<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
NEW DIMENSION SOFTWARE LTD.
(Name of Issuer)
BMC SOFTWARE, INC.
(Bidder)
ORDINARY SHARES, NIS 0.01 PAR VALUE
(Title of Class of Securities)
M74295102
(CUSIP Number of Class of Securities)
BRINKLEY MORSE
2101 CITYWEST BLVD.
HOUSTON, TEXAS 77042-2827
(713) 918-8800
SENIOR VICE PRESIDENT
BMC SOFTWARE, INC.
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Bidders)
COPY TO:
JOHN S. WATSON
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
1001 FANNIN
HOUSTON, TEXAS 77002-6760
(713) 758-2222
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CALCULATION OF FILING FEE
<TABLE>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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<S> <C>
$693,504,157.50 $138,701
</TABLE>
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* For purposes of calculating the amount of the filing fee only. This amount
assumes the purchase of 12,258,898 outstanding ordinary shares, NIS 0.01 per
share (the "Shares"), of New Dimension Software Ltd., an Israeli corporation,
and of 950,705 Shares, which may be issued upon the exercise of outstanding
options to purchase such Shares, in each case, at a per Share purchase price
of $52.50. Such number of Shares represents all of the Shares outstanding as
of March 10, 1999, plus Shares which may be issued upon the exercise of
outstanding options.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent
of the aggregate value of cash offered by BMC Software, Inc. for such number
of Shares.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: Not Applicable Form or Registration No.: Not Applicable
Filing Party: Not Applicable Date Filed: Not Applicable
</TABLE>
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<PAGE> 2
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by BMC Software, Inc., a Delaware corporation ("Purchaser"), to
purchase all outstanding ordinary shares, par value NIS 0.01 per share (the
"Shares"), of New Dimension Software Ltd., an Israeli corporation (the
"Company"), at a purchase price of $52.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated March 11, 1999 (the "Offer to Purchase"), and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Purchaser and the Company have entered
into a Share Purchase and Tender Agreement (the "Tender Agreement"), dated as of
March 7, 1999. Purchaser has also entered into shareholder agreements with (i)
Yossie Hollander and (ii) with Roni A. Einav, Dalia Prashker and Einav Computer
Systems, an Israeli corporation (each a "Principal Shareholder" and
collectively, the "Principal Shareholders"), each dated as of March 7, 1999 (the
"Shareholder Agreements"), pursuant to which (a) the Principal Shareholders have
agreed to tender into the Offer all of their Shares, which, on the date of the
Tender Agreement, represented an aggregate of 7,482,500 Shares or 61.0% of the
issued and outstanding Shares, (b) the Principal Shareholders have granted to
Purchaser an irrevocable option to purchase all of such Shares in certain
circumstances, and (c) each Principal Shareholder has granted to Purchaser an
irrevocable proxy to vote such Principal Shareholder's Shares with respect to
matters relating to the Tender Agreement, the Offer or matters inconsistent with
the Offer. The Tender Agreement and the Shareholder Agreements are more fully
described in Section 12 of the Offer to Purchase.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is New Dimension Software Ltd., an
Israeli corporation (the "Company"). The address of the Company's principal
executive offices is Building 7, Atidim Industrial Park, Devora Hanevia Street,
Tel Aviv, 61581, Israel.
(b) The information set forth on the cover page of, in the "Introduction"
to, and in Section 1, "Terms of the Offer," of, the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6, "Price Range of the Shares;
Dividends on the Shares," of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is being filed by Purchaser. The information
set forth on the cover page of, in the "Introduction" to, in Section 9, "Certain
Information Concerning Purchaser," of, and in Schedule I, "Directors and
Executive Officers of Purchaser" to, the Offer to Purchase is incorporated
herein by reference. The name, residence or business address, citizenship,
present principal occupation or employment and material occupations during the
last 5 years of each executive officer and director of Purchaser is set forth in
Schedule I of the Offer to Purchase.
(e) and (f) During the last five years, neither Purchaser nor, to its
knowledge, any of the persons listed on Schedule I to the Offer to Purchase, has
been (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, or finding any violation
of, federal or state securities laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) Except as set forth in Section 11, "Background of the Offer" and
Section 12, "Purpose of the Offer; Plans for the Company; Tender Agreement;
Shareholder Agreements; Other Agreements; Related Matters -- Tender Agreement"
of the Offer to Purchase, which is incorporated herein by reference, neither
Purchaser nor, to its knowledge, any of the persons listed in Schedule 1 of the
Offer to Purchase, has entered
<PAGE> 3
into any transaction with the Company, or any of the Company's affiliates which
are corporations, since the commencement of the Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal to
or greater than one percent of the consolidated revenues of the Company for (i)
the fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transactions occurred in such
year.
(a)(2) Neither Purchaser nor, to its knowledge, any of the persons listed
in Schedule I of the Offer to Purchase, has entered into any transaction since
the commencement of the Company's third full fiscal year preceding the date of
this Statement, with the executive officers, directors or affiliates of the
Company which are not corporations, in which the aggregate amount involved in
such transaction or in a series of similar transactions, including all periodic
installments in the case of any lease or other agreement providing for periodic
payments or installments, exceeded $40,000.
(b) Not applicable.
ITEM 4. SOURCES AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in the "Introduction" to, and in
Section 10, "Source and Amount of Funds," of, the Offer to Purchase is
incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(e) The information set forth in the "Introduction" to, and in Section
12, "Purpose of the Offer; Plans for the Company; Tender Agreement; Shareholder
Agreements; Other Agreements; Related Matters," and Section 13, "Dividends and
Distributions," of, the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 7, "Effect of the Offer on
the Market for the Shares; Nasdaq National Market Listing and Exchange Act
Registration; Margin Regulations" of the Offer to Purchase is incorporated
herein by reference.
Other than as set forth in the "Introduction" to, or the above-referenced
sections of, the Offer to Purchase, Purchaser has no plans or proposals that
relate to, or would result in, any transaction, change or other occurrence with
respect to the Company or the Shares that is set forth in any of the paragraphs
(a) through (g) of Item 5 of this Statement.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the "Introduction" to, and in
Section 9, "Certain Information Concerning Purchaser," and Section 12, "Purpose
of the Offer; Plans for the Company; Tender Agreement; Shareholder Agreements;
Other Agreements; Related Matters," of, the Offer to Purchase is incorporated
herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "Introduction" to, and in Section 9,
"Certain Information Concerning Purchaser," Section 11, "Background of the
Offer," Section 12, "Purpose of the Offer; Plans for the Company; Tender
Agreement; Shareholder Agreements; Other Agreements; Related Matters," and
Section 16, "Fees and Expenses," of, the Offer to Purchase is incorporated
herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the "Introduction" to, and in Section 16,
"Fees and Expenses," of, the Offer to Purchase is incorporated herein by
reference.
<PAGE> 4
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9, "Certain Information Concerning
Purchaser," of the Offer to Purchase is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between Purchaser or to its knowledge, any of the persons listed in Schedule I
of the Offer to Purchase, and the Company, or any of its executive officers,
directors, controlling persons or subsidiaries.
(b) and (c) The information set forth in Section 10, "Source and Amount of
Funds," and Section 15, "Certain Legal Matters," of the Offer to Purchase is
incorporated herein by reference.
(d) The information set forth in Section 7, "Effect of the Offer on the
Market for the Shares; Nasdaq National Market Listing and Exchange Act
Registration; Margin Regulations," and Section 15, "Certain Legal Matters," of
the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated March 11, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Certificate of Foreign Status on Form W-8.
(a)(8) Form of Summary Advertisement dated March 11, 1999.
(a)(9) Text of Press Release of Purchaser dated March 8, 1999.
(a)(10) Text of Press Release of the Company dated February 3, 1999.
(b)(1) Commitment Letters, dated March 10, 1999, to Purchaser from Proposed
Lenders.
(c)(1) Share Purchase and Tender Agreement, dated March 7, 1999, between
Purchaser and Company.
(c)(2) Shareholder Agreement, dated March 7, 1999, between Purchaser and
Yossi Hollander.
(c)(3) Shareholder Agreement, dated March 7, 1999, between Purchaser, Roni
A. Einav, Dalia Prashker and Einav Computer Systems.
(c)(4) Form of Director Release entered into as of March 7, 1999 between
the Company and each of Nahum Rozman, Eli Talmor and Yehuda Kahane.
(c)(5) Third Amendment to Distribution Agreement between the Company and
Boole & Babbage Europe dated October 28, 1994, as amended on April 24, 1997 and
October 31, 1997, effective as of March 6, 1999.
<PAGE> 5
(c)(6) Letter agreement, dated as of March 7, 1999, regarding Fourth
Amendment to Distribution Agreement between BMC Software, Inc. and the Company.
(c)(7) Settlement and Release Agreement dated March 7, 1999 among Yossie
Hollander, New Dimension Software Ltd., Roni A. Einav, Dalia Prashker, Einav
Computer Systems, Yehuda Kahane, Nahum Rozman and Eli Talmor.
(d) None.
(e) Not applicable.
(f) None.
<PAGE> 6
SIGNATURES
After due inquiry and to the best of my knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: March 11, 1999
BMC SOFTWARE, INC.
By: /s/ M. BRINKLEY MORSE
----------------------------------
Name: M. Brinkley Morse
Title: Senior Vice President,
Corporate Development
<PAGE> 7
EXHIBIT INDEX
<TABLE>
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EXHIBIT
NUMBER DESCRIPTION
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(a)(1) -- Offer to Purchase dated March 11, 1999.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Notice of Guaranteed Delivery.
(a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Certificate of Foreign Status on Form W-8.
(a)(8) -- Form of Summary Advertisement dated March 11, 1999.
(a)(9) -- Text of Press Release of Purchaser dated March 8, 1999.
(a)(10) -- Text of Press Release of the Company dated February 3, 1999.
(b)(1) -- Commitment Letters, dated March 10, 1999, to Purchaser from
Proposed Lenders.
(c)(1) -- Share Purchase and Tender Agreement, dated March 7, 1999,
between Purchaser and Company.
(c)(2) -- Shareholder Agreement, dated March 7, 1999, between
Purchaser and Yossi Hollander.
(c)(3) -- Shareholder Agreement, dated March 7, 1999, between
Purchaser, Roni A. Einav, Dalia Prashker and Einav Computer
Systems.
(c)(4) -- Form of Director Release entered into as of March 7, 1999
between the Company and each of Nahum Rozman, Eli Talmor and
Yehuda Kahane.
(c)(5) -- Third Amendment to Distribution Agreement between the
Company and Boole & Babbage Europe dated October 28, 1994,
as amended on April 24, 1997 and October 31, 1997, effective
as of March 6, 1999.
(c)(6) -- Letter agreement, dated as of March 7, 1999, regarding
Fourth Amendment to Distribution Agreement between BMC
Software, Inc. and the Company.
(c)(7) -- Settlement and Release Agreement dated March 7, 1999 among
Yossi Hollander, New Dimension Software Ltd., Roni A. Einav,
Dalia Prashker, Einav Computer Systems, Yehuda Kahane, Nahum
Rozman and Eli Talmor.
(d) -- None.
(e) -- Not applicable.
(f) -- None.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING ORDINARY SHARES
OF
NEW DIMENSION SOFTWARE LTD.
AT
$52.50 NET PER SHARE
BY
BMC SOFTWARE, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 8, 1999, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF NEW DIMENSION SOFTWARE LTD. (THE "COMPANY") HAS
UNANIMOUSLY DETERMINED THAT, AS OF THE DATE OF THE TENDER AGREEMENT DESCRIBED
HEREIN, THE OFFER IS FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF
THE COMPANY AND RESOLVED, SUBJECT TO CERTAIN SHAREHOLDER APPROVALS DESCRIBED
HEREIN, TO RECOMMEND ACCEPTANCE OF THE OFFER BY THE SHAREHOLDERS OF THE COMPANY.
PURCHASER HAS ENTERED INTO SHAREHOLDER AGREEMENTS WITH CERTAIN SHAREHOLDERS
OF THE COMPANY NAMED HEREIN PURSUANT TO WHICH (A) THE SHAREHOLDERS HAVE AGREED
TO TENDER INTO THE OFFER ALL OF THEIR SHARES (REPRESENTING AN AGGREGATE OF
APPROXIMATELY 61.0% OF THE ISSUED AND OUTSTANDING SHARES), (B) THE SHAREHOLDERS
HAVE GRANTED TO PURCHASER AN IRREVOCABLE OPTION TO PURCHASE ANY OR ALL OF SUCH
SHARES IN CERTAIN CIRCUMSTANCES, AND (C) EACH SHAREHOLDER HAS GRANTED TO
PURCHASER AN IRREVOCABLE PROXY TO VOTE SUCH SHAREHOLDER'S SHARES WITH RESPECT TO
MATTERS RELATING TO THE TENDER AGREEMENT, THE OFFER OR MATTERS INCONSISTENT WITH
THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (A) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE THEN ISSUED AND
OUTSTANDING SHARES NOT OWNED BY PURCHASER AND ITS SUBSIDIARIES (DETERMINED IN
ACCORDANCE WITH SECTION 236 OF THE COMPANIES ORDINANCE (NEW VERSION) 5743-1983
OF THE STATE OF ISRAEL), (B) SATISFACTION OF CERTAIN REGULATORY CONDITIONS,
INCLUDING THE EXPIRATION OR TERMINATION PRIOR TO THE EXPIRATION OF THE OFFER OF
ALL WAITING PERIODS IMPOSED BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED, (C) CERTAIN APPROVALS RELATED TO THE OFFER BY THE
SHAREHOLDERS OF THE COMPANY AT A SPECIAL MEETING AS DESCRIBED HEREIN, AND (D)
CERTAIN OTHER CONDITIONS. SEE SECTION 14.
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IMPORTANT
Any shareholder desiring to tender all or a portion of such shareholder's
Shares should either (1) complete and sign the Letter of Transmittal provided
herewith (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal and mail or deliver the Letter of Transmittal (or such
facsimile) and any other required documents to the Depositary identified in the
Letter of Transmittal and either deliver the certificates for such Shares to the
Depositary along with the Letter of Transmittal or tender such Shares pursuant
to the procedures for book-entry transfer set forth in Section 3 hereof or (2)
request such shareholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such shareholder. Any shareholder
whose Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee if such shareholder desires to tender such
Shares.
Any shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply with
the procedures for book-entry transfer on a timely basis should tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be directed to the
Information Agent or to brokers, dealers, commercial banks and trust companies.
------------------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
The date of this Offer to Purchase is March 11, 1999.
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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INTRODUCTION......................................................... 1
1. Terms of the Offer.......................................... 4
2. Acceptance for Payment and Payment for Shares............... 5
3. Procedure for Tendering Shares.............................. 6
4. Withdrawal Rights........................................... 9
5. Certain Federal and Israeli Law Tax Consequences of the
Offer..................................................... 10
6. Price Range of the Shares; Dividends on the Shares.......... 12
7. Effect of the Offer on the Market for the Shares; Nasdaq
National Market Listing and Exchange Act Registration;
Margin Regulations........................................ 12
8. Certain Information Concerning the Company.................. 13
9. Certain Information Concerning Purchaser.................... 15
Source and Amount of Funds..................................
10. 17
Background of the Offer.....................................
11. 18
Purpose of the Offer; Plans for the Company; Tender
12. Agreement; Shareholder Agreements; Other Agreements;
Related Matters........................................... 20
Dividends and Distributions.................................
13. 30
Certain Conditions of the Offer.............................
14. 31
Certain Legal Matters.......................................
15. 32
Fees and Expenses...........................................
16. 34
Miscellaneous...............................................
17. 34
Schedule I -- Directors and Executive Officers of Purchaser..... I-1
</TABLE>
(i)
<PAGE> 3
To the Holders of Ordinary Shares of New Dimension Software Ltd.:
INTRODUCTION
BMC Software, Inc., a Delaware corporation ("Purchaser"), hereby offers to
purchase all outstanding ordinary shares, par value NIS 0.01 per share (the
"Shares"), of New Dimension Software Ltd., an Israeli corporation (the
"Company"), at a purchase price of $52.50 per Share (the "Offer Price"), net to
the seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which, together
with any amendments or supplements hereto or thereto, collectively constitute
the "Offer").
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT, AS
OF THE DATE OF THE TENDER AGREEMENT DESCRIBED HEREIN, THE OFFER IS FAIR TO AND
IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY AND RESOLVED, SUBJECT
TO THE DIRECTORS OF THE COMPANY NOT HAVING THE RIGHT TO TENDER THEIR SHARES OR
THE RIGHT TO RECEIVE ANY COMPENSATION FOR SERVICES PROVIDED TO THE COMPANY
PURSUANT TO THE DIRECTOR RELEASES, UNLESS THE COMPANY'S SHAREHOLDERS SHALL HAVE
APPROVED SUCH RIGHT AS DESCRIBED HEREIN, TO RECOMMEND ACCEPTANCE OF THE OFFER BY
THE SHAREHOLDERS OF THE COMPANY.
CIBC Oppenheimer Corp. ("CIBC Oppenheimer"), the Company's financial
advisor, has delivered to the Company's board of directors a written opinion,
dated March 7, 1999 to the effect that, as of such date, the Offer Price to be
received in the Offer by the holders of Shares (other than Purchaser and its
affiliates) was fair, from a financial point of view, to such holders. A copy of
the opinion of CIBC Oppenheimer is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
filed with the Securities and Exchange Commission (the "Commission") in
connection with the Offer. A copy of the Schedule 14D-9 is being furnished to
the shareholders herewith.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in Section 1
below) a number of Shares which constitutes at least ninety percent (90%) of the
Shares then issued and outstanding and not owned by Purchaser or its
subsidiaries determined in accordance with Section 236 of the Companies'
Ordinance (New Version) 5743-1983 of the State of Israel (the "Companies
Ordinance") (such condition being referred to herein as the "90% Condition"),
(ii) satisfaction of certain regulatory conditions, including the expiration or
termination prior to the expiration of the Offer of all waiting periods imposed
by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (iii) certain approvals related to the Offer by the shareholders of
the Company at a Special Meeting as described herein, and (iv) certain other
conditions. See Section 14.
The Offer is being made pursuant to a Share Purchase and Tender Agreement
(the "Tender Agreement") dated as of March 7, 1999, by and between Purchaser and
the Company, which provides for certain agreements between the Company and
Purchaser relating to the Offer, all as described herein.
Concurrently with the execution of the Tender Agreement, Purchaser entered
into Shareholder Agreements, each dated March 7, 1999 (the "Shareholder
Agreements"), with (i) Yossie Hollander and (ii) with Roni A. Einav, Dalia
Prashker and Einav Computer Systems, an Israeli corporation (each a "Principal
Shareholder" and collectively, the "Principal Shareholders"). Pursuant to the
Shareholder Agreements: (a) the Principal Shareholders have agreed to tender
into the Offer all of their Shares, which, on the date of the Tender Agreement,
represented an aggregate of 7,482,500 Shares or 61.0% of the issued and
outstanding Shares (excluding outstanding stock options of the Company), (b) the
Principal Shareholders have granted to Purchaser an irrevocable option to
purchase all of such Shares in certain circumstances, and (c) each Principal
Shareholder has granted to Purchaser an irrevocable proxy to vote such Principal
Shareholder's Shares with respect to matters relating to the Tender Agreement,
the Offer or matters inconsistent with the Offer.
The Tender Agreement and the Shareholder Agreements are more fully
described in Section 12. Certain U.S. federal and Israeli law tax consequences
of the sale of Shares pursuant to the Offer are described in Section 5.
1
<PAGE> 4
If Purchaser is successful in acquiring in the Offer at least ninety
percent (90%) of the Shares not presently owned by it or its subsidiaries within
four months of the date hereof (the "Initial Period"), Purchaser has agreed in
the Tender Agreement, in accordance with Section 236 of the Companies Ordinance,
to declare by notice to the remaining shareholders (the "Notice of Acquisition")
that it is unilaterally acquiring (the "Compulsory Acquisition") the remaining
Shares not yet held by it on the same terms as those set forth in the Offer.
Purchaser has agreed to deliver the Notice of Acquisition at any time during the
two month period following the Initial Period.
Shareholders of the Company who object to the Compulsory Acquisition shall
be entitled to file a notice of objection with the Tel Aviv District Court
within one month of receiving the Notice of Acquisition. In the event that any
such objection is filed, the court may issue such relief as it sees fit,
including delaying the completion of the Compulsory Acquisition. One month after
the giving of the Notice of Acquisition, or, if an objection was filed, upon the
court's resolution of such objection, Purchaser shall deliver to the Company a
copy of the Notice of Acquisition and the consideration for the Shares Purchaser
is entitled to purchase, and the Company shall register Purchaser as the record
owner of such Shares. The Company will receive the consideration as trustee for
the shareholders whose Shares are purchased pursuant to the Compulsory
Acquisition.
This Offer to Purchase also serves as a "Plan" or "Contract" under Section
236 of the Companies' Ordinance.
DISSENTERS' RIGHTS ARE NOT AVAILABLE IN CONNECTION WITH THE OFFER. HOWEVER,
SHAREHOLDERS OF THE COMPANY WHO OBJECT TO THE COMPULSORY ACQUISITION SHALL BE
ENTITLED TO FILE A NOTICE OF OBJECTION WITH THE TEL AVIV DISTRICT COURT AND THE
COURT MAY ISSUE RELIEF AS IT SEES FIT.
The Company has informed Purchaser that as of March 7, 1999, there were
12,258,898 Shares issued and outstanding, none of which were owned by Purchaser.
In addition, 950,705 shares were reserved for issuance upon the exercise of
outstanding options (the "Company Options") granted under the stock option plans
of the Company or any subsidiary of the Company (the "Company Option Plans").
The holders of approximately 7,482,500 Shares (or 61.0% of the issued and
outstanding Shares as of the date of the Tender Agreement) have agreed to tender
such Shares pursuant to the Offer pursuant to the Shareholder Agreements
described below. In addition Boole & Babbage, Inc. ("Boole") owned 452,800
Shares as of March 7, 1999.
In accordance with the Tender Agreement, the Company has agreed to hold an
extraordinary general meeting of its shareholders (the "Special Meeting") for
purposes of approving: (i) the right of certain directors of the Company to sell
their Shares to Purchaser pursuant to the Offer, (ii) the right of certain
directors of the Company to receive compensation from the Company against a
release of such directors' claim regarding an alleged promise by the Company to
issue such directors stock options, (iii) a Settlement and Release Agreement,
dated as of March 7, 1999, among the Company, the Principal Shareholders and
certain directors, and (iv) by special resolution, an amendment to the Company's
Articles of Association to provide that the holders of at least 60% of the
issued and outstanding Shares of the Company shall be entitled to appoint and
remove any and all members of the board of directors of the Company by means of
a written notice signed by such shareholders to the Company (collectively, the
"Shareholder Approvals"). All resolutions, other than the special resolution in
(iv) above, require a majority of the Shares present and voting at the Special
Meeting. The special resolution requires 75% of the Shares present and voting at
the Special Meeting. The Company's Board of Directors has recommended that
shareholders give the Shareholder Approvals at the Special Meeting. Receipt of
the Shareholder Approvals is a condition to the Offer.
In connection with the Offer, the Company has entered into release
agreements dated as of March 7, 1999 (the "Director Releases") under which the
Company has agreed to pay to three directors of the Company, subject to
consummation of the Offer, an aggregate of $7,500,000 (plus value added tax and
less applicable withholding tax) in exchange for a release by such directors of
claims that such directors had for past compensation and all other claims
against the Company.
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<PAGE> 5
Tendering shareholders will not be obligated to pay brokerage fees or
commissions to Goldman, Sachs & Co., as the dealer managers (the "Dealer
Managers"), BankBoston, N.A., as the depositary (the "Depositary"), or MacKenzie
Partners, Inc., as the information agent (the "Information Agent"), or, except
as set forth in Instruction 6 to the Letter of Transmittal, transfer taxes on
the sale of Shares pursuant to the Offer. A tendering shareholder who holds
securities with such shareholder's broker may be required by such broker to pay
a service charge or other fee. Purchaser will pay all charges and expenses of
the Dealer Managers, the Depositary and the Information Agent incurred in
connection with the Offer. See Section 16.
This Offer and the accompanying documents contain information required to
be disclosed by the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (the "Exchange Act"), including financial
information regarding Company, Purchaser, a description of the terms, conditions
and background of the Offer, and the procedures for tendering Shares for
purchase.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
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<PAGE> 6
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment (and thereby purchase) and pay
for all Shares that are validly tendered prior to the Expiration Date and not
withdrawn in accordance with Section 4 below promptly after expiration of the
Offer. As used in the Offer, the term "Expiration Date" shall mean 12:00
midnight, New York City time, on Thursday, April 8, 1999, unless and until
Purchaser, in accordance with the terms of the Offer and the Tender Agreement,
shall have extended the period of time during which the Offer is open, in which
event the term "Expiration Date" shall mean the latest time and date at which
the Offer, as so extended by Purchaser or the Company, shall expire.
In the event that the Offer is not consummated, Purchaser may seek to
acquire Shares through open market purchases, privately negotiated transactions,
or otherwise, upon such terms and conditions and at such prices as it shall
determine, which may be more or less than the Offer Price and could be for cash
or other consideration.
The Offer is subject to certain other conditions set forth in Section 14
below. If any condition to Purchaser's obligation to purchase Shares under the
Offer is not satisfied prior to the Expiration Date, Purchaser reserves the
right but is not obligated to, subject to the terms and conditions of the Tender
Agreement: (i) terminate the Offer and decline payment for any Shares tendered,
(ii) amend the Offer as to any Shares not then accepted for payment, or (iii)
delay the acceptance for payment of Shares tendered.
Any extension, amendment or termination will be followed as promptly as
practicable by public announcement thereof in accordance with the public
announcement requirements of Rule 14d-4(c) under the Exchange Act.
Subject to applicable law, Purchaser reserves the right to amend or modify
the terms of the Offer at any time prior to acceptance of the Shares for payment
pursuant to the Offer, except that Purchaser shall not, without the prior
written consent of the Company, (i) decrease or change the form of the
consideration payable in the Offer, (ii) impose additional conditions to the
Offer, (iii) change the conditions to the Offer (except that Purchaser in its
sole discretion may waive any of the conditions to the Offer), or (iv) make any
other changes in the terms or conditions of the Offer that is adverse to the
holders of Shares.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including the 90% Condition), Purchaser will disseminate additional tender
offer materials and extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following a material change in the terms of the offer or
information concerning the offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. In a public release, the United States Securities and
Exchange Commission (the "Commission") has stated that in its view an offer must
remain open for a minimum period of time following a material change in the
terms of the Offer and that waiver of a material condition, such as the 90%
Condition, is a material change in the terms of the Offer. The release states
that an offer should remain open for a minimum of five business days from the
date a material change is first published, sent or given to security holders and
that, if material changes are made with respect to information not materially
less significant than the offer price and the number of Shares being sought, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. If, prior to
the Expiration Date, Purchaser increases the consideration to be paid per Share
pursuant to the Offer, Purchaser will pay such increased consideration for all
Shares purchased pursuant to the Offer, whether or not such Shares were tendered
prior to such increase in consideration. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1(e)(6) under the Exchange
Act.
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<PAGE> 7
Purchaser reserves the right, subject to applicable laws (including
applicable regulations of the Commission promulgated under the Exchange Act) and
to the terms of the Tender Agreement, at any time or from time to time, to: (i)
delay acceptance for payment of or payment for any Shares, regardless of whether
the Shares were theretofore accepted for payment, or (ii) terminate the Offer
and not accept for payment or pay for any Shares not theretofore accepted for
payment or paid for, in each case upon the occurrence of any of the conditions
specified in Section 14 below. The reservation by Purchaser of the right to
delay acceptance for payment of or payment for Shares is subject to the
provisions of Rule 14e-1(c) under the Exchange Act, which requires that
Purchaser pay the consideration offered or return the Shares deposited by or on
behalf of shareholders promptly after the termination or withdrawal of the
Offer. Any delay in acceptance for payment or payment beyond the time permitted
by applicable law will be effectuated by an extension of the period of time
during which the Offer is open.
Any extension, amendment or termination of the Offer, any waiver of any
condition of the Offer, or any delay in payment, will be followed as promptly as
practicable by a public announcement. In the case of an extension, Rule 14e-1(d)
under the Exchange Act requires that the announcement be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled expiration date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
shareholders in connection with an offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change), and without limiting the manner in which Purchaser may choose to make
any public announcement, Purchaser will not have any obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones New Service (or a similar news service) or as
otherwise may be required by law. During any extension of the Offer, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer,
subject to the rights of a tendering shareholder to withdraw its Shares in
accordance with the procedures set forth in Section 4. PURCHASER SHALL NOT HAVE
ANY OBLIGATION TO PAY INTEREST ON THE PURCHASE PRICE FOR TENDERED SHARES,
WHETHER OR NOT PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
The Company has provided Purchaser with its shareholder list and security
position listings for the purpose of disseminating the Offer to shareholders.
This Offer to Purchase, the related Letter of Transmittal and other relevant
materials will be mailed to record holders of Shares and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's shareholder list,
or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment (and thereby purchase) and pay
for, as soon as practicable after the Expiration Date, all Shares validly
tendered prior to the Expiration Date and not properly withdrawn in accordance
with the procedures set forth in Section 4. Purchaser expressly reserves the
right, in its discretion, subject to applicable laws and regulations, to delay
acceptance for payment of or payment for Shares in order to comply, in whole or
in part, with any applicable law, government regulation or condition contained
herein. See Sections 1 and 14.
Any such delays will be effected in compliance with Rule 14e-1(c)
promulgated under the Exchange Act (relating to a bidder's obligation to pay for
or return tendered securities promptly after the termination or withdrawal of
such bidder's offer).
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates for such
Shares (or a Book-Entry Confirmation (as defined in Section 3) with respect to
such Shares), (ii) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with all required signature
guarantees, or in the case of a book-entry transfer, an
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<PAGE> 8
Agent's Message (as defined in Section 3), and (iii) all other documents
required by the Letter of Transmittal. See Section 3 below.
For purposes of the Offer, Purchaser will be deemed to have been accepted
for payment (and thereby purchased) Shares validly tendered prior to the
Expiration Date and not properly withdrawn as, if and when Purchaser gives oral
or written notice to the Depositary of Purchaser's acceptance of such Shares for
payment pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from
Purchaser and transmitting payment to tendering shareholders whose Shares have
theretofore been accepted for payment. If, for any reason, acceptance for
payment of or payment for any Shares tendered pursuant to the Offer is delayed,
or Purchaser is unable to accept for payment Shares tendered pursuant to the
Offer, then, without prejudice to Purchaser's rights under Section 14, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn, except to the extent that the tendering
shareholders are entitled to withdrawal rights as described in Section 4 below
and as otherwise required by Rule 14e-l(c) under the Exchange Act. Under no
circumstances will interest on the Offer Price be paid by Purchaser, regardless
of any extension of the Offer or any delay in making such payment.
Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering shareholders, Purchaser's obligation to make such payment
shall be satisfied and tendering shareholders must thereafter look solely to the
Depositary for payment of amounts owed to them by reason of the acceptance for
payment of Shares pursuant to the Offer. Tendering shareholders will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of
Shares pursuant to the Offer. Purchaser will pay any charges and expenses of the
Depositary and the Information Agent.
If any tendered Shares are not purchased for any reason or if certificates
are submitted for more Shares than are tendered, certificates for such Shares
not purchased or tendered will be returned pursuant to the instructions of the
tendering shareholder without expense to the tendering shareholder (or, in the
case of Shares delivered by book-entry transfer, into the Depositary's account
at the Book-Entry Transfer Facility (as defined in Section 3) pursuant to the
procedures set forth in Section 3, such Shares will be credited to an account
maintained at the Book-Entry Transfer Facility) as promptly as practicable
following the expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid per Share pursuant to the Offer, Purchaser will pay such increased
consideration for all such Shares purchased pursuant to the Offer, whether or
not such Shares were tendered prior to such increase in consideration.
Purchaser reserves the right to assign, in its sole discretion, to any
newly-formed direct wholly owned subsidiary of Purchaser the right to purchase
Shares tendered pursuant to the Offer; however, no such transfer or assignment
will release Purchaser from its obligations under the Offer or prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES
Valid Tenders. For Shares to be validly tendered pursuant to the Offer,
either (a) a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), with all required signature guarantees, or
an Agent's Message in connection with a book-entry delivery of Shares, and all
other documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Date and either (i) certificates representing
such Shares must be received by the Depositary at any such address prior to the
Expiration Date or (ii) such Shares must be delivered pursuant to the procedures
for book-entry transfer set forth below and a Book-Entry Confirmation (as
defined below) must be received by the Depositary prior to the Expiration Date
or (b) the tendering shareholder must comply with the guaranteed delivery
procedures set forth below prior to the Expiration Date. No alternative,
conditional or contingent tenders will be accepted.
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<PAGE> 9
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account at the Book-Entry Transfer Facility in accordance with the
Book-Entry Transfer Facility's procedures for such transfer. However, although
delivery of Shares may be made through book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed, with
all required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and all other required documents, must in any
case, be transmitted to, and received by, the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase prior to the Expiration
Date, or the tendering shareholder must comply with the guaranteed delivery
procedures described below. The confirmation of a book-entry transfer of Shares
into the Depositary's account at the Book-Entry Transfer Facility as described
above is referred to herein as a "Book-Entry Confirmation." DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Purchaser may enforce such agreement
against the participant.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution which is a
member of the Medallion Signature Guarantee Program, or by any other "eligible
guarantor institution," as such term is defined in Rule 17Ad-15 under the
Exchange Act (each an "Eligible Institution"). Signatures on a Letter of
Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed by
the registered holders (which term, for purposes of this section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on the
Letter of Transmittal or (b) if such Shares are tendered for the account of an
Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If
the certificates representing Shares are registered in the name of a person
other than the signer of the Letter of Transmittal or if certificates for Shares
not accepted for payment or not tendered are to be issued to a person other than
the registered holder, then the certificates must be endorsed or accompanied by
duly executed stock powers, in each case signed exactly as the name or names of
the registered holder or holders appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as described above and as
provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of
Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates are not immediately available or
the procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to the
Expiration Date, such Shares may nevertheless be tendered if all of the
following guaranteed delivery procedures are complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, is
received by the Depositary as provided below prior to the Expiration Date;
and
(iii) the certificates for all tendered Shares in proper form for
transfer or a Book-Entry Confirmation with respect to all tendered Shares,
together with a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof) and all required signature
guarantees (or in the case
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<PAGE> 10
of a book-entry transfer, an Agent's Message) and all other documents
required by the Letter of Transmittal, are received by the Depositary
within three trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day" is any day on which the Nasdaq
National Market is open for business.
THE NOTICE OF GUARANTEED DELIVERY MAY BE DELIVERED BY HAND OR TRANSMITTED
BY FACSIMILE TRANSMISSION OR MAILED TO THE DEPOSITARY AND MUST INCLUDE A
GUARANTEE BY AN ELIGIBLE INSTITUTION IN THE FORM SET FORTH IN SUCH NOTICE OF
GUARANTEED DELIVERY.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer in all cases will be made only after timely
receipt by the Depositary of (a) certificates for (or a Book-Entry Confirmation
with respect to) such Shares, (b) a Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with all required
signature guarantees (or in the case of a book-entry transfer, an Agent's
Message) and (c) all other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when the foregoing materials are actually received by the Depositary. Under
no circumstances will interest on the purchase price be paid by Purchaser,
regardless of any extension of the Offer or any delay in making such payment.
The method of delivery of certificates for Shares, the Letter of
Transmittal and any other required documents (including delivery through the
Book-Entry Transfer Facility) is at the option and sole risk of the tendering
shareholder and delivery will be deemed made only when actually received by the
Depositary. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery. SHARES TENDERED BY GUARANTEED
DELIVERY FOR WHICH SHARE CERTIFICATES ARE NOT RECEIVED BY THE DEPOSITARY PRIOR
TO OR ON THE EXPIRATION DATE WILL NOT BE COUNTED AS SHARES TENDERED FOR PURPOSES
OF CALCULATING WHETHER THE 90% CONDITION HAS BEEN SATISFIED.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares pursuant to any of the procedures described above will
be determined by Purchaser in its sole discretion, which determination shall be
final and binding on all parties. Purchaser reserves the absolute right to
reject any or all tenders of Shares determined not to be in proper form or the
acceptance of or payment for which may, in the opinion of counsel, be unlawful
and reserves the absolute right (but shall not be obligated) to waive any defect
or irregularity in any tender of Shares. Subject to the terms of the Tender
Agreement, Purchaser also reserves the absolute right (but shall not be
obligated) to waive or to amend any of the conditions of the Offer or any defect
or irregularity in any tender with respect to Shares of any particular
shareholder, whether or not similar defects or irregularities are waived in the
case of other shareholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived.
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding on all parties. None of Purchaser, the Dealer Manager, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
Other Requirements. By executing and delivering a Letter of Transmittal, a
tendering shareholder irrevocably appoints designees of Purchaser as such
shareholder's attorneys-in-fact and proxies, each with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such shareholder's rights with respect to the Shares tendered by such
shareholder and accepted for payment by Purchaser and with respect to any and
all other distributions, rights, Shares or other securities issued or issuable
in respect of such Shares, on or after the date of the Tender Agreement. All
such powers of attorney and proxies shall be considered coupled with an interest
in the tendered Shares and therefore irrevocable. Such appointment will be
effective when, and only to the extent that Purchaser accepts such Shares for
payment pursuant to the Offer. Upon such acceptance for payment, all prior
powers of attorney and proxies given by such shareholder with respect to such
Shares (and any other securities so issued in respect of such purchased Shares)
will be revoked, without further action, and no subsequent powers of attorney
and proxies may be given by such shareholder with respect thereto (and, if
given, will not be deemed effective). The designees of Purchaser will be
empowered to exercise all voting and other rights of such shareholder with
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<PAGE> 11
respect to such Shares (and any other securities so issued in respect of such
purchased Shares) as they in their sole discretion may deem proper, including,
without limitation, in respect of any general meeting of the shareholders, or
any adjournment or postponement thereof, in connection with any action by
written consent in lieu of a meeting or otherwise. Purchaser reserves the
absolute right to require that, in order for Shares to be validly tendered,
immediately upon Purchaser's acceptance for payment of such Shares, Purchaser or
its designees must be able to exercise full voting and other rights with respect
to such Shares (and any other securities so issued in respect of such purchased
Shares), including, without limitation, the right to vote at any meeting of
shareholders then scheduled.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering shareholder's acceptance of the terms and conditions of
the Offer, as well as the tendering shareholder's representation and warranty
that (i) such shareholder has the full power and authority to tender, sell,
assign and transfer the tendered Shares (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after March 11,
1999), and (ii) when the same are accepted for payment by Purchaser, Purchaser
will acquire good, marketable and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances and not subject to any adverse
claim. Purchaser's acceptance for payment of Shares tendered pursuant to the
Offer will constitute a binding agreement between the tendering shareholder and
Purchaser upon the terms and subject to the conditions of the Offer.
Backup Federal Income Tax Withholding. To prevent backup U.S. federal
income tax withholding of 31% of the payments made to a shareholder with respect
to the purchase price of Shares acquired pursuant to the Offer, such shareholder
must provide the Depositary with such shareholder's correct taxpayer
identification number and certify that such shareholder is not subject to backup
federal income tax withholding by completing the Substitute Form W-9 included in
the Letter of Transmittal. See instruction 11 of the Letter of Transmittal and
Section 5 below. If the shareholder is a nonresident alien or foreign entity not
subject to back-up withholding, the shareholder must give the Depositary a
completed Form W-8 Certificate of Foreign Status prior to receipt of any
payments.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable, except as
otherwise provided in this Section 4. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by Purchaser as provided herein, may also be withdrawn at
any time after May 9, 1999. If Purchaser extends the Offer, is delayed in its
purchase of or payment for Shares or is unable to purchase or pay for Shares for
any reason, then, without prejudice to the rights of Purchaser under the Offer,
tendered Shares may be retained by the Depositary on behalf of Purchaser and may
not be withdrawn except to the extent that tendering shareholders are entitled
to withdrawal rights as set forth in this Section 4.
The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for Shares is subject to the provisions of Rule 14e-l(c)
under the Exchange Act, which requires Purchaser to pay the consideration
offered or return Shares deposited by or on behalf of shareholders promptly
after the termination or withdrawal of the Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If certificates evidencing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then prior to the release of such
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn, and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered for the account of an
Eligible Institution). If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3, the notice of withdrawal
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<PAGE> 12
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
Book-Entry Transfer Facility's procedures.
All questions as to form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination shall be final and binding on all parties. No withdrawal of
Shares shall be deemed to have been properly made until all defects and
irregularities have been cured or waived. None of Purchaser, the Dealer Manager,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failing to give such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be tendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3 above.
5. CERTAIN FEDERAL AND ISRAELI LAW TAX CONSEQUENCES OF THE OFFER
U.S. Federal Income Tax Consequences to U.S. Holders.
The following discussion summarizes the United States federal income tax
consequences to U.S. Holders (as defined below) of the receipt of cash in
exchange for Shares. The discussion is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations, judicial decisions and
published positions of the Internal Revenue Service (the "IRS"), all as in
effect on the date hereof, and all of which are subject to change, possibly with
retroactive effect. This discussion does not address all aspects of U.S. federal
income taxation (including potential application of the alternative minimum tax)
that may be relevant to a particular U.S. Holder based on such holder's
particular circumstances and does not address any aspect of state, local or
non-U.S. tax laws. Further, this summary generally considers only U.S. Holders
that hold the Shares as capital assets (generally, assets held for investment)
and may not apply to all U.S. Holders. In particular, the discussion may not
apply to U.S. Holders (i) who acquired their Shares pursuant to the exercise of
employee stock options or other compensation arrangements with the Company; (ii)
who are subject to special tax treatment under the Code (such as broker-dealers,
insurance companies, tax-exempt organizations, financial institutions, and
regulated investment companies); (iii) who hold the Shares as part of a
"straddle," "hedge," or "conversion transaction," or whose functional currency
is not the U.S. dollar; (iv) who own, or have owned, directly, indirectly, or
through attribution, currently or during the past five years, 10% or more of the
Shares; or (v) who are certain expatriates or former long-term residents of the
U.S.
For purposes of this discussion, a "U.S. Holder" is any holder of Shares
who is (i) a citizen or resident of the U.S.; (ii) a corporation or other entity
taxable as a corporation organized under the laws of the U.S. or of any state
thereof or the District of Columbia; (iii) an estate the income of which is
included in gross income for U.S. federal income tax purposes regardless of
source; (iv) a trust, if a U.S. court is able to exercise primary supervision
over its administration and one or more U.S. persons have the authority to
control all of its substantial decisions; or (v) any other person who is subject
to U.S. federal income tax on a net income basis with respect to the Shares. In
the case of a holder of Shares that is a partnership for U.S. federal income tax
purposes, each partner of such partnership will take into account its allocable
share of income or loss from the Shares, and will take such income or loss into
account under the rules of taxation applicable to such partner, taking into
account the activities of the partnership and the partner.
Exchange of Shares for Cash. The receipt of cash by a U.S. Holder in
exchange for its Shares pursuant to the Offer will be a taxable transaction for
U.S. federal income tax purposes. A U.S. Holder will recognize gain or loss for
U.S. federal income tax purposes equal to the difference between its adjusted
tax basis in the Shares and the amount of cash received in exchange for the
Shares pursuant to the Offer. Such gain or loss generally will be capital gain
or loss, and will be long term capital gain or loss if the Shares were held for
more than one year. Subject to certain limited exceptions, capital losses cannot
be applied to offset ordinary income for U.S. federal income tax purposes.
In general, any gain or loss recognized by a U.S. Holder on the exchange of
the Shares for cash will be U.S. source income or loss. However, pursuant to the
Income Tax Treaty between the State of Israel and the
10
<PAGE> 13
United States of America (the "Tax Treaty"), gain from the exchange of the
Shares to a U.S. Holder who is a U.S. resident (for purposes of the Tax Treaty)
and who sells the Shares in Israel may be treated as foreign-source gain for
purposes of the foreign tax credit limitation.
Backup Withholding. Payments in connection with the Offer may be subject to
"backup withholding" at a 31% rate. Backup withholding generally applies if the
U.S. Holder (a) fails to furnish his social security number or other taxpayer
identification number ("TIN"), (b) furnishes an incorrect TIN, (c) fails
properly to report interest or dividends or (d) under certain circumstances,
fails to provide a certified statement, signed under penalties of perjury, that
the TIN provided is his correct number and that he is not subject to backup
withholding. Backup withholding is not an additional tax but merely an advance
payment, which may be refunded to the extent it results in an overpayment of
tax. Any amounts withheld from a payment to a U.S. Holder under the backup
withholding rules will be allowed as a credit against such holder's federal
income tax liability, provided that the required information is provided to the
Internal Revenue Service; alternatively, the U.S. Holder may be eligible for a
refund of any excess amounts withheld under the backup withholding rules.
Certain persons generally are exempt from backup withholding, including
corporations, financial institutions and non-U.S. Holders. Certain penalties
apply for failure to furnish correct information and for failure to include the
reportable payments in income. Holders of Shares who are not U.S. Holders will
be exempt from backup withholding if such persons certify as to their foreign
status on an I.R.S. Form W-8. Each shareholder should consult with such
shareholder's own tax advisor as to such shareholder's qualification for
exemption from withholding and the procedure for obtaining such exemption.
Certain Israeli Tax Considerations
The following is a summary of certain Israeli tax considerations applicable
to the Company's shareholders in connection with the receipt of cash in exchange
for Shares pursuant to the Offer. The following summary is not intended and
should not be construed as legal or professional tax advice and does not cover
all possible tax considerations. The following summary is addressed only to
shareholders that hold the Shares as capital assets (generally, assets held for
investment) and may not apply to all shareholders. In particular, this
discussion does not apply to shareholders who acquire Shares pursuant to the
exercise of employee stock options or other compensation arrangements with the
Company.
Under existing Israeli regulations, any capital gain realized by a holder
with respect to the Shares will generally be exempt from Israeli capital gains
tax provided, that (i) the Company qualifies as an "industrial company" within
the meaning of the Law for the Encouragement of Industry (Taxes), 5729-1969, of
the State of Israel and (ii) the Shares are listed on the Nasdaq National
Market. The Shares are currently listed on the Nasdaq National Market, and the
Purchaser has received a confirmation from the auditors of the Company that the
Company qualifies as an "industrial company". Therefore, persons who dispose of
Shares pursuant to the Offer or prior to the completion of the Offer will be
exempt from Israeli capital gains tax in connection with such dispositions. This
exemption does not apply to individuals who are defined as "traders" in
securities under the Israeli Income Tax Ordinance or to persons (both individual
or corporate) that are subject to the Israeli Income Tax Law (Adjustment to
Inflation), 1985. Holders of Shares other than Treaty U.S. Residents (as defined
below), whose Shares are acquired pursuant to the Compulsory Acquisition, may,
subject to any applicable income tax treaty, in the event that such acquisition
takes place after the delisting of the Company from the Nasdaq National Market,
be subject to Israeli capital gains taxation in connection with such disposition
at the rate of 36% for corporate shareholders and 50% for individual
shareholders.
Under the Tax Treaty, persons who qualify as "residents of the United
States" as defined in the Tax Treaty ("Treaty U.S. Residents"), and who owned,
both directly and indirectly, less than 10% of the Company's outstanding voting
shares during the 12 month period prior to the disposition of their Shares
(whether such disposition takes place pursuant to the Offer, the Compulsory
Acquisition or otherwise) will be exempt from Israeli tax in connection with
such disposition.
Backup Withholding. As mentioned above under "U.S. Federal Income Tax
Consequences to U.S. Holders -- Backup Withholding", payment in connection with
the Offer may be subject to backup
11
<PAGE> 14
withholding at a rate of 31%. Holders of Shares that are not U.S. Holders will
be exempt from backup withholding if such persons certify as to their foreign
status on an I.R.S. Form W-8.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL
TAX CONSEQUENCES RELATING TO THE DISPOSITION OF SHARES. HOLDERS OF SHARES ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES OF THEIR
PARTICULAR SITUATIONS.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are traded in the over-the-counter market and prices are quoted
on the Nasdaq National Market ("Nasdaq") under the symbol "DDDDF." The following
table sets forth, for the periods indicated, the high and low bid prices per
Share on Nasdaq as reported by the Dow Jones News Retrieval Service.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL YEAR 1997:
First Quarter............................................. $14.13 $ 8.00
Second Quarter............................................ 13.88 9.13
Third Quarter............................................. 22.88 13.00
Fourth Quarter............................................ 22.38 15.88
FISCAL YEAR 1998:
First Quarter............................................. $26.63 $18.75
Second Quarter............................................ 35.38 21.25
Third Quarter............................................. 34.00 20.75
Fourth Quarter............................................ 49.00 18.25
FISCAL YEAR 1999:
First Quarter (through March 10, 1999).................... 58.88 41.88
</TABLE>
On March 5, 1999, the last full trading day before the public announcement
of Purchaser's intention to acquire the Shares, the closing bid price per Share
on Nasdaq was $48.94. On March 10, 1999, the last full trading day before the
commencement of the Offer, the closing bid price per Share on Nasdaq was $51.56
per Share. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE
SHARES.
According to the Company, the Company has never paid dividends on the
Shares and does not anticipate a change in this policy in the foreseeable
future. In addition, the payment of dividends is restricted under the terms of
the Tender Agreement.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ NATIONAL MARKET
LISTING AND EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
Nasdaq National Market Listing and Exchange Act Registration. Depending
upon the number of Shares purchased pursuant to the Offer, the Shares may no
longer meet the requirements of Nasdaq for continued listing and may be delisted
from Nasdaq. According to Nasdaq's published guidelines, Nasdaq would consider
delisting the Shares if, among other things, the number of holders of at least
100 Shares should fall below 400, the number of publicly held Shares (exclusive
of holdings of officers, directors any other person who is the beneficial owner
of more than 10% of the total Shares outstanding ("Nasdaq Excluded Holdings"))
should fall below 750,000 or the aggregate market value of publicly held Shares
(exclusive of Nasdaq Excluded Holdings) should fall below $5,000,000. If, as a
result of the purchase of Shares pursuant to the Offer or otherwise, the Shares
no longer meet the requirements of Nasdaq for continued listing and the listing
of the Shares is discontinued, the market for the Shares could be adversely
affected.
If Nasdaq were to delist the Shares, it is possible that the Shares would
continue to trade in the over-the-counter market and that price or other
quotations would be reported by other sources. The extent of the public
12
<PAGE> 15
market therefor and the availability of such quotations would depend, however,
upon such factors as the number of shareholders and/or the aggregate market
value of such securities remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act as described below, and other factors.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the Offer Price.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if the Shares are not listed on a national securities exchange and there are
fewer than 300 record holders. The termination of the registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of Shares and to the Commission and would
make certain provisions of the Exchange Act, including the requirement of
furnishing an annual report to shareholders and the requirements of Rule 13e-3
under the Exchange Act with respect to "going private" transactions, no longer
applicable to the Shares. In addition, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability to
dispose of such securities pursuant to Rule 144 or Rule 144A promulgated under
the Securities Act of 1933, as amended. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for Nasdaq reporting.
PURCHASER INTENDS TO SEEK TO CAUSE THE COMPANY TO APPLY FOR DELISTING OF
THE SHARES FROM NASDAQ AND TERMINATE THE REGISTRATION OF THE SHARES UNDER THE
EXCHANGE ACT AS SOON AFTER THE COMPLETION OF THE OFFER AS THE REQUIREMENTS FOR
SUCH DELISTING AND TERMINATION ARE MET. IF REGISTRATION OF THE SHARES IS NOT
TERMINATED PRIOR TO THE COMPULSORY ACQUISITION, THE REGISTRATION OF THE SHARES
UNDER THE EXCHANGE ACT WILL BE TERMINATED FOLLOWING CONSUMMATION OF THE
COMPULSORY ACQUISITION.
Margin Regulations. The Shares are currently "margin securities," as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit using such securities as collateral.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could not then be used as
collateral for loans extended by brokers.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although none of Purchaser or the Dealer Managers have
any knowledge that any such information is untrue, none of Purchaser or the
Dealer Managers take any responsibility for the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information.
The Company is an Israeli corporation with its principal executive offices
located at Building 7, Atidim Industrial Park, Devora Hanevia Street, Tel Aviv,
61581, Israel. The Company's North American subsidiary is headquartered in
Irvine, California. According to the Company's annual report on Form 20-F for
the fiscal year ended December 31, 1997 (the "Company 20-F"), the Company
provides integrated software solutions that allow Information Technology
organizations to manage data center production flow end-to-end. The Company is
also a leading provider of management solutions for the enterprise security
marketplace and provides Information Technology organizations with solutions
that address emerging production paradigms.
The Company's products are sold directly through ten offices in the United
States and Canada, one in Israel, one in Mexico, one in the U.K., and four
regional offices in Australia and New Zealand. As of December 31, 1997, over
6,400 copies of the Company's products have been licensed to more than 2,150
organizations worldwide. The Company's products are also distributed through 18
independent distributors in 47 countries.
13
<PAGE> 16
The Company is subject to informational reporting requirements of the
Exchange Act applicable to "foreign private issuers," and in accordance
therewith files reports, including annual reports on Form 20-F, and other
information with the Commission. Set forth below is certain selected
consolidated financial information with respect to the Company and its
subsidiaries as of and for the fiscal years ended December 31, 1996, 1997 and
1998 and at December 31, 1997 and 1998. Such financial information as of or for
the years ended December 31, 1996 and 1997 have been taken from the Company's
20-F, filed with the Commission on June 25, 1998. More comprehensive financial
information for such periods is included in such reports and other documents
filed by the Company with the Commission, and the following summary is qualified
in its entirety by reference to such report and other documents and all of the
financial information (including any related notes) contained therein. Such
report and other documents should be available for inspection and copies thereof
should be obtainable in the manner set forth below under "Available
Information."
The financial information set forth below as of and for the year ended
December 31, 1998 are based on preliminary unaudited financial statements of the
Company delivered to the Purchaser in connection with the Tender Agreement. THE
COMPANY HAS ADVISED PURCHASER THAT SUCH 1998 FINANCIAL STATEMENTS ARE
PRELIMINARY UNAUDITED DRAFTS SUBJECT TO CHANGE AND DO NOT REFLECT ANY MATTERS
THAT MAY BE INCLUDED IN THE FOOTNOTES TO THE COMPANY'S FINANCIAL STATEMENTS.
NEW DIMENSION SOFTWARE LTD.
SELECTED CONSOLIDATED FINANCIAL DATA
INCOME STATEMENT DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1997 1998
----------- ----------- -----------
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Software Products................................... $ 26,921 $ 42,901 $ 63,671
Maintenance Fees.................................... 16,633 22,068 29,920
----------- ----------- -----------
Total Revenues...................................... 43,554 64,969 93,591
----------- ----------- -----------
Cost of Revenues
Cost of Sales....................................... 4,386 4,940 7,200
Cost of Maintenance................................. 6,772 8,689 10,365
Gross Profit.......................................... 32,396 51,340 76,026
----------- ----------- -----------
Other Expenses:
Product Development net............................. 3,976 6,095 9,441
Sales & Marketing net............................... 18,594 26,809 38,737
General & Administrative............................ 6,211 6,946 8,105
Special Charges..................................... (477) 0 0
----------- ----------- -----------
Total Other Expenses................................ 28,304 39,850 56,283
----------- ----------- -----------
Operating Income...................................... 4,092 11,490 19,743
----------- ----------- -----------
Financial Income net*................................. 891 958 3,285
Income before taxes on income......................... 4,983 12,448 23,028
Taxes on Income (tax benefit)......................... (469) 1,482 2,498
----------- ----------- -----------
Net Income for the year............................... 5,452 10,966 20,530
----------- ----------- -----------
Earnings per share: Basic**........................... $ 0.49 $ 0.95 $ 1.71
----------- ----------- -----------
Earnings per share: Diluted**......................... $ 0.48 $ 0.89 $ 1.59
----------- ----------- -----------
Weighted average number of Shares used to compute
earnings per share -- Basic**....................... 11,152,736 11,530,139 11,984,139
----------- ----------- -----------
Weighted average number of Shares used to Compute
earnings per share: Diluted**....................... 11,477,088 12,329,052 12,861,383
----------- ----------- -----------
</TABLE>
- ---------------
* Includes interest income less interest expense
** Certain prior year amounts were recomputed to conform to current year's
presentation
14
<PAGE> 17
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
AT DECEMBER 31,
-------------------------------
1996 1997 1998
------- ------- -----------
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C>
Working Capital............................................. $13,061 $18,514 $ 37,948
Long-term Receivables, net.................................. 5,756 18,252 29,367
Total Assets*............................................... 58,755 89,596 130,518
Short term debt including current maturities of long term
debt...................................................... 166 74 --
Long term debt net of current maturities.................... 88 -- --
Long term deferred income................................... 4,088 14,947 22,266
Total Shareholders' equity.................................. 29,966 43,155 65,584
</TABLE>
- ---------------
* Certain prior year amounts were recomputed to conform to current year's
presentation
A copy of the Company's earnings release that includes certain unaudited
financial information of the Company for the fourth quarter and year 1998 has
been filed as an exhibit to the Schedule 14D-1 of which this Offer to Purchase
is a part.
Available Information. The Company is a foreign private issuer subject to
the informational filing requirements of the Exchange Act. In accordance
therewith, the Company files annual reports and other information with the
Commission under the Exchange Act relating to its business, financial condition
and other matters. As a foreign private issuer, the Company is not required to
file quarterly financial reports with the Commission, or to file proxy materials
with the Commission. The Company's reports and other information may be
inspected and copied at the Commission's office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and Seven World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material may also be obtained upon payment of the
Commission's prescribed fees by writing to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Shares are
traded on the Nasdaq National Market and certain reports and other information
concerning the Company also can be inspected at the offices of Nasdaq at 1735 K
Street, N.W., Washington, D.C. 20006.
9. CERTAIN INFORMATION CONCERNING PURCHASER
Purchaser develops, markets and supports high-performance systems
management software products that address customers' critical information
technology operations. These products are designed to ensure that a customer's
software applications and the databases and other software systems on which they
run are available, perform optimally and can be recovered and restarted
predictably after failure. Purchaser has historically concentrated on
specialized high performance tools and utilities for large databases and
operating systems and has more recently extended into the management of
pre-packaged software planning applications that address the core business of
businesses and organizations as well. Purchaser's products primarily address the
IBM mainframe, sells and provides maintenance, enhancement and support services
for its products. Purchaser's principal customers are large organizations that
rely heavily on their computing systems. Many of Purchaser's customers are
Fortune 1000 industrial and service corporations and similar organizations
worldwide.
Set forth below is certain selected consolidated financial information with
respect to Purchaser and its subsidiaries as of and for the fiscal years ended
March 31, 1996, 1997 and 1998 and for the nine months ended December 31, 1997
and 1998. Such financial information has been taken from the periodic reports
and other documents filed by Purchaser with the Commission pursuant to the
Exchange Act. More comprehensive financial information is included in such
reports and other documents filed by Purchaser with the Commission and the
following summary is qualified in its entirety by reference to such reports and
other documents and all of the financial information (including any related
notes) contained therein, which are incorporated herein by
15
<PAGE> 18
reference. Such reports and other documents may be inspected and copies may be
obtained from the offices of the Commission and the Nasdaq National Market in
the manner set forth below.
BMC SOFTWARE, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED MARCH 31, DECEMBER 31,
-------------------------------- ---------------------
1996 1997 1998 1997 1998
-------- -------- ---------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Total revenue........................ 469,906 611,788 788,153 557,433 744,910
Operating income..................... 159,017 230,005 241,725 152,212 283,259
Net earnings......................... 113,553 172,985 174,990 106,512 233,073
Basic earnings per share............. $ 0.55 $ 0.83 $ 0.86 $ 0.51 $ 1.08
Shares used in computing basic
earnings per share................. 208,213 208,611 203,488 210,301 215,111
Diluted earnings per share........... $ 0.52 $ 0.78 $ 0.81 $ 0.48 $ 1.02
Shares used in computing diluted
earnings per share................. 216,748 222,012 216,590 224,132 228,035
Dividends paid....................... 7,009 5,786 7,555 5,660 --
Dividends paid per share............. $ 0.03 $ 0.03 $ 0.03 $ 0.02 $ --
Working capital...................... 50,995 65,568 47,988 (66,912) 33,842
Total assets......................... 643,599 889,686 1,299,660 999,766 1,694,866
</TABLE>
Purchaser is subject to the informational filing requirements of the
Exchange Act. In accordance therewith, Purchaser files periodic reports, proxy
statements and other information with the Commission under the Exchange Act
relating to its business, financial condition and other matters. Purchaser is
required to disclose in such proxy statements certain information, as of
particular dates, concerning Purchaser's directors and officers, their
remuneration, stock options granted to them, the principal holders of
Purchaser's securities and any material interest of such persons in transactions
with Purchaser. Such reports, proxy statements and other information may be
inspected and copied in the same manner as set forth for the Company in Section
8, and in addition may be obtained through the Commission's Internet site at
http://www.sec.gov. Purchaser's common stock is listed on the Nasdaq National
Market and certain reports, proxy statements and other information concerning
Purchaser also can be inspected at the offices of the Nasdaq at 1735 K Street,
N.W., Washington, D.C. 20006.
A copy of this Offer to Purchase and certain of the agreements referred to
herein are attached as exhibits to the Tender Offer Statement on Schedule 14D-1
dated March 11, 1999 (the "Schedule 14D-1"), which has been filed with the
Commission by Purchaser in connection with the Offer. The Schedule 14D-1 and the
exhibits thereto, along with such documents as may be filed by Purchaser with
the Commission, may be examined and copied from the offices of the Commission in
the manner set forth above.
The name, business address, present principal occupation or employment,
five-year employment history and citizenship of each director and executive
officer of Purchaser is set forth on Schedule I.
As a result of the options and irrevocable proxy granted to Purchaser under
the Shareholder Agreements, Purchaser may be deemed to share voting and
investment control over, and thus beneficially own, the Shares that are covered
by such Shareholder Agreements, which represent in the aggregate 7,482,500
Shares or 61.0% of the issued and outstanding Shares as of the date of the
Tender Agreement, based on information provided to Purchaser by the Company in
the Tender Agreement. Purchaser disclaims beneficial ownership of such Shares.
In addition, Purchaser has entered into an Agreement and Plan of Reorganization,
dated as of October 31, 1998, among Boole, Purchaser and a subsidiary of
Purchaser (the "Boole Merger Agreement"). Under the Boole Merger Agreement, upon
satisfaction of the conditions to closing thereunder, including
16
<PAGE> 19
approval by the Boole shareholders, Boole will be acquired by Purchaser by means
of a merger (the "Boole Merger"). The closing of the Boole Merger is expected to
occur as soon as possible after receipt of Boole shareholder approval at a
special meeting of Boole shareholders scheduled for March 30, 1999. Such closing
will be subject to obtaining such approval and to certain other conditions, and
no assurance can be given that such closing will occur. Boole has advised
Purchaser that it owns an aggregate of 452,800 Shares, representing
approximately 3.7% of the issued and outstanding Shares as of the date of the
Tender Agreement. In the Tender Agreement, Purchaser has agreed to use its
reasonable efforts to cause Boole to tender such Shares into the Offer. If the
Boole Merger closes before the Offer expires, Purchaser will be deemed to own
such shares.
Except as set forth in this Offer to Purchase, neither Purchaser nor, to
its knowledge any of the persons listed in Schedule I or any associate or
majority owned subsidiary of any such persons, beneficially owns or has a right
to acquire any equity security of the Company. Except as set forth in this Offer
to Purchase, neither Purchaser nor, to its knowledge, any of their respective
directors, executive officers or subsidiaries has effected any transaction in
any equity security of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, (i) neither Purchaser nor,
to its knowledge, any of the persons listed in Schedule I has any contract,
arrangement, understanding or relationship (whether or not legally enforceable)
with any other person with respect to any securities of the Company, including,
but not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any such securities, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss, or the giving or withholding of proxies; (ii) there have been no
contacts, negotiations or transactions between Purchaser, or any of its
subsidiaries or, to its knowledge any of the persons listed on Schedule I on the
one hand, and the Company or any of its directors, officers or affiliates, on
the other hand, that are required to be disclosed pursuant to the rules and
regulations of the Commission.
10. SOURCE AND AMOUNT OF FUNDS
THE OFFER IS NOT CONDITIONED ON FINANCING.
The total amount of funds required by Purchaser to consummate the Offer
(including cash payments related to the cancellation of outstanding Company
Options) and the Compulsory Acquisition and to pay related fees and expenses is
estimated to be approximately $700 million.
The consideration for the Shares to be purchased pursuant to the Offer and
the Compulsory Acquisition is expected to be funded from Purchaser's working
capital and loans from U.S. banks. The Purchaser is currently negotiating with
three major commercial banks (the "Proposed Lenders") to obtain a credit
facility in an aggregate amount of $500,000,000 (the "Proposed Credit
Facility"). On March 10, 1999, the Purchaser received commitments from each of
the Proposed Lenders, copies of which are attached as an exhibit to the Schedule
14D-1. The following is a summary of the principal terms of the Proposed Credit
Facility.
The Proposed Credit Facility will consist of $500,000,000 of availability
under: (a) a 364-day revolving credit facility for general corporate purposes,
including the funding of the Offer, with renewal options by the Proposed Lenders
and with a one-year option granted to the Purchaser, which will enable the
Purchaser to convert the revolving loans into a one-year term loan, and (b) a
competitive bid facility which will enable Purchaser to request bids from the
Proposed Lenders for loans on a negotiated basis up to the existing availability
under the Proposed Credit Facility. If Purchaser elects to convert revolving
borrowings to a term loan, such term loan must be repaid within one year with
interest payable at specified margin levels above LIBOR.
Interest rates for loans under the Proposed Credit Facility are based upon
a margin above LIBOR within current market parameters and certain financial
ratios of the Purchaser.
The Proposed Credit Facility will include, among others, covenants
regarding the maintenance of: (a) at least $300,000,000 in cash and marketable
securities by the Purchaser and (b) certain financial ratios.
17
<PAGE> 20
The Proposed Credit Facility requires the Purchaser to pay an arrangement
fee on the aggregate commitment of the Proposed Lenders together with a facility
fee (ranging from 10 to 20 basis points) on the drawn and undrawn portion of the
aggregate commitments of the Proposed Lenders.
The Proposed Credit Facility will also contain other typical and customary
covenants usually found in commercial bank credit agreements as well as
customary events of default.
Any loans under the Proposed Credit Facility will be repaid over time from
a variety of potential sources including, but not limited to funds generated
internally by Purchaser and its subsidiaries.
The Offer is not conditioned on consummation of the Proposed Credit
Facility.
11. BACKGROUND OF THE OFFER
Set forth below is a description of the background of the Offer.
On November 2, 1998, Purchaser announced the execution of the Boole Merger
Agreement. Boole develops and markets enterprise automation software solutions
for managing service levels in multivendor, distributed computing environments.
Purchaser believes that its acquisition of Boole, which is subject to
shareholder approval at a special meeting of the Boole shareholders scheduled
for March 30, 1999, will allow Purchaser to provide a foundation for the next
generation of the two companies' systems management software tools for mainframe
and distributed information systems.
While Purchaser has been aware of the Company for years, Purchaser began to
focus on the Company and its software product offerings through the course of
its negotiations with Boole. Boole has been the exclusive distributor of the
Company's products in Europe since March 10, 1987 under an exclusive
distribution agreement between the Company and Boole & Babbage Europe ("BBE"),
an Irish corporation and Boole's European distribution subsidiary (the
"Distribution Agreement"). The Distribution Agreement expires on December 31,
2000; however, announcement of the Boole Merger Agreement triggered an early
termination right that allows the Company to terminate the Distribution
Agreement prior to such expiration. Immediately following the announcement of
the Merger Agreement, BBE's president, Han Bruggeling, arranged a meeting in
Europe among Rick Gardner, Purchaser's Senior Vice President, Worldwide Sales &
Marketing, and senior representatives of the Company. The meeting's purpose was
to explore various possible strategic relationships among Purchaser, Boole and
the Company, including extension or expansion of the distribution arrangement
and Purchaser's acquisition of the Company.
These discussions were continued in a meeting on November 24, 1998 at the
Company's North American headquarters in Irvine, California, in which
Purchaser's senior management reviewed the Company's operations, financial
prospects and products. Following this meeting, the Company's Chief Executive
Officer, Dan Barnea, met in Houston on November 25, 1998 with William Austin,
Purchaser's Senior Vice President and Chief Financial Officer, to discuss the
Company with him. Based on these discussions, Purchaser began its internal
analysis of a possible business combination with the Company and requested
additional information from the Company. On December 18, 1998, Purchaser and the
Company signed a mutual nondisclosure agreement. Purchaser subsequently
submitted its first request for due diligence information about the Company.
Purchaser and the Company signed an additional nondisclosure agreement on
January 6, 1999.
On January 19 and 20, 1999 Purchaser's senior management met with the
Company's senior management in San Francisco, California to review the requested
information. Although this meeting was productive, Purchaser concluded that it
required significant additional information before it could determine whether to
proceed with negotiations to acquire the Company. Much of this information was
financial and technical product information residing in Israel, so Purchaser
arranged to send a team of senior management and technical personnel to the
Company's headquarters in Tel Aviv.
This team performed financial and technical due diligence at the Company's
Tel Aviv headquarters on January 28, 29 and 31, 1999. The Company provided
demonstrations of its software product offerings and technical support
capabilities and discussed current and future research and development projects.
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Additionally, the team reviewed financial results, financial reporting controls
and practices, sales forecasts and other financial data. Following this trip,
the team of senior management and technical personnel prepared a detailed
analysis of the Company and of a business combination with Purchaser.
Purchaser's senior management presented this analysis to Max Watson, Purchaser's
Chairman, President and Chief Executive Officer, on February 12, 1999. Mr.
Watson then called a meeting of Purchaser's board of directors to review the
possible acquisition.
Purchaser's board of directors met on February 17, 1999 at Purchaser's
Houston, Texas headquarters. Following a presentation by Purchaser's senior
management and Goldman, Sachs & Co., Purchaser's financial advisors, and
detailed discussion of the possible acquisition, the board authorized Purchaser
to proceed with negotiations to acquire the Company in a cash purchase
transaction.
Beginning on February 22, 1999, Purchaser, the Company and the two
principal shareholders of the Company, Einav Computer Systems Ltd. and Yossie
Hollander (the "Shareholders"), and the parties' legal counsel and financial
advisors, engaged in negotiations concerning the Tender Agreement and the
agreements related thereto, including amendments to the Distribution Agreement.
These negotiations were conducted in New York, New York from February 22 through
February 25, 1999 and were continued by telephone on a daily basis through March
7. Numerous important issues arose in the New York discussions, including
Purchaser's requirement of general releases of certain threatened claims against
the Company. Beginning in late February, the Company began to attempt to obtain
these releases. During the week of February 22, 1999, Purchaser also began to
negotiate employment agreements for the Company's Chief Executive Officer, Dan
Barnea, and his senior executive team, to ensure their continued employment.
On February 26, 1999 Purchaser's financial analyst traveled to Irvine,
California to perform financial due diligence respecting the Company's North
American operations and sales and licensing practices. On February 28, 1999,
Purchaser's local counsel in Israel began its legal and financial due diligence
review at the Company's principal headquarters in Tel Aviv. This local due
diligence effort was extensive and was completed on March 7, 1999. On March 4,
1999, Purchaser's financial analyst, accompanied by legal counsel, traveled to
Irvine, California to perform additional financial and legal due diligence
respecting the Company's North American operations.
On March 5, 1999, Purchaser's board of directors met to consider the
proposed Tender Agreement, Shareholder Agreements, related agreements and the
transactions described therein. At Purchaser's board meeting, Purchaser's senior
management presented a financial and product review of the proposed acquisition
and the final results of the due diligence review. Goldman, Sachs & Co.
presented its financial analysis of the transaction, including a review of the
proposed pricing. After reviewing the terms of the Tender Agreement and the
related agreements, Purchaser's board of directors voted unanimously to approve
the Tender Agreement, the related agreements and the transactions contemplated
thereby. Purchaser's board of directors authorized the officers of Purchaser to
finalize negotiations and execute the Tender Agreement and the related
agreements within a specified price range.
Purchaser and the Company reached agreement on the Tender Offer price of
$52.50 on March 6, 1999.
On March 7, 1999, Purchaser, the Company, and the Shareholders, in each
case represented by their legal counsel, resolved all issues that remained
outstanding.
Also on March 7, 1999, the board of directors of the Company met and
unanimously approved the Tender Agreement and related documents.
The Tender Agreement and other related agreements were executed and
delivered by the parties on March 7, 1999. Prior to the opening of the market on
March 8, 1999, Purchaser issued a press release announcing the execution of the
Tender Agreement.
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12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; TENDER AGREEMENT; SHAREHOLDER
AGREEMENTS; OTHER AGREEMENTS; RELATED MATTERS
Purpose of the Offer; Plans for the Company
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The purpose of the Offer is to acquire all Shares not
beneficially owned by Purchaser and its subsidiaries following consummation of
the Offer, or at least enough Shares to complete the Compulsory Acquisition.
Upon the consummation of the Offer and the Compulsory Acquisition, the Company
will become a direct wholly owned subsidiary of Purchaser.
The acquisition of Shares not owned by Purchaser and its subsidiaries has
been structured as a cash tender offer in order to (i) effect a prompt and
orderly transfer of the Company from its shareholders to Purchaser and (ii)
provide shareholders with cash for all of their Shares at a price in excess of
the market price of the Shares on the date hereof. Because the offer contains
the 90% Condition, it will not succeed unless the holders of at least 90% of the
Shares unaffiliated with Purchaser tender their Shares.
Upon consummation of the Offer and Compulsory Acquisition, the Company will
become a privately held corporation. Accordingly, shareholders will not have the
opportunity to participate directly in earnings and growth of the Company after
the consummation of the Offer and will not have any right to vote on corporate
matters.
Purchaser intends, from time to time after the consummation of the Offer,
to evaluate the business and operations of the Company and will take such
actions as it deems appropriate under the circumstances then existing. Purchaser
intends to seek additional information about the Company during the pendency of
the Offer. Thereafter, Purchaser intends to review such information as part of a
comprehensive review of the Company's business, operations, capitalization and
management with a view to maximizing the Company's potential in conjunction with
Purchaser's businesses.
Except as indicated in this Offer to Purchase, Purchaser does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any of its subsidiaries, a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries or any
material change in the Company's capitalization or dividend policy or any other
material changes in the Company's corporate structure or business.
Purchaser reserves the right to acquire additional Shares following the
expiration of the Offer through private purchases, market transactions, tender
or exchange offers or otherwise on terms and at prices that may be more or less
favorable than those of the Offer or, subject to any applicable legal
restrictions, to dispose of any or all Shares beneficially acquired by
Purchaser.
TENDER AGREEMENT
The following is a summary of the material terms of the Share Purchase and
Tender Agreement, dated as of March 7, 1999, by and between Purchaser and
Company (the "Tender Agreement"). This summary is not a complete description of
the terms and conditions thereof and is qualified in its entirety by reference
to the full text thereof, which is incorporated herein by reference and a copy
of which has been filed with the Commission as an exhibit to the Schedule 14D-1.
The Tender Agreement may be examined, and copies thereof may be obtained, as set
forth in Section 9 above.
The Offer. The Tender Agreement provides that as promptly as practicable
(but in no event later than five business days following the public announcement
of the execution of the Tender Agreement), Purchaser is required to commence the
Offer. If, between the date of the Tender Agreement and the date on which Shares
are accepted for payment pursuant to the Offer (the "Closing Date"), the Shares
are changed into a different number or class of shares by reason of any stock
split, stock dividend, reverse stock split, reclassification, recapitalization
or other similar transaction, the Offer Price will be adjusted accordingly.
Under the Tender Agreement, Purchaser has expressly reserved the right to
amend or modify the terms of the Offer at any time prior to acceptance of Shares
for payment pursuant to the Offer. However, without the
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prior written consent of the Company, Purchaser may not (i) decrease or change
the form of the Offer Price, (ii) impose additional conditions to the Offer,
(iii) change the conditions to the Offer (except that Purchaser in its sole
discretion may waive any of the conditions to the Offer), or (iv) make any other
change in the terms or conditions of the Offer that is adverse to the holders of
Shares.
The Tender Agreement provides that Purchaser will, on the terms and subject
to the prior satisfaction or waiver of the conditions to the Offer, accept for
payment and pay for all Shares validly tendered and not withdrawn pursuant to
the Offer promptly after expiration of the Offer. The Offer shall be open for an
initial period of 20 business days from the date of commencement; provided that,
Purchaser may, in accordance with applicable law, extend the Offer if the
conditions to the Offer have not been satisfied. As long as the Company or its
board of directors shall not have asserted any of their rights described below
under "Acquisition Proposals; Fiduciary Exceptions," Purchaser shall at the
request of the Company extend the Offer if at any scheduled expiration date of
the Offer any of the conditions to Purchaser's obligations to purchase Shares
shall not be satisfied; provided, however, that Purchaser shall not be required
to extend the Offer beyond July 12, 1999.
The Company has agreed that no Shares held by the Company will be tendered
to Purchaser pursuant to the Offer. However, Shares held beneficially or of
record by any plan, program or arrangement sponsored or maintained for the
benefit of employees of the Company shall not be deemed to be held by the
Company, regardless of whether the Company has, directly or indirectly, the
power to vote or control the disposition of such Shares. The obligations of
Purchaser to commence the Offer and to accept for payment and to pay for Shares
validly tendered on or prior to the expiration of the Offer and not withdrawn
shall be subject only to the conditions set forth in Section 14.
Company Action; Recommendation of Board of Directors. In executing the
Tender Agreement, the Company consented to the Offer and represented and
warranted that its board of directors has (a) unanimously determined as of the
date of the Tender Agreement that the Offer is fair to and in the best interests
of the shareholders of the Company and (b) resolved, subject to the directors of
the Company not having the right to tender their Shares or the right to receive
any compensation for services provided to the Company pursuant to the Director
Releases (as described below under "Director Releases"), unless the Company's
shareholders shall have approved such right as set forth in the following
paragraph, to recommend acceptance of the Offer and approval by the shareholders
of the matters to be presented at the Special Meeting described below. The
Tender Agreement provides that directors of the Company will not have the right
to tender their Shares in the Offer nor to receive compensation from the Company
pursuant to the Director Releases unless the Company's Shareholders have
approved such right and such compensation as more fully described below in
"--Special Meeting; Shareholder Approval."
Special Meeting; Shareholder Approval. In accordance with the Tender
Agreement, the Company has agreed to hold a Special Meeting for purposes of
approving: (i) the right of certain directors of the Company to sell their
Shares to Purchaser pursuant to the Offer, (ii) the right of certain directors
of the Company to receive compensation from the Company against a release of
such directors' claim regarding an alleged promise by the Company to issue such
directors stock options, (iii) a Settlement and Release Agreement, dated as of
March 7, 1999, among the Company, the Principal Shareholders and certain
directors, and (iv) by special resolution, an amendment to the Company's
Articles of Association to provide that the holders of at least 60% of the
issued and outstanding Shares of the Company shall be entitled to appoint and
remove any and all members of the board of directors of the Company, by means of
a written notice signed by such shareholders to the Company (collectively, the
"Shareholder Approvals"). All resolutions, other than the special resolution in
(iv) above, require a majority of the Shares present and voting at the Special
Meeting. The special resolution requires 75% of the Shares present and voting at
the Special Meeting. The Company's board of directors has recommended that
shareholders give the Shareholder Approvals at the Special Meeting. Receipt of
the Shareholder Approvals is a condition to the Offer.
Board of Directors. Subject to obtaining the Shareholder Approvals,
promptly upon the purchase by Purchaser pursuant to the Offer of such number of
Shares representing at least 60% of the outstanding Shares, and from time to
time thereafter, Purchaser shall be entitled to designate the entire Board of
Directors of the
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Company, and the Company shall, upon request of Purchaser, take all actions
necessary to enable such Purchaser designees to be so elected or appointed.
Options and Other Purchase Rights. The Tender Agreement provides that the
Company will use its best efforts to obtain from each holder of options
("Company Options") granted under the stock option plans of the Company or any
subsidiary of the Company ("Company Option Plans") an agreement pursuant to
which the Company will cancel such Company Options and make the payments
described below. On the Closing Date, each Company Option for which an agreement
from the holder thereof has been obtained that is outstanding immediately prior
to the Closing Date, whether or not then exercisable or vested, will be canceled
by the Company effective on the Closing Date, and the holders thereof shall be
entitled to receive, for each Share subject to such Company Option, in
settlement and cancellation thereof, an amount in cash equal to the positive
difference, if any, between the Offer Price and the exercise price per share of
such Company Option, which amount shall be paid by the Company at the time the
Company Option is canceled; provided, however, that for purposes of calculating
the amount of cash to be paid in respect of the cancellation of Company Options
that are options to purchase shares of EagleEye Control Software Ltd. (a
subsidiary of the Company) capital stock rather than Shares of the Company, the
Offer Price used in the foregoing calculation shall be multiplied by 9.085. All
applicable withholding taxes attributable to such payments or to related
distributions shall be deducted from the amounts payable to option holders and
all such taxes attributable to the cancellation of Company Options shall be
withheld from the proceeds received by holders of Company Options in connection
with their cancellation.
To the extent permitted by the Company Option Plans, the Company Option
Plans will terminate on the Closing Date and any rights under any provisions in
any other plan, program or arrangement providing for the issuance or grant by
the Company of any interest in respect of the capital stock of the Company shall
be canceled as of the Closing Date. Purchaser shall make available to the
Company all funds required to make the payments to the holders of Company
Options as set forth above.
Compulsory Acquisition. The Tender Agreement provides that if Purchaser is
successful in acquiring pursuant to the Offer at least 90% of the Shares not
owned by Purchaser or its subsidiaries within four months after the date the
Offer commences (the "Initial Period"), Purchaser shall, pursuant to Section 236
of the Companies Ordinance, declare by notice to the remaining shareholders (the
"Notice of Acquisition") that it is unilaterally acquiring (the "Compulsory
Acquisition") the remaining Shares not yet held by it on the same terms as those
set forth in the Offer. The Notice of Acquisition will be delivered at any time
during the two month period following the Initial Period. The Offer will serve
as a "Plan" or "Contract" under Section 236 of the Companies Ordinance.
Reservation of Right to Revise Structure. At Purchaser's election, the
Offer may alternatively be structured so that the issued and outstanding Shares
transferred to Purchaser shall be transferred to a newly formed, wholly owned
subsidiary of Purchaser, provided that no such change shall alter or change the
Offer Price.
Representations and Warranties. The Tender Agreement contains customary
representations and warranties of the parties thereto. These representations and
warranties expire on the Closing Date.
Conduct of Business Pending the Effective Time. The Company has agreed that
from the date of the Tender Agreement until the Effective Time, the Company
shall, and shall cause its subsidiaries to (except as otherwise required or
contemplated by the Tender Agreement and the schedules thereto or as required by
applicable law): (i) use all commercially reasonable efforts to conduct its
business and the business of its subsidiaries in all material respects only in
the ordinary course of business and consistent with past practice; (ii) not
amend its Articles of Association or Memorandum of Association or other
organizational or governing documents or declare, set aside or pay any dividend
or other distribution or payment in cash, stock or property in respect of its
capital stock or acquire, directly or indirectly, any of its capital stock;
(iii) not issue, grant, sell or pledge or agree or authorize the issuance,
grant, sale or pledge of any shares of, or rights of any kind to acquire any
shares of, its capital stock other than Shares issuable upon the exercise of
stock options outstanding on the date of the Tender Agreement; (iv) not acquire,
sell, transfer, lease or encumber any material assets except in the ordinary
course of business and consistent with past practice; (v) use all
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commercially reasonable efforts to preserve intact its business organizations
and the business organizations of its subsidiaries, and to keep available the
services of its present key officers and employees; provided, however, that the
Company shall not be required to make any payments or enter into or amend any
contractual arrangements or understandings, except in the ordinary course of
business and consistent with past practice and provided further that the
foregoing shall not restrict the Company in any way from terminating the
employment of its employees, other than its present key officers and employees;
(vi) not adopt a plan of complete or partial liquidation or adopt resolutions
providing for the complete or partial liquidation, dissolution, consolidation,
amalgamation, merger, restructuring or recapitalization of the Company or any of
it subsidiaries; (vii) not grant any severance or termination pay (otherwise
than pursuant to policies in effect on the date of the Tender Agreement) to, or
enter into any employment agreement with, any of its executive officers or
directors; (viii) not, except in the ordinary course of business consistent with
past practice or pursuant to obligations imposed by collective bargaining
agreements, increase the compensation payable or to become payable to its
officers or employees, enter into any contract or other binding commitment in
respect of any such increase with any of its directors, officers or other
employees or any director, officer or other employee of its subsidiaries, and
not establish, adopt, enter into, make any new grants or awards under or amend,
any collective bargaining agreement or Company Plan (as defined in the Tender
Agreement), except as required by applicable law, including any obligation to
engage in good faith collective bargaining, to maintain tax-qualified status or
as may be required by any Company Plan as of the date of the Tender Agreement;
(ix) not settle or compromise any material claims or litigation or, except in
the ordinary course of business, modify, amend or terminate any of its material
contracts or waive, release or assign any material rights or claims, or make any
payment, direct or indirect, of any material liability before the same becomes
due and payable in accordance with its terms; (x) not take any action, other
than reasonable and usual actions in the ordinary course of business and
consistent with past practice with respect to accounting policies or procedures
(including tax accounting policies and procedures), except as may be required by
the Commission or the Financial Accounting Standards Board; (xi) not make any
material tax election or permit any material insurance policy naming it as a
beneficiary or a loss payable payee to be canceled or terminated without notice
to Purchaser, except in the ordinary course of business consistent with past
practice; (xii) not incur or pay or agree to pay transaction and/or finder's
fees in excess of those disclosed to Purchaser in the Tender Agreement; (xiii)
not amend the Director Releases or incur or pay or agree to pay any amount in
excess of $7.5 million (including all legal fees and other expenses of such
directors) in the aggregate plus value added tax as prescribed by law against a
duly issued value added tax invoice, and including any amounts required to be
withheld pursuant to applicable tax regulations, pursuant to the Director
Releases; and (xiv) not authorize or enter into an agreement to do any of the
foregoing.
Access; Confidentiality. The Tender Agreement provides that, from the date
of the Tender Agreement until the Closing Date, the Company shall, subject to
certain restrictions, give Purchaser and its authorized representatives access
to its officers or other representatives, properties, books and records, and
shall furnish Purchaser and its authorized representatives with such financial
and operating data and other information concerning the business and properties
of the Company as Purchaser may from time to time reasonably request, subject to
such information being held subject to the provisions of the Confidentiality
Agreement described below under "Confidentiality Agreement."
Non-Solicitation. The Tender Agreement provides that, without the prior
written consent of the other party, neither Purchaser nor the Company, will for
a period of one year from the date of the Tender Agreement, solicit or cause to
be solicited the employment of any person who is employed by the other during
such time, subject to certain limited exceptions set forth in the Tender
Agreement.
Cooperation. In the Tender Agreement, Purchaser and Company have generally
agreed to use reasonable efforts to take, or cause to be taken, all actions
necessary, proper or advisable to consummate and make effective the transactions
contemplated by the Tender Agreement as soon as practicable, including the
cooperating and providing each other information with respect to the various
regulatory or other filings or applications in the United States and Israel
required in connection with the Offer and, in the event and to the extent
required, amending the Tender Agreement so that the Tender Agreement and the
Offer complies with applicable law.
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Acquisition Proposals; Fiduciary Exceptions. The Tender Agreement provides
that, except as set forth in the following paragraph, the Company will not (and
shall not permit any of its subsidiaries to, and shall use its best efforts to
cause its officers, directors and employees and any investment banker, attorney,
accountant, or other agent retained by it or any of its subsidiaries not to)
directly or indirectly (i) solicit, initiate, facilitate or knowingly encourage
(including by way of furnishing information) any inquiry or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
acquisition or purchase by a third party (other than Purchaser or an affiliate
of Purchaser) of a substantial amount of assets of, or any equity interest in,
the Company or any merger, consolidation, business combination, sale of
securities, recapitalization, liquidation, dissolution or similar transaction
involving the Company (collectively, "Company Transaction Proposals") or agree
to or endorse any Company Transaction Proposal or (ii) propose, enter into or
participate in any discussions or negotiations regarding any Company Transaction
Proposal, or furnish to another person (other than Purchaser or a representative
of Purchaser) any information with respect to its business, properties or assets
for the purpose of facilitating any Company Transaction Proposal. The Company
has also agreed that, except as set forth in the following paragraph, its board
of directors will not change its recommendation of the Offer discussed under the
heading "Company Action; Recommendation of board of directors" above.
The Tender Agreement provides that neither the foregoing provisions or any
other provision in Tender Agreement shall prohibit the Company from (i)
furnishing information pursuant to an appropriate confidentiality letter
concerning the Company and its businesses, properties or assets to a third party
who has made a Superior Proposal (as defined below), (ii) engaging in
discussions or negotiations with a third party who has made a Superior Proposal
or (iii) following receipt of a Superior Proposal, taking and disclosing to its
shareholders a position (including a positive recommendation) with respect
thereto or changing, withdrawing or withholding the approval or recommendation
by the Company's board of directors of the Offer, but in each case referred to
in the foregoing clauses (i) through (iii) only after the board of directors of
the Company concludes in good faith following advice of its independent counsel,
evidenced by a written opinion, that such action is necessary in order for the
board of directors of the Company to comply with its fiduciary obligations to
the Company's shareholders under applicable Israeli law. If the board of
directors of the Company receives a Company Transaction Proposal, then the
Company shall immediately inform Purchaser of the terms and conditions of such
proposal and the identity of the person making it and shall keep Purchaser fully
informed of the status and details of any such Company Transaction Proposal and
of all steps it is taking in response to such Company Transaction Proposal.
"Superior Proposal" is defined to mean a bona fide Company Transaction Proposal
that the board of directors of the Company determines in good faith after
consultation with (and based in part on the advice of) its independent financial
advisors to be more favorable to the Company and the Company's shareholders than
the Offer, which Company Transaction Proposal is not subject to any material
contingencies relating to financing.
Break-Up Fee. The Tender Agreement provides that if (i) the Tender
Agreement is terminated by Purchaser or the Company as a result of the Company
withdrawing, withholding or modifying in a manner adverse to Purchaser its
approval of this the Tender Agreement or the Offer, or (ii) (A) prior to the
Closing Date, there is publicly announced by a third party (other than Purchaser
or an affiliate of Purchaser) a proposal for an Alternative Company Transaction
(as defined below); (B) the Offer is terminated or expires as a result of the
failure of a condition to the consummation of the Tender Agreement; and (C)
either the Company's board of directors recommends or approves an acquisition
agreement which provides for an Alternative Company Transaction or an
Alternative Company Transaction is consummated, in each case with any third
party which after the date of the Tender Agreement and before termination of the
Tender Agreement has publicly announced a proposal for Alternative Company
Transaction, in either case prior to twelve months after the date of termination
of the Tender Agreement, then, in any such event (unless the Tender Agreement
has been terminated by the Company as a result of a breach of the agreement by
Purchaser), the Company shall pay to Purchaser simultaneously with termination
by the Purchaser in the case of the occurrence of any of the events specified in
clause (i) above, and immediately upon the first to occur of the entering into
an agreement providing for, or the consummation of, an Alternative Company
Transaction in the case of clause (ii) above (by wire transfer of immediately
available funds to an account designated by Purchaser for such purpose), a fee
(the "Break-Up Fee") in an amount equal to $25.0 million.
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The term "Alternative Company Transaction" means any transaction pursuant
to which (i) any person, entity or group (within the meaning of Section 13(d)(3)
of the Exchange Act) (other than Purchaser or any affiliate of Purchaser) (each,
a "Third Party") acquires 50% or more of the outstanding Shares, (ii) a Third
Party acquires 25% or more of the total assets of the Company taken as a whole,
(iii) a Third Party merges, consolidates or combines in any other way with the
Company other than in a transaction in which holders of Shares continue to own
at least 75% of the equity of the surviving corporation, or (iv) the Company
distributes or transfers to its shareholders, by dividend or otherwise, assets
(including stock of any subsidiary) constituting 25% or more of the market value
or earning power of the Company on a consolidated basis.
Indemnification. The Tender Agreement provides that, from the Closing Date
through the later of (i) the sixth anniversary of the Closing Date and (ii) the
expiration of any statute of limitations applicable to any claim, action, suit,
proceeding or investigation referred to below, the Purchaser will indemnify and
hold harmless each present and former director and officer of the Company and
its subsidiaries against liabilities (including fees and disbursements) incurred
in connection with any claim, action, suit, proceeding or investigation arising
out of or pertaining to matters existing or occurring on or prior to the Closing
Date, whether asserted or claimed prior to, on or after the Closing Date, to the
fullest extent that the Company or such subsidiary would have been permitted,
under applicable law, indemnification agreements existing on the date hereof,
the Articles of Association or Memorandum of Association of the Company or such
subsidiary in effect on the date of the Tender Agreement, to indemnify such
Person.
Purchaser Benefit Plans. The Tender Agreement provides that, following the
Closing Date, Purchaser shall cause the Company to provide to persons who were
employees of the Company or any of its subsidiaries prior to the Closing Date
(the "Company Personnel") employee benefit plans, programs and arrangements (the
"Purchaser Plans") which in the aggregate are substantially comparable to those
employee benefit plans, programs and arrangements generally provided to
similarly situated employees of Purchaser from time to time. Following the
Closing Date, Purchaser shall cause the Purchaser Plans to recognize any prior
accrued service, compensation credit, credit toward satisfying deductible
expense requirements, out-of-pocket expense limits and maximum lifetime benefit
limits of such Company Personnel and/or such Company Personnel's eligible
dependents, to the extent such prior service, credits and limits were recognized
under the comparable employee benefit plans, programs or arrangements of the
Company on the Closing Date, for all purposes under the Purchaser Plans
(including, but not limited to, participation, eligibility, vesting and the
calculation of benefits), and Purchaser shall cause the Purchaser Plans to waive
any preexisting condition, exclusion or limitation under any such Plan to the
extent such condition, exclusion or limitation would be covered by the
comparable plan, program or arrangement of the Company on the Closing Date. Each
of the employment agreements, the employment security agreements and severance
agreements for the benefit of Company Personnel identified in the Company's
disclosure schedule related to the Tender Agreement shall be continued by the
Company at the Closing Date on the same terms and subject to the same conditions
as in effect under such agreements immediately prior to the Closing Date.
Purchaser Stock Options. The Tender Agreement provides that, immediately
after the Closing Date, Purchaser will issue, to senior management and key
employees of the Company, as shall be mutually agreed between the senior
officers of the Company and Purchaser, stock options to purchase 500,000 shares
of Purchaser common stock under its stock option plan, vesting ratably over five
years, under agreements in customary form utilized for Purchaser's employees.
Post-Closing Operations. In the Tender Agreement, Purchaser expressed its
intent that, following the Closing Date, the Company will continue as a legal
entity, with the same name, engaged in the development, production, marketing
and distribution of the software products of the Company and that the business
operations and facilities of the Company (including its research and development
activities) will remain in Israel.
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Termination. The Tender Agreement may be terminated and the Offer may be
abandoned at any time, prior to the Closing Date:
(a) by mutual written consent of the Company and Purchaser;
(b) by either the Company or Purchaser, if the Closing Date shall not
have occurred on or before September 12, 1999; provided, that either the
Company or the Purchaser may terminate the Tender Agreement if (i) the
Closing Date shall not have occurred on or before July 12, 1999, and (ii)
within 10 days of expiration of the initial Offer hereunder, Purchaser has
not elected to commence a new Offer pursuant to provision described below
under "Commencement of a New Offer"; and provided, further that the
foregoing right to terminate the Tender Agreement shall not be available to
any party whose misrepresentation in the Tender Agreement or whose failure
to perform any of its covenants and agreements or to satisfy any obligation
under the Tender Agreement has been the cause of or resulted in the failure
of the Closing Date to occur on or before the applicable dates specified
above;
(c) by either the Company or Purchaser, if any federal or state court
of competent jurisdiction or other federal or state governmental or
regulatory body shall have issued any judgment, injunction, order or decree
prohibiting, enjoining or otherwise restraining the transactions
contemplated by the Tender Agreement and such judgment, injunction, order
or decree shall have become final and nonappealable (provided that the
party seeking to terminate the Tender Agreement pursuant to this provision
shall have used commercially reasonable efforts to remove such judgment,
injunction, order or decree) or if any statute, rule, regulation or
executive order promulgated or enacted by any federal or state governmental
authority after the date of the Tender Agreement which prohibits the
consummation of the Offer shall be in effect;
(d) by the Company, if (i) Purchaser fails to commence the Offer as
provided in the Tender Agreement other than as a result of any action by
the Company in violation of the Tender Agreement, (ii) the Offer expires or
is terminated without any Shares being purchased thereunder and Purchaser
does not elect to commence a new Offer pursuant to the provision described
below under "Commencement of a New Offer" or (iii) Purchaser fails to
purchase validly tendered Shares in violation of the terms and conditions
of the Offer or the Tender Agreement;
(e) by Purchaser, if (i) the Offer is not commenced as provided in the
Tender Agreement directly as a result of actions or inaction by the Company
in violation of the Tender Agreement, (ii) the Company's board of directors
shall have withdrawn, withheld or modified in a manner adverse to Purchaser
its approval of the Tender Agreement or the Offer or (iii) the Offer is
terminated or expires as a result of the failure of a condition specified
to the Offer without the purchase of any Shares thereunder, unless such
termination or expiration has been caused by or resulted from the failure
of Purchaser to perform any covenants and agreements of Purchaser contained
in this Agreement;
(f) by the Company, if its board of directors shall have withdrawn,
withheld or modified in a manner adverse to Purchaser its approval of the
Tender Agreement or the Offer in accordance with the provisions described
above under "Acquisition Proposals; Fiduciary Exceptions" and paid to
Purchaser the Break-Up Fee described above under "Break-Up Fee";
(g) by Purchaser, if there shall have been a material breach of any
representation, warranty or material covenant or agreement on the part of
the Company, which is incurable or which is not cured after thirty days'
written notice by Purchaser to the Company; or
(h) by the Company, if there shall have been a material breach of any
representation, warranty or material covenant or agreement on the part of
Purchaser, which is incurable or which is not cured after thirty days'
written notice by the Company to Purchaser.
Fees and Expenses. Whether or not the Offer is consummated, all costs and
expenses incurred in connection with the Tender Agreement and the transactions
contemplated thereby (including, without limitation, fees and disbursements of
counsel, financial advisors and accountants) shall be borne by the party which
incurs such cost or expense.
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Conditions to the Offer. The Tender Agreement provides that the Offer shall
only be conditioned on satisfaction of the conditions set forth in Section 14
hereof.
Survival. None of the representations, warranties, covenants or agreements
contained in the Tender Agreement or in any certificate or other instrument
delivered pursuant thereto will survive the Closing Date, except for the
covenants and agreements described above under "Indemnification and Insurance,"
"Company Plans," and "Purchaser Stock Options."
Commencement of a New Offer. The Tender Agreement provides that in the
event the original Offer expires as a result of any or all of the conditions to
the Offer set forth in paragraphs (1), (2), (3), (4), (5), (6)(a) and (6)(b) of
in Section 14 hereof not being been fulfilled, Purchaser shall have the right to
commence a new Offer within 10 days of such expiration. Such new Offer shall be
conducted on the same terms as the original Offer, and the terms of the Tender
Agreement shall in all respects apply to such new Offer in the same manner as it
applied to the original Offer except where the context indicates otherwise.
SHAREHOLDER AGREEMENTS
Concurrently with execution of the Tender Agreement, Purchaser has also
entered into shareholder agreements with (i) Yossie Hollander and (ii) with Roni
A. Einav, Dalia Prashker and Einav Computer Systems (each a "Principal
Shareholder" and collectively, the "Principal Shareholders"), each dated as of
March 7, 1999 (the "Shareholder Agreements"). Einav Computer Systems is an
Israeli corporation owned by Roni A. Einav and Dalia Prashker. As of the date of
the Shareholder Agreements, Yossie Hollander held an aggregate of 3,741,250
Shares and no Company Options; Einav Computer Systems held an aggregate of
3,741,250 Shares; Roni A. Einav held an aggregate of 23,000 Company Options and
Dalia Prashker held no Company Options. The aggregate number of Shares covered
by the Shareholder Agreements, as of the date thereof, was 7,482,500 Shares, or
61.0% of the issued and outstanding Shares as of such date (in each case
excluding Shares issuable upon exercise of the foregoing Company Options).
The following is a summary of the material terms of such Shareholder
Agreements. This summary is not a complete description of the terms and
conditions thereof and is qualified in its entirety by reference to the full
text thereof, which is incorporated herein by reference and a copy of which has
been filed with the Commission as an exhibit to the Schedule 14D-1. The
Shareholder Agreements may be examined, and copies thereof may be obtained, as
set forth in Section 9 above.
Agreement to Tender Shares. The Shareholder Agreements provide that each
Principal Shareholder will (i) tender all of such Principal Shareholder's
Applicable Shares (as defined below) into the Offer promptly, and in any event
no later than the third business day following the commencement of the Offer,
and (ii) not withdraw any Applicable Shares so tendered prior to the Offer
Termination Date (as defined below).
As used in the Shareholders Agreements:
"Applicable Shares" means all Shares that are beneficially owned (as
defined in the Shareholders Agreements) by the Principal Shareholder or
that become beneficially owned by the Principal Shareholder prior to the
Termination Date;
"Offer Termination Date" means the date the Offer terminates or
expires without the purchase of Shares thereunder; provided, however, that
if Purchaser initiates a new Offer under the terms of the Tender Agreement
on or before midnight, central time in the United States on the 10th day
following such date, the Offer Termination Date shall mean the date such
subsequent Offer terminates or expires without the purchase of Shares
thereunder; provided, however, that the Offer Termination Date will not be
later than the date of termination of the Tender Agreement; and
"Termination Date" means the date ending on the first to occur of: (1)
the Closing Date under the Offer; (2) the Offer Termination Date; or (3)
midnight, central time in the United States, on the date all of the
conditions to the Offer set forth in Section 14 of this Offer to Purchase
have been satisfied, except for the conditions set forth in paragraphs
(6)(d)(ii) or (6)(e) of Section 14, and Purchaser elects to terminate the
Tender Agreement without the purchase of Shares thereunder; provided,
however, that,
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notwithstanding subparagraphs (2) and (3) above, if after the date of the
Shareholder Agreements (x) any person, entity or group (within the meaning
of Section 13(d)(3) of the Exchange Act) (other than the Purchaser or any
affiliate of Purchaser) acquires more than 5% or more of the outstanding
Shares and fails to tender such Shares in the Offer and continues to hold
such Shares and the Offer is terminated as a result of the failure of the
90% Condition to be satisfied, the Termination Date shall be the date 150
days after the Offer Termination Date, or (y) there is a public
announcement of, or the disclosure to the management, board of directors,
shareholders or advisors of the Company of, a Company Transaction Proposal,
and the board of directors of the Company rejects such Company Transaction
Proposal and continues to recommend the Offer and the Offer is terminated
as a result of the failure of the 90% Condition to be satisfied, the
Termination Date shall be the date 120 days after the Offer Termination
Date, or (z) there is a public announcement of, or the disclosure to the
management, board of directors, shareholders or advisors of the Company of,
a Company Transaction Proposal, and the board of directors of the Company
withdraws, withholds or modifies in a manner adverse to Purchaser its
approval of the Tender Agreement or the Offer pursuant to the applicable
provisions of the Tender Agreement, and the Offer is terminated as a result
of the failure of the 90% Condition to be satisfied, the Termination Date
shall be the date 150 days after the Offer Termination Date.
In addition, the Shareholder Agreements provide that in the event that (i)
the 90 % Condition is not satisfied, (ii) Purchaser notifies the Principal
Shareholder that Purchaser is prepared to close the Offer but for the fact that
the 90 % Condition is not satisfied, and (iii) the tender by the Principal
Shareholder of the Shares underlying such Principal Shareholder's Company
Options, either alone or when aggregated with other Company Options, would cause
the 90% Condition to be satisfied, then such Principal Shareholder hereby agrees
that, at any time prior to the Termination Date, immediately upon the request of
Purchaser, such Principal Shareholder shall exercise all Company Options
beneficially owned by such Principal Shareholder and immediately tender the
Shares received upon such exercise into the Offer (and not withdraw such Shares
so tendered). The Shareholder Agreements provide that Purchaser will advance to
the Principal Shareholders the funds necessary to pay the exercise price of such
Company Options, and the Principal Shareholders shall repay Purchaser the amount
of such advance, without interest, immediately upon receipt of the Offer Price
by such Principal Shareholder for the Shares received upon such exercise. Except
as may be required by the foregoing, the Principal Shareholders have agreed not
to exercise any Company Options owned by them.
Option to Purchase Shares. Pursuant to the Shareholders Agreements, each
Principal Shareholder has granted Purchaser an irrevocable option (the "Purchase
Options") to purchase any or all of such Principal Shareholder's Applicable
Shares at the Offer Price (as such may be increased in connection with the
Offer), subject to the terms of the Shareholder Agreements. The Purchase Options
may be exercised in whole at any time, and in part from time to time, from and
after the Offer Termination Date and ending as of the Termination Date;
provided, however, that each Purchase Option must be exercised in a
proportionate amount among the Principal Shareholders with the other Purchase
Options.
Voting Matters. The Shareholder Agreements provide that until the
Termination Date, at any meeting of the holders of Shares however called, or in
any other circumstance upon which the vote, consent or other approval of holders
of Shares is sought, the Principal Shareholders shall vote (or cause to be
voted) their issued and outstanding Applicable Shares: (i) against any action or
agreement that would result in a breach in any material respect of any covenant,
representation or warranty or any other material obligation or agreement of
Company under the Tender Agreement or the Shareholder Agreements; (ii) against
the following actions (other than the transactions contemplated by the Tender
Agreement): (A) any Company Transaction Proposal, and (B) to the extent that
such (1) are intended to, or could reasonably be expected to, impede, interfere
with, delay, postpone, or materially adversely affect the Offer, or the
transactions contemplated by the Tender Agreement or the Shareholder Agreements
or (2) are intended to, or could reasonably be expected to, implement or lead to
any Company Transaction Proposal: (x) any change in a majority of the persons
who constitute the board of directors of Company; (y) any change in the
capitalization of Company or any amendment of Company's Memorandum and Articles
of Association (other than as expressly contemplated by the Tender Agreement);
or (z) any other material change in Company's corporate structure or business;
and (iii) for the proposals required under the Tender Agreement to be presented
at the Special Meeting and
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any and all other matters contemplated by the Tender Agreement and presented at
the Special Meeting. In addition, each Principal Shareholder has granted to
Purchaser (or its nominees) an irrevocable proxy and attorney-in-fact (with full
power of substitution), until the Termination Date, to vote its Applicable
Shares, or to grant a consent or approval in respect of its Applicable Shares on
any and all matters relating to the Tender Agreement, the Offer or any Company
Transaction Proposal. Each Principal Shareholder has further agreed, until the
Termination Date, not to take any action (including the tender of any Shares)
that could reasonably be expected to, implement or lead to any Company
Transaction Proposal.
Capture Provisions. The Shareholder Agreements provide that, in the event
the Applicable Shares of a Principal Shareholder are sold, transferred,
exchanged, canceled or disposed of in connection with or as a result of any
Company Transaction Proposal that is in existence on, or that has been otherwise
made prior to the Termination Date (an "Alternative Disposition") then, within
five business days after the closing of such Alternative Disposition, such
Principal Shareholder shall tender and pay to, or shall cause to be tendered and
paid to, Purchaser (or its designee), in immediately available funds, the Profit
realized from such Alternative Disposition, less any withholdings. For the
purposes of the foregoing, "Profit" means an amount equal to the excess, if any,
of (a) the per Share value of all consideration received in connection with an
Alternative Disposition (valued and determined as set forth in the Shareholder
Agreements) over (b) the Offer Price, multiplied by Principal Shareholder's
Applicable Shares sold, transferred, exchanged, canceled or disposed of in such
Alternative Disposition.
Release Provisions. The Shareholder Agreements include an unconditional
release by each Principal Shareholder of all claims, demands, liabilities,
responsibilities, disputes, causes of action and similar matters of such
Principal Shareholder against the Company and its subsidiaries, subject to
certain exceptions relating to breaches of the Shareholder Agreements or the
Tender Agreement.
Escrow Agreements. In connection with the execution by Purchaser and the
Principal Shareholders of the Shareholder Agreements, each Principal Shareholder
has executed an Escrow Agreement pursuant to which such Principal Shareholder
has agreed that the Applicable Shares owned by such Principal Shareholder (with
certain exceptions in the case of Mr. Hollander) and any Shares issuable to such
Principal Shareholder upon exercise of Company Options shall be placed with an
escrow agent within five business days after the date of the Shareholder
Agreements, to be disbursed in accordance with the provisions of the Shareholder
Agreement.
DIRECTOR RELEASES
To resolve certain claims by Yehuda Kahane, Nahum Rozman and Eli Talmor,
each of whom is a director of the Company, that the Company owed such directors
compensation relating to past services, in connection with the execution of the
Tender Agreement, Purchaser required the Company to obtain general releases
(each a "Director Release" and collectively, the "Director Releases") from each
such individual. Pursuant to the Director Releases, the Company has agreed to
make a cash payment, immediately prior to the Closing Date, in an aggregate
amount of $7,500,000 (plus value added tax as prescribed by law against a duly
issued value added tax invoice) less any amounts required to be withheld under
applicable tax law, in full satisfaction of the release by all of such directors
of any and all claims, demands, liabilities, responsibilities, disputes, causes
of action and similar matters (whether relating to compensation or otherwise)
held by such directors against the Company or its subsidiaries. The $7,500,000
payment will be allocated among the directors as they determine.
The foregoing is a summary of the material terms of the Director Releases.
This summary is not a complete description of the terms and conditions thereof
and is qualified in its entirety by reference to the full text thereof, which is
incorporated herein by reference and a form of which has been filed with the
Commission as an exhibit to the Schedule 14D-1. The Director Releases may be
examined, and copies thereof may be obtained, as set forth in Section 9 above.
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CONFIDENTIALITY AGREEMENT
The Confidentiality Agreement dated January 6, 1999 between the Company and
the Purchaser (the "Confidentiality Agreement") contains customary provisions
pursuant to which, among other things, Purchaser has agreed, subject to certain
exceptions, to keep confidential for a period of two years all financial,
technical, commercial or other information concerning the Company which is
furnished to Purchaser by or on behalf of the Company (the "Confidential
Information"), and to use the Confidential Information solely for the purpose of
evaluating a possible business transaction involving the Company and Purchaser.
Pursuant to the Confidentiality Agreement, Purchaser has agreed that the
Confidential Information shall not be used for competitive purposes and that,
prior to the earlier of 18 months from the date of the Confidentiality Agreement
and the consummation of a business transaction between the Company and
Purchaser, Purchaser will not knowingly solicit any employee of the Company for
employment (with certain exceptions). The Confidentiality Agreement also
provides that the parties will not disclose to any person that any negotiations
have occurred concerning a possible transaction.
AGREEMENTS RELATING TO BOOLE & BABBAGE DISTRIBUTION AGREEMENT
As an inducement to Purchaser entering into the Tender Agreement and
consummating the transactions contemplated thereby, concurrently with the
execution and deliver of the Tender Agreement, the Company agreed to amend the
Distribution Agreement between the Company and BBE, its European distributor.
Purchaser is currently in the process of acquiring Boole, the parent company of
BBE. The Amendment excludes the Offer from the provisions of the Distribution
Agreement which provide that a change of control of the Company would result in
the right by BBE to terminate the Distribution Agreement and receive a
termination payment from the Company. In addition, the Company executed a side
letter (the "Side Letter") which provides that the Company will not exercise its
right to terminate the Distribution Agreement by reason of Purchaser's
acquisition of Boole until April 10, 1999. The Side Letter further provides
that, upon completion of the acquisition of Boole by Purchaser, the Company and
BBE will enter into a fourth amendment of the Distribution Agreement, which will
provide for the extension of the period during which the Company has a right to
terminate the Distribution Agreement as a result of Purchaser's purchase of
Boole until December 31, 1999, provided, that the Company will not give notice
of its intent to terminate the Distribution Agreement in connection with
Purchaser's purchase of Boole until the earlier of the day first succeeding the
termination of the Offer or July 12, 1999 and that such termination notice will
become effective within 60 days as of the receipt thereof by BBE.
EMPLOYMENT AGREEMENTS
Purchaser intends to maintain and extend existing employment agreements
with Mr. Barnea and other key management employees who are not directors of the
Company. In that connection, Purchaser is discussing amending certain provisions
of such agreements, including termination notice requirements, grants of stock
options by Purchaser and non-solicitation restrictions. It is anticipated that a
large portion of the stock options to be issued by Purchaser pursuant to the
Tender Agreement will be issued to key employees in connection with such amended
employment agreements. As of the date hereof, Purchaser and such employees have
not entered into definitive amendments to existing employment agreements.
13. DIVIDENDS AND DISTRIBUTIONS
The Tender Agreement provides that during the period from the date of the
Tender Agreement and continuing until the Closing Date, except as otherwise
required or contemplated by the Tender Agreement or as required by applicable
law, the Company shall, and shall cause its subsidiaries, to: (i) not amend its
Articles of Association or Memorandum of Association or other organizational or
governing documents or declare, set aside or pay any dividend or other
distribution or payment in cash, stock or property in respect of its capital
stock or acquire, directly or indirectly, any of its capital stock, (ii) not
issue, grant, sell or pledge or agree or authorize the issuance, grant, sale, or
pledge of any shares of, or rights of any kind to acquire shares of, its capital
stock other than Shares issuable upon exercise of stock options outstanding on
the date of the
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Tender Agreement or issuable upon the exercise of convertibility features in its
securities outstanding on the date of the Tender Agreement, and (iii) not
authorize or enter into any agreement to do any of the foregoing.
14. CERTAIN CONDITIONS OF THE OFFER
Purchaser shall not be required to accept for payment, purchase or pay for
any Shares tendered and Purchaser may terminate or, subject to the terms and
conditions of the Tender Agreement, amend the Offer as to any Shares not then
accepted for payment or may delay the acceptance for payment of Shares tendered,
if:
(1) at the expiration of the Offer, the number of Shares validly
tendered and not withdrawn shall not constitute at least 90% of the then
outstanding Shares not owned by Purchaser or its subsidiaries determined in
accordance with Section 236 of the Companies Ordinance;
(2) at the expiration of the Offer, all material filings required to
be made prior to the Closing Date with, and all material consents,
approvals, permits and authorizations required to be obtained prior to the
Closing Date from, governmental and regulatory authorities in connection
with the Offer and the consummation of the other transactions contemplated
hereby which are described in the Tender Agreement shall not have been made
or obtained, as the case may be, or the expiration of any applicable
waiting periods required by the governmental or regulatory authorities
described in the Tender Agreement shall not have occurred;
(3) the Shareholder Approvals shall not have been obtained at the
Special Meeting;
(4) the Company shall not have obtained agreements from the holders of
all Company Options in accordance with the provisions of the Tender
Agreement described Section 12 hereof under the heading "Tender
Agreement -- Options and Other Purchase Rights" permitting the cancellation
of such Company Options on the Closing Date in accordance with such
provisions; provided, however, that the foregoing shall not require the
Company to have obtained such an agreement from any holder of a Company
Option (other than a holder of an option to purchase capital stock of any
subsidiary of the Company) who is not employed by the Company or its
subsidiaries at the Closing Date;
(5) the Director Releases shall not have become effective in
accordance with their terms; or
(6) at any time after the date of the Tender Agreement and prior to
the acceptance for payment of Shares, any of the following events shall
occur:
(a) there shall have been any action or proceeding brought by any
governmental authority before any court, or any order or preliminary or
permanent injunction entered in any action or proceeding before any
court or governmental, administrative or regulatory authority or agency,
located or having jurisdiction within the United States or State of
Israel, or any other action taken, proposed or threatened, or statute,
rule, regulation, legislation, interpretation, judgment or order
proposed, sought, enacted, entered, enforced, promulgated, amended,
issued or deemed applicable to Purchaser, the Company or any subsidiary
or affiliate of Purchaser or the Company or the Offer, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency located or having jurisdiction within the
United States or the State of Israel, which could reasonably be expected
to have the effect of: (i) making illegal, materially delaying or
otherwise restraining or prohibiting the Offer or the acquisition by
Purchaser of any Shares or the Compulsory Acquisition; (ii) prohibiting
or materially limiting the ownership or operation by Purchaser or its
affiliates of any material portion of the business or assets of the
Company or compelling Purchaser to dispose of or hold separate all or
any material portion of the business or assets of the Company, in each
case as a result of the transactions contemplated by the Tender
Agreement; (iii) imposing material limitations on the ability of
Purchaser or any of its affiliates to exercise full rights of ownership
of the Shares, including, without limitation, the right to vote any
Shares purchased by them on all matters properly presented to the
shareholders of the Company; or (iv) preventing Purchaser or any of its
affiliates from acquiring, or to require divestiture by Purchaser or any
of its affiliates of, any Shares in the Offer; or
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(b) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) the declaration of any banking moratorium or any suspension
of payments in respect of banks or any limitation (whether or not
mandatory) on the extension of credit by lending institutions in the
United States, or (iii) the commencement of a war, material armed
hostilities or any other material international or national calamity
involving the United States or the State of Israel and, in the case of
armed hostilities involving Israel, having, or which could reasonably be
expected to have, a substantial continuing general effect on business
and financial conditions in Israel; or
(c) any Person, entity or "group" (as such term is used in Section
13(d)(3) of the Exchange Act) other than Purchaser or any of its
affiliates shall have become the beneficial owner (as that term is used
in Rule 13d-3 under the Exchange Act) of more than 50% of the
outstanding Shares; or
(d) (i) the Company shall have breached or failed to comply in any
material respect with any of its obligations under the Tender Agreement
(which breach, if curable, has not been cured within thirty (30) days
following receipt of written notice thereof by Purchaser specifying in
reasonable detail the basis of such alleged breach), (ii) or any
representation or warranty of the Company contained in the Tender
Agreement shall not have been true and correct as of such time, except
(x) for changes specifically permitted or contemplated by the Tender
Agreement; or (y) where the failure of representations and warranties
(without giving effect to any limitation based on materiality or
Material Adverse Effect or words of similar effect set forth therein) to
be true and correct would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect; or
(e) there shall have occurred a Material Adverse Effect, other than
as a result of the transactions specifically contemplated by the Tender
Agreement; or
(f) the Tender Agreement shall have been terminated pursuant to its
terms or amended pursuant to its terms to provide for such termination
of the Offer;
which, in the good faith judgment of Purchaser makes it inadvisable to proceed
with the Offer or with acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted or waived by Purchaser in whole or in part at any time or from time to
time in its discretion subject to the terms and conditions of the Tender
Agreement. The failure of Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. The Company will deliver to the Purchaser such evidence as Purchaser shall
reasonably request to evidence satisfaction of any of the conditions set forth
above, including certificates executed by officers of the Company.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company, but without any independent
investigation thereof, Purchaser is not aware of any license or regulatory
permit that appears to be material to the business of the Company and its
subsidiaries, taken as a whole, that might be adversely affected by Purchaser's
acquisition of Shares as contemplated herein or of any approval or other action
by any Governmental Authority that would be required for the acquisition or
ownership of Shares by Purchaser as contemplated herein. Should any such
approval or other action be required, Purchaser currently contemplates that such
approval or other action will be sought. While, except as otherwise expressly
described in this Section 15, Purchaser does not presently intend to delay the
acceptance for payment of or payment for Shares tendered pursuant to the Offer
pending the outcome of any such matter, there can be no assurance that any such
approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that failure to obtain any such approval or
other action might not result in consequences adverse to the Company's business
or that certain parts of the Company's business might not have to be disposed of
if such approvals were not obtained or such other actions were not taken or in
order to obtain any such approval
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or other action. If certain types of adverse action are taken with respect to
the matters discussed below, Purchaser could decline to accept for payment or
pay for any Shares tendered. See Section 14 above for certain conditions to the
Offer.
Antitrust. Under the applicable provisions of the Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended, (the "HSR Act"), and the rules
that have been promulgated thereunder by the Federal Trade Commission (the
"FTC"), the purchase of Shares pursuant to the Offer may be consummated
following the expiration of a 15-calendar-day waiting period following the
filing by Purchaser of a Pre-Merger Notification and Report Form with respect to
the Offer, unless Purchaser receives a request for additional information or
documentary material from the Antitrust Division of the United States Department
of Justice (the "Antitrust Division") or the FTC or unless early termination of
the waiting period is granted. Purchaser expects to file a Pre-Merger
Notification and Report Form with respect to the Offer as soon as practicable
following commencement of the Offer. If, within the initial 15-day waiting
period, either the Antitrust Division or the FTC requests additional information
or documentary material from Purchaser concerning the Offer, the waiting period
will be extended and will expire on the tenth calendar day after the date of
substantial compliance by Purchaser with such request. Only one extension of the
waiting period pursuant to a request for additional information is authorized by
the HSR Act. Thereafter, such waiting period may be extended only by court order
or with the consent of Purchaser. In practice, complying with a request for
additional information or documentary material can take a significant amount of
time. In addition, if the Antitrust Division or the FTC raises substantive
issues in connection with a proposed transaction, the parties frequently engage
in negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue. The Tender Agreement generally
provides that Purchaser will not be required to accept for payment, purchase or
pay for any Shares tendered until the expiration of any applicable waiting
period under the HSR Act.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's proposed acquisition of
the Company. At any time before or after Purchaser's purchase of Shares pursuant
to the Offer, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Shares pursuant to the Offer or
seeking the divestiture of Shares acquired by Purchaser or the divestiture of
substantial assets of Purchaser or its subsidiaries, or the Company or its
subsidiaries. Private parties may also bring legal action under certain
circumstances. There can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if such a challenge is made, of the
result thereof.
Federal Reserve Board Regulations. Regulations G, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock (which restriction
would include the Shares) if the credit is secured directly or indirectly by
margin stock. Such secured credit may not be directly secured by margin stock
and, in addition, such secured credit may not be indirectly secured by margin
stock having a value in an amount that exceeds the maximum loan value of all the
direct and indirect collateral securing the credit, including margin stock and
other collateral.
As described in Section 10 of this Offer to Purchase, the financing of the
Offer will not be directly or indirectly secured by the Shares or other
securities which constitute margin stock. Accordingly, all financing for the
Offer will be in full compliance with the Margin Regulations.
Israeli Regulatory Approvals. The closing of the Offer, and the acceptance
of Shares by the Purchaser under the Offer, is subject to (i) the approval of
the Investment Center of the Ministry of Trade and Industry of the State of
Israel (the "Investment Center") and (ii) the approval of the Office of the
Chief Scientist of the Ministry of Trade and Industry of the State of Israel
(the "OCS"). The closing of the Offer may require the approval of the Antitrust
Director of the State of Israel (the "Antitrust Director") unless an exemption
is obtained.
The approval of the Investment Center is required as a condition of the
"approved enterprise" programs in which the Company participates and pursuant to
which the Company receives certain tax benefits.
33
<PAGE> 36
The approval of the OCS is required as a condition of certain
royalty-bearing grants which the Company has received from the OCS in order to
fund certain research and development programs.
The Antitrust Director oversees antitrust enforcement in Israel. It is
unclear whether Israeli antitrust laws apply to the Offer. If the acquisition of
the Shares by the Purchaser pursuant to the Offer is deemed to be a "merger"
within the meaning of the Restrictive Trade Practices Law, 5748-1988, of the
State of Israel, then both the Purchaser and the Company will be required to
make filings with the Antitrust Director regarding sales activity in Israel, and
obtain the approval of the Antitrust Director to the transaction. The Antitrust
Director is required to respond to all such filings within 30 days.
16. FEES AND EXPENSES
Purchaser has retained Goldman, Sachs & Co. to act as the Dealer Managers
in connection with the Offer and to provide certain financial advisory services.
Goldman, Sachs & Co. will receive reasonable and customary fees, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.
Purchaser has retained MacKenzie Partners, Inc. to act as the Information
Agent and BankBoston, N.A. to act as the Depositary in connection with the
Offer. The Information Agent and the Depositary will receive reasonable and
customary compensation for their services, will be reimbursed for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses in connection therewith, including certain liabilities
under the federal securities laws.
Except as set forth above, Purchaser will not pay any fees or commissions
to any broker or dealer or other person for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will be reimbursed by Purchaser for customary mailing and handling expenses
incurred by them in forwarding the offering materials to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. In those jurisdictions where securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser by the Dealer Managers or one or
more registered brokers or dealers that are licensed under the laws of such
jurisdictions.
Purchaser has filed with the Commission the Schedule 14D-1 pursuant to Rule
14d-1 under the Exchange Act containing certain additional information with
respect to the Offer. Such Schedule and any amendments thereto, including
exhibits, may be examined and copies may be obtained from the principal office
of the Commission in the manner set forth in Section 9 above (except that they
will not be available at the regional offices of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR
IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
BMC SOFTWARE, INC.
March 11, 1999
34
<PAGE> 37
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name, present principal occupation or
employment and material occupation, positions, offices or employment for the
past five years of each director and executive officer of Purchaser. Unless
otherwise indicated below, the address of each director and officer is c/o BMC
Software, Inc., 2101 CityWest Blvd., Houston, TX 77042-2827 and each such person
is a citizen of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS EMPLOYMENT HISTORY
- ------------------------- ----------------------------
<S> <C>
Max P. Watson, Jr.................... Chairman of the Board (1992-present); President and Chief
Executive Officer (1990-present)
William M. Austin.................... Senior Vice President and Chief Financial Officer
(1997-present); Vice President and Chief Financial Officer,
McDonnell Douglas Corporation (1991-1997)
Robert E. Beauchamp.................. Senior Vice President, Research and Development
(1997-present); various sales and marketing positions
(1988-1997)
Richard P. Gardner................... Senior Vice President, Worldwide Sales and Marketing
(1997-present); Senior Vice President, North American
Sales (1994-1997); IBM Corporation (1975-1994)
Marco Landi.......................... Senior Vice President, European Operations (1998-present);
Chief Operating Officer (1996-1997) and various other
positions (1995-1996), Apple Computer Corporation; various
sales and management positions, Texas Instruments, Inc.
(1970-1995)
M. Brinkley Morse.................... Senior Vice President, Corporate Development (1998-present);
Secretary (1988-present); General Counsel (1988-1998)
Theodore W. Van Duyn................. Chief Technology Officer (1993-present); Senior Vice
President, Research and Development (1986-1993)
Roy J. Wilson........................ Senior Vice President, Human Resources (1997-present), Vice
President, Human Resources, Compaq Computer Corporation
(1993-1997)
Kevin Klausmeyer..................... Vice President (1998-present); Chief Accounting Officer
(1994-present), Arthur Andersen LLP (1979-1993)
Stephen B. Solcher................... Vice President (1998-present); Treasurer (1992-present)
John W. Barter....................... Director (1988-present); Executive Vice President and
President Allied Signal Automotive (1994-1997) and Senior
Vice President and Chief Financial Officer (1988-1994) and
various other positions (1977-1988), Allied Signal, Inc.;
Director, Iomega Corp. (1998-present); Director, Louisiana
Pacific Corporation (1998-present); Director, Kestrel
Solutions, Inc. (1998-present)
B. Garland Cupp...................... Director (1989-present); Executive Vice President and Chief
Information Officer (1985-1995), TRS Technologies; various
other positions (1978-1995), American Express Corporation
Meldon R. Gafner..................... Director (1987-present); Chairman of the Board, Kestrel
Solutions, Inc. (1997-present); Vice Chairman of Board
(1992-1997) and President (1988-1992), Comstream
Corporation
L.W. Gray............................ Director (1991-present); Vice President (1983-1987) and
various other positions (1961-1983), International Business
Machines Corporation
</TABLE>
I-1
<PAGE> 38
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS EMPLOYMENT HISTORY
- ------------------------- ----------------------------
<S> <C>
George F. Raymond.................... Director (1987-present); Founder, Automatic Business
Centers, Inc.; Director (1998-present), DocuCorp
International, Inc.; Director (1998-present), Atlantic
Data Services, Inc.; Director (1998-present), Balance Bar
Inc.
Tom C. Tinsley....................... Director (1997-present); Chief Executive Officer
(1998-present) and Managing Director and President
(1995-present) and Chief Operating Officer (1995-1998),
The Baan Company; McKinsey & Company, Inc. (1978-1995)
</TABLE>
I-2
<PAGE> 39
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent or delivered by each shareholder or
his broker, dealer, commercial bank, trust company or other nominee to the
Depositary, at one of the addresses set forth below:
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C> <C>
By Mail: By Facsimile By Hand: By Overnight Courier:
BankBoston, N.A. Transmission: Securities Transfer & BankBoston, N.A.
Attn: Corporate (FOR ELIGIBLE Reporting Services, Attn: Corporate
Reorganization INSTITUTIONS ONLY) Inc. Reorganization
P.O. Box 8029 781-575-2233/2232 c/o Boston EquiServe LP 150 Royall Street
Boston, MA 02266-8029 100 Williams Street Canton, MA 02021
Galleria
New York, NY 10038
</TABLE>
Any questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be
directed to the Information Agent at the telephone numbers and addresses below.
You may also contact your local broker, dealer, commercial bank or trust company
for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[MCKENZIE LOGO]
156 Fifth Avenue
New York, New York
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll-Free)
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES
OF
NEW DIMENSION SOFTWARE LTD.
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 11, 1999
BY
BMC SOFTWARE, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY,
APRIL 8, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Facsimile By Hand:
Transmission:
BANKBOSTON, N.A. SECURITIES TRANSFER &
Attn: Corporate Reorganization (FOR ELIGIBLE REPORTING SERVICES, INC.
P.O. Box 8029 INSTITUTIONS ONLY) c/o Boston EquiServe LP
Boston, MA 02266-8029 781-575-2233/2232 100 Williams Street
Galleria
New York, NY 10038
By Overnight Courier:
BANKBOSTON, N.A.
Attn: Corporate Reorganization
150 Royall Street
Canton, MA 02021
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST
SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW
AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
1
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ----------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) CERTIFICATE(S) TENDERED
ON THE CERTIFICATE(S) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES
CERTIFICATE REPRESENTED BY NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL SHARES
- ----------------------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the
Depositary are tendered. See Instruction 4.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of Shares (as defined
below) of New Dimension Software Ltd. ("Shareholders") if certificates
evidencing Shares ("Certificates") are to be forwarded herewith or if delivery
of Shares is to be made by book-entry transfer to an account maintained by
BankBoston, N.A. (the "Depositary") at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth under
"Procedure for Tendering Shares" in the Offer to Purchase (as defined below).
Shareholders whose Certificates are not immediately available or who cannot
deliver either their Certificates for, or a Book-Entry Confirmation (as defined
under "Procedure for Tendering Shares -- Book-Entry Transfer" in the Offer to
Purchase) with respect to, their Shares and all other required documents to the
Depositary prior to the Expiration Date (as defined under "Terms of the Offer"
in the Offer to Purchase) may tender their Shares according to the guaranteed
delivery procedure set forth under "Procedure for Tendering Shares -- Guaranteed
Delivery" in the Offer to Purchase. See Instruction 2 hereof. Delivery of
documents to the Book-Entry Transfer Facility does not constitute delivery to
the Depositary.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY, AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER).
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
- --------------------------------------------------------------------------------
Window Ticket Number (if any):
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- --------------------------------------------------------------------
Name of Institution that Guaranteed Delivery:
- ---------------------------------------------------------------------------
If Delivered by book-entry transfer, Check box: [ ]
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
3
<PAGE> 4
---------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned, or if Shares delivered by book-entry transfer that are
not accepted for payment are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility, other than to the account
indicated above.
Issue (check appropriate box(es)):
[ ] Check to:
[ ] Certificate(s) to
Name
-------------------------------------------------------
(PLEASE PRINT)
Address
-----------------------------------------------------
---------------------------------------------------------------
(INCLUDING ZIP CODE)
---------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
Credit unpurchased Shares delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
Check box:
[ ] Depository Trust Company
Account Number:
------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown above.
Mail (check appropriate box(es)):
[ ] Check to:
[ ] Certificate(s) to
Name
-------------------------------------------------------
(PLEASE PRINT)
Address
-----------------------------------------------------
---------------------------------------------------------------
(INCLUDE ZIP CODE)
---------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE FORM W-9 ON REVERSE SIDE)
---------------------------------------------------------------
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
4
<PAGE> 5
Ladies and Gentlemen:
The undersigned hereby tenders to BMC Software, Inc., a Delaware
corporation ("Purchaser"), the above-described ordinary shares, NIS 0.01 par
value per share (the "Shares"), of New Dimension Software Ltd., an Israeli
corporation (the "Company"), at a purchase price of $52.50 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Purchaser's Offer to Purchase, dated March 11, 1999 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). The undersigned understands that the
Purchaser reserves the right to assign, in its sole discretion, to any
newly-formed direct wholly owned subsidiary of Purchaser, the right to purchase
Shares tendered pursuant to the Offer.
Accordingly, the undersigned hereby deposits with you the above-described
certificates representing the Shares. Subject to, and effective upon, acceptance
for payment of the Shares validly tendered herewith in accordance with the terms
and subject to the conditions of the Offer, the undersigned hereby sells,
assigns and transfers to, or upon the order of, Purchaser all right, title and
interest in and to all of the Shares that are being tendered hereby that are
purchased pursuant to the Offer and any and all other distributions, rights,
other Shares or other securities issued or issuable in respect of such Shares on
or after March 11, 1999 (a "Distribution") and hereby irrevocably constitutes
and appoints the Depositary as the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Shares (and any Distributions), with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to (i) deliver certificates (the
"Certificates") evidencing such Shares (and any Distributions), or transfer
ownership of such Shares (and any Distributions) on the account books maintained
by the Book-Entry Transfer Facility together, in any such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
Purchaser upon receipt by the Depositary, as the undersigned's agent, of the
purchase price with respect to such Shares, (ii) present such Shares (and any
Distributions) for transfer on the books of the Company and (iii) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any Distributions), all in accordance with the terms and subject to
the Offer.
The undersigned hereby irrevocably appoints each designee of Purchaser as
the attorney-in-fact and proxy of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to all
Shares (and any Distributions) tendered hereby, including, without limitation,
the right to vote such Shares (and any Distributions) in such manner as each
such attorney and proxy or his substitute shall, in his sole discretion, deem
proper. All such powers of attorney and proxies shall be considered coupled with
an interest in the Shares tendered herewith and therefore be irrevocable. Such
appointment will be effective when, and only to the extent that, Purchaser
accepts such Shares for payment pursuant to the Offer. Upon such acceptance for
payment, all prior powers of attorney and proxies given by the undersigned with
respect to such Shares (and any Distributions) will be revoked, without further
action, and no subsequent powers of attorneys and proxies may be given by the
undersigned with respect thereto (and, if given, will be deemed ineffective).
The designees of Purchaser will, with respect to the Shares (and any
Distributions) for which such appointment is effective, be empowered to exercise
all voting and other rights of the undersigned with respect to such Shares (and
any Distributions) as they in their sole discretion may deem proper, including,
without limitation, in respect of any general meeting of the Shareholders, or
any adjournment or postponement thereof, in connection with any, action by
written consent in lieu of a meeting or otherwise. The undersigned acknowledges
that Purchaser reserves the absolute right to require that, in order for Shares
to be deemed validly tendered, immediately upon the acceptance for payment of
such Shares, Purchaser or its designees must be able to exercise full voting
rights with respect to such Shares (and any Distributions), including, without
limitation, the right to vote at any meeting of Shareholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distributions) tendered hereby and that when such Shares (and any
Distributions) are accepted for payment and paid for by Purchaser, Purchaser
will acquire good, marketable and unencumbered title thereto, free and clear of
all liens, restrictions, charges and encumbrances, and that the Shares (and any
Distributions) tendered hereby will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of Shares (and any Distributions) tendered
hereby. In addition, the undersigned shall
5
<PAGE> 6
promptly remit and transfer to the Depositary for the account of Purchaser any
and all Distributions issued to the undersigned on or after March 11, 1999 in
respect of the Shares tendered hereby, accompanied by appropriate documentation
of transfer, and pending such remittance and transfer or appropriate assurance
thereof, Purchaser shall be entitled to all rights and privileges as owner of
any such Distributions and may withhold the entire purchase price or deduct from
the purchase price the amount of value thereof, as determined by Purchaser in
its sole discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in "Procedure for Tendering Shares" in the Offer
to Purchase and in the instructions hereto will constitute a binding agreement
between the undersigned and Purchaser with respect to such Shares upon the terms
and subject to the conditions of the Offer. The undersigned recognizes that,
under certain circumstances set forth in the Offer to Purchase, Purchaser may
not be required to accept for payment any of the Shares tendered hereby.
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Certificates
evidencing Shares not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any Certificates
evidencing Shares not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under "Description of Shares Tendered." In the event that both the
"Special Payment Instructions" and the "Special Delivery Instructions" are
completed, please issue the check for the purchase price and/or return any such
Certificates evidencing Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to, the person(s) so indicated. Unless
otherwise indicated herein under "Special Payment Instructions," in the case of
a book-entry delivery of Shares, please credit the account maintained at the
Book-Entry Transfer Facility indicated above with respect to any Shares not
accepted for payment. The undersigned recognizes that Purchaser has no
obligation pursuant to the "Special Payment Instructions" to transfer any Shares
from the name of the registered holder thereof if Purchaser does not accept for
payment any of the Shares tendered hereby.
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution which is a member of the Medallion Signature Guarantee Program, or
by any other "eligible guarantor institution," as such term is defined in Rule
17 Ad-15 under the Exchange Act (each an "Eligible Institution"). Signatures on
this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered holders (which term, for purposes of
this section, includes any participant in the Book-Entry Transfer Facility's
system whose name appears on a security position listing as the owner of the
Shares) of Shares tendered herewith and such registered holder has not completed
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are
tendered herewith for the account of an Eligible Institution. See Instruction 5.
If the Certificates are registered in the name of a person other than the signer
of this Letter of Transmittal or if Certificates evidencing Shares not accepted
for payment or not tendered are to be issued to a person other than the
registered holder, then the tendered Certificates must be endorsed or
accompanied by duly executed stock powers, in each case signed exactly as the
name or names of the registered holder or holders appear on the Certificates,
with the signatures on the Certificates or stock powers guaranteed by an
Eligible Institution as provided herein. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed
by Shareholders if Certificates are to be forwarded herewith or if delivery of
Shares is to be made pursuant to the procedures for book-entry transfer set
forth under "Procedure for Tendering Shares -- Book-Entry Transfer" in the Offer
to Purchase. For a Shareholder to validly tender Shares pursuant to the Offer,
either (a) a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), with all required signature guarantees, or
in the case of a book-entry transfer, an Agent's Message (as defined in the
Offer to Purchase), and all other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth above prior to the Expiration Date (as defined in the Offer to Purchase)
and either (i) Certificates representing such tendered Shares must be received
by the Depositary at one of such addresses prior to the Expiration Date or (ii)
such Shares must be delivered pursuant to the procedures for book-entry transfer
set forth under "Procedure for Tendering Shares -- Book-Entry Transfer" in the
Offer to Purchase and a Book-Entry Confirmation must be received by the
Depositary prior to the Expiration Date or (b) the tendering Shareholder must
comply with the guaranteed delivery procedures set forth below and under
"Procedure for Tendering Shares -- Guaranteed Delivery" in the Offer to
Purchase.
Shareholders whose Certificates are not immediately available or who cannot
deliver their Certificates and all other required documents to the Depositary or
complete the procedures for book-entry transfer prior to the Expiration Date may
tender their Shares by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in
"Procedure for Tendering Shares -- Guaranteed Delivery" in the Offer to
Purchase. Pursuant to such procedures (i) such tender must be made by or through
an Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by Purchaser, must
be received by the Depositary prior to the Expiration Date and (iii) the
Certificates representing all tendered Shares in proper form for transfer, or a
Book-Entry Confirmation with respect to all tendered Shares, together with a
properly completed and duly executed Letter of Transmittal (or a manually-signed
facsimile thereof), with all required signature guarantees, or in the case of a
book-entry transfer, an Agent's Message, and all other documents required by
this Letter of Transmittal, must be received by the Depositary within three
trading days after the date of execution of such Notice of Guaranteed Delivery.
A "trading day" is any day on which the Nasdaq National Market is open for
business. If Certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
7
<PAGE> 8
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering Shareholders, by execution of
this Letter of Transmittal (or a facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
information required under "Description of Shares Tendered" should be listed on
a separate signed schedule attached hereto.
4. Partial Tenders. If fewer than all of the Shares represented by any
Certificates delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such case, a new Certificate for the remainder
of the Shares that were evidenced by your old Certificate(s) will be sent,
without expense, to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" in this Letter of Transmittal, as soon
as practicable after the Expiration Date. All Shares represented by
Certificate(s) delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal, Instruments of Transfer and
Endorsements.
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) without alteration,
enlargement or any change whatsoever.
(b) If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
(c) If any of the tendered Shares are registered in different names on
several Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
Certificates.
(d) If this Letter of Transmittal or any Certificates or instruments of
transfer are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of each person's authority to so act
must be submitted.
(e) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares listed and transmitted hereby, no endorsements of Certificates or
separate instruments of transfer are required. If, however, payment is to be
made to, or Certificates not tendered or not purchased are to be issued or
returned to a person other than the registered holder(s) then the Certificates
must be endorsed or accompanied by appropriate instruments of transfer.
Signatures on such certificates or instruments of transfer must be guaranteed by
an Eligible Institution.
(f) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by the Certificate(s) listed and
transmitted hereby, the Certificate(s) must be endorsed or accompanied by
appropriate instruments of transfer, in either case signed exactly as the
Share(s) of the registered holder(s) appear on the Certificate(s). Signatures on
such Certificate(s) or instruments of transfer must be guaranteed by an Eligible
Institution.
6. Transfer Taxes. Except as set forth in this Instruction 6, Purchaser
will pay or cause to be paid any transfer taxes with respect to the transfer and
sale of Shares to it or its order pursuant to the Offer. If, however, payment of
the purchase price is to be made to, or (in the circumstances permitted hereby)
if Certificates for Shares not tendered or not purchased are to be registered in
the name of, any person other than the registered holder(s), or if tendered
Certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any transfer taxes (whether
imposed on the registered holder(s) or such person) payable on account of the
transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Certificate(s) listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instructions. If a check and/or
Certificates for unpurchased Shares are to be issued in the name of a person
other than the signer of this Letter of Transmittal or if a check is to be sent
and/or such Certificates are to be returned to someone other than the signer of
this Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal must be completed. If any
tendered Shares are not
8
<PAGE> 9
purchased for any reason and such Shares are delivered by Book-Entry Transfer
Facility, such Shares will be credited to an account maintained at the
appropriate Book-Entry Transfer Facility.
8. Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares pursuant to any of the procedures described herein will
be determined by Purchaser in its sole discretion, which determination shall be
final and binding on all parties. Purchaser reserves the absolute right to
reject any or all tenders of Shares determined not to be in proper form or the
acceptance of or payment for which may, in the opinion of counsel, be unlawful
and reserves the absolute right (but shall not be obligated) to waive any defect
or irregularity in any tender of Shares. Subject to the terms of the Tender
Agreement, Purchaser also reserves the absolute right (but shall not be
obligated) to waive or to amend any of the conditions of the Offer or any defect
or irregularity in any tender with respect to Shares of any particular
Shareholder, whether or not similar defects or irregularities are waived in the
case of other Shareholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived.
Purchaser's interpretation of the terms and conditions of the Offer (including
this Letter of Transmittal and the instructions hereto) will be final and
binding on all parties. None of Purchaser, the Dealer Managers, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
9. Requests for Assistance or Additional Copies. Questions and requests for
assistance may be directed to the Information Agent or the Dealer Managers at
their respective addresses or telephone numbers set forth below and requests for
additional copies of the Offer to Purchase, this Letter of Transmittal and the
Notice of Guaranteed Delivery may be directed to the Information Agent or
brokers, dealers, commercial banks and trust companies and such materials will
be furnished at Purchaser's expense.
10. Waiver of Conditions. Subject to the Tender Agreement, the conditions
of the Offer may be waived by the Purchaser, in whole or in part, at any time or
from time to time, in the Purchaser's sole discretion.
11. Backup Withholding Tax. Except in the case of foreign persons, each
tendering Shareholder is required to provide the Depositary with a correct
Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided
under "Important Tax Information" below, and to certify that such Shareholder is
not subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering Shareholder to 31% federal income
tax backup withholding on the payment of the purchase price for the Shares. The
tendering Shareholder should indicate in the box in Part I of the Substitute
Form W-9 if such Shareholder has not been issued a TIN and has applied for a TIN
or intends to apply for a TIN in the near future. If the Shareholder has
indicated in the box in Part I that a TIN has been applied for and the
Depositary is not provided with a TIN by the time of payment, the Depositary
will withhold 31% of all payments of the purchase price, if any, made thereafter
pursuant to the Offer until a TIN is provided to the Depositary. A tendering
Shareholder who is a foreign person (i.e., who is not a citizen or resident of
the United States) should provide the Depositary with a completed Form W-8.
Please contact the Depositary, if necessary, in order to obtain a copy of Form
W-8.
12. Lost or Destroyed Certificates. If any Certificate(s) representing
Shares has been lost or destroyed, the holders should promptly notify the
Depositary, BankBoston, N.A., at the address or facsimile number set forth
herein. The holders will then be instructed as to the procedure to be followed
in order to replace the Certificate(s). This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost or
destroyed Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, MUST BE RECEIVED BY THE DEPOSITARY (TOGETHER WITH
CERTIFICATES OR A BOOK-ENTRY CONFIRMATION FOR SHARES AND ALL OTHER REQUIRED
DOCUMENTS AND/OR SIGNATURES), OR A NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE
OFFER TO PURCHASE).
9
<PAGE> 10
IMPORTANT TAX INFORMATION
Under federal income tax law, a Shareholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payor) with such
Shareholder's correct TIN on Substitute Form W-9 below. If such Shareholder is
an individual, the TIN is such individual's social security number. If the
tendering Shareholder has not been issued a TIN and has applied for a number or
intends to apply for a number in the near future, such Shareholder should so
indicate on the Substitute Form W-9. If the Depositary is not provided with the
correct TIN, the Shareholder may be subject to a $50 penalty imposed by the
Internal Revenue Service (the "IRS"). In addition, payments that are made to
such Shareholders with respect to Shares purchased pursuant to the Offer may be
subject to backup federal income tax withholding.
Certain Shareholders are not subject to these backup withholding and
reporting requirements. In order for a foreign person to qualify as an exempt
recipient, such Shareholder generally must submit an I.R.S. Form W-8. An I.R.S.
Form W-8 can be obtained from the Depositary. See the enclosed Guidelines or
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions. Other exempt recipients should complete Form W-9 in
order to avoid the possible imposition of backup withholding.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the Shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding with respect to payment of
the purchase price for Shares purchased pursuant to the Offer, generally a
Shareholder must provide the Depositary with his correct TIN by completing the
Substitute Form W-9 below, certifying that the TIN provided on Substitute Form
W-9 is correct (or that such Shareholder is awaiting a TIN) and that (i) such
Shareholder is exempt from backup withholding or (ii) such Shareholder has not
been notified by the IRS that such Shareholder is subject to backup withholding
as a result of failure to report all interest or dividends or (iii) the IRS has
notified the Shareholder that such Shareholder is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are registered in more than one name or are not
in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report.
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INSTRUCTIONS.
10
<PAGE> 11
IMPORTANT
SHAREHOLDER: SIGN HERE AND COMPLETE SUBSTITUTE
FORM W-9 ON REVERSE
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(Signature(s) of Shareholder(s))
DATED , 1999
(Must be signed by the registered holder(s) exactly as name(s) appears(s) on the
Certificate or on a security position listing or by person(s) authorized to
become registered holder(s) by Certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, agents, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information.
See Instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Type or Print)
Capacity (Full title):
- --------------------------------------------------------------------------------
(See Instruction 5)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Codes and Telephone Numbers:
- -------------------------------------------------------------------------------
(Home)
- --------------------------------------------------------------------------------
(Business)
Taxpayer Identification or Social Security No.:
- ---------------------------------------------------------------------
(Complete Substitution Form W-9 on following page)
11
<PAGE> 12
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
(FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.)
- --------------------------------------------------------------------------------
Authorized Signature(s):
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Title:
- --------------------------------------------------------------------------------
Name of Firm:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address Including Zip Code:
- --------------------------------------------------------------------------------
Area Code and Telephone No.:
- --------------------------------------------------------------------------------
Dated:
12
<PAGE> 13
<TABLE>
<C> <C> <S> <C>
- -------------------------------------------------------------------------------------------
PAYOR'S NAME: BANKBOSTON, N.A., AS DEPOSITARY
- -------------------------------------------------------------------------------------------
PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT
AND CERTIFY BY SIGNING AND DATING BELOW
-----------------------------------------------------
NAME
SUBSTITUTE
FORM W-9 ------------------------------------------
DEPARTMENT OF THE
TREASURY Business Name
INTERNAL REVENUE
SERVICE Please check appropriate box:
[ ] Individual/Sole Proprietor
PAYORS REQUEST [ ] Corporation
FOR TAXPAYER [ ] Partnership [ ] Other
IDENTIFICATION
NUMBER ------------------------------------------
("TIN")
AND CERTIFICATION Address:
------------------------------------------
City, State, Zip Code:
------------------------------------------
-----------------------------------------------------
PART 3 -- CERTIFICATION. Under penalties of
perjury, I certify that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me), AND
(2) I am not subject to backup withholding either
because (a) I am exempt from backup withholding,
or (b) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to
backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to
backup withholding.
CERTIFICATION INSTRUCTIONS. -- You must cross out
item (2) above if you have been notified by the
IRS that you are subject to backup withholding
because of under reporting interest or dividends
on your tax return. However, if after being
notified by the IRS that you were subject to
backup withholding, you received another
notification from the IRS that you are no longer
subject to backup withholding, do not cross out
item (2). (Also see instructions in the enclosed
Guidelines).
-----------------------------------------------------
SIGNATURE
----------------------------------------- DATE
------------, 1999
- -------------------------------------------------------------------------------------------
<CAPTION>
<C> <C> <C>
P
- ------------------------------------------------------------------------------------------
PART I -- Social Security Number OR
Employer Identification Number
------------------------------------------
(If awaiting TIN, write "Applied For")
-----------------------------------------------------
PART II -- For Payees exempt from backup
SUBSTITUTE withholding, see the enclosed Guidelines
FORM W-9 for Certification of Taxpayer
DEPARTMENT OF THE Identification Number on Substitute Form
TREASURY W-9, check the exempt box below, and
INTERNAL REVENUE complete the Form W-9.
SERVICE
Exempt [ ]
PAYORS REQUEST
FOR TAXPAYER
IDENTIFICATION
NUMBER
("TIN")
AND CERTIFICATION
-----------------------------------------------------
(1) The number shown on this form is my
correct Taxpayer Identification Number (or
I am waiting for a (2) I am not subject to
backup withholding either because (a) I am
exempt from backup withholding, or (b) I
have not been notified by the Internal
Revenue Service ("IRS") that I am subject
to backup withholding as a result of a
failure to report all interest or
dividends, or (c) the IRS has notified me
that I am no longer are subject to backup
withholding because of under reporting
interest or dividends on your tax return.
However, if after being notified by the
IRS that you were subject to backup
withholding, you received another
notification from the IRS that you are no
longer subject to backup withholding, do
not cross out item (2). (Also see
instructions in the enclosed Guidelines).
-----------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INSTRUCTIONS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART I
OF THE SUBSTITUTE FORM W-9.
13
<PAGE> 14
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments of the Offer Price made to me thereafter will be withheld until I
provide a number.
Signature:
- ---------------------------------- Date:
- ------------ , 1999
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be directed
to the Information Agent or the Dealer Managers as set forth below:
THE INFORMATION AGENT FOR THE OFFER IS:
[MCKENZIE LOGO]
156 Fifth Avenue
New York, New York
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll-Free)
14
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ORDINARY SHARES
OF
NEW DIMENSION SOFTWARE LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY,
APRIL 8, 1999, UNLESS THE OFFER IS EXTENDED.
BMC Software, Inc., a Delaware corporation, has offered to purchase all the
outstanding ordinary shares, NIS 0.01 par value per share, of New Dimension
Software Ltd., an Israeli corporation, at a purchase price of $52.50 per share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated March 11, 1999 (the "Offer to Purchase"),
and the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer if certificates representing the Shares (the
"Certificates") are not immediately available or the procedures for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach BankBoston, N.A. (the "Depositary") at the address
set forth below prior to the Expiration Date (as defined in the Offer to
Purchase). This Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile transmission or mailed to the Depositary. See
"Procedure for Tendering Shares -- Guaranteed Delivery" in the Offer to
Purchase.
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C> <C>
By Facsimile
By Mail: Transmission: By Hand: By Overnight Courier:
BankBoston, N.A. (FOR ELIGIBLE Securities Transfer & BankBoston, N.A.
Attn: Corporate Reorganization INSTITUTIONS ONLY) Reporting Services, Inc. Attn: Corporate Reorganization
P.O. Box 8029 781-575-2233/2232 c/o Boston EquiServe LP 150 Royall Street
Boston, MA 02266-8029 100 Williams Street Canton, MA 02021
Galleria
New York, NY 10038
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
1
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to BMC Software, Inc., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated March 11, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer"), receipt of each of which is
hereby acknowledged, the number of Shares indicated below pursuant to the
guaranteed delivery procedures set forth under "Procedure for Tendering
Shares -- Guaranteed Delivery" in the Offer to Purchase.
================================================================================
Number of Shares:
----------------------------------------------------------
Certificate Nos. (if available):
- ---------------------------------------------------------------------------
Check box below if Shares will be tendered by book-entry transfer
[ ] The Depository Trust Company
Account Number:
------------------------------------------------------------
Dated: , 1999
--------------------------------
================================================================================
================================================================================
Name(s) of Record Holder(s):
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(Please Type or Print)
Address(es):
--------------------------------------------------------------
- --------------------------------------------------------------------------
(Zip Code)
Area Code and Tel. No.:
---------------------------------------------------
Signature(s):
-------------------------------------------------------------
================================================================================
THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an Eligible Institution (as such term is defined under
"Procedure for Tendering Shares -- Signature Guarantee" in the Offer to
Purchase), hereby guarantees to deliver to the Depositary the Certificates
representing the Shares tendered hereby, in proper form for transfer, or a
Book-Entry Confirmation (as defined under "Procedure for Tendering
Shares -- Book-Entry Transfer" in the Offer to Purchase) with respect to such
Shares, in either case together with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof), with all
required signature guarantees and all other documents required by the Letter of
Transmittal, all within three trading days (as defined in the Offer to Purchase)
after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for the Shares to the Depositary within the time period stated
herein. Failure to do so could result in financial loss to such Eligible
Institution. All capitalized terms used herein have the meanings set forth in
the Offer to Purchase.
<TABLE>
<S> <C>
- ------------------------------------------------ ------------------------------------------------
Name of Firm Authorized Signature
- ------------------------------------------------ ------------------------------------------------
Address Title
Name:
- ------------------------------------------------ ------------------------------------------
Zip Code Please Type or Print
Area Code and Tel. No.: Dated: , 1999
------------------------- --------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT ONLY TOGETHER WITH YOUR LETTER
OF TRANSMITTAL.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING ORDINARY SHARES
OF
NEW DIMENSION SOFTWARE LTD.
AT
$52.50 NET PER SHARE
BY
BMC SOFTWARE, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, APRIL 8, 1999, UNLESS THE OFFER IS EXTENDED.
March 11, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by BMC Software, Inc., a Delaware corporation
("Purchaser"), to act as Dealer Managers in connection with Purchaser's offer to
purchase all of the outstanding ordinary shares, par value NIS 0.01 per share
(the "Shares"), of New Dimension Software Ltd., an Israeli corporation (the
"Company"), at a purchase price of $52.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated March 11, 1999 (the "Offer to Purchase"), and the related Letter of
Transmittal enclosed herewith (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. Offer to Purchase, dated March 11, 1999.
2. The Letter of Transmittal to tender Shares is for your use and for
the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares.
3. A letter to shareholders from the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to
shareholders, which set forth the recommendation of the Company's Board of
Directors that shareholders tender their Shares pursuant to the Offer.
4. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if neither of the two procedures for tendering Shares set forth
in the Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
1
<PAGE> 2
7. Certificate of Foreign Status on Form W-8.
8. A return envelope addressed to BankBoston, N.A., the Depositary.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY
AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 8, 1999, UNLESS THE OFFER IS
EXTENDED.
Please note the following:
1. The offer price is $52.50 per Share, net to the seller in cash.
2. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which constitutes at least ninety percent (90%) of the
Shares then issued and outstanding and not owned by Purchaser or its
subsidiaries determined in accordance with Section 236 of the Companies
Ordinance (New Version) 5743-1983 of the State of Israel, (ii) satisfaction
of certain regulatory conditions, including the expiration or termination
prior to the expiration of the Offer of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iii) certain approvals related to the Offer by the shareholders of
the Company at a Special Meeting as described in the Offer to Purchase, and
(iv) certain other conditions. See "Introduction," "Terms of the Offer" and
"Certain Conditions of the Offer" in the Offer to Purchase.
3. The Offer is being made for all outstanding Shares.
4. Tendering shareholders will not be obligated to pay brokerage fees
or commissions to the Dealer Managers, the Depositary or the Information
Agent (as defined in the Offer to Purchase) or, except as set forth in
Instruction 6 to the Letter of Transmittal, transfer taxes on the sale of
Shares pursuant to the Offer. However, federal income tax backup
withholding at a rate of 31% may be required unless an exemption is
provided or unless the required taxpayer identification information is
provided. See Instruction 10 of, and "IMPORTANT TAX INFORMATION" in, the
Letter of Transmittal.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Thursday, April 8, 1999, unless extended. See "Terms of
Offer" in the Offer to Purchase.
6. The Board of Directors of the Company has unanimously determined
that, as of the date of the Tender Agreement described in the Offer to
Purchase, the Offer is fair to and in the best interests of the
shareholders of the Company and resolved, subject to the receipt of certain
shareholder approvals relating to the Offer as described in the Offer to
Purchase, to recommend acceptance of the Offer by the shareholders of the
Company.
7. In all cases, payment for Shares purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates
for, or a Book-Entry Confirmation (as defined under "Procedure for
Tendering Shares -- Book-Entry Transfer" in the Offer to Purchase) with
respect to, such Shares and a Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed with all required
signature guarantees, or in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and all other documents
required by the Letter of Transmittal. See "Procedures for Tendering
Shares" in the Offer to Purchase.
For Shares to be validly tendered pursuant to the Offer, either (a) a
Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, with all required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message, and all other documents
required by the Letter of Transmittal, must be received by the Depositary at one
of its addresses set forth on the back cover of the Offer to Purchase prior to
the Expiration Date (as defined in the Offer to Purchase) and either (i)
certificates representing such tendered Shares must be received by the
Depositary at one of such addresses prior to the
2
<PAGE> 3
Expiration Date or (ii) such Shares must be delivered pursuant to the procedures
for book-entry transfer set forth in the Offer to Purchase and a Book-Entry
Confirmation (as defined in the Offer to Purchase) must be received by the
Depositary prior to the Expiration Date or (b) the tendering shareholder must
comply with the guaranteed delivery procedures set forth in the Offer to
Purchase. No alternative, conditional or contingent tenders will be accepted. If
a shareholder desires to tender Shares pursuant to the Offer and such
shareholders certificates for such Shares are not immediately available or the
procedures for book-entry transfer set forth in the Offer to Purchase cannot be
completed on a timely basis or time will not permit all required documents to
reach BankBoston, N.A. (the "Depositary") prior to the Expiration Date, such
Shares may nevertheless be tendered according to the guaranteed delivery
procedures under "Procedure for Tendering Shares -- Guaranteed Delivery" in the
Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other persons for soliciting tenders of Shares pursuant to the Offer (other than
the Dealer Managers, the Depositary and the Information Agent as described in
the Offer to Purchase). Purchaser will, however, upon request, reimburse you for
customary mailing and handling expenses incurred by you in forwarding the
enclosed tender offer materials to your clients. Purchaser will pay or cause to
be paid any transfer taxes payable on the sale of Shares to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Goldman, Sachs & Co., the Dealer Managers for the Offer, at 85 Broad Street, New
York, New York 10004, or MacKenzie Partners, Inc., the Information Agent for the
Offer at 156 Fifth Avenue, New York, New York, telephone (800) 322-2885.
Requests for additional copies of the enclosed tender offer materials may
be directed to the Information Agent at the above address and telephone number.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS THE AGENT OF PURCHASER, THE COMPANY, THE DEPOSITARY, THE
INFORMATION AGENT, THE DEALER MANAGERS OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING ORDINARY SHARES
OF
NEW DIMENSION SOFTWARE LTD.
AT
$52.50 NET PER SHARE
BY
BMC SOFTWARE, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THURSDAY, APRIL 8, 1999 UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated March 11,
1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to the offer by BMC Software, Inc., a Delaware corporation
("Purchaser"), to purchase all outstanding ordinary shares, NIS 0.01 par value
per share, (the "Shares"), of New Dimension Software Ltd., an Israeli
corporation (the "Company"), at a purchase price of $52.50 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase and the Letter of Transmittal. Holders who desire to tender
Shares pursuant to the Offer and whose certificates for such Shares (the
"Certificates") are not immediately available or the procedures for book-entry
transfer set forth in the Offer to Purchase cannot be completed on a timely
basis or time will not permit all required documents to reach BankBoston, N.A.
(the "Depositary") prior to the Expiration Date (as defined in the Offer to
Purchase) may nevertheless tender their Shares according to the guaranteed
delivery procedures set forth under "Procedure of Tendering Shares Guaranteed
Delivery" in the Offer to Purchase.
We are (or our nominee is) the holder of record of Shares held by us for
your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The offer price is $52.50 per Share, net to the seller in cash.
2. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which constitutes at least ninety percent (90%) of the
Shares then issued and outstanding and not owned by Purchaser or its
subsidiaries determined in accordance with Section 236 of the Companies
Ordinance (New Version) 5743-1983 of
1
<PAGE> 2
the State of Israel, (ii) satisfaction of certain regulatory conditions,
including the expiration or termination prior to the expiration of the
Offer of all waiting periods imposed by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (iii) certain
approvals related to the Offer by the shareholders of the Company at a
Special Meeting as described in the Offer to Purchase, and (iv) certain
other conditions. See "Introduction," "Terms of the Offer" and "Certain
Conditions of the Offer" in the Offer to Purchase.
3. The Offer is being made for all outstanding Shares.
4. Tendering shareholders will not be obligated to pay brokerage fees
or commissions to the Dealer Managers, the Depositary or the Information
Agent (as defined in the Offer to Purchase) or, except as set forth in
Instruction 6 to the Letter of Transmittal, transfer taxes on the sale of
Shares pursuant to the Offer. However, federal income tax backup
withholding at a rate of 31% may be required unless an exemption is
provided or unless the required taxpayer identification information is
provided. See Instruction 10 of, and "IMPORTANT TAX INFORMATION" in, the
Letter of Transmittal.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Thursday, April 8, 1999, unless extended. See "Terms of
Offer" in the Offer to Purchase.
6. The Board of Directors of the Company has unanimously determined
that, as of the date of the Tender Agreement described in the Offer to
Purchase, the Offer is fair to and in the best interests of the
shareholders of the Company and resolved, [subject to the receipt of
certain shareholder approvals relating to the Offer as described in the
Offer to Purchase], to recommend acceptance of the Offer by the
shareholders of the Company.
7. In all cases, payment for Shares purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates
for, or a Book-Entry Confirmation (as defined under "Procedure for
Tendering Shares -- Book-Entry Transfer" in the Offer to Purchase) with
respect to, such Shares and a Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed with all required
signature guarantees, or in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and all other documents
required by the Letter of Transmittal. See "Procedures for Tendering
Shares" in the Offer to Purchase.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth herein. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified in the
instruction form. An envelope to return your instructions to us is enclosed.
Your instructions should be forwarded to us in ample time to permit us to submit
a tender on your behalf prior to the expiration of the Offer.
THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE AND THE RELATED LETTER OF
TRANSMITTAL AND IS BEING MADE TO ALL HOLDERS OF SHARES.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, Purchaser may,
in its discretion, take such actions as it may deem necessary to make the Offer
in any jurisdiction (including, without limitation, the extension of the Offer).
In those jurisdictions where securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed to be
made on behalf of Purchaser by Goldman, Sachs & Co. as Dealer Managers or one or
more registered brokers or dealers that are licensed under the laws of such
jurisdictions.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING ORDINARY SHARES
OF
NEW DIMENSION SOFTWARE LTD.
BY
BMC SOFTWARE, INC.
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase dated March 11, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer") in connection with the offer by
BMC Software, Inc., a Delaware corporation ("Purchaser"), to purchase all
outstanding ordinary shares, NIS 0.01 par value per share (the "Shares"), of New
Dimension Software Ltd., an Israeli corporation, at a purchase price of $52.50
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer.
This will instruct you to tender to Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
================================================================
NUMBER OF SHARES TO BE TENDERED:
------------------------------------SHARES
Date: , 1999
------------------------------------------
SIGN HERE
----------------------------------------------------------
Signature(s)
----------------------------------------------------------
----------------------------------------------------------
Print or Type Name(s)
----------------------------------------------------------
----------------------------------------------------------
Print or Type Address(es)
----------------------------------------------------------
Area Code and Telephone Number(s)
----------------------------------------------------------
Taxpayer Identification or Social Security Number(s)
================================================================
THIS FORM MUST BE RETURNED TO THE BROKERAGE FIRM
MAINTAINING YOUR ACCOUNT.
3
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER -- Social Security Numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer Identification Numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the type
of number to give the payer.
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF --
------------------------- -------------------------------------
<S> <C> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, any one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of the account or, if
joint funds, either person(1)
4. Custodian account of a minor (Uniform Gift The minor(2)
to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only
contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent person(3)
committee for a designated ward, minor, or
incompetent person
7. The usual revocable savings trust account The grantor-trustee(1)
(grantor is trustee)
(a) So-called trust account that is not a The actual owner(1)
legal or valid trust under State Law
8. Sole proprietorship account The owner(4)
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER OF
- ------------------------------------------------ ------------------------------------------
9. A valid trust, estate, or pension trust The legal entity (Do not furnish the
identifying number of the personal
representative or trustee unless the legal
entity itself is not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name of The partnership
the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of Agriculture The public entity
in the name of a public entity (such as a
State or local government, school
district, or prison) that receives
agricultural program payments
</TABLE>
- ---------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
1
<PAGE> 2
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter your business or
"doing business" name. You may use either your Social Security Number or
Employer Identification Number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (the "IRS") and
apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments by
brokers include the following:
A corporation.
A financial institution.
An organization exempt from tax under section 501(a), or an individual
retirement plan or a custodial account under Section 403(b)(7) if the
account satisfies the requirements of section 401(F)(2).
The United States or any agency or instrumentally thereof.
A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
An international organization or any agency or instrumentality
thereof.
A registered dealer in securities or commodities registered in the
U.S. or a possession of the U.S.
A real estate investment trust.
A common trust fund operated by a bank under section 584(a).
An entity registered at all times under the Investment Company Act of
1940.
A foreign central bank of issue.
A futures commission merchant registered with the Commodity Futures
Trading Commission.
A person registered under the Investment Advisors Act of 1940 who
regularly acts as a broker.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
Payments to nonresident aliens subject to withholding under section
1441.
Payments to partnerships not engaged in a trade or business in the
U.S. and which have at least one nonresident partner.
2
<PAGE> 3
Payments of patronage dividends where the amount received is not paid
in money.
Payments made by certain foreign organizations.
Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if this interest is $600 or more and
is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
Payments described in section 6049(b)(5) to nonresident aliens.
Payments on tax-free covenant bonds under section 1451.
Payments made by certain foreign organizations.
Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, CHECK "EXEMPT" IN PART II OF THE FORM, SIGN AND
DATE THE FORM AND RETURN TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS -- If you fail
to include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is a clear and
convincing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
3
<PAGE> 1
<TABLE>
<S> <C> <C>
Form W-8 | |
(Rev. November 1992) | CERTIFICATE OF FOREIGN STATUS |
Department of the Treasury | |
Internal Revenue Service | |
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
Name of Owner (if joint account, also give joint owner's U.S. taxpayer identification number
name.)(See Specific Instructions.) (if any)
-----------------------------------------------------------------------------------------------------
Permanent address (See Specific Instructions.)(Include apt.
or suite no.)
-----------------------------------------------------------------------------------------------------
City, province or state, postal code, and country
-----------------------------------------------------------------------------------------------------
Current mailing address, if different from permanent address (Include apt. or suite no., or P.O. box
if mail is not delivered to street address.)
-----------------------------------------------------------------------------------------------------
City, town or post office, state, and ZIP code (If foreign address, enter city, province or state,
postal code, and country.)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
PLEASE PRINT OR TYPE
<TABLE>
<S> <C> <C> <C> <C>
List account } Account number Account type Account number Account type
information
here (Optional, see
Specific
Instructions.)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
NOTICE OF CHANGE IN STATUS. -- To notify the payer, mortgage
interest recipient, broker, or barter exchange that you no
longer qualify for exemption, check here.................... } [ ]
IF YOU CHECK THIS BOX, REPORTING WILL BEGIN ON THE
ACCOUNT(S) LISTED.
</TABLE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------
<S> <C>
CERTIFICATION. -- (Check applicable box(es)). Under penalty of
perjury, I certify that:
PLEASE [ ] For INTEREST PAYMENTS, I am not a U.S. citizen or resident
(or I am filing for a foreign corporation, partnership,
estate, or trust).
SIGN [ ] For DIVIDENDS, I am not a U.S. citizen or resident (or I am
filing for a foreign corporation, partnership, estate, or
trust).
HERE [ ] For BROKER TRANSACTIONS or BARTER EXCHANGES, I am an exempt
foreign person as defined in the instructions below.
}
-----------------------------------------------------------------------------------------
Signature Date
- -------------------------------------------------------------------------------------------------------------
</TABLE>
GENERAL INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE
Use Form W-8 or a substitute form containing a substantially similar statement
to tell the payer, mortgage interest recipient, middleman, broker, or barter
exchange that you are a nonresident alien individual, foreign entity, or exempt
foreign person not subject to certain U.S. information return reporting or
backup withholding rules.
CAUTION: Form W-8 does not exempt the payee from the 30% (or lower treaty)
nonresident withholding rates.
NONRESIDENT ALIEN INDIVIDUAL
For income tax purposes, "nonresident alien individual" means an individual who
is neither a U.S. citizen nor resident. Generally, an alien is considered to be
a U.S. resident if:
- - The individual was a lawful permanent resident of the United States at any
time during the calendar year, that is, the alien held an immigrant visa (a
"green card"), or
- - The individual was physically present in the United States on:
(1) at least 31 days during the calendar year, and
(2) 183 days or more during the current year and the 2 preceding calendar
years (counting all the days of physical presence in the current year, one-
third the number of days of presence in the first preceding year, and only
one-sixth of the number of days in the second preceding year).
See Pub. 519, U.S. Tax Guide for Aliens, for more information on resident and
nonresident alien status.
NOTE: If you are a nonresident alien individual married to a U.S. citizen or
resident and have made an election under section 6013(g) or (h), you are treated
as a U.S. resident and may not use Form W-8.
EXEMPT FOREIGN PERSON
For purposes of this form, you are an "exempt foreign person" for a calendar
year in which:
1. You are a nonresident alien individual or a foreign corporation,
partnership, estate, or trust,
2. You are an individual who has not been, and plans not to be, present in
the United States for a total of 183 days or more during the calendar year, and
3. You are neither engaged, nor plan to be engaged during the year, in a U.S.
trade or business that has effectively connected gains from transactions with a
broker or barter exchange.
If you do not meet the requirements of 2 or 3 above, you may instead certify
on Form 1001, Ownership, Exemption, or Reduced Rate Certificate, that your
country has a tax treaty with the United States that exempts your transactions
from U.S. tax.
FILING INSTRUCTIONS
WHEN TO FILE.-- File Form W-8 or substitute form before a payment is made.
Otherwise, the payer may have to withhold and send part of the payment to the
Internal Revenue Service (see Backup Withholding below). This certificate
generally remains in effect for three calendar years. However, the payer may
require you to file a new certificate each time a payment is made to you.
WHERE TO FILE.-- File this form with the payer of the qualifying income who is
the withholding agent (see Withholding Agent on page 2). Keep a copy for your
own records.
BACKUP WITHHOLDING
A U.S. taxpayer identification number or Form W-8 or substitute from must be
given to the payers of certain income. If a taxpayer identification number or
Form W-8 or substitute form is not provided or the wrong taxpayer identification
number is provided, these payers may have to withhold 20% of each payment or
transaction. This is called backup withholding.
NOTE: On January 1, 1993, the backup withholding rate increases from 20% to 31%.
Reportable payments subject to backup withholding rules are:
- - Interest payments under section 6049(a).
- - Dividend payments under sections 6042(a) and 6044.
- - Other payments (i.e., royalties and payments from brokers and barter
exchanges) under sections 6041, 6041A(a), 6045, 6050A, and 6050N.
If backup withholding occurs, an exempt foreign person who is a nonresident
alien individual may get a refund by filing Form 1040NR U.S. Nonresident Alien
Income Tax Return, with the Internal Revenue
(Continued)
- --------------------------------------------------------------------------------
ISA Form W-8 (Rev. 11-92)
STFFEDS125F.1
<PAGE> 2
FORM W-8 (REV. 11-92) PAGE 2
- --------------------------------------------------------------------------------
Service Center, Philadelphia, PA 19255, even if filing the return is not
otherwise required.
U.S. TAXPAYER IDENTIFICATION NUMBER
The Internal Revenue law requires that certain income be reported to the
Internal Revenue Service using a U.S. taxpayer identification number (TIN). This
number can be a social security number assigned to individuals by the Social
Security Administration or an employer identification number assigned to
businesses and other entities by the Internal Revenue Service.
Payments to account holders who are foreign persons (nonresident alien
individuals, foreign corporations, partnerships, estates, or trusts) generally
are not subject to U.S. reporting requirements. Also, foreign persons are not
generally required to have a TIN, nor are they subject to any backup withholding
because they do not furnish a TIN to a payer or broker.
However, foreign persons with income effectively connected with a trade or
business in the United States (income subject to regular (graduated) income
tax), must have a TIN. To apply for a TIN, use Form SS-4, Application for
Employer Identification Number, available from local Internal Revenue Service
offices, or Form SS-5, Application for a Social Security Card, available from
local Social Security Administration offices.
SPECIAL RULES
MORTGAGE INTEREST. -- For purposes of the reporting rules, mortgage interest is
interest paid on a mortgage to a person engaged in a trade or business
originating mortgages in the course of that trade or business. A mortgage
interest recipient is one who receives interest on a mortgage that was acquired
in the course of a trade or business.
Mortgage interest is not subject to backup withholding rules, but is subject
to reporting requirements under section 6050H. Generally, however, the reporting
requirements do not apply if the payer of record is a nonresident alien
individual who pays interest on a mortgage not secured by real property in the
United States. Use Form W-8 or substitute form to notify the mortgage interest
recipient that the payer is a nonresident alien individual.
PORTFOLIO INTEREST. -- Generally, portfolio interest paid to a nonresident alien
individual or foreign partnership, estate, or trust is not subject to backup
withholding rules. However, if interest is paid on portfolio investments to a
beneficial owner that is neither a financial institution nor a member of a
clearing organization, Form W-8 or substitute form is required.
Registered obligations not targeted to foreign markets qualify as portfolio
interest not subject to 30% withholding, but require the filing of Form W-8 or
substitute form. See Instructions to Withholding Agents on this page for
reporting rules.
See Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign
Corporations, for registered obligations targeted to foreign markets and when
Form W-8 or substitute form is not required on these payments.
BEARER OBLIGATIONS. -- The interest form bearer obligations targeted to foreign
markets is treated as portfolio interest and is not subject to 30% withholding.
Form W-8 or substitute form is not required.
DIVIDENDS. -- Any distribution or payment of dividends by a U.S. corporation
sent to a foreign address is subject to the 30% (or lower treaty) withholding
rate, but is not subject to backup withholding. Also, there is no backup
withholding on dividend payments made to a foreign person by a foreign
corporation. However, the 30% withholding (or lower treaty) rate applies to
dividend payments made to a foreign person by a foreign corporation if:
- - 25% or more of the foreign corporation's gross income for the three preceding
taxable years was effectively connected with a U.S. trade or business, and
- - The corporation was not subject to the branch profits tax because of an income
tax treaty (see section 884(e)).
If a foreign corporation makes payments to another foreign corporation, the
recipient must be a qualified resident of its country of residence to benefit
from that country's tax treaty.
BROKER OR BARTER EXCHANGES. -- Income from transactions with a broker or barter
exchanges is subject to reporting rules and backup withholding unless Form W-8
or substitute form is filed to notify the broker or barter exchange that you are
an exempt foreign person as defined on page 1.
SPECIFIC INSTRUCTIONS
NAME OF OWNER. -- If Form W-8 is being filed for portfolio interest, enter the
name of the beneficial owner.
U.S. TAXPAYER IDENTIFICATION NUMBER. -- If you have a U.S. taxpayer
identification number, enter your number in this space (see the discussion
earlier).
PERMANENT ADDRESS. -- Enter your complete address in the country where you
reside permanently for income tax purposes.
<TABLE>
<S> <C>
If you are: Show the
address of:
An individual Your permanent
residence
A partnership Principal office
or corporation
An estate or Permanent residence
trust or principal office
of any fiduciary
</TABLE>
Also show your current mailing address if it differs from your permanent
address.
ACCOUNT INFORMATION (OPTIONAL). -- If you have more than one account (savings,
certificate of deposit, pension, IRA, etc.) with the same payer, list all
account numbers and types on one Form W-8 or substitute form unless your payer
requires you to file a separate certificate for each account.
If you have more than one payer, file a separate Form W-8 with each payer.
SIGNATURE. -- If only one foreign person owns the account(s) listed on this
form, that foreign person should sign the Form W-8.
If each owner of a joint account is a foreign person, each should sign a
separate Form W-8.
NOTICE OF CHANGE IN STATUS. -- If you become a U.S. citizen or resident after
you have filed Form W-8 or substitute form, or you cease to be an exempt foreign
person, you must notify the payer in writing within 30 days of your change in
status.
To notify the payer, you may check the box in the space provided on this
form or use the method prescribed by the payer.
Reporting will then begin on the account(s) listed and backup withholding
may also begin unless you certify to the payer that:
(1) The U.S. taxpayer identification number you have given is correct, and
(2) The Internal Revenue Service has not notified you that you are subject
to backup withholding because you failed to report certain income.
You may use Form W-9, Request for Taxpayer Identification Number and
Certification, to make these certifications.
If an account is no longer active, you do not have to notify a payer of your
change in status unless you also have another account with the same payer that
is still active.
FALSE CERTIFICATE. -- If you file a false certificate when you are not entitled
to the exemption from withholding or reporting, you may be subject to fines
and/or imprisonment under U.S. perjury laws.
INSTRUCTIONS TO WITHHOLDING AGENTS
WITHHOLDING AGENT. -- Generally, the person responsible for payment of the items
discussed above to a nonresident alien individual or foreign entity is the
withholding agent (see Pub. 515).
RETENTION OF STATEMENT. -- Keep Form W-8 or substitute form in your records for
at least four years following the end of the last calendar year during which the
payment is paid or collected.
PORTFOLIO INTEREST. -- Although registered obligations not targeted to foreign
markets are not subject to 30% withholding, you must file Form 1042S. Foreign
Person's U.S. Source Income Subject to Withholding, to report the interest
payment. Both Form 1042S and a copy of Form W-8 or substitute form must be
attached to Form 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
<PAGE> 1
EXHIBIT a(8)
================================================================================
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
March 11, 1999 (the "Offer to Purchase") and the related Letter of Transmittal,
and any amendments or supplements thereto, and is being made to all holders of
Shares. The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction or any administrative or judicial action pursuant thereto. In
those jurisdictions where securities, blue sky or other laws require the Offer
to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of Purchaser by Goldman, Sachs & Co., as dealer managers, or one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING ORDINARY SHARES
OF
NEW DIMENSION SOFTWARE LTD.
AT
$52.50 NET PER SHARE
BY
BMC SOFTWARE, INC.
BMC Software, Inc., a Delaware corporation ("Purchaser"), hereby offers
to purchase all the outstanding ordinary shares, NIS 0.01 par value per share
(the "Shares"), of New Dimension Software Ltd., an Israeli corporation (the
"Company"), at a purchase price of $52.50 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated March 11, 1999 (the "Offer to Purchase"),
and the related Letter of Transmittal (which, together with the Offer to
Purchase and any amendments or supplements thereto, collectively constitute the
"Offer"). See the Offer to Purchase for capitalized terms used but not defined
herein. Following the Offer, the Purchaser intends to effect the Compulsory
Acquisition described below.
-----------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, APRIL 8, 1999, UNLESS THE OFFER IS EXTENDED.
-----------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the Expiration Date (defined below)
a number of Shares which constitutes at least ninety percent (90%) of the Shares
then issued and outstanding and not owned by Purchaser or its subsidiaries
determined in accordance with Section 236 of the Companies' Ordinance (New
Version) 5743-1983 of the State of Israel (the "Companies' Ordinance"), (ii)
satisfaction of certain regulatory conditions, including the expiration or
termination prior to the expiration of the Offer of all waiting periods imposed
by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (iii) certain approvals related to the Offer by the shareholders of
the Company at a Special Meeting as described in the Offer to Purchase, and (iv)
certain other conditions. See Sections 1 and 14 of the Offer to Purchase.
The Offer is being made pursuant to a Share Purchase and Tender
Agreement (the "Tender Agreement") dated as of March 7, 1999, by and between
Purchaser and the Company, which provides for certain agreements between the
Company and Purchaser relating to the Offer. Concurrently with the execution of
the Tender Agreement, Purchaser entered into Shareholder Agreements, each dated
March 7, 1999 (the "Shareholder Agreements"), with Yossie Hollander and with
Roni A. Einav, Dalia Prashker-Katzman and Einav Computer Systems, an Israeli
corporation (each a "Principal Shareholder" and collectively, the "Principal
Shareholders"). Pursuant to the Shareholder Agreements (a) the Principal
Shareholders have agreed to tender into the Offer all of their Shares, which, on
the date of the Tender Agreement, represented an aggregate of 61.0% of the
issued and outstanding Shares, (b) the Principal Shareholders have granted to
Purchaser an irrevocable option to purchase all of such Shares in certain
circumstances, and (c) each Principal Shareholder has granted to Purchaser an
irrevocable proxy to vote such Principal Shareholder's Shares with respect to
matters relating to the Tender Agreement, the Offer or matters inconsistent with
the Offer. The Tender Agreement and the Shareholder Agreements are more fully
described in Section 12 of the Offer to Purchase.
If Purchaser is successful in acquiring in the Offer at least ninety
percent (90%) of the Shares not presently owned by it or its subsidiaries within
four months of the date hereof (the "Initial Period"), Purchaser has agreed in
the Tender Agreement, in accordance with Section 236 of the Companies'
Ordinance, to declare by notice to the remaining shareholders (the "Notice of
Acquisition") that it is unilaterally acquiring (the "Compulsory Acquisition")
the remaining Shares not yet held by it on the same terms as those set forth in
the Offer. The Purchaser has agreed to deliver the Notice of Acquisition at any
time during the two month period following the Initial Period. See Section 1 of
the Offer to Purchase for more details on the Compulsory Acquisition.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT,
AS OF THE DATE OF THE TENDER AGREEMENT, THE OFFER IS FAIR TO AND IN THE BEST
INTERESTS OF THE SHAREHOLDERS OF THE COMPANY AND RESOLVED, SUBJECT TO THE
RECEIPT OF CERTAIN SHAREHOLDER APPROVALS RELATING TO THE OFFER AS DESCRIBED IN
THE OFFER TO PURCHASE, TO RECOMMEND ACCEPTANCE OF THE OFFER BY THE SHAREHOLDERS
OF THE COMPANY.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered prior to the Expiration
Date and not properly withdrawn as, if and when Purchaser gives oral or written
notice to BankBoston N.A., as the Depositary (in such capacity, the
"Depositary"), of Purchaser's acceptance of such Shares for payment. In all
cases, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from
Purchaser and transmitting payment to tendering shareholders whose Shares have
theretofore been accepted for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares (or a confirmation of a
book-entry transfer of Shares into the Depositary's account at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in Section 3 of the Offer to Purchase), (ii) the Letter of Transmittal
(or a manually signed facsimile thereof), properly completed and duly executed
with all required signature guarantees, or in the case of a book-entry transfer,
an Agent's Message (as defined in the Offer to Purchase), and (iii) all other
documents required by the Letter of Transmittal. Under no circumstances will
interest on the Offer Price be paid by the Purchaser, regardless of any
extension of the Offer or delay in making such payment.
The term "Expiration Date" shall mean 12:00 Midnight, New York City
time, on Thursday, April 8, 1999, unless and until Purchaser, in accordance with
the terms of the Offer, shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by Purchaser, shall expire.
Subject to the terms of the Tender Agreement, Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary and by making a public
announcement of such extension. There can be no assurance that Purchaser will
exercise its right to extend the Offer. Purchaser also expressly reserves the
right, subject to applicable laws (including applicable regulations of the
Securities and Exchange Commission promulgated under the Securities Exchange Act
of 1934), and to the terms of the Tender Agreement, at any time or from time to
time, (i) to delay acceptance for payment of or payment for any Shares,
regardless of whether the Shares were theretofore accepted for payment, or to
terminate the Offer and not accept for payment or pay for any Shares not
theretofore accepted for payment or paid for, upon the occurrence of any of the
conditions specified in Section 14 of the Offer to Purchase, by giving oral or
written notice of such delay in payment or termination to the Depositary, and
(ii) to amend the Offer in any respect, by giving oral or written notice to the
Depositary. Any extension, amendment or termination of the Offer, any waiver of
any condition of the Offer, or any delay in payment, will be followed as
promptly as practicable by a public announcement. In the case of an extension,
such announcement must be issued no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date. Without
limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser will have no obligation to publish, advertise or
otherwise communicate any such announcement other than by issuing a press
release to the Dow Jones News Service (or a similar news service) or as
otherwise may be required by law.
Tenders of Shares made pursuant to the Offer are irrevocable, except as
otherwise provided below. Shares tendered pursuant to the Offer may be withdrawn
any time prior to the Expiration Date and, unless theretofore accepted for
payment by Purchaser, may also be withdrawn at any time after May 9, 1999. For a
withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase. Any such notice
of withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder, if different from that of the person who tendered such Shares. If
certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then prior to the release of such certificates,
the tendering shareholder must also submit the serial numbers shown on the
particular certificates evidencing the Shares to be withdrawn, and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution (as
defined in Section 3 of the Offer to Purchase) (except in the case of Shares
tendered for the account of an Eligible Institution). If Shares have been
tendered pursuant to the procedures for book-entry transfer set forth in Section
3 of the Offer to Purchase, the notices of withdrawal must specify the name and
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with such Book-Entry
Transfer Facility's procedures.
All questions as to form and validity (including time of receipt) of
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination shall be final and binding on all parties. No withdrawal of
Shares shall be deemed to have been properly made until all defects and
irregularities have been cured or waived. None of Purchaser, the Dealer
Managers, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failing to give such
notification.
The Company has provided Purchaser with its shareholder list and
security position listings for the purpose of disseminating the Offer to
shareholders. The Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the Company's
shareholder list, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares by Purchaser.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934 is
contained in the Offer to Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Requests for copies of the Offer to Purchase, the Letter of Transmittal
and other tender offer documents may be directed to the Information Agent as set
forth below, and copies will be furnished promptly at the Purchaser's expense.
Questions or requests for assistance may be directed to the Information Agent or
the Dealer Managers. No fees or commissions will be payable to brokers, dealers
or other persons (other than the Dealer Managers, the Depositary and the
Information Agent) in connection with the solicitation of tenders of Shares
pursuant to the Offer.
The Information Agent for the Offer is:
[MacKenzie Logo]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE: (800) 322-2885
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
c(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll-Free)
March 11, 1999
================================================================================
<PAGE> 1
BMC Software to Acquire New Dimension Software
HOUSTON, TX - (March 8, 1999) - BMC Software (Nasdaq: BMCS), the leader in
providing Application Service Assurance (ASA(TM)) solutions that improve the
availability, performance and recovery of business-critical applications,
announced today that it has signed a Share Purchase and Tender Agreement to
acquire New Dimension Software, Inc. (Nasdaq:DDDDF) for $52.50 per share. New
Dimension Software is an industry leader in enterprise management, specializing
in job scheduling, managing computer generated output and documents, and
security and user administration. The acquisition complements BMC Software's
pending merger with Boole & Babbage, Inc., which is expected to be completed on
March 30. Boole & Babbage is currently the exclusive European distributor of
New Dimension Software's products.
As a result of these strategic acquisitions, BMC Software accelerates the
delivery of solutions that significantly reduce the complexity of managing large
enterprises through innovative products, an extensive worldwide distribution
network and superior technical expertise. BMC Software will gain a significant
presence in Israel, home of New Dimension Software's worldwide headquarters and
a major center for software development and technical expertise. BMC Software
intends to maintain and expand New Dimension Software's operations in Israel.
"The acquisition of New Dimension Software is a perfect fit for BMC Software's
global strategy of providing Application Service Solutions from the back office
to the front office and beyond. This acquisition, along with our merger with
Boole & Babbage, positions BMC Software as a top-tier player in the enterprise
management industry focused on rapidly delivering value to a business, said Max
Watson, chairman, president and CEO of BMC Software. "Today, there is already a
significant degree of product integration between the companies which is good
for our customers who gain focused, best-of-breed solutions that address their
critical issues. This combination establishes a new center for technology
building on strong skills and resources in Israel, which is renowned for its
high degree of technical skills and superior technology workforce. We will be
joining IBM, Intel, Microsoft and other leading high technology firms who have
established significant operations in Israel."
"This transaction is a win-win for all parties: New Dimension Software, BMC
Software, our customers and the industry as a whole. The unique combination of
our companies' product sets, coupled with our existing distribution arrangement
with Boole & Babbage, will enable the new BMC Software to provide
state-of-the-art solutions to manage the entire enterprise," said Dan Barnea,
CEO of New Dimension Software. "Our employees are looking forward to becoming
part of the BMC Software family, one that has a global reputation for excellence
and investment in the companies it acquires."
The transaction is a cash purchase valued at more than $650 million. BMC
Software anticipates an in-process research and development charge of up to 30
percent of the purchase price, with amortization of identifiable intangible
assets over four to five years. Because New Dimension Software is a non-U.S.
corporation, BMC Software expects to treat the acquisition as an asset purchase
for federal income tax purposes, which significantly improves anticipated
earnings and cash flow. BMC Software will effect the acquisition through a cash
tender offer for all outstanding New Dimension Software shares. BMC Software has
entered into option agreements with two holders of more than 60 percent of the
outstanding shares. The agreements give BMC Software the right to purchase these
shares at the tender offer price for a stipulated period of time and require the
shareholders to tender their shares to BMC Software.
"We are paying cash because we believe our stock is greatly undervalued and
prefer to use cash as our acquisition currency," said Bill Austin, senior vice
president and chief financial officer of BMC Software. "We will also avoid the
significant delays associated with stock-based pooling transactions. We hope to
close this transaction within the next 45 days, so that we begin our fiscal 2000
with both Boole & Babbage and New Dimension Software as part of BMC Software's
operations."
When the New Dimension Software and Boole & Babbage transactions are completed,
BMC Software will employ approximately 5,000 people in 26 countries. Trailing
annual revenues of the combined companies will be approximately $1.4 billion.
<PAGE> 2
BMC Software's ASA product lines ensure that key business applications are
available, perform optimally and can be rapidly recovered in the event of an
outage. This enhances the service delivered to the business by the information
technology (IT) organization and significantly improves business productivity
and return on investment in IT assets.
The company's combined product line will provide customers the ability to manage
all components of the enterprise which affect application availability and the
ability to solve unique application availability problems. Customers will
realize these benefits:
o Across all major platforms (OS/390, UNIX, NT, Internet)
o Across database, middleware, mail and messaging, custom and
packaged applications, Internet and Web servers
o Across all major functional areas: event management,
performance analysis, capacity planning, backup and recovery,
job scheduling, output management and security administration
COMPANY BACKGROUNDS
BMC SOFTWARE, INC. is the leader in delivering Application Service Assurance
(ASA) solutions - enterprise-level software that supports and improves the
availability, performance and recovery of critical applications and data in
complex computing environments. BMC Software is the world's 12th largest
independent software vendor and an S&P 500 company, with calendar 1998 revenues
exceeding $955 million. The company is headquartered in Houston, Texas, with
offices worldwide. For more information, please call 800 841-2031 or 713
918-8800 or visit BMC Software on the Web at www.bmc.com.
NEW DIMENSION SOFTWARE is a premier developer of systems management software for
complex distributed systems. With the Company's tightly integrated family of
products, all aspects of enterprise production, output and security can be
effectively managed. By managing the flow of information between applications,
systems, end users and administrators, New Dimension Software products allow
organizations to achieve their business goals. Founded in 1983, the Company is
based in Tel Aviv, with its North American subsidiary's headquarters in Irvine,
Calif. and regional offices throughout the United States, Canada, Mexico and
Australia. The Company's products are currently licensed to over 2,350 customers
in more than 40 countries. For more information, please visit New Dimension
Software on the Web at www.ndsoft.com.
This news release contains both historical information and forward-looking
information. For example, statements in this discussion regarding BMC Software's
future financial and operating results, the development of and anticipated
markets for BMC Software's products, BMC Software's operating strategies,
anticipated acquisition benefits and other statements that are not statements of
historical fact are forward looking statements. Actual results could differ
materially from any expectation, estimate or projection conveyed by these
statements and there can be no assurance that any such expectation, estimate or
projection will be met. Numerous important factors, risks and uncertainties
affect BMC Software's operating results and could cause actual results to differ
from the results implied by these or any other forward looking statements. These
factors include, but are not limited to, the following: 1) BMC Software's
revenues and earnings are subject to a number of factors, including the
significant percentage of quarterly sales typically closed at the end of each
quarter, that make estimation of operating results prior to the end of a quarter
extremely uncertain; 2) competition for BMC Software's products is increasing
for both the open systems and the mainframe database utility products; 3)
international results have been volatile over the last two years; 4) BMC
Software continues to increasingly depend on large enterprise license
transactions as an integral part of its core mainframe and distributed systems
businesses; 5) the uncertainties of whether new software products and product
strategies will be successful; 6) the high degree of difficulty of integrating
different software products and technologies and the general risks associated
with mergers of high technology companies, including the potential loss of key
personnel and cultural conflicts; and 7) the additional risks and important
factors described in BMC Software's, New Dimension Software's and Boole &
Babbage's Annual Report to Stockholders on Forms 10-K and 10-Q and other filings
with the SEC.
<PAGE> 3
NOTE TO INTERESTED PARTIES: BMC Software has scheduled a conference call for
8:00 a.m. CST today to discuss the acquisition. Interested parties may
participate by calling (847) 413-2900. You may also access the conference call
over the Internet through Vcall at www.vcall.com. To listen to the live call,
please go the web site at least fifteen minutes early to register, download, and
install any necessary audio software.
EDITORS NOTE: BMC Software will be conducting additional conference calls for
industry analysts and members of the media. Please see separate media alert for
details.
BMC Software and the BMC Software logo are registered trademarks or trademarks
of BMC Software, Inc. in the USA and in other select countries. New Dimension
and the New Dimension logo are registered trademarks or trademarks of New
Dimension, Inc. in the USA and in other select countries. Boole & Babbage and
the Boole & Babbage logo are registered trademarks or trademarks of Boole &
Babbage, Inc. in the USA and in other select countries. (R) and (TM) indicate
USA registration or USA trademark. Other logos and product/trade names mentioned
are registered trademarks or trademarks of their respective companies. BMC
Software, New Dimension Software and Boole & Babbage are Equal Opportunity
Employers.
MEDIA RELATIONS CONTACTS:
BMC Software: Blanc & Otus: (For BMC Software)
Pam Austin Jim McManus
(713) 663-4812 or (617) 834-7180 (617) 225-9990
[email protected] [email protected]
INVESTOR RELATIONS CONTACTS:
BMC Software: New Dimension Software:
John Cox Laurie Weller Itzik Zion
(713) 918-4291 (714) 757-4300 x392 972-3-645-1188
[email protected] [email protected] [email protected]
Copyright (C) 1999 BMC Software, Inc. All rights reserved.
Legal and Privacy Worldwide Locations
<PAGE> 1
FOR IMMEDIATE RELEASE
NEW DIMENSION SOFTWARE ANNOUNCES RECORD REVENUES AND EARNINGS FOR THE
FOURTH QUARTER AND YEAR 1998
Revenues for the Quarter Increased by 62.9 Percent; Net Income Increased by
100.4 Percent TEL AVIV, Israel, February 3, 1999 -- New Dimension Software, Ltd.
(NASDAQ: DDDDF) today announced record revenues and net income for the fourth
quarter and the year ended December 31, 1998. Total revenues for the quarter
ended December 31, 1998 were $30,012,000, a 62.9 percent increase as compared
to $18,425,000 in the same period last year. Net income for the quarter
increased by 100.4 percent to $6,833,000 (or $0.53 per diluted share), as
compared to net income of $3,410,000 (or $0.27 per diluted share) for the same
period last year.
Total revenues for the year ended December 31, 1998 were $93,591,000, a 44.1
percent increase as compared to $64,969,000 in 1997. Net income for the year
ended December 31, 1998 increased by 87.2 percent to $20,530,000 (or $1.59 per
diluted share), as compared to net income of $10,966,000 (or $0.- 89 per
diluted share) for the same period last year.
On a geographic basis, revenues for the fourth quarter increased by 101.4
percent in North America, by 21.7 percent in Europe, and by 17.2 percent in the
rest of the world.
Revenues derived from product sales reached record levels during the fourth
quarter, growing by 80.8 percent as compared to the same period last year. The
revenues from sales of client/server products as a percentage of total product
sales were 65 percent in the fourth quarter.
Maintenance revenues also reached record levels during the fourth quarter, and
grew by 27.2 percent as compared to the same period last year.
"We are very pleased with the performance of the Company during the fourth
quarter and throughout 1998," said Dan Barnea, the Company's CEO. "During the
quarter, we signed seven contracts valued at more than $1 million. We are
pleased to see that a growing number of new and existing customers are signing
large, long-term contracts with us, which we believe reflects a strong
commitment from our customers to the technology and to the Company. We also
believe that long-term contracts provide us with a strategic advantage in these
accounts, enhancing our opportunity for future product sales." "We are very
pleased with the sales and market acceptance of CONTROL-SA(TM), which we
regard as among the year's most important achievements," Mr. Barnea said.
"During the fourth quarter, CONTROL-SA revenues increased by 1,701 percent over
the same period in 1997, and reached $4,302,000. The number of CONTROL-SA
customers has more than doubled this year. We expect demand for this important
product line to accelerate in 1999, and we are focusing significant development
and marketing resources on CONTROL-SA to take advantage of this market
opportunity."
Mr. Barnea continued, "We continue to see strong demand for client/server
products across all three major product lines. We believe this trend will
continue into 1999 as well, fueled by the growing number of organizations
adopting client/server production applications to address year 2000 concerns.
With all major product lines performing on UNIX, Windows NT and many additional
platforms, we believe we are well positioned for this market trend."
"On a geographic basis, the Company continues to be led by the success of the
North American organization," he continued. "We attribute the success of this
organization to the stability and experience of the Company's North American
sales force." Mr. Barnea added, "In other regions of the world, we are pleased
to note the success of our new subsidiary company in Mexico, which opened in
April 1998. During the fourth quarter, this newly formed organization signed the
Company's two largest contracts to date from Latin America, together totaling
$2,750,000. Revenues from Mexico reached record levels during 1998."
"A major achievement of 1998 has been the strengthening of our strategic
relationships with other vendors," he continued. "We are very pleased with the
results of our Alliance Partner Program, which has expanded our reach into
renowned organizations such as IBM, SAP, Oracle and others with which the
Company has formal joint marketing and technology initiatives."
Mr. Barnea said, "As we enter 1999, the Company is embarking on a number of
strategic technology initiatives to advance the product line, focusing on the
Internet and its increasing importance in the enterprise. We are currently in
the final Beta testing stages of three new Internet-based products:
CONTROL-M(R)/Web ACCESS(TM), CONTROL-SA/Workflow(TM) and
CONTROL-SA/Passport(TM). CONTROL-M/Web Access is a new option that allows remote
access to CONTROL-M using any standard Web browser. CONTROL-SA/Workflow
automates the resource-intensive authorization process for new employees
requiring access to internal computing resources, or for existing employees who
require
<PAGE> 2
changes to their access rights. CONTROL-SA/PassPort allows end users to issue
single change requests using a Web browser to change and synchronize all of
their passwords across the enterprise. We are very enthusiastic about the
prospect of adding these new products to our product line and about the many
other technology initiatives underway. We will continue to focus resources on
the development of strategic tools for the Internet and other key enterprise
technologies."
FOR MORE INFORMATION
For more information on New Dimension Software in North America, please contact
the sales department at (800) 347-4694. For inquiries outside of North America,
contact the Company's headquarters in Tel Aviv at 972-3-645-1111. Inquiries
can also be directed to the Company's home page at www.ndsoft.com.
NEW DIMENSION SOFTWARE
New Dimension Software is a premier developer of systems management software for
complex distributed systems. With the Company's tightly integrated family of
products, all aspects of enterprise production, output and security can be
effectively managed. By managing the flow of information between applications,
systems, end users and administrators, New Dimension Software products allow
organizations to achieve their business goals. Founded in 1983, the Company is
based in Tel Aviv, with its North American subsidiary's headquarters in Irvine,
Calif. and regional offices throughout the United States, Canada, Mexico and
Australia. The Company's products are currently licensed to over 2,350
customers in more than 40 countries.
Certain statements made herein that are not historical, including statements
using the terms "estimate," "intend," expect," "believe," and similar
expressions, are forward-looking statements within the meaning of the Private
Securities Reform Act of 1995. Such forward-looking statements involve known
and unknown risks and uncertainties that may cause the actual results,
performance and achievements of the Company to differ materially from those
implied by such forward-looking statements, including risks associated with
carrying out strategic relationships (including termination of the
relationship); changes in business conditions and growth trends affecting the
Company's products and markets; timing of development, announcement and
introduction of new products by the Company and its competitors, and the market
demand for such products; continuing availability of key components and
technologies; changes in consumer and business purchasing patterns, and other
factors listed in reports filed by the Company with the Securities and Exchange
Commission from time to time.
-end-
CONTROL-M is a registered trademark, and CONTROL-M/Web Access is a trademark of
New Dimension Software, Ltd. CONTROL-SA, CONTROL-SA/Workflow and
CONTROL-SA/PassPort are trademarks of EagleEye Control Software, Ltd. New
Dimension Software, Ltd. recognizes all other companies' trademarks.
CONTACTS:
- ---------
North America: Israel:
Laurie Weller Isaac Zion
949.757.4300 011.972.3.645.1188
<PAGE> 1
EXHIBIT (b)(1)
[CHASE LOGO]
BMC Software, Inc.
Senior Credit Facility
Commitment Letter
March 8, 1999
BMC Software, Inc.
2101 CityWest Blvd.
Houston, Texas 77042
Attention: Michael Shryock
You (the "Borrower") have requested that Chase Securities Inc. ("CSI")
agree to structure, arrange and syndicate a senior revolving credit facility in
an aggregate amount of up to $500,000,000 (the "Facility"), and that Chase Bank
of Texas, National Association ("Chase"), commit to provide the entire
principal amount of the Facility and to serve as administrative agent for the
Facility.
CSI is pleased to advise you that it is willing to act as exclusive
advisor, lead arranger, and book manager for the Facility.
Furthermore, Chase is pleased to advise you of (a) its commitment to
provide the entire amount of the Facility upon the terms and subject to the
conditions set forth or referred to in this commitment letter (the "Commitment
Letter") and in the Summary of Terms and Conditions attached hereto as Exhibit
A (the "Term Sheet").
It is agreed that Chase will act as the sole and exclusive Administrative
Agent, and that CSI will act as the sole and exclusive advisor, lead arranger,
and book manager (in such capacity, the "Arranger"), for the Facility, and each
will, in such capacities, perform the duties and exercise the authority
customarily performed and exercised by it in such roles. You agree that no
other agents, co-agents or arrangers will be appointed, no other titles will be
awarded and no compensation (other than that expressly contemplated by the Term
Sheet and the Fee Letter referred to below) will be paid in connection with the
Facility unless you and we shall so agree.
We intend to syndicate the Facility to a group of financial institutions
(together with Chase, the "Lenders") identified by us in consultation with you.
CSI intends to commence syndication efforts promptly upon the execution of this
Commitment Letter, and you agree actively to assist CSI in completing a
syndication satisfactory to it. Such assistance shall include (a) your using
commercially reasonable efforts to ensure that the syndication efforts benefit
materially from your existing lending relationships, (b) direct contact between
senior management and advisors of the Borrower and the proposed Lenders, (c)
assistance in the preparation of a Confidential Information Memorandum and
other marketing materials to be used in connection with the syndication and (d)
the hosting, with CSI, of one or more meetings of prospective Lenders.
As the Arranger, CSI will manage all aspects of the syndication, including
decisions as to the selection of institutions to be approached and when they
will be approached, when their commitments will be accepted, which institutions
will participate, the allocations of the commitments among the Lenders and the
amount and distribution of fees among the Lenders. In acting as the Arranger,
CSI will have no responsibility other than to arrange the syndication. To
assist CSI in its syndication efforts, you agree
<PAGE> 2
BMC Software, Inc.
March 5, 1999
Page 2
promptly to prepare and provide to CSI and Chase all information with respect
to the Borrower and the transactions contemplated hereby, including all
financial information and projections (the "Projections"), as we may reasonably
request in connection with the arrangement and syndication of the Facility. You
hereby represent and covenant that (a) all information other than the
Projections (the "Information") that has been or will be made available to
Chase or CSI by you or any of your representatives is or will be, when
furnished, complete and correct in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which
such statements are made and (b) the Projections that have been or will be made
available to Chase or CSI by you or any of your representatives have been or
will be prepared in good faith based upon reasonable assumptions. You
understand that in arranging and syndicating the Facility we may use and rely
on the Information and Projections without independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's agreement to
perform the services described herein, you agree to pay to Chase the
nonrefundable fees in the Fee Letter dated the date hereof and delivered
herewith (the "Fee Letter").
Chase and CSI shall be entitled, after consultation with you and with your
consent, such consent not to be unreasonably withheld, to change the structure,
terms, amount or pricing of the Facility if the syndication has not been
completed and if Chase and CSI determine that such changes are advisable in
order to ensure a successful syndication of the Facility. Chase's commitment
hereunder is subject to the agreements in this paragraph.
Chase's commitment hereunder and CSI's agreement to perform the services
described herein are subject to (a) there not occurring or becoming known to us
any material adverse condition or material adverse change in or affecting the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its subsidiaries, taken as a whole, (b) our completion of
and satisfaction in all respects with a due diligence investigation of the
Borrower and the acquisition candidate contemplated with this Facility, (c) our
not becoming aware after the date hereof of any information or other matter
affecting the Borrower or the transactions contemplated hereby which is
inconsistent in a material and adverse manner with any such information or other
matter disclosed to us prior to the date hereof, (d) there not having occurred a
material disruption of or material adverse change in financial, banking or
capital market conditions that, in our judgment, could materially impair the
syndication of the Facility, (e) our satisfaction that prior to and during the
syndication of the Facility there shall be no competing offering, placement or
arrangement of any debt securities or bank financing by or on behalf of the
Borrower or any affiliate thereof, (f) the negotiation, execution and delivery
on or before May 7, 1999 of definitive documentation with respect to the
Facility satisfactory to Chase and its counsel and (h) the other conditions set
forth or referred to in the Term Sheet. The terms and conditions of Chase's
commitment hereunder and of the Facility are not limited to those set forth
herein and in the Term Sheet. Those matters that are not covered by the
provisions hereof and of the Term Sheet are subject to the approval and
agreement of Chase, CSI and the Borrower.
You agree to indemnify and hold harmless Chase, CSI, the other Lenders,
their respective affiliates and their respective officers, directors, employees,
advisors, and agents (each, an "indemnified person") from and against any and
all losses, claims, damages and liabilities to which any such indemnified person
may become subject arising out of or in connection with this Commitment Letter,
the Facility, the use of the proceeds thereof or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any indemnified person is a party thereto, and to
reimburse each indemnified person upon demand for any legal or other expenses
incurred in connection with investigating or defending any of the foregoing,
provided that the foregoing indemnity will not, as to any indemnified person,
apply to losses, claims, damages, liabilities or related expenses to the extent
they arise from the willful misconduct, unlawful conduct or gross negligence of
such indemnified person. YOU AGREE THAT THE INDEMNITY CONTAINED IN THE PRECEDING
SENTENCE
2
<PAGE> 3
BMC Software, Inc.
March 5, 1999
Page 3
EXTENDS TO AND IS INTENDED TO COVER LOSSES AND RELATED EXPENSES ARISING OUT OF
THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF ANY INDEMNIFIED PERSON. You
also agree to reimburse Chase, CSI and their affiliates on demand for all
out-of-pocket expenses (including syndication expenses, travel expenses, and
reasonable fees, charges and disbursements of counsel) incurred in connection
with the Facility and any related documentation (including this Commitment
Letter, the Term Sheet, the Fee Letter and the definitive financing
documentation) or the administration, amendment, modification or waiver
thereof. No indemnified person shall be liable for any damages arising from the
use by others of Information or other materials obtained through electronic,
telecommunications or other information transmission systems or for any
special, indirect, consequential or punitive damages in connection with the
Facilities.
This Commitment Letter shall not be assignable by you without the prior
written consent of Chase and CSI (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. This Commitment
Letter may not be amended or waived except by an instrument in writing signed by
you, Chase and CSI. This Commitment Letter may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Commitment Letter by facsimile transmission shall be effective as
delivery of manually executed counterpart hereof. This Commitment Letter and the
Fee Letter are the only agreements that have been entered into among us with
respect to the Facility and set forth the entire understanding of the parties
with respect thereto. This Commitment Letter shall be governed by, and construed
in accordance with, the laws of the State of Texas.
This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter, the Term Sheet or the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, to any
other person except (a) to your officers, agents and advisors who are directly
involved in the consideration of this matter or (b) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law (in which
case you agree to inform us promptly thereof), provided, that the foregoing
restrictions shall cease to apply (except in respect of the Fee Letter and its
terms and substance) after this Commitment Letter has been accepted by you.
You acknowledge that CSI and Chase may be providing debt financing,
equity capital or other services (including financial advisory services) to
other companies in respect of which you may have conflicting interests regarding
the transactions described herein and otherwise. Neither CSI nor Chase will use
confidential information obtained from you by virtue of the transactions
contemplated by this letter or their other relationships with you in connection
with the performance by CSI or Chase of services for other companies, and
neither CSI nor Chase will furnish any such information to other companies. You
also acknowledge that CSI and Chase have no obligation to use in connection with
the transactions contemplated by this letter, or to furnish to you, confidential
information obtained from other companies.
The reimbursement, indemnification and confidentiality provisions
contained herein and in the Fee Letter shall remain in full force and effect
regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Commitment Letter or
Chase's commitment hereunder.
THIS COMMITMENT LETTER, THE ATTACHED TERM SHEET, THE FEE LETTER AND ALL
EXHIBITS, SCHEDULES AND OTHER ATTACHMENTS HERETO AND THERETO CONSTITUTE A "LOAN
AGREEMENT" FOR PURPOSES OF SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE
AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
<PAGE> 4
BMC Software, Inc.
March 5, 1999
Page 4
If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet and the Fee Letter by
returning to us executed counterparts hereof and of the Fee Letter not later
than 5:00 p.m., Central Standard Time, on March 10, 1999. Chase's commitment and
CSI's agreements herein will expire at such time in the event Chase has not
received such executed counterparts in accordance with the immediately preceding
sentence.
Chase and CSI are pleased to have been given the opportunity to assist you
in connection with this important financing.
Very truly yours,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ MICHAEL A. CERDA
------------------------
Name: Michael A. Cerda
Title: Vice President
CHASE SECURITIES INC.
By: /s/ GREGORY M. SPIER
------------------------
Name: Gregory M. Spier
Title: Managing Director
Accepted and agreed to as of
the date first written above by:
BMC SOFTWARE, INC.
By: /s/ STEPHEN SOLCHER
---------------------
Name: Stephen Solcher
Title: Treasurer
<PAGE> 5
EXHIBIT A
MARCH 8, 1999
SUMMARY OF TERMS AND CONDITIONS
Borrower: BMC Software, Inc.
Facilities: Up to $500,000,000; 364-Day Revolving Credit Facility,
with one year term out option. Facility to include a
Competitive Bid Option for the Borrower to request
Competitive Bids. Four (4) days advance notice to
Agent required via telephone with written
confirmation. Typical Competitive Bid procedures shall
apply.
Maturity: 364 days from Closing. Additionally, at the option of
the Borrower, the ability to term out the outstandings
under the revolver at maturity, payable within one
year from the date of the term out request.
Minimum Initial
Commitment Per
Institution: $200,000,000 for each Primary Institution
Required Lenders: 51% of Commitments
Commitment Date: March 9, 1999
Closing Date: Closing and Funding to occur on or before April 7,
1999.
Purpose: For general corporate purposes including working
capital, capital expenditures and acquisitions.
Interest Rate: Performance Pricing tied to a Funded Debt to EBITDA
ratio.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
Funded Debt/EBITDA LIBOR Margin* Facility Fee**
- -----------------------------------------------------------
<S> <C> <C>
>2.25X 92.5 b.p.s. 20.0 b.p.s.
- -----------------------------------------------------------
>1.50X 72.5 b.p.s. 15.0 b.p.s.
- -----------------------------------------------------------
>0.75X 62.5 b.p.s. 12.5 b.p.s.
- -----------------------------------------------------------
<0.75X 52.5 b.p.s. 10.0 b.p.s.
-
- -----------------------------------------------------------
</TABLE>
* If the Borrower elects the one year term option, the LIBOR Margin will
Increase by 12.5 bps across all grid points. Additionally, in anticipation of
receiving a rating from both S&P and Moody's, a ratings grid will be
incorporated into the documentation reflecting drawn pricing of 50 bps for a
BBB+/Baa1 senior, unsecured debt rating. The other grid points to be determined.
** The Facility Fee will be paid on the commitment amount regardless of usage.
<PAGE> 6
Underwriting Fee: An underwriting fee as set forth in the fee letter
on allocated underwritten commitment. Payable
on the funding date of the facility, to be reduced by
amount of fees necessary for secondary syndication.
Facility Fee: A facility fee shall be paid to each Lender on the
basis of such Lenders allocated share of the
Commitments (both drawn and undrawn portion) in the
amount of applicable Facility Fee (as shown on the
table for same).
Agent Titles: To be determined on 3/10/99.
Financial Covenants: o The Total funded Debt to EBITDA shall not exceed 2.5X
EBITDA based upon a rolling four quarter basis and
including historical EBITDA of the acquired companies.
o Borrower and its Subsidiaries shall at all times
maintain ownership (free and clear of all encumbrances)
of at least $300,000,000 in cash and/or marketable
securities.
Documentation: The Credit Documentation shall contain representations,
warranties, covenants and events of default customary
for financings of this type and other terms deemed
appropriate by the Lenders, including, without
limitation:
Representations and Warranties: Financial statements;
no material adverse change; corporate existence;
compliance with law; corporate power and authority;
enforceability of Credit Documentation; no conflict
with law or contractual obligations; no material
litigation; no default; ownership of property;
intellectual property; taxes; Federal Reserve
regulations: ERISA; Investment Company Act; Year 2000
matters; accuracy of disclosure.
Affirmative Covenants: Delivery of financial
statements, reports accountants' letters, projections,
officers' certificates and other information reasonably
requested by the Lenders; continuation of business and
maintenance of existence and material rights and
privileges; compliance with laws and material
contractual obligations; maintenance of property and
insurance; maintenance of books and records; right of
the Lenders to inspect property and books and records;
and notices of defaults, litigation and other material
events.
2
<PAGE> 7
Negative Covenants: Limitations on: liens; mergers,
consolidations, sales of assets; transactions with
affiliates; sale and leasebacks; and changes in lines of
business.
Events of Default: Nonpayment of principal when due;
nonpayment of interest, fees or other; material
inaccuracy of representations and warranties; violation
of covenants (subject, in the case of certain
affirmative covenants, to a grace period to be agreed
upon); cross-default; bankruptcy events; certain ERISA
events; material judgments; and a change of control (the
definition of which is to be agreed).
Conditions: to be mutually agreed upon between
Administrative Agent and Borrower.
Syndication Sell-Down
Strategy: Every dollar raised during the syndication process will
reduce the Primary Lender's positions until each Primary
Lender's position reaches $50,000,000. No Primary
Lender's position will be reduced below $50,000,000
until every Primary Lender's position is reduced to
$50,000,000.
Indemnification: The Administrative Agent, the Arranger, the Agents and
the Lenders (and their affiliates and their respective
officers, directors, employees, advisors and agents)
will have no liability for, and will be indemnified and
held harmless against, any loss, liability, cost or
expense incurred in respect of the financing
contemplated hereby or the use or the proposed use of
proceeds thereof (except to the extent resulting from
the gross negligence or willful misconduct of the
indemnified party).
Governing Law
and Forum: State of Texas.
3
<PAGE> 8
March 9, 1999
BMC Software, Inc.
2101 Citywest Blvd.
Houston, TX 77042
Attention: Mike Shryock
Re: $500,000,000 Facility
Ladies and Gentlemen:
NationsBank, N.A. ("NationsBank") is pleased to offer its commitment to lend up
to $500,000,000 of the Facility, upon and subject to the terms and conditions of
this letter and the Summary of Terms and Conditions attached hereto (the
"Summary of Terms"). NationsBanc Montgomery Securities LLC ("NMS") is pleased to
advise you of its willingness, as Lead Arranger and Book Manager for the
Facility, to use its best efforts to form a syndicate of financial institutions
(the "Lenders") reasonably acceptable to you for the Facility.
The commitment of NationsBank hereunder and the agreement of NMS to provide the
services described herein are subject to the satisfaction of each of the
following conditions precedent in a manner acceptable to us in our sole
discretion: (a) each of the terms and conditions set forth herein and in the
Summary of Terms; (b) the completion of all due diligence with respect to the
Borrower and its subsidiaries in scope and determination satisfactory to us in
our sole discretion; (c) the negotiation, execution and delivery of definitive
documentation for the Facility consistent with the Summary of Terms and
otherwise satisfactory to us; (d) since the date hereof, no material adverse
change in or material disruption of conditions in the financial, banking or
capital markets which we, in our sole discretion, deem material in connection
with the syndication of the Facility shall have occurred and be continuing; (e)
no change, occurrence or development that could, in our opinion, have a material
adverse effect on the business, assets, liabilities (actual or contingent),
operations, condition (financial or otherwise) or prospects of the Borrower and
its subsidiaries taken as a whole shall have occurred or become known to us; and
(f) our not becoming aware after the date hereof of any information or other
matter which in our judgment is inconsistent in a material and adverse manner
with any information or other matter disclosed to us prior to the date hereof.
The terms of this letter, the Summary of Terms and the fee letter among you and
us (the "Fee Letter") are confidential and, except for disclosure on a
confidential basis to your accountants, attorneys and other professional
advisors retained by you in connection with the Facility or as may be
required by law, may not be disclosed in whole or in part to any other person
or entity without our prior written consent. We hereby consent to your
disclosure of a copy of this letter and the Summary of Terms (but not the Fee
Letter), provided that any information relating to pricing, fees and expenses
is omitted.
This letter and the Fee Letter shall be governed by laws of the State of Texas.
This offer will expire at 5:00 p.m. central time on March 12, 1999.
<PAGE> 9
BMC Software, Inc.
March 9, 1999
Page 2
We are pleased to have the opportunity to work with you in connection with this
important financing.
Very truly yours,
NATIONSBANK, N.A.
By: /s/ DAN KILLIAN
----------------------------------
Title: Vice President
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ JOSEPH SIEGEL
----------------------------------
Title: Managing Director
Accepted and Agreed to
as of March 10, 1999:
BMC SOFTWARE, INC.
By: /s/ STEPHEN SOLCHER
----------------------------------
Title: Treasurer
<PAGE> 10
Confidential BMC Software, Inc.
- --------------------------------------------------------------------------------
SUMMARY OF TERMS AND CONDITIONS
BMC SOFTWARE, INC.
$500,000,000 FACILITY
BORROWER: BMC Software, Inc., (the "Borrower").
AGENTS, LEAD ARRANGERS
AND BOOK MANAGERS: Financial institutions reasonably acceptable to the
Borrower, NationsBank and NMS, to be determined on March
10, 1999.
FACILITY: An aggregate principal amount of up to $500,000,000 will
be available upon the terms and conditions hereinafter
set forth:
Revolving Credit Facility: $500 million 364 day
revolving credit facility (the "Facility"). Facility to
include a Competitive Bid Option for the Borrower to
request Competitive Bids. Four (4) days advance notice
to Agent required via telephone with written
confirmation. Typical competitive Bid procedures shall
apply.
PURPOSE: The proceeds of the Facility shall be used for general
corporate purposes including for working capital,
capital expenditures, and other lawful corporate
purposes and acquisitions.
CLOSING: The execution of definitive loan documentation and
funding by NationsBank, to occur on or before April 7,
1999 ("Closing").
INTEREST RATES: As set forth in Addendum I.
MATURITY: The Revolving Facility shall terminate and all amounts
outstanding thereunder shall be due and payable 364 days
from Closing. Provided that no event of default under
the Facility or incipient default has occurred and is
then continuing, the outstanding principal amount of
loans under the Revolving Facility on such maturity date
may, at the Borrower's election, be converted to a term
loan which will be repayable in a single payment one (1)
year from such maturity date.
CONDITIONS PRE-
CEDENT TO CLOSING: The Closing (and the initial funding) of the Facility
will be subject to satisfaction of the conditions
precedent to be mutually agreed upon by the Borrower,
Agents and the Lenders.
DOCUMENTATION: The Credit Documentation shall contain representations
warranties, covenants and events of default customary
for financings of this type and other terms deemed
appropriate by the Lenders, to be mutually agreed upon
by the Borrower, Agents and the Lenders.
REPRESENTATIONS
AND WARRANTIES: Usual and customary for transactions of this type, to
include without limitation: correctness of financial
statements; no material adverse change; corporate
existence and status; corporate power and authority;
enforceability of Credit Documentation; compliance with
law or contractual obligations; no material litigation;
no default; ownership of property; intellectual
property; no required governmental or third party
approvals; use of proceeds/compliance with margin
regulations; status under Investment Company Act; ERISA
matters; environmental
- --------------------------------------------------------------------------------
[BANK OF AMERICA LOGO] Page 1 March 9, 1999
<PAGE> 11
Confidential BMC Software, Inc.
- --------------------------------------------------------------------------------
matters; payment of taxes; accuracy of disclosure; and
Year 2000 preparedness.
COVENANTS: Affirmative Covenants: Delivery of financial
statements, reports accountants' letters, projections,
officers' certificates and other information reasonable
requested by the Lenders; continuation of business and
maintenance of existence and material rights and
privileges; compliance with laws and material
contractual obligations; maintenance of property and
insurance; maintenance of books and records; right of
the Lenders to inspect property and books and records,
and; notices of defaults, litigation and other material
events.
Negative Covenants: Limitations on liens; mergers,
consolidations, sales of assets; transactions with
affiliates; sale and leasebacks; and changes in lines
of business.
Financial covenants:
o The Total Funded Debt to EBITDA shall not exceed
2.5 to 1.0.
o Borrower and its Subsidiaries shall at all times
maintain ownership (free and clear of all
encumbrances) of at least $300,000,000 in cash
and/or marketable securities.
EVENTS OF DEFAULT: Nonpayment of principal when due; nonpayment of
interest, fees or other; material inaccuracy of
representations and warranties; violation of covenants
(subject, in the case of certain affirmative covenants,
to a grace period to be agreed upon); cross-default;
bankruptcy events; certain ERISA events; material
judgements; and a change of control (the definition of
which is to be agreed).
REQUIRED LENDERS: Amendments and waivers of the provisions of the loan
agreement and other definitive credit documentation
will require the approval of Lenders holding loans and
commitments representing more than 50% of the aggregate
amount of loans (excluding Competitive Bid Loans) and
commitments under the Facility, except that the consent
of all the Lenders affected thereby shall be required
with respect to (i) increases in the commitment of such
Lenders, (ii) reductions of principal, interest or
fees, and (iii) extensions of scheduled maturities or
times for payment.
GOVERNING LAW AND FORUM: State of Texas.
FEES/EXPENSES: As set forth in Addendum 1.
OTHER: This Summary of Terms is intended as an outline of
certain of the material terms of the Facility and does
not purport to summarize all of the conditions,
covenants, representations, warranties and other
provisions which would be contained in definitive
documentation for the Facility contemplated hereby. The
Borrower and the Guarantors shall each waive its right
to a trial by jury.
SYNDICATION SELL-DOWN Every dollar raised during the Syndication process will
STRATEGY reduce the primary Lender's positions until each
Primary Lender's position will be reduced below
$50,000,000. No Primary Lender's position will be
reduced below $50,000,000 until every Primary Lender's
position is reduced to $50,000,000.
- --------------------------------------------------------------------------------
[BANK OF AMERICA LOGO] Page 2 March 9, 1999
<PAGE> 12
CONFIDENTIAL
- --------------------------------------------------------------------------------
ADDENDUM 1
FEES AND EXPENSES
FACILITY FEE: The Borrower will pay a fee (the "Facility Fee"),
on each Lender's allocated share of the Commitments
(both drawn and undrawn portion), in the amount of
applicable Facility Fee determined in accordance
with the attached Pricing Grid. The Facility Fee is
payable quarterly in arrears.
INTEREST RATES: At the Borrower's option, any loan under the
Facility that is made to it will bear interest at a
rate equal to the Applicable Margin, as determined
in accordance with the attached Pricing Grid, plus
one of the following indexes: (i) LIBOR, or (ii) the
Alternate Base Rate (to be defined as the higher of
(a) the Administrative Agent's prime rate and (b)
the Federal Funds rate plus .50%). If the Borrower
shall elect the conversion of any loan under the
Facility to a one year Term Loan the Applicable
Margin will be equal to the sum of the Applicable
Margin for LIBOR Loans, the Facility Fee plus 12.5
basis points.
COST AND YIELD
PROTECTION: Customary for transactions and facilities of this
type, including, without limitation, in respect of
breakage or redeployment costs incurred in
connection with prepayments, changes in capital
adequacy and capital requirements or their
interpretation, illegality, unavailability, reserves
without proration or offset and payments free and
clear of withholding or other taxes.
The Facility Fee, the Applicable Margin for any fiscal quarter, shall be the
applicable rate per annum set forth in the table below opposite the ratio of
Funded Debt to EBITDA determined as of the last day of the immediately
preceding fiscal quarter.
<TABLE>
<CAPTION>
FACILITY PRICING GRID
================================================================================
APPLICABLE APPLICABLE
MARGIN FOR MARGIN FOR ABR FACILITY
LEVEL TOTAL DEBT/EBITDA LIBOR LOANS LOANS FEE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
I >2.25x 92.5bps 0.0bps 20.0bps
- --------------------------------------------------------------------------------
II > = 1.50x but <2.25x 72.5bps 0.0bps 15.0bps
- --------------------------------------------------------------------------------
III* > = 0.75x but <1.50x 82.5bps 0.0bps 12.5bps
- --------------------------------------------------------------------------------
IV <0.75x 52.5bps 0.0bps 10.0bps
- --------------------------------------------------------------------------------
V BBB+/Baa1 40.0bps 0.0bps 10.0bps
================================================================================
</TABLE>
* Anticipated Initial LIBOR margin and Facility Fee.
- --------------------------------------------------------------------------------
[BANK OF AMERICA LOGO] Page 3 MARCH 9, 1998
<PAGE> 13
[ABN-AMRO BANK LETTERHEAD]
March 9, 1999
BMC Software, Inc.
2101 City West Blvd.
Houston, Texas 77042
Attn: Stephen Solcher, Vice President and Treasurer
Mike Shryock, Finance Manager
Re: Proposed $500,000,000 Revolving Credit Facility (the "Facility")
Dear Stephen and Mike:
We, ABN AMRO Bank N.V. ("ABN AMRO"), hereby issue our commitment to the
Facility in a principal amount of $125,000,000 based on the terms and
conditions outlined in the revised Summary of Terms and Conditions dated March
8, 1999 (the "Term Sheet") sent to us by BMC Software, Inc. as amended by Mike
Shryock's letter to ABN AMRO dated March 9, 1999. Our commitment to this
financing is subject to the negotiation and execution of documentation
satisfactory to ABN AMRO.
The commitment offered by ABN AMRO herein is to underwrite the aggregate amount
of $125,000,000. If BMC accepts this commitment offer, ABN AMRO undertakes to
syndicate the Facility; provided, however, that the inability of ABN AMRO to
complete such syndication shall not affect the commitment of ABN AMRO or the
obligations of BMC hereunder.
BMC agrees to provide ABN AMRO with all information and take such other actions
as ABN AMRO may reasonably request to facilitate the syndication of the
Facility by ABN AMRO. ABN AMRO agrees to treat all confidential information
provided to it by BMC on a confidential basis in accordance with customary
banking practices subject to customary exceptions. ABN AMRO may provide such
information to potential syndicate banks and financial institutions provided
such banks and financial institutions similarly agree to maintain such
confidentiality.
This letter is not meant to encompass, nor shall it be construed as
encompassing, all of the terms and conditions of the Facility. It is intended
to outline the principal points of business understandings concerning the
Facility. The commitment of ABN AMRO hereunder is subject to completion by ABN
AMRO of satisfactory due diligence and the execution of a definitive lease
agreement and other lease documentation in form and substance satisfactory to
ABN AMRO. If ABN AMRO and BMC are unable to agree upon such documentation, they
shall have no further obligations to each other hereunder
<PAGE> 14
[ABN-AMRO BANK LOGO]
except that BMC shall be obligated to reimburse ABN AMRO for its out-of-pocket
fees, costs and expenses as provided herein.
In consideration of the commitments provided by ABN AMRO hereunder, BMC agrees
to indemnify and hold harmless each of ABN AMRO and its officers, directors,
employees, agents, advisors and affiliates for all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
disbursements of counsel) incurred by any of them in connection with this
commitment letter, the Facility, the use by BMC of the Facility or the proceeds
thereof, the collateral for the Facility, the lease documents, any related
document, instrument or agreement or any transaction contemplated hereby or
thereby whether or not such transactions are consummated, except for the portion
of such claims, damages, losses, liabilities and expenses caused by such party's
gross negligence or willful misconduct.
The commitment set forth in this letter is personal to BMC and may not be
transferred or assigned to any other party without the prior written consent of
ABN AMRO. Except as otherwise required by law, neither this letter nor any part
hereof may, without the prior written consent of ABN AMRO, be disclosed or
exhibited to any other party except BMC's accountants, attorneys and other
advisors, and then, in each case, only in connection with the transactions
contemplated hereby and on a confidential basis.
If the commitment offered herein is satisfactory, please indicate BMC's
acceptance by having an authorized officer of BMC sign and date each of the
enclosed copies of this letter and the attached fee agreement letter and
delivering the executed copies of each, to ABN AMRO. ABN AMRO reserves the
right to terminate the commitment offer set forth herein at any time prior to
receipt by ABN AMRO of such executed copies. Unless so accepted or otherwise
terminated by ABN AMRO on or prior to March 15, 1999, the offer set forth
herein will expire on that date.
Upon the acceptance by BMC of the commitment offer set forth in this letter, ABN
AMRO will commence its due diligence and instruct its counsel to commence
documentation. By accepting this offer, BMC agrees to reimburse ABN AMRO for all
reasonable fees, costs and expenses (whether incurred before or after the date
hereof), including, without limitation, audit fees, out-of-pocket syndication
expenses, and fees and disbursements of counsel for ABN AMRO, incurred by ABN
AMRO in connection with its due diligence, the syndication of the Facility and
the negotiation, preparation, execution, delivery and enforcement of the lease
documents, whether or not any money is advanced by ABN AMRO under the Facility,
any of the transactions contemplated hereby are consummated or any documents are
agreed to and executed. If BMC accepts this offer, ABN AMRO's commitment
hereunder shall continue until September 30, 1999, on which date such commitment
shall expire unless final documents have been executed by ABN AMRO, BMC and the
other parties thereto on or prior to such date.
This letter shall be governed by and construed in accordance with the laws of
the State of California without regard to conflicts of law principles.
Closing and funding by ABN-AMRO to occur on or before April 7th, 1999.
<PAGE> 15
[ABN-AMRO BANK LOGO]
We look forward to working with you on this transaction. Please let us know if
you have any questions.
Very truly yours,
ABN AMRO BANK N.V.
By: /s/ JAMIE DILLON By: /s/ MATHEW HARVEY
-------------------------------- ---------------------------------
Name: Jamie Dillon Name: Mathew Harvey
Title: Vice President and Director Title: Vice President
ACCEPTED AND AGREED
BMC SOFTWARE, INC.
By: /s/ STEPHEN SOLCHER
--------------------------------
Name: STEPHEN SOLCHER
Title: TREASURER
Date: 3/10/99
<PAGE> 1
SHARE PURCHASE AND TENDER AGREEMENT
by and between
BMC SOFTWARE, INC.
and
NEW DIMENSION SOFTWARE LTD.
Dated as of March 7, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I THE OFFER.......................................................................................2
1.1. The Offer.......................................................................................2
1.2. Company Actions.................................................................................3
1.3. Shareholder Lists...............................................................................4
1.4. Directors.......................................................................................4
ARTICLE II OTHER AGREEMENTS RELATING TO THE OFFER..........................................................4
2.1. Options and Other Purchase Rights...............................................................4
2.2. Compulsory Acquisition..........................................................................5
2.3. Reservation of Right to Revise Structure........................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................5
3.1. Organization and Standing.......................................................................5
3.2. Agreement Authorized and its Effect on Other Obligations........................................6
3.3. Capitalization..................................................................................6
3.4. Subsidiaries....................................................................................6
3.5. Reports and Financial Statements................................................................7
3.6. Liabilities.....................................................................................8
3.7. Additional Company Information..................................................................8
3.8. Certain Agreements..............................................................................8
3.9. No Undisclosed Contracts or Defaults............................................................9
3.10. Absence of Certain Changes and Events...........................................................9
3.11. Taxes...........................................................................................9
3.12. Intellectual Property..........................................................................11
3.13. Software Contracts.............................................................................13
3.14. Title to Properties............................................................................14
3.15. Environmental Compliance.......................................................................14
3.16. Compliance with Other Laws; Permits............................................................15
3.17. Finder's Fee; Transaction Expenses.............................................................16
3.18. Compliance with ERISA..........................................................................16
3.19. Consents; Litigation...........................................................................17
3.20. Product Warranty...............................................................................18
3.21. Investment Company.............................................................................18
3.22. Inapplicability of Certain Statutes............................................................18
3.23. Banking Arrangements...........................................................................18
3.24. Relationships with Related Persons.............................................................18
3.25. Restrictions on Business Activities............................................................18
3.26. Offer Documents; Schedule 14D-9................................................................19
3.27. Grants, Incentives and Subsidies...............................................................19
3.28. Industrial Company.............................................................................19
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER....................................................20
4.1. Organization and Qualification.................................................................20
4.2. Authorization and Validity of Agreement........................................................20
4.3. Consents and Approvals.........................................................................20
4.4. No Violation...................................................................................20
4.5. Litigation.....................................................................................21
4.6. Offer Documents; Schedule 14D-9................................................................21
4.7. Brokers and Finders............................................................................21
4.8. Ownership of Shares............................................................................21
ARTICLE V COVENANTS......................................................................................22
5.1. Conduct of Business Pending the Closing Date...................................................22
5.2. Access; Confidentiality........................................................................23
5.3. Notice of Certain Matters......................................................................23
5.4. Non-Solicitation...............................................................................24
5.5. Takeover Statutes..............................................................................24
5.6. Cooperation....................................................................................24
5.7. Public Announcements...........................................................................25
5.8. Acquisition Proposals..........................................................................25
5.9. D&O Indemnification............................................................................26
5.10. Purchaser Plans................................................................................27
5.11. Purchaser Stock Options........................................................................28
5.12. Israeli Operations.............................................................................28
5.13. Boole & Babbage Shares.........................................................................28
ARTICLE VI TERMINATION....................................................................................28
6.1. Termination....................................................................................28
6.2 Effect of Termination..........................................................................29
6.3. Fees and Expenses..............................................................................30
ARTICLE VII MISCELLANEOUS........................................................................................30
7.1. No Survival....................................................................................30
7.2. Notices........................................................................................30
7.3. Certain Definitions............................................................................31
7.4. Entire Agreement...............................................................................32
7.5. Assignment; Binding Effect.....................................................................32
7.6. Amendments.....................................................................................32
7.7. Waivers........................................................................................32
7.8. Captions.......................................................................................32
7.9. Counterparts...................................................................................33
7.10. Validity.......................................................................................33
7.11. Governing Law..................................................................................33
7.12. New Offer......................................................................................33
</TABLE>
-ii-
<PAGE> 4
EXHIBITS:
Exhibit A - Conditions to the Offer
Exhibit 1.2 - Form of Amendment to Articles of Association
Exhibit B - Form of Option Cancellation Agreement
-iii-
<PAGE> 5
SHARE PURCHASE AND TENDER AGREEMENT
THIS SHARE PURCHASE AND TENDER AGREEMENT is dated as of March 7, 1999
by and between New Dimension Software Ltd., an Israeli corporation (the
"Company"), and BMC Software, Inc., a Delaware corporation ("Purchaser").
RECITALS
WHEREAS, the respective Boards of Directors of the Company and
Purchaser have approved the acquisition of the Company by Purchaser, upon the
terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company deems it desirable and
in the best interests of the Company and its shareholders that the Company enter
into this Agreement which provides for a cash tender offer for Shares (as
defined below) pursuant to Section 236 of the Companies Ordinance (New Version)
5743-1983 of the State of Israel (the "Companies Ordinance"), whereby, among
other things, all of the issued and outstanding ordinary shares, par value NIS
0.01 per share, of the Company ("Shares") that are validly tendered pursuant to
such offer, shall be purchased by Purchaser in exchange for an amount of cash
equal to the Per Share Amount (defined below), upon the terms and subject to the
conditions set forth herein and in accordance with the laws of the State of
Israel;
WHEREAS, Purchaser is unwilling to enter into this Agreement (and
effect the transactions contemplated hereby) unless, contemporaneously with the
execution and delivery hereof, certain beneficial and record holders of the
Shares enter into Shareholder Agreements under which such holders have, among
other things, agreed to tender their Shares into the Offer (the "Shareholder
Agreements") and, in order to induce Purchaser to enter into this Agreement,
such holders are executing and delivering concurrently herewith the Shareholder
Agreements;
WHEREAS, as a material inducement for Purchaser to enter into this
Agreement, the Company has agreed to amend the Distribution Agreement dated
October 26, 1997, as previously amended, between the Company and Boole & Babbage
Europe effective as of the date of this Agreement; and
WHEREAS, as a condition to entering into this Agreement, Purchaser has
required the Company to settle all claims with members of its Board of Directors
for a maximum settlement amount and, as part of such requirement, certain
directors of the Company have agreed to release all claims against the Company
relating to their relationship with the Company prior to the Closing Date (as
defined below) pursuant to those certain Releases dated as of the date of this
Agreement (the "Director Releases"); and
NOW, THEREFORE, in consideration of the foregoing and of the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto hereby agree as follows:
<PAGE> 6
ARTICLE I
THE OFFER
1.1. The Offer.
(a) As promptly as practicable (but in no event later than five
business days following the public announcement of the execution hereof),
Purchaser shall commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), an offer to purchase all
of the Company's outstanding Shares, at a price of $52.50 per Share (as such
amount may be increased, the "Per Share Amount"), net to the seller in cash (as
such offer may be amended in accordance with the terms of this Agreement, the
"Offer"), subject to the conditions set forth in Exhibit A hereto and all
provisions under the laws and regulations of the State of Israel.
Notwithstanding the foregoing, the directors of the Company will not have the
right to tender their Shares unless the Company's shareholders shall have
approved such right in accordance with Section 1.2(b). If, between the date of
this Agreement and the date on which Shares are accepted for payment pursuant to
the Offer (the "Closing Date"), the outstanding Shares are changed into a
different number or class of shares by reason of any stock split, stock
dividend, reverse stock split, reclassification, recapitalization or other
similar transaction, then the Per Share Amount shall be appropriately adjusted.
Purchaser expressly reserves the right to amend or modify the terms of the Offer
at any time prior to acceptance of Shares for payment pursuant to the Offer,
except that the Purchaser shall not, without the prior written consent of the
Company, (i) decrease or change the form of the consideration payable in the
Offer, (ii) impose additional conditions to the Offer, (iii) change the
conditions to the Offer, except that Purchaser in its sole discretion may waive
any of the conditions to the Offer, or (iv) make any other change in the terms
or conditions of the Offer that is adverse to the holders of Shares. Purchaser
will, on the terms and subject to the prior satisfaction or waiver of the
conditions to the Offer, accept for payment and pay for all Shares validly
tendered and not withdrawn pursuant to the Offer promptly after expiration of
the Offer. The Offer shall be open for an initial period of 20 business days
from the date of commencement thereof; provided that, Purchaser may, in
accordance with applicable law, extend the Offer if the conditions to the Offer
have not been satisfied. The Company agrees that no Shares held by the Company
will be tendered to Purchaser pursuant to the Offer; provided, that Shares held
beneficially or of record by any plan, program or arrangement sponsored or
maintained for the benefit of employees of the Company shall not be deemed to be
held by the Company, regardless of whether the Company has, directly or
indirectly, the power to vote or control the disposition of such Shares. The
obligations of Purchaser to commence the Offer and to accept for payment and to
pay for Shares validly tendered on or prior to the expiration of the Offer and
not withdrawn shall be subject only to the conditions set forth in Exhibit A
hereto. As long as the Company or its Board of Directors shall not have asserted
any of their rights pursuant to Section 5.8(b), Purchaser shall at the request
of the Company extend the Offer if at any scheduled expiration date of the Offer
any of the conditions to Purchaser's obligations to purchase Shares shall not be
satisfied; provided, however, that Purchaser shall not be required to extend the
Offer beyond July 12, 1999.
(b) On the date of commencement of the Offer, Purchaser shall file with
the Securities and Exchange Commission (the "SEC") a Tender Offer Statement on
Schedule 14D-1 (together with all amendments thereto, the "Schedule 14D-1") with
respect to the Offer, which shall contain the offer to purchase and related
letter of transmittal and other ancillary offer documents and instruments
-2-
<PAGE> 7
pursuant to which the Offer will be made (collectively, together with any
supplements or amendments thereto, the "Offer Documents"). Purchaser will
disseminate the Offer Documents to holders of Shares. Each of Purchaser and the
Company will promptly correct any information provided by it for use in the
Offer Documents that becomes false or misleading in any material respect and
Purchaser will take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable law. The Company and
its counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents prior to their filing with the SEC. Purchaser agrees to provide
the Company with any comments that may be received from the SEC or its staff
with respect to the Offer Documents promptly after receipt thereof and to
further provide the Company with a reasonable opportunity to participate in all
substantive communications with the SEC and its staff relating to the Offer
Documents, the Offer or the transactions contemplated thereby.
1.2. Company Actions.
(a) The Company hereby consents to the Offer and represents and
warrants that its Board of Directors (at a meeting or meetings duly called and
held) has (a) unanimously determined as of the date hereof that the Offer is
fair to and in the best interests of the shareholders of the Company and (b)
resolved, subject to the directors of the Company not having the right to tender
their Shares or the right to receive any compensation for services provided to
the Company pursuant to the Director Releases, unless the Company's shareholders
shall have approved such right in accordance with Section 1.2(b), to recommend
acceptance of the Offer and approval of the matters set forth in Section 1.2(b)
by the shareholders of the Company. The Company further represents that CIBC
Oppenheimer Corp. has rendered to the Board of Directors of the Company its
opinion, dated as of the date hereof, to the effect that the Per Share Amount is
fair to the holders of the Shares from a financial point of view. As soon as
practicable after the commencement of the Offer, the Company shall file or cause
to be filed with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9") containing the unanimous recommendation of the
Board of Directors in favor of the Offer and shall permit the inclusion in the
Schedule 14D-1 of such recommendation. Each of the Company and Purchaser will
promptly correct any information provided by it for use in the Schedule 14D-9
that becomes false or misleading in any material respect and the Company will
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and to
the extent required by applicable law. Purchaser and its counsel shall be given
a reasonable opportunity to review and comment on the Schedule 14D-9 prior to
its filing with the SEC. The Company agrees to provide Purchaser with any
comments that may be received from the SEC or its staff with respect to the
Schedule 14D-9 promptly after receipt thereof and to further provide Purchaser
with a reasonable opportunity to participate in all substantive communications
with the SEC and its staff relating to the Schedule 14D-9, the Offer or the
transactions contemplated thereby.
(b) The Company agrees, as soon as practicable after the date of this
Agreement, to duly call, give notice of, convene and hold an extraordinary
general meeting of its shareholders (the "Special Meeting") for the purpose of
submitting for approval by the Company's shareholders proposals to (i) approve
the right of the directors of the Company to sell their Shares to the Purchaser
pursuant to the Offer and the transactions contemplated thereby and the right to
receive any compensation for services provided to the Company from the Company
pursuant to the Director
-3-
<PAGE> 8
Releases, and (ii) approve, by special resolution, an amendment to the Company's
Articles of Association to provide that the holders of at least 60% of the
issued and outstanding Shares of the Company shall be entitled to appoint and
remove any and all members of the Board of Directors of the Company, by means of
a written notice signed by such holders to the Company (collectively, the
"Shareholder Approvals"). The Company further agrees to use its best efforts to
solicit proxies in favor of and to take all other actions necessary to obtain
the Shareholder Approvals at the Special Meeting. The amendment to the Articles
of Association shall be in the form attached hereto as Exhibit 1.2(b). The
Company will provide Purchaser with a reasonable opportunity to review and
approve all proxy or other materials to be sent to shareholders in connection
with the Special Meeting.
1.3. Shareholder Lists. In connection with the Offer, the Company shall
promptly furnish or cause to be furnished to Purchaser mailing labels and
security position listings and any available listing or computer file containing
the names and addresses of the record holders of Shares as of a recent date and
shall furnish Purchaser with such information reasonably available to the
Company and such assistance as Purchaser or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of Shares. Subject
to the requirements of applicable law and except for such steps as are necessary
to disseminate the Offer Documents and any other documents necessary to
consummate the Offer, Purchaser and its affiliates will hold in confidence such
listings and other information, shall use such information only in connection
with the Offer and, if this Agreement is terminated, shall, and shall cause its
agents or other representatives to, promptly deliver to the Company all copies
of all such information (and extracts or summaries thereof) then in their
possession.
1.4. Directors. Subject to obtaining the Shareholder Approvals,
promptly upon the purchase by Purchaser pursuant to the Offer of such number of
Shares as represents at least 60% of the outstanding Shares and from time to
time thereafter, Purchaser shall be entitled to designate the entire Board of
Directors of the Company, and the Company shall, upon request of Purchaser, take
all actions necessary to enable such Purchaser designees to be so elected or
appointed.
ARTICLE II
OTHER AGREEMENTS RELATING TO THE OFFER
2.1. Options and Other Purchase Rights.
(a) The Company shall use its best efforts to obtain from each holder
of options ("Company Options") granted under the stock option plans of the
Company or any subsidiary of the Company ("Company Option Plans") an agreement
in the form of Exhibit B hereto pursuant to which on the Closing Date the
Company will cancel such Company Options and make the payments described below.
On the Closing Date, each Company Option for which an agreement from the holder
thereof has been obtained pursuant to this Section 2.1(a) that is outstanding
immediately prior to the Closing Date, whether or not then exercisable or
vested, will be canceled by the Company effective on the Closing Date, and the
holders thereof shall be entitled to receive, for each Share subject to such
Company Option, in settlement and cancellation thereof, an amount in cash equal
to the positive difference, if any, between the Per Share Amount and the
exercise price per share of such Company Option, which amount shall be paid by
the Company at the time the Company Option
-4-
<PAGE> 9
is canceled; provided, however, that for purposes of calculating the amount of
cash to be paid in respect of the cancellation of Company Options that are
options to purchase shares of EagleEye Control Software Ltd. capital stock
rather than Shares of the Company, the Per Share Amount used in the foregoing
calculation shall be multiplied by 9.085. All applicable withholding taxes
attributable to the payments made hereunder or to distributions contemplated
hereby shall be deducted from the amounts payable under this Section 2.1(a) and
all such taxes attributable to the cancellation of Company Options shall be
withheld from the proceeds received in connection with the cancellation thereof.
(b) To the extent permitted by the Company Option Plans, the Company
Option Plans shall terminate on the Closing Date and any rights under any
provisions in any other plan, program or arrangement providing for the issuance
or grant by the Company of any interest in respect of the capital stock of the
Company shall be canceled as of the Closing Date.
(c) Purchaser shall make available to the Company all funds required to
make the payments to the holders of Company Options as set forth in Section
2.1(a) above.
2.2. Compulsory Acquisition. If Purchaser is successful in acquiring
pursuant to the Offer at least 90% of the Shares not owned by Purchaser or its
subsidiaries within four months after the date the Offer commences (the "Initial
Period"), Purchaser shall, pursuant to Section 236 of the Companies Ordinance,
declare by notice to the remaining shareholders (the "Notice of Acquisition")
that it is unilaterally acquiring (the "Compulsory Acquisition") the remaining
Shares not yet held by it on the same terms as those set forth in the Offer. The
Notice of Acquisition will be delivered at any time during the two month period
following the Initial Period. The Offer will serve as a "Plan" or "Contract"
under Section 236 of the Companies' Ordinance.
2.3. Reservation of Right to Revise Structure. At Purchaser's election,
the Offer may alternatively be structured so that the issued and outstanding
Shares transferred to Purchaser shall be transferred to a newly formed, wholly
owned subsidiary of Purchaser provided that no such change shall alter or change
the Per Share Amount. In the event of such an election by Purchaser, the parties
agree to execute the appropriate documents to reflect such an election.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants subject to the exceptions
specifically described in writing in the respective sections of the disclosure
schedule delivered by the Company to Purchaser and dated the date hereof (the
"Company Disclosure Schedule") as follows:
3.1. Organization and Standing. The Company is a corporation duly
organized, validly existing under the laws of the State of Israel, has full
requisite corporate power and authority to carry on its business as it is
currently conducted, and to own and operate the properties currently owned and
operated by it, and is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all jurisdictions
in which the character of the properties owned or the nature of the business
conducted by it would make such qualification or
-5-
<PAGE> 10
licensing necessary, except where the failure to be so qualified or licensed
would not reasonably be expected to have a Material Adverse Effect.
3.2. Agreement Authorized and its Effect on Other Obligations. The
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Company other
than the Shareholder Approvals, and this Agreement is a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, debtor relief or similar laws affecting the rights of creditors
generally, and (ii) general principles of equity. The purchase of Shares
pursuant to the Offer will not conflict with or result in a violation or breach
of any term or provision of, nor constitute a default under, (i) the Memorandum
of Association or Articles of Association of the Company or (ii) any indenture,
mortgage, deed of trust, lease, contract or other agreement to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their properties are bound, other than such violations, breaches
or defaults as would not reasonably be expected to have a Material Adverse
Effect. Section 3.2 of the Company Disclosure Schedule lists all holders of any
material indebtedness for borrowed money of the Company as of the date of this
Agreement, the lessors of any material property leased by Company and the other
parties to any Material Contract (as defined in Section 3.9) to which Company is
a party as of the date of this Agreement in each case whose consent to the Offer
or the Compulsory Acquisition is required.
3.3. Capitalization. The authorized capitalization of the Company
consists of 20,000,000 ordinary shares, par value NIS 0.01 per share, of which
as of the date hereof 12,258,898 Shares were issued and outstanding, and an
additional 950,705 Shares were reserved for issuance in conjunction with various
employee benefit plans. All of such outstanding shares are validly issued, fully
paid and nonassessable, and were not issued in violation of any preemptive
rights of any shareholder. Section 3.3 of the Company Disclosure Schedule sets
forth a complete list as of the date of this Agreement of all outstanding
options, warrants or obligations of any kind to issue any shares of capital
stock of Company or any subsidiary thereof, the owners thereof and the amounts
owned.
3.4. Subsidiaries. Section 3.4 of the Company Disclosure Schedule lists
the subsidiary corporations of the Company existing as of the date hereof, and
shows as to each of such subsidiary corporations the percentage of the total
outstanding stock thereof which is owned by the Company at such date. All
outstanding shares of stock of the subsidiary corporations owned by the Company
are validly issued, fully paid, and nonassessable, and the Company has good and
valid title thereto free and clear of any mortgage, pledge, lien, charge,
security interest, option, right of first refusal, preferential purchase right,
defect, encumbrance or other right or interest of any other person
(collectively, an "Encumbrance"), except for shares of capital stock or other
similar ownership interests of certain subsidiaries of the Company that are
owned by certain nominee equity holders as required by the applicable law of the
jurisdiction of organization of such subsidiaries. Each such subsidiary is a
corporation duly organized, validly existing, and in good standing (or
equivalent concept with respect to jurisdictions that do not recognize such
concept) under the laws of the jurisdiction under which it is incorporated and
has full requisite corporate power and authority to own its property and carry
on its business as presently conducted by it and is, or on the Closing Date will
be, duly qualified or licensed to do business and is, or on the Closing Date
will be, in good standing (or equivalent concept with respect to jurisdictions
that do not recognize such concept) as
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<PAGE> 11
a foreign corporation authorized to do business in all jurisdictions in which
the character of the properties owned or the nature of the business conducted by
such subsidiary makes such qualification or licensing necessary, except where
the failure to be so qualified or licensed would not reasonably be expected to
have a Material Adverse Effect on the Company. As hereinafter used in this
Article III, the term "Company" also includes any and all of its directly and
indirectly held subsidiaries, except where the context indicates to the
contrary; provided, however, that for purposes of Sections 3.7(a) and 3.18, the
term "Company" further includes any corporation, trade, business or entity under
common control with the Company within the meaning of Section 414(b), (c), (m)
or (o) of the Internal Revenue Code of 1986, as amended (the "Code") or Section
4001 of ERISA.
3.5. Reports and Financial Statements.
(a) The Company has previously furnished to Purchaser true and complete
copies of (a) all annual reports filed by Company with the SEC pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since December
31, 1995, (b) all other reports filed with the SEC since December 31, 1995, and
(c) any registration statements (other than Form S-8s) of Company declared
effective by the SEC since December 31, 1995. The consolidated financial
statements of Company and its subsidiaries included in the Company's most recent
report on Form 20-F and any other reports filed with the SEC by the Company
under the Exchange Act subsequent thereto (collectively, the "Company Reports")
were, or (if filed after the date hereof) will be, prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved and fairly present, or will fairly present,
the consolidated financial position for Company and its subsidiaries as of the
dates thereof and the consolidated results of their operations and changes in
financial position for the periods then ended (except with respect to interim
period financial statements, for normal year-end adjustments which are not
material and for the absence of footnotes). The Company Reports did not at the
time each of the Company Reports was filed with the SEC (or, if amended or
superseded by a subsequent filing, then on the date of such filing), and (if
filed after the date hereof) will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under whey they
were made, not misleading. Since December 31, 1995, the Company has filed with
the SEC all reports required to be filed by the Company under the Exchange Act
and the rules and regulations of the SEC.
(b) Included in Section 3.5(b) of the Company Disclosure Schedule are
preliminary unaudited consolidated financial statements of the Company and its
subsidiaries for the year ended December 31, 1998 (the "1998 Preliminary
Statements"). As soon as they become available and prior to the Closing Date,
the Company will deliver to the Purchaser audited financial statements of
Company and its subsidiaries for the year ended December 31, 1998 (the "1998
Audited Statements"). The 1998 Preliminary Statements were, and the 1998 Audited
Statements will be, prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
and fairly present, or will fairly present, the consolidated financial position
for Company and its subsidiaries as of the date thereof and the consolidated
results of their operations and changes in financial position for the period
then ended. Except as set forth in Section 3.5(b) of the Company Disclosure
Schedule, the 1998 Preliminary Statements and the 1998 Audited Statements will
not differ in any material respect.
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<PAGE> 12
3.6. Liabilities. Company has no liabilities of the type required to be
disclosed in the consolidated financial statements of Company prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis, except for: (i) liabilities disclosed in the financial
statements (including any related notes) contained in the Company Reports and
(ii) liabilities incurred in the ordinary course of business.
3.7. Additional Company Information. Set forth in Section 3.7 of the
Company Disclosure Schedule are true, complete and correct lists of the
following items, and Company agrees that upon the request of Purchaser, it will
furnish to Purchaser true, complete and correct copies of any documents referred
to in such lists:
(a) Employee Compensation Plans. All bonus, incentive compensation,
stock option, deferred compensation, profit-sharing, retirement, pension,
welfare, severance pay, supplemental income, group insurance, death benefit, or
other fringe benefit plans, arrangements or trust agreements that are in effect
as of the date of this Agreement covering active, former or retired employees of
the Company (collectively, "Company Plans"), together with copies of the most
recent Internal Revenue Service determination letters that have been received,
if any, with respect to such plans;
(b) Certain Salaries. The names and salary rates as of the date of this
Agreement of all officers and employees of the Company as of the date of this
Agreement whose regular annual base salary rate as of the date of this Agreement
is $125,000 (or the equivalent in foreign currency) or more, together with any
bonuses paid or payable to such persons for the fiscal year ended December 31,
1998, or since that date, and, to the extent existing on the date of this
Agreement, all arrangements with respect to any bonuses to be paid to such
employees from and after the date of this Agreement;
(c) Employee Agreements. Any collective bargaining agreements of the
Company as of the date of this Agreement with any labor union or other similar
representative of employees, including amendments, supplements, and
understandings, and all employment and consulting agreements of the Company as
of the date of this Agreement with employees whose regular annual base salary
exceeds $125,000 (or the equivalent in foreign currency) and with consultants
(excluding regular outside legal counsel and independent auditors) whose annual
compensation from the Company exceeds $125,000 (or the equivalent in foreign
currency); and
(d) Guaranties. All material third party indebtedness, liabilities and
commitments of others as to which the Company is a guarantor, endorser,
co-maker, surety, or accommodation maker (excluding liabilities as an endorser
of checks and the like in the ordinary course of business) and all letters of
credit, whether stand-by or documentary, issued by any third party.
3.8. Certain Agreements. The consummation of the transactions
contemplated by this Agreement will not cause or result in the acceleration or
vesting of any benefits, payments or rights covering active, former or retired
employees of the Company under (i) any Company Plans or (ii) any other
agreements to which the Company is a party.
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<PAGE> 13
3.9. No Undisclosed Contracts or Defaults. Except as may be specified
in the Company Reports, the Company is not a party as of the date of this
Agreement, to, or bound as of the date of this Agreement by, any material
contract or arrangement of a nature required to be filed as an exhibit to an
annual report filed by the Company under the Exchange Act which is to be
performed after the Closing Date (a "Material Contract"), nor is the Company in
default in any material obligation or covenant on its part to be performed under
any lease or other contract that is material to the business of the Company and
its subsidiaries taken as a whole.
3.10. Absence of Certain Changes and Events. Except as set forth in the
Company Reports or Section 3.10 of the Company Disclosure Schedule, other than
as a result of the transactions contemplated by this Agreement, between December
31, 1997 and the date of this Agreement, there has not been:
(a) Financial Change. Any adverse change in the financial condition,
backlog, operations or business of the Company which could reasonably be
expected to have a Material Adverse Effect;
(b) Property Damage. Any damage, destruction, or loss to the business
or properties of the Company (whether or not covered by insurance) that could
reasonably be expected to have a Material Adverse Effect;
(c) Dividends. Any declaration, setting aside, or payment of any
dividend or other distribution in respect of the Shares, or any direct or
indirect redemption, purchase or any other acquisition by the Company of any
Shares;
(d) Labor Disputes. Any labor dispute (other than routine grievances);
or
(e) Employment Arrangements. Any increase in compensation, bonus,
deferred compensation, stock options or other consideration of any employee or
director other than in the ordinary course of business consistent with past
practice.
3.11. Taxes.
(a) Tax Returns Filed; Taxes Paid. Except with respect to failures
which, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect and except as set forth in Section 3.11(a) of the Company
Disclosure Schedule, (i) all returns and reports ("Tax Returns") of or with
respect to any and all taxes, charges, fees, levies, assessments, duties or
other amounts payable to any federal, state, local or foreign taxing authority
or agency, including, without limitation, (x) income, franchise, profits, gross
receipts, minimum, alternative minimum, estimated, ad valorem, value added,
sales, use, service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, excise, stamp, windfall profits,
transfer and gains taxes, (y) customs, duties, imposts, charges, levies or other
similar assessments of any kind, and (z) interest, penalties and additions to
tax imposed with respect thereto ("Tax" or "Taxes") which are required to be
filed on or before the Closing by or with respect to the Company have been or
will be duly and timely filed, (ii) all Taxes which have become or will become
due with respect to the period
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<PAGE> 14
covered by each such Tax Return have been or will be timely paid in full, (iii)
all withholding Tax requirements imposed on or with respect to the Company on or
before the Closing have been or will be satisfied in full in all respects, and
(iv) no penalty, interest or other charge is or will become due with respect to
the late filing of any such Tax Return or late payment of any such Tax.
(b) Open Returns Disclosed. All federal and state income and franchise
Tax Returns of or with respect to the Company with unexpired or extended
statutes of limitations which have been audited by the applicable governmental
authority are set forth in Section 3.11 of the Company Disclosure Schedule.
(c) Extensions Disclosed. As of the date of this Agreement, except as
set forth in Section 3.11(c) of the Company Disclosure Schedule, there is not in
force any extension of time with respect to the due date for the filing of any
federal or state income or franchise Tax Return of or with respect to the
Company or any waiver or agreement for any extension of time for the assessment
or payment of any federal or state income or franchise Tax of or with respect to
the Company.
(d) Claims Disclosed. There is no claim against the Company for any
Taxes, and no assessment, deficiency or adjustment has been asserted or proposed
in writing with respect to any Tax Return of or with respect to the Company
other than those which could not reasonably be expected to have a Material
Adverse Effect.
(e) Scheduled Tax Liabilities Sufficient. The total amounts set up as
liabilities for current and deferred Taxes in the financial statements referred
to in Section 3.5 of this Agreement are sufficient to cover in all material
respects the payment of all Taxes, whether or not assessed or disputed, which
are, or are hereafter found to be, or to have been, due by or with respect to
the Company up to and through the periods covered thereby.
(f) Tax Allocation Agreements. There are no Tax allocation or sharing
agreements other than between or among the Company and its wholly owned
subsidiaries.
(g) No Tax Liens. Except for statutory liens for current Taxes not yet
due, no material liens for Taxes exist upon the assets of the Company.
(h) Change of Accounting Method. The Company will not be required to
include any amount in income for any taxable period beginning after December 31,
1997 as a result of a change in accounting method for any taxable period or
pursuant to any agreement with any Tax authority with respect to any such
taxable period.
(i) Partnerships. As of the date of this Agreement, none of the
property of the Company is held in an arrangement for which partnership Tax
Returns are being filed.
(j) Safe Harbor Leases; Tax-Exempt Use Property. As of the date of this
Agreement, none of the property of the Company is subject to a safe-harbor lease
(pursuant to section 168(f)(8) of the Internal Revenue Code of 1954 as in effect
after the Economic Recovery Tax Act of 1981 and before the Tax Reform Act of
1986) or is "tax-exempt use property" (within the meaning of
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<PAGE> 15
section 168(h) of the Code) or "tax-exempt bond financed property" (within the
meaning of section 168(g)(5) of the Code).
(k) Section 341(f) Election. The Company has not made an election under
section 341(f) of the Code.
(l) Tax Incentives. Section 3.11(l) of the Company Disclosure Schedule,
together with the Company's annual report on Form 20-F for the year ended
December 31, 1997, lists each tax incentive to which the Company is entitled
under the laws of the State of Israel, the period for which such tax incentive
applies, and the nature of such tax incentive. The Company has complied with all
material requirements of Israeli law to be entitled to claim any tax incentive.
Subject to the receipt of the approvals set forth in Section 3.19 below, except
as disclosed in Section 3.11(l) of the Company Disclosure Schedule, the
consummation of the Offer and the Compulsory Acquisition will not adversely
affect the remaining duration of the incentive or require any recapture of any
previously claimed incentive, and no consent or approval of any governmental
authority is required, other than as contemplated by Section 3.19, prior to
consummation of the Offer or Compulsory Acquisition in order to preserve the
entitlement of the Company to any such incentive. Except as set forth on Section
3.11(l) of the Company Disclosure Schedule, no subsidiary of the Company is
entitled to any benefit of the type described in this Section 3.11(l).
3.12. Intellectual Property. For purposes of this Section 3.12 and
Section 3.13, "Third Party Distributed Software" means the third party software
programs currently being distributed by the Company, whether as integrated or
bundled with any of the Company's software products or as a separate stand-alone
product, and "Internally Developed Software" means all software programs
developed for or on behalf of the Company and currently being distributed by the
Company and all software products or programs under development by the Company
but not currently distributed, other than Third Party Distributed Software.
Third Party Distributed Software and Internally Developed Software shall
collectively be referred to as the "Software Programs."
(a) Ownership. The Company exclusively owns all Internally Developed
Software, including without limitation those Software Programs listed on Section
3.12(a) of the Company Disclosure Schedule, free and clear of all mortgages,
pledges, liens, security interests, conditional sales agreements, encumbrances
or charges of any kind (other than object code end-user licenses in the ordinary
course of business and Marketing Agreements (as defined below)). The Company
exclusively owns all material patents, trademarks, service marks, trade names
and copyrights (including registrations, licenses and applications pertaining
thereto) and all other material intellectual property rights, trade secrets and
other confidential or proprietary information, processes and formulae embodied
in the Internally Developed Software (the "Intellectual Property"), free and
clear of all mortgages, pledges, liens, security interests, conditional sales
agreements, encumbrances or charges of any kind (other than object code end-user
licenses in the ordinary course of business and Marketing Agreements). Section
3.12 of the Company Disclosure Schedule contains a complete list of all
registered trademarks and service marks, all reserved trade names, all
registered copyrights and all filed patent applications and issued patents
relating to the Internally Developed Software.
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<PAGE> 16
(b) Notices. In no instance has the eligibility of the Internally
Developed Software for protection under applicable copyright law been forfeited
to the public domain by omission of any required notice or any other action.
(c) Protection. The source code and related technical system
documentation for the Internally Developed Software are protected by the Company
as trade secrets in accordance with trade secret protections sufficient to
maintain trade secret status under applicable law. Except as set forth in
Section 3.12(c) of the Company Disclosure Schedule, the source code and related
technical system documentation for the Internally Developed Software have been
disclosed by the Company only to (i) employees and contractors who have had a
"need to know" the contents thereof in connection with the performance of their
duties to the Company and who have executed nondisclosure agreements
substantially in the form provided by the Company to Purchaser, and (ii) third
parties under source code escrow agreements.
(d) Personnel. The Company has maintained a policy in accordance with
customary software industry standards whereby its personnel who during the three
years prior to the date hereof have been employees, agents, consultants and
contractors of the Company and who (on behalf of the Company) have contributed
to or participated in the conception and development of Internally Developed
Software and related technical documentation that is material to the operation
of the Company's business have executed nondisclosure and noncompetition
agreements substantially in the form provided by the Company to Purchaser. All
personnel who have contributed to or participated in the conception or
development of Internally Developed Software have no rights to any such
Internally Developed Software or related technical documentation and all such
Internally Developed Software and related technical documentation is exclusively
owned by the Company by operation of Israeli law.
(e) Third-Party Software. Section 3.12(e) of the Company Disclosure
Schedule contains a complete list of material Third Party Distributed Software.
Section 3.12(e) of the Company Disclosure Schedule lists all license agreements
for the use of all such material Third Party Software and, if any such software
is not licensed, the basis of the use of such software by the Company. The
Company has not taken any action that could, or failed to take any action, the
failure of which could, reasonably be expected to (i) give rise to the
termination by a licensor of the Company's license to distribute any material
Third Party Distributed Software or (ii) materially restrict the Company's right
of use of any material Third Party Distributed Software under any license
agreement or other right of use, in each case subject to any right Company may
have to receive notice of and/or cure or remedy such action or failure to act.
(f) No Infringement. The Internally Developed Software and, to the
Company's knowledge as of the date of this Agreement, the Third Party
Distributed Software do not infringe and will not infringe any copyright or
trade secret of any person or entity, and, to the Company's knowledge, no part
of the Internally Developed Software nor the use thereof for their intended
purposes (and to the Company's knowledge as of the date of this Agreement, no
part of the Third Party Distributed Software nor the use thereof for their
intended purposes) infringes or will infringe any valid and subsisting patent or
other exclusionary right of any third party. As of the date of this Agreement,
no written claims have been asserted against the Company by any person or entity
as to the use of any of the Intellectual Property.
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<PAGE> 17
(g) Integrity. Except with respect to demonstration or trial copies, no
portion of the Internally Developed Software or, to the Company's knowledge as
of the date of this Agreement, the Third Party Distributed Software contains any
"back door," "time bomb," "Trojan horse," "worm," "drop dead device," "virus" or
other software routines or hardware components designed to permit unauthorized
access or to disable or erase software, hardware, or data without the consent of
the user.
(h) Year 2000 Compliance. All Software Programs designated with a
"check" in the table (the "Y2K Compliance Table") with the heading "B. Release
Information" at the third through sixth pages of Exhibit 3.12(h) to the Company
Disclosure Schedule are Year 2000 Compliant. All Software Programs that are not
designated with a "check" as currently being Year 2000 Compliant will be Year
2000 Compliant on the date indicated in the Y2K Compliance Table. As used in
this Section 3.12(h), "Year 2000 Compliant" means such Software Programs will
handle correctly:
o storage and retrieval of date values
o arithmetic calculations which involve date values
o comparison and sorting of date fields
o calendar management
o execution in the 20th and 21st centuries, and real time
transition from the former to the latter
o common and concurrent manipulation of date values from both
the 20th and the 21st century
o unambiguous association of any 2-digit year value with a
century value
o avoidance of extended semantics. All values (including "00"
and "99") in any year- field represent only the associated
year
"Year 2000 Compliant" further means such Software Programs:
o will manage and manipulate data involving dates, including
single-century formulas and multi-century formulas and not
cause an abnormally ending scenario within the application or
result in the generation of incorrect values involving such
dates
o ensure that all date-related user interface functionality and
data fields include the indication of century
o ensure that all date-related functions will include the
indication of century.
(i) Notification. The Company has notified each of its customers
(excluding customers licensed through distributors) which releases of the
Software Programs licensed by such customer will and will not be Year 2000
Compliant.
(j) Migration Path. The implementation of the Year 2000 Compliant
version of each Software Program will be independent of the version of the
Software Program from which the customer is migrating.
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<PAGE> 18
3.13. Software Contracts.
(a) End-User Agreements. Section 3.13(a) of the Company Disclosure
Schedule sets forth a complete example of each of the Company's current standard
end user license agreements with respect to the Internally Developed Software
(the "Standard Licenses"). Section 3.13(a) of the Company Disclosure Schedule
accurately identifies each license transaction (with customer name redacted if
desired) which generated $200,000 (or the equivalent in foreign currency) or
more of revenues for the Company during the fiscal year ended December 31, 1998.
(b) Marketing Agreements. Section 3.13(b) of the Company Disclosure
Schedule sets forth a complete list of all contracts, agreements, licenses, or
other commitments or arrangements in effect with respect to the marketing,
remarketing, distribution, licensing or promotion of the Software Programs or
any other technical documentation or the Intellectual Property by any
independent salesperson, distributor, sublicensor or other remarketer or sales
organization (the "Marketing Agreements"), which generated 5% or more of the
Company's revenues during the preceding four fiscal quarters.
3.14. Title to Properties. With minor exceptions, which in the
aggregate are not material, and except for merchandise and other property and
assets sold, used or otherwise disposed of in the ordinary course of business
for fair value or no longer necessary for the operation of the Company's
business, the Company has good and valid title to or valid leasehold interests
in all its properties, interests in properties and assets, real and personal,
reflected in the most recent balance sheet of the Company included in the
Company Reports, free and clear of any Encumbrance of any nature whatsoever,
except (i) liens and Encumbrances reflected in the most recent balance sheet of
the Company included in the Company Reports, (ii) liens for current taxes or
other governmental charges or levies not yet due and payable, (iii) Encumbrances
that are created, arise or exist under or in connection with any leases or other
contracts or other matters referred to in the Company Disclosure Schedule, (iv)
Encumbrances that relate to or are created, arise or exist in connection with,
any legal proceeding that is being contested in good faith, and (v) such
imperfections of title, easements and Encumbrances, if any, as do not and will
not materially detract from the value of the property subject thereto or
affected thereby, or otherwise materially impair business operations. All leases
pursuant to which the Company leases (whether as lessee or lessor) any
substantial amount of real or personal property are in good standing, valid and
effective, except as validity or effectiveness may be limited by (i) bankruptcy,
insolvency, reorganization, debtor relief or similar laws affecting the rights
of creditors generally, and (ii) general principles of equity; and there is not,
under any such leases, any existing or prospective default or event of default
or event which with notice or lapse of time, or both, would constitute a default
by the Company and in respect to which the Company has not taken reasonable
steps to prevent a default from occurring. The buildings and premises of the
Company that are used in its business are in good and sufficient operating
condition and repair for the continued conduct of the Company's business on a
basis consistent with past practice, subject to ordinary wear and tear. All
major items of equipment of the Company are in good and sufficient operating
condition and in a state of reasonable maintenance and repair for the continued
conduct of the Company's business on a basis consistent with past practice,
ordinary wear and tear excepted, and are free from any known defects except as
may be repaired by routine maintenance and such minor defects as do not
substantially interfere with the continued use thereof in the conduct of normal
operations.
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<PAGE> 19
3.15. Environmental Compliance.
(a) Environmental Conditions. There are no materials or substances that
are regulated by Applicable Environmental Laws (as defined in Section 3.15(c))
on any real property owned by the Company as a result of the actions of the
Company or, to its knowledge, of any third party or otherwise, that would
reasonably be expected to have a Material Adverse Effect on the Company.
(b) Permits, etc. The Company has in full force and effect all
environmental permits, licenses, approvals and other authorizations required
under Applicable Environmental Laws to conduct its operations and is operating
in material compliance thereunder.
(c) Compliance. The Company's operations and use of its assets do not
violate any applicable federal, state, foreign or local law, statute, ordinance,
rule, regulation, order or notice requirement pertaining to (a) the condition or
protection of air, groundwater, surface water, soil, or other environmental
media, (b) the environment, including natural resources or any activity which
affects the environment, or (c) the regulation of any pollutants, contaminants,
waste, substances (whether or not hazardous or toxic), including, without
limitation, the Comprehensive Environmental Response Compensation and Liability
Act (49 U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 1609 et seq.), the Clean Water Act (33 U.S.C. 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act
(17 U.S.C. Section. 2601 et seq.), the Safe Drinking Water Act (42 U.S.C.
Section. 201 and Section. 300f et seq.), the Rivers and Harbors Act (33 U.S.C.
Section. 401 et seq.), the Oil Pollution Act (33 U.S.C. Section. 2701 et seq.)
and analogous state, foreign and local provisions, as any of the foregoing may
have been amended or supplemented from time to time (collectively the
"Applicable Environmental Laws"), except for violations which, either singly or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(d) Environmental Claims. No written notice has been served on the
Company from any entity, governmental agency or individual regarding any
existing, pending or threatened investigation or inquiry related to alleged
violations under any Applicable Environmental Laws, or regarding any claims for
remedial obligations or contribution under any Applicable Environmental Laws,
other than any of the foregoing which, either singly or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect or which have been
cured or corrected in all material respects.
(e) Renewals. The Company does not know of any reason it would not be
able to renew any of the permits, licenses, or other authorizations required
pursuant to any Applicable Environmental Laws to operate and use any of the
Company's assets for their current purposes and uses.
(f) Environmental Documents. There are no environmental orders or
decrees material to current operations conducted by the Company and there have
not been any environmental audits, assessments, investigations or reviews
conducted within the last five years on any property owned or, to the knowledge
of the Company, used by the Company.
3.16. Compliance with Other Laws; Permits. Except as set forth in the
Company Reports, the Company is not in violation of or in default with respect
to the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) as
amended ("OSHA"), or any other applicable law or any applicable rule,
regulation, or any writ or decree of any court or any governmental commission,
board, bureau,
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<PAGE> 20
agency, or instrumentality, or delinquent with respect to any report required to
be filed with any governmental commission, board, bureau, agency or
instrumentality, except for violations or defaults which, either singly or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect. The Company has all permits, licenses, orders, approvals, franchises and
other rights and privileges ("Permits") necessary in order for it to carry on
its business as presently conducted, except such Permits which no governmental
authority has demanded be obtained, or of which the company is unaware, or which
the failure to obtain, if required, would not have a Material Adverse Effect,
except as set forth in the Company Disclosure Schedule. Section 3.16 of the
Company Disclosure Schedule sets forth a list of all such material Permits from
all governmental and regulatory bodies wherever located held by the Company and
its subsidiaries, including all Permits for the export or import of encryption.
3.17. Finder's Fee; Transaction Expenses.
(a) All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by the Company and its counsel directly
with Purchaser and its counsel, without the intervention on behalf of the
Company of any other person as the result of any act of the Company, and so far
as is known to the Company, without the intervention on behalf of the Company of
any other person in such manner as to give rise to any valid claim against any
of the parties hereto for a brokerage commission, finder's fee or any similar
payments, other than financial advisory fees to be paid by the Company to
Compass Partners International, L.L.C. and CIBC Oppenheimer Corp. in connection
with the transaction under financial arrangements disclosed to Purchaser.
(b) Section 3.17 of the Company Disclosure Schedule sets forth a
complete list of all expenses to be paid by the Company in connection with the
transactions contemplated by this Agreement to any legal, financial, investment
banking, accounting or other professional advisor, including any agreements
relating to the foregoing.
3.18. Compliance with ERISA. The Company has made available to
Purchaser a copy of each Company Plan, any related summary plan description,
trust agreement and annuity or insurance contract, if any, and each plan's most
recent annual report filed with the Internal Revenue Service, if any, and: (i)
each Company Plan has been maintained and administered in material compliance
with its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, and is, to the extent required by
applicable law or contract, fully funded without having any deficit or unfunded
actuarial liability; (ii) all required contributions under any such plans have
been made and the applicable funds have been funded in accordance with the terms
thereof and no past service funding liabilities exist thereunder; (iii) each
Company Plan that is required or intended to be qualified under applicable law
or registered or approved by a governmental agency or authority has been so
qualified, registered or approved by the appropriate governmental agency or
authority, and, to the knowledge of the Company, nothing has occurred since the
date of the last qualification, registration or approval to materially and
adversely affect, or cause, the appropriate governmental agency or authority to
revoke such qualification, registration or approval; (iv) to the extent
applicable, the Company Plans comply, in all material respects, with the
requirements of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Code, and any Company Plan intended to be qualified under
Section 401(a) of the Code has been determined by
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<PAGE> 21
the Internal Revenue Service to be so qualified and, to the knowledge of the
Company, nothing has occurred to cause the loss of such qualified status; (v) no
Company Plan is covered by Title IV of ERISA or Section 412 of the Code; (vi)
there are no pending or, to the knowledge of the Company, anticipated material
claims against or otherwise involving any of the Company Plans and no suit,
action or other litigation (excluding claims for benefits incurred in the
ordinary course of Company Plan activities) has been brought against or with
respect to any Company Plan; (vii) all material contributions, reserves or
premium payments, required to be made as of the date hereof to the Company Plans
have been made or provided for; (viii) the Company has not incurred any
liability under subtitle C or D of Title IV of ERISA with respect to any
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by the Company; (ix) the Company has not
incurred any withdrawal liability under Subtitle E of Title IV of ERISA with
respect to any "multiemployer plan," within the meaning of Section 4001(a)(3) of
ERISA; (x) the Company has substantially performed all obligations, whether
arising by law or by contract, required to be performed by it in connection with
the Company Plans; (xi) to the knowledge of the Company, no act, omission or
transaction has occurred which would result in imposition on the Company of (a)
a civil penalty assessed pursuant to subsections (c), (i) or (l) of Section 502
of ERISA, (b) breach of fiduciary duty liability damages under Section 409 of
ERISA or (c) a tax imposed pursuant to Chapter 43 of Subtitle D of the Code;
(xii) in connection with the consummation of the transactions contemplated by
this Agreement, no payments have or will be made hereunder, under the Company
Plans or otherwise by the Company which, in the aggregate, would result in
imposition of the sanctions imposed under Sections 280G and 4999 of the Code;
and (xiii) the Company has no obligations for retiree health and life benefits
under any Company Plan, except as set forth on Section 3.18 of the Company
Disclosure Schedule, and there are no restrictions on the rights of the Company
to amend or terminate any such Company Plan without incurring any liability
thereunder.
3.19. Consents; Litigation. No consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality ("Governmental Entity"), is required by or with respect to the
Company or any of its subsidiaries in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby,
except (a) in connection, or in compliance, with the provisions of the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended ("HSR Act"),
other applicable anti-trust regulations and the Exchange Act, (b) applicable
requirements, if any, of The Nasdaq Stock Market, (c) filings with the SEC, (d)
filings with the Israeli Investment Center of the Israeli Ministry of Trade &
Industry (the "Investment Center"), (e) filings with the Office of the Chief
Scientist of the Israeli Ministry of Trade & Industry ("OCS"), (f) filings with
and the approval of the Israeli Commissioner of Restrictive Trade Practices, if
necessary, (g) filings with the Israeli Securities Authority and (h) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings, the failure of which to be obtained or made would not have,
individually or in the aggregate, a Material Adverse Effect. Except as set forth
in the Company Reports and on Section 3.19 of the Company Disclosure Schedule,
as of the date of this Agreement, there is no action, suit or proceeding pending
or, to the company's knowledge, threatened against or affecting the Company at
law or in equity, or before any federal, state, foreign, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
which either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect or prevent consummation of the transactions
contemplated hereby.
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<PAGE> 22
3.20. Product Warranty. There are no existing liabilities or, to the
knowledge of the Company, likely liabilities, arising from claims regarding the
performance or design of the products and services sold by the Company either in
the past or at present for which adequate reserves have not been established on
the most recent balance sheet in the Company Reports that in the aggregate could
reasonably be expected to have a Material Adverse Effect.
3.21. Investment Company. The Company is not an "investment company,"
or an "affiliated person of" or "promoter" or "principal underwriter" of an
investment company, as those terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
3.22. Inapplicability of Certain Statutes. The Company is not subject
to any takeover law that might apply to the Offer or the Compulsory Acquisition
or any of the other transactions contemplated by this Agreement, other than
Section 236 of the Companies' Ordinance and the Exchange Act.
3.23. Banking Arrangements. Section 3.23 of the Company Disclosure
Schedule sets forth the name of each bank in or with which the Company or a
subsidiary has an account, credit line or safety deposit box and the names of
all persons presently authorized to draw thereon or have access thereto, and a
brief statement describing the purpose of each such account.
3.24. Relationships with Related Persons. Except as disclosed in the
Company Reports filed with the SEC prior to the date hereof and except as set
forth and identified on Section 3.24 of the Company Disclosure Schedule and
except for this Agreement and the transactions contemplated hereby, there are
no, and since December 31, 1997 have not been any, undischarged contracts or
agreements or other material transactions between the Company or any of its
subsidiaries, on the one hand, and any director or executive officer of the
Company or any of their respective Related Persons (as defined below), on the
other hand, and no director or executive officer of the Company or any of their
respective Related Persons have any interest in any of the assets of the Company
or any of its subsidiaries. No executive officer, director of the Company or any
of their respective Related Persons has any claim, charge, action or cause of
action against the Company or any of its subsidiaries, except for claims for
accrued vacation pay, accrued benefits under the Benefit Plans (as hereinafter
defined), claims for compensation, expense reimbursement and similar obligations
and similar matters and agreements, which have been disclosed in the Company
Disclosure Schedule.
For purposed hereof, the term "Related Persons" shall mean:
(a) each other member of such individual's Family; and
(b) any person or entity that is directly or indirectly controlled by
any one or more members of such individual's Family. For purposes of this
definition, the "Family" of an individual includes (i) such individual, (ii) the
individual's spouse, siblings, or ancestors (iii) any lineal descendent of such
individual, or their siblings, or ancestors or (iv) a trust for the benefit of
any of the foregoing.
3.25. Restrictions on Business Activities. Except as set forth in the
Company Disclosure Schedule, there is no agreement, judgment, injunction, order
or decree binding upon the Company
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<PAGE> 23
or its subsidiaries or their properties (including, without limitation, their
Intellectual Property) which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any material acquisition of
property by the Company or any of its subsidiaries or the conduct of the
business by the Company or any of its subsidiaries including any exclusive
distribution or licensing agreements which cannot be terminated on less than 30
days notice without any cost or expense to the Company or its subsidiaries.
3.26. Offer Documents; Schedule 14D-9. Neither the Schedule 14D-9 nor
any other document filed or to be filed by or on behalf of the Company with the
SEC or any other governmental entity in connection with the transactions
contemplated by this Agreement nor any information supplied by or on behalf of
the Company specifically for inclusion in the Offer Documents will, at the
respective times filed with the SEC or other governmental entity, or at any time
thereafter when the information included therein is required to be updated
pursuant to applicable law, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Schedule 14D-9 will, when filed by the
Company with the SEC or other governmental entity, comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to the statements made in the foregoing
documents based on information supplied by or on behalf of the Purchaser or any
of its affiliates specifically for inclusion therein.
3.27. Grants, Incentives and Subsidies. Section 3.27 of the Company
Disclosure Schedule provides a complete list of all pending and outstanding
grants, incentives and subsidies (collectively, "Grants") from the Government of
the State of Israel or any agency thereof, or from any foreign governmental or
administrative agency, to the Company, including, without limitation, (i)
Approved Enterprise Status from the Investment Center and (ii) grants from the
OCS. The Company has made available to Purchaser, prior to the date hereof,
correct copies of all applications for Grants submitted by the Company and of
all letters of approval, and supplements thereto, granted to the Company.
Section 3.27 of the Company Disclosure Schedule details all material
undertakings of the Company given in connection with the Grants. Without
limiting the generality of the above, Section 3.27 of the Company Disclosure
Schedule includes the aggregate amounts of each Grant, and the aggregate
outstanding obligations thereunder of the Company with respect to royalties, or
the outstanding amounts to be paid by the OCS to the Company and the composition
of such obligations or amount by the product or product family to which it
relates. The Company is in compliance, in all material respects, with the terms
and conditions of their respective Grants and, except as disclosed in Section
3.27 of the Company Disclosure Schedule hereto, have duly fulfilled, in all
material respects, all the undertakings relating thereto. The Company is not
aware of any event or other set of circumstances which might lead to the
revocation or material modification of any of the Grants.
3.28. Industrial Company. The Company is an "industrial company" as
defined in the Law for the Encouragement of Industry (Taxes) of the State of
Israel, and has been an "industrial company" in each of the years since the
initial public offering of the Company. The founding shareholders of the
Company, Einav Computer Systems, Ltd., an Israeli corporation, and Yossie
Hollander have held their respective Shares in the Company for a period
beginning prior to the Company's initial public offering and ending more than
five years from the date thereof.
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<PAGE> 24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
4.1. Organization and Qualification. Purchaser (a) is duly organized,
validly existing and in good standing under the laws of the state of Delaware,
(b) has all requisite corporate power to carry on its business as it is now
being conducted and (c) is in good standing and duly qualified to do business in
each jurisdiction in which the transaction of its business makes such
qualification necessary, except where the failure to be in good standing or so
qualified would not have a material adverse effect on Purchaser.
4.2. Authorization and Validity of Agreement. Purchaser has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby in accordance with the
terms hereof. The Board of Directors of Purchaser has duly authorized the
execution, delivery and performance of this Agreement by Purchaser, and no other
corporate proceedings on the part of Purchaser are necessary to authorize this
Agreement or the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and, assuming this Agreement constitutes the
legal, valid and binding obligation of the Company, constitutes the legal, valid
and binding obligation of Purchaser, enforceable against each Purchaser in
accordance with its terms, except as may be limited by any bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.3. Consents and Approvals. Neither the execution and delivery of this
Agreement by Purchaser nor the consummation by Purchaser of the transactions
contemplated hereby will require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority
by reason of Purchaser's status or (as applicable) operations, except (a) in
connection with the applicable requirements of the HSR Act, (b) pursuant to the
applicable requirements of the Securities Act of 1933, as amended, the Exchange
Act, and the rules and regulations promulgated thereunder, (c) state securities
or "blue sky" laws and state takeover laws, (d) the applicable requirements of
the laws and regulations of the State of Israel and (e) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not have a material adverse effect on Purchaser or
prevent the consummation of the transactions contemplated hereby.
4.4. No Violation. Neither the execution and delivery of this Agreement
by Purchaser nor the consummation by Purchaser of the transactions contemplated
hereby will conflict with or violate the Certificate of Incorporation or Bylaws
of Purchaser, result in a violation or breach of, constitute (with or without
notice or lapse of time or both) a default under, give rise to any right of
termination, cancellation or acceleration of, or result in the imposition of any
lien, charge or other encumbrance on any material assets or property of
Purchaser pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license or other instrument or obligation to which Purchaser is a party
or
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<PAGE> 25
by which Purchaser or any of its assets or properties are bound, except for such
violations, breaches and defaults (or rights of termination, cancellation or
acceleration or lien or other charge or encumbrance) as to which consents have
been obtained or which would not have a material adverse effect on Purchaser or
prevent the consummation of the transactions contemplated hereby or assuming the
consents, approvals, authorizations or permits and filings or notifications
referred to in Section 4.3 are duly and timely obtained or made, violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Purchaser or any of its assets or properties, except for such violations which
would not have a material adverse effect on Purchaser or prevent the
consummation of the transactions contemplated hereby.
4.5. Litigation. Except as set forth in the documents filed by
Purchaser with the SEC, there are no claims, actions, proceedings or
governmental investigations pending or, to the knowledge of Purchaser,
threatened against Purchaser or any of its subsidiaries before any court or
other governmental or regulatory body, which, if adversely determined, would
impair, interfere with, or otherwise adversely affect the ability of Purchaser
to consummate the transactions contemplated hereby in any material respect. As
of the date hereof, no action or proceeding has been instituted or, to the
knowledge of Purchaser, threatened before any court or other governmental or
regulatory body by any Person seeking to restrain or prohibit or to obtain
damages with respect to the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby.
4.6. Offer Documents; Schedule 14D-9. Neither the Offer Documents nor
any other document filed or to be filed by or on behalf of Purchaser with the
SEC or any other governmental entity in connection with the transactions
contemplated by this Agreement nor any information supplied by or on behalf of
Purchaser specifically for inclusion in the Schedule 14D-9 will, at the
respective times filed with the SEC or other governmental entity, or at any time
thereafter when the information included therein is required to be updated
pursuant to applicable law, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Offer Documents will, when filed by
Purchaser with the SEC or other governmental entity, comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder. Notwithstanding the foregoing, Purchaser makes no
representation or warranty with respect to the statements made in the foregoing
documents based on information supplied by or on behalf of the Company or any of
its affiliates specifically for inclusion therein.
4.7. Brokers and Finders. No broker, finder or investment bank has
acted directly or indirectly for Purchaser, nor has Purchaser incurred any
obligation to pay any brokerage, finder's or other fee or commission in
connection with the transactions contemplated hereby, other than Goldman, Sachs
& Co.
4.8. Ownership of Shares. As of the date of this Agreement, Purchaser
and its subsidiaries do not own any Shares.
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<PAGE> 26
ARTICLE V
COVENANTS
5.1. Conduct of Business Pending the Closing Date. From the date hereof
until the Closing Date, except as otherwise required or contemplated hereunder
or as required by applicable law or as set forth in Section 5.1 of the Company
Disclosure Schedule, the Company shall, and shall cause its subsidiaries to:
(a) use all commercially reasonable efforts to conduct its business and
the business of its subsidiaries in all material respects only in the ordinary
course of business and consistent with past practice;
(b) not amend its Articles of Association or Memorandum of Association
or other organizational or governing documents or declare, set aside or pay any
dividend or other distribution or payment in cash, stock or property in respect
of its capital stock or acquire, directly or indirectly, any of its capital
stock;
(c) not issue, grant, sell or pledge or agree or authorize the
issuance, grant, sale or pledge of any shares of, or rights of any kind to
acquire any shares of, its capital stock other than Shares issuable upon the
exercise of stock options outstanding on the date hereof;
(d) not acquire, sell, transfer, lease or encumber any material assets
except in the ordinary course of business and consistent with past practice;
(e) use all commercially reasonable efforts to preserve intact its
business organizations and the business organizations of its subsidiaries, and
to keep available the services of its present key officers and employees;
provided, however, that to satisfy the foregoing obligation, the Company shall
not be required to make any payments or enter into or amend any contractual
arrangements or understandings, except in the ordinary course of business and
consistent with past practice and that this provision shall not restrict the
Company in any way from terminating the employment of its employees, other than
its present key officers and employees;
(f) not adopt a plan of complete or partial liquidation or adopt
resolutions providing for the complete or partial liquidation, dissolution,
consolidation, amalgamation, merger, restructuring or recapitalization of the
Company or any of it subsidiaries;
(g) not grant any severance or termination pay (otherwise than pursuant
to policies in effect on the date hereof) to, or enter into any employment
agreement with, any of its executive officers or directors;
(h) not, except in the ordinary course of business consistent with past
practice or pursuant to obligations imposed by collective bargaining agreements,
increase the compensation payable or to become payable to its officers or
employees, enter into any contract or other binding commitment in respect of any
such increase with any of its directors, officers or other employees or any
director, officer or other employee of its subsidiaries, and not establish,
adopt, enter into, make any new grants or awards under or amend, any collective
bargaining agreement or Company Plan, except as
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<PAGE> 27
required by applicable law, including any obligation to engage in good faith
collective bargaining, to maintain tax-qualified status or as may be required by
any Company Plan as of the date hereof;
(i) not settle or compromise any material claims or litigation or,
except in the ordinary course of business, modify, amend or terminate any of its
material contracts or waive, release or assign any material rights or claims, or
make any payment, direct or indirect, of any material liability before the same
becomes due and payable in accordance with its terms;
(j) not take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice with respect to
accounting policies or procedures (including tax accounting policies and
procedures), except as may be required by the SEC or the Financial Accounting
Standards Board;
(k) not make any material tax election or permit any material insurance
policy naming it as a beneficiary or a loss payable payee to be canceled or
terminated without notice to Purchaser, except in the ordinary course of
business consistent with past practice;
(l) not incur or pay or agree to pay any fees or expenses that would be
required to be included in Section 3.17 of the Company Disclosure Schedule that
are not so included;
(m) not amend the Director Releases or incur or pay or agree to pay any
amount in excess of $7.5 million (including all legal fees and other expenses of
such directors) in the aggregate plus value added tax as prescribed by law
against a duly issued value added tax invoice, less any amounts required to be
withheld pursuant to applicable tax regulations, pursuant to the Director
Releases; and
(n) not authorize or enter into an agreement to do any of the
foregoing.
5.2. Access; Confidentiality.
(a) From the date of this Agreement until the Closing Date, upon
reasonable prior notice to the Company, the Company shall give Purchaser and its
authorized representatives reasonable access during normal business hours to its
executive officers and such other officers or other representatives of the
Company approved in advance by the Company (which approval shall not be
unreasonably withheld), properties, books and records, and shall furnish
Purchaser and its authorized representatives with such financial and operating
data and other information concerning the business and properties of the Company
as Purchaser may from time to time reasonably request.
(b) Purchaser will hold and treat, and will cause its affiliates,
agents and other representatives to hold and treat, all documents and
information concerning the Company furnished to Purchaser or its respective
representatives in connection with the transactions contemplated by this
Agreement confidential in accordance with the Confidentiality Agreement dated
January 6, 1999, between the Company and Purchaser, which Confidentiality
Agreement shall remain in full force and effect in accordance with its terms.
5.3. Notice of Certain Matters. The Company shall give prompt notice to
Purchaser, and Purchaser shall give prompt notice to the Company, of (a) the
occurrence or nonoccurrence of any
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<PAGE> 28
event that would be likely to cause (i) any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect or (ii) any
covenant, condition or agreement contained in this Agreement not to be complied
with or satisfied in all material respects and (b) any failure of the Company or
of Purchaser, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder in any
material respect.
5.4. Non-Solicitation. Without the prior written consent of the other
party, neither Purchaser nor the Company, will for a period of one year from the
date of this Agreement, solicit or cause to be solicited the employment of any
person who is employed by the other during such time, except as provided for
under the Distribution Agreement, as amended, to which the Company and Boole &
Babbage Europe are a party as of the date hereof.
5.5. Takeover Statutes. The Company and Purchaser will cooperate to
take reasonable steps to (a) exempt the Offer and the purchase of Shares
thereunder from the requirements of any applicable takeover law that would
prevent or delay or adversely impact the Offer or the purchase of Shares
thereunder and (b) assist in any challenge by any of the parties to the validity
or applicability to the Offer and the purchase of Shares thereunder of any such
takeover law.
5.6. Cooperation. Subject to the terms and conditions of this Agreement
and applicable law, each of the parties shall act in good faith and use
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement as soon as
practicable, including such actions or things as any other party may reasonably
request in order to cause any of the conditions to such other party's obligation
to consummate the transactions contemplated by this Agreement to be fully
satisfied. Without limiting the foregoing, the parties shall (and shall cause
their respective subsidiaries, and use reasonable efforts to cause their
respective affiliates, directors, officers, employees, agents, attorneys,
accountants and representatives, to) consult and fully cooperate with and
provide assistance to each other in (a) the preparation and filing with the SEC
of the Offer Documents and the Schedule 14D-9; (b) obtaining all necessary
consents, approvals, waivers, licenses, permits, authorizations, registrations,
qualifications, or other permissions or actions by, and giving all necessary
notices to and making all necessary filings with and applications and
submissions to, any Governmental Entity or other Person as soon as reasonably
practicable after filing, including without limitation (i) the OCS, (ii) the
Investment Center and (iii), if required, the Commissioner of Restrictive Trade
Practices of Israel; (c) seeking early termination of any waiting period under
the HSR Act; (d) providing all such information concerning such party, its
subsidiaries and its officers, directors, partners and affiliates and making all
applications and filings as may be necessary or reasonably requested in
connection with any of the foregoing; (e) in general, consummating and making
effective the transactions contemplated hereby; and (f) in the event and to the
extent required, amending this Agreement so that this Agreement and the Offer
complies with applicable law. The parties shall (and shall cause their
respective affiliates, directors, officers, employees, agents, attorneys,
accountants and representatives to) use their reasonable efforts to cause the
lifting of any permanent or preliminary injunction or restraining order or other
similar order issued or entered by any court or other Governmental Entity
preventing or restricting consummation of the transactions contemplated hereby
in the manner provided for herein. Prior to making any application to or filing
with any Governmental Entity or other Person in connection with this
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<PAGE> 29
Agreement (other than filing under the HSR Act), each party shall provide the
other party with drafts thereof and afford the other party a reasonable
opportunity to comment on such drafts.
5.7. Public Announcements. No party hereto shall or shall permit any of
its subsidiaries to (and each party shall use commercially reasonable efforts to
cause its affiliates, directors, officers, employees, agents or representatives
not to) issue any press release or make any public statement concerning this
Agreement or any of the transactions contemplated hereby, without the prior
written consent of the other parties hereto; provided, however, that a party
may, without the prior written consent of the other party hereto, issue such a
press release or make such a public statement to the extent required by
applicable law or any listing agreement with a national securities exchange by
which such party is bound if it has used commercially reasonable efforts to
consult with the other parties and to obtain such parties' consent but has been
unable to do so in a timely manner.
5.8. Acquisition Proposals.
(a) Subject to Section 5.8(b) below, the Company shall not (and shall
not permit any of its subsidiaries to, and shall use its best efforts to cause
its officers, directors and employees and any investment banker, attorney,
accountant, or other agent retained by it or any of its subsidiaries not to)
directly or indirectly (i) solicit, initiate, facilitate or knowingly encourage
(including by way of furnishing information) any inquiry or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
acquisition or purchase by a third party (other than Purchaser or an affiliate
of Purchaser) of a substantial amount of assets of, or any equity interest in,
the Company or any merger, consolidation, business combination, sale of
securities, recapitalization, liquidation, dissolution or similar transaction
involving the Company (collectively, "Company Transaction Proposals") or agree
to or endorse any Company Transaction Proposal or (ii) propose, enter into or
participate in any discussions or negotiations regarding any Company Transaction
Proposal, or furnish to another person (other than Purchaser or a representative
of Purchaser) any information with respect to its business, properties or assets
for the purpose of facilitating any Company Transaction Proposal. Subject to
Section 5.8(b) below, the Board of Directors of the Company will not change its
recommendation of the Offer referred to in Section 1.2 (a).
(b) Nothing contained in this Section 5.8 or elsewhere in this
Agreement shall prohibit the Company from (i) furnishing information pursuant to
an appropriate confidentiality letter concerning the Company and its businesses,
properties or assets to a third party who has made a Superior Proposal (as
defined below), (ii) engaging in discussions or negotiations with a third party
who has made a Superior Proposal or (iii) following receipt of a Superior
Proposal, taking and disclosing to its shareholders a position (including a
positive recommendation) with respect thereto or changing, withdrawing or
withholding the approval or recommendation by the Company's Board of Directors
of the Offer, but in each case referred to in the foregoing clauses (i) through
(iii) only after the Board of Directors of the Company concludes in good faith
following advice of its independent counsel, evidenced by a written opinion,
that such action is necessary in order for the Board of Directors of the Company
to comply with its fiduciary obligations to the Company's shareholders under
applicable Israeli law. If the Board of Directors of the Company receives a
Company Transaction Proposal, then the Company shall immediately inform
Purchaser of the terms and conditions of such proposal and the identity of the
person making it and shall keep Purchaser fully informed of the status and
details of any such Company Transaction Proposal and of all steps
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it is taking in response to such Company Transaction Proposal. For purposes of
this Agreement, the term "Superior Proposal" shall mean a bona fide Company
Transaction Proposal that the Board of Directors of the Company determines in
good faith after consultation with (and based in part on the advice of) its
independent financial advisors to be more favorable to the Company and the
Company's shareholders than the Offer, which Company Transaction Proposal is not
subject to any material contingencies relating to financing.
(c) If (i) this Agreement is terminated by Purchaser pursuant to
Section 6.1(e)(ii) hereof or by the Company pursuant to Section 6.1(f) hereof,
or (ii) (A) prior to the Closing Date, there is publicly announced by a third
party (other than Purchaser or an affiliate of Purchaser) a proposal for an
Alternative Company Transaction (as defined below); (B) the Offer is terminated
or expires as a result of the failure of a condition specified in Exhibit A
hereto; and (C) either the Company's Board of Directors recommends or approves
an acquisition agreement which provides for an Alternative Company Transaction
or an Alternative Company Transaction is consummated, in each case with any
third party which after the date of this Agreement and before termination of
this Agreement has publicly announced a proposal for Alternative Company
Transaction, in either case prior to twelve months after the date of termination
of this Agreement, then, in any such event unless this Agreement has been
terminated by the Company pursuant to Section 6.1(h), the Company shall pay to
Purchaser simultaneously with termination by the Purchaser in the case of the
occurrence of any of the events specified in clause (i) above, and immediately
upon the first to occur of the entering into an agreement providing for, or the
consummation of, an Alternative Company Transaction in the case of clause (ii)
above (by wire transfer of immediately available funds to an account designated
by Purchaser for such purpose), a fee (the "Break-Up Fee") in an amount equal to
$25.0 million. For purposes of this Paragraph 5.8(c), the term "Alternative
Company Transaction" shall mean any transaction pursuant to which (i) any
person, entity or group (within the meaning of Section 13(d)(3) of the Exchange
Act) (other than Purchaser or any affiliate of Purchaser) (each, a "Third
Party") acquires 50% or more of the outstanding Shares, (ii) a Third Party
acquires 25% or more of the total assets of the Company taken as a whole, (iii)
a Third Party merges, consolidates or combines in any other way with the Company
other than in a transaction in which holders of Shares continue to own at least
75% of the equity of the surviving corporation, or (iv) the Company distributes
or transfers to its shareholders, by dividend or otherwise, assets constituting
25% or more of the market value or earning power of the Company on a
consolidated basis (it being understood that stock of subsidiaries constitute
assets of the Company for purposes of this Paragraph 5.8(c)).
5.9. D&O Indemnification.
(a) From the Closing Date through the later of (i) the sixth
anniversary of the Closing Date and (ii) the expiration of any statute of
limitations applicable to any claim, action, suit, proceeding or investigation
referred to below, the Company shall indemnify and hold harmless each present
and former director and officer of the Company and its subsidiaries, determined
on the Closing Date (the "Indemnified Parties"), against any claims, losses,
liabilities, damages, judgments, fines, fees, costs or expenses, including
without limitation attorneys' fees and disbursements (collectively, "Costs"),
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters existing or occurring on or prior to the Closing
Date, whether asserted or claimed prior to, on or after the Closing Date, to the
fullest extent that the Company or such subsidiary would have
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<PAGE> 31
been permitted, under applicable law, indemnification agreements existing on the
date hereof, the Articles of Association or Memorandum of Association of the
Company or such subsidiary in effect on the date hereof, to indemnify such
Person (and the Company shall also advance expenses as incurred to the fullest
extent permitted under applicable law provided the person to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification).
(b) Any Indemnified Party wishing to claim indemnification under this
Section 5.9, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Company thereof, but the failure to so
notify shall not relieve the Company of any liability or obligation it may have
to such Indemnified Party except, and only to the extent, that such failure
materially prejudices the Company. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before, on or after the Closing
Date), the Company shall have the right to assume the defense thereof and the
Company shall not be liable to such Indemnified Parties for any legal expenses
of other counsel or any other expenses subsequently incurred by such Indemnified
Parties in connection with the defense thereof, except that if the Company
elects not to assume such defense or counsel for the Indemnified Parties advises
that there are issues that raise conflicts of interest between the Company and
the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory
to them, and the Company shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor are
received. If such indemnity is not available with respect to any Indemnified
Party, then the Company and the Indemnified Party shall contribute to the amount
payable in such proportion as is appropriate to reflect relative faults and
benefits. In the event that any claim or claims are asserted or made within the
aforesaid six-year period, all rights to indemnification in respect of any such
claim or claims shall continue until the final disposition of any and all such
claims.
(c) Notwithstanding anything herein to the contrary, if any claim,
action, suit, proceeding or investigation (whether arising before, on or after
the Closing Date) is made against any present or former director or officer of
the Company, on or prior to the sixth anniversary of the Closing Date, the
provisions of this Section 5.9 shall continue in effect until the final
disposition of such claim, action, suit, proceeding or investigation.
(d) This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the Indemnified Parties and their respective heirs and
legal representatives. The indemnification provided for herein shall not be
deemed exclusive of any other rights to which an Indemnified Party is entitled,
whether pursuant to law, contract or otherwise.
(e) To the extent that the Company fails to perform any of its
obligations pursuant to this Section 5.9, Purchaser shall assume the obligations
and rights of the Company under this Section 5.9.
5.10. Purchaser Plans.
(a) Following the Closing Date, Purchaser shall cause the Company to
provide to persons who were employees of the Company or any of its subsidiaries
prior to the Closing Date (the "Company Personnel") employee benefit plans,
programs and arrangements (the "Purchaser Plans")
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<PAGE> 32
which in the aggregate are substantially comparable to those employee benefit
plans, programs and arrangements generally provided to similarly situated
employees of Purchaser from time to time.
(b) Following the Closing Date, Purchaser shall cause the Purchaser
Plans to recognize any prior accrued service, compensation credit, credit toward
satisfying deductible expense requirements, out-of-pocket expense limits and
maximum lifetime benefit limits of such Company Personnel and/or such Company
Personnel's eligible dependents, to the extent such prior service, credits and
limits were recognized under the comparable employee benefit plans, programs or
arrangements of the Company on the Closing Date, for all purposes under the
Purchaser Plans (including, but not limited to, participation, eligibility,
vesting and the calculation of benefits), and Purchaser shall cause the
Purchaser Plans to waive any preexisting condition, exclusion or limitation
under any such Plan to the extent such condition, exclusion or limitation would
be covered by the comparable plan, program or arrangement of the Company on the
Closing Date.
(c) Each of the employment agreements, the employment security
agreements and severance agreements for the benefit of Company Personnel
identified in Section 5.10 of the Company Disclosure Schedule shall be continued
by the Company on the Closing Date on the same terms and subject to the same
conditions as in effect under such agreements immediately prior to the Closing
Date.
5.11. Purchaser Stock Options. Immediately after the Closing Date,
Purchaser will issue, to senior management and key employees of the Company, as
shall be mutually agreed between the senior officers of the Company and
Purchaser, stock options to purchase an aggregate of 500,000 shares of Purchaser
common stock under its stock option plan, vesting ratably over five years, under
agreements in customary form utilized for Purchaser's employees.
5.12. Israeli Operations. Following the Closing Date, Purchaser intends
that the Company will continue as a legal entity, with the same name, engaged in
the development, production, marketing and distribution of the software products
of the Company and that the business operations and facilities of the Company
(including its research and development activities) remain in Israel.
5.13. Boole & Babbage Shares. Purchaser shall use its reasonable
efforts to cause Boole & Babbage, Inc. to tender any shares held by it into the
Offer.
ARTICLE VI
TERMINATION
6.1. Termination. This Agreement may be terminated and the Offer may be
abandoned at any time, prior to the Closing Date:
(a) by mutual written consent of the Company and Purchaser;
(b) by either the Company or Purchaser, if the Closing Date shall not
have occurred on or before September 12, 1999; provided, that either the Company
or the Purchaser may terminate this Agreement if (i) the Closing Date shall not
have occurred on or before July 12, 1999, and (ii) within 10 days of expiration
of the initial Offer hereunder, Purchaser has not elected to commence
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<PAGE> 33
a new Offer pursuant to Section 7.12 hereof; and provided, further that the
right to terminate this Agreement under this clause (b) shall not be available
to any party whose misrepresentation in this Agreement or whose failure to
perform any of its covenants and agreements or to satisfy any obligation under
this Agreement has been the cause of or resulted in the failure of the Closing
Date to occur on or before the applicable dates specified herein;
(c) by either the Company or Purchaser, if any federal or state court
of competent jurisdiction or other federal or state governmental or regulatory
body shall have issued any judgment, injunction, order or decree prohibiting,
enjoining or otherwise restraining the transactions contemplated by this
Agreement and such judgment, injunction, order or decree shall have become final
and nonappealable (provided, however, that the party seeking to terminate this
Agreement pursuant to this clause (c) shall have used commercially reasonable
efforts to remove such judgment, injunction, order or decree) or if any statute,
rule, regulation or executive order promulgated or enacted by any federal or
state governmental authority after the date of this Agreement which prohibits
the consummation of the Offer shall be in effect;
(d) by the Company, if (i) Purchaser fails to commence the Offer as
provided in Section 1.1 other than as a result of any action by the Company in
violation of this Agreement, (ii) the Offer expires or is terminated without any
Shares being purchased thereunder and Purchaser does not commence a new Offer
pursuant to Section 7.12 or (iii) Purchaser fails to purchase validly tendered
Shares in violation of the terms and conditions of the Offer or this Agreement;
(e) by Purchaser, if (i) the Offer is not commenced as provided in
Section 1.1 directly as a result of actions or inaction by the Company in
violation of this Agreement, (ii) the Company's Board of Directors shall have
withdrawn, withheld or modified in a manner adverse to Purchaser its approval of
this Agreement or the Offer pursuant to Section 5.8 or (iii) the Offer is
terminated or expires as a result of the failure of a condition specified in
Exhibit A hereto without the purchase of any Shares thereunder, unless such
termination or expiration has been caused by or resulted from the failure of
Purchaser to perform any covenants and agreements of Purchaser contained in this
Agreement;
(f) by the Company, if its Board of Directors shall have withdrawn,
withheld or modified in a manner adverse to Purchaser its approval of this
Agreement or the Offer in accordance with Section 5.8 and paid to Purchaser the
Break-Up Fee;
(g) by Purchaser, if there shall have been a material breach of any
representation, warranty or material covenant or agreement on the part of the
Company, which is incurable or which is not cured after thirty days' written
notice by Purchaser to the Company; or
(h) by the Company, if there shall have been a material breach of any
representation, warranty or material covenant or agreement on the part of
Purchaser, which is incurable or which is not cured after thirty days' written
notice by the Company to Purchaser.
6.2 Effect of Termination. In the event of any termination of this
Agreement pursuant to Section 6.1, this Agreement forthwith shall become void
and of no further force or effect, and no party hereto (or any of its
affiliates, directors, officers, agents or representatives) shall have any
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<PAGE> 34
liability or obligation hereunder, except in any such case (a) as provided in
Sections 5.2(b) (Confidentiality), 5.4 (Non-Solicitation), 5.7 (Public
Announcements), and 6.3 (Fees and Expenses), which shall survive any such
termination and (b) to the extent such termination results from the breach by
such party of any of its representations, warranties, covenants or agreements
contained in this Agreement.
6.3. Fees and Expenses. Whether or not the Offer or is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including, without limitation, fees and
disbursements of counsel, financial advisors and accountants) shall be borne by
the party which incurs such cost or expense.
ARTICLE VII
MISCELLANEOUS
7.1. No Survival. None of the representations, warranties, covenants or
agreements contained in this Agreement or in any certificate or other instrument
delivered pursuant to this Agreement shall survive the Closing Date, except for
the covenants and agreements contained in Sections 5.9 (D&O Indemnification and
Insurance), 5.10 (Company Plans), and 5.11 (Purchaser Stock Options.)
7.2. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) or sent by facsimile (with immediate
confirmation) or nationally recognized overnight courier service, as follows:
(a) if to Purchaser, to:
BMC Software, Inc.
2101 CityWest Blvd.
Houston, Texas
Attention: Brinkley Morse
Fax: (713) 918-8000
with a copy to:
John S. Watson
Vinson & Elkins L.L.P.
2300 First City Tower
Houston, Texas 77002
Fax: (713) 758-2346
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<PAGE> 35
Yaakov Neeman
Herzog, Fox & Neeman
Asia House
4 Weizmann Street
Tel-Aviv 64 239
Israel
Fax: 972-3-696-6464
(b) if to the Company, to:
New Dimension Software, Ltd.
ATIDIM, Building 7
POB 85168
Tel Aviv 61 581
Israel
Fax: 972-3-645-1100
with a copy to:
David Fox
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Fax: (212) 735-2000
Michael Spigelman
Dan Cohen, Spigelman & Co.
103 Hahashmonaim St.
Israel
Fax: 972-3-561-0624
or to such other Person or address or facsimile number as any party shall
specify by like written notice to the other parties hereto (any such notice of a
change of address to be effective only upon actual receipt thereof).
7.3. Certain Definitions. The following terms, when used in this
Agreement, shall have the following respective meanings:
(a) "affiliate" shall have the meaning assigned to such term in Rule
12(b)-2 of the Exchange Act.
(b) "business day" shall have the meaning set forth in Rule 14d-1(e)(6)
under the Exchange Act.
(c) "dollars" or "$" means United States dollars.
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<PAGE> 36
(d) "Material Adverse Effect" means, any change or effect that is
materially adverse to the business or financial condition, assets, liabilities
or results of operations of the Company and its subsidiaries taken as a whole.
(e) "Person" means any natural person, corporation, limited liability
company, partnership, unincorporated organization or other entity.
(f) "subsidiary" of any Person means any other corporation or entity of
which such Person owns, directly or indirectly, stock or other equity interests
having a majority of the votes entitled to be cast in the election of directors
of such corporation or entity under ordinary circumstances or of which such
Person owns a majority beneficial interest.
7.4. Entire Agreement. This Agreement (including the schedules,
exhibits and other documents referred to herein), together with the
Confidentiality Agreement referred to in Section 5.2(b), constitutes the entire
agreement between and among the parties hereto and supersedes all prior
agreements and understandings, oral and written, between or among any of the
parties with respect to the subject matter hereof.
7.5. Assignment; Binding Effect. Neither this Agreement nor any of the
rights, benefits or obligations hereunder may be assigned, in whole or in part,
by any party (whether by operation of law or otherwise) without the prior
written consent of the other parties hereto. Subject to the preceding sentence,
this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, other than
rights conferred upon Indemnified Parties under Section 5.9.
7.6. Amendments. This Agreement may be amended by the parties at any
time prior to the Closing Date.
7.7. Waivers. At any time prior to the Closing Date, Purchaser or the
Company may, to the extent legally allowed, extend the time specified herein for
the performance of any of the obligations or other acts of the other, waive any
inaccuracies in the representations and warranties of the other contained herein
or in any document delivered pursuant hereto, or waive compliance by the other
with any of the agreements or covenants of such other party or parties (as the
case may be) contained herein. Any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of the party or parties to
be bound thereby. No such extension or waiver shall constitute a waiver of, or
estoppel with respect to, any subsequent or other breach or failure to strictly
comply with the provisions of this Agreement. The failure of any party to insist
on strict compliance with this Agreement or to assert any of its rights or
remedies hereunder or with respect hereto shall not constitute a waiver of such
rights or remedies.
7.8. Captions. The Table of Contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
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<PAGE> 37
7.9. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument.
7.10. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
7.11. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, without regard to
any applicable principles of conflicts of law; provided, however, that matters
relating to the duties of the directors of the Company and issues governed by
the Companies Ordinance shall be governed by the laws of the State of Israel.
7.12. New Offer. In the event the original Offer expires as a result of
any or all of the conditions to the Offer set forth in paragraphs (1), (2), (3),
(4), (5), (6)(a) and (6)(b) of Exhibit A not being been fulfilled, Purchaser
shall have the right to commence a new Offer within 10 days of such expiration.
Such new Offer shall be conducted on the same terms as the original Offer, and
the terms of this Agreement shall in all respects apply to such new Offer in the
same manner as it applied to the original Offer except where the context
indicates otherwise.
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<PAGE> 38
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NEW DIMENSION SOFTWARE LTD.
[NEW DIMENSION SOFTWARE LOGO] By: /s/ RONI A. EINAV
-------------------------------------
Name: Roni A. Einav
Title: Chairman
By: /s/ DAN BARNEA
-------------------------------------
Name: Dan Barnea
Title: CEO
BMC SOFTWARE, INC.
By:/s/ M. BRINKLEY MORSE
-------------------------------------
Name: M. Brinkley Morse
Title: Senior Vice President
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<PAGE> 39
EXHIBIT A
CONDITIONS TO THE OFFER
Capitalized terms used in this Exhibit A shall have the meanings
assigned to them in the Agreement to which it is attached (the "Tender
Agreement").
Purchaser shall not be required to accept for payment, purchase or pay
for any Shares tendered and Purchaser may terminate or, subject to the terms and
conditions of the Tender Agreement, amend the Offer as to any Shares not then
accepted for payment, shall not be required to accept for payment or pay for any
Shares, or may delay the acceptance for payment of Shares tendered, if:
(1) at the expiration of the Offer, the number of Shares validly
tendered and not withdrawn shall not constitute at least 90% of the then
outstanding Shares not owned by Purchaser determined in accordance with Section
236 of the Companies Ordinance;
(2) at the expiration of the Offer, all material filings required to be
made prior to the Closing Date with, and all material consents, approvals,
permits and authorizations required to be obtained prior to the Closing Date
from, governmental and regulatory authorities in connection with the Offer and
the consummation of the other transactions contemplated hereby which are listed
in Section 3.19 of the Tender Agreement shall not have been made or obtained, as
the case may be, or the expiration of any applicable waiting periods required by
the governmental or regulatory authorities listed in Section 3.19 of the Tender
Agreement shall not have occurred;
(3) the Shareholder Approvals shall not have been obtained at the
Special Meeting;
(4) the Company shall not have obtained agreements from the holders of
all Company Options in accordance with Section 2.1(a) of the Tender Agreement
permitting the cancellation of such Company Options on the Closing Date in
accordance with Section 2.1(a) thereof; provided, however, that the foregoing
shall not require the Company to have obtained such an agreement from any holder
of a Company Option (other than a holder of an option to purchase capital stock
of any subsidiary of the Company) who is not employed by the Company or its
subsidiaries at the Closing Date;
(5) the Director Releases shall not have become effective in accordance
with their terms; or
(6) at any time after the date of the Tender Agreement and prior to the
acceptance for payment of Shares, any of the following events shall occur:
(a) there shall have been any action or proceeding brought by
any governmental authority before any court, or any order or
preliminary or permanent injunction entered in any action or proceeding
before any court or governmental, administrative or regulatory
authority or agency, located or having jurisdiction within the United
States or State of Israel, or any other action taken, proposed or
threatened, or statute, rule, regulation, legislation, interpretation,
judgment or order proposed, sought, enacted, entered, enforced,
promulgated,
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<PAGE> 40
amended, issued or deemed applicable to Purchaser, the Company or any
subsidiary or affiliate of Purchaser or the Company or the Offer, by
any legislative body, court, government or governmental, administrative
or regulatory authority or agency located or having jurisdiction within
the United States or the State of Israel, which could reasonably be
expected to have the effect of: (i) making illegal, materially delaying
or otherwise restraining or prohibiting the Offer or the acquisition by
Purchaser of any Shares or the Compulsory Acquisition; (ii) prohibiting
or materially limiting the ownership or operation by Purchaser or its
affiliates of any material portion of the business or assets of the
Company or compelling Purchaser to dispose of or hold separate all or
any material portion of the business or assets of the Company, in each
case as a result of the transactions contemplated by the Tender
Agreement; (iii) imposing material limitations on the ability of
Purchaser or any of its affiliates to exercise full rights of ownership
of the Shares, including, without limitation, the right to vote any
Shares purchased by them on all matters properly presented to the
shareholders of the Company; or (iv) preventing Purchaser or any of its
affiliates from acquiring, or to require divestiture by Purchaser or
any of its affiliates of, any Shares in the Offer; or
(b) there shall have occurred (i) any general suspension of,
or limitation on prices for, trading in securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) the declaration of any banking moratorium or any
suspension of payments in respect of banks or any limitation (whether
or not mandatory) on the extension of credit by lending institutions in
the United States, or (iii) the commencement of a war, material armed
hostilities or any other material international or national calamity
involving the United States or the State of Israel and, in the case of
armed hostilities involving Israel, having, or which could reasonably
be expected to have, a substantial continuing general effect on
business and financial conditions in Israel; or
(c) any Person, entity or "group" (as such term is used in
Section 13(d)(3) of the Exchange Act) other than Purchaser or any of
its affiliates shall have become the beneficial owner (as that term is
used in Rule 13d-3 under the Exchange Act) of more than 50% of the
outstanding Shares; or
(d) (i) the Company shall have breached or failed to comply in
any material respect with any of its obligations under the Tender
Agreement (which breach, if curable, has not been cured within thirty
(30) days following receipt of written notice thereof by Purchaser
specifying in reasonable detail the basis of such alleged breach), (ii)
or any representation or warranty of the Company contained in the
Tender Agreement shall not have been true and correct as of such time,
except (x) for changes specifically permitted or contemplated by the
Tender Agreement; or (y) where the failure of representations and
warranties (without giving effect to any limitation based on
materiality or Material Adverse Effect or words of similar effect set
forth therein) to be true and correct would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect; or
(e) there shall have occurred a Material Adverse Effect, other
than as a result of the transactions specifically contemplated by the
Tender Agreement; or
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<PAGE> 41
(f) the Tender Agreement shall have been terminated pursuant
to its terms or amended pursuant to its terms to provide for such
termination of the Offer;
which, in the good faith judgment of Purchaser makes it inadvisable to proceed
with the Offer or with acceptance for payment or payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted or waived by Purchaser in whole or in part at any time or from time
to time in its discretion subject to the terms and conditions of the Tender
Agreement. The failure of Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. The Company will deliver to the Purchaser such evidence as Purchaser shall
reasonably request to evidence satisfaction of any of the conditions set forth
above, including certificates executed by officers of the Company.
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<PAGE> 42
EXHIBIT 1.2(B)
FORM OF AMENDMENT TO ARTICLES OF ASSOCIATION
"To amend the Company's Articles of Association by adding, after
Article 39, a new Article marked 39A with the following language:
39A. Without derogating from the provisions of Article 39 and
in addition thereto, the holders of no less than 60% (sixty percent) of
all the issued and outstanding Ordinary shares of the Company, may
appoint and remove the Directors of the Company, by a written notice to
the Company, and Directors appointed by such a written notice of the
holders of no less than 60% (sixty percent) of all the issued and
outstanding Ordinary shares of the Company, shall be deemed elected at
the most Recent General Meeting of shareholders held prior to such
appointment by a written notice provided for above, and the provisions
of Article 39 shall apply mutatis mutandis."
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<PAGE> 43
EXHIBIT B
FORM OF OPTION CANCELLATION
AND RELEASE AGREEMENT
This Option Cancellation and Release Agreement (the "Agreement") is
entered into effective as of the date set forth below by and between New
Dimension Software Ltd., an Israeli corporation (the "Company"), and the
individual named on the signature page hereof ("Employee").
W I T N E S S E T H:
WHEREAS, effective ___________, 199__, the Company established its
[Stock Option Plan][Revise as appropriate for EagleEye Plan] (the "Plan"); and
WHEREAS, pursuant to the Plan and the stock option agreement or
agreements (and, if applicable, amendments thereto) entered into by and between
the Company and Employee, copies of which are attached hereto as Exhibit A and
incorporated by reference herein (the "Stock Option Agreements"), Employee has
been granted the option to purchase ordinary shares, par value NIS 0.01 per
share ("Shares") of the Company [revise as appropriate for EagleEye options],
subject to the satisfaction of certain events and conditions as set forth in the
Stock Option Agreements; and
WHEREAS, the Company and BMC Software, Inc., a Delaware corporation
("Purchaser"), have entered into a Stock Purchase and Tender Agreement (the
"Tender Agreement"), which provides for, among other things, the acquisition by
Purchaser of Shares by means of a cash tender offer (the "Offer") being made by
means of an Offer to Purchase dated March 7, 1999, a copy of which has been
delivered to Employee; and
WHEREAS, in connection with the Offer, Purchaser, the Company and
Employee desire to provide for cancellation of the options held by Employee
subject to and effective upon the purchase by Purchaser of Shares pursuant to
the Offer (the "Closing Time") in exchange for the cash payment described
herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, the parties, intending to be legally bound hereby,
agree as follows:
1. Options. The parties acknowledge that Employee has been granted the
option to purchase shares of the common stock of the Company as set forth on the
signature page hereof, subject to the satisfaction of certain events and
conditions as set forth in the respective Stock Option Agreements (the
"Options").
2. Payment in Exchange for Cancellation of Options.
(a) Subject to and effective as of the Closing Time, the Company
agrees to make a payment (the "Payment") to Employee in settlement and
cancellation of all of the Options held by Employee as of the Closing Time,
which Payment shall be in cash in U.S. dollars in an amount equal
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<PAGE> 44
to, for each Share subject to such Options, regardless of whether such Option
has vested or is then exercisable with respect to such Share, the positive
difference, if any, between the Per Share Amount (as defined in the Tender
Agreement, which means $52.50 per Share as may be adjusted upward in connection
with the Offer pursuant to the Tender Agreement) and the exercise price per
share of such Options specified on the signature page hereof. [Note - to be
adjusted appropriately in the case of EagleEye options in accordance with
Section 2.1(a) of the Tender Agreement]
(b) The Payment to Employee as described herein shall be reduced by all
applicable withholding taxes, which shall mean all taxes required by any
governmental entity to be withheld by the Company.
(c) If the Tender Agreement is terminated or the Closing Time does not
occur prior to September 12, 1999, then this Agreement shall terminate and be of
no further force and effect.
3. Release. Employee hereby releases, acquits and forever discharges
the Company, its subsidiaries, and all officers, directors, shareholders,
agents, affiliates, subsidiaries, employees, attorneys, successors and assigns
of the foregoing from all actions, causes of action, suits, debts, liens,
contracts, agreements, obligations, promises, liabilities, claims of any nature,
whatsoever (whether in tort, contract, under laws or statutes), rights, demands,
damages, losses, costs and expenses (including attorneys' fees, court costs or
other costs or expenses actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, fixed or contingent, that have accrued or
which may accrue on account of, arising out of, or in any way related to the
Options canceled hereunder.
4. Israeli Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Israel, without giving effect to the
principles of conflicts of law thereof.
5. Entirety. This Agreement contains the entire Agreement of the
parties and supersedes all prior negotiations and understandings with respect to
the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date set forth below.
NEW DIMENSION SOFTWARE LTD.
By:
----------------------------------
Name:
Title:
EMPLOYEE
-------------------------------------
Printed name:
-2-
<PAGE> 45
Date:
---------------------------
Number of Shares subject to Options:
----------
Exercise Price:
---------------------
-3-
<PAGE> 46
Exhibit A
to Option Cancellation and Release Agreement
Stock Option Agreements
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<PAGE> 1
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT, dated as of March 7, 1999 (this
"Agreement"), is made and entered into between BMC Software, Inc., a Delaware
corporation ("Purchaser") and Yossie Hollander (the "Shareholder").
WITNESSETH
WHEREAS, concurrently herewith, Purchaser and New Dimension Software
Ltd., an Israeli corporation (the "Company"), are entering into a Share Purchase
and Tender Agreement (as such agreement may hereafter be amended from time to
time, the "Tender Agreement"); and
WHEREAS, as an inducement and a condition to entering into the Tender
Agreement, Purchaser has required that Shareholder agree, and Shareholder has
agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein and the
benefits to be received by the parties under the terms of the Tender Agreement,
the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
(a) Capitalized terms used and defined herein shall have the respective
meanings ascribed to them in the Tender Agreement. For purposes of this
Agreement:
(i) "Alternative Disposition" shall have the meaning ascribed
to such term in Article IV.
(ii) "Alternative Transaction Consideration" shall mean all
cash, securities, settlement or termination amounts, notes or other debt
instruments, and other consideration received or to be received, directly or
indirectly, by Shareholder and his affiliates in connection with or as a result
of an Alternative Disposition or any agreements or arrangements (including,
without limitation, any employment agreement, consulting agreement,
non-competition agreement, confidentiality agreement, settlement agreement or
release agreement) entered into, directly or indirectly, by Shareholder or his
affiliates (excluding officers and directors of Company) as a part of or in
connection with the Alternative Disposition or Company Transaction Proposal.
(iii) "Applicable Shares " means all Shares that are
Beneficially Owned by the Shareholder or that become Beneficially Owned by the
Shareholder prior to the Termination Date.
<PAGE> 2
(iv) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean bearing "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include (i) securities
Beneficially Owned by all other Persons (who are affiliates of such Person
excluding officers and directors of Company) who together with such Person would
constitute a "group" within the meaning of Section 13(d)(3) of the Exchange Act
and (ii) securities Beneficially Owned by that Person's spouse and children.
(v) "90% Condition" shall be such condition as set forth in
paragraph (1) of Exhibit A to the Tender Agreement.
(vi) "Offer Termination Date" shall mean the date the Offer
terminates or expires without the purchase of Shares thereunder; provided,
however, that if Purchaser initiates a new Offer under the terms of the Tender
Agreement on or before midnight, central time in the United States on the 10th
day following such date, the Offer Termination Date shall mean the date such
subsequent Offer terminates or expires without the purchase of Shares
thereunder; provided, however, that the Offer Termination Date will not be later
than the date of termination of the Tender Agreement.
(vii) "Per Share Amount" shall mean the price per Share of the
Offer as set forth in Section 1.1 of the Tender Agreement, as such price may be
increased in accordance with the Tender Agreement.
(viii) "Purchase Option" shall have the meaning ascribed to
such term in Section 3.1.
(ix) "Termination Date" shall mean the date ending on the
first to occur of:
(1) the Closing Date;
(2) the Offer Termination Date; or
(3) midnight, central time in the United States, on
the date all of the conditions to the Offer set forth in Exhibit A to the Tender
Agreement have been satisfied, except for the conditions set forth in paragraphs
(6)(d)(ii) or (6)(e), and Purchaser elects to terminate the Tender Agreement
without the purchase of Shares thereunder; provided, however, that,
notwithstanding subparagraphs (2) and (3) above, if after the date of this
Agreement (x) any person, entity or group (within the meaning of Section
13(d)(3) of the Exchange Act) (other than the Purchaser or any affiliate of
Purchaser) acquires more than 5% or more of the outstanding Shares and fails to
tender such Shares in the Offer and continues to hold such Shares and the Offer
is terminated as a result of the failure of the 90%Condition to be satisfied,
the Termination Date shall be the date 150 days after the Offer Termination
Date, or (y) there is a public
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announcement of, or the disclosure to the management, board of directors,
shareholders or advisors of the Company of, a Company Transaction Proposal, and
the board of directors of the Company rejects such Company Transaction Proposal
and continues to recommend the Offer and the Offer is terminated as a result of
the failure of the 90%Condition to be satisfied, the Termination Date shall be
the date 120 days after the Offer Termination Date, or (z) there is a public
announcement of, or the disclosure to the management, board of directors,
shareholders or advisors of the Company of, a Company Transaction Proposal, and
the board of directors of the Company withdraws, withholds or modifies in a
manner adverse to Purchaser its approval of the Tender Agreement or the Offer
pursuant to Section 5.8 of the Tender Agreement, and the Offer is terminated as
a result of the failure of the 90%Condition to be satisfied, the Termination
Date shall be the date 150 days after the Offer Termination Date.
(x) "Underlying Shares" shall mean the Shares issuable to
Shareholder upon the exercise by Shareholder of Company Options, if any,
Beneficially Owned by him.
ARTICLE II
VOTING AND TENDER
MATTERS
2.1 Voting and Tender Matters.
(a) From and after the date of this Agreement and ending as of
the Termination Date, at any meeting of the holders of Shares however called, or
in any other circumstance upon which the vote, consent or other approval of
holders of Shares is sought, Shareholder shall vote (or cause to be voted) his
issued and outstanding Applicable Shares:
(i) against any action or agreement that would result
in a breach in any material respect of any covenant, representation or warranty
or any other material obligation or agreement of Company under the Tender
Agreement or this Agreement;
(ii) against the following actions (other than the
transactions contemplated by the Tender Agreement):
(A) any Company Transaction Proposal, and
(B) to the extent that such (1) are intended
to, or could reasonably be expected to, impede, interfere with, delay, postpone,
or materially adversely affect the Offer, or the transactions contemplated by
the Tender Agreement or this Agreement or (2) are intended to, or could
reasonably be expected to, implement or lead to any Company Transaction
Proposal: (x) any change in a majority of the persons who constitute the board
of directors of Company; (y) any change in the present capitalization of Company
or any amendment of Company's Memorandum and Articles of Association (other than
as expressly contemplated by the Tender Agreement); or (z) any other material
change in Company's corporate structure or business; and
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<PAGE> 4
(iii) for the proposals to:
(A) approve the right of the directors of
the Company to sell their Shares to the Purchaser pursuant to the Offer and the
transactions contemplated thereby,
(B) approve an amendment to the Company's
Articles of Association to provide that the holders of at least 60% of the
issued and outstanding Shares of the Company shall be entitled to appoint and
remove any and all members of the Board of Directors of the Company, by means of
a written notice signed by such holders of the Company, and
(C) approve any and all other matters
contemplated by the Tender Agreement and presented at the Special Meeting.
(b) Shareholder hereby grants to, and appoints, Purchaser and
any nominee thereof, its proxy and attorney-in-fact (with full power of
substitution), from and after the date of this Agreement and ending as of the
Termination Date, to vote his Applicable Shares, or to grant a consent or
approval in respect of his Applicable Shares on any and all matters relating to
the Tender Agreement, the Offer or any Company Transaction Proposal. Shareholder
intends such proxy to be irrevocable and coupled with an interest and will take
such further action or execute such other instruments as may be necessary to
effectuate the intent of this proxy and hereby revokes any proxy previously
granted by Shareholder with respect to his Applicable Shares.
(c) From and after the date of this Agreement and ending as of
the Termination Date, Shareholder shall not take any action (including the
tender of any Shares) that could reasonably be expected to, implement or lead to
any Company Transaction Proposal.
2.2 Tender Agreement and Company Options.
(a) Shareholder hereby agrees that he shall (i) tender all of
his Applicable Shares into the Offer promptly, and in any event no later than
the third business day following the commencement of the Offer, and (ii) not
withdraw any Applicable Shares so tendered prior to the Offer Termination Date;
provided, however, that Shareholder may delay the tender of up to 75,000 of his
Shares until notified by Purchaser that such tender is required by Purchaser.
(b) In the event that (i) the 90 % Condition is not satisfied,
(ii) Purchaser notifies Shareholder that Purchaser is prepared to close the
Offer but for the fact that the 90 % Condition is not satisfied, and (iii) the
tender by Shareholder of the Underlying Shares, either alone or when aggregated
with other Company Options, would cause the 90 % Condition to be satisfied, then
Shareholder hereby agrees that, at any time prior to the Termination Date,
immediately upon the request of Purchaser, he shall exercise all Company Options
Beneficially Owned by him and immediately tender the Underlying Shares received
upon such exercise into the Offer (and not withdraw such Underlying Shares so
tendered). Purchaser shall advance to Shareholder the funds
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<PAGE> 5
necessary to pay the exercise price of such Options, and Shareholder shall repay
Purchaser the amount of such advance, without interest, immediately upon receipt
of the Per Share Amount by him for his Underlying Shares.
(c) Except as may be required by Section 2.2(b), Shareholder
hereby agrees that he shall not exercise any Company Options that he
Beneficially Owns.
ARTICLE III
PURCHASE OPTION
3.1 Grant of the Purchase Option. Shareholder hereby grants to
Purchaser an irrevocable option (the "Purchase Option") to purchase, on the
terms and subject to the conditions set forth herein, at the Per Share Amount
all his Applicable Shares.
3.2 Exercise of the Purchase Option.
(a) Subject to the conditions set forth in Section 3.3, the
Purchase Option may be exercised in whole at any time, and in part from time to
time, from and after the Offer Termination Date and ending as of the Termination
Date; provided, however, that in the event Purchaser exercises its Purchase
Option hereunder it shall exercise its Purchase Option in a proportionate amount
under that certain Shareholder Agreement with Einav Computer Systems Ltd., Roni
A. Einav and Dalia Prashker-Katzman of even date herewith entered into in
connection with the Tender Agreement.
(b) In the event Purchaser wishes to exercise the Purchase
Option, Purchaser will send a written notice to Shareholder specifying a place,
date (not less than two business days nor more than 10 calendar days after the
date such notice is given) and time for the closing of the purchase of such
Shares (the "Closing").
(c) The purchase price payable to Shareholder with respect to
any exercise of the Purchase Option will be the product of (i) the Per Share
Amount and (ii) the number of Applicable Shares to be purchased upon such
exercise.
3.3 Closing.
(a) At the Closing, Shareholder will deliver to Purchaser a
certificate or certificates representing the Shares being purchased, duly
endorsed for transfer or accompanied by appropriate stock powers duly executed
in blank, and Purchaser will pay the purchase price in immediately available
funds by wire transfer to an account designated by Shareholder. Transfer taxes,
if any, imposed as a result of the exercise of the Purchase Option and the
transfer of any Applicable Shares will be paid by Shareholder.
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<PAGE> 6
(b) The obligation of Purchaser and Shareholder to consummate
the purchase and sale of the Applicable Shares pursuant to this Article III will
be subject to the fulfillment of the following conditions:
(i) the expiration or termination of the waiting
period applicable to the consummation of such transactions under the HSR Act and
any other applicable antitrust laws; and
(ii) none of the parties hereto shall be subject to
any order or injunction of a court of competent jurisdiction which prohibits the
consummation of such transactions.
(c) The obligations of Shareholder pursuant to this Article
III shall also be subject to Purchaser not violating any of its material
obligations under the Tender Agreement.
Each of the parties will promptly make and will use all reasonable efforts to
cause each of their respective affiliates to make, all such filings and take all
such actions as may be reasonably required in order to permit the lawful
exercise of the Purchase Option, as promptly as possible. The date of any
Closing may be extended, if required, to the next business day following (1) the
date that any applicable waiting period(s) under the HSR Act and any other
applicable antitrust laws shall have expired or been earlier terminated, (2) the
date that all other necessary governmental approvals for the sale of the Shares
for which the Purchase Option shall have been exercised shall have been
obtained, and (3) the satisfaction of any other condition to the Closing under
the Tender Agreement.
ARTICLE IV
CAPTURE
4.1 Capture. In the event that the Applicable Shares of
Shareholder are sold, transferred, exchanged, canceled or disposed of in
connection with or as a result of any Company Transaction Proposal that is in
existence on, or that has been otherwise made prior to the Termination Date (an
"Alternative Disposition") then, within five business days after the closing of
such Alternative Disposition, Shareholder shall tender and pay to, or shall
cause to be tendered and paid to, Purchaser (or its designee), in immediately
available funds, the Profit realized from such Alternative Disposition, less any
withholdings.
4.2 Profit. As used in this Article IV, "Profit" shall mean an
amount equal to the excess, if any, of (a) the Alternative Transaction
Consideration over (b) the Per Share Amount multiplied by Shareholder's
Applicable Shares sold, transferred, exchanged, canceled or disposed of in such
Alternative Disposition. For purposes of determining Profit, (i) all non-cash
items shall be valued based upon the fair market value thereof as determined by
an independent expert selected by Purchaser and who is reasonably acceptable to
Shareholder, (ii) all deferred payments or consideration shall be discounted to
reflect a market rate of net present value thereof as determined by the
above-referenced independent expert, and (iii) all contingent payments will be
assumed to have been paid. In the event any contingent payments included in the
determination of Profit ultimately are not paid pursuant to an Alternative
Disposition, then Purchaser shall promptly
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<PAGE> 7
reimburse Shareholder for any amounts paid to Purchaser hereunder in respect of
such uncollected contingent payments promptly after receipt of written notice of
such non-payment.
ARTICLE V
ESCROW
5.1 Escrow Agreement. As further set forth in the Escrow Agreement
attached hereto as Exhibit 5.1, Shareholder and Purchaser agree that the
Applicable Shares (less up to 75,000 Applicable Shares which need not be placed
with the Escrow Agent) shall be placed with Meitar, Liquornik, Geva & Co. as
escrow agent within five business days of the date hereof and ending on the
Termination Date, to be disbursed as set forth below.
5.2 Release and Delivery. The Applicable Shares shall be released and
delivered during the term hereof at any time or from time to time, (i) to
Purchaser in connection with the purchase of such Shares pursuant to this
Agreement or the Offer and (ii) unless otherwise distributed to Purchaser, to
Shareholder on the Termination Date. All Applicable Shares tendered in the Offer
and withdrawn or not purchased in the Offer prior to the Termination Date shall
be returned to the Escrow Agent.
ARTICLE VII
RELEASE
(a) AS OF THE CLOSING DATE SHAREHOLDER DOES HEREBY FOR HIMSELF
OR HIS HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVES REMISE,
RELEASE, ACQUIT AND FOREVER DISCHARGE COMPANY AND EACH OF ITS SUBSIDIARIES OF
AND FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, RESPONSIBILITIES, DISPUTES,
CAUSES OF ACTION AND OBLIGATIONS OF EVERY NATURE WHATSOEVER, LIQUIDATED OR
UNLIQUIDATED, KNOWN OR UNKNOWN, MATURED OR UNMATURED, FIXED OR CONTINGENT, WHICH
SUCH SHAREHOLDER NOW HAS, OWNS OR HOLDS OR HAS AT ANY TIME PREVIOUSLY HAD, OWNED
OR HELD AGAINST COMPANY OR ITS SUBSIDIARIES INCLUDING WITHOUT LIMITATION ALL
LIABILITIES CREATED AS A RESULT OF THE NEGLIGENCE, GROSS NEGLIGENCE AND WILLFUL
ACTS OF COMPANY OR ITS SUBSIDIARIES AND ITS EMPLOYEES AND AGENTS, AND ALL
LIABILITIES RELATING TO COMPENSATION IN ANY FORM OR MANNER EXISTING AS OF THE
DATE HEREOF OR RELATING TO ANY MATTER THAT OCCURRED ON OR PRIOR TO THE CLOSING
DATE; PROVIDED, HOWEVER, THAT ANY CLAIMS, LIABILITIES, DEBTS OR CAUSES OF ACTION
THAT MAY ARISE IN CONNECTION WITH THE FAILURE OF ANY OF THE PARTIES HERETO TO
PERFORM ANY OF THEIR OBLIGATIONS HEREUNDER OR UNDER ANY OTHER AGREEMENT RELATING
TO THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATIONS, SECTION
5.9. OF THE TENDER AGREEMENT, OR FROM ANY BREACHES BY ANY OF THEM OF ANY
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REPRESENTATIONS OR WARRANTIES HEREIN OR IN CONNECTION WITH ANY OF
SUCH OTHER AGREEMENTS SHALL NOT BE RELEASED OR DISCHARGED
PURSUANT TO THIS AGREEMENT.
(b) SHAREHOLDER REPRESENTS AND WARRANTS THAT HE HAS NOT
PREVIOUSLY ASSIGNED OR TRANSFERRED, OR PURPORTED TO ASSIGN OR TRANSFER, TO ANY
PERSON OR ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS RELEASED HEREIN.
SHAREHOLDER COVENANTS AND AGREES THAT HE WILL NOT ASSIGN OR TRANSFER TO ANY
PERSON OR ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS TO BE RELEASED
HEREIN. SHAREHOLDER REPRESENTS AND WARRANTS THAT HE HAS READ AND UNDERSTANDS ALL
OF THE PROVISIONS OF THIS ARTICLE VI AND THAT HE HAS BEEN REPRESENTED BY LEGAL
COUNSEL OF HIS OWN CHOOSING IN CONNECTION WITH THE NEGOTIATION, EXECUTION AND
DELIVERY OF THIS AGREEMENT.
ARTICLE VII
COVENANTS, REPRESENTATIONS AND WARRANTIES
7.1 Shareholder hereby represents, warrants and covenants to Purchaser
as follows:
(a) Ownership. Shareholder is either (i) the record and
Beneficial Owner of, or (ii) the Beneficial Owner but not the record holder of,
the number of issued and outstanding Shares set forth on Part I of Schedule A
hereto and the Company Options set forth on Part II of Schedule A hereto. As of
the date of this Agreement, the Shares set forth on Part I of Schedule A hereto
constitute all of the issued and outstanding Shares owned of record or
Beneficially Owned by Shareholder. Except as otherwise set forth in Part I to
Schedule A hereto and with respect to encumbrances on up to 75,000 Shares,
Shareholder has sole power of disposition, sole power of conversion, and sole
power to agree to all of the matters set forth in this Agreement, in each case
with respect to all of the Shares set forth on Part I of Schedule A hereto, with
no material limitations, qualifications or restrictions on such rights, subject
to applicable securities laws and the terms of this Agreement.
(b) Power; Binding Agreement. Shareholder has the legal
capacity, power and authority to enter into and perform all of Shareholder's
obligations under this Agreement. This Agreement has been duly and validly
authorized by all necessary action, executed and delivered by Shareholder and
constitutes a valid and binding agreement of Shareholder, enforceable against
Shareholder in accordance with its terms. There is no beneficiary or holder of a
voting trust certificate or other interest of any trust of which Shareholder is
trustee whose consent is required for the execution and delivery of this
Agreement or the consummation by Shareholder of the transactions contemplated
hereby. If Shareholder is married and Shareholder's Shares constitute
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<PAGE> 9
community property, this Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, Shareholder's
spouse, enforceable against such person in accordance with its terms.
(c) No Conflicts. Except for the filing of an amendment to
Shareholder's Schedule 13D or 13G, if any, no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by Shareholder and
the consummation by Shareholder of the transactions contemplated hereby, except
where the failure to obtain such consent, permit, authorization, approval or
filing would not interfere with Shareholder's ability to perform his obligations
hereunder, and none of the execution and delivery of this Agreement by
Shareholder, the consummation by Shareholder of the transactions contemplated
hereby or compliance by Shareholder with any of the provisions hereof shall (i)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which Shareholder is a party or by which
Shareholder or any of his properties or assets may be bound, or (ii) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to Shareholder or any of his properties or assets, in each such case
except to the extent that any conflict, breach, default or violation would not
interfere with the ability of Shareholder to perform his obligations hereunder.
All arrangements, understandings, agreements and other instruments relating to
the Shareholder's ability to dispose of, tender, vote or grant a proxy with
respect to his Applicable Shares or enter into this Agreement have been validly
terminated, except that the Purchaser acknowledges that Shareholder has
encumbered up to 75,000 Shares, which shall be released from such encumbrance on
demand by Purchaser.
(d) No Encumbrances. Except as required herein, at all times
during the term hereof, all of Shareholder's Shares or Company Options as set
forth on Part I and II, respectively, of Schedule A hereto will be held by
Shareholder, an affiliate of Shareholder, or by a nominee or custodian for the
benefit of Shareholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any liens, claims, understandings or
arrangements that do not limit or impair Shareholder's ability to perform his
obligations under this Agreement; provided, however, that Shareholder may
encumber up to 75,000 Shares during the term hereof and Shareholder agrees to
cause such Shares to be released from any such encumbrance on demand by
Purchaser.
(e) No Solicitation. Shareholder shall comply, and shall cause
each of his affiliates who Beneficially Own any of Shareholder's Applicable
Shares to comply, with the terms of Section 5.8 of the Tender Agreement.
(f) Restriction on Transfer, Proxies and Non-Interference.
Except as expressly contemplated hereby, from and after the date of this
Agreement and ending as of the Termination Date, Shareholder shall not, and
shall cause each of his affiliates who Beneficially Own any of
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Shareholder's Applicable Shares or Company Options not to, directly or
indirectly, without the consent of Purchaser: (i) offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
or consent to the offer for sale, sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any or all of his Applicable Shares or
Company Options, or any interest therein, (ii) grant any proxies or powers of
attorney, deposit any or all of his Applicable Shares or Company Options into a
voting trust or enter into a voting agreement with respect to his Applicable
Shares or Company Options, (iii) enter into any agreement or arrangement
providing for any of the actions described in clause (i) or (ii) above, or (iv)
take any action that could reasonably be expected to have the effect of
preventing or disabling Shareholder from performing his obligations under this
Agreement. From and after the date of this Agreement and ending as of the
Termination Date, Shareholder shall not enter into any agreement or
understanding with any Person or entity the effect of which would be
inconsistent with or violate the provisions and agreements contained in this
Section 7.1
(g) Further Assurances. From time to time, at Purchaser's
request and without further consideration, Shareholder shall execute and deliver
such additional documents as may be necessary or desirable to consummate and
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
7.2 Purchaser hereby represents, warrants and covenants to Shareholder
as follows:
(a) Organization, Standing and Corporate Power. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with adequate corporate power and authority to own its
properties and carry on its business as presently conducted. Purchaser has the
corporate power and authority to enter into and perform all of its obligations
under this Agreement and to consummate the transactions contemplated hereby.
(b) No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated hereby, except where
the failure to obtain such consent, permit, authorization, approval or filing
would not interfere with its ability to perform its obligations hereunder, and
none of the execution and delivery of this Agreement by Purchaser, the
consummation by Purchaser of the transactions contemplated hereby or compliance
by Purchaser with any of the provisions hereof shall (i) conflict with or result
in any breach of any applicable organizational documents applicable to
Purchaser, (ii) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which Purchaser is a party or
by which Purchaser or any of Purchaser's properties or assets may be bound, or
(iii) violate any order, writ, injunction, decree, judgment, order, statute,
rule or regulation applicable to Purchaser or any of Purchaser's properties or
assets, in each
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<PAGE> 11
such case except to the extent that any conflict, breach, default or violation
would not interfere with the ability of Purchaser to perform its obligations
hereunder.
(c) Execution, Delivery and Performance by Purchaser. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of Purchaser, and Purchaser has taken all other actions required by
law, its certificate of incorporation and its by-laws to consummate the
transactions contemplated by this Agreement. This Agreement constitutes the
valid and binding obligations of Purchaser and is enforceable in accordance with
its terms, except as enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally.
7.3 Purchaser will perform its obligations under the Tender Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Stop Transfer. From and after the date of this Agreement and ending
as of the Termination Date, Shareholder will not request that Company register
the transfer (book-entry or otherwise) of any certificate or uncertificated
interest representing any of Shareholder's Applicable Shares or Company Options,
except as otherwise contemplated hereby.
8.2 Recapitalization. In the event of a stock dividend or distribution,
or any change in the Shares by reason of any split-up, recapitalization,
combination, exchange of shares or the like, the term "Shares" shall include,
without limitation, all such stock dividends and distributions and any
securities into which or for which any or all of the Applicable Shares may be
changed or exchanged as may be appropriate to reflect such event.
8.3 Shareholder Capacity. Except as set forth in Section 7.3,
Shareholder does not make any agreement or understanding herein in his capacity
as a director or officer of Company and nothing herein shall limit or affect any
action taken by Shareholder in such capacity. Nothing herein shall in any way
restrict or limit Shareholder from taking any action in his capacity as a
director or officer of Company or otherwise fulfilling his fiduciary obligations
as a director and officer of Company.
8.4 Tender Agreement and Company Options. Shareholder hereby consents
and agrees to the treatment of Company Options Beneficially Owned by Shareholder
or his affiliates as set forth in the Tender Agreement.
8.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
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<PAGE> 12
8.6 Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
8.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
(a) if to Purchaser, to:
BMC Software, Inc.
2101 CityWest Blvd.
Houston, Texas 77042
Attn: M. Brinkley Morse
Telecopy: (713) 918-8000
with a copy to:
Vinson & Elkins LLP
2300 First City Tower
Houston, Texas 77002-6760
Attn: John S. Watson
Telecopy: (713) 615-5236
(b) if to Shareholder, to:
c/o Meitar, Liquornik, Geva & Co.
16 Abba Hillel Silver Road
Ramat-Gan
Israel 52506
Attn: Dan Geva
Telecopy: 972-3-610-3100
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
8.8 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity,
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<PAGE> 13
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
herein.
8.9 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by a Shareholder of any covenants or agreements
contained in this Agreement will cause the Purchaser to sustain damages for
which they would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the Purchaser shall be entitled to the remedy of specific performance, without
the requirement of posting any bond, of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
8.10 Remedies Cumulative. 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 alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
8.11 No Waiver. 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 or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
8.12 No Third Party Beneficiaries. This Agreement is not intended to be
for the benefit of, and shall not be enforceable by, any person or entity who or
which is not a party hereto; provided that, in the event of Shareholder's death,
the benefits and obligations of Shareholder hereunder shall inure to his
successors and heirs.
8.13 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
8.14 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
8.15 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement. This Agreement shall not be
effective as to any party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each party hereto.
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<PAGE> 14
8.16 Trust Funds. In the event that any party hereto should receive any
funds that are to be paid to another party pursuant to the terms of this
Agreement, then the receiving party shall hold such funds in trust for the
benefit of the party entitled to receive such funds and shall promptly pay such
funds to the party entitled to receive such funds in accordance with this
Agreement.
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<PAGE> 15
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on this 7th day of March, 1999.
PURCHASER
By: /s/ M. BRINKLEY MORSE
-----------------------------------------
Name: M. Brinkley Morse
Title: Senior Vice President
SHAREHOLDER
/s/ YOSSIE HOLLANDER
--------------------------------------------
Yossie Hollander
15
<PAGE> 16
ACKNOWLEDGMENT AND CONSENT OF SPOUSE
DANA HOLLANDER, the spouse of Shareholder, hereby joins in the
execution of this Agreement for the purpose of acknowledging that any ownership
interest she may have in the Shares and Company Options Beneficially Owned by
Shareholder is subject to the terms of this Agreement to the same extent as if
she were a "Shareholder" hereunder, and hereby consents to the foregoing.
/s/ DANA HOLLANDER
16
<PAGE> 17
SCHEDULE A
<TABLE>
<S> <C>
PART I
Shares Beneficially Owned of Record 3,488,250 (1)
-------------
Shares Beneficially Owned Not of Record 253,000 (2)
-------------
PART II
Company Options Beneficially Owned 0
-------------
</TABLE>
(1) 22,000 of those shares may be pledged.
(2) 53,000 of those shares are pledged.
17
<PAGE> 1
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT, dated as of March 7, 1999 (this
"Agreement"), is made and entered into among BMC Software, Inc., a Delaware
corporation ("Purchaser") Einav Computer Systems Ltd., an Israeli corporation
("ECS"), and Roni A. Einav and Dalia Prashker-Katzman, shareholders of ECS (each
an "Owner" and collectively, the "Owners"). For purposes of this Shareholder
Agreement, ECS and the Owners are collectively referred to as the "Shareholder
Group."
WITNESSETH
WHEREAS, concurrently herewith, Purchaser and New Dimension Software
Ltd., an Israeli corporation (the "Company"), are entering into a Share Purchase
and Tender Agreement (as such agreement may hereafter be amended from time to
time, the "Tender Agreement"); and
WHEREAS, as an inducement and a condition to entering into the Tender
Agreement, Purchaser has required that Shareholder Group agree, and Shareholder
Group has agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein and the
benefits to be received by the parties under the terms of the Tender Agreement,
the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
(a) Capitalized terms used and defined herein shall have the respective
meanings ascribed to them in the Tender Agreement. For purposes of this
Agreement:
(i) "Alternative Disposition" shall have the meaning ascribed
to such term in Article IV.
(ii) "Alternative Transaction Consideration" shall mean all
cash, securities, settlement or termination amounts, notes or other debt
instruments, and other consideration received or to be received, directly or
indirectly, by Shareholder Group and its affiliates in connection with or as a
result of an Alternative Disposition or any agreements or arrangements
(including, without limitation, any employment agreement, consulting agreement,
non-competition agreement, confidentiality agreement, settlement agreement or
release agreement) entered into, directly or indirectly, by Shareholder Group or
its affiliates (excluding officers and directors of Company other than the
Owners) as a part of or in connection with the Alternative Disposition or
Company Transaction Proposal.
<PAGE> 2
(iii) "Applicable Shares " means all Shares that are
Beneficially Owned by Shareholder Group or that become Beneficially Owned by
Shareholder Group prior to the Termination Date (in each case, including all
Shares Beneficially Owned by ECS and/or the Owners in their individual
capacities).
(iv) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean bearing "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include (i) securities
Beneficially Owned by all other Persons (who are affiliates of such Person
excluding officers and directors of Company) who together with such Person would
constitute a "group" within the meaning of Section 13(d)(3) of the Exchange Act
and (ii) securities Beneficially Owned by that Person's spouse and children.
(v) "90% Condition" shall be such condition as set forth in
paragraph (1) of Exhibit A to the Tender Agreement.
(vi) "Offer Termination Date" shall mean the date the Offer
terminates or expires without the purchase of Shares thereunder; provided,
however, that if Purchaser initiates a new Offer under the terms of the Tender
Agreement on or before midnight, central time in the United States on the 10th
day following such date, the Offer Termination Date shall mean the date such
subsequent Offer terminates or expires without the purchase of Shares
thereunder; provided, however, that the Offer Termination Date will not be later
than the date of termination of the Tender Agreement.
(vii) "Per Share Amount" shall mean the price per Share of the
Offer as set forth in Section 1.1 of the Tender Agreement, as such price may be
increased in accordance with the Tender Agreement.
(viii) "Purchase Option" shall have the meaning ascribed to
such term in Section 3.1.
(ix) "Termination Date" shall mean the date ending on the
first to occur of:
(1) the Closing Date;
(2) the Offer Termination Date; or
(3) midnight, central time in the United States, on
the date all of the conditions to the Offer set forth in Exhibit A to the Tender
Agreement have been satisfied, except for the conditions set forth in paragraphs
(6)(d)(ii) or (6)(e), and Purchaser elects to terminate the Tender Agreement
without the purchase of Shares thereunder;
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<PAGE> 3
provided, however, that, notwithstanding subparagraphs (2) and (3) above, if
after the date of this Agreement (x) any person, entity or group (within the
meaning of Section 13(d)(3) of the Exchange Act) (other than the Purchaser or
any affiliate of Purchaser) acquires more than 5% or more of the outstanding
Shares and fails to tender such Shares in the Offer and continues to hold such
Shares and the Offer is terminated as a result of the failure of the
90%Condition to be satisfied, the Termination Date shall be the date 150 days
after the Offer Termination Date, or (y) there is a public announcement of, or
the disclosure to the management, board of directors, shareholders or advisors
of the Company of, a Company Transaction Proposal, and the board of directors of
the Company rejects such Company Transaction Proposal and continues to recommend
the Offer and the Offer is terminated as a result of the failure of the
90%Condition to be satisfied, the Termination Date shall be the date 120 days
after the Offer Termination Date, or (z) there is a public announcement of, or
the disclosure to the management, board of directors, shareholders or advisors
of the Company of, a Company Transaction Proposal, and the board of directors of
the Company withdraws, withholds or modifies in a manner adverse to Purchaser
its approval of the Tender Agreement or the Offer pursuant to Section 5.8 of the
Tender Agreement, and the Offer is terminated as a result of the failure of the
90%Condition to be satisfied, the Termination Date shall be the date 150 days
after the Offer Termination Date.
(x) "Underlying Shares" shall mean the Shares issuable to
Shareholder Group upon the exercise by Shareholder Group of Company Options, if
any, Beneficially Owned by it (in each case, including all Company Options
Beneficially Owned by ECS and/or the Owners in their individual capacities).
ARTICLE II
VOTING AND TENDER
MATTERS
2.1 Voting and Tender Matters.
(a) From and after the date of this Agreement and ending as of
the Termination Date, at any meeting of the holders of Shares however called, or
in any other circumstance upon which the vote, consent or other approval of
holders of Shares is sought, Shareholder Group shall vote (or cause to be voted)
its issued and outstanding Applicable Shares:
(i) against any action or agreement that would result
in a breach in any material respect of any covenant, representation or warranty
or any other material obligation or agreement of Company under the Tender
Agreement or this Agreement;
(ii) against the following actions (other than the
transactions contemplated by the Tender Agreement):
(A) any Company Transaction Proposal, and
3
<PAGE> 4
(B) to the extent that such (1) are intended
to, or could reasonably be expected to, impede, interfere with, delay, postpone,
or materially adversely affect the Offer, or the transactions contemplated by
the Tender Agreement or this Agreement or (2) are intended to, or could
reasonably be expected to, implement or lead to any Company Transaction
Proposal: (x) any change in a majority of the persons who constitute the board
of directors of Company; (y) any change in the present capitalization of Company
or any amendment of Company's Memorandum and Articles of Association (other than
as expressly contemplated by the Tender Agreement); or (z) any other material
change in Company's corporate structure or business; and
(iii) for the proposals to:
(A) approve the right of the directors of
the Company to sell their Shares to the Purchaser pursuant to the Offer and the
transactions contemplated thereby,
(B) approve an amendment to the Company's
Articles of Association to provide that the holders of at least 60% of the
issued and outstanding Shares of the Company shall be entitled to appoint and
remove any and all members of the Board of Directors of the Company, by means of
a written notice signed by such holders of the Company, and
(C) approve any and all other matters
contemplated by the Tender Agreement and presented at the Special Meeting.
(b) Shareholder Group hereby grants to, and appoints,
Purchaser and any nominee thereof, its proxy and attorney-in-fact (with full
power of substitution), from and after the date of this Agreement and ending as
of the Termination Date, to vote its Applicable Shares, or to grant a consent or
approval in respect of its Applicable Shares on any and all matters relating to
the Tender Agreement, the Offer or any Company Transaction Proposal. Shareholder
Group intends such proxy to be irrevocable and coupled with an interest and will
take such further action or execute such other instruments as may be necessary
to effectuate the intent of this proxy and hereby revokes any proxy previously
granted by Shareholder Group with respect to its Applicable Shares.
(c) From and after the date of this Agreement and ending as of
the Termination Date, Shareholder Group shall not take any action (including the
tender of any Shares) that could reasonably be expected to, implement or lead to
any Company Transaction Proposal.
2.2 Tender Agreement and Company Options.
(a) Shareholder Group hereby agrees that it shall (i) tender
all of its Applicable Shares into the Offer promptly, and in any event no later
than the third business day following the commencement of the Offer, and (ii)
not withdraw any Applicable Shares so tendered prior to the Offer Termination
Date.
4
<PAGE> 5
(b) In the event that (i) the 90 % Condition is not satisfied,
(ii) Purchaser notifies Shareholder Group that Purchaser is prepared to close
the Offer but for the fact that the 90 % Condition is not satisfied, and (iii)
the tender by Shareholder Group of the Underlying Shares, either alone or when
aggregated with other Company Options, would cause the 90 % Condition to be
satisfied, then Shareholder Group hereby agrees that, at any time prior to the
Termination Date, immediately upon the request of Purchaser, it shall exercise
all Company Options Beneficially Owned by it and immediately tender the
Underlying Shares received upon such exercise into the Offer (and not withdraw
such Underlying Shares so tendered). Purchaser shall advance to Shareholder
Group the funds necessary to pay the exercise price of such Options, and
Shareholder Group shall repay Purchaser the amount of such advance, without
interest, immediately upon receipt of the Per Share Amount by it for its
Underlying Shares.
(c) Except as may be required by Section 2.2(b), Shareholder
Group hereby agrees that it shall not exercise any Company Options that it
Beneficially Owns.
ARTICLE III
PURCHASE OPTION
3.1 Grant of the Purchase Option. Shareholder Group hereby grants to
Purchaser an irrevocable option (the "Purchase Option") to purchase, on the
terms and subject to the conditions set forth herein, at the Per Share Amount
all its Applicable Shares.
3.2 Exercise of the Purchase Option.
(a) Subject to the conditions set forth in Section 3.3, the
Purchase Option may be exercised in whole at any time, and in part from time to
time, from and after the Offer Termination Date and ending as of the Termination
Date; provided, however, that in the event Purchaser exercises its Purchase
Option hereunder it shall exercise its Purchase Option in a proportionate amount
under that certain Shareholder Agreement with Yossie Hollander of even date
herewith entered into in connection with the Tender Agreement.
(b) In the event Purchaser wishes to exercise the Purchase
Option, Purchaser will send a written notice to Shareholder Group specifying a
place, date (not less than two business days nor more than 10 calendar days
after the date such notice is given) and time for the closing of the purchase of
such Shares (the "Closing").
(c) The purchase price payable to Shareholder Group with
respect to any exercise of the Purchase Option will be the product of (i) the
Per Share Amount and (ii) the number of Applicable Shares to be purchased upon
such exercise.
5
<PAGE> 6
3.3 Closing.
(a) At the Closing, Shareholder Group will deliver to
Purchaser a certificate or certificates representing the Shares being purchased,
duly endorsed for transfer or accompanied by appropriate stock powers duly
executed in blank, and Purchaser will pay the purchase price in immediately
available funds by wire transfer to an account designated by Shareholder Group.
Transfer taxes, if any, imposed as a result of the exercise of the Purchase
Option and the transfer of any Applicable Shares will be paid by Shareholder
Group.
(b) The obligation of Purchaser and Shareholder Group to
consummate the purchase and sale of the Applicable Shares pursuant to this
Article III will be subject to the fulfillment of the following conditions:
(i) the expiration or termination of the waiting
period applicable to the consummation of such transactions under the HSR Act and
any other applicable antitrust laws; and
(ii) none of the parties hereto shall be subject to
any order or injunction of a court of competent jurisdiction which prohibits the
consummation of such transactions.
(c) The obligations of Shareholder Group pursuant to this
Article III shall also be subject to Purchaser not violating any of its material
obligations under the Tender Agreement.
Each of the parties hereto will promptly make and will use all reasonable
efforts to cause each of their respective affiliates to make, all such filings
and take all such actions as may be reasonably required in order to permit the
lawful exercise of the Purchase Option, as promptly as possible. The date of any
Closing may be extended, if required, to the next business day following (1) the
date that any applicable waiting period(s) under the HSR Act and any other
applicable antitrust laws shall have expired or been earlier terminated, (2) the
date that all other necessary governmental approvals for the sale of the Shares
for which the Purchase Option shall have been exercised shall have been
obtained, and (3) the satisfaction of any other condition to the Closing under
the Tender Agreement.
ARTICLE IV
CAPTURE
4.1 Capture. In the event that the Applicable Shares of
Shareholder Group are sold, transferred, exchanged, canceled or disposed of in
connection with or as a result of any Company Transaction Proposal that is in
existence on, or that has been otherwise made prior to the Termination Date (an
"Alternative Disposition") then, within five business days after the closing of
such Alternative Disposition, Shareholder Group shall tender and pay to, or
shall cause to be tendered and paid to, Purchaser (or its designee), in
immediately available funds, the Profit realized from such Alternative
Disposition, less any withholdings.
4.2 Profit. As used in this Article IV, "Profit" shall mean an
amount equal to the excess, if any, of (a) the Alternative Transaction
Consideration over (b) the Per Share Amount multiplied by Shareholder Group's
Applicable Shares sold, transferred, exchanged, canceled or
6
<PAGE> 7
disposed of in such Alternative Disposition. For purposes of determining Profit,
(i) all non-cash items shall be valued based upon the fair market value thereof
as determined by an independent expert selected by Purchaser and who is
reasonably acceptable to Shareholder Group, (ii) all deferred payments or
consideration shall be discounted to reflect a market rate of net present value
thereof as determined by the above-referenced independent expert, and (iii) all
contingent payments will be assumed to have been paid. In the event any
contingent payments included in the determination of Profit ultimately are not
paid pursuant to an Alternative Disposition, then Purchaser shall promptly
reimburse Shareholder Group for any amounts paid to Purchaser hereunder in
respect of such uncollected contingent payments promptly after receipt of
written notice of such non-payment.
ARTICLE V
ESCROW
5.1 Escrow Agreement. As further set forth in the Escrow Agreement
attached hereto as Exhibit 5.1, Shareholder Group and Purchaser agree that the
Applicable Shares shall be placed with Dan Cohen, Spigelman & Co. as escrow
agent within five business days of the date hereof and ending on the Termination
Date, to be disbursed as set forth below.
5.2 Release and Delivery. The Applicable Shares shall be released and
delivered during the term hereof at any time or from time to time, (i) to
Purchaser in connection with the purchase of such Shares pursuant to this
Agreement or the Offer and (ii) unless otherwise distributed to Purchaser, to
Shareholder Group on the Termination Date. All Applicable Shares tendered in the
Offer and withdrawn or not purchased in the Offer prior to the Termination Date
shall be returned to the Escrow Agent.
ARTICLE VII
RELEASE
(a) AS OF THE CLOSING DATE ECS AND THE OWNERS DO HEREBY FOR
THEMSELVES, AND IN THE CASE OF THE OWNERS, THEIR HEIRS, EXECUTORS,
ADMINISTRATORS AND LEGAL REPRESENTATIVES REMISE, RELEASE, ACQUIT AND FOREVER
DISCHARGE COMPANY AND EACH OF ITS SUBSIDIARIES OF AND FROM ANY AND ALL CLAIMS,
DEMANDS, LIABILITIES, RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION AND
OBLIGATIONS OF EVERY NATURE WHATSOEVER, LIQUIDATED OR UNLIQUIDATED, KNOWN OR
UNKNOWN, MATURED OR UNMATURED, FIXED OR CONTINGENT, WHICH ECS OR SUCH OWNER NOW
HAS, OWNS OR HOLDS OR HAS AT ANY TIME PREVIOUSLY HAD, OWNED OR HELD AGAINST
COMPANY OR ITS SUBSIDIARIES INCLUDING WITHOUT LIMITATION ALL LIABILITIES CREATED
AS A RESULT OF THE NEGLIGENCE, GROSS NEGLIGENCE AND WILLFUL ACTS OF COMPANY OR
ITS SUBSIDIARIES AND ITS EMPLOYEES AND AGENTS, AND ALL LIABILITIES RELATING TO
COMPENSATION IN ANY FORM OR MANNER EXISTING AS OF THE DATE HEREOF OR RELATING TO
ANY MATTER THAT OCCURRED ON OR PRIOR
7
<PAGE> 8
TO THE CLOSING DATE; PROVIDED, HOWEVER, THAT ANY CLAIMS, LIABILITIES, DEBTS OR
CAUSES OF ACTION THAT MAY ARISE IN CONNECTION WITH THE FAILURE OF ANY OF THE
PARTIES HERETO TO PERFORM ANY OF THEIR OBLIGATIONS HEREUNDER OR UNDER ANY OTHER
AGREEMENT RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT
LIMITATIONS, SECTION 5.9. OF THE TENDER AGREEMENT, OR FROM ANY BREACHES BY ANY
OF THEM OF ANY REPRESENTATIONS OR WARRANTIES HEREIN OR IN CONNECTION WITH ANY OF
SUCH OTHER AGREEMENTS SHALL NOT BE RELEASED OR DISCHARGED PURSUANT TO THIS
AGREEMENT.
(B) ECS AND THE OWNERS REPRESENT AND WARRANT THAT THEY HAVE
NOT PREVIOUSLY ASSIGNED OR TRANSFERRED, OR PURPORTED TO ASSIGN OR TRANSFER, TO
ANY PERSON OR ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS,
LIABILITIES, RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS
RELEASED HEREIN. ECS AND THE OWNERS COVENANT AND AGREE THAT THEY WILL NOT ASSIGN
OR TRANSFER TO ANY PERSON OR ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS,
DEMANDS, LIABILITIES, RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR
OBLIGATIONS TO BE RELEASED HEREIN. ECS AND THE OWNERS REPRESENT AND WARRANT THAT
THEY HAVE READ AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS ARTICLE VI AND THAT
THEY HAVE BEEN REPRESENTED BY LEGAL COUNSEL OF THEIR OWN CHOOSING IN CONNECTION
WITH THE NEGOTIATION, EXECUTION AND DELIVERY OF THIS AGREEMENT.
ARTICLE VII
COVENANTS, REPRESENTATIONS AND WARRANTIES
7.1 Shareholder Group hereby represents, warrants and covenants to
Purchaser as follows:
(a) Ownership. Shareholder Group is either (i) the record and
Beneficial Owner of, or (ii) the Beneficial Owner but not the record holder of,
the number of issued and outstanding Shares set forth on Part I of Schedule A
hereto and the Company Options set forth on Part II of Schedule A hereto. As of
the date of this Agreement, the Shares set forth on Part I of Schedule A hereto
constitute all of the issued and outstanding Shares owned of record or
Beneficially Owned by Shareholder Group. Except as otherwise set forth in Part I
to Schedule A hereto, Shareholder Group has sole power of disposition, sole
power of conversion, and sole power to agree to all of the matters set forth in
this Agreement, in each case with respect to all of the Shares set forth on Part
I of Schedule A hereto, with no material limitations, qualifications or
restrictions on such rights, subject to applicable securities laws and the terms
of this Agreement.
(b) Power; Binding Agreement. Shareholder Group has the legal
capacity, power and authority to enter into and perform all of Shareholder
Group's obligations under this Agreement.
8
<PAGE> 9
This Agreement has been duly and validly authorized by all necessary action,
executed and delivered by Shareholder Group and constitutes a valid and binding
agreement of Shareholder Group, enforceable against Shareholder Group in
accordance with its terms. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which Shareholder Group is trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by Shareholder Group of the transactions contemplated hereby.
If either Owner is married and such Owner's interest in Shareholder Group's
Shares constitute community property, this Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of,
Owner's spouse, enforceable against such person in accordance with its terms.
The Owners are the sole owners of ECS.
(c) No Conflicts. Except for the filing of an amendment to
Shareholder Group's Schedule 13D or 13G, if any, no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by Shareholder Group
and the consummation by Shareholder Group of the transactions contemplated
hereby, except where the failure to obtain such consent, permit, authorization,
approval or filing would not interfere with Shareholder Group's ability to
perform its obligations hereunder, and none of the execution and delivery of
this Agreement by Shareholder Group, the consummation by Shareholder Group of
the transactions contemplated hereby or compliance by Shareholder Group with any
of the provisions hereof shall (i) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of any
kind to which Shareholder Group is a party or by which Shareholder Group or any
of its properties or assets may be bound, or (ii) violate any order, writ,
injunction, decree, judgment, order, statute, rule or regulation applicable to
Shareholder Group or any of its properties or assets, in each such case except
to the extent that any conflict, breach, default or violation would not
interfere with the ability of Shareholder Group to perform its obligations
hereunder. All arrangements, understandings, agreements and other instruments
relating to Shareholder Group's ability to dispose of, tender, vote or grant a
proxy with respect to its Applicable Shares or enter into this Agreement have
been validly terminated.
(d) No Encumbrances. Except as required herein, at all times
during the term hereof, all of Shareholder Group's Shares or Company Options as
set forth on Part I and II, respectively, of Schedule A hereto will be held by
Shareholder Group, an affiliate of Shareholder Group, or by a nominee or
custodian for the benefit of Shareholder Group, free and clear of all liens,
claims, security interests, proxies, voting trusts or agreements, understandings
or arrangements or any other encumbrances whatsoever, except for any liens,
claims, understandings or arrangements that do not limit or impair Shareholder
Group's ability to perform its obligations under this Agreement.
9
<PAGE> 10
(e) No Solicitation. Shareholder and the Owners shall comply,
and shall cause each of their respective affiliates who Beneficially Own any of
Shareholder Group's Applicable Shares to comply, with the terms of Section 5.8
of the Tender Agreement.
(f) Restriction on Transfer, Proxies and Non-Interference.
Except as expressly contemplated hereby, from and after the date of this
Agreement and ending as of the Termination Date, Shareholder Group shall not,
and shall cause each of its affiliates who Beneficially Own any of Shareholder
Group's Applicable Shares or Company Options not to, directly or indirectly,
without the consent of Purchaser: (i) offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to or consent to the
offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of its Applicable Shares or Company Options, or any
interest therein, (ii) grant any proxies or powers of attorney, deposit any or
all of its Applicable Shares or Company Options into a voting trust or enter
into a voting agreement with respect to its Applicable Shares or Company
Options, (iii) enter into any agreement or arrangement providing for any of the
actions described in clause (i) or (ii) above, or (iv) take any action that
could reasonably be expected to have the effect of preventing or disabling
Shareholder Group from performing its obligations under this Agreement. From and
after the date of this Agreement and ending as of the Termination Date,
Shareholder Group shall not enter into any agreement or understanding with any
Person or entity the effect of which would be inconsistent with or violate the
provisions and agreements contained in this Section 7.1
(g) Further Assurances. From time to time, at Purchaser's
request and without further consideration, Shareholder Group shall execute and
deliver such additional documents as may be necessary or desirable to consummate
and make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
7.2 Purchaser hereby represents, warrants and covenants to Shareholder
Group as follows:
(a) Organization, Standing and Corporate Power. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with adequate corporate power and authority to own its
properties and carry on its business as presently conducted. Purchaser has the
corporate power and authority to enter into and perform all of its obligations
under this Agreement and to consummate the transactions contemplated hereby.
(b) No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated hereby, except where
the failure to obtain such consent, permit, authorization, approval or filing
would not interfere with its ability to perform its obligations hereunder, and
none of the execution and delivery of this Agreement by Purchaser, the
consummation by Purchaser of the transactions contemplated hereby or compliance
by Purchaser with any of the provisions hereof shall (i) conflict with or result
in any breach of any applicable organizational documents applicable to
Purchaser,
10
<PAGE> 11
(ii) result in a violation or breach of, or constitute (with or without notice
or lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which Purchaser is a party or by which
Purchaser or any of Purchaser's properties or assets may be bound, or (iii)
violate any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to Purchaser or any of Purchaser's properties or assets,
in each such case except to the extent that any conflict, breach, default or
violation would not interfere with the ability of Purchaser to perform its
obligations hereunder.
(c) Execution, Delivery and Performance by Purchaser. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of Purchaser, and Purchaser has taken all other actions required by
law, its certificate of incorporation and its by-laws to consummate the
transactions contemplated by this Agreement. This Agreement constitutes the
valid and binding obligations of Purchaser and is enforceable in accordance with
its terms, except as enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally.
7.3 Purchaser will perform its obligations under the Tender Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Stop Transfer. From and after the date of this Agreement and ending
as of the Termination Date, Shareholder Group will not request that Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of Shareholder Group's Applicable
Shares or Company Options, except as otherwise contemplated hereby.
8.2 Recapitalization. In the event of a stock dividend or distribution,
or any change in the Shares by reason of any split-up, recapitalization,
combination, exchange of shares or the like, the term "Shares" shall include,
without limitation, all such stock dividends and distributions and any
securities into which or for which any or all of the Applicable Shares may be
changed or exchanged as may be appropriate to reflect such event.
8.3 Shareholder Group Capacity. Except as set forth in Section 7.3,
neither Owner makes any agreement or understanding herein in his or her capacity
as a director or officer of Company and nothing herein shall limit or affect any
action taken by either Owner in such capacity. Nothing herein shall in any way
restrict or limit either Owner from taking any action in his or her capacity as
a director or officer of Company or otherwise fulfilling his or her fiduciary
obligations as a director and officer of Company. Subject to the foregoing, all
obligations of the Shareholder Group set forth in this Agreement shall apply to
the Owners and ECS in their individual capacities as well.
11
<PAGE> 12
8.4 Tender Agreement and Company Options. Shareholder Group hereby
consent and agree to the treatment of Company Options Beneficially Owned by
Shareholder Group or its affiliates as set forth in the Tender Agreement.
8.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
8.6 Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
8.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
(a) if to Purchaser, to:
BMC Software, Inc.
2101 CityWest Blvd.
Houston, Texas 77042
Attn: M. Brinkley Morse
Telecopy: (713) 918-8000
with a copy to:
Vinson & Elkins LLP
2300 First City Tower
Houston, Texas 77002-6760
Attn: John S. Watson
Telecopy: (713) 615-5236
(b) if to the Shareholder Group, to:
c/o Dan Cohen, Spigelman & Co.
103 Hahashmonaim St.
Israel
Attn: Michael Spigelman
Telecopy: 972-3-561-0624
12
<PAGE> 13
with a copy to:
Dan Cohen, Spigelman & Co.
103 Hahashmonaim St.
Israel
Attn: Michael Spigelman
Telecopy: 972-3-561-0624
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
8.8 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
8.9 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by ECS or either Owner of any covenants or agreements
contained in this Agreement will cause the Purchaser to sustain damages for
which they would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the Purchaser shall be entitled to the remedy of specific performance, without
the requirement of posting any bond, of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
8.10 Remedies Cumulative. 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 alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
8.11 No Waiver. 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 or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
8.12 No Third Party Beneficiaries. This Agreement is not intended to be
for the benefit of, and shall not be enforceable by, any person or entity who or
which is not a party hereto; provided that, in the event of either Owner's
death, the benefits and obligations of such Owner hereunder shall inure to his
or her successors and heirs.
13
<PAGE> 14
8.13 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
8.14 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
8.15 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement. This Agreement shall not be
effective as to any party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each party hereto.
8.16 Trust Funds. In the event that any party hereto should receive any
funds that are to be paid to another party pursuant to the terms of this
Agreement, then the receiving party shall hold such funds in trust for the
benefit of the party entitled to receive such funds and shall promptly pay such
funds to the party entitled to receive such funds in accordance with this
Agreement.
14
<PAGE> 15
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on this 7th day of March, 1999.
PURCHASER
By: /s/ M. BRINKLEY MORSE
---------------------------------------
Name: M. Brinkley Morse
-------------------------------------
Title: Senior Vice President
------------------------------------
ECS
By: /s/ DALIA PRASHKER
---------------------------------------
Name: Dalia Prashker
-------------------------------------
Title: Co-Chairman
------------------------------------
By: /s/ RONI A. EINAV
---------------------------------------
Name: Roni A. Einav
-------------------------------------
Title: Chairman
------------------------------------
OWNERS
/s/ RONI A. EINAV
------------------------------------------
Roni A. Einav
/s/ DALIA PRASHKER
------------------------------------------
Dalia Prashker
15
<PAGE> 16
ACKNOWLEDGMENT AND CONSENT OF SPOUSE
Matia Einav, the spouse of Owner, hereby joins in the execution of
this Agreement for the purpose of acknowledging that any ownership interest she
may have in the Shares and Company Options Beneficially Owned by Shareholder
Group is subject to the terms of this Agreement to the same extent as if she
were a "Owner" hereunder, and hereby consents to the foregoing.
/s/ MATIA EINAV
-----------------
Matia Einav
16
<PAGE> 17
ACKNOWLEDGMENT AND CONSENT OF SPOUSE
Yossie Prashker, the spouse of Owner, hereby joins in the execution of
this Agreement for the purpose of acknowledging that any ownership interest she
may have in the Shares and Company Options Beneficially Owned by Shareholder
Group is subject to the terms of this Agreement to the same extent as if she
were a "Owner" hereunder, and hereby consents to the foregoing.
/s/ YOSSIE PRASHKAR
---------------------
Yossie Prashkar
17
<PAGE> 18
SCHEDULE A
<TABLE>
PART I
<S> <C>
Shares Beneficially Owned of Record
ECS 3,741,250
Roni A. Einav 0
Dalia Prashker-Katzman 0
Shares Beneficially Owned Not of Record
ECS 0
Roni A. Einav 0
Dalia Prashker-Katzman 0
PART II
Company Options Beneficially Owned
ECS 0
Roni A. Einav 23,000
Dalia Prashker-Katzman 0
</TABLE>
<PAGE> 1
RELEASE
This Release, dated as of March 7, 1999, is made and entered into by
and among New Dimension Software Ltd., an Israeli corporation (the "Company")
and , a director of the Company ("Director").
WITNESSETH
WHEREAS, Company and BMC Software, Inc., a Delaware corporation
("Purchaser"), desire to enter into a Share Purchase and Tender Agreement (the
"Tender Agreement"), which will provide for the acquisition by Purchaser
ordinary shares of the Company through a tender offer and compulsory acquisition
(provided for under the Companies' Ordinance in the State of Israel);
WHEREAS, the ability of the Company to enter into the Tender Agreement
is conditioned upon the Company obtaining general releases from certain
directors of the Company, including Director, respecting any claims such
directors may have against the Company;
WHEREAS, two other directors of the Company, and
(the "Other Directors"), have entered into identical releases on even
date herewith (the "Other Releases");
WHEREAS, the Director has asserted that he has a claim against the
Company based on an alleged promise by the Company to grant the Director certain
stock options and/or other compensation, an alleged promise which the Company
vigorously denies and repudiates;
NOW, THEREFORE, in consideration of the premises set forth above, as
well as the mutual promises set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
RELEASE
1.1 AS OF THE DATE OF THE PAYMENT DESCRIBED IN ARTICLE II HEREOF OR THE
DATE UPON WHICH THE TENDER OFFER DESCRIBED IN THE TENDER AGREEMENT IS
CONSUMMATED, WHICHEVER IS LATER (THE "EFFECTIVE TIME"), THE DIRECTOR DOES HEREBY
FOR HIMSELF OR HIS HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVES
REMISE, RELEASE, ACQUIT AND FOREVER DISCHARGE THE COMPANY AND EACH OF ITS
SUBSIDIARIES OF AND FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION AND OBLIGATIONS OF EVERY NATURE
WHATSOEVER, LIQUIDATED OR UNLIQUIDATED, KNOWN OR UNKNOWN, MATURED OR UNMATURED,
FIXED OR CONTINGENT, WHICH SUCH DIRECTOR NOW HAS, OWNS OR HOLDS OR HAS AT ANY
TIME PREVIOUSLY HAD, OWNED OR
<PAGE> 2
HELD AGAINST THE COMPANY OR ITS SUBSIDIARIES INCLUDING WITHOUT LIMITATION ALL
LIABILITIES CREATED AS A RESULT OF THE NEGLIGENCE, GROSS NEGLIGENCE AND WILLFUL
ACTS OF THE COMPANY OR ITS SUBSIDIARIES AND ITS EMPLOYEES AND AGENTS, AND ALL
LIABILITIES RELATING TO COMPENSATION IN ANY FORM OR MANNER EXISTING AS OF THE
EFFECTIVE TIME OR RELATING TO ANY MATTER THAT OCCURRED ON OR PRIOR TO THE
EFFECTIVE TIME.
1.2 THE DIRECTOR REPRESENTS AND WARRANTS THAT HE HAS NOT PREVIOUSLY
ASSIGNED OR TRANSFERRED, OR PURPORTED TO ASSIGN OR TRANSFER, TO ANY PERSON OR
ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS RELEASED HEREIN. THE
DIRECTOR COVENANTS AND AGREES THAT HE WILL NOT ASSIGN OR TRANSFER TO ANY PERSON
OR ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS TO BE RELEASED
HEREIN. THE DIRECTOR REPRESENTS AND WARRANTS THAT HE HAS READ AND UNDERSTANDS
ALL OF THE PROVISIONS OF THIS ARTICLE I AND THAT HE HAS BEEN REPRESENTED BY
LEGAL COUNSEL OF HIS OWN CHOOSING IN CONNECTION WITH THE NEGOTIATION, EXECUTION
AND DELIVERY OF THIS AGREEMENT.
ARTICLE II
PAYMENT OF CONSIDERATION
The Company hereby agrees to pay Benjamin Baratz, Esquire, on behalf of
the Director and the Other Directors in consideration of the execution of this
Release and the Other Releases and as additional remuneration for services to
the Company by the Director and the Other Directors, respectively, an aggregate
payment of $7,500,000 in cash (plus value added tax as prescribed by law against
a duly issued value added tax invoice), less any amounts required to be withheld
pursuant to applicable tax regulations, immediately prior to the Closing Date as
set forth in the Tender Agreement and the release set forth herein and such
payment shall be conditioned on the closing under the Tender Agreement. The
payment made pursuant to this Article II shall be in full settlement of any
claims, demands, liabilities, responsibilities, disputes, causes of action and
obligations referred to in the preceding Article I.
For the avoidance of any doubt it is hereby expressly declared and
agreed between the parties hereto that the execution of this Release by the
Company and its consent to make any payment to the Director provided for herein,
shall not be deemed a recognition, admission, acknowledgment or acceptance by
the Company of any claim alleged by the Director as provided for in the Preamble
hereof.
<PAGE> 3
ARTICLE III
MISCELLANEOUS
3.1 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
3.2 Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties hereto
as well as Purchaser.
3.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
(a) if to Company, to:
New Dimension Software, Ltd.
ATIDIM, Building 7
POB 85168
Tel Aviv 61 581
Israel
Telecopy: 972-3-645-1100
with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: David Fox
Telecopy: (212) 735-2000
Dan Cohen, Spigelman & Co.
103 Hahashmonaim St.
Israel
Attn: Michael Spigelman
Telecopy: 972-3-561-0624
<PAGE> 4
(b) if to Director, to:
c/o Benjamin Baratz
King Saul Blvd. 8
Tel Aviv 64 733
Israel
Telecopy: 972-3-696-3115
(c) if to Purchaser, to:
BMC Software, Inc.
2101 CityWest Blvd.
Houston, Texas
Attn: M. Brinkley Morse
Telecopy: (713) 918-8000
with copies to:
Vinson & Elkins LLP
2300 First City Tower
Houston, Texas 77002-6760
Attn: John S. Watson
Telecopy: (713) 758-2346
Herzog, Fox & Neeman
Asia House
4 Weizmann Street
Tel-Aviv 64 239
Israel
Attn: Yaakov Neeman
Telecopy: 972-3-696-6464
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
3.4 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
<PAGE> 5
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
3.5 Third Party Beneficiary. This agreement is intended to be for the
benefit of, and shall be enforceable by, Purchaser. In the event of Director's
death, the benefits and obligations of Director hereunder shall inure to his
successors and heirs.
3.6 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by a Director of any covenants or agreements
contained in this Agreement will cause Company and Purchaser to sustain damages
for which they would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the Company or Purchaser shall be entitled to the remedy of specific performance
of such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which they may be entitled, at law or in equity.
3.7 Remedies Cumulative. 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 alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
3.8 No Waiver. 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 or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
3.9 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Israel, without giving effect to the
principles of conflicts of law thereof.
3.10 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
3.11 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement. This Agreement shall not be
effective as to any party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each party hereto.
<PAGE> 6
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed on this 7th day of March, 1999.
[NEW DIMENSION SOFTWARE LOGO]
COMPANY
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
DIRECTOR:
Name: Applicable Director
<PAGE> 1
THIRD AMENDMENT
TO DISTRIBUTION AGREEMENT DATED OCTOBER 28, 1994
AS AMENDED ON APRIL 24, 1997 AND OCTOBER 31, 1997
This Amendment is made and entered into as of this 6th day of March, 1999.
Among
NEW DIMENSION SOFTWARE LTD.
a corporation organized and existing under the laws
of Israel with its principal place of business at
Bldg. 7, Alaim Industrial Park, P.O. Box 43227, Tel
Aviv, Israel 61430 (hereinafter referred to as: the
"Company")
and
BOOLE & BABBAGE EUROPE
a corporation organized and existing under the laws
of the Republic of Ireland with its principal place
of business at Sadyford Business Centre, Burtonhall
Road, Faxrock Dublin 19, Ireland (hereinafter
referred to as: the "Distributor")
WHEREAS on October 26, 1994, the Company and the Distributor entered into
a distribution agreement (hereinafter: "the 1994 Distribution
Agreement") whereby the Distributor was granted exclusive
distribution rights in certain territories with respect to certain
proprietary Software Products of the Company; and
WHEREAS the 1994 Distribution Agreement has been amended by the Company
and Distributor on April 24, 1997 (hereinafter: the "First
Amendment") and on October 31, 1997 (hereinafter: the "Second
Amendment") and the Company, Distributor and Boole & Babbage,
Inc., the parent company of Distributor ("Boole"), have entered
into that certain letter agreement dated December 22, 1998, which
provides for additional agreements between the Company and
Distributor with respect to the Company's right to notify
Distributor of its termination of the Distribution Agreement in
connection with the announcement by BMC Software, Inc. ("BMC") of
its acquisition of Boole (the "Letter Agreement"); and
WHEREAS the Company and Distributor wish to amend certain provisions of
the 1994 Distribution Agreement, the First Amendment, the Second
Amendment and the Letter Agreement, subject to and in accordance
with the provisions and conditions herein.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereby agree as follows:
1. Preamble, Schedules and Captions
The Preamble to this Third Amendment constitutes an integral part hereof.
This Third Amendment's captions are provided for the sake of convenience
and shall not be used to constitute the provisions hereof.
2. Definition, Terms and Provisions of the 1994 Distribution Agreement, First
Amendment, Second Amendment and the Letter Agreement
Except as expressly provided for herein, all the definitions, terms and
provisions of the 1994 Distribution Agreement, the First Amendment, the
Second Amendment and the Letter Agreement shall apply hereto mutatis
mutandis.
3. Sections 7.1 and 7.2 of the 1994 Distribution Agreement are hereby amended
to read in their entirety as follows:
"7.1 In the event of a Change of Control (other than a Change of Control
by the Company where BMC Software, or a subsidiary of BMC Software
is the Merging Party) by either party or by BBI, both the Company
and the Distributor (hereinafter: the "Terminating Party") shall
have the right (but not the obligation) to terminate the Agreement
as of the date a public announcement concerning such Business
Transaction (by an official press release or otherwise) has been
made (hereinafter: the "Triggering Event"), in accordance with the
following provisions:
4. Effective Date
The effective date of this Third Amendment is March 6, 1999.
5. General
5.1 Other than as expressly stated and amended hereinabove the 1994
Distribution Agreement as amended in the First Amendment and the
Second Amendment, and the terms and provisions therein, shall
continue to exist and bind the parties and nothing contained herein
shall be deemed to derogate from or change the 1994 Distribution
Agreement, and the First Amendment and the Second Amendment thereof
or any of the parties' rights and obligations in accordance
therewith other than as expressly provided for herein and in the
Letter Agreement. However, should any provision herein contradict
any provision of the 1994 Distribution Agreement, the First
Amendment, the Second Amendment or the Letter Agreement, this Third
Amendment shall prevail.
-2-
<PAGE> 3
5.2 The provisions contained herein set forth the entire amendment of the
1994 Distribution Agreement as amended in the First Amendment and the
Second Amendment with respect to the subject matter hereof and
supersedes all previous communications, representations or agreements
(excluding the Letter Agreement), whether oral written with respect to
the subject matter hereof.
5.3 Subject to any legal duty to which both parties, being public
companies, are subject, the contents and timing of any public
announcement or press release regarding this Third Amendment are to be
approved in advance by the designated officer is the Company's Chief
Executive Officer and in case of the Distributor the designated officer
is the Chief financial Officer of Boole & Babbage Inc.
IN WITNESS WHEREOF, the parties have executed this Third Amendment.
New Dimension Software Ltd. Boole & Babbage Europe
[NEW DIMENSION SOFTWARE LTD. LOGO]
By: /s/ RONI A. EINAV By: /s/ PAUL E. NEWTON
------------------------------ -----------------------------------------
Name: Roni A. Einav Name: President & CEO, Boole & Babbage, Inc.
---------------------------- ---------------------------------------
Title: CHAIRMAN Title: Paul E. Newton
--------------------------- --------------------------------------
By: /s/ DAN BARNEA
------------------------------
Name: Dan Barnea
----------------------------
Title: CEO
---------------------------
<PAGE> 1
March 7, 1999
BMC Software, Inc.
2101 CityWest Blvd.
Houston, Texas 77042
Re: Distribution Agreement (the "Distribution Agreement") by and
among New Dimension Software Ltd. (the "Company"), Boole &
Babbage Europe (the "Distributor") and Boole & Babbage, Inc.
("BBI") dated October 28, 1994, as amended through the date
hereof.
Gentlemen:
In consideration for you entering into that certain Share Purchase and
Tender Agreement dated on even date herewith, the Company hereby agrees not to
give a Termination Notice to the Distributor in connection with its Business
Transaction with you before April 10, 1999.
In addition, each of the Company and you, on behalf of BBI and the
Distributor, agree that as soon as practicable after the consummation of the
Business Transaction between you and BBI we shall enter into the Fourth
Amendment to the Distribution Agreement, which shall be in substantially the
form attached hereto as Exhibit A.
All terms not otherwise defined herein shall have the same meaning
afforded in the Distribution Agreement.
New Dimension Software, Inc.
By: /s/ RONI A. EINAV
---------------------------------------
Name: Roni A. Einav
-------------------------------------
Title: Chairman
------------------------------------
By: /s/ DAN BARNEA
---------------------------------------
Name: Dan Barnea
-------------------------------------
Title: CEO
------------------------------------
Agreed and Accepted this
7th day of March, 1999:
BMC Software, Inc.
By: /s/ M. BRINKLEY MORSE
----------------------------------
Name: M. Brinkley Morse
Title: Senior Vice President
<PAGE> 2
EXHIBIT A
FOURTH AMENDMENT
TO
DISTRIBUTION AGREEMENT
DATED OCTOBER 28, 1994 AS AMENDED ON
APRIL 24, 1997, OCTOBER 31, 1997 AND MARCH , 1999
This Amendment is made and entered into as of this ____ day of __________, 1999.
Among
NEW DIMENSION SOFTWARE LTD.
a corporation organized and existing under the laws of Israel
with its principal place of business at Bldg. 7, Alaim
Industrial Park, P. O. Box 43227, Tel Aviv, Israel 61430
(hereinafter referred to as: the "Company")
and
BOOLE & BABBAGE EUROPE
a corporation organized and existing under the laws of the
Republic of Ireland with its principal place of business at
Sadyford Business Centre, Burtonhall Road, Faxrock Dublin 19,
Ireland (hereinafter referred to as: the "Distributor")
WHEREAS on October 26, 1994, the Company and the Distributor entered
into a distribution agreement (hereinafter: "the 1994
Distribution Agreement") whereby the Distributor was granted
exclusive distribution rights in certain territories with
respect to certain proprietary Software Products of the
Company; and
WHEREAS the 1994 Distribution Agreement has been amended by the
Company and Distributor on April 24, 1997 (hereinafter: the
"First Amendment"), on October 31, 1997 (hereinafter: the
"Second Amendment") and on March ___, 1999 (hereinafter: the
"Third Amendment") and the Company, Distributor and Boole &
Babbage, Inc., the parent company of Distributor ("Boole"),
have entered into that certain letter agreement dated December
22, 1998, which provides for additional agreements between the
Company and Distributor with respect to the Company's right to
notify Distributor of its termination of the Distribution
Agreement in connection with the announcement by BMC Software,
Inc. ("BMC") of its acquisition of Boole (the "Letter
Agreement"); and
-1-
<PAGE> 3
WHEREAS the Company and Distributor wish to amend certain provisions
of the 1994 Distribution Agreement, the First Amendment, the
Second Amendment, the Third Amendment and the Letter
Agreement, subject to and in accordance with the provisions
and conditions herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereby agree as follows:
1. Preamble, Schedules and Captions
The Preamble to this Fourth Amendment constitutes an integral part
hereof. This Fourth Amendment's captions are provided for the sake of
convenience and shall not be used to construe the provisions hereof.
2. Definition, Terms and Provisions of the 1994 Distribution Agreement,
First Amendment, Second Amendment, Third Amendment and the Letter
Agreement
Except as expressly provided for herein, all the definitions, terms and
provisions of the 1994 Distribution Agreement, the First Amendment, the
Second Amendment, Third Amendment and the Letter Agreement shall apply
hereto mutatis mutandis.
3. Sections 7.2 and 7.3 of the 1994 Distribution Agreement are hereby
amended to read in their entirety as follows:
"7.2 The Terminating Party may terminate the Agreement, should it
elect to do so at its sole and exclusive discretion, during a
period of 10 (ten) months as of the last day of the quarter in
which the Triggering Event has occurred (or, in the event of a
Business Transaction by the Distributor with BMCS, occurring
at any time between the effective date of the Second Amendment
(October 31, 1997) and up to December 31, 1999) by giving the
other party a written notice of its intention to so terminate
the Agreement (hereinafter: the "Termination Notice");
provided, that the Company shall not give a Termination Notice
to the Distributor in connection with its Business Transaction
with BMC Software before the day first succeeding the
termination of BMC Software's tender offer to acquire ordinary
shares NIS 0.01 of the Company.
7.3 If a Termination Notice has been given by the Terminating
Party to the other party hereof, the Agreement shall be
terminated within 60 days as of the receipt of such
Termination Notice (hereinafter the "Effective Termination
Date")."
4. Effective Date
The effective date of this Fourth Amendment is ______________, 1999.
5. General
-2-
<PAGE> 4
5.1 Other than as expressly stated and amended hereinabove the
1994 Distribution Agreement as amended in the First Amendment,
the Second Amendment and the Third Amendment and the Letter
Agreement, and the terms and provisions therein, shall
continue to exist and bind the parties and nothing contained
herein shall be deemed to derogate from or change the 1994
Distribution Agreement, and the First Amendment, the Second
Amendment and the Third Amendment and the Letter Agreement
thereof or any of the parties' rights and obligations in
accordance therewith other than as expressly provided for
herein and in the Letter Agreement. However, should any
provision herein contradict any provision of the 1994
Distribution Agreement, the First Amendment, the Second
Amendment, the Third Amendment or the Letter Agreement, this
Fourth Amendment shall prevail.
5.2 The provisions contained herein set forth the entire amendment
of the 1994 Distribution Agreement as amended in the First
Amendment, the Second Amendment and the Third Amendment with
respect to the subject matter hereof and supersedes all
previous communications, representations or agreements
(excluding the Letter Agreement), whether oral or written with
respect to the subject matter hereof.
5.3 Subject to any legal duty to which both parties, being public
companies, are subject, the contents and timing of any public
announcement or press release regarding this Third Amendment
are to be approved in advance by the designated officers of
the parties hereto. In case of the Company the designated
officer is the Company's Chief Executive Officer and in case
of the Distributor the designated officer is the Chief
Financial Officer of Boole & Babbage Inc.
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment.
New Dimension Software Ltd. Boole & Babbage Europe
By: By:
------------------------------ ------------------------------
Name: Name:
---------------------------- ----------------------------
Title: Title:
--------------------------- ---------------------------
-3-
<PAGE> 1
- 1 -
SETTLEMENT AND RELEASE AGREEMENT
This SETTLEMENT AND RELEASE AGREEMENT ("AGREEMENT") is entered into as of the
date last signed below by and between YOSSIE HOLLANDER, an individual
("HOLLANDER"), NEW DIMENSION SOFTWARE LTD., an Israeli corporation and all of
its subsidiaries and affiliated companies including, without limitation, New
Dimension Software Inc. ("NDS"), RONI A. EINAV, an individual ("EINAV"), DALLA
PRASHKER an individual ("PRASHKER"), EINAV COMPUTER SYSTEMS LTD., an Israeli
corporation ("ECS"), YEHUDA KAHANE, an individual ("KAHANE"), NACHUM ROZMAN, an
individual ("ROZMAN"), ELI TALMOR, an individual ("TALMOR").
WHEREAS Hollander, NDS, Einav, Prashker and ECS have been involved in a
variety of business and employment relationships, which the Parties
wish to terminate; and
WHEREAS Hollander and other Parties to this Agreement have been engaged in
several litigation, lawsuits and court proceedings, listed on EXHIBIT
A hereto; and
WHEREAS NDS and BMC Software Inc., a corporation organized under the laws of
Delaware, U.S("BMC"), are negotiating a business combination (the
"PROPOSED TRANSACTION"). A proposed draft Stock Purchase and Tender
Agreement (the "DRAFT AGREEMENT") is attached hereto in EXHIBIT "B".
All Parties to this Agreement hereby represent that they wish that the
Proposed Transaction will occur and be successful.
WHEREAS the Parties now desire to finally compromise, settle and discharge all
disputes, claims, controversies, demands, actions or causes of action
that they may have against the any of the other parties, all as set
forth herein.
NOW THEREFORE, in consideration of the promises, covenants and other good and
valuable consideration set forth herein, it is hereby agreed by and
between the Parties as follows:
1.1. PREAMBLE, SCHEDULE AND CAPTIONS
The Preamble and Schedules to this Agreement constitute an integral
part hereof. The Agreement's captions are provided for the sake of
convenience only and shall not be used to constitute the provisions
hereof.
<PAGE> 2
-2-
2.2. DEFINITIONS
IN THIS AGREEMENT:
"EFFECTIVE DATE" - this Agreement is conditioned upon, and shall be
effective only on the Closing of the Proposed Transaction (as such a
term is defined in the Draft Agreement).The Closing date of the
Proposed Transaction shall be deemed as the Effective date of this
Agreement. Should the Proposed Transaction not Close prior to the
Termination Date, all promises, covenants and releases given in this
Agreement, and the Agreement itself, shall be null, void and
unenforceable and with no further force or effect.
"TERMINATION DATE" June 30, 1999, provided the Effective Date does not
occur prior thereto;
"DIRECTORS" - shall mean each and any of NDS past and present
directors.
"RELEASEES" - shall mean each and any of the parties to this Agreement,
MICHAEL KARASH, an individual, the Directors and any and all of their
present and past agents, professional and other advisors and
consultants, including without limitation, all of their auditors and
legal counsel, and all of any of the above past and present officers
employees and agents, and their heirs, executors, administrators,
successors; provided, however, that each of Rafi Oz and Michael Karash
can not be a Releasee and will not benefit from any of the terms of
this Agreement until the date in which such a person executes a release
agreement releasing all the parties to this Agreement from any and all
claims, all in terms which are similar to the terms of this release
Agreement; and further provided that each person who is not a party to
this Agreement can not be a Releasee and will not benefit from any of
the Release terms of this Agreement if such a person files or submits
any claim, or asserts any Cause of Action against any party to this
Agreement ."LITIGATION" - the litigation listed in EXHIBIT "A" hereto
which the parties represent and warrant is a true and complete list of
all such actions between them;
"CAUSES OF ACTION" - shall mean any and all causes of action, direct or
indirect, of any kind and nature whatsoever whether included in the
Litigation or not, which any party to this Release Agreement or any
other Releasee , has, had, or may have against any other party to this
Release Agreement or any other Releasee, all regarding any issue or
matter whatsoever pertaining directly or indirectly to NDS, including,
without limitation, the following issues and matters:
2.1.2.1. NDS and any and all of its affairs, actions and resolutions, including,
without limitation, resolutions or actions of its General
<PAGE> 3
-3-
Meeting of Shareholders and/or Board of Directors and Committees or
sub-committees thereof and any other matter or issues pertaining to any
of the above;
2.2.2.2. The Shareholders Agreement signed between Hollander and Einav, Prashker
and ECS on October 5, 1992 and any and all amendments thereto;
2.3.2.3. Any act, action, deed, omission or representation of each and any of
Releasees in any capacity whatsoever, including without limitation in
their capacity as NDS' shareholders, directors, officers, employees, or
professional or other advisors, regarding, or on behalf, or in the name
of NDS;
2.4 2.4. Any and all claims or causes of action which are the subject matter of
or are mentioned in any of the Litigation provided for in Exhibit "A"
hereto.
3.3. DISMISSAL OF LEGAL PROCEEDINGS
THE PARTIES HEREBY EXPRESSLY REPRESENT, AGREE AND WARRANT THAT:
3.1.3.1. Immediately upon the signature hereof, each of the parties, where
appropriate, jointly, directly or through their legal counsel, shall
request, that any and all Litigation shall be suspended until
Termination Date or until the Effective Date, whichever date comes
first.
3.2.3.2. Without derogating from the Release provided for in Section 4 below,
which shall come into effect on the Effective Date, non of the parties
to this Agreement shall initiate or commence and legal proceedings
against any other party to this Agreement prior to the Termination
Date.
3.3.3.3. All Litigation, lawsuits, actions and proceedings between them shall be
terminated with prejudice as soon as possible on or after the Effective
Date.
4. 4. RELEASE
4.1.4.1. Each and any of the parties to this Agreement or any other Releasee
under this Agreement, in any capacity whatsoever, including without
limitation in its capacity as a shareholder, director, officer or
employee of NDS, hereby irrevocably releases, discharges and holds each
and any of the other Releasees harmless (the "RELEASE") from any and
all Causes of Action (as herein defined) it ever had, now has or
hereafter can, shall or may have, for, upon, or by reason of any
matter, cause or thing whatsoever from the beginning of the world
to the
<PAGE> 4
-4-
Effective Date, each other party to this Agreement or any other
Releasee.
4.2.4.2. For the avoidance of any doubt each and any party to this Agreement
hereby expressly declares, represents, agrees, warrants and covenants
that the Release provided for herein shall apply and shall be valid and
binding, notwithstanding any claim or argument that any fact, matter or
information whatsoever, pertaining to any matter or issue which are the
subject matter of this Release, were not in any party's possession or
knowledge. Each and any party to this Agreement acknowledges that all
other parties to the Agreement have been induced and have agreed to
enter the Agreement based, inter alia, upon the provisions of the
sub-Section 4.2 hereof, which constitutes a material covenant of this
Release and of the Settlement Agreement.
4.3.4.3. As part of this Release Agreement, NDS and Hollander hereby acknowledge
that the termination ("TERMINATION") of Hollander's Employment on
December 1995 from employment with NDS or any of its affiliates was not
a "Termination for Cause" (as such a term is referred to in the
Employment Agreement entered into between Hollander and NDS, dated
January 1, 1992), and Hollander acknowledges that on the Effective Date
he shall not have any financial or other claims of any kind and nature
whatsoever against NDS or against any of the Releasees in connection
with the Termination and the Release provided for under this Agreement
applies to the Termination same as to all other matters pertaining or
relating to NDS, as provided for herein.
5.5. PROPOSED TRANSACTION
5.1.5.1. NDS will discuss and negotiate with BMC the terms and conditions of the
Proposed Transaction at NDS' full and exclusive discretion. Hollander's
counsel may take part as observers at all discussions and negotiations
between NDS and BMC.
5.2.5.2. For the avoidance of all doubt, all parties hereby expressly represent,
declare and warrant that as of the date of execution of this Agreement
no arrangements, understandings or agreements have been made by and
between each and any of them and BMC granting any of them any executive
role or position in the corporation to be formed as a result of the
Proposed Transaction or any of its subsidiaries or in their respective
Board of Directors.
6.6. CERTAIN PAYMENTS
6.1.6.1. If any payment (the "Payment") to any director will be made by NDS on
the Effective Date and such payment will, in the opinion of NDS,
require the approval of NDS Shareholders, all in accordance with
<PAGE> 5
-5-
the Draft Agreement, Hollander undertakes not to vote against the
proposed Payment in a meeting of shareholders called upon to approve
the Payment.
6.2.6.2. It is additionally agreed between the parties hereto that upon closing
of the Proposed Transaction contemplated under the Draft Agreement NDS
shall reimburse Hollander for legal expenses incurred in connection
with the Litigation and the Proposed Transaction in an amount of
$500,000 (five thousand US$) (and additionally VAT, payable against a
duly issued VAT invoice) which shall be paid directly by NDS to
Hollander's Israeli counsel.
7.7. TERMINATION OF SHAREHOLDERS' AGREEMENT
On the Effective Date the Shareholders Agreement (the "SHAREHOLDERS
AGREEMENT") signed between Hollander and Einav, Prashker and ECS on
October 5, 1992 and any and all amendments thereto shall be
automatically terminated without any additional act or action by any
party thereof. Notwithstanding anything else herein to the contrary
Section [ ] of this Shareholders Agreement (restrictions on sales of
securities) shall be suspended and have no effect upon the date of this
Agreement and until the Termination of the Agreement or the Effective
Date.
8.8. GENERAL TERMS AND CONDITIONS
8.1.8.1. AGREEMENT IN FAVOR OF A THIRD PARTIES
The provisions of this Release Agreement constitute an "Agreement In
Favor Of Third Parties" within the meaning of this term in Chapter D of
the Israeli Contract Law (General Part) 1973.
8.2.8.2. SEVERABILITY
If any provision of this Agreement shall be declared void, the validity
of any other provision and of the entire Agreement shall not be
affected thereby.
8.3.8.3. PROPER LAW AND JURISDICTION
This Agreement shall be exclusively governed by, and shall be construed
exclusively in accordance with the laws of the State of Israel and the
District Court of Tel Aviv Israel shall have the exclusive jurisdiction
over any dispute or controversy with respect to this Agreement,
including, without limitation, its existence, interpretation, execution
and implementation.
<PAGE> 6
-6-
8.4.8.4. GOVERNING LANGUAGE
The Agreement is in English language only, which language shall control
in all respects. No translation, if any, of this Agreement into any
other language shall be of any force or effect in the interpretation of
this Agreement or in a determination of the intent of either party
hereto.
8.5.8.5. WAIVER
The failure at any time of either party to enforce any of the
provisions of the Agreement or any right with respect thereto or to
exercise any option herein provided, will in no way be construed to be
a waiver of such provisions, rights or options, or in any way to affect
the validity of this Agreement.
8.6.8.6. COMPLETE AGREEMENT
The provisions herein contained set forth the entire Agreement of the
parties with respect to the subject matter hereof, and supersede all
previous communications, representations or agreements, whether oral or
written, with respect to the subject matter hereof, and no addition to
or modification of this Agreement shall be binding upon another party
unless reduced to writing and signed by both parties hereto.
8.7.8.7. NOTICES
Any notice required or authorized to be given hereunder shall be served
by hand delivery or by certified letter return receipt requested or by
facsimile addressed to each of the parties hereto (as the case may be),
at the following addresses:
-----------------------
Any notice delivered by hand shall be deemed to have been served upon
delivery.
Any notice given by letter shall be deemed to have been served seven
(7) days after the same shall have been posted, not including the day
of posting, and any notice given by facsimile shall be deemed to have
been served on the day of sending the message.
Proof that such letter was properly addressed and put into the post,
and in the case of telex that the message was sent to the correct
facsimile number, shall be conclusive evidence of service. Notices
required by this Agreement shall be addressed to any other address as
may from time to time be specified by either party by written notice to
the other.
<PAGE> 7
-7-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ YOSSIE HOLLANDER
- ---------------------------
YOSSIE HOLLANDER
<PAGE> 8
-8-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ RONI A. EINAV /s/ DAN BARNEA
- -------------------------------- --------------------------------
NEW DIMENSION SOFTWARE LTD.
[LOGO]
<PAGE> 9
-9-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ RONI A. EINAV
- --------------------------------
RONI A. EINAV
<PAGE> 10
-10-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ DALIA PRASHKER
- --------------------------
DALIA PRASHKER
<PAGE> 11
-11-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ RONI A. EINAV /s/ DALIA PRASHKER
- ------------------------------- -------------------------------
EINAV COMPUTER SYSTEMS LTD. EINAV COMPUTER SYSTEMS LTD.
<PAGE> 12
-12-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ YEHUDA KAHANE
- --------------------------------
YEHUDA KAHANE
<PAGE> 13
-13-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ NACHUM ROZMAN
- ---------------------------------
NACHUM ROZMAN
<PAGE> 14
-14-
SIGNATURE PAGE OF THE SETTLEMENT AND RELEASE AGREEMENT
In witness thereof, the parties have executed this Settlement and Release
Agreement:
/s/ ELI TALMOR
- ---------------------------------
ELI TALMOR
<PAGE> 15
EXHIBIT A
THE LITIGATIONS
Originating Motion File No. 2010/94 (including Motions No. 12884/95 and
13838/95 thereof) in the District Court of Tel Aviv
Civil Appeal Files No. 546/96 and 959/96 in the Supreme Court of Israel
Action in Civil File No. 582/96 in the District Court of Tel Aviv and (cross)
Counter claim therein
Action (case) No. 749047 filed on June 23, 1995 with the Superior Court of the
State of California, County of Orange
Action (case) No. 744032 filed on March 10, 1995 with the Superior Court of the
State of California, County of Orange
Action (case) No. 747103 filed on May 15, 1995 with the Superior Court of the
State of California, County of Orange
Master File SACV-94-279 AHS (RWRX) filed with U.S. District Court, Central
District of California on March 1994
Action in Originating Motion File No. 882/97 in the District Court of Tel Aviv
Origination Motion File No. 821/93 in the District Court of Tel Aviv
