EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of May 12, 1998, by
and between IKOS Systems, Inc., a Delaware corporation (the "Company"), and Xxxx
Xxxx and Xxxxx Xxxx (collectively, the "Principals"), having received the right
to receive shares of IKOS common stock pursuant to that certain CONSULTING,
ASSIGNMENT AND TECHNOLOGY USE RESTRICTION AGREEMENT of even date herewith (the
"Agreement").
RECITAL
Pursuant to the terms of the Agreement, the Company and the Principals
desire to provide for certain registration and other rights all as set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties agree as follows:
1. Registration Rights.
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1.1 Definitions. As used in this Agreement, the following terms shall have
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the following respective meanings:
(a) The term "Commission" means the Securities and Exchange
Commission.
(b) The terms "Holder" or "Holders" mean any person or persons to whom
Registrable Securities were originally issued or successors and assignees under
Section 2.3 hereof who hold Registrable Securities.
(c) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing with the SEC a registration
statement in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of the effectiveness of such
registration statement.
(d) The term "Registrable Securities" means (i) all shares of the
Company's common stock issued in connection with the Agreement; (ii) all shares
of capital stock issued in lieu of any of the stock referred to in clause (i) in
any reorganization, which have not been sold to the public; and (iii) all shares
of capital stock issued in respect of any of the stock referred to in clauses
(i) or (ii) as a result of any stock split, stock dividend, recapitalization or
the like, which have not been sold to the public.
1.2 Required Registration.
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(i) Obligation of the Company. Should the Company issue shares
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of its common stock on or before each Release Date (as defined in the
Agreement) or as
1
soon as practicable thereafter, the Company shall (i) prepare and file with the
Commission a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the disposition of the Registrable Securities in
accordance with the intended method or methods of disposition thereof (or amend
such initial registration statement to achieve the same result) and (ii) use its
best efforts to cause such registration statement to be declared effective by
the Commission as soon as possible thereafter, and shall use its best efforts to
effect all such other registrations, qualifications and compliances (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualifications under the applicable blue sky or other
state securities laws and appropriate compliance with exemptive regulations
issued under the Securities Act and any other governmental requirements or
regulations) as would permit or facilitate the sale and distribution of all of
the Registrable Securities; provided that the Company shall not be obligated to
take any action to effect such registration, qualification or compliance
pursuant to this subsection 1.2 in any particular jurisdiction in which the
Company would be required to execute a general qualification or compliance
unless the Company is already subject to service in such jurisdiction and except
as required by the Securities Act.
(b) Shelf Registration. Upon filing any registration pursuant to
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Section 1 herein, the Company shall use its best efforts to keep such
registration effective for at least one hundred eighty (180) days or, if longer,
until all Registrable Securities included therein have been sold by the Holders
thereof.
1.3 Indemnification.
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(a) The Company will indemnify each Holder, each of its officers and
directors and partners, and each person controlling such person within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 1, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) by
the Company of a material fact contained in any registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with any such registration, qualification or compliance pursuant to the
Securities Act or any state securities laws, rules or regulations, and the
Company will reimburse each such Holder, each of its officers and directors, and
each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable to any such person in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission (or alleged untrue statement or omission), made in
reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, controlling person or underwriter and
stated to be specifically for use therein or the preparation thereby.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such Holder,
such directors, officers, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder and stated to be
specifically for use therein or the preparation thereby.
(c) Each party entitled to indemnification under this Section 1.3 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1 unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate and
different defenses. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
1.4 Rule 144 Reporting. With a view to making available to Holders the
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benefits of Rule 144 promulgated by the Commission under the Securities Act, the
Company agrees to use its best efforts to:
(a) make and keep adequate current public information with respect to
the Company available, as those terms are used in Rule 144 under the Securities
Act, at all times after the Effective Date (as defined in the Agreement);
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); and
(c) furnish to Holders promptly upon request a written statement by
the Company as to its compliance with the reporting requirements of Rule 144 and
the Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company as any Holder may
reasonably request in order to permit such Holder to avail itself of any rule or
regulation of the Commission allowing such Holder to sell its Company common
stock without registration.
1.5 Assignment of Registration Rights. The rights to cause the Company to
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register Registrable Securities pursuant to this Section 1 may be assigned by a
Holder to a transferee or assignee of Registrable Securities; provided, however,
that no such transferee or assignee shall be entitled to registration rights
under Sections 1.2 or 1.5 hereof unless it acquires at least twenty-five
thousand (25,000) shares of Registrable Securities (as adjusted for stock splits
and combinations) and the Company shall, within a reasonable time, be furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned. Notwithstanding the foregoing, rights to cause the Company to register
securities may be assigned to any subsidiary, parent, partner or retired partner
of a Holder or any family member or Trust for the benefit of any Holder.
2. General.
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2.1 Waivers and Amendments. With the written consent of the record or
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beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities without the consent of all of
the Holders of the Registrable Securities. Upon the effectuation of each such
waiver, consent, agreement of amendment or modification, the Company shall
promptly give written notice thereof to the record holders of the Registrable
Securities who have not previously consented thereto in writing. This Agreement
or any provision hereof may be changed, waived, discharged or terminated only by
a statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this Section 2.1.
2.2 Governing Law. This Agreement shall be governed in all respects by the
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laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
2.3 Successors and Assigns. Except as otherwise expressly provided
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herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
2.4 Entire Agreement. This Agreement and the other documents delivered
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pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof, and this
Agreement shall supersede and cancel all prior agreements between the parties
hereto with regard to the subject matter hereof.
2.5 Notices, etc. All notices and other communications required or
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permitted hereunder shall be in writing and shall be effective upon personal
delivery or three (3) business days after mailing by first class mail, postage
prepaid, certified or registered mail, return receipt requested, addressed (a)
if to any Holder, at such Holder's address as set forth in the Company's
records, or at such other address as such Holder shall have furnished to the
Company in writing, or (b) if to the Company, at 00000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000, or at such other address as the Company shall have
furnished to the Holder in writing.
2.6 Severability. In case any provision of this Agreement shall be
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invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and subsections of
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this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
2.8 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereby have executed this Agreement on the
date first above written.
COMPANY:
IKOS SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Its: Chief Financial Officer
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PRINCIPALS:
/s/ Xxxx Xxxx
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Xxxx Xxxx
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
