<PAGE>
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 7, 1997
AVANT! CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-25864 94-3133226
-------- ------- ----------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
46871 Bayside Parkway, Fremont, California 94538
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (510) 413-8000
<PAGE>
ITEM 5. OTHER EVENTS
On September 7, 1997, Avant! Corporation, a Delaware corporation
("Avant!") entered into an Agreement and Plan of Reorganization, by and among
the Registrant, Cardinal Merger Corporation, a California corporation and
wholly-owned subsidiary of Avant! ("Merger Sub") and Technology Modeling
Associates, Inc., a California corporation ("TMAI"). Upon the closing of the
merger, Merger Sub shall be merged with and into TMAI (the "Merger"), with TMAI
surviving the Merger and becoming a wholly-owned subsidiary of Avant!.
ITEM 7. EXHIBITS
Exhibit
Number Description
------- -----------
2.1 Agreement and Plan of Reorganization, dated
September 7, 1997, by and among Avant!, Merger Sub
and TMAI.
99.1 Press Release, dated September 8, 1997, announcing
the signing of the Agreement and Plan of
Reorganization.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Avant! Corporation
Date: September 10, 1997 /s/ John P. Huyett
----------------------------------------
John P. Huyett
Vice President of Finance, Treasurer and
Principal Accounting Officer
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
AVANT! CORPORATION,
CARDINAL MERGER CORPORATION
AND
TECHNOLOGY MODELING ASSOCIATES, INC.
SEPTEMBER 7, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing, Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effect of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Articles of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . 2
1.5 Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.8 Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 No Further Ownership Rights in TMAI Common Stock. . . . . . . . . . . . . 5
1.10 Lost, Stolen or Destroyed Certificates . . . . . . . . . . . . . . . . . 6
1.11 Tax and Accounting Consequences. . . . . . . . . . . . . . . . . . . . . 6
1.12 Taking of Necessary Action; Further Action . . . . . . . . . . . . . . . 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF TMAI . . . . . . . . . . . . . . 6
2.1 Organization, Standing and Power. . . . . . . . . . . . . . . . . . . . . 7
2.2 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 SEC Documents, Financial Statements . . . . . . . . . . . . . . . . . . . 9
2.5 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . .10
2.6 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . .11
2.7 Permits and Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . .11
2.8 Properties and Contracts. . . . . . . . . . . . . . . . . . . . . . . . .11
2.9 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
2.10 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . .12
2.11 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . .14
2.12 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
2.13 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . .15
2.14 Certain Agreements Affected by the Merger. . . . . . . . . . . . . . . .17
2.15 Brokers' and Finders' Fees . . . . . . . . . . . . . . . . . . . . . . .17
2.16 Opinion of TMAI Financial Advisor. . . . . . . . . . . . . . . . . . . .17
2.17 Registration Statement; Proxy Statement/Prospectus . . . . . . . . . . .17
ARTICLE III REPRESENTATIONS AND WARRANTIES OF AVANT! AND MERGER SUB . . . . .18
3.1 Organization, Standing and Power. . . . . . . . . . . . . . . . . . . . .18
3.2 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
3.4 SEC Documents; Financial Statements . . . . . . . . . . . . . . . . . . .20
3.5 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . .21
3.6 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
i
<PAGE>
3.7 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . .21
3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
3.9 Registration Statement; Proxy Statement/Prospectus. . . . . . . . . . . .22
3.10 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . .23
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME. . . . . . . . . . . . . . . .23
4.1 Conduct of Business of TMAI . . . . . . . . . . . . . . . . . . . . . . .23
4.2 Covenants of TMAI . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
4.4 Other Offers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
4.5 Avant! Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
ARTICLE V ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . .28
5.1 Proxy Statement/Prospectus; Registration Statement. . . . . . . . . . . .28
5.2 Meeting of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . .28
5.3 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . .29
5.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
5.5 Public Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
5.6 Consents; Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . .29
5.7 Pooling Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
5.8 Affiliates Agreements . . . . . . . . . . . . . . . . . . . . . . . . . .30
5.9 FIRPTA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.10 Continuity of Interest Certificates. . . . . . . . . . . . . . . . . . .31
5.11 Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.12 Blue Sky Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.13 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . .32
5.14 Form S-8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
5.15 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
5.16 Listing of Additional Shares . . . . . . . . . . . . . . . . . . . . . .35
5.17 Pooling Letters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
5.18 Best Efforts and Further Assurances. . . . . . . . . . . . . . . . . . .35
5.19 Notification of Certain Matters. . . . . . . . . . . . . . . . . . . . .35
5.20 Shareholder Agreement. . . . . . . . . . . . . . . . . . . . . . . . . .35
5.21 HSR Act Filings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
5.22 Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
5.23 Management of TCAD Division. . . . . . . . . . . . . . . . . . . . . . .36
ARTICLE VI CONDITIONS TO THE MERGER . . . . . . . . . . . . . . . . . . . . .36
6.1 Conditions to Obligations of Each Party to Effect the Merger. . . . . . .36
6.2 Additional Conditions to Obligations of TMAI. . . . . . . . . . . . . . .37
6.3 Additional Conditions to the Obligations of Avant! and Merger Sub . . . .38
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . .40
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . .41
7.3 Expenses and Termination Fees . . . . . . . . . . . . . . . . . . . . . .41
7.4 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
ii
<PAGE>
7.5 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
ARTICLE VIII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . .43
8.1 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
8.3 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
8.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
8.5 Entire Agreement; Nonassignability; Parties in Interest . . . . . . . . .44
8.6 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
8.7 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . .44
8.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
8.9 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . .45
EXHIBITS
EXHIBIT A-1 TMAI Affiliates Agreement
EXHIBIT A-2 Avant! Affiliates Agreement
EXHIBIT B Shareholder Agreement
EXHIBIT C Continuity of Interest Certificate
iii
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
and entered into as of September 7, 1997, by and among Avant! Corporation, a
Delaware corporation ("Avant!"), Cardinal Merger Corporation, a California
corporation ("Merger Sub") and wholly owned subsidiary of Avant! and Technology
Modeling Associates, Inc., a California corporation ("TMAI").
RECITALS
A. The Boards of Directors of TMAI, Avant! and Merger Sub believe it
is in the best interests of their respective corporations and the stockholders
of their respective corporations that TMAI and Merger Sub combine into a single
company through the statutory merger of Merger Sub with and into TMAI (the
"Merger") and, in furtherance thereof, have approved the Merger.
B. In the Merger, among other things, the outstanding shares of TMAI
Common Stock, no par value ("TMAI Common Stock"), shall be converted into shares
of Avant! Common Stock, $.0001 par value ("Avant! Common Stock"), at the rate
set forth herein.
C. TMAI, Avant! and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
D. The parties intend, by executing this Agreement, to adopt a plan
of reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code"), and to cause the Merger to qualify as a
reorganization under the provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Code.
E. The parties intend for the Merger to be accounted for as a
pooling of interests.
F. Concurrent with the execution of this Agreement and as an
inducement to Avant! and Merger Sub to enter into this Agreement, Roy E. Jewell,
Bennet Weintraub, Lung Chu, Jue-Hsien Chern, David M. Lee, Robert W. Dutton,
William E. Drobish, Louis A. Delmonico and Ronald A. Rohrer (the "Shareholders")
who are officers and directors of TMAI, have on the date hereof entered into an
agreement to vote the shares of TMAI's Common Stock owned by such persons to
approve the Merger.
NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, the parties
agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time (as defined in Section 1.2)
and subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the
<PAGE>
California General Corporation Law ("California Law"), Merger Sub shall be
merged with and into TMAI, the separate corporate existence of Merger Sub shall
cease and TMAI shall continue as the surviving corporation. TMAI as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
1.2 CLOSING; EFFECTIVE TIME. The closing of the transactions
contemplated hereby (the "Closing") shall take place as soon as practicable
after the satisfaction or waiver of each of the conditions set forth in
Article VI hereof or at such other time as the parties hereto agree (the date on
which the Closing shall occur, the "Closing Date" or the "Effective Date"). The
Closing shall take place at the offices of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP, 155 Constitution Drive, Menlo Park, California, or at
such other location as the parties hereto agree. In connection with the
Closing, the parties hereto shall cause the Merger to be consummated by filing
an Agreement of Merger, in form reasonably satisfactory to Avant! and TMAI (the
"Agreement of Merger"), with the Secretary of State of the State of California,
in accordance with the relevant provisions of California Law (the time of such
filing being the "Effective Time").
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Agreement of Merger and the
applicable provisions of California Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of TMAI and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of TMAI and Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
1.4 ARTICLES OF INCORPORATION; BYLAWS.
(a) At the Effective Time, the Articles of Incorporation of
Merger Sub, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation until thereafter amended;
provided, however, that Article I of the Articles of Incorporation of the
Surviving Corporation shall be amended to read as follows: "The name of the
corporation is TMAI."
(b) The Bylaws of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended.
1.5 DIRECTORS AND OFFICERS. At the Effective Time, the directors of
Merger Sub shall be the initial directors of the Surviving Corporation and the
officers of Merger Sub shall be the initial officers of the Surviving
Corporation, until their respective successors are duly elected or appointed and
qualified.
1.5 EFFECT ON CAPITAL STOCK. By virtue of the Merger and without any
action on the part of Merger Sub, Avant!, TMAI or the holders of any of the
following securities:
(a) CONVERSION OF TMAI COMMON STOCK. At the Effective Time,
each share of TMAI Common Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of TMAI Common Stock to be canceled
pursuant to Section 1.6(b) and any Dissenting Shares (as defined in Section 1.7
below)) will be canceled and extinguished and will be converted automatically
into the right to receive a fraction of a share of Avant! Common
2
<PAGE>
Stock (the "Exchange Ratio"), the numerator of which is equal to (i) $17.00, and
the denominator of which is equal to (ii) the average of the per share closing
prices of Avant! Common Stock as quoted on the Nasdaq National Market for the
ten (10) consecutive trading days ending three (3) business days prior to the
Effective Date of the Merger (the "Average Nasdaq Per Share Price").
Notwithstanding anything to the contrary set forth herein, in the event that the
Average Nasdaq Per Share Price is greater than $35.678 (the "Maximum Price"),
then the Exchange Ratio shall be 0.476484, and in the event that the Average
Nasdaq Per Share Price is less than $25.678 (the "Minimum Price"), then the
Exchange Ratio shall be 0.662045.
(b) CANCELLATION OF TMAI COMMON STOCK OWNED BY AVANT! OR TMAI.
At the Effective Time, all shares of TMAI Common Stock that are owned by TMAI
and each share of TMAI Common Stock owned by Avant! or any direct or indirect
wholly owned subsidiary of Avant! or of TMAI immediately prior to the Effective
Time shall be canceled and extinguished without any conversion thereof.
(c) TMAI STOCK PLANS. At the Effective Time, the 1996 Equity
Incentive Plan, the 1995 Stock Option Plan and the 1989 Stock Option Plan of
TMAI, and all options to purchase TMAI Common Stock then outstanding under such
plans, shall be assumed by Avant! in accordance with Section 5.13. The TMAI
1989 Stock Option Plan, 1995 Stock Option Plan and 1996 Equity Incentive Plan
are sometimes collectively referred to herein as the "TMAI Stock Plans."
(d) TMAI EMPLOYEE STOCK PURCHASE PLAN. At the Effective Time,
the TMAI 1996 Employee Stock Purchase Plan (the "TMAI ESPP") and all of the
existing rights and obligations of TMAI pursuant to the outstanding subscription
rights thereunder shall be assumed by Avant! in accordance with Section 5.13.
(e) CAPITAL STOCK OF MERGER SUB. At the Effective Time, each
share of Common Stock, no par value, of Merger Sub ("Merger Sub Common Stock"),
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one (1) validly issued, fully paid and
nonassessable share of Common Stock, no par value, of the Surviving Corporation.
Each stock certificate of Merger Sub evidencing ownership of any such shares
shall continue to evidence ownership of such shares of capital stock of the
Surviving Corporation.
(f) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
adjusted to reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities convertible into
Avant! Common Stock or TMAI Common Stock), reorganization, recapitalization or
other like change with respect to Avant! Common Stock or TMAI Common Stock
occurring after the date hereof and prior to the Effective Time.
(g) FRACTIONAL SHARES. No fraction of a share of Avant! Common
Stock will be issued, but in lieu thereof each holder of shares of TMAI Common
Stock who would otherwise be entitled to a fraction of a share of Avant! Common
Stock (after aggregating all fractional shares of Avant! Common Stock to be
received by such holder) shall receive from Avant! an amount of cash (rounded to
the nearest whole cent) equal to the product of (i) such fraction, multiplied by
(ii) the Average Nasdaq Per Share Price.
3
<PAGE>
1.7 DISSENTERS' RIGHTS. If, as of the Effective Time, holders of
TMAI Common Stock have complied with all requirements for perfecting and not
forfeited dissenters' rights ("Dissenting Shares") in connection with the Merger
under California Law, such Dissenting Shares shall not be converted into Avant!
Common Stock but instead shall be converted into the right to receive such
consideration as may be determined to be due with respect to such Dissenting
Shares pursuant to the California Law. TMAI shall give Avant! prompt notice of
any demand received by TMAI to require TMAI to pay the value of any Dissenting
Shares of TMAI Common Stock, and Avant! shall have the right to participate in
all negotiations and proceedings with respect to such demand. TMAI agrees that,
except with the prior written consent of Avant!, it will not make any payment
with respect to, or settle or offer to settle, any such purchase demand. Each
holder of Dissenting Shares (a "Dissenting Shareholder") who, pursuant to the
provisions of California Law, becomes entitled to payment of the value of shares
of TMAI Common Stock shall receive payment therefor (but only after the value
therefor shall have been agreed upon or finally determined pursuant to such
provisions). In the event of a legal obligation, after the Effective Time, to
deliver shares of Avant! Common Stock to any holder of shares of TMAI Common
Stock who shall have failed to make an effective payment demand or shall have
lost his or her status as a Dissenting Shareholder, Avant! shall issue and
deliver, upon surrender by such Dissenting Shareholder of his or her certificate
or certificates representing shares of TMAI Common Stock, the shares of Avant!
Common Stock to which such Dissenting Shareholder is then entitled under
Section 1.6(a) and cash in lieu of fractional shares pursuant to Section 1.6(g).
1.8 SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Harris Trust Company of California shall
act as exchange agent (the "Exchange Agent") in the Merger.
(b) AVANT! TO PROVIDE COMMON STOCK AND CASH. As soon as
practicable after the Effective Time, but no later than two (2) business days
thereafter, Avant! shall make available to the Exchange Agent for exchange in
accordance with this Article I, through such reasonable procedures as Avant! may
adopt, (i) the shares of Avant! Common Stock issuable pursuant to Section 1.6(a)
in exchange for shares of TMAI Common Stock outstanding immediately prior to the
Effective Time and (ii) cash in an amount sufficient to permit payment of cash
in lieu of fractional shares pursuant to Section 1.6(g).
(c) EXCHANGE PROCEDURES. As soon as practicable after the
Effective Time, but no later than five (5) business days thereafter, the
Surviving Corporation shall cause to be mailed to each holder of record of a
certificate or certificates (the "Certificates") which immediately prior to the
Effective Time represented outstanding shares of TMAI Common Stock, whose shares
were converted into the right to receive shares of Avant! Common Stock (and cash
in lieu of fractional shares) pursuant to Section 1.6, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon receipt of the
Certificates by the Exchange Agent, and shall be in such form and have such
other provisions as Avant! may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for certificates
representing shares of Avant! Common Stock (and cash in lieu of fractional
shares). Upon surrender of a Certificate for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by
4
<PAGE>
Avant!, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, the holder of record of
such Certificate shall be entitled to receive in exchange therefor a certificate
representing the number of whole shares of Avant! Common Stock and payment in
lieu of fractional shares which such holder of record has the right to receive
pursuant to Section 1.6, and the Certificate so surrendered shall forthwith be
canceled. Until so surrendered, each outstanding Certificate that, prior to the
Effective Time, represented shares of TMAI Common Stock will be deemed from and
after the Effective Time, for all corporate purposes, other than as provided in
subsection (d) below, to evidence only the ownership of the number of full
shares of Avant! Common Stock into which such shares of TMAI Common Stock shall
have been so converted and the right to receive an amount in cash in lieu of the
issuance of any fractional shares in accordance with Section 1.6.
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to Avant! Common Stock with a
record date after the Effective Time will be paid to the holder of record of any
unsurrendered Certificate with respect to the shares of Avant! Common Stock
represented thereby until the holder of record of such Certificate shall
surrender such Certificate. Subject to applicable law, following surrender of
any such Certificate, there shall be paid to the record holder of the
certificates representing whole shares of Avant! Common Stock issued in exchange
therefor, without interest, at the time of such surrender, the amount of any
such dividends or other distributions with a record date after the Effective
Time theretofore payable (but for the provisions of this Section 1.8(d)) with
respect to such shares of Avant! Common Stock.
(e) TRANSFERS OF OWNERSHIP. If any certificate for shares of
Avant! Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Avant! or any agent designated by it
any transfer or other taxes required by reason of the issuance of a certificate
for shares of Avant! Common Stock in any name other than that of the registered
holder of the Certificate surrendered, or established to the satisfaction of
Avant! or any agent designated by it that such tax has been paid or is not
payable.
(f) NO LIABILITY. Notwithstanding anything to the contrary in
this Section 1.8, none of the Exchange Agent, the Surviving Corporation or any
party hereto shall be liable to any person for any amount properly paid to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
1.9 NO FURTHER OWNERSHIP RIGHTS IN TMAI COMMON STOCK. All shares of
Avant! Common Stock issued upon the surrender for exchange of shares of TMAI
Common Stock in accordance with the terms hereof (including any cash paid in
lieu of fractional shares) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of TMAI Common Stock, and
following the Effective Time there shall be no further registration of transfers
on the records of the Surviving Corporation of shares of TMAI Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article I.
5
<PAGE>
1.10 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, such shares of Avant!
Common Stock (and cash in lieu of fractional shares) as may be required pursuant
to Section 1.6; provided, however, that the Exchange Agent may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificates to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim that may be made
against Avant!, the Surviving Corporation or the Exchange Agent with respect to
the Certificates alleged to have been lost, stolen or destroyed.
1.11 TAX AND ACCOUNTING CONSEQUENCES. It is intended by the parties
hereto that the Merger shall (i) constitute a reorganization within the meaning
of Section 368 of the Code and (ii) qualify for accounting treatment as a
pooling of interests. No party shall take any action which, to such party's
knowledge, would cause the Merger to fail to qualify as a reorganization within
the meaning of Section 368 of the Code or to fail to qualify for accounting
treatment as a pooling of interest.
1.12 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of TMAI and Merger Sub, the officers and directors of TMAI
and Merger Sub are fully authorized in the name of their respective corporations
or otherwise to take, and will take, all such lawful and necessary action, so
long as such action is not inconsistent with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TMAI
In this Agreement, any reference to any event, change, condition or
effect being "material" with respect to any entity or group of entities means
any material event, change, condition or effect related to the condition
(financial or otherwise), properties, assets (including intangible assets),
liabilities, business, operations or results of operations of such entity or
group of entities. In this Agreement, any reference to a "Material Adverse
Effect" with respect to any entity or group of entities means any event, change
or effect that is materially adverse to the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations or results of operations of such entity and its subsidiaries, taken
as a whole; PROVIDED, HOWEVER, that (i) any adverse change, event or effect that
is demonstrated to be primarily caused by conditions affecting the United States
economy generally or the economy of any nation or region in which such entity or
any of its subsidiaries conducts business that is material to the business of
such entity and its subsidiaries, taken as a whole, shall not be taken into
account in determining whether there has been or would be a "Material Adverse
Effect" on or with respect to such entity, (ii) any adverse change, event or
effect that is demonstrated to be primarily caused by conditions generally
affecting the integrated circuit design automation software industry shall not
be taken into account in determining whether there has been or would be a
"Material Adverse Effect" on or with respect to such entity, (iii) any adverse
change, event or effect that is demonstrated to be primarily caused by the
announcement or pendency of the
6
<PAGE>
Merger shall not be taken into account in determining whether there has been or
would be a "Material Adverse Effect" on or with respect to such entity, and (iv)
any adverse change in the stock price of an entity as quoted on the Nasdaq
National Market shall not be taken into account in determining whether there has
been or would be a "Material Adverse Effect" on or with respect to such entity.
In this Agreement, any reference to a party's "knowledge" means such
party's actual knowledge after due and diligent inquiry of officers, directors
and other employees of such party and its subsidiaries reasonably believed to
have knowledge of such matters.
Except as disclosed in a document of even date herewith and delivered
by TMAI to Avant! prior to the execution and delivery of this Agreement and
referring to the representations and warranties in this Agreement (the "TMAI
Disclosure Schedule"), TMAI represents and warrants to Avant! and Merger Sub as
follows:
2.1 ORGANIZATION, STANDING AND POWER. Each of TMAI and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each of TMAI and
its subsidiaries has the corporate power to own its properties and to carry on
its business as now being conducted and as proposed to be conducted and is duly
qualified to do business and is in good standing in each jurisdiction in which
the failure to be so qualified and in good standing would have a Material
Adverse Effect on TMAI. TMAI has delivered a true and correct copy of the
Articles of Incorporation (referred to herein as TMAI's "Articles of
Incorporation") and Bylaws or other charter documents, as applicable, of TMAI
and each of its subsidiaries, each as amended to date, to Avant!. Neither TMAI
nor any of its subsidiaries is in violation of any of the provisions of its
Articles of Incorporation or Bylaws or equivalent organizational documents.
TMAI is the owner of all outstanding shares of capital stock of each of its
subsidiaries and all such shares are duly authorized, validly issued, fully paid
and nonassessable. All of the outstanding shares of capital stock of each such
subsidiary are owned by TMAI free and clear of all liens, charges, claims or
encumbrances or rights of others. There are no outstanding subscriptions,
options, warrants, puts, calls, rights, exchangeable or convertible securities
or other commitments or agreements of any character relating to the issued or
unissued capital stock or other securities of any such subsidiary, or otherwise
obligating TMAI or any such subsidiary to issue, transfer, sell, purchase,
redeem or otherwise acquire any such securities. Except as disclosed in the
TMAI SEC Documents (as defined in Section 2.4), TMAI does not directly or
indirectly own any equity or similar interest in, or any interest convertible or
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
2.2 CAPITAL STRUCTURE. The authorized capital stock of TMAI consists
of 25,000,000 shares of Common Stock, no par value, and 4,000,000 shares of
Preferred Stock, no par value, of which there were issued and outstanding as of
the close of business on August 31, 1997, 8,089,027 shares of TMAI Common Stock
and no shares of Preferred Stock. There are no other outstanding shares of
capital stock or voting securities of TMAI and no outstanding commitments to
issue any shares of capital stock or voting securities of TMAI after August 31,
1997 other than pursuant to (i) the exercise of options under the TMAI Stock
Plans and the 1996 Directors Stock Option Plan of TMAI (the "Directors Plan") or
(ii) the exercise of subscription
7
<PAGE>
rights outstanding as of such date under the TMAI ESPP. All outstanding shares
of TMAI Common Stock are duly authorized, validly issued, fully paid and non-
assessable and are free of any liens or encumbrances, other than any liens or
encumbrances created by or imposed upon the holders thereof, and are not subject
to preemptive rights or rights of first refusal created by statute, the Articles
of Incorporation or Bylaws of TMAI or any agreement to which TMAI is a party or
by which it is bound. As of the close of business on August 31, 1997, TMAI had
reserved (i) 1,500,000 shares of TMAI Common Stock for issuance to employees
pursuant to the 1996 TMAI Equity Incentive Plan, of which no shares have been
issued pursuant to option exercises and 800,200 shares are subject to
outstanding, unexercised options, (ii) 200,000 shares of TMAI Common Stock for
issuance to employees pursuant to the TMAI ESPP, of which 56,799 shares have
been issued and no shares remain purchasable under outstanding, unexercised
subscription rights and no more than 143,201 shares are subject to outstanding
subscriptions, (iii) 229,925 shares of TMAI Common Stock for issuance to
employees pursuant to the TMAI 1989 Stock Option Plan, of which no shares have
been issued pursuant to option exercises and no shares are subject to
outstanding, unexercised options, (iv) 525,525 shares of TMAI Common Stock for
issuance to employees pursuant to the TMAI 1995 Stock Option Plan, of which no
shares have been issued pursuant to option exercises and no shares are subject
to outstanding, unexercised options, and (v) 150,000 shares of TMAI Common Stock
for issuance to board members pursuant to the Directors Plan, of which no shares
have been issued pursuant to option exercises and 15, 000 shares are subject to
outstanding, unexercised options. No Stock Bonuses, Restricted Stock Awards or
other stock-based awards (as all of such terms are defined in the 1996 TMAI
Equity Incentive Plan) have been issued prior to the date hereof under the 1996
TMAI Equity Incentive Plan. Since August 31, 1997, TMAI has not (i) issued or
granted additional options under any of the TMAI Stock Plans or the Directors
Plan or (ii) accepted any additional Common Stock subscriptions or otherwise
granted any additional purchase rights under the TMAI ESPP, except as set forth
in the TMAI Disclosure Schedule. Except for the rights created pursuant to this
Agreement and as disclosed in this Section 2.2, there are no other options,
warrants, calls, rights, commitments or agreements of any character to which
TMAI is a party or by which it is bound obligating TMAI to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of capital stock of TMAI or obligating TMAI to grant,
extend, accelerate the vesting of, change the price of, or otherwise amend or
enter into any such option, warrant, call, right, commitment or agreement.
There are no contracts, commitments or agreements relating to voting,
registration, purchase or sale of TMAI's capital stock (i) between or among TMAI
and any of its shareholders or (ii) to TMAI's knowledge, between or among any of
TMAI's shareholders other than the Shareholder Agreements entered into pursuant
hereto. The terms of the TMAI Stock Plans permit the assumption or substitution
of options to purchase Avant! Common Stock as provided in this Agreement,
without the consent or approval of the holders of such securities, the TMAI
shareholders, or otherwise and without any acceleration of the exercise schedule
or vesting provisions in effect for those options. No benefits under any of
such TMAI Stock Plans will accelerate in connection with the Merger. No other
outstanding options, whether under the TMAI Stock Plans or otherwise, will be
accelerated in connection with the Merger, except options outstanding under the
Directors Plan. The most recent two-year offering period (as contemplated by
the TMAI ESPP) commenced under the TMAI ESPP on August 1, 1997, and except for
the subscriptions to acquire no more than 143,201 shares of TMAI Common Stock
under the TMAI ESPP, there are no other subscriptions or purchase rights or
options outstanding
8
<PAGE>
under the TMAI ESPP. True and complete copies of all agreements and instruments
relating to or issued under the TMAI Stock Plans, the Directors Plan and the
TMAI ESPP have been made available to Avant! and such agreements and instruments
have not been amended, modified or supplemented, and there are no agreements to
amend, modify or supplement such agreements or instruments in any case from the
form made available to Avant!. TMAI will update the TMAI Disclosure Schedule to
reflect outstanding shares and options as of the Effective Time.
2.3 AUTHORITY. TMAI has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of TMAI, subject only to the approval of the Merger
by TMAI's shareholders as contemplated by Section 6.1(a). This Agreement has
been duly executed and delivered by TMAI and, subject to receipt of such
shareholder approval, constitutes the valid and binding obligation of TMAI
enforceable against TMAI in accordance with its terms. The Board of Directors
of TMAI has unanimously approved this Agreement and the transactions
contemplated hereby. The execution and delivery of this Agreement by TMAI does
not, and, subject to receipt of shareholder approval and the consents
contemplated by Section 2.3 of the TMAI Disclosure Schedule, the consummation of
the transactions contemplated hereby will not, conflict with, or result in any
violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any material benefit under (i) any provision of the
Articles of Incorporation or Bylaws of TMAI or any of its subsidiaries, or
(ii) any material mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to TMAI or any of its
subsidiaries or any of their properties or assets, except where such conflict,
violation, default, termination, cancellation or acceleration with respect to
the foregoing provisions of (ii) would not have had and would not reasonably be
expected to have a Material Adverse Effect on TMAI. Except as set forth in the
TMAI Disclosure Schedule, no consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality ("Governmental
Entity") is required by or with respect to TMAI or any of its subsidiaries in
connection with the execution and delivery of this Agreement, or the
consummation of the transactions contemplated hereby and thereby, except for
(i) the filing of the Agreement of Merger as provided in Section 1.2; (ii) the
filing with the Securities and Exchange Commission (the "SEC") and the National
Association of Securities Dealers, Inc. (the "NASD") of the Proxy Statement (as
defined in Section 2.17) relating to the TMAI Shareholders' Meeting (as defined
in Section 2.17) and any clearance thereof by the SEC (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws and the securities laws
of any foreign country; (iv) filings required to be made by each of TMAI and
Avant! under the HSR Act (as defined in Section 5.21 below); and (v) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not have a Material Adverse Effect on TMAI and would not
prevent, or materially alter or delay any of the transactions contemplated by
this Agreement.
2.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. TMAI has furnished to
Avant! a true and complete copy of each statement, report, registration
statement (together with the prospectus in the form filed pursuant to
Rule 424(b) of the Securities Act of 1933, as amended
9
<PAGE>
(the "Securities Act"), if any), definitive proxy statement and other filings
filed with the SEC by TMAI on or after September 20, 1996, and, prior to the
Effective Time, TMAI will have furnished Avant! with true and complete copies of
any additional documents filed with the SEC by TMAI prior to the Effective Time
(collectively, the "TMAI SEC Documents"). In addition, TMAI has made available
to Avant! all exhibits to the TMAI SEC Documents filed prior to the date hereof,
and will promptly make available to Avant! all exhibits to any additional TMAI
SEC Documents filed prior to the Effective Time. All documents required to be
filed as exhibits to the TMAI SEC Documents have been so filed. As of their
respective filing dates, or, with respect to registration statements as of their
effective dates, the TMAI SEC Documents complied in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Securities Act, and none of the TMAI SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not misleading,
except to the extent corrected, modified or superseded by a subsequently filed
TMAI SEC Document. The financial statements of TMAI, including the notes
thereto, included in the TMAI SEC Documents (the "TMAI Financial Statements"),
complied as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto as of their respective dates, and have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent throughout the periods indicated and consistent with each other
(except as may be indicated in the notes thereto). The TMAI Financial
Statements fairly present in all material respects the consolidated financial
condition and operating results of TMAI and its subsidiaries at the dates and
during the periods indicated therein (subject, in the case of unaudited
statements, to normal, recurring year-end adjustments). There has been no
change in TMAI accounting policies except as described in the notes to the TMAI
Financial Statements.
2.5 ABSENCE OF CERTAIN CHANGES. Except as set forth in the TMAI
Disclosure Schedule or in the TMAI SEC Documents, since June 30, 1997 (the "TMAI
Balance Sheet Date"), TMAI has conducted its business in the ordinary course
consistent with past practice and there has not occurred: (i) any change, event
or condition (whether or not covered by insurance) that has resulted in a
Material Adverse Effect on TMAI; (ii) any acquisition, sale or transfer of any
material asset of TMAI or any of its subsidiaries other than in the ordinary
course of business and consistent with past practice; (iii) any change in
accounting methods or practices (including any change in depreciation or
amortization policies or rates) by TMAI or any revaluation by TMAI of any of its
or any of its subsidiaries' assets; (iv) any declaration, setting aside, or
payment of a dividend or other distribution with respect to the shares of TMAI,
or any direct or indirect redemption, purchase or other acquisition by TMAI of
any of its shares of capital stock except for the repurchase at cost of unvested
shares held by TMAI employees on the termination of employment; (v) any material
contract entered into by TMAI or any of its subsidiaries, other than in the
ordinary course of business and as provided to Avant!, or any material amendment
or termination of, or default under, any material contract to which TMAI or any
of its subsidiaries is a party or by which it is bound; (vi) any action by TMAI
or, to TMAI's knowledge, any affiliate of TMAI which might reasonably be
expected to preclude the ability of Avant! to account for the business
combination to be effected by the Merger as a "pooling of interests" under
generally accepted accounting principles; (vii) any increase in the compensation
payable or to become payable by TMAI to any of its officers, directors,
consultants or employees (except for salary or rate increases granted to such
persons in the ordinary course of business and
10
<PAGE>
consistent with prior practice); (viii) any (A) grant of any severance or
termination pay to any director, officer or employee of TMAI or any of its
subsidiaries except in the ordinary course of business and consistent with past
practice, (B) entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
director, officer or employee of TMAI or any such subsidiary except in the
ordinary course of business and consistent with past practice, (C) any increase
in benefits payable under any existing severance or termination pay policies or
employment agreements, or (D) any increase in compensation, bonus or other
benefits payable to directors, officers or employees of TMAI or any such
subsidiary, in each case other than in the ordinary course of business
consistent with past practice; or (ix) any negotiation or agreement by TMAI or
any of its subsidiaries to do any of the things described in the preceding
clauses (i) through (viii) (other than negotiations with Avant! and its
representatives regarding the transactions contemplated by this Agreement). Any
agreement or obligation to provide severance or termination payments and any
employment, deferred compensation or other similar agreements and the material
terms thereof are set forth on Section 2.5 of the TMAI Disclosure Schedule.
2.6 ABSENCE OF UNDISCLOSED LIABILITIES. TMAI has no material
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet included in TMAI's Quarterly Report on Form 10-Q for the period
ended June 30, 1997 (the "TMAI Balance Sheet"); (ii) those incurred in the
ordinary course of business and not required to be set forth in the TMAI Balance
Sheet under generally accepted accounting principles; (iii) those incurred in
the ordinary course of business since the TMAI Balance Sheet Date and consistent
with past practice; and (iv) those incurred in connection with the execution and
delivery of this Agreement and the transactions contemplated hereby.
2.7 PERMITS AND LICENSES. TMAI is now the holder of all licenses,
franchises, ordinances, authorizations, permits, and certificates, domestic or
foreign (collectively, the "TMAI Licenses"), necessary to enable it to continue
to conduct its business in all material respects, as presently conducted, except
where the failure to have such TMAI Licenses, individually or in the aggregate,
would not have a Material Adverse Effect on TMAI. All of the TMAI Licenses are
in full force and effect. TMAI has no reason to believe that any Federal,
state, or local government or agency having jurisdiction will revoke, cancel,
rescind, refuse to renew in the ordinary course, or modify any of the TMAI
Licenses. There is not now pending, or, to the knowledge of TMAI, threatened
any investigation before any such Federal, state, or local governments or
agencies which, either individually or in the aggregate, would have a Material
Adverse Effect on TMAI. TMAI has conducted its business so as to comply with
all applicable laws, regulations, ordinances, and codes, domestic and foreign,
including, without limitation, laws, regulations, ordinances, and codes relating
to the protection of the environment, the failure to comply with which could
reasonably be expected to have a Material Adverse Effect on TMAI.
2.8 PROPERTIES AND CONTRACTS.
(a) TMAI owns, or is licensed to use, or leases, all property
and assets, real and personal, tangible and intangible, used in or necessary for
the conduct of its business as currently conducted, except in those cases where
the failure so to own, license or lease would not
11
<PAGE>
have a Material Adverse Effect on TMAI and except as this subsection (a) may
relate to TMAI Intellectual Property which is addressed exclusively by
Section 2.10 below.
(b) To the knowledge of TMAI, (i) all of the material contracts
of TMAI are presently valid and existing and in full force and effect, and
(ii) there is no violation or default or claim of violation or default by any
party thereto and no condition or event has occurred which with notice or lapse
of time or both would constitute a violation or default thereunder, except for
any such failure or any such violation, default, or claim, which would not have
a Material Adverse Effect on TMAI.
2.9 LITIGATION. There is no private or governmental action, suit,
proceeding, claim, arbitration or investigation pending before any agency, court
or tribunal, foreign or domestic, or, to the knowledge of TMAI, threatened
against TMAI or any of its subsidiaries or any of their respective properties or
any of their respective officers or directors (in their capacities as such)
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on TMAI or that arise out of or in any way relate to
this Agreement, the Merger or any of the transactions contemplated hereby. From
the date of this Agreement until the Effective Time, TMAI shall promptly advise
Avant! of any such action, suit, proceeding, claim, arbitration or investigation
that is commenced, or, to the knowledge of TMAI, threatened against TMAI or any
of its subsidiaries. There is no judgment, decree or order against TMAI or any
of its subsidiaries, or, to the knowledge of TMAI, any of their respective
directors or officers (in their capacities as such), that could prevent, enjoin,
alter or materially delay any of the transactions contemplated by this Agreement
or that could reasonably be expected to have a Material Adverse Effect on TMAI.
2.10 INTELLECTUAL PROPERTY.
(a) TMAI and/or its subsidiaries own, or otherwise possess
legally enforceable rights to use all patents, trademarks, trade names, service
marks, copyrights, and any applications therefor, maskworks, net lists,
schematics, technology, know-how, trade secrets, inventory, ideas, algorithms,
processes, computer software programs or applications (in source code and/or
object code form), and tangible or intangible proprietary information or
material ("TMAI Intellectual Property") that are used in the business of TMAI
and its subsidiaries as currently conducted (including with respect to products
currently under development), except to the extent that the failure to have such
rights has not had and would not reasonably be expected to have a Material
Adverse Effect on TMAI.
(b) Section 2.10 of the TMAI Disclosure Schedule lists (i) all
patents and patent applications and all material registered and unregistered
trademarks, trade names and service marks, registered copyrights, and maskworks
that are included in the TMAI Intellectual Property, in each case where such
applications have been filed by or registered in the name of TMAI or assigned to
TMAI, including the jurisdictions in which each such TMAI Intellectual Property
right has been issued or registered or in which any application for such
issuance and registration has been filed, (ii) all material licenses,
sublicenses and other agreements as to which TMAI is a party and pursuant to
which any person is authorized to use any TMAI Intellectual Property other than
end user licenses entered into with customers of TMAI in the ordinary course of
business, and (iii) all licenses, sublicenses and other agreements as to which
TMAI is a party
12
<PAGE>
and pursuant to which TMAI is authorized to use any third party patents,
trademarks or copyrights, including software ("TMAI Third Party Intellectual
Property Rights") which are incorporated in, are, or form a part of any TMAI
product that is material to its business or any TMAI product under development
that is expected to be material to its business, other than end user licenses of
commercially available products of third parties entered into in the ordinary
course of business.
(c) To the knowledge of TMAI, there is no material unauthorized
use, disclosure, infringement or misappropriation of any TMAI Intellectual
Property rights of TMAI or any of its subsidiaries, any trade secret material to
TMAI or any of its subsidiaries, or any TMAI Intellectual Property right of any
third party to the extent licensed by or through TMAI or any of its
subsidiaries, by any third party, including any employee or former employee of
TMAI or any of its subsidiaries. Neither TMAI nor any of its subsidiaries has
entered into any agreement to indemnify any other person against any charge of
infringement by any TMAI Intellectual Property, other than indemnification
provisions contained in end user licenses, distribution agreements or sales
representative agreements entered into with customers of TMAI arising in the
ordinary course of business.
(d) Neither TMAI nor any of its subsidiaries is, nor will they
be as a result of the execution and delivery of this Agreement or the
performance of their respective obligations under this Agreement, in breach of
any license, sublicense or other agreement relating to the TMAI Intellectual
Property or TMAI Third Party Intellectual Property Rights, which breach would
have a Material Adverse Effect on TMAI.
(e) To TMAI's knowledge, all patents, registered trademarks,
service marks and copyrights held by TMAI or any of its subsidiaries are valid
and subsisting. TMAI (i) has not been sued in any suit, action or proceeding
which involves a claim of infringement of any patents, trademarks, service
marks, copyrights or violation of any trade secret or other proprietary right of
any third party; (ii) has no knowledge that the manufacturing, marketing,
licensing or sale of its products infringes any patent, trademark, service mark,
copyright, trade secret or other proprietary right of any third party, which
such infringement would have a Material Adverse Effect on TMAI; and (iii) has
not brought any action, suit or proceeding for infringement of TMAI Intellectual
Property or breach of any license or agreement involving TMAI Intellectual
Property against any third party.
(f) TMAI has secured from all consultants and employees who
contributed to the creation or development of TMAI Intellectual Property valid
written assignments of the rights to such contributions that TMAI does not
already own by operation of law, the absence of which would have a Material
Adverse Effect on TMAI.
(g) TMAI has taken reasonable and practical steps to protect and
preserve the confidentiality of all TMAI Intellectual Property not otherwise
protected by patents, patent applications or copyright ("TMAI Confidential
Information"). It is TMAI's policy that all use, disclosure or appropriation of
TMAI Confidential Information owned by TMAI by or to a third party be pursuant
to the terms of a written agreement between TMAI and such third party. All use,
disclosure or appropriation of TMAI Confidential Information not owned by TMAI
has
13
<PAGE>
been pursuant to the terms of a written agreement between TMAI and the owner of
such TMAI Confidential Information, or is otherwise lawful.
2.11 ENVIRONMENTAL MATTERS. To the knowledge of TMAI, each of TMAI
and its subsidiaries is and at all times has been in compliance with all
foreign, federal, state and local laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or hazardous or
toxic materials or waste, except to the extent noncompliance with such laws has
not had and could not reasonably be expected to have a Material Adverse Effect
on TMAI.
2.12 TAXES. TMAI and each of its subsidiaries, and each member of any
consolidated, combined or unitary group for Tax purposes of which TMAI or any of
its subsidiaries is or has been a member have timely filed all Tax Returns
required to be filed by them (other than those that are not, individually or in
the aggregate, material) and have paid all Taxes shown thereon to be due. The
TMAI Financial Statements (i) fully accrue all actual and contingent liabilities
for Taxes with respect to all periods through June 30, 1997 and TMAI and each of
its subsidiaries have not and will not incur any Tax liability in excess of the
amount reflected on the TMAI Financial Statements with respect to such periods,
and (ii) properly accrue in accordance with generally accepted accounting
principles all liabilities for Taxes payable after June 30, 1997 with respect to
all transactions and events occurring on or prior to such date. No material Tax
liability since June 30, 1997 has been incurred by TMAI or its subsidiaries
other than in the ordinary course of business and adequate provision has been
made in the TMAI Financial Statements for all Taxes since that date in
accordance with generally accepted accounting principles on at least a quarterly
basis. TMAI and each of its subsidiaries have withheld and paid or will timely
pay to the applicable financial institution or Tax Authority all amounts
required to be withheld. No notice of deficiency or similar document of any Tax
Authority has been received by either TMAI or any of its subsidiaries, and there
are no liabilities for Taxes with respect to the issues that have been raised
(and are currently pending) by any Tax Authority that could, if determined
adversely to TMAI and its subsidiaries, materially and adversely affect the
liability of TMAI and its subsidiaries for Taxes. Except as disclosed in the
TMAI Disclosure Schedule, there (i) is no material claim for Taxes that is a
lien against the property of TMAI or any of its subsidiaries other than liens
for Taxes not yet due and payable, (ii) has been no notification received by
TMAI of any audit of any Tax Return of TMAI or any of its subsidiaries being
conducted, pending or threatened by a Tax Authority, and (iii) is no extension
or waiver of the statute of limitations on the assessment of any Taxes granted
by TMAI or any of its subsidiaries that is currently in effect, and (iv) is no
agreement, contract or arrangement to which TMAI or any of its subsidiaries is a
party that may result in the payment of any material amount that would not be
deductible by reason of Sections 280G or 404 of the Code. TMAI will not be
required to include any material adjustment in Taxable income for any Tax period
(or portion thereof) pursuant to Section 481 or 263A of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Merger.
Neither TMAI nor any of its subsidiaries is a party to any Tax sharing or Tax
allocation agreement nor does TMAI or any of its subsidiaries owe any amount
under any such agreement. TMAI and each of its subsidiaries are in material
compliance with all terms and conditions of any Tax exemptions or other Tax
sharing agreement or order of a foreign government applicable to them and the
consummation of the Merger shall not have any adverse effect on the continued
validity and effectiveness of any such Tax exemptions or other Tax sharing
agreement or order. For purposes of this Agreement, the following terms have
the
14
<PAGE>
following meanings: "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,
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 Governmental Entity (a "Tax 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
indemnify any other person. As used herein, "Tax Return" shall mean any return,
statement, report or form including, without limitation, estimated Tax returns
and reports, withholding Tax returns and reports and information reports and
returns required to be filed with respect to Taxes.
2.13 EMPLOYEE BENEFIT PLANS.
(a) Section 2.13 of the TMAI Disclosure Schedule lists, with
respect to TMAI, any subsidiary of TMAI and any trade or business (whether or
not incorporated) which is treated as a single employer with TMAI (an "ERISA
Affiliate") within the meaning of Section 414(b), (c), (m) or (o) of the Code,
(i) all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), (ii) each loan to
a non-officer employee in excess of $10,000, loans to officers and directors and
any stock option, stock purchase, phantom stock, stock appreciation right,
supplemental retirement, severance, sabbatical, medical, dental, vision care,
disability, employee relocation, cafeteria benefit (Code Section 125) or
dependent care (Code Section 129), life insurance or accident insurance plans,
programs or arrangements, (iii) all bonus, pension, profit sharing, savings,
deferred compensation or incentive plans, programs or arrangements, (iv) other
fringe or employee benefit plans, programs or arrangements that apply to senior
management of TMAI and that do not generally apply to all employees, and (v) any
current or former employment or executive compensation or severance agreements,
written or otherwise, as to which unsatisfied obligations of TMAI of greater
than $10,000 remain for the benefit of, or relating to, any present or former
employee, consultant or director of TMAI (together, the "TMAI Employee Plans").
(b) TMAI has furnished to Avant! a copy of each of the TMAI
Employee Plans and related plan documents (including trust documents, insurance
policies or contracts, employee booklets and the most recent summary plan
descriptions) and has, with respect to each TMAI Employee Plan which is subject
to ERISA reporting requirements, provided copies of the most recent Form 5500
report. Any TMAI Employee Plan intended to be qualified under Section 401(a) of
the Code has either obtained from the Internal Revenue Service a favorable
determination as to its qualified status under the Code, including the
provisions of the Tax Reform Act of 1986, or has applied to the Internal Revenue
Service for such a determination prior to the expiration of the requisite period
under applicable Treasury Regulations or Internal Revenue Service pronouncements
in which to apply for such determination and to make any amendments necessary to
obtain a favorable determination. TMAI has also furnished Avant! with the most
recent Internal Revenue Service determination or opinion letter issued with
respect to each such TMAI Employee Plan, and nothing has occurred since the
issuance of each such
15
<PAGE>
letter which could reasonably be expected to cause the loss of the tax-qualified
status of any TMAI Employee Plan subject to Code Section 401(a).
(c) (i) None of the TMAI Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person; (ii) there has
been no "prohibited transaction," as such term is defined in Section 406 of
ERISA and Section 4975 of the Code, with respect to any TMAI Employee Plan,
which could reasonably be expected to have, in the aggregate, a Material Adverse
Effect on TMAI; (iii) each TMAI Employee Plan has been administered in
accordance with its terms and in compliance with the requirements prescribed by
any and all statutes, rules and regulations (including ERISA and the Code),
except as would not have, in the aggregate, a Material Adverse Effect on TMAI or
as otherwise disclosed in the TMAI Disclosure Schedule; (iv) neither TMAI nor
any subsidiary or ERISA Affiliate is subject to any liability or penalty under
Sections 4976 through 4980 of the Code or Title I of ERISA with respect to any
of the TMAI Employee Plans; (v) all material contributions required to be made
by TMAI or any subsidiary or ERISA Affiliate to any TMAI Employee Plan have been
made on or before their due dates and a reasonable amount has been accrued for
such required contributions to each TMAI Employee Plan for the current plan
years; and (vi) no TMAI Employee Plan is covered by, and neither TMAI nor any
subsidiary or ERISA Affiliate has incurred or expects to incur any material
liability under, Title IV of ERISA or Section 412 of the Code. With respect to
each TMAI Employee Plan subject to ERISA as either an employee pension plan
within the meaning of Section 3(2) of ERISA or an employee welfare benefit plan
within the meaning of Section 3(1) of ERISA, TMAI has prepared in good faith and
timely filed all requisite governmental reports (which were true and correct as
of the date filed) and has properly and timely filed and distributed or posted
all notices and reports to employees required to be filed, distributed or posted
with respect to each such TMAI Employee Plan. No suit, administrative
proceeding, action or other litigation has been brought, or to the knowledge of
TMAI is threatened, against or with respect to any such TMAI Employee Plan,
including any audit or inquiry by the IRS or United States Department of Labor.
Neither TMAI nor any TMAI subsidiary or other ERISA Affiliate is a party to, or
has made any contribution to or otherwise incurred any obligation under, any
"multiemployer plan" as defined in Section 3(37) of ERISA.
(d) With respect to each TMAI Employee Plan, TMAI and each of
its United States subsidiaries have complied with (i) the applicable health care
continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"), and the proposed regulations thereunder,
and (ii) the applicable requirements of the Family Leave Act of 1993 and the
regulations thereunder, except, in each case, to the extent that such failure to
comply would not, in the aggregate, have a Material Adverse Effect on TMAI.
(e) Except as otherwise disclosed in the TMAI Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
will not (i) entitle any current or former employee or other service provider of
TMAI, any TMAI subsidiary or any other ERISA Affiliate to severance benefits or
any other payment (including, without limitation, unemployment compensation,
golden parachute or bonus), except as expressly provided in this Agreement, or
(ii) accelerate the time of payment or vesting of any such benefits, or increase
the amount of compensation due any such employee or service provider.
16
<PAGE>
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by TMAI, any TMAI subsidiary or other
ERISA Affiliate relating to, or change in participation or coverage under, any
TMAI Employee Plan which would materially increase the expense of maintaining
such Plan above the level of expense incurred with respect to that Plan for the
most recent fiscal year included in TMAI's financial statements.
2.14 CERTAIN AGREEMENTS AFFECTED BY THE MERGER. Neither the execution
and delivery of this Agreement nor the consummation of the transaction
contemplated hereby will (i) result in any material payment (including, without
limitation, severance, unemployment compensation, golden parachute, bonus or
otherwise) becoming due to any director or employee of TMAI or any of its
subsidiaries, (ii) materially increase any benefits otherwise payable by TMAI or
(iii) result in the acceleration of the time of payment or vesting of any such
benefits.
2.15 BROKERS' AND FINDERS' FEES. TMAI has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby, other
than fees and expenses payable to Wessels, Arnold & Henderson, L.L.C. and Cowen
and Company as set forth on Section 2.15 of the TMAI Disclosure Schedule.
2.16 OPINION OF TMAI FINANCIAL ADVISOR. TMAI has received the opinion
of Wessels, Arnold & Henderson, L.L.C. and Cowen and Company, to the effect
that, as of the date hereof, the consideration to be received by TMAI's
shareholders in the Merger is fair, from a financial point of view, to the
shareholders of TMAI.
2.17 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The written
information supplied by TMAI expressly for the purpose of inclusion in the
registration statement on Form S-4 (or such other or successor form as shall be
appropriate) pursuant to which the issuance of the shares of Avant! Common Stock
to be issued in the Merger will be registered with the SEC (the "Registration
Statement") shall not at the time the Registration Statement (including any
amendments or supplements thereto) is declared effective by the SEC contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The written information supplied by TMAI
expressly for the purpose of inclusion in the combined proxy
statement/prospectus to be sent to the shareholders of TMAI in connection with
the meetings of TMAI's shareholders (the "TMAI Shareholders Meeting") and
Avant!'s stockholders (the "Avant! Stockholders Meeting") to be held in
connection with the Merger (such proxy statement/prospectus as amended or
supplemented is referred to herein as the "Proxy Statement") shall not, on the
date the Proxy Statement is first mailed to TMAI's shareholders, at the time of
the TMAI Shareholders Meeting and at the Effective Time, contain any material
statement which, at such time, is false or misleading or omits to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not false or misleading or omit
to state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the TMAI's
Shareholders Meeting which has become false or misleading. If at any time prior
to the Effective Time any event or information should be discovered by TMAI
which should be set forth in an amendment to the Registration Statement or a
supplement to the Proxy Statement,
17
<PAGE>
TMAI shall promptly inform Avant!. Notwithstanding the foregoing, TMAI makes no
representation, warranty or covenant with respect to any information supplied by
Avant! or Merger Sub that is contained in any of the foregoing documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AVANT! AND MERGER SUB
Except as disclosed in a document of even date herewith and delivered
by Avant! to TMAI prior to the execution and delivery of this Agreement and
referring to the representations and warranties in this Agreement (the "Avant!
Disclosure Schedule"), Avant! and Merger Sub jointly and severally represent and
warrant to TMAI as follows:
3.1 ORGANIZATION, STANDING AND POWER. Each of Avant! and Merger Sub
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. Each of Avant! and Merger Sub has the
corporate power to own its properties and to carry on its business as now being
conducted and as proposed to be conducted and is duly qualified to do business
and is in good standing in each jurisdiction in which the failure to be so
qualified and in good standing would have a Material Adverse Effect on Avant!.
Avant! has delivered a true and correct copy of the Certificate of Incorporation
and Bylaws or other charter documents, as applicable, of Avant! and each of its
subsidiaries, each as amended to date, to TMAI. Neither Avant! nor Merger Sub
is in violation of any of the provisions of its Certificate or Articles of
Incorporation or Bylaws or equivalent organizational documents. Avant! is the
owner of all outstanding shares of capital stock of Merger Sub and all such
shares are duly authorized, validly issued, fully paid and nonassessable. All
of the outstanding shares of capital stock of Merger Sub are owned by Avant!
free and clear of all liens, charges, claims or encumbrances or rights of
others. Merger Sub was formed on September 5, 1997 for the purpose of
consummating this Merger and has no material assets or liabilities and will
conduct no business except as is necessary for such purpose.
3.2 CAPITAL STRUCTURE. The authorized capital stock of Avant!
consists of 75,000,000 shares of Common Stock, $.0001 par value, and 5,000,000
shares of Preferred Stock, $.0001 par value, of which there were issued and
outstanding as of the close of business on August 31, 1997, 25,926,728 shares of
Avant! Common Stock and no shares of Preferred Stock. There are no other
outstanding shares of capital stock or voting securities of Avant! and no
outstanding commitments to issue any shares of capital stock or voting
securities of Avant! after August 31, 1997, other than shares of Avant! Common
Stock issued after August 31, 1997 upon the exercise of options under the Avant!
1995 Stock Option/Stock Issuance Plan, the Integrated Silicon Systems, Inc.
stock option plans, the Meta - Software, Inc. stock option plans, the NexSyn,
Inc. stock option plans, the FrontLine Design Automation, Inc. stock option
plans and the Anagram, Inc. stock option plans (the "Avant! Stock Option
Plans"). The authorized capital stock of Merger Sub consists of 1,000 shares of
Common Stock, no par value, all of which are issued and outstanding and are held
by Avant!. All outstanding shares of Avant! and Merger Sub have been duly
authorized, validly issued, fully paid and are nonassessable and free of any
liens or encumbrances other than any liens or encumbrances created by or imposed
upon the holders thereof and are not subject to preemptive rights or rights of
first refusal created by statute, the Certificate of Incorporation or Bylaws of
Avant! or any agreement to which Avant! is a party or
18
<PAGE>
by which it is bound. As of August 31, 1997, Avant! had reserved _____________
shares of Avant! Common Stock for issuance to employees, directors and
independent contractors pursuant to the Avant! Stock Option Plans, of which
approximately _________ shares have been issued pursuant to option exercises,
and approximately _________ shares are subject to outstanding, unexercised
options. Other than this Agreement and the Agreement and Plan of Reorganization
dated as of July 31, 1997 and as amended on August 27, 1997 among Avant!, GB
Acquisition Corporation, Compass Design Automation, Inc., and VLSI Technology,
Inc. (the "Compass Agreement"), there are no other options, warrants, calls,
rights, commitments or agreements of any character to which Avant! or Merger Sub
is a party or by which either of them is bound obligating Avant! or Merger Sub
to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of the capital stock of Avant! or
Merger Sub or obligating Avant! or Merger Sub to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. The shares of
Avant! Common Stock to be issued pursuant to the Merger will be duly authorized,
validly issued, fully paid, and non-assessable, will not be subject to any
preemptive or other statutory right of stockholder, will be issued in compliance
with applicable U.S. Federal and State securities laws and will be free of any
liens or encumbrances other than any liens or encumbrances created by or imposed
upon the holders thereof. Except for the Registration Rights Agreement dated
November 27, 1996, by and among Avant! and Badruddin Agarwala, on behalf of the
shareholders and the holders of warrants of FrontLine Design Automation, Inc.,
there are no contracts, commitments or agreements relating to voting,
registration, purchase or sale of Avant!'s capital stock (i) between or among
Avant! and any of its stockholders or (ii) to the best of Avant!'s knowledge,
between or among any of Avant!'s stockholders.
3.3 AUTHORITY. Each of Avant! and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of each of Avant! and
Merger Sub, subject only to the approval of the issuance of shares of Avant!
Common Stock in the Merger by the stockholders of Avant!. This Agreement has
been duly executed and delivered by each of Avant! and Merger Sub and
constitutes the valid and binding obligations of each of Avant! and Merger Sub,
enforceable against each in accordance with its terms. The Boards of Directors
of Avant! and Merger Sub have unanimously approved this Agreement and the
transactions contemplated hereby. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a material benefit
under (i) any provision of the Certificate of Incorporation or Bylaws of Avant!
or any of its subsidiaries, or (ii) any material mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Avant! or any of its subsidiaries or their properties or assets,
except where such conflict, violation, default, termination, cancellation or
acceleration with respect to the foregoing provisions of (ii) would not have had
and would not reasonably be expected to have a Material Adverse Effect on
Avant!. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required by or with
respect to Avant! or any of its subsidiaries in connection with the execution
and delivery of this Agreement by Avant! and Merger Sub or the
19
<PAGE>
consummation by each of Avant! and Merger Sub of the transactions contemplated
hereby, except for (i) the filing of the Agreement of Merger as provided in
Section 1.2, (ii) the filing with the SEC and NASD of the Registration
Statement, (iii) the filing of a Form 8-K with the SEC and NASD within fifteen
(15) days after the Closing Date, (iv) any filings as may be required under
applicable state securities laws and the securities laws of any foreign country,
(v) the filing with the Nasdaq National Market of a Notification Form for
Listing of Additional Shares, in each case with respect to the shares of Avant!
Common Stock issuable upon conversion of the TMAI Common Stock in the Merger and
upon exercise of the options, subscriptions or other awards, as the case may be,
under the TMAI Stock Plans and the TMAI ESPP to be assumed by Avant!, (vi)
filings required to be made by each of Avant! and TMAI under the HSR Act (as
defined in Section 5.21 below); (vii) the filing of a registration statement on
Form S-8 covering the Avant! Common Stock issuable pursuant to outstanding
options under the TMAI Stock Plans and TMAI ESPP; and (viii) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not have a Material Adverse Effect on Avant! or would
not prevent or materially alter or delay any of the transactions contemplated by
this Agreement.
3.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. Avant! has furnished to
TMAI a true and complete copy of each statement, report, registration statement
(with the prospectus in the form filed pursuant to Rule 424(b) of the Securities
Act), definitive proxy statement, and other filings filed with the SEC by Avant!
since June 6, 1995, and, prior to the Effective Time, Avant! will have furnished
TMAI with true and complete copies of any additional documents filed with the
SEC by Avant! prior to the Effective Time (collectively, the "Avant! SEC
Documents"). In addition, Avant! has made available to TMAI all exhibits to the
Avant! SEC Documents filed prior to the date hereof, and will promptly make
available to TMAI all exhibits to any additional Avant! SEC Documents filed
prior to the Effective Time. All documents required to be filed as exhibits to
the TMAI SEC Documents have been so filed, and all material contracts so filed
as exhibits are in full force and effect, except those which have expired or
have been terminated in accordance with their terms, and neither Avant! nor any
of its subsidiaries is in material default thereunder. As of their respective
filing dates, or, with respect to registration statements as of their effective
dates, the Avant! SEC Documents complied in all material respects with the
requirements of the Exchange Act and the Securities Act, and none of the Avant!
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent corrected, superseded or modified by a
subsequently filed Avant! SEC Document. The financial statements of Avant!,
including the notes thereto, included in the Avant! SEC Documents (the "Avant!
Financial Statements") complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto as of their respective dates, and have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent throughout the periods indicated and consistent with each
other (except as may be indicated in the notes thereto or, in the case of
unaudited statements included in Quarterly Reports on Form 10-Q, as permitted by
Form 10-Q of the SEC). The Avant! Financial Statements fairly present the
consolidated financial condition and operating results of Avant! and its
subsidiaries at the dates and during the periods indicated therein (subject, in
the case of unaudited statements, to normal, recurring year-end adjustments).
There has been no change in Avant! accounting policies except as described in
the notes to the Avant! Financial Statements.
20
<PAGE>
3.5 ABSENCE OF CERTAIN CHANGES. Except as set forth in the Avant!
SEC Documents, since June 30, 1997 (the "Avant! Balance Sheet Date"), Avant! has
conducted its business in the ordinary course consistent with past practice and
there has not occurred: (i) any change, event or condition (whether or not
covered by insurance) that has resulted in a Material Adverse Effect on Avant!;
(ii) any acquisition, sale or transfer of any material asset of Avant! or any of
its subsidiaries other than in the ordinary course of business and consistent
with past practice; (iii) any change in accounting methods or practices
(including any change in depreciation or amortization policies or rates) by
Avant! or any revaluation by Avant! of any of its assets; (iv) any declaration,
setting aside, or payment of a dividend or other distribution with respect to
the shares of Avant!, or any direct or indirect redemption, purchase or other
acquisition by Avant! of any of its shares of capital stock; (v) any material
contract entered into by Avant!, other than the Compass Agreement or in the
ordinary course of business and as provided to TMAI, or any material amendment
or termination of, or default under, any material contract to which Avant! is a
party or by which it is bound; (vi) any action by Avant! or, to Avant!'s
knowledge, any affiliate of Avant! which might reasonably be expected to
preclude the ability of Avant! to account for the business combination to be
effected by the Merger as a "pooling of interests" under generally accepted
accounting principles; or (vii) any negotiation or agreement by Avant! or any of
its subsidiaries to do any of the things described in the preceding clauses (i)
through (viii) (other than negotiations with TMAI and its representatives
regarding the transactions contemplated by this Agreement).
3.6 LITIGATION. There is no action, suit, proceeding, arbitration or
investigation pending or, to the knowledge of Avant!, threatened in writing
against Avant! that in any manner challenges or seeks to prevent, enjoin, alter
or delay any of the transactions contemplated hereby. Except as set forth in the
Avant! SEC Documents, Avant! is not aware of any other pending or threatened
action, suit, proceeding, investigation or claim, or any reasonable basis
therefor, that individually or in the aggregate would reasonably be expected to
have a Material Adverse Effect on Avant!. From the date of this Agreement until
the Effective Time, Avant! shall promptly advise TMAI of any such action, suit,
proceeding, claim, arbitration or investigation that is commenced, or, to the
knowledge of Avant!, threatened in writing against Avant! or any of its
subsidiaries. As of the date hereof, there is no judgment, decree or order
against Avant! or any of its subsidiaries, or, to the knowledge of Avant!, any
of their respective directors or officers (in their capacities as such), that
could prevent, enjoin, alter or materially delay any of the transactions by this
Agreement or that could reasonably be expected to have a Material Adverse Effect
on Avant!.
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. Avant! has no material
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet included in Avant!'s Quarterly Report on Form 10-Q for the period
ended June 30, 1997 (the "Avant! Balance Sheet"); (ii) those incurred in the
ordinary course of business and not required to be set forth in the Avant!
Balance Sheet under generally accepted accounting principles; (iii) those
incurred in the ordinary course of business since the Avant! Balance Sheet Date
and consistent with past practice; and (iv) those incurred in connection with
the execution of this Agreement and the Compass Agreement and the transactions
contemplated hereby or thereby.
21
<PAGE>
3.8 TAXES. Avant! and each of its subsidiaries, and each member of
any consolidated, combined or unitary group for Tax purposes of which Avant! or
any of its subsidiaries is or has been a member have timely filed all Tax
Returns required to be filed by them and have paid all Taxes shown thereon to be
due. The Avant! Financial Statements (i) fully accrue all actual and
contingent liabilities for Taxes with respect to all periods through June 30,
1997 and Avant! and each of its subsidiaries have not and will not incur any Tax
liability in excess of the amount reflected on the Avant! Financial Statements
with respect to such periods, and (ii) properly accrue in accordance with
generally accepted accounting principles all liabilities for Taxes payable after
June 30, 1997 with respect to all transactions and events occurring on or prior
to such date. No material Tax liability since June 30, 1997 has been incurred by
Avant! or its subsidiaries other than in the ordinary course of business and
adequate provision has been made in the Avant! Financial Statements for all
Taxes since that date in accordance with generally accepted accounting
principles on at least a quarterly basis. Avant! and each of its subsidiaries
have withheld and paid or will timely pay to the applicable financial
institution or Tax Authority all amounts required to be withheld. No notice of
deficiency or similar document of any Tax Authority has been received by either
Avant! or any of its subsidiaries, and there are no liabilities for Taxes with
respect to the issues that have been raised (and are currently pending) by any
Tax Authority that could, if determined adversely to Avant! and its
subsidiaries, materially and adversely affect the liability of Avant! and its
subsidiaries for Taxes. There (i) is no material claim for Taxes that is a lien
against the property of Avant! or any of its subsidiaries other than liens for
Taxes not yet due and payable, (ii) has been no notification received by Avant!
of any audit of any Tax Return of Avant! or any of its subsidiaries being
conducted, pending or threatened by a Tax Authority, (iii) is no extension or
waiver of the statute of limitations on the assessment of any Taxes granted by
Avant! or any of its subsidiaries that is currently in effect, and (iv) is no
agreement, contract or arrangement to which Avant! or any of its subsidiaries is
a party that may result in the payment of any material amount that would not be
deductible by reason of Sections 280G or 404 of the Code. Avant! will not be
required to include any material adjustment in Taxable income for any Tax period
(or portion thereof) pursuant to Section 481 or 263A of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Merger.
Neither Avant! nor any of its subsidiaries is a party to any Tax sharing or Tax
allocation agreement nor does Avant! or any of its subsidiaries owe any amount
under any such agreement. Avant! and each of its subsidiaries are in full
compliance with all terms and conditions of any Tax exemptions or other Tax-
sharing agreement or order of a foreign government applicable to them and the
consummation of the Merger shall not have any adverse effect on the continued
validity and effectiveness of any such Tax exemptions or other Tax-sharing
agreement or order.
3.9 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The written
information supplied by Avant! and Merger Sub expressly for the purpose of
inclusion in the Registration Statement shall not, at the time the Registration
Statement (including any amendments or supplements thereto) is declared
effective by the SEC, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
written information supplied by Avant! expressly for the purpose of inclusion in
the Proxy Statement shall not, on the date the Proxy Statement is first mailed
to TMAI's shareholders, at the time of TMAI's Shareholders Meeting and at the
Effective Time, contain any statement which, at such time, is false or
misleading with respect to any material fact, or omit to state any
22
<PAGE>
material fact necessary in order to make the statements therein, in light of the
circumstances under which it is made, not false or misleading; or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for TMAI's
Shareholders Meeting which has become false or misleading. If at any time prior
to the Effective Time any event or information should be discovered by Avant! or
Merger Sub which should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, Avant! or Merger Sub will
promptly inform TMAI. Notwithstanding the foregoing, Avant! and Merger Sub make
no representation, warranty or covenant with respect to any information supplied
by TMAI which is contained in any of the foregoing documents.
3.10 INTELLECTUAL PROPERTY. Avant! and/or its subsidiaries own, or
otherwise possess legally enforceable rights to use all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
maskworks, net lists, schematics, technology, know-how, trade secrets,
inventory, ideas, algorithms, processes, computer software programs or
applications (in source code and/or object code form), and tangible or
intangible proprietary information or material that are used in the business of
Avant! and its subsidiaries as currently conducted (including with respect to
products currently under development), except to the extent that the failure to
have such rights has not had a Material Adverse Effect on Avant! excluding the
results and expense as of the date of this Agreement of any litigation or other
court proceedings.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS OF TMAI. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, TMAI agrees (except to the extent expressly
contemplated by this Agreement or the Disclosure Schedules or as consented to in
writing by Avant!) to carry on its and its subsidiaries' business in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted; to pay and to cause its subsidiaries to pay debts and Taxes when due
subject (i) to good faith disputes over such debts or Taxes and (ii) in the case
of Taxes of TMAI or any of its subsidiaries, to Avant!'s consent to the filing
of material Tax Returns, if applicable; to pay or perform other obligations when
due; to use all reasonable efforts consistent with past practice and policies to
preserve intact its and its subsidiaries' present business organizations; to use
its reasonable best efforts consistent with past practice to keep available the
services of its and its subsidiaries' present officers and key employees; and to
use its commercially reasonable efforts consistent with past practice to
preserve its and its subsidiaries' relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with it
or its subsidiaries, to the end that its and its subsidiaries' goodwill and
ongoing businesses shall be unimpaired at the Effective Time. TMAI agrees to
promptly notify Avant! of any event or occurrence not in the ordinary course of
its or its subsidiaries' business, and of any event which could have a Material
Adverse Effect. Without limiting the foregoing, except as expressly
contemplated by this Agreement, TMAI shall not take, or agree in writing or
otherwise to take, any action which would make any of its representations or
warranties contained in this Agreement untrue or incorrect in any material
respect or prevent it from performing or cause it not to perform its covenants
hereunder in any material respect.
23
<PAGE>
4.2 COVENANTS OF TMAI. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, except as expressly contemplated by this Agreement or the
TMAI Disclosure Schedule, TMAI shall not do, cause or permit any of the
following, or allow, cause or permit any of its subsidiaries to do, cause or
permit any of the following, without the prior written consent of Avant!, which
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing,
Avant!'s consent shall be deemed given if the matter is discussed in advance
with John P. Huyett, and he has received any additional information requested
and, after such discussion and receipt of any additional requested information,
he shall not have objected to the taking of the proposed action.
(a) Material Contracts. Enter into any material contract or
commitment, or violate, amend or otherwise modify or waive any of the material
terms of any of its material contracts, other than in the ordinary course of
business consistent with past practice;
(b) INTELLECTUAL PROPERTY. Transfer to any person or entity any
rights to its Intellectual Property other than in the ordinary course of
business consistent with past practice;
(c) EXCLUSIVE RIGHTS. Enter into or amend any agreements
pursuant to which any other party is granted exclusive marketing or other
exclusive rights of any type or scope with respect to any of its products or
technology;
(d) INDEBTEDNESS. Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, other than in the ordinary course of
business and consistent with past practice, which in the aggregate do not exceed
$100,000;
(e) LEASES. Enter into any operating lease in excess of an
aggregate of $100,000;
(f) PAYMENT OF OBLIGATIONS. Pay, discharge or satisfy in an
amount in excess of $100,000 in any one case or $250,000 in the aggregate, any
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) arising other than in the ordinary course of business,
other than the payment, discharge or satisfaction of liabilities reflected or
reserved against in the TMAI Financial Statements;
(g) CAPITAL EXPENDITURES. Make any capital expenditures,
capital additions or capital improvements over $100,000 except in the ordinary
course of business and consistent with past practice;
(h) INSURANCE. Materially reduce the amount of any material
insurance coverage provided by existing insurance policies;
(i) EMPLOYEE BENEFIT PLANS; NEW HIRES; PAY INCREASES. Adopt or
amend any employee benefit or stock purchase or option plan, accept any new or
additional subscriptions under the TMAI ESPP, or hire any officer level employee
without prior consultation with Avant!, pay any special bonus or special
remuneration to any employee or
24
<PAGE>
director, or increase the salaries or wage rates of its employees, except in the
ordinary course of business and consistent with past practices or as previously
disclosed to Avant!;
(j) SEVERANCE ARRANGEMENTS. Grant any severance or termination
pay (i) to any director or officer or (ii) to any other employee except
(A) payments made pursuant to standard written agreements outstanding on the
date hereof or (B) grants which are made in the ordinary course of business in
accordance with its standard past practice;
(k) CHARTER DOCUMENTS. Cause or permit any amendments to its
Articles of Incorporation or Bylaws or other similar organizational document;
(l) ISSUANCE OF SECURITIES. Issue, deliver or sell or authorize
or propose the issuance, delivery or sale of, or purchase or propose the
purchase of, any shares of its capital stock or securities convertible into, or
subscriptions (including subscription rights under the TMAI ESPP), rights,
warrants or options to acquire, or other agreements or commitments of any
character obligating it to issue any such shares or other convertible
securities, other than the issuance of shares of its Common Stock pursuant to
the exercise of stock options, warrants or other rights therefor permitted under
this Agreement; provided, however, that TMAI may, in the ordinary course of
business consistent with past practice, grant (A) options for the purchase of up
to an aggregate of 40,000 shares of common stock under the TMAI Stock Plans to
existing employees and (B) options for the purchase of common stock under the
TMAI Stock Plans to new employees; provided, however, that TMAI may not grant
an individual options to purchase an aggregate of more than 10,000 shares of
common stock pursuant to this subsection (l) of Section 4.2.
(m) DIVIDENDS; CHANGES IN CAPITAL STOCK. Declare or pay any
dividends on or make any other distributions (whether in cash, stock or
property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
in connection with any termination of service to it or its subsidiaries;
(n) STOCK OPTION PLANS, ETC. Accelerate, amend or change the
period of exercisability or vesting of options or other rights granted under its
stock option agreements or stock plans or authorize cash payments in exchange
for any options or other rights granted under any of such agreements or plans,
except as disclosed in the TMAI Disclosure Schedule;
(o) POOLING. To the knowledge of TMAI, take any action, that
would interfere with Avant!'s ability to account for the Merger as a pooling of
interests;
(p) DISPOSITIONS. Sell, lease, license or otherwise dispose of
or encumber any of its properties or assets which are material, individually or
in the aggregate, to its and its subsidiaries' business, taken as a whole,
except in the ordinary course of business consistent with past practice;
25
<PAGE>
(q) LAWSUITS. Commence a lawsuit other than (i) for the routine
collection of bills, (ii) in such cases where it in good faith determines that
failure to commence suit would result in the material impairment of a valuable
aspect of its business, provided that it consults with Avant! prior to the
filing of such a suit, or (iii) for a breach of this Agreement;
(r) ACQUISITIONS. Acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof, or otherwise acquire or
agree to acquire any assets which are material, individually or in the
aggregate, to its and its subsidiaries' business, taken as a whole;
(s) TAXES. Other than as set forth in the TMAI Disclosure
Schedule, or in the ordinary course of business, make or change any material
election in respect of Taxes, except where such change or election would not
have a Material Adverse Effect on TMAI and its subsidiaries, taken as a whole,
adopt or change any accounting method in respect of Taxes, file any material Tax
Return or any amendment to a material Tax Return, enter into any closing
agreement, settle any claim or assessment in respect of Taxes, or consent to any
extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes;
(t) REVALUATION. Revalue in any material respect any of its
assets, including without limitation writing down the value of inventory or
writing off notes or accounts receivable other than in the ordinary course of
business; or
(u) OTHER. Take or agree in writing or otherwise to take, any
of the actions described in Sections 4.2(a) through (t) above, or any action
which would make any of its representations or warranties contained in this
Agreement untrue or incorrect or prevent it from performing or cause it not to
perform its covenants hereunder.
4.3 NOTICES. TMAI, with the assistance and advice of Avant!, shall
give all notices and other information required to be given to the employees of
TMAI, any collective bargaining unit representing any group of employees of
TMAI, and any applicable government authority under the WARN Act, the National
Labor Relations Act, the Code, COBRA, and other applicable law in connection
with the transactions provided for in this Agreement.
4.4 OTHER OFFERS. (a) TMAI and its subsidiaries and the officers,
directors, employees or other agents of TMAI and its subsidiaries will not,
directly or indirectly, (i) take any action to solicit, initiate or encourage
any Takeover Proposal (defined below) or (ii) engage in negotiations with, or
disclose any nonpublic information relating to TMAI or any of it subsidiaries
to, or afford access to the properties, books or records of TMAI or any of its
subsidiaries to, any person that has advised TMAI that it may be considering
making, or that has made, a Takeover Proposal; provided, however, that nothing
herein shall prohibit TMAI's Board of Directors from taking and disclosing to
TMAI's shareholders a position with respect to a tender offer pursuant to
Rules 14d-9 and 14e-2 promulgated under the Exchange Act. TMAI will promptly
notify Avant! after receipt of any Takeover Proposal or any notice that any
person is considering making a Takeover Proposal or any request for nonpublic
information relating to TMAI or any of its subsidiaries or for access to the
properties, books or records of TMAI or any of its subsidiaries by any person
that has advised TMAI that it may be considering making, or
26
<PAGE>
that has made, a Takeover Proposal and will keep Avant! fully informed of the
status and details of any such Takeover Proposal notice or request. For
purposes of this Agreement, "Takeover Proposal" means any offer or proposal for,
or any indication of interest in, a merger or other business combination
involving TMAI or any of its subsidiaries or the acquisition of any significant
equity interest in, or a significant portion of the assets of, TMAI or any of
its subsidiaries, other than the transactions contemplated by this Agreement.
(b) Notwithstanding the provisions of paragraph (a) above, prior
to the Effective Time, TMAI may, to the extent the Board of Directors of TMAI
determines, in good faith, based upon and consistent with advice received in
consultation with outside legal counsel, that the Board's fiduciary duties under
applicable law require it to do so, participate in discussions or negotiations
with, and, subject to the requirements of paragraph (c), below, furnish
information to any person, entity or group after such person, entity or group
has delivered to TMAI in writing, an unsolicited bona fide Acquisition Proposal
which the Board of Directors of TMAI in its good faith reasonable judgment
determines, based upon and consistent with advice received in consultation with
its independent legal and financial advisors, would result in a transaction more
favorable than the Merger to the shareholders of TMAI from a financial point of
view (a "TMAI Alternative Proposal"). In addition, notwithstanding the
provisions of paragraph (a) above, in connection with a possible Acquisition
Proposal, TMAI may refer any third party to this Section 4.4 or make a copy of
this Section 4.4 available to a third party. In the event TMAI receives a TMAI
Alternative Proposal, nothing contained in this Agreement (but subject to the
terms hereof) will prevent the Board of Directors of TMAI from recommending such
TMAI Alternative Proposal to its Shareholders, if the Board determines, in good
faith, based upon and consistent with advice received in consultation with
outside legal counsel, that such action is required by its fiduciary duties
under applicable law. In such case, the Board of Directors of TMAI may
withdraw, modify or refrain from making its recommendation set forth in
Section 5.1, and, to the extent it does so, TMAI may refrain from soliciting
proxies to secure the vote of its shareholders as may be required by
Section 5.2(a); PROVIDED, HOWEVER, that TMAI shall (i) provide at least 48 hours
prior notice to Avant! of any TMAI Board meeting at which it is reasonably
expected to contemplate an Alternative Proposal, and (ii) not recommend to its
shareholders a TMAI Alternative Proposal for a period of not less than five (5)
business days after Avant!'s receipt of a copy of such TMAI Alternative Proposal
(or a description of the significant terms and conditions thereof, if not in
writing); and PROVIDED, FURTHER, that nothing contained in this Section 4.4
shall limit TMAI's obligation to hold and convene the TMAI Shareholders' Meeting
(regardless of whether the recommendation of the Board of Directors of TMAI
shall have been withdrawn, modified or not yet made) or to provide the TMAI
shareholders with material information relating to such a meeting.
(c) Notwithstanding anything to the contrary in this
Section 4.4, TMAI will not provide any non-public information to a third party
unless: (i) TMAI provides such non-public information pursuant to a
nondisclosure agreement with terms regarding the protection of confidential
information at least as restrictive as such terms in the Confidentiality
Agreement; (ii) such non-public information has been previously delivered to
Avant!; and (iii) TMAI advises Avant! in writing of such disclosure, including
the party to whom disclosed.
27
<PAGE>
4.5 AVANT! OFFERS Avant! will not acquire or agree to acquire any
direct competitor of TMAI if such acquisition would have reasonable likelihood
of preventing or delaying the Merger.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT. As promptly
as practicable after the execution of this Agreement, TMAI and Avant! shall
prepare and file with the SEC preliminary proxy materials relating to the
approval of the Merger and the transactions contemplated hereby by the
shareholders of TMAI and Avant! and, as promptly as practicable following
receipt of SEC comments thereon, Avant! shall file with the SEC a Registration
Statement on Form S-4 (or such other or successor form as shall be appropriate),
which complies in form with applicable SEC requirements and shall use all
reasonable efforts to cause the Registration Statement to become effective as
soon thereafter as practicable; provided, however, that Avant! shall have no
obligation to agree to account for the Merger as a "purchase" in order to cause
the Registration Statement to become effective. Subject to the provisions of
Section 4.4, the Proxy Statement shall include the recommendation of the Board
of Directors of TMAI in favor of the Merger.
5.2 MEETING OF SHAREHOLDERS.
(a) TMAI shall promptly after the date hereof take all action
necessary in accordance with California Law and its Articles of Incorporation
and Bylaws to convene the TMAI Shareholders Meeting on or prior to November 30,
1997 or as soon thereafter as is practicable and in any event on the date within
forty (40) days of the date on which the Registration Statement shall be
declared effective by the SEC, unless otherwise mutually agreed by the parties
hereto. TMAI shall consult with Avant! and use all reasonable efforts to hold
the TMAI Shareholders Meeting and shall not postpone or adjourn (other than for
the absence of a quorum) the TMAI Shareholders Meeting without the consent of
Avant!. Subject to the provisions of Section 5.1 above, TMAI shall use its
reasonable best efforts to solicit from shareholders of TMAI proxies in favor of
the Merger and shall take all other action necessary or advisable to secure the
vote or consent of shareholders required to effect the Merger.
(b) Avant! shall promptly after the date hereof take all action
necessary in accordance with Delaware Law and its Certificate of Incorporation
and Bylaws to convene the Avant! Stockholders Meeting on or prior to
November 30, 1997 or as soon thereafter as is practicable and in any event on
the date within forty (40) days of the date on which the Registration Statement
shall be declared effective by the SEC, unless otherwise mutually agreed by the
parties hereto. Avant! shall consult with TMAI and use all reasonable best
efforts to hold the Avant! Stockholders Meeting on the same day as the TMAI
Shareholders Meeting and shall not postpone or adjourn (other than for the
absence of a quorum) the Avant! Stockholders meeting without the consent of
TMAI. Avant! shall use its best efforts to solicit from stockholders of Avant!
proxies in favor of the Merger and shall take all other action necessary or
advisable to secure the vote or consent of stockholders to effect the Merger.
28
<PAGE>
5.3 ACCESS TO INFORMATION.
(a) TMAI shall afford Avant! and its accountants, counsel and
other representatives, reasonable access during normal business hours during the
period prior to the Effective Time to (i) all of TMAI's and its subsidiaries'
properties, books, contracts, commitments and records, and (ii) all other
information concerning the business, properties and personnel of TMAI and its
subsidiaries as Avant! may reasonably request. TMAI agrees to provide to Avant!
and its accountants, counsel and other representatives copies of internal
financial statements promptly upon request. Avant! shall afford TMAI and its
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time to (i) all of
Avant!'s and its subsidiaries' properties, books, contracts, commitments and
records, and (ii) all other information concerning the business, properties and
personnel of Avant! and its subsidiaries as TMAI may reasonably request. Avant!
agrees to provide to TMAI and its accountants, counsel and other representatives
copies of internal financial statements promptly upon request.
(b) Subject to compliance with applicable law governing the
exchange of information, from the date hereof until the Effective Time, each of
Avant! and TMAI shall confer on a regular and frequent basis with one or more
representatives of the other party to report material operational matters and
the general status of ongoing operations.
(c) No information or knowledge obtained in any investigation
pursuant to this Section 5.3 shall affect or be deemed to modify any
representation or warranty contained herein or the conditions to the obligations
of the parties to consummate the Merger.
5.4 CONFIDENTIALITY. The parties acknowledge that Avant! and TMAI
have previously executed a non-disclosure agreement dated September 4, 1997 (the
"Confidentiality Agreement"), which Confidentiality Agreement shall continue in
full force and effect in accordance with its terms.
5.5 PUBLIC DISCLOSURE. Unless otherwise permitted by this Agreement,
Avant! and TMAI shall consult with each other before issuing any press release
or otherwise making any public statement or making any other public (or non-
confidential) disclosure (whether or not in response to an inquiry) regarding
the terms of this Agreement and the transactions contemplated hereby, and
neither shall issue any such press release or make any such statement or
disclosure without the prior approval of the other (which approval shall not be
unreasonably withheld), except as may be required by law or by obligations
pursuant to any listing agreement with any national securities exchange or with
the NASD. The parties have agreed to the text of the joint press release
announcing the signing of this Agreement.
5.6 CONSENTS; COOPERATION.
(a) Each of Avant! and TMAI shall promptly apply for or
otherwise seek, and use its reasonable best efforts to obtain, all consents and
approvals required to be obtained by it for the consummation of the Merger, and
shall use its reasonable best efforts to obtain all necessary consents, waivers
and approvals under any of its material contracts in connection with the Merger
for the assignment thereof or otherwise. Subject to compliance with
29
<PAGE>
applicable law governing the exchange of information, the parties hereto will
consult and cooperate with one another, and consider in good faith the views of
one another, in connection with any analyses, appearances, presentations,
memoranda, briefs, arguments, opinions and proposals made or submitted by or on
behalf of any party hereto in connection with proceedings under or relating to
any federal or state antitrust or fair trade law.
(b) Each of Avant! and TMAI shall use all reasonable efforts to
resolve such objections, if any, as may be asserted by any Governmental Entity
with respect to the transactions contemplated by this Agreement under the
Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade
Commission Act, as amended, and any other Federal, state or foreign statutes,
rules, regulations, orders or decrees that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade (collectively, "Antitrust Laws"). In connection therewith, if any
administrative or judicial action or proceeding is instituted (or threatened to
be instituted) challenging any transaction contemplated by this Agreement as
violative of any Antitrust Law, each of Avant! and TMAI shall cooperate and use
all reasonable efforts vigorously to contest and resist any such action or
proceeding and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or permanent
(each an "Order"), that is in effect and that prohibits, prevents, or restricts
consummation of the Merger or any such other transactions, unless by mutual
agreement Avant! and TMAI decide that litigation is not in their respective best
interests. Notwithstanding the provisions of the immediately preceding
sentence, it is expressly understood and agreed that neither TMAI nor Avant!
shall have any obligation to litigate or contest any administrative or judicial
action or proceeding or any Order beyond January 31, 1998.
(c) Notwithstanding anything to the contrary in subsection (a)
or (b) above, (i) neither Avant! nor any of it subsidiaries shall be required to
divest any of their respective businesses, product lines or assets, or to take
or agree to take any other action or agree to any limitation that could
reasonably be expected to have a Material Adverse Effect on Avant! or of Avant!
combined with the Surviving Corporation after the Effective Time or (ii) neither
TMAI nor its subsidiaries shall be required to divest any of their respective
businesses, product lines or assets, or to take or agree to take any other
action or agree to any limitation that could reasonably be expected to have a
Material Adverse Effect on TMAI.
5.7 POOLING ACCOUNTING. Avant! and TMAI shall each use its best
efforts to cause the business combination to be effected by the Merger to be
accounted for as a pooling of interests and to take such action as may be
reasonably necessary to permit such treatment. Each of Avant! and TMAI shall
use its best efforts to cause its "Affiliates" (as defined in Section 5.8) not
to take any action that would adversely affect the ability of Avant! to account
for the business combination to be effected by the Merger as a pooling of
interest.
5.8 AFFILIATES AGREEMENTS.
(a) Section 5.8(a) of the TMAI Disclosure Schedule sets forth
those persons who may be deemed "Affiliates" of TMAI within the meaning of
paragraphs (c) and (d) of Rule 145 promulgated under the Securities Act
("Rule 145"). TMAI shall provide Avant! such information and documents as
Avant! shall reasonably request for purposes of reviewing
30
<PAGE>
such list. TMAI shall use its best efforts to deliver or cause to be delivered
to Avant!, as soon as practicable following the execution of this Agreement (and
in each case prior to the Effective Time) from each of the Affiliates of TMAI,
an executed Affiliates Agreement in substantially the form attached hereto as
EXHIBIT A-1. Avant! shall be entitled to place appropriate legends on the
certificates evidencing any Avant! Common Stock to be received by such
Affiliates of TMAI pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for Avant! Common
Stock, consistent with the terms of such Affiliates Agreements.
(b) Section 5.8(b) of the Avant! Disclosure Schedule sets forth
each person Avant! believes to be an "Affiliate" of Avant! within the meaning of
paragraphs (c) and (d) of Rule 145. Avant! will use its reasonable best efforts
to deliver or cause to be delivered to TMAI, as soon as practicable following
the execution of this Agreement (and in each case prior to the Effective Time)
from each of the Affiliates of Avant!, an executed Affiliates Agreement in
substantially the form attached hereto as EXHIBIT A-2.
5.9 FIRPTA. TMAI shall, prior to the Closing Date, provide Avant!
with a properly executed Foreign Investment and Real Property Tax Act of 1980
("FIRPTA") Notification Letter, in form and substance reasonably satisfactory to
Avant!, which states that shares of capital stock of TMAI do not constitute
"United States real property interests" under Section 897(c) of the Code, for
purposes of satisfying Avant!'s obligations under Treasury Regulation
Section 1.1445-2(c)(3). In addition, simultaneously with delivery of such
Notification Letter, TMAI shall provide to Avant!, as agent for TMAI, a form of
notice to the Internal Revenue Service in accordance with the requirements of
Treasury Regulation Section 1.897-2(h)(2), which shall be in form and substance
reasonably satisfactory to Avant!, along with written authorization for Avant!
to deliver such notice form to the Internal Revenue Service on behalf of TMAI
upon the Closing of the Merger.
5.10 CONTINUITY OF INTEREST CERTIFICATES. TMAI shall use its best
efforts to deliver or cause to be delivered to Avant!, as of the Effective Time,
from holders of the outstanding capital stock of TMAI specified on Section 5.10
of the TMAI Disclosure Schedule executed Continuity of Interest Certificates in
the form attached hereto as EXHIBIT C.
5.11 LEGAL REQUIREMENTS. Each of Avant!, Merger Sub and TMAI will,
and will cause their respective subsidiaries to, take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
them with respect to the consummation of the transactions contemplated by this
Agreement and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon such
other party in connection with the consummation of the transactions contemplated
by this Agreement and will take all reasonable actions necessary to obtain (and
will cooperate with the other parties hereto in obtaining) any consent,
approval, order or authorization of, or any registration, declaration or filing
with, any Governmental Entity or other person, required to be obtained or made
in connection with the taking of any action contemplated by this Agreement.
5.12 BLUE SKY LAWS. Avant! shall take such steps as may be necessary
to comply with the securities and blue sky laws of all jurisdictions which are
applicable to the
31
<PAGE>
issuance of the Avant! Common Stock in connection with the Merger. TMAI shall
use its reasonable best efforts to assist Avant! as may be necessary to comply
with the securities and blue sky laws of all jurisdictions which are applicable
in connection with the issuance of Avant! Common Stock in connection with the
Merger.
5.12 EMPLOYEE BENEFIT PLANS.
(a) On or before the Effective Time, TMAI shall cause all
options outstanding under the Directors Plan to terminate as provided in the
Directors Plan. At the Effective Time, the TMAI Stock Plans and each
outstanding option to purchase shares of TMAI Common Stock under the TMAI Stock
Plans, whether vested or unvested, will be assumed by Avant!. Section 5.13(a)
of the TMAI Disclosure Schedule sets forth a true and complete list as of the
date hereof of all holders of outstanding options under the TMAI Stock Plans,
including the number of shares of TMAI capital stock subject to each such
option, the exercise or vesting schedule, the exercise price per share and the
grant and expiration dates of each such option. On the Closing Date, TMAI shall
deliver to Avant! an updated Section 5.13(a) of the TMAI Disclosure Schedule
current as of such date. Each such option so assumed by Avant! under this
Agreement shall continue to have, and be subject to, the same terms and
conditions set forth in each of the TMAI Stock Plans immediately prior to the
Effective Time, except that (i) such option will be exercisable for that number
of whole shares of Avant! Common Stock equal to the product of the number of
shares of TMAI Common Stock that were issuable upon exercise of such option
immediately prior to the Effective Time multiplied by the Exchange Ratio and
rounded down to the nearest whole number of shares of Avant! Common Stock, and
(ii) the per share exercise price for the shares of Avant! Common Stock issuable
upon exercise of such assumed option will be equal to the quotient determined by
dividing the exercise price per share of TMAI Common Stock at which such option
was exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest whole cent. Consistent with the terms of the TMAI
Stock Plans and the documents governing the outstanding options under those
plans and except as set forth in the TMAI Disclosure Schedule, the Merger will
not terminate or otherwise result in the cash-out of any of the outstanding
options under such plans or accelerate the exercisability or vesting of such
options or the shares of Avant! Common Stock which will be subject to those
options solely as a result of the consummation of the Merger and Avant!'s
assumption of the options in connection therewith. Avant! shall take all
necessary steps to ensure that the options so assumed by Avant! qualify
following the Effective Time as incentive stock options as defined in
Section 422 of the Code to the extent such options qualified as incentive stock
options prior to the Effective Time. Within ten (10) business days after the
Effective Time, Avant! will issue to each person who, immediately prior to the
Effective Time was a holder of an outstanding option under any of the TMAI Stock
Plans, a document in form and substance reasonably satisfactory to TMAI
evidencing the foregoing assumption of such option by Avant!. Avant! will take
all corporate and other action necessary to reserve a sufficient number of
shares of Avant! Common Stock for issuance upon the exercise of the options
assumed by Avant! pursuant to this subsection (a) and upon the exercise of TMAI
Purchase Rights pursuant to subsection (b) below.
(b) The TMAI ESPP and each outstanding subscription to purchase
shares of TMAI Common Stock thereunder (a "TMAI Purchase Right") shall be
assumed by Avant! at the Effective Time of the Merger. Section 5.13(b) of the
TMAI Disclosure Schedule
32
<PAGE>
sets forth a true and complete list as of the date hereof of all holders of
outstanding TMAI Purchase Rights, including the maximum number of shares of TMAI
Common Stock purchasable under each such right, the outstanding balance in each
TMAI ESPP participant's subscription account thereunder, the fair market value
per share of TMAI Common Stock on the date the TMAI Purchase Right was granted,
and the expiration date of such right. On the Closing Date, TMAI shall deliver
to Avant! an updated Section 5.13(b) of the TMAI Disclosure Schedule current as
of such date. The TMAI Purchase Rights so assumed by Avant! shall continue to
be exercisable upon the same terms and conditions applicable to those rights
immediately prior to the Effective Time in accordance with the terms of the TMAI
ESPP, except that each such assumed TMAI Purchase Right will be exercisable for
shares of Avant! Common Stock and the purchase price payable per share of Avant!
Common Stock under the assumed right will be equal to eighty-five percent (85%)
of the lower of (i) the fair market value per share of the TMAI Common Stock on
the date the TMAI Purchase Right was granted, divided by the Exchange Ratio and
rounded up to the nearest whole cent, or (ii) the fair market value per share of
Avant! Common Stock on the date such right is exercised. Within ten (10)
business days after the Effective Time, Avant! will issue to each person who,
immediately prior to the Effective Time was a holder of an outstanding TMAI
Purchase Right, a document in form and substance reasonably satisfactory to TMAI
evidencing the foregoing assumption of such TMAI Purchase Right by Avant!. No
additional TMAI Purchase Rights shall be granted after the Effective Time, and
Avant! shall not be obligated to continue the TMAI ESPP after each TMAI Purchase
Right has been exercised.
(c) Avant! shall take such reasonable actions as are necessary
to allow eligible employees of TMAI to participate in the benefit programs of
Avant!, or alternative benefits programs in the aggregate substantially
comparable to those applicable to employees of Avant! on similar terms, as soon
as practicable after the Effective Time of the Merger. For purposes of
satisfying the terms and conditions of such programs, to the extent permitted by
Avant!'s benefit programs, Avant! shall use reasonable efforts to give full
credit for eligibility and vesting for each participant's period of service with
TMAI. The Surviving Corporation will not substitute any employee's health, life
or disability insurance coverage without first obtaining a waiver by the
substitute carrier of any preexisting condition that such employee may have.
(d) Avant! shall issue offer letters to Roy E. Jewell and Jue-
Hsien Chern substantially in the forms attached to the TMAI Disclosure Schedule
as EXHIBIT 5.13(d).
(e) On or before the Effective Time, TMAI shall take all
necessary actions to terminate its 401(k) Plan.
5.14 FORM S-8. Avant! agrees to file, no later than ten (10) days
after the Closing, a registration statement on Form S-8 covering the shares of
Avant! Common Stock issuable pursuant to (i) outstanding options under the TMAI
Stock Plans assumed by Avant! and (ii) outstanding TMAI Purchase Rights under
the TMAI ESPP assumed by Avant!. TMAI shall cooperate with and assist Avant! in
the preparation of such registration statement.
33
<PAGE>
5.15 INDEMNIFICATION.
(a) From and after the Effective Time and for a period ending
six (6) years after the Effective Time, Avant! and the Surviving Corporation
jointly and severally shall indemnify, defend and hold harmless each person who
is now, or has been at any time prior to the date of this Agreement or who
becomes prior to the Effective Time, an officer, director or employee of TMAI or
any of its subsidiaries (the "Indemnified Parties") in respect of acts or
omissions occurring on or prior to the Effective Time to the extent provided
under TMAI's Articles of Incorporation, Bylaws and indemnification agreements in
effect on the date hereof; provided that such indemnification shall be subject
to any limitation imposed from time to time under applicable law. Without
limitation of the foregoing, in the event any such Indemnified Party is or
becomes involved in any capacity in any action proceeding or investigation in
connection with any matter relating to this Agreement or the transactions
contemplated hereby occurring on or prior to the Effective Time, Avant! and the
Surviving Corporation shall jointly and severally pay as incurred such
Indemnified Party's reasonable legal and other expenses (including the cost of
any investigation and preparation) incurred in connection therewith by counsel
reasonably acceptable to such Indemnified Parties. The provisions of this
Section 5.15 are intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party, his or her heirs and representatives.
(b) If Avant! or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person or entity and shall not be the continuing or surviving person of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person or entity, then and in each such case,
proper provision shall be made so that such successors or assigns of Avant! or
the Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 5.15.
(c) Avant! shall use good faith efforts to cause to be
maintained in effect for a period of not less than three (3) years subsequent to
the Effective Time the current policies of the directors' and officers'
liability insurance maintained by Avant! and shall use good faith efforts to
cause coverage to be provided to the former directors and officers of TMAI
thereunder (provided that Avant! may substitute therefor policies of at least
the same coverage containing terms and conditions that are not less advantageous
to the former directors and officers of TMAI) with respect to matters occurring
prior to the Effective Time.
(d) All agreements in effect at the date hereof pursuant to
which TMAI covenants and agrees in any respect to indemnify or defend any
director or executive officer of TMAI from and against any liability, cost or
expense identified in Section 5.15 of the TMAI Disclosure Schedule are expressly
assumed by Avant! at the Effective Time.
(e) Promptly after the date hereof, Avant! shall enter into
indemnification agreements with directors and officers of TMAI who become
directors or officers of the Surviving Corporation, which agreements shall be
substantially identical to those which Avant! has entered into with its current
directors and officers.
34
<PAGE>
5.16 LISTING OF ADDITIONAL SHARES. Prior to the Effective Time,
Avant! shall file with the Nasdaq National Market a Notification Form for
Listing of Additional Shares with respect to the shares referred to in
Section 6.1(f).
5.17 POOLING LETTERS.
(a) TMAI shall use all reasonable efforts to cause to be
delivered to TMAI a letter of Arthur Andersen LLP dated the Effective Date to
the effect that the Merger will qualify for pooling of interests accounting
treatment if consummated in accordance with this Agreement. Such letter shall
be in a form reasonably satisfactory to Avant! and TMAI and shall be customary
in scope and substance for letters delivered by independent public accountants
in connection with transactions of this type.
(b) Avant! shall use all reasonable efforts to cause to be
delivered to Avant! a letter of KPMG Peat Marwick LLP ("KPMG") dated the
Effective Date to the effect that the Merger will qualify for pooling of
interests accounting treatment if consummated in accordance with this Agreement.
Such letter shall be in a form reasonably satisfactory to Avant! and TMAI and
shall be customary in scope and substance for letters delivered by independent
public accountants in connection with transactions of this type.
5.18 BEST EFFORTS AND FURTHER ASSURANCES. Subject to the respective
rights and obligations of TMAI and Avant! under this Agreement, each of the
parties to this Agreement shall use its best efforts to effectuate the
transactions contemplated hereby and to fulfill and cause to be fulfilled the
conditions to closing under this Agreement. Subject to the foregoing, each
party hereto, at the reasonable request of another party hereto, shall execute
and deliver such other instruments and do and perform such other acts and things
as may be necessary or desirable for effecting completely the consummation of
this Agreement and the transactions contemplated hereby.
5.19 NOTIFICATION OF CERTAIN MATTERS. TMAI shall give prompt notice
to Avant!, and Avant! shall give prompt notice to TMAI, of (i) the occurrence,
or non-occurrence, of any event, the occurrence or non-occurrence of which would
be likely to cause any representation or warranty of such party contained in
this Agreement to be untrue or inaccurate at or prior to the Effective Time and
(ii) any failure of TMAI, Avant! or Merger Sub, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 5.19 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
5.20 SHAREHOLDER AGREEMENT. TMAI and the Shareholders shall enter
into the Shareholder Agreement at EXHIBIT B concurrent with the execution of
this Agreement.
5.21 HSR ACT FILINGS. If applicable, each of Avant! and TMAI shall
promptly make its respective filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and thereafter shall make
any required submissions under the HSR Act with respect to the Merger, and shall
cooperate with each other with respect to the foregoing. TMAI and Avant! shall
give each other prior notice and consult with each other prior to any
35
<PAGE>
meeting with the United States Federal Trade Commission or Department of Justice
with respect to their respective filings under the HSR Act or any review by
either of the foregoing agencies. Each of Avant! and TMAI shall take all
reasonable actions necessary to cause the expiration of the waiting periods
under the HSR Act as promptly as possible. Neither party shall be required to
take any action pursuant to Articles IV or V that would cause a violation of the
HSR Act.
5.22 SCHEDULES. From time to time prior to the Closing Date, each of
Avant! and TMAI will promptly supplement or amend the TMAI or Avant! Disclosure
Schedules, as the case may be, with respect to any matter hereafter arising
that, if existing or occurring at or prior to the date of this Agreement, would
have been required to be set forth or described in the TMAI or Avant! Disclosure
Schedules, as the case may be, or that is necessary to correct any information
in the TMAI or Avant! Disclosure Schedules, as the case may be, or in any
representation and warranty of each of Avant! and TMAI that has been rendered
inaccurate thereby. For purposes of determining the accuracy of the respective
representations and warranties contained in Articles III and IV, and in order to
determine the fulfillment of the conditions set forth in Sections 6.2(a) and
6.3(a), the TMAI or Avant! Disclosure Schedules, as the case may be, shall be
deemed to include only that information contained therein on the date of this
Agreement and shall be deemed to exclude any information contained in any
subsequent supplement or amendment thereto unless such changes reflect actions
taken in compliance with the provisions of Articles IV and V hereof.
5.23 MANAGEMENT OF TCAD DIVISION. At the Effective Date of the
Merger, Roy Jewell will be appointed the head of Avant!'s TCAD division. As
such, Mr. Jewell will have full responsibility and authority to make all
personnel decisions related to Avant!'s TCAD division, including, without
limitation, all compensation decisions.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to this Agreement to consummate and
effect this Agreement and the transactions contemplated hereby shall be subject
to the satisfaction at or prior to the Effective Time of each of the following
conditions, subsection (e) of which may be waived, in writing, by agreement of
all the parties hereto:
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger shall
have been approved and adopted by (i) the holders of TMAI Common Stock
representing a majority of the total votes entitled to be cast on such matters
at the TMAI Shareholders Meeting at which a quorum is present in person or by
proxy and (ii) the holders of shares of Avant! Common Stock representing a
majority of the total votes cast on such matters at the Avant! Stockholders
Meeting at which a quorum is present in person or by proxy.
(b) REGISTRATION STATEMENT EFFECTIVE. The SEC shall have
declared the Registration Statement effective. No stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose, and no similar proceeding in respect
of the Proxy Statement, shall have been initiated or threatened by
36
<PAGE>
the SEC; and all requests for additional information on the part of the SEC
shall have been complied with to the reasonable satisfaction of the parties
hereto.
(c) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Merger shall be in effect; nor
shall there be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger illegal; and no temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint provision limiting
or restricting Avant!'s conduct or operation of the business of TMAI and its
subsidiaries following the Merger shall be in effect, nor shall any proceeding
brought by an administrative agency or commission or other Governmental Entity,
domestic or foreign, seeking the foregoing be pending. In the event an
injunction or other order shall have been issued, each party agrees to use its
reasonable diligent efforts to have such injunction or other order lifted.
(d) GOVERNMENTAL APPROVAL. Avant!, TMAI and Merger Sub and
their respective subsidiaries shall have timely obtained from each Governmental
Entity all approvals, waivers, authorizations and consents, if any, necessary
for consummation of or in connection with the Merger and the several
transactions contemplated hereby, including such approvals, waivers,
authorizations and consents as may be required under the HSR Act, Securities Act
and under state Blue Sky laws.
(e) TAX OPINIONS. Avant! and TMAI shall have received
substantially identical written opinions of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP and Fenwick & West LLP, respectively, in form and
substance reasonably satisfactory to them, and dated on or about the Effective
Date to the effect that the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code, and such opinions shall not have been
withdrawn. In rendering such opinions, counsel shall be entitled to rely upon,
among other things, reasonable assumptions as well as representations of Avant!,
Merger Sub and TMAI and certain shareholders of TMAI.
(f) LISTING OF ADDITIONAL SHARES. The filing with the Nasdaq
National Market of a Notification Form for Listing of Additional Shares with
respect to the shares of Avant! Common Stock issuable upon conversion of the
TMAI Common Stock in the Merger and upon exercise of the options under the TMAI
Stock Plans, and upon the exercise of TMAI Purchase Rights under the TMAI ESPP,
assumed by Avant! shall have been made.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF TMAI. The obligations of
TMAI to consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing, by
TMAI:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) The
representations and warranties of Avant! and Merger Sub in this Agreement shall
be true and correct in all material respects (other than representations and
warranties regarding litigation or other
37
<PAGE>
proceedings connected with the Merger, which shall be governed solely by the
standard set forth in Section 6.1(c) and except for such representations and
warranties that are qualified by their terms by a reference to materiality which
representations and warranties as so qualified shall be true in all respects) on
and as of the Effective Time as though such representations and warranties were
made on and as of such time except for changes contemplated by this Agreement
(except to the extent such representations and warranties speak as of an earlier
date) except, in all such cases, where such breaches of such representations and
warranties, individually or in the aggregate, have not resulted in, nor
reasonably would be expected to result in liabilities aggregating in excess of
$10,000,000 or have not substantially impaired nor reasonably would be expected
to substantially impair, Avant!'s ability after the Closing to continue to
develop, produce, sell and distribute the products and services that are
material to Avant!'s business in a manner that has resulted in or would
reasonably be expected to result in a Material Adverse Effect on Avant!, and
(ii) Avant! and Merger Sub shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by them as of the Effective Time.
(b) CERTIFICATE OF AVANT!. TMAI shall have been provided with a
certificate dated, the Effective Date, executed on behalf of Avant! by its
President and its Chief Financial Officer to the effect that, as of the
Effective Time, the condition provided for in subsection (a) above has been
satisfied.
(c) LEGAL OPINION. TMAI shall have received a legal opinion,
dated the Effective Date, from Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, counsel to Avant! and Merger Sub, in form and substance
reasonably satisfactory to TMAI.
(d) NO MATERIAL ADVERSE CHANGES. There shall have been no
material adverse change in the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, operations or
results of operations (either actual since the date of this Agreement or as such
condition has been represented pursuant to Article III hereof) of Avant! taken
as a whole from the date hereof through the Closing Date; provided, however,
that any developments, changes or results arising out of or related to the
litigation and other court proceedings described in the Avant! SEC Documents
that do not otherwise result in a Material Adverse Effect on Avant! shall not be
considered for purposes of this Section 6.2(d).
(e) THIRD PARTY CONSENTS. TMAI shall have been furnished with
evidence satisfactory to it of the consent or approval of those persons whose
consent or approval shall be required in connection with the Merger under any
material contract of Avant! or any of its subsidiaries or otherwise.
(f) AFFILIATES AGREEMENT. Each of the Affiliates of Avant!
identified on Section 5.8(b) of the Avant! Disclosure Schedule shall have
executed an Affiliates Agreement in substantially the form attached hereto as
EXHIBIT A-2.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF AVANT! AND MERGER
SUB. The obligations of Avant! and Merger Sub to consummate and effect this
Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by Avant!:
38
<PAGE>
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) The
representations and warranties of TMAI in this Agreement shall be true and
correct in all material respects (other than representations and warranties
regarding litigation or other proceedings connected with the Merger, which shall
be governed solely by the standard set forth in Section 6.1(c) and except for
such representations and warranties that are qualified by their terms by a
reference to materiality, which representations and warranties as so qualified
shall be true in all respects) on and as of the Effective Time as though such
representations and warranties were made on and as of such time except for
changes contemplated by this Agreement except, in all such cases, where such
breaches of such representations and warranties, individually or in the
aggregate, have not resulted in, nor reasonably would be expected to result in
liabilities aggregating in excess of $2,000,000 or, have not substantially
impaired nor reasonably would be expected to substantially impair, TMAI's
ability after the Closing to continue to develop, produce, sell and distribute
the products and services that are material to TMAI's business in a manner that
has resulted in or would reasonably be expected to result in a Material Adverse
Effect on TMAI, and (ii) TMAI shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by it as of the Effective Time.
(b) CERTIFICATE OF TMAI. Avant! shall have been provided with a
certificate, dated the Effective Date, executed on behalf of TMAI by its
President and its Chief Financial Officer to the effect that, as of the
Effective Time, the condition provided for in subsection (a) above has been
satisfied.
(c) LEGAL OPINION. Avant! shall have received a legal opinion,
dated the Effective Date, from Fenwick & West LLP, legal counsel to TMAI, in
form and substance reasonably satisfactory to Avant!.
(d) THIRD PARTY CONSENTS. Avant! shall have been furnished with
evidence satisfactory to it of the consent or approval of those persons whose
consent or approval shall be required in connection with the Merger under any
material contract of TMAI or any of its subsidiaries or otherwise.
(e) NO MATERIAL ADVERSE CHANGES. There shall not have occurred
any material adverse change in the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations, results of operations or prospects of TMAI and its subsidiaries,
taken as a whole from the date hereof through the Closing Date.
(f) LETTERS FROM ACCOUNTANTS. Avant! shall have received the
letter referred to in Section 5.17(b) from KPMG.
(g) AFFILIATE AGREEMENTS. Avant! shall have received from each
of the Affiliates of TMAI identified on Section 5.8(a) of the TMAI Disclosure
Schedule an executed Affiliate Agreement in substantially the form attached
hereto as EXHIBIT A-1.
(h) DISSENTING SHARES. Dissenting Shares shall consist of no
more ten (10) percent (10%) of the then outstanding shares of TMAI Capital
Stock.
39
<PAGE>
(i) CONTINUITY OF INTEREST CERTIFICATES. Avant! shall have
received a sufficient number of executed Continuity of Interest Certificates, in
the form attached hereto as EXHIBIT C, such that counsel to Avant! shall have
concluded that the Continuity of Interest requirement shall be satisfied for
purposes of issuing the tax opinion pursuant to Section 6.1(e) of this
Agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. At any time prior to the Effective Time, whether
before or after approval of the matters presented in connection with the
Merger by the shareholders of TMAI, this Agreement may be terminated:
(a) by mutual consent of Avant! and TMAI;
(b) by either Avant! or TMAI, if the Effective Date shall not
have occurred on or before January 31, 1998; PROVIDED that the right to
terminate this Agreement pursuant to this paragraph (b) shall not be available
to any party whose failure to fulfill any obligation under this Agreement has
been a significant cause of, or resulted in, the failure of the Effective Date
to occur on or before such date;
(c) by Avant!, if (i) TMAI shall breach any of its
representations, warranties or obligations hereunder, which breach would result
in a material adverse change in the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations or results of operations of TMAI and its subsidiaries, taken as a
whole, and such breach shall not have been cured within ten (10) business days
following receipt by TMAI of written notice of such breach, (ii) (x) there shall
have occurred any material adverse change in the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations, results of operations or prospects of TMAI and its
subsidiaries, taken as a whole, and (y) TMAI shall not, within twenty (20)
business days of notice from Avant! to the effect that Avant! intends to
terminate this Agreement pursuant to this clause (ii), have proposed to Avant! a
plan to mitigate the effect of such material adverse change which plan shall be
reasonably acceptable to Avant!, or (iii) the Board of Directors of TMAI shall
have withdrawn or modified its recommendation of this Agreement or the Merger in
a manner adverse to Avant! or shall have resolved to do any of the foregoing;
(d) by TMAI, if (i) Avant! shall breach any of its
representations, warranties or obligations hereunder, which breach would result
in a material adverse change in the condition (financial or otherwise),
properties, assets (including intangible assets), liabilities, business,
operations or results of operations of Avant! and its subsidiaries, taken as a
whole, and such breach shall not have been cured within ten (10) business days
following receipt by Avant! of written notice of such breach, (ii) (x) there
shall have occurred any material adverse change in the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations, results of operations or prospects of Avant! and its
subsidiaries, taken as a whole, and (y) Avant! shall not, within twenty (20)
business days of notice from TMAI to the
40
<PAGE>
effect that TMAI intends to terminate this Agreement pursuant to this
clause (ii), have proposed to TMAI a plan to mitigate the effect of such
material adverse change which plan shall be reasonably acceptable to TMAI, or
(iii) the Board of Directors of Avant! shall have withdrawn or modified its
recommendation of this Agreement or the Merger in a manner adverse to TMAI or
shall have resolved to do any of the foregoing; or
(e) by either Avant! or TMAI, if (i) any permanent injunction or
other order of a court or other competent authority preventing the consummation
of the Merger shall have become final and nonappealable or (ii) at the TMAI
Shareholders Meeting (including any adjournment or postponement thereof) the
requisite vote of shareholders of TMAI shall not have been obtained, or (iii) at
the Avant! Stockholders Meeting (including any adjournment or postponement
thereof) the requisite vote of stockholders of Avant! shall not have been
obtained.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 7.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of Avant!, Merger Sub
or TMAI or their respective officers, directors, stockholders or affiliates,
except to the extent that such termination results from the breach by a party
hereto of any of its representations, warranties or covenants set forth in this
Agreement; PROVIDED that the provisions of Section 5.4 (Confidentiality),
Section 7.3 (Expenses and Termination Fees) and this Section 7.2 and the
Confidentiality Agreement shall remain in full force and effect and survive any
termination of this Agreement.
7.3 EXPENSES AND TERMINATION FEES.
(a) Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, the fees and expenses of its
advisers, accountants and legal counsel) shall be paid by the party incurring
such expense, except that, in the event the Merger shall not be consummated for
any reason or if this Agreement shall be terminated for any reason other than
pursuant to Section 7.1(d), expenses incurred in connection with printing the
Proxy Materials and the Registration Statement, registration and filing fees
incurred in connection with the Registration Statement and the Proxy Materials
in connection with the Merger shall be shared equally by TMAI and Avant!.
(b) In the event that (i) either Avant! or TMAI shall terminate
this Agreement pursuant to Section 7.1(e)(ii) following a failure of the
shareholders of TMAI to approve this Agreement and, prior to the time of the
meeting of TMAI's shareholders, there shall have been (A) a Trigger Event with
respect to TMAI that TMAI's Board of Directors has not recommended that its
shareholders reject or (B) a Takeover Proposal with respect to TMAI which at the
time of the meeting of TMAI's shareholders shall not have been rejected by TMAI
and withdrawn by the third party, or (ii) Avant! shall terminate this Agreement
pursuant to Section 7.1(c), due in whole or in part to any failure by TMAI to
use its reasonable best efforts to perform and comply with all agreements and
conditions required by this Agreement to be performed or complied with by TMAI
prior to or on the Closing Date or any failure by TMAI's affiliates to take any
actions required to be taken hereby, (and if TMAI is not entitled to terminate
this Agreement by reason of Section 7.1(d)), and prior thereto there shall have
been (A) a Trigger Event with respect to TMAI or (B) a Takeover Proposal with
respect to TMAI
41
<PAGE>
which shall not have been rejected by TMAI and withdrawn by the third party,
then TMAI shall promptly pay to Avant! the sum of $5,250,000; provided, however,
that with respect to Section 7.3(b)(i)(A) and Section 7.3(b)(ii)(A), a Trigger
Event shall not be deemed to include the acquisition by any Person of securities
representing 10% or more of TMAI if such Person has acquired such securities not
with the purpose nor with the effect of changing or influencing the control of
TMAI, nor in connection with or as a participant in any transaction having such
purpose or effect, including without limitation (i) making any public
announcement with respect to the voting of such shares at any meeting to
consider any merger, consolidation, sale of substantial assets or other business
combination or extraordinary transaction involving TMAI, (ii) making, or in any
way participating in, any "solicitation" of "proxies" (as such terms are defined
or used in Regulation 14A under the Exchange Act) to vote any voting securities
of TMAI (including, without limitation, any such solicitation subject to
Rule 14a-11 under the Exchange Act) or seeking to advise or influence any Person
with respect to the voting of any voting securities of TMAI, (iii) forming,
joining or in any way participating in any "group" within the meaning of
Section 13(d)(3) of the Exchange Act with respect to any voting securities of
TMAI or (iv) otherwise acting, alone or in concert with others, to seek control
of TMAI or to seek to control or influence the management or policies of TMAI.
As used herein, a "Trigger Event" shall occur if any Person commences a tender
or exchange offer following the successful consummation of which the offeror and
its affiliate would beneficially own securities representing 25% or more, of the
voting power of TMAI.
(c) If this Agreement is terminated by TMAI pursuant to any
subsection of Section 7.1(d) hereof, due in whole or in part to any failure by
Avant! to use its reasonable best efforts to perform and comply with all
agreements and conditions required by this Agreement to be performed or complied
with by Avant! prior to or on the Closing Date or any failure by Avant!'s
affiliates to take any actions required to be taken hereby (and Avant! is not
entitled to terminate this Agreement by reason of Section 7.1(c) hereof), then,
Avant! shall promptly pay to TMAI a termination fee of $5,250,000.
7.4 AMENDMENT. The boards of directors of the parties hereto may
cause this Agreement to be amended at any time by execution of an instrument in
writing signed on behalf of each of the parties hereto; provided that an
amendment made subsequent to adoption of this Agreement by the stockholders of
TMAI, Avant! or Merger Sub shall not (i) alter or change the amount or kind of
consideration to be received on conversion of the TMAI Common Stock, (ii) alter
or change any term of the Articles of Incorporation of the Surviving Corporation
to be effected by the Merger, or (iii) alter or change any of the terms and
conditions of this Agreement if such alteration or change would adversely affect
the holders of TMAI Common Stock or Avant! Common Stock.
7.5 EXTENSION; WAIVER. At any time prior to the Effective Time any
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions for the benefit
of such party contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
42
<PAGE>
ARTICLE VIII
GENERAL PROVISIONS
8.1 SURVIVAL. The representations, warranties and agreements set
forth in this Agreement shall terminate at the Effective Time, except that the
agreements set forth in Article I, Section 5.4 (Confidentiality) 5.7 (Pooling
Accounting), 5.8 (Affiliates Agreements), 5.13 (Employee Benefit Plans), 5.14
(Form S-8), 5.15 (Indemnification), 5.16 (Listing of Additional Shares), 5.18
(Best Efforts and Further Assurances), 7.3 (Expenses and Termination Fees), 7.4
(Amendment), and this Article VIII shall survive the Effective Time.
8.2 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following address (or at such other address for a party as shall be
specified by like notice):
(a) if to Avant! or Merger Sub, to:
Avant! Corporation
46871 Bayside Parkway
Fremont, California 94538
Attention: President
Facsimile No.: 510-413-8080
Telephone No.: 510-413-8000
with a copy to:
Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, California 94025
Attention: Steven M. Spurlock, Esq.
Facsimile No.: 650-321-2800
Telephone No.: 650-321-2400
(b) if to TMAI, to:
Technology Modeling Associates, Inc.
595 Lawrence Expressway
Sunnyvale, California 95086
Attention: President
Facsimile No.: 408-328-0940
Telephone No.: 408-328-0930
with a copy to:
Fenwick & West LLP
43
<PAGE>
Two Palo Alto Square
Palo Alto, California 94306
Attention: Jacqueline A. Daunt
Facsimile No.: 650-494-1417
Telephone No.: 650-494-0600
8.3 INTERPRETATION. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement", "the date hereof", and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to September 7, 1997. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.5 ENTIRE AGREEMENT; NONASSIGNABILITY; PARTIES IN INTEREST. This
Agreement and the documents and instruments and other agreements specifically
referred to herein or delivered pursuant hereto, including the Exhibits, the
Schedules, including the TMAI Disclosure Schedule and the Avant! Disclosure
Schedule (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, except for the Confidentiality Agreement, which shall continue in full
force and effect, and shall survive any termination of this Agreement or the
Closing, in accordance with its terms; (b) are not intended to confer upon any
other person any rights or remedies hereunder, except as set forth in
Sections 1.6(a)-(d) and (g), 1.7-1.9, 5.13, 5.14, 5.15 and 5.16; and (c) shall
not be assigned by operation of law or otherwise except as otherwise
specifically provided.
8.6 SEVERABILITY. In the event that any provision of this Agreement,
or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7 REMEDIES CUMULATIVE. Except as otherwise provided herein, 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.
44
<PAGE>
8.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California (without regard to its
principles of conflicts of law).
8.9 RULES OF CONSTRUCTION. The parties hereto agree that they have
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
45
<PAGE>
IN WITNESS WHEREOF, Avant!, TMAI and Merger Sub have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized, all as of the date first written above.
AVANT! CORPORATION
By:
-------------------------------------------
Gerald C. Hsu
Chairman of the Board,
Chief Executive Officer and President
CARDINAL MERGER CORPORATION
By:
--------------------------------------------
Gerald C. Hsu
President
TECHNOLOGY MODELING ASSOCIATES, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
<PAGE>
Companies (AVNT) Page 1
AVANT! AND TECHNOLOGY MODELING ASSOCIATES (TMA) AGREE TO MERGE; /PR NEWSWIRE/
AVANT! IS THE TRUE DEEP-SUBMICRON ICDA LEADER
SEPTEMBER 8, 1997 8:11 AM EDT
FREMONT, Calif., Sept. 8/PRNewswire/ -- Avant! Corporation (Nasdaq:AVNT) and
Technology Modeling Associates, Inc. (Nasdaq: TMAI) today announced the signing
of a definitive agreement to merge. Gerald C. Hsu will remain as chairman,
president and CEO of Avant! Corporation. Roy E. Jewell, president and CEO of
TMA, will become the vice president of Avant!'s TCAD Business Unit.
The merger agreement provides that Avant! will issue shares of Avant! common
stock in exchange for all outstanding TMA equity. Total value of the deal is
approximately $150 million. The proposed merger transaction is structured as a
tax-free reorganization and will be accounted for as a pooling of interests and
is expected to close in the fourth quarter of 1997. The closing of the merger
is subject to regulatory and stockholder approval, the availability of
pooling-of-interests accounting treatment, and other customary closing
conditions.
"Our rapid internal growth and aggressive strategic acquisitions have made
Avant! the fastest growing company in EDA history. We have merged winning
technologies and companies to create a strong leadership position in the IC
design automation (ICDA) market, from concept to silicon and front to back
solutions. These solutions range from logical simulation, floorplanning, place
and route, formal and physical verification, and circuit simulation to signal
analysis tools," stated Gerald C. Hsu, chairman, president, and CEO of Avant!
Corporation. "TMA is the leader in the commercial technology computer-aided
design (TCAD) area, which is essential for developing manufacturable,
next-generation fabrication processes and devices as well as accurately
calibrating higher level design tools to deep-submicron silicon. We believe that
the strong synergy between TCAD tools and Avant!'s best-in-class circuit
simulation, verification, and analysis tools assures that designers of complex
IC's will achieve silicon success. This acquisition gives Avant! the ability to
create the unique ECAD-to-TCAD solution."
Roy E. Jewell, president and CEO of TMA, said, "TMA brings tremendous
expertise to Avant! in the area of process and device simulations, and
relationships with key silicon vendors and semiconductor foundries around the
world. The market opportunity for physical simulation has been growing
steadily as deep-submicron (DSM) and new very deep-submicron (VDSM) processes
have started to come on line. We are looking forward to combining TMA's
product offerings with Avant!'s leading ICDA tools and strong worldwide
distribution channels. The combination of Avant! and TMA, allowing ECAD to
comprehend underlying technology through TCAD, now establishes Avant! as the
indisputable leading ICDA company for the VDSM age."
About Technology Modeling Associates, Inc. (TMA)
TMA develops and licenses physical simulation software for integrated circuit
design and manufacturing, providing analysis capabilities from process
specification and mask layout to final circuit performance. TMA, founded in
1979, is based in Sunnyvale, California, U.S.A., with sales and support
locations worldwide, World Wide Web site: http:/www.tmai.com. E-mail:
[email protected].
About Avant!
Avant! (pronounced ah VANH tee) Corporation develops, markets, and supports
integrated circuit design automation (ICDA) software for the simulation
layout, verification, and analysis of deep submicron ICs including
microprocessors, microcontrollers, application-specific standard products
(ASSPs) and complex application-specific integrated circuits (ASICs). The
company has its new headquarters in Fremont, California. Telephone:
+1-510-413-8000. Fax: +1-510-413-8080. Worldwide Web:
http://www.avanticorp.com.
Avant! is a trademark of Avant! Corporation. TMA
is trademark of Technology Modeling Associates, Inc. All other company and
product names mentioned herein are trademarks or registered trademarks of
their respective owners and should be treated as such.
<PAGE>
Companies (AVNT) Page 2
Except for any historical information presented herein, matters presented in
this press release are forward-looking statements that involve risks and
uncertainties. The Company's future results could differ materially from the
results presented herein. Factors that could cause or contribute to such
differences include, but are not limited to, obtaining regulatory and
stockholder approval and satisfaction of the other conditions to closing, as
well as the ability of the companies to successfully integrate their
operations, and those discussed from time to time in the companies' public
reports filed with the Securites and Exchange Commission, including those
discussed in Avant!'s report on Form 10-K for the year ended December
31, 1996, and including the risks discussed in the "Risk Factors" section
included in Avant!'s Registration Statement on Form S-3 as declared
effective by the Securities and Exchange Commission on January 31, 1997.
SOURCE Avant! Corporation
- -C- PR Newswire. All rights reserved.
ADDITIONAL SOURCES OF INFORMATION
TELL ME MORE - FROM INFOSEEK
Company Profile - From E*TRADE: AVNT, TMAI
Stock Charts - From Quote.Com: AVNT, TMAI
SEC Filings - From EDGAR Online: AVNT, TMAI
Company Capsule - From Hoover's Online: AVNT, TMAI
Quick Facts - From Market Guide: AVNT, TMAI
