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EXHIBIT 10.20
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SECURED PROMISSORY NOTE
$201,581.40 March 23, 1998
FOR VALUE RECEIVED, the undersigned, Moshe Gavrielov ("Purchaser") hereby
promises to pay Verisity Design, Inc., a California corporation ("Verisity-
California") or order (the "Holder"), at its principal offices, or such other
place as the Holder may direct, on the date (the "Maturity Date") which is the
earlier of (1) March 23, 2002, or (2) sixty days after the termination of
Purchaser's employment with Verisity-California, the principal sum of TWO
HUNDRED AND ONE THOUSAND FIVE HUNDRED EIGHTY-ONE and 40/100 Dollars
($201,581.40), with interest from the date of this Promissory Note, payable
annually on the unpaid principal sum from time to time outstanding, in lawful
money of the United States, at the lesser of (i) the relevant mid-term
applicable federal rate in effect as of the date of this Promissory Note as
published by the Internal Revenue Service (i.e. 5.59% per annum), or (ii) the
maximum rate permitted under applicable law.
This Note is executed and delivered together with a Pledge Agreement
between Purchaser and the Holder by which Purchaser has pledged to Holder, among
other things, his right, title, and interest in and to SIX HUNDRED SEVENTY-ONE
THOUSAND NINE HUNDRED THIRTY-EIGHT (671,938) ordinary shares ("Shares") of
Verisity Ltd., a company organized under the laws of the State of Israel and the
sole shareholder of Verisity-California, such shares having been purchased with
the cash proceeds of a loan from Verisity-California to Purchaser which is
evidenced by this Note. In addition to the security interest created under the
Pledge Agreement, this Note is intended to evidence a full recourse obligation
of Purchaser.
This Note may be prepaid by Purchaser in whole or in part, at any time or
from time to time, without penalty or premium. Purchaser may pay any principal
outstanding on this Note by conveying to Verisity-California any Shares then
owned by him that are "Vested" within the meaning of the Share Restriction
Agreement between Purchaser and Verisity Ltd., by means of delivery of a
transfer deed to Verisity-California with respect to such Shares, with the
amount of such payment being equal to the Fair Market Value of such Shares, the
determination of which will be in the manner set forth in the 1996 U.S. Stock
Option Plan of Verisity Ltd.
Purchaser waives diligence, presentment, demand, protest, and notice of
protest, dishonor, and nonpayment.
If any action or proceeding is brought by the Holder to enforce payment of
this Note, then the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred therein.
This Note is to be construed in accordance with and be governed by the laws
of the State of California applicable to contracts made and to be performed in
the State of California.
SIGNED, as of the date shown above, by
/s/ Moshe Gavrielov
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Moshe Gavrielov
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SPOUSAL CONSENT
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The undersigned is the spouse of Moshe Gavrielov, referred to in the attached
PLEDGE AGREEMENT dated as of March 23, 1998 (the "Agreement") with Verisity
Design, Inc. and acknowledges that she:
1. Has received and reviewed, understands and approves of the Agreement
(including its attachments);
2. Consents to the Agreement, and agrees to be irrevocably bound by its terms
to the extent that she now has or may obtain any interest (including any joint
or community property interest) in the Pledged Collateral covered by the
Agreement;
3. Hereby appoints her spouse as her attorney-in-fact with respect to any
amendment, exercise of any rights, or taking of any action with respect to the
Agreement and the Pledged Collateral that is subject to it; and
4. Understands that Verisity Design, Inc. is relying upon this consent in
entering into the Agreement, in issuing the Shares that are subject to it, and
in not taking further steps to protect its interests.
Date: March 23, 1998
Signature: /s/ Ewa Gavrielov
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Print Name: EWA GAVRIELOV
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