EXHIBIT 2
FORM OF
AGREEMENT
THIS AGREEMENT (this "AGREEMENT"), dated as of ____________ ___, 2005, is
entered into by and between Cadence Design Systems, Inc., a Delaware corporation
("PARENT"), and Scioto River Ltd., an Israeli corporation and wholly-owned
subsidiary of Parent ("ACQUISITION"), on the one hand, and _________________
("SHAREHOLDER"), on the other hand.
RECITALS
WHEREAS, concurrently herewith, Parent, Acquisition, and Verisity Ltd., an
Israeli corporation (the "COMPANY"), have entered into an Agreement and Plan of
Merger, of even date herewith (as such agreement may hereafter be amended from
time to time in conformity with the provisions thereof, the "MERGER AGREEMENT"),
pursuant to which Acquisition will merge with and into the Company and the
Company shall be the surviving corporation and become a wholly-owned subsidiary
of Parent (the "MERGER");
WHEREAS, Shareholder is the beneficial owner (as defined below) of
___________________ (__________) outstanding ordinary shares, NIS 0.01 par value
per share, of the Company (such shares, together with all other outstanding
shares of capital stock or other voting securities of the Company with respect
to which Shareholder has beneficial ownership as of the date of this Agreement,
and any shares of capital stock or other voting securities of the Company,
beneficial ownership of which is directly or indirectly acquired after the date
hereof, including, without limitation, shares received pursuant to any stock
splits, stock dividends or distributions, shares acquired by purchase or upon
the exercise, conversion or exchange of any option, warrant or convertible
security or otherwise, and shares or any voting securities of the Company
received pursuant to any change in the capital stock of the Company by reason of
any recapitalization, merger, reorganization, consolidation, combination,
exchange of shares or the like (but not including unexercised options to
purchase ordinary shares), are referred to herein as the "SHAREHOLDER SHARES");
and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement and in consideration of the transactions contemplated by the Merger
Agreement, Parent and Acquisition have requested that Shareholder agree, and
Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Definitions. For purposes of this Agreement, terms not defined
herein but used herein and defined in the Merger Agreement shall have the
meanings set forth in the Merger Agreement, unless the context clearly indicates
otherwise.
2. Undertaking. Shareholder hereby confirms to Parent and Acquisition
that, at any meeting of the Company's shareholders, however called, Shareholder
shall appear at each such meeting, in person or by proxy, or otherwise cause all
Shareholder Shares to be counted as present thereat for purposes of establishing
a quorum, and Shareholder shall vote, or cause to be voted (or in connection
with any written consent of the Company's shareholders in lieu of any such
meeting, act, or cause to be acted, by written consent) with respect to all
Shareholder Shares that Shareholder is entitled to vote or as to which
Shareholder has the right to direct the voting, as of the relevant record date,
(i) in favor of approval of the Merger Agreement and the transactions
contemplated thereby, (ii) against any proposal that would result in a breach by
the Company of the Merger Agreement, and (iii) against (A) any Third Party
Acquisition, whether or not it constitutes a Superior Proposal, (B) the election
of a group of individuals to replace a majority or more of the individuals
presently on the Board of Directors of the Company; provided that if one or more
individuals presently on the Board of Directors withdraws his or her nomination
for reelection at any meeting of shareholders for the election of directors,
Shareholder may vote for a replacement director nominated by the Company's Board
of Directors, or (C) any other action which is intended, or could reasonably be
expected to impede, interfere with, delay, postpone or materially adversely
affect the Merger or any other transaction contemplated by the Merger Agreement.
3. Irrevocable Proxy.
(a) Shareholder has executed a proxy in the form of Exhibit A (the
"IRREVOCABLE PROXY") appointing Xxxxxx Xxxxxxx (the "PROXY HOLDER"), with full
power of substitution, as its true and lawful proxy and attorney-in-fact to vote
or caused to be voted at any meeting (and any adjournment or postponement
thereof) of the Company's shareholders called for purposes of considering
whether to approve the Merger Agreement and transactions contemplated thereby,
any Third Party Acquisition or any other transaction, proposal or act described
in Section 2 hereof, or to execute a written consent of shareholders in lieu of
any such meeting with respect to (if so permitted), all Shareholder Shares that
Shareholder is entitled to vote or as to which Shareholder has the right to vote
as of the relevant record date in favor of the approval of the Merger Agreement
and transactions contemplated thereby and against any Third Party Acquisition or
any other proposal or action described in Section 2(iii)(B) or (C) hereof.
(b) The proxy and power of attorney granted pursuant to the
Irrevocable Proxy shall be irrevocable during the term of this Agreement, shall
be deemed to be coupled with an interest sufficient in law to support an
irrevocable proxy and shall revoke all prior proxies granted by Shareholder with
respect to the Shareholder Shares. Shareholder shall not grant to any person any
proxy that conflicts with the proxy granted herein, and any attempt to do so
shall be void. The power of attorney granted pursuant to the Irrevocable Proxy
is a durable power of attorney and shall survive the death or incapacity of
Shareholder.
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(c) If Shareholder fails for any reason to vote his, her or its
Shareholder Shares as required by Section 2 hereof, then the Proxy Holder shall
have the right to vote the Shareholder Shares as set forth in the Irrevocable
Proxy at any meeting of the Company's shareholders and in any action by written
consent of the Company's shareholders in lieu of any such meeting in accordance
with Section 3(a) hereof. The vote of the Proxy Holder as set forth in the
Irrevocable Proxy shall control in any conflict between a vote of such
Shareholder Shares by the Proxy Holder and a vote of such Shareholder Shares by
Shareholder.
4. Other Covenants, Representations and Warranties. Shareholder hereby
represents and warrants to, and covenants with, Parent and Acquisition as
follows:
(a) Ownership of Shareholder Shares. Shareholder is the beneficial
owner (as defined in Rule 13(d)(3) promulgated under the Exchange Act,
"BENEFICIAL OWNER") of all the Shareholder Shares. Except as set forth in Annex
1 attached hereto, Shareholder has sole voting power and the sole power of
disposition with respect to all of the Shareholder Shares, with no limitations,
qualifications or restrictions on such rights. Except as set forth in Annex 1
attached hereto, Shareholder is the sole record holder (as reflected in the
records maintained by the Company's transfer agent) of the Shareholder Shares.
(b) Power; Binding Agreement. Shareholder has the legal capacity,
power and authority to enter into and perform all of Shareholder's obligations
under this Agreement. The execution, delivery and performance of this Agreement
by Shareholder will not violate any agreement or any law, rule or regulation or
court order to which Shareholder is a party or is subject, including, without
limitation, any voting agreement or voting trust. This Agreement has been duly
and validly executed and delivered by Shareholder and constitutes a valid and
binding agreement of Shareholder, enforceable against Shareholder in accordance
with its terms.
(c) Restriction on Transfer, Proxies and Non-Interference; Stop
Transfer. Except as expressly contemplated by this Agreement, during the term of
this Agreement, Shareholder shall not, directly or indirectly: (i) offer for
sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to, or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of the Shareholder
Shares or any interest therein; (ii) grant any proxies or powers of attorney
with respect to any Shareholder Shares or deposit any Shareholder Shares into a
voting trust or enter into a voting agreement with respect to any Shareholder
Shares (any of the actions described in clause (i) or clause (ii) of this
sentence, a "TRANSFER"); or (iii) take any action that would make any
representation or warranty of Shareholder contained herein untrue or incorrect
or violate any covenant contained herein or have the effect of preventing or
disabling Shareholder from performing any of Shareholder's obligations under
this Agreement; provided, however, that Shareholder may Transfer Shareholder
Shares to a corporation, partnership, fund, trust or similar entity directly or
indirectly controlled by Shareholder primarily for investment, tax or estate
planning purposes so long as, prior to the effectiveness of any such Transfer,
such transferee executes and delivers to Parent the undertaking in the form of
this Agreement and to the Proxy Holder an Irrevocable Proxy with respect to such
Shareholder Shares so Transferred. Shareholder further agrees with and covenants
to Parent that Shareholder shall not request that the Company register the
transfer of any certificate or
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uncertificated interest representing any of the Shareholder Shares, unless such
transfer is made in compliance with this Agreement.
(d) Other Potential Acquirers. Shareholder (i) shall immediately
cease all existing discussions or negotiations, if any, with any persons
conducted heretofore with respect to any acquisition of all or any material
portion of the assets of, or any equity interest in, the Company, or any
business combination with the Company; (ii) from and after the date hereof until
the termination of this Agreement, shall not, in his, her or its capacity as a
shareholder of the Company, directly or indirectly, initiate, solicit or
knowingly encourage (including, without limitation, by way of furnishing
non-public information or assistance), or take any other action to facilitate
knowingly, any inquiries or the making of any Third Party Acquisition; and (iii)
shall promptly notify Parent of any proposals for, or inquiries with respect to,
a potential Third Party Acquisition received by Shareholder or of which
Shareholder otherwise has knowledge.
(e) No Consents. To his, her or its knowledge, the execution and
delivery of this Agreement by Shareholder does not, and the performance by
Shareholder of his, her or its obligations hereunder will not, require
Shareholder to obtain any consent, approval, authorization or permit of, or to
make any filing with or notification to, any Governmental Entity.
(f) Notification of Parent. Shareholder hereby agrees, while this
Agreement is in effect, to notify Parent and Acquisition promptly of the number
of any additional shares of capital stock and the number and type of any other
voting securities of the Company acquired by such Shareholder, if any, after the
date hereof.
(g) Reliance by Parent and Acquisition. Shareholder understands
and acknowledges that Parent and Acquisition are entering into the Merger
Agreement in reliance upon Shareholder's execution and delivery of this
Agreement and the representations and covenants of Shareholder made herein.
5. Termination. This voting agreement and the irrevocable proxy granted
pursuant to Exhibit A shall terminate immediately upon the earlier to occur of
(a) the termination of the Merger Agreement in accordance with its terms, and
(b) the Effective Time.
6. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
(b) Certain Events. Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Shareholder Shares and shall be
binding upon any person to whom legal or beneficial ownership of any Shareholder
Shares shall pass, whether by operation of law or otherwise. Notwithstanding any
transfer of Shareholder Shares, the transferor shall remain liable for the
performance of all of his, her or its obligations under this Agreement.
(c) Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs,
personal representatives and permitted
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assigns. Neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof, nor any of the documents executed in
connection herewith, may be assigned by operation of law or otherwise without
the prior written consent of the other parties, and any attempted assignment in
violation hereof shall be void; provided, however, that Parent may, in its sole
discretion, assign its rights and obligations hereunder to any direct or
indirect wholly-owned subsidiary of Parent.
(d) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(e) Notices. All notices, requests, claims, demands, consents and
other communications hereunder shall be in writing and shall be delivered in
person, by facsimile, by registered or certified mail (postage prepaid, return
receipt requested) or sent by nationally-recognized overnight courier to each
other party as set forth below or to such other address as the party to whom
notice is to be given may have furnished to the other parties hereto in writing
in accordance herewith. Any such notice, request, claim, demand, consent or
other communication shall be deemed to have been delivered and received (i) in
the case of personal delivery, on the date of such delivery; (ii) in the case of
facsimile, on the date sent if confirmation of receipt is received and such
notice is also promptly mailed by registered or certified mail (return receipt
requested); (iii) in the case of a nationally-recognized overnight courier in
circumstances under which such courier guarantees next business day delivery, on
the next business day after the date when sent; and (iv) in the case of mailing,
on the fifth business day following that on which the piece of mail (postage
prepaid) containing such communication is posted:
if to Parent or Acquisition: Cadence Design Systems, Inc.
0000 Xxxxx Xxxxxx, Xxxxxxxx 0
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Attention: General Counsel
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
if to Shareholder, to: such address for Shareholder as set
forth on the signature page hereto
with a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
Xxxxxxxx X'Xxxxx, Esq.
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(f) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
(g) No Waiver. The failure or delay of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance. No waiver by a party of any default,
misrepresentation or breach of a representation, warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of a representation, warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent occurrence.
(h) Governing Law; Venue; Specific Performance; Waiver of Jury
Trial. THIS AGREEMENT SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAW PRINCIPLES THEREOF. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE
STATE OF NEW YORK. THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF
THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK IN RESPECT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT INCLUDING THE INTERPRETATION AND
ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO
IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY. THE
PARTIES HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT
OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH
DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING
MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE
THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY
NOT BE ENFORCED IN OR BY SUCH COURTS. THE PARTIES HEREBY CONSENT TO AND GRANT
ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT
MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
6(E) HEREOF OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY APPLICABLE LAW, SHALL
BE VALID AND SUFFICIENT SERVICE THEREOF.
THE PARTIES AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR AND THAT THE
PARTIES WOULD NOT HAVE ANY ADEQUATE REMEDY AT LAW IN THE EVENT THAT ANY OF THE
PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR
SPECIFIC TERMS OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE
PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF
THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS
AGREEMENT IN ANY COURT OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE
UNITED STATES OF AMERICA LOCATED IN THE STATE OF NEW YORK, THIS BEING IN
ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY.
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EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6(H).
(i) Counterparts. This Agreement may be executed by facsimile and in one
or more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
(j) Further Assurances. From time to time, at the request of any party
to another party or parties to this Agreement and without further consideration,
such other party or parties shall execute and deliver such instruments or
documents and take all such further action necessary or reasonably desirable to
evidence or further effectuate (but not to enlarge) the respective rights and
obligations of the parties and to evidence and effectuate any termination of
this Agreement in accordance with its terms.
(k) Officer and Director Matters Excluded. If Shareholder is a member of
the Company's Board of Directors or any committee thereof (collectively, the
"COMPANY BOARD") or an officer of the Company, Parent and Acquisition
acknowledge and agree that no provision of this Agreement shall limit or
otherwise restrict Shareholder with respect to any act or omission that
Shareholder may undertake or authorize solely and expressly in his or her
capacity as a member of the Company Board or an officer of the Company.
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IN WITNESS WHEREOF, Parent, Acquisition, and Shareholder have caused this
Agreement to be duly executed as of the day and year first above written.
CADENCE DESIGN SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
SCIOTO RIVER LTD.
By:
---------------------------------
Name:
Title:
[Signature Page to Agreement]
Signature Page, Cont'd.
SHAREHOLDER
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Name:
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Title:
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Address:
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[Signature Page to Agreement]
