AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PHONE.COM, INC.,
SILVER MERGER SUB INC.
AND
SOFTWARE.COM, INC.
DATED AS OF AUGUST 8, 2000
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TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER.......................................................................1
ARTICLE 1. THE MERGER..............................................................................2
SECTION 1.1 The Merger........................................................................2
SECTION 1.2 Closing...........................................................................2
SECTION 1.3 Effective Time....................................................................2
SECTION 1.4 Effects of the Merger.............................................................3
SECTION 1.5 Certificates of Incorporation and By-laws of the Surviving Corporation............3
SECTION 1.6 Directors and Officers............................................................3
ARTICLE 2. EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF SOFTWARE.COM; EXCHANGE OF
CERTIFICATES......................................................................3
SECTION 2.1 Effect on Software.com Capital Stock..............................................3
SECTION 2.2 Exchange of Shares and Certificates...............................................6
SECTION 2.3 Certain Adjustments...............................................................8
ARTICLE 3. REPRESENTATIONS AND WARRANTIES..........................................................8
SECTION 3.1 Representations and Warranties of Phone and Merger Sub............................8
SECTION 3.2 Representations and Warranties of Software.com...................................22
ARTICLE 4. COVENANTS RELATING TO CONDUCT OF BUSINESS SECTION......................................35
SECTION 4.1 Conduct of Business..............................................................35
SECTION 4.2 No Solicitation by Phone.........................................................40
SECTION 4.3 No Solicitation by Software.com..................................................42
ARTICLE 5. ADDITIONAL AGREEMENTS..................................................................44
SECTION 5.1 Preparation of the Form S-4 and the Joint Proxy Statement; Stockholders'
Meetings....................................................................44
SECTION 5.2 Pooling Letters..................................................................45
SECTION 5.3 Access to Information; Confidentiality...........................................45
SECTION 5.4 Commercially Reasonable Efforts..................................................46
SECTION 5.5 Indemnification, Exculpation and Insurance.......................................46
SECTION 5.6 Fees and Expenses................................................................48
SECTION 5.7 Public Announcements.............................................................48
SECTION 5.8 Affiliates.......................................................................48
SECTION 5.9 Nasdaq Listing...................................................................49
SECTION 5.10 Tax and Accounting Treatment....................................................49
SECTION 5.11 Post-Merger Operations..........................................................49
SECTION 5.12 Conveyance Taxes................................................................49
SECTION 5.13 Employee Benefits...............................................................49
SECTION 5.14 Consents of Accountants.........................................................50
SECTION 5.15 Phone Board and Officers........................................................50
SECTION 5.16 Rights Plans....................................................................50
SECTION 5.17 Action by Board of Directors....................................................50
ARTICLE 6. CONDITIONS PRECEDENT...................................................................51
SECTION 6.1 Conditions to Each Party's Obligation to Effect The Merger.......................51
SECTION 6.2 Conditions to Obligations of Software.com........................................52
SECTION 6.3 Conditions to Obligations of Phone and Merger Sub................................53
ARTICLE 7. TERMINATION, AMENDMENT AND WAIVER......................................................54
SECTION 7.1 Termination......................................................................54
SECTION 7.2 Effect of Termination............................................................55
SECTION 7.3 Amendment........................................................................57
SECTION 7.4 Extension; Waiver................................................................58
ARTICLE 8. GENERAL PROVISIONS.....................................................................58
SECTION 8.1 Nonsurvival of Representations and Warranties....................................58
SECTION 8.2 Notices..........................................................................58
SECTION 8.3 Definitions......................................................................59
SECTION 8.4 Interpretation...................................................................60
SECTION 8.5 Counterparts.....................................................................60
SECTION 8.6 Entire Agreement; No Third-Party Beneficiaries...................................60
SECTION 8.7 Governing Law....................................................................61
SECTION 8.8 Assignment.......................................................................61
SECTION 8.9 Consent to Jurisdiction..........................................................61
SECTION 8.10 Headings, etc...................................................................61
SECTION 8.11 Severability....................................................................61
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EXHIBITS
EXHIBIT A--Form of Phone Stock Option Agreement
EXHIBIT B--Form of Software.com Stock Option Agreement
EXHIBIT C--Form of Software.com Voting Agreement
EXHIBIT D--Form of Phone Voting Agreement
EXHIBIT E--Form of Software.com Affiliate Letter
EXHIBIT F--Form of Phone Affiliate Letter
EXHIBIT G--Form of Strategic Alliance MOU
EXHIBIT H--Form of Software.com Special Affiliate Letter
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 8, 2000,
by and among PHONE.COM, INC., a Delaware corporation ("Phone"), SILVER
MERGER SUB INC., a Delaware corporation and a wholly owned subsidiary of
Phone ("Merger Sub") and SOFTWARE.COM, INC., a Delaware corporation
("Software.com").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Phone and
Software.com deem it advisable and in the best interests of each
corporation and its respective stockholders that Phone and Software.com
engage in a business combination in a merger of equals in order to advance
the long-term strategic business interests of Phone and Software.com; and
WHEREAS, in furtherance thereof, the Boards of Directors
of each of Phone, Merger Sub and Software.com have approved this Agreement
and the merger of Merger Sub with and into Software.com with Software.com
continuing as the surviving corporation (the "Merger") and have deemed the
Merger advisable, upon the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, the Boards of Directors of each of Phone, Merger
Sub and Software.com, having determined that the Merger and the other
transactions contemplated hereby are advisable and in the best interests of
its stockholders, have approved the transactions contemplated by this
Agreement, the Option Agreements, the Voting Agreements and the Strategic
Alliance MOU (as such terms are hereinafter defined) in accordance with the
provisions of the Delaware General Corporation Law (the "DGCL"); and
WHEREAS, the Board of Directors of Software.com has
resolved to recommend to Software.com's stockholders the approval and
adoption of this Agreement, and the consummation of the transactions
contemplated hereby upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the Board of Directors of Phone has resolved to
recommend to Phone's stockholders the approval of the issuance of shares of
Phone Common Stock (as hereinafter defined) pursuant to the Merger and the
amendment to Phone's Certificate of Incorporation to change the name of
Phone as of the Effective Time to a name to be mutually agreed upon in good
faith by Phone and Software.com following the date hereof (the "Phone
Charter Amendment"); and
WHEREAS, as a condition and inducement to the execution
of this Agreement, contemporaneously herewith Software.com and Phone will
enter into a stock option agreement (the "Phone Option Agreement") attached
hereto as Exhibit A and a stock option agreement (the "Software.com Option
Agreement" and, together with the Phone Option Agreement, the "Option
Agreements") attached hereto as Exhibit B; and
WHEREAS, as a condition and inducement to the execution
of this Agreement, contemporaneously herewith certain stockholders of Phone
will enter into a voting agreement (the "Phone Voting Agreement") attached
hereto as Exhibit C and certain stockholders of Software.com will enter
into a voting agreement (the "Software.com Voting Agreement" and together
with the Phone Voting Agreement, the "Voting Agreements") attached hereto
as Exhibit D; and
WHEREAS, as a condition and inducement to the execution
of this Agreement, contemporaneously herewith Software.com and Phone will
enter into the Reciprocal Reseller License and Services Memorandum of
Understanding (the "Strategic Alliance MOU") attached hereto as Exhibit G;
and
WHEREAS, for United States federal income tax purposes,
it is intended that the Merger shall qualify as a reorganization within the
meaning of section 368(a) of the Internal Revenue Code of 1986, as amended,
(the "Code"), and the rules and regulations promulgated thereunder and this
Agreement is intended to be and is adopted as a plan of reorganization
within the meaning of section 368(a) of the Code.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements set forth herein, in the Option
Agreements, the Voting Agreements and the Strategic Alliance MOU the
parties agree as follows:
ARTICLE 1.
THE MERGER
SECTION 1.1 The Merger.
Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the DGCL, Merger Sub shall be merged
with and into Software.com at the Effective Time (as defined in Section 1.3
hereof). Following the Effective Time, the separate corporate existence of
Merger Sub shall cease and Software.com shall continue as the surviving
corporation (the "Surviving Corporation") in the Merger and shall succeed
to and assume all the rights, privileges, immunities, properties, powers
and franchises of Merger Sub in accordance with the DGCL.
SECTION 1.2 Closing.
The closing of the Merger (the "Closing") shall take
place at 10:00 a.m., California time, on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction or waiver of all of the conditions set forth in Article 6 (the
"Closing Date"), at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 525 University Avenue, Suite 220, Palo Alto, California 94301, unless
another time, date or place is agreed to in writing by the parties hereto.
SECTION 1.3 Effective Time.
Subject to the provisions of this Agreement, as soon as
practicable on the Closing Date, the parties shall cause the Merger to be
consummated by filing with the Secretary of State of the State of Delaware
(the "Secretary of State") a certificate of merger (the "Certificate of
Merger") executed in accordance with the relevant provisions of the DGCL
and shall make all other filings or recordings required under the DGCL. The
Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Secretary of State, or at such subsequent date or time
as Phone and Software.com shall agree and specify in the Certificate of
Merger (the time Merger becomes effective being hereinafter referred to as
the "Effective Time").
SECTION 1.4 Effects of the Merger.
The Merger shall have the effects set forth in Section
259 of the DGCL.
SECTION 1.5 Certificates of Incorporation and By-laws of the
Surviving Corporation.
At the Effective Time, subject to the requirements of
Section 5.5, the Certificate of Incorporation and the by-laws of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation and by-laws of the Surviving Corporation, in
each case until thereafter amended in accordance with applicable law.
SECTION 1.6 Directors and Officers.
The directors and officers of Merger Sub at the Effective
Time shall, from and after the Effective Time, be the directors and
officers, respectively, of the Surviving Corporation until their successors
shall have been duly elected or appointed or qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and by-laws.
ARTICLE 2.
EFFECTS OF THE MERGER ON THE CAPITAL STOCK OF
SOFTWARE.COM; EXCHANGE OF CERTIFICATES
SECTION 2.1 Effect on Software.com Capital Stock.
As of the Effective Time of the Merger, by virtue of the
Merger and without any action on the part of the holders of any shares of
common stock, par value $0.001 per share, of Software.com ("Software.com
Common Stock") or any shares of common stock of Merger Sub:
(a) Conversion of Software.com Common Stock.
Each issued and outstanding share of Software.com Common
Stock (other than any shares of Software.com Common Stock to be canceled
pursuant to Section 2.1(c) hereof) shall be converted into the right to
receive 1.6105 (the "Exchange Ratio") fully paid and nonassessable shares
of common stock, par value $0.001 per share, of Phone ("Phone Common
Stock"). As of the Effective Time, all such shares of Software.com Common
Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist. As of the Effective Time, each
certificate theretofore representing shares of Software.com Common Stock,
without any action on the part of Phone, Software.com or the holder
thereof, shall be deemed to represent that number of shares of Phone Common
Stock determined by multiplying the shares of Software.com Common Stock
represented thereby by the Exchange Ratio. Each holder of a certificate
representing any shares of Software.com Common Stock shall cease to have
any rights with respect thereto, except the right to receive, upon the
surrender of any such certificates, certificates representing the shares of
Phone Common Stock to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.2 hereof without
interest.
(b) Capital Stock of Merger Sub.
Each issued and outstanding share of common stock, par
value $0.01 per share, of Merger Sub shall be converted into one fully paid
and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(c) Cancellation of Treasury Shares. Each share of
Software.com Common Stock held in the treasury of Software.com, or owned by
Phone or any direct or indirect subsidiary of Software.com or Phone
immediately prior to the Effective Time shall automatically be canceled and
retired and shall cease to exist, and no consideration shall be delivered
in exchange thereof.
(d) Assumption and Conversion of Software.com Options.
(i) As of the Effective Time, each outstanding option
or warrant to purchase Software.com Common Stock (a "Software.com Option")
issued under each Software.com Stock Plan (as defined in Section 3.2(c))
shall thereafter entitle the holder thereof to receive, upon the exercise
thereof, that number of shares of Phone Common Stock equal to the product
of (w) the number of shares of Software.com Common Stock subject to such
Software.com Option immediately prior to the Effective Time and (x) the
Exchange Ratio, at an exercise price for each full share of Phone Common
Stock subject to such Software.com Option equal to (y) the exercise price
per share of Software.com Common Stock subject to such Software.com Option
divided by (z) the Exchange Ratio, which exercise price per share shall be
rounded up to the nearest two-place decimal. The number of shares of Phone
Common Stock that may be purchased by a holder upon the exercise of any
Software.com Option shall not include any fractional share of Phone Common
Stock but shall be rounded, in the case of any Software.com Option other
than an "incentive stock option" (within the meaning of section 422 of the
Code), up and, in the case of any incentive stock option, down to the
nearest whole share, if necessary.
(ii) As of the Effective Time, Phone shall assume in
full each Software.com Option and all of the other rights and obligations
of Software.com under the Software.com Stock Plans (as defined in Section
3.2(c)) as provided herein. Section 2.1(d)(ii) of the Software.com
Disclosure Schedule sets forth a list summarizing all Software.com Options
under all of the Software.com Stock Plans, including the term and the
exercise price of each Software.com Option. The assumption of a
Software.com Option by Phone shall not terminate or modify (except as
required hereunder) any right of first refusal, right of repurchase,
vesting schedule or other restriction on transferability relating to a
Software.com Option or the stock issuable upon the exercise thereof.
Continuous employment with Software.com shall be credited to an optionee
for purposes of determining the number of shares subject to exercise,
vesting or repurchase after the Effective Time, and the provisions in the
Software.com Stock Plans and/or in any stock option agreement evidencing
the terms and conditions of any Software.com Option relating to the
exercisability of any Software.com Option upon termination of an optionee's
employment or service as a director shall not be deemed triggered until
such time as such optionee shall be neither an employee or officer nor
serving as a director of Phone or any subsidiary. After such assumption,
Phone shall issue, upon any partial or total exercise of any Software.com
Option, in lieu of shares of Software.com Common Stock, the number of
shares of Phone Common Stock to which the holder of the Software.com Option
is entitled pursuant to this Agreement. The assumption by Phone of
Software.com Options shall not give holders of such Software.com Options
any additional benefits which they did not have immediately prior to the
Effective Time. Phone shall file with the Securities and Exchange
Commission (the "SEC") as soon as practicable, and in any event within two
(2) business days, following the Effective Time a registration statement on
Form S-8 under the Securities Act of 1933, as amended (the "Securities
Act"), covering, to the extent applicable, the shares of Phone Common Stock
to be issued upon the exercise of Software.com Options assumed by Phone.
Phone shall use commercially reasonable efforts to qualify as soon as
practicable, and in any event within two (2) business days, after the
Effective Time under the applicable state securities laws the issuance of
the shares of Phone Common Stock to be issued upon exercise of such
Software.com Options. Prior to the Effective Time, Software.com shall make
such amendments, if any, to the Software.com Stock Plans as shall be
necessary to permit such assumption in accordance with this Section 2.1(d).
(iii) It is the intention of the parties that, to the
extent that any Software.com Option constitutes an incentive stock option
immediately prior to the Effective Time of the Merger, such Software.com
Option shall continue to qualify as an incentive stock option to the
maximum extent permitted by section 422 of the Code, and that the
assumption of Software.com Options provided by this Section 2.1(d) shall
satisfy the conditions of section 424(a) of the Code.
(e) At the Effective Time, Phone shall assume the
outstanding offering periods under the Software.com Employee Stock Purchase
Plan (the "Software.com ESPP"), and all outstanding rights to purchase
shares of Software.com Common Stock under the Software.com ESPP ("Purchase
Rights") shall be converted (in accordance with the Exchange Ratio) into
rights to purchase shares of Phone Common Stock (with the number of shares
rounded down to the nearest whole share and the purchase price as of the
offering date for each offering period in effect as of the Effective Time
rounded up to the nearest whole cent). All such converted Purchase Rights
shall be assumed by Phone, and each offering period in effect under the
Software.com ESPP immediately prior to the Effective Time shall be
continued in accordance with the terms of the Software.com ESPP until the
end of such offering period. The Software.com ESPP shall terminate or be
merged into the stock purchase plan sponsored by Phone (the "Phone ESPP")
immediately following the exercise of the last assumed Purchase Right, and
no additional Purchase Rights shall be granted under the Software.com ESPP
following the Effective Time, provided that references to Software.com in
the Software.com ESPP and related documents shall mean Phone (except that
the purchase price as of the offering date for a relevant period shall be
determined with respect to the fair market value of Software.com Common
Stock on such date, as adjusted hereby). Phone shall take all corporate
action necessary to reserve for issuance a sufficient number of shares of
Phone Common Stock for issuance upon exercise of Purchase Rights under the
Software.com ESPP assumed in accordance with this Section 2.1(e). Phone
agrees that, from and after the Effective Time, Software.com employees may
participate in the Phone ESPP, subject to the terms and conditions of the
Phone ESPP; provided, however, that Phone shall amend the Phone ESPP to
provide for a special offering period that permits Software.com employees
the ability to immediately participate in the Phone ESPP after the
Effective Time, and that service with Software.com shall be treated as
service with Phone for determining eligibility of Software.com's employees
under the Phone ESPP.
SECTION 2.2 Exchange of Shares and Certificates.
(a) Exchange Agent. As of the Effective Time of the
Merger, Phone shall deposit with U.S. Stock Transfer Corporation or such
other bank, trust company or nationally recognized shareholder services
provider as may be designated by Phone (the "Exchange Agent"), for the
benefit of the holders of shares of Software.com Common Stock, for exchange
in accordance with this Article 2, through the Exchange Agent, certificates
representing the shares of Phone Common Stock (such shares of Phone Common
Stock, together with any dividends or distributions with respect thereto
with a record date after the Effective Time, and any cash payable in lieu
of any fractional shares of Phone Common Stock, being hereinafter referred
to as the "Exchange Fund") issuable pursuant to Section 2.1 hereof in
exchange for outstanding shares of Software.com Common Stock.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall mail to each
holder of record of a certificate or certificates which immediately prior
to the Effective Time represented outstanding shares of Software.com Common
Stock (the "Certificates") whose shares were converted into shares of Phone
Common Stock pursuant to Section 2.1 hereof, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Phone may reasonably specify), and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing shares of Phone Common Stock. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent
or agents as may be appointed by Phone, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificate shall be
entitled to receive in exchange therefor a certificate representing that
number of whole shares of Phone Common Stock which such holder has the
right to receive pursuant to the provisions of this Article 2, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Software.com Common Stock which is not registered
in the transfer records of Software.com, a certificate representing the
proper number of shares of Phone Common Stock may be issued to a person
other than the person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be
in proper form for transfer and the person requesting such issuance shall
pay any transfer or other taxes required by reason of the issuance of
shares of Phone Common Stock to a person other than the registered holder
of such Certificate or establish to the satisfaction of Phone that such tax
has been paid or is not applicable. No interest shall be paid or shall
accrue on any cash payable in lieu of any fractional shares of Phone Common
Stock.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Phone Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Phone Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall
be paid to any such holder pursuant to Section 2.2(e) hereof, until the
surrender of such Certificate in accordance with this Article 2. Subject to
the effect of applicable laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificate representing whole
shares of Phone Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of any cash payable in lieu
of a fractional share of Phone Common Stock to which such holder is
entitled pursuant to Section 2.2(e) and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of Phone Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to such surrender and
a payment date subsequent to such surrender payable with respect to such
whole shares of Phone Common Stock.
(d) No Further Ownership Rights in Software.com Common
Stock. All shares of Phone Common Stock issued upon the surrender for
exchange of Certificates in accordance with the terms of this Article 2
(including any cash paid pursuant to Section 2.2(c) or 2.2(e) hereof) shall
be deemed to have been issued (and paid) in full satisfaction of all rights
pertaining to the shares of Software.com Common Stock theretofore
represented by such Certificates, subject, however, to the obligation of
the Surviving Corporation, as applicable, to pay any dividends or make any
other distributions with a record date prior to the Effective Time which
may have been declared or made by Software.com on such shares of
Software.com Common Stock in accordance with the terms of this Agreement
and which remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Software.com Common Stock which were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or
the Exchange Agent for any reason, they shall be canceled and exchanged as
provided in this Article 2, except as otherwise provided by law.
(e) Fractional Shares.
(i) No certificates representing fractional shares of
Phone Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests shall not entitle the
owner thereof to vote or to any other rights of a stockholder of Phone.
(ii) Notwithstanding any other provision of this
Agreement, each holder of shares of Software.com Common Stock converted
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Phone Common Stock (after taking into account all
Certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to (i) such fraction multiplied by
(ii) the average of the closing price of a share of Software.com Common
Stock for the ten (10) most recent trading days that Software.com Common
Stock has traded ending on the trading day immediately prior to the
Effective Time, as reported on the Nasdaq National Market.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of the
Certificates for six (6) months after the Effective Time shall be delivered
to Phone, upon demand, and any holders of the Certificates who have not
theretofore complied with this Article 2 shall thereafter look only to
Phone for payment of their claim for Phone Common Stock, any cash in lieu
of fractional shares of Phone Common Stock and any dividends or
distributions with respect to Phone Common Stock.
(g) No Liability. None of Phone, Merger Sub, Software.com
or the Exchange Agent shall be liable to any person in respect of any
shares of Phone Common Stock (or dividends or distributions with respect
thereto) or cash from the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If
any Certificates shall not have been surrendered prior to seven (7) years
after the Effective Time, or immediately prior to such earlier date on
which any shares of Phone Common Stock, any cash in lieu of fractional
shares of Phone Common Stock or any dividends or distributions with respect
to Phone Common Stock in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Entity, any such
shares, cash, dividends or distributions in respect of such Certificate
shall, to the extent permitted by applicable law, become the property of
the Surviving Corporation, free and clear of all claims or interest of any
person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by Phone, on a
daily basis. Any interest and other income resulting from such investments
shall be paid to Phone.
SECTION 2.3 Certain Adjustments.
If between the date hereof and the Effective Time, the
outstanding shares of Software.com Common Stock or Phone Common Stock shall
be changed into a different number of shares by reason of any
reclassification, recapitalization, split-up, combination or exchange of
shares, or any dividend payable in stock or other securities shall be
declared thereon with a record date within such period, the Exchange Ratio
shall be adjusted accordingly to provide to the holders of Software.com
Common Stock the same economic effect as contemplated by this Agreement
prior to such reclassification, recapitalization, split-up, combination,
exchange or dividend.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Phone and Merger Sub.
Phone and Merger Sub represent and warrant to
Software.com, subject to such exceptions as are disclosed in writing in the
disclosure letter supplied by Phone to Software.com dated as of the date
hereof (the "Phone Disclosure Schedule"), which disclosure shall provide an
exception to or otherwise qualify the representations, warranties or
covenants of Phone and Merger Sub contained in the section of this
Agreement corresponding by number to such disclosure or covenant and the
other representations, warranties and covenants herein to the extent such
disclosure shall reasonably appear to be applicable to such other
representations, warranties or covenants as follows:
(a) Organization, Standing and Corporate Power.
(i) Each of Phone and its subsidiaries (as defined in
Section 8.3) is a corporation or other legal entity duly organized, validly
existing and in good standing (with respect to jurisdictions which
recognize such concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power, as the case may
be, and authority to carry on its business as now being conducted, except,
as to subsidiaries, for those jurisdictions where the failure to be so
organized, existing or in good standing individually or in the aggregate
would not have a material adverse effect (as defined in Section 8.3) on
Phone. Each of Phone and its subsidiaries is duly qualified or licensed to
do business and is in good standing (with respect to jurisdictions which
recognize such concept) in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its properties makes
such qualification or licensing necessary, except for those jurisdictions
where the failure to be so qualified or licensed or to be in good standing
individually or in the aggregate would not have a material adverse effect
on Phone.
(ii) Phone and Merger Sub have delivered to or made
available to Software.com prior to the execution of this Agreement complete
and correct copies of any amendments to the certificate of incorporation of
Phone (the "Phone Certificate"), the certificate of incorporation of Merger
Sub and the by-laws of Phone and Merger Sub not filed as of the date hereof
with the Phone Filed SEC Documents (as defined in Section 3.1(g)).
(b) Subsidiaries. Exhibit 21 to Phone's Annual Report on
Form 10-K for the fiscal year ended June 30, 1999, includes all the
subsidiaries of Phone which as of the date of this Agreement are
Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the
SEC). All the outstanding shares of capital stock of, or other equity
interests in, each such Significant Subsidiary have been validly issued and
are fully paid and nonassessable and are owned directly or indirectly by
Phone, free and clear of all pledges, claims, liens, charges, encumbrances
and security interests of any kind or nature whatsoever (collectively,
"Liens") and free of any other restriction (including any restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests).
(c) Capital Structure.
The authorized capital stock of Phone consists of
250,000,000 shares of Phone Common Stock and 5,000,000 shares of preferred
stock, par value $0.001 per share ("Phone Preferred Stock"). At the close
of business on July 31, 2000, (i) 82,997,462 shares of Phone Common Stock
were issued and outstanding; (ii) 908,334 shares were issued and held by
Phone in its treasury; (iii) no shares of Phone Preferred Stock were issued
and outstanding; (iv) 27,700,417 shares of Phone Common Stock were reserved
for issuance pursuant to all stock option, restricted stock or other
stock-based compensation, benefits or savings plans, agreements or
arrangements in which current or former employees or directors of Phone or
its subsidiaries participate as of the date hereof, complete and correct
copies of which, in each case as amended as of the date hereof, have been
filed as exhibits to the Phone Filed SEC Documents (as defined below) or
delivered to Software.com (such plans, collectively, the "Phone Stock
Plans"); (v) 18,105 shares of Phone Common Stock were reserved for issuance
upon the exercise of outstanding warrants; and (vi) 250,000 shares of Phone
Preferred Stock will be designated as Series A Junior Participating
Preferred Stock, all of which will be reserved for issuance upon exercise
of preferred stock purchase rights (the "Phone Rights") issuable pursuant
to the Rights Agreement approved by the board of directors of Phone in
connection with its approval of this Agreement and to be entered into no
later than ten (10) days following the date hereof substantially in the
form previously provided to Software.com (the "Phone Rights Agreement").
The authorized capital stock of Merger Sub consists of 100 shares of common
stock, par value $0.01 per share of which 100 shares are issued and
outstanding. Phone is the sole stockholder of Merger Sub and is the legal
and beneficial owner of all 100 issued and outstanding shares. Merger Sub
was formed by Phone on July 31, 2000, solely for the purpose of effecting
the Merger and the other transactions contemplated by this Agreement.
Except as contemplated by this Agreement, Merger Sub does not hold nor has
it held any material assets or incurred any material liabilities nor has
Merger Sub carried on any business activities other than in connection with
the Merger and the other transactions contemplated by this Agreement. All
outstanding shares of capital stock of Phone and Merger Sub are, and all
shares of capital stock of Phone which may be issued pursuant to the Phone
Stock Plans will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. Except as set
forth in this Section 3.1(c) and except for changes since June 30, 2000,
resulting from the issuance of shares of Phone Common Stock pursuant to the
Phone Options or as expressly permitted by this Agreement, (x) there are
not issued, reserved for issuance or outstanding (A) any shares of capital
stock or other voting securities of Phone, (B) any securities of Phone or
any Phone subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of Phone, (C) any warrants,
calls, options or other rights to acquire from Phone or any Phone
subsidiary (including any subsidiary trust), or obligations of Phone or any
Phone subsidiary to issue, any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital
stock or voting securities of Phone, and (y) there are no outstanding
obligations of Phone or any Phone subsidiary to repurchase, redeem or
otherwise acquire any such securities or to issue, deliver or sell, or
cause to be issued, delivered or sold, any such securities. Neither Phone
nor any Phone subsidiary is a party to any agreement restricting the
purchase or transfer of, relating to the voting of, requiring registration
of, or granting any preemptive or, except as provided by the terms of the
Phone Options, antidilutive rights with respect to, any securities of the
type referred to in the two preceding sentences. Other than the Phone
subsidiaries, Phone does not directly or indirectly beneficially own any
securities or other beneficial ownership interests in any other entity
except for non-controlling investments made in the ordinary course of
business in entities which are not individually or in the aggregate
material to Phone and its subsidiaries as a whole.
(d) Authority; Non-contravention.
Each of Phone and Merger Sub has all requisite corporate
power and authority to enter into this Agreement, and Phone has all
requisite corporate power and authority to enter into the Option Agreements
and, subject to the Phone Stockholder Approval (as defined in Section
3.1(l)), to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement by Phone and Merger Sub, the
execution and delivery of the Option Agreements by Phone and the
consummation by Phone and Merger Sub of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate
action on the part of Phone and Merger Sub, subject, in the case of the
Merger to the Phone Stockholder Approval. This Agreement and the Option
Agreements have been duly executed and delivered by Phone and Merger Sub
and, assuming the due authorization, execution and delivery of each
agreement to which they are parties by Software.com constitutes (or will
constitute, as the case may be) the legal, valid and binding obligation of
Phone and Merger Sub, enforceable against Phone and Merger Sub in
accordance with their terms. The execution and delivery of this Agreement
does not, and the execution and delivery of the Option Agreements and the
consummation of the transactions contemplated hereby and thereby and
compliance with the provisions of this Agreement and the Option Agreements
will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a
benefit under, or result in the creation of any Lien upon any of the
properties or assets of Phone or any of its subsidiaries or in any
restriction on the conduct of Phone's business or operations under, (i) the
Phone Certificate or the by-laws of Phone or the comparable organizational
documents of any of its subsidiaries, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, trust document, lease or other agreement,
instrument, permit, concession, franchise, license or similar authorization
applicable to Phone or any of its subsidiaries or their respective
properties or assets or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Phone or any of
its subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights, losses, restrictions or Liens that individually or in the
aggregate would not (x) have a material adverse effect on Phone or
Software.com or (y) reasonably be expected to impair the ability of each of
Phone and Merger Sub to perform its obligations under this Agreement or the
Option Agreements. No consent, approval, order or authorization of, action
by or in respect of, or registration, declaration or filing with, any
federal, state, local or foreign government, any court, administrative,
regulatory or other governmental agency, commission or authority or any
non-governmental self-regulatory agency, commission or authority (a
"Governmental Entity") is required by or with respect to Phone or any of
its subsidiaries in connection with the execution and delivery of this
Agreement by Phone and Merger Sub, or the execution and delivery by Phone
of the Option Agreements or the consummation by Phone and Merger Sub of the
transactions contemplated hereby and thereby, except for (1) the filing of
a pre-merger notification and report form by Phone and Merger Sub under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act") or filings or notifications under the antitrust, competition or
similar laws of any foreign jurisdiction; (2) the filing with the SEC of
(A) a proxy statement relating to the Phone Stockholders' Meeting (as
defined in Section 5.1(b)) (such proxy statement, together with the proxy
statement relating to the Software.com Stockholders' Meeting (as defined in
Section 5.1(c)), in each case as amended or supplemented from time to time,
the "Joint Proxy Statement"), (B) the registration statement on Form S-4 to
be filed with the SEC by Phone in connection with the issuance of Phone
Common Stock in the Merger (the "Form S-4"), and (C) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as may be required in connection
with this Agreement, the Option Agreements and the transactions
contemplated hereby and thereby; (3) 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 Phone and
Merger Sub are qualified to do business and such filings with Governmental
Entities to satisfy the applicable requirements of state securities or
"blue sky" laws; and, (4) such consents, approvals, orders or
authorizations the failure of which to be made or obtained individually or
in the aggregate would not (x) have a material adverse effect on Phone and
Merger Sub or (y) reasonably be expected to impair the ability of each of
Phone and Merger Sub to perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities.
Phone has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein) with
the SEC since June 11, 1999 (the "Phone SEC Documents"). As of their
respective dates, the Phone SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Phone SEC Documents, and none of the Phone
SEC Documents when filed contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of Phone included in the Phone SEC Documents comply as to form,
as of their respective dates of filing with the SEC, in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles ("GAAP") (except,
in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of Phone and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments which are not material).
Except (i) as reflected in such financial statements or in the notes
thereto or (ii) for liabilities incurred in connection with this Agreement,
the Option Agreements or the transactions contemplated hereby or thereby,
or (iii) for liabilities incurred in the ordinary course of business
consistent with past practices and which would not reasonably be expected
to have a material adverse effect, neither Phone nor any of its
subsidiaries has any liabilities or obligations of any nature which,
individually or in the aggregate, would have a material adverse effect on
Phone.
(f) Information Supplied.
None of the information supplied or to be supplied by
Phone and Merger Sub specifically for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 becomes
effective under the Securities Act, contain 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 not misleading or (ii)
the Joint Proxy Statement will, at the date it is first mailed to Phone's
stockholders or at the time of the Phone Stockholders' Meeting, contain any
untrue statement of a material fact or 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. The Form S-4 and the Joint Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder, except that no representation or
warranty is made by Phone with respect to statements made or incorporated
by reference therein based on information supplied by Software.com
specifically for inclusion or incorporation by reference in the Form S-4 or
the Joint Proxy Statement.
(g) Absence of Certain Changes or Events.
Except for liabilities incurred in connection with this
Agreement, the Option Agreements or the transactions contemplated hereby
and thereby, and except as permitted by Section 4.1(a), since March 31,
2000, Phone and its subsidiaries have conducted their business only in the
ordinary course consistent with past practice or as disclosed in any Phone
SEC Document filed since such date and prior to the date hereof, and there
has not been (i) any material adverse change in Phone, (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of Phone's capital
stock, (iii) any split, combination or reclassification of any of Phone's
capital stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of, or in substitution for shares
of Phone's capital stock, except for issuances of Phone Common Stock upon
exercise or conversion of Phone Options, in each case awarded prior to the
date hereof in accordance with their present terms or issued pursuant to
Section 4.1(a), (iv) (A) any granting by Phone or any of its subsidiaries
to any current or former director, officer or other key employee of Phone
or its subsidiaries of any increase in compensation, bonus or other
benefits, except for normal increases as a result of promotions, normal
increases of base pay or target bonuses in the ordinary course of business
or as was required under any employment agreements in effect as of March
31, 2000, (B) any granting by Phone or any of its subsidiaries to any such
current or former director, officer or key employee of any increase in
severance or termination pay, or (C) any entry by Phone or any of its
subsidiaries into, or any amendment of, any employment, deferred
compensation, consulting, severance, termination or indemnification
agreement with any such current or former director or officer, or any
material amendment of any of the foregoing with any key employee, (v)
except insofar as may have been disclosed in Phone SEC Documents filed and
publicly available prior to the date of this Agreement (as amended to the
date hereof, the "Phone Filed SEC Documents") or required by a change in
GAAP, any change in accounting methods, principles or practices by Phone
materially affecting its assets, liabilities or business, (vi) except
insofar as may have been disclosed in the Phone Filed SEC Documents, any
tax election that individually or in the aggregate would have a material
adverse effect on Phone or any of its tax attributes or any settlement or
compromise of any material income tax liability, or (vii) any action taken
by Phone or any of the Phone subsidiaries during the period from April 1,
2000, through the date of this Agreement that, if taken during the period
from the date of this Agreement through the Effective Time, would
constitute a breach of Section 4.1(a).
(h) Compliance with Applicable Laws; Litigation.
(i) Phone, its subsidiaries and employees hold all
permits, licenses, variances, exemptions, orders, registrations and
approvals of all Governmental Entities which are required for the operation
of the businesses of Phone and its subsidiaries (the "Phone Permits"),
except where the failure to have any such Phone Permits individually or in
the aggregate would not have a material adverse effect on Phone. Except as
specifically disclosed in the Phone SEC Documents filed with the SEC prior
to the date hereof, Phone and its subsidiaries are in compliance with the
terms of the Phone Permits and all applicable laws, statutes, orders,
rules, regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered by any Governmental Entity (all such laws,
statutes, orders, rules, regulations, policies, guidelines, judgments,
decisions and orders, collectively, "Applicable Laws"), relating to Phone
or its business or properties, except where the failure to be in compliance
with such Applicable Laws individually or in the aggregate would not have a
material adverse effect on Phone. As of the date of this Agreement, except
as disclosed in the Phone Filed SEC Documents, no action, demand,
requirement or investigation by any Governmental Entity and no suit, action
or proceeding by any person, in each case with respect to Phone or any of
its subsidiaries or any of their respective properties, is pending or, to
the knowledge (as defined in Section 8.3(e)) of Phone, threatened, other
than, in each case, those the outcome of which individually or in the
aggregate would not (A) have a material adverse effect on Phone and Merger
Sub or (B) reasonably be expected to impair the ability of each of Phone
and Merger Sub to perform its obligations under this Agreement or the
Option Agreements or prevent or materially delay the consummation of any of
the transactions contemplated hereby or thereby.
(ii) Neither Phone nor any Phone subsidiary is subject to
any outstanding order, injunction or decree which has had or, insofar as
can be reasonably foreseen, individually or in the aggregate would have, a
material adverse effect on Phone.
(i) Absence of Changes in Benefit Plans.
Phone has delivered to Software.com or made available to
Software.com for review true and complete copies of (i) all severance and
employment agreements of Phone with directors, executive officers or key
employees, (ii) all written and material unwritten severance programs and
policies of each of Phone and each Phone subsidiary, and (iii) all plans or
arrangements of Phone and each Phone subsidiary relating to its employees
which contain change in control provisions, in each case which has not been
filed as an exhibit to a Phone Filed SEC Document. Documents made available
are identified in Section 3.1(i) of the Phone Disclosure Schedule. Since
March 31, 2000, there has not been any adoption or amendment in any
material respect by Phone or any of its subsidiaries of (A) any collective
bargaining agreement with respect to any employees of, (B) any material
bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding
providing benefits to any current or former officers, directors or
employees of, (C) any employment agreement, consulting agreement or
severance agreement with any current or former officer or director of, or
(D) any material employment agreement, consulting agreement or severance
agreement with any employee of Phone or any of its wholly owned
subsidiaries (collectively, the "Phone Benefit Plans"), or any material
change in any actuarial or other assumption used to calculate funding
obligations with respect to any Phone pension plans, or any material change
in the manner in which contributions to any Phone pension plans are made or
the basis on which such contributions are determined. Since March 31, 2000,
neither Phone nor any Phone subsidiary has amended any Phone Options or any
Phone Stock Plans to accelerate the vesting of, or release restrictions on,
awards thereunder, or to provide for such acceleration in the event of a
change in control.
(j) Benefit Plans.
(i) With respect to the Phone Benefit Plans, no event has
occurred and there exists no condition or set of circumstances, in
connection with which Phone or any of its subsidiaries would be subject to
any liability that individually or in the aggregate would have a material
adverse effect on Phone under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), the Code or any other applicable law.
(ii) Each Phone Benefit Plan has been administered in
accordance with its terms, except for any failures so to administer any
Phone Benefit Plan that individually or in the aggregate would not have a
material adverse effect on Phone. The Phone Benefit Plans have been
operated, and are, in compliance with the applicable provisions of ERISA,
the Code and all other applicable laws and the terms of all applicable
collective bargaining agreements, except for any failures to be in such
compliance that individually or in the aggregate would not have a material
adverse effect on Phone. Each Phone Benefit Plan intended to qualify under
section 401(a) of the Code and each trust intended to qualify under section
501(a) of the Code has either received a favorable determination, opinion
or advisory letter from the Internal Revenue Service (the "IRS") with
respect to each such Phone Benefit Plan as to its qualified status under
the Code, or has remaining a period of time under applicable Treasury
regulations or IRS pronouncements in which to apply for such a letter and
make any amendments necessary to obtain a favorable determination, opinion
or advisory as to the qualified status of each Phone Benefit Plan. To the
knowledge of Phone, no fact or event has occurred since the date of any
determination opinion or advisory letter from the IRS which is reasonably
likely to affect adversely the qualified status of any such Phone Benefit
Plan or the exempt status of any such trust.
(iii) No Phone Benefit Plan is subject to Title IV of
ERISA or is a "multi-employer plan" within the meaning of Section 3(37) of
ERISA.
(iv) No Phone Benefit Plan provides medical benefits
(whether or not insured), with respect to current or former employees after
retirement or other termination of service (other than coverage mandated by
applicable law or benefits, the full cost of which is borne by the current
or former employee) other than individual arrangements the amounts of which
are not material.
(v) Phone has previously provided to Software.com a copy
of each collective bargaining or other labor union contract applicable to
persons employed by Phone or any of its subsidiaries to which Phone or any
of its subsidiaries is a party. No collective bargaining agreement is being
negotiated or renegotiated by Phone or any of its subsidiaries. As of the
date of this Agreement, there is no labor dispute, strike or work stoppage
against Phone or any of its subsidiaries pending or, to the knowledge of
Phone, threatened which may interfere with the respective business
activities of Phone or any of its subsidiaries, except where such dispute,
strike or work stoppage individually or in the aggregate would not have a
material adverse effect on Phone. As of the date of this Agreement, to the
knowledge of Phone, none of Phone, any of its subsidiaries or any of their
respective representatives or employees has committed any material unfair
labor practice in connection with the operation of the respective
businesses of Phone or any of its subsidiaries, and there is no material
charge or complaint against Phone or any of its subsidiaries by the
National Labor Relations Board or any comparable governmental agency
pending or threatened in writing.
(vi) No employee of Phone or any Phone subsidiary will
be entitled to any material payment, additional benefits or any acceleration
of the time of payment or vesting of any benefits under any Phone Benefit
Plan as a result of the transactions contemplated by this Agreement (either
alone or in conjunction with any other event such as a termination of
employment).
(vii) To the knowledge of Phone, no material oral or
written representation or commitment with respect to any aspect of any
Phone Benefit Plan has been made to employees of Phone or any Phone
subsidiaries by an authorized Phone employee prior to the Closing Date that
is not materially in accordance with the written or otherwise preexisting
terms and provisions of such Phone Benefit Plans in effect immediately
prior to the Closing Date.
(viii) Except such as would not have a material adverse
effect, there are no material unresolved claims or disputes under the terms
of, or in connection with, any Phone Benefit Plan (other than routine
undisputed claims for benefits), and no action, legal or otherwise, has
been commenced with respect to any material claim.
(ix) To the knowledge of Phone, no non-exempt "prohibited
transaction" (within the meaning of section 4975(c) of the Code) involving
any Phone Benefit Plan has occurred that could subject Phone to any
material tax penalty or other cost or liability (by indemnification or
otherwise).
(x) Neither Phone nor any Phone subsidiary is obligated
to make any parachute payments as such term is defined in section 280G of
the Code, and neither is a party to any agreement that under certain
circumstances is reasonably likely to obligate it, or any successor in
interest, to make any parachute payments that will not be deductible under
section 280G of the Code. Neither Phone nor any Phone subsidiary is
obligated to make reimbursement or gross-up payments to any person in
respect to excess parachute payments.
(k) Taxes.
(i) Each of Phone and its subsidiaries has filed all
material Tax Returns required to be filed by it (taking into account all
applicable extensions) with the appropriate Tax Authority and all such
returns are true, complete, and correct in all material respects, or
requests for extensions to file such returns have been timely filed,
granted, and have not expired, except to the extent that such failures to
file, to be complete, true, or correct, or to have extensions granted that
remain in effect individually or in the aggregate would not have a material
adverse effect on Phone. Phone and each of its subsidiaries has paid (or
Phone has paid or caused to be paid on its behalf) all Taxes shown as due
on such returns, and the most recent financial statements contained in the
Phone Filed SEC Documents reflect an adequate reserve in accordance with
GAAP for all Taxes payable by Phone and its subsidiaries for all taxable
periods and portions thereof accrued through the date of such financial
statements.
(ii) No deficiencies for any Taxes have been proposed,
asserted or assessed against Phone or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in
the aggregate would not have a material adverse effect on Phone. Phone and
its subsidiaries have disclosed all material deficiencies or adjustments
for Taxes that have been proposed or assessed by any Tax Authority against
Phone or any of its subsidiaries. All of the Federal income Tax Returns of
the "affiliated group" (as defined in section 1504(a) of the Code) of which
Phone is the common parent are no longer subject to any Audit by virtue of
the expiration of the applicable statutory period of limitations for the
assessment of Tax.
(iii) Neither Phone nor any of its subsidiaries has taken
any action or knows of any fact, agreement, plan or other circumstance that
is reasonably likely to prevent the Merger from qualifying as a
"reorganization" within the meaning of section 368(a) of the Code.
(iv) No Audits are presently pending with regard to any
Taxes or Tax Returns of Phone or its subsidiaries.
(v) Neither Phone nor any of its subsidiaries is a party
to any agreement providing for the allocation, indemnification, or sharing
of Taxes.
(vi) Other than the "affiliated group" (as defined in
section 1504(a) of the Code) of which Phone is the common parent, neither
Phone nor any of its subsidiaries has been a member of any "affiliated
group."
(vii) There are no liens for Taxes on any of the assets
of Phone or its subsidiaries except for liens for Taxes that are not yet
due and payable and for which adequate reserves have been provided in
accordance with GAAP in the most recent financial statements contained in
the Phone Filed SEC Documents.
(viii) As used in this Agreement, "Audit" means any
audit, assessment, or other examination relating to Taxes by any Tax
Authority or any administrative or judicial proceedings or appeals of such
proceedings relating to Taxes. "Tax" or "Taxes" means all Federal, state,
local, and foreign taxes, and other assessments of a similar nature
(whether imposed directly or through withholding), including any interest,
additions to tax, or penalties applicable thereto, imposed by any Tax
Authority. "Tax Authority" means the Internal Revenue Service and any other
domestic or foreign governmental authority responsible for the
administration of any Taxes. "Tax Returns" mean all Federal, state, local
and foreign tax returns, declarations, statements, reports, schedules,
forms, and information returns and any amendments thereto.
(l) Voting Requirements.
The affirmative vote at the Phone Stockholders' Meeting
(the "Phone Stockholder Approval") of (i) the holders of a majority of all
outstanding shares of Phone Common Stock present in person or by proxy and
entitled to vote at a duly convened and held meeting of Phone stockholders
to approve the issuance of shares of Phone Common Stock pursuant to the
Merger and (ii) the holders of a majority of all outstanding shares of
Phone Common Stock to approve the Phone Charter Amendment are the only
votes of the holders of any class or series of Phone's capital stock
necessary to adopt this Agreement and approve the transactions contemplated
hereby.
(m) State Takeover Statutes; Certificate of
Incorporation.
The Board of Directors of Phone has adopted a resolution
or resolutions approving this Agreement, the Option Agreements and the
Software.com Voting Agreement and the transactions contemplated hereby and
thereby and, assuming the accuracy of Software.com's representation and
warranty contained in Section 3.2(p), such approval constitutes approval of
the Merger and the other transactions contemplated hereby and by the Option
Agreements and the Software.com Voting Agreement by the Phone Board of
Directors under the provisions of Section 203 of the DGCL such that Section
203 of the DGCL does not apply to this Agreement, the Option Agreements,
the Software.com Voting Agreement and the transactions contemplated hereby
and thereby. To the knowledge of Phone, no state takeover statute other
than Section 203 of the DGCL (which has been rendered inapplicable) is
applicable to the Merger or the other transactions contemplated hereby.
(n) Brokers.
Except for fees payable to Credit Suisse First Boston
Corporation ("CSFB") pursuant to an engagement letter, dated June 16, 2000,
a true and complete copy of which has been provided to Software.com, no
broker, investment banker, financial advisor or other person is entitled to
any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Phone or Merger
Sub.
(o) Opinion of Financial Advisors.
Phone has received the opinion of CSFB, dated the date of
this Agreement, to the effect that, as of such date, the Exchange Ratio is
fair from a financial point of view to Phone, a signed copy of which
opinion will be delivered to Software.com promptly after execution of this
Agreement.
(p) Ownership of Software.com Common Stock.
To the knowledge of Phone and Merger Sub, as of the date
hereof or at any time within twelve (12) months prior to the date of this
Agreement (and before giving effect to the Software.com Option Agreement
and the Software.com Voting Agreement, which will be entered into
immediately after the execution of this Agreement), neither Phone nor, to
its knowledge without independent investigation, any of its affiliates, (i)
beneficially owns (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, or (ii) is party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing
of, in each case, shares of capital stock of Software.com.
(q) Intellectual Property.
(i) To the knowledge of Phone, Phone or its subsidiaries
own or have a valid right to use all trademarks, service marks, trade
names, Internet domain names, designs, slogans, and general intangibles of
like nature, to get her with all applications, registrations and goodwill
related to the foregoing (collectively, "Phone Trademarks"); patents
(including any registration, continuations, continuations-in-part, renewals
and applications for any of the foregoing); copyrights (including any
registrations, renewals and applications for any of the foregoing); Phone
Software (as defined below); technology, trade secrets and other
confidential information, know-how, proprietary processes, formulae,
algorithms, models, and methodologies (collectively, "Phone Trade Secrets")
used in or necessary for the conduct of Phone's and each of its
subsidiary's business as currently conducted (all such intellectual
property being referred to herein as the "Phone Intellectual Property"),
except where the failure to possess such right would not have a material
adverse effect. For purposes of this Section 3.1(q), "Phone Software" means
any and all (a) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source
code or object code, (b) databases and compilations, including any and all
data and collections of data, whether machine readable or otherwise, (c)
descriptions, flowcharts and other work product used to design, plan,
organize and develop any of the foregoing, (d) the technology supporting
any Internet site(s) operated by or on behalf of Phone or any of its
subsidiaries and (e) all documentation, including user manuals and training
materials, relating to any of the foregoing.
(ii) The Phone Intellectual Property owned by Phone or
any of its subsidiaries is free and clear of all Liens.
(iii) All material Phone Intellectual Property owned
by Phone or any of its subsidiaries is valid and subsisting, in full force
and effect, and has not been canceled, has not expired, nor has it been
abandoned. There is no pending or, to Phone's knowledge, threatened
opposition, interference or cancellation proceeding before any court or
registration authority in any jurisdiction against any registrations in
respect of the Phone Intellectual Property (other than Phone Trademarks)
owned by Phone or any of its subsidiaries.
(iv) To the actual knowledge of Phone or any of its
subsidiaries, the conduct of the business of Phone and its subsidiaries as
currently conducted does not infringe upon (either directly or indirectly
such as through contributory infringement or inducement to infringe) any
intellectual property rights owned or controlled by any third party. There
are no claims or suits pending and as to which Phone has received actual
notice or, to the knowledge of Phone, threatened, and neither Phone nor any
of its subsidiaries has received any notice of a third-party claim or suit,
(a) alleging that its activities or the conduct of its business infringes
upon, violates, or constitutes the unauthorized use of the intellectual
property rights of any third party or (b) challenging the ownership, use,
validity or enforceability of any Phone Intellectual Property, which in any
case would have a material adverse effect.
(v) There are no written settlements, forbearances to
sue, consents, judgments, or orders or similar obligations which in any
material respect (a) restrict the right of Phone or its subsidiaries to use
any Phone Intellectual Property owned by Phone, or (b) restrict the
business of Phone or its subsidiaries in order to accommodate a third
party's intellectual property rights or (c) except for licenses with
customers for Phone Software, there are no agreements that permit third
parties to use any Phone Intellectual Property owned or controlled by Phone
or any of its subsidiaries.
(vi) Phone and each of its subsidiaries takes reasonable
measures to protect the confidentiality of Phone Trade Secrets, including
(i) requiring its employees and independent contractors having access
thereto to execute written nondisclosure agreements and (ii) requiring all
licensees to maintain the confidentiality of Phone Trade Secrets. To the
actual knowledge of Phone or its subsidiaries, no Phone Trade Secret has
been knowingly disclosed or authorized to be disclosed to any third party
other than pursuant to a nondisclosure agreement or other appropriate
instrument that adequately protects Phone and the applicable subsidiary's
proprietary interests in and to such trade secrets. To the knowledge of
Phone, no party to any nondisclosure agreement or nondisclosure obligation
relating to its trade secrets is in breach or default thereof.
(vii) To the knowledge of Phone, no third party is
misappropriating, infringing, diluting, or violating any Phone Intellectual
Property owned by Phone or any of its subsidiaries other than immaterial
disputes concerning use by a third party of Phone Trademarks of Phone or a
subsidiary.
(viii) The consummation of the Merger and the other
transactions contemplated by this Agreement shall not result in the loss or
impairment of Phone's or of any subsidiary's right to own or use any of the
Phone Intellectual Property, and will not require the consent of any
governmental authority, except where such loss or impairment or the failure
to obtain consent would not result in a material adverse effect.
(r) Certain Contracts.
Except as set forth in the Phone Filed SEC Documents,
neither Phone nor any of its subsidiaries is a party to or bound by (i) any
"material contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC), (ii) any non-competition agreement or any other
agreement or obligation which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of
the business of Phone and its subsidiaries (including, for purposes of this
Section 3.1(r), Software.com and its subsidiaries, assuming the Merger have
taken place), taken as a whole, is or would be conducted, (iii) any
exclusive supply or purchase contracts or any exclusive requirements
contracts or (iv) any contract or other agreement which would prohibit or
materially delay the consummation of the Merger or any of the transactions
contemplated by this Agreement (all contracts of the type described in
clauses (i) and (ii) being referred to herein as "Phone Material
Contracts"). Phone has delivered to Software.com or provided to
Software.com for review, prior to the execution of this Agreement, complete
and correct copies of all Phone Material Contracts not filed as exhibits to
the Phone Filed SEC Documents. Each Phone Material Contract is valid and
binding on Phone (or, to the extent a Phone subsidiary is a party, such
subsidiary) and is in full force and effect, and Phone and each Phone
subsidiary have in all material respects performed all obligations required
to be performed by them to date under each Phone Material Contract, except
where such noncompliance, individually or in the aggregate, would not have
a material adverse effect on Phone. Neither Phone nor any Phone subsidiary
knows of, or has received notice of, any violation or default under (nor,
to the knowledge of Phone, does there exist any condition which with the
passage of time or the giving of notice or both would result in such a
violation or default under) any Phone Material Contract.
(s) Phone Rights Agreement.
Phone has delivered to Software.com a true, correct and
complete copy of the Phone Rights Agreement. Phone has taken all action so
that the entering into of this Agreement, the Phone Option Agreement, the
Phone Voting Agreement, the Merger, the acquisition of shares pursuant to
the Phone Option Agreement and the other transactions contemplated hereby
and thereby will not result in the grant of any rights to any person under
the Phone Rights Agreement or enable or require the Phone Rights to be
exercised, distributed or triggered.
(t) Environmental Liability.
Except as set forth in the Phone Filed SEC Documents,
there are no legal, administrative, arbitral or other proceedings, claims,
actions, causes of action, private environmental investigations or
remediation activities or governmental investigations of any nature pending
or threatened against Phone or any of its subsidiaries seeking to impose,
or that could reasonably be expected to result in the imposition of, on
Phone or any of its subsidiaries, any liability or obligation arising under
common law or under any local, state or federal environmental statute,
regulation or ordinance, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), which liability or obligation could reasonably be expected to
have a material adverse effect on Phone. To the knowledge of Phone, there
is no reasonable basis for any such proceeding, claim, action or
governmental investigation that would impose any liability or obligation
that could reasonably be expected to have a material adverse effect on
Phone.
(u) Insurance.
Phone and each of its subsidiaries have policies of
insurance and bonds of the type and in amounts customarily carried by
persons conducting businesses or owning assets similar to those of Phone
and its subsidiaries. There is no claim pending under any of such policies
or bonds as to which coverage has been questioned, denied or disputed by
the underwriters of such policies or bonds, except questioned, denied or
disputed claims the failure to provide coverage for which would not,
individually or in the aggregate, have a material adverse effect on Phone.
All premiums due and payable under all such policies and bonds have been
paid and Phone and its subsidiaries are otherwise in compliance in all
material respects with the terms of such policies and bonds. Phone has no
knowledge of any threatened termination of, or material premium increase
with respect to, any of such policies.
(v) Accounting Matters.
As of the date hereof, to the knowledge of Phone, none of
Phone, any of its subsidiaries or any of their respective directors,
officers or stockholders, has taken any action which would prevent the
accounting for the Merger as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16 ("APB 16") and the
interpretative releases pursuant thereto and the pronouncements of the SEC.
(w) Transactions with Affiliates.
Except as disclosed in the Phone SEC Documents filed
prior to the date of this Agreement or as disclosed in the Phone Disclosure
Schedule, since June 30, 1999, there have been no transactions, agreements,
arrangements or understandings between Phone and its affiliates that would
be required to be disclosed under the Item 404 of Regulation S-K under the
Securities Act.
(x) Full Disclosure.
None of the representations or warranties made by Phone
or Merger Sub herein or in any schedule hereto, including the Phone
Disclosure Schedule, or any certificate furnished by Phone or Merger Sub
pursuant to this Agreement, contains or will contain at the Effective Time
any untrue statement of a material fact, or omits or will omit at the
Effective Time, to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances
under which made, not misleading.
SECTION 3.2 Representations and Warranties of Software.com.
Software.com represents and warrants to Phone and Merger
Sub, subject to such exceptions as are disclosed in writing in the
disclosure letter supplied by Software.com to Phone dated as of the date
hereof (the "Software.com Disclosure Schedule"), which disclosure shall
provide an exception to or otherwise qualify the representations,
warranties or covenants of Software.com contained in the section of this
Agreement corresponding by number to such disclosure or covenant and the
other representations, warranties and covenants herein to the extent such
disclosure shall reasonably appear to be applicable to such other
representations, warranties or covenants as follows:
(a) Organization, Standing and Corporate Power.
(i) Each of Software.com and its subsidiaries (as defined
in Section 8.3) is a corporation or other legal entity duly organized,
validly existing and in good standing (with respect to jurisdictions which
recognize such concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power, as the case may
be, and authority to carry on its business as now being conducted, except,
as to subsidiaries, for those jurisdictions where the failure to be so
organized, existing or in good standing individually or in the aggregate
would not have a material adverse effect (as defined in Section 8.3(b)) on
Software.com. Each of Software.com and its subsidiaries is duly qualified
or licensed to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction in which
the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except for
those jurisdictions where the failure to be so qualified or licensed or to
be in good standing individually or in the aggregate would not have a
material adverse effect on Software.com.
(ii) Software.com has delivered to Phone prior to the
execution of this Agreement complete and correct copies of any amendments
to its Certificate of Incorporation (the "Software.com Certificate") and
by-laws not filed as of the date hereof with the Software.com SEC Documents
(as defined in Section 3.2(e)).
(b) Subsidiaries.
Exhibit 21 to Software.com's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999, includes all the subsidiaries
of Software.com which as of the date of this Agreement are Significant
Subsidiaries (as defined in Rule 102 of Regulation S-X of the SEC). All the
outstanding shares of capital stock of, or other equity interests in, each
such Significant Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by Software.com, free
and clear of all Liens and free of any other restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests).
(c) Capital Structure.
The authorized capital stock of Software.com consists of
150,000,000 shares of Software.com Common Stock, and 5,000,000 shares of
preferred stock, without par value ("Software.com Preferred Stock"). At the
close of business on August 4, 2000: (i) 48,866,633 shares of Software.com
Common Stock were issued and outstanding; (ii) 52,698 shares of
Software.com Common Stock were held by Software.com in its treasury; (iii)
no shares of Software.com Preferred Stock were issued and outstanding; (iv)
8,817,838 shares of Software.com Common Stock were reserved for issuance
pursuant to all stock option, restricted stock or other stock-based
compensation, benefits or savings plans, agreements or arrangements in
which current or former employees or directors of Software.com or its
subsidiaries participate as of the date hereof, complete and correct copies
of which, in each case as amended as of the date hereof, have been filed as
exhibits to the Software.com Filed SEC Documents or delivered to Phone
(such plans, collectively, the "Software.com Stock Plans"), (v) 850,000
shares of Software.com Common Stock were reserved for issuance pursuant to
options outside the Software.com Stock Plans; and (vi) 146,721 shares of
Software.com Common Stock were reserved for issuance upon the exercise of
outstanding warrants and (vii) 155,000 shares of Software.com Preferred
Stock will be designated as Series A Participating Preferred Stock all of
which will be reserved for issuance upon the exercise of preferred stock
purchase rights (the "Software.com Rights") issued pursuant to the Rights
Agreement approved by the board of directors of Software.com in connection
with its approval of this Agreement and to be entered into no later than
ten (10) days following the date hereof substantially in the form
previously provided to Phone (the "Software.com Rights Agreement"). All
outstanding shares of capital stock of Software.com are, and all shares
which may be issued as permitted by this Agreement or otherwise will be,
when issued, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. Except as set forth in this Section
3.2(c), and except for changes since March 31, 2000, resulting from the
issuance of shares of Software.com Common Stock pursuant to the
Software.com Options or as expressly permitted by this Agreement, (x) there
are not issued, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of Software.com, (B) any
securities of Software.com or any Software.com subsidiary convertible into
or exchangeable or exercisable for shares of capital stock or voting
securities of Software.com, (C) any warrants, calls, options or other
rights to acquire from Software.com or any Software.com subsidiary, and any
obligation of Software.com or any Software.com subsidiary to issue, any
capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of
Software.com, and (y) there are no outstanding obligations of Software.com
or any Software.com subsidiary to repurchase, redeem or otherwise acquire
any such securities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities. Neither Software.com nor any
Software.com subsidiary is a party to any agreement restricting the
purchase or transfer of, relating to the voting of, requiring registration
of, or granting any preemptive or, except as provided by the terms of the
Software.com Options, antidilutive rights with respect to, any securities
of the type referred to in the two preceding sentences. Other than the
Software.com subsidiaries, Software.com does not directly or indirectly
beneficially own any securities or other beneficial ownership interests in
any other entity except for non-controlling investments made in the
ordinary course of business in entities which are not individually or in
the aggregate material to Software.com and its subsidiaries as a whole.
(d) Authority; Non-contravention.
Software.com has all requisite corporate power and
authority to enter into this Agreement and the Option Agreements. Subject
to the Software.com Stockholder Approval (as defined in Section 3.2(l)),
Software.com has all requisite corporate power and authority to consummate
the transactions contemplated by this Agreement and the Option Agreements.
The execution and delivery of this Agreement and the Option Agreements by
Software.com and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action on
the part of Software.com, subject in the case of the Merger, to the
Software.com Stockholder Approval. This Agreement and the Option Agreements
have been duly executed and delivered by Software.com and, assuming the due
authorization, execution and delivery thereof by Phone and Merger Sub,
constitute (or will constitute, as the case may be) the legal, valid and
binding obligation of Software.com enforceable against Software.com in
accordance with their terms. The execution and delivery of this Agreement
does not, and the execution and delivery of the Option Agreements and the
consummation of the transactions contemplated hereby and thereby and
compliance with the provisions of this Agreement and the Option Agreements
will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a
benefit under, or result in the creation of any Lien upon any of the
properties or assets of Software.com or any of its subsidiaries or any
restriction on the conduct of Software.com's business or operations under,
(i) the Software.com Certificate or the by-laws of Software.com or the
comparable organizational documents of any of its subsidiaries, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, trust document,
lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to Software.com or any of its
subsidiaries or their respective properties or assets or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Software.com or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (ii)
and (iii), any such conflicts, violations, defaults, rights, losses,
restrictions or Liens that individually or in the aggregate would not (x)
have a material adverse effect on Software.com or (y) reasonably be
expected to impair the ability of Software.com to perform its obligations
under this Agreement or the Option Agreements. No consent, approval, order
or authorization of, action by, or in respect of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Software.com or any of its subsidiaries in connection with the
execution and delivery of this Agreement or the Option Agreements by
Software.com or the consummation by Software.com of the transactions
contemplated hereby or thereby, except for (1) the filing of a pre-merger
notification and report form by Software.com under the HSR Act or filings
or notifications under the antitrust, competition or similar laws of any
foreign jurisdiction; (2) the filing with the SEC of (A) the Joint Proxy
Statement relating to the Software.com Stockholders' Meeting and (B) such
reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as
may be required in connection with this Agreement and the Option Agreements
and the transactions contemplated hereby and thereby; (3) 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 Software.com is qualified to do business; and (4) such consents,
approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a material
adverse effect on Software.com or (y) reasonably be expected to impair the
ability of Software.com to perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities.
Software.com has filed all required registration
statements, prospectuses, reports, schedules, forms, statements and other
documents (including exhibits and all other information incorporated
therein) with the SEC since June 29, 1999 (the "Software.com SEC
Documents"). As of their respective dates, the Software.com SEC Documents
complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to such Software.com SEC
Documents, and none of the Software.com SEC Documents when filed contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Software.com included in the
Software.com SEC Documents comply as to form, as of their respective dates
of filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of Software.com and its consolidated subsidiaries as of
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments which are not material).
Except (i) as reflected in such financial statements or in the notes
thereto or (ii) for liabilities incurred in connection with this Agreement,
the Option Agreements or the transactions contemplated hereby or thereby,
or (iii) for liabilities incurred in the ordinary course of business
consistent with past practices and which would not reasonably be expected
to have a material adverse effect, neither Software.com nor any of its
subsidiaries has any liabilities or obligations of any nature which,
individually or in the aggregate, would have a material adverse effect on
Software.com.
(f) Information Supplied.
None of the information supplied or to be supplied by
Software.com specifically for inclusion or incorporation by reference in
(i) the Form S-4 will, at the time the Form S-4 becomes effective under the
Securities Act, contain 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 not misleading or (ii) the Joint Proxy Statement
will, at the date it is first mailed to Software.com's stockholders or at
the time of the Software.com Stockholders' Meeting, contain any untrue
statement of a material fact or 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. The
Joint Proxy Statement and the Form S-4 will comply as to form in all
material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Software.com with respect to
statements made or incorporated by reference therein based on information
supplied by Phone specifically for inclusion or incorporation by reference
in the Joint Proxy Statement or the Form S-4.
(g) Absence of Certain Changes or Events.
Except for liabilities incurred in connection with this
Agreement, the Option Agreements or the transactions contemplated hereby or
thereby, and except as permitted by Section 4.1(b), since March 31, 2000,
Software.com and its subsidiaries have conducted their business only in the
ordinary course consistent with past practice or as disclosed in any
Software.com SEC Document filed since such date and prior to the date
hereof, and there has not been (i) any material adverse change (as defined
in Section 8.3(b)) in Software.com, (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the capital stock of Software.com or any
of its subsidiaries, (iii) any split, combination or reclassification of
any of the capital stock of Software.com or any of its subsidiaries or any
issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of the capital stock
of Software.com or any of its subsidiaries, except for issuances of
Software.com Common Stock upon exercise or conversion of Software.com
Options, in each case awarded prior to the date hereof in accordance with
their present terms or issued pursuant to Section 4.1(b), (iv) (A) any
granting by Software.com or any of its subsidiaries to any current or
former director, officer or other key employee of Software.com or its
subsidiaries of any increase in compensation, bonus or other benefits,
except for normal increases as a result of promotions, normal increases of
base pay or target bonuses in the ordinary course of business or as was
required under any employment agreements in effect as of March 31, 2000,
(B) any granting by Software.com or any of its subsidiaries to any such
current or former director, officer or key employee of any increase in
severance or termination pay, or (C) any entry by Software.com or any of
its subsidiaries into, or any amendment of, any employment, deferred
compensation, consulting, severance, termination or indemnification
agreement with any such current or former director, officer, or any
material amendment of any of the foregoing with any key employee, (v)
except insofar as may have been disclosed in Software.com SEC Documents
filed and publicly available prior to the date of this Agreement (as
amended to the date hereof, the "Software.com Filed SEC Documents") or
required by a change in GAAP, any change in accounting methods, principles
or practices by Software.com materially affecting its assets, liabilities
or business, (vi) except insofar as may have been disclosed in the
Software.com Filed SEC Documents, any tax election that individually or in
the aggregate would have a material adverse effect on Software.com or any
of its tax attributes or any settlement or compromise of any material
income tax liability or (vii) any action taken by Software.com or any of
the Software.com subsidiaries during the period from April 1, 2000, through
the date of this Agreement that, if taken during the period from the date
of this Agreement through the Effective Time, would constitute a breach of
Section 4.1(b).
(h) Compliance with Applicable Laws; Litigation.
(i) Software.com, its subsidiaries and employees hold all
permits, licenses, variances, exemptions, orders, registrations and
approvals of all Governmental Entities which are required for the operation
of the businesses of Software.com and its subsidiaries (the "Software.com
Permits") except where the failure to have any such Software.com Permits
individually or in the aggregate would not have a material adverse effect
on Software.com. Except as specifically disclosed in the Software.com SEC
Documents filed with the SEC prior to the date hereof, Software.com and its
subsidiaries are in compliance with the terms of the Software.com Permits
and all Applicable Laws relating to Software.com and its subsidiaries or
their respective business or properties, except where the failure to be in
compliance with such Applicable Laws individually or in the aggregate would
not have a material adverse effect on Software.com. As of the date of this
Agreement, except as disclosed in the Software.com Filed SEC Documents, no
action, demand, requirement or investigation by any Governmental Entity and
no suit, action or proceeding by any person, in each case with respect to
Software.com or any of its subsidiaries or any of their respective
properties, is pending or, to the knowledge of Software.com, threatened,
other than, in each case, those the outcome of which individually or in the
aggregate would not (A) have a material adverse effect on Software.com or
(B) reasonably be expected to impair the ability of Software.com to perform
its obligations under this Agreement or the Option Agreements or prevent or
materially delay the consummation of any of the transactions contemplated
hereby or thereby.
(ii) Neither Software.com nor any Software.com subsidiary
is subject to any outstanding order, injunction or decree which has had or,
insofar as can be reasonably foreseen, individually or in the aggregate
would have, a material adverse effect on Software.com.
(i) Absence of Changes in Benefit Plans.
Software.com has delivered to Phone or made available to
Phone for review true and complete copies of (i) all severance and
employment agreements of Software.com with directors, executive officers, or
key employees, (ii) all written and material unwritten severance programs
and policies of each of Software.com and each Software.com subsidiary, and
(iii) all plans or arrangements of Software.com and each Software.com
subsidiary relating to its employees which contain change in control
provisions, in each case which has not been filed as an exhibit to a
Software.com Filed SEC Document. Documents made available are identified in
Section 3.2(i) of the Software.com Disclosure Schedule. Since March 31,
2000, there has not been any adoption or amendment in any material respect
by Software.com or any of its subsidiaries of any (A) collective bargaining
agreement with respect to any employees of, (B) any material bonus,
pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding providing benefits to any current
or former officers, directors or employees of, (C) any employment
agreement, consulting agreement or severance agreement with any current or
former officer or director of, or (D) any material employment agreement,
consulting agreement or severance agreement with any employee of
Software.com or any of its wholly owned subsidiaries (collectively, the
"Software.com Benefit Plans"), or any material change in any actuarial or
other assumption used to calculate funding obligations with respect to any
Software.com pension plans, or any material change in the manner in which
contributions to any Software.com pension plans are made or the basis on
which such contributions are determined. Since March 31, 2000, neither
Software.com nor any Software.com subsidiary has amended any Software.com
Options or any Software.com Stock Plans to accelerate the vesting of, or
release restrictions on, awards thereunder, or to provide for such
acceleration in the event of a change in control.
(j) Benefit Plans.
(i) With respect to the Software.com Benefit Plans, no
event has occurred and there exists no condition or set of circumstances,
in connection with which Software.com or any of its subsidiaries would be
subject to any liability that individually or in the aggregate could have a
material adverse effect on Software.com under ERISA, the Code or any other
applicable law.
(ii) Each Software.com Benefit Plan has been administered
in accordance with its terms, except for any failures so to administer any
Software.com Benefit Plan that individually or in the aggregate would not
have a material adverse effect on Software.com. The Software.com Benefit
Plans have been operated, and are, in compliance with the applicable
provisions of ERISA, the Code and all other applicable laws and the terms
of all applicable collective bargaining agreements, except for any failures
to be in such compliance that individually or in the aggregate would not
have a material adverse effect on Software.com. Each Software.com Benefit
Plan intended to qualify under section 401(a) of the Code and each trust
intended to qualify under section 501(a) of the Code has received either a
favorable determination, opinion or advisory letter from the IRS with
respect to each such Software.com Benefit Plan as to its qualified status
under the Code, or has remaining a period of time under applicable Treasury
regulations or IRS pronouncements in which to apply for such a letter and
make any amendments necessary to obtain a favorable determination, opinion
or advisory as to the qualified status of each Software.com Benefit Plan.
To the knowledge of Software.com, no fact or event has occurred since the
date of any determination letter from the IRS which is reasonably likely to
affect adversely the qualified status of any such Software.com Benefit Plan
or the exempt status of any such trust.
(iii) No Software.com Benefit Plan is subject to Title IV
of ERISA or is a "multi-employer plan" within the meaning of Section 3(37)
of ERISA.
(iv) No Software.com Benefit Plan provides medical
benefits (whether or not insured), with respect to current or former
employees after retirement or other termination of service (other than
coverage mandated by applicable law or benefits, the full cost of which is
borne by the current or former employee) other than individual arrangements
the amounts of which are not material.
(v) Software.com has previously provided to Phone a copy
of each collective bargaining or other labor union contract applicable to
persons employed by Software.com or any of its subsidiaries to which
Software.com or any of its subsidiaries is a party. No collective
bargaining agreement is being negotiated or renegotiated by Software.com or
any of its subsidiaries. As of the date of this Agreement, there is no
labor dispute, strike or work stoppage against Software.com or any of its
subsidiaries pending or, to the knowledge of Software.com, threatened which
may interfere with the respective business activities of Software.com or
any of its subsidiaries, except where such dispute, strike or work stoppage
individually or in the aggregate would not have a material adverse effect
on Software.com. As of the date of this Agreement, to the knowledge of
Software.com, none of Software.com, any of its subsidiaries or any of their
respective representatives or employees has committed any material unfair
labor practice in connection with the operation of the respective
businesses of Software.com or any of its subsidiaries, and there is no
material charge or complaint against Software.com or any of its
subsidiaries by the National Labor Relations Board or any comparable
governmental agency pending or threatened in writing.
(vi) No employee of Software.com or any Software.com
subsidiary will be entitled to any material payment, additional benefits or
any acceleration of the time of payment or vesting of any benefits under
any Software.com Benefit Plan as a result of the transactions contemplated
by this Agreement (either alone or in conjunction with any other event such
as a termination of employment).
(vii) To the knowledge of Software.com, no material oral
or written representation or commitment with respect to any aspect of any
Software.com Benefit Plan has been made to employees of Software.com or any
Software.com subsidiaries by an authorized Software.com employee prior to
the Closing Date that is not materially in accordance with the written or
otherwise preexisting terms and provisions of such Software.com Benefit
Plans in effect immediately prior to the Closing Date.
(viii) Except as would not have a material adverse
effect, there are no material unresolved claims or disputes under the terms
of, or in connection with, any Software.com Benefit Plan (other than
routine undisputed claims for benefits), and no action, legal or otherwise,
has been commenced with respect to any material claim.
(ix) To the knowledge of Software.com, no non-exempt
"prohibited transaction" (within the meaning of section 4975(c) of the
Code) involving any Software.com Benefit Plan has occurred that could
subject Software.com to any material tax penalty or other cost or liability
(by indemnification or otherwise).
(x) Neither Software.com nor any Software.com subsidiary
is obligated to make any parachute payments as such term is defined in
section 280G of the Code, and neither is a party to any agreement that
under certain circumstances is reasonably likely to obligate it, or any
successor in interest, to make any parachute payments that will not be
deductible under section 280G of the Code. Neither Software.com nor any
Software.com subsidiary is obligated to make reimbursement or gross-up
payments to any person in respect to excess parachute payments.
(k) Taxes.
(i) Each of Software.com and its subsidiaries has filed
all material Tax Returns required to be filed by it (taking into account
all applicable extensions) with the appropriate Tax Authority and all such
returns are complete, true, and correct in all material respects, or
requests for extensions to file such returns have been timely filed,
granted, and have not expired, except to the extent that such failures to
file, to be complete, true, or correct, or to have extensions granted that
remain in effect individually or in the aggregate would not have a material
adverse effect on Software.com. Software.com and each of its subsidiaries
has paid (or Software.com has paid or caused to be paid on its behalf) all
Taxes shown as due on such returns, and the most recent financial
statements contained in the Software.com Filed SEC Documents reflect an
adequate reserve in accordance with GAAP for all Taxes payable by
Software.com and its subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements.
(ii) No deficiencies for any Taxes have been proposed,
asserted or assessed against Software.com or any of its subsidiaries that
are not adequately reserved for, except for deficiencies that individually
or in the aggregate would not have a material adverse effect on
Software.com. Software.com and its subsidiaries have disclosed all material
deficiencies or adjustments for Taxes that have been proposed or assessed
by any Tax Authority against Software.com or any of its subsidiaries. All
of the Federal income Tax Returns of the "affiliated group" (as defined in
section 1504(a) of the Code) of which Software.com is the common parent are
no longer subject to any Audit by virtue of the expiration of the
applicable statutory period of limitations for the assessment of Tax.
(iii) Neither Software.com nor any of its subsidiaries
has taken any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to prevent the Merger from
qualifying as a "reorganization" within the meaning of section 368(a) of
the Code.
(iv) No Audits are presently pending with regard to any
Taxes or Tax Returns of Software.com or its subsidiaries.
(v) Neither Software.com nor any of its subsidiaries is a
party to any agreement providing for the allocation, indemnification, or
sharing of Taxes.
(vi) Other than the "affiliated group" (as defined in
section 1504(a) of the Code) of which Software.com is the common parent,
neither Software.com nor any of its subsidiaries has been a member of any
"affiliated group."
(vii) There are no liens for Taxes on any of the assets
of Software.com or its subsidiaries except for liens for Taxes that are not
yet due and payable and for which adequate reserves have been provided in
accordance with GAAP in the most recent financial statements contained in
the Software.com Filed SEC Documents.
(l) Voting Requirements.
The affirmative vote at the Software.com Stockholders'
Meeting (the "Software.com Stockholder Approval") of the holders of a
majority of all outstanding shares of Software.com Common Stock entitled to
vote at a duly convened and held meeting of Software.com stockholders is
the only vote of the holders of any class or series of Software.com's
capital stock necessary to adopt this Agreement and approve the
transactions contemplated hereby.
(m) State Takeover Statutes; Certificate of
Incorporation.
The Board of Directors of Software.com has adopted a
resolution or resolutions approving this Agreement, the Option Agreements,
the Phone Voting Agreement and the transactions contemplated hereby and
thereby, and, assuming the accuracy of Phone's representation and warranty
contained in Section 3.1(p), such approval constitutes approval of the
Merger and the other transactions contemplated hereby and by the Option
Agreements and the Phone Voting Agreement by the Software.com Board of
Directors under the provisions of Section 203 of the DGCL such that Section
203 of the DGCL does not apply to this Agreement, the Option Agreements,
the Phone Voting Agreement or the transactions contemplated hereby and
thereby. To the knowledge of Software.com, no state takeover statute other
than Section 203 of the DGCL (which has been rendered inapplicable) is
applicable to the Merger or the other transactions contemplated hereby.
(n) Brokers.
Except for fees payable to Morgan Stanley & Co.
Incorporated pursuant to an engagement letter dated July 28, 2000, a true
and correct copy of which has been provided to Phone, no broker, investment
banker, financial advisor or other person, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Software.com.
(o) Opinion of Financial Advisors.
Software.com has received the opinion of Morgan Stanley &
Co. Incorporated, dated the date of this Agreement, to the effect that, as
of such date, Exchange Ratio is fair from a financial point of view to
holders of Software.com Common Stock (other than Phone and its affiliates),
a signed copy of which opinion will be delivered to Phone promptly after
execution of this Agreement.
(p) Ownership of Phone Common Stock.
To the knowledge of Software.com, as of the date hereof
or at any time within twelve (12) months prior to the date of this
Agreement (and before giving effect to the Phone Option Agreement and the
Phone Voting Agreement, which will be entered into immediately after the
execution of this Agreement) neither Software.com nor, to its knowledge
without independent investigation, any of its affiliates, (i) beneficially
owns (as defined in either Rule 13d-3 under the Exchange Act) or owned,
directly or indirectly, or (ii) is or was party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting
or disposing of, in each case, shares of capital stock of Phone.
(q) Intellectual Property.
(i) To the knowledge of Software.com, Software.com or its
subsidiaries own or have a valid right to use all trademarks, service
marks, trade names, Internet domain names, designs, slogans, and general
intangibles of like nature, together with all applications, registrations,
renewals and goodwill related to the foregoing (collectively, "Software.com
Trademarks"); patents (including any registration, continuations,
continuations-in-part, renewals and applications for any of the foregoing);
copyrights (including any registrations and applications for any of the
foregoing); Software.com Software (as defined below); technology, trade
secrets and other confidential information, know-how, proprietary
processes, formulae, algorithms, models, and methodologies (collectively,
"Software.com Trade Secrets") used in or necessary for the conduct of
Software.com's and each of its subsidiary's business as currently conducted
(all such intellectual property being referred to herein as the
"Software.com Intellectual Property"), except where the failure to possess
such right would not have a material adverse effect. For purposes of this
Section 3.2(q), "Software.com Software" means any and all (a) computer
programs, including any and all software implementations of algorithms,
models and methodologies, whether in source code or object code, (b)
databases and compilations, including any and all data and collections of
data, whether machine readable or otherwise, (c) descriptions, flowcharts
and other work product used to design, plan, organize and develop any of
the foregoing, (d) the technology supporting any Internet site(s) operated
by or on behalf of Software.com or any of its subsidiaries and (e) all
documentation, including user manuals and training materials, relating to
any of the foregoing.
(ii) The Software.com Intellectual Property owned by
Software.com or any of its subsidiaries is free and clear of all Liens.
(iii) All material Software.com Intellectual Property
owned by Software.com or any of its subsidiaries is valid and subsisting,
in full force and effect, and has not been canceled, has not expired, nor
has it been abandoned. There is no pending or, to Software.com's knowledge,
threatened opposition, interference or cancellation proceeding before any
court or registration authority in any jurisdiction against any
registrations in respect of the Software.com Intellectual Property owned by
Software.com or any of its subsidiaries.
(iv) To the actual knowledge of Software.com or any of
its subsidiaries, the conduct of the business of Software.com and its
subsidiaries as currently conducted does not infringe upon (either directly
or indirectly such as through contributory infringement or inducement to
infringe) any intellectual property rights owned or controlled by any third
party. There are no claims or suits pending and as to which Software.com
has received actual notice or, to the knowledge of Software.com,
threatened, and neither Software.com nor any of its subsidiaries has
received any notice of a third-party claim or suit, (a) alleging that its
activities or the conduct of its business infringes upon, violates, or
constitutes the unauthorized use of the intellectual property rights of any
third party or (b) challenging the ownership, use, validity or
enforceability of any Software.com Intellectual Property (other than
Software.com Trademarks), which in any case would have a material adverse
effect.
(v) There are no written settlements, forbearances to
sue, consents, judgments, or orders or similar obligations which in any
material respect (a) restrict the right of Software.com or its subsidiaries
to use any Software.com Intellectual Property owned by Software.com, or (b)
restrict the business of Software.com or its subsidiaries in order to
accommodate a third party's intellectual property rights or (c) except for
licenses with customers for the Software.com Software, there are no
agreements that permit third parties to use any Software.com Intellectual
Property owned or controlled by Software.com or any of its subsidiaries.
(vi) Software.com and each of its subsidiaries takes
reasonable measures to protect the confidentiality of Software.com Trade
Secrets, including (i) requiring its employees and independent contractors
having access thereto to execute written nondisclosure agreements and (ii)
requiring all licensees to maintain the confidentiality of Software.com
Trade Secrets. To the actual knowledge of Software.com or its subsidiaries,
no Software.com Trade Secret has been knowingly disclosed or authorized to
be disclosed to any third party other than pursuant to a nondisclosure
agreement or other appropriate instrument that adequately protects
Software.com and the applicable subsidiary's proprietary interests in and
to such trade secrets. To the knowledge of Software.com, no party to any
nondisclosure agreement or nondisclosure obligation relating to its trade
secrets is in breach or default thereof.
(vii) To the knowledge of Software.com, no third party
is misappropriating, infringing, diluting, or violating any Software.com
Intellectual Property owned by Software.com or any of its subsidiaries
other than immaterial disputes concerning use by a third party of
Software.com Trademarks of Software.com or any of its subsidiaries.
(viii) The consummation of the Merger and the other
transactions contemplated by this Agreement shall not result in the loss or
impairment of Software.com's or of any subsidiary's right to own or use any
of the Software.com Intellectual Property, and will not require the consent
of any governmental authority, except where such loss or impairment or the
failure to obtain consent would not result in a material adverse effect.
(r) Certain Contracts.
Except as set forth in the Software.com Filed SEC
Documents, neither Software.com nor any of its subsidiaries is a party to
or bound by (i) any "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC), (ii) any non-competition
agreement or any other agreement or obligation which purports to limit in
any material respect the manner in which, or the localities in which, all
or any material portion of the business of Software.com and its
subsidiaries (including, for purposes of this Section 3.2(r), Phone and its
subsidiaries, assuming the Merger has taken place), taken as a whole, is or
would be conducted, (iii) any exclusive supply or purchase contracts or any
exclusive requirements contracts or (iv) any contract or other agreement
which would prohibit or materially delay the consummation of the Merger or
any of the transactions contemplated by this Agreement (all contracts of
the type described in clauses (i) and (ii) being referred to herein as
"Software.com Material Contracts"). Software.com has delivered to Phone or
made available to Phone for review, prior to the execution of this
Agreement, complete and correct copies of all Software.com Material
Contracts not filed as exhibits to the Software.com Filed SEC Documents.
Each Software.com Material Contract is valid and binding on Software.com
(or, to the extent a Software.com subsidiary is a party, such subsidiary)
and is in full force and effect, and Software.com and each Software.com
subsidiary have in all material respects performed all obligations required
to be performed by them to date under each Software.com Material Contract,
except where such noncompliance, individually or in the aggregate, would
not have a material adverse effect on Software.com. Neither Software.com
nor any Software.com subsidiary knows of, or has received notice of, any
violation or default under (nor, to the knowledge of Software.com, does
there exist any condition which with the passage of time or the giving of
notice or both would result in such a violation or default under) any
Software.com Material Contract.
(s) Software.com Rights Agreement.
Software.com has delivered to Phone a true, correct and
complete copy of the Software.com Rights Agreement. Software.com has taken
all action so that the entering into of this Agreement, the Software.com
Option Agreement, the Software.com Voting Agreement and the Merger, the
acquisition of shares pursuant to the Software.com Option Agreement and the
other transactions contemplated hereby and thereby will not result in the
grant of any rights to any person under the Software.com Rights Agreement
or enable or require the Software.com Rights to be exercised, distributed
or triggered.
(t) Environmental Liability.
Except as set forth in the Software.com Filed SEC
Documents, there are no legal, administrative, arbitral or other
proceedings, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of
any nature pending or threatened against Software.com or any of its
subsidiaries seeking to impose, or that could reasonably be expected to
result in the imposition, on Software.com or any of its subsidiaries, of
any liability or obligation arising under common law or under any local,
state or federal environmental statute, regulation or ordinance, including,
without limitation, CERCLA, which liability or obligation could reasonably
be expected to have a material adverse effect on Software.com. To the
knowledge of Software.com, there is no reasonable basis for any such
proceeding, claim, action or governmental investigation that would impose
any liability or obligation that could reasonably be expected to have a
material adverse effect on Software.com.
(u) Insurance.
Software.com and each of its subsidiaries have policies
of insurance and bonds of the type and in amounts customarily carried by
persons conducting businesses or owning assets similar to those of
Software.com and its subsidiaries. There is no material claim pending under
any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds, except
questioned, denied or disputed claims the failure to provide coverage for
which would not, individually or in the aggregate, have a material adverse
effect on Software.com. All premiums due and payable under all such
policies and bonds have been paid and Software.com and its subsidiaries are
otherwise in compliance in all material respects with the terms of such
policies and bonds. Software.com has no knowledge of any threatened
termination of, or material premium increase with respect to, any of such
policies.
(v) Accounting Matters.
As of the date hereof, to the knowledge of Software.com,
none of Software.com, any of its subsidiaries or any of their respective
directors, officers or stockholders, has taken any action which would
prevent the accounting for the Merger as a pooling of interests in
accordance with APB 16, the interpretative releases pursuant thereto and
the pronouncements of the SEC.
(w) Transactions with Affiliates.
Except as disclosed in the Software.com SEC Documents
filed prior to the date of this Agreement or as disclosed in the
Software.com Disclosure Schedule, since December 31, 1999, there have been
no transactions, agreements, arrangements or understandings between
Software.com and its affiliates that would be required to be disclosed
under the Item 404 of Regulation S-K under the Securities Act.
(x) Full Disclosure.
None of the representations or warranties made by
Software.com herein or in any schedule hereto, including the Software.com
Disclosure Schedule, or any certificate furnished by Software.com pursuant
to this Agreement, contains or will contain at the Effective Time any
untrue statement of a material fact, or omits or will omit at the Effective
Time, to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which
made, not misleading.
ARTICLE 4.
COVENANTS RELATING TO CONDUCT OF BUSINESS SECTION
SECTION 4.1 Conduct of Business.
(a) Conduct of Business by Phone.
Except as set forth in Section 4.1(a) of the Phone
Disclosure Schedule, as otherwise expressly contemplated by this Agreement
or as consented to by Software.com in writing, such consent not to be
unreasonably withheld or delayed, during the period from the date of this
Agreement to the Effective Time, Phone shall, and shall cause its
subsidiaries to, carry on their respective businesses in the ordinary
course consistent with past practice and in compliance in all material
respects with all applicable laws and regulations and, to the extent
consistent therewith, use reasonable efforts to preserve intact their
current business organizations, use reasonable efforts to keep available
the services of their current officers and other key employees and preserve
their relationships with those persons having business dealings with them
to the end that their goodwill and ongoing businesses shall be unimpaired
at the Effective Time. Without limiting the generality of the foregoing
(but subject to the above exceptions), during the period from the date of
this Agreement to the Effective Time, Phone shall not, and shall not permit
any of its subsidiaries to:
(i) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of Phone to its parent, or by a subsidiary
that is partially owned by Phone or any of its subsidiaries, provided that
Phone or any such subsidiary receives or is to receive its proportionate
share thereof, (x) declare, set aside or pay any dividends on, make any
other distributions in respect of, or enter into any agreement with respect
to the voting of, any of its capital stock, (y) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for
shares of its capital stock, except for issuances of Phone Common Stock
upon the exercise of Phone Options, in each case, outstanding as of the
date hereof in accordance with their present terms (including cashless
exercise) or issued pursuant to Section 4.1(a)(ii) or (z) purchase, redeem
or otherwise acquire any shares of capital stock of Phone or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (except, in the case
of clause (z), for the deemed acceptance of shares upon cashless exercise
of Phone Options outstanding on the date hereof, or in connection with
withholding obligations relating thereto);
(ii) except in connection with acquisitions permitted or
contemplated by clause (iv) of this Section 4.1(a), issue, deliver, sell,
pledge or otherwise encumber or subject to any Lien any shares of its
capital stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities (other than the issuance of
Phone Common Stock upon the exercise or conversion of Phone Options
outstanding as of the date hereof in accordance with their present terms or
the issuance of Phone Options (and shares of Phone Common Stock upon the
exercise thereof) granted after the date hereof in the ordinary course of
business consistent with past practice for employees (so long as such
additional amount of Phone Common Stock subject to Phone Options issued to
such employees does not exceed four and one-half million (4,500,000) shares
of Phone Common Stock in the aggregate));
(iii) except as contemplated hereby, amend its
certificate of incorporation, by-laws or other comparable organizational
documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets or
equity or other securities of, or by any other manner, any business or any
person, or, except for transactions pursuant to contracts or agreements in
force at the date of this Agreement or acquisitions or investments
permitted or contemplated by Section 4.1(a) of the Phone Disclosure
Schedule, make any material investment either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of
any property or assets of any other individual, corporation or other entity
other than a subsidiary of Phone;
(v) sell, lease, license, mortgage or otherwise encumber
or subject to any Lien or otherwise dispose of any of its properties or
assets (including securitizations), other than in the ordinary course of
business consistent with past practice, including, without limitation, in
connection with consolidation of acquired businesses or as would not have a
material adverse effect on Phone;
(vi) take any action that would cause the representations
and warranties set forth in Section 3.1(g) and qualified as to materiality
to be no longer true and correct or, if not so qualified, to be no longer
true and correct in all material respects;
(vii) incur any indebtedness for borrowed money or issue
any debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any person for
borrowed money, other than pursuant to a revolving credit facility or
receivables facility or commercial paper facility in effect as of the date
hereof (including any replacement facilities), in the ordinary course of
business consistent with past practice;
(viii) settle any material claim (including any Tax
claim), action or proceeding involving money damages, except in the
ordinary course of business consistent with past practice;
(ix) make any material Tax election except in the
ordinary course of business and consistent with past practice;
(x) other than in the ordinary course of business or in
connection with acquisitions permitted by Section 4.1(a) of the Phone
Disclosure Schedule, enter into or terminate any material contract or
agreement, or make any change in any of its material leases or contracts,
other than amendments or renewals of contracts and leases without material
adverse changes of terms;
(xi) except for increases in accordance with normal past
practice, increase in any manner the compensation or fringe benefits of any
of its officers or directors, or materially increase the foregoing in
respect of employees; enter into any commitment to pay any pension,
retirement or severance benefit to any such officers or directors, or make
any material commitment to pay the foregoing to any employees; commit
itself to, or enter into, any employment agreement involving compensation
of more than Two Hundred Thousand Dollars ($200,000.00) per year or a term
other than "at will;" adopt or commit itself to any new benefit, base
salary or stock option plan or arrangement; or amend, supplement, or
accelerate the timing of payments or vesting under, or otherwise materially
amend or supplement any existing benefit, stock option or compensation plan
or arrangement (other than as may be required by applicable law);
(xii) change any of the accounting methods used by Phone
or any of its subsidiaries unless required by generally accepted accounting
principles or take or knowingly allow to be taken any action which would
jeopardize the treatment of the Merger as a pooling of interests for
accounting purposes; or
(xiii) authorize, or commit or agree to take, any of the
foregoing actions; provided that the limitations set forth in this Section
4.1(a) (other than clause (iii)) shall not apply to any transaction between
Phone and any wholly owned subsidiary or between any wholly owned
subsidiaries of Phone.
(b) Conduct of Business by Software.com.
Except as set forth in Section 4.1(b) of the Software.com
Disclosure Schedule, as otherwise expressly contemplated by this Agreement
or as consented to by Phone in writing, such consent not to be unreasonably
withheld or delayed, during the period from the date of this Agreement to
the Effective Time, Software.com shall, and shall cause its subsidiaries
to, carry on their respective businesses in the ordinary course consistent
with past practice and in compliance in all material respects with all
applicable laws and regulations and, to the extent consistent therewith,
use all reasonable efforts to preserve intact their current business
organizations, use reasonable efforts to keep available the services of
their current officers and other key employees and preserve their
relationships with those persons having business dealings with them to the
end that their goodwill and ongoing businesses shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing (but
subject to the above exceptions), during the period from the date of this
Agreement to the Effective Time, Software.com shall not, and shall not
permit any of other Software.com subsidiaries to:
(i) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of Software.com to its parent, or by a
subsidiary that is partially owned by Software.com or any of its
subsidiaries, provided that Software.com or any such subsidiary receives or
is to receive its proportionate share thereof, (x) declare, set aside or
pay any dividends on, make any other distributions in respect of, or enter
into any agreement with respect to the voting of, any of its capital stock
or the capital stock of any of its subsidiaries, (y) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or the capital stock of any of its
subsidiaries, except for issuances of Software.com Common Stock upon the
exercise of Software.com Options outstanding as of the date hereof in
accordance with their present terms (including cashless exercise) or issued
pursuant to Section 4.1(b)(ii) or (z) purchase, redeem or otherwise acquire
any shares of capital stock of Software.com or any of its subsidiaries or
any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities (except, in the case of clause (z), for
the deemed acceptance of shares upon cashless exercise of Software.com
Options, or in connection with withholding obligations relating thereto);
(ii) except in connection with acquisitions permitted or
contemplated by clause (iv) of this Section 4.2(b), issue, deliver, sell,
pledge or otherwise encumber or subject to any Lien any shares of its
capital stock, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any such shares,
voting securities or convertible securities (other than the issuance of
Software.com Common Stock upon the exercise of Software.com Options
outstanding as of the date hereof in accordance with their present terms or
the issuance of Software.com Options (and shares of Software.com Common
Stock upon the exercise thereof) granted after the date hereof in the
ordinary course of business consistent with past practice for employees (so
long as such additional amount of Software.com Common Stock subject to
Software.com Employee Stock Options issued to employees does not exceed
four and one-half million (4,500,000) shares of Software.com Common Stock
in the aggregate));
(iii) except as contemplated hereby, amend its
certificate of incorporation, by-laws or other comparable organizational
documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets or
equity or other securities of, or by any other manner, any business or any
person, or, except for transactions pursuant to contracts or agreements in
force at the date of this Agreement or acquisitions or investments
permitted or contemplated by Section 4.1(b) of the Software.com Disclosure
Schedule, make any material investment either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of
any property or assets of any other individual, corporation or other entity
other than a subsidiary of Software.com;
(v) sell, lease, license, mortgage or otherwise encumber
or subject to any Lien or otherwise dispose of any of its properties or
assets (including securitizations), other than in the ordinary course of
business consistent with past practice, including, without limitation, in
connection with consolidation of acquired businesses or as would not have a
material adverse effect on Software.com;
(vi) take any action that would cause the representations
and warranties set forth in Section 3.2(g) and qualified as to materiality
to be no longer be true and correct or, if not so qualified, to be no
longer true and correct in all material respects;
(vii) incur any indebtedness for borrowed money or issue
any debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any person for
borrowed money, other than pursuant to a revolving credit facility or
receivables facility or commercial paper facility in effect as of the date
hereof (including any replacement facilities), in the ordinary course of
business consistent with past practice;
(viii) settle any claim (including any Tax claim), action
or proceeding involving money damages, except in the ordinary course of
business consistent with past practice;
(ix) make any material Tax election except in the
ordinary course of business and consistent with past practice;
(x) other than in the ordinary course of business or in
connection with acquisitions permitted by Section 4.1(b) of the
Software.com Disclosure Schedule, enter into or terminate any material
contract or agreement, or make any change in any of its material leases or
contracts, other than amendments or renewals of contracts and leases
without material adverse changes of terms;
(xi) except for increases in accordance with normal past
practice, increase in any manner the compensation or fringe benefits of any
of its officers or directors, or materially increase the foregoing in
respect of employees; enter into any commitment to pay any pension,
retirement or severance benefit to any such officers or directors, or make
any material commitment to pay any of the foregoing to any employees;
commit itself to, or enter into, any employment agreement involving base
salary of more than Two Hundred Thousand Dollars ($200,000.00) per year or
a term other than "at will;" adopt or commit itself to any new benefit,
compensation or stock option plan or arrangement; or amend, supplement, or
accelerate the timing of payments or vesting under, or otherwise materially
amend or supplement any existing benefit, stock option or compensation plan
or arrangement (other than as may be required by applicable law);
(xii) change any of the accounting methods used by
Software.com or any of its subsidiaries unless required by generally
accepted accounting principles or take or knowingly allow to be taken any
action which would jeopardize the treatment of the Merger as a pooling of
interests for accounting purposes; or
(xiii) authorize, or commit or agree to take, any of the
foregoing actions; provided that the limitations set forth in this Section
4.1(b) (other than clause (iii)) shall not apply to any transaction between
Software.com and any wholly owned subsidiary or between any wholly owned
subsidiaries of Software.com.
(c) Other Actions.
Except as required by law, Phone, Software.com and Merger
Sub shall not, and shall not permit any of their respective subsidiaries
to, voluntarily take any action that would, or that could reasonably be
expected to, result in any of the conditions to the Merger set forth in
Article 6 not being satisfied.
(d) Advice of Changes.
Each of Phone, Software.com and Merger Sub shall promptly
advise the other parties orally and in writing to the extent it has
knowledge of any change or event which would cause a failure of any of the
conditions set forth in Article 6 to be satisfied; provided, however, that
no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or remedies with respect thereto)
or the conditions to the obligations of the parties under this Agreement.
SECTION 4.2 No Solicitation by Phone.
(a) Phone shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
subsidiaries to, directly or indirectly through another person, (i)
solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate, any
inquiries or the making of any proposal the consummation of which would
constitute an Alternative Transaction (as hereinafter defined) or (ii)
participate in any discussions or negotiations regarding any Alternative
Transaction; provided, however, that if, at any time prior to the adoption
of this Agreement by the holders of Phone Common Stock, the Board of
Directors of Phone determines in good faith, after consultation with
outside counsel, that the failure to provide such information or
participate in such negotiations or discussions would result in a
reasonable possibility that the Board of Directors of Phone would breach
its fiduciary duties to Phone's stockholders under applicable law, Phone
may, in response to any such proposal that was not solicited by it or that
did not otherwise result from a breach of this Section 4.2(a), and subject
to compliance with Section 4.2(c), (x) furnish information with respect to
Phone and its subsidiaries to any person pursuant to a customary
confidentiality agreement containing terms as to confidentiality no less
restrictive than the terms of the confidentiality agreement, dated June 9,
2000, entered into between Software.com and Phone (the "Confidentiality
Agreement") and (y) participate in negotiations regarding such proposal.
For purposes of this Agreement "Alternative Transaction" means any of (i) a
transaction or series of transactions pursuant to which any person (or
group of persons) other than Software.com and its subsidiaries and other
than Phone and its subsidiaries (a "Third Party") acquires or would
acquire, directly or indirectly, beneficial ownership (as defined in Rule
13d-3 under the Exchange Act) of more than twenty percent (20%) of the
outstanding shares of Software.com or Phone, as the case may be, whether
from Software.com or Phone or pursuant to a tender offer or exchange offer
or otherwise, (ii) any acquisition or proposed acquisition of Software.com
or any of its significant subsidiaries or Phone or any of its significant
subsidiaries, as the case may be, by a merger or other business combination
(including any so-called "merger of equals" and whether or not Software.com
or any of its significant subsidiaries or Phone or any of its significant
subsidiaries, as the case may be, is the entity surviving any such merger
or business combination) or (iii) any other transaction pursuant to which
any Third Party acquires or would acquire, directly or indirectly, control
of assets (including for this purpose the outstanding equity securities of
subsidiaries of Software.com or Phone, as the case may be, and any entity
surviving any merger or combination including any of them) of Software.com
or any of its subsidiaries or Phone or any of its subsidiaries, as the case
may be, for consideration equal to twenty percent (20%) or more of the fair
market value of all of the outstanding shares of Software.com Common Stock
or all of the outstanding shares of Phone Common Stock, as the case may be,
on the date prior to the date hereof.
(b) Neither the Board of Directors of Phone nor any
committee thereof shall (i) except as expressly permitted by this Section
4.2(b), withdraw, qualify or modify, or propose publicly to withdraw,
qualify or modify, in a manner adverse to Software.com, the approval or
recommendation by such Board of Directors or such committee of the Merger,
this Agreement, the issuance of Phone Common Stock in connection with the
Merger or the Charter Amendment, (ii) approve or recommend, or propose
publicly to approve or recommend, any Alternative Transaction, or (iii)
cause Phone to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement related to any Alternative
Transaction. Notwithstanding the foregoing, in the event that prior to the
adoption of this Agreement by the holders of Phone Common Stock the Board
of Directors of Phone determines in good faith, after it has received a
Phone Superior Proposal (as defined below) and after consultation with
outside counsel, that the failure to do so would result in a reasonable
possibility that the Board of Directors of Phone would breach its fiduciary
duties to Phone's stockholders under applicable law, the Board of Directors
of Phone may (subject to this and the following sentences) inform Phone
stockholders that it no longer believes that the Merger or this Agreement
is advisable and no longer recommends approval of the issuance of shares of
Phone Common Stock pursuant to this Agreement (a "Phone Subsequent
Determination"), but only at a time that is after the third business day
following Software.com's receipt of written notice advising Software.com
that the Board of Directors of Phone has received a Phone Superior Proposal
specifying the material terms and conditions of such Phone Superior
Proposal, identifying the person making such Phone Superior Proposal and
stating that it intends to make a Phone Subsequent Determination. For
purposes of this Agreement, a "Phone Superior Proposal" means any proposal
(on its most recently amended or modified terms, if amended or modified)
made by a Third Party to enter into an Alternative Transaction which the
Board of Directors of Phone determines in its good faith judgment (after
consultation with a financial advisor of nationally recognized reputation)
to be more favorable to Phone's stockholders than the Merger taking into
account all relevant factors (including whether, in the good faith judgment
of the Board of Directors of Phone, after consultation with a financial
advisor of nationally recognized reputation, the third party is reasonably
able to finance the transaction. Notwithstanding any other provision of
this Agreement, Phone shall submit this Agreement to its stockholders
whether or not the Board of Directors of Phone makes a Phone Subsequent
Determination.
(c) In addition to the obligations of Phone set forth in
paragraphs (a) and (b) of this Section 4.2, and in any event within one (1)
business day, Phone shall promptly advise Software.com orally and in
writing of any request for information or of any proposal in connection
with an Alternative Transaction, the material terms and conditions of such
request or proposal and the identity of the person making such request or
proposal. Phone will keep Software.com reasonably informed of the status
and details (including amendments or proposed amendments) of any such
request or proposal on a current basis.
(d) Nothing contained in this Section 4.2 shall prohibit
Phone (i) from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange
Act or (ii) from making any disclosure to its stockholders if, in the good
faith judgment of the Board of Directors of Phone, after consultation with
outside counsel, failure so to disclose would be inconsistent with its
fiduciary duties to Phone's stockholders under applicable law.
SECTION 4.3 No Solicitation by Software.com.
(a) Software.com shall not, nor shall it permit any of
its subsidiaries to, nor shall it authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
subsidiaries to, directly or indirectly through another person, (i)
solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate, any
inquiries or the making of any proposal the consummation of which would
constitute an Alternative Transaction or (ii) participate in any
discussions or negotiations regarding any Alternative Transaction;
provided, however, that if, at any time prior to the adoption of this
Agreement by the holders of Software.com Common Stock, the Board of
Directors of Software.com determines in good faith, after consultation with
outside counsel, that the failure to provide such information or
participate in such negotiations or discussions would result in a
reasonable possibility that the Board of Directors of Software.com breach
its fiduciary duties to Software.com's stockholders under applicable law,
Software.com may, in response to any such proposal that was not solicited
by it or which did not otherwise result from a breach of this Section
4.3(a), and subject to compliance with Section 4.3(c), (x) furnish
information with respect to Software.com and its subsidiaries to any person
pursuant to a customary confidentiality agreement containing terms as to
confidentiality no less restrictive than the Confidentiality Agreement, as
amended pursuant to Section 8.6 hereof, and (y) participate in negotiations
regarding such proposal.
(b) Neither the Board of Directors of Software.com nor
any committee thereof shall (i) except as expressly permitted by this
Section 4.3(b), withdraw, qualify or modify, or propose publicly to
withdraw, qualify or modify, in a manner adverse to Phone, the approval or
recommendation by such Board of Directors or such committee of the Merger,
or this Agreement, (ii) approve or recommend, or propose publicly to
approve or recommend, any Alternative Transaction, or (iii) cause
Software.com to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement related to any Alternative
Transaction. Notwithstanding the foregoing, in the event that prior to the
adoption of this Agreement by the holders of Software.com Common Stock the
Board of Directors of Software.com determines in good faith, after it has
received a Software.com Superior Proposal (as defined below) and after
consultation with outside counsel, that the failure to do so would result
in a reasonable possibility that the Board of Directors of Software.com
would breach its fiduciary duties to Software.com's stockholders under
applicable law, the Board of Directors of Software.com may (subject to this
and the following sentences) inform Software.com stockholders that it no
longer believes that the Merger or this Agreement is advisable and no
longer recommends approval (a "Software.com Subsequent Determination"), but
only at a time that is after the third business day following Phone's
receipt of written notice advising Phone that the Board of Directors of
Software.com has received a Software.com Superior Proposal, specifying the
material terms and conditions of such Software.com Superior Proposal,
identifying the person making such Software.com Superior Proposal and
stating that it intends to make a Software.com Subsequent Determination.
For purposes of this Agreement, a "Software.com Superior Proposal" means
any proposal (on its most recently amended or modified terms, if amended or
modified) made by a Third Party enter into an Alternative Transaction on
terms which the Board of Directors of Software.com determines in its good
faith judgment (after consultation with a financial advisor of nationally
recognized reputation) to be more favorable to Software.com's stockholders
than the Merger taking into account all relevant factors (including
whether, in the good faith judgment of the Board of Directors of
Software.com, after consultation with a financial advisor of nationally
recognized reputation, the third party is reasonably able to finance the
transaction. Notwithstanding any other provision of this Agreement,
Software.com shall submit this Agreement to its stockholders whether or not
the Board of Directors of Software.com make a Software.com Subsequent
Determination.
(c) In addition to the obligations of Software.com set
forth in paragraphs (a) and (b) of this Section 4.3, and in any event
within one (1) business day, Software.com shall promptly advise Phone
orally and in writing of any request for information or of any proposal in
connection with an Alternative Transaction, the material terms and
conditions of such request or proposal and the identity of the person
making such request or proposal. Software.com will keep Phone reasonably
informed of the status and details (including amendments or proposed
amendments) of any such request or proposal on a current basis.
(d) Nothing contained in this Section 4.3 shall prohibit
Software.com from (i) taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange
Act or (ii) from making any disclosure to its stockholders if, in the good
faith judgment of the Board of Directors of Software.com, after
consultation with outside counsel, failure so to disclose would be
inconsistent with its fiduciary duties to Software.com's stockholders under
applicable law.
ARTICLE 5
ADDITIONAL AGREEMENTS
SECTION 5.1 Preparation of the Form S-4 and the Joint Proxy
Statement; Stockholders' Meetings.
(a) As soon as practicable following the date of this
Agreement, Phone and Software.com shall prepare and file with the SEC the
Joint Proxy Statement, and Phone shall prepare and file with the SEC the
Form S-4, in which the Joint Proxy Statement will be included as a
prospectus. Each of Phone and Software.com shall use commercially
reasonable efforts to have the Form S-4 declared effective under the
Securities Act as promptly as practicable after such filing. Phone will use
commercially reasonable efforts to cause the Joint Proxy Statement to be
mailed to Phone's stockholders, and Software.com will use commercially
reasonable efforts to cause the Joint Proxy Statement to be mailed to
Software.com's stockholders, in each case as promptly as practicable after
the Form S-4 is declared effective under the Securities Act. Phone shall
also take any action required to be taken under any applicable state
securities laws in connection with the issuance of shares of Phone Common
Stock in the Merger and the conversion of Software.com Options into options
to acquire Phone Common Stock, and Software.com shall furnish all
information concerning Software.com and the holders of Software.com Common
Stock as may be reasonably requested in connection with any such action. No
filing of, or amendment or supplement to, the Form S-4 or the Joint Proxy
Statement will be made by Phone without Software.com's prior consent and
without providing Software.com the opportunity to review and comment
thereon. Phone will advise Software.com promptly after it receives notice
thereof, of the time when the Form S-4 has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Phone Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Joint Proxy Statement or the Form
S-4 or comments thereon and responses thereto or requests by the SEC for
additional information. If at any time prior to the Effective Time any
information relating to Phone or Software.com, or any of their respective
affiliates, officers or directors, should be discovered by Phone or
Software.com which should be set forth in an amendment or supplement to any
of the Form S-4 or the Joint Proxy Statement, so that any of such documents
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other parties hereto
and an appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of Phone and Software.com.
(b) Phone shall, as promptly as practicable after the
Form S-4 is declared effective under the Securities Act, duly give notice
of, convene and hold a meeting of its stockholders (the "Phone
Stockholders' Meeting") in accordance with the DGCL for the purpose of
obtaining the Phone Stockholder Approval and shall, subject to the
provisions of Section 4.2(b) hereof, through its Board of Directors,
recommend to its stockholders the approval of the issuance of the shares of
Phone Common Stock in the Merger and the Phone Charter Amendment.
(c) Software.com shall, as promptly as practicable after
the Form S-4 is declared effective under the Securities Act, duly give
notice of, convene and hold a meeting of its stockholders (the
"Software.com Stockholders' Meeting") in accordance with the DGCL for the
purpose of obtaining the Software.com Stockholder Approval and shall,
subject to the provisions of Section 4.3(b) hereof, through its Board of
Directors, recommend to its stockholders the approval and adoption of this
Agreement, the Merger and the other transactions contemplated hereby.
(d) Software.com and Phone will use commercially
reasonable efforts to hold the Phone Stockholders' Meeting and the
Software.com Stockholders' Meeting on the same date and as soon as
reasonably practicable after the date hereof.
SECTION 5.2 Pooling Letters.
Software.com shall use commercially reasonable efforts to
obtain from Software.com's accounting firm, Ernst & Young, a signed report
in form and substance reasonably satisfactory to Phone and dated not
earlier than five (5) days prior to the Closing Date, to the effect that,
subject to customary qualifications, such firm concurs with the conclusion
of Software.com's management that Software.com qualifies as a "combining
company" in accordance with the criteria set forth in paragraph 46 of APB
16 and has not violated the criteria set forth in paragraphs 47c, 47d and
48c of APB 16 during the period extending from two (2) years preceding the
date of initiation to the date of such report and Phone shall use
commercially reasonable efforts to obtain from Phone's accounting firm,
KPMG LLP a signed report in form and substance reasonably satisfactory to
Phone and dated not earlier than five (5) days prior to the Closing Date,
to the effect that such firm concurs with the conclusion of Phone's
management that pooling of interests accounting for the Merger under APB 16
is appropriate.
SECTION 5.3 Access to Information; Confidentiality.
Subject to the Confidentiality Agreement and subject to
applicable law, each of Phone and Software.com shall, and shall cause each
of its respective subsidiaries to, afford to the other party and to the
officers, employees, accountants, counsel, financial advisors and other
representatives of such other party, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records
(provided that such access shall not interfere with the business or
operations of such party) and, during such period, each of Phone and
Software.com shall, and shall cause each of its respective subsidiaries to,
furnish promptly to the other party (a) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities laws and (b)
all other information concerning its business, properties and personnel as
such other party may reasonably request. No review pursuant to this Section
5.3 shall affect any representation or warranty given by the other party
hereto. Each of Phone and Software.com will hold, and will cause its
respective officers, employees, accountants, counsel, financial advisors
and other representatives and affiliates to hold, any nonpublic information
in accordance with the terms of the Confidentiality Agreements. Phone shall
also cooperate with Software.com and use its best efforts to obtain an
estimate of withdrawal liability from each multi-employer plan with respect
to which Phone contributes as of the date hereof.
SECTION 5.4 Commercially Reasonable Efforts.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use commercially
reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the
other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings and the taking of all steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or proceeding
by, any Governmental Entity, (ii) the obtaining of all necessary consents,
approvals or waivers, and any necessary or appropriate financing
arrangements, from third parties, (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or
reversed, and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully
carry out the purposes of, this Agreement. Notwithstanding anything to the
contrary in this Agreement, neither Software.com nor Phone shall be
required to hold separate (including by trust or otherwise) or divest any
of their respective businesses or assets, or enter into any consent decree
or other agreement that would restrict either Software.com or Phone in the
conduct of its business as heretofore conducted.
(b) In connection with and without limiting the
foregoing, Phone and Software.com shall (i) take all action necessary to
ensure that no state takeover statute or similar statute or regulation is
or becomes applicable to this Agreement, the Option Agreements, or any of
the transactions contemplated hereby and thereby and (ii) if any state
takeover statute or similar statute or regulation becomes applicable to
such agreements or transactions, take all action necessary to ensure that
such transactions may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect
of such statute or regulation on the Merger and the other transactions
contemplated by this Agreement.
SECTION 5.5 Indemnification, Exculpation and Insurance.
Phone agrees that at all times after the Effective Time,
it shall indemnify, and shall cause the Surviving Corporation to indemnify,
each person who is now, or has been at any time prior to the date hereof, a
director or officer of Software.com, any of its subsidiaries or affiliates,
or of any of its successors and assigns (individually an "Indemnified
Party" and collectively the "Indemnified Parties"), to the same extent and
in the same manner as is now provided in the certificate of incorporation
or by-laws of Software.com or otherwise in effect at the Effective Time
(pursuant to an indemnification agreement or otherwise), with respect to
any claim, liability, loss, damage, cost or expense (whenever asserted or
claimed) based in whole or in part on, or arising in whole or in part out
of, any matter existing or occurring at or prior to the Effective Time.
Phone shall, or shall cause the Surviving Corporation to, maintain in
effect for not less than six (6) years after the Effective Time the current
policies of directors' and officers' liability insurance maintained by
Software.com on the date hereof (provided that Phone or the Surviving
Corporation may substitute therefor policies having at least the same
coverage and containing terms and conditions which are no less advantageous
to the persons currently covered by such policies as insured) with respect
to matters existing or occurring at or prior to the Effective Time. Without
limiting the foregoing, in the event any Indemnified Party becomes involved
in any capacity in any action, proceeding or investigation based in whole
or in part on, or arising in whole or in part out of, any matter, including
the transactions contemplated hereby, existing or occurring at or prior to
the Effective Time, then, following the Effective Time, to the extent
permitted by law Phone shall, or shall cause the Surviving Corporation to,
periodically advance to such Indemnified Party its legal and other expenses
(including the cost of any investigation and preparation incurred in
connection therewith), subject to the provision by such Indemnified Party
of an undertaking to reimburse the amounts so advanced in the event of a
final determination by a court of competent jurisdiction that such
Indemnified Party is not entitled thereto. Promptly after receipt by an
Indemnified Party of notice of the assertion (an "Assertion") of any claim
or the commencement of any action against him or her in respect to which
indemnity or reimbursement may be sought against Phone, the Surviving
Corporation or a subsidiary of Phone ("Indemnitors") hereunder, such
Indemnified Party shall notify any Indemnitor in writing of the Assertion,
but the failure to so notify any Indemnitor shall not relieve any
Indemnitor of any liability it may have to such Indemnified Party hereunder
except to the extent such failure shall have materially prejudiced
Indemnitor in defending against such Assertion. Indemnitors shall be
entitled to participate in and, to the extent Indemnitors (A) elect by
written notice to such Indemnified Party within thirty (30) days after
receipt by any Indemnitor of notice of such Assertion and (B) acknowledge
in writing their obligation to indemnify the Indemnified Parties in
connection with such Assertion, to assume the defense of such Assertion, at
their own expense, with counsel chosen by Indemnitors and reasonably
satisfactory to such Indemnified Party. Notwithstanding that Indemnitors
shall have elected by such written notice to assume the defense of any
Assertion, such Indemnified Party shall have the right to participate in
the investigation and defense thereof, with separate counsel chosen by such
Indemnified Party, but in such event the fees and expenses of such counsel
shall be paid by such Indemnified Party, unless, in the opinion of such
separate counsel, (i) such Indemnified Party has available to him one or
more defenses to such Assertion that may not be available to the
Indemnitors, (ii) there is otherwise a conflict of interest between the
Indemnified Party, on the one hand, and the Indemnitors, on the other hand,
or (iii) the Indemnitors fail to vigorously pursue the defense of the
asserted claim. No Indemnified Party shall settle any Assertion without the
prior written consent of Phone, nor shall any Indemnitor settle any
Assertion without either (i) the written consent of all Indemnified Parties
against whom such Assertion was made, or (ii) obtaining a general release
from the party making the Assertion for all Indemnified Parties as a
condition of such settlement. The provisions of this Section 5.5 are
intended for the benefit of, and shall be enforceable by, the respective
Indemnified Parties. The provisions of this Section 5.5 are not intended to
constitute insurance. To the extent that any policy of insurance shall
provide all or any part of the indemnity owed to the Indemnified Parties,
or any of them, hereunder, the Indemnitors shall be relieved of their
obligation with regard thereto. No acceptance by an Indemnified Party of
any defense from any third party with respect to an Assertion shall be
deemed to constitute a waiver by such Indemnified Party of its rights under
this Section 5.5 or to receive the full measure of the indemnity provided
for hereby.
SECTION 5.6 Fees and Expenses.
Except as set forth in this Section 5.6 and in Section
7.2, all fees and expenses incurred in connection with the Merger, this
Agreement, the Option Agreements and the transactions contemplated by this
Agreement and the Option Agreements shall be paid by the party incurring
such fees or expenses, whether or not the Merger are consummated, except
that each of Software.com and Phone shall bear and pay one-half of the
costs and expenses (other than the fees and expenses of each party's
attorneys and accountants which shall be paid by the party incurring such
expenses) incurred by Phone, Merger Sub, or Software.com in connection with
(i) the filing, printing and mailing of the Form S-4 and the Joint Proxy
Statement (including SEC filing fees) and (ii) the filings of the premerger
notification and report forms under the HSR Act (including filing fees). In
addition, all transfer taxes incurred by Phone, Merger Sub or Software.com
in connection with the Merger arising on or after the Effective Time shall
be borne by Phone.
SECTION 5.7 Public Announcements.
Software.com and Phone will consult with each other and
agree before issuing, and provide each other the opportunity to review,
comment upon and concur with, and use reasonable efforts to agree on, any
press release with respect to the transactions contemplated by this
Agreement, the Option Agreements, including the Merger, and shall not issue
any such press release prior to such consultation and agreement, except as
either party may determine is required by applicable law, court process or
by obligations pursuant to any listing agreement with any national
securities exchange or stock market. The parties agree that the initial
press release to be issued with respect to the transactions contemplated by
this Agreement shall be in the form heretofore agreed to by the parties.
SECTION 5.8 Affiliates.
(a) On or before the date hereof, Phone shall prepare and
deliver a copy to Software.com of a letter identifying all persons who may
be deemed to be, at the time this Agreement is submitted for approval and
adoption by the stockholders of Phone, "affiliates" of Phone for purposes
of applicable SEC accounting releases with respect to pooling of interests
accounting treatment and such list shall be updated as necessary to reflect
changes from the date hereof. Phone shall use commercially reasonable
efforts to cause each person identified on such list to deliver to Phone on
or before the date hereof, written agreements substantially in the form
attached as Exhibit F hereto, and in the event any other person becomes an
affiliate of Phone thereafter to cause such person to deliver such an
agreement to Phone as soon as practicable but in any event at Closing.
(b) On or before the date hereof, Software.com shall
deliver to Phone a letter identifying all persons who may be deemed to be,
at the time this Agreement is submitted for approval and adoption by the
stockholders of Software.com, "affiliates" of Software.com for purposes of
Rule 145 under the Securities Act and for purposes of applicable SEC
accounting releases with respect to pooling of interests accounting
treatment and such list shall be updated as necessary to reflect changes
from the date hereof. Software.com shall use commercially reasonable
efforts to cause each person identified on such list to deliver to Phone on
or before the date hereof, written agreements substantially in the form
attached as Exhibit E or Exhibit H hereto, as applicable, and in the event
any other person becomes an affiliate of Software.com thereafter to cause
such person to deliver such an agreement to Phone as soon as practicable
but in any event at Closing.
SECTION 5.9 Nasdaq Listing.
Phone shall use commercially reasonable efforts to cause
the Phone Common Stock issuable under Article 2 to be approved for listing
on the Nasdaq National Market, subject to official notice of issuance, as
promptly as practicable after the date hereof, and in any event prior to
the Closing Date.
SECTION 5.10 Tax and Accounting Treatment.
Each of Phone, Software.com and their respective
subsidiaries shall use all reasonable efforts to cause the Merger to
qualify (i) for treatment as a pooling of interests for accounting purposes
and (ii) as a reorganization within the meaning of section 368(a) of the
Code, and to obtain the opinions of counsel referred to in sections 6.2 and
6.3. Neither Phone, nor Software.com, nor their respective subsidiaries,
shall take any action to cause the Merger to fail to qualify (i) for
treatment as a pooling of interests for accounting purposes or (ii) as a
reorganization within the meaning of section 368(a) of the Code.
SECTION 5.11 Post-Merger Operations.
Following the Effective Time, the headquarters of Phone
and its subsidiaries shall be located in Redwood City, California, until
such time as the Board of Directors of Phone otherwise determines.
SECTION 5.12 Conveyance Taxes.
Software.com and Phone shall cooperate in the
preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or
gains, sales, use, transfer, value added, stock transfer and stamp taxes,
any transfer, recording, registration and other fees or any similar taxes
which become payable in connection with the transactions contemplated by
this Agreement that are required or permitted to be filed on or before the
Effective Time.
SECTION 5.13 Employee Benefits.
For a period of one (1) year after the Closing, Phone
covenants that it shall provide all active employees of Software.com and
their dependants and all qualified beneficiaries with coverage under one or
more Phone welfare benefit plans (each, a "Phone Welfare Benefit Plan"),
including without limitation health coverage (collectively, "Coverage"),
which meet the following requirements as of the Effective Time: (A) the
Coverage is comparable in the aggregate to that provided under the
Software.com welfare benefit plans listed in Section 5.13 of the
Software.com Disclosure Schedule (each, a "Software.com Scheduled Welfare
Plan"), (B) service with Software.com prior to the Effective Time shall be
credited against all service and waiting period requirements under the
Phone Welfare Benefit Plans, (C) such Phone Welfare Benefit Plans shall not
provide for any pre-existing condition exclusions other than any such
exclusions existing under the Software.com Scheduled Welfare Plans, and (D)
the deductibles and/or copayments in effect under the Phone Welfare Benefit
Plans shall be credited with any applicable deductibles and/or copayments
paid by such individuals under the Software.com Scheduled Welfare Plans for
the plan year in which the Effective Time occurs.
SECTION 5.14 Consents of Accountants.
Phone and Software.com will each use all reasonable
efforts to cause to be delivered to each other consents from their
respective independent auditors, dated the date on which the Form S-4 shall
become effective, in form reasonably satisfactory to the recipient and
customary in scope and substance for consents delivered by independent
public accountants in connection with registration statements on Form S-4
under the Securities Act.
SECTION 5.15 Phone Board and Officers.
(a) The Board of Directors of Phone shall take all action
necessary so that effective as of the Effective Time, the Board of
Directors of Phone consists of six members, three (3) of whom are members
of the current Phone Board of Directors designated by Phone (the "Phone
Designees") and three (3) of whom are members of the current Software.com
Board of Directors designated by Software.com (the "Software.com
Designees") and that each of the three (3) classes of Phone Directors
includes one Phone Designee and one Software.com Designee.
(b) The Board of Directors of Phone will take all
necessary action to appoint, effective as of the Effective Time, (i) Donald
J. Listwin to the position of President and Chief Executive Officer of
Phone, (ii) Alain Rossmann to the position of Executive Vice President and
Chairman of the Board of Directors of Phone, (iii) John L. MacFarlane to
the position of Executive Vice President of Phone and (iv) Alan S. Black to
the position of Chief Financial Officer of Phone. Phone shall take all
action necessary to elect such additional members of management and
executive officers of Phone as the Board of Directors of Phone may
determine.
SECTION 5.16 Rights Plans.
(a) Phone shall not redeem the Phone Rights, or amend,
modify (other than to delay any "distribution date" therein) or terminate
the Phone Rights Plan prior to the Effective Time unless required to do so
by order of a court of competent jurisdiction.
(b) Software.com shall not redeem the Software.com Rights
or amend, modify (other than to delay any "distribution date" therein) or
terminate the Software.com Rights Plan prior to the Effective Time unless
required to do so by order of a court of competent jurisdiction.
SECTION 5.17 Action by Board of Directors.
Prior to the Effective Time, the board of directors of
each of Phone and Software.com shall comply as applicable with the
provisions of the SEC's no-action letter dated January 12, 1999, addressed
to Skadden, Arps, Slate, Meagher and Flom LLP relating to Rule 16b of the
Exchange Act.
ARTICLE 6.
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to Each Party's Obligation to Effect The
Merger.
The respective obligation of each party to effect the
Merger is subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a) Stockholder Approvals.
Each of the Phone Stockholder Approval and the
Software.com Stockholder Approval shall have been obtained.
(b) HSR Act.
The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
expired.
(c) Governmental and Regulatory Approvals.
Other than the filing of the Certificates of Merger
provided for under Section 1.3 and filings pursuant to the HSR Act (which
are addressed in Section 6.1(b)), all consents, approvals and actions of,
filings with and notices to any Governmental Entity required of Phone,
Software.com or any of their subsidiaries to consummate the Merger and the
other transactions contemplated hereby (together with the matters
contemplated by Section 6.1(b), the "Requisite Regulatory Approvals") shall
have been obtained.
(d) No Injunctions or Restraints.
No judgment, order, decree, statute, law, ordinance, rule
or regulation, entered, enacted, promulgated, enforced or issued by any
court or other Governmental Entity of competent jurisdiction or other legal
restraint or prohibition (collectively, "Restraints") shall be in effect
(i) preventing the consummation of the Merger, or (ii) which otherwise is
reasonably likely to have a material adverse effect on Phone following the
Effective Time or the effective operation of the combined company following
consummation of the Merger.
(e) Form S-4.
The Form S-4 shall have become effective under the
Securities Act prior to the mailing of the Joint Proxy Statement by each of
Phone and Software.com to their respective stockholders and no stop order
or proceedings seeking a stop order shall be threatened by the SEC or shall
have been initiated by the SEC.
(f) Nasdaq Listings.
The shares of Phone Common Stock issuable to the
stockholders of Software.com as contemplated by Article 2 shall have been
approved for listing on the Nasdaq National Market, subject to official
notice of issuance.
SECTION 6.2 Conditions to Obligations of Software.com.
The obligation of Software.com to effect the Merger is
further subject to satisfaction or waiver of the following conditions:
(a) Representations and Warranties.
The representations and warranties of Phone and Merger
Sub set forth herein shall be true and correct both when made and at and as
of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such
date), except where the failure of such representations and warranties
(other than those set forth in Section 3.1(c)) which shall be true and
correct in all material respects to be so true and correct (without giving
effect to any limitation as to "materiality" or "material adverse effect"
set forth therein) does not have, and is not likely to have, individually
or in the aggregate, a "material adverse effect" on Phone.
(b) Performance of Obligations of Phone and Merger Sub.
Each of Phone and Merger Sub shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) No Material Adverse Change.
At any time after the date of this Agreement there shall
not have occurred any material adverse change relating to Phone.
(d) Officer's Certificate.
Software.com shall have received an officer's certificate
duly executed by each of the Chief Executive Officer and Chief Financial
Officer of Phone to the effect that the conditions set forth in Sections
6.2(a), (b) and (c) have been satisfied.
(e) Tax Opinion.
Software.com shall have received an opinion of Wilson,
Sonsini, Goodrich & Rosati, Professional Corporation, in form and substance
reasonably satisfactory to Software.com, dated as of the Effective Time,
substantially to the effect that, on the basis of facts, representations
and assumptions set forth in such opinion, for United States federal income
tax purposes, the Merger will constitute a "reorganization" within the
meaning of section 368(a) of the Code.
In rendering such opinion, Wilson, Sonsini, Goodrich &
Rosati, Professional Corporation may receive and rely upon representations
contained in certificates of Software.com, Phone, Merger Sub and others,
and the parties agree to provide Wilson, Sonsini, Goodrich & Rosati,
Professional Corporation with such certificates as Wilson, Sonsini,
Goodrich & Rosati, Professional Corporation may reasonably request in
connection with rendering its opinion.
SECTION 6.3 Conditions to Obligations of Phone and Merger Sub.
The obligations of Phone and Merger Sub to effect the
Merger are further subject to satisfaction or waiver of the following
conditions:
(a) Representations and Warranties.
The representations and warranties of Software.com set
forth herein shall be true and correct both when made and at and as of the
Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties (other than
those set forth in Section 3.2(c)) which shall be true and correct in all
material respects to be so true and correct (without giving effect to any
limitation as to "materiality," or "material adverse effect" set forth
therein) does not have, and is not likely to have, individually or in the
aggregate, a material adverse effect on Software.com.
(b) Performance of Obligations of Software.com.
Software.com shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) No Material Adverse Change.
At any time after the date of this Agreement there shall
not have occurred any material adverse change relating to Software.com.
(d) Officer's Certificate.
Phone shall have received an officer's certificate duly
executed by each of the Chief Executive Officer and Chief Financial Officer
of Software.com to the effect that the conditions set forth in Sections
6.3(a), (b) and (c) have been satisfied.
(e) Tax Opinion.
Phone shall have received an opinion of Skadden, Arps,
Slate, Meagher & Flom LLP, in form and substance reasonably satisfactory to
Phone, dated as of the Effective Time, substantially to the effect that, on
the basis of facts, representations and assumptions set forth in such
opinion, for United States federal income tax purposes, the Merger will
constitute a "reorganization" within the meaning of section 368(a) of the
Code.
In rendering such opinion, Skadden, Arps, Slate, Meagher
& Flom LLP may receive and rely upon representations contained in
certificates of Phone, Merger Sub, Software.com and others, and the parties
agree to provide Skadden, Arps, Slate, Meagher & Flom LLP with such
certificates as Skadden, Arps, Slate, Meagher & Flom LLP may reasonably
request in connection with rendering its opinion.
ARTICLE 7.
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination.
This Agreement may be terminated at any time prior to the
Effective Time, and (except in the case of 7.1(e) or 7.1(f)) whether before
or after the Phone Stockholder Approval or the Software.com Stockholder
Approval:
(a) by mutual written consent of Software.com and Phone,
if the Board of Directors of each so determines by a vote of a majority of
its entire board;
(b) by either the Board of Directors of Software.com or
the Board of Directors of Phone:
(i) if the Merger shall not have been consummated by
March 31, 2001 (the "Outside Date") unless such termination right has been
expressly restricted in writing by the Board of Directors of Software.com
or Phone, as the case may be; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.1(b)(i) shall not be
available to any party whose failure to perform any of its obligations
under this Agreement results in the failure of the Merger to be consummated
by such time; provided, however, that in the event either Phone or
Software.com has received a request, demand or legal order from a
Governmental Entity with responsibility for administering antitrust,
competition or other similar foreign rules, regulations or laws for
additional documentation or other information, the Outside Date shall be
extended to June 30, 2001;
(ii) if the Phone Stockholder Approval shall not have
been obtained at a Phone Stockholders' Meeting duly convened therefor or at
any adjournment or postponement thereof;
(iii) if the Software.com Stockholder Approval shall not
have been obtained at a Software.com Stockholders' Meeting duly convened
therefor or at any adjournment or postponement thereof;
(iv) if any Restraint having any of the effects set
forth in Section 6.1(d) shall be in effect and shall have become final and
nonappealable, or if any Governmental Entity that must grant a Requisite
Regulatory Approval has denied approval of the Merger and such denial has
become final and nonappealable;
(c) by the Board of Directors of Software.com if either
of Phone or Merger Sub shall have breached or failed to perform any of its
representations, warranties, covenants or other agreements contained in
this Agreement, which breach or failure to perform (A) would give rise to
the failure of a condition set forth in Section 6.2(a) or (b), and (B) is
incapable of being cured by Phone or is not cured within fifteen (15)
business days of written notice thereof;
(d) by the Board of Directors of Phone, if Software.com
shall have breached or failed to perform in any material respect any of its
representations, warranties, covenants or other agreements contained in
this Agreement, which breach or failure to perform (A) would give rise to
the failure of a condition set forth in Section 6.3(a) or (b), and (B) is
incapable of being cured by Software.com or is not cured within fifteen
(15) business days of written notice thereof;
(e) by the Board of Directors of Software.com, at any
time prior to the Phone Stockholders' Meeting, if (i) the Phone Board of
Directors shall have (A) failed to include in the Joint Proxy Statement to
the stockholders of Phone, its recommendation without modification or
qualification that such stockholders approve the issuance of Phone Common
Stock in the Merger and the Charter Amendment, (B) subsequently withdrawn
such recommendation, (C) modified or qualified such recommendation in a
manner adverse to the interests of Software.com or (D) failed to reconfirm
such recommendation within ten (10) business days of receipt of a written
request from Software.com to do so or (ii) Phone shall have materially
breached the provisions of Section 4.2 of this Agreement;
(f) by the Board of Directors of Phone, at any time prior
to the Software.com Stockholders' Meeting, if (i) the Software.com Board of
Directors shall have (A) failed to include in the Joint Proxy Statement to
the stockholders of Software.com, its recommendation without modification
or qualification that such stockholders approve this Agreement and the
transaction contemplated hereby, or (B) subsequently withdrawn such
recommendation, or (C) modified or qualified such recommendation in a
manner adverse to the interests of Phone, or (D) failed to reconfirm such
recommendation within ten (10) business days of receipt of a written
request from Phone to do so or (ii) Software.com shall have materially
breached the provisions of Section 4.3 of this Agreement.
SECTION 7.2 Effect of Termination.
(a) In the event of termination of this Agreement as
provided in Section 7.1 hereof, and subject to the provisions of Section
8.1 hereof, this Agreement shall forthwith become void and there shall be
no liability on the part of any of the parties, except (i) as set forth in
this Section 7.2 and in Sections 5.3, 5.6, 3.1(n) and 3.2(n) hereof, and
(ii) nothing herein shall relieve any party from liability for any willful
breach hereof.
(b) (1) If this Agreement is terminated by Software.com
or Phone pursuant to Section 7.1(b)(ii) hereof because of the failure to
obtain the required approval from the Phone stockholders and at the time of
such termination or prior to the meeting of Phone's stockholders there
shall have been a publicly-announced and not irrevocably and
unconditionally withdrawn offer or proposal for, or any agreement with
respect to, a transaction that would constitute an Alternative Transaction
(as defined in Section 4.2(a) hereof, except that for purposes of this
Section 7.2(b), the applicable percentage of clause (i) of such definition
shall be fifty percent (50%)) involving Phone or any of the Phone
subsidiaries (whether or not such offer, proposal, announcement or
agreement shall have been rejected prior to the time of such termination or
of the meeting), Phone shall pay to Software.com an amount equal to
Software.com's actual out-of-pocket fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
(the "Software.com Expenses").
(2) If, within twelve (12) months following a termination
contemplated by (1) above, (x) Phone consummates an Alternative Transaction
or (y) Phone enters into an agreement or binding letter of intent providing
for an Alternative Transaction, then Phone shall pay to Software.com a
termination fee equal to One Hundred Ninety-Five Million Dollars
($195,000,000.00) (the "Termination Fee") minus the Software.com Expenses
already paid pursuant to (1) above.
(3) If this Agreement is terminated (i) by Software.com
as a result of Phone's material breach of Section 4.2 or Section 5.1
hereof, which in the case of Section 5.1 only, is not cured within thirty
(30) days after notice thereof to Phone, or (ii) by Software.com pursuant
to Section 7.1(e) hereof, Phone shall pay to Software.com an amount equal
to the Termination Fee.
(c) (1) If this Agreement is terminated by Software.com
or Phone pursuant to Section 7.1(b)(iii) hereof because of the failure to
obtain the required approval from the Software.com stockholders and at the
time of such termination or prior to the meeting of Software.com's
stockholders there shall have been a publicly-announced and not irrevocably
and unconditionally withdrawn offer or proposal for, or any agreement with
respect to, a transaction that would constitute an Alternative Transaction
(as defined in Section 4.2(a) hereof, except that for purposes of this
Section 7.2(c), the applicable percentage of clause (i) of such definition
shall be fifty percent (50%)) involving Software.com or any of the
Software.com subsidiaries (whether or not such offer, proposal,
announcement or agreement shall have been rejected prior to the time of
such termination or of the meeting), Software.com shall pay to Phone an
amount equal to Phone's actual out-of-pocket fees, costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby (the "Phone Expenses").
(2) If, within twelve (12) months following a termination
contemplated by (1) above, (x) Software.com consummates an Alternative
Transaction or (y) Software.com enters into an agreement or binding letter
of intent providing for an Alternative Transaction, then Software.com shall
pay to Phone a termination fee equal to the Termination Fee minus the Phone
Expenses already paid pursuant to (1) above.
(3) If this Agreement is terminated (i) by Phone as a
result of Software.com's material breach of Section 4.3 or Section 5.1
hereof, which in the case of Section 5.1 only, is not cured within thirty
(30) days after notice thereof to Software.com, or (ii) by Phone pursuant
to Section 7.1(f) hereof, Software.com shall pay to Phone an amount equal
to the Termination Fee.
(d) Each payment of Software.com Expenses, Phone Expenses
or the Termination Fee payable under Sections 7.2(b)(1) , 7.2(b)(2), 7.2
(c)(1) or 7.2(c)(2) above shall be payable in cash, payable no later than
one (1) business day following the delivery of notice of termination to the
other party.
(e) Each Termination Fee payable under Section 7.2(b)(3)
shall be payable in cash and shares of Phone Common Stock, in such
combination as Phone may elect (provided that the cash component must be at
least Forty Million Dollars ($40,000,000.00)) with an aggregate value (for
all purposes of this Section 7.2(e), such shares of Phone Common Stock
shall be valued at a price per share equal to the average closing price per
share of Phone Common Stock for the five (5) most recent trading days that
Phone Common Stock has traded ending on the trading day immediately prior
to the termination date, as reported on the Nasdaq National Market) equal
to the Termination Fee, payable no later than three (3) business days
following the delivery of notice of termination to the other party. If
Phone satisfies its obligation to pay the Termination Fee in part by
issuing shares of Phone Common Stock (the "Phone Termination Fee Shares"),
then Software.com shall be entitled to registration rights with respect to
such shares as described in the Phone Stock Option Agreement (treating
Phone Termination Fee Shares for all purposes of Section 7 of the Phone
Stock Option Agreement as if they were Option Shares (as defined in the
Phone Stock Option Agreement)).
(f) Each termination fee payable under Section 7.2(c)(3)
shall be paid in cash and shares of Software.com Common Stock, in such
combination as Software.com may elect (provided that the cash component
must be at least Forty Million Dollars ($40,000,000.00)) with an aggregate
value (for all purposes of this Section 7.2(e), such shares of Software.com
Common Stock to be valued at a price per share equal to the average closing
price per share of Software.com Common Stock for the five (5) most recent
trading days that Software.com Common Stock has traded ending on the
trading day immediately prior to the termination date, as reported on the
Nasdaq National Market) equal to the Termination Fee, payable no later than
three (3) business days following the delivery of notice of termination to
the other party. If Software.com satisfies its obligation to pay the
Termination Fee in part by issuing shares of Software.com Common Stock (the
"Software.com Termination Fee Shares"), then Phone shall be entitled to
registration rights with respect to such shares as described in the
Software.com Stock Option Agreement (treating Software.com Termination Fee
Shares for all purposes of Section 7 of the Software.com Stock Option
Agreement as if they were Option Shares (as defined in the Software.com
Stock Option Agreement)).
(g) Software.com and Phone agree that the agreements
contained in Sections 7.2(b) and (c) above are an integral part of the
transaction contemplated by this Agreement and constitute liquidated
damages and not a penalty. If one party fails to promptly pay to the other
any fee due under such Sections 7.2(b) and (c), the defaulting party shall
pay the costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or other
legal action, taken to collect payment.
SECTION 7.3 Amendment.
Subject to compliance with applicable law, this Agreement
may be amended by the parties at any time before or after the Phone
Stockholder Approval or the Software.com Stockholder Approval; provided,
however, that after any such approval, there may not be, without further
approval of such the stockholders of Phone (in the case of the Phone
Stockholder Approval) and the stockholders of Software.com (in the case of
the Software.com Stockholder Approval), any amendment of this Agreement
that changes the amount or the form of the consideration to be delivered to
the holders of Software.com Common Stock hereunder, or which by law
otherwise expressly requires the further approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto and duly approved by the parties'
respective Boards of Directors or a duly designated committee thereof.
SECTION 7.4 Extension; Waiver.
At any time prior to the Effective Time, a party may,
subject to the proviso of Section 7.3 (and for this purpose treating any
waiver referred to below as an amendment), (a) extend the time for the
performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties of the
other parties contained in this Agreement or in any document delivered
pursuant to this Agreement or (c) waive compliance by the other party with
any of the agreements or conditions contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of
such party. Any extension or waiver given in compliance with this Section
7.4 or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
ARTICLE 8.
GENERAL PROVISIONS
SECTION 8.1 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time. This Section 8.1 shall not limit any covenant
or agreement of the parties which by its terms contemplates performance
after the Effective Time.
SECTION 8.2 Notices.
All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied or faxed (which is confirmed) or
sent by overnight courier (providing proof of delivery) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Software.com to:
Software.com, Inc.
525 Anacapa Street
Santa Barbara, CA 93101
Attention: General Counsel
Facsimile: (805) 957-1532
with copies to:
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
Attention: Elizabeth R. Flint, Esq.
Facsimile: (650) 493-6811
and to:
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
Spear Street Tower, Suite 3300
One Market Plaza
San Francisco, CA 94105
Attention: Steve L. Camahort, Esq.
Facsimile: (415) 947-2099
(b) if to Phone or Merger Sub, to it at:
Phone.com, Inc.
800 Chesapeake Drive
Redwood City, CA 94063
Attention: General Counsel
Facsimile: (650) 817-7190
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 220
Palo Alto, CA 94301
Attention: Kenton J. King, Esq.
Facsimile: (650) 470-4570
SECTION 8.3 Definitions.
For purposes of this Agreement:
(a) An "affiliate" of any person means another person
that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person, where
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a person,
whether through the ownership of voting securities, by contract, as trustee
or executor, or otherwise;
(b) "material adverse change" or "material adverse
effect" means, when used in connection with Phone or Software.com, any
change, effect, event, occurrence or state of facts that is or could
reasonably be expected to be materially adverse to the business, financial
condition or results of operations of such party and its subsidiaries taken
as a whole, it being understood that none of the following shall be deemed
by itself or by themselves, either alone or in combination, to constitute a
material adverse effect: (i) a change in the market price or trading volume
of Software.com Common Stock or Phone Common Stock, as the case may be or
(ii) conditions affecting the U.S. economy as a whole;
(c) "person" means an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity;
(d) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority
of its Board of Directors or other governing body (or, if there are no such
voting interests, fifty percent (50%) or more of the equity interests of
which) is owned directly or indirectly by such first person; and
(e) "knowledge" of any person which is not an individual
means the knowledge of such person's executive officers or senior
management of such person's operating divisions and segments.
SECTION 8.4 Interpretation.
When a reference is made in this Agreement to an Article,
Section or Exhibit, such reference shall be to an Article or Section of, or
an Exhibit to, this Agreement unless otherwise indicated. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in this Agreement
shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
SECTION 8.5 Counterparts.
This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
SECTION 8.6 Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments
referred to herein), the Option Agreements, the Voting Agreements and the
Confidentiality Agreement (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement and
(b) except for the provisions of Section 5.5, are not intended to confer
upon any person other than the parties any rights or remedies.
SECTION 8.7 Governing Law.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflict of laws
thereof.
SECTION 8.8 Assignment.
Neither this Agreement nor any of the rights, interests
or obligations under this Agreement shall be assigned, in whole or in part,
by operation of law or otherwise by either of the parties hereto without
the prior written consent of the other party. Any assignment in violation
of the preceding sentence shall be void. Subject to the preceding two
sentences, this Agreement will be binding upon, inure to the benefit of,
and be enforceable by, the parties and their respective successors and
assigns.
SECTION 8.9 Consent to Jurisdiction.
Each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of any federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of
this Agreement or any of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and
(c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other
than a federal court sitting in the State of Delaware or a Delaware state
court.
SECTION 8.10 Headings, etc.
The headings and table of contents contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 8.11 Severability.
If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect, insofar as the foregoing can
be accomplished without materially affecting the economic benefits
anticipated by the parties to this Agreement. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled
to the extent possible.
IN WITNESS WHEREOF, Software.com, Phone.com and Merger
Sub have caused this Agreement to be signed by their respective officers
thereunto duly authorized, all as of the date first written above.
SOFTWARE.COM, INC.
By: /s/ John L. MacFarlane
______________________________________
Name: John L. MacFarlane
Title: CEO
PHONE.COM, INC.
By: /s/ Alain Rossmann
_____________________________________
Name: Alain Rossmann
Title: Chief Executive Officer
SILVER MERGER SUB INC.
By: /s/ Kennen J. Hagen
_____________________________________
Name: Kennen J. Hagen
Title: VP - Corp. Development
EXHIBIT A
STOCK OPTION AGREEMENT
(PHONE.COM, INC. SHARES)
STOCK OPTION AGREEMENT
(PHONE.COM, INC. SHARES)
THIS STOCK OPTION AGREEMENT (this "AGREEMENT"), dated August 8,
2000, between Phone.com, Inc., a Delaware corporation ("Issuer"), and
Software.com, Inc., a Delaware corporation ("Grantee").
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and
Plan of Merger, dated as of August 8, 2000 (the "Merger Agreement"), which
provides, among other things, for the merger of Merger Sub with and into
Grantee with Grantee continuing as the surviving corporation upon the terms
and subject to the conditions set forth in the Merger Agreement
(capitalized terms used herein without definition shall have the respective
meanings specified in the Merger Agreement); and
WHEREAS, as a condition to Grantee's entering into the Merger
Agreement and in consideration therefor, Issuer has agreed to grant Grantee
the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. GRANT OF OPTION. Issuer hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to
purchase, subject to the terms hereof, sixteen million
five hundred sixteen thousand four hundred ninety-five
(16,516,497) shares of fully paid and nonassessable
common stock of the Issuer, par value $.001 per share
("Common Stock"), equal to and in no event exceeding
nineteen and nine-tenths percent (19.9%) of the shares of
Common Stock outstanding as of July 31, 2000 the date
hereof, at a purchase price of $78.0625 per share of
Common Stock as adjusted in accordance with the
provisions of Section 6 of this Agreement (such price, as
adjusted if applicable, the "Option Price").
2. EXERCISE OF OPTION.
(a) Grantee may exercise the Option, in whole or part, and from
time to time, if, but only if, a Triggering Event (as hereinafter defined)
shall have occurred prior to the occurrence of an Option Termination Event
(as hereinafter defined), provided that Grantee shall have sent the written
notice of such exercise (as provided in subsection (e) of this Section 2)
on or prior to the last date of the six (6)-month period following such
Triggering Event (the "Option Expiration Date").
(b) The term "Option Termination Event" shall mean the first
day after the earliest to occur of the following dates: (i) the date on
which the Effective Time of the Merger occurs; (ii) the last date of the
twelve (12) month period beginning on the date of termination of the Merger
Agreement pursuant to Section 7.1(b)(ii); provided, that such termination
has given rise to the right of Grantee to receive payment of Software.com
Expenses pursuant to Section 7.2(b)(1) of the Merger Agreement; provided,
that subsequent to such termination, if an event occurs that gives rise to
the obligation of Issuer to pay the Termination Fee pursuant to Section
7.2(b)(2) of the Merger Agreement, then the last date of the six (6) month
period beginning on the date of actual payment of the Termination Fee by
Issuer to Grantee pursuant to Section 7.2(b)(2) of the Merger Agreement;
(iii) the date of termination of the Merger Agreement by either party
pursuant to the provisions of any section of the Merger Agreement other
than Sections 7.1(b)(ii) (other than as provided in clause (ii) above);
provided, that such termination occurs prior to the occurrence of a
Triggering Event; and (iv) the last date of the six (6) month period
beginning on the date of the first occurrence of a Triggering Event;
provided, however, that if the Option cannot be exercised as of any such
date by reason of any applicable judgment, decree, law, regulation or order
(each, an "Impediment"), or by reason of the waiting period under the HSR
Act, then the Option Termination Event shall be delayed until the date
which is thirty (30) days after such Impediment has been removed or such
waiting period has expired.
(c) TRIGGERING EVENT. The term "Triggering Event" shall mean
any termination of the Merger Agreement which entitles Grantee to receive
payment of the Termination Fee from Issuer pursuant to Section 7.2 of the
Merger Agreement.
(d) NOTICE OF TRIGGERING EVENT. Issuer shall notify Grantee
promptly in writing of the occurrence of any Triggering Event, and in any
event within twenty-four (24) hours, it being understood that the giving of
such notice by Issuer shall not be a condition to the right of Grantee to
exercise the Option or for a Triggering Event to have occurred.
(e) NOTICE OF EXERCISE; CLOSING. In the event Grantee is
entitled to and wishes to exercise the Option, it shall send to Issuer a
written notice (the date of which being herein referred to as the "Notice
Date") specifying (i) the total number of shares it will purchase pursuant
to such exercise and (ii) a place and date which shall be a business day
not earlier than three (3) business days nor later than sixty (60) business
days from the Notice Date for the closing of such purchase (the "Closing
Date"); provided, that if the closing of the purchase and sale pursuant to
the Option (the "Closing") cannot be consummated, in the reasonable opinion
of Grantee, by reason of any applicable judgment, decree, order, law or
regulation, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated; and provided further, without
limiting the foregoing, that if, in the reasonable opinion of Grantee,
prior notification to or approval of any regulatory agency is required in
connection with such purchase, Grantee shall promptly file the required
notice or application for approval and shall expeditiously process the same
and the period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which any required notification periods
have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. Any exercise of
the Option shall be deemed to occur on the Closing Date relating thereto.
(f) PURCHASE PRICE. At the Closing referred to in subsection
(e) of this Section 2, Grantee shall pay to Issuer the aggregate purchase
price for the shares of Common Stock purchased pursuant to the exercise of
the Option in immediately available funds by wire transfer to a bank
account designated by Issuer, provided that failure or refusal of Issuer to
designate such a bank account shall not preclude Grantee from exercising
the Option.
(g) ISSUANCE OF COMMON STOCK. At such Closing, simultaneously
with the delivery of immediately available funds as provided in subsection
(f) of this Section 2, Issuer shall deliver to Grantee a certificate or
certificates representing the number of shares of Common Stock purchased by
the Grantee and, if the Option should be exercised in part only, a new
Option evidencing the rights of Grantee thereof to purchase the balance of
the shares purchasable hereunder, and the Grantee shall deliver to Issuer
this Agreement and a letter agreeing that Grantee will not offer to sell or
otherwise dispose of such shares in violation of applicable law or the
provisions of this Agreement.
(h) LEGEND. Certificates for Common Stock delivered at a
Closing hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"THE TRANSFER AND VOTING OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO CERTAIN PROVISIONS OF AN AGREEMENT
BETWEEN THE REGISTERED HOLDER HEREOF AND ISSUER AND TO RESALE
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF ISSUER AND WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY ISSUER OF A WRITTEN REQUEST
THEREFOR."
It is understood and agreed that: (i) the reference to the
resale restrictions of the Securities Act of 1933, as amended (the
"Securities Act"), in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel, in form and substance reasonably satisfactory to
Issuer, to the effect that such legend is not required for purposes of the
Securities Act; (ii) the reference to the provisions of this Agreement in
the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in
compliance with the provisions of this Agreement and under circumstances
that do not require the retention of such reference; and (iii) the legend
shall be removed in its entirety if the conditions in the preceding clauses
(i) and (ii) and both satisfied. In addition, such certificates shall bear
any other legend as may be required by law.
(i) RECORD HOLDER; EXPENSES. Upon the Closing, Grantee shall be
deemed to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of Issuer
shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to Grantee or the Issuer
shall have failed or refused to designate the bank account described in
subsection (f) of this Section 2. Issuer shall pay all expenses, and any
and all United States federal, state and local taxes and other charges that
may be payable in connection with the preparation, issuance and delivery of
stock certificates under this Section 2 in the name of Grantee or its
assignee, transferee or designee.
3. CONDITIONS TO DELIVERY OF OPTION SHARES. The obligation
of Issuer to deliver Option Shares upon any exercise of
the Option is subject to the satisfaction of the
following conditions:
(a) All waiting periods, if any, under the HSR Act applicable
to the issuance of Option Shares hereunder shall have expired or been
terminated; and
(b) There shall be no preliminary or permanent injunction or
other order issued by any court of competent jurisdiction preventing or
prohibiting such exercise of the Option or the delivery of the Option
Shares in respect of such exercise.
4. RESERVATION OF SHARES. Issuer agrees: (i) that it shall
at all times maintain, free from preemptive rights,
sufficient authorized but unissued or treasury shares of
Common Stock (and other securities issuable pursuant to
Section 6) so that the Option may be exercised without
additional authorization of Common Stock (or such other
securities) after giving effect to all other options,
warrants, convertible securities and other rights to
purchase Common Stock (or such other securities); (ii)
that it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act avoid or
seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or
performed hereunder by Issuer; (iii) promptly to take all
action as may from time to time be required (including
without limitation complying with all premerger
notification, reporting and waiting periods in the HSR
Act and the rules and regulations thereunder) in order to
permit Grantee to exercise the Option and the Issuer duly
and effectively to issue shares of Common Stock pursuant
hereto; and (iv) promptly to take all action provided
herein to protect the rights of Grantee against dilution.
5. LOST OPTIONS. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will
execute and deliver a new Agreement of like tenor and
date.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The number of
shares of Common Stock purchasable upon the exercise of
the Option shall be subject to adjustment from time to
time as provided in this Section 6.
(a) In the event that any additional shares of Common Stock are
issued or otherwise become outstanding after the date hereof (other than by
reason of subsection (b) of this Section 6), the number of shares of Common
Stock subject to the Option shall be increased so that, after such issuance
of additional shares, such number of shares then remaining subject to the
Option, together with shares theretofore issued pursuant to the Option,
equals nineteen and nine-tenths percent (19.9%) of the number of such
shares of Common Stock then issued and outstanding.
(b) In the event of any change in Common Stock by reason of
stock dividends, other dividends on the Common Stock payable in securities
or other property (other than regular cash dividends), stock splits,
merger, recapitalization, combinations, subdivisions, conversions,
exchanges of shares or other similar transactions, then the type and number
of shares of Common Stock purchasable upon exercise hereof shall be
appropriately adjusted, and proper provision will be made in the agreements
governing such transaction so that Grantee shall receive upon exercise of
the Option and payment of the aggregate Option Price hereunder the number
and class of shares or other securities or property that Grantee would have
received in respect of Common Stock if the Option had been exercised in
full immediately prior to such event, or the record date therefor, as
applicable.
(c) Whenever the number of shares of outstanding Common Stock
changes after the date hereof as a result of the events described in clause
(b) hereof (but not the events described in clause (a) hereof), the Option
Price shall be adjusted by multiplying the Option Price by a fraction the
numerator of which shall be equal to the aggregate number of shares of
Common Stock purchasable prior to the adjustment and the denominator of
which shall be equal to the aggregate number of shares of Common Stock
purchasable immediately after the adjustment.
(d) No adjustment made in accordance with this Section 6 shall
constitute or be deemed a waiver of any breach of any of Issuer's
representations, warranties, covenants, agreements or obligations contained
in the Merger Agreement.
(e) If the Issuer satisfies a portion of its obligation to pay
Grantee a termination fee as permitted by Section 7.2 of the Merger
Agreement by issuing to Grantee shares of Common Stock (the "Termination
Fee Shares"), then the number of shares of Common Stock subject to the
Option (including those Option Shares which may have already been
exercised) will be adjusted so that the sum of the number of shares of
Common Stock subject to the Option and the number of Termination Fee Shares
equals nineteen and nine-tenths percent (19.9%) of the number of shares of
Common Stock then issued and outstanding, without giving effect to any
Option Shares or Termination Fee Shares.
7. REGISTRATION RIGHTS.
(a) As used in this Agreement, "Registrable Securities" means
each of the Option Shares issued to Grantee hereunder and any other
securities issued in exchange for, or issued as dividends or otherwise on
or in respect of, any of such Option Shares.
(b) At any time or from time to time within three (3) years of
the first Closing, Grantee may make a written request to Issuer for
registration under and in accordance with the provisions of the Securities
Act with respect to all or any part of the Registrable Securities (a
"Demand Registration"). A Demand Registration may be, at the option of
Grantee, a shelf registration or a registration involving an underwritten
offering. As soon as reasonably practicable after Grantee's request for a
Demand Registration, Issuer shall file one or more registration statements
on any appropriate form with respect to all of the Registrable Securities
requested to be so registered; provided that Issuer will not be required to
file any such registration statement during any period of time (not to
exceed sixty (60) days after such request in the case of clause (i) below
or ninety (90) days in the case of clauses (ii) or (iii) below) when (i)
Issuer is in possession of material non-public information which it
reasonably believes would be detrimental to be disclosed at such time, (ii)
Issuer is required under the Securities Act to include audited financial
statements for any period in such registration statement that are not yet
available for inclusion therein, or (iii) Issuer determines, in its
reasonable judgment, that such registration would interfere with any
financing, acquisition or other material transaction involving Issuer or
any of its affiliates. Issuer shall use its best efforts to have the Demand
Registration declared effective as soon as reasonably practicable after
such filing and to keep the Demand Registration continuously effective for
a period of at least sixty (60) days following the date on which the Demand
Registration is declared effective, in the case of an underwritten
offering, or at least one hundred twenty (120) days following the date on
which the Demand Registration is declared effective, in the case of a shelf
registration; provided that, if for any reason the effectiveness of any
Demand Registration is suspended, the required period of effectiveness
shall be extended by the aggregate number of days of each such suspension;
and provided, further, that the effectiveness of any Demand Registration
may be terminated if and when all of the Registrable Securities covered
thereby shall have been sold. Grantee shall be entitled to two (2) Demand
Registrations: provided, that only requests relating to a registration
statement that has become effective under the Securities Act shall be
counted for purposes of determining the number of Demand Registrations
made. If any Demand Registration involves an underwritten offering, (i)
Issuer shall have the right to select the managing underwriter, which shall
be reasonably acceptable to Grantee and (ii) Issuer shall enter into an
underwriting agreement in customary form.
(c) If at any time within two (2) years of the first Closing,
Issuer proposes to file a registration statement under the Securities Act
with respect to any shares of any class of its equity securities to be sold
for the account of Issuer (other than a registration statement on Form S-4
or Form S-8 or any successor form), and the registration form to be used
may be used for the registration of Registrable Securities, then Issuer
shall in each case give written notice of such proposed filing to Grantee
at least twenty (20) days before the anticipated filing date, and Grantee
shall have the right to include in such registration such number of
Registrable Securities as Grantee may request (such request to be made by
written notice to Issuer within fifteen (15) days following Grantee's
receipt from Issuer of such notice of proposed filing) (an "Incidental
Registration"). Issuer shall use its commercially reasonable efforts to
cause the managing underwriter of any proposed underwritten offering to
permit Grantee to include in such offering all Registrable Securities
requested by Grantee to be included in the registration for such offering
on the same terms and conditions as any similar securities of Issuer
included therein. Notwithstanding the foregoing, if the managing
underwriter of such offering advises Grantee that, in the reasonable
opinion of such underwriter, the amount of Registrable Securities which
Grantee requests to be included in such offering would materially and
adversely affect the success of such offering, then the amount of
Registrable Securities to be offered shall be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such underwriter; provided that if
the amount of Registrable Securities shall be so reduced, Issuer shall
include in such offering (i) first all shares proposed to be included
therein by the Issuer and (ii) second the shares requested to be included
therein by Grantee pro rata with the shares intended to be included therein
by any other stockholder of the Issuer. Participation by Grantee in any
Incidental registration shall not affect the obligation of the Company to
effect Demand Registrations under this Section 4.1. The issuer may withdraw
any registration under the Securities Act that gives rise to an Incidental
Registration without consent of Grantee.
(d) In the event that Registrable Securities are included in a
"piggyback" registration statement pursuant to Section 7(c) hereof, Grantee
agrees not to effect any public sale or distribution of the issue being
registered or a similar security of Issuer, or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 under the Securities Act, during the ten (10) business
days prior to, and during the ninety (90)-day period beginning on, the
effective date of such registration statement (except as part of such
registration), if and to the extent timely notified in writing by Issuer,
in the case of a non-underwritten public offering, or by the managing
underwriter, in the case of an underwritten public offering. In the event
that Grantee requests a Demand Registration or if Registrable Securities
are included in a "piggyback" registration pursuant to Section 7(c) hereof,
Issuer agrees not to effect any public sale or distribution of the issue
being registered or a similar security of Issuer, or any securities
convertible into or exchangeable or exercisable for such securities, during
the period from such request until ninety (90) days after the effective
date of such registration statement (except as part of such registration or
pursuant to a registration of securities on Form S-4 or Form S-8 or any
successor form).
(e) Notwithstanding anything to the contrary contained herein,
in the event that Grantee requests a Demand Registration or a "piggyback"
registration of Registrable Securities pursuant to Section 7(b) or 7(c)
hereof, respectively, Issuer shall have the right to purchase all, but not
less than all, of the Registrable Securities requested to be so registered,
upon the terms and subject to the conditions set forth in this Section
7(e). If Issuer wishes to exercise such purchase right, then within two (2)
business days following receipt of a request for a Demand Registration or a
"piggyback" registration, Issuer shall send a written notice (a "Repurchase
Notice") to Grantee specifying that Issuer wishes to exercise such purchase
right, a date for the closing of such purchase, which shall not be more
than five (5) business days after delivery of such Repurchase Notice, and a
place for the closing of such purchase (a "Repurchase Closing"). Upon
delivery of a Repurchase Notice subject to applicable Delaware law, a
binding agreement shall be deemed to exist between Grantee and Issuer
providing for the purchase by Issuer of the Registrable Securities
requested to be registered by Grantee, upon the terms and subject to the
conditions set forth in this Section 7(e). The purchase price per share or
other unit of Registrable Securities (the "Repurchase Price") shall equal
the average per share or per unit closing price as quoted on the Nasdaq (or
if not then quoted thereon, on such other exchange or quotation system on
which the Registrable Securities are quoted) for the period of five (5)
trading days ending on the trading day immediately prior to the day on
which Grantee requests a Demand Registration or a "piggyback" registration
of the Registrable Securities which Issuer subsequently elects to purchase.
Grantee's obligation to deliver any Registrable Securities at a Repurchase
Closing shall be subject to the condition that, at such Repurchase Closing,
Issuer shall have delivered to Grantee a certificate signed on behalf of
Issuer by Issuer's chief executive officer and chief financial officer,
which certificate shall be satisfactory in form and substance to Grantee,
to the effect that the purchase by Issuer of such Registrable Securities
(i) is permitted under applicable Delaware corporate law and under the
fraudulent conveyance provisions of the federal bankruptcy code and (ii)
does not violate any material agreement to which Issuer or any of its
subsidiaries is a party or by which any of their properties or assets is
bound. At any Repurchase Closing, Issuer shall pay to Grantee the aggregate
Repurchase Price for the Registrable Securities being purchased by wire
transfer of immediately available funds or by delivering to Grantee a
certified or bank check payable to or on the order of Grantee in an amount
equal to such aggregate Repurchase Price, and Grantee will surrender to
Issuer a certificate or certificates evidencing such Registrable
Securities. A purchase of Registrable Securities by Issuer pursuant to this
Section 7(e) shall be considered a Demand Registration for purposes of
Section 7(b) hereof.
(f) The registrations effected under this Section 7 shall be
effected at Issuer's expense except for underwriting commissions allocable
to the Registrable Securities. Issuer shall indemnify and hold harmless
Grantee, its affiliates and controlling persons and their respective
officers, directors, agents and representatives from and against any and
all losses, claims, damages, liabilities and expenses (including, without
limitation, all out-of-pocket expenses, investigation expenses, expenses
incurred with respect to any judgment and fees and disbursements of counsel
and accountants) arising out of or based upon any statements contained in,
or omissions or alleged omissions from, each registration statement (and
related prospectus) filed pursuant to this Section 7; provided, however,
that Issuer shall not be liable in any such case to Grantee or any
affiliate or controlling person of Grantee or any of their respective
officers, directors, agents or representatives to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or omission
or alleged omission made in such registration statement or prospectus in
reliance upon, and in conformity with, written information furnished to
Issuer specifically for use in the preparation thereof by Grantee such
affiliate, controlling person, officer, director, agent or representative,
as the case may be.
8. REPURCHASE OF OPTION AND OPTION SHARES.
(a) At the request of and upon notice by Grantee (the "Put
Notice") at any time during the period during which the Option is
exercisable pursuant to Section 2 (the "Purchase Period"), the Issuer (or
any successor entity thereof) will purchase from Grantee all or any portion
of the Option, to the extent not previously exercised, at the price set
forth in subparagraph (i) below, and all or any portion of the Option
Shares, if any, acquired by Grantee pursuant thereto, at the price set
forth in subparagraph (ii) below:
(i) the difference between the "Market/Tender Offer Price"
for the Common Stock as of the date Grantee gives notice of its intent to
exercise its rights under this Section 7(a) (defined as the higher of (A)
the highest price per share offered as of such date pursuant to any
Acquisition Proposal which was made prior to such date and (B) the average
closing sale price of Common Stock then on the Nasdaq National Market
during the five (5) trading days ending on the trading day immediately
preceding such date) and the Exercise Price, multiplied by the number of
Common Stock purchasable pursuant to the Option, but only if the
Market/Tender Offer Price is greater than the Exercise Price. For purposes
of determining the highest price offered pursuant to any Acquisition
Proposal which involves consideration other than cash, the value of such
consideration will be equal to the higher of (x) if securities of the same
class of the proponent as such considerations are traded on any national
securities exchange or by any registered securities association, a value
based on the closing sale price or asked price for such securities on their
principal trading market on such date and (y) the value ascribed to such
consideration by the proponent of such Acquisition Proposal, or if no such
value is ascribed, a value determined in good faith by the Board of
Directors of the Issuer.
(ii) The Market/Tender Offer Price multiplied by the
number of shares of Common Stock so purchased.
9. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. Issuer
hereby represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Issuer and no other corporate
proceedings on the part of Issuer are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been
duly and validly executed and delivered by Issuer. This Agreement is the
valid and legally binding obligation of Issuer, enforceable against Issuer
in accordance with its terms.
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof through the termination of this Agreement in accordance with
its terms will have reserved for issuance upon the exercise of the Option,
that number of shares of Common Stock equal to the maximum number of shares
of Common Stock at any time and from time to time issuable hereunder, and
all such shares, upon issuance pursuant hereto, will be duly authorized,
validly issued, fully paid, nonassessable, and will be delivered free and
clear of all claims, liens, encumbrance and security interests and not
subject to any preemptive rights.
(c) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not (i)
conflict with, or result in any violation or breach of any provision of the
Certificate of Incorporation, as amended to date, or Bylaws, as amended to
date, of Issuer, (ii) result in any violation or breach of, or constitute
(with or without notice or lapse of time, or both) a default (or give rise
to a right of termination, cancellation or acceleration of any obligation
or loss of any benefit) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, contract or other agreement,
instrument or obligation to which the Issuer or any of its Subsidiaries is
a party or by which any of them or any of their properties or assets may be
bound, or (iii) conflict or violate any permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Issuer or any of its Subsidiaries or any of its or
their properties or assets, except in the case of (ii) and (iii) for any
such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which could not, individually or in the
aggregate, have a material adverse effect (as defined in the Merger
Agreement) on Issuer and its Subsidiaries, taken as a whole, or impair the
ability of Issuer to consummate the transactions contemplated by this
Agreement.
(d) The Issuer has taken, and will in the future take, all
steps necessary to irrevocably exempt the transactions contemplated by this
Agreement from any applicable state takeover law and from any applicable
charter or contractual provision containing change of control or
anti-takeover provisions.
10. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE. Grantee
hereby represents and warrants to Issuer as follows:
(a) Grantee has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Grantee and no other corporate
proceedings on the part of Grantee are necessary to authorize this
Agreement or to consummate the transactions so contemplated. This Agreement
has been duly and validly executed and delivered by Grantee. This Agreement
is the valid and legally binding obligation of Grantee, enforceable against
Grantee in accordance with its terms.
(b) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby will not (i)
conflict with, or result in any violation or breach of any provision of the
Certificate of Incorporation, as amended to date, or Bylaws, as amended to
date, of Grantee, (ii) result in any violation or breach of, or constitute
(with or without notice or lapse of time, or both) a default (or give rise
to a right of termination, cancellation or acceleration of any obligation
or loss of any benefit) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, contract or other agreement,
instrument or obligation to which the Grantee or any of its Subsidiaries is
a party or by which any of them or any of their properties or assets may be
bound, or (iii) conflict or violate any permit, concession, franchise,
license, judgment, order, degree, statute, law, ordinance, rule or
regulation applicable to Grantee or any of its Subsidiaries or any of its
or their properties or assets, except in the case of (ii) and (iii) for any
such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which could not, individually or in the
aggregate, have a material adverse effect (as defined in the Merger
Agreement) on Grantee and its Subsidiaries, taken as a whole, or impair the
ability of Grantee to consummate the transactions contemplated by this
Agreement.
(c) The Grantee has taken, and will in the future take, all
steps necessary to irrevocably exempt the transactions contemplated by this
Agreement from any applicable state takeover law and from any applicable
charter or contractual provision containing change of control or
anti-takeover provisions.
11. GRANTEE COMPLIANCE. Grantee shall acquire the Option
Shares for investment purposes only and not with a view
to any distribution thereof in violation of the
Securities Act, and shall not sell any Option Shares
purchased pursuant to this Agreement except in compliance
with the Securities Act.
12. ASSIGNMENT OF OPTION BY GRANTEE. Neither of the parties
hereto may assign any of its rights or obligations under
this Option Agreement or the Option created hereunder to
any other person, without the express written consent of
the other party.
13. LIMITATION OF GRANTEE PROFIT.
(a) Notwithstanding any other provision of this Agreement, in
no event shall the Grantee's Total Profit (as hereinafter defined) exceed
Two Hundred Thirty Million Four Hundred Fifty-Four Thousand Five Hundred
Forty-Five dollars ($230,454,545.00) (the "Profit Cap") and, if it
otherwise would exceed such amount, the Grantee, at its sole election,
shall either (i) reduce the number of shares of Common Stock subject to
this Option, (ii) deliver to the Issuer for cancellation Option Shares
previously purchased by, or Termination Fee Shares (or other securities
into which such Termination Fee Shares are converted or exchanged) to
Grantee (valued, for the purposes of this Section 12(a) at the average
closing sales price per share of Common Stock (or if there is no sale on
such date then the average between the closing bid and ask prices on any
such day) as reported by the Nasdaq National Market for the five (5)
consecutive trading days preceding the day on which the Grantee's Total
Profit exceeds the Profit Cap, (iii) pay cash to the Issuer, (iv) reduce
the number of Termination Fee Shares to be paid by the Grantee or (v) any
combination thereof, so that Grantee's actually realized Total Profit shall
not exceed the Profit Cap after taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the
amount (before taxes) of the following: (a) the aggregate amount of (i) (x)
the net cash amounts received by Grantee pursuant to the sale of Option
Shares or Termination Fee Shares (or any other securities into which such
Option Shares or Termination Fee Shares are converted or exchanged) to any
unaffiliated party or to Issuer pursuant to this Agreement, less (y) the
Grantee's purchase price of such Option Shares or other securities, (ii)
any amounts received by Grantee on the transfer of the Option (or any
portion thereof), if permitted hereunder, and (iii) the amount received by
Grantee pursuant to Section 7.2 of the Merger Agreement; minus (b) the
amount of cash theretofore paid to the Issuer pursuant to this Section 12
plus the value of the Option Shares or Termination Fee Shares or other
securities theretofore delivered to the Issuer for cancellation pursuant to
this Section 12.
(c) Notwithstanding any other provision of this Agreement,
nothing in this Agreement shall affect the ability of Grantee to receive
nor relieve Issuer's obligation to pay a fee pursuant to Section 7.2 of the
Merger Agreement; provided that if Total Profit received by Grantee would
exceed the Profit Cap following the receipt of such fee, Grantee shall be
obligated to comply with the terms of Section 12(a) within five (5) days of
the later of (i) the date of receipt of such fee and (ii) the date of
receipt of the net cash by Grantee pursuant to the sale of Option Shares or
Termination Fee Shares (or, any other securities into which such Option
Shares or Termination Fee Shares are converted or exchanged) pursuant to
this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Option may not be exercised for a number of Option Shares that would, as of
the Notice Date, result in a Notional Total Profit (as defined below) of
more than the Profit Cap; provided; however, that Grantee may indicate in
its notice of exercise that Grantee is taking any of the actions described
in subsection (a) hereof so as to reduce the Notional Total Profit to not
more than the Profit Cap and preserve its rights to exercise the Option for
the resulting number of Option Shares. "Notional Total Profit" shall mean,
with respect to any number of Option Shares as to which the Grantee may
propose to exercise the Option, the Total Profit determined as of the
Notice Date assuming that the Option was exercised on such date for such
number of Option Shares and assuming such Option Shares, together with all
other Option Shares held by the Grantee and its affiliates as of such date,
were sold for cash at the closing sales price for Common Stock as of the
close of business on the preceding trading day.
(e) For purposes of Section 11(a) and clause (iii) of Section
11(b), the value of any Option Shares delivered by Grantee to the Issuer
shall be the average closing sales price per share of Common Stock (or if
there is no sale on such date then the average between the closing bid and
ask prices on any such day) as reported by the Nasdaq National Market for
the five (5) consecutive trading days preceding the day the Grantee's Total
Profit exceeds the Profit Cap.
14. APPLICATION FOR REGULATORY APPROVAL. Each of Grantee and
Issuer will use its commercially reasonable efforts to
make all filings with, and to obtain consents of, all
third parties and governmental authorities necessary to
the consummation of the transactions contemplated by this
Agreement, including without limitation making
application to list the shares of Common Stock issuable
hereunder on the Nasdaq National Market upon official
notice of issuance.
15. SPECIFIC PERFORMANCE. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of
this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by
either party hereto through injunctive or other equitable
relief.
16. SEPARABILITY OF PROVISIONS. If any term, provision,
covenant or restriction contained in this Agreement is
held by a court or a federal or state regulatory agency
of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions and
covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no
way be affected, impaired or invalidated.
17. NOTICES. All notices, claims, demands and other
communications hereunder shall be deemed to have been
duly given or made when delivered in person, by overnight
courier or by facsimile at the respective addresses of
the parties set forth in the Merger Agreement.
18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws
thereof.
19. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which will be deemed to be an
original, but all of which shall constitute one and the
same agreement.
20. EXPENSES. Except as otherwise expressly provided herein
or in the Merger Agreement, each of the parties hereto
shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of
its own financial consultants, investment bankers,
accountants and counsel.
21. ENTIRE AGREEMENT. Except as otherwise expressly provided
herein or in the Merger Agreement, this Agreement
contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with
respect thereof, written or oral. The terms and
conditions of this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their
respective successors and permitted assigns. Nothing in
this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto, and
their respective successors except as assigns, any
rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided
herein. Any provision of this Agreement may be waived
only in writing at any time by the party that is entitled
to the benefits of such provision. This Agreement may not
be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement
executed by the parties hereto.
22. FURTHER ASSURANCES. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and
deliver all other documents and instruments and take all
other action that may be reasonably necessary in order to
consummate the transactions provided for by such
exercise. Nothing contained in this Agreement shall be
deemed to authorize Issuer or Grantee to breach any
provision of the Merger Agreement.
23. HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
SOFTWARE.COM, INC.
By: _____________________________________
Name:
Title:
PHONE.COM, INC.
By: _____________________________________
Name:
Title:
EXHIBIT B
STOCK OPTION AGREEMENT
(SOFTWARE.COM, INC. SHARES)
THIS STOCK OPTION AGREEMENT (this "AGREEMENT"), dated August
8, 2000, between Software.com, Inc., a Delaware corporation ("Issuer"), and
Phone.com, Inc., a Delaware corporation ("Grantee"),
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement
and Plan of Merger, dated as of August 8, 2000 (the "Merger Agreement"),
which provides, among other things, for the merger of Merger Sub with and
into Issuer with Issuer continuing as the surviving corporation upon the
terms and subject to the conditions set forth in the Merger Agreement
(capitalized terms used herein without definition shall have the respective
meanings specified in the Merger Agreement); and
WHEREAS, as a condition to Grantee's entering into the
Merger Agreement and in consideration therefor, Issuer has agreed to grant
Grantee the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. GRANT OF OPTION. Issuer hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to purchase, subject to
the terms hereof, nine million seven hundred twenty-four thousand four
hundred sixty (9,724,460) shares of fully paid and nonassessable common
stock of the Issuer, par value $.001 per share ("Common Stock"), equal to
and in no event exceeding nineteen and nine-tenths percent (19.9%) of the
shares of Common Stock outstanding as of the date hereof, at a purchase
price of $125.7197 per share of Common Stock as adjusted in accordance with
the provisions of Section 6 of this Agreement (such price, as adjusted if
applicable, the "Option Price").
2. EXERCISE OF OPTION.
(a) Grantee may exercise the Option, in whole or part,
and from time to time, if, but only if, a Triggering Event (as hereinafter
defined) shall have occurred prior to the occurrence of an Option
Termination Event (as hereinafter defined), provided that Grantee shall
have sent the written notice of such exercise (as provided in subsection
(e) of this Section 2) on or prior to the last date of the six (6)-month
period following such Triggering Event (the "Option Expiration Date").
(b) The term "Option Termination Event" shall mean the
first day after the earliest to occur of the following dates: (i) the date
on which the Effective Time of the Merger occurs; (ii) the last date of the
twelve (12) month period beginning on the date of termination of the Merger
Agreement pursuant to Section 7.1(b)(iii); provided, that such termination
has given rise to the right of Grantee to receive payment of Software.com
Expenses pursuant to Section 7.2(c)(1) of the Merger Agreement; provided,
that subsequent to such termination, if an event occurs that gives rise to
the obligation of Issuer to pay the Termination Fee pursuant to Section
7.2(c)(2) of the Merger Agreement, then the last date of the six (6) month
period beginning on the date of actual payment of the Termination Fee by
Issuer to Grantee pursuant to Section 7.2(c)(2) of the Merger Agreement;
(iii) the date of termination of the Merger Agreement by either party
pursuant to the provisions of any section of the Merger Agreement other
than Sections 7.1(b)(iii) (other than as provided in clause (ii) above);
provided, that such termination occurs prior to the occurrence of a
Triggering Event; and (iv) the last date of the six (6) month period
beginning on the date of the first occurrence of a Triggering Event;
provided, however, that if the Option cannot be exercised as of any such
date by reason of any applicable judgment, decree, law, regulation or order
(each, an "Impediment"), or by reason of the waiting period under the HSR
Act, then the Option Termination Event shall be delayed until the date
which is thirty (30) days after such Impediment has been removed or such
waiting period has expired.
(c) TRIGGERING EVENT. The term "Triggering Event" shall
mean any termination of the Merger Agreement which entitles Grantee to
receive payment of the Termination Fee from Issuer pursuant to Section 7.2
of the Merger Agreement.
(d) NOTICE OF TRIGGERING EVENT. Issuer shall notify
Grantee promptly in writing of the occurrence of any Triggering Event, and
in any event within twenty-four (24) hours, it being understood that the
giving of such notice by Issuer shall not be a condition to the right of
Grantee to exercise the Option or for a Triggering Event to have occurred.
(e) NOTICE OF EXERCISE; CLOSING. In the event Grantee is
entitled to and wishes to exercise the Option, it shall send to Issuer a
written notice (the date of which being herein referred to as the "Notice
Date") specifying (i) the total number of shares it will purchase pursuant
to such exercise and (ii) a place and date which shall be a business day
not earlier than three (3) business days nor later than sixty (60) business
days from the Notice Date for the closing of such purchase (the "Closing
Date"); provided, that if the closing of the purchase and sale pursuant to
the Option (the "Closing") cannot be consummated, in the reasonable opinion
of Grantee, by reason of any applicable judgment, decree, order, law or
regulation, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated; and provided further, without
limiting the foregoing, that if, in the reasonable opinion of Grantee,
prior notification to or approval of any regulatory agency is required in
connection with such purchase, Grantee shall promptly file the required
notice or application for approval and shall expeditiously process the same
and the period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which any required notification periods
have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. Any exercise of
the Option shall be deemed to occur on the Closing Date relating thereto.
(f) PURCHASE PRICE. At the Closing referred to in
subsection (e) of this Section 2, Grantee shall pay to Issuer the aggregate
purchase price for the shares of Common Stock purchased pursuant to the
exercise of the Option in immediately available funds by wire transfer to a
bank account designated by Issuer, provided that failure or refusal of
Issuer to designate such a bank account shall not preclude Grantee from
exercising the Option.
(g) ISSUANCE OF COMMON STOCK. At such Closing,
simultaneously with the delivery of immediately available funds as provided
in subsection (f) of this Section 2, Issuer shall deliver to Grantee a
certificate or certificates representing the number of shares of Common
Stock purchased by the Grantee and, if the Option should be exercised in
part only, a new Option evidencing the rights of Grantee thereof to
purchase the balance of the shares purchasable hereunder, and the Grantee
shall deliver to Issuer this Agreement and a letter agreeing that Grantee
will not offer to sell or otherwise dispose of such shares in violation of
applicable law or the provisions of this Agreement.
(h) LEGEND. Certificates for Common Stock delivered at a
Closing hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:
"THE TRANSFER AND VOTING OF THE SHARES REPRESENTED BY
THIS CERTIFICATE IS SUBJECT TO CERTAIN PROVISIONS OF AN
AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF AND ISSUER
AND TO RESALE RESTRICTIONS ARISING UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. A COPY OF SUCH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICE OF ISSUER AND WILL BE
PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT
BY ISSUER OF A WRITTEN REQUEST THEREFOR."
It is understood and agreed that: (i) the reference to the
resale restrictions of the Securities Act of 1933, as amended (the
"Securities Act"), in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel, in form and substance reasonably satisfactory to
Issuer, to the effect that such legend is not required for purposes of the
Securities Act; (ii) the reference to the provisions of this Agreement in
the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in
compliance with the provisions of this Agreement and under circumstances
that do not require the retention of such reference; and (iii) the legend
shall be removed in its entirety if the conditions in the preceding clauses
(i) and (ii) and both satisfied. In addition, such certificates shall bear
any other legend as may be required by law.
(i) RECORD HOLDER; EXPENSES. Upon the Closing, Grantee
shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books
of Issuer shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to Grantee or
the Issuer shall have failed or refused to designate the bank account
described in subsection (f) of this Section 2. Issuer shall pay all
expenses, and any and all United States federal, state and local taxes and
other charges that may be payable in connection with the preparation,
issuance and delivery of stock certificates under this Section 2 in the
name of Grantee or its assignee, transferee or designee.
3. CONDITIONS TO DELIVERY OF OPTION SHARES. The obligation
of Issuer to deliver Option Shares upon any exercise of the Option is
subject to the satisfaction of the following conditions:
(a) All waiting periods, if any, under the HSR Act
applicable to the issuance of Option Shares hereunder shall have expired or
been terminated; and
(b) There shall be no preliminary or permanent injunction
or other order issued by any court of competent jurisdiction preventing or
prohibiting such exercise of the Option or the delivery of the Option
Shares in respect of such exercise.
4. RESERVATION OF SHARES. Issuer agrees: (i) that it shall
at all times maintain, free from preemptive rights, sufficient authorized
but unissued or treasury shares of Common Stock (and other securities
issuable pursuant to Section 6) so that the Option may be exercised without
additional authorization of Common Stock (or such other securities) after
giving effect to all other options, warrants, convertible securities and
other rights to purchase Common Stock (or such other securities); (ii) that
it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act avoid
or seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all action as may from time to time be required
(including without limitation complying with all premerger notification,
reporting and waiting periods in the HSR Act and the rules and regulations
thereunder) in order to permit Grantee to exercise the Option and the
Issuer duly and effectively to issue shares of Common Stock pursuant
hereto; and (iv) promptly to take all action provided herein to protect the
rights of Grantee against dilution.
5. LOST OPTIONS. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation
of this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and
deliver a new Agreement of like tenor and date.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The number of
shares of Common Stock purchasable upon the exercise of the Option shall be
subject to adjustment from time to time as provided in this Section 6.
(a) In the event that any additional shares of Common
Stock are issued or otherwise become outstanding after the date hereof
(other than by reason of subsection (b) of this Section 6), the number of
shares of Common Stock subject to the Option shall be increased so that,
after such issuance of additional shares, such number of shares then
remaining subject to the Option, together with shares theretofore issued
pursuant to the Option, equals nineteen and nine-tenths percent (19.9%) of
the number of such shares of Common Stock then issued and outstanding.
(b) In the event of any change in Common Stock by reason
of stock dividends, other dividends on the Common Stock payable in
securities or other property (other than regular cash dividends), stock
splits, merger, recapitalization, combinations, subdivisions, conversions,
exchanges of shares or other similar transactions, then the type and number
of shares of Common Stock purchasable upon exercise hereof shall be
appropriately adjusted, and proper provision will be made in the agreements
governing such transaction so that Grantee shall receive upon exercise of
the Option and payment of the aggregate Option Price hereunder the number
and class of shares or other securities or property that Grantee would have
received in respect of Common Stock if the Option had been exercised in
full immediately prior to such event, or the record date therefor, as
applicable.
(c) Whenever the number of shares of outstanding Common
Stock changes after the date hereof as a result of the events described in
clause (b) hereof (but not the events described in clause (a) hereof), the
Option Price shall be adjusted by multiplying the Option Price by a
fraction the numerator of which shall be equal to the aggregate number of
shares of Common Stock purchasable prior to the adjustment and the
denominator of which shall be equal to the aggregate number of shares of
Common Stock purchasable immediately after the adjustment.
(d) No adjustment made in accordance with this Section 6
shall constitute or be deemed a waiver of any breach of any of Issuer's
representations, warranties, covenants, agreements or obligations contained
in the Merger Agreement.
(e) If the Issuer satisfies a portion of its obligation
to pay Grantee a termination fee as permitted by Section 7.2 of the Merger
Agreement by issuing to Grantee shares of Common Stock (the "Termination
Fee Shares"), then the number of shares of Common Stock subject to the
Option (including those Option Shares which may have already been
exercised) will be adjusted so that the sum of the number of shares of
Common Stock subject to the Option and the number of Termination Fee Shares
equals nineteen and nine-tenths percent (19.9%) of the number of shares of
Common Stock then issued and outstanding, without giving effect to any
Option Shares or Termination Fee Shares.
7. REGISTRATION RIGHTS.
(a) As used in this Agreement, "Registrable Securities"
means each of the Option Shares issued to Grantee hereunder and any other
securities issued in exchange for, or issued as dividends or otherwise on
or in respect of, any of such Option Shares.
(b) At any time or from time to time within three (3)
years of the first Closing, Grantee may make a written request to Issuer
for registration under and in accordance with the provisions of the
Securities Act with respect to all or any part of the Registrable
Securities (a "Demand Registration"). A Demand Registration may be, at the
option of Grantee, a shelf registration or a registration involving an
underwritten offering. As soon as reasonably practicable after Grantee's
request for a Demand Registration, Issuer shall file one or more
registration statements on any appropriate form with respect to all of the
Registrable Securities requested to be so registered; provided that Issuer
will not be required to file any such registration statement during any
period of time (not to exceed sixty (60) days after such request in the
case of clause (i) below or ninety (90) days in the case of clauses (ii) or
(iii) below) when (i) Issuer is in possession of material non-public
information which it reasonably believes would be detrimental to be
disclosed at such time, (ii) Issuer is required under the Securities Act to
include audited financial statements for any period in such registration
statement that are not yet available for inclusion therein, or (iii) Issuer
determines, in its reasonable judgment, that such registration would
interfere with any financing, acquisition or other material transaction
involving Issuer or any of its affiliates. Issuer shall use its best
efforts to have the Demand Registration declared effective as soon as
reasonably practicable after such filing and to keep the Demand
Registration continuously effective for a period of at least sixty (60)
days following the date on which the Demand Registration is declared
effective, in the case of an underwritten offering, or at least one hundred
twenty (120) days following the date on which the Demand Registration is
declared effective, in the case of a shelf registration; provided that, if
for any reason the effectiveness of any Demand Registration is suspended,
the required period of effectiveness shall be extended by the aggregate
number of days of each such suspension; and provided, further, that the
effectiveness of any Demand Registration may be terminated if and when all
of the Registrable Securities covered thereby shall have been sold. Grantee
shall be entitled to two (2) Demand Registrations; provided, that only
requests relating to a registration statement that has become effective
under the Securities Act shall be counted for purposes of determining the
number of Demand Registrations made. If any Demand Registration involves an
underwritten offering, (i) Issuer shall have the right to select the
managing underwriter, which shall be reasonably acceptable to Grantee and
(ii) Issuer shall enter into an underwriting agreement in customary form.
(c) If at any time within two (2) years of the first
Closing, Issuer proposes to file a registration statement under the
Securities Act with respect to any shares of any class of its equity
securities to be sold for the account of Issuer (other than a registration
statement on Form S-4 or Form S-8 or any successor form), and the
registration form to be used may be used for the registration of
Registrable Securities, then Issuer shall in each case give written notice
of such proposed filing to Grantee at least twenty (20) days before the
anticipated filing date, and Grantee shall have the right to include in
such registration such number of Registrable Securities as Grantee may
request (such request to be made by written notice to Issuer within fifteen
(15) days following Grantee's receipt from Issuer of such notice of
proposed filing) (an "Incidental Registration"). Issuer shall use its
commercially reasonable efforts to cause the managing underwriter of any
proposed underwritten offering to permit Grantee to include in such
offering all Registrable Securities requested by Grantee to be included in
the registration for such offering on the same terms and conditions as any
similar securities of Issuer included therein. Notwithstanding the
foregoing, if the managing underwriter of such offering advises Grantee
that, in the reasonable opinion of such underwriter, the amount of
Registrable Securities which Grantee requests to be included in such
offering would materially and adversely affect the success of such
offering, then the amount of Registrable Securities to be offered shall be
reduced to the extent necessary to reduce the total amount of securities to
be included in such offering to the amount recommended by such underwriter;
provided that if the amount of Registrable Securities shall be so reduced,
Issuer shall include in such offering (i) first all shares proposed to be
included therein by the Issuer and (ii) second the shares requested to be
included therein by Grantee pro rata with the shares intended to be
included therein by any other stockholder of the Issuer. Participation by
Grantee in any Incidental registration shall not affect the obligation of
the Company to effect Demand Registrations under this Section 4.1. The
issuer may withdraw any registration under the Securities Act that gives
rise to an Incidental Registration without consent of Grantee.
(d) In the event that Registrable Securities are included
in a "piggyback" registration statement pursuant to Section 7(c) hereof,
Grantee agrees not to effect any public sale or distribution of the issue
being registered or a similar security of Issuer, or any securities
convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 under the Securities Act, during the
ten (10) business days prior to, and during the ninety (90)-day period
beginning on, the effective date of such registration statement (except as
part of such registration), if and to the extent timely notified in writing
by Issuer, in the case of a non-underwritten public offering, or by the
managing underwriter, in the case of an underwritten public offering. In
the event that Grantee requests a Demand Registration or if Registrable
Securities are included in a "piggyback" registration pursuant to Section
7(c) hereof, Issuer agrees not to effect any public sale or distribution of
the issue being registered or a similar security of Issuer, or any
securities convertible into or exchangeable or exercisable for such
securities, during the period from such request until ninety (90) days
after the effective date of such registration statement (except as part of
such registration or pursuant to a registration of securities on Form S-4
or Form S-8 or any successor form).
(e) Notwithstanding anything to the contrary contained
herein, in the event that Grantee requests a Demand Registration or a
"piggyback" registration of Registrable Securities pursuant to Section 7(b)
or 7(c) hereof, respectively, Issuer shall have the right to purchase all,
but not less than all, of the Registrable Securities requested to be so
registered, upon the terms and subject to the conditions set forth in this
Section 7(e). If Issuer wishes to exercise such purchase right, then within
two (2) business days following receipt of a request for a Demand
Registration or a "piggyback" registration, Issuer shall send a written
notice (a "Repurchase Notice") to Grantee specifying that Issuer wishes to
exercise such purchase right, a date for the closing of such purchase,
which shall not be more than five (5) business days after delivery of such
Repurchase Notice, and a place for the closing of such purchase (a
"Repurchase Closing"). Upon delivery of a Repurchase Notice subject to
applicable Delaware law, a binding agreement shall be deemed to exist
between Grantee and Issuer providing for the purchase by Issuer of the
Registrable Securities requested to be registered by Grantee, upon the
terms and subject to the conditions set forth in this Section 7(e). The
purchase price per share or other unit of Registrable Securities (the
"Repurchase Price") shall equal the average per share or per unit closing
price as quoted on the Nasdaq (or if not then quoted thereon, on such other
exchange or quotation system on which the Registrable Securities are
quoted) for the period of five (5) trading days ending on the trading day
immediately prior to the day on which Grantee requests a Demand
Registration or a "piggyback" registration of the Registrable Securities
which Issuer subsequently elects to purchase. Grantee's obligation to
deliver any Registrable Securities at a Repurchase Closing shall be subject
to the condition that, at such Repurchase Closing, Issuer shall have
delivered to Grantee a certificate signed on behalf of Issuer by Issuer's
chief executive officer and chief financial officer, which certificate
shall be satisfactory in form and substance to Grantee, to the effect that
the purchase by Issuer of such Registrable Securities (i) is permitted
under applicable Delaware corporate law and under the fraudulent conveyance
provisions of the federal bankruptcy code and (ii) does not violate any
material agreement to which Issuer or any of its subsidiaries is a party or
by which any of their properties or assets is bound. At any Repurchase
Closing, Issuer shall pay to Grantee the aggregate Repurchase Price for the
Registrable Securities being purchased by wire transfer of immediately
available funds or by delivering to Grantee a certified or bank check
payable to or on the order of Grantee in an amount equal to such aggregate
Repurchase Price, and Grantee will surrender to Issuer a certificate or
certificates evidencing such Registrable Securities. A purchase of
Registrable Securities by Issuer pursuant to this Section 7(e) shall be
considered a Demand Registration for purposes of Section 7(b) hereof.
(f) The registrations effected under this Section 7 shall
be effected at Issuer's expense except for underwriting commissions
allocable to the Registrable Securities. Issuer shall indemnify and hold
harmless Grantee, its affiliates and controlling persons and their
respective officers, directors, agents and representatives from and against
any and all losses, claims, damages, liabilities and expenses (including,
without limitation, all out-of-pocket expenses, investigation expenses,
expenses incurred with respect to any judgment and fees and disbursements
of counsel and accountants) arising out of or based upon any statements
contained in, or omissions or alleged omissions from, each registration
statement (and related prospectus) filed pursuant to this Section 7;
provided, however, that Issuer shall not be liable in any such case to
Grantee or any affiliate or controlling person of Grantee or any of their
respective officers, directors, agents or representatives to the extent
that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon an untrue
statement or omission or alleged omission made in such registration
statement or prospectus in reliance upon, and in conformity with, written
information furnished to Issuer specifically for use in the preparation
thereof by Grantee such affiliate, controlling person, officer, director,
agent or representative, as the case may be.
8. REPURCHASE OF OPTION AND OPTION SHARES.
(a) At the request of and upon notice by Grantee (the
"Put Notice") at any time during the period during which the Option is
exercisable pursuant to Section 2 (the "Purchase Period"), the Issuer (or
any successor entity thereof) will purchase from Grantee all or any portion
of the Option, to the extent not previously exercised, at the price set
forth in subparagraph (i) below, and all or any portion of the Option
Shares, if any, acquired by Grantee pursuant thereto, at the price set
forth in subparagraph (ii) below:
(i) The difference between the "Market/Tender Offer
Price" for the Common Stock as of the date Grantee gives notice of its
intent to exercise its rights under this Section 7(a) (defined as the
higher of (A) the highest price per share offered as of such date pursuant
to any Acquisition Proposal which was made prior to such date and (B) the
average closing sale price of Common Stock then on the Nasdaq National
Market during the five (5) trading days ending on the trading day
immediately preceding such date) and the Exercise Price, multiplied by the
number of Common Stock purchasable pursuant to the Option, but only if the
Market/Tender Offer Price is greater than the Exercise Price. For purposes
of determining the highest price offered pursuant to any Acquisition
Proposal which involves consideration other than cash, the value of such
consideration will be equal to the higher of (x) if securities of the same
class of the proponent as such considerations are traded on any national
securities exchange or by any registered securities association, a value
based on the closing sale price or asked price for such securities on their
principal trading market on such date and (y) the value ascribed to such
consideration by the proponent of such Acquisition Proposal, or if no such
value is ascribed, a value determined in good faith by the Board of
Directors of the Issuer.
(ii) The Market/Tender Offer Price multiplied by the
number of shares of Common Stock so purchased.
9. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. Issuer
hereby represents and warrants to Grantee as follows:
(a) Issuer has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Issuer and no other
corporate proceedings on the part of Issuer are necessary to authorize this
Agreement or to consummate the transactions so contemplated. This Agreement
has been duly and validly executed and delivered by Issuer. This Agreement
is the valid and legally binding obligation of Issuer, enforceable against
Issuer in accordance with its terms.
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times from the
date hereof through the termination of this Agreement in accordance with
its terms will have reserved for issuance upon the exercise of the Option,
that number of shares of Common Stock equal to the maximum number of shares
of Common Stock at any time and from time to time issuable hereunder, and
all such shares, upon issuance pursuant hereto, will be duly authorized,
validly issued, fully paid, nonassessable, and will be delivered free and
clear of all claims, liens, encumbrance and security interests and not
subject to any preemptive rights.
(c) The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not
(i) conflict with, or result in any violation or breach of any provision of
the Certificate of Incorporation, as amended to date, or Bylaws, as amended
to date, of Issuer, (ii) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or
give rise to a right of termination, cancellation or acceleration of any
obligation or loss of any benefit) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, contract or other
agreement, instrument or obligation to which the Issuer or any of its
Subsidiaries is a party or by which any of them or any of their properties
or assets may be bound, or (iii) conflict or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Issuer or any of its
Subsidiaries or any of its or their properties or assets, except in the
case of (ii) and (iii) for any such violations, breaches, defaults,
terminations, cancellations, accelerations or conflicts which could not,
individually or in the aggregate, have a material adverse effect (as
defined in the Merger Agreement) on Issuer and its Subsidiaries, taken as a
whole, or impair the ability of Issuer to consummate the transactions
contemplated by this Agreement.
(d) The Issuer has taken, and will in the future take,
all steps necessary to irrevocably exempt the transactions contemplated by
this Agreement from any applicable state takeover law and from any
applicable charter or contractual provision containing change of control or
anti-takeover provisions.
10. REPRESENTATIONS AND WARRANTIES OF THE GRANTEE. Grantee
hereby represents and warrants to Issuer as follows:
(a) Grantee has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Grantee and no other
corporate proceedings on the part of Grantee are necessary to authorize
this Agreement or to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by Grantee. This
Agreement is the valid and legally binding obligation of Grantee,
enforceable against Grantee in accordance with its terms.
(b) The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not
(i) conflict with, or result in any violation or breach of any provision of
the Certificate of Incorporation, as amended to date, or Bylaws, as amended
to date, of Grantee, (ii) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or
give rise to a right of termination, cancellation or acceleration of any
obligation or loss of any benefit) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, contract or other
agreement, instrument or obligation to which the Grantee or any of its
Subsidiaries is a party or by which any of them or any of their properties
or assets may be bound, or (iii) conflict or violate any permit,
concession, franchise, license, judgment, order, degree, statute, law,
ordinance, rule or regulation applicable to Grantee or any of its
Subsidiaries or any of its or their properties or assets, except in the
case of (ii) and (iii) for any such violations, breaches, defaults,
terminations, cancellations, accelerations or conflicts which could not,
individually or in the aggregate, have a material adverse effect (as
defined in the Merger Agreement) on Grantee and its Subsidiaries, taken as
a whole, or impair the ability of Grantee to consummate the transactions
contemplated by this Agreement.
(c) The Grantee has taken, and will in the future take,
all steps necessary to irrevocably exempt the transactions contemplated by
this Agreement from any applicable state takeover law and from any
applicable charter or contractual provision containing change of control or
anti-takeover provisions.
11. GRANTEE COMPLIANCE. Grantee shall acquire the Option
Shares for investment purposes only and not with a view to any distribution
thereof in violation of the Securities Act, and shall not sell any Option
Shares purchased pursuant to this Agreement except in compliance with the
Securities Act.
12. ASSIGNMENT OF OPTION BY GRANTEE. Neither of the parties
hereto may assign any of its rights or obligations under this Option
Agreement or the Option created hereunder to any other person, without the
express written consent of the other party.
13. LIMITATION OF GRANTEE PROFIT.
(a) Notwithstanding any other provision of this
Agreement, in no event shall the Grantee's Total Profit (as hereinafter
defined) exceed Two Hundred Thirty Million Four Hundred Fifty-Four Thousand
Five Hundred Forty-Five dollars ($230,454,545.00) (the "Profit Cap") and,
if it otherwise would exceed such amount, the Grantee, at its sole
election, shall either (i) reduce the number of shares of Common Stock
subject to this Option, (ii) deliver to the Issuer for cancellation Option
Shares previously purchased by, or Termination Fee Shares (or other
securities into which such Termination Fee Shares are converted or
exchanged) to Grantee (valued, for the purposes of this Section 12(a) at
the average closing sales price per share of Common Stock (or if there is
no sale on such date then the average between the closing bid and ask
prices on any such day) as reported by the Nasdaq National Market for the
five (5) consecutive trading days preceding the day on which the Grantee's
Total Profit exceeds the Profit Cap, (iii) pay cash to the Issuer, (iv)
reduce the number of Termination Fee Shares to be paid by the Grantee or
(v) any combination thereof, so that Grantee's actually realized Total
Profit shall not exceed the Profit Cap after taking into account the
foregoing actions.
(b) As used herein, the term "Total Profit" shall mean
the amount (before taxes) of the following: (a) the aggregate amount of (i)
(x) the net cash amounts received by Grantee pursuant to the sale of Option
Shares or Termination Fee Shares (or any other securities into which such
Option Shares or Termination Fee Shares are converted or exchanged) to any
unaffiliated party or to Issuer pursuant to this Agreement, less (y) the
Grantee's purchase price of such Option Shares or other securities, (ii)
any amounts received by Grantee on the transfer of the Option (or any
portion thereof), if permitted hereunder, and (iii) the amount received by
Grantee pursuant to Section 7.2 of the Merger Agreement; minus (b) the
amount of cash theretofore paid to the Issuer pursuant to this Section 12
plus the value of the Option Shares or Termination Fee Shares or other
securities theretofore delivered to the Issuer for cancellation pursuant to
this Section 12.
(c) Notwithstanding any other provision of this
Agreement, nothing in this Agreement shall affect the ability of Grantee to
receive nor relieve Issuer's obligation to pay a fee pursuant to Section
7.2 of the Merger Agreement; provided that if Total Profit received by
Grantee would exceed the Profit Cap following the receipt of such fee,
Grantee shall be obligated to comply with the terms of Section 12(a) within
five (5)days of the later of (i) the date of receipt of such fee and (ii)
the date of receipt of the net cash by Grantee pursuant to the sale of
Option Shares or Termination Fee Shares (or, any other securities into
which such Option Shares or Termination Fee Shares are converted or
exchanged) pursuant to this Agreement.
(d) Notwithstanding any other provision of this
Agreement, the Option may not be exercised for a number of Option Shares
that would, as of the Notice Date, result in a Notional Total Profit (as
defined below) of more than the Profit Cap; provided, however, that Grantee
may indicate in its notice of exercise that Grantee is taking any of the
actions described in subsection (a) hereof so as to reduce the Notional
Total Profit to not more than the Profit Cap and preserve its rights to
exercise the Option for the resulting number of Option Shares. "Notional
Total Profit" shall mean, with respect to any number of Option Shares as to
which the Grantee may propose to exercise the Option, the Total Profit
determined as of the Notice Date assuming that the Option was exercised on
such date for such number of Option Shares and assuming such Option Shares,
together with all other Option Shares held by the Grantee and its
affiliates as of such date, were sold for cash at the closing sales price
for Common Stock as of the close of business on the preceding trading day.
(e) For purposes of Section 11(a) and clause (iii) of
Section 11(b), the value of any Option Shares delivered by Grantee to the
Issuer shall be the average closing sales price per share of Common Stock
(or if there is no sale on such date then the average between the closing
bid and ask prices on any such day) as reported by the Nasdaq National
Market for the five (5) consecutive trading days preceding the day the
Grantee's Total Profit exceeds the Profit Cap.
14. APPLICATION FOR REGULATORY APPROVAL. Each of Grantee and
Issuer will use its commercially reasonable efforts to make all filings
with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated
by this Agreement, including without limitation making application to list
the shares of Common Stock issuable hereunder on the Nasdaq National Market
upon official notice of issuance.
15. SPECIFIC PERFORMANCE. The parties hereto acknowledge
that damages would be an inadequate remedy for a breach of this Agreement
by either party hereto and that the obligations of the parties hereto shall
be enforceable by either party hereto through injunctive or other equitable
relief.
16. SEPARABILITY OF PROVISIONS. If any term, provision,
covenant or restriction contained in this Agreement is held by a court or a
federal or state regulatory agency of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions and covenants
and restrictions contained in this Agreement shall remain in full force and
effect, and shall in no way be affected, impaired or invalidated.
17. NOTICES. All notices, claims, demands and other
communications hereunder shall be deemed to have been duly given or made
when delivered in person, by overnight courier or by facsimile at the
respective addresses of the parties set forth in the Merger Agreement.
18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
19. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which will be deemed to be an original, but all
of which shall constitute one and the same agreement.
20. EXPENSES. Except as otherwise expressly provided herein
or in the Merger Agreement, each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including fees and expenses of its
own financial consultants, investment bankers, accountants and counsel.
21. ENTIRE AGREEMENT. Except as otherwise expressly provided
herein or in the Merger Agreement, this Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with
respect thereof, written or oral. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in
this Agreement, expressed or implied, is intended to confer upon any party,
other than the parties hereto, and their respective successors except as
assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided herein. Any
provision of this Agreement may be waived only in writing at any time by
the party that is entitled to the benefits of such provision. This
Agreement may not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by the parties
hereto.
22. FURTHER ASSURANCES. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise. Nothing contained in this Agreement shall be deemed to authorize
Issuer or Grantee to breach any provision of the Merger Agreement.
23. HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
SOFTWARE.COM, INC.
By: _________________________________
Name:
Title:
PHONE.COM, INC.
By: _________________________________
Name:
Title:
EXHIBIT C
SOFTWARE.COM VOTING AGREEMENT
-----------------------------
VOTING AGREEMENT (this "Voting Agreement"), dated as of
August 8, 2000, by and between Phone.com, Inc., a Delaware corporation
("Phone") and ______________________________ (the "Stockholder").
RECITALS:
WHEREAS, concurrently with the execution of this Voting
Agreement, Software.com, Inc., a Delaware corporation (the "Company") and
Phone have entered into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which the parties have agreed, upon the terms and
subject to the conditions set forth in the Merger Agreement, to a strategic
combination of Phone and the Company (the "Merger");
WHEREAS, as of the date hereof, Stockholder is the record
and Beneficial Owner (as defined hereinafter) of _________ Existing Shares
(as defined hereinafter) of the Common Stock, $0.001 par value, of the
Company (the "Company Common Stock");
WHEREAS, as inducement and a condition to entering into the
Merger Agreement, Phone has required Stockholder to agree, and Stockholder
has agreed, to enter into this Voting Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual promises, representations, warranties, covenants and
agreements contained in this Voting Agreement, the parties, intending to be
legally bound, agree as follows:
Section 1. CERTAIN DEFINITIONS. In addition to the terms
defined elsewhere in this Voting Agreement, capitalized terms used and not
defined in this Voting Agreement have the respective meanings ascribed to
them in the Merger Agreement. For purposes of this Voting Agreement:
(a) "Beneficially Own" or "Beneficial Ownership"
with respect to any securities means having "beneficial ownership" of such
securities as determined pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Without duplicative
counting of the same securities by the same holder, securities Beneficially
Owned by a person include securities Beneficially Owned by all other
persons with whom such person would constitute a "group" within the meaning
of Section 13(d) of the Exchange Act with respect to securities of the same
issuer.
(b) "Existing Shares" means shares of Company Common
Stock Beneficially Owned by Stockholder as of the date of this Voting
Agreement provided that, in the event of a stock dividend or distribution,
or any change in the Company Common Stock by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares or the like,
other than pursuant to the Merger, the term "Existing Shares" will be
deemed to refer to and include the shares of Company Common Stock as well
as all such stock dividends and distributions and any shares into which or
for which any or all of the Securities (as defined hereinafter) may be
changed or exchanged and appropriate adjustments shall be made to the terms
and provisions of this Voting Agreement.
(c) "Securities" means the Existing Shares together
with any shares of Company Common Stock or other securities of the Company
acquired by Stockholder in any capacity after the date of this Voting
Agreement and prior to its termination whether upon the exercise of
options, warrants, or rights, the conversion or exchange of convertible or
exchangeable securities, or by means of purchase, dividend, distribution,
split-up, recapitalization, combination, exchange of shares, or the like,
gift, bequest, inheritance, or as a successor in interest in any capacity,
or otherwise.
Section 2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER.
Stockholder represents and warrants to Phone as follows:
(a) OWNERSHIP OF SHARES. Stockholder is the sole
record and Beneficial Owner of _________ Existing Shares. On the date of
this Voting Agreement, the Existing Shares constitute all of the shares of
Company Common Stock owned of record or Beneficially Owned by Stockholder.
There are no outstanding options or other rights to acquire from
Stockholder or obligations of Stockholder to sell or to acquire, any shares
of Company Common Stock. Stockholder has sole voting power and sole power
to issue instructions with respect to the matters set forth in Sections 5,
6 and 7 hereof, sole power of disposition, sole power of conversion, sole
power to demand appraisal rights and sole power to agree to all of the
matters set forth in this Voting Agreement, in each case with respect to
all of the Existing Shares with no limitations, qualifications, or
restrictions on such rights, subject to applicable securities laws and the
terms of this Voting Agreement.
(b) POWER; BINDING AGREEMENT. Stockholder has the
legal capacity, power and authority to enter into and perform all of
Stockholder's obligations under this Voting Agreement. This Voting
Agreement has been duly and validly executed and delivered by Stockholder
and constitutes a valid and binding agreement of Stockholder, enforceable
against Stockholder in accordance with its terms except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
(c) NO CONFLICTS. Except for filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the Exchange Act, no filing with, and no permit, authorization,
consent, or approval of, any state or federal public body or authority
("Governmental Entity") is necessary for the execution of this Voting
Agreement by Stockholder and the consummation by Stockholder of the
transactions contemplated by this Voting Agreement. None of the execution
and delivery of this Voting Agreement by Stockholder, the consummation by
Stockholder of the transactions contemplated by this Voting Agreement or
compliance by Stockholder with any of the provisions of this Voting
Agreement shall (i) conflict with or result in any breach of any
organizational documents applicable to Stockholder, (ii) result in a
violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any
of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement, or other instrument or obligation of any kind to
which Stockholder is a party or by which Stockholder or any of its
properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, judgment, order, statute, rule, or regulation
applicable to Stockholder or any of Stockholder's properties or assets.
(d) NO ENCUMBRANCE. Except as permitted by this
Voting Agreement, the Existing Shares are now and, at all times during the
term of this Voting Agreement, held by Stockholder, or by a nominee or
custodian for the benefit of Stockholder, free and clear of all mortgages,
claims, charges, liens, security interests, pledges or options, proxies,
voting trusts or agreements, understandings or arrangements, or any other
rights whatsoever ("Encumbrances"), except for any such Encumbrances
arising hereunder.
(e) NO FINDER'S FEES. No broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in connection with
the transactions contemplated by this Voting Agreement based upon
arrangements made by or on behalf of Stockholder.
(f) RELIANCE BY PHONE. Stockholder understands and
acknowledges that Phone is entering into the Merger Agreement in reliance
upon Stockholder's execution and delivery of this Voting Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF PHONE. Phone
represents and warrants to Stockholder as follows:
(a) POWER; BINDING AGREEMENT. Phone has the corporate
power and authority to enter into and perform all of its obligations under
this Voting Agreement. This Voting Agreement has been duly and validly
executed and delivered by Phone and constitutes a valid and binding
agreement of Phone, enforceable against Phone in accordance with its terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(b) NO CONFLICTS. Except for filings under the HSR
Act and the Exchange Act, no filing with, and no permit, authorization,
consent, or approval of, any Governmental Entity is necessary for the
execution of this Voting Agreement by Phone and the consummation by Phone
of the transactions contemplated by this Voting Agreement. None of the
execution and delivery of this Voting Agreement by Phone, the consummation
by Phone of the transactions contemplated by this Voting Agreement, or
compliance by Phone with any of the provisions of this Voting Agreement
shall (i) conflict with or result in any breach of any organizational
documents applicable to either Phone, (ii) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to
which either Phone is a party or by which either Phone or any of its
properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, judgment, order, statute, rule, or regulation
applicable to Phone or any of its properties or assets.
Section 4. DISCLOSURE. Stockholder agrees to permit Phone to
publish and disclose in all documents and schedules filed with the
Securities and Exchange Commission, and any press release or other
disclosure document that Phone, in its sole discretion, determines to be
necessary or desirable in connection with the Merger and any transactions
related to the Merger, Stockholder's identity and ownership of Company
Common Stock and the nature of Stockholder's commitments, arrangements and
understandings under this Voting Agreement.
Section 5. CERTAIN RESTRICTIONS.
(a) NO SOLICITATION. Stockholder (in his, her or its
capacity as such) will not, and will cause its subsidiaries, partners,
investment bankers, attorneys, accountants, and other agents and
representatives of Stockholder (such subsidiaries, partners, investment
bankers, attorneys, accountants, agents and representatives of any person
are collectively referred to as the "Representatives" of such person) not
to, directly or indirectly (i) initiate, solicit or encourage, or take any
action to facilitate the making of, any offer or proposal which constitutes
or is reasonably likely to lead to any Alternative Transaction (as defined
in the Merger Agreement) or any inquiry with respect thereto or (ii) in the
event of any unsolicited Alternative Transaction for the Company or any
affiliate of the Company, engage in negotiations or discussions with, or
provide any information or data to, any person (other than Phone, any of
its affiliates or representatives) relating to any Alternative Transaction;
provided, that Stockholder may engage in negotiations or discussions with
or provide any information or data to, any such person relating to an
Alternative Transaction to the extent that the Company is permitted to
engage in such activities pursuant to Section 4.2(a) of the Merger
Agreement. Stockholder will, notify Phone orally and in writing of any such
offers, proposals, or inquiries relating to the purchase or acquisition by
any person of Securities (including, without limitation, the terms and
conditions thereof and the identity of the person making it), within 24
hours of the receipt of such offers. Stockholder will, and will cause its
Representatives to, immediately cease and cause to be terminated any and
all existing activities, discussions or negotiations, if any, with any
parties conducted prior to the date of this Voting Agreement without
respect to any Alternative Transaction relating to the Company, other than
discussions or negotiations with Phone and its affiliates and their
Representatives.
(b) CERTAIN ACTIONS. Prior to the termination of this
Voting Agreement, Stockholder agrees not to, directly or indirectly, take
any other action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect.
Section 6. VOTING OF COMPANY COMMON STOCK. Stockholder, in
his, her or its capacity as such, hereby agrees that, during the period
commencing on the date thirty (30) days prior to the Effective Time (as
defined in the Merger Agreement) and continuing until the first to occur of
(a) the Effective Time (as defined in the Merger Agreement) or (b)
termination of this Voting Agreement in accordance with its terms,
Stockholder will not sell or transfer any Securities or any interest
therein to any person unless each person to which any Securities, or any
interest in any of such Securities, is or may be transferred shall have (x)
executed a counterpart of this Voting Agreement (with such modifications as
Phone may reasonably request) and (y) agreed in writing to hold such
Securities (or interest in such Securities) subject to all of the terms and
provisions of this Voting Agreement. Stockholder, in his, her or its
capacity as such, hereby agrees that, during the period commencing on the
date hereof and continuing until the first to occur of (a) the Effective
Time (as defined in the Merger Agreement) or (b) termination of this Voting
Agreement in accordance with its terms, at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of the
holders of Company Common Stock, however called, or in connection with any
written consent of the holders of Company Common Stock, Stockholder will
appear at the meeting or otherwise cause the Securities to be counted as
present at the meeting for purposes of establishing a quorum and vote or
consent (or cause to be voted or consented) the Securities in favor of the
adoption of the Merger Agreement and the approval of other actions
contemplated by the Merger Agreement.
Section 7. DIRECTORS AND OFFICERS. Notwithstanding any
provision of this Voting Agreement to the contrary, nothing in this Voting
Agreement shall limit or restrict Stockholder from acting in Stockholder's
capacity as a director or officer of the Company (it being understood that
this Agreement shall apply to Stockholder solely in Stockholder's capacity
as a stockholder of the Company) or voting in Stockholder's sole discretion
on any matter other than those matters referred to in Section 6(ii).
Section 8. PROXY
(a) Stockholder hereby irrevocably grants to, and
appoints, ____________________________ and ___________________________ or
either of them in their respective capacities as officers of Phone and any
individual who shall hereafter succeed to any such office of Phone and each
of them individually, such Stockholder's proxy and attorney-in-fact (with
full power of substitution), for and in the name, place and stead of
Stockholder, to vote the Securities, or grant a consent or approval in
respect of the Securities, in favor of the Merger, as specified in Section
6.
(b) Stockholder represents that any proxies given
prior to this Voting Agreement regarding the Existing Shares are not
irrevocable, and that such proxies are revoked.
(c) Stockholder affirms that the irrevocable proxy
set forth in this Section 8 is given in connection with the execution of
the Merger Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of Stockholder under this Voting Agreement.
Stockholder further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. Stockholder ratifies
and confirms all that such irrevocable proxy may lawfully do or cause to be
done by virtue hereof.
Section 9. CONSENTS AND WAIVERS. Stockholder hereby gives
any consents or waivers that are reasonably required for the consummation
of the Merger under the terms of any agreements to which the Stockholder is
a party or pursuant to any rights Stockholder may have.
Section 10. COMMERCIALLY REASONABLE EFFORTS. Subject to the
terms and conditions of this Voting Agreement, the Stockholder agrees to
use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary under
applicable laws and regulations to consummate the transactions contemplated
by this Voting Agreement. Stockholder shall at all times publicly support
the Merger; provided, however, that in the event of a Phone Subsequent
Determination (as defined in the Merger Agreement), the Stockholder shall
have no obligation pursuant to this Section 10 other than to comply with
the Stockholder's obligations under Section 6 hereof. Notwithstanding the
foregoing, (i) if Stockholder is a director or officer of the Company,
nothing contained in this Voting Agreement shall prohibit such director or
officer from taking such action as a director or officer of the Company
that may be required on the part of such person as a director or officer of
the Company; and (ii) except as provided in Section 6 hereof, nothing
contained in this Voting Agreement shall prohibit the Stockholder from
exercising the voting rights of a stockholder of the Company.
Section 11. TERMINATION. This Voting Agreement and the proxy
granted herein shall terminate on the earliest of (i) the termination of
the Merger Agreement, (ii) the agreement of the parties hereto to terminate
this Voting Agreement, or (iii) the consummation of the Merger.
Section 12. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Voting Agreement
(including the documents and instruments referred to herein) constitutes
the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties, or any of them,
with respect to the subject matter of this Voting Agreement.
(b) SUCCESSORS AND ASSIGNS. This Voting Agreement
shall not be assigned by operation of law or otherwise without the prior
written consent of the other parties. This Voting Agreement shall be
binding upon, inure to the benefit of, and be enforceable by each party and
each party's respective heirs, beneficiaries, executors, representatives,
and permitted assigns.
(c) AMENDMENT AND MODIFICATION. This Voting Agreement
may not be amended, altered, supplemented, or otherwise modified or
terminated except upon the execution and delivery of a written agreement
executed by the parties hereto.
(d) NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (i)
transmitter's confirmation of a receipt of a facsimile transmission, (ii)
confirmed delivery by a standard overnight carrier or when delivered by
hand, or (iii) the expiration of five business days after the day when
mailed by certified or registered mail, postage prepaid, addressed at the
following addresses (or at such other address for a party as shall be
specified by like notice):
If to Phone to:
Phone.com, Inc.
800 Chesapeake Drive
Redwood City, CA 94603
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue
Palo Alto, CA 94301
Attention: Kenton J. King, Esq.
Telecopy No.: (650) 470-4570
If to Stockholder, to:
________________________
________________________
________________________
________________________
with a copy to:
________________________
________________________
________________________
________________________
(e) SEVERABILITY. Any term or provision of this
Voting Agreement which is held to be invalid, illegal or unenforceable in
any respect in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Voting Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Voting Agreement in any other jurisdiction.
If any provision of this Voting Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
(f) SPECIFIC PERFORMANCE. Each of the parties
recognizes and acknowledges a breach by it of any covenants or agreements
contained in this Voting Agreement will cause the other party to sustain
damages for which it would not have an adequate remedy at law for money,
damages, and therefore in the event of any such breach the aggrieved party
shall be entitled to the remedy of specified 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.
(g) NO WAIVER. The failure of any party to exercise
any right, power or remedy provided under this Voting Agreement or
otherwise available in respect of this Voting Agreement at law or in
equity, or to insist upon compliance by any other party with its obligation
under this Voting Agreement, and any custom or practice of the parties at
variance with the terms of this Voting Agreement, will not constitute a
waiver by such party of its right to exercise any such or other right,
power or remedy or to demand such compliance.
(h) NO THIRD PARTY BENEFICIARIES. This Voting
Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(i) GOVERNING LAW. This Voting Agreement shall be
governed and construed in accordance with the laws of the State of
Delaware, without giving effect to the principles of conflict of law
thereof.
(j) DESCRIPTIVE HEADING. The descriptive headings
used herein are for reference purposes only and will not affect in any way
the meaning or interpretation of this Voting Agreement.
(k) EXPENSES. All costs and expenses incurred in
connection with this Voting Agreement and the transactions contemplated
hereby shall be paid by the party incurring the expenses.
(l) FURTHER ASSURANCES. From time to time, at any
other party's request and without further consideration, each party shall
execute and deliver any additional documents and take any further lawful
action as may be necessary or desirable to consummate and make effective,
in the most expeditious manner practicable, the transactions contemplated
by this Voting Agreement.
(m) COUNTERPARTS. This Voting Agreement may be
executed in two or more counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Phone.com and Stockholder have caused
this Voting Agreement to be duly executed as of the day and year first
written above.
PHONE.COM, INC.
By: ____________________________
Name:
Title:
STOCKHOLDER:
________________________________
Name:
EXHIBIT D
PHONE.COM VOTING AGREEMENT
--------------------------
VOTING AGREEMENT (this "Voting Agreement"), dated as of
August 8, 2000, by and between Software.com, Inc., a Delaware corporation
("Software.com") and ______________________________ (the "Stockholder").
RECITALS:
WHEREAS, concurrently with the execution of this Voting
Agreement, Phone.com, Inc., a Delaware corporation (the "Company") and
Software.com have entered into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which the parties have agreed, upon the terms and
subject to the conditions set forth in the Merger Agreement, to a strategic
combination of Phone and Software.com (the "Merger");
WHEREAS, as of the date hereof, Stockholder is the record
and Beneficial Owner (as defined hereinafter) of _________ Existing Shares
(as defined hereinafter) of the Common Stock, $0.001 par value, of the
Company (the "Company Common Stock");
WHEREAS, as inducement and a condition to entering into the
Merger Agreement, Software.com has required Stockholder to agree, and
Stockholder has agreed, to enter into this Voting Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual promises, representations, warranties, covenants and
agreements contained in this Voting Agreement, the parties, intending to be
legally bound, agree as follows:
Section 1. CERTAIN DEFINITIONS. In addition to the terms
defined elsewhere in this Voting Agreement, capitalized terms used and not
defined in this Voting Agreement have the respective meanings ascribed to
them in the Merger Agreement. For purposes of this Voting Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with
respect to any securities means having "beneficial ownership" of such
securities as determined pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Without duplicative
counting of the same securities by the same holder, securities Beneficially
Owned by a person include securities Beneficially Owned by all other
persons with whom such person would constitute a "group" within the meaning
of Section 13(d) of the Exchange Act with respect to securities of the same
issuer.
(b) "Existing Shares" means shares of Company Common
Stock Beneficially Owned by Stockholder as of the date of this Voting
Agreement provided that, in the event of a stock dividend or distribution,
or any change in the Company Common Stock by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares or the like,
other than pursuant to the Merger, the term "Existing Shares" will be
deemed to refer to and include the shares of Company Common Stock as well
as all such stock dividends and distributions and any shares into which or
for which any or all of the Securities (as defined hereinafter) may be
changed or exchanged and appropriate adjustments shall be made to the terms
and provisions of this Voting Agreement.
(c) "Securities" means the Existing Shares together
with any shares of Company Common Stock or other securities of the Company
acquired by Stockholder in any capacity after the date of this Voting
Agreement and prior to its termination whether upon the exercise of
options, warrants, or rights, the conversion or exchange of convertible or
exchangeable securities, or by means of purchase, dividend, distribution,
split-up, recapitalization, combination, exchange of shares, or the like,
gift, bequest, inheritance, or as a successor in interest in any capacity,
or otherwise.
Section 2. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER.
Stockholder represents and warrants to Software.com as follows:
(a) OWNERSHIP OF SHARES. Stockholder is the sole
record and Beneficial Owner of _________ Existing Shares. On the date of
this Voting Agreement, the Existing Shares constitute all of the shares of
Company Common Stock owned of record or Beneficially Owned by Stockholder.
There are no outstanding options or other rights to acquire from
Stockholder or obligations of Stockholder to sell or to acquire, any shares
of Company Common Stock. Stockholder has sole voting power and sole power
to issue instructions with respect to the matters set forth in Sections 5,
6 and 7 hereof, sole power of disposition, sole power of conversion, sole
power to demand appraisal rights and sole power to agree to all of the
matters set forth in this Voting Agreement, in each case with respect to
all of the Existing Shares with no limitations, qualifications, or
restrictions on such rights, subject to applicable securities laws and the
terms of this Voting Agreement.
(b) POWER; BINDING AGREEMENT. Stockholder has the
legal capacity, power and authority to enter into and perform all of
Stockholder's obligations under this Voting Agreement. This Voting
Agreement has been duly and validly executed and delivered by Stockholder
and constitutes a valid and binding agreement of Stockholder, enforceable
against Stockholder in accordance with its terms except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
(c) NO CONFLICTS. Except for filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the Exchange Act, no filing with, and no permit, authorization,
consent, or approval of, any state or federal public body or authority
("Governmental Entity") is necessary for the execution of this Voting
Agreement by Stockholder and the consummation by Stockholder of the
transactions contemplated by this Voting Agreement. None of the execution
and delivery of this Voting Agreement by Stockholder, the consummation by
Stockholder of the transactions contemplated by this Voting Agreement or
compliance by Stockholder with any of the provisions of this Voting
Agreement shall (i) conflict with or result in any breach of any
organizational documents applicable to Stockholder, (ii) result in a
violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any
of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement, or other instrument or obligation of any kind to
which Stockholder is a party or by which Stockholder or any of its
properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, judgment, order, statute, rule, or regulation
applicable to Stockholder or any of Stockholder's properties or assets.
(d) NO ENCUMBRANCE. Except as permitted by this
Voting Agreement, the Existing Shares are now and, at all times during the
term of this Voting Agreement, held by Stockholder, or by a nominee or
custodian for the benefit of Stockholder, free and clear of all mortgages,
claims, charges, liens, security interests, pledges or options, proxies,
voting trusts or agreements, understandings or arrangements, or any other
rights whatsoever ("Encumbrances"), except for any such Encumbrances
arising hereunder.
(e) NO FINDER'S FEES. No broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in connection with
the transactions contemplated by this Voting Agreement based upon
arrangements made by or on behalf of Stockholder.
(f) RELIANCE BY SOFTWARE.COM. Stockholder understands
and acknowledges that Software.com is entering into the Merger Agreement in
reliance upon Stockholder's execution and delivery of this Voting
Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF SOFTWARE.COM.
Software.com represents and warrants to Stockholder as follows:
(a) POWER; BINDING AGREEMENT. Software.com has the
corporate power and authority to enter into and perform all of its
obligations under this Voting Agreement. This Voting Agreement has been
duly and validly executed and delivered by Software.com and constitutes a
valid and binding agreement of Software.com, enforceable against
Software.com in accordance with its terms, except that (i) such enforcement
may be subject to applicable bankruptcy, insolvency or other similar laws,
now or hereafter in effect, affecting creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(b) NO CONFLICTS. Except for filings under the HSR
Act and the Exchange Act, no filing with, and no permit, authorization,
consent, or approval of, any Governmental Entity is necessary for the
execution of this Voting Agreement by Software.com and the consummation by
Software.com of the transactions contemplated by this Voting Agreement.
None of the execution and delivery of this Voting Agreement by
Software.com, the consummation by Software.com of the transactions
contemplated by this Voting Agreement, or compliance by Software.com with
any of the provisions of this Voting Agreement shall (i) conflict with or
result in any breach of any organizational documents applicable to either
Software.com, (ii) result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default (or give rise to any
third party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any note,
loan agreement, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of
any kind to which either Software.com is a party or by which either
Software.com or any of its properties or assets may be bound, or (iii)
violate any order, writ, injunction, decree, judgment, order, statute,
rule, or regulation applicable to Software.com or any of its properties or
assets.
Section 4. DISCLOSURE. Stockholder agrees to permit
Software.com to publish and disclose in all documents and schedules filed
with the Securities and Exchange Commission, and any press release or other
disclosure document that Software.com, in its sole discretion, determines
to be necessary or desirable in connection with the Merger and any
transactions related to the Merger, Stockholder's identity and ownership of
Company Common Stock and the nature of Stockholder's commitments,
arrangements and understandings under this Voting Agreement.
Section 5. CERTAIN RESTRICTIONS.
(a) NO SOLICITATION. Stockholder in his, her or its
capacity as such will not, and will cause its subsidiaries, partners,
investment bankers, attorneys, accountants, and other agents and
representatives of Stockholder (such subsidiaries, partners, investment
bankers, attorneys, accountants, agents and representatives of any person
are collectively referred to as the "Representatives" of such person) not
to, directly or indirectly (i) initiate, solicit or encourage, or take any
action to facilitate the making of, any offer or proposal which constitutes
or is reasonably likely to lead to any Alternative Transaction (as defined
in the Merger Agreement) or any inquiry with respect thereto or (ii) in the
event of any unsolicited Alternative Transaction for the Company or any
affiliate of the Company, engage in negotiations or discussions with, or
provide any information or data to, any person (other than Software.com,
any of its affiliates or representatives) relating to any Alternative
Transaction; provided, that Stockholder may engage in negotiations or
discussions with or provide any information or data to, any such person
relating to an Alternative Transaction to the extent that Phone is
permitted to engage in such activities pursuant to Section 4.2(a) of the
Merger Agreement. Stockholder will, notify Software.com orally and in
writing of any such offers, proposals, or inquiries relating to the
purchase or acquisition by any person of Securities (including, without
limitation, the terms and conditions thereof and the identity of the person
making it), within 24 hours of the receipt of such offers. Stockholder
will, and will cause its Representatives to, immediately cease and cause to
be terminated any and all existing activities, discussions or negotiations,
if any, with any parties conducted prior to the date of this Voting
Agreement without respect to any Alternative Transaction relating to the
Company, other than discussions or negotiations with Software.com and its
affiliates and their Representatives.
(b) CERTAIN ACTIONS. Prior to the termination of this
Voting Agreement, Stockholder agrees not to, directly or indirectly, take
any other action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect.
Section 6. VOTING OF COMPANY COMMON STOCK. Stockholder, in
his, her or its capacity as such, hereby agrees that, during the period
commencing on the date thirty (30) days prior to the EffectiveTime (as
defined in the Merger Agreement) and continuing until the first to occur of
(a) the Effective Time (as defined in the Merger Agreement) or (b)
termination of this Voting Agreement in accordance with its terms, (i)
Stockholder will not sell or transfer any Securities or any interest
therein to any person unless each person to which any Securities, or any
interest in any of such Securities, is or may be transferred shall have (x)
executed a counterpart of this Voting Agreement (with such modifications as
Software.com may reasonably request) and (y) agreed in writing to hold such
Securities (or interest in such Securities) subject to all of the terms and
provisions of this Voting Agreement. Stockholder, in his, her or its
capacity as such, hereby agrees that, during the period commencing on the
date hereof and continuing until the first to occur of (a) the Effective
Time (as defined in the Merger Agreement) or (b) termination of this Voting
Agreement in accordance with its terms, at any meeting (whether annual or
special and whether or not an adjourned or postponed meeting) of the
holders of Company Common Stock, however called, or in connection with any
written consent of the holders of Company Common Stock, Stockholder will
appear at the meeting or otherwise cause the Securities to be counted as
present at the meeting for purposes of establishing a quorum and vote or
consent (or cause to be voted or consented) the Securities in favor of the
adoption of the Merger Agreement and the approval of other actions
contemplated by the Merger Agreement.
Section 7. DIRECTORS AND OFFICERS. Notwithstanding any
provision of this Voting Agreement to the contrary, nothing in this Voting
Agreement shall limit or restrict Stockholder from acting in Stockholder's
capacity as a director or officer of the Company (it being understood that
this Voting Agreement shall apply to Stockholder solely in Stockholder's
capacity as a stockholder of the Company) or voting in Stockholder's sole
discretion on any matter other than those matters referred to in Section
6(ii).
Section 8. PROXY
(a) Stockholder hereby irrevocably grants to, and
appoints, ____________________________ and ___________________________ or
either of them in their respective capacities as officers of Software.com
and any individual who shall hereafter succeed to any such office of
Software.com and each of them individually, such Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name,
place and stead of Stockholder, to vote the Securities, or grant a consent
or approval in respect of the Securities, in favor of the Merger, as
specified in Section 6.
(b) Stockholder represents that any proxies given
prior to this Voting Agreement regarding the Existing Shares are not
irrevocable, and that such proxies are revoked.
(c) Stockholder affirms that the irrevocable proxy
set forth in this Section 8 is given in connection with the execution of
the Merger Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of Stockholder under this Voting Agreement.
Stockholder further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. Stockholder ratifies
and confirms all that such irrevocable proxy may lawfully do or cause to be
done by virtue hereof.
Section 9. CONSENTS AND WAIVERS. Stockholder hereby gives
any consents or waivers that are reasonably required for the consummation
of the Merger under the terms of any agreements to which the Stockholder is
a party or pursuant to any rights Stockholder may have.
Section 10. COMMERCIALLY REASONABLE EFFORTS. Subject to the
terms and conditions of this Voting Agreement, the Stockholder agrees to
use commerically reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary under
applicable laws and regulations to consummate the transactions contemplated
by this Voting Agreement. Stockholder shall at all times publicly support
the Merger; provided, however, that in the event of a Phone Subsequent
Determination, the Stockholder shall have no obligation pursuant to this
Section 10 other than to comply with the Stockholder's obligations under
Section 6 hereof. Notwithstanding the foregoing, (i) if Stockholder is a
director or officer of the Company, nothing contained in this Voting
Agreement shall prohibit such director or officer from taking such action
as a director or officer of the Company that may be required on the part of
such person as a director or officer of the Company; and (ii) except as
provided in Section 6 hereof, nothing contained in this Voting Agreement
shall prohibit the Stockholder from exercising the voting rights of a
stockholder of the Company.
Section 11. TERMINATION. This Voting Agreement and the proxy
granted herein shall terminate on the earliest of (i) the termination of
the Merger Agreement, (ii) the agreement of the parties hereto to terminate
this Voting Agreement, or (iii) the consummation of the Merger.
Section 12. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Voting Agreement
(including the documents and instruments referred to herein) constitutes
the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties, or any of them,
with respect to the subject matter of this Voting Agreement.
(b) SUCCESSORS AND ASSIGNS. This Voting Agreement
shall not be assigned by operation of law or otherwise without the prior
written consent of the other parties. This Voting Agreement shall be
binding upon, inure to the benefit of, and be enforceable by each party and
each party's respective heirs, beneficiaries, executors, representatives,
and permitted assigns.
(c) AMENDMENT AND MODIFICATION. This Voting Agreement
may not be amended, altered, supplemented, or otherwise modified or
terminated except upon the execution and delivery of a written agreement
executed by the parties hereto.
(d) NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (i)
transmitter's confirmation of a receipt of a facsimile transmission, (ii)
confirmed delivery by a standard overnight carrier or when delivered by
hand, or (iii) the expiration of five business days after the day when
mailed by certified or registered mail, postage prepaid, addressed at the
following addresses (or at such other address for a party as shall be
specified by like notice):
If to Software.com to:
Software.com, Inc.
525 Anacapa Street
Santa Barbara, CA 93101
Attention: General Counsel
with a copy to:
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
Attention: Elizabeth R. Flint, Esq.
Telecopy No.: (650) 493-6811
and to:
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
One Market
Spear Tower, Suite 3300
San Francisco, CA 94105
Attention: Steve L. Camahort, Esq.
Telecopy No.: (415) 947-2099
If to Stockholder, to:
________________________
________________________
________________________
________________________
with a copy to:
________________________
________________________
________________________
________________________
(e) SEVERABILITY. Any term or provision of this
Voting Agreement which is held to be invalid, illegal or unenforceable in
any respect in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Voting Agreement or affecting the validity or enforceability of any of
the terms or provisions of this Voting Agreement in any other jurisdiction.
If any provision of this Voting Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
(f) SPECIFIC PERFORMANCE. Each of the parties
recognizes and acknowledges a breach by it of any covenants or agreements
contained in this Voting Agreement will cause the other party to sustain
damages for which it would not have an adequate remedy at law for money,
damages, and therefore in the event of any such breach the aggrieved party
shall be entitled to the remedy of specified 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.
(g) NO WAIVER. The failure of any party to exercise
any right, power or remedy provided under this Voting Agreement or
otherwise available in respect of this Voting Agreement at law or in
equity, or to insist upon compliance by any other party with its obligation
under this Voting Agreement, and any custom or practice of the parties at
variance with the terms of this Voting Agreement, will not constitute a
waiver by such party of its right to exercise any such or other right,
power or remedy or to demand such compliance.
(h) NO THIRD PARTY BENEFICIARIES. This Voting
Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(i) GOVERNING LAW. This Voting Agreement shall be
governed and construed in accordance with the laws of the State of
Delaware, without giving effect to the principles of conflict of law
thereof.
(j) DESCRIPTIVE HEADING. The descriptive headings
used herein are for reference purposes only and will not affect in any way
the meaning or interpretation of this Voting Agreement.
(k) EXPENSES. All costs and expenses incurred in
connection with this Voting Agreement and the transactions contemplated
hereby shall be paid by the party incurring the expenses.
(l) FURTHER ASSURANCES. From time to time, at any
other party's request and without further consideration, each party shall
execute and deliver any additional documents and take any further lawful
action as may be necessary or desirable to consummate and make effective,
in the most expeditious manner practicable, the transactions contemplated
by this Voting Agreement.
(m) COUNTERPARTS. This Voting Agreement may be
executed in two or more counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Software.com and Stockholder have
caused this Voting Agreement to be duly executed as of the day and year
first written above.
SOFTWARE.COM, INC.
By: ____________________________
Name:
Title:
STOCKHOLDER:
_______________________________
Name:
EXHIBIT E
FORM OF SOFTWARE.COM AFFILIATE LETTER
Phone.com, Inc.
800 Chesapeake Drive
Redwood City, CA 94603
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of Sofware.com, Inc., a Delaware corporation
("Software.com"), as the term "affiliate" is used in and for purposes of
Accounting Series, Releases 130 and 135, as amended, of the Securities and
Exchange Commission (the "Commission"). Pursuant to the terms of the
Agreement and Plan of Merger dated as of August 8, 2000 (the "Merger
Agreement"), among Phone.com, Inc., a Delaware corporation ("Phone"),
Silver Merger Sub Inc., a Delaware corporation and a wholly owned
subsidiary of Phone ("Merger Sub"), and Software.com, Merger Sub will be
merged with and into Software.com (the "Merger").
As a result of the Merger, I may receive shares of common stock,
par value $0.001 per share, of Phone (the "Phone Securities") in exchange
for shares owned by me of common stock, par value $0.001 per share, of
Software.com (or upon the exercise of options for such shares).
I hereby represent, warrant, and covenant to Phone that in the
event I receive any Phone Securities as a result of the Merger:
A. I shall not make any sale, transfer, or other disposition of
the Phone Securities in violation of the Securities Act of 1933, as amended
(the "Act") or the rules and regulations (the "Rules and Regulations") of
the Commission under the Act.
B. I have carefully read this letter and the Merger Agreement and
discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer, or otherwise dispose of the
Phone Securities, to the extent I felt necessary, with my counsel or
counsel for Software.com.
C. I have been advised that the issuance of Phone Securities to me
pursuant to the Merger will be registered with the Commission under the Act
on a Registration Statement on Form S-4. However, I have also been advised
that, since at the time the Merger is submitted for a vote of the
stockholders of Software.com, (i) I may be deemed to be an affiliate of
Software.com and (ii) the distribution by me of the Phone Securities has
not been registered under the Act, I may not sell, transfer or otherwise
dispose of the Phone Securities issued to me in the Merger unless (x) such
sale, transfer or other disposition has been registered under the Act, (y)
such sale, transfer or other disposition is made in conformity with Rule
145 (as such rule may be hereafter from time to time amended) promulgated
by the Commission under the Act, or (z) in the opinion of counsel
reasonably acceptable to Phone, or a "no action" letter obtained by me from
the staff of the Commission, such sale, transfer or other disposition is
otherwise exempt from registration under the Act.
D. I understand that Phone is under no obligation to register the
sale, transfer, or other disposition of the Phone Securities by me or on my
behalf under the Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
E. I also understand that stop transfer instructions will be given
to Phone's transfer agents with respect to the Phone Securities and that
there will be placed on the certificates for the Phone Securities issued to
me, or any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT
OF 1933 APPLIES, AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN
COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A
REGISTRATION STATEMENT UNDER THAT ACT OR AN EXEMPTION FROM SUCH
REGISTRATION."
F. I also understand that unless the transfer by me of my Phone
Securities has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, Phone reserves the right to put
the following legend on the certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM
A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE
145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE
SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR
RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
It is understood and agreed that the legends set forth in
paragraphs E and F above shall be removed by delivery of substitute
certificates without such legend if such legend is not required for
purposes of the Act or this Agreement. It is understood and agreed that
such legends and the stop orders referred to above will be removed if (i)
evidence or representations satisfactory to Phone that the Phone Securities
represented by such certificates are being or have been sold in a
transaction made in conformity with the provisions of Rule 145(d) (as such
rule may be hereafter from time to time amended) or (ii) Phone has received
either an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to Phone, or a "no action" letter obtained by me from the
staff of the Commission, to the effect that the restrictions imposed by
Rule 145 under the Act no longer apply to me.
I further represent to and covenant with Phone that I will not,
from the date thirty (30) days prior to the Effective Time (as defined in
the Merger Agreement), sell, transfer or otherwise dispose of or reduce my
risk (as contemplated by the SEC Accounting Series Release No. 135) with
respect to any Software.com shares or shares of the capital stock of Phone
that I may hold and I will not sell, transfer or otherwise dispose of or
reduce my risk (as contemplated by SEC Accounting Series Release No. 135)
with respect to any Phone Securities received by me in the Merger or any
other shares of the capital stock of Phone until after such time as
combined financial results (including combined sales and net income)
covering at least 30 days of combined operations of Software.com and Phone
have been published by Phone, in the form of a quarterly earnings report,
an effective registration statement filed with the Commission, a report to
the Commission on Form 10-K, 10-Q or 8-K, or any other public filing or
announcement which includes such combined results of operations (such
period is referred to herein as the "Pooling Period"). Notwithstanding the
foregoing, I understand that during the Pooling Period, subject to
obtaining the prior written consent of Phone, I will not be prohibited from
selling up to 10% of the shares of Phone Common Stock (the "10% Shares")
received by me or shares of Phone Common Stock owned by me or making
charitable contributions or bona fide gifts of the shares of Phone Common
Stock received by me or shares of Phone Common Stock owned by me, subject
to the same restrictions; provided, however, that all holders of Phone
Common Stock, as a group, and all holders of Software.com Common Stock, as
a group, shall not be permitted to sell, in the aggregate, in excess of one
percent (1%) of the total number of shares exchanged in the Merger (the
"Threshold"). The 10% Shares shall be calculated in accordance with SEC
Accounting Series Release 135, as amended, by Staff Accounting Bulletin No.
76. I covenant with Phone that I will not sell, transfer or otherwise
dispose of any 10% Shares during the period commencing from the Effective
Time (as defined in the Merger Agreement) and ending on the last day of the
Pooling Period except in compliance with Rule 145(d)(i) under the Act or
pursuant to charitable contributions or bona fide gifts. I understand that
Phone shall not withhold its consent to such disposition so long as such
disposition is within the Threshold.
If at any time, Phone determines that the Merger may not be
accounted for as a "pooling of interests," then the restrictions in the
preceding paragraph shall terminate 45 days from the date on which it is
determined that the Merger may not be accounted for as a "pooling of
interests."
I understand that, if at any time prior to the commencement of the
Pooling Period I cease to be an "affiliate" of Software.com, I may request
in writing to Phone that I be released from my obligations hereunder and
Phone shall grant such request if, in Phone's good faith judgment, Phone
determines that I am, in fact, no longer an "affiliate" of Software.com and
such release would not otherwise prevent the Merger from being accounted
for as a "pooling of interests."
Execution of this letter should not be considered an admission on
my part that I am an "affiliate" of Software.com as described in the first
paragraph of this letter, or as a waiver of any rights I may have to object
to any claim that I am such an affiliate on or after the date of this
letter.
Very truly yours,
________________________
Name:
Accepted this day of , 2000 by
Phone.com, Inc.
By _____________________________
Name:
Title:
EXHIBIT F
FORM OF PHONE.COM AFFILIATE LETTER
Software.com
525 Anacapa Street
Santa Barbara, CA 93101
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of Phone.com, Inc., a Delaware corporation
("Phone"), as the term "affiliate" is used in and for purposes of
Accounting Series, Releases 130 and 135, as amended, of the Securities and
Exchange Commission (the "Commission"). Pursuant to the terms of the
Agreement and Plan of Merger dated as of August 8, 2000 (the "Merger
Agreement"), among Phone, Silver Merger Sub Inc., a Delaware corporation
and a wholly owned subsidiary of Phone ("Merger Sub"), and Software.com,
Inc., a Delaware corporation ("Software.com"), Merger Sub will be merged
with and into Software.com (the "Merger").
I understand that in order for the Merger to be accounted for as a
pooling of interests, affiliates of Phone and Software.com must not reduce
their interests in or risk relative to their ownership of the shares of
capital stock of either Phone or Software.com owned by them for a certain
time period prior to and following the Merger.
As an inducement to Software.com to consummate the Merger, I
represent to and covenant with Software.com that I will not, from the date
thirty (30) days prior to the Effective Time (as defined in the Merger
Agreement), sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by the SEC Accounting Series Release No. 135) with respect to
any shares of the capital stock of either Software.com or Phone that I may
hold and I will not sell, transfer or otherwise dispose of or reduce my
risk (as contemplated by SEC Accounting Series Release No. 135) with
respect to any shares of the capital stock of Phone until after such time
as combined financial results (including combined sales and net income)
covering at least 30 days of combined operations of Software.com and Phone
have been published by Phone, in the form of a quarterly earnings report,
an effective registration statement filed with the Commission, a report to
the Commission on Form 10-K, 10-Q, or 8-K, or any other public filing or
announcement which includes such combined results of operations (such
period is referred to herein as the "Pooling Period"). Notwithstanding the
foregoing, I understand that during the Pooling Period, subject to
obtaining the prior written consent of Phone, I will not be prohibited from
selling up to 10% of the shares of Phone Common Stock (the "10% Shares")
owned by me, or making charitable contributions or bona fide gifts of the
shares of Phone Common Stock owned by me, subject to the same restrictions;
provided, however, that all holders of Phone Common Stock, as a group, and
all holders of Software.com Common Stock, as a group, shall not be
permitted to sell, in the aggregate, in excess of one percent (1%) of the
total number of shares exchanged in the Merger (the "Threshold"). The 10%
Shares shall be calculated in accordance with SEC Accounting Series Release
135, as amended, by Staff Accounting Bulletin No. 76. I covenant with
Software.com that I will not sell, transfer or otherwise dispose of any 10%
Shares during the period commencing from the Effective Time (as defined in
the Merger Agreement) and ending on the last day of the Pooling Period
except in compliance with Rule 145(d)(i) under the Act or pursuant to
charitable contributions or bona fide gifts. I understand that Phone shall
not withhold its consent to such disposition so long as such disposition is
within the Threshold.
If at any time, Phone determines that the Merger may not be
accounted for as a "pooling of interests," then the restrictions in the
preceding paragraph shall terminate 45 days from the later of (i) the
Effective Time and (ii) the date on which it is determined that the Merger
may not be accounted for as a "pooling of interests."
I understand that, if at any time prior to the commencement of the
Pooling Period I cease to be an "affiliate" of Phone, I may request in
writing to Phone that I be released from my obligations hereunder and Phone
shall grant such request if, in Phone's good faith judgment, Phone
determines that I am, in fact, no longer an "affiliate" of Phone and such
release would not otherwise prevent the Merger from being accounted for as
a "pooling of interests.
Execution of this letter should not be considered an admission on
my part that I am an "affiliate" of Phone as described in the first
paragraph of this letter, or as a waiver of any rights I may have to object
to any claim that I am such an affiliate on or after the date of this
letter.
Very truly yours,
________________________
Name:
Accepted this day of , 2000 by
Software.com
By ______________________________
Name:
Title:
EXHIBIT G
FORM OF MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is entered into as of August __,
2000 (the "Effective Date"), by and between Phone.com, Inc., a Delaware
corporation with its principal place of business at 800 Chesapeake Drive,
Redwood City, California 94063, U.S.A. ("Phone.com") and Software.com,
Inc., a Delaware corporation, with its principal place of business at 525
Anacapa Street, Santa Barbara, California 93101 ("Software.com").
1. Each party desires to license, distribute, resell, sublicense, use and
test all products which are commercially generally available of the other
party (the "Transactions").
2. The parties desire to enter into a definitive Reseller License and
Services Agreement ("Definitive Agreement") to document the Transactions
and the parties rights and obligations with respect thereto. Except for
Paragraphs 3 through 9 below, this MOU is not binding on the parties and
neither party shall be bound by any written or oral representations or
negotiations between them, directly or indirectly; it being intended that
only by entering into the Definitive Agreement shall the parties be bound.
3. The parties agree to use good faith efforts to enter into a Definitive
Agreement within ten (10) days from the Effective Date of this MOU.
4. Any expenses incurred by either party in connection with the preparation
and/or execution of this MOU and/or the Definitive Agreement, or in
connection with the performance of any activities described hereunder,
shall be borne by each party, respectively.
5. Any and all confidential information exchanged between the parties
hereunder shall be subject to the same terms and conditions contained in
the Confidentiality Agreement, dated as of June 2000, between the parties.
6. This MOU shall be construed and governed in accordance with the laws of
the State of California without regard to conflict of laws rules.
7. This MOU will cease and terminate upon the occurrence of the earliest of
the following:
(a) the parties enter into the Definitive Agreement; or
(b) the passage of thirty (30) days from the Effective Date of this
MOU.
8. The parties agree to issue a mutually agreeable press release regarding
their intent to enter into the Transactions.
9. This MOU constitutes the entire agreement of the parties with respect to
the subject matter hereof. No modification of this MOU will be binding on
the parties unless it is in writing and signed by authorized
representatives of both parties. Nothing herein contained shall be
construed to create a joint venture, agency or partnership, or to authorize
any party to act as an agent or representative for the other party. Neither
party may assign this MOU, or its limited rights or obligations hereunder,
to any third party without the prior written consent of the other party.
PHONE.COM, INC. SOFTWARE.COM, INC.
By: By:
--------------------------- ------------------------------
Print Name: Print Name:
------------------- ----------------------
Title: Title:
------------------------ ---------------------------
Date: Date:
------------------------- ---------------------------
EXHIBIT H
FORM OF SOFTWARE.COM SPECIAL AFFILIATE LETTER
Phone.com, Inc.
800 Chesapeake Drive
Redwood City, CA 94603
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of Software.com, Inc., a Delaware corporation
("Software.com"), as the term "affiliate" (i) is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act") or
(ii) used in and for purposes of Accounting Series, Releases 130 and 135,
as amended, of the Commission. Pursuant to the terms of the Agreement and
Plan of Merger dated as of August 8, 2000 (the "Merger Agreement"), among
Phone.com, Inc., a Delaware corporation ("Phone"), Silver Merger Sub Inc.,
a Delaware corporation and a wholly owned subsidiary of Phone ("Merger
Sub"), and Software.com, Merger Sub will be merged with and into
Software.com (the "Merger").
As a result of the Merger, I may receive shares of common stock,
par value $0.001 per share, of Phone (the "Phone Securities") in exchange
for shares owned by me of common stock, par value $0.001 per share, of
Software.com (or upon the exercise of options for such shares).
I hereby represent, warrant, and covenant to Phone that in the
event I receive any Phone Securities as a result of the Merger:
A. I shall not make any sale, transfer, or other disposition of
the Phone Securities in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement and
discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer, or otherwise dispose of the
Phone Securities, to the extent I felt necessary, with my counsel or
counsel for Software.com.
C. I have been advised that the issuance of Phone Securities to me
pursuant to the Merger will be registered with the Commission under the Act
on a Registration Statement on Form S-4. However, I have also been advised
that, since at the time the Merger is submitted for a vote of the
stockholders of Software.com, (i) I may be deemed to be an affiliate of
Software.com and (ii) the distribution by me of the Phone Securities has
not been registered under the Act, I may not sell, transfer or otherwise
dispose of the Phone Securities issued to me in the Merger unless (x) such
sale, transfer or other disposition has been registered under the Act, (y)
such sale, transfer or other disposition is made in conformity with Rule
145 (as such rule may be hereafter from time to time amended) promulgated
by the Commission under the Act, or (z) in the opinion of counsel
reasonably acceptable to Phone, or a "no action" letter obtained by me from
the staff of the Commission, such sale, transfer or other disposition is
otherwise exempt from registration under the Act.
D. I understand that Phone is under no obligation to register the
sale, transfer, or other disposition of the Phone Securities by me or on my
behalf under the Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
E. I also understand that stop transfer instructions will be given
to Phone's transfer agents with respect to the Phone Securities and that
there will be placed on the certificates for the Phone Securities issued to
me, or any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT
OF 1933 APPLIES, AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN
COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A
REGISTRATION STATEMENT UNDER THAT ACT OR AN EXEMPTION FROM SUCH
REGISTRATION."
F. I also understand that unless the transfer by me of my Phone
Securities has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, Phone reserves the right to put
the following legend on the certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM
A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE
145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE
SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR
RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE
MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
It is understood and agreed that the legends set forth in
paragraphs E and F above shall be removed by delivery of substitute
certificates without such legend if such legend is not required for
purposes of the Act or this Agreement. It is understood and agreed that
such legends and the stop orders referred to above will be removed if (i)
evidence or representations satisfactory to Phone that the Phone Securities
represented by such certificates are being or have been sold in a
transaction made in conformity with the provisions of Rule 145(d) (as such
rule may be hereafter from time to time amended) or (ii) Phone has received
either an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to Phone, or a "no action" letter obtained by me from the
staff of the Commission, to the effect that the restrictions imposed by
Rule 145 under the Act no longer apply to me.
I further represent to and covenant with Phone that I will not,
from the date thirty (30) days prior to the Effective Time (as defined in
the Merger Agreement), sell, transfer or otherwise dispose of or reduce my
risk (as contemplated by the SEC Accounting Series Release No. 135) with
respect to any Software.com shares or shares of the capital stock of Phone
that I may hold and I will not sell, transfer or otherwise dispose of or
reduce my risk (as contemplated by SEC Accounting Series Release No. 135)
with respect to any Phone Securities received by me in the Merger or any
other shares of the capital stock of Phone until after such time as
combined financial results (including combined sales and net income)
covering at least 30 days of combined operations of Software.com and Phone
have been published by Phone, in the form of a quarterly earnings report,
an effective registration statement filed with the Commission, a report to
the Commission on Form 10-K, 10-Q or 8-K, or any other public filing or
announcement which includes such combined results of operations (such
period is referred to herein as the "Pooling Period"). Notwithstanding the
foregoing, I understand that during the Pooling Period, subject to
obtaining the prior written consent of Phone, I will not be prohibited from
selling up to 10% of the shares of Phone Common Stock (the "10% Shares")
received by me or shares of Phone Common Stock owned by me or making
charitable contributions or bona fide gifts of the shares of Phone Common
Stock received by me or shares of Phone Common Stock owned by me, subject
to the same restrictions; provided, however, that all holders of Phone
Common Stock, as a group, and all holders of Software.com Common Stock, as
a group, shall not be permitted to sell, in the aggregate, in excess of one
percent (1%) of the total number of shares exchanged in the Merger (the
"Threshold"). The 10% Shares shall be calculated in accordance with SEC
Accounting Series Release 135, as amended, by Staff Accounting Bulletin No.
76. I covenant with Phone that I will not sell, transfer or otherwise
dispose of any 10% Shares during the period commencing from the Effective
Time (as defined in the Merger Agreement) and ending on the last day of the
Pooling Period except in compliance with Rule 145(d)(i) under the Act or
pursuant to charitable contributions or bona fide gifts. I understand that
Phone shall not withhold its consent to such disposition so long as such
disposition is within the Threshold.
If at any time, Phone determines that the Merger may not be
accounted for as a "pooling of interests," then the restrictions in the
preceding paragraph shall terminate 45 days from the later of (i) the
Effective Time and (ii) the date on which it is determined that the Merger
may not be accounted for as a "pooling of interests."
I understand that, if at any time prior to the commencement of the
Pooling Period I cease to be an "affiliate" of Software.com, I may request
in writing to Phone that I be released from my obligations hereunder and
Phone shall grant such request if, in Phone's good faith judgment, Phone
determines that I am, in fact, no longer an "affiliate" of Software.com and
such release would not otherwise prevent the Merger from being accounted
for as a "pooling of interests."
Execution of this letter should not be considered an admission on
my part that I am an "affiliate" of Software.com as described in the first
paragraph of this letter, or as a waiver of any rights I may have to object
to any claim that I am such an affiliate on or after the date of this
letter.
Very truly yours,
_______________________
Name:
Accepted this day of , 2000 by
Phone.com
By _______________________
Name:
Title:
