EXECUTION COPY
EXHIBIT 2.1
Agreement And Plan Of Merger
By and Among
Nemetschek AKTIENGESELLSHAFT,
DGI ACQUISITION CORP.,
and
diehl graphsoft, inc.
Dated as of February 18, 2000
53823/9
iv
Table of Contents
Page
Article I
DEFINITIONS
Section 1.01. Terms Defined in this Section...............................1
Article II
THE MERGER
Section 2.01. The Merger; Effective Time..................................7
Section 2.02. Closing.....................................................7
Section 2.03. Effective Time..............................................7
Section 2.04. Effect of the Merger........................................7
Article III
THE SURVIVING CORPoration
Section 3.01. Name........................................................7
Section 3.02. Articles of Incorporation and Bylaws........................7
Section 3.03. Officers and Directors......................................8
Section 3.04. Additional Actions..........................................8
Article IV
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF SECURITIES
Section 4.01. Merger Consideration........................................8
Section 4.02. Payment.....................................................9
Section 4.03. Closing of the Company's Transfer Books....................10
Section 4.04. No Splits, Etc.............................................10
Section 4.05. Treatment of Options.......................................11
Section 4.06. Lost, Stolen or Destroyed Certificates.....................11
Section 4.07. Dissenting Shares..........................................11
Article V
REPRESENTATIONS AND WARRANTIES OF the Company
Section 5.01. Organization...............................................11
Section 5.02. Authorization; Enforceability..............................12
Section 5.03. Conflicts..................................................12
Section 5.04. Consents and Approvals.....................................12
Section 5.05. Anti-takeover Provisions Inapplicable......................13
Section 5.06. Capitalization.............................................13
Section 5.07. Subsidiaries. .............................................13
Section 5.08. Financial Statements; No Material Adverse Change...........14
Section 5.09. SEC Reports................................................15
Section 5.10. Compliance with Laws; Permits..............................15
Section 5.11. Litigation.................................................15
Section 5.12. Compensation and Employee Matters..........................16
Section 5.13. Employee Benefit Plans; Labor Matters......................16
Section 5.14. Tax Matters................................................18
Section 5.15. Real Property Owned or Leased..............................19
Section 5.16. Undisclosed Liabilities....................................19
Section 5.17. Absence of Certain Changes or Events.......................19
Section 5.18. Assets.....................................................20
Section 5.19. Books and Records. ........................................21
Section 5.20. Proxy Statement............................................21
Section 5.21. Brokers and Finders........................................21
Section 5.22. Full Disclosure............................................21
Section 5.23. Environmental Matters......................................22
Section 5.24. Insurance Disclosure.......................................22
Section 5.25. Year 2000 Compliance.......................................23
Section 5.26. Material Agreements........................................23
Section 5.27. Intellectual Property......................................23
Section 5.28. Absence of Certain Business Practices......................25
Section 5.29. Affiliate Transactions.....................................26
Article VI
REPRESENTATIONS AND WARRANTIES OF NEMETSCHEK AND ACQUISITION
Section 6.01. Organization...............................................26
Section 6.02. Authorization; Enforceability..............................26
Section 6.03. Conflicts..................................................27
Section 6.04. Consents and Approvals.....................................27
Section 6.05. Anti-takeover Provisions Inapplicable......................27
Section 6.06. No Prior Activities; Assets of Acquisition.................27
Section 6.07. Compliance with Laws.......................................27
Section 6.08. Litigation.................................................28
Section 6.09. Proxy Statement............................................28
Section 6.10. Financing..................................................28
Section 6.11. Brokers and Finders. ......................................28
Article VII
COVENANTS AND AGREEMENTS OF THE PARTIES
Section 7.01. Conduct of the Business....................................29
Section 7.02. Officers and Employees.....................................31
Section 7.03. Meeting of Stockholders....................................32
Section 7.04. Proxy Materials............................................32
Section 7.05. Filings; Other Action......................................32
Section 7.06. Access to Information......................................33
Section 7.07. Intellectual Property Rights...............................33
Section 7.08. Notice of Certain Events...................................33
Section 7.09. Certain Actions. ..........................................34
Section 7.10. Current Information........................................35
Section 7.11. Indemnification............................................35
Section 7.12. Stock Transfer Agreement...................................36
Article VIII
CONDITIONS TO THE MERGERS
Section 8.01. Conditions to Each Partys Obligations......................36
Section 8.02. Additional Conditions to Obligation of Nemetschek and
Acquisition................................................37
Section 8.03. Additional Conditions to Obligation of the Company.........39
Article IX
TERMINATION
Section 9.01. Termination................................................40
Section 9.02. Notice.....................................................41
Section 9.03. Effect of Termination......................................41
Section 9.04. Termination Fee............................................41
Article X
GENERAL PROVISIONS
Section 10.01. Expenses...................................................42
Section 10.02. Notices, Etc...............................................42
Section 10.03. Binding Effect; No Assignment..............................43
Section 10.04. Entire Agreement...........................................43
Section 10.05. Remedies Cumulative; Specific Performance..................43
Section 10.06. Waiver.....................................................43
Section 10.07. No Third-Party Beneficiaries...............................44
Section 10.08. Governing Law..............................................44
Section 10.09. Section Headings; Interpretation...........................44
Section 10.10. Severability...............................................44
Section 10.11. Amendment..................................................44
Section 10.12. Further Assurances.........................................45
Section 10.13. Public Announcements.......................................45
Section 10.14. Exhibits and Schedules.....................................45
Section 10.15. Counterparts...............................................45
Section 10.16. Non-Survival of Representations and Warranties.............45
EXHIBITS
Exhibit A: Employment Agreement
Exhibit B: Escrow Agreement
Exhibit C: Support Agreement
SCHEDULES
Schedule 5.07 Subsidiaries
Schedule 5.13: Employee Benefit Plans
Schedule 5.14: Tax Matters
Schedule 5.15: Real Property
Schedule 5.16: Undisclosed Liabilities
Schedule 5.17: Absence of Certain Changes
Schedule 5.18: Assets
Schedule 5.23: Environmental
Schedule 5.26: Material Agreements
Schedule 5.27: Intellectual Properties
Schedule 5.29: Affiliate Transactions
3823/9
45
53823/9
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this Agreement ) is dated as of February
18, 2000 and is by and between NEMETSCHEK AKTIENGESELLSHAFT, a German
corporation ( Nemetschek ), DGI ACQUISITION CORP., a Maryland corporation (
Acquisition ), and DIEHL GRAPHSOFT, INC., a Maryland corporation ( the
Company ).
RECITALS
WHEREAS, the respective Board of Directors of each of Nemetschek,
Acquisition, and the Company has determined that it is in the best
interests of Nemetschek, Acquisition and the Company and their respective
stockholders for Acquisition and the Company to merge pursuant to
applicable law, with the Company being the surviving entity; and
WHEREAS, Nemetschek, Acquisition, and the Company desire to make certain
representations, warranties, covenants, and agreements in connection with
the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement, intending to be legally bound,
agree as follows:
DEFINITIONS
Section 1.01. ....Terms Defined in this Section. As used in this Agreement,
the following terms shall have the respective meanings set forth below:
Acquisition shall have the meaning set forth in the Preamble.
Acquisition Proposal shall have the meaning set forth in Section 7.09(a).
Affiliate shall have the meaning set forth in Rule 12b-2 under the Exchange
Act.
Agreement shall have the meaning set forth in the Preamble.
Articles of Merger shall mean the articles of merger with respect to the
Merger containing the provisions required by, and executed in accordance
with, MGCL Sections 3-107 and 3-109.
Authorization shall mean any consent, approval or authorization of,
expiration or termination of any waiting period requirement (including
pursuant to the HSR Act) by, or filing, registration, qualification,
declaration or designation with, any Governmental Authority.
Business Combination shall have the meaning set forth in Section 4.04.
Business Day shall mean any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are
authorized or required by law, regulation or executive order to close in
The Federal Republic of Germany or in the State of Maryland.
Company Permits shall have the meaning set forth in Section 5.10
Company Common Stock shall mean the common stock, par value 0.01 per share,
of the Company.
Company Stockholders shall mean the stockholders of Company Common Stock.
Closing shall mean the closing of the Merger.
Closing Date shall mean the date on which the Closing occurs.
Code shall mean the Internal Revenue Code of 1986, as amended.
Company shall have the meaning set forth in the Preamble.
Company Option Plan shall have the meaning set forth in Section 5.06.
Disclosure Schedule shall mean the schedule executed and delivered by the
Company and Nemetschek and Acquisition concurrently with the execution
hereof and that sets forth exceptions to the representations and warranties
contained herein and contains certain other information required hereby.
Disbursing Agent shall have the meaning set forth in Section 4.02.
Dissenting Shares shall mean shares of Company Common Stock outstanding
immediately prior to the Effective Time and held by holders who have not
voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such shares in accordance with the applicable
provisions of the MGCL.
Effective Time shall have the meaning set forth in Section 2.03.
Employment Agreement shall mean that certain Employment Agreement, dated
the date of the Effective Time, and substantially in the form of Exhibit A.
Environmental Claim shall mean any written notice, claim, demand, action,
suit, complaint, proceeding that has been served upon or delivered or
otherwise transmitted to the party in question, by any Person alleging
material Environmental Liabilities or potential material Environmental
Liabilities.
Environmental Laws shall mean all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability
or standards of conduct for or relating to the regulation and protection of
human health, safety, the environment and natural resources (including
ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental
Laws include the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601 et seq.) ( CERCLA ); the Hazardous
Materials Transportation Authorization Act of 1994 (49 U.S.C. 5101 et
seq.); the Federal Insecticide Fungicide, and Rodenticide Act (7 U.S.C.
136 et seq.); the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.); the
Toxic Substance Control Act (15 U.S.C. 2601 et seq.); the Clean Air Act
(42 U.S.C. 7401 et seq.); the Occupational Safety and Health Act (29
U.S.C. 651 et seq.); and the Safe Drinking Water Act (42 U.S.C.
300(f) et seq.), each as from time to time amended, and any and all
regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.
Environmental Liabilities shall mean, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation
and maintenance costs, losses, damages, punitive damages, property damages,
natural resource damages, consequential damages, treble damages, costs and
expenses (including all fees, disbursements and expenses of counsel,
experts and consultants), fines, penalties, sanctions and interest incurred
as a result of or related to any claim, suit, action, investigation,
proceeding or demand by any Person, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute or
common law, including any arising under or related to any Environmental
Laws, Environmental Permits, or in connection with any Release or
threatened Release or presence of a Hazardous Material whether on, at, in,
under, from or about or in the vicinity of any real or personal property.
Environmental Permits shall mean all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental
Authority under any Environmental Laws.
ERISA shall have the meaning set forth in Section 5.13(a).
ERISA Affiliate shall have the meaning set forth in Section 5.13.
Escrow Agreement shall mean that certain Escrow Agreement, dated the
Closing Date and substantially in the form of Exhibit B.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended and
the rules and regulations promulgated thereunder and as in effect from time
to time.
FBW shall mean Ferris, Baker Watts, Incorporated.
Financial Statements shall have the meaning set forth in Section 5.08(a).
Governmental Authority shall mean any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any self-regulating organization, securities
exchange or other securities trading system.
Hazardous Material shall mean any substance, material or waste that is
regulated by or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance which is (a)
defined as a solid waste, hazardous waste, hazardous material, hazardous
substance, extremely hazardous waste, restricted hazardous waste,
pollutant, contaminant, hazardous constituent, special waste, toxic
substance or other similar term or phrase under any Environmental Laws, (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
HSR Act shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended and the rules and regulations promulgated thereunder and
as in effect from time to time.
Intellectual Property shall mean any and all patents, patent applications,
trademarks, trademark applications and registrations, service marks,
service mark applications and registrations, tradenames, tradename
applications and registrations, trade dress, Internet domain names, URL's,
copyrights, copyright applications and registrations, mask work, mask work
applications, licenses, logos, corporate and partnership names, and
customer lists, proprietary processes, formulae, inventions, trade secrets,
secret processes, computer programs, databases, data collections, know-how,
confidential information, development tools and other proprietary rights,
and all documentation and media constituting, describing or relating to the
above, including, but not limited to, manuals, memoranda, know-how,
notebooks, software, records and disclosures, and any similar or equivalent
rights to any of the foregoing anywhere in the world.
Internal MIS Systems and Facilities shall mean any computer software and
systems (including hardware, firmware, operating system software,
utilities, and applications software) used in the ordinary course of the
applicable parties business by or on behalf of such party, including the
Company's payroll, accounting, billing/receivables, inventory, asset
tracking, customer service, human resources, e-mail systems, and Intranets.
Knowledge shall mean the terms knowledge and aware and any derivatives
thereof and, when applied to any party to this Agreement, shall refer to
the knowledge or awareness, as the case may be, which such party or, if
applicable, any director, senior or executive officer thereof (or
consultant performing similar functions) has, or reasonably should have
had, given such partys official position and after reasonable due inquiry
of the other officers, directors, and/or employees of such party.
Lien shall mean any mortgage, pledge, hypothecation, assignment,
encumbrance, claim, easement, transfer restriction, lien (statutory or
otherwise) or security agreement of any kind or nature whatsoever.
Material Adverse Effect shall mean as to any Person, a material adverse
effect on or change in the business, properties, operations, assets or
condition (financial or other) or prospects of such Person that is, or that
a reasonably prudent Person would believe will be, materially adverse to
the business, properties, operations, assets, or conditions (financial or
otherwise) or prospects of such Person.
Material Agreement shall mean any contract, lease, restriction, agreement,
instrument or commitment to which the Company is a party or by which its
properties are bound (i) which provides for the Company to receive or
commits the Company to expend, 25,000 (including cash or the fair market
value of non-cash assets) or more in the aggregate in any 12-month period
or 25,000 or more in the aggregate over any period, (ii) which if breached
by any party thereto would result in liability or loss to the Company of
25,000 or more in the aggregate, or (iii) which is a stockholders agreement
relating to the Company, partnership agreement, joint venture agreement or
other agreement pursuant to which the Company has an equity interest in any
Person or any Person has an equity interest in the Company.
Merger Consideration shall have the meaning set forth in Section 4.01.
MGCL shall mean the General Corporation Law of the State of Maryland, as
amended and in effect from time to time.
Merger shall mean the merger of Acquisition with and into the Company.
Nemetschek shall have the meaning set forth in the Preamble.
Option shall have the meaning set forth in Section 4.05.
Order shall have the meaning set forth in Section 8.01(e).
Ordinary course of business shall mean the ordinary course of business
consistent with past practice (including with respect to quantity and
frequency).
PBGC shall have the meaning set forth in Section 5.13.
Permitted Liens shall mean (a) statutory Liens, including mechanics,
carriers, workmens, repairmens and other similar liens, arising or
incurred in the ordinary course of business with respect to which the
underlying obligations are not delinquent or the validity of which is
being contested in good faith by appropriate proceedings, (b) Liens
for current taxes not yet due and payable or for taxes the validity of
which is being contested in good faith by appropriate proceedings, and
(c) Liens and defects in title that in the aggregate do not have a
Material Adverse Effect.
Person shall mean any individual or corporation, company, partnership,
trust, incorporated or unincorporated association, joint stock
company, Governmental Authority, joint venture, or other legal entity
of any kind.
Plans shall have the meaning set forth in Section 5.13.
Proxy Statement shall have the meaning set forth in Section 5.04.
Release shall mean any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or
migration of Hazardous Material in the indoor or outdoor environment,
including the movement of Hazardous Material through or in the air,
soil, surface water, ground water or property.
SDAT shall mean the State Department of Assessment and Taxation of the
State of Maryland.
SEC shall mean the Securities and Exchange Commission and any
successor entity.
SEC Documents shall have the meaning set forth in Section 5.09.
Securities Act shall mean the Securities Act of 1933, as amended and
the rules and regulations promulgated thereunder and as in effect from
time to time.
Stockholders Meeting shall have the meaning set forth in Section 5.04.
Subsidiary shall mean as to any Person, any other Person of which at
the time of determination the first Person owns or controls, directly
or indirectly, more than 50% of the outstanding common stock.
Support Agreement shall mean that certain Support Agreement, dated the
date hereof, and substantially in the form of Exhibit C.
Surviving Corporation shall have the meaning set forth in Section
2.03(b).
Tax or Taxes means all net income, capital gains, gross income, gross
receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, or windfall profit taxes, customs
duties, or other taxes, fees, assessments, or charges of any kind
whatsoever, together with any interest and any penalties, additions to
tax, or additional amounts imposed by any Taxing Authority.
Tax Return shall mean any return, declaration of estimated tax, tax
report, customs declaration, claim for refund or information return or
statement relating to Taxes, including any amendment thereto.
Taxing Authority shall have the meaning set forth in Section 5.14(a).
Year 2000 Compliant means that (1) the products, services, or other
item(s) at issue accurately process, provide and/or receive all
date/time data (including calculating, comparing, sequencing,
processing, and outputting) within, from, into, and between centuries
(including the twentieth and twenty-first centuries and the years 1999
and 2000), including leap year calculations, and (2) neither the
performance nor the functionality of the products, services, and other
item(s) at issue will be affected by any dates/times prior to, on,
after, or spanning January 1, 2000 except as could not reasonably be
expected to have a Material Adverse Effect as to the party at issue.
THE MERGER
Section 1.02. ....The Merger; Effective Time. Subject to the terms and
conditions set forth in this Agreement, at the Effective Time,
Acquisition shall be merged with and into the Company in accordance
with Section 3-102 of the MGCL, with the Company being the surviving
corporation, whereupon the separate corporate existence of Acquisition
shall cease and the Company shall continue its corporate existence
under the laws of the State of Maryland (the Merger ).
Section 1.03. ....Closing. Subject to Article X and the fulfillment or
waiver of the conditions set forth in Article VIII, the Closing shall
take place at (i) the offices of Brown & Wood llp, 1666 K Street,
N.W., Washington, D.C., at 10:00 a.m., as promptly as practical (and
in any event within two Business Days) following the fulfillment or
waiver of the conditions set forth in Article VIII (other than
conditions which by their nature are intended to be fulfilled at the
Closing), or (ii) such other place or time or on such other date as
the parties may mutually agree in writing or as the parties may
mutually agree is necessary to permit the fulfillment or waiver of the
conditions set forth in Article VIII.
Section 1.04. ....Effective Time. (a) In accordance with the
applicable provisions of the MGCL, the Merger shall become effective
(the Effective Time ) on the date and at the time of the filing of the
Articles of Merger with respect to the Merger with the State
Department of Assessment and Taxation (the SDAT ) of the State of
Maryland, or at such later time, not later than five Business Days
thereafter, as may be specified in the Articles of Merger.
(b) The Company, as the surviving corporation of the Merger, shall be
referred to herein as Surviving Corporation. In accordance with the
applicable provisions of the MGCL, all the rights, privileges, powers,
immunities, purposes and franchises of the Company and Acquisition
shall vest in Surviving Corporation and all debts, liabilities,
obligations, and duties of the Company and Acquisition shall become
the debts, liabilities, obligations, and duties of Surviving
Corporation. For Tax purposes, the parties agree that the Effective
Time shall be deemed to occur after the close of business on the date
on which the Effective Time occurs, and no party hereto shall take a
position inconsistent therewith, except as may be required by law.
Section 1.05. ....Effect of the Merger. The Merger shall have the
effects set forth in Section 3-114 of the MGCL.
THE SURVIVING CORPoration
Section 1.06. ....Name. The name of the Surviving Corporation shall be
Diehl Graphsoft, Inc. or such other name as may be approved by the
stockholders of the Surviving Corporation.
Section 1.07. ....Articles of Incorporation and Bylaws. The Articles
of Incorporation and Bylaws of the Company as in effect immediately
prior to the Effective Time shall be the Articles of Incorporation and
Bylaws of the Surviving Corporation unless and until amended in
accordance with their terms and applicable law.
Section 1.08. ....Officers and Directors. (a) The officers of the
Company immediately prior to the Effective Time shall continue as the
officers of Surviving Corporation and shall remain officers thereof
until their successors are duly elected and qualified or their prior
resignation, removal or death.
(b) The directors of Acquisition immediately prior to the Effective
Time shall continue as the directors of the Surviving Corporation and
shall remain directors thereof until their successors are duly elected
and qualified or their prior resignation, removal or death.
Section 1.09. ....Additional Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised
that any deeds, bills of sale, assignments, assurances or any other
actions, things or documentation is necessary or desirable to vest,
perfect or confirm of record or otherwise in the Surviving
Corporation, its respective right, title or interest in, to or under
any of the rights, properties or assets of Acquisition, or otherwise
to carry out the terms or purposes of this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute
and deliver, in the name and on behalf of the Company or Acquisition
all such deeds, bills of sale, assignments and assurances or other
documentation and to take and do, in the name and on behalf of the
Company or Acquisition all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out the purpose of
this Agreement.
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SECURITIES
Section 1.10. ....Merger Consideration. As of the Effective Time, by
virtue of the Merger and without any action on the part of any
shareholder of the Company or Acquisition:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time that is held by Nemetschek,
the Company, or any wholly-owned subsidiary of Nemetschek (including
Acquisition) or the Company shall be cancelled and retired and shall
cease to exist, and no consideration shall be delivered in exchange
therefor.
(b) Each share of Company Common Stock held in treasury by the Company
immediately prior to the Effective Time shall, by virtue of the
Merger, be cancelled and retired and cease to exist, without any
conversions thereof and no consideration shall be issued in exchange
therefor.
(c) Each issued and outstanding share of Company Common Stock, other
than those to which Section 4.01(a)-(b) applies and other than any
Dissenting Shares shall be converted into and represent the right to
receive 9.50 cash, without interest thereon (such amount of cash being
referred to herein as the Merger Consideration ).
(d) Subject to Section 4.07, each Dissenting Shares shall be converted
into the right to receive payment from the Surviving Corporation with
respect thereto in accordance with the provisions of the MGCL.
(e) Each issued and outstanding share of common stock of Acquisition
shall be converted into and become one fully paid and nonassessable
share of common stock of the Surviving Corporation
Section 1.11. ....Payment. (a) Pursuant to an agreement in form and
substance acceptable to Nemetschek and the Company to be entered into
prior to the Effective Time between Nemetschek and a disbursing agent
selected by Nemetschek and reasonably acceptable to the Company (the
Disbursing Agent ), at the Effective Time, Nemetschek and/or
Acquisition shall make available to the Disbursing Agent the aggregate
amount of cash to which holders of shares of Company Common Stock
(other than Dissenting Shares) shall be entitled pursuant to Section
4.01(c). The agreement with the Disbursing Agent shall provide for
reasonable investment of the cash as directed by Nemetschek and all
investment income shall be paid to Nemetschek. Notwithstanding the
foregoing, the Company and Nemetschek agree that, at the Effective
Time, the Company shall make available to the Disbursing Agent from
cash on hand at the Company, unless otherwise agreed by Nemetschek and
the Company, not less than 90% of all such cash (the Company Amount ),
which amount shall be used as partial payment of the Merger
Consideration as contemplated by this Section 4.02, and which amount,
when paid to holders of Company Common Stock, shall be paid in partial
redemption of such Company Common Stock. The Company covenants and
agrees that, immediately prior to the Effective Time, it shall convert
all cash equivalents held by the Company to cash. The parties further
agree that any amount that Nemetschek and/or Acquisition is required
to provide to the Disbursing Agent pursuant to the first sentence of
this Section 4.02(a) may be reduced dollar-for-dollar by the Company
Amount.
(b) As soon as practicable after the Effective Time, Nemetschek shall
cause the Disbursing Agent to send a notice and a letter of
transmittal to each holder of certificates formerly evidencing shares
of Company Common Stock (other than certificates formerly representing
shares of Company Common Stock to be cancelled pursuant to Section
4.01(a)-(b) and other than shares representing Dissenting Shares)
advising such holder of the effectiveness of the Merger and the
procedure for surrendering to the Disbursing Agent such certificates
for exchange into the Merger Consideration for each share of Company
Common Stock so represented, and that delivery shall be effected, and
risk of loss and title to the shares of Company Common Stock shall
pass, only upon proper delivery to the Disbursing Agent of the
certificates for the shares of Company Common Stock and a duly
executed letter of transmittal and any other required documents of
transfer. Each holder of certificates theretofore evidencing shares of
Company Common Stock (other than certificates formerly representing
shares of Company Common Stock to be cancelled pursuant to Section
4.01(a)-(b) and other than shares representing Dissenting Shares),
upon surrender thereof to the Disbursing Agent together with such
letter of transmittal (duly executed) and any other required documents
of transfer, shall be entitled to receive in exchange therefor the
Merger Consideration with respect to each such share. Upon such
surrender, the Disbursing Agent shall promptly deliver the Merger
Consideration (less any amount required to be withheld under
applicable law) in accordance with the instructions set forth in the
related letter of transmittal, and the certificates so surrendered
shall promptly be cancelled. Until surrendered, certificates formerly
evidencing shares of Company Common Stock shall be deemed for all
purposes to cease to be outstanding, shall be canceled and retired and
shall cease to exist, and the holders of a certificate or certificates
representing such shares evidence only the right to receive the Merger
Consideration per share of Company Common Stock as provided for
hereunder. Other than as provided in Section 4.01(c), no interest
shall accrue or be paid on any cash payable upon the surrender of
certificates which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock.
(c) If the Merger Consideration is to be delivered to a Person other
than the Person in whose name the certificates surrendered in exchange
therefor are registered, it shall be a condition to the payment of
such Merger Consideration that the certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and
otherwise in proper form for transfer, that such transfer otherwise be
proper and that the Person requesting such transfer pay to the
Disbursing Agent any transfer or other taxes payable by reason of the
foregoing or establish to the satisfaction of the Disbursing Agent
that such taxes have been paid or are not required to be paid.
(d) Unless required otherwise by applicable law, any portion of the
aggregate Merger Consideration that remains undistributed to holders
of shares of Company Common Stock six months after the Effective Time
shall be delivered to the party who provided such funds to the
Disbursing Agent and any holders of shares of Company Common Stock who
have not theretofore complied with the provisions of this Article IV
shall thereafter look only to Nemetschek for payment of any Merger
Consideration to which they are entitled pursuant to this Article IV.
Neither Nemetschek nor the Disbursing Agent shall be liable to any
holder of shares of Company Common Stock for any cash held by
Nemetschek or the Disbursing Agent for payment pursuant to this
Article IV delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Section 1.12. ....Closing of the Company's Transfer Books. The stock
transfer books of the Company shall be closed on the date immediately
prior to the date of the Effective Time and no transfer of shares of
the Company Common Stock shall be made thereafter. In the event that,
after the Effective Time, certificates for shares of the Company
Common Stock are presented to the Surviving Corporation or Nemetschek,
they shall be cancelled and exchanged for Merger Consideration for
each share of the Company Common Stock represented as provided in
Section 4.02.
Section 1.13. ....No Splits, Etc. The Company covenants and agrees
that, prior to the Effective Time, it shall not split or combine the
Company Common Stock, or pay a stock dividend or other stock
distribution in shares of the Company Common Stock, or in rights or
securities exchangeable or convertible into or exercisable for the
Company Common Stock, or otherwise change the Company Common Stock
into, or exchange the Company Common Stock for, any other securities
(whether pursuant to or as part of a merger, consolidation,
acquisition of property or stock, separation, reorganization or
liquidation of such entity as a result of which its respective
stockholders receive cash, stock or other property in exchange for, or
in connection with, their Company Common Stock (a Business Combination
) or otherwise), or make any other dividend or distribution on or of
the Company Common Stock, without the parties hereto having first
entered into an amendment to this Agreement pursuant to which the
consideration to be paid hereunder will be adjusted to reflect such
split, combination, dividend, distribution, Business Combination or
change.
Section 1.14. ....Treatment of Options. Immediately prior to the
Effective Time, each outstanding stock option and any related stock
appreciation right granted to officers, directors, or employees of the
Company or others with respect to Company Common Stock (together, an
Option ), shall be cancelled by the Company, and the holder thereof
shall be entitled to receive at the Effective Time or as soon as
practicable thereafter from the Disbursing Agent in consideration for
such cancellation the Merger Consideration promptly upon payment to
the Surviving Corporation by such holder of the exercise price per
share previously applicable to such Option.
Section 1.15. ....Lost, Stolen or Destroyed Certificates. In the event
any certificate shall have been lost, stolen or destroyed, upon
receipt by the Surviving Corporation or the Disbursing Agent of an
affidavit of that fact from the holder thereof and if reasonably
satisfied that adequate provision for indemnification has been made,
the Disbursing Agent will issue in exchange for such lost, stolen or
destroyed certificate the Merger Consideration all as provided in
Section 4.02, deliverable in respect thereof pursuant to this
Agreement.
Section 1.16. ....Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Dissenting Shares shall not be converted
into a right to receive the Merger Consideration unless such holder
fails to perfect or withdraws or otherwise loses his right to
appraisal under the MGCL. If, after the Effective Time, such holder
fails to perfect or withdraws or loses his right to appraisal, such
shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration,
without interest thereon. Prior to the Effective Time, the Company
shall give Nemetschek and Acquisition prompt notice of any demands
received by the Company for appraisal of shares, and, prior to the
Effective Time, Nemetschek and Acquisition shall have the right to
participate in all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, except
with the prior written consent of Nemetschek and Acquisition, make any
payment with respect to, or settle or offer to settle, any such
demands.
REPRESENTATIONS AND WARRANTIES OF
the Company
The Company hereby represents and warrants to Nemetschek and
Acquisition as follows:
Section 1.17. ....Organization. The Company and each of its
Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and
has all requisite power and authority, corporate or otherwise, to own,
operate and lease its properties, and to carry on its business
substantially as now conducted. The Company and each of its
Subsidiaries is duly qualified to do business and is in good standing
in each jurisdiction in which the character of its assets or property
owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the
failure to be so qualified or to be in good standing has not had or
would not have a Material Adverse Effect on the Company or such
Subsidiary, or on the ability of the Company to consummate the
transactions contemplated hereby. The Company has all requisite power
and authority, corporate or otherwise, to enter into this Agreement
and, subject to the adoption of this Agreement by the stockholders of
the Company and the receipt of all requisite regulatory approvals and
the expiration of any applicable waiting periods, to consummate the
transactions contemplated hereby. The Company has provided to
Nemetschek a complete and correct copy of the Articles of
Incorporation and Bylaws for itself and each of its Subsidiaries, as
amended or restated. Neither the Company nor any of its Subsidiaries
is in violation of any of the provisions of its Articles of
Incorporation or Bylaws, as amended or restated, or equivalent
organizational documents.
Section 1.18. ....Authorization; Enforceability. The execution,
delivery and performance of this Agreement and all other agreements
contemplated hereby and the consummation of the transactions
contemplated hereby have been duly approved and authorized by the
Board of Directors of the Company, and all necessary corporate action
on the part of such party has been taken, subject to the adoption of
this Agreement by the stockholders of the Company. This Agreement has
been duly executed and delivered by the Company and constitutes the
valid and binding obligation of the Company and is enforceable against
the Company in accordance with its terms, except to the extent that
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable
principles or doctrines.
Section 1.19. ....Conflicts. Except as set forth on Schedule 5.03, the
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not,
conflict with or result in any violation, breach or termination of, or
default or loss of a material benefit under, or permit the
acceleration of any obligation under, or result in the creation of any
material Lien on any of the property or assets under, any provision of
the Articles of Incorporation or Bylaws (or equivalent organizational
documents) of the Company, or any mortgage, indenture, lease,
agreement or other instrument, permit, concession, grant, franchise,
license, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or their
respective properties, other than any such conflicts, violations,
breaches or defaults which would not have a Material Adverse Effect on
the Company or any such Subsidiary or the ability of the Company to
consummate the transactions contemplated hereby.
Section 1.20. ....Consents and Approvals. Except as set forth on
Schedule 5.04, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority
is required by or with respect to the Company in connection with the
execution and delivery of this Agreement or the consummation by it of
the transactions contemplated hereby except for: (i) the filing by the
Company of a proxy statement and form of proxy (the Proxy Statement )
for use in connection with a meeting of the stockholders of the
Company to consider and vote on the terms of this Agreement and the
Merger (the Stockholders Meeting ); (ii) the filing of Articles of
Merger with the SDAT, and the approval thereof; (iii) any filings,
approvals or no-action letters with or from state securities
authorities; and (iv) any filings required under the HSR Act or with
any other Governmental Authority, and/or any consents, waivers or
approvals obtained with respect thereto.
Section 1.21. ....Anti-takeover Provisions Inapplicable. Assuming the
representations and warranties of Nemetschek and Acquisition in
Section 6.05 are accurate, no business combination, moratorium,
control share or other state anti-takeover statute or regulation
applicable to the Company (i) applies to the Merger or any other
agreement being entered into in connection therewith, (ii) prohibits
or restricts the ability of the Company to perform its obligations
under this Agreement or its ability to consummate the transactions
contemplated hereby or the ability of any other party to consummate
the transactions contemplated to be entered into in connection with
the Merger, (iii) would have the effect of invalidating or voiding
this Agreement or any agreement being entered into in connection
herewith or any provision hereof or thereof, or (iv) would subject
Nemetschek or Acquisition to any material impediment or condition in
connection with the exercise of any of its rights under this Agreement
or such other agreement.
Section 1.22. ....Capitalization. The authorized capital stock of the
Company consists of 10,000,000 shares of common stock, par value 0.01
per share, of which 3,070,705 shares are issued and outstanding. All
such outstanding shares of Company Common Stock are (i) duly and
validly authorized and issued, (ii) fully paid and nonassessable, and
(iii) free from any preemptive rights of current or past stockholders.
The Company has reserved for issuance upon exercise of the Warrants
(as hereinafter defined) 120,000 shares of Company Common Stock. The
Company has reserved for issuance upon exercise of options granted
under its 1995 Amended and Restated Stock Option Plan ( Company Option
Plan ) an aggregate of 300,000 shares of Company Common Stock. There
are no outstanding or existing options, warrants, rights (including
preemptive rights), calls, subscriptions, commitments, conversion
rights, rights of exchange, plans or other agreements of any character
providing for the purchase, issuance or sale of any shares of the
capital stock of the Company, except for options related to the
purchase of 100,200 shares of Company Common Stock under the Company
Option Plan. No shares of capital stock are held in treasury, and
except as set forth above, no shares of capital stock are reserved for
issuance. The Company has not granted or agreed to grant any rights
relating to the registration of its securities under applicable
federal and state securities laws, including piggyback rights, and the
consummation of the transactions contemplated by this Agreement will
not trigger the anti-dilution provisions or other price adjustment
mechanisms of any outstanding subscriptions, options, warrants, calls,
contracts, preemptive rights, demands, commitments, conversion rights
or other agreements or arrangements of any character or nature
whatsoever under which the Company is or may be obligated to issue or
acquire its capital stock.
Section 1.23. ....Subsidiaries. Set forth on Schedule 5.07 is a
complete and correct list of each of the Company's Subsidiaries. Each
Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation
(as set forth in such schedule), and has all requisite corporate power
and authority to own its property and to conduct its business as now
being conducted. Set forth on Schedule 5.07 is a list of jurisdictions
in which each Subsidiary is qualified as a foreign corporation and
each Subsidiary is in good standing in each of the states or
jurisdictions where they are so qualified. Such jurisdictions are the
only jurisdictions in which the character or location of the
properties owned or leased by such Subsidiary, or the nature of the
business conducted by such Subsidiary, make such qualification
necessary. All of the issued and outstanding shares of capital stock
of each Subsidiary are (i) duly and validly authorized and issued,
(ii) fully paid and nonassessable, (iii) owned, of record and
beneficially, by the Company, and (iv) free and clear of all Liens,
encumbrances, equities, options or claims whatsoever, including
preemptive rights. No shares of capital stock of any Subsidiary are
reserved for issuance and there are no outstanding options, warrants,
rights, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities, or other
commitments, contingent or otherwise, relating to the capital stock of
such Subsidiary, or pursuant to which such Subsidiary is or may become
obligated to issue or exchange any shares of capital stock of such
Subsidiary. Except for the Subsidiaries listed on Schedule 5.07,
neither the Company nor any Subsidiary owns, directly or indirectly,
any capital stock or other economic, equity or ownership or
proprietary interest in any other Person. The Company is not party to
any partnership agreement, stockholders agreement, voting agreement or
joint venture agreement with any other Person.
Section 1.24. ....Financial Statements; No Material Adverse Change.
(a) The financial statements of the Company included in its Annual
Report on Form 10-KSB for the fiscal years ended May 31, for each of
1998, 1997, and 1996, and its Quarterly Reports on Form 10-QSB for the
fiscal quarters ended August 31, 1999 and November 30, 1999
(collectively, the Financial Statements ) comply as to form in all
material respects with the applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with GAAP during the periods covered
thereby (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-QSB of the
SEC, or for normal year-end adjustments), and fairly present in all
material respects the financial position of the Company as at the
dates thereof and the results of its operations and cash flows for the
periods then ended. Since May 31, 1999, there has not been any
declaration, setting aside or payment of a dividend or other
distribution with respect to shares of capital stock of the Company
except for dividends distributed to stockholders in the ordinary
course of business or any material change in accounting methods or
practices by the Company. The Company has delivered to Nemetschek the
Financial Statements prior to the date hereof.
(b) Since May 31, 1998, except as disclosed in the SEC Documents filed
prior to the date hereof, and except for the execution, delivery and
performance of this Agreement and any other agreements to be entered
into or contemplated hereby and the transactions contemplated hereby
and thereby, (A)neither the Company nor any of its Subsidiaries has
incurred any obligations, contingent or non-contingent liabilities,
liabilities for Taxes, levies, Liens, claims or other charges,
long-term leases or unusual forward or long-term commitments (whether
absolute, accrued, contingent or otherwise, known or unknown, whether
due or to become due, or whether or not required by GAAP to be
reflected in a balance sheet of the Company or disclosed in the notes
thereto), except liabilities and obligations that (x)are adequately
accrued or reserved against in the Financial Statements or disclosed
in the notes thereto, (y )were incurred after May 31, 1999 in the
ordinary course of business and consistent with past practice and are
not in the aggregate material to the Company taken as a whole, or
(z)have been discharged or paid in full, (B)no contract, lease or
other agreement or instrument has been entered into by the Company or
any of its Subsidiaries or has become binding upon the Company or any
of its Subsidiaries or their respective assets which, individually or
in the aggregate, has had or could reasonably be expected to have a
Material Adverse Effect on the Company taken as a whole, or the
ability of the Company to consummate the transactions contemplated
hereby, (C)neither the Company nor any of its Subsidiaries is in
default, and to the Company's knowledge no third party is in default,
under any Material Agreement which, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse
Effect on the Company taken as a whole or the ability of the Company
to consummate the transactions contemplated hereby, and (D)the
business of the Company and each of its Subsidiaries has been operated
in the usual and ordinary course consistent with past practice. Since
May 31, 1999, no event has occurred, which alone or together with
other events, could reasonably be expected to have a Material Adverse
Effect on the Company or the ability of the Company to consummate the
transactions contemplated hereby, except as disclosed in the SEC
Documents filed after May 31, 1999 and prior to the date hereof and
except to the extent resulting from any changes in general economic
conditions in the United States.
Section 1.25. ....SEC Reports. The Company has filed and made
available to Nemetschek a true and complete copy of each report,
schedule, filing, registration statement and definitive proxy
statement required to be filed by the Company with the SEC since
January 1, 1997 (the SEC Documents ). As of their respective dates,
the SEC Documents, after giving effect to any amendments and
supplements thereto filed prior to the date hereof, complied in all
material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, applicable to such SEC Documents.
None of the SEC Documents when filed, after giving effect to any
amendments and supplements thereto filed prior to the date hereof,
contained (or, if filed after the date hereof, will contain) any
untrue statement of a material fact or omitted (or, if filed after the
date hereof, will 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. None of the Companys Subsidiaries is required to file any
forms, reports or other documents with the SEC.
Section 1.26. ....Compliance with Laws; Permits. (a) The business of
the Company and each of its Subsidiaries has been and is being
conducted in compliance in all material respects with all laws,
ordinances and regulations of Governmental Authorities, including,
without limitation, federal and state securities laws, laws and
regulations relating to financial statements and reports, occupational
safety, fair employment practices, fair labor standards and laws and
regulations relating to employees and employee benefits, and any
statutes or ordinances relating to the properties occupied or used by
the Company and its Subsidiaries. The Company and each of its
Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders necessary for it to own,
lease and operate its properties or to carry on its business as it is
now being conducted (the Company Permits ) and no suspension,
revocation or cancellation of any of the Company Permits is pending
or, to the knowledge of the Company or any of its Subsidiaries,
threatened.
(b) No investigation or review by any Governmental Authority with
respect to the Company or any of its Subsidiaries is pending or, to
the knowledge of the Company or any of its Subsidiaries, threatened,
nor has any Governmental Authority indicated to the Company or any of
its Subsidiaries any intention to conduct the same.
Section 1.27. ....Litigation. There is no action, suit, investigation
or proceedings, legal, quasi-legal, administrative or otherwise,
pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened against the Company or any such Subsidiary or
any property of the Company or any such Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental
Authority except for such actions, suits, investigations or legal
proceedings that would not have a Material Adverse Effect on the
Company or any such Subsidiary or which would affect the ability of
the Company to consummate the transactions contemplated hereby.
Neither the Company nor any of its Subsidiaries is subject to any
judgment, order, writ, injunction or decree of any arbitrator, court
or Governmental Authority, and there are no unsatisfied judgments
against the Company or any of its Subsidiaries.
Section 1.28. ....Compensation and Employee Matters. The Company has
previously provided to Nemetschek, a true, correct and complete list
of all directors, officers and personnel of the Company and each of
its Subsidiaries, and the annual salary, bonuses paid or accrued with
respect thereto for the year ending May 31, 1999, and for the period
from June 1, 1999 through December 31, 1999, and any commitments by
the Company or any Subsidiary entered into on or prior to the date
hereof to pay any further bonuses for or increase the salary of any
such person, which list shall be updated as of the Closing Date.
Section 1.29. ....Employee Benefit Plans; Labor Matters. (a) Schedule
5.13 lists all employee plans, programs, practices and arrangements,
including, without limitation, all employee benefit plans (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ( ERISA )) employment agreements, and health,
medical, dental, welfare, accident, disability, life insurance, stock
purchase, bonus, equity and equity-type compensation, severance pay
and other employee benefit or fringe benefit plans maintained or
contributed to by the Company or any ERISA Affiliate or with respect
to which the Company or any ERISA Affiliate has any fixed or
contingent, direct or indirect liability ( Plans ). For purposes of
this Agreement, ERISA Affiliate means any Affiliate or Subsidiary and
any other person or entity that would be treated as under common
control or a single employer with the Company under Section 4001 of
ERISA or Section 414 of the Code. The Company has delivered or made
available to Nemetschek copies of each Plan and all amendments thereto
and, if applicable, the summary plan description and any summaries of
material modifications, any other material employee communications
during the past two years, the most recent determination letters and
any other rulings, the three most recent annual reports on Internal
Revenue Service Form 5500, and the three most recent actuarial reports
and/or statements of trust assets with respect to each such Plan.
(b) Except as set forth on Schedule 5.13, (i) no Plan is or has been
subject to Section 302 of ERISA, Title IV of ERISA or Section 412 of
the Code; (ii) no material, nonexempt prohibited transaction (as such
term is defined in ERISA and the Code, as applicable) has occurred
with respect to any Plan during the five years preceding the Effective
Time; (iii) each Plan is and has been operated in compliance in all
material respects with the presently applicable provisions of ERISA,
the Code and other applicable law; (iv) with respect to any insurance
contract providing funding under any Plan, there is no liability for
any material retroactive rate adjustment arising from events occurring
prior to the Effective Time; and (v) no Plan is or has been a welfare
benefit fund (within the meaning of Section 419(e) of the Code), a
multiple employer plan (within the meaning of Section 413(c) of the
Code) or a multiemployer plan (as defined in Section 3(37) of ERISA).
(c) Each Plan that is a group health plan (as defined in Section 4980B
of the Code) has been operated in material compliance with Section
4980B of the Code and the secondary payor requirements of Section
1862(b)(1) of the Social Security Act. Except as provided in Schedule
5.13 and except as required by Section 4980B of the Code, neither the
Company nor any ERISA Affiliate has any obligation or liability to
provide medical, life insurance or supplemental pension benefits in
respect of any current or former employees or independent contractors
of the Company or any ERISA Affiliate beyond their retirement. Except
as set forth on Schedule 5.13, no Plan provides for severance pay,
unemployment compensation or any similar payment with respect to any
current or former employee or independent contractor of the Company or
any ERISA Affiliate. Except as provided in Schedule 5.13, the
consummation of the transactions contemplated by this Agreement will
not (i) entitle any such person or entity to severance pay,
unemployment compensation or any other similar payment; (ii)
accelerate the time of payment or vesting of any amount; (iii)
increase the amount of compensation due to any such person or entity;
(iv) constitute a prohibited transaction (as defined in Section 406 of
ERISA or Section 4975 of the Code); or (v) entitle any such person or
entity to an excess parachute payment within the meaning of Section
280G of the Code. The Company has reserved all rights necessary to
amend each Plan and to terminate its participation in each Plan.
(d) Except as set forth on Schedule 5.13, there are no material
actions or claims existing or pending (other than routine claims for
benefits) or threatened with respect to any Plan, and neither the
Company nor any ERISA Affiliate has been notified of any audit or
investigation of a Plan by any governmental entity.
(e) The Company and each ERISA Affiliate (except as a result of any
actions taken by Nemetschek after the Effective Time) (i) is in
material compliance with all applicable laws respecting employment,
employment practices, terms and conditions of employment and wages and
hours (including, but not limited to, the Worker Adjustment Retraining
Notification Act, the Age Discrimination in Employment Act, the Civil
Rights Act of 1964, the Equal Pay Act, the Occupational Safety and
Health Act, the Fair Labor Standards Act, the Americans with
Disability Act of 1990, the Family and Medical Leave Act of 1993, and
any other federal, state or local law regulating employment or
protecting employee rights), in each case, with respect to current and
former employees and independent contractors of the Company and such
ERISA Affiliate, (ii) has withheld all material amounts required by
applicable law or by agreement to be withheld from the wages, salaries
and other payments to such current and former employees and
independent contractors, (iii) is not liable for any material arrears
of wages or any taxes or any penalty for failure to comply with any of
the foregoing, and (iv) is not liable for any material payment to any
trust or other fund or to any governmental entity, with respect to
unemployment compensation benefits, social security or other benefits
for such current or former employees and independent contractors.
(f) Except as set forth on Schedule 5.13, (i) no employees of the
Company or any Subsidiary are represented by any labor organization
and there is no union organizational activity currently underway, or
to the Company's knowledge, threatened, with respect to any employees
of the Company or any Subsidiary, (ii) neither the Company nor any of
its Subsidiaries is engaged in, or has received any written notice
during the current or preceding year of, any unfair labor practice,
and no such complaint is pending before the National Labor Relations
Board or any other agency having jurisdiction thereof, (iii) neither
the Company nor any of its Subsidiaries is engaged in, or has received
any notice of, any grievances arising under any collective bargaining
agreements, or any pending arbitration proceedings under any
collective bargaining agreements, (iv) during the immediately
preceding 24 calendar months there has not been any, and there is no,
threatened, labor strike, work stoppage or slowdown pending against
any portion of the business of the Company or its Subsidiaries, and
there is no pending lockout by the Company or any Subsidiary. The
Company and each of its Subsidiaries has satisfied and performed fully
its obligations under each collective bargaining agreement, and under
any order, conciliation contract or settlement contract by which any
of them is bound or to which any of them is subject concerning
employment related matters. Neither the Company nor any of its
Subsidiaries is engaged in, or has received notice of, any local,
state and/or federal charge, complaint, lawsuit or other action,
pertaining to the violation of any employment law, statute, ordinance
or regulation and no such charge, complaint, lawsuit or other action
is pending before any agency or administrative body responsible for
administering such employment law, statute, ordinance or regulation.
Section 1.30. ....Tax Matters. (a) Except as set forth on Schedule
5.14: (i) all Tax Returns required to be filed by or on behalf of the
Company and each of its Subsidiaries have been or will be timely
filed; (ii) all such Tax Returns that have been filed are complete and
correct in all respects, and all Taxes shown to be due on such Tax
Returns have been paid; (iii) no written claim (other than a claim
that has been finally settled) has been made by a Taxing Authority
that either the Company or any of its Subsidiaries is subject to an
obligation to file Tax Returns or to pay or collect Taxes imposed by
any jurisdiction in which the Company or such Subsidiary does not file
Tax Returns or pay or collect Taxes, other than any such claim that
would not have a Material Adverse Effect on the Company or such
Subsidiary or for which adequate reserves have been provided on the
Financial Statements; (iv) there is no deficiency with respect to any
Taxes, other than any such deficiency for which adequate reserves have
been provided on the Financial Statements; and (v) all material
assessments for Taxes due with respect to completed and settled
examinations or concluded litigation have been paid which,
individually or in the aggregate (with respect to the Company or any
Subsidiary), exceed 20,000. As used in this Agreement, Tax Returns
shall mean all federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms and information
returns relating to Taxes.
(b) Except as set forth on Schedule 5.14, the Company and each of its
Subsidiaries has duly and timely withheld all Taxes required to be
withheld in connection with its business and assets, and such withheld
Taxes have been either duly and timely paid to the proper Governmental
Authorities or properly set aside in accounts for such purpose.
(c) Except as set forth on Schedule 5.14, (i) neither the Company nor
any of its Subsidiaries is a party to or bound by or has any
obligation under any Tax allocation, sharing, indemnification or
similar agreement or arrangement with any Person that might result in
a Material Adverse Effect on the Company or such Subsidiary that
entered into such agreement or arrangement, and (ii) neither the
Company nor any of its Subsidiaries is or has been at any time a
member of any group of companies filing a consolidated, combined or
unitary income tax return other than any such group the common parent
of which is the Company.
(d) Except as set forth on Schedule 5.14, (i) all taxable periods of
the Company and each of its Subsidiaries ending before May 31, 1996
are closed or no longer subject to audit, (ii) neither the Company nor
any of its Subsidiaries is currently under any audit by any taxing
authority as to which such taxing authority has asserted in writing
any claim which, if adversely determined, could have a Material
Adverse Effect on the Company or such Subsidiary, and (iii) no waiver
of the statute of limitations is in effect with respect to any taxable
year of the Company or any of its Subsidiaries.
Section 1.31. ....Real Property Owned or Leased. Schedule 5.15 of the
Disclosure Statement sets forth a complete and accurate list or
description of all real property that the Company or any of its
Subsidiaries owns or leases, has agreed (or has an option) to
purchase, sell or lease, or may be obligated to purchase, sell or
lease and any title insurance or guarantee policies with respect
thereto, specifying in the case of leases, the name of the lessor,
licensor or other grantor, the approximate square footage covered
thereunder, the basic annual rental and other amounts paid or payable
with respect thereto and a summary of the other terms thereof. True
copies of all such leases for real property have been delivered to
Nemetschek prior to the date hereof. Except as set forth in Schedule
5.03, no consent to the consummation of the transactions contemplated
by this Agreement is required from the lessor of any such real
property.
Section 1.32. ....Undisclosed Liabilities. As of the date hereof and
as of the Effective Time, except as and to the extent reflected,
reserved against or otherwise disclosed on the Financial Statements or
the notes thereto, or set forth in Schedule 5.16 of the Disclosure
Statement, and except for those incurred in the ordinary course of
business consistent with such practice, neither the Company nor any of
its Subsidiaries has any indebtedness or liability of any nature,
whether accrued, absolute, contingent or otherwise, whether due or to
become due.
Section 1.33. ....Absence of Certain Changes or Events. Since November
30, 1999, except as contemplated by this Agreement or disclosed on the
Financial Statements or the notes thereto, or as set forth in Schedule
5.17 of the Disclosure Schedule, the Company and each of its
Subsidiaries have conducted its business only in the ordinary course
and in a manner consistent with past practice and, since such date,
there has not been:
(a) any changes in the business, financial condition or results of
operations of such party having or reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect;
(b) any damage, destruction or loss (whether or not covered by
insurance) reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect;
(c) any material change by such party in its accounting methods,
principles or practices;
(d) any revaluation by such party or any of its material assets,
including but not limited to writing down the value of inventory or
writing off of notes or accounts receivable which aggregates in excess
of 15,000;
(e) any entry by such party into any commitment or transactions
material to such party (other than commitments or transactions entered
into in the ordinary course of business);
(f) any declaration, setting aside or payment of any dividends or
distributions in respect of the capital stock of such party;
(g) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including without limitation the granting of stock
options, stock appreciation rights, performance awards, or restricted
stock awards), stock purchase or other employee benefit plan or
agreement or arrangement, or any other increase in the compensation
payable or to become payable to any present or former director,
officer or key employee of such party, except for increases in base
compensation in the ordinary course of business consistent with past
practice, or pursuant to any employment, consulting or severance
agreement or arrangement previously entered into with any such present
or former directors, officers or key employees; or
(h) any other action which, if it had been taken after the date
hereof, would have required the consent of Nemetschek hereunder.
Section 1.34. ....Assets.
(a) The Company and each of its Subsidiaries has good and marketable
title to their real properties, including any leaseholds and ground
leases, and their other assets and properties, all as reflected as
owned or held by the Company or such Subsidiary respectively, in the
Financial Statements as of May 31, 1999, and those acquired since such
date, except for (i) assets and properties disposed of since such date
in the ordinary course of business and (ii) Permitted Liens none of
which, individually or in the aggregate, except as set forth in the
Financial Statements or in Schedule 5.18 of the Disclosure Schedule,
are material to the Company or such Subsidiary, respectively. All
buildings, structures, fixtures and appurtenances comprising part of
the real properties of the Company and its Subsidiaries (whether owned
or leased) are, in the opinion of management of the Company or such
Subsidiary, in good operating condition, reasonable wear and tear
excepted. Title to all real property owned by the Company and its
Subsidiaries is held in fee simple, except as otherwise noted in the
Financial Statements or as set forth in Schedule 5.18 of the
Disclosure Schedule. The Company and each of its Subsidiaries have
title or other rights to its assets sufficient in all material
respects for the conduct of their respective businesses as presently
conducted, and except as set forth in the Financial Statements or in
Schedule 5.18 of the Disclosure Schedule, such assets are free, clear
and discharged of and from any and all Liens which are material to the
Company and its Subsidiaries, other than Permitted Liens.
(b) All leases and licenses pursuant to which the Company and each of
its Subsidiaries, as lessee or licensee, leases or licenses real
property, personal property or Intellectual Property are, to the
knowledge of the Company and such Subsidiary, valid, effective, and
enforceable against the lessor in accordance with their respective
terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization, receivership,
conservatorship or similar laws relating to or affecting the
enforcement of creditors' rights generally, and by general principles
of equity, whether applied by a court of law or equity. There is not
under any of such leases or licenses any existing material default, or
any event which with notice or lapse of time, or both, would
constitute a material default, with respect to either the Company or
such Subsidiary, or to the knowledge of the Company, the other party.
Except as disclosed in Schedule 5.18 of the Disclosure Schedule, none
of such leases involving a rental payment of more than 25,000 annually
or such licenses contains a prohibition against assignment by the
Company or such Subsidiary, by operation of law or otherwise, or any
other provision which would preclude the Surviving Corporation from
possessing and using the leased premises or licensed property
(including Intellectual Property) for the same purposes and upon the
same rental and other terms upon the consummation of the Merger as are
applicable to the use by the Company or such Subsidiary as of the date
of this Agreement.
Section 1.35. ....Books and Records. The respective minute books of
the Company and each of its Subsidiaries, as previously made available
to Nemetschek and its representatives, contain accurate records of all
meetings of and all corporate actions or written consents taken by the
respective stockholders and boards of directors of the Company and
each of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has any of their respective records, systems, controls,
data or information recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and
therefrom) are not under the exclusive ownership and direct control of
the Company and such Subsidiary, as the case may be.
Section 1.36. ....Proxy Statement. The information to be supplied by
the Company for inclusion in the Proxy Statement will not on the date
the Proxy Statement (or any amendment thereof or supplement thereto)
is first mailed to the Company's stockholders, at the time of the
Stockholders Meeting, and at the Effective Time, contain any statement
that, in the light of the circumstances under which it is made, is
false or misleading with respect to any material fact, omits to state
a material fact necessary in order to make the statements made therein
not false or misleading, or omits to state any material fact necessary
to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders Meeting that has
become false or misleading. If at any time prior to the Effective
Time, any event relating to the Company or any of its Subsidiaries or
their respective officers or directors is discovered by the Company
that should be set forth in a supplement to the Proxy Statement, the
Company will promptly inform Nemetschek thereof and such amendment or
supplement will be promptly filed with the SEC, and, as required by
law, disseminated to the Company's Stockholders. Notwithstanding the
foregoing, the Company makes no representation or warranty with
respect to any information supplied by Nemetschek or Acquisition that
is to be included in the Proxy Statement. The Proxy Statement will
comply in all material respects as to form and substance with the
requirements of the Exchange Act and the rules and regulations
thereunder.
Section 1.37. ....Brokers and Finders. Except for the fees and
expenses paid or to be paid to FBW and Offutt Securities, the Company
represents and warrants to the other parties hereto that no broker,
finder, investment bankers, agent or similar intermediary has acted
directly or indirectly on its behalf in connection with this Agreement
or the transactions contemplated hereby, and that no brokerage
commissions, finders' fees, investment banker, or similar fees or
commissions and/or expenses are payable or to be paid in connection
therewith based on any agreement, arrangement or understanding with it
or any action taken by it.
Section 1.38. ....Full Disclosure. None of this Agreement, the
Financial Statements, or any Schedule, Exhibit or certificate
delivered in accordance with the terms hereof or any other document or
instrument in writing that has been supplied by or on behalf of the
Company in connection with the transactions contemplated hereby
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in
which the same were made. There is no fact known to the Company with
regard to the Company and its Subsidiaries that individually, or in
the aggregate has had or could reasonable be expected to have a
Material Adverse Effect on the Company or its Subsidiaries or the
Surviving Corporation assuming the transactions contemplated hereby
are consummated or on any of their respective property or assets and
that has not been disclosed herein or in the Schedules, Exhibits or
certificates furnished in connection with the consummation of the
transactions contemplated hereby.
Section 1.39. ....Environmental Matters. Except as set forth in
Schedule 5.23: (i) the Company and each of its Subsidiaries are and
have been in compliance in all material respects with all
Environmental Laws, except for such noncompliance that would not
result in Environmental Liabilities which could reasonably be expected
to have a Material Adverse Effect on the Company or its Subsidiaries
or the Surviving Corporation assuming the transactions contemplated
hereby are consummated; (ii) the Company and each of its Subsidiaries
have obtained, and are in compliance in all material respects with,
all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or
comply with such Environmental Permits would not result in
Environmental Liabilities which could reasonably be expected to have
individually or in the aggregate a Material Adverse Effect on the
Company or its Subsidiaries or the Surviving Corporation assuming the
transactions contemplated hereby are consummated; (iii) neither the
Company nor any of its Subsidiaries are involved in operations or know
of any facts, circumstances or conditions, including any Releases of
Hazardous Materials, that are likely to result in any Environmental
Liabilities of the Company or any of its Subsidiaries or which could
reasonably be expected to have individually or in the aggregate a
Material Adverse Effect on the Company or its Subsidiaries or the
Surviving Corporation assuming the transactions contemplated hereby
are consummated, and none of the Company or its Subsidiaries has
permitted any current or former tenant of such Person to engage in any
such operations, except as would not reasonably be expected to have
individually or in the aggregate a Material Adverse Effect on the
Company or any of its Subsidiaries or the Surviving Corporation
assuming the transactions contemplated hereby are consummated; (iv)
neither the Company nor any of its Subsidiaries has received any
Environmental Claim, nor to their knowledge is any Environmental Claim
threatened, which individually or in the aggregate would result in a
Material Adverse Effect on the Company or any of its Subsidiaries or
the Surviving Corporation assuming the transactions contemplated
hereby are consummated; (v) neither the Company nor any of its
Subsidiaries has assumed, contractually or by operation of law, any
material liabilities under any Environmental Laws which individually
or in the aggregate could reasonably be expected to have a Material
Adverse Effect on the Company or any of its Subsidiaries or the
Surviving Corporation assuming the transactions contemplated hereby
are consummated; and (vi) neither the Company nor any of its
Subsidiaries has entered into, has agreed to, or is subject to any
material judgment, decree, order or other similar requirement of any
Governmental Authority under any Environmental Laws, including without
limitation those relating to compliance with Environmental Laws or to
investigation, cleanup, remediation or removal of Hazardous
Substances.
Section 1.40. ....Insurance Disclosure. The Company and each of its
Subsidiaries maintain insurance with insurers that in the best
judgment of management of the Company are sound and reputable with
respect to the Company's and its Subsidiaries' assets and upon their
respective businesses and operations against loss or damage, risks,
hazards and liabilities as in the judgment of the Company is customary
and appropriate for companies comparable to the Company. The Company
and each of its Subsidiaries maintain in effect all insurance required
to be carried by law or by any agreement by which they are bound. All
material claims under all policies of insurance maintained by the
Company or any of its Subsidiaries have been filed in due and timely
fashion. The Company and each of its Subsidiaries has taken or will
timely take all requisite action (including without limitation the
making of claims and the giving of notices) pursuant to its directors'
and officers' liability insurance policy or policies in order to
preserve all rights thereunder with respect to all matters (other than
matters arising in connection with this Agreement and the transactions
contemplated hereby) occurring prior to the Effective Time. Neither
the Company nor any of its Subsidiaries has, during the past three
years, had an insurance policy cancelled or been denied insurance
coverage for which such companies has applied.
Section 1.41. ....Year 2000 Compliance. All of the Company's and each
of its Subsidiaries' products and services, products and services
under development, Web sites, and material Internal MIS Systems and
Facilities are Year 2000 Compliant. The Company has furnished
Nemetschek with a true, correct and complete copy of any internal
investigations, memoranda, budget plans, forecasts, or reports
concerning the Year 2000 Compliance of the products, services,
operations, systems, supplies, and facilities of the Company and each
of its Subsidiaries and their respective vendors. The Company and its
Subsidiaries have made appropriate inquiries of their key vendors and
suppliers and have received assurances, reasonably believed by the
Company and its Subsidiaries to be reliable, that such Persons have
also taken appropriate actions to ensure that there shall be no
material adverse change to their respective business and electronic
and information systems related to Year 2000. Based upon the
information provided to the Company and its Subsidiaries and their own
internal assessments, Year 2000 issues will not have a Material
Adverse Effect on the Company or any of its Subsidiaries.
Section 1.42. ....Material Agreements. Each of the Company and its
Subsidiaries has made available to Nemetschek a true and correct copy
of all Material Agreements. Each Material Agreement is valid, binding,
in full force and effect and enforceable by the Company and such
Subsidiary as the case may be in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors
generally and by general equitable principles. Except as disclosed in
Schedule 5.26, neither the Company nor any of its Subsidiaries is
(with or without the lapse of time or the giving of notice, or both)
in breach or default in any material respect thereunder and, to the
knowledge of the Company, no other party to any of the Material
Agreements is (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect
thereunder.
Section 1.43. ....Intellectual Property. (a) Schedule 5.27 of the
Disclosure Schedule contains a list of all material Intellectual
Property used by the Company or its Subsidiaries in its business. The
Company and each of its Subsidiaries owns or has a valid license or
other agreement to use, in the manner currently used or currently
proposed to be used, all Intellectual Property used in its business as
currently conducted or currently proposed to be conducted, including,
without limitation, its Web sites and all software or other works
embodied in or integrated into the products of the Company or its
Subsidiaries. Schedule 5.27 also contains a complete and accurate list
of (i) all material licenses and other rights granted by any third
party to the Company or its Subsidiaries with respect to any
Intellectual Property, and (ii) all material licenses or other rights
granted by the Company or any of its Subsidiaries to any third party
with respect to Intellectual Property. The Company and its
Subsidiaries have provided copies of all such material licenses or
other grants of Intellectual Property, and of all material trademark,
service mark, trade dress, trade name, domain name, copyright, and
patent registrations or applications therefor.
(b) To the knowledge of the Company and its Subsidiaries, the
operation of the business of the Company and its Subsidiaries as such
business currently is conducted and currently is proposed to be
conducted, including the design, development, marketing, and sale of
products or services (including with respect to products or services
under development), has not, does not, and will not under the laws of
any jurisdiction infringe or misappropriate the Intellectual Property
of any third party, constitute unfair competition or trade practices,
violate the rights of any person (including rights to privacy or
publicity), or violate any export control laws. Except as stated in
Schedule 5.27 of the Disclosure Schedule, no claims with respect to
the Company's or any of its Subsidiaries' Intellectual Property have
been asserted, are pending, or have been threatened by any third
party, nor are there valid grounds for any bona fide claims (i) that
any distribution, licensing, sublicensing, or other use of the
Intellectual Property infringes the rights of any third parties, (ii)
against the use of any Intellectual Property as used in the Company's
or any of its Subsidiaries' business as currently conducted or
currently proposed to be conducted, or (iii) challenging the
ownership, validity or effectiveness of any of the Intellectual
Property. Except as stated in Schedule 5.27 of the Disclosure
Schedule, none of the Company's or any of its Subsidiaries' owned
Intellectual Property is subject to any outstanding decree, order,
judgment or stipulation restricting in any manner the licensing
thereof by the Company or such Subsidiary.
(c) To the knowledge of the Company and its Subsidiaries, and except
as set forth in Schedule 5.27(c), there is no unauthorized use,
infringement or misappropriation of any Intellectual Property of the
Company or any of its Subsidiaries by any Person or third party.
Except as would not be materially adverse to the Company or any of its
Subsidiaries, the Company and its Subsidiaries have taken all
necessary measures to protect their Intellectual Property, including
registrations, renewals, and filings, and have taken all necessary
measures to protect and preserve the security and confidentiality of
its trade secrets and other confidential information. All trade
secrets and other confidential information of the Company and its
Subsidiaries are not part of the public domain or knowledge, nor, to
the knowledge of the Company and its Subsidiaries, have they been
misappropriated by any person. To the knowledge of the Company and its
Subsidiaries, no employee or consultant of the Company or its
Subsidiaries has used any trade secrets or other confidential
information of any other person in the course of their work for the
Company, or violated any agreement or law concerning the use or
disclosure of trade secrets or other confidential information.
(d) The Company and its Subsidiaries are the exclusive owner of all
right, title, and interest in the Intellectual Property purportedly
owned by the Company or its Subsidiaries, including, without
limitation, all object or source code or software. Except as listed in
Schedule 5.27 of the Disclosure Schedule, the rights to such
Intellectual Property are in full force and effect. As to the
trademarks and service marks purportedly owned by the Company or any
of its Subsidiaries, there has been no prior use of such trademarks or
service marks by any third party, to the knowledge of the Company and
its Subsidiaries, that would convey upon said third party superior
rights in any such trademarks or service marks.
(e) All Intellectual Property purported to be owned by the Company and
its Subsidiaries which was developed, worked on or otherwise held by
any employee, officer, consultant, or other Person is owned free and
clear by the Company or such Subsidiary by operation of law or has
been validly assigned to the Company or such Subsidiary. Except as
would not be materially adverse to the Company or any of its
Subsidiaries, all services provided to the Company and its
Subsidiaries by non-employees with respect to the creation,
modification or improvement of any Intellectual Property purported to
be owned by the Company or such Subsidiary (including, without
limitation, software, hardware, patentable inventions, and
copyrightable works) have been performed pursuant to agreements with
the Company that assign to the Company or such Subsidiary ownership of
such Intellectual Property, each of which is valid, binding, and
enforceable according to its terms.
(f) All material contracts, licenses and agreements relating to the
Intellectual Property owned or used by the Company or its Subsidiaries
are in full force and effect. The execution, delivery or performance
of this Agreement, or consummation of the transactions contemplated by
this Agreement, will neither violate nor result in the breach,
modification, cancellation, termination, or suspension of such
contracts, licenses, and agreements. The Company and each of its
Subsidiaries is in material compliance with, and has not materially
breached any term of any such contracts, licenses and agreements and,
to the knowledge of the Company, all other parties to such contracts,
licenses and agreements are in compliance with, and have not
materially breached any term of, such contracts, licenses and
agreements. Following the Closing Date, the Surviving Corporation will
be permitted to exercise all of the Company's and its Subsidiaries'
rights under such contracts, licenses and agreements to the same
extent the Company and its Subsidiaries would have been able or
permitted to had the transactions contemplated by this Agreement not
occurred and without the payment of any additional amounts or
consideration other than ongoing fees, royalties, or payments which
the Company or its Subsidiaries would otherwise be required to pay.
Section 1.44. ....Absence of Certain Business Practices. None of the
Company or any of its Subsidiaries, or any officer, employee or agent
thereof, nor any other Person acting on behalf of the Company or any
of its Subsidiaries, has, directly or indirectly, within the past five
years given or agreed to give any gift or similar benefit to any
customer, supplier, governmental employee or other Person or entity
who is or may be in a position to help or hinder the Company or such
Subsidiary (or assist the Company or such Subsidiary in connection
with any actual or proposed transaction) which (i) subjects any party
to any damage or penalty in any civil, criminal or governmental
litigation or proceeding which would have individually or in the
aggregate a Material Adverse Effect on the Company or such Subsidiary
or the Surviving Corporation assuming the transactions contemplated
hereby are consummated, (ii) if not given in the past, could have had
individually or in the aggregate a Material Adverse Effect on the
Company or such Subsidiary, or (iii) if not continued in the future,
could have individually or in the aggregate a Material Adverse Effect
on the Company or such Subsidiary or the Surviving Corporation
assuming the transactions contemplated hereby are consummated.
Section 1.45. ....Affiliate Transactions. Schedule 5.29 sets forth (i)
all contracts, agreements, other arrangements or transactions existing
or occurring at any time after May 31, 1997 between the Company and
any of its Subsidiaries, on the one hand, and any of the Company's or
such Subsidiaries' Affiliates (including officers, directors, or
employees or any of them) or any holder of 1% of the outstanding
common stock of the Company or its Subsidiaries or a family member of
such a Person, on the other hand, or any of their respective
Affiliates, other than agreements relating to services provided as an
officer or director of the Company other than relating to any
extraordinary bonuses, and (ii) a description of all payments made to
or received from, the Company or any of its Subsidiaries, on the one
hand, and any of the Company's Affiliates (including officers,
directors, or employees or any of them) or any holder of 1% of the
outstanding common stock of the Company or a family member of such a
Person, on the other hand, or any of their respective Affiliates,
since May 31, 1997, except for dividends paid or distributions made
with respect to any outstanding class or series of securities of such
party and payments of salary or other regular compensation for
services in the ordinary course.
REPRESENTATIONS AND WARRANTIES OF NEMETSCHEK AND ACQUISITION
Nemetschek and Acquisition hereby represent and warrant to the Company
as follows:
Section 1.46. ....Organization. Nemetschek is a corporation duly
organized, validly existing and in good standing under the laws of The
Federal Republic of Germany and Acquisition is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Maryland, and each of Nemetschek and Acquisition has all
requisite power and authority, corporate or otherwise, to own, operate
and lease its properties, and to carry on its business substantially
as now conducted. Each of Nemetschek and Acquisition is duly qualified
to do business and is in good standing in each jurisdiction in which
the character of the assets or property owned, leased or operated by
it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified
or in good standing would not have a Material Adverse Effect on the
ability of either Nemetschek or Acquisition to consummate the
transactions contemplated hereby. Each of Nemetschek and Acquisition
has all requisite power and authority, corporate or otherwise, to
enter into this Agreement and, subject to the adoption of this
Agreement by the stockholders of the Company and the receipt of all
requisite regulatory approvals and the expiration of any applicable
waiting periods, to consummate the transactions contemplated hereby.
Section 1.47. ....Authorization; Enforceability. The execution,
delivery and performance of this Agreement and all other agreements
contemplated hereby and the consummation of the transactions
contemplated hereby have been duly approved and authorized by the
Board of Directors (or comparable governing bodies) of each of
Nemetschek and Acquisition, and all necessary corporate action on the
part of such party has been taken, subject to the adoption of this
Agreement by the stockholders of the Company and the receipt of all
requisite regulatory approvals and the expiration of any applicable
waiting periods. This Agreement has been duly executed and delivered
by each of Nemetschek and Acquisition and constitutes the valid and
binding obligation of such party and is enforceable against such party
in accordance with its terms, except to the extent that enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles or
doctrines.
Section 1.48. ....Conflicts. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation, breach or termination of, or default or loss of a material
benefit under, or permit the acceleration of any obligation under, or
result in the creation of any material Lien on any of the property or
assets under, any provision of the Articles of Incorporation or Bylaws
(or comparable constitutive documents) of either Nemetschek or
Acquisition, or any mortgage, indenture, lease, agreement or other
instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable
to Nemetschek or Acquisition or their respective properties, other
than any such conflicts, violations, breaches or defaults which would
not have a Material Adverse Effect on the ability of either Nemetschek
or Acquisition to consummate the transactions contemplated hereby.
Section 1.49. ....Consents and Approvals. No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Authority is required by or with respect to Nemetschek or
Acquisition in connection with the execution and delivery of this
Agreement or the consummation by such party of the transactions
contemplated hereby except for: (i)the filing by the Company of the
Proxy Statement with the SEC for use in connection with the
Stockholders Meeting to approve the Merger; (ii)the filing of
Articles of Merger with the SDAT, and the acceptance thereof;
(iii)any filings, approvals or no-action letters with or from state
securities authorities; and (iv)any filings required under the HSR
Act or with any other Governmental Authority, and consents, waivers or
approvals obtained with respect thereto.
Section 1.50. ....Anti-takeover Provisions Inapplicable. Assuming the
Company has taken the actions necessary to ensure that the
representations and warranties of the Company contained in Section
5.05 are accurate, no business combination, moratorium, control share
or other state anti-takeover statute or regulation applicable to
Nemetschek or Acquisition (i)applies to the Merger, (ii)prohibits or
restricts the ability Nemetschek or Acquisition to perform its
obligations under this Agreement or its ability to consummate the
transactions contemplated hereby, (iii)would have the effect of
invalidating or voiding this Agreement or any provision hereof, or
(iv) would subject the Company to any material impediment or condition
in connection with the exercise of any of its rights under this
Agreement.
Section 1.51. ....No Prior Activities; Assets of Acquisition.
Acquisition was formed solely for the purpose of effecting the Merger
and engaging in the transactions contemplated hereby. Acquisition has
neither incurred any obligations or liabilities nor engaged in any
business or activities of any type or kind whatsoever or entered into
any agreements or arrangements with any Person except in connection
with its organization and this Agreement.
Section 1.52. ....Compliance with Laws. (a) The business of Nemetschek
and Acquisition has been and is being conducted in compliance in all
material respects with all laws, ordinances and regulations of
Governmental Authorities applicable thereto, including, without
limitation, federal and state securities laws, laws and regulations
relating to financial statements and reports, occupational safety,
fair employment practices, fair labor standards and laws and
regulations relating to employees and employee benefits, and any
statutes or ordinances relating to the properties occupied or used by
Nemetschek or Acquisition.
(b) No investigation or review by any Governmental Authority with
respect to Nemetschek or Acquisition is pending or, to the knowledge
of Nemetschek or Acquisition, threatened, nor has any Governmental
Authority indicated to Nemetschek or Acquisition an intention to
conduct the same.
Section 1.53. ....Litigation. There is no action, suit, investigation
or proceeding, legal, quasi-legal, administrative or otherwise,
pending or, to the knowledge of Nemetschek or Acquisition, threatened
against Nemetschek or Acquisition or any property of Nemetschek or
Acquisition in any court or before any arbitrator of any kind or
before or by any Governmental Authority except for such actions,
suits, investigations or legal proceedings that would not materially
affect the ability of Nemetschek or Acquisition to consummate the
transactions contemplated hereby. Neither Nemetschek nor Acquisition
is in default with respect to any judgment, order, writ, injunction or
decree of any arbitrator, court or Governmental Authority, and there
are no unsatisfied judgments against Nemetschek or Acquisition except
for such defaults or unsatisfied judgments as would not materially
affect the ability of Nemetschek and Acquisition to consummate the
transactions contemplated hereby.
Section 1.54. ....Proxy Statement. The information to be supplied by
Nemetschek and Acquisition for inclusion in the Proxy Statement will
not, on the date the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to the Company's stockholders, at
the time of the Stockholders Meeting, and at the Effective Time,
contain any statement that, in the light of the circumstances under
which it is made, is false or misleading with respect to any material
fact, omits to state any material fact necessary in order to make the
statements made therein not false or misleading, or omits to state any
material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the
Stockholders Meetings that has become false or misleading. If at any
time prior to the Effective Time, any event relating to either
Nemetschek or Acquisition or its officers or directors is discovered
by Nemetschek or Acquisition that should be set forth in a supplement
to the Proxy Statement, Nemetschek will promptly inform the Company
and such amendment or supplement will be promptly filed with the SEC
and, as required by law, disseminated to the Company's stockholders.
Notwithstanding the foregoing, Nemetschek and Acquisition make no
representation or warranty with respect to any information supplied by
the Company that is to be contained in the Proxy Statement.
Section 1.55. ....Financing. Nemetschek has available to it the funds
necessary to purchase the Company Common Stock pursuant to and as
contemplated by the terms of Article IV and to consummate the Merger.
Section 1.56. ....Brokers and Finders. Each of Nemetschek and
Acquisition represents and warrants to the Company that no broker,
finder, investment bankers, agent or similar intermediary has acted
directly or indirectly on its behalf in connection with this Agreement
or the transactions contemplated hereby, and that no brokerage
commissions, finders' fees, investment banker, or similar fees or
commissions and/or expenses are payable or to be paid in connection
therewith based on any agreement, arrangement or understanding with it
or any action taken by it.
COVENANTS AND AGREEMENTS OF THE PARTIES
Section 1.57. ....Conduct of the Business. During the period from the
date of this Agreement until the Effective Time, the Company will not,
and will cause each of its Subsidiaries not to, take any action that
adversely affects its ability to, and the Company (on its own behalf
and that of its Subsidiaries) covenants and agrees that it will (i)
pursue its business in the ordinary course, (ii) seek to preserve
intact its current business organization, (iii) keep available the
services of its current officers and employees, and (iv) preserve its
relationships with customers, suppliers and others having business
dealings with it. During such period, the Company shall not, and shall
cause each of its Subsidiaries not to, without Nemetscheks prior
written consent:
(a) except with respect to options currently outstanding under the
Company Option Plan, issue, deliver, sell, dispose of, pledge or
otherwise encumber, or authorize or propose the issuance, delivery,
sale, disposition or pledge or other encumbrances of (i) any shares of
any class of its capital stock, or any securities or rights
convertible into, exchangeable for or evidencing the right to
subscribe for any shares of its capital stock, or any rights,
warrants, options, calls, commitments or any other agreements of any
character to purchase or acquire any shares of its capital stock or
any securities or rights convertible into, exchangeable for or
evidencing the right to subscribe for any shares of its capital stock,
or (ii) any other securities in respect of, in lieu of, or in
substitution for, any shares of its capital stock outstanding on the
date hereof;
(b) directly or indirectly redeem, purchase or otherwise acquire, or
propose to redeem, purchase or otherwise acquire, any of its
outstanding capital stock or any profit or loss or any beneficial
interest therein;
(c) split, combine, subdivide or reclassify any shares of its capital stock
or otherwise make any payments to its stockholders;
(d) (i) grant any increases in the compensation of any of its
directors, officers or employees, (ii) pay or agree to pay any pension
or retirement allowance or other employee benefit not required or
contemplated by any Plan as in effect on the date hereof to any such
director, officer or employee, whether past or present, (iii) enter
into any new or amend any existing employment or severance agreement
or any change of control agreement with any such director, officer or
employee, (iv) pay or agree to pay any bonus to any director, officer
or employee (whether in the form of cash, capital stock or otherwise),
or (v)except as may be required to comply with applicable law, amend
any existing, or become obligated under any new, Plan, except in the
case of the foregoing clauses (i) - (iv);
(e) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, reclassification, restructuring,
recapitalization or other reorganization (other than as contemplated
hereby) or otherwise effect the same;
(f) declare or pay any dividend or make any other distribution with
respect to its capital stock, whether in cash, stock or other
property;
(g) make any acquisition, by means of merger, consolidation or
otherwise, of any direct or indirect ownership interest in, or assets
comprising, any business enterprise or operation or enter into any
joint venture, partnership, or strategic alliance agreement with any
Person;
(h) adopt any amendments to its Articles of Incorporation or Bylaws or
comparable governing documents;
(i) directly or indirectly incur any indebtedness for borrowed money
or guarantee such indebtedness or agree to become contingently liable,
by guaranty or otherwise, for the obligations or indebtedness of any
Person or make or commit to make any loans, advances or capital
contributions to, or investments in, any Person or to any other
Person, except for bank deposits and other investments in marketable
securities and cash equivalents made in the ordinary course of its
business consistent with past practice, or refinance or restructure
any existing loan;
(j) engage in the conduct of any business the nature of which is
materially different from the business in which it is currently
engaged or outside the ordinary course of business consistent with
past practice;
(k) enter into any agreement providing for acceleration of payment or
performance or other consequence as a result of a change of control of
the Company;
(l) enter into any contract, arrangement or understanding requiring
the purchase of equipment, materials, supplies or services over a
period greater than 12 months which is not cancelable without penalty
on 30 or fewer days notice and that involves an expenditure in excess
of 35,000;
(m) foreclose upon or otherwise take title to or possession or control
of any real property without first obtaining a phase one environmental
report thereon;
(n) forgive any indebtedness owed to such party or convert or
contribute by way of capital contribution any such indebtedness owed
or settle or cancel any claims that it may possess or waive any rights
of material value;
(o) except with respect to currently outstanding options under the
Company Option Plan, enter into any securities transaction for its own
account or purchase or otherwise acquire any investment security for
its own account other than securities backed by the full faith and
credit of the United States or an agency thereof;
(p) enter into, modify or extend any agreement, contract or commitment
involving an expenditure in excess of 35,000 for any one such
agreement, contract or commitment; provided, however, that
notwithstanding any other provision of this Agreement, the Company is
permitted to enter into an agreement for tail coverage officers and
directors insurance, the cost of which shall not exceed 100,000 in the
aggregate;
(q) place on any of its assets or properties any mortgage, pledge,
lien, charge, or other encumbrance;
(r) sell or otherwise dispose of any real property or any material
amount of tangible or intangible personal property other than
properties acquired in foreclosure or otherwise in the ordinary
collection of indebtedness;
(s) enter into any new, or modify, amend or extend the terms of any
existing, contracts relating to the purchase or sale of financial or
other futures, or any put or call option relating to cash, securities
or commodities or any interest rate swap agreements or other
agreements relating to the hedging of interest rate risk, except in
the ordinary course of business consistent with past practices and
prudent business practices;
(t) knowingly take any action that would materially impede or delay
the consummation of the transactions contemplated by this Agreement or
the ability of the parties hereto to obtain any approval of any
regulatory authority required for the transactions contemplated by
this Agreement or to perform its covenants and agreements under this
Agreement;
(u) make any material changes in its pricing policies related to its
products;
(v) authorize or enter into any agreement providing for management or
advisory services to be provided by or to such party;
(w) mortgage, pledge, encumber, sell, lease or otherwise transfer or
dispose of any of its assets, provided that the sale of inventory in
the ordinary course is not precluded by this clause (w);
(x) implement or adopt any changes in its accounting principles,
practices or methods, other than as may be required by GAAP;
(y) authorize or announce an intention to do any of the foregoing, or
enter any contract, agreement, commitment or arrangement to do any of
the foregoing; or
(z) perform any act or omit to take any action that would make any of
the representations or warranties contained in this Agreement
inaccurate or materially misleading as of the Effective Time or that
would cause a breach of any of the covenants or agreements of this
Agreement.
Section 1.58. ....Officers and Employees. The Company agrees that,
prior to the Effective Time, it will use its reasonable efforts to
encourage its officers and employees and those of its Subsidiaries to
the extent they are in good standing to maintain their employment with
the Company and such subsidiary after the Effective Time.
Section 1.59. ....Meeting of Stockholders. The Company hereby
covenants and agrees that it shall, as promptly as practicable, take
all action necessary in accordance with applicable law and its
Articles of Incorporation and Bylaws to convene a meeting of its
stockholders and shall use all commercially reasonable efforts to hold
such meeting as promptly as practicable after the date hereof. The
purpose of such meeting shall be, among other things, to consider and
vote upon the approval of this Agreement, the Merger, and the
transactions contemplated hereby. Subject to the fiduciary duties of
the Companys Board of Directors under applicable law as advised by
counsel, the Board of Directors of the Company shall recommend and
declare advisable such approval and the Company shall take all lawful
action to solicit such approval, including, without limitation, the
inclusion of the recommendation of the Board of Directors and the
Special Committee of the Company in the Proxy Statement that the
stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement.
Section 1.60. ....Proxy Materials. (a) As soon as practicable after
the date hereof, the Company shall promptly prepare, and Nemetschek
and Acquisition shall cooperate in the preparation of, and the Company
shall file with the SEC as soon as practicable, the Proxy Statement
and a form of proxy, in connection with the vote of the Companys
stockholders with respect to the Merger. The Company will use all
reasonable efforts to cause the Proxy Statement to be mailed to
stockholders of the Company at the earliest practicable date as
permitted by the SEC.
(b) If at any time prior to the Effective Time, any event relating to
or affecting the Company, Nemetschek, or Acquisition shall occur as a
result of which it is necessary, in the opinion of counsel for the
Company, Nemetschek, or Acquisition, to supplement or amend the Proxy
Statement in order to make such document not misleading in light of
the circumstances existing at the time approval of the stockholders of
the Company is sought, the Company, Nemetschek, or Acquisition,
respectively, will notify the other parties hereto thereof and, in the
case of Nemetschek and Acquisition, it will cooperate with the Company
in preparing, and, in the case of the Company, it will prepare and
file, an amendment or supplement with the SEC and, if required by law
or the rules and regulations under the Exchange Act, applicable state
securities authorities and each national securities exchange upon
which the Company Common Stock is then listed for trading and/or
quotation system on which such stock is quoted such that such
document, as so supplemented or amended, will not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances existing at such time, not misleading, and the Company
will, as required by law, disseminate to its stockholders such
amendment or supplement.
Section 1.61. ....Filings; Other Action. The Company, Nemetschek, and
Acquisition shall: (a) to the extent required, promptly make all
filings and thereafter make any other required submissions under the
HSR Act with respect to the Merger; (b) use all reasonable efforts to
cooperate with one another to (i) determine which Authorizations are
required to be made or obtained prior to the Effective Time in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and (ii) timely
make and seek all such Authorizations; (c) use all reasonable efforts
to obtain in writing any consents required from third parties in form
reasonably satisfactory to the Company, Nemetschek, and Acquisition
necessary to effectuate the Merger; (d) use all reasonable efforts to
promptly take, or cause to be taken, all other actions and do, or
cause to be done, all other things necessary, proper or appropriate to
satisfy the conditions set forth in Article VIII and to consummate and
make effective the transactions contemplated by this Agreement on the
terms and conditions set forth herein as soon as practicable,
including seeking to remove promptly any injunction or other legal
barrier that may prevent such consummation; provided, however, that
notwithstanding anything to the contrary in this Agreement, no party
nor any of its Affiliates shall be required to make any disposition
of, or enter into any agreement to hold separate, any asset or
business and no party hereto nor any of their Affiliates shall be
required to make any payment of money nor shall any party or its
Affiliates be required to comply with any condition or undertaking or
take any action which, individually or in the aggregate, would
materially adversely affect the economic benefits to such party of the
transactions contemplated hereby, taken as a whole, or materially
adversely affect any other business of such party; and (e) not take
any action that might reasonably be expected to impair the ability of
the parties to consummate the Merger at the earliest possible time.
Section 1.62. ....Access to Information. From the date hereof until
the Effective Time, the Company and its Subsidiaries (i) will give
Nemetschek, its counsel, financial advisors, accountants, auditors and
other authorized representatives full access to the offices,
properties, books and records, and personnel of the Company and its
Subsidiaries during reasonable business hours, (ii) will furnish
copies to the Company, its counsel, financial advisors, accountants,
auditors and other authorized representatives such financial and
operating data and other information as such persons may reasonably
request, and which is in the possession of or can be obtained by the
Company and its Subsidiaries without undue expense, and (iii) will
instruct their respective employees, counsel, financial advisors and
accountants to cooperate with Nemetschek in its investigation of the
business of the Company and its Subsidiaries.
Section 1.63. ....Intellectual Property Rights. Prior to the Effective
Time, the Company and its Subsidiaries shall use all reasonable
efforts to cooperate with Nemetschek in obtaining all assignments or
other consents, if any, necessary with respect to Intellectual
Property, to the extent not already owned by the Company and its
Subsidiaries, including all interests that may hereafter become
Intellectual Property prior to the Effective Time. Section 1.64.
....Notice of Certain Events. Each party hereto shall promptly notify
the other party of: (i) any notice or other communication from any
Person alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any Governmental Authority
in connection with the transactions contemplated by this Agreement;
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to, or
involving or otherwise affecting, such party which, if pending on the
date of this Agreement, would have been required to have been
disclosed or which relate to the consummation of the transactions
contemplated by this Agreement, and (iv) any event or matter known to
or directly involving such party that would result in a breach of this
Agreement, is reasonably likely to result in a Material Adverse Effect
on such party or impair the ability of such party to consummate the
transactions contemplated hereby.
Section 1.65. ....Certain Actions.
(a) The Company agrees that neither it nor any of its Subsidiaries nor
any of the officers and directors of it or its Subsidiaries shall, and
that it shall use its reasonable best efforts to cause its and its
Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, (i) initiate, solicit,
encourage or knowingly facilitate any inquiries or the making of any
proposal or offer with respect to, or a transaction to effect, a
merger, reorganization, share exchange, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving it or any of its Significant Subsidiaries (as
defined in Rule 1-02 of Regulation S-X of the SEC, or any purchase or
sale of the consolidated assets (including without limitation stock of
its Subsidiaries) of such party and its Subsidiaries, taken as a
whole, or any purchase or sale of, or tender exchange offer for, the
equity securities of such party that, if consummated, would result in
any Person (or the stockholders of such Person) beneficially owning
securities representing 10% or more of the total voting power of such
party (or of the surviving parent entity in such transaction) or any
of its Significant Subsidiaries (any such proposal, offer or
transaction (other than a proposal or offer made by the other party or
an Affiliate thereof) being hereinafter referred to as an Acquisition
Proposal ), (ii) have any discussion with or provide any confidential
information or data to any Person relating to an Acquisition Proposal,
or engage in any negotiations concerning an Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement an
Acquisition Proposal, (iii) approve or recommend, or propose publicly
to approve or recommend, any Acquisition Proposal, or (iv) approve or
recommend, or propose to approve or recommend, or execute or enter
into, any letter of intent, agreement in principle, merger agreement,
acquisition agreement, option agreement or other similar agreement or
propose publicly or agree to do any of the foregoing related to any
Acquisition Proposal. The Company shall immediately instruct and
otherwise use its reasonable best efforts to cause its directors,
officers, employees, agents, the Company (including, without
limitation, any investment banker, attorney, or accountant retained by
it), consultants and other representatives to comply with such
prohibitions. The Company shall immediately cease and cause to be
terminated any existing activities, discussions, or negotiations with
any parties conducted heretofore with respect to such activities. The
Company shall promptly notify Nemetschek orally and in writing in the
event it receives any such inquiry or proposal and shall provide
reasonable detail of all relevant facts relating to such inquiries.
Notwithstanding the foregoing, the Board of Directors on behalf of the
Company shall be permitted to engage in any discussions or
negotiations with or provide any information to, any Person in
response to an unsolicited bona fide written Acquisition Proposal by
any such Person, if the Board of Directors of the Company, in its good
faith judgment and after receipt of the written advice of counsel,
determines that the failure to provide such information or engage in
such action would result in the members of the Board of Directors
breaching their fiduciary duties under applicable law, and clauses
(iii) and (iv) shall not be applicable with regard to an Acquisition
Proposal, if and only to the extent that, the Board of Directors of
the Company concludes in good faith that such Acquisition Proposal
constitutes a Superior Proposal. Superior Proposal means, with respect
to the Company, a bona fide written Acquisition Proposal for the
Company made by a Person (other than Nemetschek or any affiliates
thereof) as a result of which such party or its stockholders will own
40% or more of the combined voting power of the entity surviving and
which is on terms that the Company's Board of Directors in good faith
concludes (following receipt of the advice of its financial advisors
and outside counsel), taking into account, among other things, all
legal, financial, regulatory and other aspects of the proposal would,
if consummated, result in a transaction that is more favorable to its
stockholders, from a financial point of view, than the Merger and is
reasonably capable of being completed.
Section 1.66. ....Current Information. During the period from the date
of this Agreement to the Effective Time, the Company shall promptly
furnish Nemetschek with copies of all monthly and other interim
financial statements produced in the ordinary course of business as
the same become available and shall cause one or more of its
designated representatives to confer on a regular and frequent basis
with representatives of Nemetschek.
Section 1.67. ....Indemnification.
(a) Post-Merger Indemnification of Officers and Directors. The
Surviving Corporation agrees that all rights permitted under Maryland
law to indemnification, including provisions relating to advances of
expenses incurred in defense of any action or suit, existing in favor
of the present or former directors or officers of the Company
(collectively, the Indemnified Parties ) as provided in the Company's
Articles of Incorporation or By-Laws, as permitted by Maryland law and
in effect as of the date hereof, with respect to matters (including
the transactions contemplated by this Agreement) occurring at or prior
to the Effective Time, shall survive the Merger and shall continue in
full force and effect for a period of six (6) years from the Effective
Time. In the event any action or suit is asserted or commenced against
any Indemnified Party (whether before or after the Effective Time) as
to which such Indemnified Party would be entitled to indemnification
under rights provided by the Company and permitted by Maryland law,
the Surviving Corporation will be entitled to participate in and, to
the extent it may wish, to assume the defense thereof, except that if
the Surviving Corporation is a subject of such action or suit and
there is, under applicable standards of professional conduct, a
conflict on any significant issue between the position of the
Surviving Corporation and the position of such Indemnified Party, or
if the Surviving Corporation shall fail to assume responsibility for
such defense, such Indemnified Party may retain counsel who will
represent such Indemnified Party, and the Surviving Corporation shall
pay all reasonable fees and expenses of such counsel promptly as
statements therefor are received; provided, however, that such
Indemnified Party shall defend (or, if the defense is assumed by the
Surviving Corporation, use his reasonable efforts to assist in the
defense of) any such matter; provided, further, that the Surviving
Corporation shall not be liable for any settlement effected without
its written consent; and provided, further, that the Surviving
Corporation shall not have any further obligation hereunder to any
Indemnified Party with respect to a claim for indemnification
hereunder when and if a court of competent jurisdiction shall
ultimately determine, after exhaustion of all avenues of appeal or
after such time that any rights to prosecute an appeal have lapsed,
that such Indemnified Party is not entitled to indemnification
hereunder with respect to such claim. This covenant is intended to
benefit each of the Indemnified Parties.
(b) Procedures. Any Indemnified Party wishing to claim indemnification
under Section 7.11, upon learning of any such action or suit, shall
promptly notify the Surviving Corporation and shall deliver to the
Surviving Corporation an undertaking to repay any amounts advanced
pursuant thereto when and if a court of competent jurisdiction shall
ultimately determine, after exhaustion of all avenues of appeal or
after such time that any rights to prosecute an appeal have lapsed,
that such Indemnified Party is not entitled to indemnification
hereunder with respect to such claim. In no event may the indemnified
parties retain more than one law firm to represent them with respect
to any such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the
position of any two or more indemnified parties in which case the
Indemnified Parties may retain, at the expense of the Surviving
Corporation, such number of additional counsel as are necessary to
eliminate all conflicts of the type referred to above.
(c) Survival. The provisions of this Section 7.11 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified
Party, and his or her heirs and representatives.
Section 1.68. ....Stock Transfer Agreement. Nemetschek and Acquisition
hereby acknowledge and agree that, notwithstanding any other provision
of this Agreement or the agreements referred to herein, Richard Diehl
is expressly permitted to transfer up to 200,000 shares of Company
Common Stock to current employees of the Company prior to or
concurrent with the Closing.
CONDITIONS TO THE MERGERS
Section 1.69. Conditions to Each Partys Obligations. The
performance of the obligations of Nemetschek and Acquisition and the
Company to consummate the transactions contemplated by this Agreement
are subject to the fulfillment at or prior to the Effective Time of
each of the following conditions, which conditions may be waived only
with the consent of both (x) Nemetschek and Acquisition, and (y) the
Company:
(a) Company Shareholder Approval. This Agreement and the transactions
contemplated hereby shall have been duly approved by the requisite
holders of Company Common Stock in accordance with applicable
provisions of the MGCL and the Company's Articles of Incorporation and
Bylaws.
(b) Governmental Filings and Consents. Except for the filing of the
Articles of Merger, all governmental filings required to be made prior
to the Effective Time by Nemetschek, Acquisition, and the Company
with, and all governmental consents required to be obtained prior to
the Effective Time by Nemetschek, Acquisition, and the Company from,
governmental regulatory authorities in connection with the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been made or obtained,
except where the failure to make such filing or obtain such consent
would not reasonably be expected to have a Material Adverse Effect on
Nemetschek, Acquisition, or the Company or the ability of such parties
to consummate the transactions contemplated hereby, and any waiting
periods or extensions thereof under the HSR Act shall have expired or
been terminated.
(c) Third-Party Consents. All required authorizations, consents and
approvals of any third party (other than a governmental or regulatory
authority), the failure of which (either individually or in the
aggregate) to obtain would have a Material Adverse Effect on
Nemetschek, Acquisition, or the Company or the ability of such parties
to consummate the transactions contemplated hereby, shall have been
obtained.
(d) No Injunction or Proceedings. There shall not be in effect any
judgment, writ, order (including any temporary restraining order),
injunction or decree (collectively, an Order ) of any court or
Governmental Authority of competent jurisdiction restraining,
enjoining or otherwise preventing consummation of the transactions
contemplated by this Agreement or permitting such consummation only
subject to any condition or restriction unacceptable to either of (x)
Nemetschek and Acquisition, or (y) the Company, each in its reasonable
judgment, nor shall there be pending or threatened by any Governmental
Authority any suit, action or proceeding seeking to restrain or
restrict the consummation of the transactions contemplated hereby or
seeking damages in connection therewith, which, in the reasonable
judgment of either (x) Nemetschek and Acquisition, or (y) the Company,
could have (i) a Material Adverse Effect on (x) Nemetschek or
Acquisition, or (y) the Company after the Effective Time, or (ii) a
Material Adverse Effect on the ability of (x) Nemetschek or
Acquisition, or (y) the Company to perform their respective
obligations under this Agreement, nor shall there be pending any cause
of action or other proceeding commenced by a Governmental Authority of
competent jurisdiction seeking the imposition of an Order.
Section 1.70. ....Additional Conditions to Obligation of Nemetschek
and Acquisition.
The performance of the obligations of Nemetschek and Acquisition
hereunder is subject to the fulfillment at or prior to the Effective
Time of the following conditions (all or any of which may be waived in
whole or in part by Nemetschek and Acquisition acting by unanimous
written consent):
(a) Representations and Warranties. Each of the representations and
warranties of the Company made in this Agreement which are not, by
their terms, qualified by a materiality standard, shall have been true
and correct in all material respects as of the date hereof and shall
be true and correct in all material respects on and as of the
Effective Time as though made on and as of the Effective Time (and the
representations and warranties of the Company contained in this
Agreement which are, by their terms, qualified by a materiality
standard, shall have been true and correct on the date hereof and
shall be true and correct on and as of the Effective Time as though
made on and as of the Effective Time), except for representations and
warranties specifically relating to a time or times other than the
date hereof or thereof, which shall be true and correct in all
material respects (to the extent they are not, by their terms,
qualified by a materiality standard, and shall be true and correct to
the extent they are so qualified) at such specified time or times, and
except for changes thereto permitted or contemplated by this
Agreement.
(b) Compliance with Covenants and Agreements. The Company shall have
performed and complied in all material respects with all terms,
covenants, agreements, undertakings, acts, conditions and obligations
required by this Agreement to be performed or complied with by them
prior to or at the Effective Time.
(c) Officer's Certificate. Nemetschek shall have received a
certificate from the Company, dated as of the Effective Time, executed
by the President of the Company, certifying that (i) the Board of
Directors thereof has duly adopted resolutions, copies of which shall
be attached to such certificate, authorizing and approving the
transactions contemplated hereby (A) approving the terms of this
Agreement and any agreement to be delivered in accordance with this
Agreement and authorizing the consummation of the transactions
contemplated hereby and thereby, and (B) authorizing an officer
thereof to execute and deliver this Agreement and all ancillary
documents, (ii) all of such resolutions are in full force and effect,
and (iii) none of such resolutions has been amended or modified.
Nemetschek shall also have received a certificate from such officer of
the Company certifying that the representations and warranties of such
party contained in this Agreement that are not, by their terms,
qualified by a materiality standard, were true and correct in all
material respects when made and are true and correct in all material
respects on and as of the Effective Time as though made on and as of
the Effective Time (and that the representations and warranties of
such party contained in this Agreement that are, by their terms,
qualified by a materiality standard, were true and correct when made
and are true and correct on and as of the Effective Time as though
made on and as of the Effective Time), except to the extent they
relate to a particular date and except for changes permitted or
contemplated by this Agreement, and that such party has complied with
or performed in all material respects all terms, covenants,
agreements, undertakings, acts, conditions and obligations to be
complied with or performed by it on or prior to the Effective Time.
(d) Incumbency Certificate. Nemetschek shall have received a
certificate from the Company, signed by its Secretary or Assistant
Secretary and dated the Effective Time, certifying as to the person
executing this Agreement on behalf of such party that (i)such person
is an officer thereof holding the office or offices specified therein,
and (ii)the signature of each such person set forth on such
certificate is his or her genuine signature.
(e) Employment Agreements. The individual listed in Schedule 8.02(e)
shall have delivered to Nemetschek an Employment Agreement duly
executed by such party.
(f) Material Adverse Change. No event, change or development shall
exist or have occurred since August 31, 1999 with regard to the
Company, including the filing of any action, claim, suit, cause of
action, or litigation commenced by any third party against the
Company, that has had or reasonably could be expected to have a
Material Adverse Effect on the Company or its Subsidiaries (or on
Nemetschek or Acquisition assuming the transactions contemplated
hereby were consummated), or on the ability of (x) Nemetschek or
Acquisition, or (y) the Company to consummate the transactions
contemplated hereby.
(g) Approvals. The Board of Directors of the Company, at a meeting
duly called and held, shall have (A) determined that this Agreement,
the Merger and the transactions contemplated hereby are advisable on
the terms and conditions set forth herein and in the best interest of
the Company and its stockholders, and (B) approved this Agreement, the
Merger, and the transactions contemplated hereby and thereby and such
action shall not have been withdrawn, modified or revoked in any
manner.
(h) Support Agreement. The individuals listed in Schedule 8.02(h)
shall have delivered to Nemetschek the Support Agreement, duly
executed by such party.
(i) Resignations. Nemetschek shall have received the resignation of
each of the directors of the Board of Directors of the Company.
(j) Escrow Agreement. The party listed on Schedule 8.02(k) shall have
delivered to Nemetschek the Escrow Agreement, duly executed by such
party.
Section 1.71. ....Additional Conditions to Obligation of the Company.
The performance of the obligations of the Company hereunder is subject
to the fulfillment at or prior to the Effective Time, of each of the
following conditions (all or any of which may be waived in whole or in
part by the Company):
(a) Representations and Warranties. Each of the representations and
warranties of Nemetschek and Acquisition made in this Agreement which
are not, by their terms, qualified by a materiality standard, shall
have been true and correct in all material respects as of the date
hereof and shall be true and correct in all material respects on and
as of the Effective Time as though made on and as of the Effective
Time (and the representations and warranties of Nemetschek and
Acquisition contained in this Agreement which are, by their terms,
qualified by a materiality standard, shall have been true and correct
on the date hereof and shall be true and correct on and as of the
Effective Time as though made on and as of the Effective Time), except
for representations and warranties specifically relating to a time or
times other than the date hereof or thereof, which shall be true and
correct in all material respects (to the extent they are not, by their
terms, qualified by a materiality standard, and shall be true and
correct to the extent they are so qualified) at such specified time or
times, and except for changes thereto permitted or contemplated by
this Agreement.
(b) Compliance with Covenants and Agreements. Nemetschek and
Acquisition shall have performed and complied in all material respects
with all terms, covenants, agreements, undertakings, acts, conditions
and obligations required by this Agreement to be performed or complied
with by them prior to or at the Effective Time.
(c) Officer's Certificate. The Company shall have received a
certificate from Nemetschek and Acquisition, dated as of the Effective
Time, executed by the President or any Vice-President thereof
certifying that: (i) the Board of Directors (or comparable governing
body) thereof has duly adopted resolutions, copies of which shall be
attached to such certificate, (A) approving the terms of this
Agreement and any agreement to be delivered in accordance with this
Agreement and authorizing the consummation of the transactions
contemplated hereby and thereby, and (B) authorizing an officer
thereof to execute and deliver this Agreement and all ancillary
documents, (ii) all of such resolutions are in full force and effect,
and (iii) none of such resolutions has been amended or modified. The
Company shall also have received a certificate from such person
certifying that the representations and warranties of Nemetschek and
Acquisition contained in this Agreement that are not, by their terms,
qualified by a materiality standard, were true and correct in all
material respects when made and are true and correct in all material
respects on and as of the Effective Time as though made on and as of
the Effective Time (and that the representations and warranties of
such party contained in this Agreement that are, by their terms,
qualified by a materiality standard, were true and correct when made
and are true and correct on and as of the Effective Time as though
made on and as of the Effective Time), except to the extent they
relate to a particular date and except for changes permitted or
contemplated by this Agreement, and that Nemetschek and Acquisition
has complied with or performed in all material respects all terms,
covenants, agreements, undertakings, acts, conditions and obligations
to be complied with or performed by it on or prior to the Effective
Time.
(d) Incumbency Certificate. The Company shall have received a
certificate from Nemetschek and Acquisition, signed by its Secretary
or Assistant Secretary (or comparable officers) and dated as of the
Effective Time, certifying as to the person executing this Agreement
on behalf of such party that (i) such person is an officer thereof
holding the office or offices specified therein, and (ii) the
signature of each such person set forth on such certificate is his or
her genuine signature.
(e) Employment Agreement. The Company shall have executed and
delivered the Employment Agreement and the Escrow Agreement duly
executed by such party.
(f) Purchase Price. Nemetschek and/or Acquisition shall have made
arrangements for the payment of the Merger Consideration as
contemplated by Section 4.02.
TERMINATION
Section 1.72. ....Termination. This Agreement may be terminated and
the transactions contemplated in this Agreement may be abandoned at
any time prior to the Effective Time, whether before or after approval
by the stockholders of the Company of this Agreement and the Merger:
(a) by mutual written consent of Nemetschek, Acquisition, and the Company;
(b) by either Nemetschek and Acquisition (acting by unanimous written
consent) or the Company if, on the Effective Time, any condition
precedent to the obligations of the terminating party set forth in
Section 8.02 in the case of Nemetschek and Acquisition and Section
8.03 in the case of the Company shall not have been satisfied (or
waived by the terminating party); provided, however, that no party
shall have the right to terminate this Agreement pursuant to this
Section 9.01(b) if such party is then in breach of any material
representation or warranty contained herein or is in default in any
material respect in the observance or in the timely performance of any
of its covenants or agreements contained herein;
(c) by either Nemetschek and Acquisition (acting by unanimous written
consent) or the Company if there shall be in effect any permanent
injunction or action by any court of competent jurisdiction or other
Governmental Authority preventing the consummation of the Merger that
shall have become final and nonappealable;
(d) by either Nemetschek and Acquisition (acting by unanimous written
consent) or the Company if the Effective Time shall not have occurred
on or before June 30, 2000 (time is of the essence with respect to
such date); provided, however, that no party shall have the right to
terminate this Agreement pursuant to this Section 9.01(d) if such
party is then in breach of any material representation or warranty
contained herein or is in default in any material respect in the
observance or in the timely performance of any of its covenants or
agreements contained herein;
(e) by either Nemetschek and Acquisition (acting by unanimous written
consent) or the Company if this Agreement and the Merger shall have
been voted on by the stockholders of the Company at a meeting duly
convened therefor and fail to receive the requisite vote for approval
and adoption by the stockholders of the Company at the Stockholders
Meeting as provided under law and the Company's Charter;
(f) by Nemetschek and Acquisition (acting by unanimous written
consent) if (i) the Board of Directors of the Company shall withdraw,
modify or change its approval or recommendation of this Agreement or
the Merger in a manner adverse to Nemetschek and Acquisition or shall
have resolved to do any of the foregoing, or (ii) the Board of
Directors of the Company shall have approved and/or recommended to the
stockholders of the Company any Acquisition Proposal or be required to
do so.
Section 1.73. ....Notice. If any party elects to terminate this
Agreement pursuant to an applicable provision of Section 9.01, such
party shall give written notice of its election to the other parties
hereto at least two Business Days before such termination shall become
effective.
Section 1.74. ....Effect of Termination. Upon termination of this
Agreement pursuant to the terms of Section 9.01, this Agreement shall
become void and no longer be of any force or effect and there shall be
no liability on the part of any party or its respective directors,
officers or stockholders to the other parties hereto, other than as
provided in Section 9.04. Notwithstanding the foregoing, nothing
contained in this Agreement shall relieve any party from liability to
the extent that such termination results from the willful and material
breach by a party of any of its representations, warranties, covenants
or agreements set forth in this Agreement, whereupon the non-breaching
party or parties will have such rights and remedies as are available
to such party at law or in equity.
Section 1.75. ....Termination Fee. In the event Nemetschek and
Acquisition terminates this Agreement pursuant to Section
9.01(f)(i)-(ii), then the Company agrees that it shall pay a fee to
Nemetschek of 4.5 Million Dollars, plus an amount, not to exceed
500,000, equal to Nemetschek's and Acquisition's fees and expenses
incurred in connection with (or reasonably related to) the
transactions contemplated by this Agreement. Such fees and expenses
shall be payable in immediately available funds on the second Business
Day following the termination of this Agreement. Notwithstanding any
other provision of this Agreement, (i) such fees and expenses shall
not be paid pursuant to this Section 9.04 if Nemetschek or Acquisition
shall have breached in any material respect any of its material
representations, warranties, covenants, or agreements contained in
this Agreement, and (ii) the payment by the Company of the amounts
required to be paid pursuant to this Section 9.04 shall, except in the
case of willful breach of this Agreement by the Company, constitute
the exclusive remedy for, and full settlement of, any and all
liabilities and obligations of the Company for damages under this
Agreement.
GENERAL PROVISIONS
Section 1.76. ....Expenses. Except as otherwise expressly provided
herein, whether or not the transactions contemplated hereby are
consummated, each party shall bear its own expenses, including the
fees and expenses of any attorneys, accountants, investment bankers,
brokers, finders or other intermediaries or Persons engaged by it
incurred in connection with the preparation, negotiation and execution
of this Agreement and the transactions leading up to and contemplated
hereby and no other party shall have any liability with respect
thereto; provided, however, that the Company shall bear all costs and
expenses arising out of or incurred in connection with the
preparation, negotiation and execution of the Proxy Statement and the
Stockholders Meeting, including all printing, mailing, solicitation,
legal, accounting and other fees and expenses incurred with respect
thereto. In the event of termination of this Agreement, the
obligations of each party to pay its own expenses shall be subject to
any rights of such party arising from a breach of this Agreement by
another party, subject to Section 9.04.
Section 1.77. ....Notices, Etc. All notices, requests, demands or
other communications required by or otherwise permitted with respect
to this Agreement shall be in writing and shall be deemed to have been
duly given to any party if delivered by any of the following means of
delivery, and shall be deemed to have been duly delivered and received
on the date (or the next Business Day if delivery is not made on a
Business Day) of personal delivery or facsimile transmission or on the
date (or the next Business Day if delivery is not made on a Business
Day) of receipt, if mailed by registered or certified mail, postage
prepaid and return receipt requested, or on the date (or the next
Business Day if delivery is not made on a Business Day) of a stamped
receipt, if sent by overnight delivery service, and to the following
addresses (or to such other address as any party may request, in the
case of Nemetschek and Acquisition notifying the Company, and in the
case of the Company notifying Nemetschek or Acquisition.
(a) If to Nemetschek:
Nemetschek AG
Riedenburger Strasse 2
D-81677 Munich
Germany
Attn: Gerhard Weiss
Telephone: 011 49 89 92 793-427
Facsimile: 011 49 89 92 793-406
with a copy to:
Brown & Wood llp
1666 K Street, N.W.
Washington, D.C. 20006-4004
Attention: John K. Hughes
Facsimile: (202) 533-1399
(b) If to the Company:
Diehl Graphsoft, Inc.
10270 Old Columbia Road
Suite 100
Columbia, Maryland 21046
Attention: Richard Diehl
Facsimile: (410) 290-8050
with a copy to:
Venable, Baetjer and Howard, LLP
1800 Mercantile Bank & Trust Building
Two Hopkins Plaza
Baltimore, Maryland 21201
Attention: Bryson Cook
Facsimile: (410) 244-7742
Section 1.78. ....Binding Effect; No Assignment. This Agreement is
binding upon, shall inure to the benefit of, and be enforceable by,
each of the parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights and/or
obligations of any party hereunder may be assigned or delegated to any
Person without the prior written consent of the other parties hereto;
provided, however, that Nemetschek and Acquisitions may assign the
Agreement and any respective rights, interests, and obligations
hereunder to any Affiliate thereof but any such assignment shall not
relieve Nemetschek or Acquisition of their respective obligations
hereunder in the event such assignor does not perform such
obligations.
Section 1.79. ....Entire Agreement. Except as otherwise specifically
provided herein, this Agreement, including the Schedules contained in
the Disclosure Statement and any other written agreements by the
parties hereto that are expressly contemplated hereby to be entered
into, constitutes the entire agreement and understanding among the
parties with regard to the subject matter hereof and supersedes all
prior negotiations, agreements, arrangements, or understandings,
written or oral, relating to the matters provided for herein or
therein.
Section 1.80. ....Remedies Cumulative; Specific Performance. All
rights, powers and remedies provided under this Agreement or otherwise
available in respect hereof at law or in equity shall be cumulative
and not exclusive, and the exercise or commencement of the exercise of
any such remedies by any party hereunder shall not preclude the
simultaneous or subsequent exercise of any other such right, power or
remedy by such party. The parties acknowledge that money damages would
not be adequate remedy for violations of this Agreement and any party
may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or such other
relief as such court may deem just and proper to enforce this
Agreement or to prevent any violation hereof. Section 1.81.
....Waiver. Any party to this Agreement may extend the time for the
performance of any of the obligations or other acts of any other party
hereto, or waive compliance with any of the agreements of any other
party or with any condition to the obligations hereunder, in any case
only to the extent that such obligations, agreements and conditions
are intended for its benefit. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity or to insist
upon compliance by any other party hereto with its obligations
hereunder, and any custom, practice, or course of dealing with the
parties at variance with the terms hereof, shall not constitute a
waiver by such party of its right at any time to exercise any such or
other right, power or remedy or to demand such compliance.
Section 1.82. ....No Third-Party Beneficiaries. Except as expressly
provided in this Agreement, nothing contained herein is intended to or
shall confer on any Person other than the parties hereto and their
successors and permitted assigns any rights, benefits, remedies, or
claims under or by reason of this Agreement.
Section 1.83. ....Governing Law. This Agreement and all disputes
hereunder shall be governed by, and interpreted and construed in
accordance with, the internal laws of the State of Maryland without
regard to principles of conflict of laws.
Section 1.84. ....Section Headings; Interpretation. Reference in this
Agreement to a Section, Article, or Schedule, unless otherwise
indicated, shall constitute references to a Section or an Article of
this Agreement or a Schedule to the Disclosure Statement. The table of
contents, section headings and article titles contained in this
Agreement are for convenience of reference only and do not form a part
thereof and shall not affect in any way the meaning or interpretation
of this Agreement. Wherever the words include, includes or including
are used in this Agreement, they shall be deemed to be followed by the
words without limitation. The words herein, hereinafter, and
hereunder, and words of similar import used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision
of this Agreement. The parties agree that this Agreement is the
product of negotiations among sophisticated parties, all of whom were
represented by counsel, and each of whom had an opportunity to
participate in, and did participate in the drafting of each provision
hereto. Accordingly, ambiguities in this Agreement, if any, shall not
be construed strictly against any party hereto but rather shall be
given a fair and reasonable construction without regard to the rule of
contra proferentem.
Section 1.85. ....Severability. If any term of this Agreement or the
application thereof to any party or circumstance shall be held invalid
or unenforceable to any extent, the remainder of this Agreement and
the application of such term to the other parties or circumstances
shall not be affected thereby and shall be enforced to the fullest
extent permitted by applicable law, provided that in such event the
parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be
invalid or unenforceable) that will be valid and enforceable and will
carry out the parties intentions hereunder.
Section 1.86. ....Amendment. This Agreement may be amended or modified
at any time by written agreement signed by each of the parties hereto;
provided, however, that any amendment to this Agreement made
subsequent to the adoption by the stockholders of the Company of this
Agreement shall not alter or change (i) the amount or kind of
consideration to be paid in exchange for all or any of the shares of
Company Common Stock, (ii) any term of the Certificate of
Incorporation of the Company, or (iii) any of the terms and conditions
of this Agreement if such alteration or change would adversely affect
the stockholders of the Company.
Section 1.87. ....Further Assurances. Each of the parties hereto
agrees that, at any time and from time to time after the date hereof,
it shall, upon written request from the other party or parties hereto,
and without further consideration, perform such other and further
acts, and execute, acknowledge and deliver, or cause to be delivered,
such further instruments, documents or assurances as such other party
or parties reasonably may request for the purpose of carrying with
this Agreement.
Section 1.88. ....Public Announcements. Each of the parties will
consult with each other party before issuing, and provide such other
party the opportunity to review and comment upon, any press release,
advertisement or other public announcement with respect to the
transactions contemplated by this Agreement and no such party shall
issue any press release or news release or make any other public
statement prior to such consultation, review, and comment, except as
may be required in the written opinion of such party's counsel by
applicable law, court process, or the rules of any securities exchange
or automatic quotation system in which its securities are traded;
provided, however, that even in such circumstance the party required
to make such statement shall use reasonable efforts to provide a copy
of any such statement to the other party prior to release thereof and
afford such party reasonable opportunity to comment thereon.
Section 1.89. ....Exhibits and Schedules. The Exhibits and the
Schedules contained in the Disclosure Statement are being separately
delivered by the Company concurrently with the execution of this
Agreement and such receipt is being acknowledged by each of the
parties to this Agreement. All Exhibits and Schedules referred to in
this Agreement are an integral part of and are hereby incorporated
into this Agreement by reference.
Section 1.90. ....Counterparts. This Agreement may be executed by
exchanging facsimile signatures and in any number of counterparts,
each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument. Each
counterpart may consist of a number of copies, each signed by less
than all, but together signed by all, the parties hereto and this
Agreement shall be effective when each of the parties hereto has
exchanged executed signature pages with each of the other parties
hereto.
Section 1.91. ....Non-Survival of Representations and Warranties. The
representations and warranties contained in Articles V and VI of this
Agreement shall not survive the Effective Time, and after the
Effective Time, the Company, Acquisition and Nemetschek or their
respective officers or directors shall have no further obligation with
respect thereto. The covenants and agreements set forth in this
Agreement shall survive the Effective Time to the extent set forth
therein.
[Signature Page Follows]
Nemetschek AG
February 18, 2000
Page 51
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
NEMETSCHEK AKTIENGESELLSHAFT
By: /S/ GEORG NEMETSCHEK
Name: Georg Nemetschek
Title: CEO
DGI ACQUISITION CORP.
By: /S/ GEORG NEMETSCHEK
Name: Georg Nemetschek
Title: President
DIEHL GRAPHSOFT, INC.
By: /S/ RICHARD DIEHL
Name: Richard Diehl
Title: CEO
Richard Diehl
10270 Old Columbia Road
Suite 100
Columbia, Maryland 21046
February 18, 2000
Nemetschek AG
Riedenburger Strasse 2
D-81677 Munich
Germany
Attn: Gerhard Weiss
Re: Support/Voting Agreement
Gentlemen:
The undersigned understands that Diehl Graphsoft, Inc. (the Company )
and Nemetschek AG and/or an affiliate thereof (in either case, the
Acquiror ) are entering into an Agreement and Plan of Merger, dated as
of the date hereof (the Merger Agreement ), providing for, among other
things, the merger of Acquiror with and into the Company (the Merger
).
The undersigned is a stockholder of the Company (the Stockholder ) and
is entering into this letter agreement to induce the Acquiror to enter
into the Merger Agreement and to consummate the transactions
contemplated thereby. Capitalized terms used herein and not otherwise
defined herein shall have the meaning set forth in the Merger
Agreement.
The Stockholder confirms its agreement with the Acquiror as follows:
1. The Stockholder represents, warrants and agrees that Schedule A
annexed hereto sets forth all the shares of Company Common Stock that
the Stockholder and his affiliates (as defined under the Securities
Exchange Act of 1934, as amended) are the record or beneficial owner
of (the Shares ) and that the Stockholder and his affiliates are on
the date hereof the lawful owners of the number of Shares set forth in
Schedule A, free and clear of all liens, charges, encumbrances, voting
agreements and commitments of any kind, except as disclosed in
Schedule A. Except as set forth in Schedule A, neither the Stockholder
nor any of his affiliates own or hold any rights to acquire any
additional shares of the capital stock of the Company (by exercise of
stock options or otherwise) or any interest therein or any voting
rights with respect to any additional shares.
2. The Stockholder agrees that he will not, will not permit any Person
controlled by the Stockholder to, and will not permit any of his
affiliates to, contract to sell, sell or otherwise transfer or dispose
of any of the Shares or any interest therein or securities convertible
therein or any voting rights with respect thereto, other than (i)
pursuant to the Merger, or (ii) with the prior written consent of
Acquiror; provided, however, that notwithstanding any other provision
of this Agreement, the Stockholder is expressly permitted to transfer
up to 200,000 shares of Company Common Stock in the aggregate to the
individuals listed on Schedule B prior to or concurrent with the
Closing; provided, further that concurrently with any such transfer to
Messrs. Webster and Flaherty, such parties shall each execute and
deliver to Acquiror a Support/Voting Agreement, substantially similar
to this Agreement, except that such agreements shall not include the
right of Nemetschek to an option for such stock. The Stockholder shall
be permitted to (x)vote in favor of any other bona fide written
Acquisition Proposal by any other Person that has been recommended by
the Company's Board of Directors as contemplated by Section 7.09 of
the Merger Agreement, if and only to the extent that, (i) the
Companys stockholders meeting with respect to the Merger Agreement
shall not have occurred, and (ii) the Company's Board of Directors
concludes in good faith (following receipt of the advice of its
financial advisor and outside counsel) that (A) such acquisition
proposal constitutes a Superior Proposal, and (B) the failure to take
such action would be inconsistent with its fiduciary duties under
applicable law, and (y)subject to the option granted in Paragraph 5
of this letter agreement, sell the Shares in connection with such
Acquisition Proposal that constitutes a Superior Proposal.
3. The Stockholder agrees to, will cause any Person controlled by the
Stockholder to, and will cause his affiliates to, cooperate fully with
Acquiror in connection with the Merger Agreement and the transactions
contemplated thereby. The Stockholder agrees that he will not, will
not permit any Person controlled by the Stockholder to, and will not
permit any of his affiliates to, directly or indirectly (including
through its officers, directors, employees or other representatives),
solicit any inquiries or the making of any proposal with respect to,
or negotiate with any other Person with respect to, any Acquisition
Proposal with any Person other than Acquiror (a Competing Transaction
); provided, however, that nothing herein shall prevent the
Stockholder from taking any action or omitting to take any action (i)
solely as a member of the Board of Directors of the Company required
so as not to violate such Stockholder's fiduciary obligations as a
director as so advised by outside counsel in writing, or (ii) as
directed by the Board of Directors of the Company so long as such
direction is not made in violation of any of the terms of the Merger
Agreement or any other provision of this letter agreement.
4. The Stockholder agrees that all of the Shares beneficially owned by
the Stockholder or his affiliates, or over which the Stockholder or
any of his affiliates has voting power or control, directly or
indirectly (including any common shares of the Company acquired after
the date hereof), at the record date for any meeting of stockholders
of the Company called to consider and vote to approve the Merger and
the Merger Agreement and/or the transactions contemplated thereby will
be voted by the Stockholder or his affiliates in favor thereof except
as otherwise permitted by the final sentence of Paragraph 2.
5. (a) Subject to the terms of this Section 5, the Stockholder hereby
grants to Nemetschek an irrevocable option (the Option ) to purchase,
in whole but not in part, at the election of Nemetschek, such number
of the Stockholder's Shares such that after such exercise, Nemetschek
would own not less than 30% of the outstanding common stock of the
Company. The purchase price for such shares (the Purchase Price )
shall be paid in cash, with each Share being deemed to have a value
equal to the greater of the Merger Consideration (as defined in the
Merger Agreement) or the average trading price of the Company Common
Stock during the five day period immediately prior to the exercise of
the Option, which average shall be reduced by 50% of the difference
between the value of the Merger Consideration and such average trading
price. (b) Subject to the terms and conditions of this Agreement, if
Nemetschek elects to exercise the Option in accordance with Section
5(a) hereof, the Stockholder will, at the closing (as defined in
Section 5(c)), sell, transfer, assign and deliver the Stockholder's
Shares to Nemetschek, and Nemetschek will acquire, accept, purchase
and pay for the Stockholder's Shares.
(c) The Option may only be exercised by Nemetschek, in whole but not
in part, following the occurrence of a Purchase Event (as defined
below); provided, however, that the Option shall terminate upon the
earlier of (i) the Effective Time, (ii) termination of the Merger
Agreement in accordance with its terms (other than upon or during the
continuance of a Purchase Event), and (iii) three months following any
termination of the Merger Agreement upon or during the continuance of
a Purchase Event (or, if, at the expiration of such three month period
the Option cannot be exercised by reason of any applicable judgment,
decree or order, 20 Business Days after such impediment to exercise
shall have been removed or shall become final and not subject to
appeal) at which time all rights and obligations under this Agreement
shall terminate. The term Purchase Event shall mean any of the
following events or transactions occurring after the date hereof: (i)
the Company shall have entered into an agreement to engage in an
Acquisition Proposal; or (ii) the Merger Agreement shall have been
terminated by Nemetschek or the Company under circumstances that would
entitle Nemetschek to termination fees under the Merger Agreement. In
the event Nemetschek wishes to exercise the Option, Nemetschek shall
send a written notice (a Closing Notice ) to the Stockholder
specifying a place and time (the Closing Date ) between one and ten
Business Days inclusive from the date of the Closing Notice for the
closing of such purchase (the Closing ).
(d) Subject to the terms and conditions of this Agreement, in reliance
on the representations, warranties and covenants of the Stockholder
contained herein and in full payment for the Shares, at the Closing,
Nemetschek will deliver, or cause to be delivered, to the Stockholder,
the Purchase Price to be paid pursuant to Section 5(a). At the
Closing, the Stockholder will deliver, or cause to be delivered, to
Nemetschek certificates representing such Stockholder's Shares duly
endorsed to Nemetschek or accompanied by stock powers duly executed by
the Stockholder in blank, together with any necessary stock transfer
stamps properly affixed.
(e) In the event of any change in the Company Common Stock by reason
of stock dividends, split-ups, mergers, recapitalizations,
combinations, conversions, exchanges of shares or the like, (i) the
number and kind of Shares subject to this Section 5 of this Agreement
and the purchase price per Share pursuant to the Option shall be
appropriately adjusted to reflect changes made in the Company Common
Stock so that Nemetschek shall receive, upon exercise of the Option
and payment of the Purchase Price, the number and class of shares that
Nemetschek would have received in respect of the Shares if the Option
had been exercised and the Shares had been issued to Nemetschek
immediately prior to such event or the record date therefor, as
applicable, and (ii) the term Shares shall be deemed to refer to and
include the Shares as well as all such stock dividends and
distributions and any securities into which or for which any or all of
the Shares may be changed or exchanged and such dividends,
distributions and shares, as the case may be, shall be paid to
Nemetschek at the Closing or promptly following the receipt of such
dividend or distribution, if the Closing theretofore shall have
occurred.
6. The Stockholder has all necessary power and authority to enter into
this letter agreement. This letter agreement is the legal, valid and
binding agreement of the Stockholder and is enforceable against the
Stockholder in accordance with its terms.
7. The Stockholder agrees that money damages would be an inadequate
remedy for the breach by Stockholder of any term or condition of this
letter agreement and that Acquiror shall be entitled to a temporary
restraining order and preliminary and permanent injunctive relief in
order to enforce the agreements set forth herein. This letter
agreement will be governed by and constructed in accordance with
Maryland law.
[SIGNATURE PAGE FOLLOWS]
This letter agreement may be executed by facsimile signature and in
counterparts and may be terminated by Acquiror at any time. Please
confirm that the foregoing correctly states the understanding between
us by signing and returning a counterpart hereof.
Sincerely,
RICHARD DIEHL
By: /S/ RICHARD DIEHL
Name: Richard Diehl
Confirmed as of the date
first above written:
NEMETSCHEK AG
By: /S/ GEORG NEMETSCHEK
Name: Georg Nemetschek
Title: CEO
Schedule A
Name Number of Shares
Richard Diehl 1,933,055
Schedule B
Name Number of Shares
Donald Webster 70,000
Sean Flaherty 70,000
Other Diehl Graphsoft, Inc. Employees 60,000
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
(a) February 18, 2000
Diehl Graphsoft, Inc.
(Exact name of registrant as specified in its charter)
Maryland 0-24318 52-1407016
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
10270 Old Columbia Road, Columbia, Maryland 21046
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 410-290-5114
<PAGE>
ITEM 5. OTHER EVENTS
Diehl Graphsoft, Inc., a Maryland corporation ( Diehl Graphsoft ),
Nemetschek Aktiengesellshaft, a German corporation ( Nemetschek ), and
DGI Acquisition Corp., a Maryland corporation and wholly owned
subsidiary of Nemetschek ( MergerSub ), have entered into an Agreement
and Plan of Merger, dated as of February 18, 2000 (the Merger
Agreement ). The Merger Agreement and the press release issued in
connection therewith are filed herewith as Exhibits 2.1 and 99.1,
respectively, and are incorporated herein by reference. The
description of the Merger Agreement set forth herein does not purport
to be complete and is qualified in its entirety by the provisions of
the Merger Agreement.
The Merger Agreement provides, among other things, for the merger of
MergerSub with and into Diehl Graphsoft (the Merger ), whereupon Diehl
Graphsoft will become a wholly-owned subsidiary of Nemetschek. In the
Merger, each share of common stock, par value 0.01 per share, of Diehl
Graphsoft that is issued and outstanding prior to the effective time
of the Merger (other than certain shares specified in the Merger
Agreement) shall be converted into the right to receive, without
interest, an amount in cash equal to 9.50.
The Merger is subject to various closing conditions, including,
without limitation, the approval and adoption of the Merger Agreement
and the Merger by Diehl Graphsoft's stockholders, the expiration or
termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, the execution of
an employment agreement by Richard Diehl, the current Chairman and
Chief Executive Officer of Diehl Graphsoft, pursuant to which he will
be Chief Executive Officer of the surviving entity, and the deposit of
2 million into escrow by Mr. Diehl to secure his performance under the
employment agreement. Mr. Diehl has entered into a Support/Voting
Agreement, dated February 18, 2000, with Nemetschek pursuant to which
he has agreed (i) to support the Merger and (ii) to grant Nemetschek
an option to purchase up to 30% of the outstanding shares of common
stock of Diehl Graphsoft held by him under certain circumstances. The
description of the Support/Voting Agreement set forth herein does not
purport to be complete and is qualified in its entirety by the
provisions of such agreement, which is filed herewith as Exhibit 99.2
and incorporated herein by reference.
<PAGE>
TEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit 2.1 Agreement and Plan of Merger, dated as of February 18,
2000, by and among Diehl Graphsoft, Inc., Nemetschek Aktiengesellshaft
and DGI Acquisition Corp.
Exhibit 99.1 Press Release of Diehl Graphsoft, Inc. dated February 18, 2000.
Exhibit 99.2 Support Agreement, dated as of February 18, 2000, by and
among Richard Diehl and Nemetschek Aktiengesellshaft
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DIEHL GRAPHSOFT, INC.
Date: February 22, 2000 By:/S/ RICHARD DIEHL
Richard Diehl
President
BA3DOCS1\0136797.01
Section 1.92. EXHIBIT 99.1
For further information contact Barton Greer, 410-290-5114, X657;
[email protected]
Section 1.93. Diehl Graphsoft Acquired by Nemetschek AG for 30 Million
Deal establishes US presence for European software giant
Columbia, MD, February 22, 2000 Representatives of computer aided
design (CAD) software developer, Diehl Graphsoft, Inc. (Nasdaq DIEG),
today announced that it has been acquired by IT/AEC software
development firm, Nemetschek AG, for 9.50 per share in cash in a deal
valued at approximately 30 Million. Under terms of the agreement,
Diehl Graphsoft will operate as a wholly-owned subsidiary of the
publicly held, Munich, Germany based firm.
The move positions Diehl Graphsoft as Nemetschek AGs sole US
subsidiary, joining the Nemetscheks network of more than 40 branches
and subsidiaries throughout Europe, including: Germany, Austria,
Switzerland, Italy, France, Spain, Bulgaria, Croatia, Poland, Russia,
Slovak Republic, Hungary, and Czech Republic. In keeping with its
stated objectives of superior earnings growth and rapid expansion into
international markets, Nemetschek AG integrated or acquired seven
enterprises before its initial public offering (IPO) in March 1999,
and has acquired eight additional enterprises since that time.
We have a very clear acquisition strategy, which is based on two
principles. We only acquire very successful companies which have
proved to be the best players in their segment of the market,
explained Nemetschek Chairman, Prof. Georg Nemetschek. We integrate
their first-rate products into our existing product portfolio, thus
creating a unique range of products on the market. At the same time
the new associate and subsidiary companies contribute with their sales
and earnings, he added. Diehl Graphsoft officials say they plan to
utilize their existing distribution channels to market some Nemetschek
products, although Nemetscheks high-end CAD offering, ALLPLAN, and
Diehl Graphsofts mid-range CAD product, VectorWorks, will not be
consolidated and will continue to be marketed through separate
channels.
Diehl Graphsoft founder and CEO, Richard Diehl, says the most
immediate impact of the merger will be the availability of Nemetschek
AG products via Diehl Graphsofts international distribution channels.
This acquisition allows both firms to maximize the synergies each
brings to the computer aided design and systems integration markets.
We will all benefit from sharing our technologies and advancing the
bar via new product development across several target markets, offered
Diehl. We are very pleased with this outcome and are excited about the
promise this merger holds, he added.
Diehl Graphsofts consistently strong sales and its consistent
advances in CAD technology make it a valuable asset in our strategy
for expanding our international reach, he said. This acquisition
allows us to immediately establish a strong presence in the US AEC CAD
software market and further expand our international market position,
Prof. Nemetschek concluded.
Diehl Graphsoft representatives report that the acquisition will not
affect its announced strategy of expanding its product line and
developing new, market specific add-ons. The first new product
developed under this strategy, VectorWorks ARCHITECT, was released at
the MacWorld Expo in January. Early sales figures indicate that the
product has been very well received by the architectural CAD market
says Diehl.
Nemetschek AG, founded as a consulting firm in 1963 by civil engineer,
Professor Georg Nemetschek, is one of the largest architectural
software vendors in the world, with annual revenues exceeding US 120
million (245 million DEM). Nemetschek is one of the worlds largest
full-solution vendors of information and communications technology for
the design, construction and management of buildings and real estate.
Its flagship product, ALLPLAN, is an AEC CAD market leader in Germany
and Europe. Headquartered in Columbia, Maryland, Diehl Graphsoft has
been publicly traded since 1995 and is a leading international
developer of CAD software and has designed CAD software for the
personal computer since 1985. Its flagship product, MiniCAD
VectorWorks, is the best-selling CAD software on the Macintosh
platform and has a growing presence in the Windows market. It is the
most popular CAD software in Japan according to independent nationwide
surveys conducted by Kenchiku-Chishiki, a leading architecture
publication there. VectorWorks is used by design professionals in more
than 80 countries and is marketed in more than 14 languages. The
Nemetschek group's software solutions are used in more than 70,000
companies, in 53 countries and are marketed in 13 languages. In
connection with the Private Securities Litigation Reform Act of
1995(the Litigation Reform Act ), the Company is hereby disclosing
certain cautionary information to be used in connection with written
materials (including this press release) and oral statements made by
or on behalf of its employees and representatives that may contain
forward looking statements within the meaning of the Litigation Reform
Act. Such statements consist of any statement other than a recitation
of historical fact and can be identified by the use of forward looking
terminology such as may, expect, anticipate, estimate or continue or
the negative thereof or other variations thereon or comparable
terminology. The listener or reader is cautioned that all forward
looking statements are necessarily speculative and there are numerous
risks and uncertainties that could cause actual events or results to
differ materially from those referred to in such forward looking
statements including those risks reported in the Company's Annual
Report on Form 10KSB for the fiscal year ended May 31, 1999 and in
other reports, documents and statements distributed by the Company.
The reader or listener is cautioned that the Company does not have a
policy of updating or revising forward looking statements and thus he
or she should not assume that silence by management over time means
that actual events are bearing out as estimated in such forward
looking statements.
60
