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EXHIBIT 4
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AGREEMENT AND PLAN OF MERGER
dated as of July 14, 1999
among
COMPUWARE CORPORATION,
CV ACQUISITION, INC.
and
VIASOFT, INC.
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TABLE OF CONTENTS
ARTICLE I - THE OFFER.................................................................................................2
1.1 The Offer...................................................................................................2
1.2 Viasoft Actions.............................................................................................3
ARTICLE II - THE MERGER...............................................................................................4
2.1 The Merger..................................................................................................4
2.2 Closing.....................................................................................................5
2.3 Effective Time..............................................................................................5
2.4 Effects of the Merger.......................................................................................5
2.5 Certificate of Incorporation and Bylaws.....................................................................5
2.6 Directors...................................................................................................5
2.7 Officers....................................................................................................5
2.8 Merger Without Shareholders Meeting.........................................................................5
ARTICLE III - EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.....6
3.1 Effect on Capital Stock.....................................................................................6
3.2 Exchange of Certificates....................................................................................7
ARTICLE IV - REPRESENTATIONS AND WARRANTIES...........................................................................9
4.1 Representations and Warranties of Viasoft...................................................................9
4.2 Representations and Warranties of Compuware and Merger Sub.................................................26
ARTICLE V - COVENANTS RELATING TO CONDUCT OF BUSINESS................................................................29
5.1 Conduct of Business........................................................................................29
5.2 No Solicitation............................................................................................31
ARTICLE VI - ADDITIONAL AGREEMENTS...................................................................................33
6.1 Shareholder Approval; Preparation of Proxy Statement.......................................................33
6.2 Access to Information; Confidentiality.....................................................................35
6.3 Reasonable Efforts; Notification...........................................................................35
6.4 Stock Plans................................................................................................36
6.5 Post Merger Employment Benefits............................................................................36
6.6 Indemnification, Exculpation and Insurance.................................................................37
6.7 Directors..................................................................................................37
6.8 Fees and Expenses..........................................................................................38
6.9 Public Announcements.......................................................................................38
6.10 Shareholder Litigation.....................................................................................39
6.11 Certain Tax Matters........................................................................................39
ARTICLE VII - CONDITIONS PRECEDENT...................................................................................39
7.1 Conditions to Each Party's Obligation to Effect the Merger.................................................39
7.2 Conditions to Compuware's and Merger Sub's Obligation to Effect the Merger.................................40
7.3 Conditions to Viasoft's Obligation to Effect the Merger....................................................41
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7.4 Conditions to the Short-Form Merger........................................................................41
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER.....................................................................41
8.1 Termination................................................................................................41
8.2 Effect of Termination......................................................................................43
8.3 Amendment..................................................................................................44
8.4 Extension; Waiver..........................................................................................44
8.5 Procedure for Termination, Amendment, Extension or Waiver..................................................44
ARTICLE IX - GENERAL PROVISIONS......................................................................................45
9.1 Nonsurvival of Representations and Warranties..............................................................45
9.2 Notices....................................................................................................45
9.3 Definitions................................................................................................46
9.4 Interpretation.............................................................................................49
9.5 Counterparts...............................................................................................50
9.6 Entire Agreement; No Third-Party Beneficiaries.............................................................50
9.7 Governing Law..............................................................................................50
9.8 Assignment.................................................................................................50
9.9 Enforcement................................................................................................50
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 14, 1999, among
Compuware Corporation, a Michigan corporation ("Compuware"), CV Acquisition,
Inc., a Delaware corporation and a wholly-owned subsidiary of Compuware ("Merger
Sub"), and Viasoft, Inc., a Delaware corporation ("Viasoft").
Recitals
A. In furtherance of the acquisition of Viasoft by Compuware on the
terms and subject to the conditions set forth in this Agreement, Compuware
proposes to cause Merger Sub to make a tender offer (as it may be amended from
time to time as permitted under this Agreement, the "Offer") to purchase all the
issued and outstanding shares of Common Stock, $0.001 par value, of Viasoft
("Viasoft Common Stock") (including the associated Preferred Share Purchase
Rights ("Rights") issued pursuant to the Viasoft Rights Agreement (defined
below)), at a price per share of Viasoft Common Stock (a "Share") of not less
than $9.00 net to the seller in cash and without interest thereon (such price,
as may hereafter be increased, the "Offer Price"), subject to reduction for any
applicable federal backup or other applicable withholding or stock transfer
taxes, upon the terms and subject to the conditions set forth in this Agreement,
and the Board of Directors of Viasoft has approved the Offer and has resolved to
recommend that Viasoft's shareholders accept the Offer.
B. The respective Boards of Directors of Compuware, Merger Sub and
Viasoft have approved the Offer and the merger of Merger Sub into Viasoft, as
set forth below (the "Merger"), upon the terms and subject to the conditions set
forth in this Agreement, whereby each issued and outstanding Share, other than
Shares owned directly or indirectly by Compuware or Viasoft and Dissenting
Shares (as defined in Section 3.1(d)), will be converted into the right to
receive the Offer Price.
C. Compuware, Merger Sub and Viasoft desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
D. Concurrently with the execution and delivery of this Agreement,
Compuware and certain shareholders of Viasoft have entered into a Shareholder
Tender and Voting Agreement, pursuant to which such shareholders agree to tender
their shares of Viasoft Common Stock in the Offer and vote in favor of the
Merger.
Therefore, the parties agree as follows:
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ARTICLE I
THE OFFER
1.1 The Offer.
(a) Subject to the provisions of this Agreement, Merger
Sub will, and Compuware will cause Merger Sub to, within five business days
after the public announcement (on the date hereof or the following business day)
of the execution of this Agreement, commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) the
Offer. The obligation of Merger Sub to, and of Compuware to cause Merger Sub to,
commence the Offer and accept for payment, and pay for, any Shares tendered
pursuant to the Offer will be subject to the conditions set forth in Exhibit A
and to the terms and conditions of this Agreement. Merger Sub expressly reserves
the right to waive any conditions to the Offer, to increase the price per Share
payable in the Offer, to extend the duration of the Offer (subject to the
limitations set forth in this Section), or to make any other changes in the
terms and conditions of the Offer; provided, however, that without Viasoft's
consent, no such change may be made which (i) decreases the price per Share
payable in the Offer, (ii) reduces the minimum (including by waiver of the
Minimum Tender Condition, as defined in Exhibit A) or maximum number of Shares
to be purchased in the Offer, (iii) imposes conditions to the Offer in addition
to those set forth in Exhibit A, (iv) changes the form of consideration payable
in the Offer, (v) extends the expiration of the Offer (the "Expiration Date")
(which will initially be twenty business days following the commencement of the
Offer) beyond five business days following the initial expiration of the Offer
except (A) as required by the Exchange Act or (B) in the case of any such
greater than five day extension of the Offer, in Merger Sub's reasonable
judgment, it is reasonably likely that during any such extension, any condition
set forth in Exhibit A (including the Minimum Tender Condition) which is not
satisfied as of the date of such extension will be satisfied during such
extension; provided that, without Viasoft's consent, the Expiration Date may not
be extended pursuant to clause (B) of this sentence beyond twenty business days
following the initial expiration of the Offer, or (vi) amends any other material
terms of the Offer in a manner materially adverse to Viasoft's shareholders.
Subject to the terms and conditions of this Agreement and the Offer (including,
if the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Merger Sub will, and Compuware will cause Merger Sub
to, accept for payment, and pay for, all shares of Viasoft Common Stock validly
tendered and not withdrawn pursuant to the Offer that Merger Sub becomes
obligated to accept for payment, and pay for, pursuant to the Offer as soon as
practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Compuware
and Merger Sub will file with the Securities and Exchange Commission (the "SEC")
a Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which will
contain an offer to purchase and a related letter of transmittal and summary
advertisement (such Schedule 14D-1 and the documents included therein pursuant
to which the Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents") and will mail the Offer Documents to the
shareholders of Viasoft. Compuware and Merger Sub agree that the Offer Documents
will comply as to form in all material respects with the Exchange Act and the
rules and regulations promulgated thereunder, and the Offer Documents, on the
date first published, sent or given to Viasoft's shareholders, will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or
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necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by Compuware or Merger Sub with respect to information supplied by Viasoft
specifically for inclusion in the Offer Documents. Each of Compuware, Merger Sub
and Viasoft agrees promptly to correct any information provided by it for use in
the Offer Documents if and to the extent that such information will have become
false or misleading in any material respect, and each of Compuware and Merger
Sub further agrees to take all steps necessary to amend or supplement the Offer
Documents and to cause the Offer Documents as so amended or supplemented to be
filed with the SEC and to be disseminated to Viasoft's shareholders, in each
case as and to the extent required by applicable federal securities laws.
Viasoft and its counsel will be given a reasonable opportunity to review the
Offer Documents and all amendments and supplements thereto prior to their filing
with the SEC or dissemination to shareholders of Viasoft. Compuware and Merger
Sub agree to provide Viasoft and its counsel any comments Compuware, Merger Sub
or their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments including a copy of such
comments that are made in writing.
(c) Compuware will provide or cause to be provided to
Merger Sub on a timely basis the funds necessary to accept for payment, and pay
for, any shares of Viasoft Common Stock that Merger Sub becomes obligated to
accept for payment, and pay for, pursuant to the Offer.
1.2 Viasoft Actions.
(a) Viasoft hereby approves of and consents to the Offer
and represents that the Board of Directors of Viasoft, at a meeting duly called
and held, duly and unanimously adopted resolutions approving this Agreement, the
Offer and the Merger, determining that the terms of the Offer and the Merger are
fair to, and in the best interests of, Viasoft's shareholders and recommending
that Viasoft's shareholders accept the Offer and tender their shares pursuant to
the Offer and approve and adopt this Agreement and approve the Merger. Viasoft
represents that its Board of Directors has received the opinion of Broadview
International LLC that the proposed consideration to be received by the holders
of Shares pursuant to the Offer and the Merger is fair to such holders from a
financial point of view, and a complete and correct signed copy of such opinion
has been delivered by Viasoft to Compuware. Viasoft hereby consents to the
inclusion in the Offer Documents of the recommendation of Viasoft's Board of
Directors described in the first sentence of this Section 1.2(a) and has
obtained the consent of Broadview International LLC to the inclusion in the
Schedule 14D-9 of a copy of the written opinion referred to in the preceding
sentence. Viasoft has been advised by each of its directors and a majority of
the executive officers that each such person intends to tender all Shares (other
than Shares, if any, held by such person which if tendered, could cause such
person to incur liability under the provisions of Section 16(b) of the Exchange
Act) held by such person pursuant to the Offer.
(b) On the date the Offer Documents are filed with the
SEC, Viasoft will file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, together with all exhibits, amendments and supplements thereto as
well as the Information Statement required pursuant to Section 14(f) under the
Exchange Act, collectively the "Schedule 14D-9") containing the recommendation
described in
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paragraph (a) and will mail the Schedule 14D-9 to the shareholders of Viasoft.
Viasoft agrees that the Schedule 14D-9 will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, and, on the date filed with the SEC and on the date
first published, sent or given to Viasoft's shareholders, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by Viasoft with respect to information supplied
by Compuware or Merger Sub specifically for inclusion in the Schedule 14D-9.
Each of Viasoft, Compuware and Merger Sub agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information will have become false or misleading in any material
respect, and Viasoft further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented to be filed with the SEC and disseminated to Viasoft's
shareholders, in each case as and to the extent required by applicable federal
securities laws. Compuware and its counsel will be given a reasonable
opportunity to review the Schedule 14D-9 and all amendments and supplements
thereto prior to their filing with the SEC or dissemination to shareholders of
Viasoft. Viasoft agrees to provide Compuware and its counsel any comments
Viasoft or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments including a copy of
such comments that are made in writing.
(c) In connection with the Offer, Viasoft will cause its
transfer agent promptly to furnish Merger Sub with mailing labels containing the
names and addresses of the record holders of Viasoft Common Stock as of a record
date and of those persons becoming record holders subsequent to such date,
together with copies of all lists of shareholders, security position listings
and, to the extent reasonably requested, computer files and other information in
Viasoft's possession or control regarding the beneficial owners of Viasoft
Common Stock, and will furnish to Merger Sub such information and assistance
(including updated lists of shareholders, security position listings and
computer files) as Compuware may reasonably request in communicating the Offer
to Viasoft's shareholders. Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Merger, Compuware and Merger Sub
and their agents will hold in confidence the information contained in any such
labels, listings and files, will use such information only in connection with
the Offer and the Merger and, if this Agreement is terminated, will, upon
request, deliver, and will use their best efforts to cause their agents to
deliver, to Viasoft all copies of such information then in their possession or
control.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Merger Sub will be merged with and into Viasoft at the
Effective Time (as defined in Section 2.3). Following the Effective Time, the
separate corporate existence of Merger Sub will cease and Viasoft will continue
as the surviving corporation (the "Surviving Corporation") and will succeed to
and assume all the
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rights and obligations of Merger Sub in accordance with the DGCL.
Notwithstanding the foregoing, Compuware may elect at any time prior to the
Merger to merge Viasoft with and into Merger Sub instead of merging Merger Sub
into Viasoft as provided above; provided, however, that Viasoft will not be
deemed to have breached any of its representations, warranties, covenants or
agreements set forth in this Agreement solely by reason of such election. In
such event, the parties agree to execute an appropriate amendment to this
Agreement in order to reflect the foregoing and, where appropriate, to provide
that Merger Sub will be the Surviving Corporation and will continue under the
name "Viasoft, Inc." At the election of Compuware, any direct or indirect
Subsidiary (as defined in Section 9.3) of Compuware may be substituted for
Merger Sub as a constituent corporation in the Merger. In such event, the
parties agree to execute an appropriate amendment to this Agreement in order to
reflect the foregoing.
2.2 Closing. The closing of the Merger will take place at 10:00
a.m. on a date to be specified by the parties, which will be no later than the
second business day after satisfaction or waiver of the conditions set forth in
Article VII (the "Closing Date"), at the Detroit, Michigan offices of Xxxxxxxx
Xxxxxx Xxxxxxxx and Xxxx, counsel to Compuware and Merger Sub, unless another
date or place is agreed to in writing by the parties hereto.
2.3 Effective Time. Subject to the provisions of this Agreement,
as soon as practicable on or after the Closing Date, the parties will file a
Certificate of Merger (or Certificate of Ownership and Merger in the case of a
Short-Form Merger (defined below)) with the Delaware Secretary of State. The
Merger will become effective at such time as the Certificate of Merger is duly
filed with the Delaware Secretary of State, or at such other time as Merger Sub
and Viasoft agree should be specified in the Certificate of Merger (the time the
Merger becomes effective being hereinafter referred to as the "Effective Time").
2.4 Effects of the Merger. The Merger will have the effects set
forth in the applicable provisions of the DGCL.
2.5 Certificate of Incorporation and Bylaws. The certificate of
incorporation and bylaws of Merger Sub as in effect at the Effective Time will
be the certificate of incorporation and bylaws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law;
provided that at the Effective Time, the certificate of incorporation of the
Surviving Corporation will be amended to read as follows: "The name of the
corporation is Viasoft, Inc."
2.6 Directors. The directors of Merger Sub immediately prior to
the Effective Time will be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
2.7 Officers. The officers of Merger Sub immediately prior to the
Effective Time will be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
2.8 Merger Without Shareholders Meeting. If Merger Sub (or any
other Subsidiary of Compuware) acquires, and maintains through the effectiveness
of the Merger, ownership of at least
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90% of the outstanding Shares sufficient to enable Merger Sub (or such other
Subsidiary) and Viasoft to cause the Merger to become effective without Viasoft
Shareholder Approval in accordance with Section 253 of the DGCL (the "Short-Form
Merger"), the parties hereto will, subject to the terms and conditions of this
Agreement (including Article VII) and applicable law, take all necessary and
appropriate action to cause the Short-Form Merger to become effective as
promptly as practicable.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any Shares or
any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger Sub. Each issued and
outstanding share of capital stock of Merger Sub will be converted into and
become one fully paid and nonassessable share of Common Stock, no par value, of
the Surviving Corporation.
(b) Cancellation of Treasury Stock and Compuware Owned
Stock. Each Share that is owned by Viasoft or by any subsidiary of Viasoft and
each Share that is owned by Compuware, Merger Sub or any other Subsidiary of
Compuware will automatically be cancelled and will cease to exist, and no
consideration will be delivered in exchange therefor.
(c) Conversion of Viasoft Common Stock. Subject to
Section 3.1(d), each issued and outstanding Share (other than Shares to be
cancelled in accordance with Section 3.1(b)) will be converted into the right to
receive from the Surviving Corporation in cash, without interest, the Offer
Price (the "Merger Consideration"). As of the Effective Time, all such Shares
will no longer be outstanding and will automatically be cancelled and will cease
to exist, and each holder of a certificate representing any such Shares will
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration, without interest.
(d) Shares of Dissenting Shareholders. Notwithstanding
anything in this Agreement to the contrary, to the extent provided by the DGCL,
any issued and outstanding Shares held by a person (a "Dissenting Shareholder")
who elects to demand appraisal of his shares and complies with all the
provisions of the DGCL concerning the right of holders of Viasoft Common Stock
to require appraisal of their Shares ("Dissenting Shares") will not be converted
as described in Section 3.1(c) but will become the right to receive such
consideration as may be determined to be due to such Dissenting Shareholder
pursuant to the laws of the State of Delaware. If, after the Effective Time,
such Dissenting Shareholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal, in any case pursuant to the
DGCL, his Shares will be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. Viasoft will give Compuware (i)
prompt notice of any demands for appraisal of Shares received by Viasoft and
(ii) the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. Viasoft will not, without the
prior written consent of Compuware, make any payment
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with respect to, or enter into a binding settlement agreement or make a written
offer to settle, any such demands.
(e) Rights to Receive Shares. Each right to receive
Shares, other than pursuant to (i) the Rights, (ii) the terms of securities
convertible into or exercisable for Shares which provide otherwise, or (iii) as
otherwise provided in this Agreement, will be converted into the right to
receive from the Surviving Corporation in cash, without interest, the Merger
Consideration.
3.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Compuware
will select a bank or trust company to act as paying agent (the "Paying Agent")
for the payment of the Merger Consideration upon surrender of certificates
representing Viasoft Common Stock.
(b) Compuware To Provide Funds. Compuware will take all
steps necessary to enable and cause the Surviving Corporation to provide to the
Paying Agent on a timely basis, as and when needed after the Effective Time,
funds necessary to pay for the Shares as part of the Merger pursuant to Section
3.1.
(c) Exchange Procedure. As soon as reasonably practicable
after the Effective Time, the Paying Agent will mail to each holder of record of
a certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates") whose Shares were converted
into the right to receive the Merger Consideration pursuant to Section 3.1: (i)
a letter of transmittal (which will specify that delivery will be effected, and
risk of loss and title to the Certificates will pass, only upon delivery of the
Certificates to the Paying Agent and will be in a form and have such other
provisions as Compuware may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Compuware,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate will be entitled to receive in exchange therefor the Merger
Consideration, and the Certificate so surrendered will forthwith be cancelled.
In the event of a transfer of ownership of Viasoft Common Stock which is not
registered in the transfer records of Viasoft, payment may be made to a person
other than the person in whose name the Certificate so surrendered is
registered, if such Certificate is properly endorsed or otherwise in proper form
for transfer and the person requesting such payment pays any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 3.2, each Certificate will be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration. No interest will be paid or will accrue on
the cash payable upon the surrender of any Certificate.
(d) No Further Ownership Rights in Viasoft Common Stock.
All cash paid upon the surrender of Certificates in accordance with the terms of
this Article III will be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares previously represented by such
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Certificates, and there will be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Paying
Agent for any reason, they will be cancelled and exchanged as provided in this
Article III.
(e) Failure to Timely Surrender; No Liability. Promptly
following the date that is six months after the Effective Time, the Paying Agent
will return to the Surviving Corporation all Merger Consideration and other
cash, property and instruments in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties will terminate.
Thereafter, each holder of a Certificate formerly representing a Share may
surrender such Certificate to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws) receive in exchange
therefor the Merger Consideration (without interest thereon). Notwithstanding
the foregoing, the Surviving Corporation will be entitled to receive from time
to time all interest or other amounts earned with respect to any cash deposited
with the Paying Agent as such amounts accrue or become available. If any
Certificates will not have been surrendered prior to 2 years after the Effective
Time (or immediately prior to such earlier date on which any payment pursuant to
this Article III would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.1(d)), the cash payment in respect
of such Certificate will, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any person previously entitled thereto. To the fullest extent permitted by
law, none of Compuware, Merger Sub, Viasoft or the Paying Agent will be liable
to any person in respect of any cash delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(f) Withholding Taxes. The right of any person to receive
any payment or consideration pursuant to this Agreement and the transactions
contemplated herein will be subject to any applicable requirements with respect
to the withholding of Taxes.
(g) Lost, Stolen or Destroyed Certificates. If any
certificates evidencing Shares have been lost, stolen or destroyed, the Paying
Agent will pay to such holder the Merger Consideration required pursuant to
Section 3.1, in exchange for such lost, stolen or destroyed certificates, upon
the making of an affidavit of that fact by the holder thereof with such
assurances as the Paying Agent, in its discretion and as a condition precedent
to the payment of the Merger Consideration, may reasonably require of the holder
of such lost, stolen or destroyed certificates.
(h) Supplementary Action. If at any time after the
Effective Time, any further assignments or assurances in law or any other things
are necessary or desirable to vest or to perfect or confirm of record in the
Surviving Corporation the title to any property or rights of either Viasoft or
Merger Sub, or otherwise to carry out the provisions of this Agreement, the
officers and directors of the Surviving Corporation are hereby authorized and
empowered, in the name of and on behalf of Viasoft and Merger Sub, to execute
and deliver any and all things necessary or proper to vest or to perfect or
confirm title to such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Viasoft. Except as set forth
in the disclosure letter delivered by Viasoft to Compuware concurrently with the
execution of this Agreement (the "Viasoft Disclosure Letter"), Viasoft
represents and warrants to Compuware and Merger Sub as follows:
(a) Organization, Standing and Corporate Power. Viasoft
and each of its subsidiaries is a corporation or partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has the requisite corporate or partnership power and
authority to carry on its business as now being conducted. Viasoft and each of
its subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed individually or in the aggregate would not have a Material Adverse
Effect on Viasoft. Viasoft has made available to Compuware complete and correct
copies of its certificate of incorporation and bylaws and the articles of
incorporation and bylaws or other organizational documents of its subsidiaries,
in each case as amended to the date of this Agreement.
(b) Subsidiaries. Section 4.1(b) of the Viasoft
Disclosure Letter lists each subsidiary of Viasoft. Except as set forth in
Section 4.1(b) of the Viasoft Disclosure Letter, all the outstanding shares of
capital stock of each such subsidiary have been validly issued and are fully
paid and nonassessable and (except as may be required by foreign jurisdictions)
are owned by Viasoft, by another subsidiary of Viasoft or by Viasoft and another
such subsidiary, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever, other than
resale restrictions imposed by applicable securities laws (collectively,
"Liens"). Except for the capital stock of its subsidiaries, Viasoft does not
own, directly or indirectly, any capital stock or other ownership interest in
any corporation, partnership, joint venture or other entity.
(c) Capital Structure. The authorized capital stock of
Viasoft consists of 48,000,000 shares of Viasoft Common Stock and 2,000,000
shares of preferred stock, $0.001 par value ("Viasoft Preferred Stock"). At the
close of business on July 12, 1999, (i) 17,906,636 shares of Viasoft Common
Stock and no shares of Viasoft Preferred Stock were issued and outstanding, (ii)
1,549,497 shares of Viasoft Common Stock were held by Viasoft in its treasury,
(iii) 3,338,681 shares of Viasoft Common Stock were reserved for issuance upon
exercise of outstanding Options (as defined in Section 6.4). Except as set forth
in Section 4.1(c)(i) of the Viasoft Disclosure Letter, the only plans or
arrangements pursuant to which Viasoft is obligated to issue Shares or pursuant
to which Options are outstanding are Viasoft's 1986 Stock Option Plan, the 1994
Equity Incentive Plan, the 1997 Equity Incentive Plan, the Outside Director
Stock Plan and the resolutions of the Board of Directors of Viasoft referenced
in Section 4.1(c)(i) of the Viasoft Disclosure Letter, each as amended,
(together, the "Viasoft Option Plans"), and Viasoft's Employee Stock Purchase
Plan (the "Stock Purchase Plan"). Except as set forth above, at the close of
business on July 12, 1999, no shares of capital stock or other voting securities
of Viasoft were issued, reserved for issuance or outstanding. There are no
outstanding stock appreciation rights. All outstanding shares of capital stock
of Viasoft are duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights
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13
created by Viasoft's certificate of incorporation, bylaws or any agreement to
which Viasoft is a party. Except as set forth in Section 4.1(c)(ii) of the
Viasoft Disclosure Letter, there are no bonds, debentures, notes or other
indebtedness of Viasoft having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
shareholders of Viasoft may vote. Except as set forth above or in Section
4.1(c)(iii) of the Viasoft Disclosure Letter, as of the date of this Agreement,
there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Viasoft or any of its subsidiaries is a party or by which any of them is bound
obligating Viasoft or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of Viasoft or of any of its subsidiaries or obligating
Viasoft or any of its subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. As of the date of this Agreement, there are no outstanding
contractual obligations (i) of Viasoft or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of Viasoft or any of its
subsidiaries or (ii) of Viasoft to vote or to dispose of any shares of the
capital stock of any of its subsidiaries.
(d) Authority; Noncontravention. Viasoft has all the
requisite corporate power and authority to enter into this Agreement and,
subject to, if required by law, adoption and approval of the Merger Agreement
and approval of the Merger by an affirmative vote of the holders of a majority
of the outstanding shares of Viasoft Common Stock (the "Viasoft Shareholder
Approval"), to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Viasoft and the consummation by
Viasoft of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of Viasoft, subject to
Viasoft Shareholder Approval, if such approval is required by law. This
Agreement has been duly executed and delivered by Viasoft and constitutes a
valid and binding obligation of Viasoft, enforceable against Viasoft in
accordance with its terms (except as enforcement hereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium and similar laws, both state
and federal, affecting the enforcement of creditors' rights or remedies in
general as from time to time in effect or (ii) the exercise by courts of equity
powers). The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or the loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Viasoft or any of
its subsidiaries under (i) the certificate of incorporation or bylaws of Viasoft
or the comparable charter or organizational documents of any of its
subsidiaries, (ii) except as set forth in Section 4.1(d) of the Viasoft
Disclosure Letter (including change of control or acceleration rights under
Viasoft Option Plans or other agreements disclosed therein), any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Viasoft or
any of its subsidiaries or their respective properties or assets or (iii) any
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Viasoft or any of its subsidiaries or their respective properties
or assets, other than, in the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights or Liens that individually or in the aggregate
would not (x) have a Material Adverse Effect on Viasoft, (y) materially impair
the ability of Viasoft to perform its obligations under this Agreement or (z)
prevent the consummation of
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any of the transactions contemplated by this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state or local government or any court, administrative or regulatory
agency or commission or other governmental authority or agency, domestic or
foreign (a "Governmental Entity"), is required by or with respect to Viasoft or
any of its subsidiaries in connection with the execution and delivery of this
Agreement by Viasoft or the consummation by Viasoft of the transactions
contemplated by this Agreement, except for (1) the filing of a pre-merger
notification and report form by Viasoft under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), (2) the filing with the SEC and the
National Association of Securities Dealers, Inc. of (A) the Schedule 14D-9 and
related Information Statement, (B) a proxy statement relating to Viasoft
Shareholder Approval, if such approval is required by law (as amended or
supplemented from time to time, the "Proxy Statement"), and (C) such reports
under Section 13(a) of the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated by this Agreement, (3) the
filing of the Certificate of Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in which
Viasoft is qualified to do business, (4) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as would not
individually or in the aggregate (A) have a Material Adverse Effect on Viasoft,
(B) materially impair the ability of Viasoft to perform its obligations under
this Agreement or (C) prevent or have a material adverse effect on the ability
of the parties to consummate any of the transactions contemplated by this
Agreement and (5) any of the foregoing disclosed pursuant to the following
sentence. Section 4.1(d) of the Viasoft Disclosure Letter lists all consents,
waivers and approvals under any of Viasoft's or any of its subsidiaries'
agreements, contracts, licenses or leases required to be obtained in connection
with the consummation of the transactions contemplated hereby, which if,
individually or in the aggregate, were not obtained, would result in a Material
Adverse Effect on Viasoft.
(e) SEC Documents; Financial Statements. Viasoft has
filed in a timely manner all required reports, schedules, forms, statements and
other documents with the SEC since December 31, 1996. All such required reports,
schedules, forms, statements and other documents filed by Viasoft with the SEC
(including those that Viasoft may file subsequent to the date hereof) are
referred to herein as the "SEC Documents". As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except to the extent that information contained in any SEC
Document has been revised or superseded by a later Filed SEC Document (as
defined in Section 4.1(g)), none of the SEC Documents contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Viasoft included in the SEC Documents, including those filed after
the date hereof until the Closing, comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes
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thereto) and fairly present in all material respects the consolidated financial
position of Viasoft and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). Except as set forth in the SEC Documents or in Section
4.1(e) of the Viasoft Disclosure Letter or as contemplated by this Agreement,
since the date of the most recent consolidated balance sheet included in the SEC
Documents neither Viasoft nor any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles, consistently applied
("GAAP"), to be set forth on a consolidated balance sheet of Viasoft and its
consolidated subsidiaries or in the related notes to the consolidated financial
statements prepared in accordance with GAAP which are, individually or in the
aggregate, material to the business, results of operations or financial
condition of Viasoft and its subsidiaries taken as a whole, except liabilities
(i) provided for in the most recent consolidated balance sheet included in the
SEC Documents or (ii) incurred since the date of such balance sheet in the
ordinary course of business consistent with past practices.
(f) Information Supplied. None of the information
supplied or to be supplied by Viasoft specifically for inclusion or
incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9,
(iii) the information to be filed by Viasoft in connection with the Offer
pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information
Statement") or (iv) the Proxy Statement, will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to Viasoft's shareholders,
or, in the case of the Proxy Statement, at the time the Proxy Statement is first
mailed to Viasoft's shareholders or at the time of the Shareholders Meeting (as
defined in Section 6.1(a)), contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-9, the Information Statement and
the Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by Viasoft with respect to
statements made or incorporated by reference therein based on information
supplied by Compuware or Merger Sub specifically for inclusion or incorporation
by reference therein.
(g) Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed SEC Documents") or in Section 4.1(g) of the Viasoft
Disclosure Letter, since the date of the most recently audited financial
statements included in the Filed SEC Documents, Viasoft has conducted its
business only in the ordinary course, and there has not been (i) any Material
Adverse Change affecting Viasoft, (ii) any declaration, setting aside or payment
of any dividend or other distribution (whether in cash, stock or property) with
respect to any of Viasoft's capital stock, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iv)(x) any granting by Viasoft or
any of its subsidiaries to any executive officer of Viasoft or any of its
subsidiaries of any increase in excess of $10,000 per annum in compensation,
except in the ordinary course of business consistent with prior practice or as
was required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed SEC Documents, (y) any
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granting by Viasoft or any of its subsidiaries to any executive officer of any
increase in excess of $10,000 per annum in severance or termination pay, except
as was required under any employment, severance or termination agreements in
effect as of the date of the most recent audited financial statements included
in the Filed SEC Documents, or (z) except as set forth in Section 4.1(g)(iv) of
the Viasoft Disclosure Letter, any entry by Viasoft or any of its subsidiaries
into any employment, severance or termination agreement with any executive
officer, (v) any damage, destruction or loss, whether or not covered by
insurance, that has or could reasonably be expected to have a Material Adverse
Effect on Viasoft, (vi) any change in accounting methods, principles or
practices by Viasoft materially affecting its assets, liabilities or business,
except insofar as may have been required by a change in GAAP and SEC rules and
regulations, (vii) any material revaluation of any of Viasoft's assets,
including, without limitation, writing down the value of capitalized inventory
or writing off accounts receivable, other than in the ordinary course consistent
with past practice, or (viii) any executive officer or other key employee who
has terminated such person's employment with Viasoft, or threatened to do so,
nor has Viasoft been informed that any such person plans to do so, because of
the pendency of the Offer or Merger.
(h) Intellectual Property.
(i) Viasoft and its subsidiaries own, or are licensed
or otherwise possess legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
maskworks, net lists, schematics, technology, know-how, trade secrets,
inventory, ideas, algorithms, processes, computer software programs or
applications (in both source code and object code form), and tangible or
intangible proprietary information or material ("Intellectual Property") that
are material to the business of Viasoft and its subsidiaries as currently
conducted by Viasoft and its subsidiaries.
(ii) Section 4.1(h)(ii) of the Viasoft Disclosure
Letter lists (x) all patents and patent applications and all registered and
unregistered trademarks, trade names and service marks, registered copyrights,
which Viasoft considers to be material to its business and included in the
Intellectual Property, including the jurisdictions in which each such
Intellectual Property right has been issued or registered or in which any
application for such issuance and registration has been filed, (y) all material
licenses, sublicenses, and other agreements as to which Viasoft is a party and
pursuant to which any person other than Viasoft is authorized to use any
Intellectual Property (other than end-user licenses in Viasoft's current
standard form provided to Compuware's counsel), and (z) all material licenses,
sublicenses and other agreements as to which Viasoft is a party and pursuant to
which Viasoft is authorized to use any third party patents, trademarks or
copyrights, including software ("Third Party Intellectual Property Rights")
which are incorporated in, are, or form a part of any Viasoft product that is
material to its business.
(iii) To Viasoft's knowledge, there is no material
unauthorized use, disclosure, infringement or misappropriation of any
Intellectual Property rights of Viasoft or any of its subsidiaries, any trade
secret material to Viasoft or any of its subsidiaries, or any Intellectual
Property right of any third party to the extent licensed by or through Viasoft
or any of its subsidiaries, by any third party, including any employee or former
employee of Viasoft or any of its subsidiaries. To Viasoft's knowledge, no
Viasoft Intellectual Property or product or service of Viasoft is subject to
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17
any proceeding or outstanding decree, order, judgment, agreement, or stipulation
restricting in any manner the use, transfer, or licensing thereof by Viasoft, or
which may affect the validity, use or enforceability of such Viasoft
Intellectual Property. Neither Viasoft nor any of its subsidiaries has entered
into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property, other than indemnification provisions
contained in licenses, purchase, service or work orders with customers,
distribution and reseller agreements, or other agreements arising in the
ordinary course of business.
(iv) Viasoft is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in material breach of any license, sublicense or other
agreement relating to Viasoft Intellectual Property or Third Party Intellectual
Property Rights, Viasoft's service offerings or its ability to exploit its
products which could reasonably be expected to result in a material loss or
liability to Viasoft.
(v) No suit, action or proceeding involving Viasoft
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right,
or breach of any license or agreement involving Intellectual Property is
currently pending or, to the knowledge of Viasoft, is threatened, nor, to the
knowledge of Viasoft, is there any reasonable basis therefor. The manufacture,
marketing, licensing or sale of Viasoft's products and the provision of
Viasoft's services does not, to Viasoft's knowledge after due inquiry of each of
Viasoft's executive officers, directors and officers in charge of Viasoft's
corporate functions, infringe any patent, trademark, service xxxx, copyright,
trade secret or other proprietary right of any third party.
(vi) Viasoft has not received notice from any third
party that the operation of the business of Viasoft or any act, product or
service of Viasoft, infringes or misappropriates any Third Party Intellectual
Property Rights or constitutes unfair competition or trade practices under the
laws of any jurisdiction.
(vii) Except as set forth in Section 4.1(h)(vii) of the
Viasoft Disclosure Letter, to the knowledge of Viasoft, no Person has previously
infringed or misappropriated or is infringing or misappropriating any
Intellectual Property material to Viasoft.
(viii) Except as set forth in Section 4.1(h)(viii) of the
Viasoft Disclosure Letter, all current and former employees and consultants of
Viasoft have signed a confidentiality/nondisclosure agreement in the forms
attached to the Viasoft Disclosure Letter. All current and former employees and
consultants of Viasoft involved in product development work have signed an
invention assignment agreement in the form attached to the Viasoft Disclosure
Letter. To Viasoft's knowledge, no such current or former employees or
consultants of Viasoft have violated any such agreement or otherwise
misappropriated any trade secrets of Viasoft or of any third party. Viasoft does
not believe it is or will be necessary to utilize any inventions, trade secrets
or proprietary information of any of its employees made prior to their
employment by Viasoft, except for inventions, trade secrets or proprietary
information that have been assigned to Viasoft.
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(ix) Viasoft has taken all reasonable and appropriate
steps to protect and preserve the confidentiality of all Intellectual Property
not otherwise protected by patents, or patent applications or copyright
("Confidential Information"). All use, disclosure or appropriation of
Confidential Information owned by Viasoft by or to a third party has been
pursuant to the terms of a written agreement between Viasoft and such third
party. All use, disclosure or appropriation by Viasoft of Confidential
Information not owned by Viasoft has been pursuant to the terms of a written
agreement between Viasoft and the owner of such Confidential Information, or is
otherwise lawful.
(x) Except as set forth in Section 4.1(h)(x) of the
Viasoft Disclosure Letter, Viasoft's operating codes, programs, utilities,
development tools and other software, as well as all hardware and systems,
utilized by Viasoft or any of its subsidiaries internally or to develop products
or to provide services to customers, as well as all products of Viasoft or any
of its subsidiaries sold to customers (collectively, "Systems") will not, as a
result of processing data containing dates in the year 2000 and any preceding or
following years, fail (except where a failure could not reasonably be expected
to result in a material loss or liability to Viasoft) to initiate or operate, or
to correctly store, represent and process all dates or abnormally terminate such
processing; provided that any date data input from external sources is in a four
digit year format or is specified by unambiguous algorithms or interfacing
rules. Except as set forth in Section 4.1(h)(x) of the Viasoft Disclosure
Letter, Viasoft's Systems operate and will operate substantially in accordance
with their specifications prior to, during and after the calendar year 2000 or
any leap years, except where a failure to so operate could not reasonably be
expected to result in a material loss or liability to Viasoft. Since January 1,
1998, Viasoft has not given, and none of its subsidiaries has given to customers
any written representations or warranties or indemnities with respect to year
2000 compliance or conformity, except (A) where Viasoft's liability is limited
to amounts paid to Viasoft or to repairing or replacing the Product pursuant to
the contract in which such representation, warranty or indemnity appears and
lost profits and consequential damages are expressly excluded, (B) pursuant to
Viasoft's standard form warranties attached as Exhibit 4.1(h)(x) to the Viasoft
Disclosure Letter, (C) as disclosed in Section 4.1(h)(x) of the Viasoft
Disclosure Letter, or (D) where the breach of such representations and
warranties or where such indemnities could not reasonably be expected to result
in a material loss or liability to Viasoft.
(i) Litigation. Except as disclosed in the Filed SEC Documents
or in Section 4.1(i) of the Viasoft Disclosure Letter, as of the date of this
Agreement, there is no suit, action or proceeding pending or, to the knowledge
of Viasoft, threatened against Viasoft or any of its subsidiaries, nor, to the
knowledge of Viasoft, is their any reasonable basis therefor, that individually
or in the aggregate could reasonably be expected to (i) have a Material Adverse
Effect on Viasoft, (ii) challenge or seek to enjoin or seek damages with respect
to Viasoft's entering into and performing this Agreement or that impair the
ability of Viasoft to perform its obligations under this Agreement or (iii)
prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Viasoft or any of its
subsidiaries having, or which is reasonably likely to have, any effect referred
to in the foregoing clauses (i), (ii) or (iii) above.
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(j) Absence of Changes in Benefit Plans. Except as disclosed
in the Filed SEC Documents or Section 4.1(j) of the Viasoft Disclosure Letter,
since the date of the most recent audited financial statements included in the
Filed SEC Documents, there has not been any adoption or amendment in any
material respect by Viasoft or any of its subsidiaries of any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of Viasoft or any of its subsidiaries. Except as
disclosed in the Filed SEC Documents or Section 4.1(j) of the Viasoft Disclosure
Letter, there exist no employment, consulting, severance, termination or
indemnification agreements, arrangements or understandings between Viasoft or
any of its subsidiaries and any current or former employee, officer or director
of Viasoft or any of its subsidiaries as to which there is or could be aggregate
liability on the part of Viasoft or any of its subsidiaries in excess of
$100,000.
(k) ERISA Compliance.
(i) Viasoft is in compliance in all material respects with all
applicable laws, agreements and contracts relating to employment, employment
practices, wages, hours, and terms and conditions of employment, including, but
not limited to, employee compensation matters. Except as set forth in Section
4.1(k) of the Viasoft Disclosure Letter, Viasoft does not have any employment
contracts or consulting agreements currently in effect that are not terminable
at will (other than agreements with the sole purpose of providing for the
confidentiality of proprietary information or assignment of inventions).
(ii) Viasoft (w) has never been and is not now subject to a
union organizing effort, (x) is not subject to any collective bargaining
agreement with respect to any of its employees, (y) is not subject to any other
contract, written or oral, with any trade or labor union, employees' association
or similar organization and (z) does not have any current labor disputes.
Viasoft has good labor relations, has not been informed of any facts indicating
that the consummation of the transactions contemplated hereby will have a
material adverse effect on such labor relations, and has not been informed that
any of its key employees intends to leave its employ.
(iii) Neither Viasoft nor any trade or business (a "Viasoft
Affiliate") which is under common control with Viasoft within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended (the "Revenue
Code") has a pension plan which is subject to Section 412 of the Revenue Code or
subject to Title IV of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or maintains a "multiemployer plan" as defined in Section
3(37) of ERISA. Viasoft has made available to Compuware a true and complete copy
of, to the extent applicable, (i) such Viasoft Employee Plan, (ii) except as set
forth in Section 4.1(k)(iii) of the Viasoft Disclosure Letter, the most recent
annual report (Form 5500), (iii) each trust agreement related to such Viasoft
Employee Plan, (iv) the most recent summary plan description for each Viasoft
Employee Plan for which such a description is required and (v) the most recent
United States Internal Revenue Service ("IRS") determination letter issued with
respect to any Viasoft Employee Plan.
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(iv) Each employment, severance or other similar contract,
arrangement or policy, each "employee benefit plan" as defined in Section 3(3)
of ERISA and each plan or arrangement (written or oral) providing for insurance
coverage (including any self-insured arrangements), workers' benefits, vacation
benefits, severance benefits, disability benefits, death benefits,
hospitalization benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits for employees, consultants or directors
which is entered into, maintained or contributed to by Viasoft or any Viasoft
Affiliate and covers any employee or former employee of Viasoft or any Viasoft
Affiliate (collectively referred to as "Viasoft Employee Plans") has been
maintained in compliance in all material respects with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
that are applicable to such Viasoft Employee Plan. Except as set forth in
Section 4.1(k)(iv) of the Viasoft Disclosure Letter, all contributions to any
Viasoft Employee Plan for all periods prior to the Effective Time have been
timely made or are accrued on Viasoft's financial statements.
(v) There has been no amendment to, written interpretation or
announcement (whether or not written) by Viasoft relating to, or change in
employee participation or coverage under, any Viasoft Employee Plan that would
increase materially the expense of maintaining such Viasoft Employee Plan above
the level of the expense incurred in respect thereof for Viasoft's fiscal year
ended June 30, 1999.
(vi) All Viasoft Employee Plans, to the extent applicable, are
in compliance, in all material respects, with (x) the continuation coverage
requirements of Section 4980B of the Revenue Code and Sections 601 through 608
of ERISA, (y) the Americans with Disabilities Act of 1990, as amended, and (z)
the Family Medical and Leave Act of 1993, as amended, and the regulations
thereunder.
(vii) No benefit payable or which may become payable by Viasoft
or any of its subsidiaries pursuant to any Viasoft Employee Plan or as a result
of or arising under this Agreement or the Agreement of Merger will constitute an
"excess parachute payment" (as defined in Section 280G(b)(1) of the Revenue
Code) which is subject to the imposition of an excise Tax under Section 4999 of
the Revenue Code or which would not be deductible by reason of Section 280G of
the Revenue Code. Except as set forth in Section 4.1(k)(vii) of the Viasoft
Disclosure Letter, neither Viasoft nor its subsidiaries is a party to any: (x)
agreement (other than as described in (y) below) with any executive officer or
other key employee thereof (A) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving Viasoft or its subsidiaries in the nature of any of the transactions
contemplated by this Agreement or the consummation of the transactions
contemplated hereby, (B) providing any term of employment or compensation
guarantee, or (C) providing severance benefits or other benefits after the
termination of employment of such employee regardless of the reason for such
termination of employment, or (y) agreement or plan, including, without
limitation, any stock option plan, stock appreciation rights plan or stock
purchase plan, any of the benefits of which will be materially increased, or the
vesting of benefits of which will be materially accelerated, by the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
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(viii) Viasoft has made available to Compuware a list of the names
of all employees of Viasoft and of any of its subsidiaries and their salaries as
of the most recent practicable date.
(l) Taxes.
(i) Except as set forth in Section 4.1(l) of the Viasoft
Disclosure Letter, Viasoft and each of its subsidiaries has duly filed on a
timely basis all material Tax Returns required to be filed by it. All such
Returns are true, complete and correct in all material respects. Neither Viasoft
nor any of its subsidiaries has been delinquent in the payment of any material
Tax nor is there any material Tax deficiency outstanding, proposed or assessed
against Viasoft or any of its subsidiaries, nor has Viasoft or any of its
subsidiaries executed any unexpired waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax. Neither
Viasoft nor any of its subsidiaries has any liability for any material unpaid
Taxes which has not been accrued for or reserved on the balance sheet of Viasoft
contained in the most recent financial statements contained in the Filed SEC
Documents (the "Viasoft Balance Sheet") in accordance with GAAP, whether
asserted or unasserted, contingent or otherwise, which is material to Viasoft,
other than any liability for unpaid Taxes that may have accrued since the date
of the Viasoft Balance Sheet in connection with the operation of the business of
Viasoft and its subsidiaries in the ordinary course. The most recent financial
statements contained in the Filed SEC Documents properly reflect in accordance
with GAAP all Taxes payable by or properly accruable by Viasoft and its
subsidiaries for all taxable periods and portions thereof through the date of
such financial statements.
(ii) Except as set forth in Section 4.1(l) of the Viasoft
Disclosure Letter, no deficiencies for any Taxes have been proposed, asserted or
assessed against Viasoft or any of its subsidiaries that are not properly
reflected in accordance with GAAP in the most recent financial statements
contained in the Filed SEC Documents, and no requests for waivers of the time to
assess any such Taxes are pending. Viasoft and/or any of its subsidiaries have
not agreed with any Tax authority to extend the time to assess any Taxes beyond
the date of this Agreement. Except as set forth in Section 4.1(l)(ii) of the
Viasoft Disclosure Letter, none of the Returns of Viasoft and each of its
subsidiaries have been examined by the Internal Revenue Service or any other
taxing authority during the 5 year period ending on the Closing Date which has
resulted or may result in a liability in excess of $25,000 per Return or in
excess of $1,000,000 for all Returns. None of Viasoft and its subsidiaries has
entered into any closing agreement with respect to any taxable year. Except as
set forth in Section 4.1(l)(ii) of the Viasoft Disclosure Letter, none of
Viasoft and its subsidiaries is a party to any audit, dispute, claim, action or
proceeding relating to, or for the assessment or collection of, Taxes, nor has
such event been asserted or threatened in writing against Viasoft or any of its
subsidiaries or any of their assets that involves a liability or potential
liability in excess of $25,000 per Return or in excess of $1,000,000 for all
Returns. Viasoft and each of its subsidiaries has disclosed on their federal
income tax returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Revenue Code Section
6662. Neither Viasoft nor any of its subsidiaries is (nor has ever been) a party
to any Tax sharing agreement with any party other than Viasoft or its
subsidiaries. There are no Liens or security interests on any of the assets of
Viasoft or its subsidiaries that arose in connection with any failure (or
alleged failure) to pay Taxes.
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(iii) Except as set forth in Schedule 4.1(l) of the Viasoft
Disclosure Letter, neither Viasoft nor any subsidiary is a party to any safe
harbor lease within the meaning of Section 168(f)(8) of the Revenue Code, as in
effect prior to amendment by the Tax Equity and Fiscal Responsibility Act of
1982. Viasoft is not and has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Revenue Code during
the applicable period specified in Section 897(c)(l)(A)(ii) of the Revenue Code.
Neither Viasoft nor any subsidiary has participated in an international boycott
as defined in Revenue Code Section 999. Neither Viasoft nor any subsidiary is a
member of, a partner in, or otherwise owns an interest in a partnership, limited
liability or other "pass through" entity. Neither Viasoft nor any subsidiary has
agreed, nor is it required to make, any adjustment under Revenue Code Section
481(a) by reason of a change in accounting method or otherwise. Neither Viasoft
nor any of its subsidiaries owns any interest in any controlled foreign
corporation (as defined in Section 957 of the Revenue Code), passive foreign
investment company (as defined in Section 1296 of the Revenue Code) or other
entity, the income of which is required to be included in the income of Viasoft
or any of its subsidiaries. Neither Viasoft nor any of its subsidiaries has been
a "distributing" or "controlled" corporation as defined in Section 355 of the
Revenue Code in a transaction intended to qualify under Section 355 and Section
368(a)(1)(D) of the Revenue Code within the two years immediately prior to the
signing of this Agreement. Neither Viasoft nor any subsidiary has liability for
the Taxes in excess of $100,000 of any person for any taxable period beginning
or ending during the 5 year period ending on the Closing Date under Treasury
Regulation ss.1.1502-6 (or any similar provision of state, local or foreign law)
as a transferee or successor, by contract or otherwise. Neither Viasoft nor any
subsidiary has granted a power of attorney with respect to any matter relating
to Taxes, except with respect to matters for which both (i) the identity of the
attorney or representative appointed, and a description of the Tax matter
covered, by the power of attorney is set forth in Section 4.1(l)(iii) of the
Viasoft Disclosure Letter, and (ii) a copy of the power of attorney is provided
to Compuware.
(iv) Neither Viasoft nor any of its subsidiaries has filed
any consent agreement under Section 341(f) of the Revenue Code or agreed to have
Section 341(f)(2) of the Revenue Code apply to any disposition of a subsection
(f) asset (as defined in Section 341(f)(4) of the Revenue Code) owned by Viasoft
or any of its subsidiaries.
(v) Schedule 4.1(l) sets forth all material Tax elections
for Viasoft and each of its subsidiaries. Except as set forth on Schedule
4.1(l), Viasoft and/or each of its subsidiaries does not have a net operating
loss or other tax attributes presently subject to limitation under Code
ss.ss.382, 383, or 384 or the underlying Treasury Regulations.
(vi) As used in this Agreement, "Tax" or "Taxes" will mean
all taxes, however, denominated, including any interest, penalties or other
additions to tax that may become payable in respect thereof, imposed by any
federal, territorial, state, local or foreign government or any agency or
political subdivision of any such government, which taxes will include, without
limiting the generality of the foregoing, all income or profits taxes
(including, but not limited to, federal income taxes and state income taxes),
payroll and employee withholding taxes, unemployment insurance, social security
taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes,
gross receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer taxes,
workers' compensation, Pension Benefit Guaranty
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Corporation premiums and other governmental charges, and other obligations of
the same or of a similar nature to any of the foregoing, which Viasoft or any of
its subsidiaries is required to pay, withhold or collect. As used in this
Agreement, "Returns" will mean all reports, estimates, declarations of estimated
tax, information statements and returns relating to, or required to be filed in
connection with, any Taxes, including information returns or reports with
respect to withholding and other payments to third parties.
(m) No Excess Parachute Payments. Any amount that could be
received (whether in cash or property or the vesting of property) as a result of
any of the transactions contemplated by this Agreement by any employee, officer
or director of Viasoft or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any employment, severance or termination agreement, other
compensation arrangement or benefit plan currently in effect would not be
characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Revenue Code). There is no agreement, contract or
arrangement to which Viasoft or any of its subsidiaries is a party that may
result in the payment of any amount that would not be deductible pursuant to
Sections 280G, 162 or 404 of the Revenue Code.
(n) Compliance with Applicable Laws.
(i) Viasoft and each of its subsidiaries has in effect
all federal, state, local and foreign governmental approvals, authorizations,
certificates, filings, franchises, licenses, notices, permits and rights
("Permits") necessary for it to own, lease or operate its properties and assets
and to carry on its business as now conducted, and there has occurred no default
under any such Permit, except for the lack of Permits and for defaults under
Permits which individually or in the aggregate would not have a Material Adverse
Effect on Viasoft. Except as disclosed in Section 4.1(n) of the Viasoft
Disclosure Letter, Viasoft and its subsidiaries are in compliance with all
applicable statutes, laws, ordinances, rules, orders and regulations of any
Governmental Entity, except for noncompliance which individually or in the
aggregate would not have a Material Adverse Effect on Viasoft.
(ii) Viasoft and its subsidiaries are, and have been, and
each of Viasoft's former subsidiaries, while subsidiaries of Viasoft, was in
compliance with all applicable Environmental Laws except for noncompliance which
individually or in the aggregate would not have a Material Adverse Effect on
Viasoft. The term "Environmental Laws" means any federal, state or local
statute, code, ordinance, rule, regulation, policy, guideline, permit, consent,
approval, license, judgment, order, writ, decree, directive, injunction or other
authorization, including the requirement to register underground storage tanks,
relating to: (x) Releases or threatened Releases of Hazardous Material into the
environment, including into ambient air, soil, sediments, land surface or
subsurface, buildings or facilities, surface water, ground water, publicly-owned
treatment works, septic systems or land; or (y) the generation, treatment,
storage, disposal, use, handling, manufacturing, transportation or shipment of
Hazardous Material.
(iii) During the period of ownership or operation by
Viasoft and its subsidiaries of any of their respective current or previously
owned or leased properties, there have been no Releases of Hazardous Material by
Viasoft or its subsidiaries, or, to Viasoft's knowledge, any other party, in
violation of Environmental Laws in, on, under or affecting such properties or,
to
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the knowledge of Viasoft, any surrounding site, and none of Viasoft or its
subsidiaries have disposed of any Hazardous Material or any other substance in a
manner that could reasonably be anticipated to lead to a Release in violation of
Environmental Laws, except in each case for those which individually or in the
aggregate would not have a Material Adverse Effect on Viasoft. Prior to the
period of ownership or operation by Viasoft and its subsidiaries of any of their
respective currently or previously owned or leased properties, to the knowledge
of Viasoft, there were no Releases of Hazardous Material in, on, under or
affecting any such property or any surrounding site. The term "Release" has the
meaning set forth in 42 U.S.C. ss. 9601(22). The term "Hazardous Material" means
(1) hazardous materials, pollutants, contaminants, constituents, medical or
infectious wastes, hazardous wastes and hazardous substances as those terms are
defined in the following statutes and their implementing regulations: the
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., the Comprehensive
Environmental Response, Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act, 42 U.S.C. ss. 9601 et seq., the
Clean Water Act, 33 U.S.C. ss. 1251 et seq., the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq., and the Clean Air Act, 42 U.S.C. ss. 7401 et seq.,
(2) petroleum, including crude oil and any fractions thereof, (3) natural gas,
synthetic gas and any mixtures thereof, (4) asbestos and/or asbestos containing
material, (5) radon and (6) PCBs, or materials or fluids containing PCBs.
(o) State Takeover Statutes; Rights Agreement. No Delaware
takeover statute or similar statute or regulation applies so as to impede, delay
or otherwise adversely affect, the Offer, the Merger, this Agreement, or any of
the transactions contemplated by this Agreement. Other than the Rights Plan
described in Section 4.1(o) of the Viasoft Disclosure Letter, Viasoft is not a
party to, nor affected by, any "rights agreement", "poison pill" or similar
plan, agreement or arrangement (a "Rights Plan") affecting the capitalization
of, or issuance of capital stock by, Viasoft, which would be triggered by the
Offer, the Merger, this Agreement or any other transaction contemplated hereby.
(p) Brokers; Schedule of Fees and Expenses. Except as set
forth in Section 4.1(p) of the Viasoft Disclosure Letter, no broker, investment
banker, financial advisor or other person, other than Broadview International
LLC, the fees and expenses of which will be paid by Viasoft (and a copy of whose
engagement letter has been provided to Compuware), is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission, nor to any fee
that is contingent on closing of the transactions contemplated hereby or that is
based on a percentage of the transaction value, in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Viasoft. Assuming consummation of the Merger, no such engagement
letter obligates Viasoft to continue to use their services or pay fees or
expenses in connection with any future transaction.
(q) Opinion of Financial Advisor. Viasoft's Board of Directors
has received the opinion of Broadview International LLC, dated the date of this
Agreement, to the effect that, as of such date, the consideration to be received
in the Offer and the Merger by Viasoft's shareholders is fair to Viasoft's
shareholders (other than Compuware and Merger Sub) from a financial point of
view, and a signed copy of such opinion has been delivered to Compuware.
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(r) Contracts, Debt Instruments.
(i) Set forth in Section 4.1(r) of the Viasoft
Disclosure Letter is (x) a list of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and instruments pursuant to which any
indebtedness of Viasoft or any of its subsidiaries in an aggregate principal
amount in excess of $100,000 is outstanding or may be incurred and (y) the
respective principal amounts currently outstanding thereunder. For purposes of
this Agreement, "indebtedness" will mean, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, or with
respect to deposits or advances of any kind to such person, (B) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments, (C)
all obligations of such person upon which interest charges are customarily paid,
(D) all obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such person, (E) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
such person's business), (F) all capitalized lease obligations of such person,
(G) all obligations of others secured by any lien on property or assets owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed, (H) all obligations of such person under interest rate or currency
hedging transactions (valued at the termination value thereof), (I) all letters
of credit issued for the account of such person (excluding letters of credit
issued for the benefit of suppliers to support accounts payable to suppliers
incurred in the ordinary course of business) and (J) all guarantees and
arrangements having the economic effect of a guarantee of such person of any
indebtedness of any other person.
(ii) Except as set forth in Section 4.1(r) of the
Viasoft Disclosure Letter, neither Viasoft nor any of its subsidiaries is in
violation of or in default under (nor does there exist any condition which upon
the passage of time or the giving of notice would cause such a violation of or
default under): (x) its certificate of incorporation or bylaws, (y) any loan or
credit agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding to which it is a party or by which it or any of its properties or
assets is bound, (z) any order, writ, injunction, decree, statute, rule or
regulation applicable to Viasoft or any of its subsidiaries, except for
violations or defaults that individually or in the aggregate would not have a
Material Adverse Effect on Viasoft.
(iii) Except as set forth in Section 4.1(r) of the
Viasoft Disclosure Letter, neither Viasoft nor any of its subsidiaries is a
party to or is bound by: (x) any agreement of indemnification or guaranty not
entered into in the ordinary course of business other than indemnification
agreements between Viasoft or any of its subsidiaries and any of its officers or
directors; (y) any agreement, contract or commitment currently in force relating
to the disposition or acquisition of assets not in the ordinary course of
business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise; or (z) any material joint marketing or
development agreement.
(s) Certain Agreements. Except as set forth in Section 4.1(s)
of the Viasoft Disclosure Letter, Viasoft and its subsidiaries are not parties
to or subject to any agreement which falls within any of the following
classifications:
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(i) any employment, deferred compensation, bonus or
contract of a similar nature requiring payments in excess of $100,000 per year
by Viasoft or any subsidiary;
(ii) any contract or agreement that materially restricts
or materially impairs Viasoft or any of its subsidiaries or employees from
carrying on such person's business as now conducted or any part thereof or from
competing in any line of business with any person, corporation or other entity
or that grants any exclusive license or distribution rights;
(iii) any collective bargaining agreement or other such
contract or agreement with any labor organization;
(iv) any lease of personal property requiring rental
payments of $250,000 or more throughout its term and having a term of one year
or more, whether as lessor or lessee;
(v) any mortgage, pledge, conditional sales contract,
security agreement, option, or any other similar agreement with respect to any
interest of Viasoft or any subsidiary in personal property;
(vi) any stock purchase, stock option, stock bonus,
stock ownership, profit sharing, group insurance, bonus, deferred compensation,
severance pay, pension, retirement, savings or other incentive, change in
control, welfare or employee plan or material agreement providing benefits to
any present or former employees, officers or directors of Viasoft or any of its
subsidiaries;
(vii) any agreement to acquire equipment or commitment to
make capital expenditures by Viasoft or any subsidiary of $50,000 or more;
(viii) any agreement for the sale of any material
properties or assets or for the grant of any preferential right to purchase any
such material properties or assets or which requires the consent of any third
party to the transfer and assignment of any such material properties or assets,
other than in the ordinary course of business in connection with Viasoft's sale
of properties or assets;
(ix) any agreement requiring Viasoft to indemnify any
current or former officer, director, employee or agent;
(x) any agreement of any kind, including any
distributorship, sales, marketing or representative agreement, which involves
future payments or performance of services or delivery of items, requiring
payments of $350,000 or more by Viasoft or any subsidiary; or
(xi) any agreement with a customer of Viasoft providing
for services to be performed for such customer for a fixed or capped fee or
payment structure.
Neither Viasoft nor any subsidiary is in default under any
contract or agreement, nor, to the knowledge of Viasoft, are any other parties
to such agreements in default, and to Viasoft's knowledge, no act or omission
has occurred which, with notice or lapse of time or both,
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would constitute a default under any term or provision of any contract or
agreement, except for such defaults which, individually or in the aggregate,
would not have a Material Adverse Effect on Viasoft. Each agreement disclosed in
items (i) through (xii) of this Section is in full force and effect and true and
complete copies of all such agreements have been provided to Compuware or its
representatives.
(t) Title to Properties.
(i) Section 4.1(t) of the Viasoft Disclosure Letter lists
all real property interests owned or leased by Viasoft or its subsidiaries.
Viasoft and each of its subsidiaries has good and marketable title to, or valid
leasehold interests in, all of its material properties and assets except for
such as are no longer used or useful in the conduct of its businesses or as have
been disposed of in the ordinary course of business and except for defects in
title, easements, restrictive covenants and similar encumbrances or impediments
that individually or in the aggregate would not materially interfere with its
ability to conduct its business as currently conducted. All such material
properties and assets, other than properties and assets in which Viasoft or any
of its subsidiaries has leasehold interests, are free and clear of all Liens,
except for Liens that individually or in the aggregate would not materially
interfere with the ability of Viasoft and its subsidiaries to conduct business
as currently conducted.
(ii) Viasoft and each of its subsidiaries has complied in
all material respects with the terms of all material leases to which it is a
party and under which it is in occupancy, and all such leases are in full force
and effect. Viasoft and each of its subsidiaries enjoys peaceful and undisturbed
possession under all such material leases.
(u) Labor Matters. Except as set forth in the Section 4.1(u)
of the Viasoft Disclosure Letter, (a) Viasoft and its subsidiaries are operating
and have operated their businesses in compliance in all material respects with
all applicable laws relating to such businesses respecting employment and
employment practices, terms and conditions of employment and wages and hours,
including the Immigration Reform and Control Act ("IRCA"), the Worker Adjustment
and Retraining Notification Act of 1988 ("WARN Act"), any such applicable laws
respecting employment of foreign nationals, employment discrimination, equal
opportunity, affirmative action, employee privacy, wrongful or unlawful
termination, workers' compensation, occupational safety and health requirements,
labor/management relations and unemployment insurance, the Family and Medical
Leave Act or related matters, and Viasoft and its subsidiaries are not engaged
in and have not engaged in any unlawful practice relating to such businesses
under such applicable laws, or in any unfair labor practice relating to the
business of Viasoft or its subsidiaries; (b) no Governmental Entity has given
Viasoft or any of its subsidiaries written notice regarding any pending charge,
audit, claim, complaint, investigation or review by or before any Governmental
Entity concerning or requesting in writing to explain any conflicts with or
violations of any such laws relating to the business conducted by Viasoft or
such subsidiary or in connection with the operation of the business, nor, to the
knowledge of Viasoft, is any such investigation threatened or pending, nor, to
the knowledge of Viasoft, has any such investigation occurred during the last
two years; (c) there is no labor strike, dispute, slowdown or stoppage actually
pending or, to the knowledge of Viasoft, threatened against or affecting the
business, and neither Viasoft nor any subsidiary has experienced any work
stoppage or other material labor difficulty relating to the business in the last
two years; (d) to the knowledge of
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Viasoft, no union representation question or union organizational activity
exists respecting employees and, to Viasoft's knowledge, no one has petitioned
within the last two years, and no one is now petitioning, for union
representation of any employees; (e) there exists no collective bargaining
agreement or other contract or agreement relating to the business with any labor
union or association representing any employee, and no collective bargaining
agreement affecting employees is currently being negotiated; and (f) Viasoft and
its subsidiaries are in material compliance with all obligations under all
Viasoft Employee Plans and all employment contracts and are not delinquent in
payments to any employees for any wages, salaries, commissions, bonuses or other
compensation for any services performed by them relating to the business or
amounts required to be reimbursed to such employees. Except as set forth in
Section 4.1(a) of the Viasoft Disclosure Letter, there are no pending or, to the
knowledge of Viasoft, threatened proceedings, actions or suits of any nature (i)
under or alleging violation of IRCA, WARN or any law respecting employment of
foreign nationals, employment discrimination, equal opportunity, affirmative
action, employee privacy, wrongful or unlawful termination or demotion, sexual
and other harassment, workers' compensation, occupational safety and health
requirements, labor/management relations (including any grievances or
arbitration proceeding arising out of or under any collective bargaining
agreements) and unemployment insurance, or matters involving any employee; (ii)
relating to alleged unlawful employment practices or unfair labor practices
involving any employee (or the equivalent thereof under any law); or (iii)
relating to alleged breaches of any of Viasoft Employee Plans. To Viasoft's
knowledge, no employee of Viasoft has in any material respect violated any
employment contract, confidentiality agreement, patent disclosure agreement or
noncompetition agreement between such employee and any former employer of such
employee due to such employee being employed by Viasoft or any of its
subsidiaries or disclosing to Viasoft or any of its subsidiaries trade secrets
or proprietary information of any such employer. No employee of Viasoft or any
of its subsidiaries has given notice to Viasoft or any of its subsidiaries, nor
is Viasoft otherwise aware, that any employee intends to terminate his or her
employment with Viasoft or any of its subsidiaries.
(v) Government Contracts. All representations, certifications
and disclosures made by Viasoft or any subsidiary to any Government Contract
Party have been in all material respects current, complete and accurate at the
times they were made. There have been no acts, omissions or noncompliance with
regard to any applicable public contracting statute, regulation or contract
requirement (whether express or incorporated by reference) relating to any
contracts of Viasoft or any subsidiary with any Government Contract Party in
either case that have led to or is reasonably likely to lead to, either before
or after the Closing Date, (a) any material claim or dispute involving Viasoft
or any subsidiary and/or Compuware or Merger Sub as successor in interest to
Viasoft and any Government Contract Party or (b) any suspension, debarment or
contract termination, or proceeding related thereto. There has been no act or
omission that relates to the marketing, licensing or selling to any Government
Contract Party of any of Viasoft's technical data, computer software, products
and services and that has led to or is reasonably likely to lead to, either
before or after the Closing Date, any cloud on any of Viasoft's or its
subsidiaries' rights in and to its technical data, computer software, products
and services. There is currently no dispute between Viasoft or any of its
subsidiaries and any Government Contract Party. For purposes of this Section,
the term "Government Contract Party" means any independent or executive agency,
division, subdivision, audit group or procuring office of the federal, state,
county, local or municipal government, including any prime contractor of the
federal government and any higher level
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subcontractor of a prime contractor of the federal government, and including any
employees or agents thereof, in each case acting in such capacity.
(w) Warranties, Guarantees and Indemnities. Except as
disclosed in Section 4.1(w) of the Viasoft Disclosure Letter, neither Viasoft
nor any of its subsidiaries has provided to its customers rights to obtain
refunds or made any other warranties, guarantees or indemnities with respect to
the services it provides to such customers except where Viasoft's liability is
limited to (i) amounts paid to Viasoft pursuant to the contract in which such
right, warranty, guaranty or indemnity appears and lost profits and
consequential damages are expressly excluded, and/or (ii) Viasoft's obligation
to remedy a deficiency under such contract without further charge to the
customer.
(x) Customer Relationships. Each of Viasoft and its
subsidiaries has good commercial working relationships with its customers and
suppliers. None of Viasoft's top twenty-five customers (based on Viasoft's
consolidated revenues for the fiscal year ended June 30, 1999 (each, a "Material
Customer")) has, from July 1, 1999 to the date of this Agreement, cancelled or
otherwise terminated its relationship with Viasoft or any subsidiary thereof,
decreased or limited materially the amount of product or services ordered from
Viasoft or any subsidiary thereof, or threatened to take any such action other
than in the ordinary course upon completion of customer projects.
(y) Product and Service Quality. Except as set forth in
Section 4.1(y) of the Viasoft Disclosure Letter, all products manufactured,
sold, licensed, leased or delivered by Viasoft and its subsidiaries and all
services provided by Viasoft and its subsidiaries, to customers on or prior to
the Closing Date conform in all material respects to applicable contractual
commitments, express and implied warranties, product specifications and quality
standards and none of Viasoft or its subsidiaries has any material liability
(and there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand against Viasoft or
its subsidiaries giving rise to any material liability) for replacement or
repair thereof or other damages in connection therewith. Neither Viasoft nor its
subsidiaries has received a complaint from a Material Customer regarding
Viasoft's or its subsidiaries' services pursuant to which such Material Customer
is withholding payment of any material amounts payable to Viasoft or such
subsidiary, or which is the subject of an ongoing dispute or correspondence
between Viasoft and such customer.
(z) Disclosure. Nothing in the Viasoft Disclosure Letter will
be deemed adequate to disclose an exception to a representation or warranty made
herein unless the disclosure identifies the exception with particularity and
describes the relevant facts in reasonable detail; provided that a particular
matter need only be disclosed once in such manner so long as it is
cross-referenced wherever else applicable in the Viasoft Disclosure Letter in a
manner sufficiently clear to identify to which representation or warranty an
exception is being made.
4.2 Representations and Warranties of Compuware and Merger Sub.
Compuware and Merger Sub represent and warrant to Viasoft as follows:
(a) Organization, Standing and Corporate Power. Each of
Compuware and Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of
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the jurisdiction in which it is incorporated and has the requisite corporate
power and authority to carry on its business as now being conducted. Each of
Compuware and Merger Sub is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed individually or in the aggregate would not have a material adverse
effect on Compuware.
(b) Authority; Noncontravention. Compuware and Merger Sub have
all requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Compuware and Merger Sub and the consummation by
Compuware and Merger Sub of the transactions contemplated by this Agreement have
been duly authorized by all necessary corporate action on the part of Compuware
and Merger Sub. This Agreement has been duly executed and delivered by Compuware
and Merger Sub and constitutes a valid and binding obligation of each such
party, enforceable against each such party in accordance with its terms (except
as enforcement hereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and similar laws, both state and federal, affecting
the enforcement of creditors' rights or remedies in general as from time to time
in effect or (ii) the exercise by courts of equity powers). The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Compuware or Merger Sub under (i) the articles of
incorporation or bylaws of Compuware or the certificate of incorporation or
bylaws of Merger Sub, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Compuware or Merger Sub or their respective properties
or assets or (iii) any governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Compuware or Merger Sub or their respective
properties or assets, other than, in the case of clause (ii) or (iii), any such
conflicts, violations, defaults, rights or Liens that individually or in the
aggregate would not (x) have a material adverse effect on Compuware and its
subsidiaries, taken as a whole, (y) materially impair the ability of Compuware
or Merger Sub to perform their obligations under this Agreement, (z) prevent the
consummation of any of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to Compuware
or Merger Sub in connection with the execution and delivery of this Agreement or
the consummation by Compuware or Merger Sub, as the case may be, of any of the
transactions contemplated by this Agreement, except for (1) the filing of a
pre-merger notification and report form under the HSR Act, (2) the filing with
the SEC and the National Association of Securities Dealers, Inc. of (A) the
Offer Documents and (B) such reports under Sections 13(a), 13(d) and 16(a) of
the Exchange Act as may be required in connection with this Agreement and the
transactions contemplated by this Agreement, (3) the filing of the Certificate
of Merger or an agreement of merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in which
Viasoft is qualified to do business and (4) such other consents, approvals,
orders, authorizations, registrations, declarations and filings as would not
individually or in the aggregate (A) have a material adverse effect on Compuware
and its subsidiaries,
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taken as a whole, (B) impair the ability of Compuware and Merger Sub to perform
their respective obligations under this Agreement or (C) prevent the
consummation of any of the transactions contemplated by this Agreement.
(c) Information Supplied. None of the information supplied or
to be supplied by Compuware or Merger Sub specifically for inclusion or
incorporation by reference in the Offer Documents, the Schedule 14D-9, the
Information Statement or the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to Viasoft's shareholders,
or, in the case of the Proxy Statement, at the date the Proxy Statement is first
mailed to Viasoft's shareholders or at the time of the Shareholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Offer Documents will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation or warranty is made by
Compuware or Merger Sub with respect to statements made or incorporated by
reference therein based on information supplied by Viasoft specifically for
inclusion or incorporation by reference therein.
(d) Brokers. No broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Compuware or
Merger Sub.
(e) Financing. At the expiration of the Offer and the
Effective Time, Compuware and Merger Sub will have available all the funds
necessary for the acquisition of all Shares pursuant to the Offer or Merger and
to perform their respective obligations under this Agreement, including without
limitation payment in full for all Shares validly tendered or outstanding at the
Effective Time.
(f) Litigation. Except as disclosed in documents filed with
the SEC by Compuware, as of the date of this Agreement, there is no suit, action
or proceeding pending or, to the knowledge of Compuware, threatened against
Compuware or any of its subsidiaries that individually or in the aggregate could
reasonably be expected to (i) impair the ability of Compuware or Merger Sub to
perform their obligations under this Agreement or (ii) prevent the consummation
of any of the transactions contemplated by this Agreement, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against Compuware or any of its subsidiaries having, or
which is reasonably likely to have, any effect referred to in the foregoing
clause (i) or (ii) above.
(g) Financial Statements. The financial statements of
Compuware included in the required reports, schedules, forms, statements and
other documents filed with the SEC since December 31, 1996, including those
filed after the date hereof until the Closing, comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC), except as may be indicated in the
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notes thereto, and fairly present in all material respects the consolidated
financial position of Compuware and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments).
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Conduct of Business.
(a) Conduct of Business by Viasoft. Viasoft will, and will
cause its subsidiaries to, carry on its and their respective businesses in the
ordinary course consistent with past practice and use all reasonable efforts to
preserve intact their current business organizations, to keep available the
services of their current officers and employees and to preserve their
relationships with distributors, licensors, contractors, customers, suppliers,
lenders and others having business dealings with any of them. Without limiting
the generality of the foregoing, except as may be expressly permitted by other
provisions of this Agreement, as set forth in Section 5.1 of the Viasoft
Disclosure Letter cross-referenced to a subsection of this Section 5.1, or as
may be agreed to in writing by Compuware, Viasoft will not, and will not permit
any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends on,
or make any other distributions in respect of, any of its capital stock, other
than dividends and distributions by any direct or indirect wholly-owned
subsidiary of Viasoft to its parent, or in the case of less than wholly-owned
subsidiaries, as required by agreements existing on the date of this Agreement,
(y) split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of capital stock of Viasoft or any of its
subsidiaries or any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities (other than the
issuance of Viasoft Common Stock upon the exercise of Options (as defined in
Section 6.4) outstanding on the date of this Agreement and in accordance with
their present terms and pursuant to the Stock Purchase Plan); provided that,
without the prior written consent of Compuware, in no event will Viasoft issue
any shares of its capital stock during the period commencing with the
consummation of the Offer and ending at the Effective Time;
(iii) except as set forth in Section 5.1(a)(iii) of
the Viasoft Disclosure Letter, amend its certificate of incorporation, bylaws or
other comparable charter or organizational documents;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any
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corporation, partnership, joint venture, association or other business
organization or division thereof or (y) any assets that individually or in the
aggregate are material to Viasoft and its subsidiaries taken as a whole, except
in the ordinary course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its properties or
assets (including Intellectual Property), except for sales, leases, licenses, or
encumbrances of its properties or assets in the ordinary course of business
consistent with past practice;
(vi) (x) incur any indebtedness for borrowed money or
draw down on any credit facility or arrangement or guarantee any indebtedness of
another person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of Viasoft or any of its subsidiaries, guarantee any
debt securities of another person, enter into any "keep well" or other agreement
to maintain any financial statement condition of another person or enter into
any arrangement having the economic effect of any of the foregoing or (y) make
any loans or advances to, or investments in, any other person, other than any
subsidiary of Viasoft;
(vii) make or agree to make any new capital
expenditure or expenditures which individually is in excess of $100,000 or which
in the aggregate are in excess of $500,000;
(viii) make any material tax election or settle or
compromise any material income or franchise tax liability;
(ix) pay, discharge, settle or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than as set forth in Section 5.1(a)(ix) of the
Viasoft Disclosure Letter or the payment, discharge, settlement or satisfaction,
in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the notes
thereto) of Viasoft included in the Filed SEC Documents or incurred since the
date of such financial statements in the ordinary course of business consistent
with past practice in accordance with the terms of this Section 5.1;
(x) except as expressly contemplated hereby,
waive, release or assign any rights or claims under any contract or agreement
binding on Viasoft or any subsidiary; or, except as expressly contemplated
hereby or in the ordinary course of business consistent with past practice,
enter into, modify, amend or terminate any contract or agreement binding on
Viasoft or any subsidiary; or, in any event, enter into any contract or
agreement binding on Viasoft or any subsidiary which would be required to be
disclosed in Section 4.1(d) of the Viasoft Disclosure Letter;
(xi) terminate or lay off more than 5 employees,
except for cause consistent with past practice and Viasoft policy or except as
set forth in Section 5.1(a)(xi) of the Viasoft Disclosure Letter;
(xii) except as set forth in Section 5.1(a)(xii) of
the Viasoft Disclosure Letter, adopt or amend in any material respect any
employee benefit or employee stock purchase or
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employee option plan, or enter into any employment contract, pay any special
bonus or special remuneration to any director or employee, or increase the
salaries or wage rates of its officers or employees other than in the ordinary
course of business, consistent with past practice, or change in any material
respect any management policies or procedures, waive any stock repurchase
rights, accelerate, amend or change the period of exercisability of any Options
(as defined in Section 6.4), or authorize cash payments in exchange for any
Options, or otherwise alter or commit to any compensation, benefit or severance
arrangement for or with any officer or employee of Viasoft or enter into any
related or interested party transaction;
(xiii) except as set forth in Section 5.1(a)(xiii) of the
Viasoft Disclosure Letter, grant or provide any severance or termination pay to
any officer or employee except payments pursuant to written plans or agreements
outstanding on the date hereof and described in the Viasoft Disclosure Letter;
(xiv) take any actions (including seeking or soliciting
corporate approvals) directed towards seeking to liquidate or dissolve Viasoft
or to take advantage of bankruptcy or other creditor protection laws or that
would or are reasonably likely to render Viasoft insolvent or to cause Viasoft
to become involved in bankruptcy proceedings, including soliciting creditor
arrangements or moratoria;
(xv) except as described in Section 5.1(a)(xv) of the
Viasoft Disclosure Letter, institute any litigation or other proceeding;
(xvi) take any action that might cause or constitute a
breach of any representation or warranty made by Viasoft in this Agreement; or
(xvii) other than the Rights Plan disclosed in Section
4.1(o) of the Viasoft Disclosure Letter, enter into any Rights Plan, or take or
permit any other action which could have the effect of causing the
representation made in Section 4.1(o) to be untrue in any respect;
(xviii) authorize any of, or commit or agree to take any
of, the foregoing actions.
(b) Other Actions. Viasoft and Compuware will not, and will
not permit any of their respective Subsidiaries to, knowingly and willfully take
any deliberate action that would cause (i) any of the representations and
warranties of such party set forth in this Agreement to become untrue in (x)
such a manner as would have a Material Adverse Effect on Viasoft (in the case of
Viasoft) or (y) any material respect (in the case of Compuware) as of the date
when made or (ii) any of the conditions to the Offer set forth in Exhibit A or
any of the conditions to the Merger to not be satisfied (subject to Viasoft's
right to take action consistent with Sections 5.2 and 6.1).
5.2 No Solicitation.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement in accordance with its terms,
Viasoft will not, nor will it permit any of
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its subsidiaries to, nor will it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative of, Viasoft or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage the making, announcement or
submission of any takeover proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any non-public information with
respect to, or enter into any agreement with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal;
provided, however, that this Section 5.2 will not prohibit Viasoft from
furnishing non-public information regarding Viasoft and its subsidiaries to, or
entering into discussions or negotiations with, any person or group who has
submitted (and not withdrawn) to Viasoft an unsolicited, written, bona fide
takeover proposal (as defined in this Section 5.2) that Viasoft's Board of
Directors reasonably concludes (after consultation with its financial adviser)
may constitute or lead to a superior proposal (as defined in Section 6.1) if (1)
neither Viasoft nor any representative of Viasoft and its subsidiaries will have
violated any of the restrictions set forth in this Section 5.2, (2) Viasoft's
Board of Directors concludes in good faith, after consultation with its outside
legal counsel, that such action is required in order for Viasoft's Board of
Directors to comply with its fiduciary obligations to Viasoft's shareholders
under applicable law, and (3) prior to furnishing any such nonpublic information
to, or entering into any such discussions with, such person or group, (x)
Viasoft gives Compuware written notice of the identity of such person or group
and all of the material terms and conditions of such takeover proposal and of
Viasoft's intention to furnish information to, or enter into discussions or
negotiations with, such person or group, (y) Viasoft receives from such person
or group an executed confidentiality agreement containing terms at least as
restrictive with regard to Viasoft's confidential information as the
Confidentiality Agreement, and (z) contemporaneously with furnishing any such
information to such person or group, Viasoft furnishes such information to
Compuware (to the extent such information has not been previously furnished by
Viasoft to Compuware). Upon execution of this Agreement, Viasoft, its
subsidiaries, officers, directors, employees, investment bankers, attorneys and
other agents and representatives will immediately cease any and all existing
activities, discussions or negotiations with any parties conducted previously
regarding a takeover proposal. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding two sentences
by any officer or director of Viasoft or any investment banker or attorney of
Viasoft or any of its subsidiaries, will be deemed to be a breach of this
Section 5.2(a) by Viasoft. For purposes of this Agreement, "takeover proposal"
means any offer or proposal relating to any transaction or series of related
transactions (other than the transactions contemplated by this Agreement)
involving: (A) any acquisition or purchase from Viasoft by any person or "group"
(as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) of more than a 10% interest in the total outstanding
voting securities of Viasoft or any of its subsidiaries or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning 10% or more of the total outstanding voting
securities of Viasoft or any of its subsidiaries or any merger, consolidation,
business combination or similar transaction involving Viasoft pursuant to which
the shareholders of Viasoft immediately preceding such transaction hold less
than 90% of the equity interests in the surviving or resulting entity of such
transaction; (B) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than 10% of the assets of Viasoft;
or (C) any liquidation or dissolution of Viasoft.
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(b) In addition to the obligations of Viasoft set forth in
paragraph (a) above, Viasoft will promptly advise Compuware orally and in
writing of any request for information or of any takeover proposal, or any
inquiry with respect to or which is expected to lead to any takeover proposal,
the material terms and conditions of such request, takeover proposal or inquiry,
and the identity of the person making any such takeover proposal or inquiry.
Viasoft will keep Compuware fully informed of the status and details of any such
request, takeover proposal or inquiry.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Shareholder Approval; Preparation of Proxy Statement.
(a) If Viasoft Shareholder Approval is required by law in
order to effect the Merger, Viasoft will, as soon as practicable following the
expiration of the Offer, duly call, give notice of, convene and hold a meeting
of its shareholders (the "Shareholders Meeting") for the purpose of obtaining
Viasoft Shareholder Approval. Subject to applicable law and the provisions of
Section 6.1(c): (i) Viasoft will, through its Board of Directors, recommend to
its shareholders that Viasoft Shareholder Approval be given; (ii) the Proxy
Statement will include a statement to the effect that Viasoft's Board of
Directors recommends that Viasoft Shareholder Approval be given at the
Shareholders Meeting; and (iii) neither Viasoft's Board of Directors nor any
committee thereof will withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify in a manner adverse to Compuware, the recommendation
of Viasoft's Board of Directors that Viasoft Shareholder Approval be given at
the Shareholders Meeting. Notwithstanding the foregoing, if Merger Sub (or any
other Subsidiary of Compuware) will acquire and will maintain through the
effectiveness of the Short-Form Merger, ownership of at least 90% of the
outstanding Shares sufficient to enable Merger Sub (or such other Subsidiary) to
effect the Short-Form Merger, the parties will, at the request of Compuware,
take all necessary and appropriate action to cause the Short-Form Merger to
become effective as soon as practicable after the expiration of the Offer
without a Shareholders Meeting in accordance with Section 253 of the DGCL.
Without limiting the generality of the foregoing, Viasoft agrees that its
obligations pursuant to the first sentence of this Section 6.1(a) will not be
affected by (i) the commencement, public proposal, public disclosure or
communication to Viasoft of any takeover proposal (including a superior
proposal) or (ii) the withdrawal or modification by Viasoft's Board of Directors
of its approval or recommendation of the Offer, this Agreement, the Merger or
Viasoft Shareholder Approval.
(b) If Viasoft Shareholder Approval is required by law in
order to effect the Merger, Viasoft will, as soon as practicable following the
expiration of the Offer, prepare and file a preliminary Proxy Statement with the
SEC and will use its best efforts to respond to any comments of the SEC or its
staff and to cause the Proxy Statement to be mailed to Viasoft's shareholders as
promptly as practicable after responding to all such comments to the
satisfaction of the staff. Viasoft will notify Compuware promptly of the receipt
of any comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for additional
information and will supply Compuware with copies of all correspondence between
Viasoft or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement or the Merger. If
at any time prior to the Shareholders Meeting there will
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occur any event that Viasoft determines, on advice of its outside counsel,
should be set forth in an amendment or supplement to the Proxy Statement,
Viasoft will promptly prepare and mail to its shareholders such an amendment or
supplement. Except as required by law, Viasoft will not mail any Proxy
Statement, or any amendment or supplement thereto, to which Compuware reasonably
objects.
(c) Nothing in this Agreement will prevent Viasoft's Board of
Directors from withholding, withdrawing, amending or modifying its
recommendation in favor of the Offer, this Agreement, the Merger or Viasoft
Shareholder Approval if (i) a superior proposal is made to Viasoft and is not
withdrawn, (ii) Viasoft provides written notice to Compuware (a "Notice of
Superior Proposal") advising Compuware that Viasoft has received a superior
proposal, specifying all of the material terms and conditions of such superior
proposal and identifying the person or entity making such superior proposal,
(iii) Compuware will not have, within three business days of Compuware's receipt
of the Notice of Superior Proposal, made an offer that Viasoft's Board by a
majority vote determines in its good faith judgment, after consultation with its
financial adviser, to be at least as favorable to Viasoft's shareholders as such
superior proposal (it being agreed that Viasoft's Board of Directors will
convene a meeting to consider any such offer by Compuware promptly following the
receipt thereof), (iv) Viasoft's Board of Directors concludes in good faith,
after consultation with qualified outside counsel, that, in light of such
superior proposal, the withholding, withdrawal, amendment or modification of
such recommendation is required in order for Viasoft's Board of Directors to
comply with its fiduciary obligations to Viasoft's shareholders under applicable
law and (v) Viasoft will not have violated any of the restrictions set forth in
Section 5.2 or this Section 6.1. Viasoft will provide Compuware with at least
three business days prior notice (or such lesser prior notice as provided to the
members of Viasoft's Board of Directors but in no event less than twenty-four
hours) of any meeting of Viasoft's Board of Directors at which Viasoft's Board
of Directors is reasonably expected to consider any takeover proposal to
determine whether such takeover proposal is a superior proposal. For purposes of
this Agreement, "superior proposal" will mean an unsolicited, bona fide written
offer made by a third party to consummate any of the following transactions: (i)
a merger, consolidation, business combination, sale of assets or similar
transaction involving Viasoft pursuant to which the Shares outstanding
immediately preceding such transaction will represent less than 50% of the
equity interest in the surviving or resulting entity of such transaction or (ii)
the acquisition by any person or group (including by way of a tender offer or an
exchange offer or a two step transaction involving a tender offer followed with
reasonable promptness by a merger involving Viasoft), directly or indirectly, of
ownership of 100% of the then-outstanding shares of capital stock of Viasoft, on
terms and conditions that Viasoft's Board of Directors determines, in its
reasonable judgment, after consultation with its financial adviser, to be more
favorable to Viasoft shareholders than the terms of the Merger; provided,
however, that any such offer will not be deemed to be a "superior proposal" if
any financing required to consummate the transaction contemplated by such offer
is not committed and is not likely in the reasonable judgment of Viasoft's Board
of Directors (after consultation with its financial adviser) to be obtained by
such third party on a timely basis.
(d) Nothing contained in this Agreement will prohibit Viasoft
or its Board of Directors from taking and disclosing to its shareholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act.
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(e) Compuware agrees to cause all shares of Viasoft Common
Stock purchased pursuant to the Offer and all other shares of Viasoft Common
Stock owned by Merger Sub or any other subsidiary of Compuware to be voted in
favor of Viasoft Shareholder Approval.
6.2 Access to Information; Confidentiality. Viasoft will, and will
cause each of its subsidiaries to, afford to Compuware, and to Compuware's
officers, employees, accountants, counsel, financial advisers and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, Viasoft
will, and will cause each of its subsidiaries to, furnish or make available
promptly to Compuware (a) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (b) all other information
concerning its business, properties and personnel as Compuware may reasonably
request. Any disclosure that may be required by law, regulation or rule will be
coordinated by and between the parties and their advisors prior to such
disclosure. Except as required by law or the rules and regulations of the Nasdaq
National Market, Compuware will hold, and will cause its officers, employees,
accountants, counsel, financial advisers and other representatives and
affiliates to hold, in confidence any confidential information in accordance
with the Confidentiality Agreement dated June 2, 1999, between Compuware and
Viasoft (the "Confidentiality Agreement").
6.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
use its reasonable efforts to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or non actions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if any)
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, including but not limited to those set forth in Section 4.1(d) of the
Viasoft Disclosure Letter, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. In connection with and without limiting the foregoing, Viasoft and
its Board of Directors will (A) take all action necessary to ensure that no
state takeover statute or similar statute or regulation is or becomes applicable
to the Offer, the Merger, this Agreement or any of the other transactions
contemplated by this Agreement and (B) if any state takeover statute or similar
statute or regulation becomes applicable to the Offer, the Merger, this
Agreement, or any other transaction contemplated by this Agreement, take all
action necessary to ensure that the Offer, the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly
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as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Offer, the Merger and
the other transactions contemplated by this Agreement.
(b) Viasoft will give prompt notice to Compuware, and
Compuware will give prompt notice to Viasoft, of: (i) the breach of any material
representation or warranty made by it contained in this Agreement or (ii) the
failure by it to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification will affect the
representations, warranties, covenants, or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
6.4 Stock Plans.
(a) Stock Option Plans. Pursuant to the Viasoft Option Plans,
following the Effective Time, each option to purchase Shares granted pursuant to
the Viasoft Option Plans ("Options") will be fully vested and entitle the
optionee to receive the Merger Consideration (without interest) per Share
subject to such Option; provided, that any such Option that is not duly
exercised within thirty (30) days after the Effective Time will automatically
expire.
(b) Employee Stock Purchase Plan. Unless terminated prior to
the Effective Time in accordance with its terms, the Stock Purchase Plan will be
terminated as of the Effective Time. Unless the Stock Purchase Plan is
terminated prior to the Effective Time in accordance with its terms, Viasoft
will take such actions as are necessary to cause the last day of the then
current "Purchase Right Period" (as such term is used in the Stock Purchase
Plan) to be the last trading day on which Viasoft Common Stock is traded on the
Nasdaq National Market immediately prior to the Effective Time (the "Final
Viasoft Exercise Date"); provided that such change will be conditioned on the
consummation of the Merger. On the Final Viasoft Exercise Date, Viasoft will
apply the funds credited as of such date under the Stock Purchase Plan within
each participant's payroll withholdings account to the purchase of whole shares
of Viasoft Common Stock in accordance with the terms of the Stock Purchase Plan.
6.5 Post Merger Employment Benefits.
(a) Employees of Viasoft who become employed by Compuware or
any Subsidiary thereof after the Effective Time will become eligible to
participate in the same standard employee benefit plans as are generally
available to similarly situated employees of Compuware, and such employees will
receive credit for all service with Viasoft for purposes of any "employee
benefit plan" as such term is defined in Section 3(3) of ERISA. Upon the request
of Compuware, to the extent permitted by applicable law, any Viasoft Employee
Plans will be terminated immediately prior to the Effective Time.
(b) Promptly following the Effective Time, Compuware will
evaluate, in light of the equity incentive compensation provided to similarly
situated employees of Compuware, the equity incentive compensation of the
employees of Viasoft who become employed by Compuware or its
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Subsidiaries after the Effective Time, and, if deemed appropriate in Compuware's
sole discretion, Compuware will make grants of equity incentive compensation to
such employees.
6.6 Indemnification, Exculpation and Insurance.
(a) From and after the Effective Time, Compuware will fulfill
and honor and will cause the Surviving Corporation to fulfill and honor in all
respects the obligations of Viasoft pursuant to any indemnification agreements
between Viasoft and any of its subsidiaries and their respective directors and
officers (each, an "Indemnified Party") existing prior to the date hereof;
provided that Compuware and the Surviving Corporation will have no obligation to
indemnify an Indemnified Party thereunder in respect of claims, liabilities or
damages arising out of a breach of a representation or covenant made by Viasoft
in this Agreement knowingly and willfully caused by such Indemnified Party. From
and after the Effective Time, such obligations will be the joint and several
obligations of Compuware and the Surviving Corporation and, by executing this
Agreement, Compuware hereby assumes such obligations. Compuware will cause to be
maintained for a period of not less than two years after the Effective Time
Viasoft's current directors' and officers' insurance and indemnification policy
to the extent that it provides coverage for events occurring prior to the
Effective Time (the "D&O Insurance") for all persons who are directors and
officers of Viasoft on the date of this Agreement, so long as the annual premium
therefor would not be in excess of 150% of the amount per annum Viasoft paid in
its last full fiscal year, which amount has been disclosed to Compuware. If the
existing D&O Insurance cannot be maintained, expires or is terminated or
cancelled during such two-year period, Compuware will use all reasonable efforts
to cause to be obtained as much D&O Insurance as can be obtained for the
remainder of such period for an annualized premium not in excess of 150% of the
amount per annum Viasoft paid in its last full fiscal year, which amount has
been disclosed to Compuware, on terms and conditions substantially similar to
the existing D&O Insurance. The certificate of incorporation and bylaws of the
Surviving Corporation will contain the same provisions with respect to
indemnification and elimination of liability for monetary damages as are set
forth in the certificate of incorporation and bylaws of Viasoft, which
provisions will not be amended, repealed or otherwise modified from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who, as of the date hereof or any time after the date hereof and
prior to the Effective Time, were directors, officers, employees or agents of
Viasoft or its subsidiaries, unless such modification is required by law.
(b) This Section 6.6 will survive any termination of this
Agreement and the consummation of the Merger at the Effective Time and will be
binding on all successors and assigns of Compuware or the Surviving Corporation.
In the event that Compuware or the Surviving Corporation or any of their
successors or assigns consolidates with or merges into any other person and will
not be the continuing or surviving corporations or entities of such
consolidation or merger, then and in each such case, proper provisions will be
made so that the successors and assigns of Compuware or the Surviving
Corporation will assume the obligations of Compuware or the Surviving
Corporation, as the case may be, set forth in this Section 6.6.
6.7 Directors. Promptly upon the acceptance for payment of, and
payment for, a number of shares of Viasoft Common Stock by Merger Sub pursuant
to the Offer that satisfies the Minimum Tender Condition, Merger Sub will be
entitled to designate for appointment or election to Viasoft's
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Board of Directors, upon written notice to Viasoft, such number of persons so
that the designees of Merger Sub constitute the same percentage (but in no event
less than a majority) of Viasoft's Board of Directors (rounded up to the next
whole number) as the percentage of Shares acquired in connection with the Offer.
Viasoft will, upon Merger Sub's request, promptly increase the size of the Board
of Directors and/or secure the resignations of such number of directors as is
necessary to enable Merger Sub's designees to be elected to the Board of
Directors and will cause Merger Sub's designees to be so elected. Subject to
applicable law, Viasoft will take all action requested by Compuware necessary to
effect any such election, including mailing to its shareholders the Information
Statement containing the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and Viasoft agrees to make such
mailing with the mailing of the Schedule 14D-9 (provided that Merger Sub will
have provided to Viasoft on a timely basis all information required to be
included in the Information Statement with respect to Merger Sub's designees).
Following the election or appointment of Merger Sub's designees pursuant to this
Section 6.7, and prior to the Effective Time, any amendment or termination of
this Agreement, extension for the performance or waiver of the obligations or
other acts of Compuware or Merger Sub or exercise or waiver of Viasoft's rights
or remedies hereunder, will require the concurrence of a majority of Viasoft's
directors (including, if Compuware so elects, a majority of Viasoft's
non-employee directors) (or the concurrence of the sole remaining director, if
there is only one remaining) then in office who are directors of Viasoft on the
date hereof, or are directors (other than directors designated by Merger Sub in
accordance with this Section 6.7) designated by such persons or person to fill
any vacancy (the "Continuing Directors").
6.8 Fees and Expenses. All fees and expenses incurred in connection
with the Offer, the Merger, this Agreement and the transactions contemplated by
this Agreement will be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated; provided, however, that
(i) Viasoft agrees to promptly assume and pay, or reimburse Compuware for, all
reasonable legal, accounting and investment banking fees payable and expenses
incurred by Compuware in connection with this Agreement and the transactions
contemplated hereby, up to a maximum of $500,000, following termination of this
Agreement pursuant to Sections 8.1(c) or 8.1(d) hereof, and (ii) Compuware
agrees to promptly assume and pay, or reimburse Viasoft for, all reasonable
legal, accounting and investment banking fees payable and expenses incurred by
Viasoft in connection with this Agreement and the transactions contemplated
hereby, up to a maximum of $500,000, following termination of this Agreement
pursuant to Section 8.1(e) hereof.
6.9 Public Announcements. Compuware and Merger Sub, on the one hand,
and Viasoft, on the other hand, will consult with each other before issuing, and
provide each other the opportunity to review, comment upon and concur with, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Offer and the Merger, and will not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with the Nasdaq National Market.
The parties agree that the initial press release to be issued with respect to
the transactions contemplated by this Agreement will be in the form heretofore
agreed to by the parties.
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6.10 Shareholder Litigation. Viasoft will give Compuware the
opportunity to participate in the defense or settlement of any shareholder
litigation against Viasoft and its directors and officers relating to any of the
transactions contemplated by this Agreement until the purchase of Viasoft Common
Stock pursuant to the Offer or the prior termination of this Agreement in
accordance with its terms, and thereafter, will give Compuware the opportunity
to direct the defense of such litigation and, if Compuware so chooses to direct
such litigation, Compuware will give Viasoft and its directors and officers an
opportunity to participate in such litigation; provided, however, that no
settlement thereof will be agreed to without Compuware's consent, which consent
will not be unreasonably withheld, and provided further that no settlement
requiring a payment by an officer, director or other representative will be
agreed to without such person's consent.
6.11 Certain Tax Matters. Prior to the Closing Date, Viasoft will
deliver to Compuware the following information with respect to Viasoft and each
of its subsidiaries as of the most recent practicable date as well as on an
estimated pro forma basis as of the Closing Date giving effect to the
consummation of the transaction contemplated by this Agreement for Tax purposes:
(1) the basis of Viasoft and each of its subsidiaries in their respective
assets; (2) the amount of any net operating loss, net capital loss, unused
investment, research and development or other credit, unused foreign tax credit,
or excess charitable contribution of Viasoft and/or each of its subsidiaries;
(3) excess loss accounts in the consolidated group or groups of which Viasoft
and/or each of its subsidiaries is a member; (4) the amount of any deferred gain
or loss of Viasoft and each of its subsidiaries arising out of any deferred
intercompany transaction; and (5) the amount of any gain or loss allocable to
Viasoft and each of its subsidiaries arising out of any deferred intercompany
transaction or intercompany transaction.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Effective Time of the following
conditions:
(a) Viasoft Shareholder Approval. If required by applicable
law, Viasoft Shareholder Approval will have been obtained.
(b) HSR Act. All waiting periods, if any, under the HSR Act
relating to the transactions contemplated hereby will have expired or terminated
early and all material foreign antitrust approvals required to be obtained prior
to the Merger in connection with the transactions contemplated hereby will have
been obtained.
(c) No Injunctions or Restraints. No statute, rule,
regulation, executive order, decree, temporary restraining order, preliminary or
permanent injunction, judgment or other order or ruling issued by any court of
competent jurisdiction or other Governmental Entity or other legal restraint or
prohibition will be in effect which would (i) make the Merger or the acquisition
or holding by Compuware or its affiliates of Viasoft Common Stock or Common
Stock of the Surviving Corporation illegal or otherwise prevent the consummation
of the Merger, (ii) prohibit Compuware's
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or Merger Sub's ownership or operation of, or compel Compuware or Merger Sub to
dispose of or hold separate, all or a material portion of the business or assets
of Viasoft or any subsidiary thereof, (iii) compel Compuware, Merger Sub or
Viasoft to dispose of or hold separate all or a material portion of the business
or assets of Compuware or any of its subsidiaries or Viasoft or any of its
subsidiaries, or (iv) impose material limitations on the ability of Compuware or
Merger Sub or their affiliates effectively to exercise full ownership and
financial benefits of the Surviving Corporation, or impose any material
condition to the Offer, this Agreement or the Merger which would be adverse to
Compuware.
7.2 Conditions to Compuware's and Merger Sub's Obligation to
Effect the Merger. The respective obligations of Compuware and Merger Sub to
effect the Merger are subject to the satisfaction or waiver on or prior to the
Effective Time of the following conditions:
(a) the representations and warranties of Viasoft set forth in
this Agreement will be true and correct in all material respects on the Closing
Date as if made on and as of the Closing Date, and Compuware will have received
a certificate with respect to the foregoing signed by a duly authorized officer
of Viasoft;
(b) Viasoft will have performed in all material respects each
of its covenants and obligations under this Agreement required to be performed
by it at or prior to the Effective Time pursuant to the terms hereof, and
Compuware will have received a certificate with respect to the foregoing signed
by a duly authorized officer of Viasoft;
(c) there will not have occurred any Material Adverse Change
in Viasoft or any event that is reasonably likely to result in a Material
Adverse Effect to Viasoft;
(d) there will not be pending or overtly threatened any suit,
action or proceeding brought by or on behalf of any Governmental Entity (nor
will the staff of the Federal Trade Commission or the staff of the Antitrust
Division of the Department of Justice have recommended the commencement of
such), any shareholder of Viasoft or any other person or party (but only if such
shareholder suit, action or proceeding is deemed by Compuware to have a
reasonable likelihood of success) directly or indirectly (i) challenging the
acquisition by Compuware or Merger Sub of any shares of Viasoft Common Stock,
seeking to restrain or prohibit the making or consummation of the Offer or the
Merger or the performance of any of the other transactions contemplated by this
Agreement, or alleging that any such acquisition or other transaction relates
to, involves or constitutes a breach of fiduciary duty by Viasoft's directors or
a violation of federal securities law or applicable corporate law, (ii) seeking
to prohibit or limit the ownership or operation by Viasoft, Compuware or any of
their respective subsidiaries of a material portion of the business or assets of
Viasoft and its subsidiaries, taken as a whole, or Compuware and its
subsidiaries, taken as a whole, or to compel Viasoft or Compuware to dispose of
or hold separate any material portion of the business or assets of Viasoft and
its subsidiaries, taken as a whole, or Compuware and its subsidiaries,
taken as a whole, as a result of the Offer or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose material limitations on
the ability of Compuware or Merger Sub to acquire or hold, or exercise full
rights of ownership of, any shares of Viasoft Common Stock accepted for payment
pursuant to the Offer including without limitation the right to vote Viasoft
Common Stock
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accepted for payment by it on all matters properly presented to the shareholders
of Viasoft, (iv) seeking to prohibit Compuware or any of its subsidiaries from
effectively managing or controlling in any material respect the business or
operations of Viasoft and its subsidiaries taken as a whole, or (v) seeking to
impose a material condition to the Offer, Merger or Agreement which would be
adverse to Compuware; and
(e) All third party consents, the failure of which to obtain
would have a Material Adverse Effect on Viasoft, will have been obtained.
7.3 Conditions to Viasoft's Obligation to Effect the Merger. The
obligation of Viasoft to effect the Merger is subject to the satisfaction or
waiver on or prior to the Effective Time of the following conditions:
(a) the representations and warranties of Compuware and Merger
Sub set forth in this Agreement will be true and correct in all material
respects on the Closing Date as if made on and as of the Closing Date, and
Viasoft will have received a certificate with respect to the foregoing signed by
duly authorized officers of Compuware and Merger Sub; and
(b) Compuware and Merger Sub will have performed in all
material respects each of its covenants and obligations under this Agreement
required to be performed by it at or prior to the Effective Time pursuant to the
terms hereof, and Viasoft will have received a certificate with respect to the
foregoing signed by duly authorized officers of Compuware and Merger Sub.
7.4 Conditions to the Short-Form Merger. Notwithstanding the
foregoing provisions of this Article VII, the only conditions to Compuware's and
Merger Sub's obligation to effect the Short-Form Merger, if the Short-Form
Merger may be effected pursuant to applicable law, will be the conditions set
forth in Section 7.1(b) and (c).
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of matters
presented in connection with the Merger by the shareholders of Viasoft:
(a) by mutual written consent duly authorized by the
Boards of Directors of Compuware and Viasoft;
(b) by either Compuware or Viasoft,
(i) if the Merger has not been consummated on or
prior to January 31, 2000; provided, however, that the right to terminate this
Agreement under this Section 8.1(b)(i) will not be available to any party whose
action or failure to act has been a principal cause of or resulted in the
failure of the Merger to occur on or before such date and such action or failure
to act constitutes a breach of this Agreement;
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(ii) if any Governmental Entity issues an order, decree or
ruling or takes any other action permanently enjoining, restraining or otherwise
prohibiting the Merger and such order, decree or ruling or other action becomes
final and nonappealable; or
(iii) if any required approval of Viasoft's shareholders
contemplated by this Agreement has not been obtained by reason of the failure to
obtain the required vote at the Shareholders Meeting duly convened therefor and
at any adjournment thereof; provided, however, that the right to terminate this
Agreement pursuant to this Section 8.1(b)(iii) will not be available to Viasoft
where the failure to obtain Viasoft Shareholder Approval was caused by (x) the
action or failure to act of Viasoft and such action or failure to act
constitutes a material breach by Viasoft of this Agreement or (y) a breach of
the Shareholder Tender and Voting Agreement by any party thereto other than
Compuware;
(c) by Compuware, if (i) Viasoft's Board of Directors or any
committee thereof fails to recommend the Offer, the Merger, this Agreement, or
Viasoft Shareholder Approval, including any failure to include such
recommendation in the Schedule 14D-9 or the Proxy Statement, or has so resolved;
(ii) Viasoft's Board of Directors or any committee thereof withdraws or modifies
(including by amendment of the Schedule 14D-9 or Proxy Statement) in a manner
adverse to Compuware or Merger Sub its approval or recommendation of the Offer,
the Merger, this Agreement, or Viasoft Shareholder Approval, approves or
recommends any takeover proposal (including a superior proposal), or resolves to
do any of the foregoing; (iii) Viasoft enters into any letter of intent or
similar document, agreement or commitment with respect to any takeover proposal
(including a superior proposal) or Viasoft's Board of Directors or any committee
thereof resolves to do so; (iv) Viasoft's Board of Directors or any committee
thereof upon a request to reaffirm Viasoft's approval or recommendation of the
Offer, the Merger or this Agreement, fails to do so within two business days
after such request is made or has so resolved; or (v) a tender or exchange offer
relating to securities of Viasoft is commenced by a person unaffiliated with
Compuware, and Viasoft does not send to its securityholders pursuant to Rule
14e-2 promulgated under the Exchange Act, within 10 business days after such
tender or exchange offer is first published sent or given, a statement
disclosing that Viasoft recommends rejection of such tender or exchange offer;
(d) by Compuware, if any of the representations and warranties
of Viasoft set forth in this Agreement fail to be true and correct in any
material respect as of the date of the Agreement or cease to be true and correct
in any material respect at any time thereafter, or if Viasoft breaches or fails
to perform in any material respect any obligation or to comply in any material
respect with any agreement or covenant of Viasoft to be performed or complied
with by it; provided that if any such breach or failure (other than a breach of
Sections 5.2 or 6.1 or any other breach that has caused irreparable harm) is
curable by Viasoft through the exercise of its reasonable efforts, then
Compuware may not terminate this Agreement under this subsection (d) until ten
business days after written notice thereof has been given to Viasoft by
Compuware and unless at such time the matter has not been cured;
(e) by Viasoft, if any of the representations and warranties
of Compuware or Merger Sub set forth in this Agreement fail to be true and
correct in any material respect as of the
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date of the Agreement or cease to be true and correct in any material respect at
any time thereafter, or if Compuware or Merger Sub breaches or fails to perform
in any material respect any obligation or to comply in any material respect with
any agreement or covenant of Compuware or Merger Sub to be performed or complied
with by it; provided that if any such breach or failure (other than a breach
that has caused irreparable harm) is curable by Compuware or Merger Sub through
the exercise of its reasonable efforts, then Viasoft may not terminate this
Agreement under this subsection (e) until ten business days after written notice
thereof has been given to Compuware and Merger Sub by Viasoft and unless at such
time the matter has not been cured;
(f) by Viasoft, if the Board of Directors of Viasoft will have
withheld, withdrawn, modified or amended its recommendation in favor of this
Agreement, the Offer, the Merger or Viasoft Shareholder Approval as permitted
pursuant to Section 6.1(c) and will have authorized Viasoft to enter into an
agreement with a third party with respect to a superior proposal; or
(g) by Viasoft, if (i) Compuware, Merger Sub, or any of their
affiliates will have failed to commence the Offer on or prior to 5 business days
following the date of the initial public announcement of the Offer or will have
terminated the Offer, or (ii) the Offer expires without Compuware, Merger Sub or
their affiliates, as the case may be, purchasing Shares pursuant thereto;
provided that in each case Viasoft may not terminate this Agreement pursuant to
this Section 8.1(g) if Viasoft is then in material breach of this Agreement.
8.2 Effect of Termination. If this Agreement is terminated by
either Viasoft or Compuware as provided in Section 8.1, this Agreement will
forthwith become void and have no effect, without any liability or obligation on
the part of Compuware, Merger Sub or Viasoft, other than the provisions of the
last sentence of Section 6.2, Section 6.8, this Section 8.2 and Article IX;
provided, however, to the extent that such termination results from the breach
by a party of any of its representations, warranties, covenants or agreements
set forth in this Agreement, such breaching party may be held liable for damages
for such breach; and, provided further that (x) if this Agreement is terminated
by Compuware pursuant to Section 8.1(c) or by Viasoft pursuant to Section
8.1(f), Viasoft will pay or cause to be paid a fee equal to $5,500,000 in
immediately available funds within two business days of such termination, and
(y) if this Agreement is terminated by Compuware pursuant to Sections 8.1(b)(i)
or 8.1(d), or by Compuware or Viasoft pursuant to Section 8.1(b)(iii), and,
prior to such termination under any of such Sections, a third party has publicly
announced a takeover proposal, the consummation of which would constitute an
Acquisition Event, and within 12 months following the termination of this
Agreement, an Acquisition Event is consummated or Viasoft enters into a
definitive agreement providing for an Acquisition Event, Viasoft will pay or
cause to be paid to Compuware a fee equal to $5,500,000 in immediately available
funds within two business days after the consummation of such Acquisition Event
or the entry by Viasoft into such definitive agreement; provided, that if such
Acquisition Event provides for a consideration per Share less than the Offer
Price but greater than the closing price per Share on the Nasdaq National Market
on the trading day immediately prior to the public announcement of the execution
of this Agreement (the "Pre-Offer Price"), the fee payable by Viasoft pursuant
to this clause (y) will be $2,000,000, and if such Acquisition Event provides
for a consideration per Share less than or equal to the Pre-Offer Price, no fee
will be payable by Viasoft pursuant to this clause (y). No termination of this
Agreement will affect the obligations of the parties contained in the
Confidentiality Agreement, all of which
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obligations will survive in accordance with their terms. For the purposes of
this Agreement, "Acquisition Event" means any of the following transactions
(other than the transactions contemplated by this Agreement): (i) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving Viasoft pursuant to which the shareholders of
Viasoft immediately preceding such transaction hold less than 50% of the
aggregate equity interests in the surviving or resulting entity of such
transaction, (ii) a sale or other disposition by Viasoft of assets representing
in excess of 50% of the aggregate fair market value of Viasoft's business
immediately prior to such sale or (iii) the acquisition by any person or group
(including by way of a tender offer or an exchange offer or issuance by
Viasoft), directly or indirectly, of beneficial ownership or a right to acquire
beneficial ownership of shares representing in excess of 50% of the voting power
of the then outstanding shares of capital stock of Viasoft. Payment of the
amounts described in this Section 8.2 will not be in lieu of damages incurred in
the event of breach of this Agreement.
8.3 Amendment. This Agreement may be amended by the parties at any time
before or after obtaining Viasoft Shareholder Approval, if Viasoft Shareholder
Approval is required by law; provided, however, that after any required Viasoft
Shareholder Approval, there will not be made any amendment that by law requires
further approval by such shareholders without the further approval of such
shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
8.4 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
8.3, waive compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
will be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise will not constitute a waiver of those
rights.
8.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 8.1, an amendment of this
Agreement pursuant to Section 8.3 or an extension or waiver pursuant to Section
8.4 will, in order to be effective, require in the case of Compuware, Merger Sub
or Viasoft, action by its Board of Directors or the duly authorized designee of
its Board of Directors; provided, however, that in the event that Merger Sub's
designees are appointed or elected to the Board of Directors of Viasoft as
provided in Section 6.7, after the acceptance for payment of shares of Viasoft
Common Stock pursuant to the Offer and prior to the Effective Time, the
affirmative vote of the Continuing Directors will be required by Viasoft to (i)
amend or terminate this Agreement by Viasoft, (ii) exercise or waive any of
Viasoft's rights or remedies under this Agreement or (iii) extend the time for
performance or waiver of Compuware's and Merger Sub's respective obligations
under this Agreement.
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ARTICLE IX
GENERAL PROVISIONS
9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement will survive the Effective Time. This Section 9.1
will not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
9.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed given
if delivered personally, telecopied (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as will be specified by like notice):
(a) if to Compuware or Merger Sub, to
Compuware Corporation
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: 000-000-0000
with copies to:
Compuware Corporation
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: 000-000-0000
(b) if to Viasoft, to
Viasoft, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: 0-000-000-0000
with a copy to:
Xxxxxx Xxxxxxx, P.A.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: 0-000-000-0000
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9.3 Definitions. For purposes of this Agreement:
"Acquisition Event" is defined in Section 6.8(b)(ii) of this
Agreement.
"Affiliate" of any person means another person that directly
or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person.
"Certificates" is defined in Section 3.2(c) of this Agreement.
"Closing Date" is defined in Section 2.2 of this Agreement.
"Compuware" is defined in the introductory paragraph of this
Agreement.
"Confidentiality Agreement" is defined in Section 6.2 of this
Agreement.
"Confidential Information" is defined in Section 4.1(h)(ix) of
this Agreement.
"Continuing Directors" is defined in Section 6.7 of this
Agreement.
"Viasoft" is defined in the introductory paragraph of this
Agreement.
"Viasoft Affiliate" is defined in Section 4.1(k)(iii) of this
Agreement.
"Viasoft Balance Sheet" is defined in Section 4.1(l)(i) of
this Agreement.
"Viasoft Common Stock" is defined in Recital A of this
Agreement.
"Viasoft Disclosure Letter" is defined in Section 4.1 of this
Agreement.
"Viasoft Employee Plans" is defined in Section 4.1(k)(iv) of
this Agreement.
"Viasoft Option Plans" is defined in Section 4.1(c) of this
Agreement.
"Viasoft Preferred Stock" is defined in Section 4.1(c) of this
Agreement.
"Viasoft Shareholder Approval" is defined in Section 4.1(d) of
this Agreement.
"Dissenting Shareholder" is defined in Section 3.1(d) of this
Agreement.
"Dissenting Shares" is defined in Section 3.1(d) of this
Agreement.
"DGCL" is defined in Section 2.1 of this Agreement.
"Effective Time" is defined in Section 2.3 of this Agreement.
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"Employment and Noncompetition Agreements" is defined in
Section 6.5(b) of this Agreement.
"Environmental Laws" is defined in Section 4.1(n)(ii) of this
Agreement.
"ERISA" is defined in Section 4.1(k)(iii) of this Agreement.
"Exchange Act" is defined in Section 1.1(a) of this Agreement.
"Expiration Date" is defined in Section 1.1(a) of this
Agreement.
"Filed SEC Documents" is defined in Section 4.1(g) of this
Agreement.
"Final Viasoft Exercise Date" is defined in Section 6.4(b) of
this Agreement.
"GAAP" is defined in Section 4.1(e) of this Agreement.
"Government Contract Party" is defined in Section 4.1(v) of
this Agreement.
"Governmental Entity" is defined in Section 4.1(d) of this
Agreement.
"Hazardous Material" is defined in Section 4.1(n)(iii) of this
Agreement.
"HSR Act" is defined in Section 4.1(d) of this Agreement.
"Indemnified Party" is defined in Section 6.6(a) of this
Agreement.
"Information Statement" is defined in Section 4.1(f) of this
Agreement.
"Intellectual Property" is defined in Section 4.1(h) of this
Agreement.
"IRCA" is defined in Section 4.1(u) of this Agreement.
"IRS" is defined in Section 4.1(k)(iii) of this Agreement.
"Liens" is defined in Section 4.1(b) of this Agreement.
"Material Adverse Change" or "Material Adverse Effect" means,
when used in connection with Viasoft or in connection with Viasoft and
its subsidiaries, any change or effect that is or would be materially
adverse to Viasoft and its subsidiaries, taken as a whole, taking into
account the business, properties, assets, employees, financial
condition or results of operations of Viasoft and its subsidiaries,
excluding those changes, effects and developments that directly result
from (i) the announcement of the Offer or the Merger, (ii) any act or
omission of Compuware or Merger Sub, (iii) general economic conditions,
or (iv)
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conditions generally affecting the industry in which Viasoft
competes (provided that such conditions do not materially and adversely
affect Viasoft disproportionately); provided that in any litigation
regarding this definition where the principal change or effect at issue
involves the termination for any reason of the employment of Viasoft's
or its subsidiaries' employees, Viasoft will be required to sustain the
burden of proving by clear and convincing evidence that the exclusion
set forth in clause (i) or (ii) of this sentence is applicable.
"Material Customer" is defined in Section 4.1(x) of this
Agreement.
"Merger" is defined in Recital B of this Agreement.
"Merger Consideration" is defined in Section 3.1(c) of this
Agreement.
"Merger Sub" is defined in the introductory paragraph of this
Agreement.
"Minimum Tender Condition" is defined in Exhibit A attached to
this Agreement.
"Notice of Superior Proposal" is defined in Section 6.1(c) of
this Agreement.
"Offer" is defined in Recital A of this Agreement.
"Offer Documents" is defined in Section 1.1(b) of this
Agreement.
"Offer Price" is defined in Recital A of this Agreement.
"Options" is defined in Section 6.4(a) of this Agreement.
"Paying Agent" is defined in Section 3.2(a) of this Agreement.
"Permits" is defined in Section 4.1(n)(i) of this Agreement.
"Person" means an individual, corporation, limited liability
company, partnership, joint venture, association, trust, unincorporated
organization or other entity.
"Pre-Offer Price" is defined in Section 8.2 of this Agreement.
"Proxy Statement" is defined in Section 4.1(d) of this
Agreement.
"Returns" is defined in Section 4.1(l)(v) of this Agreement.
"Revenue Code" is defined in Section 4.1(k)(iii) of this
Agreement.
"Rights" is defined in the Recitals Section of this Agreement.
"Rights Plan" is defined in Section 4.1(o) of this Agreement.
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"Schedule 14D-9" is defined in Section 1.2(b) of this
Agreement.
"SEC" is defined in Section 1.1(b) of this Agreement.
"Securities Act" is defined in Section 4.1(e) of this
Agreement.
"Share" is defined in Recital A of this Agreement.
"Shareholders Meeting" is defined in Section 6.1(a) of this
Agreement.
"Short-Form Merger" is defined in Section 2.8 of this
Agreement.
"Stock Purchase Plan" is defined in Section 4.1(c) of this
Agreement.
"Subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person.
"Superior proposal" is defined in Section 6.1 of this
Agreement.
"Surviving Corporation" is defined in Section 2.1 of this
Agreement.
"Systems" is defined in Section 4.1(h)(x) of this Agreement.
"Takeover proposal" is defined in Section 5.2 of this
Agreement.
"Tax" or "Taxes" is defined in Section 4.1(l)(v) of this
Agreement.
"Third Party Intellectual Property Rights" is defined in
Section 4.1(h)(ii) of this Agreement.
"WARN Act" is defined in Section 4.1(u) of this Agreement.
9.4 Interpretation. When a reference is made in this Agreement to
an Article, a Section, Exhibit or Schedule, such reference is to an Article or a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and will 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 will be deemed to be followed by
the words "without limitation." The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement will refer to this Agreement
as a whole and not to any particular provision of this Agreement. All terms
defined in this Agreement will have the defined meanings when used in any
certificate or other
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document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. References to a person are also to its
permitted successors and assigns. References to a law or statute in this
Agreement include all amendments and modifications to such law or statute, and
all rules and regulations promulgated thereunder. References to Viasoft in this
Agreement refer also to Viasoft's subsidiaries unless the context would clearly
indicate otherwise.
9.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
9.6 Entire Agreement; No Third-Party Beneficiaries. This Agreement, the
exhibits and schedules hereto, the Viasoft Disclosure Letter, the Shareholder
Tender and Voting Agreement, and the Confidentiality Agreement constitute the
entire agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement and, other than Sections 6.6 and 6.10, are not intended to confer upon
any person other than the parties any rights or remedies hereunder.
9.7 Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflict of laws thereof.
9.8 Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement will be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties, except that Merger Sub may assign, in its sole
discretion, any of or all of its rights, interests and obligations under this
Agreement to Compuware or to any direct or indirect wholly-owned subsidiary of
Compuware, but no such assignment will relieve Merger Sub and Compuware of any
of its obligations under this Agreement. This Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
9.9 Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Michigan or in the State of Delaware or in Michigan or
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction and venue of any federal
court located in the State of Michigan or the State of Delaware or any Michigan
or Delaware state court in the event any dispute arises out of this Agreement or
any of the transactions contemplated by this Agreement, (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction or choice of venue by
motion or other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agreement or
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any of the transactions contemplated by this Agreement in any court other than a
federal or state court sitting in the State of Michigan or in the State of
Delaware.
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IN WITNESS WHEREOF, Compuware, Merger Sub and Viasoft have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
COMPUWARE CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
CV ACQUISITION, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
VIASOFT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive
Officer
56
EXHIBIT A
OFFER
Notwithstanding any other term of the Offer or this Agreement, Merger
Sub will not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Merger Sub's obligation to pay for or return tendered shares of
Viasoft Common Stock after the termination or withdrawal of the Offer), to pay
for any shares of Viasoft Common Stock tendered pursuant to the Offer unless (i)
there will have been validly tendered and not withdrawn prior to the expiration
of the Offer that number of shares of Viasoft Common Stock which would represent
more than 50% of the fully-diluted shares of Viasoft Common Stock outstanding at
the close of business on the business day immediately preceding the day on which
the Offer will expire or terminate (the "Minimum Tender Condition") and (ii) any
waiting period under the HSR Act applicable to the purchase of shares of Viasoft
Common Stock pursuant to the Offer will have expired or been terminated.
Furthermore, notwithstanding any other term of the Offer or this
Agreement, Merger Sub will not be required to accept for payment or, subject as
aforesaid, to pay for any shares of Viasoft Common Stock not theretofore
accepted for payment or paid for, and may terminate or amend the Offer, if, upon
the scheduled expiration date of the Offer (as extended) and before the
acceptance of such shares for payment or the payment therefor, any of the
following conditions exists and is continuing:
(a) there will be pending or overtly threatened any suit,
action or proceeding brought by or on behalf of any Governmental Entity (or the
staff of the Federal Trade Commission or the staff of the Antitrust Division of
the Department of Justice will have recommended the commencement of such), any
shareholder of Viasoft or any other person or party (but only if such
shareholder suit, action or proceeding is deemed by Compuware to have a
reasonable likelihood of success) directly or indirectly (i) challenging the
acquisition by Compuware or Merger Sub of any shares of Viasoft Common Stock,
seeking to restrain or prohibit the making or consummation of the Offer or the
Merger or the performance of any of the other transactions contemplated by this
Agreement, or alleging that any such acquisition or other transaction relates
to, involves or constitutes a breach of fiduciary duty by Viasoft's directors or
a violation of federal securities law or applicable corporate law, (ii) seeking
to prohibit or limit the ownership or operation by Viasoft, Compuware or any of
their respective subsidiaries of a material portion of the business or assets of
Viasoft and its subsidiaries, taken as a whole, or Compuware and its
subsidiaries, taken as a whole, or to compel Viasoft or Compuware to dispose of
or hold separate any material portion of the business or assets of Viasoft and
its subsidiaries, taken as a whole, or Compuware and its subsidiaries, taken as
a whole, as a result of the Offer or any of the other transactions contemplated
by this Agreement, (iii) seeking to impose material limitations on the ability
of Compuware or Merger Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Viasoft Common Stock accepted for payment pursuant
to the Offer including without limitation the right to vote Viasoft Common Stock
accepted for payment by it on all matters properly presented to the shareholders
of Viasoft, (iv) seeking to prohibit Compuware or any of its subsidiaries from
effectively managing or controlling
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in any material respect the business or operations of Viasoft and its
subsidiaries taken as a whole, or (v) seeking to impose a material condition to
the Offer, Merger or Agreement which would be adverse to Compuware;
(b) there will be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger, or any other action will be taken by any
Governmental Entity or court, other than the application to the Offer or the
Merger of applicable waiting periods under the HSR Act, that is reasonably
likely to result, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above;
(c) there will have occurred any Material Adverse Change in
Viasoft and its subsidiaries taken as a whole or any event that is reasonably
likely to result in a Material Adverse Change in Viasoft and its subsidiaries
taken as a whole;
(d) (i) Viasoft's Board of Directors or any committee thereof
will have failed to recommend the Offer, the Merger, this Agreement, or Viasoft
Shareholder Approval, including any failure to include such recommendation in
the Schedule 14D-9 or the Proxy Statement, or will have so resolved; (ii)
Viasoft's Board of Directors or any committee thereof will have withdrawn or
modified (including by amendment of the Schedule 14D-9 or Proxy Statement) in a
manner adverse to Compuware or Merger Sub its approval or recommendation of the
Offer, the Merger, this Agreement, or Viasoft Shareholder Approval, will have
approved or recommended any takeover proposal (including a superior proposal),
or will have resolved to do any of the foregoing; (iii) Viasoft will have
entered into any letter of intent or similar document, agreement or commitment
with respect to any takeover proposal (including a superior proposal) or
Viasoft's Board of Directors or any committee thereof will have resolved to do
so; (iv) Viasoft's Board of Directors or any committee thereof upon a request to
reaffirm Viasoft's approval or recommendation of the Offer, the Merger or this
Agreement, will have failed to do so within two business days after such request
is made or will have so resolved; or (v) a tender or exchange offer relating to
securities of Viasoft will have been commenced by a person unaffiliated with
Compuware, and Viasoft will not have sent to its securityholders pursuant to
Rule 14e-2 promulgated under the Exchange Act, within 10 business days after
such tender or exchange offer is first published sent or given, a statement
disclosing that Viasoft recommends rejection of such tender or exchange offer;
(e) any of the representations and warranties of Viasoft set
forth in this Agreement will have failed to be true and correct in any material
respect as of the date of the Agreement or will have ceased to be true and
correct in any material respect at any time thereafter;
(f) Viasoft will have breached or failed to perform in any
material respect any obligation or to comply in any material respect with any
agreement or covenant of Viasoft to be performed or complied with by it;
provided that if any such breach or failure (other than a breach of Sections 5.2
or 6.1 or any other breach that has caused irreparable harm) is curable by
Viasoft through the exercise of its reasonable efforts, then Compuware may not
terminate the Offer under this subsection (f) until ten business days after
written notice thereof has been given to Viasoft by Compuware or Merger Sub and
unless at such time the matter has not been cured;
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(g) this Agreement will have been terminated in accordance
with its terms;
(h) there will have occurred (1) any general suspension of
trading in, or limitation on prices for, securities on the Nasdaq National
Market, (2) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or not mandatory),
(3) the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States and having
a Material Adverse Effect or materially adversely affecting (or materially
delaying) the consummation of the Offer, (4) any limitation or proposed
limitation (whether or not mandatory) by any U.S. governmental authority or
agency, or any other event, that materially adversely affects generally the
extension of credit by banks or other financial institutions, or (5) in the case
of any of the situations described in clauses (1) through (4) inclusive existing
at the date of commencement of the Offer, a material escalation or worsening
thereof;
(i) any person (which includes a "person" as such term is
defined in Section 13(d)(3) of the Exchange Act) other than Merger Sub, any of
its affiliates, or any group of which any of them is a member, (1) will have
acquired beneficial ownership of more than 10% of the outstanding shares of
Viasoft Common Stock, (2) will have entered into a definitive agreement or an
agreement in principle with Viasoft with respect to a tender offer or exchange
offer for any shares of Viasoft Common Stock or merger, consolidation or other
business combination with or involving Viasoft or any of its subsidiaries or (3)
will have otherwise announced a tender offer with respect to shares of Viasoft
Common Stock; provided that upon satisfaction and maintenance of the Minimum
Tender Condition, this condition (i) will only consist of clause (2) hereof;
(j) any bankruptcy proceedings will have been instituted with
respect to Viasoft and not dismissed;
(k) all third party consents, the failure of which to obtain
would have a Material Adverse Effect on Viasoft, will not have been obtained;
which, in the sole judgment of Merger Sub or Compuware, in any such case, and
regardless of the circumstances giving rise to any such condition (other than
any action or inaction by Compuware or any of its subsidiaries which constitutes
a breach of this Agreement), makes it inadvisable to proceed with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Merger Sub and
Compuware and their respective affiliates and may be asserted by Merger Sub or
Compuware regardless of the circumstances giving rise to such condition (other
than any action or inaction by Compuware or any of its Subsidiaries which
constitutes a breach of this Agreement) or may be waived by Merger Sub and
Compuware in whole or in part at any time and from time to time in their sole
discretion (except for the Minimum Tender Condition). The failure by Compuware,
Merger Sub or any other affiliate of Compuware at any time to exercise any of
the foregoing rights will not be deemed a waiver of any such right, the waiver
of any such right with respect to particular facts and circumstances will not be
deemed a waiver with respect to any other facts and circumstances and each such
right will be deemed an ongoing right that may be asserted at any time and from
time to time.
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