EXHIBIT 2.10
ASSET PURCHASE AGREEMENT
THIS AGREEMENT dated as of August 2, 1997, by and among Zycad Corporation,
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a Delaware corporation, its wholly owned subsidiary, Attest Software, Inc.
("ATTEST") both with offices at 00000 Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000
(collectively, "ZYCAD") and Test Systems Strategies, Inc., a Delaware
corporation, ("TSSI"), with offices at 0000 X.X. Xxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxx 00000.
WHEREAS, ZYCAD is engaged in the TDX software fault simulation and test
business (the "BUSINESS");
WHEREAS, TSSI desires to purchase from ZYCAD, and ZYCAD desires to sell to
TSSI, substantially all of the assets of the Attest Business ("Assets") and
rights of ZYCAD and ATTEST related to the Assets as provided by this Agreement,
upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE I PURCHASE AND SALE OF ASSETS
Section 1.1 Description of Assets to be Acquired. Upon the terms and
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subject to the conditions set forth in this Agreement, at the Closing (as
defined in Section 8.1), ZYCAD agrees to convey, sell, transfer, assign and
deliver to TSSI, and TSSI shall purchase from ZYCAD, all rights, title and
interest of ZYCAD at the Closing in and to the Assets. Attached as Schedule 1 is
a complete list of Assets being purchased by TSSI from ZYCAD, which includes
items specified on Schedule 1.1 (a list of all equipment used in the Business),
Schedules 1.2-1.5 (lists of all software used in the Business), Schedules 1.6-
1.7 (lists of all trademarks used in the Business), and Schedule 1.8 (a list of
all Documentation used in the Business).
Section 1.2 Excluded Assets. It is agreed that notwithstanding the
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foregoing, Assets shall not include (i) office furniture or supplies, (ii) PXP
and Xplus products and technology (iii) current and future products or
technologies developed by ZYCAD's GateField Division, (iv) third party software
and hardware including SimWave, Fault Manager and MME.
Section 1.3 Assigned Contracts. ZYCAD agrees to assign its interest in
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the contracts specified in Schedule 2 (the "Assigned Contracts") to TSSI as of
the Closing Date and TSSI agrees to assume and be liable for ZYCAD's interest in
the Assigned Contracts on and after the Closing Date.
Section 1.4 Assumed Obligations. TSSI agrees to assume and be
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responsible for ZYCAD's obligations under the Product Maintenance Contracts
specified in Schedule 3, provided that ZYCAD compensates TSSI for the period
starting on the Closing date of this Agreement and
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ending with the Expiration date of each respective Product Maintenance Contract
at the standard rate for such product maintenance according to the ZYCAD Price
List (effective June 1, 1997) included as Schedule 3.1.
Section 1.5 Liabilities Not Assumed. Other than the Assumed Obligations
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of ZYCAD listed on Schedule 3, TSSI shall not assume, nor shall TSSI or any
affiliate, or any officer, director, employee, stockholder or agent of TSSI, be
deemed to have assumed or guaranteed, any liabilities, obligations, litigation,
disputes, debts, payables, counterclaims, rights of set-off or return, or
commitments or claims, whether such liabilities are contingent or otherwise, or
direct or indirect, of ZYCAD in existence on or prior to or after the Closing
Date or otherwise or based on any events, facts or circumstances in existence
prior to or in connection with or after the sale of the Assets or in connection
with or arising from any activities of ZYCAD or any services provided by or
goods or assets sold by or products delivered to TSSI.
Section 1.6 Non-Assignment or Subcontracting of Certain Assets.
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Notwithstanding anything to the contrary in this Agreement, to the extent that
the assignment or subcontracting hereunder of any of the Assets shall require
the consent of any other party (or in the event that any of the same shall be
nonassignable or unable to be subcontracted), neither this Agreement nor any
action taken pursuant to its provisions shall constitute an assignment or
subcontract or an agreement to assign or subcontract if such assignment or
subcontract or attempted assignment or subcontract would constitute a breach
thereof or result in the loss or diminution thereof; provided, however, that in
each such case, ZYCAD shall use its best efforts to obtain the consent of such
other party to an assignment to TSSI. If such consent is not obtained by the
Closing, ZYCAD shall cooperate with TSSI in any arrangement designed for TSSI to
perform ZYCAD's obligations with respect to such Asset after the Closing, which
arrangements may include enforcement, for the account and benefit of TSSI, of
any and all rights of ZYCAD against any other person arising out of the breach
or cancellation by such other person or otherwise, all of such actions of ZYCAD
to be at the direction and expense of ZYCAD. ZYCAD shall reimburse or pay TSSI
for all costs and expenses, including increased obligations, resulting from an
inability of TSSI to receive the benefits of such assignment or subcontract.
ARTICLE II PURCHASE PRICE
Section 2.1 Consideration. Upon the terms and subject to the conditions
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contained in this Agreement, in consideration for the Assets and the covenants
expressed herein and in full payment therefor, TSSI will pay the purchase price
set forth in Section 2.2.
Section 2.2 Amount; Payment. The purchase price for the Assets shall be
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Two Million Two Hundred Fifty Thousand Dollars $2,250,000 (the "PURCHASE PRICE")
payable in cash at the Closing by TSSI by wire transfer.
Section 2.3 Bulk Sales Laws. TSSI and ZYCAD hereby waive compliance with
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the California Uniform Commercial Code Bulk Transfers and any other applicable
state bulk transfer laws. ZYCAD agrees to indemnify TSSI against all claims
(other than Assumed Liabilities) brought
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by a creditor of ZYCAD against TSSI or the Assets based on noncompliance with
such laws in connection with the sale of the Assets.
ARTICLE III TAXES
Section 3.1 Taxes. ZYCAD shall electronically transfer the Software of
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Schedules 1.2 - 1.5 to TSSI's facility in Beaverton, Oregon, and the parties
agree that title to the Software shall thereupon pass to TSSI in the state of
Oregon upon completion of such transfer. ZYCAD and TSSI shall each pay one-half
of any sales, use and other transfer taxes arising out of the purchase and sale
of the remaining Assets as listed in Schedules 1.1 and 1.6-1.8.
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations of TSSI. TSSI represents to ZYCAD that:
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(a) Organization. It is a corporation duly organized, validly
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existing and in good standing under the laws of Delaware.
(b) Authorization. It has hill corporate power and authority to
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enter into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. It has taken all necessary and
appropriate corporate action with respect to the execution and delivery of this
Agreement, and with respect to TSSI, the Agreement constitutes a valid and
binding obligation enforceable in accordance with its terms except as limited by
item (i) applicable bankruptcy, insolvency, moratorium, reorganization or other
laws affecting creditors' rights and remedies generally, (ii) except as may be
required by the applicable provisions of the bulk sales provisions of applicable
state laws,(iii) except as the indemnification provisions contained in this
Agreement may be limited by principles of public policy.
(c) Broker Fees. It is not obligated to pay any fees or expenses
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of any broker or finder in connection with the origin, negotiation or execution
of this Agreement or in connection with any of the transactions contemplated
hereby.
(d) Performance of Agreement. All covenants, conditions and other
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obligations under this Agreement which are to be performed or complied with by
TSSI prior to the Closing shall have been hilly performed and complied with at
or prior to the Closing.
Section 4.2 Representation of ZYCAD. ZYCAD hereby represents and
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warrants to TSSI that:
(a) Corporate Organization of ZYCAD. ZYCAD is a corporation duly
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organized, validly existing and in good standing under the laws of Delaware, and
has all requisite power and authority to conduct the Business in the places
where such Business is now conducted.
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(b) Authorization of ZYCAD. ZYCAD has full corporate power and
----------------------
authority to enter into this Agreement and to perform its obligations hereunder,
and to consummate the transactions contemplated hereby, including, without
limitation, the execution and delivery of this Agreement, general conveyances,
bills of sale, assignments, and other documents and instruments evidencing the
conveyance of the Assets, or delivered in accordance with Section 8.2 hereunder
(the "CLOSING DOCUMENTS"). ZYCAD has taken all necessary and appropriate
corporate action with respect to the execution and delivery of this Agreement
and the Closing Documents. No other corporate proceedings on the part of ZYCAD
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement constitutes a valid and binding obligation
of ZYCAD, enforceable in accordance with its terms except as limited by
applicable bankruptcy insolvency, moratorium, reorganization or other laws
affecting creditors' rights and remedies generally.
(c) Brokers' and Finders' Fees. ZYCAD is not obligated to pay any
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fees or expenses of any broker or finder in connection with the origin,
negotiation or execution of this Agreement or in connection with any
transactions contemplated hereby.
(d) Customers. ZYCAD has provided TSSI with a list which
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includes all customers to which ZYCAD has supplied products relating to the
Business during the period of 1996 and 1997 ("TDX FAULT AND TEST CUSTOMERS").
The TDX Fault and Test Customer list is attached hereto as Schedule 4.
(e) Title to Property. ZYCAD has good and marketable title to the
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Assets, free and clear of all easements, mortgages, pledges, liens,
encumbrances, security interests, equities, charges, clouds and restrictions of
any nature whatsoever except for Licensed Software which is licensed by ZYCAD as
specified on Schedule 2, and except for Equipment under loan or lease as
specified in Schedule 1.1. By virtue of the deliveries made at the Closing,
TSSI will obtain good and marketable title to the Assets, free and clear of all
easements, mortgages, pledges, liens, encumbrances, security interests, charges,
equities, clouds and restrictions of any nature whatsoever, except as stated
above. All Assets, including machinery and equipment owned, leased or otherwise
used by ZYCAD are in good operating condition and repair, reasonable wear and
tear excepted, and are suitable and adequate for use in the ordinary course of
business and conform in all material respects to all applicable laws. All leases
are binding, valid and enforceable in accordance with their terms subject to the
affect, if any, of (i) applicable bankruptcy and other similar laws affecting
the rights of creditors generally, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies, and there are no
current defaults or events which have occurred with which the giving of notice
or lapse of time or both would constitute a material default under any lease.
After the Closing, TSSI xxxx be entitled to the continued use and possession of
the property leased by it, for the terms specified in such leases and for the
purposes for which such property is used. There is no pending or threatened
condemnation or similar proceeding affecting any of the real property owned or
leased by ZYCAD.
(f) Assets. The Assets include all intellectual property and all
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other property in which ZYCAD has any right, title and interest with respect to
the Business. The Assets (excluding
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the Excluded Assets) include all the assets necessary to operate the Business in
the same manner as the Business was operated by ZYCAD prior to the Closing. The
Assets are suitable for the purpose or purposes for which they are being used,
are in good operating condition and in reasonable repair, and free from any
known defects, except such minor defects as do not interfere with the continued
use thereof. Each tangible Asset has been serviced and maintained in accordance
with customary industry practices. Subject to normal wear and tear, such
plants, facilities, machinery, and equipment are capable of and are producing
sound and merchantable products.
(g) Trademarks, Trade Names and Copyrights. All trademarks,
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trade names, copyrights, trade secrets or other proprietary rights that are
associated with the Assets listed in Schedules 1.1-1.8 or used on the conduct of
the Business are owned or are useable by ZYCAD. The list of source codes,
specifications, product manuals and other materials included as necessary to
conduct the Business on Schedules 1.1 - 1.8 are true, complete and correct and
will not be impaired or restricted as a result of the consummation of the
transactions contemplated hereby. The conduct of the Business conducted by ZYCAD
or the use and ownership of the Assets does not infringe any patent, trademark,
trade name, service xxxx, copyright, trade secret, or other proprietary right of
any other person and or company. No litigation is pending or to the best
knowledge of ZYCAD has been threatened against ZYCAD for the infringement of any
patents, copyrights, trademarks or trade names of any other party or for the
misuse or misappropriation of any trade secret, know-how or other proprietary
right owned by any other party; nor, to the best knowledge of ZYCAD, does any
basis exist for any such litigation.
(h) Compliance with Law. ZYCAD has complied and is in compliance
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with all applicable foreign, federal, state and local laws, statutes, licensing
requirements, rules and regulations, and judicial or administrative decisions
applicable to the Business including without limitation all export control laws.
ZYCAD has been granted any and all licenses, permits (temporary and otherwise),
authorization and approvals from federal, state, local and foreign government
regulatory bodies necessary to carry on the Business as currently conducted, all
of which are currently valid and in full force and effect. All of such licenses,
permits, authorizations, and approvals shall be transferred to effective as of
the Closing, and shall be valid and in hill force and effect to the same extent
as if ZYCAD were continuing operation of the Business. To the best of ZYCAD's
knowledge, there is no order issued, investigation or proceeding pending or
threatened, or notice served with respect to any violation of any law,
ordinance, order, writ, decree, rule or regulation issued by any federal, state,
local or foreign court or governmental agency or instrumentality applicable to
the Business.
(i) No Violation of Other Instruments. Neither the execution of
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this Agreement nor the performance hereof by ZYCAD will: (i) conflict with or
result in any breach or violation of the terms of any decree, judgment, order,
law or regulation of any court or other governmental body now in effect
applicable to ZYCAD or the Assets; (ii) conflict with, or result in, with or
without the Passage of time or the giving of notice, any breach of any of the
terms, conditions and provisions of, or constitute a default under, or result in
the creation of any lien, charge, or encumbrance upon any of the Assets pursuant
to, any indenture, mortgage, lease, agreement or other instrument to which ZYCAD
is a party or by which it or any of the Assets are bound; (iii) permit the
acceleration of the
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maturity of any indebtedness of ZYCAD secured by the Assets; (iv) violate or
conflict with any provision of ZYCAD's Certificate of Incorporation, Bylaws, or
similar organizational instruments; or (v) give rise to any dissenter's rights
or other claims from ZYCAD stockholders. No consent from any third party and no
consent, approval or authorization of, or declaration, filing or registration
with, any government or regulatory authority is required to be made or obtained
in order to permit the execution, delivery or performance of this Agreement by
ZYCAD, or the consummation of the transactions contemplated by this Agreement.
(j) Litigation. Neither ZYCAD nor, to the best knowledge of
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ZYCAD, any officer, director, employee or agent of ZYCAD is a party to any
pending or threatened action, suit, proceeding or investigation, at law or in
equity or otherwise in, for or by any court or other governmental body
involving: (i) the Assets or (ii) the transactions contemplated by this
Agreement; nor does any basis exist for any such action, suit, proceeding or
investigation. There is no claim, investigation, litigation, action, suit, or
proceeding, administrative or judicial, pending or threatened against ZYCAD or
any Representative, or involving the Assets, at law or in equity, before any
federal, state, local, or foreign court, or regulatory agency, or other
governmental authority, including, without limitation, any unfair labor practice
or grievance proceedings or otherwise. ZYCAD has not received any notice of any
such proceeding.
(k) Taxes. (a) All Taxes (as hereinafter defined) due or payable
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by ZYCAD, and all interest and penalties thereon, whether disputed or not, have
been paid in full. All tax returns, statements, reports, forms and other
documents required to be filed in connection therewith have been duly and timely
filed (and no extension of any filing date applicable thereto has been requested
or granted) and were correct and complete in all respects. All deposits required
by law to be made by ZYCAD with respect to employees' withholding taxes have
been duly made. ZYCAD is not delinquent in the payment of any Tax, assessment or
governmental charge or deposit, and ZYCAD does not have any Tax deficiency or
claim currently pending, outstanding or asserted against it, and there is no
basis for any such Tax deficiency or claim. There is no audit currently pending
regarding any Taxes and ZYCAD has not extended the period in which any Tax could
be assessed or collected. (b) No tax is required to be withheld pursuant to
Section 1445 of the Code as a result of the transfers contemplated by this
Agreement, and ZYCAD is not a person other than a United States person within
the meaning of the Code. There are no liens for Taxes upon the Assets except
liens for current Taxes not yet due. There is no contract, agreement, plan or
arrangement, including but not limited to the provisions of this Agreement,
covering any employee or independent contractor or former employee or
independent contractor of ZYCAD that, individually or collectively, could give
rise to the payment by ZYCAD of any amount that would not be deductible pursuant
to Section 280G or Section 162 of the Code. None of the Assets (i) is property
that is required to be treated as owned by any other person pursuant to the so-
called "safe harbor lease" provisions of former Section 168(f)(8) of the Code,
(ii) directly or indirectly secures any debt the interest on which is tax exempt
under Section 103(a) of the Code or (iii) is "tax exempt use Property within the
meaning of Section 168(b) of the Code. (c) For purposes of this Agreement, "Tax"
(and, with correlative meaning, "Taxes" and "Taxable") means (I) any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, Profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium,
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property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any taxing authority responsible for the imposition of any such tax
(domestic or foreign), (ii) any liability for the payment of any amounts of the
type described in (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group for any Taxable period and (iii) any
liability for the payment of any amounts of the type described in (i) or (ii) as
a result of any express or implied obligation to indemnity any other person.
(l) Environmental Compliance. In connection with the operation
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of the Business, ZYCAD is not in violation of, or delinquent in respect to, any
material decree, order or arbitration award or law, statute, or regulation of or
agreement with, or any license or permit from, any governmental authority to
which it or its properties, assets, personnel or business are subject (or to
which it is itself subject) and which relates to the environment (including,
without limitation, laws, statutes, rules and regulations and the common law
relating to environmental matters and contamination of any type whatsoever
("ENVIRONMENTAL LAWS"). ZYCAD has obtained no permits, licenses and other
authorizations pursuant to any Environmental Laws. No failure to obtain any such
permit, license or authorization will have a material adverse effect on the
Business.
(m) Accuracy of Documents and Information. The copies of all
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instruments, agreements, other documents and written information furnished to
TSSI by ZYCAD are complete and correct in all material respects. No
representations or warranties made by ZYCAD in this Agreement, nor any document,
written information, statement or Schedule furnished to TSSI or its agents
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements or facts contained
herein or therein not misleading. There is no fact which materially and
adversely affects ZYCAD, the Business or the Assets known to ZYCAD which has not
been expressly and fully set forth in this Agreement or the Schedules hereto.
(n) Financial Information. The Zycad EDA Business Plan provided
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to TSSI, which included projected revenues and costs and expenses for the
Business for the June 30, 1997 Quarter as well as the second half of 1997 and
calendar 1998 was prepared in good faith and ZYCAD reasonably believes there is
a reasonable basis for such projections (taking into account the inherent
uncertainties involved in drafting any set of projections); however, these
projected revenues, costs and expenses for the Business are not binding in any
way on ZYCAD.
(o) Absence of Certain Changes and Events. Since July 1, 1997
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there has not been:
(i) Any material adverse change in the financial condition,
results of operation, assets, liabilities, business or prospects of the Business
or any occurrence, circumstance, or combination thereof which reasonably could
be expected to result in any such adverse change;
(ii) Any event, including, without limitation, shortage of
materials or supplies fire, explosion, accident, requisition or taking of
property by any governmental agency,
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flood, drought, earthquake or other natural event, dot, act of God or the public
enemy, or damage, destruction or other casualty, whether covered by insurance or
not, which has had an adverse affect on the Business or the Assets or any such
event which reasonably could be expected to have such an affect on the Business
or the Assets;
(iii) Any transaction relating to or involving ZYCAD (other
than the transactions contemplated herein) relating to the Business which was
entered into or carded out by ZYCAD other than in the ordinary and usual course
of business;
(iv) Any change made by ZYCAD in its method of operating the
Business or its accounting practices relating thereto;
(v) Any mortgage, pledge, lien, security interest,
hypothecation, charge or other encumbrance imposed or agreed to be imposed on or
with respect to the Assets other than liens arising with respect to taxes not
yet due and payable and such minor liens and encumbrances, if any, which arise
in the ordinary course of business and are not material in nature or amount and
do not detract from the value of the Assets or impair the operations conducted
thereon or any discharge or satisfaction thereof;
(vi) Any sale, lease or disposition of, or any agreement to
sell, lease or dispose of any of the Assets, other than sales, leases or
dispositions in the usual and ordinary course of business and consistent with
prior practice;
(vii) Any modification, waiver, change, amendment, release,
rescission, accord and satisfaction or termination of, or with respect to, any
material term, condition or provision of any contract, agreement, license or
other instrument to which ZYCAD is a party and relating to or affecting the
Business, the Asset or the Assumed Obligations other than any satisfaction by
performance in accordance with the terms thereof in the usual and ordinary
course of business and consistent with prior practice;
(viii) Any labor disputes or disturbances materially affecting
in an adverse fashion the business or financial condition of the Business,
including, without limitation, the filing of any petition or charge of unfair
labor practices with the National Labor Relations Board;
(ix) Any adverse relationships or conditions with vendors or
customers which may have an adverse financial effect or nonfinancial effect on
the Business or the Assets;
(x) Any waivers of any rights of substantial value relating
to the Business;
(xi) Any dispositions or abandonment, or any discussions
related thereto, of any of ZYCAD's trademark, tradename, patent, copyright or
other intellectual property rights or any application therefore necessary or
incidental to the conduct of the Business;
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(xii) Any disposition or disclosure of or any discussions
related thereto, any of ZYCAD's proprietary trade secrets, formula, processes,
engineering data or technical know-how necessary or incidental to the conduct of
the Business; or
(xiii) Any other event or condition of any character which
materially adversely affects, or may reasonably be expected to so affect, the
Assets or the results of operations or financial condition of ZYCAD relating to
the Business.
(p) Conduct of Business.
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(i) Since the date of this Agreement ZYCAD will not, without
the prior written consent of TSSI:
(A) Make any sale, license or other disposition of the TDX
Products (the "Products") other than at the list price or in conformity with its
sales policy regarding discounts.
(B) Grant any license of the TDX Product without charge or
upon a loan basis except as approved by TSSI;
(C) Make any changes in the compensation of ZYCAD's
employees listed on Schedule 5 (the "Employees"), including without limitation
any changes pursuant to any bonus, pension, profit-sharing or other plan or
commitment or any increases in the compensation payable or to become payable to
any of the Employees;
(D) Enter into any new discussions regarding the license,
sale or redistribution of source code for the Products;
(E) Enter into any new discussions regarding OEM or
redistribution of the Products; or
(F) Entered into or conducted any discussion with any other
prospective purchaser of the Assets.
(G) Conduct all discussions and negotiations with third
parties regarding any license, sale or redistribution of source code for the
Products;
(H) Conduct discussions and negotiations with third parties
regarding OEM or redistribution of the Products; and
(ii) At all times since July 1,1997, ZYCAD has conducted the
Business diligently in the ordinary course thereof (subject to the limitations
set forth in Agreement) and has used reasonable commercial efforts to preserve
intact the organization of the Business and the good will of its customers,
suppliers and others having business relations with it.
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(q) Undisclosed Liabilities. There are no debts, liabilities or
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obligations with respect to the Business or to which the Assets are subject,
liquidated, unliquidated, accrued, absolute, contingent or otherwise except
those arising under the Assigned Contracts or Assumed Liabilities set forth
herein;
(r) Proprietary Rights. Schedules 1.1-1.8 sets forth all Assets
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which ZYCAD owns and uses or has used in connection with the Business. The
Assets include all patent rights, copyrights, trademarks, domain name (Attest),
trade secrets, information, proprietary rights and processes necessary for the
Business as now and proposed to be conducted without any conflict with or
infringement upon the rights of others. ZYCAD is the sole owner of all right,
title and interest in and to all such Assets (except for loaned and Leased
Equipment specified in Schedule 1.1 and Licensed Software specified in Schedule
2) free and clear of all liens, encumbrances, claims, rights of use and
restrictions whatsoever.
Neither the Assets nor any other processes, methods or operations
employed by ZYCAD in the Business, now or in the past, infringes upon any
proprietary rights or intellectual property of any other person, firm,
corporation or other entity. There is not pending or threatened any claim or
litigation against ZYCAD contesting the right of ZYCAD to engage in or employ
any such processes, methods, operations or the Assets. Without limiting the
generality of the foregoing, all Assets that consist of code, except that owned
by third parties as Licensed Software specified in Schedule 2 are owned by ZYCAD
and there are no pending legal actions challenging this ownership, nor are there
any legal actions pending or, to the best of ZYCAD's knowledge, threatened in
any other way connected with the Business, including without limitation "look
and feel" contentions or other intellectual property claims.
The documentation of such Assets is current, accurate and
sufficient in detail and content to identify it and permit its fill and proper
use by TSSI without reliance on the special knowledge of others.
There are no other ownership claims with respect to the Assets, and
no liens, encumbrances, restrictions, or legal or equitable claims of others
with respect to the Assets. ZYCAD has taken reasonable security measures to
protect the secrecy, confidentiality, and value of the Assets. Any employee or
other person who, either alone or in concert with others, developed, invented,
discovered, derived, programmed or designed any of the Assets or any part
thereof, or who has knowledge of or access to information relating to it, has
been put on notice that the Assets are proprietary to ZYCAD and not to be
divulged or misused and has executed a proprietary information and inventions
agreement. The Assets are presently valid and protectable, and not part of the
public knowledge or literature, nor has it been used, divulged, or appropriated
for the benefit of any past or present employees or other persons, or to the
detriment of ZYCAD.
(s) Restrictive Documents or Orders. ZYCAD is not a party to or
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bound under any agreement, contract, order, judgment or decree, or any similar
restriction not of general application which materially adversely affects, or
reasonably could be expected to materially adversely affect (i) the continued
operation by TSSI of the Business after the Closing on
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substantially the same basis as said business was theretofore operated or (ii)
the consummation of the transactions contemplated by this Agreement.
(t) Contracts and Commitments. There are no contracts,
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commitments, leases, permits, and other instruments (written or oral) binding
upon ZYCAD with respect to the Business except as set forth in Schedule 2. Prior
to the Closing, ZYCAD has delivered to TSSI true and complete copies of all such
items and any amendments thereto. All of ZYCAD's contracts, commitments, leases,
permits and instruments relating to the Business are in hill force and effect
and are valid, binding and enforceable in accordance with their respective
provisions, and ZYCAD is not in default nor has there occurred an event or
condition which, with the passage of time or giving of notice (or both), would
constitute a default with respect to the payment or performance of any
obligation thereunder; and no claim of such a default has been asserted and
there is no basis upon which such a claim could validly be made.
(u) Third Party Consents. No consent, approval, or authorization
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of any third party on the part of ZYCAD is required in connection with the
consummation of the transactions contemplated hereunder except for the Contracts
requiring consent to assignment listed on Schedule 2 hereto.
(v) Labor Relations.
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(i) With respect to the Business, ZYCAD has not failed to
comply in any respect with Title VII of the Civil Rights Act of 1964, as
amended, the Fair Labor Standards Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, all applicable federal, state and local laws,
rules and regulations relating to employment, and all applicable laws, rules and
regulations governing payment of minimum wages and overtime rates, and the
withholding and payment of taxes from compensation of employees.
(ii) There are no labor controversies pending or threatened
between ZYCAD and any of the Employees or any labor union or other collective
bargaining unit A representing any of the Employees.
(w) Pension, Profit Sharing, Etc. The Zycad Investment Plan
----------------------------
401(k) Plan ("PLAN") is the only "Employee Pension Benefit Plan" as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
(ERISA) which is applicable to the Employees. The Internal Revenue Service has
issued a favorable determination letter with respect to the Plan which has not
been revoked or modified. Nothing has occurred which gives reason to believe
that the Plan may be revoked or modified, and no change or amendment of the Plan
under Section 401 of the Internal Revenue Code of 1986, as amended (the "IRC
CODE") or any of the Trusts maintained pursuant thereto under Section 501 of the
Code has been made. All contributions required by law shall have been made. No
event of the type set forth in Section 4043(b) of ERISA has occurred and is
continuing with respect to the Plan other than as may result from the
transactions contemplated hereby. There are no material claims, investigations
or lawsuits which have been asserted or instituted against the assets of ZYCAD
under the Plan and no reasonable basis
11
for any such claim or lawsuit exists. The Plan is being maintained, operated,
and administered in all material respects in accordance with its terms and all
provisions of ERISA (including rules and regulations thereunder) and other
applicable laws.
(x) Interested Party Relationships. ZYCAD does not have any
------------------------------
material financial interest, direct or indirect, in any material supplier or
customer or other party to any contract which is material to the Business.
(y) Certain Payments. In connection with the Business, ZYCAD has
----------------
not and no person directly or indirectly on behalf of ZYCAD has, (i) made or
received any payment that was not legal to make or receive; (ii) engaged in any
transaction or made or received any payment that was not properly recorded in
ZYCAD's books in accordance with generally accepted accounting principles and
all applicable laws; or (iii) created or used any "off-book" account or fund.
(z) Product Warranties. ZYCAD has made available to TSSI copies
------------------
of its warranty policy and all outstanding warranties or guarantees relating to
any of the Products with respect to the Business other than warranties or
guarantees implied by law, and there are no additional liabilities pursuant to
such warranties. All such warranties and guarantees comply with all applicable
laws including, without limitation, the Xxxxxxxx-Xxxx Warranty Act and all rules
and regulations of the FTC adopted under that legislation. ZYCAD is not aware of
any claim asserting (a) any damage or loss caused by any Product, or (b) any
breach of any express or implied product warranty or any other similar claim
with respect to any Product other than standard warranty obligations (to
replace, repair or refund) made by ZYCAD in the ordinary course of business,
except for those claims that, if adversely determined against the Business,
would not have a material adverse change on the results of operations or
financial condition of the Business.
(aa) Complete Disclosure. No representation or warranty by ZYCAD
-------------------
in this Agreement and no exhibit, schedule, statement, certificate or other
writing furnished to TSSI pursuant to this Agreement or in connection with the
transactions contemplated thereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statements contained herein and therein not misleading.
(bb) Performance of Agreement. All covenants, conditions and other
------------------------
obligations under this Agreement which are to be performed or complied with by
ZYCAD prior to the Closing have been hilly performed and complied with at or
prior to the Closing.
(cc) Books and Records. The books and records of ZYCAD to which
-----------------
TSSI and its accountants and attorneys have been given access are the true books
and records of ZYCAD and truly and fairly reflect the underlying facts and
transactions in all material respects.
(dd) ExperTest Source Code. The copy of the ExperTest source code
---------------------
provided to TSSI by ZYCAD at closing is a complete and accurate copy of the
ExperTest source code as of September 30, 1993, as provided to Attest Software,
Inc. from ExperTest.
12
ARTICLE V COVENANTS
Section 5.1 Covenants Against Disclosure.
-------------------------------------------
(a) Except as may be required by law, statute, rule or
regulation, ZYCAD and TSSI agree not to (a) disclose to any person, association,
firm, corporation or other entity in any manner, directly or indirectly, any
information or data relevant to the Business, whether of a technical or
commercial nature, or (b) use, or permit or assist, by acquiescence or
otherwise, any person, association, firm, corporation or other to use, in any
manner, directly or indirectly, any such information or data, excepting only
disclosure use of such data or information as is at the time generally known to
the public and which did not become generally known through any breach of any
provision of this Section 5.1. In the event that either party shall determine
that it is obligated to file this Agreement or any other documents between TSSI
and ZYCAD with the Securities and Exchange Commission ("SEC,'), that party shall
so notify the other and shall request confidential treatment for such period of
time and for such items as shall reasonably be requested by the other, including
without limitation the names of the Employees.
(b) The parties agree to maintain the confidentiality of the
terms and conditions of this Agreement, except to the extent required by law,
statute, rule or regulation, provided, however, that the parties agree to issue
a mutually agreeable joint press release upon Closing. Each party will review
and agree to the text of any other public announcement related to this Agreement
or the transactions contemplated hereby prior to the release thereof.
Section 5.2 Documents and Records.
------------------------------------
(a) In the event of termination of this Agreement prior to the
Closing, ZYCAD and its representatives and TSSI and its representatives will
each return to the other all documents, work papers and other material
(including all copies made thereof) obtained from the other at anytime in
connection with the transactions contemplated hereby and will use all reasonable
efforts to keep confidential any such information so obtained unless such
information is readily ascertainable from published information or trade
secrets.
(b) As soon as practicable, but in any event within ten (10) days
after TSSI's reasonable request, from and after the Closing, ZYCAD shall
deliver, or cause to be delivered, to TSSI such historical financial information
and data and such other information and data concerning the operations of the
Business prior to the Closing, and render such cooperation and use its best
efforts to cause its independent public accountants to render such cooperation
as TSSI shall reasonably request, in order to enable TSSI to complete and file
all federal, state or foreign forms and reports which it may be required to file
with respect to the operations and business of ZYCAD prior to the Closing or to
respond to audits by any taxing authorities with respect to such operations.
13
Section 5.3 Post-Closing Access By ZYCAD to Information. With respect to
--------------------------------------------------------
the books and records of ZYCAD relating to the Business prior to the Closing,
where there is a legitimate purpose not injurious to TSSI, including, without
limitation, an audit of ZYCAD by the Internal Revenue Service or any other
taxing authority, TSSI shall allow ZYCAD or its representatives appropriate
access to such books and records during regular business hours, upon reasonable
notice.
Section 5.4 Injunctive Relief. ZYCAD and TSSI acknowledge and agree that
------------------------------
their respective remedies at law for any breach of their respective obligations
under this Article V hereof would be inadequate, and agree and consent that
temporary and permanent injunctive relief may be granted in a proceeding which
may be brought to enforce any provision of this Article V without the necessity
of proof of actual damage.
Section 5.5 Non-Competition. Commencing on the date of this Agreement and
----------------------------
continuing for a period of five (5) years thereafter, ZYCAD shall not directly
or indirectly, throughout the United States and the World, develop, market, or
sell software fault simulation or test products, except for software fault
simulation products which exclusively run on ZYCAD's XP and PXP accelerator
products. Both parties agree that this restriction is reasonable in scope given
the nature of the Business.
Section 5.6 Tax Returns. ZYCAD shall be responsible for and pay when due
------------------------
(I) all of ZYCAD's Taxes attributable to or levied or imposed upon the Assets
relating or pertaining to the period (or that portion of any period) ending on
or prior to the date of the Closing and (ii) all Taxes attributable to, levied
or imposed upon, or incurred in connection with the Business prior to the date
of the Closing. ZYCAD shall timely file within the time period for filing, or
any extension granted with respect thereto, all of ZYCAD's Tax returns required
to be filed in connection with the Assets and any portion of any such Tax
returns connected therewith shall be true and correct and completed in
accordance with applicable laws.
ARTICLE VI. EMPLOYMENT MATTERS
Section 6.1 Employee Solicitation by TSSI. TSSI shall have the right,
------------------------------------------
but not the obligation, to offer employment to any of ZYCAD's employees listed
on Schedule 5 at the salary levels and on other terms and conditions to be
determined in TSSI's" sole discretion effective as of the Closing. TSSI shall
have no liability for accrued wages (including salaries and commissions),
severance pay, sick leave or other benefits, or employee plans of any type or
nature on account of ZYCAD's employment of or termination of such employees',
and ZYCAD shall indemnify TSSI and hold TSSI harmless against any liability
arising out of any claims for such pay or benefits or any other claims arising
from ZYCAD's employment of or termination of employment of such employees.
Employees shall continue to be offered employment by ZYCAD through the Closing
and ZYCAD shall continue in force all current salaries and benefits.
Section 6.2 Employee Plans. TSSI is not assuming any of the employee
---------------------------
plans of ZYCAD and TSSI shall have no liability whatsoever to employees of ZYCAD
with respect to accrued or future benefits under any such employee plans,
whether or not any of such employees
14
are offered employment by, or become employees of, TSSI, and ZYCAD shall defend,
indemnify and hold TSSI harmless against any claims that it has liability under
such employee plans.
Section 6.3 Nonsolicitation. CREDENCE agrees not to solicit the
----------------------------
employment of any individual who is a ZYCAD employee as of the date of this
Agreement (other than an Employee) through August 20, 1998. Except as otherwise
permitted hereunder, in the event the Closing does not occur CREDENCE and TSSI
agrees not to solicit the employment of any Employee through August 20, 1998.
Zycad agrees not to solicit the employment of any individual who is an employee
of CREDENCE or subsidiary of CREDENCE as of the date of this Agreement through
August 20, 1998.
ARTICLE VII CONFIDENTIALITY
Section 7.1 Confidentiality. All proprietary information provided to the
----------------------------
other party shall be kept confidential pursuant to the terms of the
Nondisclosure Agreement signed between the parties The parties agree to maintain
the confidentiality of the terms and conditions of this Agreement except to the
extent required by law or pursuant to this Agreement; provided, however, the
parties agree to issue a mutually agreeable joint press release upon execution
of this Agreement announcing such execution. Each party will review and agree to
the text of any other public announcement related to this Agreement or the
transactions contemplated hereby prior to the release thereof. In addition, in
the event that either party shall determine that it is obligated to file this
Agreement with the Securities Exchange Commission (the "SEC"), that party shall
notify the other party.
ARTICLE VIII CLOSING
Section 8.1 Closing. The closing for the transaction contemplated by
--------------------
this Agreement shall be on August 21, 1997 (the "CLOSING") or such other time as
mutually agreed upon by the parties. The Closing shall take place electronically
or at such other place or date as may be agreed upon from time to time in
writing by TSSI and ZYCAD
Section 8.2 Deliveries by ZYCAD. At the Closing, ZYCAD shall deliver to
--------------------------------
TSSI, all duly and properly executed, the following:
(a) A good and sufficient Xxxx of Sale, which shall be in form and
substance satisfactory to TSSI selling, delivering, transferring and assigning
to TSSI title to all of ZYCAD's right, title and interest to the Assets, free
and clear of all mortgages, pledges, liens, encumbrances, security interests,
equities, charges, clouds and restrictions of any nature whatsoever, except as
otherwise provided herein.
(b) Intellectual Property and Proprietary Information Assignment,
Assignment and Assumption Agreement for Assigned Contracts, Assignment of
Registered Marks, and Assignment of Copyrights.
15
(c) A copy of the ExperTest source code as of September 30, 1993.
(d) An opinion of Xxxxxxx X. Xxxxx, general counsel to ZYCAD,
dated the date of the Closing, as to the following matters:
(i) ZYCAD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to enter into the transactions
contemplated herein and in the Related Agreements.
(ii) This Agreement and other documents delivered at the
Closing by ZYCAD have been duly executed and delivered by ZYCAD, and are legally
valid and binding obligations of ZYCAD, enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to creditors; rights generally, now or hereafter
in effect, and except to the extent that courts may not grant specific
performance of contractual provisions involving matters other than the payment
of money;
(iii) All necessary corporate action has been taken by ZYCAD
to authorize the execution and delivery of this Agreement and the performance by
ZYCAD of its obligations and thereunder.
(iv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated thereby have
not, and will not, result in a breach of or conflict with any of the terms,
provisions and conditions of the Certificate of Incorporation or Bylaws of
ZYCAD, any applicable judicial or administrative writ, decree or order of which
such counsel has knowledge, or, to the best of such counsel's knowledge, any
deed, mortgage, indenture, contract, agreement or instrument known to counsel to
which ZYCAD is party or by which it is bound;
(v) To the best of such counsel's knowledge, ZYCAD has
good and marketable title to the Assets, free and clear of all easements,
mortgages, pledges, liens, encumbrances, security interests, equities, charges,
clouds and restrictions of any nature whatsoever, except for the loaned and
Leased Equipment specified in Schedule 1.1 Licensed Software as specified in
Schedule 2. By virtue of the deliveries made at the Closing, TSSI will obtain
good and marketable title to the Assets, free and clear of all easements,
mortgages, pledges, liens, encumbrances, security interests, charges, equities,
clouds and restrictions of any nature whatsoever, except as stated above.
(vi) To the best of such counsel's knowledge, the conduct
of the Business conducted by ZYCAD does not infringe any patent, trademark,
tradename, service xxxx, copyright, trade secret, or other proprietary right of
any other person. No litigation is pending or has been threatened against ZYCAD
for the infringement of any patents, copyrights, trademarks or tradenames of any
other party for the misuse of misappropriation of any trade secret, know how or
other proprietary right owned by any other party; nor to the best of such
counsel's knowledge, does any basis exist for such litigation.
16
(vii) To the best of such counsel's knowledge, neither ZYCAD
nor any officer, director, employee or agent of ZYCAD is a party to any pending
or threatened action, suit, proceeding or investigation at law or in equity or
otherwise in, for or by any court or other governmental body which could have a
material adverse affect on the Assets or the transactions contemplated by the
Agreement.
(e) Lien release for the Assets from Coast Business Credit.
(f) Such other separate instruments of sale, assignment or
transfer that TSSI may reasonably deem necessary or appropriate in order to
perfect, confirm or evidence in TSSI title to all or any part of the Assets.
ARTICLE IX POST CLOSING
Section 9.1 Post Closing Obligations.
-------------------------------------
ZYCAD shall deliver the following documents to TSSI within a reasonable
time after Closing:
(a) Consent of the Lessor of the Leased Equipment specified on
Schedule 1.1 to a change of location for the Leased Equipment to TSSI's
Location.
(b) Consents for the assignment of those Assigned Contracts
specified in Schedule 2 where consent of the assignment to TSSI is required.
ZYCAD agrees to supply administrative support at $60 per hour for up to
sixty (60) days after Closing to assist in the transfer of the Business to TSSI
ZYCAD also agrees to retain as employees those Employees with immigration Visas
("Visa Employees) for a period up to four (4) months or until a new Hi Visa has
been issued for employment by TSSI and ZYCAD shall lend the Visa Employees back
to TSSI and TSSI shall reimburse ZYCAD 100% of the salary, benefits and Expenses
for such Visa Employees.
ARTICLE X INDEMNIFICATION
Section 10.1 Survival of Representations, Warranties and Agreements.
-------------------------------------------------------------------
Notwithstanding any investigation conducted at any time with regard thereto by
or on behalf of either party, all representations, warranties, covenants and
agreements of each party in this Agreement shall survive the execution, delivery
and performance of this Agreement. No investigation made by or on behalf of TSSI
with respect to ZYCAD shall be deemed to affect TSSI's reliance on the
representations, warranties, covenants and agreements made by ZYCAD contained in
this Agreement and shall not be a waiver of TSSI's rights to indemnity as herein
provided for the breach of inaccuracy of or failure to perform or comply with
any of ZYCAD's representations, warranties, covenants or agreements under this
Agreement. Nothing in this Agreement shall be construed as limiting in any
17
way the remedies that may be available to a party in time event of fraud
relating to the representations warranties, agreements or covenants made by any
other party in this Agreement. All Representations and warranties of each party
set forth in this Agreement shall be deemed to have been made again by such
party at and as of the Closing. The obligations of indemnity provided herein
with respect to the representations and warranties of ZYCAD set forth in Section
4.2 of the Agreement shall terminate one (1) year after the Closing and such
representations and warranties of ZYCAD under Section 4.2 shall terminate the
shorter of either three (3) years after the Closing, or the lull running of any
and all Statute of Limitations on any and all claims that the legal or
beneficiary owners of the licensed software under the License Agreement dated
September 30, 1993 between Attest Software, Inc. and ExperTest Inc., as
identified in Schedule 2, may assert against Attest Software, Inc., its heirs,
legal representatives, successors and assigns, but in no case shall such period
of indemnification terminate in less than one (1) year after the Closing. The
representations and warranties by TSSI under Section 4.1 shall terminate one (1)
year after the Closing.
Section 10.2 Indemnification. ZYCAD hereby agrees to indemnify and hold
-----------------------------
harmless TSSI and each of its affiliates, subsidiaries, officers, directors and
stockholders against any and all losses, liabilities, damages, demands, claims,
suits, actions, judgments or causes of action, assessments, costs and expenses,
including, without limitation, interest, penalties, attorneys' fees, any and all
expenses incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation (collectively, "DAMAGES"),
asserted against, resulting to, imposed upon, or incurred or suffered by TSSI
and each subsidiaries, and its affiliates, officers, directors, stockholders,
successors, or assigns directly or indirectly, as a result of or arising from an
any inaccuracy in or breach or nonfulfillment of any of the representations,
warranties, covenants or agreements made by ZYCAD in this Agreement, any facts
or circumstances constituting such an inaccuracy, breach or nonfulfillment, or
any liability of ZYCAD imposed upon TSSI as transferee of the Assets, including,
without limitation, any liability arising out of any lien or any obligation or
claim brought by creditors of ZYCAD or claims based an the premise that the sale
of the Assets did not comply with the bulk sales provisions and any liability
arising out of obligations to ZYCAD's employees (including, without limitation,
any obligations under any employee benefit, profit sharing, or pension or
welfare plan) or out of ZYCAD's status as employer of employees. ZYCAD
represents that royalties are due certain individuals by reason of the License
Agreement between Attest Software Inc. and ExperTest, Inc. Any claim for such
royalties is specifically covered by the indemnification provisions of this
Section 10.2.
(a) In the event that TSSI and its parent suffers Damages, TSSI
shall within one hundred twenty (120) days of actually discovering such Damage
give ZYCAD written notice thereof ("Notice of Claim"). The Notice of Claim shall
state in reasonable detail the nature of the claim, the specific provisions in
this Agreement alleged to have been breached, and the amount of the claim for
indemnification. Such amount shall represent TSSI good faith estimate of the
Damages. ZYCAD shall have thirty (30) days from receipt of the Notice of Claim
to accept or reject the claim for indemnification. Any claim for Damages
accepted by ZYCAD or any claim determined as valid
18
under the claim procedure set forth below, shall be deemed "Established Damages"
for the purposes of this Agreement.
(b) If a Notice of Claim is given pursuant to subsection (a)
above, and no rejection is received within the thirty (30) day period specified
above, then ZYCAD shall be deemed to have accepted such claim. If ZYCAD rejects
a claim within such thirty (30) day period, the parties shall, in good faith,
attempt to negotiate a resolution of such claim within sixty (60) days
thereafter (the "RESOLUTION PERIOD"). If the parties do not reach resolution
during the Resolution period, then TSSI may, within thirty (30) days after the
end of the Resolution Period proceed to submit the controversy to arbitration
under the rules then in effect of the American Arbitration Association. The
determination of the arbitrator(s) shall be binding, final and conclusive on the
parties. The expenses in connection with any arbitration shall be borne equally
by the parties unless determined otherwise by the arbitrator(s). If as a result
of such arbitration it is determined that ZYCAD is obligated for such Damages,
the amount set by such arbitration shall be the amount of the Established
Damages and ZYCAD shall owe such amount. If as a result of such arbitration it
is determined that ZYCAD has no obligation to indemnify, ZYCAD shall have no
further liability on the claim.
(c) If a claim for indemnification arises out of a claim by a
third party, including without limitation any governmental agency, body or
authority, ("THIRD PARTY CLAIM") in the Notice of Claim, TSSI shall state in
reasonable detail the nature of the claim and the basis for asserting such
claim. Such notice shall be given in accordance with subsection (a) above and
shall specify whether TSSI intends to defend the claim. If the claim has
resulted in the commencement of litigation, TSSI shall take all necessary legal
steps to preserve the legal rights of ZYCAD until such time as ZYCAD is able to
assume or participate in the defense of the litigation. If TSSI elects to defend
the claim, ZYCAD shall have the right to participate in the defense of the
claim. If TSSI does not elect to defend the claim, ZYCAD shall have the
obligation to defend the claim and TSSI shall have the right to participate in
such defense and hereby agrees to cooperate with ZYCAD and make available to it
or its counsel all records and other material reasonably required to defend the
claim. If TSSI is defending the claim, ZYCAD shall be given written notice of
any bona fide settlement offers received with respect to the claim. Within
twenty (20) days of receipt of such offer, ZYCAD may elect in writing to accept
the settlement offer. If ZYCAD wishes to accept such settlement offer and TSSI
does not, then the claim shall be subject to a maximum indemnification in the
amount of the settlement offer and the right to such indemnification of TSSI
shall be deemed established in such amount. So long as ZYCAD may continue to
have liability for such claim, TSSI shall not have the right to settle such
claim without the prior written consent of ZYCAD So long as a Third-Party Claim
is pending, TSSI shall hold in abeyance its claim for indemnification. If a
settlement is reached which results in any liability on the part of TSSI or if a
Judgment is rendered against TSSI which is not properly appealed or appealable,
then TSSI shall be entitled to assert its claim for indemnification. Each party
shall be responsible for its own costs and expenses including legal fees
incurred in investigating and defending such Third Party Claim, except that
ZYCAD shall pay the reasonable attorneys' fees: (a) for taking legal actions
necessary to preserve the legal rights of ZYCAD in connection with defending the
claim of TSSI and (b) which are found to be indemnifiable under this Agreement.
19
ARTICLE XI CUSTOMER SUPPORT
Section 11.1 Support. TSSI shall support the current TDX Fault and Test
----------------------
Customers on maintenance as set forth in Schedule 3.2 after the Closing Date and
ZYCAD shall have no obligation therefor. The amount of the Purchase Price shall
be reduced by the amount of prepaid maintenance received by ZYCAD and the value
of free maintenance for the Products given away by ZYCAD which extends beyond
the Closing Date.
ARTICLE XII GENERAL
Section 12.1 Entire Agreement. This Agreement, the exhibits and schedules
-------------------------------
hereto, and the documents referred to herein embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersede all prior and contemporaneous agreements and understandings, oral
or written, relative to said subject matter, except that the Nondisclosure
Agreement signed by the parties shall survive as an independent agreement.
Section 12.2 Binding Effect; Assignment. This Agreement and the various
-----------------------------------------
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon ZYCAD its successors and permitted assigns, and TSSI and their
successors and permitted assigns.
Section 12.3 Notice. All notices and other communications required or
---------------------
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party for whom
intended or by being deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail bearing the address shown in
this Agreement for, or such other address as may be designated in writing
hereafter by, such party:
If to ZYCAD Zycad Corporation
00000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
If to TSSI Test Systems Strategies, Inc.
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: X. X. Xxxxxxx, Chairman
With a copy to CREDENCE: Credence Systems Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx H, Okumoto, General Counsel
20
Section 12.4 Captions. The Article and Section headings of this
-----------------------
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof
Section 12.5 Expenses of Transaction; Attorneys Fees. ZYCAD and TSSI
------------------------------------------------------
shall each pay their own respective costs and expenses incurred in connection
with this Agreement, and the transactions contemplated hereby. In the event of
any litigation or arbitration or other judicial proceedings arising out of this
Agreement, the prevailing party in any such proceeding shall be entitled to
recover from the other reasonable attorney fees and all costs incurred by such
party in such proceeding.
Section 12.6 Waiver; Consent. This Agreement may not be changed,
------------------------------
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given
consented thereto. Except to the extent that a party hereto may have otherwise
agreed in writing, no waiver by that party of any condition of this Agreement or
breach hereunder or thereunder shall be deemed to be a waiver of any other
condition or subsequent or prior breach of the same or any other obligation or
representation by the other party, nor shall any forbearance by the first party
to seek a remedy for any noncompliance or breach by the other party be deemed to
be a waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
Section 12.7 No Third-Party Beneficiaries. Except as otherwise
-------------------------------------------
expressly provided for in this Agreement, nothing herein, expressed or implied;
is in tended or shall be construed to confer Upon or give to any person, firm,
corporation or; legal entity, other than the parties hereto, any rights,
remedies or other benefits under or by reason of this Agreement.
Section 12.8 Counterparts. This Agreement may be executed
---------------------------
simultaneously in multiple Counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
Section 12.9 Gender. Whenever the context requires, words used in the
---------------------
singular shall be construed to mean or include the plural and vice versa, and
pronouns of any gender shall be deemed to include and designate the masculine,
feminine or neuter gender.
Section 12.10 Severability. If one or more provisions of this Agreement
---------------------------
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
Section 12.11 Remedies of TSSI. ZYCAD agrees that the Assets are unique
-------------------------------
and not otherwise readily available to TSSI Accordingly, ZYCAD acknowledges
that, in addition to all
21
other remedies to which TSSI is entitled, TSSI shall have the right to enforce
the terms of this Agreement by a decree of specific performance, provided TSSI
is not in material default hereunder.
Section 12.12 Governing Law. This Agreement shall in all respects be
----------------------------
construed in accordance with and governed by the laws of the State of
California, as applied to contracts entered into and to be performed solely
within the state.
Section 12.13 Cooperation and Records Retention. ZYCAD and TSSI shall (i)
------------------------------------------------
each provide the other with such assistance as may reasonably be requested by
them in connection with the preparation of any Tax return, statement, report,
form or other document (hereinafter collectively a "Tax Return"), or in
connection with any audit or other examination by any taxing authority or any
judicial or administrative proceedings relating to liability for Taxes, (ii)
each retain and provide the other, with any records or other information which
may be relevant to any such Tax Return, audit or examination, proceeding or
determination, and (iii) each provide the other with any final determination of
any such audit or examination, proceeding or determination that affects any
amount required to be shown on any Tax Return of the other for any period.
Without limiting the generality of the foregoing, ZYCAD and TSSI shall retain,
until the applicable statute of limitations (including any extensions) have
expired, copies of all Tax Returns, supporting work schedules and other records
or information which may be relevant to such Tax Returns for all tax periods or
portions thereof ending before or including the date of Closing and shall not
destroy or otherwise dispose of any such records without first providing the
other party with a reasonable opportunity to review and copy the same. TSSI
shall keep the original copies of the records at its facilities in California
and elsewhere, if applicable, and, at ZYCAD's expense, shall provide copies of
the Records to ZYCAD upon ZYCAD's request.
Section 12.14 Other Remedies. Any and all remedies herein expressly
-----------------------------
conferred upon a party will be deemed cumulative with and not exclusive of any
other remedy conferred hereby, or by law or equity upon such party, and the
exercise by a party of any one remedy will not preclude the exercise of any
other remedy. other than equitable remedies available to any party or claims
based on fraud, Article X hereto shall be the sole remedy of any party hereto
for breaches of representations, warranties, covenants and agreements set forth
in this Agreement.
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Section 12.15 Schedule List. Time following schedules are incorporated into
---------------------------
this Agreement by Reference:
Schedule 1 List of Assets
Schedule 1.1 Equipment
Schedule 1.2 All Software Modules solely developed by ZYCAD or ATTEST
Schedule 1.3 All Software Modules substantially modified (greater or
equal to 20% new code) from ExperTest Modules by ZYCAD or
ATTEST
Schedule 1.4 All Software Modules Substantially the same (less than 20%
new code) as ExperTest Modules
Schedule 1.5 All Other Software Modules
Schedule 1.6 Registered Trademarks
Schedule 1.7 Unregistered Trademarks
Schedule 1.8 Technical Documentation and Manuals for TDX
Schedule 2 List of Assigned Contracts
Schedule 3 Assumed Obligations
Schedule 3.1 TDX Price List
Schedule 3.2 List of Product Maintenance Contracts
Schedule 4 TDX Fault and Test Customer List
Schedule 5 Employee List
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
TEST SYSTEMS STRATEGY, INC.
By: [SIGNATURE ILLEGIBLE]
-------------------------------
Title: [ILLEGIBLE]
----------------------------
ZYCAD CORPORATION
By: [SIGNATURE ILLEGIBLE]
-------------------------------
Title: [ILLEGIBLE]
----------------------------
ATTEST SOFTWARE, INC.
By: [SIGNATURE ILLEGIBLE]
-------------------------------
Title: Corporate Secretary
----------------------------
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