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EXHIBIT 99.5
EXECUTION COPY
SILKNET STOCK VOTING AGREEMENT
THIS SILKNET STOCK VOTING AGREEMENT ("SILKNET STOCK VOTING AGREEMENT") is
made and entered into as of February 6, 2000 by and between Kana Communications,
Inc., a Delaware corporation ("KANA"), and the undersigned director, officer or
affiliate (the "HOLDER") of Silknet Software Inc., a Delaware corporation
("SILKNET").
RECITALS
Concurrently with the execution of this Silknet Stock Voting Agreement,
Kana, Pistol Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Kana ("SUB"), and Silknet 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 Silknet indicated on the signature page of this Silknet Stock Voting
Agreement (the "SHARES"). As a condition to its execution and delivery of the
Merger Agreement, Kana has requested that Holder agree, and in consideration,
and to induce the execution and delivery, of the Merger Agreement by Kana,
Holder is willing to agree (i) not to transfer or otherwise dispose of the
Shares or any other shares of capital stock of Silknet acquired after the date
of this Silknet Stock Agreement and prior to the expiration of this Silknet
Stock Voting Agreement, except as specifically permitted hereby, and (ii) to
vote the Shares and any other such shares of Silknet 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
Section 1 NO TRANSFER OR ENCUMBRANCE OF SHARES. Holder agrees not to
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 Silknet
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) or (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
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Kana, to be bound by the terms and conditions of this Silknet Stock Voting
Agreement. This Silknet 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
Silknet that Holder purchases or with respect to which Holder otherwise acquires
beneficial ownership after the date of this Silknet Stock Voting Agreement and
prior to the Expiration Date ("NEW SHARES") shall be subject to the terms and
conditions of this Silknet 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 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 Silknet 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 adoption of the Merger Agreement and approval of the
Merger 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
Silknet with, sale of assets or stock of Silknet to, or reorganization or
recapitalization involving Silknet with, any party other than Kana or an
affiliate of Kana as contemplated by the Merger Agreement;
(d) against any liquidation, or winding up of Silknet; 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 Silknet, 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 Silknet so that all Shares and New Shares are
counted for the purposes of determining the presence of a quorum at such
meetings. This Silknet Stock Voting Agreement is intended to bind Holder only
with respect to 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 Silknet.
Section 3 OPTION EXERCISE. Holder agrees that if, at any meeting of
stockholders of Silknet called with respect to any of (a) through (e) of Section
2 hereof, the number of shares of
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Silknet'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. Kana 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, Kana 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
Silknet Stock Voting Agreement, Holder agrees to deliver to Kana 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 Silknet Stock Voting Agreement in accordance with its terms.
Section 5 REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDER. Holder
hereby represents, warrants and covenants to Kana as follows:
(a) OWNERSHIP OF SHARES. Holder (i) is the holder of record or
beneficial owner or holder of the voting power of the Shares and will be
the holder of record or beneficial owner or holder of 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 Silknet 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
Silknet Stock Voting Agreement and the Proxy.
(b) NO VOTING TRUSTS AND AGREEMENTS. Between the date of this
Agreement and the Expiration Date, Holder will not, and will not permit any
entity under Holder's control to, deposit any shares of Silknet capital
stock held by Holder or such entity in a voting trust or subject any shares
of Silknet 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 Kana.
(c) VALIDITY; NO CONFLICT. This Silknet Stock Voting Agreement
constitutes the legal, valid and binding obligation of Holder. Neither the
execution of this Silknet Stock Voting Agreement by Holder nor the
consummation of the transactions contemplated 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.
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(d) NO PROXY SOLICITATIONS. Subject to the last sentence of Section 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 Silknet with respect to an
Opposing Proposal.
Section 6 REPRESENTATIONS, WARRANTIES AND COVENANTS OF KANA. Kana
represents, warrants and covenants to Holder as follows:
(a) DUE AUTHORIZATION. This Silknet Stock Voting Agreement has been
authorized by all necessary corporate action on the part of Kana and has
been duly executed by a duly authorized officer of Kana.
(b) VALIDITY; NO CONFLICT. This Silknet Stock Voting Agreement
constitutes the legal, valid and binding obligation of Kana. Neither the
execution of this Silknet Stock Voting Agreement by Kana nor the
consummation of the transactions contemplated herein will violate or result
in a breach of (i) any agreement to which Kana is a party or by which Kana
is bound, (ii) any decree, judgment or order to which Kana is subject, or
(iii) any law or regulation now in effect applicable to Kana.
Section 7 ADDITIONAL DOCUMENTS. Holder and Kana hereby covenant and
agree to execute and deliver any additional documents necessary or desirable, in
the reasonable opinion of Kana's legal counsel or Holder, as the case may be, to
carry out the intent of this Silknet Stock Voting Agreement.
Section 8 LEGENDING OF SHARES. Upon the request of Kana, Holder agrees
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.
Section 9 CONSENT AND WAIVER. Holder hereby gives any consent or waiver
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
herein, this Silknet 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.
(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 Silknet 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 Silknet Takeover
Proposal, (iii) authorize, approve or recommend any Silknet Takeover
Proposal, or (iv) enter into any letter of intent or similar document or
any contract, agreement or commitment accepting or providing for any
Silknet Takeover Proposal.
(b) Holder and Kana 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 Kana 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, "SILKNET TAKEOVER PROPOSAL" means
any offer or proposal for, or any indication of interest in, a merger or
other business combination involving Silknet or the acquisition of twenty
percent (20%) or more of the outstanding shares of capital stock of
Silknet, or all or substantially all of the assets of Silknet or any asset
of Silknet, the absence of which would materially diminish the value of the
Merger to Kana or the benefits expected by Kana to be realized from the
Merger, or any other transaction inconsistent with consummation of the
transactions contemplated by the Merger Agreement.
Section 12 CONFIDENTIALITY. Holder agrees (i) to hold any information
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 Kana.
Section 13 MISCELLANEOUS.
(a) SEVERABILITY. If any term, provision, covenant or restriction of
this Silknet 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 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
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Silknet 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 Silknet Stock Voting Agreement
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 Silknet 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 Silknet Stock Voting Agreement
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
acknowledge that Kana 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 Kana upon such
breach, Kana 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
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 Kana: Kana Communications, Inc.
000 Xxx Xxxx
Xxxxxxx Xxxx, XX 00000
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: Silknet Software Inc.
00 Xxxxxxxxx Xxxx Xxxxxx,
Xxxxxxxxxx, 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 Silknet Stock Voting Agreement shall be
governed 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 Silknet Stock Voting Agreement contains the
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 Silknet Stock Voting Agreement may be executed
in 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
convenience only and shall not affect the construction or interpretation of
this Silknet Stock Voting Agreement.
(j) HOLDER CAPACITY. Notwithstanding anything herein to the contrary,
no person executing this Agreement who is, or becomes during the term
hereof, a director of Kana 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 Kana. Holder has executed this 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 Silknet Stock Voting
Agreement to be duly executed on the day and year first above written.
KANA COMMUNICATIONS, INC.
By:
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Its:
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HOLDER
By:
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Holder's Address for Notice:
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Number of Shares owned beneficially:
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Number of Shares owned of record (if different
from above):
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[SIGNATURE PAGE OF IRREVOCABLE PROXY]
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ANNEX A
IRREVOCABLE PROXY
The undersigned stockholder of Silknet Software Inc., a Delaware
corporation ("SILKNET"), hereby irrevocably appoints and constitutes the members
of the Board of Directors of Kana Communications, Inc., a Delaware corporation
("KANA"), 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 Silknet 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 a 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 Silknet stockholders, and in every written
consent in lieu of such a meeting, or otherwise,
(a) in favor of (i) adoption of the Agreement and Plan of
Reorganization, by and among Kana, Pistol Acquisition Corp. ("SUB"), and
Silknet, dated as of February __, 2000, as the same may be amended from
time to time, (the "MERGER AGREEMENT") and (ii) approval of the merger of
Sub with and into Silknet as contemplated by the Merger Agreement (the
"MERGER"), 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
Silknet with, sale of assets or stock of Silknet to, or reorganization or
recapitalization involving Silknet with, any party other than Kana or an
affiliate of Kana as contemplated by the Merger Agreement;
(d) against any liquidation, or winding up of Silknet; and
(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 Silknet Stock Voting Agreement,
and is irrevocable and coupled with an interest
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in such obligations and in the interests in Silknet to be purchased and sold
pursuant to the Merger Agreement. This proxy will terminate upon the termination
of the Silknet 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 Silknet and with any Inspector of Elections
at any meeting of the stockholders of Silknet.
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 OF IRREVOCABLE PROXY]
