EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
SUMMIT DESIGN, INC.
HOOD ACQUISITION CORP.
AND
ORCAD, INC.
DATED AS OF SEPTEMBER 20, 1998
TABLE OF CONTENTS
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ARTICLE I
THE MERGER............................................................................. 1
1.1 The Merger............................................................................. 1
1.2 Effective Time; Closing................................................................ 1
1.3 Effect of the Merger................................................................... 2
1.4 Certificate of Incorporation; Bylaws................................................... 2
1.5 Directors and Officers................................................................. 2
1.6 Effect on Capital Stock................................................................ 2
1.7 Surrender of Certificates.............................................................. 3
1.8 No Further Ownership Rights in OrCAD Common Stock...................................... 4
1.9 Lost, Stolen or Destroyed Certificates................................................. 4
1.10 Tax and Accounting Consequences........................................................ 5
1.11 Taking of Necessary Action; Further Action............................................. 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF OrCAD................................................ 5
2.1 Organization of OrCAD.................................................................. 5
2.2 OrCAD Capital Structure................................................................ 6
2.3 Obligations With Respect to Capital Stock.............................................. 6
2.4 Authority.............................................................................. 6
2.5 SEC Filings; OrCAD Financial Statements................................................ 7
2.6 Absence of Certain Changes or Events................................................... 8
2.7 Tax and Other Returns and Reports...................................................... 8
2.8 Title to Properties; Absence of Liens and Encumbrances................................. 10
2.9 Intellectual Property.................................................................. 10
2.10 Compliance; Permits; Restrictions...................................................... 12
2.11 Litigation............................................................................. 12
2.12 Brokers' and Finders' Fees............................................................. 13
2.13 Employee Matters and Benefit Plans..................................................... 13
2.14 OrCAD Employees; Labor Matters......................................................... 15
2.15 Environmental Matters.................................................................. 16
2.16 Agreements, Contracts and Commitments.................................................. 16
2.17 Pooling of Interests................................................................... 17
2.18 Change of Control Payments............................................................. 17
2.19 Statements; Proxy Statement/Prospectus................................................. 18
2.20 Board Approval......................................................................... 18
2.21 Fairness Opinion....................................................................... 18
2.22 Section 203 of the Delaware Law Not Applicable......................................... 18
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUMMIT AND MERGER SUB................................ 18
3.1 Organization of Summit................................................................. 18
3.2 Summit Capital Structure............................................................... 19
3.3 Obligations With Respect to Capital Stock.............................................. 20
3.4 Authority.............................................................................. 20
3.5 SEC Filings; Summit Financial Statements............................................... 21
3.6 Absence of Certain Changes or Events................................................... 22
3.7 Tax and Other Returns and Reports...................................................... 22
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TABLE OF CONTENTS
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3.8 Title to Properties; Absence of Liens and Encumbrances................................. 23
3.9 Intellectual Property.................................................................. 23
3.10 Compliance; Permits; Restrictions...................................................... 25
3.11 Litigation............................................................................. 25
3.12 Brokers' and Finders' Fees............................................................. 25
3.13 Employee Matters and Benefit Plans..................................................... 26
3.14 Summit Employees; Labor Matters........................................................ 28
3.15 Environmental Matters.................................................................. 28
3.16 Agreements, Contracts and Commitments.................................................. 29
3.17 Pooling of Interests................................................................... 30
3.18 Change of Control Payments............................................................. 30
3.19 Statements; Proxy Statement/Prospectus................................................. 30
3.20 Board Approval......................................................................... 30
3.21 Fairness Opinion....................................................................... 31
3.22 Section 203 of the Delaware Law Not Applicable......................................... 31
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME.................................................... 31
4.1 Conduct of Business.................................................................... 31
ARTICLE V
ADDITIONAL AGREEMENTS.................................................................. 33
5.1 Registration........................................................................... 33
5.2 Meeting of Stockholders................................................................ 34
5.3 Confidentiality; Access to Information................................................. 34
5.4 No Solicitation By OrCAD............................................................... 35
5.5 No Solicitation By Summit.............................................................. 36
5.6 Public Disclosure...................................................................... 38
5.7 Legal Requirements..................................................................... 38
5.8 Third Party Consents................................................................... 38
5.9 Notification of Certain Matters........................................................ 38
5.10 Best Efforts and Further Assurances.................................................... 38
5.11 Stock Options.......................................................................... 39
5.12 Form S-8............................................................................... 39
5.13 Nasdaq Listing......................................................................... 39
5.14 OrCAD Affiliate Agreement.............................................................. 40
5.15 Summit Affiliate Agreement............................................................. 40
5.16 Comfort Letter......................................................................... 40
5.17 Pooling................................................................................ 40
5.18 Continue Nasdaq Quotation.............................................................. 40
5.19 OrCAD 401(k) Plan...................................................................... 40
ARTICLE VI
CONDITIONS TO THE MERGER............................................................... 40
6.1 Conditions to Obligations of Each Party to Effect the Merger........................... 40
6.2 Additional Conditions to Obligations of OrCAD.......................................... 41
6.3 Additional Conditions to the Obligations of Summit and Merger Sub...................... 42
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TABLE OF CONTENTS
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER...................................................... 43
7.1 Termination............................................................................ 43
7.2 Notice of Termination; Effect of Termination........................................... 44
7.3 Fees and Expenses...................................................................... 45
7.4 Amendment.............................................................................. 46
7.5 Extension; Waiver...................................................................... 46
ARTICLE VIII
GENERAL PROVISIONS..................................................................... 47
8.1 Non-Survival of Representations and Warranties......................................... 47
8.2 Notices................................................................................ 47
8.3 Interpretation; Knowledge.............................................................. 48
8.4 Counterparts........................................................................... 48
8.5 Entire Agreement; Third Party Beneficiaries............................................ 48
8.6 Severability........................................................................... 48
8.7 Other Remedies; Specific Performance................................................... 48
8.8 Governing Law.......................................................................... 48
8.9 Rules of Construction.................................................................. 49
8.10 Assignment............................................................................. 49
8.11 Waiver of Jury Trial................................................................... 49
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INDEX OF EXHIBITS
Exhibit A Form of OrCAD Voting Agreement
Exhibit B Form of Summit Voting Agreement
Exhibit C Form of OrCAD Affiliate Agreement
Exhibit D Form of Summit Affiliate Agreement
Exhibit E Board Composition
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
September 20, 1998, by and among Summit Design, Inc., a Delaware corporation
("SUMMIT"), Hood Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Summit ("MERGER SUB"), and OrCAD, Inc. a Delaware corporation
("ORCAD").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law ("DELAWARE LAW"), Summit
and OrCAD intend to enter into a business combination transaction.
B. The Board of Directors of OrCAD (the "ORCAD BOARD") (i) has determined
that the Merger (as defined in Section 1.1) is consistent with and in
furtherance of the long-term business strategy of OrCAD and in the best
interests of OrCAD and its stockholders, (ii) has approved this Agreement, the
Merger and the other transactions contemplated by this Agreement and (iii) has
determined to recommend that the stockholders of OrCAD adopt and approve this
Agreement and approve the Merger.
C. The Board of Directors of Summit (the "SUMMIT BOARD") (i) has determined
that the Merger is consistent with and in furtherance of the long-term business
strategy of Summit and in the best interests of Summit and its stockholders,
(ii) has approved this Agreement, the Merger and the other transactions
contemplated by this Agreement and (iii) has determined to recommend that the
stockholders of Summit approve the issuance of shares of Summit Common Stock (as
defined in Section 1.6(a)) to the stockholders of OrCAD pursuant to the terms of
the Merger.
D. Concurrently with the execution of this Agreement, and as a condition and
inducement to OrCAD's and Summit's willingness to enter into this Agreement,
certain affiliates of OrCAD and Summit are entering into Voting Agreements in
substantially the form attached hereto as EXHIBIT A and EXHIBIT B, respectively.
E. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE").
F. The parties intend for the Merger to qualify for accounting treatment as
a pooling of interests.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
OrCAD (the "MERGER"), the separate corporate existence of Merger Sub shall cease
and OrCAD shall continue as the surviving corporation. OrCAD as the surviving
corporation after the Merger is hereinafter sometimes referred to as the
"SURVIVING CORPORATION."
1.2 EFFECTIVE TIME; CLOSING. Subject to the provisions of this Agreement,
the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of Delaware Law (the "CERTIFICATE OF
MERGER") (the time of such filing (or such later time as may be agreed in
writing by the parties and specified in the Certificate of Merger) being the
"EFFECTIVE TIME") as soon as practicable on or after the Closing Date (as herein
defined). Unless the context otherwise requires, the term "AGREEMENT" as used
herein refers collectively to this Agreement and Plan of Reorganization and the
Certificate of Merger. The
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closing of the Merger (the "CLOSING") shall take place at the offices of ▇▇▇▇
▇▇▇▇▇ LLP, at a time and date to be specified by the parties, which shall be no
later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location as
the parties hereto agree in writing (the "CLOSING DATE").
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of OrCAD and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of OrCAD and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.4 CERTIFICATE OF INCORPORATION; BYLAWS.
(a) At the Effective Time, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by Delaware Law and such Certificate of Incorporation;
PROVIDED, HOWEVER, that at the Effective Time the Certificate of
Incorporation of the Surviving Corporation shall be amended so that the name
of the Surviving Corporation shall be OrCAD, Inc.
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended as provided by Delaware Law and such
Bylaws.
1.5 DIRECTORS AND OFFICERS. The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly elected or appointed
and qualified. The initial officers of the Surviving Corporation shall be the
officers of Merger Sub immediately prior to the Effective Time, until their
respective successors are duly appointed.
1.6 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, OrCAD or the holders of
any of the following securities:
(a) CONVERSION OF ORCAD COMMON STOCK. Each share of Common Stock,
$0.01 par value per share, of OrCAD (the "ORCAD COMMON STOCK") issued and
outstanding immediately prior to the Effective Time, (other than any shares
of OrCAD Common Stock to be canceled pursuant to Section 1.6(b)) will be
canceled and extinguished and automatically converted (subject to Sections
1.6(e) and (f)) into the right to receive 1.05 (the "EXCHANGE RATIO") share
of Common Stock, par value $0.01 per share, of Summit (the "SUMMIT COMMON
STOCK") upon surrender of the certificate representing such share of OrCAD
Common Stock in the manner provided in Section 1.7 (or in the case of a
lost, stolen or destroyed certificate, upon delivery of an affidavit (and
bond, if required) in the manner provided in Section 1.9).
(b) CANCELLATION OF ORCAD-OWNED STOCK. Each share of OrCAD Common
Stock held by OrCAD or owned by Merger Sub, Summit or any direct or indirect
wholly-owned subsidiary of OrCAD or of Summit immediately prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.
(c) STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLAN. At the Effective
Time: (x) all options to purchase OrCAD Common Stock then outstanding under
OrCAD's 1991 Non-Qualified Stock Option Plan (the "1991 PLAN"), OrCAD's 1995
Stock Incentive Plan (the "1995 INCENTIVE PLAN"), OrCAD's 1995 Stock Option
Plan (the "1995 PLAN") and OrCAD's 1995 Stock Option Plan for Non-Employee
Directors (the "DIRECTORS' PLAN" and collectively, the "ORCAD STOCK OPTION
PLANS") shall be assumed by Summit in accordance with Section 5.11 hereof;
and (y) rights outstanding under OrCAD's 1996 Employee Stock Purchase Plan
(the "ORCAD ESPP") shall be treated as set forth in Section 5.11.
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(d) CAPITAL STOCK OF MERGER SUB. Each share of Common Stock, $0.01 par
value per share, of Merger Sub (the "MERGER SUB COMMON STOCK") issued and
outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of Common Stock,
$0.01 par value per share, of the Surviving Corporation. Each certificate
evidencing ownership of shares of Merger Sub Common Stock shall evidence
ownership of such shares of capital stock of the Surviving Corporation.
(e) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Summit Common Stock or OrCAD Common Stock),
reorganization, recapitalization, reclassification or other like change with
respect to Summit Common Stock or OrCAD Common Stock occurring on or after
the date hereof and prior to the Effective Time.
(f) FRACTIONAL SHARES. No fractional shares of Summit Common Stock
will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of OrCAD Common Stock who would otherwise be entitled to a fraction
of a share of Summit Common Stock (after aggregating all fractional shares
of Summit Common Stock that otherwise would be received by such holder)
shall receive from Summit an amount of cash (rounded to the nearest whole
cent) equal to the product of (i) such fraction, MULTIPLIED BY (ii) the
average closing price of one share of Summit Common Stock for the ten (10)
most recent days that Summit Common Stock has traded ending on and including
the trading day immediately prior to the Effective Time, as reported on the
Nasdaq National Market.
1.7 SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Summit shall select an institution reasonably
acceptable to OrCAD to act as the exchange agent (the "EXCHANGE AGENT") in
the Merger.
(b) SUMMIT TO PROVIDE COMMON STOCK. Promptly after the Effective Time,
Summit shall make available to the Exchange Agent for exchange in accordance
with this Article I, the shares of Summit Common Stock issuable pursuant to
Section 1.6 in exchange for outstanding shares of OrCAD Common Stock, and
cash in an amount sufficient for payment in lieu of fractional shares
pursuant to Section 1.6(f) and any dividends or distributions to which
holders of shares of OrCAD Common Stock may be entitled pursuant to Section
1.7(d).
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, Summit
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate or certificates (the "CERTIFICATES"), which
immediately prior to the Effective Time represented outstanding shares of
OrCAD Common Stock whose shares were converted into the right to receive
shares of Summit Common Stock pursuant to Section 1.6, cash in lieu of any
fractional shares pursuant to Section 1.6(f) and any dividends or other
distributions pursuant to Section 1.7(d), (i) a letter of transmittal in
customary form (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and shall contain such other
provisions as Summit may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for certificates
representing shares of Summit Common Stock, cash in lieu of any fractional
shares pursuant to Section 1.6(f) and any dividends or other distributions
pursuant to Section 1.7(d). Upon surrender of Certificates for cancellation
to the Exchange Agent or to such other agent or agents as may be appointed
by Summit, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, the holders of
such Certificates shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of Summit Common Stock
into which their shares of OrCAD Common Stock were converted at the
Effective Time, payment in lieu of fractional shares which such holders have
the right to receive pursuant to Section 1.6(f) and any dividends or
distributions payable pursuant to Section 1.7(d), and the Certificates so
surrendered shall forthwith be canceled. Until so
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surrendered, outstanding Certificates will be deemed from and after the
Effective Time, for all corporate purposes, subject to Section 1.7(d) as to
the payment of dividends, to evidence the ownership of the number of full
shares of Summit Common Stock into which such shares of OrCAD Common Stock
may be so converted and the right to receive an amount in cash in lieu of
the issuance of any fractional shares in accordance with Section 1.6(f) and
any dividends or distributions payable pursuant to Section 1.7(d).
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the date of this Agreement with
respect to Summit Common Stock with a record date after the Effective Time
will be paid to the holders of any unsurrendered Certificates with respect
to the shares of Summit Common Stock represented thereby until the holders
of record of such Certificates shall surrender such Certificates. Subject to
applicable law, following surrender of any such Certificates, the Exchange
Agent shall deliver to the record holders thereof, without interest,
certificates representing whole shares of Summit Common Stock issued in
exchange therefor along with payment in lieu of fractional shares pursuant
to Section 1.6(f) hereof and the amount of any such dividends or other
distributions with a record date after the Effective Time payable with
respect to such whole shares of Summit Common Stock.
(e) TRANSFERS OF OWNERSHIP. If certificates for shares of Summit
Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will
be properly endorsed and otherwise in proper form for transfer and that the
persons requesting such exchange will have paid to Summit or any agent
designated by it any transfer or other taxes required by reason of the
issuance of certificates for shares of Summit Common Stock in any name other
than that of the registered holder of the Certificates surrendered, or
established to the satisfaction of Summit or any agent designated by it that
such tax has been paid or is not payable.
(f) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 1.7, neither the Exchange Agent, Summit, the Surviving Corporation
nor any party hereto shall be liable to a holder of shares of Summit Common
Stock or OrCAD Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
1.8 NO FURTHER OWNERSHIP RIGHTS IN ORCAD COMMON STOCK. All shares of
Summit Common Stock issued in accordance with the terms hereof (including any
cash paid in respect thereof pursuant to Section 1.6(f) and 1.7(d)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of OrCAD Common Stock, and there shall be no further registration of
transfers on the records of the Surviving Corporation of shares of OrCAD Common
Stock that were outstanding immediately prior to the Effective Time. If after
the Effective Time Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article I.
1.9 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any Certificates
shall have been lost, stolen or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof, such shares of Summit Common Stock
into which the shares of OrCAD Common Stock represented by such Certificates
were converted pursuant to Section 1.6, cash for fractional shares, if any, as
may be required pursuant to Section 1.6(f) and any dividends or distributions
payable pursuant to Section 1.7(d); PROVIDED, HOWEVER, that Summit may, in its
discretion and as a condition precedent to the issuance of such certificates
representing Summit Common Stock, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Summit, the Surviving
Corporation or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
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1.10 TAX AND ACCOUNTING CONSEQUENCES.
(a) The parties hereto intend that the Merger shall constitute a
reorganization within the meaning of Section 368 of the Code. The parties
hereto adopt this Agreement as a "plan of reorganization" within the meaning
of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury
Regulations.
(b) The parties hereto intend that the Merger shall qualify for
accounting treatment as a pooling of interests.
1.11 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of OrCAD and Merger Sub, the officers and directors of OrCAD and
Merger Sub will take all such lawful and necessary action. Summit shall cause
Merger Sub to perform all of its obligations relating to this Agreement and the
transactions contemplated thereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ORCAD
OrCAD represents and warrants to Summit and Merger Sub, subject to the
exceptions specifically disclosed in writing in the disclosure schedule and
referencing a specific representation supplied by OrCAD to Summit dated as of
the date hereof and certified by a duly authorized officer of OrCAD (the "ORCAD
SCHEDULES"), as follows:
2.1 ORGANIZATION OF ORCAD.
(a) OrCAD and each of its subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to
own, lease and operate its assets and property and to carry on its business
as now being conducted; and is duly qualified or licensed to do business and
is in good standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except where the failure to be so
qualified would not have a Material Adverse Effect (as defined in Section
2.1(d)) on OrCAD.
(b) OrCAD has delivered to Summit a true and complete list of all of
OrCAD's subsidiaries as of the date of this Agreement, indicating the
jurisdiction of incorporation of each subsidiary and OrCAD's equity interest
therein.
(c) OrCAD has delivered or made available to Summit a true and correct
copy of the Certificate of Incorporation and Bylaws of OrCAD and similar
governing instruments of each of its subsidiaries, each as amended to date,
and each such instrument is in full force and effect. Neither OrCAD nor any
of its subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or similar governing instruments.
(d) When used in connection with OrCAD, the term "MATERIAL ADVERSE
EFFECT" means, for purposes of this Agreement, any change, event or effect
that is materially adverse to the business, assets (including intangible
assets), financial condition or results of operations of OrCAD and its
subsidiaries taken as a whole (except for those changes, events and effects
that are directly caused by (i) conditions affecting the United States
economy as a whole which do not affect OrCAD in a disproportionate manner,
(ii) conditions affecting the industry in which OrCAD competes as a whole
which do not affect OrCAD in a disproportionate manner, or (iii) delays in
customer orders resulting from announcement and pendency of the Merger).
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2.2 ORCAD CAPITAL STRUCTURE. The authorized capital stock of OrCAD
consists of 16,000,000 shares of Common Stock, $0.01 par value per share, of
which there were 9,343,073 shares issued and outstanding as of the date hereof
and 2,000,000 of Preferred Stock, $0.01 par value per share, of which no shares
are issued or outstanding. All outstanding shares of OrCAD Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of OrCAD or any agreement or document to which OrCAD is a party or by which it
is bound. As of the date hereof, OrCAD had reserved an aggregate of 1,556,014
shares of OrCAD Common Stock, net of exercises, for issuance to employees,
consultants and non-employee directors pursuant to the OrCAD Stock Option Plans.
As of the date hereof, there were options outstanding to purchase an aggregate
of 1,259,852 shares of OrCAD Common Stock, issued to employees, consultants and
non-employee directors pursuant to the OrCAD Stock Option Plans. All shares of
OrCAD Common Stock subject to issuance as aforesaid, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. The
OrCAD Schedules list for each person who held options to acquire shares of OrCAD
Common Stock as of the date hereof, the name of the holder of such option, the
exercise price of such option, the number of shares as to which such option had
vested at such date, the vesting schedule for such option and whether the
exercisability of such option will be accelerated in any way by the transactions
contemplated by this Agreement, and indicates the extent of acceleration, if
any.
2.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in
Section 2.2 or the OrCAD Schedules, there are no equity securities, partnership
interests or similar ownership interests of any class of OrCAD, or any
securities exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests, issued,
reserved for issuance or outstanding. Except for securities OrCAD owns, directly
or indirectly through one or more subsidiaries, as of the date of this
Agreement, there are no equity securities, partnership interests or similar
ownership interests of any class of any subsidiary of OrCAD, or any security
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding. Except as set forth in Section 2.2 or the OrCAD
Schedules, there are no options, warrants, equity securities, partnership
interests or similar ownership interests, calls, rights (including preemptive
rights), commitments or agreements of any character to which OrCAD or any of its
subsidiaries is a party or by which it is bound obligating OrCAD or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership interests
or similar ownership interests of OrCAD or any of its subsidiaries or obligating
OrCAD or any of its subsidiaries to grant, extend, accelerate the vesting of or
enter into any such option, warrant, equity security, call, right, commitment or
agreement. As of the date of this Agreement, except as contemplated by this
Agreement, there are no registration rights and there are no voting trusts,
proxies or other agreements or understandings to which OrCAD is a party or by
which it is bound with respect to any equity security of any class of OrCAD or
with respect to any equity security, partnership interest or similar ownership
interest of any class of any of its subsidiaries. With respect to the
transactions contemplated by this Agreement, stockholders of OrCAD are not
entitled to appraisal rights under applicable state law.
2.4 AUTHORITY.
(a) OrCAD has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of OrCAD, subject only to the approval and
adoption of this Agreement and the approval of the Merger by OrCAD's
stockholders and the filing of the Certificate of Merger pursuant to
Delaware Law. A vote of the holders of at least sixty-seven percent (67%) of
the outstanding shares of the OrCAD Common Stock is required for OrCAD's
stockholders to approve and adopt this Agreement and approve the Merger.
This Agreement has been duly executed and
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delivered by OrCAD and, assuming the due authorization, execution and
delivery by Summit and, if applicable, Merger Sub, constitutes the valid and
binding obligation of OrCAD, enforceable against OrCAD in accordance with
its terms, except as enforceability may be limited by bankruptcy and other
similar laws and general principles of equity. The execution and delivery of
this Agreement does not, and the performance of this Agreement will not, (i)
conflict with or violate the Certificate of Incorporation or Bylaws of OrCAD
or the equivalent organizational documents of any of its subsidiaries, (ii)
subject to obtaining the approval and adoption of this Agreement and the
approval of the Merger by OrCAD's stockholders as contemplated in Section
5.2 and compliance with the requirements set forth in Section 2.4(b),
conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to OrCAD or any of its subsidiaries or by which OrCAD or
any of its subsidiaries or any of their respective properties is bound or
affected, or (iii) result in any material breach of or constitute a material
default (or an event that with notice or lapse of time or both would become
a material default) under, or impair OrCAD's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a material lien or encumbrance on any of the material properties
or assets of OrCAD or any of its subsidiaries pursuant to, any material
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which OrCAD or any of
its subsidiaries is a party or by which OrCAD or any of its subsidiaries or
its or any of their respective properties are bound or affected. The OrCAD
Schedules list all consents, waivers and approvals under any of OrCAD's or
any of its subsidiaries' agreements, contracts, licenses or leases required
to be obtained in connection with the consummation of the transactions
contemplated hereby, which, if individually or in the aggregate not
obtained, would result in a material loss of benefits or any material
liability to OrCAD, OrCAD' subsidiaries, Summit or the Surviving Corporation
as a result of the Merger.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission or
other governmental authority or instrumentality, foreign or domestic
("GOVERNMENTAL ENTITY"), is required to be obtained or made by OrCAD in
connection with the execution and delivery of this Agreement or the
consummation of the Merger, except for (i) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware, (ii) the filing
of the Proxy Statement (as defined in Section 2.19) with the Securities and
Exchange Commission ("SEC") in accordance with the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), (iii) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal, foreign and state securities (or related)
laws and the securities or antitrust laws of any foreign country, and (iv)
such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not be material to OrCAD or Summit or
have a material adverse effect on the ability of the parties to consummate
the Merger.
2.5 SEC FILINGS; ORCAD FINANCIAL STATEMENTS.
(a) OrCAD has filed all forms, reports and documents required to be
filed by OrCAD with the SEC since March 1, 1996 and has made available to
Summit such forms, reports and documents in the form filed with the SEC. All
such required forms, reports and documents (including those that OrCAD may
file subsequent to the date hereof) are referred to herein as the "ORCAD SEC
REPORTS." As of their respective dates, the OrCAD SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act of 1933,
as amended (the "SECURITIES ACT"), or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such OrCAD
SEC Reports and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date
of such filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not
7
misleading. None of OrCAD's subsidiaries is required to file any forms,
reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the OrCAD SEC Reports (the
"ORCAD FINANCIALS"), including any OrCAD SEC Reports filed after the date
hereof until the Closing, (x) complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto,
(y) was prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on
Form 10-QSB or Form 10-Q, as applicable, under the Exchange Act) and (z)
fairly presented the consolidated financial position of OrCAD and its
subsidiaries as at the respective dates thereof and the consolidated results
of OrCAD's operations and cash flows for the periods indicated, except that
the unaudited interim financial statements may not contain footnotes and
were or are subject to normal and recurring year-end adjustments. The
balance sheet of OrCAD contained in OrCAD SEC Reports as of December 31,
1997 is hereinafter referred to as the "ORCAD BALANCE SHEET." Except as
disclosed in the OrCAD Financials or in the consolidated unaudited balance
sheet of OrCAD as of June 30, 1998 previously delivered to Summit, since the
date of the OrCAD Balance Sheet neither OrCAD nor any of its subsidiaries
has any liabilities (absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or in the related notes to the
consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations or financial condition of OrCAD and its subsidiaries taken as a
whole, except for (i) liabilities identified in the OrCAD Balance Sheet, or
(ii) liabilities incurred since the date of the OrCAD Balance Sheet in the
ordinary course of business consistent with past practices.
(c) OrCAD has heretofore furnished to Summit a complete and correct copy
of any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by OrCAD with the SEC pursuant
to the Securities Act or the Exchange Act.
2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the OrCAD
Balance Sheet and through the date of this Agreement there has not been: (i) any
Material Adverse Effect on OrCAD, (ii) any material change by OrCAD in its
accounting methods, principles or practices, except as required by concurrent
changes in GAAP, or (iii) any material revaluation by OrCAD of any of its
assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary
course of business.
2.7 TAX AND OTHER RETURNS AND REPORTS.
(a) DEFINITION OF TAXES. For the purposes of this Agreement, "TAX" or,
collectively, "TAXES", means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed
with respect to such amounts and any obligations under any agreements or
arrangements with any other person with respect to such amounts and
including any liability for taxes of a predecessor entity.
(b) TAX RETURNS AND AUDITS. Except as set forth in Section 2.7 of the
OrCAD Schedules:
(i) OrCAD and each of its subsidiaries have prepared and filed all
required federal, state, local and foreign returns, estimates,
information statements and reports ("RETURNS") relating to any and all
Taxes concerning or attributable to OrCAD and each of its subsidiaries or
their operations and such Returns are true and correct in all material
respects and have been completed in accordance with applicable law.
8
(ii) OrCAD and each of its subsidiaries (A) have paid or accrued all
Taxes it is required to pay or accrue and (B) have withheld with respect
to its employees all federal and state income taxes, FICA, FUTA and other
Taxes required to be withheld.
(iii) Neither OrCAD nor any of its subsidiaries has been delinquent
in the payment of any Tax nor is there any Tax deficiency outstanding,
proposed or assessed against OrCAD or any of its subsidiaries, nor has
OrCAD or any of its subsidiaries executed any waiver of any statute of
limitations on or extending the period for the assessment or collection
of any Tax.
(iv) No audit or other examination of any Return of OrCAD or any of
its subsidiaries is presently in progress, nor has OrCAD or any of its
subsidiaries been notified of any request for such an audit or other
examination.
(v) Neither OrCAD nor any of its subsidiaries has any material
liability for unpaid federal, state, local or foreign Taxes which has not
been accrued or reserved against in accordance with GAAP on the OrCAD
Balance Sheet or accrued in accordance with GAAP in the ordinary course
of business since the date of the OrCAD Balance Sheet, whether asserted
or unasserted, contingent or otherwise, and neither OrCAD nor any of its
subsidiaries has knowledge of any basis for the assertion of any such
liability attributable to the assets or operations of OrCAD or any of its
subsidiaries.
(vi) OrCAD has provided to Summit copies of all federal and state
income and all state sales and use Tax Returns for all periods since the
date of OrCAD's incorporation, except those as to which applicable
statues of limitations have expired and no tolling of the statute of
limitations has been executed.
(vii) There are no liens, pledges, charges, claims, security
interests or other encumbrances of any sort ("LIENS") on the assets of
OrCAD or any of its subsidiaries relating to or attributable to Taxes.
(viii) Neither OrCAD nor any of its subsidiaries has knowledge of any
basis for the assertion of any claim relating or attributable to Taxes
which, if adversely determined, would result in any Lien on the assets of
OrCAD or any of its subsidiaries.
(ix) None of OrCAD's or any of its subsidiaries' assets are treated
as "tax-exempt use property" within the meaning of Section 168(h) of the
Code.
(x) There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any
employee or former employee of OrCAD or any of its subsidiaries that,
individually or collectively, could give rise to the payment of any
amount that would not be deductible pursuant to Section 280G or 162 of
the Code.
(xi) Neither OrCAD nor any of its subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as defined in Section 341(f)(4) of the Code) owned by OrCAD or any of
its subsidiaries.
(xii) Neither OrCAD nor any of its subsidiaries is a party to a tax
sharing or allocation agreement nor does OrCAD nor any of its
subsidiaries owe any amount under any such agreement.
(xiii) Neither OrCAD nor any of its subsidiaries has been at any time,
a "United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code.
9
2.8 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) The OrCAD Schedules list the real property owned by OrCAD as of the
date of this Agreement. The OrCAD Schedules list all real property leases to
which OrCAD is a party as of the date of this Agreement and each amendment
thereto that is in effect as of the date of this Agreement. All such current
leases are in full force and effect, are valid and effective in accordance
with their respective terms, and there is not, under any of such leases, any
existing default or event of default (or event which with notice or lapse of
time, or both, would constitute a default) that would give rise to a
material claim.
(b) OrCAD has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its material
tangible properties and assets, real, personal and mixed, used or held for
use in its business, free and clear of any Liens, except as reflected in the
OrCAD Financials and except for liens for taxes not yet due and payable and
such Liens or other imperfections of title and encumbrances, if any, which
are not material in character, amount or extent, and which do not materially
detract from the value, or materially interfere with the present use, of the
property subject thereto or affected thereby.
2.9 INTELLECTUAL PROPERTY. For the purposes of this Agreement, the
following terms have the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following and all
rights therein: (i) all United States, international and foreign patents
and applications (including provisional applications); (ii) all
inventions (whether patentable or not), invention disclosures, trade
secrets, proprietary information, know how, technology, technical data
and customer lists, and all documentation relating to any of the
foregoing and all improvements thereto; (iii) all copyrights, copyright
registrations and applications therefor, and all other rights
corresponding thereto throughout the world; (iv) all industrial designs
and any registrations and applications therefor throughout the world that
have not been withdrawn; (v) all trade names, logos, common law
trademarks and service marks, trademark and service ▇▇▇▇ registrations
and applications therefor throughout the world; (vi) all databases and
data collections and all rights therein throughout the world; and (vii)
any similar or equivalent rights to any of the foregoing anywhere in the
world.
"ORCAD INTELLECTUAL PROPERTY" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, OrCAD or any of its
subsidiaries.
"REGISTERED INTELLECTUAL PROPERTY" means all United States, international
and foreign: (i) patents and patent applications (including provisional
applications) that have not been withdrawn; (ii) registered trademarks,
applications to register trademarks, intent-to-use applications, or other
registrations or applications related to trademarks that have not been
withdrawn; (iii) registered copyrights and applications for copyright
registration; and (iv) any other Intellectual Property that is the
subject of an application, certificate, filing, registration or other
document issued, filed with, or recorded by any state, government or
other public legal authority.
(a) Section 2.9 of the OrCAD Schedules lists all of the Registered
Intellectual Property owned by, or filed in the name of, OrCAD or any of its
subsidiaries (the "ORCAD REGISTERED INTELLECTUAL PROPERTY") and all patent,
copyright, trademark or industrial design registrations or applications that
have been withdrawn since January 1, 1997.
(b) Section 2.9 of the OrCAD Schedules lists all proceedings or actions
before any court, tribunal (including the United States Patent and Trademark
Office ("PTO") or equivalent authority anywhere in the world) related to any
OrCAD Intellectual Property.
(c) OrCAD (or its subsidiaries, as applicable) has complied in all
material respects with all applicable disclosure requirements, and has not
committed any fraudulent act, in the application for and maintenance of any
patent, trademark or copyright of OrCAD.
10
(d) Other than restrictions imposed by laws of general applicability or
limitations on use inherent in the content of the registrations themselves,
no OrCAD Intellectual Property or product or service of OrCAD or its
subsidiaries is subject to any proceeding or outstanding decree, order,
judgment, agreement or stipulation restricting in any manner the use,
transfer, or licensing thereof by OrCAD or its subsidiaries, or which may
affect the validity, use or enforceability of such OrCAD Intellectual
Property.
(e) Each item of OrCAD Registered Intellectual Property is valid and
subsisting, all necessary registration, maintenance and renewal fees
currently due in connection with such Registered Intellectual Property have
been paid and all necessary documents and certificates in connection with
such Registered Intellectual Property have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of maintaining
such Registered Intellectual Property.
(f) Except as set forth in Section 2.9 of the OrCAD Schedules, to
OrCAD's knowledge: (i) OrCAD or an OrCAD subsidiary owns and has good and
exclusive title to, or has license to, each item of OrCAD Intellectual
Property, including all OrCAD Registered Intellectual Property listed in
Section 2.9 of the OrCAD Schedules, free and clear of any Lien (excluding
licenses and related restrictions); and (ii) OrCAD or an OrCAD subsidiary is
the exclusive owner of all trademarks and trade names used in connection
with the operation or conduct of the business of OrCAD or its subsidiaries,
including the sale of any products or the provision of any services by OrCAD
or its subsidiaries, but excluding trademarks and trade names commonly
identified by OrCAD or its subsidiaries as the property of a third party
(e.g. "Microsoft NT").
(g) OrCAD owns exclusively, and has good title to, all copyrighted works
that are OrCAD products (other than third-party software code to which OrCAD
holds valid and enforceable distribution licenses) or which OrCAD otherwise
expressly purports to own.
(h) To OrCAD's knowledge, OrCAD or its subsidiaries owns or has the
right to all Intellectual Property necessary to the conduct of its business
as it currently is conducted, including, without limitation, the design,
development, manufacture and sale of all products currently manufactured or
sold by OrCAD or its subsidiaries or under development by OrCAD or its
subsidiaries and the performance of all services provided by OrCAD or its
subsidiaries.
(i) To the extent that any work, invention or material has been
developed or created by a third party for OrCAD, OrCAD has a written
agreement with such third party with respect thereto and OrCAD thereby
either (i) has obtained ownership of, and is the exclusive owner of, or (ii)
has obtained a license to all such third party's Intellectual Property in
such work, material or invention by operation of law or by valid assignment,
to the extent it is legally possible to do so.
(j) Except as set forth in Section 2.9 of the OrCAD Schedules or in the
ordinary course of business, (i) OrCAD has not transferred ownership of, or
granted any rights to use any of the OrCAD Intellectual Property; and (ii)
OrCAD has not granted to any person, nor authorized any person to retain,
any rights in the OrCAD Intellectual Property.
(k) Section 2.9 of the OrCAD Schedules lists all material contracts,
licenses and agreements to which OrCAD is a party (i) with respect to OrCAD
Intellectual Property licensed or transferred to any third party (other than
end-user licenses in the ordinary course); or (ii) pursuant to which a third
party has licensed or transferred any material Intellectual Property to
OrCAD.
(l) Following the Closing Date, the Surviving Corporation will be
permitted to exercise all of OrCAD's rights under the contracts, licenses
and agreements required to be listed in Section 2.9 of the OrCAD Schedules
to the same extent OrCAD would have been able had the consummation of the
transactions contemplated by this Agreement not occurred and without the
payment of any additional
11
amounts or consideration other than ongoing fees, royalties or payments
which OrCAD would otherwise be required to pay.
(m) Section 2.9 of the OrCAD Schedules lists or specifically refers to
all contracts, licenses and agreements between OrCAD and any third party
wherein or whereby OrCAD has agreed to, or assumed, any obligation or duty
to warrant, indemnify, hold harmless or otherwise assume or incur any
obligation or liability with respect to the infringement or misappropriation
by OrCAD or such third party of the Intellectual Property of any third
party, except such contracts entered into in the ordinary course of OrCAD's
business.
(n) OrCAD has not received written notice from any third party that the
operation of the business of OrCAD or any act, product or service of OrCAD,
infringes or misappropriates the Intellectual Property of any third party or
constitutes unfair competition or trade practices under the laws of any
jurisdiction.
(o) Except as set forth in Section 2.9 of the OrCAD Schedules, to the
knowledge of OrCAD, no person has or is infringing or misappropriating any
OrCAD Intellectual Property.
(p) Except as set forth in Section 2.9 of the OrCAD Schedules, there
have been, and are, no claims asserted against OrCAD or, to its knowledge,
against any customer of OrCAD, related to any product or service of OrCAD.
(q) OrCAD has and enforces a policy requiring each employee and
contractor to execute a proprietary information / confidentiality agreement
substantially in OrCAD's standard form and all current and former employees
and contractors of OrCAD have executed such an agreement, except where the
failure to do so is not reasonably expected to be material to OrCAD.
2.10 COMPLIANCE; PERMITS; RESTRICTIONS.
(a) Neither OrCAD nor any of its subsidiaries is, in any material
respect, in conflict with, or in default or in violation of (i) any law,
rule, regulation, order, judgment or decree applicable to OrCAD or any of
its subsidiaries or by which OrCAD or any of its subsidiaries or any of
their respective properties is bound or affected, or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which OrCAD or any of its subsidiaries
is a party or by which OrCAD or any of its subsidiaries or its or any of
their respective properties is bound or affected, except for conflicts,
violations and defaults that (individually or in the aggregate) would not
cause OrCAD to lose benefits aggregating to $1 million or more, or cause
OrCAD to incur liabilities aggregating to $1 million or more. No
investigation or review by any Governmental Entity is pending or, to OrCAD's
knowledge, has since January 1, 1997 been threatened against OrCAD or any of
its subsidiaries, nor, to OrCAD's knowledge, has any Governmental Entity
indicated an intention to conduct an investigation of OrCAD or any of its
subsidiaries. There is no material agreement, judgment, injunction, order or
decree binding upon OrCAD or any of its subsidiaries which has the effect of
prohibiting or materially impairing any business practice of OrCAD or any of
its subsidiaries, any acquisition of material property by OrCAD or any of
its subsidiaries or the conduct of business by OrCAD as currently conducted.
(b) OrCAD and its subsidiaries hold, to the extent legally required, all
permits, licenses, variances, exemptions, orders and approvals from
Governmental Entities that are material to and required for the operation of
the business of OrCAD as currently conducted (collectively, the "ORCAD
PERMITS"). OrCAD and its subsidiaries are in compliance in all material
respects with the terms of the OrCAD Permits.
2.11 LITIGATION. There is no action, suit, proceeding, claim, arbitration
or investigation pending, and to OrCAD's knowledge, no person has threatened to
commence any action, suit, proceeding, claim, arbitration or investigation
against OrCAD or any of its subsidiaries which would reasonably be expected
12
to have a Material Adverse Effect on OrCAD. No Governmental Entity has at any
time since January 1, 1997 challenged or questioned the legal right of OrCAD to
manufacture, offer or sell any of its products in the present manner or style
thereof.
2.12 BROKERS' AND FINDERS' FEES. Except for fees payable to Alliant
Partners pursuant to an engagement letter dated August 13, 1998, a copy of which
has been provided to Summit, OrCAD has not incurred, nor will it incur, directly
or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
2.13 EMPLOYEE MATTERS AND BENEFIT PLANS.
(a) DEFINITIONS. With the exception of the definition of "Affiliate"
set forth in Section 2.13(a)(i) below (such definition shall only apply to
this Section 2.13), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "AFFILIATE," as used in this Section 2.13, shall mean any other
person or entity under common control with OrCAD within the meaning of
Section 414(b), (c), (m) or (o) of the Code and the regulations
thereunder;
(ii) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended;
(iii) "ORCAD EMPLOYEE PLAN" shall refer to any plan, program, policy,
practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or
remuneration of any kind, whether formal or informal, funded or unfunded,
including without limitation, each "employee benefit plan", within the
meaning of Section 3(3) of ERISA which is or has been maintained,
contributed to, or required to be contributed to, by OrCAD or any
Affiliate for the benefit of any "OrCAD Employee" (as defined below), and
pursuant to which OrCAD or any Affiliate has or may have any material
liability contingent or otherwise;
(iv) "ORCAD EMPLOYEE" shall mean any current, former, or retired
employee, officer, or director of OrCAD or any Affiliate;
(v) "ORCAD EMPLOYEE AGREEMENT" shall refer to each management,
employment, severance, consulting, relocation, repatriation,
expatriation, visa, work permit or similar agreement or contract between
OrCAD or any Affiliate and any OrCAD Employee or consultant;
(vi) "IRS" shall mean the Internal Revenue Service;
(vii) "MULTIEMPLOYER PLAN" shall mean any "Pension Plan" (as defined
below) which is a "multiemployer plan", as defined in Section 3(37) of
ERISA; and
(viii) "ORCAD PENSION PLAN" shall refer to each OrCAD Employee Plan
which is an "employee pension benefit plan", within the meaning of
Section 3(2) of ERISA.
(b) SCHEDULE. Section 2.13(b) of the OrCAD Schedules contains an
accurate and complete list of each OrCAD Employee Plan and each OrCAD
Employee Agreement, together with a schedule of all liabilities, whether or
not accrued, under each such OrCAD Employee Plan or OrCAD Employee
Agreement. OrCAD does not have any plan or commitment to establish any new
OrCAD Employee Plan or OrCAD Employee Agreement, to modify any OrCAD
Employee Plan or OrCAD Employee Agreement (except to the extent required by
law or to conform any such OrCAD Employee Plan or OrCAD Employee Agreement
to the requirements of any applicable law, in each case as previously
disclosed to Summit in writing, or as required by this Agreement), or to
enter into any OrCAD Employee Plan or OrCAD Employee Agreement, nor does it
have any intention or commitment to do any of the foregoing.
13
(c) DOCUMENTS. OrCAD has provided to Summit (i) correct and complete
copies of all documents embodying or relating to each OrCAD Employee Plan
and each OrCAD Employee Agreement including all amendments thereto and
written interpretations thereof; (ii) the most recent annual actuarial
valuations, if any, prepared for each OrCAD Employee Plan; (iii) the three
most recent annual reports (Series 5500 and all schedules thereto), if any,
required under ERISA or the Code in connection with each OrCAD Employee Plan
or related trust; (iv) if OrCAD Employee Plan is funded, the most recent
annual and periodic accounting of OrCAD Employee Plan assets; (v) the most
recent summary plan description together with the most recent summary of
material modifications, if any, required under ERISA with respect to each
OrCAD Employee Plan; (vi) all IRS determination letters and rulings relating
to OrCAD Employee Plans and copies of all applications and correspondence to
or from the IRS or the Department of Labor ("DOL") with respect to any OrCAD
Employee Plan; (vii) all communications material to any OrCAD Employee or
OrCAD Employees relating to any OrCAD Employee Plan and any proposed OrCAD
Employee Plans, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments
or vesting schedules or other events which would result in any material
liability to OrCAD; and (viii) all registration statements and prospectuses
prepared in connection with each OrCAD Employee Plan.
(d) ORCAD EMPLOYEE PLAN COMPLIANCE. Except as set forth in Section
2.13(d) of the OrCAD Schedules, (i) OrCAD has performed in all material
respects all obligations required to be performed by it under each OrCAD
Employee Plan and each OrCAD Employee Plan has been established and
maintained in all material respects in accordance with its terms and in
compliance with all applicable laws, statutes, orders, rules and
regulations, including but not limited to ERISA or the Code; (ii) to OrCAD's
knowledge no "prohibited transaction", within the meaning of Section 4975 of
the Code or Section 406 of ERISA, has occurred with respect to any OrCAD
Employee Plan; (iii) there are no actions, suits or claims pending, or, to
the knowledge of OrCAD, threatened or anticipated (other than routine claims
for benefits) against any OrCAD Employee Plan or against the assets of any
OrCAD Employee Plan; and (iv) each OrCAD Employee Plan can be amended,
terminated or otherwise discontinued after the Effective Time in accordance
with its terms, without liability to OrCAD, the Surviving Corporation,
Summit or any Affiliates (other than ordinary administration expenses
typically incurred in a termination event); (v) there are no inquiries or
proceedings pending or, to the knowledge of OrCAD or any Affiliates,
threatened by the IRS or DOL with respect to any OrCAD Employee Plan; and
(vi) to OrCAD's knowledge, neither OrCAD nor any Affiliate is subject to any
penalty or tax with respect to any OrCAD Employee Plan under Section 402(i)
of ERISA or Section 4975 through 4980 of the Code.
(e) ORCAD PENSION PLANS. OrCAD does not now, nor has it ever,
maintained, established, sponsored, participated in, or contributed to, any
OrCAD Pension Plan which is subject to Part 3 of Subtitle B of Title I of
ERISA, Title IV of ERISA or Section 412 of the Code.
(f) MULTIEMPLOYER PLANS. At no time has OrCAD contributed to or been
requested to contribute to any Multiemployer Plan.
(g) NO POST-EMPLOYMENT OBLIGATIONS. Except as set forth in Schedule
2.13(g), no OrCAD Employee Plan provides, or has any liability to provide,
life insurance, medical or other employee benefits to any OrCAD Employee
upon his or her retirement or termination of employment for any reason,
except as may be required by statute, and OrCAD has never represented,
promised or contracted (whether in oral or written form) to any OrCAD
Employee (either individually or to OrCAD Employees as a group) that such
OrCAD Employee(s) would be provided with life insurance, medical or other
employee welfare benefits upon their retirement or termination of
employment, except to the extent required by statute.
14
(h) EFFECT OF TRANSACTION.
(i) Except as provided in Section 1.6 of this Agreement or as set
forth on Schedule 2.13(h)(i), the execution of this Agreement and the
consummation of the transactions contemplated hereby will not (either
alone or upon the occurrence of any additional or subsequent events)
constitute an event under any OrCAD Employee Plan, OrCAD Employee
Agreement, trust or loan that will or may result in any payment (whether
of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation
to fund benefits with respect to any OrCAD Employee.
(ii) Except as set forth on Schedule 2.13(h)(ii), no payment or
benefit which will or may be made by OrCAD or Summit or any of their
respective affiliates with respect to any OrCAD Employee will be
characterized as an "excess parachute payment", within the meaning of
Section 280G(b)(1) of the Code.
(i) EMPLOYMENT MATTERS. OrCAD and each of its subsidiaries (i) is in
compliance in all material respects with all applicable foreign, federal,
state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and
hours, in each case, in each location in which OrCAD or any of its
subsidiaries employs persons; (ii) has withheld all amounts required by law
or by agreement to be withheld from the wages, salaries and other payments
to OrCAD Employees; (iii) is not liable for any material arrears of wages or
any material taxes or any material penalty for failure to comply with any of
the foregoing; and (iv) is not liable for any material payment to any trust
or other fund or to any governmental or administrative authority, with
respect to unemployment compensation benefits, social security or other
benefits or obligations for OrCAD Employees (other than routine payments to
be made in the normal course of business and consistent with past practice).
(j) LABOR. No work stoppage or labor strike against OrCAD is pending
or, to the knowledge of OrCAD, threatened. Except as set forth in Schedule
2.13(j), OrCAD is not involved in or, to the knowledge of OrCAD, threatened
with, any labor dispute, grievance, or litigation relating to labor, safety
or discrimination matters involving any OrCAD Employee, including, without
limitation, charges of unfair labor practices or discrimination complaints,
which, if adversely determined, would, individually or in the aggregate,
result in a Material Adverse Effect on OrCAD. Neither OrCAD nor any of its
subsidiaries has engaged in any unfair labor practices within the meaning of
the National Labor Relations Act which would, individually or in the
aggregate, directly or indirectly result in a Material Adverse Effect on
OrCAD. Except as set forth in Schedule 2.13(j), OrCAD is not presently, nor
has it been in the past, a party to, or bound by, any collective bargaining
agreement or union contract with respect to OrCAD Employees and no
collective bargaining agreement is being negotiated by OrCAD.
2.14 ORCAD EMPLOYEES; LABOR MATTERS.
To OrCAD's knowledge, no employee of OrCAD has violated any employment
contract, patent disclosure agreement or non competition agreement between such
employee and any former employer of such employee due to such employee being
employed by OrCAD and disclosing to OrCAD trade secrets or proprietary
information of such employer. To OrCAD's knowledge, there are no activities or
proceedings of any labor union to organize any employees of OrCAD or any of its
subsidiaries and there are no strikes, or material slowdowns, work stoppages or
lockouts, or threats thereof by or with respect to any employees of OrCAD or any
of its subsidiaries. OrCAD is not, and has never been, a party to any collective
bargaining agreement. OrCAD and its subsidiaries are in compliance in all
material respects with all applicable laws regarding employment practices, terms
and conditions of employment, and wages and hours (including, without
limitation, ERISA, WARN or any similar state or local law).
15
2.15 ENVIRONMENTAL MATTERS.
(a) HAZARDOUS MATERIAL. Except as reasonably would not be likely to
result in Material Adverse Effect on OrCAD, no underground storage tanks and
no amount of any substance that has been designated by any Governmental
Entity or by applicable federal, state or local law to be radioactive,
toxic, hazardous or otherwise a danger to health or the environment,
including, without limitation, PCBs, asbestos, petroleum, urea-formaldehyde
and all substances listed as hazardous substances pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, or defined as a hazardous waste pursuant to the United
States Resource Conservation and Recovery Act of 1976, as amended, and the
regulations promulgated pursuant to said laws, but excluding office and
janitorial supplies, (a "HAZARDOUS MATERIAL") are present, as a result of
the actions of OrCAD or any of its subsidiaries or any affiliate of OrCAD,
or, to OrCAD's knowledge, as a result of any actions of any third party or
otherwise, in, on or under any property, including the land and the
improvements, ground water and surface water thereof, that OrCAD or any of
its subsidiaries has at any time owned, operated, occupied or leased.
(b) HAZARDOUS MATERIALS ACTIVITIES. Except as reasonably would not be
likely to result in Material Adverse Effect on OrCAD (i) neither OrCAD nor
any of its subsidiaries has transported, stored, used, manufactured,
disposed of, released or exposed its employees or others to Hazardous
Materials in violation of any law, and (ii) neither OrCAD nor any of its
subsidiaries has disposed of, transported, sold, used, released, exposed its
employees or others to or manufactured any product containing a Hazardous
Material (collectively "HAZARDOUS MATERIALS ACTIVITIES") in violation of any
rule, regulation, treaty or statute promulgated by any Governmental Entity
in effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity.
(c) PERMITS. OrCAD and its subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"ORCAD ENVIRONMENTAL PERMITS") necessary for the conduct of OrCAD's and its
subsidiaries' Hazardous Material Activities and other businesses of OrCAD
and its subsidiaries as such activities and businesses are currently being
conducted. OrCAD and its subsidiaries are in compliance in all material
respects with the terms of the OrCAD Environmental Permits.
(d) ENVIRONMENTAL LIABILITIES. No action, proceeding, revocation
proceeding, amendment procedure, writ, claim or injunction is pending, and
to OrCAD's knowledge, no action, proceeding, revocation proceeding,
amendment procedure, writ, claim or injunction has since January 1, 1997
been threatened by any Governmental Entity against OrCAD or any of its
subsidiaries concerning any OrCAD Environmental Permit, Hazardous Material
or any Hazardous Materials Activity of OrCAD or any of its subsidiaries.
2.16 AGREEMENTS, CONTRACTS AND COMMITMENTS. Neither OrCAD nor any of its
subsidiaries is a party to or is bound by:
(a) any employment or consulting agreement, contract or commitment with
any officer or director level employee or member of OrCAD's Board of
Directors, other than those that are terminable by OrCAD or any of its
subsidiaries on no more than thirty days notice without liability or
financial obligation, except to the extent general principles of wrongful
termination law may limit OrCAD's or any of its subsidiaries' ability to
terminate employees at will;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right 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 value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement;
16
(c) any agreement of indemnification or any guaranty other than: (i) any
agreement of indemnification or guaranty entered into in the ordinary course
of business, (ii) any agreement of indemnification entered into in
connection with the sale or license of software products in the ordinary
course of business, (iii) any agreement of indemnification entered into in
connection with services performed in the ordinary course of business, and
(iv) any indemnification agreement between OrCAD or any of its subsidiaries
and any of their respective officers, directors or employees;
(d) any agreement, contract or commitment containing any covenant
limiting in any material respect the right of OrCAD or any of its
subsidiaries to engage in any line of business which is material to OrCAD
and its subsidiaries taken as a whole or to compete with any person or
granting any exclusive distribution rights;
(e) any agreement, contract or commitment relating to the disposition or
acquisition by OrCAD or any of its subsidiaries or subsequent parent or
sister companies after the date of this Agreement of a material amount of
assets not in the ordinary course of business or pursuant to which OrCAD has
any material ownership interest in any corporation, partnership, joint
venture or other business enterprise;
(f) any joint marketing or development agreement currently in force
under which OrCAD or any of its subsidiaries have continuing material
obligations to jointly market any product, technology or service and which
may not be canceled without penalty upon notice of 90 days or less, or any
agreement pursuant to which OrCAD or any of its subsidiaries have continuing
material obligations to jointly develop any intellectual property that will
not be owned, in whole or in part, by OrCAD or any of its subsidiaries and
which may not be canceled without penalty upon notice of 90 days or less;
(g) any agreement, contract or commitment currently in force to provide
source code to any third party for any product or technology that is
material to OrCAD and its subsidiaries taken as a whole, except for (i) any
agreement, contract or commitment pursuant to which source code is provided
solely for maintenance purposes, and (ii) any source code escrow agreement
entered into in the ordinary course of business that solely contains
provisions relating to the release of source code if OrCAD and/or any of its
subsidiaries ceases to do business or fails to provide appropriate
maintenance; or
(h) any agreement, contract or commitment currently in force to license
any third party to manufacture or reproduce any OrCAD product, service or
technology except as a distributor in the normal course of business.
Each OrCAD Contract (as defined below) is in full force and effect. Neither
OrCAD nor any of its subsidiaries, nor to OrCAD's knowledge any other party to
an OrCAD Contract, is in breach, violation or default under, and neither OrCAD
nor any of its subsidiaries has received notice that it has breached, violated
or defaulted under, any of the material terms or conditions of any of the
agreements, contracts or commitments to which OrCAD or any of its subsidiaries
is a party or by which it is bound that are required to be disclosed in the
OrCAD Schedules pursuant to clauses (a) through (h) above or pursuant to Section
2.9 hereof (any such agreement, contract or commitment, a "ORCAD CONTRACT") in
such a manner as would permit any other party to cancel or terminate any such
OrCAD Contract, or would permit any other party to seek damages, which would be
reasonably likely to exceed $1 million (for any or all of such breaches,
violations or defaults, in the aggregate).
2.17 POOLING OF INTERESTS. To the knowledge of OrCAD, based on
consultation with its independent accountants, neither OrCAD nor any of its
directors, officers, affiliates or stockholders has taken any action which would
preclude Summit's ability to account for the Merger as a pooling of interests.
2.18 CHANGE OF CONTROL PAYMENTS. Section 2.18 of the OrCAD Schedules sets
forth each plan or agreement pursuant to which any amounts may become payable
(whether currently or in the future) to
17
current or former employees, officers and directors of OrCAD as a result of or
in connection with the Merger.
2.19 STATEMENTS; PROXY STATEMENT/PROSPECTUS. The information supplied by
OrCAD for inclusion in the Registration Statement (as defined in Section 3.4(b))
shall not at the time the Registration Statement is filed with the SEC and at
the time it becomes effective under the Securities Act contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. The information supplied by OrCAD for inclusion in the proxy
statement/prospectus to be sent to (a) the stockholders of OrCAD in connection
with the meeting of OrCAD's stockholders to consider the approval and adoption
of this Agreement and the approval of the Merger (the "ORCAD STOCKHOLDERS'
MEETING") and (b) the stockholders of Summit in connection with the meeting of
Summit's stockholders to consider the approval of the issuance of shares of
Summit Common Stock pursuant to the Merger (the "SUMMIT STOCKHOLDERS' MEETING")
(such proxy statement/prospectus as amended or supplemented is referred to
herein as the "PROXY STATEMENT") shall not, on the date the Proxy Statement is
first mailed to OrCAD's stockholders and Summit's stockholders or at the time of
the OrCAD Stockholders' Meeting or the Summit Stockholders' Meeting, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply as to form
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder. If at any time prior to the Effective Time any event
relating to OrCAD or any of its affiliates, officers or directors should be
discovered by OrCAD which may be required to be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement, OrCAD shall
promptly inform Summit. Notwithstanding the foregoing, OrCAD makes no
representation or warranty with respect to any information supplied by Summit or
Merger Sub which is contained in any of the foregoing documents.
2.20 BOARD APPROVAL. The OrCAD Board has, as of the date of this
Agreement, (i) determined that the Merger is in the best interests of OrCAD and
its stockholders, (ii) approved and adopted this Agreement and the Merger, and
(iii) subject to the terms and conditions set forth in this Agreement,
determined to recommend that the stockholders of OrCAD approve and adopt this
Agreement and approve the Merger.
2.21 FAIRNESS OPINION. OrCAD's Board of Directors has received a written
opinion from Alliant Partners dated as of the date hereof, to the effect that as
of the date hereof, the Exchange Ratio is fair to OrCAD's stockholders from a
financial point of view and has delivered to Summit a copy of such opinion.
2.22 SECTION 203 OF THE DELAWARE LAW NOT APPLICABLE. The OrCAD Board has
taken all actions so that the restrictions contained in Section 203 of the
Delaware Law applicable to a "business combination" (as defined in such Section
203) will not apply to the execution, delivery or performance of this Agreement
or to the consummation of the Merger or the other transactions contemplated by
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUMMIT AND MERGER SUB
Summit and Merger Sub represent and warrant to OrCAD, subject to the
exceptions specifically disclosed in writing in the disclosure schedule and
referencing a specific representation supplied by Summit to OrCAD dated as of
the date hereof and certified by a duly authorized officer of Summit and, with
respect to exceptions as to Merger Sub, Merger Sub (the "SUMMIT SCHEDULES"), as
follows:
3.1 ORGANIZATION OF SUMMIT.
(a) Summit and each of its subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to
own, lease and operate its assets and property and to carry on its business
as now being
18
conducted; and is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such concept) in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except where the failure to be so qualified would not
have a Material Adverse Effect (as defined in Section 3.1(d)) on Summit.
(b) Summit has delivered to OrCAD a true and complete list of all of
Summit's subsidiaries as of the date of this Agreement, indicating the
jurisdiction of incorporation of each subsidiary and Summit's equity
interest therein.
(c) Summit has delivered or made available to OrCAD a true and correct
copy of the Certificate of Incorporation and Bylaws of Summit and similar
governing instruments of each of its subsidiaries, each as amended to date,
and each such instrument is in full force and effect. Neither Summit nor any
of its subsidiaries is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or similar governing instruments.
(d) When used in connection with Summit, the term "MATERIAL ADVERSE
EFFECT" means, for purposes of this Agreement, any change, event or effect
that is materially adverse to the business, assets (including intangible
assets), financial condition or results of operations of Summit and its
subsidiaries taken as a whole (except for those changes, events and effects
that are directly caused by (i) conditions affecting the United States
economy as a whole which do not affect Summit in a disproportionate manner,
(ii) conditions affecting the industry in which Summit competes as a whole
which do not affect Summit in a disproportionate manner, or (iii) delays in
customer orders resulting from announcement and pendency of the Merger).
3.2 SUMMIT CAPITAL STRUCTURE. The authorized capital stock of Summit
consists of 30,000,000 shares of Common Stock, $0.01 par value per share, of
which there were 15,300,572 shares issued and outstanding as of the date hereof
and 5,000,000 shares of Preferred Stock, $0.01 par value per share, of which no
shares are issued or outstanding, provided that, in connection with the
transactions contemplated by this Agreement, Summit intends to seek stockholder
approval of an amendment to its Certificate of Incorporation to increase the
number of authorized shares of Common Stock to 45,000,000. All outstanding
shares of Summit Common Stock are duly authorized, validly issued, fully paid
and nonassessable and are not subject to preemptive rights created by statute,
the Certificate of Incorporation or Bylaws of Summit or any agreement or
document to which Summit is a party or by which it is bound. As of the date
hereof, Summit had reserved an aggregate of 2,556,140 shares of Summit Common
Stock, net of exercises, for issuance to employees, consultants and non-employee
directors pursuant to the Summit Stock Option Plans. As of the date hereof,
there were options outstanding to purchase an aggregate of 1,887,936 shares of
Summit Common Stock, issued to employees, consultants and non-employee directors
pursuant to the Summit Stock Option Plans. All shares of Summit Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, would be duly
authorized, validly issued, fully paid and nonassessable. The Summit Schedules
list for each person who held options to acquire shares of Summit Common Stock
as of the date hereof, the name of the holder of such option, the exercise price
of such option, the number of shares as to which such option had vested at such
date, the vesting schedule for such option and whether the exercisability of
such option will be accelerated in any way by the transactions contemplated by
this Agreement, and indicates the extent of acceleration, if any. The authorized
capital stock of Merger Sub consists of 1,000 shares of Common Stock, $0.01 par
value per share, of which there are 1,000 shares issued and outstanding, all of
which are held by Summit. All outstanding shares of Merger Sub are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Merger Sub or any agreement or document to which Merger Sub is a party or by
which it is bound.
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3.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in
Section 3.2 or the Summit Schedules, there are no equity securities, partnership
interests or similar ownership interests of any class of Summit, or any
securities exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests, issued,
reserved for issuance or outstanding. Except for securities Summit owns,
directly or indirectly through one or more subsidiaries, as of the date of this
Agreement, there are no equity securities, partnership interests or similar
ownership interests of any class of any subsidiary of Summit, or any security
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding. Except as set forth in Section 3.2 or the Summit
Schedules, there are no options, warrants, equity securities, partnership
interests or similar ownership interests, calls, rights (including preemptive
rights), commitments or agreements of any character to which Summit or any of
its subsidiaries is a party or by which it is bound obligating Summit or any of
its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership interests
or similar ownership interests of Summit or any of its subsidiaries or
obligating Summit or any of its subsidiaries to grant, extend, accelerate the
vesting of or enter into any such option, warrant, equity security, call, right,
commitment or agreement. As of the date of this Agreement, except as
contemplated by this Agreement, there are no registration rights and there are
no voting trusts, proxies or other agreements or understandings to which Summit
is a party or by which it is bound with respect to any equity security of any
class of Summit or with respect to any equity security, partnership interest or
similar ownership interest of any class of any of its subsidiaries. With respect
to the transactions contemplated by this Agreement, stockholders of Summit are
not entitled to appraisal rights under applicable state law.
3.4 AUTHORITY.
(a) Summit and Merger Sub have all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Summit and
Merger Sub, subject only to the approval of the issuance of shares of Summit
Common Stock by virtue of the Merger by Summit's stockholders and the filing
of the Certificate of Merger pursuant to Delaware Law. A vote of the holders
of at least a majority of the outstanding shares of the Summit Common Stock
is required for Summit's stockholders to approve issuance of shares of
Summit Common Stock by virtue of the Merger. This Agreement has been duly
executed and delivered by Summit and Merger Sub and, assuming the due
authorization, execution and delivery by OrCAD, constitutes the valid and
binding obligation of Summit and Merger Sub, enforceable against Summit and
Merger Sub in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws and general principles of
equity. The execution and delivery of this Agreement does not, and the
performance of this Agreement will not, (i) conflict with or violate the
Certificate of Incorporation or Bylaws of Summit or the equivalent
organizational documents of any of its subsidiaries, (ii) subject to
obtaining the approval of the issuance of shares of Summit Common Stock by
virtue of the Merger by Summit's stockholders as contemplated in Section 5.2
and compliance with the requirements set forth in Section 3.4(b), conflict
with or violate any law, rule, regulation, order, judgment or decree
applicable to Summit or any of its subsidiaries or by which Summit or any of
its subsidiaries or any of their respective properties is bound or affected,
or (iii) result in any material breach of or constitute a material default
(or an event that with notice or lapse of time or both would become a
material default) under, or impair Summit's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a material lien or encumbrance on any of the material properties
or assets of Summit or any of its subsidiaries pursuant to, any material
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Summit or any
of its subsidiaries is a party or by which Summit or any of its subsidiaries
or its or any of their respective
20
properties are bound or affected. The Summit Schedules list all consents,
waivers and approvals under any of Summit's or any of its subsidiaries'
agreements, contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby,
which, if individually or in the aggregate not obtained, would result in a
material loss of benefits or any material liability to Summit, Summit'
subsidiaries, OrCAD or the Surviving Corporation as a result of the Merger.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required to be
obtained or made by Summit or Merger Sub in connection with the execution
and delivery of this Agreement or the consummation of the Merger, except for
(i) the filing of a Form S-4 (or any similar successor form thereto)
Registration Statement (the "REGISTRATION STATEMENT") with the SEC in
accordance with the Securities Act, (ii) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware, (iii) the
filing of the Proxy Statement with the SEC in accordance with the Exchange
Act, (iv) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal,
foreign and state securities (or related) laws and the securities or
antitrust laws of any foreign country, and (v) such other consents,
authorizations, filings, approvals and registrations which if not obtained
or made would not be material to Summit or OrCAD or have a material adverse
effect on the ability of the parties to consummate the Merger.
3.5 SEC FILINGS; SUMMIT FINANCIAL STATEMENTS.
(a) Summit has filed all forms, reports and documents required to be
filed by Summit with the SEC since October 18, 1996 and has made available
to OrCAD such forms, reports and documents in the form filed with the SEC.
All such required forms, reports and documents (including those that Summit
may file subsequent to the date hereof) are referred to herein as the
"SUMMIT SEC REPORTS." As of their respective dates, the Summit SEC Reports
(i) were prepared in accordance with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Summit SEC Reports and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. None of Summit's subsidiaries is required to file any forms,
reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Summit SEC Reports (the
"SUMMIT FINANCIALS"), including any Summit SEC Reports filed after the date
hereof until the Closing, (x) complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto,
(y) was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited interim financial statements, as may be
permitted by the SEC on Form 10-Q under the Exchange Act) and (z) fairly
presented the consolidated financial position of Summit and its subsidiaries
as at the respective dates thereof and the consolidated results of Summit's
operations and cash flows for the periods indicated, except that the
unaudited interim financial statements may not contain footnotes and were or
are subject to normal and recurring year-end adjustments. The balance sheet
of Summit contained in Summit SEC Reports as of December 31, 1997 is
hereinafter referred to as the "SUMMIT BALANCE SHEET." Except as disclosed
in the Summit Financials or in the consolidated unaudited balance sheet of
Summit as of June 30, 1998 previously delivered to OrCAD, since the date of
the Summit Balance Sheet neither Summit nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or in the related notes to the
consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations or financial condition of Summit and its subsidiaries taken as a
21
whole, except for (i) liabilities identified in the Summit Balance Sheet, or
(ii) liabilities incurred since the date of the Summit Balance Sheet in the
ordinary course of business consistent with past practices.
(c) Summit has heretofore furnished to OrCAD a complete and correct copy
of any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Summit with the SEC pursuant
to the Securities Act or the Exchange Act.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the Summit
Balance Sheet and through the date of this Agreement there has not been: (i) any
Material Adverse Effect on Summit, (ii) any material change by Summit in its
accounting methods, principles or practices, except as required by concurrent
changes in GAAP, or (iii) any material revaluation by Summit of any of its
assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the ordinary
course of business.
3.7 TAX AND OTHER RETURNS AND REPORTS.
(a) TAX RETURNS AND AUDITS. Except as set forth in Section 3.7 of the
Summit Schedules:
(i) Summit and each of its subsidiaries have prepared and filed all
Returns relating to any and all Taxes concerning or attributable to
Summit and each of its subsidiaries or their operations and such Returns
are true and correct in all material respects and have been completed in
accordance with applicable law.
(ii) Summit and each of its subsidiaries (A) have paid or accrued
all Taxes it is required to pay or accrue and (B) have withheld with
respect to its employees all federal and state income taxes, FICA, FUTA
and other Taxes required to be withheld.
(iii) Neither Summit nor any of its subsidiaries has been delinquent
in the payment of any Tax nor is there any Tax deficiency outstanding,
proposed or assessed against Summit or any of its subsidiaries, nor has
Summit or any of its subsidiaries executed any waiver of any statute of
limitations on or extending the period for the assessment or collection
of any Tax.
(iv) No audit or other examination of any Return of Summit or any of
its subsidiaries is presently in progress, nor has Summit or any of its
subsidiaries been notified of any request for such an audit or other
examination.
(v) Neither Summit nor any of its subsidiaries has any material
liability for unpaid federal, state, local or foreign Taxes which has not
been accrued or reserved against in accordance with GAAP on the Summit
Balance Sheet or accrued in accordance with GAAP in the ordinary course
of business since the date of the Summit Balance Sheet, whether asserted
or unasserted, contingent or otherwise, and neither Summit nor any of its
subsidiaries has knowledge of any basis for the assertion of any such
liability attributable to the assets or operations of Summit or any of
its subsidiaries.
(vi) Summit has provided to OrCAD copies of all federal and state
income and all state sales and use Tax Returns for all periods since the
date of Summit's incorporation, except those as to which applicable
statues of limitations have expired and no tolling of the statute of
limitations has been executed.
(vii) There are no Liens on the assets of Summit or any of its
subsidiaries relating to or attributable to Taxes.
(viii) Neither Summit nor any of its subsidiaries has knowledge of any
basis for the assertion of any claim relating or attributable to Taxes
which, if adversely determined, would result in any Lien on the assets of
Summit or any of its subsidiaries.
22
(ix) None of Summit's or any of its subsidiaries' assets are treated
as "tax-exempt use property" within the meaning of Section 168(h) of the
Code.
(x) There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any
employee or former employee of Summit or any of its subsidiaries that,
individually or collectively, could give rise to the payment of any
amount that would not be deductible pursuant to Section 280G or 162 of
the Code.
(xi) Neither Summit nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection
(f) asset (as defined in Section 341(f)(4) of the Code) owned by Summit
or any of its subsidiaries.
(xii) Neither Summit nor any of its subsidiaries is a party to a tax
sharing or allocation agreement nor does Summit nor any of its
subsidiaries owe any amount under any such agreement.
(xiii) Neither Summit nor any of its subsidiaries has been at any
time, a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code.
3.8 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) The Summit Schedules list the real property owned by Summit as of
the date of this Agreement. The Summit Schedules list all real property
leases to which Summit is a party as of the date of this Agreement and each
amendment thereto that is in effect as of the date of this Agreement. All
such current leases are in full force and effect, are valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing default or event of default (or event which with notice
or lapse of time, or both, would constitute a default) that would give rise
to a material claim.
(b) Summit has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its material
tangible properties and assets, real, personal and mixed, used or held for
use in its business, free and clear of any Liens, except as reflected in the
Summit Financials and except for liens for taxes not yet due and payable and
such Liens or other imperfections of title and encumbrances, if any, which
are not material in character, amount or extent, and which do not materially
detract from the value, or materially interfere with the present use, of the
property subject thereto or affected thereby.
3.9 INTELLECTUAL PROPERTY. For the purposes of this Agreement, the
following terms have the following definitions:
"SUMMIT INTELLECTUAL PROPERTY" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, Summit or any of its
subsidiaries.
(a) Section 3.9 of the Summit Schedules lists all of the Registered
Intellectual Property owned by, or filed in the name of, Summit or any of
its subsidiaries (the "SUMMIT REGISTERED INTELLECTUAL PROPERTY") and all
patent, copyright, trademark or industrial design registrations or
applications that have been withdrawn since January 1, 1997.
(b) Section 3.9 of the Summit Schedules lists all proceedings or actions
before any court, tribunal (including the PTO) or equivalent authority
anywhere in the world) related to any Summit Intellectual Property.
(c) Summit (or its subsidiaries, as applicable) has complied in all
material respects with all applicable disclosure requirements, and has not
committed any fraudulent act, in the application for and maintenance of any
patent, trademark or copyright of Summit.
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(d) Other than restrictions imposed by laws of general applicability or
limitations on use inherent in the content of the registrations themselves,
no Summit Intellectual Property or product or service of Summit or its
subsidiaries is subject to any proceeding or outstanding decree, order,
judgment, agreement or stipulation restricting in any manner the use,
transfer, or licensing thereof by Summit or its subsidiaries, or which may
affect the validity, use or enforceability of such Summit Intellectual
Property.
(e) Each item of Summit Registered Intellectual Property is valid and
subsisting, all necessary registration, maintenance and renewal fees
currently due in connection with such Registered Intellectual Property have
been paid and all necessary documents and certificates in connection with
such Registered Intellectual Property have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of maintaining
such Registered Intellectual Property.
(f) Except as set forth in Section 3.9 of the Summit Schedules, to
Summit's knowledge: (i) Summit or a Summit subsidiary owns and has good and
exclusive title to, or has license to, each item of Summit Intellectual
Property, including all Summit Registered Intellectual Property listed in
Section 3.9 of the Summit Schedules, free and clear of any Lien (excluding
licenses and related restrictions); and (ii) Summit or a Summit subsidiary
is the exclusive owner of all trademarks and trade names used in connection
with the operation or conduct of the business of Summit or its subsidiaries,
including the sale of any products or the provision of any services by
Summit or its subsidiaries, but excluding trademarks and trade names
commonly identified by Summit or its subsidiaries as the property of a third
party (e.g. "Microsoft NT").
(g) Summit owns exclusively, and has good title to, all copyrighted
works that are Summit products (other than third-party software code to
which Summit holds valid and enforceable distribution licenses) or which
Summit otherwise expressly purports to own.
(h) To Summit's knowledge, Summit or its subsidiaries owns or has the
right to all Intellectual Property necessary to the conduct of its business
as it currently is conducted, including, without limitation, the design,
development, manufacture and sale of all products currently manufactured or
sold by Summit or its subsidiaries or under development by Summit or its
subsidiaries and the performance of all services provided by Summit or its
subsidiaries.
(i) To the extent that any work, invention or material has been
developed or created by a third party for Summit, Summit has a written
agreement with such third party with respect thereto and Summit thereby
either (i) has obtained ownership of, and is the exclusive owner of, or (ii)
has obtained a license to all such third party's Intellectual Property in
such work, material or invention by operation of law or by valid assignment,
to the extent it is legally possible to do so.
(j) Except as set forth in Section 3.9 of the Summit Schedules or in the
ordinary course of business, (i) Summit has not transferred ownership of, or
granted any rights to use any of the Summit Intellectual Property; and (ii)
Summit has not granted to any person, nor authorized any person to retain,
any rights in the Summit Intellectual Property.
(k) Section 3.9 of the Summit Schedules lists all material contracts,
licenses and agreements to which Summit is a party (i) with respect to
Summit Intellectual Property licensed or transferred to any third party
(other than end-user licenses in the ordinary course); or (ii) pursuant to
which a third party has licensed or transferred any material Intellectual
Property to Summit.
(l) Section 3.9 of the Summit Schedules lists or specifically refers to
all contracts, licenses and agreements between Summit and any third party
wherein or whereby Summit has agreed to, or assumed, any obligation or duty
to warrant, indemnify, hold harmless or otherwise assume or incur any
obligation or liability with respect to the infringement or misappropriation
by Summit or such
24
third party of the Intellectual Property of any third party, except such
contracts entered into in the ordinary course of Summit's business.
(m) Summit has not received written notice from any third party that the
operation of the business of Summit or any act, product or service of
Summit, infringes or misappropriates the Intellectual Property of any third
party or constitutes unfair competition or trade practices under the laws of
any jurisdiction.
(n) Except as set forth in Section 3.9 of the Summit Schedules, to the
knowledge of Summit, no person has or is infringing or misappropriating any
Summit Intellectual Property.
(o) Except as set forth in Section 3.9 of the Summit Schedules, there
have been, and are, no claims asserted against Summit or, to its knowledge,
against any customer of Summit, related to any product or service of Summit.
(p) Summit has and enforces a policy requiring each employee and
contractor to execute a proprietary information / confidentiality agreement
substantially in Summit's standard form and all current and former employees
and contractors of Summit have executed such an agreement, except where the
failure to do so is not reasonably expected to be material to Summit.
3.10 COMPLIANCE; PERMITS; RESTRICTIONS.
(a) Neither Summit nor any of its subsidiaries is, in any material
respect, in conflict with, or in default or in violation of (i) any law,
rule, regulation, order, judgment or decree applicable to Summit or any of
its subsidiaries or by which Summit or any of its subsidiaries or any of
their respective properties is bound or affected, or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which Summit or any of its subsidiaries
is a party or by which Summit or any of its subsidiaries or its or any of
their respective properties is bound or affected, except for conflicts,
violations and defaults that (individually or in the aggregate) would not
cause Summit to lose benefits aggregating to $1 million or more, or cause
Summit to incur liabilities aggregating to $1 million or more. No
investigation or review by any Governmental Entity is pending or, to
Summit's knowledge, has since January 1, 1997 been threatened against Summit
or any of its subsidiaries, nor, to Summit's knowledge, has any Governmental
Entity indicated an intention to conduct an investigation of Summit or any
of its subsidiaries. There is no material agreement, judgment, injunction,
order or decree binding upon Summit or any of its subsidiaries which has the
effect of prohibiting or materially impairing any business practice of
Summit or any of its subsidiaries, any acquisition of material property by
Summit or any of its subsidiaries or the conduct of business by Summit as
currently conducted.
(b) Summit and its subsidiaries hold, to the extent legally required,
all permits, licenses, variances, exemptions, orders and approvals from
Governmental Entities that are material to and required for the operation of
the business of Summit as currently conducted (collectively, the "SUMMIT
PERMITS"). Summit and its subsidiaries are in compliance in all material
respects with the terms of the Summit Permits.
3.11 LITIGATION. There is no action, suit, proceeding, claim, arbitration
or investigation pending, and to Summit's knowledge, no person has threatened to
commence any action, suit, proceeding, claim, arbitration or investigation
against Summit or any of its subsidiaries which would reasonably be expected to
have a Material Adverse Effect on Summit. No Governmental Entity has at any time
since January 1, 1997 challenged or questioned the legal right of Summit to
manufacture, offer or sell any of its products in the present manner or style
thereof.
3.12 BROKERS' AND FINDERS' FEES. Except for fees payable to Black &
Company pursuant to an engagement letter dated June 1, 1998, a copy of which has
been provided to OrCAD, Summit has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents'
25
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.13 EMPLOYEE MATTERS AND BENEFIT PLANS.
(a) DEFINITIONS. With the exception of the definition of "Affiliate"
set forth in Section 3.13(a)(i) below (such definition shall only apply to
this Section 3.13), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "AFFILIATE," as used in this Section 3.13, shall mean any other
person or entity under common control with Summit within the meaning of
Section 414(b), (c), (m) or (o) of the Code and the regulations
thereunder;
(ii) "SUMMIT EMPLOYEE PLAN" shall refer to any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or
remuneration of any kind, whether formal or informal, funded or unfunded,
including without limitation, each "employee benefit plan", within the
meaning of Section 3(3) of ERISA which is or has been maintained,
contributed to, or required to be contributed to, by Summit or any
Affiliate for the benefit of any "Summit Employee" (as defined below),
and pursuant to which Summit or any Affiliate has or may have any
material liability contingent or otherwise;
(iii) "SUMMIT EMPLOYEE" shall mean any current, former, or retired
employee, officer, or director of Summit or any Affiliate;
(iv) "SUMMIT EMPLOYEE AGREEMENT" shall refer to each management,
employment, severance, consulting, relocation, repatriation,
expatriation, visa, work permit or similar agreement or contract between
Summit or any Affiliate and any Summit Employee or consultant; and
(v) "SUMMIT PENSION PLAN" shall refer to each Summit Employee Plan
which is an "employee pension benefit plan", within the meaning of
Section 3(2) of ERISA.
(b) SCHEDULE. Section 3.13(b) of the Summit Schedules contains an
accurate and complete list of each Summit Employee Plan and each Summit
Employee Agreement, together with a schedule of all liabilities, whether or
not accrued, under each such Summit Employee Plan or Summit Employee
Agreement. Summit does not have any plan or commitment to establish any new
Summit Employee Plan or Summit Employee Agreement, to modify any Summit
Employee Plan or Summit Employee Agreement (except to the extent required by
law or to conform any such Summit Employee Plan or Summit Employee Agreement
to the requirements of any applicable law, in each case as previously
disclosed to Summit in writing, or as required by this Agreement), or to
enter into any Summit Employee Plan or Summit Employee Agreement, nor does
it have any intention or commitment to do any of the foregoing.
(c) DOCUMENTS. Summit has provided to Summit (i) correct and complete
copies of all documents embodying or relating to each Summit Employee Plan
and each Summit Employee Agreement including all amendments thereto and
written interpretations thereof; (ii) the most recent annual actuarial
valuations, if any, prepared for each Summit Employee Plan; (iii) the three
most recent annual reports (Series 5500 and all schedules thereto), if any,
required under ERISA or the Code in connection with each Summit Employee
Plan or related trust; (iv) if Summit Employee Plan is funded, the most
recent annual and periodic accounting of Summit Employee Plan assets; (v)
the most recent summary plan description together with the most recent
summary of material modifications, if any, required under ERISA with respect
to each Summit Employee Plan; (vi) all IRS determination letters and rulings
relating to Summit Employee Plans and copies of all applications and
correspondence to or from the IRS or the DOL with respect to any Summit
Employee Plan; (vii) all communications material to any Summit Employee or
Summit Employees relating to any
26
Summit Employee Plan and any proposed Summit Employee Plans, in each case,
relating to any amendments, terminations, establishments, increases or
decreases in benefits, acceleration of payments or vesting schedules or
other events which would result in any material liability to Summit; and
(viii) all registration statements and prospectuses prepared in connection
with each Summit Employee Plan.
(d) SUMMIT EMPLOYEE PLAN COMPLIANCE. Except as set forth in Section
3.13(d) of the Summit Schedules, (i) Summit has performed in all material
respects all obligations required to be performed by it under each Summit
Employee Plan and each Summit Employee Plan has been established and
maintained in all material respects in accordance with its terms and in
compliance with all applicable laws, statutes, orders, rules and
regulations, including but not limited to ERISA or the Code; (ii) to
Summit's knowledge no "prohibited transaction", within the meaning of
Section 4975 of the Code or Section 406 of ERISA, has occurred with respect
to any Summit Employee Plan; (iii) there are no actions, suits or claims
pending, or, to the knowledge of Summit, threatened or anticipated (other
than routine claims for benefits) against any Summit Employee Plan or
against the assets of any Summit Employee Plan; and (iv) each Summit
Employee Plan can be amended, terminated or otherwise discontinued after the
Effective Time in accordance with its terms, without liability to Summit,
OrCAD, the Surviving Corporation or any Affiliates (other than ordinary
administration expenses typically incurred in a termination event); (v)
there are no inquiries or proceedings pending or, to the knowledge of Summit
or any affiliates, threatened by the IRS or DOL with respect to any Summit
Employee Plan; and (vi) to Summit's knowledge neither Summit nor any
Affiliate is subject to any penalty or tax with respect to any Summit
Employee Plan under Section 402(i) of ERISA or Section 4975 through 4980 of
the Code.
(e) SUMMIT PENSION PLANS. Summit does not now, nor has it ever,
maintained, established, sponsored, participated in, or contributed to, any
Summit Pension Plan which is subject to Part 3 of Subtitle B of Title I of
ERISA, Title IV of ERISA or Section 412 of the Code.
(f) MULTIEMPLOYER PLANS. At no time has Summit contributed to or been
requested to contribute to any Multiemployer Plan.
(g) NO POST-EMPLOYMENT OBLIGATIONS. Except as set forth in Schedule
3.13(g), no Summit Employee Plan provides, or has any liability to provide,
life insurance, medical or other employee benefits to any Summit Employee
upon his or her retirement or termination of employment for any reason,
except as may be required by statute, and Summit has never represented,
promised or contracted (whether in oral or written form) to any Summit
Employee (either individually or to Summit Employees as a group) that such
Summit Employee(s) would be provided with life insurance, medical or other
employee welfare benefits upon their retirement or termination of
employment, except to the extent required by statute.
(h) EFFECT OF TRANSACTION.
(i) Except as provided in Section 1.6 of this Agreement or as set
forth on Schedule 3.13(h)(i), the execution of this Agreement and the
consummation of the transactions contemplated hereby will not (either
alone or upon the occurrence of any additional or subsequent events)
constitute an event under any Summit Employee Plan, Summit Employee
Agreement, trust or loan that will or may result in any payment (whether
of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation
to fund benefits with respect to any Summit Employee.
(ii) Except as set forth on Schedule 3.13(h)(ii), no payment or
benefit which will or may be made by Summit, OrCAD or any of their
respective affiliates with respect to any Summit Employee will be
characterized as an "excess parachute payment", within the meaning of
Section 280G(b)(1) of the Code.
27
(i) EMPLOYMENT MATTERS. Summit and each of its subsidiaries (i) is in
compliance in all material respects with all applicable foreign, federal,
state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and
hours, in each case, in each location in which Summit or any of its
subsidiaries employs persons; (ii) has withheld all amounts required by law
or by agreement to be withheld from the wages, salaries and other payments
to Summit Employees; (iii) is not liable for any material arrears of wages
or any material taxes or any material penalty for failure to comply with any
of the foregoing; and (iv) is not liable for any material payment to any
trust or other fund or to any governmental or administrative authority, with
respect to unemployment compensation benefits, social security or other
benefits or obligations for Summit Employees (other than routine payments to
be made in the normal course of business and consistent with past practice).
(j) LABOR. No work stoppage or labor strike against Summit is pending
or, to the knowledge of Summit, threatened. Except as set forth in Schedule
3.13(j), Summit is not involved in or, to the knowledge of Summit,
threatened with, any labor dispute, grievance, or litigation relating to
labor, safety or discrimination matters involving any Summit Employee,
including, without limitation, charges of unfair labor practices or
discrimination complaints, which, if adversely determined, would,
individually or in the aggregate, result in a Material Adverse Effect on
Summit. Neither Summit nor any of its subsidiaries has engaged in any unfair
labor practices within the meaning of the National Labor Relations Act which
would, individually or in the aggregate, directly or indirectly result in a
Material Adverse Effect on Summit. Except as set forth in Schedule 3.13(j),
Summit is not presently, nor has it been in the past, a party to, or bound
by, any collective bargaining agreement or union contract with respect to
Summit Employees and no collective bargaining agreement is being negotiated
by Summit.
3.14 SUMMIT EMPLOYEES; LABOR MATTERS.
To Summit's knowledge, no employee of Summit has violated any employment
contract, patent disclosure agreement or non competition agreement between such
employee and any former employer of such employee due to such employee being
employed by Summit and disclosing to Summit trade secrets or proprietary
information of such employer. To Summit's knowledge, there are no activities or
proceedings of any labor union to organize any employees of Summit or any of its
subsidiaries and there are no strikes, or material slowdowns, work stoppages or
lockouts, or threats thereof by or with respect to any employees of Summit or
any of its subsidiaries. Summit is not, and has never been, a party to any
collective bargaining agreement. Summit and its subsidiaries are in compliance
in all material respects with all applicable laws regarding employment
practices, terms and conditions of employment, and wages and hours (including,
without limitation, ERISA, WARN or any similar state or local law).
3.15 ENVIRONMENTAL MATTERS.
(a) HAZARDOUS MATERIAL. Except as reasonably would not be likely to
result in Material Adverse Effect on Summit, no underground storage tanks
and no Hazardous Materials, but excluding office and janitorial supplies,
are present, as a result of the actions of Summit or any of its subsidiaries
or any affiliate of Summit, or, to Summit's knowledge, as a result of any
actions of any third party or otherwise, in, on or under any property,
including the land and the improvements, ground water and surface water
thereof, that Summit or any of its subsidiaries has at any time owned,
operated, occupied or leased.
(b) HAZARDOUS MATERIALS ACTIVITIES. Except as reasonably would not be
likely to result in Material Adverse Effect on Summit (i) neither Summit nor
any of its subsidiaries has transported, stored, used, manufactured,
disposed of, released or exposed its employees or others to Hazardous
Materials in violation of any law, and (ii) neither Summit nor any of its
subsidiaries has engaged in any Hazardous Materials Activities in violation
of any rule, regulation, treaty or statute promulgated by
28
any Governmental Entity in effect prior to or as of the date hereof to
prohibit, regulate or control Hazardous Materials or any Hazardous Material
Activity.
(c) PERMITS. Summit and its subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"SUMMIT ENVIRONMENTAL PERMITS") necessary for the conduct of Summit's and
its subsidiaries' Hazardous Material Activities and other businesses of
Summit and its subsidiaries as such activities and businesses are currently
being conducted. Summit and its subsidiaries are in compliance in all
material respects with the terms of the Summit Environmental Permits.
(d) ENVIRONMENTAL LIABILITIES. No action, proceeding, revocation
proceeding, amendment procedure, writ, claim or injunction is pending, and
to Summit's knowledge, no action, proceeding, revocation proceeding,
amendment procedure, writ, claim or injunction has since January 1, 1997
been threatened by any Governmental Entity against Summit or any of its
subsidiaries concerning any Summit Environmental Permit, Hazardous Material
or any Hazardous Materials Activity of Summit or any of its subsidiaries.
3.16 AGREEMENTS, CONTRACTS AND COMMITMENTS. Neither Summit nor any of its
subsidiaries is a party to or is bound by:
(a) any employment or consulting agreement, contract or commitment with
any officer or director level employee or member of Summit's Board of
Directors, other than those that are terminable by Summit or any of its
subsidiaries on no more than thirty days notice without liability or
financial obligation, except to the extent general principles of wrongful
termination law may limit Summit's or any of its subsidiaries' ability to
terminate employees at will;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right 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 value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement;
(c) any agreement of indemnification or any guaranty other than: (i) any
agreement of indemnification or guaranty entered into in the ordinary course
of business, (ii) any agreement of indemnification entered into in
connection with the sale or license of software products in the ordinary
course of business, (iii) any agreement of indemnification entered into in
connection with services performed in the ordinary course of business, and
(iv) any indemnification agreement between Summit or any of its subsidiaries
and any of their respective officers, directors or employees;
(d) any agreement, contract or commitment containing any covenant
limiting in any material respect the right of Summit or any of its
subsidiaries to engage in any line of business which is material to Summit
and its subsidiaries taken as a whole or to compete with any person or
granting any exclusive distribution rights;
(e) any agreement, contract or commitment currently in force relating to
the disposition or acquisition by Summit or any of its subsidiaries or
subsequent parent or sister companies after the date of this Agreement of a
material amount of assets not in the ordinary course of business or pursuant
to which Summit has any material ownership interest in any corporation,
partnership, joint venture or other business enterprise;
(f) any joint marketing or development agreement currently in force
under which Summit or any of its subsidiaries have continuing material
obligations to jointly market any product, technology or service and which
may not be canceled without penalty upon notice of 90 days or less, or any
agreement pursuant to which Summit or any of its subsidiaries have
continuing material obligations to jointly develop any intellectual property
that will not be owned, in whole or in part, by Summit or any of its
subsidiaries and which may not be canceled without penalty upon notice of 90
days or less;
29
(g) any agreement, contract or commitment currently in force to provide
source code to any third party for any product or technology that is
material to Summit and its subsidiaries taken as a whole, except for (i) any
agreement, contract or commitment pursuant to which source code is provided
solely for maintenance purposes, and (ii) any source code escrow agreement
entered into in the ordinary course of business that solely contains
provisions relating to the release of source code if Summit and/or any of
its subsidiaries ceases to do business or fails to provide appropriate
maintenance; or
(h) any agreement, contract or commitment currently in force to license
any third party to manufacture or reproduce any Summit product, service or
technology except as a distributor in the normal course of business.
Each Summit Contract (as defined below) is in full force and effect. Neither
Summit nor any of its subsidiaries, nor to Summit's knowledge any other party to
a Summit Contract, is in breach, violation or default under, and neither Summit
nor any of its subsidiaries has received notice that it has breached, violated
or defaulted under, any of the material terms or conditions of any of the
agreements, contracts or commitments to which Summit or any of its subsidiaries
is a party or by which it is bound that are required to be disclosed in the
Summit Schedules pursuant to clauses (a) through (h) above or pursuant to
Section 3.9 hereof (any such agreement, contract or commitment, a "SUMMIT
CONTRACT") in such a manner as would permit any other party to cancel or
terminate any such Summit Contract, or would permit any other party to seek
damages, which would be reasonably likely to exceed $1 million (for any or all
of such breaches, violations or defaults, in the aggregate).
3.17 POOLING OF INTERESTS. To the knowledge of Summit, based on
consultation with its independent accountants, neither Summit nor any of its
directors, officers, affiliates or stockholders has taken any action which would
preclude Summit's ability to account for the Merger as a pooling of interests.
3.18 CHANGE OF CONTROL PAYMENTS. Section 3.18 of the Summit Schedules sets
forth each plan or agreement pursuant to which any amounts may become payable
(whether currently or in the future) to current or former employees, officers
and directors of Summit as a result of or in connection with the Merger.
3.19 STATEMENTS; PROXY STATEMENT/PROSPECTUS. The information supplied by
Summit and Merger Sub for inclusion in the Registration Statement (as defined in
Section 3.4(b)) shall not at the time the Registration Statement is filed with
the SEC and at the time it becomes effective under the Securities Act contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. The information supplied by Summit and Merger Sub for
inclusion in the Proxy Statement shall not, on the date the Proxy Statement is
first mailed to OrCAD's stockholders and Summit's stockholders or at the time of
the OrCAD Stockholders' Meeting or the Summit Stockholders' Meeting, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply as to form
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder. If at any time prior to the Effective Time any event
relating to Summit or any of its affiliates, officers or directors should be
discovered by Summit which may be required to be set forth in an amendment to
the Registration Statement or a supplement to the Proxy Statement, Summit shall
promptly inform OrCAD. Notwithstanding the foregoing, neither Summit nor Merger
Sub makes any representation or warranty with respect to any information
supplied by OrCAD which is contained in any of the foregoing documents.
3.20 BOARD APPROVAL. The Summit and Merger Sub Boards have, as of the date
of this Agreement, (i) determined that the Merger is in the best interests of
Summit and Merger Sub and their respective stockholders, (ii) approved and
adopted this Agreement and the Merger, and (iii) subject to the terms and
conditions set forth in this Agreement, determined to recommend that the
stockholders of Summit approve the issuance of shares of Summit Common Stock by
virtue of the Merger.
30
3.21 FAIRNESS OPINION. Summit's Board of Directors has received a written
opinion from Black & Company dated as of the date hereof, to the effect that as
of the date hereof, the Exchange Ratio is fair to Summit's stockholders from a
financial point of view and has delivered to OrCAD a copy of such opinion.
3.22 SECTION 203 OF THE DELAWARE LAW NOT APPLICABLE. The Summit Board has
taken all actions so that the restrictions contained in Section 203 of the
Delaware Law applicable to a "business combination" (as defined in such Section
203) will not apply to the execution, delivery or performance of this Agreement
or to the consummation of the Merger or the other transactions contemplated by
this Agreement.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS. During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement pursuant
to its terms or the Effective Time, OrCAD (which for the purposes of this
Article 4 shall include OrCAD and each of its subsidiaries) and Summit (which
for the purposes of this Article 4 shall include Summit and each of its
subsidiaries) shall, except to the extent that the other of them shall otherwise
consent in writing, carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted and in
compliance with all applicable laws and regulations, pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, pay or perform
other material obligations when due, and use its commercially reasonable efforts
consistent with past practices and policies to (i) preserve intact its present
business organization, (ii) keep available the services of its present officers
and employees and (iii) preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings. In addition, each of OrCAD and Summit will promptly notify the other
of any material event involving its business or operations.
In addition and without limiting the generality of the foregoing, except as
expressly contemplated or permitted by the terms of this Agreement, and except
in the case of OrCAD as provided in Article 4 of the OrCAD Schedules, and except
in the case of Summit as provided in Article 4 of the Summit Schedules, without
the prior written consent of the other, neither OrCAD nor Summit shall during
the period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement pursuant to its terms or the Effective Time,
do any of the following and neither OrCAD nor Summit shall permit its
subsidiaries to do any of the following (except as otherwise required by law):
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant or director stock plans or authorize
cash payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee
except payments in amounts consistent with policies and past practices or
pursuant to written agreements outstanding, or policies existing, on the
date hereof and as previously disclosed in writing to the other or made
available to the other, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights (including without
limitation distribution rights) to the OrCAD Intellectual Property or
products or the Summit Intellectual Property or products, as the case may
be, or enter into grants to future patent rights, other than non-exclusive
licenses and distribution rights in the ordinary course of business and
consistent with past practice;
(d) Declare or pay any dividends on or make any other distributions
(whether in cash, stock, equity securities or property) in respect of any
capital stock or split, combine or reclassify any capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
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(e) Repurchase or otherwise acquire, directly or indirectly, any shares
of capital stock, except repurchases of unvested shares at cost in
connection with the termination of the employment relationship with any
employee pursuant to agreements in effect as of the date hereof;
(f) Issue, grant, deliver, sell, authorize or propose the issuance,
delivery or sale of, any shares of capital stock or any securities
convertible into shares of capital stock, or subscriptions, rights, warrants
or options to acquire any shares of capital stock or any securities
convertible into shares of capital stock, or enter into other agreements or
commitments of any character obligating it to issue any such shares or
convertible securities, other than the issuance, delivery and/or sale of (i)
shares of OrCAD Common Stock or Summit Common Stock, as the case may be,
pursuant to the exercise of stock options outstanding as of the date of this
Agreement, (ii) options to purchase shares of OrCAD Common Stock or Summit
Common Stock, as the case may be, to be granted at fair market value in the
ordinary course of business consistent with past practice and in accordance
with stock option plans existing on the date hereof to non-officer
employees, provided that the aggregate options to be granted by OrCAD or
Summit shall not exceed 50,000 or 50,000, respectively, (iii) shares of
OrCAD Common Stock or Summit Common Stock, as the case may be, issuable upon
the exercise of the options referred to in clause (ii), and (iv) shares of
OrCAD Common Stock or Summit Common Stock, as the case may be, issuable to
participants in the OrCAD ESPP or the Summit's 1996 Employee Stock Purchase
Plan in accordance with their respective terms.
(g) Cause, permit or propose any amendments to any charter document or
Bylaw (or similar governing instruments of any subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a material portion of the assets of, or
by any other manner, any business or any corporation, partnership interest,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets which are material, individually or
in the aggregate, to the business of OrCAD or Summit, as the case may be, or
enter into any material joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate,
to the business of OrCAD or Summit, as the case may be, except in the
ordinary course of business consistent with past practice, or lend funds to
any third party (other than intercompany loans in the ordinary course of
business);
(j) Incur any indebtedness for borrowed money (other than (i) in
connection with the financing of ordinary course trade payables; (ii)
pursuant to existing credit facilities (or any ordinary course modification,
renewal or replacement thereof that does not increase the aggregate amount
that can be borrowed thereunder) in the ordinary course of business; or
(iii) in connection with leasing activities in the ordinary course of
business) or guarantee any indebtedness of any person for borrowed money
(except that OrCAD may guarantee any indebtedness of any subsidiary of
OrCAD, and any subsidiary of OrCAD may guarantee any indebtedness of OrCAD
or of any other subsidiary of OrCAD, and Summit may guarantee any
indebtedness of any subsidiary of Summit, and any subsidiary of Summit may
guarantee any indebtedness of Summit or of any other subsidiary of Summit),
or issue or sell any debt securities or warrants or rights to acquire debt
securities or guarantee any debt securities of others;
(k) Adopt or amend any employee benefit plan or employee stock purchase
or employee stock option plan, or enter into any employment contract (other
than: (y) offer letters and letter agreements with employees who are
terminable "at will," or (z) as required by law), pay any special bonus or
special remuneration to any director or employee (except to the extent
contemplated by Section 2.12), or increase the salaries or wage rates of its
officers or employees other than in the ordinary course of business,
consistent with past practice, or change in any material respect any
management policies or procedures (including those relating to hiring);
provided, however, that, subject to the approval of the
32
Internal Revenue Service, OrCAD may elect to terminate any 401(k) plan
maintained by OrCAD or any of its subsidiaries; provided, further, that, in
accordance with Section 5.19, OrCAD shall be permitted to terminate any
401(k) plan maintained by OrCAD or any of its subsidiaries.
(l) Make any payments outside of the ordinary course of business for
purposes of settling any dispute;
(m) Take any action that would interfere with Summit's ability to
account for the Merger as a pooling of interests whether or not otherwise
permitted by the provisions of this Article IV;
(n) Other than in the ordinary course of business, make or change any
material election in respect of Taxes, adopt or change any accounting method
in respect of Taxes, file any material Tax Return or any amendment to a
material Tax Return, enter into any closing agreement, settle any claim or
assessment in respect of Taxes, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of Taxes;
(o) Revalue any assets, including writing down the value of inventory or
writing off notes or accounts receivable, other than in the ordinary course
of business consistent with past practices or pursuant to arm's length
transactions on commercially reasonable terms;
(p) Amend or terminate any OrCAD Contract or Summit Contract, as
applicable, except in the ordinary course of business consistent with past
practices;
(q) Waive or release any material right or claim, except in the ordinary
course of business consistent with past practices; or
(r) Agree in writing or otherwise to take any of the actions described
in Section 4.1(a) through 4.1(q) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 REGISTRATION STATEMENT; OTHER FILINGS; BOARD RECOMMENDATIONS.
(a) As promptly as practicable after the execution of this Agreement,
OrCAD and Summit will prepare, and file with the SEC, the Proxy Statement
and Summit will prepare and file with the SEC the Registration Statement in
which the Proxy Statement will be included as a prospectus. Each of OrCAD
and Summit will respond to any comments of the SEC, will use its respective
reasonable best efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after such
filing and will cause the Proxy Statement to be mailed to their respective
stockholders at the earliest practicable time after being declared effective
by the SEC. As promptly as practicable after the date of this Agreement,
each of OrCAD and Summit will prepare and file any other documents required
to be filed by it under the Exchange Act, the Securities Act or any other
Federal, foreign or Blue Sky or related laws relating to the Merger and the
transactions contemplated by this Agreement (the "OTHER FILINGS"). Each of
OrCAD and Summit will notify the other promptly upon the receipt of any
comments from the SEC or its staff or any other government officials and of
any request by the SEC or its staff or any other government officials for
amendments or supplements to the Registration Statement, the Proxy Statement
or any Other Filing or for additional information and will supply the other
with copies of all correspondence between such party or any of its
representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Registration
Statement, the Proxy Statement, the Merger or any Other Filing. Each of
OrCAD and Summit will cause all documents that it is responsible for filing
with the SEC or other regulatory authorities under this Section 5.1(a) to
comply in all material respects with all applicable requirements of law and
the rules and regulations promulgated thereunder. Whenever any event occurs
that is required to be set forth in an amendment or supplement to the Proxy
Statement,
33
the Registration Statement or any Other Filing, OrCAD or Summit, as the case
may be, will promptly inform the other of such occurrence and cooperate in
filing with the SEC or its staff or any other government officials, and/or
mailing to stockholders of OrCAD or Summit, such amendment or supplement.
(b) The Proxy Statement will include the recommendation of the OrCAD
Board in favor of adoption and approval of this Agreement and approval of
the Merger (except that notwithstanding anything to the contrary contained
in this Agreement, the OrCAD Board may withdraw, modify or refrain from
making such recommendation to the extent that the OrCAD Board determines, in
good faith, after consultation with outside legal counsel, that compliance
with the OrCAD Board's fiduciary duties under applicable law would require
it to do so). In addition, the Proxy Statement will include the
recommendation of the Summit Board in favor of the issuance of shares of
Summit Common Stock by virtue of the Merger (except that notwithstanding
anything to the contrary contained in this Agreement, the Summit Board may
withdraw, modify or refrain from making such recommendation to the extent
that the Summit Board determines, in good faith, after consultation with
outside legal counsel, that compliance with the Summit Board's fiduciary
duties under applicable law would require it to do so).
5.2 MEETING OF STOCKHOLDERS. Promptly after the date hereof, OrCAD will
take all action necessary in accordance with Delaware Law and its Certificate of
Incorporation and Bylaws to convene the OrCAD Stockholders' Meeting to be held
as promptly as practicable, and in any event (to the extent permissible under
applicable law) within 45 days after the declaration of effectiveness of the
Registration Statement, for the purpose of voting upon this Agreement and the
Merger. OrCAD will consult with Summit and use its reasonable best efforts to
hold the OrCAD Stockholders' Meeting on the same day as the Summit Stockholders'
Meeting. Promptly after the date hereof, Summit will take all action necessary
in accordance with Delaware Law and its Certificate of Incorporation and Bylaws
to convene the Summit Stockholders' Meeting to be held as promptly as
practicable, and in any event (to the extent permissible under applicable law)
within 45 days after the declaration of effectiveness of the Registration
Statement, for the purpose of voting upon the issuance of shares of Summit
Common Stock by virtue of the Merger. Unless the OrCAD Board withdraws, modifies
or refrains from making the recommendation set forth in Section 5.1(b) in
accordance with Section 5.1(b), OrCAD will use its best efforts to solicit from
its stockholders proxies in favor of the adoption and approval of this Agreement
and the approval of the Merger and will take all other action necessary or
advisable to secure the vote or consent of its stockholders required by the
rules of the National Association of Securities Dealers, Inc. or Delaware Law to
obtain such approvals. Unless the Summit Board withdraws, modifies or refrains
from making the recommendation set forth in Section 5.1(b) in accordance with
Section 5.1(b), Summit will use its best efforts to solicit from its
stockholders proxies in favor of the approval of the issuance of shares of
Summit Common Stock by virtue of the Merger, and will take all other action
necessary or advisable to secure the vote or consent of its stockholders
required by the rules of the National Association of Securities Dealers, Inc. or
Delaware Law to obtain such approvals.
5.3 CONFIDENTIALITY; ACCESS TO INFORMATION.
(a) The parties acknowledge that OrCAD and Summit have previously
executed a Non-Disclosure Agreement, dated as of August 31, 1998 (the
"NON-DISCLOSURE AGREEMENT"), which Non-Disclosure Agreement will continue in
full force and effect in accordance with its terms.
(a) OrCAD will afford Summit and its accountants, counsel and other
representatives reasonable access during normal business hours to the
properties, books, records and personnel of OrCAD during the period prior to
the Effective Time to obtain all information concerning the business,
including the status of product development efforts, properties, results of
operations, financial condition and personnel of OrCAD, as Summit may
reasonably request. Summit will afford OrCAD and its accountants, counsel
and other representatives reasonable access during normal business hours
34
to the properties, books, records and personnel of Summit during the period
prior to the Effective Time to obtain all information concerning the
business, including the status of product development efforts, properties,
results of operations, financial condition and personnel of Summit, as OrCAD
may reasonably request. No information or knowledge obtained by either
Summit or OrCAD in any investigation pursuant to this Section 5.3 will
affect or be deemed to modify any representation or warranty contained
herein.
5.4 NO SOLICITATION BY ORCAD.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to its terms, OrCAD
and its subsidiaries will not, and will instruct their respective directors,
officers, employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, (i) solicit or knowingly
encourage submission of any OrCAD Acquisition Proposal (as defined below) by
any person, entity or group (other than Summit and its affiliates, agents
and representatives), or (ii) participate in any discussions or negotiations
with, or disclose any non-public information concerning OrCAD or any of its
subsidiaries to, or afford any access to the properties, books or records of
OrCAD or any of its subsidiaries to, or otherwise assist or facilitate, or
enter into any agreement or understanding with, any person, entity or group
(other than Summit and its affiliates, agents and representatives), in
connection with any OrCAD Acquisition Proposal with respect to OrCAD. For
the purposes of this Agreement, an "ORCAD ACQUISITION PROPOSAL" means any
proposal or offer for: (i) any merger, consolidation, sale of substantial
assets or similar transactions involving OrCAD or any of its subsidiaries
(other than sales of assets or inventory in the ordinary course of business
or as permitted under the terms of this Agreement), (ii) sale by OrCAD of
any shares of capital stock of OrCAD except as may be permitted pursuant to
Article 4, (iii) without limiting clause (ii) above, the acquisition by any
person (including without limitation by way of a tender offer or an exchange
offer) of beneficial ownership or a right to acquire beneficial ownership
of, or the formation of any "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) which beneficially
owns, or has the right to acquire beneficial ownership of, 15% or more of
the then outstanding shares of capital stock of OrCAD; or (iv) any public
announcement of a proposal, plan or intention to do any of the foregoing or
any agreement to engage in any of the foregoing. OrCAD will immediately
cease any and all existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any OrCAD Acquisition Proposal.
OrCAD will (i) notify Summit within 24 hours if it receives any OrCAD
Acquisition Proposal or written inquiry or any written request for
information or access in connection with a potential OrCAD Acquisition
Proposal and (ii) as promptly as practicable notify Summit of the
significant terms and conditions of any such OrCAD Acquisition Proposal. In
addition, subject to the other provisions of this Section 5.4, from and
after the date of this Agreement until the earlier of the Effective Time and
termination of this Agreement pursuant to its terms, OrCAD and its
subsidiaries will not, and will instruct their respective directors,
officers, employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, make or authorize any public
statement, recommendation or solicitation in support of any OrCAD
Acquisition Proposal made by any person, entity or group (other than Summit
or any of its affiliates); PROVIDED, HOWEVER, that nothing contained in this
Agreement shall prohibit the OrCAD Board from taking and disclosing to
OrCAD's stockholders a position with respect to a tender offer pursuant to
Rules 14d-9 and 14e-2 promulgated under the Exchange Act or otherwise
complying with the requirements and prohibitions of such rules.
(b) Notwithstanding anything to the contrary contained in Section 5.4(a)
or elsewhere in this Agreement, prior to the Effective Time, OrCAD may, to
the extent the OrCAD Board determines, in good faith, after consultation
with outside legal counsel, that compliance with the OrCAD Board's fiduciary
duties under applicable law require it to do so, participate in discussions
or negotiations with, and, subject to the requirements of Section 5.4(c),
furnish information to any person, entity or group after such person, entity
or group has delivered to OrCAD in writing, an unsolicited bona fide
35
OrCAD Acquisition Proposal that the OrCAD Board determines, in its good
faith reasonable judgment after consultation with its independent financial
advisors: (x) would result in a transaction more favorable than the Merger
to the stockholders of OrCAD from a financial point of view, (y) for which
financing, to the extent required, is committed and (z) is likely to be
consummated (a "ORCAD SUPERIOR PROPOSAL"). In addition, notwithstanding the
provisions of Section 5.4(a) or any other provisions of this Agreement, in
connection with a possible OrCAD Acquisition Proposal, OrCAD may refer any
third party to this Section 5.4 or make a copy of this Section 5.4 available
to a third party. In the event OrCAD receives an OrCAD Superior Proposal,
nothing contained in this Agreement (but subject to the terms of this
Section 5.4(b)) will prevent the OrCAD Board from recommending such OrCAD
Superior Proposal to its stockholders, if the OrCAD Board determines, in
good faith, after consultation with outside legal counsel, that such action
is required to comply with its fiduciary duties under applicable law; in
such case, the OrCAD Board may (in accordance with Section 5.1(b)) withdraw,
modify or refrain from making its recommendation set forth in Section
5.1(b), and, to the extent it does so, OrCAD may refrain from soliciting
proxies to secure the vote of its stockholders as may otherwise be required
by Section 5.2; PROVIDED, HOWEVER, that OrCAD shall (i) provide Summit at
least 24 hours prior notice of any OrCAD Board meeting at which it is
reasonably expected to contemplate an OrCAD Superior Proposal and (ii) not
recommend to its stockholders an OrCAD Superior Proposal for a period of not
less than 48 hours after Summit receives a copy of such OrCAD Superior
Proposal; and PROVIDED FURTHER, that unless this Agreement is terminated
pursuant to Section 7.1, nothing contained in this Section shall limit
OrCAD's obligation to hold and convene the OrCAD Stockholders' Meeting
(regardless of whether the recommendation of the OrCAD Board shall have been
withdrawn, modified or not yet made) or to provide the OrCAD stockholders
with material information relating to such meeting.
(c) Notwithstanding anything to the contrary in this Section 5.4, OrCAD
will not provide any non-public information to a third party unless: (i)
OrCAD provides such non-public information pursuant to a nondisclosure
agreement with terms regarding the protection of confidential information at
least as restrictive as such terms in the Non-Disclosure Agreement; and (ii)
such non-public information has been previously delivered to Summit.
5.5 NO SOLICITATION BY SUMMIT.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to its terms,
Summit and its subsidiaries will not, and will instruct their respective
directors, officers, employees, representatives, investment bankers, agents
and affiliates not to, directly or indirectly, (i) solicit or knowingly
encourage submission of any Summit Acquisition Proposal (as defined below)
by any person, entity or group, or (ii) participate in any discussions or
negotiations with, or disclose any non-public information concerning Summit
or any of its subsidiaries to, or afford any access to the properties, books
or records of Summit or any of its subsidiaries to, or otherwise assist or
facilitate, or enter into any agreement or understanding with, any person,
entity or group, in connection with any Summit Acquisition Proposal with
respect to Summit. For the purposes of this Agreement, a "SUMMIT ACQUISITION
PROPOSAL" means any proposal or offer for: (i) any merger, consolidation,
sale of substantial assets or similar transactions involving Summit or any
of its subsidiaries (other than sales of assets or inventory in the ordinary
course of business or as permitted under the terms of this Agreement), (ii)
sale by Summit of any shares of capital stock of Summit except as may be
permitted pursuant to Article 4, (iii) without limiting clause (ii) above,
the acquisition by any person (including without limitation by way of a
tender offer or an exchange offer) of beneficial ownership or a right to
acquire beneficial ownership of, or the formation of any "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) which beneficially owns, or has the right to acquire beneficial
ownership of, 15% or more of the then outstanding shares of capital stock of
Summit; or (iv) any public announcement of a proposal, plan or intention to
do any of the foregoing or any agreement to engage in any of the foregoing.
Summit will
36
immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Summit Acquisition Proposal. Summit will (i) notify OrCAD within 24 hours if
it receives any Summit Acquisition Proposal or written inquiry or any
written request for information or access in connection with a potential
Summit Acquisition Proposal and (ii) as promptly as practicable notify OrCAD
of the significant terms and conditions of any such Summit Acquisition
Proposal. In addition, subject to the other provisions of this Section 5.5,
from and after the date of this Agreement until the earlier of the Effective
Time and termination of this Agreement pursuant to its terms, Summit and its
subsidiaries will not, and will instruct their respective directors,
officers, employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, make or authorize any public
statement, recommendation or solicitation in support of any Summit
Acquisition Proposal made by any person, entity or group; PROVIDED, HOWEVER,
that nothing contained in this Agreement shall prohibit the Summit Board
from taking and disclosing to Summit's stockholders a position with respect
to a tender offer pursuant to Rules 14d-9 and 14e-2 promulgated under the
Exchange Act or otherwise complying with the requirements and prohibitions
of such rules.
(b) Notwithstanding anything to the contrary contained in Section 5.5(a)
or elsewhere in this Agreement, prior to the Effective Time, Summit may, to
the extent the Summit Board determines, in good faith, after consultation
with outside legal counsel, that compliance with the Summit Board's
fiduciary duties under applicable law require it to do so, participate in
discussions or negotiations with, and, subject to the requirements of
Section 5.5(c), below, furnish information to any person, entity or group
after such person, entity or group has delivered to Summit in writing, an
unsolicited bona fide Summit Acquisition Proposal that the Summit Board
determines, in its good faith reasonable judgment after consultation with
its independent financial advisors: (x) would result in a transaction more
favorable than the Merger to the stockholders of Summit from a financial
point of view, (y) for which financing, to the extent required, is committed
and (z) is likely to be consummated (a "SUMMIT SUPERIOR PROPOSAL"). In
addition, notwithstanding the provisions of Section 5.5(a) above or any
other provisions of this Agreement, in connection with a possible Summit
Acquisition Proposal, Summit may refer any third party to this Section 5.5
or make a copy of this Section 5.5 available to a third party. In the event
Summit receives a Summit Superior Proposal, nothing contained in this
Agreement (but subject to the terms of this paragraph (b)) will prevent the
Summit Board from recommending such Summit Superior Proposal to its
stockholders, if the Summit Board determines, in good faith, after
consultation with outside legal counsel, that such action is required to
comply with its fiduciary duties under applicable law; in such case, the
Summit Board may (in accordance with Section 5.1(b)) withdraw, modify or
refrain from making its recommendation set forth in Section 5.1(b), and, to
the extent it does so, Summit may refrain from soliciting proxies to secure
the vote of its stockholders as may otherwise be required by Section 5.2;
PROVIDED, HOWEVER, that Summit shall (i) provide OrCAD at least 24 hours
prior notice of any Summit Board meeting at which it is reasonably expected
to contemplate a Summit Superior Proposal and (ii) not recommend to its
stockholders a Summit Superior Proposal for a period of not less than 48
hours after OrCAD receives a copy of such Summit Superior Proposal and
PROVIDED FURTHER, that unless this Agreement is terminated pursuant to
Section 7.1, nothing contained in this Section shall limit Summit's
obligation to hold and convene the Summit Stockholders' Meeting (regardless
of whether the recommendation of the Summit Board shall have been withdrawn,
modified or not yet made) or to provide the Summit stockholders with
material information relating to such meeting.
(c) Notwithstanding anything to the contrary in this Section 5.5, Summit
will not provide any non-public information to a third party unless: (i)
Summit provides such non-public information pursuant to a nondisclosure
agreement with terms regarding the protection of confidential information at
least as restrictive as such terms in the Non-Disclosure Agreement; and (ii)
such non-public information has been previously delivered to OrCAD.
37
5.6 PUBLIC DISCLOSURE. Summit and OrCAD will consult with each other, and
to the extent practicable, agree, before issuing any press release or otherwise
making any public statement with respect to the Merger, this Agreement, an OrCAD
Acquisition Proposal or a Summit Acquisition Proposal, and will not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with a national
securities exchange or the Nasdaq National Market System. The parties have
agreed to the text of the joint press release announcing the signing of this
Agreement.
5.7 LEGAL REQUIREMENTS. Each of Summit, Merger Sub and OrCAD will take all
reasonable actions necessary or desirable to comply promptly with all legal
requirements which may be imposed on them with respect to the consummation of
the transactions contemplated by this Agreement (including furnishing all
information required in connection with approvals by or filings with any
Governmental Entity, and prompt resolution of any litigation prompted hereby)
and will promptly cooperate with and furnish information to any party hereto
necessary in connection with any such filings with or investigations by any
Governmental Entity, and any other such requirements imposed upon any of them or
their respective subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement. Summit will use its commercially
reasonable efforts to take such steps as may be necessary to comply with the
securities and Blue Sky laws of all jurisdictions that are applicable to the
issuance of shares of Summit Common Stock pursuant hereto. OrCAD will use its
reasonable best efforts to assist Summit as may be necessary to comply with the
securities and Blue Sky laws of all jurisdictions which are applicable in
connection with the issuance of shares of Summit Common Stock pursuant hereto.
5.8 THIRD PARTY CONSENTS. As soon as practicable following the date
hereof, Summit and OrCAD will each use its commercially reasonable efforts to
obtain any material consents, waivers and approvals under any of its or its
subsidiaries' agreements, contracts, licenses or leases required to be obtained
in connection with the consummation of the transactions contemplated hereby.
5.9 NOTIFICATION OF CERTAIN MATTERS. Summit and Merger Sub will give
prompt notice to OrCAD, and OrCAD will give prompt notice to Summit, after
obtaining knowledge of (a) the occurrence, or non-occurrence, of any event that
would be reasonably likely to cause (x) any representation or warranty contained
in this Agreement and made by it to be untrue or inaccurate in any material
respect at any time from the date of this Agreement to the Effective Time such
that the conditions set forth in Section 6.2(a) or 6.3(a), as the case may be,
would not be satisfied as a result thereof or (y) any material failure of Summit
and Merger Sub or OrCAD, as the case may be, to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement such that the conditions set forth in
Section 6.2(b) or 6.3(b), as the case may be, would not be satisfied as a result
thereof, or (b) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement. Notwithstanding the foregoing,
the delivery of any notice pursuant to this Section 5.9 will not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
5.10 BEST EFFORTS AND FURTHER ASSURANCES. Subject to the respective rights
and obligations of Summit and OrCAD under this Agreement, each of the parties to
this Agreement will use its reasonable best efforts to effectuate the Merger and
the other transactions contemplated hereby and to fulfill and cause to be
fulfilled the conditions to closing under this Agreement; provided that neither
Summit nor OrCAD nor any subsidiary or affiliate thereof will be required to
agree to any divestiture by itself or any of its affiliates of shares of capital
stock or of any business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or to own
or exercise control of such assets, properties and stock. Subject to the
foregoing, each party hereto, at the reasonable request of another party hereto,
will execute and deliver such other instruments and do and perform such other
acts and things as may be necessary or desirable for effecting completely the
consummation of the transactions contemplated hereby.
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5.11 STOCK OPTIONS.
(a) At the Effective Time, each outstanding option to purchase shares of
OrCAD Common Stock (each a "ORCAD STOCK OPTION") under the OrCAD Stock
Option Plans, whether or not exercisable, will be assumed by Summit. Each
OrCAD Stock Option so assumed by Summit under this Agreement will continue
to have, and be subject to, the same terms and conditions (including vesting
conditions) set forth in the applicable OrCAD Stock Option Plan immediately
prior to the Effective Time and the Stock Option by which it is evidenced,
except that (i) each OrCAD Stock Option will be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Summit Common Stock equal to the product of the maximum number of shares of
OrCAD Common Stock that could be issuable upon exercise of such OrCAD Stock
Option if all vesting conditions are satisfied multiplied by the Exchange
Ratio, rounded to the nearest whole share of Summit Common Stock and (ii)
the per share exercise price for the Summit Common Stock issuable upon
exercise of such assumed OrCAD Stock Option will be equal to the quotient
determined by dividing the exercise price per share of OrCAD Common Stock at
which such OrCAD Stock Option was exercisable immediately prior to the
Effective Time by the Exchange Ratio, rounded to the nearest whole cent.
After the Effective Time, Summit will issue to each holder of an outstanding
OrCAD Stock Option a notice describing the foregoing assumption of such
OrCAD Stock Option by Summit. It is intended that OrCAD Stock Options
assumed by Summit shall qualify following the Effective Time as incentive
stock options as defined in Section 422 of the Code to the extent OrCAD
Stock Options qualified as incentive stock options immediately prior to the
Effective Time and the provisions of this Section 5.11 shall be applied
consistent with such intent.
(b) Summit will reserve sufficient shares of Summit Common Stock for
issuance under Section 5.11 and under Section 1.6(c) hereof.
(c) OrCAD shall take such actions as are necessary to shorten the
Offering Period (as such term is used in the OrCAD ESPP) then in progress by
setting up a new Purchase Date (as such term is used in OrCAD ESPP) to be
the last trading day on which the shares of OrCAD Common Stock are quoted on
the Nasdaq National Market immediately prior to the Effective Time (the
"Final OrCAD Purchase Date"); provided, that, such change in the Purchase
Date shall be conditioned upon the consummation of the Merger. On the Final
OrCAD Purchase Date, OrCAD shall apply the funds credited as of such date
under the OrCAD ESPP within each participant's payroll withholdings account
to the purchase of whole shares of OrCAD Common Stock in accordance with the
terms of the OrCAD ESPP. The cost to each participant in the OrCAD ESPP for
a share of OrCAD Common Stock shall be the lower of 85% of the closing sale
price of OrCAD Common Stock on the Nasdaq National Market on (i) the first
day of the then current Offering Period or (ii) the Final OrCAD Purchase
Date.
(d) Employees of OrCAD as of the Effective Time shall be permitted to
participate in Summit's Employee Stock Purchase Plan commencing on the first
enrollment date following the Effective Time, subject to compliance with the
eligibility provisions of such plan.
5.12 FORM S-8. Summit will file a Registration Statement on Form S-8 for
the shares of Summit Common Stock issuable with respect to assumed OrCAD Stock
Options as soon as reasonably practical after the Effective Time (not to exceed
five business days) and will use its reasonable best efforts to maintain the
effectiveness of such registration statement thereafter for so long as any of
such options remain outstanding.
5.13 NASDAQ LISTING. Summit agrees to authorize for listing on the Nasdaq
National Market System the shares of Summit Common Stock issuable, and those
required to be reserved for issuance, in connection with the Merger, upon
official notice of issuance.
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5.14 ORCAD AFFILIATE AGREEMENT. Set forth on the OrCAD Schedules is a list
of those persons who may be deemed to be, in OrCAD's reasonable judgment,
affiliates of OrCAD within the meaning of Rule 145 promulgated under the
Securities Act (each a "ORCAD RULE 145 AFFILIATE"). OrCAD will provide Summit
with such information and documents as Summit reasonably requests for purposes
of reviewing such list. OrCAD will use its reasonable best efforts to deliver or
cause to be delivered to Summit, as promptly as practicable on or following the
date hereof, from each OrCAD Rule 145 Affiliate an executed affiliate agreement
in substantially the form attached hereto as EXHIBIT C (the "ORCAD AFFILIATE
AGREEMENT"), each of which will be in full force and effect as of the Effective
Time. Summit will be entitled to place appropriate legends on the shares of
Summit Common Stock to be received by an OrCAD Affiliate pursuant to the terms
of this Agreement, and to issue appropriate stop transfer instructions to the
transfer agent for the Summit Common Stock, consistent with the terms of the
OrCAD Affiliate Agreement.
5.15 SUMMIT AFFILIATE AGREEMENT. Set forth on the Summit Schedules is a
list of those persons who may be deemed to be, in Summit's reasonable judgment,
affiliates of Summit within the meaning of Rule 145 promulgated under the
Securities Act (each a "SUMMIT RULE 145 AFFILIATE"). Summit will provide OrCAD
with such information and documents as OrCAD reasonably requests for purposes of
reviewing such list. Summit will use its reasonable best efforts to deliver or
cause to be delivered to Summit, as promptly as practicable on or following the
date hereof, from each Summit Rule 145 Affiliate an executed affiliate agreement
in substantially the form attached hereto as EXHIBIT D (the "SUMMIT AFFILIATE
AGREEMENT"), each of which will be in full force and effect as of the Effective
Time.
5.16 COMFORT LETTER. At the request of Summit, OrCAD shall use reasonable
best efforts to cause KPMG Peat Marwick LLP, certified public accountants to
OrCAD, to provide a letter reasonably acceptable to Summit, relating to their
review of the financial statements relating to OrCAD contained in or
incorporated by reference in the Registration Statement. If Summit makes such a
request, then Summit shall use reasonable best efforts to cause
PriceWaterhouseCoopers, certified public accountants to Summit, to provide a
letter reasonably acceptable to OrCAD, relating to their review of the financial
statements relating to Summit contained in or incorporated by reference in the
Registration Statement.
5.17 POOLING. Prior to the earlier of termination of this Agreement and
the Effective Time, neither OrCAD nor Summit will take any action that could
interfere with Summit's ability to account for the Merger as a pooling of
interests.
5.18 CONTINUE NASDAQ QUOTATION. OrCAD shall continue the quotation of
OrCAD Common Stock and Summit shall continue the quotation of Summit Common
Stock on The Nasdaq National Market to the extent necessary so that appraisal
rights will not be available to stockholders of OrCAD under Delaware Law.
5.19 ORCAD 401(k) PLAN. At the request of Summit, OrCAD shall take all
necessary corporate action to terminate, or cause its subsidiaries to terminate,
as the case may be, all 401(k) plans maintained by OrCAD or any of its
subsidiaries.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been approved and
adopted, and the Merger shall have been duly approved, by the requisite vote
under applicable law, by the stockholders of OrCAD; and the issuance of
shares of Summit Common Stock by virtue of the Merger shall have been duly
approved by the requisite vote under applicable law and the rules of the
National Association of Securities Dealers, Inc. by the stockholders of
Summit.
40
(b) REGISTRATION STATEMENT EFFECTIVE; PROXY STATEMENT. The SEC shall
have declared the Registration Statement effective. No stop order suspending
the effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose, and no similar
proceeding in respect of the Proxy Statement, shall have been initiated or
threatened in writing by the SEC.
(c) NO ORDER. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which has the effect of making the Merger
illegal or otherwise prohibiting consummation of the Merger.
(d) TAX OPINIONS. Summit and OrCAD shall each have received
substantially identical written opinions from their respective tax counsel
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. and ▇▇▇▇ ▇▇▇▇▇ LLP, respectively),
in form and substance reasonably satisfactory to them, to the effect that
the Merger will constitute a reorganization within the meaning of Section
368(a) of the Code and such opinions shall not have been withdrawn;
PROVIDED, HOWEVER, that if the counsel to either Summit or OrCAD does not
render such opinion, this condition shall nonetheless be deemed to be
satisfied with respect to such party if counsel to the other party renders
such opinion to such party. The parties to this Agreement agree to make such
reasonable representations as requested by such counsel for the purpose of
rendering such opinions.
(e) NASDAQ LISTING. The shares of Summit Common Stock issuable to
stockholders of OrCAD pursuant to this Agreement and such other shares of
Summit Common Stock required to be reserved for issuance in connection with
the Merger shall have been authorized for quotation on the Nasdaq National
Market System upon official notice of issuance.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF ORCAD. The obligation of OrCAD
to consummate and effect the Merger shall be subject to the satisfaction at or
prior to the Closing Date of each of the following conditions, any of which may
be waived, in writing, exclusively by OrCAD:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Summit and Merger Sub contained in this Agreement shall have been true
and correct as of the date of this Agreement and as of the Closing Date
except (i) to the extent that the failure of such representations and
warranties (other than the representation in Sections 3.2, 3.3 and 3.22) to
be true and correct in each case or in the aggregate does not constitute a
Material Adverse Effect on Summit, (ii) for changes contemplated by this
Agreement and (iii) for those representations and warranties which address
matters only as of the date of this Agreement or any other particular date
(which shall have been true and correct as of such particular date except to
the extent that the failure of such representations and warranties to have
been true and correct as of such particular date does not constitute a
Material Adverse Effect on Summit) (it being understood that, for purposes
of determining the accuracy of such representations and warranties all
"Material Adverse Effect" qualifications and other qualifications based on
the word "material" or similar phrases contained in such representations and
warranties shall be disregarded). OrCAD shall have received a certificate
with respect to the foregoing signed on behalf of Summit and Merger Sub by
their respective Chief Executive Officers and the Chief Financial Officers.
(b) AGREEMENTS AND COVENANTS. Summit and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
them on or prior to the Closing Date, and OrCAD shall have received a
certificate to such effect signed on behalf of Summit and Merger Sub by
their respective Chief Executive Officers and the Chief Financial Officers.
(c) NO MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall have been no Material Adverse Effect on Summit, nor shall there
exist any condition that, to the knowledge of the
41
Chief Executive Officer and the Chief Financial Officer of Summit, would
reasonably be expected to result in a Material Adverse Effect on Summit; and
OrCAD shall have received a certificate signed on behalf of Summit by the
Chief Executive Officer and the Chief Financial Officer of Summit to such
effect. For purposes of this Section 6.2(c), neither (i) a decrease in the
trading price of Summit Common Stock from the trading price on the date of
this Agreement, nor (ii) any adverse development in the results of
operations of Summit for the quarter ending September 30, 1998 shall
constitute a "Material Adverse Effect."
(d) OPINION OF ACCOUNTANTS. OrCAD shall have received a letter from
KPMG Peat Marwick LLP dated within two (2) business days prior to the
Effective Time regarding its concurrence with the conclusion of OrCAD
management as to the appropriateness of pooling of interest accounting for
the Merger under Accounting Principles Board Opinion No. 16, if the Merger
is consummated in accordance with this Agreement.
(e) CONSENTS. Summit shall have obtained all consents, waivers and
approvals required in connection with the consummation of the transactions
contemplated hereby under the agreements, contracts, licenses or leases set
forth on Schedule 6.2(e) of the OrCAD Schedules.
(f) ELECTION OF BOARD. Summit shall have amended its bylaws,
reconstituted its Board and elected and delegated powers and duties to the
committees as required by Exhibit E, effective as of the Effective Time.
(g) ELECTION OF OFFICERS. ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have resigned as
President of Summit (retaining the office of Chief Executive Officer), and
the Board of Summit shall have appointed ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as President and
Chief Operating Officer of Summit effective as of the Effective Time. The
Board of Summit shall have appointed such additional executive officers of
Summit as are reasonably acceptable to each of ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇.
(h) RESERVATION OF SHARES. The Board of Summit shall have caused to be
reserved all shares necessary to consummate the Merger, and shall have
authorized their delivery in accordance with the terms of this Agreement,
and certified copies of the minutes establishing the foregoing shall have
been delivered to OrCAD.
(i) REVENUE. Summit shall have recognized aggregate revenue in
accordance with GAAP applied consistently with prior periods of not less
than $10,080,000 for the quarter ending September 30, 1998.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF SUMMIT AND MERGER SUB. The
obligations of Summit and Merger Sub to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Summit:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of OrCAD contained in this Agreement shall have been true and correct as of
the date of this Agreement and as of the Closing Date except (i) to the
extent that the failure of such representations and warranties (other than
the representations in Sections 2.2, 2.3, 2.19 and 2.22) to be true and
correct in each case or in the aggregate does not constitute a Material
Adverse Effect on OrCAD, (ii) for changes contemplated by this Agreement and
(iii) for those representations and warranties which address matters only as
of the date of this Agreement or any other particular date (which shall have
been true and correct as of such particular date except to the extent that
the failure of such representations and warranties to be true and correct as
of such particular date does not constitute a Material Adverse Effect on
OrCAD) (it being understood that, for purposes of determining the accuracy
of such representations and warranties all "Material Adverse Effect"
qualifications and other qualifications based on the word "material" or
similar phrases contained in such representations and warranties shall be
disregarded).
42
Summit shall have received a certificate with respect to the foregoing
signed on behalf of OrCAD by the Chief Executive Officer and the Chief
Financial Officer of OrCAD.
(b) AGREEMENTS AND COVENANTS. OrCAD shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Summit shall have received a certificate to such effect signed on
behalf of OrCAD by the Chief Executive Officer and the Chief Financial
Officer of OrCAD.
(c) NO MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall have been no Material Adverse Effect on OrCAD, nor shall there
exist any condition that, to the knowledge of the Chief Executive Officer
and the Chief Financial Officer of OrCAD, would reasonably be expected to
result in a Material Adverse Effect on OrCAD; and Summit shall have received
a certificate signed on behalf of OrCAD by the Chief Executive Officer and
the Chief Financial Officer of OrCAD to such effect. For purposes of this
Section 6.3(c), neither (i) a decrease in the trading price of OrCAD Common
Stock from the trading price on the date of this Agreement, nor (ii) any
adverse development in the results of operations of OrCAD for the quarter
ending September 30, 1998 shall constitute a "Material Adverse Effect."
(d) OPINION OF ACCOUNTANTS. Summit shall have received a letter from
PriceWaterhouseCoopers dated within two (2) business days prior to the
Effective Time regarding its concurrence with the conclusion of Summit
management as to the appropriateness of pooling of interest accounting for
the Merger under Accounting Principles Board Opinion No. 16, if the Merger
is consummated in accordance with this Agreement. PriceWaterhouse Coopers
shall have received a letter from KPMG Peat Marwick LLP dated within two (2)
business days prior to the Effective Time regarding its concurrence with the
conclusion of OrCAD management as to the appropriateness of pooling of
interest accounting for the Merger under Accounting Principles Board Opinion
No. 16, if the Merger is consummated in accordance with this Agreement.
(e) CONSENTS. OrCAD shall have obtained all consents, waivers and
approvals required in connection with the consummation of the transactions
contemplated hereby under the agreements, contracts, licenses or leases set
forth on Schedule 6.3(e) of the Summit Schedules.
(f) REVENUE. OrCAD shall have recognized aggregate revenue in
accordance with GAAP applied consistently with prior periods of not less
than $10,980,000 for the quarter ending September 30, 1998.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by the
stockholders of OrCAD or the approval of the issuance of Summit Common Stock in
connection with the Merger by the stockholders of Summit:
(a) by mutual written consent duly authorized by the Boards of Directors
of Summit and OrCAD;
(b) by either OrCAD or Summit if the Merger shall not have been
consummated by January 31, 1999 for any reason; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Merger to occur on or before such
date and such action or failure to act constitutes a breach of this
Agreement;
(c) by either OrCAD or Summit if a Governmental Entity shall have issued
an order, decree or ruling or taken any other action, in any case having the
effect of permanently restraining, enjoining or
43
otherwise prohibiting the Merger, which order, decree, ruling or other
action is final and nonappealable;
(d) by either OrCAD or Summit if the required approvals of the
stockholders of OrCAD or the stockholders of Summit contemplated by this
Agreement shall not have been obtained by reason of the failure to obtain
the required vote at a meeting of stockholders duly convened therefor or at
any adjournment thereof (PROVIDED that the right to terminate this Agreement
under this Section 7.1(d) shall not be available to any party where the
failure to obtain approval by such party's stockholders shall have been
caused by the action or failure to act of such party and such action or
failure to act constitutes a breach by such party of this Agreement);
(e) by Summit at any time prior to the approval of the Merger by OrCAD's
stockholders, if the OrCAD Board recommends an OrCAD Superior Proposal to
the stockholders of OrCAD or if the OrCAD Board shall have withheld,
withdrawn or modified in a manner adverse to Summit its recommendation in
favor of adoption and approval of this Agreement and approval of the Merger;
(f) by OrCAD at any time prior to the approval of the Merger by Summit's
stockholders, if the Summit Board recommends a Summit Superior Proposal to
the stockholders of Summit or if the Summit Board shall have withheld,
withdrawn or modified in a manner adverse to OrCAD its recommendation in
favor of the issuance of shares of Summit Common Stock by virtue of the
Merger;
(g) by OrCAD, upon a breach of any representation, warranty, covenant or
agreement on the part of Summit set forth in this Agreement, or if any
representation or warranty of Summit shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, PROVIDED that if such
inaccuracy in Summit's representations and warranties or breach by Summit is
curable by Summit through the exercise of its commercially reasonable
efforts by the date identified in Section 7.1(b), then OrCAD may not
terminate this Agreement under this Section 7.1(g) before that date,
provided Summit continues to exercise such commercially reasonable efforts
to cure such breach up until that date (it being understood that OrCAD may
not terminate this Agreement pursuant to this Section 7.1(g) if it shall
have materially breached this Agreement and its breach is the proximate
cause of Summit's breach or inaccuracy); or
(h) by Summit, upon a breach of any representation, warranty, covenant
or agreement on the part of OrCAD set forth in this Agreement, or if any
representation or warranty of OrCAD shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, PROVIDED, that if such
inaccuracy in OrCAD's representations and warranties or breach by OrCAD is
curable by OrCAD through the exercise of its commercially reasonable efforts
by the date identified in Section 7.1(b), then Summit may not terminate this
Agreement under this Section 7.1(h) before that date, provided OrCAD
continues to exercise such commercially reasonable efforts to cure such
breach up until that date (it being understood that Summit may not terminate
this Agreement pursuant to this Section 7.1(h) if it shall have materially
breached this Agreement and its breach is the proximate cause of OrCAD's
breach or inaccuracy).
7.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any termination of this
Agreement under Section 7.1 will be effective immediately upon the delivery of
written notice of the terminating party to the other parties hereto. In the
event of the termination of this Agreement as provided in Section 7.1, this
Agreement shall be of no further force or effect, except (i) as set forth in
this Section 7.2, Section 7.3 and Article 8 (miscellaneous), each of which shall
survive the termination of this Agreement, and (ii) nothing herein shall relieve
any party from liability for any willful breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Non-Disclosure Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.
44
7.3 FEES AND EXPENSES.
(a) GENERAL. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses
whether or not the Merger is consummated; PROVIDED, HOWEVER, that Summit and
OrCAD shall share equally all fees and expenses, other than attorneys' and
accountants fees and expenses, incurred in relation to the printing and
filing (with the SEC) of the Proxy Statement (including any preliminary
materials related thereto) and the Registration Statement (including
financial statements and exhibits) and any amendments or supplements
thereto.
(b) ORCAD PAYMENTS.
(i) If either (x) the OrCAD Board shall have withheld, withdrawn or
modified in a manner adverse to Summit its recommendation in favor of
adoption and approval of this Agreement and approval of the Merger and at
that time Summit shall not have materially breached this Agreement and
there shall be no Material Adverse Effect on Summit, or (y) the OrCAD
Board recommends an OrCAD Superior Proposal to the stockholders of OrCAD
and at that time Summit shall not have materially breached this Agreement
and there shall be no Material Adverse Effect on Summit, OrCAD shall pay
to Summit an amount equal to $2,500,000 within one business day following
the earlier to occur of (A) termination of this Agreement pursuant to
Section 7.1(e) hereof or (B) an OrCAD Negative Vote (as defined below);
(ii) If no payment shall be required pursuant to clause 7.3(b)(i)
above, and if: (x) the vote of the stockholders of OrCAD approving and
adopting this Agreement and approving the Merger shall not have been
obtained by reason of the failure to obtain the required vote at a
meeting of stockholders duly convened therefor or at any adjournment
thereof (a "ORCAD NEGATIVE VOTE"), and (y) prior to such OrCAD Negative
Vote there shall have occurred an OrCAD Acquisition Proposal with respect
to OrCAD which shall have been publicly disclosed and not withdrawn prior
to such meeting (a "ORCAD COMPETING PROPOSAL"), and (z) within 9 months
following such OrCAD Negative Vote, OrCAD shall enter into a definitive
agreement with respect to an OrCAD Acquisition (as defined below) or the
OrCAD Board shall recommend to the OrCAD stockholders that they accept a
tender or exchange offer for 25% or more of the OrCAD Common Stock, THEN,
provided that there shall have not occurred a Material Adverse Effect on
Summit prior to the OrCAD Negative Vote and provided that Summit shall
not have materially breached this Agreement, OrCAD shall pay to Summit an
amount equal to $2,500,000 within one business day following, as the case
may be (1) consummation of an OrCAD Acquisition within 15 months
following the OrCAD Negative Vote or (2) consummation of such tender or
exchange offer. For the purposes of this Agreement, an "ORCAD
ACQUISITION" means any transaction or series of transactions involving
(i) any merger, consolidation or similar business combination in which
stockholders of OrCAD immediately prior to the transaction hold less than
50% of the outstanding capital stock of the surviving entity, or any sale
of substantial assets (including without limitation capital stock of
subsidiaries) having a fair market value in excess of 50% of the fair
market value of all the assets of OrCAD and its subsidiaries immediately
prior to such transaction (or series of transactions) or similar
transaction involving OrCAD or any of its material subsidiaries, (ii) any
sale by OrCAD of any shares of capital stock of OrCAD which would, upon
issuance, represent more than 50% of the outstanding shares of capital
stock of OrCAD, other than in an underwritten public offering or private
placement in which no entity or group obtained a majority of the stock
thus sold, or (iii) the acquisition (including without limitation by way
of a tender offer or an exchange offer) by any person or "group," as
"group" is defined under Section 13(d) of the Exchange Act and the rules
and regulations thereunder, of beneficial ownership or a right to acquire
beneficial ownership of, 50% or more of the then outstanding shares of
capital stock of OrCAD; or the formation of any "group" that, as of the
time of formation, owns such stock or such rights.
45
(c) SUMMIT PAYMENTS.
(i) If either (x) the Summit Board shall have withheld, withdrawn or
modified in a manner adverse to OrCAD its recommendation in favor of the
issuance of shares of Summit Common Stock by virtue of the Merger and at
that time OrCAD shall not have materially breached this Agreement and
there shall be no Material Adverse Effect on OrCAD, or (y) the Summit
Board recommends a Summit Superior Proposal to the stockholders of Summit
and at that time OrCAD shall not have materially breached this Agreement
and there shall be no Material Adverse Effect on OrCAD, Summit shall pay
to OrCAD an amount equal to $2,500,000 within one business day following
the earlier to occur of (A) termination of this Agreement pursuant to
Section 7.1(f) hereof or (B) a Summit Negative Vote (as defined below);
(ii) If no payment shall be required pursuant to clause 7.3(c)(i)
above, and if: (x) the vote of the stockholders of Summit approving the
issuance of shares of Summit Common Stock by virtue of the Merger shall
not have been obtained by reason of the failure to obtain the required
vote at a meeting of stockholders duly convened therefor or at any
adjournment thereof (a "SUMMIT NEGATIVE VOTE"), and (y) prior to such
Summit Negative Vote there shall have occurred a Summit Acquisition
Proposal with respect to Summit which shall have been publicly disclosed
and not withdrawn prior to such meeting (a "SUMMIT COMPETING PROPOSAL"),
and (z) within 9 months following such Summit Negative Vote, Summit shall
enter into a definitive agreement with respect to a Summit Acquisition
(as defined below) or the Summit Board shall recommend to the Summit
stockholders that they accept a tender or exchange offer for 25% or more
of the Summit Common Stock, THEN, provided that there shall have not
occurred a Material Adverse Effect on OrCAD prior to the Summit Negative
Vote and provided that OrCAD shall not have materially breached this
Agreement, Summit shall pay to OrCAD an amount equal to $2,500,000 within
one business day following, as the case may be (1) consummation of a
Summit Acquisition within 15 months following the Summit Negative Vote or
(2) consummation of such tender or exchange offer. For the purposes of
this Agreement, a "SUMMIT ACQUISITION" means any transaction or series of
transactions involving (i) any merger, consolidation or similar business
combination in which stockholders of Summit immediately prior to the
transaction hold less than 50% of the outstanding capital stock of the
surviving entity, or any sale of substantial assets (including without
limitation capital stock of subsidiaries) having a fair market value in
excess of 50% of the fair market value of all the assets of Summit and
its subsidiaries immediately prior to such transaction (or series of
transactions) or similar transaction involving Summit or any of its
material subsidiaries, (ii) any sale by Summit of any shares of capital
stock of Summit which would, upon issuance, represent more than 50% of
the outstanding shares of capital stock of Summit, other than in an
underwritten public offering or private placement in which no entity or
group obtained a majority of the stock thus sold, or (iii) the
acquisition (including without limitation by way of a tender offer or an
exchange offer) by any person or "group," as "group" is defined under
Section 13(d) of the Exchange Act and the rules and regulations
thereunder, of beneficial ownership or a right to acquire beneficial
ownership of, 50% or more of the then outstanding shares of capital stock
of Summit; or the formation of any "group" that, as of the time of
formation, owns such stock or such rights.
(d) Payment of the fees described in Section 7.3(b) and Section 7.3(c)
above shall not be in lieu of damages incurred in the event of breach of
this Agreement.
7.4 AMENDMENT. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of the parties hereto.
7.5 EXTENSION; WAIVER. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party
46
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of OrCAD, Summit and Merger Sub contained in this Agreement shall
terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time shall survive the Effective Time.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via facsimile (receipt confirmed) to the parties at
the following addresses or facsimile numbers (or at such other address or
facsimile numbers for a party as shall be specified by like notice):
(a) if to Summit or Merger Sub, to:
Summit Design, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to OrCAD, to:
OrCAD, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
47
8.3 INTERPRETATION; KNOWLEDGE.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise
indicated. When a reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement unless otherwise
indicated. The words "INCLUDE," "INCLUDES" and "INCLUDING" when used herein
shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. When reference is made herein to "THE
BUSINESS OF" an entity, such reference shall be deemed to include the
business of all direct and indirect subsidiaries of such entity. Reference
to the subsidiaries of an entity shall be deemed to include all direct and
indirect subsidiaries of such entity.
(b) For purposes of this Agreement (i) as it relates to Summit, the term
"KNOWLEDGE" means, with respect to any matter in question, the actual
knowledge of any of the persons listed in Section 8.3(b) of the Summit
Schedules and (ii) as it relates to OrCAD, the term "KNOWLEDGE" means, with
respect to any matter in question, the actual knowledge of any of the
persons listed in Section 8.3(b) of the OrCAD Schedules.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the OrCAD Schedules and the
Summit Schedules (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Non-Disclosure Agreement
shall continue in full force and effect until the Effective Time and shall
survive any termination of this Agreement; and (b) are not intended to confer
upon any other person any rights or remedies hereunder.
8.6 SEVERABILITY. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
8.7 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur 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 seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
8.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction of
any state or federal court within the City of Portland, Oregon, in connection
with any matter
48
based upon or arising out of this Agreement or the matters contemplated herein,
agrees that process may be served upon them in any manner authorized by the laws
of the State of Delaware for such persons and waives and covenants not to assert
or plead any objection which they might otherwise have to such jurisdiction and
such process.
8.9 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
8.11 WAIVER OF JURY TRIAL. EACH OF Summit, OrCAD AND MERGER SUB HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF Summit, OrCAD OR MERGER SUB IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
SUMMIT DESIGN, INC. ORCAD, INC.
By: By:
------------------------------------------ ------------------------------------------
Print: Print:
------------------------------------------ ------------------------------------------
Title: Title:
------------------------------------------ ------------------------------------------
HOOD ACQUISITION CORP.
By:
------------------------------------------
Print:
------------------------------------------
Title:
------------------------------------------
49
EXHIBIT A
ORCAD VOTING AGREEMENT
This Voting Agreement ("AGREEMENT") is made and entered into as of
September ____, 1998, between Summit Design, Inc., a Delaware corporation
("SUMMIT"), and the undersigned stockholder ("STOCKHOLDER") of OrCad, Inc., a
Delaware corporation (the "COMPANY").
RECITALS
A. Concurrently with the execution of this Agreement, Summit, the Company
and Hood Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of Summit ("MERGER SUB"), are entering into an Agreement and Plan of
Reorganization (the "MERGER AGREEMENT") which provides for the merger (the
"MERGER") of Merger Sub with and into the Company. Pursuant to the Merger, all
of the shares of capital stock of the Company will be converted into the right
to receive shares of Common Stock of Summit on the basis described in the Merger
Agreement.
B. The Stockholder is the record holder and beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")), of such number of shares of the outstanding Common Stock of
the Company as is indicated on the final page of this Agreement (the "SHARES").
C. As a material inducement to enter into the Merger Agreement, Summit
desires the Stockholder to agree, and the Stockholder is willing to agree, to
vote the Shares and any other such shares of capital stock of the Company so as
to facilitate consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. AGREEMENT TO VOTE SHARES; ADDITIONAL PURCHASES.
1.1 AGREEMENT TO VOTE SHARES. At every meeting of the stockholders
of the Company called with respect to any of the matters set forth in clause (x)
or (y) of this Section 1.1, and at every adjournment thereof, and on every
action or approval by written consent of the stockholders of the Company with
respect to any of the matters set forth in clause (x) or (y) of this Section
1.1, Stockholder shall vote the Shares and any New Shares (as defined below) in
favor of (x) approval of the Merger Agreement and the Merger and (y) any matter
that could reasonably be expected to facilitate the Merger.
1.2 ADDITIONAL PURCHASES. Stockholder agrees that any shares of
capital stock of the Company that Stockholder purchases or with respect to
which Stockholder otherwise acquires beneficial ownership after the execution
of this Agreement and prior to the termination of this Agreement in
accordance with Section 6 ("NEW SHARES") shall be subject to the terms and
conditions of this
Agreement to the same extent as if they constituted Shares.
2. IRREVOCABLE PROXY. Concurrently with the execution of this Agreement,
Stockholder agrees to deliver to Summit a proxy in the form attached hereto as
Annex A (the "PROXY"), which shall be irrevocable, with respect to the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Stockholder
represents and warrants that he, she or it: (i) is the beneficial owner of the
Shares, which at the date hereof are free and clear of any liens, claims,
options, charges or other encumbrances; (ii) does not beneficially own any
shares of capital stock of the Company other than the Shares (excluding shares
as to which Stockholder currently disclaims beneficial ownership in accordance
with applicable law); and (iii) has full power and authority to make, enter into
and carry out the terms of this Agreement.
4. ADDITIONAL DOCUMENTS. Stockholder hereby covenants and agrees to
execute and deliver any additional documents necessary or desirable, in the
reasonable opinion of Summit, to carry out the intent of this Agreement.
5. CONSENTS AND WAIVERS. Stockholder hereby gives any consents or
waivers that are reasonably required for the consummation of the Merger under
the terms of any agreements to which Stockholder is a party or pursuant to any
rights Stockholder may have.
6. TERMINATION. This Agreement shall terminate and shall have no further
force or effect as of the earlier to occur of: (i) the date and time on which
the Merger shall become effective in accordance with the terms and provisions of
the Merger Agreement and (ii) the date and time the Merger Agreement is
terminated in accordance with its terms.
7. MISCELLANEOUS.
7.1 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
7.2 BINDING EFFECT AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by either
of the parties without the prior written consent of the other. Stockholder
acknowledges and agrees that, until termination of this Agreement pursuant to
Section 6 hereof, Stockholder shall only transfer Shares and New Shares, if any,
to persons who shall have first agreed in writing to be bound by the terms of
this Agreement and who shall have executed an irrevocable proxy in the form
attached hereto as Annex A.
2
7.3 AMENDMENTS AND MODIFICATION. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by each of the parties hereto.
7.4 SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The parties hereto
acknowledge that Summit will be irreparably harmed and that there will be no
adequate remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth herein. Therefore, it is agreed that, in addition to any
other remedies that may be available to Summit upon any such violation, Summit
shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to Summit at law
or in equity.
7.5 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered in person, by telegram or facsimile, or sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or overnight courier
(prepaid) to the respective parties as follows:
If to Summit: Summit Design, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholder: To the address for notice set forth on the
last page hereof.
With a copy to: ▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.
7.6 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware (without regard to conflicts of laws principles thereof).
7.7 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof, and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
7.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
7.9 EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Voting Agreement to be
duly executed as of the date and year first above written.
SUMMIT DESIGN, INC.
By:
Name:
Title:
Stockholder:
Stockholder's Address for Notice:
Number of Shares of
Common Stock Beneficially Owned:
__________________________________
[ORCAD VOTING AGREEMENT]
ANNEX A
IRREVOCABLE PROXY
The undersigned stockholder of OrCad, Inc., a Delaware corporation (the
"COMPANY"), hereby irrevocably appoints the members of the Board of Directors of
Summit Design, Inc., a Delaware corporation ("SUMMIT"), and each of them, as the
sole and exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to the full extent of the undersigned's rights
with respect to the shares of capital stock of the Company beneficially owned by
the undersigned, which shares are listed on the final page of this Irrevocable
Proxy (the "SHARES"), and any and all other securities or shares of capital
stock of the Company that the undersigned purchases or with respect to which the
undersigned otherwise acquires beneficial ownership on or after the date hereof,
until the earlier to occur of (i) such time as the transactions contemplated by
that certain Agreement and Plan of Reorganization dated as of September ____,
1998 (the "MERGER AGREEMENT"), among Summit, Hood Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Summit ("MERGER SUB"), and the
Company, including the Merger (as defined in the Merger Agreement), are
effective and (ii) the date that the Merger Agreement is terminated in
accordance with its terms. Upon the execution hereof, all prior proxies given
by the undersigned with respect to the Shares and any and all other securities
or shares of capital stock of the Company that the undersigned purchases or with
respect to which the undersigned otherwise acquires beneficial ownership on or
after the date hereof are hereby revoked and no subsequent proxies will be
given.
This proxy is irrevocable, is granted pursuant to the Voting Agreement
dated as of September ____, 1998 between Summit and the undersigned stockholder
(the "VOTING AGREEMENT"), and is granted in consideration of Summit entering
into the Merger Agreement. Summit and the undersigned stockholder agree and
acknowledge that the grant of this irrevocable proxy is a material inducement
for Summit to enter into the Merger Agreement, and is therefore coupled with an
interest and irrevocable. The attorneys and proxies named above will be
empowered at any time prior to termination of the Merger Agreement to exercise
all voting and other rights (including, without limitation, the power to execute
and deliver written consents with respect to the Shares) of the undersigned in
favor of approval of the Merger and the Merger Agreement and any matter that
could reasonably be expected to facilitate the Merger at every annual, special
or adjourned meeting of the Company stockholders, and in every written consent
in lieu of such a meeting, or otherwise.
The attorneys and proxies named above may only exercise this proxy to vote
the Shares and other securities subject hereto at any time prior to termination
of the Merger Agreement at every annual, special or adjourned meeting of the
stockholders of the Company and in every written consent in lieu of such
meeting, in favor of approval of the Merger and the Merger Agreement and any
matter that could reasonably be expected to facilitate the Merger. The
undersigned stockholder may vote the Shares and other securities subject hereto
on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: September _____, 1998
Signature of Stockholder:
Print Name of Stockholder:
Number of Shares of Common Stock Beneficially Owned:__________________
[IRREVOCABLE PROXY]
EXHIBIT B
SUMMIT DESIGN VOTING AGREEMENT
This Voting Agreement ("AGREEMENT") is made and entered into as of
September ____, 1998, between OrCad, Inc., a Delaware corporation (the
"COMPANY"), and the undersigned stockholder ("STOCKHOLDER") of Summit Design,
Inc., a Delaware corporation ("SUMMIT").
RECITALS
A. Concurrently with the execution of this Agreement, Summit, the
Company and Hood Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Summit ("MERGER SUB"), are entering into an Agreement and Plan
of Reorganization (the "MERGER AGREEMENT") which provides for the merger (the
"MERGER") of Merger Sub with and into the Company. Pursuant to the Merger,
all of the shares of capital stock of the Company will be converted into the
right to receive shares of Common Stock of Summit on the basis described in
the Merger Agreement.
B. The Stockholder is the record holder and beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")), of such number of shares of the outstanding Common
Stock of Summit as is indicated on the final page of this Agreement (the
"SHARES").
C. As a material inducement to enter into the Merger Agreement, the
Company desires the Stockholder to agree, and the Stockholder is willing to
agree, to vote the Shares and any other such shares of capital stock of
Summit so as to facilitate consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. AGREEMENT TO VOTE SHARES; ADDITIONAL PURCHASES.
1.1 AGREEMENT TO VOTE SHARES. At every meeting of the
stockholders of Summit called with respect to any of the matters set forth in
clause (x) or (y) of this Section 1.1, and at every adjournment thereof, and
on every action or approval by written consent of the stockholders of Summit
with respect to any of the matters set forth in clause (x) or (y) of this
Section 1.1, Stockholder shall vote the Shares and any New Shares (as defined
below) in favor of (x) the issuance of shares of Summit Common Stock by
virtue of the Merger and (y) any matter that could reasonably be expected to
facilitate the issuance of shares of Summit Common Stock by virtue of the
Merger.
1.2 ADDITIONAL PURCHASES. Stockholder agrees that any shares of
capital stock of Summit that Stockholder purchases or with respect to which
Stockholder otherwise acquires
beneficial ownership after the execution of this Agreement and prior to the
termination of this Agreement in accordance with Section 6 ("NEW SHARES")
shall be subject to the terms and conditions of this Agreement to the same
extent as if they constituted Shares.
2. IRREVOCABLE PROXY. Concurrently with the execution of this
Agreement, Stockholder agrees to deliver to the Company a proxy in the form
attached hereto as Annex A (the "PROXY"), which shall be irrevocable, with
respect to the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Stockholder
represents and warrants that he, she or it: (i) is the beneficial owner of
the Shares, which at the date hereof are free and clear of any liens, claims,
options, charges or other encumbrances; (ii) does not beneficially own any
shares of capital stock of Summit other than the Shares (excluding shares as
to which Stockholder currently disclaims beneficial ownership in accordance
with applicable law); and (iii) has full power and authority to make, enter
into and carry out the terms of this Agreement.
4. ADDITIONAL DOCUMENTS. Stockholder hereby covenants and agrees to
execute and deliver any additional documents necessary or desirable, in the
reasonable opinion of the Company, to carry out the intent of this Agreement.
5. CONSENTS AND WAIVERS. Stockholder hereby gives any consents or
waivers that are reasonably required for the issuance of shares of Summit
Common Stock by virtue of the Merger under the terms of any agreements to
which Stockholder is a party or pursuant to any rights Stockholder may have.
6. TERMINATION. This Agreement shall terminate and shall have no
further force or effect as of the earlier to occur of: (i) the date and time
on which the Merger shall become effective in accordance with the terms and
provisions of the Merger Agreement and (ii) the date and time the Merger
Agreement is terminated in accordance with its terms.
7. MISCELLANEOUS.
7.1 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, then the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
7.2 BINDING EFFECT AND ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor
any of the rights, interests or obligations of the parties hereto may be
assigned by either of the parties without the prior written consent of the
other. Stockholder acknowledges and agrees that, until termination of this
Agreement pursuant to Section 6 hereof, Stockholder shall only transfer
Shares and New Shares, if any, to persons who shall have first agreed in
writing to be bound
by the terms of this Agreement and who shall have executed an irrevocable
proxy in the form attached hereto as Annex A.
7.3 AMENDMENTS AND MODIFICATION. This Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by each of the parties hereto.
7.4 SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The parties hereto
acknowledge that the Company will be irreparably harmed and that there will
be no adequate remedy at law for a violation of any of the covenants or
agreements of Stockholder set forth herein. Therefore, it is agreed that, in
addition to any other remedies that may be available to the Company upon any
such violation, the Company shall have the right to enforce such covenants
and agreements by specific performance, injunctive relief or by any other
means available to the Company at law or in equity.
7.5 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered in person, by telegram or facsimile, or sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or overnight
courier (prepaid) to the respective parties as follows:
If to the Company: OrCad, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholder: To the address for notice set forth on the
last page hereof.
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall only be effective upon receipt.
7.6 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware (without regard to conflicts
of laws principles thereof).
7.7 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof, and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
7.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
7.9 EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or interpretation of
this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Voting Agreement to be
duly executed as of the date and year first above written.
ORCAD, INC.
By:
Name:
Title:
Stockholder:
Stockholder's Address for Notice:
Number of Shares of
Common Stock Beneficially Owned: ______________
[SUMMIT DESIGN VOTING AGREEMENT]
ANNEX A
IRREVOCABLE PROXY
The undersigned stockholder of Summit Design, Inc., a Delaware
corporation ("SUMMIT"), hereby irrevocably appoints the members of the Board
of Directors of OrCad, Inc., a Delaware corporation ("ORCAD"), and each of
them, as the sole and exclusive attorneys and proxies of the undersigned,
with full power of substitution and resubstitution, to the full extent of the
undersigned's rights with respect to the shares of capital stock of Summit
beneficially owned by the undersigned, which shares are listed on the final
page of this Irrevocable Proxy (the "SHARES"), and any and all other
securities or shares of capital stock of Summit that the undersigned
purchases or with respect to which the undersigned otherwise acquires
beneficial ownership on or after the date hereof, until the earlier to occur
of (i) such time as the transactions contemplated by that certain Agreement
and Plan of Reorganization dated as of September ____, 1998 (the "MERGER
AGREEMENT"), among Summit, Hood Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of Summit ("MERGER SUB"), and OrCad, including the
Merger (as defined in the Merger Agreement), are effective and (ii) the date
that the Merger Agreement is terminated in accordance with its terms. Upon
the execution hereof, all prior proxies given by the undersigned with respect
to the Shares and any and all other securities or shares of capital stock of
Summit that the undersigned purchases or with respect to which the
undersigned otherwise acquires beneficial ownership on or after the date
hereof are hereby revoked and no subsequent proxies will be given.
This proxy is irrevocable, is granted pursuant to the Voting Agreement
dated as of September ____, 1998 between OrCad and the undersigned
stockholder (the "VOTING AGREEMENT"), and is granted in consideration of
OrCad entering into the Merger Agreement. OrCad and the undersigned
stockholder agree and acknowledge that the grant of this irrevocable proxy is
a material inducement for OrCad to enter into the Merger Agreement, and is
therefore coupled with an interest and irrevocable. The attorneys and
proxies named above will be empowered at any time prior to termination of the
Merger Agreement to exercise all voting and other rights (including, without
limitation, the power to execute and deliver written consents with respect to
the Shares) of the undersigned in favor of the issuance of shares of Summit
Common Stock by virtue of the Merger and any matter that could reasonably be
expected to facilitate the issuance of shares of Summit Common Stock by
virtue of the Merger, at every annual, special or adjourned meeting of Summit
stockholders, and in every written consent in lieu of such a meeting, or
otherwise.
The attorneys and proxies named above may only exercise this proxy to
vote the Shares and other securities subject hereto at any time prior to
termination of the Merger Agreement at every annual, special or adjourned
meeting of the stockholders of Summit and in every written consent in lieu of
such meeting, in favor of the issuance of shares of Summit Common Stock by
virtue of the Merger and any matter that could reasonably be expected to
facilitate the issuance of shares of Summit Common Stock by virtue of the
Merger. The undersigned stockholder may vote the Shares
and other securities subject hereto on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: September ____, 1998
Signature of Stockholder:
Print Name of Stockholder:
Number of Shares of Common Stock Beneficially Owned:___________________
[IRREVOCABLE PROXY]
EXHIBIT C
ORCAD AFFILIATE AGREEMENT
September ____, 1998
Summit Design, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Reorganization (the "Merger
Agreement"), dated as of September ___, 1998, by and among Summit Design, Inc.,
a Delaware corporation ("Summit"), Hood Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Summit ("Merger Sub"), and OrCad,
Inc., a Delaware corporation ("OrCad"), which provides for the merger (the
"Merger") of Merger Sub with and into OrCad. Pursuant to the Merger, shares of
the Common Stock of OrCad ("OrCad Common Stock") will be converted into shares
of Common Stock of Summit ("Summit Common Stock") on the basis described in the
Merger Agreement.
The undersigned has been informed that the Merger constitutes a transaction
covered by Rule 145 ("Rule 145") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"); that the undersigned may be deemed to be an
"affiliate" of OrCad within the meaning of Rule 145; that the Merger is intended
to be a "pooling of interests" for financial accounting purposes; and that,
accordingly, the Summit Common Stock that the undersigned will acquire in
connection with the Merger may be disposed of only in conformity with the
provisions of Rule 145 and the other limitations described herein.
The undersigned understands that the Merger will not be accounted for as a
pooling of interests unless, among other things, affiliates of OrCad comply with
the requirements of Section 1(d) below. The undersigned further understands
that the representations, warranties and agreements set forth herein will be
relied upon by the accountants and counsel for Summit and for OrCad in rendering
opinions regarding accounting and other legal consequences of the Merger.
The capitalized terms used and not defined herein shall have the meanings
set forth in the Merger Agreement.
1. In consideration of the benefits accruing to the undersigned as a
result of the Merger, the undersigned represents, warrants and agrees as
follows:
(a) The undersigned has full power to execute this Affiliate
Agreement and to make the representations, warranties and agreements herein and
to perform the undersigned's obligations hereunder.
(b) Appendix A attached hereto sets forth all the Summit Common Stock
owned or to be received by the undersigned in connection with the transactions
contemplated by the Merger Agreement, if any, including all other equity
securities of OrCad, or rights to acquire any of the foregoing, as to which the
undersigned has sole or shared voting or investment power.
(c) The undersigned will not sell, transfer or dispose of any Summit
Common Stock or other equity securities of Summit that the undersigned 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 (all such shares and other
securities being herein sometimes collectively referred to as "Restricted
Securities"), or any option, right or other interest with respect to any
Restricted Securities, unless such sale, transfer or disposition is effected as
provided in Section 3 hereof (provided that the undersigned may make bona fide
gifts of Restricted Securities without consideration so long as the recipients
thereof agree not to sell, transfer or otherwise dispose of any of the
Restricted Securities except as provided herein).
(d) Notwithstanding any provision of this Affiliate Agreement to the
contrary, in accordance with SEC Staff Accounting Bulletin No. 65 ("SAB 65"),
during the period contemplated by SAB 65, until the earlier of (i) Summit's
public announcement of financial results covering at least 30 days of combined
operations of Summit and OrCad or (ii) the Merger Agreement is terminated in
accordance with its terms, the undersigned will not sell, exchange, transfer,
pledge, distribute or otherwise dispose of (collectively a "Transfer") or grant
any option, establish any "short" or put-equivalent position with respect to or
enter into any similar transaction (through derivatives or otherwise) intended
or having the effect, directly or indirectly, to reduce its risk relative to:
(i) any shares of OrCad Common Stock, except pursuant to and upon the
consummation of the Merger or (ii) any Summit Common Stock received by the
undersigned in the Merger or any Summit Common Stock received by the undersigned
upon exercise of options assumed by Summit in connection with the Merger.
2. Summit agrees to use its reasonable best efforts to (i) file all
reports and data with the Securities and Exchange Commission (the "SEC")
necessary to permit the undersigned to sell Restricted Securities pursuant to
and otherwise in conformity with Rule 145(d) under the Securities Act and
(ii) publish as soon as reasonably practicable and file on a timely basis,
consistent with its normal practices, the financial results referred to in
Section 1(d) above with the SEC under Section 13(a) of the Securities Exchange
Act of 1934, as amended. The undersigned understands that Summit is under no
obligation to register the sale, transfer, or other disposition of any
Restricted Securities by or on behalf of the undersigned or to take any other
action necessary in order to make compliance with an exception from registration
available, other than as set forth herein and in the Merger Agreement.
-2-
3. The undersigned understands that the provisions of Rule 145 restrict
the undersigned's public resales of Restricted Securities until such time as the
undersigned has "beneficially owned" (within the meaning of Rule 144(d) under
the Securities Act) the Restricted Securities for a period of at least one year
(or in some cases two years) and thereafter if and for so long as the
undersigned is an affiliate of Summit. The undersigned may make unrestricted
resales of Restricted Securities pursuant to Rule 145(d)(2) if the undersigned
has beneficially owned the Restricted Securities for at least one year and is
not an affiliate of Summit and Summit meets the public information requirements
of Rule 144(c). The undersigned may make unrestricted resales of Restricted
Securities pursuant to Rule 145(d)(3) if the undersigned has beneficially owned
the Restricted Securities for at least two years and is not, and has not been
for at least three months, an affiliate of Summit. Unless and until the
restriction "cut-off" provisions of Rule 145(d)(2) or Rule 145(d)(3) become
available, public resales of Restricted Securities may only be made by the
undersigned in compliance with the requirements of Rule 145(d)(1).
Rule 145(d)(1) permits public resales of Restricted Securities only (A)
while Summit meets the public information requirements of Rule 144(c), and (B)
in "broker's transactions" in accordance with Rules 144(c), (f) and (g) where
the aggregate number of Restricted Securities sold at any time together with all
sales of restricted Summit Common Stock sold for the undersigned's account
during the preceding three-month period does not exceed the greater of (i) one
percent of the Summit Common Stock outstanding or (ii) the average weekly
trading volume in Summit Common Stock on all national securities exchanges
and/or reported through the automated quotation system of a registered
securities association, during the four calendar week period preceding any such
sale (the "Volume Limitations"). Summit acknowledges that the provisions of
Section 1(c) of this Affiliate Agreement will be satisfied, as to any sale by
the undersigned of Restricted Securities pursuant to Rule 145(d) under the
Securities Act, by a broker's letter with respect to that sale stating that each
of the above-described requirements of Rule 145(d)(1) has been met or is
inapplicable by virtue of Rule 145(d)(2) or Rule 145(d)(3); provided, however,
that if counsel for Summit reasonably believes that the provisions of
Rule 145(d) have not been complied with, or if requested by Summit in connection
with a proposed disposition other than pursuant to a registered offering, the
undersigned shall furnish to Summit a copy of a "no action" letter or other
communication from the staff of the SEC, or an opinion of counsel in form and
substance reasonably satisfactory to Summit and its counsel, to the effect that
all of the applicable requirements of Rule 145(d) under the Securities Act have
been complied with or that the disposition may be otherwise effected in the
manner requested in compliance with the Securities Act.
4. The undersigned also understands restrictive legends referencing the
restrictions described in Section 3 hereof shall be printed on the share
certificates with respect to the Summit Common Stock received by the undersigned
in the Merger.
-3-
5. This Affiliate Agreement and all action taken hereunder in accordance
with its terms shall be binding upon and inure to the benefit of Summit, its
subsidiaries and their respective successors and assigns and the undersigned and
his, her or its respective successors, assigns, heirs, executors, administrators
and legal representatives.
6. All notices and other communications required or permitted hereunder
shall be in writing and shall be delivered by hand or delivered by overnight
courier, freight prepaid, or sent via facsimile (with acknowledgment of complete
transmission) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Summit to:
Summit Design, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the undersigned, to:
__________________________________
__________________________________
__________________________________
Attention:________________________
Fax:______________________________
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective when received, and shall in any event be
deemed to have been received (i) when delivered, if delivered personally, or
sent by facsimile and confirmed in writing or (ii) two (2) business days after
the business day of deposit with overnight courier, addressed and shipped as
aforesaid.
-4-
7. This Affiliate Agreement shall be binding upon and enforceable against
administrators, executors, representatives, heirs, legatees, devisees,
successors and assigns of the undersigned and any pledgee holding Restricted
Securities as collateral.
8. The undersigned has carefully read this Affiliate Agreement and
discussed its requirements and other applicable limitations upon the sale,
transfer or other disposition of the Restricted Securities and other Summit
securities owned by the undersigned, to the extent the undersigned felt
necessary, with the undersigned's counsel or with counsel for OrCad.
Very truly yours,
By:
Name:
Title:
(if applicable)
Agreed to and accepted:
SUMMIT DESIGN, INC.
By:
Name:
Title:
-5-
APPENDIX A
RESTRICTED SECURITIES
TYPE OF SECURITIES NUMBER OF SHARES
------------------ ----------------
EXHIBIT D
SUMMIT DESIGN AFFILIATE AGREEMENT
September ____, 1998
Summit Design, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Reorganization (the "Merger
Agreement"), dated as of September ____, 1998, by and among Summit Design, Inc.,
a Delaware corporation ("Summit"), Hood Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of Summit ("Merger Sub"), and OrCad,
Inc., a Delaware corporation ("OrCad"), which provides for the merger (the
"Merger") of Merger Sub with and into OrCad. Pursuant to the Merger, shares of
the Common Stock of OrCad ("OrCad Common Stock") will be converted into shares
of Common Stock of Summit ("Summit Common Stock") on the basis described in the
Merger Agreement.
The undersigned has been informed that the Merger is intended to be a
"pooling of interests" for financial accounting purposes and that, accordingly,
the Summit Common Stock that the undersigned owns may be disposed of only in
conformity with the other limitations described herein.
The undersigned understands that the Merger will not be accounted for as a
pooling of interests unless, among other things, affiliates of Summit comply
with the requirements of Section 1(c) below. The undersigned further
understands that the representations, warranties and agreements set forth herein
will be relied upon by the accountants and counsel for Summit and for OrCad in
rendering opinions regarding accounting and other legal consequences of the
Merger.
The capitalized terms used and not defined herein shall have the meanings
set forth in the Merger Agreement.
1. In consideration of the benefits accruing to the undersigned as a
result of the Merger, the undersigned represents, warrants and agrees as
follows:
(a) The undersigned has full power to execute this Affiliate
Agreement and to make the representations, warranties and agreements herein and
to perform the undersigned's obligations hereunder.
(b) Appendix A attached hereto sets forth all the Summit Common Stock
owned by the undersigned, including all other equity securities of Summit, or
rights to acquire any of equity securities of Summit, as to which the
undersigned has sole or shared voting or investment power.
(c) Notwithstanding any provision of this Affiliate Agreement to the
contrary, in accordance with SEC Staff Accounting Bulletin No. 65 ("SAB 65"),
during the period contemplated by SAB 65, until the earlier of (i) Summit's
public announcement of financial results covering at least 30 days of combined
operations of Summit and OrCad or (ii) the Merger Agreement is terminated in
accordance with its terms, the undersigned will not sell, exchange, transfer,
pledge, distribute or otherwise dispose of (collectively a "Transfer") or grant
any option, establish any "short" or put-equivalent position with respect to or
enter into any similar transaction (through derivatives or otherwise) intended
or having the effect, directly or indirectly, to reduce its risk relative to any
shares of Summit Common Stock or any other equity securities of Summit that the
undersigned may acquire, 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 (all such shares and other securities being
herein sometimes collectively referred to as "Restricted Securities").
2. Summit agrees to use its reasonable best efforts to publish as soon as
reasonably practicable and file on a timely basis, consistent with its normal
practices, the financial results referred to in Section 1(c) above with the SEC
under Section 13(a) of the Securities Exchange Act of 1934, as amended.
3. This Affiliate Agreement and all action taken hereunder in accordance
with its terms shall be binding upon and inure to the benefit of Summit, its
subsidiaries and their respective successors and assigns and the undersigned and
his, her or its respective successors, assigns, heirs, executors, administrators
and legal representatives and any pledgee holding Restricted Securities as
collateral.
4. All notices and other communications required or permitted hereunder
shall be in writing and shall be delivered by hand or delivered by overnight
courier, freight prepaid, or sent via facsimile (with acknowledgment of complete
transmission) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Summit to:
Summit Design, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
-2-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the undersigned, to:
----------------------------------
----------------------------------
----------------------------------
Attention:
-----------------------
Fax:
----------------------------
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective when received, and shall in any event be
deemed to have been received (i) when delivered, if delivered personally, or
sent by facsimile and confirmed in writing or (ii) two (2) business days after
the business day of deposit with overnight courier, addressed and shipped as
aforesaid.
5. The undersigned has carefully read this Affiliate Agreement and
discussed its requirements and other applicable limitations upon the sale,
transfer or other disposition of the Restricted Securities to the extent the
undersigned felt necessary, with the undersigned's counsel or with counsel for
Summit.
Very truly yours,
By:
Name:
Title:
(if applicable)
Agreed to and accepted:
SUMMIT DESIGN, INC.
-3-
By:
Name:
Title:
-4-
APPENDIX A
RESTRICTED SECURITIES
Type of Securities Number of Shares
------------------ ----------------
Exhibit E to
Agreement of Plan of Reorganization
At or before Closing, the following steps shall have taken place:
SUMMIT DESIGNATION. The Summit Board of Directors shall have designated
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and four other individuals to serve on the Summit Board of
Directors after the close. These four individuals are anticipated to be, but
not required to be, chosen from among the current members of the Summit Board
of Directors. Any individual among the four who is not a member of the Summit
Board of Directors prior to the date of the Agreement shall be designated
only with the consent of the President of OrCAD and the President of Summit,
which consent shall not be unreasonably withheld.
ORCAD DESIGNATION. The OrCAD Board of Directors shall have designated
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and four other individuals to serve on the Summit Board
of Directors after the close. These four individuals are anticipated to be,
but not required to be, chosen from among the current members of the OrCAD
Board of Directors. Any individual among the four who is not a member of the
OrCAD Board of Directors prior to the date of the Agreement shall be
designated only with the consent of the President of Summit and the President
of OrCAD, which consent shall not be unreasonably withheld.
RESIGNATIONS TENDERED. Each designee shall have signed and delivered to
Summit, and Summit shall have provided copies to OrCAD, of that designee's
resignation from the Board of Directors of Summit, effective immediately
prior to the vote of the shareholders of Summit at the first annual meeting
of Summit following the Effective Time. Further, if any member of the Board
of Summit as of the date of the Agreement is not a Summit designee and has
not already resigned from the Summit Board, Summit shall have received, and
delivered copies to OrCAD of, the resignations from the Summit Board of
Directors of each such member, to be effective on or before the Effective
Time.
At Closing, the following steps shall have taken place:
SUMMIT NOMINATIONS: The President and Chief Executive Officer of Summit shall
have nominated two outside members of the post-Closing Summit Board of
Directors to serve on the Board Nominating Committee and two members of the
post-Closing Summit Board of Directors to serve on the Merger Oversight
Committee.
ORCAD NOMINATIONS: The President and Chief Executive Officer of OrCAD shall
have nominated two outside members of the post-Closing Summit Board of
Directors to serve on the Board Nominating Committee and two members of the
post-Closing Summit Board of Directors to serve on the Merger Oversight
Committee.
RESOLUTIONS ADOPTED: The Summit Board of Directors shall have adopted
resolutions accomplishing in substance as follows, in form reasonably
acceptable to OrCAD, each resolution to be effective at the Effective Time
and none having been altered or amended as of the Effective Time:
- Amending the bylaws of Summit to allow the Board of
Directors of Summit to establish by resolution the size of
the Board within a range that includes both seven and ten.
- Setting the size of the Board of Directors of Summit at ten
members, exercising the power established by the change in
the bylaws.
- Filling the vacancies thus created by appointing the board
member designees of each party.
Within ten days after the Closing, the following steps shall occur:
COMMITTEE DESIGNATION. A telephonic meeting of the Summit Board of Directors
shall be held to approve the nominees previously designated by the President
and Chief Executive Officer of Summit and the President and Chief Executive
Officer of OrCAD for the Board Nominating Committee and the Merger Oversight
Committee.
