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EXHIBIT 10.4
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TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is made as of
August 30, 2001, by and between TeraForce Technology Corporation, a Delaware
corporation (the "Seller"), and Intelect Technologies Inc., a Delaware
corporation (the "Buyer").
RECITALS
A. This Agreement is the Transition Services Agreement referred to in that
certain Agreement to Form Joint Venture (the "Joint Venture Agreement"), dated
as of August 17, 2001, by and among Seller and Singapore Technologies
Electronics Limited.
B. Pursuant to the Joint Venture Agreement, Seller's subsidiary has on this date
sold to Buyer certain assets identified in the Joint Venture Agreement, such
sale taking place on the date hereof (the "Effective Date").
C. Seller has requested that for a limited term Buyer provide certain warranty
and support services to Seller upon the terms and subject to the conditions set
forth herein.
D. Buyer has requested that for a limited term Seller provide certain
engineering, financial and support services to Buyer upon the terms and subject
to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein and in the Joint Venture Agreement and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
ARTICLE ONE
DEFINITIONS
All capitalized terms that are used and not specifically defined herein
shall have the meanings assigned to them in the Joint Venture Agreement.
ARTICLE TWO
SERVICES PROVIDED
Section 2.1 Buyer Services Provided. On and subject to the provisions
of this Agreement, during the term of this Agreement, Seller hereby engages
Buyer as an independent contractor, not as an agent, for the purpose of
performing the services described on Exhibit A (the "Buyer Services"), and Buyer
shall perform the Buyer Services for the Seller on the terms and conditions set
forth in this Agreement.
Section 2.2 Seller Services Provided. On and subject to the provisions
of this Agreement, during the term of this Agreement, Buyer hereby engages
Seller as an independent contractor, not as an agent, for the
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purpose of performing the services described on Exhibit B (the "Seller
Services"), and Seller shall perform the Seller Services for the Buyer on the
terms and conditions set forth in this Agreement.
Section 2.3 Standard of Service. In performing the respective services,
each party shall use the same degree of skill, prudence, competence and
diligence as it used in the performance of the same or similar tasks for or on
its own behalf, subject in each case to any provisions set forth on Exhibit A
and on Exhibit B, respectively.
ARTICLE THREE
TERM
Section 3.1 Term. This Agreement shall become effective on the
Effective Date and shall continue in effect until the second anniversary of the
date of this Agreement.
ARTICLE FOUR
CHARGES
Section 4.1 Monthly Fees for Buyer Services. Seller shall pay Buyer for
the services provided hereunder, together with all reasonable out-of-pocket
costs and expenses (but excluding general, administrative and other overhead
costs and expenses) and costs of employees of a party hereto directly allocated
to a particular project equal to that employee's regular compensation plus
benefits allocated and charged on an hourly basis (but excluding bonuses and
similar extraordinary compensation), equipment or automobile rental costs,
copying costs, attorneys' fees, consultant fees or costs or fees associated with
any other service provider (the "Direct Costs") incurred by Buyer in connection
with the performance of the Buyer Services, on a monthly basis on or before the
10th day following the receipt by the Seller of an itemized invoice from the
Buyer outlining the costs for the preceding month. Seller shall not be required
to pay, nor shall Buyer be entitled to reimbursement for, Buyer's office
overhead.
Section 4.2 Monthly Fees for Seller Services. Subject to the offset
described below, Buyer shall pay Seller for the services provided hereunder,
together with all Direct Costs incurred by Seller in connection with the
performance of the Seller Services, on a monthly basis on or before the 10th day
following the receipt by the Buyer of an itemized invoice from the Seller
outlining the costs for the preceding month. Buyer shall not be required to pay,
nor shall Seller be entitled to reimbursement for, Seller's office overhead.
Seller consents to the offset of amounts owed by Buyer to Seller under this
Agreement against amounts owed by Buyer to Intelect Network Technologies, Inc.
("INT") under the Sharing Agreement between Buyer and INT dated the date hereof.
ARTICLE FIVE
RELEASE AND INDEMNIFICATION
Section 5.1 Release.
(a) BUYER SHALL NOT BE LIABLE TO SELLER FOR: (1) DELAYS, ERRORS,
MALFUNCTIONS OR BREAKDOWNS RELATING TO THE BUYER SERVICES,
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UNLESS SUCH DELAYS, ERRORS, MALFUNCTIONS OR BREAKDOWNS ARE
ATTRIBUTABLE TO OR ARE THE RESULT OF BUYER'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT; OR (2) ANY ACTION OR OMISSION TAKEN OR
NOT TAKEN IN ACCORDANCE WITH THIS AGREEMENT OR PURSUANT TO
INSTRUCTIONS PROPERLY RECEIVED FROM SELLER, UNLESS SUCH ACTION
OR OMISSION, AS THE CASE MAY BE, IS ATTRIBUTABLE TO OR IS THE
RESULT OF BUYER'S BREACH OF ITS OBLIGATIONS HEREUNDER, OR ITS
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(b) SELLER SHALL NOT BE LIABLE TO BUYER FOR: (1) DELAYS, ERRORS,
MALFUNCTIONS OR BREAKDOWNS RELATING TO THE SELLER SERVICES,
UNLESS SUCH DELAYS, ERRORS, MALFUNCTIONS OR BREAKDOWNS ARE
ATTRIBUTABLE TO OR ARE THE RESULT OF SELLER'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT; OR (2) ANY ACTION OR OMISSION TAKEN OR
NOT TAKEN IN ACCORDANCE WITH THIS AGREEMENT OR PURSUANT TO
INSTRUCTIONS PROPERLY RECEIVED FROM BUYER, UNLESS SUCH ACTION
OR OMISSION, AS THE CASE MAY BE, IS ATTRIBUTABLE TO OR IS THE
RESULT OF SELLER'S BREACH OF ITS OBLIGATIONS HEREUNDER, OR ITS
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Section 5.2 Indemnification.
(a) BUYER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER,
SELLER'S AFFILIATES AND SELLER'S DELEGATES AND THEIR
RESPECTIVE PAST, PRESENT AND FUTURE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND REPRESENTATIVES (EACH INDIVIDUALLY
REFERRED TO HEREIN AS A "SELLER INDEMNIFIED PARTY"), WITHOUT
LIMITATION, FROM AND AGAINST ANY AND ALL LOSSES, RESULTING
FROM ANY CLAIM ARISING IN CONNECTION WITH, OR RELATED TO, THIS
AGREEMENT AND THE SELLER SERVICES PROVIDED HEREUNDER; THE
FOREGOING INDEMNIFICATION SPECIFICALLY INCLUDING THOSE CLAIMS
WHICH ARISE OUT OF THE SELLER INDEMNIFIED PARTY'S SOLE, JOINT
OR CONTRIBUTORY NEGLIGENCE, BUT SPECIFICALLY EXCLUDING THOSE
CLAIMS WHICH ARISE OUT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE SELLER INDEMNIFIED PARTY.
(b) SELLER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS BUYER,
BUYER'S AFFILIATES AND BUYER'S DELEGATES AND THEIR RESPECTIVE
PAST, PRESENT AND FUTURE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND REPRESENTATIVES (EACH INDIVIDUALLY REFERRED TO
HEREIN AS A "BUYER INDEMNIFIED PARTY"), WITHOUT LIMITATION,
FROM AND AGAINST ANY AND ALL LOSSES, RESULTING FROM ANY CLAIM
ARISING IN CONNECTION WITH, OR RELATED TO, THIS AGREEMENT AND
THE BUYER SERVICES PROVIDED HEREUNDER; PROVIDED, HOWEVER, THAT
AS TO WARRANTY SERVICES PROVIDED BY BUYER FOR PRODUCTS
PREVIOUSLY SOLD BY SELLER, SUCH INDEMNITY ONY EXTENDS TO THE
WARRANTY SERVICE ITSELF AD NOT TO (AND BUYER SHALL BE HELD
HARMLESS FROM CLAIMS ARISING OUT OF) CLAIMS IN RESPECT OF THE
PRODUCT BEING SERVICED; THE FOREGOING INDEMNIFICATION
SPECIFICALLY INCLUDING THOSE CLAIMS WHICH ARISE OUT OF THE
BUYER INDEMNIFIED PARTY'S SOLE, JOINT OR CONTRIBUTORY
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NEGLIGENCE, BUT SPECIFICALLY EXCLUDING THOSE CLAIMS WHICH
ARISE OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
BUYER INDEMNIFIED PARTY.
Section 5.3 Intent of the Parties.
(a) IT IS THE EXPRESS INTENT OF BUYER AND SELLER THAT BUYER DEFEND
AND INDEMNIFY THE SELLER INDEMNIFIED PARTY AGAINST THOSE
CLAIMS IDENTIFIED IN SECTION 5.2 WHICH ARISE FROM THE
NEGLIGENCE (ACTIVE OR PASSIVE) OF THE SELLER INDEMNIFIED
PARTY, OTHER THAN THROUGH GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. SELLER'S DECISION TO ENTER INTO THIS AGREEMENT AND
TO PROVIDE THE SELLER SERVICES IDENTIFIED HEREIN ARE IN
EXCHANGE FOR THE LIMITED LIABILITY REFERRED TO IN SECTION 5.2
AND THIS SECTION 5.4. SELLER WOULD NOT HAVE ENTERED INTO THIS
AGREEMENT FOR THE CONSIDERATION PROVIDED HEREIN BUT FOR
BUYER'S AGREEMENT TO INDEMNIFY THE SELLER INDEMNIFIED PARTIES
AS PROVIDED ABOVE.
(b) IT IS THE EXPRESS INTENT OF BUYER AND SELLER THAT SELLER
DEFEND AND INDEMNIFY THE BUYER INDEMNIFIED PARTY AGAINST THOSE
CLAIMS IDENTIFIED IN SECTION 5.3 WHICH ARISE FROM THE
NEGLIGENCE (ACTIVE OR PASSIVE) OF THE BUYER INDEMNIFIED PARTY,
OTHER THAN THROUGH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
BUYER'S DECISION TO ENTER INTO THIS AGREEMENT AND TO PROVIDE
THE BUYER SERVICES IDENTIFIED HEREIN ARE IN EXCHANGE FOR THE
LIMITED LIABILITY REFERRED TO IN SECTION 5.3 AND THIS SECTION
5.4. BUYER WOULD NOT HAVE ENTERED INTO THIS AGREEMENT FOR THE
CONSIDERATION PROVIDED HEREIN BUT FOR SELLER'S AGREEMENT TO
INDEMNIFY THE BUYER INDEMNIFIED PARTIES AS PROVIDED ABOVE.
Section 5.4 Survival of Indemnification Obligations.
(a) Buyer's obligations under Article Five hereof shall continue
for a period of two (2) years following the expiration or
termination of this Agreement.
(b) Seller's obligations under Article Five hereof shall continue
for a period of two (2) years following the expiration or
termination of this Agreement.
Section 5.5 Notification of Claim.
(a) The Seller Indemnified Party shall give prompt written notice
to the Buyer of the receipt of any claim or the commencement
of any action which is or may be covered by the applicable
indemnity, but the failure to so notify the Buyer shall not
relieve the Buyer of any liability that it may have under this
Article Five except to the extent that the defense of such
action is prejudiced thereby. Upon receipt of such notice, the
Buyer shall immediately assume the defense thereof with
counsel satisfactory to the Seller Indemnified Party. No
compromise or settlement thereof may be effected by the Buyer
without the Seller Indemnified Party's consent.
(b) The Buyer Indemnified Party shall give prompt written notice
to the Seller of the receipt of any claim or the commencement
of any action which is or may be covered by the applicable
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indemnity, but the failure to so notify the Seller shall not
relieve the Seller of any liability that it may have under
this Article Five except to the extent that the defense of
such action is prejudiced thereby. Upon receipt of such
notice, the Seller shall immediately assume the defense
thereof with counsel satisfactory to the Buyer Indemnified
Party. No compromise or settlement thereof may be effected by
the Seller without the Buyer Indemnified Party's consent.
Section 5.6 No Warranties.
(a) Buyer makes no representation or warranty, express or implied,
regarding the Buyer Services, their implementation, related
training, or database support beyond the express terms of this
Agreement. BUYER DISCLAIMS AND SELLER HEREBY WAIVES, ANY AND
ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR INTENDED USE, OR, EXCEPT AS OTHERWISE STATED HEREIN, ANY
LIABILITY IN CONTRACT, NEGLIGENCE, OR TORT WITH RESPECT TO THE
DATA, PRODUCTS AND/OR THE BUYER SERVICES FURNISHED HEREUNDER.
(b) Seller makes no representation or warranty, express or
implied, regarding the Seller Services, their implementation,
related training, or database support beyond the express terms
of this Agreement. SELLER DISCLAIMS AND BUYER HEREBY WAIVES,
ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY
OR FITNESS FOR INTENDED USE, OR, EXCEPT AS OTHERWISE STATED
HEREIN, ANY LIABILITY IN CONTRACT, NEGLIGENCE, OR TORT WITH
RESPECT TO THE DATA, PRODUCTS AND/OR THE SELLER SERVICES
FURNISHED HEREUNDER.
Section 5.7 Limitation of Damages.
(a) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
LIABILITY OF THE BUYER UNDER THIS AGREEMENT FOR ANY BREACH,
DEFAULT, OR EVENT OF DEFAULT UNDER THIS AGREEMENT SHALL BE
STRICTLY LIMITED TO SUCH ACTUAL AND INCIDENTAL DAMAGES AS WERE
DIRECTLY INCURRED BY THE SELLER BY REASON OF SUCH BREACH,
DEFAULT OR EVENT OF DEFAULT. IN NO EVENT SHALL THE BUYER EVER
BE LIABLE, NOR SHALL THE SELLER EVER RECOVER, AND HEREBY
WAIVES, ANY CONSEQUENTIAL OR SPECIAL DAMAGES (INCLUDING BUT
NOT LIMITED TO LOST PROFITS OR DAMAGES FOR LOST BUSINESS
OPPORTUNITY).
(b) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
LIABILITY OF THE SELLER UNDER THIS AGREEMENT FOR ANY BREACH,
DEFAULT, OR EVENT OF DEFAULT UNDER THIS AGREEMENT SHALL BE
STRICTLY LIMITED TO SUCH ACTUAL AND INCIDENTAL DAMAGES AS WERE
DIRECTLY INCURRED BY THE BUYER BY REASON OF SUCH BREACH,
DEFAULT OR EVENT OF DEFAULT. IN NO EVENT SHALL THE SELLER EVER
BE LIABLE, NOR SHALL THE SELLER EVER RECOVER, AND HEREBY
WAIVES, ANY CONSEQUENTIAL OR SPECIAL DAMAGES (INCLUDING BUT
NOT LIMITED TO LOST PROFITS OR DAMAGES FOR LOST BUSINESS
OPPORTUNITY).
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ARTICLE SIX
FORCE MAJEURE
Section 6.1 Force Majeure.
(a) Buyer shall not be liable for delays or failure in its
performance hereunder to the extent that such delay or failure
of performance is not the result of Buyer's lack of reasonable
diligence, if caused by any act of God, war, strike, lockout,
labor dispute, work stoppage, fire, act of government, or any
other cause, whether similar or dissimilar, beyond the control
of the Buyer (any such act or cause being herein called a
"Force Majeure Cause").
(b) Seller shall not be liable for delays or failure in its
performance hereunder to the extent that such delay or failure
of performance is not the result of Seller's lack of
reasonable diligence, if caused by any Force Majeure Cause.
ARTICLE SEVEN
TITLE
Section 7.1 Title to Buyer Intellectual Property. Title and full and
complete ownership rights to all software, technology, know-how or proprietary
information (including any copyright or patent rights relating thereto), owned
or developed by Buyer, relating to the Buyer Services and used in the
performance of this Agreement shall remain with Buyer. Seller acknowledges that
such software, technology or proprietary information is Confidential Information
(as defined in Article Eight), whether or not such information or any portion
thereof is or may be protectable under the copyright, patent or trade secret
laws.
Section 7.2 Title to Seller Intellectual Property. Title and full and
complete ownership rights to all software, technology, know-how or proprietary
information (including any copyright or patent rights relating thereto), owned
or developed by Seller, relating to the Seller Services and used in the
performance of this Agreement shall remain with Seller other than such
intellectual property developed by Seller as part of any engineering design
services performed for Buyer pursuant to Section 2.1 of this Agreement, in which
case such intellectual property shall be transferred to Buyer. Buyer
acknowledges that such software, technology or proprietary information is
Confidential Information (as defined in Article Eight), whether or not such
information or any portion thereof is or may be protectable under the copyright,
patent or trade secret laws.
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ARTICLE EIGHT
CONFIDENTIALITY
Section 8.1 Confidential Information. For purposes of this Agreement,
"Confidential Information" shall mean any and all or (i) trade secrets, (ii)
confidential or other proprietary information of a party or its Affiliates
concerning past, present or future research, development, business activities or
affairs, finances, properties, methods of operation, processes and systems. The
parties expressly acknowledge and agree that the term "Confidential Information"
shall include, but is not limited to all documentation, software programs,
procedures, and services supplied in connection with the services hereunder. The
party which receives Confidential Information from the other party agrees to
maintain such information in secrecy at all times, using the same degree of care
with respect to such Confidential Information as it uses in protecting its own
proprietary information, trade secrets and similar items; provided, however,
that Confidential Information may be used in an action by one party to this
Agreement against the other, subject to the conditions set forth in Section 8.2.
Information of either party which would otherwise be considered Confidential
Information shall not be considered Confidential Information if such information
is in the public domain, or is placed in the public domain through no violation
of this Agreement, or is lawfully obtained from another source free of
restriction.
Section 8.2 Nondisclosure. Neither party shall sell, transfer, publish,
disclose, display or otherwise make available the Confidential Information of
the other party to any third party, except (i) as necessary in furtherance of
the purposes of this Agreement, or (ii) as may be required by applicable law, in
which case the party from whom disclosure is sought shall promptly notify the
other party. To the extent that the other party objects to disclosure of such
Confidential Information, the party from which disclosure is sought shall (i)
use reasonable and lawful efforts to resist making any disclosure of such
Confidential Information, (ii) use reasonable and lawful efforts to limit the
amount of such Confidential Information to be disclosed, and (iii) use all
reasonable best efforts to obtain a protective order or other appropriate relief
to minimize the further dissemination of any Confidential Information to be
disclosed. In addition, neither party shall disclose the Confidential
Information of the other party to any employee or agent except on a need-to-know
basis. Each party shall use reasonable efforts to inform all such employees and
agents that the Confidential Information of the other party is subject to this
non-disclosure obligation. Furthermore, neither party shall use the Confidential
Information of the other party for any purpose other than as expressly provided
in this Agreement.
Section 8.3 Return of Confidential Information. Upon termination of
this Agreement for any cause or reason, each party shall deliver to the other
party all of such other party's Confidential Information then in its possession,
including all copies thereof.
Section 8.4 Survival. The restrictions of this Article Eight shall
survive for a period of two (2) years after the termination or expiration of
this Agreement.
Section 8.5 Affiliates. Seller and Buyer each agree to cause their
respective Affiliates to comply in all respects with the restrictions of this
Article Eight.
Section 8.6 Confidentiality Agreement. The provisions of this Article
Eight are in addition to, and shall not be deemed to affect the terms and
provisions of, any existing confidentiality agreement between the parties. To
the extent the provisions hereof may be deemed to be inconsistent with the terms
of any such other confidentiality agreement, or such other confidentiality
agreement shall be silent as to such items, this Agreement shall control with
respect to any Confidential Information relating to this Agreement. Upon the
written consent of the other party, which consent shall not be unreasonably
withheld, Buyer or Seller may
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provide this Agreement to third party lenders or investors; provided, however,
that the party receiving this Agreement shall, prior to obtaining it, enter into
a confidentiality agreement with the disclosing Buyer or Seller, as the case may
be, for the benefit of the other party.
ARTICLE NINE
TERMINATION AND DEFAULT
Section 9.1 Default. The following events shall constitute "Events of
Default" (whether any such event shall be voluntary or involuntary or come about
or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and each such Event of Default shall be
deemed to exist and continue so long as, but only as long as, it shall not have
been remedied or waived by the nondefaulting party in writing:
Section 9.1.1 Buyer Defaults.
(a) Buyer fails to pay, or cause to be paid, any amount due
hereunder as it becomes due in accordance with the terms of
this Agreement and such payment is not made within five (5)
Business Days after written notice thereof to Buyer by Seller;
(b) Buyer fails to punctually and properly perform any other
covenant, agreement, representation, obligation, term or
condition contained herein and such failure continues for a
period of fifteen (15) days after receipt by Buyer of written
notice thereof from Seller;
(c) Buyer terminates or cancels this Agreement or any portion
thereof, except as expressly permitted hereunder;
(d) Buyer shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervener or liquidator for
itself or for all or a substantial part of Buyer's assets,
(ii) file a voluntary petition in bankruptcy, admit in writing
that Buyer is unable to pay Buyer's debts as they become due
or generally not pay its debts as they become due, (iii) make
a general assignment for the benefit of creditors, (iv) file a
petition or answer seeking reorganization or an arrangement
with creditors or seeking to take advantage of any bankruptcy
or insolvency laws, (v) file an answer admitting the material
allegations of, or consent to, or default in answering, a
petition filed against Buyer in any bankruptcy, reorganization
or insolvency proceeding or (vi) take corporate action for the
purpose of effecting any of the foregoing;
(e) An involuntary proceeding shall be commenced against Buyer
seeking bankruptcy or reorganization of Buyer or the
appointment of a receiver, custodian, trustee, liquidator or
other similar official of Buyer, or all or substantially all
of its assets, and such proceeding shall not have been
dismissed within thirty (30) days of the filing thereof; or an
order, order for relief, judgment or decree shall be entered
by any court of competent jurisdiction or other competent
authority approving a petition or complaint seeking
reorganization of Buyer or appointing a receiver, custodian,
trustee, liquidator or other similar official of Buyer or of
all or substantially all of its assets; or
(f) This Agreement shall, subsequent to the effectiveness hereof,
cease to be a legal, valid, binding agreement enforceable
against Buyer in accordance with its terms, or shall in any
way be terminated (prior to a scheduled expiration) or become
or be declared ineffective or inoperative, or shall in any way
whatsoever cease to give or provide to Seller the respective
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rights, titles, interests, remedies, powers or privileges
intended to be created hereby for any reason whatsoever,
excluding any of the foregoing arising from a breach by Seller
of any of its obligations hereunder.
Section 9.1.2 Seller Defaults.
(a) Seller fails to pay, or cause to be paid, any amount due
hereunder as it becomes due in accordance with the terms of
this Agreement and such payment is not made within five (5)
Business Days after written notice thereof to Seller by Buyer;
(b) Seller fails to punctually and properly perform any covenant,
agreement, representation, obligation, term or condition
contained herein and such failure continues for a period of
fifteen (15) days after receipt by Seller of written notice
thereof from Buyer;
(c) Seller terminates or cancels this Agreement or any portion
thereof, except as expressly permitted hereunder;
(d) Seller shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervener or liquidator for
itself or for all or a substantial part of Seller's assets,
(ii) file a voluntary petition in bankruptcy, admit in writing
that Seller is unable to pay Seller's debts as they become due
or generally not pay its debts as they become due, (iii) make
a general assignment for the benefit of creditors, (iv) file a
petition or answer seeking reorganization or an arrangement
with creditors or seeking to take advantage of any bankruptcy
or insolvency laws, (v) file an answer admitting the material
allegations of, or consent to, or default in answering, a
petition filed against Seller in any bankruptcy,
reorganization or insolvency proceeding or (vi) take corporate
action for the purpose of effecting any of the foregoing;
(e) An involuntary proceeding shall be commenced against Seller
seeking bankruptcy or reorganization of Seller or the
appointment of a receiver, custodian, trustee, liquidator or
other similar official of Seller, or all or substantially all
of its assets, and such proceeding shall not have been
dismissed within thirty (30) days of the filing thereof; or an
order, order for relief, judgment or decree shall be entered
by any court of competent jurisdiction or other competent
authority approving a petition or complaint seeking
reorganization of Seller or appointing a receiver, custodian,
trustee, liquidator or other similar official of Seller or of
all or substantially all of its assets; or
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(f) This Agreement shall, subsequent to the effectiveness hereof,
cease to be a legal, valid, binding agreement enforceable
against Seller in accordance with its terms, or shall in any
way be terminated (prior to a scheduled expiration) or become
or be declared ineffective or inoperative, or shall in any way
whatsoever cease to give or provide to Buyer the respective
rights, titles, interests, remedies, powers or privileges
intended to be created hereby for any reason whatsoever,
excluding any of the foregoing arising from a breach by Buyer
of any of its obligations hereunder.
Section 9.2 Remedies upon the Occurrence of an Event of Default.
Section 9.2.1 Seller's Remedies. Upon the occurrence of an
Event of Default under Section 9.1.1, and at any time thereafter so
long as such Event of Default shall be continuing, Seller may, at its
option declare this Agreement to be in default by a written notice to
Buyer; and at any time thereafter, so long as Buyer shall not have
remedied all outstanding Events of Default, Seller may do one or more
of the following as Seller in its sole discretion shall elect: (i)
terminate this Agreement and terminate Buyer's access to the Seller
Services provided hereunder; and (ii) recover all legal and equitable
remedies to which it is entitled, by virtue of the occurrence of any
Event of Default in accordance with Section 9.3.
Section 9.2.2 Buyer's Remedies. Upon the occurrence of an
Event of Default under Section 9.1.2, and at any time thereafter so
long as such Event of Default shall be continuing, Buyer may, at its
option declare this Agreement to be in default by written notice to
Seller; and at any time thereafter, so long as Seller shall not have
remedied all outstanding Events of Default, Buyer may do any one or
more of the following as Buyer in its sole discretion shall elect: (i)
terminate this Agreement and terminate Seller's access to the Buyer
Services provided hereunder; and (ii) recover all legal and equitable
remedies to which it is entitled by virtue of the occurrence of any
Event of Default in accordance with Section 9.3.
Section 9.3 Remedies Cumulative. Subject to the limitations contained
in Section 5.7, no remedy referred to in this Article Nine is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available at law or in equity, and the exercise
by any party hereto of any one or more of such remedies shall not preclude the
simultaneous or later exercise by such party of any or all of such other
remedies. No express or implied waiver by any party hereto of any Event of
Default shall in any way be, or be construed as a waiver of, any future or
further Event of Default.
ARTICLE TEN
ASSIGNMENT AND DELEGATION
Section 10.1 Survival. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that except as provided in Sections 10.2, 10.3, 10.4
and 10.5, no party hereto may assign its rights or delegate its obligations
without the express written consent of the other party hereto, which shall not
be unreasonably withheld
Section 10.2 Assignment by Seller. After the Closing Date, Seller shall
be entitled to assign all of its rights and obligations to any successor entity
that may acquire all or substantially all its assets or business, by merger or
otherwise.
Section 10.3 Assignment by Buyer. After the Closing Date, Buyer shall
be entitled to assign all of its rights and obligations to any successor entity
that may acquire all or substantially all its assets or business, by merger or
otherwise.
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Section 10.4 Delegation of Duties of Seller for Buyer. Seller may
delegate all its obligations pursuant to this Agreement to any Affiliate of
Seller. In performance of their respective obligations under this Agreement,
Seller and its Affiliates may (i) act directly or through agents, counsel
(in-house or outside) or other persons; (ii) delegate the performance of its
obligations and functions; and (iii) consult with agents, counsel (in-house or
outside) and other persons. Neither Seller nor its Affiliates will be liable for
the default or misconduct of any persons employed, consulted, or engaged
thereby.
Section 10.5 Delegation of Duties of Buyer for Seller. Buyer may
delegate all its obligations pursuant to this Agreement to any Affiliate of
Buyer. In performance of their respective obligations under this Agreement,
Buyer and its Affiliates may (i) act directly or through agents, counsel
(in-house or outside) or other persons; (ii) delegate the performance of its
obligations and functions; and (iii) consult with agents, counsel (in-house or
outside) and other persons. Neither Buyer nor its Affiliates will be liable for
the default or misconduct of any persons employed, consulted, or engaged
thereby.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.1 No Agency.
(a) This agreement to provide the Buyer Services shall not be
construed as one of agency by Buyer for the Seller, but as one
in which Buyer is engaged independently in the business of
performing services for Seller as an independent contractor.
At no time shall any employee of Buyer or any independent
contractors hired by Buyer and/or their employees be
considered employees of the Seller, and Buyer shall be solely
responsible for all matters pertaining to such employees and
independent contractors.
(b) This agreement to provide the Seller Services shall not be
construed as one of agency by Seller for the Buyer, but as one
in which Seller is engaged independently in the business of
performing services for Buyer as an independent contractor. At
no time shall any employee of Seller or any independent
contractors hired by Seller and/or their employees be
considered employees of the Buyer, and Seller shall be solely
responsible for all matters pertaining to such employees and
independent contractors.
Section 11.2 No Third Party Beneficiaries. Except for rights and
benefits conferred on certain of Seller's Affiliates and Buyer's Affiliates as
set forth in this Agreement, all rights, remedies and obligations of the parties
hereunder shall accrue or apply solely to the parties hereto or their permitted
successors or assigns and there is no intent to benefit any third parties.
Section 11.3 Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if given in accordance
with the provisions of Section 8.7 of the Joint Venture Agreement.
Section 11.4 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
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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 11.5 Amendment; Waiver . No term or provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by written
instrument signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. Any consent or approval specified herein of
a party hereto may be withheld entirely in such party's discretion unless it is
herein expressly provided that such consent may not be unreasonably withheld. No
waiver of a breach of any provision of this Agreement by either party shall
constitute a waiver of any subsequent breach of the same or any other provision
hereof, and no waiver shall be effective unless made in writing.
Section 11.6 Captions. The captions appearing in this Agreement have
been inserted as a matter of convenience and in no way define, limit or enlarge
the scope of this Agreement or any of the provisions hereto.
Section 11.7 Partial Invalidity. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable; provided, however, that if, in the
reasonable opinion of any party to this Agreement, any such partial invalidity,
illegality or unenforceability affects the commercial basis of this Agreement,
such party shall so inform the other party, whereupon the parties shall
negotiate to agree upon an amendment to the Agreement that will maintain the
balance of the commercial interests of the parties under this Agreement. If,
however, such negotiations shall not be successfully concluded within thirty
(30) days, either party shall have the right to terminate this Agreement upon
giving at least thirty (30) days written notice to the other party.
Section 11.8 Entirety. This Agreement is executed pursuant to and
subject to the terms of the Joint Venture Agreement and, when taken together
with the Joint Venture Agreement and any other agreements ancillary thereto,
embodies the entire agreement between the parties hereto concerning the subject
matter hereof and terminates and supersedes all prior or contemporaneous
agreements, discussions, undertakings and understandings, whether written or
oral, express or implied, concerning the subject matter hereof. Additional
rights and obligations of the parties set forth in the Joint Venture Agreement
shall be unimpaired and undiminished hereby.
Section 11.9 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute one and the same instrument.
Section 11.10 Survival. Except as otherwise expressly limited herein,
the representations, warranties, covenants, agreements and indemnities set forth
in this Agreement, and the obligations hereunder, shall survive the expiration
or other termination of this Agreement.
Section 11.11 Successors and Assigns. Subject to the terms hereof, this
Agreement shall bind and benefit Seller, Buyer and their respective successors
and permitted assigns.
Section 11.12 Transaction Expenses. Except as specifically set forth
herein each of Seller and
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Buyer shall be responsible for their own legal and out-of-pocket expenses
arising from the transactions contemplated herein.
Section 11.13 Effectiveness. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement will not be binding upon any party
hereto until the Effective Date.
Section 11.14 Time of Essence. With respect to all time periods
referred to herein, time is of the essence.
*****
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IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of
the day and year first above written.
TERAFORCE TECHNOLOGY CORPORATION,
a Delaware corporation
By: /s/ Robert P. Capps
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Name: Robert P. Capps
Title: Executive Vice President
INTELECT TECHNOLOGIES INC.,
a Delaware corporation
By: /s/ Darly G. Lewellyn
----------------------------------
Name: Daryl G. Lewellyn
Title: President and Secretary