EXHIBIT 2.7
-----------
TRANSITION SERVICES AGREEMENT
between
MathSoft, Inc.,
MathSoft Corporate Holdings, Inc.,
and
MathSoft Engineering & Education, Inc.
Dated as of January 23, 2001
TRANSITION SERVICES AGREEMENT
-------------------------------
TRANSITION SERVICES AGREEMENT dated as of January 22, 2001, by and between
MATHSOFT, INC., a Massachusetts corporation ("Seller"), and MATHSOFT CORPORATE
------
HOLDINGS, INC., a Delaware corporation ("Buyer") and MATHSOFT ENGINEERING &
-----
EDUCATION, INC., a Delaware corporation (the "Company").
-------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller, Buyer and the Company are parties to a Stock Purchase
Agreement dated as of the date hereof (the "Stock Purchase Agreement") pursuant
------------------------
to which, among other matters, each of Seller and the Company has agreed to
provide or cause to be provided (in such capacity, the "Provider") to the other
--------
party (in such capacity, the "Recipient") certain transitional, administrative
---------
and support services on the terms set forth in this Agreement and the Appendices
hereto; and
WHEREAS, Seller and Buyer have agreed that Seller shall lease certain
employees to Buyer (listed on Exhibit A hereto and referred to as the "Leased
------
Employees") on the terms set forth in this Agreement and the Appendices hereto.
---------
NOW, THEREFORE, subject to the terms, conditions, covenants and provisions
of this Agreement, Seller, Buyer and the Company each mutually covenant and
agree as follows:
ARTICLE I
SERVICES PROVIDED
1.1 Transition Services. Upon the terms and subject to the conditions
--------------------
set forth in this Agreement, the Provider will provide each of those services
(hereinafter referred to individually as a "Transition Service", and
-------------------
collectively as the "Transition Services") set forth in the Appendices hereto
-------------------
(each of which Appendices is incorporated herein and made a part of this
Agreement) to the Recipient during the time period specified for each such
Transition Service in such Appendices (hereinafter referred to collectively as
the "Time Periods" for all of the Transition Services, and individually a "Time
------------ ----
Period" for a Transition Service).
------
1.2 Personnel. In providing the Transition Services, the
---------
Provider may, as it deems necessary or appropriate, (i) use the personnel of the
Provider or its affiliates, and (ii) employ the services of third parties to the
extent that, and subject to the condition that, such third party services are
routinely utilized to provide similar services to other businesses of the
Provider or are reasonably necessary for the efficient performance of any of
such Transition Services.
1.3 Representatives. Each of Seller and Buyer shall nominate a
---------------
representative to act as its primary contact person for the provision of all of
the Transition Services (collectively, the "Primary Coordinators"). The initial
--------------------
Primary Coordinator for the Seller is Xxxxxx X'Xxxxx and the initial Primary
Coordinator for Buyer is Xxxxx X. Xxxxxxx. Each Primary Coordinator may
designate one or more service coordinators for each specific Transition Service
(the "Service Coordinators"). Each party may treat an act of a Primary
---------------------
Coordinator or Service Coordinator of another party as being authorized by such
other party without inquiring behind such act or ascertaining whether such
Primary Coordinator or Service Coordinator had authority to so act, provided,
however, that no such Primary Coordinator or Service Coordinator has authority
to amend this Agreement. Seller and Buyer shall advise each other promptly (in
any case no more than five (5) business days) in writing of any change in the
Primary Coordinators and any Service Coordinator for a particular Transition
Service, setting forth the name of the Primary Coordinator or Service
Coordinator to be replaced and the name of the replacement, and certifying that
the replacement Primary Coordinator or Service Coordinator is authorized to act
for such party in all matters relating to this Agreement, in the case of a
Primary Coordinator or, in the case of a Service Coordinator, with respect to a
Transition Service. Each of the Seller and Buyer agree that all communications
relating to the provision of the Transition Services shall be directed to the
Service Coordinators for such Transition Service with copies to the Primary
Coordinators.
1.4 Level of Transition Services.
-------------------------------
(a) The Transition Services shall be of substantially the same
type, quality and utilization levels, and shall be provided with substantially
the same degree of care and diligence, as such services had been previously
provided. Nothing in this Agreement shall require the Provider to favor the
businesses of the Recipient over its own businesses or those of any of its
affiliates.
(b) Subject to Section 1.4(a), the Provider shall not be required
to provide the Recipient with extraordinary levels of Transition Services,
special studies, training, or the like or the advantage of systems, equipment,
facilities, training, or improvements procured, obtained or made after the
Closing Date by the Provider.
(c) In addition to being subject to the terms and conditions of
this Agreement for the provision of the Transition Services, the Recipient
agrees that the Transition Services provided by third parties shall be subject
to the terms and conditions of any agreements between the Provider and such
third parties, which agreements shall be on substantially the same terms and
conditions as the Provider would enter into with such third parties for its own
account. The Provider shall consult with the Recipient concerning the terms and
conditions of any such agreements to be entered into, or proposed to be entered
into, with third parties after the date hereof.
1.5 Limitation of Liability, Indemnity.
-------------------------------------
(a) The parties hereto acknowledge and agree that the Transition
Services are provided by the Provider: (i) at the request of the Recipient in
order to accommodate them following the Closing, (ii) at the Provider's actual
out-of-pocket cost and with no expectation of profit being made by the Provider
thereon, and (iii) with the expectation that the Provider is not assuming any
financial or operational risks, including those usually assumed by a service
provider, except for those risks explicitly set forth herein. Accordingly, the
Recipient agrees that, absent gross negligence or willful misconduct, the
Provider, its subsidiaries and affiliates and their directors, officers,
employees, representatives, consultants and agents (collectively, the "Provider
Parties") shall not be liable for any direct, indirect, special, incidental or
consequential damages, including lost profits or savings, whether or not such
damages are foreseeable, or for any third-party claims relating to the
Transition Services or the Provider's performance under this Agreement.
2
(b) Without limitation of the foregoing, in the absence of gross
negligence or willful misconduct on the part of any Provider Party, and whether
or not any Provider Party is negligent, the Provider Parties shall not be liable
for any claims, liabilities, damages, losses, costs, expenses (including, but
not limited to, settlements, judgments, court costs and reasonable attorneys'
fees), fines and penalties, arising out of any actual or alleged injury, loss or
damage of any nature whatsoever arising out of or based upon the transition
Services or the use of the Transition Services by the Recipient.
(c) The Recipient agrees to indemnify and hold the Provider and
any Provider Parties harmless from and against any damages, liabilities, losses,
taxes, fines, penalties, costs and expenses (each, a "Damage" and, collectively,
the "Damages") (including, without limitation, reasonable fees of counsel) of
any kind or nature whatsoever (whether or not arising out of third-party claims
and including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by any of them arising out of or
based upon the Transition Services or the use of the Transition Services by the
Recipient in the absence of gross negligence or willful misconduct on the part
of any Provider Party.
(d) The Provider agrees to indemnify and hold the Recipient and
its subsidiaries and affiliates and persons serving as officers, directors,
partners or employees thereof harmless from and against any Damages (including,
without limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) which may be sustained
or suffered by any of them arising out of or based upon any gross negligence or
willful misconduct of any Provider Party in connection with the Transition
Services.
(e) Nothing in this Agreement shall prevent a party from seeking
recourse against the other party for any breach of this Agreement.
1.6 Force Majeure. Any failure or omission by a party in the
--------------
performance of any obligation under this Agreement shall not be deemed a breach
of this Agreement or create any liability, if the same arises from any cause or
causes beyond the control of such party, including, but not limited to, the
following, which, for purposes of this Agreement shall be regarded as beyond the
control of each of the parties hereto: acts of God, fire, storm, flood,
earthquake, governmental regulation or direction, acts of the public enemy, war,
rebellion, insurrection, riot, invasion, strike or lockout; provided however
that such party shall resume the performance whenever such causes are removed.
1.7 Modification of Procedures.
----------------------------
(a) Subject to the procedure set forth in this Section 1.7 to the
extent applicable, the Provider may make changes from time to time in its
standards and procedures for performing the Transition Services, provided that
any such change shall all be made with respect to all or a significant portion
of Provider's business. Notwithstanding the foregoing sentence, unless required
by law, the Provider shall not implement any substantial changes affecting the
Recipient unless:
3
(i) the Provider has furnished the Recipient reasonable
notice, but in no event less than 15 days;
(ii) the Provider gives the Recipient a reasonable period of
time (but in no event less than 15 days) for the Recipient (x) to accept, and
adapt its operations to accommodate, such changes or (y) to reject the proposed
changes. In the event the Recipient rejects a proposed change this Agreement
shall terminate with respect to the relevant Transition Service.
(b) During the term of this Agreement, the Recipient shall, within
a reasonable period of time after such plans are available, provide the Provider
with a plan identifying any changes in the Recipient's business that may affect
the provision of the Transition Services in order for the Provider to provide
the Transition Services to the Recipient; provided, however, that the Provider
shall not be required to alter the method in which it provides the Transition
Services or increase the level of such Services in any material matter except as
expressly provided herein; provided, however, that the failure of the Recipient
to provide such notice shall not alter or diminish the Provider's obligations to
provide the Transition Services on the terms set forth herein except where the
failure to provide notice has materially increased the Provider's cost or burden
to provide such Transition Service.
(c) As of the date hereof, the Provider represents that it does
not have any plan or intention to make any material changes in its standards and
procedures for performing the Transition Services.
1.8 No Obligation to Continue to Use Services. The Recipient shall not
-----------------------------------------
have any obligation to continue to use any of the Transition Services and may
terminate any Transition Service from the Transition Services that the Provider
thereof is providing to the Recipient by giving the Provider notice thereof in
accordance with the notice provisions herein and in the Appendix relating to
such Transition Service.
1.9 Provider Access. To the extent reasonably required for personnel
----------------
of the Provider to perform the Transition Services, the Recipient shall provide
personnel of the Provider with access during normal business hours (to the
extent practicable) to its equipment, office space, plants, telecommunications
and computer equipment and systems, and any other areas and equipment.
1.10 Recipient Obligations. During the term of this Agreement, the
----------------------
Recipient shall (i) comply with any reasonable instructions provided by the
Provider that are necessary for the Provider to adequately provide the
Transition Services; (ii) comply with all applicable standards and procedures
applicable to such Transition Service which are in the manner generally applied
by the Provider in its business; and (iii) promptly report any operational or
system problem affecting the provision of any Transition Services to the
Provider. Notwithstanding the foregoing, any failure by the Recipient to
perform any of the foregoing shall not alter or diminish the Provider's
obligations to provide the Transition Services on the terms set forth herein
except where the failure to so perform has materially increased the Provider's
cost or burden to provide such Transition Service, or where such failure
prevents the provision of the Transition Service in substantially the same
manner as previously provided.
4
1.11 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE PROVIDER
----------
MAKES NO REPRESENTATIONS OR WARRANTIES IN RESPECT OF THE TRANSITION SERVICES,
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
ARTICLE II
COMPENSATION
2.1 Consideration. As consideration for the Transition Services, the
-------------
Recipient shall pay to the Provider the amount specified for each such
Transition Service as set forth in the Appendix relating to such Transition
Service.
2.2 Invoices. After the end of each month, the Provider, together with
--------
its affiliates or subsidiaries providing Transition Services, will submit a
single itemized invoice to the Recipient for all Transition Services provided to
the Recipient during such month that are to be paid monthly, unless earlier
payment is required by the Appendices hereto. All invoices shall be sent to the
attention of the Primary Coordinator at the address set forth in Section 5.3
hereof or to such other address as the Recipient shall have specified by notice
in writing to the Provider.
2.3 Payment of Invoices. (a) Payment of all invoices in respect of a
---------------------
Transition Service shall be made by check or electronic funds transmission in
U.S. Dollars, without any offset or deduction of any nature whatsoever (except
to the extent disputed in good faith), within five (5) business days of the
invoice date unless otherwise specified in the Appendix relating to such
Transition Service. All payments shall be made to the account designated by the
Provider to the Recipient.
(b) If any payment is not paid when due (except to the extent
disputed in good faith, the details of which the Recipient has indicated to the
Provider in writing with reasonable specificity) and the Recipient does not make
such payment within five (5) business days of receiving notice from the
Provider, the Provider shall have the right, without any liability to the
Recipient, or anyone claiming by or through the Recipient, to, following an
additional five (5) business days prior written notice, immediately cease
providing any or all of the Transition Services provided by the Provider to the
Recipient and/or to terminate this Agreement, which right may be exercised by
the Provider in its sole and absolute discretion. Notwithstanding the above, the
Provider shall not cease providing any Transition Service if such lack of
payment is due to a good faith dispute, the details of which the Recipient has
indicated to the Provider in writing with reasonable specificity.
5
ARTICLE III
CONFIDENTIALITY
3.1 Obligation. Except if compelled by a court of proper jurisdiction,
----------
each party and its subsidiaries shall not use or permit the use of (without the
prior written consent of the other party) and shall keep, and shall cause its
consultants and advisors to keep, confidential all information (other than the
information that is in the public domain) concerning the other party and its
subsidiaries and affiliates received pursuant to or in connection with this
Agreement.
3.2 Care and Inadvertent Disclosure. With respect to any confidential
--------------------------------
information, each party agrees as follows:
(a) it shall use the same degree of care in safeguarding said
information as it uses to safeguard its own information which must be held
in confidence; and
(b) upon the discovery of any inadvertent disclosure or
unauthorized use of said information, or upon obtaining notice of such a
disclosure or use from any other party, it shall take all necessary actions
to prevent any further inadvertent disclosure or unauthorized use.
ARTICLE IV
TERM
4.1 Term. This Agreement shall become effective on the Closing Date
----
and shall remain in force until the expiration of the longest Time Period
specified in any Appendix hereto (the "Expiration Date"), unless all of the
---------------
Transition Services are terminated by the Recipient in accordance with Section
1.8 above, or this Agreement is terminated under Section 2.3(b) prior to the
Expiration Date.
4.2 Termination of Obligations. The Recipient specifically agrees and
---------------------------
acknowledges that all obligations of the Provider to provide each Transition
Service shall immediately cease upon the expiration of the Time Period for such
Transition Service, and the Provider's obligations to provide all of the
Transition Services hereunder shall immediately cease upon the termination of
this Agreement. The Recipient shall bear sole responsibility for instituting
permanent services, or obtaining replacement services, in respect of any
Transition Service terminated in accordance with the provisions hereof, and the
Provider shall bear no liability for the Recipient's failure to implement or
obtain such service or for any difficulties in transitioning from the Transition
Service to such permanent or replacement service. Notwithstanding the
foregoing, in connection with the transition to one or more permanent service
providers (a "Transition"), the Provider shall cooperate with all reasonable
----------
requests of the Recipient in order to effect such Transition in a timely and
cost-effective manner.
4.3 Survival of Certain Obligations. Without prejudice to the survival
-------------------------------
of the other agreements of the parties, the following obligations shall survive
the termination of this Agreement: (a) the obligations of each party under
Sections 1.5 and 1.11, Articles III, IV and V, and (b) the Provider's right to
receive reimbursement for the Transition Services provided by it hereunder
provided in Section 2.1 above incurred prior to the effective date of
termination.
6
ARTICLE V
MISCELLANEOUS
5.1 Complete Agreement; Construction. This Agreement, including the
----------------------------------
Appendices and Attachments hereto, shall constitute the entire agreement between
the parties with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings with respect to such subject
matter. In the event of any inconsistency between this Agreement and any
Appendix hereto, the Appendix shall prevail.
5.2 Counterparts. This Agreement may be executed in one or more
------------
counterparts. all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
5.3 Notices. All notices and other communications hereunder shall be
-------
in writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and will be deemed given on the date on which such notice is received:
To Seller:
MathSoft, Inc.
0000 Xxxxxxxx Xxxxxx X. #000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxxx X'Xxxxx, Chief Financial Officer
With a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Xx.
7
To Buyer or the Company:
MathSoft Corporate Holdings, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx
With a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attn: H. Xxxxx Xxxxxx, P.C.
5.4 Waivers. The failure of any party to require strict performance by
-------
any other party of any provision in this Agreement will not waive or diminish
that party's right to demand strict performance thereafter of that or any other
provision hereof.
5.5 Amendments. This Agreement may not be modified or amended except
----------
by an agreement in writing signed by each of the parties hereto.
5.6 Assignment. This Agreement shall not be assignable, in whole or in
----------
part, directly or indirectly; provided, however, Recipient may assign this
Agreement to any successor to its business, whether by merger, reorganization or
otherwise, provided that in connection with such transaction those persons and
entities that controlled the Recipient prior to such transaction, control the
Recipient following such transaction. Any attempt to assign any rights or
obligations arising under this Agreement in contravention with this paragraph
shall be null and void ab initio.
5.7 Successors and Assigns. The provisions to this Agreement shall be
-----------------------
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
5.8 Third Party Beneficiaries. This Agreement is solely for the
---------------------------
benefit of the parties hereto and should not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.
5.9 Title and Headings. Titles and headings to sections herein are
--------------------
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
5.10 Appendices and Attachments. The Appendices and Attachments shall
----------------------------
be construed with and as an integral part of this Agreement to the same extent
as if the same had been set forth verbatim herein.
8
5.11 GOVERNING LAW. This Agreement shall be governed by and construed
---------------
in accordance with the laws of the Commonwealth of Massachusetts (without regard
to its conflicts of law doctrines). Each of the parties hereto irrevocably and
unconditionally consents to the exclusive jurisdiction of the state and federal
courts location in Boston, Massachusetts and irrevocably waives any right to a
trial by jury or any objection based upon lack of personal jurisdiction or
venue.
5.12 Severability. In the event any one or more of the provisions
-------------
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
5.13 Relationship of Parties. Nothing in this Agreement shall be
--------------------------
deemed or construed by the parties or any third party as creating a partnership
or the relationship of principal and agent or joint venturer between the
parties, it being understood and agreed that no provision contained herein, and
no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship of buyer and seller of services nor be
deemed to vest any rights, interests or claims in any third parties.
5.14 Definitions. Capitalized terms used herein or in the Appendices
-----------
and not otherwise defined herein shall have the meanings assigned to such terms
in the Stock Purchase Agreement.
9
IN WITNESS WHEREOF, the parties hereto have caused this Transition Services
Agreement to be executed the day and year first above written.
MATHSOFT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: Chief Executive Officer
and President
-------------------------------
MATHSOFT CORPORATE HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: President
-------------------------------
MATHSOFT ENGINEERING & EDUCATION, INC.
By: /s/ Xxxxxx X. X'Xxxxx
----------------------------------
Name: Xxxxxx X. X'Xxxxx
--------------------------------
Title: Vice President
-------------------------------
