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Exhibit 10.42

SETTLEMENT ALLOCATION AGREEMENT

    THIS SETTLEMENT ALLOCATION AGREEMENT is made this 27th day of April, 2001,
between WIND RIVER SYSTEMS KABUSHIKI KAISHA, a corporation organized and
existing under the laws of Japan and having its registered office at Ebisu Prime
Square Tower, 1-1-39 Hiroo, Shibuya-ku, Tokyo 150-0012, Japan ("WRSKK"), and
KOBE STEEL, LTD., a corporation organized and existing under the laws of Japan
and having its registered office at 5-1 Wakinohama-Kaigandori 1-chome, Chuo-ku,
Kobe, Japan ("Kobe").

    WHEREAS, on 30 March 2001 WRSKK and Kobe entered into that certain
Settlement Agreement ("Settlement Agreement"), wherein the parties resolved
various issues arising from their termination of business relationships
involving WRSI computer software and other products ("WRSI Products");

    WHEREAS, pursuant to the terms and conditions of said Settlement Agreement,
WRSKK agreed to pay to Kobe a sum certain to settle any claims arising out of
the termination of their business relationships, if any, and for Kobe's customer
list, goodwill, etc. (hereinafter referred to collectively as "Settlement
Proceeds"); and

    WHEREAS, the particular breakdown of how the Settlement Proceeds would be
allocated among the various matters was mutually determined and agreed upon by
the parties hereto after engaging in discussions and consultations between the
parties.

    NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

    Section 1. Definitions.  All capitalized terms used in this Agreement shall
have the same meaning as defined in the Settlement Agreement unless otherwise
specifically defined herein.

    Section 2. Allocation of Settlement Proceeds.  Based upon discussions and
consultations between the parties hereto pursuant to the Settlement Agreement,
the parties decided that WRSKK shall be liable for Two Hundred Ninety Seven
Million Japanese Yen (JPY297,000,000) of the Settlement Proceeds and the parties
decided upon the following breakdown of how said portion of the Settlement
Proceeds will be allocated among the following components of the settlement:

1.   Value of Kobe's customer lists   JPY228,000,000
2.
 
Value of Kobe's maintenance contract lists
 
JPY 58,000,000
3.
 
Value of Kobe's list of potential customers identified during the period from 1
January 2001 to the present
 
JPY 11,000,000

The parties determined that the above-mentioned items were properly allocated to
WRSKK, since WRSKK will be using said information in its future business
endeavors. Furthermore, the parties have determined that the Japanese
Consumption Tax will be imposed on said portion of the Settlement Proceeds and
that WRSKK shall be responsible for paying the amount of said Consumption Tax to
Kobe. WRSKK agrees that it or its designee shall make payment to Kobe without
undue delay by wire transfer to an account designated by Kobe. WRSKK further
agrees that it or its designee will bear the cost of the telegraphic transfer
handling charges.

    Section 3. Entire Agreement.  This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement. Except as amended by this Agreement, the Settlement Agreement shall
continue to be unchanged and the Settlement Agreement as amended by this
Agreement sets

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forth the entire agreement between WRSKK and Kobe with respect to the subject
matter contemplated therein. No amendment to the Settlement Agreement or this
Agreement shall be effective unless in writing and signed by WRSKK and Kobe.

    Section 4. Law Governing.  This Agreement shall be governed by and construed
in accordance with the laws of Japan. The parties hereto hereby agree that any
suits brought hereunder shall be brought in the Tokyo District Court in Tokyo,
Japan, which will have sole and exclusive jurisdiction for the first instance.

[The remainder of this page is intentionally left blank.]

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    IN WITNESS WHEREOF, this Agreement has been made in duplicate, each of the
parties caused this Agreement to be executed by a duly authorized officer or
agent as of the date first above written, and the parties hereto shall each keep
one (1) original copy of the Agreement.

WIND RIVER SYSTEMS KABUSHIKI KAISHA,
a Japan corporation
 
 

By:

 

/s/ Giuseppe Kobayashi

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Name: Giuseppe Kobayashi
Office: Representative Director

 

 

Place and Date of Signing: Tokyo, Japan, 27 April 2001

"WRSKK"

 

 

KOBE STEEL, LTD.,
a Japan corporation

 

 

By:

 

/s/ Yoshiro Nishimoto

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Name: Yoshiro Nishimoto
Office: General Manager

 

 

Place and Date of Signing: Kobe, Japan, 27 April 2001

"Kobe"

 

 

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Exhibit 10.42

SETTLEMENT ALLOCATION AGREEMENT