EXHIBIT 2.01
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is entered
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into as of this 22nd day of July, 1996, by and between Xxxxxx & Chyan
Technology, Inc., a Delaware corporation ("CCT") and UniCAD, Inc., a
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Massachusetts corporation ("UniCAD").
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RECITALS
A. CCT is engaged in the business of developing, marketing and supporting
software tools that help designers route the wires that interconnect the
electronic devices on printed circuit boards and integrated circuits.
B. UniCAD is engaged in the business of developing, marketing and
supporting computer aided design software tools and related products.
C. The management of CCT and the management of UniCAD believe that the
products of both companies are complementary, that UniCAD will benefit from
CCT's products and position in the industry and that CCT will benefit from
UniCAD's products and technology, and therefore have determined that it is in
the best interests of both companies that CCT acquire all of the outstanding
capital stock of UniCAD.
D. The parties intend that, subject to the terms and conditions of this
Agreement, a new Massachusetts corporation that will be organized as a wholly-
owned subsidiary of CCT ("Newco") will merge with and into UniCAD in a reverse
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triangular merger (the "Merger"), with UniCAD to be the surviving corporation of
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the Merger, all pursuant to the terms and conditions of this Agreement and an
Agreement of Merger substantially in the form of Exhibit A (the "Agreement of
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Merger") and the applicable provisions of the laws of the State of
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Massachusetts. Upon the effectiveness of the Merger, all the outstanding common
stock of UniCAD will be converted into common stock of CCT, and CCT will assume
all outstanding options to purchase shares of common stock of UniCAD, as
provided in this Agreement and the Agreement of Merger.
E. The Merger is intended to be treated as (i) a pooling of interests for
accounting purposes, and (ii) a tax-free reorganization pursuant to the
provisions of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"), by virtue of the provisions of Section 368(a)(2)(E) of the
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Code.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS
1.02 "Applicable Fraction" shall have the meaning given to such term in
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Section 2.1.1 hereof.
1.03 "Closing" shall mean the closing of the transactions provided for
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herein.
1.04 "Closing Date" shall mean two (2) business days after all conditions
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to Closing have been satisfied or waived, or at such other place, time and date
as CCT and UniCAD may mutually select, but in no event prior to the day
following issuance of the Permit.
1.05 "Code" shall mean the Internal Revenue Code of 1986, as amended.
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1.06 "Confidential Information" shall mean any information designated in
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writing by the disclosing party to be "confidential" or "proprietary," but shall
not include: (a) information that is or becomes known to the general public
without breach of the nondisclosure obligations of this Agreement; (b)
information that is obtained from a third party or independently developed
without a breach of a nondisclosure obligation and without restriction on
disclosure; or (c) information that is required to be disclosed in connection
with any suit, action or other dispute related to this Agreement.
1.07 "CCT Affiliates Agreements" shall mean agreements to be entered into
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by the affiliates of CCT substantially in the form attached hereto as Exhibit B.
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1.08 "CCT Ancillary Agreements" shall mean the Escrow Agreement, the CCT
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Affiliates Agreements and the UniCAD Affiliates Agreements.
1.09 "CCT Common Stock" shall mean shares of CCT's Common Stock, $.01 par
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value per share.
1.10 "CCT Options" shall mean the options to acquire CCT Common Stock
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resulting from the assumption and conversion of the UniCAD Options pursuant to
Section 2.1.5 hereof.
1.11 "Dissenting Shares" shall have the meaning given to such term in
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Section 2.1.3 hereof.
1.12 "Effective Time" shall have the meaning given to such term in Section
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2.1.2 hereof.
1.13 "Employee Plans" shall mean all pension, retirement, disability,
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medical, dental or other health plans, life insurance or other death benefit
plans, profit sharing, deferred compensation agreements, stock, option, bonus or
other incentive plans, vacation, sick, holiday or other paid leave plans,
severance plans or other similar employee benefit plans currently or previously
maintained, contributed to or entered into by UniCAD or the Subsidiary.
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1.14 "Employment Agreements" shall mean the employment agreements to be
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entered into by Xxxxx XxXxxxxx, Xxxxx Xxx, Xxxxx Xxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx
and Xxxxx Xxx, substantially in the form attached to this Agreement as
Exhibit D.
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1.15 "Escrow Agent" shall mean State Street Bank or such other escrow agent
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selected by CCT prior to the Closing.
1.16 "Escrow Agreement" shall mean an agreement substantially in the form
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attached to this Agreement as Exhibit E.
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1.17 "Escrow Period" shall mean the period beginning with the Closing Date
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and ending upon the earlier to occur of (a) one year from the Closing Date or
(b) the release by CCT of its audited financial statements for its fiscal year
1996.
1.18 "Escrow Shares" shall mean ten percent (10%) of the shares of CCT
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Common Stock to be issued to the holders of UniCAD Common Stock in accordance
with Section 2.1 (rounded down to the nearest whole number of shares to be
issued to each holder) and ten percent (10%) of any shares of CCT Common Stock
issued upon the exercise during the Escrow Period of any CCT Options.
1.19 "Fairness Hearing" shall mean a fairness hearing before the California
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Commissioner of Corporations pursuant to Section 25142 of the Securities Law.
1.20 "Intellectual Property" shall mean all worldwide industrial and
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intellectual property rights and all other proprietary rights, including,
without limitation, patents, patent rights, trademarks, trade names, service
marks, mask works, copyrights, Moral Rights, franchises, licenses, inventories,
know-how, trade secrets, technology, customer lists, proprietary processes and
formulae, all source and object code, algorithms, architecture, structure,
display screens, layouts, inventions, development tools and all documentation
and media constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records, and other intellectual property,
including all registrations and recordations and applications for registrations
and recordations of any of the foregoing.
1.21 "Inventions" shall mean an invention, improvement, original work of
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authorship, formula, process, computer program, database or trade secret.
1.22 "Material Adverse Effect" shall mean one or more changes in, or
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effects on, the business, financial condition, operations, results of
operations, prospects, assets or liabilities of (a) UniCAD and the Subsidiary,
taken as a whole, or (b) CCT and its subsidiaries, taken as a whole, as the case
may be, that, individually or in the aggregate, results in or could reasonably
be expected to result in a material adverse effect on, or a material adverse
change in, the business, financial condition, operations, results of operations,
prospects, assets or liabilities of (a) UniCAD and the Subsidiary, taken as a
whole, or (b) CCT and its subsidiaries, taken as a whole, as the case may be. A
statement in this Agreement that an event or state of affairs "has," "does not
have," "would have," or "would not have" (or similar statements) a Material
Adverse Effect, shall, as described above, be deemed to mean that such event or
state of affairs both (a) has (or does not have, as the case may be), does (or
does not, as the case may be), will (or will not, as the
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case may be), or would (or would not, as the case may be), result in, and/or (b)
could (or could not, as the case may be) reasonably be expected to result in,
the consequences described in the preceding sentence.
1.23 "Moral Rights" shall mean any rights of paternity or integrity, any
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right to claim authorship of an Invention, to object to or prevent any
distortion, mutilation or other modification of, or other derogatory action in
relation to, any Invention, whether or not such would be prejudicial to any
developer's honor or reputation and whether or not such right is denominated or
generally referred to as a moral right.
1.24 "Permit" shall mean a permit issued pursuant to Section 25121 of the
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Securities Law after the Fairness Hearing.
1.25 "Permit Application" shall mean the application for qualification of
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the CCT Common Stock and CCT Options to be issued in the Merger and application
for the Fairness Hearing (including the disclosure statement contained therein),
together with any other documents required by the Securities Law to be filed
with the California Department of Corporations in connection with the Merger.
1.26 "Per Share Price" shall mean, with respect to a share of CCT Common
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Stock, the average closing price of the CCT Common Stock as publicly reported on
the Nasdaq National Market over the twenty (20) trading days immediately
preceding the date of the Effective Time.
1.27 "Securities Act" shall mean the Securities Act of 1933, as amended.
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1.28 "Securities Law" shall mean the California Corporate Securities Law of
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1968, as amended.
1.29 "Severance Agreements" shall mean the agreements among UniCAD and the
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Subsidiary, and Xxxxxxx Xxxxxxx, Xxxxxxx Xxxx and Xxxxxx Xxxxxxxxxx dated July
25, 1994, January 1, 1995, and April 26, 1995, respectively, entered into in
connection with the termination of their respective relationships with UniCAD
and the Subsidiary.
1.30 "Subsidiary" shall mean UniCAD Canada Ltd., a corporation organized
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under the laws of Ontario, Canada.
1.31 "Total Share Number" shall mean Five Hundred Twenty Thousand
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(520,000), as long as the Per Share Price is no lower than $11.20 and no higher
than $16.80. If the Per Share Price is lower than $11.20, then the Total Share
Number shall be the number determined as follows: (11.20 x 520,000), divided by
the Per Share Price. If the Per Share Price is greater than $16.80, then the
Total Share Number shall be the number determined as follows: (16.80 x 520,000),
divided by the Per Share Price. The Total Share Number shall be subject in all
events to reduction in accordance with the provisions of Section 12.8.
1.32 "UniCAD Affiliates Agreements" shall mean the agreements to be entered
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into by the affiliates of UniCAD substantially in the form attached hereto as
Exhibit C.
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1.33 "UniCAD Ancillary Agreements" shall mean the Escrow Agreement, the CCT
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Affiliates Agreements, the UniCAD Affiliates Agreements and the Employment
Agreements.
1.34 "UniCAD Certificates" shall have the meaning given to such term in
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Section 7.2.2 hereof.
1.35 "UniCAD Common Stock" shall mean all of the issued and outstanding
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Common Stock, $.01 par value, of UniCAD.
1.36 "UniCAD Intellectual Property" shall mean all Intellectual Property
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currently used or developed in the conduct of UniCAD's and the Subsidiary's
businesses as presently conducted and as proposed to be conducted.
1.37 "UniCAD Material Agreements" shall mean the agreements listed or
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required to be listed in Schedules 3.11, 3.12, 3.15.3, 3.22 and 3.23.
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1.38 "UniCAD Options" shall mean those options to acquire UniCAD Common
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Stock granted under the UniCAD Stock Option Plan set forth on Schedule 3.3 to
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the Disclosure Letter.
1.39 "Viewlogic" shall mean Viewlogic Systems, Inc., a Delaware
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corporation.
1.40 "Viewlogic Waiver" shall mean a waiver and amendment to that certain
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Teaming Agreement among UniCAD, Viewlogic, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxx and
Xxxxxx Xxxxxxxxxx substantially in the form attached hereto as Exhibit H to be
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executed and delivered prior to the Closing pursuant to Section 9.19.
2. PLAN OF REORGANIZATION
2.1 The Merger. Subject to the terms and conditions of this
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Agreement, Newco will be merged with and into UniCAD pursuant to this Agreement
and the Agreement of Merger and in accordance with applicable provisions of the
laws of the State of Massachusetts as follows:
2.1.1 Applicable Fraction. The "Applicable Fraction" shall be equal
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to the quotient of (a) the Total Share Number, divided by (b) the sum of (i) the
total number of issued and outstanding shares of UniCAD Common Stock immediately
prior to the Effective Time and (ii) the total number of shares of UniCAD Common
Stock issuable upon exercise of all UniCAD Options outstanding and vested
immediately prior to the Effective Time.
2.1.2 Conversion of Shares. Each share of UniCAD Common Stock
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issued and outstanding immediately prior to the filing of the Articles of Merger
with the Secretary of State of Massachusetts (the "Effective Time"), other than
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Dissenting Shares, if any, will by virtue of the Merger and at the Effective
Time, and without further action on the part of any holder thereof, be converted
solely into the right to receive the Applicable Fraction of a fully paid and
nonassessable share of CCT Common Stock.
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2.1.3 Dissenting Shares. Holders of shares of UniCAD Common Stock
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that have not been voted for adoption of this Agreement and with respect to
which appraisal rights shall have been properly perfected in accordance with
Sections 85-98 of Chapter 156B, of the Massachusetts Business Corporation Law
("MBCL") (the "Dissenting Shares") shall not be converted into the right to
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receive shares of CCT Common Stock and cash (if any) in accordance with this
Agreement at or after the Effective Time, unless and until the holder of such
Dissenting Shares withdraws such holder's demand for such appraisal in
accordance with Section 96 of the MBCL or becomes ineligible for such appraisal.
If a holder of Dissenting Shares shall withdraw in accordance with Section 96 of
the MBCL such holder's demand for such appraisal or shall become ineligible for
such appraisal, then, as of the later of the Effective Time or the occurrence of
such event, such holder's Dissenting Shares shall cease to be Dissenting Shares
and shall be converted into the right to receive the shares of CCT Common Stock
and cash (if any) into which such holder's UniCAD Common Stock was converted as
of the Effective Time pursuant to this Agreement. Any amounts to be paid to
holders of Dissenting Shares with respect to such Dissenting Shares shall be
paid by the surviving corporation in the Merger.
2.1.4 Fractional Shares. No fractional shares of CCT Common Stock
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will be issued in connection with the Merger, but in lieu thereof each holder of
UniCAD Common Stock who would otherwise be entitled to receive a fraction of a
share of CCT Common Stock, after aggregating all shares of CCT Common Stock to
be received by such holder, will receive from CCT, promptly after the Effective
Time, an amount of cash equal to the last sales price of the CCT Common Stock on
the last trading day immediately preceding the Effective Time multiplied by the
fraction of a share of CCT Common Stock to which such holder would otherwise be
entitled.
2.1.5 Assumption of Options. Each UniCAD Option that is outstanding
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immediately prior to the Effective Time will, by virtue of the Merger at the
Effective Time and without further action on the part of any holder thereof, be
assumed by CCT and converted into an option to purchase that number of shares of
CCT Common Stock which equals the number of shares of UniCAD Common Stock
subject to such UniCAD Option at the Effective Time multiplied by the Applicable
Fraction, and the per share exercise price for each such CCT Option will equal
the per share exercise price of each such UniCAD Option immediately prior to the
Effective Time divided by the Applicable Fraction. If the foregoing calculation
results in an assumed option being exercisable for a fraction of a share, then
the number of shares of CCT Common Stock subject to such CCT Option will be
rounded down to the nearest whole number with no cash being payable for such
fractional share. In addition, if the foregoing calculation results in an
assumed option having a per share exercise price that includes a fraction of a
cent, then the per share exercise price for such CCT Option shall be rounded up
to the nearest whole cent. The term, exercisability, vesting schedule, status
as an "incentive stock option" under Section 422 of the Code, if applicable, and
all other terms of the UniCAD Options will otherwise be unchanged. Continuous
employment with UniCAD will be credited to an optionee for purposes of
determining the number of shares subject to exercise after the Effective Time.
2.1.6 Adjustments for Capital Changes. If prior to the Merger, CCT
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recapitalizes through a split-up of its outstanding shares into a greater
number, or a combination of its outstanding shares into a lesser number,
reorganizes, reclassifies or otherwise changes its outstanding shares into the
same or a different number of shares of other classes (other than
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through a split-up or combination of shares provided for in the previous
clause), or declares a dividend on its outstanding shares payable in shares or
securities convertible into shares, the Total Share Number will be adjusted
appropriately and proportionately.
2.2 Escrow Agreement. At the Closing (and thereafter, in the case of
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Escrow Shares resulting from the exercise of CCT Options), CCT will deliver to
the Escrow Agent certificates representing the Escrow Shares. The Escrow Shares
will be held in escrow by the Escrow Agent as collateral for the indemnification
obligations under Section 11.2 and pursuant to the provisions of the Escrow
Agreement. The Escrow Shares will be represented by certificates issued in the
name of the Escrow Agent and will be held by the Escrow Agent from the Closing
until expiration of the Escrow Period. In the event that the Merger is approved
by the UniCAD stockholders as provided herein, the UniCAD stockholders shall,
without any further act of any UniCAD stockholder, be deemed to have consented
to and approved (i) the use of the Escrow Shares as collateral for the
indemnification obligations under Section 11.2 and in the manner set forth in
the Escrow Agreement, (ii) the appointment of Xxxxxxx Xxxxxxx, as the
representative of the UniCAD stockholders (the "Representative") under the
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Escrow Agreement and as the attorney-in-fact and agent for and on behalf of each
UniCAD stockholder (other than holders of Dissenting Shares), and the taking by
the Representative of any and all actions and the making of any decisions
required or permitted to be taken by him under the Escrow Agreement (including,
without limitation, the exercise of the power to: authorize delivery to CCT of
Escrow Shares in satisfaction of claims by CCT; agree to, negotiate, enter into
settlements and compromises of and demand arbitration and comply with orders of
courts and awards of arbitrators with respect to such claims; resolve any claim
made pursuant to Section 11.2; and take all actions necessary in the judgment of
the Representative for the accomplishment of the foregoing) and (iii) to all of
the other terms, conditions and limitations in the Escrow Agreement.
2.3 Securities Law Compliance.
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2.3.1 Fairness Hearing. The CCT Common Stock and CCT Options to
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be issued in the Merger will, subject to section 2.3.2 below, be qualified by a
Permit after a Fairness Hearing to be held on or about August 26, 1996 and shall
thereby be an exempt transaction under Section 3(a)(10) of the Securities Act.
CCT shall prepare and file with the California Department of Corporations (the
"Department") a Permit Application. CCT shall use all reasonable efforts to
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have the Permit issued under the Securities Law as promptly as practicable after
such filing. CCT shall also take any action required to be taken under any
applicable state securities or "blue sky" laws in connection with the issuance
of the CCT Common Stock and CCT Options in the Merger. UniCAD hereby
acknowledges that while the shares of CCT Common Stock issued in the Merger
after a Fairness Hearing and pursuant to a Permit are generally publicly
tradable, stockholders of UniCAD who are affiliates of UniCAD will only be able
to trade the CCT Common Stock received in compliance with the terms of Rule 145,
and that Rule 145 imposes restrictions on the manner in which such affiliates
may resell CCT Common Stock and also on the number of shares sold within a
three-month period.
2.3.2 Provision of Information. UniCAD will furnish (and will
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use its diligent good faith efforts to furnish reasonably promptly after such
request) to CCT all information concerning UniCAD, including without limitation,
information regarding UniCAD's business, management, financial statements and
the UniCAD stockholders and option holders as
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may be reasonably requested in connection with any action provided for in this
Section 2.3. CCT and UniCAD, as applicable, will be responsible for any
statement, information or omission of a material fact necessary to make the
information contained therein not misleading in the Permit Application relating
to CCT or UniCAD, respectively, or to their respective affiliates based on
written information furnished by CCT or UniCAD that causes such Permit
Application to contain an untrue statement of material fact relating to CCT or
UniCAD, respectively, or omit a material fact necessary to make the statements
therein relating to CCT or UniCAD, respectively, not misleading.
2.3.3 Registration on Form S-8. CCT shall use diligent good
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faith efforts to cause the shares of CCT Common Stock that are issuable upon
exercise of the CCT Options to be registered under the Securities Act on Form S-
8 ("S-8") or other applicable form promptly following the Merger. UniCAD will
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cooperate with CCT to the best of UniCAD's ability in the preparation of the S-
8. CCT will use diligent good faith efforts to maintain the effectiveness of
such registration statement for so long as the CCT Options shall remain
outstanding and will reserve a sufficient number of shares of CCT Common Stock
for issuance upon exercise thereof.
2.4 Effects of the Merger. At the Effective Time: (a) the separate
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existence of Newco will cease and Newco will be merged with and into UniCAD, and
UniCAD will be the surviving corporation, pursuant to the terms of the Agreement
of Merger; (b) the Articles of Incorporation of Newco will become the Articles
of Incorporation of the surviving corporation, as provided in the Agreement of
Merger; (c) each share of Newco Common Stock outstanding immediately prior to
the Effective Time will, at the Effective Time, be converted into one share of
Common Stock of the surviving corporation, (d) the directors of Newco
immediately prior to the Effective Time will become the directors of the
surviving corporation and the officers of UniCAD immediately prior to the
Effective Time will remain the officers of the surviving corporation, (e) each
share of UniCAD Stock and each UniCAD Option outstanding immediately prior to
the Effective Time will be converted as provided in Section 2.1; and (f) the
Merger will, from and after the Effective Time, have all of the effects provided
by applicable law.
2.5 Further Assurances. UniCAD agrees that if, at any time before or
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after the Effective Time, CCT considers or is advised that any further deeds,
assignments or assurances are reasonably necessary or desirable to vest, perfect
or confirm in CCT title to any property or rights of UniCAD, CCT and its proper
officers and directors may execute and deliver all such proper deeds,
assignments and assurances and do all other things necessary or desirable to
vest, perfect or confirm title to such property or rights in CCT and otherwise
to carry out the purpose of this Agreement, in the name of UniCAD or otherwise.
2.6 Pooling of Interests. The parties intend that the Merger be
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treated as a "pooling of interests" for accounting purposes. The affiliates of
both CCT and UniCAD shall execute and deliver CCT and UniCAD Affiliates
Agreement, respectively.
2.7 Tax Free Reorganization. The parties intend to adopt this
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Agreement as a tax-free plan of reorganization and to consummate the Merger in
accordance with the provisions of Section 368(a)(1)(A) of the Code by virtue of
the provisions of Section 368(a)(2)(E) of the
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Code. At the Closing, officers of each of CCT, Newco and UniCAD shall execute
and deliver officers' certificates in the forms of Exhibits 2.7A and 2.7B.
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3. REPRESENTATIONS AND WARRANTIES OF UNICAD
UniCAD hereby represents and warrants that except as set forth in the
disclosure letter (the "Disclosure Letter") delivered by UniCAD to CCT
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contemporaneously herewith (provided that each exception in the Disclosure
Letter shall specifically identify the Section that it is intended to qualify,
and provided further, that disclosure of a document in the Disclosure Letter
shall not constitute disclosure of the contents thereof unless (i) accompanied
by a brief explanation of the contents with respect to which the document is
being disclosed or (ii) mere disclosure unambiguously conveys the content or
aspect of the document which respect to which it is being disclosed in the
Disclosure Letter.):
3.1 Organization and Good Standing. Each of UniCAD and the Subsidiary
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is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own, operate and lease its properties and to carry on its business
as now conducted and as proposed to be conducted, and is qualified as a foreign
corporation in each jurisdiction in which a failure to be so qualified would
have a Material Adverse Effect.
3.2 Power, Authorization and Validity.
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3.2.1 UniCAD has the right, corporate power, legal capacity and
corporate authority to enter into and perform its obligations under this
Agreement, and all agreements to which UniCAD is or will be a party that are
required to be executed pursuant to this Agreement including the UniCAD
Ancillary Agreements. The execution, delivery and performance by UniCAD of this
Agreement and the UniCAD Ancillary Agreements have been duly and validly
approved and authorized by UniCAD's Board of Directors.
3.2.2 No filing, authorization, consent or approval, with or from
governmental authorities or otherwise, is necessary to enable UniCAD to enter
into and to perform its obligations under this Agreement and the UniCAD
Ancillary Agreements, except for (a) the filing of the Articles of Merger with
the Massachusetts Secretary of State, and the filing of appropriate documents
with the relevant authorities of other states in which UniCAD is qualified to do
business, if any, (b) such filings, authorizations or approvals as may be
required to comply with federal and state securities laws, (c) the approval of
the UniCAD stockholders of the transactions contemplated hereby, and (d)
consents required under contracts disclosed in Schedule 3.5 of the Disclosure
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Letter as exceptions to the representations made in Section 3.5.
3.2.3 This Agreement and the UniCAD Ancillary Agreements are, or
when executed by UniCAD (or, if later effectiveness is provided by the terms of
the such agreement, then when effective) will be, valid and binding obligations
of UniCAD enforceable in accordance with their respective terms, except as to
the effect, if any, of: (a) applicable bankruptcy and other similar laws
affecting the rights of creditors generally; (b) rules of law governing specific
performance, injunctive relief and other equitable remedies; and (c) the
enforceability of
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provisions requiring indemnification in connection with the offering, issuance
or sale of securities.
3.3 Capitalization. The authorized capital stock of UniCAD consists
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solely of 1,250,000 shares of Common Stock, $0.01 par value, of which 782,716
shares are issued and outstanding. An aggregate of 470,000 shares of UniCAD
Common Stock are reserved and authorized for issuance pursuant to the UniCAD
Stock Option Plan, of which options to purchase a total of 147,669 shares of
UniCAD Common Stock are outstanding. All issued and outstanding shares of
UniCAD Common Stock have been duly authorized and validly issued, are fully paid
and nonassessable, are not subject to any right of rescission, and have been
offered, issued, sold and delivered by UniCAD in compliance with all
registration or qualification requirements (or applicable exemptions therefrom)
of applicable federal and state securities laws. All of the issued and
outstanding shares of UniCAD are held of record by the parties as set out in
Schedule 3.3, and no voting, dividend or other rights to any of such shares have
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been granted to any party other than the indicated record owner, and, to the
knowledge of UniCAD, all such shares are free and clear of any lien, charge or
encumbrance except as set forth on Schedule 3.3. Set forth on Schedule 3.3 is a
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list of all outstanding options to purchase UniCAD Common Stock identifying the
holder of each such option, the number of shares subject to each such option,
and the exercise price of each such option. Except as set forth on Schedule
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3.3, there are no options, warrants, calls, commitments, conversion privileges
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or preemptive or other rights or agreements outstanding to purchase any of
UniCAD's authorized but unissued capital stock or any securities convertible
into or exchangeable for shares of UniCAD stock or obligating UniCAD to grant,
extend, or enter into any such option, warrant, call, right, commitment,
conversion privilege or other right or agreement, and there is no liability for
dividends accrued but unpaid. To the knowledge of UniCAD, there are no voting
agreements, rights of first refusal or other restrictions (other than normal
restrictions on transfer under applicable federal and state securities laws)
applicable to any of UniCAD's outstanding securities, except as set forth on
Schedule 3.3. Except as set forth on Schedule 3.3, UniCAD has no liability to
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any former shareholders. UniCAD is not under any obligation to register under
the Securities Act any of its presently outstanding securities or any securities
that may be subsequently issued.
3.4 Subsidiaries. Except for the Subsidiary, which is wholly-owned by
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UniCAD, UniCAD does not have any subsidiaries or any equity interest, direct or
indirect, in any corporation, partnership, limited liability company, joint
venture or other business entity. All of the issued and outstanding shares of
capital stock of the Subsidiary are held beneficially and of record solely by
UniCAD, and no voting, dividend or other rights to any of such shares have been
granted to any other party, and all such shares are free and clear of any lien,
charge or encumbrance. There are no options, warrants, calls, commitments,
conversion privileges or preemptive or other rights or agreements outstanding to
purchase any of the Subsidiary's authorized but unissued capital stock or any
securities convertible into or exchangeable for shares of Subsidiary stock or
obligating UniCAD or the Subsidiary to grant, extend, or enter into any such
option, warrant, call, right, commitment, conversion privilege or other right or
agreement.
3.5 No Violation of Existing Agreements. Neither the execution and
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delivery of this Agreement nor any UniCAD Ancillary Agreement, nor the
consummation of the transactions contemplated hereby, will conflict with, or
(with or without notice or lapse of time, or both) result in a termination,
breach, impairment or violation of (a) any provision of the Articles of
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Organization or Incorporation, Bylaws or other charter documents of UniCAD or
the Subsidiary, as currently in effect, (b) any material instrument or contract
to which UniCAD or the Subsidiary is a party or by which UniCAD or the
Subsidiary is bound, or (c) any federal, state, local, Canadian or other foreign
judgment, writ, decree, order, statute, rule or regulation applicable to UniCAD
or the Subsidiary or their respective assets or properties the violation of
which would have a Material Adverse Effect. The consummation of the Merger and
the transfer to CCT of all material rights, licenses, franchises, leases and
agreements of UniCAD and the Subsidiary will not require the consent of any
third party.
3.6 Litigation. There is no action, proceeding, claim or
----------
investigation pending or, to UniCAD's knowledge, threatened, and to UniCAD's
knowledge there currently exists no set of circumstances which UniCAD believes
is likely to result in any such action, proceeding, claim or investigation,
against UniCAD or the Subsidiary before any court or administrative agency that
if determined adversely to UniCAD or the Subsidiary would have a Material
Adverse Effect. Without limiting the generality of the foregoing, there is no
reasonable basis for any stockholder or former stockholder of UniCAD, or any
other person, firm, corporation, or entity, to assert a claim against UniCAD or
CCT based upon: (a) ownership or rights to ownership of any shares of UniCAD
capital stock (except for dissenter's rights with respect to shares of CCT
Common Stock issuable by virtue of the Merger), (b) any rights as a UniCAD
stockholder, including any option or preemptive rights or rights to notice or to
vote, or (c) any rights under any agreement among UniCAD and its stockholders.
3.7 Taxes. Each of UniCAD and the Subsidiary has filed all federal,
-----
state, local, Canadian and other foreign tax returns required to be filed, has
paid all taxes required to be paid in respect of all periods for which returns
have been filed, has established an adequate accrual or reserve for the payment
of all taxes payable in respect of the periods subsequent to the periods covered
by the most recent applicable tax returns, has made all necessary estimated tax
payments, and has no liability for taxes in excess of the amount so paid or
accruals or reserves so established in the Financial Statements (as defined
below). Neither UniCAD nor the Subsidiary is delinquent in the payment of any
tax or is delinquent in the filing of any tax returns, and no deficiencies for
any tax have been claimed, proposed or assessed or, to UniCAD's knowledge,
threatened. No tax return of UniCAD or the Subsidiary has ever been audited by
the Internal Revenue Service, any state taxing agency or authority or any
Canadian or other foreign taxing agency or authority. For the purposes of this
Section, the terms "tax" and "taxes" include, without limitation, all federal,
--- -----
state, local, Canadian and other foreign corporation, income, capital gains,
inheritance, value added, franchise, excise, property, sales, use, consumption,
employment, license, payroll, occupation, recording, or transfer taxes,
governmental charges, fees, levies or assessments or any other tax, duty, levy
or impost imposed by any statutory, governmental or municipal authority
whatsoever anywhere in the world (whether payable directly or by withholding),
and, with respect to such taxes, any estimated tax, interest and penalties or
additions to tax and interest on such penalties and additions to tax.
3.8 UniCAD Financial Statements. UniCAD has delivered to CCT (i)
---------------------------
UniCAD's audited consolidated balance sheet as of September 30, 1995 and its
audited consolidated statement of income and audited consolidated statement of
cash flows for the year then ended, and (ii) its unaudited consolidated balance
sheet (the "Balance Sheet") as of June 30, 1996 (the "Balance Sheet Date") and
------------- ------------------
its unaudited consolidated statement of income for
11
the three and six month periods then ended. The financial statements referred to
in (i) and (ii) above are collectively referred to as the "Financial Statements"
--------------------
and are attached to the Disclosure Letter as Schedule 3.8A. The Financial
-------------
Statements (a) are in accordance with the books and records of UniCAD; (b)
fairly present the financial condition of UniCAD at the respective dates therein
indicated and the results of operations for the periods therein specified; and
(c) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (subject, in the case of unaudited
interim financial statements, to recurring year-end adjustments, which
adjustments will not be material in amount or effect). UniCAD has no material
debt, liability or obligation of any nature, whether accrued or unaccrued,
absolute or contingent, known or unknown, due or to become due, or otherwise
that is not reflected or reserved against in the Financial Statements, except
for (i) those that may have been incurred after the Balance Sheet Date in the
ordinary course of its business, consistent with past practice and that are not
material in amount either individually or in the aggregate, and (ii) those
obligations specified in Schedule 3.8B.
-------------
3.9 Title to Properties. Each of UniCAD and the Subsidiary has good
-------------------
and marketable title to all of its assets as shown on the Balance Sheet, free
and clear of all liens, charges, restrictions or encumbrances (other than for
taxes not yet due and payable). All machinery and equipment included in such
assets is in good condition and repair, normal wear and tear excepted, and all
leases of real or personal property to which UniCAD or the Subsidiary is a party
are fully effective and afford UniCAD or the Subsidiary peaceful and undisturbed
possession of the subject matter of the lease. Neither UniCAD nor the
Subsidiary is in violation of any zoning, building, safety or environmental
ordinance, regulation or requirement or other law or regulation applicable to
the operation of owned or leased properties (the violation of which would have a
Material Adverse Effect), or has received any notice of violation with which it
has not complied.
3.10 Absence of Certain Changes. Since the Balance Sheet Date, each of
--------------------------
UniCAD and the Subsidiary has carried on its business in the ordinary course
substantially in accordance with the procedures and practices in effect on the
Balance Sheet Date, and except as set forth on Schedule 3.10, since the Balance
-------------
Sheet Date there has not been with respect to UniCAD or the Subsidiary:
(a) any Material Adverse Effect;
(b) any contingent liability incurred thereby as guarantor or
otherwise with respect to the obligations of others;
(c) any mortgage, encumbrance or lien placed on any of the
properties thereof;
(d) any material obligation or liability incurred thereby other
than obligations and liabilities incurred in the ordinary course of business;
(e) any purchase or sale or other disposition, or any agreement
or other arrangement for the purchase, sale or other disposition, of any of the
properties or material tangible assets thereof other than in the ordinary course
of business;
12
(f) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
thereof;
(g) any declaration, setting aside or payment of any dividend on,
or the making of any other distribution in respect of, the capital stock
thereof, any split, combination or recapitalization of the capital stock thereof
or any direct or indirect redemption, purchase or other acquisition of the
capital stock thereof;
(h) any labor dispute or claim of unfair labor practices, any
change in the compensation payable or to become payable to any of its officers,
employees or agents, or any bonus payment or arrangement made to or with any of
such officers, employees or agents;
(i) any change with respect to the management, supervisory or
other key personnel thereof;
(j) any payment or discharge of a material lien or liability
thereof which lien was not either shown on the Balance Sheet or incurred in the
ordinary course of business after the Balance Sheet Date;
(k) any obligation or liability incurred thereby to any of its
officers, directors or stockholders or any loans or advances made thereby to any
of its officers, directors or stockholders except normal compensation and
expense allowances payable to officers or directors; or
(l) any capital expenditure or commitments therefor by UniCAD in
excess of $25,000, individually or in the aggregate.
3.11 Agreements and Commitments.
--------------------------
3.11.1 Except as set forth in Schedule 3.11, neither UniCAD nor
-------------
the Subsidiary is a party or is subject to:
(a) any oral or written agreement, obligation or
commitment which is material to UniCAD, its business, financial condition,
operations, results of operations, prospects, assets or liabilities;
(b) any contract, commitment, letter contract, quotation,
purchase order, bid or proposal providing for payments by or to UniCAD or the
Subsidiary in an aggregate amount (per transaction) of (i) $25,000 or more in
the ordinary course of business or (ii) $10,000 or more not in the ordinary
course of business;
(c) any license agreement as licensor or licensee (except
(i) as licensee of standard non-exclusive consumer software licenses in the
ordinary course of business and (ii) for standard non-exclusive software
licenses granted to end-user customers in the ordinary course of business the
form of which has been provided to CCT;
13
(d) any agreement to encumber, transfer or sell rights in
or with respect to any of the UniCAD Intellectual Property (except for standard
non-exclusive software licenses granted to end-user customers in the ordinary
course of business the form of which has been provided to CCT);
(e) any agreement for the sale or lease of real or
personal property involving more than $10,000 per year;
(f) any publishing, dealer, distributor, sales
representative, original equipment manufacturer, value added remarketer or other
agreement for the distribution of its products or the provision of its services;
(g) any franchise agreement;
(h) any share redemption, stock option or stock purchase
agreement;
(i) any joint venture contract or arrangement or any other
agreement that involves a sharing of profits with other persons;
(j) any instrument evidencing indebtedness for borrowed
money by way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee or otherwise, except for trade indebtedness and
advances to employees incurred in the ordinary course of business, and except as
disclosed in the Financial Statements or reserved in the Financial Statements
and disclosed in Schedule 3.11 to CCT;
(k) any contract containing covenants purporting to limit
its freedom to compete in any line of business in any geographic area; or
(l) any government contract or subcontract.
3.11.2 All UniCAD Material Agreements are valid and in full force
and effect in all material respects and a true and complete copy of each has
been delivered to CCT. Neither UniCAD nor the Subsidiary has received any notice
of default, breach or termination with respect to any UniCAD Material Agreement.
Neither UniCAD nor the Subsidiary nor, to the knowledge of UniCAD, any other
party is in breach or default in any material respect under the terms of any
UniCAD Material Agreement. Neither UniCAD nor the Subsidiary is a party to any
contract or arrangement which could have a Material Adverse Effect. UniCAD has
no material liability for renegotiation of government contracts or subcontracts,
if any.
3.11.3 Except as set forth on Schedule 3.11, to the extent any
-------------
UniCAD agreement ("UniCAD Agreement") provides for development or other
----------------
performance by UniCAD or the Subsidiary, such development or other performance
has been timely and properly completed substantially in accordance with the
terms of such UniCAD Agreement and neither UniCAD nor the Subsidiary has any
liability arising out of any prior deliveries, UniCAD and the Subsidiary are in
compliance in all substantial respects with all internal schedules and
specifications to meet any milestone or other delivery with respect to any
UniCAD Agreement
14
the date of which has not yet occurred and is scheduled to occur within the next
12 months, and to the knowledge of UniCAD, there is not any matter which might
cause UniCAD not to timely and properly meet any milestone or other delivery
date in accordance in all substantial respects with the applicable UniCAD
Agreement. Except as set forth on Schedule 3.11, UniCAD and the Subsidiary are
-------------
in compliance in all substantial respects with all maintenance, support and
enhancement obligations pursuant to the UniCAD Agreements, if any, and has
received no notice from any party to the contrary. No other party to a UniCAD
Agreement has ever exercised a "right to complete" or similar provision in a
UniCAD Agreement that allowed such party to correct or complete any deliverable
item from UniCAD. Except as set forth in Schedule 3.11, no other party to a
-------------
UniCAD Agreement is currently in arrears with respect to the payment of royalty
or similar payments to UniCAD, UniCAD has no reason to believe that any prior
royalty or similar payment is incorrect by more than 5% and neither UniCAD nor
the Subsidiary has ever exercised an audit or other formal remedy under any
UniCAD Agreement with respect to any such payment. Except as set forth on
Schedule 3.11, in the event any UniCAD Agreement is terminated by the other
-------------
party thereto, neither UniCAD nor the Subsidiary will have any liability for a
refund or other repayment of any amounts previously paid to UniCAD or the
Subsidiary under such UniCAD Agreement.
3.12 Intellectual Property.
---------------------
3.12.1 Except as set forth on Schedule 3.12, UniCAD or the
-------------
Subsidiary is the owner or licensee of, and has the unrestricted right to use,
all right, title and interest in and to all UniCAD Intellectual Property,
including, without limitation, all Development Tools (as defined in Section 3.22
below), and is not contractually obligated to pay any compensation to any third
party in respect thereof. No portion of the UniCAD Intellectual Property is
subject to (i) any lien, encumbrance or other secured interest, or (ii) any
outstanding order, judgment, decree, stipulation or agreement restricting in any
manner the licensing or exploitation thereof by UniCAD or the Subsidiary. After
the Closing of the Merger, UniCAD or the Subsidiary will own or have the
unrestricted right to use, sell, license and dispose of, and otherwise exercise
rights with respect to all UniCAD Intellectual Property.
3.12.2 Except as set forth on Schedule 3.12, the use of the
-------------
UniCAD Intellectual Property in the business of UniCAD and the Subsidiary as it
has been conducted prior to the Closing does not cause UniCAD or the Subsidiary
to infringe or violate any Intellectual Property of any other person; provided,
however, that with respect to patents held by any other person, the foregoing
representation is made only to UniCAD's knowledge without have made any
independent investigation. UniCAD has not received any claim or notice (i) of
infringement or potential infringement of the Intellectual Property of any other
person, or (ii) challenging the ownership, validity or effectiveness of any
UniCAD Intellectual Property, and, to the knowledge of UniCAD, there are no
reasonable grounds for any such claim concerning infringement or potential
infringement by UniCAD Intellectual Property or the ownership of UniCAD
Intellectual Property (it being understood by CCT that UniCAD has not conducted
any patent search or investigation), and no such claim is threatened. Neither
UniCAD nor the Subsidiary is wrongfully using any confidential information or
trade secrets of any former employer of any past or present employees. Other
than as part of its standard form of end-user license agreements or distributor
or reseller agreements, neither UniCAD nor the Subsidiary has
15
entered into any agreement to indemnify any other person against any charge of
infringement relating to any Intellectual Property.
3.12.3 UniCAD and the Subsidiary have taken reasonable measures
which are necessary to protect all UniCAD Intellectual Property and to the
knowledge of UniCAD there is not any unauthorized use, infringement or
misappropriation of UniCAD Intellectual Property by any third party, except as
set forth in Schedule 3.12. There is no material unauthorized use, infringement
-------------
or misappropriation of any UniCAD Intellectual Property by any third party,
including any employee of UniCAD or the Subsidiary. Copies of all standard
forms of non-disclosure or confidentiality agreements utilized to protect UniCAD
Intellectual Property have been provided to CCT. No employee or consultant of
UniCAD or the Subsidiary is in violation of any material term of any employment
contract (whether written or verbal), patent disclosure agreement or any other
contract or agreement relating to the relationship of such employee with UniCAD,
the Subsidiary or any other party (including prior employers) because of the
nature of the business conducted or proposed to be conducted by UniCAD or the
Subsidiary.
3.12.4 Set forth on Schedule 3.12 is a true and complete list of
-------------
all patents trademarks, works of authorship, registered copyrights, registered
and unregistered trademarks, trade names and service marks, and any applications
for any of the foregoing, included in the UniCAD Intellectual Property and
specifying the jurisdictions in which each such issuance registration, or
application has been filed, including the respective registration or application
numbers, and no loss, cancellation, termination or expiration of any such
registration is reasonably foreseeable except as set forth on Schedule 3.12.
-------------
3.13 Compliance with Laws. Each of UniCAD and the Subsidiary has
--------------------
complied, and is in full compliance, in all material respects, with all
applicable laws, ordinances, regulations and rules, and all orders, writs,
injunctions, awards, judgments and decrees, applicable to it or to the business,
including, without limitation: (a) all applicable federal and state and Canadian
securities law and regulations; (b) all applicable federal, state, local,
Canadian and other applicable ordinances and regulations, and all orders, writs,
injunctions, awards, judgments and decrees, pertaining to (i) the sale,
licensing, leasing, ownership or management of its owned, leased or licensed
real or personal property, products and technical data; (ii) employment and
employment practices, terms and conditions of employment, and wages and hours;
and (iii) safety, health, fire prevention, environmental protection, toxic waste
disposal, building standards, zoning and other similar matters; (c) all
import/export laws and regulations promulgated thereunder and all other laws,
regulations, rules, orders, writs, injunctions, judgments and decrees applicable
to the export or re-export of controlled commodities or technical data; and (d)
all immigration control laws; provided, however, that with respect to patents
held by any other person, the foregoing representations are made only to
UniCAD's knowledge without have made any independent investigation. Each of
UniCAD and the Subsidiary has received all permits and approvals from, and have
made all filings with, third parties, including government agencies and
authorities, that are necessary in connection with its present business, except
where the failure to make such filings would not have a Material Adverse Effect.
3.14 Certain Transactions and Agreements. None of the officers or
-----------------------------------
directors of UniCAD or the Subsidiary has any direct or indirect beneficial
ownership interest in any firm or
16
corporation that competes with UniCAD (other than through ownership in mutual
funds and other pooled investments over which such person has no discretionary
investment power and other than ownership of less than 1% of the outstanding
stock of any company whose securities are traded on a national stock exchange or
national market system and which is not a direct competitor of UniCAD). None of
said officers or directors, or, to UniCAD's knowledge, any member of their
immediate families, is directly or indirectly interested in any contract or
informal arrangement with UniCAD or the Subsidiary, except for normal
compensation for services as an officer, director or employee thereof as
described in Schedule 3.15.7. None of such officers or directors or, to UniCAD's
---------------
knowledge, family members has any interest in any property used in the business
of UniCAD or the Subsidiary, whether real or personal, tangible or intangible,
and including, without limitation, UniCAD Intellectual Property, except for the
normal rights of a stockholder.
3.15. Employees, ERISA and Other Compliance.
-------------------------------------
3.15.1 Except as set forth in Schedule 3.15.1, neither UniCAD
---------------
nor the Subsidiary has any employment contracts or consulting agreements
currently in effect that are not terminable at will (other than agreements with
the sole purpose of providing for the confidentiality of proprietary information
or assignment of inventions). All officers, employees and consultants of UniCAD
and the Subsidiary have executed and delivered to UniCAD or the Subsidiary an
agreement regarding the protection of such proprietary information and the
assignment of inventions to UniCAD or the Subsidiary; copies of the form of all
such agreements have been delivered to CCT's counsel.
3.15.2 Neither UniCAD nor the Subsidiary (i) has ever been or
is now subject to a union organizing effort, (ii) is subject to any collective
bargaining agreement with respect to any of its employees, (iii) is subject to
any other contract, written or oral, with any trade or labor union, employees'
association or similar organization, or (iv) has any current labor disputes
where the amount involved, individually or in the aggregate, exceeds $20,000.
Each of UniCAD and the Subsidiary has good labor relations, and has no knowledge
of any facts indicating that the consummation of the transactions contemplated
hereby will have a material adverse effect on such labor relations, and has no
knowledge that any of its key employees intends to leave its employ.
3.15.3 Schedule 3.15.3 contains a list of all Employee Plans.
---------------
Each of the Employee Plans, and its administration, are, in all material
respects, in full compliance with all applicable federal, state, municipal,
local, Canadian and other governmental laws and ordinances, orders, rules and
regulations and UniCAD and the Subsidiary are in substantial compliance with the
terms of all of the Employee Plans.
3.15.4 All contributions due from UniCAD or the Subsidiary
have been made or accrued on the Financial Statements with respect to any
Employee Plan except those contributions accruing after the Balance Sheet Date
in the ordinary course.
3.15.5 There has been no amendment to, written interpretation
or announcement (whether or not written) by UniCAD or the Subsidiary relating
to, or change in employee participation or coverage under, any Employee Plan
that would increase materially the
17
expense of maintaining such Employee Plan above the level of the expense
incurred in respect thereof for the fiscal year ended September 30, 1995.
3.15.6 If required by applicable law, UniCAD and the
Subsidiary have provided, or will have provided prior to the Closing, to
individuals entitled thereto all required notices and coverage pursuant to
Section 4980B of the Code and the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended ("COBRA"), with respect to any "qualifying event" (as
-----
defined in Section 4980B(f)(3) of the Code) occurring prior to and including the
Closing Date, and no material tax payable on account of Section 4980B of the
Code has been incurred with respect to any current or former employees (or their
beneficiaries) of UniCAD or the Subsidiary.
3.15.7 No benefit payable or which may become payable by
UniCAD or the Subsidiary pursuant to any Employee Plan or as a result of or
arising under this Agreement shall constitute an "excess parachute payment" (as
defined in Section 280G(b)(1) of the Code) which is subject to the imposition of
an excise tax under Section 4999 of the Code or which would not be deductible by
reason of Section 280G of the Code.
3.15.8 No employee of UniCAD or the Subsidiary is in material
violation of (a) any term of any employment contract, patent disclosure
agreement or non-competition agreement or (b) any term of any other contract or
agreement, or any restrictive covenant, relating to the right of any such
employee to be employed by UniCAD or the Subsidiary or to use Intellectual
Property of others. To the knowledge of UniCAD, the mere fact of employment of
any employee of UniCAD or the Subsidiary does not subject UniCAD or the
Subsidiary to any liability to any third party.
3.15.9 Except as set forth in Schedule 3.15.9, neither UniCAD
---------------
nor the Subsidiary is a party to any (a) agreement with any executive officer or
other key employee thereof (i) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving UniCAD in the nature of any of the transactions contemplated by this
Agreement and the UniCAD Ancillary Agreements; (ii) providing any term of
employment or compensation guarantee; or (iii) providing severance benefits or
other benefits after the termination of employment of such employee regardless
of the reason for such termination of employment; or (b) agreement or plan,
including, without limitation, any share option scheme, stock appreciation
rights plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
UniCAD Ancillary Agreements or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement or the UniCAD Ancillary Agreements.
3.15.10 A list of all employees, officers and consultants of UniCAD
and the Subsidiary and their current compensation (salary and bonuses), their
last annual review date and their latest change in compensation (salary or
bonus) is set forth on Schedule 3.15.10.
----------------
3.16 Corporate Documents. UniCAD has provided for CCT's examination,
-------------------
true and complete copies of all documents and information listed in the
Schedules to the Disclosure Letter including the following: (a) copies of
UniCAD's and the Subsidiary's Articles of
18
Organization or Incorporation and Bylaws or other charter documents as currently
in effect; (b) UniCAD's and the Subsidiary's Minute Books containing all records
of all proceedings, consents, actions and meetings of the stockholders and the
board of directors and any committees thereof of UniCAD and the Subsidiary; (c)
UniCAD's and the Subsidiary's stock ledgers and journals reflecting all stock
issuances and transfers; and (d) all permits, orders and consents now in effect
and issued by any regulatory agency with respect to UniCAD or the Subsidiary or
any securities of UniCAD or the Subsidiary, and all applications for such
permits, orders and consents.
3.17 No Brokers. Except for the fees and expenses payable by UniCAD to
----------
Broadview Associates, L.L.C. in accordance with that certain letter agreement
dated January 11, 1996, neither UniCAD, nor the Subsidiary nor any of the UniCAD
stockholders is obligated for the payment of fees or expenses of any investment
banker, broker or finder in connection with the origin, negotiation or execution
of this Agreement or the Agreement of Merger or in connection with any
transaction contemplated hereby or thereby.
3.18 Disclosure. The Disclosure Letter, this Agreement, the Exhibits
----------
and Schedules (to the extent prepared by UniCAD and its advisors), and any
certificates or documents delivered by, or to be delivered by, UniCAD to CCT
under this Agreement, when taken together, do not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements contained herein and therein, in light of the circumstances under
which such statements were made, not misleading.
3.19 Information Supplied. None of the written information supplied or
--------------------
to be supplied by UniCAD for inclusion in the documents required to be filed
with the California Department of Corporations in connection with the Permit
Application contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, at the time such information is
supplied, at the time of the mailing of the notice of fairness hearing and at
the time of the issuance of the Permit.
3.20 Insurance. UniCAD and the Subsidiary maintain and at all times
---------
since October 15, 1993, have maintained fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance which it believes to be reasonably prudent for similarly sized and
similarly situated businesses.
3.21 Environmental Matters. Except as set forth in Schedule 3.21:
--------------------- -------------
(a) During the period that each of UniCAD and the Subsidiary has
leased or owned its properties, there have been no disposals, releases or
threatened releases of substances regulated by any governmental entity or that
has been designated by any governmental entity to be hazardous, toxic or
dangerous materials or otherwise a danger to health or the environment
("Hazardous Materials") from or any presence thereof on such properties which
---------------------
would have a Material Adverse Effect. To the knowledge of UniCAD, there have
not been any presence, disposals, releases or threatened releases of hazardous
materials on or from any of such properties, which may have occurred prior to
UniCAD or the Subsidiary having taken possession of any of such properties which
could have a Material Adverse Effect.
19
(b) None of the properties leased or owned by UniCAD or the
Subsidiary are in violation of any federal, state, municipal, or local law,
ordinance, regulation or order relating to industrial hygiene or to the
environmental conditions in such properties, including, but not limited to, soil
and ground water condition which would have a Material Adverse Effect.
(c) During the time that UniCAD and the Subsidiary have leased or
owned their properties, neither UniCAD nor the Subsidiary nor, to UniCAD's
knowledge, any third party, has used, generated, manufactured or stored in such
properties or transported to or from such properties any Hazardous Materials
which would have a Material Adverse Effect.
(d) During the time that UniCAD and the Subsidiary have owned or
leased its properties, there has been no litigation, proceeding or
administrative action brought or, to UniCAD's knowledge, threatened in writing,
against UniCAD or the Subsidiary, or any settlement reached by UniCAD or the
Subsidiary with, any party or parties alleging the presence, disposal, release
or threatened release of any Hazardous Materials on, from or under any of such
properties.
3.22 Development Tools. Schedule 3.22 contains a complete list of all
----------------- -------------
software or other development tools used or currently intended to be used in the
development of any UniCAD Intellectual Property, except for any such tools that
are generally available and are used in their generally available form (such as
standard compilers) (the "Development Tools"). Schedule 3.22 also sets forth,
----------------- -------------
for each Development Tool: (a) for any Development Tool not entirely developed
internally by UniCAD employees, the identity of the independent contractors and
consultants involved in such development and a list of the agreements with such
independent contractors and consultants; (b) a list of any third parties with
any rights to receive royalties or other payments with respect to such
Development Tool, and a schedule of all such royalties payable; (c) a list of
any restrictions on UniCAD's or the Subsidiary's right to use and distribute
such Development Tool; and (d) a list of all agreements with third parties for
the use by such third party of such Development Tool. UniCAD has sufficient
right, title and interest in and to the Development Tools for the conduct of its
business as currently conducted and for the current intended uses of such
Development Tools.
3.23 Restrictions on Business Activities. There is no agreement,
-----------------------------------
judgment, injunction, order or decree binding upon UniCAD or the Subsidiary
which has or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of UniCAD or the Subsidiary, any
acquisition of property by UniCAD or the Subsidiary or the conduct of business
by UniCAD or the Subsidiary as currently conducted or as currently proposed to
be conducted.
4. REPRESENTATIONS AND WARRANTIES OF CCT
CCT hereby represents and warrants, that:
4.1 Organization and Good Standing. CCT is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the
20
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified as a foreign corporation in each jurisdiction in which a failure to be
so qualified would have a Material Adverse Effect.
4.2 Power, Authorization and Validity.
---------------------------------
4.2.1 CCT has the right, power, legal capacity and authority to
enter into and perform its obligations under this Agreement, and all agreements
to which CCT is or will be a party that are required to be executed pursuant to
this Agreement including the CCT Ancillary Agreements. The execution, delivery
and performance of this Agreement and the CCT Ancillary Agreements have been
duly and validly approved and authorized by CCT's Board of Directors.
4.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable CCT to enter into, and to perform its
obligations under, this Agreement and the CCT Ancillary Agreements, except for
(a) the filing of the Articles of Merger with the Massachusetts Secretary of
State, and the filing of appropriate documents with the relevant authorities of
other states in which CCT is qualified to do business, and (b) such filings as
may be required to comply with federal and state securities laws.
4.2.3 This Agreement and the CCT Ancillary Agreements are, or
when executed by CCT (or, if later effectiveness is provided by the terms of the
such agreement, then when effective) will be, valid and binding obligations of
CCT enforceable in accordance with their respective terms, except as to the
effect, if any, of (a) applicable bankruptcy and other similar laws affecting
the rights of creditors generally, (b) rules of law governing specific
performance, injunctive relief and other equitable remedies and (c) the
enforceability of provisions requiring indemnification in connection with the
offering, issuance or sale of securities; provided, however, that the Agreement
of Merger will not be effective until the Articles of Merger are filed with the
Massachusetts Secretary of State.
4.3 CCT Common Stock Issued in Merger. The CCT Common Stock to be
---------------------------------
issued at the Closing will be duly and validly issued, fully paid and
nonassessable and subject to no preemptive rights, will be issued in compliance
with all applicable registration or qualification requirements (or applicable
exemptions therefrom) under the applicable federal and state securities laws,
and will be freely tradable in compliance with Rule 145 promulgated under the
Securities Act, subject to the restrictions contained therein.
4.4 No Violation. The execution and delivery of this Agreement and
------------
the CCT Ancillary Agreements, and the consummation of the transactions
contemplated hereby, will not, (i) conflict with any provision of the
Certificate of Incorporation or Bylaws of CCT, as currently in effect, or (ii)
result in any violation of any order, judgment, decree, statute, law, ordinance,
rule or regulation applicable to CCT, its properties or assets which,
individually or in the aggregate, would have a Material Adverse Effect on CCT.
4.5 Litigation. There is no action, proceeding, claim or
----------
investigation pending or threatened, to CCT's knowledge, there currently exists
no set of circumstances likely to result in any such action, proceeding, claim
or investigation, against CCT before any court or
21
administrative agency that if determined adversely to CCT would have a Material
Adverse Effect.
4.6 Disclosure. CCT has made available to UniCAD an investor
----------
disclosure package consisting of CCT's annual report on Form 10-K for its fiscal
year ending December 31, 1995 (the "Fiscal Year End") and each report,
---------------
registration statement and definitive proxy statement filed by CCT with the
Securities and Exchange Commission (the "Commission") since the Fiscal Year End
----------
and up to the date of this Agreement (the "CCT Disclosure Package"), which
----------------------
constitute all reports and registration statements required to be filed by CCT
during such period under the Securities Exchange Act of 1934, as amended. The
documents included in the CCT Disclosure Package, as of their respective dates,
complied in all material respects as to form with the requirements of their
respective forms. The financial statements included in the Disclosure Package
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (subject, in the case of unaudited interim
financial statements, to recurring year-end adjustments, which adjustments will
not be material in amount or effect). The CCT Disclosure Package, this
Agreement, the exhibits and schedules hereto, and any certificates or documents
to be delivered to UniCAD pursuant to this Agreement, when taken together, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances under which such statements were made,
not misleading.
4.7 No Brokers. CCT is not obligated for the payment of fees or
----------
expenses of any investment banker, broker or finder in connection with the
origin, negotiation or execution of this Agreement or the Agreement of Merger or
in connection with any transaction contemplated hereby or thereby.
4.8 Capitalization. As of June 30, 1996, (i) the authorized capital
--------------
stock of CCT consists of 30,000,000 shares of Common Stock and 5,000,000 shares
of Preferred Stock, (ii) there are issued and outstanding approximately
12,457,350 shares of Common Stock and no shares of Preferred Stock, and (iii)
there are no outstanding options, warrants or similar rights for the purchase or
acquisition from CCT of any shares of its capital stock, except (A) shares of
Common Stock reserved for issuance under CCT's 1989 Stock Option Plan, 1993
Equity Incentive Plan, 1995 Directors Stock Option Plan and 1995 Employee Stock
Purchase Plan and the rights of CCT under such plans, (B) shares reserved for
issuance pursuant to this Agreement, and (C) as set forth in agreements between
CCT and Synopsys, Inc. which have been publicly filed with the SEC.
5. UNICAD PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, UniCAD covenants and agrees as follows:
5.1 Advice of Changes. UniCAD will promptly advise CCT in writing (a)
-----------------
of any event occurring subsequent to the date of this Agreement that would
render any representation or warranty of UniCAD contained in this Agreement, if
made on or as of the date of such event or the Closing Date, untrue or
inaccurate in any material respect and (b) of any Material Adverse Effect. To
ensure compliance with this Section 5.1, UniCAD shall deliver to
22
CCT within fifteen (15) days after the end of each monthly accounting period
ending after the date of this Agreement and before the Closing Date, an
unaudited consolidated balance sheet and consolidated statement of income, which
financial statements shall be prepared in the ordinary course of business, in
accordance with UniCAD's books and records and generally accepted accounting
principles and shall fairly present the financial position of UniCAD as of their
respective dates and the results of UniCAD's operations for the periods then
ended.
5.2 Maintenance of Business. UniCAD will use all reasonable efforts
-----------------------
to carry on and preserve, without material impairment, its business and its
relationships with customers, suppliers, employees and others in substantially
the same manner as it has prior to the date hereof. If UniCAD becomes aware of
a material deterioration in the relationship with any significant customer,
supplier or key employee, it will promptly bring such information to the
attention of CCT in writing and, if requested by CCT, will exert its reasonable
efforts to restore the relationship.
5.3 Conduct of Business. UniCAD will continue to conduct its business
-------------------
and maintain its business relationships in the ordinary and usual course
consistent with past practice and will not, without the prior written consent of
CCT:
(a) borrow any money other than in the ordinary course of
business and in amounts and on terms consistent with past practices, but in any
event not exceeding $10,000;
(b) enter into any transaction not in the ordinary course of
business or enter into any transaction or make any commitment involving an
expense or capital expenditure in excess of $20,000;
(c) encumber or permit to be encumbered any of its assets except
in the ordinary course of its business consistent with past practice and in all
events not in excess of $10,000;
(d) dispose of any of its assets except in the ordinary course of
business consistent with past practice in amounts less than $10,000 in the
aggregate;
(e) enter into any lease or contract for the purchase or sale of
any property, real or personal, tangible or intangible, except in the ordinary
course of business consistent with past practice in amounts less than $20,000 in
the aggregate;
(f) fail to maintain its equipment and other assets in good
working condition and repair consistent with the standards it has maintained to
the date of this Agreement, subject only to ordinary wear and tear;
(g) terminate any of its management or key development personnel;
(h) pay any bonus, royalty, increased salary or special
remuneration to any officer, employee or consultant (except pursuant to existing
arrangements previously disclosed to and approved in writing by CCT or disclosed
on a Schedule to the Disclosure Letter) or enter into
23
any new employment or consulting agreement with any such person, initiate any
new Employee Plans or materially alter the benefits under any existing Employee
Plans;
(i) change accounting methods, other than changes required by the
Financial Accounting Standards Board or other body of similar authority in rules
or pronouncements to be adopted or issued after the signing of this Agreement;
(j) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock;
(k) amend or terminate any contract, agreement or license to
which it is a party except those amended or terminated in the ordinary course of
business, consistent with past practice, and which are not material in amount or
effect;
(l) lend any amount to any person or entity, other than advances
for travel and other business expenses which are incurred in the ordinary course
of business consistent with past practice, not material in amount and documented
by receipts for the claimed amounts;
(m) guarantee or act as a surety for any obligation except for
the endorsement of checks and other negotiable instruments in the ordinary
course of business, consistent with past practice, which are not material in
amount;
(n) waive or release any material right or claim except in the
ordinary course of business, consistent with past practice;
(o) issue or sell any shares of its capital stock of any class
(except upon the exercise of an option currently outstanding), or any other of
its securities, or issue or create any warrants, obligations, subscriptions,
options, convertible securities, or other commitments to issue shares of capital
stock, or accelerate the vesting of any outstanding option or other security;
(p) enter into any recapitalization affecting the number of
outstanding shares of its capital stock of any class or affecting any other of
its securities;
(q) merge, consolidate or reorganize with, or acquire, any entity
other than Newco or CCT;
(r) amend its Articles of Organization or Incorporation, Bylaws
or other charter documents;
(s) license any of its technology or intellectual property except
to end-users in the ordinary course of business consistent with past practice;
(t) acquire rights to any technology, product or development
tool, except nonexclusive end user licenses in the ordinary course of business
consistent with past practices;
24
(u) agree to any audit assessment by any tax authority or file
any tax return unless copies of such returns have been delivered to CCT for its
review prior to filing;
(v) materially change any insurance coverage or issue any
certificates of insurance; or
(w) agree to do, or permit the Subsidiary to do or agree to do,
any of the things described in the preceding clauses 5.3(a) through 5.3(v).
5.4 Stockholders Approval. UniCAD will hold a special meeting of its
---------------------
stockholders (the "Stockholders Meeting") prior to the Effective Time to submit
--------------------
this Agreement, the Merger and related matters for the consideration and
approval of the UniCAD stockholders, which approval will be recommended by
UniCAD's Board of Directors and management. Such meeting will be called, held
and conducted, and any proxies will be solicited, in compliance with applicable
law.
5.5 Permit Application, Hearing Request and Hearing Notice. UniCAD
------------------------------------------------------
shall use diligent good faith efforts to assist CCT in the preparation and
filing of the Permit Application, Hearing Request and Hearing Notice and to have
the Permit issued under the Securities Law as promptly as practicable after such
filing.
5.6 Regulatory Approvals. UniCAD will execute and file, or join in
--------------------
the execution and filing, of any application or other document that may be
necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign which may be reasonably
required, or which CCT may reasonably request, in connection with the
consummation of the transactions contemplated by this Agreement. UniCAD will
use all reasonable efforts to obtain all such authorizations, approvals and
consents.
5.7 Necessary Consents. UniCAD will use its reasonable efforts to
------------------
obtain such written consents and take such other actions as may be necessary or
appropriate in addition to those set forth in Sections 5.5 and 5.6, if any, to
allow the consummation of the transactions contemplated hereby and to allow CCT
to carry on UniCAD's business after the Closing.
5.8 Litigation. UniCAD will notify CCT in writing promptly after
-----------
learning of any actions, suits, proceedings or investigations by or before any
court, board or governmental agency, initiated by or against UniCAD or the
Subsidiary, or known by it to be threatened against it. If UniCAD or the
Subsidiary becomes subject to a review by the Internal Revenue Service or any
other taxing agency or authority for accounting periods prior to the Closing
Date (including but not limited to any short tax year resulting from the
Merger), then UniCAD acknowledges that CCT will be entitled to participate in
such review(s) and that UniCAD (and not the UniCAD stockholders) shall be
responsible for payment of any assessment. UniCAD will not enter into any
settlement or other stipulation with respect to any such review without the
written consent of CCT, which consent will not be unreasonably withheld.
5.9 No Other Negotiations. From the date hereof until this Agreement
---------------------
is terminated in accordance with the terms hereof or until consummation of the
Merger, UniCAD agrees that it will not, that it will not authorize or permit any
person or entity who is or becomes
25
an officer, director, employee or affiliate of UniCAD or the Subsidiary, or any
other person, on its or their behalf to, and that no person or entity who is or
becomes an officer, director, employee or affiliate of UniCAD or the Subsidiary,
or any other person, on its or their behalf will, directly or indirectly,
solicit or encourage any offer from any party or consider any inquiry or
proposal received from any party other than CCT, participate in any negotiations
regarding, or furnish to any person any information with respect to, or
otherwise cooperate with, facilitate or encourage any effort or attempt by any
person (other than CCT), concerning the possible disposition of all or any
material portion of UniCAD's or the Subsidiary's business, assets or capital
stock by merger, sale or any other means. UniCAD will promptly notify CCT orally
and in writing of any such offer, inquiry or proposal, providing a reasonably
detailed description of such offer, inquiry or proposal, including the identity
of the third party.
5.10 Access to Information. Until the Closing, UniCAD will allow CCT
---------------------
and its agents reasonable access the files, books, records and offices of UniCAD
and the Subsidiary, including, without limitation, any and all information
relating to UniCAD's taxes, commitments, contracts, leases, licenses, and real,
personal and intangible property (not including source code) and financial
condition. UniCAD will cause its accountants to cooperate with CCT and its
agents in making available all financial information reasonably requested,
including without limitation the right to examine all working papers pertaining
to all financial statements prepared or audited by such accountants.
5.11 Satisfaction of Conditions Precedent. UniCAD will use all
------------------------------------
reasonable efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Section 9, and UniCAD will use all reasonable
efforts to cause the transactions contemplated by this Agreement to be
consummated.
5.12 UniCAD Affiliates Agreements. To the extent not delivered to CCT
----------------------------
concurrently with the execution of this Agreement, UniCAD will exert all
reasonable efforts to cause each of its affiliates to sign and deliver to CCT,
on or prior to the Closing, the UniCAD Affiliates Agreements.
5.13 UniCAD Dissenting Shares. As promptly as practicable after the
------------------------
date of the Stockholders' Meeting and prior to the Closing Date, UniCAD shall
furnish CCT with the name and address of each holder of Dissenting Shares, if
any, and the number of Dissenting Shares owned by such holder.
5.14 Employment Agreements. UniCAD will exert all reasonable efforts
---------------------
to cause each of the Employment Agreements to be signed and delivered to CCT, on
or prior to the Closing.
5.15 Pooling Accounting. UniCAD shall use all reasonable efforts to
------------------
cause the business combination to be effected by the Merger to be accounted for
as a pooling of interests. UniCAD shall use good faith efforts to attempt to
cause its affiliates not to take any action that would adversely affect the
ability of CCT to account for the business combination to be effected by the
Merger as a pooling of interests, although there can be no assurances that such
affiliates will not take such actions.
26
5.16 Blue Sky Laws. UniCAD shall use all reasonable efforts to assist
-------------
CCT to the extent necessary to comply with the securities and Blue Sky laws of
all jurisdictions which are applicable in connection with the Merger.
6. CCT PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, CCT covenants and agrees as follows:
6.1 Advice of Changes. CCT will promptly advise UniCAD in writing of
-----------------
any event occurring subsequent to the date of this Agreement that would render
any representation or warranty of CCT contained in this Agreement, if made on or
as of the date of such event or the Closing Date, untrue or inaccurate in any
material respect.
6.2 Regulatory Approvals. CCT will execute and file, or join in the
--------------------
execution and filing, of any application or other document that may be necessary
in order to obtain the authorization, approval or consent of any governmental
body, federal, state, local or foreign, which may be reasonably required, or
which UniCAD may reasonably request, in connection with the consummation of the
transactions contemplated by this Agreement. CCT will use all reasonable
efforts to obtain all such authorizations, approvals and consents.
6.3 Satisfaction of Conditions Precedent. CCT will use all reasonable
------------------------------------
efforts to satisfy or cause to be satisfied all the conditions precedent which
are set forth in Section 8, and CCT will use all reasonable efforts to cause the
transactions contemplated by this Agreement to be consummated.
6.4 CCT Affiliates Agreements. CCT will exert all reasonable efforts
-------------------------
to cause each of its affiliates to sign and deliver to CCT, on or prior to the
Closing, the CCT Affiliates Agreements.
6.5 Preparation of Permit Application, Hearing Request and Hearing
--------------------------------------------------------------
Notice. As promptly as practicable after the date hereof, CCT, with UniCAD's
------
assistance, shall prepare and file with the Commissioner the Permit Application,
Hearing Request and Hearing Notice and any other documents required by the
California Corporate Securities Law of 1968, as amended in connection with the
Merger. CCT, with UniCAD's assistance, shall use all reasonable efforts to have
the Permit Application, Hearing Request and Hearing Notice declared effective
under the California Corporate Securities Law of 1968, as amended as promptly as
practicable after such filing.
6.6 Blue Sky Laws. CCT shall use all reasonable efforts to comply
-------------
with the securities and Blue Sky laws of all jurisdictions which are applicable
in connection with the Merger.
6.7 Pooling Accounting. CCT shall use all reasonable efforts to
------------------
cause the business combination to be effected by the Merger to be accounted for
as a pooling of interests. CCT shall use good faith efforts to attempt to cause
its affiliates not to take any action that would adversely affect the ability of
CCT to account for the business combination to be effected by the
27
Merger as a pooling of interests, although there can be no assurances that such
affiliates will not take such actions.
6.8 Preservation of Business Organization. Between the date of this
-------------------------------------
Agreement and the Closing, CCT shall use its reasonable efforts to cause to
preserve without material impairment the business of CCT and its subsidiaries.
6.9 Documents and Information to be Furnished. CCT shall furnish to
-----------------------------------------
UniCAD, promptly after filed with the Commission, any reports filed with the
Commission between the date of this Agreement and the Closing Date.
6.10 Notice of Certain Events. CCT shall promptly notify UniCAD of
------------------------
(i) any notice or other communication from any person alleging that the consent
of such person is or may be required in connection with the transactions
contemplated by this Agreement; (ii) any notice or other communication from any
governmental authority in connection with the transaction contemplated by this
Agreement; and (iii) any actions, suits, claims, investigations or proceedings
commenced against CCT relating to the consummation of the transactions
contemplated by this Agreement.
6.11 Directors and Officers Indemnification. CCT and UniCAD shall, in
--------------------------------------
the case of CCT too the maximum content allowed by Delaware law, indemnify,
defend and hold harmless each person who is now, or has been at any time prior
to the date hereof or who becomes prior to the Effective Time, an officer or
director of UniCAD or any of its subsidiaries, to the same extent that such
persons are currently indemnified by UniCAD pursuant to UniCAD's articles of
incorporation and bylaws (as in effect on the date of this Agreement) for any
acts or omissions occurring prior to the Effective Time. The foregoing shall
not, however, apply with respect to, or relieve any such person from, any
liability that it may have to CCT relating to the transactions contemplated by
this Agreement or otherwise as a stockholder of UniCAD.
6.12 Non-Solicitation. If this Agreement is terminated in accordance
----------------
with Section 10 (other than termination by CCT under Section 10.2), then CCT
shall not, for a period of one (1) year from the date of this Agreement,
directly solicit or induce any person who is an employee of UniCAD or any of its
subsidiaries on the date of this Agreement to terminate such employees'
employment with UniCAD or any of its subsidiaries; provided, however, that if
any such person contacts CCT regarding possible employment with CCT, the
foregoing shall not be construed as prohibiting CCT from pursuing discussions
with such person and employing such person.
6.13 Access to Information. Until the Closing, CCT will provide the
---------------------
officers of UniCAD with reasonable opportunities to ask questions of and receive
answers from CCT's Chief Financial Officer concerning information relevant to
the transactions contemplated by this Agreement.
7. CLOSING MATTERS
7.1 The Closing. Subject to termination of this Agreement as provided
-----------
in Section 10 below, the Closing will take place at the offices of Fenwick &
West, Two Palo Alto
28
Square, Palo Xxxx, Xxxxxxxxxx 00000 at 1:30 p.m., Pacific Standard Time on or
about August 28, 1996, or, if all conditions to closing have not been satisfied
or waived by such date, such other place, time and date as UniCAD and CCT may
mutually select (the "Closing Date"). Concurrently with the Closing, the
------------
Articles of Merger will be filed in the office of the Massachusetts Secretary of
State in accordance with Massachusetts law. The Agreement of Merger provides
that the Merger shall become effective upon such filing.
7.2 Exchange of Certificates.
------------------------
7.2.1 As of the Effective Time, all shares of UniCAD Stock that
are outstanding immediately prior thereto will, by virtue of the Merger and
without further action, cease to exist and will be converted solely into the
right to receive from CCT the number of shares of CCT Common Stock determined as
set forth in Section 2.1.2, subject to Sections 2.1.3 and 2.1.4.
7.2.2 As soon as practicable after the Effective Time, each
holder of shares of UniCAD Common Stock that are not Dissenting Shares will
surrender the certificate(s) for such shares (or a properly executed affidavit
of loss reasonably satisfactory to CCT) (the "UniCAD Certificates"), duly
-------------------
endorsed as requested by CCT, to CCT for cancellation. Promptly after the
Effective Time and receipt of such UniCAD Certificates, CCT will cause the First
Bank of Boston, CCT's transfer agent, to issue to each tendering holder a
certificate for the number of shares of CCT Common Stock to which such holder is
entitled pursuant to Section 2.1.2 hereof, less the shares of CCT Common Stock
deposited into escrow pursuant to Section 2.2 hereof, and distribute any cash
payable under Section 2.1.4.
7.2.3 No dividends or distributions payable to holders of record
of CCT Common Stock after the Effective Time, or cash payable in lieu of
fractional shares, will be paid to the holder of any unsurrendered UniCAD
Certificate(s) until the holder of the UniCAD Certificate(s) surrenders such
UniCAD Certificate(s). Subject to the effect, if any, of applicable escheat and
other laws, following surrender of any UniCAD Certificate, there will be
delivered to the person entitled thereto, without interest, the amount of any
dividends and distributions therefor paid with respect to CCT Common Stock so
withheld as of any date subsequent to the Effective Time and prior to such date
of delivery.
7.2.4 All CCT Common Stock delivered upon the surrender of
UniCAD Common Stock in accordance with the terms hereof will be deemed to have
been delivered in full satisfaction of all rights pertaining to such UniCAD
Common Stock. There will be no further registration of transfers on the stock
transfer books of UniCAD or its transfer agent of the UniCAD Common Stock. If,
after the Effective Time, UniCAD Certificates are presented for any reason, they
will be canceled and exchanged as provided in this Section 7.2. Notwithstanding
anything herein to the contrary, except to the extent waived by CCT, any UniCAD
Certificate that is not properly submitted to CCT for exchange and cancellation
within three years after the Effective Time shall no longer evidence ownership
of or any right to receive shares of CCT Common Stock and all rights of the
holder of such UniCAD Certificate, with respect to the shares previously
evidenced by such UniCAD Certificate, shall cease.
29
7.2.5 Until certificates representing UniCAD Common Stock
outstanding prior to the Merger are surrendered pursuant to Section 7.2.2 above,
such certificates will be deemed, for all purposes, to evidence ownership of the
number of shares of CCT Common Stock into which the UniCAD Common Stock will
have been converted, reduced by the number of shares withheld as Escrow Shares.
7.3 Assumption of Options. Promptly after the Effective Time, CCT
---------------------
will notify in writing each holder of a UniCAD Option of the assumption of such
UniCAD Option by CCT, and the number of shares of CCT Common Stock that are then
subject to such option and the exercise price of such option, as determined
pursuant to Section 2.1.5 hereof.
8. CONDITIONS TO OBLIGATIONS OF UNICAD
UniCAD's obligations hereunder are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by UniCAD, but only in a writing signed by
UniCAD):
8.1 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of CCT set forth in Section 4 shall be true and accurate in every
material respect on and as of the Closing with the same force and effect as if
they had been made at the Closing, and UniCAD shall receive a certificate to
such effect executed by CCT's President and Chief Financial Officer, except to
the extent such representations and warranties are by their express provisions
made as of the date of this Agreement or another specified date, in which case
the certificate shall state that as of the Closing Date, such representations
and warranties remain true and correct in every material respect as of such
express prior date.
8.2 Covenants. CCT shall have performed and complied in all material
---------
respects with all of its covenants contained in Section 6 on or before the
Closing, and UniCAD shall receive a certificate to such effect signed by CCT's
President and Chief Financial Officer.
8.3 Compliance with Law. There shall be no order, decree, or ruling
-------------------
by any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
8.4 Government Consents. There shall have been obtained at or prior
-------------------
to the Closing Date such permits or authorizations, and there shall have been
taken such other action, as may be required to consummate the Merger by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken, including but not limited to requirements under applicable
federal and state securities laws.
8.5 Permit. The Permit shall have been issued under the Securities
------
Law after the Fairness Hearing, and the Permit shall not be the subject of any
stop order or proceedings seeking a stop order.
8.6 Opinion of CCT's Counsel. UniCAD shall have received from counsel
------------------------
to CCT, an opinion substantially in the form of Exhibit F.
---------
30
8.7 Stockholder Approval. The principal terms of this Agreement and
--------------------
the Agreement of Merger shall have been approved and adopted by UniCAD
stockholders, as required by applicable law and UniCAD's Articles of
Organization and Bylaws.
8.8 No Litigation. No litigation or proceeding shall be threatened or
-------------
pending for the purpose or with the probable effect of enjoining or preventing
the consummation of any of the transactions contemplated by this Agreement.
8.9 Absence of Material Adverse Effect. There shall not have occurred
----------------------------------
since the date of this Agreement, any Material Adverse Effect other than such
adverse effects, if any, as may be caused by events or circumstances that have a
general adverse effect on businesses that are engaged in the general business in
which CCT is engaged and which are not specific to CCT, and UniCAD shall receive
a certificate to such effect signed by CCT's President. For purposes of this
Section 8.9, a decline in the market price of the Common Stock of CCT shall not
constitute or be evidence of a Material Adverse Effect.
9. CONDITIONS TO OBLIGATIONS OF CCT
The obligations of CCT hereunder are subject to the fulfillment or
satisfaction on, and as of the Closing, of each of the following conditions (any
one or more of which may be waived by CCT, but only in a writing signed by CCT):
9.1 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of UniCAD set forth in Section 3 shall be true and accurate in
every material respect on and as of the Closing with the same force and effect
as if they had been made at the Closing, and CCT shall receive a certificate to
such effect executed by UniCAD's President, except to the extent such
representations and warranties are by their express provisions made as of the
date of this Agreement or another specified date, in which case the certificate
shall state that as of the Closing Date, such representations and warranties
remain true and correct in every material respect as of such express prior date.
9.2 Covenants. UniCAD shall have performed and complied in all
---------
material respects with all of its covenants contained in Section 5 on or before
the Closing, and CCT shall receive a certificate to such effect signed by
UniCAD's President.
9.3 Absence of Material Adverse Effect. There shall not have occurred
----------------------------------
since the date of this Agreement, any Material Adverse Effect, and CCT shall
receive a certificate to such effect signed by UniCAD's President.
9.4 Compliance with Law. There shall be no order, decree, or ruling
-------------------
by any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
9.5 Permit. The Permit shall have been issued under the Securities
------
Law after the Fairness Hearing, and the Permit shall not be the subject of any
stop order or proceedings seeking a stop order.
31
9.6 Government Consents. There shall have been obtained at or prior
-------------------
to the Closing Date such permits or authorizations, and there shall have been
taken such other action, as may be required to consummate the Merger by any
regulatory authority having jurisdiction over the parties and the actions herein
proposed to be taken, including but not limited to requirements under applicable
federal and state securities laws.
9.7 Opinion of UniCAD's Counsel. CCT shall have received from counsel
---------------------------
to UniCAD, an opinion substantially in the form of Exhibit G.
---------
9.8 Consents. CCT shall have received duly executed copies of all
--------
material third-party consents (including, without limitation, the required
consents identified in Schedule 3.5 of the Disclosure Letter), approvals,
assignments, waivers, authorizations or other certificates contemplated by this
Agreement or the Disclosure Letter deemed necessary by CCT's legal counsel to
provide for the continuation in full force and effect of any and all of the
UniCAD Material Agreements and for CCT to consummate the transactions
contemplated hereby in form and substance reasonably satisfactory to CCT, except
for such thereof as CCT and UniCAD shall have agreed shall not be obtained.
9.9 No Litigation. No litigation or proceeding shall be threatened or
-------------
pending for the purpose or with the probable effect of enjoining or preventing
the consummation of any of the transactions contemplated by this Agreement, or
which could have a Material Adverse Effect on UniCAD.
9.10 Stockholder Approval. The principal terms of this Agreement and
--------------------
the Agreement of Merger shall have been approved and adopted by UniCAD
stockholders, as required by applicable law and UniCAD's Articles of
Organization and Bylaws.
9.11 Dissenting Shares. The Dissenting Shares shall not constitute
-----------------
more than 5% of the total number of shares of UniCAD Common Stock outstanding
immediately prior to the Effective Time.
9.12 Escrow. CCT shall have received the Escrow Agreement executed by
------
UniCAD and Xxxxxxx Xxxxxxx, as the Representative for all UniCAD stockholders,
and each of the other UniCAD Stockholders identified on the signature pages
thereto, providing for the escrow of the Escrow Shares.
9.13 Affiliates Agreements. Each of the UniCAD Affiliates Agreements
---------------------
shall have been executed and delivered to CCT.
9.14 Pooling Opinion. CCT's accounting firm, Ernst & Young LLP ("CCT's
--------------- -----
Auditors"), shall have received from UniCAD a copy of a letter from Deloitte &
--------
Touche LLP ("UniCAD's Auditors"), in form and substance satisfactory to CCT's
-----------------
Auditors, to the effect that UniCAD's Auditors are not aware of any fact
concerning UniCAD that would preclude CCT from accounting for the Merger as a
pooling of interests, and CCT shall have received from CCT's Auditors a letter,
in form and substance satisfactory to CCT, regarding the appropriateness of
"pooling of interests" accounting for the Merger under Accounting Principles
Board Opinion No. 16.
32
9.15 Employment Agreements. CCT shall have received executed copies of
---------------------
each of the Employment Agreements.
9.16 Termination of Rights. Any registration rights, rights of
---------------------
refusal, rights to any liquidation preference, or redemption rights of any
UniCAD stockholder shall have been terminated or waived as of the Closing.
9.17 Resignation of Directors. The directors of UniCAD in office
------------------------
immediately prior to the Effective Time of the Merger shall have resigned as
directors of the surviving corporation effective as of the Effective Time of the
Merger.
9.18 Viewlogic Waiver and Amendment. Viewlogic, XxxXXX, Xxxxxxx
------------------------------
Xxxxxxx, Xxxxxxx Xxxx and Xxxxxx Xxxxxxxxxx shall have executed and delivered
the Viewlogic Waiver in the form attached hereto as Exhibit H.
------- -
9.19 CBDS License Amendment. Northern Telecom, UniCAD and CCT shall
----------------------
have executed and delivered the CBDS License Agreement in the from attached
hereto as Exhibit I terminating and superseding the prior CBDS License Agreement
---------
among Northern Telecom, UniCAD and Viewlogic.
9.20 Certificate Regarding Transaction Expenses. CCT shall receive a
------------------------------------------
certificate executed by UniCAD's President that sets forth the total amount of
investment banking, accounting, and legal fees and expenses incurred or to be
incurred in connection with the Merger and the other transactions contemplated
hereby.
9.21 Waiver of Severance Liabilities. Xxxxxxx Xxxxxxx, Xxxxxxx Xxxx
-------------------------------
and Xxxxxx Xxxxxxxxxx, shall have each executed and delivered a termination
agreement with UniCAD and the Subsidiary in the from attached hereto as
Exhibit J terminating and waiving all of the obligations of UniCAD and the
---------
Subsidiary pursuant to the Severance Agreements.
10. TERMINATION OF AGREEMENT
10.1 Prior to Closing.
----------------
10.1.1 This Agreement may be terminated at any time prior to the
Closing by the mutual written consent of each of the parties hereto.
10.1.2 Unless otherwise agreed by the parties hereto, this
Agreement will be terminated if all conditions to the Closing have not been
satisfied or waived on or before August 31, 1996; provided, however, that the
right to terminate this Agreement under this Section 10.1.2 shall not be
available to any party if such party's breach of any representation, warranty or
agreement contained in this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such date. Notwithstanding the
foregoing, the parties hereto may mutually agree in writing to extend the
termination date set forth in the preceding sentence.
33
10.2 For Breach. Either party may terminate this Agreement by written
-----------
notice to the other party if such other party is in material breach of any
representation, warranty, covenant or agreement contained in this Agreement and
such breaching party fails to cure such material breach within fifteen (15) days
of written notice of such material breach from the non-breaching party.
10.3 Certain Continuing Obligations. Following any termination of
-------------------------------
this Agreement pursuant to this Section 10, the parties hereto will continue to
be liable for breaches of this Agreement prior to such termination and will
continue to perform their respective obligations under Sections 11.2 and 12.16,
but will not be required to continue the perform their other covenants under
this Agreement.
10.4 Procedure Upon Termination. In the event of the termination of
--------------------------
this Agreement, the Board or Boards of Directors so terminating may direct its
or their officers not to file the Articles of Merger in the office of the
Secretary of State of the Commonwealth of Massachusetts, notwithstanding
favorable action by the stockholders of UniCAD.
11. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND
REMEDIES, CONTINUING COVENANTS
11.1 Survival of Representations. All representations and warranties
---------------------------
contained in this Agreement will remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the parties to this
Agreement, until the earlier of the termination of this Agreement or the
expiration of the Escrow Period, whereupon such representations and warranties
will expire.
11.2 Agreement to Indemnify.
----------------------
11.2.1 Indemnification by UniCAD Stockholders. Subject to the
--------------------------------------
limitations set forth in this Section 11, the UniCAD stockholders will indemnify
and hold harmless CCT and its officers, directors, agents and employees, and
each person, if any, who controls or may control CCT within the meaning of the
Securities Act (hereinafter referred to individually as an "Indemnified Person"
------------------
and collectively as "Indemnified Persons") from and against any and all claims,
-------------------
demands, actions, causes of actions, losses, costs, damages, liabilities and
expenses including, without limitation, reasonable legal fees (hereinafter
referred to as "Damages"): (a) arising out of any misrepresentation or breach
-------
of or default in connection with any of the representations, warranties and
covenants given or made by UniCAD in this Agreement or any certificate, document
or instrument delivered by or on behalf of UniCAD pursuant hereto; or (b)
resulting from (i) any failure of any UniCAD stockholder to have good, valid and
marketable title to the issued and outstanding UniCAD Common Stock held by such
stockholder, free and clear of all liens, claims, pledges, options, adverse
claims, assessments or charges of any nature whatsoever, or (ii) to have full
right, capacity and authority to vote such UniCAD Common Stock in favor of the
Merger and the other transactions contemplated by this Agreement and the
Agreement of Merger, or (iii) any claim by a stockholder or former stockholder
of UniCAD, or any other person, firm, corporation, or entity, seeking to assert,
or based upon: ownership or rights to ownership of any shares of stock of
UniCAD (or shares of stock of CCT by virtue of the Merger), any rights of a
stockholder, including any options,
34
dissenter's or preemptive rights or rights to notice or to vote, any rights
under the articles of incorporation or bylaws of UniCAD, any rights under any
agreement among UniCAD and its stockholders, or any claim that his or her shares
were wrongfully repurchased by UniCAD, or (iv) any breach of the representations
and warranties set forth in Sections 3.3 and 3.4; (c) any claim arising out of
or relating to the matter identified in Schedule 3.6 and Section 3(d) of
Schedule 3.3 of the UniCAD Disclosure Letter; or (d) any claim arising out of or
relating to the share repurchases described in Section 1 of Schedule 3.10 of the
Disclosure Letter. All matters referred to in (a), (b), (c) and (d) above are
collectively referred to herein as "Indemnification Matters."
------------------------
11.2.2 Limitations. The Escrow Shares and any other assets
-----------
deposited in escrow pursuant to the Escrow Agreement shall be the Indemnified
Persons' sole recourse under Section 11.2.1, and no claim for Damages shall
first be made under Section 11.2.1 after expiration of the Escrow Period. The
UniCAD shareholders shall not be obligated to indemnify the Indemnified Persons
under this Section 11 if and to the extent that the Indemnified Persons have
received any insurance proceeds attributable to such Damages.
11.2.3 Exceptions to Limitations. None of the limitations of
-------------------------
Section 11.2.2 shall in any manner limit the liability or indemnification
obligations of the UniCAD stockholders with respect to (i) claims of intentional
misrepresentation or fraud, (ii) any Indemnification Matter described in Section
11.2.1(b) arising out of or resulting from action or inaction on the part of
UniCAD, (iii) any criminal matters, (iv) with respect to a particular UniCAD
stockholder, any Indemnification Matter described in Section 11.2.1(b) arising
out of or resulting from action or inaction on the part of that UniCAD
stockholder, or (v) any Indemnification Matter described in Section 11.2.1(c).
The liability or indemnification obligations of the UniCAD stockholders
described in the preceding sentence shall, in all events, be limited to the
value, based on the Per Share Price, of the CCT Common Stock issuable to UniCAD
stockholders (or, with respect to clause (iv) of the preceding sentence, the
particular UniCAD stockholder) and option holders pursuant to this Agreement.
With respect solely to claims for indemnification made pursuant to this Section
11.2.3 (but not with respect to claims of intentional misrepresentation or fraud
or criminal matters or claims for indemnification made pursuant to the Escrow
Agreement), the UniCAD stockholder(s) from whom indemnification is sought may,
at the expense of such indemnifying stockholder(s), assume the defense of the
claim giving rise to the indemnification obligations with counsel mutually
satisfactory to CCT and such UniCAD stockholders, provided however that CCT
shall have the right to retain its own counsel, at the expense of the
indemnifying stockholder(s), if representation of CCT by the counsel retained by
the indemnifying stockholder(s) would be inappropriate due to actual or
potential conflicts of interest, and provided further that such indemnifying
stockholder(s) shall not settle any such claim without the consent of CCT, such
consent not to be unreasonably withheld.
12. MISCELLANEOUS
12.1 Governing Law. The internal laws of the State of California
-------------
(irrespective of its choice of law principles) will govern the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties hereto. Any litigation or other dispute
resolution proceeding among the parties relating to this Agreement will
35
take place in San Mateo, Santa Xxxxx or San Francisco County, California, The
parties consent to the personal jurisdiction of and the venue in the state and
federal courts within such counties.
12.2 Assignment; Binding Upon Successors and Assigns. Neither party
-----------------------------------------------
hereto may assign any of its rights or obligations hereunder without the prior
written consent of the other party hereto. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
12.3 Severability. If any provision of this Agreement, or the
------------
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and 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 the void or unenforceable provision.
12.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
both parties reflected hereon as signatories.
12.5 Other Remedies. 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 on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
12.6 Amendment and Waivers. Any term or provision of this Agreement
---------------------
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof or default in the performance hereof will
not be deemed to constitute a waiver of any other default or any succeeding
breach or default. The Agreement may be amended by the parties hereto at any
time before or after approval of the UniCAD stockholders, but, after such
approval, no amendment will be made which by applicable law requires the further
approval of the UniCAD stockholders without obtaining such further approval.
12.7 No Waiver. The failure of any party to enforce any of the
---------
provisions hereof will not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
12.8 Expenses. Each party will bear its respective expenses and legal
--------
fees incurred with respect to this Agreement, and the transactions contemplated
hereby; provided, however, that at the Closing, UniCAD shall deliver to CCT the
certificate called for by Section 9.21 and, to the extent that the total amount
of all investment banking, accounting and legal fees and expenses incurred or to
be incurred by UniCAD exceeds $300,000, the Total Share Number shall be reduced
by the nearest whole number of shares that is obtained by dividing such excess
36
amount by the Per Share Price. CCT shall be responsible for all costs and legal
fees (including, without limitation, reasonable legal fees of counsel to UniCAD)
associated or incurred with respect to the Fairness Hearing including, without
limitation, preparation of the permit application and any related filing fees.
12.9 Attorneys' Fees. Should suit be brought to enforce or interpret
---------------
any part of this Agreement, the prevailing party will be entitled to recover, as
an element of the costs of suit and not as damages, reasonable attorneys' fees
to be fixed by the court (including without limitation, costs, expenses and fees
on any appeal). The prevailing party will be entitled to recover its costs of
suit, regardless of whether such suit proceeds to final judgment.
12.10 Notices. Any notice or other communication required or permitted
-------
to be given under this Agreement shall be in writing, shall be delivered by hand
or overnight courier service, by certified mail, postage prepaid, or by
telecopier, (with a copy also delivered by certified or regular mail) and will
be deemed given upon delivery, if delivered personally, one business day after
deposit with a national courier service for overnight delivery, or one business
day after transmission by telecopier with confirmation of receipt, and three
days after deposit in the mails, if mailed, to the following addresses:
(i) If to CCT:
Xxxxxx & Chyan Technology, Inc.
0000 X. Xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Chief Financial Officer
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Fenwick & Xxxx
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
(ii) If to UniCAD:
UniCAD, Inc.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX X0X 0X0
Attention: Xxxxx XxXxxxxx
President and Chief Executive Officer
37
With a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx., Esq.
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 12.10, except that notices of change of address
shall only be effective upon receipt.
12.11 Construction of Agreement. This Agreement has been negotiated by
-------------------------
the respective parties hereto and their attorneys and the language hereof will
not be construed for or against either party. A reference to a Section or an
Exhibit will mean a Section in, or Exhibit to, this Agreement unless otherwise
explicitly set forth. A reference to a Schedule will mean a Schedule to the
Disclosure Letter. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
12.12 No Joint Venture. Nothing contained in this Agreement will be
----------------
deemed or construed as creating a joint venture or partnership between any of
the parties hereto. Except as explicitly specified herein, no party is by
virtue of this Agreement authorized as an agent, employee or legal
representative of any other party. No party will have the power to control the
activities and operations of any other and their status is, and at all times,
will continue to be, that of independent contractors with respect to each other.
Except as explicitly specified herein, no party will have any power or authority
to bind or commit any other. No party will hold itself out as having any
authority or relationship in contravention of this Section.
12.13 Further Assurances. Each party agrees to cooperate fully with
------------------
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.
12.14 Absence of Third Party Beneficiary Rights. No provisions of this
-----------------------------------------
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
12.15 Public Announcement. Upon execution of this Agreement CCT and
-------------------
UniCAD will issue a press release approved by both parties announcing the
Merger. CCT may issue such press releases, and make such other disclosures
regarding the Merger, as it determines are required under applicable securities
laws or regulatory rules; provided, that if such press releases or disclosures
are made before the Closing, CCT shall use reasonable efforts to allow UniCAD to
review and comment on such releases or communications prior to their public
38
dissemination. CCT and UniCAD will take all reasonable precautions to prevent
any trading in the securities of CCT by officers, directors, employees and
agents of CCT or UniCAD as the case may be, (a) having knowledge of any material
information regarding CCT provided hereunder until the information question has
been publicly disclosed; or (b) to the extent that such trading would adversely
affect the treatment of the Merger as a "pooling of interests" for accounting
purposes.
12.16 Confidentiality. UniCAD and CCT each recognize that they have
---------------
received and will receive Confidential Information concerning the other during
the course of the Merger negotiations and preparations. Accordingly, CCT and
UniCAD each agrees (a) to use its respective best efforts to prevent the
unauthorized disclosure of any Confidential Information concerning the other
that was or is disclosed during the course of such negotiations and
preparations, and (b) to not make use of or permit to be used any such
Confidential Information other than for the purpose of effectuating the Merger
and related transactions. If this Agreement is terminated, all copies of
documents containing Confidential Information shall be returned by the receiving
party to the disclosing party.
12.17 Entire Agreement. This Agreement and the Exhibits hereto and the
----------------
Disclosure Letter and its Schedules, when taken together, constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
12.18 Listing. CCT shall, as promptly as reasonably practicable after
-------
the Closing, apply to list the shares of CCT Common Stock to be issued and
exchanged for shares of UniCAD in the Merger pursuant to this Agreement for
listing on the Nasdaq National Market, and shall use all reasonable efforts to
cause such shares to become listed thereon.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
39
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and Plan
of Reorganization as of the date first above written.
XXXXXX & CHYAN TECHNOLOGY, INC. UNICAD, INC.
By:_______________________________ By:_________________________________
Xxxxxx X. Xxxxx Xxxxx XxXxxxxx
Chief Financial Officer President & Chief Executive Officer
LIST OF EXHIBITS:
Exhibit A: Form of Agreement of Merger
Exhibit B: Form of CCT Affiliates Agreement
Exhibit C: Form of UniCAD Affiliates Agreement
Exhibit D: Form of Employment Agreement
Exhibit E: Form of Escrow Agreement
Exhibit F: Form of Opinion of Counsel to CCT
Exhibit G: Form of Opinion of Counsel to UniCAD
Exhibit H: Form of Viewlogic Waiver and Amendment
Exhibit I: Form of CBDS License Agreement
Exhibit J: Form of Termination Agreement
Exhibit 2.7A: Form of Officers' Tax Certificate for CCT and Newco
Exhibit 2.7B: Form of Officers' Tax Certificate for UniCAD
40
Exhibit A
AGREEMENT OF MERGER
This Agreement of Merger (this "Agreement") is entered into as of August
---------
28, 1996 by and among Xxxxxx & Chyan Technology, Inc., a Delaware corporation
("CCT"), CCT Acquisition Corp., a Massachusetts corporation that is a wholly-
-----
owned subsidiary of CCT ("Newco"), and UniCAD, Inc., a Massachusetts corporation
-----
("UniCAD").
------
RECITALS
A. UniCAD was incorporated in the Commonwealth of Massachusetts on June
23, 1993.
B. Newco was incorporated in the Commonwealth of Massachusetts on July
23, 1996 and, on the date hereof, has 100 shares of common stock, $0.01 par
value per share ("Newco Common Stock"), issued and outstanding, all of which are
------------------
owned by CCT.
C. CCT and UniCAD have entered into an Agreement and Plan of
Reorganization dated as of July 22, 1996 (the "Plan of Reorganization")
----------------------
providing for certain representations, warranties, covenants and agreements in
connection with the transactions contemplated hereby.
D. The Boards of Directors of UniCAD, CCT and Newco deem it advisable and
in their mutual best interests and in the best interests of the stockholders of
UniCAD and CCT and the sole stockholder of Newco that UniCAD be acquired by CCT
through the merger (the "Merger") of Newco with and into UniCAD to be effected
------
by this Agreement.
E. The Boards of Directors of CCT, Newco and UniCAD and the stockholders
of UniCAD and the sole stockholder of Newco have approved the Merger. The
stockholders of CCT are not required to approve the Merger.
F. All capitalized terms not defined herein shall have the meanings
ascribed to them in the Plan of Reorganization.
AGREEMENTS
----------
The parties hereto hereby agree as follows:
ARTICLE I - MERGER
1.1 The Merger. Upon and subject to the terms and conditions of this
----------
Agreement and the Plan of Reorganization, Newco shall merge with and into UniCAD
(with such merger referred to herein as the "Merger") at the Effective Time (as
------
defined below). From and after the Effective Time, the separate corporate
existence of Newco shall cease and UniCAD shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"). As used herein, the
---------------------
"Effective Time" shall mean the time at which UniCAD and Newco file the Articles
---------------
of Merger prepared and executed in accordance with Section 78 of the
Massachusetts Business Corporation Law (the "Massachusetts Law") with the
-----------------
Secretary of the Commonwealth of the
Commonwealth of Massachusetts. The Merger shall have the effects set forth in
Section 80 of the Massachusetts Business Corporation Law.
1.2 The Closing. The closing of the transactions contemplated by the Plan
----------
of Reorganization (the "Closing") shall take place in accordance with the terms
-------
of the Plan of Reorganization.
1.3 Actions at the Closing. At the Closing, the parties shall take such
----------------------
actions as are described in the Plan of Reorganization.
1.4 Additional Action. The Surviving Corporation may, at any time after
-----------------
the Effective Time, take any action, including executing and delivering any
document, in the name and on behalf of either UniCAD or Newco, in order to
consummate the Merger.
ARTICLE II - TERMS OF TRANSACTION
2.1 Conversion of Shares. Upon the effectiveness of the Merger, each then
--------------------
outstanding share of UniCAD Common Stock, other than Dissenting Shares, will be
converted solely into the right to receive the Applicable Fraction of a fully
paid and nonassessable share of CCT Common Stock in accordance with the terms of
the Plan of Reorganization. The "Applicable Fraction" is equal to the quotient
of the Total Share Number divided by the sum of (a) the total number of issued
and outstanding shares of UniCAD Common Stock immediately prior to the Effective
Time and (b) the total number of shares of UniCAD Common Stock issuable upon
exercise of all UniCAD Options outstanding and vested immediately prior to the
Effective Time. The "Total Share Number" shall be 520,000, as long as the Per
Share Price of CCT Common Stock is no lower than $11.20 and no higher than
$16.80. If the Per Share Price is lower than $11.20, then the Total Share
Number shall be the number determined as follows: (11.20 x 520,000) divided by
the Per Share Price. If the Per Share Price is greater than $16.80, then the
Total Share Number shall be the number determined as follows: (16.80 x 520,000)
divided by the Per Share Price.
2.2 UniCAD Stock Options. Each UniCAD Option that is outstanding
--------------------
immediately prior to the Effective Time will, by virtue of the Merger, be
assumed by CCT and converted into an option to purchase the number of shares of
CCT Common Stock equal to the number of shares of UniCAD Common Stock subject to
such UniCAD Option at the Effective Time multiplied by the Applicable Fraction,
at an exercise price per share of CCT Common Stock equal to the exercise price
per share of UniCAD Common Stock that was in effect for such UniCAD Option
immediately prior to the Effective Time divided by the Applicable Fraction,
subject to rounding down to eliminate fractional options and subject to rounding
up of the per share exercise price to the nearest whole cent, as provided in the
Plan of Reorganization.
2.3 Adjustments for Capital Changes. If prior the Effective Time of the
-------------------------------
Merger, CCT recapitalizes its outstanding stock (such as through a stock split
or reverse stock split, a common stock dividend, etc.) then the number of shares
of CCT Common Stock to be issued in the Merger (and upon the exercise of CCT
Options issued in the Merger) shall be proportionally and appropriately adjusted
to reflect such change.
-2-
2.4 Dissenting Shares. Holders of shares of UniCAD Common Stock
-----------------
("UniCAD Stockholders") who have complied with all requirements for perfecting
---------------------
stockholders' rights of appraisal, as set forth in the applicable provisions of
the Massachusetts Law, shall be entitled to their rights under the Massachusetts
Law with respect to such shares (the "Dissenting Shares").
-----------------
2.5 Escrow. At Closing (and thereafter, in the case of Escrow Shares
------
resulting from the exercise of CCT Options), CCT shall deliver to the Escrow
Agent certificates representing the Escrow Shares. The Escrow Shares will be
represented by certificates issued in the name of the Escrow Agent and will be
held by the Escrow Agent from the Closing until the expiration of the Escrow
Period as collateral for the indemnification obligations of the UniCAD
Stockholders pursuant to the Plan of Reorganization and the Escrow Agreement.
2.6 Effects of the Merger. At the Effective Time: (a) the separate
---------------------
existence of Newco will cease and Newco will be merged with and into UniCAD, and
UniCAD will be the Surviving Corporation, pursuant to the terms of this
Agreement of Merger, (b) the Articles of Organization of Newco will become the
Articles of Organization of the Surviving Corporation, as provided in the
Articles of Merger, (c) each share of Newco Common Stock outstanding immediately
prior to the Effective Time will be converted into one share of Common Stock of
the Surviving Corporation, (d) the Board of Directors and officers of the
Surviving Corporation will be as specified by CCT in the Articles of Merger, (e)
each share of UniCAD Common Stock outstanding immediately prior to the Effective
Time will be converted as provided in Section 2.1; and (f) the Merger will, from
and after the Effective Time, have all of the effects provided by applicable
law.
ARTICLE III - ARTICLES OF INCORPORATION AND BYLAWS
3.1 From and after the Effective Date and until thereafter amended as
provided by law, the Articles of Organization in the form of Schedule 1 hereto
----------
and By-Laws in the form of Schedule 2 hereto shall be the Articles of
----------
Organization and By-Laws of the Surviving Corporation.
ARTICLE IV - DIRECTORS AND OFFICERS, PURPOSES, AND CAPITAL STOCK OF SURVIVING
CORPORATION
4.1 Directors and Officers. The Board of Directors and officers of the
----------------------
Surviving Corporation will be as specified by CCT in the Articles of Merger
after the Effective Time.
4.2 Corporate Purposes. The purposes of the Surviving Corporation shall
------------------
be the same purposes as set forth in Article II of the Articles of Organization
of Newco as in effect immediately prior to the Effective Date.
4.3 Capital Stock. The authorized capital stock of the Surviving
-------------
Corporation shall consist of 1,000 shares of Common Stock, par value $0.01 per
share, of which 100 shares will be issued and outstanding.
-3-
ARTICLE V - STOCK CERTIFICATES
5.1 As of the Effective Time, all shares of UniCAD Common Stock that are
outstanding immediately prior thereto will, by virtue of the Merger and without
further action, cease to exist and will be converted into shares of CCT Common
Stock pursuant to Article II.
5.2. At or as soon as practicable after the Effective Time, each holder of
shares of UniCAD Common Stock that are not Dissenting Shares or persons
exercising option agreements to purchase UniCAD Common Stock (the "Option
------
Agreements") will surrender the certificate(s) for such shares (the "UniCAD
---------- ------
Certificates") or Option Agreements, as the case may be, duly endorsed as
------------
requested by CCT, for cancellation.
5.3 No dividends or distributions payable to holders of record of UniCAD
Common Stock after the Effective Time, or cash payable in lieu of fractional
shares, will be paid to the holder of any UniCAD Certificate(s).
ARTICLE VI - OPTIONS
6.1 Assumption of Options. Promptly after the Effective Time, CCT will
---------------------
notify in writing each holder of an Option of the assumption of the Option by
CCT, and the number of shares of CCT Common Stock that are then subject to such
option and the exercise price of such option, as determined pursuant to Article
II.
ARTICLE VII - MISCELLANEOUS
7.1 In the event of the termination of this Agreement, this Agreement
shall forthwith become void and there shall be no liability on the part of
UniCAD, CCT or Newco or their respective officers or directors, except as
otherwise provided in the Plan of Reorganization.
7.2 This Agreement may be executed in any number of counterparts, each of
which will be an original as regards any party whose signature appears thereon
and all of which together will constitute one and the same instrument. This
Agreement will become binding when one or more counterparts hereof, individually
or taken together, will bear the signatures of all parties reflected hereon as
signatories.
7.3 Any term or provision of this Agreement may be amended, and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound thereby. The waiver by a party of any breach
hereof or default in the performance hereof will not be deemed to constitute a
waiver of any other default or any succeeding breach or default. The Agreement
may be amended by the parties hereto at any time before or after approval of the
UniCAD Stockholders, but, after such approval, no amendment will be made which
by applicable law requires the further approval of the UniCAD Stockholders
without obtaining such further approval.
7.4 This Agreement and the Plan of Reorganization are intended to be
construed together to effectuate their purpose. To the extent that any payment
to be made or action to be
-4-
taken is described in both this Agreement and the Plan of Reorganization, the
parties acknowledge and agree that such payment shall be made and such action
shall be taken only once to discharge each party's obligations under both
agreements.
7.5 The internal laws of the State of California (irrespective of its
choice of law principles) will govern the validity of this Agreement, the
construction of its terms, and the interpretation and enforcement of the rights
and duties of the parties hereto. Any litigation or other dispute resolution
proceeding among the parties relating to this Agreement will take place in San
Mateo, Santa Xxxxx or San Francisco County, California. The parties consent to
the personal jurisdiction of and the venue in the state and federal courts
within such counties.
[Remainder of this page intentionally left blank]
-5-
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
XXXXXX & CHYAN TECHNOLOGY, INC.
---------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer
CCT ACQUISITION CORP.
----------------------------------
Xxxxxx X. Xxxxx
President & Treasurer
UniCAD, INC.
----------------------------------
Xxxxx XxXxxxxx
President & Chief Executive Officer
----------------------------------
Xxxxx Xxx
Treasurer
[Signature page to Agreement of Merger]
-6-
Exhibit B
XXXXXX & CHYAN TECHNOLOGY
AFFILIATE AGREEMENT
This Xxxxxx & Chyan Technology Affiliate Agreement (this "Affiliate
Agreement") is made and entered into as of July ___, 1996 (the "Effective Date")
by and among Xxxxxx & Chyan Technology, Inc., a Delaware corporation ("CCT"),
UniCAD, Inc., a Massachusetts corporation ("UniCAD") and __________________
("Stockholder") who is an affiliate of CCT.
R E C I T A L S
- - - - - - - -
A. This Affiliate Agreement is entered into pursuant to that certain
Agreement and Plan of Reorganization dated as of July ___, 1996 (as such may be
amended, the "Plan of Reorganization") entered into by and between CCT and
UniCAD. The Plan of Reorganization provides for the statutory merger of a
wholly owned subsidiary of CCT ("Sub") with and into UniCAD (the "Merger"), all
pursuant to the terms and conditions of the Plan of Reorganization and the
Agreement of Merger to be entered into between Sub and UniCAD in the form
attached to the Plan of Reorganization (the "Agreement of Merger"). The Plan of
Reorganization and the Agreement of Merger are collectively referred to herein
as the "Merger Agreements." Capitalized terms used herein and not defined
herein shall have the meanings that such terms have in the Plan of
Reorganization.
B. The Merger Agreements provide that, in the Merger, the shares of UniCAD
Common Stock that are issued and outstanding at the Effective Time of the Merger
will be converted into shares of CCT's Common Stock, all as more particularly
set forth in the Plan of Reorganization.
C. Stockholder understands that because the Merger is intended by the
parties to qualify for "pooling-of-interests" accounting treatment and
Stockholder is deemed an "affiliate" of CCT within the meaning of the Securities
Act of 1933, as amended (the "1933 Act"), the shares of CCT Common Stock which
Stockholder owns and any shares of CCT Common Stock which Stockholder may
hereafter acquire may be disposed of only in conformity with the limitations
described herein. Stockholder has been informed that the treatment of the
Merger as a "pooling-of-interests" for financial accounting purposes, and as a
"reorganization" for federal income tax purposes, is dependent upon the accuracy
of certain of the representations and warranties and the compliance with certain
of the agreements set forth herein.
A G R E E M E N T
- - - - - - - - -
1. Tax Treatment. Stockholder understands and agrees that it is intended
-------------
that the Merger will be treated as a tax-free reorganization for federal income
tax purposes. Stockholder will rely on Stockholder's own tax advisers as to the
tax attributes of the Merger to Stockholder and understands that neither CCT nor
CCT's counsel, UniCAD or UniCAD's counsel has guaranteed nor will guarantee to
Stockholder that the Merger will be a tax-free reorganization. Stockholder
understands that counsel to CCT (Fenwick & West LLP) and counsel to UniCAD
(Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP) have not acted as counsel for Stockholder with
respect to any matter related to the Merger, and that Stockholder has not relied
on CCT or its counsel, or UniCAD or its counsel, with respect to any legal
matter related to the Merger or its tax
consequences, including, without limitation, any U.S. federal income tax
consequences.
2. Reliance Upon Representations, Warranties and Covenants. Stockholder
-------------------------------------------------------
understands that the representations, warranties and covenants of Stockholder
set forth herein will be relied upon by UniCAD and CCT and their respective
counsel and accounting firms and by UniCAD's stockholders.
3. Representations, Warranties and Covenants of Stockholder. Stockholder
--------------------------------------------------------
represents, warrants and covenants as follows:
(a) Authority; Affiliate Status. Stockholder has full power and
---------------------------
authority to enter into, execute, deliver and perform Stockholder's obligations
under this Affiliate Agreement, to make the representations, warranties and
covenants herein contained and to perform Stockholder's obligations hereunder.
Stockholder further understands and agrees that Stockholder is deemed to be an
"affiliate" of CCT within the meaning of the 1933 Act.
(b) CCT Securities Owned. Attachment 1 hereto sets forth all shares
--------------------
of CCT capital stock and any other securities of CCT owned by Stockholder,
including all securities of CCT as to which Stockholder has sole or shared
voting or investment power, and all rights, options and warrants to acquire
shares of capital stock or other securities of CCT granted to or held by
Stockholder (such shares of CCT capital stock, other securities of CCT and
rights, options and warrants to acquire shares of CCT capital stock and other
securities of CCT are hereinafter collectively referred to as "CCT Securities").
(c) New CCT Securities. As used herein, the term "New CCT Securities"
------------------
means, collectively, any and all shares of CCT capital stock, other securities
of CCT and rights, options and warrants to acquire shares of CCT capital stock
and other securities of CCT that Stockholder may purchase or otherwise acquire
any interest in (whether of record or beneficially), on and after the Effective
Date of this Affiliate Agreement and prior to the Expiration Date (as defined
below). All New CCT Securities will be subject to the terms of this Affiliate
Agreement to the same extent and in the same manner as if they were CCT
Securities. As used herein, the term "Expiration Date" means the earliest to
occur of (i) the closing, consummation and effectiveness of the Merger, or (ii)
such time as the Plan of Reorganization may be terminated in accordance with its
terms.
(d) Transfer Restrictions on CCT and New CCT Securities. Stockholder
---------------------------------------------------
agrees with CCT not to sell, transfer, encumber or dispose of, or offer to sell,
transfer, encumber or dispose of (i) any CCT Securities or (ii) any New CCT
Securities until the Expiration Date.
(e) Waivers. Stockholder hereby waives, effective as of the Effective
-------
Time, any liquidation, redemption, anti-dilution, registration rights,
information rights, preemptive rights, priority rights, rights of first refusal,
co-sale or other similar rights relating to the CCT Common Stock to be issued
pursuant to the Merger Agreements under the terms of the Certificate of
Incorporation or Bylaws of CCT or any agreement to which Stockholder is a party
in effect immediately prior to the Effective Time.
(f) Further Assurances. Stockholder agrees to execute and deliver any
------------------
additional documents reasonably necessary or desirable, in the opinion of CCT,
to carry out the
-2-
purposes and intent of this Affiliate Agreement.
(g) Pooling Lock-Up. Notwithstanding any other provision of this
---------------
Affiliate Agreement to the contrary, Stockholder will not sell, transfer,
exchange, pledge or otherwise dispose of, or in any other way reduce
Stockholder's risk of ownership or investment in, or make any offer or agreement
relating to any of the foregoing with respect to any CCT Securities or New CCT
Securities or any rights, options or warrants to purchase CCT Securities or New
CCT Securities or other securities of CCT during the time period (the "Lock-Up
Period") beginning thirty (30) days immediately preceding the Effective Time and
ending at such time after the Effective Time as CCT has publicly released the
combined financial results of CCT and UniCAD for a period of at least thirty
(30) days of combined operations of CCT and UniCAD after the Closing Date. CCT
agrees to publish such financial results expeditiously in a manner consistent
with its prior practices.
4. Stop Transfer Instructions. Stockholder also understands and agrees
--------------------------
that stop transfer instructions may be given to CCT's transfer agent with
respect to certificates evidencing the CCT Securities to enforce Stockholder's
compliance with Stockholder's representations in Section 3(f).
5. Notices. Any notice or other communication required or permitted to be
-------
given under this Affiliate Agreement will be in writing, will be delivered
personally, by telecopier (with a hard copy also mailed) or by registered or
certified mail, postage prepaid and will be deemed given upon delivery, if
delivered personally, one business day after transmission by telecopier with
confirmation of receipt, or three (3) days after deposit in the mails, if
mailed, to the following addresses:
(i) If to CCT:
Xxxxxx & Chyan Technology, Inc.
0000 X. Xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Chief Financial Officer
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
(ii) If to UniCAD:
UniCAD, Inc.
0000 Xxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxx, XX X0X 0X0
Attention: President and Chief Executive Officer
(iii) If to Stockholder:
To the address for notice for such Stockholder
set forth on the last page hereof.
-3-
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 5.
6. Termination. This Affiliate Agreement shall be terminated and shall be
-----------
of no further force and effect upon the termination of the Plan of
Reorganization pursuant to its terms.
7. Counterparts. This Affiliate Agreement may be executed in any number
------------
of counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Affiliate Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
both parties reflected hereon as signatories.
8. Assignment, Binding Upon Successors and Assigns. Neither party hereto
-----------------------------------------------
may assign any of its rights or obligations hereunder without the prior written
consent of the other party hereto. This Affiliate Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
9. Waiver. The waiver by a party of any breach hereof or default in the
------
performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default. This Affiliate Agreement may be
amended by the parties hereto at any time before or after approval of the Merger
by the UniCAD stockholders, but, after such approval, no amendment will be made
which by applicable law requires the further approval of the UniCAD stockholders
without obtaining such further approval.
10. Governing Law. The internal laws of the State of California
-------------
(irrespective of its choice of law principles) will govern the validity of this
Affiliate Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto. Any litigation or
other dispute resolution proceeding among the parties relating to this Affiliate
Agreement will take place in San Mateo, Santa Xxxxx or San Francisco County,
California, The parties consent to the personal jurisdiction of and the venue
in the state and federal courts within such counties.
11. Construction of Agreement. This Affiliate Agreement has been
-------------------------
negotiated by the respective parties hereto and their attorneys and the language
hereof will not be construed for or against either party. A reference to a
Section will mean a Section in this Affiliate Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Affiliate
Agreement which will be considered as a whole.
12. Attorneys' Fees. Should suit be brought to enforce or interpret any
---------------
part of this Affiliate Agreement, the prevailing party will be entitled to
recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including without limitation, costs,
expenses and fees on any appeal). The prevailing party will be entitled to
recover its costs of suit, regardless of whether such suit proceeds to final
judgment.
-4-
IN WITNESS WHEREOF, the parties hereto have executed this Affiliate Agreement as
of the date first set forth above.
XXXXXX & CHYAN TECHNOLOGY, INC. UNICAD, INC.
By: By:
--------------------------------- ----------------------------------
Name: Name:
------------------------------- --------------------------------
Title: Title:
------------------------------ -------------------------------
STOCKHOLDER:
------------------------------------
[SIGNATURE PAGE TO XXXXXX & CHYAN TECHNOLOGY
AFFILATE AGREEMENT]
-5-
Attachment 1
------------
Affiliate's Address for Notice:
------------------------------
------------------------------
------------------------------
Number of CCT Shares
beneficially owned by
the undersigned:
------------------------------
Number of CCT Options
beneficially owned by
the undersigned:
------------------------------
Exhibit C
UNICAD AFFILIATE AGREEMENT
This UniCAD Affiliate Agreement (this "Affiliate Agreement") is made and
entered into as of July ___, 1996 (the "Effective Date") among Xxxxxx & Chyan
Technology, Inc., a Delaware corporation ("CCT"), UniCAD, Inc., a Massachusetts
corporation ("UniCAD") and ______________________ ("Stockholder") who is an
affiliate of UniCAD.
R E C I T A L S
- - - - - - - -
A. This Affiliate Agreement is entered into pursuant to that certain
Agreement and Plan of Reorganization dated as of July ___, 1996, (as such may be
amended, the "Plan of Reorganization") entered into by and between CCT and
UniCAD. The Plan of Reorganization provides for the statutory merger of a
wholly owned subsidiary of CCT ("Sub") with and into UniCAD (the "Merger"), all
pursuant to the terms and conditions of the Plan of Reorganization and the
Agreement of Merger to be entered into between Sub and UniCAD in the form
attached to the Plan of Reorganization (the "Agreement of Merger"). The Plan of
Reorganization and the Agreement of Merger are collectively referred to herein
as the "Merger Agreements." Capitalized terms used herein and not defined
herein shall have the meanings that such terms have in the Plan of
Reorganization.
B. The Merger Agreements provide that, in the Merger, the shares of UniCAD
Common Stock that are issued and outstanding at the Effective Time of the Merger
will be converted into shares of CCT's Common Stock, all as more particularly
set forth in the Plan of Reorganization.
C. Stockholder understands that because the Merger is intended by the
parties to qualify for "pooling-of-interests" accounting treatment and
Stockholder is deemed an "affiliate" of UniCAD within the meaning of the
Securities Act of 1933, as amended (the "1933 Act"), the shares of UniCAD Common
Stock which Stockholder owns, any shares of UniCAD Common Stock which
Stockholder may hereafter acquire, and any shares of CCT Common Stock acquired
by the Stockholder in the Merger may be disposed of only in conformity with the
limitations described herein. Stockholder has been informed that the treatment
of the Merger as a "pooling-of-interests" for financial accounting purposes, and
as a "reorganization" for federal income tax purposes, is dependent upon the
accuracy of certain of the representations and warranties and the compliance
with certain of the agreements set forth herein.
A G R E E M E N T
- - - - - - - - -
1. Tax Treatment. Stockholder understands and agrees that it is intended
-------------
that the Merger will be treated as a tax-free reorganization for federal income
tax purposes. Stockholder will rely on Stockholder's own tax advisers as to the
tax attributes of the Merger to Stockholder and understands that neither CCT,
nor CCT's counsel, UniCAD or UniCAD's counsel has guaranteed nor will guarantee
to Stockholder that the Merger will be a tax-free reorganization. Stockholder
understands that counsel to CCT (Fenwick & West LLP) and counsel to UniCAD
(Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP) have not acted as counsel for Stockholder with
respect to any matter related to the Merger, and that Stockholder has not relied
on CCT or its counsel, or
UniCAD or its counsel, with respect to any legal matter related to the Merger or
its tax consequences, including, without limitation, any U.S. federal income tax
consequences.
2. Reliance Upon Representations, Warranties and Covenants. Stockholder
-------------------------------------------------------
has been informed that a reorganization for federal income tax purposes requires
that a sufficient number of former stockholders of UniCAD maintain a meaningful
continuing equity ownership interest in CCT after the Merger. Stockholder
understands that the representations, warranties and covenants of Stockholder
set forth herein will be relied upon by UniCAD and CCT and their respective
counsel and accounting firms and by UniCAD's stockholders.
3. Representations, Warranties and Covenants of Stockholder. Stockholder
--------------------------------------------------------
represents, warrants and covenants as follows:
(a) Authority; Affiliate Status. Stockholder has full power and
---------------------------
authority to enter into, execute, deliver and perform Stockholder's obligations
under this Affiliate Agreement, to make the representations, warranties and
covenants herein contained and to perform Stockholder's obligations hereunder.
Stockholder further understands and agrees that Stockholder is deemed to be an
"affiliate" of UniCAD within the meaning of the 1933 Act and, in particular,
Rule 145 promulgated under the 1933 Act ("Rule 145").
(b) UniCAD Securities Owned. Attachment 1 hereto sets forth all
----------------------- ------------
shares of UniCAD capital stock and any other securities of UniCAD owned by
Stockholder, including all securities of UniCAD as to which Stockholder has sole
or shared voting or investment power, and all rights, options and warrants to
acquire shares of capital stock or other securities of UniCAD granted to or held
by Stockholder (such shares of UniCAD capital stock, other securities of UniCAD
and rights, options and warrants to acquire shares of UniCAD capital stock and
other securities of UniCAD are hereinafter collectively referred to as "UniCAD
Securities"). Except as otherwise disclosed in the UniCAD Disclosure Letter, at
the date hereof, all the UniCAD Securities owned by Stockholder are, and at all
times until and through the Expiration Date (as hereinafter defined) all the
UniCAD Securities owned by Stockholder will be, free and clear of any rights of
first refusal, co-sale rights, security interests, liens, pledges, claims,
options, charges or other encumbrances.
(c) New UniCAD Securities. As used herein, the term "New UniCAD
---------------------
Securities" means, collectively, any and all shares of UniCAD capital stock,
other securities of UniCAD and rights, options and warrants to acquire shares of
UniCAD capital stock and other securities of UniCAD that Stockholder may
purchase or otherwise acquire any interest in (whether of record or
beneficially), on and after the Effective Date of this Affiliate Agreement and
prior to the Expiration Date (as defined below). All New UniCAD Securities will
be subject to the terms of this Affiliate Agreement to the same extent and in
the same manner as if they were UniCAD Securities. Except as otherwise
disclosed in the UniCAD Disclosure Letter, at all times until and through the
Expiration Date, all the New UniCAD Securities will be free and clear of any
rights of first refusal, co-sale rights, security interests, liens, pledges,
claims, options, charges or other encumbrances. As used herein, the term
"Expiration Date" means the earliest to occur of (i) the closing, consummation
and effectiveness of the Merger, or (ii) such time as the Plan of Reorganization
may be terminated in accordance with its terms.
-2-
(d) Transfer Restrictions on UniCAD and New UniCAD Securities.
---------------------------------------------------------
Stockholder agrees with CCT not to sell, transfer, encumber or dispose of, or
offer to sell, transfer, encumber or dispose of (i) any UniCAD Securities or
(ii) any New UniCAD Securities until the Expiration Date.
(e) Waivers. Stockholder hereby waives, effective as of the Effective
-------
Time, any liquidation, redemption, anti-dilution, registration rights,
information rights, preemptive rights, priority rights, rights or first refusal,
co-sale or other similar rights under the terms of the Certificate of
Incorporation or Bylaws of UniCAD or any agreement with UniCAD or its security
holders in effect immediately prior to the Effective Time.
(f) Further Assurances. Stockholder agrees to execute and deliver any
------------------
additional documents reasonably necessary or desirable, in the opinion of UniCAD
or CCT, to carry out the purposes and intent of this Affiliate Agreement.
(g) Transfer Restrictions on Merger Securities. As used herein, the
------------------------------------------
term "Merger Securities" means, collectively, all shares of CCT Common Stock
that are or may be issued by CCT in connection with the Merger or the
transactions contemplated by the Merger Agreements, or to any former holder of
UniCAD options, warrants or rights to acquire shares of UniCAD Common Stock, and
any securities that may be paid as a dividend or otherwise distributed thereon
or with respect thereto or issued or delivered in exchange or substitution
therefor or upon conversion thereof. Stockholder agrees not to sell, transfer,
exchange, pledge, or otherwise dispose of, or make any offer or agreement
relating to, any of the Merger Securities and/or any option, right or other
interest with respect to any Merger Securities that Stockholder may acquire,
unless: (i) such Merger Securities were issued pursuant to the exemption from
the registration requirements of the 1933 Act afforded by Section 3(a)(10) under
the 1933 Act and such transaction is permitted pursuant to Rules 145(c) and
145(d) under the 1933 Act (as described in Section 4 below) or pursuant to Rule
144 under the 1933 Act; or (ii) legal counsel representing Stockholder, which
counsel is reasonably satisfactory to CCT, shall have advised CCT in a written
opinion letter reasonably satisfactory to CCT and CCT's legal counsel, and upon
which CCT and its legal counsel may rely, that no registration under the 1933
Act would be required in connection with the proposed sale, transfer, exchange,
pledge or other disposition of Merger Securities by Stockholder; or (iii) a
registration statement under the 1933 Act covering the Merger Securities
proposed to be sold, transferred, exchanged, pledged or otherwise disposed of,
describing the manner and terms of the proposed sale, transfer, exchange, pledge
or other disposition, and containing a current prospectus, shall have been filed
with the Securities and Exchange Commission ("SEC") and been declared effective
by the SEC under the 1933 Act; or (iv) an authorized representative of the SEC
shall have rendered written advice to Stockholder (sought by Stockholder or
counsel to Stockholder, with a copy thereof and all other related communications
delivered to CCT and its legal counsel) to the effect that the SEC would take no
action, or that the staff of the SEC would not recommend that the SEC take
action, with respect to the proposed disposition of Merger Securities if
consummated. Nothing herein imposes upon CCT any obligation to register any
Merger Securities under the 1933 Act.
(h) Pooling Lock-Up. Notwithstanding any other provision of this
---------------
Affiliate Agreement to the contrary, Stockholder will not sell, transfer,
exchange, pledge or otherwise
-3-
dispose of, or in any other way reduce Stockholder's risk of ownership or
investment in, or make any offer or agreement relating to any of the foregoing
with respect to any UniCAD Securities or New UniCAD Securities or any rights,
options or warrants to purchase UniCAD Securities or New UniCAD Securities, or
any Merger Securities or other securities of CCT during the time period (the
"Lock-Up Period") beginning thirty (30) days immediately preceding the Effective
Time and ending at such time after the Effective Time as CCT has publicly
released the combined financial results of CCT and UniCAD for a period of at
least thirty (30) days of combined operations of CCT and UniCAD after the
Closing Date. CCT agrees to publish such financial results expeditiously in a
manner consistent with its prior practices.
(i) Intent. Stockholder does not now have, and as of the Effective
------
Time of the Merger will not have, any present plan or intention (a "Plan of
Transfer") to engage in a sale, exchange, transfer, distribution, pledge,
disposition or any other transaction which would result in a direct or indirect
disposition (a "Sale") of more than fifty percent (50%) of the shares of CCT
Common Stock (or other Merger Securities) that Stockholder may acquire in
connection with the Merger, or any securities that may be paid as a dividend or
otherwise distributed thereon or with respect thereto or issued or delivered in
exchange or substitution therefor or upon conversion thereof ("Derivative
Securities"). Stockholder is not aware of, nor is Stockholder participating in,
any Plan of Transfer to engage in Sales of shares of CCT Common Stock to be
issued in the Merger (including Derivative Securities) such that the aggregate
fair market value, as of the Effective Time of the Merger (as defined in the
Plan of Reorganization), of the shares subject to such Sales would exceed fifty
percent (50%) of the aggregate fair market value of all shares of outstanding
UniCAD Securities immediately prior to the Merger. For purposes of this
representation, shares of UniCAD Common Stock (or the portion thereof) (i) with
respect to which a UniCAD stockholder receives consideration in the Merger other
than CCT Common Stock (including, without limitation, cash received in lieu of
fractional shares) and/or (ii) with respect to which a Sale occurs during the
period beginning with the commencement of negotiations (whether formal or
informal) between UniCAD and CCT regarding the Merger and ending on the
Effective Time of the Merger (the "Pre-Merger Period"), shall be considered
shares of outstanding UniCAD Common Stock exchanged for CCT Common Stock
received in the Merger and then disposed of pursuant to a Plan of Reorganization
of Transfer.
4. Restrictions on Resales. Stockholder understands that, in addition to
-----------------------
the restrictions imposed under Section 3 of this Affiliate Agreement, the
provisions of Rule 145 will limit Stockholder's public resales of Merger
Securities, in the manner set forth in subsections (a), (b) and (c) below, until
such time as Stockholder has beneficially owned, within the meaning of Rule
144(d) under the 1933 Act, the Merger Securities for a period of at least two
(2) years (or in some cases three (3) years) after the Effective Time of the
Merger, and thereafter if and for so long as Stockholder is an affiliate of CCT:
(a) 145(d)(1). Unless and until the restriction "cut-off" provisions
---------
of Rule 145(d)(2) or Rule 145(d)(3) set forth below become available, public
resales of Merger Securities may be made by Stockholder only in compliance with
the requirements of Rule 145(d)(1). Rule 145(d)(1) permits such resales only:
(i) if CCT has been a public corporation for at least 90 days and meets the
public information requirements of Rule 144(c); (ii) in brokers' transactions or
in transactions with a market maker; and (iii) where the aggregate number of
Merger Securities sold
-4-
at any time together with all sales of restricted CCT Common Stock sold by or
for Stockholder's account during the preceding three-month period does not
exceed the greater of: (A) one percent (1%) of the shares of CCT Common Stock
outstanding as shown by the most recent report or statement published by CCT; or
(B) the average weekly volume of trading in CCT Common Stock on all national
securities exchanges, or reported through the automated quotation system of a
registered securities association, during the four calendar weeks preceding the
date of receipt of the order to execute the sale.
(b) 145(d)(2). Stockholder may make unrestricted resales of Merger
---------
Securities pursuant to Rule 145(d)(2) if: (i) Stockholder has beneficially
owned (within the meaning of Rule 144(d) under the 0000 Xxx) the Merger
Securities for at least two (2) years after the Effective Time of the Merger;
(ii) Stockholder is not an affiliate of CCT; and (iii) CCT has been a public
corporation for at least 90 days and meets the public information requirements
of Rule 144(c).
(c) 145(d)(3). Stockholder may make unrestricted resales of Merger
---------
Securities pursuant to Rule 145(d)(3) if Stockholder has beneficially owned
(within the meaning of Rule 144(d) under the 0000 Xxx) the Merger Securities for
at least three (3) years after the Effective Time of the Merger and is not, and
has not been for at least three (3) months, an affiliate of CCT.
CCT acknowledges that the provisions of Section 3(h) of this Affiliate
Agreement will be satisfied as to any sale by the undersigned of the Merger
Securities pursuant to Rule 145(d), by a broker's letter and a letter from
Stockholder with respect to that sale stating either that (i) each of the above-
described requirements of Rule 145(d)(1) has been met or (ii) is inapplicable by
virtue of Rule 145(d)(2) or Rule 145(d)(3) and each of the above-described
requirements of Rule 145(d)(2) or (d)(3) (as applicable) has been met; in each
case as long as CCT has no reasonable basis to believe such sales were not made
in compliance with such provisions of Rule 145(d).
5. Legends. Stockholder also understands and agrees that stop
-------
transfer instructions will be given to CCT's transfer agent with respect to
certificates evidencing the Merger Securities to enforce (i) Stockholder's
compliance with Stockholder's representations in Sections 3(i) and 3(j), (ii)
Stockholders' agreements in Section 4 and (iii) Stockholder's compliance with
applicable securities laws regarding the Merger Securities, and that there will
be placed on the certificates evidencing such Merger Securities such legends as
CCT or its counsel may reasonably require, including without limitation, a
legend providing substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE
WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, ANY
APPLICABLE STATE SECURITIES LAWS, AND THE OTHER CONDITIONS SPECIFIED IN THAT
CERTAIN AFFILIATE AGREEMENT DATED AS OF JULY ___, 1996 AMONG XXXXXX & CHYAN
TECHNOLOGY, INC. ("CCT"), UNICAD, INC. AND THE HOLDER OF SUCH
-5-
SHARES, A COPY OF WHICH MAY BE INSPECTED BY THE HOLDER OF THIS CERTIFICATE AT
THE OFFICES OF CCT. CCT WILL FURNISH, WITHOUT CHARGE, A COPY THEREOF TO THE
HOLDER OF THIS CERTIFICATE, UPON WRITTEN REQUEST THEREFOR."
6. Notices. Any notice or other communication required or permitted to be
-------
given under this Affiliate Agreement will be in writing, will be delivered
personally, by telecopier (with a hard copy also mailed), or by registered or
certified mail, postage prepaid and will be deemed given upon delivery, if
delivered personally, one business day after transmission by telecopier with
confirmation of receipt, or three (3) days after deposit in the mails, if
mailed, to the following addresses:
(i) If to CCT:
Xxxxxx & Chyan Technology, Inc.
0000 X. Xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Chief Financial Officer
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
(ii) If to UniCAD:
UniCAD, Inc.
0000 Xxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxx, XX X0X 0X0
Attention: President and Chief Executive Officer
If to Stockholder: To the address for notice for such Stockholder set forth on
the last page hereof.
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 6.
7. Termination. This Affiliate Agreement shall be terminated and shall be
-----------
of no further force and effect upon the termination of the Plan of
Reorganization pursuant to its terms.
8. Counterparts. This Affiliate Agreement may be executed in any number
------------
of counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Affiliate Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
both parties reflected hereon as signatories.
-6-
9. Assignment, Binding Upon Successors and Assigns. Neither party hereto
-----------------------------------------------
may assign any of its rights or obligations hereunder without the prior written
consent of the other party hereto. This Affiliate Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
10. Waiver. The waiver by a party of any breach hereof or default in the
------
performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default. This Affiliate Agreement may be
amended by the parties hereto at any time before or after approval of the Merger
by the UniCAD stockholders, but, after such approval, no amendment will be made
which by applicable law requires the further approval of the UniCAD stockholders
without obtaining such further approval.
11. Governing Law. The internal laws of the State of California
-------------
(irrespective of its choice of law principles) will govern the validity of this
Affiliate Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto. Any litigation or
other dispute resolution proceeding among the parties relating to this Affiliate
Agreement will take place in San Mateo, Santa Xxxxx or San Francisco County,
California, The parties consent to the personal jurisdiction of and the venue
in the state and federal courts within such counties.
12. Construction of Agreement. This Affiliate Agreement has been
-------------------------
negotiated by the respective parties hereto and their attorneys and the language
hereof will not be construed for or against either party. A reference to a
Section will mean a Section in this Affiliate Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Affiliate
Agreement which will be considered as a whole.
13. Attorneys' Fees. Should suit be brought to enforce or interpret any
---------------
part of this Affiliate Agreement, the prevailing party will be entitled to
recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including without limitation, costs,
expenses and fees on any appeal). The prevailing party will be entitled to
recover its costs of suit, regardless of whether such suit proceeds to final
judgment.
-7-
IN WITNESS WHEREOF, the parties hereto have executed this Affiliate Agreement as
of the date first set forth above.
XXXXXX & CHYAN TECHNOLOGY, INC. UNICAD, INC.
By: By:
----------------------------------- -----------------------------------
Name: Name:
--------------------------------- ---------------------------------
Title: Title:
-------------------------------- --------------------------------
STOCKHOLDER:
--------------------------------------
[SIGNATURE PAGE TO UNICAD AFFILIATE AGREEMENT]
-8-
Attachment 1
------------
Affiliate's Address for Notice:
--------------------------------
--------------------------------
--------------------------------
Number of UniCAD Shares
beneficially owned by
the undersigned:
--------------------------------
Number of UniCAD Options
beneficially owned by
the undersigned:
--------------------------------
Exhibit D
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement (this "Agreement") is entered into as of July
---------
___, 1996 between UniCAD Canada Ltd., a corporation organized under the laws of
Ontario, Canada (the "Company"), and ____________________ ("Employee").
------- --------
BACKGROUND
A. This Agreement is entered into in connection with an Agreement and
Plan of Reorganization (the "Plan of Reorganization") dated as of July ___, 1996
----------------------
between Xxxxxx & Chyan Technology, Inc., a Delaware corporation ("CCT") and
---
UniCAD, Inc., the sole stockholder of the Company ("UniCAD"). Pursuant to the
------
Plan of Reorganization, a new Delaware corporation that is a wholly-owned
subsidiary of CCT ("Sub"), is to merge with and into UniCAD in a statutory
---
merger (the "Merger"), with UniCAD to be the surviving corporation of the Merger
------
and to thus become a wholly-owned subsidiary of CCT. The date on which the
Merger becomes effective will be the "Effective Date" of this Agreement.
--------------
B. Employee is key employee of the Company and has been actively involved
in development, marketing, sale and performance of the Company's services and
products. To preserve and protect the intangible assets of the Company,
including the Company's goodwill, customers and trade secrets of which Employee
has and will have knowledge, and in consideration for the Company's entering
into and performing under the Plan of Reorganization, Employee has agreed to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
agreements of the parties contained herein, the Company and Employee hereby
agree as follows:
1. Position. During the term of Employee's employment pursuant to this
--------
Agreement, Company will employ Employee, and Employee will serve Company as
______________________ and will have such responsibilities and authority as may
from time to time be assigned to Employee by the President of the Company and/or
the executive staff of CCT.
2. Duties. Employee will initially have day-to-day responsibility for
------
_________________________________________, including responsibility for
_____________________________________________. Employee will comply with and be
bound by Company's operating policies, procedures, and practices from time to
time in effect during Employee's employment. Employee will perform his duties
under this Agreement at the offices of the Company, provided, that Employee may
--------
be required to travel in connection with the performance of his duties
hereunder. Employee hereby represents and warrants that he is free to enter
into and fully perform this Agreement and the agreements referred to herein
without breach of any agreement or contract to which he is a party or by which
he is bound.
3. Exclusive Service. Employee will devote his full business time and
-----------------
efforts exclusively to this employment (except as expressly allowed otherwise by
the Company pursuant to the next sentence) and apply all his skill and
experience to the performance of his duties and advancing the Company's
interests in accordance with Employee's experience and skills. In addition,
Employee will not engage in any consulting activity except with the prior
written approval of Company, or at the direction of Company, and Employee will
otherwise do nothing inconsistent with the performance of his duties hereunder.
4. Obligation Not to Compete. Employee hereby agrees that (a) while he is
-------------------------
employed by the Company and (b) during any additional period, not to extend
beyond two (2) years after the Effective Date, during which the Company pays
Employee his salary under Section 6.1 below whether or not other provisions of
this Agreement may have been terminated, (the "Restricted Period"), Employee
-----------------
shall not engage in or provide services to any business that is competitive with
or detrimental to any present or contemplated business of the Company known to
Employee in any geographic area where the Company engages in its business or
maintains sales or service representatives or employees. Employee also agrees
that, during the Restricted Period, he shall not in any manner attempt to induce
or assist others to attempt to induce any customer or client of the Company to
terminate his association with the Company, nor do anything directly or
indirectly to interfere with the relationship between the Company and any such
persons or concerns. Each of the following activities shall, without
limitation, be deemed to constitute engaging in business within the meaning of
this Section 4: to engage in, work with, have an interest or concern in,
advise, lend money to, guarantee the debts or obligations of, or permit one's
name or any party thereof to be used in connection with, an enterprise or
endeavor, either individually, in partnership, or in conjunction with any person
or persons, firms, associations, companies, or corporations, whether as a
principal, agent, shareholder, employee, officer, director, partner, consultant
or in any other manner whatsoever; provided, however, that Employee shall retain
-------- -------
the right to invest in or have an interest in entities traded on any public
market or offered by any national brokerage house, provided that said interest
does not exceed one percent (1%) of the voting control of said entity.
5. Term of Agreement. This Agreement, and Employee's employment pursuant
-----------------
to this Agreement, will commence on the Effective Date, and will continue until
the earlier of two (2) years after the Effective Date or when terminated
pursuant to Section 8 hereof.
6. Compensation and Benefits.
-------------------------
6.1 Base Salary. The Company agrees to pay Employee an initial
-----------
minimum salary of _________________ ($___________) per year. The Company shall
review Employee's salary annually, although this sentence shall not impose any
obligation on the Company to make any change to Employee's salary as a result of
such review. Employee's salary will be payable as earned in accordance with
Company's customary payroll practice.
6.2 Additional Benefits. Employee will be eligible to participate in
-------------------
Company's employee benefit plans of general application (including stock option
plans). Employee will receive such other benefits, including vacation, holidays
and sick leave, as the Company generally provides to its employees holding
similar positions as that of Employee.
-2-
6.3 Cash Bonus. Employee will be eligible to earn a bonus for the
----------
period from the Effective Date through December 31, 1996, and thereafter for
each calendar year during the term of this Agreement (the maximum amount of the
bonus payment for each such period referred to as the "Maximum Bonus"). The
-------------
Maximum Bonus for the initial period from the Effective Date through December
31, 1996 will be $_______; and for subsequent bonus periods the amount of the
Maximum Bonus will be determined by CCT (or, if CCT determines, by the Board of
Directors or Chief Executive Officer of the Company). The Maximum Bonus will be
based on (a) Employee's individual performance ("Employee Performance"), and (b)
--------------------
the Company's success in achieving its operating performance objectives
("Company Performance"). Employee Performance and Company Performance will be
---------------------
weighed at 50% each. Employee Performance will be based on Employee's actual
performance, as determined by CCT or, in its discretion, the Board of Directors,
the President, or the Chief Executive Officer of the Company, measured against
individual performance objectives established by CCT or the Company. Company
Performance will be determined by dividing actual annual gross revenues and pre-
tax operating profit for the relevant bonus period by the target gross revenues
and pre-tax operating profit for the relevant bonus period, respectively, with
each weighted at 50%. As soon after the end of the fiscal year as it is
practicable to determine the elements of the calculation below (and in any event
within 90 days after the end of the fiscal year), Company will pay to Employee a
bonus determined as follows:
Cash Bonus = Maximum Bonus x "p",
"P" = (Employee Performance x 50%) + (Company Performance x 50%)
6.4 Expenses. The Company will reimburse Employee for all reasonable
--------
expenses incurred by Employee in connection with the Company's business,
provided that such expenses are in accordance with the Company's applicable
policies and that Employee delivers to the Company all appropriate documentation
in accordance with the Company applicable policies.
7. Proprietary Rights. Employee hereby agrees to execute an Employee
------------------
Invention Assignment and Confidentiality Agreement with the Company in
substantially the form attached hereto as Exhibit 2.
---------
8. Termination.
-----------
8.1 Events of Termination. Employee's employment with the Company
---------------------
shall terminate upon any one of the following:
(a) the Company's determination made in good faith that it is
terminating Employee for "cause" as defined under Section 8.2 below
("Termination for Cause"); or
-----------------------
(b) the effective date of a written notice sent to Employee
stating that the Company is terminating his employment, without cause,
which notice can be given by the Company at any time after the
Effective Date at the Company's sole discretion, for any reason or for
no reason ("Termination Without Cause"); or
-------------------------
-3-
(c) the effective date of a written notice sent to the Company
from Employee stating that Employee is electing to terminate his
employment with the Company ("Voluntary Termination").
---------------------
8.2 "Cause" Defined. For purposes of this Agreement, "cause" for
---------------
Employee's termination will exist at any time after the happening of one or more
of the following events:
(a) a good faith finding by the Company that the Employee has
committed an act or acts constituting gross incompetence, fraud or
willful misconduct in the performance of the Employee's duties
hereunder;
(b) the Employee's conviction of, or the entry of a pleading of
guilty of nolo contendere by the Employee to any crime involving moral
turpitude or any felony;
(c) material failure or refusal to comply in any material respect
with the written policies, standards or regulations of the Company;
(d) a good faith determination by the Company's Board of
Directors that Employee's performance is unsatisfactory in material
respects, provided that Employee has been notified of Employee's
unsatisfactory performance and, where reasonable, Employee has been
afforded an opportunity to improve Employee's performance; or
(e) Employee's material breach of a term of the Employee
Invention Assignment and Confidentiality Agreement executed by the
Employee, including, without limitation, Employee's theft of the
Company's proprietary information.
9. Effect of Termination.
---------------------
9.1 Termination for Cause or Voluntary Termination. In the event of
----------------------------------------------
any termination of this Agreement pursuant to Sections 8.1(a) or 8.1(c), the
Company shall pay Employee the compensation and benefits otherwise payable to
Employee under Section 6 through the date of termination. Employee's rights
under the Company's benefit plans of general application shall be determined
under the provisions of those plans.
9.2 Termination Without Cause. In the event of any termination of
-------------------------
this Agreement pursuant to Section 8.1(b):
(a) the Company shall pay Employee the compensation and benefits
otherwise payable to Employee under Section 6 through the date of
termination;
-4-
(b) for two (2) years after the Effective Date, the Company
shall continue to pay Employee his base salary under Section 6.1 above
at Employee's then-current salary, less applicable withholding taxes,
payable on the Company's normal payroll dates during that period; and
(c) Employee's rights under the Company's benefit plans of
general application shall be determined under the provisions of those
plans.
10. Employee Solicitation. So long as Employee is an employee of the
---------------------
Company and for one (1) year thereafter, Employee shall not, directly or
indirectly, either for himself or for any other person or entity, directly or
indirectly, solicit, induce or attempt to induce any employee of the Company to
terminate his or her employment with the Company.
11. Miscellaneous.
-------------
11.1 Arbitration. Employee and the Company shall submit to mandatory
-----------
binding arbitration in any controversy or claim arising out of, or relating to,
this Agreement or any breach hereof; provided, however, that each party retains
-------- -------
its right to, and shall not be prohibited, limited or in any other way
restricted from, seeking or obtaining equitable relief from a court having
jurisdiction over the parties in order to enforce the provisions of Sections 4
and 10 of this Agreement. Such arbitration shall be conducted in Ottawa,
Canada, in accordance with the commercial arbitration rules of the American
Arbitration Association in effect at that time, and judgment upon the
determination or award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
11.2 Severability. If any provision of this Agreement shall be found
------------
by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable. Such provision shall, to the extent
allowable by law and the preceding sentence, be modified by such arbitrator or
court so that it becomes enforceable and, as modified, shall be enforced as any
other provision hereof, all the other provisions continuing in full force and
effect.
11.3 Remedies. The Company and Employee acknowledge that the service
--------
to be provided by Employee is of a special, unique, unusual, extraordinary and
intellectual character, which gives it peculiar value the loss of which cannot
be reasonably or adequately compensated in damages in an action at law.
Accordingly, Employee hereby consents and agrees that for any breach or
violation by Employee of the provisions of Sections 4 and 10 of this Agreement,
a restraining order and/or injunction may be issued against Employee, in
addition to any other rights and remedies the Company may have, at law or
equity, including without limitation the recovery of money damages.
11.4 No Waiver. The failure by either party at any time to require
---------
performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter. The waiver by either party of a breach of any provision
hereof shall not be taken or held to be a waiver of any preceding or succeeding
breach of such provision or as a waiver of the provision itself. No waiver of
any kind
-5-
shall be effective or binding, unless it is in writing and is signed by
the party against whom such waiver is sought to be enforced.
11.5 Assignment. This Agreement and all rights hereunder are
----------
personal to Employee and may not be transferred or assigned by Employee at any
time. The Company may assign its rights, together with its obligations
hereunder, to any [parent, subsidiary, affiliate or] successor, or in connection
with any sale, transfer or other disposition of all or substantially all of its
business and assets, provided, however, that any such assignee must assume the
-------- -------
Company's obligations hereunder.
11.6 Withholding. All sums payable to Employee hereunder shall be
-----------
reduced by all federal, state, local and other withholding and similar taxes and
payments required by applicable law.
11.7 Entire Agreement. This Agreement constitutes the entire and
----------------
only agreement between the parties relating to employment of Employee with the
Company, and this Agreement supersedes and cancels any and all previous
contracts, arrangements or understandings with respect thereto.
11.8 Amendment. This Agreement may be amended, modified, superseded,
---------
canceled, renewed or extended only by an agreement in writing executed by both
parties hereto.
11.9 Notices. All notices and other communications required or
-------
permitted under this Agreement shall be in writing and hand delivered, sent by
telecopier, sent by certified first class mail, postage pre-paid, or sent by
nationally recognized express courier service. Such notices and other
communications shall be effective upon receipt if hand delivered or sent by
telecopier, five (5) days after mailing if sent by mail, and one (l) day after
dispatch if sent by express courier, to the following addresses, or such other
addresses as any party shall notify the other parties:
If to the Company: Xxxxxx & Chyan Technology, Inc.
0000 Xxxxx XxXxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
If to Employee:
--------------------------------------------
--------------------------------------------
--------------------------------------------
11.10 Binding Nature. This Agreement shall be binding upon, and inure
--------------
to the benefit of, the successors and personal representatives of the respective
parties hereto.
11.11 Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall in no way affect the meaning or interpretation
of this Agreement. In this Agreement, the singular includes the plural, the
plural included the singular, the masculine gender includes both male and female
referents, and the word "or" is used in the inclusive sense.
-6-
11.12 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original but all of which,
taken together, constitute one and the same agreement.
11.13 Governing Law. This Agreement and the rights and obligations of
-------------
the parties hereto shall be construed in accordance with the laws of the
Province of Ontario, without giving effect to the principles of conflict of
laws.
IN WITNESS WHEREOF, the Company and Employee have executed this Employment
Agreement as of the date first above written.
UNICAD CANADA LTD. EMPLOYEE
------------------------------------- -------------------------------------
Xxxxx XxXxxxxx
President and Chief Executive Officer
-7-
Exhibit E
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is entered into as of August ____,
---------
1996 by and among Xxxxxx & Chyan Technology, Inc., a Delaware corporation
("CCT"), State Street Bank and Trust Company, as Escrow Agent (the "Escrow
Agent"), and Xxxxxxx Xxxxxxx as representative (the "Representative") of the
Holders (as hereinafter defined) of UniCAD Common Stock.
R E C I T A L S
A. UniCAD and CCT have entered into an Agreement and Plan of
Reorganization dated as of July 22, 1996 (the "Plan of Reorganization") pursuant
to which a wholly owned subsidiary of CCT will be merged with and into UniCAD in
a reverse triangular merger, with UniCAD to be the surviving corporation of the
merger. Unless otherwise specified herein, all capitalized terms used herein
shall have the meaning given to such terms in the Plan of Reorganization.
B. Pursuant to the Plan of Reorganization, CCT will issue shares of
CCT Common Stock, $0.01 par value per share ("CCT Common Stock") to the Holders
of UniCAD Common Stock (the "UniCAD Common Stockholders") in exchange for their
shares of UniCAD Common Stock.
C. The Plan of Reorganization provides that ten percent (10%) of the
shares of CCT Common Stock that are to be issued to the UniCAD Common
Stockholders (rounded down to the nearest whole number of shares to be issued to
each holder) and ten percent (10%) of the shares of CCT Common Stock issuable
upon exercise during the Escrow Period of any CCT Options (collectively, the
"Escrow Shares"), will be withheld from the shares of CCT Common Stock issued to
the UniCAD Common Stockholders at the Closing of the Merger and from the shares
of CCT Common Stock issuable upon each exercise during the Escrow Period of a
CCT Option, and will be placed in an escrow account (the "Escrow Account") to
secure the indemnification obligations of the UniCAD Common Stockholders to CCT
and other Indemnified Persons under the Plan of Reorganization on the terms and
conditions set forth herein. Those Escrow Shares required to be deposited in
the Escrow Account upon the Closing of the Merger pursuant to this Agreement and
the Plan of Reorganization or thereafter upon exercise of CCT Options are shown
on Exhibit A attached hereto.
---------
D. The parties hereto desire to establish the terms and conditions
pursuant to which the Escrow Shares will be deposited, held in, and disbursed
from the Escrow Account.
NOW, THEREFORE, the parties agree as follows:
1. Escrow and Indemnification.
--------------------------
(a) Deposit of Escrow Shares. At the Closing (and thereafter, in the
case of Escrow Shares resulting from the exercise of CCT Options), CCT shall
cause its transfer agent to
deliver to the Escrow Agent certificates representing the Escrow Shares. The
Escrow Shares will be represented by certificates issued in the name of the
Escrow Agent and will be held by the Escrow Agent from the Closing until
expiration of the Escrow Period. The Escrow Shares will include Additional
Escrow Shares as that term is defined in Section 3(a) of this Agreement. The
Escrow Agent need not inquire into whether or not the correct number of Escrow
Shares have been delivered to it and may assume that the certificates delivered
to it are all that it is required to receive.
(b) Indemnification. CCT and the other Indemnified Persons are
indemnified pursuant to the terms of Section 11.2 of the Plan of Reorganization
(which terms are incorporated herein by reference) from and against any Damages,
subject to the limitations set forth in Section 11.2.2 of the Plan of
Reorganization and herein. (For the purposes of this Escrow Agreement,
references to CCT will include all other Indemnified Persons, as applicable, and
references to the UniCAD Common Stockholders will also include UniCAD option
holders who have had Escrow Shares deposited into the Escrow Account, as
applicable.) The Escrow Shares will be security for this indemnity obligation,
subject to the limitations, and in the manner provided, in Section 11 of the
Plan of Reorganization and in this Agreement. Xxxxxxx Xxxxxxx shall act as
Representative of the Holders for purposes of this Agreement, and is duly
authorized to be such Representative and may bind the Holders as provided
herein.
(c) Acceptance of Shares by the Escrow Agent. The Escrow Shares will
be held in escrow by the Escrow Agent and will be available to satisfy the
indemnification obligations of the UniCAD Common Stockholders as specified above
and in the Plan of Reorganization. The Escrow Agent agrees to accept delivery
of the Escrow Shares delivered to it and to hold such Escrow Shares in escrow in
the Escrow Account in accordance with the terms and conditions of this Escrow
Agreement and to release the Escrow Shares out of escrow in accordance with the
terms and conditions of this Escrow Agreement.
2. Representative. For purposes of this Escrow Agreement, the UniCAD
--------------
Common Stockholders, without any further action on the part of any such UniCAD
Common Stockholder, shall be deemed to have consented to and approved: (a) the
use of the Escrow Shares as collateral for the indemnification obligations under
Section 11.2 of the Plan of Reorganization and in the manner set forth in this
Agreement; (b) the appointment of Xxxxxxx Xxxxxxx as the representative of the
UniCAD Common Stockholders (the "Representative") and as the attorney-in-fact
and agent for and on behalf of each UniCAD Common Stockholder (other than
holders of Dissenting Shares), and the taking by the Representative of any and
all actions and the making of any decisions required or permitted to be taken by
him or her under this Escrow Agreement, including, without limitation, the
exercise of the power to (i) authorize delivery to CCT of Escrow Shares in
satisfaction of claims by CCT, (ii) agree to, negotiate, enter into settlements
and compromises of, and demand arbitration and comply with orders of courts and
awards of arbitrators with respect to, such claims, (iii) negotiate, execute on
behalf of the UniCAD Common Stockholders, deliver and perform amendments to or
modifications of this Escrow Agreement, (iv) resolve any claim made pursuant to
Section 11.2 of the Plan of Reorganization, and (v) take all actions necessary
in the judgment of the Representative for the accomplishment of the foregoing;
and (c) all of the other terms, conditions and limitations of this Escrow
-2-
Agreement. Accordingly, the Representative has unlimited authority and power to
act on behalf of each UniCAD Common Stockholder with respect to this Escrow
Agreement and the disposition, settlement or other handling of all claims,
rights or obligations arising under this Escrow Agreement, so long as all UniCAD
Common Stockholders are treated in material respects in the same manner. The
UniCAD Common Stockholders will be bound by all actions taken by the
Representative in connection with this Escrow Agreement and CCT and the Escrow
Agent shall be entitled to rely on any action or decision of the Representative
as constituting the actions of the UniCAD Common Stockholders. In performing
such functions, the Representative will not be liable to the UniCAD Common
Stockholders in the absence of gross negligence or willful misconduct. All
actions and notices by the Representative hereunder shall be signed by the
Representative. The Representative may resign from such position, effective
upon a new Representative being appointed to act as the Representative by the
written consent of UniCAD Common Stockholders who beneficially own at least a
majority of the Escrow Shares. The UniCAD Common Stockholders must elect a new
Representative, and such written consent must be given, within thirty days from
the date of the Representative's notice of intended resignation. UniCAD Common
Stockholders who beneficially own at least a majority of the Escrow Shares may
at any time and from time to time appoint by written consent a new
representative to act as the Representative in place of the then-current
Representative. The Representative shall not be entitled to receive any
compensation or reimbursement of expenses for his or her actions taken with
respect to this Escrow Agreement, either from CCT or the Escrow Account, unless
and until there are Escrow Shares to be distributed to the UniCAD Common
Stockholders on the Escrow Release Date (the "Distributed Shares"). Any out-of-
pocket costs and expenses incurred by the Representative in connection with
actions taken pursuant to the terms of this Escrow Agreement will be paid by the
UniCAD Common Stockholders to the Representative in proportion to their
percentage interests in the Escrow Shares set forth on Exhibit A.
3. Rights in Escrow Shares; Release from Escrow.
--------------------------------------------
(a) Dividends, Voting and Rights of Ownership. Any shares of CCT
Common Stock issued as a result of, or issued upon the conversion or exercise of
any security issued as a result of, any stock dividend, reclassification, stock
split, subdivision or combination of shares, recapitalization, merger or other
events made with respect to the Escrow Shares while in escrow under this
Agreement ("Additional Escrow Shares"), will be held in Escrow and distributed
to the UniCAD Common Stockholders or returned to CCT in the same manner and in
the same proportions as the Escrow Shares. For all purposes of this Escrow
Agreement, Additional Escrow Shares issued with respect to Escrow Shares will be
treated the same as (and will be considered to be) Escrow Shares. Any cash
dividends, dividends payable in property other than CCT securities, or other
distributions of any kind (other than Additional Escrow Shares) made in respect
of the Escrow Shares, if received by the Escrow Agent, will be delivered by the
Escrow Agent directly to the UniCAD Common Stockholders in proportion to their
percentage interests set forth on Exhibit A. Each UniCAD Common Stockholder
will have voting rights with respect to the Escrow Shares (and Additional Escrow
Shares) beneficially owned by such UniCAD Common Stockholder deposited in the
Escrow Account so long as such Escrow Shares (and Additional Escrow Shares) are
held in escrow. While the Escrow Shares remain in the Escrow Agent's possession
pursuant to this Escrow Agreement, the UniCAD Common Stockholders will
-3-
retain and will be able to exercise all other incidents of ownership of said
Escrow Shares which are not inconsistent with the terms and conditions hereof,
including the right to cause the tender of such Escrow Shares in a tender offer
for CCT Common Stock.
(b) Distribution of Escrow Shares. Upon written notification to the
Escrow Agent by CCT and the Representative that the Escrow Period (as defined in
the Plan of Reorganization) has expired, on which notifications the Escrow Agent
may rely without inquiry, (the "Escrow Release Date"), the Escrow Agent shall
release from the Escrow Account to the UniCAD Common Stockholders in accordance
with their percentage interests set forth in Exhibit A, the Escrow Shares, less
(A) any shares delivered to CCT in accordance with Section 5 hereof in
satisfaction of claims made by CCT pursuant to Section 1(b) above, (B) any
shares held by the Escrow Agent in accordance with Section 5 hereof with respect
to pending but unresolved claims of CCT pursuant to Section 1(b) above. Any
Escrow Shares held as a result of clause (B) of the preceding sentence shall be
released to the UniCAD Common Stockholders or to CCT for cancellation, as
appropriate, promptly upon resolution of each specific Claim involved, when such
resolution has been notified to the Escrow Agent by the Representative and CCT
in writing or upon the delivery to the Escrow Agent of the appropriate order by
a court of competent jurisdiction or upon delivery to the Escrow Agent of a copy
of the final award of an arbitrator as described in Section 5.
(c) Release of Shares. The Escrow Shares will be held by the Escrow
Agent until required to be released pursuant to Section 3(b) above. Within five
(5) business days after the applicable release condition is met and (if
necessary) the requisite share certificates have been reissued by the transfer
agent, the Escrow Agent will deliver to the UniCAD Common Stockholders the
requisite number of Escrow Shares to be released on such date in the form of
stock certificates issued in the name of each UniCAD Common Stockholder
according to the percentage of Escrow Shares each UniCAD Common Stockholder is
entitled to receive. CCT will take such action as may be necessary to cause
such certificates to be issued in the name of the appropriate UniCAD Common
Stockholder within such period. Certificates representing Escrow Shares so
issued that are subject to SEC Rule 144 or 145 resale restrictions will bear a
legend to that effect and any other legend that counsel to CCT reasonably
determines is necessary or appropriate. Cash will be paid by CCT in lieu of any
fractions of Escrow Shares in an amount equal to the product determined by
multiplying such fraction by the value of an Escrow Share as determined in
accordance with Section 5(d) below.
(d) No Encumbrance. No Escrow Shares or any beneficial interest
therein may be pledged, sold, assigned, transferred, or otherwise encumbered,
including by operation of law, by the UniCAD Common Stockholders or be taken or
reached by any legal or equitable process in satisfaction of any debt or other
liability of the UniCAD Common Stockholders, prior to the delivery to the UniCAD
Common Stockholders of the Escrow Shares by the Escrow Agent upon the release of
such Escrow Shares in accordance with the provisions of Section 3(c) above.
-4-
4. Notice of Claim.
---------------
(a) Promptly after the receipt by CCT of notice or discovery of any
claim, damage or legal action or proceeding giving rise to indemnification
rights under the Plan of Reorganization or this Agreement, CCT will give the
Representative and the Escrow Agent written notice of its claim against the
Escrow Shares for indemnification of such claim, damage, legal action or
proceeding (a "Claim") in accordance with the following provisions. Failure to
provide such notice in a timely manner shall not, however, reduce CCT's
indemnification rights or the indemnification obligations of the UniCAD Common
Stockholders hereunder or under the Plan of Reorganization, unless the failure
to provide such notice materially impairs the indemnifying party's ability to
defend the Claim, and then only to the extent of such impairment.
(b) Each written notice of a Claim by CCT (the "Notice of Claim")
shall contain the following information to the extent it is reasonably available
to CCT:
(i) CCT's current good faith estimate of the amount of the
alleged Damages if reasonably determinable (the "CCT Valuation");
(ii) A brief description of the circumstances giving rise to the
Claim and, if applicable, specific references to the provisions of the Plan of
Reorganization alleged to have been breached; and
(iii) A statement that the Notice of Claim has been sent
simultaneously to both the Escrow Agent and the Representative.
(c) The Escrow Agent will not transfer any of the Escrow Shares held
in the Escrow Account to CCT pursuant to a Notice of Claim until such Notice of
Claim has been resolved in accordance with Section 5 below.
5. Resolution of Notice of Claim and Transfer of Escrow Shares. Any
-----------------------------------------------------------
Notice of Claim received by the Escrow Agent will be resolved as follows:
(a) Uncontested Claims. If the Representative does not, within thirty
(30) calendar days of receipt by the Escrow Agent of a Notice of Claim, either
contest the Notice of Claim in writing to the Escrow Agent and CCT, or authorize
the payment of the amount demanded, then CCT shall give the Escrow Agent written
notice of such fact, on which notice the Escrow Agent may rely without inquiry,
and the Escrow Agent shall immediately transfer to CCT that number of Escrow
Shares having a value (determined pursuant to Section 5(d) hereof) equal to the
amount specified in the Notice of Claim and notify the Representative in writing
of such transfer.
(b) Contested Claim. If the Representative gives a written notice
contesting all, or a portion of, a Notice of Claim to CCT and the Escrow Agent
(a "Contested Claim") and such written notice is deemed, under the provisions of
Section 10 hereof, to have been delivered to CCT and the Escrow Agent within the
30-day period described in Section 5(a) above, then
-5-
such Contested Claim will be promptly settled by binding arbitration as provided
herein. Any portion of the Notice of Claim that is not contested, or the
uncontested amount of any Contested Claim, will be resolved as an uncontested
claim as set forth in Section 5(a) above. The final decision of the arbitrator
shall be furnished to the Representative, CCT and the Escrow Agent in writing
and will constitute a conclusive determination of the issue in question, binding
upon the UniCAD Common Stockholders, CCT and the Escrow Agent and shall not be
contested by any of them. Such arbitration proceeding will be subject to the
following rules:
(i) Rules; Jurisdiction. Any Contested Claim shall be settled
pursuant to an arbitration in the County of Santa Clara, California and, except
as herein specifically stated, in accordance with the commercial arbitration
rules of the American Arbitration Association ("AAA Rules") then in effect,
subject to the provisions of Title 9 of the California Code of Civil Procedure
("Title 9"). To the extent the AAA Rules conflict with, or are supplemented by,
the provisions of Title 9, the provisions of Title 9 shall govern and be
applicable. However, in all events the arbitration provisions of this Escrow
Agreement shall govern over any conflicting rules which may now or hereafter be
contained in either the AAA Rules or Title 9. Any judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction of
the subject matter thereof. The arbitrators shall have the authority to grant
any equitable and legal remedies that would be available in any judicial
proceeding instituted to resolve a Contested Claim. The parties hereto submit
to the jurisdiction of the Superior Court of the State of California and the
United States District Court for the Northern District of California for
purposes of confirming any such award and entering into judgment thereon.
(ii) Compensation of Arbitrators. Any such arbitration shall be
conducted before a panel of one arbitrator who shall be compensated for his or
her services at a rate to be determined by the parties or by the American
Arbitration Association, but based upon reasonable hourly or daily consulting
rates for the arbitrator in the event the parties are not able to agree upon his
or her rate of compensation.
(iii) Selection of Arbitrator. The American Arbitration
Association will have the authority to select an arbitrator from a list of
arbitrators who are lawyers experienced in the representation of software
companies; provided, however, that such arbitrator cannot be the legal counsel
-------- -------
to any party and each party will have the opportunity to make such reasonable
objection to any of the arbitrators listed as such party may wish and that the
American Arbitration Association will select the arbitrator from the list of
arbitrators as to whom neither party makes any such objection. In the event
that the foregoing procedure is not followed (because, for example, there is no
arbitrator to whom a party has not objected), each party will choose one person
from the list of arbitrators provided by the American Arbitration Association
(provided that such person does not have a conflict of interest), and the two
persons so selected will select from the list provided by the American
Arbitration Association the person who will act as the arbitrator.
(iv) Payment of Costs. Each of CCT on the one hand and the UniCAD
Common Stockholders on the other hand shall pay one-half (1/2) of the
compensation to be paid to the arbitrator in any such arbitration and one-half
(1/2) of the costs of transcripts and other
-6-
expenses of the arbitration proceedings; provided, however, that in the event
-------- -------
that the arbitrator finds that one party has substantially prevailed in the
arbitration, the prevailing party shall be entitled to an award of attorney's
fees and costs, arbitrator's fees and costs, and all other costs of arbitration
to be paid by the losing party.
(v) Burden of Proof. For any claim submitted to arbitration, the
burden of proof shall be as it would be if the claim were litigated in a
judicial proceeding.
(vi) Judgment. Upon the conclusion of any arbitration proceedings
hereunder, the arbitrator shall render findings of fact and conclusions of law
and a written opinion setting forth the basis and reason for any decision
reached by him or her and shall deliver such documents to each party to this
Escrow Agreement along with a signed copy of the award in accordance with
Section 1283.6 of Title 9.
(vii) Terms of Arbitration. The arbitrator chosen in accordance
with these provisions shall not have the power to alter, amend or otherwise
affect the terms of these arbitration provisions or the provisions of this
Escrow Agreement or the Plan of Reorganization.
(viii) Exclusive Remedy. Except as specifically provided in the
Plan of Reorganization or this Escrow Agreement, arbitration shall be the sole
and exclusive remedy of the parties for any Damage Contest arising out of such
agreements.
(c) Settled Claims. If a Claim (including a Contested Claim) is settled by
a written settlement agreement executed by the Representative and CCT, then the
Representative and CCT shall promptly deliver such executed settlement agreement
to the Escrow Agent with written instructions to release Escrow Shares pursuant
to such settlement agreement. Upon its receipt of such settlement agreement and
instructions, the Escrow Agent shall (i) immediately release from escrow and
transfer to CCT for cancellation that number of Escrow Shares having a value
(determined pursuant to Section 5(d) hereof) equal to the amount of Damages that
CCT and the Representative have agreed CCT has suffered in such settlement
agreement and instructions, which transferred and forfeited Escrow Shares will
be taken from each of the Stockholders in proportion to their respective
percentage interest in the Escrow Shares then outstanding, and (ii) notify the
Representative of such transfer of Escrow Shares as promptly as reasonably
practicable.
(d) Determination of Amount of Claims. Any amount owed to CCT hereunder
determined pursuant to Section 5(a), (b) or (c) or Section 7 above, will be
immediately payable to CCT out of the Escrow Shares then held by the Escrow
Agent at a per-share value equal to the Per Share Price of CCT Common Stock (as
defined in the Plan of Reorganization).
(e) No Election of Remedies. CCT may institute claims against the Escrow
Shares and in satisfaction thereof may retake Escrow Shares, after any notice to
the Representative required hereunder, without making any other claims directly
against UniCAD or the UniCAD Common Stockholders and without rescinding or
attempting to rescind the transactions consummated pursuant to the Plan of
Reorganization. The assertion of any single
-7-
claim for indemnification hereunder will not bar CCT from asserting other claims
hereunder. CCT need not exhaust any other remedies that may be available to it
but may proceed directly in accordance with the provisions of this Escrow
Agreement.
6. Limitation of Escrow Agent's Liability.
--------------------------------------
(a) The Escrow Agent will be indemnified and will incur no liability
with respect to any action taken or suffered by it in reliance upon any notice,
direction, instruction, consent, statement or other documents believed by it to
be genuine and duly authorized, nor for other action or inaction except its own
willful misconduct or gross negligence. The Escrow Agent will not be
responsible for the validity or sufficiency of this Escrow Agreement. In all
questions arising under the Escrow Agreement, the Escrow Agent may rely on the
advice of counsel, and for anything done, omitted or suffered in good faith by
the Escrow Agent based on such advice the Escrow Agent will not be liable to
anyone. The Escrow Agent will not be required to take any action hereunder
involving any expense unless the payment of such expense is made or provided for
in a manner satisfactory to it.
(b) In the event conflicting demands are made or conflicting notices
served upon the Escrow Agent with respect to the Escrow Account, the Escrow
Agent will have the absolute right, at the Escrow Agent's election, to do either
or both of the following: (i) withhold and stop all further proceedings
pursuant to, and performance under, this Escrow Agreement; or (ii) file a suit
in interpleader and obtain an order from any court of competent jurisdiction an
order requiring the parties to interplead and litigate in such court conflicting
demands or claims. In the event such interpleader suit is brought, the Escrow
Agent will thereby be fully released and each discharged from all further
obligations imposed upon it under this Escrow Agreement with respect to the
Claim(s) that are the subject of such interpleader suit, and CCT and the UniCAD
Common Stockholders will each pay (subject to reimbursement pursuant to Section
7 hereof) one-half of all costs, expenses and reasonable attorney's fees
expended or incurred by the Escrow Agent pursuant to the exercise of Escrow
Agent's rights under this Section 6, the amount thereof to be fixed and a
judgment therefor to be rendered by the court in such suit.
7. Expenses. All fees and expenses of the Escrow Agent incurred in the
--------
ordinary course of performing its responsibilities hereunder will be paid by
CCT, upon receipt of a written invoice by Escrow Agent. Except as set forth in
the last clause of Section 5(b)(iv) above, any extraordinary fees and expenses
arising under this Escrow Agreement, including without limitation any fees or
expenses related to arbitrators under Section 5 hereof or incurred by the Escrow
Agent in connection with a dispute over the distribution of Escrow Shares or the
validity of a Notice of Claim, will be paid one-half (1/2) by CCT and one-half
(1/2) by the UniCAD Stockholders, and the UniCAD Common Stockholders' liability
therefor may be satisfied as an undisputed claim hereunder out of the Escrow
Shares. CCT will advance the cash value of such shares and pay CCT's portion of
the fees and expenses of the Escrow Agent upon receipt of a written invoice from
the Escrow Agent. The Escrow Agent will, upon demand by CCT, transfer to CCT a
number of Escrow Shares having an aggregate value equal to the portion of fees
and expenses paid by CCT on behalf of the UniCAD Common Stockholders (with each
such Escrow Share deemed to have a per-share value equal to the Per Share
Price).
-8-
8. Successor Escrow Agent. If the Escrow Agent becomes unavailable or
----------------------
unwilling to continue in its capacity herewith, the Escrow Agent may resign and
be discharged from its duties or obligations hereunder by giving written notice
of resignation to the parties to this Escrow Agreement, specifying not less than
sixty (60) days' prior notice of the date when such resignation will take
effect. CCT shall designate a successor Escrow Agent prior to the expiration of
such sixty-day period by giving written notice to the Escrow Agent and the
Representative. CCT may appoint a successor Escrow Agent without the consent of
the Representative so long as such successor is a bank with assets of at least
$50 million, and may appoint any other successor Escrow Agent with the consent
of the Representative, which will not be unreasonably withheld. Upon payment of
its outstanding invoices for fees and expenses, Escrow Agent will promptly
transfer the Escrow Shares to such designated successor.
9. Limitation of Responsibility; Notices. Escrow Agent's duties are
-------------------------------------
limited to those set forth in this Escrow Agreement and Escrow Agent may rely
upon the written notices delivered to Escrow Agent hereunder.
10. Notices. Any notice or other communication required or permitted to be
-------
given under this Escrow Agreement will be in writing, will be delivered
personally, by registered or certified mail, postage prepaid, by overnight
courier or by telecopier, and will be deemed given upon delivery, if delivered
personally, three days after deposit in the mails, if mailed, one business day
after delivery to a national overnight courier service, or one business day
after transmission by telecopier with confirmation of receipt (and a hard copy
mailed by certified or regular mail), to the following addresses:
If to the Escrow Agent: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
(Xxxxxx & Chyan Technology, Inc. 1996 Escrow)
If to CCT: Xxxxxx & Chyan Technology, Inc.
0000 X. Xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Chief Financial Officer
If to the Representative: Xxxxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 10.
-9-
11. General.
-------
(a) Governing Law. The internal laws of the State of California
(irrespective of its choice of law principles) will govern the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties hereto. Any litigation or other dispute
resolution proceeding among the parties relating to this Agreement will take
place in San Mateo, Santa Xxxxx or San Francisco County, California, The
parties consent to the personal jurisdiction of and the venue in the state and
federal courts within such counties.
(b) Assignment; Binding Upon Successors and Assigns. Neither party
hereto may assign any of its rights or obligations hereunder without the prior
written consent of the other party hereto. This Escrow Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(c) Counterparts. This Escrow Agreement may be executed in any number
of counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Escrow Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
both parties reflected hereon as signatories.
(d) Entire Agreement. This Escrow Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
(e) Waivers. The observance of any term of this Escrow Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only by a writing signed by the party to be bound thereby.
The waiver by a party of any breach hereof or default in the performance hereof
will not be deemed to constitute a waiver of any other default or any succeeding
breach or default.
(f) Limitation on Indemnification Liability. Except as set forth in
Article 11 of the Plan of Reorganization, the Escrow Shares and any other assets
deposited in escrow pursuant to this Agreement shall be the sole recourse of CCT
and other Indemnified Persons under Section 11.2.1 of the Plan of
Reorganization.
12. Amendment. This Agreement may be amended by the written agreement of
---------
CCT, the Escrow Agent and the Representative, provided that, if the Escrow Agent
does not agree to an amendment agreed upon by CCT and the Representative, the
Escrow Agent will resign and CCT will appoint a successor Escrow Agent in
accordance with Section 8 above. No amendment of the Plan of Reorganization
will increase Escrow Agent's responsibilities or liability hereunder without
Escrow Agent's written agreement.
-10-
IN WITNESS WHEREOF, this Escrow Agreement has been executed as of the date
first set forth above.
XXXXXX & CHYAN TECHNOLOGY, INC. STATE STREET BANK AND TRUST
COMPANY, as Escrow Agent
By: By:
---------------------------- -------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer Name:
-----------------------------
Title:
----------------------------
REPRESENTATIVE OF UNICAD COMMON
STOCKHOLDERS
-------------------------------
Xxxxxxx Xxxxxxx
Each of the undersigned holders of UniCAD Common Stock and/or UniCAD Options
hereby consents to and approves the appointment of Xxxxxxx Xxxxxxx as their
Representative and agrees to be bound by, and have all UniCAD securities owned
by the undersigned subject to, all of the terms and conditions of this Escrow
Agreement.
--------------------------------- ----------------------------------
Xxxxxx Xxxxxxxxxx Xxxxxxx Xxxx
--------------------------------- ----------------------------------
Xxxxxxx Xxxxxxx Xxxxx XxXxxxxx
--------------------------------- ----------------------------------
Xxxxxx Xxx Xxxxx Xxxxxx
--------------------------------- ----------------------------------
Xxxx Xxxxxxx Xxxx Xxxxxx
--------------------------------- ----------------------------------
Xxxxxxx Xxxxxx Xxxxx Xxxxxxx
-11-
Exhibit F
[LETTERHEAD OF FENWICK & WEST LLP APPEARS HERE]
August 28, 1996
UniCAD, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx & Chyan Technology, Inc., a Delaware
corporation ("CCT") in connection with that certain Agreement and Plan of
Reorganization dated as of July 22, 1996 (the "Plan of Reorganization") by and
between CCT and UniCAD, Inc., a Massachusetts corporation ("UniCAD"), whereby
CCT Acquisition Corp., a Massachusetts corporation and wholly owned subsidiary
of CCT ("CCT Sub") is to be merged with and into UniCAD. This opinion is
rendered to you pursuant to Section 8.6 of the Plan of Reorganization, and,
unless otherwise defined herein, all capitalized terms used herein shall have
the meanings that such terms have in the Plan of Reorganization.
As to matters of fact for the purposes of this opinion, we have examined
only the documents referred to below and have relied solely upon our actual
knowledge, the information obtained from public officials and public records
that is set forth below, and representations contained in the Plan of
Reorganization and the other documents identified below or made by
representatives of CCT and CCT Sub, including, without limitation, those
representations set forth in the Management Certificate referred to below. The
documents we have examined in rendering this opinion, and upon which we have
relied, are the following:
(a) The Certificate of Incorporation of CCT as filed with the Secretary of
State of Delaware on August 9, 1995 and the Articles of Organization of CCT Sub
as filed with the Secretary of the Commonwealth of the Commonwealth of
Massachusetts on July 23, 1996.
(b) CCT's Certificate of Designation of Series A Preferred Stock, as filed
with the Secretary of State of the State of Delaware on August 24, 1995, and as
amended by the CCT's Certificate of Elimination filed with the Secretary of
State of the State of Delaware on November 6, 1995.
(c) The Bylaws of CCT, as amended, certified to be true and correct by CCT
on August 28, 1996 and the Bylaws of CCT Sub certified to be true and correct by
the Clerk of CCT Sub on August 28, 1996.
(d) The minutes of meetings and actions by written consent of the
stockholders and Board of Directors of CCT, its predecessor, Xxxxxx & Chyan
Technology, Inc., a California corporation ("CCT California") and CCT Sub,
--------------
contained as of the date of this opinion in the minute books of CCT, CCT
California and CCT Sub in our possession.
UniCAD, Inc.
August 28, 1996
Page 2
(e) The Agreement and Plan of Merger dated as of September 25, 0000 xxxxxxx
XXX xxx XXX Xxxxxxxxxx.
(f) A certificate of good standing regarding CCT from the Office of the
Secretary of State of the State of Delaware dated as of August 23, 1996 and a
certificate of legal existence and good standing regarding CCT Sub from the
Secretary of the Commonwealth of the Commonwealth of Massachusetts dated as of
August 27, 1996.
(g) The Plan of Reorganization and the exhibits thereto.
(h) The Agreement of Merger, the CCT Affiliates Agreements and the Escrow
Agreement (collectively, together with the Plan of Reorganization, referred to
herein as the "Transaction Documents").
(i) CCT's Permit Application and the Permit dated August 21, 1996 issued by
the California Commissioner of Corporations pursuant thereto.
(j) The other certificates and documents delivered at the Closing.
(k) A Management Certificate addressed to us executed by CCT and CCT Sub
dated August 28, 1996, a copy of which has been delivered to your counsel.
In our examination, we have assumed, and express no opinion as to, the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures on original documents, the genuineness of certificates of public
officials, the conformity to original documents of all documents submitted to us
as copies thereof, the completeness of all documents submitted to us, the lack
of any undisclosed terminations, modifications, waivers or amendments to any
agreements or documents reviewed by us and (except with respect to the execution
and delivery of the Transaction Documents by CCT, CCT Sub and the CCT
stockholders who are parties thereto) the due and valid execution and delivery
of all documents by all parties thereto where due execution and delivery are
prerequisites to the effectiveness thereof. In rendering this opinion we have
also assumed the legal competency and capacity of each natural person to make
and enter into contracts, and for all other purposes.
For the purposes of this opinion, we have also assumed that (a) UniCAD has
all requisite power and authority, and has taken any and all corporate or other
action necessary, for the due authorization by UniCAD of the execution and
delivery of the Transaction Documents and the performance by UniCAD of all its
obligations thereunder, (b) UniCAD has fully performed all the obligations that
UniCAD is to perform under the Transaction Documents at or before the Closing,
and (c) the representations and warranties of UniCAD and CCT in the Plan of
Reorganization, the Transaction Documents and the Permit Application are true
and complete.
A matter stated in this opinion to be "known to us," refers only to the
knowledge of those attorneys currently within the firm who have furnished legal
services to CCT in connection with the Plan of Reorganization and the
transactions contemplated therein, and is so stated to reflect the fact that
such attorneys have not been informed by CCT that the matter stated is factually
inaccurate. We have made no independent factual investigation with respect to
such matters other than as described above.
UniCAD, Inc.
August 28, 1996
Page 3
This opinion is subject to, and we render no opinion as to, the limitations
and exceptions applicable to the enforceability of contracts and obligations
generally, including, without limitation, the following: (a) the effect of the
laws of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereinafter in effect generally relating
to or affecting the rights and remedies of creditors, (b) the effect of general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, (c) limitations imposed by reason
of generally applicable public policies, (d) the availability of specific
performance, injunctive relief and other equitable remedies, (e) the compliance
or noncompliance with applicable antifraud statutes under the rules and
regulations applicable to state and federal laws concerning the issuance of
securities, (f) the effect of Section 1670.5 of the California Civil Code and of
California court decisions, invoking statutes or principles of equity, which
have held that certain covenants and provisions of agreements are unenforceable
where (i) the breach of such covenants or provisions imposes restrictions or
burdens upon the other party and it cannot be demonstrated that the enforcement
of such restrictions or burdens is reasonably necessary for the protection of
the party seeking to enforce such provisions or (ii) the enforcement of such
covenants or provisions under the circumstances would violate the implied
covenant of good faith and fair dealing, and (g) compliance or noncompliance of
the transactions contemplated by the Plan of Reorganization with any state or
federal antitrust laws or laws of a similar nature.
With respect to our opinion in paragraph 1 below, regarding the due
organization, valid existence and corporate good standing of CCT, we have relied
solely upon the certificates of good standing regarding CCT from the Delaware
Secretary of State that is expressly referred to above. With respect to our
opinion in paragraph 1 below, regarding the due organization, valid existence
and corporate good standing of CCT Sub, we have relied solely upon the
certificate of legal existence and good standing regarding CCT Sub from the
Secretary of the Commonwealth of the Commonwealth of Massachusetts that is
expressly referred to above.
We are admitted to practice law in the State of California, and we express
no opinion herein as to any laws other than the existing laws of the State of
California, the General Corporation Law of the State of Delaware and the
existing federal securities laws of the United States, and we express no opinion
with respect to the application or effect of the laws of any other jurisdiction.
In rendering the opinions below, we are opining only as to the specific
legal issues expressly set forth herein, and no opinion shall be inferred as to
any other matters.
We also call your attention to the fact that under various reports
published by committees of the State Bar of California, certain assumptions,
qualifications and exceptions are implicit in opinions of lawyers. Although we
have expressly set forth certain assumptions, qualifications and exceptions
herein, we are not limiting or omitting any others set forth in the various
reports or otherwise deemed standard for practice by lawyers in the State of
California.
Based upon and subject to the foregoing, and subject to the qualifications
and exceptions contained herein, we are of the opinion that:
UniCAD, Inc.
August 28, 1996
Page 4
1. CCT is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority to own its properties and assets, to carry on its business as
presently conducted, and to enter into the Plan of Reorganization and perform
its obligations thereunder. CCT Sub is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has the corporate power and authority to enter into the
Agreement of Merger and perform its obligations thereunder.
2. The Transaction Documents have been duly authorized by all necessary
corporate action on the part of CCT and have been duly executed and delivered by
CCT. The Plan of Reorganization and the Agreement of Merger constitute legal,
valid and binding obligations of CCT enforceable against it in accordance with
their respective terms. The Agreement of Merger has been duly authorized by all
necessary corporate action on the part of CCT Sub, has been duly executed and
delivered by CCT Sub, and constitutes legal, valid and binding obligations of
CCT Sub enforceable against it in accordance with its terms.
3. The execution and delivery of the Plan of Reorganization and the
Agreement of Merger, and the performance by CCT of its obligations thereunder,
will not breach or result in a violation of CCT's Certificate of Incorporation
or Bylaws, or any judgment, order or decree of any court or arbitrator, known to
us, to which CCT is a party or is subject. The execution and delivery of the
Agreement of Merger, and the performance by CCT Sub of its obligations
thereunder, will not breach or result in a violation of CCT Sub's Articles of
Organization or By-Laws, or any judgment, order or decree of any court or
arbitrator, known to us, to which CCT Sub is a party or is subject.
4. The shares of CCT Common Stock that are issuable in the Merger upon
the conversion of the outstanding shares of UniCAD Common Stock (the "Shares")
have been duly authorized, and will be validly issued, fully paid and
nonassessable when issued in accordance with the terms of the Plan of
Reorganization.
5. The offer, sale and issuance of the Shares in accordance with the
terms of the Plan of Reorganization constitute transactions exempt from the
registration requirements of the 1933 Act by reason of Section 3(a)(10) of the
1933 Act.
6. The CCT Affiliates Agreements constitute legal, valid and binding
obligations of the CCT stockholders who are parties thereto, enforceable
against them in accordance with their respective terms.
This opinion is intended solely for the benefit of UniCAD for the purpose
of Section 8.6 of the Plan of Reorganization and is not to be used by UniCAD or
any of its stockholders for any other purpose or made available to or be relied
upon by any other person, firm or entity, without our prior written consent. We
disclaim any duty to update or advise UniCAD or any of its
UniCAD, Inc.
August 28, 1996
Page 5
stockholders of any facts, circumstances, events or changes in the law that may
hereafter be brought to our attention even if they may affect or modify the
opinions expressed herein.
Very truly yours,
FENWICK & WEST LLP
By:
------------------------------------
[LETTERHEAD OF XXXXX, XXXXXXX & XXXXXXXXX]
Exhibit G
August 28, 1996
Xxxxxx & Chyan Technology, Inc.
0000 Xxxxxxxx-Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
We have acted as counsel to UniCAD, Inc., a Massachusetts corporation
("UniCAD"), in connection with the Agreement and Plan of Reorganization dated as
------
of July 22, 1996 (the "Merger Agreement") by and among UniCAD and Xxxxxx & Chyan
----------------
Technology, Inc., a Delaware corporation ("CCT"). This opinion is furnished to
---
you pursuant to Section 9.7 of the Merger Agreement. Capitalized terms not
defined herein shall have the meanings assigned to them in the Merger Agreement.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion. In rendering this opinion, as to
all matters of fact relevant to this opinion, we have assumed the completeness
and accuracy of, and are relying solely upon, the representations and warranties
of UniCAD contained in the Merger Agreement and the statements set forth in
certificates of public officials and officers of UniCAD, without making any
independent investigation or inquiry with respect to the completeness and
accuracy of such statements, other than a review of the articles of
incorporation, by-laws and relevant minute books of UniCAD. In rendering the
opinions set forth in paragraph (1) below as to the due incorporation, valid
existence and good standing of UniCAD, we have relied solely upon a certificate
of legal existence and good standing issued by the Secretary of the Commonwealth
of the Commonwealth of Massachusetts. In rendering the opinions set forth in
paragraphs (4) and (6) below, we have not searched the dockets of any courts or
governmental authorities. Any reference herein to "our knowledge" or to matters
"known to us" or "of which we have knowledge," or any variation thereof, shall
mean the knowledge of attorneys in our firm who perform services for UniCAD
without any independent investigation, except for inquiry of officers of UniCAD.
We have assumed the genuineness of all signatures and the authenticity of
all documents submitted to us as originals and the conformity to original
documents of all documents submitted to us as copies, whether certified or not.
For purposes of this opinion, we have assumed that the Merger Agreement, the
Escrow Agreement, the UniCAD Affiliate Agreements, the Agreement of Merger and
the Employment Agreements (collectively, the "Transaction Agreements") have been
----------------------
duly authorized, executed and delivered by, and constitute the valid, binding
and enforceable obligations of, each of the parties thereto other than UniCAD
and stockholders of UniCAD who are parties or signatories thereto, as the case
may be, and that all natural persons who are signatories to any documents are
competent.
All opinions herein contained with respect to the enforceability of
documents and instruments are qualified to the extent that: (a) the
availability of equitable remedies, including specific enforcement and
injunctive relief, is subject to the discretion of the court before which any
proceedings therefor may be brought; and (b) the enforceability of certain terms
provided in the Transaction Agreements may be limited by (i) applicable
bankruptcy, reorganization, arrangements, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights generally as at the time in
effect and (ii) general principles of equity and the discretion of a court in
granting equitable remedies (whether enforceability is considered in a
proceeding at law or in equity).
In addition, we express no opinion as to (i) waivers or provisions relating
to delay or omission of enforcement of remedies, (ii) provisions dealing with
the effect of invalidity or unenforceability of any provisions of the
Transaction Agreements on the validity or enforceability of any other provision
thereof, (iii) the effect of the rules of law governing specific performance,
injunctive relief or other equitable remedies, (iv) compliance with applicable
anti-fraud provisions of federal or state securities laws, (v) compliance with
applicable anti-trust provisions of federal or state securities laws or (vi)
provisions that may be deemed or construed to waive any right of UniCAD that may
not lawfully be waived.
We are members only of the bar of the Commonwealth of Massachusetts and
therefore do not hold ourselves out as experts in, and express no opinion as to,
the laws of any state or jurisdiction other than the United States and the
Commonwealth of Massachusetts. For purposes of the Merger Agreement and
Agreement of Merger, we have assumed, with your consent, that California law is
the same as Massachusetts law. To the extent our opinions are based upon
matters of Canadian law, we have relied solely upon the opinion of Xxxxxx X.
XxXxxxxxx, Barrister and Solicitor.
Based upon and subject to the foregoing, we are of the opinion that:
(1) UniCAD is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts. UniCAD
has the corporate power and authority to own its properties and assets, to
carry on its business as presently conducted, and to enter into the Merger
Agreement and perform its obligations thereunder. The Subsidiary is a
corporation duly organized, validly existing and in good standing under the
laws of the Province of Ontario. The Subsidiary has the corporate power and
authority to own its properties and assets, and to carry on its business as
presently conducted.
(2) The authorized capital stock of UniCAD consists of 1,250,000
shares of Common Stock, $0.01 par value. To our knowledge, based solely on
our examination of the corporate minute books, stock purchase agreements
and the stock records of UniCAD provided to us, 782,716 shares of Common
Stock are issued, outstanding, and owned of record by those persons listed
on Schedule 3.3 of the Disclosure Letter. All
presently outstanding shares of UniCAD's capital stock have been duly
authorized and validly issued, and based solely on a certificate of the
Treasurer of UniCAD, are fully paid and nonassessable. The shares of
capital stock of UniCAD held of record by Xxxxxx Xxxxxxxxxx, Xxxxxxx Xxxx
and Xxxxxxx Xxxxxxx were issued in compliance with applicable federal and
Massachusetts securities laws regarding registration or qualification of
such securities. Except as disclosed in or contemplated by the Merger
Agreement and the Disclosure Letter, there are, to our actual knowledge,
(a) no options, warrants, calls, rights, commitments, convertible
securities or other agreements or arrangements under which either UniCAD or
the Subsidiary is or may be obliged to issue shares of its capital stock,
and (b) no preemptive rights to subscribe for or to purchase capital stock
of UniCAD or the Subsidiary.
(3) The Transaction Agreements have been duly authorized by all
necessary corporate action on the part of UniCAD, its Board of Directors
and stockholders, and have been duly executed and delivered by UniCAD.
Each of the Merger Agreement and Agreement of Merger constitutes legal,
valid and binding obligations of UniCAD enforceable against it in
accordance with its terms.
(4) The execution and delivery of the Merger Agreement and the
Agreement of Merger, and the performance by UniCAD of its obligations
thereunder will not breach or result in a violation of UniCAD's articles of
organization or by-laws or the Subsidiary's charter documents, or any
judgment, order or decree of any court or arbitrator, known to us, to which
UniCAD or the Subsidiary is a party or is subject.
(5) To our knowledge, no consent, approval or authorization of, or
designation, declaration or [filling] with, any governmental authority is
required in connection with the valid execution, delivery and performance
by UniCAD of the Merger Agreement, other than such consents, approvals,
authorizations, designations, declarations or filings as have been made or
obtained on or before the date hereof.
(6) Except as disclosed in the Merger Agreement, the Agreement of
Merger and the Disclosure Letter, there is, to our actual knowledge, no
action, suit or proceeding pending against UniCAD or the Subsidiary in any
court or before any governmental authority or agency, or arbitration board
of tribunal.
(7) Upon the filing of the Articles of Merger with the Secretary of
the Commonwealth of the Commonwealth of Massachusetts in accordance with
Massachusetts law, the Merger will become effective in accordance with
Massachusetts law.
(8) The Escrow Agreement and the indemnification provisions of
Section 11 of the Merger Agreement constitute legal, valid and binding
obligations of the UniCAD
stockholders who are signatories to the Escrow Agreement, enforceable
against them in accordance with their respective terms.
(9) The UniCAD Affiliate Agreements constitute legal, valid and
binding obligations of the UniCAD stockholders who are parties thereto,
enforceable against them in accordance with their respective terms.
This opinion is being furnished to you solely for your benefit in
connection with the transactions contemplated by the Merger Agreement, and may
not be used for any other purpose or relied upon by any person other than you.
Except with our prior written consent, the opinions herein expressed are not to
be used, circulated, quoted or otherwise referred to in connection with any
transactions other than those contemplated by the Merger Agreement by or to any
other person.
Very truly yours,
XXXXX, XXXXXXX & XXXXXXXXX, LLP
[LETTERHEAD OF XXXXXX X. XXXXXXXXX]
Exhibit G
VIA TELECOPIER AND FEDERAL EXPRESS
File Xx. 00-000
Xxxxxx 00, 0000
Xxxxxx & Xxxxx Technology, Inc.
and Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
Attorneys at Law
x/x Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx, 00000
X.X.X.
Re: UniCAD, Inc. - Xxxxxx & Chyan Technology, Inc. Proposed Merger
Legal Opinion with respect to UniCAD Canada Ltd.
I am a member in good standing of the Law Society of Upper Canada and I act as
the corporate lawyer for UniCAD Canada Ltd. (the "Corporation").
The opinions expressed in this letter are subject to the qualifications noted
below.
In my opinion the Corporation has been incorporated, duly organized, is validly
existing and is in good standing under the laws of the Province of Ontario its
jurisdiction of incorporation.
The Corporation has the corporate power and authority to own its properties and
assets and to carry on business as presently conducted in the Province of
Ontario. This authority and power extends to jurisdictions outside of the
Province of Ontario subject to compliance with the applicable laws in those
jurisdictions.
Except as disclosed in or contemplated by the Plan of Reorganization and
Disclosure Letter, there are no options, warrants, calls, rights, commitments,
convertible securities or other agreements or arrangements under which the
Corporation is or may be obliged to issue shares of its capital stock nor are
there any preemptive rights to subscribe for or to purchase capital stock of the
Corporation.
The execution and delivery of the Plan of Reorganization and the Agreement of
Merger and the performance by UniCAD, Inc. of its obligations thereunder will
not breach or result in any violation of the charter documents or any judgement,
order or decree of any court or arbitrator to which the Corporation is a party
or is subject.
The foregoing opinions may only be relied upon subject to the following
qualifications:
1. Attachment to this letter as appendix A of a Certificate of Status issued
under the seal of the Minister of Consumer and Commercial Relations of the
Province of Ontario confirming that the Corporation has not been dissolved.
2. The opinions expressed are based upon an examination of the minute book for
the Corporation, other corporate records in my possession and written
confirmation by the President of the Corporation that to the best of his
knowledge and belief, the opinions expressed in this letter are true. No
other investigation or examination of business or court records has been
undertaken and none has been requested of me.
3. No opinion is expressed on compliance of the Corporation with the laws of
any jurisdiction other that the laws of the Province of Ontario and the
federal laws of Canada applicable therein.
I trust this letter is sufficient for your purposes.
Yours very truly
Xxxxxx X. XxXxxxxxx
GCM:cm
c.c. Xx. Xxxxx Xxxxx
UniCAD Canada Ltd.
Exhibit H
WAIVER
Reference is made to a certain Teaming Agreement dated as of September 17,
1993 (the "Teaming Agreement"), by and among Viewlogic Systems, Inc., a Delaware
corporation ("Viewlogic"), UniCAD, Inc., a Massachusetts corporation ("UNICAD")
and Xxxxxxx Xxxxxxx, Xxxxxxx Xxxx and Xxxxxx Xxxxxxxxxx (individually, a
"Shareholder," collectively, the "Shareholders").
Viewlogic hereby acknowledges receipt of the letter dated June 19, 1996,
from UniCAD notifying Viewlogic of each Shareholder's desire to sell all of his
shares of Common Stock of UniCAD, $.01 par value per share (such shares being
the "interest"), to Xxxxxx & Chyan Technology, Inc., a Delaware corporation
("CCT"), in connection with a proposed merger transaction (the "Merger") and
Viewlogic hereby:
(i) waives its option to purchase all or any part of the Interest on the
terms set forth in Section 10.3 of the Teaming Agreement and to waive the
remaining term of the notice period stated therein, provided that such waiver
shall apply only in the case of the proposed Merger; and
(ii) agrees to keep the existence and the proposed terms of the Merger
strictly confidential until such time as a public announcement of the Merger
shall have been made by UniCAD or CCT.
IN WITNESS WHEREOF, the undersigned has executed this Waiver as of the 1st
day of July 1996.
VIEWLOGIC SYSTEMS, INC.
--------------------------------
Name:
Title:
Exhibit I
CBDS LICENSE AGREEMENT
----------------------
THIS MEMORANDUM OF AGREEMENT is made and entered into this 22nd day of July,
1996, and is effective as of the Effective Date (hereinafter called the "CBDS
License Agreement");
BY AND AMONG:
NORTHERN TELECOM LIMITED, a corporation duly incorporated under the laws of
Canada with its head office located at 0000 Xxxxxxxx Xxxxxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 (hereinafter called "Nortel"), on
behalf of itself and all Nortel Companies;
AND:
UNICAD, INC., a corporation duly incorporated under the laws of
Massachusetts, having offices at 000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxxxxx, 00000, X.X.X. (hereinafter called "UniCAD"), on behalf of
itself and all UniCAD Companies;
AND:
XXXXXX & CHYAN TECHNOLOGY, INC., a corporation duly incorporated under the
laws of Delaware, having offices at 0000 Xxxxxxxx-Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxx, 00000, X.X.X. (hereinafter called "CCT"), on behalf
of itself and all UniCAD Companies.
WHEREAS Nortel, Viewlogic Systems, Inc. (hereinafter called "Viewlogic") and
UniCAD entered into an agreement effective October 15, 1993, which agreement was
subsequently amended by agreements effective May 18, 1994, September 7, 1994,
April 24, 1995, and October 13, 1995 (hereinafter the "Prior Agreement").
WHEREAS in connection with the Prior Agreement, UniCAD, Viewlogic, and Xxxxxxx
Xxxxxxx, Xxxxxxx Xxxx and Xxxxxx Xxxxxxxxxx entered into a Teaming Agreement
dated September 17, 1993 (hereinafter the "Teaming Agreement").
WHEREAS CCT is negotiating with UniCAD to acquire all of the outstanding capital
stock of the UniCAD.
WHEREAS among the various conditions that CCT requires be satisfied prior to CCT
entering into any binding obligation to acquire UniCAD are (i) the entering into
of this CBDS License Agreement, (ii) the termination of the Prior Agreement, and
(ii) the amendment of the Teaming Agreement.
WHEREAS no Viewlogic Derivative Works, as such term is defined in the Prior
Agreement, have been created under the Prior Agreement.
WHEREAS Viewlogic has agreed to amend the Teaming Agreement such that the Prior
Agreement will be terminated effective upon Closing.
NOW THEREFORE, in consideration of the mutual promises contained herein and
other valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, unless otherwise defined:
(a) "Affiliate" shall mean with respect to a Party hereto, a corporation or
entity which effectively controls, is controlled by, or is under common
control with such Party, directly or indirectly, through the ownership or
control of shares in or by such corporation or entity;
(b) "BS2DD" shall mean that set of translator software programs and associated
documentation set out in Schedule F attached hereto;
(c) "CAD" shall mean computer aided design;
(d) "CAE" shall mean computer assisted engineering;
(e) "CAM" shall mean computer aided manufacturing;
(f) "CBDS" shall mean that set of CAD software programs and associated
documentation set out in Schedule A attached hereto, and shall
(i) include BS2DD,
(ii) that set of CAD software programs and associated documentation known
as "SyntheSolve"; and
(iii) exclude that set of CAD software programs and associated
documentation known as "Ground Bounce", "Thermsim II", and "MDO";
(g) "Closing" shall mean the moment at which CCT acquires all or substantially
all of the capital stock of UniCAD;
(h) "Contractor" shall mean a third party
(i) which performs work for, or on behalf of, Nortel or a Nortel
Company; and
(ii) performs a substantial component of its work on premises owned or
occupied by Nortel or a Nortel Company,
Page 2 of 40
but shall not include any third party while it is performing work for, or
on behalf of, itself or some party other than Nortel or a Nortel Company;
(i) "Derivative Work" shall mean any software program or documentation which,
without the express written permission of the owner of an original work,
would constitute a violation of the owner's copyright, patent, or other
intellectual property right in respect of such original work;
(j) "Distributor" shall mean a person or entity with which a UniCAD Company has
entered into a written agreement authorizing such person or entity to
sublicense CBDS or UniCAD Derivative Works in accordance with the terms
hereof;
(k) "EDA" shall mean Electronic Design Automation including, without
limitation, CAD, CAM and CAE;
(l) "Effective Date" shall mean the date on which this CBDS License Agreement
is executed, on which the Prior Agreement is terminated, or of Closing,
which ever occurs last;
(m) "End-User" shall mean any person or entity, other than a UniCAD Company or
a Nortel Company, which uses CBDS or Derivative Works thereof, obtained
from either a UniCAD Company or a Distributor;
(n) "Improvements" shall mean any improvements, developments, inventions,
changes or innovations directly related to CBDS which a UniCAD Company may
develop or have developed, but shall exclude any improvements,
developments, inventions, changes or innovations which form part of
Derivative Works;
(o) "Joint Ventures" shall mean joint ventures, partnerships, corporations, or
similar relationships between a Party, a Subsidiary of such Party, or an
Affiliate of such Party, and a third party or third parties, in which such
Party, Subsidiary, or Affiliate owns or controls, directly or indirectly,
twenty percent (20%) or more of the shares or other mechanism of control;
(p) "Maintenance Derivative Work" shall mean any UniCAD Derivative Work
developed to replace or upgrade either CBDS, or a UniCAD Derivative Work
therefor which existed as of the Effective Date, which End-Users which have
licensed CBDS or such UniCAD Derivative Work would be entitled to receive
and use under the provisions of maintenance agreements (for CBDS or such
UniCAD Derivative Works) they may have either a UniCAD Company or a
Distributor without further charge to those End-Users in the form of either
a new license fee or an upgrading fee, but shall not include any UniCAD
Derivative Works that are New Product Derivative Works;
(q) "Manufacturing Licensee" shall mean a third party with whom a Party or any
of its Subsidiaries, Affiliates, or Joint Ventures has entered into an
agreement, now or in the future, permitting such third party to manufacture
products based on those designed by, or for, and sold or leased by, such
Party or its Affiliate, Subsidiary or Joint Venture;
Page 3 of 40
(r) "New Product Derivative Work" shall include
(i) any UniCAD Derivative Work developed to replace or upgrade either
CBDS, or a Derivative Work thereof which existed as of the Effective
Date, which End-Users which have licensed CBDS or such Derivative Work
would not be entitled to receive and use under the provisions of
maintenance agreements they may have with either a UniCAD Company or a
Distributor without further charge to those End-Users in the form of
either a new license fee or an upgrading fee; and
(ii) any of the following UniCAD Derivative Works and Derivative Works
thereof developed to replace or upgrade such UniCAD Derivative Works:
Detailed Emissions, AWE++, Design MockUp, DASU/PIE, and all
translators with the exception of BS2DD.
For the avoidance of doubt, New Product Derivative Work shall not include
that set of software programs and associated documentation known as
"SPECCTRA" and "IC Craftsman" regardless of whether such products become
UniCAD Derivative Works after the Effective Date;
(s) "Nortel Company" shall mean Nortel or any of its Subsidiaries, Affiliates,
Manufacturing Licensees, Contractors and Joint Ventures, and in the plural
shall mean Nortel and all of its Subsidiaries, Affiliates, Manufacturing
Licensees, Contractors and Joint Ventures;
(t) "Party" shall mean any of Nortel, UniCAD or CCT;
(u) "Seat" shall mean a single CPU or X-terminal which can be used to access
and use a single copy of CBDS or of a UniCAD Derivative Work on a central
server;
(v) "Show Me" shall mean that portion or component of CBDS which is used to
provide on-line help information for a program-user;
(w) "Subsidiary" shall mean a corporation or entity in which a Party
effectively owns or controls, and continues to own or control, directly or
indirectly, more than fifty percent (50%) of the voting stock or shares;
(x) "Third Party Components" shall mean those components of CBDS owned by third
parties, as set out in Schedule B attached hereto, and for which Nortel has
no rights other than those rights granted to it by such third parties;
(y) "UniCAD Company" shall mean UniCAD, CCT or any of their Subsidiaries,
Affiliates and Joint Ventures, and in the plural shall mean UniCAD, CCT and
all of their Subsidiaries, Affiliates and Joint Ventures;
(z) "UniCAD Derivative Work" shall mean a Derivative Work of CBDS developed by
a UniCAD Company;
Page 4 of 40
(aa) "Unisolve Products" shall mean the UniCAD Derivative Work known as
"Unisolve", as it existed as of the Effective Date, and only those
Derivative Works thereof which perform primarily stand-alone engineering
analysis functions and which are licensed as products that do not include
layout, routing or placement functions in excess of those included in
Unisolve as it existed as of the Effective Date, and, for the avoidance of
doubt, shall exclude all other Derivative Works thereof, regardless of the
amount of functionality of Unisolve that is incorporated in such other
Derivative Works;
(ab) "Year 1" shall mean the twelve (12) month period commencing on the
Effective Date, and "Year 2", "Year 3", "Year 4", and "Year 5" shall mean,
respectively, each subsequent twelve (12) month period thereafter; and
(ac) "$" and "Dollar" shall mean the United States of America dollar.
ARTICLE 2
LICENSES
Nortel, to the extent of its legal right to do so, and subject to the terms and
conditions of this CBDS License Agreement, hereby grants to UniCAD Companies;
(a) a personal, perpetual, indivisible, non-exclusive, worldwide, non-
assignable (subject to Article 18 hereof) right to develop UniCAD
Derivative Works; and
(b) a personal, perpetual, indivisible, non-exclusive, worldwide, non-
assignable (subject to Article 18 hereof) right to sublicense to End-Users
and Distributors (including the right for Distributors to sublicense to
End-Users) the right to use CBDS and UniCAD Derivative Works, subject to
the payment by UniCAD to Nortel of fees and royalties thereupon as
contemplated under Article 7 hereof.
Notwithstanding the non-exclusive nature of the above grants made by Nortel, and
with the exception of BS2DD, Nortel Companies shall not grant any such rights to
CBDS or any Derivative Works thereof to any party other than a UniCAD Company
during the currency of this CBDS License Agreement. Nortel has, prior to
October 15, 1993, granted non-exclusive rights in CBDS to third parties,
including rights to sublicense to end-users. No such grant provides any such
third party with any rights to Derivative Works of CBDS developed after the date
of such grant (other than Derivative Works developed by or for such third
party). UniCAD Companies acknowledge such preexisting rights and agree that
this CBDS License Agreement does not restrict nor derogate the rights that
Nortel may have granted to such third parties.
Notwithstanding the foregoing, each Nortel Company is entitled to use CBDS, to
develop Derivative Works thereof, and to use Derivative Works of CBDS developed
by itself or any other Nortel Company. Further, each Nortel Company may grant
to third parties rights to use Show Me and the UniCAD Derivative Work known as
"UniHelp" to develop Derivative Works thereof, and to sublicense to end-users
and distributors (including the right for distributors to sublicense to end-
users) the right to use Show Me, UniHelp and Derivative Works thereof,
Page 5 of 40
provided that such grants to third parties do not include any rights to use, or
to grant sublicenses to use, Show Me, UniHelp or Derivative Works thereof in any
EDA capacity whatsoever, and do not include any rights to use, or to grant
sublicenses to use, Derivative Works which include components of CBDS other than
Show Me or UniHelp. Each Nortel Company may grant to third parties rights to
develop Derivative Works of CBDS and to sublicense to end-users and distributors
(including the right for distributors to sublicense to end-users) the right to
use Derivative Works of CBDS, provide that
(a) such grants to third parties do not include any rights to use, or to grant
sublicenses to use, such Derivative Works in any EDA capacity whatsoever,
and, where such Derivative Works contain a significant component of CBDS,
the Nortel Company has given CCT at least thirty (30) days prior written
notice of its intention to grant such rights; or
(b) such Derivative Works do not contain a significant component of CBDS, and,
where such grants to third parties include rights to use, or to grant
sublicenses to use, such Derivative Works in an EDA capacity, the Nortel
Company has given CCT at least thirty (30) days prior written notice of its
intention to grant such rights and has first offered to license such
Derivative Works to CCT on commercially reasonable terms.
For the purposes of this paragraph, a Derivative Work shall not be deemed to
contain a "significant component" of CBDS simply because it shares a common
development environment with CBDS including tools, libraries and widgets.
With respect to BS2DD, no term or provision of this CBDS License Agreement shall
restrict the rights of Nortel Companies to use BS2DD in any manner whatsoever,
including, but not limited to, licensing BS2DD to other parties or making,
having made, using, selling or reproducing products which contain BS2DD.
No term or provision of this CBDS License Agreement shall be deemed to transfer,
or to contemplate the transfer of, any rights in, to or under CBDS or Derivative
Works thereof other than those rights specifically granted herein.
UniCAD Companies acknowledge that Third Party Components are not the property of
Nortel. Nortel hereby represents that it has obtained from the owners of Third
Party Components the legal right to issue the grants and licenses set out in
this Article 2. UniCAD Companies hereby agree to accept and be bound by the
terms and conditions set out in Nortel's license agreements with the owners of
Third Party Components with respect to the use of Third Party Components by
Nortel sublicensees.
The Parties hereto acknowledge that from time to time, by written amendments to
this CBDS License Agreement agreed to and signed by each of the Parties,
additional Nortel intellectual property may be added to the licenses granted
hereunder together with additional maintenance, grantback and royalty
obligations for UniCAD Companies as shall be specified and agreed to in such
amendment.
Page 6 of 40
ARTICLE 3
INTELLECTUAL PROPERTY GRANT
Nortel Companies, to the extent of their legal rights to do so, hereby grants to
UniCAD Companies, subject to the terms and conditions of this CBDS License
Agreement, a personal, non-transferable, non-assignable (subject to Article 18
hereof), indivisible, non-exclusive, worldwide license to use any intellectual
property of Nortel Companies which is incorporated in, or infringed through the
use of, CBDS and which is reasonably required to fully exploit the licenses
granted under Article 2 hereof for the period of time for which statutory
protection is granted, or common law or equivalent protection is provided. Such
intellectual property of Nortel Companies shall include only that existing as of
October 15, 1993, including, but not limited to, source code, object code,
documentation, patents, copyrights, trade secrets, product related trademarks,
and, where applicable, applications therefor, and know-how (hereinafter
collectively "Nortel Intellectual Property Rights"). The foregoing grant to use
Nortel Intellectual Property Rights shall be limited to the purposes set out in
Article 2 of this CBDS License Agreement.
Notwithstanding anything set out herein to the contrary, the grants set out in
Articles 2 and 3 hereof shall not apply to the software programs and associated
documentation known as "Ground Bounce", "Thermsim II" and "MDO".
ARTICLE 4
FURNISHING OF CBDS
The Parties acknowledge that Nortel has, prior to the Effective Date, to the
extent of its legal rights to do so, furnished CBDS to UniCAD. Nortel shall not
be obliged to develop CBDS any further to perform its obligations under this
CBDS License Agreement. The grants set out in Articles 2 and 3 hereof with
respect to CBDS shall apply to CBDS as it existed as of October 15, 1993. With
the exception of those modifications of, and improvements to, CBDS made by
Nortel after October 15, 1993 which Nortel elected to furnish to UniCAD prior to
the Effective Date ("Optional Additional Nortel Software"), the grants set out
in Articles 2 and 3 hereof with respect to CBDS shall not apply to any software
programs, documentation, or other technology relating to CBDS developed by
Nortel Companies after October 15, 1993 (hereafter "Subsequent Technology"),
notwithstanding that any Subsequent Technology may comprise modifications of
CBDS. Optional Additional Nortel Software shall not include any of those items
listed in Schedule G attached hereto. For the purposes of this Agreement,
Optional Additional Nortel Software shall be treated as though it had been
included in the original delivery of CBDS as set out under the first sentence of
this Article 4.
Page 7 of 40
ARTICLE 5
GRANT BACK
Notwithstanding anything herein to the contrary, UniCAD Companies shall be the
sole owners of all portions of UniCAD Derivative Works and Improvements. Should
any Maintenance Derivative Work or any portion thereof be developed for a UniCAD
Company by a third party, such UniCAD Company shall be obliged to either (i)
acquire for UniCAD sole ownership of such Maintenance Derivative Work or portion
thereof, and all Improvements developed by such third party, or (ii) acquire for
UniCAD sufficient legal rights from such third party in order for UniCAD to
grant Nortel Companies the rights set out in this Article 5.
Further to the immediately preceding paragraph, UniCAD Companies hereby warrant
and represent that, with the exception of Third Party Components, CBDS
components, and any other software UniCAD acquired under license from third
parties as contemplated in the immediately preceding paragraph of this Article
5, UniCAD has acquired sole ownership of all UniCAD Derivative Works and
Improvements developed by, or for, UniCAD prior to the Effective Date.
Subject to the terms and conditions of this CBDS License Agreement, UniCAD
hereby grants to Nortel Companies a personal, perpetual, indivisible, non-
exclusive, irrevocable, non-transferable, non-assignable (subject to Article 18
hereof), worldwide, free (subject to the obligation of Nortel to pay support and
maintenance fees pursuant to Article 6 hereof) right to use source code and
object code versions of CBDS and Maintenance Derivative Works for their own
internal uses in the normal course of their businesses. In the event of an
uncured material breach of UniCAD's support and maintenance obligations pursuant
to Article 6, the foregoing rights shall include the right to grant to third
parties the right to use both the source code and object code versions of
Maintenance Derivative Works solely to provide maintenance and support services
to Nortel Companies as contemplated in the first paragraph of Article 6. Nortel
Companies shall exercise reasonable measures (in no event to be any less
stringent than those Nortel Companies use for their own proprietary software of
similar value) to ensure that the confidentiality of Maintenance Derivative
Works and UniCAD's proprietary rights therein are protected and preserved.
UniCAD shall, at its own expense, deliver source and object code versions of
Maintenance Derivative Works to Nortel at the same time as the first UniCAD
Company or Distributor makes object code copies thereof available to End-Users.
UniCAD shall provide Improvements to Nortel Companies at no additional cost
where such Improvements are provided by any UniCAD Company or Distributor at no
additional cost to any End-User. Otherwise, UniCAD shall provide Improvements
to Nortel Companies under the most favorable terms offered by any UniCAD Company
or Distributor to any End-User within four (4) months of purchase by a Nortel
Company.
Any Nortel Company shall be entitled to license rights to use any commercially
available New Product Derivative Work from any UniCAD Company for a license fee
or upgrading fee calculated in accordance with Schedule D which shall be no
higher than the lowest license fee or upgrading fee which any UniCAD Company or
Distributor charges its most favoured End-User
Page 8 of 40
for comparable volumes of such New Product Derivative Work. Any Nortel Company
shall be entitled to obtain support and maintenance services from UniCAD for any
New Product Derivative Work for a maintenance fee or charge calculated in
accordance with Schedule D which shall be no higher that the lowest fee or
charge which any UniCAD Company or Distributor charges its most favoured End-
User of such New Product Derivative Work for comparable support and maintenance
services.
ARTICLE 6
SUPPORT AND MAINTENANCE
UniCAD shall provide Nortel Companies with support and maintenance services
during Year 1, Year 2, Year 3, Year 4 and Year 5 as set out in Schedule C
attached hereto for Maintenance Derivative Works. Failure of UniCAD at any time
to achieve the standards and levels of support and maintenance service set forth
in Schedule C shall constitute a material breach of this CBDS License Agreement
by CCT and all other UniCAD Companies. CCT, UniCAD and their Subsidiaries
hereby guarantee and warrant the performance by UniCAD and its subcontractors of
all of UniCAD's support and maintenance obligations hereunder.
For the provision of the aforesaid support and maintenance services, UniCAD
shall be paid in accordance with the payment schedule set out in Schedule D
attached hereto.
In the event UniCAD fails, in any material respect, to maintain the standards or
levels of support and maintenance services set out in Schedule C, Nortel shall,
thirty (30) days after Nortel provides UniCAD and CCT with written notice of
such failure, be entitled to suspend all payments to UniCAD with respect to
support and maintenance services until the required standard or level of service
is resumed, without derogation or diminution of Nortel's rights elsewhere within
this CBDS License Agreement. If payments to UniCAD for support and maintenance
services are so suspended, the total amount paid to UniCAD for support and
maintenance services for the period during which UniCAD fails to maintain the
required standard or level of service shall be equitably adjusted downwards to
reflect the decreased standard or level of service provided by UniCAD. Nortel
may acquire the support and maintenance services from another source
(hereinafter "Third Party Support") for the period during which UniCAD fails to
maintain the required standard or level of service. Should the price paid for
Third Party Support exceed the amount by which payments to UniCAD for support
and maintenance services have been reduced, Nortel shall be entitled to further
deduct such excess amount from support and maintenance fees otherwise payable to
UniCAD.
In the event UniCAD or CCT fails to resume the standard or level of support and
maintenance services set out in Schedule C ninety (90) days after Nortel has
provided UniCAD and CCT with written notice of such failure as contemplated in
the immediately preceding paragraph,
Page 9 of 40
Nortel may, upon further written notice to UniCAD and CCT, and subject to
Article 7 hereof, release UniCAD and CCT of their support and maintenance
obligations hereunder. Upon such further notice,
(a) UniCAD shall pay to Nortel the sum of three million dollars ($3,000,000) as
liquidated damages in compensation for all damages, including direct,
indirect, special, incidental and consequential damages, suffered by Nortel
Companies as a consequence of UniCAD's failure to maintain the standard or
level of support and maintenance services set out herein; and
(b) the provisions restricting Nortel's ability to grant rights in CBDS and
Derivative Works thereof to third parties contained in the second paragraph
of Articles 2 shall immediately cease to be binding upon Nortel.
The Parties hereby acknowledge that the sum of three million dollars
($3,000,000) constitutes an accurate estimate of the damages that would be
suffered by Nortel Companies as a singular consequence of UniCAD's failure to
maintain the standard or level of support and maintenance services set out
herein. CCT hereby guarantees the obligation of UniCAD to pay Nortel liquidated
damages for UniCAD's failure to maintain the standard or level of support and
maintenance services set out herein.
The three (3) preceding paragraphs shall constitute Nortel Companies' sole
remedies for a failure of UniCAD to meet its obligation to provide support and
maintenance services set forth herein, and shall be in lieu of any other
remedies or damages for such failure.
CCT hereby guarantees UniCAD's obligation to provide support and maintenance
services to Nortel Companies pursuant to this CBDS License Agreement. In the
event that UniCAD is in material breach of its obligation to provide support and
maintenance services, CCT reserves the right to appoint a replacement
subcontractor (or a number of subcontractors) to discharge such support and
service obligation, subject to Nortel's consent, which shall not be unreasonably
withheld.
UniCAD shall sign, and shall cause any UniCAD employees or employees of other
UniCAD Companies working on Nortel Companies' premises to sign, before entering
Nortel Companies' premises, confidentiality and security agreements with, and in
a form mutually acceptable to, Nortel and UniCAD.
From the amounts due hereunder, Nortel may deduct or withhold whatever amounts
are so prescribed by law to Revenue Canada, and Nortel shall provide to UniCAD,
within sixty (60) days of calendar year end, proof, reasonably satisfactory to
UniCAD, and reasonably available to Nortel, that it has paid such amounts.
Nortel and UniCAD shall cooperate in seeking a waiver from Revenue Canada with
respect to any obligation on the part of Nortel to withhold Canadian
Page 10 of 40
tax on the amounts due hereunder. If the amounts due hereunder are subject to
the Goods and Services Tax or any other local, provincial, or federal sales
taxes, Nortel shall pay such additional amounts as may be necessary to defray
such taxes, except to the extent that any such taxes are based on income of
UniCAD.
No term of this CBDS License Agreement shall in any manner oblige UniCAD to
provide any support and maintenance to either Nortel or Nortel sublicensees in
respect of their use of the UniHelp or any CBDS component where such use is not
any EDA capacity whatsoever.
For so long as Nortel continues to pay UniCAD a support and maintenance fee
equal to or greater than [** ] per year with respect to its
support and maintenance services rendered under this CBDS License Agreement,
UniCAD shall
(i) maintain in its employ a minimum of three (3) development engineers
tasked with CBDS layout, schematic and CAM, to fix bugs and to develop
enhancements and features in addition to the support and maintenance
obligations described elsewhere in this CBDS License Agreement, and
(ii) maintain in its employ a minimum of ten (10) development engineers
located in the Regional Municipality of Ottawa-Carleton, Canada, and
(iii) continue to add enhancements and features to CBDS and Derivative Works
thereof on commercially reasonable terms to be agreed to between UniCAD
and Nortel. Notwithstanding anything herein to the contrary, UniCAD shall
not be required to develop enhancements or features if such development
would necessarily require UniCAD to obtain a license to any third party
software in connection with the development of such enhancement or
feature.
ARTICLE 7
CONSIDERATION
In consideration of the rights granted UniCAD Companies hereunder to market CBDS
and UniCAD Derivative Works (excluding Unisolve Products), UniCAD shall make
aggregate royalty payments to Nortel in the amount of [** ],
payable in installments of [** ] at the end of each of the first six
(6) calendar quarters following the Effective Date, and installments of
[** ] at the end of each of the next fourteen (14) calendar quarters
thereafter. The first such installment shall be due and payable on the last day
of the first three (3) full calendar months following the Effective Date.
UniCAD may, at any time and in UniCAD's sole discretion, pay all or any portion
of the above payments in advance. Upon payment in full by UniCAD of all the
above payments (whether paid in advance or otherwise),
**Confidential treatment has been requested for certain portions of this
document.
Page 11 of 40
(i) Nortel shall not be entitled to suspend or terminate the licenses granted
to UniCAD Companies pursuant to this CBDS License Agreement, and
(ii) all licenses granted to UniCAD Companies pursuant to this CBDS License
Agreement (excluding licenses to Unisolve Products) with respect to the
software set out in Schedule A shall be fully paid, in each case
notwithstanding any other provision of this CBDS License Agreement and
notwithstanding any termination of this CBDS License Agreement.
With respect to all sublicensing after the Effective Date of Unisolve Products
to End-Users by UniCAD Companies or Distributors, UniCAD shall pay Nortel a
royalty of [** ] of the license fee (excluding support and
maintenance fees, sales taxes and shipping charges), either paid-up or periodic,
that a UniCAD Company receives from either the End-User or a Distributor, as
applicable. Such [** ] royalty shall be payable on all such
sublicenses granted within five (5) years following the Effective Date.
Commencing five (5) years following the Effective Date, all licenses granted
herein with respect to Unisolve Products shall be fully paid, notwithstanding
any other provision, or termination, of this CBDS License Agreement, and Nortel
shall not be entitled to suspend or terminate such licenses. Nortel Companies
expressly acknowledge that such [** ] royalty shall not be payable
with respect to sublicenses of Derivative Works of Unisolve that are not
Unisolve Products, and that the only compensation payable to Nortel Companies
with respect to such sublicenses is the fixed amount royalty described in the
first paragraph of this Article 7.
UniCAD Companies and Distributors shall structure their license fees and support
costs for Unisolve Products in conformance with EDA industry standard pricing
practices vis-a-vis the relative amounts charged End-Users for, on the one hand,
the right to use a Unisolve Product (hereinafter the "License Fee") and, on the
other hand, support and maintenance services for such Unisolve Product
(hereinafter the "Support Charges"). Furthermore, in making any offers to
potential End-Users or Distributors to discount a UniCAD Company's catalog
prices for License Fees and Support Charges, such discounts shall be made in
conformance with EDA industry standard discounting practices vis-a-vis the
relative price reductions for License Fees and Support Charges. Royalty
payments with respect to Unisolve Products shall be made on either a per-Seat or
a paid-up corporate license fee basis.
Notwithstanding any term or provision of this Article 7 or any other term or
provision of this CBDS License Agreement, UniCAD shall not be obliged to pay
royalties to Nortel with respect to the licensing by UniCAD Companies or
Distributors of BS2DD and translator software programs which are Derivative
Works thereof.
CCT hereby guarantees and warrants the payment by UniCAD of all the fees and
royalties payable by UniCAD to Nortel under the terms of this Article 7.
**Confidential treatment has been requested for certain portions of this
document.
Page 12 of 40
ARTICLE 8
RECORDS, REMITTANCES, AND PAYMENTS
UniCAD Companies shall keep, and shall require Distributors to keep, clear and
accurate records with respect to the sublicensing of Unisolve Products.
Nortel shall have the right, through its internal auditing experts or Chartered
Accountants retained for the purpose, to examine and audit, during normal
business hours, annually (or at less frequent intervals) all such records and
such other records and accounts as may under recognized accounting practices
contain information bearing upon the amount of royalties payable to it for
sublicensing of Unisolve Products under this CBDS License Agreement. Prompt
adjustment shall be made by the proper Party to compensate for any errors or
omissions disclosed by such examination or audit. Neither such right to examine
and audit, nor the right to receive such adjustments, shall be affected by
statements to the contrary appearing on cheques or otherwise, unless any such
right is expressly waived in writing by the Party having such right. UniCAD
Companies shall furnish, and shall require all Distributors to furnish, whatever
additional information Nortel may reasonably request from time to time to enable
Nortel to ascertain amounts payable hereunder.
Within sixty (60) days following the end of each fiscal quarter for as long as
royalty payments are due to Nortel, UniCAD shall furnish to Nortel a statement,
in a form acceptable to Nortel, certified by an authorized official of UniCAD,
recording all sublicenses of Unisolve Products to End-Users hereunder, and all
royalties payable thereon. If no such sublicenses have been signed, that fact
shall be shown on such statement. Within the same sixty (60) day period, UniCAD
shall, irrespective of terms granted or collections made on account of any such
sublicenses subject to royalties, remit to Nortel the royalties payable
hereunder for such fiscal quarter.
All payments to be made by UniCAD to Nortel shall be made in U.S. dollars
delivered to Nortel's address as shown in Article 17 hereof, or to such other
payee as Nortel may specify by written notice.
From the amounts due hereunder, UniCAD shall deduct or withhold whatever amounts
are so prescribed by law to the U.S. Internal Revenue Service. Notwithstanding
such deduction or withholding, Nortel and UniCAD shall cooperate in seeking a
waiver from the Government of the United States of America with respect to any
obligation on the part of UniCAD to withhold United States tax on the amounts
due hereunder. If the amounts due hereunder are subject to any other local,
state or federal sales taxes, UniCAD shall pay such additional amounts as may be
necessary to defray such taxes, except to the extent that any such taxes are
based on income of Nortel.
Payments when provided for in this CBDS License Agreement shall, when overdue,
bear interest at a rate of two percent (2%) over the Canadian prime rate as
quoted by the Royal Bank of Canada at Toronto, Canada computed on a daily basis.
ARTICLE 9
Page 13 of 40
SUBLICENSING
In exercising their right to grant sublicenses as set forth in Article 2 of this
CBDS License Agreement, UniCAD Companies shall, and shall oblige all
Distributors to, enter into sublicense agreements with End-Users which shall
contain provisions to the following effect:
(a) End-User shall acquire no right, title or interest in, to or under the CBDS
or Derivative Works thereof other than the right to use CBDS or Derivative
Works thereof;
(b) End-User shall hold CBDS and Derivative Works thereof in confidence and
shall not at any time use or reproduce CBDS and Derivative Works thereof
except as expressly permitted under the terms of their sublicense and shall
not disclose CBDS and Derivative Works thereof to any person other than
employees of End-User with a need to know without the prior written consent
of UniCAD or CCT; and
(c) End-User's right to use CBDS and Derivative Works thereof shall be in
accordance with the laws applicable in End-User's country of residence but
so as not to affect, but to preserve, the proprietary and confidential
nature of CBDS and Derivative Works thereof and any patent, copyright or
other intellectual property right of Nortel and UniCAD Companies applicable
to CBDS and Derivative Works thereof.
UniCAD Companies shall, and shall require Distributors to, negotiate, execute,
administer and monitor each of the sublicenses of CBDS and Derivative Works
thereof to ensure compliance with all the relevant provisions of this CBDS
License Agreement.
UniCAD Companies shall require Distributors to notify UniCAD promptly if it
becomes aware that an End-User is in default with respect to the above described
provisions of its sublicense agreement. In the event that a UniCAD Company
becomes aware that an End-User is in default with respect to such provisions of
its sublicense agreement, it shall so advise Nortel promptly in writing, and, to
the extent reasonably necessary to preserve the proprietary and confidential
nature of the CBDS and Derivative Works thereof and any patent, copyright or
other intellectual property right of Nortel, exercise as soon as reasonably
possible, such rights and recourses as it may have in the circumstances.
ARTICLE 10
MARKETING
UniCAD Companies shall for the duration of this CBDS License Agreement use
reasonable efforts to develop, supply, support and maintain a market for
Unisolve Products.
ARTICLE 11
CONFIDENTIAL INFORMATION
Page 14 of 40
The Parties acknowledge that the material set forth in Schedule A attached
hereto is confidential information and constitutes a trade secret of the Nortel
Companies and constitutes "Confidential Information" for the purposes of this
Agreement. The Parties further acknowledge that UniCAD Derivative Works
licensed hereunder are confidential information and constitute trade secrets of
UniCAD and CCT and constitute "Confidential Information" for the purposes of
this Agreement. A Party receiving Confidential Information shall hold it in
confidence and only make use of, or disclose, such Confidential Information as
permitted by this CBDS License Agreement. Except as expressly provided for
herein, no Party is granted any rights whatsoever in the Confidential
Information.
A Party receiving Confidential Information shall, during the full currency of
this CBDS License Agreement and for five (5) years thereafter hold secret and
not disclose, to any person (except to such of their employees and contractors
as are required to use the Confidential Information, and then only under
obligations of confidence on terms at least as restrictive as those contained
herein binding upon such employees and contractors) any of the Confidential
Information, except to Distributors and End-Users pursuant to Article 2 of this
CBDS License Agreement, provided such persons agree to obligations of confidence
on terms at least as restrictive as those contained herein.
The receiving Party shall not be bound by obligations of confidence with respect
to Confidential Information it receives, or any part thereof, which
(i) was known by the receiving Party prior to its disclosure by the
disclosing Party, as evidenced by its records;
(ii) was independently developed by the receiving Party, as evidenced by its
records;
(iii) was lawfully in the public domain at the time of its disclosure by the
disclosing Party, or thereafter becomes publicly available otherwise than
through a breach of the obligations of confidence described herein;
(iv) was disclosed to the receiving Party by a third party provided such third
party, or any other party from whom such third party received the
Confidential Information, is not in breach of any obligations of
confidence with respect of such Confidential Information; or
(v) is disclosed in response to a valid order or direction of a court or
other governmental body or any political subdivision thereof, but only to
the extent and for the purpose of such order or direction and only if the
receiving Party, to the extent possible, first notifies the disclosing
Party of such order and permits and reasonably assists the disclosing
Party in seeking an appropriate protective order.
The receiving Party shall not make or have made or permit to be made, any copies
of the Confidential Information other than those copies which are permitted
hereunder, and all such copies shall, upon reproduction by the receiving Party
or Distributor and whether or not in the same form or format as the Confidential
Information, contain the same proprietary and
Page 15 of 40
confidentiality notices or legends which appear on the Confidential Information
provided pursuant hereto.
In the case of a violation of this Article 11, the receiving Party shall
immediately take all reasonable steps requested by the disclosing Party to
prevent or remedy any such violations, with particular emphasis on preserving
the proprietary and confidential nature of the Confidential Information and any
patent, trade secret, copyright or other intellectual property right of the
Parties.
Notwithstanding the foregoing obligations to protect the Confidential
Information, the disclosing Party may immediately, upon learning of any possible
unauthorized use or disclosure thereof, seek injunctive relief against the
receiving Party or any third party, and provided that the disclosing Party
establishes that a breach of this Article 11 by the receiving Party has
occurred, such other Party hereby unequivocally consents to the granting of a
temporary restraining order or other injunctive relief to the extent reasonably
necessary to protect the disclosing Party's rights in the Confidential
Information, and such other Party shall fully cooperate with the disclosing
Party to protect its interests in such Confidential Information.
ARTICLE 12
FREEDOM OF DEVELOPMENT
Nothing in this CBDS License Agreement shall prevent Nortel Companies from
continuing to develop modifications to CBDS or Derivative Works thereof or to
develop other EDA software tools which may be similar to, complement, or replace
CBDS or Derivative Works thereof.
It is understood by all the Parties that each is entitled to develop products
incorporating functionality similar to that of CBDS and Derivative Works
thereof. Such products may be developed using any residual information,
concepts or ideas retained in a non-tangible form by employees of any Party
without need for further reference to the information received from the other
Party, whether written, stored in magnetic, electronic, or physical form, or
otherwise fixed, provided in so doing that no Party shall violate any
intellectual property rights of the others or their suppliers. The foregoing
rights to freely develop other products shall not diminish the restrictions
placed on Nortel in Article 2 hereof.
ARTICLE 13
REPRESENTATIONS & LIABILITY
Nortel warrants and represents to UniCAD and CCT that as of the Effective Date
it has the authority and capacity to enter into this CBDS License Agreement and
to undertake the obligations, and acquire the rights, set out in this CBDS
License Agreement on behalf of all Nortel Companies. UniCAD and CCT each
warrant and represent to Nortel that as of the Effective Date it has the
authority and capacity to enter into this CBDS License Agreement and
Page 16 of 40
to undertake the obligations, and acquire the rights, set out in this CBDS
License Agreement on behalf of all UniCAD Companies.
Except as provided herein, Nortel makes no representations in respect to, and
does not warrant, CBDS or any other material furnished to UniCAD pursuant
hereto, but shall furnish such in good faith to the best of its knowledge and
ability. WITHOUT RESTRICTING THE GENERALITY OF THE FOREGOING, NORTEL MAKES NO
REPRESENTATIONS OR WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR (EXCEPT AS SET FORTH BELOW) AS TO WHETHER OR NOT CBDS OR ANY OTHER
MATERIAL FURNISHED TO UniCAD PURSUANT HERETO, OR THE USE OF CBDS OR ANY SUCH
MATERIAL, MAY INFRINGE ANY PATENT, COPYRIGHT, TRADE SECRET, OR OTHER
INTELLECTUAL PROPERTY RIGHT OF ANY OTHER PERSON.
Notwithstanding the foregoing, Nortel represents and warrants to UniCAD that:
(i) to the best of Nortel's knowledge as it existed as of October 15, 1993,
as of October 15, 1993 CBDS did not infringe any patent or copyright or
misappropriate any trade secret of a third party;
(ii) no claims alleging any such infringement have been made against Nortel
prior to the Closing; and
(iii) Nortel is not aware of any basis for any such claims.
Nortel represents that to the best of its knowledge there is no conflicting
claim related to the rights granted hereunder.
Except for
(i) claims arising from a Party's breach of its obligations of confidence as
described herein;
(ii) claims arising from a Party's infringement of the intellectual property
rights of another Party or its Affiliate;
(iii) claims for bodily injury or tangible property damage[; and
(iv) claims arising from UniCAD's failure to maintain the standard or level of
support and maintenance services set out herein,
the total collective liability of each Party and its Affiliates to the other
Parties and their Affiliates for damages arising under this CBDS License
Agreement (whether in contract, tort or otherwise) shall not exceed the
cumulative aggregate amount payable or actually paid hereunder by Nortel to
UniCAD.
WITH THE EXCEPTIONS OF DAMAGES ARISING FROM THE BREACH OF OBLIGATIONS OF
CONFIDENCE DESCRIBED HEREIN AND FROM THE INFRINGEMENT OF INTELLECTUAL PROPERTY
RIGHTS OF A PARTY OR ITS
Page 17 of 40
AFFILIATE AND FROM UNICAD'S FAILURE TO MAINTAIN THE STANDARD OR LEVEL OF SUPPORT
AND MAINTENANCE SERVICES SET OUT HEREIN, NO PARTY TO THIS CBDS LICENSE AGREEMENT
SHALL BE LIABLE, WHETHER IN CONTRACT, TORT, OR OTHERWISE, FOR SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING LOST PROFITS, EVEN
IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND WHETHER OR
NOT ANY SUCH DAMAGES ARE CONSTRUED AS ARISING FROM A BREACH OF A CONDITION OF
THIS CBDS LICENSE AGREEMENT OR A FUNDAMENTAL TERM.
Page 18 of 40
ARTICLE 14
INDEMNITIES
UniCAD hereby indemnifies and saves Nortel Companies harmless from and against
all losses, liabilities, claims, damages, costs or expenses (including, without
limitation, reasonable legal fees and disbursements) suffered or incurred as a
result of or in connection with any claim or demand made or action taken or any
obligation or liability with respect to the termination by UniCAD of any UniCAD
employees who were, prior to October 15, 1993, employees of a Nortel Company.
ARTICLE 15
FORCE MAJEURE
No Party shall be in default or liable for any loss or damage resulting from
delays in performance or from failure to perform or comply with terms of this
CBDS License Agreement due to any causes beyond its reasonable control, which
causes include but are not limited to Acts of God or the public enemy, riots and
insurrections, war, accidents, fire, strikes and other labour difficulties
(whether or not the Party is in a position to concede to such demands),
embargoes, judicial action, lack of or inability to obtain export permits or
approvals, necessary labour, materials, energy, components or machinery, acts of
civil or military authorities.
ARTICLE 16
TERM AND TERMINATION
This CBDS License Agreement shall become effective upon the Effective Date and
shall continue in full force and effect until terminated as set forth herein.
Prior to Closing, this CBDS License Agreement shall have no force or effect.
Upon Closing, the Prior Agreement shall be terminated and shall have no further
force or effect, with the exception of those provisions continued therein which
are specifically deemed to survive termination, and this CBDS License Agreement
shall supersede and replace the Prior Agreement in its entirety.
In the event a UniCAD Company becomes insolvent or is the object of bankruptcy
or insolvency proceedings (other than involuntary proceedings that are fully
dismissed within forty-five (45) days from the commencement thereof), or makes
an assignment for the benefit of its creditors, or is placed in receivership or
liquidation, then its rights under this CBDS License Agreement shall immediately
terminate.
Other than a breach by UniCAD under Article 6 hereof relating to the provision
of support and maintenance services as set out in Schedule C, in the event any
Party breaches this CBDS License Agreement or fails, in any material respect, to
perform one or more of its material obligations hereunder, a non-breaching Party
may by written notice require the breaching Party to remedy such breach or
perform such obligation to the reasonable satisfaction of such
Page 19 of 40
non-breaching Party. If such breach has not been remedied or such obligation
performed within sixty (60) days (or within thirty (30) days for breach of
Article 11 obligation of confidence) of such notice, then such non-breaching
Party may, by written notice, and subject to Article 7, forthwith terminate this
CBDS License Agreement.
In the event this CBDS License Agreement is terminated by Nortel for any of the
reasons set out herein above, UniCAD shall arrange for the immediate delivery of
all then existing Maintenance Derivative Works which have not, as of the date of
such expiration or termination, yet been delivered to Nortel.
Notwithstanding any termination hereunder, the provisions of Article 11
CONFIDENTIAL INFORMATION, and the provisions of Article 13 LIABILITY, shall
survive the termination of this CBDS License Agreement.
ARTICLE 17
NOTICES
Except as otherwise provided herein, any notices or demands that are required by
law or under the terms of this CBDS License Agreement shall be given or made by
a Party in writing and shall be given by hand delivery, facsimile or similar
communication, or by certified or registered mail, and addressed to the
respective Parties set forth below. Such notices shall be deemed to have been
given in the case of facsimile or similar communications when delivered, and in
the case of certified or registered mail, five (5) days after the date when
mailed postage prepaid.
To CCT: Xxxxxx & Chyan Technology
0000 Xxxxx XxXxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx
X.X.X. 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
Copy to: Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California
U.S.A. 94306
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Page 20 of 40
To UniCAD: UniCAD, Inc.
0000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxx
XXXXXX X0X 0X0
Attention: Xxxxx XxXxxxxx
Facsimile: (000) 000-0000
To Nortel: Northern Telecom Limited
0000 Xxxxxxxx Xxxxxxxxx,
Xxxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Corporate Secretary
Facsimile: (000) 000-0000
Copy to: Nortel Technology
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Counsel
Facsimile: (000) 000-0000
The above addresses may be changed at any time by giving thirty (30) days prior
written notice.
In the event of a generally-prevailing labour dispute or other situation which
will delay or impede the giving of notice by any such means, in either the
country of origin or of destination, the notice shall be given by such specified
mode as will be most reliable and expeditious and least affected by such dispute
or situation.
ARTICLE 18
GENERAL PROVISIONS
This CBDS License Agreement shall not be assigned or transferred by any party
except with the prior written consent of the other parties. Notwithstanding the
foregoing:
(a) this CBDS License Agreement may be assigned by Nortel to any of Nortel's
Subsidiaries or Affiliates upon notice to the other Parties; and
(b) the Parties may transfer or assign their rights and obligations under this
CBDS License Agreement to a successor (not including a trustee in
bankruptcy) to all or substantially all of its business or assets relating
to this CBDS License Agreement whether by sale, merger, operation of law or
otherwise.
Page 21 of 40
The Parties recognize that the licensing or transfer of CBDS or the Derivative
Works thereof into certain countries may be subject to the prior specific
approval of the Governments of Canada or The United States of America, or
various agencies thereof, and international control organizations in which the
Governments of Canada or The United States of America participate, including in
particular the Free World Coordinating Committee (sometimes known as "CoCom").
Accordingly, UniCAD Companies and Distributors shall not license, transfer or
communicate Derivative Works of CBDS into any such country without receiving
such applicable prior specific approvals.
Nothing in this CBDS License Agreement shall be construed as requiring Nortel to
disclose CBDS, or to grant rights under licenses, which would violate any
confidentiality undertakings which it or its Subsidiaries or Affiliates have
towards third persons or which would violate any present or future law or decree
of any government or governmental officer or agency.
Nothing contained in this CBDS License Agreement shall be construed as:
(i) requiring Nortel to file any patent application, to secure any patent or
to maintain any patent in force;
(ii) constituting a warranty or representation by Nortel as to the validity or
scope of any patent licensed hereunder;
(iii) constituting a warranty or representation that any development or
licensing of CBDS by UniCAD Companies or Distributors hereunder will be
free from infringement of patents other than those under which and to the
extent to which licenses are granted hereunder;
(iv) constituting an agreement to bring or prosecute actions or suits against
third parties for infringements;
(v) conferring any right to use, in advertising, publicity or otherwise, any
name, trade name or trademark, or any contraction, abbreviation or
simulation thereof; or
(vi) conferring by implication, estoppel or otherwise upon any Party any
license or other right under any patent, except the licenses and rights
expressly granted hereunder.
The failure of any Party to give notice to any other Party of the breach or non-
fulfillment of any term, clause, provision or condition of this CBDS License
Agreement shall not constitute a waiver thereof, nor shall the waiver of any
breach or non-fulfillment of any term, clause, provision or condition of this
CBDS License Agreement constitute a waiver of any other breach or non-
fulfillment of that or any other term, clause, provision or condition of this
CBDS License Agreement.
This CBDS License Agreement sets forth the entire agreement and understanding
between the Parties with respect to the licensing of CBDS and supersedes and
cancels all previous negotiations, agreements, commitments, and writings in
respect to CBDS. The attached Schedules A through D, as may be modified in
accordance with the terms hereof, form part of this CBDS License Agreement. No
Party hereto shall be bound by any term, clause, provision or
Page 22 of 40
condition save as expressly provided in this CBDS License Agreement or as duly
set forth on or subsequent to the Effective Date in writing and signed by duly
authorized officers of the Parties.
Nothing in this CBDS License Agreement shall be construed as establishing or
implying any partnership between the Parties hereto, and, except where expressly
indicated, nothing in this CBDS License Agreement shall be deemed to constitute
any Party hereto as the agent of another Party hereto or authorize any Party
hereto to incur any expenses on behalf of any other Party hereto or to commit
any other Party hereto in any way whatsoever, without obtaining the other
Party's prior written consent.
Terms, conditions and general terms of this CBDS License Agreement shall be held
in confidence by the Parties and only disclosed as may be agreed to by all
Parties or as may be required to meet securities disclosure or export permit
requirements.
Page 23 of 40
Schedule A
Listing of the Software Programs and Documentation that Comprise CBDS
This list was prepared July 7, 1993.
[** ]
**Confidential treatment has been requested for certain portions of this
document.
Page 24 of 40
Schedule B
Third Party Components
The plotter driver software packages supplied to BNR by Calcomp, Versatec, and
HP.
EDIF Software, as available from University of California, Berkeley
Page 25 of 40
Schedule C
Core Support Services
Level Of Service Metrics
Hotline Response
. Calls to/from UniCAD with ESN; Messages can be left 24 hours/day 7
days/week. 8:00am to 6:00pm EST, 5 days/week excluding holidays and
Christmas break, hotline will be covered by people;
. All current CBDS/DDS tools including supported AppMan packages. All non-
simulation Viewlogic tools will be handled as best as possible (if no quick
resolution, it will be passed off to Viewlogic hotline). Any issues related
to migration will be covered.
. If call is answered by a person, that person must be knowledgeable (i.e.
able to understand the area of concern).
. If message is left, call will be returned by a knowledgeable person within
4 business hours.
Bug Resolution
Severity 1
. No workaround; User is stopped dead in his task.
. UniCAD will work full-time until a workaround/patch is found. Target is for
a patch to be delivered to BNK distribution group by the end of the next
full business day.
. Fix will be delivered to all customers in the next release.
Severity 2
. Impacts a major function.
. Target is for a workaround to be supplied to user by the end of the next
full business day.
. Selected fixes will be delivered to all customers in the next release.
Severity 3
. Annoyance; not critical to design flow.
. Response supplied to user within 5 business days.
. Selected fixes will be delivered to all customers in the next major
release.
Maintenance Derivative Works
Releases
. All severity 1 problems reported by BNR/NT users must be included in the
next release. Any severity 1 problem reported between development cutoff
and delivery date may be considered for the release.
. Selected severity 2 problems reported by BNR/NT users will be included in
the next release.
. Selected severity 3 problems reported by BNR/NT users will be included in
the next major release.
. At least 1 major release per year and 1 minor release will be given per
year (not more than once per quarter).
Page 26 of 40
Major Releases
. Hotline support will be provided for the current release and the last minor
release of the preceding major release.
. Development support (bug fixes) will be provided only for the current
release.
Hardware/OS Level Support
. Windows NT Q4 1996 Analysis related tools only
. SUN 4.1.3 Current
. Solaris 2.3 Current
. HP700 9.03 Current
. New Plotters Negotiable
UniCAD will support successive OS on these platforms at Nortel's request
provided a significant faction of the Nortel community (>20%) requires that
platform.
New Feature & Enhancement Introduction
. All enhancement requests should be responded to within 72 hours.
. UniCAD must supply BNR/NT liaison with a list of requested enhancements &
features on a quarterly basis.
. BNR/NT liaison will prioritize the feature requests for BNR/NT.
. After every major release, UniCAD will review all outstanding enhancement
requests and will issue a new response for each if there is any change in
status.
. BNR/NT will participate as beta users during the Beta period of all major
releases as long as beta plans are received by UniCAD. If the feature is
requested by BNR/NT, the liaison must find BNR/NT beta sites for the
feature.
Quality
. The target for GR software delivered to BNR/NT is 1 software/documentation
problem per 1000 connect hours of BNR/NT usage. In the first 3 months after
GR, there may be a slight increase BUT the target is again 1
software/documentation problem per 1000 connect hours 3 months after GR.
. UniCAD will make BNR/NT problem statistics available to BNR/NT liaison
quarterly.
Support and maintenance of BS2DD Bridge Interface
UniCAD must maintain the BS2DD component of CBDS to the same level of
service metrics as applicable to all the other components of CBDS, and
must also ensure that BS2DD remains compatible for use with all new
versions of (and any replacements therefor) Board Station and CBDS.
Page 27 of 40
Schedule D
September 6, 1995
Support Services Fees
With respect to Year 1 through 5, Nortel's obligation to pay UniCAD for Support
Services set out in Schedule C shall be determined as follows:
(i) The minimum Support Payment to UniCAD shall be [** ] (US)
per year.
(ii) The Support Payment for a given year shall be determined via Table 1 & 2
below no later than September 15 of the preceding year.
(iii) A Gross Level of Business shall be derived by adding the Gross Level of
Maintenance to the Gross Level of New Purchases.
(iv) The Gross Level of Maintenance shall be derived by adding the products
of the volume of each tool group desired by Nortel and its corresponding
Maintenance Baseline. The Maintenance Baseline for a tool group shall be
the value indicated in Table 1, or the current maintenance list price,
which ever is the least.
(v) The Gross Level of New Purchases shall be derived by adding together the
list price of each additional New Product Derivative Work committed to
be purchased by Nortel.
(vi) The Support Payment for a given year shall be derived by reducing the
Gross Level of Maintenance by the Maintenance Discount corresponding to
the Gross Level of Business (see Table 2).
(vii) License fees for each additional New Product Derivative Work shall be
derived by reducing the list price by the Purchase Discount
corresponding to the Gross Level of Business (see Table 2).
(viii) Where a UniCAD Company typically offers its customers free maintenance
services for a period of time following the licensing of a New Product
Derivative Work, UniCAD shall provide Nortel with free maintenance
services for the same period of time following Nortel's licensing of
such New Product Derivative Work. Annual Support Payments for additional
New Product Derivative Works licensed by Nortel shall be derived by
prorating the current maintenance list price for such additional New
Product Derivative Works over the period of the year during which Nortel
is not entitled to free maintenance services and then reducing the
prorated amount by the Maintenance Discount corresponding to the Gross
Level of Business (see Table 2).
(ix) Tool usage needs during a year above the levels committed to in
September of the preceding year will use the same Maintenance Discount
and Purchase Discount. Additional Support Payment(s) will be made as
additional New Product Derivative Works are licensed.
(x) Payments of one quarter of the total annual Support Payment will be made
January, April, July and November. The first payment due November 1996
for the period October 15, 1996 through December 31, 1996 will be
[** ] (US) for support on unlimited tool usage.
**Confidential treatment has been requested for certain portions of this
document.
Page 28 of 40
Table 1: Maintenance Baseline (in U.S. dollars)
Tool Group Maintenance Baseline
---------------------------------------------------------------
Comprehensive Seat [** ]
Schematic [** ]
UniRule [** ]
UniBuild [** ]
A Comprehensive Seat contains all UniCAD tools except Schematic
and ShopView
Table 2: Discount Schedule (Gross Level of Business in thousands of U.S.
dollars)
Gross Level of Business Maintenance Discount Purchase Discount
(non-discounted)
--------------------------------------------------------------------------------
1,000 - 1,499 [** ] [** ]
1,500 - 1,749 [** ] [** ]
1,750 - 1,999 [** ] [** ]
2,000 - 2,249 [** ] [** ]
2,250 - 2,499 [** ] [** ]
2,500 - 2,749 [** ] [** ]
>2,750 [** ] [** ]
-
Where the annual Support Payment is calculated as greater than [** ]
(US)), support for CBDS and New Product Derivative Works tools shall be
on an Unlimited Usage Basis (i.e. Nortel's annual Support Payment for CBDS
and New Product Derivative Works is capped at [** ] (US))
regardless of the number of seats in use).
The Gross Level of Business includes all maintenance of CBDS and New Product
Derivative Works and all purchases of New Product Derivative Works (committed to
by September 15 of the preceding year) or by the actual preceding year's Gross
Level of Business, whichever is greater.
At Nortel's option, support for unlimited use of Schematic (FUNDES) tool
available for the cost of [** ] per annum.
At Nortel's option, support for unlimited use of the ShopView and PDMView
components of UniCAD Derivative Works may be purchased at a cost of [** ]
per annum.
All figures are in US Dollars.
All seats are considered network floating seats.
**Confidential treatment has been requested for certain portions of this
document
Page 29 of 40
Schedule E
Extended Support Services
Training
. UniCAD will give a soft copy of the master training material to BNR/NT to
be used solely for BNR/NT use. The UniCAD copyright notice must remain on
the material.
. UniCAD will provide student evaluation forms for all courses taken by
BNR/NT users.
. The BNR/NT liaison will help specify the contents of the evaluation forms.
. Results of the evaluation form will be forwarded to the BNR/NT liaison.
. UniCAD will train designated BNR/NT trainers in current course material as
required.
. BNR/NT may alter the material for their own use. BNR/NT will supply UniCAD
with a soft copy of all changes they make for training BNR/NT users and as
a reference for the hotline.
Documentation
. Must be 100% on-line with hard copy for installation guides.
. Fixes/Enhancements must be documented and identified on-line in the
release in which they appear.
. On-line release notice is required for each maintenance and major release.
. Significant errors/omissions will be treated depending on its severity to
the user.
. Application notes, bulletins and/or newsletters soft copies will be
delivered to BNR Operations group for distribution.
Page 30 of 40
Schedule F
BS2DD Bridge Interface
Source and object code listings of a program known as BS2DD, which enable the
user thereof to move design files between Mentor Graphics' Board Station product
and CBDS, and all design and user documentation therefor in the possession of
BNR as of the BS2DD Effective Date.
A listing of the software programs and documentation that comprise BS2DD
SOFTWARE:
--------
Software to be furnished to Licensee hereunder shall be comprised of the
following:
(a) Source code for the Board Station to design data translator
(b) Source code for Board Station netlist extractor
(c) Shell script(s) to control execution
(d) Source code for supporting the translator (to include builds,
configuration files)
DOCUMENTATION:
-------------
Documentation to be furnished to Licensee hereunder shall be comprised of
the following:
(a) a BS2DD User and Reference Guide. This will be an internal BNR
document which will include the following:
- Description of control flow through the main script, bs2dd
- A discussion of the sequence of execution including the
applications used, such as LAYOUT and sprig, and why they
are used
- Assumptions and/or requirements for execution such as
environmental variables
- Restrictions and/or limitations
- Files used and created
- Description of the format of the files: bs2dd.layers & pin map
file
- Hi-level description of the netlist creation module, bs2cbdsnl,
including:
- input files and parameters
- output files
- restrictions and/or limitations
Page 31 of 40
- Hi-level description of the dd creation module, bs2dd.out,
including:
- input files and parameters
- configuration file bs2dd.config
- restrictions and/or limitations
- discussion of error messages
- general description of what entities in Board Station
translate into what in the dd file, with assumptions made
(b) High-level roadmap and documentation of the following files including
files used for storing major data structures:
- pcb-structs2.h general pcb structures, such as net & gates
- ag-intf.h structures created from the ASCII geometry file
- nf-intf.h structures created from the neutral file
- bs2dd.h cross-reference data structures for linking a Board
Station entity to a dd file index
Note: File format descriptions will be limited to the files specifically cited
above. The description of standard Board Station files is supplied with Board
Station documentation. The description of the dd file is supplied with UniCAD
CDS documentation.
Page 32 of 40
Schedule G
Items Excluded from Optional Additional Nortel Software
The following items may have been furnished by Nortel to UniCAD prior to the
Effective Date. These items do not constitute Optional Additional Nortel
Software as defined in Article 4 hereof. This Agreement does not convey any
rights whatsoever in the following items.
1.0 Optimized Placement Tool (a.k.a. MDO)
1.1 MDO Base Technology
1.1.1 Placement Perturbation Algorithm
1.1.2 Artificial Intelligence Framework
(Simulated Annealing based)
1.2 Cost Functions# (analysis engines)
1.2.1 Routing Density Analysis
1.2.2 Logic Length Minimization
1.2.3 Manufacturing Clearance
1.2.4 Interconnect Delay
1.2.5 Ground Bounce Analysis (see 2.0)
1.2.6 Clique function
2.0 Simultaneous Switching Noise - SSN (a.k.a. Ground Bounce)
2.1 Component Level
2.1.1 SSN Estimation
2.1.2 Optimization of signal to pin mapping & SSN estimation.
Optimization engine same as with 1.1.2.
2.2 Board Level
2.2.1 SSN Estimation
2.2.2 Cost function within placement optimizer (see 1.2 above)
3.0 RLGCcalc Tool
3.1 Generation of non-linear RLGC matrix for TLM analysis of
multiple, non-planar transmission lines.
3.2 Tool resides outside of UniCAD framework. Tool written in C and
TCL/TK (platform independent).
Page 33 of 40
This CBDS License Agreement shall be construed in accordance with and governed
by the laws of the Province of Ontario and the federal laws of Canada applicable
therein.
IN WITNESS WHEREOF, the Parties hereto have signed and executive this CBDS
License Agreement on the date first above mentioned.
Northern Telecom Limited UniCAD, Inc.
By: By:
------------------------------ ------------------------------
G.A. Sakus
Title: Senior Vice-President Title:
---------------------------
Date: Date:
---------------------------- ----------------------------
By: Xxxxxx & Chyan Technology, Inc.
------------------------------
X.X. Xxxxx
Title: Assistant General Counsel, By:
------------------------------
Technology Law and Licensing
Date: Title:
---------------------------- ---------------------------
Date:
----------------------------
Page 34 of 40
Exhibit J
TERMINATION AGREEMENT
---------------------
TERMINATION AGREEMENT dated as of July 19, 1996, by and between
________________ and UniCAD, Inc., a Massachusetts corporation, and UniCAD
Canada, Ltd., a corporation organized under the laws of Ontario, Canada
(collectively "UniCAD").
WHEREAS, _____________ and UniCAD entered into an Agreement dated as of
July 25, 1994 whereby _____________ terminated his relationship with UniCAD as
an employee and officer of UniCAD and _____________ was entitled to certain
severance payments (the "Severance Agreement");
WHEREAS, UniCAD and Xxxxxx & Chyan Technology, Inc., a California
corporation ("CCT"), have entered into an Agreement and Plan of Reorganization
dated as of July 22, 1996 whereby a wholly-owned subsidiary of CCT ("Newco")
will merge with and into UniCAD in a reverse triangular merger with UniCAD to be
the surviving corporation and whereby all outstanding common stock of UniCAD
will be converted into common stock of CCT, and CCT will assume all outstanding
options to purchase shares of common stock of UniCAD (the "Merger");
WHEREAS, it is a condition of the Merger that this Agreement be executed
and the parties hereto agree that it is in their respective best interests that
the Severance Agreement be terminated effective as of the closing date of the
Merger;
NOW, THEREFORE in consideration of the foregoing and of the mutual promises
and covenants contained herein, the parties hereby agree as follows:
1. Termination and Waiver of Agreement. The parties acknowledge and agree
-----------------------------------
that the Severance Agreement and each of the agreements, if any, attached as an
exhibit to the Severance Agreement, are hereby terminated and of no further
force and effect, and that all obligations of UniCAD under the Severance
Agreement are hereby terminated and canceled, provided that the Release executed
by _____________ and the resignation(s) executed by _____________ shall continue
in full force and effect.
2. Further Assurances. Each of the parties agree that they shall at any
------------------
time and from time to time as may reasonably be requested by the other parties
hereto, execute and deliver such further documents and instruments and take such
further actions as may be requested to effectuate the intent and purpose of this
Agreement.
3. Effectiveness. This Agreement shall only be effective upon, and
-------------
subject to, the closing of the Merger as described in the recital above.
4. Miscellaneous.
-------------
a. Applicable Law. This Agreement shall be construed, governed,
--------------
interpreted and applied in accordance with the internal laws of the Commonwealth
of Massachusetts.
b. Entire Agreement. The parties hereto acknowledge that this
----------------
Agreement sets forth the entire agreement and understanding of the parities
hereto as to the subject matter hereof, and shall not be subject to any change
or modification except by the execution of a written instrument subscribed to by
the parties hereto.
c. Waiver of or Modification to the Agreement. The failure of either
------------------------------------------
party to assert a right hereunder or to insist upon compliance with any term or
condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by the
other party.
d. Counterpart Signatures. This Agreement may be executed in any
----------------------
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first written above.
UniCAD, Inc.
By:
--------------------------------
Title:
-----------------------------
UniCAD Canada Ltd.
By:
--------------------------------
Title:
-----------------------------
-----------------------------------
Print Name
-----------------------------------
Signature
3
Exhibit 2.7A
CERTIFICATE OF OFFICERS
OF XXXXXX & CHYAN TECHNOLOGY, INC.
AND
CCT ACQUISITION CORP.
The undersigned officers of Xxxxxx & Chyan Technology, Inc., a Delaware
corporation ("CCT") and its wholly-owned subsidiary, CCT Acquisition Corp., a
Massachusetts corporation ("CCT Sub"), on behalf of the respective managements
of CCT and CCT Sub, after consulting with legal counsel and financial auditors
regarding the meaning of and the factual support for the following
representations, in connection with the proposed merger of CCT Sub with and into
UniCAD, Inc., a Massachusetts corporation ("UniCAD") in a statutory merger and
related transactions (the "Merger") pursuant to that certain Agreement and Plan
of Reorganization by and between CCT and UniCAD dated as of July 22, 1996, (the
"Plan of Reorganization"), and Exhibits thereto including, but not limited to,
the Agreement of Merger, with UniCAD surviving the Merger, hereby represent that
as of the time this certificate is executed, the following facts are now true
and will continue to be true as of the Effective Time and Closing of the Merger
and thereafter where relevant:
1. CCT Sub will be merged with and into UniCAD in accordance with the
relevant statutory merger provisions of Massachusetts corporate law, and in the
transaction the stockholders of UniCAD will receive solely voting Common Stock
of CCT (except for cash paid to UniCAD stockholders perfecting appraisal rights
as required by the Massachusetts Business Corporation Law or cash received in
lieu of fractional shares) in exchange for UniCAD's outstanding Common Stock
("UniCAD Stock"). Thus, except as set forth in the preceding sentence, CCT
intends that no consideration other than CCT voting Common Stock be paid or
received (directly or indirectly, actually or constructively) for UniCAD Stock.
2. The payment of cash by CCT in lieu of issuing fractional shares of
CCT voting Common Stock is solely for the purpose of avoiding the expense and
inconvenience to CCT of issuing fractional shares and does not represent
separately bargained-for consideration. The CCT fractional share interests to
which each UniCAD stockholder may be entitled in the Merger will be aggregated
so that no UniCAD stockholder will receive cash in an amount which would equal
or exceed, in the aggregate, the value of one whole share of CCT voting Common
Stock.
3. The total fair market value of all consideration other than CCT
voting Common Stock received by UniCAD stockholders in exchange for their UniCAD
Stock in the Merger (including, without limitation, cash paid to UniCAD
stockholders perfecting appraisal rights and cash paid in lieu of fractional
shares) will be less than ten percent (10%) of the aggregate fair market value
of UniCAD Stock outstanding immediately prior to the Merger.
4. On the Effective Date of the Merger, the fair market value of the
CCT voting Common Stock and other consideration received by each UniCAD
stockholder will be
approximately equal to the aggregate fair market value of the UniCAD Stock
surrendered in exchange therefor.
5. There is no intercorporate indebtedness existing between CCT and
UniCAD or between CCT Sub and UniCAD that was issued or acquired, or will be
settled, at a discount.
6. None of the payments designated as compensation to be received by
any stockholder of UniCAD will be separate consideration for, or allocable to,
any of their shares of UniCAD Stock; the compensation which might be paid to any
stockholder of UniCAD will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's length for
similar services; and none of the shares of CCT voting Common Stock to be
received by any stockholder of UniCAD will be separate consideration for, or
allocable to, any employment agreement, consulting agreement or any covenants
not to compete or otherwise for the performance of services.
7. Neither CCT nor CCT Sub owns, directly or indirectly, nor have
they owned during the past five years, directly or indirectly, any stock of
UniCAD.
8. Prior to the transaction, CCT will control CCT Sub within the
meaning of (S) 368(c) of the Internal Revenue Code of 1986, as amended (the
"Code").
9. Neither CCT nor CCT Sub has disposed of any assets or declared a
special dividend as part of the Merger.
10. Following the Merger, UniCAD will continue its historic business
or it will use a significant portion of such assets in a business.
11. CCT has no present plan or intention to liquidate UniCAD, to
merge UniCAD with or into another corporation, to sell or otherwise dispose of
any of the stock of UniCAD, or to cause UniCAD to sell or otherwise dispose of
any of its assets or any of the assets acquired from CCT Sub in the Merger,
except for dispositions made in the ordinary course of business or transfers
described in (S) 368(a)(2)(C) of the Code.
12. CCT has no plan or intention to cause UniCAD to issue additional
shares of its stock that would result in CCT losing control of UniCAD within the
meaning of (S) 368(c) of the Code.
13. CCT and CCT Sub will pay their respective expenses, if any,
incurred in connection with the Merger as contemplated by the Agreement;
provided, however, that to the extent any expenses relating to the merger (or
-------- -------
the "plan of reorganization" within the meaning of Treas. Reg. (S) 1.368-1(c)
with respect to the Merger) are funded directly or indirectly by a party other
than the incurring party, such expenses will be within the guidelines
established in Revenue Ruling 73-54, 1973-1 C.B. 187.
14. Neither CCT nor CCT Sub is an "investment company" within the
meaning of (S) 368(a)(2)(F) of the Code.
-2-
15. Neither CCT nor CCT Sub have any current plans or intentions to
reacquire any of the CCT voting Common Stock issued in the Merger.
16. CCT and CCT Sub are authorized to make all of the representations
set forth herein.
The undersigned recognizes that stockholders of, counsel to and accountants
for UniCAD and counsel to and auditors for CCT and CCT Sub will rely upon the
foregoing representations in evaluating the tax consequences of the Merger. The
undersigned understands that counsel to UniCAD has not acted as counsel to the
undersigned with respect to any matter related to the Merger. The undersigned
has not relied on UniCAD or its counsel with respect to any legal matter related
to the Merger or its tax consequences including, without limitation, any U.S. or
Canadian federal tax consequences.
Very truly yours,
XXXXXX & CHYAN TECHNOLOGY, INC.
a Delaware corporation
-----------------------------------
Xxxxxx X. Xxxxx
Cheif Financial Officer
CCT ACQUISITION CORP.
a Massachusetts corporation
-----------------------------------
Xxxxxx X. Xxxxx
President, Treasurer and Clerk
-3-
Exhibit 2.7B
CERTIFICATE OF OFFICER
OF UNICAD, INC.
The undersigned officer of UniCAD, Inc., a Massachusetts corporation
("UniCAD"), on behalf of the management of UniCAD, after consulting with legal
counsel and financial auditors regarding the meaning of and the factual support
for the following representations, in connection with the proposed merger of a
wholly-owned subsidiary ("Newco") of Xxxxxx & Chyan Technology, Inc., a Delaware
corporation ("CCT"), with and into UniCAD, in a statutory merger and related
transactions (the "Merger") pursuant to that certain Agreement and Plan of
Reorganization by and between CCT and UniCAD dated as of July 22, 1996, (the
"Plan of Reorganization"), and Exhibits thereto including, but not limited to,
the Agreement of Merger, with UniCAD surviving the Merger, hereby represents
that as of the time this certificate is executed, the following facts are now
true and will continue to be true as of the Effective Time and Closing of the
Merger and thereafter where relevant:
1. UniCAD's principal reasons for participating in the Merger are
bona fide business reasons.
2. Immediately following the Merger, UniCAD will hold at least ninety
percent (90%) of the fair market value of the net assets and at least seventy
percent (70%) of the fair market value of the gross assets held by UniCAD
immediately prior to the Merger. For the purpose of determining the percentage
of the net and gross assets held by UniCAD immediately following the Merger for
purposes of this representation, the following assets will be treated as
property held by UniCAD immediately prior to but not subsequent to the Merger:
(i) assets disposed of by UniCAD prior to the Merger and in contemplation of the
Merger (including without limitation any asset disposed of by UniCAD, other than
in the ordinary course of business, during the period ending on the Effective
Time of the Merger and beginning with the commencement of negotiations (whether
formal or informal) between UniCAD and CCT regarding the Merger (the "Pre-Merger
Period")), (ii) assets used by UniCAD to pay stockholders perfecting appraisal
rights or other expenses or liabilities incurred in connection with the Merger,
and (iii) assets used to make distributions (except for regular and normal
dividends), redemption or other payments in respect of UniCAD Common Stock or
rights to acquire such stock (including payments treated as such for tax
purposes) that are made in contemplation of the Merger or related thereto.
3. UniCAD has not disposed of any assets or declared a special
dividend as part or in contemplation of the Merger.
4. The total fair market value of all consideration other than CCT
voting Common Stock received by UniCAD stockholders in exchange for their UniCAD
Common Stock ("UniCAD Stock") in the Merger (including, without limitation, cash
paid to UniCAD stockholders perfecting appraisal rights and cash paid in lieu of
fractional shares) will be less than ten percent (10%) of the aggregate fair
market value of UniCAD Stock outstanding immediately prior to the Merger.
5. The liabilities of UniCAD and the liabilities to which the assets
of UniCAD are subject were incurred by UniCAD in the ordinary course of its
business.
6. The fair market value of UniCAD's assets on the Effective Date
which are transferred to CCT will exceed the aggregate liabilities of UniCAD
plus the amount of liabilities, if any, to which such assets are subject.
7. UniCAD is not an "investment company" within the meaning of
(S)368(a)(2)(F) of the Internal Revenue Code of 1986, as amended, (the "Code").
8. To the best of UniCAD's knowledge, there is no plan or intention
on the part of any UniCAD stockholder (a "Plan") to engage in a sale, exchange,
transfer, distribution (other than distributions by a partnership to its
partners), pledge, disposition or any other transaction which would result in a
direct or indirect disposition (a "Sale") of shares of CCT voting Common Stock
to be issued to UniCAD stockholders in the Merger, which shares would have an
aggregate fair market value, as of the Effective Date of the Merger, in excess
of fifty percent (50%) of the aggregate fair market value, immediately prior to
the Merger, of all outstanding shares of UniCAD stock. For purposes of this
representation, shares of UniCAD stock (or the portion thereof) (i) with respect
to which a UniCAD stockholder receives consideration in the Merger other than
CCT voting Common Stock (including, without limitation, cash received pursuant
to the exercise of dissenters' rights and cash received in lieu of fractional
shares) and/or (ii) with respect to which a sale occurs during the Pre-Merger
Period, shall be considered shares of outstanding UniCAD Stock exchanged for CCT
voting Common Stock in the Merger and then disposed of pursuant to a Plan.
9. The payment of cash by CCT in lieu of issuing fractional shares
of CCT voting Common Stock is solely for the purpose of avoiding the expense and
inconvenience to CCT of issuing fractional shares and does not represent
separately bargained-for consideration. The CCT fractional share interests to
which each UniCAD stockholder may be entitled in the Merger will be aggregated
so that no UniCAD stockholder will receive cash in an amount which would equal
or exceed, in the aggregate, the value of one whole share of CCT voting Common
Stock.
10. Except with respect to (i) payments of cash to UniCAD
stockholders perfecting appraisal rights; and (ii) payments of cash in lieu of
fractional shares of CCT voting Common Stock, one hundred percent (100%) of the
UniCAD Stock outstanding immediately prior to the Merger will be exchanged
solely for CCT voting Common Stock. Thus, except as set forth in the preceding
sentence, UniCAD intends that no consideration be paid or received (directly or
indirectly, actually or constructively) for UniCAD Stock other than CCT voting
Common Stock.
11. On the Effective Date of the Merger, the fair market value of the
CCT voting Common Stock and other consideration received by each UniCAD
stockholder will be approximately equal to the aggregate fair market value of
the UniCAD Stock surrendered in exchange therefor.
12. Following the Merger, UniCAD will not have outstanding any
warrants, options, convertible securities or any other type of right pursuant to
which any person could acquire stock in UniCAD that, if exercised or converted,
would affect CCT's acquisition or retention of control of UniCAD within the
meaning of (S) 368(c) of the Code.
13. UniCAD and the stockholders of UniCAD will each pay separately
its or their own expenses in connection with the Merger as contemplated by the
Agreement; provided,
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however, that to the extent any expenses relating to the Merger (or the "plan of
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reorganization" within the meaning of Treasury Regulation (S) 1.368-1(c) with
respect to the Merger) are funded directly or indirectly by a party other than
the incurring party, such expenses will be within the guidelines established in
Revenue Ruling 73-54, 1973-1 C.B. 187.
14. There is no intercorporate indebtedness existing between CCT and
UniCAD or between Newco and UniCAD that was issued, acquired, or will be settled
at a discount.
15. None of the payments received by any stockholder of UniCAD from
UniCAD which are designated as compensation are actually separate consideration
for, or allocable to, any of their shares of UniCAD Stock; the compensation paid
by UniCAD to any stockholder of UniCAD is for services actually rendered and is
commensurate with amounts paid to third parties bargaining at arm's length for
similar services; none of the shares of CCT voting Common Stock to be received
in the Merger by any stockholder of UniCAD is intended to be separate
consideration for, or allocable to, any employment agreement, consulting
agreement, any covenants not to compete or otherwise for the performance of
service.
16. UniCAD is not under the jurisdiction of a court in a Title 11 or
similar case (within the meaning of (S) 368(a)(3)(A) of the Code).
17. UniCAD is authorized to make all of the representations set forth
herein.
The undersigned recognizes that stockholders of, counsel to and accountants
for UniCAD and counsel to and auditors for CCT and Newco will rely upon the
foregoing representations in evaluating the tax consequences of the Merger. The
undersigned understands that counsel to CCT and Newco have not acted as counsel
to the undersigned with respect to any matter related to the Merger. The
undersigned has not relied on CCT, Newco or its counsel with respect to any
legal matter related to the Merger or its tax consequences including, without
limitation, any U.S. or Canadian federal tax consequences.
Very truly yours,
UniCAD, Inc.
a Massachusetts corporation
By:
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Xxxxx XxXxxxxx
President and Chief Executive Officer
Dated: August ___, 1996
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