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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 16, 1999
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Date of report (date of earliest event reported)
INTRANET SOLUTIONS, INC.
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(Exact name of registrant as specified in its charter)
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Minnesota 0-19817 41-1652566
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(State of Incorporation) (Commission file number) (I.R.S. Employer Indentification No.)
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8091 Wallace Drive, Eden Prairie, Minnesota 55344
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(Address of principal executive offices) (Zip Code)
Telephone Number: (612) 903-2000
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(Registrant's telephone number, including area code)
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Item 5. Other events
On September 16, 1999, IntraNet Solutions, Inc. ("IntraNet
Solutions") signed an Agreement and Plan of Merger (the
"Agreement") with InfoAccess, Inc. ("InfoAccess"), a privately held
company headquartered in Bellevue, Washington.
The acquisition, which will be accounted for as a pooling of
interests, will be completed through the merger of IntraNet
Solutions (Washington), Inc. ("Merger Sub"), a wholly owned
subsidiary of IntraNet Solutions, into InfoAccess. In connection
with the merger, IntraNet Solutions will issue to the shareholders
of InfoAccess unregistered shares of IntraNet Solutions' common
stock, valued at approximately $14.93 million, based on the closing
price for IntraNet Solutions common stock on the Nasdaq Stock
Market on September 16, 1999, and will convert existing InfoAccess
employee stock options into IntraNet Solutions stock options. After
the closing, InfoAccess will be a wholly owned subsidiary of
IntraNet Solutions.
The closing of this acquisition is subject to approval by the
InfoAccess shareholders and the satisfaction of other closing
conditions.
Item 7. Financial statements and exhibits
(c) Exhibits
2 Agreement and Plan of Merger among IntraNet Solutions, Inc.,
IntraNet Solutions (Washington), Inc., InfoAccess, Inc., and
certain Significant Shareholders of InfoAccess, Inc., dated as
of September 16, 1999. The Registrant hereby agrees to furnish
supplementally a copy of any omitted schedule or exhibit to
the Commission upon request.
99 News Release dated September 17, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
Date: September 20, 1999
INTRANET SOLUTIONS, INC.
(Registrant)
By /s/Gregg A. Waldon
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Gregg A. Waldon
Chief Financial Officer,
Treasurer and Secretary
(Principal financial and accounting
officer and duly authorized signatory
on behalf of the registrant)
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INDEX TO EXHIBITS
Exhibit No.
2 Agreement and Plan of Merger among IntraNet Solutions, Inc.,
IntraNet Solutions (Washington), Inc., InfoAccess, Inc., and
certain Significant Shareholders of InfoAccess, Inc., dated as
of September 16, 1999. The Registrant hereby agrees to furnish
supplementally a copy of any omitted schedule or exhibit to
the Commission upon request.
99 News Release dated September 17, 1999.
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EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AMONG
INTRANET SOLUTIONS, INC.,
INTRANET SOLUTIONS
(WASHINGTON), INC.
INFOACCESS, INC.,
AND
CERTAIN SIGNIFICANT SHAREHOLDERS
DATED AS OF SEPTEMBER 16, 1999
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TABLE OF CONTENTS
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ARTICLE I THE MERGER; EFFECTIVE TIME; CLOSING....................................................................1
1.1 THE MERGER.............................................................................................1
1.2 EFFECTIVE TIME.........................................................................................2
1.3 CLOSING................................................................................................2
ARTICLE II CHARTER AND BY-LAWS OF THE SURVIVING CORPORATION......................................................2
2.1 THE CHARTER............................................................................................2
2.2 THE BY-LAWS............................................................................................2
ARTICLE III DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION..................................................2
3.1 DIRECTORS..............................................................................................2
3.2 OFFICERS...............................................................................................3
ARTICLE IV MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF INFOACCESS AND MERGER SUB SHARES IN THE
MERGER; HOLDBACK..................................................................................................3
4.1 MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF INFOACCESS SHARES IN MERGER........................3
(a) Merger Consideration...................................................................................3
(b) Cancellation of InfoAccess Shares......................................................................3
(c) Conversion of Merger Sub Shares........................................................................3
(d) Stock Options and Warrants.............................................................................3
4.2 PAYMENT FOR INFOACCESS SHARES IN THE MERGER............................................................4
(a) Exchange Agent.........................................................................................4
(b) Submission of Certificates.............................................................................4
(c) Issuance of Certificates...............................................................................4
(d) No Registration of Transfers...........................................................................4
(e) Reversion of Merger Consideration......................................................................4
(f) Dividends, Interest, or Other Distributions............................................................5
(g) Custodian Account......................................................................................5
4.3 ADJUSTMENTS............................................................................................5
4.4 FRACTIONAL SHARES......................................................................................5
4.5 HOLDBACK OF INTRANET SOLUTIONS COMMON SHARES...........................................................5
(a) Establishment of Indemnity Holdback Fund...............................................................5
(b) Distributions and Voting...............................................................................6
4.6 DISSENTING SHARES......................................................................................6
4.7 LOST, STOLEN, OR DESTROYED CERTIFICATES................................................................7
4.8 ACCOUNTING CONSEQUENCES................................................................................7
ARTICLE V Representations and Warranties.........................................................................7
5.1 REPRESENTATIONS AND WARRANTIES OF INFOACCESS...........................................................7
(a) Corporate Organization.................................................................................7
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(b) Qualification to do Business...........................................................................7
(c) Corporate Power........................................................................................7
(d) Corporate Authority....................................................................................7
(e) Capitalization.........................................................................................8
(f) Consents and Approvals; No Violation...................................................................8
(g) Actions, Suits, Proceedings............................................................................9
(h) Compliance with Applicable Laws and Other Instruments..................................................9
(i) Environmental and Export Laws..........................................................................9
(j) Employees; Consultants................................................................................10
(k) Employee Plans........................................................................................10
(l) Labor Matters.........................................................................................10
(m) Financial Statements..................................................................................11
(n) Tax Returns and Audits................................................................................11
(o) Changes, Dividends, etc...............................................................................12
(p) Title to the Assets...................................................................................12
(q) Receivables...........................................................................................12
(r) Condition of Assets...................................................................................13
(s) Inventory; Work/Contracts in Process..................................................................13
(t) Fixed Assets..........................................................................................13
(u) Year 2000 Compliance..................................................................................13
(v) Product Warranties and Claims.........................................................................13
(w) Intellectual Property Rights..........................................................................13
(x) Contracts, Leases, Commitments, and Agreements........................................................14
(y) Composition of Assets.................................................................................14
(z) Insurance.............................................................................................15
(aa) Conflicts of Interest...............................................................................15
(bb) Customer Lists......................................................................................15
(cc) Bank Accounts.......................................................................................15
(dd) Full Disclosure.....................................................................................15
(ee) Information to InfoAccess Shareholders..............................................................15
(ff)Number of Purchasers..................................................................................15
(gg) Pooling of Interests; Reorganization................................................................15
5.2 REPRESENTATIONS AND WARRANTIES OF INTRANET SOLUTIONS AND
MERGER SUB............................................................................................16
(a) Corporate Organization................................................................................16
(b) Qualification to do Business..........................................................................16
(c) Corporate Power.......................................................................................16
(d) Corporate Authority...................................................................................16
(e) Authorization for IntraNet Solutions Common Shares....................................................16
(f) Consents and Approvals; No Violation..................................................................17
(g) Ownership of Merger Sub; No Prior Activities; Assets of Merger Sub....................................17
(h) SEC Reports; Financial Statements; Capitalization.....................................................18
(i) Absence of Certain Changes or Events..................................................................19
(j) Actions, Suits, Proceedings...........................................................................19
(k) Full Disclosure.......................................................................................19
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(l) Information to InfoAccess Shareholders................................................................19
(m) Pooling of Interests; Reorganization..................................................................19
ARTICLE VI Certain Covenants....................................................................................20
6.1 CONDUCT OF INFOACCESS'BUSINESS PENDING THE MERGER.....................................................20
6.2 BOOKS AND RECORDS; ACCESS AND INFORMATION.............................................................20
6.3 NOTIFICATION OF CERTAIN MATTERS.......................................................................21
6.4 TAX DISTRIBUTIONS.....................................................................................21
6.5 OUTSTANDING INFOACCESS STOCK OPTIONS AND WARRANTS.....................................................21
6.6 GRANT OF NEW STOCK OPTIONS............................................................................22
6.7 COMPLIANCE WITH RULE 144..............................................................................22
6.8 CUSTODIAN AGREEMENT...................................................................................22
6.9 APPROVAL OF INFOACCESS SHAREHOLDERS; INFORMATION STATEMENT............................................23
6.10 NO SOLICITATION.......................................................................................23
6.11 GOOD FAITH EFFORTS; COOPERATION.......................................................................24
6.12 EMPLOYEE PLANS........................................................................................24
6.13 CONFIDENTIALITY.......................................................................................24
6.14 PUBLIC DISCLOSURE.....................................................................................24
6.15 POOLING ACCOUNTING....................................................................................24
6.16 FIRPTA................................................................................................25
6.17 BLUE SKY LAWS.........................................................................................25
6.18 TAX-FREE REORGANIZATION...............................................................................25
6.19 STATE TAKEOVER LAWS...................................................................................25
6.20 AFFILIATE AGREEMENTS..................................................................................25
(a) InfoAccess Affiliates.................................................................................25
(b) IntraNet Solutions Affiliates.........................................................................25
6.21 NASDAQ LISTING........................................................................................26
6.22 REGISTRATION REQUIREMENTS.............................................................................26
(a) Required Registration.................................................................................26
(b) Registration Procedures...............................................................................26
(c) Expenses..............................................................................................29
(d) Indemnification.......................................................................................29
(e) Contribution..........................................................................................31
(f) Right to Suspend Sales................................................................................32
6.23 PAYMENT OF CERTAIN OBLIGATIONS........................................................................32
ARTICLE VII Conditions to Closing...............................................................................32
7.1 CONDITIONS TO OBLIGATION OF INTRANET SOLUTIONS
AND MERGER SUB TO CLOSE...............................................................................32
(a) Representations and Warranties........................................................................32
(b) Observance and Performance............................................................................33
(c) No Adverse Change.....................................................................................33
(d) Officers'Certificate..................................................................................33
(e) Certificate of Significant Shareholders...............................................................33
(f) Legal Opinion.........................................................................................33
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(g) Custodian Agreement...................................................................................33
(h) Employment Agreements.................................................................................33
(i) No Legal Actions......................................................................................33
(j) Shareholder Approval; Dissenting Shares...............................................................34
(k) Investment Letters....................................................................................34
(l) Affiliate Agreements..................................................................................34
(m) Termination of Shareholder Agreements.................................................................34
(n) Pooling Report........................................................................................34
(o) Audit.................................................................................................34
(p) Accounting Review.....................................................................................34
(q) Review of Source Codes................................................................................35
(r) Expenses of InfoAccess................................................................................35
(s) 401(k) Plan...........................................................................................35
7.2 CONDITIONS TO OBLIGATION OF INFOACCESS AND SIGNIFICANT SHAREHOLDERS TO CLOSE..........................35
(a) Representations and Warranties........................................................................35
(b) Observance and Performance............................................................................35
(c) No Adverse Change.....................................................................................35
(d) Officers'Certificate..................................................................................35
(e) Legal Opinion.........................................................................................36
(f) Custodian Agreement...................................................................................36
(g) Employment Agreements.................................................................................36
(h) Grant of Options......................................................................................36
(i) No Legal Actions......................................................................................36
(j) Shareholder Approval..................................................................................36
ARTICLE VIII Indemnification....................................................................................36
8.1 INDEMNIFICATION BY HOLDBACK SHAREHOLDERS..............................................................36
8.2 INDEMNIFICATION BY INTRANET SOLUTIONS.................................................................37
8.3 PROCEDURES FOR INDEMNIFICATION........................................................................37
8.4 INDEMNITY HOLDBACK FUND; LIMITATIONS ON INDEMNIFICATION...............................................38
ARTICLE IX Termination..........................................................................................38
9.1 TERMINATION...........................................................................................38
9.2 EFFECT OF TERMINATION.................................................................................39
9.3 TERMINATION FEES AND EXPENSES.........................................................................40
ARTICLE X Miscellaneous.......................................................................................40
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.....................................40
10.2 EXPENSES..............................................................................................41
10.3 NOTICES...............................................................................................41
10.4 WAIVER................................................................................................42
10.5 KNOWLEDGE OF INFOACCESS...............................................................................42
10.6 HEADINGS..............................................................................................43
10.7 NONASSIGNABILITY......................................................................................43
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10.8 PARTIES IN INTEREST...................................................................................43
10.9 COUNTERPARTS..........................................................................................43
10.10 GOVERNING LAW.........................................................................................43
10.11 SEVERABILITY..........................................................................................43
10.12 REMEDIES..............................................................................................43
10.13 ENTIRE AGREEMENT......................................................................................43
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SCHEDULES
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Section
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InfoAccess Schedule of Exceptions......................................................................... 5.1
InfoAccess Shareholders and Information as to Capital Stock............................................... 5.1(e)
InfoAccess Exceptions to Consents and Approvals; No Violation............................................. 5.1(f)
InfoAccess Employees...................................................................................... 5.1(j)
InfoAccess Benefit Plans.................................................................................. 5.1(k)
Labor Matters............................................................................................. 5.1(l)
InfoAccess Financial Statements........................................................................... 5.1(m)
Changes, Dividends, Etc................................................................................... 5.1(o)
Listed of Permitted Encumbrances.......................................................................... 5.1(p)
Accounts Receivable....................................................................................... 5.1(q)
Fixed Assets.............................................................................................. 5.1(t)
Year 2000 Compliance...................................................................................... 5.1(u)
InfoAccess Intellectual Property.......................................................................... 5.1(w)
Listed Contracts.......................................................................................... 5.1(x)
InfoAccess Insurance Policies............................................................................. 5.1(z)
Customer Lists............................................................................................ 5.1(bb)
Bank Accounts............................................................................................. 5.1(cc)
Outstanding InfoAccess Options and Warrants............................................................... 6.5
InfoAccess Affiliates..................................................................................... 6.20
Accounting Changes........................................................................................ 7.1(o)
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EXHIBITS
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Form of Custodian Agreement............................................................................... A
Form of Affiliate Agreement............................................................................... B
Form of Legal Opinion of Perkins Coie LLP................................................................. C
Form of W. James Culbertson Employment Agreement.......................................................... D-1
Form of Thomas E. Freeman Employment Agreement............................................................ D-2
Form of Investment Letter................................................................................. E
Form of Legal Opinion of Faegre & Benson LLP.............................................................. F
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of September
16, 1999, among IntraNet Solutions, Inc., a Minnesota corporation ("IntraNet
Solutions") Intranet Solutions (Washington), Inc., a Washington corporation and
a direct wholly owned subsidiary of IntraNet Solutions ("Merger Sub"),
InfoAccess, Inc., a Washington corporation ("InfoAccess"), and each of W. James
Culbertson and Richard M. Dillhoff, shareholders of InfoAccess (the "Significant
Shareholders").
RECITALS
A. The Board of Directors of IntraNet Solutions, Merger Sub and
InfoAccess have each determined that it is in the best interests of its
respective shareholders for Merger Sub to merge with and into InfoAccess upon
the terms and subject to the conditions of this Agreement.
B. Each of the Significant Shareholders has approved and is a
party to this Agreement.
C. It is intended that the Merger (as hereinafter defined) shall
qualify as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
D. IntraNet Solutions, Merger Sub, InfoAccess, and the
Significant Shareholders desire to make certain representations, warranties,
covenants and agreements in connection with the Merger.
In consideration of the mutual representations, warranties, covenants,
and agreements set forth herein, IntraNet Solutions, Merger Sub, InfoAccess and
the Significant Shareholders hereby agree as follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.2), InfoAccess and
Merger Sub shall consummate a merger (the "Merger") in which (a) Merger Sub
shall be merged with and into InfoAccess and the separate corporate existence of
Merger Sub shall cease, (b) InfoAccess shall be the successor or surviving
corporation in the Merger and shall continue to be governed by the laws of the
State of Washington, and (c) the separate corporate existence of InfoAccess with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger. (The corporation surviving the Merger is sometimes
hereinafter referred to as the "Surviving Corporation.") The Merger shall have
the effects specified in the Washington Business Corporation Act (the "WBCA").
The Merger is intended to qualify as a reorganization within
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the meaning of Section 368(a) of the Code, and the parties shall not take a
position on any tax return inconsistent with the treatment of the Merger as such
as a tax-free reorganization.
1.2 Effective Time. IntraNet Solutions, Merger Sub and InfoAccess
shall cause Articles of Merger (the "Merger Articles") to be executed and filed
on the Closing Date (as defined in Section 1.3) (or on such other date as
IntraNet Solutions and InfoAccess may agree) with the Secretary of State of the
State of Washington, in accordance with the relevant provisions of the WBCA. The
Merger shall become effective at the time at which the Merger Articles shall
have been accepted for record by the Secretary of State of the State of
Washington or such later time as IntraNet Solutions and InfoAccess may agree and
specify in the Merger Articles and such time of effectiveness is hereinafter
referred to as the "Effective Time."
1.3 Closing. The closing of the Merger (the "Closing") shall take
place (a) at the offices of Faegre & Benson LLP, 2200 Norwest Center,
Minneapolis, Minnesota, at 10:00 a.m. on the business day on which the last to
be fulfilled or waived of the conditions set forth in Article VII of this
Agreement shall be fulfilled or waived in accordance with this Agreement or (b)
at such other place and/or time and/or on such other date as IntraNet Solutions
and InfoAccess may agree (the date on which the Closing occurs being herein
referred to as the "Closing Date").
ARTICLE II
CHARTER AND BY-LAWS OF THE SURVIVING CORPORATION
2.1 The Charter. The Articles of Incorporation of Merger Sub as in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, until duly amended in accordance
with the terms thereof and of the WBCA, except that from and after the Effective
Time, Article I of the Articles of Incorporation of Merger Sub shall be amended
to be and read as follows:
"The name of this Corporation is InfoAccess, Inc."
2.2 The By-Laws. The By-Laws of Merger Sub in effect immediately
prior to the Effective Time shall be the By-Laws of the Surviving Corporation,
until duly amended in accordance with the terms thereof, of the Articles of
Incorporation of the Surviving Corporation and of the WBCA.
ARTICLE III
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
3.1 Directors. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation, such directors to serve until their successors have been duly
elected or appointed and qualified or until their earlier
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death, resignation, or removal in accordance with the Surviving Corporation's
Articles of Incorporation and By-Laws.
3.2 Officers. The officers of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the officers of the Surviving
Corporation, such officers to serve until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation, or
removal in accordance with the Surviving Corporation's Articles of Incorporation
and By-Laws.
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
INFOACCESS AND MERGER SUB SHARES IN THE MERGER; HOLDBACK
4.1 Merger Consideration; Conversion or Cancellation of InfoAccess
Shares in Merger. The manner of converting or canceling shares of InfoAccess and
Merger Sub in the Merger shall be as follows:
(a) Merger Consideration. At the Effective Time, each
share of common stock of InfoAccess ("InfoAccess Shares") issued and outstanding
immediately prior to the Effective Time (other than Dissenting Shares as defined
in Section 4.6) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to receive (subject to
Section 4.5) 0.31230 shares of common stock of IntraNet Solutions ("IntraNet
Solutions Common Shares") (the IntraNet Solutions Common Shares thus to be
received by the holders of InfoAccess Shares in the Merger being herein called
the "Merger Consideration").
(b) Cancellation of InfoAccess Shares. At the Effective
Time, all issued and outstanding InfoAccess Shares to be converted under this
Section 4.1 shall, by virtue of the Merger and without any action on the part of
the holders thereof, cease to be outstanding, be cancelled and retired, and
cease to exist, and each holder of a certificate representing any such
InfoAccess Shares shall thereafter cease to have any rights with respect to such
InfoAccess Shares, except (other than with respect to Dissenting Shares) the
right to receive for each of the InfoAccess Shares, upon the surrender of such
certificate in accordance with Section 4.2, the Merger Consideration and cash
paid in lieu of fractional IntraNet Solutions Common Shares as contemplated by
Section 4.4.
(c) Conversion of Merger Sub Shares. At the Effective
Time, each share of common stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into one
share of common stock of the Surviving Corporation.
(d) Stock Options and Warrants. At the Effective Time,
all unexercised options and warrants to purchase InfoAccess Shares then
outstanding shall be converted into options to acquire IntraNet Solutions Common
Shares in accordance with Section 6.5.
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4.2 Payment for InfoAccess Shares in the Merger.
(a) Exchange Agent. Prior to the Effective Time, IntraNet
Solutions shall appoint Norwest Bank Minnesota, National Association, or such
other bank or trust company designated by IntraNet Solutions and reasonably
satisfactory to InfoAccess (the "Exchange Agent"), for the purpose of exchanging
certificates representing InfoAccess Shares for the Merger Consideration. At
least one business day prior to the Effective Time, IntraNet Solutions shall
deposit with the Exchange Agent the certificates representing the Merger
Consideration required in the aggregate to effect the conversion referred to in
Section 4.1(a) above. IntraNet Solutions Common Shares into which InfoAccess
Shares shall be converted in the Merger shall be deemed to have been issued at
the Effective Time. Promptly after the Effective Time, IntraNet Solutions will
send, or will cause the Exchange Agent to send, to each holder of InfoAccess
Shares at the Effective Time a letter of transmittal for use in such conversion.
(b) Submission of Certificates. Each holder of InfoAccess
Shares that have been converted into a right to receive Merger Consideration
upon surrender to the Exchange Agent of a certificate or certificates
representing such InfoAccess Shares, together with a properly completed letter
of transmittal covering such InfoAccess Shares, will be entitled (subject to
Section 4.5) to receive the requisite Merger Consideration, as determined in
accordance with Section 4.1(a), in exchange for such InfoAccess Shares.
(c) Issuance of Certificates. If any certificate
representing IntraNet Solutions Common Shares is to be issued in the name of a
person other than the registered holder of the InfoAccess Shares represented by
the certificate or certificates surrendered in exchange therefor, it shall be a
condition to such issuance that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the person requesting such issuance shall pay to the Exchange Agent any transfer
or other taxes required as a result of issuance to a person other than the
registered holder of such shares or establish to the satisfaction or the
Exchange Agent that such tax has been paid or is not payable.
(d) No Registration of Transfers. After the Effective
Time, there shall be no further registration of transfers of shares of capital
stock of InfoAccess which were outstanding immediately prior to the Effective
Time.
(e) Reversion of Merger Consideration. Any Merger
Consideration made available to the Exchange Agent under Section 4.2(a) that
remains unclaimed by the shareholders of InfoAccess six months after the
Effective Time shall be returned to IntraNet Solutions, upon demand, and any
shareholder of InfoAccess who has not exchanged his or her InfoAccess Shares for
the Merger Consideration in accordance with this Section 4.2 prior to that time
shall thereafter look only to IntraNet Solutions for the Merger Consideration in
respect of his or her InfoAccess Shares. Notwithstanding the foregoing, IntraNet
Solutions shall not be liable to any shareholder of InfoAccess for any amount
paid to a public official pursuant to applicable abandoned property laws. Any
Merger Consideration remaining unclaimed by shareholders of InfoAccess two years
after the Effective Time (or such earlier date immediately
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prior to such time as such amounts would otherwise escheat to or become property
of any governmental entity) shall, to the extent permitted by applicable law,
become the property of IntraNet Solutions free and clear of any claims or
interest of any person previously entitled thereto.
(f) Dividends, Interest, or Other Distributions. No
dividends or other distributions with respect to IntraNet Solutions Common
Shares shall be paid to the holder of any unsurrendered certificates
representing InfoAccess Shares until such certificates are surrendered as
provided in this Section 4.2. Upon such surrender, there shall be paid, without
interest, to the person in whose name the certificates representing IntraNet
Solutions Common Shares into which such InfoAccess Shares were converted are
registered, all dividends and other distributions payable in respect of such
securities on a date subsequent to, and in respect of a record date after, the
Effective Time.
(g) Custodian Account. Notwithstanding the foregoing,
under the provisions of Section 4.5 a portion of the aggregate Merger
Consideration which each of the InfoAccess shareholders would be otherwise
entitled to receive shall instead be held in a custodian account.
4.3 Adjustments. If at any time during the period between the date
of this Agreement and the Effective Time, IntraNet Solutions should split or
combine the IntraNet Solutions Common Shares, or pay a stock dividend or other
distribution in IntraNet Solutions Common Shares, then the consideration
constituting Merger Consideration and the number of shares represented by the
options issuable under Section 6.5 shall be appropriately and equitably adjusted
to reflect such split, combination, dividend, or other distribution.
4.4 Fractional Shares. No fractional IntraNet Solutions Common
Shares shall be issued in the Merger. In lieu of any such fractional securities,
each holder of InfoAccess Shares who would otherwise have been entitled to a
fraction of an IntraNet Solutions Common Share will be paid an amount in cash
(without interest) equal to the product of such fraction times the average per
share closing price of IntraNet Solutions Common Shares as quoted on the Nasdaq
Stock Market for the 20 trading days immediately prior to the Closing Date.
4.5 Holdback of IntraNet Solutions Common Shares.
(a) Establishment of Indemnity Holdback Fund. At the
Effective Time, a custodian account shall be established with the Custodian (as
defined in Section 6.8) whereby a portion of the IntraNet Solutions Common
Shares issuable in the Merger to holders of outstanding InfoAccess Shares at the
Effective Time (other than holders of Dissenting Shares) (the "Holdback
Shareholders", which term shall include all holders of outstanding InfoAccess
Shares immediately prior to the Effective Time) will be delivered to the
Custodian. The aggregate number of IntraNet Solutions Common Shares deposited in
the Custodian Account shall be equal to 10% of the number of IntraNet Solutions
Common Shares constituting the Merger Consideration (rounded to the nearest
whole share) (the "Indemnity Holdback Fund"). The custodian account shall be
established pursuant to an agreement substantially in the form attached hereto
as Exhibit A (the "Custodian Agreement"), to which all the Holdback
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Shareholders will be parties. At the Effective Time, by adoption of the
Custodian Agreement, each Holdback Shareholder shall be deemed to have directed
IntraNet Solutions to deliver to the Custodian a certificate or certificates
registered in the name of the Custodian for that number of IntraNet Solutions
Common Shares otherwise distributable to such Holdback Shareholder in the Merger
which represents such Holdback Shareholder's Proportionate Interest (as defined
in this Section 4.5) in the Indemnity Holdback Fund. "Proportionate Interest"
shall mean the proportionate interest of each Holdback Shareholder in the
Indemnity Holdback Fund which is equal to a fraction, the numerator of which is
the number of IntraNet Solutions Common Shares receivable by such Holdback
Shareholder in the Merger and the denominator of which is the total number of
IntraNet Solutions Common Shares receivable by all Holdback Shareholders in the
Merger, all as set forth in the schedule of Proportionate Interests to be
delivered by InfoAccess to IntraNet Solutions at the Closing. Any shares or
other securities from time to time held in the Indemnity Holdback Fund shall be
registered in the name of the Custodian or its nominee. The Indemnity Holdback
Fund shall be held by the Custodian subject to the terms and conditions of the
Custodian Agreement and shall be available to satisfy indemnity claims as set
forth in Article VIII of this Agreement.
(b) Distributions and Voting. Any IntraNet Solutions
Common Shares or other equity securities issued or distributed by IntraNet
Solutions (including shares issued upon a stock split) ("New Shares") in respect
of IntraNet Solutions Common Shares in the Indemnity Holdback Fund which have
not theretofore been released from the Indemnity Holdback Fund shall be added to
the Indemnity Holdback Fund and become a part thereof. New Shares issued in
respect of IntraNet Solutions Common Shares which have been released from the
Indemnity Holdback Fund shall not be added to the Indemnity Holdback Fund but
shall be distributed to the record holders thereof. Cash dividends on IntraNet
Solutions Common Shares shall not be added to the Indemnity Holdback Fund but
shall be distributed to the Holdback Shareholders in proportion to their
Proportionate Interests in the Indemnity Holdback Fund. Each Holdback
Shareholder shall have the right to direct the voting of shares held in the
Indemnity Holdback Fund in proportion to his or her Proportionate Interest in
the Indemnity Holdback Fund.
4.6 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, InfoAccess Shares that are issued and outstanding immediately
prior to the Effective Time and that are held by shareholders who have the right
(to the extent such right is available by law) to demand and receive payment of
the fair value of their shares of InfoAccess Shares in the manner provided in
Chapter 23B.13 of the WBCA and have not failed to perfect or have not
effectively withdrawn or lost such right under the WBCA, as the case may be,
prior to the Effective Time ("Dissenting Shares") will not be converted into the
right to receive the Merger Consideration; provided, however, that if any holder
of Dissenting Shares shall fail to perfect or shall have effectively withdrawn
or lost such right under the WBCA, such shares of InfoAccess Common Stock shall
thereupon be deemed to have been converted into and to have become exchangeable
for the right to receive the Merger Consideration, without interest. InfoAccess
shall give IntraNet Solutions prompt notice of (a) any written notice of intent
to demand the fair value of any InfoAccess Shares pursuant to the WBCA, (b) any
written demand for payment or supplemental payment, (c) any deposit of
Dissenting Shares, and (d) any other written demand, notice, or service of
process relating to Dissenting Shares. InfoAccess will not, except upon
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prior written consent from IntraNet Solutions, voluntarily make any payment or
remittance with respect to, or settle or offer to settle, any demand for payment
or agree upon the fair value of any Dissenting Shares.
4.7 Lost, Stolen, or Destroyed Certificates. If any certificates
evidencing InfoAccess Shares shall have been lost, stolen, or destroyed, the
Exchange Agent shall issue in exchange for such lost, stolen, or destroyed
certificate(s), upon the making of an affidavit of that fact by the holder
thereof, the Merger Consideration; provided, however, that IntraNet Solutions
may, in its reasonable discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate(s) to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against IntraNet Solutions and/or the Exchange Agent with
respect to the certificate(s) alleged to have been lost, stolen, or destroyed.
4.8 Accounting Consequences. It is intended by the parties hereto
that the Merger shall qualify for accounting treatment as a pooling of
interests.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of InfoAccess. Except as
otherwise set forth on the InfoAccess Schedule of Exceptions delivered by
InfoAccess to IntraNet Solutions at or prior to the date hereof, InfoAccess
hereby represents and warrants to IntraNet Solutions and Merger Sub that:
(a) Corporate Organization. InfoAccess is a corporation
duly organized and validly existing under the laws of the State of Washington.
True and correct copies of the Articles of Incorporation and the By-Laws of
InfoAccess in effect as of the date of this Agreement have been provided to
IntraNet Solutions. InfoAccess does not have any direct or indirect equity
interest in any other firm, corporation, partnership, joint venture,
association, or other business organization.
(b) Qualification to do Business. InfoAccess is duly
qualified or licensed to do business as a foreign corporation in each
jurisdiction wherein the nature of its activities or of its properties owned or
leased makes such qualification necessary and failure to be so qualified would
have a material adverse effect on InfoAccess.
(c) Corporate Power. InfoAccess has the requisite power
and authority (corporate or otherwise) to own and operate its properties, to
carry on it business as now being conducted, to execute and deliver this
Agreement, and to consummate the transactions contemplated by this Agreement.
(d) Corporate Authority. The execution and delivery of
this Agreement by InfoAccess, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of InfoAccess, other than approval of
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InfoAccess' shareholders. This Agreement and all other instruments required
hereby to be executed and delivered by InfoAccess or any of the Significant
Shareholders have been, or will be, when approved by the required vote of the
shareholders of InfoAccess, duly executed and delivered by authorized officers
of InfoAccess or by the Significant Shareholders, as the case may be, and are,
or when delivered will be, legal, valid and binding obligations of InfoAccess
and the Significant Shareholders, enforceable against InfoAccess and the
Significant Shareholders in accordance with their terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity.
(e) Capitalization. Schedule 5.1(e) attached hereto
contains the name and address of each shareholder of InfoAccess and the number
of InfoAccess Shares owned by each shareholder, all as reflected on the records
of InfoAccess. The authorized capital stock of InfoAccess is set forth on
Schedule 5.1(e). All of the outstanding InfoAccess Shares have been duly
authorized and validly issued and are fully paid and nonassessable and free of
preemptive rights. No InfoAccess Shares are held in the treasury of InfoAccess
or, except with respect to the options and warrants referred to in the
immediately following sentence, reserved for issuance. Except as set forth on
Schedule 5.1(e), there are not as of the date of this Agreement and there shall
not be at the Effective Time any outstanding or authorized options, warrants,
calls, rights, commitments, or any other agreements of any character to which
InfoAccess is a party, or by which it is bound, requiring it to issue, transfer,
sell, purchase, redeem, or acquire any shares of capital stock or any securities
or rights convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of capital stock or other securities of InfoAccess.
There are not as of the date of this Agreement and there shall not be at the
Effective Time any shareholder agreements, voting trusts, or other agreements or
understandings to which InfoAccess or any of the Significant Shareholders is a
party or by which InfoAccess or any of the Significant Shareholders is bound
relating to the InfoAccess Shares. To the best knowledge of InfoAccess, there
are not as of the date of this Agreement any shareholder agreements, voting
trusts, or other agreements or understandings to which any other shareholder of
InfoAccess is a party or by which any other shareholder of InfoAccess is bound
relating to the InfoAccess Shares.
(f) Consents and Approvals; No Violation. Neither the
execution and delivery by InfoAccess and the Significant Shareholders of this
Agreement nor the consummation by InfoAccess and the Significant Shareholders of
the transactions contemplated hereby shall (i) conflict with or result in any
breach of any provision of the Articles of Incorporation or the By-Laws of
InfoAccess; (ii) require any consent, approval, authorization, or permit of, or
filing with or notification to, any governmental authority, except (A) filings
by IntraNet Solutions under the applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Securities Exchange Act"), the Nasdaq National Market and the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act") and applicable state securities laws, and (B)
the filing of Merger Articles pursuant to the WBCA and appropriate documents
with the relevant authorities of other states in which InfoAccess is authorized
to do business; (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time
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or both) a default (or give rise to any right of termination, cancellation or
acceleration or lien or other charge or encumbrance) under, any of the terms,
conditions, or provisions of any note, license, agreement, Listed Contract (as
defined in Section 5.1(x)), or other instrument or obligation to which
InfoAccess or any of the Significant Shareholders or any of their assets may be
bound, except as set forth on Schedule 5.1(f) or except for such violations,
breaches, and defaults (or rights of termination, cancellation, or acceleration
or lien or other charge or encumbrance) as to which requisite waivers or
consents have been obtained or such as would not have a material adverse effect
on InfoAccess; or (iv) assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in this Section 5.1(f) are duly
and timely obtained or made, violate any order, writ, injunction, decree,
statute, rule, or regulation applicable to InfoAccess or any of the Significant
Shareholders or to any of their respective assets.
(g) Actions, Suits, Proceedings. There are no actions,
suits, or proceedings pending or, to the best knowledge of InfoAccess,
threatened against InfoAccess or any of its properties or business in any court
or before any governmental authority, except for Civil Action No. 97-CV-74704
brought by Robert J. Faust in United States District Court, Eastern District of
Michigan, Southern Division alleging breach of a just-cause employment contract
and claims for post-termination commissions, which suit has previously been
disclosed to IntraNet Solutions, and which suit has been dismissed under an
order granting summary judgment to InfoAccess. InfoAccess is not subject to any
order, writ, injunction, or decree (other than those of general application) of
any court or governmental authority. To the best knowledge of InfoAccess, there
are no actions, suits, or proceedings pending or threatened against any of the
holders of InfoAccess Shares in any court or before any governmental authority
in regard to their InfoAccess Shares.
(h) Compliance with Applicable Laws and Other
Instruments. The business and operations of InfoAccess have been and are being
conducted in all material respects in accordance with all material applicable
laws, rules, or regulations of all governmental and regulatory authorities,
including without limitation all laws, rules and regulations relating to (i) the
environment or occupational health and safety or (ii) the export of products
manufactured or marketed by InfoAccess (hereinafter collectively referred to as
"Environmental and Export Laws"). InfoAccess is not in violation of its Articles
of Incorporation or By-Laws. InfoAccess possesses from the appropriate agency,
commission, board and governmental body and authority all material licenses,
certifications, permits and regulatory approvals required by law or otherwise
necessary for the operation of its business. All such licenses, certifications,
permits and approvals granted to InfoAccess are in full force and effect, and no
action to terminate any such license, certification, permit, or approval is
pending or, to the best knowledge of InfoAccess, has been threatened by any
governmental agency or other party.
(i) Environmental and Export Laws. InfoAccess has
obtained all permits and other governmental authorizations required under
applicable Environmental and Export Laws (and has complied in all material
respects with the terms and conditions thereof) and has not within the last
twelve months received any written communication, whether from a governmental
authority, citizens group, employee, or otherwise, that alleges InfoAccess is
not in
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full compliance with applicable Environmental and Export Laws. No circumstances
exist that would subject InfoAccess to any liability with respect to the
environmental contamination of any property.
(j) Employees; Consultants. Schedule 5.1(j) contains a
true and correct list of (i) all employees of InfoAccess at the date hereof and
in the case of each such employee sets forth the position, earned and accrued
vacation at August 31, 1999, and date of employment; (ii) all consultants of
InfoAccess at the date hereof or utilized within the prior 12 months who have
been or will be paid at least $10,000 by InfoAccess, and their responsibilities
and areas of expertise.
(k) Employee Plans. Schedule 5.1(k) attached hereto lists
all executive compensation plans, profit sharing plans, bonus plans, deferred
compensation agreements, employee pension retirement plans, and employee benefit
stock option or stock purchase plans and other employee benefit plans covering
employees of InfoAccess or former employees of InfoAccess who are entitled to
benefits under such plans. True and correct copies of each of the plans
described in Schedule 5.1(k) and each of the related trust agreements or
insurance contracts, if any, have been made available by InfoAccess to IntraNet
Solutions. InfoAccess has also made available to IntraNet Solutions the most
recent summary plan description required with respect to each of such plans.
There are no pending or, to the best knowledge of InfoAccess, threatened claims,
lawsuits, or arbitrations that have been asserted or instituted against such
plans or any fiduciaries thereof respecting their duties to the plans or the
assets or any of the trusts under any of the plans. No such plan is a
Multiemployer Plan, as defined in Section 4001(a)(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Each of the plans described
in Schedule 5.1(k) that is subject to ERISA is in compliance with ERISA in all
material respects. Each of the plans described in Schedule 5.1(k) that is
intended to be a "qualified" plan under the Code is in compliance in all
material respects with the applicable provisions of the Code. Neither
InfoAccess, its directors, officers and employees nor, to the best knowledge of
InfoAccess, any fiduciary of any such plan is in breach of any obligations
imposed on fiduciaries under Title I of ERISA. No "reportable event" as such
term is defined in Section 4043(b) of ERISA or prohibited transactions within
the meaning of Section 406 of ERISA has occurred with respect to any such plan
and no event has occurred that could subject any plan, InfoAccess, or any
fiduciary of a plan to any excise tax under the Code. InfoAccess is in
substantial compliance with all applicable requirements of Section 4980B of the
Code.
(l) Labor Matters. InfoAccess has no existing labor
disputes and, except as set forth in Schedule 5.1(l), there are no existing
employment, consulting, non-competition, severance, indemnification, or
non-disclosure agreements or collective bargaining agreements between InfoAccess
and any of its past or present employees, officers and directors. There is no
collective bargaining unit representing any of InfoAccess' employees. No
petition has been filed and is pending with the National Labor Relations Board
by any labor organization or any group of employees for an election or
certification regarding the representation of any group of employees by a labor
organization, nor to the best knowledge of InfoAccess is there at present
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any solicitation or campaign by any labor organization or employee for the
representation of InfoAccess' employees by a labor organization.
(m) Financial Statements. Attached to this Agreement as
Schedule 5.1(m) are (i) a balance sheet of InfoAccess at December 31, 1998,
together with the related statements of operations, changes in shareholders'
equity (deficit) and cash flows for the year then ended, and the review report
thereon of Clark & Associates, P.S., certified public accountants, and (ii) an
unaudited balance sheet of InfoAccess (the "Balance Sheet") at July 31, 1999
(the "Balance Sheet Date"), together with the related unaudited statements of
operations for the seven months then ended. Such financial statements (i) are in
accordance with the books and records of InfoAccess, (ii) present fairly, in all
material respects, the financial condition of InfoAccess at the balance sheet
dates and the results of its operations and cash flows for the periods therein
specified, and (iii) have, in all material respects, been prepared in accordance
with generally accepted accounting principles applied on a consistent basis,
except that unaudited statements do not contain footnotes and are subject to
normal audit adjustments. Specifically, but not by way of limitation, the
balance sheets or notes thereto disclose all of the debts, liabilities and
obligations of any nature (whether absolute, accrued, or contingent and whether
due or to become due) of InfoAccess at their respective dates that in accordance
with generally accepted accounting principles would be required to be disclosed
in such balance sheet. The balance sheets include appropriate reserves for all
bad debts, taxes and other liabilities accrued at such dates but not yet
payable.
(n) Tax Returns and Audits. All federal, state, local,
and foreign tax returns (including, but not limited to, returns related to
income, employment, withholding, personal property, sales, use and registration
taxes) required to be filed prior to the Effective Time, or appropriate
extension requests of InfoAccess, have been filed, and all federal, state,
local, and foreign taxes required to be paid with respect to such returns have
been paid or due provision for the payment thereof has been made. InfoAccess is
not delinquent in the payment of any such tax or in the payment of any
assessment or governmental charge. InfoAccess has not received notice of any tax
deficiency proposed or assessed against it, and has not executed any waiver of
any statute of limitations on the assessment or collection of any tax, other
than an ongoing Business and Occupation tax audit. None of InfoAccess' tax
returns has been audited by governmental authorities in a manner to bring such
audits to InfoAccess' attention. InfoAccess does not have any tax liabilities
except those reflected on the Balance Sheet as of the Balance Sheet Date and
those incurred in the ordinary course of business since the Balance Sheet Date.
InfoAccess has not been a member of an affiliated group within the meaning of
Section 1504 of the Code (or any similar group defined under similar provision
of state, local, or foreign law) filing a consolidated federal income tax return
and does not have liability for the taxes of any person (other than InfoAccess)
under Treas. Reg. 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferor or successor by contract or otherwise. InfoAccess is
qualified as a corporation for which a valid election to be taxed under the
provisions of Subchapter S ("Subchapter S"), Chapter 1, Subtitle A of the Code
has been filed and is in effect under Subchapter S. In addition, InfoAccess is
qualified to be taxed as an S corporation in every state in which it is
obligated to file a return and that recognizes elections to be taxed as an S
corporation.
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(o) Changes, Dividends, etc. Except for the transactions
contemplated by this Agreement, since the Balance Sheet Date InfoAccess has not:
(i) incurred any debts, obligations, or liabilities, absolute, accrued, or
contingent and whether due or to become due, except current liabilities incurred
in the ordinary course of business or in connection with the transactions
contemplated hereby; (ii) paid any obligation or liability other than, or
discharged or satisfied any liens or encumbrances other than those securing,
current liabilities, in each case in the ordinary course of business; (iii)
declared or made any payment or distribution to shareholders, or purchased or
redeemed any of its shares of capital stock or other securities, or obligated
itself to do so; (iv) mortgaged, pledged, or subjected to lien, charge, security
interest, or other encumbrance any of its assets, tangible or intangible, except
in the ordinary course of business; (v) sold, transferred or leased any of its
assets except in the ordinary course of business; (vi) cancelled or compromised
any material debt or claim, or waived or released any material right; (vii)
suffered any material physical damage, destruction, or loss (whether or not
covered by insurance); (viii) entered into any transaction other than in the
ordinary course of business or in connection with the transactions contemplated
hereby; (ix) issued or sold any shares of capital stock or other securities,
except in connection with the exercise of options or warrants outstanding as of
the Balance Sheet Date, or granted any options, warrants, or other purchase
rights with respect thereto; (x) made any acquisition or disposition of any
material assets or become involved in any other material transaction, other than
for fair value in the ordinary course of business; (xi) increased the
compensation payable, or to become payable, to any of its employees or
directors, or made any bonus payment or similar arrangement with any employees
or directors or increased the scope or nature of any fringe benefits provided
for its employees or directors; (xii) entered into any foreign exchange
contracts or any other hedging arrangements; or (xiii) agreed to do any of the
foregoing other than pursuant to this Agreement except as disclosed on Schedule
5.1(o). Since the Balance Sheet Date, the business of InfoAccess has been
carried on only in the ordinary and usual course, and there has been no material
adverse change in the financial condition, operations, results of operations,
management or business of InfoAccess.
(p) Title to the Assets. InfoAccess has good and
marketable title to all of its assets, free and clear of all liens, pledges,
security interests, conditional sale agreements, license agreements, charges and
encumbrances that shall continue after the Effective Time, except encumbrances
listed and described in Schedule 5.1(p) attached hereto, liens for current real
or personal property taxes not yet due and payable, liens imposed by law and
incurred in the ordinary course for obligations not yet due to carriers,
warehousemen, laborers, materialmen, and the like, or encumbrances that do not
have a material adverse effect on InfoAccess.
(q) Receivables. InfoAccess' accounts receivable as of
the Balance Sheet Date have arisen in the normal course of the operation of
InfoAccess' business, and constitute valid and binding obligations of the
account debtors and obligors, enforceable in accordance with their terms at the
amount recorded therefor in the books and records of InfoAccess (without giving
effect to any allowance for doubtful accounts) and are not and shall not be
subject to any discounts, whether for prompt payment, failure of the subject
products to perform in accordance with specifications, or other contingencies.
Except as set forth in
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Schedule 5.1(q), there are no accounts receivable which are contingent upon the
performance of future services or acceptance testing.
(r) Condition of Assets. The plant, offices and equipment
owned or leased by InfoAccess have been kept in good condition and repair in the
ordinary course of business, ordinary wear and tear excepted.
(s) Inventory; Work/Contracts in Process. All inventories
reflected on the Balance Sheet as of the Balance Sheet Date and all inventories
that have been acquired or produced since that date are stated in accordance
with generally accepted accounting principles at lower of cost or market. All
inventories are of a quality and quantity usable by InfoAccess in the ordinary
course of its business. All inventories of InfoAccess as of the Balance Sheet
Date are located at InfoAccess' facility in Bellevue, Washington, except for
demonstration and evaluation copies of software.
(t) Fixed Assets. Schedule 5.1(t) contains a true and
complete list, as of August 31, 1999, of all furniture, fixtures, machinery,
equipment, tools, spare parts and other fixed assets either owned or leased by
InfoAccess which have a value in excess of $5,000, reflecting whether they are
owned or leased. All such tangible personal property which is currently being
used by InfoAccess in the conduct of its business is in good and usable
condition, normal wear and tear excepted.
(u) Year 2000 Compliance. Except as described in Schedule
5.1(u) attached hereto, to the best knowledge of InfoAccess all of the computer
software, computer firmware, computer hardware (whether general or special
purpose), and other similar or related items of automated, computerized, and/or
software system(s) that are used or relied on by InfoAccess will manage and
manipulate data involving all dates from the twentieth and twenty-first
centuries without functional or data abnormality related to such dates that will
materially interfere with the normal operation of the business of InfoAccess.
(v) Product Warranties and Claims. The accrual for
warranty related expenses as of the Balance Sheet Date adequately reflects an
amount appropriate for satisfaction of warranty claims (or other similar
InfoAccess obligations) due in respect of goods sold or services provided by
InfoAccess prior to the Balance Sheet Date. Such provision has been established
in accordance with generally accepted accounting principles. InfoAccess has not
received any complaint to the effect that InfoAccess failed in any material
respect to meet its obligation to service any such products sold or serviced.
(w) Intellectual Property Rights. Schedule 5.1(w)
attached hereto lists and correctly describes all patents, and all registered
trademarks, trade names, service marks and copyrights (and all applications
therefor) embodied in or related to InfoAccess' business. To the best knowledge
of InfoAccess, InfoAccess (i) owns or has the exclusive right to use, except for
licenses granted to customers, distributors, vendors and developers in the
ordinary course of InfoAccess' business, all such patents, trademarks, trade
names, service marks and copyrights (and all applications therefor), and
InfoAccess has the right to use all trade secrets, inventions,
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know-how, designs, processes, computer programs, specifications and formulas
necessary to conduct its business as currently conducted, and (ii) is not
unlawfully using and has not unlawfully used any confidential information or
trade secrets of others. Schedule 5.1(w) identifies each item of intellectual
property listed above that any third party owns and InfoAccess has the right to
use pursuant to license, sublicense, or agreement, except for off-the-shelf
software. Except as set forth in Schedule 5.1(w), InfoAccess is not obligated to
pay royalties, fees, or other payments to any owner of, licensor of, or other
claimant to any patent, trademark, service mark, trade name, copyright, or other
intellectual property. InfoAccess has not transferred or conveyed any rights to
others in the intellectual property of InfoAccess, other than rights to use that
are incidental to sales and development of InfoAccess' products. To the best
knowledge of InfoAccess, InfoAccess is not infringing upon, and has not in the
past infringed upon, any known right or claimed right of any person under or
with respect to any patents, trademarks, service marks, trade names, copyrights,
licenses, or other intellectual property rights (nor has InfoAccess received
written notice with respect to any of the foregoing). All computer programming
with respect to InfoAccess' business has been performed by employees of
InfoAccess and all user documentation has been authored by employees of
InfoAccess. Except as provided in Schedule 5.1(w), no intellectual property of
InfoAccess has been escrowed or stored, or is required to be escrowed or stored,
on behalf of or for the benefit of any person other than InfoAccess. InfoAccess
has used and is using commercially reasonable methods to protect its
intellectual property rights.
(x) Contracts, Leases, Commitments, and Agreements. To
the extent not listed and described on any other Schedule hereto, Schedule
5.1(x) hereto lists (A) all contracts, leases, commitments, and agreements
(other than purchase orders from customers), oral or written, to which
InfoAccess is a party or by which it is bound that (i) provide for aggregate
payments of at least $10,000, (ii) contain an escalation, renegotiation, or
redetermination clause, (iii) cannot be cancelled by InfoAccess without
liability, premium or penalty (in excess of $10,000) on notice of not more than
30 days, (iv) obligate InfoAccess not to compete with another party or obligate
another party not to compete with InfoAccess, (v) concern any distributorship,
cooperative marketing or engineering arrangements between InfoAccess and others,
or (vi) commit InfoAccess to lend any money, or provide that InfoAccess
guarantees the obligations of any person or indemnifies any person (other than
intellectual property indemnities entered into in the ordinary course of
business), and (B) any other agreements or arrangements currently in force and
effect and material to InfoAccess (the "Listed Contracts"). InfoAccess and, to
the best knowledge of InfoAccess, each other party thereto have in all respects
substantially performed all obligations required to be performed by them to
date, and are not in default under any of the Listed Contracts. Other than those
which, by their terms, have expired and under which InfoAccess has no continuing
obligations or rights, each of the contracts required to be listed on Schedule
5.1(x) is in full force and effect and InfoAccess has not waived or assigned to
any other person any of its rights thereunder.
(y) Composition of Assets. The assets of InfoAccess,
including leased assets, comprise all material property and assets employed by
InfoAccess in its business.
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(z) Insurance. InfoAccess has in force the property and
casualty insurance described on Schedule 5.1(z) attached hereto. All policies
providing such insurance are in full force and effect, all premiums due under
such policies as of the date hereof have been paid, and InfoAccess has received
no notice of impending cancellation or nonrenewal thereof.
(aa) Conflicts of Interest. To the best knowledge of
InfoAccess, no officer, director or shareholder of InfoAccess or any affiliate
(as such term is defined in Rule 405 under the Securities Act) of any such
person has any direct or indirect interest (i) in any entity that does business
with InfoAccess, (ii) in any material property, asset, or right that is used by
InfoAccess in the conduct of its business, or (iii) in any contractual
relationship with InfoAccess other than as an employee. For the purpose of this
Section 5.1(aa), there shall be disregarded any interest that arises solely from
the ownership of less than a 1% equity interest in a corporation whose stock is
regularly traded on any national securities exchange or in the over-the-counter
market.
(bb) Customer Lists. Schedule 5.1(bb) attached hereto
identifies the top 10 customers of InfoAccess, in terms of dollars of sales, for
each of the year ended December 31, 1998, and for the eight months ended August
31, 1999.
(cc) Bank Accounts. Schedule 5.1(cc) attached hereto
identifies each account, lock box and safe deposit box of InfoAccess with any
bank, financial, or other institution, together with the names of all persons
authorized to draw therefrom and to have access thereto.
(dd) Full Disclosure. The representations and warranties
of InfoAccess contained in this Agreement or in any certificate or other writing
delivered by InfoAccess pursuant hereto or in connection with the Merger do not
contain any untrue statement of a material fact or, taken together, omit to
state a material fact necessary in order to make the statements herein and
therein, in light of the circumstances under which they were made, not
misleading.
(ee) Information to InfoAccess Shareholders. The
information with respect to InfoAccess contained in the Information Statement
(as defined in Section 6.9) will not, at the time it is mailed to shareholders
of InfoAccess, at the time of the InfoAccess shareholder meeting convened to
approve this Agreement and at the Effective Time, contain any untrue statement
of material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.
(ff) Number of Purchasers. To the best knowledge of
InfoAccess, there will be no more than 35 non-accredited purchasers (as
calculated under Rule 501(e) of the Securities Act) of securities of IntraNet
Solutions in connection with the Merger.
(gg) Pooling of Interests; Reorganization. To the best
knowledge of InfoAccess after due investigation, neither InfoAccess nor any of
the Significant Shareholders nor any other affiliate of InfoAccess has (i) taken
any action or failed to take any action which
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action or failure would jeopardize treatment of the Merger as a pooling of
interests for accounting purposes or (ii) taken any action or failed to take any
action which action or failure would jeopardize the qualification of the Merger
as a reorganization within the meaning of Section 368(a) of the Code.
5.2 Representations and Warranties of IntraNet Solutions and
Merger Sub. IntraNet Solutions and Merger Sub each represents and warrants to
InfoAccess and the Significant Shareholders that:
(a) Corporate Organization. Each of IntraNet Solutions
and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. True and
correct copies of the Articles of Incorporation and By-Laws of IntraNet
Solutions and Merger Sub in effect as of the date of this Agreement have been
provided to InfoAccess.
(b) Qualification to do Business. Each of IntraNet
Solutions and its subsidiaries is duly qualified or licensed to do business as a
foreign corporation in each jurisdiction wherein the nature of its activities or
of its properties owned or leased makes such qualification necessary and failure
to be so qualified would have a material adverse effect on IntraNet Solutions
and its subsidiaries, taken as a whole.
(c) Corporate Power. IntraNet Solutions has the requisite
power and authority (corporate or otherwise) to own and operate its properties
and to carry on its business as now being conducted. Each of IntraNet Solutions
and Merger Sub has the requisite power and authority (corporate or otherwise) to
execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement.
(d) Corporate Authority. The execution and delivery of
this Agreement by IntraNet Solutions and Merger Sub, and the consummation of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of IntraNet Solutions and Merger Sub. Without
limiting the generality of the foregoing, no approval of this Agreement by the
shareholders of IntraNet Solutions is required. This Agreement and all other
instruments required hereby to be executed and delivered by IntraNet Solutions
or Merger Sub have been, or shall be, duly executed and delivered by authorized
officers of IntraNet Solutions or Merger Sub, as the case may be, and are, or
when delivered shall be, legal, valid and binding obligations of IntraNet
Solutions and Merger Sub, enforceable against IntraNet Solutions and Merger Sub
in accordance with their terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general principles of equity.
(e) Authorization for IntraNet Solutions Common Shares.
IntraNet Solutions has taken all necessary action to permit it to issue the
number of IntraNet Solutions Common Shares required to be issued under Article
IV. The IntraNet Solutions Common Shares issued under Article IV shall, when
issued in accordance therewith, be validly issued, fully paid and
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nonassessable and no shareholder of IntraNet Solutions shall have any preemptive
right of subscription or purchase in respect thereof.
(f) Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement nor the consummation by IntraNet
Solutions and Merger Sub of the transactions contemplated hereby shall (i)
conflict with or result in any breach of any provision of the Articles of
Incorporation or By-Laws of IntraNet Solutions and Merger Sub; (ii) require any
consent, approval, authorization, or permit of, or filing with or notification
to, any governmental authority, except (A) filings by IntraNet Solutions under
the applicable requirements of the Securities Exchange Act, the Nasdaq Stock
Market, and the Securities Act and applicable state securities laws, and (B) the
filing of Articles of Merger under the WBCA and appropriate documents with the
relevant authorities of other states in which InfoAccess is authorized to do
business; (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, or acceleration or lien or other charge or
encumbrance) under, any of the terms, conditions, or provisions of any note,
license, agreement, or other instrument or obligation to which IntraNet
Solutions or Merger Sub or any of their assets may be bound, except for such
violations, breaches and defaults (or rights of termination, cancellation or
acceleration or lien or other charge or encumbrance) as to which requisite
waivers or consents have been obtained or such as would not have a material
adverse effect on IntraNet Solutions and its subsidiaries, taken as a whole; or
(iv) assuming the consents, approvals, authorizations or permits and filings or
notifications referred to in this Section 5.2(f) are duly and timely obtained or
made, violate any order, writ, injunction, decree, statute, rule, or regulation
applicable to IntraNet Solutions or Merger Sub or to any of their respective
assets.
(g) Ownership of Merger Sub; No Prior Activities; Assets
of Merger Sub.
(i) Merger Sub was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement.
(ii) As of the date of this Agreement and the Effective
Time, the capital stock of Merger Sub is and shall be owned 100% by
IntraNet Solutions directly. Further, there are not as of the date of
this Agreement and there shall not be at the Effective Time any
outstanding or authorized options, warrants, calls, rights,
commitments, or any other agreements of any character which Merger Sub
is a party to, or may be bound by, requiring it to issue, transfer,
sell, purchase, redeem, or acquire any shares of capital stock or any
securities or rights convertible into, exchangeable for, or evidencing
the right to subscribe for or acquire, any shares of capital stock of
Merger Sub.
(iii) As of the date of this Agreement and the Effective
Time, except for obligations or liabilities incurred in connection with
its incorporation or organization and the transactions contemplated
hereby, Merger Sub has not and shall not have incurred, directly or
indirectly through any subsidiary or affiliate, any obligations or
liabilities or engaged in any business or activities of any type
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or kind whatsoever or entered into any agreements or arrangements with
any person or entity.
(iv) IntraNet Solutions shall take all action necessary to
ensure that Merger Sub at no time prior to the Effective Time owns any
asset other than an amount of cash necessary to incorporate Merger Sub
and to pay the expenses of the Merger attributable to Merger Sub in
connection with the Merger.
(h) SEC Reports; Financial Statements; Capitalization.
(i) Since April 1, 1998, IntraNet Solutions has filed
with the Securities and Exchange Commission (the "SEC") all forms,
reports and documents (the "IntraNet Solutions SEC Reports") required
to be filed by it under the federal securities laws and the SEC rules
and regulations thereunder, all of which complied as to form in all
material respects with all applicable requirements of the Securities
Exchange Act. True and correct copies of the IntraNet Solutions SEC
Reports filed with the SEC since April 1, 1998 have been furnished to
InfoAccess and the Significant Shareholders. None of the IntraNet
Solutions SEC Reports, including without limitation any financial
statements or schedules included therein, at the time filed contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(ii) The consolidated balance sheets and the related
consolidated statements of operations, shareholders' equity (deficit)
and cash flows (including the related notes thereto) of IntraNet
Solutions included in the IntraNet Solutions SEC Reports complied as to
form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect
thereto, are in accordance with the books and records of IntraNet
Solutions, have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods
(except as otherwise noted therein), and present fairly the
consolidated financial position of IntraNet Solutions and its
consolidated subsidiaries as of their respective dates, and the
consolidated results of their operations and their cash flows for the
periods presented therein (subject, in the case of the unaudited
interim financial statements, to normal year-end adjustments).
(iii) On the date hereof, the authorized capital stock of
IntraNet Solutions consists of 25,000,000 shares of stock, of which,
21,249,343 shares have been designated as common stock, 550,350 shares
have been designated as preferred stock and 3,200,307 shares remain
undesignated. As of the date hereof, 15,091,747 shares of common stock
and no shares of preferred stock were issued and outstanding. As of the
date hereof, except for (A) employee stock options to purchase
1,861,734 IntraNet Solutions Common Shares, and (B)
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1,116,400 IntraNet Solutions Common Shares that may be issued upon
exercise of IntraNet Solutions outstanding common stock purchase
warrants, there are no outstanding subscriptions, contracts, conversion
privileges, options, warrants, calls, or other rights obligating
IntraNet Solutions to issue or sell any shares of capital stock of
IntraNet Solutions.
(i) Absence of Certain Changes or Events. Except as
disclosed in the IntraNet Solutions SEC Reports and except for the transactions
contemplated hereby, since June 30, 1999, the business of IntraNet Solutions has
been carried on only in the ordinary and usual course, and there has been no
material adverse change in the financial condition, operations, results of
operations, management, or business of IntraNet Solutions since June 30, 1999.
(j) Actions, Suits, Proceedings. The IntraNet Solutions
SEC Reports accurately disclose as of the date hereof all actions, claims,
suits, proceedings and governmental investigations pending or, to the best
knowledge of IntraNet Solutions, threatened, which are required to be disclosed
therein by the Securities Exchange Act or would reasonably be expected to have a
material adverse effect on the financial condition or results of operations of
IntraNet Solutions and its subsidiaries, taken as a whole.
(k) Full Disclosure. The representations and warranties
of IntraNet Solutions and Merger Sub contained in this Agreement or in any
certificate or other writing delivered by IntraNet Solutions or Merger Sub
pursuant hereto or in connection with the Merger do not contain any untrue
statement of a material fact, or, taken together, omit to state material fact
necessary in order to make the statements herein and therein, in light of the
circumstances under which they were made, not misleading.
(l) Information to InfoAccess Shareholders. The
information with respect to IntraNet Solutions contained in the Information
Statement (as defined in Section 6.9) will not, at the time it is mailed to
shareholders of InfoAccess, at the time of the InfoAccess shareholder meeting
convened to approve the Agreement and at the Effective Time, contain any untrue
statement of material fact or omit to state any material fact necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading.
(m) Pooling of Interests; Reorganization. To the best
knowledge of IntraNet Solutions after due investigation, neither IntraNet
Solutions nor any affiliate of IntraNet Solutions has (i) taken any action or
failed to take any action which action or failure would jeopardize treatment of
the Merger as a pooling of interests for accounting purposes or (ii) taken any
action or failed to take any action which action or failure would jeopardize the
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code.
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ARTICLE VI
CERTAIN COVENANTS
6.1 Conduct of InfoAccess' Business Pending the Merger. InfoAccess
warrants and agrees that from and after the date hereof to the Effective Time,
except for entering into this Agreement and consummating the transactions
expressly contemplated hereby or to the extent that IntraNet Solutions shall
otherwise consent in writing:
(a) InfoAccess shall operate its business substantially
as currently planned or operated and only in the ordinary course and, consistent
with such operation, it has and shall use its reasonable efforts to preserve
intact its present business organization and employees and its relationships
with persons having business relationships with it. InfoAccess shall maintain
its books and records during such period in a manner consistent with past
practice.
(b) No amendment shall be made to the Articles of
Incorporation or the By-Laws of InfoAccess.
(c) There shall be no changes in the number of shares,
par value or class of authorized or issued capital stock of InfoAccess (except
for the exercise, in accordance with the terms thereof, of employee stock
options and warrants outstanding on the date hereof). In addition, InfoAccess
shall not grant any option, warrant, convertible security, or other right to
acquire any shares of capital stock of InfoAccess.
(d) There shall not be any declaration or payment of any
dividend or other distribution in respect of the capital stock of InfoAccess.
(e) InfoAccess shall not (i) enter into any employment
contract or consulting agreement or make any offer of employment to any person
or offer to engage any person as a consultant, or (ii) increase the wages,
salary, fees, or other compensation of any person(s) presently employed or
rendering any service(s) to InfoAccess.
(f) Except in the ordinary course of business, InfoAccess
shall not materially amend or renew, or waive or release any rights of material
value under, any Listed Contract or enter into any contract that would have been
a Listed Contract had it been in effect at the date hereof.
(g) InfoAccess shall not commit itself to any of the
foregoing.
6.2 Books and Records; Access and Information. From the date of
this Agreement until the Effective Time, InfoAccess shall give to IntraNet
Solutions, its officers and representatives reasonable access to the premises,
books, and records of InfoAccess, and provide IntraNet Solutions with such
financial and operating data and other information with respect to its business
and properties as it shall from time to time reasonably request, including,
without limitation, all interim financial data as soon as it becomes available;
provided, however,
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that any such investigation shall be conducted in such manner as not to
interfere unreasonably with the operation of the business of InfoAccess.
6.3 Notification of Certain Matters. Subsequent to the date of
this Agreement and on or prior to the Effective Time, InfoAccess and IntraNet
Solutions shall each promptly notify the other of:
(a) the receipt of any notice of, or other communication
relating to, a default or event that, with notice or lapse of time or both,
would become a default, under any material agreement to which it is a party or
to which it or any of its respective material properties or assets may be
subject or bound;
(b) the receipt of any notice or other communication from
any third party whose consent or approval is or may be required in connection
with the transactions contemplated by this Agreement, denying or threatening to
deny such consent or approval;
(c) the receipt of any notice or other communication from
any governmental regulatory agency or authority in connection with the
transactions contemplated hereby;
(d) any material adverse change in its consolidated
business, consolidated financial condition, operating results, assets, business
prospects, management, employee relations, or customer relations, or the
occurrence of an event or development that, so far as reasonably can be foreseen
at the time of its occurrence, would reasonably be expected to result in any
such change; or
(e) any condition or fact that would not permit it to
satisfy a condition to the other's obligation to effect the transactions
contemplated hereby, including the Merger.
6.4 Tax Distributions. InfoAccess shall make no income tax related
distributions to shareholders with respect to their ownership of InfoAccess
Shares in cash on or before the Closing.
6.5 Outstanding InfoAccess Stock Options and Warrants. Schedule
6.5 lists each outstanding option and warrant to purchase InfoAccess Shares,
identifying the holder of such option or warrant, the number of shares, exercise
price, date of grant, whether the option is an incentive or non-qualified stock
option, and vesting schedule related thereto. As of the Effective Time, IntraNet
Solutions shall adopt the 1990 Amended and Restated Stock Option Plan and the
1995 Stock Option Plan of InfoAccess (collectively, the "InfoAccess Option
Plan") and shall become the "Company" as defined in the InfoAccess Option Plan.
As of the Effective Time, IntraNet Solutions shall issue a substitute warrant or
a substitute stock option, pursuant to the InfoAccess Option Plan, for each such
outstanding warrant or option, such substitute warrant or option to evidence the
right to purchase a number of IntraNet Solutions Common Shares (decreased to the
nearest whole share) equal to the number of IntraNet Solutions Common Shares
that the warrant holder or optionee would have been entitled to receive upon the
Merger had such warrant holder or optionee exercised the warrant or option in
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full immediately prior to the Effective Time (irrespective of whether such
warrant or option was then immediately exercisable), at a price per share
(increased to the nearest whole cent) determined by dividing (a) the exercise
price per share applicable to the InfoAccess Shares subject to such warrant or
option immediately prior to the Effective Time by (b) 0.31230. The terms and
conditions of such options to purchase IntraNet Solutions Common Shares shall be
in all material respects the same as the terms and conditions of such options to
purchase InfoAccess Shares for which they were substituted, except that the
period during which an option may be exercised following termination of
employment shall be six months in order to conform with the terms of the
IntraNet Solutions 1994-1997 Stock Option Plan, as implemented. The options
identified on Schedule 6.5 as incentive stock options shall be substituted with
incentive stock options to purchase IntraNet Solutions Common Shares, and the
options identified on Schedule 6.5 as non-qualified stock options shall be
substituted with non-qualified stock options to purchase IntraNet Solutions
Common Shares. In connection with the issuance of such options to purchase
IntraNet Solutions Common Shares, IntraNet Solutions is relying solely upon
InfoAccess' representations in Schedule 6.5 as to whether or not the listed
options qualify as incentive stock options and IntraNet Solutions shall not be
responsible to the optionee or anyone else if such determination is alleged or
proves to be incorrect. As soon as reasonably practicable after the Effective
Time, IntraNet Solutions shall prepare and file with the SEC a Registration
Statement on Form S-8 with respect to the IntraNet Solutions Common Shares
issuable upon exercise of such substitute options.
6.6 Grant of New Stock Options. Employees of InfoAccess shall,
from and after the Effective Time, be eligible to receive options pursuant to
the InfoAccess Option Plan or 1994-1997 Stock Option and Compensation Plan of
IntraNet Solutions which, upon grant, shall be evidenced by a written stock
option agreement, substantially in the form heretofore employed by IntraNet
Solutions, stating the terms and conditions thereof.
6.7 Compliance with Rule 144. From the date hereof, IntraNet
Solutions shall timely prepare and file all documents required to be filed with
any governmental authority, and provide any information to the Holdback
Shareholders or their representatives as shall be necessary to enable them to
sell unregistered IntraNet Solutions Common Shares in accordance with Rule 144
under the Securities Act (or any successor rule or regulation adopted by the SEC
for the same general purpose), including the applicable holding period
requirements.
6.8 Custodian Agreement. For purposes of Article VIII, the parties
hereto, and each other holder of InfoAccess Shares immediately prior to the
Effective Time, will, at or prior to the Effective Time, enter into the
Custodian Agreement substantially in the form attached hereto as Exhibit A. The
Custodian Agreement will designate Norwest Bank Minnesota, National Association,
as the initial custodian thereunder (the "Custodian"), to whom IntraNet
Solutions Common Shares constituting a portion of the Merger Consideration will
be issued in its capacity as such custodian under Section 4.5.
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6.9 Approval of InfoAccess Shareholders; Information Statement.
(a) InfoAccess will (i) take all steps necessary to duly
call, give notice of, convene and hold a meeting of its shareholders as soon as
practicable for the purpose of adopting and approving this Agreement and the
transactions contemplated hereby and for such other purposes as may be necessary
or desirable, (ii) recommend to its shareholders approval of this Agreement and
the transactions contemplated hereby, and (iii) use its best efforts to obtain
the necessary approval. In connection with such meeting of shareholders,
InfoAccess will undertake to submit to its shareholders, in such form mutually
agreed to by IntraNet Solutions and InfoAccess, an information statement
containing information regarding InfoAccess, IntraNet Solutions and the Merger
(the "Information Statement"). The parties contemplate that such Information
Statement will contain the information required under Rule 502 of the Securities
Act.
(b) Each of the Significant Shareholders shall vote all
of their InfoAccess Shares for approval of this Agreement and the transactions
contemplated hereby.
6.10 No Solicitation. Prior to the Effective Time, InfoAccess will
not (nor will InfoAccess permit any of its officers, directors, agents,
representatives, or affiliates to), directly or indirectly, take any of the
following actions with any party other than IntraNet Solutions and its
designees:
(a) solicit, encourage, initiate, or, except actions
which InfoAccess' Board of Directors determines in good faith, based upon the
advice of outside legal counsel, are required pursuant to its fiduciary duties
under applicable law, participate in any negotiations or discussions with
respect to, any offer or proposal to acquire all or substantially all of
InfoAccess' business, assets, or properties, or to purchase or acquire capital
stock of InfoAccess whether by merger, purchase of assets, tender offer, or
otherwise (an "Acquisition");
(b) except actions which InfoAccess' Board of Directors
determines in good faith, based upon the advice of outside legal counsel, are
required pursuant to its fiduciary duties under applicable law, disclose any
information not customarily disclosed to any person other than its attorneys or
financial advisors concerning InfoAccess' business and properties or afford to
any person or entity access to its properties, books or records; or
(c) except actions which InfoAccess' Board of Directors
determines in good faith, based upon the advice of outside legal counsel, are
required pursuant to its fiduciary duties under applicable law, assist or
cooperate with any person to make any proposal to consummate a transaction of
the type referred to in clause (a) above.
In the event InfoAccess shall receive any such written offer or
proposal, directly or indirectly, of the type referred to in clause (a) or (c)
above, or any request for disclosure or access pursuant to clause (b) above,
InfoAccess shall immediately inform IntraNet Solutions in writing as to all
material facts relating to any such offer or proposal (including the identity
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of the party making such offer or proposal and the specific terms thereof) and
will cooperate with IntraNet Solutions by furnishing any information it may
reasonably request.
6.11 Good Faith Efforts; Cooperation. The parties hereto shall in
good faith undertake to perform their obligations under this Agreement, to
satisfy all conditions to the obligations of the parties under this Agreement,
and to cause the Merger to be carried out promptly in accordance with the terms
hereof. InfoAccess shall promptly seek and use its best efforts to obtain any
required consents to the Merger under the agreements listed in "Schedule 5.1,
InfoAccess Schedule of Exceptions"; and InfoAccess shall keep IntraNet Solutions
informed of its progress in obtaining such consents, including notifying
IntraNet Solutions promptly if any party to such agreements has indicated its
unwillingness to provide a consent. Each party shall do such things as may be
reasonably requested by the other parties hereto in order more effectively to
consummate or document the Merger and the other transactions contemplated by
this Agreement. The parties shall cooperate fully with each other in connection
with any steps required to be taken as part of their respective obligations
under this Agreement.
6.12 Employee Plans. Subject to compliance with pooling of interest
accounting treatment of the Merger, IntraNet Solutions shall take such
reasonable actions as are necessary to allow those persons who are employees of
InfoAccess as of the Effective Time to participate in IntraNet Solutions'
employee benefit plans, as in effect from time to time, subject to any
eligibility requirements applicable to such plans, with full credit for years of
past service to InfoAccess for the purpose of satisfying any eligibility and
vesting periods and any other requirements with respect to entitlement to
benefits applicable to such plans.
6.13 Confidentiality. The parties acknowledge that IntraNet
Solutions and InfoAccess have previously executed a Confidentiality Agreement
dated August 27, 1999 (the "Confidentiality Agreement"), which shall continue in
full force and effect in accordance with its terms.
6.14 Public Disclosure. Unless otherwise required by law, prior to
the Effective Time no disclosure (whether or not in response to an inquiry)
regarding the terms of this Agreement and the transactions contemplated hereby
shall be made by any party hereto unless approved by IntraNet Solutions and
InfoAccess prior to release, provided that such approval shall not be
unreasonably withheld, and subject, in the case of IntraNet Solutions, to
IntraNet Solutions' obligation to comply with applicable securities laws.
6.15 Pooling Accounting. During the period from the date of this
Agreement through the Effective Time, unless the other parties hereto shall
otherwise agree in writing, none of IntraNet Solutions, Merger Sub, InfoAccess,
or the Significant Shareholders shall knowingly take or fail to take any action
which action or failure would jeopardize the treatment of the Merger as a
pooling of interests for accounting purposes.
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6.16 FIRPTA. InfoAccess shall deliver to the Internal Revenue
Service a notice that the InfoAccess Shares are not a "U.S. Real Property
Interest" as defined in and in accordance with the requirements of Treasury
Regulation Section 1.897-2(h)(2).
6.17 Blue Sky Laws. IntraNet Solutions shall take such steps as may
be necessary to comply with the securities and blue sky laws of all
jurisdictions which are applicable to the issuance of the IntraNet Solutions
Common Shares pursuant hereto. InfoAccess shall use its best efforts to assist
IntraNet Solutions as may be necessary to comply with the securities and blue
sky laws of all jurisdictions which are applicable in connection with the
issuance of IntraNet Solutions Common Shares pursuant hereto.
6.18 Tax-Free Reorganization. During the period from the date of
this Agreement through the Effective Time, unless the other parties hereto shall
otherwise agree in writing, none of IntraNet Solutions, Merger Sub, InfoAccess
or the Significant Shareholders shall knowingly take or fail to take any action
which action or failure would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code.
6.19 State Takeover Laws. If any state takeover law shall become
applicable to the transactions contemplated hereby, IntraNet Solutions and
InfoAccess and their respective Boards of Directors shall use their reasonable
best efforts to grant such approvals and to take such other actions as are
necessary so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and shall otherwise act
to eliminate the effects of any such statute or regulation on the transactions
contemplated hereby.
6.20 Affiliate Agreements.
(a) InfoAccess Affiliates. Schedule 6.20 sets forth those
persons who are, in InfoAccess' reasonable judgment, "affiliates" of InfoAccess
within the meaning of Rule 144 (each such person who is an "affiliate" of
InfoAccess within the meaning of Rule 144 is referred to as an "Affiliate")
promulgated under the Securities Act. InfoAccess shall provide IntraNet
Solutions such information and documents as IntraNet Solutions shall reasonably
request for purposes of reviewing such list. InfoAccess shall use its best
efforts to deliver or cause to be delivered to IntraNet Solutions, concurrently
with the execution of this Agreement (and in each case prior to the Effective
Time) from each of the Affiliates of InfoAccess an executed Affiliate Agreement
in the form attached hereto as Exhibit B. IntraNet Solutions shall be entitled
to place appropriate legends on the certificates evidencing any IntraNet
Solutions Common Shares to be received by such Affiliates pursuant to the terms
of this Agreement, and to issue appropriate stop transfer instructions to the
transfer agent for IntraNet Solutions Common Shares, consistent with the terms
of such Affiliate Agreements.
(b) IntraNet Solutions Affiliates. IntraNet Solutions shall
use its best efforts to obtain, prior to the Effective Time, from each of the
Affiliates of IntraNet Solutions
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an executed agreement from such Affiliate to the effect that such Affiliate
will not sell, offer to sell, solicit an offer to buy, contract to sell, grant
any option to purchase or otherwise transfer or dispose of any IntraNet
Solutions Common Shares or any securities convertible into or exercisable or
exchangeable for IntraNet Solutions Common Shares, or reduce such Affiliate's
risk relating thereto in any other way, for a period beginning on the Closing
Date and ending at such time as IntraNet Solutions has published financial
results covering at least 30 days of combined operations of IntraNet Solutions,
Merger Sub and InfoAccess after the Merger becomes effective.
6.21 Nasdaq Listing. IntraNet Solutions will file an application for
listing of additional shares in accordance with the rules of the Nasdaq Stock
Market in order to have the IntraNet Solutions Common Shares constituting the
Merger Consideration and the IntraNet Solutions Common Shares covered by the
substitute options referred to in Section 6.5 approved for listing on the Nasdaq
National Market and will use its best efforts to have such application approved
by the Nasdaq Stock Market prior to the Closing.
6.22 Registration Requirements.
(a) Required Registration. Following the Closing, and to
facilitate resale of the IntraNet Solutions Common Shares constituting the
Merger Consideration (the "Registrable Shares") by the shareholders of
InfoAccess receiving Registrable Shares as a result of the Merger (the "Selling
Shareholders") to the public following the Closing, IntraNet Solutions shall use
its reasonable best efforts to prepare and file, and cause to become effective
on or prior to February 14, 2000, a registration statement under the Securities
Act covering all of the Registrable Shares and shall use its reasonable best
efforts to cause such registration statement to become effective. Such
registration statement shall be on Form S-3 or any successor form promulgated by
the SEC. In the event that IntraNet Solutions shall not be eligible to use Form
S-3, IntraNet Solutions shall be obligated to prepare, file and cause to become
effective such registration statement on Form S-1, S-2, or other applicable form
or any other successor form promulgated by the SEC at IntraNet Solutions'
election, in which case references herein to "Form S-3" shall be deemed to refer
to such other form. In IntraNet Solutions' sole discretion, such registration
statement may include IntraNet Solutions Common Shares held by other
shareholders of IntraNet Solutions.
(b) Registration Procedures. IntraNet Solutions will use
its reasonable best efforts to:
(i) prepare and file with the SEC such registration statement
as set forth above, and use its reasonable best efforts to cause such
registration statement to become and remain effective until the earlier
of one year from the date upon which such registration statement is
declared effective by the SEC or the date that all Registrable Shares
registered on such registration statement have been sold by the Selling
Shareholders;
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(ii) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectuses contained
therein as may be necessary to keep such registration statements
effective for the period described in clause (i) above;
(iii) notify the Selling Shareholders as to the filing of such
registration statement and of all amendments or supplements thereto;
(iv) subject to Section 6.22(f) hereof, prepare promptly upon
request of the Selling Shareholders or any underwriter for the Selling
Shareholders, during the period during which IntraNet Solutions is
obligated to keep such registration statement effective, such amendment
or amendments to such registration statement and such prospectus or
prospectuses as may be reasonably necessary to permit compliance with
the requirements of Section 10(a)(3) of the Securities Act;
(v) furnish the Selling Shareholders with copies of such
opinions of counsel and accountants' "comfort" letters as they
reasonably may request with respect to the registration of the
Registrable Shares, any registration statement covering the Registrable
Shares and the financial statements included therein;
(vi) in connection with the preparation and filing of such
registration statement, give the Selling Shareholders and any
underwriter, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the SEC, and
each amendment thereof or supplement thereto, and will give each of
them such access to its books and records and such opportunities to
discuss the business of IntraNet Solutions with its officers and the
independent accountants who have certified its financial statements as
shall be necessary, in the opinion of the Selling Shareholders and such
underwriters, or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act;
(vii) subject to Section 6.22(f) hereof, prepare and promptly
file with the SEC and promptly notify the Selling Shareholders of the
filing of any amendments or supplements to such registration statement
or prospectus as may be necessary to correct any statements or
omissions if, at any time when a prospectus relating to the Registrable
Shares is required to be delivered under the Securities Act, any event
with respect to IntraNet Solutions shall have occurred as a result of
which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading;
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(viii) furnish to the Selling Shareholders and to the
underwriters, if any, of the Registrable Shares to be registered such
reasonable number of copies of such registration statement, preliminary
prospectus, final prospectus, prospectus supplements and such other
documents as the Selling Shareholders or such underwriters may
reasonably request in order to facilitate the public offering of the
Registrable Shares;
(ix) register or qualify the Registrable Shares covered by
such registration statement under such state securities or blue sky
laws of such jurisdictions as the Selling Shareholders may reasonably
request in writing, except that IntraNet Solutions shall not for any
purpose be required to execute a general consent to service of process
or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(x) notify the Selling Shareholders, promptly after it shall
receive notice thereof, of the time when such registration statement
has become effective;
(xi) notify the Selling Shareholders promptly of any request
by the SEC for the amending or supplementing of such registration
statement or prospectus or for additional information;
(xii) subject to Section 6.22(f) hereof, prepare and file with
the SEC, promptly upon the request of the Selling Shareholders or any
underwriter, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for the
Selling Shareholders (and concurred in by counsel for IntraNet
Solutions), is required or advisable under the Securities Act in
connection with the distribution of the Registrable Shares by the
Selling Shareholders;
(xiii) advise the Selling Shareholders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop
order by the SEC suspending the effectiveness of such registration
statement or any amendment thereto or the initiation or threatening of
any proceeding for that purpose and promptly use its reasonable best
efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and
(xiv) not file any amendment or supplement to such registration
statement or prospectus to which the Selling Shareholders shall have
reasonably objected on the grounds that such amendment or supplement
does not comply in all material respects with the requirements of the
Securities Act, after having been furnished with a copy thereof at
least five business days prior to the filing thereof, unless in the
opinion of counsel for IntraNet Solutions the filing of such amendment
or supplement is reasonably necessary
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to protect IntraNet Solutions from any liabilities under any applicable
federal or state law and such filing will not violate applicable law.
(c) Expenses. With respect to such registration, IntraNet
Solutions shall bear the following fees, costs and expenses: all registration,
filing and National Association of Securities Dealers, Inc. fees, printing
expenses, fees and disbursements of counsel and accountants for IntraNet
Solutions, all internal IntraNet Solutions expenses, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the Registrable Shares are to be registered
or qualified. Fees and disbursements of counsel and accountants for the Selling
Shareholders, as the selling security holders, underwriting discounts and
commissions and transfer taxes and any other expenses incurred by the Selling
Shareholders not expressly included above shall be borne by the Selling
Shareholders.
(d) Indemnification. With respect to such registration:
(i) IntraNet Solutions will indemnify and hold harmless the
Selling Shareholders, and any underwriter (as defined in the Securities
Act) for the Selling Shareholders and each person, if any, who controls
the Selling Shareholders or such underwriter within the meaning of the
Securities Act, from and against, and will reimburse the Selling
Shareholders and each such underwriter and controlling person with
respect to, any and all loss, damage, liability, cost, or expense
(including legal fees) to which the Selling Shareholders or any such
underwriter or controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
damages, liabilities, costs, or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in
such registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
or any violation or alleged violation by IntraNet Solutions of the
Securities Act, the Exchange Act, any state securities law or any
regulation promulgated under the Securities Act, the Exchange Act or
any state securities law; provided, however, that IntraNet Solutions
will not be liable in any such case to the extent that any such loss,
damage, liability, cost, or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any
Selling Shareholder, underwriter or such controlling person in writing
specifically for use in the preparation thereof.
(ii) Each Selling Shareholder, severally and not jointly, will
indemnify and hold harmless IntraNet Solutions, its directors and
officers, any controlling person and any underwriter from and against,
and will reimburse IntraNet Solutions, its directors and officers, any
controlling person and any
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underwriter with respect to, any and all loss, damage, liability, cost
or expense (including legal fees) to which IntraNet Solutions or any
controlling person and/or any director, officer, or underwriter may
become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, damages, liabilities, costs, or expenses are
caused by any untrue or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained
therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was so made in reliance upon and in strict
conformity with written information furnished by such Selling
Shareholder specifically for use in the preparation thereof.
Notwithstanding the provisions of this Section 6.22(d)(ii), no Selling
Shareholder shall be required to indemnify IntraNet Solutions, its
directors and officers, any controlling person and any underwriter in
an amount in excess of the total price received by such Selling
Shareholder upon the sale of Registrable Shares pursuant to such
registration statement.
(iii) Promptly after receipt by an indemnified party pursuant
to the provisions of paragraph (i) or (ii) of this Section 6.22(d) of
notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions, such indemnified party shall, if
a claim thereof is to be made against an indemnifying party pursuant to
the provisions of said paragraphs (i) or (ii), notify such indemnifying
party of the commencement thereof; but the omission to so notify such
indemnifying party will not relieve it from any liability which it may
have to the indemnified party hereunder except to the extent that the
indemnifying party was prejudiced by such failure to so notify. In case
such action is brought against an indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
shall have the right to participate in, and, to the extent that it may
wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, if the
defendants in any action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it which are
different from or additional to those available to the indemnifying
party, or if there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the
indemnified party, the indemnified party shall have the right to select
separate counsel to participate in the defense of such action on behalf
of such indemnified party. After notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to the indemnified
party pursuant to the provisions of said paragraph (i) or (ii) for any
legal or other expense subsequently incurred by such indemnified party
in connection with the defense
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thereof other than reasonable costs of investigation, unless (A) the
indemnified party shall have employed counsel in accordance with the
proviso of the preceding sentence, (B) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after the
notice of the commencement of the action, or (C) the indemnifying party
has authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent
of each indemnified party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the release from all liability in respect to such claim or
litigation.
(e) Contribution.
(i) If the indemnification provided for in Section 6.22(d)
from the indemnifying party is unavailable to or unenforceable by the
indemnified party in respect to any losses, claims, damages,
liabilities, or expenses referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute
to the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, liabilities, or expenses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified party in connection with the actions
which resulted in such losses, claims, damages, liabilities, or
expenses, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall
be determined by reference to, among other things, whether any action
in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact,
has been made by, or relates to information supplied by, such
indemnifying party or indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth
in Section 6.22(d), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding.
(ii) IntraNet Solutions and InfoAccess agree that it would not
be just and equitable if contribution pursuant to this Section 6.22(e)
were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to in Section 6.22(e)(i). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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(iii) If indemnification is available under Section 6.22(e),
the indemnifying party shall indemnify each indemnified party to the
full extent provided in Section 6.22(e) without regard to the relative
fault of the indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 6.22(e).
(f) Right to Suspend Sales. IntraNet Solutions may suspend
sales of Registrable Shares under such registration statement for a limited
time, which in no event shall be longer than 90 days, if (a) such sales would
materially adversely affect, or would be improper in view of (or improper
without disclosure in a prospectus or other filing with the SEC), a proposed
financing, reorganization, recapitalization, merger, acquisition, consolidation,
or similar transaction or other development involving or with respect to
IntraNet Solutions (including, without limitation, through the premature
disclosure thereof) or (b) IntraNet Solutions is conducting a public offering of
capital stock (including during the effectiveness of any registration statement
pertaining thereto) and the managing underwriter concludes in its reasonable
judgment that sales of Registrable Shares held by the Selling Shareholders would
materially adversely affect the success of the offering. IntraNet Solutions will
promptly notify the Selling Shareholders any time sales of Registrable Shares
under such registration statement are suspended and will promptly notify the
Selling Shareholders of the termination of any such suspension.
6.23 Payment of Certain Obligations. IntraNet Solutions shall
cause to be paid (i) at the Closing, the unpaid principal balance of the
Promissory Note, dated May 8, 1999 due to the Culbertson Family Trust, together
with any accrued and unpaid interest thereon, (ii) within thirty days after
Closing, to each employee of InfoAccess, the amount of accrued salary payable,
if any, to such employee as of the Closing Date and (iii) within 30 days after
the Closing Date, to each employee of InfoAccess the amount, based on the
employee's ordinary wage rate or salary expressed as an hourly rate based on a
year consisting of 2,080 working hours, of the employee's accrued vacation and
personal days in excess of 40 hours, if any, as of the Closing Date.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligation of IntraNet Solutions and Merger Sub
to Close. The obligation of IntraNet Solutions and Merger Sub to effect the
closing of the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver by IntraNet Solutions) prior to or at the Closing of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of InfoAccess contained in this Agreement shall have been true and
correct in all material respects as of the date hereof. In addition, except as
required by the express terms of this Agreement or otherwise consented to in
writing by IntraNet Solutions, all representations and warranties of InfoAccess
contained in this Agreement shall be true and correct on the Closing Date with
the
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same effect as though made at and as of such date, unless the aggregate effect
of such representations and warranties that are not true and correct would not
have a material adverse effect on the financial condition, business, assets, or
results of operations of InfoAccess.
(b) Observance and Performance. InfoAccess and the
Significant Shareholders shall have performed and complied with all covenants
and agreements required by this Agreement to be performed and complied with by
them prior to or as of the Closing Date.
(c) No Adverse Change. There shall have occurred no material
adverse change in the business, financial condition, management, or results of
operations of InfoAccess since the Balance Sheet Date that shall have not been
cured to IntraNet Solutions' reasonable satisfaction.
(d) Officers' Certificate. InfoAccess shall have delivered to
IntraNet Solutions a certificate, dated the Closing Date, executed by the
President and the Treasurer of InfoAccess and certifying to the satisfaction of
the conditions specified in Sections 7.1(a), (b) and (c) of this Agreement,
insofar as they relate to InfoAccess.
(e) Certificate of Significant Shareholders. The Significant
Shareholders shall have delivered to IntraNet Solutions a certificate or
certificates, dated the Closing Date, executed by each of the Significant
Shareholders, and certifying to the satisfaction of the conditions specified in
Section 7.1(b) of this Agreement, insofar as they relate to the Significant
Shareholders.
(f) Legal Opinion. IntraNet Solutions shall have received an
opinion, dated the Closing Date, from Perkins Coie LLP, counsel to InfoAccess,
substantially in the form attached hereto as Exhibit C.
(g) Custodian Agreement. The Custodian Agreement shall
have been executed and delivered by all parties thereto.
(h) Employment Agreements. Each of Messrs. Culbertson and
Freeman shall have entered into an employment agreement with IntraNet Solutions
in the forms attached hereto as Exhibit D-1 and D-2, respectively, with such
changes thereto as may be mutually acceptable to such individuals, respectively,
and IntraNet Solutions.
(i) No Legal Actions. No court or governmental authority
shall have issued an order, not subsequently vacated, restraining, enjoining, or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement, and no person, firm, corporation, or governmental agency shall have
instituted an action or proceeding (other than an action or proceeding commenced
or induced by IntraNet Solutions in an effort to terminate or restrain
performance under this Agreement) which shall not have been previously dismissed
seeking to restrain, enjoin, or prohibit the consummation of the transactions
contemplated by this Agreement or seeking damages with respect thereto.
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(j) Shareholder Approval; Dissenting Shares. This Agreement
and the transactions contemplated hereby shall have been duly and validly
approved by the shareholders of InfoAccess in accordance with all applicable
requirements. Holders of no more than five percent of the outstanding InfoAccess
Shares shall have given notice of intent to demand the fair value of their
InfoAccess Shares in connection with the Merger in accordance with the WBCA.
(k) Investment Letters. Each of the InfoAccess shareholders
shall have delivered to IntraNet Solutions a letter in the form of Exhibit E
hereto (and completed all attachments). Such completed investment letters shall
disclose that of the holders of InfoAccess Shares at the Effective Time there
are no more than 35 non-accredited purchasers (as calculated in accordance with
Rule 501(e) under the Securities Act). In addition, each such holder who is not
an accredited investor shall have demonstrated to IntraNet Solutions' reasonable
satisfaction that he or she has such knowledge or experience in financial or
business matters that he or she is capable of evaluating the merits and risks of
the investment in IntraNet Solutions Common Shares or shall have duly appointed
a purchaser representative (as defined under Rule 501(h) of the Securities Act)
with such financial and business acumen.
(l) Affiliate Agreements. IntraNet Solutions shall have
received from each of the Affiliates of InfoAccess and IntraNet Solutions an
executed agreement as specified in Section 6.20.
(m) Termination of Shareholder Agreements. All agreements
between InfoAccess and any of its shareholders that grant certain registration,
voting, right of first refusal, or other similar rights to such shareholders,
and where such rights would otherwise survive the Merger, shall have been
terminated.
(n) Pooling Report. IntraNet Solutions shall have
received a report from Grant Thornton LLP, in form and substance reasonably
satisfactory to IntraNet Solutions, reconfirming, as of the Effective Time, its
belief provided as of the date hereof that, based on such procedures as were
deemed relevant, the Merger will qualify as a pooling of interests under
generally accepted accounting principles.
(o) Audit. Grant Thornton LLP shall have completed an
audit of the financial statements of InfoAccess as of December 31, 1997 and 1998
and for the two years ended December 31, 1998, and shall have delivered its
report thereon to IntraNet Solutions (the "Grant Thornton Audit"). The results
of the Grant Thornton Audit shall not have required any material changes, except
as identified on Schedule 7.1(o) hereto, from the financial statements as of
December 31, 1997 and 1998 and for the two years ended December 31, 1998 as
reviewed and reported on by Clark & Associates, P.S. heretofore presented by
InfoAccess to IntraNet Solutions, including the audited financial statements
attached hereto as part of Schedule 5.1(m).
(p) Accounting Review. Grant Thornton LLP shall have
completed a review by September 27, 1999, in accordance with the statements on
standards for accounting and review services issued by the American Institute of
Certified Public Accountants, of the balance
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sheet of InfoAccess as of June 30, 1999 and the statement of operations for the
six months then ended and the results of such review shall not have required any
material changes to such financial statements except as are consistent with the
changes identified on Schedule 7.1(a) attached hereto. If such review has not
been completed by September 27, 1999 this condition shall be deemed to be
waived.
(q) Review of Source Codes. IntraNet Solutions shall have
completed by September 27, 1999, to its reasonable satisfaction, its review of
the source codes of InfoAccess' software products and applications. If such
review has not been completed by September 27, 1999 this condition shall be
deemed to be waived.
(r) Expenses of InfoAccess. The costs and expenses of
InfoAccess incurred in connection with this Agreement and the transactions
contemplated by this Agreement (including, without limitation, legal,
accounting, investment advisor and investment banking fees and expenses) shall
not exceed $750,000.
(s) 401(k) Plan. InfoAccess shall have amended its 401(k)
plan to limit the class of eligible employees to InfoAcess' employees or
otherwise convert such plan into a non-standardized plan.
7.2 Conditions to Obligation of InfoAccess and Significant Shareholders
to Close. The obligation of InfoAccess and the Significant Shareholders to
effect the closing of the transactions contemplated by this Agreement is subject
to the satisfaction (or waiver by InfoAccess and the Significant Shareholders)
prior to or at the Closing of the following conditions:
(a) Representations and Warranties. The representations and
warranties of IntraNet Solutions and Merger Sub contained in this Agreement
shall have been true and correct in all material respects as of the date hereof.
In addition, all such representations and warranties shall be true and correct
on the Closing Date with the same effect as though made on and as of such date,
unless the aggregate effect of such representations and warranties which are not
true and correct would not have a material adverse effect on the financial
condition, business, assets, or results of operations of IntraNet Solutions and
its subsidiaries, taken as a whole.
(b) Observance and Performance. IntraNet Solutions and Merger
Sub shall have performed and complied with all covenants and agreements required
by this Agreement to be performed and complied with by them prior to or as of
the Closing Date.
(c) No Adverse Change. There shall have occurred no material
adverse change in the business, financial condition, management, or results of
operations of IntraNet Solutions and its subsidiaries, taken as a whole, since
June 30, 1999 that shall have not been cured to InfoAccess' reasonable
satisfaction.
(d) Officers' Certificate. IntraNet Solutions shall have
delivered to InfoAccess and the Significant Shareholders a certificate, dated
the Closing Date, executed by
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the President and the Treasurer of IntraNet Solutions and certifying to the
satisfaction of the conditions specified in Sections 7.2(a), (b) and (c) hereof.
(e) Legal Opinion. InfoAccess and the Significant Shareholders
shall have received an opinion, dated the Closing Date, from Faegre & Benson
LLP, counsel to IntraNet Solutions and Merger Sub, substantially in the form
attached hereto as Exhibit F.
(f) Custodian Agreement. The Custodian Agreement shall have
been executed and delivered by all parties thereto.
(g) Employment Agreements. IntraNet Solutions shall have
entered into an employment agreement with each of Messrs. Culbertson and Freeman
in the forms attached hereto as of Exhibit D-1 and D-2, respectively, with such
changes thereto as may be mutually acceptable to such individuals, respectively,
and IntraNet Solutions.
(h) Grant of Options. The Board of Directors of IntraNet
Solutions or a duly authorized committee thereof shall have approved the option
grants to InfoAccess employees contemplated in Section 6.5.
(i) No Legal Actions. No court or governmental authority shall
have issued an order, not subsequently vacated, restraining, enjoining, or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement, and no person, firm, corporation, or governmental agency shall have
instituted an action or proceeding (other than an action or proceeding commenced
or induced by InfoAccess or the Significant Shareholders in an effort to
terminate or restrain performance under this Agreement) which shall not have
been previously dismissed seeking to restrain, enjoin, or prohibit the
consummation of the transactions contemplated by this Agreement or seeking
damages with respect thereto.
(j) Shareholder Approval. This Agreement and the
transactions contemplated hereby shall have been duly and validly approved by
the shareholders of InfoAccess in accordance with all applicable requirements.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Holdback Shareholders. Subject to the limitations
set forth in the Custodian Agreement and Section 8.4 and Section 10.1, each of
the Holdback Shareholders, by executing the Custodian Agreement, shall severally
and jointly indemnify and hold harmless IntraNet Solutions and its officers,
directors, and affiliates from and after the Effective Time against and with
respect to:
(a) any and all loss, injury, damage, or deficiency resulting
from any misrepresentation or breach of warranty on the part of InfoAccess or
the Significant Shareholders under this Agreement;
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(b) any and all loss, injury, damage, or deficiency resulting
from any non-fulfillment of any covenant or agreement on the part of InfoAccess
under this Agreement; and
(c) any and all demands, claims, actions, suits, or
proceedings, assessments, judgments, costs and legal and other expenses incident
to any of the foregoing.
8.2 Indemnification by IntraNet Solutions. IntraNet Solutions shall
indemnify and hold harmless each of the Holdback Shareholders at all times from
and after the Effective Time against and with respect to:
(a) any and all loss, injury, damage, or deficiency resulting
from any misrepresentation or breach of warranty on the part of IntraNet
Solutions or Merger Sub under this Agreement;
(b) any and all loss, injury, damage, or deficiency resulting
from any non-fulfillment of any covenant or agreement on the part of IntraNet
Solutions or Merger Sub under this Agreement; and
(c) any and all demands, claims, actions, suits, or
proceedings, assessments, judgments, costs and legal and other expenses incident
to any of the foregoing.
8.3 Procedures for Indemnification. Promptly after receipt by an
indemnified party pursuant to the provisions of Section 8.1 or 8.2 of notice of
the commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party shall, if a claim thereof is to be
made against an indemnifying party pursuant to the provisions of Section 8.1 or
8.2, notify such indemnifying party of the commencement thereof; but the
omission to so notify such indemnifying party will not relieve it from any
liability which it may have to the indemnified party hereunder except to the
extent that the indemnifying party was prejudiced by such failure to so notify.
In case such action is brought against an indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it which
are different from or additional to those available to the indemnifying party,
or if there is a conflict of interest which would prevent counsel for the
indemnifying party from also representing the indemnified party, the indemnified
party shall have the right to select separate counsel to participate in the
defense of such action on behalf of such indemnified party. After notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to the
indemnified party pursuant to the provisions of such Section 8.1 or 8.2 for any
legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (a) the indemnified party shall have employed counsel in
accordance with the proviso of the preceding sentence, (b) the
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indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after the notice of the commencement of the action, or (c) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. No indemnifying party, in the defense of any
such claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the release from all liability in
respect to such claim or litigation.
8.4 Indemnity Holdback Fund; Limitations on Indemnification. The Indemnity
Holdback Fund established pursuant to the terms of the Custodian Agreement shall
be IntraNet Solutions' sole and exclusive source, subject to the terms thereof,
to satisfy the obligations of the Holdback Shareholders under this Article VIII.
Notwithstanding anything to the contrary contained herein or in the Custodian
Agreement, (i) the Holdback Shareholders shall not be required to make any
indemnification payment unless and until the dollar amount of the aggregate
indemnification obligation of the Holdback Shareholders exceeds $75,000, then
the payment obligation of the Holdback Shareholders under this Article VIII
shall be equal to the dollar amount of their aggregate indemnification
obligation less $75,000, (ii) IntraNet Solutions shall not be required to make
any indemnification payment unless and until the dollar amount of the aggregate
indemnification obligation of IntraNet Solutions exceeds $75,000, then the
payment obligation of IntraNet Solutions under this Article VIII shall be equal
to the dollar amount of the aggregate indemnification obligation less $75,000.
Once the Indemnity Holdback Fund has been exhausted by indemnity claims made
under this Article VIII, the Holdback Shareholders will have no further
indemnity obligations under this Article VIII; and the maximum amount of
indemnity payments that IntraNet Solutions will be liable to make under this
Article VIII will be $1,300,000, provided, however, that such maximum amount is
not intended to limit any claim a Shareholder could otherwise make under Rule
10b-5 of the Securities Exchange Act of 1934, as amended.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time, whether before or after approval of the
Merger by the shareholders of InfoAccess:
(a) by mutual consent of IntraNet Solutions and InfoAccess;
(b) by IntraNet Solutions if: (i) it is not in material breach of its
obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant, or agreement contained in this Agreement on
the part of InfoAccess or the Significant Shareholders and such breach has not
been cured within ten business days after written notice to InfoAccess (provided
that no cure period shall be required for a breach which by its nature cannot be
cured); or (ii) there shall be any final action taken, or any statute, rule,
regulation, or order enacted, promulgated, or issued or deemed applicable to the
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<PAGE> 46
Merger by any governmental entity, which would prohibit IntraNet Solutions' or
InfoAccess' ownership or operation of all or a material portion of the business
of InfoAccess, or compel IntraNet Solutions or InfoAccess to dispose of or hold
separate all or a material portion of the business or assets of InfoAccess or
IntraNet Solutions as a result of the Merger;
(c) by InfoAccess if it is not in material breach of its
obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant, or agreement contained in this Agreement on
the part of IntraNet Solutions or Merger Sub and such breach has not been cured
within ten business days after written notice to IntraNet Solutions (provided
that no cure period shall be required for a breach which by its nature cannot be
cured);
(d) by IntraNet Solutions or by InfoAccess if: (i) the Closing
has not occurred by December 31, 1999 (unless such circumstance is the result of
a breach of the terms hereof in any material respect by the party exercising the
termination right); (ii) there shall be a final non-appealable order of a
federal or state court in effect preventing consummation of the Merger; or (iii)
there shall be any final action taken, or any statute, rule, regulation, or
order enacted, promulgated, or issued or deemed applicable to the Merger by any
governmental entity which would make consummation of the Merger illegal;
(e) by IntraNet Solutions if the recommendation by the Board
of Directors of InfoAccess for the Merger or this Agreement is modified or
withdrawn in any way detrimental to IntraNet Solutions;
(f) by IntraNet Solutions if the Merger and this Agreement
shall have been submitted to a vote of the shareholders of InfoAccess and shall
not have been approved by the requisite vote; or
(g) by InfoAccess if (i) the recommendation by the Board of
Directors of InfoAccess with respect to the Merger is modified or withdrawn in
any way detrimental to IntraNet Solutions and (ii) at the time of such action,
an Acquisition Proposal (as defined in Section 9.3) is outstanding; provided,
however, that a termination of this Agreement pursuant to this Section 9.1(g)
shall not be effective unless and until InfoAccess pays IntraNet Solutions the
sum of $200,000 as contemplated by Section 9.3 below.
Where action is taken to terminate this Agreement pursuant to this Section
9.1, it shall be sufficient for such action to be authorized by the Board of
Directors (as applicable) of the party taking such action.
9.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of IntraNet Solutions,
Merger Sub, InfoAccess or their respective officers, directors, shareholders, or
affiliates, or the Significant Shareholders, except to the extent that such
termination results from the breach by a party hereto of any of its
representations, warranties or covenants set forth in this Agreement; provided
that, the
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provisions of Sections 6.13, 9.3, this Section 9.2 and 10.2 shall remain in full
force and effect and survive any termination of this Agreement.
9.3 Termination Fees and Expenses.
(a) If (i) there has been no material breach by IntraNet Solutions of
the representations, warranties and covenant of IntraNet Solutions under this
Agreement (a "Material Breach"), (ii) this Agreement is terminated pursuant to
Section 9.1(e), and (iii) at the time of such termination an Acquisition
Proposal (as defined below) is outstanding, then InfoAccess will promptly
thereafter, but in no event later than three business days after receiving a
written request by IntraNet Solutions therefor, pay to IntraNet Solutions an
amount equal to $200,000;
(b) If (i) there has been no Material Breach by IntraNet Solutions,
(ii) the Merger is not approved by the shareholders of InfoAccess and this
Agreement has been terminated pursuant to Section 9.1(f), and (iii) at the time
of the meeting of InfoAccess' shareholders contemplated by Section 6.9, an
Acquisition Proposal is outstanding, then InfoAccess will promptly thereafter,
but in no event later than three business days after receiving a written request
by IntraNet Solutions therefor, pay to IntraNet Solutions an amount equal to
$200,000;
(c) As used herein, the term "Acquisition Proposal" shall mean a
written offer from a party other than IntraNet Solutions or its affiliates to
acquire InfoAccess in a merger transaction, to acquire all or substantially all
of the assets of InfoAccess, or to acquire at least 50% of the outstanding
InfoAccess Shares.
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements of
IntraNet Solutions, InfoAccess and the Significant Shareholders in this
Agreement shall survive the Effective Time and continue until (A) the date on
which the first audit report on IntraNet Solutions consolidated financial
statements containing combined operations of IntraNet Solutions and InfoAccess
is issued for those items reasonably expected to be discovered in the audit
process or (B) the first anniversary of the Closing Date for all other items,
except that any representation or warranty that would otherwise terminate on
such dates will continue to survive with respect to a claim for indemnity made
under Article VIII hereof or under the Custodian Agreement on or prior to such
dates, until such claim has been satisfied or otherwise resolved.
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10.2 Expenses.
(a) All costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby will be paid by the party incurring
such costs and expenses. For purposes of, and without limiting the generality
of, the foregoing, the cost and expense of the Grant Thornton Audit shall be
deemed to be a cost and expense incurred by IntraNet Solutions.
(b) InfoAccess represents and warrants to IntraNet Solutions that,
except for Business Development Advisors, no person, firm or corporation has or
will have, as a result of any act or omission of InfoAccess or the Significant
Shareholders, any right, interest, or valid claim against or upon InfoAccess or
IntraNet Solutions for any commission, fee, or other compensation as a finder or
broker, or in any similar capacity, in connection with the transactions
contemplated hereby.
(c) IntraNet Solutions represents and warrants to IntraNet Solutions
and the Significant Shareholders that, except for Dain Rauscher Wessels, a
division of Dain Rauscher Incorporated, no person, firm or corporation has or
will have, as a result of any act or omission of IntraNet Solutions, any right,
interest, or valid claim against or upon IntraNet Solutions, InfoAccess or the
Significant Shareholders for any commission, fee, or other compensation as a
finder or broker, or in any similar capacity, in connection with the
transactions contemplated hereby.
10.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given, if given) by hand delivery, facsimile
transmission (confirmed received with hard copy sent by regular mail), or mailed
by registered or certified mail, postage prepaid, return receipt requested, as
follows:
(a) If to IntraNet Solutions or Merger Sub to:
IntraNet Solutions, Inc.
8091 Wallace Road
Eden Prairie, Minnesota 55344-3775
Attention: Robert F. Olson
Telephone: (612) 903-2001
Telecopy: (612) 829-5424
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<PAGE> 49
With a copy to:
Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
Attention: Kris Sharpe
Telephone: (612) 336-3160
Telecopy: (612) 336-3026
(b) If to InfoAccess or the Significant Shareholders to:
InfoAccess, Inc.
15821 Northeast 8th Street, #200
Bellevue, Washington 98008-3905
Attention: W. James Culbertson
Telephone: (425) 201-1045
With a copy to:
Perkins Coie LLP
1201 Third Avenue, 48th Floor
Seattle, Washington 98101-3099
Attention: Gregory G. Gorder
Telephone: (206) 583-8658
Telecopy: (206) 583-8500
or to such other address as the person to whom notice is given has previously
furnished to the other parties in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
10.4 Waiver. At any time prior to the Effective Time, IntraNet
Solutions or InfoAccess may (a) extend the time for the performance of any of
the obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the obligations of the other party or any of the conditions to its
own obligations contained herein to the extent permitted by law. Any agreement
on the part of IntraNet Solutions and InfoAccess to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
IntraNet Solutions and InfoAccess. Any such agreement on the part of InfoAccess
shall also be binding upon the Significant Shareholders.
10.5 Knowledge of InfoAccess. As used in this Agreement, the
expression "to the best knowledge of InfoAccess" (or other similar expressions
regarding the knowledge of InfoAccess) shall be deemed to refer to the best
knowledge, individually and collectively, of each of the Significant
Shareholders.
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<PAGE> 50
10.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.7 Nonassignability. This Agreement shall not be assigned by
operation of law or otherwise.
10.8 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their successors and
permitted assigns, and nothing in this Agreement, expressed or implied, is
intended to confer upon any other person any rights or remedies of any nature
under or by reason of this Agreement.
10.9 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed to constitute an original and shall
become effective when one or more counterparts have been signed by each of the
parties hereto.
10.10 Governing Law. Except as to matters expressly governed by the
WBCA, this Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Minnesota, without regard to its
conflicts of law rules.
10.11 Severability. If any term, provision, covenant, or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such which may be hereafter declared invalid, void, or unenforceable.
10.12 Remedies. Except as provided in Section 8.4, nothing contained
herein is intended to or shall be construed so as to limit the remedies which
any party may have against the others in the event of a breach by any party of
any representation, warranty, covenant, or agreement made under or pursuant to
this Agreement, it being intended that any remedies shall be cumulative and not
exclusive.
10.13 Entire Agreement. This Agreement, the exhibits attached hereto,
and the Schedules attached hereto set forth the entire agreement among the
parties hereto and, other than the Confidentiality Agreement which shall
continue after the Closing, supersedes all prior agreements and understandings
oral or written, among the parties hereto with respect to the subject matter
hereof and thereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of IntraNet Solutions, Merger Sub and InfoAccess
and by the Significant Shareholders on the date first above written.
INTRANET SOLUTIONS, INC. INFOACCESS, INC.
By /s/ Gregg A. Waldon By /s/ W. James Culbertson
---------------------------- ---------------------------
Its: CFO Its: President
------------------------ ------------------------
INTRANET SOLUTIONS SIGNIFICANT SHAREHOLDERS:
(WASHINGTON) INC.
By /s/ Gregg A. Waldon /s/ W. James Culbertson
---------------------------- -------------------------------
Its: Vice President W. James Culbertson
-----------------------
/s/ Richard M. Dillhoff
-------------------------------
Richard M. Dillhoff
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<PAGE> 52
EXHIBIT A
CUSTODIAN AGREEMENT
This Custodian Agreement (the "Agreement") is made and entered into as
of September __, 1999, by and among IntraNet Solutions, Inc., a Minnesota
corporation ("IntraNet Solutions"), the Holdback Shareholders (as defined in
Section 4.5 of the Merger Agreement), and Norwest Bank Minnesota, National
Association (the "Custodian"). Capitalized terms used and not set forth or
defined in this Agreement shall have the meaning set forth in the Agreement and
Plan of Merger dated as of September 16, 1999 among IntraNet Solutions, Inc.,
InfoAccess, Inc., Intranet Solutions (Washsington), Inc., a Washington
corporation and a wholly owned subsidiary of IntraNet Solutions, Inc.,
InfoAccess, Inc., a Washington corporation ("InfoAccess"), and the Significant
Shareholders (the "Merger Agreement").
RECITALS
A. IntraNet Solutions, Inc. and the Holdback Shareholders, being all of
the holders of outstanding shares of capital stock of InfoAccess, have agreed as
part of the Merger to enter into a custodian agreement with respect to that
number of the shares of common stock of IntraNet Solutions, Inc. ("IntraNet
Solutions, Inc. Common Shares") otherwise issuable to the Holdback Shareholders
under the Merger Agreement as calculated in accordance with the formula set
forth in Section 4.5 of the Merger Agreement.
B. The Custodian is willing to perform the duties of custodian under
this Agreement.
In consideration of the mutual representations, warranties, covenants
and agreements set forth in this Agreement and the Merger Agreement, IntraNet
Solutions, Inc., the Holdback Shareholders and the Custodian hereby agree as
follows:
SECTION 1
INTRODUCTORY MATTERS
1.1 Holdback of IntraNet Solutions, Inc. Common Shares. Each of the
Holdback Shareholders agrees to the establishment of the Indemnity Holdback
Fund, on the terms and conditions specified in Section 4.5 of the Merger
Agreement.
1.2 Appointment of Shareholder Representative. Each of the Holdback
Shareholders, for IntraNet Solutions, Inc.'s benefit, has appointed W. James
Culbertson, who is one of the Holdback Shareholders (the "Shareholder
Representative"), as its agent for purposes of this Agreement, including,
without limitation, giving and receiving notices, objecting to or accepting any
claim by IntraNet Solutions, Inc. for indemnification, determining the amount of
any indemnity payment, assuming, prosecuting and settling any claims by third
parties, selecting and retaining attorneys, accountants and consultants with
respect to any of the foregoing, and voting the Holdback Shares (as defined in
Section 2.1).
<PAGE> 53
1.3 Merger Agreement. The Custodian hereby acknowledges receipt of a
copy of the Merger Agreement, but, except for references thereto for definitions
of certain words or terms not defined in this Agreement, the Custodian is not
charged with any duties or responsibilities with respect to the Merger
Agreement.
1.4 Purpose. This Agreement has been executed and delivered, and the
issuance and delivery of the Holdback Shares to the Custodian has been made, for
the purpose of providing reimbursement and indemnification to IntraNet
Solutions, Inc. and its officers, directors and affiliates against and with
respect to the matters set forth in Article VIII of the Merger Agreement.
SECTION 2
INDEMNITY HOLDBACK FUND AND INDEMNIFICATION PROCEDURE
2.1 Holdback Shares. IntraNet Solutions, Inc. has delivered to the
Custodian a certificate or certificates registered in the name of the Custodian
representing in the aggregate that number of IntraNet Solutions, Inc. Common
Shares constituting the Indemnity Holdback Fund established under Section 4.5 of
the Merger Agreement (the "Holdback Shares"). The Holdback Shares shall be held
by the Custodian in custody subject to the terms and conditions of this
Agreement and shall not, during the term of this Agreement, be deemed owned by
the Holdback Shareholders. If, for whatever reason, the Holdback Shares are,
contrary to the intent of the parties, deemed owned by the Holdback
Shareholders, the Holdback Shareholders hereby grant to IntraNet Solutions, Inc.
a security interest in the Holdback Shares to secure the Holdback Shareholders'
obligations under Article VIII of the Merger Agreement, with the Custodian being
hereby appointed IntraNet Solutions, Inc.'s agent for the purpose of perfecting
such security interest.
2.2 Notification of Claim. If IntraNet Solutions, Inc. has any claim or
knows of facts giving rise to a reasonable probability that it will have a basis
for any claim for indemnification by the Holdback Shareholders under the Merger
Agreement to be settled from the Indemnity Holdback Fund, IntraNet Solutions,
Inc. shall deliver, on or prior to (A) the date on which the first audit report
of IntraNet Solutions, Inc. consolidated financial statements containing
combined operations of IntraNet Solutions, Inc. and InfoAccess is issued (the
"Report Date") for those items reasonably expected to be discovered in the audit
process or (B) the first anniversary of the Closing Date (the "Anniversary
Date") for all other items, written notice of a claim to the Shareholder
Representative (the "IntraNet Solutions, Inc. Notice"). Any notice, purporting
to be notice of a claim for indemnification, shall be of no force or effect for
purposes of the Indemnity Holdback Fund (X) for those items reasonably expected
to be discovered in the audit process, if delivered after the Report Date and
(Y) for all other items, if delivered after the Anniversary Date. The IntraNet
Solutions, Inc. Notice shall state (i) the basis of IntraNet Solutions, Inc.'s
claim for indemnification in reasonable detail and (ii) the dollar amount
required for indemnification. The Shareholder Representative shall have 30
calendar days to review the IntraNet Solutions, Inc. Notice and the statements
contained therein and, if the
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<PAGE> 54
Shareholder Representative asserts that IntraNet Solutions, Inc. is not entitled
to indemnity or is entitled to a lesser amount than is stated in the IntraNet
Solutions, Inc. Notice, to deliver a written objection to IntraNet Solutions,
Inc. setting forth his objections to the IntraNet Solutions, Inc. Notice in
reasonable detail. At the expiration of the 30-day period, IntraNet Solutions,
Inc. shall instruct the Custodian to release and deliver the number of Holdback
Shares held in the Indemnity Holdback Fund as provided in Section 2.3 unless
prior to the end of such 30-day period the Shareholder Representative has
objected to the claim in writing and such objection has not been withdrawn by
the Shareholder Representative by a written notice from the Shareholder
Representative to IntraNet Solutions, Inc. Any claim to which the Shareholder
Representative objects and as to which IntraNet Solutions, Inc. and the
Shareholder Representative cannot reach agreement after good faith negotiation
shall be submitted to dispute resolution as provided in Section 2.9.
2.3 Reduction in Indemnity Holdback Fund. If the Shareholder
Representative has not objected in writing within 30 days after delivery of an
IntraNet Solutions, Inc. Notice pursuant to Section 2.2, or upon a final
resolution (whether by mutual agreement of IntraNet Solutions, Inc. and the
Shareholder Representative or by dispute resolution as provided in Section 2.9)
of any disputed claim for indemnification that results in an indemnification
obligation on the part of the Holdback Shareholders under Article VIII of the
Merger Agreement, IntraNet Solutions, Inc. shall instruct the Custodian to
assign, transfer and deliver to IntraNet Solutions, Inc. the number of Holdback
Shares held in the Indemnity Holdback Fund pursuant to the related IntraNet
Solutions, Inc. Notice (or the amount of any final judgment, award, or
settlement in the case of a disputed claim that results in an indemnification
obligation on the part of the Holdback Shareholders) (the "Reduced Shares"). The
number of Reduced Shares shall be determined, subject to the limitation set
forth in Section 2.4, by dividing the dollar amount of the indemnification
obligation by the greater of (i) the average per share closing price of IntraNet
Solutions Common Shares as quoted on the Nasdaq Stock Market for the 20 trading
days immediately prior to delivery of the related IntraNet Solutions Notice or
(ii) $6.765 per share (any such per share price of IntraNet Solutions, Inc.
Common Shares relating to a particular IntraNet Solutions, Inc. Notice being
herein referred to as the "Closing Per Share Price") (rounded to the nearest
whole share).
2.4 Limitations Upon Reduction in Shares. Notwithstanding anything to
the contrary contained in Section 2.3, the number of Holdback Shares held in the
Indemnity Holdback Fund shall not be reduced unless and until the dollar amount
of the aggregate indemnification obligations of the Holdback Shareholders under
the Merger Agreement exceeds $75,000. Upon reaching the $75,000 threshold, the
full dollar amount of any such indemnification obligations in excess of $75,000
shall be used in calculating the number of Reduced Shares in accordance with
Section 2.3.
2.5 Release of Indemnity Holdback Fund. On the day following the
Anniversary Date, if there is no Pending Claim (as defined in Section 2.6),
IntraNet Solutions, Inc. shall deliver a certificate to the Custodian
instructing the Custodian, as soon as practicable, to disburse to each Holdback
Shareholder his or her Proportionate Interest in the Holdback Shares remaining
in the Indemnity Holdback Fund.
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<PAGE> 55
2.6 Continuation of Indemnity Holdback Fund to Satisfy Pending Claims.
If a pending claim as to which an IntraNet Solutions, Inc. Notice has been given
on or before the Anniversary Date has not been resolved on or before the
Anniversary Date (a "Pending Claim"), the Holdback Shares remaining in the
Indemnity Holdback Fund less the number of such Holdback Shares retained to
satisfy the Pending Claim (the "Retained Amount") shall be disbursed to the
Holdback Shareholders on the day following the Anniversary Date in accordance
with their respective Proportionate Interests. The Retained Amount shall be that
number of Holdback Shares in the Indemnity Holdback Fund that is the quotient of
(i) the dollar amount of the Pending Claim (less any portion of the $75,000
threshold amount not previously utilized) divided by (ii) the relevant Closing
Per Share Price (rounded to the nearest whole share). Upon the final resolution
of any such Pending Claim and the reduction of the appropriate portion of the
Retained Amount in accordance with Section 2.3, any Retained Amount remaining
shall be disbursed to the Holdback Shareholders in accordance with their
respective Proportionate Interests.
2.7 Adjustments to Holdback Shares; Dividends. If the Custodian shall
receive any securities in respect of or in exchange for any of the Holdback
Shares held by the Custodian, whether by way of dividends, stock splits,
recapitalizations, mergers, consolidations, split-ups, spin-offs, exchanges, or
conversions of shares, and the like, the Custodian shall hold in custody such
securities and the same shall be subject to all the provisions of this
Agreement. Notwithstanding the foregoing, the Holdback Shareholders shall be
entitled to receive any cash dividends on the Holdback Shares, and such cash
dividends shall be distributed promptly to the Holdback Shareholders in
accordance with their respective Proportionate Interests in the Holdback Shares.
The Shareholder Representative shall be entitled to exercise the voting rights
attaching to the Holdback Shares. Such voting rights shall be exercised through
the timely filing by the Shareholder Representative of all necessary voting
instructions with the Custodian. The Custodian shall vote the Holdback Shares as
so instructed.
2.8 Custodian's Protection; Liability and Indemnification. The
Custodian may act upon any instrument or other writing believed by him in good
faith to be genuine and to be signed or presented by the proper person. In
addition:
(a) Liability. The Custodian shall not be liable in its capacity as
Custodian to the Holdback Shareholders (or any of their beneficiaries,
personal representatives, or estates) or IntraNet Solutions, Inc. (or
any of its officers, directors, or affiliates) with respect to any
actions taken pursuant to this appointment in connection with the
Indemnity Holdback Fund, except in the case of such Custodian's own
gross negligence or willful malfeasance.
(b) Indemnification. IntraNet Solutions, Inc. shall indemnify and
hold the Custodian harmless against any and all losses, liabilities,
damages, and expenses to which the Custodian may become subject in its
capacity as Custodian or in performing any actions as such, except with
respect to activities constituting gross negligence or willful
malfeasance.
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<PAGE> 56
2.9. Resolution of Conflicts. If, with respect to any claim for
indemnification, no agreement can be reached after 30 days of good faith
negotiation, either IntraNet Solutions, Inc. or the Shareholder Representative
may demand arbitration of the matter unless the amount of the damage or loss is
at issue in pending litigation with a third party, in which event arbitration
shall not be commenced until such amount is ascertained or both parties agree to
arbitration; and, in either such event, the matter shall be settled by
arbitration conducted by a single, mutually agreed upon arbitrator. If the
parties fail to agree upon an arbitrator within ten days after arbitration is
demanded, the arbitrator shall be chosen in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The decision of the
arbitrator so selected as to the validity and amount of any such claim shall be
binding and conclusive upon the parties to this Agreement and the Custodian
shall be entitled to act in accordance with such decision and make or withhold
delivery of Holdback Shares out of the Indemnification Holdback Fund in
accordance therewith. Judgment upon any award rendered by the arbitrator may be
entered in any court having jurisdiction. Any such arbitration shall be held in
Minnesota under the rules then in effect of the American Arbitration
Association. For purposes of this Section 2.9, in any arbitration hereunder in
which any claim or the amount thereof stated in the related IntraNet Solutions,
Inc. Notice is at issue, IntraNet Solutions, Inc. shall be deemed to be the
"Non-Prevailing Party" in the event that the arbitrator awards IntraNet
Solutions, Inc. less than one-half of the disputed amount; otherwise, the
Holdback Shareholders shall be deemed to be the Non-Prevailing Party. The
Non-Prevailing Party to an arbitration shall pay its own expenses, the fees of
the arbitrator, the administrative fee of the American Arbitration Association,
and a percentage of the expenses, including without limitation attorneys' fees
and costs, incurred by the other party to the arbitration, such percentage to be
determined as follows. If the Holdback Shareholders are the Non-Prevailing
Party, IntraNet Solutions, Inc. shall be entitled to recover that percentage of
its expenses equal to the result of dividing the amount recovered by IntraNet
Solutions, Inc. by the amount claimed by IntraNet Solutions, Inc.. If the
Holdback Shareholders are the Non-Prevailing Party, the IntraNet Solutions, Inc.
shall be entitled to recover such percentage of its expenses from the Indemnity
Holdback Fund. If IntraNet Solutions, Inc. is the Non-Prevailing Party, the
Holdback Shareholders shall be entitled to recover from IntraNet Solutions, Inc.
that percentage of their expenses equal to the result of dividing (i) an amount
equal to the difference between the amounts claimed and the amount recovered by
(ii) the amounts claimed.
SECTION 3
GENERAL
3.1 Notices. All notices and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given, if
given) by hand delivery, facsimile transmission (confirmed received with hard
copy sent by regular mail), or mailed by registered or certified mail, postage
prepaid, return receipt requested, as follows:
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(a) If to IntraNet Solutions, Inc. to:
IntraNet Solutions, Inc., Inc.
---------------------------------
---------------------------------
Attention:
-----------------------
Telephone:
-----------------------
Telecopy:
-----------------------
(b) If to the Shareholder Representative to:
---------------------------------
---------------------------------
---------------------------------
Attention:
-----------------------
Telephone:
-----------------------
Telecopy:
-----------------------
(c) If to the Custodian to:
Norwest Bank Minnesota, National Association
---------------------------------
---------------------------------
Attention:
-----------------------
Telephone:
-----------------------
Telecopy:
-----------------------
or to such other address as the person to whom notice is given has previously
furnished to the other parties in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt. IntraNet
Solutions, Inc. shall provide promptly to the Shareholder Representative a copy
of each notice or instruction given to the Custodian under this Agreement.
3.2 Custodian Acknowledgment and Acceptance; Fees and Expenses of
Custodian. Custodian hereby acknowledges receipt of the Holdback Shares and
agrees to act as Custodian under this Agreement. The fees and expenses of the
Custodian under this Agreement shall be payable by the IntraNet Solutions, Inc..
3.3 Successor Custodian. The Custodian, or any successor to the
Custodian hereafter appointed, may at any time resign by giving 30 days' notice
in writing to IntraNet Solutions, Inc. and the Shareholder Representative and
shall be discharged of its duties under this Agreement upon the appointment of a
successor Custodian. In the event of any such resignation, IntraNet Solutions,
Inc. shall appoint a successor Custodian.
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3.4 Successor Shareholder Representative. The Shareholder
Representative, or any successor to him or her hereafter appointed, may at any
time resign by giving 30 days' notice in writing to IntraNet Solutions, Inc. and
the Custodian specifying a date when such resignation shall take place and
designating a successor Shareholder Representative ("Successor"). Such notice
shall be accompanied by a Joinder Agreement in the form of that attached hereto
as Exhibit A duly executed by such Successor. If the Shareholder Representative,
or any Successor, shall cease to serve as such for any reason without appointing
a Successor in the manner provided above, a Successor shall be appointed by
means of a written appointment signed by Holdback Shareholders then holding a
majority of the Proportionate Interests in the Indemnity Holdback Fund, which
written appointment, accompanied by a Joinder Agreement as described above,
shall be sent to IntraNet Solutions, Inc. and the Custodian.
3.5 Successors and Assigns. This Agreement and all action taken
hereunder in accordance with its terms shall be binding upon and inure to the
benefit of IntraNet Solutions, Inc., the Holdback Shareholders, the Custodian
and their respective successors and assigns.
3.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute one and the same instrument.
3.7 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
3.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, without regard to its
conflicts of law rules.
3.9 Severability. If any term, provision, covenant, or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void,
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated. Such term, provision, or
covenant shall be deemed modified to make it binding while, to the extent
possible, preserving the intent of the parties. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such which may be hereafter declared invalid, void, or unenforceable.
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<PAGE> 59
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
INTRANET SOLUTIONS, INC., INC.
By
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Its
-------------------------
HOLDBACK SHAREHOLDERS
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
CUSTODIAN:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By
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Its
-------------------------
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<PAGE> 60
EXHIBIT A
JOINDER AGREEMENT
IntraNet Solutions, Inc.
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- ----------------------------------
Attention:
------------------------
Norwest Bank Minnesota, National Association
- ----------------------------------
- ----------------------------------
Attention:
------------------------
Ladies and Gentlemen:
Reference is made to that certain Custodian Agreement dated as of
September , 1999, by and among IntraNet Solutions, Inc., the Holdback
Shareholders named therein and Norwest Bank Minnesota, National Association, as
Custodian. Pursuant to the Custodian Agreement, the undersigned has been
appointed as a successor Shareholder Representative effective
, , and hereby confirms to you as follows:
1. The undersigned accepts appointment as the Shareholder
Representative under the terms of the Custodian Agreement and acknowledges that,
for purposes of Section 3.1 of the Custodian Agreement, all notices and other
communications may be addressed to him or her as follows:
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
2. The undersigned may, for all purposes, be treated as a party
to the Custodian Agreement and agrees that the terms and provisions thereof are
binding upon and shall inure to the benefit of and be enforceable by the
undersigned as of the effective date of his or her appointment.
3. The undersigned covenants and agrees that he or she will
perform, or cause to be performed, all of the duties and acts required to be
performed by him or her as the Shareholder Representative under the Custodian
Agreement.
By:
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<PAGE> 61
EXHIBIT B
AFFILIATE AGREEMENT
The undersigned, an "affiliate" (as that term is defined in Rule
144(a)(1) under the Securities Act of 1933, as amended (the "Securities Act"))
of InfoAccess, Inc., a Washington corporation ("InfoAcess"), acknowledges and
understands that: (i) upon consummation of the transactions contemplated in the
Agreement and Plan of Merger dated as of September 16, 1999 by and among
InfoAccess, Inc., IntraNet Solutions, Inc. a Minnesota corporation ("IntraNet
Solutions"), IntraNet Solutions (Washington), Inc., a Washington corporation and
a wholly owned subsidiary of IntraNet Solutions ("Merger Sub"), and certain
significant shareholders of InfoAccess (the "Merger Agreement"), Merger Sub will
merge with and into InfoAccess, InfoAccess will become a wholly owned subsidiary
of IntraNet Solutions, and the shareholders of InfoAccess will become
shareholders of IntraNet Solutions (the "Merger"); (ii) the Merger is being
accounted for as a pooling of interests; and (iii) the shares of InfoAccess
Common Stock being converted in connection with the Merger and the IntraNet
Solutions Common Stock being issued in connection with the Merger are subject to
certain restrictions on transfer.
In consideration of the execution of the Merger Agreement, and for
other good and valuable consideration, the undersigned hereby irrevocably agrees
that the undersigned will not sell, offer to sell, solicit an offer to buy,
contract to sell, grant any option to purchase, or otherwise transfer or dispose
of any shares of InfoAccess Common Stock or IntraNet Solutions Common Stock or
any securities convertible into or exercisable or exchangeable for InfoAccess
Common Stock or IntraNet Solutions Common Stock (including any securities of
Merger Sub or any right to receive securities of IntraNet Solutions received in
connection with the Merger) (collectively, the "Restricted Securities"), or
reduce the undersigned's risk relating thereto in any other way, except for the
exchange and conversion of InfoAccess Common Stock and options to purchase
InfoAccess Common Stock pursuant to the terms of the Merger Agreement, for a
period beginning September __, 1999 and ending at such time as IntraNet
Solutions has published financial results covering at least 30 days of combined
operations of IntraNet Solutions, Merger Sub and InfoAccess after the Merger
becomes effective.
The undersigned agrees that the provisions of this Agreement shall also
be binding upon the successors, assigns, heirs and personal representatives of
the undersigned.
In furtherance of the foregoing, the undersigned hereby authorizes
InfoAccess, IntraNet Solutions, and the respective registrars and transfer
agents for the Restricted Securities to decline to make any transfer of
Restricted Securities if such transfer would constitute a violation or breach of
this letter agreement. In addition, the undersigned consents to the placement of
appropriate restrictive legends on the certificates evidencing any IntraNet
Solutions Common Stock to be received by the undersigned pursuant to the Merger.
If the Merger is not consummated prior to December 31, 1999, or if the
Merger Agreement (other than the provisions thereof which survive termination)
shall terminate or
<PAGE> 62
be terminated prior to consummation of the Merger, this Agreement shall
terminate and be without further force or effect. This Agreement shall be
governed by and construed in accordance with the laws of the State of Minnesota
applicable to contracts made and to be performed within the State of Minnesota.
The undersigned acknowledges that the undersigned has carefully read
this Agreement and the Merger Agreement, and has discussed with the
undersigned's counsel or counsel for InfoAccess, to the extent the undersigned
believes necessary, the limitations on the undersigned's ability to transfer or
otherwise dispose of Restricted Securities.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of
September , 1999.
-------------------------------------
[Signature of Affiliate]
-------------------------------------
[Print Name]
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<PAGE> 63
EXHIBIT C
PERKINS COIE OPINION
(a) InfoAccess is a corporation, validly existing under the laws of
the State of Washington. To the best of our knowledge, InfoAccess does not have
any direct or indirect equity interest in any other firm, corporation,
partnership, joint venture, association, or other business organization except
as discussed in the Merger Agreement.
(b) InfoAccess has the requisite corporate power and authority to own
and operate its properties, to carry on it business as now being conducted, to
execute and deliver the Merger Agreement, and to consummate the transactions
contemplated by the Merger Agreement.
(c) The execution and delivery of the Merger Agreement by InfoAccess,
and the consummation of the transactions contemplated thereby, have been duly
authorized by all necessary corporate action on the part of InfoAccess. The
Merger Agreement and the Custodian Agreement have been duly executed and
delivered by authorized officers of InfoAccess, and are legal, valid and binding
obligations of InfoAccess, enforceable against InfoAccess in accordance with
their terms, subject, as to enforceability, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity. The right of each
Significant Shareholder to seek appraisal of his InfoAccess Shares under Chapter
23B.13 of the WBCA as a result of the Merger has been validly and irrevocably
waived.
(d) The authorized and outstanding capital stock of InfoAccess is as
set forth on Schedule 5.1(e) to the Merger Agreement. All of the outstanding
InfoAccess Shares have been duly authorized and validly issued and are fully
paid and nonassessable and, to the best of our knowledge, free of preemptive
rights. To the best of our knowledge, no InfoAccess Shares are held in the
treasury of InfoAccess or, except with respect to the options and warrants
referred to in the immediately following sentence, reserved for issuance. Except
as set forth on Schedule 5.1(e) to the Merger Agreement, to the best of our
knowledge there are not as of the date hereof any outstanding or authorized
options, warrants, calls, rights, commitments, or any other agreements of any
character to which InfoAccess is a party, or by which it is bound, requiring it
to issue, transfer, sell, purchase, redeem, or acquire any shares of capital
stock or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of capital stock or other
securities of InfoAccess. To the best of our knowledge, there are not as of the
date hereof any shareholder agreements, voting trusts, or other agreements or
understandings to which InfoAccess is a party or by which InfoAccess is bound
relating to the InfoAccess Shares.
(e) Neither the execution and delivery by InfoAccess of the Merger
Agreement nor the consummation by InfoAccess of the transactions contemplated
thereby shall (i) conflict with or result in any breach of any provision of the
Articles of Incorporation or the By-Laws of InfoAccess; (ii) require any
consent, approval, authorization, or permit of, or filing with or notification
to, any governmental authority, except (A) filings by Acquiror under the
applicable requirements of the Securities Exchange Act, the Nasdaq Stock Market
and the Securities Act
<PAGE> 64
and applicable state securities laws, and (B) the filing of Merger Articles
pursuant to the WBCA and appropriate documents with the relevant authorities of
other states in which InfoAccess is authorized to do business; (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration or lien or other charge or encumbrance) under, any of the terms,
conditions, or provisions of any Listed Contract, except as set forth on
Schedule 5.1(f) of the Merger Agreement and except for such violations,
breaches, and defaults (or rights of termination, cancellation, or acceleration
or lien or other charge or encumbrance) as to which requisite waivers or
consents have been obtained or such as would not have a material adverse effect
on InfoAccess; or (iv) assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in this paragraph are duly and
timely obtained or made, violate any order, writ, injunction, decree, statute,
rule, or regulation known to us and applicable to InfoAccess or to any of its
assets.
(f) To the best of our knowledge, there are no actions, suits, or
proceedings pending or, to the best of our knowledge, threatened against
InfoAccess or any of its properties or business in any court or before any
governmental authority. To the best of our knowledge, (i) InfoAccess is not
subject to any order, writ, injunction, or decree (other than those of general
application) of any court or governmental authority, and (ii) there are no
actions, suits, or proceedings pending or threatened against any of the holders
of InfoAccess Shares in any court or before any governmental authority in regard
to their InfoAccess Shares.
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<PAGE> 65
EXHIBIT D-1/D-2
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into this day of be
effective as of by and between IntraNet Solutions, Inc., a Minnesota
corporation (hereinafter referred to as "Company"), and
residing at (hereinafter referred to as
"Employee").
WITNESSETH:
WHEREAS, the Company desires to assure itself of the services of
Employee; and
WHEREAS, Employee desires to be employed by the Company;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ Employee and Employee
agrees to accept such employment upon the terms and conditions hereinafter set
forth.
2. Duties. Employee shall serve in an executive capacity as the
of the Company, performing such services as the By-Laws
provide, and as the Company's Board of Directors may, from time to time,
determine.
3. Terms. This Agreement shall be for a two (2) year period
commencing on the effective date first above written and terminating on
, 200 , subject, however, to prior termination as provided as Section
7 herein.
4. Base Salary. In consideration for the Employee's service under
this Agreement, the Company agrees to pay Employee an initial Base Salary at
rate of Dollars ($ ). Annually,
Employee will receive an annual performance review and the Base Salary may be
increased at such time in the sole discretion of the Chief Executive Officer and
the Compensation Committee of the Company's Board of Directors. The Base Salary
shall be subject to any withholding required by law and shall be payable in
accordance with the normal payroll practices of the Company.
5. Bonus. You will be eligible for an annual bonus of up to
$ payable quarterly, dependent upon achievement of Company performance
and personal objectives as established by the Chief Executive Officer and the
Compensation Committee of the Company's Board of Directors from time to time.
<PAGE> 66
6. Additional Benefits and Working Facilities.
(a) The Company shall furnish Employee with the equipment, office
space, secretarial support and such other items related to his employment that
Employee determines are necessary, useful and appropriate to him for the duties
required by his employment.
(b) Following one month of employment, the Company shall provide
Employee health and dental insurance, 401K, and any other benefits included in
its corporate benefit program. In addition, Employee shall have the benefit of
such other employee benefit plans that the Company may, from time to time,
establish and in which employee would be entitled to participate pursuant to the
terms thereof. THE COMPANY AT ITS SOLE DISCRETION SHALL HAVE THE RIGHT TO CHANGE
OR DISCONTINUE SUCH PLANS.
(c) Employee shall be entitled to annual paid vacation accruing at
the rate of two weeks per year of employment and otherwise consistent with the
Company's existing vacation policy, and as amended from time to time.
(d) In addition to Section 6(c) above, Employee shall accrue
personal days at the rate of six (6) personal days per year of employment. Any
personal days not used within one year following accrual shall lapse.
(e) The Company shall reimburse Employee for all reasonable
expenses incurred by Employee in connection with the Company's business, upon
presentation of itemized statements therefor.
(f) As additional consideration for the Employee's services under
this Agreement, the Company agrees to grant Employee an initial option grant to
purchase shares of the Company's Common Stock at the fair market value
on the date of this Agreement, vesting ratably at the end of each of five years
from the date of grant, subject to all of the terms of the Company's stock
option plan, including accelerated vesting upon change in control. Based upon
the annual performance review, additional option grants may be awarded at the
sole discretion of the Chief Executive Officer and Compensation Committee of the
Company's Board of Directors.
7. Events of Termination. This Agreement may be terminated as follows:
(a) on the expiration of the term set forth at Section 3 above;
(b) by mutual written agreement of the parties;
(c) upon Employee's death;
(d) without notice, by the Company, for cause; "Cause" for
purposes hereof shall mean a determination by the Company's Board of Directors
that Employee has:
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<PAGE> 67
(i) committed an illegal or dishonest act that directly reflects upon his
fitness to act as of the Company; (ii) breached his fiduciary
obligations to the Company; or (iii) refused or is unable to perform his duties
hereunder, other than as a result of illness or disability, for a period of one
hundred twenty (120) days; or
(e) at the Company's option, without cause, (i) upon 30 days'
written notice to Employee provided the Employee receives 180 days' severance
pay (Base Salary only), or (ii) with notice in the event of a change in control
of the Company (as defined in the Company's stock option plan), provided
Employee immediately receives 180 days' severance pay (Base Salary only).
8. Inventions.
(a) "Inventions", as used in this Section 8, means any
discoveries, improvements and ideas (whether or not they are in writing or
reduced to practice) or works of authorship (whether or not they can be patented
or copyrighted) that the Employee makes, authors, or conceives (either alone or
with others) and that:
(i) concern directly the Company's business or the Company's
present or demonstratably anticipated future research or development;
(ii) result from any work that Employee performs for the Company;
(iii) use the Company's equipment, supplies, facilities, or
trade secret information; or
(iv) the Employee develops during the time the Employee is
performing employment duties for the Company.
(b) All right, title and interest in and to any and all trademarks,
trade names, service marks and logos adopted, used or considered for use by the
Company during the Employee's employment (whether or not developed by the
Employee) to identify the Company's goods or services (collectively, the
"Marks") shall be owned exclusively by the Company. The Employee shall not have,
and shall not claim to have, any right, title or interest of any kind in or to
the Marks.
(c) Employee agrees that all Inventions made by the Employee
during the term of this Agreement will be the Company's sole and exclusive
property. Employee will, with respect to any Invention:
(i) keep current, accurate, and complete records, which will
belong to the Company and be kept and stored on the Company's premises
while the Employee is employed by the Company;
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<PAGE> 68
(ii) promptly and fully disclose the existence and describe
the nature of the Invention to the Company in writing (and without
request);
(iii) assign (and the Employee does hereby assign) to the
Company all of his rights to the Invention, any applications he makes
for patents or copyrights in any country, and any patents or copyrights
granted to him in any country; and
(iv) acknowledge and deliver promptly to the Company any
written instruments, and perform any other acts, necessary in the
Company's opinion to preserve property rights in the Invention against
forfeiture, abandonment, or loss and to obtain and maintain letters
patent and/or copyrights on the Invention and to vest the entire right
to title the Invention in the Company.
(d) The requirements of Section 8(c) do not apply to any
Invention for which no equipment or trade secret information of the Company was
used which was developed on the Employee's own time and: (1) which does not
relate directly to the Company's business or to the Company's actual or
demonstrably anticipated research or development; or (2) which does not result
in any way from any work the Employee performed for the Company. Except as
previously disclosed to the Company in writing, prior to the commencement of
employment hereunder, the Employee does not have, and will not assert, any
claims to or rights under any discoveries, improvements, ideas or works of
authorship which are within the scope of the Company's business. With respect to
obligations performed by the Employee under Section 8(c) following termination
of employment, the Company will pay the Employee reasonable hourly compensation
(consistent with the last Base Salary) and will pay or reimburse all reasonable
out-of-pocket expenses.
As used in this Section 8 and in Sections 9, 10 and 11 below,
"Company" shall include the Company and each corporation, partnership or other
entity which controls the Company, is controlled by the Company, or is under
common control with the Company (in each case "control" meaning the direct or
indirect ownership of 50% or more of all outstanding equity interests).
9. Confidential Information.
(a) "Confidential Information", as used in this Section 9,
means information that is not generally known and that is proprietary to the
Company. Any information, that the Employee reasonably should consider
Confidential Information, or the Company designates as Confidential Information,
will be presumed to be Confidential Information (whether the Employee or others
originated it and regardless of how the Employee obtained it).
(b) Except as specifically permitted by the Company's Board of
Directors or by written Company policies, the Employee will never, either during
or after his
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<PAGE> 69
employment by the Company, use Confidential Information for any
purpose other than the business of the Company or disclose it to any person who
is not also an employee of the Company. When the Employee's employment with the
Company ends, the Employee will promptly deliver to the Company all records and
any compositions, articles, devices, apparatus and other items that disclose,
describe, or embody Confidential Information including all copies, reproductions
and specimens of the Confidential Information in the Employee's possession,
regardless of who prepared them and will promptly deliver any other property of
the Company in the Employee's possession, whether or not Confidential
Information.
10. Conflicts of Interest. The Employee agrees that he will not,
directly or indirectly, transact business with the Company personally, or as
agent, owner, partner or shareholder of any other entity; provided, however,
that any such transaction may be entered into if knowingly approved by all of
the disinterested members of the Company's Board of Directors.
11. Non-Competition Agreement. During the full term hereof, and on
the termination of Employee's employment for any reason, Employee shall not, for
a period of twelve (12) months from the date of such termination:
(a) directly or indirectly, anywhere in the United States,
own, manage, operate or control, or participate in the ownership, management,
operation or control of, or be connected with, or have any interest in, as a
shareholder, director, officer, employee, agent, advisor, consultant, partner,
or otherwise: (i) any "business" which manufactures, produces, sells, markets or
distributes any products or services that are being manufactured, produced,
marketed, sold or distributed by Company as of the date of such termination; or
(ii) any other business which is competitive with any business currently or
hereafter conducted by Company as of the date of such termination; provided,
however, that nothing contained herein shall prohibit Employee from owning less
than 3% of any class of securities listed on a national securities exchange or
traded publicly in the over-the-counter market.
(b) either directly or indirectly, alone or with others,
solicit or assist anyone else in the solicitation of any of the employees
employed by Company at the time of Employee's termination of employment with
Company to terminate their employment with Company and to become employed by any
business enterprise with which the Employee may then be associated, affiliated
or connected.
Employee will, prior to accepting any employment, consulting or similar
contract or agreement with any third party, inform that party of this Agreement
and provide that party with a copy of this Agreement.
Employee acknowledges and agrees that the provisions of this Section 11
are both reasonable and valid in geographical and temporal scope and in all
other respects. If any of the provisions of this Section 11 are held to be
unenforceable because of the scope, duration or area of its applicability, the
court making such determination shall have the power to
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<PAGE> 70
modify such scope, duration or area or all of them, and such provision shall
then be applicable in such modified form.
12. No Adequate Remedy. Employee understands that if the Employee
fails to fulfill the Employee's obligations under Section 8, 9, 10 or 11 of this
Agreement, the damages to the Company would be very difficult to determine.
Therefore, in addition to any other rights or remedies available to the Company
at law, in equity, or by statute, the Employee hereby consents to the specific
enforcement of the provisions of those Sections by the Company through an
injunction or restraining order issued by an appropriate court.
13. Additional Documents. The parties shall each, without further
consideration, execute such additional documents as may be reasonably required
in order to carry out the purpose and intent of this Agreement and to fulfill
the obligations of the respective parties hereunder.
14. Waiver. Any waiver of any term or condition of this Agreement
shall not operate as a waiver of any other breach of such term or condition, or
of any other term or condition, nor shall any failure to enforce a provision
hereof operate as a waiver of such provision or of any other provision hereof.
15. Notices. All communications with respect to this Agreement shall
be considered given if delivered or sent as follows:
(a) If to Employee, by first class certified mail, postage
prepaid, return receipt requested, addressed as follows:
---------------------------
---------------------------
---------------------------
---------------------------
(b) If to the Company, by first class mail, postage prepaid,
return receipt requested, addressed as follows:
---------------------------
---------------------------
---------------------------
---------------------------
or mailed to such other address as the parties hereto may designate by notice
given in like manner. Notice shall be effective three (3) calendar days after
mailing or upon personal delivery.
16. Entire Agreement. This Agreement, together with all exhibits
and writings required or contemplated hereby, constitutes the entire Agreement
between the parties hereto
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<PAGE> 71
with respect to the transaction contemplated hereby and no party shall be liable
or bound to another in any manner by and warranties, representations, or
guarantees, except as specifically set forth herein.
17. Modification, Amendments and Waivers. The parties hereto at
any time may, by written Agreement: (i) extend the time for the performance of
any of the obligations or other acts of the parties hereto; (ii) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any exhibit, schedule, letter, certificate, or other instrument delivered
pursuant hereto; (iii) waive compliance with any of the covenants or agreements
contained in this Agreement; or (iv) make any other modifications of this
Agreement. This Agreement shall not be altered or otherwise amended except
pursuant to an instrument in writing executed by both parties hereto.
18. Severability. No finding or adjudication that any provision of
this Agreement is invalid or unenforceable shall affect the validity or
enforceability of the remaining provision herein, and this Agreement shall be
construed as through such invalid or unenforceable provisions were omitted.
19. Miscellaneous.
(a) The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the parties hereto and the respective legal
representatives, successors, and assigns of both of the parties hereto.
(b) This Agreement is made pursuant to and shall be construed under
the laws of the State of Minnesota.
(c) This Agreement shall be executed in two (2) counterparts,
but each of these counterparts shall, for all purposes, be deemed to be an
original, but both counterparts shall together constitute one and the same
instrument.
(d) The Employee hereby acknowledges that he has sought and
received independent advice from counsel of his own selection in connection with
this Agreement and has not relied to any extent on any officer, director or
shareholder of, or counsel to, the Company in deciding to enter into this
Agreement.
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<PAGE> 72
IN WITNESS WHEREOF, the parties have executed this Agreement effective
the date set forth above.
EMPLOYER: EMPLOYEE:
INTRANET SOLUTIONS, INC.
By
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<PAGE> 73
EXHIBIT E
INVESTMENT AND ACKNOWLEDGEMENT STATEMENT
TO: INFOACCESS SHAREHOLDERS September , 1999
IntraNet Solutions, Inc. ("IntraNet Solutions"), Intranet Solutions
(Washington), Inc., a newly formed wholly owned subsidiary of IntraNet Solutions
("Merger Sub"), InfoAccess, Inc. ("InfoAccess"), and the Significant
Shareholders of InfoAccess (as defined therein) have entered into an Agreement
and Plan of Merger dated as of September 16, 1999 (the "Merger Agreement"),
whereby IntraNet Solutions would acquire InfoAccess pursuant to the merger (the
"Merger") of Merger Sub with and into InfoAccess. In connection with the Merger
each holder of InfoAccess common stock (other than those who dissent from the
Merger) will receive as consideration in the Merger shares of common stock
("IntraNet Solutions Common Shares") of IntraNet Solutions, all as described in
the Merger Agreement.
In connection with the Merger, a portion of the IntraNet Solutions
Common Shares to be issued to InfoAccess shareholders in the Merger will, as
part of the Merger, be deposited in a custodian account to be used to satisfy
certain indemnification and expense reimbursement obligations of the InfoAccess
shareholders to IntraNet Solutions under the Merger Agreement. W. James
Culbertson has been designated to act as the representative of the InfoAccess
shareholders in connection with all matters relating to the custodian account.
The undersigned hereby confirms the appointment of Mr. Culbertson as the
"Shareholder Representative" under the Custodian Agreement (see Exhibit A to the
Merger Agreement). As set forth in the Custodian Agreement, if, for whatever
reason, the shares held in the custodian account are deemed owned by the prior
InfoAccess shareholders, the undersigned hereby grants to IntraNet Solutions a
security interest in those shares deemed owned by the undersigned to secure the
undersigned's indemnification and expense reimbursement obligations under the
Merger Agreement.
The IntraNet Solutions Common Shares to be issued in the Merger are
not, prior to their original issuance, being registered under the Securities Act
of 1933, as amended (the "Act"), or any state securities laws. In electing not
to register such IntraNet Solutions Common Shares under the Act, IntraNet
Solutions is relying upon an exemption from registration provided by Rule 506 of
Regulation D issued by the Securities and Exchange Commission. The applicability
of such exemption from registration is subject to certain conditions, including
the number and investment characteristics of InfoAccess shareholders. Basically,
the IntraNet Solutions Common Shares may be offered without registration to the
following two categories of stockholders:
1. "Accredited Investors." These are individuals who meet certain
income or net worth requirements, or certain institutions such
as banks, insurance companies, investment companies and the
like, all of whom are presumed to be knowledgeable in
connection with investment matters. The specific definition of
"accredited investor" is set forth in Attachment A to this
letter.
<PAGE> 74
2. "Non-accredited Investors" who do not meet the financial or
other requirements to be considered "accredited investors,"
but who establish that they, either alone or together with a
designated "Purchaser Representative," have such knowledge and
experience in financial matters that they are capable of
evaluating the merits and risks of the prospective investment
in IntraNet Solutions Common Shares.
Certain of the InfoAccess shareholders who are "non-accredited
investors" may require a Purchaser Representative to act in their behalf. For
convenience, InfoAccess has designated W. James Culbertson to act as "Purchaser
Representative" on behalf of non-accredited InfoAccess shareholders. InfoAccess
shareholders who choose to retain Mr. Culbertson as their Purchaser
Representative must complete the form of "Acknowledgement of Designation of
Purchaser Representative" included herein as Attachment B. If you elect to have
another person act as your Purchaser Representative, such person will be
required to meet certain qualification requirements, to the satisfaction of
IntraNet Solutions, and disclose in writing to you any relationship between such
person and IntraNet Solutions.
To insure that reliance upon the registration exemption provided by
Rule 506 is appropriate in connection with the Merger, IntraNet Solutions must
obtain certain information and warranties from all InfoAccess shareholders.
Therefore, you are being asked to carefully review and complete the following:
1. Category of Investor
(a) After reviewing the definition of "accredited investor"
contained in Attachment A, the undersigned InfoAccess shareholder
represents and warrants that he or she is (please check one):
an accredited investor
---
not an accredited investor
---
(b) If not an accredited investor, the undersigned InfoAccess
shareholder represents and warrants that he or she has such knowledge
and experience in financial and business matters to permit him or her
to evaluate the merits and risks of an investment in IntraNet Solutions
Common Shares.
Yes
---
No
---
If "Yes" is checked, you may be asked to provide IntraNet Solutions
with additional information to support such answer, including information
regarding your educational background, employment experience, and investment
background and experience (including information regarding your current
investment holdings).
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<PAGE> 75
If "No" is checked, you will be required to appoint a "Purchaser
Representative" to assist you in evaluating your investment in IntraNet
Solutions Common Shares. If you chose to appoint W. James Culbertson, the
Purchaser Representative designated by InfoAccess, you must complete and return
the enclosed "Acknowledgement of Designation by Purchaser Representative."
2. State of Residence. The undersigned InfoAccess shareholders'
principal residence is located in the State of Washington.
3. General Representations. The undersigned InfoAccess
shareholder makes the following general representations, warranties, and
covenants:
(a) That such shareholder will be the sole party in interest
as to the IntraNet Solutions Common Shares to be issued to such
shareholder in the Merger and that he or she is acquiring the IntraNet
Solutions Common Shares for such shareholder's own account, for
investment only and not with a view toward the resale or distribution
thereof in violation of the Act. Although IntraNet Solutions has agreed
to use its best efforts to register the IntraNet Solutions Common
Shares issued in the Merger for public resale under the Act, such
shareholder acknowledges that such IntraNet Solutions Common Shares
will not be registered under the Act nor under any state securities
laws at the time such securities are first issued and that the share
certificates issued to evidence such IntraNet Solutions Common Shares
will bear a restrictive legend to such effect. Such shareholder further
understands that he or she may be required to bear the economic risk of
this investment for an indefinite period of time because the IntraNet
Solutions Common Shares received in the Merger may not be sold or
otherwise transferred unless subsequently registered under the Act and
such state securities laws or unless an exemption from such
registration is available.
(b) That, in connection with the acquisition of the IntraNet
Solutions Common Shares in connection with the Merger, no
representations or warranties, written or oral, have been made to him
or her other than those contained in the Merger Agreement and the
Information Statement referred to in the Merger Agreement. Such
shareholder acknowledges that he or she has been advised that no person
is authorized, except as permitted by the Merger Agreement, to give any
information or to make any statement not contained in the Merger
Agreement, a copy of which, together with a copy of the Information
Statement, he or she has received prior to signing this Statement, and
that any information or statement not contained therein or contemplated
or permitted thereby must not be relied upon as having been authorized
by IntraNet Solutions, any of its subsidiaries or affiliates, or any
professional advisors to any of them.
(c) That such shareholder or such shareholder's Purchaser
Representative has had the opportunity to ask questions of IntraNet
Solutions with respect to the terms and conditions of the offering of
the IntraNet Solutions Common Shares and to obtain additional
information necessary to verify the information contained in the Merger
Agreement and the Information Statement.
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<PAGE> 76
(d) That, if he or she is an individual, he or she is at least
21 years of age or, if the investor is an association or a partnership,
then each of its members is of such age.
(e) That such shareholder understands that no federal or state
agency has made any finding or determination as to the fairness for
investment, nor any recommendation or endorsement, of the IntraNet
Solutions Common Shares.
(f) That he or she does not have any arrangement, agreement,
or understanding regarding the sale or other disposition of the
IntraNet Solutions Common Shares to be received in the Merger, other
than the agreement by IntraNet Solutions to use its best efforts to
register such securities under the Act following consummation if the
Merger, as set forth in the Merger Agreement.
(g) The undersigned InfoAccess shareholder acknowledges that
the representations and warranties contained herein shall survive the
consummation of the Merger.
If you have any questions regarding the completion of this Statement,
please contact , an attorney for IntraNet Solutions, at
or , an attorney for InfoAccess, at .
Each InfoAccess shareholder is encouraged to consult with his or her own legal
and financial advisors in connection with the completion of this Statement.
This Statement, once completed, signed, and dated should be returned as
promptly as possible to the following:
InfoAccess, Inc.
-----------------------
-----------------------
Attention: ------------
A self-addressed, stamped envelope is enclosed for this purpose.
Very truly yours,
INTRANET SOLUTIONS, INC.
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<PAGE> 77
The undersigned has reviewed, completed
and agreed to the foregoing.
- ---------------------------------------
Signature of InfoAccess Shareholder*
- ---------------------------------------
Date
* You should sign exactly as your name appears on the InfoAccess share
certificates you hold. If your InfoAccess shares are issued in the names
of two or more persons, all such shareholders should sign. If signing as
an attorney, attorney-in-fact, executor, administrator, trustee, or
guardian, the signatory should give his or her full title as such. If a
corporation is the holder, this statement should be signed in full
corporate name by the president or other authorized officer. If the
shareholder is a partnership, this statement should be signed in the name
of the partnership by an authorized person.
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<PAGE> 78
Attachment A
ACCREDITATION CRITERIA
A. The following INDIVIDUAL INVESTORS are deemed "Accredited
Investors":
|_| (1) Individual income of $200,000 in each of the past
two years and anticipated income of at least $200,000
in the current year or joint annual income
(individual and spouse) of $300,000 in the same time
period.
|_| (2) An individual net worth, or joint net worth with
that person's spouse, of $1,000,000 or more.
B. The following LEGAL ENTITIES are deemed "Accredited
Investors":
|_| (1) A bank as defined in Section 3(a)(2) of the
Securities Act of 1933, or a savings and loan
association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act of 1933,
whether acting in its individual or fiduciary
capacity.
|_| (2) A broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
|_| (3) An insurance company as defined in Section 2(13)of
the Securities Act of 1933.
|_| (4) An investment company registered under the Investment
Company Act of 1940.
|_| (5) A business development company as defined in Section
2(a)(48) of the Investment Company Act of 1940.
|_| (6) A Small Business Investment Company licensed by the
U. S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of
1958.
|_| (7) A plan established and maintained by a state, its
political subdivisions or any agency or
instrumentality of a state or its political
subdivisions, for the benefit of its employees, if
such plan has total assets in excess of $5,000,000.
|_| (8) An employee benefit plan within the meaning of
the Employment Retirement Income Security Act of 1974
(ERISA), if the investment decision with respect to
this investment is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either
a bank, savings and
<PAGE> 79
loan association, insurance company, or registered
investment adviser, or if the employee benefit plan
has total assets in excess of $5,000,000 or, if a
self-directed plan, the investment decisions are made
solely by persons that satisfy one of the other
accreditation criteria referred to herein.
|_| (9) A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of
1940.
|_| (10) A tax exempt organization as defined in Section
501(c)(3) of the Internal Revenue Code, not formed
for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
|_| (11) A corporation, partnership, Massachusetts or similar
business trust, not formed for the specific purpose
of acquiring the securities offered, with total
assets in excess of $5,000,000.
|_| (12) A trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the
securities offered and whose purchase is directed by
a person who has such knowledge and experience in
financial and business matters that he or she is
capable of evaluating the merits and risks of the
prospective investment.
|_| (13) A partnership, corporation or other entity, all the
partners, shareholders or other equity owners of
which are accredited by reason of satisfying one of
the other accreditation criteria referred to herein.
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<PAGE> 80
Attachment B
ACKNOWLEDGEMENT OF DESIGNATION
OF PURCHASER REPRESENTATIVE
This Acknowledgment of Designation of Purchaser Representative is
completed and executed by the undersigned shareholder (the "Investor") of
InfoAccess, Inc. ("InfoAccess") in connection with and as a condition precedent
to the issuance to the undersigned of shares of Common Stock (the "IntraNet
Solutions Common Shares") of IntraNet Solutions, Inc. ("IntraNet Solutions"),
all as described in the Agreement and Plan of Merger dated as of September 16,
1999 among IntraNet Solutions, InfoAccess, IA Acquisition Corp. and the
Significant Shareholders of InfoAccess named therein. All representations,
statements, and acknowledgments made by the Investor in this Acknowledgment are
made to and for the benefit of IntraNet Solutions and W. James Culbertson, and
the Investor acknowledges that IntraNet Solutions will issue the IntraNet
Solutions Common Shares particularly in reliance upon the matters contained in
this Acknowledgment.
The Investor states and acknowledges that W. James Culbertson has been
designated to act as "Purchaser Representative," as that term is defined in Rule
501 of the Securities and Exchange Commission, on behalf of the Investor, in
connection with evaluation of the merits and risks of the prospective investment
in the IntraNet Solutions Common Shares.
The Investor acknowledges that he or she has been advised that W. James
Culbertson is a of InfoAccess and that he beneficially owns
shares of the Common Stock of InfoAccess.
The undersigned Investor hereby acknowledges that IntraNet Solutions
and W. James Culbertson are relying upon this Acknowledgment in connection with
the offering and issuance of the IntraNet Solutions Common Shares.
(Please sign personally, exactly as Investor's name
appears on InfoAccess's share certificates. If
InfoAccess shares are issued in the names of two or
more persons, all holders should sign. When signing
as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please give full title as such. If a
corporation, please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.)
- ---------------------------------------------------
Investor
- ---------------------------------------------------
<PAGE> 81
EXHIBIT F
FAEGRE & BENSON OPINION
(a) Each of IntraNet Solutions and Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Each of IntraNet Solutions and Merger Sub has the requisite
corporate power and authority to own and operate its properties, to carry on its
business as now being conducted. Each of Aquiror and Merger Sub has the
requisite corporate power to execute and deliver the Merger Agreement and to
consummate the transactions contemplated by the Merger Agreement.
(c) The execution and delivery of the Merger Agreement by IntraNet
Solutions and Merger Sub, and the consummation of the transactions contemplated
thereby, have been duly authorized by all necessary corporate action on the part
of IntraNet Solutions and Merger Sub. Without limiting the generality of the
foregoing, no approval of the Merger Agreement by the shareholders of IntraNet
Solutions is required. The Merger Agreement and the Custodian Agreement have
been duly executed and delivered by authorized officers of IntraNet Solutions or
Merger Sub, as the case may be, and are legal, valid and binding obligations of
IntraNet Solutions and Merger Sub, enforceable against IntraNet Solutions and
Merger Sub in accordance with their terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity.
(d) IntraNet Solutions has taken all necessary action to permit it to
issue the number of IntraNet Solutions Common Shares required to be issued under
Article IV of the Merger Agreement. The IntraNet Solutions Common Shares issued
under Article IV of the Merger Agreement shall, when issued in accordance
therewith, be validly issued, fully paid and nonassessable and, to the best of
our knowledge, no shareholder of IntraNet Solutions shall have any preemptive
right of subscription or purchase in respect thereof.
(e) Neither the execution and delivery by IntraNet Solutions and Merger
Sub of the Merger Agreement nor the consummation by IntraNet Solutions and
Merger Sub of the transactions contemplated thereby shall (i) conflict with or
result in any breach of any provision of the Articles of Incorporation or
By-Laws of IntraNet Solutions and Merger Sub; (ii) require any consent,
approval, authorization, or permit of, or filing with or notification to, any
governmental authority, except (A) filings by IntraNet Solutions under the
applicable requirements of the Securities Exchange Act, the Nasdaq Stock Market,
and the Securities Act and applicable state securities laws, and (B) the filing
of Articles of Merger under the WBCA and appropriate documents with the relevant
authorities of other states in which Maxim is authorized to do business; (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, or acceleration or lien or other charge or encumbrance) under, any
of the terms, conditions, or provisions of any material contract of IntraNet
Solutions filed with the Securities and Exchange Commission under the Exchange
Act, except for such violations, breaches and
<PAGE> 82
defaults (or rights of termination, cancellation or acceleration or lien or
other charge or encumbrance) as to which requisite waivers or consents have been
obtained or such as would not have a material adverse effect on IntraNet
Solutions and its subsidiaries, taken as a whole; or (iv) assuming the consents,
approvals, authorizations or permits and filings or notifications referred to in
this paragraph (e) are duly and timely obtained or made, violate any order,
writ, injunction, decree, statute, rule, or regulation known to us and
applicable to IntraNet Solutions or Merger Sub or to any of their respective
assets.
(f) To the best of our knowledge, there are no actions, suits, or
proceedings pending or, to the best of our knowledge, threatened against
IntraNet Solutions or Merger Sub or any of their properties or businesses in any
court or before any governmental authority. To the best of our knowledge, (i)
IntraNet Solutions and Merger Sub are not subject to any order, writ,
injunction, or decree (other than those of general application) of any court or
governmental authority, and (ii) there are no actions, suits, or proceedings
pending or threatened against any of the holders of IntraNet Solutions or Merger
Sub shares in any court or before any governmental authority in regard to their
IntraNet Solutions or Merger Sub shares.
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<PAGE> 1
EXHIBIT 99
NEWS RELEASE
Barbara Johnson
IntraNet Solutions, Inc.
(612) 903-2024
[email protected]
Tom Freeman
InfoAccess Inc.
(425) 201-1915
[email protected]
FOR IMMEDIATE RELEASE Tamsen Reinheimer
Price Public Relations
(650) 829-5800
[email protected]
INTRANET SOLUTIONS' AGREES TO ACQUIRE CONTENT
PUBLISHING TECHNOLOGY LEADER, INFOACCESS INC.
IntraNet Solutions Broadens Content Management Capabilities with Proposed
Addition of Transit Solutions Products; Would Gain 18,000 Customers Worldwide
EDEN PRAIRIE, MN, SEPT. 17, 1999 - IntraNet Solutions(R), Inc., (NASDAQ: INRS),
a leading supplier of Web-based document and content management solutions, today
announced it has signed an agreement to acquire InfoAccess Inc., a leading
technology supplier of HTML and XML content publishing solutions. The
acquisition will allow IntraNet Solutions to provide a content management
solution that can be fully integrated with an organization's strategic
information systems to deliver interactive, dynamically published and managed
enterprise Web applications.
Under the terms of the agreement, IntraNet Solutions will issue
approximately 1.6 million shares of its common stock for all of the outstanding
common stock of InfoAccess Inc., a private company, in a transaction that is
intended to be accounted for as a pooling of interests. InfoAccess is a
profitable company and has delivered solid revenue growth with its
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<PAGE> 2
IntraNet Solutions Acquires InfoAccess Page 2
awarding-winning Transit Central product suite. The combined companies will have
over 110 employees, with products spanning the desktop, workgroup, and the
enterprise.
InfoAccess, located in Bellevue, Washington, a leader in HTML and XML
content publishing solutions, launched its HTML Transit software products in
January 1998. The award-winning Transit Solutions product family provides
high-powered Web site content management publishing tools, including automatic
HTML and XML publishing conversion that enables organizations to quickly
develop, build and manage Internet, extranet and enterprise Web applications.
InfoAccess' operations will remain in Bellevue and will be operated as a
wholly-owned subsidiary of IntraNet Solutions.
"I'm pleased to announce the agreement to acquire content publishing
leader, InfoAccess, as part of our strategy for developing a leadership position
in the content management market," said Robert Olson, president and chief
executive officer at IntraNet Solutions, Inc. "With InfoAccess, we saw a unique
opportunity to add powerful HTML and XML-based content publishing technology to
our flagship Intra.doc! content management system. We believe the InfoAccess
acquisition will strengthen our management team and infrastructure, will provide
strong third-party sales channels and partnerships, and an installed base of
over 18,000 accounts."
"There is a great opportunity in the market today for an end-to-end
Web site publishing and content management solution," said David Yockelson,
senior vice president and director of electronic business strategies at the META
Group. "Very few vendors currently offer this type of solution in a form that is
easy to administer and deploy. We
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<PAGE> 3
IntraNet Solutions Acquires InfoAccess Page 3
believe that the combination of strong repository services plus comprehensive
content publishing and management facilities will provide a one-stop content
`supply chain' shop for users."
InfoAccess' Transit Solutions products have been licensed to end-user
organizations such as BankAmerica, Merrill Lynch, Boeing, GM, and Shell Oil.
InfoAccess has software marketing relationships with IBM, Netfinity and Lotus
Domino to resell its Transit products with their complementary products. The
company also has OEM and other strategic relationships with software providers
such as OpenText, FileNET, Hummingbird/PCDOCS, and others. In addition, the
Transit Central Software Developer's Kit has been licensed to many third-party
application developers, including integrators such as EDS and USWeb, powering
tens of thousands of Web sites daily. InfoAccess' international network of
approximately 100 system integration partners provides complete solutions that
include its Transit technology to end-user organizations across Europe.
"IntraNet Solutions is a leading provider of innovative, Web-based
content management products," said Jim Culbertson, President of InfoAccess Inc.
"The combination of our strengths in content publishing with their proven
content management technology will create a robust, single-vendor solution
capable of completely addressing customer needs. The potential of this union
will mean great things for our customers and a completely natural evolution of
both product lines."
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<PAGE> 4
IntraNet Solutions Acquires InfoAccess Page 4
"We believe we will be able to quickly leverage our larger customer
base with these new product offerings," Olson added. "The acquisition will also
help us move products more aggressively into OEM and third-party channels where
InfoAccess has strong momentum."
ABOUT INFOACCESS INC. AND TRANSIT
InfoAccess Inc. (www.infoaccess.com) founded in 1985 in Bellevue, Washington,
pioneered hypertext publishing systems, and is a world leader in advanced HTML
and XML publishing solutions. Their automated Web publishing solutions for
corporate Web sites and document management systems have transformed the jobs of
Webmasters, saving both time and money. HTML Transit has received numerous
awards including InfoWorld's Groupware Product of the Year, NetGuide Magazine's
Editor's Choice, Windows Magazine Recommended List, and five stars from
PC/Computing Magazine. In addition to HTML Transit, the company offers Transit
Central, an automated system for Web publishing with scheduled updates that also
features drag and drop publishing by anyone on the network. Transit Central and
Transit Central EDM were named "Best Government Buy" by Federal Computer Week.
In addition, InfoAccess was named among the top 25 Intranet companies by
Information Week Magazine.
ABOUT INTRANET SOLUTIONS, INC.
IntraNet Solutions(R), Inc., (www.intranetsol.com) headquartered in
Eden Prairie, Minnesota, offers Web-based document and content management
solutions for intranets, extranets and the Internet. IntraNet Solutions'
products are preferred by customers because
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IntraNet Solutions Acquires InfoAccess Page 5
they deliver key benefits like rapid deployment and return on investment,
ease-of-use, enterprise-strength scalability and security, and a commitment to
Web-based standards.
Since Intra.doc! was introduced in 1997, it has been installed by over
250 customers and is in use at over 350 sites at some of the world's largest
organizations such as British Aerospace Airbus, Ltd., Cargill Incorporated,
Ericsson Telecom AB, GE Capital Corporation and Hewlett-Packard Company.
IntraNet Solutions has offices throughout the U.S. and a European operations
office in London.
###
Any forward-looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that all forward-looking statements involve risk and
uncertainties including, without limitation, risks of intellectual property
litigation, risks in technology development and commercialization, risks in
product development and market acceptance of and demand for the Company's
products, risks of downturns in economic conditions generally and in the Web
document management tools and intranet information management markets
specifically, risks associated with competition and competitive pricing
pressures, risks associated with foreign sales and higher customer concentration
and other risks detailed in the Company's filings with the Securities and
Exchange Commission.
IntraNet Solutions and Intra.doc! are registered trademarks and the IntraNet
Solutions' logo and the Intra.doc! logo, are trademarks of IntraNet Solutions,
Inc. in the USA and Canada. InfoAccess and Transit are trademarks of InfoAccess
Inc. All other trade names are the property of their respective owners.
