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EXHIBIT 4.1
SYNOPSYS, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Rights Agreement") is made as of
October 26, 1998, by and among Synopsys, Inc., a Delaware corporation
("Parent"), and the undersigned shareholders (each a "Holder" as further defined
below) of Everest Design Automation Inc., a California corporation (the
"Company"), acquiring shares of Parent Common Stock pursuant to that Agreement
of Merger and Plan of Reorganization dated effective as of October 26, 1998 (the
"Reorganization Agreement"), among Parent, Company and Xxxxxxx Acquisition
Corporation, a California corporation and wholly-owned subsidiary of Parent
("Merger Sub"), and pursuant to the related Agreement of Merger (the "Agreement
of Merger") between the Company and Merger Sub and in consideration of such
shareholders' approving the Reorganization Agreement and the transactions
contemplated thereby.
1. Definitions. As used in this Rights Agreement:
(a) "Effective Time" means the time of acceptance by the Secretary of
State of the State of Delaware of the Merger Certificate.
(b) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Holder" means (i) a shareholder of the Company to whom shares of
Common Stock of Parent are issued pursuant to the Reorganization Agreement or
(ii) any transferee to whom registration rights granted under this Rights
Agreement are assigned pursuant to Section 6 of this Rights Agreement.
(d) "Registrable Securities" means, for each Holder, the number of
shares of Common Stock of Parent issued to such Holder pursuant to the
Reorganization Agreement (other than Escrow Shares); provided, however, that any
Common Stock of Parent that were Registrable Securities hereunder shall cease to
be Registrable Securities after the earlier to occur of such time as (i) Parent
has satisfied its obligations to register for resale and maintain the
effectiveness of a registration statement relating to such shares on the terms
and conditions set forth in Section 2(b); or (ii) such shares have been
registered for resale by Parent on Form S-8/S-3 pursuant to Section 6.17 of the
Reorganization Agreement.
(e) "Securities Act" means the Securities Act of 1933, as amended.
(f) "SEC" means the Securities and Exchange Commission.
Terms not otherwise defined herein shall have the meanings given to
them in the Reorganization Agreement.
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2. Holder Registration.
(a) Parent shall use its best efforts to cause the Registrable
Securities held by each Holder to be registered under the Securities Act so as
to permit the sale thereof, and in connection therewith shall prepare and file
with the SEC not later than December 1, 1998, a registration statement covering
all the Registrable Securities on such form as is then available under the
Securities Act; provided, however, that each Holder shall provide all such
information and materials regarding such Holder and take all such action as may
be required by a Holder under applicable laws and regulations in order to permit
Parent to comply with all applicable requirements of the Securities Act, the
Exchange Act, and the SEC, and to obtain any desired acceleration of the
effective date of such registration statement, such provision of information and
materials to be a condition precedent to the obligations of Parent pursuant to
this Rights Agreement to register the Registrable Securities held by each such
Holder. Notwithstanding the foregoing, Parent shall not be required (assuming no
review by the SEC) to request acceleration of such registration statement for
any date prior to the date two days after the public announcement of Parent's
results of operations for the first quarter of Parent's fiscal 1999 reporting
year. The offerings made pursuant to such registration shall not be
underwritten.
(b) Parent shall (i) prepare and file with the SEC the registration
statement in accordance with Section 2 hereof with respect to the Registrable
Securities and shall use its best efforts to cause such registration statement
to become effective as promptly as practicable after filing, including without
limitation using best efforts to respond to comment letters and requests for
information from the SEC, by the second day after the public announcement of
Parent's results of operations for the first quarter of Parent's fiscal 1999
reporting year (but shall not be required to request acceleration for any date
prior to the date two days after the public announcement of Parent's results of
operations for the first quarter of Parent's fiscal 1999 reporting year) and to
keep such registration statement effective until the first to occur of (A) the
date on which all Registrable Securities included within such registration
statement have been sold or (B) the first anniversary of the Effective Time;
(ii) prepare and file with the SEC such amendments to such registration
statement and amendments or supplements to the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities registered
by such registration statement; (iii) furnish to each Holder such number of
copies of any prospectus (including any preliminary prospectus and any amended
or supplemented prospectus) in conformity with the requirements of the
Securities Act, and such other documents, as each Holder may reasonably request
in order to effect the offering and sale of the Registrable Securities to be
offered and sold, but only while Parent shall be required under the provisions
hereof to cause the registration statement to remain effective; (iv) use its
best efforts to register or qualify the Registrable Securities covered by such
registration statement under the securities or blue sky laws of such
jurisdictions as each Holder shall reasonably request (provided that Parent
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such jurisdiction where it has not been qualified or is not otherwise subject to
a general consent for service of process), and do any and all other acts or
things which may be necessary or advisable to enable each Holder to consummate
the public sale or other disposition of such Registrable Securities in such
jurisdictions; and (v) notify each Holder, promptly after it shall receive
notice thereof, of the date and time the registration statement and each
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post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed.
3. Suspension of Prospectus.
(a) Under any registration statement filed pursuant to this Rights
Agreement, Parent may restrict disposition of Registrable Securities, and a
Holder will not be able to dispose of such Registrable Securities, if Parent
shall have delivered a notice in writing to such Holder stating that a delay in
the disposition of such Registrable Securities is necessary because Parent, in
its reasonable judgment, has determined that such sales would require public
disclosure by Parent of material non-public information that is not included in
such registration statement. In the event of the delivery of the notice
described above by Parent in the case of a registration statement filed pursuant
to Section 2, Parent shall amend such registration statement and/or amend or
supplement the related prospectus if necessary to take all other actions
necessary to allow the proposed sale to take place as promptly as possible,
subject, however, to the right of Parent to delay further sales of Registrable
Securities until the conditions or circumstances referred to in the notice have
ceased to exist or have been disclosed. Such right to delay sales shall not
exceed 20 trading days in the aggregate (in addition to the periods under which
Parent may restrict sales pursuant to Section 3(b) below).
(b) In addition to the restrictions on disposition set forth in
subparagraph (a) above, no Holder shall be permitted to dispose of any
Registrable Securities pursuant to the registration statement during the
following periods: (i) the period beginning March 15, 1999 and ending on the
second day after Parent's public announcement of its results of operations for
the second quarter of Parent's fiscal 1999 reporting year; (ii) the period
beginning June 15, 1999 and ending on the second day after Parent's public
announcement of its results of operations for the third quarter of Parent's
fiscal 1999 reporting year; and (iii) the period beginning September 15, 1999
and ending on the second day after Parent's public announcement of its results
of operations for the fourth quarter of Parent's fiscal 1999 reporting year or
the first anniversary of the Effective Time, whichever occurs first. The
limitations of this Section 3(b) shall not apply to dispositions by a Holder in
compliance with all applicable securities laws to any affiliate or constituent
partner, including any limited partner, of a Holder; provided however, that any
transfer of rights under this Rights Agreement complies with Section 6 hereof.
4. Expenses. All of the out-of-pocket expenses incurred in connection
with any registration of Registrable Securities pursuant to this Rights
Agreement, including, without limitation, all SEC, Nasdaq National Market and
blue sky registration and filing fees, printing expenses, transfer agents' and
registrars' fees, and the fees and disbursements of Parent's outside counsel and
independent accountants shall be paid by Parent. Parent shall not be responsible
to pay any legal fees for any Holder or any selling expenses of any Holder
(including, without limitation, any broker's fees or commissions, including
underwriter commissions).
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5. Indemnification.
(a) Parent will indemnify each Holder, each of its officers,
directors and partners and such Holder's legal counsel and independent
accountants, and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Rights Agreement
against all expenses, claims, losses, damages and 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) 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 are made,
not misleading, or any violation by Parent of any rule or regulation promulgated
under the Securities Act, the Exchange Act or state securities laws, or common
law, applicable to Parent in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors and partners and such Holder's legal counsel and independent
accountants and each person controlling such Holder, 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
Parent will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense (i) arises out of or is based in any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to Parent in an
instrument duly executed by such Holder or underwriter and stated to be
specifically for use therein or (ii) applicable to any sale effected by a Holder
during any period in which dispositions were restricted pursuant to Section 3.
(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 Parent, each of its directors and
officers and its legal counsel and independent accountants, each underwriter, if
any, of Parent's securities covered by such a registration statement, each
person who controls Parent 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 or based on 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 Parent, such Holders, such directors, officers, legal counsel,
independent accountants, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating 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 Parent by an instrument duly
executed by such Holder and stated to be specifically for use therein; provided,
however, that the obligations of such Holders hereunder shall be limited to an
amount equal
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to the gross proceeds before expenses and commissions to each such Holder of
Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has written notice 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 be unreasonably
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 Rights Agreement, except to the extent, but only to
the extent, that the Indemnifying Party's ability to defend against such claim
or litigation is impaired as a result of such failure to give notice. 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 any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the Indemnified Party of a
release from all liability in respect to such claim or litigation.
(d) If the indemnification provided for in the preceding paragraphs
of this Section 5 is unavailable to an Indemnified Party in respect of any
expenses, claims, losses, damages or liabilities referred to herein, or is
insufficient to hold such Indemnified Party harmless, then, except to the extent
that contribution is not permitted under Section 11(f) of the Securities Act,
the Company and the Holders, as the case may require, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such expenses,
claims, losses, damages or liabilities in such proportion as is appropriate to
reflect the relative fault of the Company, such Holder, or such Indemnified
Party, as the case may be, in connection with the actions, statements or
omissions that resulted in such expenses, claims, losses, damages or
liabilities. The relative fault of the Company, such Holder, and such
Indemnified Party, shall be determined by reference to, among other things,
whether any action in question, including any untrue statement of a material
fact or omission to state a material fact, has been taken or made by, or relates
to information supplied by, the Company, such Holder, or such Indemnified Party,
and the parties' relative intent, knowledge, access to information concerning
the matter with respect to which the claim was asserted and opportunity to
correct or prevent such action, statement or omission, as well as any other
relevant equitable considerations appropriate under the circumstances. The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this paragraph (d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding sentence.
Notwithstanding the provisions of this paragraph (d), no Holder shall be
required to contribute any amount in excess of the amount by which the gross
proceeds (after deducting reasonable expenses and commissions) received by such
Holder from the sale of Registrable Securities exceeds the amount of any damages
that such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
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Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) The obligations of Parent and each Holder under this Section 5
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Rights Agreement and otherwise.
6. Assignment of Registration Rights. The rights to cause Parent to
register Registrable Securities pursuant to this Rights Agreement may be
assigned by a Holder to a transferee of Registrable Securities only if: (a)
Parent is, prior to such transfer, furnished with written notice of the name and
address of such transferee and the Registrable Securities with respect to which
such registration rights are being assigned and a copy of a duly executed
written instrument in form reasonably satisfactory to Parent by which such
transferee assumes all of the obligations and liabilities of its transferor
hereunder and agrees itself to be bound hereby and (b) immediately following
such transfer the disposition of such Registrable Securities by the transferee
is restricted under the Securities Act.
7. Amendment of Registration Rights. Holders of a majority of the
Registrable Securities from time to time outstanding may, with the consent of
Parent, amend the registration rights granted hereunder.
8. Compliance with Laws. Parent agrees, in connection with the
registration rights granted hereunder, to comply with applicable provisions of
the Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder such that the benefits of such rights will inure to the
Holders.
9. Counterparts. This Rights Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties executing
such counterparts, and all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Rights Agreement
as of the day and year first written above.
SYNOPSYS, INC.
By:
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Name:
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Title:
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HOLDER
By:
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Name:
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Title:
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[Signature Page to Rights Agreement]
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