by Purchaser on or before the Closing Date of the following conditions:
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8.1 Representations. The representations and warranties made by Seller
in this Agreement shall be correct in all material respects on and as of the
Closing Date, with the same force and effect as though such representations and
warranties had been made on the Closing Date.
8.2 Performance. All the terms, covenants and conditions of this
Agreement to be complied with or performed by Seller on or before the Closing
Date shall have been fully complied with or performed in all material respects
or waived by Seller.
8.3 Waiting Periods. All other governmental or regulatory approvals the
absence of which would have a material adverse effect upon Purchaser's conduct
of the Business or its ownership or control of the Assets or the Business shall
have been obtained, and (x) no suit, action or proceeding by any Governmental
Authority shall be pending and (y) Purchaser shall not have been advised in
writing by any Governmental Authority that such Governmental Authority intends
to file or commence any suit, action or proceeding, which, in either case, seeks
to enjoin, restrain or prohibit the consummation of the transactions
contemplated by this Agreement or to impose limitations on Purchaser's ability
to exercise full rights of ownership of the Assets or require Purchaser to
divest itself of any of the Assets. Purchaser shall deliver to Seller copies of
any writing referred to above in this section promptly upon receipt.
8.4 Proceedings. Prior to the Closing Date, no material litigation
shall have been initiated by any Governmental Authority or by any other person
or entity questioning the legality of the transactions contemplated by this
Agreement which, in the opinion of counsel to Purchaser, makes it undesirable to
proceed with such transactions.
8.5 Minimum Equity. Seller shall have delivered to Purchaser its
internally-generated financial statements for the nine-month period ended as of
the September 30, 2000, and Purchaser shall be satisfied that Seller has, at
Closing, a total stockholders' equity of at least equal to the Minimum Required
Equity.
8.6 Material Adverse Change. Other than planned and permitted
withdrawals of cash, securities and personal items at the Principal
Shareholder's discretion, which shall not reduce Seller's total stockholders'
equity to less than the Minimum Required Equity, no material adverse change
shall have occurred in the Business between the Valuation Date and the Closing
Date.
8.7 Required Permits and Consents. Purchaser shall have received (i)
its own counterparts of, or effective assignment of, or temporary or interim
authority to operate pending the issuance of, all Permits and (ii) all required
consents satisfactory to Purchaser to assign to Purchaser of all Material
Contracts (and the agreement to any modifications reasonably requested by
Purchaser).
8.8 Due Diligence. Purchaser shall have completed its due diligence
examination of Seller and found the Asset Purchase to be in all respects
satisfactory to Purchaser.
8.9 Board Approval. Purchaser's Board of Directors shall have given its
approval to the closing of the Asset Purchase.
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8.10 Closing Documents. Purchaser shall have received all of the
following items:
8.10.1 Legal Opinion. The written opinion with respect to
Missouri law of Ziercher & Xxxxxx, P.C., counsel to Seller, dated the
Closing Date, to the effect that:
(a) Seller is a corporation duly formed, validly
existing and in good standing, under the laws of the State of
Missouri, and is duly authorized and qualified to do business
under all applicable Laws and to carry on its business in the
places and in the manner as now conducted. Seller has the
requisite power and authority to own, lease and operate its
assets and properties and to carry on its business as such
business is currently being conducted. Seller is qualified and
in good standing in each jurisdiction in which the operation
of its business requires such qualification and a failure to
qualify would not have a material adverse effect on Seller or
the Business;
(b) Seller has the requisite power and authority as a
corporation to execute and deliver, and to perform and observe
the provisions of, this Agreement;
(c) This Agreement has been duly authorized, executed
and delivered by Seller's directors and shareholders and is
the legal, valid and binding obligation of Seller enforceable
in accordance with its terms (subject to customary bankruptcy
and equitable remedies exceptions).
8.10.2 Xxxxxxx Employment Agreement. The Employment Agreement
as executed by Xxxx Xxxxxxx.
8.10.3 Key Employee Agreements. Fully executed Employment
Agreements in the form of Exhibit 8.10.3 from all of the Key Employees
named in Schedule 8.10.3.
8.10.4 Consulting Agreements. Fully executed consulting or
similar agreements containing terms satisfactory to Purchaser with all
consultants and contractors of Seller deemed necessary by Purchaser to
the continued operation and success of the Business, as named in
Schedule 8.10.4.
8.10.5 Supplier and Vendor Contracts. Fully executed
assignments of all existing contracts and agreements with suppliers and
vendors of the Business deemed necessary by Purchaser to the continued
operation and success of the Business.
8.10.6 Resolutions. In a form and content reasonably
satisfactory to Purchaser, resolutions of Seller's Board of Directors
and its shareholders duly approving and authorizing the execution,
delivery and performance of this Agreement and the transactions and
agreements contemplated by or referred to herein.
8.10.7 Xxxx of Sale. A duly executed the Xxxx of Sale in the
form as Exhibit 8.10.7.
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8.10.8 Releases. Duly recorded and filed releases of all
outstanding mortgages covering any of the Assets and termination
statements for all outstanding UCC financial statements, amendments and
assignments covering any of the Assets.
8.10.9 Closing Certificate. A certificate in the form of
Exhibit 8.10.10, dated as of the Closing Date and signed by Seller and
the Principal Shareholder, verifying the satisfaction of the conditions
set forth in Sections 8.1 through 8.6 hereof.
8.10.10 Additional Documents. All such other certificates and
documents consistent with this Agreement as Purchaser or its counsel
shall have reasonably requested, including a true and correct copy of
Seller's Certificate of Incorporation and Bylaws and all amendments
thereto, a Certificate of Good Standing issued by the Secretary of
State of Missouri within ten (10) days prior to the Closing Date.
ARTICLE IX
CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
Each and every obligation of Seller under this Agreement to be
performed on or after the date hereof shall be subject to the satisfaction or
waiver by Seller on or before the Closing Date of the following conditions:
9.1 Representations. The representations and warranties made by
Purchaser in this Agreement shall be correct in all material respects on and as
of the Closing Date, with the same force and effect as though such
representations and warranties had been made on the Closing Date.
9.2 Performance. All the terms, covenants and conditions of this
Agreement to be complied with or performed by Purchaser on or before the Closing
Date shall have been fully complied with or performed in all material respects
or waived by Seller.
9.3 Proceedings. Prior to the Closing Date, no material litigation
shall have been initiated by any Governmental Authority or by any other person
or entity questioning the legality of the transactions contemplated by this
Agreement which, in the opinion of counsel to Seller, makes it undesirable to
proceed with such transactions.
9.4 Closing Documents. Seller shall have received from Purchaser the
following items:
9.4.1 Legal Opinion. Seller shall have received an opinion of
counsel to Purchaser, dated the Closing Date, to the effect that:
(a) Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Oklahoma.
(b) Purchaser has the requisite power and authority
as a corporation to execute and deliver, and to perform and
observe the provisions of, this Agreement; and
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(c) This Agreement has been duly authorized, executed
and delivered by Purchaser's board of directors and is a
legal, valid and binding obligation of Purchaser enforceable
in accordance with its terms (subject to customary bankruptcy
and equitable remedies exceptions).
9.4.2 Employment Agreement. The Employment Agreement.
9.4.3 Resolutions. In a form and content reasonably
satisfactory to Seller, resolutions of the Board of Directors Purchaser
duly approving and authorizing the execution, delivery and performance
of this Agreement and the transactions and agreements contemplated by
or referred to herein.
9.4.4 Closing Certificate. A certificate in the form of
Exhibit 9.4.4, dated as of the Closing Date and signed by Purchaser,
verifying the satisfaction of the conditions set forth in Sections 9.1
through 9.3 hereof.
9.4.5 Price. The Purchase Price shall have been paid to Seller
and Purchaser shall have accepted the Xxxx of Sale including
Purchaser's assumption of the Assumed Liabilities.
ARTICLE X
INDEMNIFICATION
10.1 Survival of Representations and Warranties. The parties hereto
agree that their respective representations, warranties, covenants, and
agreements contained herein shall survive the Closing for a period of one (1)
year after the Closing Date except that those covenants, representatives and
warranties made by Seller with respect to Environmental Matters, Employee
Benefits and Taxes (Sections 5.15, 5.19 and 5.21 hereof) shall survive the
Closing for such periods of time that the Governmental Authority having
jurisdiction over the subject matter of those covenants, representations and
warranties may be empowered to assess a liability or deficiency with respect to
any of the matters covered thereby (the "INDEMNIFICATION PERIOD").
10.2 Indemnification by the Seller. Subject to the other provisions of
this Article X, the Seller agrees to save and indemnify Purchaser against, and
hold it harmless from, any and all liabilities, of every kind, nature and
description, fixed or contingent, including without limitation reasonable
attorney fees and expenses incurred in connection with any action, claim or
proceeding relating to such liabilities ("DAMAGES"), arising from the breach of
any of his representations, warranties, covenants, or agreements, contained
herein or in the Exhibits or Schedules hereto, which is asserted in writing by
Purchaser during the Indemnification Period.
10.3 Indemnification by Purchaser. Purchaser agrees to save and
indemnify the Seller against and to hold him harmless from any and all Damages
arising from the breach of any of Purchaser's representations, warranties,
covenants or agreements contained herein or the Exhibits hereto, a claim for
which is asserted in writing by Seller during the Indemnification Period.
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10.4 Claims. All claims for Damages shall be computed net of the
present value of all readily ascertainable future tax benefits associated
therewith. No claim shall be made for matters adequately covered by insurance.
10.5 Seller's Liability. Notwithstanding the other provisions of this
Article X, Purchaser shall not be entitled to indemnification for its Damages
unless and until Purchaser has sustained otherwise indemnifiable Damages of (i)
Fifty Thousand Dollars ($50,000) per occurrence or $100,000 in the Aggregate
(the "BASKET"), and thereafter Purchaser shall be entitled to indemnification
only for its Damages exceeding the Basket. The aggregate liability of Seller for
indemnification for Damages under this Article X shall not exceed an amount
equal to the Purchase Consideration.
10.6 Purchaser's Liability. Notwithstanding the other provisions of
this Article X, Seller shall not be entitled to indemnification for its Damages
unless and until Seller has sustained otherwise indemnifiable Damages equal to
the amount of the Basket, and thereafter Seller shall be entitled to
indemnification only for its Damages exceeding the Basket. Upon a Final
Determination of the amount of any claim for Damages made against Purchaser by
the Seller, the Seller shall be entitled to recover the amount of such Damages
as finally determined.
10.7 Defense of Claims. Each party entitled to indemnification under
this Article X (the "INDEMNIFIED PARTY") agrees to notify the party required to
provide indemnification (the "INDEMNIFYING PARTY") with reasonable promptness of
any claim asserted against it in respect of which the Indemnifying Party may be
liable under this Agreement, which notification shall be accompanied by a
written statement setting forth the basis of such claim and the manner of
calculation thereof. The failure to provide such notice shall be deemed a waiver
of the Indemnified Party's rights to receive indemnity from the Indemnifying
Party under this Agreement. The Indemnifying Party shall have the right, at its
election, to defend or compromise any such claim at its own expense with counsel
of its choice; provided, however, that (i) such counsel shall have been approved
by the Indemnified Party, which approval shall not be unreasonably withheld or
delayed; (ii) the Indemnified Party may participate in such defense if it so
chooses with its own counsel and at its own expense; and (iii) any such defense
or compromise shall be conducted in a manner which is reasonable and not
prejudicial to the Indemnified Party's interest in such matter. In the event the
Indemnifying Party does not undertake to defend or compromise the claim, the
Indemnifying Party shall promptly notify the Indemnified Party of its intention
not to undertake to defend or compromise the claim, and the Indemnifying Party
shall be bound by (a) the final decree of any court of competent jurisdiction
deciding the validity and amount of the claim asserted against the Indemnified
Party, and (b) any compromise of such claim.
10.8 Extension of Time. To the extent that an Indemnified Party
delivers written notice of a claim for Damages against an Indemnifying Party
prior to the expiration of the Indemnification Period, reasonably identifying
the basis for the claim and the amount of any reasonably ascertainable Damages,
the Indemnification Period shall be extended for such claim until such claim is
resolved by a Final Determination.
10.9 Final Determination. For the purposes of this Agreement, a "FINAL
DETERMINATION" shall exist when (i) the parties agree in writing upon the
amount, or (ii) a court of competent jurisdiction shall have made a
determination on the merits with respect thereto and
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appeal therefrom shall not have been taken within a timely fashion from the date
of such determination.
ARTICLE XI
TERMINATION
11.1 General. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date:
(a) By mutual written consent of Seller and Purchaser;
(b) By Purchaser if, through no fault of Purchaser, any of the
conditions set forth in Article VIII shall not have been fulfilled, or
shall become incapable of fulfillment, on or prior to November 15,
2000, and shall not have been waived
(c) By Purchaser or Seller, if the Closing Date shall not have
occurred on or prior to November 15, 2000 (or such later date as shall
have been approved by the parties);
(d) By Purchaser or Seller, if any court of competent
jurisdiction or other governmental body shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall not have been
withdrawn within thirty (30) days after the date on which such order,
decree, ruling or other action was first issued or taken, or by reason
of any litigation or proceeding pending or threatened to be instituted
by any person or governmental body, which, in either case in the good
faith judgment of its Board of Directors will in all likelihood result
in an order, decree or ruling enjoining or otherwise prohibiting the
transactions contemplated by this Agreement; or
(e) By Purchaser or Seller, if any representation or warranty
given or made in this Agreement by the other party was untrue in any
material respect as of the date given or made or as of the Closing
Date, in light of the circumstances under which such representation or
warranty was given or made, or if any covenant given or made in or
pursuant to this Agreement, and performable by the other before and as
a condition to the Closing is breached and such breach is not promptly
cured after notice.
11.2 Effect. In the event of termination or abandonment by reason of
Section 11.1, this Agreement shall forthwith become void and there shall be no
liability of one party to the other by reason of this Agreement unless the
reason for termination or abandonment was caused by the action, the failure to
act, the misrepresentation, omission or breach by the party to be charged with
such liability with respect to a material aspect of the contemplated
transaction.
ARTICLE XII
MISCELLANEOUS
12.1 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the documents delivered pursuant hereto constitute the
entire agreement and understanding
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among the Principal Shareholder, Seller and Purchaser superseding any prior
agreement and understanding relating to the subject matter of this Agreement,
including, without limitation, the Letter of Intent. This Agreement may be
modified or amended only by a written instrument executed by the Principal
Shareholder, Seller and Purchaser, acting through their respective officers,
duly authorized by their respective Boards of Directors.
12.2 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument. Facsimile
transmission of any signed original document and/or retransmission of any signed
facsimile transmission will be deemed the same as delivery of an original. At
the request of any party, the parties will confirm facsimile transmission by
signing a duplicate original document.
12.3 Brokers and Agents. Each party hereto represents and warrants that
it employed no broker or agent in connection with the transactions contemplated
by this Agreement. Each party agrees to indemnify each other party against all
loss, cost, damages or expense arising out of claims for fees or commissions of
brokers employed or alleged to have been employed by such indemnifying party.
12.4 Notices. All notices and communications required or permitted
hereunder shall be in writing and may be given by depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the same
in person to an officer or agent of such party, as follows:
If to Purchaser, addressed to them at:
XETA Technologies, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attn: Xxx X. Xxxxx, President
Ph.: (000) 000-0000; Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxx, P.C..
000 Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000-0000
Attn: Xxx Xxxxxx
Ph.: (000) 000-0000; Fax: (000) 000-0000
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If to the Seller, addressed as follows:
Pro Networks Corporation
00 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxx, President
Ph.: (000) 000-0000; Fax: (___) ___-____
or the Principal Shareholder, addressed as follows:
Xxxx Xxxxxxx
00 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Ph.: (000) 000-0000; Fax: (___) ___-____
with a copy (which shall not constitute notice) to:
Ziercher & Xxxxxx, P.C.
231 South Bemiston, 0xx Xxxxx
Xx. Xxxxx (Xxxxxxx), Xxxxxxxx 00000-0000
Attn: Xxxxxxxxxxx X. Xxxxxxx, Esq.
Ph.: (000) 000-0000
Fax: (000) 000-0000
or such other address as any party hereto shall specify pursuant to this Section
12.4 from time to time.
12.5 Rights and Remedies. Except as otherwise provided herein, no delay
of or omission in the exercise of any right, power or remedy accruing to any
party as a result of any breach or default by any other party under this
Agreement shall impair any such right, power or remedy, nor shall it be
construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
12.6 Reformation and Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable, but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
12.7 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Oklahoma applicable to contracts to be entered
into and fully performed in the State of Oklahoma by residents of the State of
Oklahoma.
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12.8 Further Assurances. Each party will, upon request of the other
party, from time to time after the Closing, execute and deliver to the other all
such further documents and instruments, and will do or use its reasonable best
efforts to cause to be done such other acts, as such other party may reasonably
request more completely to consummate and make effective the contemplated
transactions.
12.9 Expenses. Each party shall pay its own expenses in connection with
this Agreement and the transactions contemplated by this Agreement. Seller shall
indemnify Purchaser against any claims of third parties for brokerage
commissions or finders fees in connection with the transactions contemplated by
this Agreement insofar as such claims are alleged to be based on arrangements
made by Seller or any authorized agent thereof. Purchaser shall indemnify Seller
against any such claim of third parties for brokerage commissions or finders'
fees in connection with the transactions contemplated by this Agreement insofar
as they are alleged to be based on arrangements made by Purchaser. Purchaser
represents that no such arrangements exist. All sales, use or other tax, duty or
recording cost, if any, imposed upon the transfer of the assets and business to
be acquired by Purchaser pursuant to this Agreement shall be paid by Seller.
12.10 Confidential Information. Each party agrees it and its
representatives shall hold in strict confidence, and shall not divulge or
disclose to any person without a need to know, any information and documents
received from the other party and, if the transactions herein contemplated are
not consummated, each party will continue to hold such information and documents
in strict confidence and shall return to such other party all such documents
then in such receiving party's possession (including the Schedules and Exhibits
to this Agreement) without retaining copies thereof; provided, that each party's
obligations under this Section 12.10 to maintain such confidentiality shall not
apply to any information or documents that are in the public domain when
furnished by the other or to be disclosed required by applicable law.
12.11 Publicity. Seller and Purchaser each agree that, without the
written consent of the other, it will not issue a press release or otherwise
publicly disclose the transactions contemplated by this Agreement except as may
be required by law. Any public announcement of this Asset Purchase will be made
by Purchaser and Seller jointly and simultaneously, and the wording of any such
announcement will be mutually agreed upon unless, in the reasonable judgment of
counsel for Purchaser, any laws, rules or regulations to which Purchaser is
subject (including the rules of NASDAQ) mandate other wording, in which event
such other laws, rules or regulations as interpreted by Purchaser and its
counsel shall control; provided, however, that from and after the Closing,
Purchaser shall be entitled to issue press releases or otherwise publicly
disclose its acquisition of the Business.
12.12 Equitable Relief. Each party recognizes that the other is likely
to suffer irreparable damage if the provisions of Sections 12.10 or 12.11 are
not specifically enforced. In the event of a dispute concerning any of these
sections, each party agrees that the other may, without posting bond or
security, obtain an temporary or permanent injunction restraining the
consummation of any action or transaction prohibited thereby pending
determination of such dispute. The provisions of Sections 12.10 and 12.11 shall
likewise be enforceable by a decree of specific performance. In the event of
litigation relating to such provisions, if the court determines that either
party or any of its employees, agents or representatives has breached any
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thereof, the injured party shall be entitled to recover from the breaching party
its reasonable fees, costs, and expenses (including attorney fees) incurred in
connection with the negotiation of this Agreement, any related due diligence
review, and/or the prosecution of any equitable or legal proceedings and any
appeal therefrom.
12.13 Dispute Resolution. Subject to Section 12.12, any dispute under
this Agreement which is not settled by mutual agreement among the parties
hereto, shall be finally settled by binding arbitration, conducted by and in
accordance with the rules then in effect of the American Arbitration
Association. The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the parties. Each party shall bear
its own costs and attorneys' and witness' fees. The prevailing party in any
arbitration, as determined by the arbitration panel, may be entitled to an award
against the other party in the amount of the prevailing party's costs and
reasonable attorneys' fees. In making any such award, if any, the arbitration
panel shall take into consideration the outcome of the proceeding and the
reasonableness of the conduct of each such party in connection with the dispute,
in light of the facts known to such party at the time such party engaged in such
conduct. The arbitration panel shall not have authority to award punitive
damages. The arbitration shall be held in Tulsa, Oklahoma.
12.14 Captions. The captions and headings in this Agreement are for
convenience only and will not be considered in interpreting any provision of
this Agreement. Unless otherwise indicated, all article and section references
are to the articles and sections of this Agreement and all references to day are
to calendar days. Whenever under the terms of this Agreement, the time for
performance of a covenant or condition falls upon a Saturday, Sunday or Missouri
state holiday, such time for performance will be extended to the next business
day.
12.15 Successors. This Agreement and all of the provisions of this
Agreement shall be binding upon and inure to the benefit of Purchaser and Seller
and their respective successors and permitted assigns. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement may be
assigned by either of the parties to this Agreement without the prior written
consent of the other party. Nothing contained in this Agreement, express or
implied, is intended to confer upon any person or entity other than the parties
to this Agreement and their successors in interest and permitted assignees (if
any), any rights or remedies under or by reason of this Agreement.
12.16 Waiver. Either Purchaser or Seller shall have the right to waive
any one or more conditions precedent to Closing and to proceed with the
transactions contemplated by this Agreement, without, however, releasing the
other of its obligations from any liability for loss or damage sustained by
reason of any such breach of any representation, warranty or covenant.
12.17 Exhibits. The Schedules and Exhibits referred to in this
Agreement are incorporated by reference into this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"Purchaser" "Seller"
XETA TECHNOLOGIES, INC. PRO NETWORKS CORPORATION
By /s/ Xxx X. Xxxxx By /s/ Xxxx X. Xxxxxxx
------------------------------ ------------------------------
Xxx X. Xxxxx, President Xxxx X. Xxxxxxx, President
"Principal Shareholder"
/s/ Xxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
-------------------------------------- -----------------------------------
XXXXX XXXX XXXXXXX, Trustee of the XXXX XXXXXX XXXXXXX, Trustee of the
Xxxxx Xxxx Xxxxxxx Revocable Living Xxxx Xxxxxx Xxxxxxx Revocable
Trust dated December 17, 1999 Living Trust dated December 17,
1999
/s/ Xxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
-------------------------------------- -----------------------------------
XXXXX XXXX XXXXXXX, individually XXXX XXXXXX XXXXXXX, individually
