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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
VIASOFT, INC.
(NAME OF SUBJECT COMPANY)
CV ACQUISITION, INC.
COMPUWARE CORPORATION
(BIDDER)
COMMON STOCK, $0.001 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
92552U102
(CUSIP NUMBER OF CLASS OF SECURITIES)
THOMAS COSTELLO, JR., ESQ.
CV ACQUISITION, INC.
COMPUWARE CORPORATION
31440 NORTHWESTERN HIGHWAY
FARMINGTON HILLS, MI 48334-2564
TELEPHONE: (248) 737-7300
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
COPIES TO:
DONALD J. KUNZ, ESQ.
DAVID E. BARNES, ESQ.
HONIGMAN MILLER SCHWARTZ AND COHN
2290 FIRST NATIONAL BUILDING
DETROIT, MI 48226
TELEPHONE: (313) 465-7800
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING**
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$161,159,724 $32,232
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* Estimated for purposes of calculating the amount of filing fee only. The
amount assumes the purchase of 17,906,636 shares of common stock, $0.001 par
value, of Viasoft, Inc., at $9.00 per share in cash. Such number of shares
represents all the shares outstanding as of July 14, 1999.
** The amount of the filing fee was calculated in accordance with Rule 0-11(d)
under the Exchange Act.
[ ] 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.
Amount Previously Paid: None.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
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ITEM 1: SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Viasoft, Inc., a Delaware
corporation (the "Company"), which has its principal executive offices at 3033
North 44th Street, Phoenix, Arizona 85018.
(b) This Statement on Schedule 14D-1 relates to the offer by Purchaser
(defined below), to purchase all outstanding shares of Common Stock, $0.001 par
value, of the Company (the "Shares"), at $9.00 per Share, net to the seller in
cash, without interest, upon the terms and subject to the conditions set forth
in the Offer to Purchase (the "Offer to Purchase") and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2)
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer"). The information set forth in the Introduction to and
Section 1 ("Terms of this Offer; Expiration Date") of the Offer to Purchase is
incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in that market set
forth in Section 6 ("Price Range of Shares; Dividends") 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 CV Acquisition, Inc., a
Delaware corporation ("Purchaser"), and Compuware Corporation, a Michigan
corporation ("Compuware"). Purchaser is a wholly-owned subsidiary of Compuware.
The information concerning the principal businesses and address of the principal
office of Purchaser and Compuware and the information concerning the name,
business address, present principal occupation or employment and the name,
principal business and address of any corporation or other organization in which
such employment or occupation is conducted, material occupations, positions,
offices or employments during the last five years and citizenship of each of the
executive officers and directors of Purchaser and Compuware are set forth in the
Introduction to and Section 8 ("Certain Information Concerning Purchaser and
Compuware") of and Schedule I to the Offer to Purchase and are incorporated
herein by reference.
(e) and (f) During the last five years, neither Purchaser, Compuware nor,
to the best knowledge of Purchaser and Compuware, any of the persons listed in
Schedule I of 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 and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3: PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Compuware") and Section 10 ("Background of this Offer; Contacts
with the Company; and the Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information Concerning
Purchaser and Compuware"), Section 10 ("Background of this Offer, Contacts with
the Company; and the Merger Agreement") and Section 11 ("Purpose of this Offer;
Plans for the Company After this Offer and the Merger; Appraisal Rights") of the
Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
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ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of this Offer; Contacts with the Company and the Merger Agreement")
and Section 11 ("Purpose of this Offer; Plans for the Company After this Offer
and the Merger; Appraisal Rights") of the Offer to Purchase is incorporated
herein by reference.
(f) and (g) The information set forth in Section 13 ("Effect of this Offer
on the Market for the Shares, Nasdaq Quotation and Exchange Act Registration")
of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) None.
(b) None.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Compuware"), Section 10 ("Background of
this Offer, Contacts with the Company; and the Merger Agreement") and Section 11
("Purpose of the Offer; Plans for the Company After this Offer and the Merger;
Appraisal Rights") 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 and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The financial statements of Compuware contained in its annual report on
Form 10-K for the fiscal year ended March 31, 1999 are incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b) and (c) The information set forth in Section 15 ("Certain Legal
Matters: Regulatory Approvals") of the Offer to Purchase is incorporated herein
by reference.
(d) Not applicable.
(e) The information set forth in Section 15 ("Certain Legal Matters:
Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Merger Agreement is incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated July 22, 1999.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
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(a)(5) Form of Letter to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in the New York Times on July 22,
1999.
(a)(8) Text of Joint Press Release by Compuware and the Company dated July
15, 1999.
(b)(1) Commitment Letter, dated July 14, 1999, from Morgan Stanley Senior
Funding, Inc. and Comerica Bank to Compuware.
(c)(1) Agreement and Plan of Merger, dated as of July 14, 1999, among
Compuware, Purchaser and the Company.
(c)(2) Shareholder Tender and Voting Agreement, dated as of July 14, 1999,
among Purchaser and certain officers, directors and shareholders of the Company.
(c)(3) Confidentiality Agreement, dated as of June 2, 1999, between
Compuware and the Company.
(d) None.
(e) Not applicable.
(f) None.
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SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certify that the information set forth in this Statement
is true, complete and correct.
July 22, 1999
CV ACQUISITION, INC.
By: /s/ THOMAS COSTELLO, JR.
-----------------------------------
Name: Thomas Costello, Jr.
Title: Vice President, Secretary
and Treasurer
COMPUWARE CORPORATION
By: /s/ LAURA FOURNIER
-----------------------------------
Name: Laura Fournier
Title: Senior Vice President and Chief
Financial Officer
5
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EXHIBIT INDEX
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EXHIBIT
NUMBER EXHIBIT NAME
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(a)(1) Form of Offer to Purchase dated July 22, 1999.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(5) Form of Letter to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in the New York Times on
July 22, 1999.
(a)(8) Text of Joint Press Release by Compuware and the Company
dated July 15, 1999.
(b)(1) Commitment Letter, dated July 14, 1999, from Morgan Stanley
Senior Funding, Inc. and Comerica Bank to Compuware.
(c)(1) Agreement and Plan of Merger, dated as of July 14, 1999,
among Compuware, Purchaser and the Company.
(c)(2) Shareholder Tender and Voting Agreement, dated as of July
14, 1999, among Purchaser and certain officers, directors
and shareholders of the Company.
(c)(3) Confidentiality Agreement, dated as of June 2, 1999, between
Compuware and the Company.
(d) None.
(e) Not applicable.
(f) None.
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6
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EXHIBIT (A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
VIASOFT, INC.
AT
$9.00 NET PER SHARE
BY
CV ACQUISITION, INC.
A WHOLLY OWNED SUBSIDIARY OF
COMPUWARE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON THURSDAY, AUGUST 19, 1999,
UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON (1) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A MAJORITY OF THE SHARES
OF VIASOFT, INC. COMMON STOCK OUTSTANDING, ON A FULLY DILUTED BASIS, AT THE
CLOSE OF BUSINESS ON THE LAST BUSINESS DAY BEFORE THE OFFER EXPIRES, (2) THE
EXPIRATION OR TERMINATION OF THE APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 AND (3) THE OTHER
CONDITIONS DESCRIBED HEREIN.
THE BOARD OF DIRECTORS OF VIASOFT, INC. HAS UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER REFERRED TO HEREIN ARE FAIR TO, AND IN THE BEST INTERESTS
OF, THE SHAREHOLDERS OF VIASOFT, INC. AND RECOMMENDS THAT THE SHAREHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
shares of common stock, $0.001 par value, of Viasoft, Inc. should either: (1)
complete and sign the Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal and mail or
deliver it together with the certificate(s) evidencing tendered shares, and any
other required documents, to the Depositary or tender such shares pursuant to
the procedure for book-entry transfer set forth in Section 3 below 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.
A shareholder who desires to tender shares and whose certificates
evidencing such shares are not immediately available, or who cannot comply with
the procedure for book-entry transfer on a timely basis, may tender such shares
by following the procedure for guaranteed delivery set forth in Section 3 below.
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
July 22, 1999
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TABLE OF CONTENTS
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PAGE
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Introduction...................................................... 3
1. Terms of this Offer; Expiration Date........................ 4
2. Acceptance for Payment and Payment for Shares............... 5
3. Procedures for Accepting this Offer and Tendering Shares.... 6
4. Withdrawal Rights........................................... 8
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares; Dividends............................ 10
7. Certain Information Concerning the Company.................. 10
8. Certain Information Concerning Purchaser and Compuware...... 11
9. Source and Amount of Funds.................................. 13
10. Background of this Offer; Contacts with the Company; and the 14
Merger Agreement............................................
11. Purpose of this Offer; Plans for the Company After this
Offer and the Merger;
Appraisal Rights............................................ 26
12. Dividends and Distributions................................. 27
13. Effect of this Offer on the Market for the Shares, Nasdaq 27
Quotation and Exchange Act Registration.....................
14. Certain Conditions of the Offer............................. 28
15. Certain Legal Matters and Regulatory Approvals.............. 30
16. Fees and Expenses........................................... 32
17. Miscellaneous............................................... 32
Schedule I -- Directors and Executive Officers of Purchaser and
Compuware......................................................... I-1
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TO THE HOLDERS OF COMMON STOCK OF
VIASOFT, INC.
INTRODUCTION
THIS OFFER. A wholly owned subsidiary of Compuware Corporation is offering
to purchase all outstanding shares of Common Stock (including the associated
Preferred Share Purchase Rights ("RIGHTS") issued pursuant to the Viasoft Rights
Agreement) of Viasoft for $9.00 per share, net to the seller in cash (the "OFFER
PRICE"), on the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together constitute
this "OFFER"). The Offer Price will be payable to you without interest and will
be subject to reduction for any federal back-up taxes or other withholding or
stock transfer taxes that may be applicable.
Compuware is a Michigan corporation. The wholly owned subsidiary of
Compuware that is making this tender offer, CV Acquisition, Inc., is a Delaware
corporation ("PURCHASER"). Viasoft, Inc. is a Delaware corporation and is
referred to herein as the "COMPANY." Its shares of Common Stock, $0.001 par
value, are referred to as the "SHARES."
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to this Offer. Purchaser will pay all charges and expenses of
EquiServe (the "DEPOSITARY") and Innisfree M&A Incorporated (the "INFORMATION
AGENT") incurred in connection with this Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THIS
OFFER AND THE MERGER REFERRED TO HEREIN ARE ADVISABLE AND FAIR TO, AND IN THE
BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY AND RECOMMENDS THAT
SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Broadview International LLC, the Company's financial advisor, has delivered
to the Company's Board of Directors its written opinion dated July 14, 1999 to
the effect that, as of the date of such opinion and based upon and subject to
certain matters stated in such opinion, the consideration to be received by
holders of the Shares pursuant to this Offer and related merger is fair to the
shareholders of the Company from a financial point of view. This opinion is set
forth in an exhibit to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 which is being mailed to shareholders of the Company herewith.
THIS OFFER IS CONDITIONED UPON: (1) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THIS OFFER AT LEAST A MAJORITY OF THE
SHARES OUTSTANDING, ON A FULLY DILUTED BASIS, AT THE CLOSE OF BUSINESS ON THE
LAST BUSINESS DAY BEFORE THIS OFFER EXPIRES, (2) THE EXPIRATION OR TERMINATION
OF THE APPLICABLE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976 AND (3) THE OTHER CONDITIONS DESCRIBED IN SECTION 14
BELOW.
THE MERGER. This Offer is being made pursuant to an Agreement and Plan of
Merger dated as of July 14, 1999 among Purchaser, Compuware and the Company (the
"MERGER AGREEMENT"). Under the Merger Agreement, the parties have agreed that,
following this Offer and upon the satisfaction or waiver of certain conditions
set forth in the Merger Agreement, Purchaser will be merged with the Company in
a merger (the "MERGER") in which the Company will be the surviving corporation
and will become a wholly owned subsidiary of Compuware. When the Merger occurs,
all the outstanding Shares (other than the Shares owned by Compuware, Purchaser
or any other subsidiary of Compuware, any Shares held in the Company's treasury
and any Shares as to which shareholders have duly exercised appraisal rights
under Delaware law) will be automatically canceled and converted into the right
to receive cash in an amount per share equal to the Offer Price, without
interest. Each stock option outstanding at the time of the Merger that was
granted by the Company under the Company's Stock Option Plans (as defined in the
Merger Agreement) will, following the Effective Time, be fully vested, and upon
due exercise and payment of the exercise price of such option, entitle the
optionee to receive an amount of cash per share equal to the Offer Price,
without interest; provided that any such option that is not duly exercised
within thirty days after the effective time of the Merger will automatically
expire. The Company's Employee Stock Purchase Plan will terminate when the
Merger occurs
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(unless terminated before then in accordance with its terms). If terminated upon
the Merger, the Company will cause a final purchase of Shares to be made under
the plan on the last trading day before the Merger.
Under Delaware law, if Purchaser acquires at least 90% of the Company's
then outstanding Shares, Purchaser will be able to approve the Merger without a
vote of the Company's shareholders. Thus, if at least 90% of the outstanding
Shares are tendered (as of the close of business on the last business day before
the Offer expires), it is expected that Purchaser will cause the Merger to occur
without a shareholder vote.
If, following the expiration of this Offer, at least a majority of the
Shares, on a fully diluted basis, but less than 90% of the Shares, are tendered,
then, upon the satisfaction of the conditions to the Offer, Purchaser will
purchase the Shares as tendered, and, as soon as practicable following the
expiration of this Offer, the Company will call a meeting of its shareholders
for the purpose of obtaining shareholder approval of the Merger and the Merger
Agreement. See Section 10 below.
Purchaser has entered into a Shareholder Tender and Voting Agreement with
all directors and officers of the Company and their affiliates. These
shareholders own, in the aggregate, approximately 356,434 Shares, constituting
approximately 2.0% of all Shares outstanding on July 14, 1999. Under the
agreement, each such shareholder agreed (i) to tender pursuant to this Offer all
Shares currently owned or later acquired by the shareholder and not to withdraw
such tender (subject to applicable law) unless and until the Merger Agreement is
terminated in accordance with its terms, (ii) if this Offer is not consummated
and if approval by the Company's shareholders of the Merger is sought, then,
until termination of the Merger Agreement, to vote such Shares in favor of the
Merger and against any competing proposal, merger, consolidation, sale of
assets, reorganization or recapitalization, or any liquidation or winding up of
the Company, (iii) not to sell, transfer, encumber, pledge, dispose of or grant
an option with respect to such Shares until the earlier of termination of the
Merger Agreement or the record date for the meeting at which shareholders of the
Company are asked to vote on the Merger (other than pursuant to this Offer or
with certain other exceptions) and (iv) from the consummation of this Offer to
the closing of the Merger, not to exercise stock options for Shares or other
rights to acquire capital stock of the Company.
OUTSTANDING SHARES AND STOCK OPTIONS. The Company has advised Purchaser
that, as of July 12, 1999, 17,906,636 shares were issued and outstanding and a
total of 3,338,681 shares were reserved for issuance upon exercise of
outstanding employee stock options granted pursuant to the Company's Stock
Option Plans and otherwise.
GOING PRIVATE RULE. Rule 13e-3 under the Exchange Act requires that, in the
case of a "going private" transaction involving a company, certain financial
information concerning the company and certain information relating to the
fairness of the proposed transaction and the consideration offered to minority
shareholders in the transaction be filed with the Securities and Exchange
Commission and disclosed to shareholders prior to consummation of the
transaction. Purchaser believes that Rule 13e-3 will not be applicable to this
Offer or the Merger but it cannot assure you that the Securities and Exchange
Commission will agree. The Commission might take the position that Rule 13e-3
applies to this Offer or the Merger and might require Purchaser to provide
additional information pursuant to the rule.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ IN ITS ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THIS OFFER.
1. TERMS OF THIS OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of this Offer (including, if this Offer is extended or amended, the
terms and conditions of such extension or amendment), Purchaser will accept for
payment and pay for all Shares validly tendered and not withdrawn prior to the
expiration of this Offer. This Offer will expire at 12:00 Midnight, Eastern
Time, on Thursday, August 19, 1999 or any later date to which this Offer is
extended in accordance with the Merger Agreement.
Purchaser may extend the expiration of this Offer as required by the
Exchange Act or, if not required by the Exchange Act, only within the following
limitations: (i) Purchaser may not extend this Offer beyond five business days
after August 19, 1999 unless, in Purchaser's reasonable judgment, it is
reasonably likely that any condition of this Offer which is not satisfied as of
the date on which the extension is made will be satisfied
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during the extension and (ii) Purchaser may not extend this Offer beyond 20
business days following August 19, 1999 without the Company's consent. During
any such extension, all Shares previously tendered and not withdrawn will remain
subject to this Offer, except that the Shares may be withdrawn as indicated in
Section 4 below.
Subject to the regulations of the Securities and Exchange Commission,
Purchaser expressly reserves the right (subject to the terms and conditions of
the Merger Agreement), (i) to terminate or amend this Offer and not accept for
payment any Shares if the conditions to this Offer are not satisfied upon the
expiration date of this Offer (as it may be extended as described in the
preceding paragraph), (ii) to waive any condition of this Offer, (iii) to
increase the price per share payable in this Offer or to make any other changes
in the terms and conditions of this Offer, except that, without the Company's
consent, no such change may be made which (a) decreases the price per Share
payable pursuant to this Offer, (b) reduces the minimum (including by waiver of
the condition that a majority of the outstanding Shares, on a fully diluted
basis, be tendered) or maximum number of Shares to be purchased in this Offer,
(c) imposes conditions to this Offer in addition to those set forth in Section
14 below, (d) changes the form of consideration payable in this Offer or (e)
amends any other material terms of this Offer in a manner materially adverse to
the Company's shareholders. Purchaser acknowledges that Rule 14e-1(c) under the
Exchange Act requires Purchaser to pay the consideration offered or return the
Shares tendered promptly after the termination or withdrawal of this Offer.
If Purchaser makes a material change in the terms of this Offer or the
information concerning this Offer, or if it waives a material condition of this
Offer, Purchaser will extend this Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14(e)-1 under the Exchange Act which require that
material changes be promptly disseminated to shareholders in a manner reasonably
designed to inform them of the changes.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser decides to increase the consideration being offered in this
Offer, such increase in the consideration being offered will be applicable to
all shareholders whose Shares are accepted for payment pursuant to this Offer
and, if at the time notice of any such increase in the consideration being
offered is first published, sent or given to holders of such Shares, this Offer
is scheduled to expire at any time earlier than the period ending on the tenth
business day from and including the date that such notice is first so published,
sent or given, this Offer will be extended at least until the expiration of such
ten business day period. For purposes of this Offer, a "BUSINESS DAY" means any
day other than a Saturday, Sunday or federal holiday and consists of the time
period from 12:01 a.m. through 12:00 Midnight, Eastern Time.
The Company has provided Purchaser with the Company's shareholder list and
security position listings for the purpose of disseminating this Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares whose names appear on the Company's
shareholder list and will be furnished, for subsequent transmittal to beneficial
owners of Shares, to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
shareholder list, or, if applicable, who are listed as participants in a
clearing agency's security position listing.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the satisfaction (or waiver, to the extent permitted by the Merger
Agreement) of conditions of this Offer (including, if this Offer is extended or
amended, the terms and conditions of the extension or amendment), Purchaser will
accept for payment, and will pay for, all Shares validly tendered and not
properly withdrawn as soon as practicable after the expiration of this Offer.
In all cases, payment for Shares tendered and accepted for payment pursuant
to this Offer will be made only after timely receipt by the Depositary of (i)
the certificates evidencing the Shares (the "SHARE CERTIFICATES") or timely
confirmation of a book-entry transfer (a "BOOK ENTRY CONFIRMATION") of the
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 below, (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as defined below) in connection with a book-entry transfer and
(iii) any other documents required by the Letter of Transmittal. Accordingly,
payment may be made to tendering shareholders at different times if delivery of
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the Share Certificates and other required documents occurs at different times.
See Section 3 below for a description of the procedure for tendering Shares
pursuant to this Offer.
The term "AGENT'S MESSAGE" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
Compuware has filed with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "ANTITRUST DIVISION") a
Pre-merger Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR ACT") with respect to this Offer.
Accordingly, it is anticipated that the waiting period under the HSR Act
applicable to this Offer will expire fifteen calendar days after the date of
such filing. Prior to the expiration or termination of such waiting period, the
FTC or the Antitrust Division may extend such waiting period by requesting
additional information from Compuware with respect to this Offer. Upon request,
the waiting period under the HSR Act may be terminated prior to its expiration
by the FTC and the Antitrust Division. See Section 15 below.
For purposes of this Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to this
Offer. Upon the terms and subject to the conditions of this Offer, payment for
Shares accepted for payment pursuant to this 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 payments from Purchaser and
transmitting such payments to tendering shareholders whose Shares have been
accepted for payment. Under no circumstances will interest on the purchase price
for Shares be paid, regardless of any delay in making such payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of this Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the tendering
shareholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in Section 3 below, such Shares will be credited to an account
maintained at such Book-Entry Transfer Facility), as promptly as practicable
following the expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or in part, to
Compuware or any direct or indirect wholly owned subsidiary of Compuware, the
right to purchase all or any portion of the Shares tendered pursuant to this
Offer, but any such assignment will not relieve Purchaser of its obligations
under this Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to this Offer.
3. PROCEDURES FOR ACCEPTING THIS OFFER AND TENDERING SHARES. To tender
Shares pursuant to this Offer, you must deliver before the expiration of this
Offer to the Depositary at one of its addresses set forth on the back cover of
this Offer to Purchase (i) either (a) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees (and any other documents required by the Letter of
Transmittal) or (b) an Agent's Message in connection with a book-entry delivery
of shares and (ii) either (a) the Share Certificates for the tendered Shares
must be received by the Depositary at one of such addresses, (b) the Shares must
be tendered pursuant to the procedure for book-entry transfer described below
and a Book-Entry Confirmation must be received by the Depositary or (c) the
tendering shareholder must comply with the guaranteed delivery procedures
described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND 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.
6
<PAGE> 7
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect
to the Shares at the Book-Entry Transfer Facilities for purposes of this Offer
within two business days after July 22, 1999. Any financial institution that is
a participant in the system of any Book-Entry Transfer Facility may make a
book-entry delivery of Shares by causing such Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account at such Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures for
such transfer. In addition to delivery of the Shares through book-entry transfer
at a Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, and any other required documents, must, in any case, 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 of this Offer. If the shareholder cannot
complete the procedure for delivery by book-entry transfer on a timely basis,
the tendering shareholder must comply with the guaranteed delivery procedure
described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in any of
the Book-Entry Transfer Facilities' systems whose name appears on a security
position listing as the owner of the Shares) of the Shares tendered and such
registered holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (ii) if the Shares are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program (an "ELIGIBLE INSTITUTION"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If Share
Certificates are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made or Share Certificates for
Shares not tendered or not accepted for payment are to be returned to a person
other than the registered holder of the Share Certificates surrendered, the
tendered Share Certificates must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name or names of the registered
holders appear on the Share Certificates, with the signatures on the Share
Certificates or stock powers guaranteed as described above. See Instructions 1
and 5 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
this Offer and such shareholder's Share Certificates evidencing the Shares are
not immediately available or the shareholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
expiration of this Offer, or the shareholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, the Shares may nevertheless
be tendered, provided that all the following conditions are satisfied:
(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 made available by Purchaser, is
received by the Depositary prior to the expiration of this Offer; and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, together with the Letter
of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message), and any other documents required
by the Letter of Transmittal are received by the Depositary within three
Nasdaq trading days after the date of execution of such Notice of
Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the form of Notice
of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment pursuant
to this Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof),
properly
7
<PAGE> 8
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares 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 and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. Purchaser also reserves the absolute right to waive any
condition of this Offer or any defect or irregularity in the tender of any
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. None of Purchaser, Compuware, 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. 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.
OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of Purchaser as
such shareholder's 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 shares or other
securities issued or issuable in respect of such Shares on or after July 14,
1999). All such proxies shall be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, Purchaser accepts such Shares for payment. Upon such acceptance for
payment, all prior proxies given by such shareholder with respect to such Shares
(and such other Shares and securities) will be revoked without further action,
and no subsequent proxies may be given nor any subsequent written consent
executed by such shareholder (and, if given or executed, will not be deemed to
be effective) with respect thereto. The designees of Purchaser will, with
respect to the Shares (and such other Shares and securities) for which the
appointment is effective, be empowered to exercise all voting and other rights
of such shareholder as they in their sole discretion may deem proper at any
annual or special meeting of the Company's shareholders or any adjournment or
postponement thereof, by written consent in lieu of any such meeting or
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's payment for such
Shares, Purchaser must be able to exercise full voting rights with respect to
such Shares (and such other Shares and securities).
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering shareholder and Purchaser upon the terms and subject to the conditions
of this Offer.
BACKUP WITHHOLDING. Under the federal income tax laws, the Depositary will
be required to withhold a portion of the amount of the purchase price paid to
certain shareholders pursuant to this Offer. TO AVOID SUCH BACKUP WITHHOLDING,
EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S
TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH SHAREHOLDER IS NOT SUBJECT
TO BACKUP WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF
TRANSMITTAL. See Instruction 9 in the Letter of Transmittal.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to this Offer are
irrevocable except that tendered Shares may be withdrawn by the tendering
shareholder at any time prior to the expiration of this Offer and, unless
theretofore accepted for payment by Purchaser pursuant to this Offer, may also
be withdrawn by such shareholder at any time after September 16, 1999. If
Purchaser extends this Offer, is delayed in its acceptance for payment of Shares
or is unable to accept Shares for payment pursuant to this Offer for any reason,
then, without prejudice to Purchaser's rights under this Offer, the Depositary
may, on behalf of Purchaser, retain the tendered Shares, and such Shares may not
be withdrawn except as otherwise provided in this Section 4.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn,
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<PAGE> 9
the number of shares to be withdrawn and the name of the registered holder of
such Shares, if different from that of the person who tendered such Shares. If
Share certificates evidencing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
those Share certificates, the serial numbers shown on the Share Certificates
must be submitted to the Depositary and the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible Institution (unless the Shares have
been tendered for the account of an Eligible Institution). If Shares have been
tendered pursuant to the procedure for book-entry transfer described in Section
3 above, any notice of withdrawal must specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of this Offer. However, withdrawn Shares may be
re-tendered at any time prior to the expiration of this Offer by following one
of the procedures described in Section 3 above.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, which determination will be final and binding. None of Purchaser,
Compuware, 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 failure to give any such
notification.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to this Offer or in the Merger will be a taxable transaction for
federal income tax purposes and may also be a taxable transaction under
applicable state, local or foreign tax laws. In general, a shareholder will
recognize gain or loss for federal income tax purposes equal to the difference
between the amount of cash received in exchange for the Shares sold and such
shareholder's adjusted tax basis in the Shares. Assuming the Shares constitute
capital assets in the hands of the shareholder, such gain or loss will be
capital gain or loss. If, at the time of this Offer or the Merger, the Shares
then exchanged have been held for more than 12 months, such gain or loss will be
a long-term capital gain or loss. Under current law, long-term capital gains of
individuals are, under certain circumstances, taxed at lower rates than items of
ordinary income and short-term capital gains.
The foregoing is a summary of the general effect of this Offer and the
Merger under the current federal income tax laws. The summary does not address
state, local or foreign tax laws or the particular situations of specific
shareholders. Special federal income tax consequences may apply to particular
shareholders, including those that are financial institutions, pension funds,
mutual funds, broker-dealers, individuals who are not citizens or residents of
the United States, foreign corporations, foreign partnerships, foreign trusts,
shareholders who acquired the Shares pursuant to the exercise of employee stock
options or otherwise as compensation and persons who receive payments in respect
of options to purchase Shares. ALL SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN
TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES TO THEM OF THIS OFFER AND
THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM
TAX AND STATE, LOCAL AND FOREIGN TAX LAWS.
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<PAGE> 10
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and principally
traded on the Nasdaq National Market under the symbol "VIAS". The following
table sets forth the high and low sales prices per Share as reported on the
Nasdaq National Market for the quarters indicated.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
Fiscal year ending June 30, 1998:
First Quarter............................................. $ 65 1/4 $ 47
Second Quarter............................................ 54 5/8 32 1/2
Third Quarter............................................. 43 7/8 25 3/4
Fourth Quarter............................................ 29 3/8 12 3/8
Fiscal year ending June 30, 1999:
First Quarter............................................. 16 1/2 6 1/4
Second Quarter............................................ 9 2 3/4
Third Quarter............................................. 7 7/8 3 9/16
Fourth Quarter............................................ 4 11/16 3 1/32
Fiscal year ending June 30, 2000:
First Quarter (through July 21, 1999)..................... 8 11/16 3 1/2
</TABLE>
The Company has never declared or paid cash dividends on its capital stock.
On July 14, 1999, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of Purchaser's intention to commence
this Offer, the closing price per Share as reported on the Nasdaq National
Market was $6 11/32. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION
FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Neither Purchaser, Compuware,
nor any of their respective affiliates assumes any responsibility for the
accuracy or completeness of the information concerning the Company furnished by
the Company or contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Purchaser, Compuware or their respective affiliates.
GENERAL. The Company is a Delaware corporation with its principal
executive offices located at 3033 North 44th Street, Phoenix, Arizona 85018. The
Company provides business solutions that help organizations worldwide
understand, manage, evolve, reuse, transition and modernize mission-critical
applications that support their fundamental business processes. These business
solutions are provided through integrated software products and specialized
professional consulting services. The overall strategy of the Company is to
provide products and consulting services to support the application
modernization needs of large organizations worldwide, including implementation
of e-business within their operations. The Company's business solutions are
designed to assist its customers in cost effectively leveraging their investment
and the business value within their existing systems by merging applications and
data, adding proven, repeatable processes to their development and maintenance
initiatives, improving the quality of the applications and assisting in
specialized and complex redevelopment initiatives.
FINANCIAL INFORMATION. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the audited financial statements contained in the
Company's annual report on Form 10-K for the fiscal year ended June 30, 1998 and
the unaudited financial statements contained in the Company's quarterly report
on Form 10-Q for the nine months ended March 31, 1999. More comprehensive
financial information is included in those reports and in other documents filed
by the Company with the Securities and Exchange Commission. The financial
information that follows is qualified in its entirety by reference to such
reports and other documents, including
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<PAGE> 11
the financial statements and related notes contained therein. Such reports and
other documents may be examined and copies may be obtained from the offices of
the Securities and Exchange Commission in the manner set forth at the end of
this Section 7.
VIASOFT, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEAR ENDED JUNE 30, ENDED MARCH 31,
----------------------------- ------------------
1998 1997 1996 1999 1998
-------- -------- ------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................ $113,687 $ 85,312 $43,557 $ 80,818 $81,041
Operating income (loss)................. 7,482 (10,092) 6,803 (10,637) 3,802
Net income (loss)....................... 7,935 (15,436) 6,217 (5,133) 4,665
Net income (loss) per share -- basic.... $ 0.42 $ (0.90) $ 0.38 $ (0.28) $ 0.25
Net income (loss) per
share -- diluted..................... $ 0.40 $ (0.90) $ 0.36 $ (0.28) $ 0.24
Weighted average common shares
outstanding -- basic................. 18,999 17,212 16,390 18,443 18,875
Weighted average common shares
outstanding -- diluted............... 19,799 17,212 17,391 18,443 19,747
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30,
------------------
1998 1997 AT MARCH 31, 1999
-------- ------- -----------------
(UNAUDITED)
<S> <C> <C> <C>
Cash and cash equivalents................................ $ 37,809 $ 8,501 $ 29,545
Working capital.......................................... 96,257 9,855 72,856
Total assets............................................. 162,377 64,601 139,505
Total stockholders' equity............................... 115,858 28,696 98,177
</TABLE>
AVAILABLE INFORMATION. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the
Securities and Exchange Commission relating to its business, financial condition
and other matters. Information as of certain dates concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities and any material interest of such
persons in transactions with the Company is required to be disclosed in proxy
statements distributed to the Company's shareholders and filed with the
Securities and Exchange Commission. Such reports, proxy statements and other
information should be available for inspection at the public reference
facilities maintained by the Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the Securities and Exchange Commission's regional offices located
at Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such materials may also be obtained (i) by mail, upon payment of the Securities
and Exchange Commission's customary fees, by writing to its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or (ii) at the
Securities and Exchange Commission's world-wide web site at http://www.sec.gov.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND COMPUWARE. Purchaser is a
newly incorporated Delaware corporation organized in connection with this Offer
and has not carried on any activities other than in connection with this Offer
and the Merger Agreement. Purchaser is a direct wholly owned subsidiary of
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<PAGE> 12
Compuware and its principal offices are located at the same address as
Compuware's principal offices: 31440 Northwestern Highway, Farmington Hills,
Michigan 48334-2564.
Until immediately prior to the time that Purchaser purchases Shares
pursuant to this Offer, Purchaser is not expected to have any significant assets
or liabilities or engage in activities other than those incident to its
formation and capitalization and the transactions contemplated by this Offer and
the Merger. Because Purchaser is newly formed and has minimal assets and
capitalization, no meaningful financial information regarding Purchaser is
available.
Compuware is a Michigan corporation, with its principal offices at 31440
Northwestern Highway, Farmington Hills, Michigan 48334-2564. Compuware's Common
Stock is traded on the Nasdaq National Market under the symbol "CPWR." Compuware
provides software products and professional services designed to increase the
productivity of the information systems departments of its target market, the
20,000 largest enterprises worldwide. Compuware has historically focused on the
testing and implementation environment in the mainframe market, where it has
extensive experience and has established long-term customer relationships.
Compuware also operates in the client/server market, with products and
professional services in the application development, testing and implementation
and systems management environments.
Compuware's financial statements contained in its annual report on Form
10-K for the fiscal year ended March 31, 1999 are incorporated herein. This
report is filed with the Securities and Exchange Commission and is available for
inspection and copying as indicated below (see "Available Information" below in
this Section 8).
The name, citizenship, business address, principal occupation or
employment, and five-year employment history for each of the directors and
executive officers of Purchaser and Compuware and certain other information are
set forth in Schedule I hereto.
Neither Purchaser, Compuware nor, to their knowledge, any of the persons
listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Purchaser, Compuware or any of the persons so
listed, beneficially owns or has any right to acquire, directly or indirectly,
any Shares. Neither Purchaser, Compuware nor, to their knowledge, any of the
persons or entities referred to above or any of the respective officers,
directors or subsidiaries of any of the foregoing, has effected any transaction
in the Shares during the past 60 days.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, (i) neither Purchaser, Compuware nor, to their
knowledge, any of their respective subsidiaries or any of the persons listed in
Schedule I to this Offer to Purchase, has any contract, arrangement,
understanding or relationship 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 voting of
such securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss, guarantees of
profits, division of profits or loss or the giving or withholding of proxies;
and (ii) neither Purchaser, Compuware nor, to their knowledge, any of the
persons listed on Schedule I hereto, has had any business relationship or
transaction with the Company or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the Securities and Exchange Commission applicable to the Offer. Set forth below
in Section 10 of this Offer to Purchase is a summary description of the
contacts, negotiations and transactions between Purchaser, Compuware or any of
their respective subsidiaries or any of the persons listed in Schedule I to this
Offer to Purchase, on the one hand, and the Company or its affiliates, on the
other hand, concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, an election of directors or a sale or other
transfer of material assets.
AVAILABLE INFORMATION. Compuware is subject to the information filing
requirements of the Exchange Act and is required to file reports and other
information with the Securities and Exchange Commission relating to its
business, financial condition and other matters. Information, as of certain
dates, concerning Compuware's directors and officers, their remuneration,
options granted to them, the principal holders of Compuware's securities and any
material interest of such persons in transactions with Compuware is required to
be described in proxy statements distributed to Compuware's shareholders and
filed with the Securities and
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<PAGE> 13
Exchange Commission. Such reports, proxy statements and other information should
be available for inspection at the public reference facilities maintained by the
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, and also should be available for inspection at the Securities and
Exchange Commission's regional offices located at Seven World Trade Center,
Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may also
be obtained (i) by mail, upon payment of the Securities and Exchange
Commission's customary fees, by writing to its principal office at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or (ii) at the Securities
and Exchange Commission's world-wide web site at http://www.sec.gov.
9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by
Purchaser to consummate this Offer and the Merger is estimated to be
approximately $161,159,724 million (assuming the purchase of all Shares
outstanding), plus approximately $1.5 million to pay related fees and expenses.
Purchaser plans to obtain all the funds needed for this Offer and the Merger
from Compuware. Compuware will provide such funds from its existing funds, from
new credit facilities to be established for this purpose, or a combination of
the foregoing. As of March 31, 1999, Compuware had approximately $193 million in
cash and cash equivalents and approximately $310 million in short term
investments. Neither Purchaser nor Compuware has conditioned this Offer or the
Merger on obtaining financing.
On July 15, 1999, Compuware countersigned a commitment letter, dated July
14, 1999, from Morgan Stanley Senior Funding, Inc. ("Morgan Stanley") and
Comerica Bank ("Comerica") pursuant to which Morgan Stanley and Comerica have
committed to provide to Compuware, on specified terms and subject to specified
conditions, up to $900 million in a credit facility, a portion of which funds is
expected to be used to finance the purchase of the Shares pursuant to the Offer
and the Merger, to finance the payments to be made upon the exercise of options
to purchase Shares, and to pay related fees and expenses. The balance of the
credit facility is expected to be used for other corporate purposes. Morgan
Stanley has committed to provide $540 million of the total commitment, and
Comerica has committed to provide $360 million. They reserve the right to act as
agents for a syndicate of financial institutions which, together with Morgan
Stanley and Comerica, will provide the credit facility. The commitment letter
dated July 14, 1999 superceded a similar commitment letter dated June 29, 1999
that provided for a $700 million credit facility.
The commitment letter contemplates that the credit facility will be a four
year senior bank revolving credit facility, with scheduled reductions of the
commitments under the facility of $100 million, $100 million and $700 million at
the end of the second, third and fourth years, respectively. Outstanding loans
under the credit facility are to be repaid if at any time their aggregate
principal amount exceeds the then total credit facility commitment. The
commitment letter provides for interest rates on outstanding loans under the
credit facility, at Compuware's option, of either (i) the Eurodollar rate
determined by Comerica, plus a margin of 1.25% initially, or (ii) the higher of
the Comerica prime rate or 0.5% over the federal funds rate, plus a margin of
0.25% initially. In addition, the commitment letter provides for commitment fees
on the unutilized commitments under the credit facility of 0.25% per annum
initially. The interest rate margins and commitment fees will be adjusted after
six months according to Compuware's then credit rating.
Morgan Stanley's and Comerica's commitment to provide the credit facility
is subject to satisfaction of certain conditions, including (i) satisfactory
completion of a due diligence review, (including receipt and review of
Compuware's financial statements for the fiscal year ended March 31, 1999), (ii)
the repayment and termination of Compuware's existing credit facility, (iii) the
absence of a material adverse change since March 31, 1999 (the date of
Compuware's audited financial statements) in the ability of Compuware or its
subsidiaries to perform their obligations to the lenders or with respect to the
business, operations, assets, liabilities, condition or prospects of Compuware
and its subsidiaries, (iv) the absence of any material change in the syndication
market for credit facilities or in the financial, banking or capital markets
that in the opinion of Morgan Stanley or Comerica would have a material adverse
effect on the satisfactory syndication of the credit facility, (v) the absence
of certain litigation, (vi) the negotiation and execution of definitive
documentation for the credit facility by September 15, 1999, (vii) all necessary
governmental approvals and all material third party approvals in connection with
the credit facility having been obtained and remaining in effect, and all
applicable waiting periods having expired without any action being taken by any
competent authority which restrains, prevents or imposes materially adverse
conditions on the consummation of the credit
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facility, and (viii) the absence of any judgment, order, injunction or other
restraint prohibiting or imposing materially adverse conditions on the credit
facility.
The definitive documentation with respect to the credit facility also will
contain representations, warranties, covenants, events of default and conditions
customary for credit facilities of this size and type. Compuware has agreed to
pay certain fees to Morgan Stanley and Comerica with respect to the commitment
letter and to Morgan Stanley, Comerica and the other lenders with respect to the
credit facility. Compuware also has agreed to reimburse certain expenses of
Morgan Stanley and Comerica in connection with the commitment letter and to
provide customary indemnities to Morgan Stanley, Comerica and the other lenders
in connection with the credit facility.
The foregoing summary of the sources and amount of funds is qualified in
its entirety by reference to the text of the commitment letter, a copy of which
is an exhibit to the Tender Offer Statement on Schedule 14D-1 (the "SCHEDULE
14D-1") filed by Purchaser and Compuware with the Securities and Exchange
Commission in connection with this Offer. If and when definitive agreements with
respect to the credit facility are executed, copies will be filed as exhibits to
amendments to the Schedule 14D-1.
While no decision has been made concerning the method Compuware will use to
repay the borrowings under the credit facility, Compuware anticipates such
borrowings will be repaid with internally generated funds (including, if the
Merger is consummated, funds of the Company) and from other sources which may
include the proceeds of future bank financings or the public or private sale of
debt or equity securities. Such decision will be made based on Compuware's
review from time to time of the advisability of particular actions, as well as
prevailing interest rates, financial and other economic conditions and such
other factors as Compuware may deem appropriate.
10. BACKGROUND OF THIS OFFER; CONTACTS WITH THE COMPANY; AND THE MERGER
AGREEMENT.
BACKGROUND OF THIS OFFER; CONTACTS WITH THE COMPANY
On March 6, 1998, Joseph A. Nathan, Compuware's President and Chief
Operating Officer, and Eliot R. Stark, Compuware's Executive Vice President,
Finance, met with Steven D. Whiteman, the Company's Chairman of the Board,
President, and Chief Executive Officer, Kevin Hickey, the Company's then
Executive Vice President and Chief of Operations and Jean-Luc Valente, the
Company's then-Senior Vice President, Marketing at the corporate offices of
Compuware in Farmington Hills, Michigan, to discuss in broad terms the
possibility of a business combination between the two companies.
During late June 1998 Mr. Hickey phoned Mr. Nathan about an unrelated
business matter and the possible combination was discussed again in broad terms.
On July 13, 1998, Mr. Nathan and Mr. Stark met with Mr. Hickey and Mark R.
Schonau, the Company's Senior Vice President, Finance and Administration and
Chief Financial Officer to further discuss the possible benefits of a business
combination between the two companies. During that meeting, Compuware presented
the Company with a Confidentiality Letter Agreement ("Initial Confidentiality
Agreement"), providing for, among other things, each party to treat
confidentially the information received from the other. Pursuant to the
Confidentiality Agreement, the Company and Compuware also agreed to provide for
the confidential treatment of their discussions regarding a possible transaction
and the exchange of certain confidential information concerning the Company and
Compuware. The Confidentiality Agreement also provided that for a period of two
years neither the Company nor Compuware would solicit for employment any
employee of the other party who became known to the Company or Compuware in
connection with consideration of a possible transaction. The Confidentiality
Agreement further provided that, for a period of one year from the date of
execution, neither the Company nor Compuware (nor any of their respective
affiliates) would, without the prior written consent of the other party, (i)
acquire or offer or agree to acquire, directly or indirectly, any voting
securities or assets of the other party or its subsidiaries or certain
affiliates, (ii) make or in any way seek to participate in, directly or
indirectly, any solicitation of proxies to vote, or seek to advise or influence
any person with respect to voting, any securities of the other party, (iii)
form, join or
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<PAGE> 15
participate in a group with respect to any voting of the other party's
securities, (iv) otherwise act or seek to control or influence the management,
board of directors or policies of the other party, (v) make any public
announcement with respect to, or submit a proposal for, or offer of, any
extraordinary transaction involving the other party or its securities or assets,
(vi) take any action that might require the other party to make a public
announcement regarding the possibility of a business combination or merger, or
(vii) request the other party to amend or waive any of the foregoing provisions.
The Company countersigned the Confidentiality Agreement with certain negotiated
changes.
During the period from July 13 through July 27, 1998, Mr. Stark and Mr.
Hickey had several telephone conversations in which they discussed the possible
business combination in greater detail. The Company's financial advisor at the
time participated in some of these discussions. During these conversations, it
was ultimately and mutually determined that agreement could not be reached on
such a proposed transaction and discussions were terminated on or prior to July
27, 1998.
In early March 1999, Mr. Nathan telephoned Mr. Whiteman to discuss
reopening discussions regarding a possible business combination. A meeting was
not scheduled as a result of this telephone call.
In early May 1999, Mr. Nathan telephoned Mr. Whitemen again to pursue
discussions and to attempt to schedule a face-to-face meeting. No meeting was
scheduled during such telephone conversation.
On May 24, 1999, Mr. Nathan, Mr. Stark and Mr. Whiteman held a series of
telephone calls to continue the discussions initiated earlier in the month.
During one of the calls, Mr. Whiteman indicated to Mr. Nathan that Broadview
International LLC ("Broadview") was now representing the Company as its
financial advisor. In another call that day, Mr. Stark and Mr. Whiteman agreed
to schedule a meeting for June 2, 1999.
On June 2, 1999, Mr. Nathan, Mr. Stark, and Mr. Henry A. Jallos, Compuware
Executive Vice President, Products Division, met with Mr. Whitemen and Mr.
Schonau at Compuware's corporate offices in Farmington Hills, Michigan to
discuss the proposed business combination in greater detail. At the meeting
Compuware and the Company executed a Confidentiality Letter Agreement ("Second
Confidentiality Agreement"), containing similar terms and conditions, in all
material respects, to the Initial Confidentiality Agreement.
During the period from June 2 through 14, 1999, Mr. Stark had several
telephone conversations with Mr. Whiteman and representatives of Broadview about
the proposed business combination in which they discussed the proposal in
greater detail, including the possible structure and timing of the transactions.
On June 7, 1999, Mr. Stark spoke with Scot Sedlacek, a representative of
Broadview, and requested additional information regarding the Company.
On June 15, Compuware sent to the Company a term sheet outlining the basic
terms on which Compuware would be willing to pursue a business combination with
the Company. On June 15 and 16, 1999, Mr. Stark and Mr. Sedlacek discussed the
term sheet in several telephone conversations. Although the term sheet was not
agreed upon and material terms remained to be resolved, Compuware directed its
legal counsel to prepare a draft Merger Agreement as a basis for further
discussions. Telephonic discussions by and among Mr. Stark, Mr. Whiteman, and
Broadview continued periodically through the remainder of June 1999.
On June 30 and July 1, 1999, Linda Markman, Compuware Associate General
Counsel, Michael Chatz, Compuware Director of Internal Audit, and other members
of Compuware's due diligence team met at the offices of the Company's legal
counsel in Phoenix, Arizona, to conduct a due diligence investigation of the
Company. During the period between July 6 through 8, 1999, Donna Ventimiglia,
Director of Compuware's Worldwide Business Practices, as well as members of her
staff, visited the offices of the Company's legal counsel to conduct additional
due diligence. On July 2, 1999, Mr. Ronald D. Sleiter, Compuware's Senior Vice
President, Worldwide Sales, Broadview and Mr. Whiteman participated in a
telephone conversation to review certain financial information of the Company.
During the period from July 7 through July 14, 1999, legal counsel for both
companies exchanged drafts and continued negotiations regarding the terms of the
Merger Agreement and other transaction documents.
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Such terms were also discussed during this period by telephone among Mr. Stark,
Mr. Whiteman, Mr. Sedlacek and other employees of Broadview.
On July 14, 1999, forms of the Merger Agreement and the Shareholder Tender
and Voting Agreement were presented to, and, following discussion, approved by,
the Compuware Board of Directors. Following notification of the approval of the
transaction by the Boards of Directors, the parties executed the agreements on
the evening of July 14, 1999. The transaction was publicly announced on the
morning of July 15, 1999.
THE MERGER AGREEMENT
A copy of the Merger Agreement is filed as an Exhibit to Compuware's
Schedule 14D-1 filed with the Securities and Exchange Commission in connection
with this Offer. Certain portions of the Merger Agreement are summarized in this
Section. This summary is qualified in its entirety by reference to the Merger
Agreement itself.
THIS OFFER. The Merger Agreement provides for the commencement of this
Offer within five business days after the initial public announcement of
Purchaser's intention to commence this Offer. The obligation of Purchaser to
accept for payment Shares tendered pursuant to this Offer is subject to the
satisfaction of the conditions described in Section 14 below. Purchaser and
Compuware have agreed that no change in this Offer may be made which decreases
the price per Share payable in this Offer, reduces the minimum or maximum number
of Shares to be purchased in this Offer, imposes conditions to this Offer in
addition to those set forth in Section 14 below, changes the form of
consideration payable in this Offer, amends any other material terms of this
Offer in a manner materially adverse to the Company's shareholders or extends
the expiration date of this Offer except as indicated in Section 1 above.
THE MERGER. The Merger Agreement provides that, following this Offer and
upon the terms and subject to the conditions in the Merger Agreement and in
accordance with Delaware law, Purchaser will be merged with and into the
Company. As a result of the Merger, the separate corporate existence of
Purchaser will cease and the Company will continue as the Surviving Corporation
(the "SURVIVING CORPORATION") and will become a wholly owned subsidiary of
Compuware. Alternatively, Compuware may elect to merge the Company into
Purchaser, with Purchaser continuing as the Surviving Corporation and a wholly
owned subsidiary of Compuware. In either case, upon consummation of the Merger,
each issued and then outstanding Share (other than any Shares held in the
treasury of the Company, or owned by Purchaser, Compuware or any other
subsidiary of Compuware and any Shares which are held by shareholders who have
not voted in favor of the Merger or consented thereto in writing and who
exercise their appraisal rights for such Shares in accordance with Delaware law)
shall be automatically converted into, and exchanged for, the right to receive a
cash payment per Share equal to the Offer Price, without interest. All stock
options outstanding at the time of the Merger that were granted by the Company
under the Company's Stock Option Plans will be fully vested, and upon due
exercise and payment of the exercise price of such option, entitle the optionee
to receive an amount of cash per share equal to the Offer Price, without
interest; provided that any such option that is not duly exercised within thirty
days after the effective time of the Merger will automatically expire. The
Company's Employee Stock Purchase Plan will terminate when the Merger occurs
(unless terminated before then in accordance with its terms). If terminated upon
the Merger, the Company will cause a final purchase of Shares to be made under
the plan on the last trading day before the Merger.
SHAREHOLDER APPROVAL. Under Delaware law, if Purchaser acquires at least
90% of the Company's then outstanding Shares of Common Stock, Purchaser will be
able to approve the Merger without a vote of the Company's shareholders. Thus,
if at least 90% of the outstanding Shares are tendered (as of the close of
business on the last business day before the Offer expires), it is expected that
Purchaser will cause the Merger to occur without a shareholder vote (assuming
the other conditions for the Merger have been met).
If following the expiration of the Offer Purchaser does not own at least
90% of the Company's outstanding shares of Common Stock, then shareholder
approval of the Merger will be required. The Company has agreed that, in the
event shareholder approval is required, then, as soon as practicable following
the expiration of the Offer, the Company will call a meeting of its shareholders
for the purpose of obtaining
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shareholder approval of the Merger, the Merger Agreement and any other actions
contemplated by the Merger Agreement which require the approval of the Company's
shareholders.
Unless the Merger Agreement is terminated as described under "Termination"
below, the Company's obligations to call and hold a shareholders meeting for the
purpose of obtaining the requisite shareholder approval of the Merger will not
be affected by the commencement of any competing takeover proposal (whether or
not it is a superior proposal, as defined below) or by the withdrawal or
modification of the Company's Board of Director's recommendation in favor of the
Merger.
Purchaser has entered into a Shareholder Tender and Voting Agreement with
all directors and certain officers of the Company and their affiliates. These
shareholders own, in the aggregate, approximately 356,434 Shares, constituting
approximately 2.0% of all Shares outstanding on June 14, 1999. Under the
agreement, each such shareholder agreed (i) to tender pursuant to this Offer all
Shares currently owned or later acquired by the shareholder and not to withdraw
such tender (subject to applicable law) unless and until the Merger Agreement is
terminated in accordance with its terms, (ii) if this Offer is not consummated
and if approval by the Company's shareholders of the Merger is sought, then,
until termination of the Merger Agreement, to vote such Shares in favor of the
Merger and against any competing proposal, merger, consolidation, sale of
assets, reorganization or recapitalization, or any liquidation or winding up of
the Company, (iii) not to sell, transfer, encumber, pledge, dispose of or grant
an option with respect to such Shares until the earlier of termination of the
Merger Agreement or the record date for the meeting at which shareholders of the
Company are asked to vote on the Merger (other than pursuant to this Offer or
with certain other exceptions) and (iv) from the consummation of this Offer to
the closing of the Merger, not to exercise stock options for Shares or other
rights to acquire capital stock of the Company. The foregoing summary is
qualified in its entirety by reference to the Shareholder Tender and Voting
Agreement which is an exhibit to Compuware's Schedule 14D-1 filed with the
Securities and Exchange Commission in connection with this Offer.
The Merger Agreement provides that the Company will, if necessary, as soon
as practicable following expiration of this Offer, file with the Securities and
Exchange Commission under the Exchange Act, a proxy statement and related proxy
materials (the "PROXY STATEMENT") with respect to the Company's shareholders
meeting and will use its best efforts to respond to any comments of the
Commission and to cause the Proxy Statement to be mailed to shareholders of the
Company as promptly as practicable after responding to all such comments to the
satisfaction of the staff of the Commission. The Company has agreed, (i) to
recommend to the Company's shareholders, through the Company's Board of
Directors, that the shareholders approve the Merger, the Merger Agreement and
any related actions requiring shareholder approval, (ii) to include such
recommendation in the Proxy Statement and (iii) that neither the Company's Board
of Directors nor any committee of the board will withdraw or change (or propose
or resolve to withdraw or change) in a manner adverse to Compuware, such
recommendation. Notwithstanding the foregoing, the Company's Board of Directors
may withdraw or modify its recommendation in favor of the Merger if all of the
following occur:
- a superior proposal (as defined below) is made to the Company and not
withdrawn;
- the Company shall have notified Compuware in writing of the superior
proposal, specifying all the material terms and conditions and
identifying the person making the proposal;
- Compuware shall not have, within three business days after receipt of the
above notice, made an offer that the Company's Board of Directors by
majority vote determines in its good faith judgment, after consultation
with its financial advisor, to be at least as favorable to the Company's
shareholders as the superior proposal;
- the Company's Board of Directors concludes that the withdrawal or
modification of such recommendation is required for the board to comply
with its fiduciary duties to the Company's shareholders; and
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- the Company shall not have violated the no-solicitation provisions of the
Merger Agreement (described below in this Section under the heading "No
Solicitation") or the provisions referred to herein with respect to
shareholder approval.
The Company is required to give Compuware at least three business days'
prior notice (or such lesser notice as the Company provides to the members of
its Board of Directors but in no event less than 24 hours notice) of any
meetings of the Company's Board of Directors at which the Company's Board of
Directors is reasonably expected to determine whether any takeover proposal
constitutes a "superior proposal." For the purposes of the Merger Agreement a
"SUPERIOR PROPOSAL" means an unsolicited, bona fide written offer made by a
third party to consummate any of the following transactions on terms that the
Company's Board of Directors determines, in its reasonable judgment (based on
the written advice of its financial advisor) to be more favorable to the
Company's shareholders than the terms of the Merger: (i) a merger,
consolidation, business combination, sale of assets or similar transaction
involving the Company pursuant to which the Shares outstanding immediately
before the transaction will represent less than 50% of the equity interests of
the surviving or resulting entity or (ii) the acquisition by any person or group
(including by way of a tender offer or an exchange offer or a two step
transaction involving a tender offer followed with reasonable promptness by a
merger), directly or indirectly, of ownership of 100% of the outstanding shares
of the Company's capital stock; provided, however, an offer will not be
considered a "superior proposal" if any financing required to consummate the
proposed transaction is not committed and is not likely, in the reasonable
judgment of the Company's Board of Directors (after consultation with its
financial advisor), to be obtained on a timely basis. Nothing in the Merger
Agreement prohibits the Company or its Board of Directors from taking and
disclosing to the Company's shareholders a position contemplated by Rules 14d-9
and 14e-2(a) under the Exchange Act.
Compuware has agreed to cause all Shares purchased pursuant to this Offer
and all other Shares owned by Purchaser or any other Compuware subsidiary to be
voted in favor of the Merger.
CONDUCT OF BUSINESS PENDING THE MERGER. Pursuant to the Merger Agreement,
the Company has agreed to carry on the business of the Company and its
subsidiaries in the ordinary course and to use its reasonable efforts to
preserve intact their current business organization, to keep available the
services of their current officers and employees and to preserve relations with
distributors, licensors, contractors, customers, suppliers, lenders, employees
and others having business dealings with any of them. The Merger Agreement
provides that, except as permitted by the terms of the Merger Agreement (or as
set forth in a disclosure letter provided in connection with the Merger
Agreement), neither the Company nor any subsidiary will do any of the following,
without the prior written consent of Compuware:
(i) declare or pay any dividends on or make any other distributions in
respect of any of its capital stock (other than by any wholly owned
subsidiary of the Company to its parent or, in the case of less than wholly
owned subsidiaries as required by agreements existing as of the Merger
Agreement) or split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for any of its capital stock or purchase, redeem
or otherwise acquire any shares of its capital stock or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, other than the
issuance of Shares, pursuant to the exercise of stock options outstanding
under the Company's Stock Option Plans as of the date of the Merger
Agreement and in accordance with its present terms, pursuant to the
Company's employee stock purchase plan;
(iii) amend its certificate of incorporation, by-laws or other charter
documents;
(iv) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof, or
otherwise acquire or agree to
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acquire any assets which are material, individually or in the aggregate, to
the business of the Company and its subsidiaries as a whole except
purchases of inventory in the ordinary course of business consistent with
past practice;
(v) sell, lease, license, mortgage or otherwise encumber or subject to
any pledge, claim, charge, encumbrance, security interest or lien or
otherwise dispose of any of its properties or assets (including
intellectual property) except in the ordinary course of business consistent
with past practice;
(vi) incur any indebtedness for borrowed money or draw down on any
credit facility or arrangement or guarantee any such indebtedness of
another person, issue or sell any debt securities or warrants or rights to
acquire debt securities, or guarantee any debt securities of others, enter
into any "keep well" or other agreement to maintain any financial statement
condition of another person or enter into any arrangement having the
economic effect of any of the foregoing or make any loans, advances or
capital contributions to, or investments in, any other person, other than
to the Company or any direct or indirect wholly owned subsidiary of the
Company;
(vii) make or agree to make any new capital expenditure(s) which
individually is in excess of $100,000 or which in the aggregate are in
excess of $500,000;
(viii) make any material tax election or settle or compromise any
income or franchise tax liability;
(ix) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities reflected or
reserved against in, or contemplated by, the most recent consolidated
financial statements (or notes thereto) of the Company included in
documents filed with the Securities and Exchange Commission or incurred
since the date of such financial statements in the ordinary course of
business consistent with past practice in accordance with the terms of the
Merger Agreement;
(x) except as expressly contemplated by the Merger Agreement, waive,
release or assign any rights or claims under any contract or agreement
binding on the Company or any subsidiary, or, except as expressly
contemplated by the Merger Agreement or in the ordinary course of business
consistent with past practice, enter into, modify, amend or terminate any
contract or agreement binding on the Company or any subsidiary, or, in any
event, enter into any contract or agreement binding on the Company or any
subsidiary which would be in conflict with the Merger Agreement or the
transactions contemplated therein, with certain exceptions;
(xi) terminate or lay off more than five employees, other than for
cause consistent with past practice and Company policy, waive any stock
repurchase rights, accelerate, amend or change the period of exercisability
of any stock options, or otherwise alter or commit to any compensation,
benefit or severance arrangement for or with any officer or employee of the
Company or enter into any related or interested party transaction;
(xii) adopt or amend in any material respect any employee benefit or
employee stock purchase or employee option plan, or enter into any
employment contract, pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates of its
officers or employees other than in the ordinary course of business,
consistent with past practice, or change in any material respect any
management policies or procedures;
(xiii) grant or provide any severance or termination pay as to any
officer or employee (except payments pursuant to written plans or
arrangements outstanding of the date of the Merger Agreement and disclosed
in connection therewith);
(xiv) take any actions (including seeking any corporate approvals)
directed toward seeking to liquidate or dissolve the Company or to take
advantage of bankruptcy or any other creditor protection laws or that would
or are reasonably likely to render the Company insolvent or to cause it to
become involved in bankruptcy proceedings, including soliciting creditor
arrangements or moratoria;
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(xv) except as disclosed in connection with the Merger Agreement,
institute any litigation or other proceeding;
(xvi) take any action that might cause or constitute a breach of any
representation or warranty made by the Company in the Merger Agreement;
(xvii) enter into any "rights agreement," "poison pill" or similar
plan, agreement or any arrangement or take or permit any other action that
could affect the capitalization of the Company or the issuance of capital
stock by the Company which would be triggered by the Offer, the Merger, the
Merger Agreement or any transaction contemplated thereby; or
(xviii) authorize any of, or commit or agree to take any of, the
foregoing actions.
Further, the Company and Compuware have agreed not to, and not to permit
any of their respective subsidiaries to, knowingly and willfully, take
deliberate action (i) that would cause any of their representations and
warranties set forth in the Merger Agreement to become untrue in such a manner,
with respect to the Company, as would have a Material Adverse Effect or to
become untrue, with respect to Compuware, in any material respect as of the date
when made, or (ii) that would cause any of the conditions to the Offer or to the
Merger not being satisfied (subject to the Company's right to take action
consistent with the provisions described below in "No Solicitation"). "MATERIAL
ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" with respect to the Company means
any change or effect that is materially adverse to the Company and its
subsidiaries, taken as a whole, taking into account the business, properties,
assets, employees, financial condition or results of operations of the Company
and its subsidiaries, excluding those changes, effects and developments that
directly result from the announcement of this Offer or the Merger, any act or
omission of Purchaser or Compuware, general economic conditions or conditions
generally affecting the industry in which the Company competes (provided that
such conditions do not materially and adversely affect the Company
disproportionately). In any litigation regarding this definition where the
principal change or effect at issue involves the termination for any reason of
the employees of the Company or any of its subsidiaries, the Company will have
the burden of proving by clear and convincing evidence that the adverse effect
in question directly resulted from announcement of this Offer or the Merger.
NO SOLICITATION. The Company has agreed that, until the earlier of the
closing of the Merger or termination of the Merger Agreement in accordance with
its terms, the Company will not itself, nor permit any of its subsidiaries to,
and will not authorize or permit any officer, director or employee of the
Company or any of its subsidiaries or any investment banker, attorney or other
adviser or representative of the Company or any of its subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage submission of any "takeover
proposals" (as defined below), or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any non-public Company
information with respect to, or enter into any agreement with respect to, or
take any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any takeover
proposal. Under the Merger Agreement, a "TAKEOVER PROPOSAL" means any offer or
proposal relating to any transaction or series of related transactions (other
than the transactions contemplated by the Merger Agreement) involving (i) any
acquisition from the Company by any person or group of more than a 10% interest
in the total outstanding voting securities of the Company or any of its
subsidiaries or any tender offer or exchange offer that would result in any
person or group owning more than such 10% interest in any merger, consolidation,
business combination or similar transaction involving the Company pursuant to
which the shareholders of the Company immediately before the transactions hold
less than 90% of the equity interest of the surviving or resulting entity; (ii)
any sale, lease (other than in the ordinary course of business), exchange,
transfer, license (other than in the ordinary course of business), acquisition
or disposition of more than 10% of the Company's assets; or (iii) any
liquidation or dissolution of the Company.
The Company has also agreed that the Company, its subsidiaries, officers,
directors, employees, investment bankers, attorneys and other agents and
representatives will immediately cease any existing activities, discussions or
negotiations with any parties conducted previously regarding a takeover
proposal.
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Notwithstanding the foregoing, the Merger Agreement provides that the
Company is not prohibited from furnishing non-public information regarding the
Company and its subsidiaries to, or entering into discussions or negotiations
with, any person or group who has submitted (and not withdrawn) to the Company
an unsolicited, written, bona fide takeover proposal that the Company's Board of
Directors reasonably concludes (after consultation with its financial advisor)
may constitute a superior proposal (as defined above) provided that (i) neither
the Company, its subsidiaries nor any representatives of the Company have
violated the non solicitation provisions of the Merger Agreement, (ii) the
Company's Board of Directors concludes in good faith, after consultation with
its outside legal counsel, that such action is required in order for the
Company's Board of Directors to comply with its fiduciary obligations to the
Company's shareholders under applicable law, (iii) the Company gives Compuware
prior written notice of the identity of the person or group in question, of all
of the material terms and conditions of the takeover proposal and of the
Company's intentions to furnish information to or enter into discussions with
that person or group, (iv) the Company has obtained a signed confidentiality
agreement from the person or group containing terms at least as restrictive as
the Company's confidentiality agreement with Compuware and (v) contemporaneously
with furnishing any information to the person or group, the Company furnishes
the same information to Compuware (unless it has previously done so).
ACCESS. Pursuant to the Merger Agreement, from the date of the Merger
Agreement until the Merger is consummated, the Company will, and will cause its
subsidiaries to, afford Compuware with reasonable access during normal business
hours to their properties, books, contracts, commitments, personnel and records
and shall furnish or promptly make available to Compuware a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws, and all
other information concerning its business, properties and personnel as Compuware
may reasonably request.
INDEMNIFICATION; SHAREHOLDER LITIGATION. Compuware has agreed to fulfill
and honor, and cause the Surviving Corporation to fulfill and honor in all
respects, the obligations of the Company pursuant to any indemnification
agreements between the Company and any of its subsidiaries and their respective
directors and officers existing prior to the Merger Agreement. From and after
the Merger, such obligations will be the joint and several obligations of
Compuware and the Surviving Corporation, and Compuware will assume such
obligations. Notwithstanding the foregoing, Compuware and Purchaser will have no
obligation to indemnify the Company, any subsidiary or any of their respective
directors and officers in respect of claims, liabilities or damages arising out
of a knowing and willful breach caused by the indemnified party of a
representation or covenant made by the Company in the Merger Agreement. The
certificate of incorporation and bylaws of the Surviving Corporation will
contain the same provisions with respect to indemnification and elimination of
liability for monetary damages as are set forth in the certificate of
incorporation and bylaws of the Company, which provisions will not be amended,
repealed or otherwise modified after the Merger in any manner that would
adversely affect the rights of the individuals who, on the date of the Merger
Agreement or at any time from that date to the date of the Merger, were
directors, officers, employees or agents of the Company or its subsidiaries,
unless required by law. The Merger Agreement also provides for the maintenance
by Compuware under specified conditions of the Company's current directors' and
officers' insurance and indemnification policy.
The indemnification and exculpation obligations described above will
survive the termination of this Agreement and the consummation of the Merger and
will be binding on all successors and assigns of Compuware or the Surviving
Corporation. If Compuware, the Surviving Corporation or any of their successors
or assigns consolidates with or merges into any other person and is not the
surviving corporation, then proper provision must be made so that the successors
or assigns assume the obligations described above.
If any shareholder litigation is brought against the Company and its
directors or officers relating to any of the transactions contemplated by the
Merger Agreement, then (i) until the purchase of Shares pursuant to this Offer
is consummated, the Company will give Compuware the opportunity to participate
in the defense or settlement of the litigation and (ii) thereafter, the Company
will give Compuware the opportunity to direct the defense of the litigation (in
which case, Compuware will give the Company and its directors and officers the
opportunity to participate in the litigation). No settlement of such litigation
may be made without
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Compuware's consent, which will not be unreasonably withheld. No settlement of
such litigation requiring payment by a director, officer or other representative
will be agreed upon without the director's consent.
REASONABLE EFFORTS, NOTIFICATION. The Merger Agreement provides that,
subject to its terms and conditions, each of the parties thereto agrees to use
its reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to use its reasonable efforts to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, this
Offer, the Merger and the other transactions contemplated by the Merger
Agreement. Among other things, the Merger Agreement specifies the following
actions: (i) obtaining all necessary waivers, consents and approvals from third
parties, (ii) obtaining all necessary consents, approvals, waivers, actions and
nonactions from any federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "GOVERNMENTAL ENTITY"), and the
making of all necessary registrations and filings and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Entity, (iii) defending any
lawsuits or other legal proceedings challenging the Merger Agreement or the
consummation of the transactions contemplated thereby and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by the Merger Agreement. In particular, the Company has agreed that
the Company and its Board of Directors will take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to this Offer, the Merger, the Merger Agreement or any other
transaction contemplated by the Merger Agreement. Further, the Company has
agreed that if any state takeover statute or similar statute or regulation
becomes applicable to such transactions, it and its Board of Directors will take
all action necessary to ensure that such transactions may be consummated as
promptly as practicable on the terms contemplated by the Merger Agreement and
otherwise to minimize the effect of such statute or regulation on such
transactions.
Each of the Company and Compuware is obligated to give prompt notice to the
other of the breach of any material representation or warranty made by it in the
Merger Agreement or the failure to comply with or satisfy in any material
respect any covenant, condition or agreement under the Merger Agreement.
DIRECTORS. Upon consummation of this Offer, provided that Purchaser has
purchased at least 50% of the then outstanding Shares, Purchaser may designate a
number of persons to be elected or appointed to the Company's Board of Directors
so that the percentage of board members designated by Purchaser (rounded up to
the next whole number) is equal to the percentage of Shares purchased by
Purchaser in connection with the Offer. Thereafter (until the Merger is
consummated), the Company may not amend or terminate the Merger Agreement,
extend or waive Purchaser's or Compuware's performance or obligations under the
Merger Agreement or exercise or waive the Company's rights under the Merger
Agreement without a concurrence of a majority of the directors then in office
who are currently members of the Company's Board of Directors or who
subsequently become members but are not designated by Purchaser.
EXPENSES. Each party to the Merger Agreement will bear its own expenses in
connection with this Offer, the Merger, the Merger Agreement and the
transactions contemplated by the Merger Agreement, whether or not this Offer is
consummated except that (i) if the Merger Agreement is terminated by Compuware
in certain circumstances, the Company will pay all reasonable legal, accounting
and investment banking fees and expenses incurred by Compuware up to $500,000
and (ii) if the agreement is terminated by the Company in certain circumstances,
Compuware will pay all reasonable legal, accounting and investment banking fees
and expenses incurred by the Company up to $500,000. See "Termination" below in
this Section 10.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains customary
representations and warranties of the parties thereto including representations
by the Company as to the absence of certain changes or events concerning the
Company's business, compliance with law, taxes, litigation, employee benefit
plans, real property and leases, intellectual property, environmental matters
and material contracts.
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CONDITIONS TO THE MERGER. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
or waiver on or prior to the closing of the Merger of the following conditions:
(i) if required by applicable law, the Merger shall have been approved
by the requisite vote of the shareholders of the Company;
(ii) any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated; and
(iii) no temporary restraining order, preliminary or permanent
injunction, judgment or other order, decree or ruling nor any statute,
rule, regulation or executive order shall be in effect which would (a) make
the acquisition or holding by Compuware or its affiliates of Shares or
shares of Common Stock of the Surviving Corporation illegal or otherwise
prevent the consummation of the Merger, (b) prohibit Compuware's or
Purchaser's ownership or operation of, or compel Compuware or Purchaser to
dispose of or hold separate, all or a material portion of the business or
assets of Purchaser, the Company or any subsidiary thereof, (c) compel
Compuware, Purchaser or the Company to dispose of or hold separate all or a
material portion of the business or assets of Compuware or any of its
subsidiaries or the Company or any of its subsidiaries, (d) impose material
limitations on the ability of Compuware or Purchaser or their affiliates
effectively to exercise full ownership and financial benefits of the
Surviving Corporation, or (e) impose any material condition to the Merger
Agreement or the Merger, which would be adverse to Compuware.
In addition, the obligations of Compuware and Purchaser to effect the
Merger are further subject to:
(i) the accuracy of the Company's representations and warranties in
the Merger Agreement in all material respects as of the closing date of the
Merger;
(ii) the performance in all material respects by the Company of each
of its covenants and obligations under the Merger Agreement;
(iii) the absence of a Material Adverse Change in the Company that has
a Material Adverse Effect or an event that is reasonably likely to result
in a Material Adverse Effect to the Company and its subsidiaries taken as a
whole;
(iv) the absence of any pending or overtly threatened suit, action or
proceeding brought by any Governmental Entity (or recommended by the staff
of the FTC or the Antitrust Division) by any shareholder (but only if
Compuware deems such shareholder suit, action or proceeding to have a
reasonable likelihood of success) or by any other person, directly or
indirectly, (a) challenging Compuware's or Purchaser's acquisition of
Shares, seeking to restrain or prohibit consummation of this Offer, the
Merger or any other transaction contemplated by the Merger Agreement or
alleging that such acquisition or other transaction relates to, involves or
constitutes a breach of fiduciary duty by the Company's directors or a
breach of the securities laws or corporate law, (b) seeking to prohibit or
limit the Company's, Compuware's or Purchaser's ownership of a material
portion of the business or assets of the Company and its subsidiaries or of
Compuware and its subsidiaries or to compel the Company or Compuware to
dispose of or hold separate any material portion of the business or assets
of the Company and its subsidiaries, taken as a whole, or Compuware and its
subsidiaries, taken as a whole, as a result of the Offer or any of the
other transactions contemplated by the Merger Agreement, (c) seeking to
impose material limitations on the ability of Purchaser or Compuware to
acquire, hold or exercise full ownership rights of all the Shares purchased
in this Offer, (d) seeking to prohibit Compuware or any of its subsidiaries
from effectively managing or controlling in any material respect the
business or operations of the Company and its subsidiaries or (e) seeking
to impose a material condition on this Offer, the Merger or the Merger
Agreement which would be adverse to Compuware; and
(v) all third party consents needed to avoid causing a Material
Adverse Effect on the Company having been obtained.
Notwithstanding the foregoing, the only conditions to Compuware's and
Purchaser's obligation to effect the Merger by means of a short-form merger
(which can be effected only if Purchaser owns at least 90% of the Company's then
outstanding Shares and no approval is required of the Company's shareholders)
would be the
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expiration or termination of any applicable waiting period under the HSR Act,
and that no order or injunction making the Merger illegal or materially
impairing the benefits of the Merger to Compuware shall be in effect.
In addition to the conditions to each party's obligation described above,
the obligation of the Company to effect the Merger is further subject to:
(i) the accuracy of Compuware's and Purchaser's representations and
warranties in the Merger Agreement in all material respects as of the
closing date of the Merger; and
(ii) the performance in all material respects by Compuware and
Purchaser of each of their respective covenants and obligations under the
Merger Agreement.
TERMINATION. The Merger Agreement may be terminated, and the Merger may be
abandoned, at any time prior to the closing of the Merger:
(i) by mutual written consent of Compuware and the Company (duly
authorized by their respective Boards of Directors);
(ii) by Compuware or the Company (a) if the Merger is not consummated
on or before January 31, 2000 (except that a party may not terminate the
Merger Agreement on this basis if that party's action or failure to act is
a principal cause of, or results in the failure of, the Merger to occur on
or before January 31, 2000 and such action or failure to act constitutes a
breach of the Merger Agreement, (b) if any Governmental Entity shall have
taken any action permanently enjoining, restraining or otherwise
prohibiting the Merger and such action shall have become final and
nonappealable or (c) if any required approval of the Company's shareholders
is not obtained due to the failure to obtain the required vote at a duly
convened shareholders meeting (except that a party may not terminate the
Merger Agreement on this basis if the failure to obtain such shareholder
approval is caused by that party's action or failure to act in breach of
the Merger Agreement or by a breach of the Shareholder Tender and Voting
Agreement by any party thereto other than Compuware);
(iii) by Compuware if (a) the Company's Board of Directors or any
committee thereof shall have failed to recommend either this Offer or the
approval by the Company's shareholders of the Merger or the Merger
Agreement or shall have failed to reaffirm such recommendation within two
business days after being requested to do so or shall have withdrawn or
modified such recommendation (or resolved to do so) in a manner adverse to
Compuware or Purchaser, (b) the Company's Board of Directors or a committee
thereof shall have recommended another takeover proposal (or resolved to do
so), (c) the Company shall have entered into a letter of intent, agreement
or commitment with respect to a takeover proposal (or the Company's Board
of Directors or a committee thereof shall have resolved to do so) or (d) a
tender offer or exchange offer for securities of the Company shall have
been commenced (by a person unaffiliated with Compuware) and the Company
shall not have sent a statement to its shareholders (pursuant to Rule 14e-2
under the Exchange Act) within ten business days disclosing that the
Company recommends rejection of that offer;
(iv) by Compuware, if any of the Company's representations and
warranties in the Merger Agreement are not true in any material respect as
of the date of the Merger Agreement or thereafter or if the Company shall
have breached or failed to perform in any material respect any obligation,
agreement or covenant, except that if any such breach or failure (other
than a breach of the non-solicitation provisions of the Merger Agreement,
the provisions regarding obtaining shareholder approval, or any other
breach that has caused irreparable harm) is curable by the Company through
reasonable efforts, then Compuware may not terminate the Merger Agreement
under this subparagraph unless the matter has not been cured within ten
business days after Compuware has given written notice of the breach or
failure to the Company;
(v) by the Company, if any of Compuware's representations and
warranties in the Merger Agreement are not true in any material respect as
of the date of the Merger Agreement or thereafter or if Purchaser or
Compuware shall have breached or failed to perform in any material respect
any obligation, agreement or covenant, except that if any such breach or
failure (other than a breach that caused irreparable harm) is curable by
Purchaser or Compuware through reasonable efforts, then the Company may not
terminate the Merger Agreement under this subparagraph unless the matter
has not been cured
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within ten business days after the Company has given written notice of the
breach or failure to Purchaser and Compuware;
(vi) by the Company, if the Board of Directors of the Company will
have withheld, withdrawn, modified or amended its recommendation in favor
of the Merger Agreement, the Offer or the Merger and will have authorized
the Company to enter into an agreement with a third party with respect to a
superior proposal; or
(vii) by the Company, if (i) Compuware, Purchaser, or any of their
affiliates will have failed to commence the Offer on or prior to 5 business
days following the date of the initial public announcement of the Offer or
will have terminated the Offer, or (ii) the Offer expires without
Compuware, Purchaser or their affiliates, as the case may be, purchasing
Shares pursuant thereto; provided that in each case the Company may not
terminate the Merger Agreement if the Company is then in material breach of
the Merger Agreement.
If the Merger Agreement is terminated in accordance with the above
provisions, then no party will have any liability to the others under the
agreement except as indicated below.
- If termination results from a party's breach of its representations,
warranties, covenants or agreements in the Merger Agreement, the
breaching party may be liable for damages for such breach;
- If Compuware terminates the Merger Agreement as a result of any events
described in (iii) above (regarding certain action or inaction by the
Company's Board of Directors or a committee thereof), the Company must
pay Compuware within two business days after such termination a
$5,500,000 fee and the Company must pay promptly all of Compuware's
reasonable legal, accounting and investment banking fees up to $500,000;
- If (a) the Merger Agreement is terminated by Compuware because (x) the
January 31, 2000 deadline referred to in (ii)(a) above is not met, (y)
the required shareholder approval is not obtained as provided in (ii)(c)
above, or (z) any of the Company's representations and warranties are
untrue, or because of a breach or failure of the Company to perform, as
described in (iv) above, or the Company terminates the agreement because
the required shareholder approval is not obtained as provided in (ii)(c)
above, and (b) before the termination a third party has publicly
announced a takeover proposal which, if consummated, would constitute an
Acquisition Event (as defined below), and (c) within 12 months after the
termination, an Acquisition Event is consummated or the Company enters
into an agreement for an Acquisition Event, then the Company will be
required to pay Compuware a $5,500,000 fee; provided, however, that the
fee would be reduced to $2,000,000 if the Acquisition Event provides for
consideration per Share less than Compuware's Offer Price but more than
$6 11/32 (the closing price per Share on the last trading day before the
public announcement of the signing of the Merger Agreement); and,
provided, further, that if the Acquisition Event provides for
consideration per Share equal to or less than $6 11/32 no fee will be
payable. For the purposes of the Merger Agreement, an "ACQUISITION EVENT"
means (1) a merger or other business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company
pursuant to which the Company's shareholders immediately before the
transaction hold less than 50% of the aggregate equity interest of the
surviving corporation, (2) a sale of assets representing more than 50% of
fair market value of the Company's business or (3) the acquisition by any
person or group, directly or indirectly, of beneficial ownership or a
right to acquire such ownership of shares representing more than 50% of
the voting power of the Company's outstanding capital stock.
- If the Merger Agreement is terminated by Compuware because any of the
Company's representations and warranties are untrue, or because of a
breach or failure of the Company to perform its agreements therein, as
described in (iv) above, then the Company must pay promptly Compuware's
reasonable legal, accounting and investment banking fees up to $500,000.
- If the Merger Agreement is terminated by the Company because any of
Compuware's representations or warranties are untrue, or because of a
breach or failure of Purchaser or Compuware to perform its
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agreements therein, as described in (v) above, then Compuware must pay
promptly the Company's reasonable legal, accounting and investment
banking fees up to $500,000.
Termination of the Merger Agreement will not affect the parties' respective
obligations under a confidentiality agreement with respect to certain
information provided in connection with the matters referred to herein.
AMENDMENT AND WAIVER. The Merger Agreement may be amended at any time
without the approval of the Company's shareholders, unless such approval is
required by law. The Merger Agreement may be amended only by a written
instrument signed by each of the parties.
Before the Merger, the parties may extend the time for the performance of
any party's obligations under the Merger Agreement, may waive any inaccuracies
in the representations or warranties in the Merger Agreement or in any document
delivered in connection with that agreement and, subject to any shareholder
approval required by law, may waive compliance with any covenant or condition in
that agreement. Any such extension or waiver by a party must be set forth in a
written instrument signed by that party.
POST MERGER EMPLOYMENT BENEFITS. Employees of the Company who after the
Merger remain employees of the Company or become employed by Compuware or any
other controlled subsidiary will become eligible to participate in the same
standard employee benefit plans as are generally available to similarly situated
Compuware employees and will receive credit for all service with the Company for
the purposes of any "employee benefit plan" (as defined in Section 3(3) of
ERISA). The Company may, if requested to do so by Compuware, terminate its
employee plans immediately prior to the Merger. Compuware will evaluate, in
light of the equity incentive compensation provided to similarly situated
employees of Compuware, the equity incentive compensation of Company employees
who remain employees of the Company or become employees of Compuware or any of
its other subsidiaries after the Merger, and, if deemed appropriate in
Compuware's sole discretion, Compuware will make grants of equity incentive
compensation to such employees.
11. PURPOSE OF THIS OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER; APPRAISAL RIGHTS.
PURPOSE OF THIS OFFER. The purpose of this Offer and the Merger is for
Compuware to acquire control of, and the entire equity interest in, the Company.
The purpose of the Merger is for Compuware to acquire all Shares not purchased
pursuant to the Offer. Upon consummation of the Merger, the Company will become
a wholly owned subsidiary of Compuware. This Offer is being made pursuant to the
Merger Agreement.
Compuware is a provider of software products and information technology
professional services to increase the productivity of the information technology
departments of its target market, the 20,000 largest enterprises worldwide. The
Company is a leader in understanding enterprise applications to help customers
realize the greatest return on their information technology investments.
Compuware believes the acquisition of the Company will enhance Compuware's
efforts to assist customers in managing maintenance backlogs and extending their
legacy applications to take advantage of e-commerce applications.
PLANS FOR THE COMPANY. As soon as practicable and legally permissible
following the Merger, Compuware will begin integrating the Company's
professional staff and in-house operations with those of Compuware. The
integration process will include coordinating the combined company's management,
accounting, human resources and other systems in order to realize expeditiously
and efficiently the anticipated synergies of the Merger. As discussed in Section
13 below, following consummation of the Merger, Compuware intends to cause the
delisting of the Shares by the Nasdaq National Market and the termination of
registration of the Shares pursuant to Rule 12g-4 under the Exchange Act.
Except as indicated in this Offer to Purchase, Compuware 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 its subsidiaries, a sale or transfer of a material
amount of assets of the Company or 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 (except as indicated in Section 10 above)
business, or the composition of the Board of Directors or the Company's
management.
APPRAISAL RIGHTS. No appraisal rights are available in connection with this
Offer. However, if the Merger is consummated, shareholders of the Company
immediately before the Merger will have certain rights under Delaware law to
exercise appraisal rights to receive payment in cash for their shares other than
pursuant to the
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terms of the Merger. These appraisal rights may be exercised only with respect
to Shares for which a written demand for appraisal is made prior to the vote
taken to approve the Merger, if such vote will be taken, or within 20 days after
the mailing of the statutorily required notice if no vote is required. The
exercise of appraisal rights in accordance with the statutory procedures could
lead to a judicial determination of the fair value of the Shares, exclusive of
any element of value arising from the accomplishment or expectation of the
Merger. In addition, such dissenting shareholders may under certain
circumstances be entitled to receive payment of a fair rate of interest.
12. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that the
Company will not, between the date of the Merger Agreement and the Merger,
without the prior written consent of Compuware, declare or pay any dividends on
or make any other distributions in respect of any capital stock or split,
combine or reclassify any capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for any
capital stock.
13. EFFECT OF THIS OFFER ON THE MARKET FOR THE SHARES, NASDAQ QUOTATION AND
EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to this 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.
Depending upon the aggregate market value and per share price of any Shares
not purchased pursuant to this Offer, the Shares may no longer meet the
standards for continued inclusion in the Nasdaq National Market, which require,
among other things, that an issuer have at least 200,000 publicly held shares
with a market value of $1 million held by at least 400 shareholders or 300
shareholders holding round lots. If these standards are not met, quotations
might continue to be published in the over-the-counter "additional list" or in
one of the "local lists," but if the number of holders of Shares falls below
300, or if the number of publicly held Shares falls below 100,000, or there are
not at least two market makers for the Shares, the National Association of
Securities Dealers rules provide that the securities would no longer be
"authorized" for Nasdaq reporting and Nasdaq would cease to provide any
quotations. Shares held directly or indirectly by an officer or director of the
Company, or by any beneficial owner of more than 10 percent of the Shares,
ordinarily will not be considered as being publicly held for this purpose. In
the event the Shares were no longer eligible for Nasdaq quotation, quotations
might still be available from other sources. The extent of the public market for
the Shares and availability of such quotations would, however, depend upon the
number of holders of Shares 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.
The Shares are currently "margin securities" under the regulations 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 on the
collateral of the Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is possible that, following
this Offer, the Shares will no longer constitute "margin securities" for the
purposes of the margin regulations of the Federal Reserve Board and therefore
could no longer be used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Registration of
the Shares under the Exchange Act may be terminated upon application of the
Company to the Commission if the Shares are not listed on a national securities
exchange or Nasdaq and there are fewer than 300 record holders of the Shares.
Termination of registration of the Shares under the Exchange Act would reduce
substantially the information required to be furnished by the Company to its
shareholders and to the Commission and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy statement in connection with
shareholders' meetings pursuant to Section 14(a) and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions no
longer applicable to the Company. Furthermore, if Purchaser acquires a
substantial number of Shares or the registration of the Shares under the
Exchange Act were to be terminated, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 under the Securities Act of 1933 may be impaired
or eliminated. If registration of the Shares under the Exchange Act were
terminated prior to the consummation of the Merger, the Shares would no longer
be "margin securities" or be eligible for Nasdaq reporting.
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Compuware intends to cause the delisting of the Shares by the Nasdaq
National Market and the termination of registration of this Shares pursuant to
Rule 12g-4 under the Exchange Act following consummation of the Merger.
14. CERTAIN CONDITIONS OF THIS OFFER. The Merger Agreement provides that,
notwithstanding any other provision of this Offer or the Merger Agreement, and
in addition to (and not in limitation of) Purchaser's rights to extend and amend
this Offer (subject to certain limitations), Purchaser will not be required to
accept for payment, purchase or pay for (subject to the rules of the Securities
and Exchange Commission, including Rule 14e-1(c) under the Exchange Act, which
applies to Purchaser's obligation to pay for or return tendered Shares) any
Shares tendered pursuant to this Offer unless more than 50% of the Shares
outstanding, on a fully-diluted basis, at the close of business on the business
day immediately preceding the day on which this Offer expires or terminates have
been validly tendered and not withdrawn or if any waiting period (and any
extension thereof) under the HSR Act applicable to the purchase of Shares
pursuant to this Offer shall not have expired or been terminated.
In addition, notwithstanding any other provision of this Offer or the
Merger Agreement, Purchaser will not be required to accept for payment (subject
to the Securities and Exchange Commission's rules) and pay for any Shares not
theretofore accepted for payment and paid for, and may terminate or amend this
Offer, or if, upon the scheduled expiration date of this Offer (as extended, if
applicable), and before acceptance of the Shares for payment or payment
therefor, any of the following conditions exists and is continuing:
(i) there shall be pending any suit, action or proceeding brought by
or on behalf of any Governmental Entity (or the staff of the FTC or the
Antitrust Division shall have recommended the commencement of such), any
shareholder of the Company or any other person or party (but only if such
shareholder suit, action or proceeding is deemed by Compuware to have a
reasonable likelihood of success), directly or indirectly, (a) challenging
the acquisition by Compuware or Purchaser of any Shares, seeking to
restrain or prohibit the making or consummation of this Offer or the Merger
or the performance of any of the other transactions contemplated by the
Merger Agreement, or alleging that any such acquisition or other
transaction relates to, involves or constitutes a breach of fiduciary duty
by the Company's directors or a violation of federal securities law or
applicable corporate law, (b) seeking to prohibit or limit the ownership or
operation by the Company, Compuware or any of their respective subsidiaries
of a material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or Compuware and its subsidiaries, taken as
a whole, or to compel the Company or Compuware to dispose of or hold
separate any material portion of the business or assets of the Company and
its subsidiaries, taken as a whole, or Compuware and its subsidiaries,
taken as a whole, as a result of the Offer or any of the other transactions
contemplated by the Merger Agreement, (c) seeking to impose material
limitations on the ability of Compuware or Purchaser to acquire or hold, or
to exercise full rights of ownership of, any of the Shares accepted for
payment pursuant to this Offer, (including without limitation the right to
vote any such Shares on all matters properly presented to the shareholders
of the Company), (d) seeking to prohibit Compuware or any of its
subsidiaries from effectively managing or controlling in any material
respect the business or operations of the Company and its subsidiaries
taken as a whole or (e) seeking to impose a material condition to this
Offer, the Merger Agreement or the Merger which would be materially adverse
to Compuware;
(ii) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
this Offer or the Merger, or any other action shall be taken by any
Governmental Entity or court (other than the applicable HSR waiting period
referred to above) that is reasonably likely to result in any of the
consequences referred to in (a) through (e) of paragraph (i) above; or
(iii) there shall have occurred any change in the Company and its
subsidiaries taken as a whole that came within the definition of a Material
Adverse Effect with respect to the Company (as that term is defined in
Section 10 above) or any event that is reasonably likely to result in such
a change;
(iv) (a) the Company's Board of Directors or any committee of the
Board shall have failed to recommend either this Offer or the approval by
the Company's shareholders of the Merger or the Merger
28
<PAGE> 29
Agreement or shall have failed to reaffirm such recommendation within two
business days after being requested to do so or shall have withdrawn or
modified such recommendation (or resolved to do so) in a manner adverse to
Compuware or Purchaser, (b) the Company's Board of Directors or a committee
of the Board shall have recommended another takeover proposal (or resolved
to do so), (c) the Company shall have entered into a letter of intent,
agreement or commitment with respect to a takeover proposal (or the
Company's Board of Directors or a committee of the Board of Directors shall
have resolved to do so) or (d) a tender offer or exchange offer or
securities of the Company shall have been commenced (by a person
unaffiliated with Compuware) and the Company shall not have sent a
statement to its securityholders (pursuant to Rule 14e-2 under the Exchange
Act) within ten business days disclosing that the Company recommends
rejection of that offer;
(v) any representation or warranty of the Company in the Merger
Agreement shall have failed to be true and correct, in any material
respect, as of the date of the Merger Agreement or shall have ceased to be
true and correct in any material respect at any time thereafter; or
(vi) the Company shall have breached, or failed to perform, in any
material respect, any obligation or to comply in any material respect with
any agreement or covenant of the Company to be performed or complied with
by it, except that, if any such breach or failure (other than a breach of
the non-solicitation provisions or the provisions for obtaining shareholder
approval referred to in Section 10 or any other breach that has caused
irreparable harm) is curable by the Company through the exercise of
reasonable efforts, then Compuware may not terminate this Offer until ten
business days after Compuware or Purchaser has given written notice thereof
to the Company and unless at such time the matter has not been cured;
(vii) the Merger Agreement shall have been terminated in accordance
with its terms;
(viii) there shall have occurred (a) any general suspension of trading
in, or limitation on prices for, securities on the Nasdaq National Market,
(b) the declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States (whether or not mandatory), (c)
the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States and
having a Material Adverse Effect or materially adversely affecting (or
materially delaying) the consummation of this Offer, (d) any limitation or
proposed limitation (whether or not mandatory) by any U.S. governmental
authority or agency, or any other event, that materially adversely affects
generally the extension of credit by banks or other financial institutions,
or (e) in the case of any of the situations described in clauses (a)
through (d) inclusive existing at the date of commencement of this Offer, a
material escalation or worsening thereof;
(ix) any person (which includes a "person" as such term is defined in
Section 13(d)(3) of the Exchange Act), other than Purchaser, any of its
affiliates or any group of which any of them is a member, (a) shall have
acquired beneficial ownership of more than 10% of the outstanding Shares
(unless Purchaser acquires at least 50% of the Shares outstanding at the
expiration or termination of this Offer, as provided above); (b) shall have
entered into a definitive agreement or an agreement in principle with the
Company with respect to a tender offer or exchange offer for any Shares or
merger, consolidation or other business combination with or involving the
Company or any of its subsidiaries or (c) shall have otherwise announced a
tender offer with respect to Shares of Company Common Stock (unless
Purchaser acquires at least 50% of the Shares outstanding at the expiration
or termination of this Offer, as provided above);
(x) any bankruptcy proceedings shall have been instituted with respect
to the Company and not dismissed;
(xi) any third party consents which if not obtained would have a
Material Adverse Effect on the Company shall not have been obtained;
which, with respect to each condition listed in (i) through (xi)
above, in the sole judgment of Purchaser or Compuware, and regardless of
the circumstances giving rise to any such condition (other than any action
or inaction by Compuware or any of its subsidiaries which constitutes a
breach of the
29
<PAGE> 30
Merger Agreement), such condition makes it inadvisable to proceed with
acceptance of the tendered Shares for payment or payment therefor.
The Merger Agreement provides that the foregoing conditions are for the
sole benefit of Compuware, Purchaser and their affiliates and may be asserted by
Compuware or Purchaser regardless of the circumstances giving rise to such
condition (other than any action or inaction by Compuware or any of its
subsidiaries which constitutes a breach of the Merger Agreement) and may be
waived by Compuware or Purchaser in whole or in part at any time and from time
to time in the sole discretion of Compuware or Purchaser (except for the Minimum
Tender Condition (i.e., the tender of more than 50% of the fully-diluted shares
of the common stock of the Company outstanding at the close of business on the
business day immediately proceeding the day the Offer will expire or
terminate)). The failure by Compuware or Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right; the
waiver of any such right with respect to particular facts and circumstances
shall not be deemed a waiver of any such rights with respect to other facts and
circumstances; and each right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
GENERAL. Based upon publicly available information with respect to the
Company, upon certain information furnished by the Company to Compuware and upon
discussions of representatives of Compuware with representatives of the Company
during Compuware's investigation of the Company (see Section 10 above), neither
Purchaser nor Compuware is aware of any governmental permit that appears to be
material to the business of the Company and the subsidiaries, taken as a whole,
which might be adversely affected by the acquisition of Shares by Purchaser
pursuant to this Offer or, except as set forth below, of any approval or other
action by any domestic (federal or state) or foreign governmental,
administrative or regulatory authority or agency which would be required prior
to the acquisition of Shares by Purchaser pursuant to this Offer. Should any
such approval or other action be required, it is Purchaser's present intention
to seek such approval or action. Purchaser does not currently intend, however,
to delay the purchase of Shares tendered pursuant to this Offer pending the
outcome of any such action or the receipt of any such approval (subject to
Purchaser's right to decline to purchase Shares if any of the conditions
referred to in Section 14 above shall have occurred). There can be no assurance
that any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, Purchaser or Compuware or that certain parts of the
businesses of the Company, Purchaser or Compuware might not have to be disposed
of or held separate or other substantial conditions complied with in order to
obtain such approval or other action or in the event that such approval were not
obtained or such other action were not taken. As indicated in Section 14 above,
Purchaser's obligation under this Offer to accept for payment and pay for Shares
is subject to certain conditions, including conditions relating to the legal
matters discussed in this Section 15.
STATE TAKEOVER LAWS. As a Delaware corporation, the Company is subject to
Section 203 ("Section 203") of the DGCL. Section 203 prohibits a corporation
which has voting stock traded on a national securities exchange, designated on
the Nasdaq Stock Market or held of record by more than 2,000 stockholders from
engaging in certain business combinations, including a merger, sale of
substantial assets, loan or substantial issuance of stock, with an interested
stockholder (defined as the owner of 15% or more of the corporation's voting
stock), or an interested stockholder's affiliates or associates, for a
three-year period beginning on the date the interested stockholder acquires 15%
or more of the outstanding voting stock of the corporation. The restrictions on
business combinations do not apply if (i) prior to such date, the board of
directors gives prior approval to the business combination or the transaction in
which the 15% ownership level is exceeded, (ii) the interested stockholder
acquires, in the transaction pursuant to which the interested stockholder
becomes the owner of 15% or more of the outstanding stock, 85% of the
corporation's stock (excluding those shares owned by persons who are directors
and also officers as well as employee stock plans in which employees do not have
a confidential right to determine whether shares held subject to the plan will
be tendered in a tender or exchange offer) or (iii) the business combination is
approved by the board of directors and authorized at a meeting of stockholders
by the holders of at least two-thirds of the outstanding voting stock, excluding
shares owned by the interested stockholder. In accordance with Section 203, the
Board of Directors of the Company
30
<PAGE> 31
has approved the Merger Agreement and the Shareholder Agreement and the
transactions contemplated thereby, including the Offer and the Merger, and,
therefore, the restrictions of Section 203 of the DGCL are inapplicable to the
Merger and the related transactions.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, shareholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining shareholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of shareholders in the state and were incorporated
there.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to this Offer or the Merger and has not complied with any such
laws. Should any person seek to apply any state takeover law, Purchaser will
take such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws is applicable
to this Offer or the Merger, and an appropriate court does not determine that it
is inapplicable or invalid as applied to this Offer, Purchaser might be required
to file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to this Offer, or be delayed in continuing
or consummating this Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 14 above.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
until certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser pursuant to this Offer is subject to such requirements.
See Section 2 above.
Pursuant to the HSR Act, Compuware has filed a Pre-merger Notification and
Report Form in connection with the purchase of Shares pursuant to this Offer
with the Antitrust Division and the FTC. Under the provision of the HSR Act
applicable to this Offer, the purchase of Shares pursuant to this Offer may not
be consummated until the expiration of a 15-calendar day waiting period
following the filing by Compuware. Accordingly, the waiting period under the HSR
Act applicable to the purchase of Shares pursuant to this Offer will expire at
the end of the fifteenth calendar day after such filing is made, unless such
waiting period is terminated by the FTC and the Antitrust Division or extended
by a request from the FTC or the Antitrust Division for additional information
or documentary material prior to the expiration of the waiting period. If either
the FTC or the Antitrust Division were to request additional information or
documentary material from Compuware and/or the Company with respect to this
Offer, the waiting period with respect to this Offer would expire at the end of
the tenth calendar day after the date of substantial compliance by Compuware and
the Company with such request. Thereafter, the waiting period could be extended
only by court order. If the acquisition of Shares is delayed pursuant to a
request by the FTC or the Antitrust Division for additional information or
documentary material pursuant to the HSR Act, this Offer may, but need not, be
extended and, in any event, the purchase of and payment for Shares will be
deferred until ten days after the request is substantially complied with, unless
the extended period expires on or before the date when the initial 15-day period
would otherwise have expired, or unless the waiting period is sooner terminated
by the FTC and the Antitrust Division. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the HSR Act
and the rules promulgated thereunder, except by court order. Any such extension
of the waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. See Section 4 above. It is a condition to this
Offer that the waiting period applicable under the HSR Act to this Offer expire
or be terminated. See Section 2 and Section 14 above.
31
<PAGE> 32
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to this Offer. At any time before or after the purchase of
Shares pursuant to this Offer by Purchaser, the FTC or the Antitrust Division
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 this Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Compuware, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to Compuware
relating to the businesses in which Compuware, the Company and their respective
subsidiaries are engaged, Compuware and Purchaser believe that this Offer and
the Merger will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to this Offer on antitrust grounds will not be made
or, if such a challenge is made, what the result would be. See Section 14 above
for certain conditions to this Offer.
GOING PRIVATE RULE. Rule 13e-3 under the Exchange Act that, in the case of
a "going private" transaction involving a company, certain financial information
concerning the company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority shareholders in
the transaction be filed with the Securities and Exchange Commission and
disclosed to shareholders prior to consummation of the transaction. Purchaser
believes that Rule 13e-3 will not be applicable to this Offer or the Merger but
it cannot make assurances that the Securities and Exchange Commission will
agree. The Commission might take the position that Rule 13e-3 applies to this
Offer or the Merger and might require Purchaser to provide additional
information pursuant to the rule.
16. FEES AND EXPENSES. Except as set forth below, Purchaser will not pay
any fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to this Offer.
Innisfree M & A Incorporated has been retained to serve as the Information
Agent in connection with this Offer. The Information Agent will be paid
reasonable and customary compensation for its services, will be reimbursed for
reasonable out-of-pocket expenses and has been provided with customary
indemnity. The Information Agent may contact holders of Shares by mail,
telephone, telex, telecopy, telegraph or personal interview and may request
banks, brokers, dealers and other nominee shareholders to forward materials
relating to the Offer to beneficial owners.
EquiServe has been retained as the Depositary in connection with this
Offer. The Depositary will be paid reasonable and customary compensation for its
services in connection with this Offer, will be reimbursed for its reasonable
out-of-pocket expenses in connection therewith and has been provided with
customary indemnity for certain liabilities and expenses in connection
therewith. In addition, brokers, dealers, commercial banks and trust companies
will be reimbursed for customary handling and mailing expenses incurred by them
in forwarding material to their customers.
17. MISCELLANEOUS. Purchaser is not aware of any jurisdiction where the
making of this Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchaser becomes aware of any valid
state statue prohibiting the making of this Offer or the acceptance of Shares
pursuant to this Offer, Purchaser will make a good faith effort to comply with
any such state statute. If, after such good faith effort, Purchaser cannot
comply with any such state statute, this Offer will not be made to (nor will
tenders be accepted from or on behalf of) the holders of Shares in such state.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
32
<PAGE> 33
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Compuware and Purchaser have filed with the Securities and
Exchange Commission the Schedule 14D-1, together with exhibits, furnishing
certain additional information with respect to this Offer. The Schedule 14D-1
and any amendments thereto, including the exhibits, may be inspected at, and
copies may be obtained from, the same places and in the same manner as set forth
in Section 7 above (except that these documents will not be available at the
regional offices of the Securities and Exchange Commission).
CV ACQUISITION, INC.
July 22, 1999
33
<PAGE> 34
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PURCHASER AND COMPUWARE
The following tables set 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 and
Compuware. The business address of each such person is 31440 Northwestern
Highway, Farmington Hills, Michigan 48334.
Unless otherwise indicated, each person listed below (i) has held his
principal occupation for the past five years, (ii) has not been convicted in a
criminal proceeding and has not been party to a proceeding related to U.S. state
and federal securities laws, and (iii) is a citizen of the United States.
1. Directors and Executive Officers of Purchaser:
<TABLE>
<CAPTION>
NAME POSITION WITH PURCHASER
- ---- -----------------------
<S> <C>
Eliot R. Stark......... President and Director
Thomas Costello, Vice President, Secretary, Treasurer and Director
Jr. .................
</TABLE>
2. Directors and Executive Officers of Compuware:
<TABLE>
<CAPTION>
NAME POSITION WITH COMPUWARE
- ---- -----------------------
<S> <C>
Peter Karmanos, Jr. ... Chairman of the Board of Directors and Chief Executive
Officer
Joseph A. Nathan....... President and Chief Operating Officer; Director
Eliot R. Stark......... Executive Vice President, Finance
Denise A. Knobblock.... Executive Vice President, Human Resources and Administration
Henry A. Jallos........ Executive Vice President, Products Division
Laura Lawson Senior Vice President, Chief Financial Officer
Fournier.............
Phyllis Recca.......... Senior Vice President, Professional Services Division
Stephen H. Fagan....... Senior Vice President, Strategic Relationships, Europe
John N. Shevillo....... Senior Vice President, Strategic Account Relationships
Thomas Thewes.......... Vice Chairman of the Board of Directors
W. James Prowse........ Director
William O. Grabe....... Director
Bernard M. Goldsmith... Director
G. Scott Romney........ Director
William R. Halling..... Director
Lowell P. Weicker, Director
Jr. .................
Elizabeth A. Director
Chappell.............
Elaine K. Didier....... Director
</TABLE>
Peter Karmanos, Jr., age 56, a founder of Compuware, has served as a
director of Compuware since its inception, as Chairman of the Board since
November 1978, and as Chief Executive Officer since July 1987. From January 1992
until October 1994, Mr. Karmanos served as President of Compuware.
Joseph A. Nathan, age 46, has served as a director of Compuware since
September 1990 and as President and Chief Operating Officer since October 1994.
From December 1990 to October 1994, Mr. Nathan served as Senior Vice President
and Chief Operating Officer -- Products Division.
Eliot R. Stark, age 46, has served as Executive Vice President, Finance,
since February 1998. From June 1995 through January 1998, Mr. Stark served as
Senior Vice President, Mergers & Acquisitions, Strategic Business Planning, and
Corporate Planning. In 1995, Mr. Stark served at Comerica Bank as Senior Vice
President, Corporate Development and Planning. From 1993 to 1995, Mr. Stark
served at Comerica
I-1
<PAGE> 35
Bank, as Director, Information Technology. On July 2, 1999, Mr. Stark was
appointed President and a director of Purchaser.
Denise A. Knobblock, age 43, has served as Executive Vice President, Human
Resources and Administration since February 1998. From January 1995 through
January 1998, Ms. Knobblock served as Senior Vice President, Administration and
from August 1991 through December 1994, as Compuware's Director, Facilities,
Administration.
Laura Lawson Fournier, age 46, has served as Senior Vice President, Chief
Financial Officer since April 1998. From June 1995 through March 1998, Ms.
Fournier served as Corporate Controller and from February 1990 through May 1995,
as Compuware's Director of Internal Audit.
Phyllis Recca, age 45, has served as Senior Vice President, Professional
Services Division, since January 1999. From January 1995 through December 1998,
Ms. Recca served as Vice President, Professional Services, Mideast Region. From
1987 through December 1994, Ms. Recca served as Branch Manager,
Baltimore/Washington.
Stephen H. Fagan, age 44, has served as Senior Vice President, Strategic
Relationships, Europe, since April 1999. From November 1997 through March 1999,
Mr. Fagan served as Senior Vice President, Professional Services. From 1994
through October 1997, Mr. Fagan served as Vice President, Enterprise Products.
Henry A. Jallos, age 50, has served as Executive Vice President, Products
Division, since September 1997. From August 1994 through August 1997, Mr. Jallos
served as Senior Vice President, Worldwide Sales.
John N. Shevillo, age 62, has served as Senior Vice President, Strategic
Account Relationships since June 1999. From April 1997 through May 1999, Mr.
Shevillo served as Senior Vice President, Enterprise Systems. From April 1994
through March 1997, Mr. Shevillo served as Senior Vice President, Professional
Services.
Thomas Thewes, age 67, a founder of Compuware, has served as a director of
Compuware since its inception, and has served as Vice Chairman of the Board
since March 1988. Mr. Thewes served as Treasurer from May 1988 until May 1995.
Mr. Thewes served as Senior Vice President from March 1988 until March 1995 and
as Secretary from April 1973 until May 1995.
W. James Prowse, age 56, has served as a director of Compuware since
December 1986 and served as Executive Vice President from February 1998 through
March 31, 1999. From January 1992 through January 1998, Mr. Prowse served as
Senior Vice President.
William O. Grabe, age 61, has served as a director of Compuware since April
1992. Mr. Grabe is a Managing Member of General Atlantic Partners, LLC and has
been affiliated with General Atlantic Partners, LLC or its predecessor since
April 1992. From 1984 until March 1992, Mr. Grabe was an IBM Vice President. Mr.
Grabe is also a director of Baan Company NV, Gartner Group, Inc., LHS Group,
Inc., and TDS GmbH along with a number of privately held companies in which
General Atlantic Partners, LLC is an investor.
Bernard M. Goldsmith, age 55, has served as a director of Compuware since
July 1992. Mr. Goldsmith has been the Managing Director of Updata Capital, Inc.,
an investment banking firm, since 1986.
G. Scott Romney, age 58, has served as a director of Compuware since
January 1996. Mr. Romney has been a partner at Honigman Miller Schwartz and
Cohn, a law firm, since 1977. The law firm serves as counsel to Compuware.
William R. Halling, age 60, has served as a director of Compuware since
October 1996. Mr. Halling is the President of The Economic Club of Detroit. Mr.
Halling was with KPMG Peat Marwick from 1961 through 1993, where he served as a
Managing Partner and member of the Board of Directors.
I-2
<PAGE> 36
Lowell P. Weicker, Jr., age 68, has served as a director of Compuware since
October 1996. Mr. Weicker is presently a visiting professor at the University of
Virginia in Charlottesville, Virginia, and currently serves on the Board of
Directors of Duty Free International, HPSC, Inc., UST Corporation and Phoenix
Duff & Phelps Mutual Funds. From 1990 through 1994, Mr. Weicker served as the
Governor of Connecticut, and from 1970 through 1988, as a U.S. Senator from
Connecticut. From 1962 through 1968, Mr. Weicker served as a Connecticut State
Representative.
Elizabeth Chappell, age 41, has served as a director of Compuware since
October 1997. Ms. Chappell is the Chief Executive Officer of The Chappell Group,
Inc., a consulting firm. From September 1979 to September 1994, Ms. Chappell
served as a Vice President with ATT. Ms. Chappell is also a director of
Handleman Company.
Elaine K. Didier, age 51, has served as a director of the Company since
October 1997. Effective August 30, 1999, Ms. Didier will serve as Dean of
University Library, and Professor at Oakland University. Ms. Didier served as
the Interim Director of Academic Outreach at the University of Michigan until
March 1999. Prior to her assignment as Interim Director, Ms. Didier held other
positions with the University, including Director of Information Resources.
Thomas Costello, Jr., age 45, has served as General Counsel of Compuware
since January 1985. Mr. Costello has served as Vice President since January 1995
and Secretary since May 1995. On July 2, 1999, Mr. Costello was appointed Vice
President, Secretary, Treasurer and a director of Purchaser.
I-3
<PAGE> 37
The Depositary for the Offer is:
EQUISERVE
<TABLE>
<S> <C> <C>
BY FIRST CLASS MAIL: BY HAND: BY OVERNIGHT COURIER:
EquiServe Securities Transfer & EquiServe
Attn: Corporate Actions Reporting Services, Inc. Attn: Corporate Actions
PO Box 9573 c/o EquiServe 40 Campanelli Drive
Boston, MA 02205-9573 100 Williams St., Galleria Braintree, MA 02184
New York, NY 10038
</TABLE>
<TABLE>
<S> <C>
BY FACSIMILE TRANSMISSION: FOR INFORMATION:
(781) 575-4826 (800) 426-5523
CONFIRM BY TELEPHONE:
(781) 575-4816
</TABLE>
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers listed below or to the Compuware
Corporation at its address and telephone numbers listed below. Additional copies
of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent. A shareholder
may also contact brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
The Information Agent for the Offer is:
[INNISFREE LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
or
All Others Call Toll-Free: (888) 750-5834
July 22, 1999
<PAGE> 1
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
VIASOFT, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED JULY 22, 1999
AT
$9.00 NET PER SHARE
BY
CV ACQUISITION, INC.
A WHOLLY OWNED SUBSIDIARY OF
COMPUWARE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON THURSDAY, AUGUST 19, 1999, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
EQUISERVE
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight Courier:
EquiServe Securities Transfer & EquiServe
Attn: Corporate Actions Reporting Services, Inc Attn: Corporate Actions
PO Box 9573 c/o EquiServe 40 Campanelli Drive
Boston, MA 02205-9573 100 Williams St., Galleria Braintree, MA 02184
New York, NY 10038
</TABLE>
For Information:
(800) 426-5523
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER
OF SHARES
EVIDENCED BY NUMBER
CERTIFICATE SHARE OF SHARES
NUMBER(S)(1) CERTIFICATE(S)* TENDERED(2)
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the
Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
This Letter of Transmittal is to be completed by shareholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized,
if delivery of Shares is to be made by book-entry transfer to the Depositary's
account at The Depository Trust Company (the "BOOK-ENTRY TRANSFER FACILITY")
pursuant to the book-entry transfer procedure described in Section 3 of the
Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. See
Instruction 2.
Shareholders whose certificates evidencing Shares ("SHARE CERTIFICATES")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who wish
to tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution
----------------------------------------------
Account Number
-------------------------------------------------------------
Transaction Code Number
----------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
--------------------------------------------
Window Ticket No. (if any)
-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-------------------------
Name of Institution which Guaranteed Delivery
------------------------------
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF
TRANSMITTAL CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to CV Acquisition, Inc. ("PURCHASER"), a
Delaware corporation and a wholly owned subsidiary of Compuware Corporation, a
Michigan corporation, the above described shares of common stock (including the
associated Preferred Share Purchase Rights issued pursuant to the Viasoft Rights
Agreement), $0.001 par value (the "SHARES"), of Viasoft, Inc., a Delaware
corporation (the "COMPANY"), pursuant to Purchaser's offer to purchase all
Shares at $9.00 per Share, net to the seller in cash, without interest thereon,
subject to reduction for any applicable federal back up or other withholding or
stock transfer taxes, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated July 22, 1999 (the "OFFER TO PURCHASE"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "OFFER"). The undersigned understands that Purchaser reserves the
right to transfer or assign, in whole or, from time to time, in part, to one or
more of its affiliates, the right to purchase all or any portion of the Shares
tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms 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 the Shares that are being tendered
hereby and all dividends, distributions (including, without limitation,
distributions of additional Shares) and rights declared, paid or distributed in
respect of such Shares on or after July 14, 1999 (collectively,
"DISTRIBUTIONS"), and irrevocably appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares and
all Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by the Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares and all 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 all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Thomas Costello, Jr., Eliot R.
Stark, and Bret Wacker, and each of them, as the attorneys and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney and proxy or his or her substitute shall, in his or her sole
discretion, deem proper and otherwise act (by written consent or otherwise) with
respect to all the Shares tendered hereby which have been accepted for payment
by Purchaser prior to the time of such vote or other action and all Shares and
other securities issued in Distributions in respect of such Shares, which the
undersigned is entitled to vote at any meeting of shareholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
or consent in lieu of any such meeting or otherwise. This proxy and power of
attorney is coupled with an interest in the Shares tendered hereby, is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by Purchaser in accordance with other
terms of the Offer. Such acceptance for payment shall revoke all other proxies
and powers of attorney granted by the undersigned at any time with respect to
such Shares (and all Shares and other securities issued in Distributions in
respect of such Shares), and no subsequent proxy or power of attorney shall be
given or written consent executed (and if given or executed, shall not be
effective) by the undersigned with respect thereto. The undersigned understands
that, in order for Shares to be deemed validly tendered, immediately upon
Purchaser's acceptance of such Shares for payment, Purchaser must be able to
exercise full voting and other rights with respect to such Shares and all
Distributions, including, without limitation, voting at any meeting of the
Company's 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
tendered hereby and all Distributions, that when such Shares are accepted for
payment by Purchaser, Purchaser will acquire good, marketable and unencumbered
title thereto and to all Distributions, free and clear of all liens,
restrictions, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed to be
necessary or advisable to complete the sale, the assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned shall
remit and transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and
3
<PAGE> 4
pending such remittance and transfer or appropriate assurance thereof, Purchaser
shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby, or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser 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 Shares tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered". Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions", please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered". In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. Unless otherwise indicated herein in the box entitled
"Special Payment Instructions", please credit any Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased, by crediting the
account at the Book-Entry Transfer Facility designated above. 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(s)
thereof if Purchaser does not purchase any of the Shares tendered hereby.
4
<PAGE> 5
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares or
Share Certificates evidencing Shares not tendered or not purchased are to
be issued in the name of someone other than the undersigned, or if Shares
tendered hereby and delivered by book-entry transfer which are not
purchased are to be returned by credit to an account at the Book-Entry
Transfer Facility other than that designated above.
Issue [ ] Check [ ] Share Certificate(s) to:
Name:
--------------------------------------------------------
(PLEASE PRINT)
Address:
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
(INCLUDE ZIP CODE)
-----------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
[ ] Credit shares delivered by book-entry transfer and not
purchased to the account set forth below at The Depository
Trust Company.
-----------------------------------------------------------
(ACCOUNT NUMBER)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not
purchased are to be mailed to someone other than the undersigned, or to
the undersigned at an address other than that shown under "Description of
Shares Tendered."
Mail [ ] Check [ ] Share Certificate(s) to:
Name:
---------------------------------------------------------
(PLEASE PRINT)
Address:
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
-------------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
- --------------------------------------------------------------------------------
5
<PAGE> 6
- --------------------------------------------------------------------------------
IMPORTANT
SHAREHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 FOLLOWING INSTRUCTIONS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated:
----------------------- , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide the following information and see
Instruction 5).
Name(s):
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
---------------------------------------------------------
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
---------------------------------------------------
Tax Identification or
Social Security No.:
----------------------------------------------------------
(SEE SUBSTITUTE FORM W-9 FOLLOWING INSTRUCTIONS)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
----------------------------------------------------------
Name:
--------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Title:
-------------------------------------------------------------------------
Name of Firm:
------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
------------------------------------------------
Date:
-------------------------- , 1999
- --------------------------------------------------------------------------------
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" above, or (b)
if such Shares are tendered for the account of a firm which is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of a recognized Medallion Signature Guarantee Program (each of the
foregoing being referred to as an "ELIGIBLE INSTITUTION"). In all other cases,
all signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if Shares are to be
delivered by book-entry transfer pursuant to the procedure set forth in Section
3 of the Offer to Purchase. Share Certificates evidencing all physically
tendered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer as well as a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), with any required signature guarantees,
or an Agent's Message in the case of a book-entry delivery, and any other
documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the reverse hereof prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). If Share
Certificates are forwarded to the Depositary in multiple deliveries, a properly
completed and duly executed Letter of Transmittal must accompany each such
delivery. Shareholders whose Share Certificates are not immediately available,
who cannot deliver their Share Certificates and all other required documents to
the Depositary prior to the Expiration Date or who cannot complete the procedure
for delivery by book-entry transfer on a timely basis may tender their Shares
pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase. Pursuant to such procedure: (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 Share Certificates evidencing all physically delivered Shares in
proper form for transfer by delivery, or a confirmation of a book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, in each case together with a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of book-entry delivery, an
Agent's Message), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three trading days on the
Nasdaq National Market System after the date of execution of such Notice of
Guaranteed Delivery, all as described in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND 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.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering shareholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate
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 cases, new Share Certificate(s) evidencing the remainder of
the Shares that were evidenced by the Share Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on the reverse hereof, as soon as practicable after the expiration
or termination of
7
<PAGE> 8
the Offer. All Shares evidenced by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
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 such person's authority so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser 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 Share Certificates
evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the appropriate
boxes on the reverse of this Letter of Transmittal must be completed.
Shareholders delivering Shares tendered hereby by book-entry transfer may
request that Shares not purchased be credited to such account maintained at a
Book-Entry Transfer Facility as such shareholder may designate in the box
entitled "Special Payment Instructions" on the reverse hereof. If no such
instructions are given, all such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated on the
reverse hereof as the account from which such Shares were delivered.
8. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Information Agent at its
address or telephone numbers set forth below. Additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be obtained from the Information Agent or from brokers, dealers, commercial
banks or trust companies.
8
<PAGE> 9
9. SUBSTITUTE FORM W-9. Under the federal income tax law, a shareholder
whose tendered Shares are accepted for payment is required by law to provide the
Depositary (as Payer) with such shareholder's correct TIN on Substitute Form W-9
below. If such shareholder is an individual, the TIN is such shareholder's
social security number. 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. In addition, payments that are made to such shareholder with respect to
Shares purchased pursuant to the Offer may be subject to 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 Internal Revenue Service.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit an Internal Revenue Service Form W-8,
signed under penalties of perjury, attesting to such individual's exempt status.
A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying that the TIN provided on Substitute Form
W-9 is correct (or that such stockholder is awaiting a TIN), and that (i) such
shareholder has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of a failure to report all interest or
dividends or (ii) the Internal Revenue Service has notified such shareholder
that such shareholder is no longer subject to backup withholding.
See the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional instructions.
9
<PAGE> 10
PAYER'S NAME: EQUISERVE
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- Taxpayer Identification Num- --------------------------------------
FORM W-9 ber -- For all accounts, enter taxpayer Social Security Number
DEPARTMENT OF THE TREASURY identification number in the box at right. OR
INTERNAL REVENUE SERVICE (For most individuals, this is your social -----------------------------------
security number. If you do not have a Employer Identification Number
number, see Obtaining a Number in the
enclosed Guidelines.) Certify by signing and
dating below. NOTE: If the account is in
more than one name, see the chart in the
enclosed Guidelines to determine which
number to give the payer.
------------------------------------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER PART II -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines
IDENTIFICATION NUMBER (TIN) and complete as instructed therein.
- ------------------------------------------------------------------------------------------------------------------------
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 I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of failure to report all interest or dividends, or 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 underreporting 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
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. FOR ADDITIONAL
DETAILS, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR FACSIMILE HEREOF, PROPERLY
COMPLETED AND DULY EXECUTED, OR AN AGENT'S MESSAGE IN THE CASE OF A BOOK-ENTRY
DELIVERY (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE CERTIFICATES
OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A
PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE).
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
or
ALL OTHERS CALL TOLL-FREE (888) 750-5834
10
<PAGE> 1
EXHIBIT (A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
VIASOFT, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if certificates
("SHARE CERTIFICATES") evidencing shares of common stock (including the
associated Preferred Share Purchase Rights issued pursuant to the Viasoft Rights
Agreement), $0.001 par value (the "SHARES"), of Viasoft, Inc., a Delaware
corporation (the "COMPANY"), are not immediately available, (ii) if Share
Certificates and all other required documents cannot be delivered to EquiServe
as Depositary (the "DEPOSITARY"), prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase (as defined below)) or (iii) if the procedure
for delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by
facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
The Depositary for the Offer is:
EQUISERVE
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight Courier:
EquiServe Securities Transfer & EquiServe
Attn: Corporate Actions Reporting Services, Inc Attn: Corporate Actions
PO Box 9573 c/o EquiServe 40 Campanelli Drive
Boston, MA 02205-9573 100 Williams St., Galleria Braintree, MA 02184
New York, NY 10038
By Facsimile Transmission: For Information:
(781) 575-4826 (800) 426-5523
Confirm by Telephone:
(781) 575-4816
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM 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.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to CV Acquisition, Inc., a Delaware
corporation and a wholly owned subsidiary of Compuware Corporation, a Michigan
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated July 22, 1999 (the "OFFER TO PURCHASE"), and the related
Letter of Transmittal (which together constitute the "OFFER"), receipt of each
of which is hereby acknowledged, the number of Shares specified below pursuant
to the guaranteed delivery procedure described in Section 3 of the Offer to
Purchase.
- ------------------------------------------
Number of Shares:
- ------------------------------------------
Certificate Nos.
(If Available)
- ------------------------------------------
- ------------------------------------------
[ ] Check box if Shares will be
delivered by book-entry transfer to
The Depository Trust Company
Account No.
----------------------------
- ------------------------------------------
- ------------------------------------------
- ------------------------------------------
SIGNATURE(S) OF HOLDER(S)
Dated:
-------------------------, 1999
Name(s) of Holder(s):
---------------------------------------
---------------------------------------
---------------------------------------
Please Type or Print
--------------------------------------
Address
--------------------------------------
Zip Code
--------------------------------------
Area Code and Telephone No.
- -----------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or which is a commercial bank or trust company having an office or correspondent
in the United States that is a member in good standing of the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program, guarantees
to deliver to the Depositary, at one of its addresses set forth above, Share
Certificates evidencing the Shares tendered hereby, in proper form for transfer,
or confirmation of book-entry transfer of such Shares, into the Depositary's
account at The Depository Trust Company, in each case with delivery of a Letter
of Transmittal (or facsimile thereof) properly completed and duly executed, with
any required signature guarantees or an Agent's Message (as defined in the Offer
to Purchase) in the case of a book-entry delivery, and any other required
documents, all within three Nasdaq Stock Market trading days of 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 the
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.
<TABLE>
<S> <C>
Name of Firm:
------------------------------- ---------------------------------------------
AUTHORIZED SIGNATURE
Address:
------------------------------------ ---------------------------------------------
PLEASE TYPE OR PRINT:
Title:
- --------------------------------------------- --------------------------------------
Zip Code
Area Code and Dated: , 1999
Telephone Number: ------------------------
---------------------------
</TABLE>
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
EXHIBIT (A)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
VIASOFT, INC.
AT
$9.00 NET PER SHARE
BY
CV ACQUISITION, INC.
A WHOLLY OWNED SUBSIDIARY OF
COMPUWARE CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON THURSDAY, AUGUST 19, 1999,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
July 22, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are enclosing the material below in connection with CV Acquisition,
Inc.'s ("PURCHASER") offer to purchase all outstanding shares of common stock
(including the associated Preferred Share Purchase Rights issued pursuant to the
Viasoft Rights Agreement), $0.001 par value (the "SHARES"), of Viasoft, Inc.
(the "COMPANY"), a Delaware corporation, at a price of $9.00 per Share, net to
the seller in cash without interest thereon and subject to reduction for any
applicable federal backup or other withholding or stock transfer taxes, upon the
terms and subject to the conditions set forth in Purchaser's Offer to Purchase,
dated July 22, 1999 (the "OFFER TO PURCHASE"), and the related Letter of
Transmittal (which together constitute the "OFFER") enclosed herewith. Please
furnish copies of the enclosed materials to those of your clients for whose
accounts you hold Shares registered in your name or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A
MAJORITY, ON A FULLY DILUTED BASIS, OF THE SHARES OF VIASOFT, INC. COMMON STOCK
OUTSTANDING AT THE CLOSE OF BUSINESS ON THE LAST BUSINESS DAY BEFORE THE OFFER
EXPIRES, AND (2) THE EXPIRATION OR TERMINATION OF THE APPLICABLE WAITING PERIOD
UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED.
Enclosed for your information and use are copies of the following documents:
1. Offer to Purchase, dated July 22, 1999;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
<PAGE> 2
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents are not immediately available
or cannot be delivered to EquiServe (the "DEPOSITARY") by the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for
book-entry transfer cannot be completed by the Expiration Date;
4. A letter to shareholders of the Company from Steven D. Whiteman,
Chairman of the Board and Chief Executive Officer of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Company;
5. A 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; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
THURSDAY, AUGUST 19, 1999, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase)), (ii) a Letter of Transmittal (or facsimile
thereof) properly completed and duly executed or an Agent's Message (as defined
in the Offer to Purchase) in connection with a book-entry delivery of Shares and
(iii) any other required documents.
If a holder of Shares wishes to tender, but cannot deliver such holder's
certificates or other required documents, or cannot comply with the procedure
for book-entry transfer, prior to the expiration of the Offer, a tender of
Shares may be effected by following the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. However, Purchaser will reimburse you for
reasonable and necessary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients. Purchaser will pay or
cause to be paid any stock transfer taxes payable with respect to the transfer
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, and additional copies of the enclosed material may be obtained by contacting
Innisfree M&A Incorporated (the "INFORMATION AGENT") at its address and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Very truly yours,
CV ACQUISITION, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF COMPUWARE
CORPORATION, CV ACQUISITION, INC., VIASOFT, INC., OR INNISFREE M&A INCORPORATED,
OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION
WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
2
<PAGE> 1
EXHIBIT (A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
VIASOFT, INC.
AT
$9.00 NET PER SHARE
BY
CV ACQUISITION, INC.
A WHOLLY OWNED SUBSIDIARY OF
COMPUWARE CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON THURSDAY, AUGUST 19, 1999,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are an Offer to Purchase dated July 22,1999
(the "OFFER TO PURCHASE") and a related Letter of Transmittal (which together
constitute the "OFFER") in connection with the offer by CV Acquisition, Inc.
("PURCHASER"), a Delaware corporation and a wholly owned subsidiary of Compuware
Corporation, a Michigan corporation, to purchase all outstanding shares of
common stock (including the associated Preferred Share Purchase Rights issued
pursuant to the Viasoft Rights Agreement), $0.001 par value (the "SHARES"), of
Viasoft, Inc. (the "COMPANY"), a Delaware corporation, at a price of $9.00 per
Share, net to the seller in cash and without interest thereon, subject to
reduction for any applicable federal backup or other withholding or stock
transfer taxes, upon the terms and subject to the conditions set forth in the
Offer. Also enclosed is the letter to shareholders of the Company from Steven D.
Whiteman, Chairman of the Board and Chief Executive Officer of the Company,
together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed
with the Securities and Exchange Commission by the Company.
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.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $9.00 per Share, net to the seller in cash
without interest thereon and subject to reduction for any applicable
federal backup or other withholding or stock transfer taxes.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company unanimously has determined
that each of the Offer and the Merger (as defined in the Offer to
Purchase), is fair to, and in the best interests of, the shareholders
<PAGE> 2
of the Company, and recommends that shareholders accept the Offer and
tender their Shares pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 12:00 Midnight,
Eastern Time, on Thursday, August 19, 1999, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not properly withdrawn prior to the expiration of the
Offer at least a majority of the then outstanding Shares, calculated on a
fully diluted basis. The Offer is also conditioned upon, among other
things, the expiration or termination of all waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Shareholders are urged to read the Offer to Purchase in its entirety for a
description of all conditions to the Offer and the other items set forth
therein.
6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the purchase of
Shares by Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. 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. If you do not instruct us to tender
your Shares, they will not be tendered.
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. Purchaser is not aware
of any jurisdiction where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good
faith effort to comply with any such state statute. If, after such good faith
effort, Purchaser cannot comply with any such state statute, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state.
2
<PAGE> 3
INSTRUCTIONS
WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF VIASOFT, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated July 22, 1999 and the related Letter of Transmittal
(which together constitute the "OFFER"), in connection with the offer by CV
Acquisition, Inc. a Delaware corporation and a wholly owned subsidiary of
Compuware Corporation, a Michigan corporation, to purchase all outstanding
Shares of Common Stock (including the associated Preferred Share Purchase Rights
issued pursuant to the Viasoft Rights Agreement), $0.001 par value (the
"SHARES") of Viasoft, Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that 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*
------------------------------
Dated: , 1999
----------------------
SIGN HERE
Signature(s):
------------------------------------------------------------------
Please type or print name(s):
--------------------------------------------------
Please type or print address:
--------------------------------------------------
- --------------------------------------------------------------------------------
Area Code and Telephone Number:
-----------------------------------------------
Taxpayer Identification or Social Security Number:
-----------------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
- --------------------------------------------------------------------------------
3
<PAGE> 1
EXHIBIT (A)(6)
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.
000-000-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<S> <C>
- ------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, any
one of the
individuals(1)
3. Custodian account of a minor The minor (2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The grantor-trustee
savings trust account (1)
(grantor is also trustee)
b. So-called trust account The actual owner
that is not a legal or valid (1)
trust under State law
5. Sole proprietorship account The owner (3)
- ------------------------------------------------------
- ------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------
6. A valid trust, estate or The legal entity
pension trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(4)
7. Corporate account The corporation
8. Religious, charitable or The organization
educational organization
account
9. Partnership The partnership
10. Association, club or other The organization
tax exempt organization
11. A broker or registered The broker or
nominee nominee
12. Account with the Department The public entity
of Agriculture 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.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security or Employer Identification Number.
(4) 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.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
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 and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality 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 exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
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.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
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 government bonds under section 1451.
- Payments made by certain foreign organizations.
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, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
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. 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) 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.
(3) 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
ADVISOR OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT (A)(7)
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 July 22,
1999 and the related Letter of Transmittal and any amendments or supplements
thereto and is being made to all holders of Shares. Purchaser is not aware of
any State where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the 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 one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
VIASOFT, INC.
AT
$9.00 NET PER SHARE
BY
CV ACQUISITION, INC.
A WHOLLY OWNED SUBSIDIARY OF
COMPUWARE CORPORATION
CV Acquisition, Inc., a Delaware corporation ("PURCHASER"), a wholly owned
subsidiary of Compuware Corporation, a Michigan corporation ("COMPUWARE"), is
offering to purchase all outstanding shares of Common Stock (including the
associated Preferred Share Purchase Rights issued pursuant to the Viasoft Rights
Agreement), $0.001 par value (the "SHARES"), of Viasoft, Inc., a Delaware
corporation (the "COMPANY"), at a price of $9.00 per Share, net to the seller in
cash and without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated July 22, 1999 (the "OFFER TO PURCHASE")
and in the related Letter of Transmittal (which together constitute the
"OFFER"). Following the Offer, Purchaser intends to effect the Merger described
below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, EASTERN TIME, ON THURSDAY, AUGUST 19, 1999,
UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least that
number of Shares that, when added to the Shares then owned of record by
Compuware or any of its subsidiaries, if any, shall constitute at least a
majority of the then-outstanding Shares on a fully diluted basis. The Offer is
also conditioned upon, among other things, the expiration or termination of all
waiting periods imposed upon consummation of the Offer by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the regulations thereunder
as well as the other conditions described in the Offer to Purchase.
<PAGE> 2
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of July 14, 1999 (the "MERGER AGREEMENT"), among Compuware, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with relevant provisions of the Delaware General Corporation Law
("DELAWARE LAW"), Purchaser will be merged with and into the Company (the
"MERGER"). Following consummation of the Merger, the Company will continue as
the surviving corporation (the "SURVIVING CORPORATION") and will become a wholly
owned subsidiary of Compuware. At the effective time of the Merger (the
"EFFECTIVE TIME"), each Share issued and outstanding immediately prior to the
Effective Time (other than Shares held in the treasury of the Company and any
Shares owned by Purchaser, Compuware or any direct or indirect wholly owned
subsidiary of Compuware or of the Company, if any, and other than Shares held by
shareholders who shall have demanded and perfected appraisal rights, if any,
under Delaware Law) will be canceled and converted automatically into the right
to receive $9.00 in cash, or any higher price that may be paid per Share in the
Offer, without interest. Purchaser has entered into Shareholder Tender and
Voting Agreement with the directors and executive officers of the Company (the
"TENDERING SHAREHOLDERS") holding in the aggregate 356,434 Shares, representing
approximately 2.0% of the issued and outstanding Shares. Pursuant to the
agreement, each Tendering Shareholder has agreed, provided the Merger Agreement
has not been terminated, to tender to Purchaser substantially all Shares
beneficially owned by such Tendering Shareholder, and to vote such Shares in
favor of approval of the Merger Agreement and the transactions contemplated
thereby.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT EACH OF THE OFFER
AND THE MERGER IS ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF, THE
SHAREHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to EquiServe
(the "DEPOSITARY") of Purchaser's acceptance for payment of such Shares pursuant
to the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment 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 payments from Purchaser and
transmitting such payments to tendering shareholders whose Shares have been
accepted for payment. Under no circumstances will interest on the purchase price
for Shares be paid, regardless of any delay in making such payment. In all
cases, payment for Shares tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "SHARE CERTIFICATES") or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in Section 2 of the
Offer to Purchase) pursuant to the procedure set forth in Section 3 of the Offer
to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any 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) any other documents required under the Letter of
Transmittal.
The term "Expiration Date" means 12:00 midnight, Eastern Time, on Thursday,
August 19, 1999, unless and until Purchaser extends the period of time during
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date on which the Offer, as so extended by Purchaser, shall
expire. Purchaser expressly reserves the right, in its sole discretion (but
subject to the terms and conditions of the Merger Agreement), at any time and
from time to time, to extend for any reason the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary. 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. Any such extension will be followed as promptly as
practicable by public announcement thereof, such announcement to be made no
later than 9:00 a.m., Eastern Time, on the next business day after the
previously scheduled expiration date of the Offer. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering shareholder to withdraw such
shareholder's Shares. There can be no assurance that Purchaser will extend the
Offer.
2
<PAGE> 3
Pursuant to the Merger Agreement, Purchaser may make any changes in the
terms and conditions of the Offer, provided that, without the Company's consent,
Purchaser may not (i) decrease the purchase price, (ii) change the form of
consideration payable in the Offer, (iii) reduce the minimum or maximum number
of Shares to be purchased in the Offer, (iv) impose conditions to the Offer in
addition to those set forth in the Merger Agreement, (v) extend the Expiration
Date of the Offer except as permitted by the terms of the Merger Agreement, or
(vi) amend any other material terms of the Offer in a manner materially adverse
to the Company's shareholders.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the expiration of the Offer and, unless theretofore accepted for
payment by Purchaser pursuant to the Offer, may also be withdrawn at any time
after September 16, 1999. For a withdrawal to be effective, a written or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover page 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 of such Shares, if different from that of
the person who tendered such Shares. If Share Certificates evidencing Shares to
be withdrawn have been delivered or otherwise identified to the Depositary,
then, prior to the physical release of such Share Certificates, the serial
numbers shown on such Share Certificates must be submitted to the Depositary and
the signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution (as defined in Section 3 of the Offer to Purchase), unless such
Shares have been tendered by an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfer as set forth in
Section 3 of the Offer to Purchase, any notice of withdrawal must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares. All questions as to the form and validity
(including the time of receipt) of any notice of withdrawal will be determined
by Purchaser, in its sole discretion, whose determination will be final and
binding.
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, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's shareholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
shareholder list 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 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.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent as set forth below, and
copies will be furnished promptly at Purchaser's expense. No fees or commissions
will be paid to brokers, dealers or other persons (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
or
ALL OTHERS CALL TOLL-FREE (888) 750-5834
July 22, 1999
3
<PAGE> 1
EXHIBIT (a)(8)
NEWS RELEASE
[COMPUWARE CORPORATION LETTERHEAD]
FOR IMMEDIATE RELEASE
JULY 15, 1999
COMPUWARE TO ACQUIRE VIASOFT, INC.
FARMINGTON HILLS, Mich. - July 15, 1999 - Compuware Corporation (NASDAQ: CPWR)
and Viasoft, Inc. (Viasoft) (NASDAQ: VIAS) today announced they have entered
into an agreement for Compuware to acquire Viasoft through a cash tender offer.
A wholly owned subsidiary of Compuware will offer to purchase any and all
outstanding shares of Viasoft's common stock for $9 per share. The transaction
has been approved by the Boards of Directors of both Viasoft and Compuware.
Viasoft is a leader in understanding enterprise applications to help companies
realize the greatest return on their information technology investments. The
company provides business solutions consisting of specialized professional
services and award-winning software that is designed to enable customers
worldwide to cost-effectively manage and evolve their information technology
assets. Viasoft's suite of products and services -including its recently
announced advanced e-commerce transformation product for IBM MVS Cobol
applications complement Compuware's Testing and Implementation solutions.
Together the combined companies are expected to be ideally positioned to help
large corporations deploy evolving technologies.
"We are very excited to welcome Viasoft's team to the Compuware family," said
Joseph A. Nathan, Compuware President and Chief Operating Officer. "Acquiring
Viasoft will accelerate work underway at Compuware to help our clients better
manage maintenance backlogs and extend their legacy applications to take full
advantage of e-commerce opportunities."
"The Board of Directors and the team of employees at Viasoft are extremely proud
of the value that we have provided to our customers since 1985," stated Steven
D. Whiteman, Viasoft Chairman and CEO. "We have worked hard to deliver quality
products and services to our customers as well as provide challenging
opportunities for our employees. We believe that our alliance with Compuware
will serve the best interests of our customers and employees. Compuware's strong
management team, its fundamental value system and the respect Compuware shows
for its employees make it an ideal partner."
In the tender offer, Compuware seeks to purchase no less than a majority of
Viasoft's outstanding shares on a fully diluted basis. Consummation of the
tender offer will be subject to the expiration or termination of any applicable
antitrust waiting period, the receipt of any required regulatory approvals and
customary conditions. Following completion of the tender offer, the subsidiary
of Compuware will be merged into Viasoft (with the approval of Viasoft
shareholders, if necessary), and all of Viasoft's shares not owned by Compuware
will be converted into the right to receive $9 per share in cash.
-MORE-
<PAGE> 2
Page 2
Compuware to Acquire Viasoft, Inc.
July 15, 1999
ABOUT VIASOFT, INC.
Headquartered in Phoenix, Ariz., Viasoft provides sales and professional
services through regional offices in the United States, Canada, Australia,
Europe and a growing network of international subsidiaries, distributors and
resellers. For more information on Viasoft's services and technologies, please
visit the company's World Wide Web site at www.viasoft.com.
ABOUT COMPUWARE CORPORATION
Compuware productivity solutions help 14,000 of the world's largest corporations
more efficiently maintain and enhance their most critical business applications.
Providing immediate and measurable return on information technology investments,
Compuware products and services improve quality, lower costs and increase the
speed at which systems can be developed, implemented and supported. Inclusive of
pending acquisitions, Compuware employs nearly 15,000 information technology
professionals worldwide, including more than 10,500 in its professional services
organization. With fiscal 1999 revenues of $1.6 billion, Compuware is the world
leader in client/server development technology. For more information on
Compuware, please contact the corporate offices at 800-521-9353. Compuware also
can be found on the World Wide Web at http://www.compuware.com.
Statements herein concerning the growth and strategies of Compuware and Viasoft
include forward-looking statements. Compuware's and/or Viasoft's actual results
may differ materially from those suggested as a result of various factors,
including, without limitation, Compuware's and Viasoft's ability to consummate
the transaction, successfully integrate Viasoft's operations and compete
successfully with existing and future competitors. Interested parties should
refer to the disclosure set forth in Compuware's and Viasoft's recent public
filings, under the caption "Risk Factors" and elsewhere, for additional
information regarding risks affecting Compuware's or Viasoft's financial
conditions and results of operations.
PRESS CONTACT
Christopher M. F. Norris, Director, Corporate Communications and Investor
Relations, Compuware Corporation, 248-737-7506.
###
<PAGE> 1
Exhibit (b)(1)
MORGAN STANLEY SENIOR FUNDING, INC.
1585 Broadway
New York, New York 10036
COMERICA BANK
500 Woodward Avenue
Detroit, Michigan 48226
July 14, 1999
Compuware Corporation
31440 Northwestern Highway
Farmington Hills, Michigan 48334-2534
Attention: Elliot R. Stark
Executive Vice President
re Commitment Letter
Dear Elliot:
You have advised Morgan Stanley Senior Funding, Inc. ("MSSF")
and Comerica Bank ("Comerica", and together with MSSF, the "Agents") that
Compuware Corporation (the "Borrower") intends to (i) purchase all of the
outstanding shares of capital stock of Data Processing Resources Corporation
("DPRC") for an aggregate purchase price of $470 million (which amount includes
the refinancing of up to $115 million in principal amount of existing
convertible subordinated debt of DPRC) (collectively, the "DPRC Acquisition")
and (ii) repay in full, and terminate, its existing line of credit with Comerica
(the "Existing Credit Facility"). We understand that except for the existing
debt of DPRC which is to be refinanced, neither DPRC nor any of its subsidiaries
will have any other material debt.
MSSF and Comerica understand that the sources of funds needed
to effect the DPRC Acquisition, to terminate the Existing Credit Facility, to
pay related fees and expenses and to provide for the ongoing working capital and
general corporate needs of the Borrower and its subsidiaries shall be provided
through the incurrence by the Borrower of a $900 million senior bank reducing
revolving credit facility (the "Revolving Credit Facility"). A summary of
certain of the terms and conditions of the Revolving Credit Facility is set
forth in Exhibit A attached hereto (the "Term Sheet"). Please note that those
matters that are not covered or made clear herein or in the Term Sheet or in the
related fee letter dated the date hereof (the "Fee Letter") are subject to
mutual agreement of the parties hereto. The terms and conditions of this
commitment may be modified only in writing signed by each of the parties hereto.
<PAGE> 2
Each of MSSF and Comerica is pleased to confirm that (i) each
of MSSF and Comerica severally commits to provide, subject to the terms and
conditions set forth herein and in the Term Sheet, $540 million and $360
million, respectively, of the Revolving Credit Facility (each a "Commitment"),
(ii) MSSF shall act as lead arranger and book manager for the Revolving Credit
Facility and (iii) Comerica shall act as co-arranger and as administrative agent
for the Revolving Credit Facility. 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)
will be paid in connection with the Revolving Credit Facility unless you and we
shall so agree.
MSSF and Comerica reserve the right, prior to or after
execution of the definitive credit documentation for the Revolving Credit
Facility, to syndicate all or part of their Commitment for the Revolving Credit
Facility to one or more lending institutions (the "Lenders") that will become
parties to such definitive credit documentation pursuant to a syndication to be
managed by the Agents. To the extent that the Agents receive commitments with
respect to the Revolving Credit Facility from one or more other Lenders, the
Agents shall be relieved of their Commitment for the Revolving Credit Facility.
The Agents may commence syndication efforts promptly after the execution of this
letter by you and you agree actively to assist the Agents in achieving a
syndication that is satisfactory to the Agents. Such syndication will be carried
out in consultation with you and will be accomplished by a variety of means,
including direct contact during the syndication between your senior management
and advisors and the proposed syndicate members. To assist the Agents in their
syndication efforts, you hereby agree, both before and after the closing of the
Revolving Credit Facility, (i) to provide and cause your advisors to provide the
Agents and the other prospective syndicate members upon request with all
information reasonably deemed necessary by the Agents to complete syndication,
including but not limited to information and evaluations prepared by you and
your advisors or on your behalf relating to you, DPRC and the transactions
contemplated hereby (it being understood that your obligation under this clause
(i) is subject to any third party binding confidentiality provisions that you
are subject to, although you agree to use your reasonable efforts to obtain any
necessary consents so that such confidential information may be provided to the
Agents), (ii) to assist the Agents, upon request, in the preparation of an
Information Memorandum to be used in connection with the syndication of the
Revolving Credit Facility and (iii) to make available your senior officers and
representatives, in each case from time to time and to attend and make
presentations regarding the business and prospects of the Borrower, DPRC and
your and their subsidiaries at a meeting or meetings of Lenders or prospective
Lenders.
As you are aware, the Agents have not had the opportunity to
complete their business, financial, accounting and legal due diligence analysis
and review with respect to the transactions contemplated hereby and the
Borrower, DPRC and their respective subsidiaries. Each Agent's willingness to
provide and/or participate in the Revolving Credit Facility contemplated by this
letter is therefore subject to the completion of such analysis and review and
its satisfaction with the results thereof, and to the satisfaction of the
conditions precedent contained in the Term Sheet. Furthermore, if prior to the
Closing Date (as defined in the Term Sheet) either of the Agents discovers
information not known to it which such Agent reasonably believe has had, or is
likely to have, a materially adverse effect on the transactions contemplated
hereby or on the condition (financial or otherwise), business, property,
operations, assets,
-2-
<PAGE> 3
liabilities or prospects of the Borrower, DPRC or any of their respective
subsidiaries, the Agents (or either of them) may, in their sole discretion,
suggest alternative financing amounts or structures that assure adequate
protection for the Lenders or decline to provide or participate in the proposed
financing.
To induce the Agents to issue this letter, you hereby agree
that all reasonable out-of-pocket fees and expenses (including the reasonable
fees and expenses of counsel and consultants) of each of the Agents and their
affiliates arising in connection with this letter (and their due diligence and
syndication efforts in connection herewith) and in connection with the
transactions described herein shall be for your account, whether or not the
transactions contemplated hereby are consummated, the Revolving Credit Facility
is made available or definitive credit documents are executed. In addition, you
hereby agree to pay, when and as due, the fees described in the Fee Letter. You
further agree to indemnify and hold harmless each of the Lenders (including, in
any event, each of the Agents) and each director, officer, employee, agent and
affiliate thereof (each an "indemnified person") from and against any and all
actions, suits, proceedings (including any investigations or inquiries), claims,
losses, damages, liabilities or expenses of any kind or nature whatsoever which
may be incurred by or asserted against or involve any such indemnified person as
a result of or arising out of or in any way related to or resulting from this
letter, the transactions contemplated hereby or the extension (or use of
proceeds) of the Revolving Credit Facility contemplated by this letter, and you
agree to reimburse each indemnified person for any reasonable legal or other
reasonable out-of-pocket expenses incurred in connection with investigating,
defending or preparing to defend any such action, suit, proceeding (including
any investigation or inquiry) or claim (whether or not any Agent or any such
other indemnified person is a party to any action or proceeding out of which any
such expenses arise); provided, however, that you shall not have to indemnify
any indemnified person against any loss, claim, damage, expense or liability to
the extent that same resulted primarily from the gross negligence or willful
misconduct of such indemnified person (as determined by a court of competent
jurisdiction in a final and non-appealable decision). This letter is issued for
your benefit only and no other person or entity may rely hereon. Neither of the
Agents nor any Lender shall be responsible or liable to you or any other person
or entity for any consequential damages which may be alleged as a result of this
letter or the failure to provide the Revolving Credit Facility.
Each Agent reserves the right to employ the services of its
affiliates in providing services contemplated by this letter and to allocate, in
whole or in part, to such affiliates certain fees payable to the Agents in such
manner as the Agents and such affiliates may agree in their sole discretion. You
acknowledge that the Agents may share with any of their affiliates, and such
affiliates may share with the Agents, any information related to the
transactions contemplated hereby, the Borrower, DPRC and your and their
respective subsidiaries' affiliates, or any of the matters contemplated hereby.
Each Agent agrees to treat, and cause any such affiliate of such Agent to treat,
all non-public information provided to it by you as confidential information in
accordance with its customary practices for handling such information or as
otherwise may be agreed to by such Agent.
The provisions of the immediately preceding two paragraphs
shall survive any termination of this letter.
-3-
<PAGE> 4
Each Agent's commitment to provide its portion of the
Revolving Credit Facility as set forth above shall terminate on September 15,
1999 unless a definitive credit agreement evidencing the Revolving Credit
Facility has been executed and delivered by such date.
You are not authorized to show or circulate this letter to any
other person or entity (other than your legal and financial advisors in
connection with your evaluation hereof) until such time as you have accepted
this letter as provided in the immediately succeeding paragraph at which time
you may show a copy of this letter and the Term Sheet (but not the Fee Letter)
to DPRC and their respective legal and financial advisors in connection with
your proposal for the DPRC Acquisition contemplated hereby (except that,
notwithstanding the foregoing, you may make such public disclosures as, and to
the extent, you are required by law, in the opinion of your counsel, to make).
If this letter is not accepted by you as provided in the immediately succeeding
paragraph, you are to immediately return this letter (and any copies hereof) to
the undersigned. This letter may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts shall be an original, but all of which shall together constitute
one and the same instrument.
This letter replaces and supersedes our previous commitment
letter to you dated June 29, 1999 except with respect to the indemnification and
expense reimbursement provisions which shall survive in accordance with the
terms thereof.
If you are in agreement with the foregoing, please sign and
return to the Agents (including by way of facsimile transmission) the enclosed
copy of this letter, together with the Fee Letter, no later than 6:00 p.m., New
York time, on July 15, 1999. This letter shall terminate at the time and on the
date referenced in the immediately preceding sentence unless this letter and the
Fee Letter are executed and returned by you as provided in such sentence.
* * *
-4-
<PAGE> 5
THIS LETTER AND THE FEE LETTER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, AND ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT
OF OR CONTEMPLATED BY THIS LETTER AND/OR THE FEE LETTER IS HEREBY WAIVED. THE
PARTIES HERETO HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL
AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY
DISPUTE RELATED TO THIS LETTER AND/OR THE FEE LETTER OR ANY MATTERS CONTEMPLATED
HEREBY OR THEREBY.
Very truly yours,
MORGAN STANLEY SENIOR
FUNDING, INC.
By /s/ R. Bram Smith
--------------------------------------
Title: Managing Director
COMERICA BANK
By /s/ Timothy O'Rourke
--------------------------------------
Title: Vice President
Agreed to and Accepted this
day of , 1999:
- ------ -------
COMPUWARE CORPORATION
By /s/ Laura Fournier
-------------------------
Title: Senior Vice President
and Chief Financial Officer
-5-
<PAGE> 6
EXHIBIT A
SUMMARY OF CERTAIN TERMS AND CONDITIONS
OF THE REVOLVING CREDIT FACILITY
Unless otherwise defined herein, capitalized terms used herein and defined in
the letter to which this Exhibit A is attached (the "Commitment Letter") are
used herein as therein defined.
I. Description of the Revolving Credit Facility
Borrower: Compuware Corporation (the "Borrower").
Lead Arranger
and Book Manager: Morgan Stanley Senior Funding, Inc.
("MSSF").
Co-Arranger
and Administrative Agent: Comerica Bank ("Comerica", and together with
MSSF, the "Agents").
Lenders: MSSF, Comerica and/or a syndicate of lenders
formed by the Agents (the "Lenders").
Required Lenders: Majority.
Amount: $900 million reducing revolving credit
facility (the "Revolving Credit Facility"),
with a sub-limit to be determined for the
issuance of standby and trade letters of
credit ("Letters of Credit").
Use of
Proceeds: The loans made pursuant to the Revolving
Credit Facility (the "Loans") shall be
utilized (i) to finance the acquisition (the
"DPRC Acquisition") of Data Processing
Resources Corporation ("DPRC"), (ii) to
refinance the $115 million of existing
convertible subordinated notes of DPRC,
(iii) to pay the fees and expenses relating
thereto, (iv) to repay any outstanding loans
under the Borrower's existing credit
facility with Comerica (the "Existing Credit
Facility") and (v) for the Borrower's and
its subsidiaries' working capital and
general corporate purposes (including other
acquisitions).
Maturity: The final maturity of the Revolving Credit
Facility shall be four years from the
closing date of the Revolving Credit
Facility (the "Closing Date"), with all
outstanding Loans to be repaid in full on
(and all Letters of Credit to be terminated
by) such date (the "Maturity Date").
<PAGE> 7
EXHIBIT A
Page 2
Scheduled Commitment
Reductions: The commitments under the Revolving Credit
Facility shall be permanently reduced on the
second, third and fourth anniversaries of
the Closing Date in the amounts of $100
million, $100 million and $700 million,
respectively.
Availability: Loans may be borrowed, repaid and reborrowed
on or after the Closing Date and prior to
the Maturity Date; provided that $470
million of the Revolving Credit Facility
will be blocked until such time as the DPRC
Acquisition occurs.
Guaranties: Each direct and indirect material domestic
subsidiary of the Borrower (each a
"Guarantor" and, collectively, the
"Guarantors") shall be required to provide
an unconditional guaranty of all amounts
owing by the Borrower under the Revolving
Credit Facility (the "Guaranties"), with
such exceptions as are satisfactory to the
Agents.
The Guaranties shall contain terms and
conditions satisfactory to the Agents and
customary for transactions of this type.
Voluntary
Prepayments
and Commitment
Reductions: Permitted in whole or in part with prior
notice but without premium or penalty,
provided that voluntary prepayments of
Eurodollar Loans made on a date other than
the last day of an interest period
applicable thereto shall be subject to
customary breakage costs.
Mandatory
Repayments: Loans shall be required to be prepaid (and
Letters of Credit cash collateralized) if at
any time the aggregate principal amount
thereof exceeds the total Revolving Credit
Facility commitments, with such prepayment
(and/or cash collateralization) to be in an
amount equal to such excess.
Interest Rates: At the Borrower's option, Loans may be
maintained from time to time as (x) Base
Rate Loans, which shall bear interest at the
Base Rate in effect from time to time plus
the Applicable Margin or (y) Eurodollar
Loans which shall bear interest at the
Eurodollar Rate (adjusted for maximum
reserves) as determined by the
Administrative Agent for the respective
interest period plus the Applicable Margin.
The Applicable Margin shall be determined by
reference to the Borrower's long-term senior
unsecured debt rating as set forth on
Schedule I attached hereto.
<PAGE> 8
EXHIBIT A
Page3
"Base Rate" shall mean the higher of (x) 1/2
of 1% in excess of the overnight federal
funds rate and (y) the rate that the
Administrative Agent announces from time to
time as its prime lending rate, as in effect
from time to time.
Interest periods of 1, 2, 3 and 6 months
shall be available in the case of Eurodollar
Loans.
The Revolving Credit Facility shall include
customary protective provisions for such
matters as capital adequacy, increased
costs, reserves, funding losses, illegality
and withholding taxes. The Borrower shall
have the right to replace any Lender that
charges a material amount in excess of that
being charged by the other Lenders with
respect to contingencies described in the
immediately preceding sentence.
Interest in respect of Base Rate Loans shall
be payable quarterly in arrears on the last
business day of each calendar quarter.
Interest in respect of Eurodollar Loans
shall be payable in arrears at the end of
the applicable interest period and every
three months in the case of interest periods
in excess of three months. Interest will
also be payable at the time of repayment of
any Loans and at maturity. All interest on
Base Rate Loans, Eurodollar Loans and any
fees shall be based on a 360-day year and
actual days elapsed, provided that interest
on Base Rate Loans determined by reference
to the prime lending rate shall be based on
a 365- (or 366-, as the case may be) day
year and actual days elapsed.
Default Interest: Overdue principal, interest and other
amounts shall bear interest at a rate per
annum equal to the greater of (i) the rate
which is 2% in excess of the rate otherwise
applicable to Base Rate Loans from time to
time and (ii) the rate which is 2% in excess
of the rate then borne by such borrowings.
Such interest shall be payable on demand.
Commitment Fees: The applicable percentage per annum as set
forth on Schedule I hereto of the unutilized
commitments under the Revolving Credit
Facility, as in effect from time to time,
commencing on the Closing Date to and
including the termination of the Revolving
Credit Facility, payable quarterly in
arrears and upon the termination of the
Revolving Credit Facility.
Letter of
Credit Fees: The Applicable Margin as in effect from time
to time for Loans maintained as Eurodollar
Loans to be shared proportionately by the
Lenders in accordance with their
participation in the respective
<PAGE> 9
EXHIBIT A
Page 4
Letter of Credit, and a facing fee of 1/8 of
1% per annum to be paid to the issuer of the
Letter of Credit for its own account, in
each case calculated on the aggregate stated
amount of all Letters of Credit for the
stated duration thereof. In addition, the
issuer of a Letter of Credit will be paid
its customary administrative charges in
connection with each Letter of Credit issued
by it.
Agent/
Lender Fees: The Agents and the Lenders shall receive
such other fees as have been separately
agreed upon.
Assignments and
Participations: The Borrower may not assign its rights or
obligations under the Revolving Credit
Facility without the prior written consent
of the Lenders. Any Lender may assign, and
may sell participations in, its rights and
obligations under the Revolving Credit
Facility, subject (x) in the case of
participations, to customary restrictions on
the voting rights of the participants and
(y) in the case of assignments, to such
limitations as may be established by the
Agents (including (i) a minimum assignment
amount of $5 million (or if less, the entire
amount of such assignor's outstanding
commitment and Loans at such time), (ii) an
assignment fee in the amount of $3,500 (or
$1,500 in the case of assignments between
existing Lenders) to be paid by the
respective assignor or assignee to the
Administrative Agent and (iii) the receipt
of the consent of the Administrative Agent
(which consent shall not be unreasonably
withheld or delayed). The Revolving Credit
Facility shall provide for a mechanism which
will allow for each assignee to become a
direct signatory to the Revolving Credit
Facility and will relieve the assigning
Lender of its obligations with respect to
the assigned portion of its outstanding
Loans.
Documentation;
Governing Law: The Lenders' commitments will be subject to
the negotiation, execution and delivery of
definitive financing agreements (and related
guaranties, etc.) consistent with the terms
of this Term Sheet, in each case prepared by
counsel to the Agents, and satisfactory to
the Borrower, the Agents and the Lenders
(including, without limitation, as to the
terms, conditions, representations,
covenants and events of default contained
therein). All documentation shall be
governed by New York law.
Commitment
Termination: The commitments hereunder shall terminate on
September 15, 1999 unless definitive
documentation for the Revolving Credit
Facility
<PAGE> 10
EXHIBIT A
Page 5
has been executed and delivered and the
Closing Date has occurred by such date.
Conditions
Precedent: Those conditions precedent that are usual
and customary for these types of facilities,
and such additional conditions precedent as
are appropriate under the circumstances.
Without limiting the foregoing, the
following conditions shall apply:
A. Conditions to the Closing Date
(i) The Existing Credit Facility shall have been
(or concurrently with the incurrence of
Loans shall be) terminated and all amounts
outstanding thereunder shall have been (or
concurrently with the incurrence of Loans
shall be) repaid in full.
(ii) All necessary governmental (domestic and
foreign) and material third party approvals
and/or consents in connection with the
Revolving Credit Facility and otherwise
referred to herein shall have been obtained
and remain in effect, and all applicable
waiting periods shall have expired without
any action being taken by any competent
authority which, in the judgment of the
Agents, restrains, prevents, or imposes
materially adverse conditions upon, the
consummation of the Revolving Credit
Facility or otherwise referred to herein.
Additionally, there shall not exist any
judgment, order, injunction or other
restraint prohibiting or imposing materially
adverse conditions upon the Revolving Credit
Facility.
(iii) Since March 31, 1999, nothing shall have
occurred (and neither of the Agents shall
have become aware of any facts or conditions
not previously known) which the Agents (or
either of them) shall determine has had, or
is reasonably likely to have, a material
adverse effect on the rights or remedies of
the Lenders, or on the ability of the
Borrower or its subsidiaries to perform
their obligations to the Lenders or which is
reasonably likely to have a materially
adverse effect on the business, property,
operations, assets, liabilities or condition
(financial or otherwise) of the Borrower and
its subsidiaries taken as a whole.
(iv) No litigation by any entity (private or
governmental) shall be pending or threatened
with respect to the Revolving Credit
Facility or any documentation executed in
connection therewith, or which the Agents
(or either of them) shall determine is
reasonably likely to have a materially
adverse effect on the business, property,
operations, assets, liabilities or condition
(financial or otherwise) of the Borrower and
its subsidiaries taken as a whole.
<PAGE> 11
EXHIBIT A
Page 6
(v) The Lenders shall have received legal
opinions from counsel, and covering matters,
reasonably acceptable to the Agents.
(vi) All agreements relating to, and the
corporate and capital structure of, the
Borrower and its subsidiaries, and all
organizational documents of the Borrower and
its subsidiaries, in each case shall be
reasonably satisfactory to the Agents.
(vii) All Loans and other financing to be made
pursuant to the Revolving Credit Facility
shall be in full compliance with all
applicable requirements of the margin
regulations.
(viii) All costs, fees, expenses (including,
without limitation, reasonable legal fees
and expenses) and other compensation
contemplated hereby and payable to the
Lenders and the Agents shall have been paid
to the extent due.
(ix) The Guaranties required hereunder shall have
been executed and delivered in form, scope
and substance satisfactory to the Agents.
(x) Receipt by the Agents of (i) satisfactory
historical financial statements for the
Borrower and its subsidiaries (including the
Borrower's 1999 fiscal year end audited
financial statements) and (ii) pro forma
financial statements of, and projections
for, the Borrower and its subsidiaries, in
each case for periods, and in form and
substance, reasonably satisfactory to the
Agents.
(xi) The Agents shall have completed their
business, financial, accounting and legal
due diligence analysis and review and shall
be satisfied with the results thereof.
(xii) There shall have been no material adverse
change, after the date hereof and prior to
the completion as determined by the Agents
of the primary syndication of the Revolving
Credit Facility, to the syndication market
for credit facilities similar in nature to
the Revolving Credit Facility contemplated
herein and there shall not have occurred and
be continuing during such period a material
disruption of or material adverse change in
financial, banking or capital markets that
would have a material adverse effect on such
primary syndication, in each case as
determined by the Agents (or either of them)
in their sole discretion. The Borrower shall
have fully cooperated in the syndication
efforts, including, without limitation, by
promptly providing the Agents with all
information reasonably deemed necessary by
it to successfully complete the syndication.
<PAGE> 12
EXHIBIT A
Page 7
B. Conditions to the DPRC Acquisition
(i) The Closing Date shall have occurred.
(ii) The structure and all terms of, and the
documentation for, the DPRC Acquisition
shall be reasonably satisfactory in form and
substance to the Agents. All conditions
precedent to the consummation of the DPRC
Acquisition as set forth in the
documentation relating thereto shall have
been satisfied, and not waived except with
the consent of the Agents, to the
satisfaction of the Agents. The DPRC
Acquisition shall have been consummated (or
concurrently with the incurrence of Loans
shall be consummated) in accordance with the
documentation therefor and all applicable
laws.
(iii) Conditions similar to those contained in
clauses (ii), (iii), (iv), (v), (vii), (x)
and (xi) of "A. Conditions to the Closing
Date" set forth above shall apply as
modified to relate to the DPRC Acquisition
and DPRC and its subsidiaries.
C. Conditions to all Loans and Letters of Credit
(i) All representations and warranties shall be
true and correct in all material respects
both before and after giving effect to
either the incurrence of the respective
Loans and the application of the proceeds
therefrom or the issuance of the respective
Letter of Credit.
(ii) No event of default, or event which with the
giving of notice or lapse of time or both
would be an event of default, shall have
occurred and be continuing, or would result
from the incurrence of the respective Loans
or the issuance of the respective Letter of
Credit.
Representations
and Warranties: Those representations and warranties usual
and customary for these types of facilities,
and such additional representations and
warranties as are appropriate under the
circumstances (including no material adverse
change and no material litigation).
Covenants: Those covenants usual and customary for
these types of facilities, and such
additional covenants as are appropriate
under the circumstances (with customary and
appropriate exceptions to be agreed upon).
Although the covenants applicable to the
Borrower and its subsidiaries have not yet
been specifically determined, we
<PAGE> 13
EXHIBIT A
Page 8
anticipate that the covenants shall in any
event include, but not be limited to:
(i) Limitations on other indebtedness.
(ii) Limitations on mergers and restrictions on
the sale of all or substantially all of the
assets of the Borrower and its subsidiaries.
(iii) Limitations on sale-leaseback transactions.
(iv) Limitations on investments (including
minority investments).
(v) Limitations on transactions with affiliates.
(vi) Maintenance of existence and material
properties.
(vii) Limitations on liens.
(viii) The following financial covenants, with
appropriate levels to be determined:
(a) Minimum Interest Coverage (i.e.,
EBITDA/interest expense);
(b) Maximum Leverage (i.e., Total
Debt/EBITDA); and
(c) Minimum Consolidated Shareholders'
Equity.
(ix) Customary insurance coverage.
(x) Financial reporting, notice of material
environmental and ERISA matters, notice of
material litigation and visitation and
inspection rights.
(xi) Compliance with laws, including
environmental laws.
(xii) Payment of taxes and other material
liabilities.
(xiii) Limitations on changes in nature of
business.
(xiv) Use of proceeds.
(xv) Limitations on restrictive agreements.
Events of Default: Those events of default usual and customary
for these types of facilities, and such
additional events of default as are
appropriate under the circumstances,
including, without limitation, a change of
<PAGE> 14
EXHIBIT A
Page 9
control (to be defined to the satisfaction
of the Agents) of the Borrower.
Indemnification: The documentation for the Revolving Credit
Facility will contain customary indemnities
for the Lenders (other than as a result of a
Lender's gross negligence or willful
misconduct).
Agents' Counsel: White & Case LLP.
<PAGE> 15
SCHEDULE I
Pricing Grid
<TABLE>
<CAPTION>
Ratings(1) Eurodollar Margin Base Rate Margin Commitment Fee
- ------- ----------------- ---------------- --------------
<S> <C> <C> <C>
Baa1/BBB+ or higher 1.00% 0% .200%
Baa2/BBB 1.25% .25% .250%
Baa3/BBB- 1.50% .50% .300%
Ba1/BB+ or below 1.75% .75% .375%
</TABLE>
- ------------------------
1 If there is a split rating or only one rating, then the pricing shall be
determined by reference to the lower credit rating or the only rating, as
the case may be. In addition, if both rating agencies fail to maintain a
rating, then the highest pricing level on the grid shall apply.
Notwithstanding the foregoing, for the first six months following the
Closing Date, (i) the interest rate margin shall be (x) 1.25% in the case
of Eurodollar Loans and (y) .250% in the case of Base Rate Loans and (ii)
the Commitment Fee shall be .250%.
<PAGE> 1
EXHIBIT (c)(1)
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
dated as of July 14, 1999
among
COMPUWARE CORPORATION,
CV ACQUISITION, INC.
and
VIASOFT, INC.
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - THE OFFER.................................................................................................2
1.1 The Offer...................................................................................................2
1.2 Viasoft Actions.............................................................................................3
ARTICLE II - THE MERGER...............................................................................................4
2.1 The Merger..................................................................................................4
2.2 Closing.....................................................................................................5
2.3 Effective Time..............................................................................................5
2.4 Effects of the Merger.......................................................................................5
2.5 Certificate of Incorporation and Bylaws.....................................................................5
2.6 Directors...................................................................................................5
2.7 Officers....................................................................................................5
2.8 Merger Without Shareholders Meeting.........................................................................5
ARTICLE III - EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES.....6
3.1 Effect on Capital Stock.....................................................................................6
3.2 Exchange of Certificates....................................................................................7
ARTICLE IV - REPRESENTATIONS AND WARRANTIES...........................................................................9
4.1 Representations and Warranties of Viasoft...................................................................9
4.2 Representations and Warranties of Compuware and Merger Sub.................................................26
ARTICLE V - COVENANTS RELATING TO CONDUCT OF BUSINESS................................................................29
5.1 Conduct of Business........................................................................................29
5.2 No Solicitation............................................................................................31
ARTICLE VI - ADDITIONAL AGREEMENTS...................................................................................33
6.1 Shareholder Approval; Preparation of Proxy Statement.......................................................33
6.2 Access to Information; Confidentiality.....................................................................35
6.3 Reasonable Efforts; Notification...........................................................................35
6.4 Stock Plans................................................................................................36
6.5 Post Merger Employment Benefits............................................................................36
6.6 Indemnification, Exculpation and Insurance.................................................................37
6.7 Directors..................................................................................................37
6.8 Fees and Expenses..........................................................................................38
6.9 Public Announcements.......................................................................................38
6.10 Shareholder Litigation.....................................................................................39
6.11 Certain Tax Matters........................................................................................39
ARTICLE VII - CONDITIONS PRECEDENT...................................................................................39
7.1 Conditions to Each Party's Obligation to Effect the Merger.................................................39
7.2 Conditions to Compuware's and Merger Sub's Obligation to Effect the Merger.................................40
7.3 Conditions to Viasoft's Obligation to Effect the Merger....................................................41
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
7.4 Conditions to the Short-Form Merger........................................................................41
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER.....................................................................41
8.1 Termination................................................................................................41
8.2 Effect of Termination......................................................................................43
8.3 Amendment..................................................................................................44
8.4 Extension; Waiver..........................................................................................44
8.5 Procedure for Termination, Amendment, Extension or Waiver..................................................44
ARTICLE IX - GENERAL PROVISIONS......................................................................................45
9.1 Nonsurvival of Representations and Warranties..............................................................45
9.2 Notices....................................................................................................45
9.3 Definitions................................................................................................46
9.4 Interpretation.............................................................................................49
9.5 Counterparts...............................................................................................50
9.6 Entire Agreement; No Third-Party Beneficiaries.............................................................50
9.7 Governing Law..............................................................................................50
9.8 Assignment.................................................................................................50
9.9 Enforcement................................................................................................50
</TABLE>
-ii-
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 14, 1999, among
Compuware Corporation, a Michigan corporation ("Compuware"), CV Acquisition,
Inc., a Delaware corporation and a wholly-owned subsidiary of Compuware ("Merger
Sub"), and Viasoft, Inc., a Delaware corporation ("Viasoft").
Recitals
A. In furtherance of the acquisition of Viasoft by Compuware on the
terms and subject to the conditions set forth in this Agreement, Compuware
proposes to cause Merger Sub to make a tender offer (as it may be amended from
time to time as permitted under this Agreement, the "Offer") to purchase all the
issued and outstanding shares of Common Stock, $0.001 par value, of Viasoft
("Viasoft Common Stock") (including the associated Preferred Share Purchase
Rights ("Rights") issued pursuant to the Viasoft Rights Agreement (defined
below)), at a price per share of Viasoft Common Stock (a "Share") of not less
than $9.00 net to the seller in cash and without interest thereon (such price,
as may hereafter be increased, the "Offer Price"), subject to reduction for any
applicable federal backup or other applicable withholding or stock transfer
taxes, upon the terms and subject to the conditions set forth in this Agreement,
and the Board of Directors of Viasoft has approved the Offer and has resolved to
recommend that Viasoft's shareholders accept the Offer.
B. The respective Boards of Directors of Compuware, Merger Sub and
Viasoft have approved the Offer and the merger of Merger Sub into Viasoft, as
set forth below (the "Merger"), upon the terms and subject to the conditions set
forth in this Agreement, whereby each issued and outstanding Share, other than
Shares owned directly or indirectly by Compuware or Viasoft and Dissenting
Shares (as defined in Section 3.1(d)), will be converted into the right to
receive the Offer Price.
C. Compuware, Merger Sub and Viasoft desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
D. Concurrently with the execution and delivery of this Agreement,
Compuware and certain shareholders of Viasoft have entered into a Shareholder
Tender and Voting Agreement, pursuant to which such shareholders agree to tender
their shares of Viasoft Common Stock in the Offer and vote in favor of the
Merger.
Therefore, the parties agree as follows:
<PAGE> 5
ARTICLE I
THE OFFER
1.1 The Offer.
(a) Subject to the provisions of this Agreement, Merger
Sub will, and Compuware will cause Merger Sub to, within five business days
after the public announcement (on the date hereof or the following business day)
of the execution of this Agreement, commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) the
Offer. The obligation of Merger Sub to, and of Compuware to cause Merger Sub to,
commence the Offer and accept for payment, and pay for, any Shares tendered
pursuant to the Offer will be subject to the conditions set forth in Exhibit A
and to the terms and conditions of this Agreement. Merger Sub expressly reserves
the right to waive any conditions to the Offer, to increase the price per Share
payable in the Offer, to extend the duration of the Offer (subject to the
limitations set forth in this Section), or to make any other changes in the
terms and conditions of the Offer; provided, however, that without Viasoft's
consent, no such change may be made which (i) decreases the price per Share
payable in the Offer, (ii) reduces the minimum (including by waiver of the
Minimum Tender Condition, as defined in Exhibit A) or maximum number of Shares
to be purchased in the Offer, (iii) imposes conditions to the Offer in addition
to those set forth in Exhibit A, (iv) changes the form of consideration payable
in the Offer, (v) extends the expiration of the Offer (the "Expiration Date")
(which will initially be twenty business days following the commencement of the
Offer) beyond five business days following the initial expiration of the Offer
except (A) as required by the Exchange Act or (B) in the case of any such
greater than five day extension of the Offer, in Merger Sub's reasonable
judgment, it is reasonably likely that during any such extension, any condition
set forth in Exhibit A (including the Minimum Tender Condition) which is not
satisfied as of the date of such extension will be satisfied during such
extension; provided that, without Viasoft's consent, the Expiration Date may not
be extended pursuant to clause (B) of this sentence beyond twenty business days
following the initial expiration of the Offer, or (vi) amends any other material
terms of the Offer in a manner materially adverse to Viasoft's shareholders.
Subject to the terms and conditions of this Agreement and the Offer (including,
if the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Merger Sub will, and Compuware will cause Merger Sub
to, accept for payment, and pay for, all shares of Viasoft Common Stock validly
tendered and not withdrawn pursuant to the Offer that Merger Sub becomes
obligated to accept for payment, and pay for, pursuant to the Offer as soon as
practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Compuware
and Merger Sub will file with the Securities and Exchange Commission (the "SEC")
a Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which will
contain an offer to purchase and a related letter of transmittal and summary
advertisement (such Schedule 14D-1 and the documents included therein pursuant
to which the Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents") and will mail the Offer Documents to the
shareholders of Viasoft. Compuware and Merger Sub agree that the Offer Documents
will comply as to form in all material respects with the Exchange Act and the
rules and regulations promulgated thereunder, and the Offer Documents, on the
date first published, sent or given to Viasoft's shareholders, will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or
-2-
<PAGE> 6
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by Compuware or Merger Sub with respect to information supplied by Viasoft
specifically for inclusion in the Offer Documents. Each of Compuware, Merger Sub
and Viasoft agrees promptly to correct any information provided by it for use in
the Offer Documents if and to the extent that such information will have become
false or misleading in any material respect, and each of Compuware and Merger
Sub further agrees to take all steps necessary to amend or supplement the Offer
Documents and to cause the Offer Documents as so amended or supplemented to be
filed with the SEC and to be disseminated to Viasoft's shareholders, in each
case as and to the extent required by applicable federal securities laws.
Viasoft and its counsel will be given a reasonable opportunity to review the
Offer Documents and all amendments and supplements thereto prior to their filing
with the SEC or dissemination to shareholders of Viasoft. Compuware and Merger
Sub agree to provide Viasoft and its counsel any comments Compuware, Merger Sub
or their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments including a copy of such
comments that are made in writing.
(c) Compuware will provide or cause to be provided to
Merger Sub on a timely basis the funds necessary to accept for payment, and pay
for, any shares of Viasoft Common Stock that Merger Sub becomes obligated to
accept for payment, and pay for, pursuant to the Offer.
1.2 Viasoft Actions.
(a) Viasoft hereby approves of and consents to the Offer
and represents that the Board of Directors of Viasoft, at a meeting duly called
and held, duly and unanimously adopted resolutions approving this Agreement, the
Offer and the Merger, determining that the terms of the Offer and the Merger are
fair to, and in the best interests of, Viasoft's shareholders and recommending
that Viasoft's shareholders accept the Offer and tender their shares pursuant to
the Offer and approve and adopt this Agreement and approve the Merger. Viasoft
represents that its Board of Directors has received the opinion of Broadview
International LLC that the proposed consideration to be received by the holders
of Shares pursuant to the Offer and the Merger is fair to such holders from a
financial point of view, and a complete and correct signed copy of such opinion
has been delivered by Viasoft to Compuware. Viasoft hereby consents to the
inclusion in the Offer Documents of the recommendation of Viasoft's Board of
Directors described in the first sentence of this Section 1.2(a) and has
obtained the consent of Broadview International LLC to the inclusion in the
Schedule 14D-9 of a copy of the written opinion referred to in the preceding
sentence. Viasoft has been advised by each of its directors and a majority of
the executive officers that each such person intends to tender all Shares (other
than Shares, if any, held by such person which if tendered, could cause such
person to incur liability under the provisions of Section 16(b) of the Exchange
Act) held by such person pursuant to the Offer.
(b) On the date the Offer Documents are filed with the
SEC, Viasoft will file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, together with all exhibits, amendments and supplements thereto as
well as the Information Statement required pursuant to Section 14(f) under the
Exchange Act, collectively the "Schedule 14D-9") containing the recommendation
described in
-3-
<PAGE> 7
paragraph (a) and will mail the Schedule 14D-9 to the shareholders of Viasoft.
Viasoft agrees that the Schedule 14D-9 will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, and, on the date filed with the SEC and on the date
first published, sent or given to Viasoft's shareholders, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by Viasoft with respect to information supplied
by Compuware or Merger Sub specifically for inclusion in the Schedule 14D-9.
Each of Viasoft, Compuware and Merger Sub agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information will have become false or misleading in any material
respect, and Viasoft further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or
supplemented to be filed with the SEC and disseminated to Viasoft's
shareholders, in each case as and to the extent required by applicable federal
securities laws. Compuware and its counsel will be given a reasonable
opportunity to review the Schedule 14D-9 and all amendments and supplements
thereto prior to their filing with the SEC or dissemination to shareholders of
Viasoft. Viasoft agrees to provide Compuware and its counsel any comments
Viasoft or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments including a copy of
such comments that are made in writing.
(c) In connection with the Offer, Viasoft will cause its
transfer agent promptly to furnish Merger Sub with mailing labels containing the
names and addresses of the record holders of Viasoft Common Stock as of a record
date and of those persons becoming record holders subsequent to such date,
together with copies of all lists of shareholders, security position listings
and, to the extent reasonably requested, computer files and other information in
Viasoft's possession or control regarding the beneficial owners of Viasoft
Common Stock, and will furnish to Merger Sub such information and assistance
(including updated lists of shareholders, security position listings and
computer files) as Compuware may reasonably request in communicating the Offer
to Viasoft's shareholders. Subject to the requirements of applicable law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Merger, Compuware and Merger Sub
and their agents will hold in confidence the information contained in any such
labels, listings and files, will use such information only in connection with
the Offer and the Merger and, if this Agreement is terminated, will, upon
request, deliver, and will use their best efforts to cause their agents to
deliver, to Viasoft all copies of such information then in their possession or
control.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Merger Sub will be merged with and into Viasoft at the
Effective Time (as defined in Section 2.3). Following the Effective Time, the
separate corporate existence of Merger Sub will cease and Viasoft will continue
as the surviving corporation (the "Surviving Corporation") and will succeed to
and assume all the
-4-
<PAGE> 8
rights and obligations of Merger Sub in accordance with the DGCL.
Notwithstanding the foregoing, Compuware may elect at any time prior to the
Merger to merge Viasoft with and into Merger Sub instead of merging Merger Sub
into Viasoft as provided above; provided, however, that Viasoft will not be
deemed to have breached any of its representations, warranties, covenants or
agreements set forth in this Agreement solely by reason of such election. In
such event, the parties agree to execute an appropriate amendment to this
Agreement in order to reflect the foregoing and, where appropriate, to provide
that Merger Sub will be the Surviving Corporation and will continue under the
name "Viasoft, Inc." At the election of Compuware, any direct or indirect
Subsidiary (as defined in Section 9.3) of Compuware may be substituted for
Merger Sub as a constituent corporation in the Merger. In such event, the
parties agree to execute an appropriate amendment to this Agreement in order to
reflect the foregoing.
2.2 Closing. The closing of the Merger will take place at 10:00
a.m. on a date to be specified by the parties, which will be no later than the
second business day after satisfaction or waiver of the conditions set forth in
Article VII (the "Closing Date"), at the Detroit, Michigan offices of Honigman
Miller Schwartz and Cohn, counsel to Compuware and Merger Sub, unless another
date or place is agreed to in writing by the parties hereto.
2.3 Effective Time. Subject to the provisions of this Agreement,
as soon as practicable on or after the Closing Date, the parties will file a
Certificate of Merger (or Certificate of Ownership and Merger in the case of a
Short-Form Merger (defined below)) with the Delaware Secretary of State. The
Merger will become effective at such time as the Certificate of Merger is duly
filed with the Delaware Secretary of State, or at such other time as Merger Sub
and Viasoft agree should be specified in the Certificate of Merger (the time the
Merger becomes effective being hereinafter referred to as the "Effective Time").
2.4 Effects of the Merger. The Merger will have the effects set
forth in the applicable provisions of the DGCL.
2.5 Certificate of Incorporation and Bylaws. The certificate of
incorporation and bylaws of Merger Sub as in effect at the Effective Time will
be the certificate of incorporation and bylaws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law;
provided that at the Effective Time, the certificate of incorporation of the
Surviving Corporation will be amended to read as follows: "The name of the
corporation is Viasoft, Inc."
2.6 Directors. The directors of Merger Sub immediately prior to
the Effective Time will be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
2.7 Officers. The officers of Merger Sub immediately prior to the
Effective Time will be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
2.8 Merger Without Shareholders Meeting. If Merger Sub (or any
other Subsidiary of Compuware) acquires, and maintains through the effectiveness
of the Merger, ownership of at least
-5-
<PAGE> 9
90% of the outstanding Shares sufficient to enable Merger Sub (or such other
Subsidiary) and Viasoft to cause the Merger to become effective without Viasoft
Shareholder Approval in accordance with Section 253 of the DGCL (the "Short-Form
Merger"), the parties hereto will, subject to the terms and conditions of this
Agreement (including Article VII) and applicable law, take all necessary and
appropriate action to cause the Short-Form Merger to become effective as
promptly as practicable.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any Shares or
any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger Sub. Each issued and
outstanding share of capital stock of Merger Sub will be converted into and
become one fully paid and nonassessable share of Common Stock, no par value, of
the Surviving Corporation.
(b) Cancellation of Treasury Stock and Compuware Owned
Stock. Each Share that is owned by Viasoft or by any subsidiary of Viasoft and
each Share that is owned by Compuware, Merger Sub or any other Subsidiary of
Compuware will automatically be cancelled and will cease to exist, and no
consideration will be delivered in exchange therefor.
(c) Conversion of Viasoft Common Stock. Subject to
Section 3.1(d), each issued and outstanding Share (other than Shares to be
cancelled in accordance with Section 3.1(b)) will be converted into the right to
receive from the Surviving Corporation in cash, without interest, the Offer
Price (the "Merger Consideration"). As of the Effective Time, all such Shares
will no longer be outstanding and will automatically be cancelled and will cease
to exist, and each holder of a certificate representing any such Shares will
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration, without interest.
(d) Shares of Dissenting Shareholders. Notwithstanding
anything in this Agreement to the contrary, to the extent provided by the DGCL,
any issued and outstanding Shares held by a person (a "Dissenting Shareholder")
who elects to demand appraisal of his shares and complies with all the
provisions of the DGCL concerning the right of holders of Viasoft Common Stock
to require appraisal of their Shares ("Dissenting Shares") will not be converted
as described in Section 3.1(c) but will become the right to receive such
consideration as may be determined to be due to such Dissenting Shareholder
pursuant to the laws of the State of Delaware. If, after the Effective Time,
such Dissenting Shareholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal, in any case pursuant to the
DGCL, his Shares will be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. Viasoft will give Compuware (i)
prompt notice of any demands for appraisal of Shares received by Viasoft and
(ii) the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. Viasoft will not, without the
prior written consent of Compuware, make any payment
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with respect to, or enter into a binding settlement agreement or make a written
offer to settle, any such demands.
(e) Rights to Receive Shares. Each right to receive
Shares, other than pursuant to (i) the Rights, (ii) the terms of securities
convertible into or exercisable for Shares which provide otherwise, or (iii) as
otherwise provided in this Agreement, will be converted into the right to
receive from the Surviving Corporation in cash, without interest, the Merger
Consideration.
3.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Compuware
will select a bank or trust company to act as paying agent (the "Paying Agent")
for the payment of the Merger Consideration upon surrender of certificates
representing Viasoft Common Stock.
(b) Compuware To Provide Funds. Compuware will take all
steps necessary to enable and cause the Surviving Corporation to provide to the
Paying Agent on a timely basis, as and when needed after the Effective Time,
funds necessary to pay for the Shares as part of the Merger pursuant to Section
3.1.
(c) Exchange Procedure. As soon as reasonably practicable
after the Effective Time, the Paying Agent will mail to each holder of record of
a certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates") whose Shares were converted
into the right to receive the Merger Consideration pursuant to Section 3.1: (i)
a letter of transmittal (which will specify that delivery will be effected, and
risk of loss and title to the Certificates will pass, only upon delivery of the
Certificates to the Paying Agent and will be in a form and have such other
provisions as Compuware may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Compuware,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate will be entitled to receive in exchange therefor the Merger
Consideration, and the Certificate so surrendered will forthwith be cancelled.
In the event of a transfer of ownership of Viasoft Common Stock which is not
registered in the transfer records of Viasoft, payment may be made to a person
other than the person in whose name the Certificate so surrendered is
registered, if such Certificate is properly endorsed or otherwise in proper form
for transfer and the person requesting such payment pays any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 3.2, each Certificate will be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration. No interest will be paid or will accrue on
the cash payable upon the surrender of any Certificate.
(d) No Further Ownership Rights in Viasoft Common Stock.
All cash paid upon the surrender of Certificates in accordance with the terms of
this Article III will be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares previously represented by such
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Certificates, and there will be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Paying
Agent for any reason, they will be cancelled and exchanged as provided in this
Article III.
(e) Failure to Timely Surrender; No Liability. Promptly
following the date that is six months after the Effective Time, the Paying Agent
will return to the Surviving Corporation all Merger Consideration and other
cash, property and instruments in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties will terminate.
Thereafter, each holder of a Certificate formerly representing a Share may
surrender such Certificate to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws) receive in exchange
therefor the Merger Consideration (without interest thereon). Notwithstanding
the foregoing, the Surviving Corporation will be entitled to receive from time
to time all interest or other amounts earned with respect to any cash deposited
with the Paying Agent as such amounts accrue or become available. If any
Certificates will not have been surrendered prior to 2 years after the Effective
Time (or immediately prior to such earlier date on which any payment pursuant to
this Article III would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.1(d)), the cash payment in respect
of such Certificate will, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any person previously entitled thereto. To the fullest extent permitted by
law, none of Compuware, Merger Sub, Viasoft or the Paying Agent will be liable
to any person in respect of any cash delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(f) Withholding Taxes. The right of any person to receive
any payment or consideration pursuant to this Agreement and the transactions
contemplated herein will be subject to any applicable requirements with respect
to the withholding of Taxes.
(g) Lost, Stolen or Destroyed Certificates. If any
certificates evidencing Shares have been lost, stolen or destroyed, the Paying
Agent will pay to such holder the Merger Consideration required pursuant to
Section 3.1, in exchange for such lost, stolen or destroyed certificates, upon
the making of an affidavit of that fact by the holder thereof with such
assurances as the Paying Agent, in its discretion and as a condition precedent
to the payment of the Merger Consideration, may reasonably require of the holder
of such lost, stolen or destroyed certificates.
(h) Supplementary Action. If at any time after the
Effective Time, any further assignments or assurances in law or any other things
are necessary or desirable to vest or to perfect or confirm of record in the
Surviving Corporation the title to any property or rights of either Viasoft or
Merger Sub, or otherwise to carry out the provisions of this Agreement, the
officers and directors of the Surviving Corporation are hereby authorized and
empowered, in the name of and on behalf of Viasoft and Merger Sub, to execute
and deliver any and all things necessary or proper to vest or to perfect or
confirm title to such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Viasoft. Except as set forth
in the disclosure letter delivered by Viasoft to Compuware concurrently with the
execution of this Agreement (the "Viasoft Disclosure Letter"), Viasoft
represents and warrants to Compuware and Merger Sub as follows:
(a) Organization, Standing and Corporate Power. Viasoft
and each of its subsidiaries is a corporation or partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has the requisite corporate or partnership power and
authority to carry on its business as now being conducted. Viasoft and each of
its subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed individually or in the aggregate would not have a Material Adverse
Effect on Viasoft. Viasoft has made available to Compuware complete and correct
copies of its certificate of incorporation and bylaws and the articles of
incorporation and bylaws or other organizational documents of its subsidiaries,
in each case as amended to the date of this Agreement.
(b) Subsidiaries. Section 4.1(b) of the Viasoft
Disclosure Letter lists each subsidiary of Viasoft. Except as set forth in
Section 4.1(b) of the Viasoft Disclosure Letter, all the outstanding shares of
capital stock of each such subsidiary have been validly issued and are fully
paid and nonassessable and (except as may be required by foreign jurisdictions)
are owned by Viasoft, by another subsidiary of Viasoft or by Viasoft and another
such subsidiary, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever, other than
resale restrictions imposed by applicable securities laws (collectively,
"Liens"). Except for the capital stock of its subsidiaries, Viasoft does not
own, directly or indirectly, any capital stock or other ownership interest in
any corporation, partnership, joint venture or other entity.
(c) Capital Structure. The authorized capital stock of
Viasoft consists of 48,000,000 shares of Viasoft Common Stock and 2,000,000
shares of preferred stock, $0.001 par value ("Viasoft Preferred Stock"). At the
close of business on July 12, 1999, (i) 17,906,636 shares of Viasoft Common
Stock and no shares of Viasoft Preferred Stock were issued and outstanding, (ii)
1,549,497 shares of Viasoft Common Stock were held by Viasoft in its treasury,
(iii) 3,338,681 shares of Viasoft Common Stock were reserved for issuance upon
exercise of outstanding Options (as defined in Section 6.4). Except as set forth
in Section 4.1(c)(i) of the Viasoft Disclosure Letter, the only plans or
arrangements pursuant to which Viasoft is obligated to issue Shares or pursuant
to which Options are outstanding are Viasoft's 1986 Stock Option Plan, the 1994
Equity Incentive Plan, the 1997 Equity Incentive Plan, the Outside Director
Stock Plan and the resolutions of the Board of Directors of Viasoft referenced
in Section 4.1(c)(i) of the Viasoft Disclosure Letter, each as amended,
(together, the "Viasoft Option Plans"), and Viasoft's Employee Stock Purchase
Plan (the "Stock Purchase Plan"). Except as set forth above, at the close of
business on July 12, 1999, no shares of capital stock or other voting securities
of Viasoft were issued, reserved for issuance or outstanding. There are no
outstanding stock appreciation rights. All outstanding shares of capital stock
of Viasoft are duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights
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created by Viasoft's certificate of incorporation, bylaws or any agreement to
which Viasoft is a party. Except as set forth in Section 4.1(c)(ii) of the
Viasoft Disclosure Letter, there are no bonds, debentures, notes or other
indebtedness of Viasoft having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
shareholders of Viasoft may vote. Except as set forth above or in Section
4.1(c)(iii) of the Viasoft Disclosure Letter, as of the date of this Agreement,
there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Viasoft or any of its subsidiaries is a party or by which any of them is bound
obligating Viasoft or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of Viasoft or of any of its subsidiaries or obligating
Viasoft or any of its subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. As of the date of this Agreement, there are no outstanding
contractual obligations (i) of Viasoft or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of Viasoft or any of its
subsidiaries or (ii) of Viasoft to vote or to dispose of any shares of the
capital stock of any of its subsidiaries.
(d) Authority; Noncontravention. Viasoft has all the
requisite corporate power and authority to enter into this Agreement and,
subject to, if required by law, adoption and approval of the Merger Agreement
and approval of the Merger by an affirmative vote of the holders of a majority
of the outstanding shares of Viasoft Common Stock (the "Viasoft Shareholder
Approval"), to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Viasoft and the consummation by
Viasoft of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of Viasoft, subject to
Viasoft Shareholder Approval, if such approval is required by law. This
Agreement has been duly executed and delivered by Viasoft and constitutes a
valid and binding obligation of Viasoft, enforceable against Viasoft in
accordance with its terms (except as enforcement hereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium and similar laws, both state
and federal, affecting the enforcement of creditors' rights or remedies in
general as from time to time in effect or (ii) the exercise by courts of equity
powers). The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or the loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Viasoft or any of
its subsidiaries under (i) the certificate of incorporation or bylaws of Viasoft
or the comparable charter or organizational documents of any of its
subsidiaries, (ii) except as set forth in Section 4.1(d) of the Viasoft
Disclosure Letter (including change of control or acceleration rights under
Viasoft Option Plans or other agreements disclosed therein), any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Viasoft or
any of its subsidiaries or their respective properties or assets or (iii) any
governmental filings and other matters referred to in the following sentence,
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Viasoft or any of its subsidiaries or their respective properties
or assets, other than, in the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights or Liens that individually or in the aggregate
would not (x) have a Material Adverse Effect on Viasoft, (y) materially impair
the ability of Viasoft to perform its obligations under this Agreement or (z)
prevent the consummation of
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any of the transactions contemplated by this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state or local government or any court, administrative or regulatory
agency or commission or other governmental authority or agency, domestic or
foreign (a "Governmental Entity"), is required by or with respect to Viasoft or
any of its subsidiaries in connection with the execution and delivery of this
Agreement by Viasoft or the consummation by Viasoft of the transactions
contemplated by this Agreement, except for (1) the filing of a pre-merger
notification and report form by Viasoft under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), (2) the filing with the SEC and the
National Association of Securities Dealers, Inc. of (A) the Schedule 14D-9 and
related Information Statement, (B) a proxy statement relating to Viasoft
Shareholder Approval, if such approval is required by law (as amended or
supplemented from time to time, the "Proxy Statement"), and (C) such reports
under Section 13(a) of the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated by this Agreement, (3) the
filing of the Certificate of Merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in which
Viasoft is qualified to do business, (4) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as would not
individually or in the aggregate (A) have a Material Adverse Effect on Viasoft,
(B) materially impair the ability of Viasoft to perform its obligations under
this Agreement or (C) prevent or have a material adverse effect on the ability
of the parties to consummate any of the transactions contemplated by this
Agreement and (5) any of the foregoing disclosed pursuant to the following
sentence. Section 4.1(d) of the Viasoft Disclosure Letter lists all consents,
waivers and approvals under any of Viasoft's or any of its subsidiaries'
agreements, contracts, licenses or leases required to be obtained in connection
with the consummation of the transactions contemplated hereby, which if,
individually or in the aggregate, were not obtained, would result in a Material
Adverse Effect on Viasoft.
(e) SEC Documents; Financial Statements. Viasoft has
filed in a timely manner all required reports, schedules, forms, statements and
other documents with the SEC since December 31, 1996. All such required reports,
schedules, forms, statements and other documents filed by Viasoft with the SEC
(including those that Viasoft may file subsequent to the date hereof) are
referred to herein as the "SEC Documents". As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except to the extent that information contained in any SEC
Document has been revised or superseded by a later Filed SEC Document (as
defined in Section 4.1(g)), none of the SEC Documents contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Viasoft included in the SEC Documents, including those filed after
the date hereof until the Closing, comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes
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thereto) and fairly present in all material respects the consolidated financial
position of Viasoft and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). Except as set forth in the SEC Documents or in Section
4.1(e) of the Viasoft Disclosure Letter or as contemplated by this Agreement,
since the date of the most recent consolidated balance sheet included in the SEC
Documents neither Viasoft nor any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles, consistently applied
("GAAP"), to be set forth on a consolidated balance sheet of Viasoft and its
consolidated subsidiaries or in the related notes to the consolidated financial
statements prepared in accordance with GAAP which are, individually or in the
aggregate, material to the business, results of operations or financial
condition of Viasoft and its subsidiaries taken as a whole, except liabilities
(i) provided for in the most recent consolidated balance sheet included in the
SEC Documents or (ii) incurred since the date of such balance sheet in the
ordinary course of business consistent with past practices.
(f) Information Supplied. None of the information
supplied or to be supplied by Viasoft specifically for inclusion or
incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9,
(iii) the information to be filed by Viasoft in connection with the Offer
pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information
Statement") or (iv) the Proxy Statement, will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to Viasoft's shareholders,
or, in the case of the Proxy Statement, at the time the Proxy Statement is first
mailed to Viasoft's shareholders or at the time of the Shareholders Meeting (as
defined in Section 6.1(a)), contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-9, the Information Statement and
the Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by Viasoft with respect to
statements made or incorporated by reference therein based on information
supplied by Compuware or Merger Sub specifically for inclusion or incorporation
by reference therein.
(g) Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed SEC Documents") or in Section 4.1(g) of the Viasoft
Disclosure Letter, since the date of the most recently audited financial
statements included in the Filed SEC Documents, Viasoft has conducted its
business only in the ordinary course, and there has not been (i) any Material
Adverse Change affecting Viasoft, (ii) any declaration, setting aside or payment
of any dividend or other distribution (whether in cash, stock or property) with
respect to any of Viasoft's capital stock, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iv)(x) any granting by Viasoft or
any of its subsidiaries to any executive officer of Viasoft or any of its
subsidiaries of any increase in excess of $10,000 per annum in compensation,
except in the ordinary course of business consistent with prior practice or as
was required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed SEC Documents, (y) any
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granting by Viasoft or any of its subsidiaries to any executive officer of any
increase in excess of $10,000 per annum in severance or termination pay, except
as was required under any employment, severance or termination agreements in
effect as of the date of the most recent audited financial statements included
in the Filed SEC Documents, or (z) except as set forth in Section 4.1(g)(iv) of
the Viasoft Disclosure Letter, any entry by Viasoft or any of its subsidiaries
into any employment, severance or termination agreement with any executive
officer, (v) any damage, destruction or loss, whether or not covered by
insurance, that has or could reasonably be expected to have a Material Adverse
Effect on Viasoft, (vi) any change in accounting methods, principles or
practices by Viasoft materially affecting its assets, liabilities or business,
except insofar as may have been required by a change in GAAP and SEC rules and
regulations, (vii) any material revaluation of any of Viasoft's assets,
including, without limitation, writing down the value of capitalized inventory
or writing off accounts receivable, other than in the ordinary course consistent
with past practice, or (viii) any executive officer or other key employee who
has terminated such person's employment with Viasoft, or threatened to do so,
nor has Viasoft been informed that any such person plans to do so, because of
the pendency of the Offer or Merger.
(h) Intellectual Property.
(i) Viasoft and its subsidiaries own, or are licensed
or otherwise possess legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
maskworks, net lists, schematics, technology, know-how, trade secrets,
inventory, ideas, algorithms, processes, computer software programs or
applications (in both source code and object code form), and tangible or
intangible proprietary information or material ("Intellectual Property") that
are material to the business of Viasoft and its subsidiaries as currently
conducted by Viasoft and its subsidiaries.
(ii) Section 4.1(h)(ii) of the Viasoft Disclosure
Letter lists (x) all patents and patent applications and all registered and
unregistered trademarks, trade names and service marks, registered copyrights,
which Viasoft considers to be material to its business and included in the
Intellectual Property, including the jurisdictions in which each such
Intellectual Property right has been issued or registered or in which any
application for such issuance and registration has been filed, (y) all material
licenses, sublicenses, and other agreements as to which Viasoft is a party and
pursuant to which any person other than Viasoft is authorized to use any
Intellectual Property (other than end-user licenses in Viasoft's current
standard form provided to Compuware's counsel), and (z) all material licenses,
sublicenses and other agreements as to which Viasoft is a party and pursuant to
which Viasoft is authorized to use any third party patents, trademarks or
copyrights, including software ("Third Party Intellectual Property Rights")
which are incorporated in, are, or form a part of any Viasoft product that is
material to its business.
(iii) To Viasoft's knowledge, there is no material
unauthorized use, disclosure, infringement or misappropriation of any
Intellectual Property rights of Viasoft or any of its subsidiaries, any trade
secret material to Viasoft or any of its subsidiaries, or any Intellectual
Property right of any third party to the extent licensed by or through Viasoft
or any of its subsidiaries, by any third party, including any employee or former
employee of Viasoft or any of its subsidiaries. To Viasoft's knowledge, no
Viasoft Intellectual Property or product or service of Viasoft is subject to
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any proceeding or outstanding decree, order, judgment, agreement, or stipulation
restricting in any manner the use, transfer, or licensing thereof by Viasoft, or
which may affect the validity, use or enforceability of such Viasoft
Intellectual Property. Neither Viasoft nor any of its subsidiaries has entered
into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property, other than indemnification provisions
contained in licenses, purchase, service or work orders with customers,
distribution and reseller agreements, or other agreements arising in the
ordinary course of business.
(iv) Viasoft is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in material breach of any license, sublicense or other
agreement relating to Viasoft Intellectual Property or Third Party Intellectual
Property Rights, Viasoft's service offerings or its ability to exploit its
products which could reasonably be expected to result in a material loss or
liability to Viasoft.
(v) No suit, action or proceeding involving Viasoft
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right,
or breach of any license or agreement involving Intellectual Property is
currently pending or, to the knowledge of Viasoft, is threatened, nor, to the
knowledge of Viasoft, is there any reasonable basis therefor. The manufacture,
marketing, licensing or sale of Viasoft's products and the provision of
Viasoft's services does not, to Viasoft's knowledge after due inquiry of each of
Viasoft's executive officers, directors and officers in charge of Viasoft's
corporate functions, infringe any patent, trademark, service mark, copyright,
trade secret or other proprietary right of any third party.
(vi) Viasoft has not received notice from any third
party that the operation of the business of Viasoft or any act, product or
service of Viasoft, infringes or misappropriates any Third Party Intellectual
Property Rights or constitutes unfair competition or trade practices under the
laws of any jurisdiction.
(vii) Except as set forth in Section 4.1(h)(vii) of the
Viasoft Disclosure Letter, to the knowledge of Viasoft, no Person has previously
infringed or misappropriated or is infringing or misappropriating any
Intellectual Property material to Viasoft.
(viii) Except as set forth in Section 4.1(h)(viii) of the
Viasoft Disclosure Letter, all current and former employees and consultants of
Viasoft have signed a confidentiality/nondisclosure agreement in the forms
attached to the Viasoft Disclosure Letter. All current and former employees and
consultants of Viasoft involved in product development work have signed an
invention assignment agreement in the form attached to the Viasoft Disclosure
Letter. To Viasoft's knowledge, no such current or former employees or
consultants of Viasoft have violated any such agreement or otherwise
misappropriated any trade secrets of Viasoft or of any third party. Viasoft does
not believe it is or will be necessary to utilize any inventions, trade secrets
or proprietary information of any of its employees made prior to their
employment by Viasoft, except for inventions, trade secrets or proprietary
information that have been assigned to Viasoft.
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(ix) Viasoft has taken all reasonable and appropriate
steps to protect and preserve the confidentiality of all Intellectual Property
not otherwise protected by patents, or patent applications or copyright
("Confidential Information"). All use, disclosure or appropriation of
Confidential Information owned by Viasoft by or to a third party has been
pursuant to the terms of a written agreement between Viasoft and such third
party. All use, disclosure or appropriation by Viasoft of Confidential
Information not owned by Viasoft has been pursuant to the terms of a written
agreement between Viasoft and the owner of such Confidential Information, or is
otherwise lawful.
(x) Except as set forth in Section 4.1(h)(x) of the
Viasoft Disclosure Letter, Viasoft's operating codes, programs, utilities,
development tools and other software, as well as all hardware and systems,
utilized by Viasoft or any of its subsidiaries internally or to develop products
or to provide services to customers, as well as all products of Viasoft or any
of its subsidiaries sold to customers (collectively, "Systems") will not, as a
result of processing data containing dates in the year 2000 and any preceding or
following years, fail (except where a failure could not reasonably be expected
to result in a material loss or liability to Viasoft) to initiate or operate, or
to correctly store, represent and process all dates or abnormally terminate such
processing; provided that any date data input from external sources is in a four
digit year format or is specified by unambiguous algorithms or interfacing
rules. Except as set forth in Section 4.1(h)(x) of the Viasoft Disclosure
Letter, Viasoft's Systems operate and will operate substantially in accordance
with their specifications prior to, during and after the calendar year 2000 or
any leap years, except where a failure to so operate could not reasonably be
expected to result in a material loss or liability to Viasoft. Since January 1,
1998, Viasoft has not given, and none of its subsidiaries has given to customers
any written representations or warranties or indemnities with respect to year
2000 compliance or conformity, except (A) where Viasoft's liability is limited
to amounts paid to Viasoft or to repairing or replacing the Product pursuant to
the contract in which such representation, warranty or indemnity appears and
lost profits and consequential damages are expressly excluded, (B) pursuant to
Viasoft's standard form warranties attached as Exhibit 4.1(h)(x) to the Viasoft
Disclosure Letter, (C) as disclosed in Section 4.1(h)(x) of the Viasoft
Disclosure Letter, or (D) where the breach of such representations and
warranties or where such indemnities could not reasonably be expected to result
in a material loss or liability to Viasoft.
(i) Litigation. Except as disclosed in the Filed SEC Documents
or in Section 4.1(i) of the Viasoft Disclosure Letter, as of the date of this
Agreement, there is no suit, action or proceeding pending or, to the knowledge
of Viasoft, threatened against Viasoft or any of its subsidiaries, nor, to the
knowledge of Viasoft, is their any reasonable basis therefor, that individually
or in the aggregate could reasonably be expected to (i) have a Material Adverse
Effect on Viasoft, (ii) challenge or seek to enjoin or seek damages with respect
to Viasoft's entering into and performing this Agreement or that impair the
ability of Viasoft to perform its obligations under this Agreement or (iii)
prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Viasoft or any of its
subsidiaries having, or which is reasonably likely to have, any effect referred
to in the foregoing clauses (i), (ii) or (iii) above.
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<PAGE> 19
(j) Absence of Changes in Benefit Plans. Except as disclosed
in the Filed SEC Documents or Section 4.1(j) of the Viasoft Disclosure Letter,
since the date of the most recent audited financial statements included in the
Filed SEC Documents, there has not been any adoption or amendment in any
material respect by Viasoft or any of its subsidiaries of any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of Viasoft or any of its subsidiaries. Except as
disclosed in the Filed SEC Documents or Section 4.1(j) of the Viasoft Disclosure
Letter, there exist no employment, consulting, severance, termination or
indemnification agreements, arrangements or understandings between Viasoft or
any of its subsidiaries and any current or former employee, officer or director
of Viasoft or any of its subsidiaries as to which there is or could be aggregate
liability on the part of Viasoft or any of its subsidiaries in excess of
$100,000.
(k) ERISA Compliance.
(i) Viasoft is in compliance in all material respects with all
applicable laws, agreements and contracts relating to employment, employment
practices, wages, hours, and terms and conditions of employment, including, but
not limited to, employee compensation matters. Except as set forth in Section
4.1(k) of the Viasoft Disclosure Letter, Viasoft does not have any employment
contracts or consulting agreements currently in effect that are not terminable
at will (other than agreements with the sole purpose of providing for the
confidentiality of proprietary information or assignment of inventions).
(ii) Viasoft (w) has never been and is not now subject to a
union organizing effort, (x) is not subject to any collective bargaining
agreement with respect to any of its employees, (y) is not subject to any other
contract, written or oral, with any trade or labor union, employees' association
or similar organization and (z) does not have any current labor disputes.
Viasoft has good labor relations, has not been informed of any facts indicating
that the consummation of the transactions contemplated hereby will have a
material adverse effect on such labor relations, and has not been informed that
any of its key employees intends to leave its employ.
(iii) Neither Viasoft nor any trade or business (a "Viasoft
Affiliate") which is under common control with Viasoft within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended (the "Revenue
Code") has a pension plan which is subject to Section 412 of the Revenue Code or
subject to Title IV of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or maintains a "multiemployer plan" as defined in Section
3(37) of ERISA. Viasoft has made available to Compuware a true and complete copy
of, to the extent applicable, (i) such Viasoft Employee Plan, (ii) except as set
forth in Section 4.1(k)(iii) of the Viasoft Disclosure Letter, the most recent
annual report (Form 5500), (iii) each trust agreement related to such Viasoft
Employee Plan, (iv) the most recent summary plan description for each Viasoft
Employee Plan for which such a description is required and (v) the most recent
United States Internal Revenue Service ("IRS") determination letter issued with
respect to any Viasoft Employee Plan.
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<PAGE> 20
(iv) Each employment, severance or other similar contract,
arrangement or policy, each "employee benefit plan" as defined in Section 3(3)
of ERISA and each plan or arrangement (written or oral) providing for insurance
coverage (including any self-insured arrangements), workers' benefits, vacation
benefits, severance benefits, disability benefits, death benefits,
hospitalization benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits for employees, consultants or directors
which is entered into, maintained or contributed to by Viasoft or any Viasoft
Affiliate and covers any employee or former employee of Viasoft or any Viasoft
Affiliate (collectively referred to as "Viasoft Employee Plans") has been
maintained in compliance in all material respects with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
that are applicable to such Viasoft Employee Plan. Except as set forth in
Section 4.1(k)(iv) of the Viasoft Disclosure Letter, all contributions to any
Viasoft Employee Plan for all periods prior to the Effective Time have been
timely made or are accrued on Viasoft's financial statements.
(v) There has been no amendment to, written interpretation or
announcement (whether or not written) by Viasoft relating to, or change in
employee participation or coverage under, any Viasoft Employee Plan that would
increase materially the expense of maintaining such Viasoft Employee Plan above
the level of the expense incurred in respect thereof for Viasoft's fiscal year
ended June 30, 1999.
(vi) All Viasoft Employee Plans, to the extent applicable, are
in compliance, in all material respects, with (x) the continuation coverage
requirements of Section 4980B of the Revenue Code and Sections 601 through 608
of ERISA, (y) the Americans with Disabilities Act of 1990, as amended, and (z)
the Family Medical and Leave Act of 1993, as amended, and the regulations
thereunder.
(vii) No benefit payable or which may become payable by Viasoft
or any of its subsidiaries pursuant to any Viasoft Employee Plan or as a result
of or arising under this Agreement or the Agreement of Merger will constitute an
"excess parachute payment" (as defined in Section 280G(b)(1) of the Revenue
Code) which is subject to the imposition of an excise Tax under Section 4999 of
the Revenue Code or which would not be deductible by reason of Section 280G of
the Revenue Code. Except as set forth in Section 4.1(k)(vii) of the Viasoft
Disclosure Letter, neither Viasoft nor its subsidiaries is a party to any: (x)
agreement (other than as described in (y) below) with any executive officer or
other key employee thereof (A) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving Viasoft or its subsidiaries in the nature of any of the transactions
contemplated by this Agreement or the consummation of the transactions
contemplated hereby, (B) providing any term of employment or compensation
guarantee, or (C) providing severance benefits or other benefits after the
termination of employment of such employee regardless of the reason for such
termination of employment, or (y) agreement or plan, including, without
limitation, any stock option plan, stock appreciation rights plan or stock
purchase plan, any of the benefits of which will be materially increased, or the
vesting of benefits of which will be materially accelerated, by the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
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<PAGE> 21
(viii) Viasoft has made available to Compuware a list of the names
of all employees of Viasoft and of any of its subsidiaries and their salaries as
of the most recent practicable date.
(l) Taxes.
(i) Except as set forth in Section 4.1(l) of the Viasoft
Disclosure Letter, Viasoft and each of its subsidiaries has duly filed on a
timely basis all material Tax Returns required to be filed by it. All such
Returns are true, complete and correct in all material respects. Neither Viasoft
nor any of its subsidiaries has been delinquent in the payment of any material
Tax nor is there any material Tax deficiency outstanding, proposed or assessed
against Viasoft or any of its subsidiaries, nor has Viasoft or any of its
subsidiaries executed any unexpired waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax. Neither
Viasoft nor any of its subsidiaries has any liability for any material unpaid
Taxes which has not been accrued for or reserved on the balance sheet of Viasoft
contained in the most recent financial statements contained in the Filed SEC
Documents (the "Viasoft Balance Sheet") in accordance with GAAP, whether
asserted or unasserted, contingent or otherwise, which is material to Viasoft,
other than any liability for unpaid Taxes that may have accrued since the date
of the Viasoft Balance Sheet in connection with the operation of the business of
Viasoft and its subsidiaries in the ordinary course. The most recent financial
statements contained in the Filed SEC Documents properly reflect in accordance
with GAAP all Taxes payable by or properly accruable by Viasoft and its
subsidiaries for all taxable periods and portions thereof through the date of
such financial statements.
(ii) Except as set forth in Section 4.1(l) of the Viasoft
Disclosure Letter, no deficiencies for any Taxes have been proposed, asserted or
assessed against Viasoft or any of its subsidiaries that are not properly
reflected in accordance with GAAP in the most recent financial statements
contained in the Filed SEC Documents, and no requests for waivers of the time to
assess any such Taxes are pending. Viasoft and/or any of its subsidiaries have
not agreed with any Tax authority to extend the time to assess any Taxes beyond
the date of this Agreement. Except as set forth in Section 4.1(l)(ii) of the
Viasoft Disclosure Letter, none of the Returns of Viasoft and each of its
subsidiaries have been examined by the Internal Revenue Service or any other
taxing authority during the 5 year period ending on the Closing Date which has
resulted or may result in a liability in excess of $25,000 per Return or in
excess of $1,000,000 for all Returns. None of Viasoft and its subsidiaries has
entered into any closing agreement with respect to any taxable year. Except as
set forth in Section 4.1(l)(ii) of the Viasoft Disclosure Letter, none of
Viasoft and its subsidiaries is a party to any audit, dispute, claim, action or
proceeding relating to, or for the assessment or collection of, Taxes, nor has
such event been asserted or threatened in writing against Viasoft or any of its
subsidiaries or any of their assets that involves a liability or potential
liability in excess of $25,000 per Return or in excess of $1,000,000 for all
Returns. Viasoft and each of its subsidiaries has disclosed on their federal
income tax returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Revenue Code Section
6662. Neither Viasoft nor any of its subsidiaries is (nor has ever been) a party
to any Tax sharing agreement with any party other than Viasoft or its
subsidiaries. There are no Liens or security interests on any of the assets of
Viasoft or its subsidiaries that arose in connection with any failure (or
alleged failure) to pay Taxes.
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<PAGE> 22
(iii) Except as set forth in Schedule 4.1(l) of the Viasoft
Disclosure Letter, neither Viasoft nor any subsidiary is a party to any safe
harbor lease within the meaning of Section 168(f)(8) of the Revenue Code, as in
effect prior to amendment by the Tax Equity and Fiscal Responsibility Act of
1982. Viasoft is not and has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Revenue Code during
the applicable period specified in Section 897(c)(l)(A)(ii) of the Revenue Code.
Neither Viasoft nor any subsidiary has participated in an international boycott
as defined in Revenue Code Section 999. Neither Viasoft nor any subsidiary is a
member of, a partner in, or otherwise owns an interest in a partnership, limited
liability or other "pass through" entity. Neither Viasoft nor any subsidiary has
agreed, nor is it required to make, any adjustment under Revenue Code Section
481(a) by reason of a change in accounting method or otherwise. Neither Viasoft
nor any of its subsidiaries owns any interest in any controlled foreign
corporation (as defined in Section 957 of the Revenue Code), passive foreign
investment company (as defined in Section 1296 of the Revenue Code) or other
entity, the income of which is required to be included in the income of Viasoft
or any of its subsidiaries. Neither Viasoft nor any of its subsidiaries has been
a "distributing" or "controlled" corporation as defined in Section 355 of the
Revenue Code in a transaction intended to qualify under Section 355 and Section
368(a)(1)(D) of the Revenue Code within the two years immediately prior to the
signing of this Agreement. Neither Viasoft nor any subsidiary has liability for
the Taxes in excess of $100,000 of any person for any taxable period beginning
or ending during the 5 year period ending on the Closing Date under Treasury
Regulation ss.1.1502-6 (or any similar provision of state, local or foreign law)
as a transferee or successor, by contract or otherwise. Neither Viasoft nor any
subsidiary has granted a power of attorney with respect to any matter relating
to Taxes, except with respect to matters for which both (i) the identity of the
attorney or representative appointed, and a description of the Tax matter
covered, by the power of attorney is set forth in Section 4.1(l)(iii) of the
Viasoft Disclosure Letter, and (ii) a copy of the power of attorney is provided
to Compuware.
(iv) Neither Viasoft nor any of its subsidiaries has filed
any consent agreement under Section 341(f) of the Revenue Code or agreed to have
Section 341(f)(2) of the Revenue Code apply to any disposition of a subsection
(f) asset (as defined in Section 341(f)(4) of the Revenue Code) owned by Viasoft
or any of its subsidiaries.
(v) Schedule 4.1(l) sets forth all material Tax elections
for Viasoft and each of its subsidiaries. Except as set forth on Schedule
4.1(l), Viasoft and/or each of its subsidiaries does not have a net operating
loss or other tax attributes presently subject to limitation under Code
ss.ss.382, 383, or 384 or the underlying Treasury Regulations.
(vi) As used in this Agreement, "Tax" or "Taxes" will mean
all taxes, however, denominated, including any interest, penalties or other
additions to tax that may become payable in respect thereof, imposed by any
federal, territorial, state, local or foreign government or any agency or
political subdivision of any such government, which taxes will include, without
limiting the generality of the foregoing, all income or profits taxes
(including, but not limited to, federal income taxes and state income taxes),
payroll and employee withholding taxes, unemployment insurance, social security
taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes,
gross receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer taxes,
workers' compensation, Pension Benefit Guaranty
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Corporation premiums and other governmental charges, and other obligations of
the same or of a similar nature to any of the foregoing, which Viasoft or any of
its subsidiaries is required to pay, withhold or collect. As used in this
Agreement, "Returns" will mean all reports, estimates, declarations of estimated
tax, information statements and returns relating to, or required to be filed in
connection with, any Taxes, including information returns or reports with
respect to withholding and other payments to third parties.
(m) No Excess Parachute Payments. Any amount that could be
received (whether in cash or property or the vesting of property) as a result of
any of the transactions contemplated by this Agreement by any employee, officer
or director of Viasoft or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any employment, severance or termination agreement, other
compensation arrangement or benefit plan currently in effect would not be
characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Revenue Code). There is no agreement, contract or
arrangement to which Viasoft or any of its subsidiaries is a party that may
result in the payment of any amount that would not be deductible pursuant to
Sections 280G, 162 or 404 of the Revenue Code.
(n) Compliance with Applicable Laws.
(i) Viasoft and each of its subsidiaries has in effect
all federal, state, local and foreign governmental approvals, authorizations,
certificates, filings, franchises, licenses, notices, permits and rights
("Permits") necessary for it to own, lease or operate its properties and assets
and to carry on its business as now conducted, and there has occurred no default
under any such Permit, except for the lack of Permits and for defaults under
Permits which individually or in the aggregate would not have a Material Adverse
Effect on Viasoft. Except as disclosed in Section 4.1(n) of the Viasoft
Disclosure Letter, Viasoft and its subsidiaries are in compliance with all
applicable statutes, laws, ordinances, rules, orders and regulations of any
Governmental Entity, except for noncompliance which individually or in the
aggregate would not have a Material Adverse Effect on Viasoft.
(ii) Viasoft and its subsidiaries are, and have been, and
each of Viasoft's former subsidiaries, while subsidiaries of Viasoft, was in
compliance with all applicable Environmental Laws except for noncompliance which
individually or in the aggregate would not have a Material Adverse Effect on
Viasoft. The term "Environmental Laws" means any federal, state or local
statute, code, ordinance, rule, regulation, policy, guideline, permit, consent,
approval, license, judgment, order, writ, decree, directive, injunction or other
authorization, including the requirement to register underground storage tanks,
relating to: (x) Releases or threatened Releases of Hazardous Material into the
environment, including into ambient air, soil, sediments, land surface or
subsurface, buildings or facilities, surface water, ground water, publicly-owned
treatment works, septic systems or land; or (y) the generation, treatment,
storage, disposal, use, handling, manufacturing, transportation or shipment of
Hazardous Material.
(iii) During the period of ownership or operation by
Viasoft and its subsidiaries of any of their respective current or previously
owned or leased properties, there have been no Releases of Hazardous Material by
Viasoft or its subsidiaries, or, to Viasoft's knowledge, any other party, in
violation of Environmental Laws in, on, under or affecting such properties or,
to
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<PAGE> 24
the knowledge of Viasoft, any surrounding site, and none of Viasoft or its
subsidiaries have disposed of any Hazardous Material or any other substance in a
manner that could reasonably be anticipated to lead to a Release in violation of
Environmental Laws, except in each case for those which individually or in the
aggregate would not have a Material Adverse Effect on Viasoft. Prior to the
period of ownership or operation by Viasoft and its subsidiaries of any of their
respective currently or previously owned or leased properties, to the knowledge
of Viasoft, there were no Releases of Hazardous Material in, on, under or
affecting any such property or any surrounding site. The term "Release" has the
meaning set forth in 42 U.S.C. ss. 9601(22). The term "Hazardous Material" means
(1) hazardous materials, pollutants, contaminants, constituents, medical or
infectious wastes, hazardous wastes and hazardous substances as those terms are
defined in the following statutes and their implementing regulations: the
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq., the Comprehensive
Environmental Response, Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act, 42 U.S.C. ss. 9601 et seq., the
Clean Water Act, 33 U.S.C. ss. 1251 et seq., the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq., and the Clean Air Act, 42 U.S.C. ss. 7401 et seq.,
(2) petroleum, including crude oil and any fractions thereof, (3) natural gas,
synthetic gas and any mixtures thereof, (4) asbestos and/or asbestos containing
material, (5) radon and (6) PCBs, or materials or fluids containing PCBs.
(o) State Takeover Statutes; Rights Agreement. No Delaware
takeover statute or similar statute or regulation applies so as to impede, delay
or otherwise adversely affect, the Offer, the Merger, this Agreement, or any of
the transactions contemplated by this Agreement. Other than the Rights Plan
described in Section 4.1(o) of the Viasoft Disclosure Letter, Viasoft is not a
party to, nor affected by, any "rights agreement", "poison pill" or similar
plan, agreement or arrangement (a "Rights Plan") affecting the capitalization
of, or issuance of capital stock by, Viasoft, which would be triggered by the
Offer, the Merger, this Agreement or any other transaction contemplated hereby.
(p) Brokers; Schedule of Fees and Expenses. Except as set
forth in Section 4.1(p) of the Viasoft Disclosure Letter, no broker, investment
banker, financial advisor or other person, other than Broadview International
LLC, the fees and expenses of which will be paid by Viasoft (and a copy of whose
engagement letter has been provided to Compuware), is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission, nor to any fee
that is contingent on closing of the transactions contemplated hereby or that is
based on a percentage of the transaction value, in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Viasoft. Assuming consummation of the Merger, no such engagement
letter obligates Viasoft to continue to use their services or pay fees or
expenses in connection with any future transaction.
(q) Opinion of Financial Advisor. Viasoft's Board of Directors
has received the opinion of Broadview International LLC, dated the date of this
Agreement, to the effect that, as of such date, the consideration to be received
in the Offer and the Merger by Viasoft's shareholders is fair to Viasoft's
shareholders (other than Compuware and Merger Sub) from a financial point of
view, and a signed copy of such opinion has been delivered to Compuware.
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(r) Contracts, Debt Instruments.
(i) Set forth in Section 4.1(r) of the Viasoft
Disclosure Letter is (x) a list of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and instruments pursuant to which any
indebtedness of Viasoft or any of its subsidiaries in an aggregate principal
amount in excess of $100,000 is outstanding or may be incurred and (y) the
respective principal amounts currently outstanding thereunder. For purposes of
this Agreement, "indebtedness" will mean, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, or with
respect to deposits or advances of any kind to such person, (B) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments, (C)
all obligations of such person upon which interest charges are customarily paid,
(D) all obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such person, (E) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
such person's business), (F) all capitalized lease obligations of such person,
(G) all obligations of others secured by any lien on property or assets owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed, (H) all obligations of such person under interest rate or currency
hedging transactions (valued at the termination value thereof), (I) all letters
of credit issued for the account of such person (excluding letters of credit
issued for the benefit of suppliers to support accounts payable to suppliers
incurred in the ordinary course of business) and (J) all guarantees and
arrangements having the economic effect of a guarantee of such person of any
indebtedness of any other person.
(ii) Except as set forth in Section 4.1(r) of the
Viasoft Disclosure Letter, neither Viasoft nor any of its subsidiaries is in
violation of or in default under (nor does there exist any condition which upon
the passage of time or the giving of notice would cause such a violation of or
default under): (x) its certificate of incorporation or bylaws, (y) any loan or
credit agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding to which it is a party or by which it or any of its properties or
assets is bound, (z) any order, writ, injunction, decree, statute, rule or
regulation applicable to Viasoft or any of its subsidiaries, except for
violations or defaults that individually or in the aggregate would not have a
Material Adverse Effect on Viasoft.
(iii) Except as set forth in Section 4.1(r) of the
Viasoft Disclosure Letter, neither Viasoft nor any of its subsidiaries is a
party to or is bound by: (x) any agreement of indemnification or guaranty not
entered into in the ordinary course of business other than indemnification
agreements between Viasoft or any of its subsidiaries and any of its officers or
directors; (y) any agreement, contract or commitment currently in force relating
to the disposition or acquisition of assets not in the ordinary course of
business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise; or (z) any material joint marketing or
development agreement.
(s) Certain Agreements. Except as set forth in Section 4.1(s)
of the Viasoft Disclosure Letter, Viasoft and its subsidiaries are not parties
to or subject to any agreement which falls within any of the following
classifications:
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(i) any employment, deferred compensation, bonus or
contract of a similar nature requiring payments in excess of $100,000 per year
by Viasoft or any subsidiary;
(ii) any contract or agreement that materially restricts
or materially impairs Viasoft or any of its subsidiaries or employees from
carrying on such person's business as now conducted or any part thereof or from
competing in any line of business with any person, corporation or other entity
or that grants any exclusive license or distribution rights;
(iii) any collective bargaining agreement or other such
contract or agreement with any labor organization;
(iv) any lease of personal property requiring rental
payments of $250,000 or more throughout its term and having a term of one year
or more, whether as lessor or lessee;
(v) any mortgage, pledge, conditional sales contract,
security agreement, option, or any other similar agreement with respect to any
interest of Viasoft or any subsidiary in personal property;
(vi) any stock purchase, stock option, stock bonus,
stock ownership, profit sharing, group insurance, bonus, deferred compensation,
severance pay, pension, retirement, savings or other incentive, change in
control, welfare or employee plan or material agreement providing benefits to
any present or former employees, officers or directors of Viasoft or any of its
subsidiaries;
(vii) any agreement to acquire equipment or commitment to
make capital expenditures by Viasoft or any subsidiary of $50,000 or more;
(viii) any agreement for the sale of any material
properties or assets or for the grant of any preferential right to purchase any
such material properties or assets or which requires the consent of any third
party to the transfer and assignment of any such material properties or assets,
other than in the ordinary course of business in connection with Viasoft's sale
of properties or assets;
(ix) any agreement requiring Viasoft to indemnify any
current or former officer, director, employee or agent;
(x) any agreement of any kind, including any
distributorship, sales, marketing or representative agreement, which involves
future payments or performance of services or delivery of items, requiring
payments of $350,000 or more by Viasoft or any subsidiary; or
(xi) any agreement with a customer of Viasoft providing
for services to be performed for such customer for a fixed or capped fee or
payment structure.
Neither Viasoft nor any subsidiary is in default under any
contract or agreement, nor, to the knowledge of Viasoft, are any other parties
to such agreements in default, and to Viasoft's knowledge, no act or omission
has occurred which, with notice or lapse of time or both,
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would constitute a default under any term or provision of any contract or
agreement, except for such defaults which, individually or in the aggregate,
would not have a Material Adverse Effect on Viasoft. Each agreement disclosed in
items (i) through (xii) of this Section is in full force and effect and true and
complete copies of all such agreements have been provided to Compuware or its
representatives.
(t) Title to Properties.
(i) Section 4.1(t) of the Viasoft Disclosure Letter lists
all real property interests owned or leased by Viasoft or its subsidiaries.
Viasoft and each of its subsidiaries has good and marketable title to, or valid
leasehold interests in, all of its material properties and assets except for
such as are no longer used or useful in the conduct of its businesses or as have
been disposed of in the ordinary course of business and except for defects in
title, easements, restrictive covenants and similar encumbrances or impediments
that individually or in the aggregate would not materially interfere with its
ability to conduct its business as currently conducted. All such material
properties and assets, other than properties and assets in which Viasoft or any
of its subsidiaries has leasehold interests, are free and clear of all Liens,
except for Liens that individually or in the aggregate would not materially
interfere with the ability of Viasoft and its subsidiaries to conduct business
as currently conducted.
(ii) Viasoft and each of its subsidiaries has complied in
all material respects with the terms of all material leases to which it is a
party and under which it is in occupancy, and all such leases are in full force
and effect. Viasoft and each of its subsidiaries enjoys peaceful and undisturbed
possession under all such material leases.
(u) Labor Matters. Except as set forth in the Section 4.1(u)
of the Viasoft Disclosure Letter, (a) Viasoft and its subsidiaries are operating
and have operated their businesses in compliance in all material respects with
all applicable laws relating to such businesses respecting employment and
employment practices, terms and conditions of employment and wages and hours,
including the Immigration Reform and Control Act ("IRCA"), the Worker Adjustment
and Retraining Notification Act of 1988 ("WARN Act"), any such applicable laws
respecting employment of foreign nationals, employment discrimination, equal
opportunity, affirmative action, employee privacy, wrongful or unlawful
termination, workers' compensation, occupational safety and health requirements,
labor/management relations and unemployment insurance, the Family and Medical
Leave Act or related matters, and Viasoft and its subsidiaries are not engaged
in and have not engaged in any unlawful practice relating to such businesses
under such applicable laws, or in any unfair labor practice relating to the
business of Viasoft or its subsidiaries; (b) no Governmental Entity has given
Viasoft or any of its subsidiaries written notice regarding any pending charge,
audit, claim, complaint, investigation or review by or before any Governmental
Entity concerning or requesting in writing to explain any conflicts with or
violations of any such laws relating to the business conducted by Viasoft or
such subsidiary or in connection with the operation of the business, nor, to the
knowledge of Viasoft, is any such investigation threatened or pending, nor, to
the knowledge of Viasoft, has any such investigation occurred during the last
two years; (c) there is no labor strike, dispute, slowdown or stoppage actually
pending or, to the knowledge of Viasoft, threatened against or affecting the
business, and neither Viasoft nor any subsidiary has experienced any work
stoppage or other material labor difficulty relating to the business in the last
two years; (d) to the knowledge of
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Viasoft, no union representation question or union organizational activity
exists respecting employees and, to Viasoft's knowledge, no one has petitioned
within the last two years, and no one is now petitioning, for union
representation of any employees; (e) there exists no collective bargaining
agreement or other contract or agreement relating to the business with any labor
union or association representing any employee, and no collective bargaining
agreement affecting employees is currently being negotiated; and (f) Viasoft and
its subsidiaries are in material compliance with all obligations under all
Viasoft Employee Plans and all employment contracts and are not delinquent in
payments to any employees for any wages, salaries, commissions, bonuses or other
compensation for any services performed by them relating to the business or
amounts required to be reimbursed to such employees. Except as set forth in
Section 4.1(a) of the Viasoft Disclosure Letter, there are no pending or, to the
knowledge of Viasoft, threatened proceedings, actions or suits of any nature (i)
under or alleging violation of IRCA, WARN or any law respecting employment of
foreign nationals, employment discrimination, equal opportunity, affirmative
action, employee privacy, wrongful or unlawful termination or demotion, sexual
and other harassment, workers' compensation, occupational safety and health
requirements, labor/management relations (including any grievances or
arbitration proceeding arising out of or under any collective bargaining
agreements) and unemployment insurance, or matters involving any employee; (ii)
relating to alleged unlawful employment practices or unfair labor practices
involving any employee (or the equivalent thereof under any law); or (iii)
relating to alleged breaches of any of Viasoft Employee Plans. To Viasoft's
knowledge, no employee of Viasoft has in any material respect violated any
employment contract, confidentiality agreement, patent disclosure agreement or
noncompetition agreement between such employee and any former employer of such
employee due to such employee being employed by Viasoft or any of its
subsidiaries or disclosing to Viasoft or any of its subsidiaries trade secrets
or proprietary information of any such employer. No employee of Viasoft or any
of its subsidiaries has given notice to Viasoft or any of its subsidiaries, nor
is Viasoft otherwise aware, that any employee intends to terminate his or her
employment with Viasoft or any of its subsidiaries.
(v) Government Contracts. All representations, certifications
and disclosures made by Viasoft or any subsidiary to any Government Contract
Party have been in all material respects current, complete and accurate at the
times they were made. There have been no acts, omissions or noncompliance with
regard to any applicable public contracting statute, regulation or contract
requirement (whether express or incorporated by reference) relating to any
contracts of Viasoft or any subsidiary with any Government Contract Party in
either case that have led to or is reasonably likely to lead to, either before
or after the Closing Date, (a) any material claim or dispute involving Viasoft
or any subsidiary and/or Compuware or Merger Sub as successor in interest to
Viasoft and any Government Contract Party or (b) any suspension, debarment or
contract termination, or proceeding related thereto. There has been no act or
omission that relates to the marketing, licensing or selling to any Government
Contract Party of any of Viasoft's technical data, computer software, products
and services and that has led to or is reasonably likely to lead to, either
before or after the Closing Date, any cloud on any of Viasoft's or its
subsidiaries' rights in and to its technical data, computer software, products
and services. There is currently no dispute between Viasoft or any of its
subsidiaries and any Government Contract Party. For purposes of this Section,
the term "Government Contract Party" means any independent or executive agency,
division, subdivision, audit group or procuring office of the federal, state,
county, local or municipal government, including any prime contractor of the
federal government and any higher level
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subcontractor of a prime contractor of the federal government, and including any
employees or agents thereof, in each case acting in such capacity.
(w) Warranties, Guarantees and Indemnities. Except as
disclosed in Section 4.1(w) of the Viasoft Disclosure Letter, neither Viasoft
nor any of its subsidiaries has provided to its customers rights to obtain
refunds or made any other warranties, guarantees or indemnities with respect to
the services it provides to such customers except where Viasoft's liability is
limited to (i) amounts paid to Viasoft pursuant to the contract in which such
right, warranty, guaranty or indemnity appears and lost profits and
consequential damages are expressly excluded, and/or (ii) Viasoft's obligation
to remedy a deficiency under such contract without further charge to the
customer.
(x) Customer Relationships. Each of Viasoft and its
subsidiaries has good commercial working relationships with its customers and
suppliers. None of Viasoft's top twenty-five customers (based on Viasoft's
consolidated revenues for the fiscal year ended June 30, 1999 (each, a "Material
Customer")) has, from July 1, 1999 to the date of this Agreement, cancelled or
otherwise terminated its relationship with Viasoft or any subsidiary thereof,
decreased or limited materially the amount of product or services ordered from
Viasoft or any subsidiary thereof, or threatened to take any such action other
than in the ordinary course upon completion of customer projects.
(y) Product and Service Quality. Except as set forth in
Section 4.1(y) of the Viasoft Disclosure Letter, all products manufactured,
sold, licensed, leased or delivered by Viasoft and its subsidiaries and all
services provided by Viasoft and its subsidiaries, to customers on or prior to
the Closing Date conform in all material respects to applicable contractual
commitments, express and implied warranties, product specifications and quality
standards and none of Viasoft or its subsidiaries has any material liability
(and there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand against Viasoft or
its subsidiaries giving rise to any material liability) for replacement or
repair thereof or other damages in connection therewith. Neither Viasoft nor its
subsidiaries has received a complaint from a Material Customer regarding
Viasoft's or its subsidiaries' services pursuant to which such Material Customer
is withholding payment of any material amounts payable to Viasoft or such
subsidiary, or which is the subject of an ongoing dispute or correspondence
between Viasoft and such customer.
(z) Disclosure. Nothing in the Viasoft Disclosure Letter will
be deemed adequate to disclose an exception to a representation or warranty made
herein unless the disclosure identifies the exception with particularity and
describes the relevant facts in reasonable detail; provided that a particular
matter need only be disclosed once in such manner so long as it is
cross-referenced wherever else applicable in the Viasoft Disclosure Letter in a
manner sufficiently clear to identify to which representation or warranty an
exception is being made.
4.2 Representations and Warranties of Compuware and Merger Sub.
Compuware and Merger Sub represent and warrant to Viasoft as follows:
(a) Organization, Standing and Corporate Power. Each of
Compuware and Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of
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the jurisdiction in which it is incorporated and has the requisite corporate
power and authority to carry on its business as now being conducted. Each of
Compuware and Merger Sub is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed individually or in the aggregate would not have a material adverse
effect on Compuware.
(b) Authority; Noncontravention. Compuware and Merger Sub have
all requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Compuware and Merger Sub and the consummation by
Compuware and Merger Sub of the transactions contemplated by this Agreement have
been duly authorized by all necessary corporate action on the part of Compuware
and Merger Sub. This Agreement has been duly executed and delivered by Compuware
and Merger Sub and constitutes a valid and binding obligation of each such
party, enforceable against each such party in accordance with its terms (except
as enforcement hereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and similar laws, both state and federal, affecting
the enforcement of creditors' rights or remedies in general as from time to time
in effect or (ii) the exercise by courts of equity powers). The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Compuware or Merger Sub under (i) the articles of
incorporation or bylaws of Compuware or the certificate of incorporation or
bylaws of Merger Sub, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Compuware or Merger Sub or their respective properties
or assets or (iii) any governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Compuware or Merger Sub or their respective
properties or assets, other than, in the case of clause (ii) or (iii), any such
conflicts, violations, defaults, rights or Liens that individually or in the
aggregate would not (x) have a material adverse effect on Compuware and its
subsidiaries, taken as a whole, (y) materially impair the ability of Compuware
or Merger Sub to perform their obligations under this Agreement, (z) prevent the
consummation of any of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to Compuware
or Merger Sub in connection with the execution and delivery of this Agreement or
the consummation by Compuware or Merger Sub, as the case may be, of any of the
transactions contemplated by this Agreement, except for (1) the filing of a
pre-merger notification and report form under the HSR Act, (2) the filing with
the SEC and the National Association of Securities Dealers, Inc. of (A) the
Offer Documents and (B) such reports under Sections 13(a), 13(d) and 16(a) of
the Exchange Act as may be required in connection with this Agreement and the
transactions contemplated by this Agreement, (3) the filing of the Certificate
of Merger or an agreement of merger with the Delaware Secretary of State and
appropriate documents with the relevant authorities of other states in which
Viasoft is qualified to do business and (4) such other consents, approvals,
orders, authorizations, registrations, declarations and filings as would not
individually or in the aggregate (A) have a material adverse effect on Compuware
and its subsidiaries,
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taken as a whole, (B) impair the ability of Compuware and Merger Sub to perform
their respective obligations under this Agreement or (C) prevent the
consummation of any of the transactions contemplated by this Agreement.
(c) Information Supplied. None of the information supplied or
to be supplied by Compuware or Merger Sub specifically for inclusion or
incorporation by reference in the Offer Documents, the Schedule 14D-9, the
Information Statement or the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to Viasoft's shareholders,
or, in the case of the Proxy Statement, at the date the Proxy Statement is first
mailed to Viasoft's shareholders or at the time of the Shareholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Offer Documents will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation or warranty is made by
Compuware or Merger Sub with respect to statements made or incorporated by
reference therein based on information supplied by Viasoft specifically for
inclusion or incorporation by reference therein.
(d) Brokers. No broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Compuware or
Merger Sub.
(e) Financing. At the expiration of the Offer and the
Effective Time, Compuware and Merger Sub will have available all the funds
necessary for the acquisition of all Shares pursuant to the Offer or Merger and
to perform their respective obligations under this Agreement, including without
limitation payment in full for all Shares validly tendered or outstanding at the
Effective Time.
(f) Litigation. Except as disclosed in documents filed with
the SEC by Compuware, as of the date of this Agreement, there is no suit, action
or proceeding pending or, to the knowledge of Compuware, threatened against
Compuware or any of its subsidiaries that individually or in the aggregate could
reasonably be expected to (i) impair the ability of Compuware or Merger Sub to
perform their obligations under this Agreement or (ii) prevent the consummation
of any of the transactions contemplated by this Agreement, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against Compuware or any of its subsidiaries having, or
which is reasonably likely to have, any effect referred to in the foregoing
clause (i) or (ii) above.
(g) Financial Statements. The financial statements of
Compuware included in the required reports, schedules, forms, statements and
other documents filed with the SEC since December 31, 1996, including those
filed after the date hereof until the Closing, comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC), except as may be indicated in the
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notes thereto, and fairly present in all material respects the consolidated
financial position of Compuware and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments).
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Conduct of Business.
(a) Conduct of Business by Viasoft. Viasoft will, and will
cause its subsidiaries to, carry on its and their respective businesses in the
ordinary course consistent with past practice and use all reasonable efforts to
preserve intact their current business organizations, to keep available the
services of their current officers and employees and to preserve their
relationships with distributors, licensors, contractors, customers, suppliers,
lenders and others having business dealings with any of them. Without limiting
the generality of the foregoing, except as may be expressly permitted by other
provisions of this Agreement, as set forth in Section 5.1 of the Viasoft
Disclosure Letter cross-referenced to a subsection of this Section 5.1, or as
may be agreed to in writing by Compuware, Viasoft will not, and will not permit
any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends on,
or make any other distributions in respect of, any of its capital stock, other
than dividends and distributions by any direct or indirect wholly-owned
subsidiary of Viasoft to its parent, or in the case of less than wholly-owned
subsidiaries, as required by agreements existing on the date of this Agreement,
(y) split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of capital stock of Viasoft or any of its
subsidiaries or any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities (other than the
issuance of Viasoft Common Stock upon the exercise of Options (as defined in
Section 6.4) outstanding on the date of this Agreement and in accordance with
their present terms and pursuant to the Stock Purchase Plan); provided that,
without the prior written consent of Compuware, in no event will Viasoft issue
any shares of its capital stock during the period commencing with the
consummation of the Offer and ending at the Effective Time;
(iii) except as set forth in Section 5.1(a)(iii) of
the Viasoft Disclosure Letter, amend its certificate of incorporation, bylaws or
other comparable charter or organizational documents;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any
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corporation, partnership, joint venture, association or other business
organization or division thereof or (y) any assets that individually or in the
aggregate are material to Viasoft and its subsidiaries taken as a whole, except
in the ordinary course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its properties or
assets (including Intellectual Property), except for sales, leases, licenses, or
encumbrances of its properties or assets in the ordinary course of business
consistent with past practice;
(vi) (x) incur any indebtedness for borrowed money or
draw down on any credit facility or arrangement or guarantee any indebtedness of
another person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of Viasoft or any of its subsidiaries, guarantee any
debt securities of another person, enter into any "keep well" or other agreement
to maintain any financial statement condition of another person or enter into
any arrangement having the economic effect of any of the foregoing or (y) make
any loans or advances to, or investments in, any other person, other than any
subsidiary of Viasoft;
(vii) make or agree to make any new capital
expenditure or expenditures which individually is in excess of $100,000 or which
in the aggregate are in excess of $500,000;
(viii) make any material tax election or settle or
compromise any material income or franchise tax liability;
(ix) pay, discharge, settle or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than as set forth in Section 5.1(a)(ix) of the
Viasoft Disclosure Letter or the payment, discharge, settlement or satisfaction,
in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the notes
thereto) of Viasoft included in the Filed SEC Documents or incurred since the
date of such financial statements in the ordinary course of business consistent
with past practice in accordance with the terms of this Section 5.1;
(x) except as expressly contemplated hereby,
waive, release or assign any rights or claims under any contract or agreement
binding on Viasoft or any subsidiary; or, except as expressly contemplated
hereby or in the ordinary course of business consistent with past practice,
enter into, modify, amend or terminate any contract or agreement binding on
Viasoft or any subsidiary; or, in any event, enter into any contract or
agreement binding on Viasoft or any subsidiary which would be required to be
disclosed in Section 4.1(d) of the Viasoft Disclosure Letter;
(xi) terminate or lay off more than 5 employees,
except for cause consistent with past practice and Viasoft policy or except as
set forth in Section 5.1(a)(xi) of the Viasoft Disclosure Letter;
(xii) except as set forth in Section 5.1(a)(xii) of
the Viasoft Disclosure Letter, adopt or amend in any material respect any
employee benefit or employee stock purchase or
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employee option plan, or enter into any employment contract, pay any special
bonus or special remuneration to any director or employee, or increase the
salaries or wage rates of its officers or employees other than in the ordinary
course of business, consistent with past practice, or change in any material
respect any management policies or procedures, waive any stock repurchase
rights, accelerate, amend or change the period of exercisability of any Options
(as defined in Section 6.4), or authorize cash payments in exchange for any
Options, or otherwise alter or commit to any compensation, benefit or severance
arrangement for or with any officer or employee of Viasoft or enter into any
related or interested party transaction;
(xiii) except as set forth in Section 5.1(a)(xiii) of the
Viasoft Disclosure Letter, grant or provide any severance or termination pay to
any officer or employee except payments pursuant to written plans or agreements
outstanding on the date hereof and described in the Viasoft Disclosure Letter;
(xiv) take any actions (including seeking or soliciting
corporate approvals) directed towards seeking to liquidate or dissolve Viasoft
or to take advantage of bankruptcy or other creditor protection laws or that
would or are reasonably likely to render Viasoft insolvent or to cause Viasoft
to become involved in bankruptcy proceedings, including soliciting creditor
arrangements or moratoria;
(xv) except as described in Section 5.1(a)(xv) of the
Viasoft Disclosure Letter, institute any litigation or other proceeding;
(xvi) take any action that might cause or constitute a
breach of any representation or warranty made by Viasoft in this Agreement; or
(xvii) other than the Rights Plan disclosed in Section
4.1(o) of the Viasoft Disclosure Letter, enter into any Rights Plan, or take or
permit any other action which could have the effect of causing the
representation made in Section 4.1(o) to be untrue in any respect;
(xviii) authorize any of, or commit or agree to take any
of, the foregoing actions.
(b) Other Actions. Viasoft and Compuware will not, and will
not permit any of their respective Subsidiaries to, knowingly and willfully take
any deliberate action that would cause (i) any of the representations and
warranties of such party set forth in this Agreement to become untrue in (x)
such a manner as would have a Material Adverse Effect on Viasoft (in the case of
Viasoft) or (y) any material respect (in the case of Compuware) as of the date
when made or (ii) any of the conditions to the Offer set forth in Exhibit A or
any of the conditions to the Merger to not be satisfied (subject to Viasoft's
right to take action consistent with Sections 5.2 and 6.1).
5.2 No Solicitation.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement in accordance with its terms,
Viasoft will not, nor will it permit any of
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its subsidiaries to, nor will it authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative of, Viasoft or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or encourage the making, announcement or
submission of any takeover proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any non-public information with
respect to, or enter into any agreement with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal;
provided, however, that this Section 5.2 will not prohibit Viasoft from
furnishing non-public information regarding Viasoft and its subsidiaries to, or
entering into discussions or negotiations with, any person or group who has
submitted (and not withdrawn) to Viasoft an unsolicited, written, bona fide
takeover proposal (as defined in this Section 5.2) that Viasoft's Board of
Directors reasonably concludes (after consultation with its financial adviser)
may constitute or lead to a superior proposal (as defined in Section 6.1) if (1)
neither Viasoft nor any representative of Viasoft and its subsidiaries will have
violated any of the restrictions set forth in this Section 5.2, (2) Viasoft's
Board of Directors concludes in good faith, after consultation with its outside
legal counsel, that such action is required in order for Viasoft's Board of
Directors to comply with its fiduciary obligations to Viasoft's shareholders
under applicable law, and (3) prior to furnishing any such nonpublic information
to, or entering into any such discussions with, such person or group, (x)
Viasoft gives Compuware written notice of the identity of such person or group
and all of the material terms and conditions of such takeover proposal and of
Viasoft's intention to furnish information to, or enter into discussions or
negotiations with, such person or group, (y) Viasoft receives from such person
or group an executed confidentiality agreement containing terms at least as
restrictive with regard to Viasoft's confidential information as the
Confidentiality Agreement, and (z) contemporaneously with furnishing any such
information to such person or group, Viasoft furnishes such information to
Compuware (to the extent such information has not been previously furnished by
Viasoft to Compuware). Upon execution of this Agreement, Viasoft, its
subsidiaries, officers, directors, employees, investment bankers, attorneys and
other agents and representatives will immediately cease any and all existing
activities, discussions or negotiations with any parties conducted previously
regarding a takeover proposal. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding two sentences
by any officer or director of Viasoft or any investment banker or attorney of
Viasoft or any of its subsidiaries, will be deemed to be a breach of this
Section 5.2(a) by Viasoft. For purposes of this Agreement, "takeover proposal"
means any offer or proposal relating to any transaction or series of related
transactions (other than the transactions contemplated by this Agreement)
involving: (A) any acquisition or purchase from Viasoft by any person or "group"
(as defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) of more than a 10% interest in the total outstanding
voting securities of Viasoft or any of its subsidiaries or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning 10% or more of the total outstanding voting
securities of Viasoft or any of its subsidiaries or any merger, consolidation,
business combination or similar transaction involving Viasoft pursuant to which
the shareholders of Viasoft immediately preceding such transaction hold less
than 90% of the equity interests in the surviving or resulting entity of such
transaction; (B) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than 10% of the assets of Viasoft;
or (C) any liquidation or dissolution of Viasoft.
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(b) In addition to the obligations of Viasoft set forth in
paragraph (a) above, Viasoft will promptly advise Compuware orally and in
writing of any request for information or of any takeover proposal, or any
inquiry with respect to or which is expected to lead to any takeover proposal,
the material terms and conditions of such request, takeover proposal or inquiry,
and the identity of the person making any such takeover proposal or inquiry.
Viasoft will keep Compuware fully informed of the status and details of any such
request, takeover proposal or inquiry.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Shareholder Approval; Preparation of Proxy Statement.
(a) If Viasoft Shareholder Approval is required by law in
order to effect the Merger, Viasoft will, as soon as practicable following the
expiration of the Offer, duly call, give notice of, convene and hold a meeting
of its shareholders (the "Shareholders Meeting") for the purpose of obtaining
Viasoft Shareholder Approval. Subject to applicable law and the provisions of
Section 6.1(c): (i) Viasoft will, through its Board of Directors, recommend to
its shareholders that Viasoft Shareholder Approval be given; (ii) the Proxy
Statement will include a statement to the effect that Viasoft's Board of
Directors recommends that Viasoft Shareholder Approval be given at the
Shareholders Meeting; and (iii) neither Viasoft's Board of Directors nor any
committee thereof will withdraw, amend or modify, or propose or resolve to
withdraw, amend or modify in a manner adverse to Compuware, the recommendation
of Viasoft's Board of Directors that Viasoft Shareholder Approval be given at
the Shareholders Meeting. Notwithstanding the foregoing, if Merger Sub (or any
other Subsidiary of Compuware) will acquire and will maintain through the
effectiveness of the Short-Form Merger, ownership of at least 90% of the
outstanding Shares sufficient to enable Merger Sub (or such other Subsidiary) to
effect the Short-Form Merger, the parties will, at the request of Compuware,
take all necessary and appropriate action to cause the Short-Form Merger to
become effective as soon as practicable after the expiration of the Offer
without a Shareholders Meeting in accordance with Section 253 of the DGCL.
Without limiting the generality of the foregoing, Viasoft agrees that its
obligations pursuant to the first sentence of this Section 6.1(a) will not be
affected by (i) the commencement, public proposal, public disclosure or
communication to Viasoft of any takeover proposal (including a superior
proposal) or (ii) the withdrawal or modification by Viasoft's Board of Directors
of its approval or recommendation of the Offer, this Agreement, the Merger or
Viasoft Shareholder Approval.
(b) If Viasoft Shareholder Approval is required by law in
order to effect the Merger, Viasoft will, as soon as practicable following the
expiration of the Offer, prepare and file a preliminary Proxy Statement with the
SEC and will use its best efforts to respond to any comments of the SEC or its
staff and to cause the Proxy Statement to be mailed to Viasoft's shareholders as
promptly as practicable after responding to all such comments to the
satisfaction of the staff. Viasoft will notify Compuware promptly of the receipt
of any comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for additional
information and will supply Compuware with copies of all correspondence between
Viasoft or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement or the Merger. If
at any time prior to the Shareholders Meeting there will
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occur any event that Viasoft determines, on advice of its outside counsel,
should be set forth in an amendment or supplement to the Proxy Statement,
Viasoft will promptly prepare and mail to its shareholders such an amendment or
supplement. Except as required by law, Viasoft will not mail any Proxy
Statement, or any amendment or supplement thereto, to which Compuware reasonably
objects.
(c) Nothing in this Agreement will prevent Viasoft's Board of
Directors from withholding, withdrawing, amending or modifying its
recommendation in favor of the Offer, this Agreement, the Merger or Viasoft
Shareholder Approval if (i) a superior proposal is made to Viasoft and is not
withdrawn, (ii) Viasoft provides written notice to Compuware (a "Notice of
Superior Proposal") advising Compuware that Viasoft has received a superior
proposal, specifying all of the material terms and conditions of such superior
proposal and identifying the person or entity making such superior proposal,
(iii) Compuware will not have, within three business days of Compuware's receipt
of the Notice of Superior Proposal, made an offer that Viasoft's Board by a
majority vote determines in its good faith judgment, after consultation with its
financial adviser, to be at least as favorable to Viasoft's shareholders as such
superior proposal (it being agreed that Viasoft's Board of Directors will
convene a meeting to consider any such offer by Compuware promptly following the
receipt thereof), (iv) Viasoft's Board of Directors concludes in good faith,
after consultation with qualified outside counsel, that, in light of such
superior proposal, the withholding, withdrawal, amendment or modification of
such recommendation is required in order for Viasoft's Board of Directors to
comply with its fiduciary obligations to Viasoft's shareholders under applicable
law and (v) Viasoft will not have violated any of the restrictions set forth in
Section 5.2 or this Section 6.1. Viasoft will provide Compuware with at least
three business days prior notice (or such lesser prior notice as provided to the
members of Viasoft's Board of Directors but in no event less than twenty-four
hours) of any meeting of Viasoft's Board of Directors at which Viasoft's Board
of Directors is reasonably expected to consider any takeover proposal to
determine whether such takeover proposal is a superior proposal. For purposes of
this Agreement, "superior proposal" will mean an unsolicited, bona fide written
offer made by a third party to consummate any of the following transactions: (i)
a merger, consolidation, business combination, sale of assets or similar
transaction involving Viasoft pursuant to which the Shares outstanding
immediately preceding such transaction will represent less than 50% of the
equity interest in the surviving or resulting entity of such transaction or (ii)
the acquisition by any person or group (including by way of a tender offer or an
exchange offer or a two step transaction involving a tender offer followed with
reasonable promptness by a merger involving Viasoft), directly or indirectly, of
ownership of 100% of the then-outstanding shares of capital stock of Viasoft, on
terms and conditions that Viasoft's Board of Directors determines, in its
reasonable judgment, after consultation with its financial adviser, to be more
favorable to Viasoft shareholders than the terms of the Merger; provided,
however, that any such offer will not be deemed to be a "superior proposal" if
any financing required to consummate the transaction contemplated by such offer
is not committed and is not likely in the reasonable judgment of Viasoft's Board
of Directors (after consultation with its financial adviser) to be obtained by
such third party on a timely basis.
(d) Nothing contained in this Agreement will prohibit Viasoft
or its Board of Directors from taking and disclosing to its shareholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act.
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(e) Compuware agrees to cause all shares of Viasoft Common
Stock purchased pursuant to the Offer and all other shares of Viasoft Common
Stock owned by Merger Sub or any other subsidiary of Compuware to be voted in
favor of Viasoft Shareholder Approval.
6.2 Access to Information; Confidentiality. Viasoft will, and will
cause each of its subsidiaries to, afford to Compuware, and to Compuware's
officers, employees, accountants, counsel, financial advisers and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, Viasoft
will, and will cause each of its subsidiaries to, furnish or make available
promptly to Compuware (a) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws and (b) all other information
concerning its business, properties and personnel as Compuware may reasonably
request. Any disclosure that may be required by law, regulation or rule will be
coordinated by and between the parties and their advisors prior to such
disclosure. Except as required by law or the rules and regulations of the Nasdaq
National Market, Compuware will hold, and will cause its officers, employees,
accountants, counsel, financial advisers and other representatives and
affiliates to hold, in confidence any confidential information in accordance
with the Confidentiality Agreement dated June 2, 1999, between Compuware and
Viasoft (the "Confidentiality Agreement").
6.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use its reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
use its reasonable efforts to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or non actions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if any)
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, including but not limited to those set forth in Section 4.1(d) of the
Viasoft Disclosure Letter, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the transactions contemplated by this Agreement,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. In connection with and without limiting the foregoing, Viasoft and
its Board of Directors will (A) take all action necessary to ensure that no
state takeover statute or similar statute or regulation is or becomes applicable
to the Offer, the Merger, this Agreement or any of the other transactions
contemplated by this Agreement and (B) if any state takeover statute or similar
statute or regulation becomes applicable to the Offer, the Merger, this
Agreement, or any other transaction contemplated by this Agreement, take all
action necessary to ensure that the Offer, the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly
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as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Offer, the Merger and
the other transactions contemplated by this Agreement.
(b) Viasoft will give prompt notice to Compuware, and
Compuware will give prompt notice to Viasoft, of: (i) the breach of any material
representation or warranty made by it contained in this Agreement or (ii) the
failure by it to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification will affect the
representations, warranties, covenants, or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
6.4 Stock Plans.
(a) Stock Option Plans. Pursuant to the Viasoft Option Plans,
following the Effective Time, each option to purchase Shares granted pursuant to
the Viasoft Option Plans ("Options") will be fully vested and entitle the
optionee to receive the Merger Consideration (without interest) per Share
subject to such Option; provided, that any such Option that is not duly
exercised within thirty (30) days after the Effective Time will automatically
expire.
(b) Employee Stock Purchase Plan. Unless terminated prior to
the Effective Time in accordance with its terms, the Stock Purchase Plan will be
terminated as of the Effective Time. Unless the Stock Purchase Plan is
terminated prior to the Effective Time in accordance with its terms, Viasoft
will take such actions as are necessary to cause the last day of the then
current "Purchase Right Period" (as such term is used in the Stock Purchase
Plan) to be the last trading day on which Viasoft Common Stock is traded on the
Nasdaq National Market immediately prior to the Effective Time (the "Final
Viasoft Exercise Date"); provided that such change will be conditioned on the
consummation of the Merger. On the Final Viasoft Exercise Date, Viasoft will
apply the funds credited as of such date under the Stock Purchase Plan within
each participant's payroll withholdings account to the purchase of whole shares
of Viasoft Common Stock in accordance with the terms of the Stock Purchase Plan.
6.5 Post Merger Employment Benefits.
(a) Employees of Viasoft who become employed by Compuware or
any Subsidiary thereof after the Effective Time will become eligible to
participate in the same standard employee benefit plans as are generally
available to similarly situated employees of Compuware, and such employees will
receive credit for all service with Viasoft for purposes of any "employee
benefit plan" as such term is defined in Section 3(3) of ERISA. Upon the request
of Compuware, to the extent permitted by applicable law, any Viasoft Employee
Plans will be terminated immediately prior to the Effective Time.
(b) Promptly following the Effective Time, Compuware will
evaluate, in light of the equity incentive compensation provided to similarly
situated employees of Compuware, the equity incentive compensation of the
employees of Viasoft who become employed by Compuware or its
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Subsidiaries after the Effective Time, and, if deemed appropriate in Compuware's
sole discretion, Compuware will make grants of equity incentive compensation to
such employees.
6.6 Indemnification, Exculpation and Insurance.
(a) From and after the Effective Time, Compuware will fulfill
and honor and will cause the Surviving Corporation to fulfill and honor in all
respects the obligations of Viasoft pursuant to any indemnification agreements
between Viasoft and any of its subsidiaries and their respective directors and
officers (each, an "Indemnified Party") existing prior to the date hereof;
provided that Compuware and the Surviving Corporation will have no obligation to
indemnify an Indemnified Party thereunder in respect of claims, liabilities or
damages arising out of a breach of a representation or covenant made by Viasoft
in this Agreement knowingly and willfully caused by such Indemnified Party. From
and after the Effective Time, such obligations will be the joint and several
obligations of Compuware and the Surviving Corporation and, by executing this
Agreement, Compuware hereby assumes such obligations. Compuware will cause to be
maintained for a period of not less than two years after the Effective Time
Viasoft's current directors' and officers' insurance and indemnification policy
to the extent that it provides coverage for events occurring prior to the
Effective Time (the "D&O Insurance") for all persons who are directors and
officers of Viasoft on the date of this Agreement, so long as the annual premium
therefor would not be in excess of 150% of the amount per annum Viasoft paid in
its last full fiscal year, which amount has been disclosed to Compuware. If the
existing D&O Insurance cannot be maintained, expires or is terminated or
cancelled during such two-year period, Compuware will use all reasonable efforts
to cause to be obtained as much D&O Insurance as can be obtained for the
remainder of such period for an annualized premium not in excess of 150% of the
amount per annum Viasoft paid in its last full fiscal year, which amount has
been disclosed to Compuware, on terms and conditions substantially similar to
the existing D&O Insurance. The certificate of incorporation and bylaws of the
Surviving Corporation will contain the same provisions with respect to
indemnification and elimination of liability for monetary damages as are set
forth in the certificate of incorporation and bylaws of Viasoft, which
provisions will not be amended, repealed or otherwise modified from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who, as of the date hereof or any time after the date hereof and
prior to the Effective Time, were directors, officers, employees or agents of
Viasoft or its subsidiaries, unless such modification is required by law.
(b) This Section 6.6 will survive any termination of this
Agreement and the consummation of the Merger at the Effective Time and will be
binding on all successors and assigns of Compuware or the Surviving Corporation.
In the event that Compuware or the Surviving Corporation or any of their
successors or assigns consolidates with or merges into any other person and will
not be the continuing or surviving corporations or entities of such
consolidation or merger, then and in each such case, proper provisions will be
made so that the successors and assigns of Compuware or the Surviving
Corporation will assume the obligations of Compuware or the Surviving
Corporation, as the case may be, set forth in this Section 6.6.
6.7 Directors. Promptly upon the acceptance for payment of, and
payment for, a number of shares of Viasoft Common Stock by Merger Sub pursuant
to the Offer that satisfies the Minimum Tender Condition, Merger Sub will be
entitled to designate for appointment or election to Viasoft's
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Board of Directors, upon written notice to Viasoft, such number of persons so
that the designees of Merger Sub constitute the same percentage (but in no event
less than a majority) of Viasoft's Board of Directors (rounded up to the next
whole number) as the percentage of Shares acquired in connection with the Offer.
Viasoft will, upon Merger Sub's request, promptly increase the size of the Board
of Directors and/or secure the resignations of such number of directors as is
necessary to enable Merger Sub's designees to be elected to the Board of
Directors and will cause Merger Sub's designees to be so elected. Subject to
applicable law, Viasoft will take all action requested by Compuware necessary to
effect any such election, including mailing to its shareholders the Information
Statement containing the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and Viasoft agrees to make such
mailing with the mailing of the Schedule 14D-9 (provided that Merger Sub will
have provided to Viasoft on a timely basis all information required to be
included in the Information Statement with respect to Merger Sub's designees).
Following the election or appointment of Merger Sub's designees pursuant to this
Section 6.7, and prior to the Effective Time, any amendment or termination of
this Agreement, extension for the performance or waiver of the obligations or
other acts of Compuware or Merger Sub or exercise or waiver of Viasoft's rights
or remedies hereunder, will require the concurrence of a majority of Viasoft's
directors (including, if Compuware so elects, a majority of Viasoft's
non-employee directors) (or the concurrence of the sole remaining director, if
there is only one remaining) then in office who are directors of Viasoft on the
date hereof, or are directors (other than directors designated by Merger Sub in
accordance with this Section 6.7) designated by such persons or person to fill
any vacancy (the "Continuing Directors").
6.8 Fees and Expenses. All fees and expenses incurred in connection
with the Offer, the Merger, this Agreement and the transactions contemplated by
this Agreement will be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated; provided, however, that
(i) Viasoft agrees to promptly assume and pay, or reimburse Compuware for, all
reasonable legal, accounting and investment banking fees payable and expenses
incurred by Compuware in connection with this Agreement and the transactions
contemplated hereby, up to a maximum of $500,000, following termination of this
Agreement pursuant to Sections 8.1(c) or 8.1(d) hereof, and (ii) Compuware
agrees to promptly assume and pay, or reimburse Viasoft for, all reasonable
legal, accounting and investment banking fees payable and expenses incurred by
Viasoft in connection with this Agreement and the transactions contemplated
hereby, up to a maximum of $500,000, following termination of this Agreement
pursuant to Section 8.1(e) hereof.
6.9 Public Announcements. Compuware and Merger Sub, on the one hand,
and Viasoft, on the other hand, will consult with each other before issuing, and
provide each other the opportunity to review, comment upon and concur with, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Offer and the Merger, and will not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with the Nasdaq National Market.
The parties agree that the initial press release to be issued with respect to
the transactions contemplated by this Agreement will be in the form heretofore
agreed to by the parties.
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6.10 Shareholder Litigation. Viasoft will give Compuware the
opportunity to participate in the defense or settlement of any shareholder
litigation against Viasoft and its directors and officers relating to any of the
transactions contemplated by this Agreement until the purchase of Viasoft Common
Stock pursuant to the Offer or the prior termination of this Agreement in
accordance with its terms, and thereafter, will give Compuware the opportunity
to direct the defense of such litigation and, if Compuware so chooses to direct
such litigation, Compuware will give Viasoft and its directors and officers an
opportunity to participate in such litigation; provided, however, that no
settlement thereof will be agreed to without Compuware's consent, which consent
will not be unreasonably withheld, and provided further that no settlement
requiring a payment by an officer, director or other representative will be
agreed to without such person's consent.
6.11 Certain Tax Matters. Prior to the Closing Date, Viasoft will
deliver to Compuware the following information with respect to Viasoft and each
of its subsidiaries as of the most recent practicable date as well as on an
estimated pro forma basis as of the Closing Date giving effect to the
consummation of the transaction contemplated by this Agreement for Tax purposes:
(1) the basis of Viasoft and each of its subsidiaries in their respective
assets; (2) the amount of any net operating loss, net capital loss, unused
investment, research and development or other credit, unused foreign tax credit,
or excess charitable contribution of Viasoft and/or each of its subsidiaries;
(3) excess loss accounts in the consolidated group or groups of which Viasoft
and/or each of its subsidiaries is a member; (4) the amount of any deferred gain
or loss of Viasoft and each of its subsidiaries arising out of any deferred
intercompany transaction; and (5) the amount of any gain or loss allocable to
Viasoft and each of its subsidiaries arising out of any deferred intercompany
transaction or intercompany transaction.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Effective Time of the following
conditions:
(a) Viasoft Shareholder Approval. If required by applicable
law, Viasoft Shareholder Approval will have been obtained.
(b) HSR Act. All waiting periods, if any, under the HSR Act
relating to the transactions contemplated hereby will have expired or terminated
early and all material foreign antitrust approvals required to be obtained prior
to the Merger in connection with the transactions contemplated hereby will have
been obtained.
(c) No Injunctions or Restraints. No statute, rule,
regulation, executive order, decree, temporary restraining order, preliminary or
permanent injunction, judgment or other order or ruling issued by any court of
competent jurisdiction or other Governmental Entity or other legal restraint or
prohibition will be in effect which would (i) make the Merger or the acquisition
or holding by Compuware or its affiliates of Viasoft Common Stock or Common
Stock of the Surviving Corporation illegal or otherwise prevent the consummation
of the Merger, (ii) prohibit Compuware's
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or Merger Sub's ownership or operation of, or compel Compuware or Merger Sub to
dispose of or hold separate, all or a material portion of the business or assets
of Viasoft or any subsidiary thereof, (iii) compel Compuware, Merger Sub or
Viasoft to dispose of or hold separate all or a material portion of the business
or assets of Compuware or any of its subsidiaries or Viasoft or any of its
subsidiaries, or (iv) impose material limitations on the ability of Compuware or
Merger Sub or their affiliates effectively to exercise full ownership and
financial benefits of the Surviving Corporation, or impose any material
condition to the Offer, this Agreement or the Merger which would be adverse to
Compuware.
7.2 Conditions to Compuware's and Merger Sub's Obligation to
Effect the Merger. The respective obligations of Compuware and Merger Sub to
effect the Merger are subject to the satisfaction or waiver on or prior to the
Effective Time of the following conditions:
(a) the representations and warranties of Viasoft set forth in
this Agreement will be true and correct in all material respects on the Closing
Date as if made on and as of the Closing Date, and Compuware will have received
a certificate with respect to the foregoing signed by a duly authorized officer
of Viasoft;
(b) Viasoft will have performed in all material respects each
of its covenants and obligations under this Agreement required to be performed
by it at or prior to the Effective Time pursuant to the terms hereof, and
Compuware will have received a certificate with respect to the foregoing signed
by a duly authorized officer of Viasoft;
(c) there will not have occurred any Material Adverse Change
in Viasoft or any event that is reasonably likely to result in a Material
Adverse Effect to Viasoft;
(d) there will not be pending or overtly threatened any suit,
action or proceeding brought by or on behalf of any Governmental Entity (nor
will the staff of the Federal Trade Commission or the staff of the Antitrust
Division of the Department of Justice have recommended the commencement of
such), any shareholder of Viasoft or any other person or party (but only if such
shareholder suit, action or proceeding is deemed by Compuware to have a
reasonable likelihood of success) directly or indirectly (i) challenging the
acquisition by Compuware or Merger Sub of any shares of Viasoft Common Stock,
seeking to restrain or prohibit the making or consummation of the Offer or the
Merger or the performance of any of the other transactions contemplated by this
Agreement, or alleging that any such acquisition or other transaction relates
to, involves or constitutes a breach of fiduciary duty by Viasoft's directors or
a violation of federal securities law or applicable corporate law, (ii) seeking
to prohibit or limit the ownership or operation by Viasoft, Compuware or any of
their respective subsidiaries of a material portion of the business or assets of
Viasoft and its subsidiaries, taken as a whole, or Compuware and its
subsidiaries, taken as a whole, or to compel Viasoft or Compuware to dispose of
or hold separate any material portion of the business or assets of Viasoft and
its subsidiaries, taken as a whole, or Compuware and its subsidiaries,
taken as a whole, as a result of the Offer or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose material limitations on
the ability of Compuware or Merger Sub to acquire or hold, or exercise full
rights of ownership of, any shares of Viasoft Common Stock accepted for payment
pursuant to the Offer including without limitation the right to vote Viasoft
Common Stock
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accepted for payment by it on all matters properly presented to the shareholders
of Viasoft, (iv) seeking to prohibit Compuware or any of its subsidiaries from
effectively managing or controlling in any material respect the business or
operations of Viasoft and its subsidiaries taken as a whole, or (v) seeking to
impose a material condition to the Offer, Merger or Agreement which would be
adverse to Compuware; and
(e) All third party consents, the failure of which to obtain
would have a Material Adverse Effect on Viasoft, will have been obtained.
7.3 Conditions to Viasoft's Obligation to Effect the Merger. The
obligation of Viasoft to effect the Merger is subject to the satisfaction or
waiver on or prior to the Effective Time of the following conditions:
(a) the representations and warranties of Compuware and Merger
Sub set forth in this Agreement will be true and correct in all material
respects on the Closing Date as if made on and as of the Closing Date, and
Viasoft will have received a certificate with respect to the foregoing signed by
duly authorized officers of Compuware and Merger Sub; and
(b) Compuware and Merger Sub will have performed in all
material respects each of its covenants and obligations under this Agreement
required to be performed by it at or prior to the Effective Time pursuant to the
terms hereof, and Viasoft will have received a certificate with respect to the
foregoing signed by duly authorized officers of Compuware and Merger Sub.
7.4 Conditions to the Short-Form Merger. Notwithstanding the
foregoing provisions of this Article VII, the only conditions to Compuware's and
Merger Sub's obligation to effect the Short-Form Merger, if the Short-Form
Merger may be effected pursuant to applicable law, will be the conditions set
forth in Section 7.1(b) and (c).
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of matters
presented in connection with the Merger by the shareholders of Viasoft:
(a) by mutual written consent duly authorized by the
Boards of Directors of Compuware and Viasoft;
(b) by either Compuware or Viasoft,
(i) if the Merger has not been consummated on or
prior to January 31, 2000; provided, however, that the right to terminate this
Agreement under this Section 8.1(b)(i) will not be available to any party whose
action or failure to act has been a principal cause of or resulted in the
failure of the Merger to occur on or before such date and such action or failure
to act constitutes a breach of this Agreement;
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(ii) if any Governmental Entity issues an order, decree or
ruling or takes any other action permanently enjoining, restraining or otherwise
prohibiting the Merger and such order, decree or ruling or other action becomes
final and nonappealable; or
(iii) if any required approval of Viasoft's shareholders
contemplated by this Agreement has not been obtained by reason of the failure to
obtain the required vote at the Shareholders Meeting duly convened therefor and
at any adjournment thereof; provided, however, that the right to terminate this
Agreement pursuant to this Section 8.1(b)(iii) will not be available to Viasoft
where the failure to obtain Viasoft Shareholder Approval was caused by (x) the
action or failure to act of Viasoft and such action or failure to act
constitutes a material breach by Viasoft of this Agreement or (y) a breach of
the Shareholder Tender and Voting Agreement by any party thereto other than
Compuware;
(c) by Compuware, if (i) Viasoft's Board of Directors or any
committee thereof fails to recommend the Offer, the Merger, this Agreement, or
Viasoft Shareholder Approval, including any failure to include such
recommendation in the Schedule 14D-9 or the Proxy Statement, or has so resolved;
(ii) Viasoft's Board of Directors or any committee thereof withdraws or modifies
(including by amendment of the Schedule 14D-9 or Proxy Statement) in a manner
adverse to Compuware or Merger Sub its approval or recommendation of the Offer,
the Merger, this Agreement, or Viasoft Shareholder Approval, approves or
recommends any takeover proposal (including a superior proposal), or resolves to
do any of the foregoing; (iii) Viasoft enters into any letter of intent or
similar document, agreement or commitment with respect to any takeover proposal
(including a superior proposal) or Viasoft's Board of Directors or any committee
thereof resolves to do so; (iv) Viasoft's Board of Directors or any committee
thereof upon a request to reaffirm Viasoft's approval or recommendation of the
Offer, the Merger or this Agreement, fails to do so within two business days
after such request is made or has so resolved; or (v) a tender or exchange offer
relating to securities of Viasoft is commenced by a person unaffiliated with
Compuware, and Viasoft does not send to its securityholders pursuant to Rule
14e-2 promulgated under the Exchange Act, within 10 business days after such
tender or exchange offer is first published sent or given, a statement
disclosing that Viasoft recommends rejection of such tender or exchange offer;
(d) by Compuware, if any of the representations and warranties
of Viasoft set forth in this Agreement fail to be true and correct in any
material respect as of the date of the Agreement or cease to be true and correct
in any material respect at any time thereafter, or if Viasoft breaches or fails
to perform in any material respect any obligation or to comply in any material
respect with any agreement or covenant of Viasoft to be performed or complied
with by it; provided that if any such breach or failure (other than a breach of
Sections 5.2 or 6.1 or any other breach that has caused irreparable harm) is
curable by Viasoft through the exercise of its reasonable efforts, then
Compuware may not terminate this Agreement under this subsection (d) until ten
business days after written notice thereof has been given to Viasoft by
Compuware and unless at such time the matter has not been cured;
(e) by Viasoft, if any of the representations and warranties
of Compuware or Merger Sub set forth in this Agreement fail to be true and
correct in any material respect as of the
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date of the Agreement or cease to be true and correct in any material respect at
any time thereafter, or if Compuware or Merger Sub breaches or fails to perform
in any material respect any obligation or to comply in any material respect with
any agreement or covenant of Compuware or Merger Sub to be performed or complied
with by it; provided that if any such breach or failure (other than a breach
that has caused irreparable harm) is curable by Compuware or Merger Sub through
the exercise of its reasonable efforts, then Viasoft may not terminate this
Agreement under this subsection (e) until ten business days after written notice
thereof has been given to Compuware and Merger Sub by Viasoft and unless at such
time the matter has not been cured;
(f) by Viasoft, if the Board of Directors of Viasoft will have
withheld, withdrawn, modified or amended its recommendation in favor of this
Agreement, the Offer, the Merger or Viasoft Shareholder Approval as permitted
pursuant to Section 6.1(c) and will have authorized Viasoft to enter into an
agreement with a third party with respect to a superior proposal; or
(g) by Viasoft, if (i) Compuware, Merger Sub, or any of their
affiliates will have failed to commence the Offer on or prior to 5 business days
following the date of the initial public announcement of the Offer or will have
terminated the Offer, or (ii) the Offer expires without Compuware, Merger Sub or
their affiliates, as the case may be, purchasing Shares pursuant thereto;
provided that in each case Viasoft may not terminate this Agreement pursuant to
this Section 8.1(g) if Viasoft is then in material breach of this Agreement.
8.2 Effect of Termination. If this Agreement is terminated by
either Viasoft or Compuware as provided in Section 8.1, this Agreement will
forthwith become void and have no effect, without any liability or obligation on
the part of Compuware, Merger Sub or Viasoft, other than the provisions of the
last sentence of Section 6.2, Section 6.8, this Section 8.2 and Article IX;
provided, however, to the extent that such termination results from the breach
by a party of any of its representations, warranties, covenants or agreements
set forth in this Agreement, such breaching party may be held liable for damages
for such breach; and, provided further that (x) if this Agreement is terminated
by Compuware pursuant to Section 8.1(c) or by Viasoft pursuant to Section
8.1(f), Viasoft will pay or cause to be paid a fee equal to $5,500,000 in
immediately available funds within two business days of such termination, and
(y) if this Agreement is terminated by Compuware pursuant to Sections 8.1(b)(i)
or 8.1(d), or by Compuware or Viasoft pursuant to Section 8.1(b)(iii), and,
prior to such termination under any of such Sections, a third party has publicly
announced a takeover proposal, the consummation of which would constitute an
Acquisition Event, and within 12 months following the termination of this
Agreement, an Acquisition Event is consummated or Viasoft enters into a
definitive agreement providing for an Acquisition Event, Viasoft will pay or
cause to be paid to Compuware a fee equal to $5,500,000 in immediately available
funds within two business days after the consummation of such Acquisition Event
or the entry by Viasoft into such definitive agreement; provided, that if such
Acquisition Event provides for a consideration per Share less than the Offer
Price but greater than the closing price per Share on the Nasdaq National Market
on the trading day immediately prior to the public announcement of the execution
of this Agreement (the "Pre-Offer Price"), the fee payable by Viasoft pursuant
to this clause (y) will be $2,000,000, and if such Acquisition Event provides
for a consideration per Share less than or equal to the Pre-Offer Price, no fee
will be payable by Viasoft pursuant to this clause (y). No termination of this
Agreement will affect the obligations of the parties contained in the
Confidentiality Agreement, all of which
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<PAGE> 47
obligations will survive in accordance with their terms. For the purposes of
this Agreement, "Acquisition Event" means any of the following transactions
(other than the transactions contemplated by this Agreement): (i) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving Viasoft pursuant to which the shareholders of
Viasoft immediately preceding such transaction hold less than 50% of the
aggregate equity interests in the surviving or resulting entity of such
transaction, (ii) a sale or other disposition by Viasoft of assets representing
in excess of 50% of the aggregate fair market value of Viasoft's business
immediately prior to such sale or (iii) the acquisition by any person or group
(including by way of a tender offer or an exchange offer or issuance by
Viasoft), directly or indirectly, of beneficial ownership or a right to acquire
beneficial ownership of shares representing in excess of 50% of the voting power
of the then outstanding shares of capital stock of Viasoft. Payment of the
amounts described in this Section 8.2 will not be in lieu of damages incurred in
the event of breach of this Agreement.
8.3 Amendment. This Agreement may be amended by the parties at any time
before or after obtaining Viasoft Shareholder Approval, if Viasoft Shareholder
Approval is required by law; provided, however, that after any required Viasoft
Shareholder Approval, there will not be made any amendment that by law requires
further approval by such shareholders without the further approval of such
shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
8.4 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
8.3, waive compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
will be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise will not constitute a waiver of those
rights.
8.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 8.1, an amendment of this
Agreement pursuant to Section 8.3 or an extension or waiver pursuant to Section
8.4 will, in order to be effective, require in the case of Compuware, Merger Sub
or Viasoft, action by its Board of Directors or the duly authorized designee of
its Board of Directors; provided, however, that in the event that Merger Sub's
designees are appointed or elected to the Board of Directors of Viasoft as
provided in Section 6.7, after the acceptance for payment of shares of Viasoft
Common Stock pursuant to the Offer and prior to the Effective Time, the
affirmative vote of the Continuing Directors will be required by Viasoft to (i)
amend or terminate this Agreement by Viasoft, (ii) exercise or waive any of
Viasoft's rights or remedies under this Agreement or (iii) extend the time for
performance or waiver of Compuware's and Merger Sub's respective obligations
under this Agreement.
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ARTICLE IX
GENERAL PROVISIONS
9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement will survive the Effective Time. This Section 9.1
will not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
9.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement will be in writing and will be deemed given
if delivered personally, telecopied (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as will be specified by like notice):
(a) if to Compuware or Merger Sub, to
Compuware Corporation
31440 Northwestern Highway
Farmington Hills, Michigan 48334
Attention: President
Facsimile: 248-737-1822
with copies to:
Compuware Corporation
31440 Northwestern Highway
Farmington Hills, Michigan 48334
Attention: General Counsel
Facsimile: 248-737-7690
(b) if to Viasoft, to
Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
Attention: Chief Executive Officer
Facsimile: 1-602-840-4068
with a copy to:
Osborn Maledon, P.A.
2929 North Central Avenue, Suite 2100
Phoenix, Arizona 85012
Attention: William M. Hardin, Esq.
Facsimile: 1-602-640-9050
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9.3 Definitions. For purposes of this Agreement:
"Acquisition Event" is defined in Section 6.8(b)(ii) of this
Agreement.
"Affiliate" of any person means another person that directly
or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person.
"Certificates" is defined in Section 3.2(c) of this Agreement.
"Closing Date" is defined in Section 2.2 of this Agreement.
"Compuware" is defined in the introductory paragraph of this
Agreement.
"Confidentiality Agreement" is defined in Section 6.2 of this
Agreement.
"Confidential Information" is defined in Section 4.1(h)(ix) of
this Agreement.
"Continuing Directors" is defined in Section 6.7 of this
Agreement.
"Viasoft" is defined in the introductory paragraph of this
Agreement.
"Viasoft Affiliate" is defined in Section 4.1(k)(iii) of this
Agreement.
"Viasoft Balance Sheet" is defined in Section 4.1(l)(i) of
this Agreement.
"Viasoft Common Stock" is defined in Recital A of this
Agreement.
"Viasoft Disclosure Letter" is defined in Section 4.1 of this
Agreement.
"Viasoft Employee Plans" is defined in Section 4.1(k)(iv) of
this Agreement.
"Viasoft Option Plans" is defined in Section 4.1(c) of this
Agreement.
"Viasoft Preferred Stock" is defined in Section 4.1(c) of this
Agreement.
"Viasoft Shareholder Approval" is defined in Section 4.1(d) of
this Agreement.
"Dissenting Shareholder" is defined in Section 3.1(d) of this
Agreement.
"Dissenting Shares" is defined in Section 3.1(d) of this
Agreement.
"DGCL" is defined in Section 2.1 of this Agreement.
"Effective Time" is defined in Section 2.3 of this Agreement.
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"Employment and Noncompetition Agreements" is defined in
Section 6.5(b) of this Agreement.
"Environmental Laws" is defined in Section 4.1(n)(ii) of this
Agreement.
"ERISA" is defined in Section 4.1(k)(iii) of this Agreement.
"Exchange Act" is defined in Section 1.1(a) of this Agreement.
"Expiration Date" is defined in Section 1.1(a) of this
Agreement.
"Filed SEC Documents" is defined in Section 4.1(g) of this
Agreement.
"Final Viasoft Exercise Date" is defined in Section 6.4(b) of
this Agreement.
"GAAP" is defined in Section 4.1(e) of this Agreement.
"Government Contract Party" is defined in Section 4.1(v) of
this Agreement.
"Governmental Entity" is defined in Section 4.1(d) of this
Agreement.
"Hazardous Material" is defined in Section 4.1(n)(iii) of this
Agreement.
"HSR Act" is defined in Section 4.1(d) of this Agreement.
"Indemnified Party" is defined in Section 6.6(a) of this
Agreement.
"Information Statement" is defined in Section 4.1(f) of this
Agreement.
"Intellectual Property" is defined in Section 4.1(h) of this
Agreement.
"IRCA" is defined in Section 4.1(u) of this Agreement.
"IRS" is defined in Section 4.1(k)(iii) of this Agreement.
"Liens" is defined in Section 4.1(b) of this Agreement.
"Material Adverse Change" or "Material Adverse Effect" means,
when used in connection with Viasoft or in connection with Viasoft and
its subsidiaries, any change or effect that is or would be materially
adverse to Viasoft and its subsidiaries, taken as a whole, taking into
account the business, properties, assets, employees, financial
condition or results of operations of Viasoft and its subsidiaries,
excluding those changes, effects and developments that directly result
from (i) the announcement of the Offer or the Merger, (ii) any act or
omission of Compuware or Merger Sub, (iii) general economic conditions,
or (iv)
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conditions generally affecting the industry in which Viasoft
competes (provided that such conditions do not materially and adversely
affect Viasoft disproportionately); provided that in any litigation
regarding this definition where the principal change or effect at issue
involves the termination for any reason of the employment of Viasoft's
or its subsidiaries' employees, Viasoft will be required to sustain the
burden of proving by clear and convincing evidence that the exclusion
set forth in clause (i) or (ii) of this sentence is applicable.
"Material Customer" is defined in Section 4.1(x) of this
Agreement.
"Merger" is defined in Recital B of this Agreement.
"Merger Consideration" is defined in Section 3.1(c) of this
Agreement.
"Merger Sub" is defined in the introductory paragraph of this
Agreement.
"Minimum Tender Condition" is defined in Exhibit A attached to
this Agreement.
"Notice of Superior Proposal" is defined in Section 6.1(c) of
this Agreement.
"Offer" is defined in Recital A of this Agreement.
"Offer Documents" is defined in Section 1.1(b) of this
Agreement.
"Offer Price" is defined in Recital A of this Agreement.
"Options" is defined in Section 6.4(a) of this Agreement.
"Paying Agent" is defined in Section 3.2(a) of this Agreement.
"Permits" is defined in Section 4.1(n)(i) of this Agreement.
"Person" means an individual, corporation, limited liability
company, partnership, joint venture, association, trust, unincorporated
organization or other entity.
"Pre-Offer Price" is defined in Section 8.2 of this Agreement.
"Proxy Statement" is defined in Section 4.1(d) of this
Agreement.
"Returns" is defined in Section 4.1(l)(v) of this Agreement.
"Revenue Code" is defined in Section 4.1(k)(iii) of this
Agreement.
"Rights" is defined in the Recitals Section of this Agreement.
"Rights Plan" is defined in Section 4.1(o) of this Agreement.
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"Schedule 14D-9" is defined in Section 1.2(b) of this
Agreement.
"SEC" is defined in Section 1.1(b) of this Agreement.
"Securities Act" is defined in Section 4.1(e) of this
Agreement.
"Share" is defined in Recital A of this Agreement.
"Shareholders Meeting" is defined in Section 6.1(a) of this
Agreement.
"Short-Form Merger" is defined in Section 2.8 of this
Agreement.
"Stock Purchase Plan" is defined in Section 4.1(c) of this
Agreement.
"Subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person.
"Superior proposal" is defined in Section 6.1 of this
Agreement.
"Surviving Corporation" is defined in Section 2.1 of this
Agreement.
"Systems" is defined in Section 4.1(h)(x) of this Agreement.
"Takeover proposal" is defined in Section 5.2 of this
Agreement.
"Tax" or "Taxes" is defined in Section 4.1(l)(v) of this
Agreement.
"Third Party Intellectual Property Rights" is defined in
Section 4.1(h)(ii) of this Agreement.
"WARN Act" is defined in Section 4.1(u) of this Agreement.
9.4 Interpretation. When a reference is made in this Agreement to
an Article, a Section, Exhibit or Schedule, such reference is to an Article or a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they will be deemed to be followed by
the words "without limitation." The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement will refer to this Agreement
as a whole and not to any particular provision of this Agreement. All terms
defined in this Agreement will have the defined meanings when used in any
certificate or other
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<PAGE> 53
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. References to a person are also to its
permitted successors and assigns. References to a law or statute in this
Agreement include all amendments and modifications to such law or statute, and
all rules and regulations promulgated thereunder. References to Viasoft in this
Agreement refer also to Viasoft's subsidiaries unless the context would clearly
indicate otherwise.
9.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
9.6 Entire Agreement; No Third-Party Beneficiaries. This Agreement, the
exhibits and schedules hereto, the Viasoft Disclosure Letter, the Shareholder
Tender and Voting Agreement, and the Confidentiality Agreement constitute the
entire agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement and, other than Sections 6.6 and 6.10, are not intended to confer upon
any person other than the parties any rights or remedies hereunder.
9.7 Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflict of laws thereof.
9.8 Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement will be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties, except that Merger Sub may assign, in its sole
discretion, any of or all of its rights, interests and obligations under this
Agreement to Compuware or to any direct or indirect wholly-owned subsidiary of
Compuware, but no such assignment will relieve Merger Sub and Compuware of any
of its obligations under this Agreement. This Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
9.9 Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Michigan or in the State of Delaware or in Michigan or
Delaware state court, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction and venue of any federal
court located in the State of Michigan or the State of Delaware or any Michigan
or Delaware state court in the event any dispute arises out of this Agreement or
any of the transactions contemplated by this Agreement, (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction or choice of venue by
motion or other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agreement or
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<PAGE> 54
any of the transactions contemplated by this Agreement in any court other than a
federal or state court sitting in the State of Michigan or in the State of
Delaware.
REST OF THIS PAGE INTENTIONALLY LEFT BLANK
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<PAGE> 55
IN WITNESS WHEREOF, Compuware, Merger Sub and Viasoft have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
COMPUWARE CORPORATION
By: /s/ Eliot R. Stark
---------------------------------
Name: Eliot R. Stark
Title: Executive Vice President
CV ACQUISITION, INC.
By: /s/ Eliot R. Stark
---------------------------------
Name: Eliot R. Stark
Title: President
VIASOFT, INC.
By: /s/ Steven D. Whiteman
---------------------------------
Name: Steven D. Whiteman
Title: Chairman and Chief Executive
Officer
<PAGE> 56
EXHIBIT A
OFFER
Notwithstanding any other term of the Offer or this Agreement, Merger
Sub will not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Merger Sub's obligation to pay for or return tendered shares of
Viasoft Common Stock after the termination or withdrawal of the Offer), to pay
for any shares of Viasoft Common Stock tendered pursuant to the Offer unless (i)
there will have been validly tendered and not withdrawn prior to the expiration
of the Offer that number of shares of Viasoft Common Stock which would represent
more than 50% of the fully-diluted shares of Viasoft Common Stock outstanding at
the close of business on the business day immediately preceding the day on which
the Offer will expire or terminate (the "Minimum Tender Condition") and (ii) any
waiting period under the HSR Act applicable to the purchase of shares of Viasoft
Common Stock pursuant to the Offer will have expired or been terminated.
Furthermore, notwithstanding any other term of the Offer or this
Agreement, Merger Sub will not be required to accept for payment or, subject as
aforesaid, to pay for any shares of Viasoft Common Stock not theretofore
accepted for payment or paid for, and may terminate or amend the Offer, if, upon
the scheduled expiration date of the Offer (as extended) and before the
acceptance of such shares for payment or the payment therefor, any of the
following conditions exists and is continuing:
(a) there will be pending or overtly threatened any suit,
action or proceeding brought by or on behalf of any Governmental Entity (or the
staff of the Federal Trade Commission or the staff of the Antitrust Division of
the Department of Justice will have recommended the commencement of such), any
shareholder of Viasoft or any other person or party (but only if such
shareholder suit, action or proceeding is deemed by Compuware to have a
reasonable likelihood of success) directly or indirectly (i) challenging the
acquisition by Compuware or Merger Sub of any shares of Viasoft Common Stock,
seeking to restrain or prohibit the making or consummation of the Offer or the
Merger or the performance of any of the other transactions contemplated by this
Agreement, or alleging that any such acquisition or other transaction relates
to, involves or constitutes a breach of fiduciary duty by Viasoft's directors or
a violation of federal securities law or applicable corporate law, (ii) seeking
to prohibit or limit the ownership or operation by Viasoft, Compuware or any of
their respective subsidiaries of a material portion of the business or assets of
Viasoft and its subsidiaries, taken as a whole, or Compuware and its
subsidiaries, taken as a whole, or to compel Viasoft or Compuware to dispose of
or hold separate any material portion of the business or assets of Viasoft and
its subsidiaries, taken as a whole, or Compuware and its subsidiaries, taken as
a whole, as a result of the Offer or any of the other transactions contemplated
by this Agreement, (iii) seeking to impose material limitations on the ability
of Compuware or Merger Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Viasoft Common Stock accepted for payment pursuant
to the Offer including without limitation the right to vote Viasoft Common Stock
accepted for payment by it on all matters properly presented to the shareholders
of Viasoft, (iv) seeking to prohibit Compuware or any of its subsidiaries from
effectively managing or controlling
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<PAGE> 57
in any material respect the business or operations of Viasoft and its
subsidiaries taken as a whole, or (v) seeking to impose a material condition to
the Offer, Merger or Agreement which would be adverse to Compuware;
(b) there will be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger, or any other action will be taken by any
Governmental Entity or court, other than the application to the Offer or the
Merger of applicable waiting periods under the HSR Act, that is reasonably
likely to result, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above;
(c) there will have occurred any Material Adverse Change in
Viasoft and its subsidiaries taken as a whole or any event that is reasonably
likely to result in a Material Adverse Change in Viasoft and its subsidiaries
taken as a whole;
(d) (i) Viasoft's Board of Directors or any committee thereof
will have failed to recommend the Offer, the Merger, this Agreement, or Viasoft
Shareholder Approval, including any failure to include such recommendation in
the Schedule 14D-9 or the Proxy Statement, or will have so resolved; (ii)
Viasoft's Board of Directors or any committee thereof will have withdrawn or
modified (including by amendment of the Schedule 14D-9 or Proxy Statement) in a
manner adverse to Compuware or Merger Sub its approval or recommendation of the
Offer, the Merger, this Agreement, or Viasoft Shareholder Approval, will have
approved or recommended any takeover proposal (including a superior proposal),
or will have resolved to do any of the foregoing; (iii) Viasoft will have
entered into any letter of intent or similar document, agreement or commitment
with respect to any takeover proposal (including a superior proposal) or
Viasoft's Board of Directors or any committee thereof will have resolved to do
so; (iv) Viasoft's Board of Directors or any committee thereof upon a request to
reaffirm Viasoft's approval or recommendation of the Offer, the Merger or this
Agreement, will have failed to do so within two business days after such request
is made or will have so resolved; or (v) a tender or exchange offer relating to
securities of Viasoft will have been commenced by a person unaffiliated with
Compuware, and Viasoft will not have sent to its securityholders pursuant to
Rule 14e-2 promulgated under the Exchange Act, within 10 business days after
such tender or exchange offer is first published sent or given, a statement
disclosing that Viasoft recommends rejection of such tender or exchange offer;
(e) any of the representations and warranties of Viasoft set
forth in this Agreement will have failed to be true and correct in any material
respect as of the date of the Agreement or will have ceased to be true and
correct in any material respect at any time thereafter;
(f) Viasoft will have breached or failed to perform in any
material respect any obligation or to comply in any material respect with any
agreement or covenant of Viasoft to be performed or complied with by it;
provided that if any such breach or failure (other than a breach of Sections 5.2
or 6.1 or any other breach that has caused irreparable harm) is curable by
Viasoft through the exercise of its reasonable efforts, then Compuware may not
terminate the Offer under this subsection (f) until ten business days after
written notice thereof has been given to Viasoft by Compuware or Merger Sub and
unless at such time the matter has not been cured;
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<PAGE> 58
(g) this Agreement will have been terminated in accordance
with its terms;
(h) there will have occurred (1) any general suspension of
trading in, or limitation on prices for, securities on the Nasdaq National
Market, (2) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or not mandatory),
(3) the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States and having
a Material Adverse Effect or materially adversely affecting (or materially
delaying) the consummation of the Offer, (4) any limitation or proposed
limitation (whether or not mandatory) by any U.S. governmental authority or
agency, or any other event, that materially adversely affects generally the
extension of credit by banks or other financial institutions, or (5) in the case
of any of the situations described in clauses (1) through (4) inclusive existing
at the date of commencement of the Offer, a material escalation or worsening
thereof;
(i) any person (which includes a "person" as such term is
defined in Section 13(d)(3) of the Exchange Act) other than Merger Sub, any of
its affiliates, or any group of which any of them is a member, (1) will have
acquired beneficial ownership of more than 10% of the outstanding shares of
Viasoft Common Stock, (2) will have entered into a definitive agreement or an
agreement in principle with Viasoft with respect to a tender offer or exchange
offer for any shares of Viasoft Common Stock or merger, consolidation or other
business combination with or involving Viasoft or any of its subsidiaries or (3)
will have otherwise announced a tender offer with respect to shares of Viasoft
Common Stock; provided that upon satisfaction and maintenance of the Minimum
Tender Condition, this condition (i) will only consist of clause (2) hereof;
(j) any bankruptcy proceedings will have been instituted with
respect to Viasoft and not dismissed;
(k) all third party consents, the failure of which to obtain
would have a Material Adverse Effect on Viasoft, will not have been obtained;
which, in the sole judgment of Merger Sub or Compuware, in any such case, and
regardless of the circumstances giving rise to any such condition (other than
any action or inaction by Compuware or any of its subsidiaries which constitutes
a breach of this Agreement), makes it inadvisable to proceed with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Merger Sub and
Compuware and their respective affiliates and may be asserted by Merger Sub or
Compuware regardless of the circumstances giving rise to such condition (other
than any action or inaction by Compuware or any of its Subsidiaries which
constitutes a breach of this Agreement) or may be waived by Merger Sub and
Compuware in whole or in part at any time and from time to time in their sole
discretion (except for the Minimum Tender Condition). The failure by Compuware,
Merger Sub or any other affiliate of Compuware at any time to exercise any of
the foregoing rights will not be deemed a waiver of any such right, the waiver
of any such right with respect to particular facts and circumstances will not be
deemed a waiver with respect to any other facts and circumstances and each such
right will be deemed an ongoing right that may be asserted at any time and from
time to time.
-3-
<PAGE> 59
REST OF THIS PAGE INTENTIONALLY LEFT BLANK
-4-
<PAGE> 1
EXHIBIT (C)(2)
SHAREHOLDER TENDER AND VOTING AGREEMENT
AGREEMENT dated as of July 14, 1999 among CV Acquisition,
Inc., a Delaware corporation ("Buyer"), and the holders (the "Shareholders") of
the shares of Common Stock, no par value (the "Shares"), of Viasoft, Inc., a
Delaware corporation (the "Company"), listed on the signature pages hereof.
In order to induce Buyer and Compuware Corporation, a Michigan
corporation ("Parent") and the owner of 100% of the outstanding capital stock of
Buyer, to enter into an Agreement and Plan of Merger with the Company of even
date herewith (the "Merger Agreement"), Buyer has requested the Shareholders,
and the Shareholders have agreed, to enter into this Agreement. Capitalized
terms used and not defined herein have the meanings given in the Merger
Agreement.
The parties hereto agree as follows:
ARTICLE I
TENDER OFFER AND MERGER
SECTION 1.1. Tender of Shares. (a) Each Shareholder hereby
agrees, pursuant to the terms and subject to the conditions set forth herein, to
tender in the Offer all Shares currently owned by such Shareholder as set forth
on the signature pages hereto and any additional Shares acquired by such
Shareholder (whether by purchase or otherwise) after the date of this Agreement
(with respect to each Shareholder, the "Shareholder's Shares" and, collectively,
the "Shareholder Shares").
(b) Within five business days of the commencement of the Offer
and within one business day of any acquisition by each Shareholder of any
additional Shares, each Shareholder shall deliver to the depositary (the
"Depositary") designated in the Offer (i) a letter of transmittal with respect
to such Shareholder's Shares complying with the terms of the Offer together with
instructions directing the Depositary to make payment for such Shares directly
to the Shareholder, (ii) a certificate or certificates representing such
Shareholder's Shares and (iii) all other documents or instruments required to be
delivered pursuant to the terms of the Offer (such documents in clauses (i)
through (iii) collectively being hereinafter referred to as the "Tender
Documents").
(c) Unless and until the Merger Agreement shall have been
terminated pursuant to its terms, no Shareholder shall, subject to applicable
law, withdraw any tender effected in accordance with Section 1.1(b).
SECTION 1.2. Voting of Shares. If the Offer, and Shareholder's
tender pursuant thereto, is not consummated, and the approval by the Company's
shareholders of the Merger Agreement and the Merger is sought, until termination
of the Merger Agreement pursuant to its terms, at every meeting of the
shareholders of the Company called with respect to any of the following, and at
every adjournment thereof, and on every action or approval by written consent of
the shareholders of Company with respect to any of the following, each
Shareholder shall cause all Shares owned of record or beneficially (over which
beneficially-owned Shares Shareholder
<PAGE> 2
exercises voting power) to be voted (i) in favor of adoption and approval of the
Merger Agreement and approval of the Merger and (ii) against approval of (a) any
proposal made in opposition to or in competition with consummation of the
Merger, (b) any merger, consolidation, sale of assets, reorganization or
recapitalization with any party other than Parent or its affiliates or (c) any
liquidation or winding up of Company.
SECTION 1.3. No Transfer. Until the earlier of the termination
of this Agreement or the record date for the meeting at which shareholders of
the Company are asked to vote upon adoption and approval of the Merger Agreement
and approval of the Merger, except pursuant to Shareholder's tender in the
Offer, or as may be required by the foreclosure on any encumbrance secured by
such Shareholder's Shares as of the date hereof or court order, each Shareholder
agrees not to sell, pledge, encumber, transfer, dispose of, or grant an option
with respect to, any of such Shareholder's Shares.
SECTION 1.4. No Option Exercise. During the period commencing
with the consummation of the Offer and ending at the Effective Time of the
Merger, each Shareholder agrees not to exercise any stock option issued by the
Company, or any other security exercisable for, or convertible into, Shares or
other capital stock of the Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
Each of the Shareholders severally represents and warrants to
Buyer that:
SECTION 2.1. Valid Title. Such Shareholder is the sole, true,
lawful and beneficial owner of such Shareholder's Shares with no restrictions on
such Shareholder's rights of disposition pertaining thereto.
SECTION 2.2. Authority; Noncontravention. Such Shareholder has
the requisite power and authority to enter into this Agreement and to consummate
the transactions contemplated by this Agreement. The execution and delivery of
this Agreement by such Shareholder and the consummation by such Shareholder of
the transactions contemplated by this Agreement have been duly authorized by all
necessary action (including any consultation, approval or other action by or
with any other person). This Agreement has been duly executed and delivered by
such Shareholder and constitutes a valid and binding obligation of such
Shareholder, enforceable against such Shareholder in accordance with its terms.
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a material benefit under, or result in the creation of any lien
upon any of the properties or assets of such Shareholder under, any provision of
applicable law or regulation or of any agreement, judgment, injunction, order,
decree, or other instrument binding on such Shareholder or result in the
imposition of any lien on any asset of such Shareholder. No consent, approval,
order or authorization of, or registration, declaration or filing with or
exemption by any Federal, state or local government or any court, administrative
or regulatory agency or commission or other
2
<PAGE> 3
governmental authority or agency, domestic or foreign, is required by or with
respect to such Shareholder in connection with the execution and delivery of
this Agreement by such Shareholder or the consummation by such Shareholder of
the transactions contemplated by this Agreement, except for applicable
requirements, if any, of Sections 13 and 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder. If this Agreement is
being executed in a representative or fiduciary capacity, the person signing
this Agreement has full power and authority to enter into and perform such
Agreement.
SECTION 2.3. Total Shares. The number of Shares set forth on
the signature pages hereto are the only Shares beneficially owned by such
Shareholder and, except as set forth on such signature pages, the beneficial
owner or owners of such Shareholder's Shares owns or own no options to purchase
or rights to subscribe for or otherwise acquire any securities of the Company
and has or have no other interest in or voting rights with respect to any
securities of the Company.
SECTION 2.4. No Brokers. Except as set forth in the Merger
Agreement and the Viasoft Disclosure Letter, no investment banker, broker or
finder is entitled to a commission or fee from Buyer or the Company in respect
of this Agreement based upon any arrangement or agreement made by or on behalf
of such Shareholder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to each of the Shareholders
that:
SECTION 3.1. Corporate Power and Authority. Buyer has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly authorized by all necessary corporate action on
the part of Buyer. This Agreement has been duly executed and delivered by Buyer
and constitutes a valid and binding obligation of Buyer, enforceable against it
in accordance with its terms.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 4.2. Conduct of Shareholders. Such Shareholder will
not (a) take, agree or commit to take any action that would make any
representation and warranty of such Shareholder hereunder inaccurate in any
respect as of any time prior to the termination of this Agreement or (b) omit,
or agree or commit to omit, to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time.
SECTION 4.3. Specific Performance. The parties hereto agree
that Buyer may be irreparably damaged if for any reason any Shareholder failed
to tender in the Offer, and to not
3
<PAGE> 4
withdraw, such Shareholder's Shares in accordance with the terms of this
Agreement or to perform any of its other obligations under this Agreement, and
that Buyer would not have an adequate remedy at law for money damages in such
event. Accordingly, Buyer shall be entitled to specific performance and
injunctive and other equitable relief to enforce the performance of this
Agreement by each Shareholder. This provision is without prejudice to any other
rights that Buyer may have against any Shareholder for any failure to perform
its obligations under this Agreement.
SECTION 4.4. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be deemed given
if delivered personally or sent by overnight courier (providing proof of
delivery) or by telecopy (with copies by overnight courier) to such party at its
address set forth on the signature page hereto or to such other address as such
party may have furnished to the other parties in writing in accordance herewith.
SECTION 4.5. Amendments; Termination. This Agreement may not
be modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. This Agreement
may be terminated by any of the parties hereto upon written notice to the other
parties hereto on or after the earlier of (a) the date that Shares are accepted
for payment in the Offer and (b) the date that the Merger Agreement terminates
in accordance with its terms.
SECTION 4.6. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that Buyer may assign its
rights and obligations to any affiliate of Buyer and provided, further, that no
Shareholder may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of Buyer.
SECTION 4.7. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of Delaware without giving effect to
the principles of conflicts of laws thereof.
SECTION 4.8. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
REST OF PAGE INTENTIONALLY LEFT BLANK
4
<PAGE> 5
The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
CV ACQUISITION, INC.
By: /s/ Eliot R. Stark
-------------------------
Eliot R. Stark, President
c/o Compuware Corporation
31440 Northwestern Highway
Farmington Hills, Michigan
48334
Attention: General Counsel
Facsimile: (248) 737-7690
<TABLE>
<CAPTION>
Shares Subject
to Options Shares Owned SHAREHOLDERS:
<S> <C> <C>
36,000 23,495 /s/ John J. Barry, III
-----------------------------
Name: John J. Barry, III
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
96,333 9,116 /s/ Catherine R. Hardwick
-----------------------------
Name: Catherine Hardwick
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
121,666 1,212 /s/ David Lee
-----------------------------
Name: David Lee
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
</TABLE>
[signatures continued on next page]
[signatures continued from previous page]
5
<PAGE> 6
<TABLE>
<S> <C> <C>
62,668 3,000 /s/ Alexander Kuli
-----------------------------
Name: Alexander Kuli
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
49,668 668 /s/ David Parrish
-----------------------------
Name: David Parrish
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
62,668 47,913 /s/ Arthur Patterson
-----------------------------
Name: Arthur Patterson
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
219,999 10,043 /s/ C.J. Reardon
-----------------------------
Name: Colin Reardon
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
195,333 12,900 /s/ Mark R. Schonau
-----------------------------
Name: Mark R. Schonau
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
</TABLE>
[signatures continued on next page]
[signatures continued from previous page]
6
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Beverly C. Whiteman
-----------------------------
Name: Beverly C. Whiteman
233,333 205,693 /s/ Steven D. Whiteman
38,000* -----------------------------
Name: Steven D. Whiteman
c/o Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
</TABLE>
* Owned in Trust - Trust Name: The Whiteman Family Trust dated August 12,
1993 Trustees: Steven D. Whiteman and Beverly C. Whiteman
<TABLE>
<S> <C> <C>
80,401 2,771 /s/ Kevin J. Donoghue
-----------------------------
Name: Kevin J. Donoghue
49,167 1,528** /s/ Timothy Brewer
-----------------------------
Name: Timothy Brewer
</TABLE>
** 95 shares are owned jointly with Mr. Brewer's spouse.
7
<PAGE> 1
EXHIBIT (c)(3)
[COMPUWARE LETTERHEAD]
June 2, 1999
Mr. Steven O. Whiteman
President and CEO
Viasoft, Inc.
3033 North 44th Street
Phoenix, Arizona 85018
Dear Mr. Whiteman:
Viasoft, Inc. ("Viasoft") and Compuware Corporation ("Compuware") (Viasoft
and Compuware being referred herein individually as a "Party") and collectively
as the "Parties") have requested business and financial information from each
other in connection with a possible transaction between the parties or their
respective shareholders. As a condition to it being furnished such information,
each Party agrees to treat all Confidential Evaluation Information (as
hereinafter defined) furnished to such Party in accordance with the provisions
set forth herein.
The term "Confidential Evaluation Material" means any confidential or
proprietary information, data or knowledge concerning the disclosing Party,
regardless of form, which is delivered or disclosed (whether before or after the
date hereof) by or on behalf of the disclosing Party to the receiving Party in
writing (whatever the form or storage medium), orally or through visual means,
or which receiving Party learns or obtains orally, through observation, or
through analysis, compilation or other study of such information, data or
knowledge. Without limiting the foregoing, the term "Confidential Evaluation
Material" does not include information which the receiving Party can demonstrate
(a) was already known to the receiving Party prior to it being furnished by or
on behalf of the disclosing Party, provided such source of information was not
bound by a confidentiality agreement with the disclosing Party; (b) is now or
hereafter becomes generally available to the public other than as a result of
disclosure by the receiving Party or its representatives or agents; or (c) was
or becomes available to receiving Party from a source other than disclosing
Party, or its advisors, provided such source is not bound by a confidentiality
agreement with the disclosing Party.
Each Party agrees it will use the Confidential Evaluation Material solely
for the purpose of evaluating and implementing a possible transaction between
the Parties, and that such Confidential Evaluation Material will be kept
confidential by each Party for a period of two (2) years following the date
hereof; provided, however, that any such Confidential Evaluation Material may be
disclosed to a receiving Party's directors, officers, employees, advisors, and
agents who need access to such Confidential
<PAGE> 2
Mr. Steven O. Whiteman
Viasoft, Inc.
Page 2
Evaluation Material for the purpose of evaluating and seeking to implement any
such transaction between the Parties (it being understood and agreed that such
persons shall be informed by each Party of the confidential or proprietary
nature of the Confidential Evaluation Material and shall be directed by each
Party to treat such Confidential Evaluation Material confidentially and not to
use it other than for the purposes described above). In any event, each Party
shall be responsible for any improper use of any Confidential Evaluation
Material by its respective directors, officers, employees, advisors, or agents.
In the event that either Party (or any of its directors, officers,
employees, advisors, or agents) is requested in any proceeding to disclose any
Confidential Evaluation Material, such Party will give the other Party prompt
notice of such request so that the other Party may seek any appropriate
protective order or other appropriate remedy. It is further agreed that, if in
the absence of a protective order such Party is nonetheless compelled to
disclose Confidential Evaluation Material, such Party may disclose such
information without liability hereunder; provided, however, that such Party give
the other Party written notice of the information to be disclosed as far in
advance of its disclosure as is practicable and, upon the other Party's request,
use reasonable efforts to obtain assurances that confidential treatment will be
accorded to such information.
Each Party further agrees that it will not, and will cause its respective
directors, officers, employees, advisors, and agents not to, disclose to any
person (including current, former or prospective clients or vendors of either
Party) that it is having or has had discussions with the other Party, except
that it may make such disclosure if it has received the written opinion of its
outside legal counsel that such disclosure must be made by it in order that it
not commit a violation of law.
Each Party agrees that at any time upon the other Party's request such
Party shall promptly redeliver to the other Party all written Confidential
Evaluation Material of the other Party and that such Party will not retain any
copies, extracts or other reproductions in whole or in part of such material.
All documents, memorandum, notes and other writings whatsoever (including all
copies, extracts, or other reproductions) prepared by the receiving Party or its
directors, officers, employees or agents based on the Confidential Evaluation
Material of the disclosing Party shall be destroyed, and such destruction shall
be certified in writing to the other Party. The terms of this paragraph shall
not be construed to require the destruction of general memorandum, notes and
other writings, including but not limited to minutes of the board of directors,
created in the normal course of a Party's business.
The redelivery of the Confidential Evaluation Material or the termination
of discussions between the Parties shall not relieve the Parties'
confidentiality or other obligations hereunder. All such obligations shall
survive the termination of such discussions.
<PAGE> 3
Mr. Steven O. Whiteman
Viasoft, Inc.
Page 3
Subject only to the express obligations of confidentiality set forth
herein, this Agreement shall not be construed to limit a receiving Party's
right to develop, obtain or market services, software products or technologies
competitive or equivalent to those of the other Party or otherwise to compete
with the other Party.
The Parties agree that unless a definitive agreement with respect to a
transaction has been executed and delivered, neither Party will be under any
legal obligation of any kind whatsoever with respect to any such transaction by
virtue of this or any written or oral expression with respect to such a
transaction by the Parties or our respective directors, officers, employees, or
any other representatives except, in the case of this letter agreement, for
the matters specifically agreed to herein.
Compuware acknowledges that neither Viasoft nor its representatives
(including Broadview International LLC) has made any express or implied
representation or warranty as to the accuracy or completeness of the
Confidential Evaluation Material, and expressly disclaims any and all liability
that may be based on the Confidential Evaluation Material, errors therein or
omissions therefrom. Compuware agrees that it is not entitled to rely on the
accuracy or completeness of the Confidential Evaluation Material and that it
shall be entitled to rely solely on the representations and warranties made in
any definitive agreement executed and delivered by Viasoft and Compuware in
connection with a transaction.
The Parties agree, for a period of two (2) years from the date of this
Agreement, that each Party shall not directly or indirectly solicit for
employment any employee of the other Party who became known to the Party in
connection with such Party's consideration of the proposed transaction
referenced herein.
The Parties agree that, for a period of one (1) year from the date of this
Agreement, neither Party nor any of its affiliates, will, without prior written
consent of the other Party: (i) acquire, offer to acquire, or agree to acquire,
directly or indirectly, by purchase or otherwise, any voting securities or
direct or indirect rights to acquire any voting securities of the other Party
or any subsidiary thereof, of any successor to or person in control of the
other Party, or any assets of the other Party or any subsidiary or division
thereof or of any successor or controlling person; (ii) make, or in any way
participate in, directly or indirectly, any solicitation of proxies to vote,
or seek to advise or influence any person or entity with respect to the voting
of, any voting securities of the other Party; (iii) form, join or in any way
participate in a "group" (as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934) with respect to any voting securities of the other Party;
(iv) otherwise act or seek to control or influence the management, Board of
Directors or policies of the other Party; (v) make any public announcement with
respect to, or submit a proposal for, or offer of, any extraordinary
transaction involving the other Party or its securities or assets; (vi) take
any action that might require the other Party to make an public announcement
regarding the possibility of a business
<PAGE> 4
Mr. Steven O. Whiteman
Viasoft, Inc.
Page 4
combination or merger; (vii) request the other Party or any of its
representatives, directly or indirectly, to amend or waive any provision of this
paragraph.
The Parties agree that money damages would not be a sufficient remedy for
any breach of this Agreement by the Parties or their respective directors,
officers, employees, advisors, or agents, and that in addition to all other
remedies available to the Parties at law or in equity, the Parties shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy for any such breach and each Party further agrees to waive, and to use
its best efforts to cause its respective directors, officers, employees,
advisors, and agents to waive, any requirement for the securing or posting of
any bond in connection with such remedy.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Michigan, without giving effect to any conflict of laws
principles thereof that would lead to the application of the laws of another
state. By execution and delivery of this Agreement, each Party represents and
warrants that it has been duly authorized by all necessary corporate action
and that the person signing this Agreement is duly authorized to do so.
Upon execution and delivery by the Parties, this Agreement will constitute
our entire agreement with respect to the subject matter hereof.
Very truly yours,
COMPUWARE CORPORATION
/s/ Eliot R. Stark
Eliot R. Stark
Executive Vice President
AGREED TO AND ACCEPTED
THIS 2nd day of June:
----- ------
Viasoft, Inc.
By: /s/ Steven D. Whiteman
-------------------------
Name: Steven D. Whiteman
-----------------------
Title: Chairman & CEO
----------------------
