EXHIBIT 2.1
ASSET TRANSFER AGREEMENT
THIS ASSET TRANSFER AGREEMENT (the "Agreement") is entered into as of this
13th day of November 1998 (the "Effective Date"), by and between TSI
International Software Ltd., a Delaware corporation ("TSI"), Software Consulting
Partners, Inc., a Delaware corporation ("SCP") and, only with respect to the
provisions of Sections 4, 12 and 13, the stockholder of SCP listed on Exhibit A
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hereto (the "SCP STOCKHOLDER").
RECITALS
A. SCP is a consulting group which is in the business of providing
installation, maintenance and user support consulting services to enterprises
which use SAP software (the "Business").
B. TSI desires to acquire the Acquired Assets (as defined in Section 1.2)
and assume the Assumed Liabilities (as defined in Section 3.1) but no other
liabilities of SCP and SCP desires to transfer the Acquired Assets and permit
TSI to assume the Assumed Liabilities, all upon the terms and subject to the
conditions set forth in this Agreement (the transactions contemplated hereby and
by the SCP Ancillary Agreements, the TSI Ancillary Agreements and the Escrow
Agreement shall be called, collectively, the "Transfer");
C. At the Closing (as defined in Section 2.1) of this Agreement, in
addition to the Transfer:
1. Messrs. Xxxxxx Xxxxxxx and Xxxxx Xxxxxxx are entering into with
TSI Employment Agreements in the form of Exhibits C-1 and C-2, respectively, and
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Xxxxxx Xxxxxxx is entering into a Noncompetition Agreement substantially in the
form of Exhibit C-3;
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2. SCP and the SCP Stockholder are entering into an Escrow Agreement
in substantially the form of Exhibit D hereto (the "Escrow Agreement").
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D. The parties intend the transactions contemplated by this Agreement to
be treated as a tax-free reorganization pursuant to the provisions of Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the facts stated in the above recitals
and of mutual agreements and covenants hereinafter set forth, and for good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:
1. TRANSFER OF ASSETS
1.1 Agreement to Transfer Assets. Subject to the terms and
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conditions of this Agreement, and in reliance on the representations, warranties
and covenants set forth in this Agreement, SCP agrees to transfer to TSI at the
Closing, and TSI agrees to acquire from SCP at the Closing, all of SCP's right,
title and interest in and to all of the Acquired Assets (as defined below). The
Acquired Assets will be assigned, transferred and conveyed to TSI on the Closing
Date (as defined below), free and clear of all mortgages, pledges, liens, deeds
of trust, licenses, rights of possession, security interests, restrictions,
encumbrances, charges, title retentions, conditional sales or other security
arrangements, defects in title, prior assignments or claims of any nature
whatsoever ("Encumbrances"), except as otherwise expressly set forth in the SCP
Disclosure Schedule (as defined below).
1.2 Acquired Assets Defined. As used in this Agreement, the term
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"ACQUIRED ASSETS" means, collectively, the following assets of Seller:
(a) Balance Sheet Assets. Without limiting the other provisions of
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this Section 1.2, all of the assets of SCP described in the balance sheet dated
as of September 30, 1998 and any additional assets of SCP acquired by SCP from
the date of such balance sheet to the Closing other than Excluded Assets.
(b) Technology, Products and Intellectual Property. All of the
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following which are or have been used, developed, sold, marketed or purchased by
Seller:
(i) all software related to the Business (in both source
code and object code form, in any media or format and for all hardware
platforms, software platforms and operating environments, including
graphical user interfaces) (whether owned by Seller or authored or
developed for Seller by any of its employees, contractors or agents),
(ii) all copies of documentation, drafts, papers, designs,
drawings, schematics, diagrams, models and prototypes related to the
software described in Section 1.2(b)(i);
(iii) all SCP's licenses, sublicenses or other rights of SCP
to use source, object or other executable code copies of third-party
computer software;
(iv) any product, development tool, testing tool or suite,
application, operating system, routine, subroutine, module or other
proprietary technology relating to the Business or the products described
above, and all computer stored data, diskettes, manuscripts and other items
describing any of the foregoing;
(v) all SCP's worldwide rights to all of the following
(collectively, the "SCP IP Rights"): (A) all patents, patent applications
and inventions ("Patents"), (B) trademarks (whether or not registered),
trade names, logos, service marks (whether or not registered)
("Trademarks"), (C) copyrights (whether or not registered), copyright
registrations, moral rights and works of authorship ("Copyrights"), (D) all
know-how, formulae, processes, techniques, confidential business
information, inventions (whether or not patented or patentable), trade
secrets, and other proprietary information, technology and intellectual
property rights, owned by or licensed to SCP , and (E) the exclusive right
for TSI to hold itself out, in its discretion, as the successor to the
Business of SCP ; and
(vi) all derivative works made or developed from any asset
described above.
(c) Customer Lists, Marketing Information. All of SCP's customer
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lists and customer account histories for customers or prospective customers of
the Business (collectively, "Customer Lists"), all data regarding such
customers, whether stored in written form, magnetic or electronic media or in
any other form, that have been or now are related to the Business or that have
been or now are used, developed or purchased in connection with the Business
(collectively, "Marketing Materials").
(d) Inventory. All inventories of finished products and, work in
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process and raw materials that are related to the Business (collectively, the
"Inventory").
(e) Contracts. All contracts, agreements, engagements, leases and
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licenses relating to the Business (collectively, the "Contracts"), together with
(i) all claims, causes of action and rights in favor of SCP now existing or
hereafter arising out of the Contracts or the performance thereof, (ii) all
warranties and representations made to SCP by third parties under such
Contracts, (iii) all rights, remedies, setoffs, allowances, rebates, discounts
and credits granted to SCP by third parties in relation to such Contracts, and
(iv) all SCP's rights to payment under the Contracts, whenever earned, for
which SCP has not sent an invoice to its customer as of the Closing (each such
right to payment under this clause (iv), a "Customer Payment Obligations").
(f) Business Records. All (i) logs, books, business records,
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files, supplier lists and files, product component lists, sales literature and
sales aids, pictures, negatives, camera ready proofs, product catalogs, product
sheets and documentation, product displays, advertising materials, manuals,
computer and electronic data processing materials and correspondence relating to
SCP's Business, (ii) copies of all sales and customer records relating to the
Business, and (iii) copies of all the Financial Records; provided, that SCP
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shall retain title to and ownership of the Financial Records and may retain
copies of the Financial Records for SCP's internal use. The term
"Financial Records" means all SCP's business, accounting and financial records
and analyses pertaining to the operation of the Business.
(g) Other Tangible Assets. All of the tangible assets and tangible
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embodiments of intangible assets (including but not limited to personal
computers, furniture and equipment) not described in the preceding subparagraphs
of this Paragraph 1.2 that, on the Effective Date, relate to the Business (the
"Other Tangible Assets").
(h) Licenses and Permits. All governmental licenses, permits,
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filings, authorizations, approvals or indicia of authority related to the
Business or necessary for the conduct of the Business ("Licenses and Permits").
(i) Other Assets. Any other assets which TSI and SCP mutually
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agree in writing shall be sold to TSI.
(j) Interest in Subsidiary. All of SCP's ownership interest in SCP
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Solutions Europe, B.V., a Netherlands corporation ("SCP-BV").
SCP represents and warrants to TSI that Schedule 1.2 sets forth a description of
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each item included in the Acquired Assets.
1.3 Excluded Assets. There shall be excluded from the Acquired
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Assets and retained by SCP the assets specifically listed in Schedule 1.3 (the
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"Excluded Assets").
1.4 Asset Transfer; Passage of Title; Delivery. At the Closing, all
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of SCP's right, title to, and interest in all of the Acquired Assets shall pass
to TSI, and SCP shall deliver to TSI possession of all of the Acquired Assets.
SCP shall further deliver to TSI proper assignments, conveyances and bills of
sale, in form reasonably satisfactory to TSI, sufficient to convey to TSI good
and marketable title to all the Acquired Assets, free and clear of all
Encumbrances, as well as such other instruments of conveyance as TSI may
reasonably deem necessary, at or after the Closing, to effect or evidence the
transfers provided in this Agreement.
1.5 Assignment of Contracts. To the extent that any of the Contracts
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may not, by their terms, be transferred to TSI in accordance with Sections 1.1
and 1.4, which Contracts are listed and so identified on Schedule 4.9, SCP
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shall, as soon as practicable following the Closing, use its commercially
reasonable, diligent efforts to obtain from the relevant third parties the
consents, approvals and authorizations necessary to effect the transfer of such
Contracts in accordance with this Agreement. Until such Contracts are so
transferred, SCP shall perform all of its obligations under such Contracts and
use its commercially reasonable, diligent efforts to obtain for TSI the benefits
of such Contracts.
1.6 It is the intention of the parties hereto that the transactions
contemplated in this Agreement constitute a tax-free reorganization for federal
income tax purposes within the meaning of Section 368(a)(1)(C) of the Code, and
each of the parties hereto: (i) shall report the transactions on all tax
returns on a basis which is consistent with such characterization and (ii) shall
not take any actions inconsistent therewith.
2. REORGANIZATION PRICE; PAYMENTS; CLOSING.
2.1 The Closing. Subject to termination of this Agreement as provided
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in Section 11 below, the closing of the Transfer (the "Closing") will take place
at the offices of Fenwick & West LLP, 000 Xxx Xxxxxxxxxxx, Xxxxx 000, Xxx
Xxxxxxxxx, XX 00000 at 5:00 p.m., Pacific Time on November 16, 1998, or, if all
conditions to closing have not been satisfied or waived by such date, such other
place, time and date as SCP and TSI may mutually select (the "Closing Date").
2.2 Purchase Price.
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(a) The purchase price for the Acquired Assets (the "Purchase
Price") shall be (i) the Applicable Number (as defined below) of shares of TSI
Common Stock, par value $0.01 per share ("TSI Common Stock"), payable on the
Closing; and (ii) the Earnout Shares (as defined below), payable ten days
following the date on which TSI publicly announces its balance sheet and results
of operations for fiscal 1999 (the "Earnout Closing Date").
(b) The "Applicable Number" will be determined by dividing (i) the
amount equal to $1,200,000 ("Base Amount") by (ii) the Closing price of TSI
Common Stock as traded on Nasdaq on the last trading day prior to the Effective
Date as reported in The Wall Street Journal on the Effective Date.
(c) At the Closing, TSI will issue to SCP fifty percent (50%) of
the Applicable Number of shares of TSI Common Stock. The other fifty percent
(50%) of the Applicable Number of shares of TSI Common Stock (the "Escrow
Shares") shall be withheld by TSI in order to satisfy SCP's and the SCP
Stockholder's indemnification obligations to TSI pursuant to this Agreement. The
Escrow Shares shall be administered and paid to SCP, if at all, to the extent,
on the terms and conditions and at the times set forth in the Escrow Agreement.
(d) On the Earnout Closing Date, subject to the terms and
conditions set forth in Schedule 2.2(d), this Section 2.2(d) and the Escrow
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Agreement, TSI will issue to SCP the Earnout Shares. The "Earnout Shares" will
be determined according to the Schedule set forth on Schedule 2.2(d). The number
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of Earnout Shares issued on the Earnout Closing Date, if any, may be reduced as
set forth in the Escrow Agreement.
(e) If prior to the Closing or the Earnout Closing Date, TSI
recapitalizes through a split-up of its outstanding shares into a greater
number, or a combination of its outstanding shares into a lesser number,
reorganizes, reclassifies or otherwise changes its outstanding shares into the
same or a different number of shares of other classes (other than through a
split-up or combination of shares provided for in the previous clause), or
declares a dividend on its outstanding shares payable in shares or securities
convertible into shares, the Applicable Number and/or Earnout Shares, as
applicable, shall be adjusted appropriately so as to maintain the proportionate
interests of SCP and the holders of TSI shares.
3. OBLIGATIONS ASSUMED.
3.1 Liabilities.
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(a) Upon consummation of, and effective as of, the Closing, TSI
shall assume those (and only those) liabilities of SCP (i) reflected on the
Financial Statements that are listed on Schedule 3.1 incurred in the ordinary
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course of SCP's business from the date of the latest Financial Statements to the
Closing Date, and (iii) that are listed on Schedule 3.1(a). (collectively, the
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"Assumed Liabilities").
(b) Except as expressly provided in Section 3.1(a) above, TSI does
not assume and shall not become liable or obligated in any way for any
liabilities or obligations of SCP or of any other person or entity, whether
known or unknown on the Closing Date, whether then contingent or fixed, and
whether then liquidated or unliquidated (collectively, the "Excluded
Liabilities"), including but not limited to any liability obligation:
(i) arising out of or related to any Proceeding (as defined
below) by any person or entity concerning the development, manufacture or
distribution of any product or service of SCP or otherwise arising out of or
related to the Business, whether or not such Proceeding is pending, threatened
or asserted before, on or after the Effective Date;
(ii) arising out of or related to the termination of
employment of any current or future employees of SCP or any current or future
employees of its affiliates;
(iii) arising out of or related to: (A) any existing or future
Employee Plan (as defined below) or other employee benefit plan, (B) the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA")
except with respect to employees and consultants who will be employed by TSI
following the Closing, the Federal Worker Adjustment and Retraining Act ("WARN")
or (C) any severance agreement between SCP or its affiliates, on the one hand,
and any other person or entity other than the severance obligations of SCP to
employees of SCP who will not be offered employment by TSI in connection with
the Transfer and expressly set forth on Schedule 3.1;
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(iv) arising out of any failure to pay any tax imposed by any
federal, state or local governmental entity except for those expressly reserved
for in the Financial Statements, Schedule 3.1 or Schedule 3.1a;
(v) arising from any breach or default by SCP of, or any
warranty or similar claim under, any contract, agreement or commitment of SCP
that occurred (or arose from facts occurring) before to the Closing;
(vi) arising out of any options and warrants to purchase
shares of stock of SCP which are outstanding at the Closing; and
(vii) arising out of or in connection with any subsidiary of
SCP (other than the Subsidiary) or Software Mobility Company LLC, a Delaware
Limited Liability Company.
3.2 Employment Services Agreement. In addition to the Assumed
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Liabilities, TSI and SCP will each execute and deliver to each other at the
Closing the Employment Services Agreement attached hereto as Exhibit 3.2 (the
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"Employment Services Agreement"), under which TSI will agree to engage SCP to
deliver the services of the SCP employees listed on Schedule 8.3.
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3.3 No Obligations to Third Parties. The execution, delivery and
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performance of this Agreement shall not be deemed to confer any rights upon any
person or entity other than the parties hereto, to make any person or entity a
third-party beneficiary of this Agreement, or to obligate the parties to any
person or entity other than the parties to this Agreement. Assumption by TSI of
the Assumed Liabilities shall in no way expand the rights or remedies of third
parties against TSI as compared to the rights and remedies such parties would
have against SCP if the Closing were not consummated.
4. REPRESENTATIONS AND WARRANTIES OF SCP AND THE SCP STOCKHOLDER.
SCP and the SCP Stockholder jointly and severally represent and
warrant that the statements contained in this Section 4 are true and correct,
except as expressly set forth herein and in the disclosure schedule delivered by
SCP and SCP Stockholder to TSI prior to the execution and delivery of this
Agreement (the "SCP Disclosure Schedule"). SCP Disclosure Schedule shall be
arranged in sections and paragraphs corresponding to the numbered and lettered
sections and paragraphs contained in this Section 4, and the disclosure in any
section or paragraph shall qualify other sections and paragraphs in this Section
4 only to the extent that it is reasonably apparent from a reading of such
disclosure that it also qualifies or applies to such other sections and
paragraphs.
4.1 Organization and Good Standing. SCP is a corporation duly
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organized, validly existing and in good standing under the laws of the state of
Delaware. SCP-BV is an entity duly organized, validly existing and in good
standing under the laws of the Netherlands. SCP and Subsidiary has the
corporate power and authority to own,
operate and lease its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified as a foreign corporation in
each jurisdiction in which a failure to be so qualified could reasonably be
expected to have a material adverse effect on its present or expected operations
or financial condition.
4.2 Power, Authorization and Validity.
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4.2.1 SCP and the SCP Stockholder have the right, power, legal
capacity and authority to enter into and perform its or his obligations under
this Agreement, and all other agreements to which SCP and/or the SCP Stockholder
is or will be a party that are required to be executed pursuant to this
Agreement (the "SCP Ancillary Agreements"). The execution, delivery and
performance of this Agreement and the SCP Ancillary Agreements to which SCP is a
signatory have been duly and validly approved and authorized by SCP's Board of
Directors and duly and validly approved by each of SCP's stockholders, including
the SCP Stockholder.
4.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable SCP to enter into, and to perform its
obligations under, this Agreement and the SCP Ancillary Agreements, except for
(a) such filings as may be required to comply with federal and state securities
laws and (b) the approval of the SCP stockholders of the Transfer.
4.2.3 This Agreement and the SCP Ancillary Agreements are, or
when executed by SCP and/or the SCP Stockholder, as applicable, will be, valid
and binding obligations of SCP and/or the SCP Stockholder, respectively,
enforceable in accordance with their respective terms, except as to the effect,
if any, of (a) applicable bankruptcy and other similar laws affecting the rights
of creditors generally, (b) rules of law governing specific performance,
injunctive relief and other equitable remedies and (c) the enforceability of
provisions requiring indemnification in connection with the offering, issuance
or sale of securities.
4.3 Subsidiaries. Except for SCP-BV (the "Subsidiary"), which is
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wholly-owned by SCP, SCP does not have any subsidiaries or any interest, direct
or indirect, in any corporation, partnership, limited liability company, joint
venture or other business entity.
4.4 No Violation of Existing Agreements. The execution and delivery
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of this Agreement nor any SCP Ancillary Agreement, and the consummation of the
Transfer hereby or thereby, do not and will not (a) breach, violate or conflict
with the certificate of incorporation or bylaws of SCP or Subsidiary, as amended
to date, (b) conflict with or violate any federal, state, local or foreign
judgment, writ, decree, order, statute, rule or regulation (each a "Regulation")
applicable to SCP, to Subsidiary, to the SCP Stockholder or to any of their
respects assets or properties, including without limitation, the Acquired
Assets, (c) result in any material breach or violation of, or constitute a
material default (or event which with the giving of notice or lapse of time, or
both, would become a breach, violation or default) under, or give to others any
rights of
termination, amendment, acceleration or cancellation of, any of the Contracts or
of any governmental permit held by SCP, or (d) result in the creation of any
Encumbrance on any of the Acquired Assets. The consummation of the Transfer and
the transfer to TSI of each of the Acquired Assets will not require the consent
of any third party, except such consent as SCP shall have obtained before the
Closing.
4.5 Litigation. There is no action, proceeding, claim or
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investigation (each a "Proceeding") pending against SCP or Subsidiary before any
court or administrative agency that if determined adversely to SCP or Subsidiary
may reasonably be expected to have a material adverse effect on the present or
future operations or financial condition of SCP or Subsidiary, nor, to the best
of SCP's and the SCP Stockholder's knowledge, has any such Proceeding been
threatened. There is no reasonable basis for any stockholder or former
stockholder of SCP, or any other person, firm, corporation, or entity, to assert
a claim against SCP or TSI based upon: (a) ownership or rights to ownership of
any shares of stock of SCP, (b) any rights as a stockholder of SCP, including
any option or preemptive rights or rights to notice or to vote, or (c) any
rights under any agreement among SCP and any of its present or former
stockholders.
4.6 SCP Financial Statements.
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(a) SCP has delivered to TSI as Schedule 3.1 SCP's audited balance
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sheet as of June 30, 1998 and income statement and statement of cash flows and
an audited balance sheet as of September 30, 1998 (the "Balance Sheet Date") for
the periods then ended (collectively the "Financial Statements"). The Financial
Statements (i) are in accordance with the books and records of SCP, (ii)
accurately and fairly present the assets and liabilities of SCP and Subsidiary;
(iii) fairly present the financial condition of SCP at the date therein
indicated and the results of operations for the period therein specified and
(iv) have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis. SCP has no material debt,
liability or obligation of any nature, whether accrued, absolute, contingent or
otherwise, and whether due or to become due, that is not reflected or reserved
against in the Financial Statements, except for those that may have been
incurred after the date of the Financial Statements in the ordinary course of
its business, consistent with past practice and that are not material in amount
either individually or collectively, other than those liabilities listed on
Schedule 3.1(a).
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(b) Without limiting the representations and warranties set forth
in Section 4.6(a), the net tangible asset deficit, determined in accordance with
generally accepted accounting principles consistently applied, including without
limitation the liabilities specified on Schedule 3.1 and Schedule 3.1a,
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("Deficit") of SCP as of the Closing Date will not exceed $3,350,000.00 (the
estimate of the Deficit as of the Closing Date provided to TSI on November 10,
1998).
4.7 Title to Acquired Assets. SCP has good and marketable title to
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all of the Acquired Assets, free and clear of all licenses and Encumbrances
(other than for taxes not yet due and payable). All equipment included in the
Acquired Assets is in reasonably good condition and repair, normal wear and tear
excepted, and all leases of real or personal property included in the Acquired
Assets are fully effective and afford SCP or such Subsidiary peaceful and
undisturbed possession of the subject matter of the lease. Neither SCP nor any
Subsidiary is in violation of any zoning, building, safety or environmental
ordinance, regulation or requirement or other law or regulation applicable to
the operation of owned or leased properties (the violation of which would have a
material adverse effect on its business), or has received any notice of
violation with which it has not complied. The Acquired Assets are sufficient
when combined with the business operations of TSI to permit the continued
operation of the Business in substantially the same manner as conducted in the
year ended on the date of this Agreement. Except as set forth in this
Agreement, there is no agreement, option or other right or privilege outstanding
in favor of any person for the purchase or license from SCP of the Business or
of any of the Acquired Assets except the sale of inventory in the ordinary
course of business.
4.8 Absence of Certain Changes. Since the Balance Sheet Date, there
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has not been with respect to SCP or any Subsidiary:
(a) any change in the financial condition, properties, assets,
liabilities, business or operations thereof which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary
course of business, has had or will have a material adverse effect on the
Acquired Assets or the Business;
(b) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of the
Acquired Assets;
(c) any Encumbrance placed upon the Acquired Assets;
(d) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the Acquired Assets;
(e) any change with respect to the management, supervisory or
other key personnel thereof; or
(f) any payment or discharge of an Assumed Liability or any
portion thereof.
4.9 Contracts and Commitments. Except as set forth on Schedule 4.9,
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neither SCP nor any Subsidiary has any:
(a) contract providing for payments by or to SCP or any Subsidiary
in an aggregate amount of $25,000 or more;
(b) license agreement as licensor or licensee (except for standard
non-exclusive hardware and software licenses granted to end-user customers in
the ordinary course of business the form of which has been provided to TSI's
counsel);
(c) agreement for the lease of real or personal property;
(d) joint venture contract or arrangement or any other agreement
that involves a sharing of profits with other persons;
(e) instrument evidencing or related in any way to indebtedness
for borrowed money by way of direct loan, sale of debt securities, purchase
money obligation, conditional sale, guarantee, or otherwise;
(f) contract containing covenants purporting to limit SCP's or
Subsidiary's freedom to compete in any line of business in any geographic area;
or
(g) any other agreement entered into by SCP other than in the
ordinary course of its business.
A true and complete copy of each Contract listed on Schedule 1.2 has been
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delivered to TSI and its counsel. Neither SCP or nor Subsidiary which is a
party to any Contract has committed any material breach or violation of, or
material default (or event which with the giving of notice or lapse of time, or
both, would become a breach, violation or default) under, or taken any action or
permitted any event which gives to others any rights of termination, amendment,
acceleration or cancellation of any Contract, and to the best of SCP and the SCP
Stockholder's knowledge, no other contracting party to any Contract has
committed any material breach or violation of, or material default (or event
which with the giving of notice or lapse of time, or both, would become a
breach, violation or default) under, or taken any action or permitted any event
which gives to others any rights of termination, amendment, acceleration or
cancellation of any Contract. Each of the Contracts is valid, binding and is in
full force and effect. Neither SCP nor Subsidiary is a party to any contract or
arrangement (including without limitation any Contract) which has had or could
reasonably be expected to have a material adverse effect on the Business or the
Acquired Assets. Neither SCP nor Subsidiary has any material liability for
renegotiation of Contracts that are government contracts or subcontracts, if
any.
4.10 Intellectual Property. SCP and Subsidiary own, or have the
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unrestricted right to use, sell or license the SCP IP Rights, and the SCP IP
Rights constitute all the Intellectual Property Rights (as defined below) rights
necessary for the conduct of the Business. The execution, delivery and
performance of this Agreement and the SCP Ancillary Agreements and the
consummation of the Transfer will not result in any material breach or violation
of, or constitute a material default (or event which with the giving of notice
or lapse of time, or both, would become a breach, violation or default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of any agreement governing any SCP IP Right (the "SCP IP Rights
Agreements"), will not cause the forfeiture or termination or give rise to a
right of
forfeiture or termination of any SCP IP Right or materially impair the right of
SCP or any Subsidiary to use, sell or license any SCP IP Right or portion
thereof. There are no royalties, honoraria, fees or other payments payable by
SCP to any person by reason of the ownership, use, license, sale or disposition
of the SCP IP Rights. Neither (a) the manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by SCP or any of the
Subsidiaries or currently under development by SCP or any of the Subsidiaries
nor (b) the provision of any service by SCP or any Subsidiaries pursuant to any
Contract or SCP Right Agreement by which SCP or any Subsidiary is bound or
obligated, violates any license or agreement between SCP or any of the
Subsidiaries and any third party or infringes any Intellectual Property Right of
any other party; and there is no pending or, to the best knowledge of SCP,
threatened Proceedings contesting the validity, ownership or right to use, sell,
license or dispose of any SCP IP Right nor, to the best knowledge of SCP, is
there any basis for any such Proceeding, nor has SCP received any notice
asserting that any SCP IP Right or the proposed use, sale, license or
disposition thereof conflicts or will conflict with the rights of any other
party, nor, to the best knowledge of SCP, is there any basis for any such
assertion. SCP has taken reasonable and practicable steps designed to safeguard
and maintain the secrecy and confidentiality of, and its proprietary rights in,
all material SCP IP Rights. All officers, employees and consultants of SCP and
each Subsidiary have executed and delivered to SCP or the Subsidiary an
agreement regarding the protection of proprietary information and the assignment
to SCP or the Subsidiary of all Intellectual Property Rights arising from the
services performed for SCP or the Subsidiary by such persons, the form of which
has been delivered to counsel for TSI (the "Invention Assignment Agreements").
Schedule 4.10 contains a list of all applications, registrations, filings and
-------------
other formal actions made or taken pursuant to federal, state and foreign laws
by SCP to perfect or protect its interest in SCP IP Rights, including, without
limitation, all Patents, Trademarks and Copyrights. SCP has not allowed any SCP
IP Rights to fall into the public domain. As used herein, the term
"Intellectual Property Rights" shall mean all worldwide industrial and
intellectual property rights, including, without limitation, Patents,
Trademarks, trademarks, trademark applications, trade names, service marks,
service xxxx applications, copyright, copyright applications, franchises,
licenses, inventories, know-how, trade secrets, customer lists, proprietary
processes and formulae, all source and object code, algorithms, architecture,
structure, display screens, layouts, inventions, development tools and all
documentation and media constituting, describing or relating to the above,
including, without limitation, manuals, memoranda and records.
4.11 Compliance with Laws. SCP and each of its Subsidiaries has
--------------------
complied, or prior to the Closing Date will have complied, and is or will be at
the Closing Date in full compliance, in all material respects with each
Regulation applicable to the Acquired Assets and the Business (the violation of
which would have a material adverse effect upon the Acquired Assets or
Business), including, without limitation: (a) all applicable Regulations
pertaining to (i) the sale, licensing, leasing, ownership, or management of the
Acquired Assets, (ii) employment and employment practices, terms and conditions
of employment, and wages and hours and (iii) safety, health, fire prevention,
environmental protection, toxic waste disposal, building standards, zoning
and other similar matters; (c) the Export Administration Act and regulations
promulgated thereunder and all other Regulations applicable to the export or re-
export of controlled commodities or technical data and (d) the Immigration
Reform and Control Act. SCP holds, free and clear of any and all Encumbrances,
all Licenses and Permits. All Licenses and Permits are freely transferable and
are described in Schedule 1.2. Such rights are in full force and effect and SCP
------------
is not in violation of any term or provision or requirement of any such Licenses
and Permits, and no person has threatened to revoke, amend or impose any
condition in respect of, or commenced proceedings to revoke, amend or impose
conditions in respect of, any Licenses and Permits.
4.12. Employees, ERISA and Other Compliance.
-------------------------------------
4.12.1 Except as set forth in Schedule 3.1(a) and Schedule
--------------- --------
4.12.3 neither SCP nor the Subsidiaries have any employment contract or
------
consulting agreement currently in effect that is not terminable at will without
penalty or payment of compensation by SCP or the Subsidiary. To SCP's and the
Subsidiaries' knowledge, no employee of SCP or of the Subsidiary is in violation
of any term of any employment contract, Invention Assignment Agreement,
noncompetition agreement, or any other contract or agreement, or any restrictive
covenant relating to the right of any such employee to be employed thereby, or
to use trade secrets or proprietary information of others and the employment of
such employees does not subject SCP or the Subsidiaries to liability.
4.12.2 SCP and each of the Subsidiaries (a) have never been and
are not now subject to a union organizing effort, (b) are not subject to any
collective bargaining agreement with respect to any of its employees, (c) are
not subject to any other contract, written or oral, with any trade or labor
union, employees' association or similar organization and (d) have no current
labor dispute. SCP and each of the Subsidiaries have good labor relations, and
none of them have knowledge of any facts indicating that the consummation of the
transactions provided for herein will have a material adverse effect on its
labor relations. To SCP's and the Subsidiaries' knowledge, none of SCP's or the
Subsidiaries' key employees intends to leave its employ. A list of all
employees, officers and consultants of SCP and the Subsidiaries and their
current compensation is set forth on Schedule 4.12.2 and each key employee of
---------------
SCP and of the Subsidiaries are identified as such on Schedule 4.12.2. SCP and
---------------
the Subsidiaries are in compliance with all Regulations, agreements and
contracts relating to employment, employment practices, wages, hours and terms
and conditions of employment, including but not limited to, employee
compensation matters.
4.12.3 Except as set forth in Schedule 4.12.3, none of the
---------------
Acquired Assets or Assumed Liabilities include any (a) agreement with any
executive officer or other key employee of SCP or the Subsidiaries (i) the
benefits of which are contingent, or the terms of which are materially altered,
upon the occurrence of a transaction involving SCP or the Subsidiaries in the
nature of the Transfer, (ii) providing any term of employment or compensation
guarantee or (iii) providing severance benefits
or other benefits after the termination of employment of such employee
regardless of the reason for such termination of employment, or (b) agreement or
plan any of the benefits of which will be materially increased, or the vesting
of benefits of which will be materially accelerated, by the occurrence of the
Transfer or the value of any of the benefits of which will be calculated on the
basis of any of the Transfer by this Agreement or the SCP Ancillary Agreements.
To the knowledge of SCP no benefit payable or which may become payable by SCB or
a Subsidiary pursuant to any SCP Employee Plan or as a result of or arising
under this Agreement may cause an "excess parachute payment" as defined in Code
Section 280G(b)(1) which is subject to the imposition of an excise tax under
Code Section 4999 or which would not be deductible by reason of Code Section
280G.
4.13 No Brokers. Neither SCP nor the SCP Stockholder is or will
----------
become obligated for the payment of fees or expenses of any investment banker,
broker or finder in connection with the origin, negotiation or execution of this
Agreement or the SCP Ancillary Agreements or in connection with the Transfer.
4.14 Disclosure. Neither this Agreement, its exhibits and schedules,
----------
nor any of the certificates or documents to be delivered by SCP to TSI under
this Agreement, taken together, contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which such
statements were made, not misleading.
4.15 Environmental Matters.
---------------------
4.15.1 During the period that SCP and Subsidiary have leased or
owned their respective properties or owned or operated any facilities to be
assigned or subject to Contracts to be assigned to TSI hereunder, there have
been no disposals, releases or threatened releases of Hazardous Materials (as
defined below) on, from or under such properties or facilities. SCP has no
knowledge of any presence, disposals, releases or threatened releases of
Hazardous Materials on, from or under any of such properties or facilities,
which may have occurred prior to SCP or any Subsidiary having taken possession
of any of such properties or facilities. For the purposes of this Agreement, the
terms "Disposal," "Release," and "Threatened Release" shall have the definitions
assigned thereto by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., as amended ("CERCLA"). For
the purposes of this Agreement "Hazardous Materials" shall mean any hazardous or
toxic substance, material or waste which is or becomes prior to the Closing
regulated under, or defined as a "hazardous substance," "pollutant,"
"contaminant," "toxic chemical," "hazardous materials," "toxic substance" or
"hazardous chemical" under (1) CERCLA; (2) any similar Regulation; or (3)
regulations promulgated under any of the above laws or statutes.
4.15.2 None of the properties or facilities of SCP or any
Subsidiary to be assigned or subject to Contracts to be assigned to TSI
hereunder is in
violation of any federal, state or local law, ordinance, regulation or order
relating to industrial hygiene or to the environmental conditions on, under or
about such properties or facilities, including, but not limited to, soil and
ground water condition. During the time that SCP or any Subsidiary have owned
or leased their respective properties and facilities to be assigned or subject
to Contracts to be assigned to TSI hereunder, neither SCP nor any Subsidiary
nor, to SCP's knowledge, any third party, has used, generated, manufactured or
stored on, under or about such properties or facilities or transported to or
from such properties or facilities, any Hazardous Materials.
4.15.3 During the time that SCP or any Subsidiary have owned or
leased their respective properties and facilities to be assigned or subject to
Contracts to be assigned to TSI hereunder, there has been no Proceeding brought
or threatened against SCP or any Subsidiary by, or any settlement reached by SCP
or any Subsidiary with, any party or parties alleging the presence, disposal,
release or threatened release of any Hazardous Materials on, from or under any
of such properties or facilities.
4.16 Investment Representations.
--------------------------
4.16.1 Information. SCP acknowledges that TSI has furnished it
-----------
with its annual report on Form 10-K for its fiscal year ended December 31, 1997
(the "Fiscal Year End"), its proxy statement for its annual stockholders meeting
held on May 27, 1998, its quarterly reports on Form 10-Q for the fiscal quarters
ended March 31, 1998, June 30, 1998 and September 30, 1998 and all other reports
or documents filed by TSI pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the Closing (the "TSI Disclosure
Package").
4.16.2 Access to Other Information. SCP recognizes that TSI has
---------------------------
made available to SCP the opportunity to examine such additional documents from
TSI and to ask questions of, and receive full answers from, TSI concerning,
among other things, TSI, its financial condition, its management, its prior
activities and any other information which SCP considers relevant or appropriate
in connection with entering into this Agreement and any of the SCP Ancillary
Agreements.
4.16.3 Risks of Investment. SCP acknowledges that the shares of
-------------------
TSI Common Stock issued under this Agreement (the "Restricted Securities") will
not be registered under the Securities Act and, therefore, constitute
"restricted securities" under Rule 144(d), promulgated by the Securities and
Exchange Commission ("SEC") under the Securities Act. SCP is familiar with the
provisions of Rule 144 which permit only limited resale of "restricted
securities," including that such securities must generally be held for at least
one year from the date of their acquisition and may then be sold only if certain
other requirements are met. Furthermore, SCP understands that in the event all
of the applicable requirements of Rule 144 are not satisfied, registration under
the Securities Act or some other exemption from the registration requirements of
the Securities Act will be required in order to dispose of the Restricted
Securities, and that SCP may be required to hold its shares of TSI Common Stock
received under this
Agreement for a significant period of time prior to reselling them. SCP accepts
the risks of holding such shares indefinitely, and the other risks set forth in
the TSI Disclosure Package. SCP is capable of assessing the risks of an
investment in TSI Common Stock and is fully aware of the economic risks thereof.
SCP acknowledges that TSI `s operating results have in the past and may in the
current period and in future periods not meet the expectations of securities
analysts and that failure to meets such expectations would be likely to have a
material adverse effect on the trading price and salability of TSI Common Stock.
4.16.4 Investment Intent. SCP is receiving the Restricted
-----------------
Securities under this Agreement only for investment for SCP's own account and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.
4.16.5 Restricted Securities. SCP acknowledges and understands
---------------------
that the terms of Transfer have not been reviewed by the SEC or by any state
securities authorities, and has been issued in reliance on the exemptions for
non-public offerings provided by Rule 506 and Section 4(2) of the Securities
Act, which exemptions depend upon, among other things, the representations made
and information furnished by SCP, including the bona fide nature of SCP's
investment intent as expressed above.
4.16.6 Legends. SCP also understands and agrees that there will
-------
be placed on the certificates evidencing the ownership of the Restricted
Securities, the following legends, in addition to any legends required by
applicable state laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS
OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO EXEMPTIONS THEREFROM.
4.16.7 Stop Transfer Instructions; No Requirement to Transfer.
------------------------------------------------------
SCP agrees that, in order to ensure compliance with the restrictions referred to
herein, TSI may issue appropriate "stop transfer" instructions to its transfer
agent. TSI shall not be required (i) to transfer or have transferred on its
books any TSI Common Stock that has been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such TSI Common Stock or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such TSI Common
Stock shall have been so transferred in violation of any provision of this
Agreement. TSI agrees that such stop transfer instructions and legends will be
promptly removed if the provisions of the Securities Act are complied with.
4.16.8 Accuracy of Information. All information that SCP
-----------------------
provides to TSI hereunder is correct and complete as of the date set forth
above.
4.16.9 Ability to Bear Economic Risk. SCP Stockholder is the
-----------------------------
sole stockholder of SCP and is an "accredited" investor, and SCP represents that
it (i) is able to bear the economic risk of its investment in the Restricted
Securities, (ii) is able to hold the Restricted Securities for an indefinite
period of time, (iii) can afford a complete loss of its investment in the
Restricted Securities and (iv) has adequate means of providing for SCP's current
needs and possible personal contingencies and has no need for liquidity in this
investment.
4.16.10 No Public Solicitation. SCP represents that at no time
----------------------
was SCP presented with or solicited by any general mailing, leaflet, public
promotional meeting, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising or general solicitation
in connection with the Transfer.
4.16.11 Distribution of Restricted Securities to SCP
--------------------------------------------
Stockholder. The parties acknowledge that in connection with the Transfer, SCP
-----------
may distribute the Restricted Securities to the SCP Stockholder. In addition to
the other terms and conditions of this Agreement pertaining to the transfer of
the Restricted Securities, SCP will make no distribution of the Restricted
Securities unless: (a) such distribution is exempt from registration under the
Securities Act and all applicable state laws and regulations; and (b) the SCP
Stockholder executes a written agreement in favor of TSI to be bound by the
representations and warranties set forth in this Section 4.17 with respect to
any Restricted Securities received by the SCP Stockholder.
4.17 Certain Tax Representations of SCP.
----------------------------------
4.17.1 To the best of the knowledge of SCP, there is no plan or
intention by the stockholders of SCP to directly or indirectly sell or otherwise
exchange any TSI Common Stock received pursuant to this Agreement to TSI or to
any direct or indirect agent thereof.
4.17.2 Excluding for these purposes its ownership interest in
Software Mobility Company, LLC ("SMC") and assets which are sold by SCP to
Acsis, SCP has not sold or otherwise disposed of any of its assets in
anticipation of the transactions contemplated by this Agreement.
4.17.3 Excluding for these purposes any direct or indirect
sales or other dispositions of the assets of SMC and assets which are sold by
SCP to Acsis, SCP shall not sell or otherwise dispose of any of its assets
except in the ordinary course of business prior to Closing.
4.17.4 SCP has not made any extraordinary dividend
distributions in anticipation of the transactions contemplated by this
Agreement. SCP will not make any extraordinary dividend distributions prior to
the Closing or in connection with the Closing.
4.17.5 Before the Closing, SCP will hold its net assets and
transfer to TSI at the Closing at least 90 percent of the fair market value of
the net assets and at least 70 percent of the fair market value of the gross
assets held by SCP immediately prior to Closing. For purposes of this
representation, amounts paid by SCP to stockholders who receive cash and other
property, if any, and amounts used by SCP to pay reorganization expenses, and
all redemptions and distributions (except for regular, normal dividends) made
by SCP immediately preceding the Closing will be included as assets of SCP held
immediately prior to Closing.
4.17.6 The liabilities to which the Acquired Assets are subject
were incurred by SCP in the ordinary course of its business.
4.17.7 None of the compensation received by any stockholder-
employees of SCP was separate consideration for, or allocable to, any of their
shares of SCP capital stock.
4.17.8 On or prior to Closing, any prepayment of fees for
services to be rendered by SCP or TSI or any affiliate thereof: (i) was
reasonable in amount taking into account the services to be provided, (ii) was
not separate consideration for the assets of SCP, and (iii) was consistent with
the customary business practices of SCP.
4.17.9 SCP will distribute the stock it receives from TSI
pursuant to this Agreement to its shareholders in pursuance to a plan of
reorganization within the meaning of Section 368 of the Code.
5. REPRESENTATIONS AND WARRANTIES OF TSI
TSI represent and warrant that the statements contained in this
Section 5 are true and correct, except as expressly set forth herein and in the
disclosure schedule delivered by TSI prior to the execution and delivery of this
Agreement (the "TSI Disclosure Schedule"). The TSI Disclosure Schedule shall be
arranged in sections and paragraphs corresponding to the numbered and lettered
sections and paragraphs contained in this Section 5, and the disclosure in any
section or paragraph shall qualify other sections and paragraphs in this Section
5 only to the extent that it is reasonably apparent from a reading of such
disclosure that it also qualifies or applies to such other sections and
paragraphs.
5.1 Organization and Good Standing. TSI is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware
and has the corporate power and authority to own, operate and lease its
properties and to carry on its business as now conducted and as proposed to be
conducted.
5.2 Power, Authorization and Validity.
---------------------------------
5.2.1 TSI has the right, power, legal capacity and authority to
enter into and perform its obligations under this Agreement, and all agreements
to which TSI is or will be a party that are required to be executed pursuant to
this Agreement (the "TSI Ancillary Agreements"). The execution, delivery and
performance of this Agreement and the TSI Ancillary Agreements have been duly
and validly approved and authorized by TSI's Board of Directors.
5.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable TSI to enter into, and to perform its
obligations under, this Agreement and the TSI Ancillary Agreements, except for
such filings as may be required to comply with federal and state securities
laws.
5.2.3 This Agreement and the TSI Ancillary Agreements are, or
when executed by TSI will be, valid and binding obligations of TSI enforceable
in accordance with their respective terms, except as to the effect, if any, of
(a) applicable bankruptcy and other similar laws affecting the rights of
creditors generally, (b) rules of law governing specific performance, injunctive
relief and other equitable remedies and (c) the enforceability of provisions
requiring indemnification in connection with the offering, issuance or sale of
securities.
5.3 No Violation of Existing Agreements. Neither the execution and
-----------------------------------
delivery of this Agreement nor any TSI Ancillary Agreement, nor the consummation
of the Transfer, will (a) breach, violate or conflict with the Certificate of
Incorporation or Bylaws of TSI, as amended to date, (b) conflict with or violate
any Regulation applicable to TSI or its assets or properties or (c) result in
any material breach or violation of, or constitute a material default (or event
which with the giving of notice or lapse of time, or both, would become a
breach, violation or default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material instrument
or contract to which TSI is a party or by which TSI is bound.
5.4 Absence of Certain Changes. Since the Fiscal Year End, there has
--------------------------
not been any change in the financial condition, properties, assets, liabilities,
business or operations of TSI which change by itself or in conjunction with all
other such changes, whether or not arising in the ordinary course of business,
has had or will have a material adverse effect on TSI or its business, taken as
a whole, except as disclosed in the Notice Materials.
5.5 No Brokers. TSI is not obligated for the payment of fees or
----------
expenses of any investment banker, broker or finder in connection with the
origin, negotiation or execution of this Agreement or the TSI Ancillary
Agreements or in connection with the Transfer.
5.6 Capital Stock. The shares of TSI Common Stock to be issued in
-------------
accordance with this Agreement will be duly authorized, validly issued, fully
paid and nonassessable, such shares will be issued without any violation of
preemptive rights.
5.7 SEC Filings. The TSI Disclosure Package did not at the time they
-----------
were filed contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
5.8 Certain Tax Representations of TSI.
----------------------------------
5.8.1 To the best of the knowledge of TSI, the fair market value
of the Common Stock of TSI to be transferred to the stockholder of SCP will be
approximately equal to the fair market value of the assets exchanged therefor
(as reduced by the sum of the liabilities assumed by TSI plus the liabilities to
which the Acquired Assets are subject).
5.8.2 TSI has no plan or intention to sell or otherwise dispose
of any of the assets of SCP acquired in the transaction, except for dispositions
made in the ordinary course of business or transfers described in Section
368(a)(2)(C) of the Code and the Treasury Regulations thereunder.
5.8.3. TSI has no plan or intention to reacquire any of its stock
to be issued pursuant to the transactions contemplated by this Agreement.
5.8.4 Following the transaction, TSI currently intends to
continue the historic business of SCP or use a significant portion of SCP's
historic business assets in a business.
5.8.5 To the knowledge of TSI, none of the shares of TSI Common
Stock transferred to the SCP Stockholder pursuant to this Agreement will be
separate consideration for, or allocable to, any employment agreement, and the
compensation paid by TSI to the SCP Stockholder will be for services rendered
and will be commensurate with amounts paid by TSI to third parties bargaining at
arm's length for similar services.
6. SCP PRECLOSING COVENANTS
During the period from the date of this Agreement until the Closing,
SCP covenants and agrees as follows:
6.1 Advice of Changes. SCP will promptly advise TSI in writing (a)
-----------------
of any event occurring subsequent to the date of this Agreement that would
render any representation or warranty of SCP (and to the extent that it comes to
the knowledge of an executive officer or director SCP, of any representation or
warranty of the SCP Stockholder) contained in this Agreement, if made on or as
of the date of such event or
the Closing Date, untrue or inaccurate in any material respect and (b) of any
material adverse change in the Business or Acquired Assets.
6.2 Maintenance of Business. SCP will use its best efforts to carry
-----------------------
on and preserve its Business and its relationships with customers, suppliers,
employees and others in substantially the same manner as it has prior to the
Effective Date. If SCP becomes aware of a material deterioration in the
relationship with any customer, supplier or key employee, it will promptly bring
such information to the attention of TSI in writing and, if requested by TSI,
will exert its best efforts to restore the relationship.
6.3 Conduct of Business. SCP will continue to conduct its business
-------------------
and maintain its business relationships in the ordinary and usual course
consistent with past practices and will not, without the prior written consent
of the President of TSI:
(a) borrow any money, except for reasonably and necessary
acquisition of business supplies on open account, consistent with past practices
in any manner that would adversely affect the Business or Acquired Assets;
(b) enter into any transaction not in the ordinary course of
business that would adversely affect the Business or Acquired Assets;
(c) consent to or permit any Encumbrance on any of the Acquired
Assets except in the ordinary course of its business consistent with past
practice and only to an extent which is not material;
(d) discontinue the Business or dispose of any of the Acquired
Assets;
(e) enter into any material lease or contract for the purchase or
sale of any property, real or personal, except in the ordinary course of
business consistent with past practice;
(f) fail to maintain the Acquired Assets in good working condition
and repair according to the standards it has maintained to the date of this
Agreement, subject only to ordinary wear and tear;
(g) enter into any new, or change any existing, employment or
consulting agreement with any officer, employee or consultant;
(h) amend or terminate any Contract;
(i) waive or release any material right or claim constituting a
Acquired Asset except in the ordinary course of business, consistent with past
practice;
(j) merge, consolidate or reorganize with, or acquire any entity;
(k) license any of its technology or any of the SCP IR Rights
except in the ordinary course of business consistent with past practice;
(l) change any insurance coverage with respect to the Acquired
Assets; or
(m) agree to do, or permit any Subsidiary to do or agree to do,
any of the things described in the preceding clauses.
6.4 Stockholders Approval. The SCP Stockholder will sign a written
---------------------
consent of stockholder in the form of Exhibit 6.4 approving this Agreement, the
-----------
Transfer and related matters.
6.5 Regulatory Approvals. SCP will execute and file, or join in the
--------------------
execution and filing, of any application or other document that may be necessary
in order to obtain the authorization, approval or consent of any governmental
body, federal, state, local or foreign which may be reasonably required, or
which TSI may reasonably request, in connection with the Transfer. SCP will use
its best efforts to obtain all such authorizations, approvals and consents.
6.6 Necessary Consents. SCP will use its best efforts to obtain such
------------------
written consents and take such other actions as may be necessary or appropriate
to allow the consummation of the Transfer and to allow TSI to carry on SCP's
business after the Closing.
6.7 Litigation. SCP will notify TSI in writing promptly after
----------
learning of any Proceeding by or before any court, board or governmental agency,
initiated by or against it or any Subsidiary, and any Proceeding known by it to
be threatened against it or any Subsidiary.
6.8 No Other Negotiations. From the Effective Date until the earlier
---------------------
of termination of this Agreement or the consummation of the Transfer, SCP will
not, and will not authorize or permit any officer, director, employee or
affiliate of SCP, or any other person, on its behalf to, directly or indirectly,
solicit or encourage any offer from any party, or proposals received from any
other party, participate in any negotiations regarding, or furnish to any person
any information with respect to, or otherwise cooperate with, facilitate or
encourage any effort or attempt by any person (other than TSI), concerning the
possible disposition of all or any substantial portion of SCP's business, assets
or capital stock by merger, sale or any other means. SCP will promptly notify
TSI orally and in writing of any such inquiries or proposals.
6.9 Access to Information. Until the Closing, SCP will allow TSI and
---------------------
its agents reasonable access the files, books, records and offices of SCP and
each Subsidiary, including, without limitation, any and all information relating
to SCP's taxes, commitments, contracts, leases, licenses, and real, personal and
intangible property and financial condition. SCP will cause its accountants to
cooperate with TSI and its agents
in making available all financial information reasonably requested, including
without limitation the right to examine all working papers pertaining to all
financial statements prepared or audited by such accountants.
6.10 Satisfaction of Conditions Precedent. SCP will use its best
------------------------------------
efforts to satisfy or cause to be satisfied all the conditions precedent which
are set forth in Section 10, and SCP will use its best efforts to cause the
Transfer to be consummated, and, without limiting the generality of the
foregoing, to obtain all consents and authorizations of third parties and to
make all filings with, and give all notices to, third parties that may be
necessary or reasonably required on its part in order to effect the Transfer.
6.11 Non-Competition Agreement. SCP shall obtain from Xxxxxx
-------------------------
Xxxxxxx a non-competition agreement substantially in the form of Exhibit 6.11 in
------------
which Xx. Xxxxxxx agrees not to compete with the business of SCP and TSI (or any
successor corporations) for a period of one year after the Closing.
6.12 Employment Agreements. SCP shall assist the TSI in negotiating
---------------------
and obtaining employment agreements from each of Xxxxxx Xxxxxxx and Xxxxx
Xxxxxxx substantially in the forms of Exhibits 6.12A and 6.12B, respectively.
------------------------
6.13 Blue Sky Laws. SCP shall use its best efforts to assist TSI to
-------------
the extent necessary to comply with the securities and Blue Sky laws of all
jurisdictions which are applicable in connection with the Transfer.
6.14 Plan of Liquidation. Prior to Closing, the Board of Directors
-------------------
of SCP shall authorize, and the shareholders of SCP shall approve, a plan of
complete liquidation of SCP pursuant to which, following the Closing, SCP shall
promptly dissolve and distribute all of the remaining assets of SCP subject to
applicable liabilities to its shareholders (and/or a liquidating trust for the
benefit of its shareholders).
7. TSI PRECLOSING COVENANTS
During the period from the date of this Agreement until the Closing,
TSI covenants and agrees as follows:
7.1 Regulatory Approvals. TSI will execute and file, or join in the
--------------------
execution and filing, of any application or other document that may be necessary
in order to obtain the authorization, approval or consent of any governmental
body, federal, state, local or foreign, which may be reasonably required, or
which SCP may reasonably request, in connection with the Transfer. TSI will use
its best efforts to obtain all such authorizations, approvals and consents.
7.2 Satisfaction of Conditions Precedent. TSI will use its best
------------------------------------
efforts to satisfy or cause to be satisfied all the conditions precedent which
are set forth in Section 9, and TSI will use its best efforts to cause the
Transfer to be consummated, and,
without limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties that may be necessary or reasonably required on its
part in order to effect the Transfer.
7.3 Blue Sky Laws. TSI shall take such steps as may be necessary to
-------------
comply with the securities and Blue Sky laws of all jurisdictions which are
applicable in connection with the Transfer, without, however, any requirement to
register or qualify any securities in any such jurisdiction.
8. POST-CLOSING COVENANTS
8.1 Bulk Sale Compliance. To the extent otherwise applicable to the
---------------------
Transfer, TSI hereby waives compliance by SCP with the provisions of the Bulk
Sales Law of the Uniform Commercial Code of each applicable jurisdiction to the
extent applicable to the contemplated transactions. SCP shall indemnify and
hold TSI harmless from and against any and all damages that result from such
non-compliance.
8.2 Taxes. SCP agrees promptly to pay all sales, use or other taxes
-----
arising from the sale of the Acquired Assets and to defend, indemnify and hold
TSI harmless from and against any such taxes or claims for payment thereof by
any taxing authority. SCP acknowledges that TSI has made no representation or
warranty with respect to the taxability under the Code or otherwise of the
transactions contemplated hereby.
8.3 Retention of SCP and Selected Personnel. From and after the
---------------------------------------
Closing, SCP shall perform its obligations under the Employment Services
Agreement. In connection therewith and to further the performance of the
Employment Services Agreement, SCP shall use its best efforts to retain all of
its present employees listed on Schedule 8.3 through December 31, 1998 and, at
------------
the request of TSI, thereafter, during the term of the Employment Services
Agreement.
8.4 Dissolution. From and after the Closing, SCP will not engage in
-----------
any business, will promptly liquidate and dissolve as a corporation, and will
distribute all of its assets (including, without limitation, the shares of TSI
Common Stock received pursuant to this Agreement) to its shareholder in complete
cancellation and redemption of its shares of SCP capital stock. Notwithstanding
the foregoing, in the period from Closing through January 15, 1999 (the "Interim
Period"), SCP shall continue to nominally employ various employees ("Affected
Employees") whose immigration status in the United States would be negatively
impacted by a transfer of their employment status from SCP to TSI; provided,
however, that (i) these Affected Employees shall be under the direct and/or
indirect supervision and control of solely TSI during the Interim Period and
(ii) the functions of SCP in the Interim Period Shall in substance, be limited
to winding-up its business and distributing its remaining assets to SCP
shareholders.
9. CONDITIONS TO OBLIGATIONS OF SCP.
SCP's obligations hereunder are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by SCP, but only in a writing signed by SCP):
9.1 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of TSI set forth in Section 5 shall be true and accurate in every
material respect on and as of the Closing with the same force and effect as if
they had been made at the Closing, and SCP shall have received a certificate to
such effect executed by TSI's President and Chief Financial Officer.
9.2 Covenants. TSI shall have performed and complied in all material
---------
respects with all of its covenants contained in Section 7 on or before the
Closing, and SCP shall have received a certificate to such effect signed by
TSI's President and Chief Financial Officer.
9.3 Compliance with Law. There shall be no order, decree, or ruling
-------------------
by any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the Transfer.
9.4 Government Consents. There shall have been obtained at or prior
-------------------
to the Closing Date such permits or authorizations, and there shall have been
taken such other action, as may be required to consummate the Transfer by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken, including but not limited to requirements under applicable
federal and state securities laws.
9.5 Opinion of TSI's Counsel. SCP shall have received from counsel
------------------------
to TSI, an opinion substantially in the form of Exhibit 9.5.
-----------
9.6 Documents. SCP shall have received all written consents,
---------
assignments, waivers, authorizations or other certificates reasonably deemed
necessary by SCP's legal counsel for SCP to consummate the Transfer.
9.7 Consents. SCP shall have received duly executed copies of all
--------
material third-party consents and approvals contemplated by this Agreement or
the SCP Disclosure Schedule in form and substance reasonably satisfactory to
SCP, except for such consents and approvals as TSI and SCP shall have agreed
shall not be obtained, as contemplated by the SCP Disclosure Schedule.
9.8 Registration Rights Agreement. SCP shall have received a duly
-----------------------------
executed copy of the Registration Rights Agreement substantially in the form of
Exhibit 9.8.
-----------
10. CONDITIONS TO OBLIGATIONS OF TSI
The obligations of TSI hereunder at the Closing are subject to the
fulfillment or satisfaction on, and as of the Closing, of each of the following
conditions (any one or more of which may be waived by TSI, but only in a writing
signed by TSI):
10.1 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of SCP and the SCP Stockholder set forth in Section 4 shall be
true and accurate in every material respect on and as of the Closing with the
same force and effect as if they had been made at the Closing, and TSI shall
have received a certificate to such effect executed by SCP's President and Chief
Financial Officer and by the SCP Stockholder .
10.2 Covenants. SCP shall have performed and complied in all
---------
material respects with all of its covenants contained in Section 6 on or before
the Closing, and TSI shall receive a certificate to such effect signed by SCP's
President and Chief Financial Officer/Secretary.
10.3 Compliance with Law. There shall be no order, decree, or ruling
-------------------
by any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the Transfer.
10.4 Government Consents. There shall have been obtained at or prior
-------------------
to the Closing Date such permits or authorizations, and there shall have been
taken such other action, as may be required to consummate the Transfer by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken, including but not limited to requirements under applicable
federal and state securities laws.
10.5 Opinion of SCP's Counsel. TSI shall have received from counsel
------------------------
to SCP, an opinion substantially in the form of Exhibit 10.1(e).
---------------
10.6 Consents. TSI shall have received duly executed copies of all
--------
material third-party consents, approvals, assignments, waivers, authorizations
or other certificates contemplated by this Agreement or the TSI Disclosure
Schedule or reasonably deemed necessary by TSI's legal counsel to provide for
the continuation in full force and effect of any and all material contracts and
leases of SCP and for TSI to consummate the Transfer in form and substance
reasonably satisfactory to TSI, except for such thereof as TSI and SCP shall
have agreed shall not be obtained, as contemplated by the TSI Disclosure
Schedule.
10.7 No Litigation. No litigation or proceeding shall be threatened
-------------
or pending for the purpose or with the probable effect of enjoining or
preventing the consummation of any of the Transfer, or which could be reasonably
expected to have a material adverse effect on the present or future operations
or financial condition of SCP.
10.8 Requisite Approvals. The principal terms of this Agreement and
-------------------
the Transfer shall have been approved and adopted by the SCP Stockholder, as
required by applicable law and SCP's Certificate of Incorporation and Bylaws,
and by SCP's Board of Directors.
10.9 Escrow. TSI shall have received an Escrow Agreement executed by
------
SCP and the SCP Stockholder, providing for the escrow of the Escrow Shares on
the terms and conditions of the Escrow Agreement to secure performance of the
obligations of SCP and the SCP Stockholder under Section 2.
10.10 Non-Competition Agreements. TSI shall have received executed
--------------------------
copies of Non-Competition Agreements executed by TSI and Xxxxxx Xxxxxxx in
substantially the form attached hereto as Exhibit 6.11.
------------
10.11 Employment Agreements. TSI shall have received executed copies
---------------------
of TSI Employment Agreements executed by TSI and each of Xxxxxx Xxxxxxx and
Xxxxx Xxxxxxx in substantially the forms attached hereto as Exhibits 6.12A and
------------------
6.12B, respectively.
-----
10.12 Employees. At least 20 of the SCP employees listed on Schedule
--------- --------
8.3 shall have accepted employment with TSI by countersigning the form of offer
---
letter provided by TSI.
11. TERMINATION OF AGREEMENT
11.1 Prior to Closing. This Agreement may be terminated at any time
----------------
prior to the Closing by the mutual written consent of each of the parties
hereto.
11.2 At the Closing. At the Closing, this Agreement may be
--------------
terminated and abandoned:
11.2.1 By TSI, if any of the conditions precedent to TSI's
obligations set forth in Section 10 above have not been fulfilled or waived at
and as of the Closing; or
11.2.2 By SCP, if any of the conditions precedent to SCP's
obligations set forth in Section 9 above have not been fulfilled or waived at
and as of the Closing.
Any termination of this Agreement under this Section 11.2 will be effective by
the delivery of notice of the terminating party to the other party hereto.
11.3 No Liability. Any termination of this Agreement pursuant to
------------
this Section 11 will be without further obligation or liability upon any party
in favor of the other party hereto other than the obligations provided in
Sections 13.7 and 13.15 and in the Confidentiality Agreement between SCP and TSI
dated March 3, 1998, which will survive termination of this Agreement (the
"Confidentiality Agreement"); provided,
however, that nothing herein will limit the obligation of SCP and TSI to use
their best efforts to cause the Transfer to be consummated, as set forth in
Sections 6.10 and 7.2, respectively. Notwithstanding the foregoing, nothing in
this Section 11 will be construed as relieving SCP of any of its obligations to
TSI under that certain Consulting Agreement between TSI and SCP, as amended by
an Addendum dated as of October 2, 1998 ("Prior Consulting Agreement").
12. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING
COVENANTS
12.1 Survival of Representations. All representations, warranties
---------------------------
and covenants of TSI contained in this Agreement will remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the parties to this Agreement, until the earlier of the termination of this
Agreement or one year following the Closing Date, whereupon such
representations, warranties and covenants will expire (except for covenants that
by their terms survive for a longer period). Unless otherwise specified herein,
all representations, warranties and covenants of SCP will survive the Closing
and will continue until the Earnout Closing Date whereupon such representations,
warranties and covenants will expire except for covenants that by their terms
survive.
12.2 SCP's Agreement to Indemnify. Subject to the limitations set
----------------------------
forth in this Section 12, SCP and the SCP Stockholder, severally and jointly,
will indemnify and hold harmless TSI and its officers, directors, agents and
employees, and each person, if any, who controls or may control TSI within the
meaning of the Securities Act (hereinafter referred to individually as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
any and all claims, demands, actions, causes of actions, losses, costs, damages,
liabilities and expenses including, without limitation, reasonable legal fees
(hereinafter referred to as "Damages") arising out of any misrepresentation or
breach of or default in connection with any of the representations, warranties
and covenants given or made by SCP or the SCP Stockholder in this Agreement, any
of the SCP Ancillary Agreements or any certificate, document or instrument
delivered by or on behalf of SCP pursuant hereto or thereto.
12.3 TSI's Agreement to Indemnity. TSI will indemnify and hold
----------------------------
harmless SCP and the SCP Stockholder from and against any and all Damages which
may be sustained, suffered or incurred by SCP and/or the SCP Stockholder arising
out of any misrepresentation or breach or default in connection with any of the
representations, warranties and covenants given or made by TSI in this
Agreement, any of the TSI Ancillary Agreements or any certificate, document or
instrument delivered by or on behalf of TSI pursuant hereto or thereto.
12.4 Limitations on Liability. Anything in this Agreement to the
------------------------
contrary notwithstanding, neither SCP nor the SCP Stockholder shall be liable
for indemnification under Section 12.2 until the aggregate of all Damages for
which
indemnity is claimed exceeds $50,000, in which case TSI shall be entitled to
indemnification only for the amount in excess of $50,000.
12.5 Cap. The maximum aggregate amount for which TSI, SCP and/or the
---
SCP Stockholder may be responsible or otherwise liable under this Agreement
shall be the amount of the Purchase Price then actually received by SCP or the
SCP Stockholder.
12.6 Exclusive Remedy. The remedy provided by this Section 12,
----------------
subject to the limitations and restrictions set forth herein, shall be the
parties' sole and exclusive remedy for the recovery of any damages resulting
from, relating to or arising out of this Agreement. No party shall be entitled
to an award of punitive or exemplary damages against any other party.
12.7 Tax Benefit; Insurance. Any indemnification payment hereunder
----------------------
shall take into account (i) any tax benefit to the indemnified party resulting
from the loss giving rise to such payment net of any tax cost to such
indemnified party resulting from the receipt of such payment and (ii) any
insurance proceeds or other third-party reimbursement actually received.
13. MISCELLANEOUS
13.1 Governing Law. The internal laws of the State of Delaware
-------------
(irrespective of its choice of law principles) will govern the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties hereto.
13.2 Assignment; Binding Upon Successors and Assigns. Neither party
-----------------------------------------------
hereto may assign any of its rights or obligations hereunder without the prior
written consent of the other parties hereto. This Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
13.3 Severability. If any provision of this Agreement, or the
------------
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.
13.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
both parties reflected hereon as signatories.
13.5 Other Remedies. Except as otherwise provided herein, any and
--------------
all remedies herein expressly conferred upon a party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby or by law on such
party, and the exercise of any one remedy will not preclude the exercise of any
other.
13.6 Amendment and Waivers. Any term or provision of this Agreement
---------------------
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof or default in the performance hereof will
not be deemed to constitute a waiver of any other default or any succeeding
breach or default, and the failure of any party to enforce any of the provisions
hereof will not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.. The Agreement may be amended by the
parties hereto at any time before or after approval of the SCP stockholders,
but, after such approval, no amendment will be made which by applicable law
requires the further approval of the SCP stockholders without obtaining such
further approval.
13.7 Expenses. Each party will bear its respective expenses and
--------
legal fees incurred with respect to all due diligence and preparation of this
Agreement, and the negotiation of this Agreement, the SCP Ancillary Agreements,
the TSI Ancillary Agreements, the Escrow Agreement, and the consummation of the
Transfer.
13.8 Attorneys' Fees. Should suit be brought to enforce or interpret
---------------
any part of this Agreement, the prevailing party will be entitled to recover, as
an element of the costs of suit and not as damages, reasonable attorneys' fees
to be fixed by the court (including without limitation, costs, expenses and fees
on any appeal). The prevailing party will be entitled to recover its costs of
suit, regardless of whether such suit proceeds to final judgment.
13.9 Notices. Any notice or other communication required or
-------
permitted to be given under this Agreement will be in writing, will be delivered
personally or by registered or certified mail, postage prepaid or by facsimile
transmission (with conformation of receipt) and will be deemed given upon
delivery, if delivered personally, or three days after deposit in the mails, if
mailed, to the following addresses:
(i) If to TSI:
TSI International Software Ltd.
00 Xxxxxxx Xx.
Xxxxxx, Xxxxxxxxxxx 00000
Attention: President
With a copy to:
Fenwick & West LLP
000 Xxx Xxxxxxxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
(ii) If to SCP:
Software Consulting Partners, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxxxxxx 00000
Attention: President
With a copy to:
Blank Rome Xxxxxxx & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 13.9.
13.10 Construction of Agreement. This Agreement has been negotiated
-------------------------
by the respective parties hereto and their attorneys and the language hereof
will not be construed for or against either party. A reference to a Section or
an exhibit will mean a Section in, or exhibit to, this Agreement unless
otherwise explicitly set forth. The titles and headings herein are for
reference purposes only and will not in any manner limit the construction of
this Agreement which will be considered as a whole.
13.11 No Joint Venture. Nothing contained in this Agreement will be
----------------
deemed or construed as creating a joint venture or partnership between any of
the parties hereto. No party is by virtue of this Agreement authorized as an
agent, employee or legal representative of any other party. No party will have
the power to control the activities and operations of any other and their status
is, and at all times, will continue to be, that of independent entities with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
13.12 Further Assurances. Each party agrees to cooperate fully with
------------------
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the Transfer and to carry
into effect the intents and purposes of this Agreement.
13.13 Absence of Third Party Beneficiary Rights. No provisions of
-----------------------------------------
this Agreement are intended, nor will be interpreted, to provide or create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner of any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
13.14 Public Announcement. Upon execution of this Agreement TSI and
-------------------
SCP will issue a press release, approved in advance of release by the parties
announcing the Transfer. Thereafter, TSI may issue such press releases, and
make such other disclosures regarding the Transfer, as it determines are
required under applicable securities laws or regulatory rules.
13.15 Confidentiality. SCP and TSI each recognize that they have
---------------
received and will receive confidential information concerning the other during
the course of the Transfer negotiations and preparations. Accordingly, TSI and
SCP agree (a) to use its respective best efforts to prevent the unauthorized
disclosure of any confidential information concerning the other that was or is
disclosed during the course of such negotiations and preparations, and is
clearly designated in writing as confidential at the time of disclosure, and (b)
not to make use of or permit to be used any such confidential information other
than for the purpose of effectuating the Transfer. The obligations of this
Section 13.15 will not apply to information that (i) is or becomes part of the
public domain through no breach of this provision or other obligation of the
party seeking to claim public domain status for such information, (ii) is
disclosed by the disclosing party to third parties without restrictions on
disclosure, (iii) is received by the receiving party from a third party without
breach of a nondisclosure obligation to the other party or (iv) is required to
be disclosed by law, provided, however, that if such requirement is process of
court or other body or tribunal by or against a party to this Agreement, which
seeks disclosure of any confidential information by another party to this
Agreement, the party who has received such demand will notify the party whose
information is requested promptly upon receipt of such demand and will afford
such party of a reasonable opportunity to narrow or eliminate the scope of the
disclosure or to protect such confidential information upon disclosure. If this
Agreement is terminated, all copies of documents containing confidential
information shall be returned by the receiving party to the disclosing party.
13.16 Entire Agreement. This Agreement, the TSI Ancillary
----------------
Agreements, the SCP Ancillary Agreements and the Escrow Agreement and the
exhibits hereto and thereto constitute the entire understanding and agreement of
the parties hereto with respect to the subject matter hereof and thereof and
supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect hereto other than the Confidentiality Agreement and the
Prior Consulting Agreement. The express terms hereof control and supersede any
course of performance or usage of the trade inconsistent with any of the terms
hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
TSI INTERNATIONAL SOFTWARE LTD. SOFTWARE CONSULTING PARTNERS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxx By /s/ Xxxxxx Xxxxxxx
Name:___________________________________________ Name:__________________________________________
President and CEO President
Title:__________________________________________ Title:_________________________________________
SCP STOCKHOLDER
(ONLY WITH RESPECT TO ARTICLES 4, 12 AND 13)
By: /s/ Xxxxxx Xxxxxxx
Name:___________________________________________
Title:__________________________________________
[Signature Page for Asset Purchase Agreement]
