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EXHIBIT 99.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BROADBASE SOFTWARE, INC.,
SOLDIER ACQUISITION CORP.
AND
SERVICESOFT, INC.
SEPTEMBER 18, 2000
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITION OF CERTAIN TERMS...........................................................................................2
ARTICLE 2 PLAN OF MERGER........................................................................................................3
2.1 The Merger.......................................................................................................3
2.2 Escrow...........................................................................................................6
2.3 Securities Law Compliance........................................................................................7
2.4 Tax and Accounting Aspects of the Merger.........................................................................8
2.5 Antitrust........................................................................................................8
2.6 Further Assurances...............................................................................................8
ARTICLE 3 ADDITIONAL AGREEMENTS.................................................................................................8
3.1 Public Announcement..............................................................................................8
3.2 Fees and Expenses................................................................................................8
3.3 Resale Restrictions..............................................................................................9
3.4 Integration Matters..............................................................................................9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SERVICESOFT.........................................................................9
4.1 Organization and Good Standing...................................................................................9
4.2 Subsidiaries and Guarantees......................................................................................9
4.3 Capitalization..................................................................................................10
4.4 Power, Authorization and Non-Contravention......................................................................11
4.5 No Violation of Charter Documents, Contracts or Laws............................................................12
4.6 Documents and Disclosures.......................................................................................12
4.7 Servicesoft Financial Statements................................................................................13
4.8 Litigation......................................................................................................14
4.9 Taxes...........................................................................................................14
4.10 Title to Properties............................................................................................15
4.11 Absence of Certain Changes or Events...........................................................................16
4.12 Intellectual Property..........................................................................................18
4.13 Compliance with Laws...........................................................................................20
4.14 Agreements and Commitments.....................................................................................20
4.15 Employees......................................................................................................22
4.16 Environmental Matters..........................................................................................25
4.17 Certain Transactions and Agreements............................................................................26
4.18 Accounts Receivable............................................................................................26
4.19 Board of Directors, Officers and Key Personnel.................................................................27
4.20 Insurance......................................................................................................27
4.21 Voting Arrangements............................................................................................27
4.22 Ownership of Shares of Broadbase Capital Stock.................................................................27
4.23 Information Supplied...........................................................................................27
4.24 Servicesoft Financial Projections..............................................................................28
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BROADBASE AND NEWCO................................................................28
5.1 Organization and Good Standing..................................................................................28
5.2 Capitalization..................................................................................................28
5.3 Power, Authorization and Non-Contravention......................................................................29
5.4 No Violation of Charter Documents, Contracts or Laws............................................................30
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5.5 Sec Filings.....................................................................................................30
5.6 Broadbase Financial Statements..................................................................................31
5.7 Litigation......................................................................................................31
5.8 Absence of Certain Changes or Events............................................................................31
5.9 Intellectual Property...........................................................................................32
5.10 Compliance with Laws...........................................................................................33
5.11 Information Supplied...........................................................................................33
5.12 Accuracy of Disclosure.........................................................................................34
ARTICLE 6 SERVICESOFT PRE-CLOSING COVENANTS....................................................................................34
6.1 Access to Information...........................................................................................34
6.2 Advice of Changes...............................................................................................34
6.3 Conduct of Business.............................................................................................34
6.4 Prospectus/Proxy Statement......................................................................................37
6.5 Stockholder Approval............................................................................................38
6.6 No Solicitation.................................................................................................40
6.7 Regulatory Approvals............................................................................................41
6.8 Necessary Consents..............................................................................................42
6.9 Blue Sky Laws...................................................................................................42
6.10 Servicesoft Dissenting Shares..................................................................................42
6.11 Litigation.....................................................................................................42
6.12 Certain Employee Benefits......................................................................................42
6.13 Notification of Employee Problems..............................................................................42
6.14 Certain Agreements.............................................................................................42
6.15 Servicesoft Affiliates.........................................................................................42
6.16 Satisfaction of Closing Conditions.............................................................................43
6.17 Conversion of Servicesoft Preferred Stock and Servicesoft Warrants.............................................43
6.18 Confirmation of Equity Interests...............................................................................43
ARTICLE 7 BROADBASE PRE-CLOSING COVENANTS......................................................................................43
7.1 Advice of Changes...............................................................................................44
7.2 Conduct of Business.............................................................................................44
7.3 Regulatory Approvals............................................................................................45
7.4 Amendment of Certificate of Incorporation.......................................................................45
7.5 Broadbase Stockholders' Approval................................................................................45
7.6 Litigation......................................................................................................46
7.7 Certain Employee Benefits.......................................................................................46
7.8 Satisfaction of Conditions Precedent............................................................................47
7.9 Blue Sky Laws...................................................................................................47
7.10 Nasdaq Listing.................................................................................................47
7.11 Board Representation...........................................................................................47
7.12 Bridge Loan....................................................................................................47
7.13 Section 16.....................................................................................................48
7.14 Director and Officer Insurance.................................................................................48
7.15 Necessary Consents.............................................................................................48
7.16 Director and Officer Indemnification...........................................................................48
7.17 No Solicitation................................................................................................48
ARTICLE 8 CLOSING MATTERS......................................................................................................49
8.1 The Closing.....................................................................................................49
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8.2 Exchange of Certificates........................................................................................49
8.3 Dissenting Shares...............................................................................................51
8.4 Employee Plans..................................................................................................52
ARTICLE 9 CONDITIONS TO OBLIGATIONS OF SERVICESOFT.............................................................................52
9.1 Accuracy of Representations and Warranties......................................................................52
9.2 Covenants.......................................................................................................52
9.3 Absence of Material Adverse Effect..............................................................................52
9.4 Compliance with Law.............................................................................................52
9.5 Government Consents.............................................................................................52
9.6 Form S-4........................................................................................................52
9.7 Requisite Approvals.............................................................................................53
9.8 Opinion of Broadbase's Counsel..................................................................................53
9.9 Hart-Scott Rodino Compliance....................................................................................53
9.10 Election of Servicesoft Designees to the Board of Directors of Broadbase.......................................53
9.11 Absence of Litigation..........................................................................................53
ARTICLE 10 CONDITIONS TO OBLIGATIONS OF BROADBASE..............................................................................53
10.1 Accuracy of Representations and Warranties.....................................................................53
10.2 Covenants......................................................................................................53
10.3 Absence of Material Adverse Effect.............................................................................53
10.4 Compliance with Law............................................................................................54
10.5 Government Consents............................................................................................54
10.6 Form S-4.......................................................................................................54
10.7 Requisite Approvals............................................................................................54
10.8 Conversion of Preferred Stock..................................................................................54
10.9 Exercise or Redemption of Warrants.............................................................................54
10.10 Termination of Rights.........................................................................................54
10.11 Third-Party Consents; Assignments; Other Documents............................................................54
10.12 Dissenting Shares.............................................................................................54
10.13 Resignations..................................................................................................54
10.14 Escrow Agreement..............................................................................................54
10.15 Opinion of Servicesoft's Counsel..............................................................................55
10.16 Hart-Scott-Rodino Compliance..................................................................................55
10.17 Affiliates Letter.............................................................................................55
ARTICLE 11 TERMINATION OF AGREEMENT............................................................................................55
11.1 Right to Terminate.............................................................................................55
11.2 Termination Procedures.........................................................................................56
11.3 Continuing Obligations.........................................................................................56
11.4 Termination Fee................................................................................................56
ARTICLE 12 SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING COVENANTS.....................................57
12.1 Survival of Representations....................................................................................57
12.2 Agreement to Indemnify.........................................................................................57
12.3 Limitations on Liability; Exceptions...........................................................................58
12.4 Survival of Claims.............................................................................................58
12.5 No Indemnity for Corporate Agents..............................................................................58
12.6 Servicesoft Stockholders' Representative.......................................................................59
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ARTICLE 13 MISCELLANEOUS.......................................................................................................61
13.1 Entire Agreement...............................................................................................61
13.2 Assignment; Binding Upon Successors and Assigns................................................................61
13.3 No Third Party Beneficiaries...................................................................................61
13.4 No Joint Venture...............................................................................................61
13.5 Construction of Agreement......................................................................................61
13.6 Severability...................................................................................................61
13.7 Section Headings...............................................................................................61
13.8 Amendment, Extension and Waivers...............................................................................61
13.9 Governing Law..................................................................................................62
13.10 Dispute Resolution............................................................................................62
13.11 Other Remedies................................................................................................62
13.12 Notices.......................................................................................................62
13.13 Time is of the Essence........................................................................................63
13.14 Effect of Disclosure Letters..................................................................................64
13.15 Counterparts..................................................................................................64
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") is entered into as of
September 18, 2000, by and among Broadbase Software, Inc., a Delaware
corporation ("BROADBASE"), Servicesoft, Inc., a Delaware corporation
("SERVICESOFT"), and Soldier Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Broadbase ("NEWCO").
RECITALS
A. The parties intend that, on the terms and subject to the
conditions of this Agreement, Newco will merge with and into Servicesoft in a
reverse triangular merger (the "MERGER"), with Servicesoft to be the surviving
corporation of the Merger, all pursuant to the terms and conditions of this
Agreement and a Certificate of Merger substantially in the form of Exhibit A
(the "CERTIFICATE OF MERGER") and the applicable provisions of the laws of the
State of Delaware. Upon the effectiveness of the Merger, all the outstanding
capital stock of Servicesoft ("SERVICESOFT STOCK") will be converted into
capital stock of Broadbase, and Broadbase will assume all outstanding options to
purchase shares of capital stock of Servicesoft, as provided in this Agreement
and the Certificate of Merger.
B. The Boards of Directors of Broadbase, Servicesoft and Newco have
determined that the Merger is in the best interests of, their respective
companies and stockholders, have approved and declared advisable this Agreement,
the Merger and the other transactions contemplated by this Agreement and,
accordingly, have agreed to effect the Merger provided for herein upon the terms
and subject to the conditions of this Agreement.
C. Concurrently with the execution of this Agreement, and as a
condition and inducement for the parties' willingness to enter into this
Agreement: (i) all executive officers and directors of each of Broadbase and
Servicesoft, and each of the stockholders of Servicesoft and Broadbase listed on
Schedule 1 are entering into a Voting Agreement and Irrevocable Proxy in
substantially the form attached hereto as Exhibit B (the "VOTING AGREEMENT"),
pursuant to which such officers and directors of Broadbase and Servicesoft and
such stockholders of Broadbase and Servicesoft will agree irrevocably to vote
all shares of Broadbase or Servicesoft capital stock, as applicable,
beneficially owned by such stockholders, in favor of the Merger and the
transactions contemplated by the Merger, and (ii) each of the employees of
Servicesoft listed on Schedule 2 shall have executed and delivered to Broadbase
an employment and non-competition agreement in substantially the form attached
hereto as Exhibit C (the "EMPLOYMENT AGREEMENT"), to be effective upon the
"Effective Time" (as defined in Section 2.1).
D. Following the execution of this Agreement, Broadbase will advance
to Servicesoft, on an as-needed basis, bridge loans of up to an aggregate of $15
million for the purpose of financing operating expenses incurred in the ordinary
course of business, pursuant to the terms set forth in the form of convertible
promissory note attached hereto as Exhibit D.
E. Prior to the "Closing Date" (as defined in Section 8.1), and as a
condition and inducement to Broadbase's willingness to enter into this
Agreement, Broadbase and the "Representative" (as defined in Section 2.2(d))
shall execute and deliver an Escrow Agreement in substantially the form attached
hereto as Exhibit E (the "ESCROW AGREEMENT"), to be effective upon consummation
of the Merger, pursuant to which certain shares of Broadbase common stock issued
in the Merger will be withheld by Broadbase and deposited in escrow as security
for the indemnification obligations provided for in Article 12.
F. The parties intend, by executing this Agreement, to adopt a plan
of reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "CODE"), and to cause the Merger to qualify as a
reorganization under Section 368(a) of the Code.
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In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as
follows:
1. DEFINITIONS OF CERTAIN TERMS
"ACQUISITION" means any transaction or series of related
transactions (i) that results in the holders of record of an entity's capital
stock immediately prior to such transaction or transactions holding less than
fifty percent (50%) of the voting power of such entity immediately after such
transaction or transactions, including the acquisition of such entity by another
entity and any reorganization (other than a reincorporation of such entity under
the laws of the state of Delaware), merger, consolidation or share exchange, or
(ii) that results in the sale of all or substantially all of the assets of such
entity.
"ANCILLARY AGREEMENTS" means either of or both the "Servicesoft
Ancillary Agreements" and the "Broadbase Ancillary Agreements" as the context
requires.
"BROADBASE ANCILLARY AGREEMENTS" has the meaning set forth in
Section 5.3(a).
"BROADBASE DISCLOSURE LETTER" means that disclosure letter dated
as of the date hereof and provided by Broadbase and Newco to Servicesoft
simultaneously with the execution and delivery of this Agreement.
"BROADBASE OPTION" has the meaning set forth in Section
2.1(a)(iii).
"BROADBASE STOCKHOLDER" means a holder of shares of Broadbase's
capital stock, including Broadbase common stock.
"CONTRACT" means, with respect to any person, any written or oral
agreement, contract, understanding, arrangement, instrument, note, guaranty,
indemnity, representation, warranty, deed, assignment, power of attorney,
purchase order, work order, commitment, covenant, obligation, promise or
undertaking of any nature to which such person is a party or by which its
properties or assets may be bound.
"CONVERSION RATIO" means the ratio of Exchange Shares into which
each share of Servicesoft Common Stock shall be converted pursuant to Section
2.1(a).
"ESCROW AGENT" has the meaning set forth in Section 2.2(a).
"ESCROW PERIOD" means that time period beginning at the Effective
Time and ending at 12:01 a.m. on the first anniversary of the Closing Date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE SHARES" means the shares of Broadbase common stock to be
issued to Servicesoft Stockholders in the Merger pursuant to Section 2.1.
"GAAP" means U.S. generally accepted accounting principles,
applied on a consistent basis.
"HSR ACT" has the meaning set forth in Section 2.5.
"KNOWLEDGE" when used with respect to any entity, means the actual
knowledge of the executive officers of such entity, after due inquiry. For these
purposes, "executive officer" will include the president, chief executive
officer, chief financial officer, any managing director, any vice president, and
the general counsel of such entity.
"MATERIAL ADVERSE EFFECT" when used in connection with an entity
means any change, event, circumstance or effect that is materially adverse to
the business, employees, assets (including
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intangible assets), capitalization, financial condition, operations or results
of operations of such entity taken as a whole with its subsidiaries, unless such
entity can sustain the burden of proving that any such change, event,
circumstance or effect results from (i) changes in general economic conditions,
or (ii) changes affecting the industry generally in which the entity operates
which do not affect such entity disproportionately.
"SERVICESOFT ANCILLARY AGREEMENTS" has the meaning set forth in
Section 4.4(a).
"SERVICESOFT CANADA" means Servicesoft Technologies Canada, a
corporation organized under the laws of Canada.
"SERVICESOFT CANADA COMMON STOCK" means the shares of common stock
of Servicesoft Canada which are exchangeable on a one-for-one basis into shares
of Servicesoft Common Stock.
"SERVICESOFT CANADA PREFERRED STOCK" means the shares of preferred
stock of Servicesoft Canada which are exchangeable on a one-for-one basis into
shares of Servicesoft Series H Preferred Stock.
"SERVICESOFT COMMON STOCK" means the shares of common stock of
Servicesoft, par value $.01 per share.
"SERVICESOFT CONTRACT" means any Contract: (a) to which
Servicesoft is a party; or (b) by which Servicesoft or any of its assets is
bound or subject to any obligation.
"SERVICESOFT DISCLOSURE LETTER" means that disclosure letter dated
as of the date hereof and provided by Servicesoft to Broadbase and Newco
simultaneously with the execution and delivery of this Agreement.
"SERVICESOFT OPTION" has the meaning set forth in Section 4.3(b).
"SERVICESOFT PREFERRED STOCK" means the shares of Series H
Convertible Preferred Stock of Servicesoft, par value $.01, shares of Series I
Convertible Preferred Stock of Servicesoft, par value $.01, shares of Series J
Convertible Preferred Stock of Servicesoft, par value $.01, one share of Series
X Special Voting Preferred Stock, par value $.01, and one share of Series Y
Special Voting Preferred Stock, par value $.01.
"SERVICESOFT SERIES H PREFERRED STOCK" means the shares of Series
H Convertible Preferred Stock of Servicesoft, par value $.01.
"SERVICESOFT STOCKHOLDER" means a holder of shares of
Servicesoft's capital stock, including Servicesoft common stock.
"SERVICESOFT WARRANT" has the meaning set forth in Section 4.3(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
2. PLAN OF MERGER
2.1 The Merger. The Certificate of Merger will be filed with
the Secretary of State of the State of Delaware as soon as practicable after the
"Closing" (as defined in Section 8.1). The effective time of the Merger (the
"EFFECTIVE TIME") shall be the time of filing of the Certificate of Merger
unless otherwise specified in the Certificate of Merger. On the terms and
subject to the conditions of this Agreement and the Certificate of Merger, at
the Effective Time, Newco will be merged with and into Servicesoft (such
remaining entity, as appropriate, the "SURVIVING CORPORATION") in a statutory
merger pursuant to the Certificate of Merger and in accordance with applicable
provisions of Delaware Law as follows:
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(a) Conversion of Servicesoft Securities.
(i) Conversion of Servicesoft Shares. On the
terms and subject to the conditions of this Agreement, at the Effective Time,
(i) each share of Servicesoft Common Stock and Servicesoft Preferred Stock that
is issued and outstanding immediately prior to the Effective Time, including
shares of Servicesoft Common Stock or Servicesoft Preferred Stock issued or
issuable upon the exchange of Servicesoft Canada Common Stock and Servicesoft
Canada Preferred Stock, but excluding any Dissenting Shares (as defined in
Section 2.1(a)(ii)) and any shares of Servicesoft Series X Preferred Stock and
Servicesoft Series Y Preferred Stock, will, by virtue of the Merger and at the
Effective Time without further action on the part of any holder thereof (except
as expressly provided herein) be converted into and represent the right to
receive 1.4404 Exchange Shares and (ii) each share of Servicesoft Series X
Preferred Stock and Servicesoft Series Y Preferred Stock that is issued and
outstanding immediately prior to the Effective Time shall be redeemed for a
redemption price of $1.00.
(ii) Dissenting Shares. Holders of shares of
Servicesoft's capital stock who have duly complied with all requirements for
perfecting stockholders' rights of appraisal, as set forth in Section 262 of the
Delaware General Corporation Law ("DELAWARE LAW"), shall be entitled to their
rights under the Delaware Law with respect to such shares ("DISSENTING SHARES").
(iii) Assumption and Conversion of Servicesoft
Options and Restricted Stock.
(A) Effective at the Effective Time,
Broadbase will assume all outstanding Servicesoft Options, and each of the
Servicesoft Options shall by its terms be converted into an option to
purchase that number of shares of Broadbase common stock (a "BROADBASE
OPTION") which equals the number of shares of Servicesoft Common Stock
issuable pursuant to such Servicesoft Option immediately prior to the
Effective Time, multiplied by the Conversion Ratio, rounded down to the
nearest whole share. The per share exercise price for each Broadbase Option
will equal the per share exercise price of each such Servicesoft Option
immediately prior to the Effective Time divided by the Conversion Ratio,
rounded up to the nearest whole cent. No cash will be paid in lieu of
fractional shares which are rounded down pursuant to this Section 2.1(a)(iii)
(A). No Broadbase Options or Exchange Shares shall be issued with respect to
Servicesoft Options that are canceled subsequent to the date of this
Agreement and prior to the Effective Time.
(B) Continuation Of Vesting And
Repurchase Rights. If any shares of capital stock of Servicesoft
("SERVICESOFT CAPITAL STOCK") that are outstanding immediately prior to the
Effective Time are unvested or are subject to a repurchase option, risk of
forfeiture or other condition providing that such shares may be forfeited or
repurchased by Servicesoft, upon any termination of a stockholder's
employment, directorship or other relationship with Servicesoft (and/or any
affiliate of Servicesoft), as the case may be, under the terms of any
restricted stock purchase agreement or other agreement with Servicesoft, then
the Exchange Shares issued upon the conversion of such shares of Servicesoft
Capital Stock in the Merger will, subject to compliance with applicable laws,
continue to be unvested and subject to the same repurchase options, risks of
forfeiture or other conditions following the Effective Time, and the
certificates representing such Exchange Shares may accordingly be marked with
appropriate legends noting such repurchase options, risks of forfeiture or
other conditions. Servicesoft shall take all actions that may be necessary to
ensure that, from and after the Effective Time, Broadbase is entitled to
exercise any such repurchase option or other right set forth in any such
restricted stock purchase agreement or other agreement.
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(C) Terms of Assumption of Stock Options
and Restricted Stock; Vesting. The term, exercisability, vesting schedule,
status as an "incentive stock option" under Section 422 of the Code, if
applicable, and all other terms of each Broadbase Option will be the same in
all material respects as the corresponding Servicesoft Option, and no
material number of options or shares of restricted stock will be accelerated
as a result of the Merger, or actual or constructive termination of
employment following the Merger, except as set forth in Item 2.1(a)(iii)(C)
of the Servicesoft Disclosure Letter. Except as set forth in Item
2.1(a)(iii)(C) of the Servicesoft Disclosure Letter, no vesting of shares
subject to Servicesoft Options, warrants or restricted stock will be
accelerated as a result of the Merger or any event associated with the Merger
and if any holder of Servicesoft Options, warrants or restricted stock has
acceleration provisions that would be triggered by the Merger or any event
associated with the Merger, Servicesoft shall cause each such holder to waive
such acceleration provisions except for those Servicesoft Options, warrants
and restricted stock listed in Item 2.1(a)(iii)(C) of the Servicesoft
Disclosure Letter. Continuous employment with Servicesoft will be credited to
holders of Broadbase Options received upon exchange of Servicesoft Options
pursuant to Section 2.1(a)(iii)(A) for purposes of determining the vesting of
such Broadbase Options from and after the Effective Time.
(iv) Servicesoft Warrants and Preferred Stock.
(A) Assumption and Conversion of
Servicesoft Warrants. Effective at the Effective Time, Broadbase will assume
all outstanding Servicesoft Warrants (as defined in Section 4.3(b)), and each
of the Servicesoft Warrants shall by its terms be converted into a warrant to
purchase that number of shares of Broadbase common stock (a "BROADBASE
WARRANT") which equals the number of shares of Servicesoft Common Stock
issuable pursuant to such Servicesoft Warrant immediately prior to the
Effective Time, multiplied by the Conversion Ratio, rounded down to the
nearest whole share. The per share exercise price for each Broadbase Warrant
will equal the per share exercise price of each such Servicesoft Warrant
immediately prior to the Effective Time divided by the Conversion Ratio,
rounded up to the nearest whole cent. No cash will be paid in lieu of
fractional shares which are rounded down pursuant to this Section 2.1(a)(iv).
No Broadbase Warrants or Exchange Shares shall be issued with respect to
Servicesoft Warrants that are canceled subsequent to the date of this
Agreement and prior to the Effective Time.
(B) Preferred Stock. Prior to the Closing,
Servicesoft shall use all reasonable efforts to cause each holder of shares
of Servicesoft Preferred Stock to convert such shares of Servicesoft
Preferred Stock, effective as of and contingent upon the consummation of the
Merger, into Servicesoft Common Stock in accordance with the terms of the
applicable instruments and agreements governing such Servicesoft Preferred
Stock.
(v) Adjustment for Capital Changes. If prior to
the Merger, Broadbase or Servicesoft(A) recapitalizes either through a
split-up of the outstanding shares of Broadbase or Servicesoft capital stock
into a greater number, or through a combination of such outstanding shares
into a lesser number, (B) reorganizes, reclassifies or otherwise changes such
outstanding shares into the same or a different number of shares of other
classes or into securities of another company (other than through a split-up
or combination of shares provided for in the previous clause), or (C)
declares a dividend on its outstanding shares payable in shares or securities
convertible into shares, the calculation of the Conversion Ratio and the
Escrow Shares (as defined in Section 2.2(b)) will be adjusted appropriately
so as to maintain the proportionate interests of the Servicesoft Stockholders
and the holders of shares of Broadbase capital stock at the time of such
recapitalization.
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(vi) Fractional Shares. No fractional shares of
Broadbase common stock will be issued in connection with the Merger. However, in
lieu thereof, each Servicesoft Stockholder who would otherwise be entitled to
receive a fraction of a share of Broadbase common stock (excluding with respect
to Servicesoft Options) will receive from Broadbase, together with the Exchange
Shares to be delivered to such Servicesoft Stockholder, pursuant to Section
8.2(a)(i), an amount of cash equal to the product obtained by multiplying (A)
the closing price of a share of Broadbase common stock on the Nasdaq National
Market on the last trading day before the Effective Time by (B) the fraction of
a share of Broadbase common stock that such holder would otherwise have been
entitled to receive.
(b) Effects of the Merger. At the Effective Time: (i)
Newco will merge with and into Servicesoft, Servicesoft will be the Surviving
Corporation pursuant to the terms of the Certificate of Merger and the separate
existence of Newco will thereupon cease; (ii) each share of Servicesoft Common
Stock and each Servicesoft Option outstanding immediately prior to the Effective
Time will be converted as provided in this Section 2.1, subject to the escrow
provisions of Section 2.2; (iii) each share of common stock of Newco that is
issued and outstanding immediately prior to the Effective Time will, by virtue
of the Merger and without further action on the part of the sole stockholder of
Newco, be converted into and become one share of common stock of the Surviving
Corporation (and the shares of Surviving Corporation into which the shares of
Newco common stock are so converted shall be the only shares of Servicesoft
Common Stock that are issued and outstanding immediately after the Effective
Time); (iv) the certificate of incorporation and bylaws of Servicesoft shall be
amended and restated to contain provisions in substantially the form set forth
in the certificate of incorporation and bylaws of Newco; (v) the sole director
and officers of Newco immediately prior to the Effective Time will become the
sole director and officers of the Surviving Corporation; (vi) each share of
Servicesoft's capital stock held by Servicesoft or owned by Newco, Broadbase or
any direct or indirect wholly-owned subsidiary of Servicesoft or of Broadbase
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof; and (vii) the Merger will, from and after the
Effective Time, have all of the effects provided by applicable law.
2.2 Escrow
(a) Escrow Agent. State Street Bank and Trust Company of
California, N.A., or such other escrow agent selected by Broadbase prior to the
Closing and reasonably acceptable to Servicesoft (the "ESCROW AGENT") shall
hold, release and perform other tasks related to the Escrow Shares pursuant to
the provisions of the Escrow Agreement.
(b) Escrow Shares. Broadbase shall withhold from the
number of Exchange Shares to be issued to each Servicesoft Stockholder pursuant
to Section 2.1(a)(i), upon surrender of such Stockholder's Servicesoft
Certificates, that number of Exchange Shares equal to ten percent (10%) of the
Exchange Shares to be issued to such Servicesoft Stockholder pursuant to Section
2.1(a)(i), rounded to the nearest whole share (collectively, the "ESCROW
SHARES"). As soon as practicable after the Effective Time, and in accordance
with the provisions of the Escrow Agreement, Broadbase will deposit with the
Escrow Agent certificates representing the Escrow Shares, issued in the name of
each Servicesoft Stockholder according to the number of Escrow Shares withheld
from such Servicesoft Stockholder hereunder, together with related stock
transfer powers.
For the purposes of this Agreement and the Escrow
Agreement, Escrow Shares will be deemed to have a per share value equal to the
average of the closing prices of Broadbase Common Stock for the 10 trading days
ending 2 trading days prior to the Closing (provided that such price shall be
subject to adjustment to reflect any capital change in Broadbase of the type
referred to in Section 2.1(a)(v), whether occurring at or after the Effective
Time, and Broadbase shall promptly provide the Escrow Agent with written notice
of such capital change) as provided in the Escrow Agreement.
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(c) Escrow Period. The Escrow Agent will hold the Escrow
Shares and any dividends and distributions on the Escrow Shares as collateral
for Servicesoft's indemnification obligations, and shall release such Escrow
Shares and any dividends or distributions thereon in accordance with the terms
of the Escrow Agreement and Article 12.
(d) Consent to Escrow Agreement. In the event that the
Merger is approved by the Servicesoft Stockholders as provided herein, the
Servicesoft Stockholders shall, without any further act of any Servicesoft
Stockholder, be deemed to have consented to and approved (i) the use of the
Escrow Shares as collateral for Servicesoft's indemnification obligations under
Article 12 in the manner set forth in the Escrow Agreement, (ii) the appointment
of Mark Skapinker as the representative of the Servicesoft Stockholders (the
"REPRESENTATIVE") under the Escrow Agreement and as the attorney-in-fact and
agent for and on behalf of each Servicesoft Stockholder (other than holders of
Dissenting Shares), and the taking by the Representative of any and all actions
and the making of any decisions required or permitted to be taken by him under
the Escrow Agreement (including, without limitation, exercising the power to:
authorize delivery to Broadbase of Escrow Shares in satisfaction of claims by
Broadbase; agreeing to, negotiating, entering into settlements and compromises
of and demanding arbitration and complying with orders of courts and awards of
arbitrators with respect to such claims; resolving any claim made pursuant to
Section 12.2; and taking all actions necessary in the judgment of the
Representative for the accomplishment of the foregoing) and (iii) to all of the
other terms, conditions and limitations in the Escrow Agreement.
2.3 Securities Law Compliance.
(a) Issuance of Exchange Shares in Exchange for
Servicesoft Common Stock. The offer, sale and issuance of the Exchange Shares to
be issued in the Merger shall be registered under the Securities Act on Form S-4
promulgated thereunder. As promptly as practicable after the date of this
Agreement, Broadbase and Servicesoft shall prepare and file with the SEC a Form
S-4 registration statement (the "FORM S-4") together with the prospectus/proxy
statement included therein (the "PROSPECTUS/PROXY STATEMENT") and any other
documents required by the Securities Act or the Exchange Act in connection with
the Merger. Each of Broadbase and Servicesoft shall use all reasonable efforts
to have the Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. Broadbase shall also take any action required to
be taken under any applicable state securities or "Blue Sky" laws in connection
with the issuance of the Exchange Shares in the Merger. Servicesoft shall
furnish to Broadbase all information concerning Servicesoft and the Servicesoft
Stockholders as may be reasonably requested in connection with any action
contemplated by this Section 2.3(a). Broadbase shall furnish to Servicesoft all
information concerning Broadbase as may be reasonably requested in connection
with any action contemplated by this Section 2.3(a).
(b) Issuance of Exchange Shares Pursuant to Exercises of
Exchange Options. Broadbase shall cause the Exchange Shares that are issuable
upon exercise of the Broadbase Options to be registered under the Securities Act
on Form S-8 or any other applicable form within 15 days after the Closing Date.
Broadbase will use reasonable efforts to maintain the effectiveness of such
registration statement (and maintain the current status of the prospectus or
prospectuses incorporated therein) so long as the Broadbase Options (or shares
issued upon exercise thereof) remain outstanding.
(c) Resale of Exchange Shares. Holders of Exchange
Shares will be wholly responsible for compliance with all federal and state
securities laws regarding the sale, transfer or other disposition of such
shares.
2.4 Tax and Accounting Aspects of the Merger.
(a) Tax Free Reorganization. The parties intend to adopt
this Agreement as a tax-free plan of reorganization and to consummate the Merger
in accordance with the provisions of
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Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Code. The parties to this
Agreement hereby adopt this Agreement as a "plan of reorganization" within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury
Regulations.
(b) Accounting Treatment. The parties intend that the
Merger be treated as a "purchase" for accounting purposes.
2.5 Antitrust. Each of Broadbase and Servicesoft will promptly
prepare and file the applicable notices (if any) required to be filed by it
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR ACT"),
and comply promptly with any requests to it from the Federal Trade Commission or
United States Department of Justice for additional information.
2.6 Further Assurances. Servicesoft agrees that if, at any time
before or after the Effective Time, Broadbase considers or is advised that any
further deeds, assignments or assurances are reasonably deemed necessary or
desirable by Broadbase to vest, perfect or confirm in Broadbase title to any
property or rights of Servicesoft or the Surviving Corporation as provided
herein, Broadbase, the Surviving Corporation and their respective proper
officers and directors are hereby authorized by Servicesoft to execute and
deliver all such proper deeds, assignments and assurances and do all other
things necessary or reasonably deemed by Broadbase to be desirable to vest,
perfect or confirm title to such property or rights in Broadbase and otherwise
to carry out the purpose of this Agreement, in the name of Servicesoft or
otherwise. The officers and directors of Broadbase, Servicesoft, and the
Surviving Corporation will take all such other lawful and necessary or desirable
action to carry out the purposes of this Agreement.
3. ADDITIONAL AGREEMENTS
3.1 Public Announcement. Broadbase and Servicesoft will issue a
press release approved by both parties announcing the Merger as soon as
practicable following the execution of this Agreement. Thereafter, Broadbase and
Servicesoft may issue such press releases, and make such other disclosures
regarding the Merger, as they determine are required under applicable securities
laws or regulatory rules provided that such press releases or other disclosures
regarding the Merger shall not be made without the prior consent and approval of
both parties with respect to the content of such releases and disclosures and
with respect to the decision to release such press releases or disclosures.
Servicesoft will take all reasonable precautions to prevent any trading in the
securities of Broadbase by officers, directors, employees and agents of
Servicesoft, having knowledge of any material information regarding Broadbase
provided hereunder, including, without limitation, the existence of the
transactions contemplated by this Agreement until the information in question
has been publicly disclosed.
3.2 Fees and Expenses. Each party will bear its respective
expenses and fees of its own accountants, attorneys, investment bankers and
other professionals incurred with respect to this Agreement and the transactions
contemplated hereby. Any such fees and expenses of Servicesoft in excess of
$500,000, excluding the fees and expenses of investment bankers, ("EXCESS
EXPENSES"), shall be paid by the Servicesoft Stockholders. All other fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Broadbase and
Servicesoft shall share equally all fees and expenses, other than attorneys' and
accountants fees and expenses, incurred in relation to the printing and filing
with the SEC of the Form S-4 (including financial statements and exhibits) and
any amendments or supplements thereto) and the Proxy Statement/Prospectus
(including any preliminary materials related thereto).
3.3 Resale Restrictions. No "Servicesoft Affiliate" (as such
term is defined in Section 6.15) will, directly or indirectly, sell, transfer,
exchange, pledge or otherwise dispose of, or in any other way reduce such
Servicesoft Stockholder's risk of ownership or investment in, or make any
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offer or enter into any agreement relating to any of the foregoing with respect
to any shares of the capital stock of Broadbase (including, without limitation,
the Exchange Shares and any additional shares of capital stock of Broadbase
acquired by such Servicesoft Stockholder, whether upon exercise of a stock
option or otherwise), or any option or other right to purchase any shares of
capital stock of Broadbase, during the period beginning on the date of this
Agreement and ending on the date that is 90 days after the Closing Date.
Notwithstanding the foregoing, in the event Broadbase enters into an agreement
with respect to a Broadbase Acquisition (as such term is defined in Section
7.2(g)), the restrictions described in the previous sentence shall terminate on
the date that is two days after the record date for a Broadbase stockholders'
meeting to consider such Broadbase Acquisition, except with respect to a
Servicesoft Affiliate who is at such time an Affiliate (as defined in the
Securities Act) of Broadbase. Any such Servicesoft Affiliate shall be subject to
any and all restrictions on transfer that are applicable to all officers,
directors and other affiliates of Broadbase, whether by contract or pursuant to
Broadbase policy.
3.4 Integration Matters. Servicesoft and Broadbase will
cooperate in good faith to identify and, to the extent practicable, to resolve
matters regarding the orderly integration of their respective operations.
4. REPRESENTATIONS AND WARRANTIES OF SERVICESOFT
Except as set forth in the Servicesoft Disclosure Letter delivered
to Broadbase and Newco herewith, (which, subject to Section 13.14, shall
specifically refer to the Sections of this Agreement to which the specific Items
of the Servicesoft Disclosure Letter therein constitute an exception),
Servicesoft hereby represents and warrants to Broadbase as follows:
4.1 Organization and Good Standing. Servicesoft and each
Subsidiary (as defined in Section 4.2) is a corporation duly organized, validly
existing and, where applicable, in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority, and all requisite qualifications to do business as a foreign
corporation, to conduct its business in the manner in which its business is
currently being conducted, except where the failure to be so organized, existing
or in good standing or to have such power, authority or qualifications would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Servicesoft. Except as set forth on Item 4.1 of the
Servicesoft Disclosure Letter, Servicesoft has delivered or made available to
Broadbase a true and correct copy of its certificate of incorporation and bylaws
and similar governing instruments of each Subsidiary, each as amended to date
(collectively, the "SERVICESOFT CHARTER DOCUMENTS"), and each such instrument is
in full force and effect. Neither Servicesoft nor any Subsidiary is in violation
of any of the provisions of the Servicesoft Charter Documents. Servicesoft has
delivered or made available to Broadbase all proposed or considered amendments
to the Servicesoft Charter Documents.
4.2 Subsidiaries and Guarantees. Except for the subsidiaries of
Servicesoft listed in Item 4.2 of the Servicesoft Disclosure Letter
(collectively the "SUBSIDIARIES" and each a "SUBSIDIARY"), Servicesoft does not
have any subsidiaries or any interest, direct or indirect, in any corporation,
partnership, joint venture or other business entity. Neither Servicesoft nor any
Subsidiary has agreed or is obligated to make, or is bound by any written
agreement, contract, subcontract, lease, letter of intent, instrument, note,
option, warranty, purchase order, license, sublicense, insurance policy, or
benefit plan as in effect as of the date hereof pursuant to which it is required
to make any future investment in or capital contribution to any other entity.
Neither Servicesoft, nor any Subsidiary, is a general partner of any general
partnership, limited partnership or other entity. Item 4.2 of the Servicesoft
Disclosure Letter indicates the jurisdiction of organization of each entity
listed therein and Servicesoft's direct or indirect equity interest therein.
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4.3 Capitalization.
(a) Authorized/Outstanding Capital Stock. As of the
close of business on September 18, 2000, the authorized capital stock of
Servicesoft consists solely of 30,000,000 shares of Servicesoft Common Stock and
16,450,002 shares of Servicesoft Preferred Stock, 8,000,000 of which are
designated as Series H Convertible Preferred Stock, 4,450,000 are designated as
Series I Convertible Preferred Stock, 4,000,000 are designated as Series J
Convertible Preferred Stock, 1 is designated as Series X Special Preferred Stock
and 1 is designated as Series Y Special Preferred Stock. As of the date hereof,
there are issued and outstanding 4,257,439 shares of Servicesoft Common Stock,
7,364,796 shares of Servicesoft's Series H Preferred Stock (each of which is
convertible into one share of Servicesoft common stock), 3,982,271 shares of
Servicesoft's Series I Preferred Stock (each of which is convertible into one
share of Servicesoft common stock), 3,481,478 shares of Servicesoft's Series J
Preferred Stock (each of which is convertible into one share of Servicesoft
common stock), 1 share of Servicesoft's Series X Special Preferred Stock, and 1
share of Servicesoft's Series Y Special Preferred Stock. Except as set forth on
Item 4.3(a) of the Servicesoft Disclosure Letter, all issued and outstanding
shares of Servicesoft Common Stock and Servicesoft Preferred Stock have been
duly authorized and validly issued, are fully paid and nonassessable, are not
subject to any right of rescission, are not subject to preemptive rights or
rights of first refusal by statute, Servicesoft's certificate of incorporation
or bylaws, or any agreement or document to which Servicesoft is a party or by
which it is bound, and have been offered, issued, sold and delivered by
Servicesoft in compliance with all registration or qualification requirements
(or applicable exemptions therefrom) of applicable federal and state securities
laws. A list of all holders of Servicesoft capital stock and the number of
shares held by each as of the date hereof is set forth in Item 4.3(a) of the
Servicesoft Disclosure Letter, to be updated as of the Closing Date.
(b) Options/Warrants/Rights. As of the close of business
on September 18, 2000: (i) options to purchase 4,191,331 shares of Servicesoft
Common Stock (the "SERVICESOFT OPTIONS") have been issued and are outstanding;
(ii) warrants to purchase 20,782 shares of Servicesoft Common Stock have been
issued and are outstanding; and (iii) warrants to purchase 63,025 shares of
Servicesoft Series H Preferred Stock have been issued and are outstanding, (the
warrants in (ii) and (iii) are collectively referred to as the "SERVICESOFT
WARRANTS"). A list of all holders of Servicesoft Options and Servicesoft
Warrants is set forth in Item 4.3(b) of the Servicesoft Disclosure Letter. Item
4.3(b) of the Servicesoft Disclosure Letter lists for each person who holds
Servicesoft Options or Servicesoft Warrants, the exercise price for each such
Servicesoft Option or Servicesoft Warrant, the number of shares or other
securities covered by each such Servicesoft Option or Servicesoft Warrant, the
term of exercisability of each such Servicesoft Option or Servicesoft Warrant,
the vesting schedule, the extent each such Servicesoft Option or Servicesoft
Warrant is vested as of the date hereof and whether the vesting of such
Servicesoft Option or Servicesoft Warrant will be accelerated as a result of the
Merger or upon any other event. In addition, Item 4.3(b) of the Servicesoft
Disclosure Letter lists all holders of shares of Servicesoft restricted stock
and for each such person, the number of shares of Servicesoft Restricted Stock
held, the terms of Servicesoft's right to repurchase such Servicesoft Restricted
Stock, the schedule on which such rights lapse and whether such repurchase
rights arise in full or in part as a result of the Merger or upon any other
event. Servicesoft has delivered to Broadbase accurate and complete copies of
all plans pursuant to which Servicesoft has ever granted stock options or
warrants. Except as set forth in Section 4.3(a), this Section 4.3(b) and in Item
4.3(b) of the Servicesoft Disclosure Letter, there is no: (i) outstanding
preemptive right, right of first refusal, stock appreciation right,
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire from Servicesoft or, to Servicesoft's knowledge, from
affiliates of Servicesoft, any shares of the capital stock or other securities
of Servicesoft; (ii) outstanding security, instrument or obligation issued by
Servicesoft or controlled affiliates of Servicesoft, that is or may become
convertible into or exchangeable for any shares of the capital stock or other
securities of Servicesoft; (iii) stockholders' rights plan (or similar plan
commonly referred to as a "poison pill") or Contract under which Servicesoft or
any successor of
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Servicesoft is or may become obligated to sell or otherwise issue any shares of
its capital stock or any other securities; (iv) Contract to which Servicesoft is
a party relating to the voting or registration of or restricting any person from
purchasing, selling, pledging or otherwise disposing of (or granting any option
or similar right with respect to) any shares of Servicesoft Common Stock; (v)
liability for dividends accrued but unpaid; or (vi) condition or circumstance,
to Servicesoft's knowledge, that likely would directly or indirectly give rise
to or provide a basis for the assertion of a claim by any person to the effect
that such person is entitled to acquire or receive any shares of capital stock
or other securities of Servicesoft, including but not limited to promises to
issue or grant securities of Servicesoft or to recommend to Servicesoft's board
of directors to issue or grant securities of Servicesoft.
(c) Except as set forth in Item 4.3(c) of the
Servicesoft Disclosure Letter, Servicesoft is not under any obligation to
register under the Securities Act the resale of any of its presently outstanding
securities or any securities that may be subsequently issued.
(d) To Servicesoft's knowledge: (i) no Servicesoft
Stockholder has claimed any interest in any additional shares of capital stock
of Servicesoft, or any options, warrants or other securities of Servicesoft,
except for the number of shares of Servicesoft Common Stock or Servicesoft
Preferred Stock which such person is shown to be the owner of in Item 4.3(a) and
any Servicesoft Options and Servicesoft Warrants which such person is shown to
be the owner of in Item 4.3(b); and (ii) no third party who is not listed in
Item 4.3(a) or Item 4.3(b) has made, or has, any claim of entitlement to receive
any shares of the capital stock of Servicesoft, any warrants or other rights to
acquire any capital stock of Servicesoft or any other securities of Servicesoft.
4.4 Power, Authorization and Non-Contravention.
(a) Servicesoft and each Subsidiary has the corporate
power and authority to: (i) carry on its business as now conducted; (ii) own,
operate and lease its properties in the manner in which its properties are
currently owned, used and leased and in the manner in which its properties are
proposed to be owned, used and leased; (iii) perform its obligations under all
Servicesoft Contracts, and (iv) enter into and perform its obligations under
this Agreement and all agreements to which Servicesoft is or will be a party
that are required to be executed pursuant to or in connection with this
Agreement (the "SERVICESOFT ANCILLARY AGREEMENTS"). The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Servicesoft, subject only to the approval and adoption of this Agreement and the
approval of the Merger by Servicesoft's stockholders (the "SERVICESOFT
STOCKHOLDER APPROVAL") and the filing of the Certificate of Merger pursuant to
Delaware Law. The affirmative vote of the holders of (i) a majority of the
outstanding shares of Servicesoft Common Stock, Series H Preferred Stock, Series
I Preferred Stock, Series J Preferred Stock, Series X Special Preferred Stock
and Series Y Special Voting Preferred Stock, all voting together as a single
class, and (ii) a majority of the outstanding shares of Servicesoft Series H
Preferred Stock, Series I Preferred Stock, Series J Preferred Stock and Series Y
Special Voting Preferred Stock, all voting together as a single class, is
sufficient for the Servicesoft Stockholder Approval, and no other approval of
any holder of any securities of Servicesoft is required in connection with the
consummation of the transactions contemplated hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality, foreign or
domestic ("GOVERNMENTAL ENTITY") or other person, is required to be obtained or
made by Servicesoft in connection with the execution and delivery of this
Agreement or the consummation of the Merger, except for: (i) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which
Servicesoft is qualified to do business, (ii) the filing of the Form S-4 and
Prospectus/Proxy Statement with the SEC, each in accordance with the Securities
Act and the Exchange Act, and the
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effectiveness of the Form S-4, (iii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal, foreign and state securities (or related) laws and the HSR
Act, and the securities or antitrust laws of any foreign country, and (iv) such
other consents, authorizations, filings, approvals and registrations which if
not obtained or made would not be material to Servicesoft, Broadbase or the
Surviving Corporation or prevent, alter or materially delay the consummation of
the Merger or any of the other transactions contemplated hereby.
(c) The Servicesoft Stockholders that have executed
Voting Agreements collectively own shares of Servicesoft Common Stock and
Servicesoft Preferred Stock representing, in the aggregate, voting power
sufficient to approve the Merger.
(d) This Agreement and the Servicesoft Ancillary
Agreements are, or when executed and delivered by Servicesoft and the other
parties thereto will be, valid and binding obligations of Servicesoft
enforceable against Servicesoft in accordance with their respective terms,
except as to the effect, if any, of (i) applicable bankruptcy and other similar
laws affecting the rights of creditors generally, (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies and (iii)
the enforceability of provisions requiring indemnification; provided, however,
that the Certificate of Merger and the Servicesoft Ancillary Agreements will not
be effective until the earlier of the Effective Time and the date provided for
therein.
4.5 No Violation of Charter Documents, Contracts or Laws.
Except as set forth in Item 4.5 of the Servicesoft Disclosure Letter, neither
the execution and delivery of this Agreement or any Servicesoft Ancillary
Agreement, nor the consummation of the transactions provided for herein or
therein, will conflict with, or (with or without notice or lapse of time, or
both) result in a termination, breach, impairment or violation of: (a) any
provision of the certificate of incorporation, bylaws or other charter documents
of Servicesoft or any Subsidiary, as currently in effect; (b) any material
Servicesoft Contract; or (c) any federal, state, local or foreign judgment,
writ, decree, order, statute, rule or regulation applicable to Servicesoft or
its assets or properties, or any Subsidiary or its assets or properties. The
consummation of the Merger and succession by Broadbase to all material rights,
licenses, franchises, leases and agreements of Servicesoft and each Subsidiary
will not require the consent of any third party.
4.6 Documents and Disclosures.
(a) Servicesoft has provided to Broadbase, or to counsel
for Broadbase, for examination true and complete copies of all documents and
information listed in the Servicesoft Disclosure Letter or other exhibits called
for by this Agreement, including, without limitation, the following: (i) copies
of Servicesoft's certificate of incorporation, bylaws and other charter
documents, as currently in effect; (ii) Servicesoft's minute book containing all
records of all proceedings, consents, actions and meetings of the Stockholders,
the Board of Directors and any committees of the Board of Directors of
Servicesoft; (iii) Servicesoft's stock ledger; (iv) all material permits, orders
and consents issued by any regulatory agency with respect to Servicesoft; and
(v) to the extent available, all of the foregoing documents and information with
respect to the Subsidiaries.
(b) The books of account, stock records, minute books
and other records of Servicesoft: (i) are in all material respects true and
complete and (ii) have been maintained in accordance with reasonable business
practices. The books of account of Servicesoft are stated in reasonable detail
and accurately and fairly reflect in all material respects the transactions and
dispositions of the assets of Servicesoft as required by GAAP. Servicesoft has
devised and maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (a) transactions are executed in accordance
with management's general or specific authorization; (b) transactions are
recorded as necessary (i) to permit preparation of financial statements in
conformity with GAAP, and (ii) to maintain accountability for assets; and (c)
the amount recorded for assets on the books and records of Servicesoft
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and its Subsidiaries is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(c) Servicesoft has furnished to Broadbase a true and
complete copy of each registration statement and other filing filed with the SEC
by Servicesoft (collectively, the "SERVICESOFT SEC DOCUMENTS"). Except as set
forth in Item 4.6(c) of the Servicesoft Disclosure Letter, as of their
respective dates, the Servicesoft SEC Documents: (i) were prepared in accordance
with the requirements of the Securities Act and the rules and regulations of the
SEC thereunder applicable to such Servicesoft SEC Documents; and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except to
the extent corrected prior to the date of this Agreement by a subsequently filed
Servicesoft SEC Document. Neither Servicesoft, nor any Subsidiary is required to
file any forms, reports or other documents with the SEC.
4.7 Servicesoft Financial Statements. Each of the consolidated
financial statements (including, in each case, any related notes thereto)
contained in the registration statement on Form S-1 (Registration Statement No.
333-30476), as amended by Amendment No. 4 thereto, filed with the SEC on August
25, 2000 (the "SERVICESOFT S-1") (such financial statements, the "SERVICESOFT
FINANCIAL STATEMENTS"): (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto; (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto); and (iii)
fairly presented the consolidated financial position of Servicesoft and its
Subsidiaries as at the respective dates thereof and the consolidated results of
Servicesoft's and its Subsidiaries' operations and cash flows for the periods
indicated, except that the unaudited interim financial statements may not
contain footnotes and were or are subject to normal and recurring year-end
adjustments. Except as set forth in Item 4.7 of the Servicesoft Disclosure
Letter, since Servicesoft's June 30, 2000 balance sheet (the "SERVICESOFT
BALANCE SHEET", with June 30, 2000 hereinafter referred to as the "SERVICESOFT
BALANCE SHEET DATE") contained in the Servicesoft S-1, neither Servicesoft nor
any Subsidiary has any liabilities (absolute, accrued, contingent or otherwise)
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of Servicesoft and the Subsidiaries taken
as a whole, except for (i) liabilities incurred since the Servicesoft Balance
Sheet Date in the ordinary course of business consistent with past practices,
(ii) liabilities incurred pursuant to this Agreement or with the prior written
consent of Broadbase, and (iii) contingent liabilities that are not probable and
that would not be required under GAAP to be set forth, reserved against or
disclosed on a balance sheet. There has been no change in Servicesoft's
accounting policies, except as described in the notes to the Servicesoft
Financial Statements.
4.8 Litigation. Except as set forth in Item 4.8 of the
Servicesoft Disclosure Letter, there is no action, suit, arbitration, mediation,
proceeding, claim or, to Servicesoft's knowledge, investigation pending against
Servicesoft or any Subsidiary, nor, to Servicesoft's knowledge, are any of the
foregoing threatened against Servicesoft or any Subsidiary before any court,
administrative agency or arbitrator that, if determined adversely to Servicesoft
or any Subsidiary, may reasonably be expected to have a Material Adverse Effect
on Servicesoft. There is no judgment, decree, injunction or ruling of an
administrative agency or arbitrator outstanding against Servicesoft or any
Subsidiary, except as may reasonably be expected to have a Material Adverse
Effect on Servicesoft or any Subsidiary of Servicesoft. To the knowledge of
Servicesoft, there is no basis for any person, firm, corporation or entity to
assert a claim against Servicesoft or any Subsidiary, or Broadbase as successor
in interest to Servicesoft, based upon: (a) ownership or rights to ownership of
any shares of Servicesoft common stock or other securities, (b) any rights as a
Servicesoft securities holder, including, without limitation,
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any option, warrant or other right to acquire any Servicesoft securities, any
preemptive rights or any rights to notice or to vote, or (c) any rights under
any agreement between Servicesoft and any Servicesoft securities holder or
former Servicesoft securities holder in such holder's capacity as such. As of
the date hereof, there is no action, suit, proceeding, claim, arbitration or
investigation pending as to which Servicesoft has received notice of assertion
against Servicesoft, which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay any of the transactions contemplated by this
Agreement.
4.9 Taxes.
(a) Except as set forth on Item 4.9(a) of the
Servicesoft Disclosure Letter, Servicesoft and each Subsidiary has timely filed
all federal, state, local and foreign, returns, estimates, information
statements and reports ("RETURNS") relating to "Taxes" (as defined below)
required to be filed by or on behalf of Servicesoft and each Subsidiary with any
"Tax" (as defined below) authority, such Returns are true, correct and complete
in all material respects, and Servicesoft and each Subsidiary has paid all Taxes
required to be paid, has made all necessary estimated tax payments, and has no
liability for taxes in excess of the amount so paid, except to the extent
adequate reserves have been established in the Financial Statements or, with
respect to taxes that are not yet due on or prior to the date of this Agreement
and which have become due thereafter, adequate reserves have been established by
Servicesoft prior to the Closing.
(b) Servicesoft and each Subsidiary has withheld all
federal and state income Taxes, Taxes pursuant to the Federal Insurance
Contribution Act ("FICA"), Taxes pursuant to the Federal Unemployment Tax Act
("FUTA") and other Taxes required to be withheld, except such Taxes which are
not material to Servicesoft.
(c) Except as set forth in Item 4.9(c) of the
Servicesoft Disclosure Letter, neither Servicesoft nor any Subsidiary has been
delinquent in the payment of any Tax nor is there any Tax deficiency
outstanding, or to the knowledge of Servicesoft, proposed or assessed against
Servicesoft or any of its subsidiaries, nor has Servicesoft or any Subsidiary
executed any currently effective waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax.
(d) Except as set forth in Item 4.9(d) of the
Servicesoft Disclosure Letter, no audit or other examination of any Return of
Servicesoft or any Subsidiary by any Tax authority is presently in progress, nor
has Servicesoft or any Subsidiary been notified of any request for such an audit
or other examination.
(e) No adjustment relating to any Returns filed by
Servicesoft or any Subsidiary has been proposed in writing formally or
informally by any Tax authority to Servicesoft or any Subsidiary or any
representative thereof.
(f) Except as set forth in Item 4.9(f) of the
Servicesoft Disclosure Letter, to Servicesoft's knowledge, neither Servicesoft
nor any Subsidiary has any liability for unpaid Taxes which has not been accrued
for or reserved on the Servicesoft Balance Sheet in accordance with GAAP,
whether asserted or unasserted, contingent or otherwise, other than any
liability for unpaid Taxes that may have accrued since the Servicesoft Balance
Sheet Date in connection with the operation of the business of Servicesoft and
the Subsidiaries in the ordinary course.
(g) Except as set forth in Item 4.9 of the Servicesoft
Disclosure Letter, there is no agreement, plan or arrangement to which
Servicesoft or any Subsidiary is a party, including this Agreement and the
agreements entered into in connection with this Agreement, covering any employee
or former employee of Servicesoft or any Subsidiary, individually or
collectively, would be reasonably likely to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of
the Code. There is no contract, agreement, plan or arrangement to which the
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Servicesoft is a party or by which it is bound to compensate any individual for
excise Taxes paid pursuant to Section 4999 of the Code.
(h) Neither Servicesoft nor any Subsidiary has filed any
consent agreement under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by Servicesoft.
(i) Neither Servicesoft nor any Subsidiary is party to
or has any obligation under any Tax-sharing, Tax indemnity or Tax allocation
agreement or arrangement.
(j) Except as may be required as a result of the Merger,
Servicesoft and the Subsidiaries have not been required to include any
adjustment in Taxable income for any Tax period (or portion thereof) ending
after the Effective Time pursuant to Section 481 of the Code or any comparable
provision under state or foreign Tax laws as a result of transactions, events or
accounting methods employed prior to the Closing Date.
(k) None of Servicesoft's or any Subsidiary's assets are
Tax exempt use property within the meaning of Section 168(h) of the Code.
(l) Servicesoft has not been distributed in a
transaction qualifying under Section 355 of the Code within the last two years,
nor has Servicesoft distributed any corporation in a transaction qualifying
under Section 355 of the Code within the last two years.
For the purposes of this Agreement, "Tax" or "Taxes" refers
to (i) any and all federal, state, local and foreign Taxes, assessments and
other governmental charges, duties, impositions and liabilities relating to
Taxes, including Taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
Taxes, together with all interest, penalties and additions imposed with respect
to such amounts, (ii) any liability for payment of any amounts of the type
described in clause (i) as a result of being a member of an affiliated
consolidated, combined or unitary group, and (iii) any liability for amounts of
the type described in clauses (i) and (ii) as a result of any express or implied
obligation to indemnify another person or as a result of any obligations under
any agreements or arrangements with any other person with respect to such
amounts and including any liability for Taxes of a predecessor entity.
4.10 Title to Properties.
(a) Except as set forth in Item 4.10 to the Servicesoft
Disclosure Letter, Servicesoft and each Subsidiary of Servicesoft has
good and marketable title to all of its assets as shown on the Servicesoft
Balance Sheet, free and clear of all liens, charges or encumbrances (other than
mechanics', carriers', workers' and other similar liens arising in the ordinary
course of business securing obligations not yet due and payable, liens for Taxes
not yet due and payable (all such liens "PERMITTED LIENS") and imperfections in
title which do not, individually or in the aggregate, prevent such assets from
being used for the purpose for which they are currently being used or otherwise
materially impair the operations of Servicesoft). The machinery and equipment
included in the assets of Servicesoft and the Subsidiaries is in all material
respects in good condition and repair, normal wear and tear excepted. Neither
Servicesoft nor any Subsidiary is in violation of any material zoning, building,
safety or environmental ordinance, regulation or requirement or other law or
regulation applicable to the operation of owned or leased properties, and
Servicesoft has not received any notice of such violation with which it has not
complied or had waived.
(b) Servicesoft and the Subsidiaries own no real
property. All leases of real or personal property to which Servicesoft or any
Subsidiary is a party are fully effective and afford Servicesoft or such
Subsidiary peaceful and undisturbed possession of the subject matter of the
lease. As
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a result of the transactions contemplated by this Agreement, the Surviving
Corporation will obtain a valid ownership or leasehold interest in all personal
property that Servicesoft or its Subsidiaries currently own or lease and all
real property that Servicesoft or its Subsidiaries currently lease, as of the
date of this Agreement, in each case free and clear of all title defects and
encumbrances of any kind, except: (i) Permitted Liens and (ii) imperfections in
title which do not, individually or in the aggregate, prevent such assets from
being used for the purpose for which they are currently being used or otherwise
materially impair the operations of Servicesoft.
4.11 Absence of Certain Changes or Events. Since the Servicesoft
Balance Sheet Date, Servicesoft and the Subsidiaries have carried on their
business in the ordinary course substantially in accordance with the procedures
and practices in effect on the Servicesoft Balance Sheet Date.
(a) Except as set forth in Item 4.11(a) of the
Servicesoft Disclosure Letter or permitted by the terms of this Agreement, since
the Servicesoft Balance Sheet Date there has not been with respect to
Servicesoft or any Subsidiary:
(i) any change, circumstance or effect that is or
is reasonably likely to be materially adverse to the business, employees, assets
(including intangible assets), capitalization, financial condition, operations
or results of operations of Servicesoft and its Subsidiaries, taken as a whole;
(ii) any contingent liability incurred by
Servicesoft or any Subsidiary as guarantor or surety with respect to the
obligations of others which exceed in the aggregate $100,000;
(iii) any mortgage, encumbrance or lien placed on
any of the properties of Servicesoft or any Subsidiary except: (A) mechanics',
carriers', workers' and other similar liens arising in the ordinary course of
business, and (B) liens for current Taxes not yet due and payable;
(iv) any purchase, license, sale or other
disposition, or any agreement or other arrangement for the purchase, license,
sale or other disposition, of any of the property (including Servicesoft IP
Rights, as defined in Section 4.12(b)), assets or goodwill of Servicesoft or any
of its Subsidiaries other than in the ordinary course of business and consistent
with past practice;
(v) any material damage, destruction or loss of
any material property or asset, whether or not covered by insurance;
(vi) any change in the compensation payable or to
become payable to any of Servicesoft's or any Subsidiary's directors, officers,
employees or consultants (other than normal raises) for non-officers in
connection with promotions or annual performance evaluations, in the ordinary
course of business consistent with past practice), or any change or agreement to
make any bonus or similar payment or arrangement made to or with any of such
directors, officers, employees or consultants, other than normal bonuses granted
or committed to be granted prior to the date of this Agreement;
(vii) any material change with respect to the
senior management of Servicesoft or any Subsidiary or the termination of the
employment of a material number of employees of Servicesoft and its
Subsidiaries; or
(viii) any loss of one or more material customers of
Servicesoft or any Subsidiary or such number of such customers which together
represent a material amount of business.
(b) Except as set forth in Item 4.11(b) or as permitted
by the terms of this Agreement, since the Servicesoft Balance Sheet Date neither
Servicesoft nor any Subsidiary has:
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(i) formed any subsidiary or acquired any equity
interest or other interest in any other entity;
(ii) amended their certificates of incorporation,
bylaws or any other charter document;
(iii) made any payment or discharged any material
lien or liability of Servicesoft or any Subsidiary, which lien or liability was
not either (A) shown on the balance sheet as of the Servicesoft Balance Sheet
Date included in the Servicesoft Financial Statements or (B) incurred in the
ordinary course of business after the Servicesoft Balance Sheet Date;
(iv) incurred any obligation or liability to any
of their officers, directors, stockholders or affiliates, or any loans or
advances made to any of its officers, directors, stockholders or affiliates,
except normal compensation and expense allowances payable to officers or
directors;
(v) sold, issued, granted or authorized the
issuance or grant of: (A) any shares of its capital stock of any class or other
security (other than (1) options issued to employees in the ordinary course of
business consistent with past practice and identified in Item 4.3(b) of the
Servicesoft Disclosure Letter (all of which had been granted as of the date of
this Agreement), or (2) pursuant to exercise of outstanding stock options and
warrants); (B) any option, call, warrant, obligation, subscription, or other
right to acquire any capital stock or any other security, except for stock
options described in Section 4.3 or (C) any instrument convertible into or
exchangeable for any capital stock or other security; or accelerated the vesting
of any outstanding option or other security, except for acceleration provisions
that are contained in existing stock option grants (each of which is listed in
Item 4.11(b));
(vi) declared, set aside or paid any dividend on,
or made any other distribution in respect of, their capital stock, or made any
changes in any rights, preferences, privileges or restrictions of any of their
outstanding capital stock;
(vii) effected any split, stock dividend,
combination or recapitalization of their capital stock or any direct or indirect
redemption, purchase or other acquisition by Servicesoft or any Subsidiary of
their capital stock;
(viii) effected or been a party to any transaction
relating to a merger, consolidation, sale of all or substantially all of their
assets, or similar transaction; or accepted or otherwise entered into any
Acquisition Proposal (as defined in Section 6.7(a));
(ix) executed, amended, relinquished, terminated
or failed to renew any material Contract, lease, transaction or legally binding
commitment other than in the ordinary course of its business (nor to
Servicesoft's knowledge, has there been any written or oral indication or
assertion by the other party thereto of its desire to so amend, relinquish,
terminate or not renew any such Contract, lease transaction or legally binding
commitment);
(x) deferred the payment of any accounts payable
outside the ordinary course of business or in an amount which is material or any
discount, accommodation or other concession made outside the ordinary course of
business in order to accelerate or induce the collection of any receivable;
(xi) borrowed any money other than in the ordinary
course of its business, and not in excess of $100,000 in the aggregate;
(xii) been the subject of any pending or, to
Servicesoft's knowledge, threatened labor dispute or claim of unfair labor
practices; or
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(xiii) made or entered into any agreement or
understanding to do any of the foregoing (other than as disclosed in Item
4.11(b)).
4.12 Intellectual Property.
(a) Definition. As used herein, the term "INTELLECTUAL
PROPERTY RIGHTS" shall mean all worldwide industrial and intellectual property
rights, including, without limitation, patents, patent applications, patent
rights, trademarks, trademark applications, trade names, service marks, service
mark applications, URLs, copyright, copyright applications, mask work rights,
moral rights, franchises, licenses, inventories, know-how, trade secrets,
customer lists, proprietary information, proprietary processes and formulae,
databases and data collections, all source and object code, algorithms,
architecture, structure, display screens, layouts, inventions, development tools
and all documentation and media constituting, describing or relating to the
above, including, without limitation, manuals, memoranda and records.
(b) Ownership of Intellectual Property. Servicesoft and
each Subsidiary of Servicesoft owns all right, title and interest in, or has
license (sufficient for the conduct of its business as presently conducted), to
all Intellectual Property Rights used in or reasonably necessary to the conduct
of its business as presently conducted (with such Intellectual Property Rights
being hereinafter collectively referred to as the "SERVICESOFT IP RIGHTS").
Except as set forth in Item 4.12(b)(i) of the Servicesoft Disclosure Letter,
Servicesoft has the unrestricted, worldwide right to design, develop, use,
reproduce, manufacture, sell, license and distribute all of its products and
services (such products and services being set forth in Item 4.12(b)(ii) of the
Servicesoft Disclosure Letter and hereinafter collectively referred to as the
"SERVICESOFT PRODUCTS AND SERVICES") as such Servicesoft Products and Services
are currently being designed, developed, used, reproduced, manufactured, sold,
licensed and distributed, and the right to use all of its customer and supplier
lists. Except as set forth in Item 4.12(b)(iii), neither Servicesoft nor any
Subsidiary has granted any reseller, distributor, sales representative, original
equipment manufacturer, value added reseller or other third party any right to
reproduce, manufacture, sell, license or distribute any of its products or
services in any market segment or geographic location. Set forth in Item
4.12(b)(iv) is a true and complete list of all copyright, mask work and
trademark registrations and applications and all patents and patent applications
for Servicesoft IP Rights owned by Servicesoft or its Subsidiaries. Except for
licensed materials pursuant to agreements set forth in Item 4.12(b)(i) of the
Servicesoft Disclosure Letter and except for widely available commercial
software licensed by Servicesoft from third parties on standard commercial
terms, all Servicesoft IP Rights are owned by Servicesoft or its U.S. or
Canadian Subsidiaries (or, with respect to customer lists of other Subsidiaries
or consulting work product created by other Subsidiaries, such other
Subsidiaries). Except as set forth in Item 4.12(b)(i) and Item 4.14 of the
Servicesoft Disclosure Letter, Servicesoft has not transferred ownership of or
granted any third parties any rights in or with respect to any Servicesoft IP
Rights, other than non-exclusive licenses granted in the ordinary course of
business. Servicesoft is not aware of any loss, cancellation, termination or
expiration of any such registration or patent except as set forth in Item
4.12(b)(v) of the Servicesoft Disclosure Letter. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of any instrument or
agreement governing any Servicesoft IP Right, will not cause forfeiture or
termination or give rise to a right of forfeiture or termination of any
Servicesoft IP Right or materially impair the right of Servicesoft to use, sell
or license any Servicesoft IP Right or portion thereof.
(c) No Violation of Rights of Others. The business of
Servicesoft and each Subsidiary of Servicesoft and the design, development, use,
manufacture, sale, license or provision of any Servicesoft Product and Service
does not, and will not as a result of the Merger, cause Servicesoft or any
Subsidiary of Servicesoft to infringe or violate any of the Intellectual
Property Rights of any other person nor will any claim of such infringement or
violation after the Effective Date arise from facts prior to the Effective Date;
provided that with respect to infringement of patents, the representation in the
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preceding clause of this sentence only relates to patents known to Servicesoft.
Except as set forth in Item 4.12(c) of the Servicesoft Disclosure Letter,
neither Servicesoft nor any Subsidiary has received any written or oral claim or
notice of infringement or potential infringement of the Intellectual Property
Rights of any other person. To the knowledge of Servicesoft, neither Servicesoft
nor any Subsidiary is using any confidential information or trade secrets of
third party, including, but not limited to, any past or present employees or
their respective past employers. There are no royalties, honoraria, fees or
other payments payable by Servicesoft or any Subsidiary of Servicesoft to any
third party under any written or oral contract or understanding or otherwise by
reason of the ownership, use, license, sale, or disposition of any Intellectual
Property that is or was Servicesoft IP Rights (other than as set forth in Item
4.12(c) of the Servicesoft Disclosure Letter).
(d) Protection of Rights. Servicesoft has taken
commercially reasonable and practicable steps designed to safeguard and maintain
the secrecy and confidentiality of, and its proprietary rights in, all
Servicesoft IP Rights. To the knowledge of Servicesoft, there is no material
unauthorized use, infringement or misappropriation of any Servicesoft IP Rights
by any third party, including, to the knowledge of Servicesoft, any Servicesoft
employee or Subsidiary employee. All current Servicesoft and Subsidiary
officers, employees and consultants (other than employees and consultants who
are not and have not been involved in developing Servicesoft IP Rights or
providing services to customers and who have no managerial responsibilities)
have executed and delivered to Servicesoft an agreement regarding the protection
of proprietary information and the assignment to Servicesoft of all Intellectual
Property Rights arising from the services performed for Servicesoft or any
Subsidiary by such persons, and Servicesoft made available or has delivered to
Broadbase or its counsel copies of all such agreements.
(e) Conformity of Products and Services. All software
developed by Servicesoft or any Subsidiary and licensed by Servicesoft or any
Subsidiary to customers and all other products manufactured, sold, licensed,
leased or delivered by Servicesoft or any Subsidiary to customers and all
services provided by Servicesoft or any Subsidiary to customers on or prior to
the Closing Date conform in all material respects (to the extent required in
Contracts with such customers) to applicable contractual commitments, express
and implied warranties, product specifications and product documentation and to
any representations provided to customers and Servicesoft has no material
liability or obligation (and, to Servicesoft's knowledge, there is no legitimate
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Servicesoft giving
rise to any material liability or obligation) for replacement or repair thereof
or other damages in connection therewith in excess of any reserves therefor set
forth on the Balance Sheet. Servicesoft and its Subsidiaries have no obligations
with respect to any product or service to deliver any new or additional
functionalities, versions, ports or products, or to perform any additional
services, except for (i) maintenance and support obligations incurred in the
ordinary course of business and consistent with past practices, made available
on substantially similar terms to all customers who have obtained substantially
similar products or services, and (ii) future consulting service or license
obligations incurred in the ordinary course of business with respect to prior
consulting engagements, and not resulting from the failure of any products
licensed or sold or services rendered by Servicesoft or its Subsidiaries to
comply in a material respect with any applicable commitments, specifications or
warranties, and (iii) obligations which are reflected in reserves on the Balance
Sheet identified to the future obligation(s) in question. Servicesoft and its
Subsidiaries have good commercial working relationships with their customers and
suppliers. Servicesoft and each Subsidiary of Servicesoft has taken such actions
as are necessary or appropriate to document the software and its operations
found in the Servicesoft Products and Services and any software used in the
development, compilation, maintenance and support of the Servicesoft Products
and Services, such that the materials comprising such software, including the
source code and documentation, have been written in a clear and professional
manner so that they may be understood, modified and maintained in an efficient
manner by reasonably competent programmers.
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4.13 Compliance with Laws. Servicesoft and each Subsidiary is and will
be at the Closing Date in compliance, in all respects material to Servicesoft,
with all applicable laws, ordinances, regulations and rules, and all orders,
writs, injunctions, awards, judgments and decrees, applicable to Servicesoft or
any Subsidiary, or to the assets, properties and business of Servicesoft or any
Subsidiary, including, without limitation:
(a) all applicable federal and state securities laws and
regulations;
(b) all applicable federal, state and local laws, ordinances
and regulations, and all orders, writs, injunctions, awards, judgments and
decrees, pertaining to (i) the sale, licensing, leasing, ownership or management
of Servicesoft's or any Subsidiary's owned, leased or licensed real or personal
property, products or technical data, (ii) employment or employment practices,
terms and conditions of employment, or wages and hours or (iii) safety, health,
fire prevention, environmental protection (including toxic waste disposal and
related matters described in Section 4.16), building standards, zoning or other
similar matters;
(c) the Export Administration Act and regulations promulgated
thereunder or other laws, regulations, rules, orders, writs, injunctions,
judgments or decrees applicable to the export or re-export of controlled
commodities or technical data;
(d) the Immigration Reform and Control Act; and
(e) all governmental and nongovernmental regulations related to
the operation and use of the Internet.
Servicesoft and each Subsidiary has received all material permits
and approvals from, and has made all material filings with, third parties,
including government agencies and authorities, that are necessary to the conduct
of its business as presently conducted.
4.14 Agreements and Commitments. Except as set forth in Item 4.14 of
the Servicesoft Disclosure Letter and delivered or made available by Servicesoft
to Broadbase herewith, or as listed in Item 4.12 or Item 4.15 as required by
Section 4.12 or Section 4.15, as the case may be, neither Servicesoft nor any
Subsidiary is a party or subject to any oral or written executory agreement,
obligation or commitment that is material to Servicesoft, its financial
condition or business or which is described below, including but not limited to
the following:
(a) Any Contract providing for payments by or to Servicesoft or
any Subsidiary in an amount with respect to any single transaction of (i)
$200,000 or more in the ordinary course of business or (ii) $100,000 or more not
in the ordinary course of business;
(b) Any contract, license or agreement to which Servicesoft or
any Subsidiary is a party (i) with respect to Servicesoft IP Rights licensed or
transferred to any third party (other than standard agreements with customers
arising in the ordinary course of business consistent with past practice, the
forms of which have been delivered to Broadbase or its counsel); and (ii)
pursuant to which a third party has licensed or transferred any intellectual
property to Servicesoft or any Subsidiary (except for commercially available,
non-customized software sold at retail, or sold at less than $5,000 per license
or per seat and not embedded in Servicesoft Products and Services or
sub-licensed to customers of Servicesoft or its Subsidiaries);
(c) Any agreement by Servicesoft or any Subsidiary to encumber,
transfer or sell any material rights in or with respect to any Servicesoft IP
Rights except non-exclusive software licenses;
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(d) Any Contract providing for development of technology for
Servicesoft which technology (i) is used or incorporated in any products
currently distributed by Servicesoft or any Subsidiary or used in any service
provided by Servicesoft or any Subsidiary or (ii) is anticipated to be used or
incorporated in any planned products or services of Servicesoft or a Subsidiary,
or any Contract that requires Servicesoft to perform specified development work
for a third party.
(e) Any Contract currently in force for hosting, data center,
transaction processing or other services related to the Servicesoft website and
provision of hosted versions of Servicesoft products and services;
(f) Any agreement for the sale or lease of real or personal
property involving more than $100,000 per year;
(g) Any dealer, distributor, sales representative, original
equipment manufacturer, value added remarketer or other agreement for the
distribution of Servicesoft's or its Subsidiary's products or services (other
than standard agreements arising in the ordinary course of business consistent
with past practice, the forms of which have been delivered to Broadbase or its
counsel);
(h) Any franchise agreement or financing statement;
(i) Any stock redemption or purchase agreement;
(j) Any joint venture Contract or arrangement or any other
agreement that involves a sharing of profits with other persons or the payment
of royalties to any other person;
(k) Any instrument evidencing indebtedness for borrowed money
by way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee or otherwise, except for trade indebtedness or any
advance to any employee of Servicesoft or of any Subsidiary incurred or made in
the ordinary course of business, and except as disclosed in the Servicesoft
Financial Statements;
(l) Any Contract containing covenants purporting to limit
Servicesoft's or any Subsidiary's freedom to compete in any line of business in
any geographic area or to sell products or services to a specific entity;
(m) Any Contract currently in force to provide source code to
any third party for any product or technology;
(n) Any Contract for the employment of any officer, employee or
consultant of Servicesoft or any Subsidiary or any other type of Contract or
understanding with any officer, employee or consultant of Servicesoft or any
Subsidiary that is not immediately terminable by Servicesoft or the Subsidiary
without cost or liability;
(o) Any Contract for consulting or similar services with a term
of more than sixty (60) days and which is not terminable without penalty with
notice of sixty (60) days or less; or
(p) any Contract granting most favored nation pricing and/or
terms to any customer, licensee, purchaser, reseller, promoter or remarketer of
any of Servicesoft or its Subsidiaries' products or services.
All agreements, obligations and commitments listed in Item 4.12,
Item .14, or Item 4.15, as required by Section 4.12, this Section 4.14, or
Section 4.15, as the case may be, are valid and in full force and effect, and
except as expressly noted, a true and complete copy of each has been delivered
or made available to Broadbase. Except as noted in Item 4.14, neither
Servicesoft nor, to the knowledge of Servicesoft, any other party is in material
breach of or default under any material term
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of any such agreement, obligation or commitment. Neither Servicesoft nor any
Subsidiary has any liability for renegotiation of government Contracts or
sub-Contracts which are material to Servicesoft.
4.15 Employees.
(a) General Compliance. Servicesoft and each of the
Subsidiaries is in compliance in all material respects with all applicable laws
relating to employment, employment practices, wages, hours, and terms and
conditions of employment, including, but not limited to, employee compensation
matters, and has correctly classified employees as exempt employees and
non-exempt employees under the Fair Labor Standards Act. Except as set forth in
Item 4.15(a) of the Servicesoft Disclosure Letter, neither Servicesoft nor any
Subsidiary has employment or consulting Contracts currently in effect that are
not terminable at will (other than agreements with the sole purpose of providing
for the confidentiality of proprietary information or assignment of inventions).
All independent contractors have been properly classified as independent
contractors for the purposes of federal and applicable state Tax laws, laws
applicable to employee benefits and other applicable laws. All Servicesoft or
Subsidiary employees are legally permitted to be employed by Servicesoft or the
Subsidiary in the United States of America. Servicesoft will have no liability
to any employee or to any organization or any other entity as a result of the
termination of any employee leasing arrangement.
(b) Good Labor Relations. Servicesoft and each of the
Subsidiaries: (i) has never been and is not now subject to a union organizing
effort; (ii) is not subject to any collective bargaining agreement with respect
to any of its employees; (iii) is not subject to any other Contract with any
trade or labor union, employees' association or similar organization; and (iv)
has no current labor disputes and has had no material labor disputes or claims
of unfair labor practices since December 31, 1999. Servicesoft and the
Subsidiaries have good labor relations, and have no knowledge of any facts
indicating that the consummation of the Merger or any of the other transactions
contemplated hereby will have a Material Adverse Effect on such labor relations.
Between January 1, 2000 and the date of this Agreement, to Servicesoft's
knowledge, no executive officer of Servicesoft or any of its Subsidiaries, or
material number of other employees of Servicesoft or any of its Subsidiaries,
has given notice that such employee intends to terminate his or her employment
with Servicesoft or any such Subsidiary. As of the date of this Agreement,
Servicesoft has no knowledge that any key personnel or other employees intend to
leave its or a Subsidiary's employment. There are no controversies pending or,
to Servicesoft's knowledge, threatened, between Servicesoft or any Subsidiary
and any of their employees that would be reasonably likely to result in
Servicesoft incurring any material liability.
(c) Employee Plans. Item 4.15(c) of the Servicesoft Disclosure
Letter identifies: (i) each "employee benefit plan", as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA");
and (ii) all other written or formal plans or Contracts involving direct or
indirect compensation or benefits (including any employment Contracts entered
into between Servicesoft or any Subsidiary and any employee of Servicesoft or
any Subsidiary, but excluding workers' compensation, unemployment compensation
and other government-mandated programs) currently or previously maintained,
contributed to or entered into by Servicesoft or any Subsidiary under which
Servicesoft or any Subsidiary or any ERISA Affiliate (as defined below) has any
present or future Liability (collectively, the "SERVICESOFT EMPLOYEE PLANS").
For purposes of this Section 4.15, "ERISA AFFILIATE" shall mean any entity which
is a member of: (i) a "controlled group of corporations", as defined in Section
414(b) of the Code; (ii) a group of entities under "common control", as defined
in Section 414(c) of the Code; or (iii) an "affiliated service group", as
defined in Section 414(m) of the Code, or treasury regulations promulgated under
Section 414(o) of the Code, any of which includes Servicesoft or any Subsidiary.
Copies of all Servicesoft Employee Plans (and, if applicable, related trust
agreements) and all related documents, amendments and written interpretations
(including summary plan descriptions) thereto have been made available to
Broadbase or its counsel, together with the two most recent annual reports (Form
5500, including, if applicable, Schedule B thereto) prepared in
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connection with any such Servicesoft Employee Plan. No "prohibited transaction,"
as defined in Section 406 of ERISA or Section 4975 of the Code, has occurred
with respect to any Servicesoft Employee Plan which is covered by Title I of
ERISA which would result in a material liability to Servicesoft, excluding
transactions effected pursuant to a statutory or administrative exemption.
Nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any Servicesoft Employee Plan has or will make
Servicesoft, any Subsidiary or any Servicesoft or Subsidiary officer or director
subject to any material liability under Title I of ERISA or liability for any
material Tax (as defined in Section 4.9) or penalty pursuant to Sections 4972,
4975, 4976 or 4979 of the Code or Section 502 of ERISA. Except as set forth in
Item 4.15(c) of the Servicesoft Disclosure Letter, no Servicesoft Employee Plans
will be subject to any surrender fees or service fees upon termination other
than the normal and reasonable administrative fees associated with the
termination of benefit plans. All contributions due from Servicesoft or any
Subsidiary with respect to any of the Servicesoft Employee Plans have been made
as required under such plans and, to the extent applicable, ERISA, other than
contributions accrued in the ordinary course of business consistent with past
practice after the Servicesoft Balance Sheet Date as a result of operations of
Servicesoft and its Subsidiaries after the Servicesoft Balance Sheet Date, all
of which have been paid or will be paid when and as required or, if not required
to be made, have been accrued on the Servicesoft Financial Statements.
Servicesoft and each of the Subsidiaries has performed in all material respects
all obligations required to be performed by it under each Servicesoft Employee
Plan, and each Servicesoft Employee Plan has been maintained substantially in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including, without limitation, ERISA
and the Code, which are applicable to such Servicesoft Employee Plans. All
individuals who, pursuant to the terms of any Servicesoft Employee Plans, are
entitled to participate in any Servicesoft Employee Plan, currently are
participating in such Servicesoft Employee Plan or have been offered an
opportunity to do so. No employee of Servicesoft or any of its Subsidiaries, and
no person subject to any health plan of Servicesoft or any of its Subsidiaries
has made medical claims through such health plan during the 12 months preceding
the date hereof for more than $100,000 in the aggregate for which Servicesoft is
responsible, or has any catastrophic illness.
(d) Pension Plans. All Servicesoft Employee Plans which
individually or collectively would constitute an "employee pension benefit
plan", as defined in Section 3(2) of ERISA (collectively, the "SERVICESOFT
PENSION PLANS"), are identified as such in Item 4.15(d) of the Servicesoft
Disclosure Letter. Any Servicesoft Pension Plan which is intended to be
qualified under Section 401(a) of the Code (a "SERVICESOFT 401(a) PLAN") is so
qualified and has been so qualified during the period from its adoption to date,
and the trust forming a part is exempt from Tax pursuant to Section 501(a) of
the Code. No Servicesoft Pension Plan constitutes, or has since the enactment of
ERISA constituted, a "multiemployer plan," as defined in Section 3(37) of ERISA.
No Servicesoft Pension Plans are subject to Title IV of ERISA. Servicesoft has
delivered to Broadbase or its counsel a complete and correct copy of the most
recent Internal Revenue Service determination letter with respect to each
Servicesoft 401(a) Plan, if any exists.
(e) Benefit Arrangements. Item 4.15(e) of the Servicesoft
Disclosure Letter lists each employment, severance (including all
post-employment Liabilities) or other similar Contract or policy and each
Contract providing for insurance coverage (including any self-insured
arrangements), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, hospitalization benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits for
employees, consultants or directors which: (i) is not a Servicesoft Employee
Plan; (ii) is entered into, maintained or contributed to by Servicesoft or any
Subsidiary; and (iii) covers any employee or former employee or independent
contractor or consultant of Servicesoft or any Subsidiary. Such Contracts and
policies as are described in this Section 4.15(e) are
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herein referred to collectively as the "SERVICESOFT BENEFIT ARRANGEMENTS." Each
Servicesoft Benefit Arrangement has been maintained in substantial compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations which are applicable to such Servicesoft Benefit
Arrangement. Servicesoft has delivered to Broadbase or its counsel a complete
and correct copy or description of each Servicesoft Benefit Arrangement. All
individuals who, pursuant to the terms of any Servicesoft Benefit Arrangement,
are entitled to participate in any such Servicesoft Benefit Arrangement, are
currently participating in such Servicesoft Benefit Arrangement or have been
offered an opportunity to do so and have declined.
(f) Since December 31, 1999, there has been no amendment to,
written interpretation or announcement (whether or not written) by Servicesoft
or any Subsidiary relating to, or change in employee participation or coverage
under, any Servicesoft Employee Plan or Servicesoft Benefit Arrangement that
would increase materially the expense of maintaining such Servicesoft Employee
Plan or Servicesoft Benefit Arrangement in the future.
(g) COBRA Compliance. Servicesoft and each of the Subsidiaries
has complied in all material respects prior to the date hereof, with the
continuation coverage requirements of Section 4980B of the Code and the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
Sections 601 through 608 of ERISA, the American Civil Disabilities Act of 1990,
as amended, and the Family Medical Leave Act of 1993, as amended, and the
regulations thereunder, and no material Tax payable on account of Section 4980B
of the Code has been incurred with respect to any current or former employees
(or their beneficiaries) of Servicesoft or any Subsidiary.
(h) No Violation of Contracts. To the knowledge of Servicesoft,
no Servicesoft or Subsidiary employee or consultant is in violation of any term
of any employment Contract, patent disclosure agreement, non-competition
agreement, or any other Contract, or any restrictive covenant relating to the
right of any such employee to be employed by Servicesoft or any Subsidiary, or
to use Intellectual Property Rights of others.
(i) Effect of Merger.
(i) Except as set forth in Item 4.15(i) of the
Servicesoft Disclosure Letter, neither Servicesoft nor any Subsidiary is a party
to any Contract or plan with any key personnel of Servicesoft: (A) the benefits
of which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving Servicesoft in the nature of any of the
transactions contemplated by this Agreement; (B) providing any term of
employment or compensation guarantee; or (C) providing severance benefits or
other benefits after the termination of employment of such employee regardless
of the reason for such termination of employment.
(ii) Other than as set forth in Item 4.15(i) of the
Servicesoft Disclosure Letter, neither Servicesoft nor any of its Subsidiaries
is a party to any (i) agreement with any of its executive officers or other key
employees (A) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving Servicesoft
in the nature of any of the transactions contemplated by this Agreement, (B)
providing any term of employment or compensation guarantee, or (C) providing
severance benefits or other benefits after the termination of employment of such
employee regardless of the reason for such termination of employment, or (ii)
agreement or plan, including, without limitation, any stock option plan, stock
appreciation rights plan or stock purchase plan, any of the benefits of which
will be materially increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement. Neither
Servicesoft nor any of its Subsidiaries has any obligations to pay any amounts,
or provide any benefits, to any former employees or officers, other than as set
forth in Item 4.15(i) of the Servicesoft Disclosure Letter.
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(j) List of Current Servicesoft Employees. A list of all
current Servicesoft and Subsidiary employees and consultants as of September 18,
2000, and the current compensation of each is set forth in Item 4.15(j) of the
Servicesoft Disclosure Letter.
4.16 Environmental Matters.
(a) For the purposes of this Agreement, the terms "DISPOSAL,"
"RELEASE," and "THREATENED RELEASE" shall have the definitions assigned thereto
by the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 9601 et seq., as amended ("CERCLA"). For the purposes of
this Agreement, "HAZARDOUS MATERIALS" shall mean any hazardous or toxic
substance, material or waste which is or becomes prior to the Closing regulated
under, or defined as a "hazardous substance," "pollutant," "contaminant," "toxic
chemical," "hazardous material," "toxic substance" or "hazardous chemical"
under: (i) CERCLA; (ii) the Emergency Planning and Community Right-to-Know Act,
42 U.S.C. Section 11001 et seq.; (iii) the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.; (iv) the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq.; (v) the Occupational Safety and Health Act of 1970,
29 U.S.C. Section 651 et seq.; (vi) regulations promulgated under any of the
above statutes; or (vii) any other applicable federal, state or local statute,
ordinance, rule or regulation that has a scope or purpose similar to those
identified above.
(b) None of Servicesoft's or any Subsidiary's properties or
facilities is in violation of any federal, state or local law, ordinance,
regulation or order relating to industrial hygiene or to the environmental
conditions on, under or about such properties or facilities, including, but not
limited to, soil and ground water condition.
(c) During the time that Servicesoft or any Subsidiary has
owned or leased properties or owned or operated any facilities:
(i) neither Servicesoft nor any Subsidiary nor any third
party has used, generated, manufactured or stored on, under or about such
properties or facilities or transported to or from such properties or facilities
any Hazardous Materials;
(ii) there have been no disposals, releases or threatened
releases of Hazardous Materials on, from or under such properties or facilities;
(iii) no Hazardous Materials have been transported from
such premises to any site or facility now listed or proposed for listing on the
National Priorities List, at 40 C.F.R. Part 300, or any list with a similar
scope or purpose published by any state authority; and
(iv) there has been no litigation, proceeding or
administrative action brought, threatened in writing against Servicesoft or any
Subsidiary, or any settlement reached by Servicesoft or any Subsidiary with, any
party or parties alleging the presence, disposal, release or threatened release
of any Hazardous Materials on, from or under any of such premises.
(d) Servicesoft has no knowledge of any presence, disposals,
releases or threatened releases of Hazardous Materials on, from or under any of
such properties or facilities that may have occurred prior to Servicesoft or a
Subsidiary having taken possession of any of such properties or facilities.
4.17 Certain Transactions and Agreements. To Servicesoft's knowledge,
no person who is an officer or director of Servicesoft or any Subsidiary, or a
member of any such officer's or director's immediate family:
(a) has any direct or indirect ownership interest in or any
employment or consulting agreement with any firm or corporation that competes
with Servicesoft or any Subsidiary, or
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with Broadbase (except with respect to any interest in less than 2% of the
outstanding voting shares of any corporation whose stock is publicly traded);
(b) is directly or indirectly interested in any Contract with
Servicesoft or any Subsidiary, including, but not limited to, any loan
arrangements, except for compensation for services as an officer (listed in Item
4.17 of the Servicesoft Disclosure Letter), director or employee of Servicesoft
and except for the normal rights of a stockholder or optionholder.
(c) has any interest in any (i) Servicesoft IP Rights or (ii)
property (other than Servicesoft IP Rights) used in the business of Servicesoft
or any Subsidiary whether such property is real or personal, tangible or
intangible.
To Servicesoft's knowledge, no Servicesoft or Subsidiary officer
or director, or any "affiliate" or "associate" (as those terms are defined in
Rule 405 promulgated under the Securities Act) of any such person has had,
either directly or indirectly, a material interest in: (i) any entity which
purchases from or sells, licenses or furnishes to Servicesoft or any Subsidiary
any goods, property, technology or intellectual or other property rights or
services, or (ii) any Contract to which Servicesoft or any Subsidiary is a party
or by which it may be bound or affected other than with respect to arms-length
transactions.
4.18 Accounts Receivable. The receivables shown on the balance sheet of
Servicesoft on the Servicesoft Balance Sheet Date arose in the ordinary course
of business consistent with past practice and have been collected or, as of the
date of this Agreement, are collectible in the book amounts thereof, less an
amount not in excess of the allowance for doubtful accounts provided for in the
balance sheet of Servicesoft on the Servicesoft Balance Sheet Date. Allowances
for doubtful accounts and warranty returns have been prepared in accordance with
GAAP consistently applied and in accordance with the past practices of
Servicesoft and its Subsidiaries. The receivables of Servicesoft and its
Subsidiaries arising after the Servicesoft Balance Sheet Date and prior to the
Closing Date arose or will arise in the ordinary course of business consistent
with past practice and have been collected or are, as of the date of this
Agreement, collectible in the book amounts thereof, less allowances for doubtful
accounts and warranty returns determined in accordance with the past practices
of Servicesoft and its Subsidiaries. None of Servicesoft's receivables is
subject to any material claim of offset, recoupment, setoff or counter-claim and
it has no knowledge of any specific facts or circumstances (whether asserted or
unasserted) that could give rise to any such claim. No material amount of
receivables are contingent upon the performance by Servicesoft or any of its
Subsidiaries of any obligation or contract other than normal warranty repair and
replacement and other than products' progress bills in the ordinary course of
business consistent with past practice. No person has any lien on any of such
receivables (except Permitted Liens) and no agreement for deduction or discount
has been made with respect to any of such receivables. Item 4.18 of the
Servicesoft Disclosure Letter sets forth as of August 31, 2000, or such other
date as specified therein, an aging of accounts receivable of Servicesoft and
its Subsidiaries in the aggregate and by customer. There are no accounts
receivable which are subject to asserted warranty claims known to Servicesoft
made within the last year, including the type and amounts of such claims.
4.19 Board of Directors, Officers and Key Personnel. Item 4.19 of the
Servicesoft Disclosure Letter accurately sets forth, as of the date of this
Agreement: (a) the name and title of each of Servicesoft's officers and its
Subsidiaries' officers; (b) the name and title of supervisory, developmental or
other key personnel of Servicesoft and its Subsidiaries; and (c) the name and
address of each member of Servicesoft's board of directors, except as otherwise
indicated thereon, and its Subsidiaries' boards of directors.
4.20 Insurance. Servicesoft and each Subsidiary maintains, and at all
times since its inception has maintained, fire and casualty, workers
compensation, general liability, business interruption and product liability
insurance (which policies are listed in Item 4.20 of the Servicesoft
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Disclosure Letter) which it believes to be reasonably prudent for similarly
sized and similarly situated businesses. Item 4.20 sets forth all material
claims made under insurance policies since December 31, 1997 and the premiums
that apply with respect to such insurance policies as of the date of this
Agreement.
4.21 Voting Arrangements. Except for the Voting Agreements, or as set
forth in Item 4.5 of the Servicesoft Disclosure Letter, there are no outstanding
stockholder agreements, voting trusts, proxies or other Contracts to which
Servicesoft or, to Servicesoft's knowledge, to which any other person or entity
is a party, relating to the voting of any shares of Servicesoft's capital stock.
4.22 Ownership of Shares of Broadbase Capital Stock. Except as set
forth in Item 4.22 of the Servicesoft Disclosure Letter, as of the date hereof,
neither Servicesoft nor any Subsidiary nor, to Servicesoft's knowledge, any of
Servicesoft's affiliates or associates (as such terms are defined under the
Exchange Act of 1934): (a) beneficially owns, directly or indirectly; or (b) is
party to any Contract for the purpose of acquiring, holding, voting or disposing
of, in each case, shares of Broadbase capital stock (except for shares of
Broadbase capital stock in the aggregate representing less than 1% of the
outstanding shares of Broadbase capital stock).
4.23 Information Supplied. None of the information supplied or to be
supplied by Servicesoft for inclusion in the Form S-4 and the Prospectus/Proxy
Statement (both as defined in Section 2.3(a)), at the date such information is
supplied, at the time of the meeting of the stockholders of Broadbase to approve
the Merger, and at the time of the meeting, or the date of the written consent,
of the Servicesoft Stockholders to approve the Merger, contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, or will, in the case of the Form S-4, at the time the Form S-4
becomes effective under the Securities Act, contains any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading.
4.24 Accuracy of Disclosure. The representations and warranties
contained in this Agreement, taken together with the Servicesoft Disclosure
Letter and any exhibits, schedules, certificates and documents to be delivered
by Servicesoft to Broadbase pursuant to this Agreement, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained herein and therein, in light of the
circumstances under which such statements were made, not misleading.
5. REPRESENTATIONS AND WARRANTIES OF BROADBASE AND NEWCO
Except as set forth in the Broadbase Disclosure Letter, (which, subject
to Section 13.14, shall specifically refer to the Sections of this Agreement to
which the specific Items of the Servicesoft Disclosure Letter therein constitute
an exception), each of Broadbase and Newco, where applicable, hereby represents
and warrants to Servicesoft as follows:
5.1 Organization and Good Standing. Each of Broadbase and Newco is a
corporation duly organized, validly existing and, where applicable, in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority, and all requisite qualifications to do
business as a foreign corporation, to conduct its business in the manner in
which its business is currently being conducted, except where the failure to be
so organized, existing or in good standing or to have such power, authority or
qualifications would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Broadbase. Broadbase has delivered
or made available to Servicesoft a true and correct copy of its and Newco's
certificate of incorporation and bylaws, each as amended to date (collectively,
the "BROADBASE CHARTER DOCUMENTS"), and each such
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instrument is in full force and effect. Neither Broadbase nor Newco is in
violation of any of the provisions of the Broadbase Charter Documents. Broadbase
has delivered or made available to Servicesoft all proposed or considered
amendments to the Broadbase Charter Documents.
5.2 Capitalization.
(a) Authorized/Outstanding Capital Stock. As of the close of
business on September 11, 2000, the authorized capital stock of Broadbase
consisted solely of 90,000,000 shares of Broadbase common stock and 5,000,000
shares of Broadbase preferred stock. As of the close of business on September
11, 2000, there were issued and outstanding 47,887,765 shares of Broadbase
common stock and no shares of Broadbase preferred stock. All issued and
outstanding shares of Broadbase common stock have been duly authorized and
validly issued, are fully paid and nonassessable, are not subject to any right
of rescission, are not subject to preemptive rights by statute, Broadbase's
certificate of incorporation or bylaws, or any agreement or document to which
Broadbase is a party or by which it is bound, and have been offered, issued,
sold and delivered by Broadbase in compliance with all registration or
qualification requirements (or applicable exemptions therefrom) of applicable
federal and state securities laws.
(b) Options/Warrants/Rights. As of the close of business on
September 11, 2000, options to purchase 15,023,519 shares of Broadbase common
stock ("BROADBASE OPTIONS") had been issued and were outstanding and no
Broadbase Warrants to purchase shares of Broadbase common stock were issued and
are outstanding as of such date. Between September 11, 2000, and the date of
this Agreement, Broadbase has not granted any options or warrants or issued any
shares except pursuant to the acquisitions of Panopticon, Inc. and Decisionism,
Inc. and as set forth in Item 5.8(b) of the Broadbase Disclosure Letter. A list
of all holders of Broadbase Options as of September 11, 2000, is set forth in
Item 5.2(b) of the Broadbase Disclosure Letter. Item 5.2(b) of the Broadbase
Disclosure Letter lists for each person who held Broadbase Options as of
September 11, 2000, the exercise price for each such Broadbase Option, the
number of shares or other securities covered by each such Broadbase Option and
the term of exercisability of each such Broadbase Option. Except as set forth in
this Section 5.2(b) and in Item 5.2(b) of the Broadbase Disclosure Letter, as of
the close of business on September 11, 2000, there is no: (i) outstanding
preemptive right, stock appreciation right, subscription, option, call, warrant
or right (whether or not currently exercisable) to acquire from Broadbase or, to
Broadbase's knowledge, from affiliates of Broadbase, any shares of the capital
stock or other securities of Broadbase; (ii) outstanding security, instrument or
obligation issued by Broadbase or controlled affiliates of Broadbase, that is or
may become convertible into or exchangeable for any shares of the capital stock
or other securities of Broadbase; (iii) Contract under which Broadbase is or may
become obligated to sell or otherwise issue any shares of its capital stock or
any other securities; (iv) Contract to which Broadbase is a party relating to
the voting or registration of or restricting any person from purchasing,
selling, pledging or otherwise disposing of (or granting any option or similar
right with respect to) any shares of Broadbase common stock; (v) liability for
dividends accrued but unpaid; or (vi) condition or circumstance, to Broadbase's
knowledge, that likely would directly or indirectly give rise to or provide a
basis for the assertion of a claim by any person to the effect that such person
is entitled to acquire or receive any shares of capital stock or other
securities of Broadbase, including, but not limited to, promises to issue or
grant securities of Broadbase or to recommend to Broadbase's board of directors
to issue or grant securities of Broadbase. Broadbase is not required to issue
any shares of Broadbase common stock or options to acquire shares of Broadbase
common stock in connection with its acquisitions of Panopticon, Inc. and
Decisionism, Inc. in excess of the amounts set forth in Item 5.2(b) of the
Broadbase Disclosure Letter.
(c) The authorized capital stock of Newco consists of 1,000
shares of common stock, $0.001 par value per share, all of which, as of the date
hereof, are issued and outstanding and are held by Broadbase. All of the
outstanding shares of Newco's common stock have been duly
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authorized and validly issued, and are fully paid and nonassessable. Newco was
formed for the purpose of consummating the Merger and has no material assets or
liabilities except as necessary for such purpose.
(d) The shares of Broadbase common stock to be issued in the
Merger, when issued in accordance with the provisions of this Agreement, will be
validly issued, fully paid and non-assessable will not be subject to any right
of rescission, will not be subject to preemptive rights or rights of first
refusal by statute, Broadbase's certificate of incorporation or bylaws, or any
agreement or document to which Broadbase is a party or by which it is bound, and
will be offered, issued, sold and delivered by Broadbase in compliance with all
registration or qualification requirements (or applicable exemptions therefrom)
of applicable federal and state securities laws.
5.3 Power, Authorization and Non-Contravention.
(a) Each of Broadbase and Newco has the corporate power and
authority to: (i) carry on its business as now conducted; (ii) own, operate and
lease its properties in the manner in which its properties are currently owned,
used and leased and in the manner in which its properties are proposed to be
owned, used and leased; (iii) perform its obligations under all Contracts to
which it is a party, and (iv) enter into and perform its obligations under this
Agreement, and all agreements to which Broadbase or Newco is or will be a party
that are required to be executed pursuant to this Agreement (the "BROADBASE
ANCILLARY AGREEMENTS"). The execution, delivery and performance of this
Agreement and the Broadbase Ancillary Agreements have been duly and validly
approved and authorized by Broadbase's Board of Directors and Newco's Board of
Directors, as applicable. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Broadbase and Newco, subject
only to the approval and adoption of this Agreement and the approval of the
Merger by Broadbase's stockholders (the "BROADBASE STOCKHOLDER APPROVAL") and
the filing of the Certificate of Merger pursuant to Delaware Law. The
affirmative vote of the holders of a majority in interest of the stock present
or represented by proxy at a valid meeting of Broadbase's stockholders is
sufficient for the Broadbase Stockholder Approval, and no other approval of any
holder of any securities of Broadbase is required in connection with the
consummation of the transactions contemplated hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity or other person
is required to be obtained or made by Broadbase or Newco in connection with the
execution and delivery of this Agreement or the consummation of the Merger,
except for (i) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, (ii) the filing with the SEC of the Form S-4,
the Form S-8 and the Prospectus/Proxy Statement and a Current Report on Form 8-K
with respect to the Merger, each in accordance with the Securities Act and the
Exchange Act, and the effectiveness of the Form S-4, (iii) the filing with the
Nasdaq Stock Market of a Notification Form for Listing of Additional Shares with
respect to the shares of Parent Common Stock issued in the Merger, (iv) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal, foreign and state
securities (or related) laws and the HSR Act and the securities or antitrust
laws of any foreign country, and (v) such other consents, authorizations,
filings, approvals and registrations which if not obtained or made would not be
material to Broadbase or the Surviving Corporation or prevent, alter or
materially delay the consummation of the Merger or any of the other transactions
contemplated hereby.
(c) This Agreement and the Broadbase Ancillary Agreements are,
or when executed by Broadbase and Newco (as applicable) and the other parties
thereto will be, valid and binding obligations of Broadbase and Newco,
enforceable against Broadbase and Newco in accordance with their respective
terms, except as to the effect, if any, of (i) applicable bankruptcy and other
similar laws affecting the rights of creditors generally, (ii) rules of law
governing specific performance, injunctive
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<PAGE> 35
relief and other equitable remedies and (iii) the enforceability of provisions
requiring indemnification; provided, however, that the Certificate of Merger and
the Broadbase Ancillary Agreements will not be effective until the earlier of
the Effective Time or the date provided for therein.
5.4 No Violation of Charter Documents, Contracts or Laws. Neither the
execution and delivery of this Agreement or any Broadbase Ancillary Agreement,
nor the consummation of the transactions provided for herein or therein, will
conflict with, or (with or without notice or lapse of time, or both) result in a
termination, breach, impairment or violation of: (a) any provision of the
certificate of incorporation, bylaws or other charter documents of Broadbase or
Newco, as currently in effect; (b) any material Broadbase Contract; or (c) any
federal, state, local or foreign judgment, writ, decree, order, statute, rule or
regulation applicable to Broadbase or its assets or properties. The consummation
of the Merger and succession by Broadbase to all rights, licenses, franchises,
leases and agreements of Broadbase will not require the consent of any third
party, and will not have a Material Adverse Effect on Broadbase or the Surviving
Corporation.
5.5 SEC Filings.
(a) Broadbase has filed all forms, reports and documents
required to be filed by Broadbase with the SEC since the effective date of the
registration statement of Broadbase's initial public offering, and has made
available to Servicesoft such forms, reports and documents in the form filed
with the SEC. All such required forms, reports and documents (including those
that Broadbase may file subsequent to the date hereof) are referred to herein as
the "BROADBASE SEC DOCUMENTS." As of their respective dates, the Broadbase SEC
Documents: (i) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Broadbase SEC Documents;
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except to the extent corrected prior to the date of this Agreement
by a subsequently filed Broadbase SEC Document. None of Broadbase's subsidiaries
is required to file any forms, reports or other documents with the SEC.
5.6 Broadbase Financial Statements. Each of the consolidated financial
statements (including, in each case, any related notes thereto) contained in the
Broadbase SEC Documents (the "BROADBASE FINANCIAL STATEMENTS"), including any
Broadbase SEC Documents filed after the date hereof until the Closing: (i)
complied (or will comply as of their dates in the case of Broadbase SEC
Documents filed after the date of this Agreement) as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto; (ii) was prepared (or will be prepared in the case of Broadbase SEC
Documents prepared after the date of this Agreement) in accordance with GAAP
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 1O-Q, 8-K or any successor
form under the Exchange Act); and (iii) fairly presented the consolidated
financial position of Broadbase and its subsidiaries as at the respective dates
thereof and the consolidated results of Broadbase's operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements may not contain footnotes and were or are subject to normal and
recurring year-end adjustments. The balance sheet of Broadbase contained in the
Broadbase SEC Documents as of June 30, 2000 is hereinafter referred to as the
"BROADBASE BALANCE SHEET", with June 30, 2000 hereinafter referred to as the
Broadbase Balance Sheet Date. Except as disclosed in the Broadbase Financial
Statements, since the date of the Broadbase Balance Sheet neither Broadbase nor
any of its subsidiaries has any liabilities required under GAAP to be set forth
on a balance sheet (absolute, accrued, contingent or otherwise) which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Broadbase and its subsidiaries taken as a
whole, except for liabilities
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incurred since the date of the Broadbase Balance Sheet in the ordinary course of
business consistent with past practices and liabilities incurred in connection
with this Agreement. There has been no change in Broadbase's accounting
policies, except as described in the notes to the Broadbase Financial
Statements.
5.7 Litigation. There is no action, suit, arbitration, mediation,
proceeding, claim or, to Broadbase's knowledge, investigation pending, nor, to
Broadbase's knowledge, are any of the foregoing threatened against Broadbase or
Newco before any court, administrative agency or arbitrator that, if determined
adversely to Broadbase or Newco, may reasonably be expected to have a Material
Adverse Effect on Broadbase or Newco. There is no judgment, decree, injunction
or ruling of an administrative agency or arbitrator outstanding against
Broadbase or Newco, except as may reasonably be expected to have a Material
Adverse Effect on Broadbase or Newco. As of the date hereof, there is no action,
suit, proceeding, claim, arbitration or investigation pending as to which
Broadbase or Newco has received notice of assertion against Broadbase or Newco,
which in any manner challenges or seeks to prevent, enjoin, alter or materially
delay any of the transactions contemplated by this Agreement. To the knowledge
of Broadbase, there is no basis for any person, firm, corporation or entity to
assert a claim against Broadbase or any subsidiary of Broadbase based upon
rights to ownership of any shares of Broadbase common stock or any option,
warrant or other right to acquire any shares of Broadbase common stock, other
than shares, options, warrants or rights included in the amounts therefor set
forth in Section 5.2.
5.8 Absence of Certain Changes or Events. Since the Broadbase Balance
Sheet Date, Broadbase has carried on its business in the ordinary course
substantially in accordance with the procedures and practices in effect on the
Broadbase Balance Sheet Date.
(a) Except as set forth in Item 5.8 of the Broadbase Disclosure
Letter, since the Broadbase Balance Sheet Date there has not been any change,
circumstance or effect that is or is reasonably likely to be materially adverse
to the business, employees, assets (including intangible assets),
capitalization, financial condition, operations or results of operations of
Broadbase and its subsidiaries, taken as a whole.
(b) Except as set forth in Item 5.8 or permitted by the terms
of this Agreement, since the Broadbase Balance Sheet Date, Broadbase has not:
(i) amended its certificate of incorporation, bylaws or
any other charter document;
(ii) declared, set aside or paid any dividend on, or made
any other distribution in respect of, its capital stock, or made any changes in
any rights, preferences, privileges or restrictions of any of its outstanding
capital stock;
(iii) effected any split, stock dividend, combination or
recapitalization of its capital stock or any direct or indirect redemption,
purchase or other acquisition by Broadbase of its capital stock; or
(iv) consummated any transaction relating to a merger,
consolidation, sale of all or substantially all of its assets.
(v) incurred any obligation or liability to any of its
officers, directors, stockholders or affiliates, or made any loans or advances
to any of its officers, directors, stockholders or affiliates, except normal
compensation and expense allowances payable to officers or directors;
(vi) sold, issued, granted or authorized the issuance or
grant of: (A) any shares of its capital stock of any class or other security
(other than (1) options issued to employees in
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the ordinary course of business consistent with past practice, or (2) pursuant
to exercise of outstanding stock options); (B) any option, call, warrant,
obligation, subscription, or other right to acquire any capital stock or any
other security or (C) any instrument convertible into or exchangeable for any
capital stock or other security; or accelerated the vesting of any outstanding
option or other security;
(vii) made or entered into any agreement or understanding
to do any of the foregoing other than as disclosed in Item 5.8 of the Broadbase
Disclosure Letter.
5.9 Intellectual Property.
(a) Ownership of Intellectual Property. Broadbase owns all
right, title and interest in, or has the right to use, all Intellectual Property
Rights used in or reasonably necessary to the conduct of its business as
presently conducted and the business of the licensing and use of Broadbase
products and the sale of commercial services using such Intellectual Property
Rights (with such Intellectual Property Rights being hereinafter collectively
referred to as the "BROADBASE IP RIGHTS"). The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of any instrument or
agreement governing any Broadbase IP Right, will not cause forfeiture or
termination or give rise to a right of forfeiture or termination of any
Broadbase IP Right or materially impair the right of Servicesoft to use, sell or
license any Broadbase IP Right or portion thereof.
(b) No Violation of Rights of Others. The business of
Broadbase, as conducted as of the date hereof, does not, and the business of the
licensing and use of Broadbase products, and the sale of Broadbase commercial
services after the Effective Time will not, cause Broadbase to infringe or
violate any of the Intellectual Property Rights of any other person. Broadbase
has not received any written or oral claim or notice of infringement or
potential infringement of the Intellectual Property Rights of any other person
which could be reasonably expected to have a Material Adverse Effect on
Broadbase. To its knowledge, Broadbase is not using any confidential information
or trade secrets of any past or present employees.
(c) Protection of Rights. Broadbase has taken reasonable and
practicable steps designed to safeguard and maintain the secrecy and
confidentiality of, and its proprietary rights in, all Broadbase IP Rights. To
the knowledge of Broadbase, there is no material unauthorized use, infringement
or misappropriation of any Broadbase IP Rights by any third party, including, to
the knowledge of Broadbase, any Broadbase employee. Except as set forth in Item
5.9(c), Broadbase is not aware of any infringement of any Broadbase IP Rights by
any third party. All officers, employees and consultants of Broadbase and its
subsidiaries (other (i) than employees and consultants who are not and have not
been involved in developing Broadbase IP Rights or providing services to
customers and who have no managerial responsibilities and (ii) officers,
employees and consultants of Panopticon, Inc. and Decisionism, Inc.) have
executed and delivered to Broadbase an agreement regarding the protection of
proprietary information and the assignment to Broadbase of all Intellectual
Property Rights arising from the services provided for Broadbase or any
subsidiary of Broadbase by such persons.
5.10 Compliance with Laws. Broadbase has complied, or prior to the
Closing Date will have complied, and is or will be at the Closing Date in
compliance, in all respects material to Broadbase, with all applicable laws,
ordinances, regulations and rules, and all orders, writs, injunctions, awards,
judgments and decrees, applicable to Broadbase, or to the assets, properties and
business of Broadbase, including, without limitation:
(a) all applicable federal and state securities laws and
regulations;
(b) all applicable federal, state and local laws, ordinances
and regulations, and all orders, writs, injunctions, awards, judgments and
decrees, pertaining to (i) the sale, licensing, leasing, ownership or management
of Broadbase's owned, leased or licensed real or personal property,
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products or technical data, (ii) employment or employment practices, terms and
conditions of employment, or wages and hours or (iii) safety, health, fire
prevention, environmental protection (including toxic waste disposal and related
matters described in Section 4.16), building standards, zoning or other similar
matters;
(c) the Export Administration Act and regulations promulgated
thereunder or other laws, regulations, rules, orders, writs, injunctions,
judgments or decrees applicable to the export or re-export of controlled
commodities or technical data;
(d) the Immigration Reform and Control Act; and
(e) all governmental and nongovernmental regulations related to
the operation and use of the Internet.
Broadbase has received all material permits and approvals from,
and has made all material filings with, third parties, including government
agencies and authorities, that are necessary to the conduct of its business as
presently conducted.
5.11 Information Supplied. None of the information supplied or to be
supplied by Broadbase for inclusion in the Form S-4 and the Prospectus/Proxy
Statement, at the date such information is supplied, at the time of the meeting
of the stockholders of Broadbase to approve the Merger, and at the time of the
meeting, or the date of the written consent, of the Servicesoft Stockholders to
approve the Merger, contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, or will, in the case of
the Form S-4, at the time the Form S-4 becomes effective under the Securities
Act, contains any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
5.12 Accuracy of Disclosure. The representations and warranties
contained in this Agreement, taken together with the Broadbase Disclosure Letter
and any exhibits, schedules, certificates and documents to be delivered by
Broadbase to Servicesoft pursuant to this Agreement, do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein and therein, in light of the
circumstances under which such statements were made, not misleading.
6. SERVICESOFT PRE-CLOSING COVENANTS
During the period from the date of this Agreement until the earlier to
occur of (a) the Effective Time and (b) the termination of this Agreement in
accordance with the provisions of Article 11 hereof, Servicesoft covenants to
and agrees with Broadbase (and, where Broadbase explicitly agrees to perform
certain actions pursuant to specific provisions in this Article 6, Broadbase
covenants to and agrees with Servicesoft) as follows:
6.1 Access to Information. Until the Closing Date and subject to the
terms and conditions hereof relating to the confidentiality and use of
confidential and proprietary information, Servicesoft will provide Broadbase and
its agents with reasonable access, during regular business hours, to the files,
books, records and offices of Servicesoft and the Subsidiaries, including,
without limitation, any and all information relating to Servicesoft and
Subsidiary taxes, commitments, Contracts, leases, licenses, real, personal and
intangible property, and financial condition. Servicesoft will cause its
accountants to cooperate with Broadbase and its agents in making available all
financial information reasonably requested, including, without limitation, the
right to examine all working papers pertaining to all financial statements
prepared or audited by such accountants.
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6.2 Advice of Changes. Servicesoft will promptly advise Broadbase in
writing of: (i) the discovery by Servicesoft of any event, condition, fact or
circumstance occurring on or prior to the date of this Agreement that would
render any representation or warranty by Servicesoft contained in this Agreement
untrue or inaccurate in any material respect; (ii) any event, condition, fact or
circumstance occurring subsequent to the date of this Agreement that would
render any representation or warranty by Servicesoft contained in this
Agreement, if made on or as of the date of such event or the Closing Date,
untrue or inaccurate in any material respect; (iii) any breach of any covenant
or obligation of Servicesoft pursuant to this Agreement or any Ancillary
Agreement; (iv) any event, condition, fact or circumstance that may make the
timely satisfaction of any of the conditions set forth in Article 10 impossible
or unlikely; and (v) any Material Adverse Effect on Servicesoft.
6.3 Conduct of Business. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Servicesoft and each of its
subsidiaries shall, except to the extent that Broadbase shall otherwise consent
in writing, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance in all
material respects with all applicable laws and regulations, pay its debts and
Taxes when due, pay or perform other material obligations when due, and use all
reasonable efforts consistent with past practices and policies to (i) preserve
intact its present business organization, (ii) keep available the services of
its present officers, (iii) preserve its relationships with customers,
suppliers, licensors, licensees, and others with which it has business dealings,
(iv) maintain its equipment and other assets in good working condition and
repair according to the standards it has maintained to the date of this
Agreement, subject only to ordinary wear and tear, and (v) keep in full force
all insurance policies identified in Item 4.20 of the Servicesoft Disclosure
Letter and obtain any additional insurance required consistent with past
practices for its business and property. In addition, during that period,
Servicesoft will promptly notify Broadbase of any material event involving its
business or operations consistent with the agreements contained herein.
In addition, except as provided otherwise herein or as approved or
recommended by Broadbase, Servicesoft will not, without the prior written
consent of an executive officer of Broadbase, which consent shall not be
unreasonably withheld or delayed:
(a) sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of Servicesoft and its Subsidiaries or which have a book value in
excess of $250,000, other than non-exclusive licenses of Servicesoft IP Rights
pursuant to agreements entered into in the ordinary course of business
consistent with past practices ;
(b) borrow any money or guarantee any such indebtedness of
another person or enter into any "keep well" or other agreement to maintain any
financial statement condition or enter into any arrangement having the economic
effect of any of the foregoing; which obligations, liabilities or indebtedness
exceed $250,000 in the aggregate; provided, however, that Servicesoft may enter
into a line of credit for up to $10 million with a nationally recognized
financial institution on reasonable terms;
(c) enter into any licensing or other agreement with regard to
the acquisition, distribution or licensing of any material Intellectual Property
other than non-exclusive licenses, distribution or similar other agreements
entered into in the ordinary course of business consistent with past practice;
(d) grant or pay any bonus, royalty, severance or termination
pay, or increase the salary or other compensation payable or to become payable,
to any of Servicesoft's or any Subsidiary's directors, officers or employees or
consultants (except (i) pursuant to existing arrangements
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disclosed in Item 4.15(a) of the Servicesoft Disclosure Letter, (ii) normal
raises in salary (not to exceed ten percent) for non-officers in connection with
promotions or annual performance evaluations, in the ordinary course of business
consistent with past practice and (iii) severance or termination pay to
non-officer employees upon termination in an amount not to exceed four weeks'
salary), or enter into any new employment agreement (other than offer letters
for new hires on an "at-will" basis), or enter into any consulting agreement
which provides for payment of more than $100,000 annually with any person, or
adopt any new plan of the type described in Section 4.15(c);
(e) amend or cause or permit any amendment of its certificate
of incorporation, bylaws or any other charter document;
(f) enter into any material lease or Contract for the purchase
or sale of any property, real or personal, tangible or intangible, except in the
ordinary course of business consistent with past practice or enter into any
agreement of the types described in Section 4.14;
(g) amend or terminate any Contract or license to which
Servicesoft or a subsidiary thereof is a party, or relinquish or fail to renew
any material Contract or license to which it is a party or waive, release or
assign any material rights or clause thereunder, in each case, in a manner that
would have or would reasonably be expected to have a Material Adverse Effect on
Servicesoft;
(h) issue or sell any shares of its capital stock of any class
or any other of its securities, or issue, grant or create any warrants,
obligations, subscriptions, options, convertible securities, stock appreciation
rights or other commitments to issue shares of capital stock other than (i) the
issuance of shares pursuant to the exercise of warrants or options outstanding
on the date of this Agreement, or the exchange of exchangeable securities of
Servicesoft Canada that are outstanding on the date of this agreement, or the
conversion of shares of Servicesoft Preferred Stock that are outstanding on the
date of this Agreement or that are issued upon any such exchange; in each case
provided that (A) such options, warrants, exchangeable securities or shares of
convertible preferred stock are disclosed in Item 4.3 of the Servicesoft
Disclosure Letter and (B) such exercise, exchange or conversion is effected in
accordance with the terms of such options, warrants, exchangeable securities or
convertible preferred stock as in effect on the date of this Agreement; (ii)
option grants not to exceed 200,000 shares of Servicesoft Common Stock in the
aggregate issuable thereunder under the Servicesoft Employee Plans in the
ordinary course consistent with past practice, the terms of which shall provide
for vesting over a four year period, with the first 25% vesting one year after
the date of grant and the remaining 75% vesting in equal ratable installments
monthly thereafter, without any provision for acceleration of such vesting upon
the occurrence of any event or condition except as required by the terms of the
Servicesoft Employee Plans; (iii) the issuance of warrants to purchase up to
100,000 shares of Servicesoft's Common Stock in connection with the line of
credit permitted under clause (b) if Servicesoft shall enter into such line of
credit; and (iv) the issuance of up to 64,515 shares of Servicesoft Common Stock
to current or former employees of Servicesoft in connection with the termination
of Servicesoft's employee stock purchase plan;
(i) declare, set aside or pay any cash, stock or other dividend
or other distribution in respect of capital stock, or redeem or otherwise
acquire any of its capital stock;
(j) split or combine the outstanding shares of its capital
stock of any class, pay any stock dividend, or enter into any recapitalization
affecting the number of outstanding shares of its capital stock of any class or
affecting any other of its securities;
(k) acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest in or a portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof; or otherwise
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acquire or agree to acquire any assets which are material, individually or in
the aggregate, to the business of Servicesoft or enter into any joint ventures,
partnerships, strategic relationships or alliances;
(l) make or permit to be made any capital expenditures, or make
or commit or commit or agree to make any payments that would be classified as
expenses in each case which exceed $250,000 in any one transaction or the terms
of which transactions are not in the ordinary course of business consistent with
past practice;
(m) waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or restricted stock, or reprice
options granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(n) transfer or license to any person or entity or otherwise
extend, amend or modify in any material respect any rights to the Servicesoft
Intellectual Property, other than non-exclusive licenses in the ordinary course
of business and consistent with past practice;
(o) materially change the pricing of Servicesoft's products and
services;
(p) materially revalue any of its assets or, except as required
by GAAP, make any change in accounting methods, principles or practices, or
agree to any audit assessment by any tax authority or make any tax election;
(q) change any insurance coverage or issue any certificates of
insurance other than in the ordinary course of business consistent with past
practice;
(r) lend any amount to any person or entity, other than
advances for travel and expenses which are incurred in the ordinary course of
business consistent with past practice, not material in amount, which travel and
expenses shall be documented by receipts for the claimed amounts in accordance
with past practice;
(s) make any material payments outside the ordinary course of
business consistent with past practice;
(t) take any action which would have or would reasonably be
expected to have a Material Adverse Effect on Servicesoft; or
(u) agree to do, or permit a Subsidiary to do or agree to do,
any of the things described in the preceding clauses 6.4(a) through (t).
Notwithstanding any provision to the contrary contained herein, in
the event that Broadbase does not comply with its obligation to provide
Servicesoft with Loans as required under Section 7.12, then Servicesoft shall be
entitled to borrow up to $15 million or issue equity securities for net proceeds
of up to $15 million on such terms as Servicesoft may deem appropriate, provided
that in the event of any issuance of equity securities, rights to acquire equity
securities or convertible securities, appropriate adjustment shall be made to
the Conversion Ratio so that the percentage of the fully-diluted outstanding
common stock of Broadbase owned in aggregate by the Servicesoft Stockholders and
former holders of Servicesoft options and warrants immediately following the
Effective Time (determined using the treasury method) will not be increased as a
result of such issuance; and provided further that such transaction does not
involve an Acquisition Transaction.
6.4 Prospectus/Proxy Statement.
(a) SEC Filings. As promptly as practicable after the execution
of this Agreement, Servicesoft and Broadbase will prepare and file with the SEC,
the Prospectus/Proxy Statement and Broadbase will prepare and file with the SEC
the Form S-4 in which the Prospectus/Proxy
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Statement will be included. Each of Servicesoft and Broadbase will respond to
any comments of the SEC, will use its respective reasonable efforts to have the
Form S-4 registration statement declared effective under the Securities Act as
promptly as practicable after such filing, and each of Servicesoft and Broadbase
will cause the Prospectus/Proxy Statement to be mailed to its respective
stockholders at the earliest practicable time after the Registration Statement
is declared effective by the SEC. Each of Servicesoft and Broadbase will
promptly provide all information relating to its business or operations
necessary for inclusion in the Form S-4 and Prospectus/Proxy Statement to
satisfy all requirements of applicable state and federal securities laws, and
will be solely responsible for any statement, information or omission in the
Prospectus/Proxy Statement relating to it or its affiliates based upon written
information furnished by it. Servicesoft will not provide or publish to its
stockholders any material concerning it or its affiliates that violates the
Securities Act or Exchange Act with respect to the transactions contemplated
hereby.
(b) HSR Filings. As promptly as practicable after the date of
this Agreement, each of Servicesoft and Broadbase will prepare and file (i) with
the United States Federal Trade Commission and the Antitrust Division of the
United States Department of Justice Notification and Report Forms relating to
the transactions contemplated herein if required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by the
parties (the "ANTITRUST FILINGS") and (ii) any other filings required to be
filed by it under the Exchange Act, the Securities Act or any other Federal,
state or foreign laws relating to the Merger and the transactions contemplated
by this Agreement (the "OTHER FILINGS"). Servicesoft and Broadbase each shall
promptly supply the other with any information which may be required in order to
effectuate any filings pursuant to this Section 6.4. Neither Broadbase nor
Servicesoft nor any of their respective affiliates shall be under any obligation
to make proposals, execute or carry out agreements or submit to orders providing
for the sale or other disposition or holding separate (through the establishment
of a trust or otherwise) of any assets or categories of assets of Broadbase or
Servicesoft, any of their respective affiliates or subsidiaries, or the holding
separate of the shares of Servicesoft capital stock to be acquired or the
Exchange Shares, or imposing or seeking to impose any limitation on the ability
of Broadbase or Servicesoft or any of their respective subsidiaries or
affiliates to conduct their business or own such assets or to acquire, hold or
exercise full rights of ownership of the shares of Servicesoft capital stock to
be acquired by Broadbase or the Exchange Shares to be issued to Servicesoft
Stockholders.
(c) Joint Participation. Each of Servicesoft and Broadbase will
notify the other promptly upon the receipt of any comments from the SEC or its
staff or any other government officials in connection with any filing made
pursuant hereto and of any request by the SEC or its staff or any other
government officials for amendments or supplements to the Form S-4, the
Prospectus/Proxy Statement or any Antitrust Filings or Other Filings or for
additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Form S-4, the Prospectus/Proxy Statement, the Merger
or any Antitrust Filing or Other Filing. Each of Servicesoft and Broadbase will
cause all documents that it is responsible for filing with the SEC or other
regulatory authorities under this Section 6.5 to comply in all material respects
with all applicable requirements of law and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Prospectus/Proxy Statement, the Form
S-4 or any Antitrust Filing or Other Filing, Servicesoft or Broadbase, as the
case may be, will promptly inform the other of such occurrence and cooperate in
filing with the SEC or its staff or any other government officials, and/or
mailing to stockholders of the Servicesoft and/or Broadbase, such amendment or
supplement.
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6.5 Stockholder Approval.
(a) Servicesoft will hold a special meeting or solicit written
consent of the Servicesoft Stockholders as promptly as practicable, and in any
event (to the extent permissible under applicable law) no more than forty (40)
days after the SEC has declared the Form S-4 effective. Servicesoft will solicit
from the Servicesoft Stockholders proxies in favor of the approval of this
Agreement and the Merger, and, subject to the fiduciary obligations of
Servicesoft's directors, Servicesoft will use all reasonable efforts to take all
other action necessary or advisable to secure the vote or consent of the
Servicesoft Stockholders required under Delaware Law to obtain such approvals.
Any meeting of the Servicesoft Stockholders shall be called, held and conducted,
and any proxies or shareholder written consents will be solicited, in compliance
with all applicable federal laws, Delaware Law and Servicesoft's certificate of
incorporation and bylaws, and all other applicable legal requirements.
Servicesoft's obligation to call, give notice of, convene, hold and conduct the
Servicesoft Stockholders Meeting (as defined in Section 6.5(b)) or solicit a
written consent of the Servicesoft Stockholders in accordance with this Section
6.5 shall not be limited or otherwise affected by the commencement, disclosure,
announcement or submission to Servicesoft of any Acquisition Proposal (as
defined in Section 6.6(a)) or Superior Offer (as defined in Section 6.5(d)), or
by any withdrawal, amendment or modification of the recommendation of the Board
of Directors of Servicesoft to the Servicesoft Stockholders to approve this
Agreement and the Merger.
(b) In the event a meeting of the Servicesoft Stockholders is
held to approve this Agreement and the Merger (the "SERVICESOFT STOCKHOLDERS
MEETING"), then notwithstanding anything to the contrary contained in this
Agreement, Servicesoft may adjourn or postpone the Servicesoft Stockholders
Meeting if as of the time for which the Servicesoft Stockholders Meeting is
originally scheduled there are insufficient shares of Servicesoft capital stock
represented (either in person or by proxy) to constitute a quorum necessary to
conduct the business of the Servicesoft Stockholders Meeting, in which case the
Servicesoft Stockholders Meeting shall be re-convened as soon as a quorum is
available. Servicesoft shall ensure that the Servicesoft Stockholders Meeting is
called, noticed, convened, held and conducted prior to and separate from any
meeting of the Servicesoft Stockholders at which any Acquisition Proposal or
Acquisition Transaction (as defined in Section 6.6(a)) is considered or voted
upon.
(c) Subject to Section 6.5(d): (i) the Board of Directors of
Servicesoft shall unanimously recommend that the Servicesoft Stockholders
approve this Agreement and the Merger; (ii) the Form S-4 and Prospectus/Proxy
Statement, and the written consent of stockholders, if any, shall include a
statement to the effect that the Board of Directors of Servicesoft has
recommended that the Servicesoft Stockholders approve this Agreement and the
Merger; and (iii) neither the Board of Directors of Servicesoft nor any
committee thereof shall withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify in a manner adverse to Broadbase, the recommendation
of the Board of Directors of Servicesoft that the Servicesoft Stockholders vote
in favor of and approve this Agreement and the Merger.
(d) Nothing in this Agreement shall prevent the Board of
Directors of Servicesoft from withholding, withdrawing, amending or modifying
its recommendation in favor of the Merger if (i) a Superior Offer (as defined
below) is made to Servicesoft and is not withdrawn, (ii) Servicesoft shall have
provided written notice to Broadbase (a "NOTICE OF SUPERIOR OFFER") advising
Broadbase that Servicesoft has received a Superior Offer, specifying all of the
material terms and conditions of such Superior Offer and identifying the person
or entity making such Superior Offer, (iii) Broadbase shall not have, within
three business days of Broadbase's receipt of the Notice of Superior Offer, made
an offer that Servicesoft's Board of Directors by a majority vote determines in
its good faith judgment (based on the written advice of a financial advisor of
national standing) to be at least as favorable to Servicesoft's stockholders as
such Superior Offer (it being agreed that the Board of
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Directors of Servicesoft shall convene a meeting to consider any such offer by
Broadbase promptly following the receipt thereof), (iv) the Board of Directors
of Servicesoft concludes in good faith, after consultation with its outside
counsel, that, in light of such Superior Offer, the withholding, withdrawal,
amendment or modification of such recommendation is required in order for the
Board of Directors of Servicesoft to comply with its fiduciary obligations to
Servicesoft's stockholders under applicable law and (v) Servicesoft shall not
have violated any of the restrictions set forth in Section 6.6 or this Section
6.5. Servicesoft shall provide Broadbase with at least two business days prior
notice (or such lesser prior notice as provided to the members of Servicesoft's
Board of Directors but in no event less than twenty-four hours) of any meeting
of Servicesoft's Board of Directors at which Servicesoft's Board of Directors is
reasonably expected to consider any Acquisition Proposal to determine whether
such Acquisition Proposal is a Superior Offer. Nothing contained in this Section
6.5(d) shall limit Servicesoft's obligation to hold and convene Servicesoft
Stockholders' Meeting (regardless of whether the recommendation of the Board of
Directors of Servicesoft shall have been withdrawn, amended or modified). For
purposes of this Agreement, "SUPERIOR OFFER" shall mean an unsolicited, bona
fide offer made by a third party to consummate any of the following
transactions: (i) a merger or consolidation involving Servicesoft pursuant to
which the stockholders of Servicesoft immediately preceding such transaction
hold less than 50% of the equity interest in the surviving or resulting entity
of such transaction or (ii) the acquisition by any person or group (including by
way of a tender offer or an exchange offer or a two step transaction involving a
tender offer followed with reasonable promptness by a merger involving
Servicesoft), directly or indirectly, of ownership of 100% of the then
outstanding shares of capital stock of Servicesoft, on terms that the Board of
Directors of Servicesoft determines, in its reasonable judgment (based on the
written advice of a financial advisor of national standing) to be more favorable
to Servicesoft stockholders than the terms of the Merger; provided, however,
that any such offer shall not be deemed to be a "Superior Offer" if any
financing required to consummate the transaction contemplated by such offer is
not committed and is not likely in the reasonable judgment of Servicesoft's
Board of Directors (based on the advice of its financial advisor) to be obtained
by such third party on a timely basis.
6.6 No Solicitation.
(a) Definitions.
(i) "ACQUISITION PROPOSAL" means any offer or proposal
(other than an offer or proposal by Broadbase) relating to an Acquisition
Transaction with respect to Servicesoft.
(ii) "ACQUISITION TRANSACTION" with respect to any entity
means any transaction or series of related transactions other than the
transactions contemplated by this Agreement involving: (a) any acquisition or
purchase from such entity by any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) of more than
a 15% interest in the total outstanding voting securities of such entity or any
of its subsidiaries or any tender offer or exchange offer that if consummated
would result in any person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) beneficially owning 15%
or more of the total outstanding voting securities of such entity, or any of its
subsidiaries or any merger, consolidation, business combination or similar
transaction involving such entity; (b) any sale, lease (other than in the
ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than 10% of the
assets of such entity; or (c) any liquidation or dissolution of such entity.
(b) From and after the date of this Agreement until the
Effective Time or termination of this Agreement pursuant to Article 11,
Servicesoft and its Subsidiaries will not, nor will they authorize or permit any
of their respective officers, directors, affiliates or employees or any
investment banker, attorney or other advisor or representative retained by any
of them to, directly or indirectly:
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(i) solicit, or initiate the making, submission or
announcement of any Acquisition Proposal;
(ii) furnish to any person any non-public information
with respect to any Acquisition Proposal or take any other action to facilitate
any inquiries regarding any Acquisition Proposal;
(iii) participate or engage in any discussions or
negotiations with any person with respect to any Acquisition Proposal, except
that Servicesoft may inform third parties, in response to unsolicited inquiries,
of the existence of these provisions;
(iv) approve, endorse or recommend any Acquisition
Proposal (except, in the case of a Superior Offer, if (1) neither Servicesoft
nor any representative of Servicesoft and its Subsidiaries shall have violated
any of the restrictions set forth in this Section 6.6 and (2) the Board of
Directors of Servicesoft concludes in good faith, after consultation with its
outside legal counsel, that it must approve, endorse or recommend such Superior
Offer in order for it to comply with its fiduciary obligations to Servicesoft's
stockholders under applicable law); or
(v) enter into any letter of intent or similar document
or any Contract contemplating or otherwise relating to any Acquisition
Transaction;
provided, however, that notwithstanding the foregoing, prior to the approval of
this Agreement and the Merger at the Servicesoft Stockholders' Meeting, this
Section 6.6(b) shall not prohibit Servicesoft from furnishing nonpublic
information regarding Servicesoft and its Subsidiaries to, or entering into
discussions or negotiations with, any person or group who has submitted (and not
withdrawn) to Servicesoft an unsolicited, written, bona fide Acquisition
Proposal that the Board of Directors of Servicesoft reasonably concludes (based
on the written advice of a financial advisor of national standing) may
constitute a Superior Offer if (1) neither Servicesoft nor any representative of
Servicesoft and its Subsidiaries shall have violated any of the restrictions set
forth in this Section 6.6, (2) the Board of Directors of Servicesoft concludes
in good faith, after consultation with its outside legal counsel, that such
action is required in order for the Board of Directors of Servicesoft to comply
with its fiduciary obligations to Servicesoft's stockholders under applicable
law, (3) prior to furnishing any such nonpublic information to, or entering into
any such discussions with, such person or group, Servicesoft gives Broadbase
written notice of the identity of such person or group and all of the material
terms and conditions of such Acquisition Proposal and of Servicesoft's intention
to furnish nonpublic information to, or enter into discussions with, such person
or group, and Servicesoft receives from such person or group an executed
confidentiality agreement containing terms at least as restrictive with regard
to Servicesoft's confidential information as the confidentiality agreement
entered into by the parties hereto, (4) Servicesoft gives Broadbase at least two
business days advance notice of its intent to furnish such nonpublic information
or enter into such discussions, and (5) contemporaneously with furnishing any
such nonpublic information to such person or group, Servicesoft furnishes such
nonpublic information to Broadbase (to the extent such nonpublic information has
not been previously furnished by Servicesoft to Broadbase). Servicesoft and its
Subsidiaries will immediately cease any and all existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding two sentences by any
officer, director or employee of Servicesoft or any of its Subsidiaries or any
investment banker, attorney or other advisor or representative of Servicesoft or
any of its Subsidiaries shall be deemed to be a breach of this Section 6.6 by
Servicesoft; provided that if such violation consists of a communication by any
such advisor which was unauthorized by Servicesoft and Servicesoft terminates
its relationship with such advisor and with such advisor's employer immediately
upon becoming aware of such communication, then such from and after such
termination, then such
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communication shall no longer be deemed to constitute a material breach of this
Agreement for purposes of Sections 10.2 and 11.1(a)(ii).
(c) In addition to the obligations of Servicesoft set forth in
Section 6.6(b), Servicesoft as promptly as practicable shall advise Broadbase
orally and in writing of any request for non-public information or any other
inquiry which Servicesoft believes is likely to lead to an Acquisition Proposal
or of any Acquisition Proposal, the material terms and conditions of such
request, inquiry or Acquisition Proposal, and the identity of the person or
group making any such request, inquiry or Acquisition Proposal. Servicesoft will
keep Broadbase informed as promptly as practicable in all material respects of
amendments to any such request, inquiry or Acquisition Proposal.
6.7 Regulatory Approvals. Servicesoft will execute and file, or join
in the execution and filing, of any application or other document that may be
necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign, which may be reasonably
required, or which Broadbase may reasonably request, in connection with the
consummation of the transactions provided for in this Agreement. Servicesoft
will use all reasonable efforts to obtain or assist Broadbase in obtaining all
such authorizations, approvals and consents.
6.8 Necessary Consents. Servicesoft will use all reasonable efforts to
obtain such written consents and take such other actions as may be necessary or
appropriate for Servicesoft, in addition to those set forth in Section 6.4, to
allow the consummation of the transactions provided for herein and to facilitate
and allow Broadbase to carry on Servicesoft's business after the Closing Date.
6.9 Blue Sky Laws. Servicesoft shall use all reasonable efforts to
assist Broadbase to the extent necessary to comply with the securities and Blue
Sky laws of all jurisdictions applicable in connection with the Merger.
6.10 Servicesoft Dissenting Shares. As promptly as practicable after
the date the Prospectus/Proxy Statement is distributed to Servicesoft
Stockholders and prior to the Closing Date, Servicesoft shall furnish Broadbase
with the name and address of each Servicesoft Stockholder who has up to such
time dissented and the number of shares owned by such Servicesoft Stockholders.
6.11 Litigation. Servicesoft will notify Broadbase in writing promptly
after learning of any material action, suit, proceeding or investigation by or
before any court, board or governmental agency, initiated by or against
Servicesoft or threatened against it. In addition, Servicesoft will notify
Broadbase in writing promptly after learning of any action, suit, proceeding,
claim, arbitration or investigation threatened or pending for the purpose or
with the probable effect of enjoining or preventing the consummation of any of
the transactions contemplated by this Agreement, or which would be reasonably
expected to have a Material Adverse Effect on Broadbase. If Servicesoft becomes
subject to a review by the Internal Revenue Service or any other taxing agency
or authority for accounting periods prior to the Closing Date (including but not
limited to any short tax year resulting from the Merger), then Servicesoft
acknowledges that Broadbase will be entitled to participate in such review.
Servicesoft will not enter into any settlement or other stipulation with respect
to any such review without the written consent of Broadbase, which consent will
not be unreasonably withheld.
6.12 Certain Employee Benefits. As soon as practicable after the
execution of this Agreement, Servicesoft and Broadbase shall confer and work
together in good faith to agree upon mutually acceptable employee benefit and
compensation arrangements for employees of Servicesoft and its Subsidiaries
following the Merger. Servicesoft shall take such actions as are necessary to
terminate such Servicesoft Employee Plans as are requested by Broadbase to be
terminated, provided that those employees of Servicesoft and its Subsidiaries
who are eligible to participate in each such Servicesoft Employee Plan shall be
provided the opportunity to participate in a substantially comparable employee
benefit plan maintained by Broadbase and provided further that Broadbase
requests such termination no
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later than ten days prior to the Closing Date. Servicesoft agrees that it shall
terminate any and all group severance, separation, retention and salary
continuation plans, programs or arrangements (other than the Employment
Agreements) prior to the Closing.
6.13 Notification of Employee Problems. Servicesoft will
promptly notify Broadbase if any of Servicesoft's officers becomes aware that
any of its officers and software developer managers, or any material number
of other employees intends or threatens to leave its employ.
6.14 Certain Agreements. Servicesoft will use all reasonable
efforts to cause all present employees and consultants of Servicesoft who
have not previously executed Servicesoft's forms of assignments of copyright
and other intellectual property rights to Servicesoft to execute such forms.
6.15 Servicesoft Affiliates. To help ensure that the issuance
of the Exchange Shares complies with the Securities Act, prior to the Closing
Date Servicesoft will deliver a letter identifying all persons who are, in
Servicesoft's reasonable judgment, "affiliates" of Servicesoft at that time
(the "SERVICESOFT AFFILIATES"). Servicesoft will provide Broadbase with all
information and documents needed to evaluate this list for compliance with
securities laws. Broadbase will cause the Exchange Shares issued to the
Servicesoft Affiliates to bear legends with respect to any application
limitations on transfer under Rule 145 promulgated under the Securities Act.
6.16 Satisfaction of Closing Conditions. Servicesoft will use
all reasonable efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Article 10 or elsewhere in this Agreement on
or before the Closing. Servicesoft will use all reasonable efforts to cause
the transactions contemplated by this Agreement to be consummated, and,
without limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties that may be necessary or reasonably required on its
part in order to effect the transactions contemplated hereby.
6.17 Conversion of Servicesoft Preferred Stock and Servicesoft
Warrants. Servicesoft agrees to solicit from the holders of each series of
Servicesoft Canada Preferred Stock consent to exchange all of the shares of
Servicesoft Canada Preferred Stock into shares of Servicesoft Series H
Preferred Stock prior to the Effective Time of the Merger. Servicesoft
further agrees to solicit from the holders of each series of Servicesoft
Preferred Stock consent to convert all of the shares of Servicesoft Preferred
Stock (other than the Servicesoft Series X Preferred Stock and Servicesoft
Series Y Preferred Stock) into shares of Servicesoft Common Stock prior to
the Effective Time, and to use all reasonable efforts to cause such
conversion. In addition, Servicesoft agrees to use all reasonable efforts to
cause each holder of Servicesoft Warrants to exercise, effective as of, and
contingent upon, the consummation of the Merger, all Servicesoft Warrants
beneficially owned by such person in full in accordance with the terms of
such Servicesoft Warrants. Subject to Section 7.18, Servicesoft shall use
all reasonable efforts to cause each share of Servicesoft Canada Preferred
Stock and Servicesoft Canada Common Stock to be exchanged, prior to the
Effective Time of the Merger, for shares of Servicesoft Preferred Stock and
Servicesoft Common Stock, respectively, in accordance with the terms of such
Servicesoft Canada Preferred Stock and the constituent documents of
Servicesoft Canada.
6.18 Confirmation of Equity Interests. Prior to the Effective
Time (and, in the case of any convertible securities which are to be
converted, or warrants which are to be exercised, prior to the Effective
Time, prior to such conversion or exercise), Servicesoft will provide
Broadbase with such information and documents as Broadbase may from time to
time reasonably request with respect to the calculations of antidilution
adjustments, dividends and share and warrant issuances that are reflected in
the Servicesoft Disclosure Letter. If, prior to the Effective Time, any
person shall notify Servicesoft of its election to exercise any warrants or
convert any convertible securities of Servicesoft, or exchange any
Servicesoft Canada Preferred Stock or Servicesoft Canada Common Stock for
Servicesoft Capital Stock, in each case where the terms of such exercise or
conversion would give effect to any antidilution
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adjustments or dividends by Servicesoft, or where the number of shares to be
issued upon such exercise or conversion would differ from the number set
forth or reflected in the Servicesoft Disclosure Letter, then Servicesoft
shall notify Broadbase in writing of such exercise, conversion or exchange
prior to issuing or delivering any shares of Servicesoft Capital Stock upon
such exercise or conversion, and, if requested by Broadbase, shall not
deliver any such shares of Servicesoft Capital Stock until the holder of the
warrant being exercised, or the security being converted or exchange, has
confirmed to Servicesoft and Broadbase its concurrence with the number set
forth or reflected in the Servicesoft Disclosure Letter.
7. BROADBASE PRE-CLOSING COVENANTS
During the period from the date of this Agreement until the
Effective Time, Broadbase covenants to and agrees with Servicesoft (and,
where Servicesoft explicitly agrees to perform certain actions pursuant to
specific provisions in this Article 7, Servicesoft covenants to and agrees
with Broadbase) as follows:
7.1 Advice of Changes. Broadbase will promptly advise
Servicesoft in writing of: (i) the discovery by Broadbase of any event,
condition, fact or circumstance occurring on or prior to the date of this
Agreement that would render any representation or warranty by Broadbase
contained in this Agreement untrue or inaccurate in any material respect;
(ii) any event, condition, fact or circumstance occurring subsequent to the
date of this Agreement that would render any representation or warranty by
Broadbase contained in this Agreement, if made on or as of the date of such
event or the Closing Date, untrue or inaccurate in any material respect;
(iii) any breach of any covenant or obligation of Broadbase pursuant to this
Agreement or any Ancillary Agreement; (iv) any event, condition, fact or
circumstance that, to its knowledge, would cause the Merger not to qualify as
a tax-free reorganization in accordance with the provisions of Section
368(a)(1)(A) and Section 368(a)(2)(E) of the Code; (v) any event, condition,
fact or circumstance that may make the timely satisfaction of any of the
conditions set forth in Article 9 impossible or unlikely; and (v) any
Material Adverse Effect on Broadbase.
7.2 Conduct of Business. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Broadbase and each of
its subsidiaries shall, except to the extent that Servicesoft shall otherwise
consent in writing, carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted and in
compliance in all material respects with all applicable laws and regulations,
pay its debts and Taxes when due subject to good faith disputes over such
debts or Taxes, pay or perform other material obligations when due, and use
all reasonable efforts consistent with past practices and policies to (i)
preserve intact its present business organization, (ii) keep available the
services of its present officers, (iii) preserve its relationships with
customers and licensees, (iv) maintain its equipment and other assets in good
working condition and repair according to the standards it has maintained to
the date of this Agreement, subject only to ordinary wear and tear, and (v)
keep in full force all of its insurance policies and obtain any additional
insurance required consistent with past practices for its business and
property. In addition, during that period, Broadbase will promptly notify
Servicesoft of any material event involving its business or operations
consistent with the agreements contained herein, subject to any obligations
of confidentiality.
In addition, except as provided otherwise herein or as
approved or recommended by Servicesoft, Broadbase will not, without the prior
written consent of an executive officer of Servicesoft, which consent shall
not be unreasonably withheld or delayed:
(a) acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or a portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof,
in each case
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which involve the issuance of equity securities, or securities convertible
into or exchangeable for equity securities, which in the aggregate represent
more than 4,789,769 shares of common stock; provided that the pending
acquisitions of Panopticon, Inc. and Decisionism, Inc. by Broadbase shall not
be restricted by this Section 7.2;
(b) issue or sell any shares of its capital stock of any
class or any other of its securities, or issue, grant or create any warrants,
obligations, subscriptions, options, convertible securities, stock
appreciation rights or other commitments to issue shares of capital stock
other than (i) in connection with permitted acquisitions of the type
described in Section 7.2(a) and in the acquisitions of Panopticon, Inc. and
Decisionism, Inc., (ii) upon exercise of outstanding options or warrants, or
(iii) option grants not to exceed 800,000 shares of Broadbase Common Stock in
the aggregate issuable thereunder, to employees, consultants and directors of
Broadbase in the ordinary course, consistent with past practice plus options
issuable (or which may be assumed) in connection with the acquisitions of
Panopticon, Inc. and Decisionism, Inc.;
(c) sell, lease, license, encumber or otherwise dispose
of any properties or assets which are material, individually or in the
aggregate, to the business of Broadbase, other than non-exclusive licenses of
Broadbase IP in the ordinary course of business;
(d) amend or cause or permit any amendment of its
certificate of incorporation, bylaws or any other charter document, other
than the amendment of Broadbase's certificate of incorporation to authorize
additional shares of Broadbase common stock to be issued to Servicesoft
Stockholders pursuant to the Merger;
(e) declare, set aside or pay any cash or stock dividend
or other distribution in respect of capital stock, or redeem or otherwise
acquire any of its capital stock;
(f) materially revalue any of its assets or, except as
required by GAAP, make any change in accounting methods, principles or
practices;
(g) Consummate, or enter into any agreement to
consummate, or hold any stockholders' meeting to consider and approve, any
Broadbase Acquisition (as defined below), unless the record date for the
meeting of Broadbase stockholders to approve such Broadbase Acquisition is
(or will be) after the Effective Time. Notwithstanding anything in this
Agreement to the contrary, Broadbase may enter into an agreement with a third
party regarding a Broadbase Acquisition as long as the record date for a
Broadbase stockholders' meeting to consider such Acquisition Proposal for
Broadbase falls on a date after the Effective Time. As used herein,
"BROADBASE ACQUISITION" shall mean an Acquisition of Broadbase.
(h) take any action that Broadbase knows will cause the
Merger to fail to qualify as a tax-free reorganization.
(i) agree to do, or permit a Subsidiary to do or agree to
do, any of the things described in the preceding clauses 7.2(a) through (h).
7.3 Regulatory Approvals. Broadbase will execute and file, or
join in the execution and filing of, any application or other document that
may be necessary in order to obtain the authorization, approval or consent of
any governmental body, federal, state, local or foreign, which may be
reasonably required, or which Servicesoft may reasonably request, in
connection with the consummation of the transactions provided for in this
Agreement including, without limitation, the Form S-4 and any applicable
filings under the HSR Act. Broadbase will use all reasonable efforts to
obtain all such authorizations, approvals and consents.
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7.4 Amendment of Certificate of Incorporation. Broadbase will
amend its certificate of incorporation to authorize additional shares of
Broadbase Common Stock to be issued to Servicesoft Stockholders.
7.5 Broadbase Stockholders' Approval. Broadbase will call a
special meeting of its stockholders, to be held within forty (40) days after
the Form S-4 shall have been declared effective by the SEC (the "BROADBASE
STOCKHOLDERS' MEETING"). Broadbase will solicit from its stockholders
proxies in favor of the approval of the issuance of the Exchange Shares
pursuant to the Merger, an amendment to Broadbase's Certificate of
Incorporation to increase the authorized number of shares of Broadbase Common
Stock in order to permit the issuance of Exchange Shares pursuant to the
Merger, and any related matters and, to the extent required by applicable law
or by Broadbase's certificate of incorporation or bylaws, in favor of the
approval of this Agreement and the Merger (such approvals, the "BROADBASE
STOCKHOLDER APPROVALS"). Broadbase will use all reasonable efforts to take
all other action necessary or advisable to secure the vote of its
stockholders required under Delaware Law to obtain the Broadbase Stockholder
Approvals. Subject to the following sentence, (i) the Board of Directors of
Broadbase shall unanimously recommend that the stockholders of Broadbase give
the Broadbase Stockholder Approvals; (ii) the Form S-4 and the
Prospectus/Proxy Statement will include a statement to the effect that
Broadbase's Board of Directors has recommended that the stockholders of
Broadbase vote in favor of the Broadbase Stockholder Approvals; and (iii)
neither the Board of Directors of Broadbase nor any committee thereof shall
withdraw, amend or modify, or propose or resolve to withdraw, amend or modify
in a manner adverse to Servicesoft, the recommendation of the Board of
Directors of Broadbase that the stockholders of Broadbase vote in favor of
the Broadbase Stockholder Approvals. Notwithstanding the foregoing, nothing
in this Agreement shall prevent the Board of Directors of Broadbase from
withholding, withdrawing, amending or modifying its recommendation in favor
of the Broadbase Stockholder Approvals if (i) an unsolicited bona fide offer
made by a third party to consummate a Broadbase Acquisition (including,
without limitation, the acquisition by any person or group, including by way
of tender offer or an exchange offer or a two step transaction involving a
tender offer followed with reasonable promptness by a merger involving
Broadbase, directly or indirectly, of ownership of 100% of the then
outstanding shares of capital stock of Broadbase) in which, such third party
has required as a condition to closing such transaction, that this Agreement
shall have been terminated and the Merger not effected (a "BROADBASE
ACQUISITION OFFER") is made to Broadbase and is not withdrawn, (ii) Broadbase
shall have provided written notice to Servicesoft advising Servicesoft that
Broadbase has received a Broadbase Acquisition Offer, specifying all of the
material terms and conditions of such Broadbase Acquisition Offer and
identifying the person or entity making such Broadbase Acquisition Offer and
(iii) the Board of Directors of Broadbase concludes in good faith, after
consultation with its outside legal counsel and a financial advisor of
national standing, that, in light of such Broadbase Acquisition Offer, the
withholding, withdrawal, amendment or modification of its recommendation that
the stockholders of Broadbase give the Broadbase Stockholder Approvals is
required in order for the Board of Directors of Broadbase to comply with its
fiduciary obligations to Broadbase's stockholders under applicable law. The
Broadbase Stockholders' Meeting will be called, held and conducted, and any
proxies will be solicited, in compliance with applicable law. Broadbase's
obligation to call, give notice of, convene, hold and conduct the Broadbase
Stockholders' Meeting shall not be limited or otherwise affected by the
commencement, disclosure, announcement or submission to the stockholders of
Broadbase of a Broadbase Acquisition Offer, or by any withdrawal, amendment
or modification of the recommendation of the Board of Directors of Broadbase
at such Broadbase Stockholders' Meeting. Broadbase may not hold a meeting of
its stockholders to consider a Broadbase Acquisition unless the record date
for such meeting is after the Effective Time.
7.6 Litigation. Broadbase will notify Servicesoft in writing
promptly after learning of any action, suit, proceeding, claim, arbitration
or investigation threatened or pending for the purpose or with the probable
effect of enjoining or preventing the consummation of any of the transactions
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contemplated by this Agreement, or which would be reasonably expected to have
a Material Adverse Effect on Broadbase.
7.7 Certain Employee Benefits. As soon as practicable after
the execution of this Agreement, Servicesoft and Broadbase shall confer and
work together in good faith to agree upon mutually acceptable employee
benefit and compensation arrangements for Servicesoft employees following the
Merger. Broadbase's benefit arrangements and employee plans shall, to the
extent that this provision does not violate the applicable plan, policy,
program or arrangement, give full credit (including, without limitation, for
purposes of eligibility, vesting and benefits accrued) for each participant's
service to Servicesoft for all purposes for which such service was recognized
under Servicesoft's benefit arrangements or employee plans prior to the
effective time.
7.8 Satisfaction of Conditions Precedent. Broadbase will use
all reasonable efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Article 9 on or before the Closing Date.
Broadbase will use all reasonable efforts to cause the transactions provided
for in this Agreement to be consummated, and, without limiting the generality
of the foregoing, to obtain all consents and authorizations of third parties
and to make all filings with, and give all notices to, third parties that may
be necessary or reasonably required on its part in order to effect the
transactions provided for herein.
7.9 Blue Sky Laws. Broadbase shall take such steps as may be
necessary to comply with the securities and Blue Sky laws of all
jurisdictions which are applicable in connection with the Merger.
7.10 Nasdaq Listing. Broadbase agrees to authorize for listing
on the Nasdaq Stock Market the shares of Broadbase Common Stock issuable, and
those required to be reserved for issuance, in connection with the Merger,
upon official notice of issuance.
7.11 Board Representation. Broadbase shall appoint the chief
executive officer of Servicesoft and Robert Davoli (or such other person as
may be designated by the mutual agreement of Broadbase and Servicesoft) to
Broadbase's Board of Directors as of the Effective Time; provided however,
that if upon such appointment and any concurrent resignations of any present
Broadbase directors, the Board of Directors of Broadbase shall consist of
seven (7) or more members, then Broadbase shall appoint one additional person
(who shall be mutually acceptable to Servicesoft and Broadbase) to the Board
of Directors of Broadbase.
7.12 Bridge Loan.
(a) Provided this Agreement has not been terminated as
provided in Article 11, Broadbase agrees to advance to Servicesoft, on an
as-needed-basis, bridge loans of up to an aggregate of $15 million (the
"LOANS") for the purpose of financing operating expenses incurred in the
ordinary course of business, pursuant to the terms set forth in the form of
convertible promissory note attached hereto as Exhibit D, and subject to
execution and delivery of such note by Servicesoft. Each advance of all or
any portion of the Loan shall be subject to the conditions that (i) the
representations and warranties of Servicesoft set forth in this Agreement
shall be true and correct in all material respects as of the time of such
advance, (ii) Servicesoft shall not have breached in any material respect any
covenant contained in this Agreement, and (iii) Servicesoft shall have given
Broadbase at least five (5) days' written notice requesting such advance and
affirming that the conditions described in clauses (i) and (ii) have been
satisfied.
(b) If this Agreement is terminated pursuant to Article
11, then all unpaid principal and accrued interest under the Loan (at the
rate of 8.5% per annum) shall become due and payable by Servicesoft on the
date that is one year after the date of such termination (the "DUE DATE");
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provided; however, that Broadbase shall be entitled to require earlier
repayment either upon (i) the closing of any equity financing following such
termination, in which case, Broadbase shall be entitled to receive the lesser
of (1) the aggregate amount of the unpaid principal and accrued interest
under the Loan and (2) 50% of the funds raised in such equity financing, in
either case, in payment for the unpaid principal and accrued interest under
the Loan, with the remainder to be paid off in full on the Due Date, or (ii)
an Acquisition of Servicesoft. Servicesoft agrees to provide Broadbase with
at least ten days' prior written notice of the closing of Servicesoft's next
equity financing and of any Acquisition of Servicesoft, including the terms
thereof. At the election of Broadbase, the Loans may at any time be converted
into shares of Servicesoft common stock at $10 per share or into the same
securities as are issued in the next equity financing following such
termination at a conversion price equal to the price per share of the equity
securities sold in such equity financing, and each party hereto will take all
steps necessary or advisable to effect such result.
7.13 Section 16. Provided that Servicesoft delivers to
Broadbase the Section 16 Information (as defined below) in a timely fashion,
the Board of Directors of Broadbase, or a committee of two or more
Non-Employee Directors thereof (as such term is defined for purposes of Rule
16b-3 under the Exchange Act), shall adopt resolutions prior to the
consummation of the Merger, providing that the receipt by the Company
Insiders (as defined below) of Broadbase Common Stock upon conversion of the
Servicesoft Common Stock, and of options for Broadbase Common Stock upon
conversion of the Servicesoft Options, in each case pursuant to the
transactions contemplated hereby and to the extent such securities are listed
in the Section 16 Information, are intended to be exempt from liability
pursuant to Section 16(b) under the Exchange Act. Such resolutions shall
comply with the approval conditions of Rule 16b-3 under the Exchange Act for
purposes of such Section 16(b) exemption, including, but not limited to,
specifying the name of the Company Insiders, the number of securities to be
acquired or disposed of for each such person, the material terms of any
derivative securities, and that the approval is intended to make the receipt
of such securities exempt pursuant to Rule 13b-3(d). "Section 16
Information" shall mean information regarding the Company Insiders, the
number of shares of Servicesoft capital stock held by each such Company
Insider and expected to be exchanged for Broadbase Common Stock in connection
with the Merger, and the number and description of the Servicesoft Options
held by each such Company Insider and expected to be converted into options
for Broadbase Common Stock in connection with the Merger. "Company Insiders"
shall mean those officers and directors of Servicesoft who will be subject to
the reporting requirement of Section 16(b) of the Exchange Act with respect
to Broadbase and who are listed in the Section 16 Information.
7.14 Access to Information. Until the Closing Date and subject
to the terms and conditions hereof relating to the confidentiality and use of
confidential and proprietary information, Broadbase will provide Servicesoft
and its agents with reasonable access, during regular business hours, to the
files, books, records and offices of Broadbase and its subsidiaries,
including, without limitation, any and all information relating to
Broadbase's taxes, commitments, Contracts, leases, licenses, real, personal
and intangible property, and financial condition; provided that Broadbase
shall not be required to provide Servicesoft or its agents with access to any
files, books, records or information where (a) such access would waive any
privileges available under applicable law, or (b) would violate the terms of
any nondisclosure agreement with any third party after Broadbase shall have
used all reasonable efforts to obtain a waiver of, or consent to disclosure
under, such agreement.
7.15 Necessary Consents. Broadbase will use all reasonable
efforts to obtain such written consents and take such other actions as may be
necessary or appropriate for Broadbase, in addition to those set forth in
Section 7.5, to allow the consummation of the transactions provided for
herein.
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7.16 Director and Officer Indemnification. From and after the
Effective Time, Broadbase shall cause the certificate of incorporation and
by-laws of the Surviving Corporation to include indemnification provisions
substantially identical in all material respects to the corresponding
existing provisions in the certificate of incorporation and by-laws of
Servicesoft.
7.17 No Solicitation. From and after the date of this Agreement
until the Effective Time or termination of this Agreement pursuant to Article
11, Broadbase and its Subsidiaries will not, nor will they authorize or
permit any of their respective officers, directors, affiliates or employees
or any investment banker, attorney or other advisor or representative
retained by any of them to, directly or indirectly solicit or initiate the
making, submission or announcement of any Acquisition with respect to
Broadbase. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any
officer, director or employee of Broadbase or any of its Subsidiaries or any
investment banker, attorney or other advisor or representative of Broadbase
or any of its Subsidiaries shall be deemed to be a breach of this Section
7.17 by Broadbase; provided that if such violation consists of a
communication by any such advisor which was unauthorized by Broadbase and
Broadbase terminates its relationship with such advisor and with such
advisor's employer, or terminates the employment of such employee,
immediately upon becoming aware of such communication, then from and after
such termination, such communication shall no longer be deemed to constitute
a material breach of this Agreement for purposes of Sections 9.2 and
11.1(a)(ii).
7.18 Conversion of Servicesoft Canada Common Stock. If
requested by Servicesoft, Broadbase shall enter into such amendments of this
Agreement as may be necessary to allow the holders of Servicesoft Canada
Common to defer exchanging their shares until February 15, 2001, if Canadian
counsel for both Servicesoft and Broadbase reach agreement on the structure
of any amendment required to the constituent documents of Servicesoft Canada;
provided that any such amendment and any such deferred exchange of shares of
Servicesoft Canada Common stock for Exchange Shares: (i) provides for the
issuance of Exchange Shares to the holders of Servicesoft Canada common stock
upon their exchange on the same basis as if they had exchanged at or before
the Effective Time of the Merger, including the retention of ten percent
(10%) of such Exchange Shares in escrow; (ii) would not involve any adverse
tax consequences for such holders or for Servicesoft, Servicesoft Canada or
Broadbase, (iii) provides that the Exchange Shares to be issued upon
conversion of the Servicesoft Canada Common Stock will be registered on the
Form S-4 (or other applicable form) to be filed with the SEC in connection
with the registration of the other Exchange Shares, (iv) would not require
the issuance or creation of any new class of preferred stock of Broadbase, or
other amendments to Broadbase's charter documents, (v) would not involve any
adverse accounting consequences for Broadbase, and (vi) be reasonably
practicable to implement.
8. CLOSING MATTERS
8.1 The Closing. Subject to termination of this Agreement as
provided in Article 11, the closing of the transactions provided for herein
(the "CLOSING") will take place at the offices of Fenwick & West LLP, Two
Palo Alto Square, Palo Alto, California 94306 no later than the third (3rd)
business day following satisfaction of waiver of all of the conditions to
Closing specified in Article 9 and Article 10 or, if all of the conditions to
the Closing have not been satisfied or waived by such date, such other place,
time and date as Servicesoft and Broadbase may mutually select (the "CLOSING
DATE"). Concurrently with the Closing or as soon thereafter as possible, the
Certificate of Merger and such officers' certificates or other documents as
may be required to effectuate the Merger will be filed in the office Delaware
Secretary of State.
8.2 Exchange of Certificates.
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(a) Procedures.
(i) U.S. Stock Corporation, transfer agent for
Broadbase common stock, will act as exchange agent (the "EXCHANGE AGENT") for
the Exchange Shares. On the Closing Date, Broadbase will deposit with the
Exchange Agent the Exchange Shares, to be held by the Exchange Agent until
released as provided herein. As soon as practicable after the Closing,
Broadbase shall cause to be mailed to each holder of record of a
certificate(s) for shares of Servicesoft capital stock (the "SERVICESOFT
CERTIFICATES"): (A) a letter of transmittal in form reasonably satisfactory
to Broadbase (which shall (1) include a schedule ("SCHEDULE 1") in which such
holder shall identify the number of shares of Servicesoft capital stock owned
by such holder, and (2) specify that delivery shall be effected, and risk of
loss and title to the Servicesoft Certificates shall pass, only upon delivery
of the Servicesoft Certificates to the Exchange Agent; and (B) instructions
for use in effecting the surrender of the Servicesoft Certificates in
exchange for certificates representing Exchange Shares.
As soon as practicable after the Effective Time, each
Servicesoft Stockholder (1) will surrender either (x) the Servicesoft
Certificates to Broadbase for cancellation or (y) an affidavit of lost (or
nonissued) certificate and a bond in form and amount reasonably satisfactory
to Broadbase or the Exchange Agent (a "BOND"), (2) will execute and deliver
an indemnification agreement pursuant to which each Servicesoft Stockholder
will agree to indemnify the Indemnified Persons (as defined in Section 12.2)
pursuant to the terms of Article 12 (the "INDEMNIFICATION LETTER"), (3) will
execute and deliver a representation letter (the "SERVICESOFT STOCKHOLDER
REPRESENTATION LETTER") containing (A) representations to the effect that
such Servicesoft Stockholder (i) has valid and marketable title to the shares
of Servicesoft Common Stock or Servicesoft Preferred Stock set forth opposite
such Servicesoft Stockholder's name in Schedule 1 to the letter of
transmittal, (ii) the legal right, power and all authorizations and approvals
required by applicable law to sell, transfer and deliver the shares to be
sold by such Servicesoft Stockholder, (iii) has not sold, assigned or
otherwise transferred to any third party any of his or her right, title or
interest in or to any of such shares of Servicesoft Common Stock or
Servicesoft Preferred Stock set forth on Schedule 1 to the letter of
transmittal, and that there exists no pledge, lien, security interest, claim
or encumbrance whatsoever on or relating to any of such shares of Servicesoft
Common Stock or Servicesoft Preferred Stock and (B) releasing and terminating
any registration rights, rights of accelerated vesting (except such rights as
are described in Item 2.1(a)(iii)(C) of the Servicesoft Disclosure Letter),
rights of first refusal, rights to any liquidation preference or redemption
rights to which such Servicesoft Stockholder may otherwise have been
entitled, and, if such Servicesoft Stockholder is a party to the 7th Amended
and Restated Registration Rights Agreement of Servicesoft dated January 13,
2000, or the 2nd Amended and Restated Shareholders' Agreement of Servicesoft
dated January 13, 2000 consenting to the termination of such agreement, (4)
if such Servicesoft Stockholder is an affiliate of Servicesoft, a letter
agreement signed by such Servicesoft Stockholder stating that such
Stockholder shall not sell, transfer, or otherwise dispose of, or agree to
sell, transfer or otherwise dispose of, any Exchange Shares for 90 days
following the Effective Time (the "SERVICESOFT AFFILIATE AGREEMENT").
Promptly following the Effective Time and receipt of Servicesoft Certificates
and/or the Bonds, the Indemnification Letter, the Servicesoft Stockholder
Representations, and if applicable, the Servicesoft Affiliate Agreement,
Broadbase will cause the Exchange Agent to issue to such surrendering holder
certificate(s) the number of Exchange Shares to which such holder is entitled
pursuant to Section 2.1, less the Escrow Shares to be deposited into escrow
on behalf of such holder pursuant to Section 2.2, and will distribute any
cash payable under Section 2.1(a)(vi); provided that if the information set
forth in the Servicesoft Stockholder Representations is inconsistent with the
information set forth in the Servicesoft Disclosure Letter, then Broadbase
shall be entitled to condition such issuance upon its confirmation, to its
reasonable satisfaction, that such difference will not have any material
adverse consequences to Broadbase or require the issuance of a greater number
of Exchange Shares than would have been required had such information been
consistent.
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(ii) At the Effective Time, the stock transfer books
of Servicesoft will be closed and no transfer of shares of Servicesoft
capital stock will thereafter be made. If, after the Effective Time,
Servicesoft Certificates are presented for any reason, they will be canceled
and exchanged as provided in this Section 8.2; provided, however, that
subject to applicable law any Servicesoft Certificate that is not properly
submitted to Broadbase for exchange and cancellation within three years after
the Effective Time shall no longer evidence ownership of or any right to
receive shares of Broadbase common stock and all rights of the holder of such
Servicesoft Certificate, with respect to the shares previously evidenced by
such Servicesoft Certificate, shall cease.
(iii) Subject to the provisions of Section 2.2 and
the Escrow Agreement with respect to the Escrow Shares, all Exchange Shares
delivered upon the surrender of Servicesoft Certificates in accordance with
the terms hereof will be deemed to have been delivered in full satisfaction
of all rights pertaining to the Servicesoft common stock evidenced by such
Servicesoft Certificates.
(b) Unexchanged Shares. Until Servicesoft Certificates
outstanding prior to the Merger (or affidavits of lost (or non-issued)
certificates and attendant Bonds) are surrendered pursuant to Section 8.2(a),
such Servicesoft Certificates will be deemed, for all purposes, to evidence
ownership of (i) the number of Exchange Shares into which the Servicesoft
common stock will have been converted (less the number of shares to be
withheld as Escrow Shares pursuant to Section 2.2) and (ii) if applicable,
cash in lieu of fractional shares.
(c) Payment of Dividends. No dividends or distributions
payable to holders of record of Broadbase common stock after the Effective
Time, or cash payable in lieu of fractional shares, will be paid to holders
of any unsurrendered Servicesoft Certificates until such holders surrender
their Servicesoft Certificates (or affidavits of lost (or non-issued)
certificates and attendant Bonds). Upon such surrender, subject to the
effect, if any, of applicable escheat and other laws, there will be delivered
to such tendering holder the amount of any dividends and distributions paid
with respect to Exchange Shares so withheld as of any date subsequent to the
Effective Time and prior to such date of delivery, less any non-cash
dividends and distributions paid with respect to the Escrow Shares (which
shall be held until the Escrow Shares are released as and to the extent
provided in the Escrow Agreement)
(d) Miscellaneous.
(i) If any certificates for Exchange Shares are to
be issued in a name other than that in which the Servicesoft Certificate
surrendered in exchange therefor is registered, the following shall be
conditions of such exchange: (A) the Servicesoft Certificate must be properly
endorsed and otherwise in proper form for transfer, and (B) the person
requesting such exchange shall either pay to the Exchange Agent any transfer
or other taxes required by reason of the issuance of certificates for such
Exchange Shares in a name other than that of the registered holder of the
Servicesoft Certificate surrendered or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable.
(ii) Notwithstanding anything in this Agreement to
the contrary, neither the Exchange Agent nor any party hereto shall be liable
to a Servicesoft Stockholder for any Exchange Shares or dividends thereon or
the cash payments otherwise due hereunder delivered to a public official
pursuant to applicable abandoned property, escheat or other similar laws
following the passage of time specified therein.
8.3 Dissenting Shares. Notwithstanding anything to the
contrary in this Agreement:
(a) No Dissenting Shares will be converted into or
represent a right to receive the consideration described in Section
2.1(a)(i). Instead, each holder of Dissenting Shares will be
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entitled only to such rights as are granted by Delaware Law for Dissenting
Shares. The Exchange Shares to which such dissenting Servicesoft Stockholders
would have been entitled had each assented to the merger, will have the
status of authorized and unissued shares of Broadbase.
(b) For each Servicesoft Stockholder who complies with
all requirements for obtaining stockholders' rights of appraisal with respect
to such shares, but subsequently loses (through the failure to perfect or
otherwise) or effectively withdraws such demand for such rights of appraisal
in accordance with Delaware Law, such holder's shares shall, as of the
Effective Time (or, if after the Effective Time, upon the occurrence of such
event) automatically be converted into and represent only the right to
receive the consideration described in Section 2.1 upon surrender of the
applicable certificate(s) as provided in Section 8.2.
(c) Servicesoft shall comply with the notice and other
procedural requirements set forth in Section 262 of Delaware Law with respect
to any Servicesoft Stockholder that properly demands stockholders' rights of
appraisal for such Servicesoft shares and that has not lost or effectively
withdrawn such demand for such rights of appraisal rights. Broadbase shall
have the opportunity to participate in all negotiations and proceedings with
respect to such demands. Servicesoft shall not, except with the prior
written consent of Broadbase, voluntarily make any payment with respect to
any demands for the exercise of appraisal rights or offer to settle or settle
any such demands.
8.4 Employee Plans. As of the Effective Time, Broadbase and
Servicesoft shall take such actions as are necessary to effect the mutually
acceptable employee benefit and compensation arrangements as determined
pursuant to Section 6.12.
9. CONDITIONS TO OBLIGATIONS OF SERVICESOFT
Servicesoft's obligations hereunder are subject to the
fulfillment or satisfaction, on and as of the Closing, of each of the
following conditions (any one or more of which may be waived by Servicesoft,
but only in a writing signed on behalf of Servicesoft by its Chief Executive
Officer or Chief Financial Officer:
9.1 Accuracy of Representations and Warranties. Each of the
representations and warranties of Broadbase and Newco set forth in Article 5
of this Agreement shall be true and correct in all material respects (or in
all respects, to the extent any such representation and warranty is already
qualified by materiality) on and as of the date hereof and on and as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date, except that to the
extent such representations and warranties address matters only as of a
particular date, such representations and warranties shall, to such extent,
be true and correct as of the date hereof and on and as of such particular
date as if made on and as of such particular date.
9.2 Covenants. Broadbase shall have performed and complied in
all material respects with all of its covenants contained in Article 7 on or
before the Closing Date, and Servicesoft shall have received a certificate to
such effect executed on behalf of Broadbase an officer of Broadbase.
9.3 Absence of Material Adverse Effect. No change,
circumstance or effect that is or is reasonably likely to be materially
adverse to the business, employees, assets (including intangible assets),
capitalization, financial condition, operations or results of operations of
Broadbase shall have occurred since the date of this Agreement and be
continuing.
9.4 Compliance with Law. There shall be no order, decree, or
ruling by any court or governmental agency or threat thereof, or any other
fact or circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
9.5 Government Consents. There shall have been obtained at or
prior to the Closing Date such permits or authorizations, and there shall
have been taken such other actions, as may be
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required to consummate the Merger by any regulatory authority having
jurisdiction over the parties and the actions herein proposed to be taken,
including but not limited to satisfaction of all requirements under
applicable federal and state securities laws.
9.6 Form S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order and the Prospectus/Proxy Statement shall on
the Closing not be subject to any proceedings commenced or threatened by the
SEC.
9.7 Requisite Approvals. The principal terms of this
Agreement, the Merger and the Certificate of Merger shall have been approved
and adopted by the written consent or vote of: (a) the Servicesoft
Stockholders, as required by applicable law and Servicesoft's certificate of
incorporation and by-laws, (b) Broadbase stockholders, and (c) Broadbase's
Board of Directors.
9.8 Opinion of Broadbase's Counsel. Servicesoft shall have
received from Fenwick & West LLP, counsel to Broadbase, an opinion letter in
substantially the form attached hereto as Exhibit F, dated as of the Closing
Date.
9.9 Hart-Scott-Rodino Compliance. All applicable waiting
periods under the HSR Act shall have expired or early termination shall have
been granted.
9.10 Election of Servicesoft Designees to the Board of Directors
of Broadbase. The Board of Directors of Broadbase shall have taken
appropriate action to elect Massood Zarabian and another person to be
designated by the mutual agreement of the parties hereto, to the Board of
Directors of Broadbase, effective upon the Effective Time and, if applicable,
one (1) additional person mutually acceptable to Broadbase and Servicesoft in
the event the Board of Directors of Broadbase shall consist of seven (7) or
more members, as contemplated by Section 7.11.
9.11 Absence of Litigation. No litigation or proceeding shall
be pending which could reasonably be expected to have the effect of enjoining
or preventing the consummation of any of the transactions provided for in
this Agreement. No litigation or proceeding shall be pending which could
reasonably be expected to have a Material Adverse Effect on Broadbase that
has not been previously disclosed to Servicesoft herein.
10. CONDITIONS TO OBLIGATIONS OF BROADBASE
The obligations of Broadbase hereunder are subject to the
fulfillment or satisfaction on, and as of the Closing, of each of the
following conditions (any one or more of which may be waived by Broadbase,
but only in a writing signed on behalf of Broadbase by its Chief Executive
Officer or Chief Financial Officer:
10.1 Accuracy of Representations and Warranties. Each of the
representations and warranties of Servicesoft set forth in Article 4 of this
Agreement shall be true and correct in all material respects (or in all
respects, to the extent any such representation and warranty is already
qualified by materiality) on and as of the date hereof and on and as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date, except that, to the
extent such representations and warranties address matters only as of a
particular date, such representations and warranties shall, to such extent,
be true and correct on and as of the date hereof and on and as of such
particular date as if made on and as of such particular date.
10.2 Covenants. Servicesoft shall have performed and complied
in all material respects with all of its covenants contained in Article 6 on
or before the Closing Date, and Broadbase shall have received a certificate
to such effect executed on behalf of Servicesoft by the President, Chief
Executive Officer or Chief Financial Officer of Servicesoft.
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10.3 Absence of Material Adverse Effect. No change,
circumstance or effect that is or is reasonably likely to be materially
adverse to the business, employees, assets (including intangible assets),
capitalization, financial condition, operations or results of operations of
Servicesoft shall have occurred since the date of this Agreement and be
continuing.
10.4 Compliance with Law. There shall be no order, decree, or
ruling by any court or governmental agency or threat thereof, or any other
fact or circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
10.5 Government Consents. There shall have been obtained at or
prior to the Closing Date such permits or authorizations and there shall have
been taken such other action, as may be required to consummate the Merger by
any regulatory authority having jurisdiction over the parties and the actions
herein proposed to be taken, including but not limited to satisfaction of all
requirements under applicable federal and state securities laws.
10.6 Form S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order and the Prospectus/Proxy Statement shall on
the Closing not be subject to any proceedings commenced or threatened by the
SEC.
10.7 Requisite Approvals. The principal terms of this
Agreement, the Merger and the Certificate of Merger shall have been approved
and adopted by the written consent or vote of: (a) the Servicesoft
Stockholders, (b) Servicesoft's Board of Directors, and (c) the Broadbase
stockholders.
10.8 Conversion of Preferred Stock. Subject to Section 7.18,
all shares of Servicesoft Canada Preferred Stock and Servicesoft Canada
Common Stock shall have been exchanged for shares of Servicesoft Series H
Preferred Stock and Servicesoft Common Stock, respectively, in accordance
with the terms of the organizational and other constituent documents of
Servicesoft Canada. All outstanding shares of Servicesoft Preferred Stock
(including shares of Servicesoft Series H Preferred Stock issued or issuable
pursuant to the condition stated in the preceding sentence but excluding
shares of Series X Preferred Stock and Series Y Preferred Stock) shall have
been converted into shares of Servicesoft Common Stock in accordance with the
terms of Servicesoft's certificate of incorporation.
10.9 Third-Party Consents; Assignments; Other Documents.
Broadbase shall have received: (a) duly executed copies of all material
third-party consents, approvals, assignments, waivers, authorizations or
other certificates set forth on Schedule 3 hereto; and (b) any other written
consents, assignments, waivers, authorizations or other certificates where,
in the case of this clause (b), the failure to have received the same would
have a Material Adverse Effect on Servicesoft.
10.10 Dissenting Shares. The number of Dissenting Shares shall
not constitute more than ten percent (10%) of the total number of shares of
Servicesoft common stock (on an as-if converted to Servicesoft common stock
basis) outstanding immediately prior to the Effective Time.
10.11 Resignations. Broadbase shall have received an executed
letter from each member of the Board of Directors and each officer of
Servicesoft immediately prior to the Effective Time of the Merger to the
effect that each such director and/or officer agrees to resign his or her
post as a director or officer of the Surviving Corporation effective as of
the Effective Time of the Merger.
10.12 Escrow Agreement. Broadbase shall have received the Escrow
Agreement, executed by Servicesoft and in substantially the form attached
hereto as Exhibit E, providing for the escrow of the Escrow Shares.
10.13 Opinion of Servicesoft's Counsel. Broadbase shall have
received from McDermott, Will & Emery, counsel to Servicesoft, an opinion
letter in substantially the form attached hereto as Exhibit G, dated as of
the Closing Date.
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10.14 Hart-Scott-Rodino Compliance. All applicable waiting
periods under the HSR Act shall have expired or early termination shall have
been granted.
10.15 Affiliates Letter. Servicesoft shall have delivered to
Broadbase the letter required by Section 6.16 naming all persons who are
"affiliates" of Servicesoft for purposes of Rule 145 under the Securities Act.
10.16 Absence of Litigation. No litigation or proceeding shall
be pending which could reasonably be expected to have the effect of enjoining
or preventing the consummation of any of the transactions provided for in
this Agreement. No litigation or proceeding shall be pending which could
reasonably be expected to have a Material Adverse Effect on Servicesoft that
has not been previously disclosed to Broadbase herein.
10.17 Section 280G Approval. Any agreement, plan or
arrangement to which Servicesoft or any Subsidiary is a party that would be
reasonably likely to give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G of the Code ("SECTION 280G") shall have
been approved by the holders of such percentage of the outstanding
Servicesoft Preferred Stock and Servicesoft Common Stock (excluding shares
held by the person that is or would be the beneficiary or recipient of such
payment) as may be required in order that Section 280G not apply to limit the
deductibility of such payment, and any "disqualified individuals" as defined
in Section 280G shall have agreed to forfeit any payments that would
otherwise be non-deductible if shareholder approval is not so obtained.
11. TERMINATION OF AGREEMENT
11.1 Right to Terminate.
(a) This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before or after
approval by the Servicesoft Stockholders:
(i) by the mutual written consent of Servicesoft
and Broadbase;
(ii) by either Servicesoft or Broadbase, if such
party (including its stockholders) is not in material breach of any
representation, warranty, covenant or agreement contained in this Agreement,
and such other party is in material breach of any representation, warranty,
covenant or agreement contained in this Agreement, or if any representation
of such other party will have become untrue, in either case to an extent that
would cause the conditions set forth in Article 9 (for Servicesoft) or
Article 10 (for Broadbase) not to be satisfied and such breaching party fails
to cure such material breach within 15 days of written notice of such
material breach from the non-breaching party (except that no cure period will
be provided for a breach which by its nature cannot be cured);
(iii) by either Servicesoft or Broadbase, if the
Merger shall not have been consummated by February 28, 2001 for any reason;
provided, however, that the right to terminate this Agreement under this
Section 11(a)(iii) shall not be available to any party whose action or
failure to act has been a principal cause of or resulted in the failure of
the Merger to occur on or before such date and such action or failure to act
constitutes a breach of this Agreement;
(iv) by either Servicesoft or Broadbase, if there is
a final nonappealable order of a federal or state court in effect preventing
consummation of the Merger, or if any statute, rule, regulation or order is
enacted, promulgated or issued or deemed applicable to the Merger by any
governmental body that would make consummation of the Merger illegal;
(v) by either Servicesoft or Broadbase if the
required approval of the Servicesoft Stockholders contemplated by this
Agreement shall not have been obtained by reason of the failure to obtain the
required vote by written consent or at a meeting of the Servicesoft
Stockholders duly convened therefore or at any adjournment thereof; provided,
however, that the right to terminate this
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Agreement under this 11.1(a)(v) shall not be available to Servicesoft where
the failure to obtain the Servicesoft Stockholder approval shall have been
caused by the action or failure to act of Servicesoft (or an officer or
director of Servicesoft) and such action or failure to act constitutes a
material breach of this Agreement;
(vi) by either Servicesoft or Broadbase, if the required
approval of Broadbase Stockholders contemplated by this Agreement shall not
have been obtained by reason of the failure to obtain the required votes at a
meeting of Broadbase stockholders duly convened therefore or at any
adjournment thereof; provided, however, that the right to terminate this
Agreement under this Section 11.1(a)(vi) shall not be available to Broadbase
where the failure to obtain the Broadbase stockholder approvals shall have
been caused by the action or failure to act of Broadbase and such action or
failure to act constitutes a material breach by Broadbase of this Agreement;
11.2 Termination Procedures. If either party wishes to
terminate this Agreement pursuant to Section 11.1, such party shall deliver
to the other party a written notice stating that such party is terminating
this Agreement and setting forth a brief description of the basis of such
termination. Termination of this Agreement will be effective upon the
delivery of such notice.
11.3 Continuing Obligations. In the event of the termination of
this Agreement as provided in Section 11.1, this Agreement shall be of no
further force or effect, except (i) as set forth in Section 7.12(b), this
Section 11.3, Section 11.4 and Article 12, each of which shall survive the
termination of this Agreement, and (ii) nothing herein shall relieve any
party from liability for any willful breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
pursuant to any agreement to maintain the confidentiality of information
regarding the other party, all of which obligations shall survive termination
of this Agreement in accordance with their terms.
11.4 Termination Fee.
(a) In the event that this Agreement is terminated (x) by
Broadbase under Section 11.1(a)(ii) or (y) by either Broadbase or Servicesoft
under Section 11.1(a)(v), Servicesoft shall promptly, but in no event later
than two days after the date of such termination, pay Broadbase a fee equal
to $12.5 million in immediately available funds (the "SERVICESOFT TERMINATION
FEE"); provided, however, that in the case of termination pursuant to Section
11.1(a)(ii), such payment shall be made only if (1) following the date of
this Agreement and prior to the termination of this Agreement, a person has
publicly announced an Acquisition Proposal and (2) within nine months
following the termination of this Agreement, either an Acquisition
Transaction is consummated, or Servicesoft enters into an agreement providing
for an Acquisition Transaction, in which case such termination fee shall be
paid within two days of the consummation of such Acquisition Transaction.
(b) In the event that this Agreement is terminated by
Servicesoft under Section 11.1(a)(ii) or by either Broadbase or Servicesoft
under Section 11.1(a)(vi), Broadbase shall promptly, but in no event later
than two days after the date of such termination, pay Servicesoft a fee equal
to $12.5 million in immediately available funds (the "BROADBASE TERMINATION
FEE"); provided, however, that in the case of termination pursuant to Section
11.1(a)(ii), such payment shall be made only if (1) following the date of
this Agreement and prior to the termination of this Agreement, a person has
publicly announced an Acquisition Proposal and (2) within nine months
following the termination of this Agreement, either an Acquisition
Transaction is consummated, or Broadbase enters into an agreement providing
for an Acquisition Transaction. If any principal or interest under any of
the Loans contemplated by Section 7.12 remain outstanding, then the Broadbase
Termination Fee payable by Broadbase pursuant to this Section 11.4(b) shall
be reduced by the amount of the outstanding Loans owed by Servicesoft. In
addition, in the event that (1) this Agreement is terminated by Broadbase or
Servicesoft under Section 11.1(a)(vi) and (2) either (x) the Form S-4 and the
Prospectus/Proxy Statement did not include, pursuant to Section 7.5 of this
Agreement, a statement to the effect that Broadbase's
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Board of Directors has recommended that Broadbase Stockholders vote in favor
of the Broadbase Stockholder Approvals or (y) the Board of Directors of
Broadbase (or a committee thereof) shall have withdrawn, amended or modified,
in a manner adverse to Servicesoft, the recommendation of the Board of
Directors of Broadbase that the stockholders of Broadbase vote in favor of
the Broadbase Stockholder Proposals, then the outstanding principal of, and
accrued interest on, the Loans shall be immediately deemed to have been
repaid in full and all remaining amounts available with respect to the Loans
shall be paid to Servicesoft at such time as the payment of the Broadbase
termination fee, without any recourse to, or further obligation on the part
of, Servicesoft.
(c) Each party hereto acknowledges that the agreements
contained in this Section 11.4 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, the other
party would not enter into this Agreement. Accordingly, if any party hereto
fails to pay in a timely manner the amounts due pursuant to this Section
11.4, and, in order to obtain such payment, the other party makes a claim
that results in a judgment against the breaching party for the amounts set
forth in this Section 11.4, the breaching party shall pay to the other party
such other party's reasonable costs and expenses (including reasonable
attorneys' fees and expenses) in connection with such suit, together with
interest on the amounts set forth in this Section 11.4 at the prime rate of
The Chase Manhattan Bank in effect on the date such payment was required to
be made. Absent a willful breach of this Agreement, any Servicesoft
Termination Fee or Broadbase Termination Fee paid pursuant to this Section
11.4 shall be the sole liability of the paying party.
12. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES,
CONTINUING COVENANTS
12.1 Survival of Representations. All representations,
warranties, covenants and agreements of Broadbase and Servicesoft contained
in this Agreement will remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the parties to this
Agreement, until the earlier of the termination of this Agreement and the
expiration of the Escrow Period, whereupon such representations, warranties,
covenants and agreements will expire.
12.2 Agreement to Indemnify. Subject to the limitations set
forth in this Article 12, the Servicesoft Stockholders will severally
indemnify and hold harmless Broadbase and its officers, directors, agents and
employees, and each person, if any, who controls or may control Broadbase
within the meaning of the Securities Act (hereinafter referred to
individually as an "INDEMNIFIED PERSON" and collectively as "INDEMNIFIED
PERSONS") from and against any and all claims, demands, actions, causes of
actions, losses, costs, damages, liabilities and expenses, including without
limitation, reasonable legal fees and costs (hereinafter referred to as
"DAMAGES") directly or indirectly arising out of or resulting from:
(a) any misrepresentation or breach of or default in
connection with any of the representations, warranties, agreements and
covenants given or made by Servicesoft in this Agreement or any certificate,
document or instrument delivered by or on behalf of Servicesoft pursuant
hereto;
(b) any Excess Expenses; or
(c) any failure of each Servicesoft Stockholder to have
good, valid and marketable title to the issued and outstanding Servicesoft
Capital Stock identified in Schedule 1 to such Servicesoft Stockholder's
Letter of Transmittal, free and clear of all liens, claims, pledges, options,
adverse claims, assessments or charges of any nature whatsoever ("OWNERSHIP
LOSSES");
provided, however, that for purposes of the foregoing clause (c), the
Indemnified Person may only seek and recover Damages from the Servicesoft
Stockholder who failed to have good, valid and marketable
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title to such shares of Servicesoft Capital Stock free and clear of all
liens, claims, pledges, options, adverse claims, assessments or charges.
12.3 Limitations on Liability; Exceptions.
(a) Limitations on Liability. Subject to Section
12.3(c), the Escrow Shares and any other assets deposited in escrow pursuant
to the Escrow Agreement shall be the Indemnified Persons' sole recourse
against the Servicesoft Stockholders under this Agreement, and no claim for
Damages shall first be made under Section 12.2 after expiration of the Escrow
Period. Except as set forth in Section 12.3(c), the remedies set forth in
this Article 12 shall be the exclusive remedies of Broadbase and the other
Indemnified Persons against any Servicesoft Stockholder under any theory or
liability.
(b) Threshold. Except for indemnification with respect
to Excess Expenses, the indemnification provided for in this Article 12 shall
not apply unless and until the aggregate Damages for which one or more
Indemnified Persons seeks indemnification exceeds $1,000,000, in which event
the indemnification provided for in this Article 12 will include the
aggregate of all Damages; provided, however, that this Section 12.3(b) shall
not apply to liability or indemnification obligations of the Servicesoft
Stockholders with respect to any matter or claim described in Section 12.2(b).
(c) Exceptions to Limitations on Liability. None of the
limitations set forth in Sections 12.3(a) or 12.3(b) shall in any manner
limit the liability or indemnification obligations of the Servicesoft
Stockholders with respect to: (i) intentional fraud; or (ii) any Ownership
Losses. Notwithstanding the foregoing, in no event shall any Servicesoft
Stockholder be liable for any amounts in excess of the value of the aggregate
consideration received by such Servicesoft Stockholder in connection with the
Merger (determined as set forth in Section 4.5 of the Escrow Agreement);
provided, however, that such limitation shall not apply to Damages resulting
from intentional fraud by such Servicesoft Stockholder. In the event of
intentional fraud, the Indemnified Persons agree that they shall seek
indemnification against the Escrow Shares pro rata pursuant to the terms of
the Escrow Agreement then available under the Escrow Agreement and shall only
be entitled to receive indemnification for such claims directly from the
Servicesoft Stockholders if all of the Escrow Shares have been released
pursuant to the terms of the Escrow Agreement.
12.4 Survival of Claims. Notwithstanding anything herein to the
contrary, if, prior to the expiration of the Escrow Period, an Indemnified
Person makes a claim for indemnification under either this Agreement or the
Escrow Agreement with respect to a misrepresentation or breach of such
representation, warranty or covenant, then the Indemnified Person's rights to
indemnification under this Article 12 for such claim shall survive the
expiration of the Escrow Period. In addition, notwithstanding anything herein
to the contrary, the obligation of each Servicesoft Stockholder to indemnify
the Indemnified Persons for any Damages resulting directly or indirectly from
the failure of such Servicesoft Stockholders to have good, valid and
marketable title to the issued and outstanding Servicesoft Capital Stock
identified in Schedule 1 to such Servicesoft Stockholder's Letter of
Transmittal, free and clear of all liens, claims, pledges, options, adverse
claims, assessments or charges of any nature whatsoever shall continue in
effect for the duration of the applicable statute of limitations.
12.5 No Indemnity for Corporate Agents. Each of the
indemnifying Servicesoft Stockholders agrees that such Servicesoft
Stockholder will not make any claim for indemnification against Servicesoft
by reason of the fact that such indemnifying stockholder was a director,
officer, employee or agent of any such entity or was serving at the request
of any such entity as a partner, trustee, director, officer, employee or
agent of another entity (whether such claims is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expense or
otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement or otherwise) with respect to any action, suit,
proceeding, complaint, claim or demand brought by Broadbase against the
indemnifying stockholder
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pursuant to Section 12.2 or otherwise in its capacity as a Servicesoft
Stockholder (whether such action, suit, proceeding, complaint, claim or
demand is pursuant to this Agreement, applicable law or otherwise).
12.6 Servicesoft Stockholders' Representative.
(a) Authority. The Servicesoft Stockholders, by their
approval of the Merger and/or their tender pursuant to Section 8.2 of
Servicesoft Certificates, will be conclusively deemed to have consented to,
approved and agreed to be personally bound by: (a) the indemnification
provisions of Article 12, (b) the Escrow Agreement, (c) the appointment of
Mark Skapinker as the Representative of the Servicesoft Stockholders under
the Escrow Agreement and as the attorney-in-fact and agent for and on behalf
of the Servicesoft Stockholders (including their successors and assigns) as
provided in the Escrow Agreement and (d) the taking by the Representative of
any and all actions and the making of any decisions required or permitted to
be taken by the Representative under the Escrow Agreement, including, without
limitation, the exercise of the power to: (i) authorize delivery to
Broadbase of Escrow Shares in satisfaction of indemnity claims by Broadbase
or any other Indemnified Person (as defined herein) pursuant to Article 12
and/or the Escrow Agreement; (ii) agree to, negotiate, enter into settlements
and compromises of, demand arbitration of, and comply with orders of courts
and awards of arbitrators with respect to, such claims; (iii) arbitrate,
resolve, settle or compromise any claim for indemnity made pursuant to
Article 12; (iv) waive any right of any or all of the Servicesoft
Stockholders following the Merger with respect to matters set forth in this
Agreement, the Escrow Agreement or any other agreement contemplated by this
Agreement; (v) give and receive all notices required to be given under this
Agreement and the Escrow Agreement; and (vi) take all actions necessary in
the sole judgment of the Representative for the accomplishment of the
foregoing. The Representative will have unlimited authority and power to act
on behalf of the Servicesoft Stockholders with respect to the Escrow
Agreement and the disposition, settlement or other handling of all claims
governed by the Escrow Agreement, and all rights or obligations arising under
the Escrow Agreement so long as all Servicesoft Stockholders are treated in
the same manner. The Representative is authorized to take any actions deemed
by him to be appropriate or reasonably necessary to carry out the provisions
of Article 12 hereof. In addition, the Representative is authorized to
accept service of process upon the Servicesoft Stockholders. All decisions
and actions of the Representative in connection with this Agreement and the
Escrow Agreement shall be binding and conclusive upon the Servicesoft
Stockholders, and Broadbase, the Surviving Corporation and the Escrow Agent
will be entitled to rely on any action or decision of the Representative.
The Representative will not be a trustee for any Servicesoft Stockholder or
have any fiduciary duty to any Servicesoft Stockholder, and in performing the
functions specified in this Agreement and the Escrow Agreement, the
Representative will not be liable to any Servicesoft Stockholders for any act
or omission the Representative made in good faith and in the exercise of
reasonable judgment. As provided in the Escrow Agreement, any out-of-pocket
costs and expenses reasonably incurred by the Representative in connection
with actions taken pursuant to the terms of the Escrow Agreement, at the
Representative's option, either (i) will be paid by the Servicesoft
Stockholders to the Representative or (ii) if shares are available for
distribution to the Servicesoft Stockholders pursuant to the Escrow
Agreement, at the request of the Representative, a portion of those shares
will be sold by the Escrow Agent and the proceeds paid to or at the direction
of the Representative, in either case, pro rata in proportion to the
Servicesoft Stockholders' respective percentage interests in the Escrow
Shares.
(b) Standard of Conduct. Neither the Representative nor
any of his partners, members, directors, officers, employees or agents shall
be liable to any of the Servicesoft Stockholders for any error of judgment,
act done or omitted by them, or mistake of fact or law in connection with his
services pursuant to Article 12, unless caused by his own gross negligence or
willful misconduct. In taking any action or refraining from taking any
action whatsoever the Representative shall be protected in relying upon any
notice, paper or other document reasonably believed by him to be genuine, or
upon any
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evidence reasonably deemed by him to be sufficient. The Representative shall
not be required to take any action which is contrary to this Agreement, the
Escrow Agreement or applicable law. The Representative may consult with
counsel in connection with his duties and shall be fully protected in any act
taken, suffered or permitted by them in good faith in accordance with the
advice of counsel. In connection with their services under Article 12, the
Representative shall not be responsible for determining or verifying the
authority of any person acting or purporting to act on behalf of any party to
this Agreement.
(c) Indemnification. Each Servicesoft Stockholder agrees
to indemnify the Representative, ratably in accordance with his or her pro
rata share of the Escrow Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against the Representative in any way
relating to or arising out of this Agreement or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or the enforcement of any of the terms hereof or thereof or of any
such other documents; provided, however, that no Servicesoft Stockholder
shall be liable for any of the foregoing to the extent they arise from the
Representative's gross negligence or willful misconduct. The Representative
shall be fully justified in refusing to take or to continue to take any
action hereunder unless he shall first be indemnified to his reasonable
satisfaction by the Servicesoft Stockholders against any and all liability
and expense which may be incurred by him by reason of taking or continuing to
take any such action.
(d) Resignation or Removal of the Representative.
Subject to the appointment and acceptance of a successor Representative as
provided below, the Representative may (i) resign at any time thirty (30)
days subsequent to giving notice thereof to the Servicesoft Stockholders, and
(ii) be removed at any time with or without cause by action of the
Servicesoft Stockholders who represented a majority of the rights to the
Escrow Shares. Upon any such resignation or removal, holders of a majority
of the Escrow Shares may appoint a successor Representative, which successor
shall be reasonably acceptable to Broadbase. If no successor Representative
shall have been appointed by the Servicesoft Stockholders and accepted such
appointment within twenty (20) days after the retiring Representative's
giving of notice of resignation or the Servicesoft Stockholders' removal of
the Representative, then the retiring or removed Representative may, on
behalf of the Servicesoft Stockholders, appoint a successor, which shall be
reasonably acceptable to Broadbase. Upon the acceptance of any appointment
as the Representative hereunder, such successor Representative shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Representative, and the
retiring or removed Representative shall be discharged from his duties and
obligations hereunder. After any retiring Representative's resignation or
removal hereunder as the Representative, the provisions of Article 12 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Representative.
(e) Representative as Servicesoft Stockholder. The
Representative, to the extent he is or was a Servicesoft Stockholder, shall
have the same rights and powers under this Agreement as any other Servicesoft
Stockholder and may exercise the same as though he were not serving as the
Representative, and the term "Servicesoft Stockholder" shall include the
Representative in his capacity as such.
13. MISCELLANEOUS
13.1 Entire Agreement. The Letter Agreement between Servicesoft
and Broadbase dated August 17, 2000 with respect to non-disclosure of
confidential information, this Agreement and the exhibits hereto constitute
the entire understanding and agreement of the parties hereto with respect to
the subject matter hereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the parties with respect to the
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subject matter hereof. The express terms hereof control and supersede any
course of performance or usage of trade inconsistent with any of the terms
hereof.
13.2 Assignment; Binding Upon Successors and Assigns. Neither
party hereto may assign any of its rights or obligations hereunder without
the prior written consent of the other party hereto. This Agreement will be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
13.3 No Third Party Beneficiaries. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner, employee or any party hereto or
any other Person unless specifically provided otherwise herein, and, except
as so provided, all provisions hereof will be personal solely between the
parties to this Agreement.
13.4 No Joint Venture. Nothing contained in this Agreement will
be deemed or construed as creating a joint venture or partnership between the
parties hereto. No party is by virtue of this Agreement authorized as an
agent, employee or legal representative of any other party. No party will
have the power to control the activities and operations of any other, and the
parties' status is, and at all times, will continue to be, that of
independent contractors with respect to each other. No party will have any
power or authority to bind or commit any other. No party will hold itself
out as having any authority or relationship in contravention of this Section.
13.5 Construction of Agreement. This Agreement has been
negotiated by the respective parties hereto and their attorneys and have been
reviewed by each party hereto. Accordingly, no ambiguity in the language
hereof will be construed for or against either party.
13.6 Severability. If any provision of this Agreement, or the
application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provision.
13.7 Section Headings. A reference to an Article, Section,
Exhibit or Schedule will mean an Article or Section in, or an Exhibit or
Schedule to, this Agreement, unless otherwise explicitly set forth. The
titles and headings in this Agreement are for reference purposes only and
will not in any manner limit the construction of this Agreement. For the
purposes of such construction, this Agreement will be considered as a whole.
13.8 Amendment, Extension and Waivers. At any time prior to the
Effective Time, Broadbase, Newco and Servicesoft may, to the extent legally
allowed: (a) extend the time for performance of any of the obligations of
the other party; (b) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant thereto; and (c) waive compliance with any of the agreements,
covenants or conditions for the benefit of such party contained herein. Any
term or provision of this Agreement may be amended. Any agreement to any
amendment, extension or waiver will be valid only if set forth in writing and
signed by the party to be bound. The waiver by a party of any breach hereof
or default in the performance hereof will not be deemed to constitute a
waiver of any other default or any succeeding breach or default. The failure
of any party to enforce any of the provisions hereof will not be construed to
be a waiver of the right of such party thereafter to enforce such
provisions. The Agreement may be amended by the parties hereto at any time
before or after approval of the Servicesoft Stockholders, but, after such
approval, no amendment will be made which by applicable law requires the
further approval of the Servicesoft Stockholders without obtaining such
further approval.
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13.9 Governing Law. The validity of this Agreement the
construction of its terms, and the interpretation and enforcement of the
rights and duties of the parties of this Agreement will be exclusively
governed by and construed in accordance with the internal laws of the State
of Delaware, as applied to agreements entered into solely between residents
of and to be performed entirely in the State of California, without reference
to that body of law relating to conflicts of law or choice of law.
13.10 Dispute Resolution. Any dispute hereunder ("DISPUTE")
shall be settled by arbitration, to be held in Wilmington, Delaware, and,
except as herein specifically stated, in accordance with the commercial
arbitration rules of the American Arbitration Association ("AAA RULES") then
in effect. However, in all events, these arbitration provisions shall govern
over any conflicting rules which may now or hereafter be contained in the AAA
Rules. Any judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction over the subject matter thereof. The
arbitrator shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve a
Dispute.
(a) Compensation of Arbitrator. Any such arbitration
will be conducted before a single arbitrator who will be compensated for his
or her services at a rate to be determined by the parties or by the American
Arbitration Association, but based upon reasonable hourly or daily consulting
rates for the arbitrator in the event the parties are not able to agree upon
his or her rate of compensation.
(b) Selection of Arbitrator. The American Arbitration
Association will have the authority to select an arbitrator from a list of
arbitrators who are lawyers familiar with Delaware contract law; provided,
however, that such lawyers cannot work for a firm then performing services
for either party, that each party will have the opportunity to make such
reasonable objection to any of the arbitrators listed as such party may wish
and that the American Arbitration Association will select the arbitrator from
the list of arbitrators as to whom neither party makes any such objection.
In the event that the foregoing procedure is not followed, each party will
choose one person from the list of arbitrators provided by the American
Arbitration Association (provided that such person does not have a conflict
of interest), and the two persons so selected will select from the list
provided by the American Arbitration Association the person who will act as
the arbitrator.
(c) Payment of Costs. Broadbase and Servicesoft, or
Broadbase and the Servicesoft Stockholders after the Closing, will bear the
expense of deposits and advances required by the arbitrator in equal
proportions, but either party may advance such amounts, subject to recovery
as an addition or offset to any award. The arbitrator will award to the
prevailing party, as determined by the arbitrator, all costs, fees and
expenses related to the arbitration, including reasonable fees and expenses
of attorneys, accountants and other professionals incurred by the prevailing
party.
(d) Burden of Proof. For any Dispute submitted to
arbitration, the burden of proof will be as it would be if the claim were
litigated in a judicial proceeding.
(e) Award. Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator will render findings of fact and
conclusions of law and a written opinion setting forth the basis and reasons
for any decision reached and will deliver such documents to each party to
this Agreement along with a signed copy of the award.
(f) Terms of Arbitration. The arbitrator chosen in
accordance with these provisions will not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions
of this Agreement.
(g) Exclusive Remedy. Except as specifically otherwise
provided in this Agreement, arbitration will be the sole and exclusive remedy
of the parties for any Dispute arising out of this Agreement.
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13.11 Other Remedies. Except as otherwise provided in Section
12.3 or elsewhere herein, any and all remedies herein expressly conferred
upon a party will be deemed cumulative with and not exclusive of any other
remedy conferred hereby or by law on such party, and the exercise of any one
remedy will not preclude the exercise of any other.
13.12 Notices. Any notice or other communication required or
permitted to be given under this Agreement will be in writing, will be
delivered personally or by mail or express delivery, postage prepaid, and
will be deemed given upon actual delivery or, if mailed by registered or
certified mail, on the third business day following deposit in the mails,
addressed as follows:
If to Broadbase: Broadbase Software, Inc.
172 Constitution Drive
Menlo Park, CA 94025
Attention: Chuck Bay
Phone: (650) 614-8300
Fax: (650) 614-8301
with a copy to: Fenwick & West LLP
275 Battery Street, Suite 1500
San Francisco, CA 94111
Attention: David K. Michaels
Phone: (415) 875-2300
Fax: (415) 281-1350
If to Servicesoft: Servicesoft, Inc.
Two Apple Hill Drive
Natick, MA 01760
Attention: Massood Zarrabian
Phone: (508) 653-4000
Fax: (508) 810-3322
with a copy to: McDermott, Will & Emery
28 State Street
Boston, MA 12109-1775
Attention: John J. Egan III, P.C.
Phone: (617) 535-4000
Fax: (617) 535-3800
or to such other address as the party in question may have
furnished to the other party by written notice given in accordance with this
Section 13.12.
13.13 Time is of the Essence. The parties hereto acknowledge and
agree that time is of the essence in connection with the execution, delivery
and performance of this Agreement.
13.14 Effect of Disclosure Letters. Notwithstanding anything to
the contrary contained in this Agreement or in either of the Servicesoft
Disclosure Letter or the Broadbase Disclosure Letter (the "DISCLOSURE
LETTERS"), any information disclosed in any part of either of such Disclosure
Letters shall be deemed to be disclosed in any other part of such Disclosure
Letter to which such information is relevant, to the extent it is reasonably
apparent from the information disclosed that it is relevant to such other
part.
13.15 Counterparts. This Agreement may be executed in
counterparts, each of which will be an original as regards any party whose
name appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
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counterparts hereof, individually or taken together, bear the signatures of
both parties reflected hereon as signatories.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BROADBASE SOFTWARE, INC.
By:/s/ CHUCK BAY
---------------------------------
Name: Chuck Bay
Title: President and Chief Executive
Officer
SERVICESOFT, INC.
By:/s/ MASSOOD ZARRABIAN
-----------------------------------
Name: Massood Zarrabian
Title: President and Chief Executive
Officer
SOLDIER ACQUISITION CORP.
By:/s/ ERIC WILLGOHS
------------------------------------
Name: Eric Willgohs
Title: President and Chief Executive
Officer
[SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER]
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EXHIBITS AND SCHEDULES
Exhibits
Exhibit A: Form of Certificate of Merger
Exhibit B: Form of Voting Agreement
Exhibit C: Form of Employment and Non-Competition Agreement
Exhibit D: Form of Convertible Promissory Note
Exhibit E: Form of Escrow Agreement
Exhibit F: Form of Opinion of Counsel to Broadbase and Newco
Exhibit G: Form of Opinion of Counsel to Servicesoft
Schedules
Schedule 1: Certain Servicesoft and Broadbase Stockholders
Schedule 2: Certain Servicesoft Employees
Schedule 3: Third Party Consents
