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EXHIBIT 10.20
SERVICESOFT TECHNOLOGIES, INC.
SERIES J CONVERTIBLE
PREFERRED STOCK
PURCHASE AGREEMENT
as of January 13, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND PRINCIPLES OF INTERPRETATION.................................................. 1
Section 1.1 Definitions.......................................................................... 1
Section 1.2 Certain Rules of Interpretation...................................................... 4
Section 1.3 Entire Agreement..................................................................... 4
Section 1.4 Applicable Law....................................................................... 5
ARTICLE II PURCHASE AND SALE AND CLOSING................................................................. 5
Section 2.1 Purchase and Sale.................................................................... 5
ARTICLE III REPRESENTATIONS OF SERVICESOFT................................................................ 5
Section 3.1 Organization, Standing and Power..................................................... 5
Section 3.2 Capital Structure of Servicesoft and its Subsidiaries................................ 6
Section 3.3 Authority, Conflicts, Consents....................................................... 8
Section 3.4 Servicesoft Financial Statements..................................................... 9
Section 3.5 Absence of Undisclosed Liabilities................................................... 9
Section 3.6 Absence of Certain Changes........................................................... 10
Section 3.7 Tax Matters.......................................................................... 10
Section 3.8 Title to Properties; Absence of Liens and Encumbrances; Condition of Equipment....... 12
Section 3.9 Intellectual Property................................................................ 12
Section 3.10 Material Contracts................................................................... 14
Section 3.11 Litigation........................................................................... 14
Section 3.12 Environmental and Safety Laws........................................................ 15
Section 3.13 Brokers' and Finders' Fees........................................................... 15
Section 3.14 Employee Benefit Plans and Compensation.............................................. 15
Section 3.15 Insurance............................................................................ 18
Section 3.16 Compliance with Laws................................................................. 18
Section 3.18 Other Relationships.................................................................. 18
Section 3.19 Investment Company Act............................................................... 19
Section 3.20 Private Sale......................................................................... 19
Section 3.21 Small Business....................................................................... 19
Section 3.22 Disclosure Schedule.................................................................. 19
ARTICLE IV REPRESENTATIONS OF THE INVESTORS.............................................................. 19
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Section 4.1 Enforceability....................................................................... 19
Section 4.2 Securities Law Matters............................................................... 20
Section 4.3 Incorporation and Authorization...................................................... 20
ARTICLE V CLOSING CONDITIONS............................................................................ 21
Section 5.1 Conditions in Favor of the Investors................................................. 21
Section 5.2 Conditions in Favor of Servicesoft................................................... 22
ARTICLE VI COVENANTS..................................................................................... 22
Section 6.1 Use of Proceeds...................................................................... 22
Section 6.2 SBIC Regulatory Provisions........................................................... 22
Section 6.3 Regulatory Compliance Cooperation.................................................... 24
ARTICLE VII GENERAL....................................................................................... 24
Section 7.1 Non-Waiver........................................................................... 24
Section 7.2 Indemnification, Survival, etc....................................................... 25
Section 7.3 Assignment........................................................................... 25
Section 7.4 Successors and Assigns............................................................... 25
Section 7.5 Further Assurances................................................................... 25
Section 7.6 Preemptive Rights.................................................................... 25
Section 7.7 Notices.............................................................................. 26
Section 7.8 Public Notices....................................................................... 26
Section 7.9 Counterparts......................................................................... 27
SCHEDULES AND EXHIBITS
Exhibit A - Schedule of Investors
Exhibit B - By-Laws
Exhibit C - Certificate
Exhibit D - Registration Rights Agreement
Exhibit E - Shareholders Agreement
Exhibit F - Disclosure Schedule
Exhibit G - Legal Opinion of XxXxxxxxx, Will & Xxxxx
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SERIES J CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
This Series J Convertible Preferred Stock Purchase Agreement is entered
into as of the 13th day of January, 2000 between Servicesoft Technologies Inc.,
a Delaware corporation ("SERVICESOFT"), and each investor listed on Exhibit A
attached hereto (the "INVESTORS" and, each individually, the "INVESTOR"). Except
as otherwise indicated herein, capitalized terms used herein are defined in
Article I hereof.
WHEREAS, Servicesoft wishes to issue and sell to the Investors an
aggregate of up to 3,481,478 shares of its authorized but unissued Series J
Convertible Preferred Stock, $0.01 par value per share (the "Preferred J
Shares"); and
WHEREAS, the Investors wish to subscribe for and purchase the Preferred
J Shares on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, based upon the mutual covenants and agreements herein
contained, and for other good and sufficient consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
Section 1.1 Definitions. Whenever used in this Agreement, unless there
is something inconsistent in the subject matter or context, the following words
and terms shall have the meanings set out below:
"AFFILIATE" means, with respect to any specified Person, (1) any other
Person who, directly or indirectly, owns or controls, is under common ownership
or control with, or is owned or controlled by, such specified Person, (2) any
other Person who is a director, officer or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities, of the specified Person or a Person described in clause (1) above,
(3) any other Person of whom the specified Person is a director, officer or
partner or is, directly or indirectly, the beneficial owner of 10% or more of
any class of equity securities, (4) any other Person in whom the specified
Person has a substantial beneficial interest or as to whom the specified Person
serves as trustee or in a similar capacity, or (5) any relative or spouse of the
specified Person or any of the foregoing Persons described in clause (1), (2),
(3) or (4) above, any relative of such spouse, any spouse of any such relative
or any other Person who, directly or indirectly, is under common ownership or
control with, or is owned or controlled by such spouse or relative. As used in
this definition, the term "CONTROL" means the possession, directly or
indirectly, of the power to direct
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the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Series J Convertible Preferred Stock Purchase
Agreement, including all schedules and exhibits attached hereto, and all
instruments supplementing or amending or confirming this Agreement. With respect
to this Agreement, the terms "HEREOF," "HERETO" and "HEREUNDER" and similar
expressions mean and refer to this Agreement and not to any particular article
or section; and the words "ARTICLE" or "SECTION" means and refers to the
specified article or section of this Agreement.
"BEST KNOWLEDGE OF SERVICESOFT" means both (i) the actual knowledge of
Xxxxx Xxxxxx and Xxx Xxxxxxxx, the Chief Executive Officer and Chief Financial
Officer, respectively, of Servicesoft and (ii) that knowledge of such
individuals as any of them would be likely to have as a result of exercising
their respective management or fiduciary responsibilities in the ordinary course
of business.
"BUSINESS" means the business of Servicesoft and its Subsidiaries,
being the provision of Internet Customer Service Software and related services.
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which
the principal commercial banks located in New York and Toronto are open for
business during normal banking hours.
"BY-LAWS" means the By-Laws of Servicesoft as in effect as of the
Closing, in substantially the form attached hereto as Exhibit B.
"CERTIFICATE" means the Ninth Amended and Restated Certificate of
Incorporation of Servicesoft as in effect as of the Closing, in substantially
the form attached as Exhibit C hereto.
"CLAIM" means any claim, judgment, order, action, cause of action,
suit, litigation, administrative proceeding, arbitration or proceeding including
any appeal and application for review that may be pending or threatened.
"CLOSING" has the meaning set forth in Section 2.2.
"CLOSING DATE" has the meaning set forth in Section 2.2.
"CODE" means the Internal Revenue Code of 1986, as amended.
"GAAP" means United States generally accepted accounting principles.
"GOVERNMENTAL BODY" means any government, parliament, legislature,
regulatory authority, agency, commission, board or court or other law, rule, or
regulation-making entity having or purporting to have jurisdiction on behalf of
any nation or state or province or other subdivision thereof including any
municipality or district.
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"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in any property (whether tangible or intangible, real
or personal).
"LOSS" means any Claim, loss, expense, liability or other damage,
including reasonable attorney's fees, to the extent of the amount of such Claim,
loss, expense, liability or other damage.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets, financial condition and, results of operations of Servicesoft
and each of its Subsidiaries, taken as a whole.
"ORGANIC DOCUMENTS" means relative to any Person (other than an
individual) the documents which establish its legal existence or which govern
its internal affairs, such as its certificate of incorporation, by-laws, and all
shareholder agreements, voting trusts and similar agreements or arrangements
authorized to its capital stock or other equity interests.
"PERSON" means any natural person, legal or personal representative,
partnership, company, corporation, incorporated syndicate, unincorporated or
incorporated association, trust or Governmental Body, howsoever designated or
constituted and whether acting in an individual, fiduciary or other capacity.
"PURCHASED SHARES" means, with respect to any Investor, the Preferred
J Shares to be issued by Servicesoft to, and purchased by such Investor at the
Closing pursuant to this Agreement, as more particularly described on Exhibit A
hereto.
"REGISTRATION RIGHTS AGREEMENT" means the Seventh Amended and Restated
Registration Rights Agreement to be entered into by Servicesoft, the Investors
and certain other major shareholders of Servicesoft on the Closing Date (as
defined herein) in substantially the form attached hereto as Exhibit D.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission thereunder, all as the same shall be in effect at the time.
"SHAREHOLDERS AGREEMENT" means the Second Amended and Restated
Shareholders Agreement to be entered into among Servicesoft, the Investors and
certain other parties on the Closing Date, in substantially the form attached
hereto as Exhibit E.
"SUBSIDIARY," or collectively ,"SUBSIDIARIES," of any Person means any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the Board of Directors or
other Persons performing similar functions are directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such Person.
"TAX," or collectively, "TAXES," means (i) any and all federal, state,
local and foreign taxes, and similar assessments and other governmental charges,
duties, impositions, fees, royalties, withholdings, contributions and
liabilities, including taxes based upon or measured by
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gross receipts, gross income, gross profits, sales (including goods and
services), use and occupation, and value added, ad valorem, transfer, franchise,
stamp, documentary, severance, net income, capital, employer health, workers
compensation, pension, withholding, payroll, recapture, employment, excise and
property taxes, assessments, charges, duties, impositions, fees, royalties,
withholdings, contributions and liabilities, together with all interest,
penalties and additions imposed with respect to such amounts and any expenses
incurred in connection with the determination, settlement or litigation of any
tax liability; (ii) any liability for the payment of any amounts of the type
described in clause (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group for any period; and (iii) any liability
for the payment of any amounts of the type described in clause (i) or (ii) as a
result of any express or implied obligation to indemnify any other Person or as
a result of any obligations under any agreements or arrangements with any other
Person with respect to such amounts and including any liability for Taxes of a
predecessor entity.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TRANSACTION DOCUMENTS" means the Registration Rights Agreement and the
Shareholders Agreement.
Section 1.2 Certain Rules of Interpretation. In this Agreement:
(a) time is of the essence in the performance of the parties'
respective obligations;
(b) unless otherwise specified, all references to monetary
amounts are to United States dollars; and
(c) the use of words in the singular or plural, or with a
particular gender, shall not limit the scope or exclude the application of any
provision of this Agreement to such Person or Persons or circumstances as the
context otherwise permits.
Section 1.3 Entire Agreement. This Agreement together with the
Transaction Documents, the Certificate and other documents to be delivered
pursuant to this Agreement, constitute the entire agreement between the parties
or any of them pertaining to the subject matter of this Agreement and supersede
all prior agreements, understandings, negotiations and discussions, whether oral
or written, of the parties and there are no warranties, representations or other
agreements between the parties or any of them in connection with the subject
matter of this Agreement except as specifically set forth in this Agreement and
any document delivered pursuant to this Agreement. This Agreement may be amended
and any provision hereof waived with the prior written consent of the Company
and a majority-in-interest of the Investors; provided, however, that any
amendment which directly, materially and adversely affects any right
specifically granted to a particular Investor in a manner different from other
Investors shall not be effective unless such Investor has consented to that
amendment.. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions
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(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 1.4 Applicable Law. This Agreement shall be construed in
accordance with the internal laws of the State of Delaware.
ARTICLE II
PURCHASE AND SALE AND CLOSING
Section 2.1 Purchase and Sale. Upon the terms and subject to the
conditions herein, and in reliance on the representations, warranties and
covenants set forth herein, at the Closing (as hereinafter defined) each
Investor named on Exhibit A hereto shall, individually and not jointly, purchase
from Servicesoft, and Servicesoft shall issue and sell to each such Investor,
the number of Preferred J Shares set forth opposite the name of such Investor in
Exhibit A hereto, for a purchase price of $9.03 per share, or an aggregate of
3,481,478 Preferred J Shares at an aggregate purchase price of $31,437,989 (the
"TOTAL PURCHASE PRICE").
Section 2.2 Closing. The closing (the "CLOSING") of the sale and
purchase of the Preferred J Shares to the Investors shall take place at the
offices of XxXxxxxxx, Will & Xxxxx at 10:00 a.m. on the date hereof, or such
time and place as shall be mutually agreed upon by Servicesoft and a majority
of-in-interest of the Investors (the "CLOSING DATE"). On the Closing Date,
Servicesoft shall deliver or cause to be delivered to each Investor identified
on Exhibit A stock certificates representing the number of Preferred J Shares
purchased by it free and clear of any and all Liens (except as otherwise
contemplated hereunder) issued in each of such Investor's name or in the name of
its nominee, against delivery by such Investor of such Investor's portion of the
Total Purchase Price therefor by certified check or wire transfer of immediately
available funds.
ARTICLE III
REPRESENTATIONS OF SERVICESOFT
Servicesoft represents and warrants to each of the Investors, severally
and not jointly, that except as set forth in Exhibit F hereto (the "DISCLOSURE
SCHEDULE"), as of the date hereof:
Section 3.1 Organization, Standing and Power. Except as set forth in
Section 3.1 of the Disclosure Schedule, Servicesoft and each of its Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, except, with respect to Subsidiaries,
to the extent that the failure to be in good standing would not have a Material
Adverse Effect. Except for the Subsidiaries listed in Section 3.1 of the
Disclosure Schedule, Servicesoft has no direct or indirect interest in, and owns
no capital stock or other securities, or rights or obligations to acquire the
same, of any other Person. Servicesoft and each of its Subsidiaries has the
corporate power to own its properties and to carry on the Business as now being
conducted and as proposed to be conducted and is duly qualified to do business
and, except as set forth in Section 3.1 of the Disclosure Schedule, is in good
standing in each jurisdiction in which it is required to be so qualified except
to the extent that the failure to be so
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qualified would not have a Material Adverse Effect. The minute books containing
the records of the meetings of the stockholders, the Board of Directors and any
committees of the Board of Directors, the stock certificate books and the stock
record books of Servicesoft and each of its Subsidiaries are correct and
complete in all material respects. None of Servicesoft and its Subsidiaries is
in default under or in violation of any provisions of its Organic Documents,
except where such default or violation would not have a Material Adverse Effect.
Section 3.2 Capital Structure of Servicesoft and its Subsidiaries.
(a) Servicesoft. Immediately prior to the Closing, the
authorized capital stock of Servicesoft consists of 30,000,000 shares of Common
Stock, par value $0.01 per share (the "SERVICESOFT COMMON SHARES"), of which
4,178,590 are issued and outstanding, and 16,450,002 shares of Preferred Stock,
par value $0.01 per share (the "SERVICESOFT PREFERRED SHARES"), designated as
follows: (i) 8,000,000 shares of Series H Convertible Preferred Stock (the
"SERVICESOFT H PREFERRED SHARES"), of which 5,380,130 shares are issued and
outstanding, (ii) 4,450,000 shares of Series I Convertible Preferred Stock (THE
"SERVICESOFT I PREFERRED SHARES"), of which 3,982,271 SHARES are issued and
outstanding, (iii) 4,000,000 Preferred J Shares, none of which are issued and
outstanding, (iv) one share of Series X Special Preferred Stock (the
"SERVICESOFT X PREFERRED SHARE"), which is issued and outstanding, and (v) one
share of Series Y Special Preferred Stock (the "SERVICESOFT Y PREFERRED SHARE"),
which is issued and outstanding. Servicesoft has issued warrants (the
"SERVICESOFT WARRANTS") to purchase an aggregate of 63,025 shares of Servicesoft
H Preferred Shares and 20,782 shares of Servicesoft Common Shares. Except as set
forth in Section 3.2 of the Disclosure Schedule, all outstanding Servicesoft
Common Shares, Servicesoft H Preferred Shares, Servicesoft I Preferred Shares,
the Servicesoft X Preferred Shares and the Servicesoft Y Preferred Share are
duly authorized, validly issued, fully paid and non-assessable and are free of
any Liens other than any Liens created by or imposed upon the holders thereof
and, except as set forth in the Certificate and the Shareholders Agreement, are
not subject to pre-emptive rights or rights of first refusal created by statute,
or any agreement to which Servicesoft is a party or by which it is bound. As of
the Closing Date, the Series X Preferred Share may vote for 973,762 shares of
Servicesoft Canada Exchangeable Common Shares (as defined below) and the Series
Y Preferred Share may vote for 1,657,893 shares of Servicesoft Canada
Exchangeable Preferred Shares (as defined in Section 3.2(b) below). As of the
Closing Date, Servicesoft has reserved authorized but unissued shares of
Servicesoft Common Shares in an amount that would be sufficient to effect the
conversion of all outstanding shares of Servicesoft Preferred Shares (including
Servicesoft H Preferred Shares issued upon exercise and conversion of the
Servicesoft Warrants for Series H Preferred Shares and Servicesoft H Preferred
Shares issued upon exchange of Servicesoft Canada Exchangeable Preferred Shares
(as defined in Section 3.2(b) below)), to effect the exchange of all outstanding
Servicesoft Canada Exchangeable Common Shares, and to effect the exercise of
Servicesoft Warrants for Servicesoft Common Shares. Servicesoft has reserved
2,200,000 Servicesoft Common Shares for issuance to employees, directors and
consultants pursuant to its 1994 Stock Option Plan (the "SERVICESOFT 1994 STOCK
OPTION PLAN") of which 2,099,785 shares are subject to outstanding unexercised
options. Servicesoft has reserved 1,876,498 Servicesoft Common Shares for
issuance to employees, directors and consultants
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pursuant to its 1999 Stock Option and Grant Plan (the "SERVICESOFT 1999 STOCK
OPTION PLAN", and, together with the Servicesoft 1994 Stock Option Plan, the
"SERVICESOFT STOCK OPTION PLANS") of which 851,855 shares are subject to
outstanding unexercised options and 227,000 shares are subject to restricted
stock grants. Other than as set forth in this Section 3.2, the Disclosure
Schedule or the Certificate, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which Servicesoft is a
party or by which it is bound obligating Servicesoft to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of capital stock of Servicesoft.
(b) Servicesoft Canada. The authorized capital of Servicesoft
Technologies (Canada) Inc. ("SERVICESOFT Canada") consists of an unlimited
number of common shares ("SERVICESOFT CANADA COMMON SHARES"), of which 100 are
issued and outstanding and owned by Servicesoft, an unlimited number of
Exchangeable Common Shares (the "SERVICESOFT CANADA EXCHANGEABLE COMMON
SHARES"), of which 973,762 are issued and outstanding, and an unlimited number
of Exchangeable Preferred Shares (the "SERVICESOFT CANADA EXCHANGEABLE PREFERRED
SHARES"), of which 1,657,893 are issued and outstanding. Servicesoft Canada has
issued Warrants (the "SERVICESOFT CANADA WARRANTS") to purchase an aggregate of
77,855 Servicesoft Canada Exchangeable Common Shares. Each of the Servicesoft
Canada Exchangeable Common Shares is exchangeable for one of the Servicesoft
Common Shares and each of the Servicesoft Canada Exchangeable Preferred Shares
is exchangeable for one of the Servicesoft H Preferred Shares. Except as set
forth on Schedule 3.2 of the Disclosure Schedule, all outstanding Servicesoft
Canada Common Shares, Servicesoft Canada Exchangeable Common Shares and
Servicesoft Canada Exchangeable Preferred Shares are duly authorized, validly
issued, fully paid and non-assessable and are free of any Liens other than any
Liens created by or imposed upon the holders thereof, and, except as set forth
in Servicesoft Canada's Charter and the Shareholders Agreement, are not subject
to pre-emptive rights or rights of first refusal created by statute, or any
agreement to which Servicesoft is a party or by which it is bound. Other than as
set forth in this Section 3.2 or Servicesoft Canada's Charter, there are no
other options, warrants, calls, rights, commitments or agreements of any
character to which Servicesoft Canada is a party or by which it is bound
obligating Servicesoft Canada to issue, deliver, sell, repurchase or redeem, or
cause to be issued, delivered, sold, repurchased or redeemed, any shares of
capital stock of Servicesoft Canada.
(c) Balisoft Ltd. The authorized capital of Balisoft Ltd.
consists of 32,600 ordinary shares, of which 1,000 are issued and outstanding,
and 100 exchangeable preferred shares, all of which are issued and outstanding.
All of the ordinary shares are owned by or are currently held in trust for
Servicesoft Canada. The 100 exchangeable preferred shares are, in aggregate,
held by Gemini Xxxxxx XX L.P., Gemini Xxxxxx XX Parallel Fund Limited
Partnership and Advent PGGM Gemini L.P. and are exchangeable into an aggregate
of 567,050 Servicesoft Canada Exchangeable Preferred Shares each of which is
exchangeable for one share of the Servicesoft H Preferred Shares.
(d) E-Serv Solutions Inc. The authorized capital of E-Serv
Solutions Inc. consists of 100 shares of common stock with a par value of $0.01
per share, all of
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which are issued and outstanding, and 10,000 shares of preferred stock with a
par value of $0.01 per share, none of which are issued and outstanding. All of
the issued and outstanding common shares are owned by Servicesoft Canada.
(e) E-Serv Solutions (Canada) Inc. The authorized capital of
E-Serv Solutions (Canada) Inc. consists of 1,000,000 common shares, of which 100
shares are issued and outstanding. All of the issued and outstanding common
shares are owned by E-Serv Solutions Inc.
(f) Servicesoft Europe N.V. The authorized capital of
Servicesoft Europe N.V. consists of 10,000 shares, all of which are issued and
outstanding. All of the issued and outstanding shares are owned by Servicesoft.
(g) Servicesoft Technologies (UK) Inc. The authorized capital
of Servicesoft Technologies (UK) Inc. consists of 100,000 shares of common
stock, par value GBP1.0 per share, all of which shares are issued and
outstanding and all of the issued and outstanding common shares are owned by
Servicesoft.
(h) Servicesoft (Rosh) Ltd. The authorized capital of
Servicesoft (Rosh) Ltd. consists of 1,600,000 ordinary shares, of which 957,053
are issued and outstanding. 957,047 of the issued and outstanding ordinary
shares are owned by Servicesoft; five of the issued and outstanding ordinary
shares are held by individual investors and one issued and outstanding share is
held by Elron Electronic Industries Ltd.
(i) Servicesoft Deutschland GmbH. All of the authorized
capital of Servicesoft Deutschland GmbH is owned by Servicesoft, except for one
Common Share held by an individual.
(j) Internet Business Advantage, Inc. The authorized capital
of Internet Business Advantage, Inc. consists of 100 common shares, of which 100
are issued and outstanding. All of the issued and outstanding common shares are
owned by Servicesoft.
Section 3.3 Authority, Conflicts, Consents.
(a) Servicesoft has all requisite corporate power and
authority to enter into this Agreement and the Transaction Documents and to
consummate the transactions contemplated hereby and thereby, including the
issuance of the Purchased Shares (and any Common Shares issuable upon conversion
thereof). The execution, delivery and performance of this Agreement, the
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby, including the issuance of the Purchased Shares (and any
Common Shares issuable upon conversion thereof), have been duly authorized by
all necessary corporate and other action on the part of Servicesoft. This
Agreement and each of the Transaction Documents have been duly executed and
delivered by Servicesoft and each constitutes a valid and binding obligation,
enforceable in accordance with their respective terms.
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(b) To the Best Knowledge of Servicesoft, the execution and
delivery of this Agreement and the Transaction Documents by Servicesoft does
not, and the consummation of the transactions contemplated hereby and thereby,
including the issuance of the Purchased Shares (and any Common Shares issuable
upon conversion thereof), will not, (i) materially conflict with any provision
of the Organic Documents of Servicesoft, or the relevant Organic Documents of
any of its Subsidiaries, (ii) conflict with, result in the breach of or
constitute a default under any mortgage, indenture, lease, contract or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Servicesoft or any of its Subsidiaries or any of their properties or assets
which conflict results in a Material Adverse Effect or (iii) result in the
creation or imposition of any material Lien or Claim on any asset of Servicesoft
or any of its Subsidiaries.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Body is required by
or with respect to Servicesoft or any of its Subsidiaries in connection with the
execution and delivery of this Agreement, the Transaction Documents or the
consummation of the transactions contemplated hereby or thereby, including the
issuance of the Purchased Shares (and any Common Shares issuable upon conversion
thereof), except for such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
securities laws. Servicesoft has obtained all necessary consents, waivers and
approvals of third parties applicable to the operations of Servicesoft or its
Subsidiaries that are required to be obtained by Servicesoft or its Subsidiaries
in connection with the execution and delivery of this Agreement and the
Transaction Documents by Servicesoft or the consummation by Servicesoft of the
transactions contemplated hereby or thereby, including the issuance of the
Purchased Shares (and any Common Shares issuable upon conversion thereof) except
where the failure to obtain any such consent would not result in a Material
Adverse Effect.
Section 3.4 Servicesoft Financial Statements. Servicesoft has furnished
to the Investors (i) its unaudited balance sheet as of September 30 1999, (the
"Base Balance Sheet") and the related statement of operations and statements of
stockholders equity and cash flows for the 9 months ended September 30, 1999,
(ii) the separate audited financial statements dated December 31, 1998 of each
of Servicesoft (which was then named Servicesoft Corporation) and Balisoft
Technologies Inc. (which was acquired by Servicesoft on February 12, 1999) and
(iii) its consolidated unaudited statements of stockholders equity dated
September 30, 1998 (collectively, the SERVICESOFT FINANCIAL STATEMENTS"). The
Servicesoft Financial Statements have been prepared in accordance with GAAP
applied on a basis consistent throughout the periods indicated and consistent
with each other. The Servicesoft Financial Statements are in accordance with the
books and records of Servicesoft and fairly present the consolidated financial
condition and operating results of Servicesoft at the dates and during the
periods indicated therein (subject, in the case of unaudited statements, to
normal, recurring year-end adjustments and the omission of certain footnote
disclosures).
Section 3.5 Absence of Undisclosed Liabilities. Neither Servicesoft nor
any of its Subsidiaries have any obligations or liabilities of any nature
(matured or unmatured, fixed or contingent) other than (i) those set forth or
adequately provided for in the Servicesoft Financial
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Statements, (ii) those incurred in the ordinary course of business and not
required to be set forth in the footnotes to audited financial statements
prepared in accordance with GAAP, (iii) those incurred in the ordinary course of
business since the date of the Base Balance Sheet and consistent with past
practice, which do not in any event exceed $100,000 in the aggregate, and (iv)
those set forth in Section 3.5 of the Disclosure Schedule.
Section 3.6 Absence of Certain Changes. Since the date of the Base
Balance Sheet, Servicesoft and each of its Subsidiaries has conducted the
Business in the ordinary course consistent with past practice and neither
Servicesoft nor any of its Subsidiaries have: (a) made any change, event or
condition that has resulted in a Material Adverse Effect; (b) acquired, sold or
transferred any material tangible or intangible asset of Servicesoft or any of
its Subsidiaries other than in the ordinary course of business and consistent
with past practice; (c) made any change in accounting methods or practices by
Servicesoft or any of its Subsidiaries or made any revaluation of any of their
respective assets; (d) issued or agreed to issue or any commitment to issue any
equity security, bond, note or other security of Servicesoft or any of its
Subsidiaries (except for the issuance of stock and options to employees,
directors and consultants in the ordinary course of business and as otherwise
contemplated by this Agreement); (e) declared, set aside, or paid a dividend or
other distribution with respect to the shares of Servicesoft or any of its
Subsidiaries, or directly or indirectly redeemed, purchased or otherwise
acquired of any of their respective shares of capital stock; (f) except in the
ordinary course of business mortgaged, pledged or subjected to any Lien any of
its material assets, tangible or intangible, other than Liens of current real
property taxes not yet due and payable; (g) sold, assigned, transferred or
granted any exclusive license with respect to any Servicesoft Intellectual
Property (as defined in Section 3.9, below); (h) suffered any substantial loss
of property or business, including losses arising from the acceleration,
modification, cancellation or termination of any agreement, contract, lease or
license (or series of related agreements, contracts, leases or licenses) to
which Servicesoft or any of its Subsidiaries is a party, or waived any right of
substantial value other than in the ordinary course of business; (i) made any
change in officer compensation except in the ordinary course of business and
consistent with past practice; (j) made any material change in the manner of
business or operations of Servicesoft or any of its Subsidiaries; or (k)
negotiated or agreed to do any of the things described in the preceding clauses
(a) through (j).
Section 3.7 Tax Matters.
(a) Except as set forth in Section 3.7 of the Disclosure
Schedule and where the failure to do so would not have a Material Adverse
Effect, Servicesoft and each of its Subsidiaries has (i) timely and properly
filed all Tax Returns they were required to file (and all such Tax Returns were
correct and complete in all material respects), (ii) paid all Taxes owed by
Servicesoft and each of its Subsidiaries (whether or not shown on any Tax
Return), and (iii) properly made all required Tax estimates, deposits,
prepayments and similar reports or payments for current periods. Neither
Servicesoft or any of its Subsidiaries is the beneficiary of any extension of
time within which to file any Tax Return. To the Best Knowledge of Servicesoft,
except as disclosed in Section 3.7 of the Disclosure Schedule, neither
Servicesoft nor any of its Subsidiaries is delinquent in the filing of any Tax
Return. To the Best Knowledge of Servicesoft, no claim is currently pending by
an authority in a jurisdiction where Servicesoft or any of its Subsidiaries does
not file Tax Returns that Servicesoft or any of its Subsidiaries is or may be
subject to taxation by that jurisdiction. There are no Liens on any of the
assets of
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Servicesoft or any of its Subsidiaries that arose in connection with any failure
(or alleged failure) to pay any Tax.
(b) Servicesoft and each of its Subsidiaries has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party.
(c) Neither Servicesoft nor any of its Subsidiaries has
received any notice of any adjustment of or deficiency for any Tax or claim for
additional Taxes that has been asserted or assessed against Servicesoft or any
of its Subsidiaries. Neither Servicesoft nor any of its Subsidiaries has any
dispute with any taxing authority as to Taxes. There are no audit examinations
being conducted or, to the Best Knowledge of Servicesoft, and there is no
deficiency or refund litigation or controversy in progress or, to the Best
Knowledge of Servicesoft threatened, with respect to any Taxes previously paid
by Servicesoft or any of its Subsidiaries or with respect to any Tax Returns
previously filed by or on behalf of Servicesoft or any of its Subsidiaries.
(d) Neither Servicesoft nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(e) Except as set forth in Section 3.7 of the Disclosure
Schedule neither Servicesoft nor any of its Subsidiaries has waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency. Neither Servicesoft nor any of its
Subsidiaries has ever been a member of an affiliate group of corporations filing
a combined federal income Tax Return nor does Servicesoft or any of its
Subsidiaries have any liability for Taxes of any other person under Treasury
Regulations Section1.1502-6 (or any similar provision of foreign, state or local
law) or otherwise. Neither Servicesoft nor any of its Subsidiaries is a party to
any tax sharing or allocation arrangement.
(f) Except as set forth in Section 3.7 of the Disclosure
Schedule, neither Servicesoft nor any of its Subsidiaries has made any payment,
is obligated to make any payment, or is a party to any agreement that could
obligate it to make any payment that will be an "excess parachute payment" under
Section 280G of the Code.
(g) Neither Servicesoft nor any of its Subsidiaries has filed
a consent under Code Section 341(f) concerning collapsible corporations. Neither
Servicesoft nor any of its Subsidiaries has made any payments, is obligated to
make any payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under Code Section 280G. Servicesoft and each of its Subsidiaries have disclosed
on its federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the meaning of
Code Section 6662.
(h) The unpaid accrued Taxes of Servicesoft and each of its
Subsidiaries (a) did not, as of the date of the Base Balance Sheet, exceed the
reserve for Tax liability set forth on the Financial Statements, and (b) do not
exceed such reserve as adjusted for the passage of time
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through the Closing Date in accordance with Servicesoft's past custom and
practice in filing their Tax Returns.
Section 3.8 Title to Properties; Absence of Liens and Encumbrances;
Condition of Equipment.
(a) Section 3.8(a) of the Disclosure Schedule sets forth a
list of all real property currently owned, leased or subleased by Servicesoft or
any of its Subsidiaries and, in the case of leased property, the name of the
lessor, the date of the lease and each amendment thereto and the aggregate
annual rental and/or other fees payable under any such lease. All such leases
are in full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or
both, would constitute a default) of Servicesoft which would result in a
Material Adverse Effect.
(b) Servicesoft and each of its Subsidiaries have good and
valid title to, or, in the case of leased properties and assets, valid leasehold
interests in, all of their tangible properties and assets free and clear of any
material Liens, except as reflected in the Servicesoft Financial Statements and
except for Liens for Taxes not yet due and payable.
(c) The equipment owned or leased by Servicesoft and/or its
Subsidiaries, taken as a whole, is (i) adequate for the conduct of the Business
as currently conducted, (ii) generally in good operating condition, subject to
normal wear and tear, and (iii) reasonably maintained.
Section 3.9 Intellectual Property.
(a) Except as set forth in Section 3.9(a) of the Disclosure
Schedule, Servicesoft and each of its Subsidiaries owns, or is licensed or
otherwise possesses legally enforceable rights to use, all patents, industrial
designs, trademarks, trade names, service marks, copyrights, Internet domain
names, and any applications therefor, net lists, schematics, technology,
know-how, computer software programs or applications (in both source code and
object code form as to software programs and applications owned by Servicesoft
and each of its Subsidiaries and in object code form as to software programs and
applications licensed by Servicesoft and each of its Subsidiaries), and tangible
or intangible proprietary information or material (collectively, "SERVICESOFT
INTELLECTUAL PROPERTY") that are used in the Business as currently conducted or
as proposed to be conducted by Servicesoft and its Subsidiaries.
(b) Section 3.9(b) of the Disclosure Schedule sets forth a
complete list of all patents, industrial designs, registered and material
unregistered trademarks, registered copyrights, trade names and service marks,
Internet domain names, and any applications therefor in respect of any of the
foregoing, included in the Servicesoft Intellectual Property, and specifies,
where applicable, the jurisdictions in which the rights to such Servicesoft
Intellectual Property have been issued or registered or in which an
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application for such issuance and registration has been filed, including the
respective registration or application numbers and the names of all registered
owners.
(c) Section 3.9(c) of the Disclosure Schedule sets forth a
complete list of all licenses, sublicenses and other agreements (including all
amendments and supplements thereto) to which Servicesoft or any of its
Subsidiaries are a party and pursuant to which Servicesoft and/or any of its
Subsidiaries are entitled to use intellectual property of a third party (other
than licenses to use off-the-shelf software which is generally commercially
available) or any other Person is authorized to use Servicesoft Intellectual
Property that is material to Servicesoft and/or its Subsidiaries, taken as a
whole, and includes the identity of all parties thereto. To the Best Knowledge
of Servicesoft, neither Servicesoft nor any of its Subsidiaries are in violation
in any material respect of any license, sublicense or agreement described on
such list. The execution and delivery of this Agreement by Servicesoft, and the
consummation of the transactions contemplated hereby, will not (i) cause
Servicesoft or any of its Subsidiaries to be in violation or default in any
material respect under any such license, sublicense or agreement, (ii) entitle
any other party to any such license, sublicense or agreement to terminate or
modify such license, sublicense or agreement or (iii) require Servicesoft or any
of its Subsidiaries to repay any funds already received by it from a third party
or make to a third party any incremental payment. Except for rights granted in
agreements, licenses or sublicenses described in Sections 3.9(b) and (c) of the
Disclosure Schedule, to the Best Knowledge of Servicesoft, Servicesoft or one of
its Subsidiaries is the sole and exclusive owner or licensee of, with all right,
title and interest in and to (free and clear of any Liens), the Servicesoft
Intellectual Property, and has sole and exclusive rights (and is not
contractually obligated to pay any compensation to any third party in respect
thereof) to the use thereof or the material covered thereby in connection with
the services or products in respect of which the Servicesoft Intellectual
Property is being used.
(d) Except as set forth on Schedule 3.9(d), no Claims
contesting Servicesoft's ownership of or right to use Servicesoft Intellectual
Property, or asserting any right of a third party to use any Servicesoft
Intellectual Property, have been asserted or, to the Best Knowledge of
Servicesoft, threatened against Servicesoft or any of its Subsidiaries or their
agents, nor to the Best Knowledge of Servicesoft are there any valid grounds for
any bona fide Claims (i) against the use by Servicesoft or any of its
Subsidiaries of any Servicesoft Intellectual Property used in the Business as
currently conducted by Servicesoft or any of its Subsidiaries, or (ii)
challenging the validity, effectiveness, or ownership by Servicesoft of any of
the Servicesoft Intellectual Property.
(e) To the Best Knowledge of Servicesoft (i) there is no
material unauthorized use, infringement or misappropriation of any of the
Servicesoft Intellectual Property by any third party, including any employee or
former employee of Servicesoft or its Subsidiaries, and (ii) no Servicesoft
Intellectual Property or product of Servicesoft or any of its Subsidiaries is
subject to any outstanding Claim restricting in any manner the licensing thereof
by Servicesoft or any of its Subsidiaries.
(f) Servicesoft and each of its Subsidiaries has a policy
requiring each employee and contractor materially involved in proprietary
aspects of the Business to
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execute ownership and nondisclosure of proprietary information and
confidentiality agreements, and all current and former employees, consultants
and contractors of Servicesoft and each of its Subsidiaries involved in
proprietary aspects of the Business have executed such an agreement.
(g) Servicesoft and each of its Subsidiaries have been and are
in compliance with the Export Administration Act of 1979, as amended, and all
regulations promulgated thereunder.
(h) Servicesoft and each of its Subsidiaries has reviewed the
areas within their respective business and operations which would reasonably be
likely to be adversely affected by the "Year 2000 issue" (that is, the risk that
computer applications used or produced by Servicesoft and its Subsidiaries may
be unable to recognize and perform properly date sensitive functions involving
certain dates prior to and any date on or after January 1, 2000). Based upon
such review and plan, Servicesoft believes that the "Year 2000 issue" will not
have a Material Adverse Effect on it or any of its Subsidiaries. Servicesoft
represents that the Servicesoft Intellectual Property, except for Servicesoft
Intellectual Property currently in development or other prerelease form not
provided to customers, so long as all hardware and software used in combination
with the Servicesoft Intellectual Property provide correct calendar date data,
will process and present calendar dates falling on of after January 1, 2000 in
the same manner as the Servicesoft Intellectual Property processes and presents
calendar dates falling on or before December 31, 1999.
Section 3.10 Material Contracts.
(a) Section 3.10 of the Disclosure Schedule lists all written
contracts or commitments: (i) involving any annual payment in excess of
$100,000, (ii) in respect of any sales made in the ordinary course of business,
involving annual receipts in excess of $200,000, and (iii) in respect of any
other matters, involving annual receipts in excess of $100,000 (collectively,
"MATERIAL CONTRACTS") to which Servicesoft or any of its Subsidiaries is a
party. Servicesoft has made available to the Investors true and complete copies
of all written Material Contracts in effect on the date hereof.
(b) To the Best Knowledge of Servicesoft, each of the Material
Contracts is in full force and effect and unamended (except for such amendments
as are disclosed on Section 3.10 of the Disclosure Schedule) and is valid,
binding and enforceable in accordance with its terms. To the Best Knowledge of
Servicesoft, no party to any Material Contract or successor or assignee thereof
is in default of any material provision thereof and there exists no event or
condition which does or would, by itself or with giving of notice or the passage
of time or both, constitute a material breach of or default under any Material
Contract or results in the acceleration of any obligation thereunder.
Section 3.11 Litigation. There is no Claim pending before any
Governmental Body or, to the Best Knowledge of Servicesoft, threatened against
Servicesoft or any of its Subsidiaries or any of their properties or any of
their officers or directors (in their capacities as such) that would,
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if adversely determined, have Material Adverse Effect. There is no judgment,
decree or order against Servicesoft or any of its Subsidiaries, or any of their
respective directors or officers (in their capacities as such), seeking to
enjoin or delay any of the transactions contemplated by this Agreement and/or
the Transaction Documents or that would, if adversely determined, have a
Material Adverse Effect.
Section 3.12 Environmental and Safety Laws. To the Best Knowledge of
Servicesoft, neither Servicesoft nor any of its Subsidiaries is in violation of
any applicable statute, law or regulation relating to the environment or
occupational health and safety, except to the extent such violation would not
have a Material Adverse Effect. No material expenditures are or will be required
in order to comply with any such existing statute, law or regulation.
Section 3.13 Brokers' and Finders' Fees. Neither of Servicesoft nor any
of its Subsidiaries has incurred, nor will they incur, directly or indirectly,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
Section 3.14 Employee Benefit Plans and Compensation.
(a) Section 3.14(a) of the Disclosure Schedule contains a true
and complete list of each "employee pension benefit plan" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), and any plan, agreement or program providing for pensions, retirement
income, deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation that (i) is entered into,
maintained or contributed to, as the case may be, by Servicesoft or any of its
Subsidiaries and (ii) covers any employee or former employee of Servicesoft or
any of its Subsidiaries (collectively "BENEFIT ARRANGEMENTS"). Each Benefit
Arrangement (and each related trust insurance contract or fund) has been
maintained and administered in material compliance with its terms and with the
requirements prescribed by ERISA, the Code and all other statutes, laws,
ordinances and regulations which are applicable thereto. The requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
have been met with respect to each Benefit Arrangement which is a group health
plan under Section 5000(b)(1) of the Code. All required reports and descriptions
(including Form 5500 Annual Reports, summary annual reports, PBGC-l's and
summary plan descriptions) have been timely filed and distributed appropriately
with respect to each such Benefit Arrangement. No Benefit Arrangement has
unfunded liabilities that, as of the Closing, will not be offset by insurance or
fully accrued or reserved against in the Servicesoft Financial Statements.
Except to the extent required under COBRA, neither Servicesoft nor any of its
Subsidiaries maintains, contributes to, or has any liability or obligation to
contribute to any funded or unfunded medical, health or life insurance plan or
similar arrangement for present or future retirees, their spouses or dependents
or present or future terminated employees, their spouses or dependents. No
Benefit Arrangement has applied for or received a waiver of the minimum funding
standards imposed by Section 412 of the Code, and no Benefit Arrangement has an
"accumulated funding deficiency" within the meaning of Section 412(a) of the
Code as of the most recent plan year. Each Benefit
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Arrangement subject to Title IV of ERISA has paid all premiums when due to the
Pension Benefit Guaranty Corporation ("PBGC"). Neither Servicesoft nor any of
its Subsidiaries have incurred, and none of the directors and officers (and
employees with responsibility for employee benefits matters) of Servicesoft or
any of its Subsidiaries have any reason to expect that they will incur, any
liability to the PBGC (other than PBGC premium payments) or otherwise under
Title IV of ERISA (including any withdrawal liability as defined in Section 4201
of ERISA) or under the Code with respect to any such Benefit Arrangement which
is an employee pension benefit plan under Section 3(2) of ERISA. Except as
required by law or by the provisions of such Benefit Arrangement, no condition
exists that would prevent Servicesoft or any of its Subsidiaries from amending
or terminating any Benefit Arrangement.
(b) Except as disclosed in Section 3.14(b) of the Disclosure
Schedule, there are no investigations by any Governmental Body, termination
proceedings or other Claims (except Claims for benefits payable in the normal
operation of the Benefit Arrangements), suits or proceedings against or
involving any Benefit Arrangement that would result in material liability
against Servicesoft and its Subsidiaries or any Benefit Arrangement. Except as
disclosed in Section 3.14(b) of the Disclosure Schedule, the Benefit
Arrangements that are pension benefit plans have received determination letters
from the Internal Revenue Service to the effect that such Benefit Arrangements
are qualified and exempt from federal income taxes under Sections 401(a) and
501(a), respectively, of the Code, and no such determination letter has been
revoked nor, to the Best Knowledge of Servicesoft, has revocation been
threatened, nor to the BEst Knowledge of Servicesoft are there any facts that
could result in any such revocation, nor has any such Benefit Arrangement been
amended since the date of its most recent determination letter or application
therefor in any respect that would adversely affect its qualification. No
"prohibited transaction" (as defined in Section 4975 of the Code or Section 406
of ERISA) has occurred which involves the assets of any Benefit Arrangement and
which could subject any employees of Servicesoft or any of its Subsidiaries, a
trustee, administrator or other fiduciary of any trusts created under any
Benefit Arrangement to the tax or penalty on prohibited transactions imposed by
Section 4975 of the Code or the sanctions imposed under Title I of ERISA. To the
Best Knowledge of Servicesoft, no fiduciary has any liability for breach of
fiduciary duty or any other failure to at or comply in connection with the
administration or investment of the assets of any Benefit Arrangement. Except as
disclosed in Section 3.14(b) of the Disclosure Schedule, none of the Benefit
Arrangements have been terminated nor have there been any "reportable events"
(as defined in Section 4043 of ERISA and the regulations thereunder) with
respect thereto. The execution of this Agreement and the Transaction Documents
and the consummation of the transactions contemplated hereby and thereby will
not result in the acceleration or early vesting of any payments or benefits
under any Benefit Arrangement or in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code.
(c) Except as set forth in Section 3.14(c) of the Disclosure
Schedule, neither Servicesoft nor any of its Subsidiaries is a member of a
controlled group of corporations, within the meaning of Section 414(b) of the
Code, is a member of a group of trades or businesses under common control,
within the meaning of Section 414(c) of
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the Code, or is a member of an affiliated service group, within the meaning of
Section 414(m) and (o) of the Code. Neither Servicesoft nor any of its
Subsidiaries contributes to, has ever contributed to, or has ever been required
to contribute to any multiemployer plan (as defined in Section 3(37) of ERISA)
and none of them has any liability (including withdrawal liability as defined in
Section 4201 of ERISA) under any multiemployer plan.
(d) Except as set forth in Section 3.14(d) of the Disclosure
Schedule, no Benefit Arrangement provides, or has any liability to provide, life
insurance, medical or other employee benefits to any employee upon his or her
retirement or termination of employment for any reason, except as may be
required by law, and neither Servicesoft nor any of its Subsidiaries have ever
represented, promised or contracted (whether in oral or written form) to any
employee (either individually or to employees as a group) that such employee(s)
would be provided with life insurance, medical or other employee welfare
benefits upon their retirement or termination of employment, except to the
extent required by law.
(e) Set forth in Disclosure Schedule 3.14(e) is a complete
list of all current employees of Servicesoft and each of its Subsidiaries whose
base salary exceeds $100,000 and their positions, gross remuneration and length
of employment. To the Best Knowledge of Servicesoft, Servicesoft and each of its
Subsidiaries: (i) are in compliance in all material respects with all applicable
federal, state, local and foreign laws, rules and regulations respecting
employment, employment practices, terms and conditions of employment and wages
and hours, in each case, with respect to employees; (ii) have withheld all
amounts required by law or by agreement to be withheld from the wages, salaries
and other payments to employees; (iii) are not liable for any arrears of wages
or any Taxes or any penalty for failure to comply with any of the foregoing; and
(iv) except as required by applicable law, are not liable for any payment to any
trust or other fund or to any Governmental Body, with respect to unemployment
compensation benefits, social security or other benefits for employees (other
than routine payments to be made in the normal course of business and consistent
with past practice). To the Best Knowledge of Servicesoft (and its employees
with responsibility for employment matters) no executive, key employee or group
of employees has plans to terminate employment with any of Servicesoft or its
Subsidiaries.
(f) Except as set forth in Section 3.14(f) of the Disclosure
Schedule, neither Servicesoft nor any of its Subsidiaries are involved in or
threatened with any labor dispute, grievance, litigation or Claim relating to
labor or occupational health and safety matters involving any employee,
including, without limitation, charges of unfair labor practices or
discrimination complaints, which, if adversely determined, would, individually
or in the aggregate, result in liability having a Material Adverse Effect on
Servicesoft and its Subsidiaries, taken as a whole. Neither Servicesoft nor any
of its Subsidiaries have engaged in any unfair labor practices which would,
individually or in the aggregate, directly or indirectly result in liability to
Servicesoft or any of its Subsidiaries. Except as set forth in Section 3.14(f)
of the Disclosure Schedule, neither Servicesoft nor any of its Subsidiaries are
presently, nor have they been in the past, a party to, or bound by, any
collective bargaining agreement or union contract with respect to employees and
no collective bargaining agreement is being negotiated by Servicesoft
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or any of its Subsidiaries or, to the Best Knowledge of Servicesoft, is being
organized or is threatened.
Section 3.15 Insurance. Section 3.15 of the Disclosure Schedule lists
all insurance policies and fidelity bonds covering the assets, the Business,
equipment, properties, operations, employees, officers and directors of
Servicesoft and each of its Subsidiaries. There is no Claim by Servicesoft or
any of its Subsidiaries pending under any of such policies or bonds as to which
Servicesoft or any of its Subsidiaries have received notice that coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds. All premiums due and payable under all such policies and bonds have been
paid and Servicesoft and each of its Subsidiaries are otherwise in material
compliance with the terms of such policies and bonds (or other policies and
bonds providing substantially similar insurance coverage). There is no
threatened termination of, or material premium increase with respect to, any of
such policies.
Section 3.16 Compliance with Laws. To the Best Knowledge of
Servicesoft, Servicesoft and each of its Subsidiaries have complied with, are
not in violation of, and have not received any notices of violation with respect
to, any federal, state, local or foreign statute, law or regulation with respect
to the conduct of the Business, or the ownership or operation of the Business,
assets or properties except to the extent such violation would not reasonably be
expected to have a Material Adverse Effect.
Section 3.17 Conflicts of Interests. Except as set forth on the
Disclosure Schedule, to the Best Knowledge of Servicesoft neither Servicesoft
nor any of its Subsidiaries nor any of their officers or employees, directly or
indirectly, given or agreed to give any money, gift or similar benefit (other
than legal price concessions to customers in the ordinary course of business) to
any customer, supplier, employee or agent of a customer or supplier, or official
or employee of any Governmental Body or other Person who was, is, or may be in
of a position to help or hinder the business of Servicesoft or any of its
Subsidiaries (or assist in connection with any actual or proposed transaction)
which (i) might subject Servicesoft or any of its Subsidiaries to any damage or
penalty in any civil, criminal or governmental litigation or proceeding, (ii) if
not given in the past, might have had a Material Adverse Effect on the assets,
businesses or operations of Servicesoft or any of its Subsidiaries as reflected
in the Servicesoft Financial Statements, or (iii) if not continued in the
future, might have a Material Adverse Effect on the assets, businesses,
operations or prospects of Servicesoft or any of its Subsidiaries.
Section 3.18 Other Relationships. Except as set forth on the Disclosure
Schedule, to the Best Knowledge of Servicesoft (a) no officer of Servicesoft nor
any of its Subsidiaries, nor any of their respective Affiliates, has any
interest (other than as non-controlling holders of securities of a
publicly-traded company), either directly or indirectly, in any Person other
than Servicesoft and its Subsidiaries (whether as an employee, officer,
director, shareholder, agent, independent contractor, security holder, creditor,
consultant or otherwise) that presently (i) provides any services or designs,
produces or sells any products or product lines, or engages in any activity
which is the same, similar to or competitive with any activity or business in
which Servicesoft or any of its Subsidiaries is now engaged, (ii) is a supplier
of, customer of, creditor of, or has an existing contractual relationship with,
Servicesoft or any of its Subsidiaries, or (iii) has any direct or indirect
interest in any asset or property used by Servicesoft or any property, real or
personal, tangible or intangible, that is necessary for the conduct of the
Business; and (b)
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no current Affiliate or senior employee of Servicesoft or any of its
Subsidiaries is at present, or since the inception of Servicesoft has been,
directly or indirectly through his affiliation with any other Person, a party to
any transaction (other than as an employee, independent contractor or
consultant) with Servicesoft or any of its Subsidiaries providing for the
furnishing of services by, or rental of real or personal property from, or
otherwise requiring cash payments to any such Person.
Section 3.19 Investment Company Act. Neither Servicesoft nor any of its
Subsidiaries are, and immediately after the Closing Date will not be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act.
Section 3.20 Private Sale. Neither Servicesoft nor any of its
Subsidiaries has, either directly or through any agent, offered any Preferred J
Shares or any other securities to, or solicited any offers to acquire any
Preferred J Shares or any other securities from, or otherwise approached,
negotiated or communicated in respect of any Preferred J Shares or any other
securities with, any Person in such a manner as to require that the offer or
sale of the Preferred J Shares or any such other securities be registered
pursuant to the Securities Act or any "blue sky" laws.
Section 3.21 Small Business. Servicesoft is a "Small Business" as
defined in Section 107.50 of Title 13 of the Code of Federal Regulations.
Servicesoft has heretofore furnished to each Investor that is a Small Business
Investment Company (an "SBIC") the following completed forms: Size Status
Declaration on SBA Form 480, Assurance of Compliance on SBA Form 652 and
Portfolio Financing Report on SBA Form 1031, and represents and warrants the
completeness and correctness of each of said forms. Servicesoft's tangible net
worth (including its Subsidiaries) is not in excess of $18,000,000 and
Servicesoft's average net income after federal income taxes (excluding any
carry-over losses) for the preceding two completed fiscal years is not in excess
of $6,000,000.
Section 3.22 Disclosure Schedule. The Disclosure Schedule has been
prepared and executed by Servicesoft and dated and delivered on the date of this
Agreement. Servicesoft shall endeavor to disclose in the Disclosure Schedule
each item of information in each separate section in which such item may
reasonably be required to be disclosed.
ARTICLE IV
REPRESENTATIONS OF THE INVESTORS
Each of the Investors, severally and not jointly, hereby represents,
warrants and acknowledges to Servicesoft the matters set out below.
Section 4.1 Enforceability. Each of this Agreement and the Transaction
Documents constitutes a legal, valid and binding obligation of each of the
Investors enforceable against it in accordance with their respective terms
subject, however, to limitations with respect to enforcement imposed by law in
connection with bankruptcy or similar proceedings and to the extent that
equitable remedies such as specific performance and injunction are in the
discretion of the court from which they are sought.
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23
Section 4.2 Securities Law Matters.
(a) Each such Investor has been afforded the opportunity to
ask questions of and receive answers from duly authorized officers or other
representatives of Servicesoft concerning the terms and conditions of the
transactions contemplated by this Agreement and has received any additional
information regarding Servicesoft which such Investor has requested.
(b) The agreements of each such Investor contained in this
Agreement were not obtained by means of any form of general solicitation or
general advertising, and in connection therewith such Investor did not: (A)
receive or review any advertisement, article, notice or other communication
published in a newspaper or magazine or similar media or broadcast over
television or radio whether closed circuit, or generally available; or (B)
attend any seminar meeting or industry investor conference whose attendees were
invited by any general solicitation or general advertising.
(c) Each such Investor is an "accredited investor" within the
meaning of Rule 501 under the Securities Act, and such Investor was not formed
for the purpose of receiving the Purchased Shares. Each such Investor, either by
reason of such Investor's business or financial experience or the business or
financial experience of such Investor's purchaser representative (within the
meaning of Rule 501 under the Securities Act ), which purchaser representative,
if any, is unaffiliated with and is not compensated by Servicesoft or any
Affiliate of Servicesoft, directly or indirectly, has the capacity to protect
such Investor's interests in connection with this Agreement.
(d) The Purchased Shares are being acquired for each such
Investor's own account and not with a view to their resale or distribution in a
manner that would violate any applicable federal or state securities or other
law. Each such Investor recognizes that the acquisition of the Purchased Shares
involves a high degree of risk in that (i) an investment in Servicesoft is
highly speculative and (ii) such Investor could sustain the loss of such
Investor's entire investment.
(e) Each such Investor hereby acknowledges that the issuance
of the Purchased Shares to such Investor has not been registered under the
Securities Act and is intended to be exempt from the registration requirements
of Section 5 of the Securities Act pursuant to Sections 4(2) of the Securities
Act and Regulation D promulgated thereunder. Each such Investor agrees that such
Investor will not sell or otherwise transfer the Purchased Shares unless (i)
such sale or transfer is registered under the Securities Act or (ii) in the
opinion of counsel reasonably acceptable to Servicesoft delivered in writing to
Servicesoft in advance, such sale or transfer is otherwise exempt from
registration under the Securities Act.
Section 4.3 Incorporation and Authorization. Each such Investor (other
than an individual) is duly formed and validly existing under the laws of the
jurisdiction governing its formation and each such Investor has all the
necessary corporate or other power, authority and capacity to enter into this
Agreement and each of the Transaction Documents and the execution and delivery
of this Agreement and each of the Transaction Documents has been duly authorized
20
24
by all necessary corporate or other action on the part of each such Investor and
validly executed and delivered. The execution, delivery and performance of this
Agreement and the Transaction Documents by each such Investor will not be in
contravention of any law, order or agreement or any Organic Documents of such
Investor.
ARTICLE V
CLOSING CONDITIONS
Section 5.1 Conditions in Favor of the Investors. The obligations of
the Investors under this Agreement shall be conditional upon the following:
(a) Servicesoft and each of the Investors shall have duly
authorized and executed copies of this Agreement and each of the Transaction
Documents and each other agreement, document or instrument related hereto or
thereto required in connection with the consummation of the transactions
contemplated hereby, and each such agreement, document or instrument shall be in
full force and effect on the Closing Date.
(b) Servicesoft shall have obtained a good standing
certificate from the State of Delaware and from each other state where it is
qualified to do business and shall have provided copies of each such certificate
to the Investors on or prior to the Closing Date.
(c) Servicesoft will have adopted and filed with the Secretary
of State of the State of Delaware, on or before the Closing, the Certificate and
a copy of the filed Certificate shall have been provided to the Investors.
(d) The representations and warranties of Servicesoft set
forth in Article 3 shall be true and correct at the Closing.
(e) There will not be on the Closing Date any judgment or
order of a Governmental Body which would prohibit or have the effect of
preventing the consummation of the sale of the Preferred J Shares.
(f) The Board of Directors of Servicesoft shall have adopted
resolutions approving the issuance and sale of the Preferred J Shares to the
Investors and the stockholders of Servicesoft shall have approved the adoption
and filing of the Certificate.
(g) There shall be delivered legal opinion addressed to the
Investors, of XxXxxxxxx, Will & Xxxxx, counsel to Servicesoft, in substantially
the form attached hereto as Exhibit G.
(h) Servicesoft shall have obtained all necessary "blue sky"
law permits and qualifications, or have the availability of exemptions
therefrom, required by any state or province for the offer and sale of the
Series J Preferred.
(i) Servicesoft shall have delivered a certificate executed by
the Chief
21
25
Executive Officer, dated as of the Closing Date and certifying compliance with
certain conditions, in the form agreed to by the parties.
(j) Servicesoft shall have delivered such other documentation
as the Investors and each of its legal counsel may reasonably require.
Section 5.2 Conditions in Favor of Servicesoft. Subject to Section 6.1,
the obligations of Servicesoft under this Agreement shall be conditioned on the
following:
(a) The representations and warranties of each of the
Investors set forth in Article 4 shall be true and correct as of Closing.
(b) Each of the Investors shall have delivered, by certified
check or wire transfer of immediately available funds, payment for the portion
of the Purchased Shares being purchased by it, in accordance with Section 2.2.
(c) Each Investor shall have delivered to Servicesoft a
counterpart signature page to this Agreement and each of the Transaction
Documents duly executed by it.
ARTICLE VI
COVENANTS
Section 6.1 Use of Proceeds. Servicesoft will use the proceeds from the
sale of the Series J Preferred for (i) general corporate purposes including
working capital to implement Servicesoft's current operating plan which includes
expanding sales and marketing activities, product development and infrastructure
and (ii) pay expenses related to the transactions contemplated by this
Agreement.
Section 6.2 SBIC Regulatory Provisions.
(a) At any time Servicesoft has 50 or more record holders of
Servicesoft's voting stock, Servicesoft shall notify each Major Shareholder (as
defined in the Shareholders Agreement) which is an SBIC (an "SBIC HOLDER") as
soon as practicable (and, in any event, not later than 15 days) prior to taking
any action after which any SBIC Holder (collectively with its Affiliates) would
be the record holder of 20% or more of Servicesoft's voting stock, and
Servicesoft shall notify each SBIC Holder of any other action or occurrence
after which any SBIC Holder (collectively with its Affiliates) would own of
record 20% or more of Servicesoft's voting stock, as soon as practicable after
Servicesoft becomes aware that such other action or occurrence has occurred or
is proposed to occur.
(b) Within 75 days after the Closing Date, Servicesoft shall
deliver to each SBIC Holder a written statement certified by Servicesoft's
president or chief financial officer describing in reasonable detail the use of
the proceeds of the sale of Series J Preferred by Servicesoft. In addition to
any other rights granted hereunder, Servicesoft shall grant each SBIC Holder and
the United States Small Business
22
26
Administration (the "SBA") access to Servicesoft's records for the purpose of
verifying the use of such proceeds.
(c) Upon the occurrence of a Regulatory Violation (as defined
below) or in the event that any SBIC Holder determines in its reasonable good
faith judgment that a Regulatory Violation has occurred, in addition to any
other rights and remedies to which it may be entitled as a holder of Series J
Preferred (or any Common Stock issued upon conversion thereof) (whether under
this Agreement, the Transaction Documents, the Certificate or otherwise), each
SBIC Holder shall have the right to demand the immediate repurchase of all of
the outstanding shares of Preferred J Shares (or any Common Shares issued upon
conversion thereof) owned by such SBIC Holder at a price per share equal to the
purchase price paid for such stock, plus all accrued but unpaid dividends
thereon, by delivering written notice of such demand to Servicesoft; provided,
however, that such SBIC Holder shall have taken commercially reasonable actions
to obtain approval from the SBA for such SBIC Holder to retain its investment in
Servicesoft in order to avoid the repurchase provisions contained in this
Section 6.2(c); provided further, however, that Servicesoft shall not be
obligated to repurchase such shares in the event a Regulatory Violation is
triggered by more than 49% of the employees of Servicesoft being located outside
of the United States. Servicesoft shall pay the purchase price for such stock by
a cashier's or certified check or by wire transfer of immediately available
funds to each SBIC Holder demanding repurchase within 30 days after
Servicesoft's receipt of the demand notice, and upon such payment, each such
SBIC Holder shall deliver the certificates evidencing the Series J Preferred (or
any Common Stock certificates issued upon conversion thereof) to be repurchased
duly endorsed for transfer or accompanied by duly executed forms of assignment.
(d) Promptly after the end of each fiscal year (but in any
event prior to February 28 of each year), Servicesoft shall deliver to each SBIC
Holder a written assessment of the economic impact of each SBIC Holder's
investment in Servicesoft, specifying the full-time equivalent jobs created or
retained in connection with the investment, the economic impact of the
investment specifying the full-time equivalent jobs created or retained, and the
impact of the investment on the revenues and profits of the business and on
taxes paid by the business and its employees.
(e) For purposes of this Agreement, "REGULATORY VIOLATION"
means, with respect to any SBIC Holder providing Financing (as defined below)
under this Agreement, (i) a diversion of the proceeds of such Financing to a
non-permitted use thereof or a change in the principal business activity of
Servicesoft and its Subsidiaries to an ineligible business activity set forth in
13 CFR 107.720, if such diversion was effected without obtaining the prior
written consent of the SBIC Holders and if such diversion or change occurs
within one year after the sale and issuance of the Series J Preferred, or (ii)
any event occurs pursuant to which any SBIC Holder assumes impermissible control
as defined in 13 CFR 107.865. "SBIC REGULATIONS" means the Small Business
Investment Act of 1958 and the regulations issued thereunder as set forth in 13
CFR 107 and 121, as amended. "FINANCING" shall have the meaning set forth in the
SBIC Regulations.
Section 6.3 Regulatory Compliance Cooperation.
23
27
(a) In the event that any SBIC Holder determines that it has a
Regulatory Problem (as defined below), such SBIC Holder shall have the right to
transfer its Preferred J Shares (or any Common Shares issued upon conversion
thereof) to any other Person, in accordance with the transfer provisions set
forth in the Shareholders Agreement and Servicesoft shall take all such actions
as are reasonably requested by such SBIC Holder to the extent necessary to
rectify the Regulatory Problem in order to (i) (a) effectuate and facilitate any
transfer or sale by such SBIC Holder of any securities of Servicesoft then held
by such SBIC Holder and/or (b) permit such SBIC Holder (or any of its
Affiliates) to exchange all or any portion of Servicesoft's voting securities
then held by it on a share-for-share basis for shares of a class of non-voting
securities of Servicesoft, which non-voting securities shall be identical in all
respects to such voting securities, except that such non-voting securities shall
be non-voting and shall be convertible into a class of Common Stock which is
nonvoting on such terms as are requested by such SBIC Holder in light of
regulatory considerations then prevailing; provided, however, that if such an
exchange is due to a Regulatory Violation triggered by more than 49% of the
employees of Servicesoft being located outside of the United States the expenses
incurred by Servicesoft in connection with such exchange shall be borne by such
SBIC Holder, (ii) if permitted by the SBIC Regulations continue and preserve the
respective allocation of the voting interests with respect to Servicesoft
arising out of the SBIC Holder's ownership of voting securities and/or provided
for in the Transaction Documents before the transfers and amendments referred to
above (including entering into such additional agreements as are requested by
such SBIC Holder to permit any Person(s) designated by such SBIC Holder to
exercise any voting power which is relinquished by such SBIC Holder), and (iii)
amend this Agreement, the Transaction Documents, the Certificate and any other
related documents, agreements or instruments to effectuate and reflect the
foregoing. The parties to this Agreement agree to vote their securities in favor
of such amendments and actions.
(b) For purposes of this Agreement, a "REGULATORY PROBLEM"
means any set of facts or circumstances wherein it has been asserted by any
governmental regulatory agency (or any SBIC Holder believes that there is a
substantial risk of such assertion) that such SBIC Holder and its Affiliates are
not entitled to hold, or exercise any significant right with respect to, the
Series J Preferred (or any Common Stock issued upon conversion thereof) and
includes a Regulatory Violation.
ARTICLE VII
GENERAL
Section 7.1 Non-Waiver. No investigations made by or on behalf of any
of the Investors at any time shall have the effect of waiving, diminishing the
scope or otherwise affecting any representation or warranty made by Servicesoft
in or pursuant to this Agreement. No waiver of any condition or other
provisions, in whole or in part, shall constitute as a waiver of any other
condition or provision (whether or not similar) nor shall such waiver constitute
a continuing waiver unless otherwise expressly provided.
Section 7.2 Indemnification, Survival, etc.
24
28
(a) Servicesoft hereby indemnifies and holds harmless each
Investor from and against any damage, loss or expense incurred as a result of
the breach of any representation, warranty, covenant or other provisions
contained in this Agreement or any of the Transaction Documents by Servicesoft
or any of its Subsidiaries.
(b) Each of the Investors, severally and not jointly, hereby
indemnifies and holds harmless Servicesoft from and against any damage, loss or
expense incurred as a result of the breach of any representation, warranty,
covenant or other provisions contained in this Agreement or any of the
Transaction Documents by each of the Investors.
(c) All representations, warranties and covenants contained in
this Agreement and/or the Transaction Documents on the part of each of the
parties hereto shall survive the Closing, the execution and delivery under this
Agreement of any share or security transfer instruments or other documents of
title to any of the Preferred J Shares, and the payment of the consideration for
such Preferred J Shares; provided, however, that all representations and
warranties made in this Agreement shall expire on the earlier of (i) 15 months
from the Closing Date or (ii) the closing of Servicesoft's first underwritten
public offering of Servicesoft Common Shares. If no claim shall have been made
under this Agreement against a party for any incorrectness in or breach of any
representation or warranty made in this Agreement prior to the expiration of
these survival periods, such party shall have no further liability under this
Agreement with respect to such representations or warranties.
Section 7.3 Assignment. This Agreement shall not be assigned by any of
the parties without the prior written consent of the other parties, provided,
that each of the Investors may assign to any of its Permitted Transferees (as
defined in the Shareholders Agreement), provided further, that the assignee
delivers to Servicesoft an instrument in writing executed by the assignee
confirming that it is bound by and shall perform all of the obligations of the
relevant Investor assignor under this Agreement as if it were an original
signatory thereto. No such assignment shall relieve the original Investor of its
obligations under this Agreement.
Section 7.4 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties to this Agreement and their
respective heirs, executors, administrators, successors and assigns.
Section 7.5 Further Assurances. Each of the parties covenants and
agrees to take all such action and to execute all such documents as may be
necessary or advisable to implement the provisions of this Agreement fully and
effectively and to make them binding on the parties hereto.
Section 7.6 Preemptive Rights. Each of the Investors which is a Major
Shareholder, as defined in that certain Amended and Restated Shareholders
Agreement dated as of June 18, 1999 by and among Servicesoft and the other
parties thereto (the "Prior Shareholders Agreement"), hereby (a) confirms that
such Investor has waived any and all preemptive and other participation rights
under the Prior Shareholders Agreement, together with any notice period
applicable thereto, in connection with the sale and issuance of Series J
Preferred
25
29
hereunder, and (b) acknowledges and agrees that the Purchased Shares issued and
sold to such Investor hereunder are in full satisfaction of any such preemptive
or other participation rights.
Section 7.7 Expenses. At the Closing, Servicesoft shall reimburse all
reasonable and customary fees and expenses of special counsel to Xxxxxxx Xxxxx,
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx, LLP, and shall reimburse all
reasonable out-of-pocket fees and due diligence costs incurred by the Investors
incurred in connection with the purchase and sale of the Preferred I Shares
hereunder and the preparation, execution and delivery of this Agreement and all
documents and instruments executed pursuant to this Agreement, provided, that
Servicesoft shall not be responsible for any fees, expenses or costs in excess
of $15,000.
Section 7.8 Notices. Any notice or other writing required or permitted
to be given under this Agreement or for the purposes of this Agreement (referred
to in this Section as a "notice") to any party shall be sufficiently given if
delivered personally, or if sent by prepaid registered mail or if transmitted by
fax or other form of recorded communication tested prior to transmission to such
party:
(a) in the case of a notice to the Investors at the address
listed below each Investor's name on Exhibit A,
(b) in the case of a notice to Servicesoft at:
Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Fax: (000)-000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxx, III, P.C.
Fax: (000) 000-0000
or at such other address as the party to whom such writing is to be given shall
have last notified to the party giving the same in the manner provided in this
Section. Any notice personally delivered to the party to whom it is addressed as
provided in this Section shall be deemed to have been given and received on the
day it is so delivered at such address, provided, that if such day is not a
Business Day then the notice shall be deemed to have been given and received on
the Business Day next following such day. Any notice mailed to the address and
in the manner provided for in this Section shall be deemed to have been given
and received on the fifth Business Day next following the date of its mailing.
Any notice transmitted by fax or other form of recorded communication shall be
deemed given and received on the first Business Day after its transmission.
26
30
Section 7.9 Public Notices. All public notices to third parties and all
other publicity concerning the transactions contemplated by this Agreement shall
be jointly planned and coordinated by Servicesoft and the Investors and no party
shall act unilaterally in this regard without the prior approval of the other
party, such approval not to be unreasonably withheld, except:
(a) in the case of Servicesoft for communications made in
confidence to Servicesoft's employees affected by such transactions; or
(b) where required to do so by law or by the applicable
regulations or policies of any United States or other regulatory agency of
competent jurisdiction or any stock exchange in circumstances where prior
consultation with the other parties is not practicable.
Section 7.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to constitute one and the same instrument. Facsimile
counterpart signatures to this Agreement shall be acceptable and binding.
[SIGNATURE PAGE FOLLOWS]
27
31
IN WITNESS WHEREOF, the parties hereto have executed this Series J
Convertible Preferred Stock Purchase Agreement, or a counterpart hereof, all as
of the date first above written.
"SERVICESOFT" SERVICESOFT TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxxx
President and Chief Executive Officer
"INVESTORS"
/s/ Illegible (Designated Signatory Pursuant to PoA)
----------------------------------------------------
XXXXXXXXX X. XXXXX
/s/ Xxxxxxx X. Bogoroch
--------------------------------------------
XXXXXXX X. BOGOROCH
CIBC WMV, INC.
By: /s/ X. Xxxxxxxxx
----------------------------------------
Name:
Its:
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
32
FINANCIAL TECHNOLOGIES VENTURES L.P.
By: /s/ Xxxxx Xx
-----------------------------------
Name:
Its:
FINANCIAL TECHNOLOGIES VENTURES (Q) L.P.
By: /s/ Xxxxx Xx
-----------------------------------
Name:
Its:
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
33
GEMINI XXXXXX XX L.P.
By: /s/ Illegible
-----------------------------------
Name:
Its:
GEMINI XXXXXX XX PARALLEL FUND L.P.
By: /s/ Illegible
-----------------------------------
Name:
Its:
ADVENT PGGM GEMINI L.P.
By: /s/ Illegible
-----------------------------------
Name:
Its:
GEMINI PARTNER INVESTORS L.P.
By: /s/ Illegible
-----------------------------------
Name:
Its:
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
34
/s/ Xxxx Xxxxx
----------------------------------------
XXXX XXXXX, IN TRUST
GREY ADVERTISING LTD.
By:
----------------------------------------
Name:
Its:
INTERNET CAPITAL GROUP, INC.
By: /s/ C. Greendale
-------------------------------------
Name:
Its:
X.X. XXXXXXXX XX VENTURE FUND
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name:
Its:
----------------------------------------
XXXXXX XXXXX
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
35
SIGMA PARTNERS V, L.P.
By: Sigma Management, V, L.L.C.
Its: General Partner
By: /s/ Xxxxxxxx Xxxx
-------------------------------------
Name:
Its:
SIGMA ASSOCIATES V, L.P.
By: Sigma Management V, L.L.C.
Its: General Partner
By: /s/ Xxxxxxxx Xxxx
-------------------------------------
Name:
Its:
SIGMA INVESTORS IV, L.L.C.
By: Sigma Management IV, L.L.C.
Its: General Partner
By: /s/ Xxxxxxxx Xxxx
-------------------------------------
Name:
Its:
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
36
SIGMA PARTNERS IV, L.P.
By: Sigma Management, IV, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name:
Its:
SIGMA ASSOCIATES IV, L.P.
By: Sigma Management IV, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name:
Its:
SIGMA INVESTORS IV, L.L.C.
By: Sigma Management IV, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name:
Its:
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
37
SOFINOV, SOCIETE FINANCIERE
D'INNOVATION INC., FILIALE DE XX
XXXXXX DE DEPOT ET PLACEMENTS DU QUEBEC
By:
-------------------------------------
Name:
Its:
38
/s/ F. Xxxx X'Xxxxxxx
------------------------------------------
XXXX X'XXXXXXX
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
39
THE XXXXXXX XXXXX GROUP, INC.
By: /s/ Illegible
-----------------------------------------
Name:
Its:
STONE STREET FUND 2000, LLC
By: /s/ Xxxxxxxxx Xxxxxxxxxx
-----------------------------------------
Name:
Its:
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
40
LKJ TECHNOLOGIES
----------------------------------------
(Print name of Investor)
By: /s/ Illegible
-------------------------------------
Name:
Its:
41
The Reez Trust
----------------------------------------
The Reez Trust
By: /s/ Xxxx Xxxxxx
------------------------------------
42
/s/ Xxxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxxx
43
/s/ Xxx Xxxxxxxx
----------------------------------------
44
/s/ Xxxx Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx
45
/s/ Xxxxx Xxxxxx
----------------------------------------
Xxx Xxxxxx
46
/s/ Xxxxxxx Xxxxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxxxx
47
/s/ X. Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx
48
/s/ Xxxx Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx
49
/s/ Xxx Xxxxxxx
----------------------------------------
Xxx Xxxxxxx
50
/s/ X. Xxxxxxxx
----------------------------------------
Xx Xxxxxxxx
51
/s/ X. Xxxxxxx, Xx.
----------------------------------------
Xxxx Xxxxxxx
52
/s/ Xxxxxx X. Xxxxx
----------------------------------------
53
ITOCHU TechnoScience Corporation
By: /s/ X. Xxxxxx
------------------------------------
Name: X. Xxxxxx
Its: President
54
ITOCHU Technolgoy, Inc.
By: /s/ T. Susaki
------------------------------------
Name: Takahiro Susaki
Its: President
55
ITOCHU Corporation
By: /s/ X. Xxxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxxx, Chief Operating
Officer
Its: Information Technology &
Telecommunications Division
56
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
57
/s/ R. Bogoroch
---------------------------------------
Xxxxxxx X. Bogoroch
58
Xxxxxx Xxxxxxx Xxxx Xxxxxx Equity
Funding, Inc.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Its: Vice President
59
ITOCHU Techno-Science Corporation
By: /s/X. Xxxxxx
------------------------------------
Name: X. Xxxxxx
Its: President
[SIGNATURE PAGE TO SERIES J STOCK PURCHASE AGREEMENT]
60
EXHIBIT A
SCHEDULE OF INVESTORS
-------------------------------------------------------------------------------
PURCHASED AGGREGATE
INVESTORS SHARES PURCHASE PRICE
-------------------------------------------------------------------------------
Xxxxxxxxx X. Xxxxx 103,211 $ 931,995.33
c/o Xxx Xxxxxx
Venad Administrative Services, Inc.
000 Xxxxxxx Xxxxxx, #000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------
Xxxxxxx X. Bogoroch 4,651 $ 41,998.53
00 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxx, X0X 0X0
Fax: 000-000-0000
-------------------------------------------------------------------------------
CIBC WMV Inc. 350,831 $ 3,168,003.90
000 Xxx Xxxxxx, 0xx Xxxxx
BCE Place
Toronto, Ontario, M5J 2F8
Attn: Xxxxx Xxxxxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------
Financial Technologies Ventures, L.P. 280,731 $ 2,535,000.90
Financial Technologies Ventures (Q), L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xx
Fax: 000-000-0000
-------------------------------------------------------------------------------
Gemini Xxxxxx XX L.P. 306,423 $ 2,766,999.60
Advent PGGM Gemini L.P.
Gemini Xxxxxx XX Parallel Fund L.P.
Gemini Partner Investors L.P.
c/o Gemini Capital Fund Management Ltd.
00 Xxxxxxxx Xxxxxxx Xxxxxx
P.O. Box 12548
Industrial Xxxx
Xxxxxxxx 00000 Xxxxxx
Attn: Xxxx Xxxx
Fax: 000-000-0-000-0000
-------------------------------------------------------------------------------
The Xxxxxxx Xxxxx Group, Inc. 664,462 $ 6,000,001.60
Stone Street Fund 2000, LLC 110,742 $ 1,000,000.20
Xxxxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
FAX: 000-000-0000
-------------------------------------------------------------------------------
61
Xxxx Xxxxx, in trust 0 0
c/x Xxxxx Associates
000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0XX
Fax: 000-000-0000
-------------------------------------------------------------------------------
Grey Advertising Ltd. 0 0
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Xxxx Xxxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------
Internet Capital Group, Inc. 208,084 $ 1,878,998.50
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------
X.X. Xxxxxxxx XX Venture Fund, L.P. 147,287 $ 1,330,001.60
Canada Trust Tower
BCE Place, Suite 440
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx,
XXXXXX X0X 0X0
Attn: Xxxx Xxxxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------
Xxxxxx Xxxxx 9,967 $ 90,002.01
c/o Orien Ventures
Xxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------
Samjank Inc. 33,666 $ 304,003.98
c/o Schindlers
00 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X 0XX
-------------------------------------------------------------------------------
Xxxxxx Xxxxx 0 0
c/x Xxxxxxxxx Xxxxxxxx Evergreen Ltd.
00 Xxxxxxxxxx Xxxx.
00000 Xxx-Xxxx, Xxxxxx
Fax: 000-000-0-000-0000
-------------------------------------------------------------------------------
62
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Sigma Partners V, L.P. 385,271 $ 3,478,997.10
Sigma Partners IV, L.P.
Sigma Associates IV, L.P.
Sigma Investors IV, L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
Fax: 000-000-0000
with a copy to:
00 Xxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxx Xxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------
Sofinov, Societe Financiere D'Innovation
Inc., Filiale de xx Xxxxxx de Depot et
Placements du Quebec
1981Avenue, XxXxxx College
Xxxxxxxx, Xxxxxx X0X 0X0 442,967 $ 3,999,992.00
Attn: Sophie Forest
Fax: 000-000-0000
-------------------------------------------------------------------------------
Xxxx Xxxxxxxxx 27,685 $ 249,995.55
c/o Brightspark
00 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Fax: 000-000-0000
-------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 110,742 $ 1,000,000.20
0 Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------
Xxxx X'Xxxxxxx 11,047 $ 99,998.22
00 Xxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
-------------------------------------------------------------------------------
Xxx Xxxxxx 16,611 $ 149,997.33
00 Xxxxxxxxx Xxxxx #0X
Xxx Xxxx, XX 00000
-------------------------------------------------------------------------------
Washington Mall Partners 7,420 $ 67,002.60
c/o Xxxx Xxxx
000 Xxxxxx Xx., 0X
Xxxxxx, XX 00000
-------------------------------------------------------------------------------
63
-------------------------------------------------------------------------------
ITOCHU Techno-Science Corporation 110,742 $ 1,000,000.20
ITOCHU Corporation
ITOCHU Technology, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------
Xxxxx Xxxxxx 55,371 $ 500,000.13
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xx Xxxxxxxx 5,537 $ 49,999.11
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xxxxxx Xxxxxxxx 16,611 $ 149,997.33
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxxx 22,148 $ 199,996.44
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xxxx Xxxxxxx 2,769 $ 35,004.07
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xxx Xxxxxxx 9,967 $ 90,002.01
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xxxx Xxxxxxx 5,537 $ 49,999.11
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xxxx Xxxxxxx 5,537 $ 49,999.11
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
64
-------------------------------------------------------------------------------
Xxx Xxxxxx 9,967 $ 90,002.01
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
Xxxx Xxxxxxx 5,537 $ 49,999.11
c/o Servicesoft Technologies, Inc.
Xxx Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
-------------------------------------------------------------------------------
The Reez Trust 9,967 $ 90,002.01
c/o Kaplan Talkins
0000 Xxxx Xxxxxx
Xxxxx 0X
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
-------------------------------------------------------------------------------
TOTAL: 3,464,645 $31,285,987.80
-------------------------------------------------------------------------------
