EXHIBIT (e)(21)
TERMINATION AGREEMENT AND MUTUAL RELEASE
This TERMINATION AGREEMENT AND MUTUAL RELEASE dated as of March 12, 2002
(this "Agreement") is made and entered into by and among Synopsys, Inc., a
Delaware corporation ("Parent"), Oak Merger Corporation, a Delaware corporation
("Merger Sub") and wholly-owned subsidiary of Parent, and IKOS Systems, Inc., a
Delaware corporation (the "Company"). Parent, Merger Sub and the Company are
collectively referred to herein as the "Parties" and each individually as a
"Party." Capitalized terms used but not defined herein shall have the meaning
set forth in the Merger Agreement (as defined below).
RECITALS
WHEREAS the Parties entered into an Agreement and Plan of Merger and
Reorganization dated as of July 2, 2001 (as amended, the "Merger Agreement")
pursuant to which, subject to the terms and conditions stated therein, Merger
Sub was to merge with and into the Company and the Company was to continue as
the surviving corporation and a wholly-owned subsidiary of Parent;
WHEREAS contemporaneously with the execution of the Merger Agreement,
Parent, Company and certain stockholders or employees of the Company entered
into Company Voting Agreements (the "Voting Agreements");
WHEREAS on December 7, 0000 Xxxxxx Xxxxxxxxxxx ("Fresno"), a
wholly-owned subsidiary of Mentor Graphics Corporation ("Mentor"), commenced a
cash tender offer to acquire all of the outstanding shares of the Company's
common stock for $11.00 cash per share (the "Mentor Tender Offer");
WHEREAS on January 16, 2002 as part of the Mentor Tender Offer, Mentor
delivered to the Company a proposed Agreement and Plan of Merger and
Reorganization by and among Mentor, Fresno and the Company providing, among
other things, that Mentor would amend the Mentor Tender Offer to eliminate the
"Termination Fee Condition" and that the Company and Mentor promptly take such
actions as required to cause the dismissal with prejudice of the lawsuits (the
"Deal Related Litigation") currently pending before the Delaware Court of
Chancery and the United States District Court for the District of Delaware
relating to the Merger Agreement and the Mentor Tender Offer (the "Mentor
Proposal"); and
WHEREAS, the Board of Directors of the Company has determined that the
Mentor Proposal constitutes a Superior Proposal and the Company desires to
terminate the Merger Agreement under Section 8.1(g) of the Merger Agreement upon
the terms and conditions of this Agreement and Parent agrees to accept such
termination upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises, and the
representations, warranties, covenants, and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
1. Termination of Merger Agreement. The Parties agree that this
Agreement shall constitute notice of termination under Section 8.1(g) of the
Merger Agreement. Upon the execution and delivery of this Agreement, the Company
shall pay to Parent the sum of five million five hundred thousand dollars
($5,500,000) by irrevocable wire transfer of immediately available funds to the
account identified on Schedule A. Effective and contingent upon such payment,
the Merger Agreement shall be terminated and the effects of termination shall be
as set forth in Section 8.2 (other than Section 8.2(b)) of the Merger Agreement.
2. Termination of Voting Agreements. The Parties agree and acknowledge
that the Voting Agreements shall terminate by their terms upon termination of
the Merger Agreement.
3. Releases.
(a) By Parent and Merger Sub. Subject (as a condition subsequent) to the
dismissal with prejudice of the Deal Related Litigation, each of Parent and
Merger Sub, and each of their respective successors and assigns, shall forever
release and discharge the Company and each of its respective successors and
assigns (together with any present and former officers, directors, and other
agents, representatives and advisors including any investment bankers, attorneys
or accountants) (the "Company Releasees") from any and all claims, demands,
liens, actions, suits, causes of action, obligations, controversies, debts,
costs, attorneys' fees, expenses, damages, judgments, orders, and liabilities of
whatever kind or nature at law, in equity, or otherwise, whether now known or
unknown, suspected or unsuspected, liquidated or unliquidated, fixed or
contingent and whether or not concealed or hidden (collectively, "Claims")
relating to or arising out of (i) any action or failure to act or any
misstatement or omission, in each case prior to the execution and delivery of
this Agreement by the Parties, in actual or alleged violation of the Merger
Agreement or the Voting Agreements or in actual or alleged breach of any duty or
obligation in connection therewith or (ii) the termination of the Merger
Agreement; provided, however, that nothing herein shall prevent or limit the
enforcement of rights and obligations (x) under the Merger Agreement which by
the terms of the Merger Agreement survive the termination of the Merger
Agreement or (y) under this Agreement; and provided further that nothing herein
shall be construed to release any of the Company Releasees from any Claim for
breach of any provision of the Confidentiality Agreement which is intended to
survive following an acquisition of the Company by a third party or any of the
provisions of the Merger Agreement (other than Section 8.2(b)) which by the
terms of Section 8.2 of the Merger Agreement survive termination of the Merger
Agreement.
(b) By the Company. The Company, and each of its respective successors
and assigns, hereby forever releases and discharges Parent and Merger Sub and
each of their respective successors and assigns (together with any present and
former officers, directors, and other agents, representatives and advisors
including any investment bankers, attorneys or accountants) (the "Parent
Releasees") from any Claims relating to or arising out of (i) any action or
failure to act or any misstatement or omission, in each case prior to the
execution and delivery of this Agreement by the Parties, in actual or alleged
violation of the Merger Agreement or the Voting Agreements or in actual or
alleged breach of any duty or obligation in connection therewith or (ii) the
termination of the Merger Agreement or the payment of the termination fee in
accordance with this Agreement and Sections 8.1(g) and 8.3 of the Merger
Agreement; provided, however, that nothing herein shall prevent or limit the
enforcement of rights and obligations (x) under the Merger Agreement which
by the terms of the Merger Agreement survive the termination of the Merger
Agreement or (y) under this Agreement; and provided further that nothing herein
shall be construed to release any of the Parent Releasees from any Claim for
breach of any provision of the Confidentiality Agreement which is intended to
survive following an acquisition of the Company by a third party or any of the
provisions of the Merger Agreement (other than Section 8.2(b)) which by the
terms of Section 8.2 of the Merger Agreement survive termination of the Merger
Agreement.
(c) Waiver of Other Claims. Each of the Parties acknowledges that there
is a possibility that subsequent to the execution of this Agreement, they will
discover facts or incur or suffer claims which were unknown or unsuspected at
the time this Agreement was executed, and which if known by them at that time
may have materially affected their decision to execute this Agreement. Each of
the Parties acknowledges and agrees that by reason of this Agreement, and the
release contained in the preceding paragraphs, they are assuming any risk of
such unknown facts and such unknown and unsuspected claims. Each of the Parties
have been advised of the existence of Section 1542 of the California Civil Code,
which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Notwithstanding such provisions, the releases contained in this Agreement shall
constitute a full release in accordance with its terms. Each of the Parties
knowingly and voluntarily WAIVE the provisions of Section 1542, as well as any
other statute, law, or rule of similar effect, and acknowledge and agree that
this waiver is an essential and material term of this release and the settlement
which leads to it, and without such waiver the settlement would not have been
accepted. This waiver includes, but is not limited to, a waiver of the right to
a claim of fraudulent inducement to enter into this Agreement as to such unknown
facts and such unknown and unsuspected claims, except that it shall not include
misrepresentations as to the representations and warranties contained within
this Agreement. Each of the Parties hereby represent that they have been advised
by their legal counsel, and that they understand and acknowledge the
significance and consequence of this release and of this specific waiver of
Section 1542 and other such laws of other jurisdictions.
4. Cooperation. The Parties shall cooperate with each other to promptly
prepare and file all necessary documentation to withdraw the joint proxy
statement/prospectus filed by the Parties with the SEC in connection with the
Merger Agreement.
5. Representations of the Parent and Merger Sub. Parent and Merger Sub,
each represent that: (a) it is duly organized, validly existing and in good
standing under the laws of the State of Delaware; (b) it has all requisite
corporate power and authority to enter into this Agreement and to take the
actions contemplated hereby; (c) its execution and delivery of this Agreement
and the actions contemplated hereby have been duly authorized by all necessary
corporate action; and (d) this Agreement has been duly executed and delivered
and constitutes a valid and binding agreement, enforceable against it in
accordance with its terms.
6. Representations of the Company. The Company hereby represents that
(a) it is duly organized, validly existing and in good standing under the laws
of the State of Delaware; (b) it has all requisite corporate power and authority
to enter into this Agreement and to take the actions contemplated hereby; (c)
its execution and delivery of this Agreement and the actions contemplated hereby
have been duly authorized by all necessary corporate action; (d) this Agreement
has been duly executed and delivered and constitutes a valid and binding
agreement, enforceable against it in accordance with its terms; and (e)
execution and delivery of this Agreement and compliance with the terms hereof
(including payment of the amount set forth in Section 1 hereof) do not and will
not breach the terms of any agreement to which the Company is a party.
7. Amendment. This Agreement may not be amended except by execution of
an instrument in writing signed on behalf of each of the Parties.
8. 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.
9. Entire Agreement; Assignment; Parties in Interest. This Agreement (i)
constitutes the entire agreement among the Parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the Parties with respect to the subject matter hereof;
(ii) shall not be assigned by any Party, whether by operation of law or
otherwise; and (iii) is not intended to, and shall not be construed as,
conferring upon any person other than the Parties any rights or remedies.
10.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. 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.
11.Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without regard to
the laws that might otherwise govern under applicable principles of conflicts of
law. Each of the Parties irrevocably consents to the exclusive jurisdiction and
venue of any court located within the County of New Castle in the State of
Delaware, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of Delaware for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction and such process.
IN WITNESS WHEREOF, the Company, Parent and Merger Sub have caused this
Termination Agreement and Mutual Release to be executed and delivered by their
respective officers thereunto duly authorized, all as of the date first written
above.
SYNOPSYS, INC.
By: /s/ XXXXXX X. XXXXXXX
_____________________________________
Name: _______________________________
Title:_______________________________
IKOS SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
_____________________________________
Name: XXXXX X. XXXXX
_______________________________
Title: CEO
_______________________________
OAK MERGER CORPORATION
By: /s/ XXXXXX X. XXXXXXX
_____________________________________
Name: _______________________________
Title:_______________________________
SIGNATURE PAGE TO TERMINATION AGREEMENT AND MUTUAL RELEASE
