Exhibit 10.7
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of June 19, 2000 (this "Agreement"),
----------
between Brokat Aktiengesellschaft, which is in the process of changing its name
from Brokat InfoSystems Aktiengesellschaft, a German corporation (the "Parent"),
-------
and Lex Magna Limited (the "Majority Stockholder"), the majority stockholder of
---------------------
GemStone Systems, Inc., an Oregon corporation (the "Company"). Capitalized
--------
terms used without definition herein have the meanings assigned to them in the
Merger Agreement (as hereinafter defined).
WITNESSETH:
WHEREAS, the Parent and the Company are, concurrently with the execution
and delivery of this Agreement, entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), pursuant to which the
-----------------
Parent and the Company intend to combine their businesses by merging Merger Sub
with and into the Company and making the Company a wholly owned subsidiary of
the Parent (the "Merger");
-------
WHEREAS, as of the date hereof, the Majority Stockholder is the record and
beneficial owner of the number of shares of common stock, par value $0.01 per
share, of the Company ("Company Common Stock"), and shares of Company Preferred
---------------------
Stock ("Company Preferred Stock"), in each case, as set forth in the Merger
------------------------
Agreement (the Majority Stockholder's "Existing Shares" and, together with any
----------------
shares of the Company Common Stock or other voting capital stock of the Company
acquired after the date hereof, whether upon the exercise of warrants, options,
conversion of convertible securities or otherwise, the Majority Stockholder's
"Shares");
-------
WHEREAS, pursuant to the Merger Agreement, the Majority Stockholder is
entitled to receive, at the Effective Time of the Merger ("Effective Time"),
shares of the Parent ("Parent Shares") or American Depositary Shares ("Parent
-------------- ------
ADSs") representing Parent Shares (such Parent Shares and Parent ADSs, together
----
with any Parent Shares or Parent ADSs acquired upon the exercise of any warrants
or options or upon the conversion of convertible securities acquired prior to
the Effective Time, whether or not such exercise or conversion occurred prior to
the Effective Time, being referred to herein as "Parent Securities");
------------------
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
I. ARTICLE
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
The Majority Stockholder hereby represents and warrants to the Parent as
follows:
A. Authorization; Validity of Agreement; Necessary Action. The Majority
Stockholder has full power and authority to execute and deliver this Agreement,
to perform the Majority Stockholder's obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and performance by
the Majority Stockholder of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly and validly authorized by the
Majority Stockholder and no other actions or proceedings on the part of the
Majority Stockholder are necessary to authorize the execution and delivery by it
of this Agreement and the consummation by it of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Majority
Stockholder, and, assuming this Agreement constitutes a valid and binding
obligation of the Parent, constitutes a valid and binding obligation of the
Majority Stockholder, enforceable against it in accordance with its terms.
A. Consents and Approval; No Violations. None of the execution, delivery or
performance of this Agreement by the Majority Stockholder nor the consummation
by it of the transactions contemplated hereby nor compliance by it with any of
the provisions hereof will (i) require any filing, registration or declaration
with, or consent, approval, order or authorization of, any Governmental Entity,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, guarantee,
other evidence of indebtedness, lease, license, contract, agreement or other
instrument or obligation to which the Majority Stockholder is a party or by
which it or any of its properties or assets may be bound or (iii) violate any
judgment, permit, order, decree, statute, ordinance, law, rule or regulation
applicable to it or any of its properties or assets.
A. Shares. The Majority Stockholder's Existing Shares are, and all of its Shares
from the date hereof through and on the Closing Date will be, owned beneficially
and of record by the Majority Stockholder (subject to any dispositions of Shares
permitted by Section 2.1(a)). As of the date hereof, the Majority Stockholder's
Existing Shares constitute all of the shares of the Company Common Stock owned
of record or beneficially by such Stockholder. All of the Majority Stockholder's
Existing Shares are issued and outstanding, and, except as set forth on Schedule
A hereto, the Majority Stockholder does not own,
----------
of record or beneficially, any warrants, options or other rights to acquire any
shares of the Company Common Stock or any other capital stock of the Company.
The Majority Stockholder has good and marketable title to its Existing Shares
and at all times during the term of this Agreement and at the Effective Time
will have good and marketable title to its Shares.
I. ARTICLE
COVENANTS
A. Limitations on Transfer of Shares Prior to Effective Time.
(a) The Majority Stockholder hereby agrees not to take any of the following
actions prior to the Effective Time, except in accordance with subsection (b) of
this Section 2.1.
(i) tender any of such Stockholder's Shares or any securities convertible
into or exchangeable or exercisable for such Stockholder's Shares to any person,
other than the Exchange Agent, the Parent or the Merger Sub;
(ii) sell, transfer, pledge, encumber, assign or otherwise dispose of any
of such Stockholder's Shares or any securities convertible into or exchangeable
or exercisable for such Stockholder's Shares, other than to the Exchange Agent,
the Parent or the Merger Sub;
(iii) enforce or permit the execution of the provisions of any redemption,
share purchase or sale, recapitalization or other agreement with the Company or
(iv) enter into any contract, option or other arrangement or understanding
with respect to or consent to the offer for sale, sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of its Shares, any
securities convertible into or exchangeable or exercisable for Company Common
Stock, any other capital stock of the Company or any interest in any of the
foregoing with any person, other than the Exchange Agent, the Parent or Merger
Sub.
(a) Notwithstanding subsection (a) above, the Majority Stockholder may take an
action described in subsection (a) if (i) the Parent gives its prior written
consent to such action or (ii) the proposed transferee agrees in writing, in an
instrument reasonably acceptable to the Parent, to be bound by this Agreement as
a Stockholder and such transfer is consummated at least thirty (30) days prior
to the Effective Time.
(a) The Majority Stockholder shall not request that the Company or its transfer
agent register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Stockholder's Shares, and the
Majority Stockholder hereby consents to the entry of stop transfer instructions
by the Company of any transfer of the Majority Stockholder's Shares, unless such
transfer is made in compliance with this Agreement.
(a) In the event of a stock dividend or distribution, or any change in Company
Common Stock by reason of any stock dividend or distribution, or any change, in
Company Common Stock by reason of any stock dividend, split-up,
recapitalization,
combination, exchange of shares or the like, the term "Shares" shall be deemed
to refer to and include the Shares as well as all such stock dividends and
distributions and any securities into which or for which any or all of the
Shares may be changed or exchanged or which are received in such transaction.
A. Limitations on Transfer of Parent Securities After Effective Time.
(a) Restrictions During Initial Period. During the period ending on the
----------------------------------
earlier of (i) the date six months following the Effective Time, or (ii) the
date 60 days following the closing of the Parent's acquisition of Blaze
Software, Inc., the Majority Stockholder hereby agrees that, in respect of
1,930,541 Parent Shares issued to the Majority Stockholder as Merger
Consideration (the "Restricted Parent Securities"), the Majority Stockholder
----------------------------
shall not, without the express prior written consent of the Parent:
(i) sell, transfer, pledge, encumber, assign or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
Restricted Parent Securities or any securities convertible into or exchangeable
or exercisable for Parent Securities (excluding a pledge (and the subsequent
foreclosure of the pledge, if applicable) of Restricted Parent Securities, which
is expressly permitted hereunder, in connection with a borrowing facility in
which it is not expected, on the date credit is extended against such pledge,
that such Restricted Parent Securities would be sold by the pledgee);
(ii) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of any Restricted Parent Securities or any securities convertible into or
exchangeable or exercisable for Restricted Parent Securities; or
(iii) deposit any Restricted Parent Securities into a facility for Parent
ADSs or withdraw any Parent ADSs from any such facility;
whether, in the case of clause (i) or (ii) above, any such transaction is to be
settled by delivery of Restricted Parent Securities or other securities, in cash
or otherwise. Any transaction referred to in clause (i), (ii) or (iii) is
hereinafter referred to as a "Transfer."
--------
(a) General Restrictions on Transfer. The Majority Stockholder, hereby further
--------------------------------
agrees not to:
(i) Transfer any Parent Securities in violation of Rule 145 and Rule 144,
deeming (for purposes of this covenant) such Stockholder to be an "affiliate" of
the Company for purposes of such Rules and applying the restrictions of such
Rules to any Transfers outside the United States as well as within (i.e. without
regard to Regulation S);
(ii) Transfer, in any four calendar week period, (x) Parent ADSs in excess
of one-third the average weekly reported volume of trading in such securities
reported through the Nasdaq Stock Market during the preceding four calendar
weeks, or
(y) Parent Shares in excess of the greater of (A) one-third the average weekly
reported volume of trading in such securities reported through the Neuer Markt
during the preceding four calendar weeks or (B) one-third of one percent of
outstanding Parent Shares; provided, that the foregoing volume limitations shall
cease to apply 135 days following the end of any restricted period applicable
under clause (iii) below;
(iii) Transfer any Parent Securities during the period specified by the
Parent and the managing underwriter in connection with any underwritten U.S.
public offering of Parent ADSs or other equity securities of the Parent (such
period not to extend more than two weeks (14 days) prior to the reasonably
expected closing date for such offering or beyond 90 days after the actual
closing of such offering).
(a) Notwithstanding any restrictions contained in Sections 2.2(a) or 2.2(b)(i)
and (ii) (but not 2.2(b)(iii)), the Majority Shareholder may transfer, subject
to the prior written consent of the Parent, Restricted Parent Securities
pursuant to a limited private placement; provided, that the transferee agrees to
be bound by the terms of this Agreement.
(a) Notwithstanding anything contained in this Agreement, the Majority
Shareholder may deliver Parent Shares or Parent ADSs at any time in satisfaction
of the exercise of stock options previously granted by the Majority Stockholder
to employees or directors of the Company or Majority Shareholder.
(a) Share Legends. The Majority Stockholder consents to the imprinting on its
-------------
certificates representing Restricted Parent Securities of legends reflecting the
restrictions set forth in this Section 2.2.
A. Incidental or "Piggy-Back" Offering.
(a) During the Term of this Agreement, if the Parent proposes to commence an
underwritten public offering of Parent Shares or Parent ADSs in the United
States that is registered with the U.S. Securities and Exchange Commission
(other than on a Form X-0, X-0 or F-4 or successor form) which includes any
Parent Shares or Parent ADSs for the account of one or more securityholders of
the Parent, then the Parent shall give written notice of such proposed offering
to the Majority Stockholder at least twenty (20) days before the anticipated
commencement of such offering, and such notice shall describe the proposed
distribution and offer the Majority Stockholder the opportunity to offer the
number of Parent Shares or Parent ADSs (as the case may be) as the Majority
Stockholder may request (an "Incidental Offering"). The Parent shall use
-------------------
commercially reasonable efforts (within twenty (20) days of the notice provided
for in the preceding sentence) to cause the managing underwriter or underwriters
to permit the Majority Stockholder if it has requested in writing to participate
in the Incidental Offering to include its Parent Shares or Parent ADSs (as the
case may be) in such underwritten secondary offering on the same terms and
conditions as the securities of such other participating security holders. The
Parent shall not be required to include any such Parent Shares or Parent ADSs
(as the case may be) in such secondary underwritten offering unless the Majority
Stockholder accepts the terms of the underwritten offering as agreed upon
between the Parent and the managing underwriter or underwriters, and then only
in such quantity as the managing underwriter or underwriters believe will not
jeopardize the success of the offering by the Parent. If the managing
underwriter or underwriters determine that the inclusion of all or part of the
Parent Shares or Parent ADSs which the Majority Stockholder has requested to be
included would materially adversely affect the success of such offering, then
the Parent shall be required to include in such Incidental Offering, to the
extent of the amount that the managing underwriter or underwriters believe may
be sold without causing such adverse effect, first, all of the securities to be
-----
offered for the account of the Parent (if any); and second, the Parent Shares
------
(or Parent ADSs) to be offered for the account of the Majority Stockholder
pursuant to this Section 2.3 and any other securities requested to be included
in such secondary offering, pro rata based on the number of Parent Shares (or
Parent ADSs) owned by each such stockholder.
(a) The Parent shall bear all expenses in connection with any Incidental
Offering pursuant to this Section 2.3 (except for underwriter commissions or
discounts to be shared on a pro rata basis based on the number of securities
offered by each person).
I. ARTICLE
MISCELLANEOUS
A. Termination. This Agreement shall terminate and no party shall have any
rights or duties hereunder if the Merger Agreement terminates pursuant to
Section 7.1 thereof. In addition, the obligations under Section 2.1 shall
terminate at the
Effective Time. The obligations under Sections 2.2 and 2.3 shall survive the
Effective Time and shall terminate on the second anniversary of the Effective
Time. Nothing in this Section 3.1 shall relieve or otherwise limit any party of
liability for breach of this Agreement.
A. Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by the Merger Agreement
and this Agreement.
A. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed duly given (a) on the date of delivery if delivered
personally, or by telecopy or facsimile, upon confirmation of receipt, (b) on
the third business day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the tenth business day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:
(a) if to the Parent to:
Brokat AG
Xxxxxxxxxxxxxxxx 0
0000 Xxxxxxxxx, Xxxxxxx
Fax: 00-000-000-00-000
Attention: Xxxx-Xxxxx Xxxxxx, Esq.
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
(b) if to the Majority Stockholder, as provided on the signature
page hereof,
with a copy to:
Xxxxxx Xxxx LLP
1600 Pioneer Tower
000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
A. Interpretation. When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of, or Exhibit or
Schedule to, this Agreement unless otherwise indicated. The headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
A. Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that both parties need not
sign the same counterpart.
A. Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement and the other agreements of the parties referred to
herein constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
A. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Oregon (without giving effect to choice of law
principles thereof).
A. Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
A. Amendment. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
A. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior written
consent of the other party, and any attempt to make any such assignment without
such consent shall be null and void, except that the Parent may assign, in its
sole discretion, any or all of its rights, interests and obligations under this
Agreement to any direct wholly owned Subsidiary of the Parent or the Exchange
Agent without the consent of the Majority Stockholder, but no such assignment
shall relieve the Parent of any of its obligations under this Agreement. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns. Without limiting the generality of the foregoing, the rights under
Section 2.3 shall not be assignable to any other person, including any purchaser
or other transferee of Parent Shares or Parent ADSs.
A. Submission to Jurisdiction; Waivers. Each of the Parent and the Majority
Stockholder irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in the Courts of the State of Oregon, and each of the
Parent and the Majority Stockholder hereby irrevocably submits with regard to
any such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the nonexclusive jurisdiction of the aforesaid
courts. Each of the Parent and the Majority Stockholder hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense, counterclaim
or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason other than the failure to lawfully
serve process, (b) that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), and (c) to the
fullest extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii) the venue
of such suit, action or proceeding is improper and (iii) this Agreement, or the
subject matter hereof, may not be enforced in or by such courts.
A. Specific Performance. Each of the parties hereto acknowledge that it will be
impossible to measure in money the damage to the other parties if a party hereto
fails to comply with any of the obligations imposed by this Agreement, that
every such obligation is material and that, in the event of any such failure,
the other parties will not have an adequate remedy at law or damages.
Accordingly, each party hereto agrees that injunctive relief of other equitable
remedy, in addition to remedies at law or damages, is the appropriate remedy for
any such failure and will not oppose the granting of such relief on the basis
that the other parties have an adequate remedy at law. Each party hereto agrees
that it will not seek, and agrees to waive any requirement for, the securing or
posting of a bond in connection with any other party's seeking or obtaining such
equitable relief.
A. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on
the part of any party hereto in the exercise of any right hereunder will impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty or agreement herein, nor will any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive to, and not exclusive of, any rights or
remedies otherwise available.
A. Attorney's Fees. In any action or proceeding brought to enforce any provision
of this Agreement or where any provision hereof is validly asserted as a
defense, the successful party shall, to the extent permitted by applicable law,
be entitled to recover all attorney's fees in addition to any other available
remedy.
IN WITNESS WHEREOF, the Parent and the Majority Stockholder have caused
this Agreement to be signed by their respective officers or other authorized
person thereunto duly authorized as of the date first written above.
BROKAT AKTIENGESELLSCHAFT
By: _____________________________
Name:
Title:
By: _____________________________
Name:
Title:
LEX MAGNA LIMITED
By: _____________________________
Name:
Title:
SCHEDULE A
----------
Shares subject to
Stockholder Options or Warrants
Lex Magna Limited - 0 -
