Document:

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                                                                   EXHIBIT 10.27

PORTIONS OF THIS EXHIBIT HAVE BEEN DELETED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

                    FIRST AMENDMENT AND SETTLEMENT AGREEMENT

        This First Amendment and Settlement Agreement, effective as of the date
set forth above the signatures of the parties below, (i) resolves a dispute
between the parties hereto relating to past royalties due under the Exclusive
Patent License Agreement dated December 22, 1993 ("12/22/93 LICENSE AGREEMENT")
between MASSACHUSETTS INSTITUTE OF TECHNOLOGY ("M.I.T."), a Massachusetts
corporation having its principal office at 77 Massachusetts Avenue, Cambridge,
Massachusetts, 02139, USA and VIRTUAL MACHINE WORKS, INC. ("VMW"), a Delaware
corporation having its principal office at 66 Griffin Road, Framingham,
Massachusetts, 01701 and (ii) amends that Agreement as contained herein.

               WHEREAS, on May 13, 1996, IKOS Systems, Inc., ("IKOS") a
California corporation having its principal office at 79 Great Oaks Blvd., San
Jose, CA 95119-1311, acquired a substantial portion of the business to which the
12/22/93 LICENSE AGREEMENT relates;

        WHEREAS, on May 13, 1996, in connection with such acquisition, and with
M.I.T.'s consent, VMW assigned all of its right, title and interest under the
12/22/93 LICENSE AGREEMENT to IKOS, and IKOS, in accepting the assignment,
assumed all rights and obligations of VMW under the 12/22/93 LICENSE AGREEMENT;

        WHEREAS, M.I.T. and IKOS desire to resolve alleged overdue royalty
payments pursuant to the terms contained herein; and

        WHEREAS, IKOS and M.I.T. wish to modify the provisions of the 12/22/93
LICENSE AGREEMENT for reasons which include simplifying royalty accounting and
reporting.

        NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties hereby agree to modify the 12/22/93 LICENSE
AGREEMENT as follows:

        1. IKOS and M.I.T. agree that in consideration of granting this
Amendment and resolving the alleged dispute, IKOS shall pay shall pay to M.I.T.
*** dollars ($ ***), which shall be due immediately and payable as follows: ***
dollars ($ ***) shall be paid on or before March 15, 2002, and the remaining ***
dollars ($ ***) shall be paid on or before July 31, 2002.

*** Confidential Treatment Requested
<PAGE>

2. For clarification, the parties acknowledge that by virtue of the May 13, 1996
assignment of the 12/22/93 LICENSE AGREEMENT to IKOS, LICENSEE, as defined in
Paragraph 1 on page 1 of the 12/22/93 LICENSE AGREEMENT, and as further defined
in Section 1.1, shall now mean:

        (a) IKOS;

        (b) a related company of IKOS, the voting stock of which is directly or
indirectly at least fifty percent (50%) owned or controlled by IKOS;

        (c) an organization which directly or indirectly controls more than
fifty percent (50%) of the voting stock of IKOS; and

        (d) an organization, the majority ownership of which is directly or
indirectly common to the ownership of IKOS.

        3. Section 1.6 shall be deleted and replaced with the following:

                1.6 "NET SALES" shall mean ***

*** Confidential Treatment Requested

                                       2

<PAGE>
        4. Section 2.5 shall be deleted and replaced with the following:

                2.5 In order to establish a period of exclusivity for LICENSEE,
        M.I.T. hereby agrees that it shall not grant any other license under the
        PATENT RIGHTS during the period of time commencing on the EFFECTIVE DATE
        and terminating with the expiration or abandonment of all issued patents
        and filed patent applications within the PATENT RIGHTS, unless earlier
        terminated in accordance with the provisions of this Agreement.

        5. M.I.T. hereby represents and warrants that, to its knowledge and with
inquiry, it has not granted any licenses to any of the PATENT RIGHTS other than
by means of the 12/22/93 LICENSE AGREEMENT.

        6. Section 2.6 shall be deleted

        7. Section 4.1(a) shall be deleted and replaced with the following:

                a. Running Royalties in the amount equal to *** (***%).
                of NET SALES by and/or for LICENSEE and/or its sublicensees.

        8. In consideration of the monies payable hereunder and the promises
made herein, M.I.T. hereby waives and releases IKOS from any and all claims
arising out of or relating to non-payment of monies due prior to October 1, 2001
under the 12/22/93 LICENSE AGREEMENT.

                                       3

*** Confidential Treatment Requested
<PAGE>
        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed under seal by their duly authorized representatives.

THE EFFECTIVE DATE OF THIS FIRST AMENDMENT IS OCTOBER 1, 2001.

MASSACHUSETTS INSTITUTE OF                IKOS SYSTEMS, INC.
TECHNOLOGY

By:    /s/ John H. Turner, Jr.            By:    /s/ Joseph W. Rockom
       ---------------------------               ----------------------------
Name:  John H. Turner, Jr.                 Name:  Joseph W. Rockom
       ---------------------------               ----------------------------
Title: Associate Director                 Title: CFO
       ---------------------------               ----------------------------
       Technology Licensing Office
       ---------------------------

                                       4<PAGE>
                                                                   EXHIBIT 10.28

August 14, 1998

Mr. Gunnar Gooding

Dear Gunnar:

We are pleased to offer you the position of Vice President, General Counsel,
reporting directly to me. We anticipate your start date to be on September 14,
1998, and your starting salary will be $170,000. Also, you will receive an
annual MBO potential of $100,000 as follows:

<TABLE>
<CAPTION>
                  COST SAVINGS                       BONUS EARNED
                  ------------                       ------------
<S>                                                  <C>
                    $200,000                            $50,000
                    $400,000                            $70,000
                    $600,000                            $80,000
                    $800,000                           $100,000
</TABLE>

You will receive a $300/month car allowance including reimbursement for gas
receipts, and phone reimbursement up to $200/month.

Pending approval of the Compensation Committee of the Board of Directors, you
will also receive 12,000 stock options valued as of today ($18.63/share). These
options will vest over a five year period at 20% a year. After six months of
employment, you may also participate in the Remedy Stock Purchase Plan.

You will be eligible for Remedy's Executive Health Benefits Program, which
includes a fully paid Health Plan, a $5,000 Medical Reimbursement Program, a
$100,000 Whole Life Insurance Policy and a Long Term Disability Plan, beginning
the 1st of the month, 90 days from your start date. Remedy will reimburse you
for all costs incurred by you to continue your old benefits plan (COBRA), until
your Remedy benefits begin. Also, you will be eligible to participate in the
Executive Deferred Compensation Plan. Also, you will be eligible for three weeks
vacation per year. Additionally, should Remedy be purchased, acquired or merged,
and as a result, you are terminated at no fault of your own within one year of
that activity, you will be provided one-year severance of base and bonus.

This offer is contingent on appropriate references. We are looking forward to
your being an integral part of the Remedy team.

Sincerely,

Jeff Elias                                Accepted By:
Senior Vice President
HR and Administration                     /s/ GUNNAR GOODING     August 14, 1998
                                          --------------------------------------
JE/mw                                     Gunnar Gooding             Date

cc:      Paul Mikos, President and CEO
         Bob McDonough, Chairman<PAGE>
                                                                   EXHIBIT 10.29

August 18, 1998

Mr. Cosmos Lykos

Dear Cosmos:

We are pleased to offer you the position of Vice President, General Counsel,
reporting directly to Paul Mikos, President and CEO. We anticipate your start
date to be on or before September 28, 1998, and your starting salary will be
$140,000. Also, you will receive an annual MBO potential of $35,000. You and
Paul will mutually determine your MBOs within the first 60 days of your
employment. You will receive a $300/month car allowance including reimbursement
for gas receipts, and phone reimbursement up to $200/month.

Pending approval of the Compensation Committee of the Board of Directors, you
will also receive 12,000 stock options valued as of the day we extended the
offer, August 13, 1998 at ($17.93/share). These options will vest over a
five-year period at 20% a year. After 6 months of employment, you may also
participate in the Remedy Stock Purchase Plan.

You will be eligible for Remedy's Executive Health Benefits Program, which
includes a fully paid Health Plan, a $5,000 Medical Reimbursement Program, a
$100,000 Whole Life Insurance Policy and a Long Term Disability Plan, beginning
the 1st of the month, 90 days from your start date. Remedy will reimburse you
for all costs incurred by you to continue your old benefits plan (COBRA), until
your Remedy benefits begin. Also, you will be eligible to participate in the
Executive Deferred Compensation Plan. Also, you will be eligible for three weeks
vacation a year. Additionally, should Remedy be purchased, acquired or merged,
and as a result, you are terminated, at no fault of your own within one year of
that activity, you will be provided one year severance pay of base and bonus.

This offer is contingent on appropriate references. We are looking forward to
your being an integral part of the Remedy team.

Sincerely,

Jeff Elias                               Accepted By:
Senior Vice President
HR and Administration                    /s/ COSMOS LYKOS        August 18, 1998
                                         ---------------------------------------
JE/mw                                    Cosmos Lykos                   Date

CC:      Paul Mikos, President, and CEO
         Bob McDonough, Chairman

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