EXHIBIT 2
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THESE WARRANTS AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE
STATE LAW, AND NO INTEREST IN SUCH WARRANTS MAY BE SOLD, DISTRIBUTED, ASSIGNED,
OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
COVERING ANY SUCH TRANSACTION INVOLVING THE SECURITIES OR (B) THE COMPANY
RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES STATING
THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION AND SUCH OPINION IS IN FORM
AND SUBSTANCE SATISFACTORY TO THE COMPANY AND FROM COUNSEL SATISFACTORY TO THE
COMPANY.
No. W-2
STOCK PURCHASE WARRANTS
TO PURCHASE SHARES OF COMMON STOCK
QUICKTURN SYSTEMS, INC.
400,000 WARRANTS
THIS IS TO CERTIFY that, for value received, MENTOR GRAPHICS CORPORATION, or its
assigns (Holder), is entitled, at any time after February 28, 1992 and not later
than 5:00 p.m., Pacific Time on February 27, 2000 (Expiration Date), subject to
the provisions of these Warrants, to purchase 400,000 shares of fully paid and
nonassessable shares of the Common Stock of QUICKTURN SYSTEMS, INC., a
California corporation (Company), at a price of $15.00 per share (the Purchase
Price Per Share) (such number of shares and the Purchase Price Per Share being
subject to adjustment as provided in these Warrants), upon the surrender of this
certificate (with the attached form of Election to Purchase completed and
executed by the Holder) and delivery of a check payable to the Company, in the
amount of the Purchase Price Per Share multiplied by the number of shares for
which these Warrants are being exercised, to the Company at its principal
office. Such surrender and payment are referred to as the exercise of these
Warrants.
All or part of these Warrants may be assigned at any time prior to the
Expiration Date. In the case of any assignment, upon request and upon surrender
of this certificate to the Company at its principal office with the attached
form of Assignment duly completed and executed, the Company will cause to be
executed and delivered one or more certificates of like tenor evidencing in the
aggregate the number of Warrants to which this certificate relates registered in
the name of the person or persons entitled to such certificate upon assignment.
At any time prior to the Expiration Date, upon surrender of this certificate to
the Company, this certificate may be exchanged, alone or with other certificates
of like tenor, for a new certificate or certificates of like tenor evidencing in
the aggregate the number of Warrants, to which this Certificate and such other
certificates relate, registered in the name of the Holder.
The Warrants evidenced by this certificate shall be void and of no effect and
the Holder's rights shall cease after 5:00 p.m. Pacific Time on the Expiration
Date.
For the purpose of these Warrants, the term "Common Stock" shall mean, subject
to the provisions of subdivision 2 below, shares of the class designated as
Common Stock of the Company at February 28, 1992 or shares of any class or
classes resulting from any reclassification or reclassifications of such Common
Stock; provided, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable shall be substantially in
the proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
The Warrants evidenced by this certificate are subject to the following
additional terms and conditions:
1. In case the Company shall issue any shares of its Common Stock as a stock
dividend or subdivide the number of outstanding shares of Common Stock into a
greater number of shares, then, in either of such cases, the Purchase Price Per
Share in effect at the time of such action shall be proportionately reduced and
the number of shares of Common Stock at that time purchasable pursuant to these
Warrants shall be proportionately increased; and, conversely, in the event the
Company shall contract the number of outstanding shares of Common Stock by
combining such shares into a smaller number of shares, then, in such case, the
Purchase Price Per Share in effect at the time of such action shall be
proportionately increased and the number of shares of Common Stock at that time
purchasable pursuant to these Warrants shall be proportionately decreased. Any
dividend paid or distributed on the Common Stock in stock of any other class of
securities convertible into shares of Common Stock shall be treated as a
dividend paid in Common Stock to the extent that shares of Common Stock are
issuable upon the conversion.
2. In case the Company shall be recapitalized by reclassifying its outstanding
Common Stock, then as a condition of such recapitalization lawful and adequate
provision shall be made under which the Holder shall have the right to purchase,
upon the terms and conditions specified in these Warrants, in lieu of the shares
of Common Stock previously purchasable upon the exercise of these Warrants, the
kind and amount of shares of stock and other securities and property receivable
upon such recapitalization by the owner of the number of shares of Common Stock
which the Holder might have purchased immediately prior to such
recapitalization.
3. In case the Company shall consolidate or merge with or convey all or
substantially all its property and assets to any other corporation or
corporations, then as a condition of such consolidation, merger or conveyance,
lawful and adequate provision shall be made in which the Holder shall have the
right to purchase, upon the terms and conditions specified in these Warrants, in
lieu of the shares of Common Stock previously purchasable upon the exercise of
these Warrants, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation, merger or conveyance by a holder of
the number of shares of Common Stock which the Holder might have purchased
immediately prior to such consolidation, merger or conveyance.
-2-
4. Whenever the Purchase Price Per Share or the kind or amount of securities
purchasable under these Warrants shall be adjusted pursuant to any of the
provisions of this certificate, the Company shall cause to be sent to the Holder
by first-class mail at his address as it appears upon the records of the
Company, a certificate setting forth the adjustments in the Purchase Price Per
Share and/or in said number of shares, and also setting forth in detail the
facts requiring such adjustments including, without limitation, a statement of
the consideration received or deemed to have been received by the Company for
any additional shares of stock issued by it.
5. The holder of these Warrants shall be entitled to those registration rights
set forth in Exhibit G to that certain Asset Purchase Agreement dated February
28, 1992.
6. No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of these Warrants. If the exercise of these Warrants
would, but for the provisions of this subdivision 6, result in the right to
receive a fraction of a share of Common Stock, the Company shall, in lieu
thereof, make payment in cash for such fractional interest (computed to the
nearest 1/100th of a share) calculated on the basis of the last reported sales
price (or bid price if there be no sale) of the Common Stock as reported (i) on
any stock exchange designated by the Company on which the Common Stock may be
traded, or (ii) by any reputable quotation reporting service, if the Common
Stock be not traded on any stock exchange, or (iii) by any dealer in securities
dealing in the Common Stock, if such quotations be not reported by any such
reporting service, on the day on which the Warrants shall be exercised, or, if
none is reported on such date, on the date of the last such reported sale or
bid, or (iv) if there is no dealer in securities who is dealing in the Common
Stock, at the last sale price of any shares of Common Stock sold by the Company.
7. These Warrants shall not entitle the Holder to any voting rights or any
other rights as a shareholder of the Company, or to any other rights except the
rights stated in this certificate; and no dividend or interest shall be payable
or shall accrue in respect of these Warrants or the shares purchasable hereunder
unless, and until, and except to the extent that, these Warrants shall be
exercised.
WITNESS, the seal of the Company and the signatures of its duly authorized
officers.
February 28, 1992
QUICKTURN SYSTEMS, INC.
/s/ Phil Kaufman
By ________________________
Its President
/s/ Dennis Favero
___________________________
Its Secretary
-3-
TO QUICKTURN SYSTEMS, INC.:
ELECTION TO PURCHASE
The undersigned irrevocably elects to purchase shares of Common Stock issuable
upon the exercise of the attached Warrants, and requests that certificates for
such shares shall be issued in the name of and delivered to the address of the
undersigned, at the address stated below and, if the number of shares shall not
be all the shares which may be purchased pursuant to the attached Warrants, that
new Warrants evidencing the right to purchase the balance of such shares be
registered in the name of, and delivered to, the undersigned at the address set
forth below. The undersigned agrees with and represents to the Company that the
shares of the Common Stock are acquired for investment and not with a view to,
or for sale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended.
Payment enclosed in the amount of $_________.
Dated:_________
Name of holder of Warrants:__________________________
(please print)
Address:_______________________________
_______________________________
Signature:_____________________________
Its_____________________________
ASSIGNMENT
For value received ____________________ sells, assigns and transfers unto
____________________ the attached Warrants, together with all right, title and
interest in such Warrants, and irrevocably constitutes and appoints
____________________ attorney, to transfer the Warrants on the books of the
Company, with full power of substitution in the premises.
Dated:________, 199___.
Signature:_____________________________
Its:______________________________
EXHIBIT E
QUICKTURN SYSTEMS, INC.
AUTHORIZED AND ISSUED CAPITAL STOCK
As of March ___, 1992
Authorized Capital Stock
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Common Stock 20,000,000
Series A Preferred Stock 3,500,000
Series B Preferred Stock 1,276,666
Series C Preferred Stock 641,000
Series D Preferred Stock 3,750,000
Outstanding Capital Stock
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Common Stock 1,515,844
Series A Preferred Stock 3,500,000
Series B Preferred Stock 1,276,666 (1)
Series C Preferred Stock 610,000 (2)
Series D Preferred Stock 3,560,000
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(1) 2,159,864 shares Common Stock on an as-converted basis
(2) 1,240,984 shares Common Stock on an as-converted basis
Outstanding Warrants
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Underlying Security No. of Shares Exercise Price
-------------------------- -------------- --------------
Series C Preferred Stock 31,000 (1) $5.00
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(1) 63,066 shares Common Stock on an as-converted basis
EXHIBIT F
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FINANCIAL REPORTS
1. Delivery of Financial Statements. Quickturn shall deliver to Mentor
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Graphics as soon as practicable, but in any event within ninety (90) days after
the end of each fiscal year of Quickturn, an income statement for such fiscal
year, a balance sheet of Quickturn as of the end of such year, and a schedule as
to the sources and applications of funds for such year, such year-end financial
reports to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and audited and certified by independent public
accountants of nationally recognized standing selected by Quickturn.
2. Annual Budget, Inspection Rights and Observer Rights. Quickturn
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shall:
(a) deliver to Mentor Graphics, within fifteen (15) days of the end of
each month, an unaudited income statement for the month and a balance sheet for
and as of the end of such month in the form provided to the Board of Directors
of Quickturn, together with a letter from Quickturn's management describing in
narrative form, operations and material events during the period;
(b) deliver to Mentor Graphics, upon request and within forty-five
(45) days of the end of each fiscal quarter, a copy of a list of shareholders as
of the end of such fiscal quarter, setting forth the name of each shareholder
and the number and type of shares held by such shareholder;
(c) permit Mentor Graphics, at its expense, to visit and inspect
Quickturn's properties, to examine its books of account and records and to
discuss Quickturn's affairs, finances and accounts with its officers, all at
such reasonable times as may be requested by Mentor Graphics; provided, however,
that Quickturn shall not be obligated pursuant to this paragraph to provide
access to any information which it reasonably considers to be a trade secret or
similar confidential information;
(d) provide such other information concerning Quickturn, its business,
prospects, finances, employees, officers and directors, upon reasonable request.