EXHIBIT 2
to SCHEDULE 13D
October 20, 2003
Open Text Corporation
Dear Sirs:
This letter sets out the terms and conditions upon which the
undersigned agree to support a tender offer (the "Offer") that your wholly-owned
subsidiary ("Offeror") will make to purchase all of the issued and outstanding
shares of common stock (the "Shares") of IXOS Software AG (the "Company") on the
terms of a Business Combination Agreement dated October 20, 2003 between you
("Open Text"), the Offeror and the Company (the "BCA"). Capitalized terms used
herein and not defined herein shall have the meanings set forth in the BCA.
Each of the undersigned represent and warrant to the Offeror that as of
the date hereof it is the sole beneficial owner of an aggregate of the number of
Shares set forth under its name below (collectively the "Seller's Shares"), that
it has the exclusive right to dispose of the Seller's Shares as provided in this
letter and that the Seller's Shares to be acquired by the Offeror from the
Undersigned pursuant to the Offer will be acquired with good and marketable
title, free and clear of any and all liens, charges, restrictions, security
interests, adverse claims, pledges, encumbrances and demands or rights of others
of any nature or kind whatsoever.
Subject to the terms and conditions of this letter and unless this
letter and the obligations of the undersigned hereunder have terminated as
provided herein, the undersigned (i) agree to declare the acceptance of the
Offer of the Offeror on the first banking day after the publication of the Offer
following the formalities set forth in the Offer documents, and (ii) agree not
to challenge or withdraw from any such acceptance, instructing their respective
banks to accept the Offer and properly execute the transfer of the Sellers'
Stock under the Offer, which instruction shall include the transfer of all
rights in the Sellers' Stock and all documents certifying these stockholdings.
The undersigned will be free to elect to accept either the Cash Consideration or
the Share and Warrant Consideration under the Offer. The undersigned shall
timely, and in any case without undue delay, follow all instructions issued by
the depository bank when executing the Offer that are consistent with the Offer
documents. Each of the undersigned agrees that it will: (a) not take any action
of any kind which may reduce the likelihood of success of or delay the take up
of and payment for Shares deposited under the Offer or the completion of the
Offer; and (b) not option, sell, transfer, pledge (other than a pledge by
GapStar, LLC to a lender to secure a bona fide loan made by such lender, a
primary purpose of which is not to defeat the intention of the parties under
this paragraph), encumber, grant a security interest in, hypothecate or
otherwise convey the Seller's Shares, or any right or interest therein, to any
person, entity or group or agree to do any of the foregoing. Each of the
undersigned agrees, severally and not jointly, solely in its capacity as
stockholder of the Company, to support the Offer, including the voting of the
Seller's Shares (or delivering a proxy to Open Text to vote on its behalf), if
any, to use all commercially reasonable efforts to assist Open Text and the
Company to successfully complete the transactions contemplated in the BCA and
not to take any action inconsistent with the obligations of the Company under
the BCA.
If the undersigned elect to accept the Share and Warrant Consideration,
then each of the undersigned severally and not jointly agrees not to directly or
indirectly sell, offer to sell, grant any option for the sale of, assign,
transfer, pledge (other than a pledge by GapStar, LLC to a lender to secure a
bona fide loan made by such lender, a primary purpose of which is not to defeat
the intention of the parties under this paragraph), hypothecate, or otherwise
encumber or dispose of any legal or beneficial interest in any of the Shares and
Warrants comprising the Share and Warrant Consideration received under the Offer
or the Shares received upon exercise of the Warrants (the "Warrant Shares"), or
sell short common shares in the capital of Open Text or undertake any
monetization or derivative or similar transaction having economic effect that is
the same or substantially the same as any of the foregoing, in each case within
the period of twelve months after the Closing Date; provided, however, that (i)
the foregoing shall not prevent any undersigned from exercising the Warrants at
any time prior to the expiration thereof, (ii) each of the undersigned may at
any time transfer such Shares, Warrants and Warrant Shares to any Affiliate so
long as any such Affiliate agrees in writing in favour of Open Text, as a
condition to such transfer, to the restrictions set forth in this paragraph and
(iii) the foregoing shall not prevent any undersigned from selling or otherwise
disposing of its Shares, Warrants and Warrant Shares in connection with a sale
of Open Text, by way of merger, amalgamation, tender offer, consolidation or
otherwise. For the purposes hereof, "Affiliate" with respect to a person, any
other person that directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, such person.
Effective upon the Closing Date, each of the undersigned, on its own
behalf and on behalf of its successors and permitted assigned (the undersigned
and such person or entity, a "Releasor"), hereby releases and forever discharges
the Company and each of its respective Affiliates, successors and assigns,
together with their respective officers, directors, servants, employees and
agents (each a "Releasee" and collectively the "Releasees"), from all causes of
action, damages,
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suits, losses, expenses, demands, debts, accounts, liabilities, contracts and
all other claims and rights whatsoever existing up to or on date hereof or
hereafter arising (collectively, the "Claims") which the respective Releasor now
has or may hereafter have against the Releasees relating directly or indirectly
to (a) the Participation Agreement dated August 12, 2002 between each of the
undersigned and the Company; and (b) the Registration Rights Agreement dated
September 17, 2002 between each of the undersigned and the Company
(collectively, the "Agreements"). Each of the undersigned, on its own behalf and
on behalf of its successors and permitted assigns represents and warrants,
severally and not jointly, to Open Text that it has not made any claims or
commenced any action or proceeding, and that to the best of its actual
knowledge, without investigation, there is no factual basis or circumstance that
would support any such claim, action or proceeding, in each case as of the time
of execution of this letter, and agrees, severally and not jointly, not to make
any claim or commence any action or proceeding relating directly or indirectly
to the Agreements, in each case against the Releasees or any person, firm,
corporation or other entity in which any claim, action or proceeding would arise
against any of the Releasees for contribution or indemnity or other relief from,
over and against any such Releasee or which otherwise results in any such
Releasee suffering or incurring any liability, damages, costs or expenses,
whether under common law or by equity or by statute or contract or otherwise.
Neither any undersigned nor any of its representatives, agents,
officers, directors, employees, controlling shareholders or general partner
shall, in its capacity as a stockholder of the Company, directly or indirectly
in any manner (a) entertain, solicit or encourage any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to its Shareholders) with respect to, (b) furnish or cause to
be furnished any information to any persons or entities (other than Open Text
and the Offeror) in connection with, (c) engage in negotiations concerning or
have any substantive discussions with any such third party proposing, (d)
endorse or recommend a proposal of, (e) enter into any contract or understanding
relating to, or (f) otherwise facilitate any effort or attempt to make or
implement, in each case, a Competing Transaction. Each undersigned shall, unless
it is advised by outside counsel that such disclosure is not permitted by
applicable statutory confidentiality obligations, notify Open Text and the
Offeror immediately if any such inquiries or proposals are received by, any such
information is requested from or any such negotiations or discussions are sought
to be initiated or continued with, it in its capacity as a stockholder of the
Company, or any of its of its representatives, agents, officers, directors,
employees, controlling shareholders or general partner acting on its behalf in
such capacity, and provide Open Text and the Offeror with a copy of the material
terms and conditions of such Competing Transaction and any agreement that the
undersigned proposes to enter into in respect of such Competing Transaction and
access to all information provided by the undersigned to the party proposing the
Competing Transaction to the extent not previously provided to Open Text and the
Offeror. Each undersigned shall be responsible for any breach by its
representatives, agents, officers, employees, controlling shareholders or
general partner of any of this provision. Neither any of the undersigned nor any
of its representatives agents, officers, directors, employees, controlling
shareholders or general partner will, in its capacity as a stockholder of the
Company, recommend or actively support any Competing Transaction launched by any
third party during the time from the Signing Date until the Expiration Date of
the Offer, provided that if the Competing Transaction constitutes a Superior
Tender Offer and is recommended by the Company's Supervisory Board pursuant to
its fiduciary duty under German Takeover Law, then unless this letter and the
obligations of the undersigned hereunder are or have terminated as provided in
the immediately following paragraph below, the undersigned's obligations under
this paragraph and the third paragraph hereof shall terminate and the
undersigned shall have no obligation to support the Offer, and further provided
that if the Company's Supervisory Board subsequently determines to recommend the
Offer as it may be amended or replaced by Open Text and the Offeror, the
obligations of the undersigned under this paragraph and the third paragraph
hereof shall continue in effect and the undersigned shall suspend and cease any
negotiations or other discussions in respect of any Competing Transaction or any
inquiry or proposal relating thereto. For the purposes hereof, "Competing
Transaction" means any proposal or any transaction (other than as contemplated
by the BCA) regarding (i) any merger, consolidation, share exchange, business
combination, joint venture or other similar transaction or series of related
transactions involving the Company or any of its subsidiaries; (ii) any loans,
advances or capital contributions to, or other investments in the Company, other
than as contemplated by the BCA; (iii) any sale, lease, exchange, transfer,
license or other disposition of any material portion of assets of the Company or
any of its subsidiaries out of the ordinary course of business other than as
contemplated by the BCA; (iv) any tender offer, take-over bid, exchange offer or
similar transaction or series of related transactions made by any party or
entity involving the acquisition or lock up of 10% or more of the outstanding
Shares, coupled with or followed by an offer for the balance of the outstanding
Shares, other than as contemplated by the BCA; (v) the acquisition by any party
or any group of persons acting jointly or in concert (other than the Purchaser
and its Affiliates), directly or indirectly, of beneficial ownership of, or the
formation of any group of persons acting jointly or in concert to acquire
beneficial ownership of, 10% or more of the then outstanding Shares of the
Company or any of its subsidiaries, which is coupled with or followed by an
offer for the balance of the outstanding Shares; or (vi) any other substantially
similar transaction or series of related transactions that would hinder the
consummation of the transactions contemplated by, or otherwise defeat the
purposes of, the BCA.
This letter and the obligations of the Parties thereunder shall
terminate upon the following, except for the final paragraph of this letter,
which shall survive in the event of a termination pursuant to clause (i) below
as a result of the BCA
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being terminated pursuant to Section 20.1(g) thereof: (i) the termination of the
BCA in accordance with its terms; (ii) the failure to receive any required
approval of the undersigned's acquisition of the Shares, the Warrants and the
Warrant Shares under applicable antitrust and cartel laws (provided such
approval does not require any divestitures or similar actions), unless waived by
all parties to this letter; (iii) by the undersigned in the event that the
undersigned do not consent in writing to any amendment thereto that modifies the
consideration to be offered to the undersigned (other than an increase in such
consideration) by notice in writing to Open Text given within two banking days
of receipt of notice of such amendment; or (iv) any of the Offer Conditions has
not been satisfied on or prior to the time of expiration of the Offer on the
Expiration Date and has not been waived by Open Text, and Open Text having
delivered notice thereof to the undersigned.
The undersigned agree that if (A) (i) the Offeror has published the
Offer in accordance with the BCA, (ii) a competing bidder (other than Open Text
or its Affiliates) subsequently launches a Superior Tender Offer on or prior to
March 1, 2004 and (iii) such Superior Tender Offer is consummated resulting in a
majority of the outstanding share capital of the Company being acquired by any
person other than Open Text and its Affiliates and (B) the price per share of
common stock of the Company paid to the undersigned pursuant to such Superior
Tender Offer exceeds by 20% or more the value of the Share and Warrant
Consideration offered for each share of common stock of the Company under the
Offer, the undersigned shall thereupon be jointly and severally obliged to
immediately pay to Open Text an aggregate amount in cash equal to (euro)600,000.
Such amount shall be allocated among the undersigned as determined by the
undersigned in their sole discretion. This payment obligation is not dependent
upon any undersigned or any of its representatives, agents, officers, directors,
employees or controlling shareholders or general partner being in breach of any
of the covenants set forth in this letter. In the event (i) of any willful
breach by any undersigned of any provision of this letter and (ii) that a
majority of the outstanding share capital of the Company is acquired in a
Competing Transaction announced by any person other than Open Text and/or its
associated companies or Affiliates on or prior to April 1, 2004, the undersigned
shall thereupon be obliged to pay to Open Text, concurrent with their receipt of
proceeds in connection with such Competing Transaction, an amount equal to 20%
of the amount, if any, by which the price per share of common stock of the
Company paid to the undersigned under the Competing Transaction exceeds the
value of the Share and Warrant Consideration offered for each share of common
stock of the Company under the Offer. Such amount shall be paid, at the election
of the undersigned, in cash or in the consideration paid in such Competing
Transaction.
This letter shall be governed by the laws of the State of New York
without regard to the conflicts of law principles thereof. For the purposes of
this letter and the purposes of the transactions contemplated hereby, the
undersigned shall be represented by GAP LP as their duly authorized
representative, and all actions, declarations and representations made by GAP LP
are binding on the undersigned.
General Atlantic Partners (Bermuda), L.P. GAP Coinvestment Partners II, L.P.
By GAP (Bermuda) Limited, its General Partner ("GAP 374,387 Shares
LP")
4,982,138 Shares
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx
Vice President A General Partner
GapStar, LLC by General Atlantic Partners, LLC, its GAPCO GmbH & Co. KG By GAPCO Management
sole member GmbH, its general partner
374,456 Shares 8,019 Shares
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
----------------------------------------------- ----------------------------------
Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx
A Managing Member Managing Director
Accepted and agreed to on the 20th day of October,
2003.
OPEN TEXT CORPORATION
By: /s/ Xxx Xxxxxxx
----------------------------------------------------
Xxx Xxxxxxx
Chief Executive Officer
