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EXHIBIT 10.142
MEMORANDUM OF AGREEMENT
The Memorandum of Agreement ("MOA") made this 11th day of
March, 1996 by and among Teltronics, Inc., a Delaware corporation with offices
located at 0000 Xxxxxxxxx Xxxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxx 00000
("Teltronics"), as agent and on behalf of ISL, Inc., a Delaware corporation to
be formed ("ISL"), Interactive Solutions Limited, a Kentucky limited liability
company ("Interactive") and its members, Xxxxx Xxxxxx residing at
______________, ______________, ____________ _______, Xxxxx Xxxxx residing at
______________, ______________, ____________ _______, Xxxx Xxxxx residing at
______________, ______________, ____________ _______, (the three members
hereinafter referred to as the "Group").
WHEREAS, certain technology was developed by the Group and
Interactive together with any and all rights associated therewith, including,
but not limited to the ideas, designs, patents, trademarks and proprietary
information related to the business of Interactive ("Technology"); and
WHEREAS, the Group owns 68.91% of the outstanding securities
of Wesco Capital Holding Corp. ("Wesco")(the "Shares"); and
WHEREAS, on the terms and subject to the conditions described
herein ISL desires to purchase from Interactive and the Group and Interactive
and the Group desire to sell to ISL all of their rights, title and interest in
and to the Shares of Wesco and all of their rights, title and interest in and
to the Technology.
NOW THEREFORE, in consideration of the foregoing premises and
the mutual agreements hereinafter set forth, the parties hereto agree as
follows:
1. ORGANIZATION, CAPITALIZATION OF ISL.
(a) Certificate of Incorporation. As soon
practicable after signing of this MOA, Teltronics shall cause ISL to be
incorporated under the State of Delaware by executing and signing with the
Delaware Secretary a Certificate of Incorporation.
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2. PURPOSE. ISL shall be formed to acquire the Shares and
Technology in order to research and develop hardware and software technologies
for the telecommunications and computer industry and to engage in any lawful
act or activity for which corporations may be organized pursuant to the
Delaware Corporation Law.
3. CORPORATE MANAGEMENT.
(a) Directors. The following individuals will be the
initial members of the Board of Directors of ISL upon the Closing as defined in
paragraph 6 of the MOA ("Closing"):
Xxxx X. Xxxxxxx CEO
Xxxxx Xxxxxx President
Xxxx Xxxxxxx CFO
(b) Officers. The following individuals will be the
initial officers of ISL and will hold the office set forth below opposite their
name upon the Closing:
Xxxx X. Xxxxxxx Chief Executive Officer
Xxxx Xxxxxxx Chief Financial Officer
Xxxxx Xxxxxx President
Xxxxx Xxxxx Vice President
(c) Employment Agreement. On or at the Closing, ISL
shall take any and all appropriate action to enter into separate Employment
Agreements with each of Xxxxx Xxxxxx and Xxxxx Xxxxx providing for a term of
five (5) years. The Employment Agreement shall allow each employee to be
eligible to participate in any benefit plans offered to salaried employees of
Teltronics. The Employment Agreement may be terminated at any time for cause,
and will provide for ninety (90) days severance pay if terminated without cause
and shall contain such other terms deemed necessary or appropriate by the
mutual agreement of ISL and the employee.
(d) Administrative Services Agreement. At the Closing,
ISL shall enter into an Administrative Services Agreement with Teltronics
pursuant to which Teltronics shall provide management and administrative
services to ISL at a level to be mutually determined for which Teltronics shall
be compensated for providing such management and administrative services.
4. PURCHASE OF AND SALES OF SHARES AND TECHNOLOGY. At the
Closing and subject to the terms and conditions of this MOA:
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(a) Group shall sell, assign, transfer and deliver to
ISL and ISL shall purchase from the Group all of the Shares of Wesco, held by
them, free and clear of all liens, claims, charges, restrictions, equities or
encumbrances of any kind.
(b) Group shall sell, assign, transfer and deliver to
ISL and ISL shall purchase from Group all of their rights, title and interest
in and to the Technology.
(c) Interactive shall sell to ISL and ISL shall purchase
from Interactive all of its rights, title and interest in and to the
Technology.
(d) As consideration for the Shares and all interest of
the Group and Interactive in and to the Technology, ISL shall deliver
1,000,000 Non-Voting Convertible Common Shares of Teltronics par value of
$.001/share (the "Convertible Common") which shall contain and be issued
subject to the terms described in Exhibit A to this MOA.
(e) Group and Interactive shall enter into an
Indemnification Agreement under which Group and Interactive shall agree that
the Convertible Common shall be held in escrow to indemnify and hold harmless
ISL and/or Teltronics, from and against:
(i) any breach of the representations and
warranties made by Group in this MOA; and
(ii) any claim made or threatened to be made by or
on behalf of Wesco and/or any party other than Group relating to this MOA, the
transactions contemplated hereunder and/or the Technology.
5. REPRESENTATIONS AND WARRANTIES.
Group jointly and severally represent and warrant to ISL and
Teltronics, as follows:
(a) Group owns and holds legal title to the Shares free
and clear of all liens, claims, equities or encumbrances of any kind.
(b) Group has all of the necessary authority to enter
into and is not prohibited from entering into, this MOA and perform and
complete the transactions contemplated hereunder.
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(c) The execution and delivery of this MOA does not and
the performance of this MOA will not conflict with or result in a breach or
violation under, the terms of any agreement, indenture, mortgage or other
instrument to which Group or their interest in the Technology or Shares are
subject.
6. CLOSING. Except as may be otherwise agreed to by the parties,
the closing of the purchase and sale ("Closing") of the Shares and Technology
shall take place at ISL offices, 0000 Xxxxxxxxx Xxxxxxxxxx Xxx, Xxxxxxxx,
Xxxxxxx on or before the 15th day of April, 1996 ("Closing Date") at 10:00 a.m.
7. CONDITIONS PRECEDENT TO TELTRONICS' OBLIGATIONS. All of the
obligations of ISL and/or Teltronics under this MOA are subject to fulfillment
prior to or at the Closing of the following to the satisfaction of Teltronics:
(a) Interactive and/or Group have good and marketable
title to the Technology, free and clear of all liens, security interests,
licenses, encumbrances of any kind or nature whether recorded or resulting by
operation of law.
(b) Each of the representations and warranties of the
Group contained in the MOA shall be true at the Closing as though such
representations and warranties were made at the Closing.
(c) There shall have occurred no change in, damage to or
claims against the Technology.
(d) Interactive shall have acquired, on terms and
conditions satisfactory to Teltronics, a release by Wesco of any and all
claims by Wesco for an aggregate payment of $100,000.
8. MISCELLANEOUS PROVISIONS.
(a) Entire Agreement. This instrument contains the
entire agreement of the parties with respect to its subject matter and
supersedes and replaces any prior agreement or understanding (oral and written)
including specifically but not exclusively the Memorandum of Agreement dated
March 8, 1996, and no amendment, modification or waiver of any provision hereof
shall be valid unless it be in writing and signed by all the parties hereto.
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(b) Non-Waiver. The waiver of or failure to take action
with regard to any breach of any term or condition of this MOA shall not be
deemed to constitute a continuing waiver or a waiver of any other breach of the
same or any other term or condition.
(c) Paragraph and Other Headings. The paragraph and
other headings contained in this MOA are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.
(d) Counterparts. This MOA may be executed
simultaneously in two (2) or more counterparts, any of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument, notwithstanding that all of the parties are not signatory to the
original or the same counterparts.
(e) Persons Bound. This MOA and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective legal representatives, heirs, distributees, successors and assigns.
(f) Choice of Law. This MOA shall be construed and
enforced in accordance with and governed by the laws of the State of Florida.
(g) Gender and Number. The masculine gender as used in
this MOA shall be deemed to refer to and include the feminine and neuter
genders and the singular and plural when required by the context shall be
deemed to include the plural or singular, as the case may be; the word "person"
shall include corporation, firm, partnership or other form of association.
(h) Severability. If any provision of this MOA or the
application thereof to any person or circumstances is held invalid, the
remainder of this MOA and the application of that provision to other persons
and circumstances shall not be affected thereby.
(i) Inconsistent Provisions. If any provisions of this
MOA is inconsistent with any provision of any other document requirement or
executed pursuant to this MOA, the provisions of this MOA shall be controlling
and supersede such other document.
IN WITNESS WHEREOF, the parties have caused this MOA to be executed
and delivered the date and year first above written.
Interactive Solutions Limited
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a Kentucky Limited Liability Company
By: /s/ Xxxxx Xxxxxx
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Its:
President
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Teltronics, Inc., as agent for and
on behalf of a corporation to be formed
By: /s/ Xxxx X. Xxxxxxx
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Its:
President & CEO
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/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
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EXHIBIT A
TELTRONICS, INC.
SUMMARY OF PROPOSED TERMS
ISSUER: Teltronics, Inc. ("Issuer")
SECURITIES: 1,000,000 shares of non-voting common stock,
$.001 par value ("Convertible Common").
DIVIDENDS: Shares will have dividends only if,
when and as declared by the Board of
Directors.
VOTING: Will have no voting rights except with respect
to any attempted amendment, repeal or
modification of the Certificate of
Incorporation or Designations by Issuer
changing the rights of the Convertible Common.
CONVERSION: Provided the Group is not in default of its
obligations under the MOU, the Group will
have the option to convert the Convertible
Common to Common stock of the Issuer on a
one share for one share basis thirty days
after demonstration of each of the following
to the satisfaction of the Issuer ("Conversion
Date"):
(i) ISL enters into and receives a fully executed
contract from the U.S. Department of Defense,
Department of the Army, utilizing the
Technology, with contract revenues of no less
than $50,000,000 or ISL enters into and
receives a fully executed major contract
utilizing the Technology, with contract
revenues of $50,000,000 or more on terms and
conditions acceptable to the Board of
Directors; and
(ii) Issuer completes due diligence and
investigation of the Group, Wesco and the
Partnership with respect to ownership of the
Technology and authorization of its transfer.
REDEMPTION: Issuer will have the right to redeem, in whole
or in part, the Convertible Common not
previously converted at any time commencing
six months subsequent to the Conversion Date
by payment of a redemption price equal to
$500,000 ("Conversion Price") plus 15% of the
Conversion Price for each year the Convertible
Common are oustanding prior to conversion.
RESTRICTED SECURITIES: The Shares will be restricted securities
within the meaning of Rule 144 promulgated
under the Securities Act of 1933, as amended.
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SHAREHOLDER
AGREEMENT: The Group and Issuer will enter into a
Shareholder Agreement which will provide that:
(i) The holder of the Convertible Common will not
acquire any additional Common Shares of Issuer
from any party nor grant to or receive from
any other party any voting rights with respect
to the Common Shares for a period of five
years without the approval of two thirds of
the members of the Board of Directors of the
Issuer.
(ii) The holder will not sell, transfer or dispose
any of the Convertible Common and/or the
Common without offering Issuer a right of
first refusal to acquire such Convertible
Common and/or Common on the same terms and
conditions proposed by any third party.
CERTIFICATE OF
INCORPORATION: Issuance of the Convertible Common requires
amendments to the Issuer's Certificate of
Incorporation to be approved at the next
meeting by the stockholders of the Issuer.
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