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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 5, 1997 (August 21, 1997)
ZYCAD CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
Commission file number 0-13244
DELAWARE 41-1404495
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
47100 BAYSIDE PARKWAY, FREMONT, CALIFORNIA 94538
(Address of principal executive offices) ( Zip Code)
Registrant's telephone number, including area code: (510) 623-4400
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 2. DISPOSITION OF ASSETS
SALE OF THE VERIFICATION BUSINESS ASSETS
On August 21, 1997, Zycad Corporation (the Company), agreed to sell its assets
relating to its verification business to IKOS Systems, Inc. (IKOS) and Test
Systems Strategies, Inc. (TSSI), a division of Credence Systems Corporation.
The current maintenance and support business is expected to be transitioned to
a new subsidiary, Zycad TMG, during the third quarter of 1997. Following that
transition, Zycad will change its corporate name to GateField Corporation
(OTC:GATE).
The Asset Purchase Agreement with IKOS called for IKOS to buy all of rights,
title and interest to the intangible assets of the XP and PXP hardware fault
simulation product business for $3.0 million. Under the terms of the
agreement, IKOS paid $2.0 million upon execution of the agreement. An
additional $0.5 million is due on December 31, 1997 and $0.5 million will be
paid on June 30, 1998. No liabilities of the Company are being assumed by
IKOS.
In an Asset Purchase Agreement valued at approximately $2.3 million, TSSI
purchased substantially all of the assets of the Attest business, Zycad's
software fault and test products known as the TDX product line. Under the terms
of the agreement, TSSI paid approximately $2.3 million upon execution of the
agreement.
Information contained in the August 21, 1997 press release further describes
the sale of the verification business assets and is incorporated herein by
reference to Exhibit 20.02 of this report.
ITEM 5. OTHER EVENTS
REDEMPTION OF ALL CONVERTIBLE PREFERRED STOCK
On August 25, 1997, in a transaction valued at $1.8 million, the Company
completed the redemption of all of the outstanding shares of the Company's
Convertible Preferred Stock that were issued in May, 1997. The Company
currently has approximately 35 million share of Common Stock outstanding.
Information contained in the August 25, 1997 press release further describes
the redemption of the outstanding shares of Convertible Preferred Stock and is
incorporated herein by reference to Exhibit 20.03 of this report.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
(1) Zycad Corporation pro forma Condensed Income Statement (unaudited)
for the six months ended June 30, 1997 (see page 4).
(2) Zycad Corporation pro forma Condensed Balance Sheet (unaudited) for
the six months ended June 30, 1997 (see page 4).
(c) Exhibits
4.40 Redemption Agreement for Zycad Corporation Series A-1
Convertible Preferred Stock, Series A-2 Convertible
Preferred Stock, Series A-3 Convertible Preferred Stock,
Series A-4 Convertible Preferred Stock, and Series A-5
Convertible Preferred Stock.
10.27 Asset Purchase Agreement dated August 18, 1997,
regarding the purchase of Zycad Corporation's XP and PXP
hardware fault simulation product business by IKOS
Systems, Inc.
10.28 Asset Purchase Agreement dated August 20, 1997,
regarding the purchase of Zycad Corporation's TDX software
fault simulation and test business.
20.02 Zycad Corporation's press release dated August
21, 1997, regarding the sale of Zycad Corporation's
verification business to IKOS Systems, Inc. and Credence
Systems Corporation.
20.03 Zycad Corporation's press release dated August
25, 1997, regarding the redemption of all Convertible
Preferred Stock.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ZYCAD CORPORATION
BY /s/ Stephen A. Flory
--------------------
Stephen A. Flory
Vice President and Chief Financial Officer
September 5, 1997
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Effects of
sale of Effects of
Verification buy out of Pro forma
6 months Business Preferred 6 months
ended to IKOS and Stock ended
6/30/97 TSSI placement 6/30/97
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues $ 7,900 $ - $ - $ 7,900
Cost of Revenues 6,521 6,521
---------- ----------- ----------- ----------
Gross profit 1,379 - - 22
Total operating expenses 11,993 11,993
---------- ----------- ----------- ----------
Operating loss (10,614) - - (11,971)
---------- ----------- ----------- ----------
Other income (expense)
Interest expense (855) (855)
Other income 3,984 1,400 5,384
---------- ----------- ----------- ----------
Total other income 3,129 1,400 - 4,529
---------- ----------- ----------- ----------
Net income (loss) $ (7,485) $ 1,400 $ - $ (7,442)
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------
Net loss per share $ (0.28)
----------
----------
Weighted average common shares 26,148
----------
----------
</TABLE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Pro forma
6/30/97 6/30/97
--------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 2,346 $ 4,177 $ (1,824) $ 4,699
Accounts receivable, net 3,889 1,033 4,922
Inventories, net 1,501 (716) 785
Other current assets 593 (236) 357
-------- --------- ---------- ---------
Total current assets 8,329 4,258 (1,824) 10,763
Property and equipment, net 4,206 (851) 3,355
Purchased technology, net 2,440 (1,674) 766
Other assets 2,071 (439) 1,632
-------- --------- ---------- ---------
Total assets $ 17,046 $ 1,294 $ (1,824) $ 16,516
-------- --------- ---------- ---------
-------- --------- ---------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term obligations $ 692 $ - $ - $ 692
Accounts payable 3,588 (33) 3,555
Accrued expenses 4,406 4,406
Deferred revenues 1,972 (73) 1,899
-------- --------- ---------- --------
Total current liabilities 10,658 (106) - 10,552
Long-term obligations 328 328
Convertible debenture notes 1,131 1,131
-------- --------- ---------- --------
Total liabilities 12,117 (106) - 12,011
Stockholders' equity 4,929 1,400 (1,824) 4,505
-------- --------- ---------- --------
Total liabilities and stockholders' equity $ 17,046 $ 1,294 $ (1,824) $ 16,516
-------- --------- ---------- --------
-------- --------- ---------- --------
</TABLE>
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EXHIBIT 4.40
REDEMPTION AGREEMENT
THIS AGREEMENT is made this 12th day of August 1997 between Zycad
Corporation ("Zycad") and Halifax Fund L.P., Capital Ventures Intn'l,
Heracles Fund, Themis Partners L.P., and Lewis A. Fraser (individually and
collectively referred to as "Holder" and "Holders" respectively).
In consideration of the following mutual covenants and promises, the
parties agree as follows:
1. Zycad shall have the right to redeem, at its option, all of the
outstanding Convertible Preferred Stock Series A-1 through A-5
("Preferred Stock") for a period of three (3) months commencing on the
date of this Agreement at a redemption price equal to 110% of the
outstanding principal balance of the Preferred Stock with all premium
accruals being waived.
2. Zycad shall exercise its redemption right by giving written notice
after 8:00 PM Eastern Standard Time to each Holder of Zycad's intent
to redeem and specifying the redemption price for each Holder and
including a copy of a letter from the Wilson, Sonsini, Goodrich &
Rosati Law Firm to the Holders confirming that they have received the
funds for the redemption price in their Trust Account. The transfer
of funds, for the redemption price shall take place on the business
day following the date of notice ("Closing Date").
Upon receipt of notice of redemption the Holders may convert any
outstanding Preferred Stock through 5:00 pm Eastern Standard Time on
the Closing Date in an amount not to exceed the average daily
conversion dollar amount of Preferred Stock for each Holder over the
previous five (5) trading days. If the Registration Statement of the
Preferred Stock and underlying common stock is not effective during
such previous five (5) trading day periods, then a Holder shall have
the right to prevent Zycad from proceeding with the Redemption. In
the event Zycad does not transfer the funds for the redemption price
on the specified closing date this freeze on converting Preferred
Stock shall cease at that time.
Each Holder agrees to send its outstanding Preferred Stock Certificate
to Zycad within three (3) business days after receipt of the
redemption price and any such stock certificates not received by Zycad
within five (5) business days shall be canceled on the books of Zycad
and shall be null and void.
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3. At any time within three (3) business days after receipt of notice of
redemption by Zycad as provided above, each Holder shall have the
right to tender its prorata share of the outstanding Common Stock
Purchase warrants for 500,000 shares of common stock in exchange for
its prorata share of new stock warrants for 350,000 shares of common
stock for a three (3) year term beginning on the date of notice of
redemption at an exercise price equal to the last sale price as
reported by NASDAQ on the date of notice of redemption (and otherwise
on the same terms as the existing Warrants).
4. Upon redemption of the Preferred Stock as provided for herein, the
Preferred Stock Purchase warrants issued to the Holders in conjunction
with the Preferred Stock shall be terminated and canceled and shall be
rendered null and void.
ZYCAD CORPORATION HALIFAX FUND L.P.
By: /s/ Phillips W. Smith By: /s/ Andrew Kaplan
--------------------------------- ------------------------------
Title: President and CEO Title: Managing Director
------------------------------ ---------------------------
CAPITAL VENTURES INTN'L THEMIS PARTNERS L.P.
By: /s/ Andrew Frost By: /s/ James F. O'Brien, Jr.
--------------------------------- ------------------------------
Title: President Title:
------------------------------ ---------------------------
LEWIS A. FRASER HERACLES FUND
By: /s/ James F. O'Brien, Jr. By: /s/ James F. O'Brien, Jr.
--------------------------------- ------------------------------
Title: Title:
------------------------------ ---------------------------
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EXHIBIT 10.27
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated August ____, 1997, is entered into by
and between Zycad Corporation, a Delaware corporation ("ZYCAD") with offices at
47100 Bayside Parkway, Fremont, California 94538 and IKOS Systems, Inc. a
Delaware corporation, ("IKOS") with offices at 19050 Pruneridge Avenue,
Cupertino, California 95014.
WHEREAS, ZYCAD is engaged in the XP and PXP hardware fault simulation
product business (the "BUSINESS");
WHEREAS, IKOS desires to purchase from ZYCAD, and ZYCAD desires to sell to
IKOS, all of the assets related to the Business upon the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE I PURCHASE, SALE AND LICENSE OF ASSETS
SECTION 1.1 ASSETS. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing (as defined in Section 7.1), ZYCAD
agrees to convey, sell, transfer, assign and deliver to IKOS, and IKOS shall
purchase from ZYCAD, all right, title and interest of ZYCAD in and to the
intangible assets including, but not limited to, all fault simulation customer
lists, all technology and fault and logic simulation software and source code
and library tools, all intellectual property such as patents, trademarks, trade
names, copyrights, trade secrets or other proprietary rights that are necessary
to or associated with the conduct of the Business and any documentation
associated therewith as listed on Schedule 1 (the "ASSETS"). No interest in
the Maintenance Business is being purchased by IKOS and no liabilities of the
Business are being assumed by IKOS. Maintenance Business is defined as the
maintenance services provided for ZYCAD's products of the Business.
SECTION 1.2 GRANT OF LICENSES. Subject to any and all terms of this
Agreement, IKOS hereby grants to ZYCAD a non-exclusive, non-transferable,
royalty free, worldwide, irrevocable right to use, copy, distribute and create
derivative works of the software listed on Schedule 2 (the "Software") solely
for purposes of creating bug fixes and for providing warranties and otherwise
maintaining ZYCAD's products; provided, however, that ZYCAD maintain the
confidential nature of the Software pursuant to Section 6.1 of this Agreement.
In addition, subject to any and all terms of this Agreement, IKOS hereby grants
to ZYCAD a non-exclusive, non-transferable, royalty free, worldwide,
irrevocable right to use the ZYCAD tradename (the "TRADENAME") for the
Maintenance Business.
a) TERM OF LICENSES. The term of such licenses shall remain in effect
for a period of five (5) years from the date of the Closing. Thereafter, such
licenses shall renew only upon the mutual agreement of the parties to this
Agreement.
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b) SUBLICENSE RIGHT. ZYCAD shall have the right to one sublicense of
the Software and the Tradename without right to further sublicense. IKOS shall
have the right to approve such sublicense, with such approval not to be
unreasonably withheld. Such sublicense of the Software and the Tradename shall
be accomplished through a license agreement ("Sublicense Agreement") between
ZYCAD and such sublicensee. Such Sublicense Agreement must be in writing, and
shall include provisions consistent with protecting IKOS' proprietary rights in
the Software and the Tradename.
c) EXCLUSION OF WARRANTY. THE SOFTWARE, TOGETHER WITH THE MEDIA ON
WHICH THE SOFTWARE AND INFORMATION ARE EMBEDDED, ARE LICENSED ON AN "AS IS"
BASIS. ACCORDINGLY, IKOS MAKES NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OR WARRANTY AS TO
THE SOFTWARE'S MERCHANTABILITY, FITNESS FOR ANY INTENDED USE, OR NON-
INFRINGEMENT OF THIRD PARTY RIGHTS.
d) INDEMNIFICATION. ZYCAD shall defend, indemnify and hold harmless
IKOS from and against any claims by an end user, or other party arising out of
(i) the operation or use by ZYCAD of the Software and (ii) infringement claims
of any type related to the Software for ZYCAD's use thereof. The foregoing
indemnification obligation of ZYCAD is subject to the following conditions: (i)
IKOS shall notify ZYCAD in writing promptly upon IKOS' first becoming aware of
a claim; (ii) ZYCAD has sole control of the settlement, compromise, negotiation
and defense of any such action; and (iii) IKOS gives ZYCAD all reasonably
available information, assistance and authority, at ZYCAD's expense, to enable
ZYCAD to do so. IKOS shall have no obligation to indemnify or defend ZYCAD
against any claim of infringement made against ZYCAD or any other third parties
(including resellers and end users) regarding the Software.
e) RESTRICTIONS. Except to the extent expressly permitted in this
Agreement, ZYCAD shall not sell, rent, sublicense, distribute, assign or
otherwise transfer any rights in the Software or the Tradename without IKOS'
prior written consent.
ARTICLE II PURCHASE PRICE
SECTION 2.1 CONSIDERATION. Upon the terms and subject to the conditions
contained in this Agreement, in consideration for the Assets and the Covenant
expressed herein and in full payment therefor, Buyer will pay the purchase
price set forth in Section 2.2.
SECTION 2.2 AMOUNT; PAYMENT. The purchase price for the Assets and the
Covenant shall be $3,000,000 in cash (the "PURCHASE PRICE") payable as
specified in Section 2.3;
SECTION 2.3 PAYMENT OF PURCHASE PRICE. $2,000,000 of the Purchase
Price shall be payable at the Closing by IKOS by wire transfer; $500,000 shall
be payable by IKOS by wire transfer on December 31, 1997 and $500,000 shall be
payable by IKOS by wire transfer on June 30, 1998 (the "HOLDBACK").
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ARTICLE III TAXES
SECTION 3.1 TAXES. IKOS shall pay all sales, use and other transfer
taxes arising out of the purchase and sale of the Assets.
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS OF IKOS. IKOS represents to ZYCAD that:
a) ORGANIZATION. It is a corporation duly organized, validly existing
and in good standing under the laws of Delaware.
b) AUTHORIZATION. It has full corporate power and authority to enter
into this Agreement to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. It has taken all
necessary and appropriate corporate action with respect to the execution and
delivery of this Agreement, and with respect to IKOS, the Agreement constitutes
a valid and binding obligation enforceable in accordance with its terms except
as limited by applicable bankruptcy, insolvency, moratorium, reorganization or
other laws affecting creditors' rights and remedies generally.
c) CONSENTS. To the best of its knowledge, no consent, approval, order
or authorization of registration, qualification, designation, declaration or
filing with any federal, state, local or provincial governmental authority or
any third party is required in connection with the consummation of the
transactions contemplated hereunder.
d) BROKER FEES. It is not obligated to pay any fees or expenses of any
broker or finder in connection with the origin, negotiation or execution of
this Agreement or in connection with any of the transactions contemplated
hereby.
e) PERFORMANCE OF AGREEMENT. All covenants, conditions and other
obligations under this Agreement which are to be performed or complied with by
IKOS prior to the Closing shall have been fully performed and complied with at
or prior to the Closing,
SECTION 4.2 REPRESENTATION OF ZYCAD. ZYCAD hereby represents and
warrants to IKOS that:
(a) CORPORATE ORGANIZATION OF ZYCAD. ZYCAD is a corporation duly
organized, validly existing and in good standing under the laws of Delaware,
and has all requisite power and authority to conduct the Business in the places
(including Japan) where such Business is now conducted.
(b) AUTHORIZATION OF ZYCAD. ZYCAD has full corporate power and authority
to enter into this Agreement and to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and thereby,
including, without limitation, the execution and delivery of this Agreement,
general conveyances, bills of sale, assignments, and other documents and
instruments evidencing the conveyance of the Assets delivered in accordance
with Section 7.2 hereunder (the "CLOSING DOCUMENTS"). ZYCAD has taken all
necessary and appropriate corporate
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action with respect to the execution and delivery of this Agreement and the
Closing Documents. This Agreement constitutes a valid and binding obligation
of ZYCAD, enforceable in accordance with their terms except as limited by
applicable bankruptcy, insolvency, moratorium, reorganization or other laws
affecting creditors' rights and remedies generally.
(c) BROKERS' AND FINDERS' FEES. ZYCAD is not obligated to pay any fees
or expenses of any broker or finder in connection with the origin, negotiation
or execution of this Agreement or in connection with any transactions
contemplated hereby.
(d) TITLE TO ASSETS. ZYCAD has good and marketable title to the Assets,
free and clear of all easements, mortgages, pledges, liens, encumbrances,
security interests, equities, charges, clouds and restrictions of any nature
whatsoever. By virtue of the deliveries made at the Closing, IKOS will obtain
good and marketable title to the Assets, free and clear of all easements,
mortgages, pledges, liens, encumbrances, security interests, charges, equities,
clouds and restrictions of any nature whatsoever.
(e) NO VIOLATION OF OTHER INSTRUMENTS. Neither the execution of this
Agreement nor the performance hereof by ZYCAD will: (i) conflict with or result
in any breach or violation of the terms of any decree, judgment, order, law or
regulation of any court or other governmental body now in effect applicable to
ZYCAD; (ii) conflict with, or result in, with or without the passage of time or
the giving of notice, any breach of any of the terms, conditions and provisions
of, or constitute a default under, or result in the creation of any lien,
charge, or encumbrance upon any of the Assets pursuant to, any indenture,
mortgage, lease, agreement or other instrument to which ZYCAD is a party or by
which it or the Assets are bound; (iii) permit the acceleration of the maturity
of any indebtedness of ZYCAD secured by the Assets; (iv) violate or conflict
with any provision of ZYCAD's Certificate of Incorporation, Bylaws, or similar
organizational instruments; (v) give rise to any dissenter's rights or other
claims from ZYCAD stockholders or (vi) result in any material adverse affect on
the Assets or the use thereof. No consent from any third party and no consent,
approval or authorization of, or declaration, filing or registration with, any
government or regulatory authority is required to be made or obtained in order
to permit the execution, delivery or performance of this Agreement by ZYCAD, or
the consummation of the transactions contemplated by this Agreement.
(f) LITIGATION. Neither ZYCAD nor, to the best knowledge of ZYCAD, any
officer, director, employee or agent of ZYCAD is a party to any pending or
threatened action, suit, proceeding or investigation, at law or in equity or
otherwise in, for or by any court or other governmental body which could have a
material adverse effect on: (i) the Assets or (ii) the transactions
contemplated by this Agreement; nor does any basis exist for any such action,
suit, proceeding or investigation.
(g) TAXES. ZYCAD has timely filed within the time period for filing or
any extension granted with respect thereto all Federal, state, local and other
returns and reports relating to any and all taxes or any other governmental
charges, obligations or fees for taxes and any related interest or penalties
("TAX" or "TAXES") required to be filed by it with respect to its Business and
such returns and reports are true and correct. ZYCAD has paid all Taxes, if
any, shown to be due and payable on said returns and reports. There are no
pending or, to the best of ZYCAD's knowledge, threatened
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audits, examinations, assessments, asserted deficiencies or claims for
additional Taxes. There are no liens or similar encumbrances relating to or
attributable to Taxes on the Assets.
(h) ENVIRONMENTAL COMPLIANCE. In connection with the operation of the
Business, ZYCAD is not in violation of, or delinquent in respect to, any
material decree, order or arbitration award or law, statute, or regulation of
or agreement with, or any license or permit from, any governmental authority to
which it or its properties, assets, personnel or business are subject (or to
which it is itself subject) and which relates to the environment (including,
without limitation, laws, statutes, rules and regulations and the common law
relating to environmental matters and contamination of any type whatsoever
("ENVIRONMENTAL LAWS")). ZYCAD has obtained no permits, licenses and other
authorizations pursuant to any Environmental Laws. No failure to obtain any
such permit, license or authorization will have a material adverse effect on
the Assets.
(i) PATENTS, TRADEMARKS, TRADE NAMES AND COPYRIGHTS. All patents,
trademarks, trade names, copyrights, trade secrets or other proprietary rights
that are necessary to the conduct of the Business are owned or are useable by
ZYCAD and are listed on Schedule l. The list of bills of material, source
codes, specifications, schematics, product manuals and other materials included
as necessary to conduct the Business on Schedule l are true, complete and
correct and will not be impaired or restricted as a result of the consummation
of the transactions contemplated hereby.
(j) COMPLIANCE WITH LAW. ZYCAD has complied and is in compliance with
all applicable federal, state and local laws, statutes, licensing requirements,
rules and regulations, and judicial or administrative decisions applicable to
the Business including without limitation all export control laws. ZYCAD has
been granted any and all licenses, permits (temporary and otherwise),
authorization and approvals from federal, state, local and foreign government
regulatory bodies necessary to carry on the Business as currently conducted,
all of which are currently valid and in full force and effect. To the best of
ZYCAD's knowledge, there is no order issued, investigation or proceeding
pending or threatened, or notice served with respect to any violation of any
law, ordinance, order, writ, decree, rule or regulation issued by any federal,
state, local or foreign court or governmental agency or instrumentality
applicable to the Business.
(k) ACCURACY OF DOCUMENTS AND INFORMATION. The copies of all
instruments, agreements, other documents and written information set forth as,
or referenced in, the Schedules to this Agreement or specifically required to
be furnished pursuant to this Agreement to IKOS by ZYCAD are complete and
correct in all material respects. No representations or warranties made by
ZYCAD in this Agreement, nor any document, written information, statement or
Schedule furnished directly to IKOS or its agents pursuant to his Agreement
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements or facts contained herein not misleading.
There is no fact which materially and adversely affects ZYCAD or the Assets
known to ZYCAD which has not been expressly and fully set forth in this
Agreement or the Schedules hereto.
ARTICLE V. NON-COMPETITION AND EMPLOYMENT MATTERS
SECTION 5.1 NON-COMPETITION. Commencing on the date of this Agreement
and continuing for a period of five (5) years thereafter, ZYCAD shall not
directly or indirectly, throughout the United States and the world, participate
in the business, develop, market, or sell design verification
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products, including: hardware and software logic and fault simulation
products ("PRODUCTS") nor develop or enhance Products, except as specified in
Section 10.2. Provided however, that Section 5.1 shall not apply to the
current and future Gatefield business and to the purchaser of ZYCAD's TDX
products. Whenever possible, each provision of this Section shall be
interpreted in such manner as to be effective and valid under applicable law
but if any provision of this Section shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision. If any provision of this Section shall, for any reason, be judged
by any court of competent jurisdiction to be invalid or unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this Section
but shall be confined in its operation to the provision of this Section
directly involved in the controversy in which such judgment shall have been
rendered. In the event that the provisions of this Section should ever be
deemed to exceed the time or geographic limitations permitted by applicable
laws, then such provision shall be reformed to a maximum time or geographic
limitations permitted by applicable law.
SECTION 5.2 EMPLOYEE SOLICITATION BY IKOS. IKOS shall have the right,
but not the obligation, to offer employment to any of ZYCAD's Japan Employees
as specified in Schedule 3 ("JAPAN EMPLOYEES") at the salary levels and on
other terms and conditions to be determined in IKOS' sole discretion. IKOS
shall have no liability for accrued wages (including salaries and commissions),
severance pay, sick leave or other benefits, or employee plans of any type or
nature on account of ZYCAD's employment of or termination of such employees,
and ZYCAD shall indemnify IKOS and hold IKOS harmless against any liability
arising out of any claims for such pay or benefits or any other claims arising
from ZYCAD's employment of or termination of employment of such employees.
SECTION 5.3 EMPLOYEE PLANS. IKOS is not assuming any of the employee
plans of ZYCAD or any affiliated entity, and IKOS shall have no liability
whatsoever to Japan Employees with respect to accrued or future benefits under
any such employee plans, whether or not any of such employees are offered
employment by, or become employees of, IKOS, and ZYCAD shall defend, indemnify
and hold IKOS harmless against any claims that it has liability under such
employee plans.
ARTICLE VI CONFIDENTIALITY
SECTION 6.1 CONFIDENTIALITY. All proprietary information provided to the
other party shall be kept confidential pursuant to the terms of the
Nondisclosure Agreement signed between the parties on April 9, 1997. The
parties agree to maintain the confidentiality of the terms and conditions of
this Agreement except to the extent required by law; provided, however, the
parties agree to issue a mutually agreeable joint press release upon execution
of this Agreement announcing such execution; and provided further, that IKOS
may promote that IKOS has purchased the Business of ZYCAD and is free to use
ZYCAD's name in any advertisements. IKOS agrees to give ZYCAD prior notice of
such advertisement and the right to approve the advertisement, with such
approval not to be unreasonably withheld. Each party will review and agree to
the text of any other public announcement related to this Agreement or the
transactions contemplated hereby prior to the release thereof. In addition, in
the event that ZYCAD shall determine that it is obligated to file this
Agreement with the Securities Exchange Commission (the "SEC"), ZYCAD shall so
notify IKOS.
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ARTICLE VII CLOSING
SECTION 7.1 TIME OF CLOSING. The closing for the transaction
contemplated by the Agreement shall be on August , 1997.
SECTION 7.2 DELIVERY OF ASSETS BY ZYCAD. At the Closing, ZYCAD shall
deliver to IKOS the Assets via remote telecommunication or some other manner
specified by IKOS.
SECTION 7.3 DELIVERIES BY ZYCAD. At the Closing, ZYCAD shall deliver
to IKOS, all duly and properly executed, the following:
(a) A good and sufficient Bill of Sale, which shall be in form and
substance satisfactory to IKOS selling, delivering, transferring and assigning
to IKOS and attached hereto as EXHIBIT A title to all of ZYCAD's right, title
and interest to the Assets, free and clear of all mortgages, pledges, liens,
encumbrances, security interests, equities, charges, clouds and restrictions of
any nature whatsoever.
(b) An opinion of Douglas E. Klint, general counsel to ZYCAD, dated the
date of the Closing, as to the following matters:
(i) ZYCAD is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, has all requisite
corporate power and authority to enter into the transactions contemplated
herein.
(ii) The Agreement and other documents delivered at the Closing by
ZYCAD have been duly executed and delivered by ZYCAD, and are legally valid and
binding obligations of ZYCAD, enforceable in accordance with their terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to creditors rights generally, now or hereafter in
effect, and except to the extent that courts may not grant specific performance
of contractual provisions involving matters other than the payment of money.
(iii) All necessary corporate action has been taken by ZYCAD to
authorize the execution and delivery of the Agreement and the performance by
ZYCAD of its obligations thereunder.
(iv) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated thereby have not, and will
not, result in a breach of or conflict with any of the terms, provisions and
conditions of the Certificate of Incorporation or Bylaws of ZYCAD, any
applicable judicial or administrative writ, decree or order of which such
counsel has knowledge, or, to the best of such counsel's knowledge, any deed,
mortgage, indenture, contract, agreement or instrument known to counsel to
which ZYCAD is party or by which it is bound.
(v) To the best of such counsel's knowledge, ZYCAD has good and
marketable title to the Assets, free and clear of all easements, mortgages,
pledges, liens, encumbrances, security interests, equities, charges, clouds and
restrictions of any nature whatsoever. By virtue of the deliveries made at the
Closing, IKOS will obtain good and marketable title to the Assets, free and
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clear of all easements, mortgages, pledges, liens, encumbrances, security
interests, charges, equities, clouds and restrictions of any nature whatsoever.
(vi) To the best of such counsel's knowledge, neither ZYCAD nor any
officer, director, employee or agent of ZYCAD is a party to any pending or
threatened action, suit, proceeding or investigation at law or in equity or
otherwise in, for or by any court or other governmental body which could have a
material adverse affect on the Assets or the transactions contemplated by the
Agreement.
(c) Lien release for the Assets from Coast Business Credit.
(d) Such other separate instruments of sale, assignment or transfer that
IKOS may reasonably deem necessary or appropriate in order to perfect, confirm
or evidence in IKOS title to all or any part of the Assets.
ARTICLE VIII POST CLOSING
SECTION 8.1 POST CLOSING OBLIGATIONS. ZYCAD shall deliver the following
documents to IKOS within ten business days after the Closing:
(a) A UCC-2 Termination Statement for any UCC-2 filed against the Assets
with proof of filing.
(b) An assignment of all intellectual property associated with the
Assets, including, but not limited to, U.S. Patent No. 4,769,817 dated 9/6/88,
"Concurrent Fault Simulation for Logic Designs," and U.S. Patent No. 4,736,338
dated 4/5/88, "Programmable Look Up System," to IKOS with proof of filing in
the U.S. Patent and Trademark Office.
ARTICLE IX INDEMNIFICATION
SECTION 9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation conducted at any time with regard thereto by
or on behalf of either party, all representations, warranties, covenants and
agreements of each party in this Agreement shall survive the execution,
delivery and performance of this Agreement. The representations and warranties
of IKOS set forth in Section 4.1 of the Agreement shall terminate one (1) year
after the Closing. The obligations of indemnity provided herein with respect
to the representations and warranties of ZYCAD set forth in Section 4.2 of the
Agreement and such representations and warranties shall terminate one (1) year
after the Closing.
SECTION 9.2 INDEMNIFICATION. ZYCAD hereby agrees to indemnify and hold
harmless IKOS against any and all losses, liabilities, damages, demands,
claims, suits, actions, judgments or causes of action, assessments, costs and
expenses, including, without limitation, interest, penalties, attorneys' fees,
any and all expenses incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation (collectively,
"DAMAGES"), asserted against, resulting from,
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imposed upon, or incurred or suffered by IKOS, directly or indirectly, as a
result of or arising from any inaccuracy in or breach or nonfulfillment of
any of the representations, warranties, covenants or agreements made by ZYCAD
in this Agreement or any facts or circumstances constituting such an
inaccuracy, breach or nonfulfillment.
a) In the event that IKOS suffers Damages, IKOS shall within one hundred
twenty (120) days of discovering such Damage give ZYCAD written notice thereof
("NOTICE OF CLAIM"). The Notice of Claim shall state in reasonable detail the
nature of the claim, the specific provisions in this Agreement alleged to have
been breached, and the amount of the claim for indemnification. Such amount
shall represent IKOS' good faith estimate of the Damages. ZYCAD shall have
thirty (30) days from receipt of the Notice of Claim to accept or reject the
claim for indemnification. IKOS shall be deemed to have waived its fight to
indemnification for any Damages for which notice is not given in a timely
manner as set forth herein if and to the extent that ZYCAD can show that such
failure to give timely notice has materially prejudiced ZYCAD's ability to
defend or otherwise respond to such claim. Any claim for Damages accepted by
IKOS or any claim determined as valid under the claim procedure set forth
below, shall be deemed "Established Damages" for the purposes of this
Agreement.
b) If a Notice of Claim is given pursuant to subsection (a) above, and
no rejection is received within the thirty (30) day period specified above,
then ZYCAD shall be deemed to have accepted such claim. If ZYCAD rejects a
claim within such thirty (30) day period, the parties shall, in good faith,
attempt to negotiate a resolution of such claim within sixty (60) days
thereafter (the "RESOLUTION PERIOD"). If the parties do not reach resolution
during the Resolution Period, then IKOS may, within thirty (30) days after the
end of the Resolution Period proceed to submit the controversy to arbitration
under the rules then in effect of the American Arbitration Association. The
determination of the arbitrator(s) shall be binding, final and conclusive on
the parties. The expenses in connection with any arbitration shall be borne
equally by the parties unless determined otherwise by the arbitrator(s). If as
a result of such arbitration it is determined that ZYCAD is obligated for such
Damages, the amount set by such arbitration shall be the amount of the
Established Damages and ZYCAD shall owe such amount. If as a result of such
arbitration it is determined that ZYCAD has no obligation to indemnify, ZYCAD
shall have no further liability on the claim.
c) If a claim for indemnification arises out of a claim by a third
party, including without limitation any governmental agency, body or authority,
("THIRD PARTY CLAIM") in the Notice of Claim, IKOS shall state in reasonable
detail the nature of the claim and the basis for asserting such claim. Such
notice shall be given in accordance with subsection (a) above and shall specify
whether IKOS intends to defend the claim. If the claim has resulted in the
commencement of litigation, IKOS shall take all necessary legal steps to
preserve the legal rights of ZYCAD until such time as ZYCAD is able to assume
or participate in the defense of the litigation. If IKOS elects to defend the
claim, ZYCAD shall have the right to participate in the defense of the claim.
If IKOS does not elect to defend the claim, ZYCAD shall have the obligation to
defend the claim and IKOS shall have the right to participate in such defense
and hereby agrees to cooperate with ZYCAD and make available to it or its
counsel all records and other material reasonably required to defend the claim.
If IKOS is defending the claim, ZYCAD shall be given written notice of any bona
fide settlement offers received with respect to the claim. Within twenty (20)
days of receipt of such offer, ZYCAD
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may elect in writing to accept the settlement offer. If ZYCAD wishes to
accept such settlement offer and IKOS does not, then the claim shall be
subject to a maximum indemnification in the amount of the settlement offer
and the right to such indemnification of IKOS shall be deemed established in
such amount. So long as ZYCAD may continue to have liability for such claim,
IKOS shall not have the right to settle such claim without the prior written
consent of ZYCAD. So long as a Third-Party Claim is pending, IKOS shall hold
in abeyance its claim for indemnification. If a settlement is reached which
results in any liability on the part of IKOS, or if a judgment is rendered
against IKOS which is not properly appealed or appealable, then IKOS shall be
entitled to assert its claim for indemnification, Each party shall be
responsible for its own costs and expenses including legal fees incurred in
investigating and defending such Third Party Claim, except that ZYCAD shall
pay the reasonable attorneys' fees: (a) for taking legal actions necessary to
preserve the legal rights of ZYCAD in connection with defending the claim of
IKOS; and (b) which are found to be indemnifiable under this Agreement.
SECTION 9.3 HOLDBACK. As security for ZYCAD's indemnification
obligations under Section 9.2 of this Agreement, ZYCAD agrees that IKOS shall
be entitled to the Holdback described in Section 2.3 of this Agreement for the
period through June 30, 1998 (the "INDEMNIFICATION PERIOD"). At the end of the
Indemnification Period, any amount remaining under the Holdback shall be
released to ZYCAD on or prior to June 30, 1998.
ARTICLE X CUSTOMER SUPPORT AND PRODUCT SALES
SECTION 10.1 SUPPORT. ZYCAD shall continue to support its current XP and
PXP Hardware Fault Simulation Customers whose names, addresses and contact
information appear on Schedule 4 and IKOS shall have no obligation therefor.
IKOS shall have no right to any ZYCAD maintenance revenue. For Japan
maintenance customers IKOS agrees to assist ZYCAD with a smooth transition.
SECTION 10.2 PRODUCT SALES. ZYCAD shall have the right to sell its
current PXP and XP product line through September 30, 1997. Any Net Revenue
(Net Revenue is defined as gross sales proceeds less material costs and sales
commissions not to exceed 10% of gross proceeds) shall be split equally with
IKOS. ZYCAD has the right to offset IKOS' share of Net Revenue against any
monies due and owing ZYCAD under this Agreement. IKOS shall have the right to
audit such sales and expenses and receive monthly reports therefor.
SECTION 10.3 RESTRICTIONS. ZYCAD agrees that its inventory of Products
relating to the Business shall only be used for replacement spares of existing
boards and shall not be sold or used by ZYCAD or any third party performing
ZYCAD Maintenance as loaners or for upgrades or additional capability. ZYCAD
shall not have the ability to sell upgrades after September 30, 1997.
ARTICLE XI IKOS FAULT BUSINESS
SECTION 11.1 RELEASE OF STANDSTILL. ZYCAD releases IKOS from the
standstill agreement contained in Section 12.2 of the Amended and Restated
Asset Purchase Agreement dated June 18, 1997 between ZYCAD and IKOS and such
standstill agreement shall be deemed null and void.
ARTICLE XII GENERAL
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SECTION 12.1 ENTIRE AGREEMENT. This Agreement, the exhibits and
schedules hereto, and the documents referred to herein embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements and
understandings, oral or written, relative to said subject matter, except that
the Nondisclosure Agreement signed by the parties on April 9, 1997 shall
survive as an independent agreement.
SECTION 12.2 BINDING EFFECT; ASSIGNMENT. This Agreement and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon ZYCAD, its successors and permitted assigns, and IKOS and
their successors and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be transferred or assigned (by
operation of law or otherwise) by either of the parties hereto without the
prior written consent of the other party. This Agreement shall be binding upon
any purchaser of all of the assets of ZYCAD's Business.
SECTION 12.3 NOTICE. All notices and other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party for whom
intended or by being deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail bearing the address shown
in this Agreement for, or such other address as may be designated in writing
hereafter by, such party:
If to ZYCAD: Zycad Corporation
47100 Bayside Parkway
Fremont, CA 94538
Attention: General Counsel
If to IKOS: IKOS Systems, Inc.
19050 Pruneridge Avenue
Cupertino, CA 95014
Attention: Chief Financial Officer
SECTION 12.4 CAPTIONS. The Article and Section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof.
SECTION 12.5 EXPENSES OF TRANSACTION; TAXES. ZYCAD and IKOS shall
each pay their own respective costs and expenses incurred in connection with
this Agreement, and the transactions contemplated hereby. In the event of any
litigation or arbitration or other judicial proceedings arising out of this
Agreement, the prevailing party in any such proceeding shall be entitled to
recover from the other reasonable attorney fees and all costs incurred by such
party in such proceeding.
SECTION 12.6 WAIVER; CONSENT. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless
such waiver shall be in writing and signed by the party claimed to have given
consented
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thereto. Except to the extent that a party hereto may have otherwise agreed
in writing, no waiver by that party of any condition of this Agreement or
breach hereunder or thereunder shall be deemed to be a waiver of any other
condition or subsequent or prior breach of the same or any other obligation
or representation by the other party, nor shall any forbearance by the first
party to seek a remedy for any noncompliance or breach by the other party be
deemed to be a waiver by the first party of its rights and remedies with
respect to such noncompliance or breach.
SECTION 12.7 NO THIRD-PARTY BENEFICIARIES. Except as otherwise
expressly provided for in this Agreement, nothing herein, expressed or implied,
is intended or shall be construed to confer upon or give to any person, firm,
corporation or legal entity, other than the parties hereto, any rights,
remedies or other benefits under or by reason of this Agreement.
SECTION 12.8 COUNTERPARTS. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 12.9 GENDER. Whenever the context requires, words used in the
singular shall be construed to mean or include the plural and vice versa, and
pronouns of any gender shall be deemed to include and designate the masculine,
feminine or neuter gender.
SECTION 12.10 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
SECTION 12.11 REMEDIES OF IKOS. ZYCAD agrees that the Assets are unique
and not otherwise readily available to IKOS. Accordingly, ZYCAD acknowledges
that, in addition to all other remedies to which IKOS is entitled, IKOS shall
have the right to enforce the terms of this Agreement by a decree of specific
performance, provided IKOS is not in material default hereunder.
SECTION 12.12 GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of
California, as applied to contracts entered into and to be performed solely
within the state, solely between residents of the state.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
IKOS SYSTEMS, INC.
By: ________________ ________________
Title: ______________ _______________
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ZYCAD CORPORATION
By: ________________ ________________
Title: ______________ _______________
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SCHEDULE 1
List of Assets
1. All Fault and Logic Simulation Software and Hardware technology owned by
ZYCAD consisting of the following:
(a) All intellectual property.
(b) U.S. Patent No. 4,769,817 dated 9/6/88 "Concurrent Fault Simulation
for Logic Designs" and U.S. Patent 4,736,338 dated 4/5/88
"Programmable Look Up System".
(c) Design Schematics.
(d) Design Data Base.
(e) Documentation.
(f) Software Source Code.
2. All trademarks associated with number one above.
3. ZYCAD Fault and Logic Simulation Customer lists.
4. Xplus and associated software modules (excluding the portion owned
by Systems Science, Inc.).
5. VM and associated software modules (excluding the portion owned by
Systems Science, Inc.).
6. Q2XP and associated software modules.
7. VXI and associated software modules.
8. CMDE and associated software modules.
9. PLT1.XX and associated software modules (excluding the portion
owned by Fintronics).
<PAGE>
SCHEDULE 2
Software
1. Xplus and associated software modules (excluding the portion owned by
Systems Science, Inc.)
2. VM and associated software modules (excluding the portion owned by Systems
Science, Inc.)
3. Q2XP and associated software modules
4. VXI and associated software modules
5. CMDE and associated software modules
6. PLT1.XX and associated software modules (excluding the portion owned by
Fintronics)
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SCHEDULE 3
Japan Employees
Name Position
- ---- --------
Makoto Yamada General Manager
Masanori Sakuuchi Sales Manager
Keji Kushida AE
Akira Toda AE
Azusa Tanikawa Admin
<PAGE>
SCHEDULE 4
ZYCAD Fault Simulation Customer Base
<PAGE>
EXHIBIT A
Bill of Sale
KNOWN ALL BY THESE PRESENT, THAT ZYCAD CORPORATION ("ZYCAD"), of the
County of Alameda, State of California party of the first part under the Asset
Purchase Agreement (the "AGREEMENT") dated August __, 1997 by and between
Zycad and IKOS Systems, Inc. ("IKOS") in consideration of the sum of Three
Million Dollars ($3,000,000) and other good and valuable consideration, to it
in hand paid by IKOS, party of the second part under the Agreement, the receipt
whereof is hereby acknowledged, does hereby convey, sell, transfer, assign and
deliver to IKOS, all right, title and interest to the Assets as defined in the
Agreement.
TO HAVE AND TO HOLD THE SAME, And Zycad covenants and agrees to and with
IKOS that Zycad is the lawful owner of said Assets and has good right to sell
the same to IKOS as foresaid; that the same is free from all encumbrances; and
will warrant and defend the sale of said Assets hereby made unto IKOS, against
all and every person and persons whomsoever, lawfully claiming or to claim the
whole or any part thereof. The parties hereto agree that Zycad shall retain
and IKOS shall not acquire, any other assets, properties, contracts,
obligations or liabilities of Zycad other than those described in the
Agreement. Zycad hereby agrees that it will, from time to time, execute and
deliver such further instruments or assignment and transfer as may be
reasonably requested to implement and effectuate the Agreement and this Bill of
Sale.
IN TESTIMONY WHEREOF, Zycad has hereunto under the hand of its authorized
officer set its hand this ____ day of August, 1997.
ZYCAD CORPORATION
By: ___________________ _______________
Phillips W. Smith
President and CEO
<PAGE>
Exhibit 10.28
ASSET PURCHASE AGREEMENT
THIS AGREEMENT dated as of August 20, 1997, by and among Zycad
Corporation, a Delaware corporation, its wholly owned subsidiary, Attest
Software, Inc. ("ATTEST") both with offices at 47100 Bayside Parkway, Fremont,
California 94538 (collectively, "ZYCAD") and Test Systems Strategies, Inc., a
Delaware corporation, ("TSSI"), with offices at 8700 S.W. Creekside Place,
Beaverton, Oregon 97008.
WHEREAS, ZYCAD is engaged in the TDX software fault simulation and test
business (the "BUSINESS");
WHEREAS, TSSI desires to purchase from ZYCAD, and ZYCAD desires to sell to
TSSI, substantially all of the assets of the Attest Business ("ASSETS") and
rights of ZYCAD and ATTEST related to the Assets as provided by this Agreement,
upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE I PURCHASE AND SALE OF ASSETS
SECTION 1.1 DESCRIPTION OF ASSETS TO BE ACQUIRED. Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing (as
defined in Section 8.1), ZYCAD agrees to convey, sell, transfer, assign and
deliver to TSSI, and TSSI shall purchase from ZYCAD, all rights, title and
interest of ZYCAD at the Closing in and to the Assets. Attached as Schedule 1
is a complete list of Assets being purchased by TSSI from ZYCAD, which
includes items specified on Schedule 1.1 (a list of all equipment used in the
Business), Schedules 1.2-1.5 (lists of all software used in the Business),
Schedules 1.6-1.7 (lists of all trademarks used in the Business), and Schedule
1.8 (a list of all Documentation used in the Business).
SECTION 1.2 EXCLUDED ASSETS. It is agreed that notwithstanding the
foregoing, Assets shall not include (i) office furniture or supplies, (ii) PXP
and Xplus products and technology (iii) current and future products or
technologies developed by ZYCAD's GateField Division, (iv) third party software
and hardware including SimWave, Fault Manager and MME.
SECTION 1.3 ASSIGNED CONTRACTS. ZYCAD agrees to assign its interest in
the contracts specified in Schedule 2 (the "ASSIGNED CONTRACTS") to TSSI as of
the Closing Date and TSSI agrees to assume and be liable for ZYCAD's interest
in the Assigned Contracts on and after the Closing Date.
SECTION 1.4 ASSUMED OBLIGATIONS. TSSI agrees to assume and be
responsible for ZYCAD's obligations under the Product Maintenance Contracts
specified in Schedule 3, provided that ZYCAD compensates TSSI for the period
starting on the Closing date of this Agreement and
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ending with the Expiration date of each respective Product Maintenance
Contract at the standard rate for such product maintenance according to the
ZYCAD Price List (effective June 1, 1997) included as Schedule 3.1.
SECTION 1.5 LIABILITIES NOT ASSUMED. Other than the Assumed
Obligations of ZYCAD listed on Schedule 3, TSSI shall not assume, nor shall
TSSI or any affiliate, or any officer, director, employee, stockholder or agent
of TSSI, be deemed to have assumed or guaranteed, any liabilities, obligations,
litigation, disputes, debts, payables, counterclaims, rights of set-off or
return, or commitments or claims, whether such liabilities are contingent or
otherwise, or direct or indirect, of ZYCAD in existence on or prior to or after
the Closing Date or otherwise or based on any events, facts or circumstances in
existence prior to or in connection with or after the sale of the Assets or in
connection with or arising from any activities of ZYCAD or any services
provided by or goods or assets sold by or products delivered to TSSI.
SECTION 1.6 NON-ASSIGNMENT OR SUBCONTRACTING OF CERTAIN ASSETS.
Notwithstanding anything to the contrary in this Agreement, to the extent that
the assignment or subcontracting hereunder of any of the Assets shall require
the consent of any other party (or in the event that any of the same shall be
nonassignable or unable to be subcontracted), neither this Agreement nor any
action taken pursuant to its provisions shall constitute an assignment or
subcontract or an agreement to assign or subcontract if such assignment or
subcontract or attempted assignment or subcontract would constitute a breach
thereof or result in the loss or diminution thereof; provided, however, that in
each such case, ZYCAD shall use its best efforts to obtain the consent of such
other party to an assignment to TSSI. If such consent is not obtained by the
Closing, ZYCAD shall cooperate with TSSI in any arrangement designed for TSSI
to perform ZYCAD's obligations with respect to such Asset after the Closing,
which arrangements may include enforcement, for the account and benefit of
TSSI, of any and all rights of ZYCAD against any other person arising out of
the breach or cancellation by such other person or otherwise, all of such
actions of ZYCAD to be at the direction and expense of ZYCAD. ZYCAD shall
reimburse or pay TSSI for all costs and expenses, including increased
obligations, resulting from an inability of TSSI to receive the benefits of
such assignment or subcontract.
ARTICLE II PURCHASE PRICE
SECTION 2.1 CONSIDERATION. Upon the terms and subject to the conditions
contained in this Agreement, in consideration for the Assets and the covenants
expressed herein and in full payment therefor, TSSI will pay the purchase price
set forth in Section 2.2.
SECTION 2.2 AMOUNT; PAYMENT. The purchase price for the Assets shall
be Two Million Two Hundred Fifty Thousand Dollars $2,250,000 (the "PURCHASE
PRICE") payable in cash at the Closing by TSSI by wire transfer.
SECTION 2.3 BULK SALES LAWS. TSSI and ZYCAD hereby waive compliance
with the California Uniform Commercial Code Bulk Transfers and any other
applicable state bulk transfer laws. ZYCAD agrees to indemnify TSSI against
all claims (other than Assumed Liabilities) brought
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by a creditor of ZYCAD against TSSI or the Assets based on noncompliance with
such laws in connection with the sale of the Assets.
ARTICLE III TAXES
SECTION 3.1 TAXES. ZYCAD shall electronically transfer the Software of
Schedules 1.2 - 1.5 to TSSI's facility in Beaverton, Oregon, and the parties
agree that title to the Software shall thereupon pass to TSSI in the state of
Oregon upon completion of such transfer. ZYCAD and TSSI shall each pay one-
half of any sales, use and other transfer taxes arising out of the purchase and
sale of the remaining Assets as listed in Schedules 1.1 and 1.6-1.8.
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS OF TSSI. TSSI represents to ZYCAD
that:
(a) ORGANIZATION. It is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
(b) AUTHORIZATION. It has full corporate power and authority to
enter into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. It has taken all necessary
and appropriate corporate action with respect to the execution and delivery of
this Agreement, and with respect to TSSI, the Agreement constitutes a valid and
binding obligation enforceable in accordance with its terms except as limited
by item (i) applicable bankruptcy, insolvency, moratorium, reorganization or
other laws affecting creditors' rights and remedies generally, (ii) except as
may be required by the applicable provisions of the bulk sales provisions of
applicable state laws,(iii) except as the indemnification provisions contained
in this Agreement may be limited by principles of public policy.
(c) BROKER FEES. It is not obligated to pay any fees or expenses of
any broker or finder in connection with the origin, negotiation or execution of
this Agreement or in connection with any of the transactions contemplated
hereby.
(d) PERFORMANCE OF AGREEMENT. All covenants, conditions and other
obligations under this Agreement which are to be performed or complied with by
TSSI prior to the Closing shall have been fully performed and complied with at
or prior to the Closing.
SECTION 4.2 REPRESENTATION OF ZYCAD. ZYCAD hereby represents and
warrants to TSSI that:
(a) CORPORATE ORGANIZATION OF ZYCAD. ZYCAD is a corporation duly
organized, validly existing and in good standing under the laws of Delaware,
and has all requisite power and authority to conduct the Business in the places
where such Business is now conducted.
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(b) AUTHORIZATION OF ZYCAD. ZYCAD has full corporate power and
authority to enter into this Agreement and to perform its obligations
hereunder, and to consummate the transactions contemplated hereby, including,
without limitation, the execution and delivery of this Agreement, general
conveyances, bills of sale, assignments, and other documents and instruments
evidencing the conveyance of the Assets, or delivered in accordance with
Section 8.2 hereunder (the "CLOSING DOCUMENTS"). ZYCAD has taken all necessary
and appropriate corporate action with respect to the execution and delivery of
this Agreement and the Closing Documents. No other corporate proceedings on
the part of ZYCAD are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement constitutes a valid and
binding obligation of ZYCAD, enforceable in accordance with its terms except as
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
other laws affecting creditors' rights and remedies generally.
(c) BROKERS' AND FINDERS' FEES. ZYCAD is not obligated to pay any
fees or expenses of any broker or finder in connection with the origin,
negotiation or execution of this Agreement or in connection with any
transactions contemplated hereby.
(d) CUSTOMERS. ZYCAD has provided TSSI with a list which includes
all customers to which ZYCAD has supplied products relating to the Business
during the period of 1996 and 1997 ("TDX FAULT AND TEST CUSTOMERS"). The TDX
Fault and Test Customer list is attached hereto as Schedule 4.
(e) TITLE TO PROPERTY. ZYCAD has good and marketable title to the
Assets, free and clear of all easements, mortgages, pledges, liens,
encumbrances, security interests, equities, charges, clouds and restrictions of
any nature whatsoever except for Licensed Software which is licensed by ZYCAD
as specified on Schedule 2, and except for Equipment under loan or lease as
specified in Schedule 1.1.. By virtue of the deliveries made at the Closing,
TSSI will obtain good and marketable title to the Assets, free and clear of all
easements, mortgages, pledges, liens, encumbrances, security interests,
charges, equities, clouds and restrictions of any nature whatsoever, except as
stated above. All Assets, including machinery and equipment owned, leased or
otherwise used by ZYCAD are in good operating condition and repair, reasonable
wear and tear excepted, and are suitable and adequate for use in the ordinary
course of business and conform in all material respects to all applicable laws.
All leases are binding, valid and enforceable in accordance with their terms
subject to the affect, if any, of (i) applicable bankruptcy and other similar
laws affecting the rights of creditors generally, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies,
and there are no current defaults or events which have occurred with which the
giving of notice or lapse of time or both would constitute a material default
under any lease. After the Closing, TSSI will be entitled to the continued use
and possession of the property leased by it, for the terms specified in such
leases and for the purposes for which such property is used. There is no
pending or threatened condemnation or similar proceeding affecting any of the
real property owned or leased by ZYCAD.
(f) ASSETS. The Assets include all intellectual property and all
other property in which ZYCAD has any right, title and interest with respect to
the Business. The Assets (excluding
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the Excluded Assets) include all the assets necessary to operate the Business
in the same manner as the Business was operated by ZYCAD prior to the
Closing. The Assets are suitable for the purpose or purposes for which they
are being used, are in good operating condition and in reasonable repair, and
free from any known defects, except such minor defects as do not interfere
with the continued use thereof. Each tangible Asset has been serviced and
maintained in accordance with customary industry practices. Subject to
normal wear and tear, such plants, facilities, machinery, and equipment are
capable of and are producing sound and merchantable products.
(g) TRADEMARKS, TRADE NAMES AND COPYRIGHTS. All trademarks, trade
names, copyrights, trade secrets or other proprietary rights that are
associated with the Assets listed in Schedules 1.1-1.8 or used on the conduct
of the Business are owned or are useable by ZYCAD.. The list of source codes,
specifications, product manuals and other materials included as necessary to
conduct the Business on Schedules l.1-1.8 are true, complete and correct and
will not be impaired or restricted as a result of the consummation of the
transactions contemplated hereby. The conduct of the Business conducted by
ZYCAD or the use and ownership of the Assets does not infringe any patent,
trademark, trade name, service mark, copyright, trade secret, or other
proprietary right of any other person and or company. No litigation is pending
or to the best knowledge of ZYCAD has been threatened against ZYCAD for the
infringement of any patents, copyrights, trademarks or trade names of any other
party or for the misuse or misappropriation of any trade secret, know-how or
other proprietary right owned by any other party; nor, to the best knowledge of
ZYCAD, does any basis exist for any such litigation.
(h) COMPLIANCE WITH LAW. ZYCAD has complied and is in compliance
with all applicable foreign, federal, state and local laws, statutes, licensing
requirements, rules and regulations, and judicial or administrative decisions
applicable to the Business including without limitation all export control
laws. ZYCAD has been granted any and all licenses, permits (temporary and
otherwise), authorization and approvals from federal, state, local and foreign
government regulatory bodies necessary to carry on the Business as currently
conducted, all of which are currently valid and in full force and effect. All
of such licenses, permits, authorizations, and approvals shall be transferred
to effective as of the Closing, and shall be valid and in full force and
effect to the same extent as if ZYCAD were continuing operation of the
Business. To the best of ZYCAD's knowledge, there is no order issued,
investigation or proceeding pending or threatened, or notice served with
respect to any violation of any law, ordinance, order, writ, decree, rule or
regulation issued by any federal, state, local or foreign court or governmental
agency or instrumentality applicable to the Business.
(i) NO VIOLATION OF OTHER INSTRUMENTS. Neither the execution of this
Agreement nor the performance hereof by ZYCAD will: (i) conflict with or result
in any breach or violation of the terms of any decree, judgment, order, law or
regulation of any court or other governmental body now in effect applicable to
ZYCAD or the Assets; (ii) conflict with, or result in, with or without the
passage of time or the giving of notice, any breach of any of the terms,
conditions and provisions of, or constitute a default under, or result in the
creation of any lien, charge, or encumbrance upon any of the Assets pursuant
to, any indenture, mortgage, lease, agreement or other instrument to which
ZYCAD is a party or by which it or any of the Assets are bound; (iii) permit
the acceleration of the
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maturity of any indebtedness of ZYCAD secured by the Assets; (iv) violate or
conflict with any provision of ZYCAD's Certificate of Incorporation, Bylaws,
or similar organizational instruments; or (v) give rise to any dissenter's
rights or other claims from ZYCAD stockholders. No consent from any third
party and no consent, approval or authorization of, or declaration, filing or
registration with, any government or regulatory authority is required to be
made or obtained in order to permit the execution, delivery or performance of
this Agreement by ZYCAD, or the consummation of the transactions contemplated
by this Agreement.
(j) LITIGATION. Neither ZYCAD nor, to the best knowledge of
ZYCAD, any officer, director, employee or agent of ZYCAD is a party to any
pending or threatened action, suit, proceeding or investigation, at law or in
equity or otherwise in, for or by any court or other governmental body
involving: (i) the Assets or (ii) the transactions contemplated by this
Agreement; nor does any basis exist for any such action, suit, proceeding or
investigation. There is no claim, investigation, litigation, action, suit, or
proceeding, administrative or judicial, pending or threatened against ZYCAD or
any Representative, or involving the Assets, at law or in equity, before any
federal, state, local, or foreign court, or regulatory agency, or other
governmental authority, including, without limitation, any unfair labor
practice or grievance proceedings or otherwise. ZYCAD has not received any
notice of any such proceeding.
(k) TAXES. (a) All Taxes (as hereinafter defined) due or payable
by ZYCAD, and all interest and penalties thereon, whether disputed or not, have
been paid in full. All tax returns, statements, reports, forms and other
documents required to be filed in connection therewith have been duly and
timely filed (and no extension of any filing date applicable thereto has been
requested or granted) and were correct and complete in all respects. All
deposits required by law to be made by ZYCAD with respect to employees'
withholding taxes have been duly made. ZYCAD is not delinquent in the payment
of any Tax, assessment or governmental charge or deposit, and ZYCAD does not
have any Tax deficiency or claim currently pending, outstanding or asserted
against it, and there is no basis for any such Tax deficiency or claim. There
is no audit currently pending regarding any Taxes and ZYCAD has not extended
the period in which any Tax could be assessed or collected. (b) No tax is
required to be withheld pursuant to Section 1445 of the Code as a result of the
transfers contemplated by this Agreement, and ZYCAD is not a person other than
a United States person within the meaning of the Code. There are no liens for
Taxes upon the Assets except liens for current Taxes not yet due. There is no
contract, agreement, plan or arrangement, including but not limited to the
provisions of this Agreement, covering any employee or independent contractor
or former employee or independent contractor of ZYCAD that, individually or
collectively, could give rise to the payment by ZYCAD of any amount that would
not be deductible pursuant to Section 280G or Section 162 of the Code. None of
the Assets (i) is property that is required to be treated as owned by any other
person pursuant to the so-called "safe harbor lease" provisions of former
Section 168(f)(8) of the Code, (ii) directly or indirectly secures any debt the
interest on which is tax exempt under Section 103(a) of the Code or (iii) is
"tax exempt use property within the meaning of Section 168(b) of the Code. (c)
For purposes of this Agreement, "Tax" (and, with correlative meaning, "Taxes"
and "Taxable") means (I) any net income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium,
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property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional
amount imposed by any taxing authority responsible for the imposition of any
such tax (domestic or foreign), (ii) any liability for the payment of any
amounts of the type described in (i) as a result of being a member of an
affiliated, consolidated, combined or unitary group for any Taxable period
and (iii) any liability for the payment of any amounts of the type described
in (i) or (ii) as a result of any express or implied obligation to indemnity
any other person.
(l) ENVIRONMENTAL COMPLIANCE. In connection with the operation of
the Business, ZYCAD is not in violation of, or delinquent in respect to, any
material decree, order or arbitration award or law, statute, or regulation of
or agreement with, or any license or permit from, any governmental authority to
which it or its properties, assets, personnel or business are subject (or to
which it is itself subject) and which relates to the environment (including,
without limitation, laws, statutes, rules and regulations and the common law
relating to environmental matters and contamination of any type whatsoever
("ENVIRONMENTAL LAWS"). ZYCAD has obtained no permits, licenses and other
authorizations pursuant to any Environmental Laws. No failure to obtain any
such permit, license or authorization will have a material adverse effect on
the Business.
(m) ACCURACY OF DOCUMENTS AND INFORMATION. The copies of all
instruments, agreements, other documents and written information furnished to
TSSI by ZYCAD are complete and correct in all material respects. No
representations or warranties made by ZYCAD in this Agreement, nor any
document, written information, statement or Schedule furnished to TSSI or its
agents pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of a material fact, or omits
or will omit to state a material fact necessary to make the statements or facts
contained herein or therein not misleading. There is no fact which materially
and adversely affects ZYCAD, the Business or the Assets known to ZYCAD which
has not been expressly and fully set forth in this Agreement or the Schedules
hereto.
(n) FINANCIAL INFORMATION. The Zycad EDA Business Plan provided to
TSSI, which included projected revenues and costs and expenses for the Business
for the June 30, 1997 Quarter as well as the second half of 1997 and calendar
1998 was prepared in good faith and ZYCAD reasonably believes there is a
reasonable basis for such projections (taking into account the inherent
uncertainties involved in drafting any set of projections); however, these
projected revenues, costs and expenses for the Business are not binding in any
way on ZYCAD.
(o) ABSENCE OF CERTAIN CHANGES AND EVENTS. Since July 1, 1997 there
has not been:
(i) Any material adverse change in the financial condition,
results of operation, assets, liabilities, business or prospects of the
Business or any occurrence, circumstance, or combination thereof which
reasonably could be expected to result in any such adverse change;
(ii) Any event, including, without limitation, shortage of
materials or supplies, fire, explosion, accident, requisition or taking of
property by any governmental agency,
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flood, drought, earthquake or other natural event, riot, act of God or the
public enemy, or damage, destruction or other casualty, whether covered by
insurance or not, which has had an adverse affect on the Business or the
Assets or any such event which reasonably could be expected to have such an
affect on the Business or the Assets;
(iii) Any transaction relating to or involving ZYCAD (other than
the transactions contemplated herein) relating to the Business which was
entered into or carried out by ZYCAD other than in the ordinary and usual
course of business;
(iv) Any change made by ZYCAD in its method of operating the
Business or its accounting practices relating thereto;
(v) Any mortgage, pledge, lien, security interest,
hypothecation, charge or other encumbrance imposed or agreed to be imposed on
or with respect to the Assets other than liens arising with respect to taxes
not yet due and payable and such minor liens and encumbrances, if any, which
arise in the ordinary course of business and are not material in nature or
amount and do not detract from the value of the Assets or impair the operations
conducted thereon or any discharge or satisfaction thereof;
(vi) Any sale, lease or disposition of, or any agreement to
sell, lease or dispose of any of the Assets, other than sales, leases or
dispositions in the usual and ordinary course of business and consistent with
prior practice;
(vii) Any modification, waiver, change, amendment, release,
rescission, accord and satisfaction or termination of, or with respect to, any
material term, condition or provision of any contract, agreement, license or
other instrument to which ZYCAD is a party and relating to or affecting the
Business, the Asset or the Assumed Obligations other than any satisfaction by
performance in accordance with the terms thereof in the usual and ordinary
course of business and consistent with prior practice;
(viii) Any labor disputes or disturbances materially
affecting in an adverse fashion the business or financial condition of the
Business, including, without limitation, the filing of any petition or charge
of unfair labor practices with the National Labor Relations Board;
(ix) Any adverse relationships or conditions with vendors or
customers which may have an adverse financial effect or nonfinancial effect on
the Business or the Assets;
(x) Any waivers of any rights of substantial value relating to
the Business;
(xi) Any dispositions or abandonment, or any discussions related
thereto, of any of ZYCAD's trademark, tradename, patent, copyright or other
intellectual property rights or any application therefore necessary or
incidental to the conduct of the Business;
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(xii) Any disposition or disclosure of, or any discussions
related thereto, any of ZYCAD's proprietary trade secrets, formula, processes,
engineering data or technical know-how necessary or incidental to the conduct
of the Business; or
(xiii) Any other event or condition of any character which
materially adversely affects, or may reasonably be expected to so affect, the
Assets or the results of operations or financial condition of ZYCAD relating to
the Business.
(p) CONDUCT OF BUSINESS.
(i) Since the date of this Agreement ZYCAD will not, without
the prior written consent of TSSI:
(A) Make any sale, license or other disposition of the TDX
Products (the "Products") other than at the list price or in conformity with
its sales policy regarding discounts.
(B) Grant any license of the TDX Product without charge or
upon a loan basis except as approved by TSSI;
(C) Make any changes in the compensation of ZYCAD's
employees listed on Schedule 5 (the "EMPLOYEES"), including without limitation
any changes pursuant to any bonus, pension, profit-sharing or other plan or
commitment or any increases in the compensation payable or to become payable to
any of the Employees;
(D) Enter into any new discussions regarding the license,
sale or redistribution of source code for the Products;
(E) Enter into any new discussions regarding OEM or
redistribution of the Products; or
(F) Entered into or conducted any discussion with any
other prospective purchaser of the Assets.
(G) Conduct all discussions and negotiations with third
parties regarding any license, sale or redistribution of source code for the
Products;
(H) Conduct discussions and negotiations with third
parties regarding OEM or redistribution of the Products; and
(ii) At all times since July 1, 1997, ZYCAD has conducted
the Business diligently in the ordinary course thereof (subject to the
limitations set forth in Agreement) and has used reasonable commercial efforts
to preserve intact the organization of the Business and the good will of its
customers, suppliers and others having business relations with it.
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(q) UNDISCLOSED LIABILITIES. There are no debts, liabilities or
obligations with respect to the Business or to which the Assets are subject,
liquidated, unliquidated, accrued, absolute, contingent or otherwise except
those arising under the Assigned Contracts or Assumed Liabilities set forth
herein;
(r) PROPRIETARY RIGHTS. Schedules 1.1-1.8 sets forth all Assets
which ZYCAD owns and uses or has used in connection with the Business. The
Assets include all patent rights, copyrights, trademarks, domain name (Attest),
trade secrets, information, proprietary rights and processes necessary for the
Business as now and proposed to be conducted without any conflict with or
infringement upon the rights of others. ZYCAD is the sole owner of all right,
title and interest in and to all such Assets (except for loaned and Leased
Equipment specified in Schedule 1.1 and Licensed Software specified in Schedule
2) free and clear of all liens, encumbrances, claims, rights of use and
restrictions whatsoever.
Neither the Assets nor any other processes, methods or operations
employed by ZYCAD in the Business, now or in the past, infringes upon any
proprietary rights or intellectual property of any other person, firm,
corporation or other entity. There is not pending or threatened any claim or
litigation against ZYCAD contesting the right of ZYCAD to engage in or employ
any such processes, methods, operations or the Assets. Without limiting the
generality of the foregoing, all Assets that consist of code, except that
owned by third parties as Licensed Software specified in Schedule 2 are owned
by ZYCAD and there are no pending legal actions challenging this ownership,
nor are there any legal actions pending or, to the best of ZYCAD's knowledge,
threatened in any other way connected with the Business, including without
limitation "look and feel" contentions or other intellectual property claims.
The documentation of such Assets is current, accurate and sufficient
in detail and content to identify it and permit its full and proper use by
TSSI without reliance on the special knowledge of others.
There are no other ownership claims with respect to the Assets, and
no liens, encumbrances, restrictions, or legal or equitable claims of others
with respect to the Assets. ZYCAD has taken reasonable security measures to
protect the secrecy, confidentiality, and value of the Assets. Any employee
or other person who, either alone or in concert with others, developed,
invented, discovered, derived, programmed or designed any of the Assets or
any part thereof, or who has knowledge of or access to information relating to
it, has been put on notice that the Assets are proprietary to ZYCAD and not
to be divulged or misused and has executed a proprietary information and
inventions agreement. The Assets are presently valid and protectable, and not
part of the public knowledge or literature, nor has it been used, divulged, or
appropriated for the benefit of any past or present employees or other
persons, or to the detriment of ZYCAD.
(s) RESTRICTIVE DOCUMENTS OR ORDERS. ZYCAD is not a party to or
bound under any agreement, contract, order, judgment or decree, or any similar
restriction not of general application which materially adversely affects, or
reasonably could be expected to materially adversely affect (i) the continued
operation by TSSI of the Business after the Closing on
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substantially the same basis as said business was theretofore operated or
(ii) the consummation of the transactions contemplated by this Agreement.
(t) CONTRACTS AND COMMITMENTS. There are no contracts, commitments,
leases, permits, and other instruments (written or oral) binding upon ZYCAD
with respect to the Business except as set forth in Schedule 2. Prior to the
Closing, ZYCAD has delivered to TSSI true and complete copies of all such items
and any amendments thereto. All of ZYCAD's contracts, commitments, leases,
permits and instruments relating to the Business are in full force and effect
and are valid, binding and enforceable in accordance with their respective
provisions, and ZYCAD is not in default nor has there occurred an event or
condition which, with the passage of time or giving of notice (or both), would
constitute a default with respect to the payment or performance of any
obligation thereunder; and no claim of such a default has been asserted and
there is no basis upon which such a claim could validly be made.
(u) THIRD PARTY CONSENTS. No consent, approval, or authorization
of any third party on the part of ZYCAD is required in connection with the
consummation of the transactions contemplated hereunder except for the
Contracts requiring consent to assignment listed on Schedule 2 hereto.
(v) LABOR RELATIONS.
(i) With respect to the Business, ZYCAD has not failed to
comply in any respect with Title VII of the Civil Rights Act of 1964, as
amended, the Fair Labor Standards Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, all applicable federal, state and local laws,
rules and regulations relating to employment, and all applicable laws, rules
and regulations governing payment of minimum wages and overtime rates, and the
withholding and payment of taxes from compensation of employees.
(ii) There are no labor controversies pending or threatened
between ZYCAD and any of the Employees or any labor union or other collective
bargaining unit representing any of the Employees.
(w) PENSION, PROFIT SHARING, ETC. The Zycad Investment Plan 401(k)
Plan ("PLAN") is the only "Employee Pension Benefit Plan" as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended (ERISA)
which is applicable to the Employees. The Internal Revenue Service has issued
a favorable determination letter with respect to the Plan which has not been
revoked or modified. Nothing has occurred which gives reason to believe that
the Plan may be revoked or modified, and no change or amendment of the Plan
under Section 401 of the Internal Revenue Code of 1986, as amended (the "IRC
CODE") or any of the Trusts maintained pursuant thereto under Section 501 of
the Code has been made. All contributions required by law shall have been
made. No event of the type set forth in Section 4043(b) of ERISA has occurred
and is continuing with respect to the Plan other than as may result from the
transactions contemplated hereby. There are no material claims, investigations
or lawsuits which have been asserted or instituted against the assets of ZYCAD
under the Plan and no reasonable basis
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for any such claim or lawsuit exists. The Plan is being maintained, operated,
and administered in all material respects in accordance with its terms and
all provisions of ERISA (including rules and regulations thereunder) and
other applicable laws.
(x) INTERESTED PARTY RELATIONSHIPS. ZYCAD does not have any
material financial interest, direct or indirect, in any material supplier or
customer or other party to any contract which is material to the Business.
(y) CERTAIN PAYMENTS. In connection with the Business, ZYCAD has
not and no person directly or indirectly on behalf of ZYCAD has, (i) made or
received any payment that was not legal to make or receive; (ii) engaged in any
transaction or made or received any payment that was not properly recorded in
ZYCAD's books in accordance with generally accepted accounting principles and
all applicable laws; or (iii) created or used any "off-book" account or fund.
(z) PRODUCT WARRANTIES. ZYCAD has made available to TSSI copies of
its warranty policy and all outstanding warranties or guarantees relating to
any of the Products with respect to the Business other than warranties or
guarantees implied by law, and there are no additional liabilities pursuant to
such warranties. All such warranties and guarantees comply with all applicable
laws including, without limitation, the Magnuson-Moss Warranty Act and all
rules and regulations of the FTC adopted under that legislation. ZYCAD is not
aware of any claim asserting (a) any damage or LOSS caused by any Product, or
(b) any breach of any express or implied product warranty or any other similar
claim with respect to any Product other than standard warranty obligations (to
replace, repair or refund) made by ZYCAD in the ordinary course of business,
except for those claims that, if adversely determined against the Business,
would not have a material adverse change on the results of operations or
financial condition of the Business.
(aa) COMPLETE DISCLOSURE. No representation or warranty by ZYCAD in
this Agreement, and no exhibit, schedule, statement, certificate or other
writing furnished to TSSI pursuant to this Agreement or in connection with the
transactions contemplated thereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein and therein not misleading.
(bb) PERFORMANCE OF AGREEMENT. All covenants, conditions and other
obligations under this Agreement which are to be performed or complied with by
ZYCAD prior to the Closing have been fully performed and complied with at or
prior to the Closing.
(cc) BOOKS AND RECORDS. The books and records of ZYCAD to which TSSI
and its accountants and attorneys have been given access are the true books and
records of ZYCAD and truly and fairly reflect the underlying facts and
transactions in all material respects.
(dd) EXPERTEST SOURCE CODE. The copy of the ExperTest source code
provided to TSSI by ZYCAD at closing is a complete and accurate copy of the
ExperTest source code as of September 30, 1993, as provided to Attest Software,
Inc. from ExperTest.
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ARTICLE V COVENANTS
SECTION 5.1 COVENANTS AGAINST DISCLOSURE.
(a) Except as may be required by law, statute, rule or regulation,
ZYCAD and TSSI agree not to (a) disclose to any person, association, firm,
corporation or other entity in any manner, directly or indirectly, any
information or data relevant to the Business, whether of a technical or
commercial nature, or (b) use, or permit or assist, by acquiescence or
otherwise, any person, association, firm, corporation or other to use, in any
manner, directly or indirectly, any such information or data, excepting only
disclosure use of such data or information as is at the time generally known to
the public and which did not become generally known through any breach of any
provision of this Section 5.1. In the event that either party shall determine
that it is obligated to file this Agreement or any other documents between TSSI
and ZYCAD with the Securities and Exchange Commission ("SEC,'), that party
shall so notify the other and shall request confidential treatment for such
period of time and for such items as shall reasonably be requested by the
other, including without limitation the names of the Employees.
(b) The parties agree to maintain the confidentiality of the terms
and conditions of this Agreement, except to the extent required by law,
statute, rule or regulation, provided, however, that the parties agree to issue
a mutually agreeable joint press release upon Closing. Each party will review
and agree to the text of any other public announcement related to this
Agreement or the transactions contemplated hereby prior to the release thereof.
SECTION 5.2 DOCUMENTS AND RECORDS.
(a) In the event of termination of this Agreement prior to the
Closing, ZYCAD and its representatives and TSSI and its representatives will
each return to the other all documents, work papers and other material
(including all copies made thereof) obtained from the other at anytime in
connection with the transactions contemplated hereby and will use all
reasonable efforts to keep confidential any such information so obtained unless
such information is readily ascertainable from published information or trade
secrets.
(b) As soon as practicable, but in any event within ten (10) days
after TSSI's reasonable request, from and after the Closing, ZYCAD shall
deliver, or cause to be delivered, to TSSI such historical financial
information and data and such other information and data concerning the
operations of the Business prior to the Closing, and render such cooperation
and use its best efforts to cause its independent public accountants to render
such cooperation as TSSI shall reasonably request, in order to enable TSSI to
complete and file all federal, state or foreign forms and reports which it may
be required to file with respect to the operations and business of ZYCAD prior
to the Closing or to respond to audits by any taxing authorities with respect
to such operations.
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SECTION 5.3 POST-CLOSING ACCESS BY ZYCAD TO INFORMATION. With respect
to the books and records of ZYCAD relating to the Business prior to the
Closing, where there is a legitimate purpose not injurious to TSSI, including,
without limitation, an audit of ZYCAD by the Internal Revenue Service or any
other taxing authority, TSSI shall allow ZYCAD or its representatives
appropriate access to such books and records during regular business hours,
upon reasonable notice.
SECTION 5.4 INJUNCTIVE RELIEF. ZYCAD and TSSI acknowledge and agree
that their respective remedies at law for any breach of their respective
obligations under this Article V hereof would be inadequate, and agree and
consent that temporary and permanent injunctive relief may be granted in a
proceeding which may be brought to enforce any provision of this Article V
without the necessity of proof of actual damage.
SECTION 5.5 NON-COMPETITION. Commencing on the date of this Agreement
and continuing for a period of five (5) years thereafter, ZYCAD shall not
directly or indirectly, throughout the United States and the World, develop,
market, or sell software fault simulation or test products, except for software
fault simulation products which exclusively run on ZYCAD's XP and PXP
accelerator products. Both parties agree that this restriction is reasonable
in scope given the nature of the Business.
SECTION 5.6 TAX RETURNS. ZYCAD shall be responsible for and pay when
due (I) all of ZYCAD 's Taxes attributable to or levied or imposed upon the
Assets relating or pertaining to the period (or that portion of any period)
ending on or prior to the date of the Closing and (ii) all Taxes attributable
to, levied or imposed upon, or incurred in connection with the Business prior
to the date of the Closing. ZYCAD shall timely file within the time period for
filing, or any extension granted with respect thereto, all of ZYCAD's Tax
returns required to be filed in connection with the Assets and any portion of
any such Tax returns connected therewith shall be true and correct and
completed in accordance with applicable laws.
ARTICLE VI. EMPLOYMENT MATTERS
SECTION 6.1 EMPLOYEE SOLICITATION BY TSSI. TSSI shall have the right,
but not the obligation, to offer employment to any of ZYCAD's employees listed
on Schedule 5 at the salary levels and on other terms and conditions to be
determined in TSSI's'' sole discretion effective as of the Closing. TSSI shall
have no liability for accrued wages (including salaries and commissions),
severance pay, sick leave or other benefits, or employee plans of any type or
nature on account of ZYCAD's employment of or termination of such employees',
and ZYCAD shall indemnify TSSI and hold TSSI harmless against any liability
arising out of any claims for such pay or benefits or any other claims arising
from ZYCAD's employment of or termination of employment of such employees.
Employees shall continue to be offered employment by ZYCAD through the Closing
and ZYCAD shall continue in force all current salaries and benefits.
SECTION 6.2 EMPLOYEE PLANS. TSSI is not assuming any of the employee
plans of ZYCAD and TSSI shall have no liability whatsoever to employees of
ZYCAD with respect to accrued or future benefits under any such employee plans,
whether or not any of such employees
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are offered employment by, or become employees of, TSSI, and ZYCAD shall
defend, indemnify and hold TSSI harmless against any claims that it has
liability under such employee plans.
SECTION 6.3 NONSOLICITATION. CREDENCE agrees not to solicit the
employment of any individual who is a ZYCAD employee as of the date of this
Agreement (other than an Employee) through August 20, 1998. Except as
otherwise permitted hereunder, in the event the Closing does not occur CREDENCE
and TSSI agrees not to solicit the employment of any Employee through August
20, 1998. Zycad agrees not to solicit the employment of any individual who is
an employee of CREDENCE or subsidiary of CREDENCE as of the date of this
Agreement through August 20, 1998.
ARTICLE VII CONFIDENTIALITY
SECTION 7.1 CONFIDENTIALITY. All proprietary information provided to
the other party shall be kept confidential pursuant to the terms of the
Nondisclosure Agreement signed between the parties. The parties agree to
maintain the confidentiality of the terms and conditions of this Agreement
except to the extent required by law or pursuant to this Agreement; provided,
however, the parties agree to issue a mutually agreeable joint press release
upon execution of this Agreement announcing such execution. Each party will
review and agree to the text of any other public announcement related to this
Agreement or the transactions contemplated hereby prior to the release thereof.
In addition, in the event that either party shall determine that it is
obligated to file this Agreement with the Securities Exchange Commission (the
"SEC"), that party shall notify the other party.
ARTICLE VIII CLOSING
SECTION 8.1 CLOSING. The closing for the transaction contemplated by
this Agreement shall be on August 21, 1997 (the "CLOSING") or such other time
as mutually agreed upon by the parties. The Closing shall take place
electronically or at such other place or date as may be agreed upon from time
to time in writing by TSSI and ZYCAD.
SECTION 8.2 DELIVERIES BY ZYCAD. At the Closing, ZYCAD shall deliver
to TSSI, all duly and properly executed, the following:
(a) A good and sufficient Bill of Sale, which shall be in form and
substance satisfactory to TSSI selling, delivering, transferring and assigning
to TSSI title to all of ZYCAD's right, title and interest to the Assets, free
and clear of all mortgages, pledges, liens, encumbrances, security interests,
equities, charges, clouds and restrictions of any nature whatsoever, except as
otherwise provided herein.
(b) Intellectual Property and Proprietary Information Assignment,
Assignment and Assumption Agreement for Assigned Contracts, Assignment of
Registered Marks, and Assignment of Copyrights.
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(c) A copy of the ExperTest source code as of September 30, 1993.
(d) An opinion of Douglas E. Klint, general counsel to ZYCAD, dated
the date of the Closing, as to the following matters:
(i) ZYCAD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to enter into the transactions
contemplated herein and in the Related Agreements.
(ii) This Agreement and other documents delivered at the
Closing by ZYCAD have been duly executed and delivered by ZYCAD, and are
legally valid and binding obligations of ZYCAD, enforceable in accordance with
their terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors; rights generally, now
or hereafter in effect, and except to the extent that courts may not grant
specific performance of contractual provisions involving matters other than the
payment of money;
(iii) All necessary corporate action has been taken by
ZYCAD to authorize the execution and delivery of this Agreement and the
performance by ZYCAD of its obligations and thereunder.
(iv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated thereby have
not, and will not, result in a breach of or conflict with any of the terms,
provisions and conditions of the Certificate of Incorporation or Bylaws of
ZYCAD, any applicable judicial or administrative writ, decree or order of which
such counsel has knowledge, or, to the best of such counsel's knowledge, any
deed, mortgage, indenture, contract, agreement or instrument known to counsel
to which ZYCAD is party or by which it is bound;
(v) To the best of such counsel's knowledge, ZYCAD has
good and marketable title to the Assets, free and clear of all easements,
mortgages, pledges, liens, encumbrances, security interests, equities, charges,
clouds and restrictions of any nature whatsoever, except for the loaned and
Leased Equipment specified in Schedule 1.1 Licensed Software as specified in
Schedule 2. By virtue of the deliveries made at the Closing, TSSI will obtain
good and marketable title to the Assets, free and clear of all easements,
mortgages, pledges, liens, encumbrances, security interests, charges, equities,
clouds and restrictions of any nature whatsoever, except as stated above.
(vi) To the best of such counsel's knowledge, the conduct
of the Business conducted by ZYCAD does not infringe any patent, trademark,
tradename, service mark, copyright, trade secret, or other proprietary right of
any other person. No litigation is pending or has been threatened against
ZYCAD for the infringement of any patents, copyrights, trademarks or tradenames
of any other party for the misuse of misappropriation of any trade secret, know
how or other proprietary right owned by any other party; nor to the best of
such counsel's knowledge, does any basis exist for such litigation.
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(vii) To the best of such counsel's knowledge, neither
ZYCAD nor any officer, director, employee or agent of ZYCAD is a party to any
pending or threatened action, suit, proceeding or investigation at law or in
equity or otherwise in, for or by any court or other governmental body which
could have a material adverse affect on the Assets or the transactions
contemplated by the Agreement.
(e) Lien release for the Assets from Coast Business Credit.
(f) Such other separate instruments of sale, assignment or transfer
that TSSI may reasonably deem necessary or appropriate in order to perfect,
confirm or evidence in TSSI' title to all or any part of the Assets.
ARTICLE IX POST CLOSING
SECTION 9.1 POST CLOSING OBLIGATIONS.
ZYCAD shall deliver the following documents to TSSI within a reasonable
time after Closing:
(a) Consent of the Lessor of the Leased Equipment specified on
Schedule 1.1 to a change of location for the Leased Equipment to TSSI's
Location.
(b) Consents for the assignment of those Assigned Contracts
specified in Schedule 2 where consent of the assignment to TSSI is required.
ZYCAD agrees to supply administrative support at $60 per hour for up to
sixty (60) days after Closing to assist in the transfer of the Business to
TSSI. ZYCAD also agrees to retain as employees those Employees with
immigration Visas ("VISA EMPLOYEES) for a period up to four (4) months or until
a new H1 Visa has been issued for employment by TSSI and ZYCAD shall lend the
Visa Employees back to TSSI and TSSI shall reimburse ZYCAD 100% of the salary,
benefits and expenses for such Visa Employees.
ARTICLE X INDEMNIFICATION
SECTION 10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation conducted at any time with regard thereto by
or on behalf of either party, all representations, warranties, covenants and
agreements of each party in this Agreement shall survive the execution,
delivery and performance of this Agreement. No investigation made by or on
behalf of TSSI with respect to ZYCAD shall be deemed to affect TSSI's reliance
on the representations, warranties, covenants and agreements made by ZYCAD
contained in this Agreement and shall not be a waiver of TSSI's rights to
indemnity as herein provided for the breach of inaccuracy of or failure to
perform or comply with any of ZYCAD's representations, warranties, covenants or
agreements under this Agreement. Nothing in this Agreement shall be construed
as limiting in any
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way the remedies that may be available to a party in the event of fraud
relating to the representations, warranties, agreements or covenants made by
any other party in this Agreement. All Representations and warranties of
each party set forth in this Agreement shall be deemed to have been made
again by such party at and as of the Closing. The obligations of indemnity
provided herein with respect to the representations and warranties of ZYCAD
set forth in Section 4.2 of the Agreement shall terminate one (1) year after
the Closing and such representations and warranties of ZYCAD under Section
4.2 shall terminate the shorter of either three (3) years after the Closing,
or the full running of any and all Statute of Limitations on any and all
claims that the legal or beneficiary owners of the licensed software under
the License Agreement dated September 30, 1993 between Attest Software, Inc.
and ExperTest Inc., as identified in Schedule 2, may assert against Attest
Software, Inc., its heirs, legal representatives, successors and assigns, but
in no case shall such period of indemnification terminate in less than one
(1) year after the Closing. The representations and warranties by TSSI under
Section 4.1 shall terminate one (1) year after the Closing.
SECTION 10.2 INDEMNIFICATION. ZYCAD hereby agrees to indemnify and hold
harmless TSSI and each of its affiliates, subsidiaries, officers, directors and
stockholders against any and all losses, liabilities, damages, demands, claims,
suits, actions, judgments or causes of action, assessments, costs and expenses,
including, without limitation, interest, penalties, attorneys' fees, any and
all expenses incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation (collectively,
"DAMAGES"), asserted against, resulting to, imposed upon, or incurred or
suffered by TSSI and each subsidiaries, and its affiliates, officers,
directors, stockholders, successors, or assigns directly or indirectly, as a
result of or arising from an any inaccuracy in or breach or nonfulfillment of
any of the representations, warranties, covenants or agreements made by ZYCAD
in this Agreement, any facts or circumstances constituting such an inaccuracy,
breach or nonfulfillment, or any liability of ZYCAD imposed upon TSSI as
transferee of the Assets, including, without limitation, any liability arising
out of any lien or any obligation or claim brought by creditors of ZYCAD or
claims based an the premise that the sale of the Assets did not comply with the
bulk sales provisions and any liability arising out of obligations to ZYCAD's
employees (including, without limitation, any obligations under any employee
benefit, profit sharing, or pension or welfare plan) or out of ZYCAD's status
as employer of employees. ZYCAD represents that royalties are due certain
individuals by reason of the License Agreement between Attest Software Inc. and
ExperTest, Inc. Any claim for such royalties is specifically covered by the
indemnification provisions of this Section 10.2.
(a) In the event that TSSI and its parent suffers Damages, TSSI
shall within one hundred twenty (120) days of actually discovering such Damage
give ZYCAD written notice thereof ("Notice of Claim"). The Notice of Claim
shall state in reasonable detail the nature of the claim, the specific
provisions in this Agreement alleged to have been breached, and the amount of
the claim for indemnification. Such amount shall represent TSSI good faith
estimate of the Damages. ZYCAD shall have thirty (30) days from receipt of the
Notice of Claim to accept or reject the claim for indemnification. Any claim
for Damages accepted by ZYCAD or any claim determined as valid
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under the claim procedure set forth below, shall be deemed "ESTABLISHED
DAMAGES" for the purposes of this Agreement.
(b) If a Notice of Claim is given pursuant to subsection (a) above,
and no rejection is received within the thirty (30) day period specified above,
then ZYCAD shall be deemed to have accepted such claim. If ZYCAD rejects a
claim within such thirty (30) day period, the parties shall, in good faith,
attempt to negotiate a resolution of such claim within sixty (60) days
thereafter (the "RESOLUTION PERIOD"). If the parties do not reach resolution
during the Resolution Period, then TSSI may, within thirty (30) days after the
end of the Resolution Period proceed to submit the controversy to arbitration
under the rules then in effect of the American Arbitration Association. The
determination of the arbitrator(s) shall be binding, final and conclusive on
the parties. The expenses in connection with any arbitration shall be borne
equally by the parties unless determined otherwise by the arbitrator(s). If as
a result of such arbitration it is determined that ZYCAD is obligated for such
Damages, the amount set by such arbitration shall be the amount of the
Established Damages and ZYCAD shall owe such amount. If as a result of such
arbitration it is determined that ZYCAD has no obligation to indemnify, ZYCAD
shall have no further liability on the claim.
(c) If a claim for indemnification arises out of a claim by a third
party, including without limitation any governmental agency, body or authority,
("THIRD PARTY CLAIM") in the Notice of Claim, TSSI shall state in reasonable
detail the nature of the claim and the basis for asserting such claim. Such
notice shall be given in accordance with subsection (a) above and shall specify
whether TSSI intends to defend the claim. If the claim has resulted in the
commencement of litigation, TSSI shall take all necessary legal steps to
preserve the legal rights of ZYCAD until such time as ZYCAD is able to assume
or participate in the defense of the litigation. If TSSI elects to defend the
claim, ZYCAD shall have the right to participate in the defense of the claim.
If TSSI does not elect to defend the claim, ZYCAD shall have the obligation to
defend the claim and TSSI shall have the right to participate in such defense
and hereby agrees to cooperate with ZYCAD and make available to it or its
counsel all records and other material reasonably required to defend the claim.
If TSSI is defending the claim, ZYCAD shall be given written notice of any bona
fide settlement offers received with respect to the claim. Within twenty (20)
days of receipt of such offer, ZYCAD may elect in writing to accept the
settlement offer. If ZYCAD wishes to accept such settlement offer and TSSI
does not, then the claim shall be subject to a maximum indemnification in the
amount of the settlement offer and the right to such indemnification of TSSI
shall be deemed established in such amount. So long as ZYCAD may continue to
have liability for such claim, TSSI shall not have the right to settle such
claim without the prior written consent of ZYCAD. So long as a Third-Party
Claim is pending, TSSI shall hold in abeyance its claim for indemnification.
If a settlement is reached which results in any liability on the part of TSSI,
or if a judgment is rendered against TSSI which is not properly appealed or
appealable, then TSSI shall be entitled to assert its claim for
indemnification. Each party shall be responsible for its own costs and
expenses including legal fees incurred in investigating and defending such
Third Party Claim, except that ZYCAD shall pay the reasonable attorneys' fees:
(a) for taking legal actions necessary to preserve the legal rights of ZYCAD in
connection with defending the claim of TSSI; and (b) which are found to be
indemnifiable under this Agreement.
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ARTICLE XI CUSTOMER SUPPORT
SECTION 11.1 SUPPORT. TSSI shall support the current TDX Fault and
Test Customers on maintenance as set forth in Schedule 3.2 after the Closing
Date and ZYCAD shall have no obligation therefor. The amount of the Purchase
Price shall be reduced by the amount of prepaid maintenance received by ZYCAD
and the value of free maintenance for the Products given away by ZYCAD which
extends beyond the Closing Date.
ARTICLE XII GENERAL
SECTION 12.1 ENTIRE AGREEMENT. This Agreement, the exhibits and
schedules hereto, and the documents referred to herein embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements and
understandings, oral or written, relative to said subject matter, except that
the Nondisclosure Agreement signed by the parties shall survive as an
independent agreement.
SECTION 12.2 BINDING EFFECT; ASSIGNMENT. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon ZYCAD, its successors and permitted assigns, and TSSI and their
successors and permitted assigns.
SECTION 12.3 NOTICE. All notices and other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party for whom
intended or by being deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail bearing the address shown
in this Agreement for, or such other address as may be designated in writing
hereafter by, such party:
If to ZYCAD: Zycad Corporation
47100 Bayside Parkway
Fremont, CA 94538
Attention: General Counsel
If to TSSI: Test Systems Strategies, Inc.
8700 S.W. Creekside Place
Beaverton, OR 97008
Attention: W. R. Bottoms, Chairman
With a copy to CREDENCE: Credence Systems Corporation
215 Fourier Avenue
Fremont, CA 94539
Attention: Victor H. Okumoto, General Counsel
20
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SECTION 12.4 CAPTIONS. The Article and Section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof.
SECTION 12.5 EXPENSES OF TRANSACTION; ATTORNEYS FEES. ZYCAD and TSSI
shall each pay their own respective costs and expenses incurred in connection
with this Agreement, and the transactions contemplated hereby. In the event of
any litigation or arbitration or other judicial proceedings arising out of this
Agreement, the prevailing party in any such proceeding shall be entitled to
recover from the other reasonable attorney fees and all costs incurred by such
party in such proceeding.
SECTION 12.6 WAIVER; CONSENT. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless
such waiver shall be in writing and signed by the party claimed to have given
consented thereto. Except to the extent that a party hereto may have otherwise
agreed in writing, no waiver by that party of any condition of this Agreement
or breach hereunder or thereunder shall be deemed to be a waiver of any other
condition or subsequent or prior breach of the same or any other obligation or
representation by the other party, nor shall any forbearance by the first party
to seek a remedy for any noncompliance or breach by the other party be deemed
to be a waiver by the first party of its rights and remedies with respect to
such noncompliance or breach.
SECTION 12.7 NO THIRD-PARTY BENEFICIARIES. Except as otherwise
expressly provided for in this Agreement, nothing herein, expressed or implied,
is intended or shall be construed to confer upon or give to any person, firm,
corporation or legal entity, other than the parties hereto, any rights,
remedies or other benefits under or by reason of this Agreement.
SECTION 12.8 COUNTERPARTS. This Agreement may be executed simultaneously
in multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
SECTION 12.9 GENDER. Whenever the context requires, words used in the
singular shall be construed to mean or include the plural and vice versa, and
pronouns of any gender shall be deemed to include and designate the masculine,
feminine or neuter gender.
SECTION 12.10 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
SECTION 12.11 REMEDIES OF TSSI. ZYCAD agrees that the Assets are unique
and not otherwise readily available to TSSI. Accordingly, ZYCAD acknowledges
that, in addition to all
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other remedies to which TSSI is entitled, TSSI shall have the right to
enforce the terms of this Agreement by a decree of specific performance,
provided TSSI is not in material default hereunder.
SECTION 12.12 GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of
California, as applied to contracts entered into and to be performed solely
within the state.
SECTION 12.13 COOPERATION AND RECORDS RETENTION. ZYCAD and TSSI shall
(i) each provide the other with such assistance as may reasonably be requested
by them in connection with the preparation of any Tax return, statement,
report, form or other document (hereinafter collectively a "Tax Return"), or in
connection with any audit or other examination by any taxing authority or any
judicial or administrative proceedings relating to liability for Taxes, (ii)
each retain and provide the other, with any records or other information which
may be relevant to any such Tax Return, audit or examination, proceeding or
determination, and (iii) each provide the other with any final determination of
any such audit or examination, proceeding or determination that affects any
amount required to be shown on any Tax Return of the other for any period.
Without limiting the generality of the foregoing, ZYCAD and TSSI shall retain,
until the applicable statute of limitations (including any extensions) have
expired, copies of all Tax Returns, supporting work schedules and other records
or information which may be relevant to such Tax Returns for all tax periods or
portions thereof ending before or including the date of Closing and shall not
destroy or otherwise dispose of any such records without first providing the
other party with a reasonable opportunity to review and copy the same. TSSI
shall keep the original copies of the records at its facilities in California
and elsewhere, if applicable, and, at ZYCAD's expense, shall provide copies of
the Records to ZYCAD upon ZYCAD's request.
SECTION 12.14 OTHER REMEDIES. Any and all remedies herein expressly
conferred upon a party will be deemed cumulative with and not exclusive of any
other remedy conferred hereby, or by law or equity upon such party, and the
exercise by a party of any one remedy will not preclude the exercise of any
other remedy. other than equitable remedies available to any party or claims
based on fraud, Article X hereto shall be the sole remedy of any party hereto
for breaches of representations, warranties, covenants and agreements set forth
in this Agreement.
(This space left intentionally blank)
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SECTION 12.15 SCHEDULE LIST. The following schedules are incorporated
into this Agreement by Reference:
Schedule 1 List of Assets
Schedule 1.1 Equipment
Schedule 1.2 All Software Modules solely developed by ZYCAD or ATTEST
Schedule 1.3 All Software Modules substantially modified (greater or
equal to 20% new code) from ExperTest Modules by ZYCAD or
ATTEST
Schedule 1.4 All Software Modules Substantially the same (less than 20%
new code) as ExperTest Modules
Schedule 1.5 All Other Software Modules
Schedule 1.6 Registered Trademarks
Schedule 1.7 Unregistered Trademarks
Schedule 1.8 Technical Documentation and Manuals for TDX
Schedule 2 List of Assigned Contracts
Schedule 3 Assumed Obligations
Schedule 3.1 TDX Price List
Schedule 3.2 List of Product Maintenance Contracts
Schedule 4 TDX Fault and Test Customer List
Schedule 5 Employee List
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
TEST SYSTEMS STRATEGY, INC.
By: /s/ Illegible
------------------------------------
Title: CHAIRMAN
ZYCAD CORPORATION
By: /s/ Illegible
------------------------------------
Title: President/CEO
ATTEST SOFTWARE, INC.
By: /s/ Illegible
------------------------------------
Title: Corporate Secretary
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EXHIBIT 20.02
[LETTERHEAD]
CONTACT INFORMATION: FOR IMMEDIATE RELEASE
Charleen Locke
Zycad Corporation
(510) 623-4451
[email protected]
ZYCAD ANNOUNCES SALE OF VERIFICATION BUSINESS ASSETS
FREMONT, CALIF.-- AUGUST 21, 1997 -- Zycad Corporation announced today that it
has sold the assets of its verification business to IKOS Systems, Inc. and
Credence Systems Corporation. IKOS Systems purchased the hardware Paradigm XP
fault technology in a transaction valued at $3 million as discussed in a joint
press release made by the companies today. Credence Systems Corporation
purchased the Zycad software fault and test products known as the TDX product
line, for an undisclosed sum of cash. Both transactions have been consummated.
According to Phillips W. Smith, Zycad's president and chief executive officer,
"With the completion of these two transactions, Zycad Corporation is no longer
in the design verification business. The current maintenance and support
business is expected to be transitioned to a new company, Zycad TMG, during the
current quarter. Following that transition Zycad will change its corporate
name to GateField Corporation. GateField Corporation will now put its total
corporate energy and focus on further penetrating the programmable ASIC
business with their market leading ProASIC family of products."
Forward-looking statements in this release are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that such forward-looking statements involve risks and
uncertainties including, without limitation, continued acceptance of the
company's products, increased levels of competition, new product introductions
and technological changes, the Company's dependence upon third party suppliers,
intellectual property rights and other risks detailed from time-to-time in the
Company's periodic reports filed with the Securities and Exchange Commission.
ZYCAD CORPORATION (OTC:ZCAD) formed GATEFIELD in August 1993 and developed
the revolutionary, patented flash-based FPGA technology and architecture upon
which its ProASIC family of high gate count, non-volatile reprogrammable
products are built. Headquarters is based at 47100 Bayside Parkway, Fremont,
CA 94538-9942. Call 800-243-7286 or 510-623-4400 or access world-wide-web at
http://www.zycad.com or http://www.gatefield.com.
# # #
Zycad Corporation is a registered trademark and GateField and ProASIC are
trademarks of Zycad Corporation. All other trademarks are held by their
respective owners.
<PAGE>
EXHIBIT 20.03
[ZYCAD LETTERHEAD]
ZYCAD
PRESS
RELEASE
CONTACT INFORMATION: FOR IMMEDIATE RELEASE
Charleen Locke
Zycad Corporation
(510) 623-4451
[email protected]
ZYCAD ANNOUNCES REDEMPTION OF ALL CONVERTIBLE PREFERRED SHARES
FREMONT, CALIF. -- AUGUST 25, 1997 -- Zycad Corporation announced today that
all the convertible debentures issued in May, 1996 (see press release dated
May 24, 1996) have been fully converted. Zycad has also completed the
redemption of all the outstanding shares of convertible preferred stock that
were issued in May, 1997.
"All of the company's convertible debentures and preferred stock have been
either converted or paid in full," stated Phillips W. Smith, president and
chief executive officer of Zycad Corporation. "The convertible preferred
stock has created an "overhang" on Zycad common stock due to the multiple
past conversions by the convertible preferred shareholders. The redemption of
these preferred shares will eliminate that overhang situation. Zycad
currently has approximately 35 million shares of common stock outstanding."
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risks
and uncertainties including, without limitation, continued acceptance of the
company's products, increased levels of competition, new product
introductions and technological changes, the Company's dependence upon third
party suppliers, intellectual property rights and other risks detailed from
time-to-time in the Company's periodic reports filed with the Securities and
Exchange Commission.
ZYCAD CORPORATION (OTC:ZCAD) formed GATEFIELD in August 1993 and developed
the revolutionary, patented flash-based FPGA technology and architecture upon
which its ProASIC family of high gate count, non-volatile reprogrammable
products are built. Headquarters is based at 47100 Bayside Parkway, Fremont,
CA 94538-9942. Call 800-243-7286 or 510-623-4400 or access world-wide-web at
http://www.zycad.com or http://www.gatefield.com.
###
Zycad Corporation is a registered trademark and Gatefield and ProASIC are
trademarks of Zycad Corporation. All other trademarks are held by their
respective owners.
