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EXHIBIT 10.1
INTELECT TECHNOLOGIES INC.
AGREEMENT TO FORM JOINT VENTURE
This Agreement to Form Joint Venture (this "Agreement") is entered into
as of the 17th day of August, 2001 between TeraForce Technology Corporation, a
Delaware corporation ("TF"), and Singapore Technologies Electronics Limited, a
Singapore corporation ("STE").
WHEREAS, each of TF and STE has approved, and deems it advisable and in
the best interests of such party to consummate, the formation of the Corporation
in accordance with the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth herein, intending to be legally bound, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
"Agreement" is defined in the preamble to this Agreement.
"Assets" means the assets of INT listed on Exhibit A to the Xxxx of
Sale.
"Xxxx of Sale" is defined in Section 3.1.
"Bylaws" is defined in Section 2.1.
"Certificate of Incorporation" is defined in Section 2.1.
"Closing" is defined in Section 7.1.
"Closing Date" means the date on which the Closing occurs.
"Corporation" means Intelect Technologies Inc., a Delaware corporation.
"Common Stock" means the common stock, par value $.01 per share, of the
Corporation.
"INT" means Intelect Network Technologies Company, a Nevada
corporation.
"Sharing Agreement" is defined in Section 3.2.
"STE" is defined in the preamble to this Agreement.
"Stockholders Agreement" is defined in Section 4.1.
"TF" is defined in the preamble to this Agreement.
"Transition Services Agreement" is defined in Section 5.1.
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ARTICLE II
FORMATION OF THE CORPORATION; FINANCING; ISSUANCE OF STOCK
Section 2.1 Organization of the Corporation. Each of TF and STE hereby
approve the Certificate of Incorporation of the Corporation in the form of
Exhibit 2.1 (the "Certificate of Incorporation") and the Bylaws of the
Corporation in the form of Exhibit 2.2 (the "Bylaws"). On or before 5 days
before the Closing Date, TF and STE shall use their best efforts to file the
Certificate of Incorporation with the Secretary of the State of Delaware.
Section 2.2 Financing; Issuance of Shares. Subject to the terms and
conditions of this Agreement, on the Closing Date STE shall contribute
$2,500,000 cash to the Corporation as a capital contribution in exchange for
6,000 shares of Common Stock. Subject to the terms and conditions of this
Agreement, on the Closing Date TF shall contribute $1,250,000 cash to the
Corporation as a capital contribution in exchange for 3,000 shares of Common
Stock.
ARTICLE III
PURCHASE OF ASSETS
Section 3.1 Purchase of Assets from INT. Subject to the terms and
conditions hereof, on the Closing Date TF shall cause INT to sell the Assets to
the Corporation for a purchase price of $2,250,000 cash pursuant to a Xxxx of
Sale in the form attached hereto as Exhibit 3.1 (the "Xxxx of Sale"). Subject to
the terms and conditions hereof, on the Closing Date, TF shall also cause to be
executed and delivered such other conveyance instruments necessary to transfer
title to any of the Assets (including, but not limited to, an assignment of the
patent and other instruments necessary to transfer various intellectual property
rights). The purchase price is allocated among the Assets as follows:
$ $1,500,000 to inventory
$ $749,000 to fixed assets
$ $1,000 to intellectual property.
Section 3.2 Sharing Agreement. Subject to the terms and conditions in
this Agreement, on the Closing Date TF shall execute and deliver to the
Corporation, and shall cause INT to execute and deliver to the Corporation, the
Sharing Agreement among the Corporation, TF and INT in the form of Exhibit 3.2
attached hereto (the "Sharing Agreement").
Section 3.3 Title. On the date hereof and on the Closing Date, TF
represents and warrants to STE that INT has good and marketable title to all of
the Assets and that upon delivery of the Xxxx of Sale, subject to the terms and
conditions of this Agreement, the Corporation will have good and marketable
title to all of the Assets.
Section 3.4 Name. Promptly following the Closing Date, TF shall cause
INT to change its name to "1240 Xxxxxxxx Corp.," and TF shall thereafter cause
INT not to conduct business under the name "Intelect Network Technologies"
except to pursue and defend claims relating to its business conducted prior to
the Closing Date and in respect of winding down the business of INT such as
filing tax returns and the like.
Section 3.5 Guaranty. TF absolutely and unconditionally guarantees
INT's performance of its obligations under any agreement or other instrument
executed by INT in connection with the formation of the Corporation.
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ARTICLE IV
STOCKHOLDER/MANAGEMENT MATTERS
Section 4.1 Stockholders Agreement. Subject to the terms and conditions
of this Agreement, on the Closing Date each of TF and STE shall execute and
deliver the Stockholders Agreement in the form of Exhibit 4.1 attached hereto
(the "Stockholders Agreement").
Section 4.2 Initial Board of Directors; Executive Officers. The
Corporation's board of directors shall be initially composed of two (2)
directors. In accordance with the Bylaws, and as soon as practicable following
the formation of the Corporation, each Stockholder will cause its respective
designee to the board of directors to (i) increase the size of the board of
directors to five (5) persons; (ii) elect two additional designees of STE to the
board of directors; and (iii) elect one additional designee of TeraForce to the
board of directors. Subject to the terms and conditions of this Agreement, on
the Closing Date the Board of Directors of the Corporation shall consist of two
directors as follows: Xxxxxx X. Xxxxxxxx, appointee of TF and Seah Moon Ming,
appointee of STE. The initial executive officers of the Corporation shall be
Xxxxx X. Xxxxxxxx, President and Secretary, and Ng Xxx Xxxx, Chief Executive
Officer.
ARTICLE V
TRANSITION SERVICES AGREEMENT
Section 5.1 Transition Services Agreement. Subject to the terms and
conditions of this Agreement, on the Closing Date TF shall execute and deliver
to the Corporation a Transition Services Agreement in the form of Exhibit 5.1
attached hereto (the "Transition Services Agreement").
ARTICLE VI
NONCOMPETITION COVENANT
Section 6.1 Noncompetition. TF agrees that TF shall not, directly or
indirectly, engage in, own, manage, operate, finance, control, or participate in
the management, operation, or control of, be employed by, associated with, or in
any manner connected with, lend TF's or INT's name or any similar name to, lend
TF's or INT's credit to, or render services or advice to, any business directly
competitive with the OmniLynx line of products formerly marketed by INT and the
next generation OmniLynx, identified as the OL2400 in INT marketing literature
and the OmniLynx OL-2400 Initial Product Requirements dated January 20, 2000
(i.e., from OC-48/STM-16, OC-12/STM-4, OC-3/STM-1 bandwidth grooming to the DS1
and DS0), prior to the date hereof anywhere within the United States or the
world. TF agrees that this covenant is reasonable with respect to its
geographical area, and scope. STE acknowledges and agrees to the permitted usage
by TF of retained knowledge of retained employees all as set forth in Section
3.4 of the Sharing Agreement.
Section 6.2 Remedies upon Breach of Noncompetition Covenant. If TF
breaches the covenant set forth in Section 6.1, the Corporation will be entitled
to the following remedies:
(a) Damages from TF;
(b) In addition to its right to damages and any other rights
it may have, to obtain injunctive or other equitable relief to restrain
any breach or threatened breach or otherwise to specifically enforce
the provisions of Section 6.1, it being agreed that money damages alone
would be inadequate to compensate the Corporation and would be an
inadequate remedy for such breach.
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(c) The rights and remedies of the parties to this Agreement
are cumulative and not alternative.
ARTICLE VII
CLOSING
Section 7.1 Closing. The closing (the "Closing") shall take place at
the offices of Xxxxxx and Xxxxx, LLP, at 0000 X. Xxxxxxx Xxxx., Xxxxx 0000,
Xxxxxxxxxx, Xxxxx 00000, at 10:00 a.m., Dallas time, on August 28th, 2001, or,
if later, on the first business day on or by which the last to be fulfilled or
waived of the conditions set forth in Sections 7.2 and 7.3 hereof shall be
fulfilled or waived in accordance therewith, but in any event not later than
August 30, 2001.
Section 7.2 Conditions to TF's Obligation to Close. TF's obligation to
consummate the transactions contemplated under this Agreement and to take the
other actions required by TF to be taken at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by TF in writing, in whole or in part):
(a) STE shall have duly executed and delivered to TF the
Stockholders Agreement.
(b) The Corporation shall have been incorporated in Delaware and
shall have qualified to do business in Texas.
(c) The Corporation shall have duly executed and delivered each of
the Stockholders Agreement, the Sharing Agreement among the
Corporation, TF and INT, and the Transition Services
Agreement.
(d) The Corporation shall have delivered a stock certificate to TF
evidencing 3,000 shares of the Corporation's Common Stock.
(e) The Corporation shall have paid by wire transfer of
immediately available funds $2,250,000 to an account
designated by TF for the purchase of the Assets.
(f) STE shall have paid by wire transfer of immediately available
funds $2,500,000 to an account designated by the Corporation
as a capital contribution.
(g) Each of STE's designated directors of the Corporation shall
have executed and delivered to TF the Organizational Consent
of the Corporation.
(h) STE shall have delivered to TF copies of resolutions approving
the transactions contemplated by this Agreement.
Section 7.3 Conditions to STE's Obligation to Close. STE's obligation
to consummate the transactions contemplated under this Agreement and to take the
other actions required by STE to be taken at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by STE in writing, in whole or in part):
(a) TF shall have duly executed and delivered to STE the
Stockholders Agreement.
(b) The Corporation shall have been incorporated in Delaware and
shall have qualified to do business in Texas.
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(c) The Corporation shall have duly executed and delivered each of
the Stockholders Agreement, the Sharing Agreement, and the
Transition Services Agreement.
(d) INT shall have duly executed and delivered to the Corporation
the Xxxx of Sale and any other documents evidencing the
purchase and sale of the Assets.
(e) The Corporation shall have delivered a stock certificate to
STE evidencing 6,000 shares of the Corporation's Common Stock.
(f) TF shall have paid by wire transfer of immediately available
funds $1,250,000 to an account designated by the Corporation
as a capital contribution.
(g) Each of TF's designated directors of the Corporation shall
have executed and delivered to TF the Organizational Consent
of the Corporation.
(h) TF shall have delivered copies of resolutions of the Board of
Directors of TF and the Board of Directors and Stockholder of
INT approving the transactions contemplated by this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Press Releases; Publicity. Each of the parties to this
Agreement agrees with the other parties hereto that, except as may be required
to comply with the requirements of applicable law or the rules and regulations
of any stock exchange upon which the securities of one of the parties or its
affiliates is listed, no press release or similar public announcement or
communication will be made or caused to be made concerning the execution or
performance of this Agreement unless specifically approved in advance by all
parties hereto; provided, however, that to the extent that either party to this
Agreement is required by applicable law or the rules and regulations of any
stock exchange upon which the securities of one of the parties or its affiliates
is listed to make such a public disclosure, such public disclosure shall only be
made after prior consultation with the other party to this Agreement.
Section 8.2 Further Agreements. TF and STE agree to use their good
faith efforts to complete and execute, as soon as practicable following the
execution of this Agreement, all documentation necessary, appropriate or
desirable to carry out the transactions agreed to by the parties in this
Agreement.
Section 8.3 GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED AND THE
RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE UNITED
STATES APPLICABLE THERETO AND THE LAWS OF THE STATE OF TEXAS APPLICABLE TO AN
AGREEMENT EXECUTED, DELIVERED AND PERFORMED IN SUCH STATE. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the United States
District Court for the Northern District of Texas and, if such court does not
have jurisdiction, of the courts of the State of Texas in Dallas County, for the
purposes of any action arising out of this Agreement, or the subject matter
hereof or thereof brought by any other party.
Section 8.4 Successors and Assigns. The provisions hereof shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors. This Agreement is not assignable without the prior written consent
of the other party hereto.
Section 8.5 Entire Agreement; Amendment. This Agreement (including the
exhibits and schedules attached hereto) and the other documents delivered
pursuant hereto and referenced herein constitute the full and entire
understanding and agreement between the parties with regard to the subject
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matter hereof and thereof and supersede any prior or contemporaneous, written or
oral agreements or discussions between the parties. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated, except by a written instrument signed by the parties
hereto.
Section 8.6 Waiver. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel to enforce any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel.
Section 8.7 Notices, Etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by first-class
mail, postage prepaid, or delivered by hand, messenger, telecopy or regularly
scheduled overnight courier, and shall be deemed given when received at the
addresses of the parties set forth below, or at such other address furnished in
writing to the other parties hereto.
If to TF: TeraForce Technology Corporation
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxx and Xxxxx, LLP
0000 X. Xxxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Boeing
Fax: (000) 000-0000
If to STE: Singapore Technologies Electronics Limited
00 Xxx Xx Xxx Xxxxxx 00
Xxxxxxxxx 000000
Attn: Ng Xxx Xxxx
Fax: (00) 0000000
Fax: (000) 000-0000
Section 8.8 Delays or Omissions. Except as otherwise provided herein to
the contrary, no delay or omission to exercise any right, power or remedy
inuring to any party upon any breach or default of any party under this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. All remedies either under
this Agreement or by law or otherwise afforded to the parties shall be
cumulative and not alternative.
Section 8.9 Severability. If any provision of this Agreement shall be
invalid, illegal or unenforceable, such provision shall be reformed to the
extent necessary to permit enforcement thereof, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. If any of the covenants set forth in Article VI are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against TF.
Section 8.10 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
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Section 8.11 Titles and Subtitles. The titles of the articles,
sections, paragraphs and subparagraphs of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement.
Section 8.12 Dollar Amounts. All dollar amounts in this Agreement shall
be in United States dollars.
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This Agreement has been executed and delivered as of the date first
written above.
SINGAPORE TECHNOLOGIES TERAFORCE TECHNOLOGY CORPORATION
ELECTRONICS LIMITED
By: /s/ Xxxxx Xxxx Ming By: /s/ Xxxxxx X. Xxxxxxxx
------------------- ----------------------
Name: Seah Moon Ming Name: Xxxxxx X. Xxxxxxxx
Title: President Title: Chairman and Chief Executive Officer
