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EXHIBIT 2.01
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BROADBASE SOFTWARE, INC.,
SOLDIER ACQUISITION CORP.
AND
SERVICESOFT, INC.
SEPTEMBER 18, 2000
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TABLE OF CONTENTS
ARTICLE 1 DEFINITION OF CERTAIN TERMS....................................................2
ARTICLE 2 PLAN OF MERGER.................................................................3
2.1 The Merger...................................................................3
2.2 Escrow.......................................................................6
2.3 Securities Law Compliance....................................................7
2.4 Tax and Accounting Aspects of the Merger.....................................8
2.5 Antitrust....................................................................8
2.6 Further Assurances...........................................................8
ARTICLE 3 ADDITIONAL AGREEMENTS..........................................................8
3.1 Public Announcement..........................................................8
3.2 Fees and Expenses............................................................8
3.3 Resale Restrictions..........................................................9
3.4 Integration Matters..........................................................9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SERVICESOFT..................................9
4.1 Organization and Good Standing...............................................9
4.2 Subsidiaries and Guarantees..................................................9
4.3 Capitalization..............................................................10
4.4 Power, Authorization and Non-Contravention..................................11
4.5 No Violation of Charter Documents, Contracts or Laws........................12
4.6 Documents and Disclosures...................................................12
4.7 Servicesoft Financial Statements............................................13
4.8 Litigation..................................................................14
4.9 Taxes.......................................................................14
4.10 Title to Properties........................................................15
4.11 Absence of Certain Changes or Events.......................................16
4.12 Intellectual Property......................................................18
4.13 Compliance with Laws.......................................................20
4.14 Agreements and Commitments.................................................20
4.15 Employees..................................................................22
4.16 Environmental Matters......................................................25
4.17 Certain Transactions and Agreements........................................26
4.18 Accounts Receivable........................................................26
4.19 Board of Directors, Officers and Key Personnel.............................27
4.20 Insurance..................................................................27
4.21 Voting Arrangements........................................................27
4.22 Ownership of Shares of Broadbase Capital Stock.............................27
4.23 Information Supplied.......................................................27
4.24 Servicesoft Financial Projections..........................................28
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BROADBASE AND NEWCO.........................28
5.1 Organization and Good Standing..............................................28
5.2 Capitalization..............................................................28
5.3 Power, Authorization and Non-Contravention..................................29
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5.4 No Violation of Charter Documents, Contracts or Laws........................30
5.5 Sec Filings.................................................................30
5.6 Broadbase Financial Statements..............................................31
5.7 Litigation..................................................................31
5.8 Absence of Certain Changes or Events........................................31
5.9 Intellectual Property.......................................................32
5.10 Compliance with Laws.......................................................33
5.11 Information Supplied.......................................................33
5.12 Accuracy of Disclosure.....................................................34
ARTICLE 6 SERVICESOFT PRE-CLOSING COVENANTS.............................................34
6.1 Access to Information.......................................................34
6.2 Advice of Changes...........................................................34
6.3 Conduct of Business.........................................................34
6.4 Prospectus/Proxy Statement..................................................37
6.5 Stockholder Approval........................................................38
6.6 No Solicitation.............................................................40
6.7 Regulatory Approvals........................................................41
6.8 Necessary Consents..........................................................42
6.9 Blue Sky Laws...............................................................42
6.10 Servicesoft Dissenting Shares..............................................42
6.11 Litigation.................................................................42
6.12 Certain Employee Benefits..................................................42
6.13 Notification of Employee Problems..........................................42
6.14 Certain Agreements.........................................................42
6.15 Servicesoft Affiliates.....................................................42
6.16 Satisfaction of Closing Conditions.........................................43
6.17 Conversion of Servicesoft Preferred Stock and Servicesoft Warrants.........43
6.18 Confirmation of Equity Interests...........................................43
ARTICLE 7 BROADBASE PRE-CLOSING COVENANTS...............................................43
7.1 Advice of Changes...........................................................44
7.2 Conduct of Business.........................................................44
7.3 Regulatory Approvals........................................................45
7.4 Amendment of Certificate of Incorporation...................................45
7.5 Broadbase Stockholders' Approval............................................45
7.6 Litigation..................................................................46
7.7 Certain Employee Benefits...................................................46
7.8 Satisfaction of Conditions Precedent........................................47
7.9 Blue Sky Laws...............................................................47
7.10 Nasdaq Listing.............................................................47
7.11 Board Representation.......................................................47
7.12 Bridge Loan................................................................47
7.13 Section 16.................................................................48
7.14 Director and Officer Insurance.............................................48
7.15 Necessary Consents.........................................................48
7.16 Director and Officer Indemnification.......................................48
7.17 No Solicitation............................................................48
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ARTICLE 8 CLOSING MATTERS...............................................................49
8.1 The Closing.................................................................49
8.2 Exchange of Certificates....................................................49
8.3 Dissenting Shares...........................................................51
8.4 Employee Plans..............................................................52
ARTICLE 9 CONDITIONS TO OBLIGATIONS OF SERVICESOFT......................................52
9.1 Accuracy of Representations and Warranties..................................52
9.2 Covenants...................................................................52
9.3 Absence of Material Adverse Effect..........................................52
9.4 Compliance with Law.........................................................52
9.5 Government Consents.........................................................52
9.6 Form S-4....................................................................52
9.7 Requisite Approvals.........................................................53
9.8 Opinion of Broadbase's Counsel..............................................53
9.9 ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Compliance................................................53
9.10 Election of Servicesoft Designees to the Board of Directors of Broadbase...53
9.11 Absence of Litigation......................................................53
ARTICLE 10 CONDITIONS TO OBLIGATIONS OF BROADBASE.......................................53
10.1 Accuracy of Representations and Warranties.................................53
10.2 Covenants..................................................................53
10.3 Absence of Material Adverse Effect.........................................53
10.4 Compliance with Law........................................................54
10.5 Government Consents........................................................54
10.6 Form S-4...................................................................54
10.7 Requisite Approvals........................................................54
10.8 Conversion of Preferred Stock..............................................54
10.9 Exercise or Redemption of Warrants.........................................54
10.10 Termination of Rights.....................................................54
10.11 Third-Party Consents; Assignments; Other Documents........................54
10.12 Dissenting Shares.........................................................54
10.13 Resignations..............................................................54
10.14 Escrow Agreement..........................................................54
10.15 Opinion of Servicesoft's Counsel..........................................55
10.16 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance..............................................55
10.17 Affiliates Letter.........................................................55
ARTICLE 11 TERMINATION OF AGREEMENT.....................................................55
11.1 Right to Terminate.........................................................55
11.2 Termination Procedures.....................................................56
11.3 Continuing Obligations.....................................................56
11.4 Termination Fee............................................................56
ARTICLE 12 SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING
COVENANTS ......................................................................57
12.1 Survival of Representations................................................57
12.2 Agreement to Indemnify.....................................................57
12.3 Limitations on Liability; Exceptions.......................................58
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12.4 Survival of Claims.........................................................58
12.5 No Indemnity for Corporate Agents..........................................58
12.6 Servicesoft Stockholders' Representative...................................59
ARTICLE 13 MISCELLANEOUS................................................................61
13.1 Entire Agreement...........................................................61
13.2 Assignment; Binding Upon Successors and Assigns............................61
13.3 No Third Party Beneficiaries...............................................61
13.4 No Joint Venture...........................................................61
13.5 Construction of Agreement..................................................61
13.6 Severability...............................................................61
13.7 Section Headings...........................................................61
13.8 Amendment, Extension and Waivers...........................................61
13.9 Governing Law..............................................................62
13.10 Dispute Resolution........................................................62
13.11 Other Remedies............................................................62
13.12 Notices...................................................................62
13.13 Time is of the Essence....................................................63
13.14 Effect of Disclosure Letters..............................................64
13.15 Counterparts..............................................................64
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") is entered into as
of September 18, 2000, by and among Broadbase Software, Inc., a Delaware
corporation ("BROADBASE"), Servicesoft, Inc., a Delaware corporation
("SERVICESOFT"), and Soldier Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Broadbase ("NEWCO").
RECITALS
A. The parties intend that, on the terms and subject to the conditions
of this Agreement, Newco will merge with and into Servicesoft in a reverse
triangular merger (the "MERGER"), with Servicesoft to be the surviving
corporation of the Merger, all pursuant to the terms and conditions of this
Agreement and a Certificate of Merger substantially in the form of Exhibit A
(the "CERTIFICATE OF MERGER") and the applicable provisions of the laws of the
State of Delaware. Upon the effectiveness of the Merger, all the outstanding
capital stock of Servicesoft ("SERVICESOFT STOCK") will be converted into
capital stock of Broadbase, and Broadbase will assume all outstanding options to
purchase shares of capital stock of Servicesoft, as provided in this Agreement
and the Certificate of Merger.
B. The Boards of Directors of Broadbase, Servicesoft and Newco have
determined that the Merger is in the best interests of, their respective
companies and stockholders, have approved and declared advisable this Agreement,
the Merger and the other transactions contemplated by this Agreement and,
accordingly, have agreed to effect the Merger provided for herein upon the terms
and subject to the conditions of this Agreement.
C. Concurrently with the execution of this Agreement, and as a condition
and inducement for the parties' willingness to enter into this Agreement: (i)
all executive officers and directors of each of Broadbase and Servicesoft, and
each of the stockholders of Servicesoft and Broadbase listed on Schedule 1 are
entering into a Voting Agreement and Irrevocable Proxy in substantially the form
attached hereto as Exhibit B (the "VOTING Agreement"), pursuant to which such
officers and directors of Broadbase and Servicesoft and such stockholders of
Broadbase and Servicesoft will agree irrevocably to vote all shares of Broadbase
or Servicesoft capital stock, as applicable, beneficially owned by such
stockholders, in favor of the Merger and the transactions contemplated by the
Merger, and (ii) each of the employees of Servicesoft listed on Schedule 2 shall
have executed and delivered to Broadbase an employment and non-competition
agreement in substantially the form attached hereto as Exhibit C (the
"EMPLOYMENT AGREEMENT"), to be effective upon the "Effective Time" (as defined
in Section 2.1).
D. Following the execution of this Agreement, Broadbase will advance to
Servicesoft, on an as-needed basis, bridge loans of up to an aggregate of $15
million for the purpose of financing operating expenses incurred in the ordinary
course of business, pursuant to the terms set forth in the form of convertible
promissory note attached hereto as Exhibit D.
E. Prior to the "Closing Date" (as defined in Section 8.1), and as a
condition and inducement to Broadbase's willingness to enter into this
Agreement, Broadbase and the "Representative" (as defined in Section 2.2(d))
shall execute and deliver an Escrow Agreement in substantially the form attached
hereto as Exhibit E (the "ESCROW AGREEMENT"), to be effective upon consummation
of the Merger, pursuant to which certain shares of Broadbase common stock issued
in the Merger will be withheld by Broadbase and deposited in escrow as security
for the indemnification obligations provided for in Article 12.
F. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE"), and to cause the Merger to qualify as a
reorganization under Section 368(a) of the Code.
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In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as
follows:
1. DEFINITIONS OF CERTAIN TERMS
"ACQUISITION" means any transaction or series of related
transactions (i) that results in the holders of record of an entity's capital
stock immediately prior to such transaction or transactions holding less than
fifty percent (50%) of the voting power of such entity immediately after such
transaction or transactions, including the acquisition of such entity by another
entity and any reorganization (other than a reincorporation of such entity under
the laws of the state of Delaware), merger, consolidation or share exchange, or
(ii) that results in the sale of all or substantially all of the assets of such
entity.
"ANCILLARY AGREEMENTS" means either of or both the "Servicesoft
Ancillary Agreements" and the "Broadbase Ancillary Agreements" as the context
requires.
"BROADBASE ANCILLARY AGREEMENTS" has the meaning set forth in
Section 5.3(a).
"BROADBASE DISCLOSURE LETTER" means that disclosure letter dated
as of the date hereof and provided by Broadbase and Newco to Servicesoft
simultaneously with the execution and delivery of this Agreement.
"BROADBASE OPTION" has the meaning set forth in Section
2.1(a)(iii).
"BROADBASE STOCKHOLDER" means a holder of shares of Broadbase's
capital stock, including Broadbase common stock.
"CONTRACT" means, with respect to any person, any written or
oral agreement, contract, understanding, arrangement, instrument, note,
guaranty, indemnity, representation, warranty, deed, assignment, power of
attorney, purchase order, work order, commitment, covenant, obligation, promise
or undertaking of any nature to which such person is a party or by which its
properties or assets may be bound.
"CONVERSION RATIO" means the ratio of Exchange Shares into which
each share of Servicesoft Common Stock shall be converted pursuant to Section
2.1(a).
"ESCROW AGENT" has the meaning set forth in Section 2.2(a).
"ESCROW PERIOD" means that time period beginning at the
Effective Time and ending at 12:01 a.m. on the first anniversary of the Closing
Date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE SHARES" means the shares of Broadbase common stock to
be issued to Servicesoft Stockholders in the Merger pursuant to Section 2.1.
"GAAP" means U.S. generally accepted accounting principles,
applied on a consistent basis.
"HSR ACT" has the meaning set forth in Section 2.5.
"KNOWLEDGE" when used with respect to any entity, means the
actual knowledge of the executive officers of such entity, after due inquiry.
For these purposes, "executive officer" will include the president, chief
executive officer, chief financial officer, any managing director, any vice
president, and the general counsel of such entity.
"MATERIAL ADVERSE EFFECT" when used in connection with an entity
means any change, event, circumstance or effect that is materially adverse to
the business, employees, assets (including
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intangible assets), capitalization, financial condition, operations or results
of operations of such entity taken as a whole with its subsidiaries, unless such
entity can sustain the burden of proving that any such change, event,
circumstance or effect results from (i) changes in general economic conditions,
or (ii) changes affecting the industry generally in which the entity operates
which do not affect such entity disproportionately.
"SERVICESOFT ANCILLARY AGREEMENTS" has the meaning set forth in
Section 4.4(a).
"SERVICESOFT CANADA" means Servicesoft Technologies Canada, a
corporation organized under the laws of Canada.
"SERVICESOFT CANADA COMMON STOCK" means the shares of common
stock of Servicesoft Canada which are exchangeable on a one-for-one basis into
shares of Servicesoft Common Stock.
"SERVICESOFT CANADA PREFERRED STOCK" means the shares of
preferred stock of Servicesoft Canada which are exchangeable on a one-for-one
basis into shares of Servicesoft Series H Preferred Stock.
"SERVICESOFT COMMON STOCK" means the shares of common stock of
Servicesoft, par value $.01 per share.
"SERVICESOFT CONTRACT" means any Contract: (a) to which
Servicesoft is a party; or (b) by which Servicesoft or any of its assets is
bound or subject to any obligation.
"SERVICESOFT DISCLOSURE LETTER" means that disclosure letter
dated as of the date hereof and provided by Servicesoft to Broadbase and Newco
simultaneously with the execution and delivery of this Agreement.
"SERVICESOFT OPTION" has the meaning set forth in Section
4.3(b).
"SERVICESOFT PREFERRED STOCK" means the shares of Series H
Convertible Preferred Stock of Servicesoft, par value $.01, shares of Series I
Convertible Preferred Stock of Servicesoft, par value $.01, shares of Series J
Convertible Preferred Stock of Servicesoft, par value $.01, one share of Series
X Special Voting Preferred Stock, par value $.01, and one share of Series Y
Special Voting Preferred Stock, par value $.01.
"SERVICESOFT SERIES H PREFERRED STOCK" means the shares of
Series H Convertible Preferred Stock of Servicesoft, par value $.01.
"SERVICESOFT STOCKHOLDER" means a holder of shares of
Servicesoft's capital stock, including Servicesoft common stock.
"SERVICESOFT WARRANT" has the meaning set forth in Section
4.3(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
2. PLAN OF MERGER
2.1 The Merger. The Certificate of Merger will be filed with the
Secretary of State of the State of Delaware as soon as practicable after the
"Closing" (as defined in Section 8.1). The effective time of the Merger (the
"EFFECTIVE TIME") shall be the time of filing of the Certificate of Merger
unless otherwise specified in the Certificate of Merger. On the terms and
subject to the conditions of this Agreement and the Certificate of Merger, at
the Effective Time, Newco will be merged with and into Servicesoft (such
remaining entity, as appropriate, the "SURVIVING CORPORATION") in a
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statutory merger pursuant to the Certificate of Merger and in accordance with
applicable provisions of Delaware Law as follows:
(a) Conversion of Servicesoft Securities.
(i) Conversion of Servicesoft Shares. On the
terms and subject to the conditions of this Agreement, at the Effective Time,
(i) each share of Servicesoft Common Stock and Servicesoft Preferred Stock that
is issued and outstanding immediately prior to the Effective Time, including
shares of Servicesoft Common Stock or Servicesoft Preferred Stock issued or
issuable upon the exchange of Servicesoft Canada Common Stock and Servicesoft
Canada Preferred Stock, but excluding any Dissenting Shares (as defined in
Section 2.1(a)(ii)) and any shares of Servicesoft Series X Preferred Stock and
Servicesoft Series Y Preferred Stock, will, by virtue of the Merger and at the
Effective Time without further action on the part of any holder thereof (except
as expressly provided herein) be converted into and represent the right to
receive 1.4404 Exchange Shares and (ii) each share of Servicesoft Series X
Preferred Stock and Servicesoft Series Y Preferred Stock that is issued and
outstanding immediately prior to the Effective Time shall be redeemed for a
redemption price of $1.00.
(ii) Dissenting Shares. Holders of shares of
Servicesoft's capital stock who have duly complied with all requirements for
perfecting stockholders' rights of appraisal, as set forth in Section 262 of the
Delaware General Corporation Law ("DELAWARE Law"), shall be entitled to their
rights under the Delaware Law with respect to such shares ("DISSENTING SHARES").
(iii) Assumption and Conversion of Servicesoft
Options and Restricted Stock.
(A) Effective at the Effective Time,
Broadbase will assume all outstanding Servicesoft Options, and each of
the Servicesoft Options shall by its terms be converted into an option
to purchase that number of shares of Broadbase common stock (a
"BROADBASE OPTION") which equals the number of shares of Servicesoft
Common Stock issuable pursuant to such Servicesoft Option immediately
prior to the Effective Time, multiplied by the Conversion Ratio, rounded
down to the nearest whole share. The per share exercise price for each
Broadbase Option will equal the per share exercise price of each such
Servicesoft Option immediately prior to the Effective Time divided by
the Conversion Ratio, rounded up to the nearest whole cent. No cash will
be paid in lieu of fractional shares which are rounded down pursuant to
this Section 2.1(a)(iii)(A). No Broadbase Options or Exchange Shares
shall be issued with respect to Servicesoft Options that are canceled
subsequent to the date of this Agreement and prior to the Effective
Time.
(B) Continuation Of Vesting And Repurchase
Rights. If any shares of capital stock of Servicesoft ("SERVICESOFT
CAPITAL STOCK") that are outstanding immediately prior to the Effective
Time are unvested or are subject to a repurchase option, risk of
forfeiture or other condition providing that such shares may be
forfeited or repurchased by Servicesoft, upon any termination of a
stockholder's employment, directorship or other relationship with
Servicesoft (and/or any affiliate of Servicesoft), as the case may be,
under the terms of any restricted stock purchase agreement or other
agreement with Servicesoft, then the Exchange Shares issued upon the
conversion of such shares of Servicesoft Capital Stock in the Merger
will, subject to compliance with applicable laws, continue to be
unvested and subject to the same repurchase options, risks of forfeiture
or other conditions following the Effective Time, and the certificates
representing such Exchange Shares may accordingly be marked with
appropriate legends noting such repurchase options, risks of forfeiture
or other conditions. Servicesoft shall take all actions that may be
necessary to ensure that, from and after the
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Effective Time, Broadbase is entitled to exercise any such repurchase
option or other right set forth in any such restricted stock purchase
agreement or other agreement.
(C) Terms of Assumption of Stock Options and
Restricted Stock; Vesting. The term, exercisability, vesting schedule,
status as an "incentive stock option" under Section 422 of the Code, if
applicable, and all other terms of each Broadbase Option will be the
same in all material respects as the corresponding Servicesoft Option,
and no material number of options or shares of restricted stock will be
accelerated as a result of the Merger, or actual or constructive
termination of employment following the Merger, except as set forth in
Item 2.1(a)(iii)(C) of the Servicesoft Disclosure Letter. Except as set
forth in Item 2.1(a)(iii)(C) of the Servicesoft Disclosure Letter, no
vesting of shares subject to Servicesoft Options, warrants or restricted
stock will be accelerated as a result of the Merger or any event
associated with the Merger and if any holder of Servicesoft Options,
warrants or restricted stock has acceleration provisions that would be
triggered by the Merger or any event associated with the Merger,
Servicesoft shall cause each such holder to waive such acceleration
provisions except for those Servicesoft Options, warrants and restricted
stock listed in Item 2.1(a)(iii)(C) of the Servicesoft Disclosure
Letter. Continuous employment with Servicesoft will be credited to
holders of Broadbase Options received upon exchange of Servicesoft
Options pursuant to Section 2.1(a)(iii)(A) for purposes of determining
the vesting of such Broadbase Options from and after the Effective Time.
(iv) Servicesoft Warrants and Preferred Stock.
(A) Assumption and Conversion of Servicesoft
Warrants. Effective at the Effective Time, Broadbase will assume all
outstanding Servicesoft Warrants (as defined in Section 4.3(b)), and
each of the Servicesoft Warrants shall by its terms be converted into a
warrant to purchase that number of shares of Broadbase common stock (a
"BROADBASE WARRANT") which equals the number of shares of Servicesoft
Common Stock issuable pursuant to such Servicesoft Warrant immediately
prior to the Effective Time, multiplied by the Conversion Ratio, rounded
down to the nearest whole share. The per share exercise price for each
Broadbase Warrant will equal the per share exercise price of each such
Servicesoft Warrant immediately prior to the Effective Time divided by
the Conversion Ratio, rounded up to the nearest whole cent. No cash will
be paid in lieu of fractional shares which are rounded down pursuant to
this Section 2.1(a)(iv). No Broadbase Warrants or Exchange Shares shall
be issued with respect to Servicesoft Warrants that are canceled
subsequent to the date of this Agreement and prior to the Effective
Time.
(B) Preferred Stock. Prior to the Closing,
Servicesoft shall use all reasonable efforts to cause each holder of
shares of Servicesoft Preferred Stock to convert such shares of
Servicesoft Preferred Stock, effective as of and contingent upon the
consummation of the Merger, into Servicesoft Common Stock in accordance
with the terms of the applicable instruments and agreements governing
such Servicesoft Preferred Stock.
(v) Adjustment for Capital Changes. If prior to
the Merger, Broadbase or Servicesoft (A) recapitalizes either through a split-up
of the outstanding shares of Broadbase or Servicesoft capital stock into a
greater number, or through a combination of such outstanding shares into a
lesser number, (B) reorganizes, reclassifies or otherwise changes such
outstanding shares into the same or a different number of shares of other
classes or into securities of another company (other than through a split-up or
combination of shares provided for in the previous clause), or (C) declares a
dividend on its outstanding shares payable in shares or securities convertible
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into shares, the calculation of the Conversion Ratio and the Escrow Shares (as
defined in Section 2.2(b)) will be adjusted appropriately so as to maintain the
proportionate interests of the Servicesoft Stockholders and the holders of
shares of Broadbase capital stock at the time of such recapitalization.
(vi) Fractional Shares. No fractional shares of
Broadbase common stock will be issued in connection with the Merger. However, in
lieu thereof, each Servicesoft Stockholder who would otherwise be entitled to
receive a fraction of a share of Broadbase common stock (excluding with respect
to Servicesoft Options) will receive from Broadbase, together with the Exchange
Shares to be delivered to such Servicesoft Stockholder, pursuant to Section
8.2(a)(i), an amount of cash equal to the product obtained by multiplying (A)
the closing price of a share of Broadbase common stock on the Nasdaq National
Market on the last trading day before the Effective Time by (B) the fraction of
a share of Broadbase common stock that such holder would otherwise have been
entitled to receive.
(b) Effects of the Merger. At the Effective Time: (i)
Newco will merge with and into Servicesoft, Servicesoft will be the Surviving
Corporation pursuant to the terms of the Certificate of Merger and the separate
existence of Newco will thereupon cease; (ii) each share of Servicesoft Common
Stock and each Servicesoft Option outstanding immediately prior to the Effective
Time will be converted as provided in this Section 2.1, subject to the escrow
provisions of Section 2.2; (iii) each share of common stock of Newco that is
issued and outstanding immediately prior to the Effective Time will, by virtue
of the Merger and without further action on the part of the sole stockholder of
Newco, be converted into and become one share of common stock of the Surviving
Corporation (and the shares of Surviving Corporation into which the shares of
Newco common stock are so converted shall be the only shares of Servicesoft
Common Stock that are issued and outstanding immediately after the Effective
Time); (iv) the certificate of incorporation and bylaws of Servicesoft shall be
amended and restated to contain provisions in substantially the form set forth
in the certificate of incorporation and bylaws of Newco; (v) the sole director
and officers of Newco immediately prior to the Effective Time will become the
sole director and officers of the Surviving Corporation; (vi) each share of
Servicesoft's capital stock held by Servicesoft or owned by Newco, Broadbase or
any direct or indirect wholly-owned subsidiary of Servicesoft or of Broadbase
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof; and (vii) the Merger will, from and after the
Effective Time, have all of the effects provided by applicable law.
2.2 Escrow
(a) Escrow Agent. State Street Bank and Trust Company of
California, N.A., or such other escrow agent selected by Broadbase prior to the
Closing and reasonably acceptable to Servicesoft (the "ESCROW AGENT") shall
hold, release and perform other tasks related to the Escrow Shares pursuant to
the provisions of the Escrow Agreement.
(b) Escrow Shares. Broadbase shall withhold from the
number of Exchange Shares to be issued to each Servicesoft Stockholder pursuant
to Section 2.1(a)(i), upon surrender of such Stockholder's Servicesoft
Certificates, that number of Exchange Shares equal to ten percent (10%) of the
Exchange Shares to be issued to such Servicesoft Stockholder pursuant to Section
2.1(a)(i), rounded to the nearest whole share (collectively, the "ESCROW
SHARES"). As soon as practicable after the Effective Time, and in accordance
with the provisions of the Escrow Agreement, Broadbase will deposit with the
Escrow Agent certificates representing the Escrow Shares, issued in the name of
each Servicesoft Stockholder according to the number of Escrow Shares withheld
from such Servicesoft Stockholder hereunder, together with related stock
transfer powers.
For the purposes of this Agreement and the Escrow
Agreement, Escrow Shares will be deemed to have a per share value equal to the
average of the closing prices of Broadbase Common Stock for the 10 trading days
ending 2 trading days prior to the Closing (provided that such
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price shall be subject to adjustment to reflect any capital change in Broadbase
of the type referred to in Section 2.1(a)(v), whether occurring at or after the
Effective Time, and Broadbase shall promptly provide the Escrow Agent with
written notice of such capital change) as provided in the Escrow Agreement.
(c) Escrow Period. The Escrow Agent will hold the Escrow
Shares and any dividends and distributions on the Escrow Shares as collateral
for Servicesoft's indemnification obligations, and shall release such Escrow
Shares and any dividends or distributions thereon in accordance with the terms
of the Escrow Agreement and Article 12.
(d) Consent to Escrow Agreement. In the event that the
Merger is approved by the Servicesoft Stockholders as provided herein, the
Servicesoft Stockholders shall, without any further act of any Servicesoft
Stockholder, be deemed to have consented to and approved (i) the use of the
Escrow Shares as collateral for Servicesoft's indemnification obligations under
Article 12 in the manner set forth in the Escrow Agreement, (ii) the appointment
of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as the representative of the Servicesoft Stockholders (the
"REPRESENTATIVE") under the Escrow Agreement and as the attorney-in-fact and
agent for and on behalf of each Servicesoft Stockholder (other than holders of
Dissenting Shares), and the taking by the Representative of any and all actions
and the making of any decisions required or permitted to be taken by him under
the Escrow Agreement (including, without limitation, exercising the power to:
authorize delivery to Broadbase of Escrow Shares in satisfaction of claims by
Broadbase; agreeing to, negotiating, entering into settlements and compromises
of and demanding arbitration and complying with orders of courts and awards of
arbitrators with respect to such claims; resolving any claim made pursuant to
Section 12.2; and taking all actions necessary in the judgment of the
Representative for the accomplishment of the foregoing) and (iii) to all of the
other terms, conditions and limitations in the Escrow Agreement.
2.3 Securities Law Compliance.
(a) Issuance of Exchange Shares in Exchange for
Servicesoft Common Stock. The offer, sale and issuance of the Exchange Shares to
be issued in the Merger shall be registered under the Securities Act on Form S-4
promulgated thereunder. As promptly as practicable after the date of this
Agreement, Broadbase and Servicesoft shall prepare and file with the SEC a Form
S-4 registration statement (the "FORM S-4") together with the prospectus/proxy
statement included therein (the "PROSPECTUS/PROXY STATEMENT") and any other
documents required by the Securities Act or the Exchange Act in connection with
the Merger. Each of Broadbase and Servicesoft shall use all reasonable efforts
to have the Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. Broadbase shall also take any action required to
be taken under any applicable state securities or "Blue Sky" laws in connection
with the issuance of the Exchange Shares in the Merger. Servicesoft shall
furnish to Broadbase all information concerning Servicesoft and the Servicesoft
Stockholders as may be reasonably requested in connection with any action
contemplated by this Section 2.3(a). Broadbase shall furnish to Servicesoft all
information concerning Broadbase as may be reasonably requested in connection
with any action contemplated by this Section 2.3(a).
(b) Issuance of Exchange Shares Pursuant to Exercises of
Exchange Options. Broadbase shall cause the Exchange Shares that are issuable
upon exercise of the Broadbase Options to be registered under the Securities Act
on Form S-8 or any other applicable form within 15 days after the Closing Date.
Broadbase will use reasonable efforts to maintain the effectiveness of such
registration statement (and maintain the current status of the prospectus or
prospectuses incorporated therein) so long as the Broadbase Options (or shares
issued upon exercise thereof) remain outstanding.
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(c) Resale of Exchange Shares. Holders of Exchange
Shares will be wholly responsible for compliance with all federal and state
securities laws regarding the sale, transfer or other disposition of such
shares.
2.4 Tax and Accounting Aspects of the Merger.
(a) Tax Free Reorganization. The parties intend to adopt
this Agreement as a tax-free plan of reorganization and to consummate the Merger
in accordance with the provisions of Section 368(a)(1)(A) and Section
368(a)(2)(E) of the Code. The parties to this Agreement hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
(b) Accounting Treatment. The parties intend that the
Merger be treated as a "purchase" for accounting purposes.
2.5 Antitrust. Each of Broadbase and Servicesoft will promptly
prepare and file the applicable notices (if any) required to be filed by it
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"),
and comply promptly with any requests to it from the Federal Trade Commission or
United States Department of Justice for additional information.
2.6 Further Assurances. Servicesoft agrees that if, at any time
before or after the Effective Time, Broadbase considers or is advised that any
further deeds, assignments or assurances are reasonably deemed necessary or
desirable by Broadbase to vest, perfect or confirm in Broadbase title to any
property or rights of Servicesoft or the Surviving Corporation as provided
herein, Broadbase, the Surviving Corporation and their respective proper
officers and directors are hereby authorized by Servicesoft to execute and
deliver all such proper deeds, assignments and assurances and do all other
things necessary or reasonably deemed by Broadbase to be desirable to vest,
perfect or confirm title to such property or rights in Broadbase and otherwise
to carry out the purpose of this Agreement, in the name of Servicesoft or
otherwise. The officers and directors of Broadbase, Servicesoft, and the
Surviving Corporation will take all such other lawful and necessary or desirable
action to carry out the purposes of this Agreement.
3. ADDITIONAL AGREEMENTS
3.1 Public Announcement. Broadbase and Servicesoft will issue a
press release approved by both parties announcing the Merger as soon as
practicable following the execution of this Agreement. Thereafter, Broadbase and
Servicesoft may issue such press releases, and make such other disclosures
regarding the Merger, as they determine are required under applicable securities
laws or regulatory rules provided that such press releases or other disclosures
regarding the Merger shall not be made without the prior consent and approval of
both parties with respect to the content of such releases and disclosures and
with respect to the decision to release such press releases or disclosures.
Servicesoft will take all reasonable precautions to prevent any trading in the
securities of Broadbase by officers, directors, employees and agents of
Servicesoft, having knowledge of any material information regarding Broadbase
provided hereunder, including, without limitation, the existence of the
transactions contemplated by this Agreement until the information in question
has been publicly disclosed.
3.2 Fees and Expenses. Each party will bear its respective
expenses and fees of its own accountants, attorneys, investment bankers and
other professionals incurred with respect to this Agreement and the transactions
contemplated hereby. Any such fees and expenses of Servicesoft in excess of
$500,000, excluding the fees and expenses of investment bankers, ("EXCESS
EXPENSES"), shall be paid by the Servicesoft Stockholders. All other fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Broadbase and
Servicesoft shall
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share equally all fees and expenses, other than attorneys' and accountants fees
and expenses, incurred in relation to the printing and filing with the SEC of
the Form S-4 (including financial statements and exhibits) and any amendments or
supplements thereto) and the Proxy Statement/Prospectus (including any
preliminary materials related thereto).
3.3 Resale Restrictions. No "Servicesoft Affiliate" (as such
term is defined in Section 6.15) will, directly or indirectly, sell, transfer,
exchange, pledge or otherwise dispose of, or in any other way reduce such
Servicesoft Stockholder's risk of ownership or investment in, or make any offer
or enter into any agreement relating to any of the foregoing with respect to any
shares of the capital stock of Broadbase (including, without limitation, the
Exchange Shares and any additional shares of capital stock of Broadbase acquired
by such Servicesoft Stockholder, whether upon exercise of a stock option or
otherwise), or any option or other right to purchase any shares of capital stock
of Broadbase, during the period beginning on the date of this Agreement and
ending on the date that is 90 days after the Closing Date. Notwithstanding the
foregoing, in the event Broadbase enters into an agreement with respect to a
Broadbase Acquisition (as such term is defined in Section 7.2(g)), the
restrictions described in the previous sentence shall terminate on the date that
is two days after the record date for a Broadbase stockholders' meeting to
consider such Broadbase Acquisition, except with respect to a Servicesoft
Affiliate who is at such time an Affiliate (as defined in the Securities Act) of
Broadbase. Any such Servicesoft Affiliate shall be subject to any and all
restrictions on transfer that are applicable to all officers, directors and
other affiliates of Broadbase, whether by contract or pursuant to Broadbase
policy.
3.4 Integration Matters. Servicesoft and Broadbase will
cooperate in good faith to identify and, to the extent practicable, to resolve
matters regarding the orderly integration of their respective operations.
4. REPRESENTATIONS AND WARRANTIES OF SERVICESOFT
Except as set forth in the Servicesoft Disclosure Letter
delivered to Broadbase and Newco herewith, (which, subject to Section 13.14,
shall specifically refer to the Sections of this Agreement to which the specific
Items of the Servicesoft Disclosure Letter therein constitute an exception),
Servicesoft hereby represents and warrants to Broadbase as follows:
4.1 Organization and Good Standing. Servicesoft and each
Subsidiary (as defined in Section 4.2) is a corporation duly organized, validly
existing and, where applicable, in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority, and all requisite qualifications to do business as a foreign
corporation, to conduct its business in the manner in which its business is
currently being conducted, except where the failure to be so organized, existing
or in good standing or to have such power, authority or qualifications would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Servicesoft. Except as set forth on Item 4.1 of the
Servicesoft Disclosure Letter, Servicesoft has delivered or made available to
Broadbase a true and correct copy of its certificate of incorporation and bylaws
and similar governing instruments of each Subsidiary, each as amended to date
(collectively, the "SERVICESOFT CHARTER DOCUMENTS"), and each such instrument is
in full force and effect. Neither Servicesoft nor any Subsidiary is in violation
of any of the provisions of the Servicesoft Charter Documents. Servicesoft has
delivered or made available to Broadbase all proposed or considered amendments
to the Servicesoft Charter Documents.
4.2 Subsidiaries and Guarantees. Except for the subsidiaries of
Servicesoft listed in Item 4.2 of the Servicesoft Disclosure Letter
(collectively the "SUBSIDIARIES" and each a "SUBSIDIARY"), Servicesoft does not
have any subsidiaries or any interest, direct or indirect, in any corporation,
partnership, joint venture or other business entity. Neither Servicesoft nor any
Subsidiary has agreed or is obligated to make, or is bound by any written
agreement, contract, subcontract, lease, letter of intent,
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instrument, note, option, warranty, purchase order, license, sublicense,
insurance policy, or benefit plan as in effect as of the date hereof pursuant to
which it is required to make any future investment in or capital contribution to
any other entity. Neither Servicesoft, nor any Subsidiary, is a general partner
of any general partnership, limited partnership or other entity. Item 4.2 of the
Servicesoft Disclosure Letter indicates the jurisdiction of organization of each
entity listed therein and Servicesoft's direct or indirect equity interest
therein.
4.3 Capitalization.
(a) Authorized/Outstanding Capital Stock. As of the
close of business on September 18, 2000, the authorized capital stock of
Servicesoft consists solely of 30,000,000 shares of Servicesoft Common Stock and
16,450,002 shares of Servicesoft Preferred Stock, 8,000,000 of which are
designated as Series H Convertible Preferred Stock, 4,450,000 are designated as
Series I Convertible Preferred Stock, 4,000,000 are designated as Series J
Convertible Preferred Stock, 1 is designated as Series X Special Preferred Stock
and 1 is designated as Series Y Special Preferred Stock. As of the date hereof,
there are issued and outstanding 4,257,439 shares of Servicesoft Common Stock,
7,364,796 shares of Servicesoft's Series H Preferred Stock (each of which is
convertible into one share of Servicesoft common stock), 3,982,271 shares of
Servicesoft's Series I Preferred Stock (each of which is convertible into one
share of Servicesoft common stock), 3,481,478 shares of Servicesoft's Series J
Preferred Stock (each of which is convertible into one share of Servicesoft
common stock), 1 share of Servicesoft's Series X Special Preferred Stock, and 1
share of Servicesoft's Series Y Special Preferred Stock. Except as set forth on
Item 4.3(a) of the Servicesoft Disclosure Letter, all issued and outstanding
shares of Servicesoft Common Stock and Servicesoft Preferred Stock have been
duly authorized and validly issued, are fully paid and nonassessable, are not
subject to any right of rescission, are not subject to preemptive rights or
rights of first refusal by statute, Servicesoft's certificate of incorporation
or bylaws, or any agreement or document to which Servicesoft is a party or by
which it is bound, and have been offered, issued, sold and delivered by
Servicesoft in compliance with all registration or qualification requirements
(or applicable exemptions therefrom) of applicable federal and state securities
laws. A list of all holders of Servicesoft capital stock and the number of
shares held by each as of the date hereof is set forth in Item 4.3(a) of the
Servicesoft Disclosure Letter, to be updated as of the Closing Date.
(b) Options/Warrants/Rights. As of the close of business
on September 18, 2000: (i) options to purchase 4,191,331 shares of Servicesoft
Common Stock (the "SERVICESOFT OPTIONS") have been issued and are outstanding;
(ii) warrants to purchase 20,782 shares of Servicesoft Common Stock have been
issued and are outstanding; and (iii) warrants to purchase 63,025 shares of
Servicesoft Series H Preferred Stock have been issued and are outstanding, (the
warrants in (ii) and (iii) are collectively referred to as the "SERVICESOFT
WARRANTS"). A list of all holders of Servicesoft Options and Servicesoft
Warrants is set forth in Item 4.3(b) of the Servicesoft Disclosure Letter. Item
4.3(b) of the Servicesoft Disclosure Letter lists for each person who holds
Servicesoft Options or Servicesoft Warrants, the exercise price for each such
Servicesoft Option or Servicesoft Warrant, the number of shares or other
securities covered by each such Servicesoft Option or Servicesoft Warrant, the
term of exercisability of each such Servicesoft Option or Servicesoft Warrant,
the vesting schedule, the extent each such Servicesoft Option or Servicesoft
Warrant is vested as of the date hereof and whether the vesting of such
Servicesoft Option or Servicesoft Warrant will be accelerated as a result of the
Merger or upon any other event. In addition, Item 4.3(b) of the Servicesoft
Disclosure Letter lists all holders of shares of Servicesoft restricted stock
and for each such person, the number of shares of Servicesoft Restricted Stock
held, the terms of Servicesoft's right to repurchase such Servicesoft Restricted
Stock, the schedule on which such rights lapse and whether such repurchase
rights arise in full or in part as a result of the Merger or upon any other
event. Servicesoft has delivered to Broadbase accurate and
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complete copies of all plans pursuant to which Servicesoft has ever granted
stock options or warrants. Except as set forth in Section 4.3(a), this Section
4.3(b) and in Item 4.3(b) of the Servicesoft Disclosure Letter, there is no: (i)
outstanding preemptive right, right of first refusal, stock appreciation right,
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire from Servicesoft or, to Servicesoft's knowledge, from
affiliates of Servicesoft, any shares of the capital stock or other securities
of Servicesoft; (ii) outstanding security, instrument or obligation issued by
Servicesoft or controlled affiliates of Servicesoft, that is or may become
convertible into or exchangeable for any shares of the capital stock or other
securities of Servicesoft; (iii) stockholders' rights plan (or similar plan
commonly referred to as a "poison pill") or Contract under which Servicesoft or
any successor of Servicesoft is or may become obligated to sell or otherwise
issue any shares of its capital stock or any other securities; (iv) Contract to
which Servicesoft is a party relating to the voting or registration of or
restricting any person from purchasing, selling, pledging or otherwise disposing
of (or granting any option or similar right with respect to) any shares of
Servicesoft Common Stock; (v) liability for dividends accrued but unpaid; or
(vi) condition or circumstance, to Servicesoft's knowledge, that likely would
directly or indirectly give rise to or provide a basis for the assertion of a
claim by any person to the effect that such person is entitled to acquire or
receive any shares of capital stock or other securities of Servicesoft,
including but not limited to promises to issue or grant securities of
Servicesoft or to recommend to Servicesoft's board of directors to issue or
grant securities of Servicesoft.
(c) Except as set forth in Item 4.3(c) of the
Servicesoft Disclosure Letter, Servicesoft is not under any obligation to
register under the Securities Act the resale of any of its presently outstanding
securities or any securities that may be subsequently issued.
(d) To Servicesoft's knowledge: (i) no Servicesoft
Stockholder has claimed any interest in any additional shares of capital stock
of Servicesoft, or any options, warrants or other securities of Servicesoft,
except for the number of shares of Servicesoft Common Stock or Servicesoft
Preferred Stock which such person is shown to be the owner of in Item 4.3(a) and
any Servicesoft Options and Servicesoft Warrants which such person is shown to
be the owner of in Item 4.3(b); and (ii) no third party who is not listed in
Item 4.3(a) or Item 4.3(b) has made, or has, any claim of entitlement to receive
any shares of the capital stock of Servicesoft, any warrants or other rights to
acquire any capital stock of Servicesoft or any other securities of Servicesoft.
4.4 Power, Authorization and Non-Contravention.
(a) Servicesoft and each Subsidiary has the corporate
power and authority to: (i) carry on its business as now conducted; (ii) own,
operate and lease its properties in the manner in which its properties are
currently owned, used and leased and in the manner in which its properties are
proposed to be owned, used and leased; (iii) perform its obligations under all
Servicesoft Contracts, and (iv) enter into and perform its obligations under
this Agreement and all agreements to which Servicesoft is or will be a party
that are required to be executed pursuant to or in connection with this
Agreement (the "SERVICESOFT ANCILLARY AGREEMENTS"). The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Servicesoft, subject only to the approval and adoption of this Agreement and the
approval of the Merger by Servicesoft's stockholders (the "SERVICESOFT
STOCKHOLDER APPROVAL") and the filing of the Certificate of Merger pursuant to
Delaware Law. The affirmative vote of the holders of (i) a majority of the
outstanding shares of Servicesoft Common Stock, Series H Preferred Stock, Series
I Preferred Stock, Series J Preferred Stock, Series X Special Preferred Stock
and Series Y Special Voting Preferred Stock, all voting together as a single
class, and (ii) a majority of the outstanding shares of Servicesoft Series H
Preferred Stock, Series I Preferred Stock, Series J Preferred Stock and Series Y
Special Voting Preferred Stock, all voting together as a single class, is
sufficient for the Servicesoft
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Stockholder Approval, and no other approval of any holder of any securities of
Servicesoft is required in connection with the consummation of the transactions
contemplated hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality, foreign or
domestic ("GOVERNMENTAL ENTITY") or other person, is required to be obtained or
made by Servicesoft in connection with the execution and delivery of this
Agreement or the consummation of the Merger, except for: (i) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which
Servicesoft is qualified to do business, (ii) the filing of the Form S-4 and
Prospectus/Proxy Statement with the SEC, each in accordance with the Securities
Act and the Exchange Act, and the effectiveness of the Form S-4, (iii) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal, foreign and state
securities (or related) laws and the HSR Act, and the securities or antitrust
laws of any foreign country, and (iv) such other consents, authorizations,
filings, approvals and registrations which if not obtained or made would not be
material to Servicesoft, Broadbase or the Surviving Corporation or prevent,
alter or materially delay the consummation of the Merger or any of the other
transactions contemplated hereby.
(c) The Servicesoft Stockholders that have executed
Voting Agreements collectively own shares of Servicesoft Common Stock and
Servicesoft Preferred Stock representing, in the aggregate, voting power
sufficient to approve the Merger.
(d) This Agreement and the Servicesoft Ancillary
Agreements are, or when executed and delivered by Servicesoft and the other
parties thereto will be, valid and binding obligations of Servicesoft
enforceable against Servicesoft in accordance with their respective terms,
except as to the effect, if any, of (i) applicable bankruptcy and other similar
laws affecting the rights of creditors generally, (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies and (iii)
the enforceability of provisions requiring indemnification; provided, however,
that the Certificate of Merger and the Servicesoft Ancillary Agreements will not
be effective until the earlier of the Effective Time and the date provided for
therein.
4.5 No Violation of Charter Documents, Contracts or Laws. Except
as set forth in Item 4.5 of the Servicesoft Disclosure Letter, neither the
execution and delivery of this Agreement or any Servicesoft Ancillary Agreement,
nor the consummation of the transactions provided for herein or therein, will
conflict with, or (with or without notice or lapse of time, or both) result in a
termination, breach, impairment or violation of: (a) any provision of the
certificate of incorporation, bylaws or other charter documents of Servicesoft
or any Subsidiary, as currently in effect; (b) any material Servicesoft
Contract; or (c) any federal, state, local or foreign judgment, writ, decree,
order, statute, rule or regulation applicable to Servicesoft or its assets or
properties, or any Subsidiary or its assets or properties. The consummation of
the Merger and succession by Broadbase to all material rights, licenses,
franchises, leases and agreements of Servicesoft and each Subsidiary will not
require the consent of any third party.
4.6 Documents and Disclosures.
(a) Servicesoft has provided to Broadbase, or to counsel
for Broadbase, for examination true and complete copies of all documents and
information listed in the Servicesoft Disclosure Letter or other exhibits called
for by this Agreement, including, without limitation, the following: (i) copies
of Servicesoft's certificate of incorporation, bylaws and other charter
documents, as currently in effect; (ii) Servicesoft's minute book containing all
records of all proceedings, consents, actions and meetings of the Stockholders,
the Board of Directors and any committees of the Board of Directors of
Servicesoft; (iii) Servicesoft's stock ledger; (iv) all material permits, orders
and consents
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issued by any regulatory agency with respect to Servicesoft; and (v) to the
extent available, all of the foregoing documents and information with respect to
the Subsidiaries.
(b) The books of account, stock records, minute books
and other records of Servicesoft: (i) are in all material respects true and
complete and (ii) have been maintained in accordance with reasonable business
practices. The books of account of Servicesoft are stated in reasonable detail
and accurately and fairly reflect in all material respects the transactions and
dispositions of the assets of Servicesoft as required by GAAP. Servicesoft has
devised and maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (a) transactions are executed in accordance
with management's general or specific authorization; (b) transactions are
recorded as necessary (i) to permit preparation of financial statements in
conformity with GAAP, and (ii) to maintain accountability for assets; and (c)
the amount recorded for assets on the books and records of Servicesoft and its
Subsidiaries is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(c) Servicesoft has furnished to Broadbase a true and
complete copy of each registration statement and other filing filed with the SEC
by Servicesoft (collectively, the "SERVICESOFT SEC DOCUMENTS"). Except as set
forth in Item 4.6(c) of the Servicesoft Disclosure Letter, as of their
respective dates, the Servicesoft SEC Documents: (i) were prepared in accordance
with the requirements of the Securities Act and the rules and regulations of the
SEC thereunder applicable to such Servicesoft SEC Documents; and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except to
the extent corrected prior to the date of this Agreement by a subsequently filed
Servicesoft SEC Document. Neither Servicesoft, nor any Subsidiary is required to
file any forms, reports or other documents with the SEC.
4.7 Servicesoft Financial Statements. Each of the consolidated
financial statements (including, in each case, any related notes thereto)
contained in the registration statement on Form S-1 (Registration Statement No.
333-30476), as amended by Amendment No. 4 thereto, filed with the SEC on August
25, 2000 (the "SERVICESOFT S-1") (such financial statements, the "SERVICESOFT
FINANCIAL STATEMENTS"): (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto; (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto); and (iii)
fairly presented the consolidated financial position of Servicesoft and its
Subsidiaries as at the respective dates thereof and the consolidated results of
Servicesoft's and its Subsidiaries' operations and cash flows for the periods
indicated, except that the unaudited interim financial statements may not
contain footnotes and were or are subject to normal and recurring year-end
adjustments. Except as set forth in Item 4.7 of the Servicesoft Disclosure
Letter, since Servicesoft's June 30, 2000 balance sheet (the "SERVICESOFT
BALANCE SHEET", with June 30, 2000 hereinafter referred to as the "SERVICESOFT
BALANCE SHEET DATE") contained in the Servicesoft S-1, neither Servicesoft nor
any Subsidiary has any liabilities (absolute, accrued, contingent or otherwise)
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of Servicesoft and the Subsidiaries taken
as a whole, except for (i) liabilities incurred since the Servicesoft Balance
Sheet Date in the ordinary course of business consistent with past practices,
(ii) liabilities incurred pursuant to this Agreement or with the prior written
consent of Broadbase, and (iii) contingent liabilities that are not probable and
that would not be required under GAAP to be set forth, reserved against or
disclosed on a balance sheet. There has been no change in Servicesoft's
accounting policies, except as described in the notes to the Servicesoft
Financial Statements.
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4.8 Litigation. Except as set forth in Item 4.8 of the
Servicesoft Disclosure Letter, there is no action, suit, arbitration, mediation,
proceeding, claim or, to Servicesoft's knowledge, investigation pending against
Servicesoft or any Subsidiary, nor, to Servicesoft's knowledge, are any of the
foregoing threatened against Servicesoft or any Subsidiary before any court,
administrative agency or arbitrator that, if determined adversely to Servicesoft
or any Subsidiary, may reasonably be expected to have a Material Adverse Effect
on Servicesoft. There is no judgment, decree, injunction or ruling of an
administrative agency or arbitrator outstanding against Servicesoft or any
Subsidiary, except as may reasonably be expected to have a Material Adverse
Effect on Servicesoft or any Subsidiary of Servicesoft. To the knowledge of
Servicesoft, there is no basis for any person, firm, corporation or entity to
assert a claim against Servicesoft or any Subsidiary, or Broadbase as successor
in interest to Servicesoft, based upon: (a) ownership or rights to ownership of
any shares of Servicesoft common stock or other securities, (b) any rights as a
Servicesoft securities holder, including, without limitation, any option,
warrant or other right to acquire any Servicesoft securities, any preemptive
rights or any rights to notice or to vote, or (c) any rights under any agreement
between Servicesoft and any Servicesoft securities holder or former Servicesoft
securities holder in such holder's capacity as such. As of the date hereof,
there is no action, suit, proceeding, claim, arbitration or investigation
pending as to which Servicesoft has received notice of assertion against
Servicesoft, which in any manner challenges or seeks to prevent, enjoin, alter
or materially delay any of the transactions contemplated by this Agreement.
4.9 Taxes.
(a) Except as set forth on Item 4.9(a) of the
Servicesoft Disclosure Letter, Servicesoft and each Subsidiary has timely filed
all federal, state, local and foreign, returns, estimates, information
statements and reports ("RETURNS") relating to "Taxes" (as defined below)
required to be filed by or on behalf of Servicesoft and each Subsidiary with any
"Tax" (as defined below) authority, such Returns are true, correct and complete
in all material respects, and Servicesoft and each Subsidiary has paid all Taxes
required to be paid, has made all necessary estimated tax payments, and has no
liability for taxes in excess of the amount so paid, except to the extent
adequate reserves have been established in the Financial Statements or, with
respect to taxes that are not yet due on or prior to the date of this Agreement
and which have become due thereafter, adequate reserves have been established by
Servicesoft prior to the Closing.
(b) Servicesoft and each Subsidiary has withheld all
federal and state income Taxes, Taxes pursuant to the Federal Insurance
Contribution Act ("FICA"), Taxes pursuant to the Federal Unemployment Tax Act
("FUTA") and other Taxes required to be withheld, except such Taxes which are
not material to Servicesoft.
(c) Except as set forth in Item 4.9(c) of the
Servicesoft Disclosure Letter, neither Servicesoft nor any Subsidiary has been
delinquent in the payment of any Tax nor is there any Tax deficiency
outstanding, or to the knowledge of Servicesoft, proposed or assessed against
Servicesoft or any of its subsidiaries, nor has Servicesoft or any Subsidiary
executed any currently effective waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax.
(d) Except as set forth in Item 4.9(d) of the
Servicesoft Disclosure Letter, no audit or other examination of any Return of
Servicesoft or any Subsidiary by any Tax authority is presently in progress, nor
has Servicesoft or any Subsidiary been notified of any request for such an audit
or other examination.
(e) No adjustment relating to any Returns filed by
Servicesoft or any Subsidiary has been proposed in writing formally or
informally by any Tax authority to Servicesoft or any Subsidiary or any
representative thereof.
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(f) Except as set forth in Item 4.9(f) of the
Servicesoft Disclosure Letter, to Servicesoft's knowledge, neither Servicesoft
nor any Subsidiary has any liability for unpaid Taxes which has not been accrued
for or reserved on the Servicesoft Balance Sheet in accordance with GAAP,
whether asserted or unasserted, contingent or otherwise, other than any
liability for unpaid Taxes that may have accrued since the Servicesoft Balance
Sheet Date in connection with the operation of the business of Servicesoft and
the Subsidiaries in the ordinary course.
(g) Except as set forth in Item 4.9 of the Servicesoft
Disclosure Letter, there is no agreement, plan or arrangement to which
Servicesoft or any Subsidiary is a party, including this Agreement and the
agreements entered into in connection with this Agreement, covering any employee
or former employee of Servicesoft or any Subsidiary, individually or
collectively, would be reasonably likely to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of
the Code. There is no contract, agreement, plan or arrangement to which the
Servicesoft is a party or by which it is bound to compensate any individual for
excise Taxes paid pursuant to Section 4999 of the Code.
(h) Neither Servicesoft nor any Subsidiary has filed any
consent agreement under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by Servicesoft.
(i) Neither Servicesoft nor any Subsidiary is party to
or has any obligation under any Tax-sharing, Tax indemnity or Tax allocation
agreement or arrangement.
(j) Except as may be required as a result of the Merger,
Servicesoft and the Subsidiaries have not been required to include any
adjustment in Taxable income for any Tax period (or portion thereof) ending
after the Effective Time pursuant to Section 481 of the Code or any comparable
provision under state or foreign Tax laws as a result of transactions, events or
accounting methods employed prior to the Closing Date.
(k) None of Servicesoft's or any Subsidiary's assets are
Tax exempt use property within the meaning of Section 168(h) of the Code.
(l) Servicesoft has not been distributed in a
transaction qualifying under Section 355 of the Code within the last two years,
nor has Servicesoft distributed any corporation in a transaction qualifying
under Section 355 of the Code within the last two years.
For the purposes of this Agreement, "Tax" or "Taxes" refers to
(i) any and all federal, state, local and foreign Taxes, assessments and other
governmental charges, duties, impositions and liabilities relating to Taxes,
including Taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property Taxes, together
with all interest, penalties and additions imposed with respect to such amounts,
(ii) any liability for payment of any amounts of the type described in clause
(i) as a result of being a member of an affiliated consolidated, combined or
unitary group, and (iii) any liability for amounts of the type described in
clauses (i) and (ii) as a result of any express or implied obligation to
indemnify another person or as a result of any obligations under any agreements
or arrangements with any other person with respect to such amounts and including
any liability for Taxes of a predecessor entity.
4.10 Title to Properties.
(a) Except as set forth in Item 4.10 to the Servicesoft
Disclosure Letter, Servicesoft and each Subsidiary of Servicesoft has good and
marketable title to all of its assets as shown on the Servicesoft Balance Sheet,
free and clear of all liens, charges or encumbrances (other than mechanics',
carriers', workers' and other similar liens arising in the ordinary course of
business securing
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obligations not yet due and payable, liens for Taxes not yet due and payable
(all such liens "PERMITTED LIENS") and imperfections in title which do not,
individually or in the aggregate, prevent such assets from being used for the
purpose for which they are currently being used or otherwise materially impair
the operations of Servicesoft). The machinery and equipment included in the
assets of Servicesoft and the Subsidiaries is in all material respects in good
condition and repair, normal wear and tear excepted. Neither Servicesoft nor any
Subsidiary is in violation of any material zoning, building, safety or
environmental ordinance, regulation or requirement or other law or regulation
applicable to the operation of owned or leased properties, and Servicesoft has
not received any notice of such violation with which it has not complied or had
waived.
(b) Servicesoft and the Subsidiaries own no real
property. All leases of real or personal property to which Servicesoft or any
Subsidiary is a party are fully effective and afford Servicesoft or such
Subsidiary peaceful and undisturbed possession of the subject matter of the
lease. As a result of the transactions contemplated by this Agreement, the
Surviving Corporation will obtain a valid ownership or leasehold interest in all
personal property that Servicesoft or its Subsidiaries currently own or lease
and all real property that Servicesoft or its Subsidiaries currently lease, as
of the date of this Agreement, in each case free and clear of all title defects
and encumbrances of any kind, except: (i) Permitted Liens and (ii) imperfections
in title which do not, individually or in the aggregate, prevent such assets
from being used for the purpose for which they are currently being used or
otherwise materially impair the operations of Servicesoft.
4.11 Absence of Certain Changes or Events. Since the Servicesoft
Balance Sheet Date, Servicesoft and the Subsidiaries have carried on their
business in the ordinary course substantially in accordance with the procedures
and practices in effect on the Servicesoft Balance Sheet Date.
(a) Except as set forth in Item 4.11(a) of the
Servicesoft Disclosure Letter or permitted by the terms of this Agreement, since
the Servicesoft Balance Sheet Date there has not been with respect to
Servicesoft or any Subsidiary:
(i) any change, circumstance or effect that is
or is reasonably likely to be materially adverse to the business, employees,
assets (including intangible assets), capitalization, financial condition,
operations or results of operations of Servicesoft and its Subsidiaries, taken
as a whole;
(ii) any contingent liability incurred by
Servicesoft or any Subsidiary as guarantor or surety with respect to the
obligations of others which exceed in the aggregate $100,000;
(iii) any mortgage, encumbrance or lien placed
on any of the properties of Servicesoft or any Subsidiary except: (A)
mechanics', carriers', workers' and other similar liens arising in the ordinary
course of business, and (B) liens for current Taxes not yet due and payable;
(iv) any purchase, license, sale or other
disposition, or any agreement or other arrangement for the purchase, license,
sale or other disposition, of any of the property (including Servicesoft IP
Rights, as defined in Section 4.12(b)), assets or goodwill of Servicesoft or any
of its Subsidiaries other than in the ordinary course of business and consistent
with past practice;
(v) any material damage, destruction or loss of
any material property or asset, whether or not covered by insurance;
(vi) any change in the compensation payable or
to become payable to any of Servicesoft's or any Subsidiary's directors,
officers, employees or consultants (other than normal raises) for non-officers
in connection with promotions or annual performance evaluations, in the ordinary
course of business consistent with past practice), or any change or agreement to
make any bonus
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or similar payment or arrangement made to or with any of such directors,
officers, employees or consultants, other than normal bonuses granted or
committed to be granted prior to the date of this Agreement;
(vii) any material change with respect to the
senior management of Servicesoft or any Subsidiary or the termination of the
employment of a material number of employees of Servicesoft and its
Subsidiaries; or
(viii) any loss of one or more material
customers of Servicesoft or any Subsidiary or such number of such customers
which together represent a material amount of business.
(b) Except as set forth in Item 4.11(b) or as permitted
by the terms of this Agreement, since the Servicesoft Balance Sheet Date neither
Servicesoft nor any Subsidiary has:
(i) formed any subsidiary or acquired any equity
interest or other interest in any other entity;
(ii) amended their certificates of
incorporation, bylaws or any other charter document;
(iii) made any payment or discharged any
material lien or liability of Servicesoft or any Subsidiary, which lien or
liability was not either (A) shown on the balance sheet as of the Servicesoft
Balance Sheet Date included in the Servicesoft Financial Statements or (B)
incurred in the ordinary course of business after the Servicesoft Balance Sheet
Date;
(iv) incurred any obligation or liability to any
of their officers, directors, stockholders or affiliates, or any loans or
advances made to any of its officers, directors, stockholders or affiliates,
except normal compensation and expense allowances payable to officers or
directors;
(v) sold, issued, granted or authorized the
issuance or grant of: (A) any shares of its capital stock of any class or other
security (other than (1) options issued to employees in the ordinary course of
business consistent with past practice and identified in Item 4.3(b) of the
Servicesoft Disclosure Letter (all of which had been granted as of the date of
this Agreement), or (2) pursuant to exercise of outstanding stock options and
warrants); (B) any option, call, warrant, obligation, subscription, or other
right to acquire any capital stock or any other security, except for stock
options described in Section 4.3 or (C) any instrument convertible into or
exchangeable for any capital stock or other security; or accelerated the vesting
of any outstanding option or other security, except for acceleration provisions
that are contained in existing stock option grants (each of which is listed in
Item 4.11(b));
(vi) declared, set aside or paid any dividend
on, or made any other distribution in respect of, their capital stock, or made
any changes in any rights, preferences, privileges or restrictions of any of
their outstanding capital stock;
(vii) effected any split, stock dividend,
combination or recapitalization of their capital stock or any direct or indirect
redemption, purchase or other acquisition by Servicesoft or any Subsidiary of
their capital stock;
(viii) effected or been a party to any
transaction relating to a merger, consolidation, sale of all or substantially
all of their assets, or similar transaction; or accepted or otherwise entered
into any Acquisition Proposal (as defined in Section 6.7(a));
(ix) executed, amended, relinquished, terminated
or failed to renew any material Contract, lease, transaction or legally binding
commitment other than in the ordinary course
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of its business (nor to Servicesoft's knowledge, has there been any written or
oral indication or assertion by the other party thereto of its desire to so
amend, relinquish, terminate or not renew any such Contract, lease transaction
or legally binding commitment);
(x) deferred the payment of any accounts payable
outside the ordinary course of business or in an amount which is material or any
discount, accommodation or other concession made outside the ordinary course of
business in order to accelerate or induce the collection of any receivable;
(xi) borrowed any money other than in the
ordinary course of its business, and not in excess of $100,000 in the aggregate;
(xii) been the subject of any pending or, to
Servicesoft's knowledge, threatened labor dispute or claim of unfair labor
practices; or
(xiii) made or entered into any agreement or
understanding to do any of the foregoing (other than as disclosed in Item
4.11(b)).
4.12 Intellectual Property.
(a) Definition. As used herein, the term "INTELLECTUAL
PROPERTY RIGHTS" shall mean all worldwide industrial and intellectual property
rights, including, without limitation, patents, patent applications, patent
rights, trademarks, trademark applications, trade names, service marks, service
▇▇▇▇ applications, URLs, copyright, copyright applications, mask work rights,
moral rights, franchises, licenses, inventories, know-how, trade secrets,
customer lists, proprietary information, proprietary processes and formulae,
databases and data collections, 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.
(b) Ownership of Intellectual Property. Servicesoft and
each Subsidiary of Servicesoft owns all right, title and interest in, or has
license (sufficient for the conduct of its business as presently conducted), to
all Intellectual Property Rights used in or reasonably necessary to the conduct
of its business as presently conducted (with such Intellectual Property Rights
being hereinafter collectively referred to as the "SERVICESOFT IP RIGHTS").
Except as set forth in Item 4.12(b)(i) of the Servicesoft Disclosure Letter,
Servicesoft has the unrestricted, worldwide right to design, develop, use,
reproduce, manufacture, sell, license and distribute all of its products and
services (such products and services being set forth in Item 4.12(b)(ii) of the
Servicesoft Disclosure Letter and hereinafter collectively referred to as the
"SERVICESOFT PRODUCTS AND SERVICES") as such Servicesoft Products and Services
are currently being designed, developed, used, reproduced, manufactured, sold,
licensed and distributed, and the right to use all of its customer and supplier
lists. Except as set forth in Item 4.12(b)(iii), neither Servicesoft nor any
Subsidiary has granted any reseller, distributor, sales representative, original
equipment manufacturer, value added reseller or other third party any right to
reproduce, manufacture, sell, license or distribute any of its products or
services in any market segment or geographic location. Set forth in Item
4.12(b)(iv) is a true and complete list of all copyright, mask work and
trademark registrations and applications and all patents and patent applications
for Servicesoft IP Rights owned by Servicesoft or its Subsidiaries. Except for
licensed materials pursuant to agreements set forth in Item 4.12(b)(i) of the
Servicesoft Disclosure Letter and except for widely available commercial
software licensed by Servicesoft from third parties on standard commercial
terms, all Servicesoft IP Rights are owned by Servicesoft or its U.S. or
Canadian Subsidiaries (or, with respect to customer lists of other Subsidiaries
or consulting work product created by other Subsidiaries, such other
Subsidiaries). Except as set forth in Item 4.12(b)(i) and Item 4.14 of the
Servicesoft Disclosure Letter, Servicesoft has not transferred
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ownership of or granted any third parties any rights in or with respect to any
Servicesoft IP Rights, other than non-exclusive licenses granted in the ordinary
course of business. Servicesoft is not aware of any loss, cancellation,
termination or expiration of any such registration or patent except as set forth
in Item 4.12(b)(v) of the Servicesoft Disclosure Letter. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of any instrument or
agreement governing any Servicesoft IP Right, will not cause forfeiture or
termination or give rise to a right of forfeiture or termination of any
Servicesoft IP Right or materially impair the right of Servicesoft to use, sell
or license any Servicesoft IP Right or portion thereof.
(c) No Violation of Rights of Others. The business of
Servicesoft and each Subsidiary of Servicesoft and the design, development, use,
manufacture, sale, license or provision of any Servicesoft Product and Service
does not, and will not as a result of the Merger, cause Servicesoft or any
Subsidiary of Servicesoft to infringe or violate any of the Intellectual
Property Rights of any other person nor will any claim of such infringement or
violation after the Effective Date arise from facts prior to the Effective Date;
provided that with respect to infringement of patents, the representation in the
preceding clause of this sentence only relates to patents known to Servicesoft.
Except as set forth in Item 4.12(c) of the Servicesoft Disclosure Letter,
neither Servicesoft nor any Subsidiary has received any written or oral claim or
notice of infringement or potential infringement of the Intellectual Property
Rights of any other person. To the knowledge of Servicesoft, neither Servicesoft
nor any Subsidiary is using any confidential information or trade secrets of
third party, including, but not limited to, any past or present employees or
their respective past employers. There are no royalties, honoraria, fees or
other payments payable by Servicesoft or any Subsidiary of Servicesoft to any
third party under any written or oral contract or understanding or otherwise by
reason of the ownership, use, license, sale, or disposition of any Intellectual
Property that is or was Servicesoft IP Rights (other than as set forth in Item
4.12(c) of the Servicesoft Disclosure Letter).
(d) Protection of Rights. Servicesoft has taken
commercially reasonable and practicable steps designed to safeguard and maintain
the secrecy and confidentiality of, and its proprietary rights in, all
Servicesoft IP Rights. To the knowledge of Servicesoft, there is no material
unauthorized use, infringement or misappropriation of any Servicesoft IP Rights
by any third party, including, to the knowledge of Servicesoft, any Servicesoft
employee or Subsidiary employee. All current Servicesoft and Subsidiary
officers, employees and consultants (other than employees and consultants who
are not and have not been involved in developing Servicesoft IP Rights or
providing services to customers and who have no managerial responsibilities)
have executed and delivered to Servicesoft an agreement regarding the protection
of proprietary information and the assignment to Servicesoft of all Intellectual
Property Rights arising from the services performed for Servicesoft or any
Subsidiary by such persons, and Servicesoft made available or has delivered to
Broadbase or its counsel copies of all such agreements.
(e) Conformity of Products and Services. All software
developed by Servicesoft or any Subsidiary and licensed by Servicesoft or any
Subsidiary to customers and all other products manufactured, sold, licensed,
leased or delivered by Servicesoft or any Subsidiary to customers and all
services provided by Servicesoft or any Subsidiary to customers on or prior to
the Closing Date conform in all material respects (to the extent required in
Contracts with such customers) to applicable contractual commitments, express
and implied warranties, product specifications and product documentation and to
any representations provided to customers and Servicesoft has no material
liability or obligation (and, to Servicesoft's knowledge, there is no legitimate
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Servicesoft giving
rise to any material liability or obligation) for replacement or repair thereof
or other damages in connection therewith in excess of any reserves therefor set
forth on the Balance Sheet. Servicesoft and
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its Subsidiaries have no obligations with respect to any product or service to
deliver any new or additional functionalities, versions, ports or products, or
to perform any additional services, except for (i) maintenance and support
obligations incurred in the ordinary course of business and consistent with past
practices, made available on substantially similar terms to all customers who
have obtained substantially similar products or services, and (ii) future
consulting service or license obligations incurred in the ordinary course of
business with respect to prior consulting engagements, and not resulting from
the failure of any products licensed or sold or services rendered by Servicesoft
or its Subsidiaries to comply in a material respect with any applicable
commitments, specifications or warranties, and (iii) obligations which are
reflected in reserves on the Balance Sheet identified to the future
obligation(s) in question. Servicesoft and its Subsidiaries have good commercial
working relationships with their customers and suppliers. Servicesoft and each
Subsidiary of Servicesoft has taken such actions as are necessary or appropriate
to document the software and its operations found in the Servicesoft Products
and Services and any software used in the development, compilation, maintenance
and support of the Servicesoft Products and Services, such that the materials
comprising such software, including the source code and documentation, have been
written in a clear and professional manner so that they may be understood,
modified and maintained in an efficient manner by reasonably competent
programmers.
4.13 Compliance with Laws. Servicesoft and each Subsidiary is
and will be at the Closing Date in compliance, in all respects material to
Servicesoft, with all applicable laws, ordinances, regulations and rules, and
all orders, writs, injunctions, awards, judgments and decrees, applicable to
Servicesoft or any Subsidiary, or to the assets, properties and business of
Servicesoft or any Subsidiary, including, without limitation:
(a) all applicable federal and state securities laws and
regulations;
(b) all applicable federal, state and local laws,
ordinances and regulations, and all orders, writs, injunctions, awards,
judgments and decrees, pertaining to (i) the sale, licensing, leasing, ownership
or management of Servicesoft's or any Subsidiary's owned, leased or licensed
real or personal property, products or technical data, (ii) employment or
employment practices, terms and conditions of employment, or wages and hours or
(iii) safety, health, fire prevention, environmental protection (including toxic
waste disposal and related matters described in Section 4.16), building
standards, zoning or other similar matters;
(c) the Export Administration Act and regulations
promulgated thereunder or other laws, regulations, rules, orders, writs,
injunctions, judgments or decrees applicable to the export or re-export of
controlled commodities or technical data;
(d) the Immigration Reform and Control Act; and
(e) all governmental and nongovernmental regulations
related to the operation and use of the Internet.
Servicesoft and each Subsidiary has received all
material permits and approvals from, and has made all material filings with,
third parties, including government agencies and authorities, that are necessary
to the conduct of its business as presently conducted.
4.14 Agreements and Commitments. Except as set forth in Item
4.14 of the Servicesoft Disclosure Letter and delivered or made available by
Servicesoft to Broadbase herewith, or as listed in Item 4.12 or Item 4.15 as
required by Section 4.12 or Section 4.15, as the case may be, neither
Servicesoft nor any Subsidiary is a party or subject to any oral or written
executory agreement, obligation or commitment that is material to Servicesoft,
its financial condition or business or which is described below, including but
not limited to the following:
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(a) Any Contract providing for payments by or to
Servicesoft or any Subsidiary in an amount with respect to any single
transaction of (i) $200,000 or more in the ordinary course of business or (ii)
$100,000 or more not in the ordinary course of business;
(b) Any contract, license or agreement to which
Servicesoft or any Subsidiary is a party (i) with respect to Servicesoft IP
Rights licensed or transferred to any third party (other than standard
agreements with customers arising in the ordinary course of business consistent
with past practice, the forms of which have been delivered to Broadbase or its
counsel); and (ii) pursuant to which a third party has licensed or transferred
any intellectual property to Servicesoft or any Subsidiary (except for
commercially available, non-customized software sold at retail, or sold at less
than $5,000 per license or per seat and not embedded in Servicesoft Products and
Services or sub-licensed to customers of Servicesoft or its Subsidiaries);
(c) Any agreement by Servicesoft or any Subsidiary to
encumber, transfer or sell any material rights in or with respect to any
Servicesoft IP Rights except non-exclusive software licenses;
(d) Any Contract providing for development of technology
for Servicesoft which technology (i) is used or incorporated in any products
currently distributed by Servicesoft or any Subsidiary or used in any service
provided by Servicesoft or any Subsidiary or (ii) is anticipated to be used or
incorporated in any planned products or services of Servicesoft or a Subsidiary,
or any Contract that requires Servicesoft to perform specified development work
for a third party.
(e) Any Contract currently in force for hosting, data
center, transaction processing or other services related to the Servicesoft
website and provision of hosted versions of Servicesoft products and services;
(f) Any agreement for the sale or lease of real or
personal property involving more than $100,000 per year;
(g) Any dealer, distributor, sales representative,
original equipment manufacturer, value added remarketer or other agreement for
the distribution of Servicesoft's or its Subsidiary's products or services
(other than standard agreements arising in the ordinary course of business
consistent with past practice, the forms of which have been delivered to
Broadbase or its counsel);
(h) Any franchise agreement or financing statement;
(i) Any stock redemption or purchase agreement;
(j) Any joint venture Contract or arrangement or any
other agreement that involves a sharing of profits with other persons or the
payment of royalties to any other person;
(k) Any instrument evidencing indebtedness for borrowed
money by way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee or otherwise, except for trade indebtedness or any
advance to any employee of Servicesoft or of any Subsidiary incurred or made in
the ordinary course of business, and except as disclosed in the Servicesoft
Financial Statements;
(l) Any Contract containing covenants purporting to
limit Servicesoft's or any Subsidiary's freedom to compete in any line of
business in any geographic area or to sell products or services to a specific
entity;
(m) Any Contract currently in force to provide source
code to any third party for any product or technology;
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(n) Any Contract for the employment of any officer,
employee or consultant of Servicesoft or any Subsidiary or any other type of
Contract or understanding with any officer, employee or consultant of
Servicesoft or any Subsidiary that is not immediately terminable by Servicesoft
or the Subsidiary without cost or liability;
(o) Any Contract for consulting or similar services with
a term of more than sixty (60) days and which is not terminable without penalty
with notice of sixty (60) days or less; or
(p) any Contract granting most favored nation pricing
and/or terms to any customer, licensee, purchaser, reseller, promoter or
remarketer of any of Servicesoft or its Subsidiaries' products or services.
All agreements, obligations and commitments listed in
Item 4.12, Item 4.14, or Item 4.15, as required by Section 4.12, this Section
4.14, or Section 4.15, as the case may be, are valid and in full force and
effect, and except as expressly noted, a true and complete copy of each has been
delivered or made available to Broadbase. Except as noted in Item 4.14, neither
Servicesoft nor, to the knowledge of Servicesoft, any other party is in material
breach of or default under any material term of any such agreement, obligation
or commitment. Neither Servicesoft nor any Subsidiary has any liability for
renegotiation of government Contracts or sub-Contracts which are material to
Servicesoft.
4.15 Employees.
(a) General Compliance. Servicesoft and each of the
Subsidiaries is in compliance in all material respects with all applicable laws
relating to employment, employment practices, wages, hours, and terms and
conditions of employment, including, but not limited to, employee compensation
matters, and has correctly classified employees as exempt employees and
non-exempt employees under the Fair Labor Standards Act. Except as set forth in
Item 4.15(a) of the Servicesoft Disclosure Letter, neither Servicesoft nor any
Subsidiary has employment or consulting Contracts currently in effect that are
not terminable at will (other than agreements with the sole purpose of providing
for the confidentiality of proprietary information or assignment of inventions).
All independent contractors have been properly classified as independent
contractors for the purposes of federal and applicable state Tax laws, laws
applicable to employee benefits and other applicable laws. All Servicesoft or
Subsidiary employees are legally permitted to be employed by Servicesoft or the
Subsidiary in the United States of America. Servicesoft will have no liability
to any employee or to any organization or any other entity as a result of the
termination of any employee leasing arrangement.
(b) Good Labor Relations. Servicesoft and each of the
Subsidiaries: (i) has never been and is not now subject to a union organizing
effort; (ii) is not subject to any collective bargaining agreement with respect
to any of its employees; (iii) is not subject to any other Contract with any
trade or labor union, employees' association or similar organization; and (iv)
has no current labor disputes and has had no material labor disputes or claims
of unfair labor practices since December 31, 1999. Servicesoft and the
Subsidiaries have good labor relations, and have no knowledge of any facts
indicating that the consummation of the Merger or any of the other transactions
contemplated hereby will have a Material Adverse Effect on such labor relations.
Between January 1, 2000 and the date of this Agreement, to Servicesoft's
knowledge, no executive officer of Servicesoft or any of its Subsidiaries, or
material number of other employees of Servicesoft or any of its Subsidiaries,
has given notice that such employee intends to terminate his or her employment
with Servicesoft or any such Subsidiary. As of the date of this Agreement,
Servicesoft has no knowledge that any key personnel or other employees intend to
leave its or a Subsidiary's employment. There are no controversies pending or,
to Servicesoft's knowledge, threatened, between Servicesoft or any Subsidiary
and any of their employees that would be reasonably likely to result in
Servicesoft incurring any material liability.
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(c) Employee Plans. Item 4.15(c) of the Servicesoft
Disclosure Letter identifies: (i) each "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); and (ii) all other written or formal plans or Contracts involving
direct or indirect compensation or benefits (including any employment Contracts
entered into between Servicesoft or any Subsidiary and any employee of
Servicesoft or any Subsidiary, but excluding workers' compensation, unemployment
compensation and other government-mandated programs) currently or previously
maintained, contributed to or entered into by Servicesoft or any Subsidiary
under which Servicesoft or any Subsidiary or any ERISA Affiliate (as defined
below) has any present or future Liability (collectively, the "SERVICESOFT
EMPLOYEE PLANS"). For purposes of this Section 4.15, "ERISA AFFILIATE" shall
mean any entity which is a member of: (i) a "controlled group of corporations",
as defined in Section 414(b) of the Code; (ii) a group of entities under "common
control", as defined in Section 414(c) of the Code; or (iii) an "affiliated
service group", as defined in Section 414(m) of the Code, or treasury
regulations promulgated under Section 414(o) of the Code, any of which includes
Servicesoft or any Subsidiary. Copies of all Servicesoft Employee Plans (and, if
applicable, related trust agreements) and all related documents, amendments and
written interpretations (including summary plan descriptions) thereto have been
made available to Broadbase or its counsel, together with the two most recent
annual reports (Form 5500, including, if applicable, Schedule B thereto)
prepared in connection with any such Servicesoft Employee Plan. No "prohibited
transaction," as defined in Section 406 of ERISA or Section 4975 of the Code,
has occurred with respect to any Servicesoft Employee Plan which is covered by
Title I of ERISA which would result in a material liability to Servicesoft,
excluding transactions effected pursuant to a statutory or administrative
exemption. Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Servicesoft Employee Plan has or will
make Servicesoft, any Subsidiary or any Servicesoft or Subsidiary officer or
director subject to any material liability under Title I of ERISA or liability
for any material Tax (as defined in Section 4.9) or penalty pursuant to Sections
4972, 4975, 4976 or 4979 of the Code or Section 502 of ERISA. Except as set
forth in Item 4.15(c) of the Servicesoft Disclosure Letter, no Servicesoft
Employee Plans will be subject to any surrender fees or service fees upon
termination other than the normal and reasonable administrative fees associated
with the termination of benefit plans. All contributions due from Servicesoft or
any Subsidiary with respect to any of the Servicesoft Employee Plans have been
made as required under such plans and, to the extent applicable, ERISA, other
than contributions accrued in the ordinary course of business consistent with
past practice after the Servicesoft Balance Sheet Date as a result of operations
of Servicesoft and its Subsidiaries after the Servicesoft Balance Sheet Date,
all of which have been paid or will be paid when and as required or, if not
required to be made, have been accrued on the Servicesoft Financial Statements.
Servicesoft and each of the Subsidiaries has performed in all material respects
all obligations required to be performed by it under each Servicesoft Employee
Plan, and each Servicesoft Employee Plan has been maintained substantially in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including, without limitation, ERISA
and the Code, which are applicable to such Servicesoft Employee Plans. All
individuals who, pursuant to the terms of any Servicesoft Employee Plans, are
entitled to participate in any Servicesoft Employee Plan, currently are
participating in such Servicesoft Employee Plan or have been offered an
opportunity to do so. No employee of Servicesoft or any of its Subsidiaries, and
no person subject to any health plan of Servicesoft or any of its Subsidiaries
has made medical claims through such health plan during the 12 months preceding
the date hereof for more than $100,000 in the aggregate for which Servicesoft is
responsible, or has any catastrophic illness.
(d) Pension Plans. All Servicesoft Employee Plans which
individually or collectively would constitute an "employee pension benefit
plan", as defined in Section 3(2) of ERISA (collectively, the "SERVICESOFT
PENSION PLANS"), are identified as such in Item 4.15(d) of the Servicesoft
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Disclosure Letter. Any Servicesoft Pension Plan which is intended to be
qualified under Section 401(a) of the Code (a "SERVICESOFT 401(a) PLAN") is so
qualified and has been so qualified during the period from its adoption to date,
and the trust forming a part is exempt from Tax pursuant to Section 501(a) of
the Code. No Servicesoft Pension Plan constitutes, or has since the enactment of
ERISA constituted, a "multiemployer plan," as defined in Section 3(37) of ERISA.
No Servicesoft Pension Plans are subject to Title IV of ERISA. Servicesoft has
delivered to Broadbase or its counsel a complete and correct copy of the most
recent Internal Revenue Service determination letter with respect to each
Servicesoft 401(a) Plan, if any exists.
(e) Benefit Arrangements. Item 4.15(e) of the
Servicesoft Disclosure Letter lists each employment, severance (including all
post-employment Liabilities) or other similar Contract or policy and each
Contract providing for insurance coverage (including any self-insured
arrangements), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, hospitalization benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits for
employees, consultants or directors which: (i) is not a Servicesoft Employee
Plan; (ii) is entered into, maintained or contributed to by Servicesoft or any
Subsidiary; and (iii) covers any employee or former employee or independent
contractor or consultant of Servicesoft or any Subsidiary. Such Contracts and
policies as are described in this Section 4.15(e) are herein referred to
collectively as the "SERVICESOFT BENEFIT ARRANGEMENTS." Each Servicesoft Benefit
Arrangement has been maintained in substantial compliance with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations which are applicable to such Servicesoft Benefit Arrangement.
Servicesoft has delivered to Broadbase or its counsel a complete and correct
copy or description of each Servicesoft Benefit Arrangement. All individuals
who, pursuant to the terms of any Servicesoft Benefit Arrangement, are entitled
to participate in any such Servicesoft Benefit Arrangement, are currently
participating in such Servicesoft Benefit Arrangement or have been offered an
opportunity to do so and have declined.
(f) Since December 31, 1999, there has been no amendment
to, written interpretation or announcement (whether or not written) by
Servicesoft or any Subsidiary relating to, or change in employee participation
or coverage under, any Servicesoft Employee Plan or Servicesoft Benefit
Arrangement that would increase materially the expense of maintaining such
Servicesoft Employee Plan or Servicesoft Benefit Arrangement in the future.
(g) COBRA Compliance. Servicesoft and each of the
Subsidiaries has complied in all material respects prior to the date hereof,
with the continuation coverage requirements of Section 4980B of the Code and the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
Sections 601 through 608 of ERISA, the American Civil Disabilities Act of 1990,
as amended, and the Family Medical Leave Act of 1993, as amended, and the
regulations thereunder, and no material Tax payable on account of Section 4980B
of the Code has been incurred with respect to any current or former employees
(or their beneficiaries) of Servicesoft or any Subsidiary.
(h) No Violation of Contracts. To the knowledge of
Servicesoft, no Servicesoft or Subsidiary employee or consultant is in violation
of any term of any employment Contract, patent disclosure agreement,
non-competition agreement, or any other Contract, or any restrictive covenant
relating to the right of any such employee to be employed by Servicesoft or any
Subsidiary, or to use Intellectual Property Rights of others.
(i) Effect of Merger.
(i) Except as set forth in Item 4.15(i) of the
Servicesoft Disclosure Letter, neither Servicesoft nor any Subsidiary is a party
to any Contract or plan with any key personnel of
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Servicesoft: (A) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving Servicesoft
in the nature of any of the transactions contemplated by this Agreement; (B)
providing any term of employment or compensation guarantee; or (C) providing
severance benefits or other benefits after the termination of employment of such
employee regardless of the reason for such termination of employment.
(ii) Other than as set forth in Item 4.15(i) of
the Servicesoft Disclosure Letter, neither Servicesoft nor any of its
Subsidiaries is a party to any (i) agreement with any of its executive officers
or other key employees (A) the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Servicesoft in the nature of any of the transactions contemplated by this
Agreement, (B) providing any term of employment or compensation guarantee, or
(C) providing severance benefits or other benefits after the termination of
employment of such employee regardless of the reason for such termination of
employment, or (ii) agreement or plan, including, without limitation, any stock
option plan, stock appreciation rights plan or stock purchase plan, any of the
benefits of which will be materially increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement. Neither Servicesoft nor any of its Subsidiaries has any obligations
to pay any amounts, or provide any benefits, to any former employees or
officers, other than as set forth in Item 4.15(i) of the Servicesoft Disclosure
Letter.
(j) List of Current Servicesoft Employees. A list of all
current Servicesoft and Subsidiary employees and consultants as of September 18,
2000, and the current compensation of each is set forth in Item 4.15(j) of the
Servicesoft Disclosure Letter.
4.16 Environmental Matters.
(a) 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. Section 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 material," "toxic substance" or
"hazardous chemical" under: (i) CERCLA; (ii) the Emergency Planning and
Community Right-to-Know Act, 42 U.S.C. Section 11001 et seq.; (iii) the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; (iv)
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; (v) the
Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.; (vi)
regulations promulgated under any of the above statutes; or (vii) any other
applicable federal, state or local statute, ordinance, rule or regulation that
has a scope or purpose similar to those identified above.
(b) None of Servicesoft's or any Subsidiary's properties
or facilities 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.
(c) During the time that Servicesoft or any Subsidiary
has owned or leased properties or owned or operated any facilities:
(i) neither Servicesoft nor any Subsidiary nor
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;
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(ii) there have been no disposals, releases or
threatened releases of Hazardous Materials on, from or under such properties or
facilities;
(iii) no Hazardous Materials have been
transported from such premises to any site or facility now listed or proposed
for listing on the National Priorities List, at 40 C.F.R. Part 300, or any list
with a similar scope or purpose published by any state authority; and
(iv) there has been no litigation, proceeding or
administrative action brought, threatened in writing against Servicesoft or any
Subsidiary, or any settlement reached by Servicesoft 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 premises.
(d) Servicesoft has no knowledge of any presence,
disposals, releases or threatened releases of Hazardous Materials on, from or
under any of such properties or facilities that may have occurred prior to
Servicesoft or a Subsidiary having taken possession of any of such properties or
facilities.
4.17 Certain Transactions and Agreements. To Servicesoft's
knowledge, no person who is an officer or director of Servicesoft or any
Subsidiary, or a member of any such officer's or director's immediate family:
(a) has any direct or indirect ownership interest in or
any employment or consulting agreement with any firm or corporation that
competes with Servicesoft or any Subsidiary, or with Broadbase (except with
respect to any interest in less than 2% of the outstanding voting shares of any
corporation whose stock is publicly traded);
(b) is directly or indirectly interested in any Contract
with Servicesoft or any Subsidiary, including, but not limited to, any loan
arrangements, except for compensation for services as an officer (listed in Item
4.17 of the Servicesoft Disclosure Letter), director or employee of Servicesoft
and except for the normal rights of a stockholder or optionholder.
(c) has any interest in any (i) Servicesoft IP Rights or
(ii) property (other than Servicesoft IP Rights) used in the business of
Servicesoft or any Subsidiary whether such property is real or personal,
tangible or intangible.
To Servicesoft's knowledge, no Servicesoft or Subsidiary
officer or director, or any "affiliate" or "associate" (as those terms are
defined in Rule 405 promulgated under the Securities Act) of any such person has
had, either directly or indirectly, a material interest in: (i) any entity which
purchases from or sells, licenses or furnishes to Servicesoft or any Subsidiary
any goods, property, technology or intellectual or other property rights or
services, or (ii) any Contract to which Servicesoft or any Subsidiary is a party
or by which it may be bound or affected other than with respect to arms-length
transactions.
4.18 Accounts Receivable. The receivables shown on the balance
sheet of Servicesoft on the Servicesoft Balance Sheet Date arose in the ordinary
course of business consistent with past practice and have been collected or, as
of the date of this Agreement, are collectible in the book amounts thereof, less
an amount not in excess of the allowance for doubtful accounts provided for in
the balance sheet of Servicesoft on the Servicesoft Balance Sheet Date.
Allowances for doubtful accounts and warranty returns have been prepared in
accordance with GAAP consistently applied and in accordance with the past
practices of Servicesoft and its
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Subsidiaries. The receivables of Servicesoft and its Subsidiaries arising after
the Servicesoft Balance Sheet Date and prior to the Closing Date arose or will
arise in the ordinary course of business consistent with past practice and have
been collected or are, as of the date of this Agreement, collectible in the book
amounts thereof, less allowances for doubtful accounts and warranty returns
determined in accordance with the past practices of Servicesoft and its
Subsidiaries. None of Servicesoft's receivables is subject to any material claim
of offset, recoupment, setoff or counter-claim and it has no knowledge of any
specific facts or circumstances (whether asserted or unasserted) that could give
rise to any such claim. No material amount of receivables are contingent upon
the performance by Servicesoft or any of its Subsidiaries of any obligation or
contract other than normal warranty repair and replacement and other than
products' progress bills in the ordinary course of business consistent with past
practice. No person has any lien on any of such receivables (except Permitted
Liens) and no agreement for deduction or discount has been made with respect to
any of such receivables. Item 4.18 of the Servicesoft Disclosure Letter sets
forth as of August 31, 2000, or such other date as specified therein, an aging
of accounts receivable of Servicesoft and its Subsidiaries in the aggregate and
by customer. There are no accounts receivable which are subject to asserted
warranty claims known to Servicesoft made within the last year, including the
type and amounts of such claims.
4.19 Board of Directors, Officers and Key Personnel. Item 4.19
of the Servicesoft Disclosure Letter accurately sets forth, as of the date of
this Agreement: (a) the name and title of each of Servicesoft's officers and its
Subsidiaries' officers; (b) the name and title of supervisory, developmental or
other key personnel of Servicesoft and its Subsidiaries; and (c) the name and
address of each member of Servicesoft's board of directors, except as otherwise
indicated thereon, and its Subsidiaries' boards of directors.
4.20 Insurance. Servicesoft and each Subsidiary maintains, and
at all times since its inception has maintained, fire and casualty, workers
compensation, general liability, business interruption and product liability
insurance (which policies are listed in Item 4.20 of the Servicesoft Disclosure
Letter) which it believes to be reasonably prudent for similarly sized and
similarly situated businesses. Item 4.20 sets forth all material claims made
under insurance policies since December 31, 1997 and the premiums that apply
with respect to such insurance policies as of the date of this Agreement.
4.21 Voting Arrangements. Except for the Voting Agreements, or
as set forth in Item 4.5 of the Servicesoft Disclosure Letter, there are no
outstanding stockholder agreements, voting trusts, proxies or other Contracts to
which Servicesoft or, to Servicesoft's knowledge, to which any other person or
entity is a party, relating to the voting of any shares of Servicesoft's capital
stock.
4.22 Ownership of Shares of Broadbase Capital Stock. Except as
set forth in Item 4.22 of the Servicesoft Disclosure Letter, as of the date
hereof, neither Servicesoft nor any Subsidiary nor, to Servicesoft's knowledge,
any of Servicesoft's affiliates or associates (as such terms are defined under
the Exchange Act of 1934): (a) beneficially owns, directly or indirectly; or (b)
is party to any Contract for the purpose of acquiring, holding, voting or
disposing of, in each case, shares of Broadbase capital stock (except for shares
of Broadbase capital stock in the aggregate representing less than 1% of the
outstanding shares of Broadbase capital stock).
4.23 Information Supplied. None of the information supplied or
to be supplied by Servicesoft for inclusion in the Form S-4 and the
Prospectus/Proxy Statement (both as defined in Section 2.3(a)), at the date such
information is supplied, at the time of the meeting of the stockholders of
Broadbase to approve the Merger, and at the time of the meeting, or the date of
the written consent, of the Servicesoft Stockholders to approve the Merger,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading, or will, in the case of the Form S-4, at
the time the Form S-4 becomes effective under the Securities Act, contains any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading.
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4.24 Accuracy of Disclosure. The representations and warranties
contained in this Agreement, taken together with the Servicesoft Disclosure
Letter and any exhibits, schedules, certificates and documents to be delivered
by Servicesoft to Broadbase pursuant to this Agreement, do not contain any
untrue statement of a material fact or omit to state a 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.
5. REPRESENTATIONS AND WARRANTIES OF BROADBASE AND NEWCO
Except as set forth in the Broadbase Disclosure Letter, (which,
subject to Section 13.14, shall specifically refer to the Sections of this
Agreement to which the specific Items of the Servicesoft Disclosure Letter
therein constitute an exception), each of Broadbase and Newco, where applicable,
hereby represents and warrants to Servicesoft as follows:
5.1 Organization and Good Standing. Each of Broadbase and Newco
is a corporation duly organized, validly existing and, where applicable, in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority, and all requisite qualifications to do
business as a foreign corporation, to conduct its business in the manner in
which its business is currently being conducted, except where the failure to be
so organized, existing or in good standing or to have such power, authority or
qualifications would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Broadbase. Broadbase has delivered
or made available to Servicesoft a true and correct copy of its and Newco's
certificate of incorporation and bylaws, each as amended to date (collectively,
the "BROADBASE CHARTER DOCUMENTS"), and each such instrument is in full force
and effect. Neither Broadbase nor Newco is in violation of any of the provisions
of the Broadbase Charter Documents. Broadbase has delivered or made available to
Servicesoft all proposed or considered amendments to the Broadbase Charter
Documents.
5.2 Capitalization.
(a) Authorized/Outstanding Capital Stock. As of the
close of business on September 11, 2000, the authorized capital stock of
Broadbase consisted solely of 90,000,000 shares of Broadbase common stock and
5,000,000 shares of Broadbase preferred stock. As of the close of business on
September 11, 2000, there were issued and outstanding 47,887,765 shares of
Broadbase common stock and no shares of Broadbase preferred stock. All issued
and outstanding shares of Broadbase common stock have been duly authorized and
validly issued, are fully paid and nonassessable, are not subject to any right
of rescission, are not subject to preemptive rights by statute, Broadbase's
certificate of incorporation or bylaws, or any agreement or document to which
Broadbase is a party or by which it is bound, and have been offered, issued,
sold and delivered by Broadbase in compliance with all registration or
qualification requirements (or applicable exemptions therefrom) of applicable
federal and state securities laws.
(b) Options/Warrants/Rights. As of the close of business
on September 11, 2000, options to purchase 15,023,519 shares of Broadbase common
stock ("BROADBASE OPTIONS") had been issued and were outstanding and no
Broadbase Warrants to purchase shares of Broadbase common stock were issued and
are outstanding as of such date. Between September 11, 2000, and the date of
this Agreement, Broadbase has not granted any options or warrants or issued any
shares except pursuant to the acquisitions of Panopticon, Inc. and Decisionism,
Inc. and as set forth in Item 5.8(b) of the Broadbase Disclosure Letter. A list
of all holders of Broadbase Options as of September 11, 2000, is set forth in
Item 5.2(b) of the Broadbase Disclosure Letter. Item 5.2(b) of the Broadbase
Disclosure Letter lists for each person who held Broadbase Options as of
September 11, 2000, the exercise price for each such Broadbase Option, the
number of shares or other securities covered by each such Broadbase Option and
the term of exercisability of each such Broadbase Option. Except as set forth in
this Section 5.2(b) and
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in Item 5.2(b) of the Broadbase Disclosure Letter, as of the close of business
on September 11, 2000, there is no: (i) outstanding preemptive right, stock
appreciation right, subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire from Broadbase or, to Broadbase's knowledge,
from affiliates of Broadbase, any shares of the capital stock or other
securities of Broadbase; (ii) outstanding security, instrument or obligation
issued by Broadbase or controlled affiliates of Broadbase, that is or may become
convertible into or exchangeable for any shares of the capital stock or other
securities of Broadbase; (iii) Contract under which Broadbase is or may become
obligated to sell or otherwise issue any shares of its capital stock or any
other securities; (iv) Contract to which Broadbase is a party relating to the
voting or registration of or restricting any person from purchasing, selling,
pledging or otherwise disposing of (or granting any option or similar right with
respect to) any shares of Broadbase common stock; (v) liability for dividends
accrued but unpaid; or (vi) condition or circumstance, to Broadbase's knowledge,
that likely would directly or indirectly give rise to or provide a basis for the
assertion of a claim by any person to the effect that such person is entitled to
acquire or receive any shares of capital stock or other securities of Broadbase,
including, but not limited to, promises to issue or grant securities of
Broadbase or to recommend to Broadbase's board of directors to issue or grant
securities of Broadbase. Broadbase is not required to issue any shares of
Broadbase common stock or options to acquire shares of Broadbase common stock in
connection with its acquisitions of Panopticon, Inc. and Decisionism, Inc. in
excess of the amounts set forth in Item 5.2(b) of the Broadbase Disclosure
Letter.
(c) The authorized capital stock of Newco consists of
1,000 shares of common stock, $0.001 par value per share, all of which, as of
the date hereof, are issued and outstanding and are held by Broadbase. All of
the outstanding shares of Newco's common stock have been duly authorized and
validly issued, and are fully paid and nonassessable. Newco was formed for the
purpose of consummating the Merger and has no material assets or liabilities
except as necessary for such purpose.
(d) The shares of Broadbase common stock to be issued in
the Merger, when issued in accordance with the provisions of this Agreement,
will be validly issued, fully paid and non-assessable will not be subject to any
right of rescission, will not be subject to preemptive rights or rights of first
refusal by statute, Broadbase's certificate of incorporation or bylaws, or any
agreement or document to which Broadbase is a party or by which it is bound, and
will be offered, issued, sold and delivered by Broadbase in compliance with all
registration or qualification requirements (or applicable exemptions therefrom)
of applicable federal and state securities laws.
5.3 Power, Authorization and Non-Contravention.
(a) Each of Broadbase and Newco has the corporate power
and authority to: (i) carry on its business as now conducted; (ii) own, operate
and lease its properties in the manner in which its properties are currently
owned, used and leased and in the manner in which its properties are proposed to
be owned, used and leased; (iii) perform its obligations under all Contracts to
which it is a party, and (iv) enter into and perform its obligations under this
Agreement, and all agreements to which Broadbase or Newco is or will be a party
that are required to be executed pursuant to this Agreement (the "BROADBASE
ANCILLARY AGREEMENTS"). The execution, delivery and performance of this
Agreement and the Broadbase Ancillary Agreements have been duly and validly
approved and authorized by Broadbase's Board of Directors and Newco's Board of
Directors, as applicable. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Broadbase and Newco, subject
only to the approval and adoption of this Agreement and the approval of the
Merger by Broadbase's stockholders (THE "BROADBASE STOCKHOLDER APPROVAL") and
the filing of the Certificate of Merger pursuant to Delaware Law. The
affirmative vote of the holders of a majority in interest of the stock
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present or represented by proxy at a valid meeting of Broadbase's stockholders
is sufficient for the Broadbase Stockholder Approval, and no other approval of
any holder of any securities of Broadbase is required in connection with the
consummation of the transactions contemplated hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity or other person
is required to be obtained or made by Broadbase or Newco in connection with the
execution and delivery of this Agreement or the consummation of the Merger,
except for (i) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, (ii) the filing with the SEC of the Form S-4,
the Form S-8 and the Prospectus/Proxy Statement and a Current Report on Form 8-K
with respect to the Merger, each in accordance with the Securities Act and the
Exchange Act, and the effectiveness of the Form S-4, (iii) the filing with the
Nasdaq Stock Market of a Notification Form for Listing of Additional Shares with
respect to the shares of Parent Common Stock issued in the Merger, (iv) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal, foreign and state
securities (or related) laws and the HSR Act and the securities or antitrust
laws of any foreign country, and (v) such other consents, authorizations,
filings, approvals and registrations which if not obtained or made would not be
material to Broadbase or the Surviving Corporation or prevent, alter or
materially delay the consummation of the Merger or any of the other transactions
contemplated hereby.
(c) This Agreement and the Broadbase Ancillary
Agreements are, or when executed by Broadbase and Newco (as applicable) and the
other parties thereto will be, valid and binding obligations of Broadbase and
Newco, enforceable against Broadbase and Newco in accordance with their
respective terms, except as to the effect, if any, of (i) applicable bankruptcy
and other similar laws affecting the rights of creditors generally, (ii) rules
of law governing specific performance, injunctive relief and other equitable
remedies and (iii) the enforceability of provisions requiring indemnification;
provided, however, that the Certificate of Merger and the Broadbase Ancillary
Agreements will not be effective until the earlier of the Effective Time or the
date provided for therein.
5.4 No Violation of Charter Documents, Contracts or Laws.
Neither the execution and delivery of this Agreement or any Broadbase Ancillary
Agreement, nor the consummation of the transactions provided for herein or
therein, will conflict with, or (with or without notice or lapse of time, or
both) result in a termination, breach, impairment or violation of: (a) any
provision of the certificate of incorporation, bylaws or other charter documents
of Broadbase or Newco, as currently in effect; (b) any material Broadbase
Contract; or (c) any federal, state, local or foreign judgment, writ, decree,
order, statute, rule or regulation applicable to Broadbase or its assets or
properties. The consummation of the Merger and succession by Broadbase to all
rights, licenses, franchises, leases and agreements of Broadbase will not
require the consent of any third party, and will not have a Material Adverse
Effect on Broadbase or the Surviving Corporation.
5.5 SEC Filings.
(a) Broadbase has filed all forms, reports and documents
required to be filed by Broadbase with the SEC since the effective date of the
registration statement of Broadbase's initial public offering, and has made
available to Servicesoft such forms, reports and documents in the form filed
with the SEC. All such required forms, reports and documents (including those
that Broadbase may file subsequent to the date hereof) are referred to herein as
the "BROADBASE SEC DOCUMENTS." As of their respective dates, the Broadbase SEC
Documents: (i) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Broadbase SEC Documents;
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to
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be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except to
the extent corrected prior to the date of this Agreement by a subsequently filed
Broadbase SEC Document. None of Broadbase's subsidiaries is required to file any
forms, reports or other documents with the SEC.
5.6 Broadbase Financial Statements. Each of the consolidated
financial statements (including, in each case, any related notes thereto)
contained in the Broadbase SEC Documents (the "BROADBASE FINANCIAL STATEMENTS"),
including any Broadbase SEC Documents filed after the date hereof until the
Closing: (i) complied (or will comply as of their dates in the case of Broadbase
SEC Documents filed after the date of this Agreement) as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto; (ii) was prepared (or will be prepared in the case of Broadbase SEC
Documents prepared after the date of this Agreement) in accordance with GAAP
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 1O-Q, 8-K or any successor
form under the Exchange Act); and (iii) fairly presented the consolidated
financial position of Broadbase and its subsidiaries as at the respective dates
thereof and the consolidated results of Broadbase's operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements may not contain footnotes and were or are subject to normal and
recurring year-end adjustments. The balance sheet of Broadbase contained in the
Broadbase SEC Documents as of June 30, 2000 is hereinafter referred to as the
"BROADBASE BALANCE SHEET", with June 30, 2000 hereinafter referred to as the
Broadbase Balance Sheet Date. Except as disclosed in the Broadbase Financial
Statements, since the date of the Broadbase Balance Sheet neither Broadbase nor
any of its subsidiaries has any liabilities required under GAAP to be set forth
on a balance sheet (absolute, accrued, contingent or otherwise) which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Broadbase and its subsidiaries taken as a
whole, except for liabilities incurred since the date of the Broadbase Balance
Sheet in the ordinary course of business consistent with past practices and
liabilities incurred in connection with this Agreement. There has been no change
in Broadbase's accounting policies, except as described in the notes to the
Broadbase Financial Statements.
5.7 Litigation. There is no action, suit, arbitration,
mediation, proceeding, claim or, to Broadbase's knowledge, investigation
pending, nor, to Broadbase's knowledge, are any of the foregoing threatened
against Broadbase or Newco before any court, administrative agency or arbitrator
that, if determined adversely to Broadbase or Newco, may reasonably be expected
to have a Material Adverse Effect on Broadbase or Newco. There is no judgment,
decree, injunction or ruling of an administrative agency or arbitrator
outstanding against Broadbase or Newco, except as may reasonably be expected to
have a Material Adverse Effect on Broadbase or Newco. As of the date hereof,
there is no action, suit, proceeding, claim, arbitration or investigation
pending as to which Broadbase or Newco has received notice of assertion against
Broadbase or Newco, which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay any of the transactions contemplated by this
Agreement. To the knowledge of Broadbase, there is no basis for any person,
firm, corporation or entity to assert a claim against Broadbase or any
subsidiary of Broadbase based upon rights to ownership of any shares of
Broadbase common stock or any option, warrant or other right to acquire any
shares of Broadbase common stock, other than shares, options, warrants or rights
included in the amounts therefor set forth in Section 5.2.
5.8 Absence of Certain Changes or Events. Since the Broadbase
Balance Sheet Date, Broadbase has carried on its business in the ordinary course
substantially in accordance with the procedures and practices in effect on the
Broadbase Balance Sheet Date.
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(a) Except as set forth in Item 5.8 of the Broadbase
Disclosure Letter, since the Broadbase Balance Sheet Date there has not been any
change, circumstance or effect that is or is reasonably likely to be materially
adverse to the business, employees, assets (including intangible assets),
capitalization, financial condition, operations or results of operations of
Broadbase and its subsidiaries, taken as a whole.
(b) Except as set forth in Item 5.8 or permitted by the
terms of this Agreement, since the Broadbase Balance Sheet Date, Broadbase has
not:
(i) amended its certificate of incorporation,
bylaws or any other charter document;
(ii) declared, set aside or paid any dividend
on, or made any other distribution in respect of, its capital stock, or made any
changes in any rights, preferences, privileges or restrictions of any of its
outstanding capital stock;
(iii) effected any split, stock dividend,
combination or recapitalization of its capital stock or any direct or indirect
redemption, purchase or other acquisition by Broadbase of its capital stock; or
(iv) consummated any transaction relating to a
merger, consolidation, sale of all or substantially all of its assets.
(v) incurred any obligation or liability to any
of its officers, directors, stockholders or affiliates, or made any loans or
advances to any of its officers, directors, stockholders or affiliates, except
normal compensation and expense allowances payable to officers or directors;
(vi) sold, issued, granted or authorized the
issuance or grant of: (A) any shares of its capital stock of any class or other
security (other than (1) options issued to employees in the ordinary course of
business consistent with past practice, or (2) pursuant to exercise of
outstanding stock options); (B) any option, call, warrant, obligation,
subscription, or other right to acquire any capital stock or any other security
or (C) any instrument convertible into or exchangeable for any capital stock or
other security; or accelerated the vesting of any outstanding option or other
security;
(vii) made or entered into any agreement or
understanding to do any of the foregoing other than as disclosed in Item 5.8 of
the Broadbase Disclosure Letter.
5.9 Intellectual Property.
(a) Ownership of Intellectual Property. Broadbase owns
all right, title and interest in, or has the right to use, all Intellectual
Property Rights used in or reasonably necessary to the conduct of its business
as presently conducted and the business of the licensing and use of Broadbase
products and the sale of commercial services using such Intellectual Property
Rights (with such Intellectual Property Rights being hereinafter collectively
referred to as the "BROADBASE IP RIGHTS"). The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of any instrument or
agreement governing any Broadbase IP Right, will not cause forfeiture or
termination or give rise to a right of forfeiture or termination of any
Broadbase IP Right or materially impair the right of Servicesoft to use, sell or
license any Broadbase IP Right or portion thereof.
(b) No Violation of Rights of Others. The business of
Broadbase, as conducted as of the date hereof, does not, and the business of the
licensing and use of Broadbase products, and the sale of Broadbase commercial
services after the Effective Time will not, cause Broadbase to infringe or
violate any of the Intellectual Property Rights of any other person. Broadbase
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has not received any written or oral claim or notice of infringement or
potential infringement of the Intellectual Property Rights of any other person
which could be reasonably expected to have a Material Adverse Effect on
Broadbase. To its knowledge, Broadbase is not using any confidential information
or trade secrets of any past or present employees.
(c) Protection of Rights. Broadbase has taken reasonable
and practicable steps designed to safeguard and maintain the secrecy and
confidentiality of, and its proprietary rights in, all Broadbase IP Rights. To
the knowledge of Broadbase, there is no material unauthorized use, infringement
or misappropriation of any Broadbase IP Rights by any third party, including, to
the knowledge of Broadbase, any Broadbase employee. Except as set forth in Item
5.9(c), Broadbase is not aware of any infringement of any Broadbase IP Rights by
any third party. All officers, employees and consultants of Broadbase and its
subsidiaries (other (i) than employees and consultants who are not and have not
been involved in developing Broadbase IP Rights or providing services to
customers and who have no managerial responsibilities and (ii) officers,
employees and consultants of Panopticon, Inc. and Decisionism, Inc.) have
executed and delivered to Broadbase an agreement regarding the protection of
proprietary information and the assignment to Broadbase of all Intellectual
Property Rights arising from the services provided for Broadbase or any
subsidiary of Broadbase by such persons.
5.10 Compliance with Laws. Broadbase has complied, or prior to
the Closing Date will have complied, and is or will be at the Closing Date in
compliance, in all respects material to Broadbase, with all applicable laws,
ordinances, regulations and rules, and all orders, writs, injunctions, awards,
judgments and decrees, applicable to Broadbase, or to the assets, properties and
business of Broadbase, including, without limitation:
(a) all applicable federal and state securities laws and
regulations;
(b) all applicable federal, state and local laws,
ordinances and regulations, and all orders, writs, injunctions, awards,
judgments and decrees, pertaining to (i) the sale, licensing, leasing, ownership
or management of Broadbase's owned, leased or licensed real or personal
property, products or technical data, (ii) employment or employment practices,
terms and conditions of employment, or wages and hours or (iii) safety, health,
fire prevention, environmental protection (including toxic waste disposal and
related matters described in Section 4.16), building standards, zoning or other
similar matters;
(c) the Export Administration Act and regulations
promulgated thereunder or other laws, regulations, rules, orders, writs,
injunctions, judgments or decrees applicable to the export or re-export of
controlled commodities or technical data;
(d) the Immigration Reform and Control Act; and
(e) all governmental and nongovernmental regulations
related to the operation and use of the Internet.
Broadbase has received all material permits and
approvals from, and has made all material filings with, third parties, including
government agencies and authorities, that are necessary to the conduct of its
business as presently conducted.
5.11 Information Supplied. None of the information supplied or
to be supplied by Broadbase for inclusion in the Form S-4 and the
Prospectus/Proxy Statement, at the date such information is supplied, at the
time of the meeting of the stockholders of Broadbase to approve the Merger, and
at the time of the meeting, or the date of the written consent, of the
Servicesoft Stockholders to approve the Merger, contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, or will, in the case of
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the Form S-4, at the time the Form S-4 becomes effective under the Securities
Act, contains any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
5.12 Accuracy of Disclosure. The representations and warranties
contained in this Agreement, taken together with the Broadbase Disclosure Letter
and any exhibits, schedules, certificates and documents to be delivered by
Broadbase to Servicesoft pursuant to this Agreement, do not contain any untrue
statement of a material fact or omit to state a 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.
6. SERVICESOFT PRE-CLOSING COVENANTS
During the period from the date of this Agreement until the
earlier to occur of (a) the Effective Time and (b) the termination of this
Agreement in accordance with the provisions of Article 11 hereof, Servicesoft
covenants to and agrees with Broadbase (and, where Broadbase explicitly agrees
to perform certain actions pursuant to specific provisions in this Article 6,
Broadbase covenants to and agrees with Servicesoft) as follows:
6.1 Access to Information. Until the Closing Date and subject to
the terms and conditions hereof relating to the confidentiality and use of
confidential and proprietary information, Servicesoft will provide Broadbase and
its agents with reasonable access, during regular business hours, to the files,
books, records and offices of Servicesoft and the Subsidiaries, including,
without limitation, any and all information relating to Servicesoft and
Subsidiary taxes, commitments, Contracts, leases, licenses, real, personal and
intangible property, and financial condition. Servicesoft will cause its
accountants to cooperate with Broadbase 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.
6.2 Advice of Changes. Servicesoft will promptly advise
Broadbase in writing of: (i) the discovery by Servicesoft of any event,
condition, fact or circumstance occurring on or prior to the date of this
Agreement that would render any representation or warranty by Servicesoft
contained in this Agreement untrue or inaccurate in any material respect; (ii)
any event, condition, fact or circumstance occurring subsequent to the date of
this Agreement that would render any representation or warranty by Servicesoft
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; (iii) any breach of
any covenant or obligation of Servicesoft pursuant to this Agreement or any
Ancillary Agreement; (iv) any event, condition, fact or circumstance that may
make the timely satisfaction of any of the conditions set forth in Article 10
impossible or unlikely; and (v) any Material Adverse Effect on Servicesoft.
6.3 Conduct of Business. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Servicesoft and each of its
subsidiaries shall, except to the extent that Broadbase shall otherwise consent
in writing, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance in all
material respects with all applicable laws and regulations, pay its debts and
Taxes when due, pay or perform other material obligations when due, and use all
reasonable efforts consistent with past practices and policies to (i) preserve
intact its present business organization, (ii) keep available the services of
its present officers, (iii) preserve its relationships with customers,
suppliers, licensors, licensees, and others with which it has business dealings,
(iv) maintain its equipment and other 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, and (v) keep in full force
all insurance policies identified in Item 4.20 of the Servicesoft Disclosure
Letter
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and obtain any additional insurance required consistent with past practices for
its business and property. In addition, during that period, Servicesoft will
promptly notify Broadbase of any material event involving its business or
operations consistent with the agreements contained herein.
In addition, except as provided otherwise herein or as
approved or recommended by Broadbase, Servicesoft will not, without the prior
written consent of an executive officer of Broadbase, which consent shall not be
unreasonably withheld or delayed:
(a) sell, lease, license, encumber or otherwise dispose
of any properties or assets which are material, individually or in the
aggregate, to the business of Servicesoft and its Subsidiaries or which have a
book value in excess of $250,000, other than non-exclusive licenses of
Servicesoft IP Rights pursuant to agreements entered into in the ordinary course
of business consistent with past practices ;
(b) borrow any money or guarantee any such indebtedness
of another person or enter into any "keep well" or other agreement to maintain
any financial statement condition or enter into any arrangement having the
economic effect of any of the foregoing; which obligations, liabilities or
indebtedness exceed $250,000 in the aggregate; provided, however, that
Servicesoft may enter into a line of credit for up to $10 million with a
nationally recognized financial institution on reasonable terms;
(c) enter into any licensing or other agreement with
regard to the acquisition, distribution or licensing of any material
Intellectual Property other than non-exclusive licenses, distribution or similar
other agreements entered into in the ordinary course of business consistent with
past practice;
(d) grant or pay any bonus, royalty, severance or
termination pay, or increase the salary or other compensation payable or to
become payable, to any of Servicesoft's or any Subsidiary's directors, officers
or employees or consultants (except (i) pursuant to existing arrangements
disclosed in Item 4.15(a) of the Servicesoft Disclosure Letter, (ii) normal
raises in salary (not to exceed ten percent) for non-officers in connection with
promotions or annual performance evaluations, in the ordinary course of business
consistent with past practice and (iii) severance or termination pay to
non-officer employees upon termination in an amount not to exceed four weeks'
salary), or enter into any new employment agreement (other than offer letters
for new hires on an "at-will" basis), or enter into any consulting agreement
which provides for payment of more than $100,000 annually with any person, or
adopt any new plan of the type described in Section 4.15(c);
(e) amend or cause or permit any amendment of its
certificate of incorporation, bylaws or any other charter document;
(f) enter into any material lease or Contract for the
purchase or sale of any property, real or personal, tangible or intangible,
except in the ordinary course of business consistent with past practice or enter
into any agreement of the types described in Section 4.14;
(g) amend or terminate any Contract or license to which
Servicesoft or a subsidiary thereof is a party, or relinquish or fail to renew
any material Contract or license to which it is a party or waive, release or
assign any material rights or clause thereunder, in each case, in a manner that
would have or would reasonably be expected to have a Material Adverse Effect on
Servicesoft;
(h) issue or sell any shares of its capital stock of any
class or any other of its securities, or issue, grant or create any warrants,
obligations, subscriptions, options, convertible securities, stock appreciation
rights or other commitments to issue shares of capital stock other than (i) the
issuance of shares pursuant to the exercise of warrants or options outstanding
on the date of this
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Agreement, or the exchange of exchangeable securities of Servicesoft Canada that
are outstanding on the date of this agreement, or the conversion of shares of
Servicesoft Preferred Stock that are outstanding on the date of this Agreement
or that are issued upon any such exchange; in each case provided that (A) such
options, warrants, exchangeable securities or shares of convertible preferred
stock are disclosed in Item 4.3 of the Servicesoft Disclosure Letter and (B)
such exercise, exchange or conversion is effected in accordance with the terms
of such options, warrants, exchangeable securities or convertible preferred
stock as in effect on the date of this Agreement; (ii) option grants not to
exceed 200,000 shares of Servicesoft Common Stock in the aggregate issuable
thereunder under the Servicesoft Employee Plans in the ordinary course
consistent with past practice, the terms of which shall provide for vesting over
a four year period, with the first 25% vesting one year after the date of grant
and the remaining 75% vesting in equal ratable installments monthly thereafter,
without any provision for acceleration of such vesting upon the occurrence of
any event or condition except as required by the terms of the Servicesoft
Employee Plans; (iii) the issuance of warrants to purchase up to 100,000 shares
of Servicesoft's Common Stock in connection with the line of credit permitted
under clause (b) if Servicesoft shall enter into such line of credit; and (iv)
the issuance of up to 64,515 shares of Servicesoft Common Stock to current or
former employees of Servicesoft in connection with the termination of
Servicesoft's employee stock purchase plan;
(i) declare, set aside or pay any cash, stock or other
dividend or other distribution in respect of capital stock, or redeem or
otherwise acquire any of its capital stock;
(j) split or combine the outstanding shares of its
capital stock of any class, pay any stock dividend, or enter into any
recapitalization affecting the number of outstanding shares of its capital stock
of any class or affecting any other of its securities;
(k) acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or a portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof; or otherwise
acquire or agree to acquire any assets which are material, individually or in
the aggregate, to the business of Servicesoft or enter into any joint ventures,
partnerships, strategic relationships or alliances;
(l) make or permit to be made any capital expenditures,
or make or commit or commit or agree to make any payments that would be
classified as expenses in each case which exceed $250,000 in any one transaction
or the terms of which transactions are not in the ordinary course of business
consistent with past practice;
(m) waive any stock repurchase rights, accelerate, amend
or change the period of exercisability of options or restricted stock, or
reprice options granted under any employee, consultant, director or other stock
plans or authorize cash payments in exchange for any options granted under any
of such plans;
(n) transfer or license to any person or entity or
otherwise extend, amend or modify in any material respect any rights to the
Servicesoft Intellectual Property, other than non-exclusive licenses in the
ordinary course of business and consistent with past practice;
(o) materially change the pricing of Servicesoft's
products and services;
(p) materially revalue any of its assets or, except as
required by GAAP, make any change in accounting methods, principles or
practices, or agree to any audit assessment by any tax authority or make any tax
election;
(q) change any insurance coverage or issue any
certificates of insurance other than in the ordinary course of business
consistent with past practice;
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(r) lend any amount to any person or entity, other than
advances for travel and expenses which are incurred in the ordinary course of
business consistent with past practice, not material in amount, which travel and
expenses shall be documented by receipts for the claimed amounts in accordance
with past practice;
(s) make any material payments outside the ordinary
course of business consistent with past practice;
(t) take any action which would have or would reasonably
be expected to have a Material Adverse Effect on Servicesoft; or
(u) agree to do, or permit a Subsidiary to do or agree
to do, any of the things described in the preceding clauses 6.4(a) through (t).
Notwithstanding any provision to the contrary contained
herein, in the event that Broadbase does not comply with its obligation to
provide Servicesoft with Loans as required under Section 7.12, then Servicesoft
shall be entitled to borrow up to $15 million or issue equity securities for net
proceeds of up to $15 million on such terms as Servicesoft may deem appropriate,
provided that in the event of any issuance of equity securities, rights to
acquire equity securities or convertible securities, appropriate adjustment
shall be made to the Conversion Ratio so that the percentage of the
fully-diluted outstanding common stock of Broadbase owned in aggregate by the
Servicesoft Stockholders and former holders of Servicesoft options and warrants
immediately following the Effective Time (determined using the treasury method)
will not be increased as a result of such issuance; and provided further that
such transaction does not involve an Acquisition Transaction.
6.4 Prospectus/Proxy Statement.
(a) SEC Filings. As promptly as practicable after the
execution of this Agreement, Servicesoft and Broadbase will prepare and file
with the SEC, the Prospectus/Proxy Statement and Broadbase will prepare and file
with the SEC the Form S-4 in which the Prospectus/Proxy Statement will be
included. Each of Servicesoft and Broadbase will respond to any comments of the
SEC, will use its respective reasonable efforts to have the Form S-4
registration statement declared effective under the Securities Act as promptly
as practicable after such filing, and each of Servicesoft and Broadbase will
cause the Prospectus/Proxy Statement to be mailed to its respective stockholders
at the earliest practicable time after the Registration Statement is declared
effective by the SEC. Each of Servicesoft and Broadbase will promptly provide
all information relating to its business or operations necessary for inclusion
in the Form S-4 and Prospectus/Proxy Statement to satisfy all requirements of
applicable state and federal securities laws, and will be solely responsible for
any statement, information or omission in the Prospectus/Proxy Statement
relating to it or its affiliates based upon written information furnished by it.
Servicesoft will not provide or publish to its stockholders any material
concerning it or its affiliates that violates the Securities Act or Exchange Act
with respect to the transactions contemplated hereby.
(b) HSR Filings. As promptly as practicable after the
date of this Agreement, each of Servicesoft and Broadbase will prepare and file
(i) with the United States Federal Trade Commission and the Antitrust Division
of the United States Department of Justice Notification and Report Forms
relating to the transactions contemplated herein if required by the HSR Act, as
well as comparable pre-merger notification forms required by the merger
notification or control laws and regulations of any applicable jurisdiction, as
agreed to by the parties (the "ANTITRUST FILINGS") and (ii) any other filings
required to be filed by it under the Exchange Act, the Securities Act or any
other Federal, state or foreign laws relating to the Merger and the transactions
contemplated by this Agreement (the "OTHER FILINGS"). Servicesoft and Broadbase
each shall promptly supply the other with any
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information which may be required in order to effectuate any filings pursuant to
this Section 6.4. Neither Broadbase nor Servicesoft nor any of their respective
affiliates shall be under any obligation to make proposals, execute or carry out
agreements or submit to orders providing for the sale or other disposition or
holding separate (through the establishment of a trust or otherwise) of any
assets or categories of assets of Broadbase or Servicesoft, any of their
respective affiliates or subsidiaries, or the holding separate of the shares of
Servicesoft capital stock to be acquired or the Exchange Shares, or imposing or
seeking to impose any limitation on the ability of Broadbase or Servicesoft or
any of their respective subsidiaries or affiliates to conduct their business or
own such assets or to acquire, hold or exercise full rights of ownership of the
shares of Servicesoft capital stock to be acquired by Broadbase or the Exchange
Shares to be issued to Servicesoft Stockholders.
(c) Joint Participation. Each of Servicesoft and
Broadbase will notify the other promptly upon the receipt of any comments from
the SEC or its staff or any other government officials in connection with any
filing made pursuant hereto and of any request by the SEC or its staff or any
other government officials for amendments or supplements to the Form S-4, the
Prospectus/Proxy Statement or any Antitrust Filings or Other Filings or for
additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Form S-4, the Prospectus/Proxy Statement, the Merger
or any Antitrust Filing or Other Filing. Each of Servicesoft and Broadbase will
cause all documents that it is responsible for filing with the SEC or other
regulatory authorities under this Section 6.5 to comply in all material respects
with all applicable requirements of law and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Prospectus/Proxy Statement, the Form
S-4 or any Antitrust Filing or Other Filing, Servicesoft or Broadbase, as the
case may be, will promptly inform the other of such occurrence and cooperate in
filing with the SEC or its staff or any other government officials, and/or
mailing to stockholders of the Servicesoft and/or Broadbase, such amendment or
supplement.
6.5 Stockholder Approval.
(a) Servicesoft will hold a special meeting or solicit
written consent of the Servicesoft Stockholders as promptly as practicable, and
in any event (to the extent permissible under applicable law) no more than forty
(40) days after the SEC has declared the Form S-4 effective. Servicesoft will
solicit from the Servicesoft Stockholders proxies in favor of the approval of
this Agreement and the Merger, and, subject to the fiduciary obligations of
Servicesoft's directors, Servicesoft will use all reasonable efforts to take all
other action necessary or advisable to secure the vote or consent of the
Servicesoft Stockholders required under Delaware Law to obtain such approvals.
Any meeting of the Servicesoft Stockholders shall be called, held and conducted,
and any proxies or shareholder written consents will be solicited, in compliance
with all applicable federal laws, Delaware Law and Servicesoft's certificate of
incorporation and bylaws, and all other applicable legal requirements.
Servicesoft's obligation to call, give notice of, convene, hold and conduct the
Servicesoft Stockholders Meeting (as defined in Section 6.5(b)) or solicit a
written consent of the Servicesoft Stockholders in accordance with this Section
6.5 shall not be limited or otherwise affected by the commencement, disclosure,
announcement or submission to Servicesoft of any Acquisition Proposal (as
defined in Section 6.6(a)) or Superior Offer (as defined in Section 6.5(d)), or
by any withdrawal, amendment or modification of the recommendation of the Board
of Directors of Servicesoft to the Servicesoft Stockholders to approve this
Agreement and the Merger.
(b) In the event a meeting of the Servicesoft
Stockholders is held to approve this Agreement and the Merger (the "SERVICESOFT
STOCKHOLDERS MEETING"), then notwithstanding anything to the contrary contained
in this Agreement, Servicesoft may adjourn or postpone the Servicesoft
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Stockholders Meeting if as of the time for which the Servicesoft Stockholders
Meeting is originally scheduled there are insufficient shares of Servicesoft
capital stock represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of the Servicesoft Stockholders Meeting, in
which case the Servicesoft Stockholders Meeting shall be re-convened as soon as
a quorum is available. Servicesoft shall ensure that the Servicesoft
Stockholders Meeting is called, noticed, convened, held and conducted prior to
and separate from any meeting of the Servicesoft Stockholders at which any
Acquisition Proposal or Acquisition Transaction (as defined in Section 6.6(a))
is considered or voted upon.
(c) Subject to Section 6.5(d): (i) the Board of
Directors of Servicesoft shall unanimously recommend that the Servicesoft
Stockholders approve this Agreement and the Merger; (ii) the Form S-4 and
Prospectus/Proxy Statement, and the written consent of stockholders, if any,
shall include a statement to the effect that the Board of Directors of
Servicesoft has recommended that the Servicesoft Stockholders approve this
Agreement and the Merger; and (iii) neither the Board of Directors of
Servicesoft nor any committee thereof shall withdraw, amend or modify, or
propose or resolve to withdraw, amend or modify in a manner adverse to
Broadbase, the recommendation of the Board of Directors of Servicesoft that the
Servicesoft Stockholders vote in favor of and approve this Agreement and the
Merger.
(d) Nothing in this Agreement shall prevent the Board of
Directors of Servicesoft from withholding, withdrawing, amending or modifying
its recommendation in favor of the Merger if (i) a Superior Offer (as defined
below) is made to Servicesoft and is not withdrawn, (ii) Servicesoft shall have
provided written notice to Broadbase (a "NOTICE OF SUPERIOR OFFER") advising
Broadbase that Servicesoft has received a Superior Offer, specifying all of the
material terms and conditions of such Superior Offer and identifying the person
or entity making such Superior Offer, (iii) Broadbase shall not have, within
three business days of Broadbase's receipt of the Notice of Superior Offer, made
an offer that Servicesoft's Board of Directors by a majority vote determines in
its good faith judgment (based on the written advice of a financial advisor of
national standing) to be at least as favorable to Servicesoft's stockholders as
such Superior Offer (it being agreed that the Board of Directors of Servicesoft
shall convene a meeting to consider any such offer by Broadbase promptly
following the receipt thereof), (iv) the Board of Directors of Servicesoft
concludes in good faith, after consultation with its outside counsel, that, in
light of such Superior Offer, the withholding, withdrawal, amendment or
modification of such recommendation is required in order for the Board of
Directors of Servicesoft to comply with its fiduciary obligations to
Servicesoft's stockholders under applicable law and (v) Servicesoft shall not
have violated any of the restrictions set forth in Section 6.6 or this Section
6.5. Servicesoft shall provide Broadbase with at least two business days prior
notice (or such lesser prior notice as provided to the members of Servicesoft's
Board of Directors but in no event less than twenty-four hours) of any meeting
of Servicesoft's Board of Directors at which Servicesoft's Board of Directors is
reasonably expected to consider any Acquisition Proposal to determine whether
such Acquisition Proposal is a Superior Offer. Nothing contained in this Section
6.5(d) shall limit Servicesoft's obligation to hold and convene Servicesoft
Stockholders' Meeting (regardless of whether the recommendation of the Board of
Directors of Servicesoft shall have been withdrawn, amended or modified). For
purposes of this Agreement, "SUPERIOR OFFER" shall mean an unsolicited, bona
fide offer made by a third party to consummate any of the following
transactions: (i) a merger or consolidation involving Servicesoft pursuant to
which the stockholders of Servicesoft immediately preceding such transaction
hold less than 50% of the equity interest in the surviving or resulting entity
of such transaction or (ii) the acquisition by any person or group (including by
way of a tender offer or an exchange offer or a two step transaction involving a
tender offer followed with reasonable promptness by a merger involving
Servicesoft), directly or indirectly, of ownership of 100% of the then
outstanding shares of capital stock of Servicesoft, on terms that the Board of
Directors of Servicesoft determines, in its reasonable judgment
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(based on the written advice of a financial advisor of national standing) to be
more favorable to Servicesoft stockholders than the terms of the Merger;
provided, however, that any such offer shall not be deemed to be a "Superior
Offer" if any financing required to consummate the transaction contemplated by
such offer is not committed and is not likely in the reasonable judgment of
Servicesoft's Board of Directors (based on the advice of its financial advisor)
to be obtained by such third party on a timely basis.
6.6 No Solicitation.
(a) Definitions.
(i) "ACQUISITION PROPOSAL" means any offer or
proposal (other than an offer or proposal by Broadbase) relating to an
Acquisition Transaction with respect to Servicesoft.
(ii) "ACQUISITION TRANSACTION" with respect to
any entity means any transaction or series of related transactions other than
the transactions contemplated by this Agreement involving: (a) any acquisition
or purchase from such entity by any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) of more than
a 15% interest in the total outstanding voting securities of such entity or any
of its subsidiaries or any tender offer or exchange offer that if consummated
would result in any person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) beneficially owning 15%
or more of the total outstanding voting securities of such entity, or any of its
subsidiaries or any merger, consolidation, business combination or similar
transaction involving such entity; (b) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than 10% of the
assets of such entity; or (c) any liquidation or dissolution of such entity.
(b) From and after the date of this Agreement until the
Effective Time or termination of this Agreement pursuant to Article 11,
Servicesoft and its Subsidiaries will not, nor will they authorize or permit any
of their respective officers, directors, affiliates or employees or any
investment banker, attorney or other advisor or representative retained by any
of them to, directly or indirectly:
(i) solicit, or initiate the making, submission
or announcement of any Acquisition Proposal;
(ii) furnish to any person any non-public
information with respect to any Acquisition Proposal or take any other action to
facilitate any inquiries regarding any Acquisition Proposal;
(iii) participate or engage in any discussions
or negotiations with any person with respect to any Acquisition Proposal, except
that Servicesoft may inform third parties, in response to unsolicited inquiries,
of the existence of these provisions;
(iv) approve, endorse or recommend any
Acquisition Proposal (except, in the case of a Superior Offer, if (1) neither
Servicesoft nor any representative of Servicesoft and its Subsidiaries shall
have violated any of the restrictions set forth in this Section 6.6 and (2) the
Board of Directors of Servicesoft concludes in good faith, after consultation
with its outside legal counsel, that it must approve, endorse or recommend such
Superior Offer in order for it to comply with its fiduciary obligations to
Servicesoft's stockholders under applicable law); or
(v) enter into any letter of intent or similar
document or any Contract contemplating or otherwise relating to any Acquisition
Transaction;
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provided, however, that notwithstanding the foregoing, prior to the approval of
this Agreement and the Merger at the Servicesoft Stockholders' Meeting, this
Section 6.6(b) shall not prohibit Servicesoft from furnishing nonpublic
information regarding Servicesoft and its Subsidiaries to, or entering into
discussions or negotiations with, any person or group who has submitted (and not
withdrawn) to Servicesoft an unsolicited, written, bona fide Acquisition
Proposal that the Board of Directors of Servicesoft reasonably concludes (based
on the written advice of a financial advisor of national standing) may
constitute a Superior Offer if (1) neither Servicesoft nor any representative of
Servicesoft and its Subsidiaries shall have violated any of the restrictions set
forth in this Section 6.6, (2) the Board of Directors of Servicesoft concludes
in good faith, after consultation with its outside legal counsel, that such
action is required in order for the Board of Directors of Servicesoft to comply
with its fiduciary obligations to Servicesoft's stockholders under applicable
law, (3) prior to furnishing any such nonpublic information to, or entering into
any such discussions with, such person or group, Servicesoft gives Broadbase
written notice of the identity of such person or group and all of the material
terms and conditions of such Acquisition Proposal and of Servicesoft's intention
to furnish nonpublic information to, or enter into discussions with, such person
or group, and Servicesoft receives from such person or group an executed
confidentiality agreement containing terms at least as restrictive with regard
to Servicesoft's confidential information as the confidentiality agreement
entered into by the parties hereto, (4) Servicesoft gives Broadbase at least two
business days advance notice of its intent to furnish such nonpublic information
or enter into such discussions, and (5) contemporaneously with furnishing any
such nonpublic information to such person or group, Servicesoft furnishes such
nonpublic information to Broadbase (to the extent such nonpublic information has
not been previously furnished by Servicesoft to Broadbase). Servicesoft and its
Subsidiaries will immediately cease any and all existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding two sentences by any
officer, director or employee of Servicesoft or any of its Subsidiaries or any
investment banker, attorney or other advisor or representative of Servicesoft or
any of its Subsidiaries shall be deemed to be a breach of this Section 6.6 by
Servicesoft; provided that if such violation consists of a communication by any
such advisor which was unauthorized by Servicesoft and Servicesoft terminates
its relationship with such advisor and with such advisor's employer immediately
upon becoming aware of such communication, then such from and after such
termination, then such communication shall no longer be deemed to constitute a
material breach of this Agreement for purposes of Sections 10.2 and 11.1(a)(ii).
(c) In addition to the obligations of Servicesoft set
forth in Section 6.6(b), Servicesoft as promptly as practicable shall advise
Broadbase orally and in writing of any request for non-public information or any
other inquiry which Servicesoft believes is likely to lead to an Acquisition
Proposal or of any Acquisition Proposal, the material terms and conditions of
such request, inquiry or Acquisition Proposal, and the identity of the person or
group making any such request, inquiry or Acquisition Proposal. Servicesoft will
keep Broadbase informed as promptly as practicable in all material respects of
amendments to any such request, inquiry or Acquisition Proposal.
6.7 Regulatory Approvals. Servicesoft 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 Broadbase may reasonably request, in connection with the
consummation of the transactions provided for in this Agreement. Servicesoft
will use all reasonable efforts to obtain or assist Broadbase in obtaining all
such authorizations, approvals and consents.
6.8 Necessary Consents. Servicesoft will use all reasonable
efforts to obtain such written consents and take such other actions as may be
necessary or appropriate for Servicesoft, in
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addition to those set forth in Section 6.4, to allow the consummation of the
transactions provided for herein and to facilitate and allow Broadbase to carry
on Servicesoft's business after the Closing Date.
6.9 Blue Sky Laws. Servicesoft shall use all reasonable efforts
to assist Broadbase to the extent necessary to comply with the securities and
Blue Sky laws of all jurisdictions applicable in connection with the Merger.
6.10 Servicesoft Dissenting Shares. As promptly as practicable
after the date the Prospectus/Proxy Statement is distributed to Servicesoft
Stockholders and prior to the Closing Date, Servicesoft shall furnish Broadbase
with the name and address of each Servicesoft Stockholder who has up to such
time dissented and the number of shares owned by such Servicesoft Stockholders.
6.11 Litigation. Servicesoft will notify Broadbase in writing
promptly after learning of any material action, suit, proceeding or
investigation by or before any court, board or governmental agency, initiated by
or against Servicesoft or threatened against it. In addition, Servicesoft will
notify Broadbase in writing promptly after learning of any action, suit,
proceeding, claim, arbitration or investigation threatened or pending for the
purpose or with the probable effect of enjoining or preventing the consummation
of any of the transactions contemplated by this Agreement, or which would be
reasonably expected to have a Material Adverse Effect on Broadbase. If
Servicesoft becomes subject to a review by the Internal Revenue Service or any
other taxing agency or authority for accounting periods prior to the Closing
Date (including but not limited to any short tax year resulting from the
Merger), then Servicesoft acknowledges that Broadbase will be entitled to
participate in such review. Servicesoft will not enter into any settlement or
other stipulation with respect to any such review without the written consent of
Broadbase, which consent will not be unreasonably withheld.
6.12 Certain Employee Benefits. As soon as practicable after the
execution of this Agreement, Servicesoft and Broadbase shall confer and work
together in good faith to agree upon mutually acceptable employee benefit and
compensation arrangements for employees of Servicesoft and its Subsidiaries
following the Merger. Servicesoft shall take such actions as are necessary to
terminate such Servicesoft Employee Plans as are requested by Broadbase to be
terminated, provided that those employees of Servicesoft and its Subsidiaries
who are eligible to participate in each such Servicesoft Employee Plan shall be
provided the opportunity to participate in a substantially comparable employee
benefit plan maintained by Broadbase and provided further that Broadbase
requests such termination no later than ten days prior to the Closing Date.
Servicesoft agrees that it shall terminate any and all group severance,
separation, retention and salary continuation plans, programs or arrangements
(other than the Employment Agreements) prior to the Closing.
6.13 Notification of Employee Problems. Servicesoft will
promptly notify Broadbase if any of Servicesoft's officers becomes aware that
any of its officers and software developer managers, or any material number of
other employees intends or threatens to leave its employ.
6.14 Certain Agreements. Servicesoft will use all reasonable
efforts to cause all present employees and consultants of Servicesoft who have
not previously executed Servicesoft's forms of assignments of copyright and
other intellectual property rights to Servicesoft to execute such forms.
6.15 Servicesoft Affiliates. To help ensure that the issuance of
the Exchange Shares complies with the Securities Act, prior to the Closing Date
Servicesoft will deliver a letter identifying all persons who are, in
Servicesoft's reasonable judgment, "affiliates" of Servicesoft at that time (the
"SERVICESOFT AFFILIATES"). Servicesoft will provide Broadbase with all
information and documents needed to evaluate this list for compliance with
securities laws. Broadbase will cause the Exchange Shares issued to the
Servicesoft Affiliates to bear legends with respect to any application
limitations on transfer under Rule 145 promulgated under the Securities Act.
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6.16 Satisfaction of Closing Conditions. Servicesoft will use
all reasonable efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Article 10 or elsewhere in this Agreement on or
before the Closing. Servicesoft will use all reasonable efforts to cause the
transactions contemplated by this Agreement 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 transactions contemplated hereby.
6.17 Conversion of Servicesoft Preferred Stock and Servicesoft
Warrants. Servicesoft agrees to solicit from the holders of each series of
Servicesoft Canada Preferred Stock consent to exchange all of the shares of
Servicesoft Canada Preferred Stock into shares of Servicesoft Series H Preferred
Stock prior to the Effective Time of the Merger. Servicesoft further agrees to
solicit from the holders of each series of Servicesoft Preferred Stock consent
to convert all of the shares of Servicesoft Preferred Stock (other than the
Servicesoft Series X Preferred Stock and Servicesoft Series Y Preferred Stock)
into shares of Servicesoft Common Stock prior to the Effective Time, and to use
all reasonable efforts to cause such conversion. In addition, Servicesoft agrees
to use all reasonable efforts to cause each holder of Servicesoft Warrants to
exercise, effective as of, and contingent upon, the consummation of the Merger,
all Servicesoft Warrants beneficially owned by such person in full in accordance
with the terms of such Servicesoft Warrants. Subject to Section 7.18,
Servicesoft shall use all reasonable efforts to cause each share of Servicesoft
Canada Preferred Stock and Servicesoft Canada Common Stock to be exchanged,
prior to the Effective Time of the Merger, for shares of Servicesoft Preferred
Stock and Servicesoft Common Stock, respectively, in accordance with the terms
of such Servicesoft Canada Preferred Stock and the constituent documents of
Servicesoft Canada.
6.18 Confirmation of Equity Interests. Prior to the Effective
Time (and, in the case of any convertible securities which are to be converted,
or warrants which are to be exercised, prior to the Effective Time, prior to
such conversion or exercise), Servicesoft will provide Broadbase with such
information and documents as Broadbase may from time to time reasonably request
with respect to the calculations of antidilution adjustments, dividends and
share and warrant issuances that are reflected in the Servicesoft Disclosure
Letter. If, prior to the Effective Time, any person shall notify Servicesoft of
its election to exercise any warrants or convert any convertible securities of
Servicesoft, or exchange any Servicesoft Canada Preferred Stock or Servicesoft
Canada Common Stock for Servicesoft Capital Stock, in each case where the terms
of such exercise or conversion would give effect to any antidilution adjustments
or dividends by Servicesoft, or where the number of shares to be issued upon
such exercise or conversion would differ from the number set forth or reflected
in the Servicesoft Disclosure Letter, then Servicesoft shall notify Broadbase in
writing of such exercise, conversion or exchange prior to issuing or delivering
any shares of Servicesoft Capital Stock upon such exercise or conversion, and,
if requested by Broadbase, shall not deliver any such shares of Servicesoft
Capital Stock until the holder of the warrant being exercised, or the security
being converted or exchange, has confirmed to Servicesoft and Broadbase its
concurrence with the number set forth or reflected in the Servicesoft Disclosure
Letter.
7. BROADBASE PRE-CLOSING COVENANTS
During the period from the date of this Agreement until the
Effective Time, Broadbase covenants to and agrees with Servicesoft (and, where
Servicesoft explicitly agrees to perform certain actions pursuant to specific
provisions in this Article 7, Servicesoft covenants to and agrees with
Broadbase) as follows:
7.1 Advice of Changes. Broadbase will promptly advise
Servicesoft in writing of: (i) the discovery by Broadbase of any event,
condition, fact or circumstance occurring on or prior to the
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date of this Agreement that would render any representation or warranty by
Broadbase contained in this Agreement untrue or inaccurate in any material
respect; (ii) any event, condition, fact or circumstance occurring subsequent to
the date of this Agreement that would render any representation or warranty by
Broadbase 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; (iii)
any breach of any covenant or obligation of Broadbase pursuant to this Agreement
or any Ancillary Agreement; (iv) any event, condition, fact or circumstance
that, to its knowledge, would cause the Merger not to qualify as a tax-free
reorganization in accordance with the provisions of Section 368(a)(1)(A) and
Section 368(a)(2)(E) of the Code; (v) any event, condition, fact or circumstance
that may make the timely satisfaction of any of the conditions set forth in
Article 9 impossible or unlikely; and (v) any Material Adverse Effect on
Broadbase.
7.2 Conduct of Business. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Broadbase and each of its
subsidiaries shall, except to the extent that Servicesoft shall otherwise
consent in writing, carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted and in
compliance in all material respects with all applicable laws and regulations,
pay its debts and Taxes when due subject to good faith disputes over such debts
or Taxes, pay or perform other material obligations when due, and use all
reasonable efforts consistent with past practices and policies to (i) preserve
intact its present business organization, (ii) keep available the services of
its present officers, (iii) preserve its relationships with customers and
licensees, (iv) maintain its equipment and other 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, and (v) keep in full
force all of its insurance policies and obtain any additional insurance required
consistent with past practices for its business and property. In addition,
during that period, Broadbase will promptly notify Servicesoft of any material
event involving its business or operations consistent with the agreements
contained herein, subject to any obligations of confidentiality.
In addition, except as provided otherwise herein or as
approved or recommended by Servicesoft, Broadbase will not, without the prior
written consent of an executive officer of Servicesoft, which consent shall not
be unreasonably withheld or delayed:
(a) acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or a portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, in each case
which involve the issuance of equity securities, or securities convertible into
or exchangeable for equity securities, which in the aggregate represent more
than 4,789,769 shares of common stock; provided that the pending acquisitions of
Panopticon, Inc. and Decisionism, Inc. by Broadbase shall not be restricted by
this Section 7.2;
(b) issue or sell any shares of its capital stock of any
class or any other of its securities, or issue, grant or create any warrants,
obligations, subscriptions, options, convertible securities, stock appreciation
rights or other commitments to issue shares of capital stock other than (i) in
connection with permitted acquisitions of the type described in Section 7.2(a)
and in the acquisitions of Panopticon, Inc. and Decisionism, Inc., (ii) upon
exercise of outstanding options or warrants, or (iii) option grants not to
exceed 800,000 shares of Broadbase Common Stock in the aggregate issuable
thereunder, to employees, consultants and directors of Broadbase in the ordinary
course, consistent with past practice plus options issuable (or which may be
assumed) in connection with the acquisitions of Panopticon, Inc. and
Decisionism, Inc.;
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(c) sell, lease, license, encumber or otherwise dispose
of any properties or assets which are material, individually or in the
aggregate, to the business of Broadbase, other than non-exclusive licenses of
Broadbase IP in the ordinary course of business;
(d) amend or cause or permit any amendment of its
certificate of incorporation, bylaws or any other charter document, other than
the amendment of Broadbase's certificate of incorporation to authorize
additional shares of Broadbase common stock to be issued to Servicesoft
Stockholders pursuant to the Merger;
(e) declare, set aside or pay any cash or stock dividend
or other distribution in respect of capital stock, or redeem or otherwise
acquire any of its capital stock;
(f) materially revalue any of its assets or, except as
required by GAAP, make any change in accounting methods, principles or
practices;
(g) Consummate, or enter into any agreement to
consummate, or hold any stockholders' meeting to consider and approve, any
Broadbase Acquisition (as defined below), unless the record date for the meeting
of Broadbase stockholders to approve such Broadbase Acquisition is (or will be)
after the Effective Time. Notwithstanding anything in this Agreement to the
contrary, Broadbase may enter into an agreement with a third party regarding a
Broadbase Acquisition as long as the record date for a Broadbase stockholders'
meeting to consider such Acquisition Proposal for Broadbase falls on a date
after the Effective Time. As used herein, "BROADBASE ACQUISITION" shall mean an
Acquisition of Broadbase.
(h) take any action that Broadbase knows will cause the
Merger to fail to qualify as a tax-free reorganization.
(i) agree to do, or permit a Subsidiary to do or agree
to do, any of the things described in the preceding clauses 7.2(a) through (h).
7.3 Regulatory Approvals. Broadbase 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 Servicesoft may reasonably request, in connection with the
consummation of the transactions provided for in this Agreement including,
without limitation, the Form S-4 and any applicable filings under the HSR Act.
Broadbase will use all reasonable efforts to obtain all such authorizations,
approvals and consents.
7.4 Amendment of Certificate of Incorporation. Broadbase will
amend its certificate of incorporation to authorize additional shares of
Broadbase Common Stock to be issued to Servicesoft Stockholders.
7.5 Broadbase Stockholders' Approval. Broadbase will call a
special meeting of its stockholders, to be held within forty (40) days after the
Form S-4 shall have been declared effective by the SEC (the "BROADBASE
STOCKHOLDERS' MEETING"). Broadbase will solicit from its stockholders proxies in
favor of the approval of the issuance of the Exchange Shares pursuant to the
Merger, an amendment to Broadbase's Certificate of Incorporation to increase the
authorized number of shares of Broadbase Common Stock in order to permit the
issuance of Exchange Shares pursuant to the Merger, and any related matters and,
to the extent required by applicable law or by Broadbase's certificate of
incorporation or bylaws, in favor of the approval of this Agreement and the
Merger (such approvals, the "BROADBASE STOCKHOLDER Approvals"). Broadbase will
use all reasonable efforts to take all other action necessary or advisable to
secure the vote of its stockholders required under Delaware Law to obtain the
Broadbase Stockholder Approvals. Subject to the following sentence, (i) the
Board of Directors of Broadbase shall unanimously recommend that the
stockholders of Broadbase give the Broadbase
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Stockholder Approvals; (ii) the Form S-4 and the Prospectus/Proxy Statement will
include a statement to the effect that Broadbase's Board of Directors has
recommended that the stockholders of Broadbase vote in favor of the Broadbase
Stockholder Approvals; and (iii) neither the Board of Directors of Broadbase nor
any committee thereof shall withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify in a manner adverse to Servicesoft, the recommendation
of the Board of Directors of Broadbase that the stockholders of Broadbase vote
in favor of the Broadbase Stockholder Approvals. Notwithstanding the foregoing,
nothing in this Agreement shall prevent the Board of Directors of Broadbase from
withholding, withdrawing, amending or modifying its recommendation in favor of
the Broadbase Stockholder Approvals if (i) an unsolicited bona fide offer made
by a third party to consummate a Broadbase Acquisition (including, without
limitation, the acquisition by any person or group, including by way of tender
offer or an exchange offer or a two step transaction involving a tender offer
followed with reasonable promptness by a merger involving Broadbase, directly or
indirectly, of ownership of 100% of the then outstanding shares of capital stock
of Broadbase) in which, such third party has required as a condition to closing
such transaction, that this Agreement shall have been terminated and the Merger
not effected (a "BROADBASE ACQUISITION OFFER") is made to Broadbase and is not
withdrawn, (ii) Broadbase shall have provided written notice to Servicesoft
advising Servicesoft that Broadbase has received a Broadbase Acquisition Offer,
specifying all of the material terms and conditions of such Broadbase
Acquisition Offer and identifying the person or entity making such Broadbase
Acquisition Offer and (iii) the Board of Directors of Broadbase concludes in
good faith, after consultation with its outside legal counsel and a financial
advisor of national standing, that, in light of such Broadbase Acquisition
Offer, the withholding, withdrawal, amendment or modification of its
recommendation that the stockholders of Broadbase give the Broadbase Stockholder
Approvals is required in order for the Board of Directors of Broadbase to comply
with its fiduciary obligations to Broadbase's stockholders under applicable law.
The Broadbase Stockholders' Meeting will be called, held and conducted, and any
proxies will be solicited, in compliance with applicable law. Broadbase's
obligation to call, give notice of, convene, hold and conduct the Broadbase
Stockholders' Meeting shall not be limited or otherwise affected by the
commencement, disclosure, announcement or submission to the stockholders of
Broadbase of a Broadbase Acquisition Offer, or by any withdrawal, amendment or
modification of the recommendation of the Board of Directors of Broadbase at
such Broadbase Stockholders' Meeting. Broadbase may not hold a meeting of its
stockholders to consider a Broadbase Acquisition unless the record date for such
meeting is after the Effective Time.
7.6 Litigation. Broadbase will notify Servicesoft in writing
promptly after learning of any action, suit, proceeding, claim, arbitration or
investigation threatened or pending for the purpose or with the probable effect
of enjoining or preventing the consummation of any of the transactions
contemplated by this Agreement, or which would be reasonably expected to have a
Material Adverse Effect on Broadbase.
7.7 Certain Employee Benefits. As soon as practicable after the
execution of this Agreement, Servicesoft and Broadbase shall confer and work
together in good faith to agree upon mutually acceptable employee benefit and
compensation arrangements for Servicesoft employees following the Merger.
Broadbase's benefit arrangements and employee plans shall, to the extent that
this provision does not violate the applicable plan, policy, program or
arrangement, give full credit (including, without limitation, for purposes of
eligibility, vesting and benefits accrued) for each participant's service to
Servicesoft for all purposes for which such service was recognized under
Servicesoft's benefit arrangements or employee plans prior to the effective
time.
7.8 Satisfaction of Conditions Precedent. Broadbase will use all
reasonable efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Article 9 on or before the Closing Date.
Broadbase will use all reasonable efforts to cause the transactions provided for
in this
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Agreement 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 transactions
provided for herein.
7.9 Blue Sky Laws. Broadbase 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 Merger.
7.10 Nasdaq Listing. Broadbase agrees to authorize for listing
on the Nasdaq Stock Market the shares of Broadbase Common Stock issuable, and
those required to be reserved for issuance, in connection with the Merger, upon
official notice of issuance.
7.11 Board Representation. Broadbase shall appoint the chief
executive officer of Servicesoft and ▇▇▇▇▇▇ ▇▇▇▇▇▇ (or such other person as may
be designated by the mutual agreement of Broadbase and Servicesoft) to
Broadbase's Board of Directors as of the Effective Time; provided however, that
if upon such appointment and any concurrent resignations of any present
Broadbase directors, the Board of Directors of Broadbase shall consist of seven
(7) or more members, then Broadbase shall appoint one additional person (who
shall be mutually acceptable to Servicesoft and Broadbase) to the Board of
Directors of Broadbase.
7.12 Bridge Loan.
(a) Provided this Agreement has not been terminated as
provided in Article 11, Broadbase agrees to advance to Servicesoft, on an
as-needed-basis, bridge loans of up to an aggregate of $15 million (the "LOANS")
for the purpose of financing operating expenses incurred in the ordinary course
of business, pursuant to the terms set forth in the form of convertible
promissory note attached hereto as Exhibit D, and subject to execution and
delivery of such note by Servicesoft. Each advance of all or any portion of the
Loan shall be subject to the conditions that (i) the representations and
warranties of Servicesoft set forth in this Agreement shall be true and correct
in all material respects as of the time of such advance, (ii) Servicesoft shall
not have breached in any material respect any covenant contained in this
Agreement, and (iii) Servicesoft shall have given Broadbase at least five (5)
days' written notice requesting such advance and affirming that the conditions
described in clauses (i) and (ii) have been satisfied.
(b) If this Agreement is terminated pursuant to Article
11, then all unpaid principal and accrued interest under the Loan (at the rate
of 8.5% per annum) shall become due and payable by Servicesoft on the date that
is one year after the date of such termination (the "DUE DATE"); provided;
however, that Broadbase shall be entitled to require earlier repayment either
upon (i) the closing of any equity financing following such termination, in
which case, Broadbase shall be entitled to receive the lesser of (1) the
aggregate amount of the unpaid principal and accrued interest under the Loan and
(2) 50% of the funds raised in such equity financing, in either case, in payment
for the unpaid principal and accrued interest under the Loan, with the remainder
to be paid off in full on the Due Date, or (ii) an Acquisition of Servicesoft.
Servicesoft agrees to provide Broadbase with at least ten days' prior written
notice of the closing of Servicesoft's next equity financing and of any
Acquisition of Servicesoft, including the terms thereof. At the election of
Broadbase, the Loans may at any time be converted into shares of Servicesoft
common stock at $10 per share or into the same securities as are issued in the
next equity financing following such termination at a conversion price equal to
the price per share of the equity securities sold in such equity financing, and
each party hereto will take all steps necessary or advisable to effect such
result.
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7.13 Section 16. Provided that Servicesoft delivers to Broadbase
the Section 16 Information (as defined below) in a timely fashion, the Board of
Directors of Broadbase, or a committee of two or more Non-Employee Directors
thereof (as such term is defined for purposes of Rule 16b-3 under the Exchange
Act), shall adopt resolutions prior to the consummation of the Merger, providing
that the receipt by the Company Insiders (as defined below) of Broadbase Common
Stock upon conversion of the Servicesoft Common Stock, and of options for
Broadbase Common Stock upon conversion of the Servicesoft Options, in each case
pursuant to the transactions contemplated hereby and to the extent such
securities are listed in the Section 16 Information, are intended to be exempt
from liability pursuant to Section 16(b) under the Exchange Act. Such
resolutions shall comply with the approval conditions of Rule 16b-3 under the
Exchange Act for purposes of such Section 16(b) exemption, including, but not
limited to, specifying the name of the Company Insiders, the number of
securities to be acquired or disposed of for each such person, the material
terms of any derivative securities, and that the approval is intended to make
the receipt of such securities exempt pursuant to Rule 13b-3(d). "Section 16
Information" shall mean information regarding the Company Insiders, the number
of shares of Servicesoft capital stock held by each such Company Insider and
expected to be exchanged for Broadbase Common Stock in connection with the
Merger, and the number and description of the Servicesoft Options held by each
such Company Insider and expected to be converted into options for Broadbase
Common Stock in connection with the Merger. "Company Insiders" shall mean those
officers and directors of Servicesoft who will be subject to the reporting
requirement of Section 16(b) of the Exchange Act with respect to Broadbase and
who are listed in the Section 16 Information.
7.14 Access to Information. Until the Closing Date and subject
to the terms and conditions hereof relating to the confidentiality and use of
confidential and proprietary information, Broadbase will provide Servicesoft and
its agents with reasonable access, during regular business hours, to the files,
books, records and offices of Broadbase and its subsidiaries, including, without
limitation, any and all information relating to Broadbase's taxes, commitments,
Contracts, leases, licenses, real, personal and intangible property, and
financial condition; provided that Broadbase shall not be required to provide
Servicesoft or its agents with access to any files, books, records or
information where (a) such access would waive any privileges available under
applicable law, or (b) would violate the terms of any nondisclosure agreement
with any third party after Broadbase shall have used all reasonable efforts to
obtain a waiver of, or consent to disclosure under, such agreement.
7.15 Necessary Consents. Broadbase will use all reasonable
efforts to obtain such written consents and take such other actions as may be
necessary or appropriate for Broadbase, in addition to those set forth in
Section 7.5, to allow the consummation of the transactions provided for herein.
7.16 Director and Officer Indemnification. From and after the
Effective Time, Broadbase shall cause the certificate of incorporation and
by-laws of the Surviving Corporation to include indemnification provisions
substantially identical in all material respects to the corresponding existing
provisions in the certificate of incorporation and by-laws of Servicesoft.
7.17 No Solicitation. From and after the date of this Agreement
until the Effective Time or termination of this Agreement pursuant to Article
11, Broadbase and its Subsidiaries will not, nor will they authorize or permit
any of their respective officers, directors, affiliates or employees or any
investment banker, attorney or other advisor or representative retained by any
of them to, directly or indirectly solicit or initiate the making, submission or
announcement of any Acquisition with respect to Broadbase. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding sentence by any officer, director or employee of Broadbase or any
of its Subsidiaries or
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any investment banker, attorney or other advisor or representative of Broadbase
or any of its Subsidiaries shall be deemed to be a breach of this Section 7.17
by Broadbase; provided that if such violation consists of a communication by any
such advisor which was unauthorized by Broadbase and Broadbase terminates its
relationship with such advisor and with such advisor's employer, or terminates
the employment of such employee, immediately upon becoming aware of such
communication, then from and after such termination, such communication shall no
longer be deemed to constitute a material breach of this Agreement for purposes
of Sections 9.2 and 11.1(a)(ii).
7.18 Conversion of Servicesoft Canada Common Stock. If requested
by Servicesoft, Broadbase shall enter into such amendments of this Agreement as
may be necessary to allow the holders of Servicesoft Canada Common to defer
exchanging their shares until February 15, 2001, if Canadian counsel for both
Servicesoft and Broadbase reach agreement on the structure of any amendment
required to the constituent documents of Servicesoft Canada; provided that any
such amendment and any such deferred exchange of shares of Servicesoft Canada
Common stock for Exchange Shares: (i) provides for the issuance of Exchange
Shares to the holders of Servicesoft Canada common stock upon their exchange on
the same basis as if they had exchanged at or before the Effective Time of the
Merger, including the retention of ten percent (10%) of such Exchange Shares in
escrow; (ii) would not involve any adverse tax consequences for such holders or
for Servicesoft, Servicesoft Canada or Broadbase, (iii) provides that the
Exchange Shares to be issued upon conversion of the Servicesoft Canada Common
Stock will be registered on the Form S-4 (or other applicable form) to be filed
with the SEC in connection with the registration of the other Exchange Shares,
(iv) would not require the issuance or creation of any new class of preferred
stock of Broadbase, or other amendments to Broadbase's charter documents, (v)
would not involve any adverse accounting consequences for Broadbase, and (vi) be
reasonably practicable to implement.
8. CLOSING MATTERS
8.1 The Closing. Subject to termination of this Agreement as
provided in Article 11, the closing of the transactions provided for herein (the
"CLOSING") will take place at the offices of Fenwick & West LLP, Two Palo ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ no later than the third (3rd) business day
following satisfaction of waiver of all of the conditions to Closing specified
in Article 9 and Article 10 or, if all of the conditions to the Closing have not
been satisfied or waived by such date, such other place, time and date as
Servicesoft and Broadbase may mutually select (the "CLOSING DATE"). Concurrently
with the Closing or as soon thereafter as possible, the Certificate of Merger
and such officers' certificates or other documents as may be required to
effectuate the Merger will be filed in the office Delaware Secretary of State.
8.2 Exchange of Certificates.
(a) Procedures.
(i) U.S. Stock Corporation, transfer agent for
Broadbase common stock, will act as exchange agent (the "EXCHANGE AGENT") for
the Exchange Shares. On the Closing Date, Broadbase will deposit with the
Exchange Agent the Exchange Shares, to be held by the Exchange Agent until
released as provided herein. As soon as practicable after the Closing, Broadbase
shall cause to be mailed to each holder of record of a certificate(s) for shares
of Servicesoft capital stock (the "SERVICESOFT CERTIFICATES"): (A) a letter of
transmittal in form reasonably satisfactory to Broadbase (which shall (1)
include a schedule ("SCHEDULE 1") in which such holder shall identify the number
of shares of Servicesoft capital stock owned by such holder, and (2) specify
that delivery shall be effected, and risk of loss and title to the Servicesoft
Certificates shall pass, only upon delivery of the Servicesoft
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Certificates to the Exchange Agent; and (B) instructions for use in effecting
the surrender of the Servicesoft Certificates in exchange for certificates
representing Exchange Shares.
As soon as practicable after the Effective Time,
each Servicesoft Stockholder (1) will surrender either (x) the Servicesoft
Certificates to Broadbase for cancellation or (y) an affidavit of lost (or
nonissued) certificate and a bond in form and amount reasonably satisfactory to
Broadbase or the Exchange Agent (a "BOND"), (2) will execute and deliver an
indemnification agreement pursuant to which each Servicesoft Stockholder will
agree to indemnify the Indemnified Persons (as defined in Section 12.2) pursuant
to the terms of Article 12 (the "INDEMNIFICATION LETTER"), (3) will execute and
deliver a representation letter (the "SERVICESOFT STOCKHOLDER REPRESENTATION
LETTER") containing (A) representations to the effect that such Servicesoft
Stockholder (i) has valid and marketable title to the shares of Servicesoft
Common Stock or Servicesoft Preferred Stock set forth opposite such Servicesoft
Stockholder's name in Schedule 1 to the letter of transmittal, (ii) the legal
right, power and all authorizations and approvals required by applicable law to
sell, transfer and deliver the shares to be sold by such Servicesoft
Stockholder, (iii) has not sold, assigned or otherwise transferred to any third
party any of his or her right, title or interest in or to any of such shares of
Servicesoft Common Stock or Servicesoft Preferred Stock set forth on Schedule 1
to the letter of transmittal, and that there exists no pledge, lien, security
interest, claim or encumbrance whatsoever on or relating to any of such shares
of Servicesoft Common Stock or Servicesoft Preferred Stock and (B) releasing and
terminating any registration rights, rights of accelerated vesting (except such
rights as are described in Item 2.1(a)(iii)(C) of the Servicesoft Disclosure
Letter), rights of first refusal, rights to any liquidation preference or
redemption rights to which such Servicesoft Stockholder may otherwise have been
entitled, and, if such Servicesoft Stockholder is a party to the 7th Amended and
Restated Registration Rights Agreement of Servicesoft dated January 13, 2000, or
the 2nd Amended and Restated Shareholders' Agreement of Servicesoft dated
January 13, 2000 consenting to the termination of such agreement, (4) if such
Servicesoft Stockholder is an affiliate of Servicesoft, a letter agreement
signed by such Servicesoft Stockholder stating that such Stockholder shall not
sell, transfer, or otherwise dispose of, or agree to sell, transfer or otherwise
dispose of, any Exchange Shares for 90 days following the Effective Time (the
"SERVICESOFT AFFILIATE AGREEMENT"). Promptly following the Effective Time and
receipt of Servicesoft Certificates and/or the Bonds, the Indemnification
Letter, the Servicesoft Stockholder Representations, and if applicable, the
Servicesoft Affiliate Agreement, Broadbase will cause the Exchange Agent to
issue to such surrendering holder certificate(s) the number of Exchange Shares
to which such holder is entitled pursuant to Section 2.1, less the Escrow Shares
to be deposited into escrow on behalf of such holder pursuant to Section 2.2,
and will distribute any cash payable under Section 2.1(a)(vi); provided that if
the information set forth in the Servicesoft Stockholder Representations is
inconsistent with the information set forth in the Servicesoft Disclosure
Letter, then Broadbase shall be entitled to condition such issuance upon its
confirmation, to its reasonable satisfaction, that such difference will not have
any material adverse consequences to Broadbase or require the issuance of a
greater number of Exchange Shares than would have been required had such
information been consistent.
(ii) At the Effective Time, the stock transfer
books of Servicesoft will be closed and no transfer of shares of Servicesoft
capital stock will thereafter be made. If, after the Effective Time, Servicesoft
Certificates are presented for any reason, they will be canceled and exchanged
as provided in this Section 8.2; provided, however, that subject to applicable
law any Servicesoft Certificate that is not properly submitted to Broadbase for
exchange and cancellation within three years after the Effective Time shall no
longer evidence ownership of or any right to receive shares of Broadbase common
stock and all rights of the holder of such Servicesoft Certificate, with respect
to the shares previously evidenced by such Servicesoft Certificate, shall cease.
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(iii) Subject to the provisions of Section 2.2
and the Escrow Agreement with respect to the Escrow Shares, all Exchange Shares
delivered upon the surrender of Servicesoft Certificates in accordance with the
terms hereof will be deemed to have been delivered in full satisfaction of all
rights pertaining to the Servicesoft common stock evidenced by such Servicesoft
Certificates.
(b) Unexchanged Shares. Until Servicesoft Certificates
outstanding prior to the Merger (or affidavits of lost (or non-issued)
certificates and attendant Bonds) are surrendered pursuant to Section 8.2(a),
such Servicesoft Certificates will be deemed, for all purposes, to evidence
ownership of (i) the number of Exchange Shares into which the Servicesoft common
stock will have been converted (less the number of shares to be withheld as
Escrow Shares pursuant to Section 2.2) and (ii) if applicable, cash in lieu of
fractional shares.
(c) Payment of Dividends. No dividends or distributions
payable to holders of record of Broadbase common stock after the Effective Time,
or cash payable in lieu of fractional shares, will be paid to holders of any
unsurrendered Servicesoft Certificates until such holders surrender their
Servicesoft Certificates (or affidavits of lost (or non-issued) certificates and
attendant Bonds). Upon such surrender, subject to the effect, if any, of
applicable escheat and other laws, there will be delivered to such tendering
holder the amount of any dividends and distributions paid with respect to
Exchange Shares so withheld as of any date subsequent to the Effective Time and
prior to such date of delivery, less any non-cash dividends and distributions
paid with respect to the Escrow Shares (which shall be held until the Escrow
Shares are released as and to the extent provided in the Escrow Agreement)
(d) Miscellaneous.
(i) If any certificates for Exchange Shares are
to be issued in a name other than that in which the Servicesoft Certificate
surrendered in exchange therefor is registered, the following shall be
conditions of such exchange: (A) the Servicesoft Certificate must be properly
endorsed and otherwise in proper form for transfer, and (B) the person
requesting such exchange shall either pay to the Exchange Agent any transfer or
other taxes required by reason of the issuance of certificates for such Exchange
Shares in a name other than that of the registered holder of the Servicesoft
Certificate surrendered or establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not applicable.
(ii) Notwithstanding anything in this Agreement
to the contrary, neither the Exchange Agent nor any party hereto shall be liable
to a Servicesoft Stockholder for any Exchange Shares or dividends thereon or the
cash payments otherwise due hereunder delivered to a public official pursuant to
applicable abandoned property, escheat or other similar laws following the
passage of time specified therein.
8.3 Dissenting Shares. Notwithstanding anything to the contrary
in this Agreement:
(a) No Dissenting Shares will be converted into or
represent a right to receive the consideration described in Section 2.1(a)(i).
Instead, each holder of Dissenting Shares will be entitled only to such rights
as are granted by Delaware Law for Dissenting Shares. The Exchange Shares to
which such dissenting Servicesoft Stockholders would have been entitled had each
assented to the merger, will have the status of authorized and unissued shares
of Broadbase.
(b) For each Servicesoft Stockholder who complies with
all requirements for obtaining stockholders' rights of appraisal with respect to
such shares, but subsequently loses (through the failure to perfect or
otherwise) or effectively withdraws such demand for such rights of appraisal in
accordance with Delaware Law, such holder's shares shall, as of the Effective
Time (or, if
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after the Effective Time, upon the occurrence of such event) automatically be
converted into and represent only the right to receive the consideration
described in Section 2.1 upon surrender of the applicable certificate(s) as
provided in Section 8.2.
(c) Servicesoft shall comply with the notice and other
procedural requirements set forth in Section 262 of Delaware Law with respect to
any Servicesoft Stockholder that properly demands stockholders' rights of
appraisal for such Servicesoft shares and that has not lost or effectively
withdrawn such demand for such rights of appraisal rights. Broadbase shall have
the opportunity to participate in all negotiations and proceedings with respect
to such demands. Servicesoft shall not, except with the prior written consent of
Broadbase, voluntarily make any payment with respect to any demands for the
exercise of appraisal rights or offer to settle or settle any such demands.
8.4 Employee Plans. As of the Effective Time, Broadbase and
Servicesoft shall take such actions as are necessary to effect the mutually
acceptable employee benefit and compensation arrangements as determined pursuant
to Section 6.12.
9. CONDITIONS TO OBLIGATIONS OF SERVICESOFT
Servicesoft'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 Servicesoft, but only in a
writing signed on behalf of Servicesoft by its Chief Executive Officer or Chief
Financial Officer:
9.1 Accuracy of Representations and Warranties. Each of the
representations and warranties of Broadbase and Newco set forth in Article 5 of
this Agreement shall be true and correct in all material respects (or in all
respects, to the extent any such representation and warranty is already
qualified by materiality) on and as of the date hereof and on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date, except that to the extent such
representations and warranties address matters only as of a particular date,
such representations and warranties shall, to such extent, be true and correct
as of the date hereof and on and as of such particular date as if made on and as
of such particular date.
9.2 Covenants. Broadbase shall have performed and complied in
all material respects with all of its covenants contained in Article 7 on or
before the Closing Date, and Servicesoft shall have received a certificate to
such effect executed on behalf of Broadbase an officer of Broadbase.
9.3 Absence of Material Adverse Effect. No change, circumstance
or effect that is or is reasonably likely to be materially adverse to the
business, employees, assets (including intangible assets), capitalization,
financial condition, operations or results of operations of Broadbase shall have
occurred since the date of this Agreement and be continuing.
9.4 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 transactions
contemplated by this Agreement.
9.5 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 actions, as may be required to consummate the Merger by
any regulatory authority having jurisdiction over the parties and the actions
herein proposed to be taken, including but not limited to satisfaction of all
requirements under applicable federal and state securities laws.
9.6 Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order and the
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Prospectus/Proxy Statement shall on the Closing not be subject to any
proceedings commenced or threatened by the SEC.
9.7 Requisite Approvals. The principal terms of this Agreement,
the Merger and the Certificate of Merger shall have been approved and adopted by
the written consent or vote of: (a) the Servicesoft Stockholders, as required by
applicable law and Servicesoft's certificate of incorporation and by-laws, (b)
Broadbase stockholders, and (c) Broadbase's Board of Directors.
9.8 Opinion of Broadbase's Counsel. Servicesoft shall have
received from Fenwick & West LLP, counsel to Broadbase, an opinion letter in
substantially the form attached hereto as Exhibit F, dated as of the Closing
Date.
9.9 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance. All applicable waiting periods
under the HSR Act shall have expired or early termination shall have been
granted.
9.10 Election of Servicesoft Designees to the Board of Directors
of Broadbase. The Board of Directors of Broadbase shall have taken appropriate
action to elect ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and another person to be designated by the
mutual agreement of the parties hereto, to the Board of Directors of Broadbase,
effective upon the Effective Time and, if applicable, one (1) additional person
mutually acceptable to Broadbase and Servicesoft in the event the Board of
Directors of Broadbase shall consist of seven (7) or more members, as
contemplated by Section 7.11.
9.11 Absence of Litigation. No litigation or proceeding shall be
pending which could reasonably be expected to have the effect of enjoining or
preventing the consummation of any of the transactions provided for in this
Agreement. No litigation or proceeding shall be pending which could reasonably
be expected to have a Material Adverse Effect on Broadbase that has not been
previously disclosed to Servicesoft herein.
10. CONDITIONS TO OBLIGATIONS OF BROADBASE
The obligations of Broadbase 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 Broadbase, but only in a
writing signed on behalf of Broadbase by its Chief Executive Officer or Chief
Financial Officer:
10.1 Accuracy of Representations and Warranties. Each of the
representations and warranties of Servicesoft set forth in Article 4 of this
Agreement shall be true and correct in all material respects (or in all
respects, to the extent any such representation and warranty is already
qualified by materiality) on and as of the date hereof and on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date, except that, to the extent such
representations and warranties address matters only as of a particular date,
such representations and warranties shall, to such extent, be true and correct
on and as of the date hereof and on and as of such particular date as if made on
and as of such particular date.
10.2 Covenants. Servicesoft shall have performed and complied in
all material respects with all of its covenants contained in Article 6 on or
before the Closing Date, and Broadbase shall have received a certificate to such
effect executed on behalf of Servicesoft by the President, Chief Executive
Officer or Chief Financial Officer of Servicesoft.
10.3 Absence of Material Adverse Effect. No change, circumstance
or effect that is or is reasonably likely to be materially adverse to the
business, employees, assets (including intangible assets), capitalization,
financial condition, operations or results of operations of Servicesoft shall
have occurred since the date of this Agreement and be continuing.
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10.4 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 transactions
contemplated by this Agreement.
10.5 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 Merger by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken, including but not limited to satisfaction of all
requirements under applicable federal and state securities laws.
10.6 Form S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order and the Prospectus/Proxy Statement shall on the Closing not
be subject to any proceedings commenced or threatened by the SEC.
10.7 Requisite Approvals. The principal terms of this Agreement,
the Merger and the Certificate of Merger shall have been approved and adopted by
the written consent or vote of: (a) the Servicesoft Stockholders, (b)
Servicesoft's Board of Directors, and (c) the Broadbase stockholders.
10.8 Conversion of Preferred Stock. Subject to Section 7.18, all
shares of Servicesoft Canada Preferred Stock and Servicesoft Canada Common Stock
shall have been exchanged for shares of Servicesoft Series H Preferred Stock and
Servicesoft Common Stock, respectively, in accordance with the terms of the
organizational and other constituent documents of Servicesoft Canada. All
outstanding shares of Servicesoft Preferred Stock (including shares of
Servicesoft Series H Preferred Stock issued or issuable pursuant to the
condition stated in the preceding sentence but excluding shares of Series X
Preferred Stock and Series Y Preferred Stock) shall have been converted into
shares of Servicesoft Common Stock in accordance with the terms of Servicesoft's
certificate of incorporation.
10.9 Third-Party Consents; Assignments; Other Documents.
Broadbase shall have received: (a) duly executed copies of all material
third-party consents, approvals, assignments, waivers, authorizations or other
certificates set forth on Schedule 3 hereto; and (b) any other written consents,
assignments, waivers, authorizations or other certificates where, in the case of
this clause (b), the failure to have received the same would have a Material
Adverse Effect on Servicesoft.
10.10 Dissenting Shares. The number of Dissenting Shares shall
not constitute more than ten percent (10%) of the total number of shares of
Servicesoft common stock (on an as-if converted to Servicesoft common stock
basis) outstanding immediately prior to the Effective Time.
10.11 Resignations. Broadbase shall have received an executed
letter from each member of the Board of Directors and each officer of
Servicesoft immediately prior to the Effective Time of the Merger to the effect
that each such director and/or officer agrees to resign his or her post as a
director or officer of the Surviving Corporation effective as of the Effective
Time of the Merger.
10.12 Escrow Agreement. Broadbase shall have received the Escrow
Agreement, executed by Servicesoft and in substantially the form attached hereto
as Exhibit E, providing for the escrow of the Escrow Shares.
10.13 Opinion of Servicesoft's Counsel. Broadbase shall have
received from ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel to Servicesoft, an opinion letter
in substantially the form attached hereto as Exhibit G, dated as of the Closing
Date.
10.14 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance. All applicable waiting
periods under the HSR Act shall have expired or early termination shall have
been granted.
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10.15 Affiliates Letter. Servicesoft shall have delivered to
Broadbase the letter required by Section 6.16 naming all persons who are
"affiliates" of Servicesoft for purposes of Rule 145 under the Securities Act.
10.16 Absence of Litigation. No litigation or proceeding shall
be pending which could reasonably be expected to have the effect of enjoining or
preventing the consummation of any of the transactions provided for in this
Agreement. No litigation or proceeding shall be pending which could reasonably
be expected to have a Material Adverse Effect on Servicesoft that has not been
previously disclosed to Broadbase herein.
10.17 Section 280G Approval. Any agreement, plan or arrangement
to which Servicesoft or any Subsidiary is a party that would be reasonably
likely to give rise to the payment of any amount that would not be deductible
pursuant to Sections 280G of the Code ("SECTION 280G") shall have been approved
by the holders of such percentage of the outstanding Servicesoft Preferred Stock
and Servicesoft Common Stock (excluding shares held by the person that is or
would be the beneficiary or recipient of such payment) as may be required in
order that Section 280G not apply to limit the deductibility of such payment,
and any "disqualified individuals" as defined in Section 280G shall have agreed
to forfeit any payments that would otherwise be non-deductible if shareholder
approval is not so obtained.
11. TERMINATION OF AGREEMENT
11.1 Right to Terminate.
(a) This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before or after
approval by the Servicesoft Stockholders:
(i) by the mutual written consent of Servicesoft
and Broadbase;
(ii) by either Servicesoft or Broadbase, if such
party (including its stockholders) is not in material breach of any
representation, warranty, covenant or agreement contained in this Agreement, and
such other party is in material breach of any representation, warranty, covenant
or agreement contained in this Agreement, or if any representation of such other
party will have become untrue, in either case to an extent that would cause the
conditions set forth in Article 9 (for Servicesoft) or Article 10 (for
Broadbase) not to be satisfied and such breaching party fails to cure such
material breach within 15 days of written notice of such material breach from
the non-breaching party (except that no cure period will be provided for a
breach which by its nature cannot be cured);
(iii) by either Servicesoft or Broadbase, if the
Merger shall not have been consummated by February 28, 2001 for any reason;
provided, however, that the right to terminate this Agreement under this Section
11(a)(iii) shall not be available to any party whose action or failure to act
has been a principal cause of or resulted in the failure of the Merger to occur
on or before such date and such action or failure to act constitutes a breach of
this Agreement;
(iv) by either Servicesoft or Broadbase, if
there is a final nonappealable order of a federal or state court in effect
preventing consummation of the Merger, or if any statute, rule, regulation or
order is enacted, promulgated or issued or deemed applicable to the Merger by
any governmental body that would make consummation of the Merger illegal;
(v) by either Servicesoft or Broadbase if the
required approval of the Servicesoft Stockholders contemplated by this Agreement
shall not have been obtained by reason of the failure to obtain the required
vote by written consent or at a meeting of the Servicesoft Stockholders duly
convened therefore or at any adjournment thereof; provided, however, that the
right to terminate this Agreement under this 11.1(a)(v) shall not be available
to Servicesoft where the failure to obtain the Servicesoft Stockholder approval
shall have been caused by the action or failure to act of Servicesoft (or
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an officer or director of Servicesoft) and such action or failure to act
constitutes a material breach of this Agreement;
(vi) by either Servicesoft or Broadbase, if the
required approval of Broadbase Stockholders contemplated by this Agreement shall
not have been obtained by reason of the failure to obtain the required votes at
a meeting of Broadbase stockholders duly convened therefore or at any
adjournment thereof; provided, however, that the right to terminate this
Agreement under this Section 11.1(a)(vi) shall not be available to Broadbase
where the failure to obtain the Broadbase stockholder approvals shall have been
caused by the action or failure to act of Broadbase and such action or failure
to act constitutes a material breach by Broadbase of this Agreement;
11.2 Termination Procedures. If either party wishes to terminate
this Agreement pursuant to Section 11.1, such party shall deliver to the other
party a written notice stating that such party is terminating this Agreement and
setting forth a brief description of the basis of such termination. Termination
of this Agreement will be effective upon the delivery of such notice.
11.3 Continuing Obligations. In the event of the termination of
this Agreement as provided in Section 11.1, this Agreement shall be of no
further force or effect, except (i) as set forth in Section 7.12(b), this
Section 11.3, Section 11.4 and Article 12, each of which shall survive the
termination of this Agreement, and (ii) nothing herein shall relieve any party
from liability for any willful breach of this Agreement. No termination of this
Agreement shall affect the obligations of the parties pursuant to any agreement
to maintain the confidentiality of information regarding the other party, all of
which obligations shall survive termination of this Agreement in accordance with
their terms.
11.4 Termination Fee.
(a) In the event that this Agreement is terminated (x)
by Broadbase under Section 11.1(a)(ii) or (y) by either Broadbase or Servicesoft
under Section 11.1(a)(v), Servicesoft shall promptly, but in no event later than
two days after the date of such termination, pay Broadbase a fee equal to $12.5
million in immediately available funds (the "SERVICESOFT TERMINATION FEE");
provided, however, that in the case of termination pursuant to Section
11.1(a)(ii), such payment shall be made only if (1) following the date of this
Agreement and prior to the termination of this Agreement, a person has publicly
announced an Acquisition Proposal and (2) within nine months following the
termination of this Agreement, either an Acquisition Transaction is consummated,
or Servicesoft enters into an agreement providing for an Acquisition
Transaction, in which case such termination fee shall be paid within two days of
the consummation of such Acquisition Transaction.
(b) In the event that this Agreement is terminated by
Servicesoft under Section 11.1(a)(ii) or by either Broadbase or Servicesoft
under Section 11.1(a)(vi), Broadbase shall promptly, but in no event later than
two days after the date of such termination, pay Servicesoft a fee equal to
$12.5 million in immediately available funds (the "BROADBASE TERMINATION FEE");
provided, however, that in the case of termination pursuant to Section
11.1(a)(ii), such payment shall be made only if (1) following the date of this
Agreement and prior to the termination of this Agreement, a person has publicly
announced an Acquisition Proposal and (2) within nine months following the
termination of this Agreement, either an Acquisition Transaction is consummated,
or Broadbase enters into an agreement providing for an Acquisition Transaction.
If any principal or interest under any of the Loans contemplated by Section 7.12
remain outstanding, then the Broadbase Termination Fee payable by Broadbase
pursuant to this Section 11.4(b) shall be reduced by the amount of the
outstanding Loans owed by Servicesoft. In addition, in the event that (1) this
Agreement is terminated by Broadbase or Servicesoft under Section 11.1(a)(vi)
and (2) either (x) the Form S-4 and the Prospectus/Proxy Statement did not
include, pursuant to Section 7.5 of this Agreement, a statement to the effect
that Broadbase's
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Board of Directors has recommended that Broadbase Stockholders vote in favor of
the Broadbase Stockholder Approvals or (y) the Board of Directors of Broadbase
(or a committee thereof) shall have withdrawn, amended or modified, in a manner
adverse to Servicesoft, the recommendation of the Board of Directors of
Broadbase that the stockholders of Broadbase vote in favor of the Broadbase
Stockholder Proposals, then the outstanding principal of, and accrued interest
on, the Loans shall be immediately deemed to have been repaid in full and all
remaining amounts available with respect to the Loans shall be paid to
Servicesoft at such time as the payment of the Broadbase termination fee,
without any recourse to, or further obligation on the part of, Servicesoft.
(c) Each party hereto acknowledges that the agreements
contained in this Section 11.4 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, the other
party would not enter into this Agreement. Accordingly, if any party hereto
fails to pay in a timely manner the amounts due pursuant to this Section 11.4,
and, in order to obtain such payment, the other party makes a claim that results
in a judgment against the breaching party for the amounts set forth in this
Section 11.4, the breaching party shall pay to the other party such other
party's reasonable costs and expenses (including reasonable attorneys' fees and
expenses) in connection with such suit, together with interest on the amounts
set forth in this Section 11.4 at the prime rate of The Chase Manhattan Bank in
effect on the date such payment was required to be made. Absent a willful breach
of this Agreement, any Servicesoft Termination Fee or Broadbase Termination Fee
paid pursuant to this Section 11.4 shall be the sole liability of the paying
party.
12. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES,
CONTINUING COVENANTS
12.1 Survival of Representations. All representations,
warranties, covenants and agreements of Broadbase and Servicesoft 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 and the expiration of the
Escrow Period, whereupon such representations, warranties, covenants and
agreements will expire.
12.2 Agreement to Indemnify. Subject to the limitations set
forth in this Article 12, the Servicesoft Stockholders will severally indemnify
and hold harmless Broadbase and its officers, directors, agents and employees,
and each person, if any, who controls or may control Broadbase 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
and costs (hereinafter referred to as "DAMAGES") directly or indirectly arising
out of or resulting from:
(a) any misrepresentation or breach of or default in
connection with any of the representations, warranties, agreements and covenants
given or made by Servicesoft in this Agreement or any certificate, document or
instrument delivered by or on behalf of Servicesoft pursuant hereto;
(b) any Excess Expenses; or
(c) any failure of each Servicesoft Stockholder to have
good, valid and marketable title to the issued and outstanding Servicesoft
Capital Stock identified in Schedule 1 to such Servicesoft Stockholder's Letter
of Transmittal, free and clear of all liens, claims, pledges, options, adverse
claims, assessments or charges of any nature whatsoever ("OWNERSHIP LOSSES");
provided, however, that for purposes of the foregoing clause (c), the
Indemnified Person may only seek and recover Damages from the Servicesoft
Stockholder who failed to have good, valid and marketable
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title to such shares of Servicesoft Capital Stock free and clear of all liens,
claims, pledges, options, adverse claims, assessments or charges.
12.3 Limitations on Liability; Exceptions.
(a) Limitations on Liability. Subject to Section
12.3(c), the Escrow Shares and any other assets deposited in escrow pursuant to
the Escrow Agreement shall be the Indemnified Persons' sole recourse against the
Servicesoft Stockholders under this Agreement, and no claim for Damages shall
first be made under Section 12.2 after expiration of the Escrow Period. Except
as set forth in Section 12.3(c), the remedies set forth in this Article 12 shall
be the exclusive remedies of Broadbase and the other Indemnified Persons against
any Servicesoft Stockholder under any theory or liability.
(b) Threshold. Except for indemnification with respect
to Excess Expenses, the indemnification provided for in this Article 12 shall
not apply unless and until the aggregate Damages for which one or more
Indemnified Persons seeks indemnification exceeds $1,000,000, in which event the
indemnification provided for in this Article 12 will include the aggregate of
all Damages; provided, however, that this Section 12.3(b) shall not apply to
liability or indemnification obligations of the Servicesoft Stockholders with
respect to any matter or claim described in Section 12.2(b).
(c) Exceptions to Limitations on Liability. None of the
limitations set forth in Sections 12.3(a) or 12.3(b) shall in any manner limit
the liability or indemnification obligations of the Servicesoft Stockholders
with respect to: (i) intentional fraud; or (ii) any Ownership Losses.
Notwithstanding the foregoing, in no event shall any Servicesoft Stockholder be
liable for any amounts in excess of the value of the aggregate consideration
received by such Servicesoft Stockholder in connection with the Merger
(determined as set forth in Section 4.5 of the Escrow Agreement); provided,
however, that such limitation shall not apply to Damages resulting from
intentional fraud by such Servicesoft Stockholder. In the event of intentional
fraud, the Indemnified Persons agree that they shall seek indemnification
against the Escrow Shares pro rata pursuant to the terms of the Escrow Agreement
then available under the Escrow Agreement and shall only be entitled to receive
indemnification for such claims directly from the Servicesoft Stockholders if
all of the Escrow Shares have been released pursuant to the terms of the Escrow
Agreement.
12.4 Survival of Claims. Notwithstanding anything herein to the
contrary, if, prior to the expiration of the Escrow Period, an Indemnified
Person makes a claim for indemnification under either this Agreement or the
Escrow Agreement with respect to a misrepresentation or breach of such
representation, warranty or covenant, then the Indemnified Person's rights to
indemnification under this Article 12 for such claim shall survive the
expiration of the Escrow Period. In addition, notwithstanding anything herein to
the contrary, the obligation of each Servicesoft Stockholder to indemnify the
Indemnified Persons for any Damages resulting directly or indirectly from the
failure of such Servicesoft Stockholders to have good, valid and marketable
title to the issued and outstanding Servicesoft Capital Stock identified in
Schedule 1 to such Servicesoft Stockholder's Letter of Transmittal, free and
clear of all liens, claims, pledges, options, adverse claims, assessments or
charges of any nature whatsoever shall continue in effect for the duration of
the applicable statute of limitations.
12.5 No Indemnity for Corporate Agents. Each of the indemnifying
Servicesoft Stockholders agrees that such Servicesoft Stockholder will not make
any claim for indemnification against Servicesoft by reason of the fact that
such indemnifying stockholder was a director, officer, employee or agent of any
such entity or was serving at the request of any such entity as a partner,
trustee, director, officer, employee or agent of another entity (whether such
claims is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expense or otherwise and whether such claim is
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pursuant to any statute, charter document, bylaw, agreement or otherwise) with
respect to any action, suit, proceeding, complaint, claim or demand brought by
Broadbase against the indemnifying stockholder pursuant to Section 12.2 or
otherwise in its capacity as a Servicesoft Stockholder (whether such action,
suit, proceeding, complaint, claim or demand is pursuant to this Agreement,
applicable law or otherwise).
12.6 Servicesoft Stockholders' Representative.
(a) Authority. The Servicesoft Stockholders, by their
approval of the Merger and/or their tender pursuant to Section 8.2 of
Servicesoft Certificates, will be conclusively deemed to have consented to,
approved and agreed to be personally bound by: (a) the indemnification
provisions of Article 12, (b) the Escrow Agreement, (c) the appointment of ▇▇▇▇
▇▇▇▇▇▇▇▇▇ as the Representative of the Servicesoft Stockholders under the Escrow
Agreement and as the attorney-in-fact and agent for and on behalf of the
Servicesoft Stockholders (including their successors and assigns) as provided in
the Escrow Agreement and (d) the taking by the Representative of any and all
actions and the making of any decisions required or permitted to be taken by the
Representative under the Escrow Agreement, including, without limitation, the
exercise of the power to: (i) authorize delivery to Broadbase of Escrow Shares
in satisfaction of indemnity claims by Broadbase or any other Indemnified Person
(as defined herein) pursuant to Article 12 and/or the Escrow Agreement; (ii)
agree to, negotiate, enter into settlements and compromises of, demand
arbitration of, and comply with orders of courts and awards of arbitrators with
respect to, such claims; (iii) arbitrate, resolve, settle or compromise any
claim for indemnity made pursuant to Article 12; (iv) waive any right of any or
all of the Servicesoft Stockholders following the Merger with respect to matters
set forth in this Agreement, the Escrow Agreement or any other agreement
contemplated by this Agreement; (v) give and receive all notices required to be
given under this Agreement and the Escrow Agreement; and (vi) take all actions
necessary in the sole judgment of the Representative for the accomplishment of
the foregoing. The Representative will have unlimited authority and power to act
on behalf of the Servicesoft Stockholders with respect to the Escrow Agreement
and the disposition, settlement or other handling of all claims governed by the
Escrow Agreement, and all rights or obligations arising under the Escrow
Agreement so long as all Servicesoft Stockholders are treated in the same
manner. The Representative is authorized to take any actions deemed by him to be
appropriate or reasonably necessary to carry out the provisions of Article 12
hereof. In addition, the Representative is authorized to accept service of
process upon the Servicesoft Stockholders. All decisions and actions of the
Representative in connection with this Agreement and the Escrow Agreement shall
be binding and conclusive upon the Servicesoft Stockholders, and Broadbase, the
Surviving Corporation and the Escrow Agent will be entitled to rely on any
action or decision of the Representative. The Representative will not be a
trustee for any Servicesoft Stockholder or have any fiduciary duty to any
Servicesoft Stockholder, and in performing the functions specified in this
Agreement and the Escrow Agreement, the Representative will not be liable to any
Servicesoft Stockholders for any act or omission the Representative made in good
faith and in the exercise of reasonable judgment. As provided in the Escrow
Agreement, any out-of-pocket costs and expenses reasonably incurred by the
Representative in connection with actions taken pursuant to the terms of the
Escrow Agreement, at the Representative's option, either (i) will be paid by the
Servicesoft Stockholders to the Representative or (ii) if shares are available
for distribution to the Servicesoft Stockholders pursuant to the Escrow
Agreement, at the request of the Representative, a portion of those shares will
be sold by the Escrow Agent and the proceeds paid to or at the direction of the
Representative, in either case, pro rata in proportion to the Servicesoft
Stockholders' respective percentage interests in the Escrow Shares.
(b) Standard of Conduct. Neither the Representative nor
any of his partners, members, directors, officers, employees or agents shall be
liable to any of the Servicesoft Stockholders
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for any error of judgment, act done or omitted by them, or mistake of fact or
law in connection with his services pursuant to Article 12, unless caused by his
own gross negligence or willful misconduct. In taking any action or refraining
from taking any action whatsoever the Representative shall be protected in
relying upon any notice, paper or other document reasonably believed by him to
be genuine, or upon any evidence reasonably deemed by him to be sufficient. The
Representative shall not be required to take any action which is contrary to
this Agreement, the Escrow Agreement or applicable law. The Representative may
consult with counsel in connection with his duties and shall be fully protected
in any act taken, suffered or permitted by them in good faith in accordance with
the advice of counsel. In connection with their services under Article 12, the
Representative shall not be responsible for determining or verifying the
authority of any person acting or purporting to act on behalf of any party to
this Agreement.
(c) Indemnification. Each Servicesoft Stockholder agrees
to indemnify the Representative, ratably in accordance with his or her pro rata
share of the Escrow Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against the Representative in any way relating to or arising out
of this Agreement or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or the enforcement of
any of the terms hereof or thereof or of any such other documents; provided,
however, that no Servicesoft Stockholder shall be liable for any of the
foregoing to the extent they arise from the Representative's gross negligence or
willful misconduct. The Representative shall be fully justified in refusing to
take or to continue to take any action hereunder unless he shall first be
indemnified to his reasonable satisfaction by the Servicesoft Stockholders
against any and all liability and expense which may be incurred by him by reason
of taking or continuing to take any such action.
(d) Resignation or Removal of the Representative.
Subject to the appointment and acceptance of a successor Representative as
provided below, the Representative may (i) resign at any time thirty (30) days
subsequent to giving notice thereof to the Servicesoft Stockholders, and (ii) be
removed at any time with or without cause by action of the Servicesoft
Stockholders who represented a majority of the rights to the Escrow Shares. Upon
any such resignation or removal, holders of a majority of the Escrow Shares may
appoint a successor Representative, which successor shall be reasonably
acceptable to Broadbase. If no successor Representative shall have been
appointed by the Servicesoft Stockholders and accepted such appointment within
twenty (20) days after the retiring Representative's giving of notice of
resignation or the Servicesoft Stockholders' removal of the Representative, then
the retiring or removed Representative may, on behalf of the Servicesoft
Stockholders, appoint a successor, which shall be reasonably acceptable to
Broadbase. Upon the acceptance of any appointment as the Representative
hereunder, such successor Representative shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Representative, and the retiring or removed Representative shall be
discharged from his duties and obligations hereunder. After any retiring
Representative's resignation or removal hereunder as the Representative, the
provisions of Article 12 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as the
Representative.
(e) Representative as Servicesoft Stockholder. The
Representative, to the extent he is or was a Servicesoft Stockholder, shall have
the same rights and powers under this Agreement as any other Servicesoft
Stockholder and may exercise the same as though he were not serving as the
Representative, and the term "Servicesoft Stockholder" shall include the
Representative in his capacity as such.
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13. MISCELLANEOUS
13.1 Entire Agreement. The Letter Agreement between Servicesoft
and Broadbase dated August 17, 2000 with respect to non-disclosure of
confidential information, this Agreement and the exhibits hereto constitute the
entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance or usage of trade
inconsistent with any of the terms hereof.
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 party 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 No Third Party Beneficiaries. 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, employee or any party hereto or any
other Person unless specifically provided otherwise herein, and, except as so
provided, all provisions hereof will be personal solely between the parties to
this Agreement.
13.4 No Joint Venture. Nothing contained in this Agreement will
be deemed or construed as creating a joint venture or partnership between 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 the parties'
status is, and at all times, will continue to be, that of independent
contractors 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.
13.5 Construction of Agreement. This Agreement has been
negotiated by the respective parties hereto and their attorneys and have been
reviewed by each party hereto. Accordingly, no ambiguity in the language hereof
will be construed for or against either party.
13.6 Severability. If any provision of this Agreement, or the
application thereof, is for any reason held to any extent to 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
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.
13.7 Section Headings. A reference to an Article, Section,
Exhibit or Schedule will mean an Article or Section in, or an Exhibit or
Schedule to, this Agreement, unless otherwise explicitly set forth. The titles
and headings in this Agreement are for reference purposes only and will not in
any manner limit the construction of this Agreement. For the purposes of such
construction, this Agreement will be considered as a whole.
13.8 Amendment, Extension and Waivers. At any time prior to the
Effective Time, Broadbase, Newco and Servicesoft may, to the extent legally
allowed: (a) extend the time for performance of any of the obligations of the
other party; (b) waive any inaccuracies in the representations and warranties
made to such party contained herein or in any document delivered pursuant
thereto; and (c) waive compliance with any of the agreements, covenants or
conditions for the benefit of such party contained herein. Any term or provision
of this Agreement may be amended. Any agreement to any amendment, extension or
waiver will be valid only if set forth in writing and signed by
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the party to be bound. 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. 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
Servicesoft Stockholders, but, after such approval, no amendment will be made
which by applicable law requires the further approval of the Servicesoft
Stockholders without obtaining such further approval.
13.9 Governing Law. The validity of this Agreement the
construction of its terms, and the interpretation and enforcement of the rights
and duties of the parties of this Agreement will be exclusively governed by and
construed in accordance with the internal laws of the State of Delaware, as
applied to agreements entered into solely between residents of and to be
performed entirely in the State of California, without reference to that body of
law relating to conflicts of law or choice of law.
13.10 Dispute Resolution. Any dispute hereunder ("DISPUTE")
shall be settled by arbitration, to be held in Wilmington, Delaware, and, except
as herein specifically stated, in accordance with the commercial arbitration
rules of the American Arbitration Association ("AAA RULES") then in effect.
However, in all events, these arbitration provisions shall govern over any
conflicting rules which may now or hereafter be contained in the AAA Rules. Any
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction over the subject matter thereof. The arbitrator shall have
the authority to grant any equitable and legal remedies that would be available
in any judicial proceeding instituted to resolve a Dispute.
(a) Compensation of Arbitrator. Any such arbitration
will be conducted before a single arbitrator who will be compensated for his or
her services at a rate to be determined by the parties or by the American
Arbitration Association, but based upon reasonable hourly or daily consulting
rates for the arbitrator in the event the parties are not able to agree upon his
or her rate of compensation.
(b) Selection of Arbitrator. The American Arbitration
Association will have the authority to select an arbitrator from a list of
arbitrators who are lawyers familiar with Delaware contract law; provided,
however, that such lawyers cannot work for a firm then performing services for
either party, that each party will have the opportunity to make such reasonable
objection to any of the arbitrators listed as such party may wish and that the
American Arbitration Association will select the arbitrator from the list of
arbitrators as to whom neither party makes any such objection. In the event that
the foregoing procedure is not followed, each party will choose one person from
the list of arbitrators provided by the American Arbitration Association
(provided that such person does not have a conflict of interest), and the two
persons so selected will select from the list provided by the American
Arbitration Association the person who will act as the arbitrator.
(c) Payment of Costs. Broadbase and Servicesoft, or
Broadbase and the Servicesoft Stockholders after the Closing, will bear the
expense of deposits and advances required by the arbitrator in equal
proportions, but either party may advance such amounts, subject to recovery as
an addition or offset to any award. The arbitrator will award to the prevailing
party, as determined by the arbitrator, all costs, fees and expenses related to
the arbitration, including reasonable fees and expenses of attorneys,
accountants and other professionals incurred by the prevailing party.
(d) Burden of Proof. For any Dispute submitted to
arbitration, the burden of proof will be as it would be if the claim were
litigated in a judicial proceeding.
(e) Award. Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator will render findings of fact and
conclusions of law and a written opinion setting forth the
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basis and reasons for any decision reached and will deliver such documents to
each party to this Agreement along with a signed copy of the award.
(f) Terms of Arbitration. The arbitrator chosen in
accordance with these provisions will not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions of
this Agreement.
(g) Exclusive Remedy. Except as specifically otherwise
provided in this Agreement, arbitration will be the sole and exclusive remedy of
the parties for any Dispute arising out of this Agreement.
13.11 Other Remedies. Except as otherwise provided in Section
12.3 or elsewhere 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.
13.12 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 mail or express delivery, postage prepaid, and will be deemed
given upon actual delivery or, if mailed by registered or certified mail, on the
third business day following deposit in the mails, addressed as follows:
If to Broadbase: Broadbase Software, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Bay
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Fenwick & West LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Servicesoft: Servicesoft, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇ III, P.C.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the party in question may
have furnished to the other party by written notice given in accordance with
this Section 13.12.
13.13 Time is of the Essence. The parties hereto acknowledge and
agree that time is of the essence in connection with the execution, delivery and
performance of this Agreement.
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13.14 Effect of Disclosure Letters. Notwithstanding anything to
the contrary contained in this Agreement or in either of the Servicesoft
Disclosure Letter or the Broadbase Disclosure Letter (the "DISCLOSURE LETTERS"),
any information disclosed in any part of either of such Disclosure Letters shall
be deemed to be disclosed in any other part of such Disclosure Letter to which
such information is relevant, to the extent it is reasonably apparent from the
information disclosed that it is relevant to such other part.
13.15 Counterparts. This Agreement may be executed in
counterparts, each of which will be an original as regards any party whose name
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, bear the signatures of both parties
reflected hereon as signatories.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BROADBASE SOFTWARE, INC.
By:
---------------------------------
Name: ▇▇▇▇▇ Bay
Title: President and Chief Executive
Officer
SERVICESOFT, INC.
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
SOLDIER ACQUISITION CORP.
By:
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
[SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER]
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EXHIBITS AND SCHEDULES
Exhibits
Exhibit A: Form of Certificate of Merger
Exhibit B: Form of Voting Agreement
Exhibit C: Form of Employment and Non-Competition Agreement
Exhibit D: Form of Convertible Promissory Note
Exhibit E: Form of Escrow Agreement
Exhibit F: Form of Opinion of Counsel to Broadbase and Newco
Exhibit G: Form of Opinion of Counsel to Servicesoft
Schedules
Schedule 1: Certain Servicesoft and Broadbase Stockholders
Schedule 2: Certain Servicesoft Employees
Schedule 3: Third Party Consents
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CERTIFICATE OF MERGER
FOR THE MERGER OF
SOLDIER ACQUISITION CORP.
WITH AND INTO
SERVICESOFT, INC.
-----------------------------------------------
PURSUANT TO SECTION 251(c) OF THE
DELAWARE GENERAL CORPORATION LAW
-----------------------------------------------
Servicesoft, Inc., a Delaware corporation ("SERVICESOFT"), does hereby
certify to the following facts relating to the merger (the "MERGER") of Soldier
Acquisition Corp., a Delaware corporation ("SOLDIER"), with and into
Servicesoft, with Servicesoft to be the surviving corporation of the Merger (the
"SURVIVING CORPORATION"):
FIRST: Servicesoft and Soldier are the constitutent corporations in the
Merger. Servicesoft is a corporation incorporated pursuant to the
laws of the State of Delaware, and Soldier is a corporation
incorporated pursuant to the laws of the State of Delaware.
SECOND: An Agreement and Plan of Merger has been approved, adopted,
certified, executed and acknowledged by Servicesoft and by Soldier
in accordance with the provisions of subsection (c) of Section 251
of the Delaware General Corporation Law (the "DGCL").
THIRD: The Surviving Corporation will be Servicesoft, Inc.
FOURTH: Upon the effectiveness of the Merger, the Restated Certificate of
Incorporation of Servicesoft shall be amended and restated to read
in its entirety as set forth in Exhibit A attached hereto.
FIFTH: The executed Agreement and Plan of Merger is on file at the
principal place of business of Servicesoft, the Surviving
Corporation, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
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SIXTH: A copy of the executed Agreement and Plan of Merger will be
furnished by Servicesoft, the Surviving Corporation, on request and
without cost, to any stockholder of any constituent corporation of
the Merger.
SEVENTH: This Certificate of Merger shall become effective at ______ p.m.
Eastern Time on _____________, ______.
IN WITNESS WHEREOF, Servicesoft has caused this Certificate to be
executed by its duly authorized President as of _____________, ______.
SERVICESOFT, INC.
By:
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Chief Executive Officer and President
-2-
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EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SERVICESOFT, INC.
ARTICLE I
The name of the corporation is Servicesoft, Inc.
ARTICLE II
The address of the registered office of the corporation in the State of
Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇. The name of its registered agent at the address is The Corporation Trust
Company.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock which the corporation
has authority to issue is One Thousand (1,000) shares, all of which shall be
Common Stock, $0.001 par value per share.
ARTICLE V
The Board of Directors of the corporation shall have the power to adopt,
amend or repeal Bylaws of the corporation.
ARTICLE VI
Election of directors need not be by written ballot unless the Bylaws of
the corporation shall so provide.
ARTICLE VII
To the fullest extent permitted by law, no director of the corporation
shall be personally liable for monetary damages for breach of fiduciary duty as
a director; provided, however, that this limitation of liability of a director
of the corporation shall not apply with respect to (i) any breach of the
director's duty of loyalty to the corporation or its stockholders; (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) any liability arising under Section 174 of
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the Delaware General Corporation Law and (iv) any transaction from which the
director derives an improper personal benefit. Without limiting the effect of
the preceding sentence, if the Delaware General Corporation Law is hereafter
amended to authorize the further elimination or limitation of the liability of a
director, then the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended.
Neither any amendment nor repeal of this Article VII, nor the adoption
of any provision of this Certificate of Incorporation inconsistent with this
Article VII, shall eliminate, reduce or otherwise adversely affect any
limitation on the personal liability of a director of the corporation existing
at the time of such amendment, repeal or adoption of such an inconsistent
provision.
-2-
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EXHIBIT B
BROADBASE VOTING AGREEMENT AND IRREVOCABLE PROXY
THIS VOTING AGREEMENT AND IRREVOCABLE PROXY (this "AGREEMENT") is made
and entered into as of September 18, 2000 (the "EFFECTIVE DATE"), by and between
Servicesoft, Inc., a Delaware corporation ("SERVICESOFT"), and the undersigned
stockholder (the "STOCKHOLDER") of Broadbase Software, Inc., a Delaware
corporation ("BROADBASE").
RECITALS
A. Concurrently with the execution of this Agreement, Broadbase,
Servicesoft and Soldier Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Broadbase ("MERGER SUB"), are entering into an
Agreement and Plan of Merger of even date herewith (as such agreement may
hereafter be amended from time to time, the "MERGER AGREEMENT") which provides
for the merger of Merger Sub with and into Servicesoft (the "MERGER"). Pursuant
to the Merger, shares of common stock of Servicesoft, par value $0.01 per share
("SERVICESOFT COMMON STOCK") will be converted into shares of common stock of
Broadbase, par value $.001 per share ("BROADBASE COMMON STOCK") on the basis
described in the Merger Agreement. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Merger Agreement.
B. Stockholder owns of record or has the power to direct the voting with
respect to such number of Shares (as defined herein) as are indicated on the
final page of this Agreement;
C. Stockholder is entering into this Agreement as a material inducement
and consideration to Servicesoft to enter into the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto hereby agree as follows:
1. Definitions.
(a) "EXPIRATION DATE" means the earlier to occur of (i) the
Effective Time of the Merger, and (ii) such time as the Merger Agreement may be
terminated in accordance with its terms.
(b) "SHARES" means all issued and outstanding shares of Broadbase
Common Stock owned of record by Stockholder or over which Stockholder exercises
voting power, in each case, as of the record date for persons entitled (i) to
receive notice of, and to vote at the meeting of the stockholders of Broadbase
called for the purpose of voting on the matters referred to in Section 2.1, or
(ii) to take action by written consent of the stockholders of Broadbase with
respect to the matters referred to in Section 2.1; provided, however, that any
shares of capital stock of Broadbase that Stockholder purchases or with respect
to which Stockholder otherwise exercises voting power after the execution of
this Agreement and prior to the Expiration Date shall be subject to the terms
and conditions of this Agreement to the same extent as if they constituted
Shares on the date hereof.
(c) "TRANSFER" with respect to any security means to directly or
indirectly: (i) sell, pledge, encumber, transfer or disposes of, or grant an
option with respect to, such security or any interest in such security; or (ii)
enter into an agreement or commitment providing for the sale, pledge,
encumbrance, transfer or disposition of, or grant of an option with respect to,
such security or any interest therein.
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2. Agreement to Vote.
2.1 Voting Agreement. Stockholder hereby covenants and agrees
that, prior to the Expiration Date, at any meeting (whether annual or special
and whether or not an adjourned or postponed meeting) of the stockholders of
Broadbase, however called, unless otherwise directed in writing by Servicesoft,
Stockholder will appear at the meeting or otherwise cause the Shares to be
counted as present thereat for purposes of establishing a quorum and vote or
consent (or cause to be voted or consented) the Shares
(a) in favor of the Merger, the execution and delivery by
Broadbase of the Merger Agreement and the adoption and approval of the terms
thereof, including the issuance of the Exchange Shares pursuant to the Merger,
and in favor of the other actions contemplated by the Merger Agreement and any
action required in furtherance hereof and thereof;
(b) in favor of an amendment to Broadbase's Certificate of
Incorporation to increase the authorized number of shares of Broadbase Common
Stock in order to permit the issuance of the Exchange Shares pursuant to the
Merger; and
(c) against the approval of any proposal made in
opposition to or in competition with the issuance of the Exchange Shares
pursuant to the Merger, including, without limitation, any Broadbase
Acquisition.
Prior to the Expiration Date, Stockholder will not enter into any
agreement or understanding with any person or entity to vote or give
instructions in any manner inconsistent with any provision of this Section 2.1.
2.2 Irrevocable Proxy. Contemporaneously with the execution of
this Agreement, Stockholder will deliver to Servicesoft a proxy with respect to
the Shares in the form attached hereto as Exhibit 1, which proxy will be
irrevocable to the fullest extent permitted by applicable law (the "PROXY").
2.3 Transfer and Other Restrictions. Prior to the termination of
this Agreement, Stockholder agrees not to, directly or indirectly:
(i) grant any proxy, power of attorney, deposit any of the
Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares except as provided in this
Agreement; or
(ii) take any other action that would make any
representation or warranty of Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling Stockholder from
performing its obligations under this Agreement.
4. Representations, Warranties and Covenants of Stockholder. Stockholder
hereby represents, warrants and covenants as follows:
4.1 Authority, Enforceability. Stockholder has full power and
authority to enter into, execute, deliver and perform Stockholder's obligations
under this Agreement and to make the representations, warranties and covenants
contained herein. This Agreement has been duly executed and delivered by
Stockholder and constitutes a legal, valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its terms,
subject to (i) laws of general application
2
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relating to bankruptcy, insolvency and the relief of debtors and (ii) rules of
law governing specific performance, injunctive relief and other equitable
remedies.
4.2 No Conflicts, No Defaults and Consents. The execution and
delivery of this Agreement by Stockholder do not, and the performance of this
Agreement by Stockholder will not: (i) conflict with or violate any order,
decree or judgment applicable to Stockholder or by which Stockholder or any of
Stockholder's properties or Shares is bound or affected; (ii) violate any
agreement to which Stockholder is a party or is subject, including, without
limitation, any voting agreement or voting trust; (iii) result in any breach of
or constitute a default (with notice or lapse of time, or both) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of any lien, restriction, adverse claim, option on,
right to acquire, or any encumbrance or security interest in or to any of the
Shares, pursuant to any written, oral or other agreement, contract or legally
binding commitment to which Stockholder is a party or by which Stockholder or
any of Stockholder's properties (including, without limitation, the Shares) is
bound or affected, or (iv) require any written, oral or other agreement,
contract or legally binding commitment of any third party.
4.3 Shares Owned. As of the Effective Date of this Agreement,
Stockholder owns of record or has the power to direct the voting with respect
to, in the aggregate, the number of shares of Broadbase Common Stock set forth
below Stockholder's name on the signature page of this Agreement, and does not
own of record, or have the power to direct the voting with respect to, any
shares of capital stock of Broadbase, other than the shares set forth below
Stockholder's name on the signature page hereof.
4.4 Accuracy of Representations; Reliance by Servicesoft. The
representations and warranties contained in this Agreement are accurate in all
respects as of the date of this Agreement, will be accurate in all respects at
all times through the Expiration Date and will be accurate in all respects as of
the Effective Time of the Merger as if made on that date except as to
representations that speak only as of the date of this Agreement. Stockholder
understands and acknowledges that Servicesoft is entering into the Merger
Agreement in reliance upon Stockholder's execution and delivery of this
Agreement.
4.5 Further Assurances. Stockholder agrees to execute and deliver
any additional documents reasonably necessary or desirable, in the opinion of
Broadbase or Servicesoft, to carry out the purposes and intent of this Agreement
and the Proxy.
5. Miscellaneous.
5.1 Severability. If any provision of this Agreement is found by
any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so would
not deprive one of the parties of the substantial benefit of its bargain. Such
provision will, to the extent allowable by law and the preceding sentence, not
be voided or canceled but will instead be modified by such arbitrator or court
so that it becomes enforceable and, as modified, will be enforced as any other
provision hereof, all the other provisions hereof continuing in full force and
effect.
5.2 Amendment; Waiver. This Agreement may be amended, modified,
superseded, canceled, renewed or extended only by an agreement in writing
executed by Servicesoft and Stockholder. The failure by either party at any time
to require performance or compliance by the other of any of its obligations or
agreements will in no way affect the right to require such performance or
compliance at any time thereafter. The waiver by either party of a breach of any
provision of this Agreement will not be treated as a waiver of any preceding or
succeeding breach of such provision or as a waiver of the provision itself. No
waiver of any kind will be effective or binding, unless it is in writing and is
signed by the party against whom such waiver is sought to be enforced.
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79
5.3 Entire Agreement. This Agreement, together with the Merger
Agreement, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
5.4 Assignment. This Agreement and all rights and obligations
hereunder are personal to Stockholder and may not be transferred or assigned by
Stockholder at any time. Servicesoft may assign its rights, and may delegate its
obligations hereunder, to any parent, subsidiary or affiliate of Servicesoft;
provided, however, that any such assignee assumes Servicesoft's obligations
hereunder. This Agreement will be binding upon, and inure to the benefit of, the
persons or entities who are permitted, by the terms of this Agreement, to be
successors, assigns and personal representatives of the respective parties
hereto.
5.5 Governing Law. This Agreement will be governed by and
construed in accordance with the internal laws of the State of Delaware,
excluding that body of laws pertaining to conflict of laws.
5.6 Costs of Enforcement. If any party to this Agreement seeks to
enforce its rights under this Agreement by legal proceedings or otherwise, the
non-prevailing party will pay all costs and expenses incurred by the prevailing
party, including, without limitation, all reasonable attorneys' and experts'
fees.
5.7 Notices. Any and all notices required or permitted to be
given to a party pursuant to the provisions of this Agreement will be in writing
and will be effective and deemed to provide such party sufficient notice under
this Agreement on the earliest of the following: (i) at the time of personal
delivery, if delivery is in person; (ii) one (1) business day after deposit with
an express overnight courier for United States deliveries, or two (2) business
days after such deposit for deliveries outside of the United States; or (iii)
three (3) business days after deposit in the United States mail by registered or
certified mail (return receipt requested) for United States deliveries. All
notices for delivery outside the United States will be sent by express courier.
All notices not delivered personally will be sent with postage and/or other
charges prepaid and properly addressed to the party to be notified at the
address set forth below, or at such other address as such other party may
designate by ten (10) days advance written notice to the other parties hereto.
If to Stockholder: _________________
c/o Broadbase, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Bay
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Fenwick & West, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
4
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If to Servicesoft: Servicesoft, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: _______________
with a copy to: ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇ III, P.C.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
5.8 Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damage for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
5.9 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original but all of which, taken together,
constitute one and the same agreement.
5.10 Titles. The titles and captions of the sections and
paragraphs of this Agreement are included for convenience of reference only and
will have no effect on the construction or meaning of this Agreement.
5.11 Termination. This Agreement will be terminated and will be
of no further force and effect upon the earlier to occur of (i) the Effective
Time and (ii) the termination of the Merger Agreement pursuant to its terms.
5
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IN WITNESS WHEREOF, the undersigned parties have executed this Agreement
as of the date first above written.
SERVICESOFT, INC. STOCKHOLDER
By:
-------------------------------- -----------------------------------
Name:
Title:
Broadbase Common Stock:
------------
[SIGNATURE PAGE TO VOTING AGREEMENT]
6
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EXHIBIT 1 TO VOTING AGREEMENT
IRREVOCABLE PROXY
The undersigned stockholder (the "STOCKHOLDER") of Broadbase, Inc., a
Delaware corporation ("BROADBASE"), hereby irrevocably (to the fullest extent
permitted by applicable law) appoints and constitutes the members of the Board
of Directors of Servicesoft Inc., a Delaware corporation ("SERVICESOFT"), and
each of them (collectively the "PROXYHOLDERS"), the agents, attorneys and
proxies of the undersigned, with full power of substitution and resubstitution,
to the fullest extent of the undersigned's rights with respect to (i) the shares
of capital stock of Broadbase owned of record by the undersigned, or over which
the undersigned has voting power, as of the date of this proxy, which shares are
specified on the final page of this proxy; (ii) any and all other shares of
capital stock of Broadbase which the undersigned may acquire or with respect to
which the undersigned shall acquire voting power after the date hereof,
including without limitation, in the event of a dividend or distribution of
capital stock of Broadbase, or any change in Broadbase's capital stock by reason
of any stock dividend, split-up, recapitalization, combination, exchange of
shares or the like, all shares of Broadbase's capital stock issued or
distributed pursuant to such stock dividends and distributions and any shares of
Broadbase's capital stock into which or for which any or all of the shares
otherwise held by the undersigned may be so changed or exchanged. (The shares of
the capital stock of Broadbase referred to in clauses (i) and (ii) of the
immediately preceding sentence are collectively referred to as the "SHARES.")
Upon the execution hereof, all prior proxies given by the undersigned with
respect to any of the Shares are hereby revoked, and no subsequent proxies will
be given with respect to any of the Shares until such time as this proxy shall
be terminated in accordance with its terms.
The Proxyholders named above will be empowered, and may exercise this
proxy, to vote the Shares at any time until the Expiration Date (as defined in
the Voting Agreement dated as of the date hereof, between Servicesoft and the
undersigned (the "VOTING AGREEMENT")) at any meeting of the stockholders of
Broadbase, however called, or in any action by written consent of stockholders
of Broadbase:
(i) in favor of the merger (the "MERGER") contemplated by
the Agreement and Plan of Merger by and among Broadbase, Soldier Acquisition
Corp., and Servicesoft, dated as of the date hereof (the "MERGER AGREEMENT"),
the execution and delivery by Broadbase of the Merger Agreement and the adoption
and approval of the terms thereof and in favor of the other actions contemplated
by the Merger Agreement and any action required in furtherance hereof and
thereof;
(ii) against any action or agreement that would result in
a breach of any representation, warranty, covenant or obligation of Broadbase in
the Merger Agreement or that would preclude fulfillment of a condition precedent
under the Merger Agreement to Servicesoft's or Broadbase's obligation to
consummate the Merger; and
(iii) against approval of any proposal made in opposition
to or in competition with the consummation of the Merger including, without
limitation, any Acquisition Proposal or Superior Offer (each as defined in the
Merger Agreement).
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The Proxyholders may not exercise this proxy on any other matter. The
Stockholder may vote the Shares on all such other matters. The proxy granted by
the Stockholder to the Proxyholders hereby is granted as of the date of this
Irrevocable Proxy in order to secure the obligations of the Stockholder set
forth in Section 2 of the Voting Agreement.
This proxy will terminate upon the termination of the Voting Agreement
in accordance with its terms. Any obligation of the undersigned hereunder shall
be binding upon the successors and assigns of the undersigned. The undersigned
Stockholder authorizes the Proxyholders to file this proxy and any substitution
or revocation of substitution with the Secretary of Broadbase and with any
Inspector of Elections at any meeting of the stockholders of Broadbase.
This proxy is irrevocable, is coupled with an interest, and shall
survive the insolvency, incapacity, death or liquidation of the undersigned and
will be binding upon the heirs, successors and assigns of the undersigned
(including any transferee of any of the Shares).
Dated: September 18, 2000.
STOCKHOLDER
----------------------------------------
Broadbase Common Stock:
-----------------
ii
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SERVICESOFT VOTING AGREEMENT AND IRREVOCABLE PROXY
This Voting Agreement and irrevocable proxy (this "AGREEMENT") is made
and entered into as of September 18, 2000 (the "EFFECTIVE DATE"), by and between
Broadbase Software, Inc., a Delaware corporation ("BROADBASE"), and the
undersigned stockholder ("STOCKHOLDER") of Servicesoft, Inc., a Delaware
corporation ("SERVICESOFT").
Recitals
A. Concurrently with the execution of this Agreement, Broadbase,
Servicesoft and Soldier Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Broadbase ("MERGER SUB"), are entering into an
Agreement and Plan of Merger of even date herewith (as such agreement may
hereafter be amended from time to time, the "MERGER AGREEMENT") which provides
for the merger of Merger Sub with and into Servicesoft (the "MERGER"). Pursuant
to the Merger, shares of common stock of Servicesoft, par value $0.01 per share
("SERVICESOFT COMMON STOCK") will be converted into shares of common stock of
Broadbase, par value $.001 per share ("BROADBASE COMMON STOCK") on the basis
described in the Merger Agreement; capitalized terms that are used in this
Agreement and are not otherwise defined herein will have the same meanings that
such terms have in the Merger Agreement.
B. Stockholder owns of record or has the power to direct the voting with
respect to such number of Shares (as defined herein) as are indicated on the
final page of this Agreement;
C. Stockholder is entering into this Agreement as a material inducement
and consideration to Broadbase to enter into the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto hereby agree as follows:
1. Definitions.
(a) "EXPIRATION DATE" means the earlier to occur of (i) the
Effective Time of the Merger; and (ii) such time as the Merger Agreement may be
terminated in accordance with its terms.
(c) "SHARES" means all issued and outstanding shares of
Servicesoft Common Stock or each series of Servicesoft preferred stock owned of
record by Stockholder or over which Stockholder exercises voting power, in each
case, as of the record date for persons entitled (i) to receive notice of, and
to vote at the meeting of the stockholders of Servicesoft called for the purpose
of voting on the matters referred to in Section 2.1, or (ii) to take action by
written consent of the stockholders of Servicesoft with respect to the matters
referred to in Section 2.1; provided, however, that any shares of capital stock
of Servicesoft that Stockholder purchases or with respect to which Stockholder
otherwise exercises voting power after the execution of this Agreement and prior
to the Expiration Date shall be subject to the terms and conditions of this
Agreement to the same extent as if they constituted Shares on the date hereof.
(d) "TRANSFER" with respect to any security means to directly or
indirectly: (i) sell, pledge, encumber, transfer or dispose of, or grant an
option with respect to, such security or any interest in such security; or (ii)
enter into an agreement or commitment providing for the sale, pledge,
encumbrance, transfer or disposition of, or grant of an option with respect to,
such security or any interest therein.
85
2. Agreement to Vote.
2.1 Voting Agreement. Stockholder hereby covenants and agrees
that, prior to the Expiration Date, at any meeting (whether annual or special
and whether or not an adjourned or postponed meeting) of the stockholders of
Servicesoft, however called, and in any action taken by the written consent of
stockholders of Servicesoft without a meeting, unless otherwise directed in
writing by Broadbase, Stockholder will appear at the meeting or otherwise cause
the Shares to be counted as present thereat for purposes of establishing a
quorum and vote or consent for cause to be voted or consented the Shares:
(a) in favor of the Merger, the execution and delivery by
Servicesoft of the Merger Agreement and the adoption and approval of the terms
thereof and in favor of the other actions contemplated by the Merger Agreement
and, to the extent that a vote is solicited in connection with this Voting
Agreement or the Merger Agreement, any other action required in furtherance
hereof or thereof;
(b) against any action or agreement that would result in a
breach of any representation, warranty, covenant or obligation of Servicesoft in
the Merger Agreement or that would preclude fulfillment of a condition precedent
under the Merger Agreement to Servicesoft's or Broadbase's obligation to
consummate the Merger; and
(c) against approval of any proposal made in opposition to
or in competition with the consummation of the Merger, including, without
limitation, any Acquisition Proposal or Superior Offer (each as defined in the
Merger Agreement).
Prior to the Expiration Date, Stockholder will not enter into any
agreement or understanding with any person or entity to vote or give
instructions in any manner inconsistent with any provision of this Section 2.1.
2.2 Irrevocable Proxy. Contemporaneously with the execution of
this Agreement, Stockholder will deliver to Broadbase a proxy with respect to
Shares in the form attached hereto as Exhibit 1, which proxy will be irrevocable
to the fullest extent permitted by applicable law (the "PROXY").
2.3 Transfer and Other Restrictions. (a) Prior to the termination
of this Agreement, Stockholder agrees not to, directly or indirectly:
(i) except pursuant to the terms of the Merger Agreement,
Transfer any or all of the Shares or any interest therein except as
provided in Section 2.2 hereof;
(ii) grant any proxy, power of attorney, deposit any of
the Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares except as provided in this
Agreement; or
(iii) take any other action that would make any
representation or warranty of Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling Stockholder from
performing its obligations under this Agreement.
(b) To the extent Stockholder is, as of the date hereof,
party to a contract or agreement that requires Stockholder to Transfer Shares to
another person or entity (excluding a contract
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86
or agreement pledging Shares to Servicesoft), Stockholder will not effect any
such Transfer unless and until the transferee agrees to be bound by and executes
an agreement in the form of this Agreement with respect to the Shares to be
Transferred. Nothing herein shall prohibit Stockholder from exercising (in
accordance with the terms of the option or warrant, as applicable) any option or
warrant Stockholder may hold; provided, however, that the securities acquired
upon such exercise shall be deemed Shares.
(c) Stockholder agrees with, and covenants to, Broadbase
that Stockholder shall not request that Servicesoft register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any Shares, unless such transfer is made pursuant to and in
compliance with this Agreement.
3. Waivers. Stockholder agrees not to exercise any rights of appraisal
and any dissenters' rights that Stockholder may have (whether under applicable
law or otherwise) or could potentially have or acquire in connection with the
Merger.
4. Representations, Warranties and Covenants of Stockholder. Stockholder
hereby represents, warrants and covenants as follows:
4.1 Authority, Enforceability. Stockholder has full power and
authority to enter into, execute, deliver and perform Stockholder's obligations
under this Agreement and to make the representations, warranties and covenants
contained herein. This Agreement has been duly executed and delivered by
Stockholder and constitutes a legal, valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
4.2 No Conflicts, No Defaults and Consents. The execution and
delivery of this Agreement by Stockholder do not, and the performance of this
Agreement by Stockholder will not: (i) conflict with or violate any order,
decree or judgment applicable to Stockholder or by which Stockholder or any of
Stockholder's properties or Shares is bound or affected; (ii) violate any
agreement to which Stockholder is a party or is subject, including, without
limitation, any voting agreement or voting trust; (iii) result in any breach of
or constitute a default (with notice or lapse of time, or both) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of any lien, restriction, adverse claim, option on,
right to acquire, or any encumbrance or security interest in or to any of the
Shares, pursuant to any written, oral or other agreement, contract or legally
binding commitment to which Stockholder is a party or by which Stockholder or
any of the Shares is bound or affected, or (iv) require any written, oral or
other agreement, contract or legally binding commitment of any third party.
4.3 Certain Agreements. Stockholder is not a party to any
agreement with Servicesoft or any subsidiary of Servicesoft (i) the benefits of
which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction in the nature of any transaction contemplated by the
Merger Agreement, (ii) providing any term of employment or compensation
guarantee, or (iii) providing severance benefits or other benefits after
termination of employment regardless of the reason for such termination of
employment, in each case, except as set forth in the Servicesoft Disclosure
Letter.
4.4 Shares Owned. As of the Effective Date of this Agreement,
Stockholder owns of record or has the power to direct the voting with respect
to, in the aggregate the number of shares of
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Servicesoft Common Stock and of each series of Servicesoft Preferred Stock set
forth below Stockholder's name on the signature page of this Agreement, and does
not own of record, or have the power to direct the voting with respect to, any
shares of capital stock of Servicesoft other than the Shares set forth below
Stockholder's name on the signature page hereof. All Shares are, and at all
times until and through the Expiration Date will be, free and clear of any
rights of first refusal, co-sale rights, security interests, liens, pledges,
claims, options, charges or other encumbrances, except as set forth in the
Servicesoft Disclosure Letter.
4.5 Accuracy of Representations; Reliance by Broadbase. The
representations and warranties contained in this Agreement are accurate in all
respects as of the date of this Agreement, will be accurate in all respects at
all times through the Expiration Date and will be accurate in all respects as of
the Effective Time of the Merger as if made on that date. Stockholder
understands and acknowledges that Broadbase is entering into the Merger
Agreement in reliance upon Stockholder's execution and delivery of this
Agreement.
4.6 Further Assurances. Stockholder agrees to execute and deliver
any additional documents reasonably necessary or desirable, in the opinion of
Broadbase or Servicesoft, to carry out the purposes and intent of this Agreement
and the Proxy.
5. Miscellaneous.
5.1 Severability. If any provision of this Agreement is found by
any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so would
not deprive one of the parties of the substantial benefit of its bargain. Such
provision will, to the extent allowable by law and the preceding sentence, not
be voided or canceled but will instead be modified by such arbitrator or court
so that it becomes enforceable and, as modified, will be enforced as any other
provision hereof, all the other provisions hereof continuing in full force and
effect.
5.2 Amendment; Waiver. This Agreement may be amended, modified,
superseded, canceled, renewed or extended only by an agreement in writing
executed by Broadbase and Stockholder. The failure by either party at any time
to require performance or compliance by the other of any of its obligations or
agreements will in no way affect the right to require such performance or
compliance at any time thereafter. The waiver by either party of a breach of any
provision of this Agreement will not be treated as a waiver of any preceding or
succeeding breach of such provision or as a waiver of the provision itself. No
waiver of any kind will be effective or binding, unless it is in writing and is
signed by the party against whom such waiver is sought to be enforced.
5.3 Entire Agreement. This Agreement, together with the Merger
Agreement, constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
5.4 Assignment. This Agreement and all rights and obligations
hereunder are personal to Stockholder and may not be transferred or assigned by
Stockholder at any time. Broadbase may assign its rights, and may delegate its
obligations hereunder, to any parent, subsidiary, affiliate or successor of
Broadbase, or in connection with any sale, transfer or other disposition of all
or substantially all the business and assets of Broadbase or any of its
subsidiaries or affiliates, whether by sale of stock, sale of assets, merger,
consolidation or otherwise; provided however, that any such assignee assumes
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Broadbase's obligations hereunder. This Agreement will be binding upon, and
inure to the benefit of, the persons or entities who are permitted, by the terms
of this Agreement, to be successors, assigns and personal representatives of the
respective parties hereto.
5.5 Governing Law. This Agreement will be governed by and
construed in accordance with the internal laws of the State of Delaware,
excluding that body of laws pertaining to conflict of laws.
5.6 Costs of Enforcement. If any party to this Agreement seeks to
enforce its rights under this Agreement by legal proceedings or otherwise, the
non-prevailing party will pay all costs and expenses incurred by the prevailing
party, including, without limitation, all reasonable attorneys' and experts'
fees.
5.7 Notices. Any and all notices required or permitted to be
given to a party pursuant to the provisions of this Agreement will be in writing
and will be effective and deemed to provide such party sufficient notice under
this Agreement on the earliest of the following: (i) at the time of personal
delivery, if delivery is in person; (ii) one (1) business day after deposit with
an express overnight courier for United States deliveries, or two (2) business
days after such deposit for deliveries outside of the United States; or (iii)
three (3) business days after deposit in the United States mail by registered or
certified mail (return receipt requested) for United States deliveries. All
notices for delivery outside the United States will be sent by express courier.
All notices not delivered personally will be sent with postage and/or other
charges prepaid and properly addressed to the party to be notified at the
address set forth below, or at such other address as such other party may
designate by ten (10) days advance written notice to the other parties hereto.
If to Stockholder: _________________
c/o Servicesoft, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: _______________-
Phone:
Fax:
with a copy to: ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇ III, P.C.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Broadbase: Broadbase, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: Fenwick &West, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
5.8 Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damage for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
5.9 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original but all of which, taken together,
constitute one and the same agreement.
5.10 Titles. The titles and captions of the sections and
paragraphs of this Agreement are included for convenience of reference only and
will have no effect on the construction or meaning of this Agreement.
5.11 Termination. This Agreement will be terminated and will be
of no further force and effect upon the earlier to occur of (i) the Effective
Time and (ii) the termination of the Merger Agreement pursuant to its terms.
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IN WITNESS WHEREOF, the undersigned parties have executed this Agreement
as of the date first above written.
BROADBASE, INC. STOCKHOLDER
By:
-------------------------------- ----------------------------------------
Name:
Title:
Servicesoft Common Stock:
---------------
Servicesoft Preferred Stock:
Series H Convertible Preferred:
------
Series I Convertible Preferred:
------
Series J Convertible Preferred:
------
Series X Special Preferred:
----------
Series Y Special Preferred:
----------
[SIGNATURE PAGE TO VOTING AGREEMENT]
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EXHIBIT 1 TO VOTING AGREEMENT
IRREVOCABLE PROXY
The undersigned stockholder (the "STOCKHOLDER") of SERVICESOFT, Inc., a
Delaware corporation ("SERVICESOFT"), hereby irrevocably (to the fullest extent
permitted by applicable law) appoints and constitutes ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇ and/or the members of the Board of Directors of BROADBASE, Inc., a
Delaware corporation ("BROADBASE"), and each of them (collectively the
"PROXYHOLDERS"), the agents, attorneys and proxies of the undersigned, with full
power of substitution and resubstitution, to the fullest extent of the
undersigned's rights with respect to (i) the shares of capital stock of
Servicesoft owned of record by the undersigned, or over which the undersigned
has voting power, as of the date of this proxy, which shares are specified on
the final page of this proxy; (ii) any and all other shares of capital stock of
Servicesoft which the undersigned may acquire or with respect to which the
undersigned shall acquire voting power after the date hereof, including, without
limitation, in the event of a dividend or distribution of capital stock of
Servicesoft, or any change in Servicesoft's capital stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, all shares of Servicesoft's capital stock issued or distributed pursuant
to such stock dividends and distributions and any shares of Servicesoft's
capital stock into which or for which any or all of the shares otherwise held by
the undersigned may be so changed or exchanged. (The shares of the capital stock
of Servicesoft referred to in clauses (i) and (ii) of the immediately preceding
sentence are collectively referred to as the "SHARES.") Upon the execution
hereof, all prior proxies given by the undersigned with respect to any of the
Shares are hereby revoked, and no subsequent proxies will be given with respect
to any of the Shares until such time as this proxy shall be terminated in
accordance with its terms.
The Proxyholders named above will be empowered, and may exercise this
proxy, to vote the Shares at any time until the Expiration Date (as defined in
the Voting Agreement) at any meeting of the stockholders of Servicesoft, however
called, or in any action by written consent of stockholders of Servicesoft:
(i) in favor of the merger (the "MERGER") contemplated by the
Agreement and Plan of Merger by and among Broadbase, Soldier Acquisition Corp.,
and Servicesoft, dated as of the date hereof (the "MERGER AGREEMENT"), the
execution and delivery by Servicesoft of the Merger Agreement and the adoption
and approval of the terms thereof and in favor of the other actions contemplated
by the Merger Agreement and, to the extent that a vote is solicited in
connection with this Voting Agreement or the Merger Agreement, any other action
required in furtherance hereof or thereof;
(ii) against any action or agreement that would result in a
breach of any representation, warranty, covenant or obligation of Servicesoft in
the Merger Agreement or that would preclude fulfillment of a condition precedent
under the Merger Agreement to Servicesoft's or Broadbase's obligation to
consummate the Merger; and
(iii) against approval of any proposal made in opposition to or
in competition with the consummation of the Merger including, without
limitation, any Acquisition Proposal or Superior Offer (each as defined in the
Merger Agreement).
The Proxyholders may not exercise this proxy on any other matter. The
Stockholder may vote the Shares on all such other matters. The proxy granted by
the Stockholder to the Proxyholders hereby is
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granted as of the date of this Irrevocable Proxy in order to secure the
obligations of the Stockholder set forth in Section 2 of the Voting Agreement.
This proxy will terminate upon the termination of the Voting Agreement
in accordance with its terms. Any obligation of the undersigned hereunder shall
be binding upon the successors and assigns of the undersigned. The undersigned
Stockholder authorizes the Proxyholders to file this proxy and any substitution
or revocation of substitution with the Secretary of Servicesoft and with any
Inspector of Elections at any meeting of the stockholders of Servicesoft.
This proxy is irrevocable, is coupled with an interest, and shall
survive the insolvency, incapacity, death or liquidation of the undersigned and
will be binding upon the heirs, successors and assigns of the undersigned
(including any transferee of any of the Shares).
Dated: September 18, 2000.
STOCKHOLDER
---------------------------------------------
Servicesoft Common Stock:
--------------------
Servicesoft Preferred Stock:
-----------------
Series H Convertible Preferred:
-----------
Series I Convertible Preferred:
-----------
Series J Convertible Preferred:
-----------
Series X Special Preferred:
---------------
Series Y Special Preferred:
---------------
ii
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EXHIBIT C
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of September 18, 2000, by and
between ________ (the "Employee") and BROADBASE SOFTWARE, INC., a Delaware
corporation (the "Company"). This Agreement shall be effective at the effective
time of the merger (the "Merger") contemplated by the Agreement and Plan of
Merger dated September 18, 2000, by and among the Company, Servicesoft, Inc., a
Delaware corporation ("FormerCo"), and Soldier Acquisition Corp., a Delaware
Corporation and a wholly owned subsidiary of the Company (the "Merger
Agreement"). This Agreement shall be null and void, and no parties shall be
deemed to have any rights hereunder, unless and until the Merger is consummated
(the time of such consummation being the "Effective Time").
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) POSITION. The Company agrees to employ the Employee in
the position (the "Position") of _____________ (the "Employment"). The Employee
shall report to the Company's ___________.
(b) OBLIGATIONS TO THE COMPANY. During his Employment, the
Employee shall devote his full business efforts and time to the Company. During
his Employment, without the prior written approval of the Company's Board of
Directors, the Employee shall not render services in any capacity to any other
person or entity and shall not act as a sole proprietor or partner of any other
person or entity or as a shareholder owning more than five percent of the stock
of any other corporation. The Employee shall have those responsibilities as the
Company may reasonably determine to be consistent with the Employee's position.
The Employee shall comply with the Company's policies and rules, as they may be
in effect from time to time during his Employment.
(c) NO CONFLICTING OBLIGATIONS. The Employee represents
and warrants to the Company that he is under no obligations or commitments,
whether contractual or otherwise, that are inconsistent with his obligations
under this Agreement. The Employee represents and warrants that he will not use
or disclose, in connection with his employment by the Company, any trade secrets
or other proprietary information or intellectual property in which the Employee
or any other person has any right, title or interest and that his employment by
the Company as contemplated by this Agreement will not infringe or violate the
rights of any other person. The Employee represents and warrants to the Company
that he has returned all property and confidential information belonging to any
prior employer.
2. SALARY. The Company shall pay the Employee as compensation for
his services a base salary at a gross annual rate of not less than $_______.
Employee will be eligible for a target sales commission of not less than
$________ on an annualized basis pursuant to a commission plan established by
the Company. Such salary and commissions shall be payable in accordance with the
Company's standard payroll procedures.
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3. VACATION AND EMPLOYEE BENEFITS. During his Employment, the
Employee shall be eligible for paid vacations in accordance with the Company's
standard policy for similarly-situated employees, as it may be amended from time
to time. During his Employment, the Employee shall be eligible to participate in
the employee benefit plans maintained by the Company for similarly-situated
employees, subject in each case to the generally applicable terms and conditions
of the plan in question and to the determinations of any person or committee
administering such plan.
4. BUSINESS EXPENSES. During his Employment, the Employee shall
be authorized to incur necessary and reasonable travel, entertainment and other
business expenses in connection with his duties hereunder. The Company shall
reimburse the Employee for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance with the
Company's generally applicable policies.
5. VESTING OF EQUITY IN THE COMPANY. Notwithstanding any
provision in any plan, employment agreement, offer letter or other agreement
between Employee and FormerCo ("Prior Agreements") to the contrary, ______ of
the Employee's remaining unvested shares of FormerCo common stock, or unvested
options to purchase shares of FormerCo common stock, that are exchanged for
shares of, or options to purchase shares of, Common Stock of the Company on the
date of the Merger ("Restricted Shares") shall remain initially unvested and
shall not be accelerated, and shall thereafter continue to vest in accordance
with the vesting schedule in effect prior to the Merger, for so long as Employee
is continuously providing services to the Company, subject to the provisions of
Section 6. Employee agrees to cancel any right that Employee had to accelerated
vesting of the Restricted Shares as a result of any Prior Agreements. Any
portion of the Restricted Shares that do not vest pursuant to this Section 5
and/or Section 6 shall be forfeited.
6. TERM OF EMPLOYMENT.
(a) EMPLOYMENT AT WILL. Either party may terminate the
Employee's Employment at any time and for any reason (or no reason), and with or
without cause, by giving the other party notice in writing. The Employee's
Employment with the Company shall be "at will," meaning that either the Employee
or the Company shall be entitled to terminate the Employee's employment at any
time and for any reason, with or without cause. Any contrary representations
that may have been made to the Employee shall be superseded by this Agreement.
This Agreement shall constitute the full and complete agreement between the
Employee and the Company on the "at will" nature of the Employee's Employment,
which may only be changed in an express written agreement signed by the Employee
and a duly authorized officer of the Company.
(b) RIGHTS UPON TERMINATION OF EMPLOYMENT. Upon the
termination of the Employee's Employment pursuant to this Section 6, the
Employee shall only be entitled to the compensation, benefits and reimbursements
described in Sections 2, 3, 4, 5 and 6 for the period preceding the effective
date of the termination, and any severance that may be provided pursuant to
Section 6(d). The payments under this Agreement shall fully discharge all
responsibilities of the Company to the Employee.
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(c) TERMINATION OF AGREEMENT. This Agreement shall
terminate when all obligations of the parties hereunder have been satisfied. Any
earlier termination of this employment hereunder shall not limit or otherwise
affect any of the Employee's obligations under Sections 7 and 8.
(d) SEVERANCE AND ACCELERATION OF VESTING.
(1) CASH SEVERANCE. Notwithstanding the foregoing,
if Employee's employment is terminated within the Noncompetition
Term (i) by Broadbase without "Cause", or (ii) by Employee, after
"Constructive Termination" by Broadbase without Cause, then
Employee shall be entitled to one year of base salary plus target
bonus and/or commissions, payable in one lump sum.
(2) ACCELERATION OF VESTING. Notwithstanding the
foregoing, if Employee's employment is terminated within one year
of the Effective Time (i) by Broadbase without "Cause", or (ii)
by Employee, after "Constructive Termination" by Broadbase
without Cause, then _________ of the then remaining unvested
Restricted Shares shall become immediately vested and exercisable
as of the time of such termination. Any determination by the
Board of Directors of the Company, after written notice to
Employee and providing Employee an opportunity to be heard,
regarding whether an event described in this Subsection 6(d) has
occurred, shall be conclusive, whether or not there are any
proceedings by public authorities with respect thereto and
without regard to the outcome thereof.
The term "CAUSE" shall mean:
(i) Any material breach by Employee of this
Agreement between the Employee and the Company, if either (i) such
breach is of a nature which cannot be cured, or (ii) such breach is of a
nature which can be cured but which remains uncured fifteen days after
written notice of breach;
(ii) A determination by a majority of the Board of
Directors of the Company that the Employee has engaged in willful
misconduct causing significant harm to the Company or that is repeated
or continues after written notice from the CEO or the Board of the
Company;
(iii) Conviction of the Employee, or a plea by the
Employee of "guilty" or "no contest" to, a felony under the laws of the
United States or any state thereof;
(iv) Misappropriation of the assets of the Company
or other acts of fraud or embezzlement by Employee;
(v) The repeated or ongoing abuse of alcohol or
controlled substances by Employee that has a repeated or ongoing
detrimental effect upon the Employee's performance of his duties under
this Agreement and
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that continues or is repeated after 30 days written notice from the
Company;
(vi) A determination by a majority of the Board of
Directors of the Company that there has occurred substantial and
continuing neglect or inattention by the Employee of duties of his
employment which shall continue for 30 business days following written
notice by the Board of Directors; or
(vii) [other criteria].
The term "CONSTRUCTIVE TERMINATION" shall mean a material reduction in the
Employee's base salary or total target compensation; any diminution or material
adverse change to the Employee's title, reporting position and responsibilities
constituting a de facto demotion; any material breach by the Company of this
Agreement that is not cured within thirty (30) days after written notice from
the Employee to the Company, including, without limitation, the wrongful failure
of the Company to pay the Employee any material portion of his compensation; or
the Company requiring the Employee to be based at and to work out of any office
or location more than 35 miles from the location where the Employee is currently
based at and working out of for FomerCo; provided, however, that in no event
shall any of the changes contemplated by this Agreement to occur at the
Effective time (i.e., assumption of new titles, etc.) constitute a Constructive
Termination hereunder.
(e) RELEASE. Subsection (d) above shall not apply unless
the Employee (i) has executed a general release (in a form prescribed by the
Company) of all known and unknown claims that he may then have against the
Company or persons affiliated with the Company and which such claims are in any
way related to such termination, Constructive Termination, or Cause for either,
and (ii) has agreed not to prosecute any legal action or other proceeding based
upon any of such claims; provided that such release shall not extend to claims
for benefits under this Agreement for accrued compensation and benefits or
indemnification as an officer or employee of FormerCo, the Company or any of
their affiliates.
7. NON-DISCLOSURE. This Agreement is contingent upon the
Employee's execution of the Company's form of Proprietary Information and
Inventions Agreement, a copy of which is attached hereto as EXHIBIT A. If any
provisions of such Proprietary Information and Inventions Agreement are in
conflict with the provisions of this Agreement, the provisions of this Agreement
shall control.
8. NON-COMPETITION, NON-SOLICITATION AND SAVINGS CLAUSE.
(a) NONCOMPETITION TERM. For the longer of (i) a period of
one year following the Effective Time (the "NONCOMPETITION TERM"), or (ii)
_______ year(s) after termination of employment hereunder, the Employee hereby
agrees that, without the written consent of Broadbase, directly or indirectly,
individually or as an employee, partner, officer, director or shareholder or in
any other capacity whatsoever of or for any person, firm, partnership, company
or corporation other than Broadbase or its subsidiaries (other than as a
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97
holder of less than 1% of the outstanding capital stock of a publicly-traded
company), he shall not:
(i) Own, manage, operate, sell, control or
participate in the ownership, management, operation, sales or control of
or be connected in any manner with any business engaged in: (A)
developing and marketing software in the field of customer relationship
management; or (B) developing any product or providing any service that
is substantially the same as, is based upon or competes in any material
respect with any business described in clause (A) of this paragraph;
(ii) Recruit, attempt to hire, solicit, assist
others in recruiting or hiring, or refer to others concerning
employment, any person who is or was (within one year of Employee's
termination) an employee of FormerCo, Broadbase, or any of Broadbase's
other subsidiaries, or induce or attempt to induce any such employee to
terminate his employment with FormerCo, Broadbase, or any of Broadbase's
other subsidiaries (as the case may be);
(iii) Induce or attempt to induce any person or
entity to curtail or cancel any business or contracts that such person
or entity had with FormerCo, Broadbase, or any of Broadbase's other
subsidiaries; or
(iv) Contact, solicit or call upon any person or
entity who was a customer of, or potential customer being actively
solicited on behalf of, FormerCo, Broadbase, or any of Broadbase's other
subsidiaries at the time of the Employee's termination, on behalf of any
other person or entity for the purpose of selling or providing any
services or products of the type normally sold or provided by FormerCo,
Broadbase, or any of Broadbase's other subsidiaries.
(b) The agreements set forth in this Section 8 include within
their scope all cities, counties, provinces and states of all countries in
which Broadbase or any of its subsidiaries has engaged in development of
products or sales or otherwise conducted business or selling or licensing
efforts at any time during the two years prior to the Effective Time or
during the Noncompetition Term. The Employee acknowledges that the scope and
period of restrictions and the geographical area to which the restriction
imposed in this Section 8 shall apply are fair and reasonable and are
reasonably required for the protection of Broadbase and that Section 8(a)
accurately describes the business to which the restrictions are intended to
apply.
(c) It is the desire and intent of the parties that the
provisions of this Section 8 shall be enforced to the fullest extent
permissible under applicable law. If any provision of this Agreement or any
part of any such provision is held under any circumstances to be invalid or
unenforceable by any arbitrator or court of competent jurisdiction, then:
(i) such provision or part thereof shall, with respect to such circumstances
and in such jurisdiction, be modified by such arbitrator or court to conform
to applicable laws so as to be valid and enforceable to the fullest possible
extent; (ii) the invalidity or unenforceability of such provision or part
thereof under such circumstances and in such jurisdiction shall not affect
the validity or enforceability of such provision or part thereof under any
other circumstances
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or in any other jurisdiction; (iii) the invalidity or unenforceability of
such provision or part thereof shall not affect the validity or
enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this Section 8. Each provision of
this Section 8 is separable from every other provision of this Section 8,
and each part of each provision of this Section 8 is separable from every
other part of such provision.
(d) The Employee acknowledges that any breach of the covenants of
Section 8 will result in immediate and irreparable injury to Broadbase and,
accordingly, consents to the application of injunctive relief and such other
equitable remedies for the benefit of Broadbase as may be appropriate in the
event such a breach occurs or is threatened. The foregoing remedies shall be
in addition to all other legal remedies to which Broadbase may be entitled
hereunder, including, without limitation, monetary damages.
9. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. This Agreement shall be binding
upon any successor (whether direct or indirect and whether by purchase, lease,
merger, consolidation, liquidation or otherwise) to all or substantially all of
the Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(b) EMPLOYEE'S SUCCESSORS. This Agreement and all rights
of the Employee hereunder shall inure to the benefit of, and be enforceable by,
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
10. MISCELLANEOUS PROVISIONS.
(a) NOTICE. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.
(b) MODIFICATIONS AND WAIVERS. No provision of this
Agreement shall be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and signed by the Employee and by an
authorized officer of the Company (other than the Employee). No waiver by either
party of any breach of, or of compliance with, any condition or provision of
this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.
(c) WHOLE AGREEMENT. No other agreements, representations
or understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement, the
Merger Agreement and Plan of Reorganization and the Proprietary Information and
Inventions Agreement contain the entire understanding of the
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parties with respect to the subject matter hereof. This Agreement shall
supersede in its entirety the offer letter or other agreement executed by the
Employee and FormerCo and any Restricted Stock Purchase Agreement between the
Employee and FormerCo to the extent inconsistent herewith.
(d) WITHHOLDING TAXES. All payments made under this
Agreement shall be subject to reduction to reflect taxes or other charges
required to be withheld by law.
(e) CHOICE OF LAW AND SEVERABILITY. This Agreement shall
be interpreted in accordance with the laws of the State of California (except
their provisions governing the choice of law). If any provision of this
Agreement becomes or is deemed invalid, illegal or unenforceable in any
jurisdiction by reason of the scope, extent or duration of its coverage, then
such provision shall be deemed amended to the extent necessary to conform to
applicable law so as to be valid and enforceable or, if such provision cannot be
so amended without materially altering the intention of the parties, then such
provision shall be stricken and the remainder of this Agreement shall continue
in full force and effect. Should there ever occur any conflict between any
provision contained in this Agreement and any present or future statute, law,
ordinance or regulation contrary to which the parties have no legal right to
contract, then the latter shall prevail but the provision of this Agreement
affected thereby shall be curtailed and limited only to the extent necessary to
bring it into compliance with applicable law. All the other terms and provisions
of this Agreement shall continue in full force and effect without impairment or
limitation.
(f) ARBITRATION. Any controversy or claim arising out of
or relating to this Agreement or the breach thereof, or the Employee's
Employment or the termination thereof, with the exception of any controversy or
claim arising out of or relating to Section 8, shall be settled by arbitration
in Boston, Massachusetts in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association. The
decision of the arbitrator shall be final and binding on the parties, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The parties hereby agree that the arbitrator shall
enter a written decision and shall be empowered to enter an equitable decree
mandating specific enforcement of the terms of this Agreement. Any controversy
or claim arising out of or relating to Section 8 shall be settled in the
appropriate federal or state court in the State of California. The Company and
the Employee hereby consent to personal jurisdiction of the state and federal
courts located in the State of California for any action or proceeding arising
from or relating to this Agreement or relating to any arbitration in which the
parties are participants.
(g) NO ASSIGNMENT. This Agreement and all rights and
obligations of the Employee hereunder are personal to the Employee and may not
be transferred or assigned by the Employee at any time. The Company may assign
its rights under this Agreement to any entity that assumes the Company's
obligations hereunder in connection with any sale or transfer of all or a
substantial portion of the Company's assets to such entity.
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(h) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.
By:
------------------------------------------
[NAME]
BROADBASE SOFTWARE, INC.
By
------------------------------------------
Title:
---------------------------------------
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EXHIBIT D
EXHIBIT D TO MERGER AGREEMENT: FORM OF CONVERTIBLE PROMISSORY NOTE
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR, IF
REASONABLY REQUIRED BY THE ISSUER OF THIS NOTE, AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF THIS NOTE THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT.
CONVERTIBLE PROMISSORY NOTE
$_____________ Menlo Park, California
__________, 2000
FOR VALUE RECEIVED, the undersigned Servicesoft, Inc., a Delaware
corporation ("BORROWER") promises to pay to the order of Broadbase Software,
Inc., a Delaware corporation ("LENDER"), or the assignee of Lender (including
Lender, the "HOLDER") at Lender's office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, or at such other place as Holder may designate, in lawful money of
the United States of America and in immediately available funds, the principal
sum of ______________________ ($_______), with interest thereon, to be computed
from the date of its disbursement as set forth herein. Capitalized terms not
defined in the text are defined in Section VII hereof.
I. LOAN AND REPAYMENT
(a) Loan. Lender shall loan to Borrower the amount set forth
above, provided that (i) the loaned funds may be used by Borrower only for the
purpose of financing operating expenses, and (ii) Borrower shall have given
Lender a written affirmation that as of the date hereof: (a) all of the
representations and warranties of Borrower set forth in the Agreement and Plan
of Merger by and among Lender, Borrower and Soldier Acquisition Corp., dated as
of September 18, 2000 (the "MERGER AGREEMENT") are true and correct in all
material respects; and (b) Borrower has not breached in any material respect any
covenant contained in the Merger Agreement. The unpaid principal balance of this
obligation at any time shall be the total amount advanced hereunder by Holder
less the amount of principal payments made hereon by or for any Borrower.
(b) Repayment. Subject to Section III and Section V(b) below,
the outstanding balance of this Note shall be due and payable on demand of
Holder at any time on or after December 31, 2002 (the "DUE DATE"); provided,
however, that in the event of the termination of the Merger Agreement pursuant
to Article 11 of the Merger Agreement, this Note shall become due and payable by
Borrower, subject to Section III and Section V(b) below, on the date that is one
year after the date of the termination of the Merger Agreement; provided that
Holder shall be entitled, by written notice to Borrower, to require earlier
repayment either upon (i) the closing of Borrower's Next Equity Financing
following such termination, in which case, Holder shall be entitled to receive
the lesser of (1) the aggregate amount of principal and accrued interest
outstanding under this Note and (2) 50% of the net proceeds received by Borrower
in such Next Equity Financing, with the remainder of the outstanding principal
and interest to be paid in full on the Due Date or (ii) an Acquisition of
Borrower other than pursuant to the Merger Agreement.
102
(c) Wire Instructions. Borrower shall provide Lender with
Borrower's wire instructions for Lender to send the advance.
(d) Application of Payments. Each payment made on this Note
shall be credited first, to any interest then due and second, to the outstanding
principal balance hereof.
(e) Prepayment. Borrower may prepay principal on any portion of
this Note at any time, in any amount and without penalty, upon ten days' written
notice to Holder.
II. INTEREST
(a) Interest. The outstanding principal balance of this Note
shall bear interest (computed on the basis of a 365-day year, actual days
elapsed) at the rate of 8.5% per annum ("REGULAR INTEREST").
(b) Payment of Interest. Interest accrued on this Note shall be
payable on the Due Date.
(c) Default Interest. From and after the Due Date of this Note,
or from and after the occurrence of an Event of Default (as defined below), the
outstanding principal balance of this Note shall, at the election of Holder,
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 365-day year, actual days elapsed) equal to the lesser of four
percent (4%) above the rate of interest from time to time applicable to this
Note or the highest rate of interest permitted under applicable usury laws
(either, as applicable, "DEFAULT INTEREST"). The imposition of such Default
Interest shall be effective as of the date of notice to Borrower from Holder
making such election and specifying such Event of Default, provided, however,
that such Default Interest shall not apply if Borrower, within ten (10) days of
the date of such notice, either (i) cures the Event of Default or (ii) pays all
outstanding principal and Regular Interest through the date of such payment.
III. CONVERSION; ADJUSTMENT
(a) Conversion
(i) Upon Failure to Pay Amount Due. At any time on or after the
Due Date, Holder has the right, at Holder's option, prior to the
repayment of principal and interest by Borrower, to convert the
outstanding principal and accrued interest on this Note, in whole or in
part, into Conversion Stock at the Conversion Price; provided, however,
that Holder shall not be entitled to receive the stock certificate
representing the shares of Conversion Stock to be issued upon conversion
of this Note until the original of this Note is surrendered to Borrower.
(ii) Upon Lender's Next Equity Financing. At any time upon or
after the closing of the Next Equity Financing of Borrower, Holder has
the right, at Holder's option, prior to the repayment of principal and
interest by Borrower, to convert the outstanding principal and accrued
interest on this Note, in whole or in part, into shares of Next Equity
Stock at the Next Equity Price; provided, however, that Holder shall not
be entitled to receive the stock certificate representing the shares of
Next Equity Stock to be issued upon conversion of this Note until the
original of this Note is surrendered to Borrower. Borrower and Lender
will take all steps necessary or advisable to effect such result.
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(iii) Issuance of Conversion Stock or Next Equity Stock. As soon
as practicable after any conversion of this Note pursuant to clause (i)
or (ii) above, Borrower at its expense will cause to be issued in the
name of and delivered to Holder, a certificate or certificates for the
number of shares of Conversion Stock to which the Lender shall be
entitled upon such conversion (bearing such legends as may be required
by applicable state and federal securities laws in the opinion of legal
counsel of Borrower, by Borrower's certificate of incorporation or
bylaws, or by any agreement between Borrower and Lender), together with
any other securities and property to which Holder is entitled upon such
conversion under the terms of this Note. Such conversion shall be deemed
to have been made immediately prior to the close of business on the date
that this Note shall have been surrendered for conversion, accompanied
by written notice of election to convert. No fractional shares will be
issued upon conversion of this Note. If upon any conversion of this Note
a fraction of a share would otherwise result, then in lieu of such
fractional share the Borrower will pay the cash value of that fractional
share, calculated on the basis of the Conversion Price or Next Equity
Price, as applicable.
(b) Adjustment Provisions. The number and character of shares of
Conversion Stock issuable upon conversion of this Note (or any shares of stock
or other securities or property at the time receivable or issuable upon
conversion of this Note) and the Conversion Price therefore, are subject to
adjustment upon occurrence of the following events between the date this Note is
issued and the date it is converted:
(i) Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The Conversion Price of this Note and the number
of shares of Conversion Stock issuable upon conversion of this Note (or
any shares of stock or other securities at the time issuable upon
conversion of this Note) shall each be proportionally adjusted to
reflect any stock dividend, stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other
similar event affecting the number of outstanding shares of Conversion
Stock (or such other stock or securities).
(ii) Adjustment for Other Dividends and Distributions. In case
Borrower shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive a dividend or
other distribution payable with respect to the Conversion Stock that is
payable in (A) securities of Borrower (other than issuances with respect
to which adjustment is made under Section III(b)(i), or (B) assets
(other than cash dividends paid or payable solely out of retained
earnings), then, and in each such case, Holder, upon conversion of this
Note at any time after the consummation, effective date or record date
of such event, shall receive, in addition to the shares of Conversion
Stock issuable upon such exercise prior to such date, the securities or
such other assets of Borrower to which Holder would have been entitled
upon such date if Holder had converted this Note immediately prior
thereto (all subject to further adjustment as provided in this Note).
(iii) Adjustment for Reorganization, Consolidation, Merger. In
case of any reorganization of Borrower (or of any other corporation the
stock or other securities of which are at the time receivable on the
conversion of this Note), after the date of this Note, or in case, after
such date, Borrower (or any such corporation) shall consolidate with or
merge into another corporation or convey all or substantially all of its
assets to another corporation, then, and in each such case, Holder, upon
the conversion of this Note (as provided in Section III(a)) at any time
after the consummation of such reorganization, consolidation, merger or
conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the conversion of this Note
prior to such consummation, the stock or other securities or property to
which Holder would have been entitled upon the consummation of such
reorganization, consolidation, merger or conveyance if Holder had
converted this Note immediately prior thereto, all subject to further
adjustment as provided in this Note, and the successor or purchasing
corporation in such reorganization, consolidation, merger or
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conveyance (if other than Borrower) shall duly execute and deliver to
Holder a supplement hereto acknowledging such corporation's obligations
under this Note; and in each such case, the terms of the Note shall be
applicable to the shares of stock or other securities or property
receivable upon the conversion of this Note after the consummation of
such reorganization, consolidation, merger or conveyance.
(iv) Conversion of Next Equity Stock. In case all the authorized
Next Equity Stock of Borrower is converted, pursuant to Borrower's
certificate of incorporation, into Borrower's common stock or other
securities or property, or the Next Equity Stock otherwise ceases to
exist, then, in such case, Holder, upon conversion of this Note at any
time after the date on which the Next Equity Stock is so converted or
ceases to exist (the "TERMINATION DATE"), shall receive, in lieu of the
number of shares of Next Equity Stock that would have been issuable upon
such exercise immediately prior to the Termination Date (the "FORMER
NUMBER OF SHARES OF NEXT EQUITY STOCK"), the stock and other securities
and property to which Holder would have been entitled to receive upon
the Termination Date if the Lender had converted this Note with respect
to the Former Number of Shares of Next Equity Stock immediately prior to
the Termination Date (all subject to further adjustment as provided in
this Note).
(v) Notice of Adjustments. Borrower shall promptly give written
notice of each adjustment or readjustment of the Conversion Price or the
number of shares of Conversion Stock or other securities issuable upon
conversion of this Note. The notice shall describe the adjustment or
readjustment and show in reasonable detail the facts on which the
adjustment or readjustment is based.
(vi) No Change Necessary. The form of this Note need not be
changed because of any adjustment in the Conversion Price or in the
number of shares of Conversion Stock issuable upon its conversion.
(vii) Reservation of Stock. If at any time the number of shares
of Conversion Stock or other securities issuable upon conversion of this
Note shall not be sufficient to effect the conversion of this Note,
Borrower will use best efforts to take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Conversion Stock or other securities issuable upon
conversion of this Note as shall be sufficient for such purpose.
IV COVENANTS
(a) Monthly Reports. During the period from the date hereof until
such time as all amounts due and payable under this Note have been paid in full
or converted into Conversion Stock, Borrower shall, within 20 days after the end
of each month, furnish Lender with a balance sheet, income statement (which
shall include monthly and year-to-date income), and statement of cash flow
(which shall include monthly and year-to-date cash flow). Borrower shall also
provide Lender, on a monthly basis, with copies of all financial information and
materials delivered to the Board of Directors of Borrower, that relate primarily
to the financial operations of Borrower, during the subject month, if any.
(b) Annual Reports. Annually, within 90 days following the end of
Borrower's fiscal year, Borrower shall furnish Lender with an original signed
counterpart of Borrower's annual audited financial statement, which statement
shall have been prepared by, and bear the unqualified opinion of, Borrower's
independent certified public accountants (i.e. said statement shall be
"certified" by such accountants). Such annual statement shall include, at a
minimum (with comparative information for the then prior fiscal year) a balance
sheet, income statement and a statement of cash flow. Borrower shall
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also provide Lender with any "management letter" or other letter delivered to
Borrower by its certified public accountant with such certified public
accountant's recommendations to Borrower.
(c) Officer's Certificates. Borrower shall cause Borrower's Chief
Financial Officer to provide a Certificate (the "OFFICER'S CERTIFICATE") with
the monthly and annual statements to be furnished pursuant to Section IV (a) and
(b) of this Note, which Certificate shall:
(i) Indicate that the subject statement was prepared in
accordance with GAAP consistently applied, and presents fairly the
financial condition of Borrower at the close of, and the results of
Borrower's operations and cash flows for, the period(s) covered,
subject, however, to usual year-end adjustments; and
(ii) Indicate either that (i) no Event of Default has occurred
or (ii) if such an event has occurred, its nature (in reasonable detail)
and the steps (if any) being taken or contemplated by Borrower to be
taken on account thereof.
(d) Additional Financial Information.
(i) In addition to the foregoing, Borrower promptly shall
provide Lender with such additional information concerning Borrower, the
operation of Borrower's business, and Borrower's financial condition,
including original counterparts of financial reports and statements, as
Lender may from time to time reasonably request from Borrower.
(ii) Borrower agrees to give Holder 7 days' prior written notice
of (i) the consummation of the closing of its Next Equity Financing,
(ii) an Acquisition of Borrower other than pursuant to the Merger
Agreement and (iii) any agreement to enter into any such transaction.
(e) Negative Covenants. Borrower covenants and agrees that, until the
earlier of (i) payment in full of the outstanding principal and interest
hereunder or for so long as Lender may have any commitment to make any loans or
advances or (ii) expiration or termination of the Merger Agreement, Borrower
will not breach any of its covenants in the Merger Agreement.
V. DEFAULT
(a) Events of Default. The occurrence of any of the following shall
constitute an "EVENT OF DEFAULT" under this Note:
(i) Borrower shall fail to pay when due any principal, interest,
fees or other amounts payable under this Note.
(ii) Any representation or warranty made by Borrower herein
proves to be untrue or incorrect in all material respects.
(iii) Borrower breaches or fails to comply in any material
respect with any covenant set forth in this Note or in the Merger
Agreement if the Merger Agreement has not expired or been terminated;
provided, however, that, any such failure shall not be deemed an Event
of Default if cured within ten (10) days of occurrence thereof.
(iv) Borrower shall suffer or consent to or apply for the
appointment of a receiver, trustee, custodian or liquidator of itself or
any of its property, or shall generally fail to pay its Indebtedness as
they become due, or shall make a general assignment for the benefit of
creditors;
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Borrower shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with
creditors or any other relief under the Bankruptcy Reform Act, Title 11
of the United States Code, as amended or recodified from time to time
("BANKRUPTCY CODE"), or under any state or federal law granting relief
to debtors, whether now or hereafter in effect; or any involuntary
petition or proceeding pursuant to the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization
or other relief for debtors is filed or commenced against Borrower and
not dismissed within 90 days, or Borrower shall file an answer admitting
the jurisdiction of the court and the material allegations of any
involuntary petition; or Borrower shall be adjudicated a bankrupt, or an
order for relief shall be entered against Borrower by any court of
competent jurisdiction under the Bankruptcy Code or any other applicable
state or federal law relating to bankruptcy, reorganization or other
relief for debtors.
(v) Borrower shall fail to perform or observe any covenant or
agreement to be performed or observed by it contained in any other
agreement or agreements, or in any instrument or instruments, evidencing
any of its Indebtedness, which Indebtedness totals, in aggregate, more
than $1,000,000 and, as a result of that failure, any other party to
that agreement or instrument is entitled to exercise, and has not
irrevocably waived, the right to accelerate the maturity of any amount
owing thereunder.
(b) Remedies. Upon the occurrence of any Event of Default, Holder,
at its option, may declare all sums of principal and interest outstanding
hereunder to be due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by Borrower on the applicable date set forth in Section I
(b), and the obligation, if any, of Holder to extend any further credit
hereunder shall immediately cease and terminate. Borrower shall pay to Holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by Holder in connection with the enforcement of Holder's rights
and/or the collection of any amounts which become due to Holder under this Note,
and the prosecution or defense of any action in any way related to this Note,
including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Lender or any other person) relating to
Borrower or any other person or entity.
VI. REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower hereby represents and warrants to Lender that the
statements in the following paragraphs of this Section VI are all true and
complete:
(a) Organization, Good Standing and Qualification. Borrower has been
duly incorporated and organized, and is validly existing in good standing, under
the laws of the State of Delaware. Borrower has the corporate power and
authority to own and operate its properties and assets and to carry on its
business as currently conducted and as presently proposed to be conducted.
(b) Due Authorization. All corporate action on the part of
Borrower's directors necessary for the authorization, execution, delivery of,
and the performance of all obligations of Borrower under the Note has been
taken, and the Note when executed and delivered will constitute the valid and
legally binding obligation of Borrower, enforceable in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application
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relating to or affecting the enforcement of creditor's rights generally and (ii)
the effect of rules of law governing the availability of equitable remedies.
(c) Corporate Power. Borrower has the corporate power and authority
to execute and deliver this Note, to issue this Note and to carry out and
perform all its obligations under this Note.
(d) No Conflicts. The execution and delivery of this Note will not
conflict with, or (with or without notice or lapse of time or both) result in a
termination, breach, impairment or violation of:
(i) any federal, state, local or foreign judgment, writ, decree,
order, statute, rule or regulation applicable to Borrower (including,
without limitation, any usury laws); or
(ii) any material agreement, contract, understanding,
arrangement, instrument, note, guarantee, indemnity, representation,
warranty, deed, assignment, power of attorney, purchase order, work
order, commitment, covenant, obligation, promise or undertaking of any
nature to which Borrower is a party.
(f) Merger Agreement Representations. Each of the representations
and warranties of Borrower set forth in the Merger Agreement is true and correct
in all material respects (or in all respects, to the extent any such
representation and warranty is already qualified by materiality) on and as of
the date hereof with the same effect as though such representations and
warranties had been made on and as of the date hereof, except that, to the
extent such representations and warranties address matters only as of a
particular date, such representations and warranties are, to such extent, true
and correct on and as of the date hereof and on and as of such particular date
as if made on and as of such particular date.
VII. DEFINITIONS
The following definitions shall apply for all purposes of this
Note:
(a) "ACQUISITION" means any transaction or series of related
transactions that results in the holders of record of an entity's capital stock
immediately prior to the transaction or transactions holding less than fifty
percent (50%) of the voting power of such entity immediately after the
transaction or transactions, including the acquisition of such entity by another
entity and any reorganization (other than a reincorporation of such entity under
the laws of the state of Delaware), merger, consolidation or share exchange, or
which results in the sale of all or substantially all of the assets of such
entity.
(b) "CONVERSION PRICE" means the price at which the loaned funds
may be converted (i) into shares of the Borrower's common stock, which price
shall be $10 per share or (ii) the Next Equity Price, as applicable.
(c) "CONVERSION STOCK" means either Borrower's common stock or the
Next Equity Stock, as applicable. The term "Conversion Stock" shall include
stock and other securities and property at any time receivable or issuable upon
conversion of this Note in accordance with its terms.
(d) "INDEBTEDNESS," with respect to any Person, means any amount
payable by that Person as debtor, borrower, issuer or guarantor pursuant to an
agreement or instrument involving or evidencing money borrowed or received, the
advance of credit, a conditional sale or a transfer with recourse or with an
obligation to repurchase, or pursuant to a lease with substantially the same
economic effect as any such agreement or instrument.
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(e) "NEXT EQUITY FINANCING" means Borrower's next sale of its
common stock or convertible preferred stock in one transaction or a series of
related transactions occurring after the termination of the Merger Agreement.
(f) "NEXT EQUITY PRICE" means the price per share of the Next
Equity Stock issued in Borrower's Next Equity Financing. The Next Equity Price
is subject to adjustment as provided herein.
(g) "NEXT EQUITY STOCK" means shares of equity securities issued
in Borrower's Next Equity Financing following the termination of the Merger
Agreement. The number and character of shares of Next Equity Stock are subject
to adjustment as provided herein and the term "Next Equity Stock" shall include
stock and other securities and property at any time receivable or issuable upon
conversion of this Note in accordance with its terms.
(h) "NOTE" means this Convertible Promissory Note.
(i) "PERSON" means any corporation, natural person, firm, joint
venture, partnership, trust, unincorporated organization or government, or any
political subdivision, department or agency of any government.
VIII. MISCELLANEOUS
(a) Transfer; Successors and Assigns. Neither party hereto may
assign this Note, or any of its rights nor may it delegate any of its
obligations hereunder, without the prior written consent of the other party
hereto. The terms and conditions of this Note shall inure to the benefit of and
be binding upon the respective successors and assigns of the parties.
(b) Governing Law. This Note and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
(c) Notices. Any notice or other communication required or
permitted by this Note will be in writing, will be delivered personally or by
mail or express delivery, postage prepaid, and will be deemed given upon actual
delivery or, if mailed, by registered or certified mail, on the third business
day following deposit in the mails, addressed as follows:
If to Lender: Broadbase Software, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Bay
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Fenwick & West LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower Servicesoft, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇ III, P.C.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the party in question may
have furnished to the other party by written notice given in accordance with
this Section VIII(c).
(d) Amendments and Waivers. Any term of this Note may be amended
only with the written consent of Holder and Borrower. Any amendment or waiver
effected in accordance with this Section VIII(d) shall be binding upon Holder
and Borrower and each transferee of this Note.
(e) Entire Agreement. This Note and the Merger Agreement and the
exhibits thereto constitute the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof and supersede all prior
and contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, between the parties with respect to the
subject matter hereof. The express terms hereof control and supersede any course
of performance or usage of trade inconsistent with any of the terms hereof.
[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in
its name as of the date first above written.
BORROWER: SERVICESOFT, INC.
By:
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
AGREED AND ACKNOWLEDGED:
LENDER: BROADBASE SOFTWARE, INC.
By:
------------------------------
Name: ▇▇▇▇▇ Bay
Title: President and Chief Executive Officer
[SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE]
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EXHIBIT E
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into as of ____________, 2000
by and among BROADBASE Software, Inc., a Delaware corporation ("BROADBASE"),
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as representative (the "REPRESENTATIVE") of all of the holders
of common stock (the "STOCKHOLDERS") of SERVICESOFT, Inc., a Delaware
corporation ("SERVICESOFT"), and State Street Bank and Trust Company of
California, N.A. (the "ESCROW AGENT").
RECITALS
A. Broadbase, Servicesoft and Soldier Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Broadbase ("MERGER SUB"), have
entered into an Agreement and Plan of Merger (the "MERGER AGREEMENT") dated as
of September 18, 2000, pursuant to which Merger Sub will merge with and into
Servicesoft in a reverse triangular merger (the "Merger"), with Servicesoft to
be the surviving corporation of the Merger. Capitalized terms used in this
Agreement and not otherwise defined herein shall have the meanings given to such
terms in the Merger Agreement, a copy of which is attached hereto;
B. Section 2.2 of the Merger Agreement provides that, at the Effective
Time, Broadbase will be entitled to withhold from the Stockholders an aggregate
number of the shares of Broadbase common stock equal to ten percent (10%) of the
shares of Broadbase common stock issuable to the Stockholders at the Effective
Time for the purpose of securing the Stockholders' indemnification obligations
to Broadbase and the other Indemnified Persons pursuant to the terms and
conditions set forth in Article 12 of the Merger Agreement and in this
Agreement;
C. The Representative is entering into this Agreement on behalf of the
Stockholders as a material inducement and consideration for Broadbase to enter
into the Merger Agreement and to consummate the transactions contemplated
therein and as a material inducement and condition precedent to consummation of
the Merger; and
D. The parties desire to set forth in this Agreement the terms and
conditions pursuant to which the Escrow Shares shall be deposited in, held in
and delivered from an escrow account.
NOW, THEREFORE, in consideration of the facts stated in the foregoing
recitals and the mutual promises hereinafter set forth, the parties hereby agree
as follows:
1. ESCROW AND INDEMNIFICATION
1.1 Establishment of Escrow.
(a) Deposit of Escrow Shares. On the Closing Date,
Broadbase will deposit with U.S. Stock Corporation, transfer agent for
Broadbase common stock (the "EXCHANGE AGENT"), the Exchange Shares,
including shares to be subsequently held in escrow. The Exchange Agent will
give the Escrow Agent prompt written notice of the Closing Date and
Effective Time of the Merger. Promptly after the Closing, the Exchange Agent
will issue to the Escrow Agent the Escrow Shares to be withheld from the
Stockholders upon the surrender of their Servicesoft Certificates (including
any Additional Escrow Shares, as defined in Section 2.1(b)), each registered
in the name of the applicable Stockholder.
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(b) Delivery of Stock Powers. As promptly as practicable
after receipt of the letter of transmittal from the Exchange Agent, each
Stockholder will deliver to the Escrow Agent three duly endorsed stock
powers (each a "STOCK POWER") substantially in the form attached hereto as
Exhibit A and bearing a "medallion" signature guarantee. In the event any
Additional Escrow Shares are issued, or if the Escrow Agent reasonably
requires an additional Stock Power to effect a transfer, each Stockholder
will, upon request, promptly execute and deliver an additional Stock Power
to the Escrow Agent.
(c) Legends. Stock certificates representing Escrow Shares
will (until they are released to the Stockholders or Broadbase in accordance
with this Agreement) bear the following legend indicating that they are
subject to this Agreement (in addition to any other legends which might be
applicable to such shares):
"THE SECURITIES REPRESENTED HEREBY MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED ONLY IN ACCORDANCE WITH THE TERMS
OF AN ESCROW AGREEMENT AMONG THE ISSUER, THE HOLDER THEREOF AND STATE
STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A. A COPY OF SUCH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER."
Such legend shall be removed from certificates representing Escrow Shares
prior to the release of such Escrow Shares.
(d) Investments of Cash. The Escrow Agent shall invest
cash, if any, held in the Escrow, other than amounts immediately
distributable by the Escrow Agent, in the SSgA U.S. Treasury Money Market
Fund. For tax reporting and withholding purposes, the income on such
investments shall be allocated to the Stockholders in accordance with their
proportionate interests in the Escrow Shares as set forth in the Escrow
Ledger (defined in Section 2.2).
1.2 Indemnification. Broadbase and the other Indemnified Persons
are entitled to be indemnified by the Stockholders pursuant to the terms of
Article 12 of the Merger Agreement against any Damages during the Escrow Period.
Each of the Stockholders has agreed to the use of the Escrow Shares as
collateral for these indemnity obligations, subject to the terms and limitations
set forth in Article 12 of the Merger Agreement and in this Agreement.
2. OWNERSHIP INTERESTS IN AND RELEASE OF THE ESCROW SHARES
2.1 Stockholders' Interests in the Escrow Shares.
(a) Individual Stockholder Interests. The Escrow Shares
shall be evidenced by certificates issued in the name of each Stockholder.
All of the Escrow Shares shall be deemed to be issued and outstanding
capital stock of Broadbase.
(b) Dividends. If Broadbase declares any cash dividends,
dividends payable in other property or other distributions of any kind with
respect to Escrow Shares held by the Escrow Agent, Broadbase will issue such
distributions directly to the Stockholders. Tax-free (pursuant to Section
305(a) of the Code) stock dividends declared on the Escrow Shares during the
Escrow Period in order to effect a stock split of Broadbase common stock
("ADDITIONAL ESCROW SHARES") will be delivered promptly to the Escrow Agent,
held in escrow and distributed to the Stockholders in the same manner and in
the
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same proportions as the Escrow Shares. For all purposes of this Agreement,
the Additional Escrow Shares will be treated the same as the Escrow Shares.
Unless and until the Escrow Agent receives certificates representing
Additional Escrow Shares, the Escrow Agent may assume, without inquiry, that
no Additional Escrow Shares have been, or are required to be, issued and
that the stock certificates that the Escrow Agent possesses represent all of
the Escrow Shares.
(c) Voting and Other Rights of Ownership. While the Escrow
Shares remain in the possession of the Escrow Agent, each Stockholder
beneficially owning Escrow Shares will retain and will be able to exercise
with respect to such Escrow Shares: (i) voting rights, and (ii) all other
incidents of ownership of such Escrow Shares which are not inconsistent with
the terms of this Agreement. Subject to the rights of Broadbase under the
Merger Agreement and this Agreement, all beneficial interest in the Escrow
Shares shall be the property of the Stockholders from and after the Closing,
and Broadbase shall have no interest therein. Each of the Stockholders shall
be obligated for all federal, state or local taxes applicable to such
Stockholder's interest in the Escrow Shares.
(d) No Transfers or Encumbrances. Prior to the Release
Date, as defined in Section 2.3(a), (or the release of the Escrow Shares,
with respect to shares held with respect to pending Claims pursuant to
Section 2.3(b) of this Agreement), Stockholders may not sell, assign,
transfer, pledge or otherwise place any encumbrance on, any Escrow Shares or
any beneficial interest therein, except: (i) transfers made for estate
planning purposes, and (ii) transfers by operation of law or laws of descent
and distribution. In the case of any permitted transfer, the transferee will
be subject to all terms and provisions of this Agreement. Also, prior to the
Release Date (or the release of the Escrow Shares, with respect to shares
held with respect to pending Claims pursuant to Section 2.3(b) of this
Agreement), no Escrow Shares nor any beneficial interest therein shall be
taken or reached by any legal or equitable process in satisfaction of any
debt or other liability of a Stockholder, except to satisfy such
Stockholder's obligations under Article 12 of the Merger Agreement. The
Escrow Agent shall have no responsibility for determining or enforcing
compliance with this paragraph, other than by retaining possession of the
Escrow Shares.
(e) Right of Escrow Agent to Transfer Shares.
Notwithstanding the other provisions of this Section 2.1, the Escrow Agent
shall have the power to effect any transfer of Escrow Shares required by
this Agreement or necessary for administrative purposes. Broadbase shall
cooperate with the Escrow Agent in promptly issuing, or causing its transfer
agent to promptly issue, such stock certificates as shall be required to
effect such transfers.
2.2 Escrow Ledger. The Escrow Agent shall create and maintain a
written record of each Stockholder's interest in the Escrow Shares, in
substantially the form attached as Exhibit B (the "ESCROW LEDGER"). The Escrow
Agent shall adjust the Escrow Ledger to reflect changes in each Stockholder's
interests in the Escrow Shares. This duty will continue until the Escrow Agent
is required to deliver each Stockholder's Escrow Shares pursuant to Section 2.3.
Absent manifest error, all of the Escrow Agent's determinations as to the Escrow
Ledger shall be binding and conclusive on all parties to this Agreement.
Adjustments to the Escrow Ledger shall include, but are not limited to, the
following:
(a) Adjustments for Capital Changes. The Escrow Agent
shall adjust the Escrow Ledger to reflect the Escrow Agent's receipt of
Additional Escrow Shares pursuant to Section 2.1(b).
(b) Adjustments for Claims. The Escrow Agent shall deduct
Escrow Shares that become subject to pending Contested Claims (as defined in
Section 4.3) of Broadbase or other
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Indemnified Persons from column 6 of each Stockholder's account in the
Escrow Ledger and add such Escrow Shares to column 5 of each Stockholder's
account. The Escrow Agent shall deduct Escrow Shares that are charged and
allocated to each Stockholder's account pursuant to Article 4 in
satisfaction of Claims (as defined in Section 3.1) by Broadbase or other
Indemnified Persons from columns 2-6, as appropriate.
2.3 Release of Escrow Shares to Stockholders.
(a) Release of Escrow Shares Generally. On the first
anniversary of the Closing Date (the "RELEASE DATE"), in accordance with
Section 2.3(c), the Escrow Agent shall certify the Escrow Share balances
reflected in the Escrow Ledger as of that date and direct the Exchange Agent
to release the appropriate number of Escrow Shares to each Stockholder as
designated in column 6 of the Escrow Ledger, which shall equal such
Stockholder's original Escrow Shares plus any Additional Escrow Shares
issued to such Stockholder, minus: (i) any Escrow Shares attributable to
such Stockholder that were returned to Broadbase in accordance with Article
4 in satisfaction of a Claim(s) by Broadbase or another Indemnified
Person(s), and (ii) any Escrow Shares attributable to such Stockholder that
are subject to pending Claims of Broadbase or other Indemnified Persons, to
be held pursuant to Section 2.3(b). The Escrow Agent will direct the
Exchange Agent to remove the legend described in Section 1.1(c) from all
Escrow Shares distributed by it.
(b) Escrow Shares Subject to Pending Claims.
(i) Upon the Release Date and thereafter, the
Escrow Agent shall continue to hold any Escrow Shares that are subject
to pending Claims until the ten (10) business day period in Section 4.2
expires. At that time, the Escrow Agent shall, as appropriate, either
instruct the Exchange Agent to distribute the Escrow Shares subject to
such Claims pursuant to Section 4.2, or continue to hold the Escrow
Shares subject to such Claims pursuant to Section 2.3(b)(ii).
(ii) Upon the Release Date and thereafter, the
Escrow Agent shall continue to hold any Escrow Shares that are subject
to Contested Claims of Broadbase or other Indemnified Persons, as
designated in column 5 of the Escrow Ledger, until the Escrow Agent
receives written notice of resolution of each specific Claim pursuant to
Section 4.3(c). After the Escrow Agent receives such notice, in
accordance with Section 2.3(c), the Escrow Agent shall: (a) either
deliver or instruct the Exchange Agent to deliver to each Stockholder
the number of Escrow Shares, if any, due to each Stockholder in
accordance with the resolution of the Claim; (b) if applicable, charge
and allocate Escrow Shares against each Stockholder's account in
satisfaction of the resolution of the Claim and either return or
instruct the Exchange Agent to return such Escrow Shares back to
Broadbase; and (c) notify the Representative in writing of any deduction
of Escrow Shares as promptly as reasonably practicable. The Escrow Agent
shall make the appropriate entries in the Escrow Ledger.
(c) Procedure for Release and Delivery. Subject to Section
2.3(b)(i), within five (5) days after the Release Date (or with respect to
Escrow Shares held pursuant to Section 2.3(b)(ii), within five (5) days
after the Escrow Agent's receipt of written notice of a resolution of a
Claim pursuant to Section 4.3(c)), the Escrow Agent shall instruct the
Exchange Agent to deliver to each Stockholder by mailing (by registered or
certified mail, return receipt requested) to the address set forth opposite
each Stockholder's name on the Escrow Ledger (or such other address as
provided in writing by the Representative to the Escrow Agent) the number of
Escrow Shares determined in accordance with Section 2.3(a). No fractional
Escrow Shares will be delivered. Broadbase shall
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have provided to the Escrow Agent prior to the expiration of the Escrow
Period, and the Escrow Agent shall distribute to each Stockholder at the
time Escrow Shares, if any, are distributed to each Stockholder, cash in
lieu of any fractions of Escrow Shares in an amount equal to the product of
such fraction multiplied by the value of an Escrow Share as determined in
accordance with Section 4.5. The Escrow Agent need not invest cash on hand
pending distribution.
3. CLAIMS
3.1 "Claim" Defined. As used herein, the term "CLAIM" means a
claim for indemnification under Article 12 of the Merger Agreement made by
Broadbase or by any other Indemnified Person.
3.2 Notice of Claim.
(a) When a Notice of Claim is Required. An officer of
Broadbase shall execute and deliver written notice of a Claim (a "NOTICE OF
CLAIM") to the Representative and the Escrow Agent as promptly as reasonably
practicable, and in no event after the Release Date, upon Broadbase's
discovery of any Damages directly or indirectly arising out of or resulting
from:
(i) any misrepresentation or breach of or default
in connection with any of the representations, warranties, agreements
and covenants given or made by Servicesoft in the Merger Agreement or
any certificate, document or instrument delivered by or on behalf of
Servicesoft pursuant to the Merger Agreement;
(ii) any Excess Expenses;
(iii) any order or proceeding brought by any third
person against Broadbase and/or any Indemnified Person that is based
upon or includes assertions that would, if true, constitute a
misrepresentation, breach of or default in connection with any of the
representations, warranties, agreements and covenants given or made by
Servicesoft in the Merger Agreement or any certificate, document or
instrument delivered by or on behalf of Servicesoft pursuant to the
Merger Agreement (a "THIRD PARTY PROCEEDING"); or
(iv) any failure of a Servicesoft Stockholder to
have good, valid and marketable title to the issued and outstanding
Servicesoft common stock disclosed on Item 4.3(a) of the Servicesoft
Disclosure Letter as being held by such Servicesoft Stockholder;
(b) Failure to Provide Notice of Claim. Failure to provide
such notice in a timely manner shall not reduce Broadbase's indemnification
rights or the indemnification obligations of the Stockholders in this
Agreement and under the Merger Agreement, unless the failure to provide such
timely notice impairs the indemnifying party's ability to defend the Claim,
and then only to the extent of such impairment, and except as set forth in
Section 3.2(c) below.
(c) All claims for Damages under Article 12 of the Merger
Agreement must be initiated prior to the expiration of the Escrow Period.
3.3 Contents of Each Notice of Claim. Each Notice of Claim given
by Broadbase pursuant to Section 3.2 shall be set forth in writing and shall
contain the following information to the extent it is reasonably available to
Broadbase:
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(a) Statement of Damages. The statement of Damages shall
include Broadbase's good faith estimate of the reasonably foreseeable
maximum amount of the alleged Damages that will ultimately be incurred by
Broadbase and/or any other Indemnified Person in connection with such Claim,
including, without limitation, any Damages from a potential Third Party
Proceeding.
(b) Statement of Basis for Damages. The statement of basis
for Damages shall include: (i) a brief description of the facts,
circumstances or events giving rise to the alleged Damages based on
Broadbase's or any other affected Indemnified Person's good faith belief,
and (ii) if applicable, specific references to the provisions of the Merger
Agreement alleged to have been breached.
3.4 Requirement of Resolution of Claims. The Escrow Agent shall
not act regarding any of the Escrow Shares held pursuant to a Notice of Claim
until such Notice of Claim has been resolved in accordance with Article 4 and,
in the case of a Contested Claim, it receives appropriate notice pursuant to
Section 4.3(c).
4. RESOLUTION OF CLAIMS
Any Notice of Claim received by the Representative and the Escrow Agent
pursuant to Article 3 shall be resolved as follows:
4.1 Third Party Proceedings. Broadbase shall have the right, at
the Stockholders' expense (to be paid in Escrow Shares subject to the provisions
of Section 12 of the Merger Agreement), to select counsel in connection with
conducting the defense or handling each Third Party Proceeding and defend or
handle such Third Party Proceeding in such manner as Broadbase may deem
reasonably appropriate (including, without limitation, consent to an entry of
judgement or settlement of such Third Party Proceeding); provided, however, that
Broadbase shall keep the Representative timely apprised of the status of such
Third Party Proceeding. The reasonable costs and expenses incurred by Broadbase
in connection with such defense (including, but not limited to, reasonable
attorneys' fees, other professionals' and experts' fees and court or arbitration
costs) shall be included in the Damages for which Broadbase may seek indemnity
pursuant to a Claim made by Broadbase or an Indemnified Person hereunder. The
Representative and the Stockholders shall cooperate with Broadbase and shall be
entitled to participate in the defense or handling of the Third Party Proceeding
with their own counsel and at their own expense.
4.2 Uncontested Claims. If, within ten (10) business days after
the Escrow Agent and the Representative receive a Notice of Claim, the
Representative does not contest such Notice of Claim (an "UNCONTESTED CLAIM") in
a written notice delivered to the Escrow Agent pursuant to Section 4.3, then the
Escrow Agent shall: (a) immediately charge and allocate against each
Stockholder's accounts in the Escrow Ledger the number of Escrow Shares
required, pursuant to Section 4.5, to satisfy the amount of Damages specified in
such Notice of Claim (reduced by any recovery to date under policies of
insurance not reflected in the Notice of Claim); (b) update the Escrow Ledger to
reflect the effect of the deduction pursuant to Section 2.2(b); and (c) notify
the Representative in writing of the deduction of Escrow Shares as promptly as
reasonably practicable. The number of Escrow Shares deducted hereunder shall be
charged to and allocated among the Stockholders pro rata according to each
Stockholder's percentage share, as set forth in column 4 of the Escrow Ledger,
except as otherwise provided for in Section 12.2 of the Merger Agreement.
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4.3 Contested Claims. If Broadbase and the Escrow Agent receive a
written notice contesting all, or a portion of, a Notice of Claim within the ten
(10) business day period described in Section 4.2 (a "CONTESTED CLAIM"), then
the parties will work together in good faith to resolve their dispute for up to
thirty (30) days. If the Contested Claim is not resolved in such thirty (30) day
period, then: (a) such Contested Claim shall be resolved by binding arbitration
in accordance with Section 13.10 of the Merger Agreement, and (b) the Escrow
Agent shall continue to hold the number of Escrow Shares sufficient, pursuant to
Section 4.5, to satisfy the maximum potential award to all Indemnified Persons
under such Claim. Any portion of the Notice of Claim that is not contested by
the Representative in accordance with the foregoing provisions of this Section
4.3 shall be resolved as an Uncontested Claim in accordance with Section 4.2. In
addition to the provisions of Section 13.10 of the Merger Agreement, resolution
of Contested Claims shall be subject to the following additional provisions:
(a) Award.
(i) Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator shall render findings of fact and
conclusions of law and a final written arbitration award setting forth
the basis and reasons for any decision reached (the "FINAL AWARD") and
shall deliver such documents to the Escrow Agent, the Representative and
Broadbase. The Final Award shall constitute a conclusive determination
of all issues in question, binding upon the Representative, the
Stockholders and Broadbase, and shall not be contested by the
Representative, the Stockholders or Broadbase.
(ii) To the extent that the Final Award determines
that Broadbase or any other Indemnified Person has actually incurred
Damages in connection with the Contested Claim through the date of the
Final Award ("INCURRED DAMAGES"), the Final Award will set forth and
award to Broadbase the amount of such damages, reduced by any recovery
under policies of insurance to date that were not specified in the
Notice of Claim. In addition, the Final Award will set forth an
additional amount of Damages equal to the reasonably foreseeable amount
of alleged Damages that the arbitrator determines (based on the evidence
submitted by the parties in the arbitration) are reasonably likely to be
incurred by Broadbase and any other Indemnified Person as a result of
the facts giving rise to the Contested Claim ("ESTIMATED DAMAGES"),
which amount of Estimated Damages may, without limitation, include the
amount of damages claimed by a third party in an action brought against
any Indemnified Person based on alleged facts which, if true, would give
rise to Damages. The Escrow Agent will continue to hold Escrow Shares
representing the Estimated Damages, in accordance with Section 4.5, in
escrow, including, if appropriate, beyond the expiration of the Escrow
Period, until and to the extent that: (A) the arbitrator deems that
Broadbase has actually incurred such Estimated Damages, reduced by any
recovery under policies of insurance to date that were not specified in
the Notice of Claim; (B) the arbitrator deems that Broadbase will not
actually incur any additional Estimated Damages; or (C) the parties come
to a written settlement agreement pursuant to Section 4.4. Both Incurred
Damages and Estimated Damages owed to Indemnified Persons are deemed to
be Damages for purposes of this Agreement. Upon issuance and delivery of
the Final Award pursuant to Section 4.3(a)(i), and subject to receipt by
the Escrow Agent of a written notice of resolution of the Claim pursuant
to Section 4.3(c), Broadbase will immediately be entitled to recover the
amount of any Incurred Damages awarded to Broadbase under such Final
Award.
(b) Timing. The Representative, Broadbase and the
arbitrator shall conclude each arbitration pursuant to this Section 4.3 as
promptly as practicable. Time is of the essence with regards to all aspects
of this Agreement.
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(c) Notice of Resolution of Claim. The Escrow Agent shall
not deliver Escrow Shares held pursuant to a Contested Claim until the
Escrow Agent receives appropriate notice. Such notice must consist of: (i)
written notice of the resolution of such Claim executed by both the
Representative and Broadbase; (ii) a written settlement agreement pursuant
to Section 4.4; (iii) delivery to the Escrow Agent of an appropriate final
non-appealable order by a court of competent jurisdiction; or (iv) delivery
to the Escrow Agent of a copy of the Final Award of an arbitrator or court.
The Escrow Agent shall act on such notice without further inquiry in
accordance with Sections 2.3(b) and (c).
(d) Multiplicity of Claims. The assertion of any single
Claim for indemnification hereunder will not bar Broadbase from asserting
other Claims hereunder.
4.4 Settled Claims. If a Claim (including a Contested Claim) is
settled by a written settlement agreement executed by the Representative and
Broadbase, then the Representative and Broadbase shall promptly deliver such
written settlement agreement to the Escrow Agent with written instructions on
the appropriate charges or adjustments to be made to the Escrow Ledger, and the
Escrow Agent shall promptly release and/or return the Escrow Shares subject to
such claim in accordance with Sections 2.3(b) and 2.3(c). Any settlement which
is effected without the consent of the Representative, which consent shall not
be unreasonably withheld or delayed, shall not be determinative of the amount of
Damages for which indemnification may be sought.
4.5 Determination of Number of Escrow Shares for Claims. Unless
a specific number of Escrow Shares is specified, or unless any claim asserts
that a different allocation should be made pursuant to Section 12.2 of the
Merger Agreement, any amount owed to Broadbase under this Agreement will be
immediately payable to Broadbase, subject to Section 4.3(c), by deducting pro
rata from each Stockholder's account in the Escrow Ledger the number of Escrow
Shares equal to: (a) the Damages for that Claim, divided by, (b) the average of
the closing prices of Broadbase common stock for the ten (10) trading days
ending 2 trading days prior to the Closing (subject to adjustment for changes in
Broadbase capital stock as set forth in a certificate of Broadbase delivered to
the Escrow Agent).
4.6 Election of Remedies. Broadbase may institute Claims against
the Escrow Shares and in satisfaction thereof may elect to have such Escrow
Shares deducted from the Escrow Ledger, after any notice to the Representative
required hereunder, without making any other claims directly against the
Stockholders and without rescinding or attempting to rescind the transactions
consummated pursuant to the Merger Agreement. Broadbase need not exhaust any
other remedies that may be available to it but may proceed directly in
accordance with the provisions of this Agreement.
5. THE ESCROW AGENT
5.1 Limitation of Escrow Agent's Liability/Responsibility. In
performing any of its duties under this Escrow Agreement, the Escrow Agent shall
not be liable to any party for damages, losses or expenses, except in the event
of gross negligence or willful misconduct on its part. In no event shall the
Escrow Agent be liable for punitive, consequential or incidental damages. The
Escrow Agent shall not incur any such liability for any action taken or omitted
in reliance upon any instrument, including any written statement or affidavit
provided for in this Escrow Agreement that the Escrow Agent shall in good faith
believe to be genuine; nor will the Escrow Agent be liable or responsible for
forgeries, fraud, impersonations or determining the scope of any agent's
authority. In addition, the Escrow Agent may consult with legal counsel of its
choice in connection with its duties under this Escrow Agreement and shall be
fully protected in any act taken, suffered or permitted by it in good faith in
accordance with the advice of counsel. The Escrow Agent is not responsible for
determining and
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verifying the authority of any person acting or purporting to act on behalf of
any party to this Escrow Agreement. The Escrow Agent undertakes to perform such
duties as are specifically set forth in this Escrow Agreement, and the Escrow
Agent shall not be liable except for the performance of such duties as are
specifically set forth in this Escrow Agreement. No implied covenants or
obligations shall be read into this Escrow Agreement against the Escrow Agent.
5.2 Indemnification of the Escrow Agent.
(a) For the purposes of this Section 5.2, references to
the Escrow Agent shall include the Escrow Agent's officers, directors,
employees, counsel and agents.
(b) Each party to this Agreement other than the Escrow
Agent and the Representative in his capacity as the Representative (each an
"INDEMNIFYING PARTY" and together the "INDEMNIFYING PARTIES") will severally
reimburse, indemnify and hold harmless the Escrow Agent from and against any
damage, liability or loss suffered, incurred by, or asserted against the
Escrow Agent (including amounts paid in settlement of any action, suit,
proceeding, or claim brought or threatened to be brought and including
reasonable expenses of legal counsel, collectively, "LOSS") arising out of,
in connection with or based upon any act or omission by the Escrow Agent
relating in any way to this Agreement or the Escrow Agent's services
hereunder. This indemnity will exclude any indemnification for any Loss
arising in whole or in part, directly or indirectly, from any fraud, gross
negligence or willful misconduct on the Escrow Agent's part. Anything in
this Agreement to the contrary notwithstanding, in no event will the Escrow
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits) suffered by
another party to this Agreement or by any Stockholder, even if the Escrow
Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action. The Escrow Agent's right to
indemnification hereunder will survive the Escrow Agent's resignation or
removal as the Escrow Agent and will survive the termination of this
Agreement by lapse of time or otherwise.
(c) Each Indemnifying Party may participate at its own
expense in the defense of any claim or action that may be asserted against
the Escrow Agent related to this Agreement, and if the Indemnifying Parties
so elect, the Indemnifying Parties may assume the defense of such claim or
action; provided, however, that, if there exists a conflict of interest that
would make it inappropriate, in the sole discretion of the Escrow Agent, for
the same counsel to represent both Escrow Agent and the Indemnifying
Parties, the Escrow Agent's retention of separate counsel will be
reimbursable as provided in Section 5.2(b).
(d) The Escrow Agent will notify each Indemnifying Party
by letter, or by telephone or telecopy confirmed by letter, of any receipt
by Escrow Agent of a written assertion of a claim against the Escrow Agent
arising out of this Agreement, or any action commenced against the Escrow
Agent arising out of this Agreement, within five (5) business days after the
Escrow Agent's receipt of written notice of such claim. However, the Escrow
Agent's failure to so notify each Indemnifying Party will not operate in any
manner whatsoever to relieve an Indemnifying Party from any liability that
it may have to the Escrow Agent under this Section 5.2 or otherwise unless
such failure by the Escrow Agent to give such notice materially prejudices
such Indemnifying Party.
5.3 Compensation and Expenses of Escrow Agent. All fees and
expenses of the Escrow Agent incurred in the ordinary course of performing its
responsibilities hereunder shall be paid by Broadbase upon receipt of a written
invoice by Escrow Agent in accordance with Exhibit C attached hereto.
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5.4 Resolution of Conflicting Demands. In the event conflicting
demands are made or conflicting notices are served upon the Escrow Agent with
respect to the Escrow Shares or the Escrow Ledger, the Escrow Agent shall have
the right, at the Escrow Agent's election, to either: (a) give written notice to
the other parties to this Agreement that it has received conflicting
instructions from Broadbase and the Representative and is refraining from taking
action until it receives instructions consented to in writing by both Broadbase
and the Representative, or (b) resign so that a successor escrow agent can be
appointed pursuant to Section 5.5. In the further event that the Escrow Agent
gives written notice under "(a)" above and does not receive instructions
consented to in writing by both Broadbase and the Representative within thirty
(30) calendar days, then the Escrow Agent may file a suit in interpleader and
obtain an order from a court of competent jurisdiction located in Wilmington,
Delaware, requiring the parties to interplead and litigate in such court their
several claims and rights among themselves. In this case, the Escrow Agent shall
thereby be fully released and discharged from all further obligations imposed
upon it under this Agreement with respect to the matters that are the subject of
such interpleader suit, and Broadbase shall pay the Escrow Agent all costs,
expenses and reasonable attorneys' fees expended or incurred by the Escrow Agent
pursuant to the exercise of Escrow Agent's rights under this paragraph.
5.5 Successor Escrow Agent.
(a) In the event the Escrow Agent becomes unavailable or
unwilling to continue in its capacity as Escrow Agent hereunder, the Escrow
Agent may resign and be discharged from its duties hereunder by giving
notice of resignation to the parties to this Agreement, specifying a date
not less than thirty (30) days following such notice date of when such
resignation shall take effect and refunding to Broadbase any prepaid but
unearned fees previously paid by Broadbase to the Escrow Agent hereunder.
Broadbase shall designate a successor Escrow Agent reasonably satisfactory
to the Representative prior to the expiration of such thirty (30) day period
by giving written notice to the Escrow Agent and the Representative. If no
successor escrow agent is named by Broadbase, then the Escrow Agent may
apply to a court of competent jurisdiction for the appointment of a
successor Escrow Agent. In either case, the Escrow Agent shall promptly
transfer the Escrow Shares and Escrow Ledger to the designated successor
Escrow Agent.
(b) In the event Escrow Agent is merged with, acquired or
otherwise combined with another entity, or Escrow Agent transfers all or
substantially all of its corporate trust business (including the escrow
contemplated by this Agreement) to another institution, the successor as a
result of such transaction will be the Escrow Agent hereunder without any
further action by the parties hereto.
6. THE REPRESENTATIVE
6.1 Duties as Provided in Merger Agreement. From and after the
deposit of the Escrow Shares as provided in Article 1, the Stockholders shall be
represented by the Representative, or, upon written notice to the Escrow Agent,
by his successor appointed in accordance with Section 12.6(d) of the Merger
Agreement. The Representative (a) shall have the duties and obligations set
forth in Section 12.6(a) of the Merger Agreement, (b) shall not be liable to the
Stockholders in connection with the performance of his duties and obligations
under this Agreement except as set forth in Section 12.6(b) of the Merger
Agreement, and (c) shall be indemnified by the Stockholders in connection with
the performance of the his duties and obligations under this Agreement as
provided in Section 12.6(c) of the Merger Agreement.
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6.2 No Compensation; Reimbursement for Expenses. Except as stated
in Section 12.6(c) of the Merger Agreement and in this paragraph, the
Representative shall not be entitled to receive any compensation for his
services in connection with this Agreement. Any out-of-pocket costs and expenses
reasonably incurred by the Representative in connection with actions taken
pursuant to the terms of this Agreement shall be paid by the Stockholders in
proportion to their percentage interest in the aggregate Escrow Shares set forth
in column 4 of the Escrow Ledger promptly upon the Representative's written
request to the Stockholders and, at the Representative's option, may be taken by
the Representative from the Escrow Shares reflected in the Escrow Ledger after
the final resolution of all Claims made under this Agreement.
6.3 Tax Reporting Documentation. The Representative agrees to use
all reasonable efforts to obtain for the Escrow Agent certified tax
identification numbers for each of the Stockholders consisting of appropriate
Forms W-9 (or Forms W-8, in the case of non-U.S. persons) and other forms and
documents that the Escrow Agent may reasonably request (collectively, "TAX
REPORTING DOCUMENTATION") to the Escrow Agent within 30 days after the date of
such request. The parties hereto understand that, if such Tax Reporting
Documentation is not so certified to the Escrow Agent, the Escrow Agent may be
required by the Code, as it may be amended from time to time, to withhold a
portion of the interest earned on the investment of monies or other property
held by the Escrow Agent pursuant to this Agreement.
7. MISCELLANEOUS
7.1 Term of Escrow Agreement. This Escrow Agreement shall
terminate upon the distribution by the Escrow Agent of all Escrow Shares and
other property held in escrow.
7.2 Entire Agreement. This Agreement, the Merger Agreement and
the exhibits hereto and thereto constitute the entire understanding and
agreement of the parties with respect to the subject matter of this Agreement
and supersede all prior agreements or understandings, written or oral, between
the parties with respect to the subject matter hereof. As between the Escrow
Agent and the other parties hereto, all such parties agree that the Escrow
Agent's duties are defined only in this Agreement, any contrary provisions of
the Merger Agreement notwithstanding.
7.3 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 better evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement.
7.4 Assignment; Binding Nature. Broadbase may not assign all or
any of its rights and obligations hereunder without the prior written consent of
the Escrow Agent and the Representative, which consent shall not be unreasonably
withheld. Except for assignments in connection with permitted transfers of
Escrow Shares under Section 2.1(d) of this Agreement, neither the Stockholders,
nor the Representative on their behalf, may assign any of rights or obligations
of the Stockholders hereunder, nor may their rights or obligations be assigned
by operation of law, without the prior written consent of Broadbase. This
Agreement and shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
7.5 Absence of Third Party Beneficiary Rights. No provisions of
this Escrow Agreement are intended, nor shall 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
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any other person or entity unless specifically provided otherwise herein, and,
except as so provided, all provisions hereof shall be solely between the parties
to this Escrow Agreement.
7.6 Construction of Agreement. This Agreement has been negotiated
by the respective parties hereto and their attorneys and have been reviewed by
each party hereto. Accordingly, no ambiguity in the language of this Agreement
will be construed for or against either party.
7.7 Section Headings. A reference to a section, article or
exhibit will mean a section in, article 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.
7.8 Amendment. This Agreement may be amended by the written
agreement of Broadbase, the Escrow Agent and the Representative; provided,
however, that, if the Escrow Agent does not agree to an amendment agreed upon by
Broadbase and the Representative, then the Escrow Agent shall resign and a
successor Escrow Agent shall be appointed in accordance with the provisions of
Section 5.5. No amendment of the Merger Agreement shall increase or alter the
Escrow Agent's duties, responsibilities or liability hereunder without the
Escrow Agent's written agreement.
7.9 Waiver. No waiver by any party hereto of any condition or of
any breach of any provision of this Agreement shall be effective unless it is
set forth in a writing signed by such party. No waiver by any party of any such
condition or breach, in any one instance, shall be deemed to be a further or
continuing waiver of any such condition or breach or a waiver of any other
condition or breach of any other provision contained herein. 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.
7.10 Severability. If any provision of this Agreement or its
application 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 to effect the intent of the
parties hereto. The parties will 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.
7.11 Governing Law. The validity of this Agreement the
construction of its terms, and the interpretation and enforcement of the rights
and duties of the parties of this Agreement will be exclusively governed by and
construed in accordance with the internal laws of the State of Delaware, as
applied to agreements entered into solely between residents of and to be
performed entirely in the State of Delaware, without reference to that body of
law relating to conflicts of law or choice of law.
7.12 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.
7.13 Notices. No notice or other communication shall be deemed
given unless sent in the manner, and to the persons, specified in this Section
7.13. All notices and other communications hereunder will be in writing and win
be deemed given (a) upon receipt if delivered personally (or if mailed by
registered or certified mail), (b) the day after dispatch if sent by overnight
courier; or (c) upon dispatch if transmitted by facsimile (and confirmed by a
copy delivered in accordance with clause (a) or (b)), addressed to the parties
at the following addresses:
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If to Broadbase: Broadbase Software, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Fenwick & West LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Escrow Agent: State Street Bank and Trust Company of California,
N.A.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
(Broadbase/Servicesoft 2000 escrow)
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Representative: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
c/o Servicesoft, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (508) ___-____
With a copy to: ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇ III, P.C.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its address for such communications by giving notice
thereof to the other parties. Notwithstanding the foregoing, notices addressed
to the Escrow Agent shall be effective only upon receipt except that a notice
faxed to Escrow Agent shall be deemed received on such day provided that (i)
such fax was transmitted prior to 5:00 P.M. Pacific Standard Time on such date
and (ii) there exists written confirmation of such transmittal. If any Claim,
objection thereto or any other document of any kind is required to be delivered
to the Escrow Agent and any other person, the Escrow Agent may assume without
inquiry that such Claim notice, objection or other document was received by such
other person on the date on which it was received by the Escrow Agent.
7.14 Counterparts. This Escrow Agreement may be executed in any
number of counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
BROADBASE SOFTWARE, INC. REPRESENTATIVE
By:
-------------------------------- -----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
ESCROW AGENT
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A.
-----------------------------------
(Duly Authorized Signature)
-----------------------------------
(Printed Name)
-----------------------------------
(Title)
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EXHIBIT A
STOCK POWER AND ASSIGNMENT CERTIFICATE
In connection with the merger (the "MERGER") of Soldier Acquisition
Corp., a wholly owned subsidiary of Broadbase Software, Inc. ("BROADBASE"), with
and into Servicesoft, Inc. ("SERVICESOFT"), the undersigned is receiving shares
of Broadbase common stock in respect of the shares of Servicesoft common stock
held by the undersigned immediately prior to the Merger.
FOR VALUE RECEIVED, and pursuant to that certain Agreement and Plan of
Merger dated as of September 18, 2000 (the "MERGER AGREEMENT") and that certain
Escrow Agreement dated as of September __, 2000 executed in connection with the
Merger (the "ESCROW AGREEMENT"), the undersigned hereby assigns and transfers
unto State Street Bank and Trust Company of California., N.A., as Escrow Agent
(the "AGENT") pursuant to the Merger Agreement and the Escrow Agreement:
_____________ shares of Broadbase common stock represented by stock
certificate No. ____ tendered herewith (the "SHARES")
The undersigned hereby irrevocably appoints the Agent, as
attorney-in-fact, with full power of substitution and re-substitution, to hold
any and all certificates for such Shares in escrow and to transfer such Shares
on the books of Broadbase solely to the extent provided in the Escrow Agreement.
THIS STOCK POWER AND ASSIGNMENT CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF THE ESCROW AGREEMENT AND THE MERGER AGREEMENT AND MAY ONLY BE USED
STRICTLY IN ACCORDANCE THEREWITH.
Dated: ________, 2000
-----------------------------------
(Signature)
-----------------------------------
(Printed Name)
Signature guarantee:
------------------------
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EXHIBIT B
ESCROW LEDGER
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4. PERCENTAGE 5. SHARES/ ASSETS 6. SHARES/ASSETS TO
1. STOCKHOLDER'S NAME, ADDRESS AND 2. NUMBER OF 3. OTHER ASSETS INTEREST IN TOTAL HELD FOR PENDING BE RELEASED ON THE
TAXPAYER I.D. NO. (WHEN KNOWN) ESCROW SHARES IN ESCROW ESCROW SHARES CONTESTED CLAIMS RELEASE DATE
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----------------------------------- ---------------- ----------------- ------------------ -------------------- ------------------
▇▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇ BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
SCHEDULE OF FEES FOR ESCROW SERVICES
BROADBASE, INC./SERVICESOFT, INC.
ACCEPTANCE FEE: $750.00
This one-time charge, payable at closing, includes acceptance and
assumption of responsibility and duties as Escrow Agent; review and
comment on the form of agreement; and establishment of account(s) in
accordance with governing document.
LEGAL COUNSEL: AT COST
ESCROW AGENT FEE: $3,500.00
Payable at funding and annually thereafter, if applicable. Compensates
State Street for administrative services in accordance with the Escrow
Agreement.
ADDITIONAL FEES, IF APPLICABLE:
PRO-RATA PERCENTAGE: Should the Escrow Agreement require pro-rata
distribution of principal cash or investment income to the
beneficiaries, STATE STREET WILL ASSESS an additional $100, for each
beneficiary pro-rata distribution, which may be offset at State Street's
discretion against each distribution.
DIRECTED SALE: State Street will charge $500.00, plus broker commission,
for each Directed Sale. The fee will be paid from the proceeds of such
sale.
CLAIMS (if applicable):
Uncontested $250.00
Contested BILLED AT COST
WIRE TRANSFER FEE (This fee will be deducted from wire amount, if applicable)
International $40.00
Domestic $20.00
INVESTMENT FEE: $65.00
Per security purchased (i.e. Treasuries, Agencies, etc.)
INVESTMENT IN STATE STREET INVESTMENT VEHICLES: 40 BASIS POINTS (.0040)
(Calculated on THE Average Daily Net Assets)
INVESTMENT VEHICLES:
SSgA Prime Money Market Fund
SSgA US Treasury Money Market Fund
SSgA Tax Free Money Market Fund
128
OUT-OF-POCKET EXPENSE: AT COST
The transaction underlying this proposal, and all related documentation, is
subject to review and acceptance by State Street in accordance with its policies
and procedures. Should the actual transaction materially differ from the
assumptions used herein, State Street reserves the right to modify this
proposal. In the event that the subject transaction fails to close for reasons
beyond the control of State Street, the party requesting these services agrees
to pay State Street's acceptance fees, legal fees and out-of-pocket expenses.
This proposal is a confidential document and should not be duplicated and/or
distributed.
Dated: ___________, 2000
Page Two of Two
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EXHIBIT F
OPINION TO BE PROVIDED BY COUNSEL TO BENTLEY
All capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the Agreement and Plan of Merger dated September 18, 2000 by
and among Bentley, Inc., Saturn, Inc. and Soldier Acquisition Corp.
1. Each of Bentley and Newco is a corporation validly existing and in
good standing under the laws of the State of Delaware, and Bentley is duly
qualified to do business and is in good standing under the laws of the State of
California. Each of Bentley and Newco has the corporate power and authority
under the Delaware General Corporation Law to own and operate its properties and
assets and to carry on its business as currently conducted.
2. Each of Bentley and Newco has the requisite corporate power and
corporate authority to execute, deliver and perform its obligations under the
Merger Agreement and the Certificate of Merger and to consummate the
transactions contemplated thereby.
3. The shares of Bentley's common stock to be issued in the Merger will,
when issued in accordance with the provisions of the Merger Agreement be duly
authorized, validly issued, fully paid and nonassessable.
4. The Merger Agreement and the Certificate of Merger have been duly and
validly executed by Bentley and Newco and delivered by Bentley and Newco, as
applicable, to Saturn, and each constitutes a valid and binding obligation of
Bentley and Newco, enforceable against Bentley and Newco in accordance with its
respective terms.
5. Neither the execution, delivery and performance of the Merger
Agreement and the Certificate of Merger by Bentley and Newco nor the
consummation by Bentley and Newco of the transactions contemplated thereby will
(a) conflict with or result in any breach of any provision of the Certificate of
Incorporation or Bylaws of Bentley or Newco, as currently in effect or, to our
knowledge, any judgment, order or decree of any court or arbitrator to which
Bentley or Newco is a party or is subject, or (b) to our knowledge, violate any
provision of any applicable U.S. federal or California state law, rule or
regulation, or any provision of the DGCL, except to the extent that such
conflict, breach or violation would not have a Material Adverse Effect on
Bentley.
6. To our knowledge, no filing with, or authorization or approval from,
any California state or U.S. federal governmental entity or any Delaware state
governmental entity pursuant to the DGCL, is necessary to enable Bentley and
Newco to enter into, and to perform their obligations under, the Merger
Agreement and the Certificate of Merger, except for (i) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware, (ii)
the filing with the SEC of the Form S-4 and the Prospectus/Proxy Statement and a
Current Report on Form 8-K with respect to the Merger, each in accordance with
the Securities Act and the Exchange Act, and the
130
effectiveness of the Form S-4, (iii) the filing with the Nasdaq Stock Market of
a Notification Form for Listing of Additional Shares with respect to the shares
of Bentley's common stock to be issued in the Merger, (iv) such other consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal, foreign and state securities (or
related) laws and the HSR Act, and (v) such other consents, authorizations,
filings, approvals and registrations which if not obtained or made would not be
material to Bentley or the Surviving Corporation or prevent, alter or materially
delay the consummation of the Merger or any of the other transactions
contemplated by the Merger Agreement.
7. To our knowledge, there is no action, proceeding or investigation
pending or overtly threatened against Bentley or Newco before any court or
administrative agency that questions the validity of the Merger Agreement or
that could be reasonably expected to result, either individually or in the
aggregate, in any material adverse change in the assets, financial condition or
results of operations of Bentley.
131
EXHIBIT G
OPINION TO BE PROVIDED BY COUNSEL TO SATURN
All capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Agreement and Plan of Merger dated September
18, 2000 by and among Broadbase Software, Inc., Servicesoft, Inc. and Soldier
Acquisition Corp.
1. Saturn is a corporation validly existing and in good standing under
the laws of the State of Delaware, is duly qualified to do business and is in
good standing under the laws of the Commonwealth of Massachusetts, and has the
corporate power and authority under the Delaware General Corporation Law to own
and operate its properties and assets and to carry on its business as currently
conducted. Each Subsidiary that is incorporated in Delaware or Massachusetts is
a corporation validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power and authority
under the Delaware General Corporation Law or Massachusetts Corporations
Statute, as applicable, to own and operate its properties and assets and to
carry on its business as currently conducted.
2. Saturn has the requisite corporate power and corporate authority to
execute, deliver and perform its obligations under the Merger Agreement and the
Certificate of Merger and to consummate the transactions contemplated thereby.
3. The authorized capital stock of Saturn consists solely of 30,000,000
shares of Saturn Common Stock and 16,450,002 shares of Saturn Preferred Stock,
8,000,000 of which are designated as Series H Convertible Preferred Stock,
4,450,000 are designated as Series I Convertible Preferred Stock, 4,000,000 are
designated as Series J Convertible Preferred Stock, 1 is designated as Series X
Special Preferred Stock and 1 is designated as Series Y Special Preferred Stock.
To our knowledge, as of the date hereof, there are issued and outstanding
_______________ shares of Saturn Common Stock, _________ shares of Saturn's
Series __ Preferred Stock, _________ shares of Saturn's Series __ Preferred
Stock, _________ shares of Saturn's Series __ Preferred Stock, _________ shares
of Saturn's Series __ Preferred Stock, and _________ shares of Saturn's Series
__ Preferred Stock. All of the issued and outstanding shares of Saturn's capital
stock have been duly authorized and are validly issued, fully paid and
nonassessable. To our knowledge, except as set forth in Item 4.3(b) of the
Saturn Disclosure Letter, no warrant, option, or other right to purchase from
Saturn any shares of its capital stock is authorized or outstanding.
4. The Merger Agreement and the Certificate of Merger have been duly and
validly executed by Saturn and delivered by Saturn to Bentley and Newco, and
each constitutes a valid and binding obligation of Saturn, enforceable in
accordance with its respective terms.
5. Neither the execution, delivery and performance of the Merger
Agreement and the Certificate of Merger by Saturn, nor the consummation by
Saturn of the transactions contemplated thereby will (a) conflict with or result
in any breach of any provision of the Certificate of Incorporation or Bylaws of
Saturn, as currently in effect or, to our knowledge, any judgment, order or
decree of any court or arbitrator to which Saturn or any Subsidiary is a party
or is subject, or (b) to our knowledge, violate any provision of any applicable
U.S. federal or Massachusetts state law, rule or regulation, or any provision of
the DGCL, except to the extent that such conflict, breach or violation would not
have a Material Adverse Effect on Saturn.
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6. To our knowledge, no filing with, or authorization or approval from,
any Massachusetts state or U.S. federal governmental entity or any Delaware
state governmental entity pursuant to the DGCL, is necessary to enable Saturn to
enter into, and to perform its obligations under, the Merger Agreement and the
Certificate of Merger, except for (i) the filing of the Certificate of Merger
with the Delaware Secretary of State, (ii) the filing of the Form S-4 and
Prospectus/Proxy Statement with the SEC, each in accordance with the Securities
Act and the Exchange Act, and the effectiveness of the Form S-4, (iii) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable federal, foreign and state
securities (or related) laws and the HSR Act, and (iv) such other consents,
authorizations, filings, approvals and registrations which if not obtained or
made would not be material to Saturn, Bentley or the Surviving Corporation or
prevent, alter or materially delay the consummation of the Merger or any of the
other transactions contemplated by the Merger Agreement.
7. To our knowledge, there is no action, proceeding or investigation
pending or overtly threatened against Saturn before any court or administrative
agency that questions the validity of the Merger Agreement or that could be
reasonably expected to result, either individually or in the aggregate, in any
material adverse change in the assets, financial condition or results of
operations of Saturn.
133
OPINION TO BE PROVIDED BY CANADIAN ADVISOR TO SATURN
All capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the Agreement and Plan of Merger dated September ___, 2000
by and among Bentley, Inc., Saturn, Inc. and Soldier Acquisition Corp.]
1. Saturn Canada is a corporation incorporated and validly existing
under the Business Corporations Act (Ontario). There are no restrictions on the
corporate power and capacity of Saturn Canada to own and lease property and
assets and to carry on its business.
2. Any amendments to the Saturn Canada Constituent Documents (the
"SATURN CANADA AMENDMENTS") entered into pursuant to Section 10.9 of the Merger
Agreement have been duly executed and delivered by Saturn Canada, and each is
enforceable in accordance with its respective terms. Saturn Canada has all
necessary corporate power, capacity and authority to enter into the Saturn
Canada Amendments and to carry out its obligations thereunder. The execution and
delivery of the Saturn Canada Amendments has been duly authorized by all
necessary corporate action on the part of Saturn Canada.
3. Saturn Canada is not a party to, bound or affected by or subject to
any provision of its articles or by-laws, statutory law or regulation, which is
violated, contravened or breached by the execution and delivery by Saturn Canada
of the Saturn Canada Amendments, or the performance by Saturn Canada of any of
the terms thereof.
4. There are no governmental or regulatory authorizations, approvals,
orders, consents or filings required in Ontario or under the federal laws of
Canada on the part of Saturn Canada in connection with the execution, delivery
and performance of the Saturn Canada Amendments by Saturn Canada.
5. The authorized capital stock of Saturn Canada consists solely of ____
shares of Common Stock, _______ shares of Exchangeable Common Stock and _______
shares of Exchangeable Preferred Stock, ________. To our knowledge, as of the
date hereof, there are issued and outstanding _______________ shares of Saturn
Canada Common Stock, _________ shares of Saturn Canada Exchangeable Common Stock
and _________ shares of Saturn Canada Exchangeable Preferred Stock. All of the
issued and outstanding shares of Saturn Canada's capital stock have been duly
authorized and are validly issued, fully paid and nonassessable. To our
knowledge, no warrant, option, or other right to purchase from Saturn Canada any
shares of its capital stock is authorized or outstanding.
[Note - paragraphs 2-5 are only to be included if any amendments are
made to the Saturn Canada Constituent pursuant to Section 10.9 of the Merger
Agreement]