EXHIBIT 3
KANA STOCK VOTING AGREEMENT
THIS KANA STOCK VOTING AGREEMENT ("Kana Stock Voting Agreement") is
made and entered into as of February 6, 2000 by and between Silknet Software
Inc., a Delaware corporation ("Silknet"), and the undersigned director, officer
or affiliate (the "Holder") of Kana Communications, Inc., a Delaware corporation
("Kana").
Recitals
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Concurrently with the execution of this Kana Stock Voting Agreement,
Silknet, Pistol Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Kana ("Sub"), and Kana have entered into an Agreement and Plan of
Reorganization, dated as of February 6, 2000 (the "Merger Agreement") providing
for the merger of Sub with and into Silknet (the "Merger"). As a result of the
Merger, which is intended to qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended, Silknet will
become a wholly-owned subsidiary of Kana and stockholders of Silknet will become
stockholders of Kana. Holder is the holder of record and the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of the number of shares of the capital stock of Kana
indicated on the signature page of this Kana Stock Voting Agreement (the
"Shares"). As a condition to its execution and delivery of the Merger
Agreement, Silknet has requested that Holder agree, and in consideration, and to
induce the execution and delivery, of the Merger Agreement by Silknet, Holder is
willing to agree (i) not to transfer or otherwise dispose of the Shares or any
other shares of capital stock of Kana acquired after the date of this Kana Stock
Agreement and prior to the expiration of this Kana Stock Voting Agreement,
except as specifically permitted hereby, and (ii) to vote the Shares and any
other such shares of Kana stock so as to facilitate consummation of the Merger,
as more fully described below.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
Agreement
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Section 1 No Transfer or Encumbrance of Shares. Holder agrees not to
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sell, pledge, assign, encumber, dispose of or otherwise transfer (including by
merger, testamentary disposition, interspousal disposition pursuant to a
domestic relations proceeding or otherwise by operation of law) ("transfer") any
of the Shares or any New Shares (as defined below), or to make any offer or
agreement relating thereto at any time prior to the expiration of this Kana
Stock Voting Agreement. The foregoing restrictions shall not prohibit a
transfer of shares or New Shares (i) in the case of an individual, to any member
of his immediate family, to a trust for the benefit of Holder or any member of
his immediate family or a transfer of Shares or New Shares upon the death of
Holder, (ii) in the case of a partnership or limited liability company, to one
or more partners or members or to an affiliated corporation, or (iii) which
Holder can not prevent (it being understood that Holder shall use his best
efforts to prevent transfers other than
pursuant to (i) and (ii) hereof; provided, however, that any transferee with
respect to a transfer permitted under (i) or (ii) shall, as a precondition to
such transfer, agree in a writing delivered to Silknet, to be bound by the terms
and conditions of this Kana Stock Voting Agreement. This Kana Stock Voting
Agreement shall expire on the earlier of (a) the date and time on which the
Merger shall become effective in accordance with the terms of the Merger
Agreement or (b) the date on which the Merger Agreement shall be terminated
pursuant to Section 8.01 of the Merger Agreement (the "Expiration Date"). Holder
agrees that any shares of capital stock of Kana that Holder purchases or with
respect to which Holder otherwise acquires beneficial ownership after the date
of this Kana Stock Voting Agreement and prior to the Expiration Date ("New
Shares") shall be subject to the terms and conditions of this Kana Stock Voting
Agreement to the same extent as if such shares constituted Shares.
Section 2 Agreement to Vote Shares. Holder hereby agrees to appear, or, using
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Holder's best efforts and to the full extent legally permitted, cause the holder
of record on any applicable record date to appear in person or by proxy for the
purpose of obtaining a quorum at any annual or special meeting of stockholders
of the Company and at any adjournment thereof at which matters relating to the
Merger, the Merger Agreement or any transaction contemplated thereby are
considered. At every meeting of the Kana stockholders called with respect to
any of the following, and at any adjournment thereof, Holder shall vote or,
using Holder's best efforts and to the full extent legally permitted, cause the
holder of record to vote the Shares and any New Shares (except those Shares or
New Shares which are not voting securities):
(a) in favor of approval of the issuance of shares of Kana stock
pursuant to the Merger Agreement, and any proposal or action which would,
or could reasonably be expected to, facilitate the Merger;
(b) against approval of any proposal made in opposition to or
competition with consummation of the Merger and the Merger Agreement;
(c) against any merger, consolidation or other business combination of
Kana with, sale of assets or stock of Kana to, or reorganization or
recapitalization involving Kana, other than as contemplated or permitted by
the Merger Agreement;
(d) against any liquidation, or winding up of Kana; and
(e) against any other proposal or action which would, or could
reasonably be expected to, impede, frustrate, prevent, prohibit or
discourage the Merger (each of (b) through (e) collectively, an "Opposing
Proposal").
Holder, as the holder of voting stock of Kana, shall be present, in person or by
proxy, or, using Holder's best efforts and to the full extent legally permitted,
cause the holder of record to be present, in person or by proxy, at all meetings
of stockholders of Kana so that all Shares and New Shares are counted for the
purposes of determining the presence of a quorum at such meetings. This Kana
Stock Voting Agreement is intended to bind Holder only with respect to
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the specific matters set forth herein, and shall not prohibit Holder from acting
in accordance with Holder's fiduciary duties as an officer or director of Kana.
Section 3 Option Exercise. Holder agrees that if, at any meeting of
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stockholders of Kana called with respect to any of (a) through (e) of Section 2
hereof, the number of shares of Kana's capital stock voting in accordance with
(a) through (e) of Section 2 hereof shall not be enough to prevail in such vote,
Holder will immediately exercise any and all options and warrants, or otherwise
convert or exercise any securities, beneficially owned by him (to the full
extent permitted by applicable law) in order to vote all New Shares resulting
from such exercise or conversion in accordance with Section 2 hereof. Silknet
hereby agrees that, in the event Holder is required pursuant to this Section 3
to convert or exercise any securities and upon request by Holder, Silknet will
make a loan, evidenced by a promissory note and on reasonable terms, to Holder
(or any third party) in the amount of any tax imposed on Holder (or such third
party) solely as a result of such conversion or exercise.
Section 4 Irrevocable Proxy. Concurrently with the execution of this Kana
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Stock Voting Agreement, Holder agrees to deliver to Silknet a proxy in the form
attached hereto as Annex A (the "Proxy"), which shall be irrevocable to the
extent provided therein; provided, however, that the Proxy shall be revoked upon
termination of this Kana Stock Voting Agreement in accordance with its terms.
Section 5 Representations, Warranties and Covenants of Holder. Holder
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hereby represents, warrants and covenants to Silknet as follows:
(a) Ownership of Shares. Holder (i) is the holder of record or
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beneficial owner or holder of the voting power of the Shares and will be
the holder of record or beneficial owner or holder of the voting power of
all New Shares, if any, which at the date hereof and at all times until the
Expiration Date will be free and clear of any liens, claims, options,
charges or other encumbrances that would interfere with the voting of the
Shares or the granting of any proxy with respect thereto, (ii) does not
beneficially own any shares of capital stock of Kana other than the Shares
(except to the extent that Holder currently disclaims beneficial ownership
in accordance with applicable law) and (iii) has full power and authority
to make, enter into, deliver and carry out the terms of this Kana Stock
Voting Agreement and the Proxy.
(b) No Voting Trusts and Agreements. Between the date of this
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Agreement and the Expiration Date, Holder will not, and will not permit any
entity under Holder's control to, deposit any shares of Kana capital stock
held by Holder or such entity in a voting trust or subject any shares of
Kana capital stock held by such Holder or such entity to any arrangement or
agreement with respect to the voting of such shares of capital stock, other
than agreements entered into with Silknet.
(c) Validity; No Conflict. This Kana Stock Voting Agreement
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constitutes the legal, valid and binding obligation of Holder. Neither the
execution of this Kana Stock Voting Agreement by Holder nor the
consummation of the transactions contemplated
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herein will violate or result in a breach of (i) any provision of any
trust, charter, partnership agreement or other charter document applicable
to Holder, (ii) any agreement to which Holder is a party or by which Holder
is bound, (iii) any decree, judgment or order to which Holder is subject,
or (iv) any law or regulation now in effect applicable to Holder.
(d) No Proxy Solicitations. Subject to the last sentence of Section
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2, between the date of this Agreement and the Expiration Date, Holder will
not, and will not permit any entity under Holder's control, to (i) solicit
proxies or become a "participant" in a "solicitation" (as such terms are
defined in Rule 14A under the Exchange Act) with respect to an Opposing
Proposal or otherwise encourage or assist any party in taking or planning
any action which would compete with, restrain or otherwise serve to
interfere with or inhibit the timely consummation of the Merger in
accordance with the terms of the Merger Agreement, (ii) initiate a
stockholders' vote with respect to an Opposing Proposal or (iii) become a
member of a "group" (as such term is used in Section 13(d) of the Exchange
Act) with respect to any voting securities of Kana with respect to an
Opposing Proposal.
Section 6 Representations, Warranties and Covenants of Silknet. Silknet
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represents, warrants and covenants to Holder as follows:
(a) Due Authorization. This Kana Stock Voting Agreement has been
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authorized by all necessary corporate action on the part of Silknet and has
been duly executed by a duly authorized officer of Silknet.
(b) Validity; No Conflict. This Kana Stock Voting Agreement
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constitutes the legal, valid and binding obligation of Silknet. Neither
the execution of this Kana Stock Voting Agreement by Silknet nor the
consummation of the transactions contemplated
herein will violate or result in a breach of (i) any agreement to which
Silknet is a party or by which Silknet is bound, (ii) any decree, judgment
or order to which Silknet is subject, or (iii) any law or regulation now in
effect applicable to Silknet.
Section 7 Additional Documents. Holder and Silknet hereby covenant and
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agree to execute and deliver any additional documents necessary or desirable, in
the reasonable opinion of Silknet's legal counsel or Holder, as the case may be,
to carry out the intent of this Kana Stock Voting Agreement.
Section 8 Legending of Shares. Upon the request of Silknet, Holder agrees
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that it shall forthwith surrender all certificates representing the Shares so
that they shall bear a conspicuous legend stating that they are subject to this
Agreement (and the restrictions on transfer provided for herein) and to an
Irrevocable Proxy. Subject to the terms of Section 2 hereof, Stockholder agrees
that it shall not Transfer the Shares without first having the aforementioned
legend affixed to the certificates representing the Shares.
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Section 9 Consent and Waiver. Holder hereby gives any consent or waiver
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reasonably required for the consummation of the Merger under the terms of any
agreement to which Holder is a party.
Section 10 Termination. Notwithstanding any other provision contained
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herein, this Kana Stock Voting Agreement and the Proxy, and all obligations of
Holder hereunder and thereunder, shall terminate as of the Expiration Date.
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Section 11 No Solicitation.
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(a) Until the earlier of the Effective Time (as defined in the Merger
Agreement) or a valid termination of the Merger Agreement pursuant to
Article VIII thereof, Holder will not, and will not authorize, direct or
permit any of its officers, directors, employees, affiliates under its
control, investment bankers, attorneys, accountants or other agents,
advisors or representatives (collectively, "Representatives") to, directly
or indirectly, (i) solicit, initiate, encourage or induce the making,
submission or announcement of any Kana Takeover Proposal (as defined
below), (ii) participate in any discussions or negotiations with any person
regarding, or furnish to any person any information with respect to, or
take any other action to facilitate any inquiry or proposal that
constitutes or may reasonably be expected to lead to, any Kana Takeover
Proposal, (iii) authorize, approve or recommend any Kana Takeover Proposal,
or (iv) enter into any letter of intent or similar document or any
contract, agreement or commitment accepting or providing for any Kana
Takeover Proposal.
(b) Holder and Silknet agree that irreparable damage would occur in
the event that the provisions of this Section 11 were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed by the parties hereto that Silknet shall be entitled to
seek an injunction or injunctions to prevent breaches of this Section 11
and to enforce specifically the terms and provisions hereof in any court of
the United States or any state having jurisdiction, this being in addition
to any other remedy to which the parties may be entitled at law or in
equity.
(c) For purposes of this Agreement, "Kana Takeover Proposal" means any
offer or proposal for, or any indication of interest in, a merger or other
business combination involving an acquisition or a change in control of
Kana or the acquisition of a majority of the outstanding shares of capital
stock of Kana, or all or substantially all of the assets of Kana, or any
other transaction inconsistent with consummation of the transactions
contemplated hereby, which offer, proposal or indication of interest is
conditioned on the termination of the Merger Agreement by Kana or the
denial by Kana stockholders of the Kana Voting Proposal.
Section 12 Confidentiality. Holder agrees (i) to hold any information
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regarding this Agreement and the Merger in strict confidence and (ii) not to
divulge any such information to any third person, except to the extent any of
the same is hereafter publicly disclosed by Silknet.
Section 13 Miscellaneous.
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(a) Severability. If any term, provision, covenant or restriction of
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this Kana Stock Voting Agreement or the Proxy (i) is held by a court of
competent jurisdiction to be invalid, void or unenforceable for any reason,
or (ii) would preclude the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended, such term, provision, covenant or restriction shall
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be modified or voided, as may be necessary to achieve the intent of the
parties to the extent possible, and the remainder of the terms, provisions,
covenants and restrictions of this Kana Stock Voting Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
(b) Binding Effect and Assignment. This Kana Stock Voting Agreement
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and all of the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but, except as otherwise specifically provided herein, neither
this Kana Stock Voting Agreement nor any of the rights, interests or
obligations of the parties hereto may be assigned by either of the parties
hereto without the prior written consent of the other, and any attempted
assignment thereof without such consent shall be null and void.
(c) Amendments and Modifications. This Kana Stock Voting Agreement
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may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the parties
hereto.
(d) Specific Performance: Injunctive Relief. The parties hereto
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acknowledge that Silknet will be irreparably harmed by a breach of any of
the covenants or agreements of Holder set forth herein and that there will
be no adequate remedy at law for such a breach. Therefore, it is agreed
that, in addition to any other remedies which may be available to Silknet
upon such breach, Silknet shall have the right to enforce such covenants
and agreements by specific performance, injunctive relief or by any other
means available to it at law or in equity.
(e) Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and sufficient if delivered in
person, by commercial overnight courier service, by confirmed telecopy, or
sent by mail (registered or certified mail, postage prepaid, return receipt
requested), to the respective parties as follows:
If to Silknet: Silknet Software Inc.
Xxx Xxxxxxx Xxxxxxxx
00 Xxxxxxxxx Xxxx Xxxxxx
Fax: (000) 000-0000
Attention: Chief Executive Officer
If to Holder: To the address for notice set forth on the last page
hereof.
With a copy to: Kana Communications, Inc.
000 Xxx Xxxx
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Chief Executive Officer
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and to: Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxxx X. Xxxxxxxxxxx, Esq.
and to: Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxx X. Xxxxxx, Esq.
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
(f) Governing Law. This Kana Stock Voting Agreement shall be governed
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by, construed and enforced in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law. Each
party hereto irrevocably and unconditionally consents and submits to the
jurisdiction of the courts of the State of Delaware and of the United
States of America located in the State of Delaware for any actions, suits
or proceedings arising out of or relating to this agreement and the
transactions contemplated hereby.
(g) Entire Agreement. This Kana Stock Voting Agreement contains the
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entire understanding of the parties with respect to the subject matter
hereof, and supersedes all prior negotiations and understandings between
the parties with respect to such subject matter.
(h) Counterparts. This Kana Stock Voting Agreement may be executed in
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one or more counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
(i) Effect of Headings. The section headings contained herein are for
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convenience only and shall not affect the construction or interpretation of
this Kana Stock Voting Agreement.
(j) Holder Capacity. Notwithstanding anything herein to the contrary,
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no person executing this Agreement who is, or becomes during the term
hereof, a director of Silknet makes any agreement or understanding herein
in his or her capacity as such director, and the agreements set forth
herein shall in no way restrict any director in the exercise of his or her
fiduciary duties as a director of Silknet. Holder has executed this
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Agreement solely in his or her capacity as the record or beneficial holder
of such Holder's Shares or as the trustee of a trust whose beneficiaries
are the beneficial owners of such Holder's Shares.
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IN WITNESS WHEREOF, the parties have caused this Kana Stock Voting
Agreement to be duly executed on the day and year first above written.
SILKNET SOFTWARE INC.
By:______________________________
Its:_____________________________
[Signature page to Stock Voting Agreement]
HOLDER
By:__________________________________
Holder's Address for Notice:
_____________________________________
_____________________________________
_____________________________________
Number of Shares owned beneficially:
_____________________________________
Number of Shares owned of record (if different
from above):
_____________________________________
[Signature page to Stock Voting Agreement]
ANNEX A
IRREVOCABLE PROXY
The undersigned stockholder of Kana Communications, Inc., a Delaware
corporation ("Kana"), hereby irrevocably appoints and constitutes the members of
the Board of Directors of Silknet Software Inc., a Delaware corporation
("Silknet"), and each of them (the "Proxyholders"), the agents and proxies of
the undersigned, with full power of substitution and resubstitution, to the full
extent of the undersigned's rights with respect to the shares of capital stock
of Kana beneficially owned by the undersigned, which shares are listed below and
any and all other shares or securities issued or issuable in respect thereof, or
which the undersigned otherwise acquires, on or after the date hereof and prior
to the date this proxy terminates (collectively, the "Shares"), to vote the
Shares (except those Shares which are not voting securities at the time of the
vote, or are not converted into voting securities at the time of a vote) as
follows:
The agents and proxies named above are empowered at any time prior to
termination of this proxy to exercise all voting and other rights
(including, without limitation, the power to execute and deliver written
consents with respect to the Shares) of the undersigned at every annual,
special or adjourned meeting of Kana stockholders, and in every written
consent in lieu of such a meeting, or otherwise,
Section 13 (a) in favor of (i) the issuance of shares of Kana stock
pursuant to the Agreement and Plan of Reorganization by and among Kana,
Pistol Acquisition Corp. ("Sub"), and Silknet, dated as of February 6,
2000, as the same may be amended from time to time (the "Merger
Agreement"), and (ii) any proposal or action which would or could
reasonably be expected to facilitate the merger of Sub with and into
Silknet pursuant to the Merger Agreement (the "Merger");
(a) (b) against approval of any proposal made in opposition to or
competition with consummation of the Merger and the Merger Agreement;
(b) (c) against any merger, consolidation or other business
combination of Kana with, sale of assets or stock of Kana to, or
reorganization or recapitalization involving Kana, other than as
contemplated or permitted by the Merger Agreement;
(c) (d) against any liquidation, or winding up of Kana; and
(d) (e) against any other proposal or action which would, or could
reasonably be expected to, prohibit or discourage the
Merger.
The Proxyholders may not exercise this proxy with respect to any other matter.
The undersigned may vote the Shares on all such other matters.
The proxy granted by the undersigned to the Proxyholders hereby is granted
as of the date of this Irrevocable Proxy in order to secure the obligations of
the undersigned set forth in Section 2 of the Kana Stock Voting Agreement, and
is irrevocable and coupled with an interest in such obligations and in the
interests in Kana to be purchased and sold pursuant the Merger Agreement. This
proxy will terminate upon the termination of the Kana Stock Voting Agreement in
accordance with its terms.
Upon the execution hereof, all prior proxies given by the undersigned with
respect to the Shares are hereby revoked, and no subsequent proxies will be
given with respect to the Shares until such time as this proxy shall be
terminated in accordance with its terms.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned. The undersigned authorizes the
Proxyholders to file this proxy and any substitution or revocation of
substitution with the Secretary of Kana and with any Inspector of Elections at
any meeting of the stockholders of Kana.
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This proxy is irrevocable and shall survive the insolvency, incapacity,
death or liquidation of the undersigned.
Dated: February __, 2000.
Name of Stockholder: _____________________________
Signature of Stockholder: _____________________________
Shares beneficially owned by Stockholder: _______________
Shares owned of record by Stockholder: _______________
[Signature page to Irrevocable Proxy]
