EXHIBIT 10.1
INTRATEL GROUP, LTD.
21st May 1997
Xx. Xxxxxxx X. Xxxxxxx, PRESIDENT
Athena International, L.L.C.
000 Xxx Xxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
RE: PROPOSED BUSINESS COMBINATION
Dear Xx. Xxxxxxx:
This letter sets forth the intent of IntraTel Group, Ltd. ("IntraTel"),
directly or through an affiliate, to negotiate, execute, and consummate an
acquisition agreement (the "Acquisition Agreement") pursuant to which (i)
IntraTel shall purchase the interests in Athena International, L.L.C., a
Louisiana limited liability company ("Athena") owned by Advantage Capital
Limited Partnership, Advantage Capital Partners II Limited Partnership,
Advantage Capital Partners III Limited Partnership, Advantage Capital
Partners IV Limited Partnership (the foregoing are collectively referred to
as "Advantage"), MINA Multimedia Telecommunications International, Inc.
("MINA"), Capital Asset Management Co., L.L.C. ("CAM"), P. Xxxxx Xxxxxx
("Xxxxxx") and Zecv Remez ("Remez") for cash and (ii) Athena shall merge
with IntraTel in a transaction pursuant to which Xxxxxxx X. Xxxxxx, III
("Xxxxxx"), Xxxxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxxx X. Xxxxxx ("Xxxxxx") and
Xxxxx X. Xxxx ("Xxxx") (Cooper, Landers, Xxxxxx and Xxxx are referred to
collectively as the "Key Employees") shall receive shares of common stock
of IntraTel ("IntraTel Stock").
Except as provided in paragraph K below, this letter constitutes a
statement of intent of the undersigned and is given for the purpose of
initiating contract negotiations among the parties. This letter is not
meant to set forth, nor shall it be construed as an attempt to define, all
of the terms and conditions of the transactions involved.
A. ACQUISITION CONSIDERATION. The Acquisition Agreement contemplated
herein shall provide for total consideration for the acquisition,
subject to due diligence and to adjustments and prorations (as
provided in the Acquisition Agreement) as follows:
1. CASH. In consideration of the transfer to IntraTel of all of
their interests in Athena, IntraTel shall pay to certain members
of Athena at Closing (hereinafter defined) in immediately
available funds the following approximate amounts, subject to due
diligence satisfactory to IntraTel and to adjustments and
prorations provided for in the Acquisition Agreement.
a. To Advantage, $9,000,000;
b. To MINA, $6,000,000;
c. To CAM, $450,000;
d. To Xxxxxx, $655,000; and
e. To Remez, $140,000.
000 Xxxxx Xxxxx Xxxxxx
(000) 000-0000 42nd Floor (000) 000-0000
(TELEPHONE) Xxxxx, Xxxxxxx 00000-0000 (FACSIMILE)
INTRATEL GROUP, LTD.
21st May 1997
Xx. Xxxxxxx X. Xxxxxxx, PRESIDENT
Page Two
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1. INTRATEL STOCK. In consideration of the merger of Athena into
IntraTel or an affiliate of IntraTel, IntraTel shall issue
IntraTel Stock to certain members of Athena at closing, as
follows, subject to due diligence satisfactory to IntraTel and to
adjustments and prorations provided for in the Acquisition
Agreement:
a. To each of Xxxxxx, Xxxxxxx and Xxxxxx, a number of shares of
IntraTel Stock equal to approximately 10% of the issued and
outstanding shares of IntraTel as of the Closing Date
(hereinafter defined); and
b. To Xxxx, a number of shares of IntraTel Stock equal to
approximately 1.25% of the issued and outstanding shares of
IntraTel as of the Closing Date (hereinafter defined).
A. SCHEDULE FOR TRANSACTION. The Acquisition Agreement shall be executed
not later than 25th June 1997. The closing date (the "Closing Date")
shall be subsequent to the execution of the Acquisition Agreement, and
shall be the consummation of the transactions contemplated in the
Acquisition Agreement. The Closing Date shall be five days after all
conditions to closing have been satisfied, but not more than fifteen
days after execution by all parties of the Acquisition Agreement.
Counsel to IntraTel shall begin immediately after receipt of a
counterpart of this letter, signed by Athena, to draft the Acquisition
Agreement.
B. CONTINGENCIES. The transactions contemplated herein are contingent
upon:
1. Conclusion, satisfactory to IntraTel, of IntraTel's due diligence
prior to and after execution of the Acquisition Agreement.
IntraTel shall be furnished, and may examine, properties,
permits, licenses, titles, and books and records of Athena.
IntraTel shall be entitled to review all of the books and records
of Athena, which shall include records of amounts receivable,
contracts, operating manuals, policies and procedures, vendor
names and addresses, customer names, addresses and telephone
numbers, records of customer purchases, equipment and maintenance
records, liability and health insurance policies, payroll
records, commission records, employment records, records of any
employee benefit plans maintained by Athena, licenses, and
communications between Athena and any insurer or regulatory
agency having jurisdiction over activities conducted by Athena.
Further, IntraTel may conduct interviews of Athena's counsel,
auditors, employees and other persons whom IntraTel shall
specifically identify to Athena with respect to matters relating
to Athena and its assets and liabilities. Athena will provide
IntraTel with copies of all of the documents pertaining to Athena
as IntraTel may reasonably request, and Athena and its
representative shall cooperate with and provide access to
IntraTel and its representatives in order to facilitate
IntraTel's investigations.
INTRATEL GROUP, LTD.
21st May 1997
Xx. Xxxxxxx X. Xxxxxxx, PRESIDENT
Page Three
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2. IntraTel's compliance with and obtaining of all licenses and
permits necessary for operation of the business of Athena from
and after the Closing Date.
3. Entry of IntraTel with the Key Employees into employment
agreements and covenants not to compete and other professional or
executive employees of Athena designated by IntraTel on terms
acceptable to IntraTel.
C. ABSENCE OF LITIGATION. Athena represents that there is not pending
any action, suit, proceeding, inquiry, or investigation, at law or in
equity before or by any court, public board or regulatory agency
against or affecting Athena or the operation of its business as now
conducted (nor, to the knowledge and belief of Athena, is there any
basis therefor).
D. BUSINESS CONDUCTED IN ORDINARY COURSE. Prior to the Closing, Athena
will conduct its business in the ordinary course, pay its obligations
as they become due, and will keep and maintain its assets and
insurance policies insuring the assets, intact, and at least in the
same condition as they are now, normal wear and tear excepted. Athena
shall maintain its beneficial relationships with customers, employees
and suppliers and shall advise IntraTel of any material changes of
which it becomes aware in the prospects for continuing orders by any
customer or to any supplier.
E. OTHER MATTERS. The Acquisition Agreement shall contain such other
representations, warranties, covenants, agreements, and conditions
that are acceptable to the parties and customary in acquisitive
transactions of this nature.
F. NO BROKERS. The parties each represent and warrant to the other that
no broker's commissions or fees shall be incurred in connection with
this transaction.
G. EXPENSES. Each party shall pay its own expenses in connection with
the execution and performance of this letter of intent. Each party
shall bear the costs of its own professional fees.
H. "NO SHOP" AGREEMENT. Athena, together with its Key Employees, agree
that, until 25th June 1997, they shall not, directly or indirectly,
solicit, encourage or engage in any discussions or negotiations with
third parties (other than IntraTel) concerning the acquisition of any
material portion of Athena's assets, the acquisition of any equity
interests in Athena (including, without limitation, a public or
private offering of securities of Athena or any entity into which
Athena is merged), or any other form of business combination with
Athena. Athena shall disclose to IntraTel in complete detail
immediately upon receipt any offers or inquiries received from third
parties concerning an acquisition of the assets of Athena, equity
interests, therein, or proposing any form of business combination.
INTRATEL GROUP, LTD.
21st May 1997
Xx. Xxxxxxx X. Xxxxxxx, PRESIDENT
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I. CONFIDENTIALITY. The parties understand that in the course of the due
diligence process, they shall exchange confidential information
concerning their respective businesses, and that the information of
each exchanged in the course of due diligence shall be subject to the
terms and provisions of that certain Confidentiality Agreement dated
23rd February 1997, entered into between Athena and IntraTel, the
provisions of which are incorporated herein by reference.
J. NON-BINDING EFFECT. This letter is not intended to constitute a
binding and enforceable agreement (except for the provisions of
Paragraphs H, I and J and the provisions of this paragraph, which are
fully binding upon the parties hereto). This letter is not based on
any agreement among the parties and, except as expressly provided to
the contrary, is not intended to impose any obligations whatsoever
upon any party. Except to the extent stated above in this paragraph,
the parties do not intend to be bound by any agreement until the
execution of the Acquisition Agreement, and no party may reasonably
rely upon any promise, oral or otherwise, inconsistent with this
paragraph.
By this letter of intent, we have set forth and outlined the terms on which
we wish to proceed to acquire Athena. Also set forth are our expectations
and your obligations after the signing of the letter of intent. If you are
in agreement with these matters, please sign in the space provided and
return the original of this letter of intent to us, retaining a copy for
yourself.
Sincerely yours,
INTRATEL GROUP, LTD., A Delaware Corporation
/s/ XXXXXX X. XXX
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Xxxxxx X. Xxx XX
Chairman of the Board
AGREED AND ACCEPTED AS OF THE DATE INDICATED.
ATHENA INTERNATIONAL, L.L.C., A Louisiana
Limited Liability Company ("Athena")
/s/ XXXXXXX X. XXXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxxx
President
Date: May 21, 1997
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INTRATEL GROUP, LTD.
21st May 1997
Xx. Xxxxxxx X. Xxxxxxx, PRESIDENT
Page Five
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/s/ XXXXXXX X. XXXXXX III
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Xxxxxxx X. Xxxxxx III
Executive Vice President
Date: May 21, 1997
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/s/ XXXXXX X. XXXXXX
-----------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President
by: Xxxxxxx X. Xxxxxxx through Limited
Power of Attorney
Date: May 21, 1997
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