1
EXHIBIT 2
AGREEMENT
This Agreement ("Agreement") is made, entered into, and shall be
effective as of February 13, 2001 by and between Xxxxxx Xxxxxxxxx ("Employee")
and Axial Technology Holding AG, a Swiss registered company ("Axial").
RECITALS
A. Axial, Wyzdom Solutions Inc., a California corporation ("Wyzdom"),
and Tangram Enterprise Solutions Inc, a Pennsylvania corporation ("Tangram"),
have entered into an Asset Purchase Agreement dated February 13, 2001, as
amended by the First Addendum to the Asset Purchase Agreement dated as of
February 13, 2001 (the "Purchase Agreement"), which provides that Tangram shall
purchase certain assets from Wyzdom and Axial (collectively, the "Assets").
B. On the date of the closing of the transactions contemplated by the
Purchase Agreement which shall be deemed to be February 13, 2001 ("Closing
Date") except as otherwise provided in paragraph 3(j) below, Axial will be the
owner of Three Million (3,000,000) shares of common stock of Tangram.
C. Tangram wishes to employ the Employee to assist in the successful
integration and development of the Assets into Tangram's business. In order to
induce the Employee to accept employment (where employment shall be deemed to be
unbroken, full time, fully paid engagement with and by Tangram for Tangram's
business) with Tangram pursuant to an employment agreement ("Employment
Agreement") and in exchange for any right, title and interest in all of the
common stock of Wyzdom owned by the Employee, if any ("Wyzdom Stock"), Axial has
agreed to transfer ownership of One Hundred Seventy-five Thousand (175,000)
shares of Tangram common stock ("Tangram Stock") to the Employee subject to the
terms and conditions contained in this Agreement.
D. As additional consideration, Axial has agreed to pay to the Employee
a portion of any Earnout Payment (as that term is defined in the Purchase
Agreement) which is received by Axial, subject to the terms and conditions
contained in this Agreement. Terms not defined herein shall have the same
meaning as set forth in the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follow:
AGREEMENT
1. TANGRAM STOCK.
(a) Escrow. Upon transfer of the Tangram Stock from Tangram to Axial,
Tangram and Axial shall cause an escrow ("Escrow") to be opened with First
Chicago Title Company or other reputable agent ("Escrow Agent") and cause the
delivery to the Escrow Agent of the Tangram Stock. Axial shall execute an
irrevocable escrow agreement that is consistent with and
2
carries out the intent of this Agreement in the form set forth on Exhibit A
hereto and incorporated herein by reference ("Escrow Agreement").
(b) Transfer of Tangram Stock. In consideration of the Employee entering
into the Employment Agreement and transferring all right, title and interest in
the Wyzdom Stock owned by the Employee, if any, to Axial (which transfer shall
be effective as of the Closing Date), Axial hereby agrees to transfer ownership
of the Tangram Stock to the Employee as set forth in Exhibit B, attached hereto
and incorporated herein by reference, except as otherwise provided for in
Section 1(c) below. Employee acknowledges and agrees that, notwithstanding the
foregoing, transfer of ownership of the Tangram Stock to the Employee shall be
subject to vesting as set forth in Exhibit B. Employee agrees that Axial shall
be the beneficial owner of the Tangram Stock until such time as the applicable
Tangram Stock has vested. Axial shall cause the Tangram Stock which has vested
to be distributed out of the Escrow to the Employee as soon after the one (1)
year anniversary of the Closing Date as is practicable; provided that Employee's
ownership and receipt of the Tangram Stock shall be subject to (i) all of the
terms of the Escrow Agreement, and (ii) any and all applicable laws and
regulations, including securities laws and regulations; provided, however that
there shall not have occurred any indemnifiable loss or losses, in an aggregate
amount exceeding the Threshold Claim Amount for which Axial and Wyzdom have not
fully indemnified Buyer.
(c) Vesting and Forfeiture of Tangram Stock.
(i) Termination Without Cause. If the Employee's employment with
Tangram is terminated "Without Cause" (as defined in the Employment Agreement),
then all of the unvested Tangram Stock which would have vested through the end
of the applicable vesting period in which Employee is terminated but for the
termination in the applicable vesting period in which Employee is terminated,
shall immediately vest. Employee shall forfeit any and all right to all unvested
Tangram Stock.
(ii) Resignation/Termination For Cause. If the Employee resigns
or the Employee's employment with Tangram is terminated "For Cause" (as defined
in the Employment Agreement), then any and all unvested Tangram Stock which
would have vested through the end of the applicable vesting period in which
Employee is terminated but for the termination in the applicable vesting period
shall be forfeited on the Employee's last day of employment, and all of
Employee's right, title, and interest pursuant to this Agreement as to the
forfeited Tangram Stock shall terminate as of such date. If any Tangram Stock is
forfeited as provided for herein, Employee acknowledges and agrees that Axial
shall own all of the right, title, and interest in and to the forfeited Tangram
Stock.
(d) Grant of Proxy.
(i) Grant of Proxy. Subject to Section 1(d)(ii) below, Employee
grants to Axial, effective on the date of this Agreement, an irrevocable proxy
to vote all Tangram Stock on behalf of the Employee as Axial wishes in its sole
discretion and for all purposes.
(ii) Termination of Proxy. The proxy shall terminate upon such
time as all of the Tangram Stock is no longer subject to the Escrow Agreement.
2
3
2. EARNOUT PAYMENT.
(a) Right to Portion of Earnout Payment. Axial shall pay the Employee
three percent (3%) ("Earnout Share") of any Earnout Payment received by Axial
from Tangram; provided the Employee is employed by Tangram continuously and on
the last day of the twelve (12) month period ("Earnout Period") in which Axial
receives the right to the applicable Earnout Payment, subject to Section 2(b)
and (c) below.
(b) Payment of the Earnout Share. Within five (5) days of Axial
receiving any Earnout Payment pursuant to the Purchase Agreement, Axial shall
pay the Employee the applicable Earnout Share to which Employee is entitled
hereunder. Subject to Section 2(c) below, in the event that any Earnout Payment
is due to Axial pursuant to the Purchase Agreement but is reduced pursuant to
Section 1.06(b) of the Purchase Agreement, Axial shall pay the Employee an
amount equal to the Earnout Share as if such reduction of the applicable Earnout
Payment had not occurred and was received by Axial.
(c) Termination of Right to Receive Earnout Share.
(i) Without Cause. If the Employee's employment is terminated by
Tangram Without Cause, Axial shall pay to the Employee the Earnout Share which
would be due to the Employee for the Earnout Period for which Axial received the
applicable Earnout Payment, as though such Employee had still been employed by
Tangram on the last day of the applicable Earnout Period, but shall not be
entitled to and shall forfeit all of Employee's right to any and all Earnout
Share for any future Earnout Period.
(ii) Resignation/For Cause. If the Employee resigns or is
terminated For Cause during any Earnout Period, such Employee shall not be
entitled to and shall forfeit any and all right to any Earnout Share for that
particular Earnout Period and any and all future Earnout Periods.
3. MISCELLANEOUS PROVISIONS.
(a) Cooperation. All parties to this Agreement agree to perform any
acts, including executing any documents, that may be reasonably necessary or
advisable to fully carry out the provisions and intent of this Agreement.
(b) Specific Performance. The parties agree that in addition to all
other remedies available at law or in equity, the parties shall be entitled to
specific performance with respect to the Tangram Stock.
(c) Successors and Assigns. This Agreement shall be binding on the
parties and on their heirs, executors, administrators, representatives,
successors, and assigns.
(d) Severability. If any provision of this Agreement is held to be
unenforceable or invalid by a court of competent jurisdiction, such provision
shall be deemed severed from this Agreement without affecting the validity or
enforceability of the remainder of this Agreement.
3
4
(e) Governing Law. This Agreement shall be construed according to and
governed by the laws of Switzerland without regard to its conflict of law
provisions.
(f) Entire Agreement/Amendment. This Agreement and any exhibits hereto
constitute the entire agreement of the parties regarding the subject matter
hereof and supercede any prior or contemporaneous understandings or agreements,
whether written or oral, regarding the subject matter hereof. This Agreement may
be amended only by a written instrument executed by the parties hereto.
(g) Headings. The section headings herein are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.
(h) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all of which shall constitute one
integrated document.
(i) Independent Counsel and Drafting. This Agreement shall not be
construed against the drafting party as a result thereof. Rather, this Agreement
shall be given a reasonable interpretation in accordance with the plain meaning
of the terms and the parties' intent. Each of the parties hereto acknowledges
and agrees that such party has been represented, or has had the opportunity to
be represented, by separate and independent counsel and has entered into this
Agreement based on such party's independent judgment.
(j) Termination. In the event that the transactions contemplated by the
Purchase Agreement are not consummated including, without limit, the transfer of
beneficial ownership of the Tangram Stock from Tangram to Axial, this Agreement
shall be null, void and of no force or effect ab initio.
(k) Notice. Any notice or other communication hereunder shall be in
writing and shall be deemed given: (a) on the date of delivery if delivered to
the addressee personally; or (b) three (3) days after mailing, if mailed by
certified or registered mail, postage prepaid, return receipt requested; or (c)
by facsimile upon receipt of confirmation of transmission to the addresses set
forth below or such address as shall be designated by like written notice as
provided hereunder:
If to the Axial: Axial Technology Holding AG
Xxxxxxxxxxxxxxxxxxxxx 0
0000 Xxxxxxxxxxx Xxxxxxxxxxx
Attention: The Director
Facsimile: x0000 0000000
If to the Employee Xxxxxx Xxxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
4
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
AXIAL TECHNOLOGY HOLDING AG,
A SWISS REGISTERED COMPANY
By: /s/
-------------------------------------
Xxxxxx X. Xxxxx,
Director
EMPLOYEE:
/s/
-------------------------------------
[signature]
Xxxxxx Xxxxxxxxx
-----------------------------------------
[print name]
Address: 0000 Xxxxxxxxx Xxxx
--------------------------------
Xxxxxxx, XX 00000
-----------------------------------------
-----------------------------------------
5
6
EXHIBIT A
FORM OF ESCROW AGREEMENT
6
7
EXHIBIT B
VESTING SCHEDULE
1. Name of Employee: Xxxxxx Xxxxxxxxx
-----------------------------------------------------
2. Total number of common stock of Tangram granted to Employee: 90,000
----------
3. Cumulative Vesting Schedule:
a. Termination Without Cause.
--------------------------------------------------------------------------------------------------
TOTAL VESTED
TOTAL VESTED TOTAL VESTED BETWEEN TOTAL VESTED
BETWEEN FEBRUARY BETWEEN JUNE 1, SEPTEMBER 1, BETWEEN DECEMBER 1,
MAXIMUM SHARES 13, 2001 AND MAY 2001 AND AUGUST 2001 AND 2001 AND
AUTHORIZED 31, 2001 31, 2001 NOVEMBER 31, 2001 FEBRUARY 13, 2002
--------------------------------------------------------------------------------------------------
90,000 22,500 45,000 67,500 90,000
--------------------------------------------------------------------------------------------------
b. Resignation or Termination With Cause.
--------------------------------------------------------------------------------------------------
TOTAL VESTED TOTAL VESTED
TOTAL VESTED BETWEEN BETWEEN
BETWEEN JUNE 1, SEPTEMBER 1, DECEMBER 1, TOTAL VESTED
TOTAL VESTED 2001 AND 2001 AND 2001 AND AFTER
MAXIMUM SHARES ON OR BEFORE AUGUST 31, NOVEMBER 31, FEBRUARY 13, FEBRUARY 13,
AUTHORIZED MAY 31, 2001 2001 2001 2002 2002
--------------------------------------------------------------------------------------------------
90,000 None 22,500 45,000 67,500 90,000
--------------------------------------------------------------------------------------------------
7
