EXHIBIT 10.40
INVESTORS' RIGHTS AGREEMENT
THIS INVESTORS' RIGHTS AGREEMENT is made as of the 2nd day of October,
1998, by and among Viewlogic Systems, Inc., a Delaware corporation (the
"Company"), Synopsys, Inc., a Delaware corporation ("Synopsys") and the
investors listed on Schedule A hereto, each of which is herein referred to as an
"Investor."
RECITALS
WHEREAS, the Company and the Investors are parties to the Series A
Preferred Stock Purchase Agreement of even date herewith (the "Series A
Agreement");
WHEREAS, in order to induce the Company and Synopsys to approve the
issuance by the Company of its Series A Voting Preferred Stock and Series A-1
Non-Voting Preferred Stock (collectively, the "Series A Preferred Stock") and to
induce the Investors to invest funds in the Company pursuant to the Series A
Agreement, the Investors, Synopsys and the Company hereby agree that this
Agreement shall govern the rights of the Investors and Synopsys to cause the
Company to register shares of Common Stock of the Company (the "Common Stock")
issued or issuable to them and certain other matters as set forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC that permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.11 hereof.
(d) The term "Initial Offering" means the Company's first bona
fide firm commitment underwritten public offering of its Common Stock under the
Act with aggregate gross proceeds in excess of $20,000,000.
(e) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(f) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(g) The term "Registrable Securities" means (i) the Common Stock
issuable or issued upon conversion of the Series A Preferred Stock; (ii) the
3,966,722 shares of Common Stock issued to Synopsys; and (iii) any Common Stock
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security that is issued as) a dividend or other distribution with respect
to, or in exchange for, or in replacement of, the shares referenced in (i) and
(ii) above, excluding in all cases, however, any Registrable Securities sold by
a person in a transaction in which his rights under this Section 1 are not
assigned provided, however, that shares of Common Stock which are Registrable
Securities shall cease to be Registrable Securities upon (A) any sale pursuant
to a Registration Statement or Rule 144(k) under the Securities Act or (ii) any
sale or transfer in any manner to a person or entity which, by virtue of Section
1.14 of this Agreement is not entitled to the rights provided for herein.
(h) The number of shares of "Registrable Securities" outstanding
shall be determined by the number of shares of Common Stock outstanding that are
Registrable Securities (assuming conversion into Common Stock of all outstanding
Series A Preferred Stock).
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 REQUEST FOR REGISTRATION.
(a) REQUEST RIGHTS OF SYNOPSYS. Subject to the conditions of
this Section 1.2, if the Company shall receive at any time not less than 180
days after the effective date of the Initial Offering, a written request from
Synopsys that the Company file a registration statement under the Act, then the
Company shall, within twenty (20) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this
Section 1.2, use all reasonable efforts to effect, as soon as practicable, the
registration under the Act of all Registrable Securities that the Holders
request to be registered in a written request received by the Company within
twenty (20) days of the mailing of the Company's notice pursuant to this
Section 1.2(a).
(b) REQUEST RIGHTS OF THE SERIES A HOLDERS. Subject to the
conditions of this Section 1.2, if the Company shall receive at any time not
less than 180 days after the effective date of the Initial Offering, a written
request from the Holders of thirty percent (30%) or more of the Registrable
Securities then outstanding (the "Initiating Series A Holders") that the Company
file a registration statement under the Act, then the Company shall, within
twenty (20) days of the receipt thereof, give written notice of such request to
all Holders, and subject to the
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limitations of this Section 1.2, use all reasonable efforts to effect, as soon
as practicable, the registration under the Act of all Registrable Securities
that the Holders request to be registered in a written request received by the
Company within twenty (20) days of the mailing of the Company's notice pursuant
to this Section 1.2(b).
(c) If the Initiating Series A Holders or Synopsys intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 1.2 and the Company shall include such information in
the written notice referred to in Section 1.2(a) or 1.2(b). In such event the
right of any Holder to include its Registrable Securities in such registration
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the Initiating
Series A Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company (which underwriter or
underwriters shall be reasonably acceptable to a majority in interest of the
Initiating Series A Holders). Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Company that marketing factors
require a limitation of the number of securities underwritten (including
Registrable Securities), then the Company shall so advise all Holders of
Registrable Securities that would otherwise be underwritten pursuant hereto, and
the number of shares that may be included in the underwriting shall be allocated
to the Holders of such Registrable Securities on a pro rata basis based on the
number of Registrable Securities held by all such Holders (including the
Initiating Series A Holders). Any Registrable Securities excluded or withdrawn
from such underwriting shall be withdrawn from the registration.
(d) The Company shall not be required to effect a registration
pursuant to this Section 1.2:
(i) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, unless the Company is already subject to service in
such jurisdiction and except as may be required under the Act; or
(ii) after the Company has effected two (2) registrations
pursuant to this Section 1.2 in any twelve month period, and such registrations
have been declared or ordered effective; or
(iii) if the request covers the registration of
Registrable Securities with an anticipated aggregate offering price of less than
$5,000,000; or
(iv) during the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of the filing of,
and ending on a date one
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hundred eighty (180) days following the effective date of, a Company-initiated
registration subject to Section 1.3(a) below, provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(v) if Synopsys or the Initiating Series A Holders, as
the case may be, propose to dispose of Registrable Securities that may be
registered on Form S-3 pursuant to Section 1.4 hereof; or
(vi) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 1.2, a certificate signed by the
Company's Chief Executive Officer or Chairman of the Board stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be effected at such time, in which event the Company shall have the
right to defer such filing for a period of not more than ninety (90) days after
receipt of the request of Synopsys or the Initiating Series A Holders, as
applicable, provided that such right to delay a request shall be exercised by
the Company not more than once in any twelve (12)-month period.
(e) The Company shall not be required to effect a registration
pursuant to Section 1.2(a) after the Company has effected six (6) registrations
pursuant to Section 1.2(a), and such registrations have been declared or ordered
effective.
(f) The Company shall not be required to effect a registration
pursuant to Section 1.2(b) after the Company has effected two (2) registrations
pursuant to Section 1.2(b), and such registrations have been declared or ordered
effective.
1.3 PIGGY-BACK REGISTRATION RIGHTS.
(a) COMPANY REGISTRATIONS.
(i) If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock or other
securities under the Act in connection with the public offering of such
securities (other than a registration relating solely to the sale of securities
to participants in a Company stock plan, a registration relating to a corporate
reorganization or other transaction under Rule 145 of the Act, a registration on
any form that does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities, or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities that are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 4.5, the Company shall, subject to the provisions of
Section 1.3(a)(iii), use all
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reasonable efforts to cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
(ii) RIGHT TO TERMINATE REGISTRATION. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 1.3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The expenses
of such withdrawn registration shall be borne by the Company in accordance with
Section 1.7 hereof.
(iii) UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall so advise the Holders in the written notice delivered pursuant to
Section 1.3(a) hereof. In such event the right of any Holders to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriters or
underwriters selected for such underwriting by the Company. Notwithstanding any
other provision of this Section 1.3, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities underwritten,
then the Company shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders; PROVIDED, HOWEVER, that in no event shall
the amount of securities of the selling Holders included in such offering be
reduced to an amount less than 20% of the total amount of securities included in
such offering unless such offering is the Initial Offering, in which case the
selling Holders may be excluded if the underwriters make the determination
described above and no other stockholder's securities are included.
(b) OTHER REGISTRATIONS.
(i) If the Company proposes to register any of its stock
or other securities under the Act pursuant to Section 1.2, the Company shall, at
such time, promptly give each Holder written notice of such registration. Upon
the written request of each Holder given within twenty (20) days after mailing
of such notice by the Company in accordance with Section 4.5, the Company shall,
subject to the provisions of Section 1.3(b)(iii), use all reasonable efforts to
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered.
(ii) RIGHT TO TERMINATE REGISTRATION. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 1.3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities
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in such registration. The expenses of such withdrawn registration shall be
borne by the Company in accordance with Section 1.7 hereof.
(iii) UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall so advise the Holders in the written notice delivered pursuant to
Section 1.3(a) hereof. In such event the right of any Holders to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriters or
underwriters selected for such underwriting by the Company. Notwithstanding any
other provision of this Section 1.3, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities underwritten,
then the Company shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders; PROVIDED, HOWEVER, that in no event shall
the amount of securities of the selling Holders included in such offering be
reduced to an amount less than 20% of the total amount of securities included in
such offering unless such offering is the Initial Offering, in which case the
selling Holders may be excluded if the underwriters make the determination
described above and no other stockholder's securities are included.
1.4 FORM S-3 REGISTRATION. If the Company shall receive at any time
not less than 180 days after the effective date of the Initial Offering, a
written request from the Holders of thirty percent (30%) or more of the
Registrable Securities then outstanding a written request or requests that the
Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company shall:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) use all reasonable efforts to effect, as soon as
practicable, such registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the sale and distribution
of all or such portion of such Holders' Registrable Securities as are specified
in such request, together with all or such portion of the Registrable Securities
of any other Holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such written notice from
the Company; PROVIDED, HOWEVER, that the Company shall not be obligated to
effect any such registration, qualification or compliance, pursuant to this
Section 1.4:
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(i) if Form S-3 is not available for such offering by
the Holders;
(ii) if the Holders propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than
$1,000,000;
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chief Executive Officer or Chairman of the Board of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than one hundred twenty (120)
days after receipt of the request of the Holder or Holders under this
Section 1.4; PROVIDED, HOWEVER, that the Company shall not utilize this right
more than once in any twelve month period;
(iv) if the Company has, within the six-month period
preceding the date of such request, already effected one registration on
Form S-3 for the Holders pursuant to this Section 1.4; or
(v) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. Registrations effected pursuant to this
Section 1.4 shall not be counted as requests for registration effected pursuant
to Sections 1.2.
1.5 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or, if earlier, until the distribution contemplated in the
Registration Statement has been completed;
(b) prepare and file with the SEC such amendments and
supplements to such registration
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statement and the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement;
(c) furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them;
(d) use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
"blue sky" laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company 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 states or jurisdictions;
(e) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering;
(f) notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act or the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(g) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed; and
(h) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
1.6 INFORMATION FROM HOLDER. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.7 EXPENSES OF REGISTRATION. All expenses, other than underwriting
discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 1.2, 1.3 and 1.4, including (without
limitation) all registration, filing and qualification
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fees, printers' and accounting fees, fees and disbursements of counsel for the
Company and the reasonable fees and disbursements of one counsel for the selling
Holders shall be borne by the Company. Notwithstanding the foregoing, the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all participating Holders
shall bear such expenses pro rata based upon the number of Registrable
Securities that were to be requested in the withdrawn registration), unless, in
the case of a registration requested under Section 1.2, the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 1.2; PROVIDED, HOWEVER, that if at the
time of such withdrawal, the Holders have learned of a material adverse change
in the condition, business, or prospects of the Company from that known to the
Holders at the time of their request and have withdrawn the request with
reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Section 1.2.
1.8 DELAY OF REGISTRATION. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners or officers, directors and
stockholders of each Holder, legal counsel and accountants for each Holder, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the 1934
Act, against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Act, the 1934 Act or any state
securities laws, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities laws or any rule or regulation promulgated under the Act, the
1934 Act or any state securities laws; and the Company will reimburse each such
Holder, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section l.9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably
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withheld), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation that occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person; provided
further, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Holder or
underwriter, or any person controlling such Holder or underwriter, from whom the
person asserting any such losses, claims, damages or liabilities purchased
shares in the offering, if a copy of the prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Holder or underwriter to
such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the shares to such person, and if the
prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(b) To the extent permitted by law, each selling Holder will,
severally and not jointly, indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Act, legal
counsel and accountants for the Company, any underwriter, any other Holder
selling securities in such registration statement and any controlling person of
any such underwriter or other Holder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Act, the 1934 Act or any state securities laws, insofar as
such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly for use
in connection with such registration; and each such Holder will reimburse any
person intended to be indemnified pursuant to this Section l.9(b), for any legal
or other expenses reasonably incurred by such person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section l.9(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder (which consent shall not be unreasonably withheld), provided that in no
event shall any indemnity under this Section l.9(b) exceed the gross proceeds
from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
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with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 1.9, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 1.9.
(d) If the indemnification provided for in this Section 1.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this
Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.10 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after 90 days from the
effective date of the Initial Offering;
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(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC that permits the
selling of any such securities without registration or pursuant to such form.
1.11 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities that (i) is a subsidiary, parent, partner, limited
partner, retired partner or stockholder of a Holder, (ii) is a Holder's family
member or trust for the benefit of an individual Holder, or (iii) after such
assignment or transfer, holds (A) with respect to any Holder, at least 1,000,000
shares of Registrable Securities or (B) with respect to Synopsys, after such
assignment or transfer, holds at least 50% of the shares held by Synopsys on the
date hereof (subject to appropriate adjustment for stock splits, stock
dividends, combinations and other recapitalizations), provided: (a) the Company
is, within a reasonable time after such transfer, 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; (b) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement, including without limitation the provisions of
Section 1.13 below; and (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act.
1.12 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of 66-2/3% of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company that would grant such holder or prospective holder
registration rights with respect to such securities unless under the terms of
such agreement, such rights are subordinate to those granted herein.
1.13 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that it
will not, without the prior written consent of the managing underwriter, during
the period commencing on the date of the final prospectus relating to the
Company's initial public offering and ending on the date specified by the
Company and the managing underwriter (such period not to exceed one hundred
eighty (180) days) (i) lend, offer, pledge, sell, contract to sell, sell any
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option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (whether such shares or any
such securities are then owned by the Holder or are thereafter acquired), or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The underwriters in connection with the Company's initial public
offering are intended third party beneficiaries of this Section 1.13 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
1.14 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled
to exercise any right provided for in this Section 1 after three (3) years
following the consummation of the Initial Offering or, as to any Holder, such
earlier time at which all Registrable Securities held by such Holder (and any
affiliate of the Holder with whom such Holder must aggregate its sales under
Rule 144) can be sold in any three (3)-month period without registration in
compliance with Rule 144 of the Act.
2. COVENANTS OF THE COMPANY.
2.1 DELIVERY OF FINANCIAL STATEMENTS. The Company shall deliver to
Synopsys or any Investor or transferee or assignee of Synopsys who acquires at
least 50% of the shares held by Synopsys on the date hereof or any Investor that
holds at least fifty percent (50%) of the shares held by such person or entity
on the date hereof (a "Major Stockholder"):
(a) as soon as practicable, but in any event within ninety (90)
days after the end of each fiscal year of the Company, an income statement for
such fiscal year, a balance sheet of the Company and statement of stockholder's
equity as of the end of such year, and a statement of cash flows for such year,
such year-end financial reports to be in reasonable detail, prepared in
accordance with generally accepted accounting principles ("GAAP"), and audited
and certified by independent public accountants of nationally recognized
standing selected by the Company;
(b) as soon as practicable, but in any event within forty-five
(45) days after the end of each of the first three (3) quarters of each fiscal
year of the Company, an unaudited income statement, statement of cash flows for
such fiscal quarter and an unaudited balance sheet as of the end of such fiscal
quarter;
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(c) within thirty (30) days of the end of each month, an
unaudited income statement and statement of cash flows and balance sheet for and
as of the end of such month, in reasonable detail;
(d) as soon as practicable, but in any event at least thirty
(30) days prior to the end of each fiscal year, a budget and business plan for
the next fiscal year, prepared on a monthly basis, including balance sheets,
income statements and statements of cash flows for such months and, as soon as
prepared, any other budgets or revised budgets prepared by the Company;
(e) with respect to the financial statements called for in
subsections (b) and (c) of this Section 2.1, an instrument executed by the Chief
Financial Officer or President of the Company certifying that such financials
were prepared in accordance with GAAP consistently applied with prior practice
for earlier periods (with the exception of footnotes that may be required by
GAAP) and fairly present the financial condition of the Company and its results
of operation for the period specified, subject to year-end audit adjustment; and
(f) such other information relating to the financial condition,
business, prospects or corporate affairs of the Company as a Major Stockholder
may from time to time request, provided, however, that the Company shall not be
obligated under this subsection (f) or any other subsection of Section 2.1 to
provide information that it deems in good faith to be a trade secret or similar
confidential information.
2.2 INSPECTION. The Company shall permit each Major Stockholder, at
such Major Stockholder's expense, to visit and inspect the Company's properties,
to examine its books of account and records and to discuss the Company's
affairs, finances and accounts with its officers, all at such reasonable times
as may be requested by the Major Stockholder; provided, however, that the
Company shall not be obligated pursuant to this Section 2.2 to provide access to
any information that it reasonably considers to be a trade secret or similar
confidential information.
2.3 TERMINATION OF INFORMATION AND INSPECTION COVENANTS. The
covenants set forth in Sections 2.1 and 2.2 shall terminate as to Major
Stockholders and be of no further force or effect when the sale of securities
pursuant to a registration statement filed by the Company under the Act in
connection with the firm commitment underwritten offering of its securities to
the general public is consummated or when the Company first becomes subject to
the periodic reporting requirements of Sections 12(g) or 15(d) of the 1934 Act,
whichever event shall first occur.
2.4 RIGHT OF FIRST OFFER. Subject to the terms and conditions
specified in this Section 2.4, the Company hereby grants to each Major
Stockholder a right of first offer with respect to future sales by the Company
of its Shares (as hereinafter defined). For purposes of this Section 2.4, Major
Stockholder includes any general partners and affiliates of a Major
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Stockholder. A Major Stockholder shall be entitled to apportion the right of
first offer hereby granted it among itself and its partners and affiliates in
such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exchangeable or exercisable for any shares of, any class of
its capital stock ("Shares"), the Company shall first make an offering of such
Shares to each Major Stockholder in accordance with the following provisions.
(a) The Company shall deliver a notice in accordance with
Section 3.5 ("Notice") to the Major Stockholders stating (i) its bona fide
intention to offer such Shares, (ii) the number of such Shares to be offered,
and (iii) the price and terms upon which it proposes to offer such Shares.
(b) By written notification received by the Company, within
twenty (20) calendar days after the Major Stockholder's receipt of the Notice,
the Major Stockholder may elect to purchase or obtain, at the price and on the
terms specified in the Notice, up to that portion of such Shares that equals the
proportion that the number of shares of Common Stock issued and held by such
Major Stockholder (assuming conversion into Common Stock of any Preferred Stock
and any convertible securities) bears to the total number of shares of Common
Stock of the Company then issued and outstanding and held by all the Major
Stockholders (assuming conversion into Common Stock of any Preferred Stock and
any convertible securities). The Company shall promptly, in writing, inform
each Major Stockholder that elects to purchase all the shares available to it (a
"Fully-Exercising Investor") of any other Major Stockholder's failure to do
likewise. During the ten (10) day period commencing after such information is
given, each Fully-Exercising Investor may elect to purchase that portion of the
Shares for which Major Stockholders were entitled to subscribe but were not so
subscribed equal to the proportion that (i) the number of shares of Common Stock
issued and held by such Fully-Exercising Investor (assuming conversion into
Common Stock of any Preferred Stock and any convertible securities) bears to
(ii) the total number of shares of Common Stock issued and outstanding and then
held, by all Fully-Exercising Investors who wish to purchase some of the
unsubscribed shares (assuming conversion into Common Stock of any Preferred
Stock and any convertible securities).
(c) If all Shares that the Major Stockholders are entitled to
obtain pursuant to Section 2.4(b) are not elected to be obtained as provided in
Section 2.4(b) hereof, the Company may, during the ninety (90) day period
following the expiration of the period provided in Section 2.4(b) hereof, offer
the remaining unsubscribed portion of such Shares to any person or persons at a
price not less than, and upon terms no more favorable to the offeree than those
specified in the Notice. If the Company does not complete the sale of the
Shares within such period, the right provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first reoffered to the Major
Stockholders in accordance herewith.
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(d) The right of first offer in this Section 2.4 shall not be
applicable to (i) the issuance or sale of shares of Common Stock (or options
therefor) under employee benefit plans as in existence on the date hereof to
employees, directors and consultants for the primary purpose of soliciting or
retaining their services; (ii) the issuance of securities pursuant to a bona
fide, firmly underwritten public offering of shares of Common Stock, registered
under the Act, at an offering price of at least $5.00 per share (appropriately
adjusted for any stock split, dividend, combination or other recapitalization)
and resulting in proceeds to the Company of at least $20 million in the
aggregate; (iii) the issuance of securities pursuant to the conversion or
exercise of convertible or exercisable securities; or (iv) the issuance of
securities in connection with a bona fide business acquisition of or by the
Company, whether by merger, consolidation, sale of assets, sale or exchange of
stock or otherwise.
2.5 KEY-MAN INSURANCE. The Company shall obtain and maintain in full
force and effect for a period of five (5) years from the date of Closing term
life insurance in the amounts of $5,000,000 and $2,000,000 on the lives of
Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, respectively, with proceeds payable to
the Company until such time as the Board of Directors determines that such
insurance should be discontinued.
2.6 TERMINATION OF CERTAIN COVENANTS. The covenants set forth in
Sections 2.4, 2.5 and 2.6 shall terminate and be of no further force or effect
upon the consummation of the sale of securities pursuant to a bona fide, firmly
underwritten public offering of shares of common stock, registered under the
Act, at an offering price of at least $5.00 per share (appropriately adjusted
for any stock split, dividend, combination or other recapitalization) and
resulting in proceeds to the Company of at least $20 million.
3. NONCOMPETITION.
3.1 AGREEMENT OF COMPANY. The Company agrees, for itself and its
successors, assigns, and any entity which it controls, that, in consideration of
Synopsys' approval, as the sole stockholder of Company, of the investments being
made by the Investors and the other transactions contemplated in connection
therewith, the Company will be bound to the restrictions described in this
Section 3.1.
(a) During the Restriction Period (as defined in Section 3.5
hereof), the Company will not, anywhere in the world in any capacity (whether as
an agent, consultant, advisor, independent contractor, partner or otherwise) (i)
develop, sell, license, market, distribute or support any EDA product or
service, (ii) provide training or consulting services involving EDA, or (iii)
run, own, manage, operate, control or invest in any company or other entity that
engages in any activity involving EDA; provided, however, that (x) in the event
the Company is acquired in a transaction permitted by Section 3.3 hereof, this
prohibition shall not apply to (I) the EDA activities of the acquiror as they
existed on the date of such acquisition or (II) additional EDA activities
commenced by the acquiror after the date of such acquisition if such activities
are conducted entirely by persons who were not employees or officers of the
Company on or before the date of such acquisition and without any use of any
patent, trademark, copyright or other intellectual property or other asset owned
by the Company on or before
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the date of such acquisition, (y) this section shall not prohibit the Company
from owning less than a 20% equity interest in a company that derives less than
20% of its revenues from EDA activities, and (z) anything to the contrary in
this Section 3.1 notwithstanding, the Company may acquire a company which
derives more than 20% of its revenues from EDA activities, provided that (a)
Synopsys consents to the acquisition, which consent shall not be unreasonably
withheld or delayed, and (b) the Company, with reasonable promptness, terminates
such EDA activities through commercially reasonable means including, but not
limited to, asset sales. Synopsys acknowledges that the Company is not in
violation of this Section 3.1 on the date hereof.
(b) (i)"EDA" shall mean electronic design automation products
and services (including, without limitation, logic synthesis, test and timing
analysis, verification, emulation, simulation, modeling, design reuse, physical
design and hardware-software co-verification) for integrated circuits (including
systems-on-a-chip) or circuit sub-elements contained therein; provided, however,
that EDA does not include Systems Level products, services or other activities
or FPGA Analysis products, services or other activities.
(ii) "Systems Level" means the design, test and timing analysis, verification,
simulation, and emulation of systems comprising multiple discrete integrated
circuit components and associated electrical interconnections; provided,
however, that the term "Systems Level" excludes the design, test and timing
analysis, verification, simulation, and emulation of individual application
specific integrated circuits, as that term is understood in the industry on the
date hereof ("ASICs") or circuit sub-elements contained therein.
Notwithstanding the foregoing, nominal or incidental capabilities or
applicability of software to EDA shall not be deemed to render otherwise Systems
Level products, services or other activities within the definition of EDA.
(iii) "FPGA Analysis" means designing, evaluating,
configuring, programming, verifying, simulating and analyzing one or more field
programmable gate arrays, as that term is understood in the industry on the date
hereof ("FPGAs"), that are components of a system comprising multiple discrete
integrated circuit components and associated electrical interconnections.
(c) (1) Anything to the contrary in this Section 3.1
notwithstanding, until the earlier of (i) the end of the initial term of the VCS
OEM Agreement and (ii) the termination of the VCS OEM Agreement by Synopsys for
a reason other than a breach of such Agreement by the Company, the Company will
not (directly or indirectly and whether as an agent, consultant, advisor,
independent contractor, partner or otherwise) develop, sell, license, market,
distribute or support a Verilog simulator with functionality overlapping the
functionality of VCS, unless Synopsys is in material breach of the VCS OEM
Agreement and the Company has given notice of termination.
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(2) The restrictions contained in this subsection will not
apply to the distribution by the Company of a third party Verilog simulation
product with functionality overlapping that of VCS (a "Replacement Simulator")
if (I) there is a price increase for the product made available under the VCS
OEM Agreement that renders such product non-competitive given the functionality
of such product; (II) there is a reduction in the functionality of the product
made available under the VCS OEM Agreement, and the resulting product is not
competitive at the price Synopsys proposes to charge the Company; (III) there is
significant enhancement in the functionality of Verilog simulators available for
distribution by the Company compared to the functionality of the product offered
under the VCS OEM Agreement, with the result that the product offered under the
VCS OEM Agreement is not competitive or (IV) Synopsys ceases to support the
version of VCS made available to the Company's customers under the VCS OEM
Agreement. Prior to entering into any agreement to distribute a Replacement
Simulator (w) the Company must provide written notice to Synopsys that it
believes one of the foregoing events has occurred, (x) Synopsys is given 30 days
to review such notice; (y) the parties meet and discuss in good faith potential
remedies for the situation and (z) if such discussions fail Synopsys has the
opportunity to take the matter before a mutually acceptable impartial third
party, and if Synopsys elects to do so such third party determines that the
Company is justified in invoking the preceding sentence. The Company agrees
that as of the date of this Agreement the functionality and price of the product
made available under the VCS OEM Agreement are competitive.
(d) (1) Anything to the contrary in this Section 3.1
notwithstanding, until the earlier of (i) date of end of initial term of the
FPGA Express Agreement and (ii) the termination of the FPGA Express OEM
Agreement by Synopsys for a reason other than a breach of such Agreement by the
Company, the Company will not anywhere in the world (directly or indirectly and
whether as an agent, consultant, advisor, independent contractor, partner or
otherwise) (i) develop a logic synthesis tool for ASICs or (ii) develop, sell,
license, market, distribute or support any product or service having the logic
synthesis or logic analysis functionality implemented in FPGA Express, unless
Synopsys is in material breach of the FPGA Express OEM Agreement.
(2) The restrictions contained in this subsection will not
apply to the distribution by the Company of a third party product having the
logic synthesis or logic analysis functionality implemented in FPGA Express (a
"Replacement Synthesis Product") if (I) there is price increase for the product
made available under the FPGA Express OEM Agreement that renders such product
non-competitive given the functionality of such product; (II) there is a
reduction in the functionality of the product made available under the FPGA
Express OEM Agreement, and the resulting product is not competitive at the price
Synopsys proposes to charge the Company; (III) there is significant enhancement
in the functionality of FPGA synthesis products available for distribution by
the Company compared to the functionality of the product offered under the FPGA
Express OEM Agreement, with the result that the product offered under the FPGA
Express OEM Agareement is not competitive or (IV) Synopsys ceases to support the
version of FPGA Express made available to the Company's customers under the FPGA
Express
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OEM Agreement. Prior to entering into any agreement to distribute a Replacement
Syntheses Product (w) the Company must provide written notice to Synopsys that
it believes one of the foregoing events has occurred, (x) Synopsys is given 30
days to review such notice; (y) the parties meet and discuss in good faith
potential remedies for the situation and (z) if such discussions fail Synopsys
has the opportunity to take the matter before a mutually acceptable impartial
third party, and if Synopsys elects to do so such third party determines that
the Company is justified in invoking the preceding sentence. The Company agrees
that as of the date of this Agreement the functionality and price of FPGA
Express are competitive.
(e) During the Restricted Period, the Company will not anywhere
in the world (directly or indirectly and whether as an agent, consultant,
advisor, independent contractor, partner or otherwise) develop, sell, license,
market, distribute or support any product or service that performs FPGA
Analysis, and that is not being offered by the Company on the date of execution
of this Agreement, unless the Company shall have first offered to Synopsys the
opportunity to provide the Company with such product or service and Synopsys
shall have declined to provide such a product or service to the Company or to
develop such a product for the Company on commercially reasonable terms. The
Company agrees that if Synopsys proposes to replace any of the Company's FPGA
Analysis products or capabilities with products or capabilities developed by
Synopsys (e.g., timing analysis functionality currently offered by Blast), the
Company will evaluate such replacement proposal in good faith and, upon the
negotiation of commercially reasonable terms, will replace or substitute such
products or capabilities with the products or capabilities offered by Synopsys;
provided, however, that nothing set forth in this Section 3.1(d) shall require
the Company to replace or substitute any products, capabilities or technologies
existing on the date that Synopsys makes commercially available such product,
capability, or technology, or to replace or postpone future upgrades to existing
products, capabilities or technologies.
3.2 NONSOLICITATION. The Company further agrees that it will not
during the Restriction Period:
(a) personally or through others, encourage, induce, attempt to
induce, solicit or attempt to solicit (on their own behalf or on behalf of any
other person or entity) any employee of Synopsys or any of Synopsys'
subsidiaries to leave his or her employment with Synopsys or any of Synopsys'
subsidiaries;
(b) personally or through others, interfere or attempt to
interfere with the relationship or prospective relationship of Synopsys or any
of Synopsys' subsidiaries with any person or entity that is, was or is expected
to become a customer or client of Synopsys or any of Synopsys subsidiaries.
3.3 PROHIBITIONS ON SALE. During the Restricted Period with respect
to Cadence (as defined herein) and for a period of six months from the date
hereof with respect to any other person or entity, the Company will not, and
will instruct its respective directors,
-19-
officers, employees, representatives, investment bankers, agent, and affiliates
not to, directly or indirectly (i) solicit or encourage submission of any
Acquisition Proposal (as defined herein) by Cadence Design Systems, Inc., its
subsidiaries, or affiliates (collectively, "Cadence") or any other person or
entity or (ii) participate in any discussion or negotiations with, or disclose
any non-public information concerning the Company to, or afford access to the
properties, books, or records of the Company to, or otherwise assist or
facilitate to, or afford access to the properties, books, or records of the
Company to, or otherwise assist or facilitate, or enter into any agreement or
understanding with Cadence or any other person or entity in connection with any
Acquisition Proposal. For purposes of this Agreement, an "Acquisition Proposal"
means any proposal or offer relating to (i) any merger, consolidation, sale or
license of substantial assets or similar transactions involving the Company or
any affiliate of the Company and Cadence or any other person or entity or (ii)
sales by the Company or any affiliate of the Company of any shares of its
capital stock or other ownership interests to Cadence or any other person or
entity. The Company will (i) promptly notify Synopsys if it receives any
proposal or written inquiry or written request for information in connection
with an Acquisition Proposal or potential Acquisition Proposal involving Cadence
or any other person or entity and (ii) notify Synopsys of all terms and
conditions of such Acquisition Proposal. In addition, during the Restricted
Period or the period ending six months from date hereof, as applicable, the
Company will not, and will instruct its directors, officers, employees,
representatives, investment bankers, agents, and affiliates not to, directly or
indirectly, make or authorize any public statement, recommendation, or
solicitation of any Acquisition Proposal made by Cadence or any other person or
entity.
3.4 OPTION PLAN. During the Restricted Period, the Company will not
approve any increase in the number of shares reserved for issuance under its
1998 Stock Incentive Plan.
3.5 RESTRICTION PERIOD. For purposes of this Agreement, the
"Restriction Period" shall mean the period beginning on date of this Agreement
and ending on the earlier to occur of (i) two years from the date hereof and
(ii) the closing of the Initial Offering.
3.6 AGREEMENT OF INVESTORS. Each Investor agrees, for itself and its
successors, assigns, and any entity which it controls that, in consideration of
Synopsys' approval of the investments being made by the Investors, it will use
its reasonable best efforts consistent with its status as a stockholder of the
Company (or to the extent such Investor is entitled to appoint or elect a member
of the Company's Board of Directors, shall cause such director) to cause the
Company to comply with the provisions of this Section 3. Without limiting the
foregoing, each Investor further agrees that at any meeting of stockholder or
pursuant to the solicitation of any written consent (i) relating to an
Acquisition Proposal involving the Company and Cadence (if such vote is
solicited prior to the end of the Restricted Period) or involving the Company
and any other person or entity (if such vote is solicited prior to the end of
six months from the date of this Agreement), it will vote all shares of the
Company's voting securities held by such Investor against such Acquisition
Proposal and (ii) relating to any increase in the number of shares reserved for
issuance under the Company's 1998 Stock Incentive Plan that would result in a
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violation of Section 3.4 above, it will vote all shares of the Company's voting
securities held by such Investor against approval of any such increase.
3.7 PERMITTED INVESTMENTS. Nothing in this Section 3 shall prevent
any Investor from investing in, becoming a security holder of, or otherwise
taking an active management or investment interest in any entity (other than the
Company) that competes with Synopsys (other than any investment interest in
Cadence that would result from approval of any Acquisition Proposal involving
the Company and Cadence).
4. MISCELLANEOUS.
4.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
4.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
4.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4.5 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
delivery by confirmed facsimile transmission, nationally recognized overnight
courier service, or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
4.6 EXPENSES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
-21-
4.7 ENTIRE AGREEMENT: AMENDMENTS AND WAIVERS. This Agreement
(including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and thereof. Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and a majority-in-interest of the Investors provided,
however, that in the event that such amendment or waiver adversely affects the
obligations and/or rights of Synopsys in a different manner than the other
Holders, such amendment or waiver shall also require the written consent of
Synopsys. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Registrable Securities each future
holder of all such Registrable Securities, and the Company.
4.8 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
4.9 AGGREGATION OF STOCK. All Registrable Securities held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS IMMEDIATELY]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
VIEWLOGIC SYSTEMS, INC.
By:
----------------------------------
Title:
SYNOPSYS, INC.
By:
----------------------------------
Title:
INVESTORS:
DLJ Capital Corp.
By:
----------------------------------
Xxxxx X. Xxxxxxx, Attorney-in-Fact
Address:
00000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR'S RIGHTS AGREEMENT DATED OCTOBER ___, 1998]
INVESTORS:
DLJ ESC II, L.P.
By: DLJ LBO Plans
Management Corporation
Its: Manager
By:
----------------------------------
Xxxxx X. Xxxxxxx, Attorney-in-Fact
Address:
00000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Sprout Capital VIII, L.P.
By: DLJ Capital Corp.
Its: Managing General Partner
By:
----------------------------------
Xxxxx X. Xxxxxxx, Attorney-in-Fact
Address:
00000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Sprout Venture Capital, L.P.
By: DLJ Capital Corp.
Its: Managing General Partner
By:
----------------------------------
Xxxxx X. Xxxxxxx, Attorney-in-Fact
Address:
00000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR'S RIGHTS AGREEMENT DATED OCTOBER ___, 1998]
INVESTORS:
Sprout Growth II, L.P.
By: DLJ Capital Corp.
Its: Managing General Partner
By:
----------------------------------
Xxxxx X. Xxxxxxx, Attorney-in-Fact
Address:
00000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
The Sprout CEO Fund, L.P.
By: DLJ Capital Corp.
Its: Managing General Partner
By:
----------------------------------
Xxxxx X. Xxxxxxx, Attorney-in-Fact
Address:
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Xxxxxxx Capital Partners II, L.P.
By:
----------------------------------
Xxxx X. Xxxxxxxxxx
Its: General Partner
Address:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR'S RIGHTS AGREEMENT DATED OCTOBER ___, 1998]
Xxxxxxx Capital Partners II (Bermuda), L.P.
By:
----------------------------------
Xxxx X. Xxxxxxxxxx
Its: General Partner
Address:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Marquette Venture Partners III, L.P.
By: Marquette III, L.L.C.
Its: General Partner
By:
----------------------------------
Xxxxx X. Xxxxxxxx or Xxxxx X. Xxxx
Its: Authorized Signatory
Address:
000 Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------
Xxxx X. Xxxxxx
Address:
000 Xxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
--------------------------------------
Xxxx Xxxx
Address:
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR'S RIGHTS AGREEMENT DATED OCTOBER ___, 1998]
