Exhibit 10.2

$47,439,000

MAGMA DESIGN AUTOMATION, INC.

2.00% Convertible Senior Notes due 2010

REGISTRATION RIGHTS AGREEMENT

March 5, 2007

To the Initial Purchasers set forth on

Schedule A attached hereto

Ladies and Gentlemen:

Magma Design Automation, Inc., a Delaware corporation (the “Company”), proposes
to issue to the initial purchasers set forth on Schedule A attached hereto (the
“Initial Purchasers”), upon the terms set forth in those certain exchange
agreements, each dated February 27, 2007 (each, an “Exchange Agreement” and,
collectively, the “Exchange Agreements”), $47,439,000 aggregate principal amount
of its 2.00% Convertible Senior Notes due 2010 (the “Notes”). The Notes will be
issued pursuant to an Indenture, dated as of March 5, 2007 (the “Indenture”), by
and between the Company and U.S. Bank National Association, as trustee (the
“Trustee”). As an inducement to each Initial Purchaser to enter into its
respective Exchange Agreement, the Company agrees with each Initial Purchaser,
for the benefit of the beneficial owners (including the Initial Purchasers) from
time to time of the Notes and of the Underlying Common Stock (as defined herein)
issued upon conversion of the Notes (each of the foregoing, a “Holder” and,
collectively, the “Holders”), as follows:

1. Shelf Registration.

(a) The Company shall prepare and file with the Securities and Exchange
Commission (the “Commission”) in no event later than thirty (30) days (such
thirtieth day being a “Filing Deadline”) after the date hereof (the “Closing
Date”), a Shelf Registration Statement for an offering to be made on a delayed
or continuous basis pursuant to Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”) (a “Shelf Registration Statement”), registering
the resale from time to time by the Holders thereof (who satisfy certain
conditions relating to the provision of information in connection with the Shelf
Registration Statement) of all of the Registrable Securities (as defined herein)
(the “Initial Shelf Registration Statement”). The Initial Shelf Registration
Statement shall be on an appropriate form under the Securities Act permitting
registration of such Registrable Securities for resale by such Holders from time
to time in accordance with the methods of distribution elected by the Holders
and set forth in the Initial Shelf Registration Statement. The Company shall use
all commercially reasonable efforts to cause the Initial Shelf Registration
Statement to first be declared effective under the Securities Act as promptly as
is practicable but in any event within ninety (90) days after the Closing Date
(such ninetieth day being the “Effectiveness Deadline”; provided, however, that
if the Commission reviews the Registration Statement and provides comments
thereon or on any documents incorporated by reference therein, and/or requires
the Company to make modifications thereto or to any documents incorporated by
reference therein, then the Effectiveness Deadline shall be extended to one
hundred fifty (150) days after the Closing Date), and in accordance with the
terms of this Agreement to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement, as defined herein) continuously
effective under the Securities Act to permit the prospectus included therein to
be lawfully delivered by the Holders of the Registrable Securities, for a period
of two years (or for such longer period if extended pursuant to Section 2(h)
below) from the Closing Date or such shorter period that will terminate when all
the Registrable Securities covered by the Shelf Registration Statement (i) have
been transferred pursuant to a registration statement or Rule 144 under the
Securities Act, or any successor rule thereof, (ii) are, assuming such
securities are held by non-affiliates of the Company, eligible to be sold to the
public pursuant to Rule 144(k) under

--------------------------------------------------------------------------------

the Securities Act, or any successor rule thereof or (iii) have ceased to be
outstanding (such period, the “Effectiveness Period”). Subject to Section 1(d)
and Section 2(h) hereof, the Company shall be deemed not to have used all
commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective during the requisite period if it voluntarily takes any
action that would result in Holders of Registrable Securities covered thereby
not being able to offer and sell such Registrable Securities during that period,
unless such action is required by applicable law. At the time the Initial Shelf
Registration Statement is declared effective, each Holder who has provided the
Company with an appropriately completed and executed Selling Securityholder
Notice and Questionnaire (as defined herein) on or prior to the date five
(5) Business Days (as defined herein) prior to such time of effectiveness and
who holds Registrable Securities, shall be named as a selling securityholder in
the Initial Shelf Registration Statement and the related prospectus in such a
manner as to permit such Holder to deliver such prospectus to purchasers of
Registrable Securities in accordance with applicable law. None of the Company’s
securityholders (other than the Holders of Registrable Securities who satisfy
certain conditions relating to the provision of information in connection with
the Shelf Registration Statement) shall have the right to include any of the
Company’s securities in the Shelf Registration Statement.

(b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than pursuant to Section 1(d) or Section 2(h) or
because all Registrable Securities registered thereunder have been resold
pursuant thereto or have otherwise ceased to be Registrable Securities), the
Company shall use all commercially reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within thirty (30) days of such cessation of effectiveness amend the Shelf
Registration Statement in a manner reasonably expected to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an additional Shelf
Registration Statement covering all of the securities that as of the date of
such filing are Registrable Securities (a “Subsequent Shelf Registration
Statement”). If a Subsequent Shelf Registration Statement is filed, the Company
shall use all commercially reasonable efforts to cause the Subsequent Shelf
Registration Statement to become effective as promptly as is practicable after
such filing and to keep such Subsequent Shelf Registration Statement
continuously effective until the end of the Effectiveness Period.

(c) The Company shall supplement and amend the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement, if
required by the Securities Act or, to the extent to which the Company does not
reasonably object, as reasonably requested by the Trustee on behalf of a
majority in interest of the registered Holders.

(d) Each Holder of Registrable Securities agrees that if such Holder wishes to
sell Registrable Securities pursuant to a Shelf Registration Statement and
related prospectus, it will do so only in accordance with this Section 1(d) and
Section 2(h). Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related prospectus
agrees to deliver an appropriately completed and executed Selling Securityholder
Notice and Questionnaire to the Company at least five (5) Business Days prior to
any intended effective date of the Shelf Registration Statement. Additionally,
from and after the date the Initial Shelf Registration Statement is declared
effective, the Company shall, as promptly as practicable after the date an
appropriately completed and executed Selling Securityholder Notice and
Questionnaire is delivered (i) (A) to the extent permitted by applicable law,
within ten (10) days after such date, file with the Commission a prospectus
supplement solely to name such Holder as a selling securityholder, or (B) if
required by applicable law, as promptly as practicable after such date, file
with the Commission a post-effective amendment to the Shelf Registration
Statement or prepare and, if required by applicable law, file a supplement to
the related prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other document required under the Securities
Act so that the Holder delivering such Selling Securityholder Notice and
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related prospectus in such a manner as to permit such Holder
to deliver such prospectus to purchasers of the Registrable Securities in
accordance with applicable law and, if the Company shall file a post-effective
amendment to the Shelf Registration Statement, use all commercially reasonable
efforts to cause such post-effective amendment to be declared effective under
the Securities Act as promptly as is practicable, but in any event by the date
(the “Amendment Effectiveness Deadline”) that is forty-five (45) days after the
date such post-effective amendment is required by this clause to be filed;
(ii) provide such Holder copies of any documents filed pursuant to clause (i) of
this Section 1(d); and (iii) notify such Holder as promptly as practicable after
the effectiveness under the Securities Act of any post-effective amendment filed
pursuant to clause

--------------------------------------------------------------------------------

(i) of this Section 1(d); provided that if such Selling Securityholder Notice
and Questionnaire is delivered during a Deferral Period (as defined in
Section 2(h)), the Company shall so inform the Holder delivering such Selling
Securityholder Notice and Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 2(h); provided, further that after the date of
effectiveness of the Initial Shelf Registration Statement, the Company shall not
be obligated to file more than one post-effective amendment in any 90-day period
(measured from the date any previous post-effective amendment has been filed, or
in the case of the first post-effective amendment, the date the first
appropriately completed and executed Selling Securityholder Notice and
Questionnaire is delivered to the Company after the date of effectiveness) for
the purpose of naming Holders as selling securityholders who were not so named
in the Shelf Registration Statement at the time of effectiveness.
Notwithstanding anything contained herein to the contrary, (i) the Company shall
be under no obligation to name any Holder that has not timely submitted an
appropriately completed and executed Selling Securityholder Notice and
Questionnaire to the Company as a selling securityholder in any Shelf
Registration Statement or related prospectus and (ii) the Amendment
Effectiveness Deadline shall be extended by up to ten (10) days after the
expiration of a Deferral Period (and the Company shall incur no obligation to
pay Additional Interest (as defined in Section 5(a)) during such extension) if
such Deferral Period is in effect on the Amendment Effectiveness Deadline. Any
Holder who, subsequent to the date the Initial Shelf Registration Statement is
declared effective, provides a Selling Securityholder Notice and Questionnaire
required by this Section 1(d) pursuant to the provisions of this Section
(whether or not such Holder has supplied the Selling Securityholder Notice and
Questionnaire at the time the Initial Shelf Registration Statement was declared
effective) shall be named as a selling securityholder in the Shelf Registration
Statement and/or related prospectus, each as amended or supplemented, in
accordance with the requirements of this Section 1(d).

(e) Notwithstanding any other provisions of this Agreement to the contrary, the
Company shall cause the Shelf Registration Statement and the related prospectus
and any amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement and as of the date of filing any amendment or supplement,
as applicable, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein (in the case of the prospectus, in light of
the circumstances under which they were made) not misleading.

(f) As used in this Agreement, the following terms shall have the following
meanings:

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.

“Common Stock” means the shares of common stock, $0.0001 par value per share, of
the Company and any other shares of common stock as may constitute “Common
Stock” for purposes of the Indenture, including the Underlying Common Stock.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.

“Notice Holder” means, on any date, any Holder that has delivered an
appropriately completed and executed Selling Securityholder Notice and
Questionnaire to the Company on or prior to such date and holds Registrable
Securities as of such date.

“Registrable Securities” means the Notes, until such Notes have been converted
into or exchanged for the Underlying Common Stock and, at all times subsequent
to any such conversion or exchange, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock have been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with the Shelf Registration Statement covering it, (ii) expiration of
the holding period that would be applicable thereto under Rule 144(k) under the
Securities Act were it not held by an affiliate of the Company or (iii) its
transfer to the public pursuant to

--------------------------------------------------------------------------------

Rule 144 under the Securities Act, or any successor rule thereof, and (B) as a
result of the event or circumstance described in any of the foregoing clauses
(i) through (iii), the legends with respect to transfer restrictions required
under the Indenture are removed or removable in accordance with the terms of the
Indenture or such legend, as the case may be.

“Selling Securityholder Notice and Questionnaire” means a written notice in the
form attached as Exhibit A hereto, delivered to the Company by a Holder.

“Underlying Common Stock” means the Common Stock into which the Notes are
convertible or which is issued upon any such conversion.

2. Registration Procedures. In connection with the Shelf Registration Statement
contemplated by Section 1 hereof, the following provisions shall apply:

(a) The Company shall (i) furnish to the Notice Holders, within ten (10) days
after the filing thereof with the Commission, a copy of any Shelf Registration
Statement and each amendment thereof and each supplement (other than supplements
that do nothing more than name Notice Holders in the Selling Securityholder
table of the Shelf Registration Statement and provide information with respect
thereto), if any, to the prospectus included therein and the Company shall use
all commercially reasonable efforts to reflect in the Shelf Registration
Statement, prior to effectiveness, such comments as the Notice Holders
reasonably may propose; and (ii) include the names of the Notice Holders who
propose to sell Registrable Securities pursuant to the Shelf Registration
Statement and who comply with the provisions hereof as selling securityholders.

(b) The Company shall give written notice to the Holders (upon the occurrence of
the event contemplated by clause (i) below) and the Notice Holders (upon the
occurrence of any of the events contemplated by clauses (ii) through
(vii) below) (which notice pursuant to clauses (iii) through (vii) hereof shall
be accompanied by an instruction to suspend the use of the prospectus until the
requisite changes have been made):

(i) within ten (10) days after the filing of the Shelf Registration Statement
(which notice may be delivered through The Depository Trust Company, a New York
corporation (“DTC”)) with the Commission;

(ii) when the Shelf Registration Statement or any amendment thereto has been
filed with the Commission and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective (which notice may be
delivered through DTC);

(iii) of any request by the Commission for amendments or supplements to the
Shelf Registration Statement or the prospectus included therein or for
additional information;

(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose;

(v) of the receipt by the Company or its legal counsel of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose;

(vi) of the happening of any event that requires the Company to make changes in
the Shelf Registration Statement or the prospectus in order that the Shelf
Registration Statement or the related prospectus neither contain an untrue
statement of a material fact nor omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made) not
misleading; and

(vii) the occurrence or existence of any pending corporate development with
respect to the Company that the Company believes may be material and that, in
the determination of the Company, makes it inadvisable and not in the best
interest of the Company to allow continued availability of the Shelf
Registration Statement and the related prospectus.

--------------------------------------------------------------------------------

(c) The Company shall make every commercially reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale.

(d) The Company shall furnish to each Holder of Registrable Securities named in
the Shelf Registration Statement, as amended, or any prospectus, as amended or
supplemented, without charge, at least one copy of the Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in writing, all
exhibits thereto (including those, if any, incorporated by reference).

(e) The Company shall, during the Effectiveness Period, deliver to each Holder
of Registrable Securities named in the Shelf Registration Statement, as amended,
or any prospectus, as amended or supplemented, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such person
may reasonably request. The Company consents, subject to the provisions of this
Agreement, to the use of the prospectus or any amendment or supplement thereto
by each of the selling Holders of the Registrable Securities in connection with
the offering and sale of the Registrable Securities covered by the prospectus,
or any amendment or supplement thereto, included in the Shelf Registration
Statement.

(f) Prior to any public offering of the Registrable Securities pursuant to any
Shelf Registration Statement the Company shall register or qualify or cooperate
with the Holders of the Registrable Securities included therein and their
respective counsel in connection with the registration or qualification of the
Registrable Securities for offer and sale under the securities or “blue sky”
laws of such states of the United States as any Holder of Registrable Securities
reasonably requests in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Registrable Securities covered by such Shelf Registration Statement; provided,
however, that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified or (ii) take any
action which would subject it to general service of process or to taxation in
any jurisdiction where it is not then so subject.

(g) The Company shall cooperate with the Notice Holders to facilitate the timely
preparation and delivery of certificates representing the Registrable Securities
to be sold pursuant to any Shelf Registration Statement free of any restrictive
legends and in such denominations and registered in such names as the Notice
Holders may request a reasonable period of time prior to sales of the
Registrable Securities pursuant to such Shelf Registration Statement.

(h) Upon the occurrence of any event contemplated by paragraphs (iii) through
(vi) of Section 2(b) above during the period for which the Company is required
to maintain an effective Shelf Registration Statement, the Company shall
promptly prepare and file a post-effective amendment to the Shelf Registration
Statement or a supplement to the related prospectus and any other required
document so that, as thereafter delivered to Notice Holders or purchasers of
Registrable Securities, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Company notifies the Notice Holders
in accordance with paragraphs (iii) through (vi) of Section 2(b) above to
suspend the use of the prospectus until the requisite changes to the prospectus
have been made or the Company otherwise notifies the Notice Holders of its
election to suspend the availability of the Shelf Registration Statement and
related prospectus pursuant to Section 2(b)(vii) above, then the Holders shall
suspend use of such prospectus (such period during which the availability of the
Shelf Registration Statement and any related prospectus is suspended being a
“Deferral Period”), and the period of effectiveness of the Shelf Registration
Statement provided for in Section 1(a) above shall each be extended by the
number of days from and including the date of the giving of such notice to and
including the date when the Notice Holders shall have been advised in writing by
the Company that the prospectus may be used or has received such amended or
supplemented prospectus pursuant to this Section 2(h). The Company will use all
commercially reasonable efforts to ensure that the use of the prospectus may be
resumed as promptly as is practicable, except that

--------------------------------------------------------------------------------

in the case of suspension of the availability of the Shelf Registration
Statement and related prospectus pursuant to Section 2(b)(vii) above, the
Company shall not be required to take such action until such time as it shall no
longer determine that continued availability of the Shelf Registration Statement
and the related prospectus is inadvisable and not in the best interests of the
Company. In addition to the provisions of Section 1(d), the Company shall be
entitled to exercise its right under this Section 2(h) to suspend the
availability of the Shelf Registration Statement or any prospectus, without
incurring or accruing any obligation to pay Additional Interest pursuant to
Section 5(a), for one or more periods not to exceed forty-five (45) days in any
three (3) month period and not to exceed, in the aggregate, ninety (90) days in
any 12-month period. For the avoidance of doubt, the suspension of availability
of the Shelf Registration Statement or any prospectus pursuant to Section 1(d)
shall not count against the periods permitted by the prior sentence.

(i) Not later than the effective date of the Initial Shelf Registration
Statement, the Company will provide a CUSIP number for the Registrable
Securities and provide the applicable trustee with printed certificates for the
Notes in a form eligible for deposit with DTC.

(j) The Company shall prepare and file with the Commission such amendments and
post-effective amendments to each Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement continuously effective for
the applicable period specified in Section 1(a) and shall cause the related
prospectus to be supplemented by any required prospectus supplement to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act. The Company will comply in all material respects with all rules
and regulations of the Commission to the extent and so long as they are
applicable to the Shelf Registration Statement and will make generally available
to its securityholders (or otherwise provide in accordance with Section 11(a) of
the Securities Act) an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act, no later than forty-five (45) days (or such
longer period as permitted by the Commission in the event the Company timely
files a notice with the Commission pursuant to Rule 12b-25 promulgated under the
Exchange Act) after the end of a 12-month period (or ninety (90) days, if such
period is a fiscal year (or such longer period as permitted by the Commission in
the event the Company timely files a notice with the Commission pursuant to Rule
12b-25 promulgated under the Exchange Act)) beginning with the first month of
the Company’s first fiscal quarter commencing after the effective date of the
Shelf Registration Statement, which statement shall cover such 12-month period.

(k) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, in a timely manner and containing such
changes, if any, as shall be necessary for such qualification. In the event that
such qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.

(l) The Company may require each Notice Holder to furnish to the Company such
information regarding the Notice Holder and the distribution of the Registrable
Securities as the Company may from time to time reasonably require for inclusion
in the Shelf Registration Statement, and the Company may exclude from such
registration the Registrable Securities of any Notice Holder that fails to
furnish such information within a reasonable time after receiving such request.

(m) The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other
action, if any, as any Holder shall reasonably request in order to facilitate
the disposition of the Registrable Securities pursuant to any Shelf Registration
Statement.

(n) The Company shall (i) make available, at reasonable times and in a
reasonable manner, for inspection by a representative of the Holders of
Registrable Securities, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement and any attorney, accountant or
other agent retained by the Holders of Registrable Securities or any such
underwriter, all relevant financial and other records, pertinent corporate
documents and properties of the Company and (ii) cause the Company’s officers,
directors, employees, accountants and auditors to supply all relevant
information reasonably requested by the Holders of Registrable Securities or any
such underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement prior to its effectiveness, in each case, as shall be
reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act; provided,
however, that any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such information shall

--------------------------------------------------------------------------------

be kept confidential by the Holders or any such underwriter, attorney,
accountant or agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation of
confidentiality.

(o) In connection with any proposed underwritten offering, the Company, if
requested by any Notice Holder of Registrable Securities named in a Shelf
Registration Statement, as amended, or any prospectus, as amended or
supplemented, shall cause (i) its counsel to deliver an opinion and updates
thereof relating to the Registrable Securities in customary form addressed to
such Holders and the managing underwriters, if any, thereof and dated, in the
case of the initial opinion, the effective date of such Shelf Registration
Statement (ii) its officers to execute and deliver all customary documents and
certificates and updates thereof requested by any underwriters of the applicable
Registrable Securities; and (iii) its independent public accountants (and the
independent accountants with respect to any other entity for which financial
information is provided in the Shelf Registration Statement) to provide to the
selling Notice Holders of the applicable Registrable Securities and any
underwriter therefor a comfort letter in customary form and covering matters of
the type customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation as
contemplated, and only if permitted by Statement of Auditing Standards No. 72.

(p) The Company will use all commercially reasonable efforts to (a) if the Notes
have been rated prior to the initial sale of such Notes, confirm such ratings
will apply to the Registrable Securities covered by a Shelf Registration
Statement, or (b) if the Notes were not previously rated, cause the Registrable
Securities covered by a Shelf Registration Statement to be rated with the
appropriate rating agencies, if so requested by Holders of a majority in
aggregate principal amount of Registrable Securities covered by such Shelf
Registration Statement, or by the managing underwriters, if any.

(q) In the event that any broker-dealer registered under the Exchange Act shall
underwrite any Registrable Securities or participate as a member of an
underwriting syndicate or selling group or “assist in the distribution” (within
the meaning of the Conduct Rules (the “Rules”) of the National Association of
Securities Dealers, Inc. (“NASD”)) thereof, whether as a Holder of such
Registrable Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company will assist such
broker-dealer in complying with the requirements of such Rules, including,
without limitation, by (i) if such Rules, including Rule 2720, shall so require,
engaging a “qualified independent underwriter” (as defined in Rule 2720) to
participate in the preparation of the Shelf Registration Statement relating to
such Registrable Securities, to exercise usual standards of due diligence in
respect thereto and, if any portion of the offering contemplated by such Shelf
Registration Statement is an underwritten offering or is made through a
placement or sales agent, to recommend the yield of such Registrable Securities,
(ii) indemnifying any such qualified independent underwriter to the extent of
the indemnification of underwriters provided in Section 5 hereof and
(iii) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Rules.

(r) The Company shall use all commercially reasonable efforts to take all other
steps necessary to effect the registration of the Registrable Securities covered
by a Shelf Registration Statement contemplated hereby.

(s) The Company shall as promptly as practicable (if reasonably requested by any
Holder who has timely delivered an appropriately completed and executed Selling
Securityholder Notice and Questionnaire and holds Registrable Securities
incorporate in a prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as such Notice Holder shall, on the
basis of an opinion of nationally recognized counsel experienced in such
matters, determine to be required to be included therein and make any required
filings of such prospectus supplement or such post-effective amendment;
provided, however, that the Company shall not be required to take any actions
under this Section 2(s) that are not, in the reasonable opinion of counsel for
the Company, in compliance with applicable law.

(t) The Company shall use all commercially reasonable efforts to cause the
Underlying Common Stock to be listed on any securities exchange or any automated
quotation system on which similar securities issued by the Company are then
listed, to the extent the Underlying Common Stock satisfies applicable listing
requirements.

--------------------------------------------------------------------------------

3. Registration Expenses.

(a) All expenses incurred by the Company and incident to the Company’s
performance of and compliance with this Agreement will be borne by the Company,
regardless of whether a Shelf Registration Statement is ever filed or becomes
effective, including without limitation:

(i) all registration and filing fees and expenses;

(ii) all fees and expenses of compliance with federal securities and state “blue
sky” or securities laws;

(iii) all expenses of printing, messenger and delivery services and telephone;

(iv) all fees and disbursements of counsel for the Company;

(v) all application and filing fees in connection with listing the Underlying
Common Stock on a national securities exchange or automated quotation system
pursuant to the requirements thereof; and

(vi) all fees and disbursements of independent certified public accountants of
the Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).

The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.

(b) In connection with any Shelf Registration Statement required by this
Agreement, the Company will bear or reimburse the Notice Holders for (i) the
reasonable fees and disbursements of one (1) firm of legal counsel named by
Notice Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Shelf Registration Statement (not to exceed $5,000 in
the aggregate); and (ii) in the event of an underwritten offering pursuant to
Section 7, the reasonable fees and disbursements of one (1) firm of legal
counsel named by the Managing Underwriters (not to exceed $5,000 in the
aggregate).

4. Indemnification.

(a) The Company agrees to indemnify and hold harmless each Holder of Registrable
Securities and each person, if any, who controls such Holder within the meaning
of the Securities Act or the Exchange Act (each Holder and such controlling
persons are referred to collectively as the “Indemnified Parties”) from and
against any losses, claims, damages or liabilities, joint or several, or any
actions in respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the
Registrable Securities) to which each Indemnified Party may become subject under
the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact contained in a
Shelf Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a Shelf Registration
Statement, or arise out of, or are based upon, 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, and shall reimburse, as incurred,
the Indemnified Parties for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that (i) the Company
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in a Shelf Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to a Shelf Registration in reliance upon and in
conformity with written information pertaining to such Holder and furnished to
the Company by or on behalf of such Holder specifically for inclusion therein
and (ii) with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus relating to a Shelf
Registration Statement, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Holder from whom the person asserting any
such losses, claims, damages or liabilities purchased the Registrable Securities
concerned, to the

--------------------------------------------------------------------------------

extent that a prospectus relating to such Registrable Securities was required to
be delivered by such Holder under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder results
from the fact that there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Registrable Securities to such
person, a copy of the final prospectus if the Company had previously furnished
copies thereof to such Holder; provided further, however, that this indemnity
agreement will be in addition to any liability which the Company may otherwise
have to such Indemnified Party. The Company shall also indemnify any
underwriters, their officers and directors and each person who controls such
underwriters within the meaning of the Securities Act or the Exchange Act to the
same extent as provided above with respect to the indemnification of the Holders
if requested by such Holders.

(b) Each Holder of Registrable Securities, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Company or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Shelf Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a Shelf Registration, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; and, subject to the
limitation set forth immediately preceding this clause, shall reimburse, as
incurred, the Company for any legal or other expenses reasonably incurred by the
Company or any such controlling person in connection with investigating or
defending any loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons. The Holder
shall also indemnify any underwriters, their officers and directors and each
person who controls such underwriters within the meaning of the Securities Act
or the Exchange Act to the same extent as provided above with respect to the
indemnification of the Company if requested by the Company.

(c) Promptly after receipt by an indemnified party under this Section 4 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 4, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 4 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. Notwithstanding the
indemnifying party’s election to assume the defense of the indemnified party in
an action, the indemnified party shall have the right to employ separate counsel
(including local counsel) and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel (and local counsel) if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a

--------------------------------------------------------------------------------

party and indemnity could have been sought hereunder by such indemnified party
unless such settlement includes an unconditional release of such indemnified
party from all liability on any claims that are the subject matter of such
action, and does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 4 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or
(b) above in such proportion as is appropriate to reflect the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or such Holder or such other indemnified party, as the case may
be, on the other, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this subsection (d). Notwithstanding any other
provision of this Section 4(d), the Holders of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Registrable Securities
pursuant to a Shelf Registration Statement exceeds the amount of damages which
such Holders have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this subsection
(d), each person, if any, who controls such indemnified party within the meaning
of the Securities Act or the Exchange Act shall have the same rights to
contribution as such indemnified party and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as the Company.

(e) The agreements contained in this Section 4 shall survive the sale of the
Registrable Securities pursuant to a Shelf Registration Statement and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified
party.

5. Additional Interest Under Certain Circumstances.

(a) Additional interest (the “Additional Interest”) with respect to the Notes
that are Registrable Securities shall be assessed as follows if any of the
following events occur (each such event in clauses (i) through (iv) below being
herein called a “Registration Default”):

 

  (i) the Initial Shelf Registration Statement required by this Agreement is not
filed with the Commission on or prior to the Filing Deadline;

 

  (ii) the Initial Shelf Registration Statement required by this Agreement is
not first declared effective by the Commission on or prior to the Effectiveness
Deadline;

 

  (iii) the Company has failed to perform its obligations set forth in
Section 1(d) within the time period required therein; or

 

  (iv)

any Shelf Registration Statement required by this Agreement has been declared
effective by the Commission but such Shelf Registration Statement or related
prospectus thereafter ceases to be effective or useable (subject to the
Company’s right to suspend the use of the Shelf Registration Statement and the
prospectus as set forth in Section 1(d) and Section 2(h)) in accordance with the
provisions of this Agreement and during the periods specified herein and (A) the
Company does not cure the Shelf Registration Statement within five (5) Business
Days (which shall not be deemed

--------------------------------------------------------------------------------

 

to extend the incurrence and accrual of any obligation to pay Additional
Interest beyond the time provided for in the second to last sentence of
Section 2(h)) after it ceases to be effective or useable by a post-effective
amendment or additional Shelf Registration Statement being filed and declared
effective or a report filed pursuant to the Exchange Act or (B) if applicable,
the Company does not terminate any Deferral Period within the time provided for
in the second to last sentence of Section 2(h).

Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Company or pursuant to operation of law or as a result of any
action or inaction by the Commission.

Additional Interest shall accrue on the Notes that are Registrable Securities
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all such Registration Defaults have been
cured, at a rate of the Additional Interest Rate of the aggregate principal
amount of the Notes that are Registrable Securities. The “Additional Interest
Rate” shall mean (A) for periods that only include Business Days on or before
the day that is 90 days after the commencement of a Registration Default,
0.25% per annum, (B) for periods that only include days after the date that is
90 days after the commencement of a Registration Default, 0.50% per annum and
(C) for periods that include days both before and after the date that is 90 days
after the commencement of a Registration Default, a percentage equal to a
fraction, the numerator of which shall be the sum of (i) the number of days in
such period that are on or before the date that is 90 days after the
commencement of such Registration Default multiplied by 0.25% and (ii) the
number of days in such period that are after the date that is 90 days after the
commencement of such Registration Default multiplied by 0.50% and the
denominator of which shall be the total number of days comprising such period.
In the case of Additional Interest accruing solely as a result of a Registration
Default of the type described in Section 5(a)(iii), such Additional Interest
shall be paid only to the Notice Holders that have delivered appropriately
completed and executed Selling Securityholder Notice and Questionnaires that
caused the Company to incur the obligations set forth in Section 1(d) the
non-performance of which is the basis of such Registration Default.
Notwithstanding the foregoing, no Additional Interest shall accrue as to any
Registrable Security from and after the earlier of (x) the date such security is
no longer a Registrable Security and (y) the expiration of the Effectiveness
Period. The rate of accrual of the Additional Interest with respect to any
period shall not exceed the rate provided for in this paragraph notwithstanding
the occurrence of multiple concurrent Registration Defaults. Following the cure
of all Registration Defaults requiring the payment by the Company of Additional
Interest to the Notice Holders of Notes that are Registrable Securities pursuant
to this Section, the accrual of Additional Interest will cease (without in any
way limiting the effect of any subsequent Registration Default requiring the
payment of Additional Interest by the Company).

If a Notice Holder has converted some or all of its Notes into Common Stock, the
Holder will not be entitled to receive any Additional Interest with respect to
such Common Stock or the principal amount of the Notes that have been so
converted. In addition, in no event will Additional Interest be payable in
connection with a Registration Default relating to a failure to register the
Underlying Common Stock. For the avoidance of doubt, if the Company fails to
register both the Notes and the Underlying Common Stock, then Additional
Interest will be payable solely in connection with the Registration Default
relating to the failure to register the Notes.

No other monetary damages shall be available to the Holders of Registrable
Securities for a Registration Default.

The Trustee shall be entitled, on behalf of Holders of Notes or Underlying
Common Stock, to seek any available remedy for the enforcement of this
Agreement, including, with respect to Holders of Notes, for the payment of any
Additional Interest.

All of the Company’s obligations set forth in this Section 5 that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full.

The parties hereto agree that the Additional Interest provided for in this
Section 5 constitutes a reasonable estimate of the damages that may be incurred
by Holders of Notes that are Registrable Securities by reason of the failure of
the Initial Shelf Registration Statement to be filed or declared effective or
available for effecting resales of Notes that are Registrable Securities in
accordance with the provisions hereof.

--------------------------------------------------------------------------------

(b) Any amounts of Additional Interest due pursuant to Section 5(a) will be
payable in cash semiannually in arrears with the first semiannual payment due on
the first May 15 or November 15 on which such Additional Interest begins to
accrue. The amount of Additional Interest will be determined by multiplying the
applicable Additional Interest Rate by the principal amount of the Notes that
are Registrable Securities, and further multiplied by a fraction, the numerator
of which is the number of days such Additional Interest Rate was applicable
during such period (determined on the basis of a 360-day year comprised of
twelve 30-day months), and the denominator of which is 360. The Notes that are
Registrable Securities entitled to payment of Additional Interest shall be
determined as of the Business Day immediately preceding the next payment date
for Additional Interest with respect to the Registrable Securities.

6. Rules 144 and 144A. The Company shall use all commercially reasonable efforts
to file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the request of any Holder, make publicly
available other information so long as necessary to permit sales of their
securities pursuant to Rules 144 and 144A. The Company covenants that it will
take such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). The Company will provide a copy of this Agreement to
prospective purchasers of Notes identified to the Company by the Initial
Purchasers upon request. Upon the request of any Notice Holder of Notes, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements. Notwithstanding the foregoing, nothing in this
Section 6 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.

7. Underwritten Registrations. If any of the Registrable Securities covered by
any Shelf Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering (the “Managing Underwriter”) will be selected by the
Holders of a majority in aggregate principal amount of such Registrable
Securities to be included in such offering (provided that Holders of Common
Stock issued upon conversion of the Notes shall not be deemed holders of Common
Stock, but shall be deemed to be holders of the aggregate principal amount of
Notes from which such Common Stock was converted), provided, however, that such
Managing Underwriters will be reasonably acceptable to the Company.

No person may participate in any underwritten registration hereunder unless such
person (i) agrees to sell such person’s Registrable Securities on the basis
reasonably provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.

8. Miscellaneous.

(a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 1 and 2 hereof may result
in material irreparable injury to the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, any Holder may obtain such
relief as may be required to specifically enforce the Company’s obligations
under Sections 1 and 2 hereof. The Company further agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.

(b) No Inconsistent Agreements. The Company will not on or after the date of
this Agreement enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof and will not enter into any
agreement granting the holders of Common Stock rights to participate in the
Initial Shelf Registration Statement or the Shelf Registration Statement. The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company’s
securities under any agreement in effect on the date hereof. The Company
represents and warrants that, other than Holders of Notes, no holders of shares
of Common Stock have the right to participate in the Initial Shelf Registrations
Statement or the Shelf Registration Statement.

--------------------------------------------------------------------------------

(c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Registrable
Securities affected by such amendment, modification, supplement, waiver or
consents (provided that Holders of Common Stock issued upon conversion of Notes
shall not be deemed holders of Common Stock, but shall be deemed to be holders
of the aggregate principal amount of Notes from which such Common Stock was
converted).

(d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first-class mail, facsimile
transmission, or air courier that guarantees overnight delivery:

(1) if to a Holder of the Registrable Securities, at the most current address
given by such Holder to the Company.

(2) if to the Company, at its address as follows:

   if prior to March 12, 2007:

  Magma Design Automation, Inc.

  5460 Bayfront Plaza

  Santa Clara, CA 95014

  Attention: Chief Financial Officer

  if on or after March 12, 2007:

  Magma Design Automation, Inc.

  1650 Technology Drive

  San Jose, CA 95110

  Attention: Chief Financial Officer

with a copy to:

  O’Melveny & Myers LLP

  Embarcadero Center West

  275 Battery Street San Francisco, CA 94111

  Attention: Karen Dreyfus, Esq.

The Company by notice to any Holder may designate additional or different
addresses for subsequent notices or communications from such Holder. All such
notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; three business days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged
by recipient’s facsimile machine operator, if sent by facsimile transmission;
and on the day delivered, if sent by overnight air courier guaranteeing next day
delivery.

(e) Third-Party Beneficiaries. The Holders shall be third-party beneficiaries to
the agreements made hereunder between the Company, on the one hand, and the
Initial Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent they may deem such enforcement necessary or
advisable to protect their rights or the rights of Holders hereunder.

(f) Successors and Assigns. This Agreement shall be binding upon the Company and
its successors and assigns.

--------------------------------------------------------------------------------

(g) Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

(j) Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

(k) Securities Held by the Company. Whenever the consent or approval of Holders
of a specified percentage of principal amount of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its affiliates
(other than subsequent Holders of Registrable Securities if such subsequent
Holders are deemed to be affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

--------------------------------------------------------------------------------

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Initial Purchasers a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchasers and the Company in accordance with its terms.

 

Very truly yours, MAGMA DESIGN AUTOMATION, INC. By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

The foregoing Registration Rights Agreement is hereby

confirmed and accepted as of the date first above written.

 

By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT A

Selling Securityholder Notice and Questionnaire

The undersigned beneficial owner (the “Selling Securityholder”) of the 2.00%
Convertible Senior Notes due 2010 (the “Notes”) of Magma Design Automation, Inc.
(the “Company”) or the shares of the Company’s Common Stock, par value $0.0001
per share, issuable upon conversion of the Notes (the “Underlying Common Stock”
and, together with the Notes, the “Registrable Securities”) hereby gives notice
to the Company of its intention to sell or otherwise dispose of Registrable
Securities beneficially owned by it and listed below in Item 3 (unless otherwise
specified under Item 3) pursuant to the Shelf Registration Statement. The
undersigned, by signing and returning this Selling Securityholder Notice and
Questionnaire, understands that it will be bound by the terms and conditions of
this Selling Securityholder Notice and Questionnaire and the Registration Rights
Agreement, dated as of March 5, 2007 (the “Registration Rights Agreement”),
among the Company and the Initial Purchasers thereto.

Pursuant to the Registration Rights Agreement, the undersigned has agreed to
indemnify and hold harmless the Company’s directors, the Company’s officers and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), from and against certain losses arising
in connection with statements concerning the undersigned made in the Shelf
Registration Statement or the related prospectus in reliance upon the
information provided in this Selling Securityholder Notice and Questionnaire.
The undersigned hereby acknowledges its obligations under the Registration
Rights Agreement to indemnify and hold harmless certain persons set forth
therein.

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:

 

(1)

  (a)    Full Legal Name of Selling Securityholder:     

 

  (b)    Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities listed in (3) below are held:     

 

  (c)    Full Legal Name of DTC Participant (if applicable and if not the same
as (b) above) through which Registrable Securities listed in (3) below are held:
    

 

(2)

  Address for Notices to Selling Securityholder:  

 

 

 

   Telephone (including area code):  

 

   Fax (including area code):  

 

   Contact Person:  

 

(3)

   Beneficial Ownership of Registrable Securities:

--------------------------------------------------------------------------------

                                                                               
                                        
                                        
                                        
                                                   

 

  (a) Type and Principal Amount/Number of Registrable Securities beneficially
owned:

                                                                               
                                        
                                        
                                        
                                        

 

  (b) CUSIP No(s). of such Registrable Securities beneficially owned:

                                                                               
                                        
                                        
                                        
                                        

 

(4) Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder:

Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Company other than the
Registrable Securities listed above in Item (3).

 

  (a) Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

                                                                               
                                        
                                        
                                        
                                        

 

  (b) CUSIP No(s). of such Other Securities beneficially owned:

                                                                               
                                        
                                        
                                        
                                        

 

(5) Relationship with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (5% or more) has held any
position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.

State any exceptions here:                              
                                        
                                        
                                        
                                                 

 

(6) Is the Selling Securityholder a registered broker-dealer?

Yes     ¨

No      ¨

If “Yes”, please answer subsection (a) and subsection (b):

 

  (a) Did the Selling Securityholder acquire the Registrable Securities as
compensation for underwriting/broker-dealer activities to the Company?

Yes     ¨

No      ¨

 

  (b) If you answered “No” to question 6(a), please explain your reason for
acquiring the Registrable Securities:

                                                                               
                                        
                                        
                                        
                                        

                                                                               
                                        
                                        
                                        
                                        

 

(7) Is the Selling Securityholder an affiliate of a registered broker-dealer?

--------------------------------------------------------------------------------

Yes     ¨

No      ¨

If “Yes”, please identify the registered broker-dealer(s), describe the nature
of the affiliation(s) and answer subsection (a) and subsection (b):

                                                                               
                                        
                                        
                                        
                                        

 

  (a) Did the Selling Securityholder purchase the Registrable Securities in the
ordinary course of business (if no, please explain)?

Yes     ¨

No      ¨            Explain:                         
                                        
                                        
                                                                            

 

  (b) Did the Selling Securityholder have an agreement or understanding,
directly or indirectly, with any person to distribute the Registrable Securities
at the same time the Registrable Securities were originally purchased (if yes,
please explain)?

Yes     ¨            Explain:                         
                                        
                                        
                                                                            

No      ¨

 

(8) Is the Selling Securityholder a non-public entity?

Yes     ¨

No      ¨

If “Yes”, please answer subsection (a):

 

  (a) Identify the natural person or persons that have voting or investment
control over the Registrable Securities that the non-public entity owns:

                                                                               
                                        
                                        
                                        
                                        

                                                                               
                                        
                                        
                                        
                                        

 

(9) Plan of Distribution:

Except as set forth below, the undersigned Selling Securityholder (including its
donees and pledgees) intends to distribute the Registrable Securities listed
above in Item (3) pursuant to the Shelf Registration Statement only as follows
(if at all): Such Registrable Securities may be sold from time to time directly
by the undersigned Selling Securityholder or, alternatively, in accordance with
the Registration Rights Agreement, through underwriters, broker-dealers or
agents. If the Registrable Securities are sold through underwriters or
broker-dealers, the Selling Securityholders will be responsible for underwriting
discounts or commissions or agent commissions. Such Registrable Securities may
be sold in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which may involve
cross or block transactions) (i) on any national securities exchange or
quotation service on which the Registrable Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the over-the-counter market,
or (iv) through the writing of options. In connection with sales of the
Registrable Securities or otherwise, the undersigned Selling

--------------------------------------------------------------------------------

Securityholder may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the Registrable Securities in the course of
hedging positions they assume. The undersigned Selling Securityholder may also
sell Registrable Securities short and deliver Registrable Securities to close
out short positions, or loan or pledge Registrable Securities to broker-dealers
that in turn may sell such securities.

State any exceptions here:                               
                                        
                                        
                                        
                                                

Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior agreement
of the Company.

The undersigned Selling Securityholder acknowledges that it understands its
obligations to comply with the provisions of the Securities Exchange Act of
1934, as amended, and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or regulations), in
connection with any offering of Registrable Securities pursuant to the Shelf
Registration Agreement. The undersigned agrees that neither it nor any person
acting on its behalf will engage in any transaction in violation of such
provisions.

Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.

In the event the undersigned transfers all or any portion of the Registrable
Securities listed in Item (3) above after the date on which such information is
provided to the Company other than pursuant to the Shelf Registration Statement,
the undersigned agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Selling Securityholder Notice and
Questionnaire and the Registration Rights Agreement.

In accordance with the undersigned’s obligation under the Registration Rights
Agreement to provide such information as may be required by law or by the staff
of the Commission for inclusion in the Shelf Registration Statement, the
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at anytime while the Shelf Registration Statement remains effective. All notices
hereunder and pursuant to the Registration Rights Agreement shall be made in
writing, by hand-delivery, first-class mail, or air courier guaranteeing
overnight delivery to the address set forth below.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (9) above and the inclusion
of such information in the Shelf Registration Statement and the related
prospectus. The undersigned understands that such information will be relied
upon by the Company in connection with the preparation or amendment of the Shelf
Registration Statement and the related prospectus.

Once this Selling Securityholder Notice and Questionnaire is executed by the
undersigned and received by the Company, the terms of this Selling
Securityholder Notice and Questionnaire, and the representations, warranties and
agreements contained herein, shall be binding on, shall inure to the benefit of
and shall be enforceable by the respective successors, heirs, personal
representatives, and assigns of the Company and the undersigned with respect to
the Registrable Securities beneficially owned by the undersigned and listed in
Item (3) above. This Selling Securityholder Notice and Questionnaire shall be
governed in all respects by the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Selling Securityholder Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

 

Dated:                    

                                              
                                                                               
Beneficial Owner     By:                                         
                                                                      Name:
                                        
                                                                Title:
                                        
                                                              

--------------------------------------------------------------------------------

PLEASE RETURN THE COMPLETED AND EXECUTED SELLING SECURITYHOLDER NOTICE AND
QUESTIONNAIRE TO THE COMPANY AT:

 

if prior to March 12, 2007:

Magma Design Automation, Inc.

5460 Bayfront Plaza

Santa Clara, CA 95014

Attention: Chief Financial Officer

if on or after March 12, 2007:

Magma Design Automation, Inc.

1650 Technology Drive

San Jose, CA 95110

Attention: Chief Financial Officer

with a copy to:

O’Melveny & Myers LLP

Embarcadero Center West

275 Battery Street

San Francisco, CA 94111

Attention: Karen Dreyfus, Esq.