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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
QUANTA SERVICES, INC.,
NORAM TELECOMMUNICATIONS, INC.,
ADVANCED COMMUNICATION TECHNOLOGIES, INC.
AND
XETA CORPORATION
DATED AS OF FEBRUARY 22, 2000
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of the 22nd
day of February, 2000, by and among Quanta Services, Inc., a Delaware
corporation ("Quanta"), Noram Telecommunications, Inc., an Oregon corporation
(together with Quanta, the "Stockholders"), Advanced Communication Technologies,
Inc., an Oregon corporation that is a subsidiary of the Stockholder (the
"Company") and XETA Corporation, an Oklahoma corporation ("Purchaser")
WHEREAS, the Company desires to sell its business to Purchaser as a
going concern and in connection therewith sell substantially all of the assets
of the Company to Purchaser, and Purchaser desires to purchase such business and
assets and assume certain liabilities of the Company relating thereto, upon the
terms and conditions set forth in this Agreement (the "Asset Purchase"); and
WHEREAS, the Company is in the business of providing telecommunication
equipment and services for both voice and data applications, including call
accounting, answer confirmation, PBX and voice mail systems for commercial and
industrial uses;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants contained
herein, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. Capitalized terms used in this Agreement shall have
the following meanings:
"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.
"Agreement" has the meaning set forth in the first paragraph of this
Agreement.
"Asset Purchase" has the meaning set forth in the third paragraph of
this Agreement.
"Assets" has the meaning set forth in Section 2.1.
"Assumed Liabilities" means the liabilities and obligations of the
Company or relating to the Company's business or operations to be assumed by
Purchaser at the Closing in accordance with Section 2.3.
"Book Value" means the sum of (i) stockholders' equity as reflected in
the Financial Statements, (ii) intercompany payables, (iii) negative cash
balances and (iv) accrued liabilities constituting Excluded Liabilities.
"Closing" has the meaning set forth in Section 2.6.
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"Closing Date" has the meaning set forth in Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the first paragraph of this
Agreement.
"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.
"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 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.
"Escrow Agent" means Bank One Trust Company, National Association.
"Escrow Agreement" means an Escrow Agreement to be dated as of the
Closing Date by and among the Company, Purchaser and the Escrow Agent, in form
and substance satisfactory to the Company and the Purchaser.
"Excluded Assets" has the meaning set forth in Section 2.1.
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"Excluded Liabilities" has the meaning set forth in Section 2.3.
"Expiration Date" has the meaning set forth in Section 7.8.
"Final Book Value" has the meaning set forth in Section 2.2.
"Final Book Value Certificate" has the meaning set forth in Section
2.2.
"Financial Statements" has the meaning set forth in Section 3.3.
"GAAP" means generally accepted accounting principles consistently
applied for all periods involved.
"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.
"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 derivative or by-product
thereof, radon, radioactive material, asbestos or asbestos containing material,
urea formaldehyde foam insulation, lead or polychlorinated biphenyls.
"Indemnified Party" has the meaning set forth in Section 6.3.
"Indemnifying Party" has the meaning set forth in Section 6.3.
"Indemnity Deposit" has the meaning set forth on Section 2.2.
"JAMS" has the meaning set forth in Section 7.10.
"Judge List" has the meaning set forth in Section 7.10.
"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,
recordkeeping, zoning, discrimination, antitrust and wage and hour matters, in
each case as amended and in effect from time to time.
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"Leases" means all leases for facilities leased by the Company.
"Letter of Intent" means that certain letter of intent dated February
3, 2000 by and between Quanta Services, Inc. and Purchaser, as amended or
supplemented.
"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.
"Permits" has the meaning set forth in Section 3.7.
"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 3.6.
"Taxes" has the meaning set forth in Section 3.12.
"Third Person" has the meaning set for thin Section 6.3.
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) the words "herein," "hereof," and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision; and
(c) 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."
ARTICLE II
THE PLAN OF ACQUISITION
2.1. ACQUISITION OF THE ASSETS. Upon the terms and subject to the
conditions of this Agreement, at the Closing, the Company agrees to sell,
convey, transfer, assign and deliver to Purchaser, and Purchaser agrees to
purchase from the Company, all of the Company's assets,
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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 and any created by Purchaser.
Without limiting the generality of the foregoing, the Assets shall consist of
all assets of the Company as of the Closing, including, without limitation, the
following:
(a) all accounts and notes receivable of the Company;
(b) all inventory (including, without limitation, spare parts
inventory) and work-in-progress of the Company;
(c) all customer lists, sales records, credit data and other
information relating to customers of the Company;
(d) all rights, title and interest of the Company in, to and
under all existing contracts and agreements, written and verbal to
which the Company is a party, all as listed in Schedule 3.6;
(e) the vehicles and other transportation equipment of the
Company;
(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 the Company;
(g) all rights, title and interest of the Company in and to
and under all licenses, franchises, permits, transportation authorities
and other governmental authorizations, and intangible assets owned or
possessed by the Company, including, without limitation, the layout and
content of the web site used by the Company to the extent such layout
and content relates exclusively to the Company and the Permits listed
in Schedule 3.7;
(h) all rights, title and interest of the Company in, to and
under all intangible property of the Company, the goodwill associated
therewith and the rights and privileges used in the conducting of the
business of the Company and the right to recover for infringement
thereon;
(i) the name "Advanced Communication Technologies, Inc." and
any trade names or other assumed names under which the Company operates
other than Noram Telecommunications, Inc. or Quanta Services, Inc. or
any similar names;
(j) copies of the Company's books, records, papers and
instruments of whatever nature and wherever located that relate to the
businesses of the Company or the Assets or which are required or
necessary for Purchaser to conduct the businesses
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of the Company from and after the Closing in the manner in which they
were being conducted before the Closing;
(k) all insurance proceeds and insurance claims of the Company
that relate exclusively to any business in which the Company is engaged
or all or any part of the Assets, other than with respect to the
Excluded Liabilities, and to the extent transferable, the benefit of
and the right to enforce the covenants and warranties, if any, that the
Company is entitled to enforce with respect to the Assets against its
predecessors in title to the Assets, if any;
(l) all rights, title and interest of the Company in computer
equipment and hardware used exclusively by the Company, 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 and intellectual
property with such computer equipment and hardware;
(m) all rights, title and interests of the Company in, to and
under all rights, privileges, claims, causes of action, and options
relating or pertaining exclusively to the Company's business or the
Assets; and
(n) all other or additional privileges, rights, interest,
properties and assets of the Company of every kind and description and
wherever located, that are exclusively used or intended for the
exclusive use in connection with the Company's business as presently
being conducted, including, without limitation, the Leases.
The "Excluded Assets" are the assets of the Company listed on Schedule
2.1.
2.2. PURCHASE PRICE. The purchase price for the Assets shall be the
Book Value of the Company as of the Closing Date plus $250,000.
(a) At the Closing:
(i) Purchaser shall pay the Company in cash in
immediately available funds (by wire transfer in accordance
with the wiring instructions set forth on Schedule 2.2) an
amount equal to the Book Value of ACT as of January 31, 2000
adjusted upward or downward for intercompany cash transactions
between January 31, 2000 and the Closing Date; and
(ii) deliver $250,000, in cash in immediately
available funds (by wire transfer in accordance with the
wiring instructions set forth on Schedule 2.2), to the Escrow
Agent as provided for in the
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Escrow Agreement (the "Indemnity Deposit") to be applied in
accordance with the terms of the Escrow Agreement.
(b) Not later than April 30, 2000, Purchaser shall deliver to
the Company a certificate (the "Final Book Value Certificate") signed
by an officer of Purchaser indicating the Book Value of the Company as
of February 29, 2000 (the "Final Book Value") as determined by
Purchaser in good faith and Purchaser's proposed allocation of the
Purchase Price, and, subject to subsection (c) below, Purchaser shall
pay the Company an amount equal to the excess of the Final Book Value
over the amount paid to the Company pursuant to Section 2.2(a)(i);
provided that if the Final Book Value is less than the amount paid to
the Company pursuant to Section 2.2(a)(i), the Company shall reimburse
Purchaser to the extent of such deficit. The books of the Company shall
be closed as of February 29, 2000 consistent with past practice in
accordance with GAAP.
(c) Notwithstanding subsection (b) above, the Company and its
representatives shall have the right for a period of 30 days after
receiving the Final Book Value Certificate to review the books and
records of the Company as of the Closing Date and, if the Company deems
necessary, for a period of 90 days thereafter, to have an independent
public accountant examine such book and records, to verify Purchaser's
calculation of the Final Book Value and proposed allocation of the
Purchase Price. If the Company does not agree with Purchaser's
calculation of Final Book Value or proposed allocation of the Purchase
Price, the parties shall negotiate in good faith to determine Final
Book Value and/or an allocation of the Purchase Price reasonably
acceptable to the parties.
2.3. ASSUMED LIABILITIES. As further consideration for Asset Purchase,
Purchaser shall assume and discharge (i) all liabilities and obligations of the
Company properly shown and adequately reserved for in the Financial Statements
except those liabilities listed in Schedule 2.3 ("Excluded Liabilities"), (ii)
all liabilities of the Company or the Stockholders arising from the Company's
termination without cause of an employee's employment by reason of the
consummation of the Asset Purchase in cases where Purchaser does not offer such
employee substantially equivalent reemployment, and (iii) all liabilities and
obligations of the Stockholders arising from guarantees of the Company's
liabilities and obligations described in item 2.3(i). In the event of any
terminations of employment for which Purchaser is to assume any liability
pursuant to this provision, the Purchaser will notify the Company of such
termination within three days thereof and the Company shall be responsible for
providing all employee notifications required by COBRA and any other applicable
Federal or state employment or labor law or regulation.
2.4. CONVEYANCE DOCUMENTS. At the Closing, the Company shall execute
and deliver to Purchaser (i) a completed Xxxx of Sale, Receipt and Assignment
and Assumption Agreement, in a mutually acceptable form, covering all of the
Assets and (ii) a certificate of title to any Asset covered by a certificate of
title. At all times hereafter as may be necessary, the Company shall execute and
deliver to Purchaser such other instruments of transfer as shall be reasonably
necessary or
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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
2.5. ALLOCATION OF PURCHASE PRICE. Upon a determination of the
allocation of the Purchase Price in accordance with Section 2.2, Purchaser, the
Company and the Stockholders agree that they shall not take any position or
action inconsistent with such allocation in the filing of any federal income tax
returns.
2.6. CLOSING. The consummation of the purchase of the Assets and the
other transactions contemplated by this Agreement (the "Closing") shall take
place at the offices of Quanta, 0000 Xxxx Xxx Xxxx., Xxxxx 0000, Xxxxxxx, Xxxxx,
xx the later of February 29, 2000 or five days following Purchaser's receipt of
the Company's January 31, 2000 financial statements, or at such other time and
date on which the Company and Purchaser may mutually agree, which date shall be
referred to as the "Closing Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS AND THE COMPANY
The Stockholders and the Company represent and warrant to Purchaser as
follows:
3.1. DUE ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Oregon 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. The Company 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. The Company is in good standing in each
jurisdiction in which the operation of its business requires it to be registered
to do business.
3.2. AUTHORIZATION; NON-CONTRAVENTION; APPROVALS.
(a) The Company has the requisite power and authority to enter
into this Agreement and to effect the transactions contemplated hereby.
The Stockholder 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 the board of directors of the Company
and by the Stockholder. No additional corporate proceedings on the part
of the Company is necessary to authorize the execution and delivery of
this Agreement and the consummation by the Company of the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by the Company and the Stockholder, and, assuming the due
authorization, execution and delivery hereof by Purchaser, constitutes
a valid and binding agreement of the Company and the Stockholder,
enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting
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creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity.
(b) The execution and delivery of this Agreement by the
Company and the Stockholder do not, and the consummation by the Company
and the Stockholder of the transactions contemplated hereby will not,
(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 of termination or
acceleration under, or result in the creation of any Encumbrances upon
any of the properties or assets of the Company under any of the terms,
conditions or provisions of, (X) the Articles of Incorporation or
Bylaws of the Company, (Y) any Laws applicable to the Company or any of
the properties or assets of the Company, or (Z) except as set forth in
Schedule 3.2, any material instrument or agreement which the Company is
now a party or by which the Company or any of its properties or assets
may be bound or affected.
(c) No declaration, filing or registration with, or notice to,
or authorization, consent or approval of, any Governmental Authority or
third party is necessary for the execution and delivery of this
Agreement by the Company and the Stockholder or the consummation by the
Company and the Stockholder of the transactions contemplated hereby
except as set forth on Schedule 3.2 and such actions or filings which,
if not made or obtained, as the case may be, would not have a material
adverse affect.
3.3. FINANCIAL STATEMENTS. The Company has delivered to Purchaser
copies of the Company's internally-generated financial statements for the 12
months ended December 31, 1999 and will deliver to Purchaser on or before
February 29, 2000 internally-generated financial statements for the one-month
period ended January 31, 2000 (collectively, the "Financial Statements").
3.4. ACCOUNTS AND NOTES RECEIVABLE. Schedule 3.4 sets forth an accurate
list of the accounts and notes receivable of the Company as of January 31, 2000.
Receivables from and advances to employees, the Company, the Stockholder and any
entities or persons related to or Affiliates of the Stockholder or the Company
are separately identified in Schedule 3.4. Schedule 3.4 also sets forth an
accurate aging of all accounts and notes receivable as of January 31, 2000,
showing amounts due in 30-day aging categories. The trade and other accounts
receivable of the Company 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 the Company in accordance with GAAP and to the
knowledge of the Company and the Stockholders are collectible in the amounts
shown on Schedule 3.4 net of reserves reflected in the Financial Statements,
provided that the foregoing is not a guarantee of the collectibility of any one
such receivable.
3.5. ASSETS. Except as set forth in Schedule 3.5, the Company has good
and marketable title to all of the Assets and interests in the Assets or, in the
case of leased Assets, valid leasehold
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interests whether real, personal, mixed, tangible or intangible. All the owned
Assets and the Company'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
(other than the Excluded Assets) necessary to permit the Company to operate as
currently being operated. The Assets are in good working order and condition,
ordinary wear and tear excepted.
3.6. CONTRACTS. Set forth on Schedule 3.6 is a list of all material
contracts, agreements, instruments, leases and licenses to which the Company is
a party or to which any of the Assets is subject (other than material contracts,
agreements, instruments, leases and licenses which are Excluded Assets). Except
as otherwise indicated on Schedule 3.2 or Schedule 3.6 hereto, (i) neither the
Company nor, to the Company's knowledge, any other party to any such contract,
agreement, instrument, lease or license 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.
3.7. PERMITS. Schedule 3.7 contains an accurate list of all material
licenses, franchises, permits and other governmental authorizations held by the
Company (the "Permits"). The Permits are valid, and the Company has not received
any written notice that any Governmental Authority intends to cancel, terminate
or decline to renew any such Permit. The Permits are all the permits that are
required by Law for the operation of the businesses of the Company as currently
conducted and the ownership of the Assets of the Company except any Permit the
failure to have which would not have a material adverse effect. The Company has
conducted and is conducting its business in substantial compliance with the
requirements, standards, criteria and conditions set forth in the Permits.
3.8. ENVIRONMENTAL MATTERS. Except as set forth in Schedule 3.8, the
Company is in compliance, in all material respects, with all Environmental,
Health and Safety Laws, including, without limitation, Environmental, Health and
Safety Laws relating to air, water, land and the generation, storage, use,
handling, transportation, treatment or disposal of Hazardous Substances; (b) the
Company 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 the Company's knowledge, there has
been no "release" or threat of "release" (as defined in any Environmental,
Health and Safety Laws) at, from, in or on any property owned or operated by the
Company relating to the Assets and (d) to the Company'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 the Company.
3.9. LABOR AND EMPLOYEE RELATIONS. The Company is not bound by or
subject to any arrangement with any labor union, and no employees of the Company
are represented by any labor union or covered by any collective bargaining
agreement nor, to the Company's or the Stockholders' knowledge, is any campaign
to establish such representation in progress. There is no pending or, to
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the Company's or the Stockholders' knowledge, threatened labor dispute involving
the Company or any group of the Company's employees nor has the Company
experienced any significant labor interruptions over the past five years. Except
as set forth on Schedule 3.9, neither the Company nor the Stockholder has
knowledge of any claims made by or disputes with any of its employees.
3.10. NONCOMPETITION, CONFIDENTIALITY AND NONSOLICITATION AGREEMENTS.
Schedule 3.10 sets forth all agreements containing covenants not to compete or
solicit employees or to maintain the confidentiality of information to which the
Company is bound or under which the Company has any rights or obligations.
3.11. LITIGATION AND COMPLIANCE WITH LAW. Except as set forth in
Schedule 3.11, there is no material claim, action, suit or proceeding, pending
or, to the knowledge of the Company and the Stockholder, threatened against or
affecting the Company, at law or in equity, or before or by any Governmental
Authority having jurisdiction over the Company. No written notice of any claim,
action, suit or proceeding, whether pending or threatened, has been received by
the Company and, to the Stockholder's and the Company's knowledge, there is no
basis therefor. Except to the extent set forth in Schedule 3.11, the Company has
conducted and is conducting its business in compliance with all Laws applicable
to the Company, its assets or the operation of its business.
3.12. TAXES. For purposes of this Agreement, the term "Taxes" shall
mean 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. Except as set forth in Schedule
3.12, the Company 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. The
Company 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 the
Company relating to Taxes for any period or periods prior to and including
January 31, 2000 and no written notice of any claim for Taxes, whether pending
or threatened, has been received. The Company 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. The Company 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 on the Financial Statements as of January 31, 2000 are
sufficient for the payment of all Taxes for all fiscal periods
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ended on or before that date. The Company currently utilizes the accrual method
of accounting for income tax purposes. Such method of accounting has not changed
in the past five years.
3.13. SOLVENCY. The Company is not insolvent, and will not be rendered
insolvent by the transfer contemplated by this Agreement. Company assets exceed
its liabilities, and Company is currently paying its obligations as they become
due.
3.14. CHANGE OF NAME. The Company has not conducted business under any
name during the past five (5) years other than Advanced Communication
Technologies, Inc., RT Communications, RT Telecommunications, ACT, Inc. and ACT.
3.15. EMPLOYEE BENEFITS. Each employee benefit plan, policy, agreement
or arrangement, including, without limitation, any pension, stock option, share
saving, deferred compensation, profit sharing, incentive, bonus and severance
plan or arrangement has been maintained and contributed to in compliance in all
material respects with the requirements of applicable law. The Company has paid
and discharged when due all obligations and liabilities arising under such plans
and applicable law of a character which, if not paid or discharged, are likely
to result in the imposition of a material encumbrance or assertion of a material
liability enforceable against any of the Assets.
3.16. BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of the Company, 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.
3.17. DISCLOSURE. The Company has fully provided Purchaser and its
representatives with all the information that Purchaser has requested in
analyzing whether to consummate the Asset Purchase. None of the information so
provided nor any representation or warranty of the Company 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.
3.18. NO IMPLIED REPRESENTATIONS. Notwithstanding anything to the
contrary contained in this Agreement, the Company and the Stockholder have not
made any representation or warranty whatsoever, express or implied, other than
those representations and warranties of the Company and the Stockholders
expressly set forth in this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Company as follows:
4.1. ORGANIZATION. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Oklahoma. Purchaser
is duly authorized and 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.
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4.2. AUTHORIZATION; NON-CONTRAVENTION; APPROVALS.
(a) 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. 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. This
Agreement has been duly and validly executed and delivered by
Purchaser, and, assuming the due authorization, execution and delivery
by the Company and the Stockholder, 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.
(b) 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) the Certificate of Incorporation
or By-Laws of Purchaser, (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.
(c) 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.
4.3. 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.
4.4. LITIGATION. There is no suit, action, administrative proceeding or
other proceeding or governmental investigation pending, or to Purchaser's
knowledge, threatened against Purchaser that,
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if adversely determined to Purchaser could have a material adverse effect on the
ability of Purchaser to perform its obligations hereunder.
4.5. DISCLOSURE. Purchaser has fully provided the Company and the
Stockholder or their representatives with all the information that the Company
and the Stockholder have 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 V
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS. The Company shall conduct all of its
businesses 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.
5.2. FUTURE COOPERATION; FINAL BOOK VALUE; TAX MATTERS. The
Stockholder, the Company 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 the Company, the Stockholder and their respective
representatives in their review and verification, pursuant to Section 2.2
hereof, of the Final Book Value determined by Purchaser. The Company and the
Stockholder will cooperate and use their commercially reasonable best efforts to
have the present officers, directors and employees of the Company 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 the Company and the
Stockholder with access to such of Company's books and records as may be
reasonably requested by the Company or the Stockholder 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 5.1
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.
ARTICLE VI
INDEMNIFICATION
The Company, the Stockholder and Purchaser each make the following
covenants:
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6.1. INDEMNIFICATION BY THE COMPANY. Subject to Section 6.4, the
Company covenants and agrees that it will indemnify, defend, protect and hold
harmless Purchaser and its officers, directors, employees, stockholders, agents,
representatives and Affiliates, (a) for a period of six (6) months from the date
of this Agreement from and against all Losses incurred by Purchaser as a result
of Purchaser's inability to collect the trade receivables listed on Schedule 3.4
after making a good faith effort to collect such receivables (which shall not,
however, require Purchaser to institute litigation or other judicial process),
to the extent such Losses exceed the Allowance for Doubtful Accounts in the
Financial Statements and (b) until the Expiration Date, any breach of the
representations and warranties of the Company or the Stockholders set forth
herein.
6.2. INDEMNIFICATION BY PURCHASER. Subject to Section 6.4, Purchaser
covenants and agrees that it will indemnify, defend, protect and hold harmless
the Company and the Stockholders and their respective agents, representatives,
Affiliates, at all times from the date of this Agreement until the Expiration
Date from and against all Losses incurred by any of such indemnified persons as
a result of or arising from any breach of the representations and warranties of
Purchaser set forth herein.
6.3. INDEMNIFICATION CLAIMS.
(a) In the event that Purchaser asserts the existence of a
claim for indemnification under Section 6.1(a), Purchaser shall give
written notice of such claim to the Company and the Escrow Agent in
accordance with the terms of the Escrow Agreement on or before
September 1, 2000. Such written notice shall state that it is being
given pursuant to this Section 6.3, specify the nature and amount of
the receivables Purchaser is claiming are uncollectible, attach
evidence of Purchaser's good faith effort to collect such receivables
and indicate the date on which such claim shall be deemed accepted
(such date to be established in accordance with the next sentence). If
the Company does not give written notice announcing the Company's
intent to contest Purchaser's claim (or the amount thereof) within 30
days of receiving notice thereof, such claim shall be deemed accepted
and the Escrow Agent may disburse funds from the Indemnity Deposit in
accordance with the terms of the Escrow Agreement to cover such claim.
In the event, however, that the Company contests such claim (or the
amount thereof) by giving written notice to Purchaser and the Escrow
Agent in accordance with the terms of the Escrow Agreement within said
period, then the parties shall act in good faith to reach agreement
regarding such claim. If the parties cannot resolve such dispute after
good faith negotiations with respect thereto within 30 days after the
notice of contest provided by the Company, such dispute shall be
submitted to arbitration in accordance with provisions of Section 7.10.
In the event that arbitration shall arise with respect to any such
claim, the prevailing party shall be entitled to reimbursement of costs
and expenses incurred in connection with such arbitration, including
reasonable attorneys' fees.
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(b) Promptly after any party hereto (hereinafter the
"Indemnified Party") has received notice of or has knowledge of any
claim by a person not a party to this Agreement ("Third Person"), of
the commencement of any action or proceeding by a Third Person that the
Indemnified Party believes in good faith is an indemnifiable claim
under Section 6.1(b) or 6.2, the Indemnified Party shall give to the
party obligated to provide indemnification pursuant to Section 6.1(b)
or 6.2 hereof (hereinafter the "Indemnifying Party") written notice of
such claim or the commencement of such action or proceeding. Such
notice shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof, the Indemnifying Party shall
have the right to defend and settle, at its own expense and by its own
counsel, any such matter so long as the Indemnifying Party pursues the
same diligently and in good faith. If the Indemnifying Party undertakes
to defend or settle, it shall promptly notify the Indemnified Party of
its intention to do so, and the Indemnified Party shall cooperate with
the Indemnifying Party and its counsel in all commercially reasonable
respects in the defense thereof and in any settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records and other information
reasonably requested by the Indemnifying Party and in the Indemnified
Party's possession or control. After the Indemnifying Party has
notified the Indemnified Party of its intention to undertake to defend
or settle any such asserted liability, and for so long as the
Indemnifying Party diligently pursues such defense, the Indemnifying
Party shall not be liable for any additional legal expenses incurred by
the Indemnified Party in connection with any defense or settlement of
such asserted liability; provided, however, that the Indemnified Party
shall be entitled, at its expense, to participate in the defense of
such asserted liability and the negotiations of the settlement thereof.
The Indemnifying Party shall not settle any such Third Person claim
without the consent of the Indemnified Party, unless the settlement
thereof imposes no liability or obligation on, and includes a complete
release from liability of, the Indemnified Party. If the Indemnifying
Party desires to accept a final and complete settlement of any such
Third Person claim and the Indemnified Party refuses to consent to such
settlement, then the Indemnifying Party's liability under this Section
with respect to such Third Person claim shall be limited to the amount
so offered in settlement by said Third Person; provided, however, that
notwithstanding the foregoing, the Indemnified Party shall be entitled
to refuse to consent to any such proposed settlement and the
Indemnifying Party's liability hereunder shall not be limited by the
amount of the proposed settlement if such settlement does not provide
for the complete release of the Indemnified Party. If, upon receiving
notice, the Indemnifying Party does not timely undertake to defend such
matter to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the Indemnified
Party may undertake such defense through counsel of its choice, at the
cost and expense of the Indemnifying Party, and the Indemnified Party
may settle such matter, in its discretion, and the Indemnifying Party
shall reimburse the Indemnified Party for the amount paid in such
settlement
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and any other liabilities or expenses incurred by the Indemnified Party
in connection therewith.
(c) In the event that any Indemnified Party asserts the
existence of a claim giving rise to Losses (but excluding claims
resulting from the assertion of liability by Third Persons that the
Indemnified Party believes a good faith is an indemnifiable claim under
Section 6.1(b) or 6.2), such party shall give written notice to the
Indemnifying Party. Such written notice shall state that it is being
given pursuant to this Section 6.3(c), specify the nature and amount of
the claim asserted, and indicate the date on which such assertion shall
be deemed accepted and the amount of the claim deemed a valid claim
(such date to be established in accordance with the next sentence). If
such Indemnifying Party, within 60 days after the mailing of notice by
such Indemnified Party, shall not give written notice to such
Indemnified Party announcing such Indemnifying Party's intent to
contest such assertion of such Indemnified Party, such assertion shall
be deemed accepted and the amount of such claim shall be deemed a valid
claim. In the event, however, that such Indemnifying Party contests
such assertion of a claim by giving such written notice to the
Indemnified Party within said period, then the parties shall act in
good faith to reach agreement regarding such claim. In the event that
litigation shall arise with respect to any such claim, the prevailing
party shall be entitled to reimbursement of costs and expenses incurred
in connection with such litigation including reasonable attorneys'
fees, if the parties hereto, acting in good faith, cannot reach
agreement with respect to such claim within 60 days after the notice
provided by the Indemnified Party.
6.4. INDEMNIFICATION LIMITATION; RECONVEYANCE OF UNCOLLECTED ACCOUNTS.
(a) The aggregate indemnification obligation of the Company
under Section 6.1 (a) shall be limited to $250,000. Purchaser shall
reconvey to the Company any accounts receivable with respect to which a
claim for indemnification is paid by the Company.
(b) The aggregate indemnification obligation of the Company
under Section 6.1(b) shall be limited $250,000.
(c) The aggregate indemnification obligation of Purchaser
under Section 6.2 shall be limited to $250,000.
6.5. EXCLUSIVE REMEDY. Purchaser's exclusive remedy, absent fraud, for
any Loss as a result of or arising from (a) Purchaser's inability to collect the
trade receivables listed on Schedule 3.4 after making a good faith effort to
collect such receivables and (b) a breach of a representation or warranty of the
Company or the Stockholders made herein, shall be pursuant to this Article VI.
The Company's and the Stockholders' exclusive remedy, absent fraud, for any Loss
as a result of or arising from a breach of a representation or warranty of
Purchaser made herein shall be pursuant to this Article VI.
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ARTICLE VII
MISCELLANEOUS
7.1. SUCCESSORS AND ASSIGNS. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of Law) and shall be
binding upon and shall inure to the benefit of the parties hereto and the
successors of the Company and the Stockholder.
7.2. ENTIRE AGREEMENT. This Agreement (including the Schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding among the Stockholder,
the Company and Purchaser and supersede 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 Stockholder, the Company and Purchaser,
acting through their respective officers, duly authorized by their respective
Boards of Directors.
7.3. 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.
7.4. 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.
7.5. 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:
(1) If to Purchaser, addressed to them at:
XETA Corporation
0000 Xxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attn: President
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxx, Inc.
000 Xxxxx Xxxx, Xxxxx 000
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Xxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxx
Ph.: (000) 000-0000
Fax: (000) 000-0000
(2) If to the Company or the Stockholders, addressed as follows:
_ Quanta Services, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: President and General Counsel
or such other address as any party hereto shall specify pursuant to this Section
7.5 from time to time.
7.6. EXERCISE OF 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.
7.7. 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.
7.8. SURVIVAL. The parties hereto agree that their respective
representations, and warranties contained herein shall survive the Closing for a
period of two (2) years after the Closing Date (the "Expiration Date") provided
that those representatives and warranties made by the Company and/or the
Stockholders with respect to Taxes, Employee Benefit Plans and Environmental,
Health and Safety Laws shall survive the Closing for such periods of time as the
government agencies having jurisdiction over the subject matter of those
representations and warranties may be empowered to assess a liability or
deficiency with respect to any of the matters covered thereby which shall be
deemed the Expiration Date with respect to such representations and warranties.
7.9. 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.
7.10. DISPUTE RESOLUTION.
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(a) Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in accordance with the rules of the American Arbitration
Association then in effect. The arbitration shall be conducted by a
retired judge employed by the Dallas, Texas office of
J.A.M.S./Endispute, Inc. ("JAMS"). The arbitration shall be held in
JAMS' Dallas, Texas office.
(b) The parties shall obtain from JAMS a list of the retired
judges available to conduct the arbitration. The parties shall use
their reasonable efforts to agree upon a judge to conduct the
arbitration. If the parties cannot agree upon a judge to conduct the
arbitration within 10 days after receipt of the list of available
judges, the parties shall ask JAMS to provide the parties a list of
three available judges (the "Judge List"). Within five days after
receipt of the Judge List, each party shall strike one of the names of
the available judges from the Judge List and return a copy of such list
to JAMS and the other party. If two different judges are stricken from
the Judge List, the remaining judge shall conduct the arbitration. If
only one judge is stricken from the Judge List, JAMS shall select a
judge from the remaining two judges on the Judge List to conduct the
arbitration.
(c) The arbitrator shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive
damages to any injured party. The arbitrator shall have the authority
to order payment of damages, reimbursement of costs, including those
attorney fees of the prevailing party to enforce this Agreement, and
interest thereon in the event the arbitrator determines that a material
breach of this Agreement has occurred. A decision by the arbitrator
shall be final and binding. Judgment may be entered on the arbitrator's
award in any court having jurisdiction.
7.11. CONDITIONS TO CLOSING. The Purchaser's obligation to close the
Asset Purchase shall be subject to the following conditions precedent:
(a) The Company shall have delivered to Purchaser (1) a
complete copy of the Company's internally generated January 31, 2000
financial statements, and Purchaser shall have had a period of five (5)
days to review and approve the Company's financial condition and
results from operations for the period covered thereby and (2)
fully-executed copies of the contracts identified on Schedule 3.6 as
items [0, 1 and 2]; and
(b) The Company shall have obtained and delivered to Purchaser
all renewals and extensions of, and all third-party consents to
delegation or assignment, necessary to maintain all of the contracts,
leases, licenses and other agreements described in Schedule 3.6 in full
force and effect and fully enforceable according to their terms by
Purchaser as the owner thereof following consummation of the Asset
Purchase.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
XETA CORPORATION
By: /s/ XXX X. XXXXX
--------------------------------------
Name: Xxx X. Xxxxx
---------------------------------
Title: President
--------------------------------
ADVANCED COMMUNICATION TECHNOLOGIES, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------
Title: Vice President
--------------------------------
NORAM TELECOMMUNICATIONS, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------
Title: Vice President
--------------------------------
QUANTA SERVICES, INC.
By: /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------
Title: Vice President and
Associate General Counsel
--------------------------------
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